[House Report 116-486]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 116-486
======================================================================
RESILIENCE REVOLVING LOAN FUND ACT OF 2019
_______
September 4, 2020.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. DeFazio, from the Committee on Transportation and Infrastructure,
submitted the following
R E P O R T
[To accompany H.R. 3779]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 3779) to amend the Robert T.
Stafford Disaster Relief and Emergency Assistance Act to allow
the Administrator of the Federal Emergency Management Agency to
provide capitalization grants to eligible entities to establish
revolving funds to provide assistance to reduce disaster risks,
and for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose of Legislation........................................... 5
Background and Need for Legislation.............................. 6
Hearings......................................................... 7
Legislative History and Consideration............................ 8
Committee Votes.................................................. 8
Committee Oversight Findings..................................... 8
New Budget Authority and Tax Expenditures........................ 8
Congressional Budget Office Cost Estimate........................ 8
Performance Goals and Objectives................................. 11
Duplication of Federal Programs.................................. 11
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits....................................................... 12
Federal Mandates Statement....................................... 12
Preemption Clarification......................................... 12
Advisory Committee Statement..................................... 12
Applicability to Legislative Branch.............................. 12
Section-by-Section Analysis of the Legislation................... 12
Changes in Existing Law Made by the Bill, as Reported............ 13
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Resilience Revolving Loan Fund Act of
2019''.
SEC. 2. GRANTS TO ENTITIES FOR ESTABLISHMENT OF HAZARD MITIGATION
REVOLVING LOAN FUNDS.
Title II of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5131 et seq.) is amended by adding at the end
the following:
``SEC. 205 GRANTS TO ENTITIES FOR ESTABLISHMENT OF HAZARD MITIGATION
REVOLVING LOAN FUNDS.
``(a) General Authority.--
``(1) In general.--The Administrator may enter into
agreements with eligible entities to make capitalization grants
to such entities for the establishment of hazard mitigation
revolving loan funds (referred to in this section as `entity
loan funds') for providing funding assistance to local
governments to carry out eligible projects under this section
to reduce disaster risks for homeowners, businesses, nonprofit
organizations, and communities in order to decrease--
``(A) the loss of life and property;
``(B) the cost of insurance claims; and
``(C) Federal disaster payments.
``(2) Agreements.--Any agreement entered into under this
section shall require the participating entity to--
``(A) comply with the requirements of this section;
and
``(B) use accounting, audit, and fiscal procedures
conforming to generally accepted accounting standards.
``(b) Application.--
``(1) In general.--To be eligible to receive a capitalization
grant under this section, an eligible entity shall submit to
the Administrator an application that includes the following:
``(A) Project proposals comprised of local government
hazard mitigation projects, on the condition that the
entity provides public notice not less than 6 weeks
prior to the submission of an application.
``(B) An assessment of recurring major disaster
vulnerabilities impacting the entity that demonstrates
an escalating risk to life and property.
``(C) A description of how the hazard mitigation plan
of the entity has or has not taken the vulnerabilities
described in paragraph (2) into account.
``(D) A description about how the projects described
in paragraph (1) could conform with the hazard
mitigation plans of the entity and local governments.
``(E) A proposal of the systematic and regional
approach to achieve resilience in a vulnerable area,
including impacts to river basins, river corridors,
watersheds, estuaries, bays, coastal regions, micro-
basins, micro-watersheds, ecosystems, and areas at risk
of earthquakes, tsunamis, droughts, and wildfires,
including the wildland-urban interface.
``(2) Technical assistance.--The Administrator shall provide
technical assistance to eligible entities for applications
under this section.
``(c) Entity Loan Fund.--
``(1) Establishment of fund.--An entity that receives a
capitalization grant under this section shall establish an
entity loan fund that complies with the requirements of this
subsection.
``(2) Fund management.--Except as provided in paragraph (3),
an entity loan fund shall be administered by the agency
responsible for emergency management for such entity and shall
include only--
``(A) funds provided by a capitalization grant under
this section;
``(B) repayments of loans under this section to the
entity loan fund; and
``(C) interest earned on amounts in the entity loan
fund.
``(3) Administration.--A participating entity may combine the
financial administration of the entity loan fund of such entity
with the financial administration of any other revolving fund
established by such entity if the Administrator determines
that--
``(A) the capitalization grant, entity share,
repayments of loans, and interest earned on amounts in
the entity loan fund are accounted for separately from
other amounts in the revolving fund; and
``(B) the authority to establish assistance
priorities and carry out oversight activities remains
in the control of the agency responsible for emergency
management for the entity.
``(4) Entity share of funds.--On or before the date on which
a participating entity receives a capitalization grant under
this section, the entity shall deposit into the entity loan
fund of such entity, an amount equal to not less than 10
percent of the amount of the capitalization grant.
``(d) Apportionment.--
``(1) In general.--Except as otherwise provided by this
subsection, the Administrator shall apportion funds made
available to carry out this section to entities that have
entered into an agreement under subsection (a)(2) in amounts as
determined by the Administrator.
``(2) Reservation of funds.--The Administrator shall reserve
not more than 2.5 percent of the amount made available to carry
out this section for--
``(A) administrative costs incurred in carrying out
this section; and
``(B) providing technical assistance to participating
entities under subsection (b)(2).
``(3) Priority.--In the apportionment of capitalization
grants under this subsection, the Administrator shall give
priority to entity applications under subsection (b) that--
``(A) propose projects increasing resilience and
reducing risk of harm to natural and built
infrastructure;
``(B) involve a partnership between 2 or more
eligible entities to carry out a project or similar
projects;
``(C) take into account regional impacts of hazards
on river basins, river corridors, micro-watersheds,
macro-watersheds, estuaries, bays, coastal regions, and
areas vulnerable to earthquake, drought, tsunamis and
wildfire, including the wildland-urban interface; or
``(D) propose projects for the resilience of major
economic sectors or critical national infrastructure,
including ports, global commodity supply chain assets
(located within an entity or within the jurisdiction of
local governments and tribal governments), capacity,
power and water production and distribution centers,
and bridges and waterways essential to interstate
commerce.
``(e) Use of Funds.--
``(1) Types of assistance.--Amounts deposited in an entity
loan fund, including loan repayments and interest earned on
such amounts, may be used--
``(A) to make loans, on the condition that--
``(i) such loans are made at an interest rate
of not more than 1.5 percent;
``(ii) annual principal and interest payments
will commence not later than 1 year after
completion of any project and all loans will be
fully amortized--
``(I) not later than 20 years after
the date on which the project is
completed; or
``(II) for projects in a low-income
geographic area, not later than 30
years after the date on which the
projects is completed and not longer
than the expected design life of the
project;
``(iii) the local government receiving a loan
establishes a dedicated source of revenue for
repayment of the loan;
``(iv) the local government receiving a loan
has a hazard mitigation plan that has been
approved by the participating entity; and
``(v) the entity loan fund will be credited
with all payments of principal and interest on
all loans;
``(B) for mitigation planning, not to exceed 10
percent of the capitalization grants made to the
participating entity in a fiscal year;
``(C) for the reasonable costs of administering the
fund and conducting activities under this section,
except that such amounts shall not exceed $100,000 per
year, 2 percent of the capitalization grants made to
the participating entity in a fiscal year, or 1 percent
of the value of the entity loan fund, whichever amount
is greatest, plus the amount of any fees collected by
the entity for such purpose regardless of the source;
and
``(D) to earn interest on the entity loan fund.
``(2) Prohibition on determination that loan is a
duplication.--In carrying out this section, Administrator may
not determine that a loan is a duplication of assistance or a
duplication of programs.
``(3) Projects and activities eligible for assistance.--
Except as provided in this subsection, a participating entity
may use funds in the entity loan fund to provide financial
assistance for projects or activities that mitigate the impacts
of hazards, including--
``(A) drought and prolonged episodes of intense heat;
``(B) severe storms, including tornados, wind storms,
cyclones, and severe winter storms;
``(C) wildfires;
``(D) earthquakes;
``(E) flooding, including the construction, repair,
or replacement of a non-Federal levee or other flood
control structure, provided the Administrator, in
consultation with the Corps of Engineers (if
appropriate), requires an eligible entity to determine
that such levee or structure is designed, constructed,
and maintained in accordance with sound engineering
practices and standards equivalent to the purpose for
which such levee or structure is intended;
``(F) storm surges;
``(G) chemical spills that present an imminent threat
to life and property;
``(H) seepage resulting from chemical spills and
flooding; and
``(I) any catastrophic event that the entity
determines appropriate.
``(4) Zoning and land use planning changes.--A participating
entity may use not more than 10 percent of the entity loan fund
in a fiscal year to provide financial assistance for zoning and
land use planning changes focused on--
``(A) the development and improvement of zoning and
land use codes that incentivize and encourage low-
impact development, resilient wildland-urban interface
land management and development, natural
infrastructure, green stormwater management,
conservation areas adjacent to floodplains,
implementation of watershed or greenway master plans,
and reconnection of floodplains;
``(B) the study and creation of land use incentives
that reward developers for greater reliance on low
impact development stormwater best management
practices, exchange density increases for increased
open space and improvement of neighborhood catch basins
to mitigate urban flooding, reward developers for
including and augmenting natural infrastructure
adjacent to and around building projects without
reliance on increased sprawl, and reward developers for
addressing wildfire ignition; and
``(C) the study and creation of an erosion response
plan that accommodates river, lake, forest, plains, and
ocean shoreline retreating or bluff stabilization due
to increased flooding and disaster impacts.
``(5) Administrative and technical costs.--For each fiscal
year, a participating entity may use the amount described in
paragraph (1)(C) to--
``(A) pay the reasonable costs of administering the
programs under this section, including the cost of
establishing an entity loan fund;
``(B) provide technical assistance to recipients of
financial assistance from the entity loan fund, on the
condition that such technical assistance does not
exceed 5 percent of the capitalization grant made to
such entity.
``(6) Limitation for single projects.--A participating entity
may not provide an amount equal to or more than $5,000,000 to a
single hazard mitigation project.
``(f) Intended Use Plans.--
``(1) In general.--After providing for public comment and
review, and consultation with appropriate agencies in an
entity, Federal agencies, and interest groups, each
participating entity shall annually prepare and submit to the
Administrator a plan identifying the intended uses of the
entity loan fund.
``(2) Contents of plan.--An entity intended use plan prepared
under paragraph (1) shall include--
``(A) the integration of entity planning efforts,
including entity hazard mitigation plans and other
programs and initiatives relating to mitigation of
major disasters carried out by such entity;
``(B) an explanation of the mitigation and resiliency
benefits the entity intends to achieve by--
``(i) reducing future damage and loss
associated with hazards;
``(ii) reducing the number of severe
repetitive loss structures and repetitive loss
structures in the entity;
``(iii) decreasing the number of insurance
claims in the entity from injuries resulting
from major disasters or other hazards; and
``(iv) increasing the rating under the
community rating system under section 1315(b)
of the Housing and Urban Development Act of
1968 (42 U.S.C. 4022(b)) for communities in the
entity;
``(C) information on the availability of, and
application process for, financial assistance from the
entity loan fund of such entity;
``(D) the criteria and methods established for the
distribution of funds;
``(E) the amount of financial assistance that the
entity anticipates apportioning;
``(F) the expected terms of the assistance provided
from the entity loan fund; and
``(G) a description of the financial status of the
entity loan fund, including short-term and long-term
goals for the fund.
``(g) Audits, Reports, Publications, and Oversight.--
``(1) Biennial entity audit and report.--Beginning not later
than the last day of the second fiscal year after the receipt
of payments under this section, and biennially thereafter, any
participating entity shall--
``(A) conduct an audit of such fund established under
subsection (b); and
``(B) provide to the Administrator a report
including--
``(i) the result of any such audit; and
``(ii) a review of the effectiveness of the
entity loan fund of the entity with respect to
meeting the goals and intended benefits
described in the intended use plan submitted by
the entity under subsection (e).
``(2) Publication.--A participating entity shall publish and
periodically update information about all projects receiving
funding from the entity loan fund of such entity, including--
``(A) the location of the project;
``(B) the type and amount of assistance provided from
the entity loan fund;
``(C) the expected funding schedule; and
``(D) the anticipated date of completion of the
project.
``(3) Oversight.--
``(A) In general.--The Administrator shall, at least
every 4 years, conduct reviews and audits as may be
determined necessary or appropriate by the
Administrator to carry out the objectives of this
section and determine the effectiveness of the fund in
reducing hazard risk.
``(B) GAO requirements.--The entity shall conduct
audits under paragraph (1) in accordance with the
auditing procedures of the Government Accountability
Office, including chapter 75 of title 31.
``(C) Recommendations by administrator.--The
Administrator may at any time make recommendations for
or require specific changes to an entity's loan fund in
order to improve the effectiveness of the fund.
``(h) Regulations or Guidance.--The Administrator shall issue such
regulations or guidance as are necessary to--
``(1) ensure that each participating entity uses funds as
efficiently as possible; and
``(2) reduce waste, fraud, and abuse to the maximum extent
possible.
``(i) Waiver Authority.--Until such time as the Administrator issues
regulations to implement this section, the Administrator may--
``(1) waive notice and comment rulemaking, if the
Administrator determines the waiver is necessary to
expeditiously implement this section; and
``(2) provide capitalization grants under this section as a
pilot program.
``(j) Definitions.--In this section, the following definitions apply:
``(1) Eligible entity.--The term `eligible entity' means a
State or an Indian tribal government (as such terms are defined
in section 102 of this Act (42 U.S.C. 5122)).
``(2) Hazard mitigation plan.--The term `hazard mitigation
plan' means a mitigation plan submitted under section 322 and
approved by the Administrator.
``(3) Low-income geographic area.--The term `low-income
geographic area' means an area described in paragraph (1) or
(2) of section 301(a) of the Public Works and Economic
Development Act of 1965 (42 U.S.C. 3161(a)).
``(4) Participating entity.--The term `participating entity'
means an eligible entity that has entered into an agreement
under this section.
``(5) Repetitive loss structure.--The term `repetitive loss
structure' has the meaning given the term in section 1370 of
the National Flood Insurance Act (42 U.S.C. 4121).
``(6) Severe repetitive loss structure.--The term `severe
repetitive loss structure' has the meaning given the term in
section 1366(h) of the National Flood Insurance Act (42 U.S.C.
4104c(h).
``(7) Wildland-urban interface.--The term `wildland-urban
interface' has the meaning given the term in section 101 of the
Healthy Forests Restoration Act of 2003 (16 U.S.C. 6511).
``(k) Authorization of Appropriations.--There is authorized to be
appropriated $100,000,000 for each of fiscal years 2020 and 2021.''.
Purpose of Legislation
The purpose of H.R. 3779, as amended, is to establish a
state revolving loan fund program to facilitate funding of
mitigation projects that reduce the risks and costs of natural
disasters.
Background and Need for Legislation
Sources of Federal funding for proactive, predisaster
mitigation are highly competitive and limited due to the
significant volume of identified and necessary hazard
mitigation projects across the Nation.
Under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (Stafford Act, Pub.L. 93-288, as amended),
options for mitigation assistance include the Pre-Disaster
Mitigation (PDM)\1\ program and the Hazard Mitigation Grant
Program (HMGP).\2\ With the Sandy Recovery Improvement Act
(Division B of Pub.L. 113-2), the Committee provided
flexibility in using Federal Emergency Management Agency's
(FEMA) Public Assistance program to rebuild following a
disaster,\3\ there is only a single FEMA pre-disaster
mitigation program providing communities with resources to fund
projects before disaster strikes in order to prevent or lessen
damage from a future hazard event.
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\1\Stafford Act, Sec. 203.
\2\Stafford Act, Sec. 404.
\3\Stafford Act, Sec. 428.
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While the Disaster Recovery Reform Act of 2018 (Division D
of Pub.L. 115-254) provides a more consistent source of funds
for FEMA's PDM program and allows for additional projects to
receive Federal assistance, the outstanding need for pre-
disaster mitigation projects still surpasses projected funding.
Strengthening mitigation practices is critical to reducing
the future costs of disasters for the taxpayer; studies have
shown for every $1 spent in mitigation, between $4 and $8 is
saved in avoided disaster recovery costs.\4\ Providing
additional solutions for communities to mitigate against
disasters will reduce costs and save lives.
---------------------------------------------------------------------------
\4\See Congressional Budget Office, ``Potential Cost Savings from
the Pre-Disaster Mitigation Program,'' September 2007; University of
Pennsylvania, Wharton School Risk Center, ``Economic Effectiveness of
Implementing a Statewide Building Code: The Case of Florida,'' May
2016; National Institute of Building Sciences (NIBS), ``Natural Hazard
Mitigation Saves: 2017 Interim Report Summary of Findings,'' available
at https://www.nibs.org/page/ms2_dwnload.
---------------------------------------------------------------------------
Examining the use and application of revolving loan funds
suggests such funds may provide communities with additional
flexibility to fund mitigation projects while replenishing the
initial funding through repayments. For example, Congress has
authorized and appropriated dollars for similar state revolving
funds for projects that have resulted in a significant increase
in the capacity and capabilities of water infrastructure in
communities across the Nation.
Investment in mitigation projects and activities has a
significant and measurable return on investment in reducing
recovery costs following hazard events. To reduce the rising
costs associated with disaster response and recovery,
additional Federal funding streams dedicated to pre-disaster
mitigation are necessary.
H.R. 3779, as amended, would amend the Stafford Act by
authorizing capitalization grants and establishing a state-
managed revolving loan fund program to allow states to offer
low-interest loans to eligible local entities for mitigation
projects, with the repayment of the loans providing capital for
subsequent projects. Participating entities would be provided
additional flexibilities in the nature and types of eligible
projects to further mitigate the impacts of natural disasters
such as earthquakes, flooding, and wildfires, as well as non-
natural events like chemical spills. For example, existing FEMA
hazard mitigation programs restrict Public Assistance
mitigation funds if projects may accrue to the benefit of
homeowners and businesses. This can create challenges,
particularly in rural areas with lower populations and large
amounts of farmland. The revolving loan fund is specifically
intended to reduce risks for homeowners, businesses, nonprofit
organizations, and communities. H.R. 3779, as amended, also
explicitly ensures eligibility for non-Federal levees and other
flood control measures.
Hearings
For the purposes of section 103(i) of H. Res. 6 of the
116th Congress the following hearings were used to develop or
consider H.R. 3779, as amended:
On February 26, 2019, the Committee on Transportation and
Infrastructure held a hearing entitled, ``Examining How Federal
Infrastructure Policy Could Help Mitigate and Adapt to Climate
Change.'' The Committee received testimony from Dr. Daniel
Sperling, Board Member, California Air Resources Board; Mr. Ben
Prochazka; Vice President, Electrification Coalition; Ms. Vicki
Arroyo, Executive Director, Georgetown Climate Center; Mr.
James M. Proctor, II, Senior Vice President and General
Counsel, McWane, Inc., testifying on behalf of the Build Strong
Coalition; Mr. Kevin DeGood, Director, Infrastructure Policy,
Center for American Progress; Ms. Lynn Scarlett, Vice
President, Policy and Government Affairs, The Nature
Conservancy; and Dr. Whitley J. Saumweber, Director, Stephenson
Ocean Security (SOS) Project, Center for Strategic and
International Studies. Topics discussed included impacts of
severe weather events and rising costs of federal response and
recovery operations.
On May 22, 2019, the Subcommittee on Economic Development,
Public Buildings, and Emergency Management held a hearing
titled ``Disaster Preparedness: DRRA Implementation and FEMA
Readiness.'' The Subcommittee received testimony from Dr.
Daniel Kaniewski, Deputy Administrator for Resilience, Federal
Emergency Management Agency, U.S. Department of Homeland
Security; Ms. Sima Merick, Executive Director, Ohio Emergency
Management Agency, testifying on behalf of the National
Emergency Management Association; Mr. Nicholas L. Crossley,
Director, Emergency Management and Homeland Security Agency,
Hamilton County, Ohio, testifying on behalf of the
International Association of Emergency Managers; Hon. James
Gore, Supervisor, 4th District, Sonoma County, California,
testifying on behalf of the National Association of Counties,
Ms. Pamela S. Williams, Executive Director, BuildStrong
Coalition; Mr. Alphonse Davis, Deputy Director, Engineering
Extension Service, Texas A&M, testifying on behalf of the
National Domestic Preparedness Consortium; and Mr. Randy Noel,
President, Reve, Inc., testifying on behalf of the National
Association of Home Builders. Topics discussed included the
state of federal disaster preparedness programs since the
enactment of the Disaster Recovery Reform Act of 2018, the
status of federal disaster recovery assistance funding
appropriated in the wake of major disaster declarations granted
by the President from 2017-2019, and the increasing frequency
of extreme weather-related hazards.
Legislative History and Consideration
H.R. 3779 was introduced in the House on July 16, 2019, by
Ms. Craig and referred to the Committee on Transportation and
Infrastructure. Within the Committee, H.R. 3779 was referred to
the Subcommittee on Economic Development, Public Buildings, and
Emergency Management.
The Chair discharged the Subcommittee on Economic
Development, Public Buildings, and Emergency Management from
further consideration of H.R. 3779 on September 19, 2019.
The Committee met in open session to consider H.R. 3779 on
September 19, 2019, and ordered the measure to be reported to
the House with a favorable recommendation, as amended, by voice
vote, a quorum being present.
The following amendments were offered:
An Amendment in the Nature of a Substitute offered by Ms.
Craig (#1); was AGREED TO, as amended, by voice vote.
An amendment to the Amendment in the Nature of a Substitute
offered by Mr. Rodney Davis of Illinois (#1A) was AGREED TO by
voice vote.
Page 11, strike lines 17 through 24 (and redesignate
accordingly).
Page 17, strike lines 11 through 14 (and redesignate
accordingly).;
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires each committee report to include the
total number of votes cast for and against on each record vote
on a motion to report and on any amendment offered to the
measure or matter, and the names of those members voting for
and against.
There were no recorded votes taken in connection with
consideration of H.R. 3779.
Committee Oversight Findings
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
Congressional Budget Office Cost Estimate
With respect to the requirement of clause 3(c)(3) of rule
XIII of the Rules of the House of Representatives and section
402 of the Congressional Budget Act of 1974, the Committee has
received the enclosed cost estimate for H.R. 3779, as amended,
from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 19, 2020.
Hon. Peter A. DeFazio,
Chairman, Committee on Transportation and Infrastructure,
House, of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3779, the
Resilience Revolving Loan Fund Act of 2019.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jon Sperl.
Sincerely,
Mark P. Hadley
(For Phillip L. Swagel, Director).
Enclosure.
{GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT}
The bill would
Authorize the appropriation of $200 million
for the Federal Emergency Management Agency to make
grants to capitalize new revolving funds administered
by states, from which state agencies would make low-
interest loans to local governments, communities,
homeowners, and owners of other property to finance
projects that would mitigate damage from future
disasters
Estimated budgetary effects would primarily stem from
Spending of the authorized and necessary
amounts
Revenue loss from issuing additional tax
exempt bonds
Bill summary: H.R. 3779 would authorize the appropriation
of $100 million in each of 2020 and 2021 for the Federal
Emergency Management Agency (FEMA) to make grants to capitalize
new revolving funds administered by states. From those
revolving funds, state agencies would make low-interest loans
to local governments, communities, homeowners, and owners of
other property to finance projects that would mitigate damage
from future disasters.
Estimated Federal cost: The estimated budgetary effect of
H.R. 3779 is shown in Table 1. The costs of the legislation
fall within budget function 450 (community and regional
development).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 3779
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
----------------------------------------------------
2020 2021 2022 2023 2024 2025 2020-2025
----------------------------------------------------------------------------------------------------------------
Increases in Spending Subject to Appropriation
Grants for Hazard Mitigation:
Authorization.......................................... 100 100 0 0 0 0 200
Estimated Outlays...................................... * 7 37 78 78 0 200
Additional Administrative Costs:
Estimated Authorization................................ 1 1 2 5 5 0 14
Estimated Outlays...................................... 1 1 2 5 5 0 14
Total Changes:
Estimated Authorization............................ 101 101 2 5 5 0 214
Estimated Outlays.................................. 1 8 39 83 83 0 214
Decreases in Revenues
Estimated Revenuesa........................................ 0 0 -1 -2 -3 -4 -10
----------------------------------------------------------------------------------------------------------------
* = between $500,000 and zero.
a Estimate provided by the staff of the Joint Committee on Taxation.
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted in 2020. Estimated outlays are
based on historical spending patterns for similar programs.
Spending subject to appropriation: CBO estimates that
implementing H.R. 3779 would cost $214 million over the 2020-
2025 period, assuming appropriation of the authorized and
necessary amounts.
State Revolving Funds for Disaster Mitigation. H.R. 3779
would authorize the appropriation of $100 million annually in
2020 and 2021 for FEMA to make grants to states to capitalize
new revolving funds; CBO estimates that those amounts would be
spent over the 2020-2025 period. To receive assistance under
the bill, states would need to contribute 10 percent of the
amount of a federal grant to its revolving fund.
To implement the bill, CBO expects that FEMA would need
about 18 months to hire new employees, establish the required
auditing and reporting processes, issue program regulations,
and review grant applications from states.
CBO expects that FEMA would gradually increase the number
of grants it would make through 2024. Estimated outlays are
based on historical spending patterns for similar state
revolving fund programs administered by other federal agencies.
CBO expects that states would use most of their revolving funds
to assist local governments with infrastructure projects, such
as projects that control flooding. The bill also would allow
recipients to use small portions of assistance to develop
zoning and land use plans and to enforce updated building
codes.
Administrative Costs. H.R 3779 would authorize FEMA to use
up to 2.5 percent of amounts authorized by the bill, or a total
of $5 million, to pay administrative costs. However, based on
information from FEMA, CBO estimates that the agency would need
additional amounts each year over the 2020-2024 period to fully
implement the program; CBO estimates the additional amounts
required for administrative costs would increase over the next
five years as FEMA provides more grants. In total, CBO
estimates that FEMA would need an additional $14 million over
the 2020-2025 period. Those amounts would cover the cost of
employing 10 new staff members, contract support, technical
assistance to states, and other operating costs.
Revenues: The staff of the Joint Committee on Taxation
(JCT) expects that states would use a portion of the
capitalization grants to leverage additional funds by issuing
tax-exempt bonds. JCT estimates that, as a result, H.R. 3779
would reduce federal revenues by $30 million over the 2020-2030
period.
Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in revenues that are subject to those
pay-as-you-go procedures are shown in Table 2.
TABLE 2.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 3779, RESILIENCE REVOLVING LOAN FUND ACT OF 2019, AS ORDERED REPORTED BY THE
HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE ON SEPTEMBER 19, 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
--------------------------------------------------------------------------------------------------
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2020-2025 2020-2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Increase in the Deficit
Pay-As-You Go Effect................................. 0 0 1 2 3 4 4 4 4 4 4 10 30
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term deficits: CBO estimates that enacting
H.R. 3779 would not increase deficits by more than $5 billion
in any of the consecutive 10-year periods beginning in 2031.
Mandates: None.
Estimate prepared by: Federal costs: Jon Sperl; Mandates:
Rachel Austin; Revenues: The staff of the Joint Committee on
Taxation.
Estimate reviewed by: Kim P. Cawley, Chief, Natural and
Physical Resources Cost Estimates Unit; H. Samuel Papenfuss,
Deputy Director of Budget Analysis.
Performance Goals and Objectives
With respect to the requirement of clause 3(c)(4) of rule
XIII of the Rules of the House of Representatives, the
performance goal and objective of this legislation is to
increase resiliency by providing States with the resources to
proactively mitigate the impacts of future disasters.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee finds that no provision
of H.R. 3779, as amended, establishes or reauthorizes a program
of the federal government known to be duplicative of another
federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of the rule
XXI.
Federal Mandates Statement
The Committee adopts as its own the estimate of federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act (Public Law 104-4).
Preemption Clarification
Section 423 of the Congressional Budget Act of 1974
requires the report of any Committee on a bill or joint
resolution to include a statement on the extent to which the
bill or joint resolution is intended to preempt state, local,
or tribal law. The Committee finds that H.R. 3779, as amended,
does not preempt any state, local, or tribal law.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Public Law
104-1).
Section-by-Section Analysis of the Legislation, as Amended
Section 1. Short title
This section states that the bill may be cited as the
``Resilience Revolving Loan Fund Act of 2019.''
Sec. 2. Grants to entities for establishment of hazard mitigation
revolving loan funds
This section authorizes the FEMA Administrator to enter
into agreements with State and tribal governments to make
capitalization grants for the establishment of hazard
mitigation revolving loan funds to reduce disaster risk to
decrease the loss of life and property, the cost of insurance
claims, and Federal disaster payments.
Priority is given to project applications aimed at
increasing resilience and reducing risk of harm to natural and
built infrastructure, partnership projects, and projects for
the resilience of major economic sectors or critical national
infrastructure.
Eligible entities would be required to put down 10 percent
of the capitalization grant upon disbursement of the loan. The
Administrator may not reserve more than 2.5 percent of funds
available for administrative costs, technical assistance, and
grants to insular areas.
The new capitalization grants are authorized to be
appropriated at $100,000,000 per fiscal year for the period of
two years.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
ROBERT T. STAFFORD DISASTER RELIEF AND EMERGENCY ASSISTANCE ACT
* * * * * * *
TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE
* * * * * * *
SEC. 205 GRANTS TO ENTITIES FOR ESTABLISHMENT OF HAZARD MITIGATION
REVOLVING LOAN FUNDS.
(a) General Authority.--
(1) In general.--The Administrator may enter into
agreements with eligible entities to make
capitalization grants to such entities for the
establishment of hazard mitigation revolving loan funds
(referred to in this section as ``entity loan funds'')
for providing funding assistance to local governments
to carry out eligible projects under this section to
reduce disaster risks for homeowners, businesses,
nonprofit organizations, and communities in order to
decrease--
(A) the loss of life and property;
(B) the cost of insurance claims; and
(C) Federal disaster payments.
(2) Agreements.--Any agreement entered into under
this section shall require the participating entity
to--
(A) comply with the requirements of this
section; and
(B) use accounting, audit, and fiscal
procedures conforming to generally accepted
accounting standards.
(b) Application.--
(1) In general.--To be eligible to receive a
capitalization grant under this section, an eligible
entity shall submit to the Administrator an application
that includes the following:
(A) Project proposals comprised of local
government hazard mitigation projects, on the
condition that the entity provides public
notice not less than 6 weeks prior to the
submission of an application.
(B) An assessment of recurring major disaster
vulnerabilities impacting the entity that
demonstrates an escalating risk to life and
property.
(C) A description of how the hazard
mitigation plan of the entity has or has not
taken the vulnerabilities described in
paragraph (2) into account.
(D) A description about how the projects
described in paragraph (1) could conform with
the hazard mitigation plans of the entity and
local governments.
(E) A proposal of the systematic and regional
approach to achieve resilience in a vulnerable
area, including impacts to river basins, river
corridors, watersheds, estuaries, bays, coastal
regions, micro-basins, micro-watersheds,
ecosystems, and areas at risk of earthquakes,
tsunamis, droughts, and wildfires, including
the wildland-urban interface.
(2) Technical assistance.--The Administrator shall
provide technical assistance to eligible entities for
applications under this section.
(c) Entity Loan Fund.--
(1) Establishment of fund.--An entity that receives a
capitalization grant under this section shall establish
an entity loan fund that complies with the requirements
of this subsection.
(2) Fund management.--Except as provided in paragraph
(3), an entity loan fund shall be administered by the
agency responsible for emergency management for such
entity and shall include only--
(A) funds provided by a capitalization grant
under this section;
(B) repayments of loans under this section to
the entity loan fund; and
(C) interest earned on amounts in the entity
loan fund.
(3) Administration.--A participating entity may
combine the financial administration of the entity loan
fund of such entity with the financial administration
of any other revolving fund established by such entity
if the Administrator determines that--
(A) the capitalization grant, entity share,
repayments of loans, and interest earned on
amounts in the entity loan fund are accounted
for separately from other amounts in the
revolving fund; and
(B) the authority to establish assistance
priorities and carry out oversight activities
remains in the control of the agency
responsible for emergency management for the
entity.
(4) Entity share of funds.--On or before the date on
which a participating entity receives a capitalization
grant under this section, the entity shall deposit into
the entity loan fund of such entity, an amount equal to
not less than 10 percent of the amount of the
capitalization grant.
(d) Apportionment.--
(1) In general.--Except as otherwise provided by this
subsection, the Administrator shall apportion funds
made available to carry out this section to entities
that have entered into an agreement under subsection
(a)(2) in amounts as determined by the Administrator.
(2) Reservation of funds.--The Administrator shall
reserve not more than 2.5 percent of the amount made
available to carry out this section for--
(A) administrative costs incurred in carrying
out this section; and
(B) providing technical assistance to
participating entities under subsection (b)(2).
(3) Priority.--In the apportionment of capitalization
grants under this subsection, the Administrator shall
give priority to entity applications under subsection
(b) that--
(A) propose projects increasing resilience
and reducing risk of harm to natural and built
infrastructure;
(B) involve a partnership between 2 or more
eligible entities to carry out a project or
similar projects;
(C) take into account regional impacts of
hazards on river basins, river corridors,
micro-watersheds, macro-watersheds, estuaries,
bays, coastal regions, and areas vulnerable to
earthquake, drought, tsunamis and wildfire,
including the wildland-urban interface; or
(D) propose projects for the resilience of
major economic sectors or critical national
infrastructure, including ports, global
commodity supply chain assets (located within
an entity or within the jurisdiction of local
governments and tribal governments), capacity,
power and water production and distribution
centers, and bridges and waterways essential to
interstate commerce.
(e) Use of Funds.--
(1) Types of assistance.--Amounts deposited in an
entity loan fund, including loan repayments and
interest earned on such amounts, may be used--
(A) to make loans, on the condition that--
(i) such loans are made at an
interest rate of not more than 1.5
percent;
(ii) annual principal and interest
payments will commence not later than 1
year after completion of any project
and all loans will be fully amortized--
(I) not later than 20 years
after the date on which the
project is completed; or
(II) for projects in a low-
income geographic area, not
later than 30 years after the
date on which the projects is
completed and not longer than
the expected design life of the
project;
(iii) the local government receiving
a loan establishes a dedicated source
of revenue for repayment of the loan;
(iv) the local government receiving a
loan has a hazard mitigation plan that
has been approved by the participating
entity; and
(v) the entity loan fund will be
credited with all payments of principal
and interest on all loans;
(B) for mitigation planning, not to exceed 10
percent of the capitalization grants made to
the participating entity in a fiscal year;
(C) for the reasonable costs of administering
the fund and conducting activities under this
section, except that such amounts shall not
exceed $100,000 per year, 2 percent of the
capitalization grants made to the participating
entity in a fiscal year, or 1 percent of the
value of the entity loan fund, whichever amount
is greatest, plus the amount of any fees
collected by the entity for such purpose
regardless of the source; and
(D) to earn interest on the entity loan fund.
(2) Prohibition on determination that loan is a
duplication.--In carrying out this section,
Administrator may not determine that a loan is a
duplication of assistance or a duplication of programs.
(3) Projects and activities eligible for
assistance.--Except as provided in this subsection, a
participating entity may use funds in the entity loan
fund to provide financial assistance for projects or
activities that mitigate the impacts of hazards,
including--
(A) drought and prolonged episodes of intense
heat;
(B) severe storms, including tornados, wind
storms, cyclones, and severe winter storms;
(C) wildfires;
(D) earthquakes;
(E) flooding, including the construction,
repair, or replacement of a non-Federal levee
or other flood control structure, provided the
Administrator, in consultation with the Corps
of Engineers (if appropriate), requires an
eligible entity to determine that such levee or
structure is designed, constructed, and
maintained in accordance with sound engineering
practices and standards equivalent to the
purpose for which such levee or structure is
intended;
(F) storm surges;
(G) chemical spills that present an imminent
threat to life and property;
(H) seepage resulting from chemical spills
and flooding; and
(I) any catastrophic event that the entity
determines appropriate.
(4) Zoning and land use planning changes.--A
participating entity may use not more than 10 percent
of the entity loan fund in a fiscal year to provide
financial assistance for zoning and land use planning
changes focused on--
(A) the development and improvement of zoning
and land use codes that incentivize and
encourage low-impact development, resilient
wildland-urban interface land management and
development, natural infrastructure, green
stormwater management, conservation areas
adjacent to floodplains, implementation of
watershed or greenway master plans, and
reconnection of floodplains;
(B) the study and creation of land use
incentives that reward developers for greater
reliance on low impact development stormwater
best management practices, exchange density
increases for increased open space and
improvement of neighborhood catch basins to
mitigate urban flooding, reward developers for
including and augmenting natural infrastructure
adjacent to and around building projects
without reliance on increased sprawl, and
reward developers for addressing wildfire
ignition; and
(C) the study and creation of an erosion
response plan that accommodates river, lake,
forest, plains, and ocean shoreline retreating
or bluff stabilization due to increased
flooding and disaster impacts.
(5) Administrative and technical costs.--For each
fiscal year, a participating entity may use the amount
described in paragraph (1)(C) to--
(A) pay the reasonable costs of administering
the programs under this section, including the
cost of establishing an entity loan fund;
(B) provide technical assistance to
recipients of financial assistance from the
entity loan fund, on the condition that such
technical assistance does not exceed 5 percent
of the capitalization grant made to such
entity.
(6) Limitation for single projects.--A participating
entity may not provide an amount equal to or more than
$5,000,000 to a single hazard mitigation project.
(f) Intended Use Plans.--
(1) In general.--After providing for public comment
and review, and consultation with appropriate agencies
in an entity, Federal agencies, and interest groups,
each participating entity shall annually prepare and
submit to the Administrator a plan identifying the
intended uses of the entity loan fund.
(2) Contents of plan.--An entity intended use plan
prepared under paragraph (1) shall include--
(A) the integration of entity planning
efforts, including entity hazard mitigation
plans and other programs and initiatives
relating to mitigation of major disasters
carried out by such entity;
(B) an explanation of the mitigation and
resiliency benefits the entity intends to
achieve by--
(i) reducing future damage and loss
associated with hazards;
(ii) reducing the number of severe
repetitive loss structures and
repetitive loss structures in the
entity;
(iii) decreasing the number of
insurance claims in the entity from
injuries resulting from major disasters
or other hazards; and
(iv) increasing the rating under the
community rating system under section
1315(b) of the Housing and Urban
Development Act of 1968 (42 U.S.C.
4022(b)) for communities in the entity;
(C) information on the availability of, and
application process for, financial assistance
from the entity loan fund of such entity;
(D) the criteria and methods established for
the distribution of funds;
(E) the amount of financial assistance that
the entity anticipates apportioning;
(F) the expected terms of the assistance
provided from the entity loan fund; and
(G) a description of the financial status of
the entity loan fund, including short-term and
long-term goals for the fund.
(g) Audits, Reports, Publications, and Oversight.--
(1) Biennial entity audit and report.--Beginning not
later than the last day of the second fiscal year after
the receipt of payments under this section, and
biennially thereafter, any participating entity shall--
(A) conduct an audit of such fund established
under subsection (b); and
(B) provide to the Administrator a report
including--
(i) the result of any such audit; and
(ii) a review of the effectiveness of
the entity loan fund of the entity with
respect to meeting the goals and
intended benefits described in the
intended use plan submitted by the
entity under subsection (e).
(2) Publication.--A participating entity shall
publish and periodically update information about all
projects receiving funding from the entity loan fund of
such entity, including--
(A) the location of the project;
(B) the type and amount of assistance
provided from the entity loan fund;
(C) the expected funding schedule; and
(D) the anticipated date of completion of the
project.
(3) Oversight.--
(A) In general.--The Administrator shall, at
least every 4 years, conduct reviews and audits
as may be determined necessary or appropriate
by the Administrator to carry out the
objectives of this section and determine the
effectiveness of the fund in reducing hazard
risk.
(B) GAO requirements.--The entity shall
conduct audits under paragraph (1) in
accordance with the auditing procedures of the
Government Accountability Office, including
chapter 75 of title 31.
(C) Recommendations by administrator.--The
Administrator may at any time make
recommendations for or require specific changes
to an entity's loan fund in order to improve
the effectiveness of the fund.
(h) Regulations or Guidance.--The Administrator shall issue
such regulations or guidance as are necessary to--
(1) ensure that each participating entity uses funds
as efficiently as possible; and
(2) reduce waste, fraud, and abuse to the maximum
extent possible.
(i) Waiver Authority.--Until such time as the Administrator
issues regulations to implement this section, the Administrator
may--
(1) waive notice and comment rulemaking, if the
Administrator determines the waiver is necessary to
expeditiously implement this section; and
(2) provide capitalization grants under this section
as a pilot program.
(j) Definitions.--In this section, the following definitions
apply:
(1) Eligible entity.--The term ``eligible entity''
means a State or an Indian tribal government (as such
terms are defined in section 102 of this Act (42 U.S.C.
5122)).
(2) Hazard mitigation plan.--The term ``hazard
mitigation plan'' means a mitigation plan submitted
under section 322 and approved by the Administrator.
(3) Low-income geographic area.--The term ``low-
income geographic area'' means an area described in
paragraph (1) or (2) of section 301(a) of the Public
Works and Economic Development Act of 1965 (42 U.S.C.
3161(a)).
(4) Participating entity.--The term ``participating
entity'' means an eligible entity that has entered into
an agreement under this section.
(5) Repetitive loss structure.--The term ``repetitive
loss structure'' has the meaning given the term in
section 1370 of the National Flood Insurance Act (42
U.S.C. 4121).
(6) Severe repetitive loss structure.--The term
``severe repetitive loss structure'' has the meaning
given the term in section 1366(h) of the National Flood
Insurance Act (42 U.S.C. 4104c(h).
(7) Wildland-urban interface.--The term ``wildland-
urban interface'' has the meaning given the term in
section 101 of the Healthy Forests Restoration Act of
2003 (16 U.S.C. 6511).
(k) Authorization of Appropriations.--There is authorized to
be appropriated $100,000,000 for each of fiscal years 2020 and
2021.
* * * * * * *
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