On Friday, President Trumped signed into law a legislative package that provides funding for Hurricane relief and recovery, lifts the debt ceiling and keeps the government funded through December 8th. The President worked with Democratic Congressional leaders in a bipartisan effort to help communities affected by the disaster, while also finding short term solutions to the debt ceiling/budget showdown that was anticipated later this month.
The bill’s Continuing Budget Resolution extends FY 2017 levels for three months with a 0.68% across the board reduction to keep funding under the Budget Control Act (BCA) spending caps.
The $15.25 billion disaster spending package includes $7.4B for FEMA’s Disaster Relief Fund, $450 million in Small Business Administration disaster loans, and $7.4 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funds. In comparison, the 2013 Disaster Relief Appropriations Act, commonly called the “Sandy Supplemental,” provided $16 billion in CDBG-DR funding to HUD, but it took 3 months to approve this legislation. Currently, HUD is surveying properties in the Harvey disaster area and there will be likely additional funding released after its evaluation of it and any Irma-related disaster areas. This first wave of funding will allow impacted communities to begin the work of rebuilding and repair sooner.
CDBG-DR grants provide crucial seed money to help to rebuild the presidentially declared disaster areas and to start the recovery process. Since CDBG-DR assistance may fund a broad range of recovery activities, HUD can help communities and neighborhoods that otherwise might not recover due to limited resources. In the Senate’s spending bill, there are two notable differences between this disaster relief CDBG-DR allocation and previous bills. First, there is no language changing the percentage of CDBG funds that must benefit low-to-moderate-income (LMI) communities. Therefore, 70% of CDBG-DR funding must benefit LMI households, but in previous disasters this percentage has been lowered. The second is the HUD’s Secretary has more flexibility to waive federal regulations under this bill, which would include the LMI benefit. In previous laws, the Secretary would need to find a compelling need to grant a statute waiver, but in this legislation he would only need to find good cause. It is still unclear how this may affect the bill’s provisions could affect the doling out of aid to impacted communities compared to previous disasters, but at least it is clearly stated that the HUD Secretary cannot waive regulations relating to fair housing, nondiscrimination, labor standards, and the environment.
Furthermore, the legislation also includes a provision granting the necessary extension of the National Flood Insurance Program to December, which was set to expire on September 30th, and language to provide FEMA with flexibility under the bill’s Continuing Resolution to continue to respond to Hurricanes Harvey and Irma, as well as other disasters.
National Disaster Tax Relief Bill Reintroduced
Reps. Tom Reed, R-N.Y., and Bill Pascrell, D.-N.J., reintroduced a bill, originally drafted to for post-Sandy assistance, that would incentivize investments in areas affected by natural disasters. The National Disaster Tax Relief Act of 2017 would increase LIHTC allocations for states that experienced federally declared disasters in 2012-2015. It would provide an additional annual $500 million in New Markets Tax Credit allocations to community development entities that serve areas affected by natural disasters in 2012 through 2015. It would also strengthen the Historic Tax Credit for certified historic structures in federally declared disaster areas in 2012 through 2015. If enacted, this bill could aid qualifying areas in the NY region.
Lessons Learned from Disaster Recovery in NY
This summer, Holly Leicht, former HUD Regional Administrator, released “Rebuild the Plane Now: Recommendations for Improving Government’s Approach to Disaster Recovery and Preparedness.” This timely report offers solutions to make recovery efforts more effective and ensure future readiness.