Thousands of Louisiana flood victims who have been barred from homeowner rebuilding grants because they borrowed money through the federal Small Business Administration could soon see that change.
A deal to rework federal disaster-relief policy was included in a compromise struck by congressional leaders Saturday on an unrelated reauthorization of the Federal Aviation Administration.
The Advocate reports the bipartisan agreement is expected to be passed into law within weeks without significant additional changes.
Gov. John Bel Edwards and Louisiana congressional delegation members praised the agreement after seeking the policy change for two years since flooding devastated the Baton Rouge region in August 2016.
Once the deal is complete and federal guidance is issued, “we will immediately provide the assistance to homeowners who were previously impacted by this impediment,” Edwards said in a statement.
Republican U.S. Rep. Garret Graves, of Baton Rouge, lobbied colleagues two years for the change and helped write the provision he said appears on track to become federal law.
“Persistence overcomes stupidity,” Graves said Saturday.
Louisiana leaders have called the Small Business Administration’s “duplication of benefits” rules nonsensical.
Federal officials encouraged homeowners to take out low-interest loans from the SBA, and thousands did to rebuild their damaged homes. But federal rules then kept those people from being eligible for federal disaster grant money, regulations designed to prevent disaster victims from getting paid twice for the same damage.
Louisiana homeowners ended up facing decades of loan repayments when they’d otherwise have gotten grants through the federally-funded Restore Louisiana program for the same amount.
“Folks were punished for being responsible and doing the right thing. This bill fixes that, and I look forward to voting for it,” Republican U.S. Sen. Bill Cassidy said in a statement.
Pat Forbes, Louisiana’s disaster recovery chief, said if SBA loans are completely removed as a duplication of benefits, more than 6,000 Louisiana households would receive roughly $215 million in homeowner aid grants to repair their homes or pay down loans.
But Forbes also cautioned he has not seen the legislation’s final language. Depending on the wording, he said, the effect could be far less.
The final congressional deal also includes other disaster policy changes that would greatly limit a Federal Emergency Management Agency penalty that has cost local schools millions in aid and another that would ensure nonprofit food banks can get federal help.
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