[Federal Register Volume 64, Number 76 (Wednesday, April 21, 1999)]
[Rules and Regulations]
[Pages 19496-19498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9934]


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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067-AC72


Disaster Assistance; Cost-share Adjustment

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Final rule.

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SUMMARY: This rule accomplishes three objectives. First, it establishes 
the financial criteria under which we, FEMA, recommend to the President 
a cost-share adjustment for permanent restorative work and for 
emergency work under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (the Stafford Act). Second, the rule states 
that we recommend capping the Federal share of assistance at ninety 
percent (90%.) Third, we raise the $64 statewide per capita threshold 
that we have used since 1985 for recommending cost-share adjustments to 
current dollars, and will adjust that threshold annually in future 
years. The new threshold is phased in over a gradual period. The rule 
in no way affects the current process under which the President 
sometimes grants one hundred percent (100%) Federal funding for 
emergency work, including direct Federal assistance, for limited 
periods following disaster declarations when the emergency needs 
warrant it.

EFFECTIVE DATE: This rule is effective May 21, 1999.

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, or 
(email) [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On March 5, 1998, we published a proposed rule on cost-share 
adjustment under the Stafford Act, 42 U.S.C. 5121 et seq. in the 
Federal Register at 63 FR 10816. We invited comments for 60 days ending 
on May 4, 1998. We received nine sets of comments: two from State and 
local government organizations; six from States; and one from a local 
government. Three commenters generally supported placing the criteria 
in regulation and annually adjusting the threshold for inflation, and 
one commenter agreed with the ninety percent (90%) cap on the Federal 
share of assistance. Most commenters objected to various aspects

[[Page 19497]]

of the rule. Following is a summary of the comments and our responses.

Evaluation of Cost-share Adjustments

    One of the most frequent comments was that there was no evaluation 
or analysis of the original threshold for recommending cost-share 
adjustments, and therefore there is no basis for raising this threshold 
to current dollars. Further comments along this line argued that the 
proposed threshold fails to consider State capability and does not 
provide an incentive for mitigation. We acknowledge that there was no 
analysis of the original $64 per capita threshold for recommending 
cost-share adjustments. However, that threshold is widely recognized 
and we have used it consistently since 1985 when we recommended the 
first cost-share adjustment. We do not intend, and never intended, to 
measure State capability or to provide an incentive for mitigation 
through this rule. Rather, the $64 threshold is simply a yardstick to 
determine when the economic impact of a disaster is of such severity 
that it warrants recommendation for a cost-share adjustment. We are 
quite willing to work with our State partners to identify capability or 
mitigation measures that might justify consideration of a cost-share 
adjustment. However, we view that as a longer-term effort separate from 
this rule. With respect to measuring economic impact, no commenters 
offered alternatives to the use of a per capita impact although two did 
suggest that we lower the threshold to $50 per capita. We believe 
instead that the 1985 threshold should be brought up to current dollars 
and adjusted annually using the Consumer Price Index for All Urban 
Consumers, since that is the legislative basis for annually adjusting 
the small project grants under the Public Assistance Program and grants 
under the Individual and Family Grant Program.

Presidential Discretion for Cost-share Adjustments

    Several commenters noted that the threshold for granting cost-share 
adjustments unwisely limits Presidential discretion, and fails to 
account for the unique circumstances of a disaster. We believe that the 
rule adequately allows for Presidential discretion. First, the wording 
of the rule has been revised to state that we would recommend to the 
President when a cost-share adjustment is warranted in recognition of 
the fact that the President retains the authority for actually granting 
cost-share adjustments. Secondly, the rule clearly recognizes that, 
irrespective of the economic threshold established here, the President 
may continue the practice of granting up to one hundred percent (100%) 
Federal funding for emergency work when he believes such action is 
warranted in the early days of the disaster.

Multiple Disasters

    Several commenters noted that the rule contains no provision for 
multiple disasters within a State. We agree, and have revised the rule 
to state that we will consider the effect of major disaster 
declarations in a State within the preceding twelve months. The final 
rule does not specifically indicate how we will consider multiple 
disasters because that would depend on the circumstances. We need to 
consider the timing of the disasters, the size, and the location when 
we review the impact of multiple disasters. For example, two very large 
disasters that strike the same area of a State might have a much 
greater economic impact than widely disbursed small disasters in the 
State even though the cumulative per capita impact might be similar.

Statewide Population Factors

    A number of other commenters noted that the per capita threshold 
should consider the relative densities within a State, or should be 
based on the county and not on statewide population. We will continue 
to base the threshold on the statewide population to reflect the 
supplemental nature of Federal disaster assistance and the State's 
preeminent role in this partnership. The declaration process itself 
analyzes the localized impacts of the disaster when we recommend which 
counties should be granted Federal disaster assistance. If a State 
wishes to adjust the nonfederal cost-share burden in certain areas of 
the State it can do so through the State/applicant split of the 
nonfederal cost-share.

Actual Stafford Act Obligations To Measure per Capita Impact

    Several commenters noted that the nonfederal share and State 
administrative costs should be included in the calculation of statewide 
per capita impact, and that the threshold should be based on estimates. 
We currently consider only actual obligations when determining the per 
capita impact of a disaster and will continue that practice. Actual 
obligations provide a better and more consistent measure of the impact 
of a disaster than do estimates, which can vary widely from disaster to 
disaster and can change dramatically over the course of the disaster. 
In order to be consistent in our method of measuring the per capita 
impact we will also continue our practice of measuring Stafford Act 
obligations only. State administrative costs have been and will 
continue to be considered when we measure per capita costs though we do 
not include our administrative costs in the calculation.

Limitation on Use of Sliding Scales

    Three commenters noted that Sec. 320 of the Stafford Act precludes 
any geographic area from receiving assistance under the Act solely by 
virtue of an arithmetic formula or sliding scale based on income or 
population. We are well aware of this provision of the Act but do not 
violate it because the rule does not prohibit any geographic area from 
receiving assistance under the Act. The rule merely determines when a 
more favorable cost-share adjustment may be recommended.

Gross Domestic Product as a Measure of Impact

    One commenter noted that in the 1993 floods that affected nine 
Midwestern States the President used 0.1 percent of the gross domestic 
product (GDP) as the measure to determine that a cost-share adjustment 
would be recommended for all nine States. That GDP measurement was not 
mentioned in the proposed rule because it has come to be a one-time-
only measurement. In more recent multi-state flood disasters in the 
Upper Midwest and Ohio River basins we considered only the per capita 
threshold as the basis for recommending a cost-share adjustment.

Timeframe for Implementation

    One commenter noted that the proposed timeframe for implementation 
is no longer relevant. We recognize that it is no longer relevant. Due 
to the length of time for publication, comment and review of comments, 
the timeframe for implementation of the new threshold will now begin in 
calendar year 1999 on May 21, 1999 and not in fiscal year 1998. The 
phase-in period to bring the threshold up to current dollars has also 
been extended to address concerns about the increase in the threshold.

National Environmental Policy Act

    44 CFR part 10 categorically excludes this rule from its 
requirements. We have not prepared an environmental assessment.

[[Page 19498]]

Executive Order 12866, Regulatory Planning and Review

    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, but 
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

    This rule involves no policies that have federalism implications 
under E.O. 12612, Federalism, dated October 16, 1987.

Executive Order 12778, Civil Justice Reform

    This rule meets the applicable standards of section 2(b)(2) of E.O. 
12778.

Congressional Review of Agency Rulemaking

    We have sent 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 establishes the financial criteria 
under which we would recommend a cost-share adjustment for permanent 
restorative work and for emergency work, and recommends capping the 
Federal cost-share for permanent restorative work at ninety percent 
(90%). The rule 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. 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

    Administrative practice and procedure, Disaster assistance, 
Intergovernmental relations, Reporting and recordkeeping requirements.

    Accordingly, 44 CFR Part 206 is 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. We are adding Sec. 206.47 to read as follows.


Sec. 206.47  Cost-share adjustments.

    (a) We pay seventy-five percent (75%) of the eligible cost of 
permanent restorative work under section 406 of the Stafford Act and 
for emergency work under section 403 and section 407 of the Stafford 
Act, unless the Federal share is increased under this section.
    (b) We recommend an increase in the Federal cost share from 
seventy-five percent (75%) to not more than ninety percent (90%) of the 
eligible cost of permanent work under section 406 and of emergency work 
under section 403 and section 407 whenever a disaster is so 
extraordinary that actual Federal obligations under the Stafford Act, 
excluding FEMA administrative cost, meet or exceed a qualifying 
threshold of:
    (1) Beginning in 1999 and effective for disasters declared on or 
after May 21, 1999, $75 per capita of State population;
    (2) Effective for disasters declared after January 1, 2000, and 
through December 31, 2000, $85 per capita of State population;
    (3) Effective for disasters declared after January 1, 2001, $100 
per capita of State population; and,
    (4) Effective for disasters declared after January 1, 2002 and for 
later years, $100 per capita of State population, adjusted annually for 
inflation using the Consumer Price Index for All Urban Consumers 
published annually by the Department of Labor.
    (c) When we determine whether to recommend a cost-share adjustment 
we consider the impact of major disaster declarations in the State 
during the preceding twelve-month period.
    (d) If warranted by the needs of the disaster, we recommend up to 
one hundred percent (100%) Federal funding for emergency work under 
section 403 and section 407, including direct Federal assistance, for a 
limited period in the initial days of the disaster irrespective of the 
per capita impact.

    Dated: April 14, 1999.
James L. Witt,
Director.
[FR Doc. 99-9934 Filed 4-20-99; 8:45 am]
BILLING CODE 6718-02-P