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Today, Congressman Neal Dunn (Florida-02) introduced The Streamlined FEMA Cost Exemption Act, a bill that would prevent the Federal Emergency Management Agency (FEMA) from attempting to recoup or “claw-back” Public Assistance (PA) grants to communities impacted by natural disasters.

“Communities impacted by natural disasters like tropical storms and hurricanes should not be concerned that government bureaucrats will attempt to recoup federal aid for recovery efforts years after the money has been spent rebuilding the community,” said Congressman Dunn. “Florida cities and counties are responsible stewards of federal funding when disaster strikes, and we cannot allow bureaucratic uncertainty to impact the recovery process. I’m proud to introduce legislation that will relieve this financial burden on our communities to allow them to focus on rebuilding.”

Background:

Currently, cities, counties, and electric coops submit requests for Public Assistance to the Florida Division of Emergency Management (FDEM) for review before they are submitted to FEMA. FEMA then conducts multiple levels of review for each project before approving funding for the project.

However, FEMA often conducts further reviews years later, often determining that the agency would like to recoup the funds. These claw-back efforts cause confusion for local leaders and often impair the recovery process.

Several projects related to Hurricane Michael in 2018, which were approved for disaster relief funding, received Determination Memos (DM) often after or near the approved project’s completion. Each of these projects in my District went through multiple rounds of vigorous FEMA reviews prior to the funds being approved, obligated, and disbursed to begin project work. FEMA is currently trying to ‘claw-back’ nearly $100 million in funding, which threatens to put impacted communities in significant debt or even bankruptcy.

The Streamlined FEMA Cost Exemption Act would:

• Exempt “covered project” costs to FEMA Public Assistance projects while executing a grant agreement with FEMA.
• Prohibits the recoupment of certain Public Assistance grants by adjusting the statute of limitations from three years to two years.
• Includes a FEMA waiver of certain recoupment of funds.
• Grants FEMA discretion to prioritize the pursuit of project overruns exceeding 5 percent of the total project cost.  
• Requires the FEMA Administrator to develop and establish an “acceptable error ratio” for allocations during eligibility negotiations.

Read the full text of the bill here.