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[House Report 109-607]
[From the U.S. Government Publishing Office]

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 long-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 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 large-scale 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 favorable 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 long-term 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.

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 
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.

                   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 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.
          [(2)] (3) Determination of appropriate types of 
        assistance.--
                  (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 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 
                assistance.--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--
                          [(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
                          [(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 [this 
                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 
                [this paragraph] 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 
        construction.--The President may provide financial 
        assistance or direct assistance to individuals or 
        households to construct permanent or semi-permanent 
        housing [in insular areas] in--
                  (A) insular areas outside the continental 
                United States and in other remote locations in 
                cases in which--
                          [(A)] (i) no alternative housing 
                        resources are available; and
                          [(B)] (ii) the types of temporary 
                        housing assistance described in 
                        paragraph (1) are unavailable, 
                        infeasible, or not cost-effective[.]; 
                        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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