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Bill would protect Long Island homeowners facing Sandy 'clawbacks'

A proposed legislation would help homeowners facing potential

A proposed legislation would help homeowners facing potential "clawback" of Superstorm Sandy recovery funds. Seen here, homes destroyed by the 2012 storm in Lindenhurst. Credit: newsday/Thomas A. Ferrara

Legislation introduced this week in the Senate aims to help Long Island homeowners facing potential "clawback" of Superstorm Sandy recovery funds.

The measure introduced Tuesday by Sen. Kirsten Gillibrand (D-N.Y.) proposes a remedy for financial hardships afflicting people whose homes were damaged by the 2012 storm. A similar bill was introduced Thursday in the House by Rep. Kathleen Rice (D-Garden City), her spokesman said.

In the aftermath of the storm, homeowners were urged to apply for loans from the federal Small Business Administration to rebuild their homes. Later, when the state-administered, federally funded NY Rising program made grants available, hundreds of homeowners who had received the SBA loans also applied for, and received, grants to fund the work.

But instead of being allowed to repay the SBA loans and keep the NY Rising grants, the homeowners learned the federal government would "claw back" the grants, since federal law bars aid recipients from receiving "duplication of benefits," or funding from two sources for the same work.

The legislation introduced this week, called the Sandy Duplication of Benefits Fairness Act, would allow homeowners to keep the grants.

"Many Long Islanders are still working on their recovery almost a decade after Superstorm Sandy struck our communities," Gillibrand said in a statement. "Mixed messages from the federal government have caused unnecessary confusion and headaches for homeowners and families already dealing with financial hardship."

The proposed new law, she said, would "ensure that Long Islanders won’t be forced to pay back grant money they need to help rebuild their lives and communities."

People whose homes were damaged by Sandy "should not be subjected to more financial hardship just because the federal government did not provide clear instructions or comprehensive information in the aftermath of the storm," Rice said in a statement.

The measure is expected to get bipartisan support. A spokesman for Rep. Lee Zeldin (R-Shirley) said Zeldin will co-sponsor the measure. Similar legislation was introduced by then-Rep. Peter King (R-Seaford) in 2019, with Zeldin, Rice and Rep. Thomas Suozzi (D-Glen Cove) as co-sponsors, but it was not passed into law.

The newly introduced measure would extend to Sandy-damaged homeowners the same relief given to homeowners who were devastated by the 2016 floods in Louisiana. The Louisiana homeowners benefited from a law passed in 2018, which waived the prohibition on SBA loan recipients receiving grants in addition to the loans. Under that law, the waiver is available from 2016 through 2021.

The new measure would make the waiver available for those who suffered losses starting in October 2012, when Sandy hit.

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