FEMA's Hazard Mitigation Assistance and Planning Regulations, 53474-53514 [2020-16004]

Download as PDF 53474 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules SUPPLEMENTARY INFORMATION: DEPARTMENT OF HOMELAND SECURITY I. Public Participation Federal Emergency Management Agency 44 CFR Parts 77, 78, 79, 80, 201, and 206 [Docket ID: FEMA–2019–0011] RIN 1660–AA96 FEMA’s Hazard Mitigation Assistance and Planning Regulations Federal Emergency Management Agency, DHS. ACTION: Notice of proposed rulemaking. AGENCY: The Federal Emergency Management Agency (FEMA) proposes to amend its Hazard Mitigation Assistance (HMA) program regulations to reflect current statutory authority and agency practice. FEMA’s HMA program regulations consist of the Flood Mitigation Assistance (FMA) grant program, the Hazard Mitigation Grant Program (HMGP), financial assistance for property acquisition and relocation of open space, and mitigation planning program regulations. FEMA proposes to revise the FMA grant program regulations to incorporate changes made by amendments to the National Flood Insurance Act of 1968 (NFIA). Finally, FEMA proposes to update terms and definitions throughout the HMA and Mitigation Planning program regulations to better align with uniform administrative requirements that apply to all Federal assistance. DATES: Comments are due on or before October 27, 2020. ADDRESSES: You may submit comments, identified by Docket ID: FEMA–2019– 0011, by one of the following methods: Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. Mail/Hand Delivery/Courier: Regulatory Affairs Division, Office of Chief Counsel, Federal Emergency Management Agency, Room 8NE, 500 C Street, SW, Washington, DC 20472– 3100. To avoid duplication, please use only one of these methods. All comments received will be posted without change to https://www.regulations.gov, including any personal information provided. For instructions on submitting comments, see the Public Participation portion of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Katherine Fox, Assistant Administrator for Mitigation, Federal Emergency Management Agency, 202–646–1046, Katherine.Fox5@fema.dhs.gov. SUMMARY: VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 We encourage you to participate in this rulemaking by submitting comments and related materials. We will consider all comments and material received during the comment period. If you submit a comment, identify the agency name and the docket ID for this rulemaking, indicate the specific section of this document to which each comment applies, and give the reason for each comment. You may submit your comments and material by electronic means, mail, or delivery to the address under the ADDRESSES section. Please submit your comments and material by only one means. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal e-Rulemaking Portal at https://www.regulations.gov, and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to read the Privacy and Security Notice that is available via a link on the homepage of https://www.regulations.gov. Viewing comments and documents: For access to the docket to read background documents or comments received, go to the Federal eRulemaking Portal at https:// www.regulations.gov. Background documents and submitted comments may also be inspected at FEMA, Office of Chief Counsel, Room 8NE, 500 C Street SW, Washington, DC 20472–3100. Public Meeting: We do not plan to hold a public meeting, but you may submit a request for one at the address under the ADDRESSES section explaining why one would be beneficial. If FEMA determines that a public meeting would aid this rulemaking, it will hold one at a time and place announced by a notice in the Federal Register. II. Background A. Overview of Hazard Mitigation Assistance Programs FEMA’s Hazard Mitigation Assistance (HMA) grant programs provide funding for eligible mitigation activities that reduce disaster losses and protect life and property from future disaster damages. FEMA currently administers three hazard mitigation assistance programs under the HMA umbrella: (1) The Flood Mitigation Assistance (FMA) program (a grant program, described in 44 CFR parts 78 and 79); (2) the Hazard Mitigation Grant Program (HMGP) (44 CFR part 206, subpart N); and (3) the Pre-Disaster Mitigation (PDM) program PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 (implemented via guidance and the annual grants process without corresponding regulations). Mitigation planning requirements (44 CFR part 201) and requirements for property acquisition and relocation for open space (44 CFR part 80) apply to all three HMA programs. The Hazard Mitigation Assistance Guidance (hereinafter ‘‘HMA Guidance’’) provides comprehensive guidance for all three HMA programs and supplements the FMA program and HMGP program regulations.1 The majority of the revisions FEMA proposes in this rulemaking apply to the FMA regulations. FEMA proposes a few changes to the HMGP regulations as well. Below, FEMA provides a general description of the FMA and HMGP programs, and then a more detailed discussion of how FEMA administers the FMA program. 1. Flood Mitigation Assistance Program (FMA) Section 1366 of the National Flood Insurance Act of 1968 (NFIA), 42 U.S.C. 4104c, as amended, authorized the FMA program to reduce or eliminate claims under the National Flood Insurance Program (NFIP). The FMA program provides funds on an annual basis for projects to reduce or eliminate risk of flood damage to buildings, manufactured homes, and other structures insured under the NFIP. See 42 U.S.C. 4104c(a); 44 CFR 79.1(c). Currently, 44 CFR parts 78 and 79 prescribe actions, procedures, and requirements for the administration of the FMA program. The requirements in part 78 applied only to those FMA grants for which the application period opened prior to December 3, 2007. See 44 CFR 78.1(a). The requirements in part 79 apply to all FMA funds awarded on or after December 3, 2007. See 44 CFR 79.1(a). In accordance with 44 CFR part 201, ‘‘Mitigation Planning,’’ all State and Tribal applicants must have a FEMAapproved State or Tribal mitigation plan as a condition of receiving any FEMA mitigation grant, including FMA grants. See 44 CFR 201.4(a), 201.7(a)(1). Subapplicants consisting of local governments and Tribal governments 1 Federal Emergency Management Agency, Hazard Mitigation Assistance Guidance (hereinafter ‘‘HMA Guidance’’), Feb. 27, 2015, available at https://www.fema.gov/media-library-data/ 142498316544938f5dfc69c0bd4ea8a161e8bb7b79553/HMA_ Guidance_022715_508.pdf (last accessed Feb. 13, 2020). As noted in this preamble, the PDM program does not have implementing regulations, but rather is implemented through the annual grants process, including the Notice of Funding Opportunity, and other policy and guidance statements, including the HMA Guidance. E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules must have a FEMA-approved mitigation plan in order apply for and receive mitigation project grants under FMA and PDM. See 44 CFR 201.6(a), 201.7(a)(3). 2. Hazard Mitigation Grant Program (HMGP) Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), 42 U.S.C. 5170c, authorized HMGP. Implementing regulations for HMGP are found at 44 CFR part 206, subpart N. The key purpose of HMGP is to substantially reduce the risk of future damage, hardship, loss, or suffering in any area affected by a major disaster. See 42 U.S.C. 5170c(a). HMGP funding is available, when authorized under a Presidential major disaster declaration,2 in the areas requested by the Governor or chief executive of the Tribe. See id.; HMA Guidance Part 1.B(1), p. 4. State agencies, local governments, private nonprofit organizations, and Indian Tribal governments are eligible to apply for HMGP assistance.3 The level of HMGP funding available for a given disaster is based on a percentage of the estimated total Federal assistance available under the Stafford Act, excluding administrative costs, for each Presidential major disaster declaration. See 44 CFR 206.432(b). States and Indian Tribal governments applying for HMGP funding must have a FEMAapproved State or Tribal mitigation plan at the time of the Presidential major disaster declaration and at the time FEMA obligates HMGP funding. See 42 U.S.C. 5165; 44 CFR 201.4. Subapplicants, including local governments and Indian Tribal governments, must have a FEMAapproved mitigation plan in order to receive HMGP subawards. See 42 U.S.C. 5165(a), (b); 44 CFR 201.6(a), 201.7(a), 206.434(b). 3. Property Acquisition and Relocation for Open Space Part 80 provides guidance on the administration of FEMA mitigation assistance for projects to acquire 2 Note that there is an exception to the requirement that there be a Presidential major disaster declaration to receive HMGP funding. This exception is HMGP Post Fire, which provides mitigation assistance under HMGP generally for wildfire. It is triggered not by a Presidential major disaster declaration, but by a Fire Management Assistance Grant declaration under section 420 of the Stafford Act. See 42 U.S.C. 5170c(a). 3 44 CFR 206.434(a). Eligible subapplicants apply to the recipient (also known as the ‘‘grantee’’) for HMGP subawards. The recipient may be the State for which the major disaster is declared, or an Indian Tribal government choosing to act as a recipient instead of a subrecipient. See 44 CFR 206.431, definition of ‘‘grantee.’’ VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 property for open space purposes under all FEMA HMA programs. See 44 CFR 80.1. B. FMA Program Administration FMA is a non-disaster program allowing communities to complete mitigation activities so that structures insured under the NFIP are protected from future damages and the need for future insurance claims is lessened. FMA grants are subject to availability of annual Federal appropriations, as well as to any program-specific directive or restrictions with respect to such funds. The FMA is a competitive grant program, meaning FEMA reviews the applications submitted and selects the most qualified for an award. Each year, FEMA publishes a Notice of Funding Opportunity (NOFO) announcing the availability of funding and program requirements.4 In addition, projects must meet the minimum eligibility criteria identified in 44 CFR 79.6. The criteria ensure that FEMA selects costeffective and beneficial mitigation projects for FMA funding. Applicants for the FMA program can be States and/or Indian Tribal governments.5 See 44 CFR 79.2(b). Subapplicants can be a State agency, community,6 or Indian Tribal government.7 See 44 CFR 79.2(i). Subapplicants must participate in the NFIP. See 44 CFR 79.6(a)(1). Subapplicants that have withdrawn from the NFIP, or those that FEMA has suspended for failure to comply with floodplain management requirements, are not eligible. See 44 CFR 79.6(a)(3). Subapplicants submit their applications to the applicant during the open application cycle as noted in the NOFO. Applicants then select, prioritize, and forward subapplications to FEMA by the deadline established in the NOFO. FEMA awards FMA funds to 4 The most recent NOFO was posted on www.grants.gov and can be viewed at this link: https://www.grants.gov/web/grants/searchgrants.html. 5 An Indian Tribal government is any Federally recognized governing body of an Indian or Alaska Native Tribe, band, nation, pueblo, village, or community that the Secretary of Interior acknowledges to exist as an Indian Tribe under the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. This does not include Alaska Native corporations, the ownership of which is vested in private individuals. 44 CFR 79.2(e). 6 Community means a political subdivision, including any Indian Tribe, authorized Tribal organization, Alaska Native village or authorized native organization, that has zoning and building code jurisdiction over a particular area having special flood hazards, and is participating in the NFIP, or a political subdivision of a State, or other authority that is designated by a political subdivision to develop and administer a mitigation plan. 44 CFR 79.2(c). 7 See supra note 5. PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 53475 the applicant, who becomes the recipient. The recipient then disburses funding for the approved subawards to the subapplicants, who become subrecipients. Recipients and subrecipients must comply with all program requirements and other applicable Federal, State, territorial, and Tribal laws and regulations. See 44 CFR 79.3(b)(6) and (d)(4). A grant recipient/subrecipient must use FMA funds for mitigation planning and mitigation projects that will reduce or eliminate the risk of flood damages to properties insured under the NFIP. See 44 CFR 79.6(c). An example of a hazard mitigation project is the elevation of a home to reduce risk of flood damage. Eligible mitigation projects must be cost-effective or able to eliminate future payments from the National Flood Insurance Fund (NFIF) for severe repetitive loss structures through an acquisition or relocation activity. See 42 U.S.C. 4104c(c)(2)(A). To demonstrate cost-effectiveness, a project’s anticipated benefits must be equal to or more than the cost of implementing the project, which is demonstrated through a benefit-cost analysis that compares the cost of the project to the benefits anticipated to occur over the lifetime of the project.8 FMA applicants must have a FEMAapproved State or Tribal mitigation plan as a condition of receiving an FMA award. See 44 CFR 79.6(b)(1), 201.4(a), 201.7(a)(1). FMA subapplicants must have a FEMA-approved mitigation plan in order to apply for and receive mitigation project grants. See 44 CFR 79.6(b)(2), 201.6(a), 201.7(a)(3). Applicants/subapplicants must propose projects for FMA grants that are consistent with the goals and objectives of the State or Tribal Mitigation Plan, and, for subawards, the Local or Tribal Mitigation Plan.9 C. Statutory Changes to FMA The Biggert-Waters Flood Insurance Reform Act of 2012 (BW–12), Public Law112–141, 126 Stat. 916, reformed and streamlined the NFIA’s hazard mitigation grant programs. Before BW– 12, the NFIA authorized three distinct grant programs: (1) The FMA program (44 CFR part 79); (2) the Repetitive Flood Claims (RFC) program (implemented through guidance); and (3) the Severe Repetitive Loss (SRL) program (44 CFR part 79). BW–12 eliminated the RFC and SRL programs and consolidated aspects of those 8 See HMA Guidance, Part III.E.3, CostEffectiveness, p. 44. 9 42 U.S.C. 4104c(c)(1); see HMA Guidance, Part III.E.5, Hazard Mitigation Plan Requirement, p. 44. E:\FR\FM\28AUP2.SGM 28AUP2 53476 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules programs into a reformed FMA program.10 1. Changes to Method of Program Funding Before BW–12, FEMA allocated FMA program funding to States each fiscal year based upon the number of NFIP policies within the State, the number of repetitive loss structures within the State, and other criteria the Administrator determined to be in the best interests of the NFIF.11 FEMA allocated funding under the SRL program to States each fiscal year based upon the percentage of the total number of severe repetitive loss properties located within that State.12 Funds allocated to States that chose not to participate in either the FMA or SRL program in any given year were reallocated to participating States and Indian Tribal applicants.13 BW–12 replaced this process with a fully competitive program under which, as described above, FEMA selects subapplications against agency priorities identified in annual appropriations and the NOFO. In addition to involving a simpler formula that is easier to implement, this allows FEMA to better prioritize funding awards to the most at-risk (i.e., severe repetitive loss) properties. 2. Changes to Cost Share Before BW–12, FEMA generally contributed up to 75 percent of the 10 The RFC and SRL programs were authorized by the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004, Public Law 108–264, 118 Stat. 712. The RFC program was designed to reduce the long-term risk of flood damage to structures insured under the NFIP that have had one or more claim payments for flood damage. RFC funds were used to mitigate structures located within a State or community that were not eligible to receive funding under the FMA program at the time. Under the RFC program, funds could only be awarded if the State and community could not meet the FMA’s cost share requirement, or if the State or community lacked the capacity to manage the activity under the FMA program. The SRL program was a voluntary pilot program designed to reduce or eliminate the long-term risk of flood damage to severe repetitive loss residential structures insured under the NFIP. Under the SRL program, an SRL property was defined as a residential property that is covered under an NFIP flood insurance policy and: (a) That has at least four NFIP claim payments (including building and contents) over $5,000 each, and the cumulative amount of such claims payments exceeds $20,000; or (b) For which at least two separate claims payments (building payments only) have been made with the cumulative amount of the building portion of such claims exceeding the market value of the building. At least two of the referenced claims must have occurred within any 10-year period, and must be greater than 10 days apart. 11 Public Law 108–264, 118 Stat. 721; 44 CFR 79.4(a)(2). 12 Public Law 108–264, 118 Stat. 716; 44 CFR 79.4(a)(1). 13 44 CFR 79.4(b). VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 eligible activity costs for mitigation projects under the FMA and SRL programs.14 However, FEMA made available an increased Federal cost share of up to 90 percent for the mitigation of severe repetitive loss properties if the applicant had a repetitive loss strategy in its approved State or Tribal mitigation plan.15 If neither the applicant nor the subapplicant could meet the FMA nonFederal share requirement, FEMA made available up to 100 percent of the project cost under the RFC program.16 Under the FMA program, as amended by BW–12, FEMA may contribute up to 90 percent of the eligible costs of projects that mitigate repetitive loss structures, and up to 100 percent of the eligible costs of projects that mitigate severe repetitive loss structures.17 For all other mitigation activities, including activities to properties that are NFIPinsured but do not meet the repetitive loss or severe repetitive loss definitions, FEMA may contribute up to 75 percent of the eligible costs.18 These changes to the FMA program resulted in increased funding to the most vulnerable properties (severe-repetitive loss properties) and decreased funding to less vulnerable (repetitive loss) properties. 3. Other Changes BW–12 made a number of other changes to the FMA program, including eliminating the cap on FMA funding for States and communities (but not changing the overall amount of grant funding available); eliminating the limit on in-kind contributions for the nonFederal cost share; limiting funds for the development or update of mitigation plans to $50,000 Federal share to any applicant or $25,000 Federal share to any subapplicant; and removing the restriction on awarding State or community planning grants more than once every 5 years. III. Proposed Rule and Section-bySection Analysis FEMA implemented the provisions of BW–12 that affected the HMA grant programs through the HMA Guidance.19 14 44 CFR 79.4(c)(1). CFR 79.4(c)(2). 16 Public Law 108–264, 118 Stat. 722. 17 42 U.S.C. 4104c(d). The term ‘‘repetitive loss structure’’ is defined at 42 U.S.C. 4104c(h)(2) (crossreference to 42 U.S.C. 4121(a)(7)). The term ‘‘severe repetitive loss structure’’ is defined at 42 U.S.C. 4104c(h)(2)(3). 18 42 U.S.C. 4104c(d). 19 While the current HMA Guidance, supra note 1, reflects the changes required by BW–12, these changes were first implemented in the Fiscal Year 2013 version of the HMA Guidance. See Fiscal Year 2013 Hazard Mitigation Assistance Unified 15 44 PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 FEMA now proposes to update the FMA program regulations (44 CFR parts 78 and 79) to reflect the revisions made by BW–12. This rule proposes to remove part 78 in its entirety, redesignate part 79 as part 77, and revise the FMA regulations which would be located in the new part 77. FEMA proposes to make the following revisions pursuant to BW–12: • Remove regulations pertaining to the SRL program; • revise the cost share provisions to reflect the matching requirements established by BW–12; • eliminate the cap on FMA funding for States and communities; • eliminate the limit on in-kind contributions for the non-Federal cost share; • specify that elevation, relocation or floodproofing of utilities are eligible activities; • clarify that the required flood mitigation plan may be part of a community’s multi-hazard mitigation plan; • limit funds for the development or update of mitigation plans to $50,000 Federal share to any applicant or $25,000 Federal share to any subapplicant; and • remove the restriction on awarding State or community planning grants only once every 5 years. FEMA also proposes revisions to streamline the FMA regulations and clarify current practice. FEMA describes these revisions in detail in this section. FEMA proposes to update terms and references throughout the various HMArelated regulations, including the hazard mitigation assistance and planning regulations in 44 CFR parts 80 (Property Acquisition and Relocation for Open Space), 201 (Mitigation Planning), and 206 subpart N (HMGP). On December 26, 2013, the Office of Management and Budget (OMB) finalized government-wide guidance entitled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.20 These standard requirements for Federal awards are codified at 2 CFR part 200. The regulations at 2 CFR part 200 apply to FEMA awards made on or after December 26, 2014, and to awards made under major disaster declarations on or after that date.21 In this proposed Guidance, July 12, 2013, Part I.B.1, Programmatic Changes, pp. 4–5, available at https:// www.fema.gov/media-library-data/ 15463cb34a2267a900bde4774c3f42e4/FINAL_ Guidance_081213_508.pdf (last accessed Jan 8, 2020). 20 78 FR 78589. 21 As part of a joint interim final rule effective December 26, 2014, the Department of Homeland E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules rule, FEMA proposes to replace outdated terms and definitions with substantively similar terms and definitions that align with 2 CFR part 200 and the HMA Guidance. These are nonsubstantive revisions intended to simplify definitions and improve consistency among FEMA’s HMA programs. A. 44 CFR Part 78, Flood Mitigation Assistance Part 78 applies to the administration of funds under the FMA program for which the application period opened on or before December 3, 2007. Because all funds appropriated for FMA before December 3, 2007, have been expended, it is unnecessary to retain part 78 and therefore, FEMA proposes to remove part 78 in its entirety. B. 44 CFR Part 79, Flood Mitigation Grants The regulations governing the current FMA program are at 44 CFR part 79. FEMA proposes to redesignate part 79 as part 77, which is currently reserved, to establish the revised FMA program regulations. FEMA proposes to reserve part 79. Following is a detailed discussion of the proposed revisions to part 79 (proposed to be redesignated as part 77). 1. Part 79 (Proposed Part 77) Authority FEMA proposes to revise the authority citation for part 79 (proposed part 77) to remove historical authorities relating to FEMA’s organization. FEMA proposes to remove the references to the Reorganization Plan No. 3 of 1978, Executive Order 12127, Executive Order 12148, and Executive Order 13286. The Reorganization Plan and Executive Orders 12127 and 12148 established FEMA as an agency in 1979 and established its functions. Executive Order 13286 revised Executive Order 12148 and transferred some of FEMA’s authorities to the Department of Homeland Security (DHS). FEMA proposes to remove these cites but retain the citation to the Homeland Security Act of 2002, 6 U.S.C. 101 et seq., which provided organic authority for FEMA and made it a component agency of DHS. FEMA proposes to retain the citations to the NFIA (42 U.S.C. 4001 et seq.; 42 U.S.C. 4104c, 4104d) as they are the main authorities for this part. Security (of which FEMA is a component) adopted the requirements of 2 CFR part 200 at 2 CFR part 3002. 79 FR 75871 (Dec. 19, 2014). VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 2. Section 79.1 (Proposed § 77.1) Purpose FEMA proposes to change the title from ‘‘Purpose’’ to ‘‘Purpose and applicability’’ to reflect the content of the section. FEMA proposes to revise paragraph (a), addressing the purpose of the part, to incorporate language from current paragraph (c) addressing the purpose of the FMA program. Paragraph (c) states that the FMA program is to provide financial assistance to ‘‘State and local governments’’ to reduce the risk of flood damage to NFIP-insured structures. FEMA proposes to replace ‘‘local governments’’ with ‘‘communities’’ because the term ‘‘community’’ is more inclusive of the entities eligible for assistance.22 FEMA’s definition of ‘‘community’’ at 44 CFR 79.2(c) includes Tribes as well as local governments. In addition to States and communities, FEMA proposes to also include Indian Tribal governments in revised paragraph (a). Indian Tribal governments have a unique and direct relationship with the Federal Government and are recognized as distinct sovereign entities.23 While Indian Tribal governments can assume the responsibilities of the community (as subapplicant or subrecipient, when applying through the State), they can also be direct recipients of FMA funding. See 44 CFR 79.2(c), 79.2(d), 79.3(c)(2), and 79.3(c)(3). That an Indian Tribal government is eligible to apply directly to FEMA for FMA funding is already established in the current program regulations in part 79. See 44 CFR 79.2(d) and 79.3(c)(2). Including Indian Tribal governments in the purpose statement is consistent with the rest of the substantive FMA program regulations in part 79 and gives Indian Tribal governments the level of recognition commensurate with States. FEMA also proposes to remove references to the SRL program in paragraph (a), because BW–12 eliminated the SRL program. FEMA stopped issuing SRL grants in Fiscal Year 2013. FEMA also proposes to remove current paragraph (b), which describes the purpose of the SRL program. FEMA proposes to add a new paragraph (b) to address the 22 See 42 U.S.C. 4104c(a) ‘‘The Administrator shall carry out a program to provide financial assistance to States and communities.’’ FEMA defines ‘‘community’’ in the current regulations at 44 CFR 79.2(c); the definition includes local governments and Tribes. 23 See FEMA Tribal Policy, FEMA Policy #305– 111–1, Dec. 27, 2016, available at https:// www.fema.gov/media-library-data/1483536222523e549608aa77ec6cb623fae5d5de82930/FEMA_ Tribal_Policy.pdf (last accessed Feb. 13, 2020). PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 53477 applicability of the part to the administration of funds under the FMA program for which the application period opens on or after the effective date of the rule. Finally, FEMA proposes to remove paragraph (c), as FEMA has incorporated the language describing the purpose of the FMA program into revised paragraph (a). 3. Section 79.2 (Proposed § 77.2) Definitions FEMA proposes to revise the definitions section to reflect changes required by BW–12. FEMA proposes to revise the definition of ‘‘community’’ to reflect the definition provided in BW– 12.24 This change is intended to mirror the statutory definition and is not a substantive change to the current definition at 44 CFR 79.2(c). FEMA proposes to replace the definition of ‘‘severe repetitive loss properties’’ with the definition of ‘‘severe repetitive loss structure’’ from BW–12. The definition of ‘‘severe repetitive loss properties’’ at current 44 CFR 79.2(h) reflects the pre-BW–12 definition that was included in the statutory section authorizing the SRL pilot program.25 BW–12 removed the statutory section for the SRL pilot program, including the definition of ‘‘severe repetitive loss property,’’ and established a definition for ‘‘severe repetitive loss structure’’ that is applicable to the FMA program.26 The BW–12 definition states that a severe repetitive loss structure is one for which four or more separate claims payments have been made with the amount of each claim exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000. FEMA proposes to retain the provision providing that the amount of each claim includes building and contents payments. This is consistent with FEMA’s prior interpretation of the definition of ‘‘severe repetitive loss property’’ as well as the HMA Guidance.27 The BW–12 definition also states that in the alternative, a severe repetitive loss structure is one for which at least two separate flood insurance claims payments have been made, with the cumulative amount of such claims exceeding the value of the insured structure. FEMA proposes to retain the statement that that the claims payments include building payments only because weighing the value of the insured 24 See 42 U.S.C. 4104c(h)(1). Public Law 108–264, 118 Stat. 714. 26 42 U.S.C. 4104c(h)(3). 27 See 44 CFR 79.2(h)(1); HMA Guidance, Part VIII.C.1, Eligible Properties, p. 116. 25 See E:\FR\FM\28AUP2.SGM 28AUP2 53478 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules structure against the amount of building payments is a more direct comparison than weighing the value of the insured structure against the amount of both building and contents payments. This is consistent with FEMA’s prior interpretation of the definition of ‘‘severe repetitive loss property’’ as well as the HMA Guidance.28 FEMA proposes to add a definition for ‘‘repetitive loss structure’’ to reflect the definition provided in BW–12. BW–12 established a distinction between repetitive loss structures and severe repetitive loss structures for purposes of the FMA program (which allows FEMA to better target funding based on a property’s risk of damage). BW–12 defined the term ‘‘repetitive loss structure’’ to mean ‘‘a structure covered by a contract for flood insurance that— (A) has incurred flood-related damage on 2 occasions, in which the cost of repair, on the average, equaled or exceeded 25 percent of the value of the structure at the time of each such flood event; and (B) at the time of the second incidence of flood-related damage, the contract for flood insurance contains increased cost of compliance coverage.’’ FEMA’s proposed definition of ‘‘repetitive loss structure’’ parrots the statutory definition. See 42 U.S.C. 4121(a)(7) (cross referenced in 42 U.S.C. 4104c(h)(2)). FEMA proposes to remove the definitions of ‘‘market value’’ and ‘‘multifamily property,’’ currently found at 44 CFR 79.2(f) and (g), respectively, because the statutory definitions of ‘‘severe repetitive loss structure’’ and ‘‘repetitive loss structure’’ no longer include these terms and it is therefore not necessary to use or define these terms in the regulations. In addition to the revisions to the definitions made pursuant to BW–12, FEMA proposes to add terms and to replace outdated terms and definitions with substantively similar terms and definitions that better align with 2 CFR part 200 and the HMA Guidance. These are nonsubstantive revisions intended to simplify definitions and improve consistency among FEMA’s HMA programs. FEMA proposes to add definitions for ‘‘closeout,’’ ‘‘Federal award,’’ ‘‘management costs,’’ ‘‘passthrough Entity,’’ and ‘‘State.’’ FEMA proposes to add a definition for ‘‘closeout’’ which is nearly identical to the definition in 2 CFR 200.16. FEMA proposes to add this definition for ease of the reader because the term is used in proposed part 77, and also to establish that it has the same meaning 28 See 44 CFR 79.2(h)(2); HMA Guidance, Part VIII.C.1, Eligible Properties, p. 116. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 as in the grants management regulations at 2 CFR part 200. This is a nonsubstantive change that reflects current practice. FEMA proposes to add a definition for ‘‘Federal award’’ to reflect the definition in 2 CFR 200.38(a)(1),29 with two exceptions. First, FEMA proposes to use the terms ‘‘recipient’’ and ‘‘subrecipient’’ instead of the term ‘‘nonFederal entity.’’ The term ‘‘non-Federal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under the FMA program. While FMA recipients and subrecipients are ‘‘non-Federal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions in the FMA regulations so that they are program-specific. Second, FEMA proposes to clarify that the terms ‘‘award’’ and ‘‘grant’’ may also be used to describe a ‘‘Federal award’’ under the FMA program regulations. This is a nonsubstantive change to clarify that the terms used throughout proposed part 77 are interchangeable. FEMA proposes to add a definition for ‘‘management costs.’’ ‘‘Management costs’’ are referenced throughout the FMA program regulations, but this term is not currently defined in part 79. FEMA proposes to define ‘‘management costs’’ consistent with existing FEMA regulations 30 and the HMA Guidance.31 FEMA proposes to add a definition for ‘‘pass-through entity’’ which is substantively the same as the definition in 2 CFR 200.74, with one exception. FEMA proposes to use the terms ‘‘recipient’’ and ‘‘subrecipient’’ instead of the term ‘‘non-Federal entity.’’ The term ‘‘non-Federal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under the FMA program. While FMA recipients and subrecipients are ‘‘nonFederal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions in the FMA regulations so that they are program-specific. The addition of this definition is for ease of the reader since the term is used in other definitions in proposed part 77. FEMA proposes to add a definition for ‘‘State,’’ which is consistent with 2 CFR 200.90 as well as FEMA’s regulations for mitigation planning and HMGP.32 29 In 2 CFR 200.38(a)(1), ‘‘Federal award’’ means the Federal financial assistance that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity. 30 See 44 CFR 207.2. 31 See HMA Guidance, Part III, E.1.5, Management Costs, p. 41. 32 See the definition for ‘‘State’’ in the mitigation planning regulations at 44 CFR 201.2 and the definitions section of part 206 (§ 206.2(a)(22)) which applies to the HMGP program regulations at PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 Although not defined in the authorizing statute for the HMA programs, for purposes of these programs, and consistent with 2 CFR 200.90, FEMA considers a State to be any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. FEMA proposes to replace the definitions ‘‘grantee,’’ ‘‘subgrant,’’ and ‘‘subgrantee,’’ with definitions for ‘‘recipient,’’ ‘‘subaward,’’ and ‘‘subrecipient,’’ respectively, to better align with the terms and definitions used in 2 CFR part 200 and the HMA Guidance. The proposed definition of ‘‘recipient’’ is similar to the definition at 2 CFR 200.86; however, FEMA proposes to use the terms ‘‘State or Indian Tribal government’’ instead of the term ‘‘nonFederal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to the FMA program. FEMA also proposes to add that the recipient may be a pass-through entity to clarify the relationship between the terms ‘‘recipient’’ and ‘‘pass-through entity.’’ The proposed definition of ‘‘subaward’’ is the same as the definition at 2 CFR 200.92. The proposed definition of ‘‘subrecipient’’ is similar to the definition at 2 CFR 200.93; however, FEMA proposes to use the terms ‘‘State agency, community, or Indian Tribal government’’ instead of the term ‘‘nonFederal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to the FMA program. FEMA proposes to revise the definitions of ‘‘applicant’’ and ‘‘subapplicant.’’ In the definition of ‘‘applicant,’’ FEMA proposes to replace the term ‘‘grant’’ with the term ‘‘Federal award,’’ which FEMA proposes to define in proposed § 77.2(e). This is a nonsubstantive change to use the newly defined term ‘‘Federal award’’ throughout the definitions. FEMA proposes to remove the provision stating that the applicant will be accountable for the use of the funds because it only serves as a vague reference to other applicable substantive requirements and is not necessary to include in the definition of ‘‘applicant.’’ 33 FEMA also proposes to add that once funds have been awarded, the applicant becomes the recipient and may also be a passthrough entity. This is a nonsubstantive addition to clarify the relationship part 206 subpart N. See also, HMA Guidance, Part III.A, Eligible Applicants, p. 25. 33 See, e.g., 44 CFR 79.9, Grant administration, and 2 CFR 200.300–200.309, Standards for Financial and Program Management. E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules between the terms ‘‘applicant,’’ ‘‘recipient,’’ and ‘‘pass-through entity’’ for the ease of the reader. FEMA proposes to revise the definition of ‘‘subapplicant’’ by removing the reference to the SRL program which is no longer authorized pursuant to BW– 12. FEMA proposes to clarify that applications submitted by subapplicants are subapplications. These are nonsubstantive revisions intended to reflect FEMA’s current use of these terms. Finally, FEMA makes no changes to the definitions of ‘‘Indian Tribal government,’’ ‘‘Administrator,’’ and ‘‘Regional Administrator.’’ 4. Section 79.3 (Proposed § 77.3) Responsibilities In proposed § 77.3, which covers responsibilities of FEMA, the recipient, and subrecipients, FEMA proposes to remove references to the SRL program, to replace terms to conform to the revised definitions in proposed § 77.2, to remove the paragraphs addressing Indian Tribal government responsibilities (as they are covered under the recipient responsibilities), and to add monitoring and closeout provisions. Paragraph (a) addresses FEMA’s responsibilities under the FMA program. FEMA proposes to remove (a)(2), (a)(7), and (a)(8), which pertain to the former SRL program and are no longer necessary. FEMA proposes to add two paragraphs, (a)(6) and (7), regarding monitoring and closeout requirements. Consistent with 2 CFR 200.328 and 200.343, and the HMA Guidance,34 FEMA proposes to add the following FEMA responsibilities: (1) Monitoring implementation of awards through quarterly reports; and (2) reviewing all closeout documentation for compliance and sending the recipient a request for additional supporting documentation, if needed.35 These are nonsubstantive revisions intended to reflect and clarify existing requirements; they are already a part of the current grants process. Paragraph (b) addresses the responsibilities of the State. However, the paragraph actually addresses the responsibilities of all recipients, including territories and Indian Tribal governments.36 Therefore, FEMA proposes to replace ‘‘State’’ with ‘‘recipient’’ in the heading and 34 See HMA Guidance, Part II.M, Project Monitoring, and Part II.N, Closeout, pp. 23–24. 35 These requirements are covered by OMB Information Collection 1660–0072, ‘‘Mitigation Grant Programs/e-grants’’. This collection is approved by OMB until October 31, 2021. 36 See HMA Guidance, Part I.C, Roles and Responsibilities, p. 5. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 introductory paragraph of (b). As proposed in this rulemaking, the term ‘‘State’’ includes territories (see proposed § 77.2(l)), and the term ‘‘recipient’’ includes States and Indian Tribal governments (see proposed § 77.2(i)). This change is clarifying and is not substantive. The introductory paragraph of (b) states that the State will serve as the applicant and grantee through a single point of contact for the FMA and SRL programs. FEMA proposes to remove this sentence because it relates to the former FMA program and the eliminated SRL program, and it is no longer necessary to have a single point of contact as there are no longer two programs being addressed in this part. Paragraph (b)(2) states the recipient has responsibility to review and submit local mitigation plans to the FEMA Regional Administrator for final review and approval. FEMA proposes to remove this paragraph in its entirety. The requirement to submit plans for review and approval is now located in 44 CFR part 201 (local mitigation plans are specifically covered in § 201.6). FEMA prefers to refer to part 201 to avoid confusion. Repeating the same requirement in part 79 (proposed part 77) is duplicative, can cause confusion as it might appear to be a separate requirement, and is administratively burdensome if FEMA needs to make any changes, as it would have to change them in two different places in the regulations. Finally, submitting plans for review and approval is not an FMA grant requirement; the FMA requirement is to have an approved plan, which is already captured in current § 79.3(b)(1) (proposed § 77.3(b)(1)). FEMA proposes to replace the term ‘‘subgrant(s)’’ with ‘‘subaward(s)’’ in paragraphs (b)(3) (proposed (b)(2)), (b)(4) (proposed (b)(3)), and (b)(5) (proposed (b)(4)), to reflect the terminology used in 2 CFR part 200. This is a nonsubstantive change and is already used in the HMA Guidance. FEMA proposes to add two new paragraphs, (b)(5) and (6), regarding monitoring and closeout requirements. Consistent with 2 CFR 200.328 and 200.343, and the HMA Guidance,37 FEMA proposes to add the following recipient responsibilities: (1) Monitor and evaluate the progress of the mitigation activity in accordance with the approved original scope of work and budget through quarterly reports; and (2) closeout the subaward in accordance with 2 CFR 200.343 and 200.344, and 37 See HMA Guidance, Part II.M, Project Monitoring, and Part II.N, Closeout, pp. 23–24. PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 53479 applicable FEMA guidance. These are nonsubstantive revisions intended to reflect and clarify existing requirements; they are already a part of the current grants process.38 Paragraph (c) addresses the responsibilities of Indian Tribal governments acting as recipients. As these responsibilities would now be covered under paragraph (b), FEMA proposes to remove paragraph (c). Current paragraph (c)(1) states that an Indian Tribal government must have a FEMA approved Tribal mitigation plan in accordance with § 201.7. Proposed paragraph (b)(1) states this requirement generally, to cover both States and Indian Tribal governments, as proposed paragraph (b) would now cover all recipients (States or Indian Tribal governments) instead of just States. Current paragraph (c)(2) states that a federally-recognized Indian Tribal government as defined by the Federally Recognized Indian Tribe List Act of 1994, applying directly to FEMA for mitigation grant funding will assume the responsibilities of the State as the term is used in part 79, as applicant or grantee, described in current paragraphs (b)(3) through (b)(6) (i.e., the responsibilities of the State). This provision is now captured in proposed paragraph (b), which applies to all recipients, including Indian Tribal governments, since Indian Tribal governments are included in the definition of ‘‘recipient’’ in proposed § 77.2(i). Current paragraph (c)(3) states that a federally-recognized Indian Tribal government as defined by the Federally Recognized Indian Tribe list Act of 1994, applying through the State, will assume the responsibilities of the community (as the subapplicant or subgrantee) described in current paragraphs (d)(2) through (4). This provision would be captured in proposed paragraph (c), addressing the responsibilities of subrecipients (which can include Indian Tribal governments), as described below. Current paragraph (d) addresses the responsibilities of the community. FEMA proposes to redesignate paragraph (d) as paragraph (c) and to change the paragraph heading from ‘‘Community’’ to ‘‘Subrecipient.’’ The responsibilities in this paragraph apply not just to communities, but to any entity that qualifies as a subrecipient, i.e., a State agency, community, or Indian Tribal government (see proposed definition of ‘‘subrecipient’’ in 38 These requirements are covered by OMB Information Collection 1660–0072, ‘‘Mitigation Grant Programs/e-grants’’. This collection is approved by OMB until October 31, 2021. E:\FR\FM\28AUP2.SGM 28AUP2 53480 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules § 77.2(o)). This is a nonsubstantive change for clarification purposes only. FEMA proposes to replace ‘‘community’’ with ‘‘subrecipient’’ in the introductory sentence as well, and to add that this can mean subapplicant because some of these responsibilities occur before the award. This is also a nonsubstantive change for clarification purposes only. FEMA proposes to remove paragraph (d)(1), stating that the community must prepare and submit a FEMA approved local mitigation plan, consistent with 44 CFR part 201. The requirement to prepare and submit plans for review and approval is now located in 44 CFR part 201 (local mitigation plans are specifically covered in § 201.6). FEMA prefers to refer to part 201 to avoid confusion. Repeating the same requirement in part 79 (proposed part 77) is duplicative, can cause confusion as it might appear to be a separate requirement, and is administratively burdensome if FEMA needs to make any changes, as it would have to change them in two different places in the regulations. Finally, submitting plans for review and approval is not an FMA grant requirement; the requirement is to have an approved plan in order to be eligible for FMA project grants, which is already captured in current § 79.6(b)(2) (proposed § 77.6(b)(2)). Current paragraph (d)(2) states that the community (proposed: subrecipient) must complete and submit subgrant applications to the State POC for FMA planning, project and management cost subgrants, and for SRL project and management costs subgrants. FEMA proposes to replace ‘‘subgrant’’ with ‘‘subaward,’’ consistent with the terminology in 2 CFR part 200. FEMA proposes to replace ‘‘State POC’’ with ‘‘recipient’’ as ‘‘recipient’’ captures the universe of entities to which a subrecipient would submit an application (i.e., in addition to a State, the recipient can be a territory or Indian Tribal government). FEMA proposes to replace the phrase ‘‘FMA planning, project and management cost subgrants’’ with ‘‘FMA planning and project subawards’’ because FEMA proposes to replace the term ‘‘subgrant’’ with the term ‘‘subaward,’’ and because ‘‘management costs’’ are not a separate type of grant. Rather, ‘‘management costs’’ are defined under proposed § 77.2(g) and eligible as described under proposed § 77.7(a)(1). FEMA proposes to remove the clause pertaining to SRL subgrants, as the SRL program is no longer authorized under the NFIA. FEMA proposes to redesignate current paragraph (d)(2) as paragraph (c)(1). The proposed changes to paragraph (d)(2) VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 are nonsubstantive to clarify and conform the regulations with the changed definitions described above. Current paragraph (d)(3) states that the community (proposed: subrecipient) must implement all approved subgrants; notifying each holder of a record interest in severe repetitive loss properties when an offer of mitigation assistance has been made under the SRL program, and when such offer has been refused. FEMA proposes to revise this provision to simply state that the subrecipient must ‘‘implement all approved subawards.’’ As the SRL program is no longer authorized under the NFIA, the clause pertaining to SRL assistance is not necessary. However, it is a current responsibility of all subrecipients to implement any approved subawards, so FEMA proposes to retain this portion of current paragraph (d)(3). FEMA proposes to redesignate current paragraph (d)(3) as paragraph (c)(2). These are nonsubstantive clarifying revisions. FEMA proposes to add two paragraphs to address the monitoring and closeout requirements that are currently part of the grants process. Consistent with 2 CFR part 200 and the HMA Guidance, FEMA proposes to add paragraph (c)(3), stating that the subrecipient must monitor and evaluate the progress of the mitigation activity in accordance with the approved original scope of work and budget through quarterly reports, and paragraph (c)(5), stating that the subrecipient must closeout the subaward in accordance with 2 CFR 200.343 and 200.344, and the HMA Guidance.39 These are nonsubstantive revisions reflecting existing requirements.40 Current paragraph (d)(4) states that the community must comply with program requirements under this part, grant management requirements under 2 CFR parts 200 and 3002, the grant agreement articles, and other applicable Federal, State, Tribal and local laws and regulations. FEMA proposes to retain this language and redesignate current paragraph (d)(4) as paragraph (c)(4). 5. Section 79.4 (Proposed § 77.4) Availability of Funding Section 79.4 addresses the method of funding under the SRL and FMA programs prior to BW–12. As explained in the Background section of this preamble, prior to BW–12, FMA 39 See 2 CFR 200.328, 200.343; HMA Guidance, Part II. M, Project Monitoring, and Part II.N, Closeout, pp. 23–24. 40 These requirements are covered by OMB Information Collection 1660–0072, ‘‘Mitigation Grant Programs/e-grants.’’ This collection is approved by OMB until October 31, 2021. PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 program funding was allocated to States each fiscal year based upon the number of NFIP policies within the State, the number of repetitive loss structures within the State, and other criteria the Administrator determined to be in the best interests of the NFIF. Paragraph (a) addresses automatic allocations. FEMA proposes to remove paragraph (a)(1), which addresses the SRL program, as that program is no longer authorized under the NFIA. Paragraph (a)(2) describes how the automatic allocation process worked for the FMA program prior to BW–12. Pursuant to the introductory language of current paragraph (a)(2), for the amount made available for the FMA program, the Administrator allocates the available funds each fiscal year. Funds are distributed based upon the number of NFIP policies, repetitive loss structures, and any other such criteria the Administrator determines are in the best interest of the NFIF. FEMA proposes to revise the introductory language of current paragraph (a)(2) to state that the Administrator will allocate funds based upon criteria established for each application period rather than ‘‘each fiscal year,’’ because this is more accurate. Although each application period is usually tied to the specific fiscal year, referring to ‘‘each application period’’ would allow flexibility in the event that a particular application period did not line up exactly with a particular fiscal year (for example, if the appropriations process delayed the announcement of an application period beyond the normal schedule). FEMA also proposes to add ‘‘severe repetitive loss structures’’ to the list of criteria because under the NFIA, as amended by BW–12, these structures are defined separately and subject to different cost share provisions.41 FEMA proposes to renumber revised paragraph (a)(2) as § 77.4(a)(1). Current paragraph (a)(2)(i) states that a maximum of 7.5 percent of the amount made available in any fiscal year may be allocated for FMA planning grants nationally, that a planning grant will not be awarded to a State or community more than once every 5 years, and an individual planning grant will not exceed $150,000 to any State agency applicant, or $50,000 to any community subapplicant. It states that the total planning grant made in any fiscal year to any State, including all communities located in the State, will not exceed $300,000. FEMA proposes to redesignate this paragraph as paragraph (a)(2). FEMA also proposes to revise this paragraph because BW–12 revised the 41 See E:\FR\FM\28AUP2.SGM 42 U.S.C. 4104c(d)(1) and (h)(3). 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules $150,000 and $50,000 caps, and explicitly removed the 7.5 percent cap, the 5-year limit, and the $300,000 total cap. Under the current statutory authority, the amount of an individual planning grant under the FMA program shall not exceed $50,000 for any mitigation plan of a State (or, a ‘‘recipient’’ as defined in this proposed rule) or $25,000 for any mitigation plan of a community (or, a ‘‘subrecipient’’ as defined in this proposed rule).42 FEMA proposes to reflect these revised caps in proposed § 77.4(a)(2). This removal is a nonsubstantive change to the FMA program as FEMA has already implemented this provision of BW– 12.43 Current paragraph (a)(2)(ii) states that the total amount of FMA project grant funds provided during any 5-year period will not exceed $10,000,000 to any State agency(s) or $3,300,000 to any community. It states that the total amount of project grant funds provided to any State, including all communities located in the State will not exceed $20,000,000 during any 5-year period. The Administrator may waive the limits of this paragraph for any 5-year period when a major disaster or emergency is declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act for flood conditions. FEMA proposes to remove this paragraph because BW–12 removed these caps and time period restrictions. Under the current statutory authority, FMA project grants must meet the eligibility requirements in 42 U.S.C. 4104c(c), are subject to the availability of funds, and may be subject to additional restrictions as Congress may establish in the annual appropriation for the FMA program. This removal is a nonsubstantive change to the FMA program as FEMA has already implemented this provision of BW– 12.44 Paragraph (b) addresses redistribution. It states that funds allocated to States that choose not to participate in either the FMA or SRL program in any given year will be reallocated to participating States and Indian Tribal applicants. It states that any funds allocated to a State, and the communities within the State, which have not been obligated within the timeframes established by the Administrator shall be redistributed by the Administrator to other States and communities to carry out eligible 42 42 U.S.C. 4104c(c)(3)(F). HMA Guidance, Part IV.E.3, FMA Funding Restrictions, p. 54. 44 See HMA Guidance, Part VIII.C, Additional Program Guidance: Flood Mitigation Assistance Program, pp. 116–18. 43 See VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 53481 activities in accordance with this part. FEMA proposes to remove this paragraph because BW–12 eliminated automatic allocations. As there are no automatic allocations, there is no need for a provision regarding re-allocations. Under the current program post-BW–12, FEMA considers all eligible subapplications and selects subapplications against agency priorities identified in annual appropriations and the NOFO.45 Current paragraph (c) addresses the cost share provisions that were applicable prior to BW–12. Under current paragraph (c)(1), FEMA may provide up to 75 percent of the eligible cost of activities for grants approved for funding. Under current paragraph (c)(2), FEMA may contribute up to 90 percent of the cost of the eligible activities for severe repetitive loss properties if the applicant has an approved mitigation plan meeting the repetitive loss requirements identified in § 201.4 or § 201.7. FEMA proposes to redesignate current paragraph (c) as paragraph (b) and to replace current paragraphs (c)(1) and (2) with proposed paragraphs (b)(1) through (3) to reflect the new cost share structure under BW–12. FEMA proposes to add a new paragraph (b)(1) to state that for each severe repetitive loss structure, FEMA may contribute up to 100 percent of all eligible costs if the activities are technically feasible and cost-effective, or, up to the amount of the expected savings to the NFIP for acquisition or relocation activities.46 FEMA is not retaining the requirement that severe repetitive loss properties have an approved mitigation plan meeting the repetitive loss requirements identified in part 201 because BW–12 removed this requirement.47 Note that all applicants must still have a FEMAapproved mitigation plan that addresses flood losses to structures covered by the NFIP, but the mitigation planning requirements are no longer tied to specific cost shares.48 FEMA proposes to clarify the mitigation planning requirements in proposed § 77.6(b), discussed elsewhere in this preamble. FEMA proposes to add a new paragraph (b)(2) to state that for repetitive loss structures, FEMA may contribute up to 90 percent of eligible costs.49 Prior to BW–12, repetitive loss structures received a 75 percent cost share. FEMA proposes to add a new paragraph (b)(3) to state that for all other mitigation activities, FEMA may contribute up to 75 percent of all eligible costs.50 FEMA has implemented this new cost structure in the HMA Guidance.51 Some projects include different types of structures. FEMA proposes to add a new paragraph (b)(4) stating that for projects that contain a combination of severe repetitive loss, repetitive loss, and/or insured structures, FEMA will calculate the cost share as appropriate for each type of structure submitted in the project subapplication, meaning that FEMA will determine the cost share based on the type of structure, even if the structure is combined with other types in the same project. FEMA is adding this provision to make clear that a structure is not eligible to receive an increased Federal cost share just because it is included in the same project as structures that are eligible to receive an increased Federal cost share. For example, the cost of mitigating a repetitive loss structure is still subject to the 90 percent Federal/10 percent nonFederal cost share requirement, even if it is included in a project that also mitigates severe repetitive loss structures. This is not a substantive change and reflects FEMA’s current practice. FEMA proposes to add this provision to ensure that potential subrecipients do not mistakenly expect to receive increased cost shares for which they are ineligible. Current paragraph (c)(3) states that for the FMA program only, of the nonFederal contribution, not more than one half can be provided from in-kind contributions. FEMA proposes to remove this paragraph because BW–12 eliminated the limit on the amount of in-kind contributions that may make up the non-Federal portion of an FMA award.52 BW–12 includes a provision stating that for any application for a grant for which FEMA fails to make a grant award within 5 years of the date of application, the grant application is considered to be denied and any funding amounts allocated for such grant application will remain available 45 See HMA Guidance, Part IV.H.1, Required Components, p. 59. 46 42 U.S.C. 4104c(c)(2) and (d)(1); implemented via HMA Guidance at section VIII.C.3, Cost Sharing, p. 117. 47 See Public Law 112–141, section 100225(a)(1), (9); 42 U.S.C. 4104c(d). 48 See 42 U.S.C. 4104c(b). 49 42 U.S.C. 4104c(d)(2); implemented via HMA Guidance at section VIII.C.3, Cost Sharing, p. 118. 50 42 U.S.C. 4104c(d)(3); implemented via HMA Guidance at section VIII.C.3, Cost Sharing, p. 118. 51 See HMA Guidance, Part VIII. C.3, Cost Sharing, pp. 117–18. 52 See Public Law 112–141, section 100225(a); 42 U.S.C. 4104c(d). PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 E:\FR\FM\28AUP2.SGM 28AUP2 53482 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules for other FMA grants.53 FEMA proposes to add a new paragraph (c) to implement this provision. FEMA notes that while the statute uses the term ‘‘application,’’ FEMA is interpreting this to mean subapplications as well. While FEMA makes awards to the applicant, it is the applicant who awards funds to the subapplicant. Therefore FEMA is applying the 5-year requirement to applicants to ensure they in turn are timely in making the subawards to their subapplicants. Otherwise, the intent of the statute would not be fully realized if FEMA makes the award within 5 years, but the applicant does not in turn make a timely award to the subapplicant. FEMA interprets ‘‘date of application’’ to mean date of submission, meaning the date the applicant/subapplicant submits the application to FEMA. This is to avoid any potential confusion about the date that marks the beginning of the 5-year period. FEMA has implemented this provision in the HMA Guidance.54 6. Section 79.5 (Proposed § 77.5) Application Process Current § 79.5 addresses the application process. Paragraph (a) is entitled ‘‘Applicant or grantee.’’ FEMA proposes to remove the reference to grantee so that the title of paragraph (a) would just be ‘‘Applicant.’’ While 2 CFR part 200 uses recipient rather than grantee, this section addresses the point in the grants process where money has not yet been awarded, so the appropriate term for this paragraph is applicant rather than recipient. Current paragraph (a)(1) states that States will be notified of the amount allocated to them for the SRL and FMA programs each fiscal year, along with the application timeframes. As discussed above, automatic allocations are no longer used under the FMA program, and the SRL program is no longer authorized. Further, FEMA prefers to use ‘‘applicant’’ rather than State, as applicant captures the full universe of entities who may be an applicant (i.e., States (including territories) and Indian Tribal governments).55 Therefore FEMA proposes to revise paragraph (a)(1) to state that applicants will be notified of the availability of funding for the FMA program pursuant to 2 CFR 200.202 and 200.203. Section 200.202 requires agencies to provide public notice of grant fund availability, and § 200.203 lists the requirements surrounding these notices (including the information they 53 See 42 U.S.C. 4104c(g). HMA Guidance, Part VIII.C.6, Failure to Make Federal Award within 5 Years, p. 118. 55 See proposed § 77.2(b). 54 See VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 must contain). As discussed above, FEMA publishes a NOFO when funds become available. The NOFO includes the application timeframes, and therefore FEMA did not retain in paragraph (a)(1) the specific requirement to provide application timeframes. Paragraph (a)(2) states that the State is responsible for soliciting applications from eligible communities, or subapplicants, and for reviewing and prioritizing applications prior to forwarding them to FEMA for review and award. FEMA proposes to replace ‘‘State’’ with ‘‘applicant’’ to cover the entire universe of potential applicants (States (including territories) and Indian Tribal governments).56 Paragraph (a)(3) states that participation in these flood mitigation grant programs is voluntary, and States may elect not to participate in either the SRL or FMA program in any fiscal year without compromising their eligibility in future years. FEMA proposes to remove this paragraph because it was relevant pre-BW–12 when the programs were allocation based and each eligible State received an annual allocation. While the current FMA program is voluntary, this is not necessary to repeat in the regulations relating to the application process because the voluntary nature of the program is established in the statute and made clear in § 79.6 (proposed § 77.6), each annual NOFO, and the HMA Guidance.57 Paragraph (a)(4) states that Indian Tribal governments interested in applying directly to FEMA for either the FMA or SRL program grants should contact the appropriate FEMA Regional Administrator for application information. FEMA proposes to remove this paragraph because proposed paragraphs (a)(1) and (2) would apply to Indian Tribal government applicants and eliminate the need to address these applicants in a separate paragraph. Paragraph (b) is entitled ‘‘Subapplicant or subgrantee.’’ FEMA proposes to remove the term ‘‘subgrantee’’ because the paragraph applies to subapplicants before they become subgrantees (proposed ‘‘subrecipients’’), and thus it is only necessary to include ‘‘subapplicant’’ in the paragraph title. No substantive change is intended. The first sentence states that participation in the SRL and the FMA program is voluntary, and communities may elect not to apply. 56 Id. 57 See 42 U.S.C. 4104c(a); 44 CFR 79.6; HMA Guidance, Part II, Frontloading HMA Program Eligibility Requirements, p. 13. PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 FEMA proposes to remove this sentence because it was relevant pre-BW–12 when the programs were allocation based and each eligible State received an annual allocation. While the current FMA program is voluntary, this is not necessary to repeat in the regulations relating to the application process because the voluntary nature of the program is established in the statute and made clear in § 79.6 (proposed § 77.6), each annual NOFO, and the HMA Guidance.58 The second sentence states that communities or other subapplicants who choose to apply must develop applications within the timeframes and requirements established by FEMA and must submit applications to the State. FEMA proposes to replace ‘‘State’’ with ‘‘applicant’’ for reasons discussed above, and proposes to replace ‘‘applications’’ with ‘‘subapplications,’’ which is the proper terminology. Subapplicants submit subapplications, while applicants submit applications. This is not a substantive change. 7. Section 79.6 (Proposed § 77.6) Eligibility i. Paragraph (a) Eligible Applicants and Subapplicants FEMA proposes to change the heading of paragraph (a) from ‘‘Eligible applicants and subapplicants’’ to ‘‘NFIP requirements’’ to better reflect the provisions of this paragraph. Paragraph (a)(1) states that States, Indian Tribal governments, and communities participating in the NFIP may apply for planning and project grants and associated management costs. FEMA proposes to revise this paragraph to say that States, Indian Tribal governments, and communities must be participating in the NFIP and may not be suspended or withdrawn under the program. FEMA proposes to omit ‘‘planning and project grants and associated management costs’’ from this paragraph because eligible activities are covered in paragraph (c) and need not be listed here as well. FEMA also proposes to incorporate into paragraph (a)(1) the eligibility restriction for communities that are suspended or withdrawn under the NFIP. This requirement is currently listed in paragraph (a)(3), which FEMA proposes to remove. This is a nonsubstantive revision intended to incorporate the relevant NFIP participation requirements into a simplified paragraph (a)(1). Paragraph (2) states that States, Indian Tribal governments, and communities 58 Id. E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules participating in the NFIP may apply for SRL project grants and associated management costs. FEMA proposes to remove this paragraph because the SRL program is no longer authorized under the NFIA. Paragraph (3) states that communities withdrawn, suspended, or not participating under part 60 (Criteria for Land Management and Use) of the NFIP are not eligible for either the FMA or SRL programs. FEMA proposes to remove this paragraph because the SRL program was eliminated by BW–12, and the NFIP participation requirement for the FMA program is already covered under proposed § 77.6(a)(1). While paragraph (3) specifically references part 60, FEMA proposes to omit the reference to part 60 in proposed paragraph (a)(1) because it is unnecessary. The reference to part 60 effectively means communities that are participating in the NFIP and who are not suspended or withdrawn under the program. FEMA intends proposed paragraph (a)(1) to have the same meaning, but proposes to reference the NFIP generally so that the meaning remains clear even if the regulations at part 60 are revised or renumbered. While current part 79 addresses NFIP requirements in terms of applicant and subapplicant eligibility, it does not address NFIP requirements specific to property eligibility. FEMA proposes to add a new paragraph (a)(2) to clarify that, for projects that impact individual structures, an NFIP policy for the structure must be in effect prior to the opening of the application period and be maintained for the life of the structure. This is consistent with the HMA Guidance, which explains that properties must be NFIP-insured at the time of the application submittal and prior to the period of availability or application start date and be maintained for the life of the structure.59 In the absence of such a requirement, a property owner could obtain an NFIP policy immediately before receiving an FMA award and drop the policy after taking advantage of NFIF funds. The establishment of a clear and measurable eligibility requirement will help ensure that FMA funding is awarded to policy holders who consistently maintain coverage for eligible structures. This requirement is consistent with the NFIA’s statutory mandate to use funds for activities designed to reduce the risk of flood damage to structures covered under contracts for flood insurance,60 59 See HMA Guidance, Part VIII.C.1, Eligible Properties, p. 116. 60 See 42 U.S.C. 4104c(a). VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 and is intended to support good stewardship of NFIF funds. ii. Paragraph (b) Plan Requirement FEMA proposes to revise paragraph (b), Plan requirement, to remove the reference to the SRL program and to clarify current mitigation planning requirements consistent with BW–12. To be eligible for FMA awards, applicants and subapplicants must have a FEMA-approved mitigation plan that describes the mitigation activities to be carried out with FMA awards and provides for the reduction of flood losses to structures covered under the NFIP.61 Paragraph (1) states that States must have an approved mitigation plan meeting the requirements of 44 CFR 201.4 or 201.5 in order to apply for grants through the FMA or SRL programs. FEMA proposes to remove the reference to 201.5 as this section addresses enhanced State mitigation plans which are not necessary for eligibility. FEMA also proposes to revise this sentence to clarify that the plan must be approved by FEMA. While it is implied in part 201 that the plan must be approved by FEMA, it is not explicit, so FEMA proposes to add this clarification to avoid any potential confusion. This is not a substantive change and is intended only to improve clarity and consistency with part 201.62 FEMA also proposes to add language specifying that the FEMA-approved mitigation plan ‘‘provides for reduction of flood losses to structures for which NFIP coverage is available’’ to make the language more consistent with the current statutory requirement at 42 U.S.C. 4104c(b). FEMA proposes to remove the language ‘‘in order to apply for grants through the FMA or SRL programs,’’ first because the SRL is no longer authorized, and second, even though FMA is still an authorized program, it is not necessary because the regulation already makes it clear that a plan is required. The second sentence of paragraph (1) states that Indian Tribal governments must have an approved plan meeting the requirements of 44 CFR 201.7 at the time of application. As with States, FEMA proposes to revise this provision to clarify that the plan must be approved by FEMA. While it is implied in part 201 that the plan must be approved by FEMA, it is not explicit, so FEMA proposes to add this clarification to avoid any potential confusion. FEMA proposes to add ‘‘mitigation’’ before ‘‘plan’’ for the sake of clarity. As with 61 See 62 See PO 00000 42 U.S.C. 4104c(b). 44 CFR 201.3(b). Frm 00011 Fmt 4701 Sfmt 4702 53483 State mitigation plans, FEMA proposes to add language specifying that the FEMA-approved mitigation plan ‘‘provides for reduction of flood losses to structures for which NFIP coverage is available’’ to make the language more consistent with the current statutory requirement at 42 U.S.C. 4104c(b). Finally, FEMA proposes to remove the language ‘‘at the time of application’’ and address this requirement in a separate sentence as described below. Applicants must have a FEMAapproved mitigation plan at the time of application and award. This comports with the NFIA, which requires applicants to have a FEMA-approved mitigation plan as a condition of eligibility for FMA awards.63 Currently, the regulation is silent as to this requirement for States. For Indian Tribal governments, the current regulation states only ‘‘at the time of application.’’ FEMA proposes to add a sentence stating that both States and Indian Tribal governments must have a FEMAapproved mitigation plan at the time of application and award. This is a nonsubstantive change intended for clarification purposes only.64 Paragraph (2) states that in order to be eligible for FMA and SRL grants, subapplicants must have an approved mitigation plan at the time of application in accordance with 44 CFR part 201 that at a minimum addresses flood hazards. As with applicants, FEMA proposes to revise this provision to clarify that the plan must be approved by FEMA. While it is implied in part 201 that the plan must be approved by FEMA, it is not explicit, so FEMA proposes to add this clarification to avoid any potential confusion. Also as with applicants, FEMA proposes to add that the plan must provide for reduction of flood losses to structures for which NFIP coverage is available. FEMA proposes to remove the language ‘‘at a minimum, addresses flood hazards’’ and replace it with the language ‘‘provides for reduction of flood losses to structures for which NFIP coverage is available’’ to make the language more consistent with the current statutory requirement at 42 U.S.C. 4104c(b). FEMA proposes to add a sentence stating that the FEMA-approved mitigation plan is required at the time of application and award for reasons described above.65 63 See 42 U.S.C. 4104c(b). HMA Guidance, Part III.E.5.1, Applicant Mitigation Plan Requirement, p. 45. 65 See HMA Guidance, Part III.E.5.2, Subapplicant Mitigation Plan Requirement, p. 45. 64 See E:\FR\FM\28AUP2.SGM 28AUP2 53484 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules Finally, FEMA proposes to add paragraph headings to aid the reader. It proposes to add the header ‘‘applicants’’ for paragraph (b)(1), and the header ‘‘subapplicants’’ for paragraph (b)(2) to make the paragraph structure easier to follow. iii. Paragraph (c) Eligible Activities FEMA proposes to revise paragraph (c), Eligible activities, to reflect the changes from BW–12. Paragraph (1) addresses planning and states that FMA planning grants are limited to those activities necessary to develop or update the flood portion of any mitigation plan. FEMA proposes to remove this sentence because the NFIA, as amended by BW–12, explicitly provides that a mitigation plan that provides for the reduction of flood losses to structures for which NFIP coverage is available may be included in a multi-hazard mitigation plan.66 FEMA proposes to remove the ‘‘flood portion’’ language because there may be multihazard mitigation plans that meet the statutory requirements but that do not distinguish and address all flood-related provisions in a separate ‘‘flood portion’’ of the plan. FEMA proposes to say, instead, that the plans must provide for reduction of flood losses to structures for which NFIP coverage is available. This change is intended to reflect the statutory language at 42 U.S.C. 4104c(b). FEMA proposes to also remove the following sentence, which states that planning grants are not eligible for funding under the SRL program; as the SRL program is no longer authorized, this provision is no longer necessary. Paragraph (c)(2) addresses projects. The first sentence of the introductory text states that projects funded under the SRL program are limited to those activities that specifically reduce or eliminate flood damages to severe repetitive loss properties. FEMA proposes to remove this sentence and make necessary grammatical adjustments to this paragraph because the SRL program is no longer authorized. In paragraph (c)(2)(v), FEMA proposes to remove language that limits the eligibility of demolition and rebuilding of properties to the SRL program. The demolition and rebuilding of properties to at least base flood levels or higher, if required by FEMA or by State or local ordinance, has been an eligible activity under the FMA program since before BW–12’s passage. FEMA implemented this provision in the HMA Guidance.67 66 42 U.S.C. 4104c(b). HMA Guidance Addendum, Feb. 27, 2015, Part D, Mitigation Reconstruction Projects, p. 59, 67 See VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 Paragraph (c)(2)(vi) lists as an eligible project ‘‘minor physical localized flood reduction measures’’ that lessen the frequency or severity of flooding and decrease predicted flood damages. FEMA proposes to replace ‘‘minor physical localized flood reduction measures’’ with ‘‘localized flood risk reduction projects.’’ The following sentence states that ‘‘major flood control projects’’ such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible. FEMA proposes to replace ‘‘major flood control projects’’ with ‘‘non-localized flood risk reduction projects.’’ Major flood control projects are known as ‘‘non-localized flood risk reduction projects’’ for purposes of FMA. FEMA proposes to replace major flood control projects with non-localized flood risk reduction projects so that these projects are known by one common name. These changes are intended to ensure consistency between program implementation, guidance, and regulation, and do not impose new requirements. The terms ‘‘localized flood risk reduction projects’’ and ‘‘nonlocalized flood risk reduction projects’’ are used throughout the HMA Guidance.68 BW–12 added elevation, relocation, and floodproofing of utilities as eligible activities.69 FEMA proposes to add these activities to a new paragraph (c)(2)(vii). These activities were implemented in the HMA Guidance.70 BW–12 provides that eligible activities may include mitigation activities that are described in the mitigation plan of a State or community but not specified by statute or regulation.71 FEMA proposes to implement this provision in a new paragraph (c)(2)(viii) for mitigation activities described in a State, Tribal, or local mitigation plan that are not listed in paragraphs (c)(2)(i) through (vii). This flexibility is important because it allows FEMA to consider innovative or novel projects that are consistent with the goals of the FMA program but are not specifically identified in statute or regulation. This is a nonsubstantive available at https://www.fema.gov/media-librarydata/142498316544938f5dfc69c0bd4ea8a161e8bb7b79553/HMA_ Addendum_022715_508.pdf (last accessed Feb. 13, 2020). 68 See, e.g., HMA Guidance, Part III.E.1.1, Mitigation Projects, p. 36. 69 See 42 U.S.C. 4104c(c)(3)(D), Public Law112– 141, section 100225(a)(5)(D). 70 HMA Guidance, Part III.E.1.1, Mitigation Projects, pp. 34 –35. 71 See 42 U.S.C. 4104c(c)(3)(I). PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 change; FEMA has already implemented this provision in the HMA Guidance.72 BW–12 provides that if a State applied for and was awarded at least $1,000,000 in FMA grants in the prior fiscal year, FEMA may provide funding for technical assistance to communities not to exceed $50,000 per State in any fiscal year to identify eligible activities, to develop grant applications, and to implement FMA grants.73 FEMA proposes to add new paragraph (c)(3) to implement this provision. The new paragraph would state that if a recipient applied for and was awarded at least $1 million in the prior fiscal year, that recipient may be eligible to receive a technical assistance grant for up to $50,000. FEMA has already implemented this provision in the HMA Guidance.74 The HMA Guidance lists potential eligible activities under this grant, such as promoting FMA to communities, visiting sites with communities/applicants, developing and reviewing project applications and mitigation plans, participating in planning meetings, providing planning workshops and materials, performing benefit cost analyses and providing grants management workshops and materials, funding (in part) salaries and expenses of staff working to develop, review, monitor, and close FMA grants.75 iv. Paragraph (d) Minimum Project Criteria Paragraph (d) addresses minimum project criteria which lists specific criteria FMA grant projects must meet in addition to being an eligible project type as described in paragraph (c). Paragraph (d)(1) states that projects must be in conformance with mitigation plans approved under 44 CFR part 201 for the State and community where the project is located. FEMA proposes to revise this provision for the sake of clarity, to state that projects must be in conformance with ‘‘State, Tribal, and/or local’’ mitigation plans approved under part 201 for the ‘‘jurisdiction’’ where the project is located. Paragraph (d)(2) states that projects must be in conformance with part 9 of this chapter, Floodplain Management and Protection of Wetlands, § 60.3 of this subchapter, Flood plain management criteria for floodprone areas, and other applicable Federal, State, Tribal, and local laws and regulations. FEMA proposes to revise 72 HMA Guidance, Part III.E.1.1, Mitigation Projects, p. 38. 73 See 42 U.S.C. 4104c(c)(3)(J). 74 HMA Guidance, Part III.E.1.4, Technical Assistance, pp. 40–41. 75 Id. E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules this provision to state that the project must be in conformance with applicable environmental and historic preservation laws, regulations, and agency policy, including parts 9 and 60 of this chapter, and other applicable Federal, State, Tribal, and local laws and regulations. FEMA proposes to remove the reference to § 60.3 and replace it with a more general reference to part 60, which captures additional requirements that fall under current paragraph (d)(2). FEMA also proposes to emphasize that projects must be in conformance ‘‘with applicable environmental and historic preservation laws, regulations, and agency policy,’’ which includes FEMA regulations at parts 9 and 60. Applicable environmental and historic preservation requirements also include the requirements in DHS Directive and Instruction 023–01, ‘‘Implementation of the National Environmental Policy Act,’’ and FEMA Directive and Instruction 108–1, ‘‘Environmental Planning and Historic Preservation Responsibilities and Program Requirements.’’ 76 This is a nonsubstantive change intended to capture all applicable legal requirements and to highlight applicable environmental and historic preservation requirements, which are particularly relevant to the implementation of mitigation grants.77 Paragraph (d)(3) states that mitigation grant projects must ‘‘be technically feasible.’’ Under the NFIA, as amended by BW–12, mitigation projects must be ‘‘technically feasible and cost-effective’’ or ‘‘eliminate future payments from the [NFIF] for severe repetitive loss structures through an acquisition or relocation activity.’’ 78 FEMA proposes to add to paragraph (d)(3) ‘‘and costeffective; or, eliminate future payments from the NFIF for severe repetitive loss structures through an acquisition or relocation activity.’’ FEMA proposes this revision to capture all of the statutory requirements in 42 U.S.C. 4104c(c)(2)(A) in the same regulatory provision. This is not a substantive change; FEMA had already implemented this provision prior to BW–12.79 Paragraph (d)(5) states that the project must be cost effective and reduce the risk of future flood damage. FEMA proposes to remove this paragraph because cost-effectiveness is addressed in the proposed revisions to paragraph (d)(3). Proposed paragraph (d)(3) does 76 See 81 FR 56514 and 81 FR 56682. HMA Guidance, Part III.E.6, Environmental Planning and Historic Preservation Requirements, pp. 47–48. 78 42 U.S.C. 4104c(c)(2)(A). 79 HMA Guidance, Part III.E.3, Cost Effectiveness, and Part III.E.4, Feasibility and Effectiveness, p.44. 77 See VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 not include the language ‘‘reduce the risk for future flood damage’’ because FEMA is proposing language that mirrors the statutory provision at 42 U.S.C. 4104c(c)(2)(A)(ii), as explained above. Finally, FEMA proposes to replace ‘‘subgrantee’’ with ‘‘subrecipient’’ in current paragraph (d)(6) to reflect the terminology in 2 CFR part 200, and to redesignate current paragraph (d)(6) as paragraph (d)(5), and current paragraph (d)(7) as paragraph (d)(6). 8. Section 79.7 Offers and Appeals Under the SRL Program Section 79.7 deals solely with the SRL program, which is no longer authorized under the NFIA. Accordingly, FEMA proposes to remove this section in its entirety. 9. Section 79.8 (Proposed § 77.8) Allowable Costs This section addresses allowable costs under the FMA program. Paragraph (a)’s introductory text states that general policies for allowable costs are addressed in 2 CFR 200.101, 200.102, 200.400–200.475. FEMA proposes to revise this provision to clarify that the allowable costs are ‘‘for implementing awards and subawards.’’ This is a nonsubstantive change. Paragraph (a)(1) is entitled ‘‘Eligible management costs.’’ Paragraph (a)(1)(i) is entitled ‘‘grantee.’’ FEMA proposes to replace ‘‘grantee’’ with ‘‘recipient’’ to reflect the updated terminology in 2 CFR part 200. The first sentence of paragraph (a)(1)(i) states that States are eligible to receive management costs consisting of a maximum of 10 percent of the planning and project activities awarded to the State, each fiscal year under FMA and SRL, respectively. FEMA proposes to replace ‘‘State(s)’’ with ‘‘recipient(s)’’ to reflect the terminology in 2 CFR part 200 and to capture all possible applicants (States (including territories) and Indian Tribal governments).80 FEMA proposes to remove the reference to the SRL program, which is no longer authorized under the NFIA. The last sentence states that an Indian Tribal government applying directly to FEMA is eligible for management costs consisting of a maximum of 10 percent of grants awarded for planning and project activities under the SRL and FMA programs respectively. FEMA proposes to remove this sentence as it would no longer be necessary under the proposed revisions to this paragraph, which replaces ‘‘States’’ with ‘‘recipients.’’ The 80 See PO 00000 Fmt 4701 term ‘‘recipients’’ includes Indian Tribal governments. FEMA proposes to replace the header of paragraph (a)(1)(ii), ‘‘subgrantee,’’ with ‘‘subrecipient’’ to reflect the terminology in 2 CFR part 200. FEMA proposes to replace the term ‘‘State’’ with ‘‘recipient’’ to capture the full universe of entities to which a subapplicant may apply (States (including territories) and Indian Tribal governments). Paragraph (a)(2) is entitled ‘‘Indirect Costs.’’ FEMA proposes to remove the reference to the SRL program, as the program is no longer authorized under the NFIA. FEMA proposes to replace ‘‘grantee’’ with ‘‘recipient’’ and ‘‘subgrantee’’ with ‘‘subrecipient’’ to reflect the terminology in 2 CFR part 200. Paragraph (b) is entitled ‘‘Pre-award costs.’’ The first sentence states that FEMA may fund eligible pre-award planning or project costs at its discretion and as funds are available. FEMA proposes to revise this sentence to state that FEMA may fund eligible pre-award costs related to developing the application or subapplication at its discretion and as funds are available. FEMA interprets ‘‘pre-award planning or project costs’’ to mean pre-award costs related to developing an application or subapplication. This revision is intended to clarify the regulatory language, consistent with FEMA’s interpretation established in the HMA Guidance, and is not a substantive change.81 FEMA proposes to replace ‘‘grantees’’ with ‘‘recipients’’ and ‘‘subgrantees’’ with ‘‘subrecipients’’ to reflect the terminology in 2 CFR part 200. Finally, FEMA proposes to make nonsubstantive grammatical changes to reflect that this section applies just to FMA grants, and proposes to replace the phrase ‘‘incurred prior to grant award’’ with ‘‘incurred prior to award’’ as the word ‘‘grant’’ is not necessary. Paragraph (c) is entitled ‘‘Duplication of Benefits.’’ FEMA proposes to replace ‘‘grantee’’ with ‘‘recipient’’ and ‘‘subgrant award’’ with ‘‘subaward’’ to reflect the terminology in 2 CFR part 200. 10. Section 79.9 (Proposed § 77.9) Grant Administration Paragraph (a) states that the grantee must follow FEMA grant requirements, including submission of performance and financial status reports, and shall follow adequate competitive procurement procedures, and that grantees are responsible for ensuring 81 See HMA Guidance, Part IV.F.2, Pre-award costs, p. 55. proposed 77.2(i). Frm 00013 53485 Sfmt 4702 E:\FR\FM\28AUP2.SGM 28AUP2 53486 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules that all subgrantees are aware of and follow the requirements of 2 CFR parts 200 and 3002. Finally, it states that the grantee must follow FEMA grant requirements, including submission of performance and financial status reports. FEMA proposes to revise this paragraph for a more streamlined approach and to eliminate some of the repetition in the current paragraph. Accordingly, FEMA proposes to revise paragraph (a) to state that recipients must comply with the requirements of 2 CFR parts 200 and 3002, and FEMA award requirements, including submission of performance and financial status reports, and that recipients must also ensure that subrecipients are aware of and comply with 2 CFR parts 200 and 3002. Finally, FEMA proposes to add a header to paragraph (a), entitled ‘‘General,’’ to distinguish it from the other paragraphs and for the ease of the reader. These are nonsubstantive changes. FEMA proposes to add a header to paragraph (b), ‘‘Cost overruns,’’ for the ease of the reader. In paragraph (b)’s introductory text, FEMA proposes to replace ‘‘State POC’’ with ‘‘recipient’’ to capture the universe of all possible recipients (States (including territories) and Indian Tribal governments). FEMA proposes to redesignate the introductory text of paragraph (b) as paragraph (b)(1), and to redesignate paragraph (b)(1) as (b)(1)(i), and paragraph (b)(2) as (b)(1)(ii). Current paragraph (b)(2) (proposed paragraph (b)(1)(ii)), which lists one of the requirements for reimbursement of an overrun, states that the amended grant award must meet the cost share requirements identified in this section. FEMA proposes to revise this to state that the amended grant award must meet the eligibility requirements, including cost share requirements, identified in this section. FEMA proposes this change to capture all eligibility requirements, including but not limited to cost share requirements. This is a nonsubstantive change, because all FMA eligibility requirements apply to amended grant awards, and is consistent with the HMA Guidance.82 Paragraph (b)(3) limits cost overrun reimbursements so that the total amount obligated to the State does not exceed the maximum funding amounts set in § 79.4(a)(2). FEMA proposes to remove this provision because BW–12 eliminated automatic allocations under the FMA program and the NFIA no 82 See HMA Guidance, Part IV.D.3.3, Cost overruns and Underruns, p. 85. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 longer establishes maximum funding amounts for project awards.83 Current paragraph (c) addresses the ability of grantees to use cost underruns to offset overruns in other awards. FEMA proposes to redesignate paragraph (c) as paragraph (b)(2), since it more appropriately belongs in the paragraph on cost overruns rather than as a stand-alone paragraph. The first sentence of current paragraph (c) (proposed paragraph (b)(2)) states that grantees may use cost underruns from ongoing subawards to offset overruns incurred by another subgrant(s) awarded under the same grant. FEMA proposes to replace ‘‘grantees’’ with ‘‘recipients’’ and ‘‘subgrants’’ with ‘‘subawards’’ to reflect the terminology in 2 CFR part 200, and to replace the final word of the sentence (‘‘grant’’) with ‘‘award.’’ These are nonsubstantive changes. The second sentence of current paragraph (c) (proposed paragraph (b)(2)) states that all costs for which funding is requested must have been included in the original application’s cost estimate. FEMA proposes to replace ‘‘application’’ with ‘‘subapplication’’ because the need for an overrun is at the subaward level. This is a nonsubstantive change for clarification purposes—the program currently applies this to the subapplication amount for a specific project, not the application amount which encompasses all projects under the recipient’s award. FEMA proposes to add that in cases where an underrun is not available to cover an overrun, the Administrator may, with justification from the recipient or subrecipient, use other available FMA funds to cover the cost overrun. FEMA implements this practice pursuant to 42 U.S.C. 4104c(c)(1), which requires FEMA to provide FMA assistance to the extent amounts are available in the NFIF pursuant to appropriation Acts, subject only to the absence of approvable mitigation plans. This practice is consistent with the HMA Guidance which provides that ‘‘[t]he pass-through entity may request additional Federal funds for identified overruns, which FEMA may approve if program funds are available.’’ 84 This flexibility allows FEMA and recipients to address unanticipated needs. Current paragraph (d) addresses the requirement that the request for an overrun be in writing to the FEMA Regional Administrator. FEMA proposes to redesignate this paragraph as paragraph (b)(3), as it appropriately 83 See discussion supra regarding the proposed revisions to § 79.4 (proposed § 77.4). 84 See HMA Guidance, Part VI.D.3.3, Cost overruns and Underruns, p. 85. PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 belongs in the paragraph that addresses overruns rather than as a stand-alone paragraph. FEMA proposes to replace ‘‘grant’’ with ‘‘award’’ for the sake of clarity, and to replace ‘‘State POC’’ with ‘‘recipient’’ to capture the universe of potential recipients (States (including territories) and Indian Tribal governments). FEMA proposes to replace ‘‘shall’’ with ‘‘must’’ and ‘‘will’’ pursuant to the Office of the Federal Register’s Principles of Clear Writing.85 Current paragraph (e) addresses the circumstances under which FEMA recaptures funds. FEMA proposes to redesignate this paragraph as paragraph (c) and to add a paragraph heading ‘‘Recapture’’ for the ease of the reader. FEMA proposes to replace ‘‘these programs’’ with ‘‘this part’’ for the sake of clarity. FEMA proposes to add a new paragraph (d) to address remedies for noncompliance, consistent with 2 CFR part 200. FEMA proposes to add that FEMA may terminate an award or take other remedies for noncompliance in accordance with 2 CFR 200.338 through 200.342. Finally, FEMA proposes to add a new paragraph (e) to address the reconsideration process under the FMA program. FEMA proposes to state that it will reconsider determinations of noncompliance, additional award conditions, or its decision to terminate a Federal award. Requests for reconsideration must be made in writing within 60 calendar days after receipt of a notice of the action, and in accordance with submission procedures set out in guidance. FEMA will notify the requester of the disposition of the request for reconsideration. If the decision is to grant the request for reconsideration, FEMA will take appropriate implementing action. FEMA proposes to add these provisions to reflect the existing opportunity to request reconsideration 86 and the procedures for when a recipient/ subrecipient challenges a remedy for noncompliance, as required by 2 CFR 200.341.87 FEMA believes that a 60 calendar day deadline for submitting requests for reconsideration is appropriate and consistent with the 85 https://www.archives.gov/federal-register/ write/legal-docs/clear-writing.html. 86 See HMA Guidance, Part V.B.3, Reconsideration Process, p. 77. 87 See 2 CFR 200.341, Opportunities to object, hearings and appeals, providing that ‘‘[U]pon taking any remedy for non-compliance, the Federal awarding agency must provide the non-Federal entity an opportunity to object and provide information and documentation challenging the suspension or termination action, in accordance with written processes and procedures published by the Federal awarding agency.’’ E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules amount of time provided to submit appeals or requests for reconsideration in other FEMA programs.88 This is a nonsubstantive change that codifies current practice. C. 44 CFR part 80, Property Acquisition and Relocation for Open Space Throughout part 80,89 FEMA proposes to replace outdated terms and definitions with substantively similar terms and definitions that better align with 2 CFR part 200 and the HMA Guidance. These are nonsubstantive revisions intended to simplify definitions and improve consistency among FEMA’s HMA programs. FEMA also proposes to replace the word ‘‘shall’’ with the word ‘‘will’’ or ‘‘must,’’ as appropriate, and to remove references to the SRL program. 1. Part 80 Authority FEMA proposes to revise the authority citation for part 80 to remove historical authorities relating to FEMA’s organization. FEMA proposes to remove the references to the Reorganization Plan No. 3 of 1978, Executive Order 12127, Executive Order 12148, and Executive Order 13286. The Reorganization Plan and Executive Orders 12127 and 12148 established FEMA as an agency in 1979 and established its functions. Executive Order 13286 revised Executive Order 12148 and transferred some of FEMA’s authorities to DHS. The Homeland Security Act of 2002, 6 U.S.C. 101 et seq., superseded previous organizational authorities and provided organic authority for FEMA as a component agency of DHS. FEMA proposes to remove the superseded authorities and retain the citation to the Homeland Security Act of 2002. 2. Section 80.3 Definitions FEMA proposes nonsubstantive revisions to simplify definitions and improve consistency among FEMA’s HMA programs. FEMA proposes to simplify the definition of ‘‘market value’’ to provide clearer meaning and reflect the definition found in widely recognized resources.90 FEMA proposes to add a definition for ‘‘Federal award’’ to reflect the definition in 2 CFR part 200. FEMA’s proposed 88 See, e.g., 44 CFR 206.101(m), 206.115(a), 206.171(f)(5), 206.204(e)(2), 206.206(c), and 206.366(d)(4). 89 See, e.g., §§ 80.5 (Roles and responsibilities), 80.9 (Eligible and ineligible costs), 80.11 (Project eligibility), 80.13 (Application information), 80.17 (Project implementation), 80.19 (Land use and oversight), and 80.21 (Closeout requirements). 90 See, e.g, The Law Dictionary, Black’s Law Dictionary Free Online Legal Dictionary, 2nd ed.; West’s Encyclopedia of American Law, 2nd ed. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 definition is similar to the definition in 2 CFR 200.38(a)(1),91 with two exceptions. First, FEMA’s proposed definition uses the terms ‘‘recipients’’ and ‘‘subrecipients’’ instead of the term ‘‘non-Federal entities.’’ The term ‘‘nonFederal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under all of FEMA’s HMA programs. While all HMA recipients and subrecipients are ‘‘non-Federal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions in part 80 so that they are program-specific and work when read in conjunction with the regulations for the FMA Program and HMGP. Second, FEMA proposes to add a sentence to the definition to clarify that the terms ‘‘award’’ and ‘‘grant’’ may also be used to describe a ‘‘Federal award.’’ This is a nonsubstantive change to make it clear that the terms are interchangeable. FEMA proposes to add a definition for ‘‘pass-through entity’’ to reflect the definition in 2 CFR part 200. FEMA’s proposed definition of ‘‘pass-through entity’’ is substantively the same as the definition in 2 CFR 200.74, with one exception. FEMA’s proposed definition uses the terms ‘‘recipients’’ and ‘‘subrecipients’’ instead of the term ‘‘non-Federal entities.’’ The term ‘‘nonFederal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under all of FEMA’s HMA programs. While all HMA recipients and subrecipients are ‘‘non-Federal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions in part 80 so that they are program-specific and work when read in conjunction with the regulations for the FMA Program and HMGP. FEMA proposes to replace the definitions ‘‘grantee,’’ ‘‘subgrant,’’ and ‘‘subgrantee,’’ with definitions for ‘‘recipient,’’ ‘‘subaward,’’ and ‘‘subrecipient,’’ respectively, to better align with the terms and definitions used in 2 CFR part 200 and the HMA Guidance. The proposed definition of ‘‘recipient’’ is similar to the definition at 2 CFR 200.86; however, FEMA proposes to use the terms ‘‘State or Indian Tribal government’’ instead of the term ‘‘nonFederal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to part 80 and reflect which entities are eligible recipients for purposes of part 80. The proposed definition of ‘‘subaward’’ is similar to 91 2 CFR 200.38(a)(1) (the Federal financial assistance that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity). PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 53487 the definition at 2 CFR 200.92; however, FEMA proposes to use the terms ‘‘recipient’’ and ‘‘subrecipient’’ instead of the term ‘‘non-Federal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to part 80. The proposed definition of ‘‘subrecipient’’ is similar to the definition at 2 CFR 200.93; however, FEMA proposes to use the terms ‘‘State agency, community, or Indian Tribal government’’ instead of the term ‘‘nonFederal entity’’ to reflect which entities are eligible subrecipients for purposes of part 80. Finally, FEMA proposes to revise the definitions of ‘‘applicant’’ and ‘‘subapplicant.’’ FEMA proposes to replace the term ‘‘grant’’ in the current definition of ‘‘applicant’’ with the term ‘‘Federal award.’’ This is a nonsubstantive change to use the newly defined term ‘‘Federal award’’ (proposed § 80.3(c)) throughout the definitions. FEMA also proposes to add that once funds have been awarded, the applicant becomes the recipient and may also be a pass-through entity. This is a nonsubstantive addition to clarify the relationship between the terms ‘‘applicant,’’ ‘‘recipient,’’ and ‘‘passthrough entity’’ for the ease of the reader. FEMA proposes to revise the definition of ‘‘subapplicant’’ to replace ‘‘grantee’’ with ‘‘recipient’’ and ‘‘subgrantee’’ with ‘‘subrecipient’’ to reflect the terms and definitions in this proposed rule, which are tailored to part 80. FEMA proposes to make conforming amendments to these terms throughout part 80. 3. Section 80.13 Application Information In paragraph (a)(3), FEMA proposes to replace ‘‘FEMA’s Office of General Counsel’’ with ‘‘FEMA’s Office of Chief Counsel.’’ This is a nonsubstantive change intended to reflect FEMA’s current organizational structure (FEMA’s Office of General Counsel became the Office of Chief Counsel when FEMA became a component of DHS). 4. Section 80.19 Land Use and Oversight In addition to replacing outdated terms with substantively similar terms that better align with 2 CFR part 200 and the HMA Guidance (i.e., replacing ‘‘grantee’’ with ‘‘recipient,’’ etc.), FEMA proposes in paragraph (e) to move the sentence in (e)(1)(i) to paragraph (e)(1), and redesignate paragraphs (e)(1)(ii), and (e)(1)(ii)(A) through (C) as (e)(2), and (e)(2)(i) through (iii), respectively. This nonsubstantive redesignation is intended to conform this section to the E:\FR\FM\28AUP2.SGM 28AUP2 53488 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules regulatory drafting principle of proper subordination (e.g., it is improper to have an (e)(1) where there is not an (e)(2)). 5. Section 80.21 Closeout Requirements In paragraph (d), FEMA proposes to replace the word ‘‘property’’ with the word ‘‘structure’’ to conform to the definition of ‘‘repetitive loss structure’’ provided in BW–12 and proposed § 77.2, discussed above. D. 44 CFR Part 201, Mitigation Planning FEMA proposes to replace outdated terms and definitions throughout part 201 with substantively similar terms and definitions that better align with 2 CFR part 200 and the HMA and Mitigation Planning programs guidance documents. These are nonsubstantive revisions intended to simplify definitions and improve consistency among FEMA’s HMA and Mitigation Planning programs. FEMA also proposes to replace the word ‘‘shall’’ with the word ‘‘will’’ or ‘‘must,’’ as appropriate. 1. Part 201 Authority FEMA proposes to revise the authority citation for part 201 to remove historical authorities relating to FEMA’s organization. FEMA proposes to remove the references to the Reorganization Plan No. 3 of 1978, Executive Order 12127, Executive Order 12148, and Executive Order 13286. The Reorganization Plan and Executive Orders 12127 and 12148 established FEMA as an agency in 1979 and established its functions. Executive Order 13286 revised Executive Order 12148 and transferred some of FEMA’s authorities to DHS. The Homeland Security Act of 2002, 6 U.S.C. 101 et seq., superseded previous organizational authorities and provided organic authority for FEMA as a component agency of DHS. FEMA proposes to remove the superseded authorities and retain the citation to the Homeland Security Act of 2002. 2. Section 201.1 Purpose FEMA proposes to replace the word ‘‘polices’’ with ‘‘policies’’ in paragraph 201.1(a) as the word ‘‘polices’’ is a typographical error. 3. Section 201.2 Definitions FEMA proposes to revise the definition of ‘‘severe repetitive loss’’ properties and to add a new definition for ‘‘repetitive loss structure’’ to reflect the definitions provided in BW–12 and proposed in this rulemaking.92 FEMA 92 42 U.S.C. 4104c(h), 4121(a)(7); proposed 44 CFR 77.2. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 proposes to remove the definitions of the ‘‘repetitive flood claims’’ and ‘‘severe repetitive loss’’ programs as BW–12 eliminated the RFC and SRL programs. FEMA proposes to add definitions for the terms ‘‘applicant’’ and ‘‘subapplicant’’ to reflect the terms and definitions in proposed § 77.2. FEMA also proposes to add new definitions for ‘‘Federal award’’ and ‘‘pass-through Entity’’ to reflect the definitions in 2 CFR part 200. FEMA’s proposed definition of ‘‘Federal award’’ is similar to the definition in 2 CFR 200.38(a)(1),93 with two exceptions. First, FEMA’s proposed definition uses the terms ‘‘recipients’’ and ‘‘subrecipients’’ instead of the term ‘‘non-Federal entities.’’ The term ‘‘non-Federal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under FEMA’s HMA programs. While FMA recipients and subrecipients are ‘‘nonFederal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions so that they work in conjunction with the regulations for the FMA program and HMGP. Second, FEMA proposes to add a sentence to the definition to clarify that the terms ‘‘award’’ and ‘‘grant’’ may also be used to describe a ‘‘Federal award’’ under the FMA program regulations. This is a nonsubstantive change to make it clear that the terms are interchangeable. FEMA proposes to add a definition for ‘‘pass-through entity’’ to reflect the definition in 2 CFR part 200. FEMA’s proposed definition of ‘‘pass-through entity’’ is substantively the same as the definition in 2 CFR 200.74, with one exception. FEMA’s proposed definition uses the terms ‘‘recipients’’ and ‘‘subrecipients’’ instead of the term ‘‘non-Federal entities.’’ The term ‘‘nonFederal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under FEMA’s HMA programs. While all HMA recipients and subrecipients are ‘‘non-Federal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions so that they work in conjunction with regulations for the FMA program and HMGP. FEMA proposes to replace the definitions of ‘‘grantee’’ and ‘‘subgrantee’’ with definitions for ‘‘recipient’’ and ‘‘subrecipient,’’ respectively, to better align with the terms and definitions used in 2 CFR part 200 and the HMA Guidance. The 93 2 CFR 200.38(a)(1) (the Federal financial assistance that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity). PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 proposed definition of ‘‘recipient’’ is similar to the definition at 2 CFR 200.86; however, FEMA proposes to use the terms ‘‘State or Indian Tribal government’’ instead of the term ‘‘nonFederal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to part 201 and reflect which entities are eligible recipients for purposes of part 201. The proposed definition of ‘‘subrecipient’’ is similar to the definition at 2 CFR 200.93; however, FEMA proposes to specify which entities are eligible subrecipients for purposes of part 201. Depending on the program, subrecipients of hazard mitigation assistance subawards can be a State agency, local government, private nonprofit organization, or Indian Tribal government. Subrecipients of FMA subawards can be a State agency, community, or Indian Tribal government, as described in 44 CFR part 77. Finally, FEMA proposes to add a definition of ‘‘subaward’’ similar to the definition at 2 CFR 200.92; however, FEMA proposes to use the terms ‘‘recipient’’ and ‘‘subrecipient’’ instead of the term ‘‘non-Federal entity’’ to reflect the terms and definitions tailored to part 201 in this proposed rule. 4. Section 201.3 Responsibilities FEMA proposes to revise paragraph (c)(1) to reflect the elimination of the SRL program and to conform to the mitigation planning requirements proposed in this rulemaking. See proposed 44 CFR 77.6. The last sentence of paragraph (c)(1) would be removed and replaced with a sentence describing the mitigation plan requirement in proposed § 77.6(b). See proposed 44 CFR 201.3(c)(1). FEMA proposes similar revisions to paragraph (e)(1). The last two sentences of paragraph (e)(1) would be removed and replaced with a sentence describing the mitigation plan requirement in proposed § 77.6(b). See proposed 44 CFR 201.3(e)(1). 5. Section 201.4 Standard State Mitigation Plans FEMA proposes to revise paragraph (c)(3)(v) to reflect the elimination of the SRL program and to conform to the mitigation planning requirements proposed in this rulemaking. See proposed 44 CFR 77.6. The current language would be removed and replaced with a sentence describing the mitigation plan requirement found in proposed § 77.6(b). See proposed 44 CFR 201.4(c)(3)(v). In paragraph (c)(4)(iii), FEMA proposes to replace the word ‘‘properties’’ with the word ‘‘structures’’ to reflect the definition of ‘‘repetitive loss structure’’ used in BW– 12 and proposed § 77.2. E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules 6. Section 201.6 Local Mitigation Plans In § 201.6(a)(1), FEMA proposes to remove the reference to the RFC program, which was eliminated by BW– 12. 7. Section 201.7 Tribal Mitigation Plans FEMA proposes to revise § 201.7 to reflect the elimination of the SRL and RFC programs and to conform to the mitigation planning requirements proposed in this rulemaking. See proposed 44 CFR 77.6. FEMA proposes to remove paragraph (a)(2) to reflect the elimination of the SRL program and to remove the reference to the RFC program in paragraph (a)(3). FEMA proposes to redesignate current paragraphs (a)(3) and (4) as (a)(2) and (3), respectively. The language in current paragraph (c)(3)(vi) would be removed and replaced with a sentence describing the mitigation plan requirement in proposed § 77.6(b). See proposed 44 CFR 201.7(c)(3)(vi). E. 44 CFR part 206 Subpart N, Hazard Mitigation Grant Program Throughout part 206,94 FEMA proposes to replace outdated terms and definitions with substantively similar terms and definitions that better align with 2 CFR part 200 and the HMA guidance. These are nonsubstantive revisions intended to simplify definitions and improve consistency among FEMA’s HMA programs. FEMA also proposes to replace the word ‘‘shall’’ with the word ‘‘will’’ or ‘‘must,’’ as appropriate. 1. Section 206.431 Definitions FEMA proposes to add a definition for ‘‘pass-through entity’’ to reflect the definition in 2 CFR part 200. FEMA’s proposed definition of ‘‘pass-through entity’’ is substantively the same as the definition in 2 CFR 200.74, with one exception. FEMA’s proposed definition uses the terms ‘‘recipients’’ and ‘‘subrecipients’’ instead of the term ‘‘non-Federal entities.’’ The term ‘‘nonFederal entity,’’ as defined at 2 CFR 200.69, includes entities that are not eligible recipients or subrecipients under HMGP. While all HMGP recipients and subrecipients are ‘‘nonFederal entities’’ under 2 CFR part 200, FEMA proposes to tailor the definitions in part 206 subpart N so that they are program-specific and work when read in conjunction with the HMA-related 94 See, e.g., §§ 206.433 (State responsibilities), 206.435 (Project identification and selection criteria), 206.436 (Application procedures), 206.437 (State Administrative Plan), 206.438 (Project management), 206.439 (Allowable costs), and 206.440 (Appeals). VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 regulations in parts 79 (proposed part 77), 80, and 201. FEMA proposes to replace the definitions ‘‘grantee,’’ ‘‘subgrant,’’ and ‘‘subgrantee,’’ with definitions for ‘‘recipient,’’ ‘‘subaward,’’ and ‘‘subrecipient,’’ respectively, to better align with the terms and definitions used in 2 CFR part 200 and the HMA Guidance. The proposed definition of ‘‘recipient’’ is similar to the definition at 2 CFR 200.86; however, FEMA proposes to use the terms ‘‘State or Indian Tribal government’’ instead of the term ‘‘nonFederal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to reflect which entities are eligible recipients of HMGP. The proposed definition of ‘‘subaward’’ is similar to the definition at 2 CFR 200.92; however, FEMA proposes to use the terms ‘‘recipient’’ and ‘‘subrecipient’’ instead of the term ‘‘nonFederal entity’’ to reflect the terms and definitions in this proposed rule, which are tailored to the HMGP regulations. The proposed definition of ‘‘subrecipient’’ is similar to the definition at 2 CFR 200.93; however, instead of the term ‘‘non-Federal entity,’’ FEMA proposes to keep the language explaining which entities are eligible subrecipients of HMGP. FEMA proposes to make conforming amendments to these terms throughout part 206 subpart N. FEMA also proposes to revise the definitions of ‘‘applicant’’ and ‘‘Indian Tribal government’’ and add a definition for ‘‘subapplicant.’’ Section 206.431 currently defines ‘‘applicant’’ as a State agency, local government, Indian Tribal government, or eligible private nonprofit organization, submitting an application to the grantee for assistance under the HMGP. FEMA proposes to clarify that an ‘‘applicant’’ is the nonFederal entity consisting of a State or Indian Tribal government, applying to FEMA for a Federal award under HMGP, and that upon award, the applicant becomes the recipient and may also be a pass-through entity. FEMA proposes this revision because the current definition mistakenly includes local governments and private nonprofit organizations (they are subapplicants, not applicants) and applicants do not submit an application to a recipient, but rather to FEMA. FEMA proposes to add a sentence to the end of the current definition of ‘‘Indian Tribal government’’ to clarify that Indian Tribal governments have the option to apply as an applicant or subapplicant. Lastly, FEMA’s proposed definition for ‘‘subapplicant’’ would clarify that it means the State agency, local government, eligible private PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 53489 nonprofit organization, or Indian Tribal government submitting a subapplication to the applicant for financial assistance under HMGP, and that upon award, the subapplicant becomes the subrecipient. FEMA proposes adding this definition to more clearly distinguish the entities which may be subapplicants from those which may be applicants. 2. Section 206.432 Federal Grant Assistance FEMA proposes to revise 206.432(b), Amounts of Assistance, to remove the references to specific sections of the Stafford Act. Pursuant to 42 U.S.C. 5170c(a), the total contributions for HMGP in each disaster should be based upon the estimated aggregate amount of grants to be made under the Stafford Act for the major disaster. Although 42 U.S.C. 5170c originally specified that the total should be based on the estimated aggregate amount of grants to be made under Section 406 of the Act,95 Congress later amended this provision to remove the specific section reference.96 FEMA included specific section references when it promulgated the HMGP regulations in 1990 to reflect the level of specificity in the statute at that time.97 FEMA subsequently revised 206.432(b) to include additional sections of the Stafford Act under which major disaster assistance is made.98 However, this approach requires FEMA to update 206.432(b) whenever statutory amendments change the section numbers or authorize assistance under new sections of the Act.99 FEMA now proposes to remove specific section references from 206.432(b) so that the regulation mirrors the statutory provision and captures all of the sections under which grants are made with respect to a major disaster. This change would improve consistency with the statute and eliminate the need to continuously update a list of Stafford Act sections. FEMA also proposes to remove the second sentence of paragraph (c), which provides the cost share under HMGP for major disasters declared before June 10, 1993. As this date has long since passed, it is no longer necessary to include in the HMGP regulations. 3. Section 206.434 Eligibility Paragraph (a), Applicants, currently describes the entities which are eligible 95 Public Law 100–707, 102 Stat. 4698 (Nov. 23, 1988). 96 Public Law 103–181, 107 Stat. 2054 (Dec. 3, 1993). 97 See 55 FR 35537 (Aug. 30, 1990). 98 See 59 FR 24356 (May 11, 1994). 99 See, e.g., 67 FR 8853 (Feb. 26, 2002); 72 FR 61750 (Oct. 31, 2007); 74 FR 47482 (Sep. 16, 2009). E:\FR\FM\28AUP2.SGM 28AUP2 53490 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules to apply for the Hazard Mitigation Grant Program, listing States and local governments, private nonprofit organizations owning or operating a private nonprofit facility, and Indian Tribes. FEMA proposes to remove the word ‘‘Applicants’’ from the first sentence, clarify in subparagraph (a)(1) that applicants include States and Indian Tribal governments, and revise subparagraph (a)(2) to clarify that State agencies and local governments, eligible private nonprofit organizations, and Indian Tribal governments may be subapplicants. FEMA proposes to remove the language at subparagraph (a)(3) (Indian Tribes or authorized Tribal organizations and Alaska Native villages or organizations, but not Alaska native corporations with ownership vested in private individuals) because this language refers to non-federally recognized Tribes, which are included under local governments. 42 U.S.C. 5122(8)(B). FEMA proposes this revision to more clearly distinguish the entities which may be applicants from those which may be subapplicants. In paragraph (e), Property acquisitions and relocation requirements, FEMA proposes to retain the first sentence and remove the rest of the paragraph. FEMA proposes to remove this language because it addresses requirements for major disasters declared before December 3, 2007. For all major disasters declared on or after December 3, 2007, the property acquisitions and relocation requirements are found in part 80. IV. Regulatory Analysis A. Executive Order 12866, as Amended, Regulatory Planning and Review; Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs Executive Orders 12866 (‘‘Regulatory Planning and Review’’) and 13563 (‘‘Improving Regulation and Regulatory Review’’) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (‘‘Reducing Regulation and Controlling Regulatory Costs’’) directs agencies to reduce regulation and control regulatory costs and provides that ‘‘for every one new regulation VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.’’ The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it. This rule is exempt from the requirements of Executive Order 13771 because it is non-significant under Executive Order 12866. See OMB’s Memorandum ‘‘Guidance Implementing Executive Order 13771, Titled ‘Reducing Regulation and Controlling Regulatory Costs’ ’’ (April 5, 2017). Need for Regulation The Biggert-Waters Flood Insurance Reform Act of 2012 (BW–12), Pub. L.112–141, 126 Stat. 916, amended the National Flood Insurance Act of 1968 (NFIA) to require changes to FEMA’s hazard mitigation assistance (HMA) programs. FEMA implemented most of these changes through the Hazard Mitigation Assistance Guidance in 2013.100 FEMA now proposes to update its hazard mitigation assistance regulations to reflect these changes. Following guidance in OMB Circular A–4, FEMA assessed the impacts of this rule against a no-action baseline as well as a pre-statutory baseline. The noaction baseline is an assessment against what the world would be like if the proposed rule is not adopted. The prestatutory baseline is an assessment against what the world would be like if the relevant statute(s) had not been adopted and, in this case, already been implemented through guidance. Under a no-action baseline, this rule would result in cost savings to FEMA, and familiarization costs to HMA recipients. Under a pre-statutory baseline, this rule results in distributional impacts and qualitative benefits, but no marginal costs. The annual distributional impact of this rule is estimated at $4.16 million in increased transfers from FEMA to HMA recipients. FEMA addressed the substantive changes in this analysis and presented how they affect costs, benefits, and transfers. The remaining changes are nonsubstantive, meaning they are technical and include definitional updates and other changes that modernize and standardize regulations, reduce redundancy, or increase 100 FEMA, Hazard Mitigation Assistance Guidance, July 12, 2013, available at https:// www.fema.gov/media-library/assets/documents/ 33634 (last accessed Jan 8, 2020). PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 readability. The nonsubstantive changes do not have an economic impact. FEMA included a detailed marginal analysis table that summarizes the changes in this proposed rule and the related impacts in the public docket for this rulemaking available on www.regulations.gov under Docket ID FEMA–2019–0011. Affected Population The proposed rule would affect all recipients of FEMA’s Flood Mitigation Assistance (FMA) grants. Recipients include 56 State and territorial governments and 573 Indian Tribal governments.101 Local governments and governmental organizations such as flood districts and sewer districts are considered subrecipients and must apply through a State or Indian Tribal government. For simplicity, FEMA refers to the affected population as ‘‘recipients’’ throughout the analysis, except in cases where there are different requirements for recipients or subrecipients. Baselines BW–12 made substantial changes to FEMA’s HMA programs. FEMA implemented most of these changes via the HMA Guidance in 2013. FEMA now proposes to codify those changes in this rule. Following guidance in OMB Circular A–4, FEMA assessed the impacts of this rule against a prestatutory baseline covering 2006–2012 (pre-BW–12) and a no-action baseline covering 2013–2017 102 (post-BW–12). The pre-statutory baseline shows the effects of the proposed rule compared to the current regulations (i.e., as if FEMA had not already implemented the changes through the HMA Guidance). The no-action baseline shows the effects of the proposed rule compared to current FEMA practice (i.e., compared to the HMA Guidance, which reflects FEMA’s current practice, but not the current regulations). Under the pre-statutory baseline, the proposed rule has distributional impacts and qualitative benefits. The distributional impacts would affect recipients of Repetitive Loss (RL) grants and Severe Repetitive Loss (SRL) grants that were combined into the FMA program pursuant to BW–12. Under BW–12, RL and SRL properties received increased assistance, while standard mitigation properties received decreased assistance. Under the no-action baseline, the only impacts are 101 Indian Entities Recognized by, and Eligible to Receive Services from the United States Bureau of Indian Affairs, 84 FR 1200, (Feb 1, 2019). 102 2017 is the last year complete data is available. E:\FR\FM\28AUP2.SGM 28AUP2 53491 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules implementation costs and Federal cost savings. Table 1 shows the impacts of this proposed rule under the prestatutory and no-action baselines. TABLE 1—ANNUAL EFFECTS OF PROPOSED RULE UNDER PRE-STATUTORY AND NO-ACTION BASELINES [2018$] Baseline Costs Benefits Transfers Pre-Statutory .................................. $610 (year 1 only) ........................ Qualitative ..................................... No-Action ....................................... 610 (year 1 only) .......................... $85,463 ......................................... $28.4 million from FEMA to grant recipients. None. Effects The primary effects of BW–12 that would be codified by this proposed rule resulted from changes in the Federal cost shares. A cost share is the portion of the costs of a Federally assisted project or program borne by the Federal Government. FEMA pays a portion of the cost of a project, or the Federal cost share, and the recipient pays the remaining share. FMA Grant Cost Sharing Changes. The current regulations still reflect the pre-BW–12 cost share provisions of the RL and SRL grant programs. BW–12 modified these two programs and FEMA implemented the modifications in the 2013 HMA Guidance. The newly expanded FMA program now serves the recipients of these grant programs. BW–12 increased the RL Federal cost share from 75 percent to between 75 and 90 percent, and increased the SRL Federal cost share from between 90 and 100 percent to 100 percent. Table 2 shows the cost shares by type of grant. TABLE 2—COST SHARE BY TYPE OF GRANT RL Baseline FEMA cost share (%) Pre-Statutory (2006–2012) Pre-BW–12 .......................................................... No-Action (2013–2017) Post-BW–12 .............................................................. Lowering the Cap and Removing the Frequency Restriction. Prior to BW–12, FMA funds for the development or update of the flood portion of community multi-hazard mitigation plans were capped at $150,000 in Federal funding for States and $50,000 for communities, with a total cap of $300,000 in Federal funding for applications statewide. FEMA could not award State or community planning grants more than once every 5 years. BW–12 limited FMA grant funds to develop or update the flood portion of community multi-hazard mitigation plans to a $50,000 Federal share to any recipient or a $25,000 Federal share to any subrecipient. BW–12 also removed the restriction on awarding State or community planning grants more than once every 5 years. FEMA discusses the impacts of these changes in the costs section. Shifting from State Allocations to Competition. Prior to BW–12, FEMA annually allocated FMA program funding to recipients based on the number of insured properties and RL properties present within the recipient’s jurisdiction. Recipients that did not meet the minimum threshold to receive a target allocation had to apply against funds that were set aside for this purpose. BW–12 replaced this process with a fully competitive program that VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 Costs Costs for this proposed rule would result from implementation of the rule, rather than the 2013 HMA Guidance. FEMA estimated these costs against the no-action baseline since these are directly attributable to updating the text of the regulation, and not program changes that FEMA already implemented. Familiarization Costs. FEMA estimated familiarization costs for States, but not for local emergency management divisions or jurisdictions. FEMA assumed States regularly update their emergency response networks and notify local emergency management divisions on any changes. FEMA believes that States would continue to disseminate the new information through each State’s established process. FEMA assumed that each State grant recipient would have two personnel that would need to familiarize themselves and understand the proposed rule by reading the existing and new regulations to understand the changes. FEMA expects Frm 00019 Fmt 4701 Sfmt 4702 Recipient cost share (%) 75 75–90 selects subapplications against agency priorities identified annually. This change allows FEMA to identify and mitigate properties with the highest risk from flooding, thereby providing the greatest savings to the NFIP. PO 00000 SRL 25 10–25 FEMA cost share (%) 90 to 100 100 Recipient cost share (%) 10 to 0 0 each person to spend one hour to become familiar with the changes. FEMA assumes that the rule is likely to be reviewed by each State’s Emergency Management Director and one administrative support personnel. FEMA assumes that BLS occupations Emergency Management Director (SOC: 11–9160, mean hourly wage $39.70) 103 and First-Line Supervisor of Office and Administrative Support Workers (SOC: 43–1010, mean hourly wage $28.53) 104 are most representative of these roles in a State. Using the 1.46 multiplier,105 the fully loaded wage rates are $57.96 and $41.65 respectively. The estimated total cost of recipients making themselves 103 May 2018 National Occupational Employment and Wage Rates, National File (xls), First-Line Supervisors of Office & Admin Support Workers (OCC Code: 43–1010, Average, Column Title: H_ Mean). Accessed and downloaded June 4, 2019. https://www.bls.gov/oes/tables.htm. 104 May 2018 National Occupational Employment and Wage Rates, National File (xls), Emergency Management Directors (OCC Code: 11–9160, Average, Column Title: H_Mean). Accessed and downloaded June 4, 2019. https://www.bls.gov/oes/ tables.htm. 105 December 2018 Bureau of Labor Statistics, Employer Costs for Employee Compensation, Table 1. Employer costs per hour worked for employee compensation and costs as a percent of total compensation: Civilian workers, by major occupational and industry group, page 4. Accessed and downloaded June 4, 2019. https://www.bls.gov/ news.release/archives/ecec_03192019.pdf. E:\FR\FM\28AUP2.SGM 28AUP2 53492 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules familiar with the proposed rule is $4,582 in year 1 ($742 per year annualized at 7 percent over 10 years, and $635 at 3 percent). ((56 recipients × 1 hour × $57.96 wage) + (56 recipients × 1 hour × $41.65 wage) = $5,578.16). Summary of Costs. FEMA estimated the proposed rule would have familiarization costs of $5,578 in the first year of implementation. FEMA assumed that all staff and resources would come from existing sources and thus represent an opportunity cost. properties that required a market value review between 2013 and 2017. ...................................... ...................................... ...................................... ...................................... ...................................... 602 438 508 592 418 Benefits Total ............................... Annual average .................... 2,558 512 This proposed rule would be beneficial to both FEMA and Hazard Mitigation Grant recipients. While the benefits are not quantifiable, FEMA believes that changes implemented by BW–12 allow it to target the most vulnerable properties, and streamline the mitigation grant process. Under the no-action baseline, most changes in this proposed rule would be technical and include definitional updates and other changes made to harmonize FEMA regulations with current FEMA practices and HMA guidance, modernize and standardize the regulations, reduce redundancy, or increase readability. These changes would be largely nonsubstantive and not have an economic impact. Cost Savings. Under a no-action baseline, FEMA estimated costs savings of $85,463 that would result from removing the definition of ‘‘market value’’ at 44 CFR 79.2(f). Currently, the regulation requires FEMA to use the market value of a structure when making grant determinations. Removal of this requirement would allow FEMA to consider the value of the structure listed on the flood insurance policy when considering a grant request related to a vulnerable structure, rather than the ‘‘market value.’’ This would result in a reduction in the time it takes FEMA personnel to review a grant application. Using ‘‘market value’’ required additional research and appraisals, whereas the flood insurance property value is readily available to FEMA personnel. FEMA estimated this change would reduce the personnel time it takes to review a grant application by an estimated 2 hours per review for a total of $85,463 annually. FEMA based its estimates on the estimated annual average number of FMA grant applications that required a market value review between 2013 and 2017 and the wage rates of the personnel reviewing the grants. The annual average number of grant requests was 512. Table 3 shows the annual number of grant requests for vulnerable VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 TABLE 3—ANNUAL GRANT REQUESTS REQUIRING MARKET VALUE REVIEW FMA program Year 2013 2014 2015 2016 2017 Reviews of the grant applications can vary widely from simple—all documentation accompanies the request and requires very little follow-up—to complex. For this analysis, FEMA chose to capture the variability in the grant application reviews by using a weighted average of the hours it takes to complete the reviews. FEMA estimated that 25 percent of the reviews are simple; these reviews take 8 hours each on average to complete. Reviews of applications that are average in their complexity comprise 50 percent of the reviews and are assumed to take 12 hours each. Twenty-five percent of the reviews are complex and take 16 hours on average to complete.106 Taking a weighted average of the times listed and using the distribution of 25 percent simple/50 percent average/25 percent complex, FEMA estimated that grant application reviews take 12 hours on average to complete. ([(0.25 × 8) + (0.50 × 12) + (0.25 × 16)] = 12 hours). Program Specialists (GS 13, step 5) and contracted Civil Engineers conduct the reviews, the Program Specialists conduct 75 percent of reviews and the Civil Engineers conduct the remaining 25 percent. The fully-loaded average hourly wage for GS 13, step 5 at the FEMA regional locations is $89.35 107 and $65.79 108 is the fully-loaded hourly 106 FEMA personnel who review the FMA grant requests provided the information on the average time to review and the discussion of complexity. 107 Based on the OPM General Schedule of Pay, January 2018, the average base wage of GS 13, step 5 in each of the FEMA regional office locations is $61.20 (Boston, MA; NY, NY; Philadelphia, PA; Atlanta, GA; Chicago, IL; Denton, TX; KC, MO; Denver, CO; Oakland, CA; and Bothell, WA), which is multiplied by a 1.46 benefits multiplier (December 2018, BLS Employer Costs for Employee Compensation) to get a fully loaded wage rate of $89.35/hour. Access and downloaded July 5, 2019. https://www.opm.gov/policy-data-oversight/payleave/salaries-wages/salary-tables/pdf/2018/ salhrl.pdf. 108 Based on Bureau of Labor Statistics May 2018 National Employment and Wage Rate, National File (xls), a Civil Engineer, SOC 17–2050, has a base wage of $45.06, which is multiplied by a benefits multiplier of 1.46 (December 2018, BLS Employer PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 wage rate for Civil Engineers. Using the 12-hour average estimate for reviewing the grant application, FEMA estimates that each year it spends $512,778 on average to review FMA grant applications. ([(512 grant reviews × 12 hours per review × $89.35 hourly wage for Program Specialist × 0.75) + ([(512 grant reviews × 12 hours per review × $65.79 hourly wage for Civil Engineer × 0.25)] ÷ (0.75 + 0.25) = $512,778.20). FEMA estimated that removing the definition of ‘‘market value’’ would reduce its administrative burden by 2 hours per review. This results in each review taking 10 hours instead of 12, on average. Using the same calculation as above and 10 hours instead of 12 hours per review, FEMA’s average amount spent each year on reviewing FMA grant applications would be $427,315 and would result in an estimated annual cost savings of $85,463. ($512,778¥$427,315 = $85,463). Clarification of Mitigation Grant Terms and Conditions. The current HMA grant program regulations contain inconsistencies or vague language that may cause confusion. Specifically, FEMA would add definitions for ‘‘Federal award’’ and ‘‘pass-through entity;’’ and replace definitions of ‘‘grantee,’’ ‘‘subgrant,’’ and ‘‘subgrantee’’ with ‘‘recipient,’’ ‘‘subaward,’’ and ‘‘subrecipient,’’ respectively. These changes would make the HMA regulations consistent with FEMA’s other regulations. Revising, Adding, or Removing Definitions. FEMA proposes to revise existing definitions for clarification purposes, to add several definitions to conform with BW–12 and current agency practice, and to delete others that are obsolete. FEMA believes the changes are clear and more consistent with definitions used in 2 CFR part 200 and the HMA Guidance.109 Shifting from Standard Mitigations to RL and SRL Structures. One of the main focuses of this proposed rulemaking is on mitigation grants made to properties in the NFIP that have been repeatedly subject to costly loss claims. FEMA provides a range of available mitigation options including the FMA program to address vulnerable RL and SRL structures. Once a structure is mitigated through one of the programs, it could be Costs for Employee Compensation) to get a fully loaded wage rate of $65.79/hour. Accessed and downloaded July 5, 2019. https://www.bls.gov/oes/ tables.htm. 109 Hazard Mitigation Assistance Guidance (HMA Guidance), Feb. 27, 2015, available at https:// www.fema.gov/media-library-data/142498316544938f5dfc69c0bd4ea8a161e8bb7b79553/HMA_ Guidance_022715_508.pdf (last accessed Feb. 13, 2020). E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules protected from flooding, and can be removed from the repetitive flood loss list of un-mitigated properties insured by the NFIP. This reduces the flood vulnerability to RL and SRL structures, preventing further losses to the policyholders, as well as to FEMA. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013 when FEMA implemented it through the HMA Guidance. Shifting from State Allocations to Competition. Before BW–12, FMA program funding was based on an allocation methodology that required an analysis of the number of insured properties and RL properties present within a jurisdiction and each State was allocated a share of the overall available funding. BW–12 changed this process to a fully-competitive program that allows FEMA to select subapplications according to FEMA priorities no matter the location. This change lifted the constraints that were formerly in place against multiple eligible subrecipients in the same jurisdiction with vulnerable properties, allowing a more adequate coverage area within and across States and contributing to the increase in the size and volume of RL and SRL properties covered by each grant. FEMA is able to identify and mitigate properties with the highest risk from flooding and provide the greatest savings to the NFIP. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013 when FEMA implemented it through the HMA Guidance. Eliminating the Limit on In-Kind Contributions. Eliminating the limit on in-kind contributions for a recipient’s cost share modifies the nature, or makeup, of the recipient’s contribution but does not change the overall dollar amount required for the recipient’s contribution. FEMA believes this is advantageous because recipients and subrecipients are able to leverage their own optimal mix of in-kind and cash to meet their portion of the cost-share. There is no change to transfers between FEMA and grantees because the cost share does not change; however, the make-up of the recipient’s portion changes. Summary of Benefits. Under a noaction baseline FEMA believes this rule would promote a better understanding of the FMA program by updating the regulations that govern the HMA programs to conform with adjustments made by BW–12 and current agency practice. These changes would clarify existing requirements and help facilitate the flood portion of the Hazard Mitigation Grant Program processes. FEMA estimated annual cost savings of $85,463 per year. Removing the definition of ‘‘market value’’ would lead to cost savings to FEMA. Removing this definition would reduce the time it takes to conduct an initial grant application review by 2 hours. Under a pre-statutory (pre-BW–12) baseline, FEMA believes there are considerable benefits associated with the shift to entirely competitive awards for the grants instead of the previous State-specific allocations, as well as the 53493 more flexible in-kind match option. The shift to more vulnerable RL and SRL properties by modifying the cost shares and giving priority to applications with the most vulnerable properties are expected to reduce the frequency of loss claims and promote community resiliency through mitigation. There are also qualitative benefits due to the elimination of the cap on FMA funding for States and communities and the opening of the program to a fully competitive award system. These changes enhance FEMA’s ability to administer the FMA program in a more streamlined and cost effective manner. Removing State allocations of grant resources and accepting in-kind State contributions further streamline the program. Collectively, these benefits justify the proposed rule and update FEMA’s regulations to reflect current statutory authority. Transfers Federal Cost Shares. The adjustments in cost shares made by BW–12 result in distributional impacts, with certain grant programs receiving relative increases and decreases in grant funds. To analyze the impact of changes to the cost shares, FEMA summarized available mitigation project data for standard, RL, and SRL grants.110 Between 2006 and 2012 (pre-BW–12), FEMA provided a total of 390 grants to 244 recipients for 1,014 properties. The value of those grants was $287,140,206 with FEMA paying $202,072,763 and recipients paying $85,067,443. Table 4 shows the distribution of these grants by category. TABLE 4—PRE-BW–12 MITIGATION PROJECTS AND ASSOCIATED VALUE BY GRANT CATEGORY [2018$] Standard (≤75% federal cost share) Year Number of grants Value of grants Repetitive loss (75% federal cost share) Severe repetitive loss (90–100% federal cost share) Federal share obligated Number of grants Value of grants Federal share obligated Number of grants Value of grants Federal share obligated 2006 .............................. 2007 .............................. 2008 .............................. 2009 .............................. 2010 .............................. 2011 .............................. 2012 .............................. Average ......................... 93 85 70 54 35 17 25 54 $38,326,383 45,485,645 36,449,791 79,692,889 32,133,654 17,218,947 32,610,483 40,273,970 $28,399,846 33,225,037 24,638,444 57,976,016 22,507,910 11,035,040 20,247,542 28,289,976 ................ ................ ................ 3 2 ................ ................ 3 $ ........................ ........................ 2,973,885 1,454,583 ........................ ........................ 632,638 $ ........................ ........................ 2,431,695 881,884 ........................ ........................ 473,368 2 ................ 1 3 ................ ................ ................ 2 $147,974 ........................ 34,540 611,432 ........................ ........................ ........................ 113,421 $147,974 ........................ 31,086 550,289 ........................ ........................ ........................ 104,193 Total ....................... 379 281,917,792 198,029,835 5 4,428,468 3,313,579 6 793,946 729,349 110 FEMA assumes that the mitigation project level grant data with applications comprising mixed property categories resulting in blended cost share percentages (any total cost share not equal to 100 percent, 90 percent, or 75 percent Federal) would VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 be rounded up to the nearest threshold category. This would not round up project values or Federal cost shares in dollar terms, only their tabulation and consideration as RL or SRL. An application with a determined Federal cost share of 91–99 PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 percent would be counted as part of the 100 percent SRL category, while applications with 76–89 percent Federal cost shares would be counted as part of the 90 percent Federal RL category. E:\FR\FM\28AUP2.SGM 28AUP2 53494 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules The 390 grants from pre-BW–12 were one of three types—Standard Mitigation (up to 75 percent Federal cost share); RL (75 percent Federal cost share); or SRL (90–100 percent Federal cost share). Prior to BW–12, there were 379 Standard Mitigation grants with a total value of $281,917,792. FEMA’s share was $198,029,835 and the recipients’ share was $83,887,957 (70 percent average Federal cost share). For RL grants, there were five grants with a total value of $4,428,468. FEMA’s share was $3,313,579 and the recipients’ share was $1,114,889 (75 percent Federal cost share). For SRL grants, there were six grants made with a total value of $793,946. FEMA’s share was $729,349 and the recipients’ share was $64,597 (92 percent Federal cost share). Post-BW–12 (2013–2017), FEMA provided a total of 527 grants to 204 recipients for 2,873 properties. The total value of those grants was $682,040,624. FEMA’s share was $622,171,437 and recipients’ share was $59,869,187. Table 5 shows the distribution of these grants by category. TABLE 5—POST-BW–12 MITIGATION PROJECTS AND ASSOCIATED VALUE BY GRANT CATEGORY [2018$] Standard (≤75% federal cost share) Year Number of grants Federal share obligated Value of grants Repetitive loss (75–90% federal cost share) Number of grants Value of grants Severe repetitive loss (100% federal cost share) Federal share obligated Number of grants Value of grants Federal share obligated 2013 .............................. 2014 .............................. 2015 .............................. 2016 .............................. 2017 .............................. Average ......................... 18 28 16 26 33 24 $10,723,474 8,730,394 7,187,417 11,762,427 13,430,244 10,366,791 $7,079,996 5,245,019 5,375,058 8,729,565 9,967,987 7,279,525 5 5 8 12 5 7 $11,904,781 6,731,307 33,162,836 29,128,628 5,835,914 17,352,693 $10,163,082 5,749,293 29,399,251 24,800,531 4,880,298 14,998,491 65 68 80 99 59 74 $98,392,747 73,550,347 122,139,120 170,742,360 78,618,628 108,688,640 $88,681,628 74,444,363 117,708,589 156,950,119 72,996,658 102,156,271 Total ....................... 121 51,833,956 36,397,625 35 86,763,466 74,992,455 371 543,443,202 510,781,357 These 527 grants were one of three types—Standard Mitigation (up to 75 percent Federal cost share); RL (75–90 percent Federal cost share); or SRL (90– 100 percent Federal cost share) (all postBW–12 cost shares). There were 121 Standard Mitigation grants with a total value of $51,833,956. FEMA’s share was $36,397,625 and the recipients’ share was $15,436,331 (70 percent average Federal cost share). For RL grants, there were 35 grants with a total value of $86,763,466. FEMA’s share was $74,992,455 and the recipients’ share was $11,771,011 (86 percent Federal cost share). For SRL grants, there were 371 grants made with a total value of $543,443,202. FEMA’s share was $510,781,357 and the recipients’ share was $325,661,845 (94 percent Federal cost share). These grants often include some ineligible costs, including cost overruns or underruns, the use of insurance proceeds that FEMA deducted as a duplication of benefits,111 or increased cost of compliance (ICC),112 so the actual cost shares do not equal the percentages listed above. For example, although SRL grants have a 100 percent Federal cost share, the actual average Federal share was 94 percent. 111 Duplication of Benefits refers to assistance from more than one source that is used for the same mitigation purpose or activity. The purpose may apply to the whole project or only part of it. HMA funds cannot duplicate funds received by or available to applicants or subapplicants from other sources for the same purpose. Examples of other sources include insurance claims, other assistance programs (including previous project or planning grants and subawards from HMA programs), legal awards, or other benefits associated with properties or damage that are the subject of litigation. HMA does not require that property owners seek assistance from other sources (except for insurance claims). However, it is the responsibility of the property owner to report other benefits received, any applications for other assistance, the availability of insurance proceeds, or the potential for other compensation, such as from pending legal claims for damages, relating to the property. References: Sec. 312 of the Stafford Act; 44 CFR 79.6(d)(7); Hazard Mitigation Assistance Guidance VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 Changing Cost Shares and to a Fully Competitive Grant Process for FMA Changing the cost shares had a distributional impact, where the proportion of Federal funds increased while the recipients’ proportion decreased by the same amount. Similarly, the shift from State allocations of grant funding to a competitive-based program that allows grants to be allocated to the most vulnerable properties, resulting in distributional impacts where recipients in certain States receive more in grant funding where others see a decrease. FEMA was not able to isolate this effect from the effect of changing the cost shares, since they were implemented at the same time. First, FEMA analyzed the shift in grant priorities as a distributional impact between grant programs. This was done by applying the change in percent share of standard, RL, and SRL grants (from pre-BW–12 to post-BW–12), to the total FMA grant funding postBW–12, showing the relative decreases and increases by type of FMA grant in PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 terms of post-BW–12 grant funding caused by making the grants competitive and shifting funding to riskier properties. • The five-year total share of standard mitigation grants decreased by $617,928,805 post-BW–12 (7.6 percent of total funding post-BW–12 ¥ 98.2 percent of funding pre-BW–12) × $682,040,624 total grant funds postBW–12)). • The five-year total share of RL grants increased by $76,388,550 postBW–12 (12.7 percent ¥ 1.5 percent × $682,040,624). • The five-year total share of SRL grants increased by $541,540,225 postBW–12 (79.7 percent ¥ 0.3 percent × $682,040,624). This shows the total five-year relative increases and decreases between FMA programs in terms of post-BW–12 grant funding: (¥$617,928,805 for standard grants + $76,388,550 for SL grants + $541,540,225 SRL grants = $0). Table 6 shows changes in the total number of grants as well as the Federal and non-Federal shares for all grants pre-BW–12 and post-BW–12 with the percent change in grants and funding. (February 27, 2015), Part III, D.5, pages 31–32; HMA Tool for Identifying Duplication of Benefits https:// www.fema.gov/library/viewRecord.do?id=6815. 112 Increased Cost of Compliance (ICC) provides up to $30,000 to help cover the cost of mitigation measures that will reduce flood risk. ICC coverage is a part of most standard flood insurance policies available under the NFIP. https://www.fema.gov/ media-library/assets/documents/1130. E:\FR\FM\28AUP2.SGM 28AUP2 53495 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules TABLE 6—CHANGE IN AVERAGE ANNUAL NUMBER OF GRANTS AND FUNDING PRE-BW–12 TO POST-BW–12 [2018$] Pre-BW–12 Percent pre-BW–12 Post-BW–12 Percent post-BW–12 Percent change Standard Mitigation Grants per Year ................................................................... Funding per year .................................................................. 54 $40,273,970 91.5 98.2 24 $10,366,791 22.9 7.6 ¥68.6 ¥90.6 5.1 1.5 7 $17,352,693 6.7 12.7 +1.6 +11.2 3.4 0.3 74 $108,688,640 70.5 79.7 +67.1 +79.4 Repetitive Loss Grants per Year ................................................................... Funding per year .................................................................. 3 $632,638 Severe Repetitive Loss Grants per Year ................................................................... Funding per year .................................................................. When comparing pre-BW–12 standard mitigation grants to post-BW–12, both the average annual number of approved grants and the average annual total amount of funding dropped from $40.3 million to $10.4 million. For RL structures, the average annual number of approved grants increased and the amount of funding increased from $1.8 million to $17.4 million. For SRL structures, both the average annual number of approved grants and the average annual funding increased from $0.25 million to $108.7 million when compared to pre-BW–12. This reflects BW–12 shifting priority from standard mitigations to RL and SRL structures. FEMA’s data indicate a trend toward both larger project sizes and more recently an increased number of RL and SRL projects. FEMA then analyzed the distributional impacts of the Federal cost shares that resulted from both the shift in priorities and the changes in cost shares. The Federal cost share for standard mitigation grants remained at 75 percent over the post-BW–12 period analyzed. The cost share for RL grants increased from an average of 75 percent pre-BW–12 to 86 percent post-BW–12. SRL grants had an average 92 percent cost share pre-BW–12 and a 94 percent 2 $113,421 cost share post-BW–12. FEMA also analyzed the change in the Federal cost share for the three grant categories together, which shows the impact of BW–12’s changes to cost share amounts as well as shifting funding to RL and SRL grants, which have higher cost shares. The total Federal share of all FMA grant categories pre-BW–12 was 70.4 percent ($287,140,206 ÷ $202,072,763). Post BW–12, the Federal share was 91.2 percent ($682,040,624 ÷ $622,171,437). The increase in transfers from FEMA to grantees as a result of the changed cost shares and changed priorities, in terms of post-BW–12 grant funding, was $141,864,450 (91.2 percent ¥ 70.4 percent × $682,040,624) over five years, or an average increase of $28,372,890 per year. Under a no-action baseline, the proposed rule would result in no transfer impacts, as FEMA has already implemented the updated cost share percentages in the 2013 HMA Guidance. Under a pre-statutory (pre-BW–12) baseline, the revisions to the cost share and re-prioritization to grants with higher cost shares result in distributional transfer impacts shifting funding to the most vulnerable properties and an increase in transfers from FEMA to grant recipients. The discounted total 10-year transfers from FEMA to grant recipients are $283.7 million ($28.4 million annualized 113). Mitigation Planning Grants. BW–12 lowered the funding cap on the amount of money that could be used for the flood portion of the individual multihazard mitigation plans to $50,000 per recipient and $25,000 per subrecipient, but removed a restriction that grantees could only receive funding for planning grants once every 5 years. Lowering the cap on Federal funds results in decreased funding per applicant. However, FEMA believes this is offset by the removal of the frequency restriction, which results in a negligible change in the number of approved applications and awards. FEMA found the data does not show a substantial change in the number of applications, and thus FEMA assumed that the removal of the 5-year restriction is countered by the lowered cap on funding, resulting in minimal distributional impacts as shown in Table 7. Because FEMA implemented these changes concurrently, FEMA was unable to isolate the effects of individual changes. TABLE 7—MITIGATION PLANNING GRANTS 2006–2017 [2018$] Year 2006 2007 2008 2009 2010 2011 Applications ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. 113 The annualized amounts for 3 percent and 7 percent are equal to the estimated annual transfers VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 167 561 523 491 364 417 of $28.4 million because the amounts for each year are identical and the first year is discounted. PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 E:\FR\FM\28AUP2.SGM 28AUP2 Approved grants 92 481 374 346 288 363 Average grant amount $286,765 89,709 82,248 82,248 81,514 102,173 53496 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules TABLE 7—MITIGATION PLANNING GRANTS 2006–2017—Continued [2018$] Year Approved grants Applications Average grant amount 2012 ............................................................................................................................................. 173 155 142,411 Average Pre-BW–12 ............................................................................................................. 385 300 107,838 ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. ............................................................................................................................................. 260 293 351 329 422 228 264 315 287 377 115,022 87,772 93,000 170,262 98,268 Average Post-BW–12 ........................................................................................................... 331 294 111,899 2013 2014 2015 2016 2017 Since 2013, FEMA has applied the new caps on funding for FMA planning grants per recipient and subrecipient. The caps align with and reflect FEMA’s shift to focus the majority of FMA program funds on mitigating the risk to the most vulnerable properties. FEMA is no longer constrained by any limit on how often a recipient or subrecipient can receive a planning grant or the total amount that can be granted to a recipient. Further, the lower caps per recipient and subrecipient allow FEMA to assist more recipients and subrecipients. Alternatives Most of the changes in this proposed rule are based on statute. FEMA has limited discretion in determining which changes to make. The changes that carry an economic impact under a prestatutory (pre-BW–12) baseline are the proposed changes to 44 CFR 79.4 (proposed § 77.4): FMA Grant Federal Cost Shares and 44 CFR 79.6 (proposed § 77.6): Flood Portion of Multi-Hazard Mitigation Plans. BW–12 prescribed these changes. These changes are neither new nor discretionary and FEMA did not consider alternatives. TABLE 8—A–4 ACCOUNTING STATEMENT [2018$] Period of analysis: 2006 to 2017 7 Percent discount rate 3 Percent discount rate .085463 ......................................... .085463 ......................................... N/A ................................................ N/A. Category BENEFITS: Annualized Monetized $millions/year. Annualized Quantified ............ Qualitative ............................... COSTS: Annualized Monetized $millions/year. Annualized quantified ............. Qualitative ............................... TRANSFERS: Annualized $millions/year. Monetized From/To .................................. Source citation (RIA, preamble, etc.) • Allows FEMA to target most vulnerable properties and streamline mitigation grant process. • Modernize and standardize regulations to match current practice and statute and increase readability. • Shift from State-based allocations to a competitive process, allowing FEMA to select applications according to FEMA priorities rather than location. • Eliminate limits on in-kind contributions allowing recipients more flexibility to cover their portion of the cost share. Preamble (RA). 0.000742 ....................................... 0.000635 ....................................... Preamble (RA). N/A ................................................ N/A. N/A. 28.4 ............................................... 28.4 ............................................... Increase in transfers from FEMA to HMA recipients Source citation (RIA, preamble, etc.) Effects State, Local, and/or Tribal Government. Qualitative benefits. Increase in transfers from FEMA to State, local, Tribal governments. 17:57 Aug 27, 2020 Jkt 250001 PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 Preamble (RA). Preamble (RA). Category VerDate Sep<11>2014 Preamble (RA) E:\FR\FM\28AUP2.SGM Preamble (RA). 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules Source citation (RIA, preamble, etc.) Category Effects Small business ................................ There were 231 Small entity recipients from 2006–2017. Prior to BW–12, an average of 16 recipients per year were small entities. Post-BW–12, there were an average of 24 small entity recipients per year. Small entities were more likely to receive RL or SRL grants and slightly less likely to receive standard mitigation grants, so the Federal cost shares for small entities were, on average, higher post-BW–12. None. None. Wages ............................................. Growth ............................................. B. Regulatory Flexibility Act The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) requires agency review of proposed and final rules to assess their impact on small entities. When an agency promulgates a notice of proposed rulemaking under 5 U.S.C. 553, the agency must prepare an Initial Regulatory Flexibility Analysis (IRFA) unless it determines and certifies pursuant to 5 U.S.C. 605(b) that a rule, if promulgated, would not have a significant impact on a substantial number of small entities. FEMA believes this proposed rule does not have a significant economic impact on a substantial number of small entities. However, FEMA is publishing this IRFA to aid the public in commenting on the potential small entity impacts of the proposed requirements in this NPRM. FEMA invites all interested parties to submit data and information regarding the potential direct economic impacts on small entities that would result from the adoption of this NPRM. FEMA will consider all comments received in the public comment process. In accordance with the Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121, 110 Stat. 857), FEMA prepared this IRFA to examine the effects of the adjustments made by BW–12 and implemented by FEMA in the 2013 HMA Guidance on small entities. A small entity may be: A small independent business, defined as independently owned and operated, is organized for profit, and is not dominant in its field per the Small Business Act (5 U.S.C. 632); a small notfor-profit organization (any not-forprofit enterprise which is independently owned and operated and is not dominant in its field); or a small governmental jurisdiction (locality with fewer than 50,000 people) per 5 U.S.C. 601–612. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 1. A Description of the Reasons Why Action by the Agency Is Being Considered FEMA initiated this rulemaking to codify legislative requirements included in the Biggert-Waters Flood Insurance Reform Act of 2012, Public Law 112– 141, 126 Stat. 916 (BW–12), which amended the National Flood Insurance Act of 1968 (NFIA) and required changes to all major components of the National Flood Insurance Program (NFIP), including mitigation grants authorized under the NFIA. FEMA implemented the legislative requirements in BW–12 through policy/ guidance in 2013 and is now proposing to codify these changes in regulation, to reflect current agency practice, and to clarify existing regulations. Annually, FEMA provides grant funding to reduce or eliminate risk of flood damage to buildings that are insured under the NFIP. Before BW–12, FEMA administered three distinct NFIP grant programs: (1) The Flood Mitigation Assistance (FMA) Program; (2) the Repetitive Flood Claims (RFC) Program; and (3) the Severe Repetitive Loss (SRL) Program. BW–12 eliminated the RFC and SRL programs and consolidated aspects of those programs into the FMA Program. There are two BW–12 provisions that FEMA codifies in this rule that result in substantive modifications to the FMA regulations: (1) Cost shares for mitigation projects and (2) the amount of FMA funds available for mitigation planning grants. BW–12 requires these changes and FEMA implemented them through the HMA Guidance in 2013. In addition, the proposed rule would make nonsubstantive revisions intended to clarify the current grant regulations at 44 CFR parts 79, 80, 201, and 206, subpart N by adding new definitions and substitute terms that reflect the current version of 2 CFR parts 200 and 3002. Other nonsubstantive changes in the proposed rule remove references to programs eliminated by BW–12. In general, the changes in the proposed rule do not reduce the amount of funding appropriated for the FMA PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 53497 Preamble (IRFA). program or the number of grant recipients. Rather, the proposed rule alters the distribution of those funds to recipients with NFIP insured facilities with the highest risk of flood damage. Specifically, BW–12 requires changes to the Federal cost shares used for FMA grants. These changes to the cost shares prioritize the most vulnerable severe repetitive loss properties by increasing FEMA’s cost share portion from 75 percent Federal to 75–90 percent Federal for RL properties and from 90 to 100 percent Federal to 100 percent Federal for SRL properties. FEMA does not change the cost share for ‘‘standard’’ mitigation properties; that cost share remains at the current level of 75 percent Federal. FEMA includes a detailed marginal analysis table which lists all of the changes made by BW–12; that table is posted in the public docket for this rulemaking available on www.regulations.gov under Docket ID FEMA–2019–0011. Most of the changes in this rule are nonsubstantive clarifications. Many of the changes remove language describing a program or a feature of the FMA program that expired or is no longer relevant, applicable, or necessary. FEMA expects that the changes offer negligible or inconsequential benefits to FEMA and other administrating authorities. 2. A Succinct Statement of the Objectives of, and Legal Basis for, the Proposed Rule The objective of this proposed rule is to codify the legislative requirements in BW–12 and to clarify existing regulations. Specifically, this proposed rule would make substantive changes intended to codify BW–12 by removing 44 CFR part 78 and substantially revising Part 79. In addition, the proposed rule would make nonsubstantive revisions intended to clarify 44 CFR parts 79, 80, 201, and 206, subpart N by adding new definitions and substitute terms that reflect the current version of 2 CFR parts 200 and 3002. Other nonsubstantive changes included in the proposed rule E:\FR\FM\28AUP2.SGM 28AUP2 53498 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules would remove references to programs eliminated by BW–12. 3. A Description of and, Where Feasible, an Estimate of the Number of Small Entities To Which the Proposed Rule Will Apply The proposed rule directly affects all eligible FMA grant recipients. FEMA estimates that the changes from BW–12 affect FMA grant recipients that are small governmental jurisdictions with a population of less than 50,000, as defined at 5 U.S.C. 601(5).114 To estimate the effects of the adjustments made by BW–12, and codified in this rule, FEMA used the same methodology used in the regulatory analysis.115 In general, FEMA identified the affected population—recipients of FEMA’s FMA grants—and analyzed how the changes affect those recipients. Using those results, FEMA then evaluated which recipients qualified as ‘‘small entities.’’ Eligible FMA grant recipients may include States, U.S. territories, and Indian Tribal governments; subrecipients may include local governments and governmental organizations such as flood, sewer, and water districts. FEMA removed from its RFA dataset and analysis any recipients that are States and U.S. territories because they have populations greater than 50,000. FEMA also removed any Indian Tribal governments because they are not included in the definition of a small entity.116 The remaining recipients were either local governments or governmental organizations. FEMA used the U.S. Census Bureau’s annual population estimates for 2018 produced by its Population Estimates Program (PEP) 117 to determine the population for each recipient.118 Table 9 summarizes the number of small entities affected by the changes in BW–12. TABLE 9—ESTIMATED NUMBER OF SMALL ENTITIES AFFECTED BY PROPOSED RULE Grants to small entities Year Pre-BW–12 .............................................................................. Small entity recipients ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... 30 25 16 18 11 4 8 23 27 18 25 26 67 39 14 41 76 12 75 64 66 71 56 78 30 25 16 18 11 4 8 23 27 18 25 26 Total Small Entity Recipients ........................................... ................................................ 231 659 231 Total All Recipients .......................................................... ................................................ 917 3,887 448 Small Entity Recipients as a Percent of Total Recipients ................................................ 25.2% 17.0% 51.6% Pre-BW–12: ............................................................................. Total ....................................... Annual Average ...................... Total ....................................... Annual Average ...................... 112 16 119 24 324 46 335 67 112 16 119 24 Post-BW–12 ............................................................................ Post-BW–12: ........................................................................... 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Properties within grants Between 2006 and 2017, FEMA awarded a total of 917 FMA grants to 448 recipients to mitigate flood risk to 3,887 properties. Of the total 448 recipients, 231 recipients, or 25.2 percent, had populations under 50,000 and are considered small entities. These small entities used the FMA grants to mitigate flood risk to 659 vulnerable properties. These 231 small entity recipients are all local governments. Pre-BW–12, FEMA awarded 112 grants to small entities. Of these, 109 were for standard mitigation with an average Federal cost share of 73 percent, 2 were RL with an average Federal cost share of 82 percent, and 1 was SRL with a cost share of 90 percent. 114 See 5 U.S.C. 601(3)–(6). In general, the term ‘‘small entity’’ can have the same meaning as the terms ‘‘small business,’’ ‘‘small organization,’’ and ‘‘small governmental jurisdiction’’ for purposes of this analysis. Specifically, section 601(3) defines a ‘‘small business’’ as having the same meaning as ‘‘small business concern’’ under section 3 of the Small Business Act. This includes any small business concern that is independently owned and operated that is not dominant in its field of operation. Section 601(4) defines a ‘‘small organization’’ as any not-for-profit enterprise that is independently owned and operated that is not dominant in its field of operation. Section 601(5) defines ‘‘small governmental jurisdiction’’ as governments of cities, counties, towns, townships, villages, school districts, or special districts with a population of less than 50,000. Acessed and downloaded June 4, 2019. https://uscode.house.gov/ view.xhtml?req=(title:5 section:601 edition:prelim) OR (granuleid:USC-prelim-title5section601) &f=treesort&edition=prelim&num=0&jumpTo=true. 115 FEMA’s methodology is included in section IV. Regulatory Analysis of this NPRM 116 The Regulatory Flexibility Act (RFA) defines a small entity as a small business, small nonprofit organization, or a small governmental jurisdiction. Section 601(5) defines small governmental jurisdictions as governments of cities, counties, towns, townships, villages, school districts, or special districts with a population of less than 50,000. 117 FEMA used the U.S. Census Bureau’s PEP estimates file entitled, ‘‘sub-est2018_all.csv’’ because it provided 2018 estimated populations for all states and all subgovernmental jurisdictions, including counties, parishes, etc., towns, cities, villages, etc. Accessed and downloaded June 4, 2019. https://www2.census.gov/programs-surveys/ popest/datasets/2010-2018/cities/totals/. 118 FEMA used the population of the county, parish, or borough in which the grant project was located as a proxy to determine the populations for governmental organizations. For example, FEMA used the New Castle County, DE 2018 population of 559,335 to determine if the New Castle Conservation District was a small entity. In this example, the population of 559,335 is greater than the 50,000 small entity threshold; thus, the new Castle Conservation District is not a small entity. VerDate Sep<11>2014 18:44 Aug 27, 2020 Jkt 250001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 E:\FR\FM\28AUP2.SGM 28AUP2 53499 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules TABLE 10—PRE-BW–12 PROJECTS AND VALUE BY GRANT CATEGORY (2018$) AWARDED TO SMALL ENTITIES Standard (≤75% federal cost share) Repetitive loss (RL) (75% federal cost share) Severe repetitive loss (SRL) (90%–100% federal cost share) Year Value of grants Grants 2006 2007 2008 2009 2010 2011 2012 Federal share obligated Grants $ Value of grants Federal share obligated Grants Value of grants Federal share obligated .............................. .............................. .............................. .............................. .............................. .............................. .............................. 30 25 16 15 11 4 8 $5,907,776 10,819,810 2,150,269 7,924,904 15,128,995 2,897,824 6,393,968 $4,388,166 7,647,471 1,575,275 5,763,784 11,345,865 2,042,931 4,789,345 ................ ................ ................ 2 ................ ................ ................ ........................ ........................ ........................ $2,350,766 ........................ ........................ ........................ ........................ ........................ ........................ $1,917,922 ........................ ........................ ........................ ................ ................ ................ 1 ................ ................ ................ ........................ ........................ ........................ $58,406 ........................ ........................ ........................ ........................ ........................ ........................ $52,565 ........................ ........................ ........................ Total ....................... 109 51,223,546 37,552,837 2 2,350,766 1,917,922 1 58,406 52,565 Post-BW–12, FEMA awarded 119 grants to small entities. Of these, 40 were standard mitigation with an average Federal cost share of 69 percent, 3 were RL with an average Federal cost the pre-BW–12 period. This shows the prioritization of more vulnerable properties. share of 88 percent, and 76 were SRL with an average Federal cost share of 90 percent. While the cost shares did not change significantly, more applicants received SRL grants when compared to TABLE 11—POST-BW–12 PROJECTS AND VALUE BY GRANT CATEGORY (2018$) AWARDED TO SMALL ENTITIES Standard (≤75% federal cost share) Repetitive loss (RL) (75%–90% federal cost share) Severe repetitive loss (SRL) (100% federal cost share) Year Grants 2013 2014 2015 2016 2017 Value of grants Federal share obligated Grants Value of grants Federal share obligated Grants Value of grants Federal share obligated .............................. .............................. .............................. .............................. .............................. 8 11 3 6 12 $955,085 2,529,635 2,434,059 285,707 5,098,868 $427,739 1,594,317 1,825,543 194,186 3,812,839 1 ................ ................ 2 ................ $7,145,136 ........................ ........................ 1,766,776 ........................ $6,337,841 ........................ ........................ 1,528,423 ........................ 14 16 15 17 14 $5,618,711 12,335,444 10,486,133 10,488,578 9,034,842 $3,711,417 12,017,816 9,829,253 9,134,257 8,474,084 Total ....................... 40 11,303,354 7,854,624 3 8,911,912 7,866,264 76 47,963,708 43,166,827 4. A Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Proposed Rule, Including an Estimate of the Classes of Small Entities Which Will Be Subject to the Requirement and the Types of Professional Skills Necessary for Preparation of the Report or Record This proposed rulemaking would codify FEMA’s current practice and make changes for clarity and accuracy. For that reason, FEMA does not anticipate this rulemaking places an increase in burden on small entities. 5. Identification, to the Extent Practicable, of All Relevant Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule There are no relevant Federal rules that duplicate, overlap, or conflict with the proposed rule. 6. A Description of Any Significant Alternatives to the Proposed Rule Which Accomplish the Stated Objectives of Applicable Statutes and Which Minimize Any Significant Economic Impact of the Proposed Rule on Small Entities BW–12 mandated most of the changes in this proposed rule, and therefore FEMA has limited discretion in implementing these changes. These are not new or discretionary program changes and for this reason, FEMA did not consider alternatives. Given that this rule is largely distributive in nature, entailing transfers between less vulnerable and more vulnerable groups of properties at all levels, no less burdensome alternatives to the proposed rule are available. In the absence of this proposed rule, small entities would experience negative repercussions that might result from inconsistences between the statutes, regulations, and agency policy. 7. Conclusion FEMA invites all interested parties to submit data and information regarding the potential economic impact that would result from adoption of the VerDate Sep<11>2014 18:44 Aug 27, 2020 Jkt 250001 PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 proposals in this NPRM. FEMA will consider all comments received in the public comment process. FEMA is interested in the potential impacts from the proposed rule on small entities and requests public comment on these potential impacts. If you think that this rule would have a significant economic impact on you, your business, your organization, or your local government, please submit a comment to the docket at the address under the ADDRESSES section. In your comment, explain why, how, and to what degree you think this rule would have an economic impact on you. After reviewing the public comments, FEMA may certify the final rule as not having a significant economic impact on a substantial number of small entities. FEMA will consider all comments received in the public comment process when making a final determination. C. Unfunded Mandates Reform Act of 1995 Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4, 2 U.S.C. 1531), each Federal agency ‘‘shall, unless otherwise prohibited by law, assess the effects of E:\FR\FM\28AUP2.SGM 28AUP2 53500 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules Federal regulatory actions on state, local, and Tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).’’ Section 202 of the Act (2 U.S.C. 1532) further requires that ‘‘before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement’’ detailing the effect on State, local, and Tribal governments and the private sector. The proposed rule would not result in such an expenditure, and thus preparation of such a statement is not required. D. National Environmental Policy Act of 1969 (NEPA) Under the National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. 4321 et seq. an agency must prepare an Environmental Assessment (EA) and Environmental Impact Statement (EIS) for any rulemaking that significantly affects the quality of the human environment. FEMA has determined that this rulemaking does not significantly affect the quality of the human environment and consequently has not prepared an EA or EIS. Categorical Exclusion A3 included in the list of exclusion categories at Department of Homeland Security Instruction Manual 023–01–001–01, Revision 01, Implementation of the National Environmental Policy Act, Appendix A, issued November 6, 2014, covers the promulgation of rules, issuance of rulings or interpretations, and the development and publication of policies, orders, directives, notices, procedures, manuals, and advisory circulars if they meet certain criteria provided in A3(a–f). This proposed rule meets the criteria in A3(a), (b), (c), and (d). The proposed rule would make a number of regulatory revisions that are strictly administrative. In addition, the proposed rule would amend an existing regulation without changing its environmental effect, and would also implement, without substantive change, statutory requirements and guidance documents. Because no extraordinary circumstances have been identified, this rule does not require the preparation of either an EA or an EIS as defined by NEPA. See Department of Homeland Security Instruction Manual 023–01– VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 001–01, Revision 01, Implementation of the National Environmental Policy Act, section (V)(B)(2). E. Paperwork Reduction Act of 1995 Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 U.S.C. 3501–3520, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the agency obtains approval from the Office of Management and Budget (OMB) for the collection and the collection displays a valid OMB control number. See 44 U.S.C. 3506, 3507. This rule contains collections of information that are subject to review by OMB. The information collections included in this rule are approved by OMB under control numbers 1660–0072 (Flood Mitigation Assistance (eGrants) and Grant Supplement Information), 1660–0062 (State/Local/Tribal Hazard Mitigation Plans), 1660–0026 (State Administrative Plan for the Hazard Mitigation Grant Program), and 1660– 0076 (Hazard Mitigation Grant Program Application and Reporting). Currently, FEMA is working to reinstate 1660– 0103 (Property Acquisition and Relocation for Open Space). This proposed rulemaking would call for no new collections of information under the PRA. This proposed rule includes information currently collected by FEMA and approved in OMB information collections 1660–0072, 1660–0062, 1660–0026, and 1660–0076. Currently, FEMA is working to reinstate 1660–0103. The actions of the proposed rulemaking do not impose any additional burden to this collection of information. The proposed changes in this rulemaking would not change the forms, the substance of the forms, or the number of recipients who would submit the forms to FEMA. F. Privacy Act/E-Government Act Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a proposed regulation will result in a system of records. A record is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. See 5 U.S.C. 552a(a)(4). A system of records is a group of records under the control of an agency from which information is retrieved by the name of the individual PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures. The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires specific procedures when an agency takes action to develop or procure information technology that collects, maintains, or disseminates information that is in an identifiable form. This Act also applies when an agency initiates a new collection of information that will be collected, maintained, or disseminated using information technology if it includes any information in an identifiable form permitting the physical or online contacting of a specific individual. A Privacy Threshold Analysis was completed. G. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive Order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials. Although Indian Tribal governments are potentially eligible applicants under HMA programs, FEMA has determined that this rule does not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. There is no substantial direct compliance cost associated with this proposed rule. The HMA programs are voluntary programs that provide funding to applicants, including Tribal governments, for eligible mitigation planning and projects that reduce disaster losses and protect life and property from future disaster E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules damages. An Indian Tribal government may participate as either an applicant/ recipient or a subapplicant/ subrecipient. FEMA does not expect the regulatory changes in this proposed rule to disproportionately affect Indian Tribal governments acting as recipients. H. Executive Order 13132, Federalism Executive Order 13132, Federalism, 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action. FEMA has reviewed this proposed rule under Executive Order 13132 and has determined that this rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore does not have federalism implications as defined by the Executive Order. FEMA has determined that this rule does not significantly affect the rights, roles, and responsibilities of States, and involves no preemption of State law nor does it limit State policymaking discretion. This rulemaking proposes amendments to regulations governing voluntary grant programs that may be used by State, local and Tribal governments to fund eligible mitigation activities that reduce disaster losses and protect life and property from future disaster damages. States are not required to seek grant funding, and this rulemaking does not limit their policymaking discretion. I. Executive Order 11988, Floodplain Management Pursuant to Executive Order 11988, each agency is required to provide leadership and take action to reduce the risk of flood loss, to minimize the impact of floods on human safety, health and welfare, and to restore and preserve the natural and beneficial values served by floodplains in carrying out its responsibilities for (1) acquiring, managing, and disposing of Federal lands and facilities; (2) providing Federally undertaken, financed, or VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. In carrying out these responsibilities, each agency must evaluate the potential effects of any actions it may take in a floodplain; to ensure that its planning programs and budget requests reflect consideration of flood hazards and floodplain management; and to prescribe procedures to implement the policies and requirements of the Executive Order. Before promulgating any regulation, an agency must determine whether the proposed regulations will affect a floodplain(s), and if so, the agency must consider alternatives to avoid adverse effects and incompatible development in the floodplain(s). If the head of the agency finds that the only practicable alternative consistent with the law and with the policy set forth in Executive Order 11988 is to promulgate a regulation that affects a floodplain(s), the agency must, prior to promulgating the regulation, design or modify the regulation in order to minimize potential harm to or within the floodplain, consistent with the agency’s floodplain management regulations and prepare and circulate a notice containing an explanation of why the action is proposed to be located in the floodplain. The purpose of the proposed rule is to update FEMA’s HMA program regulations to reflect statutory changes that have already been implemented. While the proposed rule would revise the regulations FMA administered by the NFIP, it would not impact other NFIA regulations that pertain to land use, floodplain management, or flood insurance. The majority of the revisions FEMA is proposing in this rulemaking apply to the regulations for the FMA program, which is a voluntary grant program that provides funding for activities designed to reduce the risk of flood damage to structures insured under the NFIP. When FEMA undertakes specific actions that may have effects on floodplain management, FEMA follows the procedures set forth in 44 CFR part 9 to assure compliance with this Executive Order. These procedures include a specific, 8-step process for conducting floodplain management and wetland reviews. The proposed rule would not change this process. PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 53501 J. Executive Order 11990, Protection of Wetlands Pursuant to Executive Order 11990, each agency must provide leadership and take action to minimize the destruction, loss or degradation of wetlands, and to preserve and enhance the natural and beneficial values of wetlands in carrying out the agency’s responsibilities for (1) acquiring, managing, and disposing of Federal lands and facilities; and (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. Each agency, to the extent permitted by law, must avoid undertaking or providing assistance for new construction located in wetlands unless the head of the agency finds (1) that there is no practicable alternative to such construction, and (2) that the proposed action includes all practicable measures to minimize harm to wetlands which may result from such use. In making this finding the head of the agency may take into account economic, environmental and other pertinent factors. In carrying out the activities described in the Executive Order, each agency must consider factors relevant to a proposal’s effect on the survival and quality of the wetlands. Among these factors are: Public health, safety, and welfare, including water supply, quality, recharge and discharge; pollution; flood and storm hazards; and sediment and erosion; maintenance of natural systems, including conservation and long-term productivity of existing flora and fauna, species and habitat diversity and stability, hydrologic utility, fish, wildlife, timber, and food and fiber resources; and other uses of wetlands in the public interest, including recreational, scientific, and cultural uses. The requirements of Executive Order 11990 apply in the context of the provision of Federal financial assistance relating to, among other things, construction and property improvement activities. However, the changes proposed in this rule would not have an effect on land use or wetlands. The purpose of the proposed rule is to update FEMA’s HMA program regulations to reflect statutory changes that have already been implemented. While the proposed rule would revise the regulations for FMA administered by the NFIP, it would not impact other NFIP regulations that pertain to land E:\FR\FM\28AUP2.SGM 28AUP2 53502 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules use, floodplain management, or flood insurance. The majority of the revisions FEMA is proposing in this rulemaking apply to the regulations for the FMA program, which is a voluntary grant program that provides funding for activities designed to reduce the risk of flood damage to structures insured under the NFIP. When FEMA undertakes specific actions that may have effects on wetlands, FEMA follows the procedures set forth in 44 CFR part 9 to assure compliance with this Executive Order. These procedures include a specific, 8-step process for conducting floodplain management and wetland reviews. The proposed rule would not change this process. FEMA will send this rule to the Congress and to GAO pursuant to the CRA if the rule is finalized. The rule is not a major rule within the meaning of the CRA. It will not have an annual effect on the economy of $100,000,000 or more, it will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions, and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreignbased enterprises in domestic and export markets. K. Executive Order 12898, Environmental Justice List of Subjects 44 CFR Part 77 Pursuant to Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994, as amended by Executive Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates environmental justice into its 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 programs, denying persons the benefits of programs, or subjecting persons to discrimination because of race, color, or national origin. This rulemaking will not have a disproportionately high or adverse effect on human health or the environment. This rulemaking will not have a disproportionately high or adverse effect on human health or the environment. Therefore the requirements of Executive Order 12898 do not apply to this rule. L. Congressional Review of Agency Rulemaking Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801–808, before a rule can take effect, the Federal agency promulgating the rule must submit to Congress and to the Government Accountability Office (GAO) a copy of the rule, a concise general statement relating to the rule, including whether it is a major rule, the proposed effective date of the rule, a copy of any cost-benefit analysis, descriptions of the agency’s actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act, and any other information or statements required by relevant executive orders. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 Flood insurance, Grant programs. 44 CFR Parts 78 and 79 Flood insurance, Grant programs. 44 CFR Part 80 Disaster assistance, Grant programs. 44 CFR Part 201 Administrative practice and procedure, Disaster assistance, Grant programs, Reporting and recordkeeping requirements. 44 CFR Part 206 Administrative practice and procedure, Coastal zone, Community facilities, Disaster assistance, Fire prevention, Grant programs-housing and community development, Housing, Insurance, Intergovernmental relations, Loan programs-housing and community development, Natural resources, Penalties, and Reporting and recordkeeping requirements. For the reasons set forth in the preamble, FEMA proposes to amend 44 CFR parts 77, 78, 79, 80, 201, and 206 as follows: PART 78—[REMOVED AND RESERVED] 1. Remove and reserve part 78 in its entirety. ■ PART 79—FLOOD MITIGATION GRANTS [REDESIGNATED AS PART 77 AND AMENDED] 2. Revise the authority citation for part 79 to read as follows: ■ Authority: 6 U.S.C. 101 et seq.; 42 U.S.C. 4001 et seq.; 42 U.S.C. 4104c, 4104d. 3. Redesignate part 79 as part 77 and amend the references to §§ 79.1 through 79.9 as follows: ■ PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 Old section 79.1 79.2 79.3 79.4 79.5 79.6 79.7 79.8 79.9 New section ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... ....................................... 77.1 77.2 77.3 77.4 77.5 77.6 77.7 77.8 77.9 4. Amend § 77.1 by, revising the section heading and paragraphs (a) and (b), and removing paragraph (c). The revisions read as follows: ■ § 77.1 Purpose and applicability. (a) The purpose of this part is to prescribe actions, procedures, and requirements for administration of the Flood Mitigation Assistance (FMA) grant program made available under the National Flood Insurance Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, as amended, 42 U.S.C. 4001 et seq. The purpose of the FMA program is to assist States, Indian Tribal governments, and communities for planning and carrying out mitigation activities designed to reduce the risk of flood damage to structures insured under the National Flood Insurance Program (NFIP). (b) This part applies to the administration of funds under the FMA program for which the application period opens on or after [EFFECTIVE DATE OF THE FINAL RULE]. ■ 5. Amend § 77.2 by revising paragraphs (a) through (m) and adding paragraphs (n) through (q) to read as follows: § 77.2 Definitions. (a) Except as otherwise provided in this part, the definitions set forth in § 59.1 of this subchapter are applicable to this part. (b) Applicant means the entity, such as a State or Indian Tribal government, applying to FEMA for a Federal award under the FMA program. Once funds have been awarded, the applicant becomes the recipient and may also be a pass-through entity. (c) Closeout means the process by which FEMA or the pass-through entity determines that all applicable administrative actions and all required work of the Federal award have been completed and takes actions as described in 2 CFR 200.343, ‘‘Closeout.’’ (d) Community means: (1) A political subdivision, including any Indian Tribe, authorized Tribal organization, Alaska Native village or authorized native organization, that has zoning and building code jurisdiction over a particular area having special E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules flood hazards, and is participating in the NFIP; or (2) A political subdivision of a State or other authority that is designated by political subdivisions, all of which meet the requirements of paragraph (d)(1) of this section, to administer grants for mitigation activities for such political subdivisions. (e) Federal award means the Federal financial assistance a recipient or subrecipient receives directly from FEMA or indirectly from a pass-through entity. The terms ‘‘award’’ and ‘‘grant’’ may also be used to describe a Federal award under this part. (f) Indian Tribal government means any Federally recognized governing body of an Indian or Alaska Native Tribe, band, nation, pueblo, village, or community that the Secretary of Interior acknowledges to exist as an Indian Tribe under the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. This does not include Alaska Native corporations, the ownership of which is vested in private individuals. (g) Management costs mean any indirect costs, administrative expenses, and other expenses not directly chargeable to a specific project that are reasonably incurred by a recipient or subrecipient in administering and managing an award or subaward. (h) Pass-through entity means a recipient that provides a subaward to a subrecipient to carry out part of the FMA program. (i) Recipient means the State or Indian Tribal government that receives a Federal award directly from FEMA to carry out an activity under the FMA program. A recipient may also be a passthrough entity. The term recipient does not include subrecipients. (j) Repetitive loss structure means a structure covered under an NFIP flood insurance policy that: (1) Has incurred flood-related damage on 2 occasions, in which the cost of repair, on average, equaled or exceeded 25% of the value of the structure at the time of each such flood event; and (2) At the time of the second incidence of flood related damage, the contract for flood insurance contains increased cost of compliance coverage. (k) Severe repetitive loss structure means a structure that is covered under an NFIP flood insurance policy and has incurred flood-related damage: (1) For which 4 or more separate claims payments have been made under flood insurance coverage under subchapter B of this chapter, with the amount of each claim (including building and contents payments) exceeding $5,000, and with the VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 cumulative amount of such claims payments exceeding $20,000; or (2) For which at least 2 separate flood insurance claims payments (building payments only) have been made, with cumulative amount of such claims exceeding the value of the insured structure. (l) State means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. (m) Subaward means an award provided by a pass-through entity to a subrecipient, for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the passthrough entity considers a contract. (n) Subapplicant means a State agency, community, or Indian Tribal government submitting a subapplication to the applicant for assistance under the FMA program. Upon grant award, the subapplicant is referred to as the subrecipient. (o) Subrecipient means the State agency, community, or Indian Tribal government that receives a subaward from a pass-through entity for the subrecipient to carry out an activity under the FMA program. (p) Administrator means the head of the Federal Emergency Management Agency, or his/her designated representative. (q) Regional Administrator means the head of a Federal Emergency Management Agency regional office, or his/her designated representative. ■ 6. Amend § 77.3 by revising paragraphs (a) through (c) and removing paragraph (d). The revisions read as follows: § 77.3 Responsibilities. (a) Federal Emergency Management Agency (FEMA). Administer and provide oversight to all FEMA-related hazard mitigation programs and grants, including: (1) Issue program implementation procedures, as necessary, which will include information on availability of funding; (2) Award all grants to the recipient after evaluating subaward applications for eligibility and ensuring compliance with applicable Federal laws, giving priority to such properties, or to the subset of such properties, as the PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 53503 Administrator may determine are in the best interest of the NFIF; (3) Provide technical assistance and training to State, local and Indian Tribal governments regarding the mitigation and grants management process; (4) Review and approve State, Indian Tribal, and local mitigation plans in accordance with part 201 of this chapter; (5) Comply with applicable Federal statutory, regulatory, and Executive Order requirements related to environmental and historic preservation compliance, including reviewing and supplementing, if necessary, the environmental analyses conducted by the State and subrecipient in accordance with applicable laws, regulations, and agency policy; (6) Monitor implementation of awards through quarterly reports; and (7) Review all closeout documentation for compliance and sending the recipient a request for additional supporting documentation, if needed. (b) Recipient. The recipient must have working knowledge of NFIP goals, requirements, and processes and ensure that the program is coordinated with other mitigation activities. Recipients will: (1) Have a FEMA approved Mitigation Plan in accordance with part 201 of this chapter; (2) Provide technical assistance and training to communities on mitigation planning, mitigation project activities, developing subaward applications, and implementing approved subawards; (3) Prioritize and recommend subaward applications to be approved by FEMA, based on the applicable mitigation plan(s), other evaluation criteria, and the eligibility criteria described in § 77.6; (4) Award FEMA-approved subawards; (5) Monitor and evaluate the progress of the mitigation activity in accordance with the approved original scope of work and budget through quarterly reports; (6) Closeout the subaward in accordance with 2 CFR 200.343 and 200.344, and applicable FEMA guidance; and (7) Comply with program requirements under this part, grant management requirements identified under 2 CFR parts 200 and 3002, the grant agreement articles, and other applicable Federal, State, Tribal and local laws and regulations. (c) Subrecipient. The subrecipient (or subapplicant, as applicable) will: (1) Complete and submit subaward applications to the recipient for FMA planning and project subawards; E:\FR\FM\28AUP2.SGM 28AUP2 53504 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules (2) Implement all approved subawards; (3) Monitor and evaluate the progress of the mitigation activity in accordance with the approved original scope of work and budget through quarterly reports; (4) Comply with program requirements under this part, grant management requirements identified under 2 CFR parts 200 and 3002, the grant agreement articles, and other applicable Federal, State, Tribal and local laws and regulations; and (5) Closeout the subaward in accordance with 2 CFR 200.343 and 200.344, and applicable FEMA guidance. ■ 7. Revise § 77.4 to read as follows: § 77.4 Availability of funding. (a) Allocation. (1) For the amount made available for the FMA program, the Administrator will allocate the available funds based upon criteria established for each application period. The criteria may include the number of NFIP policies, severe repetitive loss structures, repetitive loss structures, and any other factors the Administrator determines are in the best interest of the NFIF. (2) The amount of FMA funds used may not exceed $50,000 for any mitigation plan of a State or $25,000 for any mitigation plan of a community. (b) Cost share. All mitigation activities approved under the grant will be subject to the following cost share provisions: (1) For each severe repetitive loss structure, FEMA may contribute either: (i) Up to 100 percent of all eligible costs if the activities are technically feasible and cost effective; or (ii) Up to the amount of the expected savings to the NFIP for acquisition or relocation activities; (2) For repetitive loss structures, FEMA may contribute up to 90 percent of the eligible costs; (3) For all other mitigation activities, FEMA may contribute up to 75 percent of all eligible costs. (4) For projects that contain a combination of severe repetitive loss, repetitive loss, and/or other insured structures, the cost share will be calculated as appropriate for each type of structure submitted in the project subapplication. (c) Failure to make award within 5 years. Any FMA application or subapplication that does not receive a Federal award within 5 years of the application/subapplication submission date is considered to be denied, and any funding amounts allocated for such applications/subapplications will be VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 made available for other FMA awards and subawards. ■ 8. Revise § 77.5 to read as follows: § 77.5 Application process. (a) Applicant. (1) Applicants will be notified of the availability of funding for the FMA program pursuant to 2 CFR 200.202 and 200.203. (2) The applicant is responsible for soliciting applications from eligible communities, or subapplicants, and for reviewing and prioritizing applications prior to forwarding them to FEMA for review and award. (b) Subapplicant. Communities or other subapplicants who choose to apply must develop subapplications within the timeframes and requirements established by FEMA and must submit subapplications to the applicant. ■ 9. Revise § 77.6 to read as follows: § 77.6 Eligibility. (a) NFIP requirements. (1) States, Indian Tribal governments, and communities must be participating in the NFIP and may not be suspended or withdrawn under the program. (2) For projects that impact individual structures, for example, acquisitions and elevations, an NFIP policy for the structure must be in effect prior to the opening of the application period and be maintained for the life of the structure. (b) Plan requirement—(1) Applicants. States must have a FEMA-approved mitigation plan meeting the requirements of § 201.4 of this chapter that provides for reduction of flood losses to structures for which NFIP coverage is available. Indian Tribal governments must have a FEMAapproved mitigation plan meeting the requirements of § 201.7 of this chapter that provides for reduction of flood losses to structures for which NFIP coverage is available. The FEMAapproved mitigation plan is required at the time of application and award. (2) Subapplicants. To be eligible for FMA project grants, subapplicants must have an approved mitigation plan in accordance with part 201 of this chapter that provides for reduction of flood losses to structures for which NFIP coverage is available. The FEMAapproved mitigation plan is required at the time of application and award. (c) Eligible activities—(1) Planning. FMA planning grants may be used to develop or update State, Indian Tribal and/or local mitigation plans that meet the planning criteria outlined in part 201 of this chapter and provide for reduction of flood losses to structures for which NFIP coverage is available. (2) Projects. Projects funded under the FMA program are limited to activities PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 that reduce flood damages to properties insured under the NFIP. Applications involving any activities for which implementation has already been initiated or completed are not eligible for funding, and will not be considered. Eligible activities are: (i) Acquisition of real property from property owners, and demolition or relocation of buildings and/or structures to areas outside of the floodplain to convert the property to open space use in perpetuity, in accordance with part 80 of this subchapter; (ii) Elevation of existing structures to at least base flood levels or higher, if required by FEMA or if required by any State or local ordinance, and in accordance with criteria established by the Administrator; (iii) Floodproofing of existing nonresidential structures in accordance with the requirements of the NFIP or higher standards if required by FEMA or if required by any State or local ordinance, and in accordance with criteria established by the Administrator; (iv) Floodproofing of historic structures as defined in § 59.1 of this subchapter; (v) Demolition and rebuilding of properties to at least base flood levels or higher, if required by FEMA or if required by any State or local ordinance, and in accordance with criteria established by the Administrator; (vi) Localized flood risk reduction projects that lessen the frequency or severity of flooding and decrease predicted flood damages, and that do not duplicate the flood prevention activities of other Federal agencies. Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible; (vii) Elevation, relocation, or floodproofing of utilities; and (viii) Other mitigation activities not described or identified in (c)(2)(i) through (vii) of this section that are described in the State, Tribal or local mitigation plan. (3) Technical assistance. If a recipient applied for and was awarded at least $1 million in the prior fiscal year, that recipient may be eligible to receive a technical assistance grant for up to $50,000. (d) Minimum project criteria. In addition to being an eligible project type, mitigation grant projects must also: (1) Be in conformance with State, Tribal and/or local mitigation plans approved under part 201 of this chapter E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules for the jurisdiction where the project is located; (2) Be in conformance with applicable environmental and historic preservation laws, regulations, and agency policy, including parts 9 and 60 of this chapter, and other applicable Federal, State, Tribal, and local laws and regulations; (3) Be technically feasible and costeffective; or, eliminate future payments from the NFIF for severe repetitive loss structures through an acquisition or relocation activity; (4) Solve a problem independently, or constitute a functional portion of a longterm solution where there is assurance that the project as a whole will be completed. This assurance will include documentation identifying the remaining funds necessary to complete the project, and the timeframe for completing the project; (5) Consider long-term changes to the areas and entities it protects, and have manageable future maintenance and modification requirements. The subrecipient is responsible for the continued maintenance needed to preserve the hazard mitigation benefits of these measures; and (6) Not duplicate benefits available from another source for the same purpose or assistance that another Federal agency or program has more primary authority to provide. § 77.7 [Removed] 10. Remove § 77.7 in its entirety. 11. Redesignate § 77.8 as § 77.7 and amend newly redesignated § 77.7 by revising paragraphs (a) through (c) to read as follows: ■ ■ § 77.7 Allowable costs. (a) General. General policies for allowable costs for implementing awards and subawards are addressed in 2 CFR 200.101, 200.102, 200.400– 200.475. (1) Eligible management costs—(i) Recipient. Recipients are eligible to receive management costs consisting of a maximum of 10 percent of the planning and project activities awarded to the recipient, each fiscal year under FMA. These costs must be included in the application to FEMA. (ii) Subrecipient. Subapplicants may include a maximum of 5 percent of the total funds requested for their subapplication for management costs to support the implementation of their planning or project activity. These costs must be included in the subapplication to the recipient. (2) Indirect costs. Indirect costs of administering the FMA program are eligible as part of the 10 percent management costs for the recipient or VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 the 5 percent management costs of the subrecipient, but in no case do they make the recipient eligible for additional management costs that exceed the caps identified in paragraph (a)(1) of this section. In addition, all costs must be in accordance with the provisions of 2 CFR parts 200 and 3002. (b) Pre-award costs. FEMA may fund eligible pre-award costs related to developing the application or subapplication at its discretion and as funds are available. Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project or planning proposal. These costs can only be incurred during the open application period for the FMA program. Costs associated with implementation of the activity but incurred prior to award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed. (c) Duplication of benefits. Grant funds may not duplicate benefits received by or available to applicants, subapplicants and project participants from insurance, other assistance programs, legal awards, or any other source to address the same purpose. Such individual or entity must notify the recipient and FEMA of all benefits that it receives or anticipates from other sources for the same purpose. FEMA will reduce the subaward by the amounts available for the same purpose from another source. * * * * * ■ 12. Redesignate § 77.9 as § 77.8 and revise the newly redesignated § 77.8 to read as follows: § 77.8 Grant administration. (a) General. Recipients must comply with the requirements contained in 2 CFR parts 200 and 3002 and FEMA award requirements, including submission of performance and financial status reports. Recipients must also ensure that subrecipients are aware of and comply with 2 CFR parts 200 and 3002. (b) Cost overruns. (1) During the implementation of an approved grant, the recipient may find that actual costs are exceeding the approved award amount. While there is no guarantee of additional funding, FEMA will only consider requests made by the recipient to pay for such overruns if: (i) Funds are available to meet the requested increase in funding; and (ii) The amended grant award meets the eligibility requirements, including cost share requirements, identified in this section. PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 53505 (2) Recipients may use cost underruns from ongoing subawards to offset overruns incurred by another subaward(s) awarded under the same award. All costs for which funding is requested must have been included in the original subapplication’s cost estimate. In cases where an underrun is not available to cover an overrun, the Administrator may, with justification from the recipient and subrecipient, use other available FMA funds to cover the cost overrun. (3) For all cost overruns that exceed the amount approved under the award, and which require additional Federal funds, the recipient must submit a written request with a recommendation, including a justification for the additional funding to the Regional Administrator for a determination. If approved, the Regional Administrator will increase the award through an amendment to the original award document. (c) Recapture. At the time of closeout, FEMA will recapture any funds provided to a State or a community under this part if the applicant has not provided the appropriate matching funds, the approved project has not been completed within the timeframes specified in the grant agreement, or the completed project does not meet the criteria specified in this part. (d) Remedies for noncompliance. FEMA may terminate an award or take other remedies for noncompliance in accordance with 2 CFR 200.338 through 200.342. (e) Reconsideration. FEMA will reconsider determinations of noncompliance, additional award conditions, or its decision to terminate a Federal award. Requests for reconsideration must be made in writing to FEMA within 60 calendar days after receipt of a notice of the action, and in accordance with submission procedures set out in guidance. FEMA will notify the requester of the disposition of the request for reconsideration. If the decision is to grant the request for reconsideration, FEMA will take appropriate implementing action. ■ 13. Add and reserve part 79. PART 80—PROPERTY ACQUISITION AND RELOCATION FOR OPEN SPACE 14. Revise the authority citation for part 80 to read as follows: ■ Authority: Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 through 5207; the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq.; Homeland Security Act of 2002, 6 U.S.C. 101. E:\FR\FM\28AUP2.SGM 28AUP2 53506 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules 15. Amend § 80.3 by revising paragraphs (a) through (m) and adding paragraphs (n) and (o) to read as follows: ■ § 80.3 Definitions. (a) Except as noted in this part, the definitions applicable to the funding program apply to implementation of this part. In addition, for purposes of this part: (b) Applicant means a State or Indian Tribal government applying to FEMA for a Federal award that will be accountable for the use of funds. Once funds have been awarded, the applicant becomes the recipient and may also be a pass-through entity. (c) Federal award means the Federal financial assistance that a recipient or subrecipient receives directly from FEMA or indirectly from a pass-through entity. The terms ‘‘award’’ and ‘‘grant’’ may also be used to describe a ‘‘Federal award’’ under this part. (d) Market Value means the price that the seller is willing to accept and a buyer is willing to pay on the open market and in an arm’s length transaction. (e) National of the United States means a person within the meaning of the term as defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22). (f) Pass-through entity means a recipient that provides a subaward to a subrecipient. (g) Purchase offer is the initial value assigned to the property, which is later adjusted by applicable additions and deductions, resulting in a final offer amount to a property owner. (h) Qualified alien means a person within the meaning of the term as defined at 8 U.S.C. 1641. (i) Qualified conservation organization means a qualified organization with a conservation purpose pursuant to 26 CFR 1.170A–14 and applicable implementing regulations, that is such an organization at the time it acquires the property interest and that was such an organization at the time of the major disaster declaration, or for at least 2 years prior to the opening of the grant application period. (j) Recipient means the State or Tribal government that receives a Federal award directly from FEMA. A recipient may also be a pass-through entity. The term recipient does not include subrecipients. (k) Subapplicant means the entity that submits an application for FEMA mitigation assistance to the State or Indian Tribal applicant/recipient. With respect to open space acquisition VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 projects under the Hazard Mitigation Grant Program (HMGP), this term has the same meaning as given to the term ‘‘applicant’’ in part 206, subpart N of this chapter. Upon grant award, the subapplicant is referred to as the subrecipient. (l) Subaward means an award provided by a pass-through entity to a subrecipient, for the subrecipient to carry out part of a Federal award received by the pass-through entity. (m) Subrecipient means the State agency, community or Indian Tribal government or other legal entity to which a subaward is awarded and which is accountable to the recipient for the use of the funds provided. (n) Administrator means the head of the Federal Emergency Management Agency, or his/her designated representative. (o) Regional Administrator means the head of a Federal Emergency Management Agency regional office, or his/her designated representative. § 80.5 [Amended] 16. Amend § 80.5 by removing the word ‘‘grantee’’ and adding in its place the word ‘‘recipient’’ in paragraphs (a)(1), (b) introductory text, (c) introductory text, (c)(1), (7) and (8); and by removing the word ‘‘subgrantee’’ and adding in its place the word ‘‘subrecipient’’ in the introductory text, paragraphs (a)(5), (b) introductory text, (b)(1) and (3), (c) introductory text, and (d). ■ 17. Amend § 80.9 by revising paragraphs (b) and (c) to read as follows: ■ § 80.9 Eligible and ineligible costs. * * * * * (b) Pre-award costs. FEMA may fund eligible pre-award project costs at its discretion and as funds are available. Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project proposal. These costs can only be incurred during the open application period of the respective grant program. Costs associated with implementation of the project but incurred prior to grant award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed. (c) Duplication of benefits. Grant funds may not duplicate benefits received by or available to applicants, subapplicants and other project participants from insurance, other assistance programs, legal awards, or any other source to address the same purpose. Such individual or entity must notify the subapplicant and FEMA of all PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 benefits that it receives, anticipates, or has available from other sources for the same purpose. FEMA will reduce the subaward by the amounts available for the same purpose from another source. * * * * * ■ 18. Amend § 80.11 by revising paragraph (a) to read as follows: § 80.11 Project eligibility. (a) Voluntary participation. Eligible acquisition projects are those where the property owner participates voluntarily, and the recipient/subrecipient will not use its eminent domain authority to acquire the property for the open space purposes should negotiations fail. * * * * * ■ 19. Amend § 80.13 by revising paragraph (a)(3) to read as follows: § 80.13 Application information. (a) * * * (3) The deed restriction language, which must be consistent with the FEMA model deed restriction that the local government will record with the property deeds. Any variation from the model deed restriction language can only be made with prior approval from FEMA’s Office of Chief Counsel; * * * * * ■ 20. Revise § 80.17 to read as follows: § 80.17 Project implementation. (a) Hazardous materials. The subrecipient must take steps to ensure it does not acquire or include in the project properties contaminated with hazardous materials by seeking information from property owners and from other sources on the use and presence of contaminants affecting the property from owners of properties that are or were industrial or commercial, or adjacent to such. A contaminated property must be certified clean prior to participation. This excludes permitted disposal of incidental demolition and household hazardous wastes. FEMA mitigation grant funds may not be used for clean up or remediation of contaminated properties. (b) Clear title. The subrecipient will obtain a title insurance policy demonstrating that fee title conveys to the subrecipient for each property to ensure that it acquires only a property with clear title. The property interest generally must transfer by a general warranty deed. Any incompatible easements or other encumbrances to the property must be extinguished before acquisition. (c) Purchase offer and supplemental payments. (1) The amount of purchase offer is the current market value of the property or the market value of the property immediately before the E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules relevant event affecting the property (‘‘pre-event’’). (i) The relevant event for Robert T. Stafford Disaster Relief and Emergency Assistance Act assistance under HMGP is the major disaster under which funds are available; for assistance under the Pre-disaster Mitigation program (PDM) (42 U.S.C. 5133), it is the most recent major disaster. Where multiple disasters have affected the same property, the recipient and subrecipient will determine which is the relevant event. (ii) The relevant event for assistance under the National Flood Insurance Act is the most recent event resulting in a National Flood Insurance Program (NFIP) claim of at least $5000. (2) The recipient should coordinate with the subrecipient in their determination of whether the valuation should be based on pre-event or current market value. Generally, the same method to determine market value should be used for all participants in the project. (3) A property owner who did not own the property at the time of the relevant event, or who is not a National of the United States or qualified alien, is not eligible for a purchase offer based on pre-event market value of the property. Subrecipients who offer preevent market value to the property owner must have already obtained certification during the application process that the property owner is either a National of the United States or a qualified alien. (4) Certain tenants who must relocate as a result of the project are entitled to relocation benefits under the Uniform Relocation Assistance and Real Property Acquisition Act (such as moving expenses, replacement housing rental payments, and relocation assistance advisory services) in accordance with 49 CFR part 24. (5) If a purchase offer for a residential property is less than the cost of the homeowner-occupant to purchase a comparable replacement dwelling outside the hazard-prone area in the same community, subrecipients for mitigation grant programs may make such a payment available in accordance with criteria determined by the Administrator. (6) The subrecipient must inform each property owner, in writing, of what it considers to be the market value of the property, the method of valuation and basis for the purchase offer, and the final offer amount. The offer will also clearly state that the property owner’s participation in the project is voluntary. (d) Removal of existing buildings. Existing incompatible facilities must be removed by demolition or by relocation VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 outside of the hazard area within 90 days of settlement of the property transaction. The FEMA Regional Administrator may grant an exception to this deadline only for a particular property based upon written justification if extenuating circumstances exist, but will specify a final date for removal. (e) Deed Restriction. The subrecipient, upon settlement of the property transaction, must record with the deed of the subject property notice of applicable land use restrictions and related procedures described in this part, consistent with FEMA model deed restriction language. ■ 21. Amend § 80.19 by revising paragraphs (a) introductory text, (a)(3), and (b) through (e) to read as follows: § 80.19 Land use and oversight. * * * * * (a) Open space requirements. The property must be dedicated and maintained in perpetuity as open space for the conservation of natural floodplain functions. * * * * * (3) Any improvements on the property must be in accordance with proper floodplain management policies and practices. Structures built on the property according to paragraph (a)(2) of this section must be floodproofed or elevated to at least the base flood level plus 1 foot of freeboard, or greater, if required by FEMA, or if required by any State or local ordinance, and in accordance with criteria established by the Administrator. * * * * * (b) Subsequent transfer. After acquiring the property interest, the subrecipient, including successors in interest, will convey any interest in the property only if the Regional Administrator, through the State, gives prior written approval of the transferee in accordance with this paragraph. (1) The request by the subrecipient, through the State, to the Regional Administrator must include a signed statement from the proposed transferee that it acknowledges and agrees to be bound by the terms of this section, and documentation of its status as a qualified conservation organization if applicable. (2) The subrecipient may convey a property interest only to a public entity or to a qualified conservation organization. However, the subrecipient may convey an easement or lease to a private individual or entity for purposes compatible with the uses described in paragraph (a) of this section, with the prior approval of the Regional PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 53507 Administrator, and so long as the conveyance does not include authority to control and enforce the terms and conditions of this section. (3) If title to the property is transferred to a public entity other than one with a conservation mission, it must be conveyed subject to a conservation easement that must be recorded with the deed and must incorporate all terms and conditions set forth in this section, including the easement holder’s responsibility to enforce the easement. This must be accomplished by one of the following means: (i) The subrecipient will convey, in accordance with this paragraph (b), a conservation easement to an entity other than the title holder, which must be recorded with the deed, or (ii) At the time of title transfer, the subrecipient will retain such conservation easement, and record it with the deed. (4) Conveyance of any property interest must reference and incorporate the original deed restrictions providing notice of the conditions in this section and must incorporate a provision for the property interest to revert to the subrecipient or recipient in the event that the transferee ceases to exist or loses its eligible status under this section. (c) Inspection. FEMA, its representatives and assigns, including the recipient will have the right to enter upon the property, at reasonable times and with reasonable notice, for the purpose of inspecting the property to ensure compliance with the terms of this part, the property conveyance and of the grant award. (d) Monitoring and reporting. Every 3 years the subrecipient (in coordination with any current successor in interest) through the recipient, must submit to the FEMA Regional Administrator a report certifying that the subrecipient has inspected the property within the month preceding the report, and that the property continues to be maintained consistent with the provisions of this part, the property conveyance and the grant award. (e) Enforcement. The subrecipient, recipient, FEMA, and their respective representatives, successors and assigns, are responsible for taking measures to bring the property back into compliance if the property is not maintained according to the terms of this part, the conveyance, and the grant award. The relative rights and responsibilities of FEMA, the recipient, the subrecipient, and subsequent holders of the property interest at the time of enforcement, include the following: E:\FR\FM\28AUP2.SGM 28AUP2 53508 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules (1) The recipient will notify the subrecipient and any current holder of the property interest in writing and advise them that they have 60 days to correct the violation. If the subrecipient or any current holder of the property interest fails to demonstrate a good faith effort to come into compliance with the terms of the grant within the 60-day period, the recipient will enforce the terms of the grant by taking any measures it deems appropriate, including but not limited to bringing an action at law or in equity in a court of competent jurisdiction. (2) FEMA, its representatives, and assignees may enforce the terms of the grant by taking any measures it deems appropriate, including but not limited to 1 or more of the following: (i) Withholding FEMA mitigation awards or assistance from the State and subrecipient; and current holder of the property interest. (ii) Requiring transfer of title. The subrecipient or the current holder of the property interest will bear the costs of bringing the property back into compliance with the terms of the grant; or (iii) Bringing an action at law or in equity in a court of competent jurisdiction against any or all of the following parties: the recipient, the subrecipient, and their respective successors. ■ 22. Amend § 80.21 by revising the introductory text and paragraph (d) to read as follows: § 80.21 Closeout requirements. Upon closeout of the grant, the subrecipient, through the recipient, must provide FEMA, with the following: * * * * * (d) Identification of each property as a repetitive loss structure, if applicable; and * * * * * PART 201—MITIGATION PLANNING 23. Revise the authority citation for part 201 to read as follows: ■ Authority: Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act of 2002, 6 U.S.C. 101. 24. Amend § 201.1 by revising paragraph (a) to read as follows: ■ § 201.1 Purpose. (a) The purpose of this part is to provide information on the policies and procedures for mitigation planning as required by the provisions of section 322 of the Stafford Act, 42 U.S.C. 5165. * * * * * ■ 25. Revise § 201.2 to read as follows: VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 § 201.2 Definitions. Administrator means the head of the Federal Emergency Management Agency, or his/her designated representative. Applicant means the entity applying to FEMA for a Federal award that will be accountable for the use of funds. Federal award means the Federal financial assistance that a recipient or subrecipient receives directly from FEMA or indirectly from a pass-through entity. The term ‘‘grant’’ or ‘‘award’’ may also be used to describe a Federal award under this part. Flood Mitigation Assistance (FMA) means the program authorized by section 1366 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4104c, and implemented at part 77. Hazard mitigation means any sustained action taken to reduce or eliminate the long-term risk to human life and property from hazards. Hazard Mitigation Grant Program (HMGP) means the program authorized under section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5170c, and implemented at part 206, subpart N of this chapter. Indian Tribal government means any Federally recognized governing body of an Indian or Alaska Native Tribe, band, nation, pueblo, village, or community that the Secretary of Interior acknowledges to exist as an Indian Tribe under the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. This does not include Alaska Native corporations, the ownership of which is vested in private individuals. Local government is any county, municipality, city, town, township, public authority, school district, special district, intrastate district, council of governments (regardless of whether the council of governments is incorporated as a nonprofit corporation under State law), regional or interstate government entity, or agency or instrumentality of a local government; any Indian Tribe or authorized Tribal organization, or Alaska Native village or organization; and any rural community, unincorporated town or village, or other public entity. Managing State means a State to which FEMA has delegated the authority to administer and manage the HMGP under the criteria established by FEMA pursuant to 42 U.S.C. 5170c(c). FEMA may also delegate authority to Tribal governments to administer and manage the HMGP as a Managing State. Pass-through entity means a recipient that provides a subaward to a PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 subrecipient to carry out part of a Federal program. Pre-Disaster Mitigation Program (PDM) means the program authorized under section 203 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5133. Regional Administrator means the head of a Federal Emergency Management Agency regional office, or his/her designated representative. Recipient means the government that receives a Federal award directly from FEMA. A recipient may also be a passthrough entity. The term recipient does not include subrecipients. The recipient is the entire legal entity even if only a particular component of the entity is designated in the grant award document. Generally, the State is the recipient. However, an Indian Tribal government may choose to be a recipient, or may act as a subrecipient under the State. An Indian Tribal government acting as recipient will assume the responsibilities of a ‘‘State’’, as described in this part, for the purposes of administering the grant. Repetitive loss structure means a structure as defined at § 77.2 of this chapter. Severe repetitive loss structure is a structure as defined at § 77.2 of this chapter. Small and impoverished communities means a community of 3,000 or fewer individuals that is identified by the State as a rural community, and is not a remote area within the corporate boundaries of a larger city; is economically disadvantaged, by having an average per capita annual income of residents not exceeding 80 percent of national, per capita income, based on best available data; the local unemployment rate exceeds by one percentage point or more, the most recently reported, average yearly national unemployment rate; and any other factors identified in the State Plan in which the community is located. The Stafford Act refers to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law 93–288, as amended (42 U.S.C. 5121– 5207). State is any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. State Hazard Mitigation Officer is the official representative of State government who is the primary point of contact with FEMA, other Federal agencies, and local governments in mitigation planning and implementation of mitigation programs E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules and activities required under the Stafford Act. Subapplicant means an entity submitting a subapplication to the applicant for a subaward to carry out part of a Federal award. Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award. Subrecipient means the entity that receives a subaward from a pass-through entity. Depending on the program, subrecipients of hazard mitigation assistance subawards can be a State agency, local government, private nonprofit organization, or Indian Tribal government. Subrecipients of FMA subawards can be a State agency, community, or Indian Tribal government, as described in 44 CFR part 77. Indian Tribal governments acting as a subrecipient are accountable to the State recipient. ■ 26. Amend § 201.3 by revising paragraphs (a), (b)(2), (c)(1), and (e)(1) to read as follows: § 201.3 Responsibilities. (a) General. This section identifies the key responsibilities of FEMA, States, and local/Tribal governments in carrying out section 322 of the Stafford Act, 42 U.S.C. 5165. (b) * * * (2) Provide technical assistance and training to State, local, and Indian Tribal governments regarding the mitigation planning process; * * * * * (c) * * * (1) Prepare and submit to FEMA a Standard State Mitigation Plan following the criteria established in § 201.4 as a condition of receiving nonemergency Stafford Act assistance and FEMA mitigation grants. In accordance with § 77.6(b) of this chapter, applicants and subapplicants for FMA project grants must have a FEMA-approved mitigation plan that addresses identified flood hazards and provides for reduction of flood losses to structures for which NFIP coverage is available. * * * * * (e) * * * (1) Prepare and submit to FEMA a Tribal Mitigation Plan following the criteria established in § 201.7 as a condition of receiving non-emergency Stafford Act assistance and FEMA mitigation grants as a recipient. This plan will also allow Indian Tribal governments to apply through the State, as a subrecipient, for any FEMA mitigation project grant. In accordance with § 77.6(b) of this chapter, applicants and subapplicants for FMA project VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 grants must have a FEMA-approved mitigation plan that addresses identified flood hazards and provides for reduction of flood losses to structures for which NFIP coverage is available. * * * * * ■ 27. Amend § 201.4 by revising paragraphs (c)(2) through (4) to read as follows: § 201.4 Standard State Mitigation Plans. * * * * * (c) * * * (2) Risk assessments that provide the factual basis for activities proposed in the strategy portion of the mitigation plan. Statewide risk assessments must characterize and analyze natural hazards and risks to provide a statewide overview. This overview will allow the State to compare potential losses throughout the State and to determine their priorities for implementing mitigation measures under the strategy, and to prioritize jurisdictions for receiving technical and financial support in developing more detailed local risk and vulnerability assessments. The risk assessment must include the following: (i) An overview of the type and location of all natural hazards that can affect the State, including information on previous occurrences of hazard events, as well as the probability of future hazard events, using maps where appropriate; (ii) An overview and analysis of the State’s vulnerability to the hazards described in this paragraph (c)(2), based on estimates provided in local risk assessments as well as the State risk assessment. The State must describe vulnerability in terms of the jurisdictions most threatened by the identified hazards, and most vulnerable to damage and loss associated with hazard events. State owned or operated critical facilities located in the identified hazard areas must also be addressed; (iii) An overview and analysis of potential losses to the identified vulnerable structures, based on estimates provided in local risk assessments as well as the State risk assessment. The State must estimate the potential dollar losses to State owned or operated buildings, infrastructure, and critical facilities located in the identified hazard areas. (3) A Mitigation Strategy that provides the State’s blueprint for reducing the losses identified in the risk assessment. This section must include: (i) A description of State goals to guide the selection of activities to mitigate and reduce potential losses. PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 53509 (ii) A discussion of the State’s preand post-disaster hazard management policies, programs, and capabilities to mitigate the hazards in the area, including: An evaluation of State laws, regulations, policies, and programs related to hazard mitigation as well as to development in hazard-prone areas; a discussion of State funding capabilities for hazard mitigation projects; and a general description and analysis of the effectiveness of local mitigation policies, programs, and capabilities. (iii) An identification, evaluation, and prioritization of cost-effective, environmentally sound, and technically feasible mitigation actions and activities the State is considering and an explanation of how each activity contributes to the overall mitigation strategy. This section should be linked to local plans, where specific local actions and projects are identified. (iv) Identification of current and potential sources of Federal, State, local, or private funding to implement mitigation activities. (v) In accordance with § 77.6(b) of this chapter, applicants and subapplicants for FMA project grants must have a FEMA-approved mitigation plan that addresses identified flood hazards and provides for reduction of flood losses to structures for which NFIP coverage is available. (4) A section on the Coordination of Local Mitigation Planning that includes the following: (i) A description of the State process to support, through funding and technical assistance, the development of local mitigation plans. (ii) A description of the State process and timeframe by which the local plans will be reviewed, coordinated, and linked to the State Mitigation Plan. (iii) Criteria for prioritizing communities and local jurisdictions that would receive planning and project grants under available funding programs, which should include consideration for communities with the highest risks, repetitive loss structures, and most intense development pressures. Further, that for nonplanning grants, a principal criterion for prioritizing grants will be the extent to which benefits are maximized according to a cost benefit review of proposed projects and their associated costs. * * * * * ■ 28. Amend § 201.6 by revising paragraphs (a) through (c) to read as follows: § 201.6 Local Mitigation Plans. * * * * * (a) Plan requirements. (1) A local government must have a mitigation plan E:\FR\FM\28AUP2.SGM 28AUP2 53510 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules approved pursuant to this section in order to receive HMGP project grants. A local government must have a mitigation plan approved pursuant to this section in order to apply for and receive mitigation project grants under all other mitigation grant programs. (2) Plans prepared for the FMA program, described at part 77 of this chapter, need only address these requirements as they relate to flood hazards in order to be eligible for FMA project grants. However, these plans must be clearly identified as being flood mitigation plans, and they will not meet the eligibility criteria for other mitigation grant programs, unless flooding is the only natural hazard the jurisdiction faces. (3) Regional Administrators may grant an exception to the plan requirement in extraordinary circumstances, such as in a small and impoverished community, when justification is provided. In these cases, a plan will be completed within 12 months of the award of the project grant. If a plan is not provided within this timeframe, the project grant will be terminated, and any costs incurred after notice of grant’s termination will not be reimbursed by FEMA. (4) Multi-jurisdictional plans (e.g. watershed plans) may be accepted, as appropriate, as long as each jurisdiction has participated in the process and has officially adopted the plan. State-wide plans will not be accepted as multijurisdictional plans. (b) Planning process. An open public involvement process is essential to the development of an effective plan. In order to develop a more comprehensive approach to reducing the effects of natural disasters, the planning process must include: (1) An opportunity for the public to comment on the plan during the drafting stage and prior to plan approval; (2) An opportunity for neighboring communities, local and regional agencies involved in hazard mitigation activities, and agencies that have the authority to regulate development, as well as businesses, academia and other private and nonprofit interests to be involved in the planning process; and (3) Review and incorporation, if appropriate, of existing plans, studies, reports, and technical information. (c) Plan content. The plan must include the following: (1) Documentation of the planning process used to develop the plan, including how it was prepared, who was involved in the process, and how the public was involved. (2) A risk assessment that provides the factual basis for activities proposed VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 in the strategy to reduce losses from identified hazards. Local risk assessments must provide sufficient information to enable the jurisdiction to identify and prioritize appropriate mitigation actions to reduce losses from identified hazards. The risk assessment must include: (i) A description of the type, location, and extent of all natural hazards that can affect the jurisdiction. The plan must include information on previous occurrences of hazard events and on the probability of future hazard events. (ii) A description of the jurisdiction’s vulnerability to the hazards described in paragraph (c)(2)(i) of this section. This description must include an overall summary of each hazard and its impact on the community. All plans approved after October 1, 2008 must also address NFIP insured structures that have been repetitively damaged by floods. The plan should describe vulnerability in terms of: (A) The types and numbers of existing and future buildings, infrastructure, and critical facilities located in the identified hazard areas; (B) An estimate of the potential dollar losses to vulnerable structures identified in paragraph (c)(2)(ii)(A) of this section and a description of the methodology used to prepare the estimate; (C) Providing a general description of land uses and development trends within the community so that mitigation options can be considered in future land use decisions. (iii) For multi-jurisdictional plans, the risk assessment section must assess each jurisdiction’s risks where they vary from the risks facing the entire planning area. (3) A mitigation strategy that provides the jurisdiction’s blueprint for reducing the potential losses identified in the risk assessment, based on existing authorities, policies, programs and resources, and its ability to expand on and improve these existing tools. This section must include: (i) A description of mitigation goals to reduce or avoid long-term vulnerabilities to the identified hazards. (ii) A section that identifies and analyzes a comprehensive range of specific mitigation actions and projects being considered to reduce the effects of each hazard, with particular emphasis on new and existing buildings and infrastructure. All plans approved by FEMA after October 1, 2008, must also address the jurisdiction’s participation in the NFIP, and continued compliance with NFIP requirements, as appropriate. (iii) An action plan describing how the actions identified in paragraph (c)(3)(ii) of this section will be prioritized, implemented, and PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 administered by the local jurisdiction. Prioritization will include a special emphasis on the extent to which benefits are maximized according to a cost benefit review of the proposed projects and their associated costs. (iv) For multi-jurisdictional plans, there must be identifiable action items specific to the jurisdiction requesting FEMA approval or credit of the plan. (4) A plan maintenance process that includes: (i) A section describing the method and schedule of monitoring, evaluating, and updating the mitigation plan within a five-year cycle. (ii) A process by which local governments incorporate the requirements of the mitigation plan into other planning mechanisms such as comprehensive or capital improvement plans, when appropriate. (iii) Discussion on how the community will continue public participation in the plan maintenance process. (5) Documentation that the plan has been formally adopted by the governing body of the jurisdiction requesting approval of the plan (e.g., City Council, County Commissioner, Tribal Council). For multi-jurisdictional plans, each jurisdiction requesting approval of the plan must document that it has been formally adopted. * * * * * ■ 29. Amend § 201.7 by revising paragraphs (a), (c), and (d) to read as follows: § 201.7 Tribal Mitigation Plans. * * * * * (a) Plan requirement. (1) Indian Tribal governments applying to FEMA as a recipient must have an approved Tribal Mitigation Plan meeting the requirements of this section as a condition of receiving non-emergency Stafford Act assistance and FEMA mitigation grants. Emergency assistance provided under 42 U.S.C. 5170a, 5170b, 5173, 5174, 5177, 5179, 5180, 5182, 5183, 5184, 5192 will not be affected. Mitigation planning grants provided through the PDM program, authorized under section 203 of the Stafford Act, 42 U.S.C. 5133, will also continue to be available. (2) Indian Tribal governments applying through the State as a subrecipient must have an approved Tribal Mitigation Plan meeting the requirements of this section in order to receive HMGP project grants. A Tribe must have an approved Tribal Mitigation Plan in order to apply for and receive FEMA mitigation project grants under all other mitigation grant programs. The provisions in E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules § 201.6(a)(3) are available to Tribes applying as subrecipients. (3) Multi-jurisdictional plans (e.g. county-wide or watershed plans) may be accepted, as appropriate, as long as the Indian Tribal government has participated in the process and has officially adopted the plan. Indian Tribal governments must address all the elements identified in this section to ensure eligibility as a recipient or as a subrecipient. * * * * * (c) Plan content. The plan must include the following: (1) Documentation of the planning process used to develop the plan, including how it was prepared, who was involved in the process, and how the public was involved. This must include: (i) An opportunity for the public to comment on the plan during the drafting stage and prior to plan approval, including a description of how the Indian Tribal government defined ‘‘public;’’ (ii) As appropriate, an opportunity for neighboring communities, Tribal and regional agencies involved in hazard mitigation activities, and agencies that have the authority to regulate development, as well as businesses, academia, and other private and nonprofit interests to be involved in the planning process; (iii) Review and incorporation, if appropriate, of existing plans, studies, and reports; and (iv) Be integrated to the extent possible with other ongoing Tribal planning efforts as well as other FEMA programs and initiatives. (2) A risk assessment that provides the factual basis for activities proposed in the strategy to reduce losses from identified hazards. Tribal risk assessments must provide sufficient information to enable the Indian Tribal government to identify and prioritize appropriate mitigation actions to reduce losses from identified hazards. The risk assessment must include: (i) A description of the type, location, and extent of all natural hazards that can affect the Tribal planning area. The plan must include information on previous occurrences of hazard events and on the probability of future hazard events. (ii) A description of the Indian Tribal government’s vulnerability to the hazards described in paragraph (c)(2)(i) of this section. This description must include an overall summary of each hazard and its impact on the Tribe. The plan should describe vulnerability in terms of: VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 (A) The types and numbers of existing and future buildings, infrastructure, and critical facilities located in the identified hazard areas; (B) An estimate of the potential dollar losses to vulnerable structures identified in paragraph (c)(2)(ii)(A) of this section and a description of the methodology used to prepare the estimate; (C) A general description of land uses and development trends within the Tribal planning area so that mitigation options can be considered in future land use decisions; and (D) Cultural and sacred sites that are significant, even if they cannot be valued in monetary terms. (3) A mitigation strategy that provides the Indian Tribal government’s blueprint for reducing the potential losses identified in the risk assessment, based on existing authorities, policies, programs and resources, and its ability to expand on and improve these existing tools. This section must include: (i) A description of mitigation goals to reduce or avoid long-term vulnerabilities to the identified hazards. (ii) A section that identifies and analyzes a comprehensive range of specific mitigation actions and projects being considered to reduce the effects of each hazard, with particular emphasis on new and existing buildings and infrastructure. (iii) An action plan describing how the actions identified in paragraph (c)(3)(ii) of this section will be prioritized, implemented, and administered by the Indian Tribal government. (iv) A discussion of the Indian Tribal government’s pre- and post-disaster hazard management policies, programs, and capabilities to mitigate the hazards in the area, including: An evaluation of Tribal laws, regulations, policies, and programs related to hazard mitigation as well as to development in hazard-prone areas; and a discussion of Tribal funding capabilities for hazard mitigation projects. (v) Identification of current and potential sources of Federal, Tribal, or private funding to implement mitigation activities. (vi) In accordance with § 77.6(b) of this chapter, applicants and subapplicants for FMA project grants must have a FEMA-approved mitigation plan that addresses identified flood hazards and provides for reduction of flood losses to structures for which NFIP coverage is available. (4) A plan maintenance process that includes: (i) A section describing the method and schedule of monitoring, evaluating, and updating the mitigation plan. PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 53511 (ii) A system for monitoring implementation of mitigation measures and project closeouts. (iii) A process by which the Indian Tribal government incorporates the requirements of the mitigation plan into other planning mechanisms such as reservation master plans or capital improvement plans, when appropriate. (iv) Discussion on how the Indian Tribal government will continue public participation in the plan maintenance process. (v) A system for reviewing progress on achieving goals as well as activities and projects identified in the mitigation strategy. (5) The plan must be formally adopted by the governing body of the Indian Tribal government prior to submittal to FEMA for final review and approval. (6) The plan must include assurances that the Indian Tribal government will comply with all applicable Federal statutes and regulations in effect with respect to the periods for which it receives grant funding, including 2 CFR parts 200 and 3002. The Indian Tribal government will amend its plan whenever necessary to reflect changes in Tribal or Federal laws and statutes. (d) Plan review and updates. (1) Plans must be submitted to the appropriate FEMA Regional Office for formal review and approval. Indian Tribal governments who would like the option of being a subrecipient under the State must also submit their plan to the State Hazard Mitigation Officer for review and coordination. (2) The Regional review will be completed within 45 days after receipt from the Indian Tribal government, whenever possible. (3) Indian Tribal governments must review and revise their plan to reflect changes in development, progress in local mitigation efforts, and changes in priorities, and resubmit it for approval within 5 years in order to continue to be eligible for non-emergency Stafford Act assistance and FEMA mitigation grant funding. PART 206—FEDERAL DISASTER ASSISTANCE 30. The authority citation for part 206 is revised to read as follows: ■ Authority: Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act of 2002, 6 U.S.C. 101 et seq.; Department of Homeland Security Delegation 9001.1; sec. 1105, Pub. L. 113–2, 127 Stat. 43 (42 U.S.C. 5189a note). 31. Revise § 206.431 to read as follows: ■ E:\FR\FM\28AUP2.SGM 28AUP2 53512 § 206.431 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules Definitions. Activity means any mitigation measure, project, or action proposed to reduce risk of future damage, hardship, loss or suffering from disasters. Applicant means the non-Federal entity consisting of a State or Indian Tribal government, applying to FEMA for a Federal award under the Hazard Mitigation Grant Program. Upon award, the applicant becomes the recipient and may also be a pass-through entity. Enhanced State Mitigation Plan is the hazard mitigation plan approved under 44 CFR part 201 as a condition of receiving increased funding under the HMGP. Grant application means the request to FEMA for HMGP funding, as outlined in § 206.436, by a State or Tribal government that will act as recipient. Grant award means total of Federal and non-Federal contributions to complete the approved scope of work. Indian Tribal government means any Federally recognized governing body of an Indian or Alaska Native Tribe, band, nation, pueblo, village, or community that the Secretary of Interior acknowledges to exist as an Indian Tribe under the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. This does not include Alaska Native corporations, the ownership of which is vested in private individuals. Indian Tribal governments have the option to apply as an applicant or subapplicant. Local Mitigation Plan is the hazard mitigation plan required of a local government acting as a subrecipient as a condition of receiving a project subaward under the HMGP as outlined in 44 CFR 201.6. Pass-through entity means a recipient that provides a subaward to a subrecipient. Recipient means the State or Indian Tribal government that receives a Federal award directly from FEMA. A recipient may also be a pass-through entity. The term recipient does not include subrecipients. The recipient is the entire legal entity even if only a particular component of the entity is designated in the grant award document. Generally, the State is the recipient. However, an Indian Tribal government may choose to be a recipient, or may act as a subrecipient under the State. An Indian Tribal government acting as recipient will assume the responsibilities of a ‘‘State’’, as described in this part, for the purposes of administering the grant. Standard State Mitigation Plan is the hazard mitigation plan approved under 44 CFR part 201, as a condition of receiving Stafford Act assistance as outlined in § 201.4 of this chapter. VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 State Administrative Plan for the Hazard Mitigation Grant Program means the plan developed by the State to describe the procedures for administration of the HMGP. Subapplicant means the State agency, local government, eligible private nonprofit organization, or Indian Tribal government submitting a subapplication to the applicant for financial assistance under HMGP. Upon award, the subapplicant becomes the subrecipient. Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award. Subaward application means the request to the recipient for HMGP funding by the eligible subrecipient, as outlined in § 206.436. Subrecipient means the government or other legal entity to which a subaward is awarded and which is accountable to the recipient for the use of the funds provided. Subrecipients can be a State agency, local government, private nonprofit organization, or Indian Tribal government as outlined in § 206.433. Indian Tribal governments acting as a subrecipient are accountable to the State recipient. Tribal Mitigation Plan is the hazard mitigation plan required of an Indian Tribal government acting as a recipient or subrecipient as a condition of receiving a project award or subaward under the HMGP as outlined in 44 CFR 201.7. ■ 32. Amend § 206.432 by revising paragraphs (b) introductory text, (b)(2) and (3), and (c) to read as follows: § 206.432 Federal grant assistance. * * * * * (b) Amounts of assistance. The total Federal contribution of funds is based on the estimated aggregate grant amount to be made under the Stafford Act for the major disaster (less associated administrative costs), and must be as follows: * * * * * (2) Twenty (20) percent. A State with an approved Enhanced State Mitigation Plan, in effect before the disaster declaration, which meets the requirements outlined in § 201.5 of this subchapter will be eligible for assistance under the HMGP not to exceed 20 percent of such amounts, for amounts not more than $35.333 billion. (3) The estimates of Federal assistance under this paragraph (b) will be based on the Regional Administrator’s estimate of all eligible costs, actual grants, and appropriate mission assignments. (c) Cost sharing. All mitigation measures approved under the State’s PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 grant will be subject to the cost sharing provisions established in the FEMAState Agreement. FEMA may contribute up to 75 percent of the cost of measures approved for funding under the Hazard Mitigation Grant Program for major disasters declared on or after June 10, 1993. The non-Federal share may exceed the Federal share. FEMA will not contribute to costs above the Federally approved estimate. ■ 33. Amend § 206.433 by revising paragraph (a) to read as follows: § 206.433 State responsibilities. (a) Recipient. The State will be the recipient to which funds are awarded and will be accountable for the use of those funds. There may be subrecipients within the State government. * * * * * ■ 34. Amend § 206.434 by revising paragraphs (a), (b), (c)(1) and (5), (d)(1), and (e) to read as follows: § 206.434 Eligibility. (a) Eligible entities. The following are eligible to apply for the Hazard Mitigation Program Grant: (1) Applicants—States and Indian Tribal governments; (2) Subapplicants—(i) State agencies and local governments; (ii) Private nonprofit organizations that own or operate a private nonprofit facility as defined in § 206.221(e). A qualified conservation organization as defined at § 80.3(h) of this chapter is the only private nonprofit organization eligible to apply for acquisition or relocation for open space projects; (iii) Indian Tribal governments. (b) Plan requirement. (1) Local and Indian Tribal government applicants for project subawards must have an approved local or Tribal Mitigation Plan in accordance with 44 CFR part 201 before receipt of HMGP subaward funding for projects. (2) Regional Administrators may grant an exception to this requirement in extraordinary circumstances, such as in a small and impoverished community when justification is provided. In these cases, a plan will be completed within 12 months of the award of the project subaward. If a plan is not provided within this timeframe, the project subaward will be terminated, and any costs incurred after notice of subaward’s termination will not be reimbursed by FEMA. (c) * * * (1) Be in conformance with the State Mitigation Plan and Local or Tribal Mitigation Plan approved under 44 CFR part 201; or for Indian Tribal governments acting as recipients, be in E:\FR\FM\28AUP2.SGM 28AUP2 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules conformance with the Tribal Mitigation Plan approved under 44 CFR 201.7; * * * * * (5) Be cost-effective and substantially reduce the risk of future damage, hardship, loss, or suffering resulting from a major disaster. The recipient must demonstrate this by documenting that the project; (i) Addresses a problem that has been repetitive, or a problem that poses a significant risk to public health and safety if left unsolved, (ii) Will not cost more than the anticipated value of the reduction in both direct damages and subsequent negative impacts to the area if future disasters were to occur, (iii) Has been determined to be the most practical, effective, and environmentally sound alternative after consideration of a range of options, (iv) Contributes, to the extent practicable, to a long-term solution to the problem it is intended to address, (v) Considers long-term changes to the areas and entities it protects, and has manageable future maintenance and modification requirements. (d) Eligible activities—(1) Planning. Up to 7% of the State’s HMGP award may be used to develop State, Tribal and/or local mitigation plans to meet the planning criteria outlined in 44 CFR part 201. * * * * * (e) Property acquisitions and relocation requirements. Property acquisitions and relocation projects for open space proposed for funding pursuant to a major disaster declared on or after December 3, 2007 must be implemented in accordance with part 80 of this chapter. * * * * * § 206.435 [Amended] 35. Amend § 206.435 by removing the word ‘‘shall’’ and adding in its place the word ‘‘will’’ in the last sentence of paragraph (a). ■ 36. Amend § 206.436 by revising paragraphs (a), (b), (c) introductory text, (c)(1), (e), and (g) to read as follows: ■ § 206.436 Application procedures. (a) General. This section describes the procedures to be used by the recipient in submitting an application for HMGP funding. Under the HMGP, the State or Indian Tribal government is the recipient and is responsible for processing subawards to applicants in accordance with 2 CFR parts 200 and 3002. Subrecipients are accountable to the recipient. (b) Governor’s Authorized Representative. The Governor’s VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 Authorized Representative serves as the grant administrator for all funds provided under the Hazard Mitigation Grant Program. The Governor’s Authorized Representative’s responsibilities as they pertain to procedures outlined in this section include providing technical advice and assistance to eligible subrecipients, and ensuring that all potential applicants are aware of assistance available and submission of those documents necessary for grant award. (c) Hazard mitigation application. Upon identification of mitigation measures, the State (Governor’s Authorized Representative) will submit its Hazard Mitigation Grant Program application to the FEMA Regional Administrator. The application will identify one or more mitigation measures for which funding is requested. The application must include a Standard Form (SF) 424, Application for Federal Assistance, SF 424D, Assurances for Construction Programs, if appropriate, and a narrative statement. The narrative statement will contain any pertinent project management information not included in the State’s administrative plan for Hazard Mitigation. The narrative statement will also serve to identify the specific mitigation measures for which funding is requested. Information required for each mitigation measure must include the following: (1) Name of the subrecipient, if any; * * * * * (e) Extensions. The State may request the Regional Administrator to extend the application time limit by 30 to 90 day increments, not to exceed a total of 180 days. The recipient must include a justification in its request. * * * * * (g) Indian Tribal recipients. Indian Tribal governments may submit a SF 424 directly to the Regional Administrator. ■ 37. Amend § 206.437 by revising paragraphs (a), (b)(4)(i), (x), and (xiii), and (d) to read as follows: § 206.437 State administrative plan. (a) General. The State must develop a plan for the administration of the Hazard Mitigation Grant Program. (b) * * * (4) * * * (i) Identify and notify potential applicants (subrecipients) of the availability of the program; * * * * * (x) Provide technical assistance as required to subrecipient(s); * * * * * (xiii) Determine the percentage or amount of pass-through funds for PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 53513 management costs provided under 44 CFR part 207 that the recipient will make available to subrecipients, and the basis, criteria, or formula for determining the subrecipient percentage or amount. * * * * * (d) Approval. The State must submit the administrative plan to the Regional Administrator for approval. Following each major disaster declaration, the State must prepare any updates, amendments, or plan revisions required to meet current policy guidance or changes in the administration of the Hazard Mitigation Grant Program. Funds will not be awarded until the State Administrative Plan is approved by the FEMA Regional Administrator. ■ 38. Revise § 206.438 to read as follows: § 206.438 Project management. (a) General. The State serving as recipient has primary responsibility for project management and accountability of funds as indicated in 2 CFR parts 200 and 3002 and 44 CFR part 206. The State is responsible for ensuring that subrecipients meet all program and administrative requirements. (b) Cost overruns. During the execution of work on an approved mitigation measure the Governor’s Authorized Representative may find that actual project costs are exceeding the approved estimates. Cost overruns which can be met without additional Federal funds, or which can be met by offsetting cost underruns on other projects, need not be submitted to the Regional Administrator for approval, so long as the full scope of work on all affected projects can still be met. For cost overruns which exceed Federal obligated funds and which require additional Federal funds, the Governor’s Authorized Representative will evaluate each cost overrun and submit a request with a recommendation to the Regional Administrator for a determination. The applicant’s justification for additional costs and other pertinent material must accompany the request. The Regional Administrator will notify the Governor’s Authorized Representative in writing of the determination and process a supplement, if necessary. All requests that are not justified must be denied by the Governor’s Authorized Representative. In no case will the total amount obligated to the State exceed the funding limits set forth in § 206.432(b). Any such problems or circumstances affecting project costs must be identified through the quarterly progress reports required in paragraph (c) of this section. (c) Progress reports. The recipient must submit a quarterly progress report E:\FR\FM\28AUP2.SGM 28AUP2 53514 Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / Proposed Rules to FEMA indicating the status and completion date for each measure funded. Any problems or circumstances affecting completion dates, scope of work, or project costs which are expected to result in noncompliance with the approved grant conditions must be described in the report. (d) Payment of claims. The Governor’s Authorized Representative will make a claim to the Regional Administrator for reimbursement of allowable costs for each approved measure. In submitting such claims the Governor’s Authorized Representative must certify that reported costs were incurred in the performance of eligible work, that the approved work was completed and that the mitigation measure is in compliance with the provisions of the FEMA-State Agreement. The Regional Administrator will determine the eligible amount of reimbursement for each claim and approve payment. If a mitigation measure is not completed, and there is not adequate justification for noncompletion, no Federal funding will be provided for that measure. (e) Audit requirements. Uniform audit requirements as set forth in 2 CFR parts 200 and 3002 and 44 CFR part 206 apply to all grant assistance provided under this subpart. FEMA may elect to conduct a Federal audit on the disaster assistance award or on any of the subawards. § 206.439 [Amended] 39. Amend § 206.439 by revising the second sentence of paragraph (c) to read as follows: ■ § 206.439 Allowable costs. * * * * * (c) * * * Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities VerDate Sep<11>2014 17:57 Aug 27, 2020 Jkt 250001 directly related to the development of the project or planning proposal. * * * ■ 40. Amend § 206.440 by revising the introductory text and paragraphs (a), (b) heading, (c) heading, (c)(2) and (3), (d), and (e)(3) to read as follows: § 206.440 Appeals. An eligible applicant, subrecipient, or recipient may appeal any determination previously made related to an application for or the provision of Federal assistance according to the procedures in this section. (a) Format and content. The applicant or recipient will make the appeal in writing through the recipient to the Regional Administrator. The recipientwill review and evaluate all subrecipient appeals before submission to the Regional Administrator. The recipient may make recipient-related appeals to the Regional Administrator. The appeal must contain documented justification supporting the appellant’s position, specifying the monetary figure in dispute and the provisions in Federal law, regulation, or policy with which the appellant believes the initial action was inconsistent. * * * * * (b) Levels of appeal. * * * * * (c) Time limits. * * * * * (2) The recipient will review and forward appeals from an applicant or subrecipient, with a written recommendation, to the Regional Administrator within 60 days of receipt. (3) Within 90 days following receipt of an appeal, the Regional Administrator (for first appeals) or Assistant Administrator for the Mitigation Directorate (for second appeals) will notify the recipient in writing of the PO 00000 Frm 00042 Fmt 4701 Sfmt 9990 disposition of the appeal or of the need for additional information. A request by the Regional Administrator or Assistant Administrator for the Mitigation Directorate for additional information will include a date by which the information must be provided. Within 90 days following the receipt of the requested additional information or following expiration of the period for providing the information, the Regional Administrator or Assistant Administrator for the Mitigation Directorate will notify the recipient in writing of the disposition of the appeal. If the decision is to grant the appeal, the Regional Administrator will take appropriate implementing action. (d) Technical advice. In appeals involving highly technical issues, the Regional Administrator or Assistant Administrator for the Mitigation Directorate may, at his or her discretion, submit the appeal to an independent scientific or technical person or group having expertise in the subject matter of the appeal for advice or recommendation. The period for this technical review may be in addition to other allotted time periods. Within 90 days of receipt of the report, the Regional Administrator or Assistant Administrator for the Mitigation Directorate will notify the recipient in writing of the disposition of the appeal. (e) * * * (3) The decision of the FEMA official at the next higher appeal level will be the final administrative decision of FEMA. Pete Gaynor, Administrator, Federal Emergency Management Agency. [FR Doc. 2020–16004 Filed 8–27–20; 8:45 am] BILLING CODE 9110–11–P E:\FR\FM\28AUP2.SGM 28AUP2

Agencies

[Federal Register Volume 85, Number 168 (Friday, August 28, 2020)]
[Proposed Rules]
[Pages 53474-53514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16004]



[[Page 53473]]

Vol. 85

Friday,

No. 168

August 28, 2020

Part III





Department of Homeland Security





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Federal Emergency Management Agency





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44 CFR Parts 77, 78, 79, et al.





FEMA's Hazard Mitigation Assistance and Planning Regulations; Proposed 
Rule

Federal Register / Vol. 85, No. 168 / Friday, August 28, 2020 / 
Proposed Rules

[[Page 53474]]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Parts 77, 78, 79, 80, 201, and 206

[Docket ID: FEMA-2019-0011]
RIN 1660-AA96


FEMA's Hazard Mitigation Assistance and Planning Regulations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Emergency Management Agency (FEMA) proposes to 
amend its Hazard Mitigation Assistance (HMA) program regulations to 
reflect current statutory authority and agency practice. FEMA's HMA 
program regulations consist of the Flood Mitigation Assistance (FMA) 
grant program, the Hazard Mitigation Grant Program (HMGP), financial 
assistance for property acquisition and relocation of open space, and 
mitigation planning program regulations. FEMA proposes to revise the 
FMA grant program regulations to incorporate changes made by amendments 
to the National Flood Insurance Act of 1968 (NFIA). Finally, FEMA 
proposes to update terms and definitions throughout the HMA and 
Mitigation Planning program regulations to better align with uniform 
administrative requirements that apply to all Federal assistance.

DATES: Comments are due on or before October 27, 2020.

ADDRESSES: You may submit comments, identified by Docket ID: FEMA-2019-
0011, by one of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail/Hand Delivery/Courier: Regulatory Affairs Division, Office of 
Chief Counsel, Federal Emergency Management Agency, Room 8NE, 500 C 
Street, SW, Washington, DC 20472-3100.
    To avoid duplication, please use only one of these methods. All 
comments received will be posted without change to https://www.regulations.gov, including any personal information provided. For 
instructions on submitting comments, see the Public Participation 
portion of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Katherine Fox, Assistant Administrator 
for Mitigation, Federal Emergency Management Agency, 202-646-1046, 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Public Participation

    We encourage you to participate in this rulemaking by submitting 
comments and related materials. We will consider all comments and 
material received during the comment period.
    If you submit a comment, identify the agency name and the docket ID 
for this rulemaking, indicate the specific section of this document to 
which each comment applies, and give the reason for each comment. You 
may submit your comments and material by electronic means, mail, or 
delivery to the address under the ADDRESSES section. Please submit your 
comments and material by only one means.
    Regardless of the method used for submitting comments or material, 
all submissions will be posted, without change, to the Federal e-
Rulemaking Portal at https://www.regulations.gov, and will include any 
personal information you provide. Therefore, submitting this 
information makes it public. You may wish to read the Privacy and 
Security Notice that is available via a link on the homepage of https://www.regulations.gov.
    Viewing comments and documents: For access to the docket to read 
background documents or comments received, go to the Federal e-
Rulemaking Portal at https://www.regulations.gov. Background documents 
and submitted comments may also be inspected at FEMA, Office of Chief 
Counsel, Room 8NE, 500 C Street SW, Washington, DC 20472-3100.
    Public Meeting: We do not plan to hold a public meeting, but you 
may submit a request for one at the address under the ADDRESSES section 
explaining why one would be beneficial. If FEMA determines that a 
public meeting would aid this rulemaking, it will hold one at a time 
and place announced by a notice in the Federal Register.

II. Background

A. Overview of Hazard Mitigation Assistance Programs

    FEMA's Hazard Mitigation Assistance (HMA) grant programs provide 
funding for eligible mitigation activities that reduce disaster losses 
and protect life and property from future disaster damages. FEMA 
currently administers three hazard mitigation assistance programs under 
the HMA umbrella: (1) The Flood Mitigation Assistance (FMA) program (a 
grant program, described in 44 CFR parts 78 and 79); (2) the Hazard 
Mitigation Grant Program (HMGP) (44 CFR part 206, subpart N); and (3) 
the Pre-Disaster Mitigation (PDM) program (implemented via guidance and 
the annual grants process without corresponding regulations). 
Mitigation planning requirements (44 CFR part 201) and requirements for 
property acquisition and relocation for open space (44 CFR part 80) 
apply to all three HMA programs. The Hazard Mitigation Assistance 
Guidance (hereinafter ``HMA Guidance'') provides comprehensive guidance 
for all three HMA programs and supplements the FMA program and HMGP 
program regulations.\1\
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    \1\ Federal Emergency Management Agency, Hazard Mitigation 
Assistance Guidance (hereinafter ``HMA Guidance''), Feb. 27, 2015, 
available at https://www.fema.gov/media-library-data/1424983165449-38f5dfc69c0bd4ea8a161e8bb7b79553/HMA_Guidance_022715_508.pdf (last 
accessed Feb. 13, 2020). As noted in this preamble, the PDM program 
does not have implementing regulations, but rather is implemented 
through the annual grants process, including the Notice of Funding 
Opportunity, and other policy and guidance statements, including the 
HMA Guidance.
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    The majority of the revisions FEMA proposes in this rulemaking 
apply to the FMA regulations. FEMA proposes a few changes to the HMGP 
regulations as well. Below, FEMA provides a general description of the 
FMA and HMGP programs, and then a more detailed discussion of how FEMA 
administers the FMA program.
1. Flood Mitigation Assistance Program (FMA)
    Section 1366 of the National Flood Insurance Act of 1968 (NFIA), 42 
U.S.C. 4104c, as amended, authorized the FMA program to reduce or 
eliminate claims under the National Flood Insurance Program (NFIP). The 
FMA program provides funds on an annual basis for projects to reduce or 
eliminate risk of flood damage to buildings, manufactured homes, and 
other structures insured under the NFIP. See 42 U.S.C. 4104c(a); 44 CFR 
79.1(c). Currently, 44 CFR parts 78 and 79 prescribe actions, 
procedures, and requirements for the administration of the FMA program. 
The requirements in part 78 applied only to those FMA grants for which 
the application period opened prior to December 3, 2007. See 44 CFR 
78.1(a). The requirements in part 79 apply to all FMA funds awarded on 
or after December 3, 2007. See 44 CFR 79.1(a).
    In accordance with 44 CFR part 201, ``Mitigation Planning,'' all 
State and Tribal applicants must have a FEMA-approved State or Tribal 
mitigation plan as a condition of receiving any FEMA mitigation grant, 
including FMA grants. See 44 CFR 201.4(a), 201.7(a)(1). Subapplicants 
consisting of local governments and Tribal governments

[[Page 53475]]

must have a FEMA-approved mitigation plan in order apply for and 
receive mitigation project grants under FMA and PDM. See 44 CFR 
201.6(a), 201.7(a)(3).
2. Hazard Mitigation Grant Program (HMGP)
    Section 404 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (Stafford Act), 42 U.S.C. 5170c, authorized HMGP. 
Implementing regulations for HMGP are found at 44 CFR part 206, subpart 
N. The key purpose of HMGP is to substantially reduce the risk of 
future damage, hardship, loss, or suffering in any area affected by a 
major disaster. See 42 U.S.C. 5170c(a). HMGP funding is available, when 
authorized under a Presidential major disaster declaration,\2\ in the 
areas requested by the Governor or chief executive of the Tribe. See 
id.; HMA Guidance Part 1.B(1), p. 4. State agencies, local governments, 
private nonprofit organizations, and Indian Tribal governments are 
eligible to apply for HMGP assistance.\3\ The level of HMGP funding 
available for a given disaster is based on a percentage of the 
estimated total Federal assistance available under the Stafford Act, 
excluding administrative costs, for each Presidential major disaster 
declaration. See 44 CFR 206.432(b). States and Indian Tribal 
governments applying for HMGP funding must have a FEMA-approved State 
or Tribal mitigation plan at the time of the Presidential major 
disaster declaration and at the time FEMA obligates HMGP funding. See 
42 U.S.C. 5165; 44 CFR 201.4. Subapplicants, including local 
governments and Indian Tribal governments, must have a FEMA-approved 
mitigation plan in order to receive HMGP subawards. See 42 U.S.C. 
5165(a), (b); 44 CFR 201.6(a), 201.7(a), 206.434(b).
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    \2\ Note that there is an exception to the requirement that 
there be a Presidential major disaster declaration to receive HMGP 
funding. This exception is HMGP Post Fire, which provides mitigation 
assistance under HMGP generally for wildfire. It is triggered not by 
a Presidential major disaster declaration, but by a Fire Management 
Assistance Grant declaration under section 420 of the Stafford Act. 
See 42 U.S.C. 5170c(a).
    \3\ 44 CFR 206.434(a). Eligible subapplicants apply to the 
recipient (also known as the ``grantee'') for HMGP subawards. The 
recipient may be the State for which the major disaster is declared, 
or an Indian Tribal government choosing to act as a recipient 
instead of a subrecipient. See 44 CFR 206.431, definition of 
``grantee.''
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3. Property Acquisition and Relocation for Open Space
    Part 80 provides guidance on the administration of FEMA mitigation 
assistance for projects to acquire property for open space purposes 
under all FEMA HMA programs. See 44 CFR 80.1.

B. FMA Program Administration

    FMA is a non-disaster program allowing communities to complete 
mitigation activities so that structures insured under the NFIP are 
protected from future damages and the need for future insurance claims 
is lessened. FMA grants are subject to availability of annual Federal 
appropriations, as well as to any program-specific directive or 
restrictions with respect to such funds.
    The FMA is a competitive grant program, meaning FEMA reviews the 
applications submitted and selects the most qualified for an award. 
Each year, FEMA publishes a Notice of Funding Opportunity (NOFO) 
announcing the availability of funding and program requirements.\4\ In 
addition, projects must meet the minimum eligibility criteria 
identified in 44 CFR 79.6. The criteria ensure that FEMA selects cost-
effective and beneficial mitigation projects for FMA funding.
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    \4\ The most recent NOFO was posted on www.grants.gov and can be 
viewed at this link: https://www.grants.gov/web/grants/search-grants.html.
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    Applicants for the FMA program can be States and/or Indian Tribal 
governments.\5\ See 44 CFR 79.2(b). Subapplicants can be a State 
agency, community,\6\ or Indian Tribal government.\7\ See 44 CFR 
79.2(i). Subapplicants must participate in the NFIP. See 44 CFR 
79.6(a)(1). Subapplicants that have withdrawn from the NFIP, or those 
that FEMA has suspended for failure to comply with floodplain 
management requirements, are not eligible. See 44 CFR 79.6(a)(3).
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    \5\ An Indian Tribal government is any Federally recognized 
governing body of an Indian or Alaska Native Tribe, band, nation, 
pueblo, village, or community that the Secretary of Interior 
acknowledges to exist as an Indian Tribe under the Federally 
Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. This does 
not include Alaska Native corporations, the ownership of which is 
vested in private individuals. 44 CFR 79.2(e).
    \6\ Community means a political subdivision, including any 
Indian Tribe, authorized Tribal organization, Alaska Native village 
or authorized native organization, that has zoning and building code 
jurisdiction over a particular area having special flood hazards, 
and is participating in the NFIP, or a political subdivision of a 
State, or other authority that is designated by a political 
subdivision to develop and administer a mitigation plan. 44 CFR 
79.2(c).
    \7\ See supra note 5.
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    Subapplicants submit their applications to the applicant during the 
open application cycle as noted in the NOFO. Applicants then select, 
prioritize, and forward subapplications to FEMA by the deadline 
established in the NOFO. FEMA awards FMA funds to the applicant, who 
becomes the recipient. The recipient then disburses funding for the 
approved subawards to the subapplicants, who become subrecipients. 
Recipients and subrecipients must comply with all program requirements 
and other applicable Federal, State, territorial, and Tribal laws and 
regulations. See 44 CFR 79.3(b)(6) and (d)(4).
    A grant recipient/subrecipient must use FMA funds for mitigation 
planning and mitigation projects that will reduce or eliminate the risk 
of flood damages to properties insured under the NFIP. See 44 CFR 
79.6(c). An example of a hazard mitigation project is the elevation of 
a home to reduce risk of flood damage. Eligible mitigation projects 
must be cost-effective or able to eliminate future payments from the 
National Flood Insurance Fund (NFIF) for severe repetitive loss 
structures through an acquisition or relocation activity. See 42 U.S.C. 
4104c(c)(2)(A). To demonstrate cost-effectiveness, a project's 
anticipated benefits must be equal to or more than the cost of 
implementing the project, which is demonstrated through a benefit-cost 
analysis that compares the cost of the project to the benefits 
anticipated to occur over the lifetime of the project.\8\
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    \8\ See HMA Guidance, Part III.E.3, Cost-Effectiveness, p. 44.
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    FMA applicants must have a FEMA-approved State or Tribal mitigation 
plan as a condition of receiving an FMA award. See 44 CFR 79.6(b)(1), 
201.4(a), 201.7(a)(1). FMA subapplicants must have a FEMA-approved 
mitigation plan in order to apply for and receive mitigation project 
grants. See 44 CFR 79.6(b)(2), 201.6(a), 201.7(a)(3). Applicants/
subapplicants must propose projects for FMA grants that are consistent 
with the goals and objectives of the State or Tribal Mitigation Plan, 
and, for subawards, the Local or Tribal Mitigation Plan.\9\
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    \9\ 42 U.S.C. 4104c(c)(1); see HMA Guidance, Part III.E.5, 
Hazard Mitigation Plan Requirement, p. 44.
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C. Statutory Changes to FMA

    The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), 
Public Law112-141, 126 Stat. 916, reformed and streamlined the NFIA's 
hazard mitigation grant programs. Before BW-12, the NFIA authorized 
three distinct grant programs: (1) The FMA program (44 CFR part 79); 
(2) the Repetitive Flood Claims (RFC) program (implemented through 
guidance); and (3) the Severe Repetitive Loss (SRL) program (44 CFR 
part 79). BW-12 eliminated the RFC and SRL programs and consolidated 
aspects of those

[[Page 53476]]

programs into a reformed FMA program.\10\
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    \10\ The RFC and SRL programs were authorized by the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004, Public Law 
108-264, 118 Stat. 712. The RFC program was designed to reduce the 
long-term risk of flood damage to structures insured under the NFIP 
that have had one or more claim payments for flood damage. RFC funds 
were used to mitigate structures located within a State or community 
that were not eligible to receive funding under the FMA program at 
the time. Under the RFC program, funds could only be awarded if the 
State and community could not meet the FMA's cost share requirement, 
or if the State or community lacked the capacity to manage the 
activity under the FMA program. The SRL program was a voluntary 
pilot program designed to reduce or eliminate the long-term risk of 
flood damage to severe repetitive loss residential structures 
insured under the NFIP. Under the SRL program, an SRL property was 
defined as a residential property that is covered under an NFIP 
flood insurance policy and: (a) That has at least four NFIP claim 
payments (including building and contents) over $5,000 each, and the 
cumulative amount of such claims payments exceeds $20,000; or (b) 
For which at least two separate claims payments (building payments 
only) have been made with the cumulative amount of the building 
portion of such claims exceeding the market value of the building. 
At least two of the referenced claims must have occurred within any 
10-year period, and must be greater than 10 days apart.
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1. Changes to Method of Program Funding
    Before BW-12, FEMA allocated FMA program funding to States each 
fiscal year based upon the number of NFIP policies within the State, 
the number of repetitive loss structures within the State, and other 
criteria the Administrator determined to be in the best interests of 
the NFIF.\11\ FEMA allocated funding under the SRL program to States 
each fiscal year based upon the percentage of the total number of 
severe repetitive loss properties located within that State.\12\ Funds 
allocated to States that chose not to participate in either the FMA or 
SRL program in any given year were reallocated to participating States 
and Indian Tribal applicants.\13\ BW-12 replaced this process with a 
fully competitive program under which, as described above, FEMA selects 
subapplications against agency priorities identified in annual 
appropriations and the NOFO. In addition to involving a simpler formula 
that is easier to implement, this allows FEMA to better prioritize 
funding awards to the most at-risk (i.e., severe repetitive loss) 
properties.
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    \11\ Public Law 108-264, 118 Stat. 721; 44 CFR 79.4(a)(2).
    \12\ Public Law 108-264, 118 Stat. 716; 44 CFR 79.4(a)(1).
    \13\ 44 CFR 79.4(b).
---------------------------------------------------------------------------

2. Changes to Cost Share
    Before BW-12, FEMA generally contributed up to 75 percent of the 
eligible activity costs for mitigation projects under the FMA and SRL 
programs.\14\ However, FEMA made available an increased Federal cost 
share of up to 90 percent for the mitigation of severe repetitive loss 
properties if the applicant had a repetitive loss strategy in its 
approved State or Tribal mitigation plan.\15\ If neither the applicant 
nor the subapplicant could meet the FMA non-Federal share requirement, 
FEMA made available up to 100 percent of the project cost under the RFC 
program.\16\
---------------------------------------------------------------------------

    \14\ 44 CFR 79.4(c)(1).
    \15\ 44 CFR 79.4(c)(2).
    \16\ Public Law 108-264, 118 Stat. 722.
---------------------------------------------------------------------------

    Under the FMA program, as amended by BW-12, FEMA may contribute up 
to 90 percent of the eligible costs of projects that mitigate 
repetitive loss structures, and up to 100 percent of the eligible costs 
of projects that mitigate severe repetitive loss structures.\17\ For 
all other mitigation activities, including activities to properties 
that are NFIP-insured but do not meet the repetitive loss or severe 
repetitive loss definitions, FEMA may contribute up to 75 percent of 
the eligible costs.\18\ These changes to the FMA program resulted in 
increased funding to the most vulnerable properties (severe-repetitive 
loss properties) and decreased funding to less vulnerable (repetitive 
loss) properties.
---------------------------------------------------------------------------

    \17\ 42 U.S.C. 4104c(d). The term ``repetitive loss structure'' 
is defined at 42 U.S.C. 4104c(h)(2) (cross-reference to 42 U.S.C. 
4121(a)(7)). The term ``severe repetitive loss structure'' is 
defined at 42 U.S.C. 4104c(h)(2)(3).
    \18\ 42 U.S.C. 4104c(d).
---------------------------------------------------------------------------

3. Other Changes
    BW-12 made a number of other changes to the FMA program, including 
eliminating the cap on FMA funding for States and communities (but not 
changing the overall amount of grant funding available); eliminating 
the limit on in-kind contributions for the non-Federal cost share; 
limiting funds for the development or update of mitigation plans to 
$50,000 Federal share to any applicant or $25,000 Federal share to any 
subapplicant; and removing the restriction on awarding State or 
community planning grants more than once every 5 years.

III. Proposed Rule and Section-by-Section Analysis

    FEMA implemented the provisions of BW-12 that affected the HMA 
grant programs through the HMA Guidance.\19\ FEMA now proposes to 
update the FMA program regulations (44 CFR parts 78 and 79) to reflect 
the revisions made by BW-12. This rule proposes to remove part 78 in 
its entirety, redesignate part 79 as part 77, and revise the FMA 
regulations which would be located in the new part 77.
---------------------------------------------------------------------------

    \19\ While the current HMA Guidance, supra note 1, reflects the 
changes required by BW-12, these changes were first implemented in 
the Fiscal Year 2013 version of the HMA Guidance. See Fiscal Year 
2013 Hazard Mitigation Assistance Unified Guidance, July 12, 2013, 
Part I.B.1, Programmatic Changes, pp. 4-5, available at https://www.fema.gov/media-library-data/15463cb34a2267a900bde4774c3f42e4/FINAL_Guidance_081213_508.pdf (last accessed Jan 8, 2020).
---------------------------------------------------------------------------

    FEMA proposes to make the following revisions pursuant to BW-12:
     Remove regulations pertaining to the SRL program;
     revise the cost share provisions to reflect the matching 
requirements established by BW-12;
     eliminate the cap on FMA funding for States and 
communities;
     eliminate the limit on in-kind contributions for the non-
Federal cost share;
     specify that elevation, relocation or floodproofing of 
utilities are eligible activities;
     clarify that the required flood mitigation plan may be 
part of a community's multi-hazard mitigation plan;
     limit funds for the development or update of mitigation 
plans to $50,000 Federal share to any applicant or $25,000 Federal 
share to any subapplicant; and
     remove the restriction on awarding State or community 
planning grants only once every 5 years.
    FEMA also proposes revisions to streamline the FMA regulations and 
clarify current practice. FEMA describes these revisions in detail in 
this section. FEMA proposes to update terms and references throughout 
the various HMA-related regulations, including the hazard mitigation 
assistance and planning regulations in 44 CFR parts 80 (Property 
Acquisition and Relocation for Open Space), 201 (Mitigation Planning), 
and 206 subpart N (HMGP).
    On December 26, 2013, the Office of Management and Budget (OMB) 
finalized government-wide guidance entitled Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards.\20\ These standard requirements for Federal awards are codified 
at 2 CFR part 200. The regulations at 2 CFR part 200 apply to FEMA 
awards made on or after December 26, 2014, and to awards made under 
major disaster declarations on or after that date.\21\ In this proposed

[[Page 53477]]

rule, FEMA proposes to replace outdated terms and definitions with 
substantively similar terms and definitions that align with 2 CFR part 
200 and the HMA Guidance. These are nonsubstantive revisions intended 
to simplify definitions and improve consistency among FEMA's HMA 
programs.
---------------------------------------------------------------------------

    \20\ 78 FR 78589.
    \21\ As part of a joint interim final rule effective December 
26, 2014, the Department of Homeland Security (of which FEMA is a 
component) adopted the requirements of 2 CFR part 200 at 2 CFR part 
3002. 79 FR 75871 (Dec. 19, 2014).
---------------------------------------------------------------------------

A. 44 CFR Part 78, Flood Mitigation Assistance

    Part 78 applies to the administration of funds under the FMA 
program for which the application period opened on or before December 
3, 2007. Because all funds appropriated for FMA before December 3, 
2007, have been expended, it is unnecessary to retain part 78 and 
therefore, FEMA proposes to remove part 78 in its entirety.

B. 44 CFR Part 79, Flood Mitigation Grants

    The regulations governing the current FMA program are at 44 CFR 
part 79. FEMA proposes to redesignate part 79 as part 77, which is 
currently reserved, to establish the revised FMA program regulations. 
FEMA proposes to reserve part 79. Following is a detailed discussion of 
the proposed revisions to part 79 (proposed to be redesignated as part 
77).
1. Part 79 (Proposed Part 77) Authority
    FEMA proposes to revise the authority citation for part 79 
(proposed part 77) to remove historical authorities relating to FEMA's 
organization. FEMA proposes to remove the references to the 
Reorganization Plan No. 3 of 1978, Executive Order 12127, Executive 
Order 12148, and Executive Order 13286. The Reorganization Plan and 
Executive Orders 12127 and 12148 established FEMA as an agency in 1979 
and established its functions. Executive Order 13286 revised Executive 
Order 12148 and transferred some of FEMA's authorities to the 
Department of Homeland Security (DHS). FEMA proposes to remove these 
cites but retain the citation to the Homeland Security Act of 2002, 6 
U.S.C. 101 et seq., which provided organic authority for FEMA and made 
it a component agency of DHS. FEMA proposes to retain the citations to 
the NFIA (42 U.S.C. 4001 et seq.; 42 U.S.C. 4104c, 4104d) as they are 
the main authorities for this part.
2. Section 79.1 (Proposed Sec.  77.1) Purpose
    FEMA proposes to change the title from ``Purpose'' to ``Purpose and 
applicability'' to reflect the content of the section. FEMA proposes to 
revise paragraph (a), addressing the purpose of the part, to 
incorporate language from current paragraph (c) addressing the purpose 
of the FMA program. Paragraph (c) states that the FMA program is to 
provide financial assistance to ``State and local governments'' to 
reduce the risk of flood damage to NFIP-insured structures. FEMA 
proposes to replace ``local governments'' with ``communities'' because 
the term ``community'' is more inclusive of the entities eligible for 
assistance.\22\ FEMA's definition of ``community'' at 44 CFR 79.2(c) 
includes Tribes as well as local governments. In addition to States and 
communities, FEMA proposes to also include Indian Tribal governments in 
revised paragraph (a). Indian Tribal governments have a unique and 
direct relationship with the Federal Government and are recognized as 
distinct sovereign entities.\23\ While Indian Tribal governments can 
assume the responsibilities of the community (as subapplicant or 
subrecipient, when applying through the State), they can also be direct 
recipients of FMA funding. See 44 CFR 79.2(c), 79.2(d), 79.3(c)(2), and 
79.3(c)(3). That an Indian Tribal government is eligible to apply 
directly to FEMA for FMA funding is already established in the current 
program regulations in part 79. See 44 CFR 79.2(d) and 79.3(c)(2). 
Including Indian Tribal governments in the purpose statement is 
consistent with the rest of the substantive FMA program regulations in 
part 79 and gives Indian Tribal governments the level of recognition 
commensurate with States. FEMA also proposes to remove references to 
the SRL program in paragraph (a), because BW-12 eliminated the SRL 
program. FEMA stopped issuing SRL grants in Fiscal Year 2013. FEMA also 
proposes to remove current paragraph (b), which describes the purpose 
of the SRL program.
---------------------------------------------------------------------------

    \22\ See 42 U.S.C. 4104c(a) ``The Administrator shall carry out 
a program to provide financial assistance to States and 
communities.'' FEMA defines ``community'' in the current regulations 
at 44 CFR 79.2(c); the definition includes local governments and 
Tribes.
    \23\ See FEMA Tribal Policy, FEMA Policy #305-111-1, Dec. 27, 
2016, available at https://www.fema.gov/media-library-data/1483536222523-e549608aa77ec6cb623fae5d5de82930/FEMA_Tribal_Policy.pdf (last accessed Feb. 13, 2020).
---------------------------------------------------------------------------

    FEMA proposes to add a new paragraph (b) to address the 
applicability of the part to the administration of funds under the FMA 
program for which the application period opens on or after the 
effective date of the rule.
    Finally, FEMA proposes to remove paragraph (c), as FEMA has 
incorporated the language describing the purpose of the FMA program 
into revised paragraph (a).
3. Section 79.2 (Proposed Sec.  77.2) Definitions
    FEMA proposes to revise the definitions section to reflect changes 
required by BW-12. FEMA proposes to revise the definition of 
``community'' to reflect the definition provided in BW-12.\24\ This 
change is intended to mirror the statutory definition and is not a 
substantive change to the current definition at 44 CFR 79.2(c).
---------------------------------------------------------------------------

    \24\ See 42 U.S.C. 4104c(h)(1).
---------------------------------------------------------------------------

    FEMA proposes to replace the definition of ``severe repetitive loss 
properties'' with the definition of ``severe repetitive loss 
structure'' from BW-12. The definition of ``severe repetitive loss 
properties'' at current 44 CFR 79.2(h) reflects the pre-BW-12 
definition that was included in the statutory section authorizing the 
SRL pilot program.\25\ BW-12 removed the statutory section for the SRL 
pilot program, including the definition of ``severe repetitive loss 
property,'' and established a definition for ``severe repetitive loss 
structure'' that is applicable to the FMA program.\26\ The BW-12 
definition states that a severe repetitive loss structure is one for 
which four or more separate claims payments have been made with the 
amount of each claim exceeding $5,000, and with the cumulative amount 
of such claims payments exceeding $20,000. FEMA proposes to retain the 
provision providing that the amount of each claim includes building and 
contents payments. This is consistent with FEMA's prior interpretation 
of the definition of ``severe repetitive loss property'' as well as the 
HMA Guidance.\27\ The BW-12 definition also states that in the 
alternative, a severe repetitive loss structure is one for which at 
least two separate flood insurance claims payments have been made, with 
the cumulative amount of such claims exceeding the value of the insured 
structure. FEMA proposes to retain the statement that that the claims 
payments include building payments only because weighing the value of 
the insured

[[Page 53478]]

structure against the amount of building payments is a more direct 
comparison than weighing the value of the insured structure against the 
amount of both building and contents payments. This is consistent with 
FEMA's prior interpretation of the definition of ``severe repetitive 
loss property'' as well as the HMA Guidance.\28\
---------------------------------------------------------------------------

    \25\ See Public Law 108-264, 118 Stat. 714.
    \26\ 42 U.S.C. 4104c(h)(3).
    \27\ See 44 CFR 79.2(h)(1); HMA Guidance, Part VIII.C.1, 
Eligible Properties, p. 116.
    \28\ See 44 CFR 79.2(h)(2); HMA Guidance, Part VIII.C.1, 
Eligible Properties, p. 116.
---------------------------------------------------------------------------

    FEMA proposes to add a definition for ``repetitive loss structure'' 
to reflect the definition provided in BW-12. BW-12 established a 
distinction between repetitive loss structures and severe repetitive 
loss structures for purposes of the FMA program (which allows FEMA to 
better target funding based on a property's risk of damage). BW-12 
defined the term ``repetitive loss structure'' to mean ``a structure 
covered by a contract for flood insurance that--(A) has incurred flood-
related damage on 2 occasions, in which the cost of repair, on the 
average, equaled or exceeded 25 percent of the value of the structure 
at the time of each such flood event; and (B) at the time of the second 
incidence of flood-related damage, the contract for flood insurance 
contains increased cost of compliance coverage.'' FEMA's proposed 
definition of ``repetitive loss structure'' parrots the statutory 
definition. See 42 U.S.C. 4121(a)(7) (cross referenced in 42 U.S.C. 
4104c(h)(2)).
    FEMA proposes to remove the definitions of ``market value'' and 
``multifamily property,'' currently found at 44 CFR 79.2(f) and (g), 
respectively, because the statutory definitions of ``severe repetitive 
loss structure'' and ``repetitive loss structure'' no longer include 
these terms and it is therefore not necessary to use or define these 
terms in the regulations.
    In addition to the revisions to the definitions made pursuant to 
BW-12, FEMA proposes to add terms and to replace outdated terms and 
definitions with substantively similar terms and definitions that 
better align with 2 CFR part 200 and the HMA Guidance. These are 
nonsubstantive revisions intended to simplify definitions and improve 
consistency among FEMA's HMA programs. FEMA proposes to add definitions 
for ``closeout,'' ``Federal award,'' ``management costs,'' ``pass-
through Entity,'' and ``State.''
    FEMA proposes to add a definition for ``closeout'' which is nearly 
identical to the definition in 2 CFR 200.16. FEMA proposes to add this 
definition for ease of the reader because the term is used in proposed 
part 77, and also to establish that it has the same meaning as in the 
grants management regulations at 2 CFR part 200. This is a 
nonsubstantive change that reflects current practice.
    FEMA proposes to add a definition for ``Federal award'' to reflect 
the definition in 2 CFR 200.38(a)(1),\29\ with two exceptions. First, 
FEMA proposes to use the terms ``recipient'' and ``subrecipient'' 
instead of the term ``non-Federal entity.'' The term ``non-Federal 
entity,'' as defined at 2 CFR 200.69, includes entities that are not 
eligible recipients or subrecipients under the FMA program. While FMA 
recipients and subrecipients are ``non-Federal entities'' under 2 CFR 
part 200, FEMA proposes to tailor the definitions in the FMA 
regulations so that they are program-specific. Second, FEMA proposes to 
clarify that the terms ``award'' and ``grant'' may also be used to 
describe a ``Federal award'' under the FMA program regulations. This is 
a nonsubstantive change to clarify that the terms used throughout 
proposed part 77 are interchangeable.
---------------------------------------------------------------------------

    \29\ In 2 CFR 200.38(a)(1), ``Federal award'' means the Federal 
financial assistance that a non-Federal entity receives directly 
from a Federal awarding agency or indirectly from a pass-through 
entity.
---------------------------------------------------------------------------

    FEMA proposes to add a definition for ``management costs.'' 
``Management costs'' are referenced throughout the FMA program 
regulations, but this term is not currently defined in part 79. FEMA 
proposes to define ``management costs'' consistent with existing FEMA 
regulations \30\ and the HMA Guidance.\31\
---------------------------------------------------------------------------

    \30\ See 44 CFR 207.2.
    \31\ See HMA Guidance, Part III, E.1.5, Management Costs, p. 41.
---------------------------------------------------------------------------

    FEMA proposes to add a definition for ``pass-through entity'' which 
is substantively the same as the definition in 2 CFR 200.74, with one 
exception. FEMA proposes to use the terms ``recipient'' and 
``subrecipient'' instead of the term ``non-Federal entity.'' The term 
``non-Federal entity,'' as defined at 2 CFR 200.69, includes entities 
that are not eligible recipients or subrecipients under the FMA 
program. While FMA recipients and subrecipients are ``non-Federal 
entities'' under 2 CFR part 200, FEMA proposes to tailor the 
definitions in the FMA regulations so that they are program-specific. 
The addition of this definition is for ease of the reader since the 
term is used in other definitions in proposed part 77.
    FEMA proposes to add a definition for ``State,'' which is 
consistent with 2 CFR 200.90 as well as FEMA's regulations for 
mitigation planning and HMGP.\32\ Although not defined in the 
authorizing statute for the HMA programs, for purposes of these 
programs, and consistent with 2 CFR 200.90, FEMA considers a State to 
be any State of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American 
Samoa, and the Commonwealth of the Northern Mariana Islands.
---------------------------------------------------------------------------

    \32\ See the definition for ``State'' in the mitigation planning 
regulations at 44 CFR 201.2 and the definitions section of part 206 
(Sec.  206.2(a)(22)) which applies to the HMGP program regulations 
at part 206 subpart N. See also, HMA Guidance, Part III.A, Eligible 
Applicants, p. 25.
---------------------------------------------------------------------------

    FEMA proposes to replace the definitions ``grantee,'' ``subgrant,'' 
and ``subgrantee,'' with definitions for ``recipient,'' ``subaward,'' 
and ``subrecipient,'' respectively, to better align with the terms and 
definitions used in 2 CFR part 200 and the HMA Guidance. The proposed 
definition of ``recipient'' is similar to the definition at 2 CFR 
200.86; however, FEMA proposes to use the terms ``State or Indian 
Tribal government'' instead of the term ``non-Federal entity'' to 
reflect the terms and definitions in this proposed rule, which are 
tailored to the FMA program. FEMA also proposes to add that the 
recipient may be a pass-through entity to clarify the relationship 
between the terms ``recipient'' and ``pass-through entity.''
    The proposed definition of ``subaward'' is the same as the 
definition at 2 CFR 200.92.
    The proposed definition of ``subrecipient'' is similar to the 
definition at 2 CFR 200.93; however, FEMA proposes to use the terms 
``State agency, community, or Indian Tribal government'' instead of the 
term ``non-Federal entity'' to reflect the terms and definitions in 
this proposed rule, which are tailored to the FMA program.
    FEMA proposes to revise the definitions of ``applicant'' and 
``subapplicant.'' In the definition of ``applicant,'' FEMA proposes to 
replace the term ``grant'' with the term ``Federal award,'' which FEMA 
proposes to define in proposed Sec.  77.2(e). This is a nonsubstantive 
change to use the newly defined term ``Federal award'' throughout the 
definitions. FEMA proposes to remove the provision stating that the 
applicant will be accountable for the use of the funds because it only 
serves as a vague reference to other applicable substantive 
requirements and is not necessary to include in the definition of 
``applicant.'' \33\ FEMA also proposes to add that once funds have been 
awarded, the applicant becomes the recipient and may also be a pass-
through entity. This is a nonsubstantive addition to clarify the 
relationship

[[Page 53479]]

between the terms ``applicant,'' ``recipient,'' and ``pass-through 
entity'' for the ease of the reader. FEMA proposes to revise the 
definition of ``subapplicant'' by removing the reference to the SRL 
program which is no longer authorized pursuant to BW-12. FEMA proposes 
to clarify that applications submitted by subapplicants are 
subapplications. These are nonsubstantive revisions intended to reflect 
FEMA's current use of these terms.
---------------------------------------------------------------------------

    \33\ See, e.g., 44 CFR 79.9, Grant administration, and 2 CFR 
200.300-200.309, Standards for Financial and Program Management.
---------------------------------------------------------------------------

    Finally, FEMA makes no changes to the definitions of ``Indian 
Tribal government,'' ``Administrator,'' and ``Regional Administrator.''
4. Section 79.3 (Proposed Sec.  77.3) Responsibilities
    In proposed Sec.  77.3, which covers responsibilities of FEMA, the 
recipient, and subrecipients, FEMA proposes to remove references to the 
SRL program, to replace terms to conform to the revised definitions in 
proposed Sec.  77.2, to remove the paragraphs addressing Indian Tribal 
government responsibilities (as they are covered under the recipient 
responsibilities), and to add monitoring and closeout provisions.
    Paragraph (a) addresses FEMA's responsibilities under the FMA 
program. FEMA proposes to remove (a)(2), (a)(7), and (a)(8), which 
pertain to the former SRL program and are no longer necessary. FEMA 
proposes to add two paragraphs, (a)(6) and (7), regarding monitoring 
and closeout requirements. Consistent with 2 CFR 200.328 and 200.343, 
and the HMA Guidance,\34\ FEMA proposes to add the following FEMA 
responsibilities: (1) Monitoring implementation of awards through 
quarterly reports; and (2) reviewing all closeout documentation for 
compliance and sending the recipient a request for additional 
supporting documentation, if needed.\35\ These are nonsubstantive 
revisions intended to reflect and clarify existing requirements; they 
are already a part of the current grants process.
---------------------------------------------------------------------------

    \34\ See HMA Guidance, Part II.M, Project Monitoring, and Part 
II.N, Closeout, pp. 23-24.
    \35\ These requirements are covered by OMB Information 
Collection 1660-0072, ``Mitigation Grant Programs/e-grants''. This 
collection is approved by OMB until October 31, 2021.
---------------------------------------------------------------------------

    Paragraph (b) addresses the responsibilities of the State. However, 
the paragraph actually addresses the responsibilities of all 
recipients, including territories and Indian Tribal governments.\36\ 
Therefore, FEMA proposes to replace ``State'' with ``recipient'' in the 
heading and introductory paragraph of (b). As proposed in this 
rulemaking, the term ``State'' includes territories (see proposed Sec.  
77.2(l)), and the term ``recipient'' includes States and Indian Tribal 
governments (see proposed Sec.  77.2(i)). This change is clarifying and 
is not substantive.
---------------------------------------------------------------------------

    \36\ See HMA Guidance, Part I.C, Roles and Responsibilities, p. 
5.
---------------------------------------------------------------------------

    The introductory paragraph of (b) states that the State will serve 
as the applicant and grantee through a single point of contact for the 
FMA and SRL programs. FEMA proposes to remove this sentence because it 
relates to the former FMA program and the eliminated SRL program, and 
it is no longer necessary to have a single point of contact as there 
are no longer two programs being addressed in this part.
    Paragraph (b)(2) states the recipient has responsibility to review 
and submit local mitigation plans to the FEMA Regional Administrator 
for final review and approval. FEMA proposes to remove this paragraph 
in its entirety. The requirement to submit plans for review and 
approval is now located in 44 CFR part 201 (local mitigation plans are 
specifically covered in Sec.  201.6). FEMA prefers to refer to part 201 
to avoid confusion. Repeating the same requirement in part 79 (proposed 
part 77) is duplicative, can cause confusion as it might appear to be a 
separate requirement, and is administratively burdensome if FEMA needs 
to make any changes, as it would have to change them in two different 
places in the regulations. Finally, submitting plans for review and 
approval is not an FMA grant requirement; the FMA requirement is to 
have an approved plan, which is already captured in current Sec.  
79.3(b)(1) (proposed Sec.  77.3(b)(1)).
    FEMA proposes to replace the term ``subgrant(s)'' with 
``subaward(s)'' in paragraphs (b)(3) (proposed (b)(2)), (b)(4) 
(proposed (b)(3)), and (b)(5) (proposed (b)(4)), to reflect the 
terminology used in 2 CFR part 200. This is a nonsubstantive change and 
is already used in the HMA Guidance.
    FEMA proposes to add two new paragraphs, (b)(5) and (6), regarding 
monitoring and closeout requirements. Consistent with 2 CFR 200.328 and 
200.343, and the HMA Guidance,\37\ FEMA proposes to add the following 
recipient responsibilities: (1) Monitor and evaluate the progress of 
the mitigation activity in accordance with the approved original scope 
of work and budget through quarterly reports; and (2) closeout the 
subaward in accordance with 2 CFR 200.343 and 200.344, and applicable 
FEMA guidance. These are nonsubstantive revisions intended to reflect 
and clarify existing requirements; they are already a part of the 
current grants process.\38\
---------------------------------------------------------------------------

    \37\ See HMA Guidance, Part II.M, Project Monitoring, and Part 
II.N, Closeout, pp. 23-24.
    \38\ These requirements are covered by OMB Information 
Collection 1660-0072, ``Mitigation Grant Programs/e-grants''. This 
collection is approved by OMB until October 31, 2021.
---------------------------------------------------------------------------

    Paragraph (c) addresses the responsibilities of Indian Tribal 
governments acting as recipients. As these responsibilities would now 
be covered under paragraph (b), FEMA proposes to remove paragraph (c). 
Current paragraph (c)(1) states that an Indian Tribal government must 
have a FEMA approved Tribal mitigation plan in accordance with Sec.  
201.7. Proposed paragraph (b)(1) states this requirement generally, to 
cover both States and Indian Tribal governments, as proposed paragraph 
(b) would now cover all recipients (States or Indian Tribal 
governments) instead of just States. Current paragraph (c)(2) states 
that a federally-recognized Indian Tribal government as defined by the 
Federally Recognized Indian Tribe List Act of 1994, applying directly 
to FEMA for mitigation grant funding will assume the responsibilities 
of the State as the term is used in part 79, as applicant or grantee, 
described in current paragraphs (b)(3) through (b)(6) (i.e., the 
responsibilities of the State). This provision is now captured in 
proposed paragraph (b), which applies to all recipients, including 
Indian Tribal governments, since Indian Tribal governments are included 
in the definition of ``recipient'' in proposed Sec.  77.2(i). Current 
paragraph (c)(3) states that a federally-recognized Indian Tribal 
government as defined by the Federally Recognized Indian Tribe list Act 
of 1994, applying through the State, will assume the responsibilities 
of the community (as the subapplicant or subgrantee) described in 
current paragraphs (d)(2) through (4). This provision would be captured 
in proposed paragraph (c), addressing the responsibilities of 
subrecipients (which can include Indian Tribal governments), as 
described below.
    Current paragraph (d) addresses the responsibilities of the 
community. FEMA proposes to redesignate paragraph (d) as paragraph (c) 
and to change the paragraph heading from ``Community'' to 
``Subrecipient.'' The responsibilities in this paragraph apply not just 
to communities, but to any entity that qualifies as a subrecipient, 
i.e., a State agency, community, or Indian Tribal government (see 
proposed definition of ``subrecipient'' in

[[Page 53480]]

Sec.  77.2(o)). This is a nonsubstantive change for clarification 
purposes only.
    FEMA proposes to replace ``community'' with ``subrecipient'' in the 
introductory sentence as well, and to add that this can mean 
subapplicant because some of these responsibilities occur before the 
award. This is also a nonsubstantive change for clarification purposes 
only.
    FEMA proposes to remove paragraph (d)(1), stating that the 
community must prepare and submit a FEMA approved local mitigation 
plan, consistent with 44 CFR part 201. The requirement to prepare and 
submit plans for review and approval is now located in 44 CFR part 201 
(local mitigation plans are specifically covered in Sec.  201.6). FEMA 
prefers to refer to part 201 to avoid confusion. Repeating the same 
requirement in part 79 (proposed part 77) is duplicative, can cause 
confusion as it might appear to be a separate requirement, and is 
administratively burdensome if FEMA needs to make any changes, as it 
would have to change them in two different places in the regulations. 
Finally, submitting plans for review and approval is not an FMA grant 
requirement; the requirement is to have an approved plan in order to be 
eligible for FMA project grants, which is already captured in current 
Sec.  79.6(b)(2) (proposed Sec.  77.6(b)(2)).
    Current paragraph (d)(2) states that the community (proposed: 
subrecipient) must complete and submit subgrant applications to the 
State POC for FMA planning, project and management cost subgrants, and 
for SRL project and management costs subgrants. FEMA proposes to 
replace ``subgrant'' with ``subaward,'' consistent with the terminology 
in 2 CFR part 200. FEMA proposes to replace ``State POC'' with 
``recipient'' as ``recipient'' captures the universe of entities to 
which a subrecipient would submit an application (i.e., in addition to 
a State, the recipient can be a territory or Indian Tribal government). 
FEMA proposes to replace the phrase ``FMA planning, project and 
management cost subgrants'' with ``FMA planning and project subawards'' 
because FEMA proposes to replace the term ``subgrant'' with the term 
``subaward,'' and because ``management costs'' are not a separate type 
of grant. Rather, ``management costs'' are defined under proposed Sec.  
77.2(g) and eligible as described under proposed Sec.  77.7(a)(1). FEMA 
proposes to remove the clause pertaining to SRL subgrants, as the SRL 
program is no longer authorized under the NFIA. FEMA proposes to 
redesignate current paragraph (d)(2) as paragraph (c)(1). The proposed 
changes to paragraph (d)(2) are nonsubstantive to clarify and conform 
the regulations with the changed definitions described above.
    Current paragraph (d)(3) states that the community (proposed: 
subrecipient) must implement all approved subgrants; notifying each 
holder of a record interest in severe repetitive loss properties when 
an offer of mitigation assistance has been made under the SRL program, 
and when such offer has been refused. FEMA proposes to revise this 
provision to simply state that the subrecipient must ``implement all 
approved subawards.'' As the SRL program is no longer authorized under 
the NFIA, the clause pertaining to SRL assistance is not necessary. 
However, it is a current responsibility of all subrecipients to 
implement any approved subawards, so FEMA proposes to retain this 
portion of current paragraph (d)(3). FEMA proposes to redesignate 
current paragraph (d)(3) as paragraph (c)(2). These are nonsubstantive 
clarifying revisions.
    FEMA proposes to add two paragraphs to address the monitoring and 
closeout requirements that are currently part of the grants process. 
Consistent with 2 CFR part 200 and the HMA Guidance, FEMA proposes to 
add paragraph (c)(3), stating that the subrecipient must monitor and 
evaluate the progress of the mitigation activity in accordance with the 
approved original scope of work and budget through quarterly reports, 
and paragraph (c)(5), stating that the subrecipient must closeout the 
subaward in accordance with 2 CFR 200.343 and 200.344, and the HMA 
Guidance.\39\ These are nonsubstantive revisions reflecting existing 
requirements.\40\
---------------------------------------------------------------------------

    \39\ See 2 CFR 200.328, 200.343; HMA Guidance, Part II. M, 
Project Monitoring, and Part II.N, Closeout, pp. 23-24.
    \40\ These requirements are covered by OMB Information 
Collection 1660-0072, ``Mitigation Grant Programs/e-grants.'' This 
collection is approved by OMB until October 31, 2021.
---------------------------------------------------------------------------

    Current paragraph (d)(4) states that the community must comply with 
program requirements under this part, grant management requirements 
under 2 CFR parts 200 and 3002, the grant agreement articles, and other 
applicable Federal, State, Tribal and local laws and regulations. FEMA 
proposes to retain this language and redesignate current paragraph 
(d)(4) as paragraph (c)(4).
5. Section 79.4 (Proposed Sec.  77.4) Availability of Funding
    Section 79.4 addresses the method of funding under the SRL and FMA 
programs prior to BW-12. As explained in the Background section of this 
preamble, prior to BW-12, FMA program funding was allocated to States 
each fiscal year based upon the number of NFIP policies within the 
State, the number of repetitive loss structures within the State, and 
other criteria the Administrator determined to be in the best interests 
of the NFIF.
    Paragraph (a) addresses automatic allocations. FEMA proposes to 
remove paragraph (a)(1), which addresses the SRL program, as that 
program is no longer authorized under the NFIA. Paragraph (a)(2) 
describes how the automatic allocation process worked for the FMA 
program prior to BW-12. Pursuant to the introductory language of 
current paragraph (a)(2), for the amount made available for the FMA 
program, the Administrator allocates the available funds each fiscal 
year. Funds are distributed based upon the number of NFIP policies, 
repetitive loss structures, and any other such criteria the 
Administrator determines are in the best interest of the NFIF. FEMA 
proposes to revise the introductory language of current paragraph 
(a)(2) to state that the Administrator will allocate funds based upon 
criteria established for each application period rather than ``each 
fiscal year,'' because this is more accurate. Although each application 
period is usually tied to the specific fiscal year, referring to ``each 
application period'' would allow flexibility in the event that a 
particular application period did not line up exactly with a particular 
fiscal year (for example, if the appropriations process delayed the 
announcement of an application period beyond the normal schedule). FEMA 
also proposes to add ``severe repetitive loss structures'' to the list 
of criteria because under the NFIA, as amended by BW-12, these 
structures are defined separately and subject to different cost share 
provisions.\41\ FEMA proposes to renumber revised paragraph (a)(2) as 
Sec.  77.4(a)(1).
---------------------------------------------------------------------------

    \41\ See 42 U.S.C. 4104c(d)(1) and (h)(3).
---------------------------------------------------------------------------

    Current paragraph (a)(2)(i) states that a maximum of 7.5 percent of 
the amount made available in any fiscal year may be allocated for FMA 
planning grants nationally, that a planning grant will not be awarded 
to a State or community more than once every 5 years, and an individual 
planning grant will not exceed $150,000 to any State agency applicant, 
or $50,000 to any community subapplicant. It states that the total 
planning grant made in any fiscal year to any State, including all 
communities located in the State, will not exceed $300,000. FEMA 
proposes to redesignate this paragraph as paragraph (a)(2). FEMA also 
proposes to revise this paragraph because BW-12 revised the

[[Page 53481]]

$150,000 and $50,000 caps, and explicitly removed the 7.5 percent cap, 
the 5-year limit, and the $300,000 total cap. Under the current 
statutory authority, the amount of an individual planning grant under 
the FMA program shall not exceed $50,000 for any mitigation plan of a 
State (or, a ``recipient'' as defined in this proposed rule) or $25,000 
for any mitigation plan of a community (or, a ``subrecipient'' as 
defined in this proposed rule).\42\ FEMA proposes to reflect these 
revised caps in proposed Sec.  77.4(a)(2). This removal is a 
nonsubstantive change to the FMA program as FEMA has already 
implemented this provision of BW-12.\43\
---------------------------------------------------------------------------

    \42\ 42 U.S.C. 4104c(c)(3)(F).
    \43\ See HMA Guidance, Part IV.E.3, FMA Funding Restrictions, p. 
54.
---------------------------------------------------------------------------

    Current paragraph (a)(2)(ii) states that the total amount of FMA 
project grant funds provided during any 5-year period will not exceed 
$10,000,000 to any State agency(s) or $3,300,000 to any community. It 
states that the total amount of project grant funds provided to any 
State, including all communities located in the State will not exceed 
$20,000,000 during any 5-year period. The Administrator may waive the 
limits of this paragraph for any 5-year period when a major disaster or 
emergency is declared pursuant to the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act for flood conditions. FEMA proposes 
to remove this paragraph because BW-12 removed these caps and time 
period restrictions. Under the current statutory authority, FMA project 
grants must meet the eligibility requirements in 42 U.S.C. 4104c(c), 
are subject to the availability of funds, and may be subject to 
additional restrictions as Congress may establish in the annual 
appropriation for the FMA program. This removal is a nonsubstantive 
change to the FMA program as FEMA has already implemented this 
provision of BW-12.\44\
---------------------------------------------------------------------------

    \44\ See HMA Guidance, Part VIII.C, Additional Program Guidance: 
Flood Mitigation Assistance Program, pp. 116-18.
---------------------------------------------------------------------------

    Paragraph (b) addresses redistribution. It states that funds 
allocated to States that choose not to participate in either the FMA or 
SRL program in any given year will be reallocated to participating 
States and Indian Tribal applicants. It states that any funds allocated 
to a State, and the communities within the State, which have not been 
obligated within the timeframes established by the Administrator shall 
be redistributed by the Administrator to other States and communities 
to carry out eligible activities in accordance with this part. FEMA 
proposes to remove this paragraph because BW-12 eliminated automatic 
allocations. As there are no automatic allocations, there is no need 
for a provision regarding re-allocations. Under the current program 
post-BW-12, FEMA considers all eligible subapplications and selects 
subapplications against agency priorities identified in annual 
appropriations and the NOFO.\45\
---------------------------------------------------------------------------

    \45\ See HMA Guidance, Part IV.H.1, Required Components, p. 59.
---------------------------------------------------------------------------

    Current paragraph (c) addresses the cost share provisions that were 
applicable prior to BW-12. Under current paragraph (c)(1), FEMA may 
provide up to 75 percent of the eligible cost of activities for grants 
approved for funding. Under current paragraph (c)(2), FEMA may 
contribute up to 90 percent of the cost of the eligible activities for 
severe repetitive loss properties if the applicant has an approved 
mitigation plan meeting the repetitive loss requirements identified in 
Sec.  201.4 or Sec.  201.7.
    FEMA proposes to redesignate current paragraph (c) as paragraph (b) 
and to replace current paragraphs (c)(1) and (2) with proposed 
paragraphs (b)(1) through (3) to reflect the new cost share structure 
under BW-12. FEMA proposes to add a new paragraph (b)(1) to state that 
for each severe repetitive loss structure, FEMA may contribute up to 
100 percent of all eligible costs if the activities are technically 
feasible and cost-effective, or, up to the amount of the expected 
savings to the NFIP for acquisition or relocation activities.\46\ FEMA 
is not retaining the requirement that severe repetitive loss properties 
have an approved mitigation plan meeting the repetitive loss 
requirements identified in part 201 because BW-12 removed this 
requirement.\47\ Note that all applicants must still have a FEMA-
approved mitigation plan that addresses flood losses to structures 
covered by the NFIP, but the mitigation planning requirements are no 
longer tied to specific cost shares.\48\ FEMA proposes to clarify the 
mitigation planning requirements in proposed Sec.  77.6(b), discussed 
elsewhere in this preamble.
---------------------------------------------------------------------------

    \46\ 42 U.S.C. 4104c(c)(2) and (d)(1); implemented via HMA 
Guidance at section VIII.C.3, Cost Sharing, p. 117.
    \47\ See Public Law 112-141, section 100225(a)(1), (9); 42 
U.S.C. 4104c(d).
    \48\ See 42 U.S.C. 4104c(b).
---------------------------------------------------------------------------

    FEMA proposes to add a new paragraph (b)(2) to state that for 
repetitive loss structures, FEMA may contribute up to 90 percent of 
eligible costs.\49\ Prior to BW-12, repetitive loss structures received 
a 75 percent cost share.
---------------------------------------------------------------------------

    \49\ 42 U.S.C. 4104c(d)(2); implemented via HMA Guidance at 
section VIII.C.3, Cost Sharing, p. 118.
---------------------------------------------------------------------------

    FEMA proposes to add a new paragraph (b)(3) to state that for all 
other mitigation activities, FEMA may contribute up to 75 percent of 
all eligible costs.\50\ FEMA has implemented this new cost structure in 
the HMA Guidance.\51\
---------------------------------------------------------------------------

    \50\ 42 U.S.C. 4104c(d)(3); implemented via HMA Guidance at 
section VIII.C.3, Cost Sharing, p. 118.
    \51\ See HMA Guidance, Part VIII. C.3, Cost Sharing, pp. 117-18.
---------------------------------------------------------------------------

    Some projects include different types of structures. FEMA proposes 
to add a new paragraph (b)(4) stating that for projects that contain a 
combination of severe repetitive loss, repetitive loss, and/or insured 
structures, FEMA will calculate the cost share as appropriate for each 
type of structure submitted in the project subapplication, meaning that 
FEMA will determine the cost share based on the type of structure, even 
if the structure is combined with other types in the same project. FEMA 
is adding this provision to make clear that a structure is not eligible 
to receive an increased Federal cost share just because it is included 
in the same project as structures that are eligible to receive an 
increased Federal cost share. For example, the cost of mitigating a 
repetitive loss structure is still subject to the 90 percent Federal/10 
percent non-Federal cost share requirement, even if it is included in a 
project that also mitigates severe repetitive loss structures. This is 
not a substantive change and reflects FEMA's current practice. FEMA 
proposes to add this provision to ensure that potential subrecipients 
do not mistakenly expect to receive increased cost shares for which 
they are ineligible.
    Current paragraph (c)(3) states that for the FMA program only, of 
the non-Federal contribution, not more than one half can be provided 
from in-kind contributions. FEMA proposes to remove this paragraph 
because BW-12 eliminated the limit on the amount of in-kind 
contributions that may make up the non-Federal portion of an FMA 
award.\52\
---------------------------------------------------------------------------

    \52\ See Public Law 112-141, section 100225(a); 42 U.S.C. 
4104c(d).
---------------------------------------------------------------------------

    BW-12 includes a provision stating that for any application for a 
grant for which FEMA fails to make a grant award within 5 years of the 
date of application, the grant application is considered to be denied 
and any funding amounts allocated for such grant application will 
remain available

[[Page 53482]]

for other FMA grants.\53\ FEMA proposes to add a new paragraph (c) to 
implement this provision. FEMA notes that while the statute uses the 
term ``application,'' FEMA is interpreting this to mean subapplications 
as well. While FEMA makes awards to the applicant, it is the applicant 
who awards funds to the subapplicant. Therefore FEMA is applying the 5-
year requirement to applicants to ensure they in turn are timely in 
making the subawards to their subapplicants. Otherwise, the intent of 
the statute would not be fully realized if FEMA makes the award within 
5 years, but the applicant does not in turn make a timely award to the 
subapplicant. FEMA interprets ``date of application'' to mean date of 
submission, meaning the date the applicant/subapplicant submits the 
application to FEMA. This is to avoid any potential confusion about the 
date that marks the beginning of the 5-year period. FEMA has 
implemented this provision in the HMA Guidance.\54\
---------------------------------------------------------------------------

    \53\ See 42 U.S.C. 4104c(g).
    \54\ See HMA Guidance, Part VIII.C.6, Failure to Make Federal 
Award within 5 Years, p. 118.
---------------------------------------------------------------------------

6. Section 79.5 (Proposed Sec.  77.5) Application Process
    Current Sec.  79.5 addresses the application process. Paragraph (a) 
is entitled ``Applicant or grantee.'' FEMA proposes to remove the 
reference to grantee so that the title of paragraph (a) would just be 
``Applicant.'' While 2 CFR part 200 uses recipient rather than grantee, 
this section addresses the point in the grants process where money has 
not yet been awarded, so the appropriate term for this paragraph is 
applicant rather than recipient. Current paragraph (a)(1) states that 
States will be notified of the amount allocated to them for the SRL and 
FMA programs each fiscal year, along with the application timeframes. 
As discussed above, automatic allocations are no longer used under the 
FMA program, and the SRL program is no longer authorized. Further, FEMA 
prefers to use ``applicant'' rather than State, as applicant captures 
the full universe of entities who may be an applicant (i.e., States 
(including territories) and Indian Tribal governments).\55\ Therefore 
FEMA proposes to revise paragraph (a)(1) to state that applicants will 
be notified of the availability of funding for the FMA program pursuant 
to 2 CFR 200.202 and 200.203. Section 200.202 requires agencies to 
provide public notice of grant fund availability, and Sec.  200.203 
lists the requirements surrounding these notices (including the 
information they must contain). As discussed above, FEMA publishes a 
NOFO when funds become available. The NOFO includes the application 
timeframes, and therefore FEMA did not retain in paragraph (a)(1) the 
specific requirement to provide application timeframes.
---------------------------------------------------------------------------

    \55\ See proposed Sec.  77.2(b).
---------------------------------------------------------------------------

    Paragraph (a)(2) states that the State is responsible for 
soliciting applications from eligible communities, or subapplicants, 
and for reviewing and prioritizing applications prior to forwarding 
them to FEMA for review and award. FEMA proposes to replace ``State'' 
with ``applicant'' to cover the entire universe of potential applicants 
(States (including territories) and Indian Tribal governments).\56\
---------------------------------------------------------------------------

    \56\ Id.
---------------------------------------------------------------------------

    Paragraph (a)(3) states that participation in these flood 
mitigation grant programs is voluntary, and States may elect not to 
participate in either the SRL or FMA program in any fiscal year without 
compromising their eligibility in future years. FEMA proposes to remove 
this paragraph because it was relevant pre-BW-12 when the programs were 
allocation based and each eligible State received an annual allocation. 
While the current FMA program is voluntary, this is not necessary to 
repeat in the regulations relating to the application process because 
the voluntary nature of the program is established in the statute and 
made clear in Sec.  79.6 (proposed Sec.  77.6), each annual NOFO, and 
the HMA Guidance.\57\
---------------------------------------------------------------------------

    \57\ See 42 U.S.C. 4104c(a); 44 CFR 79.6; HMA Guidance, Part II, 
Frontloading HMA Program Eligibility Requirements, p. 13.
---------------------------------------------------------------------------

    Paragraph (a)(4) states that Indian Tribal governments interested 
in applying directly to FEMA for either the FMA or SRL program grants 
should contact the appropriate FEMA Regional Administrator for 
application information. FEMA proposes to remove this paragraph because 
proposed paragraphs (a)(1) and (2) would apply to Indian Tribal 
government applicants and eliminate the need to address these 
applicants in a separate paragraph.
    Paragraph (b) is entitled ``Subapplicant or subgrantee.'' FEMA 
proposes to remove the term ``subgrantee'' because the paragraph 
applies to subapplicants before they become subgrantees (proposed 
``subrecipients''), and thus it is only necessary to include 
``subapplicant'' in the paragraph title. No substantive change is 
intended. The first sentence states that participation in the SRL and 
the FMA program is voluntary, and communities may elect not to apply. 
FEMA proposes to remove this sentence because it was relevant pre-BW-12 
when the programs were allocation based and each eligible State 
received an annual allocation. While the current FMA program is 
voluntary, this is not necessary to repeat in the regulations relating 
to the application process because the voluntary nature of the program 
is established in the statute and made clear in Sec.  79.6 (proposed 
Sec.  77.6), each annual NOFO, and the HMA Guidance.\58\
---------------------------------------------------------------------------

    \58\ Id.
---------------------------------------------------------------------------

    The second sentence states that communities or other subapplicants 
who choose to apply must develop applications within the timeframes and 
requirements established by FEMA and must submit applications to the 
State. FEMA proposes to replace ``State'' with ``applicant'' for 
reasons discussed above, and proposes to replace ``applications'' with 
``subapplications,'' which is the proper terminology. Subapplicants 
submit subapplications, while applicants submit applications. This is 
not a substantive change.
7. Section 79.6 (Proposed Sec.  77.6) Eligibility
i. Paragraph (a) Eligible Applicants and Subapplicants
    FEMA proposes to change the heading of paragraph (a) from 
``Eligible applicants and subapplicants'' to ``NFIP requirements'' to 
better reflect the provisions of this paragraph.
    Paragraph (a)(1) states that States, Indian Tribal governments, and 
communities participating in the NFIP may apply for planning and 
project grants and associated management costs. FEMA proposes to revise 
this paragraph to say that States, Indian Tribal governments, and 
communities must be participating in the NFIP and may not be suspended 
or withdrawn under the program. FEMA proposes to omit ``planning and 
project grants and associated management costs'' from this paragraph 
because eligible activities are covered in paragraph (c) and need not 
be listed here as well. FEMA also proposes to incorporate into 
paragraph (a)(1) the eligibility restriction for communities that are 
suspended or withdrawn under the NFIP. This requirement is currently 
listed in paragraph (a)(3), which FEMA proposes to remove. This is a 
nonsubstantive revision intended to incorporate the relevant NFIP 
participation requirements into a simplified paragraph (a)(1).
    Paragraph (2) states that States, Indian Tribal governments, and 
communities

[[Page 53483]]

participating in the NFIP may apply for SRL project grants and 
associated management costs. FEMA proposes to remove this paragraph 
because the SRL program is no longer authorized under the NFIA.
    Paragraph (3) states that communities withdrawn, suspended, or not 
participating under part 60 (Criteria for Land Management and Use) of 
the NFIP are not eligible for either the FMA or SRL programs. FEMA 
proposes to remove this paragraph because the SRL program was 
eliminated by BW-12, and the NFIP participation requirement for the FMA 
program is already covered under proposed Sec.  77.6(a)(1). While 
paragraph (3) specifically references part 60, FEMA proposes to omit 
the reference to part 60 in proposed paragraph (a)(1) because it is 
unnecessary. The reference to part 60 effectively means communities 
that are participating in the NFIP and who are not suspended or 
withdrawn under the program. FEMA intends proposed paragraph (a)(1) to 
have the same meaning, but proposes to reference the NFIP generally so 
that the meaning remains clear even if the regulations at part 60 are 
revised or renumbered.
    While current part 79 addresses NFIP requirements in terms of 
applicant and subapplicant eligibility, it does not address NFIP 
requirements specific to property eligibility. FEMA proposes to add a 
new paragraph (a)(2) to clarify that, for projects that impact 
individual structures, an NFIP policy for the structure must be in 
effect prior to the opening of the application period and be maintained 
for the life of the structure. This is consistent with the HMA 
Guidance, which explains that properties must be NFIP-insured at the 
time of the application submittal and prior to the period of 
availability or application start date and be maintained for the life 
of the structure.\59\ In the absence of such a requirement, a property 
owner could obtain an NFIP policy immediately before receiving an FMA 
award and drop the policy after taking advantage of NFIF funds. The 
establishment of a clear and measurable eligibility requirement will 
help ensure that FMA funding is awarded to policy holders who 
consistently maintain coverage for eligible structures. This 
requirement is consistent with the NFIA's statutory mandate to use 
funds for activities designed to reduce the risk of flood damage to 
structures covered under contracts for flood insurance,\60\ and is 
intended to support good stewardship of NFIF funds.
---------------------------------------------------------------------------

    \59\ See HMA Guidance, Part VIII.C.1, Eligible Properties, p. 
116.
    \60\ See 42 U.S.C. 4104c(a).
---------------------------------------------------------------------------

ii. Paragraph (b) Plan Requirement
    FEMA proposes to revise paragraph (b), Plan requirement, to remove 
the reference to the SRL program and to clarify current mitigation 
planning requirements consistent with BW-12. To be eligible for FMA 
awards, applicants and subapplicants must have a FEMA-approved 
mitigation plan that describes the mitigation activities to be carried 
out with FMA awards and provides for the reduction of flood losses to 
structures covered under the NFIP.\61\
---------------------------------------------------------------------------

    \61\ See 42 U.S.C. 4104c(b).
---------------------------------------------------------------------------

    Paragraph (1) states that States must have an approved mitigation 
plan meeting the requirements of 44 CFR 201.4 or 201.5 in order to 
apply for grants through the FMA or SRL programs. FEMA proposes to 
remove the reference to 201.5 as this section addresses enhanced State 
mitigation plans which are not necessary for eligibility. FEMA also 
proposes to revise this sentence to clarify that the plan must be 
approved by FEMA. While it is implied in part 201 that the plan must be 
approved by FEMA, it is not explicit, so FEMA proposes to add this 
clarification to avoid any potential confusion. This is not a 
substantive change and is intended only to improve clarity and 
consistency with part 201.\62\ FEMA also proposes to add language 
specifying that the FEMA-approved mitigation plan ``provides for 
reduction of flood losses to structures for which NFIP coverage is 
available'' to make the language more consistent with the current 
statutory requirement at 42 U.S.C. 4104c(b). FEMA proposes to remove 
the language ``in order to apply for grants through the FMA or SRL 
programs,'' first because the SRL is no longer authorized, and second, 
even though FMA is still an authorized program, it is not necessary 
because the regulation already makes it clear that a plan is required.
---------------------------------------------------------------------------

    \62\ See 44 CFR 201.3(b).
---------------------------------------------------------------------------

    The second sentence of paragraph (1) states that Indian Tribal 
governments must have an approved plan meeting the requirements of 44 
CFR 201.7 at the time of application. As with States, FEMA proposes to 
revise this provision to clarify that the plan must be approved by 
FEMA. While it is implied in part 201 that the plan must be approved by 
FEMA, it is not explicit, so FEMA proposes to add this clarification to 
avoid any potential confusion. FEMA proposes to add ``mitigation'' 
before ``plan'' for the sake of clarity. As with State mitigation 
plans, FEMA proposes to add language specifying that the FEMA-approved 
mitigation plan ``provides for reduction of flood losses to structures 
for which NFIP coverage is available'' to make the language more 
consistent with the current statutory requirement at 42 U.S.C. 
4104c(b). Finally, FEMA proposes to remove the language ``at the time 
of application'' and address this requirement in a separate sentence as 
described below.
    Applicants must have a FEMA-approved mitigation plan at the time of 
application and award. This comports with the NFIA, which requires 
applicants to have a FEMA-approved mitigation plan as a condition of 
eligibility for FMA awards.\63\ Currently, the regulation is silent as 
to this requirement for States. For Indian Tribal governments, the 
current regulation states only ``at the time of application.'' FEMA 
proposes to add a sentence stating that both States and Indian Tribal 
governments must have a FEMA-approved mitigation plan at the time of 
application and award. This is a nonsubstantive change intended for 
clarification purposes only.\64\
---------------------------------------------------------------------------

    \63\ See 42 U.S.C. 4104c(b).
    \64\ See HMA Guidance, Part III.E.5.1, Applicant Mitigation Plan 
Requirement, p. 45.
---------------------------------------------------------------------------

    Paragraph (2) states that in order to be eligible for FMA and SRL 
grants, subapplicants must have an approved mitigation plan at the time 
of application in accordance with 44 CFR part 201 that at a minimum 
addresses flood hazards. As with applicants, FEMA proposes to revise 
this provision to clarify that the plan must be approved by FEMA. While 
it is implied in part 201 that the plan must be approved by FEMA, it is 
not explicit, so FEMA proposes to add this clarification to avoid any 
potential confusion. Also as with applicants, FEMA proposes to add that 
the plan must provide for reduction of flood losses to structures for 
which NFIP coverage is available. FEMA proposes to remove the language 
``at a minimum, addresses flood hazards'' and replace it with the 
language ``provides for reduction of flood losses to structures for 
which NFIP coverage is available'' to make the language more consistent 
with the current statutory requirement at 42 U.S.C. 4104c(b).
    FEMA proposes to add a sentence stating that the FEMA-approved 
mitigation plan is required at the time of application and award for 
reasons described above.\65\
---------------------------------------------------------------------------

    \65\ See HMA Guidance, Part III.E.5.2, Subapplicant Mitigation 
Plan Requirement, p. 45.

---------------------------------------------------------------------------

[[Page 53484]]

    Finally, FEMA proposes to add paragraph headings to aid the reader. 
It proposes to add the header ``applicants'' for paragraph (b)(1), and 
the header ``subapplicants'' for paragraph (b)(2) to make the paragraph 
structure easier to follow.
iii. Paragraph (c) Eligible Activities
    FEMA proposes to revise paragraph (c), Eligible activities, to 
reflect the changes from BW-12.
    Paragraph (1) addresses planning and states that FMA planning 
grants are limited to those activities necessary to develop or update 
the flood portion of any mitigation plan. FEMA proposes to remove this 
sentence because the NFIA, as amended by BW-12, explicitly provides 
that a mitigation plan that provides for the reduction of flood losses 
to structures for which NFIP coverage is available may be included in a 
multi-hazard mitigation plan.\66\ FEMA proposes to remove the ``flood 
portion'' language because there may be multi-hazard mitigation plans 
that meet the statutory requirements but that do not distinguish and 
address all flood-related provisions in a separate ``flood portion'' of 
the plan. FEMA proposes to say, instead, that the plans must provide 
for reduction of flood losses to structures for which NFIP coverage is 
available. This change is intended to reflect the statutory language at 
42 U.S.C. 4104c(b).
---------------------------------------------------------------------------

    \66\ 42 U.S.C. 4104c(b).
---------------------------------------------------------------------------

    FEMA proposes to also remove the following sentence, which states 
that planning grants are not eligible for funding under the SRL 
program; as the SRL program is no longer authorized, this provision is 
no longer necessary.
    Paragraph (c)(2) addresses projects. The first sentence of the 
introductory text states that projects funded under the SRL program are 
limited to those activities that specifically reduce or eliminate flood 
damages to severe repetitive loss properties. FEMA proposes to remove 
this sentence and make necessary grammatical adjustments to this 
paragraph because the SRL program is no longer authorized.
    In paragraph (c)(2)(v), FEMA proposes to remove language that 
limits the eligibility of demolition and rebuilding of properties to 
the SRL program. The demolition and rebuilding of properties to at 
least base flood levels or higher, if required by FEMA or by State or 
local ordinance, has been an eligible activity under the FMA program 
since before BW-12's passage. FEMA implemented this provision in the 
HMA Guidance.\67\
---------------------------------------------------------------------------

    \67\ See HMA Guidance Addendum, Feb. 27, 2015, Part D, 
Mitigation Reconstruction Projects, p. 59, available at https://www.fema.gov/media-library-data/1424983165449-38f5dfc69c0bd4ea8a161e8bb7b79553/HMA_Addendum_022715_508.pdf (last 
accessed Feb. 13, 2020).
---------------------------------------------------------------------------

    Paragraph (c)(2)(vi) lists as an eligible project ``minor physical 
localized flood reduction measures'' that lessen the frequency or 
severity of flooding and decrease predicted flood damages. FEMA 
proposes to replace ``minor physical localized flood reduction 
measures'' with ``localized flood risk reduction projects.'' The 
following sentence states that ``major flood control projects'' such as 
dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-
scale waterway channelization projects are not eligible. FEMA proposes 
to replace ``major flood control projects'' with ``non-localized flood 
risk reduction projects.'' Major flood control projects are known as 
``non-localized flood risk reduction projects'' for purposes of FMA. 
FEMA proposes to replace major flood control projects with non-
localized flood risk reduction projects so that these projects are 
known by one common name. These changes are intended to ensure 
consistency between program implementation, guidance, and regulation, 
and do not impose new requirements. The terms ``localized flood risk 
reduction projects'' and ``non-localized flood risk reduction 
projects'' are used throughout the HMA Guidance.\68\
---------------------------------------------------------------------------

    \68\ See, e.g., HMA Guidance, Part III.E.1.1, Mitigation 
Projects, p. 36.
---------------------------------------------------------------------------

    BW-12 added elevation, relocation, and floodproofing of utilities 
as eligible activities.\69\ FEMA proposes to add these activities to a 
new paragraph (c)(2)(vii). These activities were implemented in the HMA 
Guidance.\70\
---------------------------------------------------------------------------

    \69\ See 42 U.S.C. 4104c(c)(3)(D), Public Law112-141, section 
100225(a)(5)(D).
    \70\ HMA Guidance, Part III.E.1.1, Mitigation Projects, pp. 34 -
35.
---------------------------------------------------------------------------

    BW-12 provides that eligible activities may include mitigation 
activities that are described in the mitigation plan of a State or 
community but not specified by statute or regulation.\71\ FEMA proposes 
to implement this provision in a new paragraph (c)(2)(viii) for 
mitigation activities described in a State, Tribal, or local mitigation 
plan that are not listed in paragraphs (c)(2)(i) through (vii). This 
flexibility is important because it allows FEMA to consider innovative 
or novel projects that are consistent with the goals of the FMA program 
but are not specifically identified in statute or regulation. This is a 
nonsubstantive change; FEMA has already implemented this provision in 
the HMA Guidance.\72\
---------------------------------------------------------------------------

    \71\ See 42 U.S.C. 4104c(c)(3)(I).
    \72\ HMA Guidance, Part III.E.1.1, Mitigation Projects, p. 38.
---------------------------------------------------------------------------

    BW-12 provides that if a State applied for and was awarded at least 
$1,000,000 in FMA grants in the prior fiscal year, FEMA may provide 
funding for technical assistance to communities not to exceed $50,000 
per State in any fiscal year to identify eligible activities, to 
develop grant applications, and to implement FMA grants.\73\ FEMA 
proposes to add new paragraph (c)(3) to implement this provision. The 
new paragraph would state that if a recipient applied for and was 
awarded at least $1 million in the prior fiscal year, that recipient 
may be eligible to receive a technical assistance grant for up to 
$50,000. FEMA has already implemented this provision in the HMA 
Guidance.\74\ The HMA Guidance lists potential eligible activities 
under this grant, such as promoting FMA to communities, visiting sites 
with communities/applicants, developing and reviewing project 
applications and mitigation plans, participating in planning meetings, 
providing planning workshops and materials, performing benefit cost 
analyses and providing grants management workshops and materials, 
funding (in part) salaries and expenses of staff working to develop, 
review, monitor, and close FMA grants.\75\
---------------------------------------------------------------------------

    \73\ See 42 U.S.C. 4104c(c)(3)(J).
    \74\ HMA Guidance, Part III.E.1.4, Technical Assistance, pp. 40-
41.
    \75\ Id.
---------------------------------------------------------------------------

iv. Paragraph (d) Minimum Project Criteria
    Paragraph (d) addresses minimum project criteria which lists 
specific criteria FMA grant projects must meet in addition to being an 
eligible project type as described in paragraph (c). Paragraph (d)(1) 
states that projects must be in conformance with mitigation plans 
approved under 44 CFR part 201 for the State and community where the 
project is located. FEMA proposes to revise this provision for the sake 
of clarity, to state that projects must be in conformance with ``State, 
Tribal, and/or local'' mitigation plans approved under part 201 for the 
``jurisdiction'' where the project is located.
    Paragraph (d)(2) states that projects must be in conformance with 
part 9 of this chapter, Floodplain Management and Protection of 
Wetlands, Sec.  60.3 of this subchapter, Flood plain management 
criteria for floodprone areas, and other applicable Federal, State, 
Tribal, and local laws and regulations. FEMA proposes to revise

[[Page 53485]]

this provision to state that the project must be in conformance with 
applicable environmental and historic preservation laws, regulations, 
and agency policy, including parts 9 and 60 of this chapter, and other 
applicable Federal, State, Tribal, and local laws and regulations. FEMA 
proposes to remove the reference to Sec.  60.3 and replace it with a 
more general reference to part 60, which captures additional 
requirements that fall under current paragraph (d)(2). FEMA also 
proposes to emphasize that projects must be in conformance ``with 
applicable environmental and historic preservation laws, regulations, 
and agency policy,'' which includes FEMA regulations at parts 9 and 60. 
Applicable environmental and historic preservation requirements also 
include the requirements in DHS Directive and Instruction 023-01, 
``Implementation of the National Environmental Policy Act,'' and FEMA 
Directive and Instruction 108-1, ``Environmental Planning and Historic 
Preservation Responsibilities and Program Requirements.'' \76\ This is 
a nonsubstantive change intended to capture all applicable legal 
requirements and to highlight applicable environmental and historic 
preservation requirements, which are particularly relevant to the 
implementation of mitigation grants.\77\
---------------------------------------------------------------------------

    \76\ See 81 FR 56514 and 81 FR 56682.
    \77\ See HMA Guidance, Part III.E.6, Environmental Planning and 
Historic Preservation Requirements, pp. 47-48.
---------------------------------------------------------------------------

    Paragraph (d)(3) states that mitigation grant projects must ``be 
technically feasible.'' Under the NFIA, as amended by BW-12, mitigation 
projects must be ``technically feasible and cost-effective'' or 
``eliminate future payments from the [NFIF] for severe repetitive loss 
structures through an acquisition or relocation activity.'' \78\ FEMA 
proposes to add to paragraph (d)(3) ``and cost-effective; or, eliminate 
future payments from the NFIF for severe repetitive loss structures 
through an acquisition or relocation activity.'' FEMA proposes this 
revision to capture all of the statutory requirements in 42 U.S.C. 
4104c(c)(2)(A) in the same regulatory provision. This is not a 
substantive change; FEMA had already implemented this provision prior 
to BW-12.\79\
---------------------------------------------------------------------------

    \78\ 42 U.S.C. 4104c(c)(2)(A).
    \79\ HMA Guidance, Part III.E.3, Cost Effectiveness, and Part 
III.E.4, Feasibility and Effectiveness, p.44.
---------------------------------------------------------------------------

    Paragraph (d)(5) states that the project must be cost effective and 
reduce the risk of future flood damage. FEMA proposes to remove this 
paragraph because cost-effectiveness is addressed in the proposed 
revisions to paragraph (d)(3). Proposed paragraph (d)(3) does not 
include the language ``reduce the risk for future flood damage'' 
because FEMA is proposing language that mirrors the statutory provision 
at 42 U.S.C. 4104c(c)(2)(A)(ii), as explained above.
    Finally, FEMA proposes to replace ``subgrantee'' with 
``subrecipient'' in current paragraph (d)(6) to reflect the terminology 
in 2 CFR part 200, and to redesignate current paragraph (d)(6) as 
paragraph (d)(5), and current paragraph (d)(7) as paragraph (d)(6).
8. Section 79.7 Offers and Appeals Under the SRL Program
    Section 79.7 deals solely with the SRL program, which is no longer 
authorized under the NFIA. Accordingly, FEMA proposes to remove this 
section in its entirety.
9. Section 79.8 (Proposed Sec.  77.8) Allowable Costs
    This section addresses allowable costs under the FMA program. 
Paragraph (a)'s introductory text states that general policies for 
allowable costs are addressed in 2 CFR 200.101, 200.102, 200.400-
200.475. FEMA proposes to revise this provision to clarify that the 
allowable costs are ``for implementing awards and subawards.'' This is 
a nonsubstantive change.
    Paragraph (a)(1) is entitled ``Eligible management costs.'' 
Paragraph (a)(1)(i) is entitled ``grantee.'' FEMA proposes to replace 
``grantee'' with ``recipient'' to reflect the updated terminology in 2 
CFR part 200. The first sentence of paragraph (a)(1)(i) states that 
States are eligible to receive management costs consisting of a maximum 
of 10 percent of the planning and project activities awarded to the 
State, each fiscal year under FMA and SRL, respectively. FEMA proposes 
to replace ``State(s)'' with ``recipient(s)'' to reflect the 
terminology in 2 CFR part 200 and to capture all possible applicants 
(States (including territories) and Indian Tribal governments).\80\ 
FEMA proposes to remove the reference to the SRL program, which is no 
longer authorized under the NFIA. The last sentence states that an 
Indian Tribal government applying directly to FEMA is eligible for 
management costs consisting of a maximum of 10 percent of grants 
awarded for planning and project activities under the SRL and FMA 
programs respectively. FEMA proposes to remove this sentence as it 
would no longer be necessary under the proposed revisions to this 
paragraph, which replaces ``States'' with ``recipients.'' The term 
``recipients'' includes Indian Tribal governments.
---------------------------------------------------------------------------

    \80\ See proposed 77.2(i).
---------------------------------------------------------------------------

    FEMA proposes to replace the header of paragraph (a)(1)(ii), 
``subgrantee,'' with ``subrecipient'' to reflect the terminology in 2 
CFR part 200. FEMA proposes to replace the term ``State'' with 
``recipient'' to capture the full universe of entities to which a 
subapplicant may apply (States (including territories) and Indian 
Tribal governments).
    Paragraph (a)(2) is entitled ``Indirect Costs.'' FEMA proposes to 
remove the reference to the SRL program, as the program is no longer 
authorized under the NFIA. FEMA proposes to replace ``grantee'' with 
``recipient'' and ``subgrantee'' with ``subrecipient'' to reflect the 
terminology in 2 CFR part 200.
    Paragraph (b) is entitled ``Pre-award costs.'' The first sentence 
states that FEMA may fund eligible pre-award planning or project costs 
at its discretion and as funds are available. FEMA proposes to revise 
this sentence to state that FEMA may fund eligible pre-award costs 
related to developing the application or subapplication at its 
discretion and as funds are available. FEMA interprets ``pre-award 
planning or project costs'' to mean pre-award costs related to 
developing an application or subapplication. This revision is intended 
to clarify the regulatory language, consistent with FEMA's 
interpretation established in the HMA Guidance, and is not a 
substantive change.\81\ FEMA proposes to replace ``grantees'' with 
``recipients'' and ``subgrantees'' with ``subrecipients'' to reflect 
the terminology in 2 CFR part 200. Finally, FEMA proposes to make 
nonsubstantive grammatical changes to reflect that this section applies 
just to FMA grants, and proposes to replace the phrase ``incurred prior 
to grant award'' with ``incurred prior to award'' as the word ``grant'' 
is not necessary.
---------------------------------------------------------------------------

    \81\ See HMA Guidance, Part IV.F.2, Pre-award costs, p. 55.
---------------------------------------------------------------------------

    Paragraph (c) is entitled ``Duplication of Benefits.'' FEMA 
proposes to replace ``grantee'' with ``recipient'' and ``subgrant 
award'' with ``subaward'' to reflect the terminology in 2 CFR part 200.
10. Section 79.9 (Proposed Sec.  77.9) Grant Administration
    Paragraph (a) states that the grantee must follow FEMA grant 
requirements, including submission of performance and financial status 
reports, and shall follow adequate competitive procurement procedures, 
and that grantees are responsible for ensuring

[[Page 53486]]

that all subgrantees are aware of and follow the requirements of 2 CFR 
parts 200 and 3002. Finally, it states that the grantee must follow 
FEMA grant requirements, including submission of performance and 
financial status reports. FEMA proposes to revise this paragraph for a 
more streamlined approach and to eliminate some of the repetition in 
the current paragraph. Accordingly, FEMA proposes to revise paragraph 
(a) to state that recipients must comply with the requirements of 2 CFR 
parts 200 and 3002, and FEMA award requirements, including submission 
of performance and financial status reports, and that recipients must 
also ensure that subrecipients are aware of and comply with 2 CFR parts 
200 and 3002. Finally, FEMA proposes to add a header to paragraph (a), 
entitled ``General,'' to distinguish it from the other paragraphs and 
for the ease of the reader. These are nonsubstantive changes.
    FEMA proposes to add a header to paragraph (b), ``Cost overruns,'' 
for the ease of the reader. In paragraph (b)'s introductory text, FEMA 
proposes to replace ``State POC'' with ``recipient'' to capture the 
universe of all possible recipients (States (including territories) and 
Indian Tribal governments). FEMA proposes to redesignate the 
introductory text of paragraph (b) as paragraph (b)(1), and to 
redesignate paragraph (b)(1) as (b)(1)(i), and paragraph (b)(2) as 
(b)(1)(ii). Current paragraph (b)(2) (proposed paragraph (b)(1)(ii)), 
which lists one of the requirements for reimbursement of an overrun, 
states that the amended grant award must meet the cost share 
requirements identified in this section. FEMA proposes to revise this 
to state that the amended grant award must meet the eligibility 
requirements, including cost share requirements, identified in this 
section. FEMA proposes this change to capture all eligibility 
requirements, including but not limited to cost share requirements. 
This is a nonsubstantive change, because all FMA eligibility 
requirements apply to amended grant awards, and is consistent with the 
HMA Guidance.\82\
---------------------------------------------------------------------------

    \82\ See HMA Guidance, Part IV.D.3.3, Cost overruns and 
Underruns, p. 85.
---------------------------------------------------------------------------

    Paragraph (b)(3) limits cost overrun reimbursements so that the 
total amount obligated to the State does not exceed the maximum funding 
amounts set in Sec.  79.4(a)(2). FEMA proposes to remove this provision 
because BW-12 eliminated automatic allocations under the FMA program 
and the NFIA no longer establishes maximum funding amounts for project 
awards.\83\
---------------------------------------------------------------------------

    \83\ See discussion supra regarding the proposed revisions to 
Sec.  79.4 (proposed Sec.  77.4).
---------------------------------------------------------------------------

    Current paragraph (c) addresses the ability of grantees to use cost 
underruns to offset overruns in other awards. FEMA proposes to 
redesignate paragraph (c) as paragraph (b)(2), since it more 
appropriately belongs in the paragraph on cost overruns rather than as 
a stand-alone paragraph. The first sentence of current paragraph (c) 
(proposed paragraph (b)(2)) states that grantees may use cost underruns 
from ongoing subawards to offset overruns incurred by another 
subgrant(s) awarded under the same grant. FEMA proposes to replace 
``grantees'' with ``recipients'' and ``subgrants'' with ``subawards'' 
to reflect the terminology in 2 CFR part 200, and to replace the final 
word of the sentence (``grant'') with ``award.'' These are 
nonsubstantive changes. The second sentence of current paragraph (c) 
(proposed paragraph (b)(2)) states that all costs for which funding is 
requested must have been included in the original application's cost 
estimate. FEMA proposes to replace ``application'' with 
``subapplication'' because the need for an overrun is at the subaward 
level. This is a nonsubstantive change for clarification purposes--the 
program currently applies this to the subapplication amount for a 
specific project, not the application amount which encompasses all 
projects under the recipient's award. FEMA proposes to add that in 
cases where an underrun is not available to cover an overrun, the 
Administrator may, with justification from the recipient or 
subrecipient, use other available FMA funds to cover the cost overrun. 
FEMA implements this practice pursuant to 42 U.S.C. 4104c(c)(1), which 
requires FEMA to provide FMA assistance to the extent amounts are 
available in the NFIF pursuant to appropriation Acts, subject only to 
the absence of approvable mitigation plans. This practice is consistent 
with the HMA Guidance which provides that ``[t]he pass-through entity 
may request additional Federal funds for identified overruns, which 
FEMA may approve if program funds are available.'' \84\ This 
flexibility allows FEMA and recipients to address unanticipated needs.
---------------------------------------------------------------------------

    \84\ See HMA Guidance, Part VI.D.3.3, Cost overruns and 
Underruns, p. 85.
---------------------------------------------------------------------------

    Current paragraph (d) addresses the requirement that the request 
for an overrun be in writing to the FEMA Regional Administrator. FEMA 
proposes to redesignate this paragraph as paragraph (b)(3), as it 
appropriately belongs in the paragraph that addresses overruns rather 
than as a stand-alone paragraph. FEMA proposes to replace ``grant'' 
with ``award'' for the sake of clarity, and to replace ``State POC'' 
with ``recipient'' to capture the universe of potential recipients 
(States (including territories) and Indian Tribal governments). FEMA 
proposes to replace ``shall'' with ``must'' and ``will'' pursuant to 
the Office of the Federal Register's Principles of Clear Writing.\85\
---------------------------------------------------------------------------

    \85\ https://www.archives.gov/federal-register/write/legal-docs/clear-writing.html.
---------------------------------------------------------------------------

    Current paragraph (e) addresses the circumstances under which FEMA 
recaptures funds. FEMA proposes to redesignate this paragraph as 
paragraph (c) and to add a paragraph heading ``Recapture'' for the ease 
of the reader. FEMA proposes to replace ``these programs'' with ``this 
part'' for the sake of clarity.
    FEMA proposes to add a new paragraph (d) to address remedies for 
noncompliance, consistent with 2 CFR part 200. FEMA proposes to add 
that FEMA may terminate an award or take other remedies for 
noncompliance in accordance with 2 CFR 200.338 through 200.342.
    Finally, FEMA proposes to add a new paragraph (e) to address the 
reconsideration process under the FMA program. FEMA proposes to state 
that it will reconsider determinations of noncompliance, additional 
award conditions, or its decision to terminate a Federal award. 
Requests for reconsideration must be made in writing within 60 calendar 
days after receipt of a notice of the action, and in accordance with 
submission procedures set out in guidance. FEMA will notify the 
requester of the disposition of the request for reconsideration. If the 
decision is to grant the request for reconsideration, FEMA will take 
appropriate implementing action. FEMA proposes to add these provisions 
to reflect the existing opportunity to request reconsideration \86\ and 
the procedures for when a recipient/subrecipient challenges a remedy 
for noncompliance, as required by 2 CFR 200.341.\87\ FEMA believes that 
a 60 calendar day deadline for submitting requests for reconsideration 
is appropriate and consistent with the

[[Page 53487]]

amount of time provided to submit appeals or requests for 
reconsideration in other FEMA programs.\88\ This is a nonsubstantive 
change that codifies current practice.
---------------------------------------------------------------------------

    \86\ See HMA Guidance, Part V.B.3, Reconsideration Process, p. 
77.
    \87\ See 2 CFR 200.341, Opportunities to object, hearings and 
appeals, providing that ``[U]pon taking any remedy for non-
compliance, the Federal awarding agency must provide the non-Federal 
entity an opportunity to object and provide information and 
documentation challenging the suspension or termination action, in 
accordance with written processes and procedures published by the 
Federal awarding agency.''
    \88\ See, e.g., 44 CFR 206.101(m), 206.115(a), 206.171(f)(5), 
206.204(e)(2), 206.206(c), and 206.366(d)(4).
---------------------------------------------------------------------------

C. 44 CFR part 80, Property Acquisition and Relocation for Open Space

    Throughout part 80,\89\ FEMA proposes to replace outdated terms and 
definitions with substantively similar terms and definitions that 
better align with 2 CFR part 200 and the HMA Guidance. These are 
nonsubstantive revisions intended to simplify definitions and improve 
consistency among FEMA's HMA programs. FEMA also proposes to replace 
the word ``shall'' with the word ``will'' or ``must,'' as appropriate, 
and to remove references to the SRL program.
---------------------------------------------------------------------------

    \89\ See, e.g., Sec. Sec.  80.5 (Roles and responsibilities), 
80.9 (Eligible and ineligible costs), 80.11 (Project eligibility), 
80.13 (Application information), 80.17 (Project implementation), 
80.19 (Land use and oversight), and 80.21 (Closeout requirements).
---------------------------------------------------------------------------

1. Part 80 Authority
    FEMA proposes to revise the authority citation for part 80 to 
remove historical authorities relating to FEMA's organization. FEMA 
proposes to remove the references to the Reorganization Plan No. 3 of 
1978, Executive Order 12127, Executive Order 12148, and Executive Order 
13286. The Reorganization Plan and Executive Orders 12127 and 12148 
established FEMA as an agency in 1979 and established its functions. 
Executive Order 13286 revised Executive Order 12148 and transferred 
some of FEMA's authorities to DHS. The Homeland Security Act of 2002, 6 
U.S.C. 101 et seq., superseded previous organizational authorities and 
provided organic authority for FEMA as a component agency of DHS. FEMA 
proposes to remove the superseded authorities and retain the citation 
to the Homeland Security Act of 2002.
2. Section 80.3 Definitions
    FEMA proposes nonsubstantive revisions to simplify definitions and 
improve consistency among FEMA's HMA programs. FEMA proposes to 
simplify the definition of ``market value'' to provide clearer meaning 
and reflect the definition found in widely recognized resources.\90\
---------------------------------------------------------------------------

    \90\ See, e.g, The Law Dictionary, Black's Law Dictionary Free 
Online Legal Dictionary, 2nd ed.; West's Encyclopedia of American 
Law, 2nd ed.
---------------------------------------------------------------------------

    FEMA proposes to add a definition for ``Federal award'' to reflect 
the definition in 2 CFR part 200. FEMA's proposed definition is similar 
to the definition in 2 CFR 200.38(a)(1),\91\ with two exceptions. 
First, FEMA's proposed definition uses the terms ``recipients'' and 
``subrecipients'' instead of the term ``non-Federal entities.'' The 
term ``non-Federal entity,'' as defined at 2 CFR 200.69, includes 
entities that are not eligible recipients or subrecipients under all of 
FEMA's HMA programs. While all HMA recipients and subrecipients are 
``non-Federal entities'' under 2 CFR part 200, FEMA proposes to tailor 
the definitions in part 80 so that they are program-specific and work 
when read in conjunction with the regulations for the FMA Program and 
HMGP. Second, FEMA proposes to add a sentence to the definition to 
clarify that the terms ``award'' and ``grant'' may also be used to 
describe a ``Federal award.'' This is a nonsubstantive change to make 
it clear that the terms are interchangeable.
---------------------------------------------------------------------------

    \91\ 2 CFR 200.38(a)(1) (the Federal financial assistance that a 
non-Federal entity receives directly from a Federal awarding agency 
or indirectly from a pass-through entity).
---------------------------------------------------------------------------

    FEMA proposes to add a definition for ``pass-through entity'' to 
reflect the definition in 2 CFR part 200. FEMA's proposed definition of 
``pass-through entity'' is substantively the same as the definition in 
2 CFR 200.74, with one exception. FEMA's proposed definition uses the 
terms ``recipients'' and ``subrecipients'' instead of the term ``non-
Federal entities.'' The term ``non-Federal entity,'' as defined at 2 
CFR 200.69, includes entities that are not eligible recipients or 
subrecipients under all of FEMA's HMA programs. While all HMA 
recipients and subrecipients are ``non-Federal entities'' under 2 CFR 
part 200, FEMA proposes to tailor the definitions in part 80 so that 
they are program-specific and work when read in conjunction with the 
regulations for the FMA Program and HMGP.
    FEMA proposes to replace the definitions ``grantee,'' ``subgrant,'' 
and ``subgrantee,'' with definitions for ``recipient,'' ``subaward,'' 
and ``subrecipient,'' respectively, to better align with the terms and 
definitions used in 2 CFR part 200 and the HMA Guidance. The proposed 
definition of ``recipient'' is similar to the definition at 2 CFR 
200.86; however, FEMA proposes to use the terms ``State or Indian 
Tribal government'' instead of the term ``non-Federal entity'' to 
reflect the terms and definitions in this proposed rule, which are 
tailored to part 80 and reflect which entities are eligible recipients 
for purposes of part 80. The proposed definition of ``subaward'' is 
similar to the definition at 2 CFR 200.92; however, FEMA proposes to 
use the terms ``recipient'' and ``subrecipient'' instead of the term 
``non-Federal entity'' to reflect the terms and definitions in this 
proposed rule, which are tailored to part 80. The proposed definition 
of ``subrecipient'' is similar to the definition at 2 CFR 200.93; 
however, FEMA proposes to use the terms ``State agency, community, or 
Indian Tribal government'' instead of the term ``non-Federal entity'' 
to reflect which entities are eligible subrecipients for purposes of 
part 80.
    Finally, FEMA proposes to revise the definitions of ``applicant'' 
and ``subapplicant.'' FEMA proposes to replace the term ``grant'' in 
the current definition of ``applicant'' with the term ``Federal 
award.'' This is a nonsubstantive change to use the newly defined term 
``Federal award'' (proposed Sec.  80.3(c)) throughout the definitions. 
FEMA also proposes to add that once funds have been awarded, the 
applicant becomes the recipient and may also be a pass-through entity. 
This is a nonsubstantive addition to clarify the relationship between 
the terms ``applicant,'' ``recipient,'' and ``pass-through entity'' for 
the ease of the reader. FEMA proposes to revise the definition of 
``subapplicant'' to replace ``grantee'' with ``recipient'' and 
``subgrantee'' with ``subrecipient'' to reflect the terms and 
definitions in this proposed rule, which are tailored to part 80. FEMA 
proposes to make conforming amendments to these terms throughout part 
80.
3. Section 80.13 Application Information
    In paragraph (a)(3), FEMA proposes to replace ``FEMA's Office of 
General Counsel'' with ``FEMA's Office of Chief Counsel.'' This is a 
nonsubstantive change intended to reflect FEMA's current organizational 
structure (FEMA's Office of General Counsel became the Office of Chief 
Counsel when FEMA became a component of DHS).
4. Section 80.19 Land Use and Oversight
    In addition to replacing outdated terms with substantively similar 
terms that better align with 2 CFR part 200 and the HMA Guidance (i.e., 
replacing ``grantee'' with ``recipient,'' etc.), FEMA proposes in 
paragraph (e) to move the sentence in (e)(1)(i) to paragraph (e)(1), 
and redesignate paragraphs (e)(1)(ii), and (e)(1)(ii)(A) through (C) as 
(e)(2), and (e)(2)(i) through (iii), respectively. This nonsubstantive 
redesignation is intended to conform this section to the

[[Page 53488]]

regulatory drafting principle of proper subordination (e.g., it is 
improper to have an (e)(1) where there is not an (e)(2)).
5. Section 80.21 Closeout Requirements
    In paragraph (d), FEMA proposes to replace the word ``property'' 
with the word ``structure'' to conform to the definition of 
``repetitive loss structure'' provided in BW-12 and proposed Sec.  
77.2, discussed above.

D. 44 CFR Part 201, Mitigation Planning

    FEMA proposes to replace outdated terms and definitions throughout 
part 201 with substantively similar terms and definitions that better 
align with 2 CFR part 200 and the HMA and Mitigation Planning programs 
guidance documents. These are nonsubstantive revisions intended to 
simplify definitions and improve consistency among FEMA's HMA and 
Mitigation Planning programs. FEMA also proposes to replace the word 
``shall'' with the word ``will'' or ``must,'' as appropriate.
1. Part 201 Authority
    FEMA proposes to revise the authority citation for part 201 to 
remove historical authorities relating to FEMA's organization. FEMA 
proposes to remove the references to the Reorganization Plan No. 3 of 
1978, Executive Order 12127, Executive Order 12148, and Executive Order 
13286. The Reorganization Plan and Executive Orders 12127 and 12148 
established FEMA as an agency in 1979 and established its functions. 
Executive Order 13286 revised Executive Order 12148 and transferred 
some of FEMA's authorities to DHS. The Homeland Security Act of 2002, 6 
U.S.C. 101 et seq., superseded previous organizational authorities and 
provided organic authority for FEMA as a component agency of DHS. FEMA 
proposes to remove the superseded authorities and retain the citation 
to the Homeland Security Act of 2002.
2. Section 201.1 Purpose
    FEMA proposes to replace the word ``polices'' with ``policies'' in 
paragraph 201.1(a) as the word ``polices'' is a typographical error.
3. Section 201.2 Definitions
    FEMA proposes to revise the definition of ``severe repetitive 
loss'' properties and to add a new definition for ``repetitive loss 
structure'' to reflect the definitions provided in BW-12 and proposed 
in this rulemaking.\92\ FEMA proposes to remove the definitions of the 
``repetitive flood claims'' and ``severe repetitive loss'' programs as 
BW-12 eliminated the RFC and SRL programs.
---------------------------------------------------------------------------

    \92\ 42 U.S.C. 4104c(h), 4121(a)(7); proposed 44 CFR 77.2.
---------------------------------------------------------------------------

    FEMA proposes to add definitions for the terms ``applicant'' and 
``subapplicant'' to reflect the terms and definitions in proposed Sec.  
77.2. FEMA also proposes to add new definitions for ``Federal award'' 
and ``pass-through Entity'' to reflect the definitions in 2 CFR part 
200. FEMA's proposed definition of ``Federal award'' is similar to the 
definition in 2 CFR 200.38(a)(1),\93\ with two exceptions. First, 
FEMA's proposed definition uses the terms ``recipients'' and 
``subrecipients'' instead of the term ``non-Federal entities.'' The 
term ``non-Federal entity,'' as defined at 2 CFR 200.69, includes 
entities that are not eligible recipients or subrecipients under FEMA's 
HMA programs. While FMA recipients and subrecipients are ``non-Federal 
entities'' under 2 CFR part 200, FEMA proposes to tailor the 
definitions so that they work in conjunction with the regulations for 
the FMA program and HMGP. Second, FEMA proposes to add a sentence to 
the definition to clarify that the terms ``award'' and ``grant'' may 
also be used to describe a ``Federal award'' under the FMA program 
regulations. This is a nonsubstantive change to make it clear that the 
terms are interchangeable. FEMA proposes to add a definition for 
``pass-through entity'' to reflect the definition in 2 CFR part 200. 
FEMA's proposed definition of ``pass-through entity'' is substantively 
the same as the definition in 2 CFR 200.74, with one exception. FEMA's 
proposed definition uses the terms ``recipients'' and ``subrecipients'' 
instead of the term ``non-Federal entities.'' The term ``non-Federal 
entity,'' as defined at 2 CFR 200.69, includes entities that are not 
eligible recipients or subrecipients under FEMA's HMA programs. While 
all HMA recipients and subrecipients are ``non-Federal entities'' under 
2 CFR part 200, FEMA proposes to tailor the definitions so that they 
work in conjunction with regulations for the FMA program and HMGP.
---------------------------------------------------------------------------

    \93\ 2 CFR 200.38(a)(1) (the Federal financial assistance that a 
non-Federal entity receives directly from a Federal awarding agency 
or indirectly from a pass-through entity).
---------------------------------------------------------------------------

    FEMA proposes to replace the definitions of ``grantee'' and 
``subgrantee'' with definitions for ``recipient'' and ``subrecipient,'' 
respectively, to better align with the terms and definitions used in 2 
CFR part 200 and the HMA Guidance. The proposed definition of 
``recipient'' is similar to the definition at 2 CFR 200.86; however, 
FEMA proposes to use the terms ``State or Indian Tribal government'' 
instead of the term ``non-Federal entity'' to reflect the terms and 
definitions in this proposed rule, which are tailored to part 201 and 
reflect which entities are eligible recipients for purposes of part 
201. The proposed definition of ``subrecipient'' is similar to the 
definition at 2 CFR 200.93; however, FEMA proposes to specify which 
entities are eligible subrecipients for purposes of part 201. Depending 
on the program, subrecipients of hazard mitigation assistance subawards 
can be a State agency, local government, private nonprofit 
organization, or Indian Tribal government. Subrecipients of FMA 
subawards can be a State agency, community, or Indian Tribal 
government, as described in 44 CFR part 77. Finally, FEMA proposes to 
add a definition of ``subaward'' similar to the definition at 2 CFR 
200.92; however, FEMA proposes to use the terms ``recipient'' and 
``subrecipient'' instead of the term ``non-Federal entity'' to reflect 
the terms and definitions tailored to part 201 in this proposed rule.
4. Section 201.3 Responsibilities
    FEMA proposes to revise paragraph (c)(1) to reflect the elimination 
of the SRL program and to conform to the mitigation planning 
requirements proposed in this rulemaking. See proposed 44 CFR 77.6. The 
last sentence of paragraph (c)(1) would be removed and replaced with a 
sentence describing the mitigation plan requirement in proposed Sec.  
77.6(b). See proposed 44 CFR 201.3(c)(1). FEMA proposes similar 
revisions to paragraph (e)(1). The last two sentences of paragraph 
(e)(1) would be removed and replaced with a sentence describing the 
mitigation plan requirement in proposed Sec.  77.6(b). See proposed 44 
CFR 201.3(e)(1).
5. Section 201.4 Standard State Mitigation Plans
    FEMA proposes to revise paragraph (c)(3)(v) to reflect the 
elimination of the SRL program and to conform to the mitigation 
planning requirements proposed in this rulemaking. See proposed 44 CFR 
77.6. The current language would be removed and replaced with a 
sentence describing the mitigation plan requirement found in proposed 
Sec.  77.6(b). See proposed 44 CFR 201.4(c)(3)(v). In paragraph 
(c)(4)(iii), FEMA proposes to replace the word ``properties'' with the 
word ``structures'' to reflect the definition of ``repetitive loss 
structure'' used in BW-12 and proposed Sec.  77.2.

[[Page 53489]]

6. Section 201.6 Local Mitigation Plans
    In Sec.  201.6(a)(1), FEMA proposes to remove the reference to the 
RFC program, which was eliminated by BW-12.
7. Section 201.7 Tribal Mitigation Plans
    FEMA proposes to revise Sec.  201.7 to reflect the elimination of 
the SRL and RFC programs and to conform to the mitigation planning 
requirements proposed in this rulemaking. See proposed 44 CFR 77.6. 
FEMA proposes to remove paragraph (a)(2) to reflect the elimination of 
the SRL program and to remove the reference to the RFC program in 
paragraph (a)(3). FEMA proposes to redesignate current paragraphs 
(a)(3) and (4) as (a)(2) and (3), respectively. The language in current 
paragraph (c)(3)(vi) would be removed and replaced with a sentence 
describing the mitigation plan requirement in proposed Sec.  77.6(b). 
See proposed 44 CFR 201.7(c)(3)(vi).

E. 44 CFR part 206 Subpart N, Hazard Mitigation Grant Program

    Throughout part 206,\94\ FEMA proposes to replace outdated terms 
and definitions with substantively similar terms and definitions that 
better align with 2 CFR part 200 and the HMA guidance. These are 
nonsubstantive revisions intended to simplify definitions and improve 
consistency among FEMA's HMA programs. FEMA also proposes to replace 
the word ``shall'' with the word ``will'' or ``must,'' as appropriate.
---------------------------------------------------------------------------

    \94\ See, e.g., Sec. Sec.  206.433 (State responsibilities), 
206.435 (Project identification and selection criteria), 206.436 
(Application procedures), 206.437 (State Administrative Plan), 
206.438 (Project management), 206.439 (Allowable costs), and 206.440 
(Appeals).
---------------------------------------------------------------------------

1. Section 206.431 Definitions
    FEMA proposes to add a definition for ``pass-through entity'' to 
reflect the definition in 2 CFR part 200. FEMA's proposed definition of 
``pass-through entity'' is substantively the same as the definition in 
2 CFR 200.74, with one exception. FEMA's proposed definition uses the 
terms ``recipients'' and ``subrecipients'' instead of the term ``non-
Federal entities.'' The term ``non-Federal entity,'' as defined at 2 
CFR 200.69, includes entities that are not eligible recipients or 
subrecipients under HMGP. While all HMGP recipients and subrecipients 
are ``non-Federal entities'' under 2 CFR part 200, FEMA proposes to 
tailor the definitions in part 206 subpart N so that they are program-
specific and work when read in conjunction with the HMA-related 
regulations in parts 79 (proposed part 77), 80, and 201.
    FEMA proposes to replace the definitions ``grantee,'' ``subgrant,'' 
and ``subgrantee,'' with definitions for ``recipient,'' ``subaward,'' 
and ``subrecipient,'' respectively, to better align with the terms and 
definitions used in 2 CFR part 200 and the HMA Guidance. The proposed 
definition of ``recipient'' is similar to the definition at 2 CFR 
200.86; however, FEMA proposes to use the terms ``State or Indian 
Tribal government'' instead of the term ``non-Federal entity'' to 
reflect the terms and definitions in this proposed rule, which are 
tailored to reflect which entities are eligible recipients of HMGP. The 
proposed definition of ``subaward'' is similar to the definition at 2 
CFR 200.92; however, FEMA proposes to use the terms ``recipient'' and 
``subrecipient'' instead of the term ``non-Federal entity'' to reflect 
the terms and definitions in this proposed rule, which are tailored to 
the HMGP regulations. The proposed definition of ``subrecipient'' is 
similar to the definition at 2 CFR 200.93; however, instead of the term 
``non-Federal entity,'' FEMA proposes to keep the language explaining 
which entities are eligible subrecipients of HMGP. FEMA proposes to 
make conforming amendments to these terms throughout part 206 subpart 
N.
    FEMA also proposes to revise the definitions of ``applicant'' and 
``Indian Tribal government'' and add a definition for ``subapplicant.'' 
Section 206.431 currently defines ``applicant'' as a State agency, 
local government, Indian Tribal government, or eligible private 
nonprofit organization, submitting an application to the grantee for 
assistance under the HMGP. FEMA proposes to clarify that an 
``applicant'' is the non-Federal entity consisting of a State or Indian 
Tribal government, applying to FEMA for a Federal award under HMGP, and 
that upon award, the applicant becomes the recipient and may also be a 
pass-through entity. FEMA proposes this revision because the current 
definition mistakenly includes local governments and private nonprofit 
organizations (they are subapplicants, not applicants) and applicants 
do not submit an application to a recipient, but rather to FEMA. FEMA 
proposes to add a sentence to the end of the current definition of 
``Indian Tribal government'' to clarify that Indian Tribal governments 
have the option to apply as an applicant or subapplicant. Lastly, 
FEMA's proposed definition for ``subapplicant'' would clarify that it 
means the State agency, local government, eligible private nonprofit 
organization, or Indian Tribal government submitting a subapplication 
to the applicant for financial assistance under HMGP, and that upon 
award, the subapplicant becomes the subrecipient. FEMA proposes adding 
this definition to more clearly distinguish the entities which may be 
subapplicants from those which may be applicants.
2. Section 206.432 Federal Grant Assistance
    FEMA proposes to revise 206.432(b), Amounts of Assistance, to 
remove the references to specific sections of the Stafford Act. 
Pursuant to 42 U.S.C. 5170c(a), the total contributions for HMGP in 
each disaster should be based upon the estimated aggregate amount of 
grants to be made under the Stafford Act for the major disaster. 
Although 42 U.S.C. 5170c originally specified that the total should be 
based on the estimated aggregate amount of grants to be made under 
Section 406 of the Act,\95\ Congress later amended this provision to 
remove the specific section reference.\96\ FEMA included specific 
section references when it promulgated the HMGP regulations in 1990 to 
reflect the level of specificity in the statute at that time.\97\ FEMA 
subsequently revised 206.432(b) to include additional sections of the 
Stafford Act under which major disaster assistance is made.\98\ 
However, this approach requires FEMA to update 206.432(b) whenever 
statutory amendments change the section numbers or authorize assistance 
under new sections of the Act.\99\ FEMA now proposes to remove specific 
section references from 206.432(b) so that the regulation mirrors the 
statutory provision and captures all of the sections under which grants 
are made with respect to a major disaster. This change would improve 
consistency with the statute and eliminate the need to continuously 
update a list of Stafford Act sections.
---------------------------------------------------------------------------

    \95\ Public Law 100-707, 102 Stat. 4698 (Nov. 23, 1988).
    \96\ Public Law 103-181, 107 Stat. 2054 (Dec. 3, 1993).
    \97\ See 55 FR 35537 (Aug. 30, 1990).
    \98\ See 59 FR 24356 (May 11, 1994).
    \99\ See, e.g., 67 FR 8853 (Feb. 26, 2002); 72 FR 61750 (Oct. 
31, 2007); 74 FR 47482 (Sep. 16, 2009).
---------------------------------------------------------------------------

    FEMA also proposes to remove the second sentence of paragraph (c), 
which provides the cost share under HMGP for major disasters declared 
before June 10, 1993. As this date has long since passed, it is no 
longer necessary to include in the HMGP regulations.
3. Section 206.434 Eligibility
    Paragraph (a), Applicants, currently describes the entities which 
are eligible

[[Page 53490]]

to apply for the Hazard Mitigation Grant Program, listing States and 
local governments, private nonprofit organizations owning or operating 
a private nonprofit facility, and Indian Tribes. FEMA proposes to 
remove the word ``Applicants'' from the first sentence, clarify in 
subparagraph (a)(1) that applicants include States and Indian Tribal 
governments, and revise subparagraph (a)(2) to clarify that State 
agencies and local governments, eligible private nonprofit 
organizations, and Indian Tribal governments may be subapplicants. FEMA 
proposes to remove the language at subparagraph (a)(3) (Indian Tribes 
or authorized Tribal organizations and Alaska Native villages or 
organizations, but not Alaska native corporations with ownership vested 
in private individuals) because this language refers to non-federally 
recognized Tribes, which are included under local governments. 42 
U.S.C. 5122(8)(B). FEMA proposes this revision to more clearly 
distinguish the entities which may be applicants from those which may 
be subapplicants.
    In paragraph (e), Property acquisitions and relocation 
requirements, FEMA proposes to retain the first sentence and remove the 
rest of the paragraph. FEMA proposes to remove this language because it 
addresses requirements for major disasters declared before December 3, 
2007. For all major disasters declared on or after December 3, 2007, 
the property acquisitions and relocation requirements are found in part 
80.

IV. Regulatory Analysis

A. Executive Order 12866, as Amended, Regulatory Planning and Review; 
Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') direct agencies 
to assess the costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. Executive Order 13771 (``Reducing Regulation and 
Controlling Regulatory Costs'') directs agencies to reduce regulation 
and control regulatory costs and provides that ``for every one new 
regulation issued, at least two prior regulations be identified for 
elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    The Office of Management and Budget (OMB) has not designated this 
rule a significant regulatory action under section 3(f) of Executive 
Order 12866. Accordingly, OMB has not reviewed it. This rule is exempt 
from the requirements of Executive Order 13771 because it is non-
significant under Executive Order 12866. See OMB's Memorandum 
``Guidance Implementing Executive Order 13771, Titled `Reducing 
Regulation and Controlling Regulatory Costs' '' (April 5, 2017).
Need for Regulation
    The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), Pub. 
L.112-141, 126 Stat. 916, amended the National Flood Insurance Act of 
1968 (NFIA) to require changes to FEMA's hazard mitigation assistance 
(HMA) programs. FEMA implemented most of these changes through the 
Hazard Mitigation Assistance Guidance in 2013.\100\ FEMA now proposes 
to update its hazard mitigation assistance regulations to reflect these 
changes.
---------------------------------------------------------------------------

    \100\ FEMA, Hazard Mitigation Assistance Guidance, July 12, 
2013, available at https://www.fema.gov/media-library/assets/documents/33634 (last accessed Jan 8, 2020).
---------------------------------------------------------------------------

    Following guidance in OMB Circular A-4, FEMA assessed the impacts 
of this rule against a no-action baseline as well as a pre-statutory 
baseline. The no-action baseline is an assessment against what the 
world would be like if the proposed rule is not adopted. The pre-
statutory baseline is an assessment against what the world would be 
like if the relevant statute(s) had not been adopted and, in this case, 
already been implemented through guidance.
    Under a no-action baseline, this rule would result in cost savings 
to FEMA, and familiarization costs to HMA recipients. Under a pre-
statutory baseline, this rule results in distributional impacts and 
qualitative benefits, but no marginal costs. The annual distributional 
impact of this rule is estimated at $4.16 million in increased 
transfers from FEMA to HMA recipients.
    FEMA addressed the substantive changes in this analysis and 
presented how they affect costs, benefits, and transfers. The remaining 
changes are nonsubstantive, meaning they are technical and include 
definitional updates and other changes that modernize and standardize 
regulations, reduce redundancy, or increase readability. The 
nonsubstantive changes do not have an economic impact. FEMA included a 
detailed marginal analysis table that summarizes the changes in this 
proposed rule and the related impacts in the public docket for this 
rulemaking available on www.regulations.gov under Docket ID FEMA-2019-
0011.
Affected Population
    The proposed rule would affect all recipients of FEMA's Flood 
Mitigation Assistance (FMA) grants. Recipients include 56 State and 
territorial governments and 573 Indian Tribal governments.\101\ Local 
governments and governmental organizations such as flood districts and 
sewer districts are considered subrecipients and must apply through a 
State or Indian Tribal government. For simplicity, FEMA refers to the 
affected population as ``recipients'' throughout the analysis, except 
in cases where there are different requirements for recipients or 
subrecipients.
---------------------------------------------------------------------------

    \101\ Indian Entities Recognized by, and Eligible to Receive 
Services from the United States Bureau of Indian Affairs, 84 FR 
1200, (Feb 1, 2019).
---------------------------------------------------------------------------

Baselines
    BW-12 made substantial changes to FEMA's HMA programs. FEMA 
implemented most of these changes via the HMA Guidance in 2013. FEMA 
now proposes to codify those changes in this rule. Following guidance 
in OMB Circular A-4, FEMA assessed the impacts of this rule against a 
pre-statutory baseline covering 2006-2012 (pre-BW-12) and a no-action 
baseline covering 2013-2017 \102\ (post-BW-12).
---------------------------------------------------------------------------

    \102\ 2017 is the last year complete data is available.
---------------------------------------------------------------------------

    The pre-statutory baseline shows the effects of the proposed rule 
compared to the current regulations (i.e., as if FEMA had not already 
implemented the changes through the HMA Guidance). The no-action 
baseline shows the effects of the proposed rule compared to current 
FEMA practice (i.e., compared to the HMA Guidance, which reflects 
FEMA's current practice, but not the current regulations).
    Under the pre-statutory baseline, the proposed rule has 
distributional impacts and qualitative benefits. The distributional 
impacts would affect recipients of Repetitive Loss (RL) grants and 
Severe Repetitive Loss (SRL) grants that were combined into the FMA 
program pursuant to BW-12. Under BW-12, RL and SRL properties received 
increased assistance, while standard mitigation properties received 
decreased assistance. Under the no-action baseline, the only impacts 
are

[[Page 53491]]

implementation costs and Federal cost savings. Table 1 shows the 
impacts of this proposed rule under the pre-statutory and no-action 
baselines.

              Table 1--Annual Effects of Proposed Rule Under Pre-Statutory and No-Action Baselines
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
               Baseline                         Costs                   Benefits                Transfers
----------------------------------------------------------------------------------------------------------------
Pre-Statutory........................  $610 (year 1 only).....  Qualitative............  $28.4 million from FEMA
                                                                                          to grant recipients.
No-Action............................  610 (year 1 only)......  $85,463................  None.
----------------------------------------------------------------------------------------------------------------

Effects
    The primary effects of BW-12 that would be codified by this 
proposed rule resulted from changes in the Federal cost shares. A cost 
share is the portion of the costs of a Federally assisted project or 
program borne by the Federal Government. FEMA pays a portion of the 
cost of a project, or the Federal cost share, and the recipient pays 
the remaining share.
    FMA Grant Cost Sharing Changes. The current regulations still 
reflect the pre-BW-12 cost share provisions of the RL and SRL grant 
programs. BW-12 modified these two programs and FEMA implemented the 
modifications in the 2013 HMA Guidance. The newly expanded FMA program 
now serves the recipients of these grant programs.
    BW-12 increased the RL Federal cost share from 75 percent to 
between 75 and 90 percent, and increased the SRL Federal cost share 
from between 90 and 100 percent to 100 percent. Table 2 shows the cost 
shares by type of grant.

                                      Table 2--Cost Share by Type of Grant
----------------------------------------------------------------------------------------------------------------
                                                                RL                              SRL
                                                ----------------------------------------------------------------
                    Baseline                       FEMA  cost    Recipient  cost    FEMA  cost       Recipient
                                                    share (%)       share (%)        share (%)    cost share (%)
----------------------------------------------------------------------------------------------------------------
Pre-Statutory (2006-2012) Pre-BW-12............              75              25        90 to 100         10 to 0
No-Action (2013-2017) Post-BW-12...............           75-90           10-25              100               0
----------------------------------------------------------------------------------------------------------------

    Lowering the Cap and Removing the Frequency Restriction. Prior to 
BW-12, FMA funds for the development or update of the flood portion of 
community multi-hazard mitigation plans were capped at $150,000 in 
Federal funding for States and $50,000 for communities, with a total 
cap of $300,000 in Federal funding for applications statewide. FEMA 
could not award State or community planning grants more than once every 
5 years.
    BW-12 limited FMA grant funds to develop or update the flood 
portion of community multi-hazard mitigation plans to a $50,000 Federal 
share to any recipient or a $25,000 Federal share to any subrecipient. 
BW-12 also removed the restriction on awarding State or community 
planning grants more than once every 5 years. FEMA discusses the 
impacts of these changes in the costs section.
    Shifting from State Allocations to Competition. Prior to BW-12, 
FEMA annually allocated FMA program funding to recipients based on the 
number of insured properties and RL properties present within the 
recipient's jurisdiction. Recipients that did not meet the minimum 
threshold to receive a target allocation had to apply against funds 
that were set aside for this purpose. BW-12 replaced this process with 
a fully competitive program that selects subapplications against agency 
priorities identified annually. This change allows FEMA to identify and 
mitigate properties with the highest risk from flooding, thereby 
providing the greatest savings to the NFIP.
Costs
    Costs for this proposed rule would result from implementation of 
the rule, rather than the 2013 HMA Guidance. FEMA estimated these costs 
against the no-action baseline since these are directly attributable to 
updating the text of the regulation, and not program changes that FEMA 
already implemented.
    Familiarization Costs. FEMA estimated familiarization costs for 
States, but not for local emergency management divisions or 
jurisdictions. FEMA assumed States regularly update their emergency 
response networks and notify local emergency management divisions on 
any changes. FEMA believes that States would continue to disseminate 
the new information through each State's established process. FEMA 
assumed that each State grant recipient would have two personnel that 
would need to familiarize themselves and understand the proposed rule 
by reading the existing and new regulations to understand the changes. 
FEMA expects each person to spend one hour to become familiar with the 
changes. FEMA assumes that the rule is likely to be reviewed by each 
State's Emergency Management Director and one administrative support 
personnel. FEMA assumes that BLS occupations Emergency Management 
Director (SOC: 11-9160, mean hourly wage $39.70) \103\ and First-Line 
Supervisor of Office and Administrative Support Workers (SOC: 43-1010, 
mean hourly wage $28.53) \104\ are most representative of these roles 
in a State. Using the 1.46 multiplier,\105\ the fully loaded wage rates 
are $57.96 and $41.65 respectively. The estimated total cost of 
recipients making themselves

[[Page 53492]]

familiar with the proposed rule is $4,582 in year 1 ($742 per year 
annualized at 7 percent over 10 years, and $635 at 3 percent). ((56 
recipients x 1 hour x $57.96 wage) + (56 recipients x 1 hour x $41.65 
wage) = $5,578.16).
---------------------------------------------------------------------------

    \103\ May 2018 National Occupational Employment and Wage Rates, 
National File (xls), First-Line Supervisors of Office & Admin 
Support Workers (OCC Code: 43-1010, Average, Column Title: H_Mean). 
Accessed and downloaded June 4, 2019. https://www.bls.gov/oes/tables.htm.
    \104\ May 2018 National Occupational Employment and Wage Rates, 
National File (xls), Emergency Management Directors (OCC Code: 11-
9160, Average, Column Title: H_Mean). Accessed and downloaded June 
4, 2019. https://www.bls.gov/oes/tables.htm.
    \105\ December 2018 Bureau of Labor Statistics, Employer Costs 
for Employee Compensation, Table 1. Employer costs per hour worked 
for employee compensation and costs as a percent of total 
compensation: Civilian workers, by major occupational and industry 
group, page 4. Accessed and downloaded June 4, 2019. https://www.bls.gov/news.release/archives/ecec_03192019.pdf.
---------------------------------------------------------------------------

    Summary of Costs. FEMA estimated the proposed rule would have 
familiarization costs of $5,578 in the first year of implementation. 
FEMA assumed that all staff and resources would come from existing 
sources and thus represent an opportunity cost.
Benefits
    This proposed rule would be beneficial to both FEMA and Hazard 
Mitigation Grant recipients. While the benefits are not quantifiable, 
FEMA believes that changes implemented by BW-12 allow it to target the 
most vulnerable properties, and streamline the mitigation grant 
process. Under the no-action baseline, most changes in this proposed 
rule would be technical and include definitional updates and other 
changes made to harmonize FEMA regulations with current FEMA practices 
and HMA guidance, modernize and standardize the regulations, reduce 
redundancy, or increase readability. These changes would be largely 
nonsubstantive and not have an economic impact.
    Cost Savings. Under a no-action baseline, FEMA estimated costs 
savings of $85,463 that would result from removing the definition of 
``market value'' at 44 CFR 79.2(f). Currently, the regulation requires 
FEMA to use the market value of a structure when making grant 
determinations. Removal of this requirement would allow FEMA to 
consider the value of the structure listed on the flood insurance 
policy when considering a grant request related to a vulnerable 
structure, rather than the ``market value.'' This would result in a 
reduction in the time it takes FEMA personnel to review a grant 
application. Using ``market value'' required additional research and 
appraisals, whereas the flood insurance property value is readily 
available to FEMA personnel. FEMA estimated this change would reduce 
the personnel time it takes to review a grant application by an 
estimated 2 hours per review for a total of $85,463 annually.
    FEMA based its estimates on the estimated annual average number of 
FMA grant applications that required a market value review between 2013 
and 2017 and the wage rates of the personnel reviewing the grants. The 
annual average number of grant requests was 512. Table 3 shows the 
annual number of grant requests for vulnerable properties that required 
a market value review between 2013 and 2017.

      Table 3--Annual Grant Requests Requiring Market Value Review
------------------------------------------------------------------------
                          Year                             FMA  program
------------------------------------------------------------------------
2013....................................................             602
2014....................................................             438
2015....................................................             508
2016....................................................             592
2017....................................................             418
                                                         ---------------
    Total...............................................           2,558
Annual average..........................................             512
------------------------------------------------------------------------

    Reviews of the grant applications can vary widely from simple--all 
documentation accompanies the request and requires very little follow-
up--to complex. For this analysis, FEMA chose to capture the 
variability in the grant application reviews by using a weighted 
average of the hours it takes to complete the reviews. FEMA estimated 
that 25 percent of the reviews are simple; these reviews take 8 hours 
each on average to complete. Reviews of applications that are average 
in their complexity comprise 50 percent of the reviews and are assumed 
to take 12 hours each. Twenty-five percent of the reviews are complex 
and take 16 hours on average to complete.\106\ Taking a weighted 
average of the times listed and using the distribution of 25 percent 
simple/50 percent average/25 percent complex, FEMA estimated that grant 
application reviews take 12 hours on average to complete. ([(0.25 x 8) 
+ (0.50 x 12) + (0.25 x 16)] = 12 hours).
---------------------------------------------------------------------------

    \106\ FEMA personnel who review the FMA grant requests provided 
the information on the average time to review and the discussion of 
complexity.
---------------------------------------------------------------------------

    Program Specialists (GS 13, step 5) and contracted Civil Engineers 
conduct the reviews, the Program Specialists conduct 75 percent of 
reviews and the Civil Engineers conduct the remaining 25 percent. The 
fully-loaded average hourly wage for GS 13, step 5 at the FEMA regional 
locations is $89.35 \107\ and $65.79 \108\ is the fully-loaded hourly 
wage rate for Civil Engineers. Using the 12-hour average estimate for 
reviewing the grant application, FEMA estimates that each year it 
spends $512,778 on average to review FMA grant applications. ([(512 
grant reviews x 12 hours per review x $89.35 hourly wage for Program 
Specialist x 0.75) + ([(512 grant reviews x 12 hours per review x 
$65.79 hourly wage for Civil Engineer x 0.25)] / (0.75 + 0.25) = 
$512,778.20).
---------------------------------------------------------------------------

    \107\ Based on the OPM General Schedule of Pay, January 2018, 
the average base wage of GS 13, step 5 in each of the FEMA regional 
office locations is $61.20 (Boston, MA; NY, NY; Philadelphia, PA; 
Atlanta, GA; Chicago, IL; Denton, TX; KC, MO; Denver, CO; Oakland, 
CA; and Bothell, WA), which is multiplied by a 1.46 benefits 
multiplier (December 2018, BLS Employer Costs for Employee 
Compensation) to get a fully loaded wage rate of $89.35/hour. Access 
and downloaded July 5, 2019. https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/salhrl.pdf.
    \108\ Based on Bureau of Labor Statistics May 2018 National 
Employment and Wage Rate, National File (xls), a Civil Engineer, SOC 
17-2050, has a base wage of $45.06, which is multiplied by a 
benefits multiplier of 1.46 (December 2018, BLS Employer Costs for 
Employee Compensation) to get a fully loaded wage rate of $65.79/
hour. Accessed and downloaded July 5, 2019. https://www.bls.gov/oes/tables.htm.
---------------------------------------------------------------------------

    FEMA estimated that removing the definition of ``market value'' 
would reduce its administrative burden by 2 hours per review. This 
results in each review taking 10 hours instead of 12, on average. Using 
the same calculation as above and 10 hours instead of 12 hours per 
review, FEMA's average amount spent each year on reviewing FMA grant 
applications would be $427,315 and would result in an estimated annual 
cost savings of $85,463. ($512,778-$427,315 = $85,463).
    Clarification of Mitigation Grant Terms and Conditions. The current 
HMA grant program regulations contain inconsistencies or vague language 
that may cause confusion. Specifically, FEMA would add definitions for 
``Federal award'' and ``pass-through entity;'' and replace definitions 
of ``grantee,'' ``subgrant,'' and ``subgrantee'' with ``recipient,'' 
``subaward,'' and ``subrecipient,'' respectively. These changes would 
make the HMA regulations consistent with FEMA's other regulations.
    Revising, Adding, or Removing Definitions. FEMA proposes to revise 
existing definitions for clarification purposes, to add several 
definitions to conform with BW-12 and current agency practice, and to 
delete others that are obsolete. FEMA believes the changes are clear 
and more consistent with definitions used in 2 CFR part 200 and the HMA 
Guidance.\109\
---------------------------------------------------------------------------

    \109\ Hazard Mitigation Assistance Guidance (HMA Guidance), Feb. 
27, 2015, available at https://www.fema.gov/media-library-data/1424983165449-38f5dfc69c0bd4ea8a161e8bb7b79553/HMA_Guidance_022715_508.pdf (last accessed Feb. 13, 2020).
---------------------------------------------------------------------------

    Shifting from Standard Mitigations to RL and SRL Structures. One of 
the main focuses of this proposed rulemaking is on mitigation grants 
made to properties in the NFIP that have been repeatedly subject to 
costly loss claims. FEMA provides a range of available mitigation 
options including the FMA program to address vulnerable RL and SRL 
structures. Once a structure is mitigated through one of the programs, 
it could be

[[Page 53493]]

protected from flooding, and can be removed from the repetitive flood 
loss list of un-mitigated properties insured by the NFIP. This reduces 
the flood vulnerability to RL and SRL structures, preventing further 
losses to the policyholders, as well as to FEMA. This benefit applies 
to the pre-statutory baseline, but not the no-action baseline because 
recipients and FEMA both realized this benefit beginning in 2013 when 
FEMA implemented it through the HMA Guidance.
    Shifting from State Allocations to Competition. Before BW-12, FMA 
program funding was based on an allocation methodology that required an 
analysis of the number of insured properties and RL properties present 
within a jurisdiction and each State was allocated a share of the 
overall available funding. BW-12 changed this process to a fully-
competitive program that allows FEMA to select subapplications 
according to FEMA priorities no matter the location.
    This change lifted the constraints that were formerly in place 
against multiple eligible subrecipients in the same jurisdiction with 
vulnerable properties, allowing a more adequate coverage area within 
and across States and contributing to the increase in the size and 
volume of RL and SRL properties covered by each grant. FEMA is able to 
identify and mitigate properties with the highest risk from flooding 
and provide the greatest savings to the NFIP. This benefit applies to 
the pre-statutory baseline, but not the no-action baseline because 
recipients and FEMA both realized this benefit beginning in 2013 when 
FEMA implemented it through the HMA Guidance.
    Eliminating the Limit on In-Kind Contributions. Eliminating the 
limit on in-kind contributions for a recipient's cost share modifies 
the nature, or make-up, of the recipient's contribution but does not 
change the overall dollar amount required for the recipient's 
contribution. FEMA believes this is advantageous because recipients and 
subrecipients are able to leverage their own optimal mix of in-kind and 
cash to meet their portion of the cost-share. There is no change to 
transfers between FEMA and grantees because the cost share does not 
change; however, the make-up of the recipient's portion changes.
    Summary of Benefits. Under a no-action baseline FEMA believes this 
rule would promote a better understanding of the FMA program by 
updating the regulations that govern the HMA programs to conform with 
adjustments made by BW-12 and current agency practice. These changes 
would clarify existing requirements and help facilitate the flood 
portion of the Hazard Mitigation Grant Program processes.
    FEMA estimated annual cost savings of $85,463 per year. Removing 
the definition of ``market value'' would lead to cost savings to FEMA. 
Removing this definition would reduce the time it takes to conduct an 
initial grant application review by 2 hours.
    Under a pre-statutory (pre-BW-12) baseline, FEMA believes there are 
considerable benefits associated with the shift to entirely competitive 
awards for the grants instead of the previous State-specific 
allocations, as well as the more flexible in-kind match option. The 
shift to more vulnerable RL and SRL properties by modifying the cost 
shares and giving priority to applications with the most vulnerable 
properties are expected to reduce the frequency of loss claims and 
promote community resiliency through mitigation. There are also 
qualitative benefits due to the elimination of the cap on FMA funding 
for States and communities and the opening of the program to a fully 
competitive award system. These changes enhance FEMA's ability to 
administer the FMA program in a more streamlined and cost effective 
manner. Removing State allocations of grant resources and accepting in-
kind State contributions further streamline the program. Collectively, 
these benefits justify the proposed rule and update FEMA's regulations 
to reflect current statutory authority.
Transfers
    Federal Cost Shares. The adjustments in cost shares made by BW-12 
result in distributional impacts, with certain grant programs receiving 
relative increases and decreases in grant funds. To analyze the impact 
of changes to the cost shares, FEMA summarized available mitigation 
project data for standard, RL, and SRL grants.\110\
---------------------------------------------------------------------------

    \110\ FEMA assumes that the mitigation project level grant data 
with applications comprising mixed property categories resulting in 
blended cost share percentages (any total cost share not equal to 
100 percent, 90 percent, or 75 percent Federal) would be rounded up 
to the nearest threshold category. This would not round up project 
values or Federal cost shares in dollar terms, only their tabulation 
and consideration as RL or SRL. An application with a determined 
Federal cost share of 91-99 percent would be counted as part of the 
100 percent SRL category, while applications with 76-89 percent 
Federal cost shares would be counted as part of the 90 percent 
Federal RL category.
---------------------------------------------------------------------------

    Between 2006 and 2012 (pre-BW-12), FEMA provided a total of 390 
grants to 244 recipients for 1,014 properties. The value of those 
grants was $287,140,206 with FEMA paying $202,072,763 and recipients 
paying $85,067,443. Table 4 shows the distribution of these grants by 
category.

                                                          Table 4--Pre-BW-12 Mitigation Projects and Associated Value by Grant Category
                                                                                             [2018$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% federal cost share)      Repetitive loss (75% federal cost share)   Severe repetitive loss (90-100% federal
                                                                --------------------------------------------------------------------------------------                cost share)
                              Year                                                                                                                    ------------------------------------------
                                                                   Number      Value of     Federal  share    Number      Value of     Federal  share    Number      Value of     Federal  share
                                                                 of grants      grants         obligated    of grants      grants         obligated    of grants      grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2006...........................................................         93     $38,326,383     $28,399,846  .........               $               $          2        $147,974        $147,974
2007...........................................................         85      45,485,645      33,225,037  .........  ..............  ..............  .........  ..............  ..............
2008...........................................................         70      36,449,791      24,638,444  .........  ..............  ..............          1          34,540          31,086
2009...........................................................         54      79,692,889      57,976,016          3       2,973,885       2,431,695          3         611,432         550,289
2010...........................................................         35      32,133,654      22,507,910          2       1,454,583         881,884  .........  ..............  ..............
2011...........................................................         17      17,218,947      11,035,040  .........  ..............  ..............  .........  ..............  ..............
2012...........................................................         25      32,610,483      20,247,542  .........  ..............  ..............  .........  ..............  ..............
Average........................................................         54      40,273,970      28,289,976          3         632,638         473,368          2         113,421         104,193
                                                                --------------------------------------------------------------------------------------------------------------------------------
    Total......................................................        379     281,917,792     198,029,835          5       4,428,468       3,313,579          6         793,946         729,349
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 53494]]

    The 390 grants from pre-BW-12 were one of three types--Standard 
Mitigation (up to 75 percent Federal cost share); RL (75 percent 
Federal cost share); or SRL (90-100 percent Federal cost share). Prior 
to BW-12, there were 379 Standard Mitigation grants with a total value 
of $281,917,792. FEMA's share was $198,029,835 and the recipients' 
share was $83,887,957 (70 percent average Federal cost share). For RL 
grants, there were five grants with a total value of $4,428,468. FEMA's 
share was $3,313,579 and the recipients' share was $1,114,889 (75 
percent Federal cost share). For SRL grants, there were six grants made 
with a total value of $793,946. FEMA's share was $729,349 and the 
recipients' share was $64,597 (92 percent Federal cost share).
    Post-BW-12 (2013-2017), FEMA provided a total of 527 grants to 204 
recipients for 2,873 properties. The total value of those grants was 
$682,040,624. FEMA's share was $622,171,437 and recipients' share was 
$59,869,187. Table 5 shows the distribution of these grants by 
category.

                                                         Table 5--Post-BW-12 Mitigation Projects and Associated Value by Grant Category
                                                                                             [2018$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% federal cost share)        Repetitive loss (75-90% federal cost    Severe repetitive loss (100% federal cost
                                                                -------------------------------------------                   share)                                     share)
                              Year                                                                         -------------------------------------------------------------------------------------
                                                                   Number      Value of     Federal  share    Number      Value of     Federal  share    Number      Value of     Federal  share
                                                                 of grants      grants         obligated    of grants      grants         obligated    of grants      grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2013...........................................................         18     $10,723,474      $7,079,996          5     $11,904,781     $10,163,082         65     $98,392,747     $88,681,628
2014...........................................................         28       8,730,394       5,245,019          5       6,731,307       5,749,293         68      73,550,347      74,444,363
2015...........................................................         16       7,187,417       5,375,058          8      33,162,836      29,399,251         80     122,139,120     117,708,589
2016...........................................................         26      11,762,427       8,729,565         12      29,128,628      24,800,531         99     170,742,360     156,950,119
2017...........................................................         33      13,430,244       9,967,987          5       5,835,914       4,880,298         59      78,618,628      72,996,658
Average........................................................         24      10,366,791       7,279,525          7      17,352,693      14,998,491         74     108,688,640     102,156,271
                                                                --------------------------------------------------------------------------------------------------------------------------------
    Total......................................................        121      51,833,956      36,397,625         35      86,763,466      74,992,455        371     543,443,202     510,781,357
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    These 527 grants were one of three types--Standard Mitigation (up 
to 75 percent Federal cost share); RL (75-90 percent Federal cost 
share); or SRL (90-100 percent Federal cost share) (all post-BW-12 cost 
shares). There were 121 Standard Mitigation grants with a total value 
of $51,833,956. FEMA's share was $36,397,625 and the recipients' share 
was $15,436,331 (70 percent average Federal cost share). For RL grants, 
there were 35 grants with a total value of $86,763,466. FEMA's share 
was $74,992,455 and the recipients' share was $11,771,011 (86 percent 
Federal cost share). For SRL grants, there were 371 grants made with a 
total value of $543,443,202. FEMA's share was $510,781,357 and the 
recipients' share was $325,661,845 (94 percent Federal cost share).
    These grants often include some ineligible costs, including cost 
overruns or underruns, the use of insurance proceeds that FEMA deducted 
as a duplication of benefits,\111\ or increased cost of compliance 
(ICC),\112\ so the actual cost shares do not equal the percentages 
listed above. For example, although SRL grants have a 100 percent 
Federal cost share, the actual average Federal share was 94 percent.
---------------------------------------------------------------------------

    \111\ Duplication of Benefits refers to assistance from more 
than one source that is used for the same mitigation purpose or 
activity. The purpose may apply to the whole project or only part of 
it. HMA funds cannot duplicate funds received by or available to 
applicants or subapplicants from other sources for the same purpose. 
Examples of other sources include insurance claims, other assistance 
programs (including previous project or planning grants and 
subawards from HMA programs), legal awards, or other benefits 
associated with properties or damage that are the subject of 
litigation. HMA does not require that property owners seek 
assistance from other sources (except for insurance claims). 
However, it is the responsibility of the property owner to report 
other benefits received, any applications for other assistance, the 
availability of insurance proceeds, or the potential for other 
compensation, such as from pending legal claims for damages, 
relating to the property. References: Sec. 312 of the Stafford Act; 
44 CFR 79.6(d)(7); Hazard Mitigation Assistance Guidance (February 
27, 2015), Part III, D.5, pages 31-32; HMA Tool for Identifying 
Duplication of Benefits https://www.fema.gov/library/viewRecord.do?id=6815.
    \112\ Increased Cost of Compliance (ICC) provides up to $30,000 
to help cover the cost of mitigation measures that will reduce flood 
risk. ICC coverage is a part of most standard flood insurance 
policies available under the NFIP. https://www.fema.gov/media-library/assets/documents/1130.
---------------------------------------------------------------------------

Changing Cost Shares and to a Fully Competitive Grant Process for FMA
    Changing the cost shares had a distributional impact, where the 
proportion of Federal funds increased while the recipients' proportion 
decreased by the same amount. Similarly, the shift from State 
allocations of grant funding to a competitive-based program that allows 
grants to be allocated to the most vulnerable properties, resulting in 
distributional impacts where recipients in certain States receive more 
in grant funding where others see a decrease. FEMA was not able to 
isolate this effect from the effect of changing the cost shares, since 
they were implemented at the same time.
    First, FEMA analyzed the shift in grant priorities as a 
distributional impact between grant programs. This was done by applying 
the change in percent share of standard, RL, and SRL grants (from pre-
BW-12 to post-BW-12), to the total FMA grant funding post-BW-12, 
showing the relative decreases and increases by type of FMA grant in 
terms of post-BW-12 grant funding caused by making the grants 
competitive and shifting funding to riskier properties.
     The five-year total share of standard mitigation grants 
decreased by $617,928,805 post-BW-12 (7.6 percent of total funding 
post-BW-12 - 98.2 percent of funding pre-BW-12) x $682,040,624 total 
grant funds post-BW-12)).
     The five-year total share of RL grants increased by 
$76,388,550 post-BW-12 (12.7 percent - 1.5 percent x $682,040,624).
     The five-year total share of SRL grants increased by 
$541,540,225 post-BW-12 (79.7 percent - 0.3 percent x $682,040,624).
    This shows the total five-year relative increases and decreases 
between FMA programs in terms of post-BW-12 grant funding: (-
$617,928,805 for standard grants + $76,388,550 for SL grants + 
$541,540,225 SRL grants = $0).
    Table 6 shows changes in the total number of grants as well as the 
Federal and non-Federal shares for all grants pre-BW-12 and post-BW-12 
with the percent change in grants and funding.

[[Page 53495]]



             Table 6--Change in Average Annual Number of Grants and Funding Pre-BW-12 to Post-BW-12
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
                                                   Percent  pre-                  Percent  post-      Percent
                                     Pre-BW-12         BW-12        Post-BW-12         BW-12          change
----------------------------------------------------------------------------------------------------------------
                                               Standard Mitigation
----------------------------------------------------------------------------------------------------------------
Grants per Year.................              54            91.5              24            22.9           -68.6
Funding per year................     $40,273,970            98.2     $10,366,791             7.6           -90.6
----------------------------------------------------------------------------------------------------------------
                                                 Repetitive Loss
----------------------------------------------------------------------------------------------------------------
Grants per Year.................               3             5.1               7             6.7            +1.6
Funding per year................        $632,638             1.5     $17,352,693            12.7           +11.2
----------------------------------------------------------------------------------------------------------------
                                             Severe Repetitive Loss
----------------------------------------------------------------------------------------------------------------
Grants per Year.................               2             3.4              74            70.5           +67.1
Funding per year................        $113,421             0.3    $108,688,640            79.7           +79.4
----------------------------------------------------------------------------------------------------------------

    When comparing pre-BW-12 standard mitigation grants to post-BW-12, 
both the average annual number of approved grants and the average 
annual total amount of funding dropped from $40.3 million to $10.4 
million. For RL structures, the average annual number of approved 
grants increased and the amount of funding increased from $1.8 million 
to $17.4 million. For SRL structures, both the average annual number of 
approved grants and the average annual funding increased from $0.25 
million to $108.7 million when compared to pre-BW-12. This reflects BW-
12 shifting priority from standard mitigations to RL and SRL 
structures. FEMA's data indicate a trend toward both larger project 
sizes and more recently an increased number of RL and SRL projects.
    FEMA then analyzed the distributional impacts of the Federal cost 
shares that resulted from both the shift in priorities and the changes 
in cost shares. The Federal cost share for standard mitigation grants 
remained at 75 percent over the post-BW-12 period analyzed. The cost 
share for RL grants increased from an average of 75 percent pre-BW-12 
to 86 percent post-BW-12. SRL grants had an average 92 percent cost 
share pre-BW-12 and a 94 percent cost share post-BW-12. FEMA also 
analyzed the change in the Federal cost share for the three grant 
categories together, which shows the impact of BW-12's changes to cost 
share amounts as well as shifting funding to RL and SRL grants, which 
have higher cost shares.
    The total Federal share of all FMA grant categories pre-BW-12 was 
70.4 percent ($287,140,206 / $202,072,763). Post BW-12, the Federal 
share was 91.2 percent ($682,040,624 / $622,171,437). The increase in 
transfers from FEMA to grantees as a result of the changed cost shares 
and changed priorities, in terms of post-BW-12 grant funding, was 
$141,864,450 (91.2 percent - 70.4 percent x $682,040,624) over five 
years, or an average increase of $28,372,890 per year.
    Under a no-action baseline, the proposed rule would result in no 
transfer impacts, as FEMA has already implemented the updated cost 
share percentages in the 2013 HMA Guidance. Under a pre-statutory (pre-
BW-12) baseline, the revisions to the cost share and re-prioritization 
to grants with higher cost shares result in distributional transfer 
impacts shifting funding to the most vulnerable properties and an 
increase in transfers from FEMA to grant recipients. The discounted 
total 10-year transfers from FEMA to grant recipients are $283.7 
million ($28.4 million annualized \113\).
---------------------------------------------------------------------------

    \113\ The annualized amounts for 3 percent and 7 percent are 
equal to the estimated annual transfers of $28.4 million because the 
amounts for each year are identical and the first year is 
discounted.
---------------------------------------------------------------------------

    Mitigation Planning Grants. BW-12 lowered the funding cap on the 
amount of money that could be used for the flood portion of the 
individual multi-hazard mitigation plans to $50,000 per recipient and 
$25,000 per subrecipient, but removed a restriction that grantees could 
only receive funding for planning grants once every 5 years. Lowering 
the cap on Federal funds results in decreased funding per applicant. 
However, FEMA believes this is offset by the removal of the frequency 
restriction, which results in a negligible change in the number of 
approved applications and awards. FEMA found the data does not show a 
substantial change in the number of applications, and thus FEMA assumed 
that the removal of the 5-year restriction is countered by the lowered 
cap on funding, resulting in minimal distributional impacts as shown in 
Table 7. Because FEMA implemented these changes concurrently, FEMA was 
unable to isolate the effects of individual changes.

                                  Table 7--Mitigation Planning Grants 2006-2017
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
                                                                                     Approved      Average grant
                              Year                                 Applications       grants          amount
----------------------------------------------------------------------------------------------------------------
2006............................................................             167              92        $286,765
2007............................................................             561             481          89,709
2008............................................................             523             374          82,248
2009............................................................             491             346          82,248
2010............................................................             364             288          81,514
2011............................................................             417             363         102,173

[[Page 53496]]

 
2012............................................................             173             155         142,411
                                                                 -----------------------------------------------
    Average Pre-BW-12...........................................             385             300         107,838
----------------------------------------------------------------------------------------------------------------
2013............................................................             260             228         115,022
2014............................................................             293             264          87,772
2015............................................................             351             315          93,000
2016............................................................             329             287         170,262
2017............................................................             422             377          98,268
                                                                 -----------------------------------------------
    Average Post-BW-12..........................................             331             294         111,899
----------------------------------------------------------------------------------------------------------------

    Since 2013, FEMA has applied the new caps on funding for FMA 
planning grants per recipient and subrecipient. The caps align with and 
reflect FEMA's shift to focus the majority of FMA program funds on 
mitigating the risk to the most vulnerable properties. FEMA is no 
longer constrained by any limit on how often a recipient or 
subrecipient can receive a planning grant or the total amount that can 
be granted to a recipient. Further, the lower caps per recipient and 
subrecipient allow FEMA to assist more recipients and subrecipients.
Alternatives
    Most of the changes in this proposed rule are based on statute. 
FEMA has limited discretion in determining which changes to make. The 
changes that carry an economic impact under a pre-statutory (pre-BW-12) 
baseline are the proposed changes to 44 CFR 79.4 (proposed Sec.  77.4): 
FMA Grant Federal Cost Shares and 44 CFR 79.6 (proposed Sec.  77.6): 
Flood Portion of Multi-Hazard Mitigation Plans. BW-12 prescribed these 
changes. These changes are neither new nor discretionary and FEMA did 
not consider alternatives.

                                        Table 8--A-4 Accounting Statement
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
                                        Period of analysis: 2006 to 2017
-----------------------------------------------------------------------------------------------------------------
                                                                                          Source citation (RIA,
               Category                7 Percent discount rate  3 Percent discount rate      preamble, etc.)
----------------------------------------------------------------------------------------------------------------
BENEFITS:
    Annualized Monetized $millions/    .085463................  .085463................  Preamble (RA)
     year.
    Annualized Quantified............  N/A....................  N/A....................
                                      --------------------------------------------------
    Qualitative......................   Allows FEMA to target most vulnerable    Preamble (RA).
                                        properties and streamline mitigation grant
                                        process.
                                        Modernize and standardize regulations
                                        to match current practice and statute and
                                        increase readability.
                                        Shift from State-based allocations to a
                                        competitive process, allowing FEMA to select
                                        applications according to FEMA priorities
                                        rather than location.
                                        Eliminate limits on in-kind
                                        contributions allowing recipients more
                                        flexibility to cover their portion of the cost
                                        share.
                                      --------------------------------------------------
COSTS:
    Annualized Monetized $millions/    0.000742...............  0.000635...............  Preamble (RA).
     year.
    Annualized quantified............  N/A....................  N/A....................
                                      --------------------------------------------------
    Qualitative......................  N/A.
                                      --------------------------------------------------
TRANSFERS:
    Annualized Monetized $millions/    28.4...................  28.4...................  Preamble (RA).
     year.
                                      --------------------------------------------------
    From/To..........................  Increase in transfers from FEMA to HMA            Preamble (RA).
                                        recipients
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
                                                         Source citation
           Category                     Effects          (RIA, preamble,
                                                              etc.)
------------------------------------------------------------------------
State, Local, and/or Tribal     Qualitative benefits.   Preamble (RA).
 Government.                     Increase in transfers
                                 from FEMA to State,
                                 local, Tribal
                                 governments.

[[Page 53497]]

 
Small business................  There were 231 Small    Preamble (IRFA).
                                 entity recipients
                                 from 2006-2017. Prior
                                 to BW-12, an average
                                 of 16 recipients per
                                 year were small
                                 entities. Post-BW-12,
                                 there were an average
                                 of 24 small entity
                                 recipients per year.
                                 Small entities were
                                 more likely to
                                 receive RL or SRL
                                 grants and slightly
                                 less likely to
                                 receive standard
                                 mitigation grants, so
                                 the Federal cost
                                 shares for small
                                 entities were, on
                                 average, higher post-
                                 BW-12.
Wages.........................  None..................
Growth........................  None..................
------------------------------------------------------------------------

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires agency review of proposed and final rules to assess their 
impact on small entities. When an agency promulgates a notice of 
proposed rulemaking under 5 U.S.C. 553, the agency must prepare an 
Initial Regulatory Flexibility Analysis (IRFA) unless it determines and 
certifies pursuant to 5 U.S.C. 605(b) that a rule, if promulgated, 
would not have a significant impact on a substantial number of small 
entities. FEMA believes this proposed rule does not have a significant 
economic impact on a substantial number of small entities. However, 
FEMA is publishing this IRFA to aid the public in commenting on the 
potential small entity impacts of the proposed requirements in this 
NPRM. FEMA invites all interested parties to submit data and 
information regarding the potential direct economic impacts on small 
entities that would result from the adoption of this NPRM. FEMA will 
consider all comments received in the public comment process.
    In accordance with the Regulatory Flexibility Act of 1980 (RFA), 5 
U.S.C. 601 et seq., as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FEMA 
prepared this IRFA to examine the effects of the adjustments made by 
BW-12 and implemented by FEMA in the 2013 HMA Guidance on small 
entities. A small entity may be: A small independent business, defined 
as independently owned and operated, is organized for profit, and is 
not dominant in its field per the Small Business Act (5 U.S.C. 632); a 
small not-for-profit organization (any not-for-profit enterprise which 
is independently owned and operated and is not dominant in its field); 
or a small governmental jurisdiction (locality with fewer than 50,000 
people) per 5 U.S.C. 601-612.
1. A Description of the Reasons Why Action by the Agency Is Being 
Considered
    FEMA initiated this rulemaking to codify legislative requirements 
included in the Biggert-Waters Flood Insurance Reform Act of 2012, 
Public Law 112-141, 126 Stat. 916 (BW-12), which amended the National 
Flood Insurance Act of 1968 (NFIA) and required changes to all major 
components of the National Flood Insurance Program (NFIP), including 
mitigation grants authorized under the NFIA. FEMA implemented the 
legislative requirements in BW-12 through policy/guidance in 2013 and 
is now proposing to codify these changes in regulation, to reflect 
current agency practice, and to clarify existing regulations.
    Annually, FEMA provides grant funding to reduce or eliminate risk 
of flood damage to buildings that are insured under the NFIP. Before 
BW-12, FEMA administered three distinct NFIP grant programs: (1) The 
Flood Mitigation Assistance (FMA) Program; (2) the Repetitive Flood 
Claims (RFC) Program; and (3) the Severe Repetitive Loss (SRL) Program. 
BW-12 eliminated the RFC and SRL programs and consolidated aspects of 
those programs into the FMA Program.
    There are two BW-12 provisions that FEMA codifies in this rule that 
result in substantive modifications to the FMA regulations: (1) Cost 
shares for mitigation projects and (2) the amount of FMA funds 
available for mitigation planning grants. BW-12 requires these changes 
and FEMA implemented them through the HMA Guidance in 2013. In 
addition, the proposed rule would make nonsubstantive revisions 
intended to clarify the current grant regulations at 44 CFR parts 79, 
80, 201, and 206, subpart N by adding new definitions and substitute 
terms that reflect the current version of 2 CFR parts 200 and 3002. 
Other nonsubstantive changes in the proposed rule remove references to 
programs eliminated by BW-12. In general, the changes in the proposed 
rule do not reduce the amount of funding appropriated for the FMA 
program or the number of grant recipients. Rather, the proposed rule 
alters the distribution of those funds to recipients with NFIP insured 
facilities with the highest risk of flood damage. Specifically, BW-12 
requires changes to the Federal cost shares used for FMA grants. These 
changes to the cost shares prioritize the most vulnerable severe 
repetitive loss properties by increasing FEMA's cost share portion from 
75 percent Federal to 75-90 percent Federal for RL properties and from 
90 to 100 percent Federal to 100 percent Federal for SRL properties. 
FEMA does not change the cost share for ``standard'' mitigation 
properties; that cost share remains at the current level of 75 percent 
Federal.
    FEMA includes a detailed marginal analysis table which lists all of 
the changes made by BW-12; that table is posted in the public docket 
for this rulemaking available on www.regulations.gov under Docket ID 
FEMA-2019-0011. Most of the changes in this rule are nonsubstantive 
clarifications. Many of the changes remove language describing a 
program or a feature of the FMA program that expired or is no longer 
relevant, applicable, or necessary. FEMA expects that the changes offer 
negligible or inconsequential benefits to FEMA and other administrating 
authorities.
2. A Succinct Statement of the Objectives of, and Legal Basis for, the 
Proposed Rule
    The objective of this proposed rule is to codify the legislative 
requirements in BW-12 and to clarify existing regulations. 
Specifically, this proposed rule would make substantive changes 
intended to codify BW-12 by removing 44 CFR part 78 and substantially 
revising Part 79. In addition, the proposed rule would make 
nonsubstantive revisions intended to clarify 44 CFR parts 79, 80, 201, 
and 206, subpart N by adding new definitions and substitute terms that 
reflect the current version of 2 CFR parts 200 and 3002. Other 
nonsubstantive changes included in the proposed rule

[[Page 53498]]

would remove references to programs eliminated by BW-12.
3. A Description of and, Where Feasible, an Estimate of the Number of 
Small Entities To Which the Proposed Rule Will Apply
    The proposed rule directly affects all eligible FMA grant 
recipients. FEMA estimates that the changes from BW-12 affect FMA grant 
recipients that are small governmental jurisdictions with a population 
of less than 50,000, as defined at 5 U.S.C. 601(5).\114\ To estimate 
the effects of the adjustments made by BW-12, and codified in this 
rule, FEMA used the same methodology used in the regulatory 
analysis.\115\ In general, FEMA identified the affected population--
recipients of FEMA's FMA grants--and analyzed how the changes affect 
those recipients. Using those results, FEMA then evaluated which 
recipients qualified as ``small entities.'' Eligible FMA grant 
recipients may include States, U.S. territories, and Indian Tribal 
governments; subrecipients may include local governments and 
governmental organizations such as flood, sewer, and water districts. 
FEMA removed from its RFA dataset and analysis any recipients that are 
States and U.S. territories because they have populations greater than 
50,000. FEMA also removed any Indian Tribal governments because they 
are not included in the definition of a small entity.\116\ The 
remaining recipients were either local governments or governmental 
organizations. FEMA used the U.S. Census Bureau's annual population 
estimates for 2018 produced by its Population Estimates Program (PEP) 
\117\ to determine the population for each recipient.\118\ Table 9 
summarizes the number of small entities affected by the changes in BW-
12.
---------------------------------------------------------------------------

    \114\ See 5 U.S.C. 601(3)-(6). In general, the term ``small 
entity'' can have the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction'' for 
purposes of this analysis. Specifically, section 601(3) defines a 
``small business'' as having the same meaning as ``small business 
concern'' under section 3 of the Small Business Act. This includes 
any small business concern that is independently owned and operated 
that is not dominant in its field of operation. Section 601(4) 
defines a ``small organization'' as any not-for-profit enterprise 
that is independently owned and operated that is not dominant in its 
field of operation. Section 601(5) defines ``small governmental 
jurisdiction'' as governments of cities, counties, towns, townships, 
villages, school districts, or special districts with a population 
of less than 50,000. Acessed and downloaded June 4, 2019. https://uscode.house.gov/view.xhtml?req=(title:5 section:601 edition:prelim) 
OR (granuleid:USC-prelim-title5-
section601)&f=treesort&edition=prelim&num=0&jumpTo=true.
    \115\ FEMA's methodology is included in section IV. Regulatory 
Analysis of this NPRM.
    \116\ The Regulatory Flexibility Act (RFA) defines a small 
entity as a small business, small nonprofit organization, or a small 
governmental jurisdiction. Section 601(5) defines small governmental 
jurisdictions as governments of cities, counties, towns, townships, 
villages, school districts, or special districts with a population 
of less than 50,000.
    \117\ FEMA used the U.S. Census Bureau's PEP estimates file 
entitled, ``sub-est2018_all.csv'' because it provided 2018 estimated 
populations for all states and all subgovernmental jurisdictions, 
including counties, parishes, etc., towns, cities, villages, etc. 
Accessed and downloaded June 4, 2019. https://www2.census.gov/programs-surveys/popest/datasets/2010-2018/cities/totals/.
    \118\ FEMA used the population of the county, parish, or borough 
in which the grant project was located as a proxy to determine the 
populations for governmental organizations. For example, FEMA used 
the New Castle County, DE 2018 population of 559,335 to determine if 
the New Castle Conservation District was a small entity. In this 
example, the population of 559,335 is greater than the 50,000 small 
entity threshold; thus, the new Castle Conservation District is not 
a small entity.

                      Table 9--Estimated Number of Small Entities Affected by Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                                     Grants to      Properties     Small entity
                                                  Year            small entities   within grants    recipients
----------------------------------------------------------------------------------------------------------------
Pre-BW-12.............................  2006....................              30              67              30
                                        2007....................              25              39              25
                                        2008....................              16              14              16
                                        2009....................              18              41              18
                                        2010....................              11              76              11
                                        2011....................               4              12               4
                                        2012....................               8              75               8
Post-BW-12............................  2013....................              23              64              23
                                        2014....................              27              66              27
                                        2015....................              18              71              18
                                        2016....................              25              56              25
                                        2017....................              26              78              26
                                                                 -----------------------------------------------
    Total Small Entity Recipients.....  ........................             231             659             231
                                                                 -----------------------------------------------
    Total All Recipients..............  ........................             917           3,887             448
                                                                 -----------------------------------------------
    Small Entity Recipients as a        ........................           25.2%           17.0%           51.6%
     Percent of Total Recipients.
----------------------------------------------------------------------------------------------------------------
Pre-BW-12:............................  Total...................             112             324             112
                                        Annual Average..........              16              46              16
Post-BW-12:...........................  Total...................             119             335             119
                                        Annual Average..........              24              67              24
----------------------------------------------------------------------------------------------------------------

    Between 2006 and 2017, FEMA awarded a total of 917 FMA grants to 
448 recipients to mitigate flood risk to 3,887 properties. Of the total 
448 recipients, 231 recipients, or 25.2 percent, had populations under 
50,000 and are considered small entities. These small entities used the 
FMA grants to mitigate flood risk to 659 vulnerable properties. These 
231 small entity recipients are all local governments.
    Pre-BW-12, FEMA awarded 112 grants to small entities. Of these, 109 
were for standard mitigation with an average Federal cost share of 73 
percent, 2 were RL with an average Federal cost share of 82 percent, 
and 1 was SRL with a cost share of 90 percent.

[[Page 53499]]



                                                   Table 10--Pre-BW-12 Projects and Value by Grant Category (2018$) Awarded to Small Entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% federal cost share)       Repetitive loss (RL) (75% federal cost    Severe repetitive loss  (SRL) (90%-100%
                                                                -------------------------------------------                   share)                              federal cost share)
                              Year                                                                         -------------------------------------------------------------------------------------
                                                                   Grants      Value of      Federal share               $ Value of     Federal share                Value of      Federal share
                                                                                grants         obligated      Grants       grants         obligated      Grants       grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2006...........................................................         30      $5,907,776      $4,388,166  .........  ..............  ..............  .........  ..............  ..............
2007...........................................................         25      10,819,810       7,647,471  .........  ..............  ..............  .........  ..............  ..............
2008...........................................................         16       2,150,269       1,575,275  .........  ..............  ..............  .........  ..............  ..............
2009...........................................................         15       7,924,904       5,763,784          2      $2,350,766      $1,917,922          1         $58,406         $52,565
2010...........................................................         11      15,128,995      11,345,865  .........  ..............  ..............  .........  ..............  ..............
2011...........................................................          4       2,897,824       2,042,931  .........  ..............  ..............  .........  ..............  ..............
2012...........................................................          8       6,393,968       4,789,345  .........  ..............  ..............  .........  ..............  ..............
                                                                --------------------------------------------------------------------------------------------------------------------------------
    Total......................................................        109      51,223,546      37,552,837          2       2,350,766       1,917,922          1          58,406          52,565
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Post-BW-12, FEMA awarded 119 grants to small entities. Of these, 40 
were standard mitigation with an average Federal cost share of 69 
percent, 3 were RL with an average Federal cost share of 88 percent, 
and 76 were SRL with an average Federal cost share of 90 percent. While 
the cost shares did not change significantly, more applicants received 
SRL grants when compared to the pre-BW-12 period. This shows the 
prioritization of more vulnerable properties.

                                                   Table 11--Post-BW-12 Projects and Value by Grant Category (2018$) Awarded to Small Entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% federal cost share)       Repetitive loss (RL) (75%-90% federal        Severe repetitive loss (SRL) (100%
                                                                -------------------------------------------                cost share)                            federal cost share)
                              Year                                                                         -------------------------------------------------------------------------------------
                                                                   Grants      Value of      Federal share                Value of      Federal share                Value of      Federal share
                                                                                grants         obligated      Grants       grants         obligated      Grants       grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2013...........................................................          8        $955,085        $427,739          1      $7,145,136      $6,337,841         14      $5,618,711      $3,711,417
2014...........................................................         11       2,529,635       1,594,317  .........  ..............  ..............         16      12,335,444      12,017,816
2015...........................................................          3       2,434,059       1,825,543  .........  ..............  ..............         15      10,486,133       9,829,253
2016...........................................................          6         285,707         194,186          2       1,766,776       1,528,423         17      10,488,578       9,134,257
2017...........................................................         12       5,098,868       3,812,839  .........  ..............  ..............         14       9,034,842       8,474,084
                                                                --------------------------------------------------------------------------------------------------------------------------------
    Total......................................................         40      11,303,354       7,854,624          3       8,911,912       7,866,264         76      47,963,708      43,166,827
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4. A Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Proposed Rule, Including an Estimate of 
the Classes of Small Entities Which Will Be Subject to the Requirement 
and the Types of Professional Skills Necessary for Preparation of the 
Report or Record
    This proposed rulemaking would codify FEMA's current practice and 
make changes for clarity and accuracy. For that reason, FEMA does not 
anticipate this rulemaking places an increase in burden on small 
entities.
5. Identification, to the Extent Practicable, of All Relevant Federal 
Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule
    There are no relevant Federal rules that duplicate, overlap, or 
conflict with the proposed rule.
6. A Description of Any Significant Alternatives to the Proposed Rule 
Which Accomplish the Stated Objectives of Applicable Statutes and Which 
Minimize Any Significant Economic Impact of the Proposed Rule on Small 
Entities
    BW-12 mandated most of the changes in this proposed rule, and 
therefore FEMA has limited discretion in implementing these changes. 
These are not new or discretionary program changes and for this reason, 
FEMA did not consider alternatives. Given that this rule is largely 
distributive in nature, entailing transfers between less vulnerable and 
more vulnerable groups of properties at all levels, no less burdensome 
alternatives to the proposed rule are available. In the absence of this 
proposed rule, small entities would experience negative repercussions 
that might result from inconsistences between the statutes, 
regulations, and agency policy.
7. Conclusion
    FEMA invites all interested parties to submit data and information 
regarding the potential economic impact that would result from adoption 
of the proposals in this NPRM. FEMA will consider all comments received 
in the public comment process. FEMA is interested in the potential 
impacts from the proposed rule on small entities and requests public 
comment on these potential impacts. If you think that this rule would 
have a significant economic impact on you, your business, your 
organization, or your local government, please submit a comment to the 
docket at the address under the ADDRESSES section. In your comment, 
explain why, how, and to what degree you think this rule would have an 
economic impact on you. After reviewing the public comments, FEMA may 
certify the final rule as not having a significant economic impact on a 
substantial number of small entities. FEMA will consider all comments 
received in the public comment process when making a final 
determination.

C. Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of

[[Page 53500]]

Federal regulatory actions on state, local, and Tribal governments, and 
the private sector (other than to the extent that such regulations 
incorporate requirements specifically set forth in law).'' Section 202 
of the Act (2 U.S.C. 1532) further requires that ``before promulgating 
any general notice of proposed rulemaking that is likely to result in 
the promulgation of any rule that includes any Federal mandate that may 
result in expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector, of $100 million or more (adjusted 
annually for inflation) in any one year, and before promulgating any 
final rule for which a general notice of proposed rulemaking was 
published, the agency shall prepare a written statement'' detailing the 
effect on State, local, and Tribal governments and the private sector. 
The proposed rule would not result in such an expenditure, and thus 
preparation of such a statement is not required.

D. National Environmental Policy Act of 1969 (NEPA)

    Under the National Environmental Policy Act of 1969 (NEPA), as 
amended, 42 U.S.C. 4321 et seq. an agency must prepare an Environmental 
Assessment (EA) and Environmental Impact Statement (EIS) for any 
rulemaking that significantly affects the quality of the human 
environment. FEMA has determined that this rulemaking does not 
significantly affect the quality of the human environment and 
consequently has not prepared an EA or EIS.
    Categorical Exclusion A3 included in the list of exclusion 
categories at Department of Homeland Security Instruction Manual 023-
01-001-01, Revision 01, Implementation of the National Environmental 
Policy Act, Appendix A, issued November 6, 2014, covers the 
promulgation of rules, issuance of rulings or interpretations, and the 
development and publication of policies, orders, directives, notices, 
procedures, manuals, and advisory circulars if they meet certain 
criteria provided in A3(a-f). This proposed rule meets the criteria in 
A3(a), (b), (c), and (d). The proposed rule would make a number of 
regulatory revisions that are strictly administrative. In addition, the 
proposed rule would amend an existing regulation without changing its 
environmental effect, and would also implement, without substantive 
change, statutory requirements and guidance documents. Because no 
extraordinary circumstances have been identified, this rule does not 
require the preparation of either an EA or an EIS as defined by NEPA. 
See Department of Homeland Security Instruction Manual 023-01-001-01, 
Revision 01, Implementation of the National Environmental Policy Act, 
section (V)(B)(2).

E. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 
U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
agency obtains approval from the Office of Management and Budget (OMB) 
for the collection and the collection displays a valid OMB control 
number. See 44 U.S.C. 3506, 3507. This rule contains collections of 
information that are subject to review by OMB. The information 
collections included in this rule are approved by OMB under control 
numbers 1660-0072 (Flood Mitigation Assistance (eGrants) and Grant 
Supplement Information), 1660-0062 (State/Local/Tribal Hazard 
Mitigation Plans), 1660-0026 (State Administrative Plan for the Hazard 
Mitigation Grant Program), and 1660-0076 (Hazard Mitigation Grant 
Program Application and Reporting). Currently, FEMA is working to 
reinstate 1660-0103 (Property Acquisition and Relocation for Open 
Space).
    This proposed rulemaking would call for no new collections of 
information under the PRA. This proposed rule includes information 
currently collected by FEMA and approved in OMB information collections 
1660-0072, 1660-0062, 1660-0026, and 1660-0076. Currently, FEMA is 
working to reinstate 1660-0103. The actions of the proposed rulemaking 
do not impose any additional burden to this collection of information. 
The proposed changes in this rulemaking would not change the forms, the 
substance of the forms, or the number of recipients who would submit 
the forms to FEMA.

F. Privacy Act/E-Government Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must 
determine whether implementation of a proposed regulation will result 
in a system of records. A record is any item, collection, or grouping 
of information about an individual that is maintained by an agency, 
including, but not limited to, his/her education, financial 
transactions, medical history, and criminal or employment history and 
that contains his/her name, or the identifying number, symbol, or other 
identifying particular assigned to the individual, such as a finger or 
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A system of 
records is a group of records under the control of an agency from which 
information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual. An agency cannot disclose any record which is contained 
in a system of records except by following specific procedures.
    The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires 
specific procedures when an agency takes action to develop or procure 
information technology that collects, maintains, or disseminates 
information that is in an identifiable form. This Act also applies when 
an agency initiates a new collection of information that will be 
collected, maintained, or disseminated using information technology if 
it includes any information in an identifiable form permitting the 
physical or online contacting of a specific individual. A Privacy 
Threshold Analysis was completed.

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

    Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments, 65 FR 67249, November 9, 2000, applies to agency 
regulations that have Tribal implications, that is, regulations that 
have substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. Under this Executive Order, to the extent 
practicable and permitted by law, no agency shall promulgate any 
regulation that has Tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute, unless funds necessary to pay the direct costs 
incurred by the Indian Tribal government or the Tribe in complying with 
the regulation are provided by the Federal Government, or the agency 
consults with Tribal officials.
    Although Indian Tribal governments are potentially eligible 
applicants under HMA programs, FEMA has determined that this rule does 
not have a substantial direct effect on one or more Indian Tribes, on 
the relationship between the Federal Government and Indian Tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. There is no substantial direct compliance 
cost associated with this proposed rule. The HMA programs are voluntary 
programs that provide funding to applicants, including Tribal 
governments, for eligible mitigation planning and projects that reduce 
disaster losses and protect life and property from future disaster

[[Page 53501]]

damages. An Indian Tribal government may participate as either an 
applicant/recipient or a subapplicant/subrecipient. FEMA does not 
expect the regulatory changes in this proposed rule to 
disproportionately affect Indian Tribal governments acting as 
recipients.

H. Executive Order 13132, Federalism

    Executive Order 13132, Federalism, 64 FR 43255, August 10, 1999, 
sets forth principles and criteria that agencies must adhere to in 
formulating and implementing policies that have federalism 
implications, that is, regulations that have substantial direct effects 
on the States, on the relationship between the national government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. Federal agencies must closely examine 
the statutory authority supporting any action that would limit the 
policymaking discretion of the States, and to the extent practicable, 
must consult with State and local officials before implementing any 
such action.
    FEMA has reviewed this proposed rule under Executive Order 13132 
and has determined that this rule does not have substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government, and therefore 
does not have federalism implications as defined by the Executive 
Order. FEMA has determined that this rule does not significantly affect 
the rights, roles, and responsibilities of States, and involves no 
preemption of State law nor does it limit State policymaking 
discretion. This rulemaking proposes amendments to regulations 
governing voluntary grant programs that may be used by State, local and 
Tribal governments to fund eligible mitigation activities that reduce 
disaster losses and protect life and property from future disaster 
damages. States are not required to seek grant funding, and this 
rulemaking does not limit their policymaking discretion.

I. Executive Order 11988, Floodplain Management

    Pursuant to Executive Order 11988, each agency is required to 
provide leadership and take action to reduce the risk of flood loss, to 
minimize the impact of floods on human safety, health and welfare, and 
to restore and preserve the natural and beneficial values served by 
floodplains in carrying out its responsibilities for (1) acquiring, 
managing, and disposing of Federal lands and facilities; (2) providing 
Federally undertaken, financed, or assisted construction and 
improvements; and (3) conducting Federal activities and programs 
affecting land use, including but not limited to water and related land 
resources planning, regulating, and licensing activities. In carrying 
out these responsibilities, each agency must evaluate the potential 
effects of any actions it may take in a floodplain; to ensure that its 
planning programs and budget requests reflect consideration of flood 
hazards and floodplain management; and to prescribe procedures to 
implement the policies and requirements of the Executive Order.
    Before promulgating any regulation, an agency must determine 
whether the proposed regulations will affect a floodplain(s), and if 
so, the agency must consider alternatives to avoid adverse effects and 
incompatible development in the floodplain(s). If the head of the 
agency finds that the only practicable alternative consistent with the 
law and with the policy set forth in Executive Order 11988 is to 
promulgate a regulation that affects a floodplain(s), the agency must, 
prior to promulgating the regulation, design or modify the regulation 
in order to minimize potential harm to or within the floodplain, 
consistent with the agency's floodplain management regulations and 
prepare and circulate a notice containing an explanation of why the 
action is proposed to be located in the floodplain. The purpose of the 
proposed rule is to update FEMA's HMA program regulations to reflect 
statutory changes that have already been implemented. While the 
proposed rule would revise the regulations FMA administered by the 
NFIP, it would not impact other NFIA regulations that pertain to land 
use, floodplain management, or flood insurance. The majority of the 
revisions FEMA is proposing in this rulemaking apply to the regulations 
for the FMA program, which is a voluntary grant program that provides 
funding for activities designed to reduce the risk of flood damage to 
structures insured under the NFIP. When FEMA undertakes specific 
actions that may have effects on floodplain management, FEMA follows 
the procedures set forth in 44 CFR part 9 to assure compliance with 
this Executive Order. These procedures include a specific, 8-step 
process for conducting floodplain management and wetland reviews. The 
proposed rule would not change this process.

J. Executive Order 11990, Protection of Wetlands

    Pursuant to Executive Order 11990, each agency must provide 
leadership and take action to minimize the destruction, loss or 
degradation of wetlands, and to preserve and enhance the natural and 
beneficial values of wetlands in carrying out the agency's 
responsibilities for (1) acquiring, managing, and disposing of Federal 
lands and facilities; and (2) providing Federally undertaken, financed, 
or assisted construction and improvements; and (3) conducting Federal 
activities and programs affecting land use, including but not limited 
to water and related land resources planning, regulating, and licensing 
activities. Each agency, to the extent permitted by law, must avoid 
undertaking or providing assistance for new construction located in 
wetlands unless the head of the agency finds (1) that there is no 
practicable alternative to such construction, and (2) that the proposed 
action includes all practicable measures to minimize harm to wetlands 
which may result from such use. In making this finding the head of the 
agency may take into account economic, environmental and other 
pertinent factors.
    In carrying out the activities described in the Executive Order, 
each agency must consider factors relevant to a proposal's effect on 
the survival and quality of the wetlands. Among these factors are: 
Public health, safety, and welfare, including water supply, quality, 
recharge and discharge; pollution; flood and storm hazards; and 
sediment and erosion; maintenance of natural systems, including 
conservation and long-term productivity of existing flora and fauna, 
species and habitat diversity and stability, hydrologic utility, fish, 
wildlife, timber, and food and fiber resources; and other uses of 
wetlands in the public interest, including recreational, scientific, 
and cultural uses.
    The requirements of Executive Order 11990 apply in the context of 
the provision of Federal financial assistance relating to, among other 
things, construction and property improvement activities. However, the 
changes proposed in this rule would not have an effect on land use or 
wetlands. The purpose of the proposed rule is to update FEMA's HMA 
program regulations to reflect statutory changes that have already been 
implemented. While the proposed rule would revise the regulations for 
FMA administered by the NFIP, it would not impact other NFIP 
regulations that pertain to land

[[Page 53502]]

use, floodplain management, or flood insurance. The majority of the 
revisions FEMA is proposing in this rulemaking apply to the regulations 
for the FMA program, which is a voluntary grant program that provides 
funding for activities designed to reduce the risk of flood damage to 
structures insured under the NFIP. When FEMA undertakes specific 
actions that may have effects on wetlands, FEMA follows the procedures 
set forth in 44 CFR part 9 to assure compliance with this Executive 
Order. These procedures include a specific, 8-step process for 
conducting floodplain management and wetland reviews. The proposed rule 
would not change this process.

K. Executive Order 12898, Environmental Justice

    Pursuant to Executive Order 12898, Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations, 59 FR 7629, February 16, 1994, as amended by Executive 
Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates 
environmental justice into its 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 programs, denying persons the benefits of programs, or 
subjecting persons to discrimination because of race, color, or 
national origin.
    This rulemaking will not have a disproportionately high or adverse 
effect on human health or the environment. This rulemaking will not 
have a disproportionately high or adverse effect on human health or the 
environment. Therefore the requirements of Executive Order 12898 do not 
apply to this rule.

L. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5 
U.S.C. 801-808, before a rule can take effect, the Federal agency 
promulgating the rule must submit to Congress and to the Government 
Accountability Office (GAO) a copy of the rule, a concise general 
statement relating to the rule, including whether it is a major rule, 
the proposed effective date of the rule, a copy of any cost-benefit 
analysis, descriptions of the agency's actions under the Regulatory 
Flexibility Act and the Unfunded Mandates Reform Act, and any other 
information or statements required by relevant executive orders.
    FEMA will send this rule to the Congress and to GAO pursuant to the 
CRA if the rule is finalized. The rule is not a major rule within the 
meaning of the CRA. It will not have an annual effect on the economy of 
$100,000,000 or more, it will not result in a major increase in costs 
or prices for consumers, individual industries, Federal, State, or 
local government agencies, or geographic regions, and it will not have 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.

List of Subjects

44 CFR Part 77

    Flood insurance, Grant programs.

44 CFR Parts 78 and 79

    Flood insurance, Grant programs.

44 CFR Part 80

    Disaster assistance, Grant programs.

44 CFR Part 201

    Administrative practice and procedure, Disaster assistance, Grant 
programs, Reporting and recordkeeping requirements.

44 CFR Part 206

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

    For the reasons set forth in the preamble, FEMA proposes to amend 
44 CFR parts 77, 78, 79, 80, 201, and 206 as follows:

PART 78--[REMOVED AND RESERVED]

0
1. Remove and reserve part 78 in its entirety.

PART 79--FLOOD MITIGATION GRANTS [REDESIGNATED AS PART 77 AND 
AMENDED]

0
2. Revise the authority citation for part 79 to read as follows:

    Authority: 6 U.S.C. 101 et seq.; 42 U.S.C. 4001 et seq.; 42 
U.S.C. 4104c, 4104d.
0
3. Redesignate part 79 as part 77 and amend the references to 
Sec. Sec.  79.1 through 79.9 as follows:

------------------------------------------------------------------------
                       Old section                          New section
------------------------------------------------------------------------
79.1....................................................            77.1
79.2....................................................            77.2
79.3....................................................            77.3
79.4....................................................            77.4
79.5....................................................            77.5
79.6....................................................            77.6
79.7....................................................            77.7
79.8....................................................            77.8
79.9....................................................            77.9
------------------------------------------------------------------------

0
4. Amend Sec.  77.1 by, revising the section heading and paragraphs (a) 
and (b), and removing paragraph (c).
    The revisions read as follows:


Sec.  77.1  Purpose and applicability.

    (a) The purpose of this part is to prescribe actions, procedures, 
and requirements for administration of the Flood Mitigation Assistance 
(FMA) grant program made available under the National Flood Insurance 
Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, 
as amended, 42 U.S.C. 4001 et seq. The purpose of the FMA program is to 
assist States, Indian Tribal governments, and communities for planning 
and carrying out mitigation activities designed to reduce the risk of 
flood damage to structures insured under the National Flood Insurance 
Program (NFIP).
    (b) This part applies to the administration of funds under the FMA 
program for which the application period opens on or after [EFFECTIVE 
DATE OF THE FINAL RULE].
0
5. Amend Sec.  77.2 by revising paragraphs (a) through (m) and adding 
paragraphs (n) through (q) to read as follows:


Sec.  77.2  Definitions.

    (a) Except as otherwise provided in this part, the definitions set 
forth in Sec.  59.1 of this subchapter are applicable to this part.
    (b) Applicant means the entity, such as a State or Indian Tribal 
government, applying to FEMA for a Federal award under the FMA program. 
Once funds have been awarded, the applicant becomes the recipient and 
may also be a pass-through entity.
    (c) Closeout means the process by which FEMA or the pass-through 
entity determines that all applicable administrative actions and all 
required work of the Federal award have been completed and takes 
actions as described in 2 CFR 200.343, ``Closeout.''
    (d) Community means:
    (1) A political subdivision, including any Indian Tribe, authorized 
Tribal organization, Alaska Native village or authorized native 
organization, that has zoning and building code jurisdiction over a 
particular area having special

[[Page 53503]]

flood hazards, and is participating in the NFIP; or
    (2) A political subdivision of a State or other authority that is 
designated by political subdivisions, all of which meet the 
requirements of paragraph (d)(1) of this section, to administer grants 
for mitigation activities for such political subdivisions.
    (e) Federal award means the Federal financial assistance a 
recipient or subrecipient receives directly from FEMA or indirectly 
from a pass-through entity. The terms ``award'' and ``grant'' may also 
be used to describe a Federal award under this part.
    (f) Indian Tribal government means any Federally recognized 
governing body of an Indian or Alaska Native Tribe, band, nation, 
pueblo, village, or community that the Secretary of Interior 
acknowledges to exist as an Indian Tribe under the Federally Recognized 
Indian Tribe List Act of 1994, 25 U.S.C. 479a. This does not include 
Alaska Native corporations, the ownership of which is vested in private 
individuals.
    (g) Management costs mean any indirect costs, administrative 
expenses, and other expenses not directly chargeable to a specific 
project that are reasonably incurred by a recipient or subrecipient in 
administering and managing an award or subaward.
    (h) Pass-through entity means a recipient that provides a subaward 
to a subrecipient to carry out part of the FMA program.
    (i) Recipient means the State or Indian Tribal government that 
receives a Federal award directly from FEMA to carry out an activity 
under the FMA program. A recipient may also be a pass-through entity. 
The term recipient does not include subrecipients.
    (j) Repetitive loss structure means a structure covered under an 
NFIP flood insurance policy that:
    (1) Has incurred flood-related damage on 2 occasions, in which the 
cost of repair, on average, equaled or exceeded 25% of the value of the 
structure at the time of each such flood event; and
    (2) At the time of the second incidence of flood related damage, 
the contract for flood insurance contains increased cost of compliance 
coverage.
    (k) Severe repetitive loss structure means a structure that is 
covered under an NFIP flood insurance policy and has incurred flood-
related damage:
    (1) For which 4 or more separate claims payments have been made 
under flood insurance coverage under subchapter B of this chapter, with 
the amount of each claim (including building and contents payments) 
exceeding $5,000, and with the cumulative amount of such claims 
payments exceeding $20,000; or
    (2) For which at least 2 separate flood insurance claims payments 
(building payments only) have been made, with cumulative amount of such 
claims exceeding the value of the insured structure.
    (l) State means any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, 
Guam, American Samoa, and the Commonwealth of the Northern Mariana 
Islands.
    (m) Subaward means an award provided by a pass-through entity to a 
subrecipient, for the subrecipient to carry out part of a Federal award 
received by the pass-through entity. It does not include payments to a 
contractor or payments to an individual that is a beneficiary of a 
Federal program. A subaward may be provided through any form of legal 
agreement, including an agreement that the pass-through entity 
considers a contract.
    (n) Subapplicant means a State agency, community, or Indian Tribal 
government submitting a subapplication to the applicant for assistance 
under the FMA program. Upon grant award, the subapplicant is referred 
to as the subrecipient.
    (o) Subrecipient means the State agency, community, or Indian 
Tribal government that receives a subaward from a pass-through entity 
for the subrecipient to carry out an activity under the FMA program.
    (p) Administrator means the head of the Federal Emergency 
Management Agency, or his/her designated representative.
    (q) Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative.
0
6. Amend Sec.  77.3 by revising paragraphs (a) through (c) and removing 
paragraph (d).
    The revisions read as follows:


Sec.  77.3  Responsibilities.

    (a) Federal Emergency Management Agency (FEMA). Administer and 
provide oversight to all FEMA-related hazard mitigation programs and 
grants, including:
    (1) Issue program implementation procedures, as necessary, which 
will include information on availability of funding;
    (2) Award all grants to the recipient after evaluating subaward 
applications for eligibility and ensuring compliance with applicable 
Federal laws, giving priority to such properties, or to the subset of 
such properties, as the Administrator may determine are in the best 
interest of the NFIF;
    (3) Provide technical assistance and training to State, local and 
Indian Tribal governments regarding the mitigation and grants 
management process;
    (4) Review and approve State, Indian Tribal, and local mitigation 
plans in accordance with part 201 of this chapter;
    (5) Comply with applicable Federal statutory, regulatory, and 
Executive Order requirements related to environmental and historic 
preservation compliance, including reviewing and supplementing, if 
necessary, the environmental analyses conducted by the State and 
subrecipient in accordance with applicable laws, regulations, and 
agency policy;
    (6) Monitor implementation of awards through quarterly reports; and
    (7) Review all closeout documentation for compliance and sending 
the recipient a request for additional supporting documentation, if 
needed.
    (b) Recipient. The recipient must have working knowledge of NFIP 
goals, requirements, and processes and ensure that the program is 
coordinated with other mitigation activities. Recipients will:
    (1) Have a FEMA approved Mitigation Plan in accordance with part 
201 of this chapter;
    (2) Provide technical assistance and training to communities on 
mitigation planning, mitigation project activities, developing subaward 
applications, and implementing approved subawards;
    (3) Prioritize and recommend subaward applications to be approved 
by FEMA, based on the applicable mitigation plan(s), other evaluation 
criteria, and the eligibility criteria described in Sec.  77.6;
    (4) Award FEMA-approved subawards;
    (5) Monitor and evaluate the progress of the mitigation activity in 
accordance with the approved original scope of work and budget through 
quarterly reports;
    (6) Closeout the subaward in accordance with 2 CFR 200.343 and 
200.344, and applicable FEMA guidance; and
    (7) Comply with program requirements under this part, grant 
management requirements identified under 2 CFR parts 200 and 3002, the 
grant agreement articles, and other applicable Federal, State, Tribal 
and local laws and regulations.
    (c) Subrecipient. The subrecipient (or subapplicant, as applicable) 
will:
    (1) Complete and submit subaward applications to the recipient for 
FMA planning and project subawards;

[[Page 53504]]

    (2) Implement all approved subawards;
    (3) Monitor and evaluate the progress of the mitigation activity in 
accordance with the approved original scope of work and budget through 
quarterly reports;
    (4) Comply with program requirements under this part, grant 
management requirements identified under 2 CFR parts 200 and 3002, the 
grant agreement articles, and other applicable Federal, State, Tribal 
and local laws and regulations; and
    (5) Closeout the subaward in accordance with 2 CFR 200.343 and 
200.344, and applicable FEMA guidance.
0
7. Revise Sec.  77.4 to read as follows:


Sec.  77.4  Availability of funding.

    (a) Allocation. (1) For the amount made available for the FMA 
program, the Administrator will allocate the available funds based upon 
criteria established for each application period. The criteria may 
include the number of NFIP policies, severe repetitive loss structures, 
repetitive loss structures, and any other factors the Administrator 
determines are in the best interest of the NFIF.
    (2) The amount of FMA funds used may not exceed $50,000 for any 
mitigation plan of a State or $25,000 for any mitigation plan of a 
community.
    (b) Cost share. All mitigation activities approved under the grant 
will be subject to the following cost share provisions:
    (1) For each severe repetitive loss structure, FEMA may contribute 
either:
    (i) Up to 100 percent of all eligible costs if the activities are 
technically feasible and cost effective; or
    (ii) Up to the amount of the expected savings to the NFIP for 
acquisition or relocation activities;
    (2) For repetitive loss structures, FEMA may contribute up to 90 
percent of the eligible costs;
    (3) For all other mitigation activities, FEMA may contribute up to 
75 percent of all eligible costs.
    (4) For projects that contain a combination of severe repetitive 
loss, repetitive loss, and/or other insured structures, the cost share 
will be calculated as appropriate for each type of structure submitted 
in the project subapplication.
    (c) Failure to make award within 5 years. Any FMA application or 
subapplication that does not receive a Federal award within 5 years of 
the application/subapplication submission date is considered to be 
denied, and any funding amounts allocated for such applications/
subapplications will be made available for other FMA awards and 
subawards.
0
8. Revise Sec.  77.5 to read as follows:


Sec.  77.5  Application process.

    (a) Applicant. (1) Applicants will be notified of the availability 
of funding for the FMA program pursuant to 2 CFR 200.202 and 200.203.
    (2) The applicant is responsible for soliciting applications from 
eligible communities, or subapplicants, and for reviewing and 
prioritizing applications prior to forwarding them to FEMA for review 
and award.
    (b) Subapplicant. Communities or other subapplicants who choose to 
apply must develop subapplications within the timeframes and 
requirements established by FEMA and must submit subapplications to the 
applicant.
0
9. Revise Sec.  77.6 to read as follows:


Sec.  77.6  Eligibility.

    (a) NFIP requirements. (1) States, Indian Tribal governments, and 
communities must be participating in the NFIP and may not be suspended 
or withdrawn under the program.
    (2) For projects that impact individual structures, for example, 
acquisitions and elevations, an NFIP policy for the structure must be 
in effect prior to the opening of the application period and be 
maintained for the life of the structure.
    (b) Plan requirement--(1) Applicants. States must have a FEMA-
approved mitigation plan meeting the requirements of Sec.  201.4 of 
this chapter that provides for reduction of flood losses to structures 
for which NFIP coverage is available. Indian Tribal governments must 
have a FEMA-approved mitigation plan meeting the requirements of Sec.  
201.7 of this chapter that provides for reduction of flood losses to 
structures for which NFIP coverage is available. The FEMA-approved 
mitigation plan is required at the time of application and award.
    (2) Subapplicants. To be eligible for FMA project grants, 
subapplicants must have an approved mitigation plan in accordance with 
part 201 of this chapter that provides for reduction of flood losses to 
structures for which NFIP coverage is available. The FEMA-approved 
mitigation plan is required at the time of application and award.
    (c) Eligible activities--(1) Planning. FMA planning grants may be 
used to develop or update State, Indian Tribal and/or local mitigation 
plans that meet the planning criteria outlined in part 201 of this 
chapter and provide for reduction of flood losses to structures for 
which NFIP coverage is available.
    (2) Projects. Projects funded under the FMA program are limited to 
activities that reduce flood damages to properties insured under the 
NFIP. Applications involving any activities for which implementation 
has already been initiated or completed are not eligible for funding, 
and will not be considered. Eligible activities are:
    (i) Acquisition of real property from property owners, and 
demolition or relocation of buildings and/or structures to areas 
outside of the floodplain to convert the property to open space use in 
perpetuity, in accordance with part 80 of this subchapter;
    (ii) Elevation of existing structures to at least base flood levels 
or higher, if required by FEMA or if required by any State or local 
ordinance, and in accordance with criteria established by the 
Administrator;
    (iii) Floodproofing of existing non-residential structures in 
accordance with the requirements of the NFIP or higher standards if 
required by FEMA or if required by any State or local ordinance, and in 
accordance with criteria established by the Administrator;
    (iv) Floodproofing of historic structures as defined in Sec.  59.1 
of this subchapter;
    (v) Demolition and rebuilding of properties to at least base flood 
levels or higher, if required by FEMA or if required by any State or 
local ordinance, and in accordance with criteria established by the 
Administrator;
    (vi) Localized flood risk reduction projects that lessen the 
frequency or severity of flooding and decrease predicted flood damages, 
and that do not duplicate the flood prevention activities of other 
Federal agencies. Non-localized flood risk reduction projects such as 
dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-
scale waterway channelization projects are not eligible;
    (vii) Elevation, relocation, or floodproofing of utilities; and
    (viii) Other mitigation activities not described or identified in 
(c)(2)(i) through (vii) of this section that are described in the 
State, Tribal or local mitigation plan.
    (3) Technical assistance. If a recipient applied for and was 
awarded at least $1 million in the prior fiscal year, that recipient 
may be eligible to receive a technical assistance grant for up to 
$50,000.
    (d) Minimum project criteria. In addition to being an eligible 
project type, mitigation grant projects must also:
    (1) Be in conformance with State, Tribal and/or local mitigation 
plans approved under part 201 of this chapter

[[Page 53505]]

for the jurisdiction where the project is located;
    (2) Be in conformance with applicable environmental and historic 
preservation laws, regulations, and agency policy, including parts 9 
and 60 of this chapter, and other applicable Federal, State, Tribal, 
and local laws and regulations;
    (3) Be technically feasible and cost-effective; or, eliminate 
future payments from the NFIF for severe repetitive loss structures 
through an acquisition or relocation activity;
    (4) Solve a problem independently, or constitute a functional 
portion of a long-term solution where there is assurance that the 
project as a whole will be completed. This assurance will include 
documentation identifying the remaining funds necessary to complete the 
project, and the timeframe for completing the project;
    (5) Consider long-term changes to the areas and entities it 
protects, and have manageable future maintenance and modification 
requirements. The subrecipient is responsible for the continued 
maintenance needed to preserve the hazard mitigation benefits of these 
measures; and
    (6) Not duplicate benefits available from another source for the 
same purpose or assistance that another Federal agency or program has 
more primary authority to provide.


Sec.  77.7  [Removed]

0
10. Remove Sec.  77.7 in its entirety.
0
11. Redesignate Sec.  77.8 as Sec.  77.7 and amend newly redesignated 
Sec.  77.7 by revising paragraphs (a) through (c) to read as follows:


Sec.  77.7  Allowable costs.

    (a) General. General policies for allowable costs for implementing 
awards and subawards are addressed in 2 CFR 200.101, 200.102, 200.400-
200.475.
    (1) Eligible management costs--(i) Recipient. Recipients are 
eligible to receive management costs consisting of a maximum of 10 
percent of the planning and project activities awarded to the 
recipient, each fiscal year under FMA. These costs must be included in 
the application to FEMA.
    (ii) Subrecipient. Subapplicants may include a maximum of 5 percent 
of the total funds requested for their subapplication for management 
costs to support the implementation of their planning or project 
activity. These costs must be included in the subapplication to the 
recipient.
    (2) Indirect costs. Indirect costs of administering the FMA program 
are eligible as part of the 10 percent management costs for the 
recipient or the 5 percent management costs of the subrecipient, but in 
no case do they make the recipient eligible for additional management 
costs that exceed the caps identified in paragraph (a)(1) of this 
section. In addition, all costs must be in accordance with the 
provisions of 2 CFR parts 200 and 3002.
    (b) Pre-award costs. FEMA may fund eligible pre-award costs related 
to developing the application or subapplication at its discretion and 
as funds are available. Recipients and subrecipients may be reimbursed 
for eligible pre-award costs for activities directly related to the 
development of the project or planning proposal. These costs can only 
be incurred during the open application period for the FMA program. 
Costs associated with implementation of the activity but incurred prior 
to award are not eligible. Therefore, activities where implementation 
is initiated or completed prior to award are not eligible and will not 
be reimbursed.
    (c) Duplication of benefits. Grant funds may not duplicate benefits 
received by or available to applicants, subapplicants and project 
participants from insurance, other assistance programs, legal awards, 
or any other source to address the same purpose. Such individual or 
entity must notify the recipient and FEMA of all benefits that it 
receives or anticipates from other sources for the same purpose. FEMA 
will reduce the subaward by the amounts available for the same purpose 
from another source.
* * * * *
0
12. Redesignate Sec.  77.9 as Sec.  77.8 and revise the newly 
redesignated Sec.  77.8 to read as follows:


Sec.  77.8  Grant administration.

    (a) General. Recipients must comply with the requirements contained 
in 2 CFR parts 200 and 3002 and FEMA award requirements, including 
submission of performance and financial status reports. Recipients must 
also ensure that subrecipients are aware of and comply with 2 CFR parts 
200 and 3002.
    (b) Cost overruns. (1) During the implementation of an approved 
grant, the recipient may find that actual costs are exceeding the 
approved award amount. While there is no guarantee of additional 
funding, FEMA will only consider requests made by the recipient to pay 
for such overruns if:
    (i) Funds are available to meet the requested increase in funding; 
and
    (ii) The amended grant award meets the eligibility requirements, 
including cost share requirements, identified in this section.
    (2) Recipients may use cost underruns from ongoing subawards to 
offset overruns incurred by another subaward(s) awarded under the same 
award. All costs for which funding is requested must have been included 
in the original subapplication's cost estimate. In cases where an 
underrun is not available to cover an overrun, the Administrator may, 
with justification from the recipient and subrecipient, use other 
available FMA funds to cover the cost overrun.
    (3) For all cost overruns that exceed the amount approved under the 
award, and which require additional Federal funds, the recipient must 
submit a written request with a recommendation, including a 
justification for the additional funding to the Regional Administrator 
for a determination. If approved, the Regional Administrator will 
increase the award through an amendment to the original award document.
    (c) Recapture. At the time of closeout, FEMA will recapture any 
funds provided to a State or a community under this part if the 
applicant has not provided the appropriate matching funds, the approved 
project has not been completed within the timeframes specified in the 
grant agreement, or the completed project does not meet the criteria 
specified in this part.
    (d) Remedies for noncompliance. FEMA may terminate an award or take 
other remedies for noncompliance in accordance with 2 CFR 200.338 
through 200.342.
    (e) Reconsideration. FEMA will reconsider determinations of 
noncompliance, additional award conditions, or its decision to 
terminate a Federal award. Requests for reconsideration must be made in 
writing to FEMA within 60 calendar days after receipt of a notice of 
the action, and in accordance with submission procedures set out in 
guidance. FEMA will notify the requester of the disposition of the 
request for reconsideration. If the decision is to grant the request 
for reconsideration, FEMA will take appropriate implementing action.
0
13. Add and reserve part 79.

PART 80--PROPERTY ACQUISITION AND RELOCATION FOR OPEN SPACE

0
14. Revise the authority citation for part 80 to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; the National Flood 
Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq.; Homeland 
Security Act of 2002, 6 U.S.C. 101.


[[Page 53506]]


0
15. Amend Sec.  80.3 by revising paragraphs (a) through (m) and adding 
paragraphs (n) and (o) to read as follows:


Sec.  80.3  Definitions.

    (a) Except as noted in this part, the definitions applicable to the 
funding program apply to implementation of this part. In addition, for 
purposes of this part:
    (b) Applicant means a State or Indian Tribal government applying to 
FEMA for a Federal award that will be accountable for the use of funds. 
Once funds have been awarded, the applicant becomes the recipient and 
may also be a pass-through entity.
    (c) Federal award means the Federal financial assistance that a 
recipient or subrecipient receives directly from FEMA or indirectly 
from a pass-through entity. The terms ``award'' and ``grant'' may also 
be used to describe a ``Federal award'' under this part.
    (d) Market Value means the price that the seller is willing to 
accept and a buyer is willing to pay on the open market and in an arm's 
length transaction.
    (e) National of the United States means a person within the meaning 
of the term as defined in the Immigration and Nationality Act, 8 U.S.C. 
1101(a)(22).
    (f) Pass-through entity means a recipient that provides a subaward 
to a subrecipient.
    (g) Purchase offer is the initial value assigned to the property, 
which is later adjusted by applicable additions and deductions, 
resulting in a final offer amount to a property owner.
    (h) Qualified alien means a person within the meaning of the term 
as defined at 8 U.S.C. 1641.
    (i) Qualified conservation organization means a qualified 
organization with a conservation purpose pursuant to 26 CFR 1.170A-14 
and applicable implementing regulations, that is such an organization 
at the time it acquires the property interest and that was such an 
organization at the time of the major disaster declaration, or for at 
least 2 years prior to the opening of the grant application period.
    (j) Recipient means the State or Tribal government that receives a 
Federal award directly from FEMA. A recipient may also be a pass-
through entity. The term recipient does not include subrecipients.
    (k) Subapplicant means the entity that submits an application for 
FEMA mitigation assistance to the State or Indian Tribal applicant/
recipient. With respect to open space acquisition projects under the 
Hazard Mitigation Grant Program (HMGP), this term has the same meaning 
as given to the term ``applicant'' in part 206, subpart N of this 
chapter. Upon grant award, the subapplicant is referred to as the 
subrecipient.
    (l) Subaward means an award provided by a pass-through entity to a 
subrecipient, for the subrecipient to carry out part of a Federal award 
received by the pass-through entity.
    (m) Subrecipient means the State agency, community or Indian Tribal 
government or other legal entity to which a subaward is awarded and 
which is accountable to the recipient for the use of the funds 
provided.
    (n) Administrator means the head of the Federal Emergency 
Management Agency, or his/her designated representative.
    (o) Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative.


Sec.  80.5  [Amended]

0
16. Amend Sec.  80.5 by removing the word ``grantee'' and adding in its 
place the word ``recipient'' in paragraphs (a)(1), (b) introductory 
text, (c) introductory text, (c)(1), (7) and (8); and by removing the 
word ``subgrantee'' and adding in its place the word ``subrecipient'' 
in the introductory text, paragraphs (a)(5), (b) introductory text, 
(b)(1) and (3), (c) introductory text, and (d).
0
17. Amend Sec.  80.9 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  80.9  Eligible and ineligible costs.

* * * * *
    (b) Pre-award costs. FEMA may fund eligible pre-award project costs 
at its discretion and as funds are available. Recipients and 
subrecipients may be reimbursed for eligible pre-award costs for 
activities directly related to the development of the project proposal. 
These costs can only be incurred during the open application period of 
the respective grant program. Costs associated with implementation of 
the project but incurred prior to grant award are not eligible. 
Therefore, activities where implementation is initiated or completed 
prior to award are not eligible and will not be reimbursed.
    (c) Duplication of benefits. Grant funds may not duplicate benefits 
received by or available to applicants, subapplicants and other project 
participants from insurance, other assistance programs, legal awards, 
or any other source to address the same purpose. Such individual or 
entity must notify the subapplicant and FEMA of all benefits that it 
receives, anticipates, or has available from other sources for the same 
purpose. FEMA will reduce the subaward by the amounts available for the 
same purpose from another source.
* * * * *
0
18. Amend Sec.  80.11 by revising paragraph (a) to read as follows:


Sec.  80.11  Project eligibility.

    (a) Voluntary participation. Eligible acquisition projects are 
those where the property owner participates voluntarily, and the 
recipient/subrecipient will not use its eminent domain authority to 
acquire the property for the open space purposes should negotiations 
fail.
* * * * *
0
19. Amend Sec.  80.13 by revising paragraph (a)(3) to read as follows:


Sec.  80.13  Application information.

    (a) * * *
    (3) The deed restriction language, which must be consistent with 
the FEMA model deed restriction that the local government will record 
with the property deeds. Any variation from the model deed restriction 
language can only be made with prior approval from FEMA's Office of 
Chief Counsel;
* * * * *
0
20. Revise Sec.  80.17 to read as follows:


Sec.  80.17  Project implementation.

    (a) Hazardous materials. The subrecipient must take steps to ensure 
it does not acquire or include in the project properties contaminated 
with hazardous materials by seeking information from property owners 
and from other sources on the use and presence of contaminants 
affecting the property from owners of properties that are or were 
industrial or commercial, or adjacent to such. A contaminated property 
must be certified clean prior to participation. This excludes permitted 
disposal of incidental demolition and household hazardous wastes. FEMA 
mitigation grant funds may not be used for clean up or remediation of 
contaminated properties.
    (b) Clear title. The subrecipient will obtain a title insurance 
policy demonstrating that fee title conveys to the subrecipient for 
each property to ensure that it acquires only a property with clear 
title. The property interest generally must transfer by a general 
warranty deed. Any incompatible easements or other encumbrances to the 
property must be extinguished before acquisition.
    (c) Purchase offer and supplemental payments. (1) The amount of 
purchase offer is the current market value of the property or the 
market value of the property immediately before the

[[Page 53507]]

relevant event affecting the property (``pre-event'').
    (i) The relevant event for Robert T. Stafford Disaster Relief and 
Emergency Assistance Act assistance under HMGP is the major disaster 
under which funds are available; for assistance under the Pre-disaster 
Mitigation program (PDM) (42 U.S.C. 5133), it is the most recent major 
disaster. Where multiple disasters have affected the same property, the 
recipient and subrecipient will determine which is the relevant event.
    (ii) The relevant event for assistance under the National Flood 
Insurance Act is the most recent event resulting in a National Flood 
Insurance Program (NFIP) claim of at least $5000.
    (2) The recipient should coordinate with the subrecipient in their 
determination of whether the valuation should be based on pre-event or 
current market value. Generally, the same method to determine market 
value should be used for all participants in the project.
    (3) A property owner who did not own the property at the time of 
the relevant event, or who is not a National of the United States or 
qualified alien, is not eligible for a purchase offer based on pre-
event market value of the property. Subrecipients who offer pre-event 
market value to the property owner must have already obtained 
certification during the application process that the property owner is 
either a National of the United States or a qualified alien.
    (4) Certain tenants who must relocate as a result of the project 
are entitled to relocation benefits under the Uniform Relocation 
Assistance and Real Property Acquisition Act (such as moving expenses, 
replacement housing rental payments, and relocation assistance advisory 
services) in accordance with 49 CFR part 24.
    (5) If a purchase offer for a residential property is less than the 
cost of the homeowner-occupant to purchase a comparable replacement 
dwelling outside the hazard-prone area in the same community, 
subrecipients for mitigation grant programs may make such a payment 
available in accordance with criteria determined by the Administrator.
    (6) The subrecipient must inform each property owner, in writing, 
of what it considers to be the market value of the property, the method 
of valuation and basis for the purchase offer, and the final offer 
amount. The offer will also clearly state that the property owner's 
participation in the project is voluntary.
    (d) Removal of existing buildings. Existing incompatible facilities 
must be removed by demolition or by relocation outside of the hazard 
area within 90 days of settlement of the property transaction. The FEMA 
Regional Administrator may grant an exception to this deadline only for 
a particular property based upon written justification if extenuating 
circumstances exist, but will specify a final date for removal.
    (e) Deed Restriction. The subrecipient, upon settlement of the 
property transaction, must record with the deed of the subject property 
notice of applicable land use restrictions and related procedures 
described in this part, consistent with FEMA model deed restriction 
language.
0
21. Amend Sec.  80.19 by revising paragraphs (a) introductory text, 
(a)(3), and (b) through (e) to read as follows:


Sec.  80.19  Land use and oversight.

* * * * *
    (a) Open space requirements. The property must be dedicated and 
maintained in perpetuity as open space for the conservation of natural 
floodplain functions.
* * * * *
    (3) Any improvements on the property must be in accordance with 
proper floodplain management policies and practices. Structures built 
on the property according to paragraph (a)(2) of this section must be 
floodproofed or elevated to at least the base flood level plus 1 foot 
of freeboard, or greater, if required by FEMA, or if required by any 
State or local ordinance, and in accordance with criteria established 
by the Administrator.
* * * * *
    (b) Subsequent transfer. After acquiring the property interest, the 
subrecipient, including successors in interest, will convey any 
interest in the property only if the Regional Administrator, through 
the State, gives prior written approval of the transferee in accordance 
with this paragraph.
    (1) The request by the subrecipient, through the State, to the 
Regional Administrator must include a signed statement from the 
proposed transferee that it acknowledges and agrees to be bound by the 
terms of this section, and documentation of its status as a qualified 
conservation organization if applicable.
    (2) The subrecipient may convey a property interest only to a 
public entity or to a qualified conservation organization. However, the 
subrecipient may convey an easement or lease to a private individual or 
entity for purposes compatible with the uses described in paragraph (a) 
of this section, with the prior approval of the Regional Administrator, 
and so long as the conveyance does not include authority to control and 
enforce the terms and conditions of this section.
    (3) If title to the property is transferred to a public entity 
other than one with a conservation mission, it must be conveyed subject 
to a conservation easement that must be recorded with the deed and must 
incorporate all terms and conditions set forth in this section, 
including the easement holder's responsibility to enforce the easement. 
This must be accomplished by one of the following means:
    (i) The subrecipient will convey, in accordance with this paragraph 
(b), a conservation easement to an entity other than the title holder, 
which must be recorded with the deed, or
    (ii) At the time of title transfer, the subrecipient will retain 
such conservation easement, and record it with the deed.
    (4) Conveyance of any property interest must reference and 
incorporate the original deed restrictions providing notice of the 
conditions in this section and must incorporate a provision for the 
property interest to revert to the subrecipient or recipient in the 
event that the transferee ceases to exist or loses its eligible status 
under this section.
    (c) Inspection. FEMA, its representatives and assigns, including 
the recipient will have the right to enter upon the property, at 
reasonable times and with reasonable notice, for the purpose of 
inspecting the property to ensure compliance with the terms of this 
part, the property conveyance and of the grant award.
    (d) Monitoring and reporting. Every 3 years the subrecipient (in 
coordination with any current successor in interest) through the 
recipient, must submit to the FEMA Regional Administrator a report 
certifying that the subrecipient has inspected the property within the 
month preceding the report, and that the property continues to be 
maintained consistent with the provisions of this part, the property 
conveyance and the grant award.
    (e) Enforcement. The subrecipient, recipient, FEMA, and their 
respective representatives, successors and assigns, are responsible for 
taking measures to bring the property back into compliance if the 
property is not maintained according to the terms of this part, the 
conveyance, and the grant award. The relative rights and 
responsibilities of FEMA, the recipient, the subrecipient, and 
subsequent holders of the property interest at the time of enforcement, 
include the following:

[[Page 53508]]

    (1) The recipient will notify the subrecipient and any current 
holder of the property interest in writing and advise them that they 
have 60 days to correct the violation. If the subrecipient or any 
current holder of the property interest fails to demonstrate a good 
faith effort to come into compliance with the terms of the grant within 
the 60-day period, the recipient will enforce the terms of the grant by 
taking any measures it deems appropriate, including but not limited to 
bringing an action at law or in equity in a court of competent 
jurisdiction.
    (2) FEMA, its representatives, and assignees may enforce the terms 
of the grant by taking any measures it deems appropriate, including but 
not limited to 1 or more of the following:
    (i) Withholding FEMA mitigation awards or assistance from the State 
and subrecipient; and current holder of the property interest.
    (ii) Requiring transfer of title. The subrecipient or the current 
holder of the property interest will bear the costs of bringing the 
property back into compliance with the terms of the grant; or
    (iii) Bringing an action at law or in equity in a court of 
competent jurisdiction against any or all of the following parties: the 
recipient, the subrecipient, and their respective successors.
0
22. Amend Sec.  80.21 by revising the introductory text and paragraph 
(d) to read as follows:


Sec.  80.21  Closeout requirements.

    Upon closeout of the grant, the subrecipient, through the 
recipient, must provide FEMA, with the following:
* * * * *
    (d) Identification of each property as a repetitive loss structure, 
if applicable; and
* * * * *

PART 201--MITIGATION PLANNING

0
23. Revise the authority citation for part 201 to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act 
of 2002, 6 U.S.C. 101.

0
24. Amend Sec.  201.1 by revising paragraph (a) to read as follows:


Sec.  201.1  Purpose.

    (a) The purpose of this part is to provide information on the 
policies and procedures for mitigation planning as required by the 
provisions of section 322 of the Stafford Act, 42 U.S.C. 5165.
* * * * *
0
25. Revise Sec.  201.2 to read as follows:


Sec.  201.2  Definitions.

    Administrator means the head of the Federal Emergency Management 
Agency, or his/her designated representative.
    Applicant means the entity applying to FEMA for a Federal award 
that will be accountable for the use of funds.
    Federal award means the Federal financial assistance that a 
recipient or subrecipient receives directly from FEMA or indirectly 
from a pass-through entity. The term ``grant'' or ``award'' may also be 
used to describe a Federal award under this part.
    Flood Mitigation Assistance (FMA) means the program authorized by 
section 1366 of the National Flood Insurance Act of 1968, as amended, 
42 U.S.C. 4104c, and implemented at part 77.
    Hazard mitigation means any sustained action taken to reduce or 
eliminate the long-term risk to human life and property from hazards.
    Hazard Mitigation Grant Program (HMGP) means the program authorized 
under section 404 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5170c, and implemented at part 206, 
subpart N of this chapter.
    Indian Tribal government means any Federally recognized governing 
body of an Indian or Alaska Native Tribe, band, nation, pueblo, 
village, or community that the Secretary of Interior acknowledges to 
exist as an Indian Tribe under the Federally Recognized Indian Tribe 
List Act of 1994, 25 U.S.C. 479a. This does not include Alaska Native 
corporations, the ownership of which is vested in private individuals.
    Local government is any county, municipality, city, town, township, 
public authority, school district, special district, intrastate 
district, council of governments (regardless of whether the council of 
governments is incorporated as a nonprofit corporation under State 
law), regional or interstate government entity, or agency or 
instrumentality of a local government; any Indian Tribe or authorized 
Tribal organization, or Alaska Native village or organization; and any 
rural community, unincorporated town or village, or other public 
entity.
    Managing State means a State to which FEMA has delegated the 
authority to administer and manage the HMGP under the criteria 
established by FEMA pursuant to 42 U.S.C. 5170c(c). FEMA may also 
delegate authority to Tribal governments to administer and manage the 
HMGP as a Managing State.
    Pass-through entity means a recipient that provides a subaward to a 
subrecipient to carry out part of a Federal program.
    Pre-Disaster Mitigation Program (PDM) means the program authorized 
under section 203 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5133.
    Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative.
    Recipient means the government that receives a Federal award 
directly from FEMA. A recipient may also be a pass-through entity. The 
term recipient does not include subrecipients. The recipient is the 
entire legal entity even if only a particular component of the entity 
is designated in the grant award document. Generally, the State is the 
recipient. However, an Indian Tribal government may choose to be a 
recipient, or may act as a subrecipient under the State. An Indian 
Tribal government acting as recipient will assume the responsibilities 
of a ``State'', as described in this part, for the purposes of 
administering the grant.
    Repetitive loss structure means a structure as defined at Sec.  
77.2 of this chapter.
    Severe repetitive loss structure is a structure as defined at Sec.  
77.2 of this chapter.
    Small and impoverished communities means a community of 3,000 or 
fewer individuals that is identified by the State as a rural community, 
and is not a remote area within the corporate boundaries of a larger 
city; is economically disadvantaged, by having an average per capita 
annual income of residents not exceeding 80 percent of national, per 
capita income, based on best available data; the local unemployment 
rate exceeds by one percentage point or more, the most recently 
reported, average yearly national unemployment rate; and any other 
factors identified in the State Plan in which the community is located.
    The Stafford Act refers to the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act, Public Law 93-288, as amended (42 U.S.C. 
5121-5207).
    State is any State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, 
American Samoa, and the Commonwealth of the Northern Mariana Islands.
    State Hazard Mitigation Officer is the official representative of 
State government who is the primary point of contact with FEMA, other 
Federal agencies, and local governments in mitigation planning and 
implementation of mitigation programs

[[Page 53509]]

and activities required under the Stafford Act.
    Subapplicant means an entity submitting a subapplication to the 
applicant for a subaward to carry out part of a Federal award.
    Subaward means an award provided by a pass-through entity to a 
subrecipient for the subrecipient to carry out part of a Federal award.
    Subrecipient means the entity that receives a subaward from a pass-
through entity. Depending on the program, subrecipients of hazard 
mitigation assistance subawards can be a State agency, local 
government, private nonprofit organization, or Indian Tribal 
government. Subrecipients of FMA subawards can be a State agency, 
community, or Indian Tribal government, as described in 44 CFR part 77. 
Indian Tribal governments acting as a subrecipient are accountable to 
the State recipient.
0
26. Amend Sec.  201.3 by revising paragraphs (a), (b)(2), (c)(1), and 
(e)(1) to read as follows:


Sec.  201.3  Responsibilities.

    (a) General. This section identifies the key responsibilities of 
FEMA, States, and local/Tribal governments in carrying out section 322 
of the Stafford Act, 42 U.S.C. 5165.
    (b) * * *
    (2) Provide technical assistance and training to State, local, and 
Indian Tribal governments regarding the mitigation planning process;
* * * * *
    (c) * * *
    (1) Prepare and submit to FEMA a Standard State Mitigation Plan 
following the criteria established in Sec.  201.4 as a condition of 
receiving non-emergency Stafford Act assistance and FEMA mitigation 
grants. In accordance with Sec.  77.6(b) of this chapter, applicants 
and subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
* * * * *
    (e) * * *
    (1) Prepare and submit to FEMA a Tribal Mitigation Plan following 
the criteria established in Sec.  201.7 as a condition of receiving 
non-emergency Stafford Act assistance and FEMA mitigation grants as a 
recipient. This plan will also allow Indian Tribal governments to apply 
through the State, as a subrecipient, for any FEMA mitigation project 
grant. In accordance with Sec.  77.6(b) of this chapter, applicants and 
subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
* * * * *
0
27. Amend Sec.  201.4 by revising paragraphs (c)(2) through (4) to read 
as follows:


Sec.  201.4  Standard State Mitigation Plans.

* * * * *
    (c) * * *
    (2) Risk assessments that provide the factual basis for activities 
proposed in the strategy portion of the mitigation plan. Statewide risk 
assessments must characterize and analyze natural hazards and risks to 
provide a statewide overview. This overview will allow the State to 
compare potential losses throughout the State and to determine their 
priorities for implementing mitigation measures under the strategy, and 
to prioritize jurisdictions for receiving technical and financial 
support in developing more detailed local risk and vulnerability 
assessments. The risk assessment must include the following:
    (i) An overview of the type and location of all natural hazards 
that can affect the State, including information on previous 
occurrences of hazard events, as well as the probability of future 
hazard events, using maps where appropriate;
    (ii) An overview and analysis of the State's vulnerability to the 
hazards described in this paragraph (c)(2), based on estimates provided 
in local risk assessments as well as the State risk assessment. The 
State must describe vulnerability in terms of the jurisdictions most 
threatened by the identified hazards, and most vulnerable to damage and 
loss associated with hazard events. State owned or operated critical 
facilities located in the identified hazard areas must also be 
addressed;
    (iii) An overview and analysis of potential losses to the 
identified vulnerable structures, based on estimates provided in local 
risk assessments as well as the State risk assessment. The State must 
estimate the potential dollar losses to State owned or operated 
buildings, infrastructure, and critical facilities located in the 
identified hazard areas.
    (3) A Mitigation Strategy that provides the State's blueprint for 
reducing the losses identified in the risk assessment. This section 
must include:
    (i) A description of State goals to guide the selection of 
activities to mitigate and reduce potential losses.
    (ii) A discussion of the State's pre- and post-disaster hazard 
management policies, programs, and capabilities to mitigate the hazards 
in the area, including: An evaluation of State laws, regulations, 
policies, and programs related to hazard mitigation as well as to 
development in hazard-prone areas; a discussion of State funding 
capabilities for hazard mitigation projects; and a general description 
and analysis of the effectiveness of local mitigation policies, 
programs, and capabilities.
    (iii) An identification, evaluation, and prioritization of cost-
effective, environmentally sound, and technically feasible mitigation 
actions and activities the State is considering and an explanation of 
how each activity contributes to the overall mitigation strategy. This 
section should be linked to local plans, where specific local actions 
and projects are identified.
    (iv) Identification of current and potential sources of Federal, 
State, local, or private funding to implement mitigation activities.
    (v) In accordance with Sec.  77.6(b) of this chapter, applicants 
and subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
    (4) A section on the Coordination of Local Mitigation Planning that 
includes the following:
    (i) A description of the State process to support, through funding 
and technical assistance, the development of local mitigation plans.
    (ii) A description of the State process and timeframe by which the 
local plans will be reviewed, coordinated, and linked to the State 
Mitigation Plan.
    (iii) Criteria for prioritizing communities and local jurisdictions 
that would receive planning and project grants under available funding 
programs, which should include consideration for communities with the 
highest risks, repetitive loss structures, and most intense development 
pressures. Further, that for non-planning grants, a principal criterion 
for prioritizing grants will be the extent to which benefits are 
maximized according to a cost benefit review of proposed projects and 
their associated costs.
* * * * *
0
28. Amend Sec.  201.6 by revising paragraphs (a) through (c) to read as 
follows:


Sec.  201.6  Local Mitigation Plans.

* * * * *
    (a) Plan requirements. (1) A local government must have a 
mitigation plan

[[Page 53510]]

approved pursuant to this section in order to receive HMGP project 
grants. A local government must have a mitigation plan approved 
pursuant to this section in order to apply for and receive mitigation 
project grants under all other mitigation grant programs.
    (2) Plans prepared for the FMA program, described at part 77 of 
this chapter, need only address these requirements as they relate to 
flood hazards in order to be eligible for FMA project grants. However, 
these plans must be clearly identified as being flood mitigation plans, 
and they will not meet the eligibility criteria for other mitigation 
grant programs, unless flooding is the only natural hazard the 
jurisdiction faces.
    (3) Regional Administrators may grant an exception to the plan 
requirement in extraordinary circumstances, such as in a small and 
impoverished community, when justification is provided. In these cases, 
a plan will be completed within 12 months of the award of the project 
grant. If a plan is not provided within this timeframe, the project 
grant will be terminated, and any costs incurred after notice of 
grant's termination will not be reimbursed by FEMA.
    (4) Multi-jurisdictional plans (e.g. watershed plans) may be 
accepted, as appropriate, as long as each jurisdiction has participated 
in the process and has officially adopted the plan. State-wide plans 
will not be accepted as multi-jurisdictional plans.
    (b) Planning process. An open public involvement process is 
essential to the development of an effective plan. In order to develop 
a more comprehensive approach to reducing the effects of natural 
disasters, the planning process must include:
    (1) An opportunity for the public to comment on the plan during the 
drafting stage and prior to plan approval;
    (2) An opportunity for neighboring communities, local and regional 
agencies involved in hazard mitigation activities, and agencies that 
have the authority to regulate development, as well as businesses, 
academia and other private and nonprofit interests to be involved in 
the planning process; and
    (3) Review and incorporation, if appropriate, of existing plans, 
studies, reports, and technical information.
    (c) Plan content. The plan must include the following:
    (1) Documentation of the planning process used to develop the plan, 
including how it was prepared, who was involved in the process, and how 
the public was involved.
    (2) A risk assessment that provides the factual basis for 
activities proposed in the strategy to reduce losses from identified 
hazards. Local risk assessments must provide sufficient information to 
enable the jurisdiction to identify and prioritize appropriate 
mitigation actions to reduce losses from identified hazards. The risk 
assessment must include:
    (i) A description of the type, location, and extent of all natural 
hazards that can affect the jurisdiction. The plan must include 
information on previous occurrences of hazard events and on the 
probability of future hazard events.
    (ii) A description of the jurisdiction's vulnerability to the 
hazards described in paragraph (c)(2)(i) of this section. This 
description must include an overall summary of each hazard and its 
impact on the community. All plans approved after October 1, 2008 must 
also address NFIP insured structures that have been repetitively 
damaged by floods. The plan should describe vulnerability in terms of:
    (A) The types and numbers of existing and future buildings, 
infrastructure, and critical facilities located in the identified 
hazard areas;
    (B) An estimate of the potential dollar losses to vulnerable 
structures identified in paragraph (c)(2)(ii)(A) of this section and a 
description of the methodology used to prepare the estimate;
    (C) Providing a general description of land uses and development 
trends within the community so that mitigation options can be 
considered in future land use decisions.
    (iii) For multi-jurisdictional plans, the risk assessment section 
must assess each jurisdiction's risks where they vary from the risks 
facing the entire planning area.
    (3) A mitigation strategy that provides the jurisdiction's 
blueprint for reducing the potential losses identified in the risk 
assessment, based on existing authorities, policies, programs and 
resources, and its ability to expand on and improve these existing 
tools. This section must include:
    (i) A description of mitigation goals to reduce or avoid long-term 
vulnerabilities to the identified hazards.
    (ii) A section that identifies and analyzes a comprehensive range 
of specific mitigation actions and projects being considered to reduce 
the effects of each hazard, with particular emphasis on new and 
existing buildings and infrastructure. All plans approved by FEMA after 
October 1, 2008, must also address the jurisdiction's participation in 
the NFIP, and continued compliance with NFIP requirements, as 
appropriate.
    (iii) An action plan describing how the actions identified in 
paragraph (c)(3)(ii) of this section will be prioritized, implemented, 
and administered by the local jurisdiction. Prioritization will include 
a special emphasis on the extent to which benefits are maximized 
according to a cost benefit review of the proposed projects and their 
associated costs.
    (iv) For multi-jurisdictional plans, there must be identifiable 
action items specific to the jurisdiction requesting FEMA approval or 
credit of the plan.
    (4) A plan maintenance process that includes:
    (i) A section describing the method and schedule of monitoring, 
evaluating, and updating the mitigation plan within a five-year cycle.
    (ii) A process by which local governments incorporate the 
requirements of the mitigation plan into other planning mechanisms such 
as comprehensive or capital improvement plans, when appropriate.
    (iii) Discussion on how the community will continue public 
participation in the plan maintenance process.
    (5) Documentation that the plan has been formally adopted by the 
governing body of the jurisdiction requesting approval of the plan 
(e.g., City Council, County Commissioner, Tribal Council). For multi-
jurisdictional plans, each jurisdiction requesting approval of the plan 
must document that it has been formally adopted.
* * * * *
0
29. Amend Sec.  201.7 by revising paragraphs (a), (c), and (d) to read 
as follows:


Sec.  201.7  Tribal Mitigation Plans.

* * * * *
    (a) Plan requirement. (1) Indian Tribal governments applying to 
FEMA as a recipient must have an approved Tribal Mitigation Plan 
meeting the requirements of this section as a condition of receiving 
non-emergency Stafford Act assistance and FEMA mitigation grants. 
Emergency assistance provided under 42 U.S.C. 5170a, 5170b, 5173, 5174, 
5177, 5179, 5180, 5182, 5183, 5184, 5192 will not be affected. 
Mitigation planning grants provided through the PDM program, authorized 
under section 203 of the Stafford Act, 42 U.S.C. 5133, will also 
continue to be available.
    (2) Indian Tribal governments applying through the State as a 
subrecipient must have an approved Tribal Mitigation Plan meeting the 
requirements of this section in order to receive HMGP project grants. A 
Tribe must have an approved Tribal Mitigation Plan in order to apply 
for and receive FEMA mitigation project grants under all other 
mitigation grant programs. The provisions in

[[Page 53511]]

Sec.  201.6(a)(3) are available to Tribes applying as subrecipients.
    (3) Multi-jurisdictional plans (e.g. county-wide or watershed 
plans) may be accepted, as appropriate, as long as the Indian Tribal 
government has participated in the process and has officially adopted 
the plan. Indian Tribal governments must address all the elements 
identified in this section to ensure eligibility as a recipient or as a 
subrecipient.
* * * * *
    (c) Plan content. The plan must include the following:
    (1) Documentation of the planning process used to develop the plan, 
including how it was prepared, who was involved in the process, and how 
the public was involved. This must include:
    (i) An opportunity for the public to comment on the plan during the 
drafting stage and prior to plan approval, including a description of 
how the Indian Tribal government defined ``public;''
    (ii) As appropriate, an opportunity for neighboring communities, 
Tribal and regional agencies involved in hazard mitigation activities, 
and agencies that have the authority to regulate development, as well 
as businesses, academia, and other private and nonprofit interests to 
be involved in the planning process;
    (iii) Review and incorporation, if appropriate, of existing plans, 
studies, and reports; and
    (iv) Be integrated to the extent possible with other ongoing Tribal 
planning efforts as well as other FEMA programs and initiatives.
    (2) A risk assessment that provides the factual basis for 
activities proposed in the strategy to reduce losses from identified 
hazards. Tribal risk assessments must provide sufficient information to 
enable the Indian Tribal government to identify and prioritize 
appropriate mitigation actions to reduce losses from identified 
hazards. The risk assessment must include:
    (i) A description of the type, location, and extent of all natural 
hazards that can affect the Tribal planning area. The plan must include 
information on previous occurrences of hazard events and on the 
probability of future hazard events.
    (ii) A description of the Indian Tribal government's vulnerability 
to the hazards described in paragraph (c)(2)(i) of this section. This 
description must include an overall summary of each hazard and its 
impact on the Tribe. The plan should describe vulnerability in terms 
of:
    (A) The types and numbers of existing and future buildings, 
infrastructure, and critical facilities located in the identified 
hazard areas;
    (B) An estimate of the potential dollar losses to vulnerable 
structures identified in paragraph (c)(2)(ii)(A) of this section and a 
description of the methodology used to prepare the estimate;
    (C) A general description of land uses and development trends 
within the Tribal planning area so that mitigation options can be 
considered in future land use decisions; and
    (D) Cultural and sacred sites that are significant, even if they 
cannot be valued in monetary terms.
    (3) A mitigation strategy that provides the Indian Tribal 
government's blueprint for reducing the potential losses identified in 
the risk assessment, based on existing authorities, policies, programs 
and resources, and its ability to expand on and improve these existing 
tools. This section must include:
    (i) A description of mitigation goals to reduce or avoid long-term 
vulnerabilities to the identified hazards.
    (ii) A section that identifies and analyzes a comprehensive range 
of specific mitigation actions and projects being considered to reduce 
the effects of each hazard, with particular emphasis on new and 
existing buildings and infrastructure.
    (iii) An action plan describing how the actions identified in 
paragraph (c)(3)(ii) of this section will be prioritized, implemented, 
and administered by the Indian Tribal government.
    (iv) A discussion of the Indian Tribal government's pre- and post-
disaster hazard management policies, programs, and capabilities to 
mitigate the hazards in the area, including: An evaluation of Tribal 
laws, regulations, policies, and programs related to hazard mitigation 
as well as to development in hazard-prone areas; and a discussion of 
Tribal funding capabilities for hazard mitigation projects.
    (v) Identification of current and potential sources of Federal, 
Tribal, or private funding to implement mitigation activities.
    (vi) In accordance with Sec.  77.6(b) of this chapter, applicants 
and subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
    (4) A plan maintenance process that includes:
    (i) A section describing the method and schedule of monitoring, 
evaluating, and updating the mitigation plan.
    (ii) A system for monitoring implementation of mitigation measures 
and project closeouts.
    (iii) A process by which the Indian Tribal government incorporates 
the requirements of the mitigation plan into other planning mechanisms 
such as reservation master plans or capital improvement plans, when 
appropriate.
    (iv) Discussion on how the Indian Tribal government will continue 
public participation in the plan maintenance process.
    (v) A system for reviewing progress on achieving goals as well as 
activities and projects identified in the mitigation strategy.
    (5) The plan must be formally adopted by the governing body of the 
Indian Tribal government prior to submittal to FEMA for final review 
and approval.
    (6) The plan must include assurances that the Indian Tribal 
government will comply with all applicable Federal statutes and 
regulations in effect with respect to the periods for which it receives 
grant funding, including 2 CFR parts 200 and 3002. The Indian Tribal 
government will amend its plan whenever necessary to reflect changes in 
Tribal or Federal laws and statutes.
    (d) Plan review and updates. (1) Plans must be submitted to the 
appropriate FEMA Regional Office for formal review and approval. Indian 
Tribal governments who would like the option of being a subrecipient 
under the State must also submit their plan to the State Hazard 
Mitigation Officer for review and coordination.
    (2) The Regional review will be completed within 45 days after 
receipt from the Indian Tribal government, whenever possible.
    (3) Indian Tribal governments must review and revise their plan to 
reflect changes in development, progress in local mitigation efforts, 
and changes in priorities, and resubmit it for approval within 5 years 
in order to continue to be eligible for non-emergency Stafford Act 
assistance and FEMA mitigation grant funding.

PART 206--FEDERAL DISASTER ASSISTANCE

0
30. The authority citation for part 206 is revised to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act 
of 2002, 6 U.S.C. 101 et seq.; Department of Homeland Security 
Delegation 9001.1; sec. 1105, Pub. L. 113-2, 127 Stat. 43 (42 U.S.C. 
5189a note).

0
31. Revise Sec.  206.431 to read as follows:

[[Page 53512]]

Sec.  206.431  Definitions.

    Activity means any mitigation measure, project, or action proposed 
to reduce risk of future damage, hardship, loss or suffering from 
disasters.
    Applicant means the non-Federal entity consisting of a State or 
Indian Tribal government, applying to FEMA for a Federal award under 
the Hazard Mitigation Grant Program. Upon award, the applicant becomes 
the recipient and may also be a pass-through entity.
    Enhanced State Mitigation Plan is the hazard mitigation plan 
approved under 44 CFR part 201 as a condition of receiving increased 
funding under the HMGP.
    Grant application means the request to FEMA for HMGP funding, as 
outlined in Sec.  206.436, by a State or Tribal government that will 
act as recipient.
    Grant award means total of Federal and non-Federal contributions to 
complete the approved scope of work.
    Indian Tribal government means any Federally recognized governing 
body of an Indian or Alaska Native Tribe, band, nation, pueblo, 
village, or community that the Secretary of Interior acknowledges to 
exist as an Indian Tribe under the Federally Recognized Indian Tribe 
List Act of 1994, 25 U.S.C. 479a. This does not include Alaska Native 
corporations, the ownership of which is vested in private individuals. 
Indian Tribal governments have the option to apply as an applicant or 
subapplicant.
    Local Mitigation Plan is the hazard mitigation plan required of a 
local government acting as a subrecipient as a condition of receiving a 
project subaward under the HMGP as outlined in 44 CFR 201.6.
    Pass-through entity means a recipient that provides a subaward to a 
subrecipient.
    Recipient means the State or Indian Tribal government that receives 
a Federal award directly from FEMA. A recipient may also be a pass-
through entity. The term recipient does not include subrecipients. The 
recipient is the entire legal entity even if only a particular 
component of the entity is designated in the grant award document. 
Generally, the State is the recipient. However, an Indian Tribal 
government may choose to be a recipient, or may act as a subrecipient 
under the State. An Indian Tribal government acting as recipient will 
assume the responsibilities of a ``State'', as described in this part, 
for the purposes of administering the grant.
    Standard State Mitigation Plan is the hazard mitigation plan 
approved under 44 CFR part 201, as a condition of receiving Stafford 
Act assistance as outlined in Sec.  201.4 of this chapter.
    State Administrative Plan for the Hazard Mitigation Grant Program 
means the plan developed by the State to describe the procedures for 
administration of the HMGP.
    Subapplicant means the State agency, local government, eligible 
private nonprofit organization, or Indian Tribal government submitting 
a subapplication to the applicant for financial assistance under HMGP. 
Upon award, the subapplicant becomes the subrecipient.
    Subaward means an award provided by a pass-through entity to a 
subrecipient for the subrecipient to carry out part of a Federal award.
    Subaward application means the request to the recipient for HMGP 
funding by the eligible subrecipient, as outlined in Sec.  206.436.
    Subrecipient means the government or other legal entity to which a 
subaward is awarded and which is accountable to the recipient for the 
use of the funds provided. Subrecipients can be a State agency, local 
government, private nonprofit organization, or Indian Tribal government 
as outlined in Sec.  206.433. Indian Tribal governments acting as a 
subrecipient are accountable to the State recipient.
    Tribal Mitigation Plan is the hazard mitigation plan required of an 
Indian Tribal government acting as a recipient or subrecipient as a 
condition of receiving a project award or subaward under the HMGP as 
outlined in 44 CFR 201.7.
0
32. Amend Sec.  206.432 by revising paragraphs (b) introductory text, 
(b)(2) and (3), and (c) to read as follows:


Sec.  206.432  Federal grant assistance.

* * * * *
    (b) Amounts of assistance. The total Federal contribution of funds 
is based on the estimated aggregate grant amount to be made under the 
Stafford Act for the major disaster (less associated administrative 
costs), and must be as follows:
* * * * *
    (2) Twenty (20) percent. A State with an approved Enhanced State 
Mitigation Plan, in effect before the disaster declaration, which meets 
the requirements outlined in Sec.  201.5 of this subchapter will be 
eligible for assistance under the HMGP not to exceed 20 percent of such 
amounts, for amounts not more than $35.333 billion.
    (3) The estimates of Federal assistance under this paragraph (b) 
will be based on the Regional Administrator's estimate of all eligible 
costs, actual grants, and appropriate mission assignments.
    (c) Cost sharing. All mitigation measures approved under the 
State's grant will be subject to the cost sharing provisions 
established in the FEMA-State Agreement. FEMA may contribute up to 75 
percent of the cost of measures approved for funding under the Hazard 
Mitigation Grant Program for major disasters declared on or after June 
10, 1993. The non-Federal share may exceed the Federal share. FEMA will 
not contribute to costs above the Federally approved estimate.
0
33. Amend Sec.  206.433 by revising paragraph (a) to read as follows:


Sec.  206.433  State responsibilities.

    (a) Recipient. The State will be the recipient to which funds are 
awarded and will be accountable for the use of those funds. There may 
be subrecipients within the State government.
* * * * *
0
34. Amend Sec.  206.434 by revising paragraphs (a), (b), (c)(1) and 
(5), (d)(1), and (e) to read as follows:


Sec.  206.434  Eligibility.

    (a) Eligible entities. The following are eligible to apply for the 
Hazard Mitigation Program Grant:
    (1) Applicants--States and Indian Tribal governments;
    (2) Subapplicants--(i) State agencies and local governments;
    (ii) Private nonprofit organizations that own or operate a private 
nonprofit facility as defined in Sec.  206.221(e). A qualified 
conservation organization as defined at Sec.  80.3(h) of this chapter 
is the only private nonprofit organization eligible to apply for 
acquisition or relocation for open space projects;
    (iii) Indian Tribal governments.
    (b) Plan requirement. (1) Local and Indian Tribal government 
applicants for project subawards must have an approved local or Tribal 
Mitigation Plan in accordance with 44 CFR part 201 before receipt of 
HMGP subaward funding for projects.
    (2) Regional Administrators may grant an exception to this 
requirement in extraordinary circumstances, such as in a small and 
impoverished community when justification is provided. In these cases, 
a plan will be completed within 12 months of the award of the project 
subaward. If a plan is not provided within this timeframe, the project 
subaward will be terminated, and any costs incurred after notice of 
subaward's termination will not be reimbursed by FEMA.
    (c) * * *
    (1) Be in conformance with the State Mitigation Plan and Local or 
Tribal Mitigation Plan approved under 44 CFR part 201; or for Indian 
Tribal governments acting as recipients, be in

[[Page 53513]]

conformance with the Tribal Mitigation Plan approved under 44 CFR 
201.7;
* * * * *
    (5) Be cost-effective and substantially reduce the risk of future 
damage, hardship, loss, or suffering resulting from a major disaster. 
The recipient must demonstrate this by documenting that the project;
    (i) Addresses a problem that has been repetitive, or a problem that 
poses a significant risk to public health and safety if left unsolved,
    (ii) Will not cost more than the anticipated value of the reduction 
in both direct damages and subsequent negative impacts to the area if 
future disasters were to occur,
    (iii) Has been determined to be the most practical, effective, and 
environmentally sound alternative after consideration of a range of 
options,
    (iv) Contributes, to the extent practicable, to a long-term 
solution to the problem it is intended to address,
    (v) Considers long-term changes to the areas and entities it 
protects, and has manageable future maintenance and modification 
requirements.
    (d) Eligible activities--(1) Planning. Up to 7% of the State's HMGP 
award may be used to develop State, Tribal and/or local mitigation 
plans to meet the planning criteria outlined in 44 CFR part 201.
* * * * *
    (e) Property acquisitions and relocation requirements. Property 
acquisitions and relocation projects for open space proposed for 
funding pursuant to a major disaster declared on or after December 3, 
2007 must be implemented in accordance with part 80 of this chapter.
* * * * *


Sec.  206.435  [Amended]

0
35. Amend Sec.  206.435 by removing the word ``shall'' and adding in 
its place the word ``will'' in the last sentence of paragraph (a).
0
36. Amend Sec.  206.436 by revising paragraphs (a), (b), (c) 
introductory text, (c)(1), (e), and (g) to read as follows:


Sec.  206.436  Application procedures.

    (a) General. This section describes the procedures to be used by 
the recipient in submitting an application for HMGP funding. Under the 
HMGP, the State or Indian Tribal government is the recipient and is 
responsible for processing subawards to applicants in accordance with 2 
CFR parts 200 and 3002. Subrecipients are accountable to the recipient.
    (b) Governor's Authorized Representative. The Governor's Authorized 
Representative serves as the grant administrator for all funds provided 
under the Hazard Mitigation Grant Program. The Governor's Authorized 
Representative's responsibilities as they pertain to procedures 
outlined in this section include providing technical advice and 
assistance to eligible subrecipients, and ensuring that all potential 
applicants are aware of assistance available and submission of those 
documents necessary for grant award.
    (c) Hazard mitigation application. Upon identification of 
mitigation measures, the State (Governor's Authorized Representative) 
will submit its Hazard Mitigation Grant Program application to the FEMA 
Regional Administrator. The application will identify one or more 
mitigation measures for which funding is requested. The application 
must include a Standard Form (SF) 424, Application for Federal 
Assistance, SF 424D, Assurances for Construction Programs, if 
appropriate, and a narrative statement. The narrative statement will 
contain any pertinent project management information not included in 
the State's administrative plan for Hazard Mitigation. The narrative 
statement will also serve to identify the specific mitigation measures 
for which funding is requested. Information required for each 
mitigation measure must include the following:
    (1) Name of the subrecipient, if any;
* * * * *
    (e) Extensions. The State may request the Regional Administrator to 
extend the application time limit by 30 to 90 day increments, not to 
exceed a total of 180 days. The recipient must include a justification 
in its request.
* * * * *
    (g) Indian Tribal recipients. Indian Tribal governments may submit 
a SF 424 directly to the Regional Administrator.
0
37. Amend Sec.  206.437 by revising paragraphs (a), (b)(4)(i), (x), and 
(xiii), and (d) to read as follows:


Sec.  206.437  State administrative plan.

    (a) General. The State must develop a plan for the administration 
of the Hazard Mitigation Grant Program.
    (b) * * *
    (4) * * *
    (i) Identify and notify potential applicants (subrecipients) of the 
availability of the program;
* * * * *
    (x) Provide technical assistance as required to subrecipient(s);
* * * * *
    (xiii) Determine the percentage or amount of pass-through funds for 
management costs provided under 44 CFR part 207 that the recipient will 
make available to subrecipients, and the basis, criteria, or formula 
for determining the subrecipient percentage or amount.
* * * * *
    (d) Approval. The State must submit the administrative plan to the 
Regional Administrator for approval. Following each major disaster 
declaration, the State must prepare any updates, amendments, or plan 
revisions required to meet current policy guidance or changes in the 
administration of the Hazard Mitigation Grant Program. Funds will not 
be awarded until the State Administrative Plan is approved by the FEMA 
Regional Administrator.
0
38. Revise Sec.  206.438 to read as follows:


Sec.  206.438  Project management.

    (a) General. The State serving as recipient has primary 
responsibility for project management and accountability of funds as 
indicated in 2 CFR parts 200 and 3002 and 44 CFR part 206. The State is 
responsible for ensuring that subrecipients meet all program and 
administrative requirements.
    (b) Cost overruns. During the execution of work on an approved 
mitigation measure the Governor's Authorized Representative may find 
that actual project costs are exceeding the approved estimates. Cost 
overruns which can be met without additional Federal funds, or which 
can be met by offsetting cost underruns on other projects, need not be 
submitted to the Regional Administrator for approval, so long as the 
full scope of work on all affected projects can still be met. For cost 
overruns which exceed Federal obligated funds and which require 
additional Federal funds, the Governor's Authorized Representative will 
evaluate each cost overrun and submit a request with a recommendation 
to the Regional Administrator for a determination. The applicant's 
justification for additional costs and other pertinent material must 
accompany the request. The Regional Administrator will notify the 
Governor's Authorized Representative in writing of the determination 
and process a supplement, if necessary. All requests that are not 
justified must be denied by the Governor's Authorized Representative. 
In no case will the total amount obligated to the State exceed the 
funding limits set forth in Sec.  206.432(b). Any such problems or 
circumstances affecting project costs must be identified through the 
quarterly progress reports required in paragraph (c) of this section.
    (c) Progress reports. The recipient must submit a quarterly 
progress report

[[Page 53514]]

to FEMA indicating the status and completion date for each measure 
funded. Any problems or circumstances affecting completion dates, scope 
of work, or project costs which are expected to result in noncompliance 
with the approved grant conditions must be described in the report.
    (d) Payment of claims. The Governor's Authorized Representative 
will make a claim to the Regional Administrator for reimbursement of 
allowable costs for each approved measure. In submitting such claims 
the Governor's Authorized Representative must certify that reported 
costs were incurred in the performance of eligible work, that the 
approved work was completed and that the mitigation measure is in 
compliance with the provisions of the FEMA-State Agreement. The 
Regional Administrator will determine the eligible amount of 
reimbursement for each claim and approve payment. If a mitigation 
measure is not completed, and there is not adequate justification for 
noncompletion, no Federal funding will be provided for that measure.
    (e) Audit requirements. Uniform audit requirements as set forth in 
2 CFR parts 200 and 3002 and 44 CFR part 206 apply to all grant 
assistance provided under this subpart. FEMA may elect to conduct a 
Federal audit on the disaster assistance award or on any of the 
subawards.


Sec.  206.439  [Amended]

0
39. Amend Sec.  206.439 by revising the second sentence of paragraph 
(c) to read as follows:


Sec.  206.439  Allowable costs.

* * * * *
    (c) * * * Recipients and subrecipients may be reimbursed for 
eligible pre-award costs for activities directly related to the 
development of the project or planning proposal. * * *
0
40. Amend Sec.  206.440 by revising the introductory text and 
paragraphs (a), (b) heading, (c) heading, (c)(2) and (3), (d), and 
(e)(3) to read as follows:


Sec.  206.440  Appeals.

    An eligible applicant, subrecipient, or recipient may appeal any 
determination previously made related to an application for or the 
provision of Federal assistance according to the procedures in this 
section.
    (a) Format and content. The applicant or recipient will make the 
appeal in writing through the recipient to the Regional Administrator. 
The recipient-will review and evaluate all subrecipient appeals before 
submission to the Regional Administrator. The recipient may make 
recipient-related appeals to the Regional Administrator. The appeal 
must contain documented justification supporting the appellant's 
position, specifying the monetary figure in dispute and the provisions 
in Federal law, regulation, or policy with which the appellant believes 
the initial action was inconsistent.
* * * * *
    (b) Levels of appeal.
* * * * *
    (c) Time limits.
* * * * *
    (2) The recipient will review and forward appeals from an applicant 
or subrecipient, with a written recommendation, to the Regional 
Administrator within 60 days of receipt.
    (3) Within 90 days following receipt of an appeal, the Regional 
Administrator (for first appeals) or Assistant Administrator for the 
Mitigation Directorate (for second appeals) will notify the recipient 
in writing of the disposition of the appeal or of the need for 
additional information. A request by the Regional Administrator or 
Assistant Administrator for the Mitigation Directorate for additional 
information will include a date by which the information must be 
provided. Within 90 days following the receipt of the requested 
additional information or following expiration of the period for 
providing the information, the Regional Administrator or Assistant 
Administrator for the Mitigation Directorate will notify the recipient 
in writing of the disposition of the appeal. If the decision is to 
grant the appeal, the Regional Administrator will take appropriate 
implementing action.
    (d) Technical advice. In appeals involving highly technical issues, 
the Regional Administrator or Assistant Administrator for the 
Mitigation Directorate may, at his or her discretion, submit the appeal 
to an independent scientific or technical person or group having 
expertise in the subject matter of the appeal for advice or 
recommendation. The period for this technical review may be in addition 
to other allotted time periods. Within 90 days of receipt of the 
report, the Regional Administrator or Assistant Administrator for the 
Mitigation Directorate will notify the recipient in writing of the 
disposition of the appeal.
    (e) * * *
    (3) The decision of the FEMA official at the next higher appeal 
level will be the final administrative decision of FEMA.

Pete Gaynor,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2020-16004 Filed 8-27-20; 8:45 am]
BILLING CODE 9110-11-P

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