Disaster Assistance; Public Assistance Program and Community Disaster Loan Program - Interim Final Rule


[Federal Register: May 4, 2001 (Volume 66, Number 87)]
[Rules and Regulations]               
[Page 22443-22445]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04my01-9]                         

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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067-AD20

 
Disaster Assistance; Public Assistance Program and Community 
Disaster Loan Program

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Interim final rule.

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SUMMARY: We, FEMA, are publishing an interim final rule to implement 
portions of the Disaster Mitigation Act of 2000 that affect large in-
lieu contributions (alternate projects), irrigation facilities, 
critical/non-critical private nonprofit facilities, and community 
disaster loans.

DATE: Effective October 30, 2000. Comments on this interim final rule 
should be received by July 3, 2001.

ADDRESSES: Please send any comments to the Rules Docket Clerk, Office 
of the General Counsel, Federal Emergency Management Agency, room 840, 
500 C Street, SW., Washington, DC 20472, or (fax) (202) 646-4536, or 
(email) rules@fema.gov.

FOR FURTHER INFORMATION CONTACT: Margaret Earman, Response and Recovery 
Directorate, Federal Emergency Management Agency, room 401, 500 C 
Street, SW., Washington, DC 20472, or call (202) 646-4172 or (email) 
margie.earman@dhs.gov.

SUPPLEMENTARY INFORMATION:
    Large in-lieu contributions. The Disaster Mitigation Act of 2000 
(DMA 2000), Pub. L. 106-390, 114 Stat. 1552 et seq., amended the 
Federal contribution for Large in Lieu Contributions, which is known as 
``alternate projects'' and is authorized under section 406(c) of the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act 
(Stafford Act), 42 U.S.C. 5172, from 90 percent of the Federal share of 
the Federal estimate to 75 percent of the Federal share of the Federal 
estimate of the cost of repairing, restoring, reconstructing, or 
replacing the facility. There is an exception to this change for 
publicly-owned or -controlled facilities. When a State or local 
government applicant selects an alternate project because unstable soil 
at the site of the damaged facility makes repair or restoration of that 
facility infeasible, the Federal contribution remains at 90 percent. 
The soil conditions at the project site, which make restoration 
infeasible, will be established in a geo-technical report that the 
applicant must submit. All alternate projects are still approved on a 
project-by-project basis.
    Irrigation facilities. The DMA 2000 amended section 102(9) of the 
Stafford Act, 42 U.S.C 5122 to add ``irrigation'' to the definition of 
private nonprofit (PNP) facilities. However, not all PNP irrigation 
facilities are eligible for assistance. The legislative history 
indicates that eligible irrigation facilities include those that supply 
water for ``essential services of a governmental nature to the general 
public'' (which is the requirement for any PNP to be eligible), such as 
fire suppression, generating and supplying electricity, and drinking 
water supply. They do not include those that supply water for 
agricultural purposes. If an irrigation system serves both eligible and 
ineligible purposes, assistance for those portions that serve both 
purposes will be prorated on the basis of the proportional share of 
water used. For those portions that serve an eligible purpose 
exclusively, all disaster-related damages to that portion would be 
eligible. Those portions serving an ineligible purpose exclusively will 
not be eligible.
    Critical/non-critical PNP facilities. Under section 406(a)(3) of 
the Stafford Act, 42 U.S.C. 5172, as amended by the DMA 2000 and before 
receiving assistance under the Stafford Act certain non-critical PNP 
facilities must apply first to the Small Business Administration (SBA) 
for a disaster loan for permanent restoration work in those disasters 
when the SBA activates its disaster loan program. DMA 2000 defines 
those critical services where the owner or operator need not apply to 
SBA to include: Water (including water provided by an irrigation 
organization or facility as discussed above), sewer, wastewater 
treatment, communications, and emergency medical care. We propose to 
add fire department services, emergency rescue, and nursing homes to 
the list of critical services. Communication services means 
transmission, switching and distribution of telephone traffic. 
Emergency medical care includes essential direct patient care to 
persons and includes hospitals, clinics, outpatient services, and 
nursing homes. Owners and operators of these critical service 
facilities may apply directly to FEMA for assistance.
    Other eligible, but non-critical, PNP facility owners or operators 
must apply to SBA for a disaster loan, and if SBA declines their 
application they may apply to FEMA for a grant. In addition, if the 
maximum loan for which they are eligible does not cover all eligible 
damages, they may apply to FEMA for the excess damages. The requirement 
for owners or operators of non-critical facilities to go first to SBA 
applies only to permanent restoration work. All eligible PNP facility 
owners and operators may make requests for assistance for debris 
removal and emergency protective measures directly to FEMA.
    Community Disaster Loans. The DMA 2000 made two amendments to the 
Community Disaster Loan (CDL) program, section 417 of the Stafford Act, 
42 U.S.C. 5184. The DMA 2000 sets a cap of $5,000,000 on the amount of 
any community disaster loan that FEMA might make, and states that a 
local government will not be eligible for further community disaster 
loan assistance if the community is in arrears on any required 
repayment of a previous community disaster loan. We propose to amend 44 
CFR 206.361 and 206.363 to reflect these statutory changes.

Administrative Procedure Act Statement

    This interim final rule implements certain mandatory provisions of 
the Disaster Mitigation Act of 2000 that relate to the Public 
Assistance Program and the Community Disaster Loan Program, provisions 
that the Congress intended to go into effect upon enactment. In keeping 
with that intent, we are making this rule retroactively effective as of 
the date of enactment, October 30, 2000, for all disasters declared on 
or after that date. We seek and invite public comments, nevertheless, 
on this interim final rule,

[[Page 22444]]

which we will consider in our preparation of the final rule. 
Accordingly, under the authority of 5 U.S.C. 553(b)(3)(B), I find that 
notice and public procedure on this interim final rule are 
impracticable and contrary to the public interest.

National Environmental Policy Act (NEPA)

    NEPA imposes requirements for considering the environmental impacts 
of agency decisions. It requires that an agency prepare an 
Environmental Impact Statement (EIS) for ``major federal actions 
significantly affecting the quality of the human environment.'' If an 
action may or may not have a significant impact, the agency must 
prepare an environmental assessment (EA). If, as a result of this 
study, the agency makes a Finding of No Significant Impact (FONSI), no 
further action is necessary. If it will have a significant effect, then 
the agency uses the EA to develop an EIS.
    Categorical Exclusions. Agencies can categorically identify actions 
(for example, repair of a building damaged by a disaster) that do not 
normally have a significant impact on the environment. The purpose of 
this interim final rule is to amend our Stafford Act rules to 
incorporate part of the changes mandated by the Disaster Mitigation Act 
of 2000 for the Public Assistance Program and for Community Disaster 
Loans. Accordingly, we have determined that this rule is excluded from 
the preparation of an environmental assessment or environmental impact 
statement under 44 CFR 10.8(d)(2)(ii), where the rule is related to 
actions that qualify for categorical exclusion. The changes reflected 
in this rule are exempt from NEPA because they reflect administrative 
changes to the programs that have no potential to affect the 
environment. We would perform an environmental review under 44 CFR part 
10, Environmental Considerations, on each proposed project that we 
would fund and implement under the authorities covered in this rule.

Paperwork Reduction Act

    This rule is not subject to the provisions of the Paperwork 
Reduction Act. It does not require any new information collections and 
therefore would not revise the number and types of responses, 
frequency, and burden hours.

Regulatory Planning and Review

    We have prepared and reviewed this interim final rule under the 
provisions of Executive Order 12866, Regulatory Planning and Review. 
Under Executive Order 12866, 58 FR 51735, October 4, 1993, a 
significant regulatory action is subject to OMB review and the 
requirements of the Executive Order. The Executive Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This interim final rule implements certain mandatory provisions of 
the Disaster Mitigation Act of 2000 that relate to the Public 
Assistance Program and the Community Disaster Loan Program. The 
authorities mandated would not of themselves have an annual effect on 
the economy of $100 million or more. We anticipate that the impacts of 
the alternate projects provision will be neutral, expecting that the 
savings from reducing the Federal share of the Federal estimate from 90 
percent to 75 percent will be offset by fewer applications for 
assistance under this authority. We do not anticipate any change in 
costs by adding irrigation facilities to the definition of eligible 
private nonprofit facilities inasmuch as the rule reflects the statute 
and codifies our current policy and practices. Most of the private 
nonprofit organizations that will have to apply for SBA disaster loans 
before being eligible to apply for FEMA disaster assistance have 
damages well below the SBA loan limit of $1,500,000. We do not expect 
this provision will have an impact of $100,000,000 or more per year. 
Finally, we do not anticipate that savings from amendments to the 
Community Disaster Loan provision will exceed $100,000,000 over a 
several-year period--our experience is that disaster loan forgiveness 
rates are between 60 and 70 percent. Over the last 25 years, the annual 
amount of money forgiven has been an average of $2.7 million.
    We know of no conditions that would qualify the rule as a 
``significant regulatory action'' within the definition of section 3(f) 
of the Executive Order. To the extent possible this rule adheres to the 
principles of regulation as set forth in Executive Order 12866. The 
Office of Management and Budget has not reviewed this rule under the 
provisions of Executive Order 12866.

Executive Order 13132, Federalism

    Executive Order 13132 sets forth principles and criteria that 
agencies must adhere to in formulating and implementing policies that 
have federalism implications, that is, regulations that have 
substantial direct effects on the States, or on the distribution of 
power and responsibilities among the various levels of government. 
Federal agencies must closely examine the statutory authority 
supporting any action that would limit the policymaking discretion of 
the States, and to the extent practicable, must consult with State and 
local officials before implementing any such action.
    We have reviewed this interim final rule under Executive Order 
13132 and have determined that the rule does not have federalism 
implications as defined by the Executive Order. The rule would define 
and establish the conditions and criteria under which FEMA would grant 
public assistance and make community disaster loans. The rule would in 
no way that we foresee affect the distribution of power and 
responsibilities among the various levels of government or limit the 
policymaking discretion of the States.

List of Subjects in 44 CFR Part 206

    Administrative practice and procedure, Community facilities, 
Disaster Assistance, Grant programs, Loan programs, Reporting and 
recordkeeping requirements.

    Accordingly, amend 44 CFR Part 206 as follows:
    1. The authority citation of part 206 continues to read:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 et seq.; Reorganization Plan No. 3 of 
1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 
19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 
1979 Comp., p. 412; and E.O. 12673, 54 FR 12571, 3 CFR, 1989 Comp., 
p. 214.

    2. Amend Sec. 206.203 as follows:
    (a) Redesignate paragraphs (d)(2)(iii) and (d)(2)(iv) as paragraphs 
(d)(2)(iv) and (d)(2)(v); and
    (b) Revise paragraph (d)(2)(ii) and add new paragraph (d)(2)(iii) 
to read as follows:


Sec. 206.203  Federal grant assistance.

* * * * *
    (d) Funding options--* * *

[[Page 22445]]

    (2) Alternate projects. * * *
    (ii) Federal funding for such alternate projects will be 75 percent 
of the Federal share of the approved Federal estimate of eligible 
costs.
    (iii) If soil instability at the alternate project site makes the 
repair, restoration or replacement of a State or local government-owned 
or -controlled facility infeasible, the Federal funding for such an 
alternate project will be 90 percent of the Federal share of the 
approved Federal estimate of eligible costs.
* * * * *

    3. Amend Sec. 206.221 as follows:
    (a) Redesignate paragraphs (e)(3) through (e)(6) as paragraphs 
(e)(4) through (e)(7); and
    (b) Add new paragraph (e)(3) to read as follows:


Sec. 206.221  Definitions.

* * * * *
    (e) Private nonprofit facility * * *
    (3) Irrigation facility means those facilities that provide water 
for essential services of a governmental nature to the general public. 
Irrigation facilities include water for fire suppression, generating 
and supplying electricity, and drinking water supply; they do not 
include water for agricultural purposes.
* * * * *

    4. Amend Sec. 203.226 as follows:
    (a) Redesignate paragraphs (b) through (i) as paragraphs (c) 
through (j); and
    (b) Add new paragraph (b) to read as follows:


Sec. 206.226  Restoration of damaged facilities.

* * * * *
    (b) Private nonprofit facilities. Eligible private nonprofit 
facilities may receive funding under the following conditions:
    (1) The facility provides critical services, which include power, 
water (including water provided by an irrigation organization or 
facility in accordance with Sec. 206.221(e)(3)), sewer services, 
wastewater treatment, communications, emergency medical care, fire 
department services, emergency rescue, and nursing homes; or
    (2) The private nonprofit organization not falling within the 
criteria of Sec. 206.226(b)(1) has applied for a disaster loan under 
section 7(b) of the Small Business Act (15 U.S.C.636(b)) and
    (i) The Small Business Administration has declined the 
organization's application; or
    (ii) Has eligible damages greater than the maximum amount of the 
loan for which it is eligible, in which case the excess damages are 
eligible for FEMA assistance.
* * * * *

    5. Revise Sec. 206.361(b) to read as follows:


Sec. 206.361  Loan program.

* * * * *
    (b) Amount of loan. The amount of the loan is based upon need, not 
to exceed 25 percent of the operating budget of the local government 
for the fiscal year in which the disaster occurs, but shall not exceed 
$5 million. The term fiscal year as used in this subpart means the 
local government's fiscal year.
* * * * *

    6. Revise Sec. 206.363(b)(1) to read as follows:


Sec. 206.363  Eligibility criteria.

* * * * *
    (b) Loan eligibility--(1) General. To be eligible, the local 
government must show that it may suffer or has suffered a substantial 
loss of tax and other revenues as a result of a major disaster or 
emergency, must demonstrate a need for financial assistance in order to 
perform its governmental functions, and must not be in arrears with 
respect to any payments due on previous loans. Loan eligibility is 
based on the financial condition of the local government and a review 
of financial information and supporting documentation accompanying the 
application.
* * * * *

    Dated: April 30, 2001.
Joe M. Allbaugh,
Director.
[FR Doc. 01-11155 Filed 5-3-01; 8:45 am]
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