In instances where the President has issued a major disaster declaration, Section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (hereinafter the Stafford Act, P.L. 93-288 ) requires federal agencies providing disaster assistance to ensure that individuals and businesses do not receive disaster assistance for losses for which they have already been compensated or may expect to be compensated. Duplication of benefits occurs when compensation from multiple sources exceeds the need for a particular recovery purpose. In such instances, the recipient receiving federal assistance is liable to the United States when the assistance duplicates benefits provided for the same purpose by any other source. The purpose of this report is to
provide a brief review of the SBA Disaster Loan and CDBG-DR programs; identify federal statutory authorities, regulations, and policy guidance documents governing the duplication of benefits in the provision of federal disaster assistance to businesses and individuals; identify issues and conflicts that may arise in interpreting and implementing the federal requirements governing duplication of benefits; highlight key policy considerations with respect to the SBA Disaster Loan Program and CDBG-DR duplication of benefits; and examine legislative policy options that may address issues related to the duplication of benefits in the provision of SBA Disaster Loan and CDBG-DR disaster recovery assistance. Policy Issues

There are several key areas of congressional concern related to the duplication of CDBG-DR assistance and SBA disaster loans, including confusion about the orderly execution of the delivery sequence as dictated by FEMA, how the duplication of benefits policy and the delivery sequence are interpreted, and concerns expressed about fairness, fraud, and delays in rebuilding efforts. A review of the issues surrounding the use of both SBA disaster loans and CDBG-DR assistance in addressing the needs of individuals and businesses engaged in disaster recovery efforts yields several observations: 
Despite quality checks and audits, agencies continue to provide duplicative disaster assistance to ineligible individuals and businesses. It has also been argued that the duplication assessment and collection process costs more to conduct than the money recouped. Federal guidelines regarding the process that states may follow in an effort to minimize potential duplication of benefits in the awarding of CDBG-DR are advisory and are not mandated requirements. To some this gives states too much flexibility to determine who is eligible for CDBG-DR. The issue of inequitable treatment includes concerns that
CDBG-DR is not provided for all disasters. Major disasters with similar losses to other major disasters may not benefit from CDBG-DR without affirmative action by Congress to appropriate funds; and in some cases, homeowners were denied CDBG-DR financial assistance because they obtained an SBA disaster loan. To some, it may have appeared that homeowners who took the initiative to repair or rebuild through SBA disaster loans were unfairly penalized. A multitude of assistance sources can be difficult to coordinate and monitor—particularly if the entities are not communicating with each other. Consequently, CDBG-DR is generally provided later than other forms of disaster assistance. This explains, in part, why the delivery sequence is often broken—because other forms of assistance can be provided more quickly. Creating a permanent CDBG-DR might provide a gateway for smaller incidents to receive CDBG-DR assistance. It is not uncommon for SBA loan recipients to see the denial of a CDBG-DR grant as an equity issue.
Numerous nonprofit, private, and governmental organizations provide a wide range of assistance after a disaster strikes. Section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288) requires federal agencies providing disaster assistance to ensure that individuals and businesses do not receive disaster assistance for losses for which they have already been compensated. Duplication of benefits occurs when compensation from multiple sources exceeds the need for a particular recovery purpose. Recipients are liable to the United States when the assistance duplicates benefits provided for the same purpose.
The combination of any type of disaster assistance can cause duplication. This report focuses on duplication of benefits between the Community Development Block Grant Disaster Recovery (CDBG-DR) grant program and the Small Business Administration (SBA) Disaster Loan Program. Key areas of congressional concern over the past decade with respect to the two programs include:
despite quality checks and audits, agencies continue to provide duplicative disaster assistance to individuals and businesses; duplication assessment and collection process costs often exceed the money recouped; the execution of the required delivery sequence can be complex and confusing because a multitude of assistance sources can be difficult to coordinate and monitor; the execution can also be complex and confusing because CDBG-DR is not listed in the Federal Emergency Management Agency's regulatory sequence procedures; benefits stem from multiple authorities subject to different interpretations; federal guidelines regarding the process that states may follow in an effort to minimize potential duplication of benefits in the awarding of CDBG-DR are advisory and are not mandated requirements. To some this gives states too much flexibility to determine who is eligible for CDBG-DR; disaster victims are sometimes unaware that they received an improper payment and, in some cases, receive collection notices well after they had spent the money on recovery needs.
Equity concerns also stem from the duplication of benefits. These include:
that CDBG-DR is not provided for all disasters. Consequently, some major disasters may benefit from CDBG-DR while others may not—even if they have similar losses; in most cases, SBA disaster loans can be provided more quickly than financial assistance from a CDBG-DR grant. As a consequence, it is possible for some homeowners to receive an SBA disaster loan and later be deemed ineligible when applying for financial assistance from a CDBG-DR grant due to duplication of benefits requirements. To some, it may appear that homeowners who took initiative to repair and rebuild were unfairly penalized.
This report provides a brief description of the SBA Disaster Loan Program and CDBG-DR. It lists relevant authorities, and highlights policy considerations. The report also explores a number of policy options Congress might consider when addressing duplication of benefits issues related to SBA disaster loans and CDBG-DR. These policy options include
requiring FEMA to clarify the regulatory delivery sequence to help eliminate potential confusion; prohibiting SBA disaster loan recipients from receiving CDBG-DR assistance or developing other policy options so that CDBG-DR assistance is awarded uniformly; establishing CDBG-DR assistance as a permanent disaster assistance program; replacing suggested guidelines for the disbursal of CDBG-DR with requirements; investigating the use of a centralized database to identify duplication of benefits more effectively.
This report will be updated as events warrant.