Disaster Assistance; Public Assistance Program Appeals; Hazard Mitigation Grant Program Appeals

Federal RegisterApr 8, 1998

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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067-AC67

Disaster Assistance; Public Assistance Program Appeals; Hazard

Mitigation Grant Program Appeals

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Final rule.

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SUMMARY: This final rule changes the procedure for the review and

disposition of appeals related to Public Assistance grants or related

to the Hazard Mitigation Grant Program (HMGP). The rule reduces from

three to two the number of appeals allowed and thus will allow faster

final determination of decisions on appeal.

EFFECTIVE DATE: This rule is effective May 8, 1998.

FOR FURTHER INFORMATION CONTACT: Robert F. Shea, Mitigation

Directorate, Federal Emergency Management Agency, 500 C Street SW.,

Washington, DC 20472, (202) 646-3619, (facsimile) (202) 646-3104, about

HMGP appeals; or Melissa M. Howard, Response and Recovery Directorate,

Federal Emergency Management Agency, 500 C Street SW., Washington, DC

20472, (202) 646-3053, facsimile (202) 646-3304, about Public

Assistance appeals.

SUPPLEMENTARY INFORMATION:

Background

Under Sec. 423 of the Robert T. Stafford Disaster Relief and

Emergency Assistance Act (Stafford Act), 42 U.S.C. 5189a, any decision

regarding eligibility or amount of assistance may be appealed. Current

FEMA regulations at 44 CFR 202.206 and 206.440 provide for a three-

stage appellate process, with appeals directed to the Regional

Director, the Associate Director, and to the Director.

Proposed Rule

On November 24, 1997 FEMA published a proposed rule, 62 FR 62540--

62542, to reduce from three to one the number of appeals allowed. As

proposed, the authority for appeal decisions would have rested solely

with the Regional Director, who would have had to consult with FEMA

Headquarters on all potential appeal denials when the amount in

question was $1,000,000 or more in Federal funds.

Public Comments

FEMA received 29 responses to the proposed rule. The most cited

argument against placing the final agency decision

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making authority with the Regional Director in a one-level appeal

process was that the process could lead to inequitable and inconsistent

decisions. A Regional Director could have a natural inclination and

desire to support the initial decision made by one of his/her staff

members. Some suggested that the appeals staff might include some of

the same people who participated in the initial decision and that the

Regional Director might have been involved in the initial

determination. Therefore, they argued that it would not be fair to have

a ``biased'' reviewer deciding an appeal.

The second most cited argument against the one-level appeal process

was inconsistencies it could create among FEMA's 10 Regional Offices--a

reimbursable cost in one region may be determined to be an ineligible

cost in another region. To ensure consistency and uniformity in the

application of FEMA policies and precedents, they argued that

applicants should have a right to review by the Director or Associate

Director at the national level.

Four commenters stated that the Regional Director's first appeal

decision is often the first time that FEMA clearly identifies and

discloses its position on the issue being appealed. The first appeal to

the Regional Director frequently gathers new information related to the

issue that the Regional Director rules upon for the first time. Until

then the subgrantee and the grantee often do not have a written summary

of FEMA's position due to the technical nature of the DSR process.

These commenters urged that a ``one step'' appeal process--even when

directed to a centralized headquarters office--would not provide an

adequate record on which to base a final agency decision. They asserted

that to end the process after only one appeal would merely exchange the

FEMA administrative process for an even more costly and time-consuming

process--the Federal court system.

The great majority of the commenters recommended that FEMA adopt a

two-level appeal process. Most recommended that the first appeal be

made to the Regional Director. If a second appeal was needed they

recommended that it be made to the Associate Director or to the

Director.

FEMA Response to Comments

We found the comments cogent and persuasive, and have established

two levels of appeals. The authority for appeal decisions will rest

with the Regional Director at the first level and the Associate

Director/Executive Associate Director at the second level. The

Associate Director's/Executive Associate Director's appeal

determination will be the Agency's final administrative decision on the

matter.

The intent of this change remains to reduce the amount of time and

associated costs incurred by FEMA, grantees, and subgrantees to resolve

appeals. All commenters agreed with that goal. Given the time allowed

for appeals at each appellate level, the process can take two years or

more to make a final decision under the current three-appeal process.

FEMA expects that this change will provide applicants with a final

resolution of contested issues more quickly than is now possible and

will expedite delivery of assistance to eligible applicants. All

provisions for fair and impartial consideration required by law will be

maintained.

Effective Date

The rule is effective for all appeals pending on and appeals from

decisions issued on or after May 8, 1998, except as provided elsewhere

in section (e). Thus, appeals pending on a first-level appeal decision

of a Regional Director issued before the effective date of this rule

may be appealed to an Associate Director/ Executive Associate Director

under this rule. Appeals pending from a decision of an Associate

Director/ Executive Associate Director issued before the effective date

of this rule may be appealed to the Director under 44 CFR

Sec. Sec. 202.206 and 206.440 as they existed before May 8, 1998. The

decision of the FEMA official at the next higher appeal level will be

the final administrative decision of FEMA.

Redelegation

Under the authority of 44 CFR 2.6, Redelegation of authority, the

Associate Director/Executive Associate Director for Response and

Recovery and the Associate Director/Executive Associate Director for

Mitigation may redelegate their appeal authority under 44 CFR

Sec. Sec. 202.206 and 206.440 in whole or in part to another FEMA

official. For example, FEMA revised the delegation of appeal decisions

when the Northridge Long-term Recovery Area Office was established to

deal with the special reporting relationship for the large and complex

Northridge earthquake disaster.

Costs Associated With Preparing and Processing Appeals

The proposed rule also provided that grantees and subgrantees would

be responsible for separately tracking and accounting for all costs

associated with preparing and processing appeals. FEMA would reimburse

grantees' and subgrantees' administrative costs for preparing and

processing appeals only when an appeal was decided in favor of the

applicant.

The final rule does not contain a provision requiring grantees and

subgrantees to separately track and account for all costs to prepare

and process appeals. There is considerable disparity in the

recommendations that commenters made on appeal costs. In the interest

of instituting the new appeals procedure as soon as possible we are

removing the costs provision from the final rule. We intend to continue

our review of the costs to prepare and process appeals and intend to

propose changes later to those cost provisions through rulemaking.

Redefinition

This rule also revises the definition of Associate Director in

paragraph (a)(3) of 44 CFR 206.2 to indicate that the Associate

Director or Executive Associate Director referred to in subparts A

through L of part 206 is the head of the Response and Recovery

Directorate, and the Associate Director or Executive Associate Director

referred to in subparts M and N of part 206 is the head of the

Mitigation Directorate.

List of Those Who Commented on the Proposed Rule

We appreciate the comments sent to us by the following individuals

and organizations:

Richard Andrews, Director, Governor's Office of Emergency Services,

Rancho Cordova, California 95741-9047

Michael Austin, Director, State of Arizona Division of Emergency

Mgmt., Phoenix, Arizona 85008-3495

Robert C. Byerts, Deputy General Counsel, Florida Department of

Community Affairs, Tallahassee, Florida 32399-2100

Albert Deininger, Vice President, Ambulatory Care, White Memorial

Medical Center, Los Angeles, CA 90033

Doran Duckworth, State Planner/Planning Coordinator, Lansing, MI

48909-8136

Randall Duncan, NCCEM President, Falls Church, Virginia 22046-4513

Glen Fichman, Director, FEMA Coordination, University of California,

Los Angeles, Los Angeles, CA 90095-1405

Mary Forrest, Chief Executive Officer, Jewish Home for the Aging,

Reseda, CA 91335

Ellen Gordon, Administrator, Department of Public Defense, Emergency

Management Division, Des Moines, Iowa 50319-0113

Arthur Goulet, Director, Public Works Agency County of Ventura,

Ventura, CA 93009-1600

Ursula Hyman, Latham & Watkins, Los Angeles, California 90071-2007

Karen Keene, Legislative Representative, California State

Association of Counties, Sacramento, CA 95814

Francis Laden, Brigadier General, Nebraska Army National Guard,

Assistant Director,

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Nebraska Emergency Management Agency, Lincoln, Nebraska 68508-1090

Fred Liebe, Chair, State of Oklahoma, SHMO NEMA Liaison Committee,

Oklahoma Dep't of Civil Emerg'y Mgmt., Oklahoma City, OK 73152-3365

Stuart Mahler, Public Assistance Coordinator, Connecticut Office of

Policy and Management, Hartford, Connecticut 06134-1441

Anthony S. Mangeri, Chair, SHMO Regulations Committee, New Jersey

State Hazard Mitigation Officer

Stan McKinney, President, National Emergency Management Ass'n,

Columbia, SC 29201

David McMillion, Director, Maryland Emergency Management Agency,

Pikesville, Maryland 21208

Terrance Muldoon, Vice President, Saint John's Health Center, Santa

Monica, CA 90404-2032

John Mulhern, Director, Delaware Department of Public Safety,

Delaware Emergency Management Agency, Delaware City, Delaware 19706

Roy Price, Hawaii Department of Defense, Office of the Director of

Civil Defense, Honolulu, Hawaii 96816-4495

Phillip K. Roberts, Deputy Director, Indiana State Emergency

Management Agency, Indianapolis, IN 46204

Gary Seidenfeld, Hazard Mitigation Program Officer, FEMA Region II

Steven D. Sell, Administrator, Department of Military Affairs,

Wisconsin Emergency Management, Madison, Wisconsin 53707-7865

Dale Shipley, Deputy Director, Ohio Emergency Management Agency,

Columbus, OH 43235-2206

David L. Smith, Chief, Disaster Assistance & Preparedness,

Springfield, Illinois 62701-1109

Harry Stone, Director of Public Works, County of Los Angeles,

Alhambra, California 91803-1331

Jerry Uhlmann, Director, Missouri Emergency Management Agency,

Jefferson City, Missouri 65102

National Environmental Policy Act

This rule is categorically excluded from the preparation of

environmental impact statements and environmental assessments as an

administrative action in support of normal day-to-day grant activities.

No environmental impact statement or environmental assessment has been

prepared.

Executive Order 12866, Regulatory Planning and Review

This rule is not a significant regulatory action within the meaning

of Sec. 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 rule does not involve any collection of information for the

purposes of the Paperwork Reduction Act.

Regulatory Flexibility Act

The Director certifies that this rule will not have a significant

economic impact on a substantial number of small entities. The rule

will reduce the number of appeals that an entity might make and is

expected to reduce administrative burden and compliance requirements

associated with appeals. A regulatory flexibility analysis has not been

prepared.

Executive Order 12612, Federalism

This rule involves no policies that have federalism implications

under E.O. 12612, Federalism, dated October 26, 1987.

Executive Order 12778, Civil Justice Reform

This rule complies with applicable standards of Sec. 2(b)(2) of

E.O. 12778.

Congressional Review of Agency Rulemaking

FEMA has submitted this rule to the Congress and to the General

Accounting Office under the Congressional Review of Agency Rulemaking

Act, Pub. L.104-121. This rule is not a ``major rule'' within the

meaning of that Act. It does not result in nor is it likely to result

in an annual effect on the economy of $100,000,000 or more; it will not

result in a major increase in costs or prices for consumers, individual

industries, Federal, State, or local government agencies, or geographic

regions; and it will not have ``significant adverse effects'' on

competition, employment, investment, productivity, innovation, or on

the ability of United States-based enterprises to compete with foreign-

based enterprises.

This rule is exempt (1) from the requirements of the Regulatory

Flexibility Act, as certified previously, and (2) from the Paperwork

Reduction Act.

This rule is not an unfunded Federal mandate within the meaning of

the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4. It does not

meet the $100,000,000 threshold of that Act.

List of Subjects in 44 CFR Part 206

Administrative practice and procedure, Appeals, Disaster

assistance, Mitigation.

Accordingly, 44 CFR part 206 is amended as follows:

PART 206--FEDERAL DISASTER ASSISTANCE FOR DISASTERS DECLARED ON OR

AFTER NOVEMBER 23, 1988

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. Paragraph (a)(3) of Sec. 206.2 is revised to read as follows:

Sec. 206.2 Definitions.

(a) * * *

(3) Associate Director or Executive Associate Director: (i) Unless

otherwise specified in subparts A through L of this part, the Associate

Director or Executive Associate Director of the Response and Recovery

Directorate, or his/her designated representative.

(ii) Unless otherwise specified in subparts M and N of this part,

the Associate Director or Executive Associate Director of the

Mitigation Directorate, or his/her designated representative.

* * * * *

3. Section 206.206 is revised to read as follows:

Sec. 206.206 Appeals.

An eligible applicant, subgrantee, or grantee may appeal any

determination previously made related to an application for or the

provision of Federal assistance according to the procedures below.

(a) Format and Content. The applicant or subgrantee will make the

appeal in writing through the grantee to the Regional Director. The

grantee shall review and evaluate all subgrantee appeals before

submission to the Regional Director. The grantee may make grantee-

related appeals to the Regional Director. The appeal shall contain

documented justification supporting the appellant's position,

specifying the monetary figure in dispute and the provisions in Federal

law, regulation, or policy with which the appellant believes the

initial action was inconsistent.

(b) Levels of Appeal. (1) The Regional Director will consider first

appeals for public assistance-related decisions under subparts A

through L of this part.

(2) The Associate Director/Executive Associate Director for

Response and Recovery will consider appeals of the Regional Director's

decision on any first appeal under paragraph (b)(1) of this section.

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after receipt of a notice of the action that is being appealed.

(2) The grantee will review and forward appeals from an applicant

or subgrantee, with a written recommendation, to the Regional Director

within 60 days of receipt.

(3) Within 90 days following receipt of an appeal, the Regional

Director (for first appeals) or Associate Director/Executive Associate

Director (for second appeals) will notify the grantee in writing of the

disposition of the appeal or of the need for additional information. A

request by the Regional Director or Associate Director/Executive

Associate Director for additional information will include a date by

which the information must be provided. Within 90 days following the

receipt of the requested additional information or following expiration

of the period for providing the information, the Regional Director or

Associate Director/Executive Associate Director will notify the grantee

in writing of the disposition of the appeal. If the decision is to

grant the appeal, the Regional Director will take appropriate

implementing action.

(d) Technical Advice. In appeals involving highly technical issues,

the Regional Director or Associate Director/Executive Associate

Director may, at his or her discretion, submit the appeal to an

independent scientific or technical person or group having expertise in

the subject matter of the appeal for advice or recommendation. The

period for this technical review may be in addition to other allotted

time periods. Within 90 days of receipt of the report, the Regional

Director or Associate Director/Executive Associate Director will notify

the grantee in writing of the disposition of the appeal.

(e) Transition. (1) This rule is effective for all appeals pending

on and appeals from decisions issued on or after May 8, 1998, except as

provided in paragraph (e)(2) of this section.

(2) Appeals pending from a decision of an Associate Director/

Executive Associate Director before May 8, 1998 may be appealed to the

Director in accordance with 44 CFR 206.440 as it existed before May 8,

1998.

(3) The decision of the FEMA official at the next higher appeal

level shall be the final administrative decision of FEMA.

3. Section 206.440 is revised to read as follows:

Sec. 206.440 Appeals.