[Congressional Record Volume 151, Number 130 (Friday, October 7, 2005)]
[Extensions of Remarks]
[Page E2055]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF COMMUNITY DISASTER LOAN EQUITY ACT OF 2005

                                 ______
                                 

                        HON. CAROLYN B. MALONEY

                              of new york

                    in the house of representatives

                        Friday, October 7, 2005

  Mrs. MALONEY. Mr. Speaker, Representatives Jefferson, Melancon, 
Grijalva, Crowley, Serrano, Meeks and I are introducing the Community 
Disaster Loan Equity Act.
  We have all seen the headlines this week that the Mayor of New 
Orleans has been forced to lay off 3,000 municipal employees because 
the city of New Orleans can not pay them as a direct result of reduced 
tax revenues following Hurricane Katrina. There are a number of other 
towns, counties and parishes up and down the Gulf Coast in similar 
situations.
  Realizing that communities hard-hit by a major disaster frequently 
suffer a dramatic decrease in tax revenues accompanied by a dramatic 
increase in expenses, the Robert T. Stafford Disaster and Emergency 
Assistance Act allows FEMA to make loans to states and local 
communities to assist with lost tax revenues. This act prevents a 
community from having to drastically cut essential services and/or 
increase taxes as they recover from a disaster. These loans stabilize 
local governments during their greatest time of need. Frequently, these 
loans have been forgiven and were treated as grants. Since this program 
was created in 1976, 60 loans have been distributed.
  In 2000, arguing that they were too expensive, Congress placed a $5 
million cap on these loans with the Disaster Mitigation Act of 2000. 
Needless to say, a cap of $5 million unfairly penalizes larger 
communities or communities absolutely devastated by a disaster. That is 
why we are introducing the Community Disaster Loan Equity Act. This 
bill would remove the $5 million cap imposed by the Disaster Mitigation 
Act of 2000. Additionally, it would automatically cancel repayment of 
these loans and remove the limit of only providing up to 25 percent of 
total operating expenses if a disaster is declared an Incident of 
National Significance under the National Response Plan. This 
legislation is similar to legislation I introduced since the 107th 
Congress following the major loss of tax revenues suffered by New York 
City and State following 9/11.

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