[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\
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\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.
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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.
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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\
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\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.
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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\
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\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).
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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\
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\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.
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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\
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\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.
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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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