WASHINGTON — A raft of changes to federal disaster policy, including a number directly affecting those hit by the 2016 Louisiana floods, are now sitting before the U.S. Senate for the second time in the past six months after clearing the House of Representatives.

The changes include a slew of tweaks Louisiana’s congressional delegation — as well as state and parish officials back home — have long fought for and potentially represents renewed progress on reform efforts more than 18 months after record-breaking rainstorms engulfed much of the Baton Rouge area in floods.

Among the provisions are changes to federal law allowing those who tapped Small Business Administration loans to rebuild flooded homes to receive federally funded recovery grants. It would also ease penalties on public school districts — such as in Livingston Parish — that didn’t carry flood insurance on all their buildings and create an independent arbitration process for local governments to dispute FEMA funding.

 

House passes disaster relief bill, including fix to SBA loan issue and potential flood-prevention dollars for Louisiana

U.S. Reps. Garret Graves, R-Baton Rouge, and Cedric Richmond, D-New Orleans, crafted those changes and have pushed them as part of a broader, bipartisan effort by the House Transportation Committee to overhaul federal disaster policy, which has been dubbed the Disaster Recovery Reform Act.

The package, tied together to an unrelated measure extending the operating authority of the Federal Aviation Administration (FAA), sailed through the House of Representatives on an overwhelming 393-to-13 vote.

Yet it’s unclear whether or not the vote puts changes to federal disaster policy on track to become law. The bill still faces a potentially winding road through the U.S. Senate — which stripped out the disaster policy changes once before — and opposition from the White House.

Budget deal offers limited fix to SBA loan issue for Louisiana flood victims, but Graves and Gov. Edwards say it falls short

The Senate is working on its own FAA bill, which so far doesn’t include any disaster-policy provisions. One of the two Senate committees with jurisdiction over the FAA bill have signed off on adding the DRRA language so far, according to a Senate staffer with knowledge of discussions around the legislation.

Senate Commerce Committee Chairman John Thune, R-South Dakota, told Bloomberg last week he hopes to pass his version before Congress’ August break, leaving it up to Capitol Hill leaders to hash out the differences before putting a compromise up for a final vote.

President Donald Trump’s budget office expressed concerns that some of the DRRA’s changes “would lead to significantly higher taxpayer spending for disaster programs.”

The White House Office of Management and Budget warned ahead of the House’s overwhelming vote in favor of the package that the disaster policy changes would undercut FEMA’s ability to “control costs, prevent duplicative federal expenditures and recover improper payments.”

A number of the DRRA’s provisions — such as eliminating the SBA “duplication of benefit” issue that’s blocked some flooded Louisiana homeowners from tapping federally funded rebuilding grants — would loosen up rules that currently restrict access to federal disaster recovery funds. Changes in how uninsured school districts are compensated after floods would revamp and significantly lower a current per-building penalty, giving districts more federal money to rebuild.

But defenders of the bill, including Graves, are quick to note that most of those changes simply add more flexibility in how state and local governments deploy federal assistance while Congress would still decide how much relief money to dole out.

The nonpartisan Congressional Budget Office estimated that an earlier version of the DRRA would cost an average of roughly $30 million more a year in direct federal spending over the next decade.

Graves said the provisions actually reduce federal costs in the long run by making recovery efforts more efficient, such as by allowing states to set up less costly temporary housing programs, and by encouraging storm-hit areas to rebuild in ways that make them less susceptible to future disasters. The bill, for example, would waive rules that currently require local governments receiving FEMA aid to rebuild damaged buildings largely as they were pre-storm.

Federal haggling over post-disaster compensation can end up costing the federal government more than simply settling for a higher figure up front, Graves argued, pointing to a recent CBS News investigation of the FEMA-run National Flood Insurance Program which highlighted millions the agency spent on extended court battles over claims.

Graves and House Transportation Committee Chairman Bill Shuster, R-Pennsylvania, are scheduled to meet with White House Budget Director Mick Mulvaney to discuss the proposal. Although Mulvaney’s office is opposed to the changes, Graves said he’s spoken with a number of other White House officials — including some at senior levels — who’ve expressed support.

“There is no doubt in my mind that those policy reforms will save the federal government money,” said Graves, whose district covers many of those hit by the March and August 2016 floods. “But more importantly, it will help communities to recover, help individuals to recover and prevent people from becoming flood victims.”

Restore Louisiana program could need more money if fixes for SBA applicants are approved, state official says

Graves’ office said the lopsided, bipartisan House vote Friday for the FAA bill gave the changes “substantial momentum” as the entire package moves over to the Senate.

The DRRA package would also allow state and local governments to use federal money to craft their own post-disaster emergency housing programs. Graves, in pushing the change, has cited the lofty price FEMA paid — and the long wait — for the manufactured homes it delivered to some displaced Louisianians after the flood.

The state or local parish governments could’ve bought trailers far more cheaply or figured out other, more efficient housing solutions for first responders and displaced residents, Graves said.

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The package also allow states to spend federal recovery grants on building U.S. Army Corps of Engineers projects, potentially paving the way for Louisiana to fully fund the long-stalled Comite River Diversion Canal from a mix of different funding pots. Current rules limit federal funding on such projects to dollars from the Corps of Engineers’ budget.

“The disaster recovery component of this legislation is especially critical for Louisiana,” said House Majority Whip Steve Scalise, R-Jefferson, the No. 3 Republican in the House. “In 2016, tens of thousands of Louisiana families were affected by flooding, and many of these families and small businesses have had difficulty in recovering because of harmful federal rules and regulations.”

 

Sen. Bill Cassidy, R-Louisiana, told officials at a Livingston Parish Economic Development Council meeting this week that he’d do “everything in my power” to push his fellow senators to include the SBA loan fix in its version of the FAA reauthorization.

Cassidy said it could be “a struggle” in the Senate, in part because he’s heard Senate Minority Leader Chuck Schumer, a New York Democrat, is pushing to retroactively apply at least some of the changes to victims of Hurricane Sandy, a 2012 storm that slammed parts of New York and New Jersey.

“That explodes the price tag if you do it that way,” Cassidy said.

The House previously passed a similar version of the Disaster Recovery Reform Act as part of a draft $90 billion hurricane relief package in December — only to see senators ignore those ideas and leave out the suggested policy changes when the Senate Appropriations Committee wrote the final version that cleared both chambers of Congress in February.

House passes disaster relief bill, including fix to SBA loan issue and potential flood-prevention dollars for Louisiana

The final hurricane relief package included hundreds of millions of dollars for flood-prevention projects in Louisiana and made 2016 flood victims who had been approved for post-flood SBA loans but never tapped the money — roughly 3,800 homeowners — likely eligible for Restore Louisiana grants. That change meant about 6,000 flood-hit homeowners who’d actually borrowed money from SBA are expected to still be penalized.

State officials are still seeking clarification on how the federal government will implement the change.

Louisiana officials seek clarity on limited SBA loan fix; 10,000 homeowners could get help — or none

The Senate’s decision not to include the Disaster Recovery Reform Act language drew sharp criticism from Graves — who declared that the Senate had “screwed Louisiana flood victims” — and Louisiana Gov. John Bel Edwards, a Democrat who’s repeatedly lobbied Capitol Hill lawmakers to tackle many of the issues the DRRA is designed to address. Graves voted against the final hurricane recovery package to protest the omission.

Sen. John Kennedy, a Louisiana Republican who sits on the Senate committee that drafted the final disaster-relief package, acknowledged some of the provisions fell short of what many back in Louisiana wanted.

But Kennedy contended at the time that the votes from his Senate colleagues to fully address the SBA loan issue — which would’ve carried a potentially sizable price tag — “just aren’t there,” calling the more limited change the “next-best thing.”

Senate aides also noted the final hurricane recovery package, despite leaving out many of the policy changes, tweaked the eligibility requirements for several sizable pots of federal funding for flood-prevention projects that would end up delivering more cash to Louisiana.

Louisiana’s delegation has sought to build support for the changes among politicians from other flood-hit states, a group that includes the large and influential congressional delegations from Texas and Florida, which were badly hit during the 2017 Atlantic hurricane season.

Advocate staff writer Caroline Grueskin contributed to this report.

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