Chair Graves and Ranking Member Larson:
On behalf of the National Conference of State Legislatures and the National Association of Counties, we urge Congress to oppose the Ensuring Quality Investments in Preparedness (EQUIP) Act of 2024 (HR 8616). The EQUIP Act offers an amendment to the Robert T. Stafford Disaster Relief and Emergency Assistance Act which, if enacted, would impose a new federal mandate on states requiring the payment of a "disaster deductible" before receiving Federal Emergency Management Agency disaster relief, affecting the ability of states, counties and other local communities to respond to disasters.
We urge Congress to oppose HR 8616 because it is an unfunded federal mandate, hobbles states' and counties' abilities to respond effectively to disasters and diverts resources from disaster mitigation. FEMA's Public Assistance (PA) Program, is a vital recovery component for states and communities that have received a presidential disaster declaration. According to FEMA, there have been 340 major disaster declarations since 2020 and FEMA has allocated $128.7 billion for non-COVID-19 declared disasters since 2017. We oppose any legislation that:
Negatively impacts a state's ability to prepare for or flexibly respond to disaster
The changes proposed in the EQUIP Act would negatively impact the ability of states to appropriately and flexibly prepare for and respond to a disaster. According to a 2018 National Institute of Building Sciences study, every $1 invested in disaster mitigation by the federal government saves communities $6, and adopting model building codes can increase that number to $11. Similarly, state and local disaster mitigation efforts save money and resources. A "disaster deductible" mandate would likely harm a state and local disaster response by forcing an over-prioritization of fund accumulation for a deductible rather than investing in pre-disaster mitigation efforts, especially due to tight budgets, to avoid losing eligibility for federal disaster relief. Reprioritizing funds could also have negative downstream impacts on local government and community projects that rely on state funding. Delays in pre-disaster mitigation project investments could be extended indefinitely in situations where annual deductible funds are increased or spent down year over year or where costs significantly increase due to inflation. There are also currently no provisions in the EQUIP Act that allow for a preemptive reduction in a "disaster deductible" through investments in mitigation efforts. This means any money spent on strengthening infrastructure against disasters would come in addition to funding a deductible, rather than working to mitigate the additional costs imposed by this act.
Could cause disparities between states
The potential to be rendered ineligible for FEMA disaster relief under the EQUIP Act creates an opportunity for disparity between states and would inevitably unfairly penalize some if enacted. Disasters and their effects are largely outside of a state's control. Those with higher risks would be unfairly affected, given that the proposed legislation mandates increased annual deductibles for states that have received federal financial assistance for a disaster within the preceding three years. Those states that spend down a deductible at the end of the annual term and then face a new disaster at the start of the next annual term would be put at a disadvantage as well. Disparities would also arise between states with different fiscal and personnel capacities. States without adequate tax bases could be forced to choose between funding an annual disaster deductible or mitigating negative fiscal impacts to vital state-provided services and programs. States without the capacity and resources to efficiently and effectively navigate complicated federal processes would also be put at a disadvantage. Additionally, the proposed cost of a "disaster deductible" differs greatly state-to-state based on population (ranging from approximately $1.75 million to $117 million). Many of the states that would be paying the highest initial rate are also the most disaster-prone, meaning their deductible would rise the fastest. Many states do not have year-round legislatures or have legislatures that only meet every other year. These states would be forced to financially plan for potential population increases and disasters of unpredictable occurrence, cost and impact over much longer periods of time and without the ability to respond quickly, placing undue financial hardship on them and their communities.
Fails to account for and accommodate current disaster recovery fiscal efforts
The proposed legislation fails to account for the significant preparation and work states undertake to prepare for disasters. A 2020 report by the Pew Charitable Trust, found that 46 states and the District of Columbia have a statewide disaster account to set aside funds for disaster response. States lack the fiscal capacity of the federal government and, unlike the federal government, 33 states are constitutionally required to balance their budgets each year. State budgets are constrained by imperfect revenue forecasts and limited generation, yet most states are already responsibly preparing for disaster. Periodic recessions at the state level may impact a state's ability to accumulate funds for an annual disaster deductible or may negatively impact a state's ability to respond to ongoing non-disaster emergencies.
Furthermore, the EQUIP Act specifically requires states to continue paying a state-federal cost share of 25% for PA program funds after the annual disaster deductible is met and prohibits applying the deductible towards the cost share. This adds further strain to the already significant financial requirements proposed in the legislation and fails to account for the multitude of other costs states and communities pay for before, during and after a disaster that are not covered by FEMA disaster relief.
Introduces unnecessary requirements, complications or barriers to federal disaster relief
Adding additional requirements to the PA program contradicts the Public Assistance Steering Committee's 2023 recommendations to simplify the program, streamline requirements and improve program delivery flexibility. A disaster deductible would likely slow administration of the PA program and likely be further exacerbated by situations where multiple states are affected by simultaneous disasters. State access to FEMA disaster relief should not be complicated unnecessarily.
As the rate of billion-dollar disasters increases, we are skeptical as to how an annual disaster deductible would assist states with both short- and long-term disaster recovery. We urge Congress to reject the EQUIP Act and stands ready to help Congress work directly with states and state emergency managers on disaster recovery, mitigation and resilience efforts, including new resilience legislation. States must have the discretion to make educated decisions based on self-determined risk profiles, needs, financial capabilities and unique circumstances. We appreciate Congress' goal to reduce the impacts and financial burden of disasters, but any changes to current disaster relief framework must avoid cost shifts to states or unwarranted preemption of state law.
If you have any questions regarding the priorities outlined above, please do not hesitate to contact Ben Nasta, Susan Frederick, or Brett Mattson.
Sincerely,
Tim Storey
Chief Executive Officer
National Conference of State Legislatures
Matthew D. Chase
CEO and Executive Director
National Association of Counties