# FEMA’s Public Assistance Program: A Primer and Considerations for Congress > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR46749 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** April 1, 2021 - **Citation:** R46749 ## Text FEMA’s Public Assistance Program: A Primer and Considerations for Congress April 1, 2021 Congressional Research Service https://crsreports.congress.gov R46749 SUMMARY FEMA’s Public Assistance Program: A Primer and Considerations for Congress The Federal Emergency Management Agency’s (FEMA) Public Assistance (PA) Program is central to contemporary U.S. federal emergency and disaster relief. Over the past 10 years, PA has been authorized in every county, parish, and municipality in the United States. The reconstruction of entire infrastructure systems following Hurricane Katrina, mass evacuations ahead of California wildfires, and emergency medical care during the Coronavirus Disease 2019 (COVID-19) pandemic were all funded through PA. R46749 April 1, 2021 Erica A. Lee Analyst in Emergency Management and Disaster Recovery Administered by FEMA, the PA Program assists state, tribal, territorial, and local governments and certain nonprofits with both urgent response and long-term recovery work following a presidential declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act, as amended, P.L. 93-288). The Stafford Act provides PA for response and recovery through a federalist model intended to supplement—not supplant—nonfederal resources. FEMA and the state, tribe, or territory that received a declaration jointly administer PA, and the costs are shared between the federal government and nonfederal entities receiving assistance. Congress has addressed the scope, timeliness, and cost of PA in recent legislation and hearings, often in the wake of severe disasters, The Sandy Recovery Improvement Act of 2013 (Division B of P.L. 113-2;) and the Disaster Recovery Reform Act of 2018 (Division D of P.L. 115-254) included modifications to PA authorities that may expedite the completion of PA projects, reduce PA spending, and promote work that mitigates the risk of future damage. Still, as the frequency and severity of PA-eligible disasters mounted in recent years, so did the utilization and cost of PA. This report summarizes PA Program authorities and requirements. It also presents considerations relevant to the following policy questions for Congress:  How, if at all, may Congress seek to respond to recent PA spending increases?  How can the federal government effectively oversee the PA Program while swiftly assisting disaster-stricken communities? How, if at all, may Congress promote resilience through PA?      How will the federal government address delays in PA project completion and recovery? FEMA’s Public Assistance Program Obligations FY2000-FY2020 (billions) Source: CRS analysis of data provided by FEMA Office of Congressional and Legislative Affairs. To promote the timely and cost effectiveexecution of PA projects, Congress recently authorized Alternative Procedures. Has the implementation of Alternative Procedures met these goals? How may Congress seek to address the potential strain of PA on local, state, and federal workforce capacity, given the demands of grant management? To what extent should FEMA exercise discretion in determining what costs are eligible for PA? Congressional Research Service FEMA’s Public Assistance Program: A Primer and Considerations for Congress Contents Introduction ..................................................................................................................................... 1 Scope and Structure of Report .................................................................................................. 1 Program Overview .......................................................................................................................... 2 Requesting, Authorizing, and Administering PA ...................................................................... 4 Requesting and Authorizing Public Assistance for Emergencies........................................ 4 Requesting and Authorizing Public Assistance for Major Disasters ................................... 5 PA Recipients and Applicants ............................................................................................. 8 Eligibility .................................................................................................................................. 9 Applicants ......................................................................................................................... 10 Facility .............................................................................................................................. 10 Work................................................................................................................................... 11 Costs.................................................................................................................................. 14 PA Requirements and Procedures............................................................................................ 15 Cost-Share ......................................................................................................................... 15 Insurance Requirements .................................................................................................... 16 Public Assistance Funding Procedures ............................................................................. 17 Building Standards ............................................................................................................ 22 Mitigation Activities ......................................................................................................... 23 PA Funding .................................................................................................................................... 24 DRF Obligations for PA .......................................................................................................... 24 Scale of PA Expenditures ........................................................................................................ 25 Trends in PA Expenditures ...................................................................................................... 27 Obligations by Category ................................................................................................... 27 Obligations by Hazard Type ............................................................................................. 27 Obligations by State .......................................................................................................... 29 Congressional Considerations ....................................................................................................... 29 Cost of PA Program ................................................................................................................. 30 Oversight Challenges .............................................................................................................. 33 Promoting Resilience Through PA .......................................................................................... 35 Project Execution Delays ........................................................................................................ 36 Strained Federal, State, and Local Workforce Capacity.......................................................... 38 Alternative Procedures ............................................................................................................ 41 Agency Discretion ................................................................................................................... 42 Concluding Observations .............................................................................................................. 44 Figures Figure 1. Forms of Public Assistance Authorized Under Stafford Act Declarations ....................... 4 Figure 2. Stafford Act Declaration Request Process ....................................................................... 6 Figure 3. Structure of FEMA Public Assistance Program Administration ...................................... 9 Figure 4. FEMA’s PA Program Eligibility Pyramid ...................................................................... 10 Figure 5. Funding Scenarios for Large Projects Under Alternative and Standard Public Assistance Procedures ................................................................................................................ 21 Figure 6. Disaster RF Obligations by Category, Fiscal Years 2000-2020 ..................................... 25 Congressional Research Service FEMA’s Public Assistance Program: A Primer and Considerations for Congress Figure 7. FEMA’s Public Assistance Program Obligations, Fiscal Years 2000-2020 ................... 25 Figure 8. FEMA’s Public Assistance Program Obligations by Category, Fiscal Years 2000-2020................................................................................................................................... 27 Figure 9. FEMA’s Public Assistance Program Obligations by Hazard, Fiscal Years 20002020 ............................................................................................................................................ 28 Figure 10. FEMA’s Public Assistance Program Obligations by State and Territory, Fiscal Years 2000-2020......................................................................................................................... 29 Figure A-1. FEMA-reported PA Obligations for FY2020 by Incident .......................................... 46 Figure A-2. FEMA-reported PA Obligations including COVID-19, FY2000-2020 ..................... 47 Figure B-1. FEMA’s Public Assistance Reimbursement Process ................................................. 49 Tables Table 1. Public Assistance Authorizing Statutes ............................................................................. 3 Table 2. FEMA’s Public Assistance Standard Procedures vs. Alternative Procedures ................. 20 Appendixes Appendix A. Snapshot of PA for COVID-19................................................................................. 45 Appendix B. Public Assistance Reimbursement Process .............................................................. 48 Appendix C. Public Assistance Alternative Procedures Guidance Bibliography .......................... 52 Appendix D. List of Acronyms ..................................................................................................... 54 Contacts Author Information........................................................................................................................ 54 Congressional Research Service FEMA’s Public Assistance Program: A Primer and Considerations for Congress Introduction In terms of cost, scope, and application, Federal Emergency Management Agency’s (FEMA) Public Assistance (PA) Program is arguably the most extensive general disaster relief program active in the United States today. Over the past 10 years, Presidents have authorized PA for every county in the United States. On average, PA accounts for the largest share of obligations from the Disaster Relief Fund (DRF), and spending is increasing. PA obligations have increased in the past three years, and reached a new high in FY2020 (see “PA Funding”). Administered by the FEMA, PA is often the first federal assistance to be authorized and the last to close out in a disaster-stricken community. Under the authorities of the Robert T. Stafford Emergency Assistance and Disaster Relief Act (the Stafford Act, as amended, P.L. 93-288),1 the President may authorize PA to provide a range of assistance through an emergency or major disaster declaration. PA has funded mass evacuations ahead of California wildfires, emergency medical care during the Coronavirus Disease 2019 (COVID-19) pandemic, and the reconstruction of entire infrastructure systems damaged by Hurricane Katrina.2 The PA Program faces historic demands. At this moment in the 117th Congress, PA is authorized in every locality in the United States to provide relief from the COVID-19 pandemic—an unprecedented use of PA. Additionally, some jurisdictions have concurrent PA authorizations for additional incidents, including 2020 flooding in the Midwest, the 2020 flooding and dam breaches in Michigan, the December 2020 Nashville bombing, and early 2021 severe winter storms in Texas, Oklahoma, and Louisiana.3 Over the past decade, Congress has revised key PA authorities to address the complexity, growing cost, and expanding scope of the PA Program. This report summarizes issues facing the 117th Congress during this period of extensive utilization of the PA Program. Scope and Structure of Report This report includes three major sections:    The first part provides an overview of PA statutory authorities, rules, policies, and administration. The second part discusses the funding of the PA Program and describes trends in historical DRF obligations for PA, including the growth in PA expenditures and the breakdown of PA obligations by type of work, hazard, and geography. The third part offers considerations for Congress regarding the PA Program. Considerations include PA spending increases, oversight issues, and promoting resilience. This report additionally includes the following appendices: 1 42 U.S.C. §§5121 et seq. 2 FEMA, “Six Counties Receive Federal Help with Wildfire Debris Removal,” Sept. 5, 2020, https://www.fema.gov/ press-release/20201016/six-counties-receive-federal-help-wildfire-debris-removal; FEMA, “Mississippi Hurricane Katrina: A Decade of Progress Through Partnerships,” https://www.fema.gov/media-library-data/143921527891927b976d9ae441db76490d3399bdfe16b/Hurricane-Katrina-10-Year-MS-Statewide.pdf; CRS Analysis of OpenFEMA, “Public Assistance Funded Projects—Details,” as of August 2, 2020. 3 FEMA, “Declared Disasters,” https://www.fema.gov/disasters/disaster-declarations? field_dv2_state_territory_tribal_value=All&field_year_value=All&field_dv2_declaration_type_value=All& field_dv2_incident_type_target_id_selective=All. Congressional Research Service 1 FEMA’s Public Assistance Program: A Primer and Considerations for Congress     Appendix A includes a snapshot of PA deployed to respond to the COVID-19 pandemic. Appendix B describes how FEMA delivers PA funds to disaster-stricken entities. Appendix C provides a bibliography of guidance for PA Alternative Procedures, a variation on the standard procedures FEMA uses to deliver PA. Appendix D provides a list of acronyms referenced in the report. Program Overview The PA Program provides assistance to states, tribes, territories, local governments, and eligible nonprofits—not businesses, individuals, or homeowners (many of whom are eligible for assistance through other programs). PA is not automatically authorized for all incidents; it is only authorized when the President declares an emergency or major disaster declaration under the Stafford Act (see “Requesting, Authorizing, and Administering PA”).4 Like all Stafford Act assistance, PA is designed to supplement—not supplant—nonfederal resources for emergency response and recovery. The federal government shares the cost of work eligible for PA (see “Cost-Share”) with nonfederal entities receiving assistance. PA awards fund the costs of response activities (referred to as PA emergency work), including debris removal and emergency protective measures, or recovery (referred to as PA permanent work), meaning the costs of restoring or replacing eligible disaster-damaged public and nonprofit facilities. The DRF funds PA administration and awards along with other types of Stafford Act assistance.5 Terms Within this report, the term “state” refers to states and territories. For purposes of the Stafford Act, “‘State’ means any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands” (42 U.S.C. §5122(4)). The term “tribes” refers to Indian tribal governments. Per the Stafford Act, “[t]he term ‘Indian tribal government’ means the governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian tribe under the Federally Recognized Indian Tribe List Act of 1994” (42 U.S.C. §5122(6)). Generally, Stafford Act assistance is requested by the “governor” (i.e., “the chief executive of any State” (42 U.S.C. §5122(5)), or the “chief executive” (i.e., “the person who is the Chief, Chairman, Governor, President, or similar executive official of an Indian tribal government” (42 U.S.C. §5122(12)). The term “Recipient” in this report refers to “an entity that receives a Federal award directly from a Federal awarding agency to carry out an activity” and the term “Applicant” refers to entities that are responsible for PA projects, per FEMA, Public Assistance Program and Policy Guide (PAPPG 2020), FP 104-009-2, effective June 1, p. 2122, https://www.fema.gov/media-library-data/1525468328389-4a038bbef9081cd7dfe7538e7751aa9c/ PAPPG_3.1_508_FINAL_5-4-2018.pdf (hereinafter FEMA, PAPPG 2020). See, for example, Stafford Act Section 403(a); 42 U.S.C. § 5170b(a), which states that “[i]n any major disaster, the President may” provide certain assistance, and, “Federal agencies may on the direction of the President, provide assistance essential to meeting immediate threats to life and property resulting from a major disaster, as follows…” See also 44 C.F.R. §206.240(b). For more information on declarations, see CRS Report R42702, Stafford Act Declarations 1953-2016: Trends, Analyses, and Implications for Congress, by Bruce R. Lindsay. 5 For more information on the Disaster Relief Fund, see CRS Report R45484, The Disaster Relief Fund: Overview and Issues, by William L. Painter. 4 Congressional Research Service 2 FEMA’s Public Assistance Program: A Primer and Considerations for Congress “Nonfederal” describes resources, entities, or authorities exclusive of the federal governments. Some nonfederal entities may apply for PA, becoming PA Applicants. This report refers to state, local, tribal, and territorial governments as SLTTs. PA is authorized by multiple sections of the Stafford Act (see Table 1).6 Recent statutory revisions of PA include those enacted under the Sandy Recovery Improvement Act (SRIA, Division B of P.L. 113-2; see “Alternative Procedures”)7 and the Disaster Recovery Reform Act of 2018 (DRRA; Division D of P.L. 115-254) explicitly undertaken to reduce costs, increase the flexibility of the program, and promote resilience in PA-funded work (see “Building Standards” and “Promoting Resilience Through PA”).8 FEMA administers PA;9 agency rules governing the PA Program are promulgated in 44 C.F.R. §206. The statutory and regulatory frameworks governing PA are further interpreted and detailed in numerous FEMA guidance and policy documents describing program procedures and disasterspecific rules, among other items.10 Table 1. Public Assistance Authorizing Statutes Stafford Act Section Assistance Authorized Section 407, 428, or 502 Emergency Work: Debris Removala Section 402, 403, 418, 419, or 502c Emergency Work: Emergency Protective Measuresa Section 406 or Section 428 Permanent Work: Roads/Bridgesb Section 406 or Section 428 Permanent Work: Water Control Facilitiesb Section 406 or Section 428 Permanent Work: Buildings/Equipmentb Section 406 or Section 428 Permanent Work: Utilitiesb Section 406 or Section 428 Permanent Work: Parks, Recreational, and Other Facilitiesb Section 324 Management of Public Assistance and Hazard Mitigation Assistance Grantsa Source: FEMA, Public Assistance Program and Policy Guide, FP 104-009-2, effective June 1, 2020, pp. 17-18. Notes: 6 The Stafford Act additionally authorizes the President to provide Individual Assistance (IA), which helps families and individuals respond to post-disaster needs, and Hazard Mitigation Assistance, which helps communities execute projects that may reduce the loss of life and property from future disasters. For more information, see CRS Report R46014, FEMA Individual Assistance Programs: An Overview, by Elizabeth M. Webster; CRS Insight IN11187, Federal Emergency Management Agency (FEMA) Hazard Mitigation Assistance, by Diane P. Horn. 7 The Sandy Recovery Improvement Act (SRIA), P.L. 113-2; Stafford Act Section 428. The Public Assistance Program Alternative Procedures are codified at Section 1102 of SRIA; 42 U.S.C. §5189f. 8 See explanation of revised PA authorities in U.S. Congress, House Committee on Transportation and Infrastructure, Disaster Recovery Reform Act, report to accompany H.R. 4460, 115th Cong., 2nd sess., H.Rept. 115-1098, part 1 (Washington, DC: GPO, 2018), pp. 15-16; see also U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Disaster Recovery Reform Act of 2018, report to accompany S. 3041, 115th Cong., 2nd sess., S.Rept. 115-446, (Washington, DC: GPO, 2018), pp. 2-4 and Section 1102 of SRIA; 42 U.S.C. §5189f(c). 9 Executive Order 12148. 10 See, for example, FEMA, “Policy, Guide, and Fact Sheets,” https://www.fema.gov/assistance/public/policyguidance-fact-sheets; FEMA, “Other Public Assistance Policies and Guidance,” https://www.fema.gov/assistance/ public/policy-guidance-fact-sheets/other. Congressional Research Service 3 FEMA’s Public Assistance Program: A Primer and Considerations for Congress a. b. c. This type of assistance may be made available if authorized pursuant to a presidential declaration of emergency or major disaster. This type of assistance may only be made available if authorized pursuant to a presidential declaration of major disaster. PA authorized under Sections 402, 418, and 419 refer to Direct Federal Assistance. Requesting, Authorizing, and Administering PA PA is generally available to an affected community only if authorized by a presidential declaration of emergency or major disaster.11 PA emergency work may be authorized for both emergencies and major disasters, while permanent work may only be authorized for major disasters, as summarized in Figure 1. Figure 1. Forms of Public Assistance Authorized Under Stafford Act Declarations Sources: Developed by CRS based on 44 C.F.R. §206.204(c) and (d); and FEMA, Public Assistance Policy and Program Guide, FP 104-009-2, effective June 1, 2020, p. 51. Requesting and Authorizing Public Assistance for Emergencies The Stafford Act defines emergencies broadly: emergencies may be any incident that requires federal assistance to save lives; protect property as well as public health and safety; and lessen or avert the threat of catastrophe.12 Therefore, a Stafford Act emergency declaration may be issued before a hazard strikes—for example, when a hurricane is projected to make landfall—or after.13 PA emergency work is often the only type of federal assistance authorized for emergencies declared under the Stafford Act.14 11 See authorities under Stafford Act Sections 402, 403, 407, 418, 419, and 502; 42 U.S.C. §§5170a-5170b, 5173, 5185- 5186, 5192. While PA emergency work is also available under Fire Management Assistance Grants (FMAGs), the FMAG program is separate and distinct and administered separately. For more information on FMAGs, see CRS Report R43738, Fire Management Assistance Grants: Frequently Asked Questions, by Bruce R. Lindsay and Katie Hoover. 12 Stafford Act Section 102(1); 42 U.S.C. §5122(1). 13 Stafford Act Section 501; 42 U.S.C. §5191; 44 C.F.R. §206.35(a). 14 Other forms of Stafford Act assistance, including most forms of Individual Assistance and the Hazard Mitigation Grant Program, are not available under Emergency Declarations. These programs are available through a major disaster declaration under the Stafford Act. In very rare cares, emergency declarations may authorize the Individuals and Congressional Research Service 4 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Generally, a governor or tribal chief executive requests an emergency declaration after determining that a hazard will exceed state or tribal capacity to respond. Governors and tribal chief executives must describe the resources already deployed (including activation of emergency plans) and describe the types of federal assistance required in their request.15 FEMA then evaluates whether the incident’s “severity and magnitude” exceed the response capacity of SLTTs, therefore warranting PA.16 Separately, the President may unilaterally declare an emergency for incidents involving federal primary responsibility pursuant to Section 501(b) of the Stafford Act.17 It is rare, however, for the President to issue a declaration absent a governor or chief executive’s request. Historical invocations include incidents on federal property, for example, the attack on the Alfred P. Murrah federal courthouse in Oklahoma City and the Explosion of the Space Shuttle Columbia.18 In 2020, President Donald J. Trump declared a nationwide emergency for response to the COVID-19 pandemic under this authority—a declaration unprecedented in scope (see Appendix A).19 Requesting and Authorizing Public Assistance for Major Disasters The Stafford Act requires that governors or tribal chief executives make a request for a major disaster declaration; the President does not have authority to unilaterally issue such a declaration.20 PA for a major disaster can authorize federal reconstruction for major losses, which has totaled more than $10 billion for severe events like Hurricane Katrina, Superstorm Sandy, and Hurricane Maria.21 To assess the request, FEMA conducts a Preliminary Damage Assessment (PDA) jointly with state, local, tribal, and territorial officials (hereinafter SLTTs; see Figure 2). PDAs estimate the potential costs of major response and recovery activities.22 Households Program. See FEMA, “How a Disaster Gets Declared,” https://www.fema.gov/disasters/how-declared. 15 44 C.F.R. §206.35(c). 16 44 C.F.R. §206.35. 17 Stafford Act Section 501(b); 42 U.S.C. §5191(b). 18 FEMA, “Notice: Oklahoma; Emergency and Related Determinations,” 60 Federal Register 22579, May 8, 1995; FEMA, “Notice: Space Shuttle Columbia; Emergency and Related Determinations,” 68 Federal Register 9667, February 28, 2003. 19 FEMA, “COVID-19 Emergency Declaration,” Release Number: HQ-20-017-FactSheet, March 13, 2020, https://www.fema.gov/news-release/2020/03/13/covid-19-emergency-declaration. See also CRS Insight IN11251, The Stafford Act Emergency Declaration for COVID-19, by Erica A. Lee, Bruce R. Lindsay, and Elizabeth M. Webster; and CRS Report R46326, Stafford Act Declarations for COVID-19 FAQ, by Elizabeth M. Webster, Erica A. Lee, and William L. Painter. 20 Stafford Act Section 401(a)-(b); 42 U.S.C. §5170(a)-(b). 21 FEMA, “Louisiana Hurricane Katrina (DR-1603-LA),” https://www.fema.gov/disaster/1603; FEMA, “New York Hurricane Sandy (DR-4085-NY),” https://www.fema.gov/disaster/4085; FEMA, “Puerto Rico Hurricane Maria (DR4339-PR),” https://www.fema.gov/disaster/4339. 22 In practice, these estimates generally include the uninsured costs of emergency response and long-term reconstruction work. FEMA, FEMA Preliminary Damage Assessment Guide, May 2020, https://www.fema.gov/sites/ default/files/2020-07/fema_preliminary-disaster-assessment_guide.pdf; CRS Report R44977, Preliminary Damage Assessments for Major Disasters: Overview, Analysis, and Policy Observations, by Bruce R. Lindsay. Congressional Research Service 5 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Figure 2. Stafford Act Declaration Request Process Source: Developed by CRS based on 44 C.F.R. §§206.31-206.48. FEMA uses PDAs to analyze six factors established in agency regulations to assess a request for a major disaster for states, as defined by the Stafford Act.23 For requests from tribal chief executives, FEMA additionally considers factors including unique conditions (e.g., remote location), demographics, and economic impact.24 FEMA then recommends a course of action to the President.25 While no single factor is determinative, FEMA typically recommends the authorization of PA only if the estimated cost exceeds specific thresholds across the jurisdiction.26 The factors are: 1. Estimated Cost of Assistance: FEMA determines whether estimated costs of PA-eligible work across the jurisdiction exceed $1 million total across a state or territory or $250,000 across a tribe.27 Additionally, for states and territories, costs must meet or exceed annually adjusted per-capita thresholds across the county 23 44 C.F.R. §206.48. 24 For more information, see FEMA, Tribal Declarations Pilot Guidance, January 2017, pp. 34-36, https://www.fema.gov/sites/default/files/2020-04/tribal-declaration-pilot-guidance.pdf. 25 44 C.F.R. §206.48(a). 26 These thresholds are called “per-capita indicators.” GAO, Federal Disaster Assistance; Improved Criteria Needed to Assess a Jurisdiction’s Capability to Response and Recover on Its Own, GAO-12-838, September 2012, p. 24 (hereinafter GAO, Improved Criteria), https://www.gao.gov/assets/650/648162.pdf. 27 FEMA, “Tribal Declarations Pilot Guidance,” January 2017, https://www.fema.gov/sites/default/files/2020-04/tribaldeclaration-pilot-guidance.pdf. Congressional Research Service 6 FEMA’s Public Assistance Program: A Primer and Considerations for Congress 2. 3. 4. 5. 6. and the state or territory in need.28 In FY2021, the per-capita threshold across a state or territory requesting PA is $1.55, and across a county is $3.89.29 Localized Impacts: FEMA may recommend authorizing PA in cases of severe, concentrated damages, even when all cost of assistance thresholds are not met.30 For Indian tribal governments, FEMA considers additional factors, including the economic impact of the disaster and demographic factors of the affected population. Insurance Coverage in Force: FEMA reduces the estimated cost of PA based on the actual insurance coverage for PA-eligible work. If a facility is uninsured in violation of previous PA award requirements or Stafford Act insurance requirements (see “Insurance Requirements”), then FEMA will reduce the estimated cost of PA with respect to insurance requirements.31 Hazard Mitigation: FEMA considers how mitigation measures may have reduced the damages. To encourage community resilience efforts, FEMA may authorize PA even when estimated damages do not meet the per capita thresholds if mitigation may have reduced the cumulative losses. Recent Multiple Disasters: FEMA considers recent disasters within the disasteraffected jurisdiction to better assess the need for assistance. For example, if a state has exhausted its capacity in response to disasters in the previous 12-24 months, FEMA may consider authorizing assistance even if cost-of-assistance thresholds are not all met. Programs of Other Federal Assistance: FEMA considers whether disasterrelated needs may be more appropriately met through other federal assistance. Section 1239 of the Disaster Recovery Reform Act of 2018 (Division D of P.L. 115-254) required FEMA to review and update these factors, particularly the cost of assistance.32 In December 2020, FEMA published a notice of proposed rulemaking pursuant to this provision that would increase the cost-of-assistance thresholds to account for inflation and income within a jurisdiction.33 This rulemaking followed several recommendations from the U.S. Government Accountability Office (GAO) that FEMA increase the thresholds or identify a more accurate metric to measure state and 28 Annually adjusted statewide per capita indicators are available at FEMA, “Per Capita Impact Indicator and Project Thresholds,” https://www.fema.gov/assistance/public/applicants/per-capita-impact-indicator. 29 Ibid. 30 FEMA explains “This is particularly true where critical facilities (such as major roadways, bridges, public buildings, etc.) are affected or where localized per capita impacts are extremely high. For example, localized damages may be in the tens or even hundreds of dollars per capita, even though the overall statewide per capita impact is low.” FEMA, “Disaster Declaration Criteria Fact Sheet,” December 2019, provided by FEMA Office of Congressional and Legislative Affairs to CRS. 31 For more information, see FEMA, FEMA Preliminary Damage Assessment Guide, May 2020, pp. 63-64, https://www.fema.gov/sites/default/files/2020-07/fema_preliminary-disaster-assessment_guide.pdf. 32 See CRS Report R45819, The Disaster Recovery Reform Act of 2018 (DRRA): A Summary of Selected Statutory Provisions, coordinated by Elizabeth M. Webster and Bruce R. Lindsay. 33 FEMA, “Notice: Cost of Assistance Estimates in the Disaster Declaration Process for the Public Assistance Program,” notice of proposed rulemaking, 85 Federal Register 80719, December 14, 2020 (hereinafter FEMA, “Proposed Rule: Cost of Assistance Estimates”), https://www.federalregister.gov/documents/2020/12/14/2020-27094/ cost-of-assistance-estimates-in-the-disaster-declaration-process-for-the-public-assistance-program; FEMA, Disaster Recovery Reform Act (DRRA): Annual Report, October 2019, p. 7, https://www.fema.gov/media-library/assets/ documents/184634. Congressional Research Service 7 FEMA’s Public Assistance Program: A Primer and Considerations for Congress local fiscal capacity to respond and recover.34 If promulgated, the new rule would shift the costs of disasters that do not receive declarations to hazard-stricken states, tribes, territories, and local governments (see “Cost of PA Program” and “Strained Federal, State, and Local Workforce Capacity”).35 PA Recipients and Applicants If PA is authorized pursuant to a Stafford Act declaration, the state, tribe, or territory receiving the declaration becomes the PA primary grant Recipient (see Figure 3).36 FEMA and the Recipient execute a FEMA-State/Tribal/Territory Agreement (hereinafter FEMA-State Agreement), as appropriate.37 FEMA-State Agreements detail the understandings, terms, and commitments under which Stafford Act assistance, including PA, is to be provided.38 The incident period and the PA cost share are among these terms. To receive PA for permanent work, Recipients must additionally have a FEMA-approved hazard mitigation plan in place.39 Once the agreement is established, the Recipient administers PA awards for counties that are authorized to receive assistance under the relevant Stafford Act declarations.40 SLTTs as well as eligible nonprofits may apply for funding for specific projects as Applicants (see Figure 3). FEMA obligates funds for approved projects to the Recipient, which then reimburses Applicants for approved costs of completed work (for more information, see “Public Assistance Funding Procedures”). 34 GAO, Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction’s Capability to Respond and Recover on Its Own, GAO-12-838, September 2012, https://www.gao.gov/products/GAO-12-838. 35 See CRS Insight IN11534, Authorizing Stafford Act Public Assistance, by Erica A. Lee. 36 44 C.F.R. §§206.201(m), 202.202(b). 37 44 C.F.R. §206.44(a). 38 44 C.F.R. §206.44(a)-(b). 39 44 C.F.R. §206.226(b); for more information, see FEMA, “Hazard Mitigation Planning,” https://www.fema.gov/ emergency-managers/risk-management/hazard-mitigation-planning. 40 44 C.F.R. §206.202. FEMA outlines the requirements of Recipient administration and planning in FEMA, PAPPG 2020, pp. 26-28. Congressional Research Service 8 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Figure 3. Structure of FEMA Public Assistance Program Administration Source: CRS interpretation of 44 C.F.R. §§206.200-206.209. Eligibility Eligibility is a critical element of the PA Program. Because PA funding is not limited for a given incident, entity, or project once it is authorized, eligibility is often the primary constraint on PA spending.41 Even after PA is authorized for a particular county, municipality, or parish in the presidential Stafford Act declaration or amendment, PA eligibility must be established for each project. The Stafford Act, federal regulations, and FEMA policy restrict eligibility for PA by four primary criteria: Applicant, facilities, work, and costs. FEMA treats these criteria as an “eligibility pyramid,” as the eligibility of each tier depends on the tier below (see Figure 4). For example, only facilities legally owned or operated by eligible Applicants may receive PA. To receive PA funding, all four tiers of the pyramid must be met. These eligibility tiers are detailed in the following four sections. 41 FEMA occasionally releases disaster-specific guidance detailing specific costs or work that may be eligible for PA in the case of unusual or catastrophic disasters; for example, the COVID-19 pandemic or Hurricane María recovery in Puerto Rico. Congressional Research Service 9 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Figure 4. FEMA’s PA Program Eligibility Pyramid Source: CRS interpretation of FEMA, Public Assistance Program and Policy Guide, v. 4, effective June 1, 2020, p. 38. Applicants The Stafford Act limits entities who may receive PA to SLTTs as well as certain private nonprofits. Eligible nonprofits are those that perform services often or otherwise performed by governmental bodies, defined as critical services42 or non-critical, “essential” services43 available to the general public. Nonprofits providing critical services include educational, utility, irrigation, emergency, medical, rehabilitational, and temporary or permanent custodial care facilities.44 Nonprofits providing non-critical but essential services include community centers, libraries, homeless shelters, food banks, broadcasting facilities, houses of worship, senior citizen centers, and rehabilitation facilities.45 For-profit businesses are ineligible for PA. However, eligible Applicants may contract for-profit entities to perform PA-eligible work and receive reimbursement through the PA Program for the costs of the contract.46 For example, a city eligible for PA debris removal may contract a landscaping company to remove fallen trees from city-owned property. The city could then pay the costs of the contract, and submit those costs to FEMA for reimbursement on a cost-share basis. Facility The Stafford Act limits the use of PA for repair and restoration to facilities owned or legally maintained by eligible Applicants.47 Facilities owned or legally maintained by private non-profits 42 See 42 U.S.C. §5122(11)(A), Section 102(11)(A) of the Stafford Act, and 44 C.F.R. §206.221(e). FEMA provides a full discussion on the eligibility of private non-profit organizations in FEMA, PAPPG 2020, pp. 43-47. 43 See 42 U.S.C. §5122(11)(B), Section 102(11)(B) of the Stafford Act, and 44 C.F.R. §206.221(e)(7). See also FEMA, PAPPG 2020, pp. 43-47. Section 20604 of the Bipartisan Budget Act of 2018 (P.L. 115-123) changed eligibility for houses of worship under the Stafford Act. Per 42 U.S.C. §5122(11)(B), “[n]o house of worship may be excluded from this definition because leadership or membership in the organization operating the house of worship is limited to persons who share a religious faith or practice.” 44 FEMA, PAPPG 2020, p. 12. 45 FEMA, PAPPG 2020, p. 13. 46 FEMA, PAPPG 2020, pp. 30-33. FEMA released a memorandum for COVID-19 procurement. FEMA, “Procurement Under Grants Conducted Under Emergency or Exigent Circumstances for COVID-19,” memorandum, March 17, 2020, https://www.fema.gov/media-library-data/1584457999950-7186ffa29ace3e6faf2ca2f764357013/ Procurement_Under_EE_Circumstances_Memo_final_508AB.pdf. See also FEMA, “Procurement Under Grants: Under Emergency or Exigent Circumstances,” fact sheet, March 20, 2020, https://www.fema.gov/news-release/2020/ 03/20/procurement-under-grants-under-exigent-or-emergency-circumstances. 47 Stafford Act Section 406(a)(1); 42 U.S.C.§5172(a)(2). See also 44 C.F.R. §206.223(a)(1)-(2). Congressional Research Service 10 FEMA’s Public Assistance Program: A Primer and Considerations for Congress must provide a critical service (including power, water, sewer, wastewater, communications, education, and emergency medical care, including those operated by religious organizations) in order to be eligible.48 FEMA does not provide PA for permanent work for federal facilities, or for the reconstruction of facilities whose repair falls under a specific federal authority—even if the other federal authority does not ultimately fund the necessary repairs.49 For example, the reconstruction of certain flood control works may fall under the authority of the U.S. Army Corps of Engineers (USACE) or the Department of Agriculture’s Natural Resources Conservation Service (NRCS), and thus would be ineligible for PA.50 Exceptions may be granted if the federal agency has formally designated an eligible Applicant as the entity legally responsible for a facility.51 Work The Stafford Act limits the provision of PA to work required as a result of the declared incident and located within a designated area of a major disaster or emergency (excepting emergency sheltering and evacuation).52 FEMA organizes work eligible for reimbursement into three broad types and eight specific categories that may be individually authorized in a declaration:    Emergency Work o Category A—Debris Removal o Category B—Emergency Protective Measures Permanent Work o Category C—Roads and Bridges o Category D—Water Control Facilities o Category E—Buildings and Equipment o Category F—Utilities o Category G—Parks, Recreational, Other Management o Category Z—Management Costs Additionally, work must be the “legal responsibility” of an eligible Applicant in order to qualify. In practice, FEMA generally considers SLTTs to have legal responsibility for PA emergency work.53 FEMA vests facility owners with legal responsibility for permanent work.54 48 Stafford Act Sections 406(a)(3)(A)(i) and 406(a)(3)(B)-(C); 42 U.S.C. §5172(a)(3)(A)(i) and 42 U.S.C. §§5172(a)(3)(B)-(C). 49 44 C.F.R. §206.226(a); FEMA, PAPPG 2020, pp. 53-54. Stafford Act Section 405 does enable the President to authorize any federal agency to repair federal facilities damaged or destroyed by a major disaster, but this statute is not included in the PA program, and Recipients may not receive reimbursement for these projects. 42 U.S.C. §5171(a)-(b). 50 FEMA, PAPPG 2020, pp. 171, 268-270. 51 FEMA, PAPPG 2020, pp. 53-54. 52 44 C.F.R. §206.223(a)(3). 53 Exceptions exist. For example, FEMA has in certain cases determined that medical or custodial care facilities are eligible for emergency work. FEMA, “Emergency Medical Care,” https://www.fema.gov/fact-sheet/emergencymedical-care. 54 44 C.F.R. §206.223(b). Congressional Research Service 11 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Finally, all PA projects must comply with all applicable statutes, executive orders, regulations, and policies. Many statutes, executive orders, and regulations establish requirements to protect the environment as well as historic and archaeologic resources. FEMA reviews PA projects to ensure compliance with applicable environmental and historic preservation requirements.55 Applicants must also comply with federal procurement requirements.56 PA Emergency Work PA emergency work may be authorized under an emergency or major disaster declaration. It includes efforts undertaken to save lives; protect property, public health, and safety; and reduce or avert the threat of a catastrophe. These activities are grouped into two major categories: Debris Removal (Category A)—provides direct assistance and reimbursement for the costs of removing debris and wreckage from public and, in more limited cases, privately-owned property, when FEMA determines such work is in the public interest.57 Emergency Protective Measures (Category B)—provides assistance for work undertaken to save lives and protect property. Emergency protective measures are arguably the broadest category of work under FEMA’s PA Program. Emergency protective measures may include activities ranging from prepositioning resources before a hazard strikes, to search-and-rescue in the immediate aftermath of an incident, to the construction of temporary facilities to undertake emergency medical care, sheltering, food provision, and other essential services for months after the threat has passed.58 Direct Federal Assistance When PA Applicants do not have the capacity to perform eligible work under the PA Program, FEMA may provide direct assistance (referred to as Direct Federal Assistance or DFA).59 In these cases, FEMA may task FEMA personnel or other federal agencies with performing work on behalf of the Applicant. FEMA may provide supplies, personnel, and facilities for response activities. The Stafford Act authorizes DFA only for PA emergency work and Individual Assistance, not for PA Permanent Work.60 DFA is subject to the same cost-share requirements as other forms of PA.61 FEMA tasks other agencies including the U.S. Department of Defense, and U.S. Department of Agriculture, and the Army Corps of Engineers (USACE) to perform Direct Federal Assistance in directives called mission assignments.62 Recent examples include mission assignments for the USACE to support efforts to remove 450,000 cubic yards of debris following tornadoes that struck Tennessee in March 2020.63 55 FEMA, PAPPG 2020, pp. 54-55, 221-226. 56 FEMA, PAPPG 2020, pp. 76-85. 57 Authorized in Stafford Act Sections 403, 407, 428, and 502; 42 U.S.C. §§5170a, 5170b, 5173, 5189f, 5192. See also 44 C.F.R. §206.208. For a non-exclusive list of eligible activities, see FEMA, PAPPG 2020, pp. 110-111; a detailed discussion of eligible costs may be found at pp. 111-137. 58 Authorized in Stafford Act Sections 402, 403, 418, 419, 502; 42 U.S.C. §§5170a, 5170b, 5185-86, 5192. See also 44 C.F.R. §206.208. For a non-exclusive list of eligible activities, see FEMA, PAPPG 2020, pp. 110-111; a detailed discussion of eligible costs may be found at pp. 111-137. 59 Authorized in Stafford Act Section 402, 418, 419, 502; 42 U.S.C. §§5170a, 5185-86, 5192. See also 44 C.F.R. §206.208. 60 FEMA, “FEMA POLICY: Mission Assignments,” FEMA Policy #104-010-2, p. 9, https://www.fema.gov/sites/ default/files/2020-04/MA_Policy_aug172018.pdf. 61 Ibid., pp. 2-3. 62 44 C.F.R. §206.208(c)(1). 63 See CRS Insight IN11392, COVID-19 Alternate Care Sites (ACSs): Role and Activities of the U.S. Army Corps of Engineers, by Nicole T. Carter and Hannah Fischer; Lee Roberts, USACE, “Debris team wrapping up FEMA technical Congressional Research Service 12 FEMA’s Public Assistance Program: A Primer and Considerations for Congress PA Permanent Work Permanent Work may only be authorized under a major disaster declaration. PA permanent work provides reimbursement for approved costs to repair, restore, reconstruct, or replace the following types of eligible facilities damaged in a declared major disaster:      Roads and Bridges (Category C)—except federal aid roads; Water Control Facilities (Category D)—including dams and levees that are not under the authority of other federal agencies; Buildings and Equipment (Category E)—including eligible building contents; Utilities (Category F)—including gas, power, water, communication, and sewage facilities; and Parks, Recreational, Other (Category G)—including railways, beaches, piers, ports, and harbors.64 Both the Stafford Act and federal regulations place additional restrictions on PA permanent work for nonprofits. Nonprofit Applicants must first apply for a loan from the Small Business Administration (SBA) disaster loan program in order to be eligible for PA permanent work. Only reconstruction costs not covered by an SBA loan are eligible for PA.65 PA Permanent Work Beyond Repair and Reconstruction In certain cases, Applicants may receive PA to pursue projects beyond facility repair and reconstruction. For instances, Applicants may determine that facilities require replacement or relocation. These projects are subject to particular requirements. Facility Replacement: FEMA may provide PA for the costs of replacement if the costs of repair or reconstruction are estimated to exceed 50% of the estimated costs of replacement.66 Facility Relocation: FEMA may provide PA for relocation if relocation complies with other applicable regulations, the original location is subject to repetitive losses (e.g., multiple floods), and the newly proposed project is cost-effective.67 FEMA may utilize its Benefit-Cost Analysis process to determine cost effectiveness.68 The Stafford Act also authorizes PA for specific types of projects when Applicants determine “that the public welfare would not best be served” by repairing, restoring, reconstructing, or replacing the original disasterdamaged facility.69 In these cases, Applicants may receive capped PA awards for Improved Projects or Alternate Projects (for more information see Appendix B). Improved Projects: Applicants may seek to make improvements to a damaged facility that exceed the requirements of eligible codes or standards. A project that restores the pre-disaster function of a facility and incorporates improvements or changes to the pre-disaster design is an Improved Project.70 Improved projects receive capped awards.71 For example, Joplin Schools in Missouri decided to relocate and improve upon Old South support mission in Middle Tennessee,” April 23, 2020, https://www.usace.army.mil/Media/News-Archive/StoryArticle-View/Article/2162830/debris-team-wrapping-up-fema-technical-support-mission-in-middle-tennessee/. 64 Public and nonprofit facilities are defined in the Stafford Act Section 102(10)-(11) and 44 C.F.R. §§206.221(e) and (h). 65 Stafford Act Section 406(a)(3)(A)(ii); 42 U.S.C. §5172(a)(A)(3)(ii); 44 C.F.R. §206.226(c)(2). 66 44 C.F.R. §206.226(f); FEMA, PAPPG 2020, pp. 156-160. 67 FEMA, PAPPG 2020, pp. 160-161. 68 See FEMA, “Benefit-Cost Analysis,” https://www.fema.gov/grants/guidance-tools/benefit-cost-analysis. 69 Section 406(c) of the Stafford Act, 42 U.S.C. §5172(c); 44 C.F.R. §206.203(d)(2). 70 FEMA, PAPPG 2020, p. 163. 71 Section 406(c) of the Stafford Act, 42 U.S.C. §5172(c); 44 C.F.R. §206.203(d)(2). Congressional Research Service 13 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Middle School instead of simply rebuilding it through exterior grounds project after a tornado destroyed the school in 2011.72 Joplin Schools received an award for the new, improved facility (an improved project) that was capped on the basis of the estimated costs to replace Old South Middle School. Alternate Projects: Alternate projects are projects that do not restore the function of the disaster-damaged facility.73 For example, following severe storms in Milwaukee, WI, the city determined that the public would be better served by reconfiguring the water distribution system rather than repairing a disaster-damaged pumping station; FEMA approved the alternate project and obligated funds equivalent to the estimates to restore the pumping station to predisaster use towards the alternate project. 74 Management Costs FEMA provides PA for eligible management costs that Recipients and Applicants incur while managing PA awards. These costs may include the costs of conducting PDAs, hosting PA Program meetings, site inspections, preparing project worksheets, and managing PA grant program documentation.75 Under the Stafford Act, FEMA may provide funding for up to 7% of the total PA awarded within a jurisdiction to Recipients for the actual eligible costs they incur for management of all related PA grants.76 Additionally, FEMA may provide funding for up to 5% of the total PA awarded to an Applicant for actual eligible costs incurred for management of the PA projects they complete.77 FEMA categorizes these awards as “Category Z.” Costs Both the Stafford Act and regulations limit the provision of PA to specific costs. Generally, PA may not reimburse costs funded by other means, including other federal agencies or private insurance. The Stafford Act prohibits such as a “duplication of benefits.”78 However, the enactment of the Disaster Recovery Reform Act (DRRA; P.L. 115-254) in 2018 granted the President the authority to waive this requirement if the waiver is in the public interest and does not result in waste, fraud or abuse.79 Costs must also meet the definition of “reasonable” established in federal regulations: “a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a 72 FEMA Public Assistance Appeals Database, “Improved Project—Joplin Schools,” signed July 24, 2018, https://www.fema.gov/appeal/improved-project-5. 73 44 C.F.R. §206.203(d)(2). 74 Department of Homeland Security Office of Inspector General (DHS OIG), FEMA Public Assistance Grant Program Funds Awarded to City of Milwaukee, Wisconsin, DD-12-14, June 2012, pp. 1-2, https://www.oig.dhs.gov/sites/default/ files/assets/GrantReports/OIG_DD-12-14_Jun12.pdf. 75 FEMA, “Public Assistance Management Costs (Interim), FEMA Recovery Policy FP 104-11-12,” November 14, 2018, p. 4, https://www.fema.gov/sites/default/files/2020-07/pa_management_costs_interim_policy.pdf. 76 Ibid., pp. 3-4; Section 324 of the Stafford Act; 42 U.S.C. §5165b. 77 For more information, see FEMA, “Public Assistance Management Costs (Interim): FEMA Recovery Policy FP 10411-2,” November 11, 2018, https://www.fema.gov/sites/default/files/2020-07/ pa_management_costs_interim_policy.pdf; FEMA, “Public Assistance Management Costs SOP,” February 11, 2019, https://www.fema.gov/sites/default/files/2020-07/pa_mgmt_costs_sop_final.pdf. 78 Section 312 of the Stafford Act; 42 U.S.C. §5155 and 44 C.F.R. §206.250(c). For more information, see CRS Report R44553, SBA and CDBG-DR Duplication of Benefits in the Administration of Disaster Assistance: Background, Policy Issues, and Options for Congress, by Bruce R. Lindsay and Eugene Boyd. 79 §1210 of DRRA, P.L. 115-254, as it amends Section 312 of the Stafford Act, 42 U.S.C. §5155. For more information, see CRS Report R45819, The Disaster Recovery Reform Act of 2018 (DRRA): A Summary of Selected Statutory Provisions, coordinated by Elizabeth M. Webster and Bruce R. Lindsay, pp. 34-37. Congressional Research Service 14 FEMA’s Public Assistance Program: A Primer and Considerations for Congress prudent person under the circumstances prevailing at the time the decision was made to incur the cost.”80 FEMA guidance details how the Applicant, the Recipient, and FEMA may assess cost reasonability, including analysis of historical prices and pricing constraints imposed by exigent circumstances.81 PA Requirements and Procedures Cost-Share The Stafford Act provides assistance on a federalist model that supplements state, local, tribal, and territorial resources on the basis of a cost share. The Stafford Act authorizes FEMA to reimburse at least 75% of the eligible costs of specific types of disaster response and recovery work undertaken by PA applicants.82 The remaining 25% cost share is the responsibility of the Recipient, though some pass it on to Applicants. State approaches to meeting PA cost shares vary. For example, Pennsylvania pays almost all PA nonfederal cost shares, whereas Oregon requires Applicants to cover the cost share.83 Federal regulations describe the means through which Recipients may meet the nonfederal cost share. Regulations prohibit Recipients from using other federal funds to meet the nonfederal cost share, unless those funds are statutorily authorized to meet federal cost-share requirements.84 The Department of Housing and Urban Development’s Community Development Block Grant, for example, is statutorily authorized to meet federal cost-share requirements for other federal programs.85 Recipients may also apply the value of donated goods, resources, and labor to fulfill the nonfederal cost share.86 Several hundred declarations and declaration amendments have included cost-share increases since the enactment of the Stafford Act in 1988.87 Additionally, Congress has acted to increase the federal cost share statutorily for certain severe incidents.88 The Stafford Act authorizes the President to increase the federal cost share when warranted. FEMA may recommend that the President increase the federal cost share in extraordinary 80 2 C.F.R. §200.404; OMB Circular A-87. 81 FEMA, “Public Assistance: Reasonable Cost Estimation,” Job Aid, October 13, 2018, https://www.fema.gov/media- library-data/1539879525279-d00ae1c43f9765c5a4b415e1a31202c5/ PA_Reasonable_Cost_Evaluation_Job_Aid_508_FINAL_10-16-2018.pdf. 82 See, for example, Stafford Act Section 503(a), 42 U.S.C. §5193(a), which states “[t]he Federal share for assistance provided under this subchapter [Subchapter V—Emergency Assistance Programs] shall be equal to not less than 75 percent of the eligible costs”; and 42 U.S.C. §5170b(b), which states “[t]he Federal share of assistance under this section [Section 403—Essential Assistance] shall be not less than 75 percent of the eligible cost of such assistance.” 83 Pew Charitable Trust, What We Don’t Know About State Spending on Natural Disasters Could Cost Us, June 2018, pp. 13-14; National Governor’s Association, Memorandum on Cost Share Considerations for FEMA Public Assistance Grants, May 20, 2020, https://www.nga.org/wp-content/uploads/2020/04/NGA-Memo_Cost-Share_Final.pdf. 84 2 C.F.R. §200.306(b)(5). The Department of Housing and Urban Development’s Community Development Block Grant, for example, is statutorily authorized to meet federal cost-share requirements. 85 For more information, see CRS Report R46475, The Community Development Block Grant’s Disaster Recovery (CDBG-DR) Component: Background and Issues, by Michael H. Cecire and Joseph V. Jaroscak. 86 2 C.F.R. §200.306(e)-(j). 87 For more information, see CRS Report R41101, FEMA Disaster Cost-Shares: Evolution and Analysis, by Natalie Keegan and Elizabeth M. Webster. 88 One example of such legislation is Section 309 of Division A of P.L. 116-6, which raised the federal cost share to 90% for Public Assistance emergency work for the wildfires of 2018. Congressional Research Service 15 FEMA’s Public Assistance Program: A Primer and Considerations for Congress circumstances.89 According to federal regulations, FEMA recommends an increase in the federal cost share to up to 90% when the estimated cost of PA exceeds an established threshold for the state, tribe, or territory (in FY2021, $151 per capita).90 FEMA may also take into account other disasters in the affected area during the preceding twelve months.91 In particularly severe situations, FEMA may recommend an increase in the cost share of PA emergency work to 100% for a limited period of time, irrespective of the estimated damages.92 Such adjustments sometimes result in differing cost shares for permanent and emergency work. The Stafford Act also authorizes the President to increase the federal cost share for permanent work up to 85% when Recipients undertake a range of mitigation measures.93 Measures may include the adoption and enforcement of the most recent building codes and participation in the National Flood Insurance Program’s (NFIP’s) Community Rating System for flood-abatement measures.94 Finally, the Stafford Act authorizes FEMA to advance the nonfederal cost share to Applicants or Recipients if warranted due to concurrent major disasters or particularly overwhelming incidents.95 Insurance Requirements The Stafford Act requires some Applicants to carry insurance in order to “protect themselves … [and] … supplement or replace government assistance.”96 For example, Applicants that receive PA to repair or replace disaster-damaged facilities must obtain and maintain insurance “of such type and extent” necessary to protect against future loss to the property.97 Applicants in identified flood hazard zones must secure insurance through the NFIP98 or other insurance as required by the Applicant’s state insurance commissioner.99 The Stafford Act also limits PA for uninsured, flood-damaged facilities in violation of the National Flood Insurance Act. Such properties generally may receive PA only for damages that exceed estimated insurance proceeds had the 89 44 C.F.R. §206.47. For cost-share adjustments for tribes, see 42 U.S.C. §5170(c), and FEMA, Tribal Declarations Pilot Guidance, January 2017, p. 38-39, https://www.fema.gov/media-library-data/152303328435820b86875d12843441a521a6141c15099/Pilot_Guidance.pdf. 90 44 C.F.R. §206.47(b). Per federal regulations, the threshold is annually adjusted. For disasters declared between January 1, 2021, and December 31, 2021, the threshold is $151. FEMA, Department of Homeland Security (DHS), “Notice of Adjustment of Statewide per Capita Indicator for Recommending a Cost Share Adjustment,” Advisory, distributed January 28, 2021. 91 44 C.F.R. §206.47(c). 92 44 C.F.R. §206.47(d). 93 Stafford Act 406(b)(3)(A); 42 U.S.C. §5172(b)(3)(A). 94 Stafford Act 406(b)(3)(A); 42 U.S.C. §5172(b)(3)(A). See also “Community Rating System” in CRS Report R44593, Introduction to the National Flood Insurance Program (NFIP), by Diane P. Horn and Baird Webel. 95 Stafford Act Section 319; 42 U.S.C. §5162. 96 Stafford Act Section 101(b)(4); 42 U.S.C. §5121(b)(4). 97 Stafford Act Section 311(a)-(b); 42 U.S.C. §5154(a)-(b). See also 44 C.F.R. §206.250(a)-(b), §206.252(d), and §206.253(b)(1). 98 44 C.F.R. §206.250(a); 44 C.F.R. §206.252. 99 Stafford Act Section 311(a)(2); 42 U.S.C. §5154(a)(2). Congressional Research Service 16 FEMA’s Public Assistance Program: A Primer and Considerations for Congress facility been properly covered.100 FEMA details insurance requirements in regulations and guidance.101 Public Assistance Funding Procedures PA projects are reimbursed according to procedures that vary according to the size and type of project. In all cases, PA funds pass from FEMA to the Recipient to the Applicant. For this reason, the Recipient is sometimes referred to as a “pass-through entity.”102 FEMA obligates PA awards to the Recipient based on either the actual costs of completed work, or a project estimate if the work has yet to be completed.103 A disaster-stricken county may have already incurred and paid for the costs of debris removal by the time FEMA approves the project, whereas reconstruction projects may only be in the early phases of damage and repair estimation when a project is approved. After FEMA obligates funds, the Recipient then disburses funds to the Applicant for approved costs (for more information see Appendix B). Applicants may receive two primary types of awards—awards based on actual costs (hereinafter standard procedures, also referred to as “406 procedures”) and capped awards (which include Section 428 Alternative Procedures; hereinafter “Alternative Procedures”). Larger PA projects (those that exceed $132,800 in FY2021) are funded on a reimbursement basis under either standard or Alternative Procedures.104 For this reason, Applicants generally need nonfederal funds to pay for eligible costs before they may request and receive reimbursement.105 In certain cases, the requirement that Applicants cover initial costs before receiving reimbursement has burdened some Applicants, particularly those facing catastrophic losses (as reported, for example, for Applicants in New Orleans following Hurricane Katrina and in Puerto Rico following the 2017 hurricanes).106 100 Stafford Act Section 406(d); 42 U.S.C. §5172(d) and 44 C.F.R. §206.250(d) and §206.252(a)-(b). For additional information, see CRS Report R44593, Introduction to the National Flood Insurance Program (NFIP), by Diane P. Horn and Baird Webel. 101 44 C.F.R. §§206.250-206.253. FEMA, Public Assistance Policy On Insurance, FP 206-086-1, June 29, 2015, https://www.fema.gov/sites/default/files/2020-05/FP206-086-1_PublicAssistancePolicyInsurance_062915.pdf. 102 See, for example, FEMA, PAPPG 2020, p. 21. 103 FEMA, PAPPG 2020, pp. 185-187, 190-191; 44 C.F.R. §44 206.205(b). Awards over $1 million may be obligated according to Strategic Funds Management, under which FEMA will obligate funds as needed based on the project completion schedule. FEMA, Strategic Funds Management—Implementation Procedures for the Public Assistance Program, FEMA SOP 9570.24, December 2012, https://www.fema.gov/sites/default/files/2020-07/ fema_9570.24_startegic-funds-mgmt_SOP_12-21-2012.pdf. 104 44 C.F.R. §206.205(a); and email from FEMA Congressional Affairs staff, September 10, 2020. Recipients may disburse funds to Applicants in advance for the minimum amounts needs and timed with the Applicants immediate cash requirements, per 44 C.F.R. §200.305. States may place different rules on requests for advance funds. See, for example, Texas Division of Emergency Management, “State of Texas Administrative Plan for Public Assistance,” 2018, pp. 2728, https://tdem.texas.gov/wp-content/uploads/2019/08/PA-State-Admin-2018-Texas-State-Administrative-PlanFINAL.pdf. 105 FEMA Office of Legislative and Congressional Affairs, email to CRS, September 10, 2020. 106 See Former Chairman Mary Landrieu, U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Stafford Act Reform: Shaper Tools for A Smarter Recovery, 111th Cong., 2nd sess., S.Hrg. 111-895, May 12, 2010, pp. 29 (hereinafter HSGAC, Stafford Act Reform); Government of Puerto Rico, 2020 Fiscal Plan for Puerto Rico, As Submitted to the Financial Oversight and Management Board for Puerto Rico on May 3, 2020, pp. 28-29, https://www.aafaf.pr.gov/ assets/2020-fiscal-plan-may-3-2020.pdf (hereinafter Government of Puerto Rico, 2020 Fiscal Plan). Congressional Research Service 17 FEMA’s Public Assistance Program: A Primer and Considerations for Congress PA Standard Procedures—Awards for Actual Costs Most PA projects to date have been processed under standard reimbursement procedures. Under standard procedures, Applicants receive reimbursements for large projects (set at $132,800 in FY2021) on the basis of the actual costs of approved work.107 For smaller projects, Applicants may receive funds as soon as a project is obligated. For larger projects, Applicants pay for initial costs, and then receive reimbursement based on the applicable cost share (for example, for 75% of the costs). During the course of a large project, the Applicant may encounter delays, cost overruns, or the need to modify the scope of work.108 For any of these reasons, an Applicant may determine that the project’s scope of work must substantively change after the project has been approved and obligated.109 For example, the City of Columbia, SC identified the need to change the scope of work of an obligated project when the City discovered previously undetected damage to its Metro Wastewater Treatment Plant following severe storms in October 2015.110 FEMA regulations permit Applicants completing projects under standard procedures to change the scope of work to include new costs if the costs are eligible and necessary to complete the project, and if FEMA gives prior approval.111 In such a case, the Applicant submits a description and justification of the change in the project’s scope of work (including any cost overruns) for the Recipient and FEMA’s review.112 If approved, FEMA obligates the additional funds to the Recipient. The use of standard procedures may provide certain benefits. The allowance of project modifications and reimbursement on the basis of actual costs (including overruns) may mitigate the Applicant’s financial risk. The use of standard procedures also affords FEMA the opportunity to conduct timely oversight when reviewing project changes and implementation. The use of standard procedures may also present challenges. Each significant change in the scope of work requires FEMA approval. FEMA, GAO, and OIG have concluded that standard procedures demand significant federal time and resources due to the complexity of the process for project review, revision, and reimbursement.113 Additionally, the use of standard procedures may not incentivize Applicants to control costs, as cost overruns may be eligible for additional assistance. 107 FEMA, “Per Capita Impact Indicator and Project Thresholds,” https://www.fema.gov/public-assistance-indicator- and-project-thresholds. 108 FEMA delimits the scope of work as follows: “For Emergency Work, the SOW includes work required to address immediate threats and to remove debris and must include quantitative information. For Permanent Work, the SOW includes a description of how the Applicant plans to repair, or has repaired, the damage, including repair dimensions and hazard mitigation description and dimensions.” FEMA, PAPPG 2020, p. 183. 109 44 C.F.R. §206.204(e). 110 FEMA Public Assistance Appeals Database, FEMA Appeal Brief PW# 873, signed September 16, 2020, https://www.fema.gov/appeal/change-scope-work-improved-project-codes-and-standards. 111 44 C.F.R. §206.204(e). 112 44 C.F.R. §206.204(e)(2). 113 GAO, Disaster Assistance: Opportunities to Enhance Implementation of the Redesigned Public Assistance Grant Program, November 2017, GAO-18-30, pp. 2-3 (hereinafter GAO, PA Redesign); DHS OIG, Management of FEMA Public Assistance Grant Funds Awarded to the Sewerage and Water Board of New Orleans Related to Hurricanes Katrina, Isaac, and Gustav, OIG-20-21, March 27, 2020, pp. 20-21; FEMA Administrator Brock Long, pp. 6-7, Governors Steve Bullock and Brian Sandoval on behalf of the National Governor’s Association (NGA), submitted testimony, U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, FEMA: Prioritizing a Culture of Preparedness, 115th Cong., 2nd sess., April 11, 2018, S.Hrg. 115-442, pp. 6-7 (hereinafter HSGAC, Prioritizing Preparedness). Congressional Research Service 18 FEMA’s Public Assistance Program: A Primer and Considerations for Congress PA Alternative Procedures and Capped Awards In contrast to awards made for actual costs, Applicants may receive capped awards for certain projects. FEMA provides capped awards under Alternative Procedures authorized under Stafford Act Section 428 (hereinafter Alternative Procedures) as well as for improved or alternate projects (for more information see Appendix B). Enacted in the wake of Hurricane Sandy, SRIA authorized Alternative Procedures with the expressed aim to reduce costs, expedite delivery of assistance, reward timely and adept completion of PA projects, and increase the PA Program’s flexibility.114 The 113th Congress authorized Alternative Procedures as a pilot program and allowed FEMA to waive the standard rulemaking process in order to expeditiously implement the new procedures.115 Absent rulemaking, FEMA has issued several iterations of guidance on the Alternative Procedures Pilot Program (see Appendix C).116 As of March 2021, the program continues as a pilot, though FEMA guidance treats Alternative Procedures “as the first option considered for all large permanent work projects in order to ensure the ability of Applicants to drive their own recovery.”117 As of August 21, 2020, Applicants had completed projects under Alternative Procedures in 54 states and territories, according to FEMA data. This accounted for approximately 28% of obligated PA funds since the implementation of Alternative Procedures in 2013.118 Alternative Procedures include several modifications to standard procedures for large permanent work projects (see Table 2). Most notably, awards under Alternative Procedures are capped based on up-front and mutually agreed-to cost estimates of the work to be done. Applicants may use any excess funds for approved purposes (for example, mitigation) if estimates exceed the actual costs of a completed project. However, Applicants are responsible for all costs that exceed the agreedupon estimates (see Figure 5). This change transfers the risk of cost overruns or project delays entirely to the Applicant. Under standard procedures, FEMA and the Applicant or Recipient share the risk, according to the PA cost share. 114 The Sandy Recovery Improvement Act (SRIA), P.L. 113-2; Stafford Act Section 428. The Public Assistance Program Alternative Procedures are codified at Section 1102 of SRIA; 42 U.S.C. §5189f. The statute reads: Goals of Procedures—The alternative procedures adopted under subsection (a) shall further the goals of—(1) reducing the costs to the Federal Government of providing such assistance; (2) increasing flexibility in the administration of such assistance; (3) expediting the provision of such assistance to a State, tribal or local government, or owner or operator of a private nonprofit facility; and (4) providing financial incentives and disincentives for a State, tribal or local government, or owner or operator of a private nonprofit facility for the timely and cost-effective completion of projects with such assistance. 115 Section 1102 of SRIA, Division B of P.L. 113-2, as codified at 42 U.S.C. §5189f(f), Section 428(f) of the Stafford Act. 116 As of November 2020, FEMA has published five pilot guides for Public Assistance Alternative Procedures for Permanent Work, and eight guides for Public Assistance Alternative Procedures Debris Removal, in addition to guidance on administrative costs and jobs aids, as well as three iterations each of disaster-specific guidance for Puerto Rico’s 2017 hurricane recovery, and the Virgin Islands. Archived guidance for general Alternative Procedures is available at FEMA, “Archives: Public Assistance Alternative Procedures (PAAP),” https://www.fema.gov/assistance/ public/policy-guidance-fact-sheets/public-assistance-alternative-procedures-paap-archives. 117 FEMA, PAPPG 2020, p. 12. 118 CRS analysis of data provided by FEMA Office of Congressional and Legislative Affairs current through August 21, 2020. Congressional Research Service 19 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Table 2. FEMA’s Public Assistance Standard Procedures vs. Alternative Procedures Topic Standard Public Assistance Procedures Alternative Public Assistance Procedures (“406 Procedures”) (“428 Procedures”) Award Awards are based on costs of actual work. Awards are capped on the basis of estimates of the cost of eligible work agreed to by FEMA, the Recipient, and Applicants. Fixed-cost estimates may not be amended after agreement is reached, except if insurance proceeds or failure to obtain and maintain insurance alters the estimated cost of the project. Certain cost estimates are validated by a third-party expert panel. Cost Overruns Applicants may receive PA on a costshare basis for eligible costs that exceed initial project estimates. Applicants are responsible for the difference between the cost of estimated and actual work. Excess Funds Applicants may not access funds remaining if project estimates exceed actual project costs. Applicants may use award funds remaining after the completion of actual work on eligible work, including mitigation and other PA projects. Consolidated Projects Standard procedures require Applicants to use funds for the project documented in the original scope of work. Applicants using Alternative Procedures may consolidate funds from multiple fixed-cost PA awards across multiple facilities or projects. For example, an Applicant may use funds from a project that runs under budget to fund a project that runs over budget. Alternate Projects (eligible projects beyond the reconstruction or replacement of disasterdamaged facility) Prior to 2018, PA standard procedures reduced funding for alternate projects by 10%. However, the Disaster Recovery Reform Act of 2018 (P.L. 115254) eliminated this reduction upon its enactment in October 2018. Applicants using Alternative Procedures may complete alternate projects using funds from a fixed-cost estimate without any reduction in funding. Sources: Stafford Act Section 428; 42 U.S.C. §4189f; 44 C.F.R. §206.204(e); FEMA, Public Assistance Alternative Procedures for Permanent Work Pilot, version 4, FEMA Recovery Policy FP 104-009-7, August 19, 2019, https://www.fema.gov/media-library-data/1568910139061-36ef984e91a480f99341e6836ac27ae8/ PAAP_Perm_Work_Guide_V4_2019_508.pdf. Congressional Research Service 20 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Figure 5. Funding Scenarios for Large Projects Under Alternative and Standard Public Assistance Procedures Source: CRS analysis of Stafford Act Section 428(e)(1)(A) and (D). Notes: Large projects are those that exceed a certain project threshold (e.g., $132,800 for FY2021). FEMA, “Per Capita Impact Indicator and Project Thresholds,” https://www.fema.gov/public-assistance-indicator-andproject-thresholds. The use of Alternative Procedures and other capped awards afford certain opportunities to Applicants and FEMA:  Applicants have the ability to modify facilities rather than restoring a disasterdamaged facility to its predisaster use.119  Applicants using Alternative Procedures do not need to track costs with the same granularity as required under standard procedures, which may reduce the grant management burdens for both Applicants and Recipients.120 FEMA may be able to commit fewer resources to project oversight and review after Alternative Procedures projects are obligated, as scope of work changes are not permitted. FEMA may also control federal expenses by avoiding fiscal exposure to cost overruns and project delays.   119 Predisaster use refers to the capacity and function of the facility immediately prior to the incident. For more information, see 44 C.F.R. §206.226. 120 FEMA, PAPPG 2020, pp. 188-189. Congressional Research Service 21 FEMA’s Public Assistance Program: A Primer and Considerations for Congress  Applicants using Alternative Procedures may retain any remaining funds if estimates exceed actual costs and use for other eligible projects. This feature is not available for alternate or improved projects.121 These capped awards also present a number of challenges.   As noted earlier, capped awards transfer the risk of cost overruns or project delays entirely to the Applicant (see Figure 5). GAO has found that Alternative Procedures have sometimes resulted in significant recovery delays due to the time-consuming process required to establish an agreement between FEMA, Recipients, and Applicants on project cost estimates.122  These recovery delays require significant FEMA involvement. For these reasons, Alternative Procedures may not, in practice, save federal resources and control spending as intended. These challenges are discussed in greater detail in the Alternative Procedures” section under “Congressional Considerations,” below. Building Standards In addition to the funding mechanisms detailed above, the PA Program requires that all PAeligible work incorporate certain minimum building standards. DRRA amended the Stafford Act to require that PA permanent work projects be reconstructed according to the latest published editions of relevant consensus-based codes, specifications, and standards that incorporate the latest hazard-resistant designs and establish minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for assistance under this Act for the purposes of protecting the health, safety, and general welfare of the facility’s users against disasters….123 FEMA guidance generally interprets this provision as a requirement for the construction of many PA projects to conform to the most recent published International Code Council standards (e.g., the International Building Code) or other standards established by national professional associations (e.g., the American Society of Civil Engineers).124 According to this guidance, PA 121 FEMA, PAPPG 2020, p. 164. 122 Omar J. Marrero, Governor of Puerto Rico’s Authorized Representative, Letter to Gene L. Dodaro, Comptroller General of the United States, January 30, 2019, in GAO, Puerto Rico Hurricanes: Status of FEMA Funding, Oversight, and Recovery Challenges, GAO-19-256, March 14, 2019, pp. 37-38, https://www.gao.gov/products/GAO-19-256, (hereinafter GAO, Puerto Rico Hurricanes 2019); GAO Representative Chris P. Currie, oral testimony, U.S. Congress, House Homeland Security Subcommittee on Emergency Preparedness, Response and Recovery, Hearing on Puerto Rico and Virgin Islands Hurricane Recovery, 116th Cong., 1st sess., July 11, 2019; GAO, 2018 Pacific Disasters: Preliminary Observations of FEMA’s Disaster Response and Recovery Efforts, GAO-20-614T, July 8, 2020, pp. 16-18 (hereinafter GAO, 2018 Pacific Disasters). 123 §1235(b) of DRRA, P.L. 115-254, as it amends §406(e)(1)(A) of the Stafford Act, P.L. 93-288, as amended, 42 U.S.C. §5172(e)(1)(A). DRRA also amended the Stafford Act to require PA-eligible costs include estimates of replacing eligible projects under Stafford Act Section 406 “in a manner that allows the facility to meet the definition of resilient” developed pursuant to Section 406(e)(1)(A). As of January 2021, FEMA had not yet promulgated a new definition of “resilient.” DRRA requires the definition to be published no later than October 2020. 124 Appendix A of FEMA, “Consensus-Based Codes, Specifications and Standards for Public Assistance,” FEMA Recovery Interim Policy FP-104-009-11 Version 2.1, December 2019, p. 9 (hereinafter FEMA, “Consensus-Based Codes 2019”), https://www.fema.gov/sites/default/files/2020-05/ .DRRA1235b_Consensus_BasedCodes_Specifications_and_Standards_for_Public_Assistance122019.pdf. See the Congressional Research Service 22 FEMA’s Public Assistance Program: A Primer and Considerations for Congress reconstruction projects for roads, bridges, buildings, electric power, potable water and wastewater facilities for disasters declared on or after December 20, 2019, must be built in accordance with the most recently published hazard-resistant building codes, regardless of pre-disaster condition or design.125 In some cases, Applicants undertaking work for certain earlier disasters may be eligible to elect to follow the same consensus-based codes.126 Other projects (e.g., for other facilities or earlier disasters) must be completed according to local building code standards that, at the time of the disaster, were appropriate for the use of the facility, reasonable, enforced, and uniformly applied to similar facilities.127 Mitigation Activities Applicants may use PA for mitigation projects whenever permanent work is authorized and if the project directly reduces the potential of future damage.128 Typically, PA is obligated for mitigation projects only for damaged parts of a PA-eligible facility, though FEMA may consider other projects on eligible facilities.129 Examples of mitigation projects include elevating flood-prone structures, installing new drainage facilities along roads, and constructing floodwalls. FEMA will only approve mitigation measures determined to be cost effective.130 This criteria may be met if one of the following conditions applies: 1. the project cost does not exceed 15% of the cost of the restoration of the disasterdamaged facility (prior to any insurance reductions);131 2. the mitigation measure is listed in FEMA’s Cost-Effective Public Hazard Mitigation Measures,132 and the measure does not exceed 100% of the eligible repair cost of the relevant disaster-damaged facility (prior to any insurance reductions); or 3. the mitigation project appears to be cost-effective according to FEMA’s BenefitCost analysis or comparable methodology.133 According to FEMA data, approximately $8.5 billion dollars have been obligated for PA mitigation projects from 1999 to August 21, 2020.134 collected volumes of the International Code Council at https://codes.iccsafe.org/. 125 FEMA, “Consensus-Based Codes 2019,” p. 2. Exceptions may be granted if the use of consensus-based codes are technically infeasible, extraordinarily burdensome to the Applicant, or inappropriate (e.g., in the case of facilities listed on the National Register of Historic Places). Ibid., p. 4. 126 FEMA, “Consensus-Based Codes 2019,” p. 3. 127 44 C.F.R. §206.223(d); FEMA, “Consensus-Based Codes 2019,” p. 4; FEMA, FAQ: “Consensus-Based Codes, Specifications and Standards for Public Assistance,” February 2020, p. 5, https://www.fema.gov/sites/default/files/ 2020-07/fema_DRRA-1235b-public-assistance-codes-standards-faqs.pdf. 128 Sections 406(c)(1)(B) and 406(c)(2)(B) of the Stafford Act; 42 U.S.C. §§5172(c)(1)(B) and 5172(c)(2)(B). FEMA also funds the Pre-Disaster Mitigation Program and the Hazard Mitigation Grant Program. See CRS Insight IN11187, Federal Emergency Management Agency (FEMA) Hazard Mitigation Assistance, by Diane P. Horn. 129 FEMA, PAPPG 2020, pp. 154-155. 130 44 C.F.R. §206.226(e). 131 Cost-effectiveness for Applicants using Alternative Procedures is based on the fixed estimate to restore the damaged facility to predisaster use. See FEMA, PAPPG 2020, pp. 156-157. 132 See Appendix J: Public Assistance Hazard Mitigation Measures in PAPPG 2020, pp. 242-246. 133 FEMA, PAPPG 2020, pp. 154-155, 242-246. FEMA, “Benefit-Cost Analysis,” https://www.fema.gov/grants/ guidance-tools/benefit-cost-analysis. 134 FEMA reported that due to data limitations in the FEMA PA information system, Emergency Management Mission Integrated Environment (EMMIE), mitigation project obligations are estimated based on a proportion of the project Congressional Research Service 23 FEMA’s Public Assistance Program: A Primer and Considerations for Congress PA Funding PA awards and program operations are provided through the DRF. Managed by FEMA, the DRF is the primary source of funding for Stafford Act assistance.135 DRF funding, if available, may be used for past, current, and future incidents. DRF appropriations are “no-year” funds that may be drawn for authorized purposes at any time until expended. Generally, Congress does not appropriate funds for the DRF for a specific disaster, year, or program, including Public Assistance. In 2012, FEMA launched OpenFEMA, an online data hub that includes data on historical PA obligations.136 The enactment of DRRA in 2018 additionally required FEMA to publish a range of data on disaster relief programs and the DRF, including obligations data, in order to promote agency accountability.137 The following section utilizes publicly available data from OpenFEMA as well as data provided directly to CRS from FEMA to identify trends in PA obligations. This analysis does not include obligations for the unique and ongoing COVID-19 pandemic (see Appendix A, “Snapshot of PA for COVID-19”). The assembled data comprise the most comprehensive available data set and shed light on the location, duration, and purpose of PA projects. However, at the time of publication, CRS cannot independently verify the data sets due to several factors, including that PA project documentation is not readily available. Additionally, CRS cannot reconcile disparities between different FEMA datasets on PA obligations. DRF Obligations for PA On average, Public Assistance has drawn more from the DRF than any other Stafford Act function (see Figure 6). PA’s share of DRF obligations is more than twice that of the next largest program, Individual Assistance, when obligations for the unique and ongoing COVID-19 pandemic are excluded. Notably, the share of DRF obligations committed to PA is generally increasing (see Figure 7). PA accounts for an average of 48% of DRF obligations between FY2001 and FY2010, and grows to an average of 60% between FY2011 and FY2020. costs for the overall PA project. FEMA Office of Congressional and Legislative Affairs, email to CRS, August 21, 2020. 135 For more information about the Disaster Relief Fund and its history, see CRS Report R45484, The Disaster Relief Fund: Overview and Issues, by William L. Painter. 136 FEMA, “OpenFEMA,” https://www.fema.gov/about/reports-and-data/openfema; DHS, “Open Government Plan 3.0,” 2014, https://www.dhs.gov/sites/default/files/publications/ 2014%20Open%20Government%20Plan%20053014_0.pdf. 137 §1224 of DRRA, P.L. 115-254, adding a new §430 of the Stafford Act, P.L. 93-288, as amended, 42 U.S.C. §5189h. Congressional Research Service 24 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Figure 6. Disaster RF Obligations by Category, Fiscal Years 2000-2020 According to FEMA Data Source: CRS analysis of FEMA data on DRF Obligations, FY2000-FY2020 provided to CRS by FEMA Office of Congressional and Legislative Affairs. Notes: This figure reflects PA and DRF obligations less obligations for the COVID-19 pandemic in FY2020, as reported in FEMA, Disaster Relief Fund Monthly Report, November 6, 2020. Figure 7. FEMA’s Public Assistance Program Obligations, Fiscal Years 2000-2020 Dollars and as Percent of all DRF Obligations, According to FEMA Source: FEMA data on DRF Obligations, FY2000-FY2020, provided to CRS by FEMA Office of Legislative and Congressional Affairs. Notes: This figure reflects PA and DRF obligations less obligations for the COVID-19 pandemic in FY2020, as reported in FEMA, Disaster Relief Fund Monthly Report, November 6, 2020. Note that PA obligations often rise in the fiscal years following a particularly severe event due in part to the pace of obligating funds for long-term reconstruction projects and the timing of the fiscal year. For example, PA obligations for Louisiana’s Hurricane Katrina, which made landfall in August 2005, peaked in FY2006, which lasts from October 1, 2005 to September 1, 2006. Scale of PA Expenditures PA obligations totaled more than $110 billion from FY2000-FY2020 and have increased in the past three years. As shown in Figure 7, PA obligations tend to rise in the years following catastrophic disasters such as Hurricanes Katrina, Rita, and Wilma in 2005 and Hurricanes Harvey, Irma, and María and the California wildfires in 2017, as FEMA approves and obligates PA projects for response efforts and long-term reconstruction projects. FY2020 reflected the largest obligations for PA yet—more than $20 billion—even when excluding COVID-19 Congressional Research Service 25 FEMA’s Public Assistance Program: A Primer and Considerations for Congress expenditures. This spike partly reflects two exceptionally large obligations (totaling more than $11 billion) for Hurricane María recovery in Puerto Rico that will support reconstruction of territorial educational and electrical infrastructure.138 The large and growing expense of PA may be attributed to several factors. First, neither the Stafford Act nor federal regulations restrict the size of PA awards by incident, Recipient, Applicant, or project.139 PA is restricted by eligibility, not budgetary or programmatic funding caps (see “Eligibility,” above).140 While federal regulations do establish time limitations during which PA projects must be completed, extensions are frequently granted.141 Second, under standard procedures, FEMA reimburses Applicants on the basis of the actual costs of PA projects, so cost overruns may increase the size of PA awards. The PA project approval process enables FEMA to authorize or deny PA for specific costs, but only on the basis of eligibility. Finally, PA is an extensive, complex program. Projects range from emergency evacuations to the reconstruction of state-wide infrastructure systems. The application process involves more than a dozen steps142 and the involvement of multiple FEMA officials in addition to representatives of the Recipient, Applicant, and, in some cases, other federal agencies or private contractors. FEMA officials explain that projects commonly require months to scope and years to complete, requiring significant financial, human, and material resources.143 The costs of PA reflect, in part, this complexity and scope. As hazards that receive major disaster declarations and PA authorization increase in frequency and severity so, too, do PA costs. Population growth and property development in disaster-prone areas may increase PA obligations per incident, as more communities and facilities eligible to receive PA are placed in harm’s way.144 Additionally, scholars, industry experts, and federal officials have concluded that disaster relief spending, including PA, is increasing and will continue to increase due to the compounding impacts of climate change (see “Cost of PA Program”).145 138 The White House, “President Donald J. Trump Is Supporting the People of Puerto Rico as They Continue to Rebuild Following Natural Disasters,” September 18, 2020, https://www.whitehouse.gov/briefings-statements/presidentdonaldj-trump-supporting-people-puerto-rico-continue-rebuild-following-natural-disasters/#:~:text=PROVIDING%20 DISASTER%20relief%3A%20President%20Trump,Rico's%20recovery%20from%20Hurricane%20Maria; for more information see CRS Report R46609, The Status of Puerto Rico’s Recovery and Ongoing Challenges Following Hurricanes Irma and María: FEMA, SBA, and HUD Assistance, coordinated by Elizabeth M. Webster. 139 While some projects are funded as capped grants, these award caps are based on cost estimates for individual projects, not predetermined program spending limits. See “PA Alternative Procedures.” 140 Individual PA projects may be capped if completed under Alternative Procedures. These caps are established individually for each project. See “PA Alternative Procedures and Capped Awards.” 141 Per 44 C.F.R. §206.204(c)-(d), emergency work projects must be completed within 6 months from the declaration date, and permanent work within 18 months of the declaration date, though extensions may be granted by the Recipient for six months, and thereafter by FEMA. 142 A recent illustration of the National Delivery Model reflects 19 steps before obligation. FEMA, Public Assistance Process Overview, Briefing Slides, January 16, 2020, slide 11. Provided to CRS by the FEMA Office of Congressional and Legislative Affairs. Available to congressional offices upon request. 143 See, for example, former FEMA Administrator Brock Long, oral testimony, HSGAC, Culture of Preparedness, pp. 6-7. 144 CBO, Potential Increase in Hurricane Damage in the United States: Implications for the Federal Budget, June 2016, pp. 10-11 (hereinafter CBO, Hurricane Damage: Federal Budget). 145 CBO, Hurricane Damage: Federal Budget; Adam Rose et al., “The Role of a Deductible/Credit System for PostDisaster Public Assistance in Meeting Alternative Policy Goals,” Journal of Environmental Planning and Congressional Research Service 26 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Trends in PA Expenditures Obligations by Category Permanent work accounted for more than half ($62 billion, or 57.4% of total) of PA obligations for projects from FY2000 through FY2020 (see Figure 8). Just under 40% of PA obligations ($40 billion, or 37.4% of total) supported emergency work projects. The remainder ($5.7 billion, or 5% of total) reflects obligations for PA management costs, which are awarded as a proportion of PA project obligations. The category of work claiming the largest share of obligations was Category B—Emergency Protective Measures ($24.5 billion, or 23% of total). This trend may continue as obligations accrue for Emergency Protective Measures authorized in response to the COVID-19 pandemic, which are not included in these figures. COVID-19 PA obligations (entirely for Emergency Protective Measures) totaled more than $6 billion in FY2020 (see Appendix A).146 Figure 8. FEMA’s Public Assistance Program Obligations by Category, Fiscal Years 2000-2020 According to FEMA Data, as Share of Total Obligations Source: CRS analysis of OpenFEMA, “Public Assistance Funded Projects—Details,” as of December 9, 2020. Notes: Reflects sum of “federal share obligated” by “damage category code” according to FEMA designations, less obligations for COVID-19 pandemic as reported in the source data through the “biological incident” tag. CRS cannot verify the accuracy of FEMA data. Obligations by Hazard Type PA is an “all-hazards” program available to Applicants following a range of incidents including environmental hazards, terrorist attacks, and industrial accidents. However, from FY2000FY2020, the largest portion of program dollars supported response and recovery from hurricanes ($75.6 billion, or 70% of total) as well as other flood-related events like severe storms ($13.7 billion, or 13% of total), floods ($5.1 billion, or 5% of total), and coastal storms and typhoons Management, vol., 63, no. 12 (February 2020), pp. 2163-2193; FEMA, National Strategy Recommendations: Future Disaster Preparedness, September 6, 2013, https://www.fema.gov/media-library-data/ bd125e67fb2bd37f8d609cbd71b835ae/FEMA%20National%20Strategy%20Recommendations%20(V4).pdf. 146 FEMA, Disaster Relief Fund: Monthly Report as of October 31, 2020, November 6, 2020, Fiscal Year 2021 Report to Congress, p. 13, https://www.fema.gov/sites/default/files/2020-11/fema_disaster-relief-fund-report_11-2020.pdf. Congressional Research Service 27 FEMA’s Public Assistance Program: A Primer and Considerations for Congress (see Figure 9). Fires (including wildfires and fires from certain explosions) also account for significant expenditures ($8.0 billion, or 7.5% of total).147 Obligations for other weather- or climate-related emergencies and major disasters (such as snow events, earthquakes, tornados, and drought) each account for 1% or less of cumulative PA spending. Technological failures, industrial accidents, and acts of violence similarly accounted for a small fraction of overall spending. Terrorist attacks, including costs for the September 11, 2001 attacks in New York and New Jersey, accounted for 4.3% of spending ($4.8 billion) from FY2000FY2020.148 A single chemical spill accounted for 0.0014% of spending. “Other” events including power outages, the Columbia Space Shuttle explosions in Texas and Louisiana, a bridge collapse, and a fertilizer plant explosion each accounted for less than 1% of funding. Figure 9. FEMA’s Public Assistance Program Obligations by Hazard, Fiscal Years 2000-2020 According to FEMA Designation of “Incident Type” (in millions of dollars) Source: CRS analysis of OpenFEMA, “Public Assistance Funded Projects—Details,” as of December 9, 2020. Excludes obligations for COVID-19. CRS cannot verify the accuracy of FEMA data. Notes: Reflects sum of “federal share obligated” by incident type, less obligations for COVID-19 pandemic as reported in the source data through the “biological incident” tag. Categorization reflects FEMA’s designation of “incident type,” which may include inconsistencies. * FEMA data categorizes costs for the 9/11 terrorist attacks in New York and New Jersey as “Fire”. If categorized as “Terrorist,” like costs for 9/11 terrorist attacks in Virginia, then the total costs for “Terrorist” are approximately $3.2 billion and for “Fire” are approximately $4.8 billion. 147 FEMA data categorizes costs for the 9/11 terrorist attacks in New York and New Jersey as “Fire”. If these incidents were categorized as “Terrorist,” as FEMA categorized 9/11 terrorist attacks in Virginia, then the total costs for “Terrorist” are approximately $3.2 billion and for “Fire” are approximately $4.8 billion. 148 FEMA data categorizes costs for the 9/11 terrorist attacks in New York and New Jersey as “Fire”. If these incidents were categorized as “Terrorist,” as FEMA categorized 9/11 terrorist attacks in Virginia, then the total costs for “Terrorist” are approximately $3.2 billion and for “Fire” are approximately $4.8 billion. Congressional Research Service 28 FEMA’s Public Assistance Program: A Primer and Considerations for Congress Obligations by State The geography of PA obligations reflects spending by hazard and is concentrated around the Gulf coast (see Figure 10). Louisiana, New York, Florida, Puerto Rico, and Texas account for the greatest expenditures owing in part to their recoveries from major hurricanes, as well as New York’s 9/11 terrorist attacks. California follows due largely to damages from recent wildfires. Many other states and territories, by contrast, have received far fewer PA dollars. Figure 10. FEMA’s Public Assistance Program Obligations by State and Territory, Fiscal Years 2000-2020 According to FEMA Data Source: CRS analysis of OpenFEMA, “Public Assistance Funded Projects—Details.” Reflects sum of “federal share obligated” by state. Note: Reflects sum of “federal share obligated” by state, less obligations for COVID-19 pandemic as reported in the source data through the “biological incident” tag. CRS cannot verify the accuracy of FEMA data. Congressional Considerations Congress has addressed the PA Program repeatedly in hearings and legislation over the past 10 years. Additionally, GAO and the Office of the Inspector General (OIG) of the Department of Homeland Security (DHS) have both conducted numerous overviews of the PA Program in the past decade. Seven persistent issues from these exchanges are summarized in the following sections. Additional PA policy issues that have been identified but exceed the scope of this report include:  cancelled, disputed, improper, or noncompliant federal and local contracts for disaster recovery work;149 149 See, for example, testimony of Rep. Bennie Thompson, House Homeland Security Committee, Lessons from the Congressional Research Service 29 FEMA’s Public Assistance Program: A Primer and Considerations for Congress      delayed, partial, or improper federal payments and reimbursements;150 inconsistent cost-share adjustments;151 deficiencies in the logistical management and distribution of PA Direct Federal Assistance, including emergency commodities, personnel, and resources;152 delays and opacity with the Public Assistance Appeals process;153 and management controls needed for PA informational technology. 154 Cost of PA Program Congress may consider the recent discussion of PA expenditures,155 given their scale as well as the general lack of restrictions on overall PA spending (see “PA Funding”). Further, multiple federal budget and oversight agencies have cautioned that climate change and population growth 2017 Disasters; testimony of Rep. Peter King, House Homeland Security Committee, Road to Recovery, pp. 37-38; DHS OIG, FEMA’s Public Assistance Grant to PREPA and PREPA’s Contracts with Whitefish and Cobra Did Not Fully Comply with Federal Laws and Program Guidelines, OIG-20-57, July 27, 2020 (hereinafter DHS OIG, FEMA Whitefish Contracts), https://www.oig.dhs.gov/sites/default/files/assets/2020-07/OIG-20-57-Jul20.pdf; GAO, Disaster Assistance: FEMA Should Take Additional Actions to Strengthen Fraud Risk Management for Public Assistance Emergency Work Grants, GAO-20-604, September 2020, https://www.gao.gov/assets/710/709754.pdf (hereinafter GAO, FEMA Fraud Risk Management); U.S. Congress, House Subcommittee on Emergency Preparedness, Response, and Recovery and House Subcommittee on Oversight, Management, and Accountability, FEMA Contracting: Reviewing Lessons Learned from Past Disasters to Improve Preparedness, 116th Cong., 1st sess., May 9, 2019, H.Rept. 116-18. 150 See, for example, testimony of Rep. Gonzalez-Colon, U.S. Congress, House Committee on Transportation and Infrastructure, Subcommittee on Economic Development, Public Buildings and Emergency Management, FEMA’s Priorities for 2020 and Beyond, 116th Cong., 2nd sess., March 11, 2020, pp. 20-21; testimony of Rep. Mucarsel-Powell, House Committee on Transportation and Infrastructure Committee, Disaster Preparedness: DRRA Implementation and FEMA Readiness, 116th Cong., 1st sess., May 22, 2019, No. 116-18 (hereinafter House Transportation and Infrastructure, DRRA Implementation), pp. 18-20. 151 GAO, Improved Criteria, pp. 33-37. 152 See GAO, COVID-19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions, GAO-20-701, September 21, 2020, https://www.gao.gov/products/GAO-20-701; DHS OIG, FEMA’s Logistics Supply Chain Management System May Not Be Effective During a Catastrophic Disaster, OIG-14-151, September 2014, https://www.oig.dhs.gov/assets/Mgmt/2014/OIG_14-151_Sep14.pdf; FEMA, 2017 Hurricane Season After-Action Report, July 12, 2018. 153 GAO, Additional Actions Would Improve Data Quality and Timeliness of FEMA’s Public Assistance Appeals Process, GAO-18-143, December 15, 2017 (hereinafter GAO, FEMA’s PA Appeals), https://www.gao.gov/products/ GAO-18-143; HSGAC, Stafford Act Reform, pp. 2, 7, 29-30, 35, 40, 42; DHS OIG, Opportunities to Improve FEMA’s Public Assistance Appeals Process, OIG-11-49, March 2011, https://www.oig.dhs.gov/sites/default/files/assets/Mgmt/ OIG_11-49_Mar11.pdf. 154 GAO, Emergency Management: FEMA Has Made Progress, but Challenges and Future Risks Highlight Imperative for Further Improvements, GAO-19-594T, June 12, 2019, pp. 15-16, 26-27 (hereinafter GAO, FEMA Progress), https://www.gao.gov/assets/700/699640.pdf. 155 See, for example, Senate Committee on Homeland Security and Governmental Affairs, The Path to Efficiency: Making FEMA More Effective For Streamlined Disaster Operations, 113th Cong., 2nd sess., July 24, 2014, S.Hrg. 113586, pp. 9-13 (hereinafter HSGAC, Path to Efficiency); GAO, FEMA Progress, pp. 17-18; CBO, Hurricane Damage: Federal Budget, pp. 25-28; GAO, Limiting the Federal Government’s Fiscal Exposure by Better Managing Climate Change Risks, GAO-19-157SP, pp. 113-115, https://www.gao.gov/assets/700/697245.pdf; Lloyd Dixon, Jason Thomas Barnosky, and Noreen Clancy, Insuring Public Buildings, Contents, Vehicles, and Equipment Against Disasters: Current Practices of State and Local Government and Options for Closing the Insurance Gap, RAND Corporation, October 2020 (hereinafter, RAND, Closing the Insurance Gap), https://www.rand.org/pubs/research_reports/RRA3321.html. Congressional Research Service 30 FEMA’s Public Assistance Program: A Primer and Considerations for Congress in high-risk areas may create further federal fiscal exposure through PA.156 Congress and FEMA have recently acted to control PA spending, authorizing Alternative Procedures and support for insurance coverage and mitigation investments, as discussed below. The Alternative Procedures pilot program enacted in SRIA modified PA procedures partly to control costs of individual PA projects (for more information see below, “Alternative Procedures”).157 Whether Alternative Procedures have actually reduced costs remains unclear. FEMA and Congress have also promoted mitigation and insurance coverage among PA Applicants in part to reduce future liability through the PA Program. The enactment of DRRA in 2018 included several provisions to promote mitigation, partly as a means to reduce post-disaster recovery expenditures (see “Promoting Resilience Through PA”).158 FEMA‘s Risk Rating 2.0 will update flood risk assessments and potentially broaden NFIP insurance requirements; FEMA announced it will be effective in October 2021.159 This change may increase coverage among PAeligible facilities, thereby reducing the amount of future uninsured damages eligible for PA. Given that PA obligations are currently concentrated in flood-related events (see Figure 9), the consequences of these new requirements could be significant. These innovations may also respond to the concern that PA policies—by providing PA for uninsured damages—may disincentivize Applicants from undertaking mitigating measures or purchasing sufficient insurance.160 Congress may consider proposals to address PA spending levels. PA expenditures are partly determined by two critical factors: whether PA is authorized for a given incident, and the federal cost share for that incident. FEMA recently initiated rulemaking to increase the damage thresholds used to evaluate requests for PA, as recommended by GAO and analyzed by the Congressional Budget Office (CBO).161 FEMA estimates that the proposed rule, had it been 156 GAO, Natural Hazard Mitigation: Various Mitigation Efforts Exist, but Federal Efforts Do Not Provide a Comprehensive Strategic Framework, GAO-07-403, August 2007, pp. 11, 24-26, https://www.gao.gov/assets/270/ 265689.pdf; CBO, Hurricane Damage: Federal Budget; GAO, Disaster Recovery: Recent Disasters Highlight Progress and Challenges, GAO-20-183T, October 22, 2019, pp. 1-2 (hereinafter GAO, Disaster Recovery Progress), https://www.gao.gov/assets/710/702173.pdf; GAO, Fiscal Exposure: Improving Cost Recognition in the Federal Budget, GAO-14-28, October 2013, p. 7, https://www.gao.gov/assets/660/658620.pdf. 157 Section 428(c)(1) of the Stafford Act; 42 U.S.C. §5189f(c)(1). 158 See “Background and Need for Legislation” in U.S. Congress, House Committee on Transportation and Infrastructure, Disaster Recovery Reform Act, report to accompany H.R. 4460, 115th Cong., 2nd sess., H.Rept. 1151098, part 1, pp. 15-20; U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Disaster Recovery Reform Act, report to accompany S. 3041, 115th Cong., 2nd sess., S.Rept. 115-446. 159 FEMA, “Risk Rating 2.0,” https://www.fema.gov/flood-insurance/work-with-nfip/risk-rating; FEMA “Risk Rating 2.0 Overview,” September 2019, https://www.fema.gov/media-library-data/1569002542461a458061bb06a2d7cf6dbdf83bbd8d763/RiskRatingOverview_May2019_to_Sept2019.pdf; CBO, Expected Costs of Damage from Hurricane Winds and Storm-Related Flooding, April 2019, pp. 24-25 (hereinafter CBO, Expected Costs). 160 For concerns, see, for example, Meri Davlasheridze and Qing Miao, “Does Governmental Assistance Affect Private Decisions to Insure? An Empirical Analysis of Flood Insurance Purchases,” Land Economics, vol. 95, no. 1, February 2019, pp. 124-145; DHS OIG, FEMA’s Process for Tracking Public Assistance Insurance Requirements, OIG-12-18, December 2011, https://www.oig.dhs.gov/assets/Mgmt/OIG_12-18_Dec11.pdf (hereinafter DHS OIG, FEMA PA Insurance Requirements 2011); Office of Management and Budget, A Budget for America’s Future: Analytical Perspectives, Fiscal Year 2021 Budget of the U.S. Government, p. 112, https://www.whitehouse.gov/omb/analyticalperspectives. Other research has found that PA may not disincentivize insurance uptake or mitigation. See literature review and survey data in RAND, Closing the Insurance Gap, pp. 52-58. 161 See CRS Insight IN11534, Authorizing Stafford Act Public Assistance, by Erica A. Lee; FEMA, DHS, “Proposed Rule: Cost of Assistance Estimates in the Disaster Declaration Process for the Public Assistance Program,” 85 Federal Register 80719, December 14, 2020; GAO, Improved Criteria, pp. 24-28; CBO, Hurricane Damage: Federal Budget, Congressional Research Service 31 FEMA’s Public Assistance Program: A Primer and Considerations for Congress finalized, would have reduced the number of major disaster declarations authorizing PA by approximately 27% and reduced the total amount of PA provided by several billion dollars over the rule’s study period.162 As a result, more disaster relief costs may be borne by nonfederal entities.163 PA expenditures are currently concentrated in areas affected by the most costly disasters, and efforts to increase the thresholds to warrant PA may further concentrate PA expenditures (see Figure 10).164 FEMA anticipates that the proposed rulemaking, if enacted, may allow FEMA to focus resources on more severe events rather than smaller disasters.165 States, as defined by the Stafford Act, could deploy or develop their resources to independently manage smaller incidents.166 If Congress seeksto further reduce PA expenses, Congress could consider additional ways to shift a greater share of the costs of disaster recovery back to nonfederal entities, for example, by reducing the minimum federal cost share of PA, encouraging the use of state and territorial rainy day funds and purchase of reinsurance or catastrophe bonds, or implementing a deductible that each Recipient must meet before PA is authorized.167 Congress may consider the extent to which nonfederal governments already absorb the rising costs of disasters when reviewing proposals to reduce PA spending.168 Recent research has shown that SLTT spending on response and recovery is highly variable and inconsistently tracked.169 In 2003, FEMA’s Emergency Management Institute estimated that 3,500-3,700 incidents per year are managed without requests for federal assistance.170 Congress may consider in particular the p. 27. 162 FEMA, “Proposed Rule: Cost of Assistance,” p. 80732. 163 Ibid. 164 For more information, see CRS Report R45484, The Disaster Relief Fund: Overview and Issues, by William L. Painter, pp. 20-22. 165 FEMA, “Proposed Rule: Cost of Assistance Estimates in the Disaster Declaration Process for the Public Assistance Program,” 85 Federal Register 80724, December 14, 2020. 166 Ibid.; see also GAO, Improved Criteria, Thomas Frank, “Why the U.S. Disaster Agency Is Not Ready for Catastrophes,” Scientific American, August 20, 2019. 167 GAO, Improved Criteria, p. 49; HSGAC, Path to Efficiency, pp. 8-10; CBO, Hurricane Damage: Federal Budget, p. 25; CBO, Expected Costs, pp. 27-29; Carolyn Kousky, Brettle Lingle, and Leonard Shabman, “FEMA Public Assistance Grants: Implications of a Disaster Deductible,” Policy Brief No. 16-04, Resources for the Future, April 2016, https://media.rff.org/documents/RFF-PB-16-04.pdf (hereinafter Kousky et al, “Disaster Deductible”). 168 HSGAC, Path to Efficiency, pp. 10-11; Executive Director of the National Association of Counties (NACo) Matt Chase, Letter to FEMA Administrator Craig Fugate, March 21, 2016, https://www.naco.org/sites/default/files/ attachments/JPS/NACo%20Disaster%20Deductible%20ANPRM%20Comments.pdf; PEW Charitable Trusts, How States Pay for Natural Disasters in an Era of Rising Costs, May 12, 2020, https://www.pewtrusts.org/en/research-andanalysis/reports/2020/05/how-states-pay-for-natural-disasters-in-an-era-of-rising-costs (hereinafter PEW, How States Pay); Pew Charitable Trusts, How States Can Manage the Challenges of Paying for Natural Disasters, September 16, 2020, https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2020/09/how-states-can-manage-the-challengesof-paying-for-natural-disasters (hereinafter PEW, States Manage Challenges). For further information and discussion, see comments for Proposed Rule on Cost of Assistance Estimates, available at https://www.regulations.gov/document/ FEMA-2020-0038-0001/comment. 169 Pew Charitable Trusts, What We Don’t Know About State Spending on Natural Disasters Could Cost Us, June 2018, p. 10, https://www.pewtrusts.org/-/media/assets/2018/06/statespendingnaturaldisasters_v4.pdf; GAO, Budgeting for Disasters: Approaches to Budgeting for Disasters in Selected States, GAO-15-424, March 2015, https://www.gao.gov/ assets/670/669277.pdf. 170 By comparison, Presidents issued an annual average of 146 new Stafford Act declarations (emergencies, major disasters, and Fire Management Assistance Grants) between 2010 and 2020 to which FEMA responded, while also supporting response to incidents that did not receive Stafford Act declarations as well as response from prior year incidents (CRS Analysis of data provided by FEMA Office of Legislative and Congressional Affairs, as of January 15, 2021). FEMA Emergency Management Institute, A Citizen’s Guide to Disaster Assistance, Independent Study IS-7, Congressional Research Service 32 FEMA’s Public Assistance Program: A Primer and Considerations for Congress consequences for state and local budgets strained by the COVID-19 pandemic,171 as well as the consequences for communities forgoing federal assistance that are smaller, rural, or have fewer resources.172 Conversely, Members of Congress who wish to provide further support to nonfederal governments through PA may consider raising the minimum federal cost share in the Stafford Act above 75% for all or some PA costs (for example, for emergency work). If Congress does seel to reduce federal cost support for disaster recovery, Congress may consider providing additional funds for mitigation projects to help reduce losses and outlays at every level of government to mitigate the resulting burden to nonfederal governments (see section on “Promoting Resilience Through PA”).173 Oversight Challenges Congress has expressed persistent interest in the oversight of the PA Program. GAO and the DHS OIG have found that FEMA’s rapid response to disasters and emergencies may undermine robust oversight and fraud prevention among PA Applicants.174 September 2003, pp. 3-4, https://training.fema.gov/emiweb/downloads/is7complete.pdf; cited in testimony of Sallie Clark, then President of National Association of Counties, U.S. Congress, House Committee on Transportation and Infrastructure, Controlling the Rising Cost of Federal Response to Disaster, hearing, 114th Cong., 2nd sess., May 12, 2016, H.Rept. 114-40, p. 13, https://www.govinfo.gov/content/pkg/CHRG-114hhrg20214/pdf/CHRG114hhrg20214.pdf. 171 For more information, see CRS Report R46298, General State and Local Fiscal Assistance and COVID-19: Background and Available Data, by Grant A. Driessen; and “How the COVID-19 Pandemic is Transforming State Budgets,” Urban Institute, updated March 12, 2021, https://www.urban.org/policy-centers/cross-center-initiatives/stateand-local-finance-initiative/projects/state-fiscal-pages-covid-edition. See also CRS Insight IN11534, Authorizing Stafford Act Public Assistance, by Erica A. Lee. See also Proposed Rule on Cost of Assistance Estimates, comment # FEMA-2020-0038-0032 by representatives of Pew Charitable Trust, p. 5, and comment # 2020-0038-0028 by representatives of the U.S. Council of the International Association of Emergency Managers, https://www.regulations.gov/document/FEMA-2020-0038-0001/comment. 172 National Advisory Committee Report to the FEMA Administrator, November 2020, pp. 12-13, https://www.fema.gov/sites/default/files/documents/fema_nac-report_11-2020.pdf; Simone J. Domingue and Christopher T. Emrich, “Social Vulnerability and Procedural Equity: Exploring the Distribution of Disaster Aid Across Counties in the United States,” The American Review of Public Administration, June 18, 2019; Rebecca Hersher, “How Federal Disaster Money Favors the Rich,” NPR, March 5, 2019; Sen. Dick Durbin, “Durbin, Duckworth Work to Bring Fairness to FEMA Disaster Declaration Process,” webpage, June 13, 2019, https://www.durbin.senate.gov/newsroom/ press-releases/durbin-duckworth-work-to-bring-fairness-to-fema-disaster-declaration-process. Rep. Rodney Davis, “Davis Urges FEMA to Consider Local Impact When Determining Latest Illinois Disaster Request,” March 9, 2016, https://rodneydavis.house.gov/news/documentsingle.aspx?DocumentID=398970. See also Proposed Rule on Cost of Assistance Estimates, comments # FEMA-2020-0038-003, submitted December 17, 2020, and # FEMA-2020-00380020, submitted February 5, 2021, https://www.regulations.gov/document/FEMA-2020-0038-0001/comment. 173 Governors Steve Bullock and Brian Sandoval on behalf of the National Governor’s Association (NGA), submitted testimony, and former FEMA Administrator Brock Long, testimony, HSGAC, Prioritizing Preparedness, pp. 5, 61-62; CBO, Hurricane Damage, pp. 3, 28; CBO, Expected Costs. See also concerns about the effects of reducing PA declarations on mitigation investments in Proposed Rule on Cost of Assistance Estimates, comment # FEMA-20200038-0032 by representatives of Pew Charitable Trust, pp. 4-5, and comment # FEMA-2020-0038-0025 by representatives o [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR46749. Public record. Not legal advice.