The Disaster Recovery Reform Act of 2018: Key Provisions Affecting FEMA Funding

by Baker Donelson

Baker Donelson

As Hurricane Michael continues to have a devastating impact in the Southeast, all of us at Baker Donelson first and foremost extend our thoughts to those affected by this historic storm. With the immediate dangers subsiding, but the full scope of the aftermath largely unknown, parts of the region now face a long and difficult recovery period. State and local governments, eligible private non-profit organizations, and entities that assist these stakeholders in applying for Federal Emergency Management Agency (FEMA) assistance are encouraged to visit Baker Donelson's Disaster Recovery and Government Services webpage for more information about our Disaster Recovery and Government Services practice, including critical checklists on disaster  procurement and contracting. In addition, they should be aware of recently enacted changes to assistance application processes and funding.

Last week, Congress passed and the President signed into law the Disaster Recovery Reform Act of 2018 (DRRA). The DRRA, included as part of the Federal Aviation Administration Reauthorization Act of 2018, is being touted as the largest single piece of legislation to impact disaster response and recovery in decades. It touches multiple funding programs and responsible federal agencies, but includes major changes to processes and grant funding managed primarily by FEMA. Through the DRRA, Congress provides greater flexibility for applicants to build what they need rather than simply restore or replace what was damaged. It also mandates financial support for greater resiliency in rebuilding and mitigation and aims to improve expediency of the project process and dispute resolution.

Amendments made to the Stafford Act apply retroactively to disasters declared on or after August 1, 2017, but some elements reach as far back as 2004. The following summarizes key provisions applicable to FEMA's Public Assistance (PA) program:

  • Removal of Alternate Project Funding Reduction: Previously, the Stafford Act provided that applicants that used FEMA funding for alternate projects (in lieu of repairing, restoring, reconstructing, or replacing the damaged facility) had to take a haircut on the federal share of the costs – states and local governments could only get 90 percent of the federal share, while private non-profits could get 75 percent. The DRRA amends the Stafford Act to remove the reduction in funding. An applicant can now choose to pursue an alternate project without facing a reduction in otherwise eligible assistance.
  • Relief from "Stacked" Mandatory National Flood Insurance Program (NFIP) Reductions: Previously, the Stafford Act provided that assistance to repair or replace any facility in a Special Flood Hazard Area that was not covered by flood insurance must be reduced by the lesser of (1) the value of the facility on the date of the disaster, or (2) the insurance proceeds that would have been payable had the building been insured to the maximum extent available under the NFIP. This reduction had been applied to each individual building in the case of multi-unit campuses, such as large educational or medical facilities. The DRRA amends this requirement so that it "shall not apply to more than one building of a multi-structure educational, law enforcement, correctional, fire, or medical campus." This amendment is temporary: it applies to disasters declared between January 1, 2016 and December 31, 2018.
  • No Mandatory Use of Stafford Act Section 428 Alternative Procedures: Stafford Act Section 428 provides that FEMA may implement alternative procedures to approve projects under the PA program. Under one such program, the Alternative Procedures Pilot Program for Permanent Work, FEMA and the applicant agree to a fixed cost estimate for a particular project, and the disaster assistance is capped by that fixed estimate. If the applicant's costs are below this cap, it can use excess funding for certain eligible purposes; if the costs exceed the cap, it may not request additional funding from FEMA. Participation is voluntary, but after Hurricanes Irma and Maria, applicants in Puerto Rico were required to opt into the program as a condition of assistance. The DRRA confirms that the President may not condition the provision of federal assistance on participation in the alternative procedures allowed by Section 428. How this provision will be implemented in Puerto Rico remains unclear.
  • Estimates Under Section 428: Significantly, the DRRA also amends Section 428 to provide that fixed estimate grants made under the alternative procedures program are "presumed to be reasonable and eligible costs" (in the absence of fraud) once certified by a professionally licensed engineer and accepted by the FEMA Administrator.
  • Duplication of Benefits: The Stafford Act contains a general prohibition against the receipt of benefits from more than one source for the same loss (a "duplication of benefits"). The prohibition applies to funding from any source, including insurance and through private party donations. The DRRA amends the Stafford Act to permit the President to waive the general prohibition upon the request of a governor if doing so is in the public interest and will not result in waste, fraud, or abuse. This amendment applies to disasters declared between January 1, 2016 and December 31, 2021. It does not apply to work funded under Stafford Act Sections 406 or 408, but appears applicable primarily to debris removal and emergency protective measures, including rental assistance and sheltering programs funded under Section 403.
  • Management Costs: Previously, the Stafford Act defined "management costs" as indirect and administrative expenses that are "not directly chargeable to a specific project." FEMA provides funding for management costs, according to a set percentage, to the state recipient which then determines how much, if any, will be passed through to subrecipients. Additionally, costs that are directly chargeable to a specific project – direct administrative costs" – are reimbursed directly to subrecipients. The DRRA simplifies this by grouping all into "management costs" and sets the following percentage rates for calculation of available funding:

    • FEMA's Hazard Mitigation Grant Program funding under Section 404: Up to 15 percent of the total amount of the grant award; of which up to 10 percent may be used by the recipient and 5 percent by the subrecipient.
    • FEMA's PA program including funding under Sections 403, 406, 407, and 502: Up to 12 percent of the total award under such sections; of which up to 7 percent may be used by the recipient and 5 percent by the subrecipient.

FEMA strongly advocated for this change as absolutely critical to allow state recipients and applicants to take on a greater share of the administrative burden of disaster grants.

  • Statute of Limitations on Recoupment of PA Under Stafford Act Section 705: Stafford Act Section 705 contains a statute of limitations applicable to efforts by the federal government to recover disaster assistance paid to a state or local government. FEMA had previously interpreted the clock as starting with the state's transmission to FEMA of the final expenditure report for all projects an applicant received under a declared disaster or emergency. This provision did little to protect applicants from late deobligations as this report is often submitted many years after an event – after the very last of an applicant's projects were closed out. The DRRA amends the Stafford Act to instead start the clock on a project-by-project basis. FEMA is now prohibited from initiating any action to recover assistance after "the date that is 3 years after the date of transmission of the final expenditure report for project completion as certified by the grantee." Significantly, this amendment applies retroactively to disasters declared on or after January 1, 2004 and terminates any pending action that would now be prohibited under amended Section 705(a).
  • Right of Arbitration: The DRRA amends the Stafford Act to grant a right of arbitration to any applicant disputing a FEMA decision regarding the eligibility for or repayment of assistance where the amount in dispute is more than $500,000, or more than $100,000 for applicants in rural areas. Arbitrations will be conducted before the Civilian Board of Contract Appeals using a process similar to that previously open only to applicants impacted by Hurricanes Katrina and Rita in 2005. Arbitration may be requested at any time after FEMA issues a first appeal determination, as long as FEMA has not issued a decision on second appeal.
  • Increased Funding for Hazard Mitigation: The DRRA provides that, with respect to each major disaster, the President may set aside from the Disaster Relief Fund an amount equal to six percent of the estimated aggregate amount of the grants to be made under Sections 403, 406, 407, 408, 410, 416, and 428 in order to provide technical and financial assistance. At the rate and intensity of the occurrence of disaster events, this is likely to equate to billions of dollars in mitigation funding in a given year (including for the 2017 and 2018 seasons). Because the allocation is made by statute, there is no need for a separate legislative appropriation for these funds.
  • Codes and Standards: Previously, the Stafford Act only required payment of eligible costs for the repair, restoration, reconstruction, or replacement of a facility based on its pre-disaster design and "in conformity with codes, specification, and standards…applicable at the time which the disaster occurred." Often, however, applicants found themselves having to rebuild to codes and standards applicable at the time the actual work was done, which differed from the codes and standards applicable at the time of the disaster. This resulted in significant costs for the applicant that were not eligible for reimbursement. The DRRA amends the Stafford Act to fund work consistent with "the latest published editions or relevant consensus-based codes, specifications, and standards that incorporate the latest hazard-resistant designs and establish minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for assistance under this Act for the purposes of protecting the health, safety, and general welfare of a facility's users against disasters." This amendment applies retroactively to "disasters declared on or after August 1, 2017, or disasters in which a cost estimate has not yet been finalized for a project, or for any project for which the finalized cost estimate is on appeal." It is not clear how this language will apply to codes and standards (such as setbacks and height restrictions) that are not based on making structures more resilient to disaster damage.
  • Closeout Incentives: The FEMA Administrator is directed to develop incentives and/or penalties to motivate state, local, or tribal governments to close out expenditures and activities on a timely basis. The DRRA is silent on what form these incentives or penalties may take, but the provision is to be implemented by regulation, which could take several years. The overall objective of this change is to improve closeout practices and expedite disaster program closeout. This provision demonstrates Congress's concern with FEMA's inability to close disasters in a timely manner.

As FEMA moves to implement these amendments, it will be forced to make substantial changes to existing policies. We anticipate major modifications to FEMA's Public Assistance Program and Policy Guide and other FEMA policy statements, such as FEMA's Recovery Policy on Stafford Act Section 705. We will be monitoring FEMA's issuance of new policy interpretations and issuing additional client alerts as these become available.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Donelson | Attorney Advertising

Written by:

Baker Donelson

Baker Donelson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.