FEMA Loan Interest Payment Relief Act

Key Points

• This bill allows the Federal Emergency Management Agency to pay back local governments and electric cooperatives for interest they paid on loans. These loans must have been used to pay for disaster recovery work that the federal government already approved.
• Local cities, counties, and electric companies that provide power to rural areas are the main groups helped. It ensures they are not stuck with high interest bills while waiting for federal disaster money to arrive after a major storm or emergency.
• When a major disaster hits, local governments often have to borrow money immediately to fix roads or restore power. Since it can take a long time for federal funds to be paid out, the interest on those loans can cost local taxpayers millions of dollars.
• The plan would cover interest payments made over the last nine years. The amount paid back would be capped at the current prime interest rate to ensure the government is not overpaying for private bank loans.
• If passed, the government would have 30 days to set up the rules for this program. States would then have 60 days to apply for money they are already owed for past projects, with a goal of getting paid within one year.

Impact Analysis

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