Disaster Assistance Improvement and Decentralization Act

Amends section 102(8) (definition of 'local government') by adding a new subparagraph (D) to include any State or political subdivision of a State authorized by a local government to submit an application under the Act and serve as an agent on behalf of the local government; also makes minor punctuation edits to subparagraphs (B) and (C).

Adds a new provision to Title III (a new section titled 'Requirement to notify during prolonged pause in disaster assistance') establishing definitions for 'pause' and 'prolonged' and requiring the President to publicly disclose rationale, expected duration, legal authority, and resources to check status when a pause in disbursement of appropriated funds becomes 'prolonged.'

Inserts additional language after section 162(a) of the Internal Revenue Code of 1986 to provide a deduction rule relating to traveling expenses for Federal disaster relief workers away from home for more than 1 year.

Amends section 324 (management costs) to (1) redesignate certain subparagraphs and adjust formatting; (2) insert a new subsection defining 'excess funds for management costs,' authorizing the President to make such excess funds available to grantees or subgrantees under specified sections, and describing permissible uses for those funds; and (3) add a new paragraph establishing a timeline for awarding management cost increments (50% by 30 days, 75% by 180 days, 100% by 1 year after a President's major disaster declaration).

Replaces subsection (a) and certain undesignated matter to revise the simplified procedure eligibility definition, set (as written) a specified dollar threshold for eligible projects, require CPI adjustments, permit Federal contributions based on costs incurred with a limit of 150 percent of the Federal cost estimate, and add an exception where paragraph (2) does not apply if cost overruns are due to poor management, fraud, or waste.

Adds a new section 207 (State hazard mitigation office funding) to Title II of the Robert T. Stafford Disaster Relief and Emergency Assistance Act authorizing financial assistance to States and Indian tribal governments to fund State hazard mitigation offices, setting minimum and population-proportional amounts, and authorizing appropriations.

Strikes and inserts new text in paragraph (1) of section 404(a) and adds a new paragraph (2) (Sliding scale) allowing the President to increase the Federal cost share of hazard mitigation measures to not more than 85 percent for low-capacity jurisdictions.

Adds a new paragraph (6) to subsection (c) of section 404 permitting States or Indian tribal governments that receive multiple concurrent contributions to combine amounts for a single fund for management and audit purposes and to apply the most recent contribution's project completion, auditing, or reporting deadline to other concurrent contributions.

Amends subsection (e) of section 404 by increasing advance assistance from 25 percent to 50 percent.

Amends section 203(i) to change the set-aside provision from discretionary to mandatory, prohibit use of amounts set aside for other purposes, and require annual obligation of at least the lesser of 10 percent and $500,000,000 (adjusted annually for CPI) of amounts set aside.