FLEXIBILITY.

SEC. 1216. [42 U.S.C. 5174a] FLEXIBILITY. (a) Waiver Authority.— (1) Definition.—In this subsection, the term “covered assistance” means assistance provided— (A) under section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174); and (B) in relation to a major disaster or emergency declared by the President under section 401 or 501, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170, 5191) on or after October 28, 2012. (2) Authority.—Notwithstanding section 3716(e) of title 31, United States Code, the Administrator— (A) except as provided in subparagraph (B), shall— (i) waive a debt owed to the United States related to covered assistance provided to an individual or household if the covered assistance was distributed based on an error by the Agency and such debt shall be construed as a hardship; and (ii) waive a debt owed to the United States related to covered assistance provided to an individual or household if such assistance is subject to a claim or legal action, including in accordance with section of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5160); and (B) may not waive a debt under subparagraph (A) if the debt involves fraud, the presentation of a false claim, or misrepresentation by the debtor or any party having an interest in the claim. (3) Monitoring of covered assistance distributed based on error.— (A) In general.—The Inspector General of the Department of Homeland Security shall monitor the distribution of covered assistance to individuals and households to determine the percentage of such assistance distributed based on an error. (B) Report on waiver authority based on excessive error rate.—If the Inspector General of the Department of Homeland Security determines, with respect to any 12-month period, that the amount of covered assistance distributed based on an error by the Agency exceeds 4 percent of the total amount of covered assistance distributed— (i) the Inspector General shall notify the Administrator and publish the determination in the Federal Register; and (ii) with respect to any major disaster or emergency declared by the President under section 401 or section 501, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170; 42 U.S.C. 5191) after the date on which the determination is published under subparagraph (A), the Administrator shall report to the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate actions that the Administrator will take to reduce the error rate. (b) Recoupment of Certain Assistance Prohibited.— (1) In general.—Notwithstanding section 3716(e) of title 31, United States Code, and unless there is evidence of civil or criminal fraud, the Agency may not take any action to recoup covered assistance from the recipient of such assistance if the receipt of such assistance occurred on a date that is more than 3 years before the date on which the Agency first provides to the recipient written notification of an intent to recoup. (2) Covered assistance defined.—In this subsection, the term “covered assistance” means assistance provided— (A) under section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174); and (B) in relation to a major disaster or emergency declared by the President under section 401 or 501, respectively, of such Act (42 U.S.C. 5170; 42 U.S.C. 5191) on or after January 1, 2012. (c) Statute of Limitations.— (1) In general.—Section 705 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5205) is amended— (A) in subsection (a)(1)— (i) by striking “Except” and inserting “Notwithstanding section 3716(e) of title 31, United States Code, and except”; and (ii) by striking “report for the disaster or emergency” and inserting “report for project completion as certified by the grantee”; and (B) in subsection (b)— (i) in paragraph (1) by striking “report for the disaster or emergency” and inserting “report for project completion as certified by the grantee”; and (ii) in paragraph (3) by inserting “for project completion as certified by the grantee” after “final expenditure report”. (2) Applicability.— (A) In general.—With respect to disaster or emergency assistance provided to a State or local government on or after January 1, 2004— (i) no administrative action may be taken to recover a payment of such assistance after the date of enactment of this Act if the action is prohibited under section 705(a)(1) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5205(a)(1)), as amended by paragraph (1); and (ii) any administrative action to recover a payment of such assistance that is pending on such date of enactment shall be terminated if the action is prohibited under section 705(a)(1) of that Act, as amended by paragraph (1). (B) Limitation.—This section, including the amendments made by this section, may not be construed to invalidate or otherwise affect any administration action completed before the date of enactment of this Act.