FEMA’s Public Assistance Grant Program: Background and Considerations for Congress
Released: 2015-04-16T00:00:00

Introduction

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq., henceforth the Stafford Act) confers upon the President a broad set of authorities "to alleviate the suffering and damage" of affected tribal, state, and local governments, as well as individual citizens, from disasters. The Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS) has been given the responsibility of administering almost all of the President's Stafford Act authorities through other law, a series of Executive Orders, and a DHS delegation. FEMA has established the Public Assistance (PA) Grant Program by combining the authority of multiple sections of the Stafford Act. The PA Program provides financial grant assistance to states, tribes, and local communities both in the response to and recovery from significant disasters. Between FY2000-FY2013, the PA Program has provided $52.6 billion in grant assistance to help communities pay for an array of eligible response and recovery activities, including debris removal, emergency protective measures, and the repair, replacement, or restoration of disaster-damaged, publicly owned facilities and the facilities of certain private nonprofit (PNP) organizations. The authorities of the PA Program were most recently significantly amended by the Sandy Recovery Improvement Act (Division B of P.L. 113-2 , the Disaster Relief Appropriations Act, 2013; henceforth SRIA). For a brief legislative history of PA Program authorities, see Appendix A .

This report provides background on key elements of the PA Program, such as the eligibility of applicants, the types of assistance available, and the methods FEMA uses for awarding grant assistance. Summary analysis of federal obligations for PA Program assistance is also provided along important variables, such as the distribution of federal obligations across the PA Program eligible categories of work assistance. The report concludes with discussion of several policy issues that Congress may wish to consider when evaluating the PA Program in the future, including considerations of significant prospective changes to the PA Program and the role of the PA Program in the context of other federal agency disaster assistance authorities.

It is beyond the scope of this report to describe in full how FEMA administers the PA Program. FEMA has many publicly available resources that explain the complexity of the PA Program in greater detail than is provided in this report.

Key Elements of the PA Program

This section of the report describes key elements of the PA Program, such as major eligibility considerations, the types of grant assistance provided, and the methods for disbursing grant funding.

Eligible Applicants

In order to be eligible for PA grants, an applicant's respective state or tribal government must first receive a major or emergency disaster declaration from the President through Stafford Act procedures. The key condition for receiving a declaration is that the disaster has consequences "beyond the capacity" of the affected state/tribe and local communities to manage. In a more limited fashion, PA grants are available to those areas receiving Fire Management Assistance Grants (often colloquially called FMAG or fire "declarations"). In addition, PA grants are only available in the localities of the state (or the tribal associated lands) specified in the Stafford Act declaration.

Once the President has issued a disaster declaration, the primary grantee for all PA grants is the state or tribal government receiving the declaration. However, as subgrantees (or, by another name, applicants) PA grants are available to any tribal government, state, and local government entity in the affected area. Local government is broadly defined in the Stafford Act, and therefore grant assistance may be provided to local governmental bodies ranging from general purpose municipal city governments, school districts, public hospitals, public water and sewage authorities, to transportation districts.

PA grants are not available to private citizens or private companies, but they are available to certain owners of private nonprofit facilities (PNPs).The Stafford Act provides a full definition, with examples, of what constitutes an eligible PNP facility. The major condition of eligibility of a PNP is whether it falls into a specific set of facilities named in law, or if it otherwise provides an "essential service of a governmental nature to the general public." This condition is included in the PNP definition in the law, and is expanded on in FEMA's regulations and policy guidance. The PNP must also be considered a nonprofit under the terms of the U.S. Internal Revenue Service or under state law.

The eligibility of PNPs for PA assistance changes based on whether the PNP is determined to provide a critical service, which is a smaller subset of PNPs providing essential governmental services. Critical services include power, water, sewer, education, emergency medical facilities, and more. If the PNP provides a critical service, it may apply directly to the PA Program for grant assistance to repair and restore its facilities as if it were a tribal, state, or local governmental entity. If it does not provide such a critical service, but does provide an essential service of a governmental nature, the PNP is first required to apply for assistance from the Small Business Administration's (SBA's) Disaster Loan Program. If the PNP is denied assistance from SBA or the total amount of loan assistance is less than the PA eligible damage, the eligible PNP providing non-critical governmental services may then apply for assistance from the PA Program. Both critical and non-critical PNPs may receive emergency work assistance, as described later in the report.

Of recent interest to Congress, FEMA's policy guidance instructs that PNP facilities are ineligible for assistance when their space is "dedicated to or primarily used for religious, political, athletic, recreational, or vocational purposes." Currently, facilities owned by a religious entity are only eligible to the extent that the facility primarily provides an eligible, essential governmental service. For example, the school facilities of a church are generally eligible, so long as the primary purpose of the facilities is for secular education. Congress has considered legislation to allow for the inclusion of "houses of worship" as an eligible category of PNP facilities, though doing so may present constitutional legal issues.

Eligible Types of Assistance (Categories of Work)

To administer the PA Program and describe the PA Program's many eligible types of assistance, FEMA combines the authorities of multiple sections of the Stafford Act into "categories of work." As shown in Table 1 , FEMA has two major groups of assistance: emergency work assistance, and permanent work assistance. Within these groups, there are categories of assistance labeled A through G. Neither the Stafford Act nor FEMA's implementing regulations specifically identify these categories of work; rather these distinctions have been developed by FEMA in policy as a means of managing and implementing the PA Program. While a generally useful tool to classify the types of assistance available through the PA Program, the categories are not completely distinct and similar projects could be subjectively classified under different categories in different incidents (i.e., there is some "gray area" between the categories).

Emergency Work

FEMA regulations define emergency work as "work which must be done immediately to save lives and to protect improved property and public health and safety, or to avert or lessen the threat of a major disaster." The authorizing statute for emergency work is found in multiple provisions of the Stafford Act, primarily in Section 403. Emergency work assistance is available to communities identified in both major and emergency disaster declarations. More limited emergency work assistance is also provided for areas receiving Fire Management Assistance Grants (FMAGs). As subdivided by FEMA, it includes two categories of assistance, debris removal and emergency protective measures, which are described below. As shown later in Table 5 , CRS analysis of project data from FY2000 to FY2013 indicates that approximately 35% of all PA projects were for emergency work. These emergency work projects accounted for 41%, or $21.2 billion, of the total federal obligations for assistance in the PA Program during the time period.

Debris Removal21

When a disaster strikes a community, it can produce a large volume of debris ranging from tree limbs, destroyed cars, chemicals and other hazardous materials, building materials, etc. Debris can have immediate impacts such as blocking emergency routes, and can also inhibit a community's overall recovery and prevent the safe return of residents to their homes if they were evacuated. Managing the debris removal process is a fundamental challenge in responding to any disaster, and is guided by a number of regulatory requirements.

So long as it is in the public interest, FEMA provides grant assistance to communities for both the actual removal of the debris and the management of the process writ large, as authorized by Section 403(a)(3)(A) and Section 407 of the Stafford Act. This assistance, under Category A of the PA Program, is available both for emergency and major disaster declarations. Working with the applicant, FEMA will estimate the amount of debris following a disaster in order to provide eligible grantees expedited payments of 50% of the initial estimate for full anticipated debris removal costs. Eligible PNPs may receive assistance for the removal of debris on their eligible facilities. FEMA has established extensive policy guidance specifically on debris removal assistance, as the process for debris removal is relatively distinct from much of the rest of PA Program assistance.

The Sandy Recovery Improvement Act (SRIA) established a set of alternative procedures for debris removal assistance provided by the Stafford Act. This new section of the Stafford Act reauthorizes similar authorities to those granted by the PA Pilot Program established by the Post-Katrina Emergency Management Reform Act (PKEMRA), and as have been recommended in the past by the DHS Inspector General (IG). The alternative procedures are intended to incentivize the faster completion of projects while saving local and federal monies. As implemented currently by FEMA in pilot program guidance, the alternative procedures for debris removal allow:

Use of a sliding scale for the federal share of debris removal based on the time it takes to finish debris removal. FEMA is to provide a larger federal share of the eligible cost the quicker an applicant removes the debris. For debris removed by a subgrantee within 30 days of the disaster, the federal share is 85% (a 10% increase from the minimum 75%); and within the next 60 days (i.e., days 30-90 post-disaster), 80% of the federal share. Applicants to recycle debris and use the proceeds from such recycling without reducing the awarded amount of grant assistance. FEMA has created several eligible uses for the proceeds, including using it to meet the grantee cost share requirement and to improve future debris removal operations. Reimbursement of state, tribal, and local governments or owner/operators of private nonprofits for the base and overtime wages of their own employees that are performing or administering debris removal projects. Provision of financial incentives for applicants with a FEMA-approved debris removal plan and one or more prequalified debris removal contracts prior to a disaster. FEMA is providing a one-time 2% cost share adjustment for a single disaster declaration for all debris removal work completed within 90 days if the applicants have a debris removal plan and at least one prequalified debris removal contract in place.

Emergency Protective Measures

Emergency protective measures (Category B) is perhaps the broadest eligible form of assistance in the PA Program, as it includes all activities that are "undertaken by a community before, during, and following a disaster that are necessary to ... eliminate or reduce an immediate threat to life, public health, or safety; or eliminate or reduce an immediate threat of significant damage to improved public or private property through cost-effective measures." Examples of eligible activities include the establishment of temporary shelters and community service facilities, critical power generation, demolition of unsafe buildings, operation of emergency communications systems, and more. In addition to assistance that applicants, including PNPs, may receive for the emergency protection of their own eligible facilities, applicants may also receive grant assistance to provide emergency protective measures for the general public during the preparedness for or response to a disaster, such as volunteer fire departments for search and rescue operations. Regulations on emergency protective measures are expanded upon considerably by numerous policy documents, ranging from policies on the eligibility of building inspection costs to the eligibility of removing hazardous stumps.

SRIA specified that the President may reimburse both the base and overtime pay and benefits of permanent employees of state, tribal, and local governments for emergency protective measures. FEMA anticipates implementing this legislative change through the regulatory process, but has not done so as of the date of publication of this report. Under past regulations and policy directives, FEMA determined that, in general, only the overtime wages of permanent employees working for the state and local governments were eligible for reimbursement (that is, not the base pay and benefits or "straight time" of an employee). In contrast, FEMA had determined that the full cost of contract labor for this work is eligible for reimbursement. This change made by SRIA did not impact the treatment of wages for private nonprofits, and it continues to allow the reimbursement of overtime and hazardous duty pay of all state and local permanent employees conducting emergency protective measures, consistent with past FEMA policy.

FEMA implemented a novel use of emergency protective measures authority during the response to Hurricane Sandy. Emblematic of the potentially flexible nature of the underlying statute, FEMA designed the Sheltering and Temporary Essential Power (STEP) Pilot Program to restore the basic habitability of individual residences, thereby allowing people to "shelter" in their own homes as opposed to using other government-funded temporary facilities or receiving rental assistance for hotels and hotel-like accommodations. However, consistent with other PA assistance, the grant assistance provided by FEMA (a maximum of $10,000 per residence) was not provided directly to individuals, but rather was provided to eligible PA applicants such as local governments to reimburse them for the emergency protective measure work done on residences. In other words, the grant was provided to local governments, who in turn used the funding for essential repair to private residences (essentially passing through the assistance). In a rapid response audit of the STEP Pilot Program, the DHS IG found that the program was innovative but consistent with the authorities of the Stafford Act and "may substantially reduce the overall long-term costs associated with sheltering and disaster housing." However, the IG also noted that by the very nature of it being a pilot program, the STEP Pilot Program was more vulnerable to waste, fraud, and abuse. GAO reiterated these concerns, noting that FEMA did not require sufficient collection of data on recipients of STEP assistance that would enable FEMA to determine if these same recipients were receiving assistance through other FEMA programs in violation of program guidance and restrictions on the duplication of benefits. GAO, reporting on FEMA-provided data, found that as much as $418 million was spent through the STEP Pilot Program in the aftermath of Hurricane Sandy. FEMA is conducting its own internal review of the STEP Pilot.

Direct Federal Assistance

Given that a disaster can significantly exceed the management capabilities of communities, the Stafford Act grants the President broad authority to

direct any Federal agency, with or without reimbursement, to utilize its authorities and the resources granted to it under Federal law (including personnel, equipment, supplies, facilities, and managerial, technical and advisory services) in support of State and local emergency assistance efforts to save lives, protect property and public health and safety, and lessen or avert the threat of a catastrophe, including precautionary evacuations.

In addition, at the request of the governor or tribal chief executive, federal government agencies may be tasked with providing emergency work assistance whenever states, tribes, and local governments cannot provide the assistance themselves or through contract support. Collectively, this type of assistance is generally referred to as direct federal assistance . Prior to providing this assistance, FEMA requires grantees and applicants to agree to a number of conditions, including that the federal government is indemnified from damages and any claims against the federal government arising from the assistance provided.

Permanent Work

In the section of the Stafford Act authorizing permanent work assistance, it states that the President may provide financial assistance to grantees to help to restore eligible facilities

on the basis of the design of such facility as it existed immediately prior to the major disaster and in conformity with current applicable codes, specifications, and standards (including floodplain management and hazard mitigation criteria required by the President or by the Coastal Barrier Resources Act (16 U.S.C. 3501 et seq.)) shall, at a minimum, be treated as the net eligible cost of such repair, restoration, reconstruction, or replacement [italics added].

Therefore, eligible federal costs associated with restoring permanent facilities generally fall into three groups:

Costs associated with restoring the facility to its predisaster design. In regulations and implementing policy, FEMA has expanded the definition of predisaster design to mean that the repaired/replaced facility should have the same function and relative capacity of the previous facility. Costs associated with improvements made to the facility to bring it into conformity with current codes, specifications, and standards. These codes and standards must also be found to be "reasonable" by FEMA, be in effect at the time of the disaster, and be applied uniformly across the community prior to the disaster, among other requirements. Prior to 1999, FEMA considered eligible the costs associated with repairing/replacing facilities to meet a new building code, adopted after a disaster, so long as the project had not yet been approved by FEMA. This allowed grantees to adopt new standards and have the cost of meeting those standards shared by the PA Program. However, this policy was reformed and restricted by regulation when FEMA reassessed its legal interpretation of the statute. Costs associated with complying with the President's floodplain and hazard mitigation criteria or other federal laws, as explained later in the report.

Permanent work assistance is only available in areas receiving a major disaster declaration, and is not available to communities receiving emergency declarations or FMAGs. In order to receive permanent work assistance, eligible grantees must also have a FEMA-approved state or tribal mitigation plan in accordance with regulatory requirements. This restriction does not affect receipt of emergency work assistance through the PA Program.

The subcategories of permanent work (Categories C through G) refer to the types of facilities eligible for restoration. For example, utilities (Category F) can include water treatment plants and delivery systems; power generation and distribution facilities, including natural gas systems, wind turbines, generators, substations, and power lines; sewage collection systems and treatment plants; and communications. As shown later in Table 5 , CRS analysis of project data from FY2000-FY2013 indicates that approximately 65% of all PA projects were for permanent work. This accounted for 59%, or $30.2 billion, of the total federal obligations for assistance in the PA Program.

Hazard Mitigation Assistance for Permanent Work

Hazard mitigation, as defined in FEMA regulations, is "any cost effective measure which will reduce the potential for damage to a facility from a disaster event." Through its administration of the PA Program, FEMA has issued regulations stipulating that Regional Administrators have the authority to require certain hazard mitigation measures in addition to those required by local building codes and standards. The "hazard mitigation criteria required by the President" allowed by law is principally formulated by policy guidance issued by FEMA. This policy guidance explains the conditions by which FEMA will approve assistance for hazard mitigation measures (with examples provided). The criteria do not establish any fixed set of requirements on facility design in the manner of a supplement to local or state building codes. FEMA's criteria were updated in 2010 to reflect an increased emphasis by Administrator Craig Fugate to "maximize section 406 mitigation so as to reduce the risk of damage to the same facilities in future disasters." As shown later in Figure 6 , FEMA-supplied data indicate that $3.7 billion has been obligated for PA hazard mitigation assistance between FY2000-FY2013.

FEMA considers the authority to include hazard mitigation measures on projects to be discretionary, meaning in essence that "only FEMA has the authority to determine which hazard mitigation measures it will fund" and that "The Stafford Act and applicable regulations do not authorize State or local building officials or agencies to determine the amount of hazard mitigation funding FEMA will contribute to a project." With this discretion, FEMA has determined that additional hazard mitigation measures can only be applied to facilities that are being repaired (not replaced in full) and only to areas of the building that are damaged by the disaster.

In addition to the hazard mitigation measures required and allowed under FEMA's criteria, there are other forms of assistance provided by the PA Program that may have the effect of mitigating future disaster risks. First, there are those costs that are eligible to comply with federal floodplain management standards, namely building code standards related to the National Flood Insurance Program (NFIP) and Executive Order 11988, Floodplain Management , as most recently amended by Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Inpu t . For example, all facilities in the special flood hazard area that are being replaced or substantially improved with federal assistance must be elevated to or above the base flood elevation level. Second, there are those costs associated with bringing the undamaged parts of a facility into compliance with applicable codes and standards are generally referred to as "triggered costs" by FEMA. These triggered costs are eligible costs under the PA Program, so long as they are found reasonable, and could be considered as a hazard mitigation obligation through permanent work assistance as they may assist in improving the facility's design in a manner that will "reduce the potential for damage to a facility." Not all triggered costs may have this hazard mitigation benefit. For example, some triggered costs may be associated with increasing the accessibility of facility, which, though a potentially valuable improvement, may or may not reduce future risk.

Insurance Requirements for Permanent Work

Section 311 of the Stafford Act requires that applicants receiving assistance for permanent work projects obtain and maintain insurance on the facility to the extent that insurance is "reasonably available, adequate, and necessary to protect against future loss to such property," as determined by the President. This insurance requirement is implemented further through regulations and FEMA policy guidance. In order to determine whether insurance is "reasonably available," FEMA is required to defer to the appropriate state insurance commissioner to certify the type and extent of insurance that is reasonable for the facility and region. At a minimum, FEMA requires that facility owners obtain and maintain insurance that provides coverage equal to the amount of assistance being provided by the PA Program (i.e., equal to the cost of eligible damage to the facility) for the hazard type responsible for the damage (e.g., earthquake insurance for damage caused by earthquakes). Generally, a state insurance commissioner only becomes involved at the request of the applicant in certifying what is "reasonable" other than the standard set by FEMA. If facility owners fail to obtain and maintain insurance as required by FEMA, the facility is ineligible for permanent work assistance in a future disaster of the same hazard type (this restriction does not apply to emergency work assistance).

In all circumstances, the dollar amount of PA grant assistance provided by FEMA is reduced by the amount of eligible insurance coverage in force at the time of the disaster. This is required by legal restrictions against the duplication of benefits, where an applicant cannot receive assistance from the PA Program if an insurance policy will provide the same benefit. Therefore, in theory, proper implementation of the "obtain and maintain" insurance requirement reduces future PA Program costs by increasing the financial risk transfer to the insurance market (either public or private insurance). However, the DHS IG recently found past situations where this requirement has not been implemented adequately by FEMA and grantees.

The legal requirements related to insurance for facilities that are in an identified special flood hazard area are further increased in Section 406(d) of the Stafford Act. For these facilities, the dollar amount of permanent work assistance provided by the PA Program may be reduced by the maximum amount of available flood insurance, regardless of whether the facility had previously obtained that insurance. Generally, the amount of flood insurance available is limited to the maximum coverage amounts of a policy through the National Flood Insurance Program (NFIP). Thus, owners of facilities in these special flood hazard areas are strongly incentivized to obtain flood insurance pre-disaster, and essentially are penalized if they do not. Facility owners at risk of other types of disasters are not similarly incentivized to obtain their respective forms of insurance (e.g., facilities at risk of earthquake damage are not penalized for failing to carry earthquake insurance if not previously required to do so because of a past disaster).

FEMA has proposed a revision to existing policies on the insurance requirement. Among other changes, if implemented as proposed, the new policy would formally allow applicants (i.e., local governments, PNPs, etc.), to retain some or all of their risk through a self-insurance plan at the approval of FEMA, not just states. As of the date of this report, the new policy had yet to be implemented, though FEMA had already solicited public comment on the policy.

Administrative Cost Assistance

The Disaster Mitigation Act of 2000 (DMA 2000) revised the Stafford Act to direct the President to establish regulations for providing grant assistance to cover the management expenses of grantees and applicants. Since this directive, FEMA has had two distinct processes for providing this assistance for both the PA Program and the Hazard Mitigation Grant Program. For disasters declared before November 2007, grantees and applicants received a "sliding scale" reimbursement model, whereby they were given an extra amount of grant assistance for management costs based on a small percentage of the total assistance provided by FEMA.

After November 2007 (essentially starting in FY2008), FEMA established a new procedure. The costs for applicants and grantees are grouped into two categories:

Direct administrative costs (often referred to as DAC) are costs incurred by the grantee or applicant that "can be identified separately and assigned to a specific project." Indirect, management costs that a grantee or applicant "reasonably incurs in administering and managing the PA grant that are not directly chargeable to a specific project."

Eligible direct administrative costs are provided by FEMA directly on the grant award for activities such as travel expenses and preparing documentation related to the specific project. The amount provided is based on the actual cost of these activities, or an estimate of their cost. GAO recently audited the past and current process for providing assistance for these costs, and found that the change made in 2007 may have had several unintended consequences, including increasing the workload of grantees and applicants/subgrantees because of the complexity of DAC procedures. In GAO's recent analysis of FEMA data from FY2008 to FY2012, GAO found that direct administrative costs totaled approximately $107 million, about 0.77% of the total spending for the PA Program.

Management costs (or indirect costs) are provided directly to the grantee (the state or tribal government with the disaster declaration), not to the individual applicants in the communities. For indirect management costs, FEMA has established that it will provided a maximum of 3.34% of the federal share of projected eligible PA Program costs for major disaster declarations and 3.9% of the federal share of projected eligible program costs for emergency declarations. FEMA, through the Chief Financial Officer, works with the grantees to develop a "lock-in" amount of management costs within 12 months of the declaration, and that amount cannot exceed $20 million unless specifically exempted by FEMA. The amount "locked-in" may be less than the 3.34% or 3.9% cap for major disaster and emergencies, respectively. FEMA has produced guidance to applicants on examples of activities that should be classified as direct versus management costs.

Grantee Cost-Shares

There are no legal or regulatory limits on the amount of money that can be awarded through PA grants for any one project, applicant, or disaster declaration. So long as the project is otherwise eligible, FEMA will award funding (subject to sufficient funds being available in the Disaster Relief Fund for the project). The PA Program has a minimum federal cost-share of 75%, meaning that the maximum a grantee is responsible for is 25% of the total eligible amount of grant assistance, for both emergency and permanent work. The President may decide to increase this cost-share, often on the recommendation of FEMA under a regulatory assessment. The cost-share can also be adjusted by separate laws specifying the cost-share for specific disaster declarations. Under regulatory procedures, FEMA may recommend that the President increase the federal share up to 90% of the eligible costs for emergency and permanent work if the assessed damage from the disaster exceeds certain per capita damage thresholds. In addition, FEMA may recommend that the federal cost-share be increased to 100% for emergency work for a limited period of time after an incident, regardless of any per capita damage assessment. FEMA also has a specific policy for providing 100% cost-share on direct federal assistance. Cost-shares for individual disasters are established in the FEMA/state agreement which is completed as early as possible following an incident (and amended thereafter). A full discussion of cost-share adjustments for all Stafford Act assistance programs, including the PA Program, is provided in a separate CRS report.

In DMA 2000, the President was directed to establish regulations by which the federal cost-share for permanent work assistance (restoring facilities) could be reduced for facilities damaged on more than one occasion over a ten-year period by the same type of event (e.g., a flood, tornado, or earthquake) and only if the owner of the facility had failed to properly mitigate the facility to prevent repetitive damages. By law, the federal cost-share could be reduced to not less than 25% (meaning the federal share would be a minimum of 25%, and the grantee share no more than 75%). FEMA proposed a regulation for this reduction in 2009, but the regulation has yet to be finalized so the legal requirement is not in effect. In the proposed rulemaking, FEMA has interpreted the language of the statute as meaning that the cost share would be reduced on the third occasion that a facility is damaged by the same event within a ten-year window, not the second. FEMA has suggested that their current means of tracking projects and applicants across these multiple disasters and years does not allow the ready identification of these types of facilities, thereby preventing easy implementation of the cost-share reduction requirement. There is no reliable estimate for how many facilities—if any at all—would ultimately have their cost-share reduced because of this unenforced requirement.

Appeal Rights

The Stafford Act specifically provides a "right of appeal" to all grantees and applicants regarding any decision on the "eligibility for, from, or amount of assistance under this title [the Stafford Act]." The statute also establishes a timeline for the appeals process. Appeals must be filed within 60 days of being notified of the decision in question, and the federal official responsible for administering the appeal has 90 days to reach a decision after it is filed. This statute on an appeals process applies for every Stafford Act assistance program, and the PA Program in particular has expanded on it in regulations and administrative policies. The traditional PA appeal process has two stages of appeal; the initial appeal goes to the FEMA Regional Administrator where the disaster occurred and the second appeal goes to FEMA's Assistant Administrator for Recovery for a decision, which is final.

SRIA established a new alternative dispute resolution (ADR) procedure for PA Program assistance decisions related to a major disaster declaration. The history of this provision and possible rationale are described in another CRS report. Since SRIA, FEMA has implemented the ADR procedure in regulations, and created a new manual on the appeals process to explain the procedure. FEMA also maintains a database of appeals online, and has created a new Public Assistance Appeals Branch to centrally manage the appeals process.

Methods for Awarding and Disbursing Grant Funding

There are two general methods FEMA currently uses to determine the amount of, and award, grant assistance for both emergency and permanent work under the PA Program. FEMA will either award grants based on the estimated federal share of the total eligible cost for the project, or it will award grants on the federal share of actual eligible costs evidenced through documentation by the applicant/grantee. Succinctly, when a grant is provided by estimate, the applicant receives the full amount of assistance at the time the project is approved. The actual cost basis method reimburses the applicant for eligible expenses only as actual costs are documented by the applicant. When and how these methods are applied is described briefly below.

Estimated Cost Basis

Under current practice, FEMA issues grants based on the estimated federal share of eligible costs for PA projects when:

The project is eligible for simplified procedures as authorized in Section 422 of the Stafford Act (a "small project" in FEMA terminology); An applicant has decided to receive an in-lieu contribution through Section 406(c) of the Stafford Act (an "alternate project" in FEMA terminology); Certain projects that include significant improvements for the facility (an "improved project" in FEMA terminology); or An applicant chooses to use the alternative procedure for a permeant work, large project grant to be based on a fixed estimate. These types of PA projects are described in greater detail below.

Simplified Procedure "Small" Projects

Section 422 of the Stafford Act allows applicants to request that FEMA provide PA grants based on the federal share of the estimated total eligible cost of the project, as opposed to reimbursing on eligible actual costs. The statute establishes a cap on the size of projects allowed to use this method at $35,000, adjusted annually for inflation. For the period FY2000 through FY2013 this threshold ranged between $48,900 and $68,500. Providing this assistance via a federal estimate, as opposed to actual cost, is deemed a simplified procedure, though projects under this ceiling and using this method are often referred to by FEMA as small projects. The simplified procedure can be applied for any category of work assistance in the PA Program. In general, the simplified procedures are intended to reduce administrative expenses, for both FEMA and the applicant, and to speed up the delivery of assistance to the affected communities.

SRIA revised Section 422 to require the Administrator of FEMA to analyze and report whether it would be appropriate to raise the estimated cost ceiling on small projects, based on a number of considerations including how the threshold impacts "cost-effectiveness, speed of recovery, capacity of grantees, past performance, and accountability measures." FEMA produced a report analyzing this issue on January 29, 2014, one year after enactment of SRIA and in fulfillment of the legislative deadline. In addition to reviewing the size of the maximum estimated cost threshold for simplified procedures, FEMA also reviewed its minimum estimated cost threshold to receive grant assistance—currently set at $1,000. Through an analysis of past legislative intent on the size of small projects and a benefit-cost analysis, among other factors, FEMA recommended raising the eligibility for simplified Procedures to $120,000 for the maximum estimated cost threshold and $3,000 for the minimum estimated cost threshold. Based on past data from the PA Program, FEMA believes that the new small project thresholds will capture approximately 93% of all PA projects, though only 20% of the total costs of assistance in the PA Program. CRS analysis of project data from FY2000-FY2013 indicates that approximately 87% of all PA projects were small projects, and 9% of the total federal obligations for assistance in the PA Program. Therefore, the new thresholds may increase the number of small projects by roughly 6 percentage points, and the amount of assistance provided through simplified procedures by 11 percentage points. As required by law, following their analysis of the cost thresholds, FEMA established the new floor for the minimum project amount and a ceiling for small project eligibility by regulation. Thus, these new thresholds of $3,000 for a minimum project size, and $120,000 for the simplified procedure maximum, are effective as of February 26, 2014. By law, FEMA is also required to adjust the thresholds annually by the Consumer Price Index and to review the thresholds no later than every three years.

Validation Process for Small Project Estimates

As explained above, small projects are based on the federal estimate for the cost of the project. However, applicants are encouraged to produce their own estimates on the cost of small projects and provide them on project worksheets to FEMA for validation. This process is established in FEMA policy, not law or regulation, and is designed to "confirm the eligibility, compliance, accuracy and reasonableness of small projects formulated by an applicant." FEMA will review a 20% sample size of all small projects submitted by the applicant under a particular disaster declaration, but will individually review any that have identified special considerations, such as residing in the floodplain or historical preservation issues. FEMA does not have an established process to review whether the estimated cost of small projects ultimately reflects the final cost for completing the project.

In-Lieu "Alternate" Projects

The Stafford Act authorizes the President to provide certain applicants, at their request, an "in-lieu" contribution based on the amount of estimated cost of the eligible damage for the eligible facility. Under current law, this authority only applies to permanent work projects, and the in-lieu contribution/grant can be used to repair or build an existing or new alternate facility. An applicant may also use the in-lieu contribution to fund mitigation measures on another facility. Thus, FEMA refers to grants using this authority as "alternate" projects (not to be confused with alternative procedures). For example, if an elementary school was substantially destroyed after a disaster, a local government may decide that instead of rebuilding that particular school (and having FEMA reimburse them for the federal share of the eligible cost of doing so), the community may be better served by using that money to build a new high school or to better protect a nearby police station (perhaps because of shifting demographic needs in their population). The decision by an applicant to receive an in-lieu contribution for a different project needs to be in the interest of the public welfare, as determined by the applicant, and the new project should serve the "same general area that was being served by the originally funded project."

In order to estimate the size of the in-lieu contribution, FEMA uses a cost-estimating process called the Cost Estimating Format, or CEF, to estimate the eligible damages on the original project. In other words, for in-lieu contributions, the CEF helps identify the amount of assistance that would have been provided to the applicant had they elected to repair or replace the existing facility. The CEF tool was initially developed following the 1994 Northridge Earthquake in California, and was most recently revised in 2009. The CEF is not used to estimate the costs of small projects described previously.

Once the original project cost is estimated using the CEF, FEMA is obligated by law to reduce the amount of assistance contributed in-lieu to the applicant for the new project. For governmental applicants, the reduction is 10% of the federal share of eligible costs for repairing the existing facility (meaning FEMA provides 90% of the amount it would otherwise have provided), for private nonprofit applicants, the reduction is 25% of the federal share (meaning FEMA provides 75% of the amount it otherwise would have provided). The reduction of the federal share of assistance for public facility in-lieu projects was lowered from 25% of the eligible costs to the current 10% by P.L. 109-347 . FEMA applies the reduction to the federal share of the estimated eligible cost of repairing the current facility, not the estimated costs of new project or mitigation activities. This penalty on the in-lieu contribution can be considered a deterrent to applicants from recovering facilities in innovative ways as opposed to rebuilding and repairing the facility back to the way it was prior to the disaster.

Under the alternative procedures for the PA Program established by SRIA, the in-lieu contributions for different projects are not reduced by 10% for public facilities or 25% for private nonprofit facilities. In order to receive this benefit, FEMA requires that an applicant first accept and negotiate a grant based on fixed estimate of cost (this process is described later in the report).

FEMA reported to CRS that the authority for in-lieu contributions is used very rarely by grantees as a percent of the number of total permanent work projects (fluctuating year to year, ranging from 0.02% of permanent work projects in 2005 to 0.53% in 2008). FEMA also reports that certain types of facilities eligible for permanent work assistance are more likely to receive in-lieu contributions than others. For example, approximately 0.09% of roads and bridge projects (Category C) used in-lieu contribution authority versus 0.33% of building projects (Category E) from FY2000 to FY2014.

Improved Projects

Improved projects for permanent work assistance allow the applicant to significantly alter the pre-disaster design of the facility when repairing or replacing an eligible facility. So long as the facility serves the same intended purpose and function (e.g., it was a police station and remains a police station afterwards), an improved project does not have a reduced federal cost share as is required with an in-lieu contribution. However, FEMA only provides the federal share of estimated eligible costs for repairing/replacing the facility as it was designed originally, not for the additional "improvements" of the project. An improved project uses an estimated cost basis if it is either a small project or the costs for the improvement cannot by distinguished from repairing or replacing the facility to pre-existing design. If the improved project is estimated, the estimate of the original project, minus improvements, is developed using the CEF. Thus, for example, if an applicant wishes to significantly expand the capacity of a fire station by building it with three truck bays instead of its original two bays, FEMA will not provide assistance for the additional cost of the third bay. In this example, one assumes the costs for the third truck bay cannot be isolated from repairing the original two bays.

Alternative Procedure Fixed-Estimate Grants

As part of the new SRIA alternative procedures for the PA Program, FEMA is directed to issue grants to applicants for large, permanent work projects (facility repair and restoration) based on estimates of the eligible cost. By law, SRIA required the estimation procedure to include methods for:

Using a "fixed" estimate, meaning that after the estimate is agreed upon and set, the estimate will not change due to changes in the project or other factors. As implemented by FEMA, these estimated grants function much in the same way as an in-lieu contribution does, as once the amount is agreed upon, the grants "provide [applicants] with flexibility to repair or rebuild a facility as it deems necessary for its operations with no requirement to rebuild to pre-disaster design, capacity or function." Accepting the estimates of professionally licensed engineers provided by the applicant, so long as the estimate complies with FEMA regulations, policy, and guidance. As implemented, FEMA uses the CEF whenever the applicant does not provide an estimate. It also requires the applicant's professional engineer to either use "the CEF or a methodology and format consistent in the CEF's level of detail." Using an independent expert panel, at the applicant's request, to review and validate the cost estimate where the estimated cost is over $5 million. As implemented, FEMA has determined that it will pay for all expenses of the panel and the reviews.

SRIA also provided guidance on what happens if the estimated grant amount does not equal the final actual cost of the applicant's project. In other words, SRIA dictates what happens if the grant approved by fixed estimate provides more or less assistance than was ultimately determined to be eligible costs—often many years later. In instances where the amount provided by grant is less than the actual cost of the project, the applicant will pay the overages. In instances where the estimated grant amount is more than the actual project cost, FEMA will allow the applicant to use the extra funds for PA hazard mitigation activities or other activities improving future PA operations.

Actual Cost Basis

FEMA's policies state they currently use an actual cost basis for reimbursing grantees for large projects (currently over the $120,000 threshold) that are either emergency or permanent work. As with in-lieu contributions, the CEF tool is used by FEMA for actual cost projects to help anticipate the end expenditure for the project . This enables FEMA to anticipate future costs and outlays for PA projects, and obligate in advance the expected cost of the project. Though funds are obligated by FEMA at project approval, the funds are only incrementally disbursed as actual costs are documented by the applicant. Therefore, FEMA provides the full assistance amount to the applicant only after all eligible work on a PA project has been completed in its entirety. The process for reimbursing by actual costs is governed by regulations, and allows for the scope of the project to evolve as the project is commenced, so long as these changes are approved by FEMA. Changes to the scope of work are generally not allowed when FEMA issues a grant based on estimates of eligible costs.

Possible DMA 2000 Grant Estimating Procedure

As described above, large, permanent work project grants are currently awarded on an actual cost basis. Section 205(d) of DMA 2000 required the President to develop and implement a procedure for awarding these grants based on the estimates of the eligible cost. The President was directed to convene an expert panel on how costs should be estimated by FEMA, and to issue regulations implementing these cost estimation procedures. Although the expert panel convened twice and issued a report with recommendations for how the estimating procedure should be developed, final regulations implementing the statute have not been issued. However, in October 2013, FEMA proposed a final rule to implement the grant estimating procedure required by DMA 2000. As shown later in Table 5 , the impact on the PA Program of this proposed change in procedure is significant. CRS analysis of project data from FY2000 to FY2013 indicates that large, permanent work projects accounted for approximately 7% of all PA projects between FY2000-FY2013, but 53%, or $27.2 billion, of total federal obligations for assistance.

If and when this regulation becomes final, the only remaining category of PA projects that would be reimbursed on an actual cost basis is large, emergency work projects. CRS analysis of project data from FY2000-FY2013 indicates that large, emergency work projects accounted for approximately 6% of all PA projects, but 38%, or $19.6 billion, of total federal obligations for assistance. In addition, any large, permanent work project that is more than 90% complete at the time of estimation would still be reimbursed on an actual cost basis.

See the text box on how the status of the statutory changes made by DMA 2000 only become effective after these regulations are finalized.

If and when the DMA 2000 grant estimation regulation is finalized by FEMA, the possibility exists that there may be two different options available to applicants to receive grants based on estimates for large, permanent work projects. There could be the new, DMA 2000 method, and the alternative procedure method. The two options would only be available if FEMA were continuing the alternative procedures pilot, or had implemented the alternative procedure permanently, after the DMA 2000 grant estimation rulemaking is finalized. Likewise, FEMA may decide to incorporate some of the processes of the alternative procedures into the DMA 2000 grant estimation final regulation (or vice versa), eliminating some of the possible differences between the two methods. Table 2 provides a summary comparison of the two methods as they are currently designed.

Public Assistance Alternative Procedures Created by the Sandy Recovery Improvement Act

The Sandy Recovery Improvement Act (SRIA) reformed numerous Stafford Act assistance authorities, including the PA Program. The foremost change of SRIA to the PA Program was to create a new section of the Stafford Act, Section 428, establishing "alternative procedures" for the PA Program. Many of the changes made by SRIA were initially piloted under Section 689j of P.L. 109-295 , the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA).

This section describes how FEMA chose to implement the SRIA alternative procedures and discusses some of the decisions made in this implementation process that may be of interest to Congress. The changes made by SRIA to the PA Program are discussed in detail in the prior sections of this report and in a separate report by CRS.

Pilot Program Guidance

In SRIA, Congress specifically granted FEMA the authority to carry out the alternative procedures as a pilot program, and allowed FEMA to waive having to go through the normal rulemaking process so that it could expeditiously implement the procedures. Consequently, FEMA has established the Public Assistance Alternative Procedures (PAAP) Pilot Program, and provided the policies it uses to administer the PAAP Pilot Program through a series of guides and supplementary documents made available on its website. FEMA has generally split the PAAP Pilot Program into those new rules it is applying for alternative procedures on debris removal projects in emergency work (Category A projects) and large, permanent work projects (Categories C-G). It is unclear when, or if, FEMA intends to revise regulations on the PA Program, namely 44 C.F.R §206, to formally adopt the alternative procedures pilot program. SRIA suggests, but does not require, that FEMA ultimately adopt these policies in regulation.

It is beyond the scope of this report to analyze the PAAP Pilot Program guidance provided by FEMA in full. However, a few issues that may be of interest to Congress are discussed below.

Fixed Estimate Grants for Debris Removal

FEMA is not yet issuing grants by fixed-estimate for debris removal emergency work projects, as noted in PAAP guidance. This fixed-estimate procedure is being provided for large, permanent work projects. Though SRIA requires the Administrator to provide such a method as a condition of the alternative procedures, FEMA indicated to CRS that there is not currently an accurate enough method available to estimate the amount of debris following a disaster, and therefore the cost of removing the debris. FEMA also suggested that they have not received sufficient interest from grantees or applicants in using this alternative procedure. However, FEMA does currently use methods to estimate the amount of debris following a disaster in order to provide eligible grantees expedited payments of 50% of the initial estimate for full anticipated debris removal costs, as required by current law. Presumably, these estimation methods are considered insufficient for the purposes of making grants based on fixed estimates. In addition, in a past pilot program for debris removal procedures authorized by PKEMRA, FEMA did pilot a fixed grant estimating procedure for debris removal projects under $500,000. However, FEMA indicated that too few applicants used the grant estimating procedure to determine what impact, if any, it would have had on the efficacy of the assistance.

Selective Availability of Alternative Procedures for Applicants

SRIA did not directly specify how an applicant may choose to participate in the alternative procedures, only that it was at their discretion. Generally, FEMA has determined that an applicant may choose among some or all of the alternative procedures on a project-by-project basis, with certain limitations. This approach is more flexible than other methods FEMA could have used. FEMA could have, for example, decided that if an applicant wished to use alternative procedures on one of their projects, the applicant would need to use the same procedure on all of their projects, or decided that an applicant must use all features of the alternative procedures for a project instead of just some of them. Not unexpectedly, early statistics provided to CRS by FEMA on the usage of alternative procedures by December 2014 indicate that some alternative procedures are considerably more popular with applicants than others (e.g., relatively few applicants are recycling debris while many more are using the sliding scale for accelerated debris removal).

Applicability of Alternative Procedures to Past Disasters

SRIA explicitly provided that FEMA may approve alternative procedures for PA projects for disasters declared after date of enactment, and that it may apply alternative procedures for PA projects "for which construction ha[d] not yet begun on the date of enactment." In its PAAP Pilot Program guidance for permanent work projects, FEMA makes available alternative procedures for any major disaster declared on or after May 20, 2013, and states it may also approve subgrants before then if construction has not begun. FEMA does not specify further how one defines when construction begins (e.g., before or after any demolition occurs, before or after the metaphoric first shovel of dirt, etc.). However, FEMA has approved alternative procedures for permanent work projects in Louisiana for major disaster declarations issued for Hurricanes Katrina and Gustav (in August 2005 and September 2008, respectively). More recently, many more projects have been approved or are under review with alternative procedures stemming from Hurricane Sandy, especially in New York, all of which pre-date the start of the pilot on May 20, 2013.

In its PAAP Pilot Program guidance for emergency work debris removal projects, FEMA has established a pilot "performance period" for disaster declarations between June 28, 2013, and June 27, 2015, when the pilot would end. Notably, this period does not include disaster declarations for Hurricane Sandy (made around the end of October, 2012), and began approximately six months following enactment of SRIA. FEMA states that it will conduct an analysis of the effectiveness of the alternative procedures after the end of the pilot and determine whether to discontinue the pilot, extend it, or issue regulations making it more permanent. The PAAP Pilot Program guidance for permanent work does not contain an explicit end date for the pilot.

Summary Analysis of Obligations for the Public Assistance Program

The following section provides analysis of PA Program spending for major disasters in the period FY2000 through FY2013. FY2014, and early data from FY2015, were excluded from this analysis because these more recent data are subject to considerable modification as the recovery from major disasters advances and more PA projects are approved or have their obligations revised. This could also affect actual obligation levels for early fiscal years to a lesser degree. The data for this analysis were derived from FEMA datasets, including publicly available data that can be accessed through the OpenFEMA website. Additional information on these data, as well as important considerations regarding their reliability, is available in Appendix B .

Appropriations for the Public Assistance Program

The PA Program is financed from the Disaster Relief Fund (DRF), which typically receives no-year appropriations and is the primary funding source for Stafford Act disaster assistance authorities. Appropriations to the DRF do not separately identify funding amounts for the varied programs authorized by the Stafford Act, thus the PA Program has not historically received a distinct appropriation. Appropriations to the DRF as a whole, from FY2000 through FY2013, are shown in Table 3 .

Aggregate Spending on Public Assistance

The PA Program has consistently been the largest source of federal obligations from the DRF. For the period FY2000 through FY2013, more than 90% of all major disaster declarations made through the Stafford Act included provision of assistance through the PA Program. In addition, obligations for PA grants accounted for 47% of total DRF obligations for major disaster declarations. As shown in Figure 1 , this is the largest activity funded from the DRF during that time.

During this time period, the percent of overall DRF obligations attributable to PA grants ranged from a low of 36% in FY2005 to a high of 66% in FY2013. Figure 2 displays both total federal obligations for PA grants during this period, as well as the percentage of all DRF obligations spent on these grants. Federal obligations for PA grants for major disaster declarations ranged between $0.37 billion and $17.1 billion per fiscal year, for an average annual obligation of $3.9 billion. This obligation total does not include the funding provided by state and local governments as part of their cost-share requirement. For most of the declarations during this period, the federal government funded 75% of PA costs; however, for certain declarations the cost-share was increased through either FEMA's administrative discretion or through statute. During this period, FY2005 had the largest amount of PA obligations in a single FY. This is largely the result of Hurricane Katrina, which accounted for more than $14.8 billion in PA grants for Louisiana and Mississippi alone. In addition, current figures for FY2013 are projected to increase as additional projects are processed for disaster declarations, especially for the declarations for Hurricane Sandy. While major incidents like Hurricanes Katrina or Sandy can lead to PA obligations in the billions, the average amount of assistance provided per major disaster declaration for PA grants is roughly $69.8 million. For more than half of the major disasters declarations in this time period, the federal obligation for PA grants was less than $10 million.

Public Assistance Spending by Type of Work, Category, and Project Size

Individual project worksheets for the PA Program are made publically available by FEMA, with data beginning in FY1998. These worksheets provide information related to both the total project amount, which is an estimate developed early in the process, and the amount that was ultimately obligated from the DRF. In addition, these worksheets identify the category of the projects (e.g., Category A: Debris Removal) and whether the project is classified as large or small, which has implications for administering the grant. Due to the data entry process used by FEMA and the increasingly prevalent practice of grouping many projects on one worksheet, each worksheet in this dataset does not necessarily equate to a discrete project in a lay sense of the word. Nonetheless, these data can be used to measure obligations within the program along key variables of interest.

Total spending in the PA Program for major disaster declarations can be divided into three broad groups: emergency work, permanent work, and grantee management costs. For the period FY2000-FY2013, permanent work accounted for more than 57% of all federal obligations for the PA Program. Emergency work was 40% of the total and grantee management costs were 2%. Figure 3 displays these three groups, as well as the subcategories identified by FEMA.

Federal obligations for permanent work have varied greatly over time. In FY2005, obligations for subcategories C through G exceeded $11 billion, while for 10 of the 14 fiscal years during this period obligations were below $2 billion each year. Within this group, obligations for public buildings were the largest. In FY2005, FY2008, and FY2013, obligations for public buildings (Category E) alone were in excess of $1 billion each year. Obligations for emergency work were closely divided between debris removal (Category A) and emergency protective measures (Category B). Category A accounted for $9.8 billion between FY2000 and FY2013, while Category B accounted for 11.3 billion. The annual federal obligation for permanent work and emergency work projects is presented in Figure 4 . The data in this figure are derived entirely from the publically available project worksheet data and have not been adjusted for inflation.

As discussed previously, PA Program obligations vary considerably from one declaration to the next. Many of the most well-known disasters, such as Hurricanes Katrina and Sandy, have federal PA Program obligations in the billions of dollars. Conversely, more than half of all major declarations had obligations less than $10 million per disaster. Table 4 below demonstrates this difference for each category of work. In this table, all declarations have been divided into quartiles based upon the total amount of PA Program obligations for emergency and permanent work (costs for grantee management were excluded). As the table shows, there is a significant decline in obligation amounts for every category between the most costly disasters and the next quartile. Therefore, the largest 25% of disasters account for 91.3% of the federal obligations for the PA Program.

Figure 5 displays the distribution of obligations between large and small project worksheets across the PA Program. Within the PA Program, the vast majority of federal obligations are for large projects, which are currently those projects above $120,000. For the period FY2000 through FY2013 the small project threshold ranged between $48,900 and $68,500. During this time, more than 91% of all federal obligations for PA projects were for large projects. Within each category, small projects accounted for no more than 10% of all federal PA obligations, with the exception of Category C. For this category, which includes repairs to non-federally owned roads and bridges, 34% of all federal obligations were for small projects.

While federal obligations for the PA Program are primarily for large projects, small projects account for a much higher number of individual project worksheets. The FEMA dataset includes more than 450,000 individual project worksheets for small projects from FY2000 to FY2013. As shown in Table 5 , small projects account for 87% of the total number of project worksheets. Further, there are more individual projects for permanent work then for emergency work during this period.

Obligations for Private Nonprofit Facilities

As discussed previously, many different types of private nonprofit (PNP) facilities are eligible for assistance within the PA Program. For the period FY2000-FY2013, $6.6 billion was obligated by FEMA to PNPs, with the highest spending in FY2005 ($2.0 billion) and FY2013 ($1.4 billion). During this time, more than 77% of all PA obligations for PNPs were for public buildings and public utilities (Categories E and F).

More than 8,400 different PNPs received PA grant assistance between FY2000 and FY2013. Many of the largest individual projects for PNPs involved universities, hospitals, and electrical cooperatives. For example, Midwest Energy, Inc. received close to $60 million in federal PA Program funding following severe winter storms in Kansas in 2007 and the Memorial Hermann hospital system in Texas received more than $100 million following Tropical Storm Allison in 2001. In addition, many volunteer fire departments receive federal grants under the PA Program to carry out emergency protective measures (Category B) after an incident. These grants are often less than $10,000. Overall, the average obligation per PNP, per disaster, was $566,000. Many applicants received grant assistance under multiple declarations during this period and many of the PNPs received assistance for more than one project worksheet within a disaster declaration.

Obligations for Hazard Mitigation within the PA Program

Section 406(e) of the Stafford Act provides FEMA with the discretionary authority to fund hazard mitigation activities on permanent work projects as part of the PA Program. For every year between FY2000 and FY2012, the amount of mitigation funding provided with this authority was less than $300 million, often much lower. However, spending increased greatly in FY2013 as the result of two major disaster declarations following Hurricane Sandy: DR-4085 (New York) and DR-4086 (New Jersey). These two disasters alone account for more than $2 billion in PA mitigation expenses. The vast majority of this funding was used for public building and public utility projects (Categories E and F, respectively). Excluding the Hurricane Sandy declarations for New York and New Jersey, federal obligations for PA mitigation assistance between FY2000 and FY2013 was $1.7 billion. Figure 6 below displays total PA mitigation expenses over time, with the two largest declarations for Hurricane Sandy in light blue.

For projects that included funding for PA mitigation, these expenses accounted for nearly 38% of the total costs of the PA project on average. However, this figure was largely driven by PA mitigation expenses in New York and New Jersey following Hurricane Sandy. For these projects, PA mitigation expenses accounted for approximately 50% of total project cost. When these two declarations are excluded, the overall project cost attributable to PA mitigation falls to 29% of the total. Due to limitations with the data provided, the above analysis does not include

costs associated with bringing facilities into compliance with existing standards; "triggered" costs bringing undamaged portions of the facility into compliance with standards; or costs associated with complying with floodplain management standards.

Inclusion of these costs may increase the amount of general hazard mitigation assistance provided by the PA Program considerably if accounted for in other analysis.

Considerations for Congress

There are numerous policy issues that Congress may consider when evaluating the PA Program. The following sections of this report discuss select issues that may arise in congressional oversight of the PA Program.

Balancing the Level of Statutory Versus Executive Branch Guidance for the PA Program

The provisions of the Stafford Act that grant the PA Program's authorities are, in many respects, broadly worded statutes that allow the President, and FEMA as the delegated agency, to define the conditions of disaster assistance. It is reasonable for FEMA to develop complex policies and procedures for implementing the program when the law is silent on key definitions (such as what constitutes a re pair or replacement project) or has left it to the administration's discretion when to provide assistance (such as when debris removal assistance can be provided on private properties). For more on these examples of how FEMA has interpreted Stafford Act provisions through regulation and policy, see the Text Box .

That Congress has granted this responsibility is not unique to the Stafford Act or FEMA, but such administrative discretion to implement the statute has resulted in policies and regulations that were revised or reversed by Congress. Most recently, for example, Congress enacted in SRIA a change to the treatment of eligible labor costs for emergency protective measures, revising previous policies established by FEMA. Also in SRIA, Congress directed that FEMA review, update, and revise its regulations in totality for when FEMA recommends to the President that assistance is provided to individuals and households through Section 408 authority of the Stafford Act. Congress has also passed laws, such as P.L. 109-308 , the Pets Evacuation and Transportation Standards Act (PETS Act) of 2006, that further specified the scope of Stafford Act authorities when FEMA's existing interpretation of its authorities limited the possibility of providing that assistance.

Consistent with past precedents, Congress may review current FEMA policies and procedures for the PA Program, and, when desired, override the policies through further clarification in law or submit formal legislative recommendations on policies in committee or conference report language. Likewise, Congress may also decide to codify existing policies without revising them, thereby assuring that they cannot be changed without legislative action.

Evaluating Key Prospective Changes to the PA Program

The PA Program is constantly evolving through revisions to administrative policies for the program. These policy documents, generally referred to as the 9500 Policy Series by FEMA, supplement interpretations of the Stafford Act made in PA Program regulations. As established by Section 325 of the Stafford Act, these policies are required to be shared for public comment. In practice, FEMA provides the policies on their website and posts a notice in the Federal Register identifying that they are considering creating a new PA policy, or revising an existing policy, that clarifies its regulations. FEMA will also solicit feedback through outreach mechanisms such as weekly external affairs newsletters and through various emergency management associations. FEMA's review of these policies does not always include certain characteristics, such as cost-benefit analysis and paperwork reduction reviews, that is common for federal agencies, as outlined in the Administrative Procedure Act (APA).

Within FEMA's existing policy revision process, Congress may wish to comment on and evaluate the proposed policy changes, hold oversight hearings and briefings on the changes, or provide input directly through other communications. Congress may also consider changing the policy revision process itself, possibly by amending Section 325 of the Stafford Act, to (among other options):

Create a formal reporting requirement to Congress prior to the finalization of PA policies, possibly to include requirements for explanatory briefings regarding the nature and intent of the planned policy; Revise the existing requirements in law to expand the types of interim policies FEMA is required to seek consultation from stakeholders; Establish conditions for whether a policy should undergo a more extensive APA or APA-like procedure.

Conversely, Congress may determine the existing PA Program policy revision process is unnecessarily cumbersome and inhibits rapid and necessary changes to the administrative practices of FEMA. If so, Congress may consider eliminating some or all of the existing requirements.

In addition to the generally constant evolution of FEMA PA Program policies described above, there are two major potential changes currently underway for the PA Program. These are discussed below.

SRIA Alternative Procedures Pilot Program

SRIA reformed the PA Program primarily through the creation a new section of the Stafford Act establishing alternative procedures for the PA Program. As described earlier in this report, FEMA created the Public Assistance Alternative Procedures (PAAP) Pilot Program to implement these alternative procedures. As described in law, the purpose of the PA alternative procedures is to:

(1) reduc[e] the costs to the Federal Government of providing such assistance;

(2) increas[e] flexibility in the administration of such assistance;

(3) expedit[e] the provision of such assistance to a State, tribal or local government, or owner or operator of a private nonprofit facility; and

(4) provid[e] financial incentives and disincentives for a State, tribal or local government, or owner or operator of a private nonprofit facility for the timely and cost-effective completion of projects with such assistance reducing federal costs for providing assistance.

SRIA also requires the DHS IG to assess the effectiveness of the alternative procedures for permanent work projects. Of note, the IG's report is not specifically required to assess the portion of the alternative procedures for debris removal assistance, though the IG retains the standing authority to review and audit these grants. By law, among other elements, the IG's report is required to contain assessments of whether the alternative procedures:

Increased the speed of disaster recovery for the community; Used estimates that were accurate (presumably to mean accurate to actual costs); and Should be continued, with any recommendations for changes to them in future legislation.

The report is to be issued three to five years following enactment of SRIA (so between January 2016 and January 2018) and is to be provided to the committees of jurisdiction for the Stafford Act (the Committee on Transportation and Infrastructure in the House, and the Committee on Homeland Security and Governmental Affairs in the Senate).

In a committee report requirement accompanying the Department of Homeland Security Appropriations Act, 2015 ( P.L. 114-4 ), Congress has also directed FEMA to produce quarterly reports on implementation of the PAAP Pilot Program, especially for permanent work. These quarterly reports are instructed to include FEMA's assessment of "challenges and recommendations, including proposed authority modifications" to help the Pilot Program achieve its legislative objectives. In addition, the quarterly reports are to contain, among other items, a financial summary of all permanent work projects in the PAAP Pilot Program and descriptions of projects over $50 million.

The issuances of the IG's report and FEMA's quarterly reports on the PAAP Pilot Program may provide Congress with direction on how it could further revise the Stafford Act to improve the PA Program. Prior to or after the issuances of these reports, congressional oversight of the implementation of the alternative procedures may focus on a number of factors, including whether

The PAAP Pilot Program has accomplished the four goals of the procedures as intended in law; The Pilot Program guidance produced by FEMA has properly construed the policy intentions of Congress in the enacting legislation, or any new intentions of the current Congress; Communities are receiving enough information and assistance from FEMA to participate fully in the Pilot Program, and if the participation period for the Pilot is long enough; and Both the federal government and applicants have similar initial opinions on the benefits/costs of the alternative procedures. For example, parties may disagree on the quality of fixed-estimates for large, permanent work grants, or the effectiveness of incentives for increasing the speed of debris removal.

Grants Based on Estimates for Large, Permanent Work Projects

FEMA is in the process of finalizing a rulemaking that would require grants based on estimates for large, permanent work projects, in fulfillment of a legal requirement of DMA 2000. The DMA 2000 grant estimation procedures were originally developed and approved by an expert panel in 2002. Conservatively, if FEMA had adopted a final rule by October 2006 implementing the estimating procedure, a full four years after the expert panel released its final recommendations (and six since passage of the law), the President would have been required to submit a review of the estimating procedures and the CEF in October 2008, and the expert panel would have submitted a review of the "appropriateness" of the cost estimating procedures in October 2007, 2009, 2011, and 2013. In short, had the rule been implemented in a timelier manner, the DMA 2000 grant estimation procedures may have evolved through the legally required reviews in ways that are currently unaccounted for by FEMA. FEMA notes this possible issue in their proposed rulemaking, stating that they "contacted individual panel members to re-validate the 10 percent threshold recommendation" but did not "request that the Panel validate any other portion of its recommendation, as the other portions of the recommendation are not meaningfully effected [sic] by the time that has elapsed." However, given the length of time since the passage of the initial DMA 2000 legal requirement and the expert panel's recommendations, Congress may consider whether to request or require the President to reengage with the expert panel before finalizing the CEF rulemaking.

In addition, Congress may broadly consider whether it still agrees with the development of the DMA 2000 grant estimation procedure. Since passage of DMA 2000, Congress enacted SRIA which also established alternative procedures for the issuance of fixed-estimate grants for large, permanent work projects. Table 2 highlights the some of the major differences between the SRIA alternative procedure methods and the DMA 2000 methods. Congress may consider if some of the differences applied in law for SRIA's grant estimating alternative procedures should apply to the DMA 2000 grant estimating procedures, and vice versa, and whether either estimation method remains necessary to be authorized in the presence of the other. For example, Congress may evaluate whether large, permanent work grants should be issued as fixed estimates, as with the alternative procedure, or with a floor and ceiling threshold, as with the DMA 2000 procedure.

As a reminder, the DMA 2000 procedure is not currently active or available to applicants, and would not be available until after FEMA implements a final rulemaking. Thus, if Congress wishes to do so, Congress could prevent, delay, reform, or endorse the implementation of the DMA 2000 grant estimating procedure before it is implemented.

Improper Payments, Fraud, Waste, and Abuse in PA Program

As with any grant program, the PA Program is at risk for making improper payments, and experiencing fraud, waste, and abuse. The DHS IG has a dedicated component office called the Office of Emergency Management Oversight (EMO) that frequently produces, among other products, audits with recommendations for recouping improperly provided funds for the PA Program. The IG's audits also make recommendations for improving PA Program management, and generally help ensure funds are appropriately provided and spent. These audits are summarized annually in "capping reports" on the PA Program and HMGP assistance. The IG reported to CRS that for FY2009 to FY2013 they questioned the expenditure of over $1.9 billion in PA assistance, and recommended that over $387 million of these funds be put to better use. However, of those amounts, FEMA recovered only 13% of questioned costs (about $245 million), and 64% of the funds that could be put to better use (about $249 million).

FEMA has recently established a new "Recovery Audits Unit" within its Recovery Directorate (the element responsible for managing the PA Program) that may improve future performance. This new unit was established as a result of an internal FEMA review of all IG and GAO audits issued between 2011 and 2014. According to FEMA's internal review, "an overwhelming majority of the audits and recommendations applied to the PA Program. Of the 202 audits analyzed, 188 (93.1%) applied to PA, and 659 recommendations out of 680 (96.9%) also applied to PA." In addition, DHS IG has recently begun conducting more "proactive" audits of the PA Program by deploying in the initial phase of a disaster to prevent misuse of funds. This approach has already resulted in several published audits that help applicants by giving them "the opportunity to correct noncompliance with Federal regulations before they spend the majority of their funding." Congress may evaluate both FEMA's new Recovery Audits Unit and DHS IG's more proactive approach to determine if these changes will have an appreciable effect on the management of the PA Program. In addition to other recommendations produced by the IG, GAO, and other entities, Congress may also consider the following issues for improving PA Program assistance.

Management Cost Assistance

As discussed previously, the Stafford Act authorizes assistance to help pay for expenses a grantee "reasonably incurs in administering and managing the PA grant that are not directly chargeable to a specific project." The amount of assistance provided is set by FEMA regulations and policies. Under policy guidance, FEMA has not "established any minimum or maximum for what constitutes a reasonable amount" that a grantee should pass through of the management award to subgrantees/applicants (i.e., how much should be shared by the state/tribe to a local government/PNP). In an audit, GAO found that few, if any, grantees passed through any amount of the management assistance to subgrantees, a finding confirmed by FEMA to CRS. In theory, funds for administrative expenses can be used to improve the overall management of PA projects, eliminating some improper usage of the overall assistance. Congress may consider whether

Existing or additional assistance for administrative costs could be provided to grantees with the specific requirement that the assistance be used to prevent misuse of PA Program funds; Existing or additional management assistance should be given directly to subgrantees, regardless of grantee decisions as to whether or not assistance should be passed through to applicants; FEMA should reestablish its earlier, pre-2009 method of providing management cost assistance, or if FEMA should be directed to develop a new method irrespective the current and past models.

Limitations of Current PA Program Data for Congressional Oversight

One of the challenges revealed during CRS's research on the PA Program was the limitations of existing data on PA projects. Some of these limitations are described in Appendix B . For example, as noted earlier in the report, FEMA does not have a ready method of implementing legal requirements to reduce cost-shares on repetitively damaged facilities, as established by DMA 2000, due to the quality of data retained and tracked from disaster to disaster, project to project. In addition, GAO noted that the emergency protective measures Sheltering and Temporary Essential Power (STEP) Pilot Program implemented after Hurricane Sandy may have inadequately collected data on recipients to prevent duplication of benefits. More holistically, CRS research into the program indicates that certain policy issues may be difficult, if not impossible, to evaluate properly because of project data limitations. For example, FEMA is unable to readily identify or determine how many PNPs first apply to the SBA loan program before applying for grant assistance from the PA Program, and the amount of assistance they receive from SBA. This information would be useful, for instance, in determining the financial assistance needs of PNPs following disasters and whether both (or either) assistance programs are required. As another example, it would be difficult, if not impossible, to identify if facilities that had received PA mitigation assistance in the past had their damage reduced in a future disaster per the intended purpose.

Congress may consider overseeing current and future initiatives of FEMA to improve the quality and use of program data collected and maintained by FEMA. For example, in 2011, FEMA established a program called "FEMAStat" to provide empirical, data-based reviews of FEMA's performance. FEMAStat, and other data-based initiatives, may lead to improvements in the quality of data collected by the PA Program, and in turn the effective use of that data in policy analysis. Congress may wish to oversee the extent to which initiatives such as FEMAStat are being implemented, their effectiveness, and whether they are improving, or perhaps worsening, the PA Program.

Congress may also wish to evaluate the quality of FEMA's database systems for PA Program and other grant program information. Congressional oversight could involve, for instance, a review of the funding for these databases, and whether additional funding is required to improve or develop new database systems. As a cautionary note, FEMA has a number of legacy database systems in addition to its current system, called the Emergency Management Mission Integrated Environment (EMMIE) which was deployed full-time in 2008. As highlighted by the IG, the existence of multiple database systems can inhibit the tracking of information, such as insurance requirements, across disasters. Therefore, a new database system may not necessarily be beneficial if not properly designed. The existing system may be able to be improved (or used more effectively by field staff) to account for issues Congress may reveal in oversight of FEMA's database systems.

Expanding or Restricting Permanent Work Program Eligibility

As has been done in past legislation, Congress may wish to evaluate the types of applicants that are currently eligible for the PA Program. In doing so, it may consider expanding or restricting the scope of eligibility in a number of ways, possibly through the expansion/restriction of eligibility for certain nonprofit facility types, or the expansion of the PA Program to include private sector facilities.

Private Nonprofit Eligibility

As authorized in the Disaster Relief Act of 1970, the PA Program was only allowed to provide permanent work assistance to public facilities. P.L. 92-209 was passed quickly thereafter, in 1971, to provide limited assistance beyond public facilities, allowing for assistance to be provided for private nonprofit medical facilities. When considering P.L. 92-209, Congress recognized that

the need to protect our national medical care delivery systems requires that the same assistance should be authorized for privately owned, nonprofit medical care facilities—and their related administrative and support facilities—as present law provides for those which are publically owned.

Since then, namely in the Disaster Relief Act of 1974 and in the Disaster Relief and Emergency Assistance Amendments of 1988, permanent work assistance has expanded to include certain PNPs with similar reasoning. DMA 2000 restricted this eligibility somewhat by establishing that a subset of eligible PNPs must first apply to the SBA for assistance before getting assistance from the PA Program.

As described earlier in the report, the PA Program currently provides assistance only to governmental entities and certain PNPs. Congress may consider whether the eligibility of PNPs is appropriately scoped, or if it could be more restricted/expanded. For example, Congress may evaluate whether the current standards are too inclusive/exclusive for the types of PNPs that

Provide an "essential service of a governmental nature to the general public," and therefore meet minimum requirements of eligibility. For example, entities such cemeteries may be excluded by this definition, while community arts centers are included; Are allowed to apply directly to the PA Program for immediate grant assistance instead of first applying to the SBA loan program; and Can receive assistance if their facilities are "dedicated to or primarily used for religious, political, athletic, recreational, or vocational purposes ... " such as houses of worship.

Privately Owned Facilities

Under past and current law, private entities, such as owners of private infrastructure facilities and individual homeowners, are excluded from PA Program assistance for both emergency work and permanent work. For emergency work, some assistance is granted indirectly to private entities, via eligible public sector or PNP applicants, namely for debris removal that is in the public interest and for emergency protective measures for the immediate preservation of life and property. For permanent work, there is a restriction against repairing and restoring private facilities, though private homeowners may receive grant assistance through separate provisions of the Stafford Act.

Congress may wish to evaluate whether it is appropriate to continue the exclusion of private infrastructure facilities for permanent work assistance. Following completion of this potential evaluation, revisions to the PA Program may not be necessary if Congress determines that

It is appropriate to continue to exclude private facilities from PA Program assistance for a variety of policy reasons (e.g., concerns over the moral hazards produced by the assistance, concerns that it would unduly influence capital markets, concerns that it assistance is too costly, etc.); or Any unique needs of private infrastructure can be provided by other governmental assistance programs (e.g., SBA disaster loans or assistance from the Economic Development Agency); or Any necessary private infrastructure assistance can be provided for in situational-dependent authorizations either immediately before or after disasters, in the PA Program or other assistance programs, primarily HUD's Community Development Block Grant (CDBG) Program.

However, in an evaluation of PA Program eligibility, Congress may determine that the existing eligibility should be expanded to authorize assistance to private facilities. If so, Congress may then consider whether private facilities require grant or loan assistance, or some combination of the two (for example, providing grant assistance up to a certain amount, and then loan assistance thereafter). As has been done for PNPs, Congress may also consider whether only certain private facilities should receive PA Program assistance, such as those determined by the President or Secretary of DHS to be critical infrastructure. Here, the policy argument for providing assistance through the PA Program is perhaps strongest. As defined by statute, infrastructure is considered critical if the "incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters." However, Congress may consider the definition of critical infrastructure to be not inclusive enough, as what is critical to any one community may not be critical to the nation (e.g., a local factory). Additional restrictions on the assistance to private infrastructure may also be considered, such as mandating that owners and operators commit to obtaining and maintaining sufficient insurance or structurally mitigating all of their facilities from similar consequences in future disasters.

Hazard Mitigation Within the PA Program

As discussed earlier, hazard mitigation assistance can be provided as part of a permanent work project to repair an eligible facility in the PA Program. This assistance is provided to reduce future risk to the facility, and is provided in addition to repairing the facility to current codes and standards. As shown earlier in Figure 6 , between FY2000 and FY2013, FEMA obligated approximately $3.7 billion in PA hazard mitigation assistance. Following Hurricane Sandy, for example, FEMA has approved over $2 billion in PA hazard mitigation assistance, including $589 million for the NYU Langone Medical Center.

Other programs authorized by the Stafford Act, notably the Hazard Mitigation Grant Program (HMGP) authorized by Section 404, also specifically allow the President to provide assistance for hazard mitigation measures that are cost effective and substantially reduce future risk. See Table 6 for a summary regarding the differences between the assistance provided by the HMGP and PA hazard mitigation assistance. Of note, every dollar of PA hazard mitigation assistance subsequently increases the amount of federal assistance provided through the formula described in statute for HMGP assistance. Additional HMGP assistance provided as a result of PA hazard mitigation expenditures between FY2000 and FY2013 could be as low as $555 million, but could be as high as $647 million or more. Other Stafford Act programs, such as the Predisaster Mitigation Grant Program, are also independently authorized and appropriated for by Congress. Therefore, Congress may consider whether there is a separate policy need for assistance in the PA Program given these other programs, or if the various mitigation authorities can be more closely aligned in statute or through FEMA's administrative policies.

Separately, Congress may also wish to review the current criteria and policy FEMA uses to provide hazard mitigation assistance. Congress may evaluate numerous issues, including whether

The methods used under FEMA's criteria for determining if mitigation measures will lessen the costs (societal and financial) of future disasters; A reform to PA mitigation assistance made for the SRIA alternative procedures should be made permanent or revoked. For normal projects , PA mitigation funds are not available for alternate projects or improved projects that involve relocation or facility replacement at same site . In SRIA alternative procedures , FEMA is allowing PA mitigation assistance on these projects, so long as it is approved and included in the fixed-estimate grant; and There should be a cap on the total amount of PA mitigation assistance that can be provided per project. Current policy does not formally cap the amount of mitigation assistance, though there are additional restrictions on PA mitigation assistance over 15% of the total project cost, and then again over 100% of the project amount. As previously discussed, CRS analysis of data provided by FEMA indicates that PA mitigation assistance accounts for 38% of the total federal obligation for projects with any mitigation assistance.

Congress may also wish to evaluate if assistance should be provided and/or required by the PA Program for mitigation measures not otherwise required by the local and state building codes and standards (i.e., in effect, boosting those standards specifically only for the PA project). It could be argued, for instance, that if a hazard mitigation measure is considered necessary by FEMA's criteria, it could be a requirement of the community's standards. Correspondingly, Congress may consider whether the PA Program should begin allowing as an eligible cost those measures associated with repairing/replacing facilities to improved codes and standards implemented post-disaster by grantees, as was done pre-1999.

Implementing Executive Order 13960 for the PA Program

As described in another CRS product, the President recently revised E.O. 11988, Floodplain Management , with the issuance of Executive Order 13960 , Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input . Implementation of E.O. 13960 will primarily involve the development and application across the federal government of a new Federal Flood Risk Management Standard (FFRMS). Succinctly, E.O. 13960 and the FFRMS could ultimately revise federal regulations on federal investment in floodplains, and the amount of hazard mitigation that is required to protect those investments from future flooding. In the context of the PA Program, the current requirements that may be revised are found in regulations on floodplain management. It is too early to know exactly how the PA Program will be affected by the FFRMS, but it seems likely that the FFRMS will, at a minimum, increase existing requirements by requiring additional "freeboard" for any facility that is being replaced as a permanent work project (one that exceeds the 50% threshold of damage). Freeboard is the height of the facility above base flood elevation (BFE) in the 1 in 100 year flood hazard area (1% flood zone). These requirements would increase the total cost of the project, and therefore the federal and applicant obligations as cost-shared under normal procedures. As it is further refined and as FEMA proposes regulations to implement the FFRMS, Congress may consider the effects of E.O. 13960 and the FFRMS on the PA Program to determine if it is in alignment with current Congressional intentions. For example, Congress may choose to increase or decrease the number of circumstances in which the proposed FFRMS freeboard requirements are imposed for PA permanent work projects (i.e., apply the FFRMS to all PA permanent work projects instead of just replacement projects, or conversely, apply it only to projects that are damaged by 75% or more instead of 50%, etc.). Congress may also choose to change the freeboard requirement writ large, such as requiring +1 foot, or +3 feet, above BFE for facilities (instead of the proposed +2 for most types of facilities).

Clarifying the Role of the PA Program with Other Federal Agencies' Disaster Assistance Authorities

The broad eligibility of the PA Program frequently overlaps with other federal agencies' disaster assistance authorities. As a result, there are numerous circumstances where emergency work activities and permanent work on certain types of public facilities could be eligible for federal assistance through other federal programs. In compliance with specific legal restrictions in the Stafford Act against the duplication of benefits, grantees can only receive assistance for the same activity from one federal program. Further, FEMA contends that it is bound by legal prohibitions against augmentation of appropriations from providing assistance for an activity under the broad authority of the Stafford Act when there is a more specifically authorized federal program for that purpose. FEMA also contends, for the same augmentation of appropriations reason, that this restriction applies even when the other more specific federal program does not have sufficient (or any) appropriations to provide assistance. Therefore, FEMA and other federal agencies have sought to eliminate redundancies by delineating the circumstances under which the PA Program will defer to another agency's more specific assistance authorities. FEMA believes there is a firm legal restriction against providing permanent work assistance when another agency has more specific authority. However, in FEMA's regulations on the subject, it suggests that FEMA is only "generally" prevented from providing such assistance, not legally restricted.

For example, FEMA, in conjunction with the U.S. Army Corps of Engineers (USACE) and the Natural Resources Conservation Service (NRCS), has issued policy guidance delineating the circumstances where the more specific authorities of these agencies to provide rehabilitation assistance for watershed developments, levees, and other flood control works takes precedence over the PA Program authorities. Both flood control and watershed development are included in the definition of what a public facility is in the Stafford Act. Therefore, restoration of these types of facilities may otherwise be eligible for assistance under Stafford Act authority were USACE and NRCS authority not more specific. FEMA acknowledges that the eligibility of each activity is not necessarily distinguishable through existing policy guidance or regulation, and therefore FEMA will make assessments of eligibility on a "case-by-case" basis when other federal authorities may be more specific than the Stafford Act (and thereby, take precedent over the Stafford Act).

The overlap between the PA Program authorities and other federal agencies' assistance authorities can be a general source of confusion and frustration for many grantees, as they are frequently unsure which federal program will provide assistance to fulfill their post-disaster needs. In addition, different programs have different cost shares and cost eligibility regulations, so the eligibility decision between one federal program or the PA Program may affect the ultimate amount of spending required by the grantee. For example, the USACE's Rehabilitation and Improvement Program (RIP) generally has a cost-share of 80% federal, 20% grantee for non-federal projects; whereas the PA Program has a minimum of 75% federal share that can increase to 90% in regulation for a more severe disaster. Therefore, depending on the PA Program's cost share for a declared major disaster, it can be fiscally beneficial to the grantee if a project is eligible under the PA Program and not the RIP, and vice versa.

However, the greatest challenge is presented when FEMA determines another agency's assistance program is more specific than the PA Program, and that other program does not have appropriations sufficient to cover the expense of assisting the applicant. In these situations, an activity that may otherwise be eligible for aid under the Stafford Act through the PA Program can be denied assistance because the agency with more specific authority takes legal precedence. FEMA has argued that it cannot provide assistance in these situations because doing so would augment the appropriation from Congress for the other agency's program, even if the appropriation from Congress was zero. FEMA cited several Comptroller General Opinions for CRS on appropriations law in explaining its legal interpretation. However, no record could be found of a Comptroller General opinion specifically on the overlapping of PA Program authorities in the Stafford Act with other federal agencies' more specific disaster authorities.

In the Stafford Act, Congress has helped clarify the potential redundancy of PA Program assistance and the SBA's disaster loan program assistance. For permanent work, the law allows PNPs that provide critical services to apply first to FEMA for permanent work assistance, whereas all other PNPs must apply first to SBA's disaster loan program. In other cases, Congress has rescinded the disaster assistance authorities of other federal agencies and as a result eliminated any potential redundancy with the other authority and the Stafford Act. For example, Congress revoked an authority the Department of Housing and Urban Development (HUD) had to repair public housing facilities and repealed an authority the U.S. Department of Education had to provide disaster assistance to schools. In other circumstances, FEMA interprets existing legal provisions as permitting the PA program to pay for activities authorized by other federal assistance programs. As an example, FEMA interprets a provision found in the authorization for the Emergency Federal Law Enforcement Assistance (EFLEA) Program as allowing FEMA to reimburse the Department of Justice for the deployment of federal law enforcement officers, if the officers are providing PA emergency protective measures authorized by the Stafford Act.

Congress has also enacted new disaster assistance authorities, and revised old authorities, to specifically clarify the role of the Stafford Act and PA Program with regard to the other federal agency authority. For example, in the creation of the new Public Transportation Emergency Relief Program in MAP-21, Congress provides that the new program did not "affect the ability of any other agency of the Government, including the Federal Emergency Management Agency, or a State agency, a local governmental entity, organization, or person, to provide any other funds otherwise authorized by law." FEMA believes this provision allows it to provide assistance to public transit agencies through the PA Program without augmenting appropriations for the new transit program. Also in MAP-21, Congress amended the Federal Highway Administration's Emergency Relief Program to specifically allow for the program to provide debris removal assistance only in incidents that have not been declared major disasters under the Stafford Act. Therefore, the PA Program is now the primary source of debris removal assistance, though not permanent repairs, for federal-aid roads when there is a disaster declaration.

Congress may wish to evaluate the role of the PA Program in consideration of the potential redundancies in eligibility presented by the broadly scoped PA Program and other federal authorities. To do so, Congress could consider several options, including, but not limited to,

Requiring the President or FEMA to issue further regulations on the circumstances that Stafford Act authorities will provide assistance in the presence of more specific federal authorities, to possibly include revision of FEMA's regulation for permanent work on the matter; Requesting a formal opinion from the Comptroller General on FEMA's legal interpretation of augmentations of appropriations law to determine if Stafford Act authorities can be used to provide assistance when another federal agency with more specific authority does not have sufficient appropriations to fund an activity; Giving further direction through law or report language to the executive branch regarding the conditions it should to defer to more specific authorities in lieu of the more broadly scoped Stafford Act, perhaps in the form of a delivery sequence outlining the order of precedence of federal programs for assistance; and Revising the Stafford Act to explicitly identify whether Stafford Act authorities may or may not provide assistance in substitution, or at grantee preference, for more specific federal disaster assistance authorities. Ultimately, Congress may evaluate holistically whether the PA Program should be a backstop source of funding for disaster assistance (i.e., only available when other programs do not apply to the activity) or if it should be the principal, ascendant source of funding for disaster assistance (i.e., always eligible to provide assistance for all eligible activities under Stafford Act authority, regardless of other federal agency authorities).

Appendix A. Brief Legislative History of the Public Assistance Grant Program

For the first half of the twentieth century, the federal government did not have an overall legal framework for disaster relief and emergency management. Instead, federal involvement was typically reactive and isolated to single large events, such as the Great Mississippi Flood of 1927. Since that time, the legal framework has been gradually expanding. In 1950, Congress passed the Federal Disaster Relief Act (P.L. 81-875), establishing permanent authority for federal disaster relief activities and codifying an intergovernmental model for assistance. Additionally, this statute provided the President with the authority to determine when assistance would be provided through the first national disaster declaration process. It also authorized the basic tenets of what has evolved into emergency work assistance under the current PA Program, especially emergency protective measures.

The Disaster Relief Act of 1970 (P.L. 91-606) first authorized a form of permanent work assistance grants for the repair and restoration of public facilities. It also formally authorized debris removal assistance separately from emergency work assistance. The Disaster Relief Act of 1974 ( P.L. 93-288 ) authorized the expansion of permanent work assistance grants for the repair and restoration of certain nonprofit facilities, and added features such as the in-lieu contribution and simplified procedures. More than a decade later, the Disaster Relief and Emergency Assistance Amendments of 1988 altered this legislation to, among many other reforms, set minimum federal cost-shares for PA Program assistance, create an insurance requirement for facilities receiving assistance, and authorize the appeal process for PA assistance decisions.

Following the passage of the 1988 amendments, the PA Program had many of the same core authorities and requirements as it does today. However, there have been a number of statutes since 1988 that have impacted the administration of the program. The main report discusses the notable changes made to the PA Program by the Disaster Mitigation Act of 2000 ( P.L. 106-390 , DMA 2000), the Post-Katrina Emergency Reform Act (Title VI of P.L. 109-295 , PKEMRA) and the Sandy Recovery Improvement Act of 2013 (Division B of P.L. 113-2 , SRIA).

Appendix B. Worksheet Dataset Considerations

This Appendix highlights concerns CRS identified with the data that FEMA makes available to the public related to individual worksheets for PA grants. This information is intended to provide context for the analysis provided in this report and to identify potential caveats that should be considered when reviewing the results.

The analysis found throughout the report was primarily completed using two datasets: a publicly available dataset of PA Program project worksheets and a DRF obligation dataset provided directly by FEMA. The data that CRS received privately from FEMA included both projected and actual obligations for many programs funded through the DRF, including infrastructure-related spending for PA grants and Technical Assistance Contracts (TAC). These contracts are used to hire the necessary contract staff to manage and operate the PA Program. The actual obligations within each program for FY2000 through FY2013, provided by FEMA in January of 2015, were used to complete all analysis in the section entitled "Aggregate Spending on Public Assistance."

For the section " Public Assistance Spending by Type of Work, Category, and Project Size " all figures were derived from publicly available data on the OpenFEMA website, accessed in December 2014. Obligation totals were based on the federal share obligated, with declarations being sorted into fiscal years by declaration date. For the additional sections related to obligations for private nonprofit facilities and hazard mitigation expenses within the PA Program, FEMA provided CRS with separate datasets. In each of these datasets, obligations were divided by declaration and funding category (A through Z), with totals based on the federal obligation through January 2015.

Scope of Project Worksheets

The method FEMA uses to characterize and administer discrete projects creates difficulties in understanding the number of actual "projects" within a given disaster. FEMA defines a project as "a logical method of performing work as a result of a declared event." In determining the parameters of a project, an applicant has the ability to combine work items into a single project as long as the resulting project is considered logical and consistent with FEMA criteria. FEMA provides applicants with a list of generally accepted methods for consolidating projects. For instance, an applicant may combine work items that relate to the same broad infrastructure system or the same type of facility. In addition, a single "project" could be all the work for an applicant that falls within one geographic boundary or was awarded to one contractor.

While the ability to consolidate eligible activities onto a single project worksheet has administrative benefits for both FEMA and applicants, it makes it difficult to capture discrete work items and compare across disasters in aggregate. For example, FEMA may assign individual project worksheets to each gravel road damaged in one disaster, but group all gravel roads onto one worksheet in a different disaster, depending on the situation. As a result, any comparison of total projects within a disaster would necessarily be impacted by the project consolidation decisions made by the applicant and FEMA.

Data Entries That Represent Financial Reconciliations Instead of Projects

The public project worksheet dataset used by CRS includes over 621,000 individual project worksheets. However, a number of project worksheets appear not to represent a project in the lay sense of the word, but a financial reconciliation for the grantee (or subgrantee) for other project worksheets that did represent real projects.

First, there are a substantial number of worksheets for which the total project amount of federal obligation is either negative or below the threshold for a PA grant ($1,000). In discussions with FEMA, these entries were characterized as the result of adjustments that are made to an applicant for the purpose of financial reconciliation. These adjustments often led to the creation of a new worksheet to correct issues that were identified for a project that was currently listed under a separate worksheet.

Second, the individual project worksheet data include a number of obligations, both positive and negative, that were made to reconcile issues for a grantee in the aggregate. Each of these was made in Category Z, State Management. For this reason, there could be obligations included in Category Z that would be more properly assigned to categories A though G.

Third, the data include disaster declarations for which the obligation total was negative for an entire category. As described by FEMA, these instances occurred when a system-generated reconciliation was performed across all applicable categories, possibly as a result of a change in the cost-share between the federal and state government. While there were not many instances of this in the data, it is possible that similar reconciliations were performed to adjust costs that were not identified because the total for the category within the declaration remained positive.

For the above reasons, CRS limited the` analysis on the number of projects or the average cost per project, as a project worksheet may not actually represent a separate discrete project. Table 5 provides the only analysis based on numbers of project worksheets. As project worksheets for financial reconciliations are not systematically identifiable across the data, CRS was not able to adequately control for or eliminate all financial data entries. However, CRS did restrict the data for the most obvious of these entries, those project worksheets with reported obligations between $-1 and 1. Even with this restriction, the data on the number of project worksheets likely inflate the number of real projects in a lay sense of the word.

Data Requiring Proper Manual Categorization or Characterization

The analysis provided in the report includes multiple categorizations that are not available in the publicly available data, including obligations for hazard mitigation, private nonprofit facilities, and projects using alternative procedures. To identify project worksheets that met these criteria, FEMA staff relied on text searches of FEMA data or other descriptors in their internal data. There could be inconsistencies in tracking these data across time, region, or declaration because the entry relies upon individual users including information in the text. As a result, the analysis addressing these topics cannot be recreated using the publicly available dataset or verified by CRS.