[Federal Register Volume 74, Number 153 (Tuesday, August 11, 2009)]
[Proposed Rules]
[Pages 40124-40131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19156]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

[Docket ID FEMA-2008-0006]
RIN 1660-AA47


Disaster Assistance; Public Assistance Repetitive Damage

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule implements aspects of the Disaster 
Mitigation Act of 2000 by reducing the Federal cost share of FEMA 
Public Assistance to public and certain private nonprofit facilities 
repetitively damaged in the preceding 10 years by the same type of 
event and for which required hazard mitigation has not been

[[Page 40125]]

implemented. The Federal government should not repetitively reimburse 
eligible applicants for damage that could be prevented through 
mitigation efforts. The reduced Federal cost share of the proposed rule 
is intended to provide an incentive to mitigate repetitive damage, 
promote measures that reduce future loss to life and property, protect 
Federal investment in public infrastructure, and help build disaster-
resistant communities.

DATES: Submit comments on or before October 13, 2009.

ADDRESSES: You may submit comments, identified by Docket ID FEMA-2008-
0006, by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: <a href="/cdn-cgi/l/email-protection#cc8a89818de19e9980899f8ca8a4bfe2aba3ba"><span class="__cf_email__" data-cfemail="8ec8cbc3cfa3dcdbc2cbddceeae6fda0e9e1f8">[email protected]</span></a>. Include Docket ID FEMA-2008-0006 in the 
subject line of the message.
    Fax: 703-483-2999.
    Mail/Hand Delivery/Courier: Rules Docket Clerk, Office of Chief 
Counsel, Federal Emergency Management Agency, Room 835, 500 C Street, 
SW., Washington, DC 20472-3100.
    Instructions: All Submissions received must include the agency name 
and docket ID. Regardless of the method used for submitting comments or 
material, all submissions will be posted, without change, to the 
Federal eRulemaking Portal at http://www.regulations.gov, and will 
include any personal information you provide. Therefore, submitting 
this information makes it public. You may wish to read the Privacy Act 
notice that is available on the Privacy and Use Notice link on the 
Administration Navigation Bar of http://www.regulations.gov.
    Docket: For access to the docket to read background documents or 
comments received, go to the Federal eRulemaking Portal at http://www.regulations.gov and search for Federal Emergency Management Agency 
docket ID ``FEMA-2008-0006.'' Submitted comments may also be inspected 
at FEMA, Office of Chief Counsel, Room 835, 500 C Street, SW., 
Washington, DC 20472-3100.

FOR FURTHER INFORMATION CONTACT: Tod Wells, Acting Director, Public 
Assistance Division, Federal Emergency Management Agency, 500 C Street, 
SW., Room 414, Washington, DC 20472-3100, (phone) 202-646-3936; 
(facsimile) 202-646-3304; or (e-mail) <a href="/cdn-cgi/l/email-protection#35615a511b625059594675515d461b525a43"><span class="__cf_email__" data-cfemail="a4f0cbc08af3c1c8c8d7e4c0ccd78ac3cbd2">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Background

    Each year, disasters strike the United States, including natural 
events such as hurricanes, tornadoes, storms, earthquakes, volcanic 
eruptions, landslides, snowstorms, and droughts and events that occur 
from various other causes such as fires, floods, and explosions. When a 
disaster occurs and a locality has responded to the best of its ability 
and is, or will be, overwhelmed by the magnitude of the damage, the 
community turns to the State for help. If it is evident that the 
situation is or will be beyond the combined capabilities of the local 
and State resources, the Governor may request that the President 
declare that an emergency or major disaster exists in the State, under 
the authority of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act \1\ (Stafford Act).
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    \1\ Disaster Relief Act of 1974, Public Law 93-288, 88 Stat. 143 
(May 22, 1974), as amended 42 U.S.C. 5121 et seq.
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    If an emergency or major disaster is declared, the Federal 
Emergency Management Agency (FEMA) may award Public Assistance grants 
to assist State, Tribal, and local governments and certain private 
nonprofit entities (applicants), as defined in subpart H of 44 CFR part 
206, with the response to and recovery from disasters. Specifically, 
the Public Assistance Program provides assistance for debris removal, 
emergency protective measures and permanent restoration of 
infrastructure. To obtain these Public Assistance grants for damaged 
facilities, the applicants must identify disaster-related damage which 
is documented on a Project Worksheet (PW), referenced at 44 CFR 
206.201(i).
    The PW is the basis for Public Assistance grants and FEMA uses the 
PW to document eligible costs. Federal funding is subject to the cost 
share provisions established in the Stafford Act (42 U.S.C. 5172(b)), 
and FEMA-State Agreement (44 CFR 206.47(a)). Typically, the Federal 
cost share is 75 percent of the eligible costs identified on the PW.
    In 2000, the President signed into law the Disaster Mitigation Act 
of 2000 (DMA 2000), Public Law 106-390, 42 U.S.C. 5121 note. Subsection 
205(b) of DMA 2000 amended section 406 of the Stafford Act by adding a 
new paragraph (b)(2) (42 U.S.C. 5172(b)(2)) which states:

    The President shall promulgate regulations to reduce the Federal 
share of assistance under this section to not less than 25 percent 
in the case of the repair, restoration, reconstruction, or 
replacement of any eligible public facility or private nonprofit 
facility following an event associated with a major disaster--(A) 
that has been damaged, on more than one occasion within the 
preceding10-year period, by the same type of event; and (B) the 
owner of which has failed to implement appropriate mitigation 
measures to address the hazard that caused the damage to the 
facility.

This cost share reduction adds to existing hazard mitigation 
authorities under sections 203, 404, and 406 of the Stafford Act.

II. Discussion of the Proposed Rule

    In accordance with the amendment to section 406 of the Stafford 
Act, this proposed rule would reduce the Federal cost share to 25 
percent of eligible costs if the applicant has not taken appropriate 
mitigation measures on a repetitively damaged facility. FEMA identified 
a number of key issues in drafting this proposed rule. These include: 
(A) Defining a ``facility'' as it relates to the new statutory 
provision; (B) determining when the requirements of the new provision 
will become effective; (C) determining what qualifies as ``more than 
one occasion;'' (D) defining the ``same type of event;'' (E) 
determining the amount of the cost share reduction; (F) defining an 
``appropriate mitigation measure;'' and the process for identifying 
such mitigation measures; and (G) establishing a system to identify 
repetitively damaged facilities. FEMA discusses each of these issues 
individually below. FEMA invites comment on each of these issues as 
well as any other issues the public may find relevant.

A. Definition of ``Facility''

    FEMA proposes to use the existing definition of a ``facility'' in 
44 CFR 206.201(c). The existing definition states: ``Facility means any 
publicly or privately owned building, works, system, or equipment, 
built or manufactured, or an improved and maintained natural feature. 
Land used for agricultural purposes is not a facility.'' Using the 
existing definition of ``facility'' in 44 CFR 206.201(c) will eliminate 
any potential confusion caused by a separate definition for the 
application of this rule and ensure programmatic consistency.

B. When Will the Requirements Become Effective?

    FEMA would begin the process of counting events for eligible 
damaged facilities only after it issues an effective rule. While one 
might argue that FEMA should have begun tracking such events upon the 
enactment of the DMA 2000, FEMA proposes not to begin that process 
until it issues an effective rule, in order to give applicants ample 
time to implement appropriate mitigation

[[Page 40126]]

measures. FEMA believes this process is further justified because this 
proposed rule is still subject to change based upon public comments 
received.

C. Definition of ``More Than One Occasion''

    FEMA would reduce the Federal cost share upon the third occurrence 
of damage to an eligible facility. In drafting the proposed rule, FEMA 
contemplated reducing the Federal cost share upon the second damaging 
event. However, the Stafford Act states that the reduction in benefits 
can only occur to a facility ``that has been damaged, on more than one 
occasion.'' A facility that is damaged on ``more than one occasion'' 
has suffered damage at least twice. Therefore, the benefit reduction 
would have to occur on or after the third occasion. Consistent with the 
statutory language, FEMA would reduce Federal assistance upon the third 
occurrence of the ``same type of event.''

D. Definition of ``Same Type of Event''

    Another issue that FEMA addressed is the definition of the ``same 
type of event'' that will trigger the cost share reduction mandates. 
FEMA considered how precisely the term ``event'' should be defined. The 
proposed rule defines ``same type of event'' as one that is the same 
major disaster type (e.g., hurricane, tornado, flood, or earthquake). 
FEMA documents the major disaster type on every PW. By defining ``same 
type of event'' by major disaster type, FEMA can easily track and 
ensure consistent application of the proposed rule. For example, if a 
facility was damaged by a hurricane three times in a 10-year period, 
the facility would be considered a repetitively damaged facility. 
However, to trigger the cost share reduction under this rule, the 
applicant must have been required, and failed to take, ``appropriate 
mitigation measures,'' which are discussed below. ``Appropriate 
mitigation measures'' would address the type of damage that the 
facility sustained.
    The new cost share reduction provision of the Stafford Act does not 
contain a damage threshold amount below which this provision does not 
apply. However, in situations where eligible facilities sustain less 
than $1,000 in damages during a major disaster, the damage is not 
eligible for FEMA assistance. See 44 CFR 206.202(d)(2). Therefore, FEMA 
would not consider the event that resulted in damage in an amount less 
than $1,000 as an ``event'' for the purposes of implementation of the 
new statutory provision. Similarly, under the proposed rule if an 
eligible applicant elects to pay 100 percent of the costs to repair a 
particular facility and those costs would otherwise have been eligible 
for FEMA assistance, FEMA would not count the disaster as an ``event'' 
with regard to that particular facility.

E. Determining Amount of Cost Share Reduction

    This proposed rule also describes how FEMA proposes to calculate 
the cost share reduction. FEMA must define how it will ``reduce the 
Federal share of assistance under this section to not less than 25 
percent'' of eligible costs for facilities that have been damaged 
repetitively and whose owners have not implemented appropriate hazard 
mitigation measures. Rather than imposing a cost share reduction on a 
gradual basis, the proposed rule imposes a cost share reduction to 25 
percent of eligible costs immediately upon the occurrence of the third 
event.
    FEMA drafted the proposed rule to effect a direct reduction in cost 
share from no less than 75 percent to 25 percent; i.e., FEMA would not 
make any variable cost share between 75 and 25 percent. FEMA reasoned 
that this is consistent with the Congressional desire that this type of 
concern be addressed aggressively and independent of FEMA's other 
hazard mitigation authorities. FEMA concluded that a ``sliding'' scale 
would subject FEMA to routine cost share negotiations and appeals 
whenever a facility met the repetitive loss criteria, and that the 
development of lengthy criteria to detail exactly how and when the 
sliding reduction would occur, as well as a resulting complex rule that 
would be difficult to implement consistently, would place undue 
administrative burdens on disaster assistance applicants and on FEMA. 
FEMA also considered a stepped cost share reduction, e.g., 75 percent 
[rtarr13]50 percent [rtarr13]25 percent, but concluded that this option 
would not result in mitigation against future losses as quickly as 
going directly to a 25 percent reduction immediately upon the third 
event. FEMA notes that Congress set 25 percent as the most stringent 
reduction and thus FEMA concludes that going directly to that 
percentage reduction is the most effective means to meet the objective 
of the statute, absent use of a sliding scale or stepped cost share 
reduction. Therefore, this proposed rule implements the 25 percent 
reduction immediately upon the third event.

F. Definition of Appropriate Mitigation Measures

    In drafting this proposed rule, FEMA also considered the definition 
of the statutory language ``appropriate mitigation measures'' for the 
purpose of implementing the amendment to section 406 of the Stafford 
Act, (42 U.S.C. 5172(b)(2)). Sections 203, 322, 404, and 406 of the 
Stafford Act and their implementing regulations such as 44 CFR 201.2, 
206.2, 206.111, 206.117, and 206.431 currently reference ``hazard 
mitigation measures,'' ``eligible hazard mitigation measures,'' 
``hazard mitigation measures that are cost effective,'' and ``hazard 
mitigation criteria required by the President.'' However, the new 
provision of the Stafford Act, 42 U.S.C. 5172(b)(2), contains the first 
reference within the Stafford Act to ``appropriate mitigation 
measures'' and there is no legislative history that clarifies the 
meaning of this new statutory language.
    In the proposed rule FEMA has defined ``appropriate mitigation 
measures'' using the same definition as ``hazard mitigation'' which is 
defined in 44 CFR 206.2(a)(14). Section 206.2(a)(14) defines ``hazard 
mitigation'' as: ``Any cost effective measure which will reduce the 
potential for damage to a facility from a disaster event.'' FEMA's 
policy to determine cost-effectiveness under the Public Assistance 
program includes mitigation measures that amount up to 15 percent of 
the total eligible cost of the eligible repair work on a particular 
project, certain mitigation measures that FEMA has pre-determined cost-
effective, and an acceptable benefit/cost analysis methodology. See 
FEMA Public Assistance Guide FEMA 322 (June 2007), Disaster Assistance 
Policy 9526.1, ``Hazard Mitigation Funding Under Section 406 (Stafford 
Act)'' (available at: http://www.fema.gov/government/grant/pa/9526_1.shtm). The eligibility of hazard mitigation for Public Assistance 
applicants is further addressed in 44 CFR 206.226. In approving grant 
assistance for restoration of facilities, FEMA may require cost 
effective hazard mitigation measures not required by applicable 
standards pursuant to 44 CFR 206.226(e). Defining ``appropriate 
mitigation measures'' with the same criteria as ``hazard mitigation'' 
ensures a more consistent evaluation for determining required 
mitigation.
    The applicant would have to perform the appropriate mitigation 
measure on the damaged component of the facility. The appropriate 
mitigation should be for the type of damage sustained (wind,

[[Page 40127]]

water, etc.). For example, if a roof was damaged by wind, FEMA may 
require mitigation against wind damage to the roof rather than 
requiring mitigation against fire or water damage to the roof.
    FEMA examined several options for determining appropriate 
mitigation measures for a facility. FEMA considered linking an 
``appropriate mitigation measure'' to compliance with current, local 
building codes applicable to certain hazards, such as earthquakes. 
However, such a definition would not be adequate for all hazards, such 
as floods, affecting all disaster-prone communities in the United 
States.
    FEMA also considered defining ``appropriate mitigation measures'' 
in terms of probabilities, e.g., measures designed to reduce the 
likelihood of damage from the flood event with a 1-percent annual 
chance of occurrence. However, one general probabilistic-based design 
may not work for all hazard scenarios. FEMA deemed this approach 
problematic for a number of reasons. First, these probabilistic design 
standards may have conflicted with local codes and design standards. 
Second, in some cases these probabilistic-based designs may have 
exacerbated the hazard that they were intended to mitigate. For 
example, culverts for storm drainage which handle intermittent flows 
are, in most cases, designed to handle significantly less than the 1-
percent annual chance of a storm event; sizing them to handle the 1-
percent flood flow would tend to increase downstream flood flows and 
increase costs and environmental impacts. Third, a probabilistic-based 
design standard for ``appropriate mitigation measures'' could result in 
inconsistencies with the State, Local and Indian Tribal Mitigation 
Plans required by section 322 of the Stafford Act, as well as 
inconsistencies in application because such a probabilistic design 
would require FEMA to approve the mitigation measures on a case-by-case 
basis.
    Under section 322 of the Stafford Act and 44 CFR 201.4 and 201.7, a 
State or Indian Tribal government acting as a Grantee must have, at a 
minimum, a FEMA approved Standard State or Tribal Mitigation Plan in 
effect to receive certain types of non-emergency assistance under the 
Stafford Act. Under section 322 of the Stafford Act and 44 CFR 201.4, a 
local or Indian Tribal government must have an approved local or Indian 
Tribal plan in effect to receive assistance under the Hazard Mitigation 
Grant Program (HMGP). Since FEMA believes that it is important for its 
hazard mitigation programs to complement one another, FEMA proposes to 
require that any appropriate mitigation measure for an eligible 
facility be consistent with the State Mitigation Plan or Tribal 
Mitigation Plan, if the Indian Tribal government is the Grantee, as 
described at 44 CFR 201.4 through 44 CFR 201.6.
    State Mitigation Plans provide general mitigation planning 
guidelines for mitigation measures throughout the State, while Local 
and/or Indian Tribal Mitigation Plans provide more specific criterion 
for appropriate mitigation measures for a facility. FEMA was concerned 
that, in the absence of a Local and/or Indian Tribal Mitigation Plan 
for a designated area, the State Mitigation Plan would not provide 
sufficient guidance regarding appropriate mitigation measures for a 
facility. FEMA considered requiring revision to, or creation of, a 
Local and/or Indian Tribal Mitigation Plan should a specific 
appropriate mitigation measure not be specified for a facility; 
however, the time required to do so could cause unacceptable delays in 
providing appropriate mitigation to the facility. Further, State 
Mitigation Plans as described under 44 CFR 201.4 already require the 
State to coordinate mitigation measures with Local or Tribal Mitigation 
Plans, where they exist.

G. Identifying Repetitively Damaged Facilities

    To implement the proposed requirements in this rulemaking, FEMA 
needs to collect repetitive loss information. FEMA would track the 
history of the provision of disaster assistance following 
Presidentially-declared major disasters by applicant and facility 
through the use of its National Emergency Management Information System 
(NEMIS)/Emergency Management Mission Integrated Environment (EMMIE) 
computer program and database in which all PW's are stored. FEMA would 
use the latitude and longitude documented on the PW and entered into 
NEMIS/EMMIE for the damaged facility to track repetitively damaged 
facilities. Tracking and recording this information in NEMIS/EMMIE 
would assist FEMA in correctly and consistently interpreting the 
requirements in this proposed rule, and if the Federal cost share is 
reduced it would serve as essential documentation for resolving appeals 
that may follow.

III. Regulatory Analysis

A. National Environmental Policy Act (NEPA)

    The National Environmental Policy Act of 1969 (NEPA), Public Law 
91-190, 83 Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321 et seq.), as 
amended, requires that agencies consider environmental impacts in their 
decision-making. Specifically, NEPA requires agencies to 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 the action will have a significant 
effect, the agency uses the EA to develop an EIS.
    Pursuant to 44 CFR 10.8(c)(2), action taken or assistance provided 
under sections 402, 403, 407, or 502 of the Stafford Act and action 
taken or assistance provided under section 406 of the Stafford Act that 
has the effect of restoring facilities substantially as they existed 
before a major disaster or emergency are statutorily excluded from NEPA 
and the preparation of environmental impact statements and 
environmental assessments by section 316 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (Stafford Act), as 
amended, 42 U.S.C. 5159. Also, 44 CFR 10.8(d)(2)(xix) excludes hazard 
mitigation activities under the Stafford Act, and 44 CFR 10.8(d)(2)(ii) 
excludes the preparation, revision and adoption of regulations from the 
preparation of an EA or EIS where the rule relates to actions that 
qualify for categorical exclusions, FEMA has determined that this 
proposed rule is categorically excluded from the preparation of an EA 
or an EIS. Further, the changes proposed by this rule are 
administrative changes to the Public Assistance program that would have 
no effect on the environment. See 44 CFR 10.8(d)(1).

B. Paperwork Reduction Act of 1995

    As required by the Paperwork Reduction Act of 1995 (PRA) Public Law 
104-33 (44 U.S.C. 3501 et seq.), as amended, an agency may not conduct 
or sponsor, and a person is not required to respond to, a collection of 
information unless the collection of information displays a valid 
control number. This rulemaking involves the reduction in Federal 
assistance for public or private nonprofit facilities repetitively 
damaged by the same type of disaster when the

[[Page 40128]]

owner has failed to take appropriate mitigation measures. To identify 
repetitively damaged facilities, FEMA must be able to track damaged 
facilities.
    In order to accurately record damaged facilities and, therefore, 
track repetitively damaged facilities, FEMA would use the latitude and 
longitude for the damaged facility. FEMA already collects the latitude 
and longitude of facilities on the PW and enters the latitude and 
longitude into NEMIS/EMMIE. The PW instructions currently require the 
latitude and longitude for all damaged facilities. The PW instructions 
fall under OMB Collection No. 1660-0017 ``Project Worksheets and 
Continuation Forms'' which expires December 31, 2011. There would be no 
additional burden to the approved collection as a result of the changes 
proposed in this rule.

C. Executive Order 12866, Regulatory Planning and Review

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 12866, Regulatory Planning and Review. Under Executive 
Order 12866, a significant regulatory action is subject to Office of 
Management and Budget (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 proposed rule does not meet the criteria under paragraph 2, 3, 
or 4 of the provision of the Executive Order. In addition, FEMA 
determined that it is not likely to have a significant economic impact 
of $100 million or more per year (under paragraph 1 of this provision). 
This proposed rule has not been reviewed by OMB.
    As authorized by DMA 2000, this proposed rule would reduce the 
Federal cost share to 25 percent for eligible Public Assistance cost to 
repair, restore, reconstruct or replace an eligible public facility or 
private nonprofit facility that has been damaged twice within the 
preceding 10 years by the same type of event and the owner of the 
facility has not implemented appropriate mitigation measures before the 
third event of the same type. The proposed rule would not affect the 
Public Assistance eligibility requirements. Further, the proposed rule 
would only affect public facilities and eligible private nonprofit 
facilities. It would not affect grants made under the Individual 
Assistance program.
    The statutory mandate imposed upon FEMA required the agency to 
reduce the Federal share to ``not less than 25 percent'' of eligible 
costs, and did not specifically mandate that FEMA establish the 25 
percent rate chosen in this rule. Rather than imposing a cost share 
reduction on a gradual basis, the proposed rule imposes a cost share 
reduction to 25 percent of eligible costs immediately upon the 
occurrence of the third event. Developing objective criteria for an 
incremental cost share reduction from 75 percent to 25 percent (perhaps 
with a median reduction at 50 percent) would likely result in a complex 
rule that FEMA could not implement consistently without placing 
additional administrative burdens on disaster assistance applicants, as 
well as an undue burden on FEMA to develop and administer such a rule. 
Therefore, this proposed rule would implement the full 25 percent 
reduction immediately upon the third event.
    FEMA cannot predict with certainty the future number of major 
disasters that will affect the nation in a given year or the number of 
facilities that will be repetitively damaged from those disasters. 
However, between January 1, 1998, and January 1, 2008, there was an 
average of 54 major disaster declarations made per year. Out of the 
approximately 88,060 Public Assistance applicants in the past 10 years, 
FEMA identified 1,756 of those applicants that suffered similar damage 
within the same damage category at least twice in that time period. 
These applicants would have, if this proposed rule had been in effect, 
undertaken mitigation efforts or risk a reduced cost share percentage 
should a disaster of the same type damage their facility a third time 
within 10 years of the first of those two disasters. This figure only 
amounts to 2 percent of all Public Assistance applicants. The total 
eligible cost for these 1,756 Public Assistance applicants was $1.32 
billion (in 2008 dollars) \2\ over the past 10 years, which amounts to 
approximately $132 million per year.
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    \2\ Data were adjusted for inflation based on Consumer Price 
Index (CPI) published by the Bureau of Labor Statistics (BLS).
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    Under section 406 of the Stafford Act, 42 U.S.C. 5172(b)(1), the 
Federal share could not be less than 75 percent of eligible costs. 
Under the terms of this proposed rule which would implement the new 
paragraph 42 U.S.C. 5172(b)(2), if applicants failed to implement 
appropriate mitigation measures for these repetitively damaged 
facilities, the percentage of the Federal share would be reduced to 25 
percent. Taking a conservative estimate and assuming that all 1,756 
applicants failed to implement appropriate mitigation measures, the 
cost implication would be as follows: 75 percent of the eligible costs 
of $132 million is $99 million and 25 percent of $132 million is $33 
million, so the potential reduction in Federal assistance would be 
approximately $66 million annually based on an analysis of the period 
January 1, 1998 through January 1, 2008.
    Under the proposed rule, to be eligible for the full Federal cost 
share an applicant must implement required hazard mitigation measures 
prior to the third event of the same type. The required hazard 
mitigation will vary from facility to facility. However, typical 
mitigation measures include, but are not limited to, the relocation out 
of hazardous locations, slope stabilization, protection from high winds 
(shutters, hurricane clips, anchors), flood proofing of buildings 
(elevation, use of flood-resistant materials), flood protection of 
bridges and culverts (use clear spans instead of multiple spans, 
riprap), protecting against seismic changes (bracing, anchoring), and 
the protection of utilities (anchoring, use of disaster-resistant 
materials, elevation). In general, appropriate mitigation measures 
should be cost-effective.
    The cost to mitigate these facilities may be eligible for the HMGP, 
so States, local and/or Tribal governments and some private nonprofit 
entities may be able to seek Federal funds to offset the cost of 
mitigation efforts. Although this proposed regulation would not affect 
the HMGP, additional information regarding the program may be found in 
FEMA's regulations in 44 CFR parts 78, 201, and 206 and at http://www.fema.gov/government/grant/hmgp/index.shtm.
    This proposed rule could potentially have an impact of 
approximately $66 million per year. As a benefit, this reduced Federal 
cost share would provide an incentive to mitigate repetitive damage. 
Mitigation focuses on breaking the cycle of disaster damage, 
reconstruction, and repeated damage. Mitigation efforts provide value 
to the

[[Page 40129]]

American people by creating safer communities and reducing loss of life 
and property, enabling communities to recover more rapidly from 
disasters, and lessening the financial impact of disasters on 
individuals, the Treasury, State, local and Tribal communities.

D. Executive Order 13132, Federalism

    Executive Order 13132, ``Federalism'' (64 FR 43255, Aug. 10, 1999), 
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, on the relationship between the national 
government and 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.
    FEMA has reviewed the proposed rule under Executive Order 13132 and 
has concluded that the proposed rule, which implements statutory 
requirements, does not have federalism implications as defined by 
Executive Order 13132. FEMA has determined that the rule does not 
significantly affect the rights, roles, and responsibilities of States, 
and involves no preemption of State law nor does it limit State 
policymaking discretion. This rulemaking amends a voluntary grant 
program that may be used by State, local and Tribal governments and 
eligible private nonprofit organizations to receive Federal grants to 
assist in the recovery from disasters. States are not required to seek 
grant funding, and this rulemaking does not limit their policymaking 
discretion. In addition, FEMA actively encourages and solicits comments 
on this proposed rule from interested parties.

E. Executive Order 12898, Environmental Justice

    Under Executive Order 12898, as amended ``Federal Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations'' (59 FR 7629, Feb. 16, 1994), FEMA has undertaken to 
incorporate environmental justice into its policies and programs. 
Executive Order 12898 requires each Federal agency to conduct its 
programs, policies, and activities that substantially affect human 
health or the environment, in a manner that ensures that those 
programs, policies, and activities do not have the effect of excluding 
persons from participation in, denying persons the benefit of, or 
subjecting persons to discrimination because of their race, color, or 
national origin or income level.
    The purpose of this rule is to reduce the Federal cost share for 
repetitively damaged facilities where the owner of the facility has not 
implemented appropriate mitigation measures. This reduced Federal cost 
share would provide an incentive to mitigate future damage. Mitigation 
focuses on breaking the cycle of repeated disaster damage. Mitigation 
efforts provide value to the American people by creating safer 
communities and reducing loss of life and property, enables communities 
to recover more rapidly from disasters, and lessens the financial 
impact of disasters on individuals, the United States Department of the 
Treasury, State, local and Tribal communities.
    No action that FEMA can anticipate under the proposed rule will 
have a disproportionately high and adverse human health or 
environmental effect on any segment of the population. In accordance 
with Congressional mandates, the proposed rule implements the Federal 
cost share reduction for repetitively damaged facilities. Accordingly, 
the requirements of Executive Order 12898 do not apply to this proposed 
rule.

F. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    FEMA has reviewed this proposed rule under Executive Order 13175 
``Consultation and Coordination with Indian Tribal Governments'' (65 FR 
67249, Nov. 9, 2000). Under Executive Order 13175, FEMA may not issue a 
regulation that has tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute. In reviewing the proposed rule, FEMA finds that 
because Indian Tribal governments are potentially eligible applicants 
under the Public Assistance program, the proposed rule does have 
``tribal implications'' as defined in the Executive Order. The 
implications of the proposed rule, however, will not have a substantial 
direct effect on one or more Indian Tribes, on the relationship between 
the Federal Government and Indian Tribes, or on the distribution of 
power and responsibilities between the Federal Government and Indian 
Tribes. The proposed rule does not impose substantial direct compliance 
costs on Indian Tribal governments nor does it preempt tribal law, 
impair treaty rights nor limit the self-governing powers of Indian 
Tribal governments.
    Furthermore, this regulatory change is required by statute. This 
proposed regulation would implement an amendment to 42 U.S.C. 5172(b), 
which mandates a reduction in the percentage of Federal funding 
provided after a public or private nonprofit facility has been damaged 
more than once within the preceding 10 years by the same type of event 
and the owner of the facility has not implemented appropriate 
mitigation measures before the third event of the same type.

G. Regulatory Flexibility Act Statement

    Under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) and 
section 213(a) of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (Pub. L. 104-121, 110 Stat. 847, 858-9 (March 29, 1996) (5 
U.S.C. 601 note)), agencies must consider the impact of their 
rulemakings on ``small entities'' (small businesses, small 
organizations and local governments). The RFA applies to any proposed 
rulemaking subject to notice and comment under section 553 of the 
Administrative Procedure Act (APA) (5 U.S.C. 553). The RFA requires 
Federal agencies to consider the potential impact of regulations on 
small businesses, small governmental jurisdictions, and small 
organizations during the development of their rules.
    FEMA used 2000 U.S. Census Bureau data to identify actual Public 
Assistance applicants that under the RFA could be considered small 
entities. FEMA identified 920 Public Assistance applicants with 
populations of 50,000 or less that suffered similar damage within the 
same damage category twice over the past 10 years. Therefore, these 920 
Public Assistance applicants could be considered small entities under 
the RFA and could potentially meet the definition of repetitively 
damaged facilities if their facility is damaged a third time within 
that 10-year period. Out of the 920 Public Assistance applicants that 
are considered small entities, 914 are small governmental jurisdictions 
and 6 are private nonprofit (PNP) organizations. These 920 small 
entities amount to approximately 52 percent of the total 1,756 
applicants that suffered similar damage at least twice over the past 10 
years.
    Assuming that all 920 Public Assistance applicants failed to 
implement required hazard mitigation and suffered damage a third time, 
so that they meet the definition of a repetitively damaged facility, 
this would only amount to one percent of all Public Assistance 
applicants. The total eligible cost was $429.32 million (in 2008

[[Page 40130]]

dollars) \3\ for these 920 applicants over the past 10 years. This 
equals an annual average of approximately $42.93 million.
---------------------------------------------------------------------------

    \3\ Data were adjusted for inflation based on the Consumer Price 
Index (CPI) published by the Bureau of Labor Statistics (BLS).
---------------------------------------------------------------------------

    Under the terms of this proposed rule, if applicants failed to 
implement required hazard mitigation for these repetitively damaged 
facilities, FEMA would reduce the percentage of the Federal cost share 
to 25 percent. Under section 406 of the Stafford Act, 42 U.S.C. 
5172(b)(1), the Federal share could not be less than 75 percent of 
eligible costs. Since 75 percent of $42.93 million is $32.20 million 
and 25 percent of $42.93 million is $10.73 million, the potential 
reduction would be $21.47 million in Federal assistance each year. As a 
result, the average impact to these 920 applicants is $23,337 per year 
(= 21,470,000/920).
    FEMA measured the annual impact of this rule on each of these 914 
small governmental jurisdictions \4\ based on the estimated reduction 
in Federal assistance and annual revenues. Annual revenues for these 
914 small governmental jurisdictions were estimated from the per capita 
revenue for local governments by State.\5\ For example, the total 
revenue for all local governments in Alabama in 2005-06 was $18.41 
billion (in 2008 dollars) and the population is 4.66 million, resulting 
in the per capita revenue of $3,951. Therefore, annual revenue for a 
small governmental jurisdiction in Alabama with a population size of 
500 is estimated approximately at $1.98 million (= $3,951 x 500). FEMA 
compared the estimated reduction in Federal assistance with the 
estimated annual revenue for each of these 914 small governmental 
jurisdictions. Out of these 914 small governmental jurisdictions, only 
19 (or 2 percent) are expected to have an impact higher than 1 percent 
of their annual revenues. Consequently, FEMA certifies that there is no 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \4\ The 6 PNP organizations were not included as their annual 
revenues cannot be estimated.
    \5\ U.S. Census Bureau (2009), State and Local Government 
Finance, http://ftp2.census.gov/govs/estimate/06slsstab1a.xls.
---------------------------------------------------------------------------

H. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, 
109 Stat. 48 (March 22, 1995) (2 U.S.C. 1501 et seq.), requires each 
Federal agency, to the extent permitted by law, to prepare a written 
assessment of the effects of any Federal mandate in a proposed or final 
agency rule that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. UMRA 
exempts from its definition of ``Federal intergovernmental mandate'' 
regulations that establish conditions of Federal assistance or provide 
for emergency assistance or relief at the request of any State, local, 
or Tribal government. Therefore, this proposed rule is not an unfunded 
Federal mandate under that Act.

I. Executive Order 12988, Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, ``Civil Justice Reform'' (61 FR 4729, Feb. 7, 
1996), to minimize litigation, eliminate ambiguity, and reduce burden.

J. Executive Order 12630, Governmental Actions and Interference With 
Constitutionally Protected Property Rights

    FEMA has reviewed this rule under Executive Order 12630, 
``Governmental Actions and Interference with Constitutionally Protected 
Property Rights'' (53 FR 8859, Mar. 18, 1988) as supplemented by 
Executive Order 13406, ``Protecting the Property Rights of the American 
People'' (71 FR 36973, June 28, 2006). This rule will not affect a 
taking of private property or otherwise have taking implications under 
Executive Order 12630.

K. Congressional Review of Agency Rulemaking

    FEMA will send this rule to Congress and to the Government 
Accountability Office under the Congressional Review of Agency 
Rulemaking Act (Congressional Review Act), Public Law 104-121, 110 
Stat. 873 (March 29, 1996) (5 U.S.C. 804) before it is effective. This 
proposed rule is not a ``major rule'' within the meaning of the 
Congressional Review Act. This rulemaking would not result in a major 
increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies, or geographic regions, 
nor would it have ``significant adverse effects'' on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises.

List of Subjects in 44 CFR Part 206

    Administrative practice and procedure, Coastal zone, Community 
facilities, Disaster assistance, Fire prevention, Grant programs--
housing and community development, Housing, Insurance, 
Intergovernmental relations, Loan programs--housing and community 
development, Natural resources, Penalties, Reporting and recordkeeping 
requirements.

    For the reasons stated in the preamble, the Federal Emergency 
Management Agency proposes to amend 44 CFR part 206 as follows:
    1. The authority citation of Part 206 is revised to read as 
follows:

    Authority:  42 U.S.C. 5121 through 5207; Reorganization Plan No. 
3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; 6 U.S.C. 101; EO 
12127, 44 FR 19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148, 44 FR 
43239, 3 CFR, 1979 Comp., p. 412; E.O. 13286, 68 FR 10619, 3 CFR, 
2003 Comp., p. 166.

    In Sec.  206.226, add a new paragraph (l) to read as follows:


Sec.  206.226  Restoration of damaged facilities.

* * * * *
    (l) Repetitively damaged facilities. A repetitively damaged 
facility is an eligible facility that has suffered damage from the same 
type of event for which Public Assistance has been approved twice 
within the past 10 years. If appropriate mitigation measures, required 
pursuant to paragraph (e) of this section, have not been made to the 
facility before a third event of the same type, the Federal share of 
eligible repair costs is 25 percent.
    (1) ``Appropriate mitigation measures'' has the same meaning as 
``hazard mitigation'' which is defined in Sec.  206.2(a)(14). The 
appropriate mitigation measures for the facility must be consistent 
with the mitigation strategy identified in the State Mitigation Plan 
described in Sec.  201.4 of this chapter, or the Tribal Mitigation 
Plan, if the Indian Tribal government is the Grantee as described in 
Sec.  201.7 of this chapter.
    (2) The 25 percent Federal cost share will not be applied to a 
facility that is damaged before the deadline to complete approved 
mitigation work in accordance with Sec.  206.204(c) and (d).
    (3) ``Same type of event'' means the same major disaster type, 
including but not limited to hurricane, tornado, flood, or earthquake.
    (4) Damage to an eligible facility will not be counted as a 
repetitive damage ``event'' for that particular facility if the 
eligible applicant elects to pay 100 percent of the costs to repair the 
facility, or the facility sustains less than $1,000 in damage from the 
disaster event.
    (5) Events will be counted toward repetitive status after [DATE 30 
DAYS AFTER DATE OF PUBLICATION OF

[[Page 40131]]

THE FINAL RULE IN THE FEDERAL REGISTER].

    Dated: August 4, 2009.
W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. E9-19156 Filed 8-10-09; 8:45 am]
BILLING CODE 9111-23-P


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