# FEMA's Hazard Mitigation Assistance and Mitigation Planning Regulations

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2021-19186

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** September 10, 2021
- **Citation:** 86 FR 50653

## Text

DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
44 CFR Parts 77, 78, 79, 80, 201, and 206
[Docket ID: FEMA-2019-0011]
RIN 1660-AA96
FEMA's Hazard Mitigation Assistance and Mitigation Planning Regulations

AGENCY:

Federal Emergency Management Agency, DHS.

ACTION:

Final rule.

SUMMARY:

This final rule revises the Federal Emergency Management Agency's Hazard Mitigation Assistance and mitigation planning regulations to reflect current statutory authority and agency practice.

DATES:

This rule is effective October 12, 2021.

ADDRESSES:

The docket for this rulemaking is available for inspection using the Federal eRulemaking Portal at
http://www.regulations.gov
and can be viewed by following that website's instructions.

FOR FURTHER INFORMATION CONTACT:

Katherine Fox, Assistant Administrator for Mitigation, Federal Emergency Management Agency, 202-646-1046,
Katherine.Fox5@fema.dhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background and Discussion of the Rule

On August 28, 2020, the Federal Emergency Management Agency (FEMA) published a Notice of Proposed Rulemaking (NPRM) (85 FR 53474) to revise FEMA's Hazard Mitigation Assistance (HMA) program regulations to reflect current statutory authority and agency practice.
1

FEMA's HMA program regulations consist of the Flood Mitigation Assistance (FMA) grant program, the Hazard Mitigation Grant Program (HMGP), financial assistance for property acquisition and relocation of open space, and mitigation planning regulations. The NPRM proposed to revise the FMA grant program regulations to incorporate changes made by amendments to the National Flood Insurance Act of 1968 (NFIA).
2

The NPRM also proposed to update terms and definitions throughout the HMA and Mitigation Planning regulations to better align with uniform administrative requirements that apply to all Federal assistance.

1
FEMA has already implemented most of the changes discussed in this Final Rule through the
Hazard Mitigation Assistance Guidance
in 2013.
See
FEMA, Hazard Mitigation Assistance Guidance, Feb 27, 2015, available at
https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf
(last accessed Feb 5, 2021). FEMA is now updating its HMA regulations to reflect these changes.

2
42 U.S.C. 4001
et seq.

The NPRM solicited public comment on these proposed changes. FEMA received five comments related to the rulemaking and one unrelated comment that was outside the scope of the rulemaking. (The unrelated comment was an expression of the commenter's political views and therefore not germane to this rule). FEMA does not consider the one unrelated comment in this preamble. In this final rule, FEMA adopts the changes it proposed in the NPRM with some minor revisions in consideration of the related comments as well as Title 2 of the Code of Federal Regulations (CFR) part 200. FEMA describes the comments received and changes to the final rule below.

II. Summary and Discussion of Public Comments

FEMA received five written responses to the amendments to its Hazard Mitigation Assistance (HMA) program regulations. All commenters submitted responses online at regulations.gov. FEMA reviewed each unique comment and considered whether to change the regulation in response to the comment. A summary of each comment and FEMA's response is provided below. Responses are listed in order of Docket ID number.

Individual Citizen, Docket ID FEMA-2019-0011-0003

This individual citizen recommended that FEMA eliminate the FMA program and reallocate those resources to be available for the purposes of obtaining open space. FEMA appreciates this comment and recognizes the importance of maintaining open space as a critical component of many hazard mitigation programs; indeed, this is why the acquisition of open space is one of the eligible project types under FEMA's HMA programs. However, FEMA lacks authority to eliminate the FMA program because FEMA is required by statute to implement this program (42 U.S.C. 4104c(a)(1)-(3)). FEMA also recognizes that a one size fits all approach to hazard mitigation is not aligned with the comprehensive community and hazard mitigation planning processes.

Individual Citizen, Docket ID FEMA-2019-0011-0004

This individual citizen recommended that the definition of “community” be expanded to include community organizations. In response, FEMA notes that “community” is defined in statute in 42 U.S.C. 4104c(h)(1) and as a result, FEMA cannot reinterpret, expand or change this definition. Although private nonprofits and other private sector entities such as businesses, industry associations, native corporations, and individuals are unable to apply for FEMA's HMA programs based on statute, FEMA encourages partnerships and recognizes that these entities can provide value to projects eligible for HMA funding.

The Association of State Floodplain Managers, Docket ID FEMA-2019-0011-0005

The Association of State Floodplain Managers (ASFPM) is an organization of professionals involved in floodplain management, flood hazard mitigation, the flood insurance, and flood preparedness, warning and recovery. The ASFPM Flood Mitigation Committee submitted a number of comments on behalf of the organization.

First, the ASFPM expressed concerns that the proposed 44 CFR 77.7(b) states that “[Pre-award] costs can only be incurred during the open application period for the FMA program.” Under FEMA's current practice, eligible pre-award costs may be incurred prior to application submission (limited by 44 CFR 79.8 to costs incurred during the open application period). However, it is not FEMA's intent to disallow otherwise

eligible pre-award costs that were incurred prior to the open application period. In response to this comment, FEMA has removed the statement referenced above from 44 CFR 77.7(b). Costs incurred prior to award may be reimbursed if they meet the eligibility requirements and are in compliance with 2 CFR part 200 Subpart E, Cost Principles. Pre-award costs include costs directly related to developing an application or subapplication that are incurred prior to the date of the grant award and are allowed subject to FEMA approval at time of award. Such costs may include gathering National Environmental Policy Act (NEPA) data or developing a Benefit Cost Analysis (BCA), preparing design specifications (including the development of elevation plans), or conducting workshops or meetings related to development and submission of subapplications.

Second, the ASFPM identified that the proposed 44 CFR 77.6(c)(2)(vi) states, “Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible,” which is inconsistent with recent Notices of Funding Opportunity (NOFOs) speaking to the eligibility of “community mitigation projects,” which could qualify as non-localized flood risk reduction projects. It is not FEMA's intent for these project types to be ineligible under all circumstances. In response to this comment, FEMA has added language to 44 CFR 77.6(c)(2)(vi) for clarity and consistency with 42 U.S.C. 4014c(c)(3)(E), limiting funding to localized projects, except in rare instances. As a result, 44 CFR 77.6(c)(2)(vi) now reads, “Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible unless the Administrator specifically determines in approving a mitigation plan that such activities are the most cost-effective mitigation activities for the National Flood Mitigation Fund.” This change to the regulatory text reflects a change in FEMA's current practice and emphasizes that 42 U.S.C. 4014c allows the option to authorize these project types in very rare circumstances.

Third, the ASFPM noted that the revised HMA regulations do not specifically list project scoping (previously known as “advance assistance”) as an eligible activity under the proposed 44 CFR 77.6(c). However, project scoping is an eligible activity under FEMA's current practice. In response to this comment, therefore, FEMA has added paragraph (4) to the list of eligible activities in 44 CFR 77.6(c), it reads: “
Project Scoping.
Activities that enable subapplicants to develop complete subapplications for eligible mitigation activities including but not limited to data development.”

Fourth, the ASFPM commented that punishing a State for an individual community's land use violation by withholding funding from the entire State (as outlined in the proposed 44 CFR 80.19(e)(2)) seems mismatched and extreme, and suggested that withholding award or assistance be limited to the community that is in violation. The relationship between the State as the recipient, and a local community as a subrecipient is defined in 2 CFR 200.1, 200.332, and 200.339. The penalty of holding the State accountable for a community violation is consistent with the State acting as the recipient of the grant and being primarily responsible for compliance with grant terms. As a result, FEMA has determined to retain in 44 CFR 80.19(e)(2) the option to enforce this penalty as a result of land use noncompliance. This is consistent with FEMA's current practice.

Fifth, the ASFPM identified the ongoing problem that States and communities are unable to access data on repetitive loss properties, severe repetitive loss properties, and National Flood Insurance Program (NFIP) insured structures due to FEMA's current restriction on privacy data. The ASFPM stated that this information is needed for the purposes of FEMA's application processes and the development of hazard mitigation plans. FEMA appreciates this feedback, is aware of this issue, and is currently working to address this problem throughout the Federal Insurance and Mitigation Administration (FIMA). In working on this issue, it is FEMA's intent to arrive at a solution that will both protect government interests and property owners' privacy, while also making the information that is needed accessible to communities.

Individual Citizen, Docket ID FEMA-2019-0011-0006

This individual citizen spoke to the value and benefits of nature-based solutions and suggested that FEMA explicitly speak to nature-based solutions within the regulation. In response, FEMA notes that nature-based solutions are eligible under FMA under localized flood risk reduction projects or other activities as identified in a community's hazard mitigation plan, as has been FEMA's current practice. FEMA recognizes and embraces nature-based solutions as an approach to project design that can be applied to many different project types, but on its own is not a separate project type. Therefore, FEMA does not intend to identify and speak to nature-based solutions as a specific project type within the regulation. However, FEMA continues to advocate for the incorporation of nature-based solutions into mitigation activities funded through HMA grants.

Individual Citizen, Docket ID FEMA-2019-0011-0007

This individual citizen encouraged FEMA to allow for the use of eminent domain for the purpose of carrying out involuntary buyout projects. The commenter speaks to proposed 44 CFR 80.11(a), which states “Eligible acquisition projects are those where the property owner participates voluntarily, and the recipient/subrecipient will not use its eminent domain authority to acquire the property for the open space purposes should negotiations fail.” FEMA does not intend to change the voluntary component of 44 CFR 80.11; however, FEMA offers clarification that this voluntary limitation is only applicable to open space projects. Voluntary property owner participation is not required under other project types. For example, if a community wanted to submit an application for a flood retention or control project, it could exercise its eminent domain powers to acquire applicable parcels. Furthermore, in response to this comment, FEMA notes that it is up to recipients to prioritize and submit projects for funding as outlined in 44 CFR 77.3(b)(3).

III. Changes to Final Rule

In response to the comment that noted inconsistencies with the regulatory text and Fiscal Year 2020 NOFOs for Flood Mitigation Assistance grants, the proposed 44 CFR 77.6(c)(2)(vi) now reads, “Localized flood risk reduction projects that lessen the frequency or severity of flooding and decrease predicted flood damages, and that do not duplicate the flood prevention activities of other Federal agencies. Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible unless the Administrator specifically determines in approving a mitigation plan that such activities are the most cost-effective mitigation activities for the National Flood Mitigation Fund.”

In response to the comment that project scoping (previously known as “advance assistance”) is not listed as an

eligible activity under the proposed 44 CFR 77.6(c), FEMA has added § 77.6(c)(4): “
Project Scoping.
Activities that enable subapplicants to develop complete subapplications for eligible mitigation activities including but not limited to data development.”

In response to the comment that expressed concerns regarding the statement “[Pre-award] costs can only be incurred during the open application period for the FMA program,” this statement has been removed. Section 77.7(b) now reads, “Pre-award costs. FEMA may fund eligible pre-award costs related to developing the application or subapplication at its discretion and as funds are available. Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project or planning proposal. Costs associated with implementation of the activity but incurred prior to award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed.”

In addition to the above and in order to align with 2 CFR part 200, FEMA removed its proposed definition of “management costs” in the proposed 44 CFR 77.2. The NPRM's proposed definition of “management costs” inadvertently tied it to FEMA's regulations implementing its authority under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford Act”).
3

However, the FMA Program is not authorized under the Stafford Act, but rather the National Flood Insurance Act.
4

As a result, direct and indirect administrative costs are governed by the cost principles of 2 CFR part 200 Subpart E, and FEMA has added the phrase “(direct and indirect administrative costs pursuant to 2 CFR part 200 Subpart E)” in 44 CFR 77.7(a)(1)(i) to clarify this. Because the FMA Program is authorized under the National Flood Insurance Act, FEMA also added the National Flood Insurance Act both to the Authority citation for 44 CFR part 201 and to section 201.1. Lastly, to conform with updates to 2 CFR published on August 13, 2020,
5

and other updates to statutory citations, FEMA removed the phrase “to carry out an activity under the FMA program” in the definition of “recipient” in 77.2(h) and updated citations to 2 CFR part 200 and 25 U.S.C. 5131 as necessary.

3
Public Law 93-288 (42 U.S.C. 5121-5207);
see
44 CFR part 207.

4
42 U.S.C. 4104c.

5
85 FR 49506.

IV. Regulatory Analysis

A. Executive Order 12866, as amended, Regulatory Planning and Review

Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it.

FEMA did not receive any public comments relating to the RIA in the NPRM and has made no changes to this Regulatory Analysis as a result. Additionally, changes made to the Final Rule due to public comments were due to clarifications in regulatory text, and changes made to better conform the text with statute. These changes will not have an economic impact, and FEMA does not address them further in this analysis.

Need for Regulation

The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), Public Law 112-141, 126 Stat. 916, amended the National Flood Insurance Act of 1968 (NFIA) to require changes to FEMA's Hazard Mitigation Assistance (HMA) programs. FEMA implemented most of these changes through the
Hazard Mitigation Assistance Guidance
in 2013.
6

FEMA is now updating its HMA regulations to reflect these changes.

6
FEMA, Hazard Mitigation Assistance Guidance, Feb 27, 2015, available at
https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf
(last accessed Feb 5, 2021).

Following guidance in OMB Circular A-4, FEMA assessed the impacts of this rule against a no-action baseline as well as a pre-statutory baseline. The no-action baseline is an assessment against what the world would be like if the rule is not adopted. The pre-statutory baseline is an assessment against what the world would be like if the relevant statute(s) had not been adopted and, in this case, already been implemented through guidance.

Under a no-action baseline, this rule results in cost savings to FEMA, and familiarization costs to HMA recipients. Under a pre-statutory baseline, this rule results in familiarization costs to HMA recipients, cost savings to FEMA, distributional impacts, and qualitative benefits, but no marginal costs. The annual distributional impact of this rule is estimated at $24.96 million
7

in increased transfers from FEMA to HMA recipients.

7
In the NPRM, FEMA incorrectly stated in the introductory text of the RIA that the annual distributional impact of the rule was $4.16 million in transfers. 86 FR 53474 at 53490. However, this was a clerical error which appeared in that sentence and was not repeated in the remainder of the document. As noted in the remainder of the RIA, the correct estimate was $28.4 million. 86 FR 53474 at 53491 (Table 1); 53495 (text and Footnote 113); and 53496 (Table 8-A-4).

FEMA addressed the substantive changes in this analysis and presented how they affect costs, benefits, and transfers. The remaining changes are nonsubstantive, meaning they are technical and include definitional updates and other changes that modernize and standardize regulations, reduce redundancy, or increase readability. The nonsubstantive changes do not have an economic impact. FEMA included a detailed marginal analysis table that summarizes the substantive and nonsubstantive changes in this rule and the related impacts in the public docket for this rulemaking available on
www.regulations.gov
under Docket ID FEMA-2019-0011-0002.

Affected Population

This rule affects all recipients of FEMA's Flood Mitigation Assistance (FMA) grants. Recipients include 56 State and territorial governments and 574 Indian Tribal governments.
8

Local governments and governmental organizations such as flood districts and sewer districts are considered subrecipients and must apply through a State or Indian Tribal government. For simplicity, FEMA refers to the affected population as “recipients” throughout the analysis, except in cases where there are different requirements for recipients or subrecipients.

8
Indian Entities Recognized by, and Eligible to Receive Services from the United States Bureau of Indian Affairs, 86 FR 7554, (Jan. 29, 2021).

Baselines

BW-12 made substantial changes to FEMA's HMA programs. FEMA implemented most of these changes via the HMA Guidance in 2013. FEMA is now codifying those changes in this rule. Following guidance in OMB Circular A-4, FEMA assessed the impacts of this rule against a pre-statutory baseline covering 2006-2012

(pre-BW-12) and a no-action baseline covering 2013-2019
9

(post-BW-12).

9
2019 is the last year complete data is available.

The pre-statutory baseline shows the effects of the rule compared to the current regulations (
i.e.,
as if FEMA had not already implemented the changes through the HMA Guidance). The no-action baseline shows the effects of the rule compared to current FEMA practice (
i.e.,
compared to the HMA Guidance, which reflects FEMA's current practice, but not the current regulations).

Under the pre-statutory baseline, the rule has distributional impacts and qualitative benefits. The distributional impacts affect recipients of Repetitive Loss (RL) grants and Severe Repetitive Loss (SRL) grants that were combined into the FMA program pursuant to BW-12. Under BW-12, RL and SRL properties received increased assistance, while standard mitigation properties received decreased assistance. Under the no-action baseline, the only impacts are implementation costs and Federal cost savings. Table 1 shows the impacts of this rule under the pre-statutory and no-action baselines.

Table 1—Annual Effects of Rule Under Pre-Statutory and No-Action Baselines
[2019$]

Baseline
Costs
Benefits
Transfers

Pre-Statutory
$1,041 (year 1 only)
Qualitative
$24.96 million from FEMA to grant recipients.

No-Action
$1,041 (year 1 only)
$81,159
None.

Effects

The primary effects of BW-12 that are codified by this rule resulted from changes in the Federal cost shares. A cost share is the portion of the costs of a Federally assisted project or program borne by the Federal Government. FEMA pays a portion of the cost of a project, or the Federal cost share, and the recipient pays the remaining share.

FMA Grant Cost Sharing Changes.
The current regulations still reflect the pre-BW-12 cost share provisions of the RL and SRL grant programs. BW-12 modified these two programs and FEMA implemented the modifications in the 2013 HMA Guidance. The newly expanded FMA program now serves the recipients of these grant programs.

BW-12 increased the RL Federal cost share from 75 percent to between 75 and 90 percent, and increased the SRL Federal cost share from between 90 and 100 percent to 100 percent. Table 2 shows the cost shares by type of grant.

Table 2—Cost Share by Type of Grant

Baseline
RL

FEMA cost share
(%)

Recipient cost share
(%)

SRL

FEMA cost share
(%)

Recipient cost share
(%)

Pre-Statutory (2006-2012) Pre-BW-12
75
25
90 to 100
10 to 0.

No-Action (2013-2019) Post-BW-12
75-90
10-25
100
0.

Lowering the Cap and Removing the Frequency Restriction.
Prior to BW-12, FMA funds for the development or update of the flood portion of community multi-hazard mitigation plans were capped at $150,000 in Federal funding for States and $50,000 for communities, with a total cap of $300,000 in Federal funding for applications statewide. FEMA could not award State or community planning grants more than once every 5 years.

BW-12 limited FMA grant funds to develop or update the flood portion of community multi-hazard mitigation plans to a $50,000 Federal share to any recipient or a $25,000 Federal share to any subrecipient. BW-12 also removed the restriction on awarding State or community planning grants more than once every 5 years. FEMA discusses the impacts of these changes in the costs section.

Shifting from State Allocations to Competition.
Prior to BW-12, FEMA annually allocated FMA program funding to recipients based on the number of insured properties and RL properties present within the recipient's jurisdiction. Recipients that did not meet the minimum threshold to receive a target allocation had to apply against funds that were set aside for this purpose. BW-12 replaced this process with a fully competitive program that selects subapplications against agency priorities identified annually. This change allows FEMA to identify and mitigate properties with the highest risk from flooding, thereby providing the greatest savings to the NFIP.

Costs

Costs for this rule result from implementation of the rule, rather than the 2013 HMA Guidance. FEMA estimated these costs against the no-action baseline since these are directly attributable to updating the text of the regulation, and not program changes that FEMA already implemented.

Familiarization Costs.
FEMA estimated familiarization costs for States, but not for local emergency management divisions or jurisdictions. FEMA assumed States regularly update their emergency response networks and notify local emergency management divisions on any changes. FEMA believes that States will continue to disseminate the new information through each State's established process. FEMA assumed that each State grant recipient will have two personnel that will need to familiarize themselves and understand the rule by reading the existing and new regulations to understand the changes. FEMA expects each person to spend one hour to become familiar with the changes. FEMA assumes that the rule is likely to be reviewed by each State's Emergency Management Director and one administrative support personnel. FEMA assumes that the U.S. Bureau of Labor Statistics (BLS) occupations

Emergency Management Director (SOC: 11-9160, mean hourly wage $39.68)
10

and First-Line Supervisor of Office and Administrative Support Workers (SOC: 43-1010, mean hourly wage $28.91)
11

are most representative of these roles in a State. Using the 1.46 multiplier,
12

the fully loaded wage rates are $57.93 and $42.21 respectively. The estimated total cost of recipients making themselves familiar with the rule is $5,608 in year 1 ($1,041 per year annualized at 7 percent over 7 years, and $900 at 3 percent). ((56 recipients × 1 hour × $57.93 wage) + (56 recipients × 1 hour × $42.21 wage) = $5,608)

10
May 2019 National Occupational Employment and Wage Rates, National File (xls), First-Line Supervisors of Office & Admin Support Workers (SOC: 43-1010, Average, Column Title: H_Mean). Accessed and downloaded Feb 8, 2021.
https://www.bls.gov/oes/tables.htm.

11
May 2019 National Occupational Employment and Wage Rates, National File (xls), Emergency Management Directors (SOC: 11-9160, Average, Column Title: H_Mean). Accessed and downloaded Feb 8, 2021.
https://www.bls.gov/oes/tables.htm.

12
December 2019 Bureau of Labor Statistics, Employer Costs for Employee Compensation, Table 1. Employer costs per hour worked for employee compensation and costs as a percent of total compensation: Civilian workers, by major occupational and industry group, page 4 ($37.73/$25.91). Accessed and downloaded Feb 8, 2021.
https://www.bls.gov/news.release/archives/ecec_06182020.pdf.

Summary of Costs.
FEMA estimated the rule has familiarization costs of $5,608 in the first year of implementation. FEMA assumed that all staff and resources will come from existing sources and thus represent an opportunity cost.

Benefits

This rule will be beneficial to both FEMA and Hazard Mitigation Grant recipients. While the benefits are not quantifiable, FEMA believes that changes implemented by BW-12 allow it to target the most vulnerable properties, and streamline the mitigation grant process. Under the no-action baseline, most changes in this rule are technical and include definitional updates and other changes made to harmonize FEMA regulations with current FEMA practices and HMA guidance, modernize and standardize the regulations, reduce redundancy, or increase readability. These changes are largely nonsubstantive and do not have an economic impact.

Cost Savings.
FEMA estimated annual costs savings of $81,159 resulting from removal of the definition of “market value” at 44 CFR 79.2(f) and (g). The removal of “market value” is new to this regulation and was not implemented in previous guidance. Currently, the regulation requires FEMA to use the market value of a structure when making grant determinations. Removal of this requirement allows FEMA to consider the value of the structure listed on the flood insurance policy when considering a grant request related to a vulnerable structure, rather than the “market value.” This results in a reduction in the time it takes FEMA personnel to review a grant application. Using “market value” required additional research and appraisals, whereas the flood insurance property value is readily available to FEMA personnel. FEMA estimates that this change reduces the personnel time it takes to review a grant application by an estimated 2 hours per review for a total of $81,159 annually. The removal of “market value” may impact grant amounts due to possible differences from the insured value, but FEMA does not have data available to estimate this impact.

FEMA based its estimates on the estimated annual average number of FMA grant applications that required a market value review between 2013 and 2019 and the wage rates of the personnel reviewing the grants. The annual average number of grant requests was 545. Table 3 shows the annual number of grant requests for vulnerable properties that required a market value review between 2013 and 2019.

Table 3—Annual Grant Requests Requiring Market Value Review

Year
FMA Program

2013
552

2014
374

2015
678

2016
832

2017
743

2018
485

2019
149

Total
3,813

Annual Average
545

Reviews of the grant applications can vary widely from simple—all documentation accompanies the request and requires very little follow-up—to complex. For this analysis, FEMA chose to capture the variability in the grant application reviews by using a weighted average of the hours it takes to complete the reviews. FEMA estimated that 25 percent of the reviews are simple; these reviews take 8 hours each on average to complete. Reviews of applications that are average in their complexity comprise 50 percent of the reviews and are assumed to take 12 hours each. Twenty-five percent of the reviews are complex and take 16 hours on average to complete.
13

Taking a weighted average of the times listed and using the distribution of 25 percent simple/50 percent average/25 percent complex, FEMA estimated that grant application reviews take 12 hours on average to complete. ([(0.25 × 8) + (0.50 × 12) + (0.25 × 16)] = 12 hours)

13
FEMA personnel who review the FMA grant requests provided the information on the average time to review and the discussion of complexity.

Program Specialists (GS 13, step 5) and contracted Civil Engineers conduct the reviews, the Program Specialists conduct 75 percent of reviews and the Civil Engineers conduct the remaining 25 percent. The fully-loaded average hourly wage for GS 13, step 5 at the FEMA regional locations is $77.20
14

and FEMA estimates $66.23
15

is the fully-loaded hourly wage rate for Civil Engineers. Using the 12-hour average estimate for reviewing the grant application, FEMA estimated that each year it spends $486,952 on average to review FMA grant applications. ([(545 grant reviews × 12 hours per review × $77.20 hourly wage for Program Specialist × 0.75) + ([(545 grant reviews × 12 hours per review × $66.23 hourly wage for Civil Engineer × 0.25)] = $486,952.05)

14
Based on the OPM General Schedule of Pay, January 2019, the average base wage of GS 13, step 5 in each of the FEMA regional office locations is $52.88 (Boston, MA; New York, NY; Philadelphia, PA; Atlanta, GA; Chicago, IL; Denton, TX; Kansas City, MO; Denver, CO; Oakland, CA; and Bothell, WA), which is multiplied by a 1.46 benefits multiplier (December 2018, BLS Employer Costs for Employee Compensation) to get a fully loaded wage rate of $77.20/hour. Accessed and downloaded Feb 9, 2021.
https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2019/general-schedule/.

15
Based on Bureau of Labor Statistics May 2019 National Employment and Wage Rate, National File (xls), a Civil Engineer, SOC 17-2050, has a base wage of $45.36, which is multiplied by a benefits multiplier of 1.46 (December 2019, BLS Employer Costs for Employee Compensation) to get a fully loaded wage rate of $66.23/hour. Accessed and downloaded Feb 8, 2021.
https://www.bls.gov/oes/tables.htm.

FEMA estimated that removing the definition of “market value” will reduce its administrative burden by 2 hours per review. This results in each review taking 10 hours instead of 12, on average. Using the same calculation as above and 10 hours instead of 12 hours per review, FEMA's average amount spent each year on reviewing FMA grant applications will be $405,793 and results in an estimated annual cost savings of $81,159. ($486,952 − $405,793 = $81,159)

Clarification of Mitigation Grant Terms and Conditions.
The current HMA grant program regulations contain inconsistencies or vague language that may cause confusion. Specifically,

FEMA will add definitions for “Federal award” and “pass-through entity;” and replace definitions of “grantee,” “subgrant,” and “subgrantee” with “recipient,” “subaward,” and “subrecipient,” respectively. These changes will make the HMA regulations consistent with FEMA's other regulations.

Revising, Adding, or Removing Definitions.
FEMA is revising existing definitions for clarification purposes, add several definitions to conform with BW-12 and current agency practice, and delete others that are obsolete. FEMA believes the changes are clear and more consistent with definitions used in 2 CFR part 200 and the HMA Guidance.
16

16
Hazard Mitigation Assistance Guidance (HMA Guidance), Feb. 8, 2021, available at
https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf
(last accessed Feb. 9, 2021).

Shifting from Standard Mitigations to RL and SRL Structures.
One of the main focuses of this rulemaking is on mitigation grants made to properties in the NFIP that have been repeatedly subject to costly loss claims. FEMA provides a range of available mitigation options including the FMA program to address vulnerable RL and SRL structures. Once a structure is mitigated through one of the programs, it could be protected from flooding, and can be removed from the repetitive flood loss list of un-mitigated properties insured by the NFIP. This reduces the flood vulnerability to RL and SRL structures, preventing further losses to the policyholders, as well as to FEMA. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013 when FEMA implemented it through the HMA Guidance.

Shifting from State Allocations to Competition.
Before BW-12, FMA program funding was based on an allocation methodology that required an analysis of the number of insured properties and RL properties present within a jurisdiction and each State was allocated a share of the overall available funding. BW-12 changed this process to a fully-competitive program that allows FEMA to select subapplications according to FEMA priorities no matter the location.

This change lifted the constraints that were formerly in place against multiple eligible subrecipients in the same jurisdiction with vulnerable properties, allowing a more adequate coverage area within and across States and contributing to the increase in the size and volume of RL and SRL properties covered by each grant. FEMA is able to identify and mitigate properties with the highest risk from flooding and provide the greatest savings to the NFIP. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013 when FEMA implemented it through the HMA Guidance.

Eliminating the Limit on In-Kind Contributions.
Eliminating the limit on in-kind contributions for a recipient's cost share modifies the nature, or make-up, of the recipient's contribution but does not change the overall dollar amount required for the recipient's contribution. FEMA believes this is advantageous because recipients and subrecipients are able to leverage their own optimal mix of in-kind and cash to meet their portion of the cost-share. There is no change to transfers between FEMA and grantees because the cost share does not change; however, the make-up of the recipient's portion changes.

Summary of Benefits.
Under a no-action baseline FEMA believes this rule will promote a better understanding of the FMA program by updating the regulations that govern the HMA programs to conform with adjustments made by BW-12 and current agency practice. These changes will clarify existing requirements and help facilitate the flood portion of the Hazard Mitigation Grant Program processes.

FEMA estimated annual cost savings of $81,159 per year. Removing the definition of “market value” leads to cost savings to FEMA. Removing this definition will reduce the time it takes to conduct an initial grant application review by 2 hours.

Under a pre-statutory (pre-BW-12) baseline, FEMA believes there are considerable benefits associated with the shift to entirely competitive awards for the grants instead of the previous State-specific allocations, as well as the more flexible in-kind match option. The shift to more vulnerable RL and SRL properties by modifying the cost shares and giving priority to applications with the most vulnerable properties are expected to reduce the frequency of loss claims and promote community resiliency through mitigation. There are also qualitative benefits due to the elimination of the cap on FMA funding for States and communities and the opening of the program to a fully competitive award system. These changes enhance FEMA's ability to administer the FMA program in a more streamlined and cost effective manner. Removing State allocations of grant resources and accepting in-kind State contributions further streamline the program. Collectively, these benefits justify the rule and update FEMA's regulations to reflect current statutory authority.

Transfers

Federal Cost Shares.
The adjustments in cost shares made by BW-12 result in distributional impacts, with certain grant programs receiving relative increases and decreases in grant funds. To analyze the impact of changes to the cost shares, FEMA summarized available mitigation project data for standard, RL, and SRL grants.
17

17
FEMA assumes that the mitigation project level grant data with applications comprising mixed property categories resulting in blended cost share percentages (any total cost share not equal to 100 percent, 90 percent, or 75 percent Federal) would be rounded up to the nearest threshold category. This would not round up project values or Federal cost shares in dollar terms, only their tabulation and consideration as RL or SRL. An application with a determined Federal cost share of 91-99 percent would be counted as part of the 100 percent SRL category, while applications with 76-89 percent Federal cost shares would be counted as part of the 90 percent Federal RL category.

Between 2006 and 2012 (pre-BW-12), FEMA provided a total of 390 grants to 244 recipients for 1,014 properties. The value of those grants was $292,374,087, with FEMA paying $205,762,109 and recipients paying $86,611,978. Table 4 shows the distribution of these grants by category.

Table 4—Pre-BW-12 Mitigation Projects and Associated Value by Grant Category
[2019$]

Year

Standard
(≤75% Federal cost share)

Number
of
grants

Value of grants
Federal share obligated

Repetitive loss
(75% Federal cost share)

Number
of
grants

Value of grants
Federal share obligated

Severe repetitive loss
(90-100% Federal cost share)

Number
of
grants

Value of grants
Federal share obligated

2006
93
$39,020,873
$28,914,463

2
$150,655
$150,655

2007
85
46,309,864
33,827,089

2008
70
37,110,276
25,084,903

1
35,166
31,649

2009
54
81,136,958
59,026,566
3
3,027,774
2,475,759
3
653,292
587,963

2010
35
32,715,929
22,915,763
2
1,480,940
897,864

2011
17
17,530,961
11,234,999

2012
25
33,201,399
20,614,436

Average
54
41,003,751
28,802,603
0.71
644,102
481,946
0.86
119,873
110,038

Total
379
287,026,260
201,618,219
5
4,508,714
3,373,623
6
839,113
770,267

The 390 grants from pre-BW-12 were one of three types—Standard Mitigation (up to 75 percent Federal cost share); RL (75 percent Federal cost share); or SRL (90-100 percent Federal cost share). Prior to BW-12, there were 379 Standard Mitigation grants with a total value of $287,026,260. FEMA's share was $201,618,219 and the recipients' share was $85,408,041 (70 percent average Federal cost share). For RL grants, there were five grants with a total value of $4,508,714. FEMA's share was $3,373,623 and the recipients' share was $1,135,091 (75 percent Federal cost share). For SRL grants, there were six grants made with a total value of $839,113. FEMA's share was $770,267 and the recipients' share was $68,846 (92 percent Federal cost share).

Post-BW-12 (2013-2019), FEMA provided a total of 624 grants to 1,153 recipients for 9,737 properties. The total value of those grants was $829,481,486. FEMA's share was $758,759,675 and recipients' share was $70,721,811. Table 5 shows the distribution of these grants by category.

Table 5—Post-BW-12 Mitigation Projects and Associated Value by Grant Category
[2019$]

Year

Standard
(≤75% Federal cost share)

Number of
grants

Value of grants
Federal share obligated

Repetitive loss
(75-90% Federal cost share)

Number of
grants

Value of grants
Federal share obligated

Severe repetitive loss
(100% Federal cost share)

Number of
grants

Value of grants
Federal share obligated

2013
18
$10,917,788
$7,205,740
5
$12,120,501
$10,302,426
65
$100,175,666
$90,158,099

2014
28
8,888,593
5,333,156
5
6,853,281
5,825,289
68
74,883,110
75,631,941

2015
16
7,317,656
5,488,242
8
33,763,761
30,049,747
80
124,352,333
119,378,240

2016
26
11,975,567
8,861,920
12
29,656,451
25,207,983
99
173,836,284
159,929,381

2017
33
13,673,605
10,118,468
5
5,941,663
4,990,997
59
80,043,231
74,440,205

2018
5
5,261,224
3,525,020
16
27,467,838
24,171,697
44
76,784,839
74,481,294

2019
6
2,001,833
1,301,191
5
5,663,833
4,814,258
21
17,902,429
17,544,380

Average
19
8,576,609
5,976,248
8
17,352,475
15,051,771
62
92,568,270
87,366,220

Total
132
60,036,266
41,833,737
56
121,467,328
105,362,397
436
647,977,892
611,563,541

These 624 grants were one of three types—Standard Mitigation (up to 75 percent Federal cost share); RL (75-90 percent Federal cost share); or SRL (90-100 percent Federal cost share) (all post-BW-12 cost shares). There were 132 Standard Mitigation grants with a total value of $60,036,266. FEMA's share was $41,833,737 and the recipients' share was $18,202,529 (70 percent average Federal cost share). For RL grants, there were 56 grants with a total value of $121,467,328. FEMA's share was $105,362,397 and the recipients' share was $16,104,931 (87 percent Federal cost share). For SRL grants, there were 436 grants made with a total value of $647,977,892. FEMA's share was $611,563,541 and the recipients' share was $36,414,351 (94 percent Federal cost share).

These grants often include some ineligible costs, including cost overruns or underruns, the use of insurance proceeds that FEMA deducted as a duplication of benefits,
18

or Increased Cost of Compliance (ICC),
19

so the actual cost shares do not equal the percentages listed above. For example, although SRL grants have a 100 percent Federal cost share, the actual average Federal share was 94 percent.

18
Duplication of Benefits refers to assistance from more than one source that is used for the same mitigation purpose or activity. The purpose may apply to the whole project or only part of it. HMA funds cannot duplicate funds received by or available to applicants or subapplicants from other sources for the same purpose. Examples of other sources include insurance claims, other assistance programs (including previous project or planning grants and subawards from HMA programs), legal awards, or other benefits associated with properties or damage that are the subject of litigation. HMA does not require that property owners seek assistance from other sources (except for insurance claims). However, it is the responsibility of the property owner to report other benefits received, any applications for other assistance, the availability of insurance proceeds, or the potential for other compensation, such as from pending legal claims for damages, relating to the property. References: Sec. 312 of the Stafford Act; 44 CFR 79.6(d)(7); Hazard Mitigation Assistance Guidance (February 27, 2015), Part III, D.5, pages 31-32; HMA Tool for Identifying Duplication of Benefits
https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf
(last accessed Feb 9, 2021).

19
Increased Cost of Compliance (ICC) provides up to $30,000 to help cover the cost of mitigation measures that will reduce flood risk. ICC coverage is a part of most standard flood insurance policies available under the NFIP
https://www.fema.gov/media-library/assets/documents/1130
(last accessed Feb 9, 2021).

Changing Cost Share Amounts and to a Fully Competitive Grant Process for FMA.

Changing the cost shares had a distributional impact, where the proportion of Federal funds increased while the recipients' proportion decreased by the same amount.

Similarly, the shift from State allocations of grant funding to a competitive-based program that allows grants to be allocated to the most vulnerable properties, resulted in distributional impacts where recipients in certain States receive more in grant funding where others see a decrease. FEMA was not able to isolate this effect from the effect of changing the cost shares, since they were implemented at the same time.

First, FEMA analyzed the shift in grant priorities as a distributional impact between grant programs. This was done by subtracting the total value of grants pre-BW-12 from the total value of grants post-BW-12 for each program, showing the relative decreases and increases by type of FMA grant caused by making the grants competitive and shifting funding to riskier properties.
20

20
These figures include a large increase in grant funding post-BW-12 for the 3 programs resulting from Congressional appropriations that are not due to changes in from this rule. This increase in overall funding is not “held constant” in the comparisons shown. From 2006-2012, total funding was $292.4 million and from 2013-2019, total funding was $829.5 million.

• The seven-year total share of standard mitigation grants decreased by $226,989,994 post-BW-12 ($60,036,266−$287,026,260).

• The seven-year total share of RL grants increased by $116,958,614 post-BW-12 ($121,467,328−$4,508,714).

• The seven-year total share of SRL grants increased by $647,138,779 post-BW-12 ($647,977,892−$839,113).

This shows the total seven-year relative increases and decreases between FMA programs in terms of post-BW-12 grant funding: (−$226,989,994 for standard grants + $116,958,614 for SL grants + $647,138,779 SRL grants = $537,107,399).

Table 6 shows changes in the total number of grants as well as the Federal and non-Federal shares for all grants pre-BW-12 and post-BW-12 with the percent change in grants and funding.

Table 6—Change in Average Annual Number of Grants and Funding Pre-BW-12 to Post-BW-12
[2019$]

Pre-BW-12

Percent
pre-BW-12

Post-BW-12

Percent
post-BW-12

Percent
change

Standard Mitigation

Grants per Year
54
97.2
19
21.3
−75.9

Funding per year
$41,003,751
98.2
$8,576,609
7.2
−90.9

Repetitive Loss

Grants per Year
0.71
1.3
8
9
+7.7

Funding per year
$644,102
1.5
$17,352,475
14.6
+13.1

Severe Repetitive Loss

Grants per Year
0.86
1.5
62
69.7
+68.2

Funding per year
$119,873
0.3
$92,568,270
78.1
+77.8

When comparing pre-BW-12 standard mitigation grants to post-BW-12, the average annual total amount of funding dropped from $41 million to $8.6 million. For RL structures, the average annual amount of funding increased from $0.64 million to $17.4 million. For SRL structures, the average annual funding increased from $0.12 million to $92.6 million when compared to pre-BW-12. This reflects BW-12 shifting priority from standard mitigations to RL and SRL structures. FEMA's data indicate a trend toward both larger project sizes and an increased number of RL and SRL projects.

FEMA then analyzed the distributional impacts of the Federal cost shares that resulted from both the shift in priorities and the changes in cost shares. The Federal cost share for standard mitigation grants remained at 70 percent over the post-BW-12 period. The cost share for RL grants increased from an average of 75 percent pre-BW-12 to 87 percent post-BW-12. SRL grants had an average 92 percent cost share pre-BW-12 and a 94 percent cost share post-BW-12. FEMA also analyzed the change in the Federal cost share for the three grant categories together, which shows the impact of BW-12 changes to cost share amounts as well as shifting funding to RL and SRL grants, which have higher cost shares.

The total Federal share of all FMA grant categories pre-BW-12 was 70.4 percent [($205,762,109 ÷ $292,374,087) × 100]. Post BW-12, the Federal share was 91.5 percent [($758,759,675 ÷ $829,481,486) × 100]. The increase in transfers from FEMA to grantees as a result of the changed cost shares and changed priorities, in terms of post-BW-12 grant funding, was $174,739,761(91.5 percent −70.4 percent × $829,481,486) over seven years, or an average increase of $24,962,823 per year.

Under a no-action baseline, this rule results in no transfer impacts, as FEMA has already implemented the updated cost share percentages in the 2013 HMA Guidance. Under a pre-statutory (pre-BW-12) baseline, the revisions to the cost share and re-prioritization to grants with higher cost shares result in distributional transfer impacts shifting funding to the most vulnerable properties and an increase in transfers from FEMA to grant recipients. The discounted total seven-year transfers from FEMA to grant recipients are $174,739,761 million ($24.96 million annual average).
21

21
The annualized amounts for 3 percent and 7 percent are equal to the estimated annual transfers of $24.96 million because the amounts for each year are identical and the first year is discounted.

Mitigation Planning Grants.
BW-12 lowered the funding cap on the amount of money that could be used for the flood portion of the individual multi-hazard mitigation plans from $150,000 in recipients and $50,000 for subrecipients to $50,000 per recipient and $25,000 per subrecipient, but removed a restriction that grantees could only receive funding for planning grants once every 5 years. Lowering the cap on Federal funds results in decreased funding per applicant. However, FEMA believes this is offset

by the removal of the frequency restriction, which results in a negligible change in the number of approved applications and awards. FEMA found that the data does not show a substantial change in the number of applications, and thus FEMA assumed that the removal of the 5-year restriction is countered by the lowered cap on funding, resulting in minimal distributional impacts as shown in Table 7. Because FEMA implemented these changes concurrently, FEMA was unable to isolate the effects of individual changes.

Table 7—Mitigation Planning Grants 2006-2019
[2019$]

Year
Applications
Approved grants

Average
grant
amount

2006
167
92
$291,961

2007
561
481
88,076

2008
523
374
83,738

2009
491
346
83,738

2010
364
288
82,992

2011
417
363
104,024

2012
173
155
144,992

Average Pre-BW-12
385
300
125,646

2013
260
228
117,107

2014
293
264
89,362

2015
351
315
94,685

2016
329
287
173,348

2017
422
377
100,049

2018
287
248
151,711

2019
149
116
105,929

Average Post-BW-12
299
262
118,884

Since 2013, FEMA has applied the new caps on funding for FMA planning grants per recipient and subrecipient. The caps align with and reflect FEMA's shift to focus the majority of FMA program funds on mitigating the risk to the most vulnerable properties. FEMA is no longer constrained by any limit on how often a recipient or subrecipient can receive a planning grant or the total amount that can be granted to a recipient. Further, the lower caps per recipient and subrecipient allow FEMA to assist more recipients and subrecipients.

Alternatives

Most of the changes in this rule are based on statute. FEMA has limited discretion in determining which changes to make. The changes that carry an economic impact under a pre-statutory (pre-BW-12) baseline are the changes to 44 CFR 79.4 (now 44 CFR 77.4): FMA Grant Federal Cost Shares and 44 CFR 79.6 (now 44 CFR 77.6): Flood Portion of Multi-Hazard Mitigation Plans. BW-12 prescribed these changes. These changes are neither new nor discretionary and FEMA did not consider alternatives.

Below, the OMB A-4 Accounting Statement presents the annualized costs, benefits, and transfer payments of the final rule in 2019 dollars using the no-action baseline. Accordingly, the below accounting statement shows the costs and benefits of this rule measured against what the world would be like if this rule were not adopted.

Table 8—A-4 Accounting Statement—No Action Baseline
[2019$]

Period of analysis: 2021 to 2030
Category
7 Percent discount rate
3 Percent discount rate

Source citation
(RIA, preamble, etc.)

BENEFITS:

Annualized Monetized
$81,159
$81,159
Preamble (RA).

Annualized Quantified
N/A
N/A

Qualitative
• Allows FEMA to target most vulnerable properties and streamline mitigation grant process.
Preamble (RA).

• Modernize and standardize regulations to align current practice with other FEMA programs and increase readability.

COSTS:

Annualized Monetized
$746
$638
Preamble (RA).

Annualized quantified
N/A
N/A

Qualitative
N/A

TRANSFERS:

Annualized Monetized
0
0
Preamble (RA).

From/To
N/A.
Preamble (RA).

Category
Effects

Source citation
(RIA, preamble, etc.)

State, Local, and/or Tribal Government
• Allows State, local, and Tribal governments to prioritize more vulnerable properties and simplifies the grant process
Preamble (RA).

Small business

There were 391 small entity recipients from 2006-2019. Prior to BW-12, an average of 16 recipients per year were small entities. Post-BW-12, there was an average of 40 small entity recipients per year. Post-BW-12, small entities were more likely to receive RL or SRL grants and slightly less likely to receive standard mitigation grants, so the Federal cost shares (
i.e.,
the portion of the grant funded by FEMA) for small entities were, on average, higher post-BW-12

Preamble (FRFA).

Wages
None

Growth
None

FEMA also assessed the impacts of this rule under the pre-statutory baseline. The pre-statutory baseline is an assessment against what the world would be like if the relevant statute(s) had not been adopted, and in this case, already been implemented through guidance. FEMA estimates the impact of the changes codified in this rule to primarily be an increase in transfers from FEMA to HMA recipients of $24.96 million annualized, due to the targeting of higher risk properties for grant funding. Additionally, the changes codified by this rule shifted from State-based allocations to a competitive process, allowing FEMA to select applications according to FEMA priorities rather than by location. This rule also eliminated limits on in-kind contributions, allowing recipients more flexibility to cover their portion of the cost shares. FEMA implemented the pre-statutory provisions of this rule in the 2013 HMA Unified Guidance.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601
et seq.
) requires agency review of proposed and final rules to assess their impact on small entities. When an agency promulgates a notice of proposed rulemaking under 5 U.S.C. 553, the agency must prepare a Final Regulatory Flexibility Analysis (FRFA) unless it determines and certifies pursuant to 5 U.S.C. 605(b) that a rule, if promulgated, will not have a significant impact on a substantial number of small entities. FEMA believes this rule does not have a significant economic impact on a substantial number of small entities.

In accordance with the Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601
et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FEMA examined the effects of the adjustments made by BW-12 and implemented by FEMA in the 2013 HMA Guidance on small entities. A small entity may be: A small independent business, defined as independently owned and operated, is organized for profit, and is not dominant in its field per the Small Business Act (5 U.S.C. 632); a small organization, defined as any not-for-profit enterprise which is independently owned and operated and is not dominant in its field (5 U.S.C. 601); or a small governmental jurisdiction (locality with fewer than 50,000 people) per 5 U.S.C. 601.

The rule directly affects all eligible FMA grant recipients. FEMA estimates that the changes from BW-12 affect FMA grant recipients that are small governmental jurisdictions with a population of less than 50,000, as defined at 5 U.S.C. 601(5).
22

To estimate the effects on small entities of the adjustments made by BW-12, and codified in this rule, FEMA used the same methodology used in the regulatory analysis.
23

In general, FEMA identified the affected population—recipients of FEMA's FMA grants—and analyzed how the changes affect those recipients. Using those results, FEMA then evaluated which recipients qualified as “small entities.” Eligible FMA grant recipients may include States, U.S. territories, and Indian Tribal governments; subrecipients may include local governments and governmental organizations such as flood, sewer, and water districts. FEMA removed from its RFA dataset and analysis any recipients that are States and U.S. territories because they have populations greater than 50,000. FEMA also removed any Indian Tribal governments because they are not included in the definition of a small entity.
24

The remaining recipients

were either local governments or governmental organizations. FEMA used the U.S. Census Bureau's annual population estimates for 2019 produced by its Population Estimates Program (PEP)
25

to determine the population for each recipient.
26

Table 9 summarizes the number of small entities affected by the changes in BW-12.

18

See
5 U.S.C. 601(3)-(6). In general, the term “small entity” can have the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction” for purposes of this analysis. Specifically, section 601(3) defines a “small business” as having the same meaning as “small business concern” under section 3 of the Small Business Act. This includes any small business concern that is independently owned and operated that is not dominant in its field of operation. Section 601(4) defines a “small organization” as any not-for-profit enterprise that is independently owned and operated that is not dominant in its field of operation. Section 601(5) defines “small governmental jurisdiction” as governments of cities, counties, towns, townships, villages, school districts, or special districts with a population of less than 50,000. Accessed and downloaded Feb 24, 2021.
http://uscode.house.gov/view.xhtml?req=(title:5section:601edition:prelim)
OR (
granuleid:U.S.C.-prelim-title5-section601)&f=treesort&edition=prelim&num=0&jumpTo=true
.

23
FEMA's methodology is included in section IV. Regulatory Analysis of this final rule.

24
The Regulatory Flexibility Act (RFA) defines a small entity as a small business, small nonprofit organization, or a small governmental jurisdiction. Section 601(5) defines small governmental jurisdictions as governments of cities, counties, towns, townships, villages, school districts, or

special districts with a population of less than 50,000.

25
FEMA used the U.S. Census Bureau's PEP estimates file entitled, “sub-est2019_all.csv” because it provided 2019 estimated populations for all States and all subgovernmental jurisdictions, including counties, parishes, etc., towns, cities, villages, etc. Accessed and downloaded Feb 24, 2021.
https://www2.census.gov/programs-surveys/popest/datasets/2010-2019/cities/totals/.

26
FEMA used the population of the county, parish, or borough in which the grant project was located as a proxy to determine the populations for governmental organizations. For example, FEMA used the New Castle County, DE 2019 population of 558,753 to determine if the New Castle Conservation District was a small entity. In this example, the population of 558,753 is greater than the 50,000 small entity threshold; thus, the new Castle Conservation District is not a small entity.

Table 9—Estimated Number of Small Entities Affected by This Rule

Year

Grants to
small entities

Properties
within grants

Pre-BW-12
2006
30
67

2007
25
39

2008
16
14

2009
18
41

2010
11
76

2011
4
12

2012
8
75

Post-BW-12
2013
23
64

2014
27
66

2015
18
71

2016
25
56

2017
26
78

2018
122
82

2019
38
25

Total Small Entity Recipients

391
766

Total All Recipients

1,551
4,521

Small Entity Recipients as a Percent of Total Recipients

25.2%
17.0%

Pre-BW-12
Total
112
324

Annual Average
16
46

Post-BW-12
Total
279
442

Annual Average
40
63

Between 2006 and 2019, FEMA awarded a total of 1,551 FMA grants to mitigate flood risk to 4,521 properties. Of the total 1,551 recipients, 391 recipients, or 25.2 percent, had populations under 50,000 and are considered small entities. These small entities used the FMA grants to mitigate flood risk to 766 vulnerable properties. These 391 small entity recipients are all local governments.

Pre-BW-12, FEMA awarded 112 grants to small entities. Of these, 109 were for standard mitigation with an average Federal cost share of 73 percent, 2 were RL with an average Federal cost share of 82 percent, and 1 was SRL with a cost share of 90 percent.

Table 10—Pre-BW-12 Projects and Value by Grant Category (2019$) Awarded to Small Entities

Year

Standard
(≤75% Federal cost share)

Grants

Value of
grants

Federal share
obligated

Repetitive loss (RL)
(75% Federal Cost Share)

Grants

Value of
grants

Federal share
obligated

Severe repetitive loss (SRL)
(90%-100% Federal Cost Share)

Grants
Value of grants

Federal share
obligated

2006
30
$6,014,828
$4,467,682

2007
25
11,015,869
7,786,046

2008
16
2,189,233
1,603,820

2009
15
8,068,507
5,868,226
2
$2,393,363
$1,952,676
1
$59,465
$53,518

2010
11
15,403,139
11,551,457

2011
4
2,950,334
2,079,950

2012
8
6,509,829
4,876,130

Total
109
52,151,739
38,233,311
2
2,393,363
1,952,676
1
59,465
53,518

Post-BW-12, FEMA awarded 279 grants to small entities. Of these, 40 were standard mitigation with an average Federal cost share of 69 percent, 3 were RL with an average Federal cost share of 88 percent, and 76 were SRL with an average Federal cost share of 90 percent. While the cost shares did not change significantly, more applicants received SRL grants when compared to the pre-BW-12 period. This shows the

prioritization of more vulnerable properties.

Table 11—Post-BW-12 Projects and Value by Grant Category (2019$) Awarded to Small Entities

Year

Standard
(≤75% Federal cost share)

Grants

Value of
grants

Federal share
obligated

Repetitive loss (RL)
(75%-90% Federal cost share)

Grants

Value of
grants

Federal share
obligated

Severe repetitive loss (SRL)
(100% Federal cost share)

Grants

Value of
grants

Federal share
obligated

2013
8
$972,391
$435,490
1
$7,274,609
$6,452,685
14
$5,720,524
$3,778,669

2014
11
2,575,473
1,623,207

16
12,558,967
12,235,583

2015
3
2,478,165
1,858,623

15
10,676,146
10,007,363

2016
6
290,884
197,705
2
1,798,791
1,556,119
17
10,678,636
9,299,774

2017
12
5,191,261
3,881,929

14
9,198,557
8,627,638

2018
41
1,703,802
1,109,366
3
2,014,308
1,764,641
78
16,081,572
14,090,559

2019
13
648,276
422,100
1
415,348
363,867
24
3,749,428
3,285,222

Total
94
13,860,253
9,528,420
7
11,503,056
10,137,312
178
68,663,830
61,324,808

This rule codifies legislative requirements included in the Biggert-Waters Flood Insurance Reform Act of 2012, Public Law 112-141, 126 Stat. 916 (BW-12), which amended the National Flood Insurance Act of 1968 (NFIA) and required changes to all major components of the National Flood Insurance Program (NFIP), including mitigation grants authorized under the NFIA. FEMA implemented the legislative requirements in BW-12 through policy/guidance in 2013 and is now codifying these changes in regulation, to reflect current agency practice, and to clarify existing regulations. Pursuant to 5 U.S.C. 605(b), FEMA certifies that this regulation will not have a significant economic impact on a substantial number of small entities.

C. Unfunded Mandates Reform Act of 1995

Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on state, local, and Tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and Tribal governments and the private sector. This rule does not result in such an expenditure, and thus preparation of such a statement is not required.

D. National Environmental Policy Act of 1969 (NEPA)

Section 102 of the National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321
et seq.
) requires Federal agencies to consider the impacts of their proposed actions on the quality of the human environment. Each agency can develop categorical exclusions (catexes) to cover actions that have been demonstrated to not typically trigger significant impacts to the human environment individually or cumulatively. If an action does not qualify for a catex and has the potential to significantly affect the environment, agencies develop environmental assessments (EAs) to evaluate those actions. The Council on Environmental Quality's (CEQ) procedures for implementing NEPA, 40 CFR parts 1500 through 1508, require Federal agencies to prepare Environmental Impact Statements (EISs) for major Federal actions significantly affecting the quality of the human environment. At the end of the EA process, the agency will determine whether to make a Finding of No Significant Impact (FONSI) or whether to initiate the EIS process.

Under the National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. 4321
et seq.
an agency must prepare an Environmental Assessment (EA) and Environmental Impact Statement (EIS) for any rulemaking that significantly affects the quality of the human environment. FEMA has determined that this rulemaking does not significantly affect the quality of the human environment and consequently has not prepared an EA or EIS.

Catex A3 included in the list of exclusion categories at Department of Homeland Security Instruction Manual 023-01-001-01, Revision 01, Implementation of the National Environmental Policy Act, Appendix A, issued November 6, 2014, covers the promulgation of rules, issuance of rulings or interpretations, and the development and publication of policies, orders, directives, notices, procedures, manuals, and advisory circulars if they meet certain criteria provided in A3(a-f). This rule meets the criteria in A3(a), (b), (c), and (d). The rule makes a number of regulatory revisions that are strictly administrative. In addition, the rule amends an existing regulation without changing its environmental effect, and also implements, without substantive change, statutory requirements and guidance documents. Because no extraordinary circumstances have been identified, this rule does not require the preparation of either an EA or an EIS as defined by NEPA.
See
Department of Homeland Security Instruction Manual 023-01-001-01, Revision 01, Implementation of the National Environmental Policy Act, section (V)(B)(2).

E. Endangered Species Act

The Endangered Species Act (ESA) mandates that Federal agencies determine whether their proposed actions may affect listed species and/or their designated critical habitat (critical habitat has been designated for some, but not all listed species). Without authorization or exemption from Federal resource agencies, it is unlawful for any person, whether government employee or private citizen, to take listed animal species.

To comply with Section 7(a)(2) of the ESA, for every action that FEMA proposes to carry out, fund, or authorize, FEMA must first determine if species and habitat are present in the action area. If species are present in the

action area, then FEMA must make one of the following determinations with respect to the effect of the proposed action on listed species and critical habitat: (1) No effect (NE); 2) may affect, but is not likely to adversely affect (NLAA); or 3) may affect and is likely to adversely affect (LAA).

This rule has been evaluated by FEMA and due to the administrative nature, FEMA has determined the rule does not have the potential to affect federally-listed species or designated critical habitat. As such, a “No Effect” determination has been made for these activities. Per the ESA regulations, notification to, and consultation with, the U.S. Fish and Wildlife Service and/or the National Marine Fisheries Service are not required for activities with a “No Effect” determination.

F. National Historic Preservation Act of 1966

The National Historic Preservation Act (NHPA) (54 U.S.C. 300101, formerly 16 U.S.C. 470) was enacted in 1966, with various amendments throughout the years. Section 106 of the NHPA (54 U.S.C. 306108) requires Federal agencies to take into account the effect of their actions on any historic property. It mandates a consultation process in the early stages of project planning and must be completed prior to the approval of expenditure of any Federal funds for the undertaking. Subpart B of 36 CFR part 800 lays out a four-step Section 106 process to fulfill this obligation: (1) Initiate the process (800.3); (2) identify historic properties (800.4); (3) assess adverse effects (800.5); and (4) resolve adverse effects (800.6).

Pursuant to section 106 of the NHPA and its implementing regulations at 36 CFR part 800, FEMA has determined that this rule does not have the potential to cause effects to historic properties and in accordance with 36 CFR part 800.3(a)(1), FEMA has no further obligations under section 106.

G. Paperwork Reduction Act of 1995

Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the agency obtains approval from the Office of Management and Budget (OMB) for the collection and the collection displays a valid OMB control number.
See
44 U.S.C. 3506, 3507. This rule contains collections of information that are subject to review by OMB. The information collections included in this rule are approved by OMB under control numbers 1660-0072 (Flood Mitigation Assistance (eGrants) and Grant Supplement Information), 1660-0062 (State/Local/Tribal Hazard Mitigation Plans), 1660-0026 (State Administrative Plan for the Hazard Mitigation Grant Program), and 1660-0076 (Hazard Mitigation Grant Program Application and Reporting). Currently, FEMA is working to reinstate 1660-0103 (Property Acquisition and Relocation for Open Space).

This rulemaking calls for no new collections of information under the PRA. This rule includes information currently collected by FEMA and approved in OMB information collections 1660-0072, 1660-0062, 1660-0026, and 1660-0076. Currently, FEMA is working to reinstate 1660-0103. The actions of this rulemaking do not impose any additional burden to this collection of information. The changes in this rulemaking do not change the forms, the substance of the forms, or the number of recipients who would submit the forms to FEMA.

H. Privacy Act/E-Government Act

Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must determine whether implementation of a proposed regulation will result in a system of records. A record is any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his/her education, financial transactions, medical history, and criminal or employment history and that contains his/her name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.
See
5 U.S.C. 552a(a)(4). A system of records is a group of records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. An agency cannot disclose any record which is contained in a system of records except by following specific procedures.

The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires specific procedures when an agency takes action to develop or procure information technology that collects, maintains, or disseminates information that is in an identifiable form. This Act also applies when an agency initiates a new collection of information that will be collected, maintained, or disseminated using information technology if it includes any information in an identifiable form permitting the physical or online contacting of a specific individual. A Privacy Threshold Analysis was completed.

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

Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, 65 FR 67249, November 9, 2000, applies to agency regulations that have Tribal implications, that is, regulations that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Under this Executive Order, to the extent practicable and permitted by law, no agency shall promulgate any regulation that has Tribal implications, that imposes substantial direct compliance costs on Indian Tribal governments, and that is not required by statute, unless funds necessary to pay the direct costs incurred by the Indian Tribal government or the Tribe in complying with the regulation are provided by the Federal Government, or the agency consults with Tribal officials.

Although Indian Tribal governments are potentially eligible applicants under HMA programs, FEMA has determined that this rule does not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. There is no substantial direct compliance cost associated with this rule. The HMA programs are voluntary programs that provide funding to applicants, including Tribal governments, for eligible mitigation planning and projects that reduce disaster losses and protect life and property from future disaster damages. An Indian Tribal government may participate as either an applicant/recipient or a subapplicant/subrecipient. FEMA does not expect the regulatory changes in this rule to disproportionately affect Indian Tribal governments acting as recipients.

J. Executive Order 13132, Federalism

Executive Order 13132, Federalism, 64 FR 43255, August 10, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Federal agencies must closely examine the

statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action.

FEMA has reviewed this rule under Executive Order 13132 and has determined that this rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore does not have federalism implications as defined by the Executive Order. FEMA has determined that this rule does not significantly affect the rights, roles, and responsibilities of States, and involves no preemption of State law nor does it limit State policymaking discretion. This rulemaking amends regulations governing voluntary grant programs that may be used by State, local and Tribal governments to fund eligible mitigation activities that reduce disaster losses and protect life and property from future disaster damages. States are not required to seek grant funding, and this rulemaking does not limit their policymaking discretion.

K. Executive Order 11988, Floodplain Management

Pursuant to Executive Order 11988, each Federal agency is required to provide leadership and take action to reduce the risk of flood loss, to minimize the impact of floods on human safety, health and welfare, and to restore and preserve the natural and beneficial values served by floodplains in carrying out its responsibilities for (1) acquiring, managing, and disposing of Federal lands and facilities; (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. In carrying out these responsibilities, each agency must evaluate the potential effects of any actions it may take in a floodplain; to ensure that its planning programs and budget requests reflect consideration of flood hazards and floodplain management; and to prescribe procedures to implement the policies and requirements of the Executive Order.

Before promulgating any regulation, an agency must determine whether the regulation will affect a floodplain(s), and if so, the agency must consider alternatives to avoid adverse effects and incompatible development in the floodplain(s). If the head of the agency finds that the only practicable alternative consistent with the law and with the policy set forth in Executive Order 11988 is to promulgate a regulation that affects a floodplain(s), the agency must, prior to promulgating the regulation, design or modify the regulation in order to minimize potential harm to or within the floodplain, consistent with the agency's floodplain management regulations and prepare and circulate a notice containing an explanation of why the action is located in the floodplain. The purpose of the rule is to update FEMA's HMA program regulations to reflect statutory changes that have already been implemented. While the rule revises the regulations for FMA administered by the NFIP, it would not impact other NFIA regulations that pertain to land use, floodplain management, or flood insurance. The majority of the revisions in this rulemaking apply to the regulations for the FMA program, which is a voluntary grant program that provides funding for activities designed to reduce the risk of flood damage to structures insured under the NFIP. When FEMA undertakes specific actions that may have effects on floodplain management, FEMA follows the procedures set forth in 44 CFR part 9 to assure compliance with this Executive Order. These procedures include a specific, 8-step process for conducting floodplain management and wetland reviews. The rule does not change this process.

L. Executive Order 11990, Protection of Wetlands

Pursuant to Executive Order 11990, each Federal agency must provide leadership and take action to minimize the destruction, loss or degradation of wetlands, and to preserve and enhance the natural and beneficial values of wetlands in carrying out the agency's responsibilities for (1) acquiring, managing, and disposing of Federal lands and facilities; and (2) providing Federally undertaken, financed, or assisted construction and improvements; and (3) conducting Federal activities and programs affecting land use, including but not limited to water and related land resources planning, regulating, and licensing activities. Each agency, to the extent permitted by law, must avoid undertaking or providing assistance for new construction located in wetlands unless the head of the agency finds (1) that there is no practicable alternative to such construction, and (2) that the proposed action includes all practicable measures to minimize harm to wetlands which may result from such use. In making this finding the head of the agency may take into account economic, environmental and other pertinent factors.

In carrying out the activities described in the Executive Order, each agency must consider factors relevant to a proposal's effect on the survival and quality of the wetlands. Among these factors are: Public health, safety, and welfare, including water supply, quality, recharge and discharge; pollution; flood and storm hazards; and sediment and erosion; maintenance of natural systems, including conservation and long-term productivity of existing flora and fauna, species and habitat diversity and stability, hydrologic utility, fish, wildlife, timber, and food and fiber resources; and other uses of wetlands in the public interest, including recreational, scientific, and cultural uses.

The requirements of Executive Order 11990 apply in the context of the provision of Federal financial assistance relating to, among other things, construction and property improvement activities. However, this rule would not have an effect on land use or wetlands. The purpose of the rule is to update FEMA's HMA program regulations to reflect statutory changes that have already been implemented. While the rule revises the regulations for FMA administered by the NFIP, it does not impact other NFIP regulations that pertain to land use, floodplain management, or flood insurance. The majority of the revisions in this rulemaking apply to the regulations for the FMA program, which is a voluntary grant program that provides funding for activities designed to reduce the risk of flood damage to structures insured under the NFIP. When FEMA undertakes specific actions that may have effects on wetlands, FEMA follows the procedures set forth in 44 CFR part 9 to assure compliance with this Executive Order. These procedures include a specific, 8-step process for conducting floodplain management and wetland reviews. The rule would not change this process.

M. Executive Order 12898, Environmental Justice

Pursuant to Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994, as amended by Executive Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates environmental justice into its policies and programs.

The Executive Order requires each Federal agency to conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures that those programs, policies, and activities do not have the effect of excluding persons from participation in programs, denying persons the benefits of programs, or subjecting persons to discrimination because of race, color, or national origin. This rulemaking will not have a disproportionately high or adverse effect on human health or the environment.

N. Congressional Review of Agency Rulemaking

Under the Congressional Review of Agency Rulemaking Act (CRA), 5 U.S.C. 801-808, before a rule can take effect, the Federal agency promulgating the rule must submit to Congress and to the Government Accountability Office (GAO) a copy of the rule, a concise general statement relating to the rule, including whether it is a major rule, the proposed effective date of the rule, a copy of any cost-benefit analysis, descriptions of the agency's actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act, and any other information or statements required by relevant executive orders.

FEMA has sent this rule to the Congress and to GAO pursuant to the CRA. The rule is not a major rule within the meaning of the CRA. It will not have an annual effect on the economy of $100,000,000 or more, it will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions, and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

List of Subjects

44 CFR Part 77
Flood insurance, Grant programs.

44 CFR Parts 78 and 79
Flood insurance, Grant programs.

44 CFR Part 80
Disaster assistance, Grant programs.

44 CFR Part 201
Administrative practice and procedure, Disaster assistance, Grant programs, Reporting and recordkeeping requirements.

44 CFR Part 206
Administrative practice and procedure, Coastal zone, Community facilities, Disaster assistance, Fire prevention, Grant programs-housing and community development, Housing, Insurance, Intergovernmental relations, Loan programs-housing and community development, Natural resources, Penalties, and Reporting and recordkeeping requirements.

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

PART 78—[REMOVED AND RESERVED]

2. Under the authority of 6 U.S.C. 101
et seq.;
42 U.S.C. 4001
et seq.;
42 U.S.C. 4104c, 4104d, remove and reserve part 78.

PART 79—[REDESIGNATED]

2. Redesignate part 79 as part 77:

3. Revise newly redesignated part 77 to read as follows:

PART 77—FLOOD MITIGATION GRANTS

Sec.
77.1
Purpose and applicability.
77.2
Definitions.
77.3
Responsibilities.
77.4
Availability of funding.
77.5
Application process.
77.6
Eligibility.
77.7
Allowable costs.
77.8
Grant administration.

Authority:

6 U.S.C. 101
et seq.;
42 U.S.C. 4001
et seq.;
42 U.S.C. 4104c, 4104d.

§ 77.1
Purpose and applicability.

(a) The purpose of this part is to prescribe actions, procedures, and requirements for administration of the Flood Mitigation Assistance (FMA) grant program made available under the National Flood Insurance Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, as amended, 42 U.S.C. 4001
et seq.
The purpose of the FMA program is to assist States, Indian Tribal governments, and communities for planning and carrying out mitigation activities designed to reduce the risk of flood damage to structures insured under the National Flood Insurance Program (NFIP).

(b) This part applies to the administration of funds under the FMA program for which the application period opens on or after October 12, 2021.

§ 77.2
Definitions.
(a) Except as otherwise provided in this part, the definitions set forth in § 59.1 of this subchapter are applicable to this part.

(b)
Applicant
means the entity, such as a State or Indian Tribal government, applying to FEMA for a Federal award under the FMA program. Once funds have been awarded, the applicant becomes the recipient and may also be a pass-through entity.

(c)
Closeout
means the process by which FEMA or the pass-through entity determines that all applicable administrative actions and all required work of the Federal award have been completed and takes actions as described in 2 CFR 200.344, “Closeout.”

(d)
Community
means:

(1) A political subdivision, including any Indian Tribe, authorized Tribal organization, Alaska Native village or authorized native organization, that has zoning and building code jurisdiction over a particular area having special flood hazards, and is participating in the NFIP; or

(2) A political subdivision of a State or other authority that is designated by political subdivisions, all of which meet the requirements of paragraph (d)(1) of this section, to administer grants for mitigation activities for such political subdivisions.

(e)
Federal award
means the Federal financial assistance a recipient or subrecipient receives directly from FEMA or indirectly from a pass-through entity. The terms “award” and “grant” may also be used to describe a Federal award under this part.

(f)
Indian Tribal government
means any Federally recognized governing body of an Indian or Alaska Native Tribe, band, nation, pueblo, village, or community that the Secretary of Interior acknowledges to exist as an Indian Tribe under the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 5131. This does not include Alaska Native corporations, the ownership of which is vested in private individuals.

(g)
Pass-through entity
means a recipient that provides a subaward to a subrecipient to carry out part of the FMA program.

(h)
Recipient
means the State or Indian Tribal government that receives a Federal award directly from FEMA. A recipient may also be a pass-through entity. The term recipient does not include subrecipients.

(i)
Repetitive loss structure
means a structure covered under an NFIP flood insurance policy that:

(1) Has incurred flood-related damage on 2 occasions, in which the cost of repair, on average, equaled or exceeded 25% of the value of the structure at the time of each such flood event; and

(2) At the time of the second incidence of flood related damage, the contract for flood insurance contains increased cost of compliance coverage.

(j)
Severe repetitive loss structure
means a structure that is covered under an NFIP flood insurance policy and has incurred flood-related damage:

(1) For which 4 or more separate claims payments have been made under flood insurance coverage under subchapter B of this chapter, with the amount of each claim (including building and contents payments) exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000; or

(2) For which at least 2 separate flood insurance claims payments (building payments only) have been made, with cumulative amount of such claims exceeding the value of the insured structure.

(k)
State
means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

(l)
Subaward
means an award provided by a pass-through entity to a subrecipient, for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.

(m)
Subapplicant
means a State agency, community, or Indian Tribal government submitting a subapplication to the applicant for assistance under the FMA program. Upon grant award, the subapplicant is referred to as the subrecipient.

(n)
Subrecipient
means the State agency, community, or Indian Tribal government that receives a subaward from a pass-through entity for the subrecipient to carry out an activity under the FMA program.

(o)
Administrator
means the head of the Federal Emergency Management Agency, or his/her designated representative.

(p)
Regional Administrator
means the head of a Federal Emergency Management Agency regional office, or his/her designated representative.

§ 77.3
Responsibilities.

(a)
Federal Emergency Management Agency (FEMA).
Administer and provide oversight to all FEMA-related hazard mitigation programs and grants, including:

(1) Issue program implementation procedures, as necessary, which will include information on availability of funding;

(2) Award all grants to the recipient after evaluating subaward applications for eligibility and ensuring compliance with applicable Federal laws, giving priority to such properties, or to the subset of such properties, as the Administrator may determine are in the best interest of the NFIF;

(3) Provide technical assistance and training to State, local and Indian Tribal governments regarding the mitigation and grants management process;

(4) Review and approve State, Indian Tribal, and local mitigation plans in accordance with part 201 of this chapter;

(5) Comply with applicable Federal statutory, regulatory, and Executive Order requirements related to environmental and historic preservation compliance, including reviewing and supplementing, if necessary, the environmental analyses conducted by the State and subrecipient in accordance with applicable laws, regulations, and agency policy;

(6) Monitor implementation of awards through quarterly reports; and

(7) Review all closeout documentation for compliance and sending the recipient a request for additional supporting documentation, if needed.

(b)
Recipient.
The recipient must have working knowledge of NFIP goals, requirements, and processes and ensure that the program is coordinated with other mitigation activities. Recipients will:

(1) Have a FEMA approved Mitigation Plan in accordance with part 201 of this chapter;

(2) Provide technical assistance and training to communities on mitigation planning, mitigation project activities, developing subaward applications, and implementing approved subawards;

(3) Prioritize and recommend subaward applications to be approved by FEMA, based on the applicable mitigation plan(s), other evaluation criteria, and the eligibility criteria described in § 77.6;

(4) Award FEMA-approved subawards;

(5) Monitor and evaluate the progress of the mitigation activity in accordance with the approved original scope of work and budget through quarterly reports;

(6) Closeout the subaward in accordance with 2 CFR 200.344 and 200.345, and applicable FEMA guidance; and

(7) Comply with program requirements under this part, grant management requirements identified under 2 CFR parts 200 and 3002, the grant agreement articles, and other applicable Federal, State, Tribal and local laws and regulations.

(c)
Subrecipient.
The subrecipient (or subapplicant, as applicable) will:

(1) Complete and submit subaward applications to the recipient for FMA planning and project subawards;

(2) Implement all approved subawards;

(3) Monitor and evaluate the progress of the mitigation activity in accordance with the approved original scope of work and budget through quarterly reports;

(4) Comply with program requirements under this part, grant management requirements identified under 2 CFR parts 200 and 3002, the grant agreement articles, and other applicable Federal, State, Tribal and local laws and regulations; and

(5) Closeout the subaward in accordance with 2 CFR 200.344 and 200.345, and applicable FEMA guidance.

§ 77.4
Availability of funding.

(a)
Allocation.
(1) For the amount made available for the FMA program, the Administrator will allocate the available funds based upon criteria established for each application period. The criteria may include the number of NFIP policies, severe repetitive loss structures, repetitive loss structures, and any other factors the Administrator determines are in the best interests of the NFIF.

(2) The amount of FMA funds used may not exceed $50,000 for any mitigation plan of a State or $25,000 for any mitigation plan of a community.

(b)
Cost share.
All mitigation activities approved under the grant will be subject to the following cost share provisions:

(1) For each severe repetitive loss structure, FEMA may contribute either:

(i) Up to 100 percent of all eligible costs if the activities are technically feasible and cost effective; or

(ii) Up to the amount of the expected savings to the NFIP for acquisition or relocation activities;

(2) For repetitive loss structures, FEMA may contribute up to 90 percent of the eligible costs;

(3) For all other mitigation activities, FEMA may contribute up to 75 percent of all eligible costs.

(4) For projects that contain a combination of severe repetitive loss, repetitive loss, and/or other insured structures, the cost share will be calculated as appropriate for each type of structure submitted in the project subapplication.

(c)
Failure to make award within 5 years.
Any FMA application or subapplication that does not receive a Federal award within 5 years of the application/subapplication submission date is considered to be denied, and any funding amounts allocated for such applications/subapplications will be made available for other FMA awards and subawards.

§ 77.5
Application process.

(a)
Applicant.
(1) Applicants will be notified of the availability of funding for the FMA program pursuant to 2 CFR 200.203 and 200.204.

(2) The applicant is responsible for soliciting applications from eligible communities, or subapplicants, and for reviewing and prioritizing applications prior to forwarding them to FEMA for review and award.

(b)
Subapplicant.
Communities or other subapplicants who choose to apply must develop subapplications within the timeframes and requirements established by FEMA and must submit subapplications to the applicant.

§ 77.6
Eligibility.

(a)
NFIP requirements.
(1) States, Indian Tribal governments, and communities must be participating in the NFIP and may not be suspended or withdrawn under the program.

(2) For projects that impact individual structures, for example, acquisitions and elevations, an NFIP policy for the structure must be in effect prior to the opening of the application period and be maintained for the life of the structure.

(b)
Plan requirement
—(1)
Applicants.
States must have a FEMA-approved mitigation plan meeting the requirements of § 201.4 of this chapter that provides for reduction of flood losses to structures for which NFIP coverage is available. Indian Tribal governments must have a FEMA-approved mitigation plan meeting the requirements of § 201.7 of this chapter that provides for reduction of flood losses to structures for which NFIP coverage is available. The FEMA-approved mitigation plan is required at the time of application and award.

(2)
Subapplicants.
To be eligible for FMA project grants, subapplicants must have an approved mitigation plan in accordance with part 201 of this chapter that provides for reduction of flood losses to structures for which NFIP coverage is available. The FEMA-approved mitigation plan is required at the time of application and award.

(c)
Eligible activities
—(1)
Planning.
FMA planning grants may be used to develop or update State, Indian Tribal and/or local mitigation plans that meet the planning criteria outlined in part 201 of this chapter and provide for reduction of flood losses to structures for which NFIP coverage is available.

(2)
Projects.
Projects funded under the FMA program are limited to activities that reduce flood damages to properties insured under the NFIP. Applications involving any activities for which implementation has already been initiated or completed are not eligible for funding, and will not be considered. Eligible activities are:

(i) Acquisition of real property from property owners, and demolition or relocation of buildings and/or structures to areas outside of the floodplain to convert the property to open space use in perpetuity, in accordance with part 80 of this subchapter;

(ii) Elevation of existing structures to at least base flood levels or higher, if required by FEMA or if required by any State or local ordinance, and in accordance with criteria established by the Administrator;

(iii) Floodproofing of existing non-residential structures in accordance with the requirements of the NFIP or higher standards if required by FEMA or if required by any State or local ordinance, and in accordance with criteria established by the Administrator;

(iv) Floodproofing of historic structures as defined in § 59.1 of this subchapter;

(v) Demolition and rebuilding of properties to at least base flood levels or higher, if required by FEMA or if required by any State or local ordinance, and in accordance with criteria established by the Administrator;

(vi) Localized flood risk reduction projects that lessen the frequency or severity of flooding and decrease predicted flood damages, and that do not duplicate the flood prevention activities of other Federal agencies. Non-localized flood risk reduction projects such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-scale waterway channelization projects are not eligible unless the Administrator specifically determines in approving a mitigation plan that such activities are the most cost-effective mitigation activities for the National Flood Mitigation Fund;

(vii) Elevation, relocation, or floodproofing of utilities; and

(viii) Other mitigation activities not described or identified in (c)(2)(i) through (vii) of this section that are described in the State, Tribal or local mitigation plan.

(3)
Technical assistance.
If a recipient applied for and was awarded at least $1 million in the prior fiscal year, that recipient may be eligible to receive a technical assistance grant for up to $50,000.

(4)
Project Scoping.
Activities that enable subapplicants to develop complete subapplications for eligible mitigation activities including but not limited to data development.

(d)
Minimum project criteria.
In addition to being an eligible project type, mitigation grant projects must also:

(1) Be in conformance with State, Tribal and/or local mitigation plans approved under part 201 of this chapter for the jurisdiction where the project is located;

(2) Be in conformance with applicable environmental and historic preservation laws, regulations, and agency policy, including parts 9 and 60 of this chapter, and other applicable Federal, State, Tribal, and local laws and regulations;

(3) Be technically feasible and cost-effective; or, eliminate future payments from the NFIF for severe repetitive loss structures through an acquisition or relocation activity;

(4) Solve a problem independently, or constitute a functional portion of a long-term solution where there is assurance that the project as a whole will be completed. This assurance will include documentation identifying the remaining funds necessary to complete the project, and the timeframe for completing the project;

(5) Consider long-term changes to the areas and entities it protects, and have manageable future maintenance and modification requirements. The subrecipient is responsible for the continued maintenance needed to preserve the hazard mitigation benefits of these measures; and

(6) Not duplicate benefits available from another source for the same purpose or assistance that another Federal agency or program has more primary authority to provide.

§ 77.7
Allowable costs.

(a)
General.
General policies for allowable costs for implementing awards and subawards are addressed in 2 CFR 200.101, 200.102, 200.400-200.476.

(1)
Eligible management costs
—(i)
Recipient.
Recipients are eligible to receive management costs (direct and indirect administrative costs pursuant to 2 CFR part 200 Subpart E) consisting of a maximum of 10 percent of the planning and project activities awarded to the recipient, each fiscal year under FMA. These costs must be included in the application to FEMA.

(ii)
Subrecipient.
Subapplicants may include a maximum of 5 percent of the total funds requested for their subapplication for management costs to support the implementation of their planning or project activity. These costs must be included in the subapplication to the recipient.

(2)
Indirect costs.
Indirect costs of administering the FMA program are eligible as part of the 10 percent management costs for the recipient or the 5 percent management costs of the subrecipient, but in no case do they make the recipient eligible for additional management costs that exceed the caps identified in paragraph (a)(1) of this section. In addition, all costs must be in accordance with the provisions of 2 CFR parts 200 and 3002.

(b)
Pre-award costs.
FEMA may fund eligible pre-award costs related to developing the application or subapplication at its discretion and as funds are available. Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project or planning proposal. Costs associated with implementation of the activity but incurred prior to award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed.

(c)
Duplication of benefits.
Grant funds may not duplicate benefits received by or available to applicants, subapplicants and project participants from insurance, other assistance programs, legal awards, or any other source to address the same purpose. Such individual or entity must notify the recipient and FEMA of all benefits that it receives or anticipates from other sources for the same purpose. FEMA will reduce the subaward by the amounts available for the same purpose from another source.

(d)
Negligence or other tortious conduct.
FEMA grant funds are not available where an applicant, subapplicant, other project participant, or third party's negligence or intentional actions contributed to the conditions to be mitigated. If the applicant, subapplicant, or project participant suspects negligence or other tortious conduct by a third party for causing such condition, they are responsible for taking all reasonable steps to recover all costs attributable to the tortious conduct of the third party. FEMA generally considers such amounts to be duplicated benefits available for the same purpose, and will treat them consistent with paragraph (c) of this section.

(e)
Legal obligations.
FEMA grant funds are not available to satisfy or reimburse for legal obligations, such as those imposed by a legal settlement, court order, or State law.

§ 77.8
Grant administration.

(a)
General.
Recipients must comply with the requirements contained in 2 CFR parts 200 and 3002 and FEMA award requirements, including submission of performance and financial status reports. Recipients must also ensure that subrecipients are aware of and comply with 2 CFR parts 200 and 3002.

(b)
Cost overruns.
(1) During the implementation of an approved grant, the recipient may find that actual costs are exceeding the approved award amount. While there is no guarantee of additional funding, FEMA will only consider requests made by the recipient to pay for such overruns if:

(i) Funds are available to meet the requested increase in funding; and

(ii) The amended grant award meets the eligibility requirements, including cost share requirements, identified in this section.

(2) Recipients may use cost underruns from ongoing subawards to offset overruns incurred by another subaward(s) awarded under the same award. All costs for which funding is requested must have been included in the original subapplication's cost estimate. In cases where an underrun is not available to cover an overrun, the Administrator may, with justification from the recipient and subrecipient, use other available FMA funds to cover the cost overrun.

(3) For all cost overruns that exceed the amount approved under the award, and which require additional Federal funds, the recipient must submit a written request with a recommendation, including a justification for the additional funding to the Regional Administrator for a determination. If approved, the Regional Administrator will increase the award through an amendment to the original award document.

(c)
Recapture.
At the time of closeout, FEMA will recapture any funds provided to a State or a community under this part if the applicant has not provided the appropriate matching funds, the approved project has not been completed within the timeframes specified in the grant agreement, or the completed project does not meet the criteria specified in this part.

(d)
Remedies for noncompliance.
FEMA may terminate an award or take other remedies for noncompliance in accordance with 2 CFR 200.339 through 200.343.

(e)
Reconsideration.
FEMA will reconsider determinations of noncompliance, additional award conditions, or its decision to terminate a Federal award. Requests for reconsideration must be made in writing to FEMA within 60 calendar days after receipt of a notice of the action, and in accordance with submission procedures set out in guidance. FEMA will notify the requester of the disposition of the request for reconsideration. If the decision is to grant the request for reconsideration, FEMA will take appropriate implementing action.

PART 79—[RESERVED]

4. Add and reserve part 79.

PART 80—PROPERTY ACQUISITION AND RELOCATION FOR OPEN SPACE

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

Authority:

Robert T. Stafford disaster relief and emergency assistance act, 42 U.S.C. 5121 through 5207; the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4001
et seq.;
Homeland Security Act of 2002, 6 U.S.C. 101.

6. Revise § 80.3 to read as follows:

§ 80.3
Definitions.
(a) Except as noted in this part, the definitions applicable to the funding program apply to implementation of this part. In addition, for purposes of this part:

(b)
Applicant
means a State or Indian Tribal government applying to FEMA for a Federal award that will be accountable for the use of funds. Once funds have been awarded, the applicant becomes the recipient and may also be a pass-through entity.

(c)
Federal award
means the Federal financial assistance that a recipient or subrecipient receives directly from FEMA or indirectly from a pass-through entity. The terms “award” and “grant” may also be used to describe a “Federal award” under this part.

(d)
Market Value
means the price that the seller is willing to accept and a buyer is willing to pay on the open market and in an arm's length transaction.

(e)
National of the United States
means a person within the meaning of the term as defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22).

(f)
Pass-through entity
means a recipient that provides a subaward to a subrecipient.

(g)
Purchase offer
is the initial value assigned to the property, which is later

adjusted by applicable additions and deductions, resulting in a final offer amount to a property owner.

(h)
Qualified alien
means a person within the meaning of the term as defined at 8 U.S.C. 1641.

(i)
Qualified conservation organization
means a qualified organization with a conservation purpose pursuant to 26 CFR 1.170A-14 and applicable implementing regulations, that is such an organization at the time it acquires the property interest and that was such an organization at the time of the major disaster declaration, or for at least 2 years prior to the opening of the grant application period.

(j)
Recipient
means the State or Tribal government that receives a Federal award directly from FEMA. A recipient may also be a pass-through entity. The term recipient does not include subrecipients.

(k)
Subapplicant
means the entity that submits an application for FEMA mitigation assistance to the State or Indian Tribal applicant/recipient. With respect to open space acquisition projects under the Hazard Mitigation Grant Program (HMGP), this term has the same meaning as given to the term “applicant” in part 206, subpart N of this chapter. Upon grant award, the subapplicant is referred to as the subrecipient.

(l)
Subaward
means an award provided by a pass-through entity to a subrecipient, for the subrecipient to carry out part of a Federal award received by the pass-through entity.

(m)
Subrecipient
means the State agency, community or Indian Tribal government or other legal entity to which a subaward is awarded and which is accountable to the recipient for the use of the funds provided.

(n)
Administrator
means the head of the Federal Emergency Management Agency, or his/her designated representative.

(o)
Regional Administrator
means the head of a Federal Emergency Management Agency regional office, or his/her designated representative.

§ 80.5
[Amended]

7. Amend § 80.5 by:
a. Removing the word “grantee” wherever it appears and adding in its place the word “recipient”; and
b. Removing the word “subgrantee” wherever it appears and adding in its place the word “subrecipient”.

8. Amend § 80.9 by revising paragraphs (b) and (c) to read as follows:

§ 80.9
Eligible and ineligible costs.

(b)
Pre-award costs.
FEMA may fund eligible pre-award project costs at its discretion and as funds are available. Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project proposal. These costs can only be incurred during the open application period of the respective grant program. Costs associated with implementation of the project but incurred prior to grant award are not eligible. Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed.

(c)
Duplication of benefits.
Grant funds may not duplicate benefits received by or available to applicants, subapplicants and other project participants from insurance, other assistance programs, legal awards, or any other source to address the same purpose. Such individual or entity must notify the subapplicant and FEMA of all benefits that it receives, anticipates, or has available from other sources for the same purpose. FEMA will reduce the subaward by the amounts available for the same purpose from another source.

9. Amend § 80.11 by revising paragraph (a) to read as follows:

§ 80.11
Project eligibility.

(a)
Voluntary participation.
Eligible acquisition projects are those where the property owner participates voluntarily, and the recipient/subrecipient will not use its eminent domain authority to acquire the property for the open space purposes should negotiations fail.

10. Amend § 80.13 by revising paragraph (a)(3) to read as follows:

§ 80.13
Application information.
(a) * * *

(3) The deed restriction language, which must be consistent with the FEMA model deed restriction that the local government will record with the property deeds. Any variation from the model deed restriction language can only be made with prior approval from FEMA's Office of Chief Counsel;

11. Revise § 80.17 to read as follows:

§ 80.17
Project implementation.

(a)
Hazardous materials.
The subrecipient must take steps to ensure it does not acquire or include in the project properties contaminated with hazardous materials by seeking information from property owners and from other sources on the use and presence of contaminants affecting the property from owners of properties that are or were industrial or commercial, or adjacent to such. A contaminated property must be certified clean prior to participation. This excludes permitted disposal of incidental demolition and household hazardous wastes. FEMA mitigation grant funds may not be used for clean up or remediation of contaminated properties.

(b)
Clear title.
The subrecipient will obtain a title insurance policy demonstrating that fee title conveys to the subrecipient for each property to ensure that it acquires only a property with clear title. The property interest generally must transfer by a general warranty deed. Any incompatible easements or other encumbrances to the property must be extinguished before acquisition.

(c)
Purchase offer and supplemental payments.
(1) The amount of purchase offer is the current market value of the property or the market value of the property immediately before the relevant event affecting the property (“pre-event”).

(i) The relevant event for Robert T. Stafford Disaster Relief and Emergency Assistance Act assistance under HMGP is the major disaster under which funds are available; for assistance under the Pre-disaster Mitigation program (PDM) (42 U.S.C. 5133), it is the most recent major disaster. Where multiple disasters have affected the same property, the recipient and subrecipient will determine which is the relevant event.

(ii) The relevant event for assistance under the National Flood Insurance Act is the most recent event resulting in a National Flood Insurance Program (NFIP) claim of at least $5,000.

(2) The recipient should coordinate with the subrecipient in their determination of whether the valuation should be based on pre-event or current market value. Generally, the same method to determine market value should be used for all participants in the project.

(3) A property owner who did not own the property at the time of the relevant event, or who is not a National of the United States or qualified alien, is not eligible for a purchase offer based on pre-event market value of the property. Subrecipients who offer pre-event market value to the property owner must have already obtained certification during the application process that the property owner is either a National of the United States or a qualified alien.

(4) Certain tenants who must relocate as a result of the project are entitled to relocation benefits under the Uniform Relocation Assistance and Real Property

Acquisition Act (such as moving expenses, replacement housing rental payments, and relocation assistance advisory services) in accordance with 49 CFR part 24.

(5) If a purchase offer for a residential property is less than the cost of the homeowner-occupant to purchase a comparable replacement dwelling outside the hazard-prone area in the same community, subrecipients for mitigation grant programs may make such a payment available in accordance with criteria determined by the Administrator.

(6) The subrecipient must inform each property owner, in writing, of what it considers to be the market value of the property, the method of valuation and basis for the purchase offer, and the final offer amount. The offer will also clearly state that the property owner's participation in the project is voluntary.

(d)
Removal of existing buildings.
Existing incompatible facilities must be removed by demolition or by relocation outside of the hazard area within 90 days of settlement of the property transaction. The FEMA Regional Administrator may grant an exception to this deadline only for a particular property based upon written justification if extenuating circumstances exist, but will specify a final date for removal.

(e)
Deed Restriction.
The subrecipient, upon settlement of the property transaction, must record with the deed of the subject property notice of applicable land use restrictions and related procedures described in

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2021-19186. Public record. Not legal advice.