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110th Congress 
 2d Session                      SENATE                          Report
                                                                110-471
_______________________________________________________________________

                                     

                                                      Calendar No. 1031


     HURRICANES KATRINA AND RITA RECOVERY FACILITATION ACT OF 2008

                               __________

                              R E P O R T

                                 of the

                              COMMITTEE ON

                         HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                               H.R. 3247


TO IMPROVE THE PROVISION OF DISASTER ASSISTANCE FOR HURRICANES KATRINA 
                    AND RITA, AND FOR OTHER PURPOSES




   September 18 (legislative day September 17), 2008.--Ordered to be 
                                printed
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
                     Kevin J. Landy, Chief Counsel
                       Mary Beth Schultz, Counsel
                Donny Ray Williams Jr., Staff Director,
                Ad Hoc Subcommittee on Disaster Recovery
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                Asha A. Mathew, Minority Senior Counsel
                  Trina Driessnack Tyrer, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I.  Purpose and Summary.............................................1
 II. Background and Need..............................................1
III. Legislative History..............................................3
 IV. Section by Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................5
 VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............7


                                                      Calendar No. 1031
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-471

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



 
     HURRICANES KATRINA AND RITA RECOVERY FACILITATION ACT OF 2008

                                _______
                                

  September 18 (legislative day, September 17), 2008.--Ordered to be 
                                printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 3247]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (H.R. 3247) to improve 
the provision of disaster assistance for Hurricanes Katrina and 
Rita, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill do pass.

                         I. PURPOSE AND SUMMARY

    The purpose of this legislation is to eliminate obstacles 
which have delayed the recovery and rebuilding of areas 
impacted by Hurricanes Katrina and Rita in order to improve and 
expedite the recovery and rebuilding process.

              II. BACKGROUND AND NEED FOR THE LEGISLATION

    As the flood waters receded from Hurricanes Katrina and 
Rita, the challenge of the rebuilding effort became immediately 
evident. Hurricane Katrina, which hit the Gulf Coast on August 
29, 2005, devastated some 90,000 square miles of public 
infrastructure and destroyed thousands of homes. Hurricane Rita 
was another catastrophic storm that hit the Gulf Coast less 
than a month later, reopening levees that were under repair and 
causing significant damage to Southwestern Louisiana and Texas. 
Destruction to public buildings, roads, bridges, firehouses and 
other public infrastructure caused by these hurricanes reached 
an extraordinary level and the Gulf Coast continues to struggle 
to repair and restore this infrastructure. The Committee 
believes the recovery from Hurricanes Katrina and Rita is 
moving too slowly and is concerned that this is due, in part, 
to problems in the administration of disaster recovery programs 
under the Federal Emergency Management Agency (FEMA). The 
Committee therefore finds that legislation is needed to provide 
a more efficient and practical approach to administering 
certain aspects of FEMA's programs in order to speed the Gulf 
Coast recovery.
    Rebuilding such a large number of public structures 
requires a massive collaborative effort from state, local, and 
federal officials. The Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (the ``Stafford Act'') authorizes the 
federal government to provide assistance after a disaster in 
various forms through FEMA, which can act with the assistance 
of other federal agencies. For example, during the aftermath of 
a disaster, federal assistance can be provided such as 
supplying food and water for victims, buses to evacuate 
victims, and equipment and personnel for search and rescue 
missions. The Stafford Act also authorizes FEMA to provide 
assistance to households who suffered eligible losses or 
damages. Finally, for State and local governments, the Stafford 
Act authorizes FEMA to provide assistance to repair or replace 
public and certain non-profit infrastructure through the Public 
Assistance program.
    According to FEMA officials, as of August 2008, FEMA had 
obligated $11 billion to Alabama, Louisiana, Mississippi, and 
Texas state and local governments through the Public Assistance 
program for damages from Hurricanes Katrina and Rita. Much of 
this Public Assistance funding, however, is yet to be actually 
spent to aid in the recovery. Although the Stafford Act is 
generally flexible, parts of the Stafford Act, as well as the 
regulations and FEMA policies implementing and administering 
the Stafford Act, have proven to be inadequate to deal with 
catastrophes on the size and scale of Hurricanes Katrina and 
Rita, and have contributed to the delay in rebuilding areas 
impacted by the hurricanes and in spending the Public 
Assistance funding that has been obligated for Hurricanes 
Katrina and Rita. Thus, legislation is needed to provide a more 
efficient and practical approach to administering some FEMA 
programs for Hurricanes Katrina and Rita damages. For example, 
in many localities throughout the Gulf Coast, firehouses, 
police stations, and criminal justice facilities remain in the 
damaged conditions wrought by the storm, in part due to highly 
detailed requirements in FEMA's Public Assistance Program that 
normally serve to document each project individually. In 
addition, the requirements impose penalties against otherwise 
available Stafford Act payments if a State chooses to rebuild a 
structure differently than the previously existing structure. 
In the case of Hurricanes Katrina and Rita, where many 
communities have lost all, or nearly all of their public 
infrastructure, these detailed requirements have unreasonably 
delayed progress on rebuilding. Previously, the same 
difficulties plagued the rebuilding of schools. To address this 
problem, the Consolidated Appropriations Act for fiscal year 
2008 (Sec. 552 in P.L. 110-161) created a process to allow 
payments to be made to a group of schools, instead of one by 
one, in order to speed up the rebuilding process. That 
provision also capped the penalty for failure to obtain flood 
insurance and eliminated penalties for rebuilding structures 
differently than the previously existing structures. The bill 
as amended by the Committee applies that framework to the 
rebuilding of firehouses, police stations, and other criminal 
justice facilities.
    The legislation also opens up the process for resolving 
disputes regarding FEMA's estimates of the cost of repairing or 
replacing public buildings, infrastructure, or privately owned 
facilities. State of Louisiana officials believe that many of 
FEMA's estimates are far below the actual costs of the eligible 
damages and have appealed some of the estimates. However, 
FEMA's practice of allowing appeals to be reviewed by the same 
individuals that made the original determinations is 
problematic in some situations. This bill, as amended by 
Committee, addresses this concern by expanding the procedures 
for resolving disputes under the Public Assistance program by 
authorizing and encouraging the President to use alternative 
dispute resolution procedures to facilitate the resolution of 
appeals in a timely and fair manner.
    As a final example of measures designed to speed recovery 
in the Gulf Coast in this bill, the Committee believes that a 
measure included in the Post-Katrina Emergency Management Act 
of 2006 (the ``Post-Katrina Act''), P.L. 109-295, may prove 
useful in resolving current rental housing shortages. This 
measure, section 689i of the Post-Katrina Act, authorized the 
President to provide for the reconstruction or renovation of 
certain rental property to house individuals displaced by 
disasters. Nearly three years after Hurricanes Katrina and Rita 
made landfall, even though a housing shortfall remains in many 
places along the Gulf Coast, empty, damaged rental properties 
can be found in the Gulf Coast region. This bill as amended by 
the Committee therefore extends Section 689i to FEMA's 
administration of recovery programs for Hurricanes Katrina and 
Rita.
    The examples mentioned above are just a few of the measures 
the Committee has included in the bill as amended by Committee 
in order to speed the recovery of the Gulf Coast.

                        III. LEGISLATIVE HISTORY

    H.R. 3247 was introduced in the U.S. House of 
Representatives by Delegate Eleanor Holmes Norton on July 31, 
2007. The bill was referred to the House Committee on 
Transportation and Infrastructure, Subcommittee on Economic 
Development, Public Buildings and Emergency Management, and was 
voted to be reported out favorably by voice vote from the 
Subcommittee to the Full Committee on August 1, 2007. It was 
reported out of the House Transportation and Infrastructure 
Full Committee favorably on October 18, 2007 and passed the 
House of Representatives by suspension of the rules on October 
29, 2007.
    In the Senate, the House bill was referred to the Committee 
on Homeland Security and Governmental Affairs. At the 
Committee's April 10, 2008 business meeting, Senator Landrieu 
offered a substitute amendment to H.R. 3247, which omitted some 
provisions included in the House bill, maintained, and in some 
cases modified, some other House provisions, and added three 
new provisions.
    The three new provisions in the Landrieu substitute 
amendment included provisions which authorized use of the 
following in the recovery from Hurricanes Katrina and Rita: (1) 
provisions to expedite reconstruction of fire stations, police 
stations, and criminal justice facilities; (2) case management 
services authorized in the Post-Katrina Act; and (3) a pilot 
program that funds repairs for certain rental units authorized 
in the Post-Katrina Act. The Landrieu substitute included 
modified versions of provisions included in H.R. 3247 which 
authorized use of the following in the recovery from Hurricanes 
Katrina and Rita: (1) increasing the federal in-lieu 
contribution from 75% to 90% for the cost of rebuilding a 
facility that will be replaced instead of repaired; (2) 
simplified procedures for certain Stafford Act projects if the 
federal estimate of costs is less than $100,000; and (3) 
temporary housing units for volunteers.
    The Landrieu substitute amendment omitted some provisions 
that were included in H.R. 3247 to reflect both the changing 
needs of the Gulf Coast recovery since the passage of the House 
bill and the need for compromise as there was significant 
opposition to certain provisions. The omitted provisions 
included authorization of use of the following in the recovery 
from Hurricanes Katrina and Rita: (1) the public assistance 
pilot project authorized in the Post-Katrina Act; (2) 
provisions related to the reimbursement to several different 
for-profit entities for lost profits associated with the 
aftermath of Hurricanes Katrina and Rita, as well as other 
related costs; and (3) use of Community Development Block Grant 
(CDBG) funds to count towards the 25% state cost share for 
eligible Hazard Mitigation Grant (HMGP) Program projects.
    Members adopted the Landrieu substitute to the House bill 
by a roll call vote of 13 yeas and 3 nays and favorably 
reported the bill by a roll call vote of 8 yeas and 2 nays.

H.R. 3247, Hurricanes Katrina and Rita Recovery Facilitation Act of 
        2007

    Results: Ordered reported favorably by roll call vote of 8 
yeas and 2 nays (no instruction from Obama) as amended by the 
Landrieu Substitute Amendment.
    Yeas: Lieberman, Levin, Akaka, Carper, Landrieu, McCaskill, 
Tester, Collins.
    Nays: Voinovich, Sununu.
    Yeas by Proxy: Pryor, Stevens, Coleman, Domenici, Warner.
    Nays by Proxy: Coburn.

A. Landrieu Substitute Amendment to H.R. 3247

    Results: Adopted by roll call vote of 13 yeas and 3 nays 
(no instruction from Obama).
    Yeas: Lieberman, Levin, Akaka, Carper, Landrieu, McCaskill, 
Tester, Collins.
    Nays: Voinovich, Sununu.
    Yeas by Proxy: Pryor, Stevens, Coleman, Domenici, Warner.
    Nays by Proxy: Coburn.

                    IV. SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    This section of the bill states that the short title of the 
Act is the ``Hurricanes Katrina and Rita Recovery Facilitation 
Act of 2008''.

Section 2. Definitions

    This section of the bill defines the following terms: 
``Covered Hurricane Damages'', ``Major Disaster'', 
``President'' and ``Stafford Act''.

Section 3. Special rules for covered hurricane damages

    This section authorizes use of the following for Hurricane 
Katrina and Rita-related recovery:
    Subsection (a) increases the federal in-lieu contribution 
from 75% to 90% for the cost of rebuilding a facility that will 
be replaced instead of repaired.
    Subsection (b) authorizes use of a pilot program included 
in the Post-Katrina Act through which the President can provide 
for the renovation or reconstruction of certain rental 
properties used to house individuals displaced by disasters.
    Subsection (c) authorizes and encourages the FEMA 
Administrator to use alternative dispute resolution procedures 
to facilitate the review of appeals of certain Stafford Act 
Public Assistance project decisions. The provision also 
requires FEMA to submit a report to Congress on use of 
alternative dispute resolution.
    Subsection (d) expands the use of simplified procedures for 
the administration of certain Stafford Act projects where the 
estimates for the cost of the project is less than $100,000, an 
increase from the current limit of $55,000.
    Subsection (e) authorizes the FEMA Administrator in some 
instances to provide temporary housing units for volunteers 
assisting in the recovery from Hurricanes Katrina and Rita.
    Subsection (f) requires FEMA to report in 180 days on the 
status of the recovery from Hurricanes Katrina and Rita in 
Louisiana and Mississippi.

Section 4. Public assistance program

    This section requires the President to provide a single 
payment for any eligible costs under section 406 of the 
Stafford Act for police stations, firehouses, and criminal 
justice facilities. It eliminates alternate project penalties 
and limits flood insurance deductions to $1 million per 
facility type for which a local government is receiving 
assistance.

Section 5. Case management

    This section authorizes use of case management services 
authorized in the Post-Katrina Act.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirement of paragraph 11(b)(1) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. CBO states that 
the bill contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.

                   VI. ESTIMATED COST OF LEGISLATION

                                                      May 15, 2008.
Hon. Joseph I. Lieberman,
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 H.R. 3247, the 
Hurricane Katrina and Rita Recovery Facilitation Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 3247--Hurricanes Katrina and Rita Recovery Facilitation Act of 
        2008

    H.R. 3247 would authorize the Federal Emergency Management 
Agency (FEMA) to increase the amount of assistance provided to 
certain areas affected by Hurricanes Katrina and Rita. Funding 
for the additional assistance made available by H.R. 3247 would 
come from funds already appropriated to the Disaster Relief 
Fund (DRF) for Hurricanes Katrina and Rita. As of April 2008, 
$40 billion had been allocated for the two hurricanes, of which 
about $8.4 billion remained unspent, CBO estimates. We expect 
that enacting H.R. 3247 could lead to some reallocation of 
existing funds in the DRF but that the rate of spending of such 
balances would not change significantly. Because CBO does not 
expect that the proposed changes would have a significant 
effect on the pace of federal expenditures from the DRF, we 
estimate that enacting H.R. 3247 would have no significant 
effect on direct spending. Enacting the bill would not affect 
revenues.
    H.R. 3247 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    Under current law, Gulf Coast states are eligible to 
receive from FEMA 100 percent of the funds needed to repair or 
replace public infrastructure damaged by the 2005 hurricanes. 
If, however, the affected areas choose to relocate such 
buildings or other structures, the federal cost share falls to 
75 percent. H.R. 3247 would increase the federal cost share to 
100 percent for relocated fire and police stations and criminal 
justice facilities, and to 90 percent for all other relocated 
infrastructure projects. In addition, FEMA would be prohibited 
from reducing the amount of public assistance provided for such 
facilities that were not adequately covered by flood insurance 
at the time of the disaster. (Current law requires FEMA to 
reduce the federal cost share by an amount equal to the value 
of the facility on the date of damage, or the proceeds the 
facility would have received from the National Flood Insurance 
Program, whichever is less.)
    Allowing states to receive a higher portion of their 
reconstruction costs from the federal government could 
accelerate the expenditure of previously appropriated funds, 
which would increase direct spending. Based on information from 
FEMA, CBO estimates that this legislation would affect a 
handful of projects that have applied to the agency for 
assistance. Other factors affecting the speed of reconstruction 
projects (for example, the supply and demand of contractors and 
construction supplies), however, would remain unchanged. As 
such, CBO estimates that increasing the federal cost share of 
those projects would not significantly affect the overall pace 
of expenditures from the DRF--resulting in no estimated effect 
on direct spending.
    H.R. 3247 also would extend the pilot program for 
individual and household assistance established under the 
Department of Homeland Security Appropriations Act, 2007 
(Public Law 109-295), to include areas affected by the 2005 
hurricanes. To date, FEMA has not created such a program under 
the authority granted by the 2007 law for any disaster area. If 
a pilot program is implemented in the near future, CBO 
estimates that expanding its eligibility under this legislation 
would have no significant effect on the pace of federal 
expenditures as the authority to operate the pilot program 
would expire in December 2008.
    On September 24, 2007, CBO transmitted a cost estimate for 
H.R. 3247, the Hurricanes Katrina and Rita Recovery 
Facilitation Act of 2007, as ordered reported by the House 
Committee on Transportation and Infrastructure on August 2, 
2007. That version of H.R. 3247 would authorize some different 
types of assistance for areas affected by the 2005 hurricanes. 
However, CBO estimates that both versions of the legislation 
would have no significant effect on the pace of federal 
expenditures.
    Estimate approved by Peter H. Fontaine, Assistant Director 
for Budget Analysis.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    Because this legislation would not repeal or amend any 
provision of current law, it would make no changes in existing 
law within the meaning of clauses (a) and (b) of paragraph 12 
of rule XXVI of the Standing Rules of the Senate.