# Plain Language Summary: Streamlined FEMA Cost Exemption Act

When disasters strike, FEMA provides money to help states and individuals rebuild. But there are strict rules about how that money gets used, and if something goes wrong—like a project costs slightly more than expected or money gets used in a way FEMA later decides wasn't quite right—the agency can demand the money back. This bill makes those rules more flexible and forgiving in several important ways.

The bill shortens the time FEMA has to recoup money from three years down to two years. More significantly, it gives the President new power to waive the rule that says you can't receive FEMA assistance if you're also getting help from another federal program for the same disaster loss. Under the new rules, if a governor or disaster victim requests it, the President can allow someone to use both types of assistance as long as it's in the public interest and won't lead to waste or fraud. The decision has to be made within 45 days. This matters because disaster victims often need money from multiple sources to fully recover, and the old rules sometimes forced them to choose between different types of help.

The bill also creates more wiggle room for minor cost overruns. If a disaster recovery project ends up costing up to 5 percent more than originally budgeted, FEMA can now waive the requirement to pay that extra money back. Additionally, FEMA gets authority to establish an "acceptable error ratio"—basically, a tolerance level for small mistakes in how money gets allocated during the planning process. Any funds within that acceptable margin can be used for eligible disaster recovery purposes without triggering recoupment demands.

Overall, this bill makes FEMA assistance less punitive for states, businesses, and individuals recovering from disasters by reducing bureaucratic obstacles and allowing more flexibility when minor mistakes or cost variations occur.

Streamlined FEMA Cost Exemption Act

Dunn, Neal P.

Streamlined FEMA Cost Exemption ActThis 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&nbsp;FEMA may take action to recover emergency or disaster assistance FEMA has provided to a state, Indian tribal, or local government.&nbsp;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)&nbsp;and maintain an error rate below 10%. The bill requires&nbsp;FEMA to establish its own acceptable error ratio for providing emergency or disaster assistance funds for eligible purposes. It also authorizes&nbsp;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.