Disaster Assistance; the Declaration Process

FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067-AC72

Disaster Assistance; the Declaration Process

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Proposed rule, with request for comments.

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SUMMARY: This proposed rule would establish the financial criteria

under which a cost-share adjustment would be granted for permanent

restorative work and for emergency work unless otherwise adjusted, and

caps that cost-share at 90 percent Federal. Secondly, it would phase in

the threshold for granting cost-share adjustments to current dollars

over a two-year period, and would allow that threshold to be adjusted

annually for inflation.

DATES: We invite your comments, which may be submitted on or before May

4, 1998.

ADDRESSES: Please send any comments to the Rules Docket Clerk, Office

of the General Counsel, Federal Emergency Management Agency, 500 C

Street SW., room 840, Washington, DC 20472, (facsimile) 202-646-4536.

FOR FURTHER INFORMATION CONTACT: Patricia Stahlschmidt, Response and

Recovery Directorate, Federal Emergency Management Agency, 500 C Street

SW., Washington, DC 20472, 202-646-4066, (facsimile) 202-646-4060.

SUPPLEMENTARY INFORMATION:

Background

In 1985, the State of West Virginia was struck with an

extraordinarily severe disaster (753-DR), for which a cost-share

adjustment was granted to the normal 75 percent Federal/25 percent non-

Federal cost-share of assistance under sections 403 and 406 of the

Disaster Relief Act of 1974 (later amended and named the Robert T.

Stafford Disaster Relief and Emergency Assistance Act). (For purposes

of this rule the Disaster Relief Act and its successor are called the

Stafford Act). That disaster had an impact of $64 dollars (of Stafford

Act costs) per capita, based on statewide population. Since Hurricane

Hugo in 1989, a number of extraordinary disasters have continued to

occur throughout the United States causing significant impact to the

local, State, and Federal governments.

FEMA has used the precedent set in the 1985 West Virginia disaster

as a gauge to determine when to recommend to the President that cost-

share adjustments be granted. However, in keeping with the supplemental

nature of Federal assistance under the Stafford Act, adjustments were

granted to the cost-share only in those rare instances when the

disaster had an extraordinary impact.

Since 1985, over 435 major disaster declarations have been made

under the Stafford Act and its predecessor. Yet, only 32 cost-share

adjustments have been granted. Moreover, since Hurricane Andrew

occurred in 1992, there have been no cost-share adjustments for

permanent restorative work with greater than a 90% Federal share. This

also serves to maintain the supplemental nature of Federal disaster

assistance, and ensures at least some level of non-Federal cost-share

for disaster assistance.

The purpose of this proposed rule would be two-fold. First, it

would establish in regulation the financial criteria under which a

cost-share adjustment could be granted for permanent restorative work

under section 406 of the Stafford Act, and for emergency work under

sections 403 and 407 under the Stafford Act, if not otherwise adjusted

for the disaster, and caps that cost-share at 90 percent Federal.

Secondly, this proposed rule would phase in the threshold for granting

cost-share adjustments to current dollars over a two-year period, and

would allow that threshold to be adjusted annually for inflation. Since

1985, the threshold for granting cost-share adjustments has been $64

per capita. In current dollars, that figure would be raised to $100 per

capita. (Per capita costs are based on actual obligations under the

Stafford Act only, excluding FEMA administrative costs and the non-

Federal cost-share).

This rule would apply only to sections 403, 406, and 407 of the

Stafford Act, which stipulate that the Federal share of assistance will

not be less than 75 percent of the total eligible costs. The Stafford

Act contains no provision for waiver of cost-sharing for the Individual

and Family Grant program (section 411), the construction or site

development costs at a manufactured home group site (section 408), or

the Hazard Mitigation program (section 404). The Federal share of

grants under these sections is limited by law to 75 percent of the

total eligible costs.

In order to retain the supplemental nature of disaster assistance,

the Consumer Price Index for All Urban Consumers published by the

Department of Labor has been applied to the 1985 $64 per capita figure

to raise

[[Page 10817]]

that threshold to current dollars. The Consumer Price Index is also the

measure used to adjust grants annually under the Individual and Family

Grant Program (section 411 of the Stafford Act) and the small projects

under the Public Assistance Program (section 422 of the Stafford Act.)

Under this proposed rule the threshold would be $100 per capita, and

would be adjusted annually for inflation. Since this is such a large

increase in the threshold, the adjustment would be made over a two-year

period. In FY 1998 the threshold would be increased by $16 dollars to

$80 per capita statewide. Beginning October 1, 1998, the threshold

would be increased to $100 per capita statewide, with an adjustment

made for inflation thereafter.

National Environmental Policy Act

This proposed rule is categorically excluded from the requirements

of 44 CFR part 10. No environmental assessment has been prepared.

Executive Order 12866, Regulatory Planning and Review

This proposed rule is not a significant regulatory action within

the meaning of section 2(f) of E.O. 12866 of September 30, 1993, 58 FR

51735, but attempts to adhere to the regulatory principles set forth in

E.O. 12866. The rule has not been reviewed by the Office of Management

and Budget under E.O. 12866.

Paperwork Reduction Act

This proposed rule does not contain a collection of information and

therefore is not subject to the provisions of the Paperwork Reduction

Act of 1995.

Executive Order 12612, Federalism

This proposed rule involves no policies that have federalism

implications under E.O. 12612, Federalism, dated October 16, 1987.

Executive Order 12778, Civil Justice Reform

This proposed rule meets the applicable standards of section

2(b)(2) of E.O. 12778.

List of subjects in 44 CFR Part 206:

Administrative practice and procedure, Disaster assistance,

Intergovernmental relations, Reporting and record keeping requirements.

Accordingly, 44 CFR Part 206 is proposed to be amended as follows:

PART 206 SUBPART B--THE DECLARATION PROCESS

1. The authority citation for part 206 continues to read as

follows:

Authority: The Robert T. Stafford Disaster Relief and Emergency

Assistance Act, 42 U.S.C. 5121 et seq.; Reorganization Plan No. 3 of

1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR

19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR,

1979 Comp., p. 412; and E.O. 12673, 54 FR 12571, 3 CFR, 1989 Comp.,

p. 214.

2. Section 206.47 is added to read as follows.

Sec. 206.47 Cost-share adjustments.

(a) In accordance with the supplemental nature of assistance under

the Stafford Act, and to demonstrate the fiscal responsibility of both

State and Federal governments, a measure of non-Federal cost-sharing

will always be retained. The standard 75 percent Federal and 25 percent

non-Federal cost-share ratio will remain in effect for most

Presidentially declared major disasters. For extraordinary disasters,

the following standard will be used to evaluate whether costs under the

Act for assistance to State and local governments should be adjusted.

This adjustment applies to permanent restorative work under section 406

of the Stafford Act and to emergency work under sections 403 and 407 of

the Stafford Act unless otherwise adjusted.

(b) Beginning in FY 1998 and effective for major disasters declared

on or after [the effective date of the final rule] a qualifying

threshold of $80 per capita of State population will be used where

individual States are severely impacted by a major disaster. This

threshold will be based on actual obligations under the Stafford Act

only, and will exclude FEMA administrative costs and the non-Federal

cost-share.

(c) Beginning October 1, 1998, a qualifying threshold of $100 per

capita of State population (as adjusted for inflation), will be used

where individual States are severely impacted by a major disaster.

Thereafter, this threshold will be adjusted annually for inflation

using the Consumer Price Index for all Urban Consumers published by the

Department of Labor. This threshold will be based on actual obligations

under the Stafford Act only and will exclude FEMA administrative costs

and the non-Federal cost-share.

(d) Where future cost-share adjustments are authorized, the Federal

share of assistance to State and local governments for impacts to

public and eligible private-nonprofit facilities may be increased above

75 percent but may not be greater than 90 percent of the total eligible

cost. One hundred percent Federal funding may be provided for direct

Federal assistance emergency work, or for emergency work under sections

403 and 407, as conditions warrant.

Dated: January 13, 1998.

James L. Witt,

Director.

[FR Doc. 98-5708 Filed 3-4-98; 8:45 am]

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