Streamlined FEMA Cost Exemption Act

Streamlined FEMA Cost Exemption Act

This bill reduces to two years the statute of limitations for the Federal Emergency Management Agency (FEMA) to recoup disaster funding. It also requires FEMA to establish a ratio of acceptable error in its grants payments and authorizes the waiver of certain recoupment and duplication of benefits requirements.

The bill reduces from three years to two the time period (starting from the final report of project completion) during which FEMA may take action to recover emergency or disaster assistance FEMA has provided to a state, Indian tribal, or local government. 

Also, under current law, FEMA generally must reduce and recover improper payments (i.e., payments that should not have been made or were made in an incorrect amount) and maintain an error rate below 10%. The bill requires FEMA to establish its own acceptable error ratio for providing emergency or disaster assistance funds for eligible purposes. It also authorizes FEMA to waive recoupment of certain emergency or disaster assistance (e.g., Public Assistance funding) when the provided funds exceed the total cost of the relevant project by no more than 5%.

Additionally, the bill reauthorizes the President to waive the prohibition on the duplication of benefits upon request from the governor of a state if the President determines certain criteria are met. In exercising such authority, the President may not determine that a loan is a duplication. This authority is not applicable to FEMA’s Individual Assistance program or Public Assistance for repair and replacement.