In an effort to help Jersey Shore residents, businesses and towns facing an economic mountain to climb during the Covid-19 pandemic, especially those still struggling from the impacts of Superstorm Sandy in 2012, Congressman Chris Smith ( R - 4th District) and Congressman Jeff Van Drew ( R - 2nd District) have co-authored a bill to mandate forgiveness of certain Community Disaster Loans secured by NJ municipalities from FEMA.

The legislation also addresses the lingering “duplication of benefit” problem by removing Small Business Administration (SBA) loans as a disqualifier for people who sought and/or received federal money via Homeowner Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) grants to help them recover in the wake of Sandy.

“These two Sandy-era programs should be fixed so that our towns and residents—many now out of work—can focus on the crisis at hand,” Congressman Smith, who represents 34 towns in Monmouth County, 7 in Ocean County and 2 in Mercer County, said in a statement. “As the second highest impact area for coronavirus, we need to meet the demands going forward. Instead of pressuring our towns, the federal government needs to accept responsibility for its past mistakes and work with us to address the future.”

Smith’s bill, the “Equity for Disaster Victims Act of 2020,” HR 6454, would fully forgive the CDL loans towns took when devastated by Superstorm Sandy.

The reason for the bill stems Smith said is from FEMA pressing municipalities to start repaying the loans despite the clear and original expectation that the loans could be repaid slowly, overtime and probably forgiven.

“As originally assured, the payments on the old Community Disaster Loans should be fully waived and fully forgiven,” Smith said. “Now is not the time to pressure our communities and demand difficult payments.”

Smith’s bill also includes a provision to amend existing law and clarify that an SBA loan is not a “duplication of benefit” or a reason to disqualify a grant applicant, provided that all federal assistance is used toward a loss suffered in a major disaster or emergency.

“The faulty ‘duplication of benefit’ policy was partially abolished in 2018,” Smith said. “My bill will make it clear that the regulations established in 2018 also apply to disasters dating to 2011, including Superstorm Sandy, thereby short-circuiting any federal effort to take back or ‘clawback’ grants given to people who had already received an SBA loan.”

Smith said the bill may also potentially help those who were denied a grant during the application process because of a previous SBA loan, in light of reports that the state RREM program still has money.

“If the money is there, our people who applied for a grant and were initially rejected because of the loan should be first in line,” Smith said. “First and foremost, we must eliminate the bias in federal policy and then work together to provide funds for those who were wrongly denied.”

Smith has introduced similar legislation to eliminate the duplication of benefits in three previous Congresses (2016,  2017 and 2019).

He said he will work on these bills and more until "justice is done for the victims of Superstorm Sandy."

Smith also said he will be pressing leaders in both parties in Congress to add his bill to the next coronavirus relief package as a way to expedite financial relief due to those still suffering from previous disasters.

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