[DOCID: f:hr228.110]
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110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-228
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HURRICANES KATRINA, RITA, AND WILMA FEDERAL MATCH RELIEF ACT OF 2007
_______
July 11, 2007.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Oberstar, from the Committee on Transportation and Infrastructure,
submitted the following
R E P O R T
[To accompany H.R. 1144]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 1144) to waive the non-Federal
share of the cost of certain disaster assistance provided in
connection with Hurricanes Katrina and Rita, and for other
purposes, having considered the same, report favorably thereon
with amendments and recommend that the bill as amended do pass.
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Hurricanes Katrina, Rita, and Wilma
Federal Match Relief Act of 2007''.
SEC. 2. FEDERAL SHARE OF DISASTER ASSISTANCE.
(a) In General.--Notwithstanding any other provision of law,
including any agreement, the Federal share of assistance, including
direct Federal assistance, provided for the States of Louisiana,
Mississippi, Texas, and Florida in connection with Hurricanes Katrina,
Rita, and Wilma under sections 403, 406, 407, and 408 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170b,
5172, 5173, and 5174) shall be 100 percent of the eligible costs under
such sections.
(b) Applicability.--
(1) In general.--Subject to paragraph (2), the Federal share
provided by subsection (a) shall apply to disaster assistance
provided before, on, or after the date of enactment of this
Act.
(2) Limitation.--In the case of disaster assistance provided
under sections 403, 406, and 407 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act, the Federal share
provided by subsection (a) shall be limited to assistance
provided for projects for which project worksheets have been
approved by the Federal Emergency Management Agency before the
date of enactment of this Act.
SEC. 3. CANCELLATION OF LOANS.
(a) Community Disaster Loan Act.--
(1) In general.--Section 2(a) of the Community Disaster Loan
Act of 2005 (Public Law 109-88) is amended by striking
``Provided further, That notwithstanding section 417(c)(1) of
the Stafford Act, such loans may not be canceled:''.
(2) Effective date.--The amendment made by paragraph (1)
shall be effective on the date of enactment of the Community
Disaster Loan Act of 2005 (Public Law 109-88).
(b) Emergency Supplemental Appropriations Act.--
(1) In general.--Chapter 4 of title II of the Emergency
Supplemental Appropriations Act for Defense, the Global War on
Terror, and Hurricane Recovery, 2006 (Public Law 109-234) is
amended under the heading ``FEDERAL EMERGENCY MANAGEMENT
AGENCY-disaster assistance direct loan program account'' by
striking ``Provided further, That notwithstanding section
417(c)(1) of such Act, such loans may not be canceled:''.
(2) Effective date.--The amendment made by paragraph (1)
shall be effective on the date of enactment of the Emergency
Supplemental Appropriations Act for Defense, the Global War on
Terror, and Hurricane Recovery, 2006 (Public Law 109-234).
Amend the title so as to read:
A bill to waive the non-Federal share of the cost of
certain disaster assistance provided in connection with
Hurricanes Katrina, Rita, and Wilma.
Purpose of the Legislation
H.R. 1144, as amended, waives the non-Federal share of the
cost of certain disaster assistance related to Hurricanes
Katrina, Rita, and Wilma and restores the authority of the
Federal Emergency Management Agency (``FEMA'') to cancel loans
to local governments for recovery from Hurricanes Katrina,
Rita, and Wilma under the Community Disaster Loan (``CDL'')
program.
Background and Need for Legislation
The inability of the States of Louisiana, Mississippi,
Texas, and Florida, as well as local governments in these
States, to meet the non-Federal share of assistance under title
IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (``Stafford Act'') has been raised as one of the
causes of the delays in the reconstruction in the aftermath of
Hurricanes Katrina, Rita, and Wilma. The Public Assistance
program is the main vehicle that FEMA uses to provide post-
disaster support to State and local governments and to certain
private non-profit organizations that perform government
functions. The main provisions of the Public Assistance program
are authorized by Sections 403, 406, and 407 of the Stafford
Act which address essential assistance, reconstruction of
facilities, and debris removal, respectively. Under current
law, the Federal share for the Public Assistance program is set
at not less than 75 percent. FEMA has the discretion to raise
the Federal share to 100 percent administratively, and did so
for an initial period for Direct Federal Assistance, debris
removal, and certain emergency response costs. FEMA has
generally adjusted the Federal share for Public Assistance to
90 percent for Hurricanes Katrina, Rita, and Wilma. However,
the Administration has not chosen to fully exercise its
authority and raise the Federal share to 100 percent for these
storms, which included the largest natural disaster in American
history, despite having done so after other disasters such as
Hurricane Andrew.
The Other Needs Assistance program under Section 408 of the
Stafford Act provides replacement of personal property,
including automobiles. The program also provides for
reimbursement of disaster-related medical, dental, and funeral
expenses. The Other Needs Assistance program can be
administered by either the state or FEMA. The Stafford Act
provides that the Federal share is 75 percent (with no
possibility for an administrative cost share adjustment), and
unlike other Stafford Act disaster programs that are cost
shared, the Stafford Act specifies that the non-Federal share
must come from the state.
The Community Disaster Loan program is a Stafford Act
program that pre-dated Hurricane Katrina and is authorized
under Section 417 of the Stafford Act. Under this program,
local communities can receive loans for up to 25 percent of
their annual operating budget (subject to a $5-million limit)
to cover disaster-related losses in tax and other revenues.
Under this program, loans ``shall be cancelled'' to the extent
that the local government has disaster-related revenue losses
or unreimbursed disaster expenses in the three fiscal years
after the disaster. Historically, the vast majority of the
loans (more than 90 percent) under this program have been
cancelled.
In the 109th Congress, Congress enacted the Community
Disaster Loan Act of 2005 (P.L. 109-88). The Act authorized up
to $1 billion of loans under the CDL program and allowed loans
to exceed the $5 million limit. However, the Act specifically
prohibited the cancellation of these loans pursuant to Section
417 of the Stafford Act. Pursuant to the Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and
Hurricane Recovery 2006 (P.L. 109-234), Congress appropriated
an additional $371 million for the CDL program for Hurricane
Katrina and other Hurricanes of the 2005 season. The Emergency
Supplemental Appropriations Act also specifically prohibited
the cancellation of these loans pursuant to Section 417 of the
Stafford Act. The communities devastated by the greatest
natural disaster in our Nation's history continue to face a
difficult recovery.
Summary of the Legislation
Section 1. Short title
Section 1 states the title of the bill as the ``Hurricanes
Katrina, Rita, and Wilma Federal Match Relief Act of 2007''.
Section 2. Federal share of disaster assistance
Section 2 of the bill waives the non-Federal share of
certain Federal Emergency Management Agency (FEMA) disaster
assistance provided to Louisiana, Mississippi, Texas, and
Florida under title IV of the Stafford Act. Section 2 increases
the Federal share for the Public Assistance and Other Needs
Assistance programs to 100 percent. The increase in the Federal
share for Public Assistance only applies to projects approved
by FEMA prior to the date of
enactment.
Section 3. Cancellation of loans
Section 3 of the bill strikes provisions of P.L. 109-88 and
P.L. 109-234, which eliminated FEMA's authority to cancel loans
under the CDL program (Section 417 of the Stafford Act) for
loans to local governments for recovery from Hurricanes
Katrina, Rita, and Wilma. Loans to local governments for
recovery from Hurricanes Katrina, Rita, and Wilma would be
authorized to be cancelled if the local governments meet the
statutory test outlined in Section 417 of the Stafford Act.
Legislative History and Committee Consideration
On March 1, 2007, the Committee on Transportation and
Infrastructure met in open session and adopted an amendment in
the nature of a substitute by voice vote. The amendment
specified the cost share adjustment applied to Sections 403,
406, 407, and 408 of the Stafford Act, and applied the
Community Disaster Loan Program provisions to P.L. 109-243. An
amendment to the amendment in the nature of a substitute was
adopted by voice vote to include Texas among the States granted
a waiver from the non-Federal share of FEMA disaster
assistance. An additional amendment to the amendment in the
nature of a substitute was adopted by voice vote to add the
State of Florida and Hurricane Wilma to the bill. The Committee
on Transportation and Infrastructure ordered the bill, as
amended, reported favorably to the House by voice vote.
Record Votes
Clause 3(b) of rule XIII of the House of Representatives
requires each committee report to include the total number of
votes cast for and against on each record vote on a motion to
report and on any amendment offered to the measure or matter,
and the names of those members voting for and against. There
were no recorded votes taken in connection with ordering H.R.
1144, as amended, reported. A motion to order H.R. 1114, as
amended, reported favorably to the House was agreed to by voice
vote with a quorum present.
Committee Oversight Findings
With respect to the requirements of clause 3(c)(I) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
Cost of Legislation
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
Compliance With House Rule XIII
1. With respect to the requirement of clause 3(c)(2) of
rule XIII of the Rules of the House of Representatives, and
308(a) of the Congressional Budget Act of 1974, the Committee
references the report of the Congressional Budget Office
included in the report.
2. With respect to the requirement of clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, the
performance goals and objectives of this legislation are to
waive the non-Federal share of the cost of certain disaster
assistance provided in connection with Hurricanes Katrina,
Rita, and Wilma, and for other purposes.
3. With respect to the requirement of clause 3(c)(3) of
rule XIII of the Rules of the House of Representatives and
section 402 of the Congressional Budget Act of 1974, the
Committee has received the enclosed cost estimate for H.R. 1144
from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 13, 2007.
Hon. James L. Oberstar,
Chairman, Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1144, the
Hurricanes Katrina, Rita, and Wilma Federal Match Relief Act of
2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Daniel
Hoople (for federal costs) and Melissa Merrell (for the state
and local impact).
Sincerely,
Peter R. Orszag,
Director.
Enclosure.
H.R. 1144--Hurricanes Katrina, Rita, and Wilma Federal Match Relief Act
of 2007
Summary: H.R. 1144 would remove provisions in current law
that prohibit the Federal Emergency Management Agency (FEMA)
from forgiving about $1.3 billion in loans made to certain
local governments following the 2005 Gulf Coast hurricanes.
Under procedures specified in the Federal Credit Reform Act for
recording the cost of direct federal loans, the Administration
estimated that those FEMA loans would cost about $1 billion,
reflecting a subsidized interest rate and the considerable
likelihood that some of the loans would not be repaid. H.R.
1144 would modify the terms of those loans, effectively
converting them to grants at an estimated cost of $321 million.
Enacting H.R. 1144 would affect direct spending because that
cost would be incurred without any subsequent legislation. The
legislation would not affect revenues.
Under current law, funds appropriated to the FEMA Disaster
Relief Fund are available for certain public assistance and
infrastructure repair projects; however, state and local
governments must provide a portion of the project's costs to
match the FEMA funds. In some cases, states are able to use
funds from other federal programs to provide matching funds. In
other instances, state and local sources are used to provide
the matching funds. H.R. 1144 would direct FEMA to provide 100
percent of the funds for projects related to the 2005 Gulf
Coast hurricanes; thus, no local matching funds would be
required for such FEMA recovery projects. CBO does not expect
that this proposed change in the match requirement would have a
significant effect on the pace of federal expenditures for
hurricane relief efforts. It is possible that implementing H.R.
1144 could lead to an increase in the need for additional
appropriations to FEMA to provide disaster relief. CBO has no
basis for assessing the total needs for such funds in the Gulf
states relative to the amounts the Congress has already
provided. Furthermore, H.R. 1144 does not authorize the
appropriation of additional funds for disaster relief.
H.R. 1144 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would benefit some local governments in Louisiana and
Mississippi.
Estimated Cost to the Federal Government: The estimated
budgetary impact of H.R. 1144 is shown in the following table.
The costs of this legislation fall within budget function 450
(community and regional development).
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By fiscal year, in millions of dollars--
-----------------------------------------------
2007 2008 2009 2010 2011 2012
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CHANGES IN DIRECT SPENDING
Community Disaster Loan Forgiveness:
Estimated Budget Authority.................................. 321 0 0 0 0 0
Estimated Outlays........................................... 321 0 0 0 0 0
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Basis of Estimate: For this estimate, CBO assumes that the
bill will be enacted in fiscal year 2007. The cost of a
legislated change in the terms of existing loans is recorded in
the year that such legislation is enacted.
Community disaster loan forgiveness
In 2005 and 2006, the Congress authorized FEMA to make
about $1.3 billion in loans to local governments in Louisiana
and Mississippi suffering substantial revenue loss as a result
of the 2005 Gulf Coast hurricanes (see Public Laws 109-88 and
109-234). Under procedures specified in the Federal Credit
Reform Act for recording the cost of direct federal loans, the
Congress provided about $1 billion in budget authority for such
loans, reflecting the estimated cost to the federal government
of subsidized interest rate of those loans and the considerable
likelihood that some of the loans would not be repaid.
The Stafford Act requires partial or full forgiveness of
community disaster loan repayments if, after three years, local
revenue remains insufficient to meet operating expenses.
Separate provisions within Public Laws 109-88 and 109-234,
however, prohibit FEMA from forgiving this cohort of community
disaster assistance loans. As such, CBO assumes that local
communities will make loan repayments over the next several
years with an estimated net present value of $321 million.
H.R. 1144 would strike the provisions of current law that
prohibit loan forgiveness for this FEMA loan cohort. Based on
information from the Administration, CBO expects that this
legislative modification to the terms of those loans would lead
to forgiveness of the loans. Under the Federal Credit Reform
Act, the budgetary cost of legislative modifications to the
terms of existing loans--the net present value of the cost of
the modification--is recorded on the budget in the same year
that the legislation making the modification is enacted. Thus,
CBO estimates that this provision would cost $321 million in
2007.
Increase in federal share of disaster assistance
FEMA is authorized under the Stafford Act to provide
assistance, using funds appropriated to its Disaster Relief
Fund, to areas affected by a major disaster. For certain types
of assistance, state and local governments must match federal
dollars with funding from other sources. This matching
requirement varies from nothing to 25 percent, depending on the
type of assistance and the magnitude of the disaster.
H.R. 1144 would require the federal share for disaster
assistance to be 100 percent for FEMA's essential assistance,
public infrastructure, debris removal, and individual and
housing programs. This requirement would apply to FEMA projects
in the states of Louisiana, Mississippi, Texas, and Florida
related to recovery from Hurricanes Katrina, Rita, and Wilma.
As a result, CBO expects that the pace of FEMA' s contract
obligations could accelerate over the next few years for
projects already approved by the agency. However, CBO does not
expect that there would be a significant acceleration of
program expenditures as a result of this provision because FEMA
and the Gulf states indicate that other factors, such as local
rules and planning requirements governing infrastructure
projects and the availability of contractors strongly influence
the pace of project expenditures. Therefore, CBO estimates that
enacting this provision would have no significant effect on
direct spending.
Implementing this provision of H.R. 1144 could lead to a
need for additional appropriations to FEMA to fund projects
currently scheduled (to receive only partial assistance from
federal funds. This cost estimate does not include an estimate
of any such additional costs, however, because CBO has no basis
to assess the total needs for such funds in the Gulf states
relative to the amounts the Congress has already provided.
Furthermore, H.R. 1144 does not authorize the appropriation of
additional funds to FEMA for disaster relief.
Intergovernmental and Private-sector Impact: H.R. 1144
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would authorize FEMA to convert to
grants certain disaster loans awarded after the 2005 hurricane
season. Local governments in Louisiana and Mississippi would
benefit from the cancellation of repayment requirements for
about $1.3 billion in loans.
Estimate prepared by: Federal Costs: Daniel Hoople; Impact
on State, Local, and Tribal Governments: Melissa Merrell;
Impact on the Private Sector: Fatimot Ladipo.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Compliance With House Rule XXI
Pursuant to clause 9 of rule XXI of the Rules of the House
of Representatives, H.R. 1144 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI
of the Rules of the House of Representatives.
Constitutional Authority Statement
Pursuant to clause (3)(d)(1) of rule XIII of the Rules of
the House of Representatives, committee reports on a bill or
joint resolution of a public character shall include a
statement citing the specific powers granted to the Congress in
the Constitution to enact the measure. The Committee on
Transportation and Infrastructure finds that Congress has the
authority to enact this measure pursuant to its powers granted
under article I, section 8 of the Constitution.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act (Public Law 104-4).
Preemption Clarification
Section 423 of the Congressional Budget Act of 1974
requires the report of any Committee on a bill or joint
resolution to include a statement on the extent to which the
bill or joint resolution is intended to preempt state, local,
or tribal law. The Committee states that H.R. 1144, as amended,
does not preempt any state, local, or tribal law.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act are created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Public Law
104-1).
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, existing law in which no change is
proposed is shown in roman):
COMMUNITY DISASTER LOAN ACT OF 2005
* * * * * * *
SEC. 2. DISASTER LOANS.
(a) Essential Services.--Of the amounts provided in Public
Law 109-62 for ``Disaster Relief'', up to $750,000,000 may be
transferred to the Disaster Assistance Direct Loan Program for
the cost of direct loans as authorized under section 417 of the
Robert T. Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5184) to be used to assist local governments in
providing essential services: Provided, That such transfer may
be made to subsidize gross obligations for the principal amount
of direct loans not to exceed $1,000,000,000 under section 417
of the Stafford Act: Provided further, That notwithstanding
section 417(b) of the Stafford Act, the amount of any such loan
issued pursuant to this section may exceed $5,000,000:
[Provided further, That notwithstanding section 417(c)(1) of
the Stafford Act, such loans may not be canceled:] Provided
further, That the cost of modifying such loans shall be as
defined in section 502 of the Congressional Budget Act of 1974
(2 U.S.C. 661a).
* * * * * * *
----------
EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT FOR DEFENSE, THE GLOBAL WAR
ON TERROR, AND HURRICANE RECOVERY, 2006
* * * * * * *
TITLE II
FURTHER HURRICANE DISASTER RELIEF AND RECOVERY
* * * * * * *
CHAPTER 4
DEPARTMENT OF HOMELAND SECURITY
* * * * * * *
Federal Emergency Management Agency
* * * * * * *
DISASTER ASSISTANCE DIRECT LOAN PROGRAM ACCOUNT
For an additional amount for ``Disaster Assistance Direct
Loan Program Account'' for the cost of direct loans as
authorized under section 417 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5184),
$279,800,000, to be used to assist local governments affected
by Hurricane Katrina and other hurricanes of the 2005 season in
providing essential services, of which $1,000,000 is for
administrative expenses to carry out the direct loan program:
Provided, That such funds may be made to subsidize gross
obligations for the principal amount of direct loans not to
exceed $371,733,000: Provided further, That notwithstanding
section 417(b) of such Act, the amount of any such loan issued
pursuant to this section may exceed $5,000,000, and may be
equal to not more than 50 percent of the annual operating
budget of the local government in any case in which that local
government has suffered a loss of 25 percent or more in tax
revenues due to Hurricane Katrina or Hurricane Rita: [Provided
further, That notwithstanding section 417(c)(1) of such Act,
such loans may not be canceled:] Provided further, That the
cost of modifying such loans shall be as defined in section 502
of the Congressional Budget Act of 1974 (2 U.S.C. 661a):
Provided further, That the amounts provided under this heading
are designated as an emergency requirement pursuant to section
402 of H. Con. Res. 95 (109th Congress), the concurrent
resolution on the budget for fiscal year 2006.
* * * * * * *
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