S. 773 — Disaster Management Costs Modernization Act

This section establishes a process to make excess management costs—defined as the difference between authorized amounts for direct and indirect administrative expenses under FEMA's Public Assistance program (up to 12% of awards, with 7% for grantees and 5% for subgrantees) or Hazard Mitigation Grant Program (up to 15%, with 10% for grantees and 5% for subgrantees) and actual expenditures at grant closeout—available to grantees and subgrantees for (1) capacity-building activities to prepare for, recover from, or mitigate major disasters or emergencies and (2) management costs associated with any major disaster, emergency, disaster preparedness measure, or mitigation activity under specified Stafford Act sections, with funds remaining available for five years. (As background, management costs reimburse administrative expenses for FEMA disaster grants to state, local, tribal, and territorial governments.) The section applies to grants for major disasters or emergencies declared on or after enactment and funded with appropriations on or after enactment; requires a GAO report within 180 days of enactment assessing the appropriateness of these management cost rates based on actual costs and historical data for major disasters over the prior five years; and specifies that no additional funds are authorized.