The main federal assistance example is the one many remember as the Katrina era HUD CDBG-DR grants used to pay off or pay down homeowners SBA Disaster Loans in very large amount totaling an estimated $942 million of taxpayer money used to pay off SBA Loans that was using private sector lenders and banks for these loans.
SEC. 1210. DUPLICATION OF BENEFITS.
(a) IN GENERAL.-
(1) AUTHORITY.- Section 312(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5155(b)) is amended by adding at the end the following:
"(4) WAIVER OF GENERAL PROHIBITION.-
"(A)IN GENERAL.- The President may waive the general prohibition provided in sub-section (a) upon request of a Governor on behalf of the State or on behalf of a person, business concern, or any other entity suffering losses as a result of a major disaster or emergency, if the President finds such waiver is in the public interest and will not result in waste, fraud, or abuse. In making this decision, the President may consider the following:
"(i) The recommendations of the Administrator of the Federal Emergency Management Agency made in consultation with the Federal agency or agencies administering the duplicative program.
"(ii) If a waiver is granted, the assistance to be funded is cost effective.
"(iii) Equity and good conscience.
"(iv) Other matters of public policy considered appropriate by the President
"(B) GRANT OR DENIAL OF WAIVER.- A request under subparagraph (A) shall be granted or denied not later than 45 days after submission of such request.
"(C) PROHIBITION ON DETERMINATION THAT LOAN IS A DUPLICATION.- Notwithstanding subsection (c), in carrying out subparagraph (A), the President may not determine that a loan is a duplication of assistance, provided that all Federal assistance is used toward a loss suffered as a result of the major disaster or emergency.".
(2) LIMITATION.- This subsection, including the amendment made by paragraph (1), shall not be construed to apply to section 406 or 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5172, 5174).
(3) APPLICABILITY.- The amendment made by paragraph (1) shall apply to any major disaster or emergency declared by the President under section 401 or 501, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170, 5191) between January 1, 2016, and December 31, 2021.
(4) SUNSET.- On the date that is 5 years after the date of enactment of this Act, section 312(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5155(b)) is amended by striking paragraph (4), as added by subsection (a)(1) of this section.
(A) IN GENERAL.- Not later than 1 year after the date of enactment of this Act, the Administrator, in coordination with other relevant Federal agencies, shall submit to the congressional committees of jurisdiction a report conducted by all relevant Federal agencies to improve the comprehensive delivery of disaster assistance to individuals following a major disaster or emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
(B) CONTENTS.- The report required under subparagraph (A) shall include both administrative actions taken, or planned to be taken, by the agencies as well as legislative proposals, where appropriate, of the following:
(i) Efforts to improve coordination between the Agency and other relevant Federal agencies when delivering disaster assistance to individuals.
(ii) Clarify the sequence of delivery of disaster assistance to individuals from the Agency, and other relevant Federal agencies.
(iii) Clarify the interpretation and implementation of section 302 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5143) when providing disaster assistance to individuals, including providing a common interpretation across the Agency, and other relevant Federal agencies, of the definitions and requirements under such section 302.
(iv) Increase the effectiveness of communication to applicants for assistance programs for individuals after a disaster declaration, including the breadth of programs available and the potential impacts of utilizing one program versus another.
(C) REPORT UPDATE.- Not later than 4 years after the date of enactment of this subsection, the Administrator, in coordination with other relevant Federal agencies, shall submit to the congressional committees of jurisdiction an update to the report required under subparagraph (A).
(b) Special Rules -
(1) Limitation - This section shall not prohibit the provision of Federal assistance to a person who is or may be entitled to receive benefits for the same purposes from another source if such person has not received such other benefits by the time of application for Federal assistance and if such person agrees to repay all duplicative assistance to the agency providing the Federal assistance.
(2) Procedures - The President shall establish such procedures as the President considers necessary to ensure uniformity in preventing duplication of benefits.
(3) Effect of Partial Benefits - Receipt of partial benefits for a major disaster or emergency shall not preclude provision of additional Federal assistance for any part of a loss or need for which benefits have not been provided.
Gov. Edwards April 3rd, 2018 last letter to HUD.
Office of the Governor State of Louisiana
John Bel Edwards Governor
April 3, 2018
The Honorable Ben Carson
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Dear Secretary Carson,
As you are aware, the floods of 2016 devastated South Louisiana. More than 113,000 homes were damaged or destroyed and many families had their lives turned upside down. As I have stated to you in the past, the federal Duplication of Benefits (DOB) penalty is one of our greatest problem areas as we continue to recover.
The Bipartisan Budget Ac of 2018, which President Trump signed into law on February 9, 2018, includes language related to Small Business Administration (SBA) loans to homeowners as a duplication of other federal assistance. By inclusion of the language, Congress clearly intended to modify the current approach of federal agencies, including HUD, of counting all approved SBA loan amounts as a duplication of benefits against homeowners impacted by disasters.
Many impacted homeowners who applied for SBA loans, at FEMA’s insistence, and were approved, decied that drawing the full approved amounts of the loans would be unaffordable. Subsequently, these homeowners either did not draw any of the funds or drew only what they thought they could handle financially. They have now found themselves unable to access Community Development Block Grant (CDBG) funding to complete their rebuilding due to HUD’s interpretation of the DOB rules. Congress’ intent was clearly to allow these homeowners the ability to access additional assistance by making only those funds they have drawn count as a DOB.
It is critically important that HUD correctly interprets Congress' intent in this law and allows your grantees to offer grants to these homeowners for their remaining unmet rebuilding needs, ignoring SBA loan amounts that they never drew down. As we continue to rebuild from the floods, this remains the single greatest complaint for homeowners. Therefore, I am respectfully requesting guidance from your agency regarding your interpretation of this new law and how you intend to implement it. This information will allow us to assist the more than 5,200 homeowners currently facing the DOB penalty.
John Bel Edwards Governor