Donovan, Gibson Team Up on Disaster Assistance Legislation
Washington, DC—April 21, 2016....Congressman Dan Donovan (NY-11) and Congressman Chris Gibson (NY-19) teamed up to introduce legislation addressing the severe inequities in disaster assistance after Hurricane Irene and Superstorm Sandy. Gibson sponsored the Federal Disaster Notification and Payment Protection Act, with Donovan as an original cosponsor. The bill addresses two core problems with the federal disaster recovery process: inaccurate or incomplete information about what assistance is available to disaster victims, and the requirement for the government to recoup overpayments caused by government error.
Congressman Donovan said, “The majority of constituent cases my office has handled stems from Sandy recovery, and the overwhelming majority of those involves the two issues addressed by this bill. Thousands of people applied for SBA loans on FEMA’s advice, not knowing their application would make them ineligible for grants down the road. This isn’t a fair or consistent way to deliver disaster assistance, and I applaud Congressman Gibson for his attention to this problem.”
“As the co-chair of the House Irene and Lee Task Force, I have made it my mission to ensure my constituents and all those affected by these devastating storms have the ability to recover fully,” said Congressman Gibson. “Thousands of New Yorkers have received disaster assistance, but our work continues to see that government agencies treat disaster victims quickly, fairly, and with full and accurate information. This bipartisan bill brings fairness and clarity to a system that’s vital to rebuilding our communities. I want to thank Congressman Donovan for joining with me and for his tremendous advocacy on this front.”
Debi Vadola, President of the Midland Beach Civic Association, said, “The catastrophe called Sandy was devastating enough, but what many homeowners have suffered since then, because of the misguidance of FEMA, makes it a double whammy. We can’t thank Congressman Donovan and Congressman Gibson enough for recognizing this wrong and doing their best to try to make it right.”
Federal disaster assistance for individuals usually comes from three agencies: FEMA, SBA, and HUD. Federal rules establish a hierarchy to prevent different agencies from paying for the same need. FEMA pays for initial repair and temporary expenses, SBA provides loans for costs above and beyond what FEMA covered, and, when Congress passes a disaster appropriations bill like it did after Sandy, HUD provides grants that are distributed through programs like Build it Back and NY Rising.
Most New Yorkers were unaware of the complex rules governing disaster assistance when they applied after Irene or Sandy. FEMA instructed disaster assistance applicants to apply for an SBA loan without informing them that the SBA loan might make them ineligible for future HUD grants. Those who followed FEMA’s instructions ended up with tens or hundreds of thousands of dollars in SBA loan debt, while others who did not apply for SBA loans received HUD grants through Build it Back or NY Rising. It is not good policy to determine who receives loans and who receives grants based only on poor or incomplete information to applicants.
Separately, federal rules require the government to recoup overpayments. This is necessary to counteract fraud and abuse. However, in some instances FEMA provided the wrong amount of assistance to disaster victims due to a miscalculation or paperwork error. Recipients then spent their FEMA assistance on home repairs and other disaster expenses without knowing they had received the wrong amount. Now, years later, FEMA is demanding those homeowners repay the funds they already spent. Many disaster victims already face difficult financial circumstances; it is unfair to demand thousands of dollars years later due to a government error the disaster victim never knew about.
The Federal Disaster Notification and Payment Protection Act addresses both problems. The legislation requires federal officials to provide written notification to applicants that describes the different categories of assistance that may be available and the impacts of accepting or declining each form of assistance. The bill further requires applicants to be notified of the repayment requirements or penalties if multiple categories of assistance are accepted. Lastly, the legislation prohibits FEMA from collecting overpayments that were a result of FEMA error.