Week 4: Stafford Act Section 312

By Murray Wennerlund published 1-11-2024

Stafford Act (42 U.S.C. §5155)

The Stafford Act serves as the primary legislation governing the provision of federal disaster assistance, particularly from FEMA. Section 312 of the Stafford Act mandates that federal agencies offering financial disaster assistance must verify that individuals, businesses, or entities affected by a major disaster or emergency do not receive aid for losses already compensated. This section also directs the President to establish procedures ensuring consistency in preventing the duplication of benefits. According to Section 312, any person, business, or entity that has received or is eligible to receive federal disaster assistance is obligated to repay the United States for such aid to the extent that it duplicates benefits available from another source, including insurance and other federal programs.

Over the years, this section has been subject to amendments and revisions in response to changing circumstances and challenges in disaster response and recovery.

In 2018, Congressman Graves played a role in advocating for a specific amendment to Section 312. The proposed amendment aimed to exclude Small Business Administration (SBA) loans from the duplication of benefits test. The rationale behind this advocacy was grounded in the distinction between loans and grants, emphasizing that SBA loans, being a form of borrowing, should not be treated in the same manner as grants when assessing duplication of benefits.

This example underscores the ongoing legislative efforts to refine and improve the Stafford Act, reflecting a dynamic response to the complexities of disaster recovery and the need to strike a balance between providing assistance and ensuring fiscal responsibility.
Due to consistent advocacy by a congressional representative, over $600 million in disaster aid was utilized to settle SBA loans incurred for home repairs after the 2016 Louisiana Floods. Many followed suit, and with the leadership of the mentioned representative, SBA loans were discharged using HUD CDBG-DR grants. This resulted from a modification to Stafford Act Section 312 with a sunset provision.