Streamlined FEMA Cost Exemption Act

This bill aims to make FEMA disaster help simpler and fairer. It shortens how long FEMA can take back certain funds—from three years to two—so communities get closure sooner. It also lets the President, at a Governor’s request, waive some “duplication of benefits” rules when it’s in the public interest and won’t cause waste or fraud; a yes or no must come within 45 days. Loans won’t be counted as duplicate aid if all federal money goes toward real disaster losses. This waiver does not apply to some FEMA programs and only applies to disasters declared after the law takes effect.

The bill lets FEMA forgive small overpayments—up to 5%—on certain projects like debris removal and repairs, instead of clawing the money back if the project went slightly over the estimate. FEMA must also set a reasonable “error margin” when estimating aid and make sure any dollars within that margin still go to eligible needs .

• Who is affected: States and local governments running FEMA-funded projects, and people and businesses with disaster losses when a Governor requests a waiver.
• What changes:
  • FEMA’s window to recoup certain funds drops from 3 years to 2 years.
  • The President can approve case-by-case waivers of duplicate-aid rules, with a 45-day decision deadline; loans aren’t treated as duplicate aid if used for real losses; some programs are excluded.
  • FEMA can waive recoupment for small overpayments (up to 5%) on covered projects and must set an acceptable error ratio for funding estimates .
• When: The waiver authority applies to disasters declared on or after the date this becomes law.