[StBernard] Governor Blanco secures Congressional support ofrecovery agenda

Westley Annis westley at da-parish.com
Sat Feb 10 12:30:45 EST 2007

Will someone offer their knowledge about "forgiveness of loans" and also
"taxation on Road Home Grant?"

Does the forgiveness of loans mean that only relating to forgiveness for
local/state governments loans or does it equally apply to homeowners?

Are taxation only applicable to those who chose to deduct losses or does it
apply across the board to everyone who receives a grant, etc.? Thanks. -mj

Governor Blanco secures Congressional support of recovery agenda

WASHINGTON, DC - After a week of meetings with top Congressional leaders,
Governor Kathleen Babineaux Blanco returns from Capitol Hill this weekend
with firm commitments to advance her ten-point plan to advance Louisiana's
recovery from Hurricanes Rita and Katrina.

"This new Congress is ready to work with us and remove federal barriers that
are currently slowing our recovery," Governor Blanco said. "I told members
of the House Democratic Caucus during this cold week in Washington, that
this is the warmest reception I have ever experienced on Capitol Hill. House
Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and their leadership
teams understand the urgency of our needs, and have committed to making
Louisiana's recovery from Hurricanes Rita and Katrina a national priority.
House committee chairs are already drafting legislation to accomplish my
agenda and will push it forward this Spring."

In her meetings this week, Gov. Blanco urged Congress to reform the Stafford
Act to account for catastrophes, adopt a national solution to drive down
skyrocketing insurance rates that are unsustainable for coastal communities
and invest in critical upgrades and maintenance to federal infrastructure
priorities, including levees.

"Under the new majority, we will be able to meet the challenges Hurricanes
Katrina and Rita posed to the conscience of our country," said House Speaker
Nancy Pelosi of California. "I appreciate Governor Blanco giving us a solid
guide to meet this challenge, and I look forward to a speedy delivery for
the people of Louisiana and the Gulf Coast."

"Senator Landrieu and I had a very good meeting with Governor Blanco, and I
look forward to working closely with both of them to help Louisiana rebuild
and recover," said Senate Majority Leader Harry Reid of Nevada.

In addition to overarching items of national significance impacting
Louisiana's recovery, Gov. Blanco offered ten quick steps for Congress to
act on immediately:

Remove State Matching Requirements for Federal Assistance Grants: Congress
would send a shot of adrenaline into the Gulf Coast recovery by authorizing
100% federal cost-share for Hurricanes Katrina and Rita. Waiving the 10%
non-federal cost-share responsibility would speed up our recovery, just as
it did in New York when Congress provided 100% federal cost share after 9/11
and after Hurricanes Andrew and Iniki. This would allow the state to invest
an estimated $700 million in CDBG funds in critical needs, including
repairing our police stations, fire stations and other important
infrastructure. Louisiana urges Congress to include this fix in the upcoming
Supplemental Bill.

Cut the Red Tape in Hazard Mitigation Funding for the Road Home Program:
Federal red tape holds hostage $1.2 billion of Hazard Mitigation Grant
Program funding needed to return people to their homes. The White House
required Louisiana to include HMGP funding as part of The Road Home Housing
Program to fill our funding gap so we could offer a $150,000 maximum award
to homeowners, the same as Mississippi. FEMA is unwilling to approve this
funding due to restrictive rules governing HMGP usage. Louisiana plans to
use HMGP funding for: 1) The voluntary acquisition of structures on sites
that local governments wish to return to open space; and 2) The provisions
of grants to homeowners of up to $7500 to fund individual mitigation
measures. Congress can quickly free up these funds for homeowners by simply
allowing a waiver of the FEMA regulations or transferring the funds to CDBG

Exempt the Road Home Awards from Federal Tax Penalties: Louisiana asks
Congress to exempt homeowners who claimed a casualty loss deduction on their
2005 federal income tax return from having to pay this money back to the IRS
upon receipt of the Road Home grant. Homeowners who received a casualty loss
deduction and decide to rebuild are penalized by having to repay the IRS,
while homeowners who received the deduction and decide to sell their
property and move away are not penalized. Louisiana urges Congress to exempt
tax penalties from the Road Home awards (S.29/H.R.641).

Allow Forgiveness of Community Disaster Loans: Less than two months after
Hurricane Katrina, Congress passed the Community Disaster Loan Act of 2005,
requiring local governments receiving Katrina and Rita aid to reimburse the
federal government. Congress eliminated the possibility of forgiveness, even
though historically, over 90% of Community Disaster Loans have been
forgiven. Louisiana asks Congress to repeal the prohibition which forbids
cancellation of these community disaster loans by the federal government

Combat Crime in New Orleans: Louisiana has sent an additional 300 National
Guard Troops and 60 State Troopers to reinforce the New Orleans Police
Department since last June. The state continues to assist in providing
functions essential to the city's criminal justice system. Louisiana calls
on Congress to provide an urgent influx of additional COPS grants to the
city, and an overall boost in funding to reestablish the criminal justice
system in the area.

Extend SSBG Supplemental Funds for One Year: SSBG supplemental funds remain
available until September 30, 2007. Louisiana asks Congress for a one-year
extension of funds in order to ensure a continuation of critical hurricane
recovery related services. Factors including the slower than anticipated
repopulation of affected areas and the tight labor market for social service
professionals contributed to the need for this extension. SSBG funding
provides critically needed services including mental health, child welfare,
the treatment of addictive disorders and other important services

Allocate Disaster Recovery Funds Proportional to Damage: Louisiana
recommends that Congress mandate a policy requiring the allocation of
disaster recovery funds based on actual damages, especially in situations
where one state may have a disproportionate share of damages in comparison
with other states. The recent decision by FEMA to give nearly four times
more housing money for Katrina Cottages to Mississippi than Louisiana, in
spite of Louisiana suffering 75-80% of damages from Katrina and Rita,
magnifies the need for this policy.

Invest in Hurricane Protection and Coastal Restoration: Louisiana's master
plan for a comprehensive approach to coastal restoration and protection
requires a strong partnership with the federal government. Louisiana is
grateful to Congress for passing an historic OCS revenue sharing bill.
However, real OCS funding will not begin until 2017. We must act now to
build up our defenses against future hurricanes. Louisiana calls on Congress
to see that the Army Corps works in concert with the State's plan. Congress
should begin the Coastal Impact Assistance Program as scheduled, and pass
the Water Resources Development Act, a bill that includes critical
infrastructure funding.

Increase Recovery Aid to Small Businesses and Approve Key Business
Extensions: After 9/11, Congress made available nearly one-half a billion
dollars in grants to small businesses. Comparable relief was not extended to
small businesses along the Gulf Coast. Small businesses make up the
lifeblood of Louisiana's economy, and they were the hardest hit by the
storms. Louisiana urges Congress to work with us to supplement existing
grant and loan programs and provide the tax relief needed to help our small
businesses fully recover.

Key Business Extensions: Louisiana requests an extension to December 31,
2010, of the placed in service deadline for the Gulf Opportunity Zone Tax
Credits. The Go Zone allows businesses investing in the parishes most
affected by Hurricanes Katrina and Rita to take a 50 percent tax deduction
for new facilities or equipment. It is imperative that the extension is
granted to facilitate low-income housing tax credits targeted to rental
housing developments.

Congress should also extend the 2009 Renewal Communities sunset, and expand
the current New Orleans Renewal Community to include the seven parishes most
affected by the storms. Finally, Louisiana asks for the Guest Worker Program
to be extended to allow foreign workers a full two years in the Gulf
Opportunity Zone. We ask for this extension at the same time that Louisiana
continues to invest in workforce training geared towards the recovery.

Clarify SBA Loan Treatment Relating to Road Home Grants: Congress needs to
instruct the SBA on the difference between a loan and a grant. A federal
requirement exists that Road Home Grants be utilized to repay SBA Loans. Our
homeowners need capital to rebuild their homes. Forcing them to repay loans
with grant proceeds does not give them capital, it forces them to go
elsewhere. Louisiana asks Congress to provide a full fix to this problem as
homeowners struggle to return home.


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