Flood Mitigation Grants and Hazard Mitigation Planning, 47471-47483 [E9-22278]

Agencies

• Federal Emergency Management Agency
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 74, Number 178 (Wednesday, September 16, 2009)]
[Rules and Regulations]
[Pages 47471-47483]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-22278]



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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Parts 59, 61, 78, 79, 80, 201, and 206

[Docket ID FEMA-2006-0010]
RIN 1660-AA36


Flood Mitigation Grants and Hazard Mitigation Planning

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule.

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SUMMARY: The Federal Emergency Management Agency finalizes the interim 
regulations that implemented the Severe Repetitive Loss program and 
clarified provisions of the existing Flood Mitigation Assistance 
program. In addition, this rule finalizes interim requirements for the 
acquisition of property for open space with mitigation funds and 
clarifies mitigation planning requirements for Indian Tribal 
governments. This rule is intended to encourage hazard mitigation, 
reduce the number of repetitive loss properties, and improve FEMA's 
mitigation programs.

DATES: This rule is effective October 16, 2009.

FOR FURTHER INFORMATION CONTACT: Cecelia Rosenberg, Mitigation 
Directorate, Federal Emergency Management Agency, 1800 South Bell 
Street, Arlington, VA 20598-3030, (phone) 202-646-3321, (facsimile) 
202-646-2719, or (e-mail) cecelia.rosenberg@dhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 31, 2007 (72 FR 61720), the Federal Emergency Management 
Agency (FEMA) published an Interim Rule (IR). The IR implemented 
provisions of the Bunning-Bereuter-Blumenauer Flood Insurance Reform 
Act of 2004, Public Law 108-264, 118 Stat. 714, found at 42 U.S.C. 
4102a, which amended the National Flood Insurance Act of 1968 (NFIA) to 
provide new programs and incentives for States and communities to 
mitigate flood damage to severe repetitive loss properties. Using this 
new authority, the IR added a new 44 CFR part 79 that established the 
new Severe Repetitive Loss (SRL) program. The SRL program is intended 
to eliminate or reduce the risk of additional flood damage to the 
subset of properties that have the largest claims paid from the 
National Flood Insurance Program (NFIP). It is also intended to reduce 
losses to the National Flood Insurance Fund (NFIF). The SRL program 
provides mitigation offers for NFIP insured properties that have 
experienced four or more separate flood claims payments each exceeding 
$5,000 and cumulative payments exceeding $20,000; or at least two 
separate claims payments cumulatively exceeding the market value of the 
building. Claims made within 10 days of each other are counted as one 
claim, and at least two of the claims must be within 10 years of each 
other. If the offer of mitigation assistance is refused the property 
owners' insurance rates may be increased.
    In addition, the IR amended the existing Flood Mitigation 
Assistance (FMA) program by updating the FMA regulations to reflect 
changes to the non-Federal cost share as a result of the amendments to 
the NFIA, changes to FEMA policy, and adding a new 44 CFR part 79. The 
IR also codified, at new 44 CFR part 80, procedures and requirements 
for the acquisition of property for open space. Although FEMA 
previously had procedures in place for open space acquisition, the new 
part expanded the scope of FEMA's prior regulations to address the use 
of all types of mitigation funds, including SRL and FMA, and 
consolidated them in one location. FEMA also modified the mitigation 
planning regulations at 44 CFR part 201 to reduce the non-Federal cost 
share for mitigation projects under the FMA and SRL programs for 
grantees with State mitigation plans that address repetitive loss 
strategies. This change is intended to minimize the burden on State, 
local, and Indian Tribal governments; to streamline the flood 
mitigation planning process; and to ensure consistency in the local 
planning requirements that apply to FEMA's mitigation grant programs. 
Recognizing the unique needs of Indian Tribal governments, who may act 
as grantees or subgrantees and may have different organizational 
structures than State or local governments, the IR also established the 
Tribal Mitigation Plan in 44 CFR 201.7.
    The rule also implemented amendments to section 1308 of the NFIA to 
charge the full actuarial insurance premium rates for property leased 
from the Federal Government ``located on the river-facing side of any 
dike, levee, or other riverine flood control structure, or seaward of 
any seawall or other coastal flood control structure.'' (42 U.S.C. 
4015(c)(2)) Finally, effective October 4, 2006, section 684 of the 
Post-Katrina Emergency Management Reform Act of 2006, Public Law 109-
295, amended the amount of Hazard Mitigation Grant Program (HMGP) 
assistance available to States with an approved Standard State 
Mitigation Plan from 7.5 percent to 15 percent and established a 
sliding scale for HMGP assistance. The IR revised FEMA's regulations to 
align with this change. (44 CFR 206.432(b)(1).)

II. Discussion of Final Rule

    This final rule adopts the regulations established by the October 
31, 2007 IR. It addresses the comments received from the public in 
response to the IR, makes changes to correct errors identified in 
public comments, makes technical corrections, and finalizes the interim 
regulations contained in 44 CFR parts 59, 61, 78, 79, 80, 201, and 206. 
The following is a summary of these regulatory changes:

A. 44 CFR Part 79

    FEMA revised ``Alaskan native village'' in paragraph 79.2(c)(1) to 
``Alaska Native village'' so that the term is consistent with its use 
under the definition of ``local government'' in the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (Stafford Act), as amended 
(42 U.S.C. 5122). FEMA also inserted a definition of ``Indian Tribal 
Government'' at new paragraph 79.2(e) so that 44 CFR part 79 is 
consistent with 44 CFR parts 201 and 206 where ``Indian Tribal 
government'' is currently defined. Throughout paragraph 79.4(c), FEMA 
removed the word ``State'' and revised the text to recognize that per 
44 CFR 206.202(f)(1), Indian Tribal governments may also apply directly 
to FEMA for grant assistance. These changes are intended to correct an 
unintentional omission in the language of the IR. A technical 
correction has also been made to paragraph 79.6(b)(1) to add a more 
specific reference to Tribal mitigation planning requirements. Finally, 
paragraph 79.6(c)(2)(ii) of the IR inadvertently listed demolition or 
relocation of structures to areas outside of the floodplain as an 
eligible activity, rather than as a component of paragraph 
79.6(c)(2)(i). To correct this error, paragraph 79.6(c)(2)(ii) has been 
removed and its substance has been incorporated into the language of 
paragraph 79.6(c)(2)(i).
    Finally, on April 3, 2009, FEMA published a technical amendment 
that updated the agency's titles to reflect its current organization 
(74 FR 15328). Among other things, the technical amendment changed the 
terms ``Director'' to ``Administrator'' and ``Regional Director'' to 
``Regional Administrator'' throughout Title 44 of the Code of Federal 
Regulations, and

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removed the agency organization and delegations of authority from 44 
CFR part 2. The IR had inserted definitions for ``Administrator'' and 
``Regional Administrator'' at 44 CFR parts 79, 80, and 201 to reflect 
the agency organization; however, it did so in a way that referenced 
the old terms ``Director'' and ``Regional Director'' as defined in 44 
CFR part 2. To ensure this final rule conforms to the changes made in 
the technical amendment, the definitions for ``Administrator'' and 
``Regional Administrator'' are revised in newly designated paragraphs 
79.2(l) and (m), paragraphs 80.3(l) and (m), and also revised in Sec.  
201.2.

B. 44 CFR Part 80

    FEMA revised paragraph 80.11(d) to clarify that the subapplicant 
must acquire or retain fee title (full property interest), except for 
encumbrances FEMA determines are compatible with open space uses, 
consistent with paragraph 80.17(b). In response to a comment, FEMA 
reviewed the provisions for verifying that a property owner is a 
National of the United States or qualified alien and therefore eligible 
to be offered pre-event market value for the property in an acquisition 
instead of current market value. To correct an inconsistency confirmed 
in that review, FEMA revised paragraphs 80.13(a)(6) and 80.17(c)(4) to 
require the subapplicant to certify that the property owner is a U.S. 
National or qualified alien before the grant award.

C. 44 CFR Part 201

    The final rule makes technical corrections throughout this part. In 
the definition of the term ``Indian Tribal government'' in Sec.  201.2, 
the word ``Indian'' was inadvertently omitted in the reference to the 
Federally Recognized Indian Tribe List Act of 1994, but has been added 
in this final rule. The final rule removes paragraph 201.3(c)(7) to 
eliminate reference to a paragraph of the regulation that no longer 
exists, as it was transitional in nature. In paragraphs 201.3(e)(1), 
201.7(a)(2) and 201.7(c)(3)(vi), FEMA inadvertently failed to reference 
that Indian Tribal governments, like States, must apply to FEMA as a 
grantee to receive the reduced cost share for the FMA and SRL programs 
when addressing severe repetitive loss properties in their plans. This 
requirement appeared in paragraph 201.3(e) before 44 CFR part 201 was 
changed by the IR; therefore, these changes are nonsubstantive.
    FEMA has revised paragraph 201.7(a)(3) by replacing local with 
Tribal to reflect the appropriate mitigation plan required for Tribal 
governments. Additionally, FEMA added a sentence to the end of 
paragraph 201.7(a)(3) to reference the extraordinary circumstances in 
which a Regional Administrator may grant Tribal governments an 
exception to the plan requirement. This exception appeared in FEMA's 
regulations before the IR at paragraph 201.6(a)(3) and was 
unintentionally omitted from the new language specifically addressing 
Tribal governments in the IR.
    Finally, in paragraph 201.6(c)(2)(ii)(B), an incorrect cross-
reference has been revised from (c)(2)(i)(A) to (c)(2)(ii)(A). In 
paragraph 201.6(c)(3)(iii), an incorrect cross-reference has been 
revised from (c)(2)(ii) to (c)(3)(ii). In paragraph 201.7(c)(2)(ii)(B), 
an incorrect cross-reference has been revised from (c)(2)(i)(A) to 
(c)(2)(ii)(A) and in paragraph 201.7(c)(3)(iii), an incorrect cross-
reference has been revised from (c)(2)(ii) to (c)(3)(ii).

D. 44 CFR Part 206

    This final rule makes two technical corrections to Sec.  206.432. 
The first technical correction is to paragraph 206.432(b) and removes 
the reference to 42 U.S.C. 5178 since 42 U.S.C. 5178, section 411 of 
the Stafford Act was repealed. The second technical correction is to 
paragraph 206.432(b)(2) to clarify that for States with an Enhanced 
State Mitigation Plan, the total amount of Federal contribution under 
the HMGP for a major disaster may not exceed 20 percent of $35.333 
billion. This technical correction is non-discretionary and makes the 
paragraph consistent with the statute (sections 322 and 404 of the 
Stafford Act, as amended, 42 U.S.C. 5165 and 5170c).
    This final rule also corrects inadvertent errors and omissions to 
reflect the Tribal Mitigation Plan established by the IR. The rule adds 
the word ``Indian'' to the definition of ``Indian Tribal government'' 
in Sec.  206.431 and ``or Tribal'' to paragraphs 206.434(b)(1) and 
206.434(c)(1), deletes the words ``or Indian Tribal'' from the 
definition of Local Mitigation Plan in Sec.  206.431, and adds a 
definition of the term ``Tribal Mitigation Plan'' to Sec.  206.431.
    In paragraph 206.434(b)(1), the final rule expands the reference to 
44 CFR 201.6 and revises it to include the entirety of 44 CFR part 201 
so that it includes both Local and Tribal Mitigation Plans. In that 
paragraph, the final rule also removes the reference to disasters 
declared on or after November 1, 2004, and the requirements for plans 
approved before that date. This change is a conforming amendment 
because the provisions are no longer applicable. Additionally, the 
final rule revises the cross-reference in Sec.  206.401 to correctly 
direct readers to paragraph 206.226(d). Paragraph 206.226(b) is revised 
to include the Tribal Mitigation Plan established by the IR. As FEMA 
treats Tribal Mitigation Plans in the same manner that it treats State 
Mitigation Plans, this section should have been amended in the IR to 
reflect the new form of planning document. These changes are intended 
to correct that omission and conform this section to the requirements 
and authorities contained in other sections.
    Finally, the introductory text to paragraph 206.434(e) has been 
restated in this rule. As previously noted, on April 3, 2009, FEMA 
published a technical amendment that updated the agency's titles and 
organization (74 FR 15328). That rule changed ``Regional Director'' to 
``Regional Administrator'' in this paragraph. To ensure this final rule 
does not undo that change, the language of the IR is repeated to 
incorporate the change from the technical amendment.

III. Discussion of Public Comments

    FEMA received five public comments regarding the IR published on 
October 31, 2007. The comments on the IR were submitted by three State 
emergency management agencies, the Association of State Floodplain 
Managers, and an individual citizen. The comments received, together 
with FEMA's response, are set forth below. Many of the public comments 
contained general supportive statements or positive responses to 
specific regulatory changes. Although FEMA appreciates the public 
support for this rulemaking, and took those statements into 
consideration when drafting this final rule, FEMA has no specific 
response to those comments and they are not represented in this 
discussion. Additionally, the comments regarding river flow and 
impervious surfaces in New Jersey were outside the scope of this 
rulemaking. Therefore, FEMA has no specific response to those comments. 
All previously published rulemaking documents, as well as all comments 
received are available in the public docket for this rulemaking. The 
public docket for this rulemaking is available online at the Federal e-
Rulemaking Portal at https://www.regulations.gov under Docket ID FEMA-
2006-0010.

44 CFR Part 78

    44 CFR part 78 provides information on the actions, procedures, and 
requirements for the administration of

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the FMA program. The FMA program is designed to assist States and local 
governments in funding cost effective actions that result in the 
greatest cost savings to the NFIF. One commenter noted that paragraph 
78.12(f), which allows for other activities that bring an insured 
structure into compliance with NFIP minimum standards, and paragraph 
78.12(h), that allows for beach nourishment activities, are now 
excluded in the new rule at 44 CFR part 79. The commenter had no 
concerns with these changes. This change was incorporated into the IR 
to implement a policy change, and has not been modified in this final 
rule. Eligible projects that now can be funded under FMA are limited to 
acquisition/demolition, relocation, elevation, floodproofing, and minor 
localized flood reduction projects.

44 CFR Part 79

General
    44 CFR part 79 implements certain amendments to the NFIA that 
provide incentives for States and communities to mitigate the effects 
of flood damage to severe repetitive loss properties by creating the 
SRL program and by reducing the cost share requirements in the existing 
FMA program for SRL properties. One commenter noted that Sec. Sec.  
79.8 and 79.9 replace Sec.  78.13 and add language that is consistent 
with how the FMA program is currently being implemented. Another 
commenter indicated that this rulemaking illustrates how cumbersome the 
SRL program is as a result of complexity in the statute, and as a 
result the SRL program when implemented will be difficult.
    FEMA acknowledges that the rule is consistent with the statutory 
language as required by the amendments to the NFIA and that many 
details of the SRL program reflect the statute. FEMA acknowledges that 
implementation of the program poses some challenges. As a result of 
carrying out the Fiscal Year 08 and 09 programs, FEMA is working to 
identify and address critical implementation issues in order to 
streamline, where possible, the delivery of assistance to mitigate SRL 
properties.
Section 79.3 (Responsibilities/Reallocation)
    Section 79.3 outlines FEMA's, States', Tribes', and communities' 
roles and responsibilities in implementing the FMA and SRL programs. 
These responsibilities include administering and providing oversight to 
FEMA-related hazard mitigation programs and grants by issuing program 
guidance and procedures, allocating funds to States for the FMA and SRL 
programs, awarding all grants to the grantee, and providing technical 
assistance and training to State, local, and Indian Tribal governments.
    One commenter noted that changes to the Federal responsibilities 
section of the IR eliminated FEMA regional office authority to award 
grants, and transferred that authority to FEMA headquarters. The 
commenter also acknowledged FEMA's recent procedural change that no 
longer allows for a regional reallocation of FMA funds; rather, all 
unallocated funds now must return to FEMA headquarters and be 
reallocated through a national competition. The commenter prefers 
FEMA's previous procedure that allows for a regional reallocation 
followed by a national reallocation.
    Although the Region is no longer specified in the new Sec.  79.3 
(which replaces paragraph 78.3(a)) regarding responsibility for the 
administration of funds awarded under the FMA program, FEMA disagrees 
that this has the effect of transferring authority to award grants from 
the Region to FEMA Headquarters. Rather, the provision allows FEMA 
increased flexibility in determining how to implement allocation, 
award, and reallocation to more efficiently make grant assistance 
available to eligible applicants and to more equitably distribute the 
FMA funds nationally in the event that eligible applications exceed 
available dollars.
Section 79.4 (Availability of Funding)
    Section 79.4 provides information regarding the availability of 
funding and provides guidelines regarding the allocation process. Two 
commenters noted that the allocation formula for the SRL program is 
reasonable, but one indicated that the IR eliminates the base amount of 
per State funding for FMA which had been $10,000 for planning and 
$100,000 for projects. The rule does remove the base amounts of 
funding. The FMA allocation formula as described at Sec.  79.4 is based 
on the number of NFIP policies and repetitive loss structures in each 
State, in addition to criteria described at Sec.  79.6, eligibility. 
This provides FEMA with increased flexibility, which ensures that as 
many eligible projects as possible are funded.
Management Costs
    One commenter was opposed to the elimination of paragraph 78.8(c) 
which specifies that a maximum of 10 percent of FMA funds will be 
available for Technical Assistance grants because there is no 
equivalent language in the IR to provide for costs incurred by the 
State in administering this program. The commenter suggested that this 
change indicates that FEMA intends to reduce management costs by policy 
instead of a rule change.
    FEMA does not intend for this rule to reduce the amount of 
assistance provided to administer the FMA and SRL programs. In the IR, 
paragraph 79.8(a)(1) contains language that allows for eligible 
management costs. For the purposes of clarity, the term management 
costs in the IR replaces the term Technical Assistance grants as used 
in 44 CFR part 78. Management costs as described in the IR provide for 
costs incurred by the State in administering the FMA and SRL programs 
with the same 10 percent cap. Thus, there is equivalent language in the 
IR to provide for such costs.
FMA Cap
    One commenter noted that the community and State cap on FMA funding 
will pose an obstacle in some areas. Although this cap may limit the 
funding of potential FMA projects for some communities, it is a 
requirement imposed by the statute that authorized the FMA program (42 
U.S.C. 4104c). Although FEMA has no discretionary authority to remove 
the cap, the statute gives FEMA the discretion to waive the caps for 
any 5-year period when a major disaster or emergency for flooding is 
declared under the Stafford Act in that community or State, 
respectively. This provision is implemented at Sec.  79.4 of the rule.
In-Kind Match Limit
    One comment notes that up to half of the local match to a FMA 
project can be an in-kind match and that FMA is the only FEMA 
mitigation program with the in-kind restriction. FEMA agrees that there 
is a restriction on the use of in-kind matching of FMA projects to meet 
the required non-Federal contribution. This is a requirement from the 
legislation that authorized the FMA program (42 U.S.C. 4104c(g)(1)) 
which requires that in-kind contributions by any State or community 
shall not exceed one-half of the amount of non-Federal funds 
contributed by the State or community.
Requirement of an SRL Non-Federal Match
    One commenter noted that the SRL program requires a non-Federal 
match unlike the Repetitive Flood Claims (RFC) program. The commenter 
adds that many communities find it difficult to promote mitigation 
buyouts when the property will be deed restricted and there is a loss 
of tax base. With respect

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to the SRL non-Federal match, the regulation mirrors the language of 
the authorizing statute. (42 U.S.C. 4102a(d)) The authorizing language 
for the RFC program does not contain a similar match requirement and 
FEMA has not implemented one. FEMA has interpreted that the intent of 
the RFC is to provide mitigation assistance for States and communities 
that cannot meet the requirements of the FMA program, including the 
ability to provide a non-Federal match.
Section 79.6 (Eligibility)
    Section 79.6 provides information on eligible applicants, 
subapplicants, State mitigation plan requirements, eligible activities, 
and minimum project criteria. One commenter noted that elevation, 
flood-proofing, demolition, and rebuilding will occur at least to the 
Base Flood Elevation (BFE) level or higher, if required by FEMA or 
State or local ordinance. Another commenter added that its particular 
jurisdiction requires the lowest enclosed level to be the BFE plus 2 
feet for both FMA and HMGP flood mitigation projects. The commenter 
noted that this requirement is pursuant to its grant administrative 
discretion and its responsibility to prepare and adopt its State 
Standard Mitigation Plan, not because of local ordinance or State 
statute. The commenter requested that FEMA change the IR by adding 
statements which recognize that State administrative provisions and 
mitigation plans may also require an elevation higher than the BFE.
    FEMA has worked closely with its State and local partners to 
robustly implement mitigation planning as part of their decision-
making. FEMA encourages, as part of an overall mitigation strategy, 
that States and local communities identify the particular hazard or 
hazards in their areas. Upon identification and prioritization of those 
hazards, State and local decision-makers are encouraged to develop 
prudent mitigation measures to address those risks and vulnerabilities. 
FEMA encourages States to establish more stringent requirements as part 
of their State administrative provisions or State mitigation plan. 
FEMA's guidelines for floodplain management under the NFIP are a 
minimum standard; however, States are afforded the flexibility to adopt 
and implement more restrictive requirements, which may include 
provisions specific to mitigation. The IR was not intended to limit 
States from implementing their own administrative requirements that can 
serve as a basis for State-level ordinance or local regulatory changes 
to go above and beyond FEMA's minimum standards.
SRL Benefit Cost Analysis Requirements
    Two commenters noted that a benefit cost analysis for SRL projects 
is required, although mitigation of some structures may not be cost 
effective because they are not located in special flood hazard areas. 
One of those commenters requested that the SRL and repetitive loss 
properties automatically be considered cost effective.
    FEMA determined that the intent of the legislation that authorized 
the SRL program is to fund projects that reduce flood damages to SRL 
properties and that reduce losses to the NFIF. The statutory text does 
not specify that the projects must be cost effective; however, FEMA 
recognizes that determining cost-effectiveness ensures compliance with 
these statutory program purposes, as well as provides a means of 
implementing the SRL program's legislative requirement of providing 
assistance that will result in the greatest amount of savings to the 
NFIF. FEMA continues to evaluate the various approaches to determining 
cost-effectiveness in terms of creating savings to the NFIF.
SRL Property Relocation
    One commenter indicated that paragraph 79.6(c)(2)(ii) lists the 
demolition or relocation of structures to areas outside of the 
floodplain as an eligible project without placing limitations on the 
future use of the flood prone property. The commenter indicates that 
this change in the IR creates a potential for misuse as it would be 
possible to use mitigation funding to purchase a property under the SRL 
program, have it demolished or relocated, and then build a new 
structure on the same flood prone site. FEMA notes that paragraph 
79.6(c)(2)(ii) is a component of the eligible activity identified in 
paragraph 79.6(c)(2)(i). To correct the error, paragraph 79.6(c)(2)(ii) 
has been removed and its substance has been incorporated into the 
language of paragraph 79.6(c)(2)(i), which contains a requirement that 
the property be converted to open space.
Section 79.7 (Offers and Appeals Under the SRL Program)
    Section 79.7 provides information on mitigation offers and appeals 
under the SRL program. The section provides guidance on the 
consultation process, the voluntary mitigation offer, likely insurance 
increases due to refusal of a mitigation offer, and the appeals process 
for insurance rate increases. One commenter noted that there is no 
appeals process for the market value determination on an SRL property. 
The commenter indicated that the lack of an appeals process will likely 
cause problems in the implementation of the program.
    Contrary to the commenter's claim, FEMA asserts that throughout the 
SRL process there are several opportunities for property owners to 
formally or informally consult with the State and local community 
regarding the purchase offer for their property. Under the SRL program, 
the purchase offer must be at least equal to the greatest amount 
offered through one of the three alternatives, specified in Sec.  
80.17. The local community is required, through a formal SRL 
consultation process, to take all necessary steps to ensure that the 
property owner is fully informed of the SRL program requirements, and 
that proper consultation and offer procedures were followed. In the 
event that the property owner does not accept a mitigation offer, the 
property owner may submit an appeal of the likely insurance premium 
rate increase (under certain circumstances). Specifically, with respect 
to an issue of property value, paragraph 79.7(d)(1)(ii)(A) allows the 
property owner to appeal an increase in insurance rate premium 
resulting from declining the offer of assistance (mitigation offer) if 
the purchase offer amount can be documented and verified as an 
inaccurate estimate of the property's market value. Also, pursuant to 
paragraph 79.7(d)(1)(i), the property owner may appeal if he or she 
cannot find a replacement property of comparable value that is 
functionally equivalent to the property being replaced. Finally, 
paragraph 80.5(c)(5) describes the responsibility of the subapplicant/
subgrantee to include resolving property owner disputes regarding 
mitigation offers for the purchase of property.
Request for Statutory Amendments for SRL
    A commenter posed several comments that focus on the authorizing 
statute with the intent to propose legislative changes to the SRL 
program. The commenter raised the following six issues: (1) There is no 
requirement for a State/community to participate in the SRL; (2) The 
offer process is unique and will be difficult to administer; (3) The 
entire appeals process is cumbersome and unnecessary; (4) SRL is the 
only mitigation program with consequences for refusal to mitigate; (5) 
SRL has a cost share that, compared to RFC for example, puts the 
program at a competitive disadvantage; and (6)

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Benefit cost analysis is used to determine whether a project will be 
funded or not. These comments pertain directly to the authorizing 
statute and do not directly address FEMA's interpretation of that 
statute in this regulation. Although FEMA notes the commenter's 
concerns, FEMA must adhere to the statutory requirements.

44 CFR Part 80

    44 CFR part 80 provides, in a single source, the requirements for 
the administration of FEMA mitigation assistance to acquire property 
for open space under all FEMA Hazard Mitigation Assistance (HMA) 
programs. 44 CFR part 80 also provides information on the eligibility 
and procedures for acquisition and relocation of vulnerable structures 
away from hazardous areas. Subsequently, the cleared property is to be 
maintained as open space in perpetuity.
Paragraph 80.5(b)(7)--Enforcement
    Section 80.5 provides information on the roles and responsibilities 
of FEMA, the State, the subapplicant, and the participating property 
owners in the context of creating open space. Paragraph 80.5(b)(7) 
outlines the State's roles and responsibilities to enforce the open 
space deed restrictions to ensure that a property purchased with 
mitigation funds remains as open space in perpetuity.
    One commenter noted that the term ``enforcing'' implies an 
assumption that States have a statutory and regulatory authority to 
force jurisdictions to uphold open space deed restrictions. The 
commenter added that various States may or may not have this authority 
to enforce the open space deed restrictions, depending upon which 
agency implements the various mitigation grant programs.
    By virtue of receiving the HMA funds for open space projects, 
States and local communities are accountable for compliance with the 
terms of the grant agreement and its requirements for the use of those 
funds. Upon receiving FEMA funds for an open space acquisition project, 
the grantee and subgrantee assume stewardship, including ensuring that 
the deed restrictions are recorded, that there is a clear title to the 
property, that all incompatible easements or encumbrances are 
extinguished, that the vacant land is clean of hazardous materials, 
that the intended and future use of the property complies with the 
legally imposed use restrictions, and that the State and the local 
community jointly monitor and inspect the deed-restricted properties at 
regular intervals to ensure that the property continues to be used for 
open space purposes. All parties to the grant/subgrant award assume 
these responsibilities by receiving HMA funds. The authority to enforce 
these restrictions lies with the State in its role as grantee. 
Therefore, just as the grant condition continues in perpetuity pursuant 
to Federal law, the responsibility to ensure compliance with that 
condition continues in perpetuity. FEMA notes that these 
responsibilities have always applied to grantees and subgrantees for 
open space acquisition and relocation projects under all of FEMA hazard 
mitigation grant programs as necessary to ensure the long-term purpose 
of the Federal funds for this particular project type is met.
Section 80.9 (Eligible and Ineligible Costs)
    One commenter indicated that the language in paragraph 80.9(c) 
allows for reducing a grant award for Duplication of Benefits (DOB) 
which could mean that a full DOB analysis would have to be completed 
before a project is approved by FEMA. The commenter indicated that the 
DOB should not be deducted until the local project manager has met with 
each owner during the offer presentation process and credited back 
temporary living expenses and/or receipted repairs using insurance or 
grant funds. Also, the commenter noted that the language appears to be 
confusing the concept of DOB and Duplication of Programs (DOP).
    HMA funding must be reduced by the amounts reasonably available to 
a property owner (even if not sought or received) designated for the 
same purpose or loss. In this case, the purchase offer will be reduced 
by the duplicative amount. It is the subgrantee's responsibility to 
coordinate with the property owner and to disclose all potential 
deductions as a result of funds that were reasonably made available to 
the property owner. It is also the subgrantee's responsibility to make 
the appropriate deductions from the purchase offer before making a 
final mitigation offer to the property owner. Consequently, it is the 
property owner's responsibility to take all reasonable steps to recover 
funding he or she is eligible to receive. In developing a project 
budget, the subapplicant should take all reasonable steps to accurately 
identify all project costs. The information needed to determine a DOB 
is generally readily available and can impact the mitigation grant 
offer at any time. Therefore, it is preferable to identify all DOBs as 
early as possible in order to reduce the risk of having a cost overrun. 
However, amounts made available for the same purpose at any time, even 
after award or acquisition, constitute a DOB and will be treated as 
such. It should be noted that funds received by the property owner that 
were designated for the same purpose or loss will not be deducted from 
the final mitigation offer if the owner can document with receipts that 
those funds were expended on repairs or cleanup.
    Finally, FEMA disagrees with the commenter's assertion that the 
language confuses the concept of DOB and DOP. DOP would occur when an 
activity is funded under one program, despite there being more specific 
authority to fund it under a different program. DOB occurs when HMA 
funds are used to fund a mitigation activity, but other funds for the 
same purpose, such as from insurance, are received by or available to 
the project participant.
Section 80.11 (Project Eligibility)
    Section 80.11 provides information on project eligibility. This 
section includes a discussion of voluntary participation, acquisition 
of improved properties, subdivision restrictions, and open space 
restrictions. Paragraph 80.11(a) notes that a property owner who agrees 
to an acquisition must do so on a voluntary basis and that the grantee/
subgrantee can not use their powers of eminent domain to acquire the 
property should negotiations fail.
    One commenter notes that the term ``negotiations'' may be construed 
to mean that negotiations of offers are possible. The commenter 
suggests that the use of the term ``negotiations'' may be problematic 
in implementing an acquisition/demolition project regardless of the 
mitigation grant involved.
    FEMA is required to implement the provisions of 49 CFR part 24, 
Uniform Relocation Assistance and Real Property Acquisition for Federal 
and Federally Assisted Programs (URA). The term ``initiation of 
negotiations'' is defined as the delivery of the initial written offer 
of just compensation by the Agency to the owner or the owner's 
representative to purchase the real property for the project. (49 CFR 
24.2(a)(15).) As such, the word ``negotiation'' is a term of art.
    If the property owner can verify that the final mitigation offer is 
significantly below market value, or presents other convincing facts 
such that the offer should be adjusted, then there may be an increase 
of the purchase offer. Regardless, in all cases, FEMA, the State, and 
the local community will work to ensure that all property owners are 
treated fairly and are offered an equitable mitigation offer based on 
the

[[Page 47476]]

acceptable methods for determining purchase offers for acquisitions 
under FEMA HMA programs.
    FEMA revised paragraph 80.11(d) to clarify that the subapplicant 
must acquire or retain fee title (full property interest), except for 
encumbrances FEMA determines are compatible with open space uses, 
consistent with paragraph 80.17(b). In response to a comment, FEMA 
reviewed the provisions for obtaining verification that a property 
owner is a National of the United States or qualified alien and 
therefore eligible to be offered pre-event market value for the 
property in an acquisition instead of current market value. To address 
any perceived inconsistency, FEMA revised paragraph 80.17(c)(4) to 
clarify that the subapplicant must certify that the property owner is a 
National of the United States or qualified alien during the application 
process.
Section 80.13 (Application Information)
    Section 80.13 provides information on application requirements. 
Some of this required information includes: property information, deed 
restriction language consistent with FEMA's model deed restriction, a 
signed notice of voluntary interest, an assurance that there is no 
intention to use the acquired property for any public or private 
facility for a future use that is inconsistent with 44 CFR part 80, and 
certification that the property owner is a National of the United 
States or a qualified alien (if the owner is being offered pre-event 
market value).
    One commenter indicated that the general requirements outlined in 
this section will significantly increase the paperwork burden on the 
subapplicants in the application process. In particular, the commenter 
indicates that prior to appraisal it is difficult to obtain signatures 
from property owners regarding the inclusion of their properties in the 
project, and notes that, as an applicant, the Voluntary Transaction 
Agreements signature is obtained after the grant is awarded to the 
local jurisdiction.
    FEMA analyzed the anticipated paperwork burden associated with 
implementing these mitigation programs with respect to the Paperwork 
Reduction Act of 1995 (PRA) (5 CFR part 1320). As part of its PRA 
analysis in Section IV.E. of this rule, FEMA determined that the 
collection of information needed to develop a mitigation application 
package does not impose an additional undue burden on the States and 
local communities. Applicants and subapplicants have been submitting 
this information before FEMA published the IR. Regardless, FEMA 
reviewed 44 CFR 80.13 to ensure that the HMA application information 
requirements do not impose any additional undue burden in the 
development of HMA applications. Generally, 44 CFR part 80 reflects the 
information that has always been requested in program guidance as a 
condition for applying for assistance to enable FEMA to determine the 
project's eligibility and compliance with program requirements.
    With respect to the comment about obtaining project participants' 
signatures, FEMA wants to clarify that the timing for obtaining from 
the property owner the Statement of Voluntary Participation (formerly 
called Voluntary Transaction Agreement), which indicates the market 
value of the property and the owner's acknowledgment that they are 
voluntarily participating in the project, continues to occur post 
award. This is distinct from the Notice of Voluntary Interest, which 
simply documents during project development that potentially interested 
owners have received general notice from the subapplicant of the 
voluntary nature of the potential acquisition project, including that 
the subapplicant will not use its eminent domain authority for the 
purpose of open space. The Notice of Voluntary Interest may be as 
simple as having a group sign-in sheet at a neighborhood meeting about 
the possible project that includes a statement to this effect. For FEMA 
to ensure compliance with basic program requirements, this less formal 
documentation is provided to FEMA during the application process.
    Another commenter noted that it is unclear how States will be 
required to indicate that there is no intention to use the property for 
any public or private facility in the future. Paragraph 80.13(a)(5) 
requires that the State provide assurances that the subject property to 
be acquired, deed restricted, and converted to open space has no 
future, intended, or planned use that is inconsistent with the 
requirements delineated in Sec.  80.19 (land use and oversight). 
Compliance with this regulation is accomplished through a written 
statement submitted as part of the application.
    Two commenters indicated that it is unclear why offering the pre-
event value to a property owner requires that the subapplicant provide 
certification that the property owner is a National of the United 
States or a qualified alien. One commenter also notes that Sec.  80.13, 
which indicates that this certification must be done as part of the 
application process, conflicts with Sec.  80.17 which indicates that 
this certification must be done before offering pre-event market value 
for a property.
    As established by the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (PRWORA) (42 U.S.C. 1305 note), an alien who 
is not a qualified alien (as defined in 8 U.S.C. 1641) is not eligible 
for any Federal public benefit. In this instance, such a Federal public 
benefit results from an offer of pre-event market value, which has the 
effect of compensating for the disaster loss beyond the current market 
value of the property. This benefit is reserved for property owners who 
owned the property during the event and who are Nationals of the United 
States or qualified aliens. The property value for other individuals 
must be based on current market value. To ensure compliance with the 
PRWORA, local communities offering pre-event market value must verify 
that the property owners are either Nationals of the United States or 
qualified aliens.
    The term ``National of the United States'' is defined at 8 U.S.C. 
1101 and means a citizen of the United States or a person who is not a 
citizen but who owes permanent allegiance to the United States. The 
term ``qualified alien'', as delineated in the Immigration and 
Nationality Act (the Act) at 8 U.S.C. 1641, is an individual who meets 
certain criteria contained in the Act at the time they apply for, 
receive, or attempt to receive a Federal public benefit.
    In response to the commenter's view that there is an inconsistency 
between Sec. Sec.  80.13 and 80.17, FEMA notes that it intended the 
language in paragraph 80.17(c)(4) to describe a pre-condition of 
offering pre-event value, not to address the timing of obtaining the 
information. Such information is relevant to the eligible costs of the 
project and is provided to FEMA during the application process. FEMA 
revised Sec.  80.17 to clarify that the pre-event value is only 
available to a property owner that has certified during the application 
process as to being a National of the United States or a qualified 
alien.
Section 80.17 (Project Implementation)
    Paragraph 80.17(c)(1) provides that the amount of a purchase offer 
is either the current market value of the property or the market value 
of the property immediately before the relevant event affecting the 
property. One commenter requested clarification of the term ``relevant 
event'' for Pre-Disaster Mitigation (PDM). The commenter indicated that 
this clarification will

[[Page 47477]]

make implementation of the program easier. As it relates to PDM, the 
regulation states that the relevant event is the most recent major 
disaster that affected the subject property. In the case where multiple 
disasters have affected the same property, this section indicates that 
the ``grantee and subgrantee shall determine which is the relevant 
event.'' Alternatively, if the project is not occurring in association 
with or will be more than 12 months after a disaster event, for 
example, the grantee and subgrantee may want to consider whether 
current market value may be more appropriate, per paragraph 
80.17(c)(3).
    One commenter indicated that the flexibility built into the SRL 
program affords market value determination of the greatest amount (i.e. 
current market value, pre-event market value, original purchase price 
paid, or outstanding amount of the loan on the property). The commenter 
indicated that in some instances the offer of the greatest amount would 
render the property not cost effective.
    Paragraph 80.17(c)(2) notes that for acquisition of properties 
under SRL, the purchase offer is to be not less than the greatest of 
the following amounts: the current market value of the property or the 
pre-event market value of the property; the original purchase amount 
paid by the property owner holding the flood insurance policy as 
demonstrated by property closing documents; or the outstanding amount 
of any loan to the property owner, secured by a recorded interest in 
the property at the time of the purchase offer. It is legislatively 
mandated at 42 U.S.C. 4102a(g)(3) that FEMA use these values to 
determine the greatest amount on which to base a purchase offer. The 
statute also requires that the purchase price be the greatest of those 
amounts. FEMA acknowledges that as a result of this method, there may 
be instances where the project costs outweigh the project benefits; 
however, FEMA must follow the legislatively mandated direction.
Section 80.19 (Land Use and Oversight)
    Section 80.19 provides guidance on open space requirements and land 
uses compatible with open space. One commenter noted the correlation 
between the requirement in paragraph 80.17(b) that any incompatible 
easements or other encumbrances to the property be extinguished before 
acquisition, and the requirement in paragraph 80.19(a)(1)(i) 
identifying ``below ground pumping and switching stations'' as not 
being compatible with open space uses. The commenter added that this 
requirement restricts the ability of the local jurisdiction to purchase 
a property because a utility company may be unwilling to nullify an 
easement.
    Above or below ground pumping stations or other uses that obstruct 
the natural and beneficial use of the floodplain are deemed as land 
uses that are incompatible with FEMA's open space requirements because 
they are detrimental to maintaining the beneficial functions of the 
floodplain. If, at the time of acquisition, a property is used for an 
incompatible open space use, then that property is no longer eligible 
for acquisition if the use cannot be discontinued. Similarly, if 
easements for the property allow for any incompatible use, such 
provisions must be nullified in order for the property to be acquired 
(provisions allowing for compatible uses may remain in effect). FEMA 
acknowledges that where incompatible uses will continue to be permitted 
on a property, the property is not eligible for FEMA HMA funds for an 
acquisition for open space purposes.
    One commenter expressed concern with the monitoring and reporting 
requirements and the enforcement provisions of Sec.  80.19. The 
commenter suggested a monitoring timeframe consistent with mitigation 
plans.
    In an effort to ease the workload for monitoring, 44 CFR part 80 
reduces the frequency of HMGP grant monitoring from once every 2 years 
to once every 3 years. This change makes all HMA programs consistent in 
their property acquisition land-use monitoring requirement. FEMA 
believes that further extending this timeframe would not provide 
sufficient monitoring to ensure ongoing compliance with the land use 
requirements. In addition, FEMA does not think it is appropriate to 
synchronize the open space monitoring timeframe with the completely 
unrelated timeframe for local mitigation plan updates, and notes that 
to do so could place additional distractions on local jurisdictions at 
a time when they need to focus instead on the mitigation planning 
process.
    The same commenter also raised concerns about State 
responsibilities, including funds and authority to meet enforcement 
responsibilities, including taking legal action. Finally, the commenter 
identified concerns about improper consequences for State and 
subgrantee failure to enforce open space requirements, noting that it 
would be unfair for the State to lose HMA assistance if the subgrantee 
were non-compliant.
    In response, it should be noted that 44 CFR part 80 does not 
substantially differ from previous open space project grant 
requirements, where the State has always played a vital role in the 
monitoring and enforcement of the open space restrictions. These 
provisions have been a requirement of FEMA property acquisition and 
relocation for open space projects almost since program inception. They 
have been reflected in the HMGP Desk Reference and the annual program 
guidance for the other HMA programs (e.g., the PDM program), which also 
incorporated FEMA's model deed restriction language. The States, as 
grantees, and subgrantees agree to this language as a condition of 
receiving HMA funding, both by signing a statement of assurances 
acknowledging these conditions, and by accepting grant funds subject to 
the grant agreement. Unlike most NFIP-related programs and activities 
where the primary entity is the community, for HMA grant purposes the 
State is the grantee and is accountable for the use of funds and for 
assuring compliance with the terms of the grant award and the program. 
(See, e.g., 44 CFR 206.433 and 13.3.) It also should be noted that FEMA 
is also accountable for ensuring that Federal awards are used for the 
intended purpose. The IR restated and codified previous HMA program 
requirements to ensure that States and FEMA carry out their fiscal 
responsibilities by taking appropriate actions to maintain consistency 
with Federal open space requirements. This action may or may not 
involve court action. The option of seeking specific performance in a 
court of law or equity is not ``a requirement,'' but is an available 
option when deemed appropriate.
    Further, the options available to FEMA for enforcing the open space 
requirements are not new. FEMA has always retained the right to bring 
legal action against a State or local jurisdiction that fails to comply 
with the open space terms of the grant and deed restriction. In 
addition, as explained in the rule, the option of withholding HMA 
assistance is a reasonable response in the event that the State and 
subgrantee fail to make a good faith effort to enforce the deed 
restrictions they voluntarily agreed to enforce. These remedies for 
non-compliance are consistent with government-wide Federal grants 
management procedures. (See, e.g., 44 CFR 13.43(a).) In the case of a 
State and/or local jurisdiction failing to comply with the grant terms 
and deed restrictions, taking such an action may be the most effective 
means of encouraging a continued commitment to the open space 
responsibilities. FEMA may withhold funds from a subgrantee for failure 
to demonstrate a

[[Page 47478]]

good faith effort to come into compliance with the terms of the grant. 
Because the grant relationship is between FEMA and the State as 
grantee, funds withheld from a subgrantee are also withheld from the 
grantee. This does not necessarily mean that FEMA will withhold all HMA 
funding from that State.

General Comment

    One commenter expressed concern that FEMA's Flood Insurance Rate 
Map (FIRM) is antiquated and therefore does not provide the public with 
the most accurate and up-to-date risk mapping data. The commenter 
suggested that FEMA be proactive in stopping development in flood-prone 
areas.
    While this comment is outside the scope of this rulemaking, FEMA 
notes that efforts have been made to update and digitize flood maps. 
Local communities and States work closely with FEMA to provide the most 
up-to-date data on flood risk. Any interested party may ask community 
officials to submit a map revision request to FEMA in accordance with 
44 CFR part 65 of the NFIP regulations. Factors that influence when the 
maps are updated are: (1) When climatological or physical changes in 
watersheds occur, or (2) when mapping methodologies are improved.

IV. Regulatory Requirements

A. National Environmental Policy Act

    FEMA has considered this rule in accordance with its implementing 
regulations for complying with the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321-4365), which are found at 44 CFR part 10. 
The rulemaking addresses applicant planning requirements, as well as 
eligibility, funding increases, and cost sharing/funding incentives 
relating to certain disaster mitigation programs and does not change 
the type or nature of mitigation actions that may be funded. This 
rulemaking would neither individually nor cumulatively have a 
significant effect on the human environment and, therefore, neither an 
environmental assessment nor an environmental impact statement is 
required. This rulemaking is among the category of actions included in 
the Categorical Exclusions listed at paragraph 10.8(d)(2)(ii), which 
excludes the preparation, revision and adoption of regulations from the 
preparation of an environmental assessment or environmental impact 
statement, where the rule relates to actions that qualify for 
categorical exclusions. The related actions of the development of plans 
and administrative activities that are included in this rule are also 
categorically excluded under Sec.  10.8 paragraphs (d)(2)(i) and 
(d)(2)(iii). FEMA received no public comments on the IR regarding its 
NEPA determination.

B. Executive Order 11988, Floodplain Management

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 11988, Floodplain Management. FEMA's policy, 
procedures, and responsibilities in implementing this Executive Order 
are set forth in 44 CFR part 9. FEMA's floodplain management 
regulations are intended to avoid long and short term adverse impacts 
associated with the occupancy and modification of floodplains; to avoid 
direct and indirect support of floodplain development whenever there is 
a practical alternative; to reduce the risk of flood loss; to promote 
the use of nonstructural flood protection methods to reduce the risk of 
flood loss; to minimize the impacts of floods on human health, safety 
and welfare; to restore and preserve the natural and beneficial values 
served by floodplains; and to adhere to the objectives of the Unified 
National Program for Floodplain Management. As stated in the 
rulemaking, the purpose of the SRL and FMA programs is to mitigate 
insured property losses from floods, thereby minimizing impacts to the 
NFIF, which is consistent with the intent of the Executive Order. In 
addition, for project activities funded through the SRL and FMA 
programs, each project will go through the environmental review 
process, which will include compliance with Executive Order 11988. FEMA 
received no public comments on the IR regarding its Executive Order 
11988 determination.

C. Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866, a significant regulatory action is 
subject to the Office of Management and Budget (OMB) review and the 
requirements of the Executive Order. The Executive Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact or entitlements, grants, 
user fees, or loan programs or the right and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This final rule adopts the regulations established in the IR with a 
few nonsignificant changes that are a logical outgrowth from the IR. 
This final rule does not meet the criteria under paragraphs 2, 3, or 4 
of the provision of the Executive Order. In addition, FEMA determined 
that it is not likely to have a significant economic impact of $100 
million or more per year (under paragraph 1 of this provision). This 
rule has not been reviewed by OMB.
    This final rule is intended to have a positive impact on State, 
local, and Indian Tribal governments. The new SRL program and the 
modified FMA program assist State, local, and Indian Tribal governments 
in reducing the loss of life and property from flooding events by 
providing additional grant resources and the ability to increase the 
Federal cost share for projects mitigating SRL properties. The FMA is 
an annual grant program created with the goal of reducing or 
eliminating claims under the NFIP. The SRL pilot program provides 
funding to assist States and communities in implementing measures to 
reduce or eliminate the long-term risk of flood damage to severe 
repetitive loss structures insured under the NFIP, therefore reducing 
payments from the NFIF. The SRL program differs from FEMA's other 
mitigation grant programs, as those property owners who decline offers 
of mitigation assistance will be subject to increases to their flood 
insurance premium rates. This final rule also implements changes to the 
FMA program by allowing for up to a 90 percent Federal cost share for 
the mitigation of severe repetitive loss properties (the standard 
Federal cost share is 75 percent). While the SRL and FMA programs will 
be implemented as separate programs with different funding accounts, 
they are similar in their goals and purpose. Therefore, FEMA has 
included both of these programs into one implementing regulation to 
ensure consistency between the programs.
    The primary economic impact of the final rule is defined as the 
additional transfer of funding from FEMA to State, local, and Indian 
Tribal governments to implement measures to reduce or eliminate the 
long-term risk of flood

[[Page 47479]]

damage to severe repetitive loss structures. FEMA made conservative 
assumptions in order not to under estimate the economic impact of the 
final rule. Historically, the FMA program has provided $20 million in 
grants on an annual basis. The NFIA, as amended, authorizes the 
appropriations for the existing FMA program to be increased from $20 
million to $40 million per year. Congressional appropriators have 
gradually increased the funding for this program, and the FMA program 
may eventually reach its total authorized $40 million cap per year.
    In fiscal year 2008, FEMA awarded $38 million for the mitigation of 
173 properties at an average of $220,000 per property under the SRL 
pilot program. In fiscal year 2009, FEMA expects to award $50 million 
for the mitigation of 227 properties also at an average of $220,000 per 
property. To date, no one has refused the offer of mitigation or 
appealed, therefore no premiums have increased.
    The purpose of the SRL grant program is to reduce or eliminate 
claims through flood mitigation projects that would result in the 
greatest savings to the NFIF. The two most common types of flood 
mitigation projects are elevation of a flood prone structure, and 
acquisition and demolition or relocation of a flood prone structure. In 
2006, the NFIP paid a total of $617.28 million for claims with an 
average claim payment of $25,545. Severe Repetitive Loss properties 
account for far less than 1 percent of the current NFIP policies, yet 
these properties account for over 7 percent of the total amount paid in 
claims. Approximately, 8,544 properties were identified as meeting the 
definition of severe repetitive loss, among which 1,067 SRL properties 
were damaged by flood and paid $46.21 million in 2006 (or $49.35 
million in 2008, if adjusted to reflect inflation). Assuming that all 
400 SRL properties (173 in FY08 + 227 in FY09) have accepted mitigation 
offers, 4.7 percent of the 8,544 SRL properties will lower or eliminate 
the risk of future flood damages by the end of fiscal year 2009. 
Therefore, the reduction in claims paid for SRL properties is estimated 
at up to $2.31 million per year (4.7 percent x $49.35 million).
    Assuming that the FMA program reaches its $40 million cap per year, 
the net economic impact of the final rule is estimated to be up to 
$61.69 million per year. Table 1 details the annual impact of the final 
rule. The NFIA, as amended, authorizes the SRL program through the end 
of fiscal year 2009; therefore, the impact of this rule will be reduced 
by $44 million in fiscal year 2010 and beyond.

              Table 1--Net Annual Impact of the Final Rule
                               [in 2008 $]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FMA Program.............................................     $20,000,000
SRL Program.............................................     *44,000,000
National Flood Insurance Fund...........................     (2,310,000)
                                                         ---------------
    Total...............................................      61,690,000
------------------------------------------------------------------------
* Average of $38 million in FY 2008 and $50 million in FY 2009.

D. Executive Order 12898, Environmental Justice

    In accordance with Executive Order 12898, Federal Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations, 59 FR 7629, Feb. 16, 1994, FEMA incorporates environmental 
justice into our policies and programs. The Executive Order requires 
each Federal agency to conduct its programs, policies, and activities 
that substantially affect human health or the environment, in a manner 
that ensures that those programs, policies, and activities do not have 
the effect of excluding persons from participation in our programs, 
denying persons the benefits of our programs, or subjecting persons to 
discrimination because of their race, color, or national origin.
    This rule implements the SRL program, providing mitigation grants 
to severe repetitive loss properties, and improves the FMA program and 
the mitigation planning requirements. This rule also clarifies and 
simplifies the planning requirements for Indian Tribal governments. No 
action in this rule will have a disproportionately high or adverse 
human health and environmental effect on any segment of the population. 
FEMA received no comments during the IR comment period that disagreed 
with this determination.

E. Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 
3501-3520, OMB has approved use of OMB Numbers 1660-0025, FEMA 
Emergency Preparedness and Response Directorate Grants Administration 
Forms under 44 CFR parts 78, 79, and 206 in this rule; 1660-0062, 
State/Local/Tribal Hazard Mitigation Plans--Section 322 of the Disaster 
Mitigation Act of 2000 under 44 CFR part 201; 1660-0103, Property 
Acquisition and Relocation for Open Space under 44 CFR part 80; and 
1660-0104, Severe Repetitive Loss (SRL) Appeals process under 44 CFR 
part 79. The approved collections have gone through the OMB's normal 
clearance procedures in accordance with the provisions of OMB 
regulation at 5 CFR 1320.10. Use of these collections, under this final 
rule, does not impose addition burden and are approved for use until 
August 31, 2011.
    The information collection activity under the approved OMB 
information collection 1660-0072, Mitigation Grant Programs/e-Grants 
(previously named Flood Mitigation