Budget Deal Fails to Fix SBA Loan Issue for Flood Victims in Louisiana

The $90 billion disaster-relief package awaiting vote in the Senate could give Louisiana access to hundreds of millions of dollars in federal funding for flood control projects and the duplication of benefits issue with SBA loans.

But Governor John Bel Edwards and Rep. Garret Graves said the package could have done more to help flood victims.

The duplication of benefits issue may prevent homeowners from obtaining the relief they need. Homeowners who turned down SBA (Small Business Administration) loans would be able to apply for Restore Louisiana recovery grants. But thousands more homeowners who borrowed funds from the SBA would still have those loans held against them when applying for recovery grants.

Senators Bill Cassidy and John Kennedy said they pushed to get as much aid for Louisiana as possible, but their colleagues were not willing to go any further in changing SBA loan laws.

The bill does little to help the 8,500 homeowners in the state who were hit by the floods in 2016 and took out loans through the SBA, which does more than just offer business financing. These loans will affect how much these families can receive in recovery grants.

The bill’s initial draft left Louisiana out of the duplication-of-benefits fix. In a video posted online, Rep. Graves slammed the draft and said the Senate “screwed” Louisiana. The fix was then amended to cover all disasters from 2014 through 2017.

Still, Graves has raised further concerns that the language in the bill may limit the duplication of benefits changes to grants funded by a specific pot of money, and not apply to the Restore Louisiana program.

A member of the Senate Appropriations Committee said the bill was intended to also apply to previously appropriated federal funds.

The fate of the disaster program is still unclear. Senator Rand Paul blocked an effort for a quick vote on the deal, demanding that lawmakers consider steep cuts to government spending.

The U.S. House of Representatives disaster relief package bill included a broader change to the duplication of benefits problem. It also included other reforms, such as streamlining the way local governments are reimbursed by FEMA. It would have also set up an arbitration process to handle disputes between local agencies and FEMA, and would have reduced the penalties imposed on schools that did not have insurance on flooded buildings.

The bill would send approximately $600 million to flood-prevention projects in the state. The state would also be able to apply for more funding through a separate money pot that would send the Army Corps of Engineers to boost hurricane and flood protections in states that have experienced several floods in recent years.

An additional $2 billion will be used to help the U.S. Virgin Islands and Puerto Rico rebuild and improve their electric grids. The bill also includes $2.36 billion in assistance for Florida’s citrus industry as well as significant agricultural losses in 2017 due to wildfires and hurricanes.

The bill provides disaster relief funding for Texas, Florida, Puerto Rico, the U.S. Virgin Islands and Louisiana.

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.