(a) Pilot program

(1) In general

The President, acting through the Administrator, and in coordination with State and local governments, shall establish and conduct a pilot program to—

(A) reduce the costs to the Federal Government of providing assistance to States and local governments under sections 5170b(a)(3)(A), 5172, and 5173 of title 42;

(B) increase flexibility in the administration of sections 5170b(a)(3)(A), 5172, and 5173 of title 42; and

(C) expedite the provision of assistance to States and local governments provided under sections 5170b(a)(3)(A), 5172, and 5173 of title 42.

(2) Participation

Only States and local governments that elect to participate in the pilot program may participate in the pilot program for a particular project.

(3) Innovative administration

(A) In general

For purposes of the pilot program, the Administrator shall establish new procedures to administer assistance provided under the sections referred to in paragraph (1).

(B) New procedures

The new procedures established under subparagraph (A) may include 1 or more of the following:

(i) Notwithstanding section 5172(c)(1)(A) of title 42, providing an option for a State or local government to elect to receive an in-lieu contribution in an amount equal to 90 percent of the Federal share of the Federal estimate of the cost of repair, restoration, reconstruction, or replacement of a public facility owned or controlled by the State or local government and of management expenses.

(ii) Making grants on the basis of estimates agreed to by the local government (or where no local government is involved, by the State government) and the Administrator to provide financial incentives and disincentives for the local government (or where no local government is involved, for the State government) for the timely or cost effective completion of projects under sections 5170b(a)(3)(A), 5172, and 5173 of title 42.

(iii) Increasing the Federal share for removal of debris and wreckage for States and local governments that have a debris management plan approved by the Administrator and have pre-qualified 1 or more debris and wreckage removal contractors before the date of declaration of the major disaster.

(iv) Using a sliding scale for the Federal share for removal of debris and wreckage based on the time it takes to complete debris and wreckage removal.

(v) Using a financial incentive to recycle debris.

(vi) Reimbursing base wages for employees and extra hires of a State or local government involved in or administering debris and wreckage removal.

(4) Waiver

The Administrator may waive such regulations or rules applicable to the provisions of assistance under the sections referred to in paragraph (1) as the Administrator determines are necessary to carry out the pilot program under this section.

(b) Report

(1) In general

Not later than March 31, 2009, the Administrator shall submit to the appropriate committees of Congress a report regarding the effectiveness of the pilot program under this section.

(2) Contents

The report submitted under paragraph (1) shall include—

(A) an assessment by the Administrator of any administrative or financial benefits of the pilot program;

(B) an assessment by the Administrator of the effect, including any savings in time and cost, of the pilot program;

(D) any other findings and conclusions of the Administrator with respect to the pilot program; and

(E) any recommendations of the Administrator for additional authority to continue or make permanent the pilot program.

The Administrator shall initiate implementation of the pilot program under this section not later than 90 days after October 4, 2006.

(d) Pilot program project duration

The Administrator may not approve a project under the pilot program under this section after December 31, 2008.