Smith Bill Seeks Help for Towns and Relief for Citizens Punished by So-called ‘Duplication of Benefits’ Policy

WASHINGTON, DC – As Jersey Shore residents, businesses and towns face a whirlwind of economic upheaval at the hands the growing coronavirus outbreak, Rep. Chris Smith (R-NJ) renewed his fight for victims still struggling financially from Superstorm Sandy as a result of the federal government’s unfair implementation of “assistance” programs established after the 2012 superstorm.

Smith’s legislation, introduced Friday with co-sponsor Rep. Jeff Van Drew (NJ-02) who also represents Jersey Shore towns, mandates forgiveness of certain Community Disaster Loans (CDL) secured by NJ municipalities from the Federal Emergency Management Agency (FEMA) to help with Sandy recovery. It also addresses the lingering “duplication of benefit” problem by removing Small Business Administration (SBA) loans as a disqualifier for people who sought and/or received federal money via Homeowner Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) grants to help them recover in the wake of Sandy.

“These two Sandy-era programs should be fixed so that our towns and residents—many now out of work—can focus on the crisis at hand,” said Smith. “As the second highest impact area for coronavirus, we need to meet the demands going forward. Instead of pressuring our towns, the federal government needs to accept responsibility for its past mistakes and work with us to address the future.”

Smith’s bill, the “Equity for Disaster Victims Act of 2020,” HR 6454, would fully forgive the CDL loans towns took when devastated by Superstorm Sandy. Recently, FEMA has pressed municipalities to start repaying the loans despite the clear and original expectation that the loans could be repaid slowly, overtime and probably forgiven.

“As originally assured, the payments on the old Community Disaster Loans should be fully waived and fully forgiven,” Smith said.  “Now is not the time to pressure our communities and demand difficult payments.”

Smith’s bill also includes a provision to amend existing law and clarify that an SBA loan is not a “duplication of benefit” or a reason to disqualify a grant applicant, provided that all federal assistance is used toward a loss suffered in a major disaster or emergency.

“The faulty ‘duplication of benefit’ policy was partially abolished in 2018,” Smith said. “My bill will make it clear that the regulations established in 2018 also apply to disasters dating to 2011, including Superstorm Sandy, thereby short-circuiting any federal effort to take back or ‘clawback’ grants given to people who had already received an SBA loan.”

Smith said the bill should also potentially help those who were denied a grant during the application process because of a previous SBA loan, in light of reports that the state RREM program still has money.

“If the money is there, our people who applied for a grant and were initially rejected because of the loan should be first in line,” Smith said. “First and foremost, we must eliminate the bias in federal policy and then work together to provide funds for those who were wrongly denied.”

  Smith has introduced similar legislation to eliminate the duplication of benefits in three previous Congresses (2016,  2017 and 2019). He said he will stay at it until justice is done for the victims of Superstorm Sandy.

Smith also said he will be pressing leaders in both parties in Congress to add his bill to the next coronavirus relief package as a way to expedite financial relief due to those still suffering from previous disasters.