Louisiana homeowners who took out disaster loans with the Small Business Administration after the 2016 floods would no longer be penalized from receiving Restore Louisiana grants, under federal legislation revised Wednesday.
A U.S. Senate commerce panel added the proposal to legislation reauthorizing the Federal Aviation Administration. It would loosen so-called “duplication of benefits” restrictions for homeowners looking to rebuild.
“There are thousands of people in the great floods of 2016 who were told to get an SBA loan and then found that they could not get a Restore Louisiana recovery grant because of some dumb quirk in the law,” Sen. Bill Cassidy (R-Louisiana) said in a release Wednesday. “This bill fixes that.”
After record floods destroyed Baton Rouge-area homes in August 2016, federal officials suggested that homeowners seek low-interest loans through the SBA. Thousands took that recommendation without realizing that such loans would block them from receiving subsequent grants, under federal guidelines.
Members of Louisiana’s congressional delegation have sought to free up the rule. The House of Representatives added similar recommendations to bills it advanced in May, with support from Rep. Garret Graves (R-Baton Rouge) and Rep. Cedric Richmond (D-New Orleans).
The Trump administration has been more hesitant to abolish the duplication penalty. Louisiana lawmakers have met several times with Housing and Urban Development Secretary Ben Carson, urging him to lift the rule, to no avail. In a policy statement this past April, the White House budget office opined that loosening benefit guidelines would “lead to significantly higher taxpayer spending for disaster programs… weakening FEMA’s ability to control costs.”
When the path to an administrative rewrite fizzled, Graves and Cassidy sought a congressional fix. If the Senate passes its version of the FAA reauthorization, the House will join in a conference committee. Cassidy expects the duplication of benefits issue to be resolved in the final legislation.
“It ensures that those folks so affected can finally get the resources they need to complete the recovery and rebuild,” he said.
Exactly when the Senate will vote on the reauthorization bill remains unclear.