UNION BEACH, NJ – U.S. Senator Bob Menendez and Congressman Frank Pallone (N.J.-06) today unveiled companion legislation designed to protect innocent Sandy victims from retroactive clawbacks to their federal disaster assistance in response to recoupment letters sent by the Federal Emergency Management Administration (FEMA).

“Disaster victims should never have to pay for someone else’s mistake,” said Sen. Menendez. “These families have suffered enough, are barely holding on financially—emotionally—and can’t afford to pay back money they thought all along was rightfully theirs to use towards their recovery.”

“Homeowners still struggling to rebuild from the devastation of Sandy should not be forced to repay grants that were awarded because of honest mistakes,” said Rep. Pallone. “While I understand the importance of reducing waste, fraud, and abuse in the system, the efforts to do so should not be made on the back end of this process in a way that punishes disaster victims with an unaffordable bill. I’m proud to join Senator Menendez in introducing this legislation that will help forgive debts that New Jersey homeowners have incurred due to honest mistakes made either on their part or by FEMA.”

The proposed legislation would require FEMA to forgive debts for Sandy victims who make under $250,000 per year, if the funds were awarded as a result of the government’s mistake. It would not apply to cases of fraud.

FEMA has sent hundreds of debt notice letters to New Jersey disaster victims demanding they pay back money FEMA erroneously gave them. The letters threatened legal action, negative reports to credit agencies, property liens and their future eligibility for federal disaster assistance. Many of the people targeted have already spent the money they got making necessary repairs to their damaged homes and do not have the means to make restitution.

Congress passed similar legislation following Katrina in response to comparable action taken by FEMA against innocent disaster victims.

The announcement was made at the home of Rick and Sandy Drake, who did everything right to elevate and repair their damaged home, but erroneously faced skyrocketing flood insurance rates—from $600-to-$33,000 annually—that threatened the family with financial ruin. After contacting Sen. Menendez and his office working several months with FEMA to correct the error, Menendez announced today that FEMA has agreed to restore the Drakes’ original rate.

"The Senator's office went above and beyond my expectations,” said Rick Drake. “They were my voice and defended my position with FEMA. The senator took it upon himself to make this a personal matter. I cannot believe the amount of professionalism and dedication the senator and his staff showed through the several months."