FEMA loans may be forgiven

FEMA loan forgiveness possible for Louisiana, Mississippi

Changes to regulations are being proposed to allow FEMA to forgive up to $1.2 billion in community disaster loans granted to poor communities and agencies in Louisiana and Mississippi following Hurricanes Katrina and Rita.

Local officials have long hoped that they would not have to repay all or most of these loans. Monday's announcement is evidence that the bureaucratic wheels are in motion to make a change that will let them remove huge debts that have cast a long shadow on their financial audits and bond ratings.

"It's a tremendous first step in getting those loans forgiven; currently that debt sits on our books, " said Reginald Zeno, chief financial officer for the city of New Orleans.

"Better late than never, " said Rep. Charlie Melancon, D-Napoleonville. "This says to me that this administration is quite serious about recovery and this is another example of getting stuff done that's been two years in the making."

Also in the South:

ALABAMA: Pending bill would make access to government documents easier

ARKANSAS: $10 million tax cut for manufacturers signed by Gov. Beebe

FLORIDA: Tobacco tax plan unveiled by Senate leaders

GEORGIA: Drought over for Northeast Georgia

KENTUCKY: Both state and federal taxes on tobacco products to go up Wednesday

NORTH CAROLINA: Report says mental health basics need revision

SOUTH CAROLINA: Gov. Sanford offers deal on stimulus

TENNESSEE: Bootleg CDs protected by proposed bill

VIRGINIA: GOP chairman hires lawyers to fight ouster

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