Should FEMA Have a Shorter Time Frame to "Claw Back" Disaster Relief From States and Individuals? (S. 1641)

What is S. 1641?

(Updated June 5, 2018)

This bill would place a three-year statute of limitations on the ability of the Federal Emergency Management Agency (FEMA) to recoup funds paid out to states and individual taxpayers under a federally designated disaster following a project’s completion. Under current law FEMA can recoup funds from states, localities, or individuals until three years after a disaster is officially closed by a state, which can take years or decades after the disaster occurred.

For homeowners who received Individual Assistance from FEMA the three year statute of limitations would take effect retroactively after January 1, 2012. Bad faith actors who don’t use grant funding to accomplish what it was intended for wouldn’t be protected by the statute of limitations.

Argument in favor

States, localities, and individuals need certainty that FEMA won’t try to recoup disaster funds years after they’ve completed projects. A three year statute of limitations after a project concludes is a lot fairer than waiting a decade or more later until a disaster is formally ended.

Argument opposed

FEMA should retain the ability to recoup disaster funds until three years after a state closes out a declared disaster, even if that step in the process doesn’t occur until years or decades after the disaster occurred.

Impact

Individuals, local & state governments; and FEMA.

Cost of S. 1641

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Sen. Marco Rubio (R-FL) introduced this bill to place a three year statute of limitation on FEMA recouping disaster funds three years after a project is completed, rather than after a disaster designation is officially closed:

“Floridians should not be subjected to permanent uncertainty about when the federal government might claw back support distributed after a disaster. Our state has experienced numerous storms since 2004, and although recovery efforts have long been completed, under current law the federal government can take back these funds, sometimes decades later—financially decimating the recipients who relied on them. Closing this loophole will give local officials and homeowners certainty and peace of mind, and ensure they are treated fairly.”

In his introductory press release, Rubio noted that the state of Florida has a number of federal disaster designations still open from hurricanes that occurred years ago, including: Frances (2004), Ivan (2004), Jeanne (2004), Charley (2004), Katrina (2005), Dennis (2005), Wilma (2005), Gustav (2008), Isaac (2012), Hermine (2016), and Matthew (2016). SImilar legislation has been introduced by lawmakers representing areas damaged by Hurricane Sandy in 2012.

Media:

• Sponsoring Sen. Marco Rubio (R-FL) Press Release