Summary

Requires FEMA to reimburse local governments (including D.C.) and electric cooperatives for interest paid on loans used to carry out Stafford Act–eligible disaster recovery projects. Reimbursement covers the lesser of actual interest paid or interest calculated at the current prime rate, can apply to qualifying interest incurred in the nine years before enactment, and is payable only from appropriations made on or after enactment. The law also directs FEMA to publish expedited procedures within 30 days, gives States 60 days to apply for outstanding claims, and requires reimbursement for requesting States within one year of enactment.

Key Points

• FEMA will reimburse local governments (including D.C.) and electric cooperatives for qualifying interest on disaster-related loans.
• Qualifying interest is the lesser of actual interest paid or interest calculated using the current prime rate.
• Loans are qualifying if at least 90% of proceeds were used for Stafford Act–eligible activities.
• Interest incurred up to nine years before enactment can be claimed, but reimbursements require new appropriations.
• FEMA must publish alternative procedures within 30 days and States have 60 days to apply for outstanding claims.
• FEMA must reimburse requesting States no later than one year after enactment.
• The amendment does not itself appropriate funds; payment depends on future appropriations.
• Intended to reduce net borrowing costs and improve cash flow for disaster recovery by offsetting interest expenses.

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