Hermit's Peak/Calf Canyon Fire Assistance

Federal RegisterAug 29, 2023

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 296

[Docket ID FEMA-2022-0037]

RIN 1660-AB14

Hermit's Peak/Calf Canyon Fire Assistance

AGENCY:

Federal Emergency Management Agency, Department of Homeland Security.

ACTION:

Final rule.

SUMMARY:

This final rule sets out the procedures for claimants to seek compensation for injury or loss of property resulting from the Hermit's Peak/Calf Canyon Fire.

DATES:

This rule is effective August 29, 2023.

FOR FURTHER INFORMATION CONTACT:

Angela Gladwell, Office of Response and Recovery, 202-646-2500,

FEMA-Hermits-Peak@fema.dhs.gov.

Persons with hearing or speech challenges may access this number through TTY by calling the toll-free Federal Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Summary of Legal Authority

Congress enacted the Hermit's Peak/Calf Canyon Fire Assistance Act (“Act”) as part of the Continuing Appropriations and Ukraine Supplemental Appropriations Act, 2023, Public Law 117-180, 136 Stat. 2114 (2022), and directed FEMA to issue an Interim Final Rule (“IFR”) within 45 days of enactment. Congress passed the Act to compensate those parties who suffered injury and loss of property from the Hermit's Peak/Calf Canyon Fire (“Fire”). The Act requires FEMA to design and administer a claims program to compensate victims of the Fire for injuries resulting from the Fire and to provide for the expeditious consideration and settlement for those claims and injuries. The Act further directs FEMA to establish an arbitration process for disputes regarding claims. On December 29, 2022, the Consolidated Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459 provided additional funding for the Act's implementation.

B. Summary of the IFR

On November 14, 2022, FEMA published the IFR that established the procedures for processing and paying claims for property, business, and/or financial losses to those sustaining losses from the Fire. FEMA's procedures in the IFR were generally consistent with those established for claims associated with the Cerro Grande Fire Assistance Act.

Under the IFR procedures, a claimant initiates a claim by filing a Notice of Loss with the Office of Hermit's Peak/Calf Canyon Fire Claims (“Claims Office”). After receipt and acknowledgement by the Claims Office, the Claims Office contacts the claimant to review the claim and helps the claimant formulate a strategy for obtaining any necessary supporting documentation to complete the Proof of Loss. After coordinating with the Claims Reviewer, the claimant reviews and signs a Proof of Loss and submits it to the Claims Office. The Claims Reviewer reviews and evaluates the Proof of Loss and submits a report to the Authorized Official for review to determine whether compensation is due to the claimant. The Authorized Official's written decision is provided to the claimant. If satisfied with the decision, the claimant receives payment after returning a completed Release and Certification Form. If the claimant is not satisfied with the decision, an Administrative Appeal could be filed with the Director of the Claims Office. If the claimant is not satisfied after appeal, the dispute could be resolved through binding arbitration or heard in the United States District Court for the District of New Mexico.

The Cerro Grande Fire Assistance Act (Pub. L. 106-246 (2001)) required FEMA to design and administer a program to fully compensate those who suffered injuries resulting from the Cerro Grande Fire. The Cerro Grande Fire resulted from a prescribed fire ignited on May 4, 2000, by National Park Service fire personnel at the Bandelier National Monument, New Mexico under an approved prescribed fire plan. That fire burned approximately 47,750 acres and destroyed over 200 residential structures. The Cerro Grande Fire Assistance Act process is detailed in an Interim Final Rule (65 FR 52259 (Aug. 27, 2000) and a Final Rule (66 FR 15847 (Mar. 21, 2001) that is now codified at 44 CFR part 295.

C. Summary of Changes From the IFR to the Final Rule

FEMA is making changes from the IFR to the Final Rule to reflect the concerns raised by commenters and better adhere to the intent of the Act by addressing the needs of the communities impacted by the Fire. Given the geographic, economic, and cultural distinctions between the impacted communities of the Cerro Grande and the Hermit's Peak/Calf Canyon Fires, FEMA is revising some sections of the regulatory text to ensure the claims process is more tailored to claimants impacted by the Fire. FEMA is revising the regulatory text in the Final Rule to eliminate the 25 percent formulas associated with reforestation and revegetation in § 296.21(c)(2) and with heightened risk reduction in § 296.21(e)(5) that were based on the Cerro Grande Fire Assistance process. FEMA recognizes the distinct geographic, economic, and cultural differences between these impacted communities and that these formulas, while an efficient way to process claims in the Cerro Grande Fire Assistance process, are not easily adapted to meet the needs of claimants injured by the Fire. FEMA agrees with the majority of commenters that removal of these formulas is essential to ensuring claimants in the Hermit's Peak/Calf Canyon Fire Assistance process are compensated for their actual compensatory damages resulting from the Fire. FEMA is modifying § 296.21(c)(3)(ii) regarding claims for a decrease in the value of real property. Distinct from Cerro Grande, the claimants impacted by this Fire have commented that they are more likely to have significant acreage damaged that has the potential for long-term natural restoration. Requiring that the property value be permanently diminished for a decrease in property value claim, as provided in the IFR, is inconsistent with the geography, economy, and real estate valuations of the impacted communities.

Based on comments received and to ensure the Final Rule accommodates the needs of claimants and impacted communities, FEMA is revising the language in 296.21(c)(3)(ii) to allow a claimant to establish that the value of the real property was “significantly” diminished “long-term” as a result of the Fire. FEMA is adding paragraph (c)(5) to incorporate language from the Act regarding physical infrastructure to ensure that claimants understand compensatory damages may be awarded for damage or destruction of physical infrastructure, including damage to irrigation infrastructure such as acequia systems. Acequia systems are unique to the communities impacted by

the Fire and, just as the Act recognizes this distinction, FEMA is also recognizing it and incorporating it into the Final Rule.

“On the flip side, economic strategies traditionally employed in the Santa Fe National Forest assessment area, typically combining ranching, acequia agriculture, wood collection and other communal land uses, appear to be less viable in the context of rising land values and declining prices for primary commodities. Consequently, many of these traditional uses are party to the transformation of land use patterns, as ranches and agricultural lands are sold for residential and second home development.” University of New Mexico Bureau of Business and Economic Research, “Socioeconomic Assessment of the Santa Fe National Forest,” August 2007 at pg. 99, found at

https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf

(last accessed July 5, 2023).

In the IFR, FEMA requested additional feedback on some of the dates set relating to claims for financial losses. Based on comments received, FEMA is making changes to those dates. FEMA currently requires claimants seeking compensation for out-of-pocket expenses for treatment of mental health conditions to submit claims for treatment rendered on or before April 6, 2024. FEMA is revising this paragraph to allow claims for treatment identified on or before November 14, 2024, consistent with the timeframe for submitting a claim under the Act. FEMA recognizes that mental health treatment may extend beyond the deadline for filing a claim and claimants may reopen claims under § 296.35 for good cause. FEMA is also making a clarifying edit in the Final Rule by specifying that the treatment can be for a condition that resulted from the Fire or for conditions worsened by the Fire. Based on comments received, this edit helps clarify that treatment for conditions worsened by the Fire will also be compensated. In the IFR, FEMA allows compensation for donations provided no later than September 20, 2022. FEMA is revising § 296.21(c)(4) to allow claimants to seek actual compensatory damages for donations provided to survivors no later than November 14, 2022. FEMA is setting the date of the IFR publication as the timeframe by which donations will be considered compensable.

FEMA is modifying the language in § 296.31(a) regarding reimbursement for expert opinions. FEMA understands that claimants impacted by this Fire are more likely to need the services of experts to help better value their claims than the claimants in the Cerro Grande Fire Assistance process given the scope of the Fire and the geographic, economic, and cultural distinctions between the impacted communities. FEMA is revising the regulatory text to allow for reimbursement for expert opinions that the Claims Office deems necessary to determine the amount of the claim. This additional flexibility will help claimants and FEMA better understand and process claims.

FEMA is also revising § 296.35 of the regulatory text in the Final Rule regarding reopening a claim. The IFR provides that claimants can seek to reopen their claim to consider issues raised when the claimant closes on the sale of a home and wishes to present a claim for a decrease in the value of their real property under § 296.21(c)(3). FEMA is revising this language in the Final Rule to allow claimants to reopen their claim when the claimant closes on the sale of real property, expanding the ability to reopen a claim beyond just a home. This change reflects the unique geographic area impacted by the Fire and the reality that claimants may sell a portion of their land without necessarily selling their home and experience a loss for which compensation should be made available. FEMA is also revising the timeline by which a request to reopen must be submitted for claims related to additional losses as part of a reconstruction in excess of those previously awarded or for good cause. Recognizing the challenges claimants face with reconstruction and other potential issues that can arise that require a claim to be reopened, FEMA is revising § 296.35 to set the deadline by which requests to reopen these types of claims must be submitted as a date in the future that the Director of the Claims Office will set and publish in the

Federal Register

and at

https://www.fema.gov/hermits-peak.

FEMA is making some clarifying revisions in the Final Rule. Currently in § 296.1, FEMA states the purpose of the rule is to pay for actual compensatory damages for injuries suffered from the Fire (emphasis added). FEMA is revising this language, consistent with the language from the Act, to pay for actual compensatory damages for injuries resulting from the Fire (emphasis added). FEMA is making this edit to better communicate to claimants that all injuries resulting from the Fire, including injuries resulting from flooding, mudflow, mold, and debris flow in the aftermath of the Fire, are compensable. However, a claimant may not be eligible for compensation if their injuries resulted from flooding, mudflow, mold, or debris unrelated to the Fire. FEMA is also updating the definition of “subsistence resources” to include “other natural resource” gathering, consistent with how the impacted communities are engaged in subsistence activities. FEMA is updating § 296.12 regarding election of remedies. The IFR discusses how claimants waive their right to pursue claims if they accept an award. FEMA is revising this section to clarify that the claimant waives their right to pursue other claims only after acceptance of a final award, consistent with commenters' request for additional clarity on this point and for consistency with the Act. Consistent with the Act, FEMA is incorporating language in § 296.13 to reiterate the prioritization of claims for injured persons over subrogees. In § 296.21(a), FEMA is resolving a grammatical error by changing “Injury” to “injury” and another grammatical error by adding “that” to § 296.21(f) to read that the Act allows FEMA to compensate Injured Persons only for damages not paid, or that will not be paid, by insurance or other third-party payments or settlements.

II. Background and Legal Authority

On September 30, 2022, President Biden signed the Act into law as part of the Continuing Appropriations and Ukraine Supplemental Appropriations Act, 2023, Public Law 117-180, 136 Stat. 2114 (2022).

Congress passed the Act to compensate those parties who suffered injury and loss of property from the Hermit's Peak/Calf Canyon Fire. On April 6, 2022, the U.S. Forest Service initiated the Las Dispensas-Gallinas prescribed burn on Federal land in the Santa Fe National Forest in San Miguel County, New Mexico. That same day the prescribed burn, which became known as the “Hermit's Peak Fire,” escaped the burn unit's boundaries and was declared a wildfire, spreading to other Federal and non-Federal lands.

On April 19, 2022, the Calf Canyon Fire, also in San Miguel County, New Mexico, began burning on Federal land and was later identified as the result of a pile burn in January 2022 that remained dormant under the surface before reemerging.

The Hermit's Peak and Calf Canyon Fires merged on April 27, 2022, and both fires were reported as the Hermit's Peak Fire or the Hermit's Peak/Calf Canyon Fire. By May 2, 2022, the fire had grown, causing evacuations in multiple villages and communities in San Miguel County and Mora County, including the San Miguel County jail, the State's psychiatric hospital, the United World College, and New Mexico

Highlands University.

At the request of New Mexico Governor Lujan Grisham, President Biden issued a major disaster declaration on May 4, 2022.

The Hermit's Peak/Calf Canyon Fire was not 100 percent contained until August 21, 2022.

As mentioned above, Division N, Title VI of the Consolidated Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459 authorized additional funding to implement the Act.

Section 102(a)(1) and (2), Hermit's Peak/Calf Canyon Fire Assistance Act, Public Law 117-180, 136 Stat. 2114 (2002).

See also

Bryan Pietsch and Jason Samenow, “New Mexico blaze is now largest wildfire in state history,” The Washington Post, May 17, 2022, found at

https://www.washingtonpost.com/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/

(last accessed July 27, 2023).

87 FR 33808 (June 3, 2022).

“Hermits Peak/Calf Canyon Fire 100 percent contained, fire officials say,” The New Mexican, Aug. 21, 2022 found at

https://www.santafenewmexican.com/news/local_news/hermits-peak-calf-canyon-fire-100-percent-contained-fire-officials-say/articles_5ac054fc-21a1-11ed-9401-134e852ee0a8.html

(last accessed July 5, 2023).

The Act provides compensation to injured persons impacted by the Fire. It requires FEMA to design and administer a claims program to compensate injured parties for injuries resulting from the Fire and to provide for the expeditious consideration and settlement for those claims and injuries. The Act further directs FEMA to establish an arbitration process for disputes regarding claims.

On November 14, 2022, FEMA published an IFR with a 60-day comment period that established the procedures for the processing and payment of claims to those injured by the Fire sustaining property, business, and/or financial losses. FEMA held public meetings during the comment period to further gather public feedback on the rule. Based on public comment, FEMA is making changes to the Final Rule to better reflect the differences between the Cerro Grande Fire and the Hermit's Peak/Calf Canyon Fire, as the Hermit's Peak/Calf Canyon Fire destroyed a significant amount of forested private lands, communities, acequias, ranches, and farms, and to further reflect the specific cultural, economic, and geographic distinctions between the areas impacted by the Hermit's Peak/Calf Canyon Fire. This rule finalizes the IFR, with changes in response to public comments received on the IFR.

III. Discussion of Public Comments and FEMA's Responses

A. Summary of Public Comments

The public comment period on the IFR closed on January 13, 2023, and FEMA received 190 germane written comments.

FEMA hosted six public meetings on the IFR and received 103 germane comments from those public meetings.

FEMA also hosted a meeting with the State of New Mexico's Department of Homeland Security and Emergency Management and supporting contract staff, and received comments during that meeting.

Commenters included individuals, State and local government entities, congressional representatives, associations, law firms, and non-profit organizations. Some commenters appreciated FEMA's effort to publish the IFR in a timely manner, arrange public meetings to listen to concerns in-person, and launch the claims process. Most commenters offered recommendations for changes to the IFR. FEMA describes the specific revisions to the Final Rule and addresses the specific concerns of commenters below.

FEMA received three comments that did not address the Interim Final Rule or the claims process: One commenter asked where the regulation could be read, and FEMA contacted the commenter to provide this information; another commenter shared a poem to reflect their feelings during the holiday season after the Fire; one comment from a law firm was incomplete without attachments referenced.

FEMA also received an inquiry on the status of another FEMA application at a public meeting. A commenter offered their services to assist with claims, filling out applications for Federal agencies, internet use, mental health assistance, etc. at two public meetings. Another commenter from the same organization also offered services during a public meeting.

Transcripts of that meeting have been posted to the public docket at

https://www.regulations.gov/docket/FEMA-2022-0037

B. Differences Between the Hermit's Peak/Calf Canyon Fire and the Cerro Grande Fire

Some commenters recommended changes to the IFR based on the distinctions between the Cerro Grande and Hermit's Peak/Calf Canyon Fires.

Comment:

Several commenters stated distinctions between the two areas where the fires were located. As one commenter stated, the Hermit's Peak/Calf Canyon Fire “destroyed significant forested private lands, communities, acequias, ranches, and farms.” Another commenter stated that the Cerro Grande Fire “burned a mostly urban environment of high-value homes on mostly small tracts of land” while the Hermit's Peak/Calf Canyon Fire burned “mostly rural land with relatively fewer and lower value structures.”

FEMA Response:

FEMA agrees that the challenges facing the communities and claimants impacted by the Hermit's Peak/Calf Canyon Fire are distinct and that the IFR should be revised to better reflect those distinctions. The Cerro Grande Fire burned approximately 47,000 forested acres, causing $1 billion in property damage with over 280 homes destroyed or damaged and 40 laboratory structures burned.

In contrast, the Hermit's Peak/Calf Canyon Fire burned more than 340,000 acres, just under 200,000 of which were privately owned, and destroyed at least 160 homes and over 900 structures.

According to the 2020 Census, Los Alamos County's population density is 178 people per square mile compared to 5.8 people per square mile in San Miguel County and 2.2 people per square mile in Mora County.

In the Socioeconomic Assessment of the Santa Fe National Forest, provided to the U.S. Forest Service by the University of New Mexico, Bureau of Business and Economic Research, approximately one third of privately held land within the Santa Fe National Forest is located in San Miguel County.

Given the Hermit's Peak/Calf Canyon Fire's scope and the type of land impacted by that fire, FEMA is proposing changes to sections 296.4, 296.21(c)(2), 296.21(c)(3)(ii), 296.21(e)(5), 296.31(a), and 296.31(c)(3) while adding § 296.21(c)(5) to address the concerns raised that are unique to those communities. Changes to each of these sections is further described below.

Bill Gabbert, “Cerro Grande fire, 10 years ago today,” May 10, 2010 found at

https://wildfiretoday.com/2010/05/10/cerro-grande-fire-10-years-ago-today/

(last accessed July 5,, 2023).

See

New Mexico Forest and Watershed Restoration Institute, “Hermit's Peak and Calf Canyon Fire: The largest wildfire in New Mexico's recorded history and its lasting impacts” Aug. 24, 2022, found at

https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653

(last accessed Mar. 3, 2023).

See https://www.census.gov/library/stories/state-by-state/new-mexico-population-change-between-census-decade.html

(last accessed July 5, 2023).

University of New Mexico Bureau of Business and Economic Research, “Socioeconomic Assessment of the Santa Fe National Forest,” August 2007 at pg. 5, found at

https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf

(last accessed Mar. 3, 2023).

Comment:

Commenters reiterated the communities impacted by the Hermit's Peak/Calf Canyon Fire also had different economic and cultural practices. One commenter stated that “FEMA is totally unfamiliar with how land management, including use of resources is conducted in an area where descendants of an individual land grant have access to and use of resources within that grant.” The commenter went on to note that the Cerro Grande Fire impacted a part of the State that “has little in common with the cultural and economic practices in this area.” As one commenter stated, “Individuals and businesses relied on

the forests not just for subsistence, but also for their annual income for themselves and others in the community.” Another commenter stated, “The use of the land's timber in small (family) enterprises is one of the keys to the livelihoods of this area. Another is the small farming enterprises consisting of small orchards, raising hay, cattle, and horses. This is not a region of city life and landscaping, but is rural, with a deep heritage of independent living and family business.”

FEMA Response:

FEMA agrees that the losses facing the communities and claimants impacted by the Hermit's Peak/Calf Canyon Fire are distinct and that the IFR should be revised to better reflect those distinctions. The Act requires FEMA to compensate claimants for injuries resulting from the Fire and the injuries suffered by claimants in this community are distinct from those suffered in Cerro Grande. Specifically, FEMA notes the economic differences between the two impacted communities resulted in different losses within each community. Los Alamos County has an economy “almost entirely composed of government, retail, and service sector jobs. These three sectors combined make up more than 90 percent of the county's employment . . . Los Alamos is somewhat unique in its lack of farming and other `core' industry sectors such as construction and manufacturing . . . Mora County is by far the smallest county in the region, in terms of size as well as economy . . . San Miguel County is fairly small, and farm employment makes up a larger portion of overall employment there than in any other county in the region except Rio Arriba. San Miguel and Mora County contain minor, though substantial, sections of the Santa Fe N[ational] F[orest]. These two counties, as the smaller and poorer economies of the region, likely rely more heavily on the benefits of the forest as a provider of primary products such as fuel wood and food, as well as land for ranching and logging.”

The communities impacted by the Hermit's Peak/Calf Canyon Fire rely much more on the land for their economic viability than the Los Alamos County community that was impacted by the Cerro Grande Fire. Additionally, the population per square mile in the impacted communities demonstrates a much higher density in Los Alamos County compared to Mora and San Miguel Counties and requiring FEMA to consider the differences in the residential areas impacted by the two fires.

To fully implement the intent of the Act, FEMA must consider these differences between the impacted communities and address the specific injuries suffered by the Hermit's Peak/Calf Canyon Fire communities around the use of the land in those communities. FEMA is proposing changes to §§ 296.4, 296.21(c)(2), 296.21(c)(3)(ii), 296.21(e)(5), 296.31(a), and 296.35 while adding § 296.21(c)(5) to address the concerns raised that are unique to these communities. Changes to each of these sections are further described below.

University of New Mexico Bureau of Business and Economic Research, “Socioeconomic Assessment of the Santa Fe National Forest,” August 2007 at pgs. 78-79 and 89, found at

https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf

(last accessed Mar. 3, 2023).

The population per square mile in 2020 was 178 in Los Alamos County, 5.8 in San Miguel County, and 2.2 in Mora County.

See

U.S. Census Quick Facts—Los Alamos County, New Mexico found at

https://www.census.gov/quickfacts/losalamoscountynewmexico, https://www.census.gov/quickfacts/sanmiguelcountynewmexico,

and

https://www.census.gov/quickfacts/moracountynewmexico

(last accessed July 5, 2023).

Comment:

Commenters stated another distinction between those impacted by the Hermit's Peak/Calf Canyon Fire and those impacted by the Cerro Grande Fire included the number of claimants that are insured, stating more claimants in the Cerro Grande Fire were insured than in the Hermit's Peak/Calf Canyon Fire.

FEMA Response:

FEMA agrees that the challenges facing the claimants impacted by the Hermit's Peak/Calf Canyon Fire are distinct and that the IFR should be revised to better reflect those distinctions. Specifically, FEMA is proposing changes to sections 296.21(c)(2), 296.21(e)(5), 296.31(a), and 296.35 while adding § 296.21(c)(5) to address the concerns raised regarding the number of uninsured claimants impacted by the fire.

Comment:

A commenter suggested FEMA look at other wildfires beyond Cerro Grande, including the recent California wildfire involving a utility company.

FEMA Response:

FEMA appreciates the suggestion and has reviewed some of the best practices associated with the California compensation process referenced by the commenter. That process, however, involved a bankruptcy settlement of a private corporation under California law. FEMA is required to follow the statutory framework provided in the Act. While the Claims Office is reviewing some of the best practices from the California incident, that incident and the compensation process implemented to compensate those injured thereby are factually and legally too distinct from the Act's requirements to be considered a full template for implementation in regulation.

C. Comments on §§ 296.1 and 296.3, the Rule's Purpose and Information

Comment:

FEMA received comments stating the IFR's purpose should be revised to reflect the Act's purpose language. Specifically, a commenter wrote “The Hermit's Peak/Calf Canyon Fire Assistance Act provides one of the purposes of the Act is `to compensate victims of the Hermit's Peak/Calf Canyon Fire, for injuries resulting from the fire.' . . . FEMA's [I]nterim [F]inal [R]ule's current phrase `suffered from the Hermit's Peak/Calf Canyon Fire' (emphasis added) could result in limiting allowable losses to solely fire damages, in violation of the Act.”

FEMA's Response:

FEMA agrees that the Act's purpose as stated in section 102(b)(1) is to compensate victims for “injuries resulting from the Fire” (emphasis added) and is amending § 296.1 to state that the Claims Office will receive, evaluate, process, and pay actual compensatory damages for injuries resulting from the Hermit's Peak/Calf Canyon Fire. This technical edit provides consistency with the language of the Act.

Comment:

Some commenters requested FEMA change the purpose of the rule in § 296.1 to include flood damages, as well as throughout the rest of the rule.

FEMA Response:

The Final Rule language as revised in § 296.1 as explained above is sufficiently broad to encompass a range of damages claimants may have suffered, including flood and flood-related damages. Further, the definition of “injured person” includes injuries “resulting from the Hermit's Peak/Calf Canyon Fire” and is sufficiently broad to encompass flooding, mudflow, mold, and debris flow, as well as other types of injuries that may result from the Fire.

Comment:

One commenter suggested that FEMA include specific reference to mitigation efforts in the rule's purpose.

FEMA Response:

Section 296.1 does not require any edits to incorporate mitigation efforts into the rule. The purposes of the Act are to compensate Fire victims for injuries resulting from the Fire and the expeditious consideration and settlement of claims for those injuries. Further, the Act requires FEMA to promulgate a regulation “for the processing and payment of claims under the Act.” Consistent with the Act, FEMA's Final Rule states the purpose of the regulation is to “establish the Office of Hermit's Peak/Calf Canyon Fire Claims (`Claims Office') to receive, evaluate, process,

and pay actual compensatory damages for injuries resulting from the Hermit's Peak/Calf Canyon Fire.” The Act authorizes FEMA to compensate claimants for the “costs of reasonable efforts, as determined by the Administrator, to reduce the risk of wildfire, flood, or other natural disaster in the counties impacted by the Hermit's Peak/Calf Canyon Fire to risk levels prevailing in those counties before the Hermit's Peak/Calf Canyon Fire,” and FEMA details this compensation in § 296.21(e)(5). Section 296.1 does not require revision to allow for compensation for eligible risk reduction measures.

Comment:

Some commenters suggested FEMA amend the information and assistance section to incorporate details regarding the Claims Office addresses and phone number. One commenter suggested FEMA allow for applications, correspondence, and supporting documentation to be exchanged by postal mail. This commenter also recommended FEMA create centralized locations where northern New Mexicans can physically go to access the electronic application and receive assistance in filling out the applications in multiple languages so that the application and supporting documentation can be timely submitted.

FEMA Response:

FEMA appreciates these suggestions and plans to provide further details regarding the Claims Office operation and opportunities for claimants to obtain assistance online at

https://www.fema/gov/hermits-peak

as explained in the regulation. Because FEMA wants to continue adapting to claimants' needs in this process, it is best to direct claimants to the website in the regulations for the latest information available on the process. FEMA will continue to provide outreach efforts to the community in addition to posting at

https://www.fema.gov/hermits-peak.

D. Comments on § 296.4 Definitions

Some commenters suggested FEMA modify the definitions provided in the IFR to better reflect the unique challenges presented by the Hermit's Peak/Calf Canyon Fire.

Comment:

One commenter recommended FEMA amend the definition of “Authorized Official's Determination” to include determinations by mail and electronically.

FEMA Response:

FEMA does not believe edits to the regulatory text are required as “mailed” can incorporate both physical and electronic mailing. FEMA anticipates that, where applicants have provided contact information to allow for electronic mailing of this determination, the Agency will provide the Authorized Official's determination both by mail and electronically. However, there may be instances where the claimant has not provided contact information to allow for electronic mailing and thus FEMA could only provide the determination by physical mail. To ensure flexibility in these instances, FEMA is not amending the regulatory language.

Comment:

One commenter also recommended adding a definition of a “Claims Navigator” to the regulation, providing suggestions on how these Navigators would work with claimants in the process.

FEMA Response:

FEMA does not believe this change is needed. The Agency is not referencing this term in the regulatory text. Terms not used in the regulatory text do not need to be defined in the definitions section of the regulation.

See

“Writing Resources for Federal Agencies, Regulatory Drafting Guide, Definitions” found at

https://www.archives.gov/federal-register/write/legal-docs/definitions.html

(last accessed Feb. 16, 2023).

Comment:

A commenter suggested revision to the definition of “good cause” to include “or any circumstance where the Administrator determines that good cause would further the mission of the Claims Office to pay compensatory damages for injuries suffered from the Hermit's Peak/Calf Canyon Fire.”

FEMA Response:

FEMA disagrees with the comments that the additional language in the definition of “good cause” is required. The Act authorizes the Director of the Claims Office to assume the duties of the Administrator.

Adding language to the definition of “good cause” to allow the Administrator to make a good cause determination would result in a redundancy as the IFR language provides the Director discretion to make good cause determinations. As written, the IFR provides for the use of good cause in circumstances regarding deadlines or supplementing and reopening claims.

Section 103, Definition of “Administrator” (1)(B).

Comment:

Some commenters also requested the definition of “good cause” be amended to include “or where damage from post-fire flooding is suffered by the claimant after filing a claim.”

FEMA Response:

FEMA disagrees that the “good cause” definition must be revised to consider flooding damage after filing a claim. As explained above, the definition of “injured person” includes injuries “resulting from the Hermit's Peak/Calf Canyon Fire” and is broad enough to encompass flooding, mudflow, mold, and debris flow, as well as other types of injuries that may be considered as a result of the Fire. The current language allows for good cause “where damage is found after a claim has been submitted” and this language, read in conjunction with the definition of “injured person” addresses concerns regarding whether such damage could constitute good cause to supplement or reopen a claim.

Comment:

One commenter raised concerns that “good cause” was too subjective.

FEMA Response:

The application of a good cause definition requires use of discretion that by nature contains some subjectivity that cannot be fully eliminated from the determination.

Comment:

A commenter recommended FEMA change the definition of the “Hermit's Peak/Calf Canyon Fire” to add “flooding, mudflow, mold, and debris flow resulting from the two fires.” The commenter requested FEMA specifically reference flooding, mudflow, mold, and debris flow as a cause of injury and as a damage that can be compensated.

FEMA Response:

FEMA disagrees that this change is needed to the definition of “Hermit's Peak/Calf Canyon Fire” to compensate claimants for these types of injuries resulting from the Fire. The definition of “injured person” includes injuries “resulting from the Hermit's Peak/Calf Canyon Fire” and is broad enough to encompass flooding, mudflow, mold, and debris flow, as well as other types of injuries that may be considered as a result of the Fire. Adding this language may narrow the scope of damages an injured person may seek to claim, and FEMA prefers to retain the current definition of the Fire while allowing claimants suffering injuries resulting from the Fire be allowed to present their claims.

Comment:

Three commenters recommended that FEMA modify the definition of household “to clarify that it does not exclude the claims of owners that did not live at the property on a continuous basis” and that rather, these individuals should be included. While including them in the definition of household, the commenters recommended that these individuals “not be compensated for financial damages already paid to the primary resident.” Rather, the individuals should be “eligible for compensation based on their individual loss.”

FEMA Response:

FEMA is not amending the definition of “household” as requested by these comments. Claimants can file a claim as a

household or individually in these circumstances and the Claims Office will accept the claim for review. Nothing in the current definition prohibits claims filing either as a household or individually.

Comment:

A commenter suggested the definition of “injured person” be modified to include “acequia, land grant” immediately after “school district” in the definition.

FEMA Response:

FEMA does not believe this amendment is required to cover the entities referenced. Rather, these entities are covered under the current definition as an “other non-Federal entity that suffered injury resulting from the Hermit's Peak/Calf Canyon Fire.”

Comment:

Another commenter stated FEMA should amend the definition of “injured person” to include flooding, mudflow, mold, and debris flow as a cause of injury and damage that can be compensated.

FEMA Response:

FEMA disagrees that this edit is required to the regulatory text. The current definition provides for these types of injuries, as well as other types of injuries that may be considered an injury resulting from the Fire. Adding this language may narrow the scope of damages an injured person may seek to claim. The proposed language also conflates injuries from flooding, mudflow, mold, and debris irrespective of their connection with the Fire with injuries from flooding, mudflow, mold, and debris that are connected to the Fire. Only the latter are compensable under the Act. Therefore, FEMA prefers to retain the current definition of the Fire, which will allow claimants suffering injuries resulting from the Fire to present their claims.

Comment:

Commenters wrote that nonprofit organizations should be considered “injured person.”

FEMA Response:

The current definition of “injured person” includes an “other non-Federal entity that suffered injury resulting from the Hermit's Peak/Calf Canyon Fire” and that terminology encompasses non-profit organizations. FEMA understands non-profit organizations may have suffered injuries resulting from the Fire, and FEMA believes the current definition sufficiently encompasses all types of for-profit and non-profit entities. FEMA's website at

https://www.fema.gov/hermits-peak

provides more information explaining the regulatory text to help claimants better understand who is considered an injured person under the Act.

Comment:

Some commenters suggested that FEMA amend the definition of “subsistence resources” to include “and other natural resource” to reflect the types of resources gathered and the broad range of subsistence use practices of both acequia-served communities, as well as Tribal and Pueblo sovereigns.

FEMA Response:

Consistent with these suggestions, FEMA is adding “or other natural resource” to the definition of “subsistence resources” to reflect the specific needs of the impacted communities. As explained above, the Hermit's Peak/Calf Canyon Fire impacted an area that is economically and culturally distinct from the communities impacted by the Cerro Grande Fire. This change reflects FEMA's understanding that other natural resources beyond firewood may be gathered for subsistence purposes.

E. Comments on the Claims Process Generally

Commenters offered comments and suggestions on a wide range of issues on the claims process. Commenters offered suggestions on ways to streamline the process and to make the process more accessible to the impacted communities. Commenters wrote of experiences with FEMA and other Federal agencies, stating how FEMA and other agencies handled their cases under other programs.

Comment:

One commenter stated, “Nothing in my experience with F[EMA] so far gives me faith that you are on my side or have my best interests at heart.” The comment continued “So far communication between government entities and organizations has been nonexistent or completely dysfunctional . . . I need to have more confidence in your ability to work with other entities, or even communicate within F[EMA].” Commenters provided suggestions on hiring personnel for the Claims Office, including the Claims Office Director, Claims Navigators, Claims Reviewers, and other staff, and how the agency should train the staff. Commenters also stated their anger, frustration, and mistrust of the process and requested to be treated with respect and compassion. One commenter wrote “Cataloging every single thing we lost in the fire, correlating it with a receipt, and looking up how much it will currently cost to replace it has been a full-time job for a while now, and extremely difficult emotionally.” Another commenter wrote about a recent experience with FEMA stating “it did nothing to build trust or confidence in FEMA. The end effect has been the exact opposite. And in turn, I have since prepared myself to expect more of this inappropriate treatment from FEMA in all future interactions.” A different commenter wrote “HPFAA administrators and claims reviewers must handle all injured victim cases as though this injury to their lives and livelihoods is a direct result of a felony act of arson deliberately committed against them all. Government employees and contractors responsible for this conflagration will never truly be held accountable to receive due punishment for actions which will never even `officially' be considered gross incompetence, but that doesn't make the end result any less destructive than an act of intentional criminal arson would be.” One commenter stated “I want you to remember that this is a fire caused by the [F]ederal government and that we are the victims of this. Please treat us with respect.”

FEMA Response:

FEMA acknowledges the unique challenges faced by the communities impacted by the Fire and how challenging it has been for claimants to recover. FEMA and the Federal government provided a range of existing programs to those impacted by the Fire, many of which were not designed to meet the needs of the impacted communities, given the extent of the injuries suffered as a result of the Fire. Those programs were not designed to provide full financial compensation to those injured by the Fire. For example, the Individuals and Households Program (IHP) provides financial and direct services to eligible individuals and households affected by a disaster, who have uninsured or under-insured necessary expenses and serious needs. IHP is not a substitute for insurance and cannot fully compensate for all losses caused by a disaster; rather, that assistance is intended to meet basic needs and supplement disaster recovery efforts.

As disaster assistance programs are not designed to fully compensate those impacted by disasters, some applicants in these communities are frustrated with and uncertain about, the Federal government's ability to assist them. The Act's commitment to compensate victims through the Claims Office process allows FEMA to directly provide claimants with compensation to better assist claimants and communities in more fully recovering from this devastating Fire. The Agency is committed to working with claimants and communities to ensure the Claims Office meets their needs and compensates claimants for the damages resulting from the Fire. The Claims Office hired Claims Navigators from the community to guide claimants through

the application process, focusing on ensuring that claimants understand the process of applying for compensation, what compensation is available for their losses, and what documentation is needed to obtain this compensation.

https://www.fema.gov/assistance/individual/program

(last accessed Mar. 3, 2023).

The Claims Office operates independently of FEMA's other programs, and it provides a great deal more flexibility in the process of applying for and receiving compensation than these more traditional grant programs. Unlike FEMA's Individual Assistance and Public Assistance, which provide disaster assistance to individuals and households impacted by declared disasters, the Claims Office is not subject to any caps on the amount of assistance it can provide. Unlike FEMA's Public Assistance Program, which provides grants to States, Federally recognized Tribal governments, U.S. territories, local governments, and certain private non-profit (PNP) organizations, the Claims Office does not have any cost share requirements, and there are no conditions placed on receipt of the compensation.

1. Comments on the Claims Office Administrator

Comment:

Commenters made specific requests regarding the appointment of the Claims Office Administrator. Commenters requested that an Independent Claims Administrator be appointed. One commenter stated that the broad “make whole” compensation approach of the Act was different from FEMA's normal disaster relief operation and Congress recognized this by providing for the appointment of an Independent Claims Administrator in the Act. This commenter stated the number of potential claimants and broad scope of the harm they have suffered required the appointment of an Independent Claims Administrator with experience in `make whole' compensation processes. A different commenter wrote that these claims processes are extremely complex, with many moving parts and unique issues, and would be best overseen by a claims manager familiar with fire-related claims processes. Another commenter suggested an independent trustee or claim administrator be appointed to manage and stated FEMA should not be in charge of administration.

FEMA Response:

Section 104(a)(3) gives the Administrator the option to appoint an Independent Claims Manager to head the Claims Office. In her discretion, the Administrator selected a Claims Office Director with over 15 years of experience building and managing Federal programs to start up the Claims Office and did not opt to appoint an Independent Claims Manager. FEMA understands the commenters' desire to have an Independent Claims Manager appointed. Given the short timelines that the Agency had to publish the IFR and begin processing claims, FEMA determined it was both efficient and effective to select a candidate with extensive experience in government assistance programs to lead the Claims Office. FEMA also understands concerns that other FEMA programs do not operate in the same way in which the Act requires the Claims Office to operate. However, FEMA was tasked with the implementation of the Act, including operation of the Claims Office for this Fire, and further has prior experience in operating a Claims Office in New Mexico for the Cerro Grande Fire in 2000. FEMA recognizes the distinctions between the two fires, but also believes the Agency can build on best practices and incorporate principles of equity, as well as lessons learned from the Cerro Grande Claims Office, to implement a Claims Office for the Hermit's Peak/Calf Canyon Fire Assistance Act that will acknowledge the differences between the two fires and best serve the claimants and communities impacted by the Hermit's Peak/Calf Canyon Fire.

Comment:

In addition to requesting an independent claims administrator, several commenters requested the claims administrator be a New Mexico attorney and/or retired judge.

FEMA Response:

As explained above, the Administrator has exercised her discretion and selected the Director of the Claims Office. The Director has extensive experience building and managing Federal assistance programs and will lead the Claims Office in these nascent stages. FEMA appreciates commenters' concerns that the Claims Office be led by someone with familiarity with New Mexico law, as well as the unique political, economic, and cultural institutions of the impacted communities. FEMA has engaged in an extensive effort to recruit locally for positions to support the processing of claims and provision of compensation to claimants impacted by the Fire to ensure these specific concerns are addressed. FEMA believes that local hiring at all other levels of the Claims Office will better serve to meet the needs of claimants and communities rather than a single hire at the Director level. Additionally, FEMA is making changes in the Final Rule to better reflect the needs of the impacted communities.

Comment:

One commenter suggested another commenter be appointed as the Independent Claims Office Administrator.

FEMA Response:

As explained above, the Administrator has exercised her discretion to hire the Director of the Claims Office with extensive experience building and managing Federal programs to lead the Claims Office.

2. Comments on the Claims Office

Commenters offered suggestions on how to staff and manage the Claims Office.

Comment:

Commenters suggested that FEMA hire members of the local community to increase trust in the claims process. Some commenters stated the importance of hiring New Mexicans familiar with acequias.

FEMA Response:

FEMA agrees with these comments. As explained above, FEMA has engaged in an extensive effort to recruit locally for positions to support the processing of claims and provision of compensation to claimants impacted by the Fire to ensure these specific concerns are addressed.

FEMA believes that hiring local applicants at all other levels of the Claims Office will better serve to meet the needs of claimants and communities by helping to ensure the Claims Office is staffed with individuals familiar with the specific needs of the communities impacted by the Fire. As of April 10, 2023, almost 70 percent of the permanent Claims Office team are local staff.

Local staff work out of Claims Offices in Santa Fe, Las Vegas, and Mora, New Mexico, and serve in multiple capacities ranging from the Deputy Director, Advocate and Claims Navigators, to external affairs and facility support. Additionally, FEMA is making changes in the Final Rule to better reflect the needs of the impacted communities.

FEMA hosted a Hiring Fair on January 10, 2023, in Mora, NM and provided Federal Resume Writing webinars on December 29, 2022, and January 3, 2023. Details regarding the available positions were also posted to

https://www.fema.gov/fact-sheet/hermits-peakcalf-canyon-claims-office-now-hiring

(last accessed Feb. 16, 2023).

FEMA notes that given the permanent positions in the Claims Office are located in Mora, Las Vegas, and Santa Fe, New Mexico, most applicants seeking these positions were local.

Comment:

A commenter suggested FEMA stay alert to favoritism “infiltrating the ranks of claims reviewers hired from the local population.”

FEMA Response:

FEMA appreciates the commenter's concerns regarding favoritism. Federal employees are held to certain basic obligations of public

service that require employees to “act impartially and not give preferential treatment to any private organization or individual.”

As part of the hiring and onboarding process, these obligations are explained, and training is provided to ensure employees understand the obligations of public service. FEMA also is coordinating with the Department of Homeland Security Office of Inspector General and the FEMA Fraud unit to ensure vigilant oversight.

5 CFR 2635.101(b)(8).

Comment:

Some commenters suggested FEMA hire a specific contractor to assist the manager and FEMA to process claims.

FEMA Response:

Consistent with the Federal Acquisition Regulation,

FEMA awarded multiple competitive contracts to provide support services to the Claims Office. Services include consulting, claims processing, systems analysis, operation, and data analysis support. Each contractor shall, to the maximum extent possible, create opportunities for the utilization of local small businesses, including the utilizing of businesses from underserved communities and develop a plan to utilize local firms and/or hire local residents.

See https://www.acquisition.gov/browse/index/far.

Comment:

One commenter suggested FEMA hire an experienced claims processor that can start handling claims immediately stating FEMA would need to figure out how to handle claims first.

FEMA Response:

The Claims Office engaged in a competitive hiring action to hire an experienced Claims Chief. This position oversees the claims process from the completion of the Notice of Loss to the final payout on the claim. The Claims Office also hired a number of experienced contract claims examiners with insurance adjusting experience to review and make recommendations on claims. The Claims Chief oversees Claims Reviewers at the main Claims Office, as well as at least three public-facing claims offices in Mora, San Miguel, and Las Vegas, New Mexico.

Comment:

A commenter suggested FEMA take the time that is required to provide substantial training for newly hired staff.

FEMA Response:

FEMA agrees that training will be critical for all newly hired staff for the Claims Office. FEMA intends to provide standard onboarding training for all new employees, as well as specialized training for all Claims Office employees to fully understand the claims process and the Act's requirements. Training includes roles and responsibilities, claims processes and operations, cultural awareness, statutes and regulations, customer service and customer experience, risk reduction practices, coordination with State agencies, and other related trainings.

Comment:

One commenter provided a recent experience with a field inspector that inspected their homestead for potential disaster relief and stated that “the person you chose to do this inspection is an incompetent at such work as this.” The commenter suggested FEMA be very careful in their hiring practices and contracting of third parties for claims office operations to prevent “such outrageous incidents” as described in their experience.

FEMA Response:

FEMA appreciates the commenter's honesty and willingness to share their experience. FEMA intends to staff the Claims Office with local hires that can better understand the unique political, economic, and cultural institutions of the communities impacted by the Fire, as well as claimants seeking compensation under the Act, in addition to experienced contract employees. As explained above, FEMA plans to provide training for all Claims Office employees to fully understand the claims process and the Act's requirements.

Comment:

One commenter provided a memorandum with a seven-step process on how the Claims Office can develop a mindset to get to yes and serve clients effectively. This individual also submitted comments on the culture of the Claims Office. The comment “focus[ed] on a seven-step plan to help this program transform its approach as it processes the regulation comments, from a denial-based approach to a positive, effective process for those it is meant to serve.”

FEMA Response:

FEMA appreciates the commenter's detailed suggestions. As pointed out by the commenter, the Claims Office process will be different from FEMA's disaster relief programs, and it will be important for employees of the Claims Office to acknowledge and embrace those differences in process and implementation efforts. Based on the comments received, FEMA established a set of guiding principles for the Claims Office culture needed to deliver this mission.

FEMA will work to ensure a full understanding by the entire Claims Office staff of the claims process and the Act's requirements and the importance of focusing on the needs of claimants and communities impacted by the Fire. With that in mind, the Claims Office provides each claimant with an assigned Navigator. The Claims Navigator works directly with the claimant and Claims Reviewers, asking questions, helping claimants obtain documentation, helping claimants complete the Notice of Loss and Proof of Loss, and shepherding the claimant through the process to better ensure that the claimant is fully compensated for their loss.

See https://www.fema.gov/hermits-peak

The Claims Office has also established an independent Claims Office Advocate. The Claims Office Advocate responds to, manages, and recommends solutions to issues with the process itself, whether those issues be with the Claims Navigators and Claims Reviewers, the claims process itself, or how the process is being implemented. The Claims Office Advocate is responsible for identifying issues with the claims process and addressing those issues on the claimant's behalf. The Claims Office Advocate serves as an additional resource to claimants by helping to improve their understanding of the claims process and providing guidance about the steps in that process and the associated requirements.

The Claims Office Advocate also identifies issues, risks, and opportunities for improvement and develops recommendations for claims process enhancements that will address these and deliver a better, fairer claims process that is accessible to all claimants. While the Claims Navigators and Claims Reviewers report to a Team Lead, the Advocate reports directly to the Director of the Claims Office. As such, the Claims Office Advocate has a direct line of communication with the Director of the Claims Office, and the Advocate is positioned to advocate on behalf of claimants and to make recommendations for enhancements to the claims process.

Comment:

One commenter suggested that State Case Managers be integrated into the program and trained as Navigators.

FEMA Response:

FEMA anticipates that Claims Navigators will provide the assistance envisioned by the commenter and additional staffing outside of the Claims Office will not be required. However, the Claims Office is implementing procedures to coordinate with the State of New Mexico as appropriate.

Comment:

One commenter asked how many claims would be covered by each Claims Reviewer.

FEMA Response:

FEMA does not have an estimate on the volume of claims per Claims Reviewer at this time. FEMA anticipates Claims Reviewers will have a workload balance reflective of both

claim volume and claim complexity to ensure claimants' needs are effectively met by the Claims Office.

3. Comments on the Use of Funds

Comment:

Commenters sought clarification on how FEMA would use the funds provided by the Act between administrative costs and claims payments to claimants. Some commenters wrote about experiences with administrative costs with one commenter stating that “to provide a trailer for a family it can cost 300k with much of this money going to pay FEMA workers and for admin costs.” Commenters asked what the administrative costs would be and how much of the available appropriated funding would go to administrative costs and how much funding would go to claimants. One commenter wrote “how much of the available funds will go to administration and how much will go to victims?”. Another commenter stated, “I wonder what the administrative costs are if they are going to come out of this $2.5 billion of it is gone before any money goes to anybody in this room and maybe that's necessary.”

FEMA Response:

Section 104(a)(2)(C)(i) of the Act states that “The Office shall be funded from funds made available to the Administrator for carrying out this section.” FEMA is required to use the funding provided under the Act for the administrative costs to run the Claims Office. FEMA has a general obligation to spend Federal funds wisely and Congress required FEMA to provide quarterly reports to the Committee on Appropriations of the Senate and House of Representatives on the obligations and expenditures of the funds made available under the Act.

Congress also directed a portion of the funding to the Department of Homeland Security Inspector General to fund program oversight. FEMA intends to comply with this Congressional reporting requirement regarding the use of funding under the Act. This transparency will help allay the commenters' concerns about the total administrative costs for the Claims Office.

Public Law 117-180, Division A, Section 136 (2022).

Comment:

Commenters suggested FEMA provide transparency in how the funds appropriated under the Act were spent. One commenter suggested that information about how the funds were being spent be shared publicly in real time via an online dashboard. Such a tool would help prevent internal fraud and help FEMA identify external fraud and program favoritism while also allowing everyone the ability to be alerted to something suspicious happening with funds. Another commenter agreed, recommending that FEMA allow the public to review the overall project budget and other transparency related to fiscal accountability. One commenter wrote that “FEMA should provide full transparency of cost, budget, expenditures, etc. including administrative costs, operational costs, total payouts, total denials, etc. to not only to the [Department of Homeland Security's Office of the Inspector General] but also to the State—without violation of the Privacy Act.”

FEMA Response:

As explained above, Congress required FEMA to provide quarterly reports to the Committee on Appropriations of the Senate and House of Representatives on the obligations and expenditures of the funds made available under the Act.

FEMA intends to comply with this Congressional reporting requirement regarding the use of funding under the Act. This transparency will help allay the commenters' concerns about the total administrative costs for the Claims Office. In addition, the Claims Office Advocate will be creating easily understandable reports with program metrics to be shared on

https://www.fema.gov/hermits-peak

and through other communications channels.

Public Law 117-180, Division A, Section 136 (2022).

Comment:

Commenters also provided recommendations on ways to use and/or distribute the funding appropriated. One commenter suggested funding be dedicated to the reintroduction of beavers to the region to help repair the land.

FEMA Response:

FEMA does not have the authority under the Act to dedicate funding as recommended by the commenter as claimants must submit claims demonstrating their injuries resulting from the Fire to obtain compensation. Funding for activities like reintroduction of beavers may be eligible as a nature-based solution to reduce the heightened risk of wildfire, flood, or other natural disaster and claimants seeking compensation must demonstrate that this claim is clearly tied to an increased risk that resulted from the Fires.

Comment:

A commenter wrote suggesting that FEMA “create a grid system on a map with a baseline payment scale using at least 1.5 billion dollars to be distributed equally where the [F]ire/flooding/damaged areas are the epicenter with the highest baseline ($250,000) payment and the areas with lesser damage (such as minimal property damage,

i.e.,

smoke damage or food loss) still receive baseline funding at a lesser significant (over $2,500) amount.” The commenter wrote that none of the funding provided should be taxable income. The commenter stated this proposal is to “ensure that all landowners in the affected areas get a baseline of funding.” The commenter also suggested “[$]2 billion in funding go to the public entities to prevent future disasters such as monies allocated to public safety.” The commenter suggested “another [$]1 billion to public utility infrastructure and public communications.” The commenter wrote that the rest of the funding could be used for “paying out and making individuals with losses whole and covering gaps missed in my proposed comments above.”

FEMA Response:

FEMA is authorized under the Act to pay claimants for actual compensatory damages for injuries resulting from the Fire.

FEMA does not have the authority under the Act to establish the type of funding system recommended by the commenter as claimants must submit claims demonstrating their injuries resulting from the Fire to obtain compensation. FEMA further did not receive sufficient funding under the Act to implement the payment plan proposed by the commenter. FEMA notes that the Act at section 104((h)(4) provides that the value of compensation provided under the Act “shall not be considered income or resources for any purpose under any Federal, State, or local laws, including laws relating to taxation . . .” FEMA cannot advise individual claimants on their individual tax obligations, however, and encourages claimants to consult with their tax advisers if they have questions related to tax obligations.

See

Sections 102(b) and 104(c) of the Act.

Comment:

A commenter asked whether the funding provided under the Act covered the costs for the matching funds requirement waiver in section 104(k) of the Act or if the funding under the Act was exclusively reserved for claims.

FEMA Response:

The Act does not authorize FEMA to utilize the funds appropriated to cover the matching funds requirement waiver in section 104(k). These additional matching funds to meet the 100 percent cost share will have to be provided from the funding provided for those programs generally, not the funding provided by the Act.

Comment:

Commenters suggested ways in which the funding appropriated under the Act should not be used. Commenters suggested administrative costs be paid out of a separate budget rather than the appropriated funding. One commenter suggested administrative costs should be paid for out of a separate FEMA budget.

FEMA Response:

As explained above, section 104(a)(2)(C)(i) requires FEMA to use the funding made available under the Act to fund the Claims Office. FEMA is required to follow the Act's requirement to fund the Claims Office from the Act's funding.

Comment:

One commenter requested FEMA Claims Reviewers tour the entire burn scar area and not to use the funding appropriated for that tour.

FEMA Response:

FEMA appreciates the request, the value placed in seeing the devastation resulting from the Fire first-hand, and the need for Claims Office staff to fully comprehend the extent of injuries suffered. FEMA plans to provide training to all Claims Office staff that will include extensive background information on the Fire and its impacts. FEMA believes that Claims Reviewers should be aware of the devastation to help comprehend the losses and spend their time focused on assisting claimants with their claims, not taking tours of the entire burn scar area.

Comment:

Commenters stated the funding appropriated was not sufficient to fully compensate claimants. One commenter suggested the total $3.9 billion appropriated will not cover the cost of recovery from the level of destruction caused by the Fire. This commenter stated more destruction was guaranteed from the Fire and argued it would be worse if people rebuilt in the wrong places before the land stability is restored. Other commenters agreed that the amount appropriated was not sufficient to cover the damages and one of those commenters stated that the lack of sufficient funding would result in denying people compensation.

FEMA Response:

The Act and subsequent legislation appropriated $3.95 billion in funding. FEMA is obligated to provide quarterly reports to Congress on the use of funds under the Act and these reports ensure transparency of the use of funds and the sufficiency of funding under the Act.

Comment:

To combat fraud, one commenter recommended FEMA review fire-affected county audits performed by the New Mexico State Attorney General's Office to anticipate where and how acts of fraud will occur. Another commenter stated in their comment the New Mexico State Auditor performs these audits, providing links to recent reports.

FEMA Response:

FEMA appreciates the concerns regarding potential fraud and is incorporating fraud awareness and detection training into the comprehensive training provided to all Claims Office staff. FEMA notes that Congress provided appropriations for the Department of Homeland Security's Office of the Inspector General for oversight of activities authorized by the Act.

See

Public Law 117-180, Division A, Section 136 (2022).

Comment:

A commenter stated that insurance companies would demand compensation for the amounts they have paid or will pay to insured claimants.

FEMA Response:

Insurance companies are eligible for compensation as injured persons under the Act. Section 104(d)(1)(A)(ii) of the Act requires FEMA to place priority on claims submitted by injured parties that are not insurance companies seeking payment as subrogees. Section 296.13 of the IFR requires subrogees to file their Notice of Loss after they have made all payments entitled to the injured person for Fire-related injuries under the terms of the insurance policy. As explained below, FEMA is amending § 296.13 in the Final Rule to add language from the Act specifically to clarify the claims prioritization required. Further, § 296.21(f) of the regulation requires FEMA to compensate injured persons only for damages not paid and that will not be paid by insurance companies. As explained above, these provisions, in addition to the changes made to § 296.13 in this Final Rule, will help ensure that the compensation is first made available to injured persons that are not insurance companies.

Comment:

Finally, commenters suggested other funds outside of those appropriated be used to pay for compensation under the Act. One commenter stated that FEMA “not use taxpayer dollars to compensate victims, but instead seize the assets of the oil and gas companies whose industry has created global warming and red flag conditions all over the country and use those assets to compensate victims.” One commenter suggested those responsible for causing the Fire should donate their retirement funds to those impacted by the Fire.

FEMA Response:

Congress appropriated $3.95 billion for implementation of the Act and FEMA is required to use that appropriated funding to implement the Act and pay claimants actual compensatory damages for injuries resulting from the Fire.

4. Comments on § 296.5 Overview of the Claims Process

Comment:

One commenter suggested FEMA set up remote assistance given COVID, RSV, and influenza infection concerns. Another commenter stated that claimants should be allowed to meet remotely with claims reviewers as it was unreasonable for FEMA to expect victims to travel long distances. One commenter suggested FEMA set up mobile claim offices in southwest Colfax County and south Taos County. One commenter stated that “60 to 70 percent of the people up in Mora [County] are Hispanic and a lot of people don't even have access to computers.” The commenter suggested FEMA “try to get somebody who can speak Spanish to go with these people because that's what we need.” Commenters also suggested FEMA get out into the community as part of the claims process and outreach to the community.

FEMA Response:

FEMA plans to offer opportunities for one-on-one engagement through Claims Reviewers who will work to engage claimants in ways to meet their needs whether in person or via remote technology. Claims Office Navigators are trained to accommodate the needs of claimants and are prepared to meet them in the satellite Claims Offices in Las Vegas, Mora, and Santa Fe, New Mexico at claimants' homes or offices, or any place convenient to claimants, taking into account health and safety concerns. Note that FEMA will provide services both at set office locations for the Claims Office, as well as pop-up offices that will rotate through communities and locations in the affected area, to reduce travel burdens on claimants. The pop-up offices will be staffed by Claims Navigators, who can assist claimants in completing and submitting Notices of Loss, providing claims updates, and answering general questions. FEMA recognizes the importance of having claims staff, who interact with claimants and help facilitate the claims process, that are able to speak both Spanish and English. FEMA locally hired bilingual speakers to ensure that claims staff can communicate with claimants in their preferred language.

Comment:

Several commenters wrote that attorneys should be notified during the process when claimants are represented by counsel.

FEMA Response:

With an appropriate Privacy Act waiver, FEMA will ensure contact is made with both claimants and their attorneys. The Claims Office has included consent language necessary to comply with the Privacy Act in the standard Notice of Loss form. The

consent is needed for an attorney or other third-party representative to have access to a claimant's privacy information maintained in the Claims Office system of records. In addition to providing basic information about the claimant and representative, the claimant must sign the consent section if they choose to be represented by a third party.

Comment:

One commenter wrote that information on claim status and timeline to receive payment should also be easily accessible at the claimant level. Two commenters suggested FEMA provide an online method of checking the status of their claim and hard copies of documents for those claimants without internet access.

FEMA Response:

FEMA is currently developing an online claims system that will provide claimants with real time access to claim status in addition to providing status information by phone or mail (electronic and/or physical). FEMA anticipates this system will be rolled out in the near future and will provide outreach to the community when the system is available for use to help claimants understand and utilize the system.

Comment:

One commenter asked that State Case Managers be integrated into the program and trained as Navigators to serve as a single point of contact to help claimants throughout the process.

FEMA Response:

As explained above, FEMA anticipates that Claims Navigators will provide the assistance envisioned by the commenter and additional staffing outside of the Claims Office will not be required. In the event a claimant has unmet needs or otherwise requests a Disaster Case Manager, the standard Notice of Loss form includes a section for the claimant to consent to sharing claim data maintained in the system of record with Disaster Case Managers.

Comment:

Several commenters suggested that FEMA streamline the claims process. One method for streamlining the process suggested by commenters related to access to available Federal programs. Commenters suggested that FEMA streamline access to available Federal programs and, in addition to funds appropriated under the Act, to utilize other Federal funding opportunities when and where available.

FEMA Response:

FEMA agrees with this suggestion and is coordinating with other Federal agencies to ensure data sharing and better communication between programs. FEMA has engaged with and continues to engage with the Small Business Administration, the Department of Agriculture, and other Federal agencies to help facilitate coordination of the assistance available to claimants and the impacted communities. Consistent with the Act's requirements in section 104(g), FEMA is consulting with other Federal agencies, and State, local, and Tribal authorities to ensure the efficient administration of the claims process and provide for local concerns. To preserve funding from the Hermit's Peak/Calf Canyon appropriations to pay eligible claims, FEMA requires applicants eligible for FEMA's Public Assistance program to exhaust available public assistance funds before seeking compensation from the Claims Office.

Comment:

Another suggestion involved preparing formulas for compensation. One commenter asked how FEMA would compensate claimants for a variety of damages and requested transparency and a formula that should be shared with claimants. Another commenter suggested that FEMA move forward with developing estimates to help reduce the wait for compensation. One commenter asked how claims would be made equitable and if there would be standard reimbursement rates for similar claims. Two commenters suggested monetary thresholds be established to ensure time and effort are proportionate to the claim values being made. As one of the commenters explained, there are thresholds throughout many other Federal programs where the burden of proof is significantly less based on the overall claim value. Another commenter, however, stated that “no two claims will be alike, and the process cannot be developed or allowed to become an assembly line approach.”

FEMA Response:

FEMA recognizes the need for an efficient, streamlined process through the use of a damage calculation formula, while also balancing the unique types of claims being presented under the Act and ensuring claimants are paid actual compensatory damage as required by the Act. FEMA anticipates developing some damage calculation formulas, such as providing for a certain dollar amount of compensation per acre of land damaged, so that claimants have the option to leverage one of those formulas or present their individual claim and request for specific damage amounts. FEMA believes this optionality will best balance the need for an efficient process with the individual needs of claimants, as claimants will be able to make the choice in presenting their claim for compensation.

5. Comments on § 296.10 Filing a Claim Under the Act

Comment:

One commenter suggested FEMA allow claimants to file a Notice of Loss in person consistent with the IFR. Another commenter stated that FEMA should allow claimants to file claims in person, as well as via mail, email, and a web-based portal system to ensure accessibility. A commenter suggested FEMA allow for applications, correspondence, and supporting documentation to be exchanged by postal mail. This commenter also recommended FEMA create centralized locations where northern New Mexicans can physically go to access the electronic application and receive assistance in filling out the applications in multiple languages so that the application and supporting documentation can be submitted in a timely manner.

FEMA Response:

FEMA appreciates these suggestions. FEMA does not believe changes to the Final Rule are necessary to implement these suggestions, but rather that as the Claims Office continues to expand operations, the information would be made available to the public via

https://www.fema.gov/hermits-peak

and other resources including direct community outreach. FEMA is currently accepting Notice of Loss forms in person at the claim's office locations in Santa Fe, Mora, and Las Vegas, New Mexico and those office addresses can be found at

https://www.fema.gov/hermits-peak

. FEMA will provide services both at set office locations for the Claims Offices, as well as pop-up offices that will rotate through communities and locations in the affected area, to reduce travel burdens on claimants. The pop-up offices will be staffed by Claims Navigators, who can assist claimants in completing and submitting Notices of Loss, providing claims updates, and answering general questions.

6. Comments on § 296.11 Deadlines

Comment:

Several comments were received regarding the two-year deadline for filing a claim detailed in § 296.11 of the IFR, with most commenters stating that a two-year period to file a claim was insufficient. Commenters suggested extending the deadline based on an inability to determine damages because of the current inability to access their property, the potential for future impacts from flooding, and/or the long-term health and environmental effects given the size and scope of the Fire. A commenter suggested extending the deadline to three years for mitigation

efforts. Some commenters asked FEMA to be flexible in granting extensions. One commenter asked that extensions be granted in cases where knowledge of damages, recovery efforts, etc. are hindered by cooperation with government agencies.

FEMA Response:

Some deadlines in the rule are beyond FEMA's control. Section 104(b) of the Act requires claimants submit their Notice of Loss no later than November 14, 2024, two years from the date the IFR was promulgated. FEMA was required by the Act to publish the IFR within 45 days of the Act's passage and the IFR was published 45 days after the Act's passage.

FEMA has built in extensions of the claim processing timeline after receipt of the Notice of Loss for good cause, recognizing the realities of the Fire's impact. Sections 296.34 and 296.35 establish a process for notifying FEMA of injuries that are not referenced in the initial Notice of Loss. Whether a claimant tells FEMA about an injury in the initial Notice of Loss or an amendment under § 296.34, FEMA must know about the injury by November 14, 2024. For heightened risk reduction efforts, a claimant must include the claim in their Notice of Loss by November 14, 2024, or an amended Notice of Loss filed no later than November 14, 2025.

See

§ 296.21(e)(5).

87 FR 68085 (Nov. 14, 2023).

Comment:

One commenter indicated the two-year period did not end on November 14, 2024, because the Final Rule had not been promulgated and it would not be promulgated until 60 days after filing in the

Federal Register

FEMA Response:

FEMA disagrees with this characterization of the two-year period and rule promulgation. Specifically, Section 104(f)(1) of the Act requires FEMA to “promulgate and publish in the

Federal Register

interim final regulations for the processing and payment of claims under this Act.” Publication of an IFR constitutes promulgation of a rule, as the rule was effective upon publication, and comments were requested post-promulgation. This sequence of events, publication of the interim final rule, followed by a public comment period, occurred here. Consistent with the Act's purpose at section 102(b), the immediate effective date of the rule ensures FEMA was able to begin accepting and processing claims on the date of publication.

7. Comments on § 296.12 Election of Remedies

Comment:

Commenters sought clarifications about how the election of remedies worked. One commenter asked what would happen if the claimant did not accept the final determination by the Claims Office. Another commenter asked if people did not want to go through FEMA, whether they could sue and if there were multiple owners of a single property whether some could go through FEMA and also sue.

FEMA Response:

As explained in the IFR's preamble, the Act provides that an injured person who accepts an award under the Act waives the right to pursue any claims arising out of or relating to the same subject matter under the Federal Tort Claims Act (FTCA) or a civil lawsuit. Similarly, those claimants who accept an award under the FTCA or a civil lawsuit waive the right to pursue claims under the Act. Until the final award payment is accepted, the claimant may pursue any and/or all of the options available. This flexibility allows injured persons to pursue different avenues of compensation until a final award is accepted. The IFR language states that an injured person who accepts

an award

under the Act or through a FTCA or civil action waives their right to pursue all claims for injuries arising out of or related to the same subject matter. To ensure this is clear in the Final Rule, FEMA is revising paragraphs § 296.12(a) and (b) to clarify that the injured person only waives the right to pursue all claims upon acceptance of a

final

award through the Act, the FTCA, or through a civil action.

Comment:

A commenter stated that a claimant's right to civil action or other redress should not be waived or limited until a final payment has been agreed upon with FEMA, and that it must be clear to claimants at what point(s) in the process they are waiving their rights to further legal action, as well as how they can retain their right to further legal action for different types of subject matter. Another commenter agreed and recommended FEMA clarify that the waiver of the right to pursue claims under the FTCA or a civil action only applies to final awards, and when the claimant has signed a Release and Certification Form.

FEMA Response:

FEMA agrees and as explained above, is revising § 296.12(a) and (b) in the Final Rule to clarify that the injured person only waives the right to pursue all claims upon acceptance of a final award.

Comment:

One commenter wrote on the feasibility of waiving future claims given the extent of damages, losses, and expenses may not be fully known at the time of the award. The commenter suggested a lump sum payment of 15 percent of all injury, damages, losses, and expenses be added to each claim to cover these future unknown items.

FEMA Response:

FEMA understands the concerns with waiving rights to pursue further claims after accepting a final award. The Act at section 104(b) requires claims to be submitted within two years and requires a waiver of rights to pursue further claims upon acceptance of a final award. Claims related to future losses as a result of the Fire would need to be made through other remedies as the Act sets a two-year limitation for claims under the Act. FEMA is unable to pay lump sum payments to cover future unknown injuries, as unknown injuries are speculative in nature and the Act requires FEMA to pay for actual compensatory damages.

Comment:

Commenters stated the Federal government committed crimes and that the Act did not preclude criminal charges. These commenters recommended allowing claimants the ability to apply for crime victim compensation.

FEMA Response:

As explained above, the Act sets forth means for claimants to seek compensation for injuries suffered as a result of the Fire. Section 104(h) of the Act offers claimants three options to seek compensation from the Federal government for injuries resulting from the Fire: (1) a claim under the Act; (2) a FTCA claim or civil action; or (3) an authorized civil action under any other provision of law. The Act does not expand the scope of the FTCA or other civil actions under any other provision of law. The Act does not provide for criminal prosecution or other remedies. The Act also does not provide for crime victim compensation. Rather, section 104(c)(3) of the Act provides for payment of actual compensatory damages. FEMA is not authorized under the Act to pay additional compensation beyond actual compensatory damages.

Comment:

One commenter stated the Federal government “should not be allowed to dictate limits on compensation to victims they violated. The victims should be allowed to state what will make them individually whole and what will be required for their healing for the next several years, or however long it takes, to recover from the offending actions as only the victim will know what that is and what it will take for them to heal.” The commenter further stated that claimants should not be required to use other Federal programs.

FEMA Response:

As explained above, Section 104(h) of the Act offers claimants three options to seek compensation from the Federal government for injuries resulting from

the Fire: (1) a claim under the Act; (2) a FTCA claim or civil action; or (3) an authorized civil action under any other provision of law. Claimants may choose among these remedies to address their personal circumstances and needs, taking into account timely resolution and costs of each option. Only upon acceptance of a final compensation award under one of these options will claimants release the Federal government from further claims arising out of or relating to the same subject matter. The Act further requires in section 104(d)(1)(B) that FEMA make determinations as to whether the claimant is an injured person under the Act; the injury resulted from the Fire, whether the claimant is otherwise eligible to receive payment, whether sufficient funds are available for payment, and the amount to be allowed and paid under the Act. The Act only authorizes FEMA to make these determinations and sets the framework for how FEMA must make them. The Act does not authorize FEMA to honor and accept all requests for compensation.

8. Comments on § 296.13 Subrogation

Comment:

Three commenters suggested FEMA delete references to insurance companies in the regulation. One commenter stated that insurance companies will demand compensation for the amounts they have paid or will pay to insured claimants and found that to be fair. However, the commenter stated that greed may influence the insurers' claims and those claims would then negatively affect claimant compensation. Two other commenters stated that this section should be revised to reflect the Act's prioritization of injured persons over subrogees.

FEMA Response:

As explained above, insurance companies are injured persons under the Act. FEMA does not believe it is appropriate to delete references to insurance companies in the regulation, as the Act's references to them requires FEMA to discuss them in the regulation. Section 104(d)(1)(A)(ii) requires FEMA to place priority on claims submitted by injured parties that are not insurance companies seeking payment as subrogees. Section 296.13 of the IFR requires subrogees to file their Notice of Loss after they have made all payments entitled to the injured person for Fire-related injuries under the terms of the insurance policy. The IFR does not, however, include the prioritization language from the Act. Given the confusion and concerns with this section, FEMA is amending § 296.13 to specifically clarify the prioritization required under the Act in the Final Rule by requiring that subrogation claims from insurance companies will be paid only after paying claims submitted by injured persons that are not insurance companies seeking payment as subrogees.

9. Comments on § 296.14 Assignments

Comment:

Several commenters stated that assignment of rights could not be prohibited. Commenters stated that New Mexico law allowed for assignment of rights. A commenter stated that “New Mexico law allows lawyers to recover their fees by way of liens, and FEMA regulations should not seek to interfere with the lawyer and client relationship nor with the ability of the claimant's lawyer to recover their fee.” The commenter also wrote that the FTCA has no prohibition on assignments.

FEMA Response:

FEMA disagrees that the assignment of rights cannot be prohibited. Federal law generally prohibits assignment of claims against the Federal government. The Assignment of Claims Act prohibits the assignment of a claim against the Federal government unless the claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued.

The Assignment of Claims Act requires that the assignment must specify the warrant and the assignment must be made freely and attested to by two witnesses.

The person making the assignment must acknowledge it before an official who may acknowledge a deed, that official must certify the assignment, and the certificate issued by the official must state that the official explained the assignment when it was acknowledged.

Thus, FEMA can only allow for an assignment of a claim after the Authorized Official's Determination has been issued and accepted by the claimant and the claimant has completed the other steps in the process required under the Federal law to have the assignment reference FEMA's award determination. The process includes being attested to by two witnesses and acknowledged by an official who will certify the assignment and their explanation of the assignment to the claimant. This extensive process is contrary to the authorizing Act's purpose and the requirements placed on FEMA by the Act to compensate victims of the Fire and expeditiously settle claims for those injured. Prohibiting assignment of claims under the Act is consistent with the purpose of the Act and other Federal law. The Final Rule will not include amendments to the assignment of rights. FEMA notes that assignments are generally not allowed under the Federal Tort Claims Act.

Also, to the extent that a lien does not involve an assignment, it is a question of State law to be resolved between the lien holder and the claimant.

31 U.S.C. 3727(b).

Id.

See United States

Shannon,

342 U.S. 288 (1952).

Comment:

Three commenters suggested that assignment be allowed in instances of death, with one other commenter also requesting a process by which compensation can be provided to surviving heirs if a claimant passes away. These commenters stated that if the claim is legitimate, the owner's right to assign for a variety of reasons should not be limited. Another commenter suggested provisions be made for dependent family members and property co-owners to receive full compensation in situations where a claimant dies.

FEMA Response:

Claimants who pass away during the claims process can continue to pursue claims through their surviving heirs under applicable New Mexico estate law.

An assignment of rights is not required for surviving heirs to pursue a claim under the Act. FEMA notes that some claimants may wish to have family members pursue the claim on their behalf and some commenters during public meetings stated they were pursuing claims on behalf of relatives. The current regulatory text allows a claimant to authorize a relative or other third party to have access to claims information and to represent them on the claim by executing the appropriate section in the Notice of Loss. The authority to represent a claimant does not require an assignment of benefits.

See

Uniform Probate Code, Chapter 45, New Mexico Statutes Annotated (2021).

Comment:

A commenter stated FEMA did not have the authority under the Act or New Mexico law to restrict assignment of property, stating claimants should have the right to sell their property and the new property owner should be able to recover damages to the property as well as family assignment in case of death. Another commenter requested that they be able to assign their claim if they want to sell their property or have someone inherit their claim.

FEMA Response:

FEMA disagrees that the assignment of rights cannot be prohibited. As explained above, Federal law generally prohibits assignment of claims against the Federal government.

The extensive process required to assign claims against the

Federal government is contrary to the authorizing Act's purpose and the requirements placed on FEMA by the Act to compensate victims of the Fire and expeditiously settle claims for those injured. Prohibiting assignment of claims under the Act is consistent with the purpose of the Act and other Federal law and is not amending the Final Rule. The Final Rule will not include amendments to the assignment of rights.

31 U.S.C. 3727(b).

Comment:

One commenter said that claimants should have the ability to assign rights to family members or friends but stated “assignment of rights cannot be to the detriment of the individual signing it away or to the benefit of the person who is trying to get it.” This commenter further stated that they “want to see representation for people who need it but not necessarily assign the rights over.”

FEMA Response:

FEMA appreciates the commenter's concerns and believes that assigning rights in the context of a claim under the Act could result in unscrupulous activity. The extensive process required by the Assignment of Claims Act to assign a claim against the Federal government was put in place for several reasons, one of which was to reduce concerns about predatory assignments.

FEMA seeks to avoid situations where predatory assignments could occur. Consistent with Federal law and the reasons stated above, FEMA is not amending the Final Rule.

See generally Spofford

Kirk,

97 U.S. 484, 489 (1878) “the question remains, whether the act of Congress was not intended to render all claims against the government inalienable alike in law and in equity, for every purpose, and between all parties. The intention of Congress must be discovered in the act itself. It was entitled `An Act to prevent frauds upon the treasury of the United States.' It may be assumed, therefore, that such was its purpose. What the frauds were against which it was intended to set up a guard, and how they might be perpetrated, nothing in the statute informs us. We can only infer from its provisions what the frauds and mischiefs had been, or were apprehended, which led to its enactment.”

Comment:

A commenter wrote that FEMA should modify this section to allow the State of New Mexico to file a claim on behalf of residents solely for private property debris removal work not eligible for Category A/B reimbursements under the Public Assistance Program. Another commenter wrote of a shortage of available contract resources impacting the cost and timing of rebuilding efforts and recommending FEMA allow individuals to permit State agencies to act on their behalf to address debris removal and damage through a opt in assignment. Other commenters stated concerns with the effective use of funds for debris removal generally.

FEMA Response:

FEMA recognizes the challenges presented with debris removal on private property and the concerns with ensuring funding is effectively utilized under the Act. Under the Act, the Claims Office is authorized to compensate injured persons for their injuries resulting from the Fire. The Office recognizes that due to the timing of debris removal, as well as other elements of a claim, a claimant may require funds quickly and is prepared to make partial payments to claimants for severable elements of a claim, including debris removal, allowing claimants to choose who clears the debris.

F. Comments on § 296.21(a) Allowable Damages

1. Comments on Allowable Damages Generally

Comment:

Several commenters suggested FEMA cover specific types of damages and detail them further in the regulation. Commenters frequently requested that the claims process “make them whole.” One commenter often recited specific types of damages for which FEMA should be prepared to compensate (to make whole) to include those damages they considered to be “immeasurable” or “unseen.” One commenter stated that “FEMA must compensate injured victims for immediately measurable losses (

i.e.

destroyed homes, buildings and their contents, property infrastructures, forestland resources, croplands and crops, and domestic water conveyances and storage facilities, etc.) and for intangible losses as well (

i.e.

destroyed sentimental items which can never be replaced, mental and emotional tolls regardless of the extent of professional treatment received, and future potential value of everything damaged and lost).” One commenter stated that, in addition to damage caused as a result of the Fire, “there is more damage continuing to happen to injured victims each day on a level which cannot be seen, measured, or described by any metric” and further that the Act's “reconciliations should go far beyond mere recovery to day-before-the-fire life conditions for every injured victim because the damage runs far deeper and much wider than what actually burned in the fire. It has severely, irreversibly damaged injured victims' souls, and they deserve to be compensated for that too.”

FEMA Response:

FEMA recognizes the significant injuries suffered by claimants and the long-term recovery needed for the communities impacted by the Fire. The Act at section 104(c)(3)(A) limits payment to “actual compensatory damages measured by injuries suffered.” Section 104(d)(4) of the Act limits allowable damages to uncompensated damages for loss of property, business loss, and financial loss; and therefore, limits the actual compensatory damages FEMA may provide to economic damages. This limitation of the Act with respect to allowable damages excludes non-economic damages such as pain and suffering. FEMA recognizes that making people whole for the full scope of loss after a devastating fire may not be possible. The Act authorizes payment of damages, and money cannot restore the full array of the human experience. Section 296.21(e)(3) does authorize payment for out-of-pocket mental health treatment expenses, which can help alleviate the emotional suffering and enable affected individuals to recover. Where New Mexico law allows pain and suffering and non-economic damages in limited circumstances primarily involving personal injuries, a claimant that suffered personal injury may choose to pursue a judicial remedy against the United States Forest Service under the Federal Tort Claims Act or other civil law. The Act provides the claimant with considerable flexibility and allows the claimant to opt out of the Claims Office option and into litigation at any time up until acceptance of a final offer.

2. Comments on Non-Economic Damages

Several commenters wrote that non-economic damages must be considered allowable damages.

Comment:

One commenter wrote that claimants were entitled to claims for nuisance and trespass for fire damage to their property under New Mexico law. Another commenter expanded on the nuisance theory stating “A wildfire likely qualifies [as] a private or mixed public/private nuisance, and therefore is actionable either way, at least for those who suffered damage to their real or personal property. Noneconomic damages are recoverable for a nuisance claim for `annoyance, discomfort, and inconvenience.' Notably, a plaintiff need not prove economic damages (

e.g.,

a diminution in property value) to recover damages for `annoyance, discomfort, and inconvenience.' ”

FEMA Response:

The Act does not authorize FEMA to provide non-economic damages for nuisance and trespass.

Comment:

A different commenter also noted the potential trespass claim, writing “A defendant commits common-law trespass in New Mexico by redirecting a foreign substance onto the plaintiff's property. . . . Under this

reasoning a wildfire that spreads onto a plaintiff's property would also constitute a trespass. Although a plaintiff may recover damages for `annoyance, discomfort, and inconvenience' caused by a private nuisance, there is no New Mexico authority expressly allowing similar damages on trespass claims. That said, many jurisdictions allow damages for annoyance, discomfort, and distress proximately caused by a trespass. Some of these distinguish between those damages and emotional distress, while others appear to conflate the two. New Mexico would likely strictly limit recovery to `annoyance, discomfort, and distress' and not allow true emotional-distress damages.”

FEMA Response:

The Act does not provide for non-economic damages for nuisance and trespass.

Comment:

Several commenters stated emotional distress, disturbance, annoyance, and other non-economic losses for those with real and/or personal property losses from the Fire regardless of whether or not the claimant suffered a physical injury as well as those same losses for those claimants who suffered a reasonable fear of death or serious bodily injury as a result of their proximity to the zone of fire danger, regardless of whether the claimant suffered a physical injury should be compensated.

FEMA Response:

The Act does not provide for non-economic damages for emotional distress, disturbance, and annoyance.

Comment:

Three commenters supported the expansion of allowable damages to include non-economic damages, including loss of enjoyment, loss of lifestyle, as well as mental and emotional distress, sentimental losses, and disturbance and annoyance damages. These commenters stated that these losses may be greater and more important than the financial loss.

FEMA Response:

The Act does not authorize FEMA to provide non-economic damages for loss of enjoyment, loss of lifestyle, mental and emotional distress, sentimental losses, or disturbance and enjoyment.,

3. Comments on Emotional Distress/Mental Health Damages

Some commenters stated the specific non-economic damages for which they suggested compensation should be available under the Act.

Comment:

One commenter wrote suggesting claimants could assert a claim for intentional infliction of emotional distress, stating “those individuals who were within the fire's zone of danger and had a reasonable, objective fear of death or serious bodily injury should be able to recover non-economic, emotional distress damages as well . . . Emotional distress is available under New Mexico law when there is a physical injury . . . These victims suffered smoke inhalation, which is a physical injury, and thereby makes them eligible for emotional distress damages under New Mexico law.”

FEMA Response:

The Act does not authorize FEMA to provide non-economic damages for intentional infliction of emotional distress.

Comment:

A commenter wrote that New Mexico law recognizes claims for both negligent and intentional infliction of emotional distress. The commenter discussed negligent infliction of emotional distress and intentional infliction of emotional distress, stating that claimants may be able to allege an intentional infliction of emotional distress claim by “showing the defendant's conduct was reckless and outrageous enough to warrant liability.” The commenter further noted that claimants prevailing on either claim for infliction of emotional distress would be entitled to damages for “physical pain, nervousness, grief, anxiety, worry, and shock.” The commenter added that the Federal government had a special relationship with claimants given their responsibility for the control of the forests and had neglected that special relationship, ignored its own regulations, and caused much emotional distress.

FEMA Response:

The Act does not authorize FEMA to provide non-economic damages for negligent and intentional infliction of emotional distress.

Comment:

One commenter stated that the FTCA includes damages for emotional distress and that New Mexico law also provided the authority to award emotional distress damages. The commenter also stated that disturbance and annoyance damages for the interference of real property, which are non-economic damages, are recoverable. The commenter also cited to

Castillo

City of Las Vegas

as another source for recoverable non-economic damages including emotional or sentimental damages.

145 N.M. 205 (2008).

FEMA Response:

The Act does not authorize FEMA to provide non-economic damages for emotional distress If a claimant believes they are eligible for non-economic damages under New Mexico law and the Federal Tort Claims Act, they may choose to file a civil claim against the United States Forest Service in Federal court. They may file suit at any time prior to acceptance of a final determination.

Comment:

One commenter stated that FEMA should provide reimbursement for the physical, the mental, and the emotional stress caused by the Fire and referenced the Camp Fire in California as an example of where these types of damages were paid.

FEMA Response:

The Act does not authorize FEMA to provide non-economic damages for physical, mental, and emotional distress. The Camp Fire claims were adjudicated applying California law, which differs significantly from the Hermit's Peak/Calf Canyon Fire Assistance Act. The Camp Fire claims also involved claims asserted in a bankruptcy proceeding against a private company, not the Federal government.

4. Comments on Other Damages

Commenters also raised compensation for future work and loss of opportunity, future potential land use plans, sentimental value, and loss of wildlife.

Comment:

One commenter asked how claimants would be compensated for the conservation practices of the area, including grazing and thinning out dense forest lands and making habitat for wildlife. The commenter also asked how claimants would be compensated for future work and loss of opportunity for those conservation practices.

FEMA Response:

Congress established the Claims Office to provide actual compensatory damages to injured persons that suffered injury resulting from the Fire. To the extent that individual claimants establish injury from the Fire, the Claims Office will work with them to identify appropriate measures of damage. The Claims Office is prepared to work with claimants to identify and hire experts to assist in valuing complex or unusual claims. Under the Act, other Federal agencies with particular expertise also can be engaged to assist.

Comment:

Another commenter wrote suggesting FEMA consider future land use plans to properly compensate claimants, detailing their own plans for development of their property impacted by the Fire.

FEMA Response:

Under the Act, the Claims Office provides provide actual compensatory damages to injured persons that suffered injury resulting from the Fire. Some claims may be too speculative to be eligible for tort compensation under applicable law, but all potential claimants are encouraged to submit a Notice of Loss to enable the Claims Office to evaluate individual claims.

Comment:

One commenter wrote that New Mexico law allows recovery of sentimental value for personal and real property and stated that victims are not made whole unless they recover both the economic value of contents, structures, and trees, plus their sentimental value.

FEMA Response:

Under the Act, the Claims Office provides provide actual compensatory damages to injured persons that suffered injury resulting from the Fire, but not for non-economic damages. All potential claimants are encouraged to submit a Notice of Loss to enable the Claims Office to evaluate individual claims. The Office will work with claimants to identify eligible economic losses and to properly value claims. FEMA does not believe changes to the regulatory text are required in the Final Rule for claimants to seek this type of compensation if they can demonstrate the loss and that the loss resulted from the Fire.

In addition to specific damages, commenters suggested FEMA provide compensation for specific reimbursements associated with damages.

Comment:

Two commenters suggested FEMA compensate for property taxes, either to the local government or individual property owners. One of these commenters suggested property taxes be addressed by the New Mexico legislature, as it was for the Cerro Grande Fire, and that Federal funds should pay State and local governments the difference in property tax funds.

FEMA Response:

Under the Act, the Claims Office provides actual compensatory damages to injured persons that suffered injury resulting from the fire. All potential claimants are encouraged to submit a Notice of Loss to enable the Claims Office to evaluate individual claims. The Office will work with claimants to identify eligible economic losses and to properly value claims. FEMA does not believe changes to the regulatory text are required in the Final Rule for claimants to seek this type of compensation if they can demonstrate the loss and that the loss resulted from the Fire.

Comment:

One commenter suggested FEMA pay for indirect damage, including damages resulting from mandatory evacuation, burn scar flooding, and contractor damages.

FEMA Response:

To the extent that damage resulted from the Fire, damages are compensable under the regulation as written. Specifically mandatory evacuation expenses and burn scar flooding can be compensable if resulting from the Fire. Contractor damages may not be compensable, but the Claims Office encourages claimants to submit all possible losses to be evaluated. As previously explained, the regulation provides types of actual compensatory damages that are compensable under the Act, but that list is not all-inclusive. Claimants seeking compensation for actual compensatory damages not specifically listed in the regulation can still submit a claim for compensation under the Act.

Comment:

Other commenters suggested that FEMA provide air and water quality testing/monitoring.

FEMA Response:

FEMA understands the concerns regarding water and air quality and the need for testing and monitoring. These types of expenses might be compensable as expert opinion expenses under § 296.31(a) or as part of the lump sum incidental expenses for claims expenses reimbursement under § 296.31(b).

Comment:

Two commenters suggested funding to address economic development as the population (per capita) had decreased since the Fire, as either business and/or financial loss under the Act.

FEMA Response:

Economic development can be speculative and a claimant seeking compensatory damages for loss of economic development would need to be able to demonstrate such loss and that such loss was a result of the Fire. As explained above, the regulation provides types of actual compensatory damages that are compensable under the Act, but that list is not all-inclusive. Claimants seeking compensation for actual compensatory damages not specifically listed in the regulation should still submit a claim for compensation under the Act. For this type of claim, claimants can work with their Claims Navigator and Claims Reviewer to demonstrate that such damages would be considered actual compensatory damages for injuries resulting from the Fire consistent with the Act. FEMA does not believe changes to the regulatory text are required in the Final Rule for claimants to seek this type of compensation if they can demonstrate the loss and that the loss resulted from the Fire.

Comment:

One commenter suggested an additional amount be awarded where the claimant dies to compensate for the further injury inflicted as a result of delays in compensation.

FEMA Response:

FEMA disagrees with this commenter. This proposed claim would not be for actual compensatory damages for injuries resulting from the Fire and is not authorized.

5. Comments on Flood Damages

Comment:

One commenter suggested FEMA add flood damage to § 296.21(a) writing that it was “illogical to provide compensation for flood insurance as a financial loss in § 296.21(e)(2) but not for flood damage.” A different commenter stated that claimants face risks of further injury from flooding, landslide/mudslide, and debris flow and that full cooperation from owners of all affected property parcels located upstream and upslope was essential to recovery. The commenter requested FEMA acknowledge, address, and compensate for those long-term risks.

FEMA Response:

FEMA is revising the purpose of the regulation in § 296.1 to incorporate language to address this issue. By changing the current regulatory text addressing the compensable injuries from “suffered from” to “resulting from” the Fire, this change addresses the commenters' concerns with whether flood damage is an allowable damage. Further, the definition of “injured person” includes injuries “resulting from the Hermit's Peak/Calf Canyon Fire” and is broad enough to encompass flooding as well as other types of injuries that may be considered to be resulting from the Fire.

6. Comments on Personal Injury Damages

Comment:

Commenters suggested that FEMA clarify that personal injury is an allowable damage.

FEMA Response:

Section 296.21(a) allows for payment of actual compensatory damages for injury and “injury” is defined in § 296.4 to include personal injury. All potential claimants are encouraged to submit a Notice of Loss to enable the Claims Office to evaluate individual claims. The Claims Office will work with claimants to identify eligible economic losses, which could include compensation for economic losses associated with personal injury such as medical bills, on-going therapy, and the like and to properly value claims.

Comment:

One commenter suggested that FEMA provide compensation for health issues for residents and animals affected by compromised water and air quality issues.

FEMA Response:

FEMA agrees these types of damages are generally compensable under the Act as personal injury damages and damage to property. These health issues, if resulting from the Fire, could be considered injuries under the Act's definition and compensable as such.

7. Comments on Calculation of Damages

Comment:

One commenter noted that the legal precedent in New Mexico does not require claimants to adhere to a strict formula to calculate damages. Another commenter agreed, citing to

Maestas

Medina.

A different commenter asked which New Mexico laws were being used to calculate damages.

2011 N.M. App. Unpub. LEXIS 276 (2011).

FEMA Response:

In paragraph 296.21(a) FEMA states, consistent with the Act, that the agency will apply New Mexico law to the calculation of damages. The Claims Office will work with claimants to identify an appropriate measure of damages consistent with applicable law.

8. Comments on Reasonable Damages

Comment:

Finally, commenters discussed the requirement that damages must be reasonable in amount in the IFR. Some commenters suggested that FEMA delete the requirement that damages must be reasonable in amount while others recommended it be changed to actual damages supported. One commenter stated that FEMA should give claimants the autonomy to define reasonableness for themselves.

FEMA Response:

The Act limits compensation to actual damages incurred by the claimant. To better ensure that the claimant is only being compensated for the actual damages incurred and that claimant is not being compensated in amounts that exceed the actual damages incurred, FEMA requires that the damages be reasonable in amount.

G. Comments on § 296.21(b) Exclusions

1. Comments on Punitive Damages

Comment:

Two commenters suggested claimants be allowed to seek punitive damages.

FEMA Response:

Section 104(c)(3)(B)(ii) of the Act specifically excludes punitive damages from the compensation available under the Act. It is thus beyond FEMA's statutory authority to compensate for these damages.

2. Comments on Criminality

Comment:

One commenter wrote “Essentially, the USFS committed a crime when—against all experience-informed protests from local citizens—its agents (the district ranger, burn boss and all commanding managers above them) made the decision to begin the Dispensas Prescribed Burn which rapidly and irreversibly exploded into the catastrophe now known as the Hermit's Peak Fire. They also committed a crime of negligence when they failed to properly monitor burn piles which reignited and caused the Calf Canyon Fire which merged with the Hermit's Peak Fire to cause widespread devastation now wreaking havoc for victims of the fire.”

FEMA Response:

FEMA is not authorized under the Act to pursue these types of claims. In the Act, the United States accepted responsibility for damage resulting from the Fire and waived sovereign immunity to compensate victims in tort. By excluding punitive damages, the Act makes clear that damages for intentional and other behavior otherwise giving rise to heightened liability are not compensable. FEMA is not revising the Final Rule.

3. Comments on Attorneys' and Agents' Fees

While one commenter specifically expressed support for this provision,

a large number of commenters wrote that FEMA should pay attorneys' and agents' fees associated with the claims process.

The commenter wrote “Subpart C Section 296.21(b) Excludes reimbursement for attorney's fees and agents' fees, plus claimant's cost of prosecuting a claim. This should stay. We want all of the money to go to the people injured in any way by the Hermit's Peak/Calf Canyon Fire.”

Comment:

One commenter wrote that the Administrator had the discretion to pay legal fees under the Act because the Act allows the award of financial losses of “any other loss that the Administrator determines to be appropriate for inclusion as financial loss.” The commenter stated that claimants using lawyers are likely to have more complete and better documented claims and that FEMA should want and encourage claimants to have complete and well documented claims. The commenter also noted that if claimants pay the financial expense of a lawyer the victims will not be made 100 percent whole unless they recover both 100 percent of losses and 20 percent for legal fees. A different commenter also stated that FEMA should encourage the efficiency and assistance that will result from allowing claimants to obtain attorney assistance and be made whole by allowing claimants to recover their attorney's fees.

FEMA Response:

The Act is silent regarding FEMA's authority to pay attorney or agent fees. Generally, if Congress knows how to say something but chooses not to, its silence is controlling.

While the Act places limits on the amount an attorney or agent may charge in section 104(j)(1), the Act does not provide for attorney or agent fees as allowable damages. Further, the “American Rule,” generally applicable in civil litigation and accepted by the United States Supreme Court initially in the case of

Arcambel

Wiseman,

provides that in the absence of a statute indicating otherwise, each party is responsible for paying their own attorney fees. FEMA designed the claims process so that claimants will receive all eligible compensation without the need to engage the services of an attorney, and the Claims Office hired Claims Navigators to assist claimants compiling necessary documentation and with the Proof of Loss. Although claimants have the right to hire an attorney, one is not required.

Animal Legal Defense Fund

USDA,

789 F.3d 1206 (11th Cir. 2015), citing

In re Haas,

48 F.3d 1153, 1156 (11th Cir. 1995), abrogated on other grounds by

In re Griffith,

206 F.3d 1389 (11th Cir. 2000).

See also United States

Roof,

10 F.4th 314 (4th Cir. 2021), citing

Discover Bank

Vaden,

396 F.3d 366, 370 (4th Cir. 2005).

3 U.S. (3 Dall.) 306 (1796).

See also United States

Roof,

10 F.4th 314 (4th Cir. 2021), citing

Discover Bank

Vaden,

396 F.3d 366, 370 (4th Cir. 2005).

Comment:

A commenter wrote that Congress only prevented the award of punitive damages and interest in the Act, not the award of legal fees.

FEMA Response:

As noted, the Act is silent regarding FEMA's authority to pay attorney or agent fees. Generally, if Congress knows how to say something but chooses not to, its silence is controlling.

While the Act places limits on the amount an attorney or agent may charge in section 104(j)(1), the Act does not provide for attorney or agent fees as allowable damages. FEMA is applying the generally accepted American Rule for attorney fees. FEMA designed the claims process so that claimants will receive all eligible compensation without the need to engage the services of an attorney, and the Claims Office hired Claims Navigators to assist claimants compiling necessary documentation and with the Proof of Loss. Also as noted, the Act is a limited waiver of sovereign immunity, and similar to cases decided under the Federal Tort Claims Act,

the Act does not waive sovereign immunity to allow payment of attorney fees.

Animal Legal Defense Fund

USDA,

789 F.3d 1206 (11th Cir. 2015), citing

In re Haas,

48 F.3d 1153, 1156 (11th Cir. 1995), abrogated on other grounds by

In re Griffith,

206 F.3d 1389 (11th Cir. 2000).

See also United States

Roof,

10 F.4th 314 (4th Cir. 2021), citing

Discover Bank

Vaden,

396 F.3d 366, 370 (4th Cir. 2005).

E.g.,

Anderson

United States,

127 F.3d 1190, 1191 (9th Cir. 1997) (“The FTCA does not contain an express waiver of sovereign immunity for attorneys' fees and expenses.”);

Joe

United States,

772 F.2d 1535 (11th Cir. 1985).

Comment:

Several commenters stated the process was too complicated and required professional and/or legal assistance to navigate and that payment of these fees would help to make them whole.

FEMA Response:

One purpose of the Act is to provide for expeditious consideration and settlement of claims from the Fire. The Claims Office interprets this to require an approach to settling claims that claimants can complete without engaging the services of attorneys or other professionals. To achieve this goal, FEMA hired a number of Claims Navigators from the local community, trained these Claims Navigators to identify compensable losses and to understand what is needed to complete a Proof of Loss, and developed a Claims Office ethos that emphasizes the needs of the claimant. The Claims Navigators work with claimants to ensure that they develop the information needed to receive compensation for all eligible losses. The Claims Office recognizes that some claims will require special expertise and will pay for experts that are needed to value particular claims. FEMA also notes that at the time the comment was submitted, the Claims Office had not yet fully developed the claims procedures, so it is understandable that the commenters did not recognize that the process is designed so that claimants do not need legal assistance.

Comment:

One commenter wrote that the Act recognized that claimants may seek legal assistance and capped those fees at 20 percent. The commenter stated that a FEMA representative, “protected by sovereign immunity, with no legal, ethical, or fiduciary obligation to the claimant, will be advising the claimant on the strategy to meet their burden of proof to obtain make-whole damages allowed by the language of the HPFAA and New Mexico State law. This approach puts claimants in the hands of FEMA representatives who have a conflict of interest. That is simply improper, unfair, unduly harmful to claimants, and places an administrative burden on FEMA and its representatives that otherwise would be borne by the claimant's attorneys.” This commenter also stated that the claims process required claimants to make decisions with legal implications and that FEMA employees and contractors would be able to obtain legal advice and assistance from their counsel in the process. The commenter stated that FEMA's legal team would be paid from Act's funds as an administrative expense and that claimants' attorneys' fees should be as well. The commenter also added that if represented by attorneys, FEMA should pay those funds directly to the attorneys for proper handling and lien resolution through authorized IOLTA trust accounts stating that claimants would have lien obligations that must be satisfied out of the compensation received, whether to satisfy fees, mortgages, medical liens, or other liens.

FEMA Response:

As with the Cerro Grande Act, in this Act, Congress limits attorney fees that an attorney is able to charge given it has established a claims process statutorily mandating the expeditious provision of compensation to all injured persons. FEMA designed the program to help claimants navigate the process. The Claims Office is implementing measures to eliminate potential conflicts of interest, and otherwise the Claims Office has no incentive not to pay claimants for all eligible losses. The Act creates the Claims Office and instructs the Director of the Claims Office, other officials, and staff to fully compensate claimants applying the authorizations and limitations in the law. The Director, other officials, and staff have a legal duty to pay eligible claimants the full amount of proven claims. Third, the assignment of benefits prohibition in the regulations.

Comment:

One commenter stated that attorneys' fees should be covered to help with the claims process for those especially that are elderly, handicapped, or those with basic literacy skills that don't have the ability to file the claims process themselves, that “the attorneys' fees should not come out of the final claim; that should be added on top of it.”

FEMA Response:

As discussed above, the Act is silent regarding FEMA's authority to pay attorney or agent fees. Generally, if Congress knows how to say something but chooses not to, its silence is controlling.

While the Act places limits on the amount an attorney or agent may charge in section 104(j)(1), the Act does not provide for attorney or agent fees as allowable damages. Further, the “American Rule,” generally applicable in civil litigation and initially accepted by the United States Supreme Court in the case of

Arcambel

Wiseman,

Animal Legal Defense Fund

USDA,

789 F.3d 1206 (11th Cir. 2015), citing

In re Haas,

48 F.3d 1153, 1156 (11th Cir. 1995), abrogated on other grounds by

In re Griffith,

206 F.3d 1389 (11th Cir. 2000).

See also United States

Roof,

10 F.4th 314 (4th Cir. 2021), citing

Discover Bank

Vaden,

396 F.3d 366, 370 (4th Cir. 2005).

3 U.S. (3 Dall.) 306 (1796).

See also United States

Roof,

10 F.4th 314 (4th Cir. 2021), citing

Discover Bank

Vaden,

396 F.3d 366, 370 (4th Cir. 2005).

3 U.S. (3 Dall.) 306 (1796).