Duplication of Benefits penalty continues to stall return home for flood victims, Gov. Edwards says

BATON ROUGE – The Duplication of Benefits penalty continues to pose the biggest stumbling block for most of the denial of awards for victims of the 2016 flood, Gov. John Bel Edwards told the Restore Louisiana Task Force.

Sixty-six percent of the rejected applications – approximately 5,500 homeowners – fell victim to the Duplication of Benefits after they applied for FEMA benefits or a Small Business Administration loan, he said during the meeting Friday at the State Capitol.

“We need to do better than that,” Gov. Edwards said.

Edwards called the Duplication of Benefits issue the biggest hindrance for full recovery and the leading cause for individuals to express displeasure with the program.

The penalty has prevailed despite FEMA representatives who urged displaced homeowners to seek the SBA loan in addition to the FEMA grant.

The punitive measure applied even if the applicant received only a portion of the loan or none of the amount they requested, Gov. Edwards said.

“If someone applied for a $50,000 loan and only received $25,000, the benefit was still considered $50,000 – and that doesn’t make sense to me,” he said. “Even if they got zero, it’s still considered 50.

“I won’t profess to be the smartest lawyer in the world, but I don’t believe that interpretation flows into the plain language and fair reading of the Stafford Act as it is,” Gov. Edwards said. “But with the appropriations language incorporated by Congress, I know it’s not the case going forward, so we hope to get some relief from the Duplication of Benefits issue.”

Gov. Edwards in a letter April 3 asked HUD Secretary Dr. Ben Carson to provide a final interpretation of the language related to the DOB penalty included in the Bipartisan Budget Act of 2018.

Dr. Carson has not yet responded to the governor’s request.

Gov. Edwards said he will continue working with the state’s Congressional delegation to fix this issue.

“We strongly believe a loan is different than a grant and that homeowners shouldn’t be penalized,” he said.

In other business, the Office of Community Development presented three resolutions subsequently passed by the Task Force. The resolutions concern the following programs and plans:

• Watershed Planning and Mitigation Assistance: Creates a broad proposal for investment in resilience projects; and recommends the Louisiana Watershed Coordinated Agencies report directly to the Governor on mitigation activities, programmatic planning and guidance developed through the proposal, in keeping with the policies and purpose of the Louisiana Watershed-Based Floodplain Management Program. The LWCA will develop the Louisiana Watershed-Based Floodplain Management Program in collaboration with other stakeholders. LWCA comprises the following agencies and offices:  Office of Community Development, Coastal Protection and Restoration Authority, Department of Transportation and Development, Governor's Office of Homeland Security and Emergency Preparedness, and Department of Wildlife and Fisheries.
• Rental Housing Programs: Reallocates $7 million from the Neighborhood Landlord Program to the Piggyback Program, dedicated specifically for projects in a rural area; and recommends OCD create an Action Plan Amendment about the program for submission to HUD. The Piggyback Program “piggybacks” Community Development Block Grant dollars with Low Income Housing Tax Credits to create new housing units for low-to-moderate income tenants.
• Public Service Program: Creates the Public Service Program to assist First Responder operations in the most-impacted and distressed parishes, which experienced a reduction in revenue from ad valorem taxes because of the Great Floods of 2016; allocates $8 million from OCD administrative funds to the newly created program; and recommends OCD create an Action Plan Amendment about the program for submission to HUD.

Additionally, Baton Rouge Area Chamber President and CEO Adam Knapp presented a resolution, subsequently passed by the Task Force, related to the mission of the Louisiana Watershed Coordinated Agencies:

• Prioritize Investment To Advance Watershed-Based Floodplain Science in Louisiana: Encourages the LWCA to further Louisiana’s competitiveness in watershed-based floodplain management by prioritizing the use of state and federal resources at Louisiana’s independent, nonprofit, scientific research institutes and similar Louisiana public and private university water-management research centers, in collaboration with Louisiana’s private sector. 

OCD also provided the Task Force with updates on the Restore Homeowner Program, the Restore Rental Housing Programs and the Restore Small Business Program.

• Restore Homeowner Program: 49,353 surveys submitted; 29,811 applications submitted; and 9,611 homeowners offered grants totaling $256.5 million.
• Restore Rental Housing Programs:
  • Neighborhood Landlord Rental Program—60 contingent commitment letters issued for 310 units totaling $33,293,213 in loan commitments.
  • Piggyback Program—28 applications approved for 2,939 units totaling $109,522,101 in loan commitments.
  • Multifamily Program—14 applications approved for 582 units totaling $13,786,787 in loan/grant commitments. 
• Restore Small Business Program: 612 applications submitted; 143 loans closed totaling $16,534,041.