Re-introduced Loan Interest Payment Relief Act would require FEMA to reimburse local governments, electric cooperatives for emergency loan interest
The FEMA Loan Interest Payment Relief Act introduced this week would put new monetary demands on the Federal Emergency Management Agency (FEMA) if passed, requiring it to reimburse local governments and electric cooperatives for any interest on loans used for restoration work after natural disasters.
Traditionally, such interest on emergency loans is passed onto taxpayers and ratepayers. Take the case of the Florida Panhandle, where Hurricane Michael of 2018 wrought enough devastation to leave two electric co-ops facing nearly 100 percent destruction. Emergency funding helped them get back in business, but that funding came at a cost, and now U.S. Reps. Neal Dunn, M.D. (R-FL), Darren Soto (D-FL), and Garret Graves (R-FL), together with U.S. Sen. Marco Rubio (R-FL), want to change how such loans are handled in the future.
“Local governments and electric cooperatives in Florida’s Second Congressional District worked hard in the wake of Hurricane Michael to restore services necessary to the disaster response,” Dunn said. “Such entities incur interest on the loans they secure while they await federal reimbursement from FEMA. This cripples communities and puts them on the hook for millions of dollars.”
Speed, for the proponents of the bill, is of the essence and would be mandated by the legislation. The same bill was introduced last year, during which it advanced through the House but failed to move forward from there.
Soto positioned the bill as one to also invest in resilience for the future, guaranteeing resources are available for recovery, while Rubio noted it would reduce the burden of interest payments for the hardest hit communities during crisis situations. However, Graves pitched it as a bill of consequences for FEMA inaction.
“FEMA reimbursements move slower than a turtle stuck in molasses,” Graves said. “This bill establishes badly-needed consequences on FEMA for bureaucratic foot-dragging. Once enacted, FEMA will reimburse disaster costs faster so our local and state partners aren’t stuck footing the bill.”
