WASHINGTON (CN) - Some local governments who received Special Community Disaster Loans to fund operations in the aftermath of hurricanes Katrina and Rita may apply for cancellation of those loans, according to a Federal Emergency Management Agency regulation.
The loan program allocated $1 billion to local governments to supplement reduced revenue resulting from the hurricanes.
FEMA will consider cancelling the loans for communities that have had three successive years of insufficient revenue to cover operating expenses, following the hurricanes. Cancellation will be prorated so as not to underwrite pre-disaster budget deficits or transfers from operating accounts to capital accounts.
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