September 22, 2018

Cassidy Announces Progress on Duplication of Benefits Fix

WASHINGTON—U.S. Senator Bill Cassidy, M.D. (R-LA), released the following statement after the release of an updated version of legislation to reauthorize the Federal Aviation Administration (FAA) that includes several provisions sought by Cassidy as part of the Disaster Recovery Reform Act, including a fix for the Small Business Administration (SBA) loan duplication of benefits issue hurting Louisiana residents affected by flooding in 2016.

The House and Senate are both expected to vote on the legislation next week.

“Thousands of people in the great floods of 2016 were told to get an SBA loan and then found out that, because they did what they were told, they could not get a Restore Louisiana recovery grant. Folks were punished for being responsible and doing the right thing. This bill fixes that, and I look forward to voting for it,” said Dr. Cassidy. “It ensures that these Louisiana families have access to the resources they need to complete their recovery.”

The Cassidy-requested duplication of benefits fix (Section 1210) eliminates federal duplication of benefits restrictions directly affecting homeowners approved for or having drawn down SBA disaster loans as they seek to rebuild. Currently, federal disaster homeowners who qualify for SBA loans are prohibited from seeking Community Development Block Grant Disaster Recovery (CDBG-DR) funding to either repay their SBA disaster loans or use it to supplement assistance for recovery purposes. This measure modifies the Stafford Act to ensure that this duplication of benefits language interpretation does not continue to penalize disaster victims who were approved for SBA loans and then find themselves unable to receive CDBG-DR funds.

In addition to fixing the duplication of benefits issue, Senator Cassidy also secured other disaster recovery-related provisions, including:

Section 1219 – Right of Arbitration: Modifies the right of arbitration procedures by adopting the arbitration procedures used for Hurricane Katrina/Rita as opposed to the ineffective arbitration process that was provided for in Hurricane Sandy. This arbitration process would be used for all significant disputes with FEMA over project worksheets and would provide for a neutral arbitration process that would use the Civilian Board of Appeals as the independent arbitration board that resolves any disputes that applicants may have with FEMA.

Section 1207 – Flood Insurance: Waives Sec. 406 (d) of the Stafford Act that requires under the National Flood Insurance Program (NFIP) a $500,000 per facility deduction for schools, law enforcement and other public facilities that did not maintain flood insurance. This measure ensures the $500,000 penalty applies only to one building per campus as opposed to each individual building on campus for disasters that occurred in 2016. 

Section 1214 – Private Nonprofit Facility: Clarifies that food banks – i.e. Baton Rouge Food Bank – is explicitly eligible for disaster relief. Food banks are typically the first organization to begin distributing food well before FEMA or other private charitable groups arrive on the scene. This language would make domestic hunger relief entities, like food banks, along with long term recovery groups to be eligible to be reimbursed by FEMA for their disaster-related expenditures.

Section 1228 – Guidance on Inundated and Submerged Roads: Requires that FEMA and the Federal Highway Administration (FHA) develop and issue guidance to states regarding how they plan to reimburse states and localities for damages caused by flooding and/or other natural disasters. Currently, there is no clear guidance regarding repairing/replacing inundated and submerged roads damaged or destroyed by a major federal disaster. FEMA is not willing to reimburse states and localities any funding for damages caused by flooding or other natural disasters to roads even though in many cases these roads have been clearly damaged by these natural disasters.