89–006 

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. 


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‘‘(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 ADMIN- ISTRATION 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 asVerDate Sep 11 2014 03:40 Dec 29, 2018 Jkt 089006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6621 E:\HR\OC\HR1107P1.XXX HR1107P1

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sistance 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 onefor-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; 


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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 


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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 


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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.). 


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‘‘(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 


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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 shortterm 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 


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‘‘[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. 


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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 


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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. 


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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 


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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 


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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 appro- priated 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 

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tion 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.— 


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(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 


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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, longterm 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 


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(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— 


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(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 

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ing $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 

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ment’’, 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 


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(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 


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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 GOVERN- MENT.— 

(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 idenVerDate Sep 11 2014 03:40 Dec 29, 2018 Jkt 089006 PO 00000 Frm 00024 Fmt 6659 Sfmt 6603 E:\HR\OC\HR1107P1.XXX HR1107P1

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tified 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. 

* * * * * * * 

Æ 


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