Senate Homeland Security Committee Issues Report on Safeguarding Tomorrow Through Ongoing Risk Mitigation Act
I. Purpose and Summary
S. 3418, the Safeguarding Tomorrow through Ongoing Risk Management Act of 2020, or the "STORM Act", authorizes the Administrator of the
To be eligible to receive capitalization grants, the state must develop a statewide hazard mitigation plan. If localities want to be eligible for the capitalization grant that the state has received, local governments must supply the state with project proposals, assessments of recurring disaster vulnerabilities, and a description of how those projects would address the goals of the state's hazard mitigation plan. Projects should be prioritized if they: increase resilience or risk of harm to infrastructure; take regional impact hazards into account; and/ or provide resilience for major economic sectors or critical national infrastructure.
II. Background and the Need for Legislation According to the
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More concerning is that trend analysis suggests these events are increasing.
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For example, in 2019, the
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Fluctuating water levels in the
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There are numerous Federal mitigation grant programs that help states, cities, and communities rebuild. Many of the programs are implemented to offer assistance after a disaster passes or subsides. But hazard mitigation assistance is one identified area that can help increase resilience before disasters strike.
According to the
/11/National Hazard Mitigation Saves Interim Report Fact Sheet, FEMA Fed. Ins. & Mitigation Admin. (
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This legislation aims to provide states with funding that will help them execute their own hazard mitigation projects. In order to be eligible for consideration for a grant, state and local governments must establish their own hazard mitigation plans and prove that identified projects will reduce disaster risk and decrease the loss of life and property, the cost of insurance, and Federal disaster payments. Furthermore, the hazard mitigation assistance will come in the form of a revolving loan fund, "pools of capital from which loans can be made for . . . projects--as loans are repaid, the capital is then reloaned for another project."/13/ Although these loans can be offered through private investment, "[g]overnmentsponsored [revolving loan funds] typically offer lower interest rates and/or more flexible terms than are available in commercial capital markets."/14/
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As the
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/15/Coalition Letter on H.R. 3779, the "Resilience Revolving Loan Fund Act of 2019",
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It is
III. Legislative History
Ranking Member
The Committee considered S. 3418 at a business meeting on
Pursuant to Committee rules, the bill is being reported with technical amendments.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short title
This section established that the bill may be cited as the "Safeguarding Tomorrow through Ongoing Risk Management Act of 2020" or the "STORM Act".
Section 2. Grants to Entities for Establishment of Hazard Mitigation Revolving Loan Funds
Section 2 adds a new Section 205 to the Robert T. Stafford Disaster Relief and Emergency Assistance Act under Title II.
New Section 205 subsection (a) lays out the general authorities of the hazard mitigation capitalization grant.
Those authorities provide that the Administrator of
New Section 205 subsection (b) lays out what an entity must provide
New Section 205 subsection (c) requires an entity that receives a capitalization grant to establish an entity loan fund through its respective emergency management agency. The established entity loan fund should only consist of funds provided by the capitalization grant, repayments of loans from the capitalization grants, and interest earned on amounts in the entity loan fund. The subsection requires the entity to deposit an amount no less than 10 percent of the amount of the capitalization grant. If the deposit from the entity is less than 10 percent the amount of the capitalization grant, the Administrator of
New Section 205 subsection (d) requires the Administrator of
New Section 205 subsection (e) allows the Administrator of
New Section 205 subsection (f) limits how entities that received capitalization grants can use those grants to provide loans and also restricts how that entity can use: the deposit required by the entity at the time of receiving the capitalization grant; any loan repayments made to the entity; and any interest carried on such amount. This subsection requires that loans an entity provides from the capitalization grant do not exceed an interest rate of one percent. Annual principal and interest payments must start no later than one year after the completion of projects for which the grant was made and must be fully paid off within twenty years, except for loans provided to projects in low-income geographic areas, which must be paid off within thirty years. In order to be eligible to receive a loan, this section requires that the recipient: establish a dedicated revenue source to repay the loan; have a hazard mitigation plan in place that has been approved by the Administrator of
Under new Section 205 subsection (g), eligible entities have to annually provide the Administrator of
New Section 205 subsection (h) requires all participating entities to biennially conduct an audit of the entity loan fund and provide the Administrator of
New Section 205 subsection (i) requires the Administrator of
New Section 205 subsection (j) states that
New Section 205 subsection (k) defines: the term "Administrator" as the Administrator of
New Section 205 subsection (l) authorizes an appropriation of
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule XXVI of the Standing Rules of the
VI. Congressional Budget Office Cost Estimate
U.S.
Hon.
Dear Mr. Chairman: The
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is
Sincerely,
Enclosure.
Bill summary: S. 3418 would authorize the appropriation of
Estimated Federal cost: The estimated budgetary effect of S. 3418 is shown in Table 1. The cost of the legislation falls within budget function 450 (community and regional development).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 3418
[Table omitted]
View table at https://www.congress.gov/congressional-report/116th-congress/senate-report/249/1?s=2&r=5
Basis of estimate: For this estimate, CBO assumes that the legislation will be enacted in 2020 and that the authorized and estimated amounts will be provided beginning in 2021. Estimated outlays are based on historical spending patterns for similar programs.
Spending subject to appropriation: CBO estimates that implementing S. 3418 would cost
Grants for hazard mitigation: S. 3418 would authorize the appropriation of
To implement the bill, CBO estimates that
Administrative costs: S. 3418 would authorize
Those amounts would cover the cost of 10 new staff members, contract support, technical assistance to states, and other operating costs.
Revenues: The staff of the
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in revenues that are subject to those pay-as-you-go procedures are shown in Table 2.
TABLE 2.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF S. 3418, THE STORM ACT, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
[Table omitted]
View table on the link above.
Increase in long-term deficits: CBO estimates that enacting S. 3418 would not increase deficits by more than
Mandates: None.
Previous estimate: On
Estimate prepared by: Federal Costs:
Estimate reviewed by:
VII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the Standing Rules of the
ROBERT T. STAFFORD DISASTER RELIEF AND EMERGENCY ASSISTANCE ACT
TITLE II--DISASTER PREPAREDNESS AND MITIGATION ACTIVITIES
(a) General Authority.--
(1) In general.--The Administrator may enter into agreements with eligible entities to make capitalization grants to such entities for the establishment of hazard mitigation revolving loan funds (referred to in this section as `entity loan funds') for providing funding assistance to local governments to carry out eligible projects under this section to reduce disaster risk in order to decrease(A) the loss of life and property;
(B) the cost of insurance; and
(C) Federal disaster payments.
(2) Agreements.--Any agreement entered into under this section shall require the participating entity to--
(A) comply with the requirements of this section; and
(B) use accounting, audit, and fiscal procedures conforming to generally accepted accounting standards.
(b) Application.--
(1) In general.--To be eligible to receive a capitalization grant under this section, an eligible entity shall submit to the Administrator an application that includes the following:
(A) Project proposals comprised of local government hazard mitigation projects, on the condition that the entity provides public notice not less than 6 weeks prior to the submission of an application.
(B) An assessment of recurring major disaster vulnerabilities impacting the entity that demonstrates a risk to life and property.
(C) A description of how the hazard mitigation plan of the entity has or has not taken the vulnerabilities described in subparagraph (B) into account.
(D) A description about how the projects
described in subparagraph (A) could conform with the hazard mitigation plan of the entity and of the unit of local government.
(E) A proposal of the systematic and regional approach to achieve resilience in a vulnerable area, including impacts to river basins, river corridors, watersheds, estuaries, bays, coastal regions, micro-basins, micro-watersheds,
ecosystems, and areas at risk of earthquakes, tsunamis, droughts, and wildfires.
(2) Technical assistance.--The Administrator shall provide technical assistance to eligible entities for applications under this section.
(c) Entity Loan Fund.--
(1) Establishment of fund.--An entity that receives a capitalization grant under this section shall establish an entity loan fund that complies with the requirements of this subsection.
(2) Fund management.--Except as provided in paragraph (3), entity loan funds shall--
(A) be administered by the agency responsible for emergency management; and
(B) include only--
(i) funds provided by a capitalization grant under this section;
(ii) repayments of loans under this section to the entity loan fund; and
(iii) interest earned on amounts in the entity loan fund.
(3) Administration.--A participating entity may combine the financial administration of the entity loan fund of such entity with the financial administration of any other revolving fund established by such entity if the Administrator determines that--
(A) the capitalization grant, entity share, repayments of loans, and interest earned on amounts in the entity loan fund are accounted for separately from other amounts in the revolving fund; and
(B) the authority to establish assistance priorities and carry out oversight activities remains in the control of the entity agency responsible for emergency management.
(4) Entity share of funds.--
(A) In general.--On or before the date on which a participating entity receives a capitalization grant under this section, the entity shall deposit into the entity loan fund of such entity, an amount equal to not less than 10 percent of the amount of the capitalization grant.
(B) Reduced grant.--If, with respect to a capitalization grant under this section, a participating entity deposits in the entity loan fund of the entity an amount that is less than 10 percent of the total amount of the capitalization grant that the participating entity would otherwise receive, the Administrator shall reduce the amount of the capitalization grant received by the entity to the amount that is 10 times the amount so deposited.
(d) Apportionment.--
(1) In general.--Except as otherwise provided by this subsection, the Administrator shall apportion funds made available to carry out this section to entities that have entered into an agreement under subsection (a)(2) in amounts as determined by the Administrator.
(2) Reservation of funds.--The Administrator shall reserve not more than 2.5 percent of the amount made available to carry out this section for the
(A) administrative costs incurred in carrying out this section;
(B) providing technical assistance to participating entities under subsection (b)(2); and
(C) capitalization grants to insular areas under paragraph (4).
(3) Priority.--In the apportionment of capitalization grants under this subsection, the Administrator shall give priority to entity applications under subsection (b) that--
(A) propose projects increasing resilience and reducing risk of harm to natural and built infrastructure;
(B) involve a partnership between 2 or more eligible entities to carry out a project or similar projects;
(C) take into account regional impacts of hazards on river basins, river corridors, micro-watersheds, macro-watersheds, estuaries, lakes, bays, and coastal regions and areas at risk of earthquakes, tsunamis, droughts, and wildfires; or
(D) propose projects for the resilience of major economic sectors or critical national infrastructure, including ports, global commodity supply chain assets (located within an entity or within the jurisdiction of local governments, insular areas, and tribal governments), power and water production and distribution centers, and bridges and waterways essential to interstate commerce.
(4) Insular areas.--
(A) Apportionment.--From any amount remaining of funds reserved under paragraph (2), the Administrator may enter into agreements to provide capitalization grants to insular areas.
(B) Requirements.--An insular area receiving a capitalization grant under this section shall comply with the requirements of this section as applied to participating entities.
(e) Environmental Review of Revolving Loan Fund Projects.The Administrator may delegate to a participating entity all of the responsibilities for environmental review, decision making, and action pursuant the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), and other applicable Federal environmental laws including the Endangered Species Act of 1973 (16 U.S.C.
(f) Use of Funds.--
(1) Types of assistance.--Amounts deposited in an entity loan fund, including loan repayments and interest earned on such amounts, may be used(A) to make loans, on the condition that(i) such loans are made at an interest rate of not more than 1 percent;
(ii) annual principal and interest payments will commence not later than 1 year after completion of any project and all loans made under this subparagraph will be fully amortized--
(I) not later than 20 years after the date on which the project is completed; or (II) for projects in a low-income geographic area, not later than 30 years after the date on which the project is completed and not longer than the expected design life of the project; (iii) the loan recipient of a loan under this subparagraph establishes a dedicated source of revenue for repayment of the loan;
(iv) the loan recipient of a loan under this subparagraph has a hazard mitigation plan that has been approved by the Administrator; and
(v) the entity loan fund will be credited with all payments of principal and interest on all loans made under this subparagraph;
(B) for mitigation efforts, in addition to mitigation planning under section 322 not to exceed 10 percent of the capitalization grants made to the participating entity in a fiscal year;
(C) for the reasonable costs of administering the fund and conducting activities under this section, except that such amounts shall not exceed
(D) to earn interest on the entity loan fund.
(2) Prohibition on determination that loan is a duplication.--In carrying out this section, the Administrator may not determine that a loan is a duplication of assistance or programs under this Act.
(3) Projects and activities eligible for assistance.--Except as provided in this subsection, a participating entity may use funds in the entity loan fund to provide financial assistance for projects or activities that mitigate the impacts of natural hazards including--
(A) drought and prolonged episodes of intense heat;
(B) severe storms, including hurricanes, tornados, wind storms, cyclones, and severe winter storms;
(C) wildfires;
(D) earthquakes;
(E) flooding;
(F) shoreline erosion;
(G) high water levels; and
(H) storm surges.
(4) Zoning and land use planning changes.--A participating entity may use not more than 10 percent of a capitalization grant under this section to enable units of local government to implement zoning and land use planning changes focused on--
(A) the development and improvement of zoning and land use codes that incentivize and encourage low-impact development, resilient wildland-urban interface land management and development, natural infrastructure, green stormwater management, conservation areas adjacent to floodplains, implementation of watershed or greenway master plans, and reconnection of floodplains;
(B) the study and creation of agricultural risk compensation districts where there is a desire to remove or set-back levees protecting highly developed agricultural land to mitigate for flooding, allowing agricultural producers to receive compensation for assuming greater flood risk that would alleviate flood exposure to populations centers and areas with critical national infrastructure;
(C) the study and creation of land use incentives that reward developers for greater reliance on low impact development stormwater best management practices, exchange density increases for increased open space and improvement of neighborhood catch basins to mitigate urban flooding, reward developers for including and augmenting natural infrastructure adjacent to and around building projects without reliance on increased sprawl, and reward developers for addressing wildfire ignition; and
(D) the study and creation of an erosion response plan that accommodates river, lake, forest, plains, and ocean shoreline retreating or bluff stabilization due to increased flooding and disaster impacts.
(5) Establishing and carrying out building code enforcement.--A participating entity may use capitalization grants under this section to enable units of local government to establish and carry out the latest published editions of relevant building codes, specifications, and standards for the purpose of protecting the health, safety, and general welfare of the buildings users against disasters and natural hazards.
(6) Administrative and technical costs.--For each fiscal year, a participating entity may use the amount described in paragraph (1)(C) to--
(A) pay the reasonable costs of administering the programs under this section, including the cost of establishing an entity loan fund; and (B) provide technical assistance to recipients of financial assistance from the entity loan fund, on the condition that such technical assistance does not exceed 5 percent of the capitalization grant made to such entity.
(7) Limitation for single projects.--A participating entity may not provide an amount equal to or more than
(g) Intended Use Plans.--
(1) In general.--After providing for public comment and review, and consultation with appropriate government agencies of the State or
(2) Contents of plan.--An entity intended use plan prepared under paragraph (1) shall include(A) the integration of entity planning efforts, including entity hazard mitigation plans and other programs and initiatives relating to mitigation of major disasters carried out by such entity;
(B) an explanation of the mitigation and resiliency benefits the entity intends to achieve by--
(i) reducing future damage and loss associated with hazards;
(ii) reducing the number of severe repetitive loss structures and repetitive loss structures in the entity;
(iii) decreasing the number of insurance claims in the entity from injuries resulting from major disasters or other natural hazards; and
(iv) increasing the rating under the community rating system under section 1315(b) of the
Act of 1968 (42 U.S.C. 4022(b)) for communities in the entity;
(C) information on the availability of, and application process for, financial assistance from the entity loan fund of such entity; (D) the criteria and methods established for the distribution of funds;
(E) the amount of financial assistance that the entity anticipates apportioning;
(F) the expected terms of the assistance provided from the entity loan fund; and
(G) a description of the financial status of the entity loan fund, including short-term and long-term goals for the fund.
(h) Audits, Reports, Publications, and Oversight.(1) Biennial entity audit and report.--Beginning not later than the last day of the second fiscal year after the receipt of payments under this section, and biennially thereafter, any participating entity shall(A) conduct an audit of such fund established under subsection (b); and
(B) provide to the Administrator a report including--
(i) the result of any such audit; and
(ii) a review of the effectiveness of the entity loan fund of the entity with respect to meeting the goals and intended benefits described in the intended use plan submitted by the entity under subsection (f).
(2) Publication.--A participating entity shall publish and periodically update information about all projects receiving funding from the entity loan fund of such entity, including--
(A) the location of the project;
(B) the type and amount of assistance provided from the entity loan fund;
(C) the expected funding schedule; and
(D) the anticipated date of completion of the project.
(3) Oversight.--
(A) In general.--The Administrator shall, at least every 4 years, conduct reviews and audits as may be determined necessary or appropriate by the Administrator to carry out the objectives of this section and determine the effectiveness of the fund in reducing natural hazard risk.
(B) GAO requirements.--The entity shall conduct audits under paragraph (1) in accordance with the auditing procedures of the Government Accountability Office, including generally accepted government auditing standards.
(C) Recommendations by administrator.--The Administrator may at any time make recommendations for or require specific changes to an entity loan fund in order to improve the effectiveness of the fund.
(i) Regulations or Guidance.--The Administrator shall issue such regulations or guidance as are necessary to(1) ensure that each participating entity uses funds as efficiently as possible;
(2) reduce waste, fraud, and abuse to the maximum extent possible; and
(3) require any party that receives funds directly or indirectly under this section, including a participating entity and a recipient of amounts from an entity loan fund, to use procedures with respect to the management of the funds that conform to generally accepted accounting standards.
(j) Liability Protections.--The
(k) Definitions.--In this section, the following definitions apply:
(1) Administrator.--The term "Administrator" means the Administrator of the
(2) Agency.--The term "Agency" means the
(3) Eligible entity.--The term "eligible entity" means--
(A) a State; or
(B) an Indian tribal government that has received a major disaster declaration during the 5-year period ending on the date of enactment of the STORM Act.
(4) Hazard mitigation plan.--The term "Hazard mitigation plan" means a mitigation plan submitted under section 322.
(5) Insular area.--The term "insular area" means
(6) Low-income geographic area.--The term "lowincome geographic area" means an area described in paragraph (1) or (2) of section 301(a) of the Public Works and Economic Development Act of 1965 (42 U.S.C. 3161(a)).
(7) Participating entity.--The term "participating entity" means an eligible entity that has entered into an agreement under this section.
(8) Repetitive loss structure.--The term "repetitive loss structure" has the meaning given the term in section 1370 of the National Flood Insurance Act of 1968 (42 U.S.C. 4121).
(9) Severe repetitive loss structure.-- The term "severe repetitive loss structure" has the meaning given the term in section 1366(h) of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c(h)).
(10) State.--The term "State" means any
(l) Authorization of Appropriations.--There are authorized to be appropriated
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