On Oct. 11, Resident Commissioner Jenniffer González Colón and Governor Ricardo Rosselló informed the public that the House Appropriation Committee moved forward disaster relief legislation for Puerto Rico. This legislation, which will provide $36.4 billion in disaster relief, will include loans worth $4.9 billion to the Puerto Rico and U.S. Virgin Islands governments.
The bill provides direct loans under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5184), same act used for past crisis such as Hurricane Katrina. These direct loans, as mentioned in the legislation, are “to be used to assist local governments in providing essential services as a result of Hurricanes Harvey, Irma, or Maria.”
Also, the legislation notes that any loan issued to a territory or possession, “may be based on the projected loss of tax and other revenues and on projected cash outlay snot previously budgeted for a period not to exceed 180 days from the date of the major disaster, and may exceed $5 million.”
Local governments and their instrumentalities, “may each receive more than one loan with repayment provisions and other terms specific to the type of lost tax and other revenues and on projected un-budgeted cash outlays for which the loan is provided”, the bill adds. This bill “deems” territories and their instrumentalities as local government.
Rosselló gave a press conference where he stated that in the past, 92% of Community Development Loan Program loans have been forgiven, relying on certain metrics. Only territories are qualified for the $4.9 billion loan, not states.
The Financial Oversight Management Board wrote to the U.S. Treasury Secretary Steve Mnuchin yesterday asking for a “significant federal liquidity facility” to Puerto Rico, echoing Rosselló’s request. This legislation was in direct response from the Puerto Rico government’s request to aid the liquidity needs.
Resident Commissioner González Colón stated that “This is not the last appropriation; there will be others”, assuring that this is not the last aid effort by the federal government.
Specifics of the disaster relief legislation include the following: $13.7 billion to supplement the Federal Emergency Management Agency’s disaster relief fund, $16 billion for the national flood insurance program, and $500 million to address wildfires in California.
Another announcement made by the resident commissioner was the inclusion of Puerto Rico into the Emergency Supplemental Nutrition Assistance Program. This program provides funding for food for low-income individuals and families, which did not apply to Puerto Rico because of its own nutritional assistance program PAN. This program will include $1.27 billion, and Puerto Rico will be eligible throughout Sept. 2019, aiding the very high low income population in Puerto Rico.
The bill will address Puerto Rico’s immediate liquidity needs; however, this is in addition to the $4.8 billion in immediate relief through other government programs. Lastly, there will be the need for more long-term relief after estimates of the damages cost to the whole Island are made.
Even though the legislation is moving forward, it would likely not be passed until later this month due to the Senate being out of session until Oct. 16 and the upcoming budget resolution vote.