July 17, 2019

Reforming Disaster Recovery Act Advances out of House Financial Services Committee with Unanimous Bipartisan Support

On June 16, the House Financial Services Committee unanimously voted in support (58 -0) of the “Reforming Disaster Recovery Act of 2019” (H.R. 3702), which would strengthen and permanently authorize the Community Development Block Grant – Disaster Recovery (CDBG-DR) Program. Representative Al Green (D-TX-9) is the bill's sponsor, and Representative Ann Wagner (R-MO-2) is an original co-sponsor. H.R. 3702 will now go to the full House for a vote.

The bill builds off legislation from the 115th Congress sponsored by Rep. Wagner and will strengthen administration and oversight of the CDBG-DR Program to ensure that disaster recovery funds are distributed efficiently and equitably. In addition to codifying CDBG-DR in statute, H.R. 3702 includes provisions that:

  • Direct HUD to issue regulations for the CBDG-DR Program.
  • Prioritize funds for low and moderate-income disaster survivors.
  • Create a significant set-aside for disaster mitigation activities.
  • Ensure that investments result in infrastructure and communities resilient to future disasters.
  • Set reasonable timelines for allocation, action plans, and grant agreements.
  • Promote interagency coordination and data sharing between HUD, FEMA, and the SBA.
  • Create a capacity building and technical assistance set aside for grantees.
  • Direct HUD to issue a compilation of best practices and model language for action plans.

Committee Markup

In the Committee markup, the bill’s sponsor Rep. Al Green praised the bill for codifying the CDBG-DR Program so that HUD can respond expeditiously following major disasters. He bemoaned the current system which requires Congress, HUD, and grantees to reinvent the wheel after each disaster, losing lessons learned and institutional knowledge in the process. In his comments, Rep. Green highlighted that the bill will: direct HUD to set clear and consistent requirements; set a reasonable timeframe for approval of action plans, eliminating delays currently experienced by grantees; and codify in law that at least 70 percent of CDBG-DR resources benefit persons with low and moderate incomes.

Rep. Ann Wagner, an original co-sponsor and original sponsor of the legislation in the 115th Congress, highlighted the urgent need for CDBG-DR permanent authorization. The program plays a vital role in funding long-term recovery and helping neighborhoods and households with limited resources to rebuild. She noted the HUD Office of Inspector General (HUD OIG) audit from July 2018, which found that in 2017 more than 60 Federal Register notices oversaw 113 active CDBG-DR grants which amounted to over $47 billion – an amount that has only grown since then. This ad hoc process causes unnecessary delay, confusion, and burden on grantees and disaster applicants. She lauded the bill for providing a framework for future disasters that will speed assistance for grantees and disaster victims; increase oversight and accountability of how CDBG-DR funds are spent; and ensure that funds reach the most vulnerable people.

Enterprise applauds Chairwoman Maxine Waters (D-CA-43), Reps. Green and Wagner, and other members of the Committee for their persistence and bipartisan approach that led to yesterday’s significant achievement.

Prioritizing Low and Moderate-Income Households

The bill codifies in law that no less than 70 percent of funds benefit people with low and moderate incomes. In their action plans and rebuilding programs, grantees must also: equitably allocate funds between housing and infrastructure and between homeowners, renters, and people experiencing homelessness; prioritize one-for-one replacement of federally subsidized housing; and include a description of how the use of funds with comply with civil rights and fair housing laws and regulations.

Rulemaking and Best Practices

Permanent authorization will create framework for future CDBG-DR grantees. The bill directs HUD to issue proposed legislation no more than six months after enactment, conduct a 90-day open comment period, and issue a final rule no more than 12 months after enactment. Formal regulations will remove roadblocks that slow down recovery and result in fairer and more consistent recovery outcomes. Additionally, the bill directs HUD to develop a compilation of best practices either through regulation or Federal Register notice, that includes: guidelines for housing and economic development programs and mitigation activities and model language on program design for grantees to incorporate into action plans.

Resilience Standards and Mitigation

The bill includes a significant set aside for disaster mitigation, requiring HUD to include a set aside for mitigation that is no less than 45 percent of the amount awarded to a grantee for unmet needs. A report from the National Institute of Building Sciences (NIBS) found every dollar that the federal government spends on mitigation saves $6 in future disaster recovery costs. The legislation also requires any structure located in a special flood hazard area being rebuilt or rehabilitated with CDBG-DR funds to be elevated to at least two feet above the base flood level. Enterprise supports these resilience standards and investments in mitigation so that disaster recovery programs do not rebuild communities in harm’s way and throw away good money after bad.

Next Steps

Enterprise strongly supports H.R. 3702 and will continue to advocate and build support for its passage in the House. We encourage our partners to reach out to their Representatives and urge them to support H.R. 3702 to make our nation’s disaster recovery framework more efficient, consistent, and fair. Companion legislation is expected to be introduced in the Senate this month.