[StBernard] Melancon Introduces Bill to Fix Disaster Loan and Grant Conflict

Westley Annis westley at da-parish.com
Tue Feb 27 22:46:28 EST 2007

WASHINGTON, DC- U.S. Rep. Charlie Melancon today introduced a bill
to waive the current federal requirement that hurricane disaster victims use
their Louisiana Road Home grants to first pay back any loans they have
received from the Small Business Administration. The Catastrophic Disaster
Recovery Improvements Act, which Senator Mary Landrieu introduced in the
Senate today, will specifically waive the duplication of benefits
requirement under the Small Business Act for catastrophic disasters.

"Hurricane victims in south Louisiana need all the help they can get
with rebuilding their homes and getting their lives back to normal," Rep.
Melancon said. "They don't need the federal government giving with one hand
and taking with the other. This commonsense bill will remove a bureaucratic
hurdle that could slow the recovery progress even more."

Currently, the SBA interprets the "duplication of benefits" rule in
the Small Business Act to require Louisiana SBA disaster loan borrowers to
use State-administered, Supplemental CDBG-funded housing grants ("Road Home"
grants) to repay SBA Disaster Loan proceeds. This legislation provides the
SBA Administrator the flexibility to fully or partially waive this rule for
future major disasters and makes the changes retroactive for victims of
Hurricanes Katrina, Rita and Wilma. This waiver will provide borrowers with
additional funds for rebuilding while still retaining the Federal
government's role to ensure financial responsibility to taxpayers.

Rep. Melancon added, "As I told the Small Business Committee in my
testimony a few weeks ago, if we force storm victims to repay their SBA
loans with Road Home money, they end up no better off than if they hadn't
taken the initiative to apply for an SBA loan in the first place. Under
this bill, borrowers will still have to repay their SBA loans. They will
just be able to repay them under the extended timeframe they originally
agreed to when they got the loans. This waiver allows them to use their
Road Home money for its intended purpose: rebuilding their homes and moving
forward with their lives, which is a goal we can all agree on."

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