[First Reprint]

ASSEMBLY, No. 4784




DATED:  JUNE 26, 2017


      The Assembly Budget Committee reports favorably Assembly Bill No. 4784 (1R).

      This bill establishes specific procedures to be used by the Department of Community Affairs (DCA) to recover overpayments of Community Disaster Block Grant-Disaster Recovery (CDBG-DR) funds awarded through the Reconstruction, Rehabilitation, Elevation and Mitigation Program (RREM) and the Low-to-Moderate Income Homeowner Rebuilding Program (LMI).

      The bill requires the DCA to notify a Sandy-impacted homeowner when it determines that the homeowner has received an overpayment of RREM or LMI funds that must be repaid to the State.  The notice must provide information about the type of debt owed, an accounting of all funds disbursed to the homeowner, an explanation of the homeowner’s rights; information on how the homeowner may appeal the department’s determination; information on options for the repayment of debt; and information on any interest and penalties that may accrue if the debt is not paid within the period permitted by the bill.

      The homeowner is permitted to pay the debt in full in one lump sum. If there are insufficient assets to do so, the homeowner may apply for a repayment plan.  Eligibility for a repayment plan is based on a DCA review of the homeowner’s assets, income, and reasonable living expenses to determine whether the homeowner can pay a portion of the debt with an initial payment and the remainder thereof in regular installments.  The bill requires the DCA to establish two payment plans that allow for payment over a period of 36 months to 60 months, depending on the homeowner’s net disposable income.  The maximum payment under a payment plan cannot be greater than one-half of one percent of the homeowner’s monthly income, or six percent of the homeowner’s annual income, whichever is less.

      If the homeowner does not have sufficient income, assets, or resources to make payments, the debt, except for any portion that the homeowner can pay through disposable assets, will be compromised and considered paid in full.  When determining the ability of the homeowner to repay the debt, the department may consider the homeowner’s age, health, financial hardship, and other extraordinary circumstances as determined by the commissioner.

      The bill permits the homeowner to appeal, in writing, to the commissioner, a DCA determination that the homeowner received an over-disbursement of RREM or LMI funds.  The homeowner may also appeal a DCA determination that the homeowner is ineligible for either a payment plan or a compromise of the debt.  Appeals are to be filed with the commissioner within 30 days of the receipt of notice of an over-disbursement or the denial of a payment plan or compromise.  All appeals are to be decided within 30 days of their submission to the commissioner’s office.  The bill requires the State to refund any over-disbursement payments made by the homeowner that are in excess of the amount due under a payment plan agreement and appropriates General Fund monies to the DCA for that purpose.



      The enactment of Assembly Bill No. 4784 (1R) will have an indeterminate impact on State finances.  To the extent that the DCA has to refund over-disbursement payments in excess of the amount owed by a Sandy-impacted homeowner, the State will incur additional costs.  Information on the total amount federal Superstorm Sandy funding that may have to be repaid by homeowners who received grant assistance through the RREM and LMI programs is not available at this time.  During testimony before the Assembly Budget Committee in April 26, 2017, the Commissioner of Community Affairs noted that where possible, the DCA is working with homeowners to review bills for expenses incurred during the home rebuilding process to determine if those charges can be reclassified in order to avoid an over-disbursement of federal disaster assistance (technically known as a “duplication of benefits”).  The commissioner stated that the department had identified $1 million in charges that could be reclassified and not repaid to the federal government.