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115th Congress    }                                 {   Rept. 115-1107
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                 {           Part 1

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



 
                REFORMING DISASTER RECOVERY ACT OF 2018

                                _______
                                

               December 22, 2018.--Ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4557]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4557) to authorize the Secretary of Housing and 
Urban Development to provide disaster assistance to States and 
units of general government under a community development block 
grant disaster recovery program, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Reforming Disaster Recovery Act of 
2018''.

SEC. 2. COMMUNITY DEVELOPMENT BLOCK GRANT DISASTER RECOVERY PROGRAM.

  (a) In General.--Title I of the Housing and Community Development Act 
of 1974 (42 U.S.C. 5301 et seq.) is amended by adding at the end the 
following new section:

``SEC. 123. CDBG-DISASTER RECOVERY ASSISTANCE.

  ``(a) Authority; Use.--The Secretary may provide assistance under 
this section to States, units of general local government, and Indian 
tribes for necessary expenses for activities authorized under this 
title related to disaster relief, resiliency, long-term recovery, 
restoration of infrastructure and housing, mitigation, and economic 
revitalization in the most impacted and distressed areas resulting from 
a major disaster declared pursuant to the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
  ``(b) Timing.--
          ``(1) Deadlines for allocation of amounts.--Except as 
        provided in paragraph (2), after the enactment of an Act making 
        funds available for assistance under this section, the 
        Secretary shall allocate for grantees, based on the best 
        available data--
                  ``(A) not less than one-third of funds provided for 
                assistance under this section, within 60 days of the 
                date of the enactment of such Act; and
                  ``(B) all remaining unallocated funds to be provided 
                to grantees, within 180 days of such date of enactment.
          ``(2) Inapplicability of deadlines based on insufficient 
        information.--The deadlines under paragraph (1) for allocation 
        of funds shall not apply in the case of funds made available 
        for assistance under this section if Federal Emergency 
        Management Agency has not made sufficient information available 
        to the Secretary regarding relevant unmet recovery to make 
        allocations in accordance with such deadlines.
          ``(3) Disbursement of amounts.--Subject to subsection (c)(1), 
        the Secretary shall provide for the disbursement of the amounts 
        allocated for a grantee over time in accordance with 
        obligations of the grantee, but shall require the grantee to be 
        in substantial compliance with the requirements of this section 
        before each such disbursement.
          ``(4) Coordination of disaster benefits and data with other 
        federal agencies.--
                  ``(A) Coordination of data.--The Secretary shall 
                coordinate with other agencies to obtain data on 
                recovery needs. The Administrator of the Federal 
                Emergency Management Agency and the Administrator of 
                the Small Business Administration shall share data with 
                the Secretary to coordinate disaster benefits.
                  ``(B) Coordination with fema.--The Secretary and the 
                Administrator of the Federal Emergency Management 
                Agency shall share with each other, and make publicly 
                available, all data collected or analyzed during the 
                course of a disaster recovery for which assistance is 
                provided under this section, including--
                          ``(i) all data on damage caused by the 
                        disaster;
                          ``(ii) information on how any Federal 
                        assistance provided in connection with the 
                        disaster is expended;
                          ``(iii) information regarding the effect of 
                        the disaster on education, transportation 
                        capabilities and dependence, housing needs and 
                        displacement.
                  ``(C) Prohibition and requirements regarding small 
                business administration loans.--
                          ``(i) Prohibition.--Funds made available for 
                        use under this section may not be used to repay 
                        Small Business Administration loans.
                          ``(ii) Family eligibility.-- Any family 
                        having an income exceeding 120 percent of the 
                        area median income shall not be eligible for 
                        assistance provided from funds made available 
                        for use under this section unless (i) the 
                        family has applied for a Small Business 
                        Administration loan for such purpose and has 
                        agreed that if such a loan is made that it will 
                        use the proceeds of such loan in lieu of 
                        assistance from funds made available for use 
                        under this section, or (ii) such loans are not 
                        available at the time of application for 
                        assistance from funds made available for use 
                        under this section; except that the Secretary 
                        may establish income ceilings higher or lower 
                        than 120 percent of the median for the area on 
                        the basis of the Secretary's findings that such 
                        variations are necessary because of unusually 
                        high or low family incomes.
                  ``(D) Notice to sba applicants.--The Secretary shall 
                consult and coordinate with the Administrator of the 
                Small Business Administration as necessary to ensure 
                that applicants for Small Business Administration 
                disaster loans are provided clear written notice 
                regarding their potential eligibility for assistance 
                with funds made available under this section and the 
                affect of such Small Business Administration loans on 
                such eligibility.
                  ``(E) Treatment of duplicative benefits.--In any case 
                in which a grantee provides assistance that duplicates 
                benefits available to a person for the same purpose 
                from another source, the grantee shall collect any 
                duplicative assistance that it provides and return the 
                amount of duplicative assistance to the grantees funds 
                available for use under this section, or to the 
                Secretary, or be subject to remedies for noncompliance 
                under section 111, unless the Secretary issues a public 
                determination that it is not in the best interest of 
                the Federal Government to pursue such remedies.
                  ``(F) Protection of personally identifiable 
                information.--In carrying out this paragraph, the 
                Secretary shall take such actions as may be necessary 
                to ensure that personally identifiable information 
                regarding recipients of assistance provided from funds 
                made available under this section is not made publicly 
                available by the Department of Housing and Urban 
                Development or any agency with which information is 
                shared pursuant to this paragraph.
  ``(c) Plan for Use of Assistance.--
          ``(1) Requirement.--Not later than 120 days after the 
        allocation pursuant to subsection (b)(1)(B) of the funds made 
        available by an appropriations Act for assistance under this 
        section and before the Secretary obligates any of such funds 
        for a grantee, the grantee shall submit a plan to the Secretary 
        for approval detailing the proposed use of all funds, which 
        shall include, at a minimum--
                  ``(A) criteria for eligibility and a description of 
                how the use of such funds will address disaster relief, 
                resiliency, long-term recovery and restoration of 
                infrastructure and housing, and mitigation and economic 
                revitalization in the most impacted and distressed 
                areas;
                  ``(B) identification of officials and offices 
                responsible for administering such funds and 
                identifying and recovering duplicate benefits;
                  ``(C) an agreement to share data with Federal 
                agencies and other providers of disaster relief, which 
                shall include information the grantee has regarding the 
                matters described in subparagraph (B); and
                  ``(D) a plan for ensuring compliance with the Fair 
                Housing Act, which may include providing for 
                partnerships with local fair housing organizations and 
                funding set-aside for local fair housing organizations 
                to handle complaints relating to assistance with 
                amounts made available for use under this section.
          ``(2) Approval.--The Secretary shall, by regulation, specify 
        criteria for approval of plans under paragraph (1), including 
        approval of substantial amendments to such plans.
          ``(3) Disapproval.--The Secretary shall disapprove a plan or 
        substantial amendment to a plan if--
                  ``(A) the Secretary determines that a plan or 
                substantial amendment does not meet the approval 
                criteria;
                  ``(B) the Secretary determines, based on damage and 
                unmet needs assessments of the Secretary and the 
                Federal Emergency Management Administration or such 
                other information as may be available, that the plan or 
                amendment does not provide for equitable allocation of 
                resources--
                          ``(i) between infrastructure and housing 
                        projects; or
                          ``(ii) between homeowners, renters, and 
                        persons experiencing homelessness;
                  ``(C) the Secretary determines that the plan does not 
                provide a credible plan for ensuring compliance with 
                the Fair Housing Act; or
                  ``(D) the Secretary determines that the plan does not 
                prioritize the one-for-one replacement of public 
                housing and other federally subsidized housing that 
                provides affordable housing for the lowest income 
                households.
          ``(4) Resubmission.--The Secretary shall permit a grantee to 
        revise and resubmit disapproved plans.
          ``(5) Timing.--The Secretary shall approve or disapprove a 
        plan not later than 120 days after submission of the plan to 
        the Secretary.
  ``(d) Financial Controls.--
          ``(1) Compliance system.--The Secretary shall develop and 
        maintain a system to ensure that each grantee has in place--
                  ``(A) proficient financial controls and procurement 
                processes;
                  ``(B) adequate procedures to ensure that all eligible 
                families and individuals are approved for assistance 
                with amounts made available under this section and that 
                recipients are provided the full amount of assistance 
                for which they are eligible;
                  ``(C) adequate procedures to prevent any duplication 
                of benefits, as defined by section 312 of the Robert T. 
                Stafford Disaster Relief and Emergency Assistance Act 
                (42 U.S.C. 5155), to ensure timely expenditure of 
                funds, and to detect and prevent waste, fraud, and 
                abuse of funds; and
                  ``(D) adequate procedure to ensure the grantee will 
                maintain comprehensive and publicly accessible websites 
                that make available information regarding all disaster 
                recovery activities assisted with such funds, which 
                information shall include--
                          ``(i) full and unredacted copies of all 
                        requests for qualification for assistance or 
                        for procurement with such funds, however 
                        styled;
                          ``(ii) all responses to such requests;
                          ``(iii) the identity of any individual or 
                        entity that reviews, evaluates, scores, or 
                        otherwise influences or determines the 
                        disposition of such requests;
                          ``(iv) all reports, however styled, 
                        containing the reviewing individual or entity's 
                        scores, findings; and conclusions regarding 
                        such requests; and
                          ``(v) any resulting contract, agreement, or 
                        other disposition of such requests;
                except that such procedures shall ensure that 
                personally identifiable information regarding 
                recipients of assistance provided from funds made 
                available under this section shall not be made 
                publically available.
          ``(2) Certification.--As a condition of making any grant, the 
        Secretary shall certify in advance that the grantee has in 
        place the processes and procedures required under subparagraphs 
        (A) and (B) of paragraph (1).
  ``(e) Use of Funds.--
          ``(1) Administrative costs.--
                  ``(A) In general.--A State, unit of general local 
                government, or Indian tribe receiving a grant under 
                this section may use not more than 10 percent of the 
                amount of grant funds received, or not more than such 
                other percentage as may be established pursuant to 
                subparagraph (B), for administrative costs and shall 
                document the use of funds for such purpose in 
                accordance with such requirements as the Secretary 
                shall establish.
                  ``(B) Discretion to establish sliding scale.--The 
                Secretary may establish a series of percentage 
                limitations on the amount of grant funds received that 
                may be used by a grantee for administrative costs, but 
                only if--
                          ``(i) such percentage limitations are based 
                        on the amount of grant funds received by a 
                        grantee;
                          ``(ii) such series provides that the 
                        percentage that may be so used is lower for 
                        grantees receiving a greater amount of grant 
                        funds and such percentage that may be so used 
                        is higher for grantees receiving a lesser 
                        amount of grant funds; and
                          ``(iii) in no case may a grantee so use more 
                        than 10 percent of grant funds received.
          ``(2) Limitation on use.--Amounts from a grant under this 
        section may not be used for activities reimbursable by, or for 
        which funds are made available by--
                  ``(A) the Federal Emergency Management Agency, 
                including under the Robert T. Stafford Disaster Relief 
                and Emergency Assistance Act or the National Flood 
                Insurance Program; or
                  ``(B) the Army Corps of Engineers.
          ``(3) HUD administrative costs.--
                  ``(A) Limitation.--Of any funds made available for 
                use under this section by any single appropriations 
                Act, the Secretary may use 0.5 percent of any such 
                amount exceeding $1,000,000,000 for necessary costs, 
                including information technology costs, of 
                administering and overseeing the obligation and 
                expenditure of amounts made available for use under 
                this section.
                  ``(B) Transfer of funds.--Any amounts made available 
                for use in accordance with subparagraph (A) shall--
                          ``(i) be transferred to the account for 
                        `Program Office Salaries and Expenses--
                        Community Planning and Development' for the 
                        Department;
                          ``(ii) shall remain available until expended; 
                        and
                          ``(iii) may be used for such administrative 
                        costs for administering any funds appropriated 
                        to the Department for any disaster and related 
                        purposes in any prior or future Act making 
                        funds available for use under this section, 
                        notwithstanding the disaster for which such 
                        funds were appropriated.
          ``(4) Inspector general.--Of any funds made available for use 
        in accordance with paragraph (3)(A), 10 percent shall be 
        transferred to the Office of the Inspector General for 
        necessary costs of audits, reviews, oversight, evaluation, and 
        investigations relating to amounts made available for use under 
        this section.
          ``(5) Capacity building.--Of any funds made available for use 
        under this section, not more than 0.1 percent or $15,000,000, 
        whichever is less, shall be made available for capacity 
        building and technical assistance, including assistance 
        regarding contracting and procurement processes, to support 
        grantees and subgrantees receiving funds under this section.
          ``(6) Compliance with storm water protections.--The Secretary 
        shall provide that no funds made available under this section 
        may be used for construction, repair, or rehabilitation of any 
        infrastructure unless the infrastructure assisted complies with 
        any minimum standards for protection from floods and 
        stormwaters, including the Federal Flood Risk Management 
        Standards of the Federal Emergency Management Agency.
          ``(7) Flood risk mitigation.--
                  ``(A) Requirements.--Subject to subparagraph (B), the 
                Secretary shall require that any structure that is 
                located in an area having special flood hazards and 
                that is newly constructed, for which substantial damage 
                is repaired, or that is substantially improved, using 
                amounts made available under this section, shall be 
                elevated with the lowest floor, including the basement, 
                at least two feet above the base flood level.
                  ``(B) Multifamily housing.--In the case of structures 
                consisting of multifamily housing, the Secretary, in 
                consultation with the Administrator of the Federal 
                Emergency Management Agency, shall provide for 
                alternative forms of mitigation (in addition to 
                elevation) and shall exempt from the requirement under 
                subparagraph (A) any such structure that meets the 
                standards for such an alternative form of mitigation.
                  ``(C) Definitions.--For purposes of subparagraph (A), 
                the terms `area having special flood hazards', `newly 
                constructed', `substantial damage', `substantial 
                improvement', and `base flood level' have the same 
                meanings as under the Flood Disaster Protection Act of 
                1973 and the National Flood Insurance Act of 1968 (42 
                U.S.C. 4001 et seq.).
  ``(f) Administration.--In administering any amounts made available 
for assistance under this section, the Secretary--
          ``(1) may not allow a grantee to use any such amounts for any 
        purpose other than the purpose approved by the Secretary in the 
        plan submitted under subsection (c)(1) to the Secretary for use 
        of such amounts;
          ``(2) may not permit a grantee to amend a plan to 
        retroactively approve a beneficiary's use of funds for an 
        eligible activity other than an activity for which the funds 
        were originally approved in the plan; and
          ``(3) shall prohibit a grantee from delegating, by contract 
        or otherwise, the responsibility for inherent government 
        functions.
  ``(g) Training for Grant Management for Subgrantees.--The Secretary 
shall require each grantee to provide ongoing training to all staff and 
subgrantees.
  ``(h) Procurement Processes and Procedures for States.--
          ``(1) State processes and procedures.--In procuring property 
        or services to be paid for in whole or in part with amounts 
        from a grant under this section, a State shall--
                  ``(A) follow its own procurement processes and 
                procedures, but only if the Secretary makes a 
                determination that such processes and procedures comply 
                with the requirements under paragraph (2); or
                  ``(B) comply with such processes and procedures as 
                the Secretary shall, by regulation, establish for 
                purposes of this section.
          ``(2) Requirements.--The requirements under this paragraph 
        with respect to the procurement processes and procedures of a 
        State are that such processes and procedures shall--
                  ``(A) provide for full and open competition and 
                require cost or price analysis;
                  ``(B) include requirements for procurement policies 
                and procedures for subgrantees, based on full and open 
                competition;
                  ``(C) specify methods of procurement and their 
                applicability, but not allow for cost-plus-a-
                percentage-of cost or percentage-of-construction-cost 
                methods of procurement;
                  ``(D) include standards of conduct governing 
                employees engaged in the award or administration of 
                contracts;
                  ``(E) ensure that all purchase orders and contracts 
                include any clauses required by Federal Statute, 
                Executive Order, or implementing regulation.
          ``(3) Noncompliance.--In the case of a State for which the 
        Secretary finds pursuant to paragraph (1)(A) that its 
        procurement processes and procedures do not comply with 
        paragraph (2), the Secretary shall--
                  ``(A) provide the State with specific written notice 
                of the elements of noncompliance and the changes 
                necessary to such processes and procedures to provide 
                for compliance;
                  ``(B) provide the State a reasonable period of time 
                to come into compliance; and
                  ``(C) during such period allow the State to proceed 
                with procuring property and services paid for in whole 
                or in part with amounts from a grant under this section 
                in compliance with the procurement processes and 
                procedures of the State, but only if the Secretary 
                determines the State is making a good faith effort to 
                effectuate compliance with the requirements of 
                paragraph (2).
  ``(i) Treatment of CDBG Allocations.--Amounts made available for use 
under this section shall not be considered relevant to the non-disaster 
formula allocations made pursuant to section 106 of this title (42 
U.S.C. 5306).
  ``(j) Waivers.--
          ``(1) Authority.--Subject to the other provisions of this 
        section, in administering amounts made available for use under 
        this section, the Secretary may waive, or specify alternative 
        requirements for, any provision of any statute or regulation 
        that the Secretary administers in connection with the 
        obligation by the Secretary or the use by the recipient of such 
        funds (except for requirements related to fair housing, 
        nondiscrimination, labor standards, and the environment and 
        except for the requirements of this section), if the Secretary 
        makes a public finding that good cause exists for the waiver or 
        alternative requirement and such waiver or alternative 
        requirement would not be inconsistent with the overall purpose 
        of this title.
          ``(2) Notice and publication.--Any waiver of or alternative 
        requirement pursuant to paragraph (1) shall not take effect 
        before the expiration of the 5-day period beginning upon the 
        publication of notice in the Federal Register of such waiver or 
        alternative requirement.
          ``(3) Low- and moderate-income use.--A waiver pursuant to 
        paragraph (1) may not reduce the percentage of funds that must 
        be used for activities that benefit persons of low and moderate 
        income to less than 70 percent, unless the Secretary 
        specifically finds that there is compelling need to further 
        reduce the percentage requirement.
          ``(4) Prohibition.--The Secretary may not waive any provision 
        of this section pursuant to the authority under paragraph (1).
  ``(k) Environmental Review.--
          ``(1) Adoption.--Notwithstanding subsection (j)(1), 
        recipients of funds provided under this section that use such 
        funds to supplement Federal assistance provided under section 
        402, 403, 404, 406, 407, 408(c)(4), 428, or 502 of the Robert 
        T. Stafford Disaster Relief and Emergency Assistance Act (42 
        U.S.C. 5121 et seq.) may adopt, without review or public 
        comment, any environmental review, approval, or permit 
        performed by a Federal agency, and such adoption shall satisfy 
        the responsibilities of the recipient with respect to such 
        environmental review, approval, or permit under section 
        104(g)(1) of this title (42 U.S.C. 5304(g)(1)).
          ``(2) Release of funds.--Notwithstanding section 104(g)(2) of 
        this title (42 U.S.C. 5304(g)(2)), the Secretary may, upon 
        receipt of a request for release of funds and certification, 
        immediately approve the release of funds for an activity or 
        project assisted with amounts made available for use under this 
        section if the recipient has adopted an environmental review, 
        approval or permit under paragraph (1) or the activity or 
        project is categorically excluded from review under the 
        National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
        seq.).
  ``(l) Collection of Information; Audits and Oversight.--
          ``(1) Collection of information.--For each major disaster for 
        which assistance is made available under this section, the 
        Secretary shall collect information regarding all recovery 
        efforts so assisted and shall make such information available 
        to the public and to the Inspector General for the Department 
        of Housing and Urban Development, and shall report to the 
        Congress regarding such efforts. Information collected and 
        reported shall be disaggregated by race, geography, and all 
        protected classes of individuals under the Robert T. Stafford 
        Disaster Relief and Emergency Assistance Act, the Americans 
        with Disabilities Act of 1990, the Fair Housing Act, the Civil 
        Rights Act of 1964, and other civil rights and 
        nondiscrimination protections. In carrying out this paragraph, 
        the Secretary shall take such actions as may be necessary to 
        ensure that personally identifiable information regarding 
        recipients of assistance provided from funds made available 
        under this section shall not made publicly available.
          ``(2) Audits and oversight.--In conducting audits, reviews, 
        oversight, evaluation, and investigations, in addition to 
        activities designed to prevent and detect waste, fraud, and 
        abuse, the Inspector General shall review programs of grantees 
        under this section for providing disaster relief and recovery 
        assistance to ensure such programs fulfill their purposes and 
        serve all eligible applicants for disaster relief or recovery 
        assistance.
  ``(m) Pre-certification for Units of General Local Government.--
          ``(1) In general.--The Secretary shall carry out a program 
        under this subsection to provide for units of general local 
        government to pre-certify as eligible grantees for assistance 
        under this section.
          ``(2) Requirements.--To be eligible for pre-certification 
        under the program under this subsection a unit of general local 
        government shall--
                  ``(A) demonstrate to the satisfaction of the 
                Secretary compliance with the requirements of this 
                section; and
                  ``(B) have previously received assistance as a 
                grantee or subgrantee under this section, or with 
                amounts made available for the Community Development 
                Block Grant--Disaster Recovery account, in connection 
                with two or more major disasters declared pursuant to 
                the Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5121 et seq.).
          ``(3) Duration.--Pre-certification under the program under 
        this subsection shall be effective for a term of 10 years.
  ``(n) Deposit of Unused Amounts in Fund.--
          ``(1) In general.--If any amounts made available for 
        assistance under this section to grantees remain unexpended 
        upon the earlier of--
                  ``(A) the date that the grantee of such amounts 
                notifies the Secretary that the grantee has completed 
                all activities identified in the grantee's plan for use 
                of such amounts that was approved by the Secretary in 
                connection with such grant; or
                  ``(B) the expiration of the 6-year period beginning 
                upon the Secretary obligating such amounts to the 
                grantee, as such period may be extended pursuant to 
                paragraph (2),
        the Secretary shall transfer such unexpended amounts to the 
        Secretary of the Treasury for deposit into the Community 
        Development Block Grant Disaster Recovery Reserve Fund 
        established under section 124, except that the Secretary may, 
        by regulation, permit the grantee to retain amounts needed to 
        close out the grant.
          ``(2) Extension of period for use of funds.--The period under 
        paragraph (1)(B) shall be extended by not more than 3 years if, 
        before the expiration of such 6-year period, the Director of 
        the Office of Management and Budget, upon a request by the 
        Secretary, waives this requirement and submits a written 
        justification for such waiver to the Committees on 
        Appropriations of the House of Representatives and the Senate 
        that specifies the period of such extension.

``SEC. 124. COMMUNITY DEVELOPMENT BLOCK GRANT DISASTER RECOVERY RESERVE 
                    FUND.

  ``(a) Establishment.--There is established in the Treasury of the 
United States an account to be known as the Community Development Block 
Grant Disaster Recovery Reserve Fund (in this section referred to as 
the `Fund').
  ``(b) Amounts.--The Fund shall consist of any amounts appropriated to 
or deposited into the Fund, including amounts deposited into the Fund 
pursuant to section 123(n).
  ``(c) Use.--Amounts in the Fund shall be available only for providing 
assistance under section 123, but only to the extent provided in 
advance in appropriations Acts.''.
  (b) Regulations.--Not later than the expiration of the 12-month 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall issue regulations to 
carry out sections 123 and 124 of the Housing and Community Development 
Act of 1974, as added by the amendment made by subsection (a) of this 
section.

                          Purpose and Summary

    On December 5, 2017, Rep. Ann Wagner introduced H.R. 4557, 
the ``Reforming Disaster Recovery Act of 2017,'' which 
authorizes the Department of Housing and Urban Development's 
(HUD) Community Development Block Grant Disaster Recovery 
(CDBG-DR) program. The Amendment in the Nature of a Substitute 
changed the bill to the ``Reforming Disaster Recovery Act of 
2018'' and would amend Title I of the Housing and Community 
Development Act of 1974 to establish guidance and standards on 
how disaster funds may be distributed and accounted if Congress 
were to appropriate those funds to be distributed to states and 
localities.

                  Background and Need for Legislation

    In addition to insurance payments made through the National 
Flood Insurance Program (``NFIP'') and other federal assistance 
that may be automatically triggered with a disaster 
declaration, individuals in Presidentially-declared disaster 
areas may also access supplemental federal assistance that is 
not automatically triggered by such declarations. Since 2001, 
in some instances that are perceived as catastrophic events, 
Congress has opted to provide additional resources to states 
and local governments through the Department of Housing and 
Urban Development (``HUD'') and its Community Development Block 
Grant Disaster Recovery Program (``CDBG-DR'').
    The CDBG-DR program is not a formal program. A disaster 
does not automatically trigger the release of funds. Instead, 
Congress has occasionally addressed unmet disaster needs by 
providing supplemental disaster-related appropriations on an ad 
hoc basis outside of the Federal Emergency Management Agency 
(``FEMA'') through HUD's general CDBG program under the rubric 
of CDBG-DR. Consequently, CDBG-DR is not provided for all major 
disasters declared under the Stafford Act, but only provided by 
a specific Congressional appropriation.
    The stated purpose of the CDBG-DR program is to start the 
recovery process and assist communities and neighborhoods with 
limited resources. Eligible grantees include states, units of 
local government, Indian tribes, and other areas designated by 
the President as disaster areas. Generally, CDBG-DR grantees 
must use at least 70 percent of the funds for activities that 
principally benefit low- and moderate-income persons or areas. 
Due to the nature of the program, local and state officials 
receiving block grants exercise a great deal of discretion in 
determining which combination of eligible activities to employ. 
This flexibility allows communities to use CDBG-DR funds to 
meet disaster-related needs, including short-term disaster 
relief, mitigation activities, and long term recovery 
activities.
    In part because of the level of discretion afforded to 
state and local government in spending federal CDBG-DR funds, 
for the events that Congress has appropriated special CDBG-DR 
funds, the program has had repeated challenges associated with 
mismanagement of funds and wasteful and inefficient spending. 
Notably, the HUD Inspector General (HUD IG) has found that 
across a number of disasters receiving CDBG-DR appropriations, 
fund mismanagement has led to confusion, duplicative benefits, 
and poorly-prioritized expenditures. There have also been 
concerns related to procurement, such as lack of independent 
cost estimates and analyses to support the procurement method 
used. In some instances, the HUD IG found that grantees even 
lacked sufficient documentation to support the costs of 
projects. The HUD IG also determined that HUD provided 
inconsistent guidance to grantees and its employees regarding 
procurement requirements. Moreover, staff assigned to review 
disaster grantees' procurement processes do not specialize in 
procurement and may lack the expertise to determine whether 
grantees had proficient procurement processes.
    Given these concerns, H.R. 4557 would establish guidance 
and standards on how disaster funds may be distributed and 
accounted for if those funds are appropriated by Congress and 
distributed through the CDBG-DR program. More importantly, this 
bill will ensure that the CDBG-DR grantees complete their 
projects in a timely manner and that they use the funds for 
their intended purposes.
    A November 1, 2017 Oversight and Investigations 
subcommittee hearing served as the influence for the text of 
H.R. 4557 at which the HUD IG testified about HUD's lack of 
oversight on its CDBG-DR program. Helen Albert, Acting HUD IG, 
stated in her testimony that

          ``[t]he Department [HUD] faces significant challenges 
        in monitoring disaster program funds provided to 
        various grantees, including States, cities, and local 
        governments under its purview. This challenge is 
        particularly pressing for HUD because of the limited 
        resources to directly perform oversight, the broad 
        nature of HUD projects, the length of time needed to 
        complete some of these projects, the ability of the 
        Department to waive certain program requirements, and 
        the lack of understanding of disaster assistance grants 
        by the grantees.''

    The bill also eliminates the possibility that the Federal 
government would duplicate benefits among different agencies, 
which often occurs in the wake of the government response to a 
natural disaster. Duplication of benefits is an inherent risk 
to disaster recovery funding across the government. Benefits 
from multiple sources of Federal aid can result in citizens' 
receiving funds that exceed the need for a particular recovery 
purpose. In these cases, the bill would require grantees 
(States and local governments) to ensure that citizens are 
responsible for repaying any duplicate benefits.
    H.R. 4557 highlights the HUD Inspector General's work and 
gives HUD the guidance it needs to review and implement 
proposals that would make the program more effective and cost 
efficient.

                                Hearings

    The Committee on Financial Services, Subcommittee on 
Oversight and Investigations held two hearings examining 
matters relating to H.R. 4557 on November 1, 2017 and May 17, 
2018.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
June 7, 2018, and ordered H.R. 4557 to be reported favorably to 
the House by a recorded vote of 53 yeas to 3 nays (recorded 
vote no. FC-185), a quorum being present. Before the motion to 
report was offered, the Committee adopted an amendment in the 
nature of a substitute offered by Mrs. Wagner by voice vote. 
The Committee subsequently adopted an amendment to the 
amendment in the nature of a substitute offered by Mrs. Wagner 
by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House, as amended. The motion 
was agreed to by a recorded vote of 53 yeas to 3 nays (Record 
vote no. FC-185), a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 4557 
amends Title I of the Housing and Community Development Act of 
1974 to establish guidance and standards on how disaster funds 
may be distributed and accounted for if those funds are 
appropriated by Congress and distributed to states and 
localities through the Community Development Block Grant 
program.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 9, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4557, the 
Reforming Disaster Recovery Act of 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 4557--Reforming Disaster Recovery Act of 2018

    H.R. 4557 would codify several practices currently used by 
the Department of Housing and Urban Development (HUD) to 
administer the Community Development Block Grant Disaster 
Recovery program (CDBG-DR), which provides grants to help 
cities, counties, and states recover from presidentially 
declared disasters. The bill also would create some new 
requirements for the program that aim to make the allocation of 
appropriated disaster relief funds more efficient.
    The new requirements under H.R. 4557 would:
           Direct HUD, the Federal Emergency Management 
        Agency, and the Small Business Administration (SBA) to 
        coordinate benefits and reduce duplication of benefits 
        by sharing information on disaster recovery needs;
           Prohibit the use of CDBG-DR grants to repay 
        SBA disaster loans;
           Ensure that states and localities plan to 
        equitably allocate grants between infrastructure 
        projects and individual assistance to people harmed by 
        disasters; and
           Create a process for localities to pre-
        certify eligible grantees for CDBG-DR assistance.
    Using information from HUD, CBO estimates that implementing 
the bill would cost about $2 million over the 2019-2023 period 
for three additional employees, at an annual cost of around 
$100,000 per employee, to pre-certify eligible grantees and 
coordinate other activities with local governments. Such 
spending would be subject to the availability of appropriated 
funds.
    CBO does not expect that implementing H.R. 4557 would alter 
the amount of appropriations that will be needed for the CDBG-
DR program to adequately respond to future disasters. However, 
it could change the purposes for which those funds would be 
used and the proportion of those funds that could be allocated 
to different types of projects.
    Enacting H.R. 4557 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 4557 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    H.R. 4557 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. Any 
costs incurred by state, local, or tribal governments, 
including matching contributions, would result from complying 
with conditions of assistance.
    The CBO staff contact for this estimate is Robert Reese. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 4557 as the ``Reforming Disaster 
Recovery Act of 2018.''

Section 2. Community Development Block Grant Disaster Recovery program

    This section authorizes the Secretary of Housing and Urban 
Development (HUD) to provide Community Development Block 
Grant--Disaster Recover (CDBG-DR) assistance to States, units 
of general local government, and Indian tribes related to 
disaster relief, resiliency, long-term recovery, restoration of 
infrastructure and housing, mitigation, and economic 
revitalization for areas affected by Presidentially-declared 
disasters.
    The HUD Secretary must disburse at least one third of 
appropriated CDBG-DR funds within 60 days of the enactment of 
the appropriating legislation, and the remaining unallocated 
funds must be disbursed to grantees within 180 days of such 
date of enactment. The deadline for allocation of CDBG-DR funds 
shall not apply if the Federal Emergency Management Agency 
(FEMA) has not made sufficient information available to HUD 
regarding relevant unmet recovery needs.
    This section requires the HUD Secretary to coordinate with 
FEMA and the Small Business Administration (SBA) to share data 
and coordinate disaster benefits. The section would prohibit 
CDBG-DR funds from repaying SBA loans and limits eligibility 
for families having an income exceeding 120 percent of the area 
median income unless the family has applied for an SBA loan or 
SBA loans were not available at the time of application for 
CDBG-DR funds. The HUD Secretary may establish an income 
ceiling higher or lower than 120 percent of the median for the 
area because of unusually high or low family incomes.
    The HUD Secretary shall consult and coordinate with SBA to 
ensure applicants for SBA disaster loans are provided clear 
written notice regarding their potential eligibility for CDBG-
DR assistance and how acceptance of such loan would impact 
eligibility for CDBG-DR funds. In any case in which a CDBG-DR 
grantee provides assistance that duplicates benefits, the 
grantee shall collect any duplicative assistance and return 
that amount to the grantee's account, or to the HUD Secretary, 
or be subject to remedies for noncompliance under Section 111 
of the Housing and Community Development Act of 1974. In 
carrying out this subsection, the HUD Secretary shall protect 
personally identifiable information.
    No later than 120 days after the allocation of funds are 
made available by an appropriations act, the grantee must 
submit a plan to the HUD Secretary for approval detailing the 
proposed use of all funds, which shall include how the funds 
will be used to address disaster relief, identification of 
officials administering the disaster funds, an agreement to 
share data with Federal agencies, and a plan for ensuring 
compliance with the Fair Housing Act. The section requires the 
HUD Secretary to specify criteria for approval of a grantees 
disaster assistance plan. The HUD Secretary shall disapprove a 
plan if (1) the Secretary determines that the plan does not 
meet the approval criteria, (2) the Secretary determines that 
the plan does not provide equitable allocation of resources 
between infrastructure and housing projects or between 
homeowners, rents and persons experiencing homelessness, (3) 
the Secretary determines that the plan does not provide a 
credible plan for ensuring compliance with the Fair Housing 
Act, or (4) the Secretary determines that the plan does not 
prioritize the one-for-one replacement of federally subsidized 
affordable housing. In the event of a disapproved plan, the HUD 
Secretary shall permit a grantee to revise and resubmit its 
plan.
    This section requires the HUD Secretary to develop a system 
to ensure that each grantee has an approved process for 
financial controls and procurement to control and prevent 
duplication of benefits and to detect waste, fraud and abuse. 
As a condition of making any grant, the HUD Secretary shall 
certify in advance that the grantee has the proper financial 
processes and procedures in place.
    This section stipulates that a grantee may not use more 
than 10 percent of its grant funds for administrative fees. The 
HUD Secretary may establish a series of percentage limitations 
on a grantee's administrative fees, but only if such 
limitations are based on the amount of grant funds received, 
such series limitations is lower for grantees receiving a 
greater amount of grant funds and higher for grantees receiving 
a lesser amount of grant funds, and in no case may a grantee 
use more than 10 percent of grant funds for administrative 
fees. Amounts under this section may not be used for activities 
reimbursable by FEMA or the Army Corps of Engineers.
    The HUD Secretary may use 0.5 percent of CDBG-DR 
appropriated amounts exceeding $1 billion for administrative 
costs, of which 10 percent of that amount shall be transferred 
to the HUD IG for audits, reviews, oversight, evaluation, and 
investigations relating to amounts made available for use under 
this section. This section authorizes the lesser of 0.1 percent 
or $15 million for capacity building and technical assistance 
and all funds must use flood risk mitigation standards and must 
comply with storm water protections.
    In administering any CDBG-DR funds, the HUD Secretary may 
not allow a grantee to use its funds outside the scope of its 
original application, may not permit a grantee to amend a plan 
to retroactively approve a beneficiary's use of funds other 
than for approved activities, and shall prohibit a grantee from 
delegating the responsibility for inherent government 
functions. The Secretary shall require each grantee to provide 
ongoing training to its staff and sub-grantees regarding grant 
management.
    In procuring property or services paid for with CDBG-DR 
funds, a State shall follow its own procurement processes and 
procedures or must comply with such processes or procedures 
established through regulation by the HUD Secretary. A State's 
processes and procedures must (1) provide for a full and open 
competition and require cost or price analysis, (2) include 
requirements for sub-grantees, (3) specify methods of 
procurement and their applicability, (4) include standards of 
conduct for employees, and (5) ensure that all purchase orders 
and contracts include any clause required by Federal Statute, 
Executive Order, or implementing regulation. If the HUD 
Secretary finds that a State's procurement processes and 
procedures do not comply with this section, the Secretary shall 
provide the State with specific written notice of the elements 
of noncompliance, provide the State a reasonable period of time 
to come into compliance, and (3) allow the State to proceed 
with procuring property and services only if the Secretary 
determines the State is making a good faith effort to 
effectuate compliance with this section.
    Except for those statutes that relate to fair housing, 
nondiscrimination, labor standards and the environment, this 
section authorizes the HUD Secretary to waive any statute or 
regulation when there is good cause that the waiver or the 
alternative requirement would be consistent with the overall 
goal of CDBG-DR. Any waiver shall not take effect before the 
expiration of the 5-day period beginning upon the publication 
of notice in the Federal Register of such waiver. The HUD 
Secretary shall not reduce the percentage of CDBG-DR funds that 
must be used for activities that benefit persons of low and 
moderate income to less than 70 percent, unless the Secretary 
specifies that there is compelling need. Grantees may adopt, 
without review or public comment, any environment review 
approved by a Federal agency.
    For each major disaster for which CDBG-DR assistance is 
made available under this section, the HUD Secretary shall 
collect information regarding all recovery efforts and shall 
make the information available to the public, while ensuring 
personally identifiable information is not made publicly 
available. The HUD Secretary shall establish a program under 
this subsection to pre-certify eligible grantees for 
assistance. To be eligible for pre-certification, a locality 
shall demonstrate compliance with the requirement of this 
section and shall have previously received CDBG-DR assistance 
in connection with two or more Presidentially-declared 
disasters. The pre-certification shall be effective for a term 
of 10 years.
    The HUD Secretary shall recapture any unused CDBG-DR funds 
if the grantee notifies the Secretary that it has completed all 
activities provided under the grant or the grantee has not 
spent all or part of the appropriated funds within 6 years. The 
HUD Secretary shall extend the time period by not more than 3 
years if the Director of the Office of Management and Budget 
waives the six year time requirement and submits a written 
justification to the House and Senate Committees on 
Appropriations.
    The section establishes in the Treasury of the United 
States a CDBG-DR Reserve Fund, which shall consist of amounts 
appropriated to the Reserve Fund or recaptured funds as 
specified under this section.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974




           *       *       *       *       *       *       *
TITLE I--COMMUNITY DEVELOPMENT

           *       *       *       *       *       *       *



SEC. 123. CDBG-DISASTER RECOVERY ASSISTANCE.

  (a) Authority; Use.--The Secretary may provide assistance 
under this section to States, units of general local 
government, and Indian tribes for necessary expenses for 
activities authorized under this title related to disaster 
relief, resiliency, long-term recovery, restoration of 
infrastructure and housing, mitigation, and economic 
revitalization in the most impacted and distressed areas 
resulting from a major disaster declared pursuant to the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.).
  (b) Timing.--
          (1) Deadlines for allocation of amounts.--Except as 
        provided in paragraph (2), after the enactment of an 
        Act making funds available for assistance under this 
        section, the Secretary shall allocate for grantees, 
        based on the best available data--
                  (A) not less than one-third of funds provided 
                for assistance under this section, within 60 
                days of the date of the enactment of such Act; 
                and
                  (B) all remaining unallocated funds to be 
                provided to grantees, within 180 days of such 
                date of enactment.
          (2) Inapplicability of deadlines based on 
        insufficient information.--The deadlines under 
        paragraph (1) for allocation of funds shall not apply 
        in the case of funds made available for assistance 
        under this section if Federal Emergency Management 
        Agency has not made sufficient information available to 
        the Secretary regarding relevant unmet recovery to make 
        allocations in accordance with such deadlines.
          (3) Disbursement of amounts.--Subject to subsection 
        (c)(1), the Secretary shall provide for the 
        disbursement of the amounts allocated for a grantee 
        over time in accordance with obligations of the 
        grantee, but shall require the grantee to be in 
        substantial compliance with the requirements of this 
        section before each such disbursement.
          (4) Coordination of disaster benefits and data with 
        other federal agencies.--
                  (A) Coordination of data.--The Secretary 
                shall coordinate with other agencies to obtain 
                data on recovery needs. The Administrator of 
                the Federal Emergency Management Agency and the 
                Administrator of the Small Business 
                Administration shall share data with the 
                Secretary to coordinate disaster benefits.
                  (B) Coordination with fema.--The Secretary 
                and the Administrator of the Federal Emergency 
                Management Agency shall share with each other, 
                and make publicly available, all data collected 
                or analyzed during the course of a disaster 
                recovery for which assistance is provided under 
                this section, including--
                          (i) all data on damage caused by the 
                        disaster;
                          (ii) information on how any Federal 
                        assistance provided in connection with 
                        the disaster is expended;
                          (iii) information regarding the 
                        effect of the disaster on education, 
                        transportation capabilities and 
                        dependence, housing needs and 
                        displacement.
                  (C) Prohibition and requirements regarding 
                small business administration loans.--
                          (i) Prohibition.--Funds made 
                        available for use under this section 
                        may not be used to repay Small Business 
                        Administration loans.
                          (ii) Family eligibility.-- Any family 
                        having an income exceeding 120 percent 
                        of the area median income shall not be 
                        eligible for assistance provided from 
                        funds made available for use under this 
                        section unless (i) the family has 
                        applied for a Small Business 
                        Administration loan for such purpose 
                        and has agreed that if such a loan is 
                        made that it will use the proceeds of 
                        such loan in lieu of assistance from 
                        funds made available for use under this 
                        section, or (ii) such loans are not 
                        available at the time of application 
                        for assistance from funds made 
                        available for use under this section; 
                        except that the Secretary may establish 
                        income ceilings higher or lower than 
                        120 percent of the median for the area 
                        on the basis of the Secretary's 
                        findings that such variations are 
                        necessary because of unusually high or 
                        low family incomes.
                  (D) Notice to sba applicants.--The Secretary 
                shall consult and coordinate with the 
                Administrator of the Small Business 
                Administration as necessary to ensure that 
                applicants for Small Business Administration 
                disaster loans are provided clear written 
                notice regarding their potential eligibility 
                for assistance with funds made available under 
                this section and the affect of such Small 
                Business Administration loans on such 
                eligibility.
                  (E) Treatment of duplicative benefits.--In 
                any case in which a grantee provides assistance 
                that duplicates benefits available to a person 
                for the same purpose from another source, the 
                grantee shall collect any duplicative 
                assistance that it provides and return the 
                amount of duplicative assistance to the 
                grantees funds available for use under this 
                section, or to the Secretary, or be subject to 
                remedies for noncompliance under section 111, 
                unless the Secretary issues a public 
                determination that it is not in the best 
                interest of the Federal Government to pursue 
                such remedies.
                  (F) Protection of personally identifiable 
                information.--In carrying out this paragraph, 
                the Secretary shall take such actions as may be 
                necessary to ensure that personally 
                identifiable information regarding recipients 
                of assistance provided from funds made 
                available under this section is not made 
                publicly available by the Department of Housing 
                and Urban Development or any agency with which 
                information is shared pursuant to this 
                paragraph.
  (c) Plan for Use of Assistance.--
          (1) Requirement.--Not later than 120 days after the 
        allocation pursuant to subsection (b)(1)(B) of the 
        funds made available by an appropriations Act for 
        assistance under this section and before the Secretary 
        obligates any of such funds for a grantee, the grantee 
        shall submit a plan to the Secretary for approval 
        detailing the proposed use of all funds, which shall 
        include, at a minimum--
                  (A) criteria for eligibility and a 
                description of how the use of such funds will 
                address disaster relief, resiliency, long-term 
                recovery and restoration of infrastructure and 
                housing, and mitigation and economic 
                revitalization in the most impacted and 
                distressed areas;
                  (B) identification of officials and offices 
                responsible for administering such funds and 
                identifying and recovering duplicate benefits;
                  (C) an agreement to share data with Federal 
                agencies and other providers of disaster 
                relief, which shall include information the 
                grantee has regarding the matters described in 
                subparagraph (B); and
                  (D) a plan for ensuring compliance with the 
                Fair Housing Act, which may include providing 
                for partnerships with local fair housing 
                organizations and funding set-aside for local 
                fair housing organizations to handle complaints 
                relating to assistance with amounts made 
                available for use under this section.
          (2) Approval.--The Secretary shall, by regulation, 
        specify criteria for approval of plans under paragraph 
        (1), including approval of substantial amendments to 
        such plans.
          (3) Disapproval.--The Secretary shall disapprove a 
        plan or substantial amendment to a plan if--
                  (A) the Secretary determines that a plan or 
                substantial amendment does not meet the 
                approval criteria;
                  (B) the Secretary determines, based on damage 
                and unmet needs assessments of the Secretary 
                and the Federal Emergency Management 
                Administration or such other information as may 
                be available, that the plan or amendment does 
                not provide for equitable allocation of 
                resources--
                          (i) between infrastructure and 
                        housing projects; or
                          (ii) between homeowners, renters, and 
                        persons experiencing homelessness;
                  (C) the Secretary determines that the plan 
                does not provide a credible plan for ensuring 
                compliance with the Fair Housing Act; or
                  (D) the Secretary determines that the plan 
                does not prioritize the one-for-one replacement 
                of public housing and other federally 
                subsidized housing that provides affordable 
                housing for the lowest income households.
          (4) Resubmission.--The Secretary shall permit a 
        grantee to revise and resubmit disapproved plans.
          (5) Timing.--The Secretary shall approve or 
        disapprove a plan not later than 120 days after 
        submission of the plan to the Secretary.
  (d) Financial Controls.--
          (1) Compliance system.--The Secretary shall develop 
        and maintain a system to ensure that each grantee has 
        in place--
                  (A) proficient financial controls and 
                procurement processes;
                  (B) adequate procedures to ensure that all 
                eligible families and individuals are approved 
                for assistance with amounts made available 
                under this section and that recipients are 
                provided the full amount of assistance for 
                which they are eligible;
                  (C) adequate procedures to prevent any 
                duplication of benefits, as defined by section 
                312 of the Robert T. Stafford Disaster Relief 
                and Emergency Assistance Act (42 U.S.C. 5155), 
                to ensure timely expenditure of funds, and to 
                detect and prevent waste, fraud, and abuse of 
                funds; and
                  (D) adequate procedure to ensure the grantee 
                will maintain comprehensive and publicly 
                accessible websites that make available 
                information regarding all disaster recovery 
                activities assisted with such funds, which 
                information shall include--
                          (i) full and unredacted copies of all 
                        requests for qualification for 
                        assistance or for procurement with such 
                        funds, however styled;
                          (ii) all responses to such requests;
                          (iii) the identity of any individual 
                        or entity that reviews, evaluates, 
                        scores, or otherwise influences or 
                        determines the disposition of such 
                        requests;
                          (iv) all reports, however styled, 
                        containing the reviewing individual or 
                        entity's scores, findings; and 
                        conclusions regarding such requests; 
                        and
                          (v) any resulting contract, 
                        agreement, or other disposition of such 
                        requests;
                except that such procedures shall ensure that 
                personally identifiable information regarding 
                recipients of assistance provided from funds 
                made available under this section shall not be 
                made publically available.
          (2) Certification.--As a condition of making any 
        grant, the Secretary shall certify in advance that the 
        grantee has in place the processes and procedures 
        required under subparagraphs (A) and (B) of paragraph 
        (1).
  (e) Use of Funds.--
          (1) Administrative costs.--
                  (A) In general.--A State, unit of general 
                local government, or Indian tribe receiving a 
                grant under this section may use not more than 
                10 percent of the amount of grant funds 
                received, or not more than such other 
                percentage as may be established pursuant to 
                subparagraph (B), for administrative costs and 
                shall document the use of funds for such 
                purpose in accordance with such requirements as 
                the Secretary shall establish.
                  (B) Discretion to establish sliding scale.--
                The Secretary may establish a series of 
                percentage limitations on the amount of grant 
                funds received that may be used by a grantee 
                for administrative costs, but only if--
                          (i) such percentage limitations are 
                        based on the amount of grant funds 
                        received by a grantee;
                          (ii) such series provides that the 
                        percentage that may be so used is lower 
                        for grantees receiving a greater amount 
                        of grant funds and such percentage that 
                        may be so used is higher for grantees 
                        receiving a lesser amount of grant 
                        funds; and
                          (iii) in no case may a grantee so use 
                        more than 10 percent of grant funds 
                        received.
          (2) Limitation on use.--Amounts from a grant under 
        this section may not be used for activities 
        reimbursable by, or for which funds are made available 
        by--
                  (A) the Federal Emergency Management Agency, 
                including under the Robert T. Stafford Disaster 
                Relief and Emergency Assistance Act or the 
                National Flood Insurance Program; or
                  (B) the Army Corps of Engineers.
          (3) HUD administrative costs.--
                  (A) Limitation.--Of any funds made available 
                for use under this section by any single 
                appropriations Act, the Secretary may use 0.5 
                percent of any such amount exceeding 
                $1,000,000,000 for necessary costs, including 
                information technology costs, of administering 
                and overseeing the obligation and expenditure 
                of amounts made available for use under this 
                section.
                  (B) Transfer of funds.--Any amounts made 
                available for use in accordance with 
                subparagraph (A) shall--
                          (i) be transferred to the account for 
                        ``Program Office Salaries and 
                        Expenses--Community Planning and 
                        Development'' for the Department;
                          (ii) shall remain available until 
                        expended; and
                          (iii) may be used for such 
                        administrative costs for administering 
                        any funds appropriated to the 
                        Department for any disaster and related 
                        purposes in any prior or future Act 
                        making funds available for use under 
                        this section, notwithstanding the 
                        disaster for which such funds were 
                        appropriated.
          (4) Inspector general.--Of any funds made available 
        for use in accordance with paragraph (3)(A), 10 percent 
        shall be transferred to the Office of the Inspector 
        General for necessary costs of audits, reviews, 
        oversight, evaluation, and investigations relating to 
        amounts made available for use under this section.
          (5) Capacity building.--Of any funds made available 
        for use under this section, not more than 0.1 percent 
        or $15,000,000, whichever is less, shall be made 
        available for capacity building and technical 
        assistance, including assistance regarding contracting 
        and procurement processes, to support grantees and 
        subgrantees receiving funds under this section.
          (6) Compliance with storm water protections.--The 
        Secretary shall provide that no funds made available 
        under this section may be used for construction, 
        repair, or rehabilitation of any infrastructure unless 
        the infrastructure assisted complies with any minimum 
        standards for protection from floods and stormwaters, 
        including the Federal Flood Risk Management Standards 
        of the Federal Emergency Management Agency.
          (7) Flood risk mitigation.--
                  (A) Requirements.--Subject to subparagraph 
                (B), the Secretary shall require that any 
                structure that is located in an area having 
                special flood hazards and that is newly 
                constructed, for which substantial damage is 
                repaired, or that is substantially improved, 
                using amounts made available under this 
                section, shall be elevated with the lowest 
                floor, including the basement, at least two 
                feet above the base flood level.
                  (B) Multifamily housing.--In the case of 
                structures consisting of multifamily housing, 
                the Secretary, in consultation with the 
                Administrator of the Federal Emergency 
                Management Agency, shall provide for 
                alternative forms of mitigation (in addition to 
                elevation) and shall exempt from the 
                requirement under subparagraph (A) any such 
                structure that meets the standards for such an 
                alternative form of mitigation.
                  (C) Definitions.--For purposes of 
                subparagraph (A), the terms ``area having 
                special flood hazards'', ``newly constructed'', 
                ``substantial damage'', ``substantial 
                improvement'', and ``base flood level'' have 
                the same meanings as under the Flood Disaster 
                Protection Act of 1973 and the National Flood 
                Insurance Act of 1968 (42 U.S.C. 4001 et seq.).
  (f) Administration.--In administering any amounts made 
available for assistance under this section, the Secretary--
          (1) may not allow a grantee to use any such amounts 
        for any purpose other than the purpose approved by the 
        Secretary in the plan submitted under subsection (c)(1) 
        to the Secretary for use of such amounts;
          (2) may not permit a grantee to amend a plan to 
        retroactively approve a beneficiary's use of funds for 
        an eligible activity other than an activity for which 
        the funds were originally approved in the plan; and
          (3) shall prohibit a grantee from delegating, by 
        contract or otherwise, the responsibility for inherent 
        government functions.
  (g) Training for Grant Management for Subgrantees.--The 
Secretary shall require each grantee to provide ongoing 
training to all staff and subgrantees.
  (h) Procurement Processes and Procedures for States.--
          (1) State processes and procedures.--In procuring 
        property or services to be paid for in whole or in part 
        with amounts from a grant under this section, a State 
        shall--
                  (A) follow its own procurement processes and 
                procedures, but only if the Secretary makes a 
                determination that such processes and 
                procedures comply with the requirements under 
                paragraph (2); or
                  (B) comply with such processes and procedures 
                as the Secretary shall, by regulation, 
                establish for purposes of this section.
          (2) Requirements.--The requirements under this 
        paragraph with respect to the procurement processes and 
        procedures of a State are that such processes and 
        procedures shall--
                  (A) provide for full and open competition and 
                require cost or price analysis;
                  (B) include requirements for procurement 
                policies and procedures for subgrantees, based 
                on full and open competition;
                  (C) specify methods of procurement and their 
                applicability, but not allow for cost-plus-a-
                percentage-of cost or percentage-of-
                construction-cost methods of procurement;
                  (D) include standards of conduct governing 
                employees engaged in the award or 
                administration of contracts;
                  (E) ensure that all purchase orders and 
                contracts include any clauses required by 
                Federal Statute, Executive Order, or 
                implementing regulation.
          (3) Noncompliance.--In the case of a State for which 
        the Secretary finds pursuant to paragraph (1)(A) that 
        its procurement processes and procedures do not comply 
        with paragraph (2), the Secretary shall--
                  (A) provide the State with specific written 
                notice of the elements of noncompliance and the 
                changes necessary to such processes and 
                procedures to provide for compliance;
                  (B) provide the State a reasonable period of 
                time to come into compliance; and
                  (C) during such period allow the State to 
                proceed with procuring property and services 
                paid for in whole or in part with amounts from 
                a grant under this section in compliance with 
                the procurement processes and procedures of the 
                State, but only if the Secretary determines the 
                State is making a good faith effort to 
                effectuate compliance with the requirements of 
                paragraph (2).
  (i) Treatment of CDBG Allocations.--Amounts made available 
for use under this section shall not be considered relevant to 
the non-disaster formula allocations made pursuant to section 
106 of this title (42 U.S.C. 5306).
  (j) Waivers.--
          (1) Authority.--Subject to the other provisions of 
        this section, in administering amounts made available 
        for use under this section, the Secretary may waive, or 
        specify alternative requirements for, any provision of 
        any statute or regulation that the Secretary 
        administers in connection with the obligation by the 
        Secretary or the use by the recipient of such funds 
        (except for requirements related to fair housing, 
        nondiscrimination, labor standards, and the environment 
        and except for the requirements of this section), if 
        the Secretary makes a public finding that good cause 
        exists for the waiver or alternative requirement and 
        such waiver or alternative requirement would not be 
        inconsistent with the overall purpose of this title.
          (2) Notice and publication.--Any waiver of or 
        alternative requirement pursuant to paragraph (1) shall 
        not take effect before the expiration of the 5-day 
        period beginning upon the publication of notice in the 
        Federal Register of such waiver or alternative 
        requirement.
          (3) Low- and moderate-income use.--A waiver pursuant 
        to paragraph (1) may not reduce the percentage of funds 
        that must be used for activities that benefit persons 
        of low and moderate income to less than 70 percent, 
        unless the Secretary specifically finds that there is 
        compelling need to further reduce the percentage 
        requirement.
          (4) Prohibition.--The Secretary may not waive any 
        provision of this section pursuant to the authority 
        under paragraph (1).
  (k) Environmental Review.--
          (1) Adoption.--Notwithstanding subsection (j)(1), 
        recipients of funds provided under this section that 
        use such funds to supplement Federal assistance 
        provided under section 402, 403, 404, 406, 407, 
        408(c)(4), 428, or 502 of the Robert T. Stafford 
        Disaster Relief and Emergency Assistance Act (42 U.S.C. 
        5121 et seq.) may adopt, without review or public 
        comment, any environmental review, approval, or permit 
        performed by a Federal agency, and such adoption shall 
        satisfy the responsibilities of the recipient with 
        respect to such environmental review, approval, or 
        permit under section 104(g)(1) of this title (42 U.S.C. 
        5304(g)(1)).
          (2) Release of funds.--Notwithstanding section 
        104(g)(2) of this title (42 U.S.C. 5304(g)(2)), the 
        Secretary may, upon receipt of a request for release of 
        funds and certification, immediately approve the 
        release of funds for an activity or project assisted 
        with amounts made available for use under this section 
        if the recipient has adopted an environmental review, 
        approval or permit under paragraph (1) or the activity 
        or project is categorically excluded from review under 
        the National Environmental Policy Act of 1969 (42 
        U.S.C. 4321 et seq.).
  (l) Collection of Information; Audits and Oversight.--
          (1) Collection of information.--For each major 
        disaster for which assistance is made available under 
        this section, the Secretary shall collect information 
        regarding all recovery efforts so assisted and shall 
        make such information available to the public and to 
        the Inspector General for the Department of Housing and 
        Urban Development, and shall report to the Congress 
        regarding such efforts. Information collected and 
        reported shall be disaggregated by race, geography, and 
        all protected classes of individuals under the Robert 
        T. Stafford Disaster Relief and Emergency Assistance 
        Act, the Americans with Disabilities Act of 1990, the 
        Fair Housing Act, the Civil Rights Act of 1964, and 
        other civil rights and nondiscrimination protections. 
        In carrying out this paragraph, the Secretary shall 
        take such actions as may be necessary to ensure that 
        personally identifiable information regarding 
        recipients of assistance provided from funds made 
        available under this section shall not made publicly 
        available.
          (2) Audits and oversight.--In conducting audits, 
        reviews, oversight, evaluation, and investigations, in 
        addition to activities designed to prevent and detect 
        waste, fraud, and abuse, the Inspector General shall 
        review programs of grantees under this section for 
        providing disaster relief and recovery assistance to 
        ensure such programs fulfill their purposes and serve 
        all eligible applicants for disaster relief or recovery 
        assistance.
  (m) Pre-Certification for Units of General Local 
Government.--
          (1) In general.--The Secretary shall carry out a 
        program under this subsection to provide for units of 
        general local government to pre-certify as eligible 
        grantees for assistance under this section.
          (2) Requirements.--To be eligible for pre-
        certification under the program under this subsection a 
        unit of general local government shall--
                  (A) demonstrate to the satisfaction of the 
                Secretary compliance with the requirements of 
                this section; and
                  (B) have previously received assistance as a 
                grantee or subgrantee under this section, or 
                with amounts made available for the Community 
                Development Block Grant--Disaster Recovery 
                account, in connection with two or more major 
                disasters declared pursuant to the Robert T. 
                Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5121 et seq.).
          (3) Duration.--Pre-certification under the program 
        under this subsection shall be effective for a term of 
        10 years.
  (n) Deposit of Unused Amounts in Fund.--
          (1) In general.--If any amounts made available for 
        assistance under this section to grantees remain 
        unexpended upon the earlier of--
                  (A) the date that the grantee of such amounts 
                notifies the Secretary that the grantee has 
                completed all activities identified in the 
                grantee's plan for use of such amounts that was 
                approved by the Secretary in connection with 
                such grant; or
                  (B) the expiration of the 6-year period 
                beginning upon the Secretary obligating such 
                amounts to the grantee, as such period may be 
                extended pursuant to paragraph (2),
        the Secretary shall transfer such unexpended amounts to 
        the Secretary of the Treasury for deposit into the 
        Community Development Block Grant Disaster Recovery 
        Reserve Fund established under section 124, except that 
        the Secretary may, by regulation, permit the grantee to 
        retain amounts needed to close out the grant.
          (2) Extension of period for use of funds.--The period 
        under paragraph (1)(B) shall be extended by not more 
        than 3 years if, before the expiration of such 6-year 
        period, the Director of the Office of Management and 
        Budget, upon a request by the Secretary, waives this 
        requirement and submits a written justification for 
        such waiver to the Committees on Appropriations of the 
        House of Representatives and the Senate that specifies 
        the period of such extension.

SEC. 124. COMMUNITY DEVELOPMENT BLOCK GRANT DISASTER RECOVERY RESERVE 
                    FUND.

  (a) Establishment.--There is established in the Treasury of 
the United States an account to be known as the Community 
Development Block Grant Disaster Recovery Reserve Fund (in this 
section referred to as the ``Fund'').
  (b) Amounts.--The Fund shall consist of any amounts 
appropriated to or deposited into the Fund, including amounts 
deposited into the Fund pursuant to section 123(n).
  (c) Use.--Amounts in the Fund shall be available only for 
providing assistance under section 123, but only to the extent 
provided in advance in appropriations Acts.

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