42 U.S.C. § 5172 — Repair, restoration, and replacement of damaged facilities

(a) Contributions

(1) In general. The President may give contributions:

(A) to a State^* or local government^* to repair, restore, rebuild, or replace a public facility damaged or destroyed by a major disaster, including the government’s related expenses; and

(B) subject to paragraph (3), to a person that owns or operates a private nonprofit facility^* damaged or destroyed by a major disaster, for the facility’s repair, restoration, rebuilding, or replacement and the person’s related expenses.

(2) Associated expenses. For this section, related expenses include:

(A) the cost of mobilizing and using the National Guard for eligible work;

(B) the cost of using prison labor for eligible work, including wages actually paid, transportation to the worksite, and unusual costs for guards, food, and lodging;

(C) base and overtime wages, plus fringe benefits to the extent they were paid before the disaster, for employees and extra hires of a State, local government, or qualifying private nonprofit facility who do eligible work; and

(D) base and overtime wages for extra hires who help put adopted building codes into effect and enforce them, for no more than 180 days after the major disaster is declared.

(3) Conditions for help to private nonprofit facilities.

(A) In general. The President may contribute to a private nonprofit facility under paragraph (1)(B) only if:

(i) the facility provides “critical services” as defined by the President when a major disaster occurs; or

(ii) the owner^* or operator applied for a disaster loan under 15 U.S.C. § 636(b), and either:

(I) the owner or operator was found ineligible for that loan; or

(II) the owner or operator received the largest loan amount for which the Small Business Administration found the facility eligible.

(B) Definition of critical services. In this paragraph, “critical services” includes power; water, including water supplied by an irrigation organization or facility; sewer service; wastewater treatment^*; communications, including broadcasting and telecommunications; education; and emergency medical care. This section does not define “critical services” beyond this list.

(C) Religious facilities. A church, synagogue, mosque, temple, other house of worship, educational facility, or any other private nonprofit facility is eligible for contributions under paragraph (1)(B), regardless of its religious character or main religious use. A house of worship, educational facility, or other private nonprofit facility cannot be excluded because the organization’s leaders or members are limited to people who share a religious faith or practice.

(4) Notice to Congress. Before making a contribution under this section greater than $20 million, the President must notify the Senate Committee on Environment and Public Works, the House Committee on Transportation and Infrastructure, the Senate Committee on Appropriations, and the House Committee on Appropriations.

(b) Federal share

(1) Minimum share. Unless paragraph (2) applies, the Federal share must be at least 75 percent of the eligible repair, restoration, rebuilding, or replacement cost.

(2) Reduced share. The President must issue regulations reducing the Federal share to at least 25 percent when an eligible public or private nonprofit facility is repaired, restored, rebuilt, or replaced after an event connected with a major disaster if:

(A) the same type of event damaged the facility more than once during the previous 10 years; and

(B) the facility’s owner failed to take suitable steps to reduce the danger that caused the damage.

(3) Increased share.

(A) Incentives. The President may encourage a State or Tribal government to invest in readiness and resilience by using a sliding scale that can raise the minimum Federal share to 85 percent. The investments may include:

(i) adopting a mitigation plan approved under 42 U.S.C. § 5165;

(ii) investing in disaster relief, insurance, and emergency-management programs;

(iii) encouraging adoption and enforcement of the newest published editions of relevant consensus-based codes, specifications, and standards. Those codes and standards must use the newest hazard-resistant designs and set minimum acceptable requirements for designing, building, and maintaining residential structures and eligible facilities, to protect users’ health, safety, and general welfare in disasters;

(iv) helping communities participate in the community rating system; and

(v) funding projects that reduce risk or giving tax incentives for those projects.

(B) Comprehensive guidance. Within one year after February 9, 2018, the President, acting through the Administrator^*, must issue comprehensive guidance to State and Tribal governments. The guidance must explain which measures and investments will be recognized to increase the Federal share, weighted appropriately using actuarial assessments of eligible actions. The agency’s review must not unreasonably delay deciding the proper Federal cost share.

(C) Report. One year after issuing that guidance, the Administrator must report to the House Committee on Transportation and Infrastructure and the Senate Committee on Homeland Security and Governmental Affairs about the analysis of Federal cost shares paid under this section.

(D) Savings clause. This paragraph does not stop the President from raising the Federal share above 85 percent.

(c) Large contributions instead of facility work

(1) Public facilities.

(A) In general. If a State or local government decides that the public interest would not be best served by repairing, restoring, rebuilding, or replacing a public facility it owns or controls, it may choose a contribution instead. The contribution equals the Federal share of the Federal estimate for that work and for management expenses.

(B) Use of funds. The State or local government may use the money to repair, restore, or expand other selected public facilities; build new facilities; or fund hazard-reduction measures that it finds necessary to meet government-service and government-function needs in the disaster area.

(C) Limits. The money may not be used for a public facility in a “regulatory floodway,” as defined in 44 C.F.R. § 59.1 or a successor rule, or for an uninsured public facility in a “special flood hazard area” identified by the FEMA Administrator under the National Flood Insurance Act of 1968. This section does not define either quoted term.

(2) Private nonprofit facilities.

(A) In general. If a person who owns or operates a private nonprofit facility decides that the public interest would not be best served by repairing, restoring, rebuilding, or replacing it, the person may choose a contribution instead. It equals the Federal share of the Federal estimate for that work and for management expenses.

(B) Use of funds. The person may use the money to repair, restore, or expand other selected private nonprofit facilities the person owns or operates; build new private nonprofit facilities the person will own or operate; or fund hazard-reduction measures the person finds necessary to meet the person’s service and function needs in the disaster area.

(C) Limits. The money may not be used for a private nonprofit facility in a “regulatory floodway,” as defined in 44 C.F.R. § 59.1 or a successor rule, or for an uninsured private nonprofit facility in a “special flood hazard area” identified by the FEMA Administrator under the National Flood Insurance Act of 1968. This section does not define either quoted term.

(d) Flood insurance

(1) Reduction of Federal aid. If flooding during a major disaster damages or destroys a public or private nonprofit facility in a special flood hazard area that the Administrator has identified for more than one year, and the facility had no flood insurance on the date of the flooding, Federal aid otherwise available under this section for that facility’s repair, restoration, rebuilding, replacement, and related expenses must be reduced under paragraph (2). This rule applies to flooding after the 180th day following November 23, 1988. For a major disaster or emergency declared on or after January 1, 2016, through December 31, 2018, this rule does not apply to more than one building on a multi-building educational, law-enforcement, correctional, fire, or medical campus.

(2) Amount of reduction. The reduction is the smaller of:

(A) the facility’s value on the date the flood damaged or destroyed it; or

(B) the maximum insurance payment that would have been payable if the facility had then had flood insurance under the National Flood Insurance Act of 1968.

(3) Exception. Paragraphs (1) and (2) do not apply to a private nonprofit facility lacking flood insurance only because the local government failed to participate in the national flood-insurance program.

(4) Information. The President must give State and local governments, and owners and operators of potentially affected private nonprofit facilities, information about this reduction.

(e) Eligible cost

(1) Determination.

(A) In general. For disasters declared on or after August 1, 2017, for a project^* whose cost estimate is not final, or for a project whose final estimate is being appealed, the President must estimate eligible repair, restoration, rebuilding, or replacement cost based on the facility’s design immediately before the disaster; the newest published editions of relevant consensus-based codes, specifications, and standards using current hazard-resistant designs and minimum acceptable requirements for eligible residential structures and facilities, including required floodplain-management and hazard-reduction criteria required by the President or under the Coastal Barrier Resources Act (16 U.S.C. 3501 et seq.); and a method that lets the facility meet the definition of “resilient” developed under this subsection. This section does not define “resilient.”

(B) Cost estimates.

(i) The President must use the procedures established under paragraph (3), subject to paragraph (2).

(ii) These procedures, and paragraph (2), apply only to projects whose eligible cost is at least the amount specified in 42 U.S.C. § 5189.

(C) Contributions may be based on actual costs or on the cost-estimation procedures.

(2) Changing eligible cost.

(A) If actual cost is higher than the ceiling. If actual cost is greater than the ceiling percentage set under paragraph (3) of the estimate, the President may decide that eligible cost includes some of the actual cost above the estimate.

(B) If actual cost is lower.

(i) If actual cost is below 100 percent but at least the floor percentage of the estimate, the recipient must use the excess money for cost-effective activities that reduce future disaster damage, hardship, or suffering.

(ii) If actual cost is below the floor percentage, the recipient must repay the President the difference.

(C) This paragraph does not affect appeal rights under 42 U.S.C. § 5189a.

(3) Expert panel.

(A) Within 18 months after October 30, 2000, the President, through the FEMA Administrator, must create an expert panel that includes construction-industry and State and local government representatives.

(B) The panel must recommend procedures for estimating facility work costs consistent with industry practice, and recommend the ceiling and floor percentages in paragraph (2).

(C) Considering those recommendations, the President must issue regulations establishing the cost-estimation procedures and the ceiling and floor percentages.

(D) Within two years after issuing those regulations, and periodically after that, the President must review them.

(E) Within one year after the regulations, three years after them, and at the end of every two-year period after that, the panel must report to Congress on whether the procedures remain appropriate.

(4) Special rule. If the facility was under construction when the disaster occurred, eligible work cost includes only costs that the construction contract makes the owner’s responsibility, not the contractor’s responsibility.

(5) New rules.

(A) Within 18 months after October 5, 2018, the President, through the FEMA Administrator and after consulting relevant Federal agencies, must issue a final rule defining “resilient” and “resiliency” for this subsection. This section does not otherwise define those terms.

(B) Within 60 days after October 5, 2018, the Administrator must issue temporary guidance implementing this subsection. It ends 18 months after that date or when final regulations are issued, whichever comes first.

(C) Within 90 days after the final rule, the Administrator must issue needed related guidance.

(D) Within two years after October 5, 2018, the Administrator must report to Congress summarizing the regulations and guidance issued under this paragraph.