Powering Strong Communities

APPA-Supported Loan Interest Payment Provision Included In Bill Approved By Committee

The House Committee on Transportation and Infrastructure on Oct. 27 approved legislation that includes a provision that would require the Federal Emergency Management Agency (FEMA) to reimburse local governments for interest expenses for loans related to disaster relief.

It would also provide that qualifying interest includes interest incurred in the five years preceding this bill's enactment.

The committee approved by a vote of 63 to 2 the Resilient Assistance for Mitigation for Environmentally Resilient Infrastructure and Construction by Americans Act, or Resilient AMERICA Act (H.R. 5689).

During markup of the bill, the committee adopted as an amendment to the bill the provisions of the FEMA Loan Interest Payment Relief Act (H.R. 2669) introduced by Rep. Neal Dunn (R-FL) in April.

The interest payment provision is supported by the American Public Power Association (APPA).

In a Feb. 4, 2021, letter to Dunn and bill cosponsor Rep. Darren Sotto (D-FL), APPA President and CEO Joy Ditto noted that every year, public power utilities experience some degree of infrastructure damage due to events, such as ice storms, tornadoes, floods, hurricanes, and earthquakes.

If this damage is severe enough to be declared a disaster by the President of the United States, recovery costs are eligible for reimbursement through grants from FEMA.

“These grants can amount to millions of dollars and are critical to the ability of public power utilities to recover from disasters,” wrote Ditto. “However, years can pass between a public power utility making a claim for a public assistance grant and FEMA providing that assistance. In the meantime, the utility must often borrow funds -- and pay interest on that debt -- to cover the costs.” 

The FEMA Loan Interest Payment Relief Act would require FEMA “to pay at least a portion of those interest expenses. This would reduce the cost of having to borrow to cover costs that will eventually be recovered from FEMA. It would also create a financial incentive for FEMA to resolve more quickly -- and make payment on -- public assistance requests,” Ditto noted.

The Resilient AMERICA Act, which now heads to the House floor, will also:

  • Return unspent funds from the Hazard Mitigation Grant Program to the Disaster Relief Fund, which ensures that these expiring and unspent funds will still help our communities prepare for and respond to disasters;
  • Double the funding stream dedicated to FEMA’s Pre-Disaster Mitigation (PDM) program;
  • Extend eligibility for the PDM program to include private non-profits;
  • Expand the reach of the post-disaster Hazard Mitigation Grant Program to prevent utility outages in the face of extreme wildfire, wind, tsunami, and ice events; and
  • Fund residential resilience retrofit block grants to states, tribes, and territories to strengthen homes for maximum protection and safety.

Committee Also Approves FEMA Caseworker Accountability Act

In addition, the committee also approved by voice vote H.R.5343, the FEMA Caseworker Accountability Act.

The bill, which was introduced on Sept. 22, 2021 by Rep. Tom Rice (R-SC), would direct FEMA to report to Congress on case management personnel turnover.

Specifically, FEMA must report on the turnover rate for FEMA case management personnel, the average and median length of employment for such personnel, the steps that FEMA is taking or plans to take to lower the turnover rate, and other specified points.

During Wednesday’s markup, the committee adopted an amendment by Rep. Scott Perry (R-PA) to instead require the Government Accountability Office to complete the report, rather than FEMA.