Introduction

The federal government annually delivers billions of dollars in assistance to disaster-stricken communities, and spending has increased significantly in recent years. The government's lead disaster-relief agency, the Federal Emergency Management Agency (FEMA), delivers much of this assistance under the authorities of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act, P.L. 93-288, as amended). Much of that assistance literally comes with a cost: affected communities cover a share of specified disaster-related costs—known as a "cost share"—and federal relief covers the remainder.

Stafford Act cost shares have generated substantial legislative debate (and occasional controversy) in the decades since their enactment in 1966. Some legislators and stakeholders charge that cost-sharing requirements control spending and ensure shared responsibility for disaster relief across all levels of government, individuals, and businesses.¹ Others raise concern that such requirements burden suffering communities, particularly in low-income and socially vulnerable areas, and may put disaster relief beyond the reach of those unable to pay. Some Members of Congress have introduced legislation to increase the federal share of certain disaster-related costs for certain communities, including those coping with multiple recent disasters, entities undertaking disaster mitigation projects, and for communities serving remote, low-income, or otherwise disadvantaged individuals.² Most recently, both Congress and the President have acted to increase federal contributions to a record number of domestic disasters. These actions suggest that disaster relief cost shares may be changing or diminishing—renewing debates over core policy questions in U.S. emergency management. Who is responsible for providing disaster relief? What role should the federal government play? Congress may face related questions as disasters of increasing cost and frequency place greater demands on both the federal government, disaster-affected communities, and funds available for relief.

Current Authorities

Under current law, the Stafford Act authorizes the President to deliver several forms of response, recovery, and hazard mitigation assistance following a declaration of emergency or major disaster. ³ Assistance that may be available includes

• Public Assistance (PA), which provides grants and direct assistance to state, local, tribal, and territorial governments (SLTTs), and certain private nonprofit organizations to cover eligible costs of
• "emergency work" (debris removal and emergency response measures like sheltering, evacuation, emergency medical care, and emergency power restoration), and
• "permanent work" (repairing and replacing eligible public and nonprofit facilities).⁴
• Individual Assistance (IA), which provides financial and/or direct assistance to affected individuals and households.⁵ IA includes assistance for Crisis Counseling, Disaster Unemployment Assistance, Disaster Legal Services, Disaster Case Management, and the Individuals and Households Program Housing Assistance and Assistance for Other Needs (ONA).
• ONA provides funds for critical disaster-related costs, like those incurred to replace damaged cars or personal belongings, or to pay uninsured medical and funeral expenses.⁶
• Hazard Mitigation Assistance (HMA) through the Hazard Mitigation Grant Program (HMGP), which funds mitigation and resiliency projects and programs, typically across the entire state or territory.⁷

The Stafford Act additionally authorizes the provision of assistance for Pre-disaster Hazard Mitigation (currently implemented as the Building Resilient Infrastructure and Communities Program, or BRIC). BRIC is a competitive grant for pre-disaster assistance, and is thus not tied to any specific incident or declaration.⁸

The President has delegated the authority to administer these forms of assistance to FEMA.⁹ As summarized in Table 1, FEMA provides these forms of assistance on a cost-share basis (i.e., the costs of eligible response and recovery work are shared by FEMA and entities receiving assistance). Statute specifies different cost-share provisions, including the means to adjust the cost share. Cost shares for ONA and HMGP are fixed and capped, respectively. However, the President may increase the federal cost share of PA at his or her discretion and FEMA may recommend increasing the federal cost share for PA in extraordinary cases.¹⁰ Congress can and has acted to increase the federal cost share of different Stafford Act assistance for certain incidents, as detailed in Appendix B.

Meeting the Nonfederal Stafford Act Cost Shares

Public Assistance (PA)

The PA nonfederal cost share is the responsibility of the Recipient (the state, tribe, or territory with the relevant Stafford Act declaration), though Recipients can and often do pass it on to Applicants (e.g., local governments, state agencies, and nonprofit entities receiving PA and HMGP funds) in whole or in part. For example, Florida covers one-half of the nonfederal share for PA awarded to local governments.¹¹ Federal regulations describe the means through which Recipients may meet the nonfederal cost share.¹² Recipients and/or Applicants may apply the value of donated goods, in-kind resources, and labor to fulfill the nonfederal cost share.¹³ A state may also receive a loan or advance to cover the nonfederal share in certain extraordinary situations.¹⁴

Regulations prohibit the use of other federal funds to meet the nonfederal cost share, unless those funds are statutorily authorized to meet federal cost-share requirements.¹⁵ For example, the U.S. Department of Housing and Urban Development's (HUD) Community Development Block Grant (CDBG) and its Disaster Recovery Component (CDBG-DR) are often statutorily authorized to meet federal cost-share requirements for other federal programs.¹⁶ Some Recipients and Applicants say they have found it cumbersome to use CDBG-DR and broader CDBG funding to satisfy the FEMA cost share.¹⁷ In 2020, FEMA and HUD released joint guidance easing procedures for Applicants for both forms of assistance (known as a "flexible match" (see Figure 1)).¹⁸

Figure 1. FEMA Typical Cost Share, Flexible Match, and Global Match Flexibilities Available for Certain Stafford Act Programs

Source: Adapted by CRS based on HUD and FEMA, "Implementation Guidance for Use of Community Development Block Grant Disaster Recovery Funds as Non-Federal Cost Share for the Public Assistance Program," October 2020, available at https://www.fema.gov/sites/default/files/2020-10/fema_hud_flexible-match-implementation-guidance_sop_10-14-2020.pdf, and FEMA, Hazard Mitigation Assistance Cost Share Guide, May 2016, pp. 1-1 through 1-2. Notes: FEMA currently authorizes a Flexible Match for Public Assistance Funds utilizing HUD funding to cover the nonfederal share. FEMA Global Match is only available for HMGP awards and may be combined with other nonfederal funds.

Individual Assistance

Most Individual Assistance programs are 100% federally funded under current law—including Crisis Counseling, Disaster Case Management, Disaster Legal Services, Disaster Unemployment Assistance, and Housing Assistance provided through the Individuals and Household Program.¹⁹ Only the Individuals and Households Program Assistance for Other Needs (ONA) includes a nonfederal cost share that must be borne by states.²⁰ The Stafford Act does not allow for donated goods to count towards the ONA cost-share requirement.²¹ FEMA policy provides three options for the administration of the ONA cost share for states, tribes, and territories:

• The "FEMA Option": FEMA is entirely responsible for the administration of ONA, and the state, tribe, or territory reimburses FEMA for the nonfederal share.
• The "Joint Option": FEMA and the affected state, tribe, or territory administer ONA jointly. FEMA reimburses the affected government for the federal share of assistance.
• The "State, Territorial, or Tribal Government Option": the affected jurisdiction administers ONA independently. FEMA reimburses the affected government for the federal share of assistance.²²

Hazard Mitigation Assistance

As with FEMA Public Assistance, the nonfederal cost shares for the Hazard Mitigation Grant Program (HMGP) and Building Resilient Infrastructure and Communities (BRIC) projects are the responsibility of the state, tribe, or territorial government (STT) that receives a relevant Stafford Act declaration or BRIC award. However, STTs may pass the nonfederal share onto entities responsible for individual HMGP or BRIC projects, including local governments, nonprofits, or homeowners.²³

HMGP and BRIC cost shares may be met with donated resources, Disaster Mitigation Loans from the Small Business Administration, funds available through the National Flood Insurance Fund's Increased Cost of Compliance Funds, loans from the Safeguarding Tomorrow Revolving Loan Fund program, and/or other sources.²⁴ Stafford Act HMGP Recipients may elect to utilize a "global match" when using other federal funds to meet the nonfederal share for HMGP (see Figure 1). Under a "global match," individual projects do not require a 25% cost share. Instead, the Recipient may contribute 25% towards all submitted projects funded by the program, affording more flexibility to Recipients and Applicants than a typical per-project cost-share requirement.²⁵

State and Local Cost Share Practices

As noted above, the Stafford Act specifies that the 25% nonfederal share for Individual Assistance for Other Needs is the responsibility of the state, tribe, or territory with the relevant Stafford Act declaration.²⁶ These cost shares may not be passed on to other entities.

Cost shares for Public Assistance, the Hazard Mitigation Grant Program, and BRIC may be passed onto those directly overseeing projects, in whole or in part. State approaches to meeting PA and HMGP cost shares vary. Recent surveys revealed that a plurality of states share the PA nonfederal cost share with local governments responsible for particular projects; 6 pay the entire share, and 17 states pay no portion (Figure 2). Far fewer states contribute to the nonfederal share for HMGP projects: 32 pay no portion and 3 cover the entire share (Figure 3). States pay for their portion of nonfederal shares in a variety of ways, including statewide disaster accounts and contingency accounts.²⁷

Figure 2. State Nonfederal Share Policies: Public Assistance According to the National Emergency Management Association

Source: CRS adaptation of National Emergency Management Association (NEMA), Biennial Report 2022, pp. 15-17, and CRS communication with authors. Note: NEMA's report specified that these policies were in place for 25%, unadjusted PA nonfederal shares. Different policies may be in place when cost shares are adjusted. The District of Columbia pays the entire 25%.

Figure 3. State Nonfederal Share Policies: Hazard Mitigation Grant Program According to the National Emergency Management Association

Source: CRS adaptation of National Emergency Management Association, Biennial Report 2022, p. 17.

Cost Shares: Legislative History and Background

Congress has long debated how much the federal government should contribute to disaster relief and how much should be the responsibility of states and other nonfederal entities. Congress, executive agencies, and oversight bodies have gradually formalized cost-sharing arrangements for different types of assistance since the Disaster Relief Act of 1950 authorized standing federal disaster relief to affected communities in the United States (see Appendix A). This history reveals several trends. First, the specified federal share for various programs has generally increased. Second, the enactment of statutory cost shares often responded to executive proposals to reduce federal shares for disaster relief. More recent statutory adjustments have focused on adjustments for particular entities, incidents, or projects.

1950–1970: Establishment of Federal Disaster Cost Shares

The Disaster Relief Act of 1950 (P.L. 81-875) required governors requesting federal assistance for disasters to certify that state and local governments had expended "a reasonable amount" on the incident.²⁸ No specific cost share structured such assistance. Particularly severe disasters in the early and mid-1960s prompted enactment of several supplementary disaster relief bills,²⁹ and generated congressional debate on the need for more comprehensive assistance that included assistance for restoring public facilities and damaged homes, among other losses. This debate accompanied proposals for individuals, states, and affected communities to "share part of the loss" with the federal government—particularly amid the growing scope and scale of federal assistance.³⁰ Cost-sharing requirements in Army Corps of Engineers programs, emergency assistance for federal aid roads, and the regional development assistance served as models for various disaster cost-share proposals.³¹

The Disaster Relief Act of 1966 (P.L. 89-769) was the first general disaster relief statute to specify quantified cost-sharing requirements. Under the statute, the federal government was to cover no more than half of the costs of repairing and reconstructing eligible disaster-damaged state and local public facilities (an early iteration of the FEMA Public Assistance program)—which was understood to be "a fair and reasonable cost sharing arrangement."³² When the Disaster Relief Act of 1969 (P.L. 91-79) further expanded federal assistance to include grants to states to help cover disaster-related losses incurred by individuals and families, it specified that states were to cover 50% of the costs.³³

1970–1980: Concern over Growing Federal Role in Disaster Relief

These experiments with disaster cost-share requirements briefly ceased under federal disaster relief authorities enacted in 1970 and 1972, with new federal financial assistance specifically authorized at up to 100% of eligible costs following several years of severe, costly, and fatal disasters that were responsible for over 300 deaths. ³⁴ Many Members soon expressed concern over the growing federal share of costs outlaid for disaster relief. A CRS report from 1973 requested by the House Committee found

Federal spending is now a higher proportion of losses in major disasters than it was a decade ago … 1970 marked a sharp increase in the extent of Federal assumption of disaster costs…. Federal assistance totaled 12 percent of disaster losses in Hurricane Betsy (1965), 17 percent for Hurricane Camille (1969), 44 percent for Hurricane Celia (1970), 58 percent for the California earthquake (1971) and 88 percent for Tropical Storm Agnes (1972).³⁵

That same year, President Richard Nixon, in concert with 30 federal agencies and representatives of state, local, and territorial governments, released a special report evaluating current disaster relief authorities.³⁶ The Administration regretted that existing disaster authorities made the federal government "virtually the sole provider or recovery assistance."³⁷ Introduced legislation proposed a 75% federal–25% nonfederal cost-sharing model for various forms of federal relief to offer "a more balanced program of true federalism, with individuals contributing to their own protection and each level of government doing what it can do best."³⁸

Not all of these proposals were adopted. The Disaster Relief Act of 1974 (P.L. 93-288) established a 75% federal–25% nonfederal arrangement for disaster-affected individuals and families (through the Individuals and Family Grant program, a precursor to the current Individuals and Households Program).³⁹ The statute authorized the federal government to cover up to 100% of the costs of assistance to state and local governments for the restoration of public facilities; assistance for debris removal and emergency response measures did not specify a cost share.⁴⁰ It required that governors certify, as a prerequisite for requesting federal assistance, that state and local government obligations and expenditures constitute "a reasonable amount."⁴¹

1980–1988: Backlash Against Proposed Federal Share Reductions

In the absence of a specific cost share for Public Assistance, the first FEMA Director, John Williams Macy, Jr., first established the 75% federal–25% nonfederal cost share in 1980, following the eruption of Mt. St Helens in Washington State.⁴² Following that incident, FEMA applied the cost share more broadly. In 1980, GAO reported that FEMA's policy had provoked controversy, with many state officials reporting that the 25% nonfederal share exceeded their capacity and was thus unreasonable.⁴³ The Los Angeles Times reported:

The … President … issued an executive order cutting the federal share to 75% of the cost, with the state and local government forced to come up with the rest or get no recovery aid.… [A FEMA representative comments that] "I don't thinking (sic) I am speaking out of school to say there's a great many of us in the agency who have been very worried and concerned about the impact of (Carter's) executive orders ... from the time they were issued. We realized they can cause hardship and suffering almost in and of themselves."⁴⁴

Members of Congress debated the cost-share arrangement within months of implementation.⁴⁵ At FEMA's request, Congress took up several proposals to codify the arrangement in order to "formalize" and fix a cost-sharing arrangement that had "always been difficult to obtain and document," particularly the determination of "reasonable" contributions.⁴⁶ A Senate report on one proposed bill explained that cost share would additionally uphold "the supplemental nature of Federal aid which is a cardinal principle of the underlying Act" and help control costs by "making grantees … have a stake in the long-term costs related to disaster projects."⁴⁷

Several bills introduced over successive Congresses took up the cost-sharing issue; none were enacted. In 1986, FEMA proposed new federal regulations intended to reduce the overall federal share of disaster relief to 50% of otherwise eligible costs, to be achieved through a combination of sliding scale cost shares, the introduction of cost shares to temporary housing and crisis counseling programs that were otherwise 100% federally funded, and state "deductibles" paid prior to receiving federal assistance.⁴⁸ Committee Members of both parties expressed "deep ... concern" that the procedures abandoned those in need and "cross[ed] over the line" of executive discretion, referring to the proposal as "planned federal neglect."⁴⁹ Other Members spoke about the shortcomings of existing federal relief programs and stressed that, in practice, affected communities might ultimately pay much more than the nonfederal share apparent in specific federal programs:

You know, if we were getting 50 percent on the dollar right now, I would say, "Great, great, I will take the program, it gives me 50 percent on the dollar." But we don't get that now. They promise 75 percent, we are lucky if we get 38, 40 percent when we finally get approval on the projects that are supposed to be covered.⁵⁰

Representatives of the League of Cities, U.S. Conference of Mayors, the National Governors Association, and the National Coordinating Council on Emergency Management, among others, criticized the proposals' reduction of support for nonfederal governments and departure from the authorizing statute.⁵¹ Congress subsequently passed legislation prohibiting FEMA from implementing some of the proposals,⁵² and FEMA withdrew the rulemaking.⁵³

Congress revisited legislation to codify minimum federal shares for different relief programs, "so that FEMA cannot again attempt to reduce the federal share," according to one Member.⁵⁴ The enactment of the Robert T. Stafford Act in 1988 codified 75%-25% federal-nonfederal cost shares for both Public Assistance and financial assistance to individuals, while retaining 100% cost shares for temporary housing, crisis counseling, and unemployment insurance.⁵⁵ The Hazard Mitigation Grant Program assistance was originally authorized for up to 50% of eligible costs,⁵⁶ though that was increased to a 75% federal share in the Hazard Mitigation and Relocation Assistance Act of 1993 (P.L. 103-181).⁵⁷

1988–Present: Adjustments for Mitigation, Flexibility, and Equity

The general 75% federal/25% nonfederal cost-share authorities for Public Assistance, Individual Assistance for Other Needs, and the Hazard Mitigation Grant Program enacted in the Stafford Act and the Hazard Mitigation and Relocation Assistance Act remain active, as does the 100% federal funding for other Stafford Act programs for individuals and households. However, subsequent legislation has authorized modified cost shares for certain types of applicants or projects in order to incentivize resilient building, reduce expenditures on disaster-prone properties, and increase support for particularly vulnerable communities. For example, the Disaster Mitigation Act of 2000 reduced the federal cost share for Public Assistance properties that had suffered repeated disaster losses.⁵⁸ The Disaster Mitigation Act of 2000 also authorized the provision of pre-disaster mitigation assistance, which included a federal cost share of 90% for "small, impoverished communities"—the first enacted cost share designed to address equity concerns.⁵⁹ More recently, the Bipartisan Budget Act of 2018 authorized the President to increase federal cost shares for Public Assistance for states, tribes, and territories that had undertaken a range of actions (such as adoption and enforcement of hazard-resistant building codes, or promoting purchase of hazard insurance), though this authority has not yet been implemented.⁶⁰ The Disaster Recovery Reform Act eliminated penalties (in the form of reduced federal shares) for "alternative" restoration projects undertaken when a community determines new designs are in the public interest.⁶¹ Most recently, the Community Disaster Resilience Zones Act of 2022 authorized the President to increase the federal share for pre-disaster mitigation (BRIC) for zones including census tracts with high hazard risks.⁶²

Congress and the President also enacted a number of bills authorizing cost-share adjustments for particularly severe or widespread incidents, including assistance for hurricanes in 2005, 2008, and 2017 (including Hurricanes Katrina, Ike, Harvey, Irma, and Maria), the 2017 wildfires, and the COVID-19 pandemic (see Appendix B and Appendix C).

Cost-Share Adjustments: Trends and Context

As noted earlier, the Stafford Act permits the President to increase the federal share of authorized Public Assistance for a given declaration.⁶³ The President may also decrease the federal share of assistance authorized for HMGP or BRIC,⁶⁴ though CRS did not locate instances of such actions since 1995.⁶⁵ No federal regulations specify the conditions under which FEMA may recommend such a reduction.

According to regulations, FEMA may recommend that the President increase the PA cost share

• to up to 90% for PA for both emergency work and/or permanent work "whenever a disaster is so extraordinary that actual Federal obligations under the Stafford Act, excluding FEMA administrative cost, meet or exceed a qualifying threshold" that is adjusted annually.⁶⁶ The threshold for CY2023 is $173 dollars per capita statewide.⁶⁷
• to up to 100% for emergency work only when "warranted by the needs of the disaster … for a limited period in the initial days of the disaster irrespective of the per capita impact."

Additionally, the Insular Areas Act (P.L. 95-348, as amended) authorizes certain agencies to "waive any requirement for matching funds otherwise required by law to be provided by the Insular Area involved…," which Presidents have invoked to modify cost share requirements for HMGP and ONA that are otherwise fixed in statute.⁶⁸ For example, President William J. Clinton invoked the Insular Areas Act to authorize a 90% cost share for the Individuals and Family Grant program for Guam following Typhoon Paka in 1997.⁶⁹

Such cost-share adjustments have sometimes generated concern among oversight entities.⁷⁰ In 2012, the Government Accountability Office (GAO) found, among other issues, that there were no consistent, transparent procedures regarding the extension of cost-share waivers for Public Assistance for emergency work. GAO recommended that the FEMA Administrator develop and implement specific criteria for evaluating and extending cost-share adjustments of up to 100%.⁷¹ The recommendation was closed without implementation, with the following explanation:

Although FEMA initially concurred with this recommendation, FEMA has concluded that it will not establish specific criteria or factors to use when evaluating requests for cost share adjustments that would result in the federal government paying up to 100 percent of disaster costs. FEMA conducted a historical review of the circumstances that previously led to these cost share adjustments, and determined that each circumstance was unique in nature and could not be used to develop criteria or factors for future decision making. In addition, implementing criteria broad or flexible enough to capture these unique events would likely result in cost share adjustments for events that would not warrant an adjustment.⁷²

Trends

CRS used several publicly available databases to identify administrative and legislative Stafford Act cost-share adjustments. The following section identifies trends in legislative and administrative cost-share adjustments implemented since 1995 that could be identified by CRS.⁷³ CRS counted unique adjustments for distinct programs (e.g., Public Assistance, Individual Assistance for Other Needs), types of assistance (e.g., for Debris Removal), amounts (e.g., 90% federal share), and durations (time-limited, permanent).

A list of enacted statutory adjustments for specific incidents appears in Appendix B. A tabulation of administrative adjustments implemented for major disasters since 1995 is available in Appendix C.

Cost-Share Adjustments by Type, 1995-2023

Statutory vs. Administrative Adjustments

Stafford Act cost-share adjustments have taken several forms. Since 1995, the President has initiated less than half of all cost-share adjustments (referred to as "administrative adjustments"), while statutory adjustments accounted for the remainder (see Table 2). Congressional cost-share adjustments for specific incidents has increased during this time period, including with the enactment of the Consolidated Appropriations Act, 2022, which ordered that the federal government shall cover a minimum of 90% of eligible costs for all Stafford Act assistance authorized for a given incident declared or occurring between calendar years 2020-2021, excepting declarations for the COVID-19 pandemic.⁷⁴ The Consolidated Appropriations Act, 2022 authorized cost-share increases for 220 declarations under the Stafford Act⁷⁵—far more than any previous legislative cost-share adjustments targeting particular incidents.

Administrative Adjustments by Program

As illustrated in Figure 4, most administrative cost-share adjustments represent federal cost-share increases for FEMA Public Assistance. A smaller number increase federal shares for the Hazard Mitigation Grant Program or Individual Assistance for Other Needs and its predecessor, the Individuals and Family Grant program. These adjustments exercise authorities available under the Insular Areas Act to waive certain cost-share requirements for the five major territories.⁷⁶

Figure 4. Administrative Stafford Act Cost-Share Adjustments by Program Total Number Implemented Since 1995

Source: Compiled by CRS using searches of Federal Register.Gov and OpenFEMA. Notes: IFG = Individuals and Family Grant Program (precursor to current-day Individuals and Households Program); ONA = Individual Assistance for Other Needs; HMGP = Hazard Mitigation Grant Program; DFA = Direct Federal Assistance (e.g., federal personnel, supplies, facilities provided directly to affected communities).

Cost-Share Adjustments: Duration

As noted earlier, federal regulations specify that FEMA may recommend that the President increase the federal share for emergency work to up to 100% for a "limited period of time" when warranted by the severity of the event.

Just under half of administrative adjustments are time-limited, with the remaining being permanent increases of the federal share of assistance. Historical adjustments indicate that different administrations have interpreted "a limited period of time" to refer to a period of two days to up to several months (see Figure 5). Such limited-time cost-share waivers in the 1990s and 2000s typically lasted as little as 48-72 hours.⁷⁷ Cost-share waivers lasting under one week diminished around 2009, and have generally given way to waivers of 30-60 days or more.

As illustrated in Figure 4, some time-limited adjustments have lasted well over a year; almost all of these pertain to the COVID-19 pandemic. Upon assuming office in January 2021, President Biden increased the federal cost share for Public Assistance provided for the Stafford Act declarations for the COVID-19 pandemic from 75% to 100%.⁷⁸ The cost-share waiver ultimately lasted for an unprecedented 894 days, from January 20, 2020, to July 1, 2022, with a 90% cost share available thereafter through May 11, 2023.⁷⁹ Prior to that, the longest cost-share adjustments pertained to Louisiana's and Mississippi's major disaster declarations for Hurricane Katrina, which afforded cost-share waivers for debris removal for 490 and 625 days, respectively.⁸⁰

Figure 5. Duration of Time-Limited Cost-Share Adjustments Administrative Adjustments Since 1995

Source: Compiled by CRS using federalregister.gov and OpenFEMA. Note: Data reflect final cost-share adjustments, specific to each form of assistance. A 72-hour cost-share waiver for debris removal and emergency protective measures extended for 30 days appears as two, 33-day waivers. When adjustments are delimited by a certain date (vs. a specified period of time), the incident period is generally included in the duration, as FEMA notes that PA awards begin on the first day of the incident period (FEMA, PAPPG 2020, p. 26).

Cost-Share Adjustments by Year

The number of Stafford Act cost-share adjustments extended has spiked in the past two years (Figure 6). President Biden's extension of a 100% cost share for Public Assistance for the pandemic affected over 100 declarations. Subsequently, the enactment of the Consolidated Appropriations Act, 2022 authorized federal share increases for 220 Stafford Act declarations issued in 2020 and 2021. Other years with numerous cost-share adjustments included those issued for the 2005 hurricane season and the 2017 hurricane season.

Figure 6. Cost-Share Adjustments by Declaration Year Administrative and Statutory Adjustments Authorized, 1995-2022

Source: Compiled by CRS using Congress.gov, federalregister.gov, and OpenFEMA.

Cost-Share Adjustments—Geographic Distribution

The geographic distribution of cost-share adjustments generally reflects the geography of some of the most severe, expensive disasters since 1995. For example, Congress and presidents issued numerous cost-share adjustments to provide additional federal assistance following the destruction wrought by Hurricanes Katrina, Rita, and Wilma in the southeast; the terrorist attacks of September 11, 2001; Hurricanes Harvey, Irma, and Maria (2017); and the California wildfires since 2017 (see Figure 7). Federally recognized tribal governments have received 74 cost-share adjustments for federally recognized tribes; most of those pertain to the COVID-19 pandemic.

Figure 7. Declarations Affected by Cost-Share Adjustments, by State and Territory January 1995–June 2023

Source: Analysis based on cost-share adjustments announced in federalregister.gov, with reference to OpenFEMA declarations data.

Issues for Congress

Cost Shares as Incentives and Disincentives

Congress has treated Stafford Act cost shares as a tool to incentivize certain behaviors in disaster-affected communities (e.g., cost-effective, timely project completion, hazard-resilient rebuilding, insurance purchasing, building code adoption, preparedness) and disincentivize others (rebuilding repetitively damaged properties, unreasonable spending, overreliance on federal funds and emergency resources).

Congressional priorities have evolved since the existing, program-wide cost shares were established in statute in the late 1980s and early 1990s; Congress may consider amending cost shares accordingly. In recent years, for instance, Congress has underscored the importance of building resiliently and undertaking mitigation to reduce the costs and casualties of future disasters, while also raising concern about the growing costs of expensive post-disaster response and recovery.⁸¹ However, existing statute caps post-disaster Hazard Mitigation Grant Program assistance and sets a maximum 75% federal share for eligible costs, while Public Assistance for post-disaster response and recovery includes no cap and includes a minimum 75% federal share. Some experts have found that the federal government invests $7 in post-disaster recovery for every $1 in mitigation and resilience.⁸² Congress may consider authorizing an increased federal share for HMGP to incentivize resiliency,⁸³ and reducing the federal share for certain response and recovery projects in line with congressional priorities (for example, reducing spending in particularly hazard-prone areas). Congress could also consider authorizing higher federal cost shares or cost-share waivers to incentivize certain desirable pre-disaster or post-disaster outcomes and/or projects—for example, recommencing full-time schooling following severe incidents to reduce student displacement, restoring power and communications services, or completing low-emissions projects. Congress enacted similar authorities in the Bipartisan Budget Act of 2018, which authorized the President to increase the federal share for certain recovery projects to incentivize insurance purchasing and building code adoption; eligible activities could be expanded to reflect additional congressional priorities.

Role of FEMA and the President

The presidential authority to modify cost shares for Public Assistance and the Hazard Mitigation Grant Program assistance affords significant executive discretion over large portions of federal spending on disasters. FEMA, similarly, exercises significant authority when recommending such cost-share adjustments. These authorities have sometimes generated controversy and concern regarding political motivations behind the provision of federal relief.⁸⁴ For example, President Donald J. Trump increased the federal share for PA for permanent work to 90% in Puerto Rico following Hurricane María.⁸⁵ The assistance was conditioned on Puerto Rico's use of alternative procedures that transfer cost overruns entirely to affected communities (removing the federal share) and the formation of a fiscal oversight body, among other requirements.⁸⁶ Following congressional concern over the consequences for Puerto Rico and the politics of the decision,⁸⁷ Congress amended the Stafford Act to prohibit the conditioning of federal assistance in this way.⁸⁸

Congress may consider redressing concerns that decisions over whether and how to increase the federal shares for Stafford Act assistance may be politicized. Congress could, for example, establish statutory parameters for such increases, require FEMA to implement more detailed rulemaking on their procedures (particularly for administrative waivers of nonfederal cost shares), or require FEMA to release analyses of historical cost-share increases to increase transparency and foster trust in agency procedures. Alternatively, Congress may retain the initial deference to FEMA's expertise and presidential discretion demonstrated in current authorities.

Balancing Federal and Nonfederal Roles and Responsibilities

Congress intended Stafford Act cost shares to help reinforce the tenet of shared responsibility for disasters across levels of government. Congress may revisit this tenet as both Congress and the President increase the federal share of Stafford Act assistance with increasing frequency. Some experts have raised concerns that the growing federal role in disaster relief may lead to state and local overreliance on federal resources, personnel, and funds—potentially discouraging nonfederal investment in hazard mitigation, disaster budgeting, and incentivizing risky development.⁸⁹ For its part, FEMA has persistently stressed that the agency must judiciously conserve its financial and nonfinancial resources to be able to respond to the most catastrophic incidents. In 2020, for example, FEMA wrote

FEMA is unable to properly meet … demands when such a large portion of FEMA's staffing and focus are committed to numerous and cumulative smaller disasters that are actually, or should be, within the States' capabilities to handle on their own.... In order to build a more prepared and resilient nation, it is essential that State, local, Tribal, and Territorial governments continually mitigate risk to hazards posed by natural disasters, and build their response and recovery capabilities for future incidents, including the creation of dedicated financial reserves to respond to incidents.⁹⁰

Given these concerns, Congress may consider reducing the federal share of post-disaster response and recovery assistance, or restricting authorities to increase the federal share for Public Assistance.⁹¹ Congress could also reduce the federal share of assistance for states that lack current, enforced hazard-resistant building codes or disaster preparedness capability, though these options may particularly burden small, low-income communities. Alternatively, Congress may consider alternative means to incentivize nonfederal governments to build financial capacity, staffing and resources to manage future disasters—for example, by requiring states to maintain disaster reserves or permanently employ disaster mitigation personnel in order to access federal assistance.

Equity and Cost-Share Adjustments

Disaster-affected communities and their congressional representatives have raised concerns about the burdens imposed by Stafford Act cost shares for decades.⁹² Lower-income communities that are unable to meet the 25% nonfederal cost shares for PA, HMGP, and ONA may struggle to recover, or not pursue every possible assistance opportunity.⁹³ Some recent research and reporting support these concerns.⁹⁴ GAO and other experts have also found that cost-share adjustments are extended without transparency or consistency—which risks inequitable distribution of federal relief.⁹⁵ Furthermore, FEMA currently recommends permanent federal share increases for Public Assistance if other disaster aid exceeds certain thresholds—which may favor more densely built communities with higher property values and higher homeownership rates.⁹⁶

Congress may consider addressing concerns regarding disparate SLTT capacity to cover nonfederal cost shares. To that end, Congress could consider authorizing a means for the President to provide additional assistance to disaster-stricken, underserved communities. For example, Congress could amend the Stafford Act to allow for an increased cost share for the Public Assistance program for small, rural, impoverished, or otherwise disadvantaged communities, and require FEMA to engage in a rulemaking or develop guidance detailing such implementation.⁹⁷ However, Congress may weigh the potential problems and legal restrictions on targeting federal assistance based on race or national origin, and consider alternative means of defining underserved populations.⁹⁸ For example, Congress could target assistance based on historical access to federal disaster assistance, vulnerability to future hazards, or geographic isolation from emergency services.

However, existing FEMA resources may strain under new commitments to vulnerable communities without additional appropriations. Congress may also consider whether additional nonfederal assistance is at odds with the tenet that Stafford Act assistance should supplement—rather than supplant—SLTT resources. Should Congress seek to promote more equitable cost shares without increasing the federal share, Congress could consider standardizing cost shares across federal relief programs to enhance simplicity.⁹⁹ Congress could also consider proposals to codify the Community Development Block Grant Disaster Recovery Program (CDBG-DR) and/or align CDBG's requirements with Stafford Act programs to ease its use to meet Stafford Act cost-share requirements.¹⁰⁰

Managing Federal Funds in an Age of Increasing Disaster Costs

Disaster-related losses and costs substantially increased in recent years in the United States; these trends are expected to continue.¹⁰¹ Federal expenditures out of the Disaster Relief Fund in recent years have exceeded historical records, in part due to the costs of incidents with increased federal cost shares.¹⁰² Several scholars and oversight entities have found that the federal government is bearing an increasing share of disaster-related costs, including through increased Stafford-Act federal shares.¹⁰³ For example, the Congressional Budget Office (CBO) found the federal share of hurricane-related costs to increase from 17% before Hurricane Katrina to 62% thereafter.¹⁰⁴ Given these trends, policymakers and some experts have called for the federal government to consider shifting more of the costs of disasters onto state and local governments.¹⁰⁵

One potential option is to reduce the federal share of costs covered by some Stafford Act programs, or reduce the share available for certain awardees or projects. This could be achieved administratively, by reducing the number or extent of presidential cost-share increases under the Public Assistance program. Congress could also consider legislation to achieve cost-share reductions. Congress could consider reducing the federal share of certain forms of assistance, though prior efforts prompted widespread criticism.¹⁰⁶ Alternatively, Congress could limit or remove the presidential authority to increase cost shares for Public Assistance (e.g., allowing an increase only to 90%, or only under specific circumstances), to rein in the largest source of Disaster Relief Fund outlays.¹⁰⁷

Any of these options are likely to increase the financial burden on disaster-affected individuals, communities, and governments, and could result in the abandonment of certain response, recovery, or mitigation projects that are no longer affordable. To mitigate such adverse effects, Congress may consider pairing any reduction in cost shares for certain programs with financial incentives that reduce overall disaster risks and costs. For example, Congress could pair a phased reduction in federal shares for certain recovery assistance with an increased cost share for mitigation projects—which may be less expensive and are likely to reduce disaster costs for all parties.¹⁰⁸

Congress may also consider the increasing burdens on nonfederal governments confronting the same increasingly expensive, frequent disasters, and consider proposals to reduce their share of related costs.¹⁰⁹ For example, introduced legislation in the 117^th Congress would have reduced Stafford Act nonfederal cost shares for communities affected by multiple declared major disasters over a three-year period.¹¹⁰ Other experts have recommended implementing higher federal shares for communities with particular disaster vulnerability and relocation needs.¹¹¹

Conclusion

How much should the federal government help—and pay for—following a disaster in the United States? How much of the burden should fall upon affected state, local, tribal, territorial governments, individuals, and businesses? To what extent is federal disaster relief enabling risky development in hazard zones and discouraging states from building fiscal, social and infrastructural resilience to disasters? While these questions have animated policymakers for decades, they may have renewed relevance for Congress following years of historic federal obligations for disaster relief, numerous acts to increase the federal share of recent disaster costs, and persistently expensive, frequent domestic disaster activity. Congress may evaluate and decide what the federal government's role in disaster mitigation, response, and recovery should be, and to what extent it should continue to grow, and whether or to what extent cost shares may help achieve those ends.

Appendix A. Legislative History: Stafford Act Cost-Share Authorities

Appendix B. Incident-Specific Statutory Cost-Share Adjustments Enacted Since 1995

To identify relevant legislation enacted since 1995, CRS conducted full-text searches of Congress.gov using search terms including variations of, and combinations of, the following: "Robert T. Stafford Disaster Relief and Emergency Assistance Act," "amend," "make changes to," "waiver," "cost share," "federal share," "non-federal share," "eligible costs," "administrative costs," "legislative costs," "assistance," and "percent." CRS then reviewed the results, analyzed relevant provisions, and compiled them below. CRS supplemented this search with statutes cited in Federal Register notices amending federal shares for Stafford Act assistance. While CRS attempted to be comprehensive in its searches for legislation, due to the complexity and volume of legislation, CRS may not have captured all relevant items.

Appendix C. Administrative Cost-Share Adjustments: Major Disasters

Table C-1 tabulates discrete cost-share adjustments issued by the Executive for a given major disaster declaration. Adjustments of different duration and/or amounts for the same incident are listed separately. Columns represent the date of the relevant disaster declaration, the declaration number, the specified federal share, affected categories of Stafford Act assistance, the duration of the adjustment, and the related incident. Categories are inclusive, unless otherwise specified. For example, a cost-share adjustment provided for PA—Emergency Protective Measures including Direct Federal Assistance (DFA) will appear as simply PA—Emergency Protective Measures. A cost-share adjustment provided for PA—Emergency Protective Measures limited to assistance for the STEP Housing Program will appear as PA—Emergency Protective Measures for STEP Housing Program.

To reduce redundancy, CRS did not include cost-share adjustments for the COVID-19 pandemic. All jurisdictions received 100% federal funding for PA for emergency protective measures from January 20, 2020, through July 1, 2022 (894 days), after which PA was provided at a 90% federal share from July 2, 2022, generally through midnight on May 11, 2023.¹⁴²

Adjustments enacted by statute are not included. Adjustments for emergency declarations are not included. CRS may provide this data to congressional members and staff upon request.

Methodology

To assemble a list of administrative cost-share adjustments, CRS searched Federal Register notices issued by FEMA using search terms and variations of "federal funds," "federal share," "cost-sharing," "cost share," "100 percent," and "90 percent." Please note that these search results are generally limited to notices published in the Federal Register since 1995. Due to the search terms used and inherent limitations of text-based searches, the results may not be comprehensive.