February 8, 2018

Last night, Congressional leaders released the text of the disaster relief bill that Senate Republicans and Democrats plan to include as part of a larger budget agreement to lift the low spending caps on defense and domestic spending for two years, raise the debt ceiling for one year, and provide $20 billion in infrastructure spending for two years to address surface transportation, rural water and wastewater, drinking water and rural broadband.

The disaster relief bill includes $89.3 billion in additional emergency funds for disaster-affected communities impacted by the recent hurricanes and wildfires – $8 billion more than the disaster aid bill the House passed in December and more than twice the amount required by the White House. The Senate bill includes $28 billion in CDBG-DR funding – $2 billion more than the House version and $16 billion more than the wholly inadequate amount requested by the White House – as well as resources to shore up the Medicaid program in Puerto Rico and the U.S. Virgin Islands.

While this bill is a significant improvement over the House and White House versions, it does not include the resources and tools recommended by the Disaster Housing Recovery Coalition to ensure that the disaster recovery reaches all households, including those with the lowest incomes. The bill does not include the Disaster Housing Assistance Program (DHAP), a proven solution to the longer term housing needs of low income disaster survivors, a requirement to collect and make public data to ensure that the needs of low income people and communities are met, and housing-specific resources to ensure that the severe shortage of affordable rental homes in disaster-impacted communities is not worsened.

The Senate is expected to vote today, giving the House just hours to act before the current Continuing Resolution expires at midnight. We are keeping a close watch on how this bill moves through Congress. While there is a deal in the Senate to enact this legislative package, it is still unclear whether the House will approve it.

Below is our initial analysis of the disaster relief bill. As we learn more, we will be sure to share it with this group.

Community Development Block Grants

The bill provides $28 billion in CDBG-DR funding – or $2 billion more than the House-approved version. Of this amount, up to $16 billion is slated to address unmet needs, including $11 billion that will be allocated to state and local governments impacted by Hurricane Maria, with $2 billion of that set aside for rebuilding the electrical grids in Puerto Rico and the U.S. Virgin Islands. The remaining $12 billion is set aside for mitigation projects. Up to $15 million of CDBG-DR funds can be used to provide capacity building and technical assistance.

If enacted, the bill would provide the HUD Secretary with a number of limitations and special authorities. For example, the bill:

• Limits the determination of “duplication of benefits” to exclude those households that applied for, but did not accept, a Small Business Administration (SBA) loan. This is contrary to the recommendations of the DHRC;
• Requires grantees to maintain a public website with common reporting criteria to allow the public to see how all grant funds are used, including copies of all relevant procurement documents, grantee administrative contracts, and details of ongoing procurement processes. It is unclear what data HUD will require grantees to include and whether it will be provided in a manner that advocates can use effectively;
• Allows the HUD Secretary to waive or specify alternative HUD requirements, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment, if the HUD Secretary finds that good cause exists and that it is not inconsistent with the purpose of the CDBG program;
• Directs the HUD Secretary to publish via notice in the Federal Register any waiver, or alternative requirement, no later than 5 days before the effective date; and
• Allows the HUD Secretary to make temporary adjustments to the Housing Choice Voucher annual renewal funding allocations and administrative fee eligibility determinations for public housing agencies (PHAs) in disaster-impacted areas. This authority is provided to “avoid significant adverse funding impacts that would otherwise result from the disaster, or to facilitate leasing up to a PHA’s authorized level of units under contract.” Such adjustments would need to be requested by and made in consultation with a PHA and supported by documentation.

The bill also provides that any CDBG-DR funds that remain, after allocating funds for all necessary expenses, shall be used for additional mitigation activities in the most impacted and distressed areas.

Rural Development

The disaster relief bill would provide a total of $18.7 million to offset the cost of modifying Section 502 homeownership loans and to rebuild Section 515 Rural Rental Housing properties in USDA’s portfolio that were damaged or destroyed by the recent hurricanes and wildfires. The bill, however, limits Section 515 funds to those property owners who were not required to carry flood insurance.

Nearly $166 million was provided to repair drinking water and wastewater systems that were damaged. Of this amount, $2 million is provided for technical assistance.

Legal Aid Services

A total of $15 million is provided for legal aid services, however, the bill limits the usage of these funds to “mobile resources, technology, and disaster coordinators to provide short-term services.”

Tax Provisions

The disaster package also extends favorable tax provisions that were also provided to hurricane-impacted areas to communities impacted by the California wildfires. This includes allowing tax-favored withdraws from retirement funds, tax credits for employers impacted by the wildfires for retaining employees, and the temporary suspension of limits on charitable deductions, among other tax provisions.

Reporting To Congress

The bill requires that any agency or department that receives more than $3 billion, including FEMA, HUD, and the Corps of Engineers, must provide a report to Appropriation Committees outlining its efforts to provide adequate resources and technical assistance for small, low income communities affected by the disasters.