Disaster Assistance; Redesign of Public Assistance Program Administration

FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067-AC89

Disaster Assistance; Redesign of Public Assistance Program

Administration

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Final rule.

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SUMMARY: We (FEMA) have redesigned the Public Assistance Program to

provide money to applicants more quickly and to make the application

process simpler than before. Specific changes to regulations rename

documents, define terms, adjust responsibilities, and edit the rule in

a way that we hope makes the rule easier to read and understand. This

rule reflects changes that we need to put the new Public Assistance

Program into effect.

EFFECTIVE DATE: This rule is effective on November 12, 1999.

FOR FURTHER INFORMATION CONTACT: James D. Duffer, Federal Emergency

Management Agency, room 713, 500 C Street SW., Washington DC 20472,

(202) 646-3532, or (email) [email protected].

SUPPLEMENTARY INFORMATION: On November 20, 1998, we published an

interim final rule on the redesigned Public Assistance Disaster Grant

Program (Project Administration) in the Federal Register at 63 FR

64423. We invited comments for 45 days ending on January 4, 1999. We

received eight sets of comments: Five from States; one from an

organization; and, one from an individual. Comments varied widely. One

commenter objected to changing the regulations; some thought that

certain amended language required more clarification; some proposed

additions to the amendatory language; and, some supported the rule as

written.

We have carefully considered the comments and performed clarifying

amendments to Sec. 206.201, Sec. 206.202, Sec. 206.204, Sec. 206.205,

and Sec. 206.208 that are technical in nature and do not require

republication of the rule for comment. Specifically, within

Sec. 206.201 we added that a scope of work and cost estimate for a

project are documented on a Project Worksheet. We amended Sec. 206.202

to explain the State's responsibility better and to make the rule

easier to understand in this regard. We replaced the term ``Damage

Survey Report'' with ``Project Worksheet'' at Sec. 206.204. In

Sec. 206.205 we amended the section to provide that final payment of

the Federal share is made to the Grantee upon approval of the Project

Worksheet, rather than the project. And in Sec. 206.208 we eliminated

the damage survey report requirement for the implementation of direct

Federal assistance and replaced it with a requirement for a mission

assignment letter to the appropriate federal agency. Following is a

summary of the comments and responses.

Several States commented that the proposed amendments to the

governing regulations were generally acceptable. Some suggested that

additional changes to the rule were necessary to explain the meaning of

the redesigned process better for improving the delivery of the Public

Assistance Program. We believe that the comments have merit and where

terminologies are not consistent we are making additional changes to

define terms better and to adjust responsibilities as follows:

Several commenters noted that we might have omitted State

participation in the preparation of Project Worksheets from the

responsibilities of the Grantee, which could result in

misinterpretations with other sections of the rule. By way of

explanation, we encourage applicants to formulate their own small

projects and to prepare Project Worksheets. For those unable to do so,

we will prepare Project Worksheets for small projects. We also prepare

Project Worksheets for all large projects. The State is responsible for

providing assistance to the applicant and FEMA, as appropriate, for the

purposes of identifying and validating small and large projects. We

edited Sec. 206.202(b)(2), Sec. 206.202(d)(1)(i) and

Sec. 206.228(a)(2)(i) to explain the State's responsibility better and

make the rule easier to understand in this regard.

One commenter observed that Sec. 206.202(d)(1)(ii) of the

interim rule mistakenly omitted the word ``substantive''. We corrected

this section to include the word ``substantive'' in the text of the

rule. Our intent (as we noted under What Changes Are We Making to the

Rule?) is that the first substantive meeting (known as the Kickoff

Meeting) is between the applicant, the Public Assistance Coordinator

(PAC) and the Liaison (a State supplied position) when possible. The

PAC contacts the subgrantee to arrange the Kickoff Meeting. At this

meeting a subgrantee's damages will be discussed, needs assessed, and a

plan of action put in place. The PAC will go over what we expect of the

subgrantee and will provide detailed instructions on what to do and how

to do it. The State Liaison will discuss State requirements for

administering the programmatic and

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grant management requirements of the Public Assistance Program. This

meeting is also the place to bring any questions or concerns that the

subgrantee may have about how the public assistance process works.

One commenter said that a change should be made to the

Payment of Claims for small projects. Under the previous process for

small projects, final payment of the Federal share was made to the

Grantee upon project approval (each project was separately identified

on a Damage Survey Report). The comment has merit because the

redesigned process approves all small projects listed on a Project

Worksheet as a single grant. We edited Sec. 206.205(a) to say that we

make final payment of the Federal share of these projects to the

Grantee when we approve the Project Worksheet.

Another commenter proposed a change to eliminate the term

DSR under Sec. 206.208(c)(1), Direct Federal Assistance. In the past,

the Regional Director had to prepare a damage survey report

establishing the scope and estimated cost of eligible work before

execution of the work by another Federal agency that had the mission

assignment to provide direct Federal assistance. This requirement was a

pre-Federal Response Plan activity. We edited this section to eliminate

the DSR requirement. However, the mission assignment letter to the

agency providing direct Federal assistance will define the eligible

scope of work, the estimated cost of the eligible work and the billing

frequency.

Another commenter observed for Sec. 206.204(e) that we

needed to eliminate the term DSR (Damage Survey Report) and replace it

with PW (Project Worksheet). We made that change.

We also received comments that were unrelated to matters of

terminology or consistency in the interim rule. Following is our

summary of and response to these comments:

A commenter observed that the grantee and subgrantee must

be trained before a disaster and that we should provide adequate

funding for training and publications to implement the Public

Assistance Program properly. In response, our priority is to train FEMA

staff to better deliver the redesigned Public Assistance Program.

Although we do not propose a formal training program for States and

applicants, we are providing educational and training materials in a

variety of forms and delivery methods to educate States and applicants.

To prepare States to train applicants we have provided limited training

to the States (e.g. train-the-trainer classes). We are relying on

States and locals to avail themselves of the training materials mounted

on our web site that includes clearly marked areas for Public

Assistance Program information and publications.

One commenter expressed that there could be confusion with

the terms ``we'' and ``you'' as used throughout the text of the

proposed language. We have considered the possibility and agree. To

reduce the potential for confusion, terminology changes throughout text

of the proposed language have been made to reflect the term's

``Grantee'' and ``subgrantee'' as appropriate.

Another commenter noted that allowable administrative

costs for subgrantees are insufficient to complete program

responsibilities and said the allowance should be increased. The

statutory allowance to assist in the cost of requesting, obtaining and

administering Federal assistance is outside the scope of the changes to

the regulations.

A commenter asserted that FEMA should retain the

requirement to explain in writing to a State Program Administrator any

delays beyond 45 days in the obligation of Federal funds. We appreciate

the comment but we do not take that view. We keep our obligation to

explain delays but remove the requirement for written explanation. The

program relies greatly on open communication, which we effect in a

variety of ways. For instance, soon after the declaration, FEMA and

State officials will meet to develop a public assistance recovery

strategy, which will address FEMA and State staffing plans. As other

examples, State staff assigned to the Resource Pool may assist in

recovery efforts by providing technical assistance to applicants

requesting assistance with their small project formulation activities,

by validating an applicant's small projects, by assisting in the

formulation of large projects, or by reviewing an applicant's case

management file. Through the Federal, State and local partnership all

participants will know why delays greater than 45 days in obligating

Federal funds may occur both through open communication and through the

review of an applicant's case management file. We believe that it would

be redundant to duplicate this information in writing separately, when

the same information is available from either the Public Assistance

Coordinator (PAC), the State Liaison, or an applicant's case management

file.

Another commenter observed that we had deleted

Sec. 206.202(f). We appreciate the comment and note that the final rule

retains that section in its original form.

A commenter stated that the redesigned Public Assistance

Program should not be implemented until we closed out one of the

``pilot'' disasters and audited the program result. We appreciate the

comment but we do not take that view. State and local officials who

participated in the pilot enthusiastically endorsed the redesigned

process. Changes to the regulations incorporate the lessons that we

learned from the pilot. The evaluation of program performance is an

essential part of the redesigned program. An overall survey program

began in late 1997 specifically for this purpose. We conducted an

initial survey, Public Assistance Program Evaluation and Customer

Satisfaction Baseline Survey, from December 1997 through February 1998

and we published results of the survey in April 1998. The Baseline

Survey revealed that, while a majority of respondents were satisfied

with the overall Public Assistance (PA) Program and its major

components, customer satisfaction levels were below our performance

expectations. In response, our headquarters and regional staffs

designed performance standards and targets for the PA Program to make

the Program a more customer-responsive and performance-based operation.

We published the standards in June 1998 in Public Assistance Program

Performance Standards. We are now conducting a series of Post-Disaster

Surveys to evaluate the effectiveness of new processes for the delivery

of financial assistance and services to customers.

Another commenter observed that Sec. 206.228(a)(2)(i)(A-D)

had been left out of the November 20, 1998 Federal Register notice. We

appreciate the comment and when we found the error we published a

correction in the Federal Register, 64 FR 41827, August 2, 1999, to

ensure that we retain the subparagraphs. They are in the final rule.

A commenter expressed the desire to have Federal Register

notices appear on the FEMA Website. We believe the comment has merit

and have asked our Office of the General Counsel to post all FEMA-

generated Federal Register publications on the FEMA Website.

National Environmental Policy Act

Our regulations categorically exclude this rule from the

preparation of environmental impact statements and environmental

assessments as an administrative action in support of normal day-to-day

grant activities. We have not prepared an environmental assessment or

an environmental impact statement.

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Executive Order 12866, Regulatory Planning and Review

We do not expect this rule (1) to affect adversely the availability

of disaster assistance funding to small entities, (2) to have

significant secondary or incidental effects on a substantial number of

small entities, or (3) to create any additional burden on small

entities.

As Director I certify that this 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, and that it attempts to adhere to the

regulatory principles set forth in E.O. 12866. The Office of Management

and Budget has not reviewed this rule under E.O. 12866.

Paperwork Reduction Act

This 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

In publishing this rule, we considered the President's Executive

Order 12612 on Federalism. This rule makes no changes in the division

of governmental responsibilities between the Federal government and the

States. Grant administration procedures under 44 CFR Part 13, Uniform

Administrative Requirements for Grants and Cooperative Agreements to

State and Local Governments, remain the same. We have not prepared a

Federalism assessment.

Executive Order 12778, Civil Justice Reform

This rule meets the applicable standards of section 2(b)(2) of

Executive Order 12778, Civil Justice Reform, dated October 25, 1991, 3

CFR, 1991 Comp., p. 359.

Congressional Review of Agency Rulemaking

We have submitted this final rule to the Congress and to the

General Accounting Office under the Congressional Review of Agency

Rulemaking Act, Pub. L. 104-121. The rule is not a ``major rule''

within the meaning of that Act. It is an administrative action in

support of normal day-to-day activities. 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 final rule is exempt (1) from the requirements of the

Regulatory Flexibility Act, and (2) from the Paperwork Reduction Act.

The 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, and any enforceable duties are

imposed as a condition of Federal assistance or a duty arising from

participation in a voluntary Federal program.

List of Subjects in 44 CFR Part 206

Disaster assistance, Public assistance.

Accordingly, the interim rule published at 63 FR 64425, Nov. 20,

1998, amending 44 CFR part 206 is adopted as final with the following

changes:

PART 206--DISASTER ASSISTANCE

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. Revise Sec. 206.200(b) to read as follows:

Sec. 206.200 General.

* * * * *

(b) What policies apply to FEMA public assistance grants? (1) The

Stafford Act requires that we deliver eligible assistance as quickly

and efficiently as possible consistent with Federal laws and

regulations. We expect the Grantee and the subgrantee to adhere to

Stafford Act requirements and to these regulations when administering

our public assistance grants.

(2) The regulations entitled ``Uniform Requirements for Grants and

Cooperative Agreements to State and Local Governments,'' published at

44 CFR part 13, place requirements on the State in its role as Grantee

and gives the Grantee discretion to administer federal programs under

their own procedures. We expect the Grantee to:

(i) Inform subgrantees about the status of their applications,

including notifications of our approvals of Project Worksheets and our

estimates of when we will make payments;

(ii) Pay the full amounts due to subgrantees as soon as practicable

after we approve payment, including the State contribution required in

the FEMA-State Agreement; and

(iii) Pay the State contribution consistent with State laws.

3. Amend section Sec. 206.201 by revising the heading and the

definitions of project and project approval in paragraphs (i) and (j)

to read as follows:

Sec. 206.201 Definitions used in this subpart.

* * * * *

(i) A project is a logical grouping of work required as a result of

the declared major disaster or emergency. The scope of work and cost

estimate for a project are documented on a Project Worksheet (FEMA Form

90-91).

(1) We must approve a scope of eligible work and an itemized cost

estimate before funding a project.

(2) A project may include eligible work at several sites.

(j) Project approval means the process in which the Regional

Director, or designee, reviews and signs an approval of work and costs

on a Project Worksheet or on a batch of Project Worksheets. Such

approval is also an obligation of funds to the Grantee.

* * * * *

4. Revise Sec. 206.202 to read as follows:

Sec. 206.202 Application procedures.

(a) General. This section describes the policies and procedures

that we use to process public assistance grants to States. Under this

section the State is the Grantee. As Grantee you are responsible for

processing subgrants to applicants under 44 CFR parts 13, 14, and 206,

and your own policies and procedures.

(b) Grantee. You are the grant administrator for all funds provided

under the Public Assistance grant program. Your responsibilities under

this section include:

(1) Providing technical advice and assistance to eligible

subgrantees;

(2) Providing State support for project identification activities

to include small and large project formulation and the validation of

small projects;

(3) Ensuring that all potential applicants are aware of available

public assistance; and

(4) Submitting documents necessary for the award of grants.

(c) Request for Public Assistance (Request). The Grantee must send

a completed Request (FEMA Form 90-49) to the Regional Director for each

applicant who requests public assistance. You must send Requests to the

Regional Director within 30 days after designation of the area where

the damage occurred.

(d) Project Worksheets. (1) An applicant's authorized local

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representative is responsible for representing the applicant and for

ensuring that the applicant has identified all eligible work and

submitted all costs for disaster-related damages for funding.

(i) We or the applicant, assisted by the State as appropriate, will

prepare a Project Worksheet (FEMA Form 90-91) for each project. The

Project Worksheet must identify the eligible scope of work and must

include a quantitative estimate for the eligible work.

(ii) The applicant will have 60 days following its first

substantive meeting with us to identify and to report damage to us.

(2) When the estimated cost of work on a project is less than

$1,000, that work is not eligible and we will not approve a Project

Worksheet for the project. Periodically we will review this minimum

approval amount for a Project Worksheet and, if needed, will adjust the

amount by regulation.

(e) Grant approval. (1) Before we obligate any funds to the State,

the Grantee must complete and send to the Regional Director a Standard

Form (SF) 424, Application for Federal Assistance, and a SF 424D,

Assurances for Construction Programs. After we receive the SF 424 and

SF 424D, the Regional Director will obligate funds to the Grantee based

on the approved Project Worksheets. The Grantee will then approve

subgrants based on the Project Worksheets approved for each applicant.

(2) When the applicant submits the Project Worksheets, we will have

45 days to obligate Federal funds. If we have a delay beyond 45 days we

will explain the delay to the Grantee.

(f) Exceptions. The following are exceptions to the procedures and

time limitations outlined in paragraphs (c), (d), and (e) of this

section.

(1) Grant applications. An Indian tribe or authorized tribal

organization may submit a SF 424 directly to the RD when the Act

authorizes assistance and a State is legally unable to assume the

responsibilities that these regulations prescribe.

(2) Time limitations. The RD may extend the time limitations shown

in paragraphs (c) and (d) of this section when the Grantees justifies

and makes a request in writing. The justification must be based on

extenuating circustances beyond the grantee's or subgrantee's control.

5. Amend Sec. 206.204 by revising paragraph (e) to read as follows:

Sec. 206.204 Project performance.

* * * * *

(e) Cost Overruns. (1) During the execution of approved work a

subgrantee may find that the actual project costs exceed the approved

Project Worksheet estimates. Such cost overruns normally fall into the

following three categories:

(i) Variations in unit prices;

(ii) Change in the scope of eligible work; or

(iii) Delays in timely starts or completion of eligible work.

(2) The subgrantee must evaluate each cost overrun and, when

justified, submit a request for additional funding through the Grantee

to the RD for a final determination. All requests for the RD's approval

will contain sufficient documentation to support the eligibility of all

claimed work and costs. The Grantee must include a written

recommendation when forwarding the request. The RD will notify the

Grantee in writing of the final determination. FEMA will not normally

review an overrun for an individual small project. The normal procedure

for small projects will be that when a subgrantee discovers a

significant overrun related to the total final cost for all small

projects, the subgrantee may submit an appeal for additional funding in

accordance with Sec. 206.206, within 60 days following the completion

of all its small projects.

* * * * *

6. Amend Sec. 206.205 by revising paragraph (a) to read as follows:

Sec. 206.205 Payment of Claims.

(a) Small Projects. Final payment of the Federal share of these

projects will be made to the Grantee upon approval of the Project

Worksheet. The Grantee will make payment of the Federal share to the

subgrantee as soon as practicable after Federal approval of funding.

Before the closeout of the disaster contract, the Grantee must certify

that all such projects were completed in accordance with FEMA approvals

and that the State contribution to the non-Federal share, as specified

in the FEMA-State Agreement, has been paid to each subgrantee. Such

certification is not required to specify the amount spent by a

subgrantee on small projects. The Federal payment for small projects

shall not be reduced if all of the approved funds are not spent to

complete a project. However, failure to complete a project may require

that the Federal payment be refunded.

* * * * *

7. Amend Sec. 206.208 by revising paragraph (c)(1) to read as

follows:

Sec. 206.208 Direct Federal Assistance.

* * * * *

(c) Implementation. (1) If the RD approves the request, a mission

assignment will be issued to the appropriate Federal agency. The

mission assignment letter to the agency will define the scope of

eligible work, the estimated cost of the eligible work and the billing

period frequency. The Federal agency must not exceed the approved

funding limit without the authorization of the RD.

* * * * *

8. Amend Sec. 206.228 by revising paragraph (a)(2)(i) to read as

follows:

Sec. 206.228 Allowable costs.

* * * * *

(a) * * *

(1) * * *

(2) Statutory Administrative Costs--(i) Grantee. Under section

406(f)(2) of the Stafford Act, we will pay you, the State, an allowance

to cover the extraordinary costs that you incur to formulate Project

Worksheets for small and large projects, to validate small projects, to

prepare final inspection reports, project applications, final audits,

and to make related field inspections by State employees. Eligible

costs include overtime pay and per diem and travel expenses, but do not

include regular time for your State employees. The allowance to the

State will be based on the following percentages of the total amount of

Federal assistance that we provide for all subgrantees in the State

under sections 403, 406, 407, 502, and 503 of the Act:

(A) For the first $100,000 of total assistance provided (Federal

share), three percent of such assistance.

(B) For the next $900,000, two percent of such assistance.

(C) For the next $4,000,000, one percent of such assistance.

(D) For assistance over $5,000,000, one-half percent of such

assistance.

* * * * *

Dated: October 1, 1999.

James L. Witt,

Director.

[FR Doc. 99-26352 Filed 10-8-99; 8:45 am]

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