SBA loan fix, federal flood-recovery changes floating through U.S. Senate could benefit Louisiana homeowners

June 16--WASHINGTON -- An overhaul of federal disaster policy, including provisions that could provide relief to people still rebuilding after the 2016 Louisiana floods, is winding its way through the U.S. Senate.

The bill includes a number of changes Louisiana officials and lawmakers have pushed for, including potentially waiving rules that prevent homeowners who took out low-interest loans from the Small Business Administration from receiving Restore Louisiana rebuilding grants.

Plenty of challenges remain before any of the changes -- which Louisiana's congressional delegation has fought for since record-breaking rains swamped much of the Baton Rouge area nearly two years ago -- can make it into law.

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But a sign-off from the U.S. Senate's Homeland Security Committee earlier this week marked the first significant progress in the Senate. The U.S. House of Representatives has twice passed a similar overhaul -- authored in part by U.S. Reps. Garret Graves, R-Baton Rouge, and Cedric Richmond, D-New Orleans -- as an attachment to larger legislation.

One catch? The current Senate draft of the bill would only apply the changes retroactively back to 2017, something that would help southwest Louisianans hit by Hurricane Harvey but leave out 2016 flood victims.

Staffers, however, attributed the 2017 date in the bill to a drafting mix-up and said key senators, including Homeland Security Chairman Ron Johnson, R-Wisconsin, had signaled support for updating the legislation to move the date back another year.

Sen. Bill Cassidy, R-Louisiana, said he's been lobbying his colleagues hard over the past several months to build support for the proposed changes, which have previously languished in the chamber after passing the House.

Cassidy said he's not celebrating yet but was encouraged by the committee vote. He added that states and U.S. territories now recovering from a devastating series of hurricanes in 2017 are likely to encounter the same bureaucratic frustrations that Louisiana has dealt with, potentially raising awareness and bringing powerful allies aboard to push for change.

"Frankly, the people from Florida, Puerto Rico and Texas are about to start living the reality Louisiana has about the gaps in the programs," Cassidy said.

The bill, dubbed the Disaster Recovery Relief Act, would make a number of changes that could benefit Louisiana flood victims and local governments rebuilding after a federally declared disaster.

It would ease a penalty imposed on public school districts, such as Livingston Parish, that skipped paying flood premiums and didn't carry flood insurance.

Although FEMA usually chips in for much of the cost of rebuilding flooded schools, it currently imposes a $500,000-per-building deduction on aid for uninsured districts. The proposed bill would limit that penalty to $500,000 per campus instead.

The bill would also create an independent arbitration panel to settle disputes between local governments and FEMA over damage claims and reimbursements. Those fights can drag on for decades -- the city of New Orleans is still wrangling over some Katrina-related claims -- and are usually decided internally by FEMA itself under current law.

Graves, who's spent years championing an overhaul along the lines of the Disaster Recovery Reform Act, criticized a handful of tweaks made by senators this week, including one that would allow the president to effectively block the SBA loan fix.

But Graves said Senate action of any kind was a cause for optimism given the previous deadlock over the bill.

"We had heard crickets out of the Senate for months," Graves said.

It's unclear when the package of reforms might come up on the floor of the U.S. Senate, which faces a jam-packed calendar of votes.

Congressional aides said they're hoping to attach the disaster policy reforms as an amendment to either an an unrelated measure extending the operating authority of the Federal Aviation Administration or a bill authorizing a slate of U.S. Army Corps of Engineers projects.

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