49–006 

109TH CONGRESS REPT. 109–607 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

NATURAL DISASTER HOUSING REFORM ACT OF 2006 

JULY 28, 2006.—Ordered to be printed 

Mr. OXLEY, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 5393] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 5393) to provide for the Department of Housing and 

Urban Development to coordinate Federal housing assistance efforts in the case of disasters resulting in long-term housing needs, 

having considered the same, report favorably thereon without 

amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1 

Background and Need for Legislation .................................................................... 2 

Hearings ................................................................................................................... 3 

Committee Consideration ........................................................................................ 3 

Committee Votes ...................................................................................................... 3 

Committee Oversight Findings ............................................................................... 4 

Performance Goals and Objectives ......................................................................... 4 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 4 

Committee Cost Estimate ....................................................................................... 4 

Congressional Budget Office Estimate ................................................................... 4 

Federal Mandates Statement ................................................................................. 6 

Advisory Committee Statement .............................................................................. 6 

Constitutional Authority Statement ...................................................................... 7 

Applicability to Legislative Branch ........................................................................ 7 

Section-by-Section Analysis of the Legislation ...................................................... 7 

Changes in Existing Law Made by the Bill, as Reported ..................................... 8 

PURPOSE AND SUMMARY

H.R. 5393, the ‘‘Natural Disaster Housing Reform Act of 2006’’ 

has two main functions: to designate the Department of Housing 

and Urban Development (HUD) as the lead Federal agency in natural disasters (subject to a Stafford Act declaration) where longVerDate Aug 31 2005 05:33 Aug 01, 2006 Jkt 049006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR607P1.XXX HR607P1
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term housing needs exist and to make changes to the Stafford Act 

to facilitate post-Katrina recovery. 

H.R. 5393 would allow, after a Presidential disaster declaration 

under the Stafford Act, a governor to request that the President 

find a long-term housing response. Upon making a finding that disaster victims may be displaced from their residences for more than 

30 days, the President may designate HUD as the lead agency to 

provide housing assistance to disaster victims. Housing assistance 

is broadly defined in order to provide HUD a comprehensive array 

of options to meet long-term housing needs. This flexibility will 

offer significant improvements to existing law that sharply limits 

housing options for disaster victims. While HUD is the lead agency, 

DHS primacy in the management of natural disaster response is 

retained. 

The legislation also amends the Stafford Act in the following 

ways: 

—Allows a disaster victim to reject an offer for a travel trailer 

without being denied other forms of housing assistance. 

—Requires that a disaster victim be notified before a travel trailer is delivered to or placed on their property. 

—Allows a disaster victim to contribute their own funds in order 

to meet cost-effectiveness criteria for temporary housing other than 

a travel trailer. 

—Authorizes the use of ‘‘Katrina Cottages’’, a form of modular 

housing. 

—Limits the concentration of trailers on a site to no more than 

3 to avoid the creation of FEMA trailer parks. 

—Requires Federal, state and local governments to create evacuation plans for disaster victims occupying FEMA trailers in the 

event of an impending disaster. 

—Authorizes DHS/FEMA to pay security deposits, utility fees 

and make minor repairs to rental units to make them fit for occupation. 

—Authorizes the placement of modular and manufactured housing in special flood hazard areas. 

BACKGROUND AND NEED FOR LEGISLATION

Hurricane Katrina and the floods accompanying the storm destroyed or rendered uninhabitable more than 300,000 residences 

and caused $96 billion in estimated damage to the Gulf Coast region, making it the most costly natural disaster in the nation’s history. The scale and scope of the event almost immediately overwhelmed natural disaster response mechanisms at all levels of government. The housing crisis was compounded by limitations in current law. One of the immediate crises to quickly escalate in severity related directly to the substantial damage inflicted upon residential properties and surrounding infrastructure. Acting through 

mechanisms available to the Federal government, displaced residents were housed in emergency shelters, on cruise ships and in 

hotel rooms. According to FEMA data, these arrangements remained in force for several months at a cost of more than $4 billion. 

As recovery began its slow start, the government, again acting 

through existing authority, began an aggressive campaign to purchase temporary housing in the form of travel trailers. According 

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to FEMA data, more than 122,000 mobile home units were purchased for the purpose of housing storm victims with a cost to the 

government to purchase these units at approximately $7.58 billion. 

Follow-on costs required to site and inspect these units resulted in 

an average per unit cost of $70,000, culminating in approximately 

at the very least $12.58 billion in expenses related to temporary 

housing. 

In response to the multiple levels of failure to respond to the 

storm and its aftermath, the Administration conducted a review of 

government performance across all areas of responsibility, including the provision of disaster housing resources. The Administration 

found that ‘‘the Departments of Veterans Affairs (VA), Housing and 

Urban Development (HUD), and Agriculture (USDA) also offered 

thousands of housing units nationwide to FEMA for temporary assignment to evacuees. FEMA officials stated that the need to negotiate conditional requirements in some cases prevented them from 

accepting some Federal agencies’ offers of housing resources. Most 

of the thousands of housing units made available by other Federal 

agencies were not offered to evacuees and were never used.’’ 

Moreover, the Administration found that despite offers from the 

Departments of Veterans Affairs (VA), Housing and Urban Development (HUD) and Agriculture (USDA) as well as the private sector to provide thousands of housing units nationwide, FEMA focused its housing efforts on cruise ships and trailers, which were 

expensive. HUD, with extensive expertise and perspective on largescale housing challenges and its nation-wide relationships with 

State public housing authorities, was not substantially engaged by 

FEMA in the housing process until late in the effort. FEMA’s temporary and long-term housing efforts also suffered from the failure 

to pre-identify workable sites and available land and the inability 

to take advantage of housing units available with other Federal 

agencies. 

Such findings led to an Administration recommendation that 

HUD be designated as lead Federal agency for the provision of 

more flexible and cost effective housing assistance in the event of 

a natural disaster. Further, the Administration acknowledged the 

need to emphasize locating independent housing as a means of utilizing existing and available housing resources and limiting the use 

of travel trailers and mobile homes. 

HEARINGS

No hearings were held on H.R. 5393 during the 109th Congress. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

June 14, 2006, and ordered reported H.R. 5393, the Natural Disaster Housing Reform Act of 2006, to the House by a 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. No record votes were 

taken with in conjunction with the consideration of this legislation. 

A motion by Mr. Oxley to report the bill to the House with a favorVerDate Aug 31 2005 05:33 Aug 01, 2006 Jkt 049006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR607P1.XXX HR607P1
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able recommendation was agreed to by a voice vote. During the 

consideration of this bill, no amendments were considered. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held hearings and made 

findings that are reflected in 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 establishes the following performance related goals and objectives for this legislation: 

H.R. 5393, the ‘‘Natural Disaster Housing Reform Act of 2006’’ 

has two main functions: to designate the Department of Housing 

and Urban Development (HUD) as the lead Federal agency in natural disasters (subject to a Stafford Act declaration) where longterm housing needs exist and to make changes to the Stafford Act 

to facilitate post-Katrina recovery. These changes will offer significant improvements to existing law that sharply limits housing options for disaster victims. 

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. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own 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 ESTIMATE

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: 

JULY 28, 2006. 

Hon. MICHAEL G. OXLEY, 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. 5393, the Natural Disaster Housing Reform Act of 2006. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Julie Middleton. 

Sincerely, 

DONALD B. MARRON, 

Acting Director. 

Enclosure. 

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H.R. 5393—Natural Disaster Housing Reform Act of 2006 

Summary: H.R. 5393 would make the Department of Housing 

and Urban Development (HUD) the lead agency to distribute housing assistance following a major disaster if the area affected by the 

disaster will need long-term housing assistance of 30 days or more. 

Under the bill, HUD would be responsible for providing financial 

assistance, temporary or permanent housing units, assistance for 

home repair, and technical assistance following major disasters. 

Assuming appropriation of the necessary funds, CBO estimates that implementing H.R. 5393 would cost $9 million over the 2007– 

2011 period, mostly for new planning activities and additional staff 

at these agencies. CBO expects that there would be no significant 

change in the cost of providing housing assistance following a 

major disaster under this bill because the federal agency administering housing benefits would change, but the benefits available 

to households would not be changed. Enacting this bill would not 

affect direct spending or revenues. 

H.R. 5393 contains an intergovernmental mandate as defined in 

the Unfunded Mandates Reform Act (UMRA) because it would authorize the Secretary of HUD to preempt state and local regulation 

of flood plains. CBO estimates that state and local governments 

would incur little, if any, direct costs as a result of that preemption; therefore, the annual threshold established in UMRA would 

not be exceeded ($64 million in 2006, adjusted annually for inflation). The bill contains no new private-sector mandates as defined 

in UMRA. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 5393 is shown in the following table. The costs 

of this legislation fall within budget function 450 (community and 

regional development). 

By fiscal year, in millions of dollars— 

2007 2008 2009 2010 2011 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ................................................................................ 2 2 2 2 2 

Estimated Outlays ................................................................................................... 1 2 2 2 2 

Basis of estimate: For this estimate, CBO assumes that H.R. 

5393 will be enacted near the end of 2006 and that the necessary 

amounts will be appropriated for each year. Estimates of outlays 

are based on historical spending patterns for this activity. Assuming appropriation of the necessary funds, CBO estimates that implementing H.R. 5393 would cost $9 million over the 2007–2011 period. 

Under current law, the Federal Emergency Management Agency 

(FEMA) provides financial and other assistance after a disaster 

through the Individuals and Households Program (IHP). The IHP 

provides up to $27,200 in financial help and housing assistance, including temporary housing and repair and replacement of housing, 

as well as other assistance following a major disaster. Households 

can receive IHP assistance for up to 18 months. Under current law, 

HUD assists FEMA with the disaster housing assistance program. 

Under H.R. 5393, FEMA would continue to manage the housing 

assistance program for a period of up to 29 days. If assistance is 

needed after 29 days, HUD would become the primary federal 

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agency administering the housing assistance program in conjunction with FEMA. For this estimate, CBO estimates that HUD 

would need to increase the number of staff working in its disaster 

housing program at a cost of less than $500,000 a year. 

In addition, the bill would require FEMA to develop evacuation 

plans for areas where a disaster has been declared, and FEMA is 

providing assistance under IHP. FEMA would be required to maintain the plans for 18 months beginning on the date the disaster is 

declared. Based on information from FEMA, CBO estimates that 

developing evacuation plans for the 40 to 50 disasters that are typically declared each year would cost from $1 million to $2 million 

a year. 

Finally, the bill would direct FEMA, when practical, to site temporary manufactured housing units used to provide emergency 

housing assistance on individual parcels of property and to limit 

the number of units that could be placed on each parcel to three. 

This provision could make citing temporary housing more costly 

than establishing large concentrations of emerging manufactured 

housing limits. CBO cannot predict whether FEMA would find it 

practicable to locate temporary housing in this way, nor whether 

any additional costs would be significant. 

Estimated impact on State, local, and tribal governments: H.R. 

5393 contains an intergovernmental mandate as defined in UMRA 

because it would authorize the Secretary of HUD to preempt state 

and local regulation of flood plains. Under current federal regulations, mobile homes or readily fabricated dwellings, provided by the 

federal government in response to a disaster, may not be placed in 

a flood zone if such placement is inconsistent with the National 

Flood Insurance Program or more restrictive standards of state and 

local governments. This bill would preempt those more restrictive 

standards by allowing the Director of FEMA to locate permanent, 

semi-permanent, or temporary housing in those flood zones, regardless of federal, state, or local regulations that prohibit such activity. 

CBO estimates that state and local governments would incur little, 

if any, direct costs as a result of that preemption; therefore, the annual threshold established in UMRA would not be exceeded ($64 

million in 2006, adjusted annually for inflation). 

Estimated impact on the private sector: This bill contains no new 

private-sector mandates as defined in UMRA. 

Estimate prepared by: Federal Costs: Julie Middleton. 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. 

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. 

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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CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the general welfare of the 

United States) and clause 3 (relating to the power to regulate interstate commerce). 

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 section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section establishes the short title of the bill, the ‘‘Natural 

Disaster Housing Reform Act of 2006.’’ 

Section 2. HUD as lead agency in cases of disasters resulting in 

long-term housing needs 

This section provides that HUD will be designated as lead Federal agency in those instances where a natural disaster results in 

long-term housing needs. HUD would be required to consult with 

DHS and FEMA in the execution of these duties and will staff, 

train and equip its headquarters, regional, field and area offices to 

execute these duties. The section also broadly defines housing assistance to include financial assistance, provision of transitional, 

temporary and permanent housing units, as well as assistance for 

the repair, replacement and construction of housing. 

This section also outlines the process for determining if long-term 

housing needs exists is as follows: Governor assesses damage to 

housing stock, makes a finding that individuals and families will 

be displaced from primary residences for a period of more than 30 

days and makes a request to the President for long-term housing 

assistance; the President assesses housing needs in the disaster 

area (or any subdivisions of a disaster area) and issues a determination with regard to the Governor’s request; and the President 

will provide any long-term housing assistance exclusively through 

HUD, however the DHS/FEMA will retain their primacy in coordinating the response to natural disasters. 

Section 3. Federal assistance to individual households 

This section authorizes the use of modular housing in those instances where it is cost-effective or no more expensive to do so. The 

section provides that individuals and households must be contacted 

prior to being provided manufactured housing assistance and if 

such assistance is rejected, will remain eligible for other forms of 

disaster housing assistance. Individuals may also contribute from 

their own funds to make modular housing a cost-effective option for 

the Federal government. 

The section also sets forth the authority for DHS/FEMA to pay 

security deposits, utility fees and make minor repairs to rental 

8 

units to make them fit for occupation. The section authorizes the 

use of semi-permanent housing as a form of disaster housing assistance to individuals and families, authorizes the placement of 

modular and manufactured housing in special flood hazard areas, 

discourages the creation of trailer parks or trailer cities as a form 

of disaster housing assistance and requires DHS/FEMA, states and 

communities to create and maintain disaster evacuation plans for 

individuals and families receiving disaster housing assistance. 

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): 

SECTION 408 OF THE ROBERT T. STAFFORD DISASTER 

RELIEF AND EMERGENCY ASSISTANCE ACT 

SEC. 408. FEDERAL ASSISTANCE TO INDIVIDUALS AND HOUSEHOLDS. 

(a) * * * 

(b) HOUSING ASSISTANCE.— (1) * * * 

(2) DETERMINATION OF AREAS FOR WHICH DISASTER RESULTS

IN LONG-TERM HOUSING NEEDS.— (A) STATE REQUEST.—After the occurrence and declaration of a major disaster, the Governor of a State containing 

any area that is subject to the declaration by the President 

of such major disaster may request the President to determine, for all or any part of such area in the State, that the 

disaster will result in long-term housing needs. 

(B) STANDARD.—Upon a request pursuant to subparagraph (A), the President shall determine whether to grant 

such request. The President shall grant such a request and 

determine that the major disaster will result in long-term 

housing needs with respect to an area if the President finds 

that the disaster will displace individuals or households in 

the area from their predisaster primary residences, or will 

render such predisaster primary residences in the area uninhabitable, for a period of 30 days or more. 

ø(2)¿ (3) DETERMINATION OF APPROPRIATE TYPES OF ASSIST- ANCE.— 

(A) * * * 

* * * * * * * 

(C) MANUFACTURED MODULAR HOUSING.—In making any 

determination of cost effectiveness under subparagraph (A), 

the President shall consider whether or not manufactured 

modular housing can be provided to an individual or 

household at a cost to the Government that is less than the 

same cost necessary to provide other readily fabricated 

dwellings. 

(4) HUD ADMINISTRATION.—In accordance with section 2 of 

the Natural Disaster Housing Reform Act of 2006, in the case 

of any area for which any major disaster is determined, pursuant to paragraph (2), to result in long-term housing needs, the 

9 

President shall carry out the functions under this section relating to housing assistance, including this subsection and subsections (c) and (d), acting through the Secretary of Housing 

and Urban Development. 

(5) CONSENT OF OWNER.— (A) IN GENERAL.—Notwithstanding paragraph (2), the 

President shall seek the consent of each individual or 

household prior to providing such individual or household 

with manufactured modular housing assistance. 

(B) REJECTION OF MANUFACTURED MODULAR HOUSING AS- SISTANCE.—If an individual or household does not provide 

consent under subparagraph (A), such individual or household shall remain eligible for any other assistance available under this section. 

(6) OWNER CONTRIBUTION.—Nothing in this section shall be 

construed to prevent an individual or household from contributing, in addition to any assistance provided under this section, 

such sums as are necessary in order to obtain manufactured 

modular housing that is of greater size or quality than that provided by the President under this section. 

(c) TYPES OF HOUSING ASSISTANCE.— (1) TEMPORARY HOUSING.— (A) FINANCIAL ASSISTANCE.— (i) * * * 

(ii) AMOUNT.—The amount of assistance under 

clause (i) shall be based on the fair market rent for 

the accommodation provided plus the amount of any 

security deposit for the accomodation, the amount of 

any utility fees associated with the accomodation, and 

the cost of any transportation, utility hookups, or unit 

installation not provided directly by the President. 

* * * * * * * 

(2) REPAIRS.— (A) IN GENERAL.—The President may provide financial 

assistance for— 

ø(i)¿ (i)(I) the repair of owner-occupied private residences, utilities, and residential infrastructure (such 

as a private access route) damaged by a major disaster 

to a safe and sanitary living or functioning condition; 

and 

ø(ii)¿ (II) eligible hazard mitigation measures that 

reduce the likelihood of future damage to such residences, utilities, or infrastructure. 

(ii) the repair, to a safe and sanitary living or functioning condition, of existing rental units that, upon 

such repair, will be used as alternate housing 

accomodations for individuals or households described 

in paragraph (1). 

(B) RELATIONSHIP TO OTHER ASSISTANCE.—A recipient of 

assistance provided under øthis paragraph¿ subparagraph 

(A)(i) shall not be required to show that the assistance can 

not be met through other means, except insurance proceeds. 

(C) MAXIMUM AMOUNT OF ASSISTANCE.—The amount of 

assistance provided to a household under øthis paragraph¿ 

10 

subparagraph (A)(i) shall not exceed $5,000, as adjusted 

annually to reflect changes in the Consumer Price Index 

for All Urban Consumers published by the Department of 

Labor. 

* * * * * * * 

(4) PERMANENT OR SEMI-PERMANENT HOUSING CONSTRUC- TION.—The President may provide financial assistance or direct assistance to individuals or households to construct permanent or semi-permanent housing øin insular areas¿ in— 

(A) insular areas outside the continental United States 

and in other remote locations in cases in which— 

ø(A)¿ (i) no alternative housing resources are available; and 

ø(B)¿ (ii) the types of temporary housing assistance 

described in paragraph (1) are unavailable, infeasible, 

or not cost-effectiveø.¿; and 

(B) any area in which the President declared a major 

disaster or emergency in connection with Hurricane 

Katrina of 2005 during the period beginning on August 28, 

2005, and ending on December 31, 2007. 

(d) TERMS AND CONDITIONS RELATING TO HOUSING ASSISTANCE.— 

(1) SITES.— 

(A) * * * 

* * * * * * * 

(C) SITES LOCATED IN A FLOODPLAIN.—Notwithstanding 

any other provision of law, including section 9 of title 44, 

Code of Federal Regulations (or any corresponding similar 

regulation or ruling), any permanent, semi-permanent, or 

temporary housing provided under this section, including 

any readily fabricated dwelling, manufactured housing, or 

manufactured modular housing, may be located in any 

area identified by the Director as an area having special 

flood hazards under section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a)). 

(D) INDIVIDUAL SITES FOR MANUFACTURED MODULAR

HOUSING.—Manufactured modular housing made available 

under this section— 

(i) shall, whenever practicable, be located on a site 

that is a discrete and separate parcel of land; and 

(ii) may not be located on a site that— 

(I) is managed by the Director; and 

(II) contains 3 or more other manufactured modular housing units. 

* * * * * * * 

(j) EVACUATION PLANS.—The Director, in consultation with the 

Governor of each State and the heads of such units of local government as the Director may determine, shall develop and maintain detailed and comprehensive mass evacuation plans for individuals or 

households receiving assistance under this section for the 18-month 

period beginning on the date of the declaration of the disaster for 

which such assistance is provided. 

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