32666 Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations

FEDERAL EMERGENCY

MANAGEMENT AGENCY

44 CFR Part 209

RIN 3067–AD06

Supplemental Property Acquisition

and Elevation Assistance

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Final Rule.

SUMMARY: We, FEMA, announce the

availability of a Supplemental Property

Acquisition and Elevation Assistance

Program established for the acquisition

or elevation, for hazard mitigation

purposes, of properties that have been

made uninhabitable by floods in areas

that had a major disaster declaration in

federal fiscal years 1999 or 2000, and for

which Congress has authorized

supplemental hazard mitigation

assistance.

EFFECTIVE DATE: This final rule is

effective August 14, 2001.

FOR FURTHER INFORMATION CONTACT:

Robert F. Shea, Mitigation Directorate,

Federal Emergency Management

Agency, 500 C Street SW., Washington,

DC 20472, (202) 646–3619, (facsimile)

(202) 646–3104, or (email)

bob.shea@fema.gov.

SUPPLEMENTARY INFORMATION: This final

rule provides guidance on the

administration of a Supplemental

Property Acquisition and Elevation

Assistance program. Congress made

funds available under the Consolidated

Appropriations Act for FY 2000, Pub. L.

106–113, which provides up to $215

million for the acquisition of properties

affected by Hurricane Floyd or

surrounding events, and under Pub. L.

106–246, which provides $50 million

for the acquisition or elevation of

properties made uninhabitable by floods

in areas that have had a major disaster

declaration in federal fiscal years 1999

or 2000. This grant authority is for

projects to acquire floodprone

properties and demolish or relocate

structures, or to elevate floodprone

structures. Funds under this assistance

program are available only for those

properties that serve as the principal

residence for the owner, are located in

the 100-year floodplain, and were made

uninhabitable by the declared disaster.

The purpose of the supplemental

property acquisition and elevation

assistance is to provide State and local

governments with a mechanism for

reducing or eliminating future disaster

losses by clearing the floodplain and

helping occupants to move out of

harm’s way or by elevating structures

above expected flood levels. Individual

homeowners are not eligible to apply

directly for these funds and cannot

determine from this rule whether they

would be eligible to participate in the

grant program. State and local

government leadership is required to

determine priorities for funding and to

provide technical assistance and

oversight for project development and

implementation.

This rule incorporates Federal, State,

and local experiences acquired in

implementation of Pub. L. 106–113. We

invited comments on our interim final

rule published February 11, 2000, 65 FR

7270, but our Rules Docket Clerk did

not receive any. We have included in

this rule explanatory details that were

provided previously to State grantees in

correspondence and that reflect how the

program was implemented in practice.

We will allocate funds from this

program among the States that received

major disaster declarations during

federal fiscal years 1999 and 2000 based

on the number and value of properties

meeting the eligibility criteria whose

owners express interest in participating

in the assistance program. We will

request in writing that States provide

individual property applications for

funding to their FEMA Regional

Director following publication of this

rule. We will verify project eligibility of

the applications provided by States in

order to assure that all projects meet the

criteria for the supplemental assistance

program. None of the funds made

available for special property

acquisition and elevation assistance

under this authority will be used in any

calculation of a State’s funding

allocation under the Robert T. Stafford

Disaster Relief and Emergency

Assistance Act Hazard Mitigation Grant

Program, 42 U.S.C. 5170c.

This rule explains the program

eligibility criteria to ensure that States

target those properties that were

severely impacted by Federal disasters

and would likely flood again in the

future. It explains how we and the

States set priorities for projects to

ensure that we use funds in a costeffective manner. We intend to target

the funding to meet the needs of lower

income households in the areas that are

most affected by flood damage, by

acquiring structures that had a fair

market value of less than $300,000 just

before the declared disaster event. For

those properties affected by Hurricane

Floyd and acquired with funds provided

under Pub. L. 106–113, there is no limit

on the total value of the property; the

Federal contribution toward the

purchase of these properties, however,

may not exceed $225,000. In addition,

these properties should be contiguous to

other buyout parcels, part of an

acquisition in the same neighborhood or

part of a community acquisition plan.

This rule and the program

requirements are structured to parallel

our Hazard Mitigation Grant Program

(HMGP), which also has post-disaster

property acquisition, and elevation

authority. However, the funding made

available under this program has

significant restrictions that differ from

the HMGP, which States should note:

(a) Funds are to be used for

acquisition, or elevation projects only;

(b) To be eligible, projects may only

include properties that:

(1) Are located in the 100-year

floodplain;

(2) Are the principal residence of the

owner;

(3) Were made uninhabitable by

flooding as the result of a major disaster;

and

(4) Had a fair market value of less

than $300,000 on the day before the

declared disaster event if acquired

under Pub. L. 106–246;

(c) Subgrantees may pay participating

homeowners no more than the fair

market value of the property just before

the declared disaster event.

The HMGP does not have the

limitations described above. In addition,

where specific supplemental authorities

contain other restrictions, the rule

identifies those authorities.

We encourage States to implement

this program in conjunction with the

HMGP to the extent possible. States and

applicants should use HMGP guidance

materials for acquisition projects,

including the HMGP Interim Desk

Reference (FEMA–345) and the Property

Acquisition Handbook (FEMA–317) to

the extent that the guidance does not

conflict with these regulations or the

authorizing legislation. For example,

FEMA–345 and FEMA–317 provide

model deed restrictions and easements,

and detailed procedures for avoiding

duplication of benefits provided by

other programs or insurance. The model

deed language and the duplication of

benefits review process apply to this

special authority.

Communities interested in

participating should note that properties

purchased with this special funding

must remain as open space in perpetuity

and may receive no future disaster

assistance from any Federal source. For

example, public park facilities on

purchased open space land are not

eligible for our Public Assistance

program funding if future flood disasters

occur in the area.

States are responsible for measuring

both the expected benefits of funded

Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations 32667

projects and actual program

effectiveness after future flood events.

This process will help us and the States

to assess program results and improve

future mitigation program

implementation.

National Environmental Policy Act

(NEPA)

NEPA imposes requirements for

considering the environmental impacts

of agency decisions. It requires that an

Environmental Impact Statement (EIS)

be prepared for ‘‘major federal actions

significantly affecting the quality of the

human environment.’’ If an action may

or may not have a significant impact, an

environmental assessment (EA) must be

prepared. If, as a result of this study, a

Finding of No Significant Impact

(FONSI) is made, no further action is

necessary. If it will have a significant

effect, then the assessment is used 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.

Unless a major federal action is

categorically excluded, an agency must

prepare an EA or EIS.

The purpose of the supplemental

property acquisition and elevation

assistance is to provide State and local

governments with a means of reducing

or eliminating future disaster losses by

clearing the floodplain and helping

occupants to move out of harm’s way or

by elevating structures above expected

flood levels. Accordingly, 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 under 44 CFR

10.8(d)(2)(vii) and 44 CFR

10.8(d)(2)(xv). We will perform an

environmental review under 44 CFR

part 10, Environmental Considerations,

on each proposed acquisition, or

elevation project before funding and

implementation.

Executive Order 12866, Regulatory

Planning and Review

We have prepared and reviewed this

rule under the provisions of E.O. 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 rule sets out our administrative

procedures for making funds available

for acquiring, relocating or elevating

properties that have been made

uninhabitable by Hurricane Floyd and

by floods in areas that have had major

disaster declarations in federal fiscal

years 1999 or 2000, with up to

$265,000,000 available for this purpose.

(Pub. L. 106–113, November 11, 1999

appropriated $215,000,000 for post

Hurricane Floyd buyouts, and Pub. L.

106–246, July 13, 2000, appropriated

$50,000,000 for buyouts and elevations

in areas that had a major disaster

declaration in federal fiscal years 1999

or 2000). Most of the $265,000,000

appropriated funds will be obligated by

the end of federal fiscal year 2001. As

such the rule will have an effect on the

economy of more than $100,000,000.

The impact of the rule will promote

public health and safety by providing

low-income homeowners with the

financial means to move voluntarily out

of high-risk flood hazard areas or to

elevate homes above the 100-year flood

level. Therefore, this rule is a major rule

as defined in 5 U.S.C. 804(2) and is an

economically significant rule under

Executive Order 12866. The Office of

Management and Budget (OMB) has

reviewed this rule under Executive

Order 12866.

Executive Order 12898, Environmental

Justice

Under Executive Order 12898,

‘‘Federal Actions to Address

Environmental Justice in Minority

Populations and Low-Income

Populations,’’ 59 FR 7629, February 16,

1994, we have undertaken to

incorporate environmental justice into

our policies and programs. The

Executive Order 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 benefits of, or subjecting persons to

discrimination because of their race,

color, or national origin.

No action that we can anticipate

under the final rule will have a

disproportionately high and adverse

human health and environmental effect

on any segment of the population.

Properties that have a high risk of

flooding are frequently associated with

depressed property values and

inhabited by low-income residents. This

is the case in many communities that

this rule targets for acquisitions and

elevations. By offering such populations

pre-event fair market value for their

damaged residences to relocate

voluntarily outside the flood hazard

area, this rule helps give low-income

homeowners the means to move to safer

ground. In some cases, where a party

acquires very low-priced residences, the

buyout offer may not be enough to pay

for available housing outside the hazard

area because the law caps the offer at

pre-event fair market value. In such

cases we will coordinate with the State

to help identify alternative funding

sources for those buyouts or to cover the

relocation differential.

Paperwork Reduction Act

FEMA has submitted to the OMB a

request to continue using the collection

of information from States and local

governments that is contained in this

final rule for the implementation of

Supplemental Property Acquisition and

Elevation Assistance. The collection has

been submitted in accordance with the

requirements of the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507).

We published this collection

previously in the interim final rule and

at that time we asked OMB to give us

an emergency approval to use the

collection until the final rule is

published. We also requested public

comments on the practical utility of the

data being collected, the accuracy of the

burden estimate, ways in which we

could enhance the quality, utility and

clarity of the information being

collected, and ways in which we could

minimize the burden on respondents,

including the use of information

technology. We did not receive any

comments and have determined that we

should continue to collect the data.

Collection of Information

Title. Supplemental Property

Acquisition and Elevation Assistance.

Type of Information Collection.

Revision of a Currently Approved

Collection.

OMB Number: 3067–0279.

32668 Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations

Abstract. This collection is in

accordance with FEMA’s

responsibilities under 44 CFR 206.3 to

provide an orderly and continuing

means of assistance by the Federal

Government to State and local

governments. The assistance provides

help to alleviate the suffering and

damage that result from major disasters

and emergencies. Under Pub. L. 106–

113 we may provide assistance for the

acquisition of properties affected by

Hurricane Floyd or surrounding events

for hazard mitigation purposes. Under

Public Law 106–246, we may provide

assistance for the acquisition and

elevation of properties in areas that had

major disaster declarations in federal

fiscal years 1999 and 2000.

Forms: SF424, Application for Federal

Assistance; FEMA Form 20–15, Budget

Information—Construction Programs;

Project Narrative; FEMA Form 20–16,

20–16b and 20–16c, Assurances and

Certifications; Standard Form LLL,

Disclosure of Lobbying Activities;

FEMA Form 20–10 Financial Status

Report; and the Performance/Progress

Report format; Duplication of benefits

review—communities and individual

homeowners; Agreement-Settlement/

Deeds/Easement—communities and

individual homeowners; Individual

homeowners—Initial meetings/letters

and appraisal/inspection visit, review,

offer.

Affected Public: Individuals and

Households; State, local and tribal

governments. The forms, format and

agreements allow State and local

officials to apply for the Supplemental

Property Acquisition and Elevation

Assistance on behalf of their

communities and citizens.

Estimated Total Annual Burden Hours

Type of collection/forms No. of

respondents

Hours per

response

Annual burden

hours

SF–424 (Application face sheet) ............................................................................................... 263 .75 197

20–15 Budget—Construction ..................................................................................................... 263 17.2 4524

Project Narrative (section 209.8(b)) .......................................................................................... 263 15 3945

20–16 (Summary of assurances and certifications) .................................................................. 263 1.7 447

20–16b (Assurances, non-construction) .................................................................................... ........................ (1) ........................

20–16c (lobbying certification) ................................................................................................... ........................ (1) ........................

SF–LLL (lobbying disclosure) .................................................................................................... 263 .5 132

Form 20–10— Financial Status Report (213 × quarterly = 852) .............................................. 1052 8 8416

Performance/Progress Report (213 × quarterly=852) ............................................................... 1052 4.2 4418

Duplication of benefits review:

Communities ....................................................................................................................... 263 12.62 3319

Individual homeowners ....................................................................................................... 6625 1 6625

Agreement—Settlement/Deeds/Easement:

Communities ....................................................................................................................... 263 6.31 1660

Individual homeowners ....................................................................................................... 6625 1 6625

Individual Homeowners—Initial Meeting/Letters ....................................................................... 6625 2 13250

Individual Homeowners—Appraisal/Inspection Visit, Review, Offer ......................................... 6625 1 6625

Total burden ................................................................................................................ ........................ .......................... 60,182

1 Included in 20–16.

Estimated Cost. We have calculated

the estimated costs associated with the

collection of this information for the

application process and the quarterly

reporting process to be $1,012,460. This

calculation is based on the number of

burden hours for each type of

information collection/form, as

indicated above, and the estimated wage

rates for those individuals responsible

for collecting the information or

completing the forms. We used two

wage rates; both rates were determined

using data from the U.S. Department of

Labor, Bureau of Labor Statistics (BLS).

We assumed that urban and regional

planners are the most likely staff to have

responsibility for information collected

and forms completed at the State level.

Current BLS data indicate that the

median annual earnings of urban and

regional planners were $42,860 in 1998,

or an hourly rate of $20.61. States may

use existing systems for submitting

grant applications and reporting. We

further assumed that community

officials would have the same hourly

rate as the urban and regional planners.

In order to estimate the costs associated

with information collection by

individual homeowners, we used BLS

data reflecting the median weekly

earnings of full-time wage and salary

workers nationwide, without regard to

sex, age or race. Current BLS data

indicates that these median weekly

earnings were $549 in 1999, or a hourly

rate of $13.73.

Estimated

hourly rate

Annual burden

hours Estimated cost

State and community officials ...................................................................................................... $20.61 27,057 $557,654

Individuals .................................................................................................................................... 13.73 33,125 454,806

Total burden ......................................................................................................................... 16.82 60,182 1,012,460

Comments: Interested persons should

submit written comments to the Desk

Officer for the Federal Emergency

Management Agency, Office of

Management and Budget, Office of

Information and Regulatory Affairs,

725–17th Street, NW., Washington, DC

20503 within 30 days of this notice.

FOR FURTHER INFORMATION CONTACT: For

copies of this collection of information,

contact Muriel B. Anderson, Federal

Emergency Management Agency, 500 C

Street, SW., Washington, DC 20472,

(telephone) 202–646–2625, (facsimile)

202–646–3347, or (e-mail)

muriel.anderson@fema.gov.

Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations 32669

Executive Order 13132, Federalism

Executive Order 13132, Federalism,

dated August 4, 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, 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 rule under

E.O.13132 and have concluded that the

rule does not have federalism

implications as defined by the Executive

Order. We have 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. We have, nevertheless,

worked with affected States to develop

this rule.

In May 2000 we solicited responses

from Hurricane Floyd-affected States on

several important and complex policy

issues about acquisition of floodprone

residences. These issues arose during

the development of procedures and

regulations for the special buyout

authority following the catastrophic

flooding of Hurricane Floyd. We

incorporated in this rule responses that

we received from the States and also

plan to use them in our continuing

efforts to review and strengthen other

existing mitigation programs and

policies.

Congressional Review of Agency

Rulemaking

We have sent this final rule to the

Congress and to the General Accounting

Office under the Congressional Review

of Agency Rulemaking Act, Pub. L. 104–

121. The rule is a ‘‘major rule’’ within

the meaning of that Act. It is an

administrative action in support of

normal day-to-day grant activities

required by: (1) Pub. L. 106–113, which

prescribes how we must transfer the

$215,000,000 appropriation through

grants to certain States; and (2) Pub. L.

106–246, which prescribes how we

must transfer an additional $50,000,000

through grants to States that had a major

disaster declaration in federal fiscal

years 1999 or 2000.

The rule will not result in a major

increase in costs or prices for

consumers, individual industries,

Federal, State, or local government

agencies, or geographic regions. It will

not have ‘‘significant adverse effects’’ on

competition, employment, investment,

productivity, innovation, or on the

ability of United States-based

enterprises to compete with foreignbased enterprises. This final rule is

subject to the information collection

requirements of the Paperwork

Reduction Act and OMB has assigned

Control No. 3067–0279. The rule is not

an unfunded Federal mandate within

the meaning of the Unfunded Mandates

Reform Act of 1995, Pub. L. 104–4, and

any enforceable duties that we impose

are a condition of Federal assistance or

a duty arising from participation in a

voluntary Federal program.

List of Subjects in 44 CFR Part 209

Administrative practice and

procedure, Disaster assistance, Grant

Programs, Reporting and recordkeeping

requirements.

Accordingly, amend Chapter I,

Subchapter D, of Title 44, Code of

Federal Regulations, by revising Part

209 to read as follows:

PART 209—SUPPLEMENTAL

PROPERTY ACQUISITION AND

ELEVATION ASSISTANCE

Sec.

209.1 Purpose.

209.2 Definitions.

209.3 Roles and responsibilities.

209.4 Allocation and availability of funds.

209.5 Applicant eligibility.

209.6 Project eligibility.

209.7 Priorities for project selection.

209.8 Application and review process.

209.9 Appeals.

209.10 Project implementation

requirements.

209.11 Grant administration.

209.12 Oversight and results.

Authority: Pub. L. 106–113, Div. B, sec.

1000(a)(5) (enacting H.R. 3425 by crossreference), 113 Stat. 1501, 1536; Pub. L. 106–

246, 114 Stat. 511, 568; Robert T. Stafford

Disaster Relief and Emergency Assistance

Act, 42 U.S.C. 5121, 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.

§ 209.1 Purpose.

This part provides guidance on the

administration of a program to provide

supplemental property acquisition and

elevation assistance made available by

Congress to provide funds for the

acquisition or elevation, for hazard

mitigation purposes, of properties that

have been made uninhabitable by floods

in areas that were declared major

disasters in federal fiscal years 1999 and

2000.

§ 209.2 Definitions.

Except as noted in this part, the

definitions listed at §§ 206.2 and

206.431 apply to the implementation of

this part.

Allowable open space uses means

recreational and wetland management

uses including: Parks for outdoor

recreational activities; nature reserves;

cultivation; grazing; camping (except

where adequate warning time is not

available to allow evacuation);

temporary storage in the open of

wheeled vehicles which are easily

movable (except mobile homes);

unimproved, permeable parking lots;

and buffer zones. Allowable uses

generally do not include walled

buildings, flood reduction levees,

highways or other uses that obstruct the

natural and beneficial functions of the

floodplain.

Applicant means a State agency, local

government, or qualified private

nonprofit organization that submits an

application for acquisition or elevation

assistance to the State or to FEMA.

Cost-effective means that the

mitigation activity will not cost more

than the anticipated value of the

reduction in both direct damages and

subsequent negative impacts to the area

if future disasters were to occur. Both

costs and benefits will be computed on

a net present value basis. The State will

complete an analysis of the cost

effectiveness of the project, in

accordance with FEMA guidance and

using a FEMA-approved methodology.

FEMA will review the State’s analysis.

Pre-event fair market value means the

value a willing buyer would have paid

and a willing seller would have sold a

property for had the disaster not

occurred.

Principal residence means a residence

that is occupied by the legal owner; and

is the dwelling where the legal owner

normally lives during the major portion

of the calendar year.

Qualified alien means an alien who

meets one of the following criteria:

(1) An alien lawfully admitted for

permanent residence under the

Immigration and Nationality Act (INA);

(2) An alien granted asylum under

section 208 of the INA;

(3) A refugee admitted to the United

States under section 207 of the INA;

(4) An alien paroled into the United

States under section 212(d)(5) of the

INA for at least one year;

(5) An alien whose deportation is

being withheld under section 243(h) of

the INA as in effect prior to April 1,

1997, or section 241(b)(3) of the INA;

32670 Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations

(6) An alien granted conditional entry

pursuant to section 203(a)(7) of the INA

as in effect prior to April 1, 1980;

(7) An alien who is a Cuban and

Haitian entrant (as defined in section

501(e) of the Refugee Education

Assistance Act of 1980); or

(8) An alien who (or whose child or

parent) has been battered and meets the

requirements of 8 U.S.C. 1641(c).

Qualified private nonprofit

organization means an organization

with a conservation mission as qualified

under section 170(h) of the Internal

Revenue Code of 1954, as amended, and

the regulations applicable under that

section.

Repetitive Loss Structure means a

structure covered by a contract for flood

insurance under the National Flood

Insurance Program (NFIP) that has

incurred flood-related damage on two

occasions during a 10-year period, each

resulting in at least a $1000 claim

payment;

State Hazard Mitigation Plan means

the hazard mitigation plan that reflects

the State’s systematic evaluation of the

nature and extent of vulnerability to the

effects of natural hazards typically

present in the State and includes a

description of actions needed to

minimize future vulnerability to

hazards.

Subgrantee means the government or

other legal entity to which a subgrant is

awarded and which is accountable to

the grantee for the use of the funds

provided. Subgrantees can be a State

agency, local government, qualified

private nonprofit organizations, or

Indian tribes as outlined in 44 CFR

206.434;

Substantial Damage means damage of

any origin sustained by a structure

whereby the cost of restoring the

structure to its before-damage condition

would equal or exceed 50 percent of the

market value of the structure before the

damage occurred;

Uninhabitable means that properties

are certified by the appropriate State or

local official normally empowered to

make such certifications as meeting one

or more of the following criteria:

(1) Determined by an authorized local

government official to be substantially

damaged, according to National Flood

Insurance Program criteria contained in

44 CFR 59.1;

(2) Have been red- or yellow-tagged

and declared uninhabitable due to

environmental contamination by

floodwaters, or otherwise determined to

be uninhabitable by a State or local

official in accordance with current

codes or ordinances; or

(3) Have been demolished due to

damage or environmental contamination

by floodwaters.

We, our, or us means FEMA.

§ 209.3 Roles and responsibilities.

The following describes the general

roles of FEMA, the State, local

communities or other organizations that

receive grant assistance, and

participating homeowners.

(a) Federal. We will notify States

about the availability of funds, and will

allocate available funding to States that

received major disaster declarations

during the period covered by the

supplemental authority. Our Regional

Directors will verify project eligibility,

provide technical assistance to States

upon request, make grant awards, and

oversee program implementation.

(b) State. The State will be the

Grantee to which we award funds and

will be accountable for the use of those

funds. The State will determine

priorities for funding within the State.

This determination must be made in

conformance with the HMGP project

identification and selection criteria (44

CFR 206.435). The State also will

provide technical assistance and

oversight to applicants for project

development and to subgrantees for

project implementation. The State will

report program progress and results to

us. The States also will recover and

return to us any funds made available

from other sources for the same

purposes. When Native American tribes

apply directly to us, they will be the

grantee and carry out ‘‘state’’ roles.

(c) Applicant (pre-award) and

subgrantee (post-award). The applicant

(a State agency, local government, or

qualified private nonprofit organization)

will coordinate with interested

homeowners to complete an application

to the State. The subgrantee implements

all approved projects, generally takes

title to all property, and agrees to

dedicate and maintain the property in

perpetuity for uses compatible with

open-space, recreational, or wetlands

management practices. The subgrantee

will receive, review and make final

decisions about any appraisal disputes

that are brought by participating

homeowners. The subgrantee is

accountable to the State, as well as to

us, for the use of funds.

(d) Participating homeowners. The

participating homeowners will notify

the community of their interest to

participate; provide necessary

information to the community

coordinator about property ownership,

disaster damage, and other disaster

benefits received or available; review

the offer made from the community; and

accept it or request a review appraisal.

§ 209.4 Allocation and availability of funds.

(a) We will allocate available funds

based on the number and value of

properties that meet the eligibility

criteria and whose owners want to

participate in an acquisition or elevation

project.

(b) We may reallocate funds for which

we do not receive and approve adequate

applications. We will obligate most

available funds within 12 months

following the deadline for submitting

applications, unless extenuating

circumstances exist.

§ 209.5 Applicant eligibility.

The following are eligible to apply to

the State for a grant:

(a) State and local governments;

(b) Indian tribes or authorized tribal

organizations. A tribe may apply either

to the State or directly to us; and

(c) Qualified private nonprofit

organizations.

§ 209.6 Project eligibility.

(a) Eligible types of project activities.

This grant authority is for projects to

acquire floodprone properties and

demolish or relocate structures per

§ 209.10(i), or to elevate floodprone

structures. Approved projects must meet

the following criteria and comply with

all other program requirements

described in this rule;

(b) Eligibility criteria. To be eligible,

projects must:

(1) Be cost effective. The State will

complete an analysis of the costeffectiveness of the project, in

accordance with our guidance and using

a methodology that we approve. We will

review the State’s analysis;

(2) Include only properties that:

(i) For acquisition, the owner agrees to

sell voluntarily;

(ii) Are within the 100-year floodplain

based on best available data or as

identified by a FIRM or FEMA-approved

Disaster Recovery Map;

(iii) Were made uninhabitable (as

certified by an appropriate State or local

official) by the effects of a declared

major disaster during federal fiscal years

1999 or 2000;

(iv) For acquisition, had a pre-event

fair market value of less than $300,000

just before the disaster event. Properties

submitted for buyout under Pub. L. 106–

113 (the original Hurricane Floyd

supplemental buyout program) are

exempt from this policy, with the

limitation that in no case does the

Federal share or offer for any such

property exceed $225,000; and

(v) Served as the principal residence

for the owner. For multifamily units

Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations 32671

such as condominium buildings, all

units within the structure should be

principal residences of the owners and

not sublet.

(3) Conform with 44 CFR part 9,

Floodplain Management and Protection

of Wetlands; 44 CFR part 10,

Environmental Considerations; and any

applicable environmental and historic

preservation laws and regulations.

(c) For acquisition projects, an owner

who is not a United States citizen or

qualified alien may receive current fair

market value for his or her property. He

or she may not receive additional

amounts for pre-event fair market value.

(d) Funds available under Pub. L.

106–113 (the original Floyd

supplemental appropriation) are limited

to use for acquisition purposes only.

§ 209.7 Priorities for project selection.

(a) It is the State’s responsibility to

identify and select eligible buyout

projects for funding under the

supplemental grant program. All funded

projects must be consistent with the

State Hazard Mitigation Plan. The

mitigation planning process or any other

appropriate means may identify buyout

and elevation projects.

(d) States will set priorities in their

State mitigation plan to use as the basis

for selecting projects for funding. The

State’s priorities will address, at a

minimum, substantially damaged

properties, repetitive loss target

properties, and such other criteria that

the State deems necessary to comply

with the law. States and subgrantees are

to give priority consideration to projects

for acquisition or elevations of repetitive

loss properties, and must include all

eligible repetitive loss properties in the

projects submitted to us for funding.

(Approved under OMB control number

3067–0212).

§ 209.8 Application and review process.

(a) General. This section describes the

procedures to be used by the State in

submitting an application for funding

under the Supplemental Property

Acquisition and Elevation Assistance

program. Under this program, the State

is the grantee and is responsible for

processing subgrants to applicants in

accordance with 44 CFR part 13 and this

part.

(b) Timeframes. We will establish

deadlines for States to submit

applications, and States will set local

application deadlines. States may begin

forwarding applications to us

immediately upon Notice of Availability

of Funds and must forward all

applications not later than the date set

by the Regional Director. States must

provide to us the information described

below in paragraph (c) of this section for

each property proposed for acquisition

or elevation in support of the

supplemental allocation requested and

within the timeframe that we establish.

We will verify project eligibility

estimates provided by States in order to

assure that all projects meet the criteria

for the supplemental grant awards. We

will perform an independent

verification of this information for not

less than 50 percent of the properties

submitted.

(c) Format. The State will forward its

application to the Regional Director.

The Application will include: a

Standard Form (SF) 424, Application for

Federal Assistance; FEMA form 20–15,

Budget Information—Construction

Programs; Project Narrative (section

209.8(c)—community project

applications (buyout plans) selected by

the State); FEMA form 20–16, 20–16b

and 20–16c Assurances and

Certifications; Standard Form LLL,

Disclosure of Lobbying Activities;

FEMA form 20–10, Financial Status

Report; the Performance/Progress Report

format; and the State’s certification that

the State has reviewed all applications

and that they meet program eligibility

criteria. The Project Narrative

(community project applications) will

include:

(1) Community applicant information,

including contact names and numbers;

(2) Description of the problem

addressed by the proposed project;

(3) Description of the applicant’s

decision-making process, including

alternatives considered;

(4) Project description, including

property locations/addresses and scope

of activities;

(5) Project cost estimate and match

source;

(6) For acquisition projects, open

space use description and maintenance

assurance;

(7) Risk and cost-effectiveness

information, or State’s benefit-cost

analysis;

(8) Environmental and historic

preservation information including

(i) Whether the property is now or

ever has been used for commercial or

industrial purposes, and

(ii) Any information regarding historic

preservation that is readily available;

and

(9) Attachments for each property as

follows:

(i)A photograph of the structure from

the street;

(ii) Owner’s name;

(iii) Complete address, including zip

code;

(iv) Latitude and longitude;

(v) The date of construction;

(vi) Proximity to the 100-year

floodplain;

(vii) Panel and date of the applicable

Flood Insurance Rate Map, if any;

(viii) The elevation of the first

habitable floor and an estimate of the

depth of flooding in the structure;

(ix) The estimated pre-event fair

market value of the home. Applicants

will estimate the value of properties

using the best available information,

such as inspections, public records and

market values of similar properties in

similar neighborhoods to arrive at a preevent fair market value that reflects

what a willing buyer would have paid

a willing seller had the disaster not

occurred. If tax assessment data are used

as the basis, the applicant should add

the relevant adjustment percentage for

that jurisdiction to adjust the tax

assessment to the current fair market

value. These adjustment data should be

obtained from the jurisdiction’s tax

assessor’s office. For any jurisdictions

where the adjustment factor is over 25

percent, applicants should include a

justification for the high adjustment

factor. Applicants should not include

any other project costs in the property

values. These costs will be reflected

elsewhere;

(x) Indication whether flood

insurance was in force at the time of the

loss, and policy number, if available.

(xi) Indications that the property will

meet the definition of uninhabitable:

(A) Substantial damage

determination, and name and title of

determining official, or if not yet

determined then:

(1) For manufactured homes (mobile

homes), inundation of 1 foot or more of

water above the first habitable floor or

other evidence of substantial damage; or

(2) For permanent structures other

than manufactured homes, inundation

of 5 feet or more of water above the first

above-ground habitable floor or other

evidence of substantial damage.

Habitable floors do not include

basements.

(B) Were red- or yellow-tagged and

declared uninhabitable due to

environmental contamination by

floodwaters, or otherwise determined to

be uninhabitable by a State or local

official under current codes or

ordinances; or

(C) Were demolished due to damage

or environmental contamination by

floodwaters.

(xii) Information regarding whether

the structure is on the NFIP repetitive

loss list (provide NFIP Repetitive Loss

Property Locator Number, if available);

and

(xiii) Observations on whether

acquisition or elevation of the structure

32672 Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations

may result in a mixture of vacant lots

and lots with structures remaining on

them.

(9) FEMA review and approval. We

will review and verify the State’s

eligibility determination and either

approve, deny, or request additional

information within 60 days. The

Regional Director may extend this

timeframe if complicated issues arise.

We have final approval authority for

funding of all projects.

(Approved under OMB control number

3067–0279).

§ 209.9 Appeals.

The State may appeal any decision

that we make regarding projects

submitted for funding in the

Supplemental Property Acquisition and

Elevation Assistance program. The State

must submit the appeal in writing to the

Regional Director and must include

documentation that justifies the request

for reconsideration. The appeal must

specify the monetary figure in dispute

and the provisions in Federal law,

regulation, or policy with which the

appellant believes the initial action was

inconsistent. The applicant must appeal

within 60 days of the applicant’s receipt

of our funding decision. The State must

forward any appeal from an applicant or

subgrantee with a written

recommendation to the Regional

Director within 60 days of receipt.

Within 90 days following the receipt of

an appeal, the Regional Director will

notify the State in writing as to the new

decision or the need for more

information.

§ 209.10 Project implementation

requirements.

Subgrantees must enter into an

agreement with the State, with the

written concurrence of the Regional

Director, that provides the following

assurances:

(a) The subgrantee will administer the

grant and implement the project in

accordance with program requirements,

44 CFR parts 13 and 14, the grant

agreement, and with applicable Federal,

State, and local laws and regulations.

(b) The State and subgrantee will

administer the grant in an equitable and

impartial manner, without

discrimination on the grounds or race,

color, religion nationality, sex, age, or

economic status in compliance with

section 308 of the Stafford Act (42

U.S.C. 5151) and Title VI of the Civil

Rights Act. In implementing the grant,

the State and the subgrantee will ensure

that no discrimination is practiced.

(c) The State and subgrantee will

ensure that projects involving

alterations to existing structures comply

with all applicable State and local

codes.

(d) The State and subgrantee will

ensure that projects comply with

applicable State and local floodplain

management requirements. Structures

will be elevated to the Base Flood

Elevation.

(e) Property owners participating in

acquisition projects may receive

assistance up to the pre-event fair

market value of their real property,

except as limited by the eligibility

criteria.

(f) The subgrantee will establish a

process, which we must approve,

whereby property owners participating

in acquisition projects may request a

review of the appraisal for their

property, or request a second appraisal.

(g) The State will reduce buyout

assistance by any duplication of benefits

from other sources. Such benefits

include, but are not limited to,

payments made to the homeowner for

repair assistance; insurance settlements;

legal settlements; Small Business

Administration loans; and any other

payments made by any source to

address the property loss unless the

property owner can provide receipts

showing that the benefits were used for

their intended purpose to make repairs

to the property.

(h) Increased Cost of Compliance

coverage benefits under the National

Flood Insurance Program (NFIP) may be

used to match elevation or acquisition

and relocation projects. Increased Cost

of Compliance claims can only be used

for NFIP-approved costs; these can then

be applied to the project grant match.

This coverage does not pay for property

acquisition, but can pay demolition or

structure relocation.

(i) The following restrictive covenants

must be conveyed in the deed to any

property acquired, accepted, or from

which structures are removed (‘‘the

property’’):

(1) The property must be dedicated

and maintained in perpetuity for uses

compatible with open space,

recreational, or wetlands management

practices; and

(2) No new structure(s) will be built

on the property except as indicated in

this paragraph:

(A) A public facility that is open on

all sides and functionally related to a

designated open space or recreational

use;

(B) A public rest room; or

(C) A structure that is compatible with

open space, recreational, or wetlands

management usage and proper

floodplain management policies and

practices, which the Director approves

in writing before the construction of the

structure begins.

(D) In general, allowable open space,

recreational, and wetland management

uses include parks for outdoor

recreational activities, nature reserves,

cultivation, grazing, camping (except

where adequate warning time is not

available to allow evacuation),

temporary storage in the open of

wheeled vehicles that are easily

movable (except mobile homes),

unimproved, permeable parking lots

and buffer zones. Allowable uses

generally do not include walled

buildings, flood reduction levees,

highways or other uses that obstruct the

natural and beneficial functions of the

floodplain.

(3) After completing the acquisition

project, no application for future

disaster assistance will be made for any

purpose with respect to the property to

any Federal entity or source, and no

Federal entity or source will provide

such assistance, even for the allowable

uses of the property described above.

(4) Any structures built on the

property according to paragraph (i)(2) of

this section, must be: Located to

minimize the potential for flood

damage; floodproofed; or elevated to the

Base Flood Elevation plus one foot of

freeboard.

(5) The subgrantee or other public

property owner will seek the approval

of the State grantee agency and our

Regional Director before conveying any

interest in the property to any other

party. The subgrantee or other public

entity or qualified private nonprofit

organization must retain all

development rights to the property. Our

Regional Director will only approve the

transfer of properties that meet the

criteria identified in this paragraph.

(6) In order to carry out tasks

associated with monitoring, we, the

subgrantee, or the State have the right to

enter the parcel, with notice to the

parcel owner, to ensure compliance

with land use restrictions. Subgrantees

may identify the open space nature of

the property on local tax maps to assist

with monitoring. Whether the

subgrantee obtains full title or a

conservation easement on the parcel,

the State must work with subgrantees to

ensure that the parcel owner maintains

the property in accordance with land

use restrictions. Specifically, the State

may:

(i) Monitor and inspect the parcel

every two years and certify that the

owner continues to use the inspected

parcel for open space or agricultural

purposes; and

Federal Register / Vol. 66, No. 116 / Friday, June 15, 2001 / Rules and Regulations 32673

(ii) Take measures to bring a noncompliant parcel back into compliance

within 60 days of notice.

(7) Only as a last resort, we reserve

the right to require the subgrantee to

bring the property back into compliance

and transfer the title and easement to a

qualified third party for future

maintenance.

(8) Every 2 years on October 1st, the

subgrantee will report to the State,

certifying that the property continues to

be maintained consistent with the

provisions of the agreement. The State

will report the certification to us.

§ 209.11 Grant administration.

(a) Cost share. We may contribute up

to 75 percent of the total eligible costs.

The State must ensure that non-Federal

sources contribute not less than 25

percent of the total eligible costs for the

grant. The State or any subgrantee

cannot use funds that we provide under

this Act as the non-Federal match for

other Federal funds nor can the State or

any subgrantee use other Federal funds

as the required non-Federal match for

these funds, except as provided by

statute.

(b) Allowable costs. A State may find

guidance on allowable costs for States

and subgrantees in Office of

Management and Budget (OMB)

Circulars A–87 and A–122 on Cost

Principles. States may use up to 7

percent of the grant funds for

management costs of the grant. The

State should include management costs

in its application. Subgrantees must

include reasonable costs to administer

the grant as a direct project cost in their

budget.

(c) Progress reports. The State must

provide a quarterly progress report to us

under 44 CFR 13.40, indicating the

status and completion date for each

project funded. The report will include

any problems or circumstances affecting

completion dates, scope of work, or

project costs that may result in

noncompliance with the approved grant

conditions.

(d) Financial reports. The State must

provide a quarterly financial report to us

under 44 CFR 13.41.

(e) SMARTLINK Drawdowns. The

State will make SMARTLINK

drawdowns to reimburse or advance

allowable costs to subgrantees for

approved projects.

(f) Audit requirements. Uniform audit

requirements as set forth in 44 CFR part

14 apply to all grant assistance provided

under this subpart. We may elect to

conduct a Federal audit on the disaster

assistance grant or on any of the

subgrants.

(g) If a mitigation measure is not

completed, and there is not adequate

justification for non-completion, no

Federal funding will be provided for

that project.

§ 209.12 Oversight and results.

(a) FEMA oversight. Our Regional

Directors are responsible for overseeing

this grant authority and for ensuring

that States and subgrantees meet all

program requirements. Regional

Directors will review program progress

quarterly.

(b) Monitoring and enforcement. We,

subgrantees, and States will monitor the

properties purchased under this

authority and ensure that the properties

are maintained in open space use. We

and the State may enforce the agreement

by taking any measures that we or they

deem appropriate.

(c) Program results. The State will

review the effectiveness of approved

projects after each future flood event in

the affected area to monitor whether

projects are resulting in expected

savings. The State will report to us on

program effectiveness after project

completion and after each subsequent

flood event.

Dated: June 8, 2001.

Joe M. Allbaugh,

Director.

[FR Doc. 01–15053 Filed 6–14–01; 8:45 am]

BILLING CODE 6718–04–P