[Federal Register Volume 63, Number 67 (Wednesday, April 8, 1998)]
[Rules and Regulations]
[Pages 17108-17111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9207]


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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

[[Page 17109]]

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,

[[Page 17110]]

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.

[[Page 17111]]

    (c) Time Limits. (1) Appellants must file appeals within 60 days 
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.

    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 hazard mitigation grant program-related decisions under 
subparts M and N of this part.
    (2) The Associate Director/Executive Associate Director for 
Mitigation will consider appeals of the Regional Director's decision on 
any first appeal under paragraph (b)(1) of this section.
    (c) Time Limits. (1) Appellants must make appeals within 60 days 
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.

    Dated: April 2, 1998.
James L. Witt,
Director.
[FR Doc. 98-9207 Filed 4-7-98; 8:45 am]
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