Newly Introduced Puerto Rico Earthquake Recovery Bill Includes Recovery Funding and Tax Credits for Economic Development, Affordable Housing

The “Emergency Supplemental Appropriations for Disaster Relief and Puerto Rico Disaster Tax Relief Act of 2020 (H.R. 5687) was introduced on January 28 by House Appropriations Committee Chair Nita Lowey (D-NY). The bill includes multiple provisions designed to assist Puerto Rico in recovering from its recent earthquakes, continue the island’s recovery from Hurricane Maria, and strengthen Puerto Rico against future disasters.

The bill provides over $3.25 billion for disaster relief and rebuilding through HUD’s Community Development Block Grant–Disaster Relief (CDBG-DR) program, with over $1.5 billion specifically reserved for disaster mitigation efforts in earthquake-stricken areas. The legislation would not only allocate the funds but would also allow them to be used in conjunction with previously allocated funds and would institute strict deadlines for HUD to execute grant agreements allowing the territory to access the money. In addition to these CDBG-DR funds, the bill provides $50 million in Low Income Housing Tax Credits for 2020 and over $500 million annually in New Market Tax Credits for 2020 and 2021. These tax credits are intended to spur investments in affordable housing and economic development. The bill would also provide $1.25 billion for road repair, $100 million for education, $40 million in Disaster Nutrition Assistance, and $21 million for energy-sector planning and technical assistance.

The supplemental does not, however, include any measures to roll back the severe restrictions placed on over $16 billion in recovery and mitigation assistance announced by HUD in January. Those restrictions require the territorial government of Puerto Rico to make substantial changes to local law and policy before it can access the funding. Further, the bill does not include any requirement for FEMA and HUD to initiate the Disaster Housing Assistance Program (DHAP) to assist displaced survivors of the earthquakes access affordable housing. That jointly administered program was used to great success by Democratic and Republic administrations in the aftermath of previous major disasters like Hurricane Katrina. The agencies have neglected to activate DHAP in the aftermath of more recent disasters.

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