[House Report 105-682]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-682
_______________________________________________________________________


 
                    DISASTER MITIGATION ACT OF 1998

                                _______
                                

 August 6, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3869]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 3869) to amend the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act to 
authorize programs for predisaster mitigation, to streamline 
the administration of disaster relief, to control the Federal 
costs of disaster assistance, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Disaster Mitigation Act of 1998''.

SEC. 2. AMENDMENTS TO ROBERT T. STAFFORD DISASTER RELIEF AND EMERGENCY 
                    ASSISTANCE ACT.

  Except as otherwise specifically provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision of law, the reference shall be 
considered to be made to a section or other provision of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 
et seq.).

                 TITLE I--PREDISASTER HAZARD MITIGATION

SEC. 101. FINDINGS AND PURPOSE.

  (a) Findings.--Congress finds that--
          (1) greater emphasis needs to be placed on identifying and 
        assessing the risks to State and local communities and 
        implementing adequate measures to reduce losses from natural 
        disasters and to ensure that critical facilities and public 
        infrastructure will continue to function after a disaster;
          (2) expenditures for post-disaster assistance are increasing 
        without commensurate reduction in the likelihood of future 
        losses from such natural disasters;
          (3) a high priority in the expenditure of Federal funds under 
        the Robert T. Stafford Disaster Relief and Emergency Assistance 
        Act should be to implement predisaster activities at the local 
        level; and
          (4) with a unified effort of economic incentives, awareness 
        and education, technical assistance, and demonstrated Federal 
        support, States and local communities will be able to increase 
        their capabilities to form effective community-based 
        partnerships for mitigation purposes, implement effective 
        natural disaster mitigation measures that reduce the risk of 
        future damage, hardship, and suffering, ensure continued 
        functioning of critical facilities and public infrastructure, 
        leverage additional non-Federal resources into meeting disaster 
        resistance goals, and make commitments to long-term mitigation 
        efforts in new and existing structures.
  (b) Purpose.--It is the purpose of this title to establish a 
predisaster hazard mitigation program that--
          (1) reduces the loss of life and property, human suffering, 
        economic disruption, and disaster assistance costs resulting 
        from natural hazards; and
          (2) provides a source of predisaster hazard mitigation 
        funding that will assist States and local governments in 
        implementing effective mitigation measures that are designed to 
        ensure the continued functioning of critical facilities and 
        public infrastructure after a natural disaster.

SEC. 102. STATE MITIGATION PROGRAM.

  Section 201(c) (42 U.S.C. 5131(c)) is amended--
          (1) by striking ``and'' at the end of paragraph (1);
          (2) by striking the period at the end of paragraph (2) and 
        inserting ``; and''; and
          (3) by adding at the end the following:
          ``(3) set forth, with the ongoing cooperation of local 
        governments and consistent with section 409, a comprehensive 
        and detailed State program for mitigating against emergencies 
        and major disasters, including provisions for prioritizing 
        mitigation measures.''.

SEC. 103. DISASTER ASSISTANCE PLANS.

  Section 201(d) is amended to read as follows:
  ``(d) Grants for Disaster Assistance and Hazard Identification.--The 
President is authorized to make grants for--
          ``(1) not to exceed 50 percent of the cost of improving, 
        maintaining, and updating State disaster assistance plans 
        including, consistent with section 409, evaluation of natural 
        hazards and development of the programs and actions required to 
        mitigate such hazards; and
          ``(2) the development and application of improved floodplain 
        mapping technologies that can be used by Federal, State, and 
        local governments and that the President determines will likely 
        result in substantial savings over current floodplain mapping 
        methods.''.

SEC. 104. PREDISASTER HAZARD MITIGATION.

  Title II (42 U.S.C. 5131-5132) is amended by adding at the end the 
following:

``SEC. 203. PREDISASTER HAZARD MITIGATION.

  ``(a) General Authority.--The President may establish a program to 
provide financial assistance to States and local governments for the 
purpose of undertaking predisaster hazard mitigation activities that 
are cost effective and substantially reduce the risk of future damage, 
hardship, or suffering from a major disaster.
  ``(b) Purpose of Assistance.--
          ``(1) In general.--Except as provided in paragraph (2), a 
        State or local government that receives financial assistance 
        under this section shall use the assistance for funding 
        activities that are cost effective and substantially reduce the 
        risk of future damage, hardship, or suffering from a major 
        disaster.
          ``(2) Dissemination.--The State or local government may use 
        not more than 10 percent of financial assistance it receives 
        under this section in a fiscal year for funding activities to 
        disseminate information regarding cost effective mitigation 
        technologies (such as preferred construction practices and 
        materials), including establishing and maintaining centers for 
        protection against natural disasters to carry out such 
        dissemination.
  ``(c) Allocation of Funds.--The amount of financial assistance to be 
made available to a State, including amounts made available to local 
governments of such State, under this section in a fiscal year shall--
          ``(1) not be less than the lesser of $500,000 or 1.0 percent 
        of the total funds appropriated to carry out this section for 
        such fiscal year; but
          ``(2) not exceed 15 percent of such total funds.
  ``(d) Criteria.--Subject to the limitations of subsections (c) and 
(e), in determining whether to provide assistance to a State or local 
government under this section and the amount of such assistance, the 
President shall consider the following criteria:
          ``(1) The clear identification of prioritized cost-effective 
        mitigation activities that produce meaningful and definable 
        outcomes.
          ``(2) If the State has submitted a mitigation program in 
        cooperation with local governments under section 201(c), the 
        degree to which the activities identified in paragraph (1) are 
        consistent with the State mitigation program.
          ``(3) The opportunity to fund activities that maximize net 
        benefits to society.
          ``(4) The ability of the State or local government to fund 
        mitigation activities.
          ``(5) The extent to which assistance will fund mitigation 
        activities in small impoverished communities.
          ``(6) The level of interest by the private sector to enter 
        into a partnership to promote mitigation.
          ``(7) Such other criteria as the President establishes in 
        consultation with State and local governments.
  ``(e) State Nominations.--
          ``(1) In general.--The Governor of each State may recommend 
        to the President not less than 5 local governments to receive 
        assistance under this section. The recommendations shall be 
        submitted to the President not later than January 1 of calendar 
        year 1999 and each calendar year thereafter or such later date 
        in the calendar year as the President may establish. In making 
        such recommendations, the Governors shall consider the criteria 
        identified in subsection (d).
          ``(2) Use.--
                  ``(A) General rule.--In providing assistance to local 
                governments under this section, the President shall 
                select from local governments recommended by the 
                Governors under this subsection.
                  ``(B) Waiver.--Upon request of a local government, 
                the President may waive the limitation in subparagraph 
                (A) if the President determines that extraordinary 
                circumstances justify the waiver and that granting the 
                waiver will further the purpose of this section.
          ``(3) Effect of failure to nominate.--If a Governor of a 
        State fails to submit recommendations under this subsection in 
        a timely manner, the President may select, subject to the 
        criteria in subsection (d), any local governments of the State 
        to receive assistance under this section.
  ``(f) Small Impoverished Communities.--For the purpose of this 
section, the term `small impoverished communities' means communities of 
3,000 or fewer individuals that are economically disadvantaged, as 
determined by the State in which the community is located and based on 
criteria established by the President.
  ``(g) Federal Share.--Financial assistance provided under this 
section may contribute up to 75 percent of the total cost of mitigation 
activities approved by the President; except that the President may 
contribute up to 90 percent of the total cost of mitigation activities 
in small impoverished communities.
  ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $50,000,000 for fiscal year 
1998, $70,000,000 for fiscal year 1999, and $80,000,000 for fiscal year 
2000.
  ``(i) Authorization of Section 404 Funds.--In addition to amounts 
appropriated under subsection (h), the President may use, to carry out 
this section, funds that are appropriated to carry out section 404 for 
post-disaster mitigation activities that have not been obligated within 
30 months of the disaster declaration upon which the funding 
availability is based.
  ``(j) Report on Federal and State Administration.--Not later than 18 
months after the date of enactment of the Disaster Mitigation Act of 
1998, the President, in consultation with State and local governments, 
shall transmit to Congress a report evaluating efforts to implement 
this section and recommending a process for transferring greater 
authority and responsibility for administering the assistance program 
authorized by this section to capable States.''.

SEC. 105. INTERAGENCY TASK FORCE.

  The President shall establish an interagency task force for the 
purpose of coordinating the implementation of the predisaster hazard 
mitigation program authorized by section 203 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act. The Director of the 
Federal Emergency Management Agency shall chair such task force.

SEC. 106. MAXIMUM CONTRIBUTION FOR MITIGATION COSTS.

  (a) In General.--Section 404(a) (42 U.S.C. 5170c(a)) is amended by 
striking ``15 percent'' and inserting ``20 percent''.
  (b) Applicability.--The amendment made by subsection (a) shall apply 
to major disasters declared under the Robert T. Stafford Disaster 
Relief Act and Emergency Assistance Act after January 1, 1997.

SEC. 107. CONFORMING AMENDMENT.

  The heading for title II is amended to read as follows:

     ``TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE''.

               TITLE II--STREAMLINING AND COST REDUCTION

SEC. 201. MANAGEMENT COSTS.

  (a) In General.--Title III (42 U.S.C. 5141-5164) is amended by adding 
at the end the following:

``SEC. 322. MANAGEMENT COSTS.

  ``(a) In General.--Notwithstanding any other provision of law 
(including any administrative rule or guidance), the President shall 
establish by rule management cost rates for grantees and subgrantees. 
Such rates shall be used to determine contributions under this Act for 
management costs.
  ``(b) Management Costs Defined.--Management costs include indirect 
costs, administrative expenses, associated expenses, and any other 
expenses not directly chargeable to a specific project under a major 
disaster, emergency, or emergency preparedness activity or measure. 
Such costs include the necessary costs of requesting, obtaining, and 
administering Federal assistance and costs incurred by a State for 
preparation of damage survey reports, final inspection reports, project 
applications, final audits, and related field inspections by State 
employees, including overtime pay and per diem and travel expenses of 
such employees, but not including pay for regular time of such 
employees.
  ``(c) Review.--The President shall review the management cost rates 
established under subsection (a) not later than 3 years after the date 
of establishment of such rates and periodically thereafter.''.
  (b) Applicability.--Section 322 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (as added by subsection (a) of this 
section) shall apply as follows:
          (1) Subsections (a) and (b) shall apply to major disasters 
        declared under such Act on or after the date of enactment of 
        this Act. Until the date on which the President establishes the 
        management cost rates under such subsection, section 406(f) 
        shall be used for establishing such rates.
          (2) Subsection (c) shall apply to major disasters declared 
        under such Act on or after the date on which the President 
        establishes such rates under subsection (a) of such section 
        322.

SEC. 202. ASSISTANCE TO REPAIR, RESTORE, RECONSTRUCT, OR REPLACE 
                    DAMAGED FACILITIES.

  (a) Contributions.--Section 406(a) (42 U.S.C. 5172(a)) is amended to 
read as follows:
  ``(a) Contributions.--
          ``(1) In general.--The President may make contributions--
                  ``(A) to a State or local government for the repair, 
                restoration, reconstruction, or replacement of a public 
                facility which is damaged or destroyed by a major 
                disaster and for associated expenses incurred by such 
                government; and
                  ``(B) subject to paragraph (2), to a person who owns 
                or operates a private nonprofit facility damaged or 
                destroyed by a major disaster for the repair, 
                restoration, reconstruction, or replacement of such 
                facility and for associated expenses incurred by such 
                person.
          ``(2) Conditions for assistance to private nonprofit 
        facilities.--The President may make contributions to a private 
        nonprofit facility under paragraph (1)(B) only if the owner or 
        operator of the facility--
                  ``(A) has applied for a disaster loan under section 
                7(b) of the Small Business Act (15 U.S.C. 636(b)); and
                  ``(B)(i) has been determined to be ineligible for 
                such a loan; or
                  ``(ii) has obtained such a loan in the maximum amount 
                for which the Small Business Administration determines 
                the facility is eligible.''.
  (b) Minimum Federal Share.--Section 406(b) (42 U.S.C. 5172(b)) is 
amended to read as follows:
  ``(b) Minimum Federal Share.--The Federal share of assistance under 
this section shall be not less than 75 percent of the eligible cost of 
repair, restoration, reconstruction, or replacement carried out under 
this section.''.
  (c) Large In-Lieu Contributions.--Section 406(c) (42 U.S.C. 5172(c)) 
is amended to read as follows:
  ``(c) Large In-Lieu Contributions.--
          ``(1) For public facilities.--
                  ``(A) In general.--In any case in which a State or 
                local government determines that the public welfare 
                would not be best served by repairing, restoring, 
                reconstructing, or replacing any public facility owned 
                or controlled by such State or local government, the 
                State or local government may elect to receive, in lieu 
                of a contribution under subsection (a)(1)(A), a 
                contribution of 75 percent of the Federal share of the 
                Federal estimate of the cost of repairing, restoring, 
                reconstructing, or replacing such facility and of 
                management expenses.
                  ``(B) Use of funds.--Funds contributed to a State or 
                local government under this paragraph may be used to 
                repair, restore, or expand other selected public 
                facilities, to construct new facilities, or to fund 
                hazard mitigation measures which the State or local 
                government determines to be necessary to meet a need 
                for governmental services and functions in the area 
                affected by the major disaster.
          ``(2) For private nonprofit facilities.--
                  ``(A) In general.--In any case where a person who 
                owns or operates a private nonprofit facility 
                determines that the public welfare would not be best 
                served by repairing, restoring, reconstructing, or 
                replacing such facility, such person may elect to 
                receive, in lieu of a contribution under subsection 
                (a)(1)(B), a contribution of 75 percent of the Federal 
                share of the Federal estimate of the cost of repairing, 
                restoring, reconstructing, or replacing such facility 
                and of management expenses.
                  ``(B) Use of funds.--Funds contributed to a person 
                under this paragraph may be used to repair, restore, or 
                expand other selected private nonprofit facilities 
                owned or operated by the person, to construct new 
                private nonprofit facilities to be owned or operated by 
                the person, or to fund hazard mitigation measures that 
                the person determines to be necessary to meet a need 
                for its services and functions in the area affected by 
                the major disaster.
          ``(3) Modification of federal share.--The President shall 
        modify the Federal share of the cost estimate provided in 
        paragraphs (1) and (2) if the President determines an 
        alternative cost share will likely reduce the total amount of 
        Federal assistance provided under this section. The Federal 
        cost share for purposes of paragraphs (1) and (2) shall not 
        exceed 90 percent and shall not be less than 50 percent.''.
  (d) Eligible Cost.--
          (1) In general.--Section 406(e) (42 U.S.C. 5172(e)) is 
        amended to read as follows:
  ``(e) Eligible Cost.--
          ``(1) In general.--For the purposes of this section, the 
        estimate of the cost of repairing, restoring, reconstructing, 
        or replacing a public facility or private nonprofit facility on 
        the basis of the design of such facility as it existed 
        immediately before the major disaster and in conformity with 
        current applicable codes, specifications, and standards 
        (including floodplain management and hazard mitigation criteria 
        required by the President or by the Coastal Barrier Resources 
        Act (16 U.S.C. 3501 et seq.)) shall be treated as the eligible 
        cost of such repair, restoration, reconstruction, or 
        replacement. Subject to paragraph (2), the President shall use 
        the cost estimation procedures developed under paragraph (3) to 
        make the estimate under this paragraph.
          ``(2) Modification of eligible cost.--In the event the actual 
        cost of repairing, restoring, reconstructing, or replacing a 
        facility under this section is more than 120 percent or less 
        than 80 percent of the cost estimated under paragraph (1), the 
        President may determine that the eligible cost be the actual 
        cost of such repair, restoration, reconstruction, or 
        replacement. The government or person receiving assistance 
        under this section shall reimburse the President for the 
        portion of such assistance that exceeds the eligible cost of 
        such repair, restoration, reconstruction, or replacement.
          ``(3) Expert panel.--Not later than 18 months after the date 
        of enactment of the Disaster Mitigation Act of 1998, the 
        President, acting through the Director of the Federal Emergency 
        Management Agency, shall establish an expert panel, including 
        representatives from the construction industry, to develop 
        procedures for estimating the cost of repairing, restoring, 
        reconstructing, or replacing a facility consistent with 
        industry practices.
          ``(4) Special rule.--In any case in which the facility being 
        repaired, restored, reconstructed, or replaced under this 
        section was under construction on the date of the major 
        disaster, the cost of repairing, restoring, reconstructing, or 
        replacing such facility shall include, for purposes of this 
        section, only those costs which, under the contract for such 
        construction, are the owner's responsibility and not the 
        contractor's responsibility.''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of enactment of this Act; except 
        that paragraph (1) of section 406(e) of the Robert T. Stafford 
        Disaster Relief and Emergency Assistance Act (as amended by 
        paragraph (1) of this subsection) shall take effect on the date 
        that the procedures developed under paragraph (3) of such 
        section take effect.
  (e) Associated Expenses.--
          (1) In general.--Section 406 (42 U.S.C. 4172) is amended by 
        striking subsection (f).
          (2) Other eligible costs.--Section 406(e) (42 U.S.C. 
        5172(f)), as amended by subsection (d) of this section, is 
        amended by adding at the end the following:
          ``(5) Other eligible costs.--For purposes of this section, 
        other eligible costs include the following:
                  ``(A) Costs of national guard.--The cost of 
                mobilizing and employing the National Guard for 
                performance of eligible work.
                  ``(B) Costs of prison labor.--The costs of using 
                prison labor to perform eligible work, including wages 
                actually paid, transportation to a worksite, and 
                extraordinary costs of guards, food, and lodging.
                  ``(C) Other labor costs.--Base and overtime wages for 
                an applicant's employees and extra hires performing 
                eligible work plus fringe benefits on such wages to the 
                extent that such benefits were being paid before the 
                disaster.''.
          (3) Effective date.--Paragraphs (1) and (2) shall take effect 
        on the date on which the President establishes management cost 
        rates under section 322(a) of the Robert T. Stafford Disaster 
        Relief and Emergency Assistance Act (as added by section 201(a) 
        of this Act). The amendment made by paragraph (1) shall only 
        apply to disasters declared by the President under such Act 
        after the date on which the President establishes such cost 
        rates.

SEC. 203. FEDERAL ASSISTANCE TO INDIVIDUALS AND HOUSEHOLDS.

  (a) In General.--Section 408 (42 U.S.C. 5174) is amended to read as 
follows:

``SEC. 408. FEDERAL ASSISTANCE TO INDIVIDUALS AND HOUSEHOLDS.

  ``(a) General Authority.--Subject to the requirements of this 
section, the President, in consultation with the Governor of the 
affected State, may provide financial assistance, and, if necessary, 
direct services, to disaster victims who as a direct result of a major 
disaster have necessary expenses and serious needs where such victims 
are unable to meet such expenses or needs through other means.
  ``(b) Housing Assistance.--
          ``(1) Eligibility.--The President may provide financial or 
        other assistance under this section to individuals and families 
        to respond to the disaster-related housing needs of those who 
        are displaced from their predisaster primary residences or 
        whose predisaster primary residences are rendered uninhabitable 
        as a result of damage caused by a major disaster.
          ``(2) Determination of appropriate types of assistance.--The 
        President shall determine appropriate types of housing 
        assistance to be provided to disaster victims under this 
        section based upon considerations of cost effectiveness, 
        convenience to disaster victims, and such other factors as the 
        President may consider appropriate. One or more types of 
        housing assistance may be made available, based on the 
        suitability and availability of the types of assistance, to 
        meet the needs of disaster victims in the particular disaster 
        situation.
  ``(c) Types of Housing Assistance.--
          ``(1) Temporary housing.--
                  ``(A) Financial assistance.--
                          ``(i) In general.--The President may provide 
                        financial assistance under this section to 
                        individuals or households to rent alternate 
                        housing accommodations, existing rental units, 
                        manufactured housing, recreational vehicles, or 
                        other readily fabricated dwellings.
                          ``(ii) Amount.--The amount of assistance 
                        under clause (i) shall be based on the fair 
                        market rent for the accommodation being 
                        furnished plus the cost of any transportation, 
                        utility hookups, or unit installation not being 
                        directly provided by the President.
                  ``(B) Direct assistance.--
                          ``(i) In general.--The President may also 
                        directly provide under this section housing 
                        units, acquired by purchase or lease, to 
                        individuals or households who, because of a 
                        lack of available housing resources, would be 
                        unable to make use of the assistance provided 
                        under subparagraph (A).
                          ``(ii) Period of assistance.--The President 
                        may not provide direct assistance under clause 
                        (i) with respect to a major disaster after the 
                        expiration of the 18-month period beginning on 
                        the date of the declaration of the major 
                        disaster by the President, except that the 
                        President may extend such period if the 
                        President determines that due to extraordinary 
                        circumstances an extension would be in the 
                        public interest.
                          ``(iii) Collection of rental charges.--After 
                        the expiration of the 18-month period referred 
                        to in clause (ii), the President may charge 
                        fair market rent for the accommodation being 
                        provided.
          ``(2) Repairs.--The President may provide financial 
        assistance for the repair of owner-occupied private residences, 
        utilities, and residential infrastructure (such as private 
        access routes) damaged by a major disaster to a habitable or 
        functioning condition. A recipient of assistance provided under 
        this paragraph need not show that the assistance can be met 
        through other means, except insurance proceeds, if the 
        assistance is used for emergency repairs to make a private 
        residence habitable and does not exceed $5,000 (based on fiscal 
        year 1998 constant dollars).
          ``(3) Replacement.--The President may provide financial 
        assistance for the replacement of owner-occupied private 
        residences damaged by a major disaster. Assistance provided 
        under this paragraph shall not exceed $10,000 (based on fiscal 
        year 1998 constant dollars). The President may not waive any 
        provision of Federal law requiring the purchase of flood 
        insurance as a condition for the receipt of Federal disaster 
        assistance with respect to assistance provided under this 
        paragraph.
          ``(4) Permanent housing construction.--The President may 
        provide financial assistance or direct assistance under this 
        section to individuals or households to construct permanent 
        housing in insular areas outside the continental United States 
        and other remote locations in cases in which--
                  ``(A) no alternative housing resources are available; 
                and
                  ``(B) the types of temporary housing assistance 
                described in paragraph (1) are unavailable, infeasible, 
                or not cost effective.
  ``(d) Terms and Conditions Relating to Housing Assistance.--
          ``(1) Sites.--Any readily fabricated dwelling provided under 
        this section shall, whenever possible, be located on a site 
        complete with utilities, and shall be provided by the State or 
        local government, by the owner of the site, or by the occupant 
        who was displaced by the major disaster. Readily fabricated 
        dwellings may be located on sites provided by the President if 
        the President determines that such sites would be more 
        economical or accessible.
          ``(2) Disposal of units.--
                  ``(A) Sale to occupants.--
                          ``(i) In general.--Notwithstanding any other 
                        provision of law, a temporary housing unit 
                        purchased under this section by the President 
                        for the purposes of housing disaster victims 
                        may be sold directly to the individual or 
                        household who is occupying the unit if the 
                        individual or household needs permanent 
                        housing.
                          ``(ii) Sales price.--Sales of temporary 
                        housing units under clause (i) shall be 
                        accomplished at prices that are fair and 
                        equitable.
                          ``(iii) Deposit of proceeds.--Notwithstanding 
                        any other provision of law, the proceeds of a 
                        sale under clause (i) shall be deposited into 
                        the appropriate Disaster Relief Fund account.
                          ``(iv) Use of gsa services.--The President 
                        may use the services of the General Services 
                        Administration to accomplish a sale under 
                        clause (i).
                  ``(B) Other methods of disposal.--
                          ``(i) Sale.--If not disposed of under 
                        subparagraph (A), a temporary housing unit 
                        purchased by the President for the purposes of 
                        housing disaster victims may be resold.
                          ``(ii) Disposal to governments and voluntary 
                        organizations.--A temporary housing unit 
                        described in clause (i) may also be sold, 
                        transferred, donated, or otherwise made 
                        available directly to a State or other 
                        governmental entity or to a voluntary 
                        organization for the sole purpose of providing 
                        temporary housing to disaster victims in major 
                        disasters and emergencies if, as a condition of 
                        such sale, transfer, or donation, the State, 
                        other governmental agency, or voluntary 
                        organization agrees--
                                  ``(I) to comply with the 
                                nondiscrimination provisions of section 
                                308; and
                                  ``(II) to obtain and maintain hazard 
                                and flood insurance on the housing 
                                unit.
  ``(e) Financial Assistance To Address Other Needs.--
          ``(1) Medical, dental, and funeral expenses.--The President, 
        in consultation with the Governor of the affected State, may 
        provide financial assistance under this section to an 
        individual or household adversely affected by a major disaster 
        to meet disaster-related medical, dental, and funeral expenses.
          ``(2) Personal property, transportation, and other 
        expenses.--The President, in consultation with the Governor of 
        the affected State, may provide financial assistance under this 
        section to an individual or household described in paragraph 
        (1) to address personal property, transportation, and other 
        necessary expenses or serious needs resulting from the major 
        disaster.
  ``(f) State Role.--The President shall provide for the substantial 
and ongoing involvement of the affected State in administering the 
assistance under this section.
  ``(g) Maximum Amount of Assistance.--No individual or household shall 
receive financial assistance greater than $25,000 under this section 
with respect to a single major disaster. Such limit shall be adjusted 
annually to reflect changes in the Consumer Price Index for all Urban 
Consumers published by the Department of Labor.
  ``(h) Issuance of Regulations.--The President shall issue rules and 
regulations to carry out the program, including criteria, standards, 
and procedures for determining eligibility for assistance.''.
  (b) Conforming Amendment.--Section 502(a)(6) (42 U.S.C. 5192(a)(6)) 
is amended by striking ``temporary housing''.
  (c) Elimination of Individual and Family Grant Programs.--Title IV is 
amended by striking section 411 (42 U.S.C. 5178).
  (d) Effective Date.--The amendments made by this section shall take 
effect on the 545th day following the date of enactment of this Act.

SEC. 204. REPEALS.

  (a) Community Disaster Loans.--Section 417 (42 U.S.C. 5184) is 
repealed.
  (b) Simplified Procedure.--Section 422 (42 U.S.C. 5189) is repealed.

SEC. 205. STATE ADMINISTRATION OF HAZARD MITIGATION PROGRAM.

  Section 404 (42 U.S.C. 5170c) is amended by adding at the end the 
following:
  ``(c) Program Administration by States.--
          ``(1) In general.--A State desiring to administer the hazard 
        mitigation assistance program established by this section with 
        respect to hazard mitigation assistance in the State may submit 
        to the President an application for the delegation of such 
        authority.
          ``(2) Criteria.--The President, in consultation with States 
        and local governments, shall establish criteria for the 
        approval of applications submitted under paragraph (1). The 
        criteria shall include, at a minimum, the following:
                  ``(A) The demonstrated ability of the State to manage 
                the grant program under this section.
                  ``(B) Submission of the plan required under section 
                201(c).
                  ``(C) A demonstrated commitment to mitigation 
                activities.
          ``(3) Approval.--The President shall approve an application 
        submitted under paragraph (1) that meets the criteria 
        established under paragraph (2).
          ``(4) Withdrawal of approval.--If, after approving an 
        application of a State submitted under paragraph (1), the 
        President determines that the State is not administering the 
        hazard mitigation assistance program established by this 
        section in a manner satisfactory to the President, the 
        President shall withdraw such approval.
          ``(5) Audits.--The President shall provide for periodic 
        audits of the hazard mitigation assistance programs 
        administered by States under this subsection.''.

SEC. 206. STATE ADMINISTRATION OF DAMAGED FACILITIES PROGRAM.

  (a) Pilot Program.--In cooperation with States and local governments 
and in coordination with efforts to streamline the delivery of disaster 
relief assistance, the President shall conduct a pilot program for the 
purpose of determining the desirability of State administration of 
parts of the assistance program established by section 406 of the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5172).
  (b) State Participation.--
          (1) Criteria.--The President may establish criteria in order 
        to ensure the appropriate implementation of the pilot program 
        under subsection (a).
          (2) Minimum number of states.--The President shall conduct 
        the pilot program under subsection (a) in at least 2 States.
  (c) Report.--Not later than 4 years after the date of enactment of 
this Act, the President shall transmit to Congress a report describing 
the results of the pilot program conducted under subsection (a), 
including identifying any administrative or financial benefits. Such 
report shall also include recommendations on the conditions, if any, 
under which States should be allowed the option to administer parts of 
the assistance program under section 406 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5172).

SEC. 207. STUDY REGARDING COST REDUCTION.

  Not later than 4 years after the date of enactment of this Act, the 
Comptroller General of the United States shall conduct a study to 
estimate the reduction in Federal disaster assistance that has resulted 
and is likely to result from the enactment of this Act.

SEC. 208. STUDY REGARDING INSURANCE FOR PUBLIC INFRASTRUCTURE.

  The Comptroller General of the United States shall conduct a study to 
determine the current and future expected availability of disaster 
insurance for public infrastructure eligible for assistance under 
section 406 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5170).

                        TITLE III--MISCELLANEOUS

SEC. 301. TECHNICAL CORRECTION OF SHORT TITLE.

  The first section (42 U.S.C. 5121 note) is amended to read as 
follows:

``SECTION 1. SHORT TITLE.

  ``This Act may be cited as the `Robert T. Stafford Disaster Relief 
and Emergency Assistance Act'.''.

SEC. 302. DEFINITION OF STATE.

  Section 102 (42 U.S.C. 5122) is amended in each of paragraphs (3) and 
(4) by striking ``the Northern'' and all that follows through ``Pacific 
Islands'' and inserting ``and the Commonwealth of the Northern Mariana 
Islands''.

                          Purpose and Summary

    The purpose of H.R. 3869, the ``Disaster Mitigation Act of 
1998,'' is to amend the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act to authorize programs for predisaster 
mitigation, to streamline the administration of disaster 
relief, and to control the Federal costs of disaster 
assistance. The bill authorizes a pre-disaster mitigation 
program through fiscal year 2000. The bill also streamlines and 
modifies existing disaster assistance programs.

                  Background and Need for Legislation

                              introduction

    The Disaster Mitigation Act of 1998 addresses two separate 
needs: increasing pre-disaster hazard mitigation activities and 
reducing the cost of providing post-disaster assistance. The 
bill establishes a federally funded pre-disaster hazard 
mitigation program and authorizes $200 million over three years 
for helping fund cost-effective hazard mitigation activities. 
In addition, the bill increases the authorization for post-
disaster mitigation funding by 33 percent (specifically, by 
increasing section 404's eligible funding level from 15 percent 
to 20 percent of the total amount of disaster assistance 
provided). The bill also adopts measures that will modify and 
streamline the current post-disaster assistance program with 
the intention of reducing federal disaster assistance costs 
without adversely affecting disaster victims.
    The costs of natural disasters are becoming intolerable. In 
the last five years, the nation has been fortunate to avoid a 
major hurricane or earthquake, yet in that time over 800 people 
have been killed by natural disasters. These disasters also 
inflicted over $60 billion in property losses and other damage. 
The data indicate these losses are likely to increase. For the 
ten-year period prior to 1989, total obligations from the 
Federal Emergency Management Agency's (FEMA's) Disaster Relief 
Fund were $4 billion; since 1989, FEMA has spent $21 billion. 
Prior to 1989, only one disaster event (Hurricane Agnes in 
1972) cost over $500 million in FEMA funds. Since 1989, every 
year, except 1991, has had at least one disaster event costing 
more than $500 million in FEMA Assistance. In fact, six of 
these events have occurred since 1993.

                           hazard mitigation

    There are two primary ways to reduce the cost of natural 
disasters. One is to take measures that reduce our nation's 
vulnerability to hazards, also known as hazard mitigation. 
Historically, federal, state, and local governments have 
focused on assisting the victims of disasters after the damage 
is done. As the cost of the damages and assistance have 
increased, however, governments have started to change their 
spending priorities. Between 1992 and 1996, a period of only 
four years, state spending on mitigation measures increased by 
more than four times fold to an average of $16 million per 
state. Realizing that the only way to control post-disaster 
spending is to increase pre-disaster funding, states now spend 
as much money on preparing for a disaster as they do in its 
aftermath. In contrast, the federal government still spends 
three dollars on post-disaster assistance for every dollar it 
spends on mitigation (including the maintenance of flood 
control structures such as levees and dams).
    Private insurers are also aware of the need for hazard 
mitigation. Funded through the Institute for Building and Home 
Safety, private insurers recently established the ``Showcase 
Communities'' program to demonstrate the benefits of taking 
specific, creative steps within an entire community to reduce 
the losses caused by natural disasters. States such as New York 
and Florida are implementing similar programs. FEMA also 
sponsors such a program called ``Project Impact.'' The goal of 
``Project Impact'' is to bring communities together to take 
actions that prepare for--and protect themselves against--
natural disaster in a collaborative effort. Over 50 communities 
have been designated ``Project Impact'' sites. This program is 
consistent with the provisions of this bill.
    In a hearing held by the Subcommittee on Water Resources 
and Environment on January 28, 1998, Joe Myers, the Director of 
the Florida Division of Emergency Management, described this as 
a ``defining moment'' in emergency management:
    . . .[A]s a nation we are embracing hazard mitigation. 
Hazard mitigation can only be accomplished at the local level--
at the level where people decide to bolt down their water 
heaters or tie down their roofs. It is the accumulation of such 
small measures which will add up to great reductions in costs. 
The hazard mitigation provisions of H.R. 3869 are intended to 
encourage and accelerate--not supersede or inhibit--State and 
local mitigation efforts.

                    streamlining and cost reduction

    Other than hazard mitigation, the costs of disasters can be 
reduced by making current disaster programs more efficient. The 
bill attempts to increase the efficiency of existing disaster 
assistance programs by eliminating unnecessary and complicated 
aspects of the program. This includes streamlining the 
management cost reimbursement requirements (section 201) and 
combining the housing, and individual and family assistance 
programs (section 203). In addition, the bill would condition 
infrastructure assistance offered to private-nonprofit 
organizations on their applying to the Small Business 
Administration for a disaster assistance loan (section 202). 
This requirement mimics a requirement already in place for 
individuals or families seeking federal disaster assistance.

                               conclusion

    The expectation is that the two themes of this bill--
greater emphasis on mitigation and greater program efficiency--
will reduce the costs natural disasters place on the nation. To 
help Congress determine whether the bill achieves this 
objective, the bill includes a provision (section 207) 
requiring that four years from enactment, the General 
Accounting Office estimate the cost savings resulting from 
these amendments.

      Discussion of Committee Bill and Section-By-Section Analysis

                 title i--predisaster hazard mitigation

Section 101. Findings and Purpose

    Describes findings and a purpose applicable to Title I of 
the bill.
    Subsection (a) describes four findings: (1) greater 
emphasis needs to be placed on hazard identification and hazard 
mitigation, (2) expenditures for disaster assistance are 
increasing without any reduction in the likelihood of future 
losses, (3) a high priority should be placed on the 
implementation of predisaster hazard mitigation activities, and 
(4) a unified effort of economic incentives, awareness and 
education, technical assistance, and Federal support will 
enable states and local communities to form partnerships and 
implement effective mitigation measures that will reduce the 
risk of future damage to life and property. In preparing hazard 
mitigation programs the bill's findings recognize the 
importance for states and local communities to identify those 
long-term predisaster mitigation measures (including 
construction practices and materials) in new and existing 
structures. Additionally, a unified support effort will ensure 
that critical facilities and public infrastructure are able to 
function after a disaster strikes.
    Subsection (b) describes the purpose of Title I of the 
bill. The purpose is to (1) establish a program to reduce the 
loss of life, property, and other costs of disasters and (2) 
provide a source of predisaster mitigation funding to assist 
states and local governments in implementing mitigation 
measures.

Section 102. State Mitigation Program

    Amends subsection 201(c) of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (Stafford Act) to require, 
as a condition for receiving federal grants under such section, 
that states submit to the President a comprehensive program for 
mitigating against disasters, including provisions for 
prioritizing mitigation activities. An important part of this 
program are provisions for prioritizing mitigation measures. A 
key aspect of a successful mitigation program is focusing 
resources on those activities that result in the greatest 
benefits. The state programs must include a method for 
identifying such activities.
    This reporting requirement is not intended to duplicate or 
conflict with any existing reporting requirements currently 
submitted to the President by state governments including so-
called ``409 Reports'' (reports currently required by FEMA 
under the authority of section 409 of the Stafford Act). 
Consistent with the Paperwork Reduction Act of 1986, this 
provision is intended to be implemented so that the minimum 
burden is placed on states in fulfilling this new reporting 
requirement.

Section 103. Disaster Assistance Plans

    Amends subsection 201(d) of the Stafford Act to authorize 
grants for the testing and application of floodplain mapping 
technologies that the President determines will likely result 
in substantial savings over current floodplain mapping methods. 
The Committee notes that many floodplain maps are out of date 
or of poor quality and that new technologies are available that 
can produce extremely accurate maps at much less cost than in 
the past.

Section 104. Predisaster Hazard Mitigation

    Creates a new section 203 in the Stafford Act, with the 
following subsections:
    (a) General authority.--Provides the legislative authority 
for pre-disaster mitigation grants from the President to state 
and local governments.
    (b) Purposes of assistance.--Grants are primarily intended 
to fund activities that are cost effective and substantially 
reduce the risk of future damage, hardship, or suffering from a 
major disaster. State or local governments may spend up to 10% 
of federal assistance to fund activities to disseminate 
information regarding cost-effective mitigation technologies. 
The Committee urges communities to examine technologies which 
have proven to be effective in mitigating the risks or impacts 
of actual natural disasters. This would include construction 
practices and materials such as passive design systems for 
roofs, walls and windows.
    (c) Allocation of funds.--All eligible states shall receive 
assistance. No state would receive less than the lesser of 
$500,000 or 1 percent of the total funds appropriated for these 
grants in a given fiscal year. No state would receive more than 
15 percent of total funds appropriated for these grants in a 
given fiscal year.
    (d) Criteria.--In deciding who to award grants to (and the 
amount of such grants), the President must consider five 
criteria in addition to any other criteria the President may 
establish: (1) clear identification of cost effective 
mitigation activities that produce meaningful and definable 
outcomes, (2) whether the state has submitted a mitigation 
program as required under section 201(c) as amended, (3) the 
opportunity to fund activities that maximize net benefits to 
society, (4) the ability of the state or local government to 
fund mitigation activities, (5) whether the assistance helps a 
small community, and (6) the level of interest of the private 
sector in entering into a partnership to promote mitigation. It 
is the Committee's intention that the President attempt to 
balance these factors, realizing that it may be impossible to 
satisfy them all and that no one factor be so heavily weighted 
so that it undermines the others.
    In addition, it is the Committee's expectation that the 
number of additional factors, if any, that may be established 
by the President will be small so that these factors will 
continue to be important in controlling how funds are 
allocated. The Committee encourages the President to establish 
an analytical system for ranking possible candidates by these 
criteria including appropriate weighting of the factors. As an 
example, the Environmental Protection Agency has established 
such a system for allocating grants under section 319 of the 
Clean Water Act.
    The Committee further notes that the second criterion, 
consistency with a state mitigation program submitted in 
cooperation with local governments, should include 
consideration of the cooperation exhibited between the relevant 
city and county governments. Conflict between local governments 
may indicate a problem that may need to be addressed further 
before funding is provided.
    (e) State nominations.--Every year, states may nominate 
five or more local governments to the President for predisaster 
mitigation assistance. The President must select from such 
nominations unless the President determines extraordinary 
circumstances justify selecting another site (for instance, if 
the state's nominees rank low on all or most of the criteria 
delineated in subsection (d) compared to other communities in 
the state, or if a state's nominees are on probation for 
violations in the flood insurance program). If a state does not 
submit nominations in a timely fashion, the President may 
provide assistance to any local governments in the state using 
the criteria established in subsection (d).
    (f) Small impoverished communities.--Not less than 10 
percent of the total amount of funds provided must be used to 
fund activities in communities of 3,000 or fewer individuals 
that are economically disadvantaged. Grants for such 
communities may cover up to 90 percent of the cost of 
mitigation activities. In developing a definition to implement 
this provision, the Committee suggests the President use, as a 
starting point, the definition of small impoverished 
communities established to implement the Hardship Grants 
Program for Rural Communities contained in the Omnibus and 
Appropriations Act of 1996 (P.L. 104-134) (see 62 Federal 
Register 13521, March 20, 1997, for more information).
    (g) Federal share.--The grants may cover up to 75 percent 
of the cost of mitigation proposals funded by the President.
    (h) Authorization.--There is authorized for the use of this 
section $50 million for fiscal year 1998, $70 million for 
fiscal year 1999, and $80 million for fiscal year 2000.
    (i) Authorization of section 404 funds.--In addition to 
amounts appropriated under subsection (h), funds appropriated 
under section 404 of the Stafford Act (post-disaster mitigation 
grants) that are not obligated within 30 months of the disaster 
which triggered their initial appropriation, may be used for 
the predisaster mitigation program authorized by this section.
    (j) Report on state administration.--Within a year of the 
enactment of this Act, the President shall submit a report to 
Congress (1) evaluating the implementation of this section and 
(2) recommending a process for transferring greater authority 
and responsibility for administering the predisaster mitigation 
program to capable state governments. Understanding that 
mitigation efforts must be local, the Committee intends that, 
as state capabilities improve, this program should be 
increasingly delegated to the states. In the future it may be 
desirable to modify the statutory provisions of this program to 
facilitate an expanded role for State and local governments to 
administer this program. The Committee considers the increasing 
state administration of the post-disaster mitigation program 
under section 404 as evidence that states will be capable of 
administering this program, as well.

Section 105. Interagency Task Force

    Directs the President to establish an interagency task 
force, chaired by FEMA, for the purpose of coordinating the 
implementation of the predisaster mitigation program. The 
Committee notes the possibility of overlap of this program with 
other programs implemented by other agencies. The task force 
should ensure this program and the other programs are 
complementary and integrated.

Section 106. Maximum Contribution for Mitigation Costs

    Increases the authorization for post-disaster mitigation 
funding from 15 percent of the estimated aggregate amount of 
assistance provided under the Stafford Act for a Major Disaster 
to 20 percent of the amount of such assistance.

Section 107. Conforming Amendment

    Adds the term ``Mitigation'' to title II of the Stafford 
Act.

               title ii--streamlining and cost reduction

Section 201. Management Costs

    Adds a new section 322 to the Stafford Act. Provides that a 
certain percentage, or rate, of management costs will be 
reimbursed. The percentages will be established by regulation. 
Management costs include any indirect, administrative, or 
associated costs or expenses currently reimbursed by FEMA 
except for National Guard, prison labor, and other labor costs 
which will be treated as eligible costs. The current 
reimbursement system will remain in effect for disasters 
declared before such rates are established. The rates would be 
reviewed by the President periodically.

Section 202. Assistance to Repair, Restore, Reconstruct, or Replace 
        Damaged Facilities

    Amends and reorganizes section 406 of the Stafford Act as 
follows:
    (a) Contributions.--Requires private nonprofit 
organizations which are eligible for Stafford Act permanent 
restorative assistance to apply for Small Business 
Administration (SBA) disaster loans before they can receive 
grant assistance from FEMA. It is the Committee's understanding 
that SBA is already well prepared to implement this provision 
and examine such applications without undue delay.
    (b) Minimum federal share.--Amends subsection 406(b) to 
comport with the amendment made by section 201 above.
    (c) Large in-lieu contributions.--Rewrites section 406(c) 
to reduce from 90 percent to 75 percent (of the otherwise 
eligible amount) the contribution of the federal share 
(henceforth ``contribution level'') available to public and 
private nonprofit entities which choose to carry out alternate 
projects following major disasters. The President is required 
to modify the 75 percent contribution level if the President 
determines another contribution level will reduce the total 
amount of federal assistance under this section. However, the 
federal share may not be set below 50 percent or higher than 90 
percent.
    The Committee intends that the level set by the President 
be generally applicable, it is not intended to be adjusted on a 
case by case basis. Further, an alternative level set by the 
President must be supported by adequate data. The Committee 
notes that the relationship between the contribution level and 
the expected federal cost is currently unknown. For purposes of 
illustration, the figure below indicates three of the many 
possible relationships between these parameters. The first 
hypothetical relationship (the curve marked ``1'') would 
indicate the President should select a contribution level at or 
slightly below the new 75 percent level. The relationship 
marked ``2'' would lead to a contribution level of 50 percent. 
The relationship marked ``3'' would result in a contribution 
level of 90 percent. It is expected that if the President 
receives data and other information of sufficient quality to 
determine that an alternative contribution level will reduce 
federal costs, the President shall adopt such a contribution 
level. The Committee does not intend that the contribution 
level be altered frequently, but that such changes be made 
after careful consideration and based on solid data.





    (d) Eligible cost.--Amends subsection 406(e) to allow the 
eligible cost of repair, restoration, reconstruction, or 
replacement to be based on a cost estimate rather than actual 
cost incurred. However, if the estimate differs from the actual 
cost by more than 20 percent the President may use the actual 
cost as the eligible cost. The Committee expects that estimates 
that exceed actual costs by more than 20 percent will result in 
the reimbursement of the difference to the federal government 
while estimates that underestimate actual costs by more than 20 
percent will result in additional assistance to the victim of 
the disaster. This section also establishes a panel of experts 
to develop a cost estimating procedure.
    (e) Associated expenses.--Eliminates subsection 406(f), 
relating to associated expenses, to comport with the amendment 
made by section 201 of the bill. Subsections (3), (4), and (5) 
of 406(f) are moved into section 406(e). This should result in 
no change in the level of reimbursement for National Guard, 
prison labor, and other labor that States receive under current 
law.

Section 203. Federal Assistance to Individuals and Households

    Amends section 408 of the Stafford Act to combine the 
Housing and Individual and Family Grant (IFG) Programs. Sets 
the federal cost share for both programs at 100%, requires 
applicants to show that assistance is not available by other 
means (e.g., from insurance proceeds or from the Small Business 
Administration) before seeking assistance and caps total 
assistance for the combined program at $25,000. The section 
allows the President to assist individuals by replacing their 
homes under certain conditions. Also, victims seeking 
assistance for minimal emergency home repair need only show 
that the damage is not covered by insurance in order to be 
eligible for assistance for such repairs not exceeding $5,000.
    New subsection 408(e) authorizes grants for medical, 
dental, funeral, and other expenses that are disaster related. 
In particular, paragraph (2) of this subsection provides 
authority for the President to provide financial assistance to 
individuals or households for meeting serious needs resulting 
from a major disaster. Serious needs are requirements for an 
item or service essential to prevent, mitigate, or overcome a 
disaster-related hardship or injury. Such needs typically 
include clothing, shelter, and transportation.
    New subsection 408(f) requires the President to provide for 
substantial and continuing involvement of the State in 
administering this program. Administrative and other indirect 
costs incurred by the State in implementing this section shall 
be reimbursable under the rates established in section 322 of 
the Stafford Act as amended by section 201 of this bill.

Section 204. Repeals

    Repeals section 417 of the Stafford Act (providing for 
Community Disaster Loans). Also repeals section 422 (Simplified 
Procedure) in order to conform with the amendment made under 
section 202(d) of the bill.

Section 205. State Administration of Hazard Mitigation Program

    Requires the President to establish a process for offering 
states the option of administering the Hazard Mitigation Grant 
Program (section 404) program. The President shall set the 
criteria for such a program and perform periodic audits in 
those cases where the program is administered by a state.

Section 206. State Administration of Damaged Facilities Program

    Requires the President to conduct in at least 2 states a 
pilot program allowing states to administer parts of the Public 
Assistance (section 406) program. This could include, but is 
not limited to, the state independently validating estimates, 
verifying applicants' eligibility, and/or providing technical 
assistance. The President must report on the results including 
any streamlining or cost savings that resulted from the 
program. This program is not intended to conflict with FEMA's 
current efforts to streamline the public assistance program, 
but is intended to be coordinated with such efforts.

Section 207. Study Regarding Cost Reduction

    Directs the General Accounting Office (GAO) to estimate the 
reduction in federal disaster assistance that results from the 
enactment of this Act.

Section 208. Study Regarding Insurance for Public Infrastructure

    Directs GAO to determine the current and future 
availability of insurance for public infrastructure.

                        TITLE III--MISCELLANEOUS

Section 301. Technical Correction of Short Title

    Deletes the extra ``The'' from the title of the Act.

Section 302. Definition of State

    Updates the definition of ``state'' in the Stafford Act to 
comport with current law.

                                Hearings

    The Subcommittee on Water Resources and Environment held 
hearings on the two issue areas addressed by the bill: hazard 
mitigation and the federal costs of disasters. On January 28, 
1998, the Subcommittee held a hearing on hazard mitigation. 
Witnesses included representatives from FEMA, the National 
Emergency Management Association, Los Angeles County, and 
American Rivers. The witnesses provided testimony on importance 
of focusing more resources on pre-disaster mitigation.
    On March 26, 1998, the Subcommittee held a hearing on the 
federal cost of disaster assistance. Witnesses included 
representatives from FEMA, the General Accounting Office, the 
National Emergency Management Association, the Association of 
State Floodplain Managers, the National League of Cities, and 
others. The witnesses generally noted the increasing costs of 
disasters and offered methods for reducing such costs.
    On March 30, 1998, a draft bill addressing these two issues 
was released for public comment. A revised draft bill 
reflecting comments received by the Subcommittee was released 
on May 1, 1998. The Subcommittee held a legislative hearing on 
the draft bill on May 7, 1998. Witnesses included FEMA, the 
National Emergency Management Association, the Association of 
State Floodplain Managers, the National League of Cities, and 
the International Association of Emergency Managers.
    The draft language was further amended and introduced as 
H.R. 3869 on May 14, 1998 by Representative Sherwood Boehlert 
and Representative Robert Borski. The bill was referred solely 
to the Committee on Transportation and Infrastructure.

                        Committee Consideration

    On May 20, 1998 the Subcommittee on Water Resources and 
Environment adopted an en bloc amendment offered by 
Representative Sherwood Boehlert and Representative Robert 
Borski and favorably reported the amended bill by a unanimous 
voice vote. The amendment made technical and clarifying 
changes; increased the authorization for appropriations under 
section 404 of the Stafford Act by 33 percent; increased the 
authorization of appropriations for a pre-disaster mitigation 
program by $30 million (to a total of $180 million over three 
years); and reduced the possible floor for allocations to 
states from 2.5 percent to 1 percent of the total amount 
allocated.
    On June 25, 1998, the Committee adopted an en bloc 
amendment offered by Representative Sherwood Boehlert and 
ordered the bill, as amended, reported by a unanimous voice 
vote. The amendment made technical changes and increased the 
authorization for pre-disaster mitigation by $20 million (to a 
total of $200 million); clarified section 201 establishing 
management cost rates and extends the application of such rates 
to all Stafford Act assistance programs; allowed, in 
extraordinary circumstances, the President to provide 
mitigation assistance to a local government not nominated by a 
state; established an interagency task force on pre-disaster 
mitigation chaired by FEMA; limited the authorization for 
grants to develop cost-saving hazard identification methods to 
floodplain mapping technologies; and changed various conditions 
for victims receiving assistance under section 408.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI 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 roll call 
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 ordering H.R. 3869 reported. A motion by Mr. Boehlert to 
order H.R. 3869, as amended, reported to the House, was 
unanimously agreed to by voice vote, a quorum being present.

                          Cost of Legislation

    Clause 7 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.

                     Compliance with House Rule XI

    1. Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, oversight findings and 
recommendations have been made by the Committee as reflected in 
this report.
    2. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included below.
    3. With respect to the requirement of clause (2)(l)(3)(C) 
of rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 3869.
    4. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
3869 from the Director of the Congressional Budget Office 
(CBO).
    The Committee notes that the CBO estimate explicitly omits 
significant benefits of the legislation because CBO was unable 
to quantify these benefits. For instance:
    CBO did not quantify the benefits of mitigation activities 
(which CBO notes ``could lead to substantial savings'') because 
``we cannot predict either the frequency or incidence of major 
natural disasters.'' The Committee believes these benefits will 
be significant. On May 7, 1998 the Federal Emergency Management 
Agency testified that mitigation measures return $3 for every 
$1 spent. Further, the bill requires all mitigation activities 
be cost-effective.
    CBO was unable to quantify administrative cost reductions 
resulting from combining the Housing, and Individual and Family 
grant programs under section 203 of the bill. CBO states this 
provision is ``likely to result in some savings'' but ``CBO has 
no basis for estimating the likely amount of such savings.'' 
The Committee believes the savings may be significant. FEMA 
recently estimated the savings of a similar provision at $700 
million over 5 years.
    Had CBO been able to quantify these benefits, the Committee 
believes the quantified estimate would reflect a substantial 
net savings to the Federal Government.

                                      U.S. Congress
                                Congressinal Budget Office,
                                    Washington, DC, August 5, 1998.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure,
U.S. House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3869, the Disaster 
Mitigation Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kristen 
Layman (for federal costs), and Lisa Cash Driskill (for the 
state and local impact).
            Sincerely,
                                         June E. O'Neill, Director.

                   Constitutional Authority Statement

    Pursuant to clause (2)(l)(4) of rule XI of the Rules of the 
House of Representatives, committee reports on a bill or joint 
resolution of a public character shall include a statement 
citing the specific powers granted to the Congress in the 
Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       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.

                Applicability to the 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.

               Congressional Budget Office Cost Estimate

H.R. 3869--Disaster Mitigation Act of 1998

    Summary.--H.R. 3869 would amend the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act to authorize a 
predisaster mitigation program and make changes to the existing 
disaster relief program.
    H.R. 3869 would emphasize predisaster mitigation in order 
to reduce the long-run costs of disasters. If the authorized 
funding for mitigation efforts is provided and used 
judiciously, enactment of this bill could lead to substantial 
savings to the federal government by reducing the need for 
future disaster relief funds. CBO cannot estimate the magnitude 
of such savings because we cannot predict either the frequency 
or incidence of major natural disasters.
    The bill would authorize the appropriation of $200 million 
over fiscal years 1998 through 2000 for a predisaster 
mitigation program. In addition to these specified 
authorizations, other provisions in H.R. 3869 would result in 
changes in discretionary spending, assuming appropriation of 
the necessary amounts. In total, CBO estimates that 
implementing H.R. 3869 would require net new appropriations of 
$600 million over the 1999-2003 period ($200 million from the 
amounts specified in the bill and $400 million from other 
provisions). That spending may be offset by savings in regular 
and emergency appropriations for disaster relief, but CBO 
cannot estimate the timing or precise amounts of the potential 
savings. Over the next 10 years, such savings could exceed the 
$200 million that the bill would authorize for predisaster 
mitigation efforts.
    H.R. 3869 also would affect direct spending by speeding up 
the disbursement of some existing disaster relief funds; 
therefore, pay-as-you-go procedures would apply. CBO estimates 
that outlays from such funds would be $230 million higher in 
1999 than they would be under current law, but that there would 
be no net change in direct spending from this provision over 
the 1999-2003 period. The bill also would affect direct 
spending by raising offsetting receipts by an estimated $3 
million each year; but that increase would be matched by 
increased spending because the Federal Emergency Management 
Agency (FEMA) would be allowed to spend, without appropriation 
action, any offsetting receipts.
    H.R. 3869 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would significantly benefit the budgets of state, local, 
and tribal governments.
    Description of the bill's major provisions.--Title I would 
establish a program to provide financial assistance to state 
and local governments for predisaster mitigation activities. It 
also would require the President to transmit a report to the 
Congress that would evaluate efforts to implement the 
predisaster hazard mitigation programs and recommend a process 
for transferring greater authority over the program to states.
    Title I also would remove a yearly cap of $50,000 per state 
on the grants that the President makes for improving and 
maintaining disaster assistance plans and would increase the 
maximum federal contribution for mitigation cots from 15 
percent to 20 percent.
    Title II would combine any expenses not chargeable to a 
specific project into a single category called management 
costs. It would direct the President to establish standard 
rates for reimbursing states for such costs.
    Title II also would add new restrictions to the funds that 
a private nonprofit facility (PNP) could receive for repair and 
replacement of damaged facilities. In order to receive monies 
from the disaster relief fund, a PNP would have to be 
ineligible for a loan from the Small Business Administration 
(SBA), or have obtained the maximum possible loan amount from 
the SBA.
    In addition, the bill would reduce the federal government's 
share of costs for repairing damaged facilities from 90 percent 
to 75 percent, but would allow the President the flexibility to 
vary the contribution between 50 percent and 90 percent if it 
is more cost-effective to do so. Title II would also allow the 
President to use the estimated cost of repairing or replacing a 
facility, rather than the actual cost, to determine the level 
of assistance to provide. H.R. 3869 would establish an expert 
panel to develop procedures for estimating the cost of 
repairing a facility.
    Finally, the bill would combine the Temporary Housing 
Assistance (THA) and Individual and Family Grant (IFG) programs 
into one program, and would eliminate the community disaster 
loan program, a program that assists any local government that 
has suffered a substantial loss of tax revenues as a result of 
a major disaster.
    Estimated cost to the Federal Government.--CBO estimates 
that implementing H.R. 3869 would result in additional 
discretionary outlays of $600 million over the 1999-2003 
period. These costs are likely to be at least partially offset 
by future savings resulting from predisaster mitigation 
efforts, but CBO cannot estimate the magnitude or timing of 
such savings. H.R. 3869 would speed up spending of certain 
existing funds and would thus affect direct spending. However, 
we estimate no net change over the 1999-2003 period from that 
timing shift. H.R. 3869 would also increase offsetting receipts 
and direct spending of such receipts by approximately $3 
million each year from 1999 through 2003.
    The estimated budgetary impact of certain provisions in 
H.R. 3869 is shown in the following table. The table does not 
reflect some potential savings and costs from provisions that 
may affect discretionary spending but for which CBO cannot 
estimate the likely effects. In particular, we cannot estimate 
the potential savings in the costs of future disaster relief 
from the increased spending on predisaster mitigation 
activities that would be authorized by H.R. 3869. The costs of 
this legislation fall within budget function 450 (community and 
regional development).
    Basis of estimate.--For the purposes of this estimate, CBO 
assumes that H.R. 3869 will be enacted by the end of fiscal 
year 1998, and that the amounts authorized and estimated to be 
necessary will be appropriated near the start of each fiscal 
year.

----------------------------------------------------------------------------------------------------------------
                                                                By Fiscal Year, in Millions of Dollars          
                                                     -----------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending for Disaster Relief Under Current Law:                                                                 
    Budget Authority/Authorization Level \1\........     1,920       327       335       344       352       361
    Estimated Outlays...............................     2,000     2,580     2,060     1,741     1,211       844
Proposed Changes:                                                                                               
    Specified Authorizations for Predisaster                                                                    
     Mitigation:                                                                                                
        Authorization Level.........................         0        50        70        80         0         0
        Estimated Outlays...........................         0        25        55        73        39         8
    Estimated Authorizations                                                                                    
        Authorization Level.........................         0       200        50        50        50        50
        Estimated Outlays...........................         0       200        50        50        50        50
Spending for Disaster Relief Under H.R. 3869                                                                    
    Estimated Authorization Level...................     1,920       577       455       474       402       411
    Estimated Outlays...............................     2,000     2,805     2,165     1,864     1,300       902
                                                                                                                
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Estimated Budget Authority..........................         0         0         0         0         0         0
Estimated Outlays...................................         0       230         0      -138       -92         0
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year, including $1.6 billion for an emergency            
  supplemental appropriation provided in Public Law 105-74. The remainder of the 1998 level is the regular      
  appropriation of $320 million. The levels shown for 1999 through 2003 are CBO baseline projections assuming   
  increases for anticipated inflation. Alternatively, if the comparison were made to a baseline without         
  discretionary inflation, the current law authorization level would be $320 million each year, but the         
  incremental cost of the bill would be the same.                                                               

    Spending subject to appropriation.--H.R. 3869 contains 
provisions that would result in both costs and savings to the 
federal government. CBO estimates costs associated with 
provisions that would: authorize appropriations for predisaster 
mitigation, increase the federal contribution for mitigation 
costs, combine the Individual Family Grant program and the 
Temporary Housing Assistance program, and remove a cap on 
grants for disaster assistance plans.
    CBO estimates savings associated with provisions that 
would: require PNPs to apply to the SBA for disaster loans, 
allow the President to use the estimated cost of repairs rather 
than the actual cost, and eliminate the community disaster loan 
program.
    CBO cannot estimate the discretionary effects of provisions 
that would: achieve long-run savings associated with the 
predisaster mitigation efforts, encourage provision of 
financial assistance rather than provision of housing units, 
establish standardized rates for reimbursement of management 
costs, provide grants for improved floodplain mapping 
technologies, and establish a pilot program to determine the 
desirability of state administration of parts of the disaster 
relief program.
    Provisions with estimated costs.--Under current law, 15 
percent of the estimated amount of grants made with respect to 
a major disaster would be provided to the state for post-
disaster mitigation activities. H.R. 3869 would increase this 
percentage to 20 percent for all major disasters declared after 
January 1, 1997. FEMA spent $344 million for post-disaster 
mitigation from January 1, 1997, to June 30, 1998. If the 
contribution were raised by one-third, the federal government 
would make an additional $115 million in grants for its share 
of mitigation activities during this period. To assess future 
costs, CBO based its projection on the average annual amount of 
such expenses over the last five calendar years--$313 million. 
Using that five-year average, the rate increase from 15 percent 
to 20 percent would require increased funding for the federal 
contribution of $104 million a year over the next several 
years. In total, CBO estimates that implementing this provision 
would require the appropriation of $670 million over the 1999-
2003 period: $150 million for the 1997-1998 period and $520 
million for the 1999-2003 period. This estimate assumes that 
the funds to pay for the provision would come from future 
appropriations.
    CBO estimates that combining the Individual Family Grant 
program and the Temporary Housing Assistance program would 
result in additional costs of approximately $40 million per 
year from 1999 through 2003. Under current law, the federal 
share for the IFG program is 75 percent of the actual cost 
incurred. Combining the IFG and THA programs would change the 
federal match to 100 percent.
    CBO estimates that the costs associated with removing the 
yearly cap of $50,000 per state on the grants that are made to 
states for improvement of disaster assistance plans would be 
about $1 million per year. FEMA currently provides the maximum 
$50,000 grant to each state for disaster assistance planning. 
Under H.R. 3869, FEMA would no longer be bound by the cap and 
might increase spending on state disaster assistance programs, 
although such spending is subject to appropriation. Additional 
spending on state disaster assistance plans could result in 
future savings if improving these disaster plans reduces FEMA's 
long-run costs.
    Provisions with estimated savings.--CBO estimates that 
requiring the PNPs to apply to the SBA for a disaster loan 
before receiving funds from the disaster relief fund would 
yield savings of approximately $12 million per year from 1999 
through 2003. The savings would result because the government 
would, in some cases, be providing loans instead of grants to 
these institutions. An average of 671 PNPs apply for assistance 
from FEMA each year. If H.R. 3869 were enacted, these PNPs 
would first apply to the SBA for a disaster loan. According to 
SBA, the average business loan approval rate is 52 percent and 
the average loan amount is $44,700 for small businesses and 
homes. These averages may be slightly different for PNPs if the 
characteristics of the average PNP differ from those of the 
average small business or homeowner. CBO used these data and 
assumed a subsidy rate of 22 percent for new SBA loans to 
arrive at the estimated net savings of this provision.
    CBO estimates that allowing the President to use the 
estimated cost of repairing a facility, rather than the actual 
cost, to determine the level of assistance to provide would 
result in savings of approximately $56 million per year. 
According to FEMA, reliance on the estimated cost rather than 
the actual cost of repair would reduce the administrative 
burden on the agency. H.R. 3869 would also establish an expert 
panel, including representatives from the construction 
industry, to develop procedures for estimating the cost of 
repairing a facility. If the actual costs of repair are greater 
than 120 percent or less than 80 percent of the estimated 
costs, FEMA could receive compensation for overpayments or 
provide compensation for underpayments. Savings from this 
provision may be partially offset by the additional costs of 
establishing an expert panel, estimating the cost of repairs 
with more precision, and evaluating the accuracy of estimates. 
CBO estimates that this provision would result in an overall 25 
percent reduction in administrative costs after accounting for 
additional costs described above.
    Based on data provided by FEMA, CBO estimates that 
eliminating the community disaster loan program would result in 
savings of approximately $23 million each year from 1999 
through 2003.
    Provisions with effects CBO cannot estimate.--The potential 
budgetary effects of various provisions of H.R. 3869 are 
uncertain because they depend upon the extent and nature of 
future disasters, the manner in which the Administration would 
implement certain provisions, and the extent to which states 
would participate in certain programs.
    CBO cannot estimate the potential savings associated with 
the predisaster mitigation efforts proposed in this bill. 
Mitigation efforts could achieve substantial savings if damages 
from future disasters are lessened as a result of the 
predisaster mitigation measures provided for in the bill. In 
addition, H.R. 3869 would encourage the provision of financial 
assistance to disaster victims for rental of alternative 
housing accommodations rather than directly providing housing 
units. CBO expects that this provision would result in savings, 
but we cannot estimate the amount of the savings. Finally, H.R. 
3869 also would establish standardized reimbursement rates that 
would reduce the administrative burden of compensating states 
for indirect costs not chargeable to a specific project. This 
provision is also likely to result in some savings in FEMA's 
administrative costs, but CBO has no basis for estimating the 
likely amount of such savings.
    In addition, H.R. 3869 would authorize grants for improved 
floodplain mapping technologies and would establish a pilot 
program for the devolution of certain responsibilities to the 
states. At this time, CBO cannot estimate the costs associated 
with these provisions, or any potential savings that might 
later accrue from implementing them.
    Direct spending.--Enacting H.R. 3869 would affect direct 
spending by speeding up the disbursement of funds that have 
already been appropriated for post-disaster mitigation under 
section 404 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act. The bill would allow the President to 
use such funds for the predisaster mitigation program if the 
funds are not obligated within 30 months after the declaration 
of the disaster for which they were provided. Based on 
information from FEMA, CBO estimates that currently 
approximately $460 million would be eligible for use by the 
predisaster mitigation program under this provision. Under H.R. 
3869, CBO expects that those funds would be spent between 1999 
and 2001, instead of between 2000 and 2002, as under current 
law. Outlays would increase by $230 million in 1999 and drop by 
an equal amount over fiscal years 2001 and 2002. The net direct 
spending effect of this provision would be zero over the 1999-
2003 period. More funds, in addition to the estimated $460 
million, could become available in the future for shifts to 
predisaster mitigation activity, but we cannot estimate the 
likely amount. Finally, this provision could lead to an 
increase in future appropriations to replenish the disaster 
relief fund's resources for post-disaster mitigation, but the 
magnitude and timing of any such effect is uncertain.
    The bill would expand FEMA's authority to sell temporary 
housing. Under the Balanced Budget Act of 1997, proceeds from 
nonroutine asset sales may be counted as a reduction in direct 
spending for pay-as-you-go purposes only if such sales would 
entail no net financial cost to the government. CBO estimates 
that the sale of temporary housing under H.R. 3869 would not 
result in a net cost to the government. Based on data provided 
by FEMA detailing the sale of manufactured homes and trailers, 
CBO estimates that this provision would result in increased 
offsetting receipts of approximately $3 million each year. 
Because the agency could then spend the new receipts, without 
appropriation action, this provision would have no net effect 
on direct spending.
    The provision relating to sales of temporary housing would 
direct the President to deposit all receipts from such sales 
into the disaster relief fund, where they could be spent 
without further appropriation. Under current law, any receipts 
obtained are deposited into the general fund of the Treasury 
(and thus are not available for spending). This change would 
result in increased direct spending related to sales that would 
occur under current law. But based on information from FEMA, 
CBO estimates that any such effect would be insignificant 
because receipts from sales under existing authority are 
expected to be negligible.
    Pay-as-you-go considerations.--The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in the following table. (Enacting the bill would not 
affect governmental receipts.) For the purposes of enforcing 
pay-as-you-go procedures, only the effects in the current year, 
the budget year, and the succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By Fiscal Year, in Millions of Dollars                         
                                                               -----------------------------------------------------------------------------------------
                                                                 1998    1999    2000     2001     2002    2003    2004    2005    2006    2007    2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays............................................       0     230       0      -138     -92       0       0       0       0       0       0
Changes in receipts...........................................                                                                                          
                                                                     Not applicable                                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments.--
H.R. 3869 contains no intergovernmental mandates as defined in 
UMRA and would significantly benefit the budgets of state, 
local, and tribal governments. The bill would authorize $200 
million over the next three years to assist in predisaster 
mitigation projects, and the percentage of funds available for 
post-disaster mitigation activities would be increased. The 25 
percent state matching requirements for individual and family 
grants and certain housing assistance would no longer be 
required, reducing the burden on states by an estimated $40 
million per year.
    Estimated impact on the private sector.--The bill would 
impose no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Kristen Layman, Impact 
on State, Local, and Tribal Governments: Lisa Cash Driskill.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 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 (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

  THE ROBERT T. STAFFORD DISASTER RELIEF AND EMERGENCY ASSISTANCE ACT

    AN ACT Entitled the ``Disaster Relief Act Amendments of 1974''.

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, [That this 
Act may be cited as the ``The Robert T. Stafford Disaster 
Relief and Emergency Assistance Act''.]

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Robert T. Stafford Disaster 
Relief and Emergency Assistance Act''.

TITLE I--FINDINGS, DECLARATIONS, AND DEFINITIONS

           *       *       *       *       *       *       *


                              definitions

  Sec. 102. As used in this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (3) ``United States'' means the fifty States, the 
        District of Columbia, Puerto Rico, the Virgin Islands, 
        Guam, American Samoa, [the Northern Mariana Islands, 
        and the Trust Territory of the Pacific Islands] and the 
        Commonwealth of the Northern Mariana Islands.
          (4) ``State'' means any State of the United States, 
        the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, [the Northern Mariana 
        Islands, and the Trust Territory of the Pacific 
        Islands] and the Commonwealth of the Northern Mariana 
        Islands.

           *       *       *       *       *       *       *


              [TITLE II--DISASTER PREPAREDNESS ASSISTANCE]

       TITLE II--DISASTER PREPAREDNESS AND MITIGATION ASSISTANCE

            federal and state disaster preparedness programs

  Sec. 201. (a) * * *

           *       *       *       *       *       *       *

  (c) Upon application by a State, the President is authorized 
to make grants, not to exceed in the aggregate to such State 
$250,000, for the development of plans, programs, and 
capabilities for disaster preparedness and prevention. Such 
grants shall be applied for within one year from the date of 
enactment of this Act. Any State desiring financial assistance 
under this section shall designate or create an agency to plan 
and administer such a disaster preparedness program, and shall, 
through such agency, submit a State plan to the President, 
which shall--
          (1) set forth a comprehensive and detailed State 
        program for preparation against and assistance 
        following, emergencies and major disasters, including 
        provisions for assistance to individuals, businesses, 
        and local governments; [and]
          (2) include provisions for appointment and training 
        of appropriate staffs, formulation of necessary 
        regulations and procedures and conduct of required 
        exercises[.]; and
          (3) set forth, with the ongoing cooperation of local 
        governments and consistent with section 409, a 
        comprehensive and detailed State program for mitigating 
        against emergencies and major disasters, including 
        provisions for prioritizing mitigation measures.
  [(d) The President is authorized to make grants not to exceed 
50 per centum of the cost of improving, maintaining and 
updating State disaster assistance plans, including evaluations 
of natural hazards and development of the programs and actions 
required to mitigate such hazards, except that no such grant 
shall exceed $50,000 per annum to any State.]
  (d) Grants for Disaster Assistance and Hazard 
Identification.--The President is authorized to make grants 
for--
          (1) not to exceed 50 percent of the cost of 
        improving, maintaining, and updating State disaster 
        assistance plans including, consistent with section 
        409, evaluation of natural hazards and development of 
        the programs and actions required to mitigate such 
        hazards; and
          (2) the development and application of improved 
        floodplain mapping technologies that can be used by 
        Federal, State, and local governments and that the 
        President determines will likely result in substantial 
        savings over current floodplain mapping methods.

           *       *       *       *       *       *       *


SEC. 203. PREDISASTER HAZARD MITIGATION.

  (a) General Authority.--The President may establish a program 
to provide financial assistance to States and local governments 
for the purpose of undertaking predisaster hazard mitigation 
activities that are cost effective and substantially reduce the 
risk of future damage, hardship, or suffering from a major 
disaster.
  (b) Purpose of Assistance.--
          (1) In general.--Except as provided in paragraph (2), 
        a State or local government that receives financial 
        assistance under this section shall use the assistance 
        for funding activities that are cost effective and 
        substantially reduce the risk of future damage, 
        hardship, or suffering from a major disaster.
          (2) Dissemination.--The State or local government may 
        use not more than 10 percent of financial assistance it 
        receives under this section in a fiscal year for 
        funding activities to disseminate information regarding 
        cost effective mitigation technologies (such as 
        preferred construction practices and materials), 
        including establishing and maintaining centers for 
        protection against natural disasters to carry out such 
        dissemination.
    (c) Allocation of Funds.--The amount of financial 
assistance to be made available to a State, including amounts 
made available to local governments of such State, under this 
section in a fiscal year shall--
          (1) not be less than the lesser of $500,000 or 1.0 
        percent of the total funds appropriated to carry out 
        this section for such fiscal year; but
          (2) not exceed 15 percent of such total funds.
    (d) Criteria.--Subject to the limitations of subsections 
(c) and (e), in determining whether to provide assistance to a 
State or local government under this section and the amount of 
such assistance, the President shall consider the following 
criteria:
          (1) The clear identification of prioritized cost-
        effective mitigation activities that produce meaningful 
        and definable outcomes.
          (2) If the State has submitted a mitigation program 
        in cooperation with local governments under section 
        201(c), the degree to which the activities identified 
        in paragraph (1) are consistent with the State 
        mitigation program.
          (3) The opportunity to fund activities that maximize 
        net benefits to society.
          (4) The ability of the State or local government to 
        fund mitigation activities.
          (5) The extent to which assistance will fund 
        mitigation activities in small impoverished 
        communities.
          (6) The level of interest by the private sector to 
        enter into a partnership to promote mitigation.
          (7) Such other criteria as the President establishes 
        in consultation with State and local governments.
    (e) State Nominations.--
          (1) In general.--The Governor of each State may 
        recommend to the President not less than 5 local 
        governments to receive assistance under this section. 
        The recommendations shall be submitted to the President 
        not later than January 1 of calendar year 1999 and each 
        calendar year thereafter or such later date in the 
        calendar year as the President may establish. In making 
        such recommendations, the Governors shall consider the 
        criteria identified in subsection (d).
          (2) Use.--
                  (A) General rule.--In providing assistance to 
                local governments under this section, the 
                President shall select from local governments 
                recommended by the Governors under this 
                subsection.
                  (B) Waiver.--Upon request of a local 
                government, the President may waive the 
                limitation in subparagraph (A) if the President 
                determines that extraordinary circumstances 
                justify the waiver and that granting the waiver 
                will further the purpose of this section.
          (3) Effect of failure to nominate.--If a Governor of 
        a State fails to submit recommendations under this 
        subsection in a timely manner, the President may 
        select, subject to the criteria in subsection (d), any 
        local governments of the State to receive assistance 
        under this section.
    (f) Small Impoverished Communities.--For the purpose of 
this section, the term ``small impoverished communities'' means 
communities of 3,000 or fewer individuals that are economically 
disadvantaged, as determined by the State in which the 
community is located and based on criteria established by the 
President.
    (g) Federal Share.--Financial assistance provided under 
this section may contribute up to 75 percent of the total cost 
of mitigation activities approved by the President; except that 
the President may contribute up to 90 percent of the total cost 
of mitigation activities in small impoverished communities.
    (h) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $50,000,000 for 
fiscal year 1998, $70,000,000 for fiscal year 1999, and 
$80,000,000 for fiscal year 2000.
    (i) Authorization of Section 404 Funds.--In addition to 
amounts appropriated under subsection (h), the President may 
use, to carry out this section, funds that are appropriated to 
carry out section 404 for post-disaster mitigation activities 
that have not been obligated within 30 months of the disaster 
declaration upon which the funding availability is based.
    (j) Report on Federal and State Administration.--Not later 
than 18 months after the date of enactment of the Disaster 
Mitigation Act of 1998, the President, in consultation with 
State and local governments, shall transmit to Congress a 
report evaluating efforts to implement this section and 
recommending a process for transferring greater authority and 
responsibility for administering the assistance program 
authorized by this section to capable States.

TITLE III--MAJOR DISASTER AND EMERGENCY ASSISTANCE ADMINISTRATION

           *       *       *       *       *       *       *


SEC. 322. MANAGEMENT COSTS.

          e (a) In General.--Notwithstanding any other 
        provision of law (including any administrative rule or 
        guidance), the President shall establish by rule 
        management cost rates for grantees and subgrantees. 
        Such rates shall be used to determine contributions 
        under this Act for management costs.
    (b) Management Costs Defined.--Management costs include 
indirect costs, administrative expenses, associated expenses, 
and any other expenses not directly chargeable to a specific 
project under a major disaster, emergency, or emergency 
preparedness activity or measure. Such costs include the 
necessary costs of requesting, obtaining, and administering 
Federal assistance and costs incurred by a State for 
preparation of damage survey reports, final inspection reports, 
project applications, final audits, and related field 
inspections by State employees, including overtime pay and per 
diem and travel expenses of such employees, but not including 
pay for regular time of such employees.
    (c) Review.--The President shall review the management cost 
rates established under subsection (a) not later than 3 years 
after the date of establishment of such rates and periodically 
thereafter.

TITLE IV--MAJOR DISASTER ASSISTANCE PROGRAMS

           *       *       *       *       *       *       *


SEC. 404. HAZARD MITIGATION.

    (a) In General.--The President may contribute up to 75 
percent of the cost of hazard mitigation measures which the 
President has determined are cost-effective and which 
substantially reduce the risk of future damage, hardship, loss, 
or suffering in any area affected by a major disaster. Such 
measures shall be identified following the evaluation of 
natural hazards under section 409 and shall be subject to 
approval by the President. The total of contributions under 
this section for a major disaster shall not exceed [15] 20 
percent of the estimated aggregate amount of grants to be made 
(less any associated administrative costs) under this Act with 
respect to the major disaster.

           *       *       *       *       *       *       *

    (c) Program Administration by States.--
          (1) In general.--A State desiring to administer the 
        hazard mitigation assistance program established by 
        this section with respect to hazard mitigation 
        assistance in the State may submit to the President an 
        application for the delegation of such authority.
          (2) Criteria.--The President, in consultation with 
        States and local governments, shall establish criteria 
        for the approval of applications submitted under 
        paragraph (1). The criteria shall include, at a 
        minimum, the following:
                  (A) The demonstrated ability of the State to 
                manage the grant program under this section.
                  (B) Submission of the plan required under 
                section 201(c).
                  (C) A demonstrated commitment to mitigation 
                activities.
          (3) Approval.--The President shall approve an 
        application submitted under paragraph (1) that meets 
        the criteria established under paragraph (2).
          (4) Withdrawal of approval.--If, after approving an 
        application of a State submitted under paragraph (1), 
        the President determines that the State is not 
        administering the hazard mitigation assistance program 
        established by this section in a manner satisfactory to 
        the President, the President shall withdraw such 
        approval.
          (5) Audits.--The President shall provide for periodic 
        audits of the hazard mitigation assistance programs 
        administered by States under this subsection.

SEC. 406. REPAIR, RESTORATION, AND REPLACEMENT OF DAMAGED FACILITIES.

  [(a) Contributions.--The President may make contributions--
          [(1) to a State or local government for the repair, 
        restoration, reconstruction, or replacement of a public 
        facility which is damaged or destroyed by a major 
        disaster and for associated expenses incurred by such 
        government; and
          [(2) to a person who owns or operates a private 
        nonprofit facility damaged or destroyed by a major 
        disaster for the repair, restoration, reconstruction, 
        or replacement of such facility and for associated 
        expenses incurred by such person.
  [(b) Minimum Federal Share.--The Federal share of assistance 
under this section shall be not less than--
          [(1) 75 percent of the net eligible cost of repair, 
        restoration, reconstruction, or replacement carried out 
        under this section;
          [(2) 100 percent of associated expenses described in 
        subsections (f)(1) and (f)(2); and
          [(3) 75 percent of associated expenses described in 
        subsections (f)(3), (f)(4), and (f)(5).
  [(c) Large In Lieu Contributions.--
          [(1) For public facilities.--In any case where a 
        State or local government determines that the public 
        welfare would not be best served by repairing, 
        restoring, reconstructing, or replacing any public 
        facility owned or controlled by such State or local 
        government, it may elect to receive, in lieu of a 
        contribution under subsection (a)(1), a contribution of 
        not to exceed 90 percent of the Federal share of the 
        Federal estimate of the cost of repairing, restoring, 
        reconstructing, or replacing such facility and of 
        associated expenses. Funds contributed under this 
        subsection may be used to repair, restore, or expand 
        other selected public facilities, to construct new 
        facilities, or to fund hazard mitigation measures which 
        the State or local government determines to be 
        necessary to meet a need for governmental services and 
        functions in the area affected by the major disaster.
          [(2) Restriction on use for state or local 
        contribution.--Funds provided under this subsection 
        shall not be used for any State or local government 
        cost-sharing contribution required under this Act.
          [(3) For private nonprofit facilities.--In any case 
        where a person who owns or operates a private nonprofit 
        facility determines that the public welfare would not 
        be best served by repairing, restoring, reconstructing, 
        or replacing such facility, such person may elect to 
        receive, in lieu of a contribution under subsection 
        (a)(2), a contribution of not to exceed 90 percent of 
        the Federal share of the Federal estimate of the cost 
        of repairing, restoring, reconstructing, or replacing 
        such facility and of associated expenses. Funds 
        contributed under this subsection may be used to 
        repair, restore, or expand other selected private 
        nonprofit facilities owned or operated by such person, 
        to construct new private nonprofit facilities to be 
        owned or operated by such person, or to fund hazard 
        mitigation measures which such person determines to be 
        necessary to meet a need for its services and functions 
        in the area affected by the major disaster.]
  (a) Contributions.--
          (1) In general.--The President may make 
        contributions--
                  (A) to a State or local government for the 
                repair, restoration, reconstruction, or 
                replacement of a public facility which is 
                damaged or destroyed by a major disaster and 
                for associated expenses incurred by such 
                government; and
                  (B) subject to paragraph (2), to a person who 
                owns or operates a private nonprofit facility 
                damaged or destroyed by a major disaster for 
                the repair, restoration, reconstruction, or 
                replacement of such facility and for associated 
                expenses incurred by such person.
          (2) Conditions for assistance to private nonprofit 
        facilities.--The President may make contributions to a 
        private nonprofit facility under paragraph (1)(B) only 
        if the owner or operator of the facility--
                  (A) has applied for a disaster loan under 
                section 7(b) of the Small Business Act (15 
                U.S.C. 636(b)); and
                  (B)(i) has been determined to be ineligible 
                for such a loan; or
                  (ii) has obtained such a loan in the maximum 
                amount for which the Small Business 
                Administration determines the facility is 
                eligible.
    (b) Minimum Federal Share.--The Federal share of assistance 
under this section shall be not less than 75 percent of the 
eligible cost of repair, restoration, reconstruction, or 
replacement carried out under this section.
    (c) Large In-Lieu Contributions.--
          (1) For public facilities.--
                  1(A) In general.--In any case in which a 
                State or local government determines that the 
                public welfare would not be best served by 
                repairing, restoring, reconstructing, or 
                replacing any public facility owned or 
                controlled by such State or local government, 
                the State or local government may elect to 
                receive, in lieu of a contribution under 
                subsection (a)(1)(A), a contribution of 75 
                percent of the Federal share of the Federal 
                estimate of the cost of repairing, restoring, 
                reconstructing, or replacing such facility and 
                of management expenses.
                  (B) Use of funds.--Funds contributed to a 
                State or local government under this paragraph 
                may be used to repair, restore, or expand other 
                selected public facilities, to construct new 
                facilities, or to fund hazard mitigation 
                measures which the State or local government 
                determines to be necessary to meet a need for 
                governmental services and functions in the area 
                affected by the major disaster.
          (2) For private nonprofit facilities.--
                  (A) In general.--In any case where a person 
                who owns or operates a private nonprofit 
                facility determines that the public welfare 
                would not be best served by repairing, 
                restoring, reconstructing, or replacing such 
                facility, such person may elect to receive, in 
                lieu of a contribution under subsection 
                (a)(1)(B), a contribution of 75 percent of the 
                Federal share of the Federal estimate of the 
                cost of repairing, restoring, reconstructing, 
                or replacing such facility and of management 
                expenses.
                  (B) Use of funds.--Funds contributed to a 
                person under this paragraph may be used to 
                repair, restore, or expand other selected 
                private nonprofit facilities owned or operated 
                by the person, to construct new private 
                nonprofit facilities to be owned or operated by 
                the person, or to fund hazard mitigation 
                measures that the person determines to be 
                necessary to meet a need for its services and 
                functions in the area affected by the major 
                disaster.
          (3) Modification of federal share.--The President 
        shall modify the Federal share of the cost estimate 
        provided in paragraphs (1) and (2) if the President 
        determines an alternative cost share will likely reduce 
        the total amount of Federal assistance provided under 
        this section. The Federal cost share for purposes of 
        paragraphs (1) and (2) shall not exceed 90 percent and 
        shall not be less than 50 percent.

           *       *       *       *       *       *       *

  [(e) Net Eligible Cost.--
          [(1) General rule.--For purposes of this section, the 
        cost of repairing, restoring, reconstructing, or 
        replacing a public facility or private nonprofit 
        facility on the basis of the design of such facility as 
        it existed immediately prior to the major disaster and 
        in conformity with current applicable codes, 
        specifications, and standards (including floodplain 
        management and hazard mitigation criteria required by 
        the President or by the Coastal Barrier Resources Act 
        (16 U.S.C. 3501 et seq.)) shall, at a minimum, be 
        treated as the net eligible cost of such repair, 
        restoration, reconstruction, or replacement.
          [(2) Special rule.--In any case in which the facility 
        being repaired, restored, reconstructed, or replaced 
        under this section was under construction on the date 
        of the major disaster, the cost of repairing, 
        restoring, reconstructing, or replacing such facility 
        shall include, for purposes of this section, only those 
        costs which, under the contract for such construction, 
        are the owner's responsibility and not the contractor's 
        responsibility.
    [(f) Associated Expenses.--For purposes of this section, 
associated expenses include the following:
          [(1) Necessary costs.--Necessary costs of requesting, 
        obtaining, and administering Federal assistance based 
        on a percentage of assistance provided as follows:
                  [(A) For an applicant whose net eligible 
                costs equal less than $100,000, 3 percent of 
                such net eligible costs.
                  [(B) For an applicant whose net eligible 
                costs equal $100,000 or more but less than 
                $1,000,000, $3,000 plus 2 percent of such net 
                eligible costs in excess of $100,000.
                  [(C) For an applicant whose net eligible 
                costs equal $1,000,000 or more but less than 
                $5,000,000, $21,000 plus 1 percent of such net 
                eligible costs in excess of $1,000,000.
                  [(D) For an applicant whose net eligible 
                costs equal $5,000,000 or more, $61,000 plus 
                \1/2\ percent of such net eligible costs in 
                excess of $5,000,000.
          [(2) Extraordinary costs.--Extraordinary costs 
        incurred by a State for preparation of damage survey 
        reports, final inspection reports, project 
        applications, final audits, and related field 
        inspections by State employees, including overtime pay 
        and per diem and travel expenses of such employees, but 
        not including pay for regular time of such employees, 
        based on the total amount of assistance provided under 
        sections 403, 404, 406, 407, 502, and 503 in such State 
        in connection with the major disaster as follows:
                  [(A) If such total amount is less than 
                $100,000, 3 percent of such total amount.
                  [(B) If such total amount is $100,000 or more 
                but less than $1,000,000, $3,000 plus 2 percent 
                of such total amount in excess of $100,000.
                  [(C) If such total amount is $1,000,000 or 
                more but less than $5,000,000, $21,000 plus 1 
                percent of such total amount in excess of 
                $1,000,000.
                  [(D) If such total amount is $5,000,000 or 
                more, $61,000 plus \1/2\ percent of such total 
                amount in excess of $5,000,000.
          [(3) Costs of national guard.--The costs of 
        mobilizing and employing the National Guard for 
        performance of eligible work.
          [(4) Costs of prison labor.--The costs of using 
        prison labor to perform eligible work, including wages 
        actually paid, transportation to a worksite, and 
        extraordinary costs of guards, food, and lodging.
          [(5) Other labor costs.--Base and overtime wages for 
        an applicant's employees and extra hires performing 
        eligible work plus fringe benefits on such wages to the 
        extent that such benefits were being paid before the 
        disaster.]
  (e) Eligible Cost.--
          (1) In general.--For the purposes of this section, 
        the estimate of the cost of repairing, restoring, 
        reconstructing, or replacing a public facility or 
        private nonprofit facility on the basis of the design 
        of such facility as it existed immediately before the 
        major disaster and in conformity with current 
        applicable codes, specifications, and standards 
        (including floodplain management and hazard mitigation 
        criteria required by the President or by the Coastal 
        Barrier Resources Act (16 U.S.C. 3501 et seq.)) shall 
        be treated as the eligible cost of such repair, 
        restoration, reconstruction, or replacement. Subject to 
        paragraph (2), the President shall use the cost 
        estimation procedures developed under paragraph (3) to 
        make the estimate under this paragraph.
          (2) Modification of eligible cost.--In the event the 
        actual cost of repairing, restoring, reconstructing, or 
        replacing a facility under this section is more than 
        120 percent or less than 80 percent of the cost 
        estimated under paragraph (1), the President may 
        determine that the eligible cost be the actual cost of 
        such repair, restoration, reconstruction, or 
        replacement. The government or person receiving 
        assistance under this section shall reimburse the 
        President for the portion of such assistance that 
        exceeds the eligible cost of such repair, restoration, 
        reconstruction, or replacement.
          (3) Expert panel.--Not later than 18 months after the 
        date of enactment of the Disaster Mitigation Act of 
        1998, the President, acting through the Director of the 
        Federal Emergency Management Agency, shall establish an 
        expert panel, including representatives from the 
        construction industry, to develop procedures for 
        estimating the cost of repairing, restoring, 
        reconstructing, or replacing a facility consistent with 
        industry practices.
          (4) Special rule.--In any case in which the facility 
        being repaired, restored, reconstructed, or replaced 
        under this section was under construction on the date 
        of the major disaster, the cost of repairing, 
        restoring, reconstructing, or replacing such facility 
        shall include, for purposes of this section, only those 
        costs which, under the contract for such construction, 
        are the owner's responsibility and not the contractor's 
        responsibility.
          (5) Other eligible costs.--For purposes of this 
        section, other eligible costs include the following:
                  (A) Costs of national guard.--The cost of 
                mobilizing and employing the National Guard for 
                performance of eligible work.
                  (B) Costs of prison labor.--The costs of 
                using prison labor to perform eligible work, 
                including wages actually paid, transportation 
                to a worksite, and extraordinary costs of 
                guards, food, and lodging.
                  (C) Other labor costs.--Base and overtime 
                wages for an applicant's employees and extra 
                hires performing eligible work plus fringe 
                benefits on such wages to the extent that such 
                benefits were being paid before the disaster.

           *       *       *       *       *       *       *


[SEC. 408. TEMPORARY HOUSING ASSISTANCE.

  [(a) Provision of Temporary Housing.--
          [(1) In general.--The President may--
                  [(A) provide, by purchase or lease, temporary 
                housing (including unoccupied habitable 
                dwellings), suitable rental housing, mobile 
                homes, or other readily fabricated dwellings to 
                persons who, as a result of a major disaster, 
                require temporary housing; and
                  [(B) reimburse State and local governments in 
                accordance with paragraph (4) for the cost of 
                sites provided under paragraph (2).
          [(2) Mobile home site.--
                  [(A) In general.--Any mobile home or other 
                readily fabricated dwelling provided under this 
                section shall whenever possible be located on a 
                site which--
                          [(i) is provided by the State or 
                        local government; and
                          [(ii) has utilities provided by the 
                        State or local government, by the owner 
                        of the site, or by the occupant who was 
                        displaced by the major disaster.
                  [(B) Other sites.--Mobile homes and other 
                readily fabricated dwellings may be located on 
                sites provided by the President if the 
                President determines that such sites would be 
                more economical or accessible than sites 
                described in subparagraph (A).
          [(3) Period.--Federal financial and operational 
        assistance under this section shall continue for not 
        longer than 18 months after the date of the major 
        disaster declaration by the President, unless the 
        President determines that due to extraordinary 
        circumstances it would be in the public interest to 
        extend such 18-month period.
          [(4) Federal share.--The Federal share of assistance 
        under this section shall be 100 percent; except that 
        the Federal share of assistance under this section for 
        construction and site development costs (including 
        installation of utilities) at a mobile home group site 
        shall be 75 percent of the eligible cost of such 
        assistance. The State or local government receiving 
        assistance under this section shall pay any cost which 
        is not paid for from the Federal share.
  [(b) Temporary Mortgage and Rental Payments.--The President 
is authorized to provide assistance on a temporary basis in the 
form of mortgage or rental payments to or on behalf of 
individuals and families who, as a result of financial hardship 
caused by a major disaster, have received written notice of 
dispossession or eviction from a residence by reason of a 
foreclosure of any mortgage or lien, cancellation of any 
contract of sale, or termination of any lease, entered into 
prior to such disaster. Such assistance shall be provided for 
the duration of the period of financial hardship but not to 
exceed 18 months.
  [(c) In Lieu Expenditures.--In lieu of providing other types 
of temporary housing after a major disaster, the President is 
authorized to make expenditures for the purpose of repairing or 
restoring to a habitable condition owner-occupied private 
residential structures made uninhabitable by a major disaster 
which are capable of being restored quickly to a habitable 
condition.
  [(d) Transfer of Temporary Housing.--
          [(1) Direct sale to occupants.--Notwithstanding any 
        other provision of law, any temporary housing acquired 
        by purchase may be sold directly to individuals and 
        families who are occupants of temporary housing at 
        prices that are fair and equitable, as determined by 
        the President.
          [(2) Transfers to states, local governments, and 
        voluntary organizations.--The President may sell or 
        otherwise make available temporary housing units 
        directly to States, other governmental entities, and 
        voluntary organizations. The President shall impose as 
        a condition of transfer under this paragraph a covenant 
        to comply with the provisions of section 308 requiring 
        nondiscrimination in occupancy of such temporary 
        housing units. Such disposition shall be limited to 
        units purchased under the provisions of subsection (a) 
        and to the purposes of providing temporary housing for 
        disaster victims in major disasters or emergencies.
  [(e) Notification.--
          [(1) In general.--Each person who applies for 
        assistance under this section shall be notified 
        regarding the type and amount of any assistance for 
        which such person qualifies. Whenever practicable, such 
        notice shall be provided within 7 days after the date 
        of submission of such application.
          [(2) Information.--Notification under this subsection 
        shall provide information regarding--
                  [(A) all forms of such assistance available;
                  [(B) any specific criteria which must be met 
                to qualify for each type of assistance that is 
                available;
                  [(C) any limitations which apply to each type 
                of assistance; and
                  [(D) the address and telephone number of 
                offices responsible for responding to--
                          [(i) appeals of determinations of 
                        eligibility for assistance; and
                          [(ii) requests for changes in the 
                        type or amount of assistance provided.
  [(f) Location.--In providing assistance under this section, 
consideration shall be given to the location of and travel time 
to--
          [(1) the applicant's home and place of business;
          [(2) schools which the applicant or members of the 
        applicant's family who reside with the applicant 
        attend; and
          [(3) crops or livestock which the applicant tends in 
        the course of any involvement in farming which provides 
        25 percent or more of the applicant's annual income.]

SEC. 408. FEDERAL ASSISTANCE TO INDIVIDUALS AND HOUSEHOLDS.

  (a) General Authority.--Subject to the requirements of this 
section, the President, in consultation with the Governor of 
the affected State, may provide financial assistance, and, if 
necessary, direct services, to disaster victims who as a direct 
result of a major disaster have necessary expenses and serious 
needs where such victims are unable to meet such expenses or 
needs through other means.
  (b) Housing Assistance.--
          (1) Eligibility.--The President may provide financial 
        or other assistance under this section to individuals 
        and families to respond to the disaster-related housing 
        needs of those who are displaced from their predisaster 
        primary residences or whose predisaster primary 
        residences are rendered uninhabitable as a result of 
        damage caused by a major disaster.
          (2) Determination of appropriate types of 
        assistance.--The President shall determine appropriate 
        types of housing assistance to be provided to disaster 
        victims under this section based upon considerations of 
        cost effectiveness, convenience to disaster victims, 
        and such other factors as the President may consider 
        appropriate. One or more types of housing assistance 
        may be made available, based on the suitability and 
        availability of the types of assistance, to meet the 
        needs of disaster victims in the particular disaster 
        situation.
  (c) Types of Housing Assistance.--
          (1) Temporary housing.--
                  (A) Financial assistance.--
                          (i) In general.--The President may 
                        provide financial assistance under this 
                        section to individuals or households to 
                        rent alternate housing accommodations, 
                        existing rental units, manufactured 
                        housing, recreational vehicles, or 
                        other readily fabricated dwellings.
                          (ii) Amount.--The amount of 
                        assistance under clause (i) shall be 
                        based on the fair market rent for the 
                        accommodation being furnished plus the 
                        cost of any transportation, utility 
                        hookups, or unit installation not being 
                        directly provided by the President.
                  (B) Direct assistance.--
                          (i) In general.--The President may 
                        also directly provide under this 
                        section housing units, acquired by 
                        purchase or lease, to individuals or 
                        households who, because of a lack of 
                        available housing resources, would be 
                        unable to make use of the assistance 
                        provided under subparagraph (A).
                          (ii) Period of assistance.--The 
                        President may not provide direct 
                        assistance under clause (i) with 
                        respect to a major disaster after the 
                        expiration of the 18-month period 
                        beginning on the date of the 
                        declaration of the major disaster by 
                        the President, except that the 
                        President may extend such period if the 
                        President determines that due to 
                        extraordinary circumstances an 
                        extension would be in the public 
                        interest.
                          (iii) Collection of rental charges.--
                        After the expiration of the 18-month 
                        period referred to in clause (ii), the 
                        President may charge fair market rent 
                        for the accommodation being provided.
          (2) Repairs.--The President may provide financial 
        assistance for the repair of owner-occupied private 
        residences, utilities, and residential infrastructure 
        (such as private access routes) damaged by a major 
        disaster to a habitable or functioning condition. A 
        recipient of assistance provided under this paragraph 
        need not show that the assistance can be met through 
        other means, except insurance proceeds, if the 
        assistance is used for emergency repairs to make a 
        private residence habitable and does not exceed $5,000 
        (based on fiscal year 1998 constant dollars).
          (3) Replacement.--The President may provide financial 
        assistance for the replacement of owner-occupied 
        private residences damaged by a major disaster. 
        Assistance provided under this paragraph shall not 
        exceed $10,000 (based on fiscal year 1998 constant 
        dollars). The President may not waive any provision of 
        Federal law requiring the purchase of flood insurance 
        as a condition for the receipt of Federal disaster 
        assistance with respect to assistance provided under 
        this paragraph.
          (4) Permanent housing construction.--The President 
        may provide financial assistance or direct assistance 
        under this section to individuals or households to 
        construct permanent housing in insular areas outside 
        the continental United States and other remote 
        locations in cases in which--
                  (A) no alternative housing resources are 
                available; and
                  (B) the types of temporary housing assistance 
                described in paragraph (1) are unavailable, 
                infeasible, or not cost effective.
    (d) Terms and Conditions Relating to Housing Assistance.--
          (1) Sites.--Any readily fabricated dwelling provided 
        under this section shall, whenever possible, be located 
        on a site complete with utilities, and shall be 
        provided by the State or local government, by the owner 
        of the site, or by the occupant who was displaced by 
        the major disaster. Readily fabricated dwellings may be 
        located on sites provided by the President if the 
        President determines that such sites would be more 
        economical or accessible.
          (2) Disposal of units.--
                  (A) Sale to occupants.--
                          (i) In general.--Notwithstanding any 
                        other provision of law, a temporary 
                        housing unit purchased under this 
                        section by the President for the 
                        purposes of housing disaster victims 
                        may be sold directly to the individual 
                        or household who is occupying the unit 
                        if the individual or household needs 
                        permanent housing.
                          (ii) Sales price.--Sales of temporary 
                        housing units under clause (i) shall be 
                        accomplished at prices that are fair 
                        and equitable.
                          (iii) Deposit of proceeds.--
                        Notwithstanding any other provision of 
                        law, the proceeds of a sale under 
                        clause (i) shall be deposited into the 
                        appropriate Disaster Relief Fund 
                        account.
                          (iv) Use of gsa services.--The 
                        President may use the services of the 
                        General Services Administration to 
                        accomplish a sale under clause (i).
                  (B) Other methods of disposal.--
                          (i) Sale.--If not disposed of under 
                        subparagraph (A), a temporary housing 
                        unit purchased by the President for the 
                        purposes of housing disaster victims 
                        may be resold.
                          (ii) Disposal to governments and 
                        voluntary organizations.--A temporary 
                        housing unit described in clause (i) 
                        may also be sold, transferred, donated, 
                        or otherwise made available directly to 
                        a State or other governmental entity or 
                        to a voluntary organization for the 
                        sole purpose of providing temporary 
                        housing to disaster victims in major 
                        disasters and emergencies if, as a 
                        condition of such sale, transfer, or 
                        donation, the State, other governmental 
                        agency, or voluntary organization 
                        agrees--
                                  (I) to comply with the 
                                nondiscrimination provisions of 
                                section 308; and
                                  (II) to obtain and maintain 
                                hazard and flood insurance on 
                                the housing unit.
  (e) Financial Assistance To Address Other Needs.--
          (1) Medical, dental, and funeral expenses.--The 
        President, in consultation with the Governor of the 
        affected State, may provide financial assistance under 
        this section to an individual or household adversely 
        affected by a major disaster to meet disaster-related 
        medical, dental, and funeral expenses.
          (2) Personal property, transportation, and other 
        expenses.--The President, in consultation with the 
        Governor of the affected State, may provide financial 
        assistance under this section to an individual or 
        household described in paragraph (1) to address 
        personal property, transportation, and other necessary 
        expenses or serious needs resulting from the major 
        disaster.
  (f) State Role.--The President shall provide for the 
substantial and ongoing involvement of the affected State in 
administering the assistance under this section.
  (g) Maximum Amount of Assistance.--No individual or household 
shall receive financial assistance greater than $25,000 under 
this section with respect to a single major disaster. Such 
limit shall be adjusted annually to reflect changes in the 
Consumer Price Index for all Urban Consumers published by the 
Department of Labor.
  (h) Issuance of Regulations.--The President shall issue rules 
and regulations to carry out the program, including criteria, 
standards, and procedures for determining eligibility for 
assistance.

           *       *       *       *       *       *       *


[SEC. 411. INDIVIDUAL AND FAMILY GRANT PROGRAMS.

  [(a) In General.--The President is authorized to make a grant 
to a State for the purpose of making grants to individuals or 
families adversely affected by a major disaster for meeting 
disaster-related necessary expenses or serious needs of such 
individuals or families in those cases where such individuals 
or families are unable to meet such expenses or needs through 
assistance under other provisions of this Act or through other 
means.
  [(b) Cost Sharing.--
          [(1) Federal share.--The Federal share of a grant to 
        an individual or a family under this section shall be 
        equal to 75 percent of the actual cost incurred.
          [(2) State contribution.--The Federal share of a 
        grant under this section shall be paid only on 
        condition that the remaining 25 percent of the cost is 
        paid to an individual or family from funds made 
        available by a State.
  [(c) Regulations.--The President shall promulgate regulations 
to carry out this section and such regulations shall include 
national criteria, standards, and procedures for the 
determination of eligibility for grants and the administration 
of grants under this section.
  [(d) Administrative Expenses.--A State may expend not to 
exceed 5 percent of any grant made by the President to it under 
subsection (a) for expenses of administering grants to 
individuals and families under this section.
  [(e) Administration Through Governor.--The Governor of a 
State shall administer the grant program authorized by this 
section in the State.
  [(f) Limit on Grants to Individual.--No individual or family 
shall receive grants under this section aggregating more than 
$10,000 with respect to any single major disaster. Such $10,000 
limit shall annually be adjusted to reflect changes in the 
Consumer Price Index for All Urban Consumers published by the 
Department of Labor.]

           *       *       *       *       *       *       *


                       [community disaster loans

  [Sec. 417. (a) The President is authorized to make loans to 
any local government which may suffer a substantial loss of tax 
and other revenues as a result of a major disaster, and has 
demonstrated a need for financial assistance in order to 
perform its governmental functions. The amount of any such loan 
shall be based on need, and shall not exceed 25 per centum of 
the annual operating budget of that local government for the 
fiscal year in which the major disaster occurs. Repayment of 
all or any part of such loan to the extent that revenues of the 
local government during the three full fiscal year period 
following the major disaster are insufficient to meet the 
operating budget of the local government, including additional 
disaster-related expenses of a municipal operation character 
shall be cancelled.
  [(b) Any loans made under this section shall not reduce or 
otherwise affect any grants or other assistance under this 
Act.]

           *       *       *       *       *       *       *


[SEC. 422. SIMPLIFIED PROCEDURE.

  [If the Federal estimate of the cost of--
          [(1) repairing, restoring, reconstructing, or 
        replacing under section 406 any damaged or destroyed 
        public facility or private nonprofit facility,
          [(2) emergency assistance under section 403 or 502, 
        or
          [(3) debris removed under section 407,
is less than $35,000, the President (on application of the 
State or local government or the owner or operator of the 
private nonprofit facility) may make the contribution to such 
State or local government or owner or operator under section 
403, 406, 407, or 502, as the case may be, on the basis of such 
Federal estimate. Such $35,000 amount shall be adjusted 
annually to reflect changes in the Consumer Price Index for All 
Urban Consumers published by the Department of Labor.]

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TITLE V--EMERGENCY ASSISTANCE PROGRAMS

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SEC. 502. FEDERAL EMERGENCY ASSISTANCE.

  (a) Specified.--In any emergency, the President may--
          (1) * * *

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          (6) provide [temporary housing] assistance in 
        accordance with section 408; and

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