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Allows FEMA to reimburse certain interest payments charged on qualifying loans taken by local governments and electric cooperatives for disaster-related purposes. The law defines what counts as a qualifying loan and qualifying interest, limits reimbursements to interest incurred within the nine years before enactment, requires FEMA to publish procedures and process applications on a tight schedule, and restricts payments to funds appropriated on or after enactment.
Adds a new section 431 to Title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act titled 'Reimbursement of interest payments related to public assistance.'
The President, acting through the Administrator of FEMA, must provide financial assistance to a local government or electric cooperative as reimbursement for qualifying interest.
Defines 'qualifying interest' as, for a qualifying loan, the lesser of (i) the actual interest paid to a lender or (ii) the interest that would have been paid if the loan's interest rate equaled the most recently published prime rate on the Federal Reserve Statistical Release on selected interest rates.
Defines 'qualifying loan' as a loan obtained by a local government or electric cooperative where not less than 90 percent of the proceeds are used to fund activities for which that entity receives assistance under the Stafford Act after the loan is disbursed.
Specifies that 'local government' includes the District of Columbia for purposes of this section.
Primary beneficiaries are local governments and electric cooperatives that borrowed to cover disaster-related costs and paid interest within the nine years before enactment. If Congress provides funds, eligible entities could receive reimbursements that reduce local fiscal pressure and potentially lessen the need to raise rates or cut services. FEMA and state administrative agencies will face an immediate workload to publish procedures, accept applications, and disburse funds on tight timelines; they will need staff time and systems to verify loan documents and interest history. The benefit is constrained by statutory definitions of qualifying loans/interest, the nine-year lookback limit, and the requirement that only appropriated funds after enactment may be used — meaning relief depends on future appropriations and will not automatically cover all past borrowing. Ratepayers and local taxpayers may see indirect benefits if reimbursements reduce utility or municipal financing costs. The provision does not impose new mandates on states or localities to take action beyond applying for reimbursement, and it does not change federal tax law or national security policy.
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Referred to the House Committee on Transportation and Infrastructure.
Introduced April 10, 2025 by Neal Patrick Dunn · Last progress April 10, 2025
Referred to the Subcommittee on Economic Development, Public Buildings, and Emergency Management.
Referred to the House Committee on Transportation and Infrastructure.
Introduced in House