[Senate Report 116-249]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 511


116th Congress  }                                            {   Report
                               SENATE                          
2d Session      }                                            {   116-249
_______________________________________________________________________

                                     

                                                       


   SAFEGUARDING TOMORROW THROUGH ONGOING RISK MITIGATION ACT OF 2020

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 3418

            TO AMEND THE ROBERT T. STAFFORD DISASTER RELIEF
               AND EMERGENCY ASSISTANCE ACT TO ALLOW THE
           ADMINISTRATOR OF THE FEDERAL EMERGENCY MANAGEMENT
          AGENCY TO PROVIDE CAPITALIZATION GRANTS TO STATES TO
 ESTABLISH REVOLVING FUNDS TO PROVIDE HAZARD MITIGATION ASSISTANCE TO 
  REDUCE RISKS FROM DISASTERS AND NATURAL HAZARDS, AND OTHER RELATED 
                           ENVIRONMENTAL HARM
                           







                August 10, 2020.--Ordered to be printed
                
         
                
                
                            ______

              U.S. GOVERNMENT PUBLISHING OFFICE 
 99-010                 WASHINGTON : 2020 
                 
                
                
                
                
                
                
                
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio                    GARY C. PETERS, Michigan
RAND PAUL, Kentucky                  THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma             MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah                    KAMALA D. HARRIS, California
RICK SCOTT, Florida                  KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming             JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri

                Gabrielle D'Adamo Singer, Staff Director
                   Joseph C. Folio III, Chief Counsel
             Barrett F. Percival, Professional Staff Member
               David M. Weinberg, Minority Staff Director
               Zachary I. Schram, Minority Chief Counsel
 Christopher J. Mulkins, Minority Deputy Director of Homeland Security
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     
                     
                     
                     



                                                       Calendar No. 511
                                                       
                                                       
116th Congress   }                                         {   Report
                                SENATE
2d Session       }                                         {   116-249        
                                                     

======================================================================



 
   SAFEGUARDING TOMORROW THROUGH ONGOING RISK MITIGATION ACT OF 2020

                                _______
                                

                August 10, 2020.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 3418]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 3418) to amend the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act 
to allow the Administrator of the Federal Emergency Management 
Agency to provide capitalization grants to States to establish 
revolving funds to provide hazard mitigation assistance to 
reduce risks from disasters and natural hazards, and other 
related environmental harm, having considered the same, reports 
favorably thereon with amendments and recommends that the bill, 
as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................7
 VI. Congressional Budget Office Cost Estimate........................7
VII. Changes in Existing Law Made by the Bill, as Reported...........10

                         I. Purpose and Summary

    S. 3418, the Safeguarding Tomorrow through Ongoing Risk 
Management Act of 2020, or the ``STORM Act'', authorizes the 
Administrator of the Federal Emergency Management Agency (FEMA) 
to provide capitalization grants to states to establish 
revolving loan funds. The Administrator can enter into 
agreements with states for hazard mitigation projects that 
reduce disaster risk in order to decrease the loss of life and 
property, the cost of insurance, and Federal disaster payments. 
To be eligible to receive capitalization grants, the state must 
develop a statewide hazard mitigation plan. If localities want 
to be eligible for the capitalization grant that the state has 
received, local governments must supply the state with project 
proposals, assessments of recurring disaster vulnerabilities, 
and a description of how those projects would address the goals 
of the state's hazard mitigation plan. Projects should be 
prioritized if they: increase resilience or risk of harm to 
infrastructure; take regional impact hazards into account; and/
or provide resilience for major economic sectors or critical 
national infrastructure.

              II. Background and the Need for Legislation

    According to the National Oceanic and Atmospheric 
Administration (NOAA), since 1980, the United States has 
sustained 265 weather and climate disaster events in which the 
events' damages reached or exceeded $1 billion.\1\ NOAA 
estimates that the total cost of those 265 events exceeded 
$1.775 trillion.\2\
---------------------------------------------------------------------------
    \1\Billion-Dollar Weather and Climate Disasters: Overview, Nat'l 
Ctrs. for Envtl. Info, https://www.ncdc.noaa.gov/billions/ (last 
visited June 29, 2020).
    \2\Id.
---------------------------------------------------------------------------
    More concerning is that trend analysis suggests these 
events are increasing. NOAA states that ``2019 is the fifth 
consecutive year in which 10 or more billion-dollar weather and 
climate disaster events have impacted the [U.S.].''\3\ From 
2015 through 2019, the U.S. experienced a total of 69 separate 
billion-dollar events.\4\
---------------------------------------------------------------------------
    \3\Id.
    \4\Adam B. Smith, 2010-2019: A Landmark Decade of U.S. Billion-
Dollar Wealth and Climate Disasters, Climate.gov (Jan. 8, 2020), 
https://www.climate.gov/news-features/blogs/beyond-data/2010-2019-
landmark-decade-us-billion-dollar-weather-and-
climate#::text=2019%20also%20 
marks%20the%20fifth,in%20direct%20damages%20during%202019.
---------------------------------------------------------------------------
    For example, in 2019, the Mississippi River was above its 
flood stage for the longest period in recorded history. Prior 
to 2019, the highest record was 152 days above the river's 
flood stage in 1927.\5\ During 2019, the volume of water in the 
river was 64 percent greater than the 10-year average and as of 
July 31 had been above the flood stage for 235 days with 206.3 
trillion gallons of water flowing down the river.\6\ Along the 
Mississippi River, Cape Girardeau, Missouri, was above the 
flood stage from March 12th through August 4th--nearly 5 months 
of consecutive flooding.\7\ According to an economic analysis 
conducted by the Mississippi River Cities and Towns Initiative, 
losses in the 2019 flooding season ``exceeded $20 billion 
across 19 states in the Missouri, Arkansas, and Mississippi 
river watersheds.''\8\
---------------------------------------------------------------------------
    \5\Alisha Renfro, Delta Dispatches: 5 Reasons Why 2019's 
Mississippi River Flood is the Most Unprecedented of Our Time, Restore 
the Miss. River Delta (June 27, 2019), http://
mississippiriverdelta.org/5-reasons-why-2019s-mississippi-river-flood-
is-the-most-unprecedented-of-our-time/.
    \6\Id.
    \7\Summary of Major Flooding Along Mississippi River in 2019, Nat'l 
Weather Serv., https://www.weather.gov/pah/MississippiRiverFlooding2019 
(last visited June 29, 2020).
    \8\Graham Ambrose, $6.2 Billion: New Analysis Shows Total Flood 
Cost to Mississippi River States, Muscatine Journal (Mar. 5, 2020), 
https://muscatinejournal.com/news/local/6-2-billion-new-analysis-shows-
total-flood-costs-to-mississippi-river-states/article_bb344f1b-0808-
51ce-9ddf-1d3f53829233.html.
---------------------------------------------------------------------------
    Fluctuating water levels in the Great Lakes have also 
resulted in hundreds of millions of dollars lost by the 40 
million people and by the many industries in the region that 
are vital to our nation's economy.\9\ In Michigan alone, 
officials from the Michigan Municipal League estimate that 
shoreline erosion and flooding have resulted in $63 million 
dollars in damage over the past year.\10\
---------------------------------------------------------------------------
    \9\U.S. Geological Survey, USGS Fact Sheet: Coastal Erosion of 
Southern Lake Michigan https://pubs.usgs.gov/fs/lake-michigan/ (last 
visited July 31, 2020).
    \10\Paula Gardner, Numbers show impact of Michigan coastline 
flooding and erosion from high water Michigan Live (Mar. 30, 2020) 
https://www.mlive.com/news/2020/03/numbers-show-impact-of-michigan-
coastline-flooding-and-erosion-from-high-water.html (last visited July 
31, 2020).
---------------------------------------------------------------------------
    There are numerous Federal mitigation grant programs that 
help states, cities, and communities rebuild. Many of the 
programs are implemented to offer assistance after a disaster 
passes or subsides. But hazard mitigation assistance is one 
identified area that can help increase resilience before 
disasters strike.
    According to the Natural Institute of Building Sciences, 
``[n]atural hazard mitigation saves $6 for every $1 spent on 
federal mitigation grants.''\11\ As it relates to the 
Mississippi River flooding events, FEMA stated that ``above-
code design and public-sector mitigation grant projects for 
riverine floods save more than they cost. The losses avoided by 
federally-funded riverine flood mitigation projects far exceeds 
the money spent (with a 7x return on investment).''\12\
---------------------------------------------------------------------------
    \11\National Hazard Mitigation Saves Interim Report Fact Sheet, 
FEMA Fed. Ins. & Mitigation Admin. (June 2018), https://www.fema.gov/
media-library-data/15287 32098546-c3116b4c12 a0167c31b46ba09d02edfa /
FEMA_MitSaves-Factsheet_508.pdf (last visited June 29, 2020).
    \12\Id.
---------------------------------------------------------------------------
    This legislation aims to provide states with funding that 
will help them execute their own hazard mitigation projects. In 
order to be eligible for consideration for a grant, state and 
local governments must establish their own hazard mitigation 
plans and prove that identified projects will reduce disaster 
risk and decrease the loss of life and property, the cost of 
insurance, and Federal disaster payments. Furthermore, the 
hazard mitigation assistance will come in the form of a 
revolving loan fund, ``pools of capital from which loans can be 
made for . . . projects--as loans are repaid, the capital is 
then reloaned for another project.''\13\ Although these loans 
can be offered through private investment, ``[g]overnment-
sponsored [revolving loan funds] typically offer lower interest 
rates and/or more flexible terms than are available in 
commercial capital markets.''\14\
---------------------------------------------------------------------------
    \13\Revolving Loan Funds, Office of Energy Efficiency & Renewable 
Energy, https://www.energy.gov/eere/slsc/revolving-loan-funds (last 
visited June 29, 2020).
    \14\Id.
---------------------------------------------------------------------------
    As the U.S. Chamber of Commerce points out, ``[t]he ongoing 
effects from disasters will multiply the existing investment 
gap and economic risks we face from failing to support critical 
infrastructure, the potential of nearly $4 trillion in lost 
[Gross Domestic Product] and 2.5 million jobs.''\15\ To reduce 
future destruction to particular infrastructure that would 
cause distinct effects, this legislation requires the 
Administrator of FEMA to give special consideration and weight 
to projects that: increase resilience and reduce harm to 
infrastructure; require partnerships between two or more 
entities; take into account regional impacts; and/or promote 
resilience of major economic sectors or critical national 
infrastructure.
---------------------------------------------------------------------------
    \15\Coalition Letter on H.R. 3779, the ``Resilience Revolving Loan 
Fund Act of 2019'', U.S. Chamber of Commerce (Feb. 6, 2020, 9:15 AM), 
https://www.uschamber.com/letters-congress/coalition-letter-hr-3779-
the-resilience-revolving-loan-fund-act-of-2019.
---------------------------------------------------------------------------
    It is Congress' intent that the original designated 
appropriation will provide states financially favorable terms 
and the ability to start building resilience in a more timely 
and local manner than traditional pre-disaster hazard 
mitigation programs operated by the Federal Government. These 
original funds will contribute to the advancement of their own 
revolving fund by generating interest off the capital to allow 
state and local governments to start self-executing their own 
projects and reduce Federal disaster payments in the future and 
saving American lives.

                        III. Legislative History

    Ranking Member Gary Peters (D-MI) introduced S. 3418, the 
STORM Act of 2020, on March 9, 2020, with Chairman Ron Johnson 
(R-WI). The bill was referred to the Committee on the Homeland 
Security and Governmental Affairs. Senators James Lankford (R-
OK) and Debbie Stabenow (D-MI) later joined as cosponsors.
    The Committee considered S. 3418 at a business meeting on 
March 11, 2020. The bill was ordered reported favorably by 
voice vote en bloc without amendment. Senators present for the 
vote were Johnson, Portman, Lankford, Romney, Scott, Enzi, 
Hawley, Peters, Carper, Hassan, Harris, Sinema, and Rosen.
    Pursuant to Committee rules, the bill is being reported 
with technical amendments.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Short title

    This section established that the bill may be cited as the 
``Safeguarding Tomorrow through Ongoing Risk Management Act of 
2020'' or the ``STORM Act''.

Section 2. Grants to Entities for Establishment of Hazard Mitigation 
        Revolving Loan Funds

    Section 2 adds a new Section 205 to the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act under Title II.
    New Section 205 subsection (a) lays out the general 
authorities of the hazard mitigation capitalization grant. 
Those authorities provide that the Administrator of FEMA may 
enter into agreements with entities to make capitalization 
grants available for the establishment of hazard mitigation 
revolving loan funds. It states that projects eligible for 
these funds should reduce disaster risk in order to decrease 
the loss of life and property, the cost of insurance, and 
Federal disaster payments.
    New Section 205 subsection (b) lays out what an entity must 
provide FEMA in its application to be eligible for a grant. The 
entity must provide: project proposals comprised of local 
hazard mitigation projects; an assessment of recurring disaster 
vulnerabilities that demonstrates a risk to life and property; 
a description of how the entity's hazard mitigation plan has 
taken risk to life and property into account; a description of 
how the proposed projects eligible for the grants would align 
to their respective local or state government's hazard 
mitigation plan; and a proposal of how to achieve resilience 
through regional approaches where there may be shared 
vulnerable areas that could be effected by a single, natural 
disaster event. It also requires the Administrator of FEMA to 
provide technical assistance to eligible entities.
    New Section 205 subsection (c) requires an entity that 
receives a capitalization grant to establish an entity loan 
fund through its respective emergency management agency. The 
established entity loan fund should only consist of funds 
provided by the capitalization grant, repayments of loans from 
the capitalization grants, and interest earned on amounts in 
the entity loan fund. The subsection requires the entity to 
deposit an amount no less than 10 percent of the amount of the 
capitalization grant. If the deposit from the entity is less 
than 10 percent the amount of the capitalization grant, the 
Administrator of FEMA is required to reduce the amount of the 
capitalization grant in proportion with the respective amount 
of the entity's deposit.
    New Section 205 subsection (d) requires the Administrator 
of FEMA to reserve not more than 2.5 percent of the amount 
appropriated by the legislation in order to satisfy costs FEMA 
incurred, such as: administrative costs necessary to provide 
entities with the capitalization grants; costs necessary to 
provide technical assistance to applicants; and to provide 
grants to insular areas. The subsection requires the 
Administrator of FEMA to prioritize capitalization grants to 
entities that propose projects increasing resilience and 
reducing harm to infrastructure, requiring partnerships between 
two or more entities, taking into account regional impacts, 
and/or promoting resilience of major economic sectors or 
critical national infrastructure.
    New Section 205 subsection (e) allows the Administrator of 
FEMA to delegate to participating entities the necessary 
environmental reviews that are required in order to be 
compliant for Federal projects.
    New Section 205 subsection (f) limits how entities that 
received capitalization grants can use those grants to provide 
loans and also restricts how that entity can use: the deposit 
required by the entity at the time of receiving the 
capitalization grant; any loan repayments made to the entity; 
and any interest carried on such amount. This subsection 
requires that loans an entity provides from the capitalization 
grant do not exceed an interest rate of one percent. Annual 
principal and interest payments must start no later than one 
year after the completion of projects for which the grant was 
made and must be fully paid off within twenty years, except for 
loans provided to projects in low-income geographic areas, 
which must be paid off within thirty years. In order to be 
eligible to receive a loan, this section requires that the 
recipient: establish a dedicated revenue source to repay the 
loan; have a hazard mitigation plan in place that has been 
approved by the Administrator of FEMA; and enter all payments 
made to the entity into the entity loan fund. The subsection 
limits the amount of the capitalization grant an entity can use 
towards planning to ten percent. It also limits the amount of 
the capitalization grant that an entity can use towards 
administering loans. Those amounts cannot exceed whichever of 
the following is greater: $100,000 per year; two percent of the 
capitalization grant provided to the entity in a fiscal year; 
or 1 percent of the value of the entity loan fund. In order to 
be eligible, the Administrator of FEMA must determine that a 
loan provided by the entity is not duplicative of another form 
of assistance or available program. This subsection also limits 
entities from using more than ten percent of the overall 
capitalization grant towards implementing zoning and land use 
planning changes. An entity can enable loan recipients to use 
monies towards establishing and carrying out building code 
enforcement. Under this subsection, entities are limited to 
providing an amount equal to or more than $5,000,000 towards a 
single hazard mitigation project.
    Under new Section 205 subsection (g), eligible entities 
have to annually provide the Administrator of FEMA with a plan 
identifying the intended use of the entity loan fund. That plan 
must include: integrated planning efforts; an explanation of 
what the entity wants to achieve through mitigation projects; 
information on the availability of, and application for, 
financial assistance from the entity loan fund; amount of 
financial assistance the entity intends on providing; expected 
terms of assistance provided from the entity loan fund; a 
description of the entity loan funds' overall financial status; 
and short-term and long-term goals of the fund.
    New Section 205 subsection (h) requires all participating 
entities to biennially conduct an audit of the entity loan fund 
and provide the Administrator of FEMA with a report on the 
audit and the effectiveness of the entity loan fund to address 
the respective entity's hazard mitigation goals put forth in 
their plans. The entity must publish and update information on 
projects that received funding from the entity loan fund. This 
subsection requires the Administrator of FEMA to conduct 
reviews and audits every four years to determine the 
effectiveness of the fund in reducing natural hazard risk.
    New Section 205 subsection (i) requires the Administrator 
of FEMA to issue regulations or guidance necessary to ensure 
that the entity loan funds are: being used as efficiently as 
possible; protected to the maximum extent possible from waste, 
fraud, and abuse; and used in accordance with generally 
accepted accounting standards by any party receiving funds 
directly or indirectly from the entity loan fund.
    New Section 205 subsection (j) states that FEMA shall not 
be liable for any claim based on its exercise or failure to 
exercise any discretionary function or duty in carrying out 
this new section.
    New Section 205 subsection (k) defines: the term 
``Administrator'' as the Administrator of FEMA; the term 
``Agency'' as FEMA; the term ``Eligible Entity'' as a State or 
Indian tribal government that has received a major disaster 
declaration during the five year period preceding the enactment 
of the Act; the term ``Hazard Mitigation Plan'' as a mitigation 
plan submitted under section 322 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act; the term 
``Insular Area'' as Guam, American Samoa, the Commonwealth of 
the Northern Mariana Islands, and the United States Virgin 
Islands; the term ``Low-Income Geographic Area'' as an area 
described in paragraph (1) or (2) of section 301(a) of the 
Public Works and Economic Development Act of 1965; the term 
``Participating Entity'' as an eligible entity that has entered 
an agreement created under this new section; the term 
``Repetitive Loss Structure'' as the term given under section 
1366(h) of the National Flood Insurance Act of 1968; and the 
term ``State'' as any State of the United States, the District 
of Columbia, and Puerto Rico.
    New Section 205 subsection (l) authorizes an appropriation 
of $100,000,000 for each fiscal year from fiscal year 2021 
through fiscal year 2023.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 11, 2020.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3418, the STORM Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    
    

    Bill summary: S. 3418 would authorize the appropriation of 
$100 million annually for fiscal years 2021 through 2023 for 
the Federal Emergency Management Agency (FEMA) to make grants 
to capitalize new revolving funds administered by states. From 
those revolving funds, state agencies would make low-interest 
loans to local governments to finance projects that are 
designed to mitigate damage from future disasters.
    Estimated Federal cost: The estimated budgetary effect of 
S. 3418 is shown in Table 1. The cost of the legislation falls 
within budget function 450 (community and regional 
development).

                                TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 3418
----------------------------------------------------------------------------------------------------------------
                                                           By fiscal year, millions of dollars--
                                          ----------------------------------------------------------------------
                                             2020      2021      2022      2023      2024      2025    2020-2025
----------------------------------------------------------------------------------------------------------------
                                 Increases in Spending Subject to Appropriation
 
Grants for Hazard Mitigation:
    Authorization........................         0       100       100       100         0         0        300
    Estimated Outlays....................         0         3        37        80        90        90        300
Administrative Costs:
    Estimated Authorization..............         0         1         1         2         5         5         14
    Estimated Outlays....................         0         1         1         2         5         5         14
    Total Changes:
        Estimated Authorization..........         0       101       101       102         5         5        314
        Estimated Outlays................         0         4        38        82        95        95        314
                                              Decreases in Revenues
 
Estimated Revenuesa......................         0        -1        -2        -3        -4        -5        -15
----------------------------------------------------------------------------------------------------------------
aEstimate provided by the staff of the Joint Committee on Taxation. Enacting the bill would decrease revenues by
  a total of $35 million over the 2020-2030 period.

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted in 2020 and that the authorized and 
estimated amounts will be provided beginning in 2021. Estimated 
outlays are based on historical spending patterns for similar 
programs.
    Spending subject to appropriation: CBO estimates that 
implementing S. 3418 would cost $314 million over the 2020-2025 
period, assuming appropriation of the authorized and necessary 
amounts.
    Grants for hazard mitigation: S. 3418 would authorize the 
appropriation of $100 million annually for 2021, 2022, and 2023 
for FEMA to make grants to states to capitalize new revolving 
funds. To receive assistance under the bill, states would need 
to contribute 10 percent of the amount of a federal grant to 
its revolving fund. CBO expects that states would use most of 
their revolving funds to assist local governments with 
infrastructure projects, such as projects that control 
flooding. The bill also would allow recipients to use small 
portions of assistance to develop zoning and land use plans and 
to enforce updated building codes.
    To implement the bill, CBO estimates that FEMA would need 
about 18 months to hire new employees, establish the required 
auditing and reporting processes, issue program regulations, 
and review grant applications from states. Accordingly, CBO 
expects that FEMA would gradually increase the number of grants 
it would make through 2025. Estimated outlays are based on 
historical spending patterns for similar state revolving fund 
programs administered by other federal agencies. On that basis, 
CBO estimates that implementing the grants would cost $300 
million over the 2020-2025 period.
    Administrative costs: S. 3418 would authorize FEMA to use 
up to 2.5 percent of amounts authorized by the bill, or a total 
of $7.5 million, to pay administrative costs and provide 
technical assistance to states. However, based on information 
from FEMA about the costs of administering other grant 
programs, CBO estimates that the agency would need additional 
amounts each year over the 2020-2025 period to fully implement 
the program; CBO estimates the additional amounts needed for 
administrative costs would increase over the next five years as 
FEMA provides more grants. In total, CBO estimates that FEMA 
would need an additional $14 million over the 2020-2025 period. 
Those amounts would cover the cost of 10 new staff members, 
contract support, technical assistance to states, and other 
operating costs.
    Revenues: The staff of the Joint Committee on Taxation 
(JCT) expects that states would use a portion of the 
capitalization grants to leverage additional funds by issuing 
tax-exempt bonds. JCT estimates that, as a result, S. 3418 
would reduce federal revenues by $35 million over the 2020-2030 
period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in revenues that are subject to those 
pay-as-you-go procedures are shown in Table 2.

   TABLE 2.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF S. 3418, THE STORM ACT, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON HOMELAND
                                                   SECURITY AND GOVERNMENTAL AFFAIRS ON MARCH 11, 2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2020   2021   2022   2023   2024   2025   2026   2027   2028   2029   2030  2020-2025  2020-2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Net Increase in the Deficit
 
Pay-As-You-Go Effect.................................      0      1      2      3      4      5      4      4      4      4      4        15         35
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term deficits: CBO estimates that enacting 
S. 3418 would not increase deficits by more than $5 billion in 
any of the four consecutive 10-year periods beginning in 2031.
    Mandates: None.
    Previous estimate: On February 19, 2020, CBO transmitted a 
cost estimate for H.R. 3779, the Resilience Revolving Loan Fund 
Act of 2019, which is similar to S. 3418. H.R. 3779 would 
authorize the appropriation of $200 million for grants to 
capitalize state revolving funds, whereas S. 3418 would 
authorize the appropriation of $300 million. As a result, CBO 
estimates that the cost of the grants under S. 3418 would be 
higher and JCT estimates that the reduction in revenues, which 
is related to the volume of grants provided, also would be 
greater under S. 3418.
    Estimate prepared by: Federal Costs: Jon Sperl; Mandates: 
Rachel Austin; Revenues: Staff of the Joint Committee on 
Taxation.
    Estimate reviewed by: Kim P. Cawley, Chief, Natural and 
Physical Resources Cost Estimates Unit; H. Samuel Papenfuss, 
Deputy Director of Budget Analysis; Theresa Gullo, Director of 
Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman:

ROBERT T. STAFFORD DISASTER RELIEF AND EMERGENCY ASSISTANCE ACT

           *       *       *       *       *       *       *


TITLE II--DISASTER PREPAREDNESS AND MITIGATION ACTIVITIES

           *       *       *       *       *       *       *


SEC. 205. GRANTS TO ENTITIES FOR ESTABLISHMENT OF HAZARD MITIGATION 
                    REVOLVING LOAN FUNDS.

    (a) General Authority.--
          (1) In general.--The Administrator may enter into 
        agreements with eligible entities to make 
        capitalization grants to such entities for the 
        establishment of hazard mitigation revolving loan funds 
        (referred to in this section as `entity loan funds') 
        for providing funding assistance to local governments 
        to carry out eligible projects under this section to 
        reduce disaster risk in order to decrease--
                  (A) the loss of life and property;
                  (B) the cost of insurance; and
                  (C) Federal disaster payments.
          (2) Agreements.--Any agreement entered into under 
        this section shall require the participating entity 
        to--
                  (A) comply with the requirements of this 
                section; and
                  (B) use accounting, audit, and fiscal 
                procedures conforming to generally accepted 
                accounting standards.
    (b) Application.--
          (1) In general.--To be eligible to receive a 
        capitalization grant under this section, an eligible 
        entity shall submit to the Administrator an application 
        that includes the following:
                  (A) Project proposals comprised of local 
                government hazard mitigation projects, on the 
                condition that the entity provides public 
                notice not less than 6 weeks prior to the 
                submission of an application.
                  (B) An assessment of recurring major disaster 
                vulnerabilities impacting the entity that 
                demonstrates a risk to life and property.
                  (C) A description of how the hazard 
                mitigation plan of the entity has or has not 
                taken the vulnerabilities described in 
                subparagraph (B) into account.
                  (D) A description about how the projects 
                described in subparagraph (A) could conform 
                with the hazard mitigation plan of the entity 
                and of the unit of local government.
                  (E) A proposal of the systematic and regional 
                approach to achieve resilience in a vulnerable 
                area, including impacts to river basins, river 
                corridors, watersheds, estuaries, bays, coastal 
                regions, micro-basins, micro-watersheds, 
                ecosystems, and areas at risk of earthquakes, 
                tsunamis, droughts, and wildfires.
          (2) Technical assistance.--The Administrator shall 
        provide technical assistance to eligible entities for 
        applications under this section.
    (c) Entity Loan Fund.--
          (1) Establishment of fund.--An entity that receives a 
        capitalization grant under this section shall establish 
        an entity loan fund that complies with the requirements 
        of this subsection.
          (2) Fund management.--Except as provided in paragraph 
        (3), entity loan funds shall--
                  (A) be administered by the agency responsible 
                for emergency management; and
                  (B) include only--
                          (i) funds provided by a 
                        capitalization grant under this 
                        section;
                          (ii) repayments of loans under this 
                        section to the entity loan fund; and
                          (iii) interest earned on amounts in 
                        the entity loan fund.
          (3) Administration.--A participating entity may 
        combine the financial administration of the entity loan 
        fund of such entity with the financial administration 
        of any other revolving fund established by such entity 
        if the Administrator determines that--
                  (A) the capitalization grant, entity share, 
                repayments of loans, and interest earned on 
                amounts in the entity loan fund are accounted 
                for separately from other amounts in the 
                revolving fund; and
                  (B) the authority to establish assistance 
                priorities and carry out oversight activities 
                remains in the control of the entity agency 
                responsible for emergency management.
          (4) Entity share of funds.--
                  (A) In general.--On or before the date on 
                which a participating entity receives a 
                capitalization grant under this section, the 
                entity shall deposit into the entity loan fund 
                of such entity, an amount equal to not less 
                than 10 percent of the amount of the 
                capitalization grant.
                  (B) Reduced grant.--If, with respect to a 
                capitalization grant under this section, a 
                participating entity deposits in the entity 
                loan fund of the entity an amount that is less 
                than 10 percent of the total amount of the 
                capitalization grant that the participating 
                entity would otherwise receive, the 
                Administrator shall reduce the amount of the 
                capitalization grant received by the entity to 
                the amount that is 10 times the amount so 
                deposited.
    (d) Apportionment.--
          (1) In general.--Except as otherwise provided by this 
        subsection, the Administrator shall apportion funds 
        made available to carry out this section to entities 
        that have entered into an agreement under subsection 
        (a)(2) in amounts as determined by the Administrator.
          (2) Reservation of funds.--The Administrator shall 
        reserve not more than 2.5 percent of the amount made 
        available to carry out this section for the Federal 
        Emergency Management Agency for--
                  (A) administrative costs incurred in carrying 
                out this section;
                  (B) providing technical assistance to 
                participating entities under subsection (b)(2); 
                and
                  (C) capitalization grants to insular areas 
                under paragraph (4).
          (3) Priority.--In the apportionment of capitalization 
        grants under this subsection, the Administrator shall 
        give priority to entity applications under subsection 
        (b) that--
                  (A) propose projects increasing resilience 
                and reducing risk of harm to natural and built 
                infrastructure;
                  (B) involve a partnership between 2 or more 
                eligible entities to carry out a project or 
                similar projects;
                  (C) take into account regional impacts of 
                hazards on river basins, river corridors, 
                micro-watersheds, macro-watersheds, estuaries, 
                lakes, bays, and coastal regions and areas at 
                risk of earthquakes, tsunamis, droughts, and 
                wildfires; or
                  (D) propose projects for the resilience of 
                major economic sectors or critical national 
                infrastructure, including ports, global 
                commodity supply chain assets (located within 
                an entity or within the jurisdiction of local 
                governments, insular areas, and tribal 
                governments), power and water production and 
                distribution centers, and bridges and waterways 
                essential to interstate commerce.
          (4) Insular areas.--
                  (A) Apportionment.--From any amount remaining 
                of funds reserved under paragraph (2), the 
                Administrator may enter into agreements to 
                provide capitalization grants to insular areas.
                  (B) Requirements.--An insular area receiving 
                a capitalization grant under this section shall 
                comply with the requirements of this section as 
                applied to participating entities.
    (e) Environmental Review of Revolving Loan Fund Projects.--
The Administrator may delegate to a participating entity all of 
the responsibilities for environmental review, decision making, 
and action pursuant the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.), and other applicable Federal 
environmental laws including the Endangered Species Act of 1973 
(16 U.S.C. 1531 et seq.) and the National Historic Preservation 
Act of 1966 (16 U.S.C. 470 et seq.) that would apply to the 
Administrator were the Administrator to undertake projects 
under this section as Federal projects so long as the 
participating entity carry out such responsibilities in the 
same manner and subject to the same requirements as if the 
Administrator carried out such responsibilities.
    (f) Use of Funds.--
          (1) Types of assistance.--Amounts deposited in an 
        entity loan fund, including loan repayments and 
        interest earned on such amounts, may be used--
                  (A) to make loans, on the condition that--
                          (i) such loans are made at an 
                        interest rate of not more than 1 
                        percent;
                          (ii) annual principal and interest 
                        payments will commence not later than 1 
                        year after completion of any project 
                        and all loans made under this 
                        subparagraph will be fully amortized--
                                  (I) not later than 20 years 
                                after the date on which the 
                                project is completed; or
                                  (II) for projects in a low-
                                income geographic area, not 
                                later than 30 years after the 
                                date on which the project is 
                                completed and not longer than 
                                the expected design life of the 
                                project; (iii) the loan 
                                recipient of a loan under this 
                                subparagraph establishes a 
                                dedicated source of revenue for 
                                repayment of the loan;
                          (iv) the loan recipient of a loan 
                        under this subparagraph has a hazard 
                        mitigation plan that has been approved 
                        by the Administrator; and
                          (v) the entity loan fund will be 
                        credited with all payments of principal 
                        and interest on all loans made under 
                        this subparagraph;
                  (B) for mitigation efforts, in addition to 
                mitigation planning under section 322 not to 
                exceed 10 percent of the capitalization grants 
                made to the participating entity in a fiscal 
                year;
                  (C) for the reasonable costs of administering 
                the fund and conducting activities under this 
                section, except that such amounts shall not 
                exceed $100,000 per year, 2 percent of the 
                capitalization grants made to the participating 
                entity in a fiscal year, or 1 percent of the 
                value of the entity loan fund, whichever amount 
                is greatest, plus the amount of any fees 
                collected by the entity for such purpose 
                regardless of the source; and
                  (D) to earn interest on the entity loan fund.
          (2) Prohibition on determination that loan is a 
        duplication.--In carrying out this section, the 
        Administrator may not determine that a loan is a 
        duplication of assistance or programs under this Act.
          (3) Projects and activities eligible for 
        assistance.--Except as provided in this subsection, a 
        participating entity may use funds in the entity loan 
        fund to provide financial assistance for projects or 
        activities that mitigate the impacts of natural hazards 
        including--
                  (A) drought and prolonged episodes of intense 
                heat;
                  (B) severe storms, including hurricanes, 
                tornados, wind storms, cyclones, and severe 
                winter storms;
                  (C) wildfires;
                  (D) earthquakes;
                  (E) flooding;
                  (F) shoreline erosion;
                  (G) high water levels; and
                  (H) storm surges.
          (4) Zoning and land use planning changes.--A 
        participating entity may use not more than 10 percent 
        of a capitalization grant under this section to enable 
        units of local government to implement zoning and land 
        use planning changes focused on--
                  (A) the development and improvement of zoning 
                and land use codes that incentivize and 
                encourage low-impact development, resilient 
                wildland-urban interface land management and 
                development, natural infrastructure, green 
                stormwater management, conservation areas 
                adjacent to floodplains, implementation of 
                watershed or greenway master plans, and 
                reconnection of floodplains;
                  (B) the study and creation of agricultural 
                risk compensation districts where there is a 
                desire to remove or set-back levees protecting 
                highly developed agricultural land to mitigate 
                for flooding, allowing agricultural producers 
                to receive compensation for assuming greater 
                flood risk that would alleviate flood exposure 
                to populations centers and areas with critical 
                national infrastructure;
                  (C) the study and creation of land use 
                incentives that reward developers for greater 
                reliance on low impact development stormwater 
                best management practices, exchange density 
                increases for increased open space and 
                improvement of neighborhood catch basins to 
                mitigate urban flooding, reward developers for 
                including and augmenting natural infrastructure 
                adjacent to and around building projects 
                without reliance on increased sprawl, and 
                reward developers for addressing wildfire 
                ignition; and
                  (D) the study and creation of an erosion 
                response plan that accommodates river, lake, 
                forest, plains, and ocean shoreline retreating 
                or bluff stabilization due to increased 
                flooding and disaster impacts.
          (5) Establishing and carrying out building code 
        enforcement.--A participating entity may use 
        capitalization grants under this section to enable 
        units of local government to establish and carry out 
        the latest published editions of relevant building 
        codes, specifications, and standards for the purpose of 
        protecting the health, safety, and general welfare of 
        the buildings users against disasters and natural 
        hazards.
          (6) Administrative and technical costs.--For each 
        fiscal year, a participating entity may use the amount 
        described in paragraph (1)(C) to--
                  (A) pay the reasonable costs of administering 
                the programs under this section, including the 
                cost of establishing an entity loan fund; and
                  (B) provide technical assistance to 
                recipients of financial assistance from the 
                entity loan fund, on the condition that such 
                technical assistance does not exceed 5 percent 
                of the capitalization grant made to such 
                entity.
          (7) Limitation for single projects.--A participating 
        entity may not provide an amount equal to or more than 
        $5,000,000 to a single hazard mitigation project.
    (g) Intended Use Plans.--
          (1) In general.--After providing for public comment 
        and review, and consultation with appropriate 
        government agencies of the State or Indian Tribe, 
        Federal agencies, and interest groups, each 
        participating entity shall annually prepare and submit 
        to the Administrator a plan identifying the intended 
        uses of the entity loan fund.
          (2) Contents of plan.--An entity intended use plan 
        prepared under paragraph (1) shall include--
                  (A) the integration of entity planning 
                efforts, including entity hazard mitigation 
                plans and other programs and initiatives 
                relating to mitigation of major disasters 
                carried out by such entity;
                  (B) an explanation of the mitigation and 
                resiliency benefits the entity intends to 
                achieve by--
                          (i) reducing future damage and loss 
                        associated with hazards;
                          (ii) reducing the number of severe 
                        repetitive loss structures and 
                        repetitive loss structures in the 
                        entity;
                          (iii) decreasing the number of 
                        insurance claims in the entity from 
                        injuries resulting from major disasters 
                        or other natural hazards; and
                          (iv) increasing the rating under the 
                        community rating system under section 
                        1315(b) of the National Flood Insurance 
                        Act of 1968 (42 U.S.C. 4022(b)) for 
                        communities in the entity;
                  (C) information on the availability of, and 
                application process for, financial assistance 
                from the entity loan fund of such entity;
                  (D) the criteria and methods established for 
                the distribution of funds;
                  (E) the amount of financial assistance that 
                the entity anticipates apportioning;
                  (F) the expected terms of the assistance 
                provided from the entity loan fund; and
                  (G) a description of the financial status of 
                the entity loan fund, including short-term and 
                long-term goals for the fund.
    (h) Audits, Reports, Publications, and Oversight.--
          (1) Biennial entity audit and report.--Beginning not 
        later than the last day of the second fiscal year after 
        the receipt of payments under this section, and 
        biennially thereafter, any participating entity shall--
                  (A) conduct an audit of such fund established 
                under subsection (b); and
                  (B) provide to the Administrator a report 
                including--
                          (i) the result of any such audit; and
                          (ii) a review of the effectiveness of 
                        the entity loan fund of the entity with 
                        respect to meeting the goals and 
                        intended benefits described in the 
                        intended use plan submitted by the 
                        entity under subsection (f).
          (2) Publication.--A participating entity shall 
        publish and periodically update information about all 
        projects receiving funding from the entity loan fund of 
        such entity, including--
                  (A) the location of the project;
                  (B) the type and amount of assistance 
                provided from the entity loan fund;
                  (C) the expected funding schedule; and
                  (D) the anticipated date of completion of the 
                project.
          (3) Oversight.--
                  (A) In general.--The Administrator shall, at 
                least every 4 years, conduct reviews and audits 
                as may be determined necessary or appropriate 
                by the Administrator to carry out the 
                objectives of this section and determine the 
                effectiveness of the fund in reducing natural 
                hazard risk.
                  (B) GAO requirements.--The entity shall 
                conduct audits under paragraph (1) in 
                accordance with the auditing procedures of the 
                Government Accountability Office, including 
                generally accepted government auditing 
                standards.
                  (C) Recommendations by administrator.--The 
                Administrator may at any time make 
                recommendations for or require specific changes 
                to an entity loan fund in order to improve the 
                effectiveness of the fund.
    (i) Regulations or Guidance.--The Administrator shall issue 
such regulations or guidance as are necessary to--
          (1) ensure that each participating entity uses funds 
        as efficiently as possible;
          (2) reduce waste, fraud, and abuse to the maximum 
        extent possible; and
          (3) require any party that receives funds directly or 
        indirectly under this section, including a 
        participating entity and a recipient of amounts from an 
        entity loan fund, to use procedures with respect to the 
        management of the funds that conform to generally 
        accepted accounting standards.
    (j) Liability Protections.--The Federal Emergency 
Management Agency shall not be liable for any claim based on 
the exercise or performance of, or the failure to exercise or 
perform, a discretionary function or duty by the Agency, or an 
employee of the Agency in carrying out this section.
    (k) Definitions.--In this section, the following 
definitions apply:
          (1) Administrator.--The term ``Administrator'' means 
        the Administrator of the Federal Emergency Management 
        Agency.
          (2) Agency.--The term ``Agency'' means the Federal 
        Emergency Management Agency.
          (3) Eligible entity.--The term ``eligible entity'' 
        means--
                  (A) a State; or
                  (B) an Indian tribal government that has 
                received a major disaster declaration during 
                the 5-year period ending on the date of 
                enactment of the STORM Act.
          (4) Hazard mitigation plan.--The term ``Hazard 
        mitigation plan'' means a mitigation plan submitted 
        under section 322.
          (5) Insular area.--The term ``insular area'' means 
        Guam, American Samoa, the Commonwealth of the Northern 
        Mariana Islands, and the United States Virgin Islands.
          (6) Low-income geographic area.--The term ``low-
        income geographic area'' means an area described in 
        paragraph (1) or (2) of section 301(a) of the Public 
        Works and Economic Development Act of 1965 (42 U.S.C. 
        3161(a)).
          (7) Participating entity.--The term ``participating 
        entity'' means an eligible entity that has entered into 
        an agreement under this section.
          (8) Repetitive loss structure.--The term ``repetitive 
        loss structure'' has the meaning given the term in 
        section 1370 of the National Flood Insurance Act of 
        1968 (42 U.S.C. 4121).
          (9) Severe repetitive loss structure.-- The term 
        ``severe repetitive loss structure'' has the meaning 
        given the term in section 1366(h) of the National Flood 
        Insurance Act of 1968 (42 U.S.C. 4104c(h)).
          (10) State.--The term ``State'' means any State of 
        the United States, the District of Columbia, and Puerto 
        Rico.
    (l) Authorization of Appropriations.--There are authorized 
to be appropriated $100,000,000 for each of fiscal years 2021 
through 2023 to carry out this section.

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