Document ID: FEMA-2010-0035-0001
Agency: fema
Document Type: Proposed Rule
Title: Housing Assistance due to Structural Damage
Posted Date: 2012-07-30T04:00Z

[Federal Register Volume 77, Number 146 (Monday, July 30, 2012)]
[Proposed Rules]
[Pages 44562-44571]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18568]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

[Docket ID FEMA-2010-0035]
RIN 1660-AA68

Housing Assistance Due to Structural Damage

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Under the authority of section 408 of the Robert T. Stafford 
Disaster

[[Page 44563]]

Relief and Emergency Assistance Act (Stafford Act), the Federal 
Emergency Management Agency (FEMA) provides grants to individuals and 
households to repair or replace their homes after a Presidentially-
declared major disaster or emergency. FEMA proposes to revise its 
repair, replacement, and housing construction assistance regulations to 
clarify the eligibility criteria for assistance and implement changes 
to section 408 of the Stafford Act that were made by the Post-Katrina 
Emergency Management Reform Act of 2006 (PKEMRA).

DATES: Comments must be received on or before September 28, 2012.

ADDRESSES: You may submit comments, identified by docket ID FEMA-2010-
0035, by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail/Hand Delivery/Courier: Regulatory Affairs Division, Office of 
Chief Counsel, 500 C Street SW., Room 840, 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 e-Rulemaking 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 via the Privacy Notice link on the homepage of 
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, click on ``Advanced Search,'' then enter ``FEMA-
2010-0035'' in the ``By Docket ID'' box, then select ``FEMA'' under 
``By Agency,'' and then click ``Search.'' Submitted comments may also 
be inspected at the Office of Chief Counsel, Federal Emergency 
Management Agency, 500 C Street SW., Room 835, Washington, DC 20472-
3100.

FOR FURTHER INFORMATION CONTACT: Lumumba T. Yancey, FEMA, Individual 
Assistance Division, 500 C Street SW., Washington, DC 20472-3100, 
(phone) 202-212-1000, (facsimile) (202) 212-1005, or (email) FEMA-IA-Regulations@fema.dhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 408 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (Stafford Act) provides the Federal Emergency Management 
Agency (FEMA) with the authority to administer the Individuals and 
Households grant program (IHP). See 42 U.S.C. 5174. Through the IHP, 
FEMA provides grants and/or direct assistance to help survivors recover 
from Presidentially-declared emergencies and major disasters. This help 
may be in the form of housing assistance as well as assistance to meet 
``other needs'' such as medical, dental, funeral, fuel, or clothing 
costs.
    Specifically, FEMA provides the following types of housing 
assistance:
    Temporary Housing: Money is available to rent a different place to 
live for a limited period of time. When rental properties are not 
available, FEMA may provide direct assistance in the form of a 
temporary housing unit.
    Housing Repair: Money is available to homeowners to repair disaster 
damage to their primary residence. Assistance is only available to 
repair damage that is not covered by insurance. The goal is to make the 
damaged home safe, sanitary, and functional.
    Housing Replacement: Money is available to homeowners to replace 
their home if it was destroyed in the disaster. Assistance is only 
available for damage that is not covered by insurance.
    Permanent and Semi-Permanent Housing Construction: In exceptional 
circumstances, FEMA is authorized to provide permanent and semi-
permanent housing construction. If FEMA exercises its discretion to 
offer this form of disaster assistance, FEMA may provide money for the 
construction of a home, or may construct the new permanent or semi-
permanent housing unit for an individual or household. This type of 
assistance is currently provided only in remote and insular areas or 
locations specified by FEMA where no other type of housing assistance 
is available, feasible, or cost-effective. Assistance is provided only 
for damage that is not covered by insurance.
The regulations establishing the types of IHP assistance available, the 
eligibility requirements for assistance, and the procedures for 
obtaining assistance are in 44 CFR part 206, subparts D and F.
    On September 30, 2002, FEMA published an interim rule in the 
Federal Register, identified by Regulation Identifier Number (RIN) 
1660-AA18, which revised its regulations implementing the IHP. See 67 
FR 61446. FEMA published a correction to the interim rule on October 9, 
2002. See 67 FR 62896. Among other things, the interim rule established 
the housing repair, replacement, and construction eligibility 
regulations in 44 CFR 206.117. These regulations are currently in 
effect.
    This proposed rule addresses the public comments received on the 
interim rule related to housing repair and replacement, and proposes 
revisions that are intended to clarify and improve FEMA's eligibility 
requirements for housing repair assistance. These proposed changes are 
intended to restate the existing requirements more clearly and in 
greater detail. They are not intended to create new eligibility 
requirements or add an additional burden on applicants.
    In addition, the proposed rule implements and codifies legislative 
changes made after the interim rule was published. On October 4, 2006, 
the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA) 
amended section 408 of the Stafford Act which affected housing repair, 
replacement, and construction assistance. First, it amended subsection 
408(c)(2) of the Stafford Act by removing the subcaps that had limited 
the amount of IHP funds that could be used for housing repair and 
replacement. See 42 U.S.C. 5174(c) and section 686 of Public Law 109-
295. This was a self-implementing statutory change, which went into 
effect immediately. FEMA no longer applies the housing repair and 
replacement subcaps. Individuals and households may use up to the full 
amount of IHP funds ($31,400 for fiscal year 2012) for repair and 
replacement assistance. See 76 FR 63940 (Oct. 14, 2011). This figure is 
adjusted annually to reflect changes in the Consumer Price Index (CPI).
    Second, PKEMRA amended subsection 408(c)(4) of the Stafford Act by 
removing the word ``remote'' and adding the word ``semi-permanent.'' 
While FEMA already had authority to provide ``permanent housing 
construction'' assistance, this statutory change provides FEMA with 
authority to provide assistance for the construction of ``semi-
permanent'' housing. Prior to this statutory change, FEMA only had the 
authority to provide construction assistance to locations that were 
insular (outside the continental United States) or in remote areas 
where the other types of housing assistance were unavailable, 
infeasible, or not cost effective. The removal of the statutory 
requirement that a location be ``remote'' allows FEMA greater 
flexibility to provide construction assistance in other locations, when 
FEMA determines that the stringent statutory requirements are 
satisfied. See 42 U.S.C. 5174(c)(4) and section 685 of Public Law 109-
295. Although this change would likely provide more flexibility for 
FEMA to meet the housing needs of disaster

[[Page 44564]]

survivors, FEMA expects to exercise this authority only rarely. 
Typically, within the continental United States, alternative housing 
resources and/or other types of temporary housing are available and 
feasible (e.g., rental housing or FEMA-provided temporary housing 
units).

II. Discussion of the Proposed Rule

    This rule proposes to do four things. First, it proposes to address 
the public comments received on the 2002 interim rule related to 
housing repair and replacement and proposes revisions to the interim 
rule as a result of those comments. Second, it proposes changes which 
are intended to restate the existing requirements more clearly and in 
greater detail, without substantively changing the underlying 
requirements. The changes should clarify IHP housing repair assistance 
requirements for potential applicants and make it easier for the public 
to understand why damage to their residence is (or is not) eligible for 
IHP assistance. These proposed changes are not intended to create new 
eligibility requirements or add an additional burden on applicants. 
Third, this rule proposes to revise the regulations to align with 
PKEMRA's removal of the housing repair and replacement subcaps. This is 
a non-discretionary conforming amendment that aligns the regulation 
with changes in the Stafford Act and FEMA's current operations. 
Finally, it proposes to add the term ``semi-permanent'' and to remove 
the term ``remote'' with respect to the eligibility requirements for 
housing construction, as authorized by PKEMRA.
    When appropriate, FEMA will provide financial assistance to 
individuals and households to repair eligible real property components 
that are a part of their primary residence and were damaged by the 
event. To be eligible for repair assistance, the damage to the 
component must have been caused by the declared event and the component 
must have been functional before the event. Also, repair or replacement 
of the component must be necessary to ensure the safety or health of 
the occupant or to make the residence functional. These eligibility 
requirements are currently in effect. See 44 CFR 206.117(b)(2), (c)(1). 
This rule proposes language that would revise the repair assistance 
regulations to restate the eligibility requirements more clearly.
    If an individual or household's primary residence is damaged, and 
repair is not feasible, the individual or household may apply for 
housing replacement assistance. If FEMA awards replacement assistance, 
FEMA provides the individual or household financial assistance for the 
reasonable costs to replace their home, up to the maximum assistance 
set by law. The Disaster Mitigation Act of 2000 set a cap of $5,000 for 
repair assistance, and $10,000 for replacement assistance that an 
individual could use out of their maximum assistance award. See section 
206 of Public Law 106-390. An individual was previously not allowed to 
use any additional funds from their maximum assistance award for the 
reasonable costs to repair or replace their home.
    Under the current regulations, FEMA will provide replacement 
assistance if there is at least $10,000 of disaster-related damage (as 
adjusted annually to reflect changes in the CPI). See 44 CFR 
206.117(b)(3). If awarded replacement assistance, under the current 
regulations, the applicant can either (1) replace the dwelling in its 
entirety for $10,000 (as adjusted annually to reflect changes in the 
CPI) or (2) use the assistance towards the cost of acquiring a new 
permanent residence that costs more than $10,000. See 44 CFR 
206.117(b)(3). This $10,000 eligibility structure is no longer 
appropriate since PKEMRA removed the repair and replacement subcaps 
from the Stafford Act. FEMA proposes to remove the $10,000 subcap and 
eligibility threshold from the regulations, but maintain the underlying 
concept that replacement assistance is only available when the 
applicant must replace the damaged dwelling in its entirety. To 
accomplish this, FEMA proposes that to be eligible for housing 
replacement assistance, all parts of the dwelling's structure must have 
been compromised and deemed not repairable.
    FEMA also proposes to remove the $5,000 subcap for repair 
assistance from the regulations, to reflect current law and FEMA 
policy. With the $5,000 subcap for repair assistance removed, 
individuals and households continue to be granted up to the full amount 
of IHP funds ($30,200 for fiscal year 2011) for repairs, when repairs 
are feasible and replacement assistance is not warranted. This change 
does not reduce available repair assistance funds.
    In exceptional circumstances, FEMA is authorized to provide 
permanent or semi-permanent housing construction assistance. If FEMA 
exercises its discretion to offer this form of housing assistance in a 
specific disaster, FEMA may fund the construction of a permanent or 
semi-permanent dwelling for an individual or household. This type of 
assistance is only provided in those situations where the other types 
of FEMA housing assistance are unavailable, infeasible, or not cost 
effective. This limitation exists in FEMA's current regulations and is 
not changed by this proposed rule. See 44 CFR 206.117(b)(4). FEMA 
proposes to revise the regulatory language to conform to changes to the 
Stafford Act. The Stafford Act now provides that housing construction 
may be permanent or semi-permanent and the requirement that FEMA 
provides assistance only in remote areas has been removed. FEMA 
proposes to define ``semi-permanent housing'' as housing with a life 
expectancy of more than 5 years, but less than 25 years. Housing with a 
life expectancy of less than 5 years would be deemed temporary housing 
and that over 25 years would be deemed permanent housing. FEMA has the 
authority to provide this type of assistance in insular areas outside 
the continental United States, as well as in other locations where no 
alternative housing resources are available or where other types of 
FEMA housing assistance are unavailable, infeasible, or not cost-
effective. See 42 U.S.C. 5174(c) and section 685 of Public Law 109-295.
    The basic eligibility requirements for housing assistance are not 
changed by this proposed rule. To be eligible for housing assistance, 
the damage must not be covered by insurance, the damage must be to a 
dwelling owned and occupied by the applicant, and it must have served 
as the applicant's pre-disaster primary residence. Just as 
fundamentally, section 408 requires that all assistance be for 
``necessary expenses and serious needs'' that arose as a ``direct 
result'' of the disaster; thus, repair and replacement assistance are 
provided only to applicants whose residences were ``damaged by'' the 
disaster. See 42 U.S.C. 5174(a)(1), (b), (c); 42 U.S.C. 5155; 44 CFR 
206.113, 206.117(b). To provide greater clarity to the requirement that 
the damage is a direct result of the disaster, FEMA proposes to make 
changes to 44 CFR 206.117(a), (b)(2), (b)(3), (b)(4), and remove 
paragraph (c). The following discussion will address the proposed 
revisions to 44 CFR 206.117, paragraph by paragraph.

44 CFR 206.117--Paragraph (a) Definitions

    As with all of FEMA's IHP housing assistance regulations in 44 CFR 
part 206 subpart D, the definitions in 44 CFR 206.111 apply to 44 CFR 
206.117. However, FEMA finds that to provide clarity to the housing 
assistance regulations additional definitions may be necessary. FEMA 
proposes to revise 44 CFR 206.117(a) to define particularly

[[Page 44565]]

important terms applicable to the housing repair, replacement and 
construction requirements. These proposed definitions would be 
applicable to 44 CFR 206.117 only. In paragraph (a), FEMA proposes to 
add new definitions for ``Caused by the disaster''; ``Real property 
component'' and ``component''; and ``Semi-permanent housing.'' Each of 
these terms is particularly important in the interpretation of FEMA's 
housing repair assistance regulations.

44 CFR 206.117--Paragraph (b)(2) Repair Assistance

    Paragraph (b) addresses repair assistance. In paragraph (b)(2)(i), 
FEMA proposes to clearly notify applicants that the eligibility 
criteria for individuals and households who apply for IHP assistance 
set forth in 44 CFR 206.113 also apply to 206.117(b)(2). Not only must 
the component be eligible, but the applicant must be eligible. FEMA 
proposes to add the cross reference to ensure that those requirements 
are not overlooked. This is not a substantive change.
    Second, FEMA proposes to reorganize the general eligibility 
requirements in proposed paragraph (b)(2)(i) into a checklist format. 
Although the presentation has changed, the proposed text contains no 
new substantive requirements. These requirements are all contained in 
current 44 CFR 206.117(b)(2)(i) and (b)(2)(ii).
    Third, although they are not new, FEMA proposes to clarify these 
existing requirements. Most notably, the current requirement that the 
damage must be ``disaster-related'' has been broken into two parts. As 
proposed, the component must have been functional immediately before 
the event, and the component must have been damaged and made not 
functional by the event. FEMA has historically used these two criteria 
to determine if damages are ``disaster-related.'' These two criteria 
break down the existing requirement, and make it easier to understand 
what FEMA means by the term ``disaster-related damages.'' FEMA cannot 
determine that a component that did not work before the event is not 
functional as a result of the event.
    Further, the disaster must have actually caused damage to the 
component. If the damage was caused by an unrelated event, it is not 
eligible. FEMA has proposed language in paragraphs (b)(2)(iii) through 
(v) further clarifying the extent of available assistance. Those 
paragraphs are discussed later in this preamble.
    The language in proposed paragraph (b)(2)(ii) restates the existing 
language in 44 CFR 206.117(c)(1). The substance of proposed paragraphs 
(b)(2)(ii)(A), (B), and (C) is unchanged. In new paragraph (D), FEMA 
proposes to remove the word ``plumbing'' because it is covered by the 
terms ``water'' and ``sewage,'' which remain. In paragraph (E), FEMA 
proposes to remove the word ``doors'' because they are included in 
proposed paragraph (B). Proposed paragraphs (F), (G), and (H) remain 
substantively unchanged except that FEMA merged the language in current 
paragraph (b)(2)(iii), setting out the type of hazard mitigation 
measures that are eligible, into proposed paragraph (H). FEMA intends 
no substantive change in application of the regulation as a result of 
these changes.
    In proposed paragraph (b)(2)(iii), FEMA would clarify that not only 
the type of repair, but also the eligibility of the component itself, 
will vary depending on the nature of the disaster. This aligns with the 
existing eligibility requirement that the component must have been 
damaged by the event. The nature of an event will indicate whether the 
component would likely have been damaged by it. As an example, drywall 
on the second floor is unlikely to have been damaged from a three-foot 
flood.
    Also in proposed paragraph (b)(2)(iii), FEMA would add new language 
noting that repair will be provided only to the extent that it makes 
the component functional. FEMA does not provide repairs or replacement 
to further improve a component beyond making it functional. IHP is not 
a loss indemnification program and does not ensure that applicants are 
returned to their pre-disaster living conditions. As an example, if 
only the condenser is damaged on a heating and air conditioning system, 
FEMA would provide assistance to repair the condenser, not replace the 
entire system, even if the system is near the end of its service life. 
Finally, in proposed paragraph (b)(2)(iii) FEMA restates the 
limitations in current paragraph (b)(2)(ii) that replacement assistance 
will only be provided when repair is not feasible, and current 
paragraph (c)(1) that repairs are limited to restoring the residence to 
a safe and sanitary living or functioning condition.
    Proposed paragraph (b)(2)(iv) is new. It is intended to clarify the 
requirement in proposed paragraph (b)(2)(i)(B) that the component was 
functional immediately before the event. Components need not be fully 
functional before the event, nor is it disqualifying if the component 
posed a risk before the event. The key is that it must have had some 
functionality before the event, and incurred a change in functionality 
(must become unfunctional) as a result of the event.
    Proposed paragraph (b)(2)(v) revises the content of current 
paragraph (b)(2)(iv) to remove the housing repair subcap. This change 
would conform the regulation to statutory changes in section 408(c)(2) 
of the Stafford Act. See 42 U.S.C. 5174(c) and section 686 of Public 
Law 109-295. FEMA stopped applying the subcaps when the Stafford Act 
was amended, therefore, the removal of this cap from the regulatory 
text will not have a substantive impact on the public. In the proposed 
rule, FEMA clearly states that individuals and households may use the 
entire amount of assistance available under the IHP for repair, or if 
FEMA determines that repair is infeasible, for replacement.
    Proposed paragraph (b)(2)(vi) remains unchanged from the text of 
the current paragraph (b)(2)(v).
    The language of proposed (b)(2)(vii) is new, but the substance is 
not. Applicants for housing repair assistance currently have the 
opportunity to appeal FEMA's eligibility determinations pursuant to 44 
CFR 206.115. FEMA proposes to add an explicit cross reference to ensure 
that they are aware of the opportunity.
    Further, FEMA's initial determination is based on an on-scene 
inspection performed by a FEMA inspector. If the applicant disagrees 
with the inspection and has information that would contradict the 
inspector's report, on appeal it is the applicant's responsibility to 
provide the documentation so that FEMA may appropriately evaluate 
eligibility. Depending on the reason for the denial or the substance of 
the applicant's dispute, an applicant may need to provide proof of 
occupancy, ownership, income, loss, and/or information concerning their 
housing situation prior to the disaster. In case it is later needed to 
support the claim, the applicant should keep, for 3 years, all receipts 
and records for any housing expenses incurred as a result of the 
disaster. See ``Help After a Disaster: Applicant's Guide to the 
Individuals & Households Program'' at http://www.fema.gov/assistance/process/guide.shtm. This includes receipts for repair supplies and 
labor. To ensure that applicants are aware of their burden of proof on 
appeal, FEMA proposes to specifically highlight the documentation 
needed for an appeal. These are not new requirements, because 
generally, for applicants to successfully challenge a FEMA 
determination, they must show proof as to why they believe the 
determination was incorrect.

[[Page 44566]]

44 CFR 206.117--Paragraph (b)(3) Housing Replacement

    In this paragraph, FEMA proposes five changes. First, we propose to 
remove the housing replacement subcap to conform with statutory changes 
to section 408(c)(2) of the Stafford Act. See 42 U.S.C. 5174(c) and 
section 686 of Public Law 109-295. FEMA is no longer required to cap 
the amount of available IHP assistance applied to housing replacement. 
In the proposed rule, FEMA clearly states that individuals and 
households may use the entire amount of assistance available under the 
IHP for this purpose.
    Second, we propose to remove the eligibility requirement that the 
disaster-related damage meet or exceed $10,000 (as adjusted annually to 
reflect changes in the CPI). FEMA proposes to remove the $10,000 
subcap, but maintain the underlying intent that replacement assistance 
only be provided where repair assistance is insufficient. To do so, 
FEMA proposes to revise paragraph (b)(3) to allow for replacement 
assistance if repair to an owner-occupied primary residence damaged by 
the declared event is not feasible, will not ensure the safety or 
health of the occupant, or will not make the residence functional.
    Third, in response to a comment on the interim rule, FEMA proposes 
to reassign the authority to approve replacement assistance awards. 
FEMA proposes to change this authority from the FEMA ``Associate 
Administrator'' to the FEMA ``Regional Administrator or his or her 
designee.'' This change is intended to speed the processing of housing 
replacement assistance.
    Fourth, just as with repair assistance, applicants must meet the 
eligibility requirements of 44 CFR 206.113 to be considered for 
replacement assistance. The residence must also have been functional 
immediately before the declared event, must have been damaged by the 
event, and the damage must not have been covered by insurance. These 
are the current requirements for replacement assistance; however, as 
with repair assistance, the requirements are not currently set out in 
checklist form in the regulations. Further, FEMA finds that it may be 
confusing to applicants that the basis for the amount of replacement 
assistance is in current paragraph (c), while the other eligibility 
requirements are contained in paragraph (b)(3). To address this, FEMA 
proposes to list the eligibility requirements in checklist form, 
mirroring those elements for repair assistance. FEMA also proposes to 
move the current text in paragraph (c)(2) to new paragraph (b)(3)(iii) 
without substantive change.
    Finally, FEMA proposes to add a new paragraph (b)(3)(iv). As with 
repair assistance, FEMA finds it may be beneficial to provide a cross 
reference to the appeal regulations at 44 CFR 206.115, as well as, 
clarify that the applicant must also provide proof that the residence 
is eligible for replacement assistance. These are not new requirements, 
but merely list the necessary elements of an appeal.

44 CFR 206.117--Paragraph (b)(4) Permanent and Semi-Permanent Housing 
Construction

    As with current paragraph (b)(3), FEMA proposes to consolidate the 
requirements for housing construction assistance by stating the 
eligibility requirements in checklist format and re-designating the 
current text of paragraph (b)(4) as paragraph (b)(4)(i), and moving the 
current text in paragraph (c)(3) to new paragraph (b)(4)(ii) without 
substantive change.
    Also, section 685 of PKEMRA amended section 408(c)(4) of the 
Stafford Act by inserting ``or semi-permanent'' after ``permanent'' and 
by striking the word ``remote.'' These changes allow FEMA to provide 
not only permanent housing construction assistance, but also to 
construct semi-permanent housing. Further, this type of assistance is 
no longer limited to remote locations, but can be provided in those 
exceptional cases where alternative housing resources are not available 
and the other types of housing assistance provided by FEMA are 
unavailable, infeasible, or not cost effective. FEMA proposes to revise 
its housing construction regulations in new paragraph (b)(4)(i) to 
conform with these statutory changes. FEMA expects to provide this type 
of assistance in very rare circumstances. Alternative housing resources 
and the other types of housing assistance should sufficiently address a 
community's housing needs in most circumstances.
    Finally, FEMA proposes to add a new paragraph (b)(4)(iii). As with 
repair and replacement assistance, FEMA finds it may be beneficial to 
provide a cross reference to the appeal regulations at 44 CFR 206.115, 
as well as clarify that the applicant must also provide proof that the 
residence is eligible for construction assistance. These are not new 
requirements, but merely list the necessary elements of an appeal.

44 CFR 206.117--Paragraph (c) Eligible Costs

    As noted above, FEMA proposes to distribute the substance of 
current paragraph (c) throughout proposed paragraph (b). Therefore, 
FEMA proposes to remove paragraph (c).

III. Response to Comments From the Interim Rule Related to Housing 
Repair Assistance

    In response to the interim rule, FEMA received written comments 
from five States. This section addresses the portion of those comments 
regarding housing repair assistance.

Caps on Repair and Replacement Assistance

    One State recommended modification of the $5,000 cap, expressing 
concern that the repair cap may not bring homes into compliance with 
local minimum standards. The commenter stated that where there are no 
local standards, the low cap may force individuals and households to 
return to unsafe conditions. FEMA agreed with the commenters regarding 
the caps, and sought a modification to the statute. See 67 FR 61447. 
Another commenter raised similar concerns regarding the $10,000 cap on 
replacement assistance.
    On October 4, 2006, PKEMRA amended section 408(c)(2) of the 
Stafford Act, by removing the repair and replacement caps. See 42 
U.S.C. 5174(c). This was a self-implementing change which went into 
effect immediately, and FEMA no longer applies the caps. FEMA proposes 
to revise current 44 CFR 206.117(b)(2)(iv) and (b)(3) to remove the 
repair and replacement caps.

Approval Authority for Replacement Assistance (44 CFR 206.117(b)(3))

    One State noted that approval at the Associate Administrator level 
was a deterrent to timely and compassionate assistance. The commenter 
recommended that the Regional Administrator be given approval authority 
for replacement assistance.
    In response to this comment, FEMA proposes to revise 44 CFR 
206.117(b)(3) by replacing ``Associate Director'' with ``Regional 
Administrator or his or her designee.'' FEMA proposes this change 
because the Regional Administrator will have greater familiarity with 
the damage in his or her region, and with greater decentralization 
housing replacement applications may be processed faster.

IV. Individuals and Households Program Implementation Review Report

    During the comment period on the interim rule, FEMA met with the 
staff of five States in which the IHP was first implemented. The State 
and FEMA recovery program staff that first implemented IHP worked six 
disasters:

[[Page 44567]]

DR-1439-TX which resulted from severe storms, tornados, and flooding in 
Texas; DR-1440-AK which resulted from an earthquake in Alaska; DR-1441-
TN which resulted from severe storms, tornados, and flooding in 
Tennessee; DR-1442-AL which resulted from severe storms and tornados in 
Alabama; DR-1443-MS which resulted from severe storms and tornados in 
Mississippi; and DR-1444-OH which resulted from severe storms and 
tornados in Ohio. The participants in the meeting were asked to 
identify best practices and problems or issues that needed corrective 
action. The meeting resulted in the Individuals and Households Program 
Implementation Review Report (Report), a copy of which is available in 
the docket for this rulemaking on www.regulations.gov. The 
recommendations focused primarily on procedural or other aspects of IHP 
that were not affected by this rule. Two issues in that report affect 
this rulemaking. Those issues and their resolution are:
    Issue: Revise the $5,000 and $10,000 statutory limits.
    Status or Resolution: As discussed elsewhere in this preamble, 
PKEMRA amended section 408(c)(2) of the Stafford Act, 42 U.S.C. 
5174(c), by removing the repair and replacement caps. As a result, FEMA 
proposes to revise the regulations to remove both the $5,000 repair cap 
and the $10,000 replacement cap.
    Issue: Replacement--establish uniform policy and flexible 
procedures.
    Status or Resolution: In this proposed rule, FEMA attempts to 
improve its housing replacement assistance program. FEMA's procedures 
allow for flexibility, yet protect against abuse. In this proposed 
rule, FEMA delegates the decision regarding replacement eligibility to 
the Regional Administrators, provides clarity and cross references to 
appeal rights, clarifies eligibility criteria, and expands the amount 
of assistance by removing the repair and replacement subcaps. By 
clarifying the requirements, and making the regulations easier to read, 
FEMA intends to create uniformity in application.

V. Records Management

    The Regulation Identifier Number (RIN) listed in the September 30, 
2002 interim rule and the correction to the interim rule was 3067-AD25. 
When FEMA became a component of the Department of Homeland Security 
(DHS) in 2003, FEMA's RINs were renumbered, and 3067-AD25 became 1660-
AA18.
    The Docket ID for 1660-AA18 is FEMA-2008-0005. All of 1660-AA18's 
public submissions, supporting and related documents, and rules are 
posted to Docket ID FEMA-2008-0005. The public comments that addressed 
housing repair assistance, the subject of this rulemaking, have also 
been posted to Docket ID FEMA-2010-0035.

VI. Regulatory Analysis

A. Executive Order 12866, Regulatory Planning and Review and Executive 
Order 13563, Improving Regulation and Regulatory Review

    FEMA has prepared and reviewed this rule consistent with Executive 
Order 12866, Regulatory Planning and Review (58 FR 51735, Oct. 4, 1993) 
as supplemented by Executive Order 13563, Improving Regulation and 
Regulatory Review (76 FR 3821, Jan. 18, 2011). This proposed rule is 
not a significant regulatory action, and therefore has not been 
reviewed by the Office of Management and Budget (OMB).
    This proposed rule is intended to provide clarification with 
respect to the eligibility for housing repair assistance, without 
adding new requirements, as well as implement changes to section 408 of 
the Stafford Act made by PKEMRA. See 42 U.S.C. 5174. This rule will not 
impose any additional burden on the public or change the total amount 
of assistance available to individuals and households since this rule 
merely codifies FEMA practice since 2006.
    The proposed changes resulting from PKEMRA (a) revise the 
regulations to align with PKEMRA's removal of the housing repair and 
replacement subcaps; (b) remove the limitation that housing 
construction assistance be provided only in a ``remote'' area, if the 
location is not otherwise insular (outside the continental United 
States); and (c) incorporate FEMA's new authority to provide assistance 
for the construction of ``semi-permanent'' housing.
    When the current regulations were written, FEMA was prohibited from 
providing more than $5,000 (adjusted annually to reflect changes in the 
CPI) for repair assistance, and more than $10,000 (adjusted annually to 
reflect changes in the CPI) for replacement assistance under the 
Disaster Mitigation Act of 2000. These subcaps prevented applicants 
from spending all of their available IHP assistance (in fiscal year 
2012, this amount is $31,400 per declared event (76 FR 63940, Oct. 14, 
2011)) on housing repair or replacement, leaving nothing for their 
other needs such as clothing, funeral, or medical costs. The change in 
PKEMRA was self implementing and immediately went into effect. FEMA is 
no longer required to apply subcaps and has not applied them since 
PKEMRA became law in 2006. This rule change is intended to revise the 
regulations to conform to the statutory change and FEMA's current 
practice. It would not change the eligibility criteria and would not 
reduce the total amount of assistance available to individuals and 
households. This proposed change would not have an economic impact 
because it merely codifies FEMA current practice.
    This rule also proposes to remove the term ``remote'' from 44 CFR 
206.117(b)(3) to implement new authority to provide housing 
construction assistance in areas within the continental United States 
where alternative housing resources are not available, infeasible, or 
not cost effective. Currently, FEMA's regulations limit this type of 
assistance to only locations that are insular or remote. This proposed 
rule change would implement PKEMRA by providing housing construction 
assistance to disaster survivors in areas where alternative housing 
resources are not feasible. This rule change provides more flexibility 
for FEMA to meet the housing needs for disaster survivors, although it 
is expected that FEMA will only rarely exercise this authority. This is 
because alternative housing resources, such as rental units, 
manufactured housing, recreational vehicles, other readily fabricated 
dwellings, or FEMA-provided temporary housing units, typically are 
available within the continental United States. FEMA has not yet 
provided any direct assistance for housing construction in areas other 
than those that are remote and insular. This proposed change is not 
expected to have a significant economic impact or to negatively affect 
the eligibility criteria for assistance. Any economic impact from this 
proposed rule change would be an increase in Federal grant funds 
provided to individuals and households to provide housing in those 
extremely rare cases where alternative housing resources are not 
available, infeasible, or not cost effective. There would be no 
increased burden imposed on the public from this proposed change. There 
is no economic impact to this proposed change because this proposed 
rule merely codifies FEMA current practice since 2006.
    This rule also proposes to add ``semi-permanent'' to the types of 
housing that could be constructed. This type of housing would be that 
with a life expectancy of more than 5 years, but

[[Page 44568]]

less than 25 years. While FEMA already provides temporary and permanent 
housing, by implementing this new authority, FEMA would have greater 
flexibility to meet the needs of a particular community, where the 
construction of a type of housing other than a long-term permanent 
structure may be more appropriate. Although this rule change is likely 
to provide more flexibility for FEMA to meet the housing needs for 
disaster survivors, it is not expected that FEMA will regularly 
exercise this authority. This proposed rule change would implement 
PKEMRA by giving FEMA more options in providing housing assistance to 
disaster survivors. It would not reduce the number of individuals or 
households eligible for housing assistance and would not affect 
eligibility requirements. There is no economic impact to this proposed 
change because this proposed rule merely codifies FEMA current 
practice.

B. Paperwork Reduction Act of 1995

    FEMA determined that this proposed rule will not create a new 
collection of information or create a revision to an existing 
collection of information under the Paperwork Reduction Act of 1995 
(PRA), 44 U.S.C. 3501-3520. All information submitted by applicants 
seeking IHP housing assistance, including information submitted on 
appeal, is included in Office of Management and Budget (OMB) approved 
collections.
    The following collections related to IHP have been approved by OMB 
under the following titles and control numbers: ``Disaster Assistance 
Registration'', OMB control number 1660-0002, expiration date August 
31, 2013 and ``Federal Assistance to Individuals and Households Program 
(IHP)'', OMB control number 1660-0061, expiration date October 31, 
2014. There would be no additional paperwork burden as a result of the 
changes proposed in this rule.

C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
as amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (Pub. L. 104-121, 110 Stat. 857), FEMA must consider the impact of 
this proposed regulation on small entities. The term ``small entities'' 
comprises small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000. 
This proposed rule clarifies the eligibility criteria for housing 
repair, replacement, and construction assistance to individuals and 
households. It will not have an economic impact on small entities 
because it merely codifies FEMA current practice since PKEMRA became 
law in 2006. FEMA certifies that this rulemaking will not have a 
significant economic impact on a substantial number of small entities.

D. Privacy Act

    The Privacy Act of 1974, 5 U.S.C. 552a, establishes a code of fair 
information practices that governs the collection, maintenance, use, 
and dissemination of personally identifiable information about 
individuals that is maintained in systems of records by Federal 
agencies. A system of records is a group of records under the control 
of an agency from which information is retrieved by the name of the 
individual or by some identifier assigned to the individual. FEMA, in 
partnership with other Federal agencies, hosts a single application and 
resource center at http://www.disasterassistance.gov that allows the 
public to apply for disaster assistance, benefits, and other services 
within FEMA and other Federal agencies. This application and resource 
center contains personally identifiable information about IHP 
applicants seeking housing repair, replacement, or construction 
assistance. The application resource center is contained in a Privacy 
Act System of Records entitled ``Disaster Recovery Assistance Files'' 
number ``DHS/FEMA-008'' which published on September 24, 2009 in the 
Federal Register at 74 FR 48763. This proposed rule would not change 
the application materials received or result in a new collection of 
personally identifiable information about individuals.

E. National Environmental Policy Act

    Under the National Environmental Policy Act of 1969 (NEPA), 42 
U.S.C. 4321 et seq., an agency must prepare an environmental assessment 
and environmental impact statement for any rulemaking that 
significantly affects the quality of the human environment. FEMA has 
determined that this rulemaking does not significantly affect the 
quality of the human environment and consequently has not prepared an 
environmental assessment or environmental impact statement. Most 
activities under section 408 and prior section 411 of the Stafford Act 
pertaining to temporary housing and financial assistance are 
categorically excluded from NEPA review under 44 CFR 10.8(d)(2)(xix)(D) 
and (F). Before undertaking other activities that are not categorically 
excluded (e.g., placement of manufactured temporary housing units on 
FEMA-constructed group sites; permanent or semi-permanent housing 
construction), FEMA follows the procedures set forth in 44 CFR part 10 
to assure NEPA compliance.

F. Executive Order 13132, Federalism

    Executive Order 13132, Federalism, 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. 
See Executive Order 13132, 64 FR 43255, Aug. 10, 1999. 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. The disaster assistance addressed by this 
proposed rule is provided to individuals and families, and would not 
have federalism implications.

G. Executive Orders 11988 and 11990, Floodplain Management and 
Protection of Wetlands

    Under Executive Order 11988, Floodplain Management, as amended, 
Federal agencies are required to ``provide leadership to reduce the 
risk of flood loss, to minimize the impact of floods on human safety, 
health and welfare, and to restore and preserve the natural and 
beneficial values served by floodplains.'' See Executive Order 11988, 
as amended, 42 FR 26951, May 25, 1977, 44 FR 43239, July 20, 1979. 
Under Executive Order 11990, Protection of Wetlands, Federal agencies 
are required to ``provide leadership and * * * take action to minimize 
the destruction, loss or degradation of wetlands, and to preserve and 
enhance the natural and beneficial values of wetlands in carrying out 
the agency's responsibilities.'' See Executive Order 11990, as amended, 
42 FR 26961, May 25, 1977, 52 FR 34617, Sept. 14, 1987. The 
requirements of these Executive Orders apply in the context of the 
provision of Federal financial assistance relating to, among other 
things, construction and property improvement activities, as well as 
conducting Federal programs affecting land use. The changes proposed in 
this rule would not have an effect on land use, floodplain management 
or wetlands. When FEMA undertakes specific actions that may

[[Page 44569]]

have such effects (e.g., placement of manufactured temporary housing 
units on FEMA-constructed group sites; permanent or semi-permanent 
housing construction), FEMA follows the procedures set forth in 44 CFR 
part 9 to assure compliance with these Executive Orders.

H. Executive Order 13045, Protection of Children From Environmental 
Health Risk and Safety Risks

    FEMA has analyzed this proposed rule under Executive Order 13045, 
Protection of Children From Environmental Health Risks and Safety 
Risks, 62 FR 19883, Apr. 23, 1997. This rule is not an economically 
significant rule and would not create an environmental risk to health 
or safety that might disproportionately affect children.

I. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501 et 
seq., pertains to any proposed rulemaking which implements any rule 
that includes a Federal mandate 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. The Act also applies to any regulatory 
requirements that might significantly or uniquely affect small 
governments. FEMA has determined that this proposed rule would not 
result in the expenditure by State, local and Tribal governments, in 
the aggregate, nor by the private sector, of $100,000,000 or more in 
any one year as a result of a Federal mandate, nor would it 
significantly or uniquely affect small governments.

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

    Under Executive Order 13175, Consultation and Coordination with 
Indian Tribal Governments, FEMA may not issue a regulation that is not 
required by statute, that significantly or uniquely affects the 
communities of Indian Tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
Government provides the funds necessary to pay the direct compliance 
costs incurred by the Tribal government, or FEMA consults with those 
governments. See Executive Order 13175, 65 FR 67249, Nov. 9, 2000. This 
proposed rule would not significantly or uniquely affect the 
communities of Indian Tribal governments, nor would this proposed 
rulemaking impose substantial direct compliance costs on those 
communities.

K. Executive Order 12898, Environmental Justice

    Under Executive Order 12898, Environmental Justice, each Federal 
agency must 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. See Executive Order 12898, 59 FR 7629, 
Feb. 16, 1994. FEMA has incorporated environmental justice into its 
policies and programs.
    The proposed housing repair, replacement and construction 
assistance regulations intentionally contain provisions that ensure 
they would not have a disproportionately high and adverse human health 
effect on any segment of the population. This rulemaking clarifies the 
eligibility requirements for assistance, and in doing so, maintains 
focus on the functionality of the component being repaired or replaced, 
and does not consider income or home value. Section 408 of the Stafford 
Act requires that such assistance be granted only for damage caused by 
a disaster event. Non-disaster related damage is not eligible for 
assistance under the Stafford Act. To ensure that this limitation will 
not be improperly exclusive, this proposed rule would clarify that 
components being repaired or residences being replaced need not be in 
full working order before the event to qualify for assistance. 
Components or residences that were fully or partially functional 
immediately before the declared event, despite their need for 
maintenance, may be eligible for repair assistance if they ceased to 
function as a result of the disaster.
    One commenter stated that the proposed rule did not overtly 
discriminate against disaster survivors based on race, color, or 
national origin, but that it did discriminate covertly against those 
who are financially challenged, and, to the extent that the financially 
challenged consist disproportionately of minority groups, one might 
conclude that an element of the IHP program lacks environmental 
justice. The commenter stated that the housing repair cap of $5,000 has 
a gross negative impact on low-income disaster survivors, and results 
in more low-income disaster survivors returning to unsafe, unsanitary, 
and/or non-functional homes. The commenter stressed that low-income 
individuals were less likely to qualify for SBA loans, and Other Needs 
Assistance does not assist with structural repairs. Consequently, low-
income individuals might have no choice but to move back into an 
unsuitable environment. The commenter recommended the liberal use of 
replacement assistance to provide additional help for the financially 
challenged.
    As discussed elsewhere in this preamble, the $5,000 subcap is no 
longer in effect, and individuals and households may use up to the full 
amount of IHP funds ($31,400 for fiscal year 2012) for repair and 
replacement assistance. See 76 FR 63940 (Oct. 14, 2011). This figure is 
adjusted annually to reflect changes in the Consumer Price Index (CPI).
    No action that FEMA can anticipate under this proposed rule would 
have a disproportionately high and adverse human health effect on any 
segment of the population. In addition, the rulemaking would not impose 
substantial direct compliance costs on those communities.

L. 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, to minimize litigation, 
eliminate ambiguity, and reduce burden. See Executive Order 12988, 61 
FR 4729, Feb. 7, 1996.

M. 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, as supplemented by Executive Order 13406, Protecting 
the Property Rights of the American People. See Executive Order 12630, 
53 FR 8859, Mar. 18, 1988 and Executive Order 13406, 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.

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

[[Page 44570]]

resources, Penalties, and 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:

PART 206--FEDERAL DISASTER ASSISTANCE

    1. The authority citation for part 206 continues to read as 
follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; Reorganization Plan No. 
3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; Homeland Security 
Act of 2002, 6 U.S.C. 101; E.O. 12127, 44 FR 19367, 3 CFR, 1979 
Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 1979 Comp., p. 412; 
and E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

    2. Amend Sec.  206.117 to remove paragraph (c) and to revise 
paragraphs (a), (b)(2), (b)(3), and (b)(4) to read as follows:

Sec.  206.117  Housing assistance.

    (a) Definitions. The definitions in this paragraph apply to this 
section only.
    Caused by the disaster means as a direct result of a peril 
identified in the Federal Register Notice of a Presidentially-declared 
major disaster or emergency, the component is no longer functional.
    Real Property Component or Component means each individual part of 
a dwelling that makes it habitable, as enumerated in paragraph 
(b)(2)(ii) of this section.
    Semi-Permanent Housing means housing designed and constructed with 
finishes, material, and systems selected for moderate (or better) 
energy efficiency, maintenance, and life cycle cost, and with a life 
expectancy of more than 5 years but less than 25 years.
    (b) * * *
    (2) Repairs. (i) FEMA may provide financial assistance for the 
repair of real property components in an owner's primary residence if:
    (A) The eligibility criteria in Sec.  206.113 are met;
    (B) The component was functional immediately before the declared 
event;
    (C) The component was damaged, and the damage was caused by the 
disaster;
    (D) The damage to the component is not covered by insurance; and
    (E) Repair of the component is necessary to ensure the safety or 
health of the occupant or to make the residence functional.
    (ii) FEMA may provide financial assistance for the repair of:
    (A) Structural components of the residence. This includes real 
property components, such as the foundation, exterior walls, and roof.
    (B) Windows and doors.
    (C) The Heating, Ventilation and Air Conditioning system.
    (D) Utility systems. This includes electrical, gas, water and 
sewage systems.
    (E) Interior components. This includes, but is not limited to, the 
structure's floors, walls, ceilings, and cabinetry.
    (F) The structure's access and egress, including privately owned 
access roads and privately owned bridges.
    (G) Blocking, leveling, and anchoring of a mobile home, and 
reconnecting or resetting mobile home sewer, water, electrical and fuel 
lines and tanks.
    (H) Items or services determined to be eligible hazard mitigation 
measures that reduce the likelihood of future damage to the residence, 
utilities, or infrastructure.
    (iii) The components that may be deemed eligible for repair 
assistance, and the type of repairs authorized, will vary depending 
upon the nature of the disaster. Repairs are limited to restoration of 
the dwelling to a safe and sanitary living or functioning condition. 
Repair assistance will only be provided to the extent that the work 
makes the component functional. FEMA may provide for the replacement of 
components if repair is not feasible. The repairs of components must be 
of average quality, size, and capacity, taking into consideration the 
needs of the occupant.
    (iv) Components that were functional immediately before the 
declared event may be eligible for repair assistance if the damage to 
the component was caused by the disaster and the component is no longer 
functional.
    (v) Eligible individuals or households may receive up to the 
maximum amount of assistance (See Sec.  206.110(b)) to repair damages 
to their primary residence irrespective of other financial resources, 
except insurance proceeds.
    (vi) The individual or household is responsible for obtaining all 
local permits or inspections that applicable State or local building 
codes may require.
    (vii) If the applicant disputes a determination made by FEMA 
regarding eligibility for repair assistance, the applicant may appeal 
that determination pursuant to the procedures in Sec.  206.115. In 
addition to the requirements in Sec.  206.115, the applicant must 
provide proof that the component meets the requirements of paragraph 
(b)(2)(i) of this section, including that the component was functional 
before the declared event and proof that the declared event caused the 
component to stop functioning. If the applicant disputes the amount of 
repair assistance awarded, the applicant must also provide 
justification for the amount sought.
    (3) Housing Replacement. (i) FEMA may provide financial assistance 
for the replacement of an owner's primary residence if:
    (A) The eligibility criteria in Sec.  206.113 are met;
    (B) The residence was functional immediately before the disaster;
    (C) The residence was destroyed, and the damage was caused by, the 
disaster;
    (D) The damage to the residence is not covered by insurance;
    (E) Repair is not feasible, will not ensure the safety or health of 
the occupant, or will not make the residence functional; and
    (F) Replacement is necessary to ensure the safety or health of the 
occupant.
    (ii) All replacement assistance awards must be approved by the 
Regional Administrator or his/her designee. If replacement assistance 
is granted, the applicant may either use the maximum amount of 
assistance (See Sec.  206.110(b)) to replace the dwelling in its 
entirety, or may use the assistance toward the cost of acquiring a new 
permanent residence.
    (iii) Housing replacement assistance will be based on the verified 
disaster-related level of damage to the dwelling, or the statutory 
maximum (See Sec.  206.110(b)), whichever is less.
    (iv) If the applicant disputes a determination made by FEMA 
regarding eligibility for replacement assistance, the applicant may 
appeal that determination pursuant to the procedures in Sec.  206.115. 
In addition to the requirements in Sec.  206.115, the applicant must 
provide proof that repair is not feasible, or will not ensure the 
safety or health of the occupant or make the residence functional. If 
the applicant disputes the amount of replacement assistance awarded, 
the applicant must also provide justification for the amount sought.
    (4) Permanent and semi-permanent housing construction. (i) FEMA may 
provide financial or direct assistance to applicants for the purpose of 
constructing permanent and semi-permanent housing if:
    (A) The eligibility criteria in Sec.  206.113 are met;
    (B) The residence was functional immediately before the declared 
event;
    (C) The residence was damaged by the event;
    (D) The damage to the residence is not covered by insurance;
    (E) The residence was an owner-occupied primary residence; and

[[Page 44571]]

    (F) The residence is located in an insular area outside the 
continental United States or in another location where alternative 
housing resources are not available and the types of financial or 
direct temporary housing assistance described in paragraphs (b)(1), 
(2), and (3) of this section are unavailable, infeasible, or not cost-
effective.
    (ii) Permanent and semi-permanent housing construction, in general, 
must be consistent with current minimal local building codes and 
standards where they exist, or minimal acceptable construction industry 
standards in the area, including reasonable hazard mitigation measures, 
and Federal environmental laws and regulations. Dwellings will be of 
average quality, size and capacity, taking into consideration the needs 
of the occupant.
    (iii) If the applicant disputes a determination made by FEMA 
regarding eligibility for construction assistance, the applicant may 
appeal that determination pursuant to the procedures in Sec.  206.115. 
In addition to the requirements in Sec.  206.115, the applicant must 
provide proof that the property is either located in an insular area 
outside the continental United States, or in a location where 
alternative housing resources are not available. The applicant must 
also provide proof that the types of financial or direct temporary 
housing assistance described in paragraph (b)(1) of this section are 
unavailable, infeasible, or not cost effective. If the applicant 
disputes the amount of construction assistance awarded, the applicant 
must also provide justification for the amount sought.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2012-18568 Filed 7-27-12; 8:45 am]
BILLING CODE 9111-23-P