U.S. Senator Kirsten Gillibrand (D-NY), declaring that some New York homeowners are being forced to pay back federal disaster assistance they received following Superstorm Sandy, has introduced the Sandy Duplication of Benefits Fairness Act.
In a statement, she said that the bill would protect survivors of Superstorm Sandy and ensure they can keep the grant funding they received through the New York Rising program.
Immediately after Superstorm Sandy, the Federal Emergency Management Agency ("FEMA") told New Yorkers that to receive any federal disaster assistance, they had to first apply for a loan through the Small Business Administration ("SBA"). Many households took out these loans, as suggested, in order to get back on their feet and remain eligible for other forms of federal assistance.
Despite being advised to take out SBA loans in order to be eligible to receive additional federal assistance, a federal rule prohibits disaster survivors from receiving "duplication of benefits." This means that they are not allowed to also receive grant funding to rebuild their homes through the U.S. Department of Housing and Urban Development's Community Development Block Grant for Disaster Relief ("CDBG-DR") program, which was administered through the New York Rising program.
New Yorkers who were approved for New York Rising funds and received the CDBG-DR funding several years ago now are being told that they were not eligible for grant funding at the time and must now pay it back. Senator Gillibrand's Sandy Duplication of Benefits Fairness Act would waive the duplication of benefits rule for Sandy survivors so that New York families would not be forced to pay back money they already spent to fund their recovery from the damage and destruction of Superstorm Sandy.
"Many homeowners on Long Island were advised by the federal government that they needed to apply for SBA loans in order to receive any disaster assistance, and are now learning that if they received additional grants, they have to pay that money back because of a technicality they were not warned about," said Senator Gillibrand. "This has blindsided many families, and homeowners caught under the 'duplication of benefits' rule are being forced to pay back the grant money they were depending on to recover from the storm. My bill, the Sandy Duplication of Benefits Act, would authorize HUD to waive this requirement for Long Islanders, ensuring that they can keep these critical funds."
Last year, Congress enacted legislation that waives the duplication of benefits restriction to allow SBA loan recipients to be eligible to receive disaster relief grants, such as those administered by New York Rising, but only made the fix retroactive to 2016. Senator Gillibrand's legislation would make the duplication of benefits fix retroactive to October 1, 2012 to make Sandy survivors eligible to keep the CDBG grant funding even if they also received an SBA loan.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].