Federal Cost Share Reform Incentive Update

Since the passage of the bipartisan budget agreement on February 9, the International Code Council staff has been in close contact with the Federal Emergency Management Agency (FEMA) about the Federal Cost Share Reform Incentive. This provision encourages states to adopt the latest building codes, incentivizes states to invest in the resiliency of their communities, and includes additional disaster relief funds of nearly $90 billion. We know that many of you have questions about how this incentive will be implemented.

FEMA does not have additional details or criteria yet. They have one year to provide guidance to the states. The Code Council is working with our colleagues at FEMA, and we are working with governors and emergency managers across the U.S. to understand the opportunities and implications of this new cost share incentive. We will provide regular updates as information becomes available.

See the full legislative language of the Federal Cost Share Reform Incentive below.

Legislative Language

Bipartisan Budget Act of 2018

Federal Cost Share Reform Incentive

(3) INCREASED FEDERAL SHARE.—

(A) INCENTIVE MEASURES.—The President may provide incentives to a State or Tribal government to invest in measures that increase readiness for, and resilience from, a major disaster by recognizing such investments through a sliding scale that increases the minimum Federal share to 85 percent. Such measures may include—

(i) the adoption of a mitigation plan approved under section 322;

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

(iii) encouraging the adoption and enforcement of the latest published editions of 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 purpose of protecting the health, safety, and general welfare of the buildings’ users against disasters;

(iv) facilitating participation in the community rating system; and

(v) funding mitigation projects or granting tax incentives for projects that reduce risk.

(B) COMPREHENSIVE GUIDANCE.—Not later than 1 year after the date of enactment of this paragraph, the President, acting through the Administrator, shall issue comprehensive guidance to State and Tribal governments regarding the measures and investments, weighted appropriately based on actuarial assessments of eligible actions, that will be recognized for the purpose of increasing the Federal share under this section. Guidance shall ensure that the agency’s review of eligible measures and investments does not unduly delay determining the appropriate Federal cost share.  

(C) REPORT.—One year after the issuance of the guidance required by subparagraph (B), the Administrator shall submit to the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a report regarding the analysis of the Federal cost shares paid under this section.

(D) SAVINGS CLAUSE.—Nothing in this paragraph prevents the President from increasing the Federal cost share above 85 percent.