Duplication of Benefits under the Robert T. Stafford Disaster Relief - PowerPoint PPT Presentation

Duplication of Benefits under the Robert T. Stafford Disaster Relief and Emergency Assistance Act §312, 42 U.S.C.§ 5155 Disaster Recovery CDBG Administration Training February 17-19, 2010 Houston, Texas

Overvie view: w: What lies at the heart of the pro rohib ibition ition against st Duplication ation of Benefi fits? ts?  Recip ipient ent of fe federal al dis isast ster er reli lief cannot ot recover er more than the amount nt of lo loss – in in oth other words, no double recovery at taxpayers’ expense Duplication of  Dis isast aster er assista istance ce may come in in the form of donati tion ons, s, in insurance ance pro roceed eds, s, volu luntee eer r work rk, , or Benefits grants ts. Bottom Line:  Wit ith mult ltiple iple entit ities es pro roviding ng assistan istance ce, it it is is You can’t possi sible e for for dif iffe ferent nt source rces s to all llocat ate e funds to repair r or repla lace ce the same e portion n of the same e recover twice pro roje ject. ct. This is action ion may consti titut tute e a dupli licatio cation n of for the same benefi fits ts pro rovid ided ed by oth other source rces. s. loss.

Rober bert t T. St Stafford ord Disast ster er Relief ief and Emerge rgency ncy Assistance tance Act Act Public lic Law 93-288, 8, as amended ded [ 42 U.S.C. .C.§ 5121 et et seq. q.]  Primar ary statut utor ory authori rity ty permitti itting ng HUD & Federal oth other r fe federal agencie cies s to assist ist St State e & lo local l gove vernm rnment nts wit ith their ir respon onse se and recover ery Assistance respon ponsibili sibilities ties fol followin lowing g majo jor r dis isast ster ers and emerg rgenci encies. es. When  Provides special measures for the purpose of “aid, Disaster assista stance, nce, emerge gency ncy servi vice ces, and the Strikes recon onstructi struction n and rehabilitat itation n of devasta stated ed areas. . .”

Rober bert t T. St Stafford ord Disast ster er Relief ief and Emerge rgency ncy Assistance tance Act Act 8, [ 42 U.S.C. .C.§ 5121 et et seq.] Public lic Law 93-288,  Governor ernor may reque quest st presiden enti tial declarat atio ion n after det etermi mining ning state e and local resources ces are overwhel helmed. med. Presi sident dent then declares ares major disast ster or emergen ency cy. Staffor ord d Ac Act, § 401 [42 U. U.S.C. S.C. 5170]. Federal Preside esident ntial ial decla larat ration ion trig igge gers s certain n federal al  assista stance nce for for recover ery and rehabilitat itation, n, & St Staffo ford rd Assistance Ac Act rule les s gove verning rning use of assistance stance.  Trigger ggers s disast aster er-spe speci cific fic progra rams ms & regular r When agency progra rams ms that localiti ties s can apply towar wards ds disast saster r recovery Disaster  Requires Governor’s certification that State will meet et cost share requ quirem rements ents. Strikes  Requires quires comp mplian ance with h ot other Staffor ord d Ac Act provisi visions ns: : insura surance nce, , nondi discr scriminati mination, n, duplica cati tion on of benefits ts, , et etc.

Sta Stafford d Ac Act Pro rohibit bits s Duplic icat atio ion n of Benefi fits ts § 312 [ [42 U.S.C. C.§ 5155]  Duplication of Benefits is double recovery for the same disaster recovery cost. Duplication of Benefits  What are the consequence of receiving duplicated benefits? Bottom Line: Nobody can A person receiving Federal assistance for a major disaster or emergency shall be liable to the United States to the recover twice extent that such assistance duplicates benefits available for the same to the person for the same purpose from another source. loss. The agency providing assistance can collect duplicated assistance like any other debt collection. § 312 (c).

Sta Stafford d Ac Act Pro rohibit bits s Duplic icat atio ion n of Benefi fits ts § 312 [ [42 U.S.C. C.§ 5155]  Purposes of Duplication of Benefits provision: Duplication of  Guard against fraud and ineligible uses of Benefits taxpayers’ funds Bottom Line:  Designate Federal government as secondary source Nobody can of recovery available after exhausting other forms of available disaster assistance recover twice for the same loss.

Prim imar ary y Issues s Grantees ees Shou ould ld Con onsid ider er  1) What other sources fall within the scope of the Duplication of Benefits prohibition? Duplication of  2) What benefits are available ? Benefits  3) What does it mean to duplicate funds for the Bottom Line: same purpose? Nobody can  4) What is the significance of to the person ? recover twice for the same  5) What other requirements dovetail with DOB? loss.  6) What are some best practices and common pitfalls?

 Stafford Act directs agencies to ensure that a person or entity does not receive assistance for part of a loss that is covered under any other program or from insurance or any other source  CAUTION! applies to both public and private assistance, such as SBA Disaster relief loans, private insurance, private cash or grants designated for the What other same purpose as Federal disaster funds. sources are  NOT cash donations & grants for unspecified purpose such as “relief efforts” or “disaster relief.” within the scope of the  Ex. Total post-disaster housing rehabilitation needs equal $50,000. Homeowner receives $50,000 from DOB private insurance for structural damage. Any State- administered HUD funding received by homeowner for prohibition? rehab = duplication of benefits.

 Person or entity receiving disaster assistance has legal control of assistance from another source  Ex. Following a disaster, a bank/mortgage holder (not the homeowner) has legal control of insurance proceeds on real property. The mortgage requires that insurance proceeds be applied to reduce lien balance. These insurance proceeds are not deducted from What uncompensated physical loss – they do not reduce benefits are assistance eligibility. Homeowner may still have disaster assistance eligibility that is NOT reduced by are available amount of insurance. within the  Ex. Following a disaster, homeowner applying for meaning of disaster assistance chooses to apply insurance the DOB proceeds to reduce existing mortgage, or requests that the lender demand payment , insurance proceeds prohibition? reduce the amount of disaster assistance eligibility to avoid duplication of benefits.

 Person or entity receiving disaster assistance must act in a commercially reasonable manner to seek out available assistance  Federal agency providing disaster relief funds can seek reimbursement for any duplicative relief a person or entity could have received if he or she had acted in a commercially reasonable manner. What  DOB prohibition does NOT require beneficiaries to benefits are pursue course of action to obtain insurance benefits which disregards competing considerations that any are available other insured would reasonably take into account. within the  Ex. Beneficiary can receive a lump sum insurance meaning of settlement based on estimated cost of repairs to avoid the DOB transaction costs associated with replacement cost reimbursement. any additional benefits that prohibition? theoretically might have been received using another option do not reduce eligibility for assistance.

Multip iple le Source rces s of Recover ery y Permissib ssible le  The Stafford Act provides that receipt of partial benefits for a major disaster or emergency shall not preclude provision of additional Federal assistance for any part of a loss or need for which benefits have not been provided. Partial benefits from one source do not preclude later federal assistance for remaining unmet disaster needs. What does it  What is an unmet disaster need? An eligible disaster mean to cost not covered by another source. duplicate  Ex. Beneficiary receives maximum award under housing funds for the assistance program funded by FEMA, but true cost of same repair or replacement of damaged home is greater than assistance provided, including insurance. Victim is purpose? eligible to receive additional CDBG assistance.

St Stafford d Act Permits ts Combin ining ing Assista istanc nce e to Meet et All Re Recovery Needs Ex. FEMA provides $500 for debris removal. Actual debris removal cost = $850. FEMA assistance does not preclude person, business, or other entity from later receiving $350 from CDBG disaster assistance money to What does it cover unmet cost of removing remaining disaster debris. mean to duplicate Both costs are for debris removal, but do not duplicate funds for the same purpose – the total assistance did not funds for the exceed total need. same purpose? Note: consider purpose from the perspective of the person receiving assistance – not the purpose of the program in general. What need the the funds fulfill in the hands of the recipient?