Federal Disaster Notification and Payment Protection Act of 2016

Federal Disaster Notification and Payment Protection Act of 2016 This bill prohibits the use of federal funds to recoup a debt owed to the United States related to assistance provided to an individual or household under the Robert T. Stafford Disaster Relief and Emergency Assistance Act with respect to a major disaster declared by the President on or after January 1, 2011, if: the assistance was distributed based on an error by the Federal Emergency Management Agency (FEMA), the collection of the debt would be against equity and good conscience, and the debt is not the result of fraud or other fault of the debtor or any party having an interest in the assistance distributed. The Stafford Act is amended to require the President to establish a process to ensure that each individual and business that applies for a category of federal disaster assistance is provided written notice that describes: the various categories of federal disaster assistance that may be available, the impact that receiving or declining such assistance will have on eligibility for other categories of assistance, and repayment requirements or penalties that may apply if multiple categories of assistance are accepted. An individual or business that is not provided such notice may not be held responsible for any repayment requirement or penalty that would otherwise result from the receipt of such assistance.