[Federal Register Volume 65, Number 167 (Monday, August 28, 2000)]
[Rules and Regulations]
[Pages 52260-52279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21926]



[[Page 52259]]

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Part V





Federal Emergency Management Agency





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44 CFR Chapter I and Part 295



Disaster Assistance: Cerro Grande Fire Assistance; Interim Final Rule

  Federal Register / Vol. 65, No. 167 / Monday, August 28, 2000 / Rules 
and Regulations  

[[Page 52260]]


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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Chapter I and Part 295

RIN 3067-AD12


Disaster Assistance: Cerro Grande Fire Assistance

AGENCY: Office of Cerro Grande Fire Claims, Federal Emergency 
Management Agency (FEMA).

ACTION: Interim final rule.

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SUMMARY: This interim final rule sets out the procedures for applicants 
to obtain assistance for injuries and property damage resulting from 
the Cerro Grande fire.

DATES: Effective date: August 28, 2000.
    Comments date: Please submit comments to FEMA on or before October 
27, 2000.

ADDRESSES: Please send comments in writing to the Rules Docket Clerk, 
Office of the General Counsel, Federal Emergency Management Agency, 500 
C Street SW., room 840, Washington, DC 20472, or (email) 
[email protected]. Please type or print in ink, and cite, where possible, 
the sections and paragraphs in this interim final rule to which each 
comment refers.

FOR FURTHER INFORMATION CONTACT: For information on the rulemaking 
process, please contact Nathan Bergerbest, Office of the General 
Counsel, Federal Emergency Management Agency, 500 C Street SW., room 
840, Washington, DC 20472, (202) 646-2685, (telefax) (202) 646-4536, or 
(email) [email protected].
    For claims forms and customer service information, please contact 
the Office of Cerro Grande Fire Claims, P.O. Box 1480, Los Alamos, NM 
87544-1480, telephone 1-888-748-1853.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 13, 2000 President Clinton signed into law the Cerro Grande 
Fire Assistance Act (CGFAA), incorporated as Division C of Public Law 
106-246, the Military Construction Appropriations Act for Fiscal Year 
2001. The Congress passed the Act to compensate as fully as possible 
those parties who suffered injuries and damages from the Cerro Grande 
Fire.
    The Cerro Grande fire resulted from a prescribed fire ignited on 
May 4, 2000, by National Park Service fire personnel at the Bandelier 
National Monument, New Mexico under an approved prescribed fire plan. 
This fire burned approximately 47,750 acres in four counties and two 
Indian Pueblos, and destroyed over 200 residential structures.
    The CGFAA requires FEMA to design and administer a program for 
fully compensating those who suffered personal injury, property losses, 
business losses and financial losses resulting from the Cerro Grande 
Fire.
    In keeping with the letter and spirit of the legislation, FEMA 
intends to administer the CGFAA program with the utmost sensitivity for 
those who suffered from the fire. Our goal is to compensate Claimants 
for actual damages to the full extent permitted under the legislation.

II. Regulatory Approach

    The CGFAA requires that FEMA publish implementing regulations 
within 45 days of the date upon which the law was enacted. As permitted 
by the Administrative Procedure Act this regulation is being published 
as an interim final rule. FEMA will accept comments on the Interim 
Final Rule for a period of 60 days. After the close of the comment 
period we will review the comments, make changes to the rule based on 
the comments and our experience administering the interim final rule, 
and will publish a final rule.
    FEMA regrets that there was not enough time for a formal public 
notice and comment period prior to the publication of this rule. 
However, we want to assure prospective Claimants that this rule was not 
drafted in a vacuum. The drafting team reviewed the floor statements by 
members of the New Mexico congressional delegation and news accounts 
from the Los Alamos Monitor, the Santa Fe New Mexican, the Albuquerque 
Journal and the Albuquerque Tribune. The team also considered 
unsolicited letters submitted to the Rules Docket Clerk by fire 
survivors and others.\1\ David L. de Courcy, the designated Director of 
the Office of Cerro Grande Fire Claims, met with representatives of the 
State of New Mexico, the Pueblo of San Ildefonso and the Pueblo of 
Santa Clara, the four counties most immediately affected and the Cerro 
Grande Fire Survivors Association, to obtain input. FEMA also consulted 
with a number of Federal agencies, including the Department of Energy, 
the Department of the Interior and the Small Business Administration.
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    \1\ We will respond to these comments and suggestions in the 
preamble to the final rule. All letters submitted to the Rules 
Docket Clerk will be considered in preparing the final rule. Letters 
addressed to other FEMA personnel may not be entered into the Rules 
Docket. To be sure that your comments are considered in preparation 
of the final rule they should be mailed to the Rules Docket Clerk, 
Federal Emergency Management Agency, 500 C Street, SW, room 840, 
Washington, DC 20472, or sent by e-mail to [email protected].
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Sectional Analysis

    This is the portion of the preamble that discusses each subpart of 
the rule and explains the intent of selected sections. Terms that are 
capitalized in this part of the preamble are defined in Subpart F--
Sec. 295.50 of the rule.
    We invite comments on whether further explanation of any of the 
sections in the rule is needed, whether or not we discuss the section 
in the preamble.

Subpart A--Overview of the Claims Process

    Subpart A provides an overview of the claims process established by 
the remainder of this rule.

Subpart B--Bringing a Claim Under the CGFAA

    Subpart B explains procedural issues involved in filing a claim 
under the CGFAA. The act requires that Claimants make a binding, 
irrevocable choice to present all of their claims against the United 
States through one of three mechanisms. These mechanisms are (i) the 
CGFAA or (ii) the Federal Tort Claims Act or (iii) bringing a civil 
lawsuit against the United States (if authorized by another law). The 
only way to bring a claim under the CGFAA is to file a Notice of Loss 
with FEMA. FEMA can provide you with information on the CGFAA.
    Before passage of the CGFAA, the National Park Service opened a 
claims information office in Los Alamos. Potential claimants were 
encouraged to submit a Claims Information Form describing the nature 
and extent of their fire-related losses. These forms clearly stated 
that a person who submits a form has not made a claim against the 
United States. Anyone who submitted a Claims Information Form to the 
National Park Service is eligible to make a claim under the CGFAA, but 
must file a Notice of Loss with FEMA in order to do so.
    National Park Service claims personnel reported that some people 
desired to immediately file a Federal Tort Claims Act claim before they 
were aware of the option to bring a claim under the CGFAA. Section 
295.12(d) of this rule provides anyone who filed a Federal Tort Claims 
Act claim prior to August 28, 2000 with the opportunity to withdraw it 
not later than October 2, 2000 and to proceed under the CGFAA. The same 
opportunity is extended to anyone who brought a civil action against 
the United States prior to August 28, 2000 and is dismissed as a party 
by October 27, 2000. However, anyone who

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files a Federal Tort Claims Act claim or a civil action against the 
United States for fire-related claims on or after August 28, 2000 is 
barred from filing a Notice of Loss under the CGFAA and must seek 
compensation under one of the other mechanisms.
    FEMA has also decided to allow anyone who submits a Notice of Loss 
on or before October 1, 2000 to withdraw it not later than October 1, 
2000. This grace period was provided out of concern that some people 
may submit a Notice of Loss under the CGFAA before they have had an 
opportunity to read these regulations and learn more about the program. 
Anyone who withdraws a Notice of Loss on or before October 1, 2000 will 
be permitted to re-file under the CGFAA at a later date or pursue one 
of the other available remedies.
    Section 295.13 describes the procedures to be used by insurers (or 
other third parties with the rights of a subrogee) for submitting 
subrogation claims. The procedures described in subsections (c) through 
(f) of Sec. 295.10 apply with equal vigor to subrogation claims. No 
subrogation claim will be considered unless the submitting party elects 
the CGFAA as its exclusive mechanism for seeking compensation from the 
United States for all Cerro Grande Fire-related subrogation claims and 
any other Cerro Grande Fire-related losses.
    Section 295.14 prohibits assignment of claims. It also prohibits 
assignment of the right to receive payment for claims. FEMA intends to 
make CGFAA compensation payments only to the injured Claimant.

Subpart C--Allowable Compensation

    Subpart C describes the compensation available under the CGFAA. 
Section 104(c)(3) of the CGFAA limits payments under the act to 
``actual compensatory damages measured by injuries suffered.'' Section 
295.21(a) of the rule defines the term ``compensatory damages.'' We 
view the terms ``compensation,'' ``damages'' and ``compensatory 
damages'' under the CGFAA as synonyms and use them interchangeably in 
the rule. FEMA may only compensate Claimants for damages that resulted 
from the Cerro Grande Fire.
    Section 295.21(b) provides that FEMA will not reimburse Claimants 
for attorney fees or agent fees. Our treatment of attorney and agent 
fees is consistent with Sec. 104(j) of the CGFAA. Section 104(j) limits 
the fees that an attorney or agent may charge a client. It does not 
provide that FEMA will reimburse Claimants for attorney or agent fees. 
Section 291.21(b) also provides that FEMA will not reimburse Claimants 
for taxes due as a consequence of receiving a payment under the CGFAA. 
Claimants are advised to consult with their tax advisors about whether 
any taxes will be due as a consequence of receiving a CGFAA payment. 
FEMA cannot provide tax information or advice.
    Sections 295.21(d) through (i) explain how FEMA plans to approach 
the types of claims that we expect to encounter most frequently. We 
made a deliberate choice to address some, but not all, of the several 
categories of damages allowable under Section 104(d)(4) of the Act. The 
reader should not infer an intention to limit the right of Claimants 
from this decision. Claimants may recover all damages allowable under 
Section 104(d)(4) of the Act. We also chose not to speculate about 
damage theories that cannot be accommodated under the CGFAA. We invite 
your comments on this approach.
    We encourage Claimants to include all of their fire-related losses 
in the claim. Each claim will be reviewed on its unique facts and 
merits. Generally speaking, we will determine compensatory damages in 
accordance with the laws of the State of New Mexico, unless the CGFAA 
is more generous. If we deny a claim, we will explain our reasons for 
doing so.
    Section 295.21(d) explains our approach to calculating 
``replacement costs'' for those who lost their homes. Replacement cost 
means whatever it reasonably costs a homeowner to restore his or her 
home and lot to pre-fire condition. We will calculate replacement costs 
using post-fire construction costs in northern New Mexico. We will 
compensate homeowners to rebuild their dwellings in accordance with 
whatever building codes and standards are applicable at the time that 
their claim is processed, regardless of whether the destroyed dwelling 
was in compliance with codes and standards before the fire.
    FEMA plans to make a replacement cost award to each Claimant whose 
home was destroyed by the fire, whether or not the homeowner elects to 
rebuild. The homeowner is free to spend this money as he or she sees 
fit. In order to process claims within the six-month time frame 
anticipated by the CGFAA, FEMA may be required to estimate a 
homeowner's replacement costs well before construction is completed. 
Homeowners who decide to rebuild and later find that their actual 
replacement costs exceeded FEMA's estimate may supplement or reopen 
their claims under Secs. 295.33 and 295.34 of this rule. We request 
comments on how long a period should be allowed for homeowners to be 
able to reopen their claims for this purpose.
    Compensation for mitigation under Sec. 295.21(d) is only available 
for homeowners who elect to rebuild. FEMA may award compensation over 
and above replacement costs for the cost of mitigation measures that 
will reduce the property's vulnerability to future risks of wildfire, 
flood or other natural hazard related to the Cerro Grande Fire. 
Homeowners are encouraged to consider rebuilding to the standards 
contained in the International Building Code 2000 and the Uniform Fire 
Code 2000, regardless of whether these codes have been adopted in their 
communities. Homeowners who wish to avail themselves of the opportunity 
to receive a mitigation award must notify FEMA well in advance of 
beginning construction. Any applicable environmental or historic 
preservation review of the homeowner's proposed mitigation expenditure 
must be completed before construction starts.
    Section 295.21(i) addresses compensation to Indian tribes, Tribal 
Members and households that include one or more Tribal Members for 
subsistence losses. Section 295.21(i) does not address the right of 
Indian tribes to seek compensation for tribal property that was damaged 
or destroyed by the fire. These losses may be more appropriately 
characterized as ``property losses,'' ``business losses'' or 
``financial losses,'' (rather than subsistence losses) and may be 
compensated under other provisions of the CGFAA. However, FEMA would 
appreciate comments directed to this issue. The definition of Injured 
Person that appears in Sec. 295.50 establishes that Indian tribes that 
suffered losses resulting from the Cerro Grande Fire may seek 
compensation under the CGFAA, notwithstanding that title to the 
property affected by the fire may be held in trust for the tribe by the 
United States.
    During the fire and its immediate aftermath, many individuals, 
charitable organizations, businesses, and other entities made voluntary 
donations of cash, goods, and services to assist the fire fighting and 
fire recovery effort and to help those affected by the fire. We request 
comment on whether there are any circumstances in which these voluntary 
contributions should be treated as ``losses'' appropriate for 
compensation under the CGFAA.
    Section 295.21(j) addresses various duplication of benefits issues. 
Claimants are not required to submit their claims to their insurance 
company nor are they required to pursue a settlement from their 
insurance company after filing a

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CGFAA claim. We encourage Claimants to continue to pursue their 
insurance claims because this may expedite the process of 
reconstructing documentation that will be helpful to the CGFAA process. 
If a Claimant has received or expects to receive a payment from an 
insurance company, the actual or anticipated payment must be disclosed.

Subpart D--Claims Evaluation

    Subpart D explains what will happen after the claim is filed. It 
explains how claims are to be documented, how we will evaluate the 
claim and how Claimants can obtain payment if they agree with our 
evaluation.
    Section 295.30 explains our approach to documentation of losses. 
Early in the process we expect the Claimant and the Claims Reviewer to 
confer on a strategy for documenting the claim. Flexibility is key. We 
expect that Claimants will provide whatever documentation is reasonably 
available. FEMA recognizes that some of a Claimant's documentation may 
have been destroyed by the fire. Claims Reviewers will assist Claimants 
in locating documentation that may be available from third-party 
sources. Claimants may be asked to sign release forms authorizing our 
Claims Reviewers to obtain information and documentation from third-
party sources.
    Early in the process, Claimants should also discuss with the Claims 
Reviewer whether FEMA will require an appraisal or other third-party 
opinion of value to evaluate a claim. FEMA may order appraisals and 
third-party opinions directly or request the Claimant to obtain them. 
Section 295.31 provides that if FEMA requests the Claimant to provide 
an appraisal or other third party opinion then FEMA will reimburse the 
Claimant for the reasonable cost of obtaining it.
    Section 295.32 explains how FEMA will evaluate claims. Claims 
Reviewers do not have the authority to determine whether a claim is 
eligible for compensation or how much compensation will be paid. Their 
role is to work with the Claimant to obtain relevant evidence, analyze 
the evidence and make a recommendation to an Authorized Official. Only 
the Authorized Official has the authority to decide claims.
    When the Authorized Official has decided a claim he or she will 
send a written notification to the Claimant's address as it appears in 
the Office of Cerro Grande Fire Claims records. The date that appears 
on this notification starts a 120-day clock during which a Claimant 
must either accept the finding or appeal it. The procedure for 
appealing an Authorized Official's Determination is explained in 
Sec. 295.41. If the Claimant has not acted at the end of this period he 
or she may forfeit further rights to appeal. The Director of the Office 
of Cerro Grande Fire Claims may modify this deadline if good cause 
exists.
    Section 104(d)(1)(A)(i) of the Act requires that FEMA determine and 
fix the amount to be paid for a claim within 180 days after the claim 
is submitted. To meet this deadline FEMA may ask Claimants to sign the 
Proof of Loss and require that our Authorized Officials render a 
definitive determination more expeditiously than some Claimants would 
prefer. We understand that some prospective Claimants would like to 
receive a partial payment on their claims but delay FEMA's definitive 
determination until they can completely inventory their losses or 
estimate their damages. Sections 295.33 and 295.34 are intended to 
address these concerns.
    Section 295.33 provides the flexibility for a Claimant to make 
additional claims after submitting a Proof of Loss. Section 295.34 
provides for reopening a claim after the Claimant has submitted a 
Release and Certification Form. We invite your comments about whether 
these provisions adequately address your concerns. Section 104(b) of 
the Act suggests that we cannot reimburse Claimants for losses that are 
brought to our attention after August 28, 2002, except for mitigation 
costs that may be incurred until August 28, 2003 under a more specific 
provision of the Act. We invite your comments on whether FEMA has 
reasonably interpreted the CGFAA as establishing August 28, 2002 as a 
firm deadline by which Claimants must notify FEMA of the amount of 
their total Cerro Grande Fire-related losses (except for mitigation 
costs).
    Section 295.35 requires that Claimants grant FEMA's Office of the 
Inspector General and the General Accounting Office access to the 
subject property and to records and information in their control that 
is relevant to their claims for purposes of investigation and audit. 
The CGFAA requires that the General Accounting Office, a legislative 
branch agency, audit claims and payments made under the CGFAA. FEMA's 
Office of the Inspector General is responsible for investigating 
charges of fraud and abuse and auditing FEMA's programs.
    Section 295.36 addresses confidentiality of information provided by 
Claimants. The Privacy Act protects the confidentiality of information 
provided by individual Claimants. This information may only be 
disclosed with the consent of the Claimant or pursuant to a routine 
use, which has been disclosed to the public. FEMA has published a 
separate notice in today's Federal Register that addresses Privacy Act 
protection for records maintained by the Office of Cerro Grande Fire 
Claims. Confidential, proprietary and trade secret information provided 
by entities, such as businesses, tribes and government agencies, are 
not eligible for Privacy Act protection but may be exempt from 
disclosure under the Freedom of Information Act. Non-individual 
Claimants are encouraged to discuss the need to protect confidential 
information from disclosure with FEMA before the information is 
submitted. FEMA may not be able to prevent the disclosure of this 
information unless we are aware of its confidential nature.

Subpart E--Dispute Resolution

    Subpart E discusses a Claimant's rights if he or she disagrees with 
our evaluation of the claim. Claimants are afforded a right to appeal 
our initial determination to the Director of the Office of Cerro Grande 
Fire Claims. This is referred to as an Administrative Appeal. If the 
Claimant is dissatisfied with the Administrative Appeal decision he or 
she may put the matter to binding arbitration or seek judicial review 
in federal court.
    Section 295.41 describes the Administrative Appeal process. If a 
Claimant disagrees with the conclusions of FEMA's Authorized Official 
under Sec. 295.32 he or she must pursue an Administrative Appeal before 
initiating arbitration or seeking judicial review. Only the 
Administrative Appeal decision constitutes the final decision of the 
Director for purposes of Section 104(d)(2)(B) and 104(i)(1) of the Act. 
The Office of Cerro Grande Fire Claims plans to establish a voluntary 
mediation option for Claimants that would prefer to seek a negotiated 
settlement of the claim.
    Section 295.41(d) allows the Claimant to present any relevant 
factual evidence concerning the issues under appeal, even if it was not 
presented earlier. FEMA requests that Claimants provide the Claims 
Reviewer with all relevant evidence supporting the claim. Our goal is 
to render equitable compensation decisions the first time, not to 
encourage Administrative Appeals or further proceedings.
    We note that while Sec. 295.41(d) allows Claimants to submit 
factual evidence in support of their claim for the first time in the 
Administrative Appeal, Claimants who wish to raise new claims or damage 
theories after submitting a Proof of Loss should ask the Director of 
the Office of

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Cerro Grande Fire Claims to supplement their claim under Sec. 295.33 of 
these regulations.
    Section 104(h)(3) of the CGFAA requires that FEMA establish 
procedures under which a dispute regarding a claim may be settled by 
arbitration. Section 295.42 establishes these procedures. Any issue 
decided in an Administrative Appeal may be referred to binding 
arbitration. Arbitration decisions are not subject to any further 
appeal or review and are binding on the Claimant and on FEMA. Section 
295.42(d) provides that one arbitrator will hear disputes. FEMA 
considered the alternative of using panels of three arbitrators. After 
consulting with alternative dispute resolution experts in the public 
and private sectors our Office of Dispute Resolution determined that 
disputes involving $5 million or less are rarely decided by more than 
one arbitrator. FEMA anticipates that most claims submitted under the 
CGFAA will fall well below this threshold. We invite your comments on 
whether the size and composition of arbitration panels should vary 
depending upon the amount in dispute or the complexity of the issues.
    Section 295.43 discusses judicial review of the Administrative 
Appeal decision. Claimants should be aware that the Sec. 104(i)(3) of 
the CGFAA requires that the court uphold the Administrative Appeal 
decision if it is supported by substantial evidence on the record 
considered as a whole.

Administrative Procedure Act Determination

    Section 104(f)(1) of the CGFAA, requires that notwithstanding any 
other provision of law, not later than 45 days after the date of 
enactment of this Act the Director of FEMA is to publish interim final 
regulations for the processing and payment of claims under the Act. In 
order to comply with that mandate and in order to expedite the receipt 
and processing of Cerro Grande fire assistance applications, FEMA is 
publishing this interim final rule without opportunity for prior public 
comment under the Administrative Procedure Act (APA), 5 U.S.C. 553. In 
accordance with 5 U.S.C. 553(d)(3) I find that there is good cause for 
the interim final rule to take effect immediately upon publication in 
the Federal Register in order to meet the urgent needs of those injured 
as a result of the Cerro Grande fire and to comply with the mandates of 
the Cerro Grande Fire Assistance Act..
    We invite comments of the public on this interim final rule. Please 
send comments to FEMA in writing on or before Friday, October 27, 2000. 
After we have reviewed and evaluated the comments we will publish a 
final rule as required by the APA.

National Environmental Policy Act

    This interim final rule involves claims and payment of claims to 
persons injured as a result of the Cerro Grande fire. Such claims will 
be paid with no substantive relation to the claimants' subsequent use 
of the money for prescribed activities and with no limitations on how 
claimants will use the money. Such activities under the rule are not 
subject to the National Environmental Policy Act (NEPA).
    The interim final rule provides for compensation to mitigate future 
damages. We cannot identify what those expenditures will be and cannot 
perform a NEPA review at this stage. As claimants propose mitigation 
expenditures each will be subject to NEPA review. We have not prepared 
an environmental assessment of this interim final rule.

Paperwork Reduction Act.

    This interim rule contains several information collection 
requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35). Under the Paperwork Reduction Act, a person may not be 
penalized for failing to comply with an information that does not 
display an currently valid OMB control number.
    FEMA submitted to OMB for emergency approval the Notice of Loss 
form (see below) to allow FEMA to begin accepting claims prior to 
publication of these regulations. On August 9, 2000, OMB assigned the 
Notice of Loss information collection OMB control number 3067-0280, 
expiring on November 30, 2000. FEMA will resubmit the Notice of Loss 
information collection for a three-year approval after the 60-day 
comment period, in accordance with the procedures described in 5 CFR 
1320.12. FEMA will separately request approval for the other 
information collections in this interim rule, as required by 5 CFR 
1320.12. FEMA will not implement these other information collection 
requirements until OMB approves them and assigns them an OMB control 
number. FEMA will publish a separate Federal Register notice when the 
information collections are submitted to OMB and again when OMB has 
approved them.
    FEMA therefore requests comments on the information collections in 
this interim final rule.
    Supplementary Information. This collection is in accordance with 
FEMA's responsibilities under 44 CFR 295 to provide assistance to 
claimants who were injured as a result of the Cerro Grande fire. The 
funds that we provide will help to alleviate the suffering and damage 
that resulted from the Cerro Grande fire.
    Collection of Information.
    Title. Cerro Grande Fire Assistance Claims.
    Type of Information Collection. New.
    (1) Information Collection.
    (i) Notice of Loss under the Cerro Grande Fire Assistance Act.
    Abstract.
    (1) Notice of Loss. The Notice of Loss under the Cerro Grande Fire 
Assistance Act is a form through which a claimant makes a binding, 
conclusive and irrevocable election to have all Injuries resulting from 
the Cerro Grande Fire reviewed by FEMA for possible compensation under 
the CGFAA.
    (2) Subrogation Notice of Loss. The Subrogation Notice of Loss 
under the Cerro Grande Fire Assistance Act is a form through which an 
insurance company makes a binding, conclusive and irrevocable election 
to have all subrogation claims of the company resulting from the Cerro 
Grande Fire reviewed by FEMA for possible compensation under the CGFAA.
    (3) Release and Certification Form. The Release and Certification 
form is a document prescribed by Sec. 104(e) of the CGFAA that a 
Claimant must complete and return in order to receive payment of 
compensation awarded pursuant to the CGFAA. We invite comments on 
whether this form is a collection of information or an affidavit 
exempted from the Paperwork Reduction Act.
    (4) Interview. Once a Claimant files a Notice of Loss, the Claimant 
and the Claims Reviewer will meet to discuss the nature of the loss 
sustained by the Claimant, the documentation that the Claimant has or 
can obtain, insurance claims made, to be made, or insurance payments 
that the Claimant has received, and additional documents, such as 
affidavits, that FEMA may need to substantiate the claims. FEMA 
estimates that this interview will take 1.5-2 hours, on average, and 
further estimates it will interview approximately 18,000 claimants, for 
a total hourly burden of 27,000 to 36,000 hours.
    (5) Documentation of Claims. Following the interview the Claimant 
and the Claims Reviewer will work both independently and together to 
obtain the documentation needed to substantiate the claims. We are not 
able to estimate with reasonable accuracy the

[[Page 52264]]

burden that this places on the Claimant. In many, if not most cases 
involving private homes we expect that Claimants will have information 
on their insurance coverage for their home and any vehicles, but 
generally will not have inventories or appraisals of the contents of 
their homes. In many cases, records of the contents of the homes may 
have been destroyed in the fire. For purposes of this Act, we are 
estimating that eligible claimants will average 20 hours in order to 
document their losses, for a total hourly burden of 360,000 hours.
    (6) Proof of Loss. The Proof of Loss form is a statement, signed by 
a Claimant under penalty of perjury and subject to the provisions of 18 
U.S.C. 1001 that the claim in true and correct, attesting to the nature 
and extent of the Claimant's injuries.
    Affected Public: State, local and tribal governments, private 
sector businesses, not-for-profit organizations, and individuals and 
households. The forms are used to allow claimants to apply for 
compensation under the Cerro Grande Fire Assistance Act.
    Estimated Total Annual Burden Hours.

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                                                                 Number of     Avg. hours per      Avg. annual
                     Type of collection                         respondents       response        burden hours
----------------------------------------------------------------------------------------------------------------
Notice of loss..............................................          18,000               .75            13,500
Subrogation notice of loss..................................          12,000               1.5            18,000
Interview...................................................          18,000             1.5-2     27,000-36,000
Documentation of claims.....................................          18,000                20           360,000
Proof of loss...............................................          18,000               0.5             9,000
----------------------------------------------------------------------------------------------------------------

    Estimated Cost. FEMA has not calculated the costs associated with 
this collection due to the emergency nature of the funding availability 
and claim approval process.
    Other Forms and Documentation. FEMA will require other forms, such 
as Proof of Loss, Release and Certification, and other collections of 
information, including documentation for claims and mitigation 
expenditures, and interviews. We will process these collections of 
information when developed under OMB's clearance procedures in 
accordance with OMB regulations.
    Comments: We ask for written comments to: (a) Evaluate whether the 
proposed data collection is necessary for the Agency's proper 
performance of the program, including whether the information will have 
practical utility; (b) evaluate the accuracy of the Agency's estimate 
of the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used; (c) enhance the 
quality, utility, and clarity of the information to be collected; and 
(d) minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses. Please send comments on or before October 27, 
2000.

ADDRESSES: Interested persons should submit written comments to the 
Desk Officer for the Federal Emergency Management Agency, Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
725--17th Street, NW., Washington, DC 20503 on or before Wednesday, 
September 27, 2000. We will continue to accept comments through Friday, 
October 27, 2000. Please send written comments on the collection of 
information, including our burden estimates to Muriel B. Anderson, FEMA 
Information Collections Officer, Federal Emergency Management Agency, 
500 C Street, SW., room 316, Washington, DC 20472, (telephone) (202) 
646-2625, (telefax) (202) 646-3524, or (e-mail) 
[email protected].

FOR FURTHER INFORMATION CONTACT:  Contact Ms. Anderson at (202) 646-
2625 for copies of the proposed collection of information.

Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866, 58 FR 51735, October 4, 1993, a 
significant regulatory action is subject to OMB review and the 
requirements of the Executive Order. The Executive Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    We have determined that this rule is a ``significant regulatory 
action'' under the terms of Executive Order 12866. It will have an 
annual effect on the economy of more than $100 million, but we do not 
expect it to affect adversely in a material way the economy, a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local, or tribal governments or 
communities. The rule and its underlying statute are designed to 
compensate individuals, businesses, not-for-profit organizations, 
State, local, and tribal governments or communities for injuries as a 
result of the Cerro Grande fire. Because of the emergency nature of 
this interim final rule we have not prepared a regulatory analysis of 
the rule.
    The Office of Management and Budget (OMB) has reviewed the interim 
final rule under Executive Order 12866.

Executive Order 12898, Environmental Justice

    Under Executive Order 12898, ``Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations,'' 59 FR 7629, February 16, 1994, we have undertaken to 
incorporate environmental justice into our policies and programs. The 
Executive Order requires each Federal agency to conduct its programs, 
policies, and activities that substantially affect human health or the 
environment, in a manner that ensures that those programs, policies, 
and activities do not have the effect of excluding persons from 
participation in, denying persons the benefits of, or subjecting 
persons to discrimination because of their race, color, or national 
origin. No action that we can anticipate under the interim final rule 
will have a disproportionately high and adverse human health and 
environmental effect on any segment of

[[Page 52265]]

the population. In addition, the interim final rule does not impose 
substantial direct compliance costs on those communities. Accordingly, 
the requirements of the Executive Order do not apply to this interim 
final rule.

Executive Order 13084, Consultation and Coordination with Indian 
Tribal Governments

    Under Executive Order 13084, FEMA may not issue a regulation that 
is not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or we consult with those 
governments. If FEMA complies by consulting, Executive Order 13084 
requires us to provide to the Office of Management and Budget a 
description of the extent of our prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires us to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    This interim final rule is required by statute and will 
significantly and uniquely affect two pueblos and individual members of 
communities of Indian tribal governments through its compensation for 
damages suffered by the Pueblos and their members, including 
compensation for lost subsistence from hunting, fishing, firewood 
gathering, timbering, grazing or agricultural activities conducted on 
land damaged by the Cerro Grande fire. The rule will not impose 
substantial direct compliance costs on those communities. Accordingly, 
the requirements of section 3(b) of Executive Order 13084 do not apply.
    Section 104(g) of the Act requires the Director to consult with 
tribal authorities to ensure the efficient administration of the claims 
process and to provide for local concerns. On July 27, 2000 
representatives of three of the four directly affected counties and one 
of two affected pueblos, the Santa Clara Pueblo, the chief of staff of 
the Governor Johnson of New Mexico, and representatives of the New 
Mexico congressional staff met with FEMA, OMB, and Department of Energy 
staff to discuss the draft rule and procedures. Representatives of the 
San Ildefonso Pueblo were invited but were unable to attend.
    David L. de Courcy, the designated director of FEMA's Office of 
Cerro Grande Fire Claims, chaired the meeting. The meeting provided an 
overview of the claims process for those who suffered losses from the 
Cerro Grande Fire. Mr. de Courcy stressed his intention to work 
directly with the Pueblos to address their needs, particularly the 
impact of the fire on the Pueblos' cultures. Following the meeting Mr. 
de Courcy met with representatives of the San Ildefonso Pueblo. Mr. de 
Councy has also met in New Mexico with the Governors of the Santa Clara 
Pueblo and the San Ildefonso Pueblo.

Executive Order 13132, Federalism

    This Executive Order sets forth principles and criteria that 
agencies must adhere to in formulating and implementing policies that 
have federalism implications, that is, regulations that have 
substantial direct effects on the States, or on the distribution of 
power and responsibilities among the various levels of government. 
Federal agencies must closely examine the statutory authority 
supporting any action that would limit the policymaking discretion of 
the States, and to the extent practicable, must consult with State and 
local officials before implementing any such action.
    We have reviewed this interim final rule under E.O. 13132 and have 
determined that the rule does not have federalism implications as 
defined by the Executive Order. The rule establishes the procedures and 
criteria for claimants, including the State of New Mexico, to apply for 
Federal compensation for injuries as a result of the Cerro Grande fire. 
Inasmuch as the benefits will derive from a Federal program exclusively 
administered by the Federal Government for the benefit of State, local 
and tribal governments, individuals, and certain not-for-profit 
organizations, the rule neither limits nor preempts any policymaking 
discretion of the State that the State might otherwise have.
    Nevertheless, under the mandate of the CGFAA we have consulted with 
State, local and tribal officials while preparing this rule, as 
outlined above in our discussion of our meeting on July 27, 2000. Mr. 
de Courcy has also met in New Mexico with representatives of the State 
of New Mexico, the Pueblo of San Ildefonso and the Pueblo of Santa 
Clara, the four counties most immediately affected and the Cerro Grande 
Fire Survivors Association, to obtain input. FEMA also consulted with a 
number of Federal agencies, including the Department of Energy, the 
Department of the Interior and the Small Business Administration.

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, Public Law 104-121. The rule is a ``major rule'' within the 
meaning of that Act. It will result in an annual effect on the economy 
of $100,000,000 or more. However, we do not expect that it will result 
in a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions. Nor do we expect that it will 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.
    In compliance with section 808(2) of the Congressional Review of 
Agency Rulemaking Act, 5 U.S.C. 808(2), for good cause we find that 
notice and public procedure on this interim final rule are 
impracticable, unnecessary, or contrary to the public interest in light 
of the urgent requirement to meet the needs of persons injured as a 
result of the Cerro Grande fire and in order to comply with the 
mandates of the Cerro Grande Fire Assistance Act. Accordingly, this 
interim final rule is effective on Monday, August 28, 2000.

List of Subjects in 44 CFR Part 295

    Administrative practice and procedure, Aliens, Claims, Disaster 
assistance, Federally affected areas, Indians, Indians-lands, Indians-
tribal government, Organization and functions (Government agencies), 
Public lands, Reporting and recordkeeping requirements, State and local 
governments.

    Accordingly, the Federal Emergency Management Agency amends 44 CFR 
Chapter I as follows:
    1. By redesignating subchapter E (parts 300--399) as subchapter F.
    2. By adding a new Subchapter E, Cerro Grande Fire Assistance.
    3. By transferring reserved parts 295 through 299 to new subchapter 
E.
    4. By adding part 295 to subchapter E to read as follows:

[[Page 52266]]

SUBCHAPTER E--CERRO GRANDE FIRE ASSISTANCE

PART 295--CERRO GRANDE FIRE ASSISTANCE

Sec.
Subpart A--General
295.1   Purpose.
295.2   Policy.
295.3   Information and assistance.
295.4   Organization of the rule.
295.5   Overview of the claims process.
295.6   Partial payments.
Subpart B--Bringing a Claim under the CGFAA
295.10   Bringing a claim under the CGFAA.
295.11   Deadline for filing notice of loss.
295.12   Election of remedies.
295.13   Subrogation.
295.14   Assignments.
Subpart C--Compensation Available under the CGFAA
295.20   Prerequisite to compensation.
295.21   Allowable compensation.
Subpart D--Claims Evaluation
295.30   Establishing damages.
295.31   Reimbursement of claim expenses.
295.32   Determination of compensation due to claimant.
295.33   Supplementing claims.
295.34   Reopening a claim.
295.35   Access to records.
295.36   Confidentiality of information.
Subpart E--Dispute Resolution
295.40   Scope.
295.41   Administrative appeal.
295.42   Arbitration.
295.43   Judicial review.
Subpart F--Glossary
295.50   Definitions.

    Authority: Pub. L. 106-246, 114 Stat. 511, 584; Reorganization 
Plan No. 3 of 1978, 43 FR 41493, 3 CFR, 1978 Comp., p. 329.

Subpart A--General


Sec. 295.1  Purpose.

    This part implements the Cerro Grande Fire Assistance Act 
(``CGFAA''), Public Law 106-246, 114 Stat. 584, which requires that the 
Federal Emergency Management Agency (FEMA) establish a process to 
evaluate, process and pay claims injuries and property damage resulting 
from the Cerro Grande Fire.


Sec. 295.2  Policy.

    It is FEMA's policy to provide for the expeditious resolution of 
meritorious claims through a process that is administered with 
sensitivity to the burdens placed upon Claimants by the Cerro Grande 
Fire.


Sec. 295.3  Information and assistance.

    Information and assistance concerning the CGFAA is available from 
the Office of Cerro Grande Fire Claims (``OCGC''), Federal Emergency 
Management Agency, P.O. Box 1480, Los Alamos, New Mexico, 87544-1480, 
or telephone 1-888-748-1853. The Cerro Grande Fire Assistance site on 
the World Wide Web can be accessed at http://www.fema.gov/cerrogrande. 
In the interest of brevity, the provisions of the CGFAA are not 
restated in most instances. A copy of the CGFAA has been placed on the 
website and will be provided upon request.


Sec. 295.4  Organization of the rule.

    This part contains six subparts. Subpart A provides an overview of 
the CGFAA process. Subpart B describes the procedures for bringing a 
claim. Subpart C explains what compensation is available. Subpart D 
discusses the claims evaluation process. Subpart E explains the dispute 
resolution process. Subpart F contains a glossary in which various 
terms used in the rule are defined.


Sec. 295.5  Overview of the claims process.

    (a) The CGFAA is intended to provide persons who suffered losses 
from the Cerro Grande Fire with a simple, expedited process to seek 
redress from the United States. In order to obtain benefits under this 
legislation, a person must submit all Cerro Grande Fire related claims 
against the United States to FEMA. A person who elects to proceed under 
the CGFAA is barred from bringing a claim under the Federal Tort Claims 
Act or filing a civil action against the United States for damages 
resulting from the Cerro Grande Fire. Judicial review of FEMA's 
decisions under the CGFAA is available.
    (b) The first step in the process is to file a Notice of Loss with 
OCGC. OCGC will provide the Claimant with a written acknowledgement 
that the claim has been filed and the claim number.
    (c) Shortly thereafter, a Claims Reviewer will contact the Claimant 
to review the claim and help the Claimant formulate a strategy for 
obtaining any necessary documentation. After the Claimant has had an 
opportunity to discuss the claim with the Claims Reviewer, a Proof of 
Loss will be presented to the Claimant for signature. After any 
necessary documentation has been obtained and the claim has been fully 
evaluated, the Claims Reviewer will submit a report to an Authorized 
Official.
    (d) The Authorized Official will review the report and determine 
whether compensation is due to the Claimant. The Claimant will be 
notified in writing of the Authorized Official's Determination. If the 
Claimant is satisfied with the decision, payment will be made after the 
Claimant returns a completed Release and Certification Form. If the 
Claimant is dissatisfied with the Authorized Official's Determination 
an Administrative Appeal may be filed with the Director of OCGC. If the 
Claimant remains dissatisfied after the appeal is decided, the dispute 
may be resolved through binding arbitration or heard in the United 
States District Court for the District of New Mexico.


Sec. 295.6  Partial payments.

    OCGC, on its own initiative, or in response to a request by a 
Claimant, may make one or more partial payments on the claim. A partial 
payment can be made if OCGC has a reasonable basis to estimate the 
Claimant's damages. Acceptance of a partial payment in no way affects a 
Claimant's ability to pursue an Administrative Appeal of the Authorized 
Official's Determination or to pursue other rights afforded by the 
CGFAA.

Subpart B--Bringing a Claim Under the CGFAA


Sec. 295.10  Bringing a claim under the CGFAA.

    (a) Any Injured Person may bring a claim under the CGFAA by filing 
a Notice of Loss. A claim submitted on any form other than a Notice of 
Loss will not be accepted.
    (b) A single Notice of Loss may be submitted on behalf of a 
Household containing Injured Persons provided that all Injured Persons 
on whose behalf the claim is presented are identified.
    (c) The Notice of Loss must be signed by each Claimant or by a duly 
authorized legal representative of each Claimant. If one is signing a 
Notice of Loss as the legal representative of a Claimant, the signer 
must disclose his or her relationship to the Claimant. FEMA may require 
a legal representative to submit evidence of authority.
    (d) Notice of Loss forms are available from OCGC by request. They 
may be obtained through the mail, in person at the OCGC office or by 
telephone request. The Notice of Loss form can also be downloaded from 
the Internet at http://www.fema.gov/ cerrogrande.
    (e) Notices of Loss may be filed with OCGC by mail to P.O. Box 
1480, Los Alamos, NM 87544-1480. OCGC is unable to accept Notices of 
Loss submitted by facsimile or e-mail.
    (f) A Notice of Loss is deemed to be filed on the date it is 
received by OCGC.


Sec. 295.11  Deadline for filing Notice of Loss.

    The deadline for filing a Notice of Loss is August 28, 2002. The 
CGFAA

[[Page 52267]]

establishes this deadline and does not provide any extensions of the 
filing deadline.


Sec. 295.12  Election of remedies.

    (a) By filing a Notice of Loss, an Injured Person waives the right 
to seek redress for Cerro Grande Fire related claims against the United 
States through the Federal Tort Claims Act or by filing a civil action 
authorized by any other provision of law.
    (b) A person who has filed a Notice of Loss on or before October 1, 
2000 may make a one-time election to withdraw the Notice of Loss 
without prejudice to his or her right to submit a subsequent Notice of 
Loss or pursue other remedies against the United States for Cerro 
Grande Fire related losses. The withdrawal must be made by written 
request, signed by the Claimant, and received by OCGC not later than 
October 1, 2000.
    (c) An Injured Person who files a Federal Tort Claims Act claim or 
who initiates a civil action against the United States or any officer, 
employee or agent of the United States relating to the Cerro Grande 
Fire on or after August 28, 2000 is not eligible under the CGFAA to 
file a Notice of Loss.
    (d) An Injured Person who filed before August 28, 2000 a Federal 
Tort Claims Act claim or a civil action against the United States for 
injuries, losses or damages relating to the Cerro Grande Fire may file 
a Notice of Loss provided that the Federal Tort Claims Act claim is 
withdrawn or the Injured Person is dismissed as a party to the civil 
action with prejudice not later than October 27, 2000. The withdrawal 
of a Federal Tort Claims Act claim must be in the form of a signed, 
written statement on a form provided by OCGC that is filed with OCGC 
not later than October 27, 2000. OCGC will promptly forward the 
original notice of withdrawal to the applicable federal agency and 
retain a copy in the Claimant's file.


Sec. 295.13  Subrogation.

    An insurer or other third party with the rights of a subrogee, who 
has compensated an Injured Person for Cerro Grande Fire related losses, 
may file a Subrogation Notice of Loss under the CGFAA for the 
subrogated claim. An insurer or other third party with the rights of a 
subrogee may file a Subrogation Notice of Loss without regard to 
whether the Injured Party who received payment from the insurer or 
third party filed a Notice of Loss. By filing a Subrogation Notice of 
Loss for any subrogated claim, the insurer or third party elects the 
CGFAA as its exclusive remedy against the United States for all 
subrogated claims arising out of the Cerro Grande Fire. Subrogation 
claims must be made on a Subrogation Notice of Loss form furnished by 
OCGC.


Sec. 295.14  Assignments.

    Assignment of claims and the right to receive compensation for 
claims under the CGFAA is prohibited and will not be recognized by 
FEMA.

Subpart C--Compensation Available Under the CGFAA


Sec. 295.20  Prerequisite to compensation.

    In order to receive compensation under the CGFAA a Claimant must be 
an Injured Person who suffered an Injury as a result of the Cerro 
Grande Fire and sustained damages.


Sec. 295.21  Allowable compensation.

    (a) Allowable compensation. The CGFAA provides for the payment of 
compensatory damages. Compensatory damages are ``real, substantial and 
just money damages established by the Claimant in compensation for 
actual or real injury or loss.'' In general, an Injured Person will be 
compensated for Injuries to the same extent that the plaintiff in a 
successful tort action brought against a private party under the laws 
of the State of New Mexico would be compensated. In addition the CGFAA 
permits FEMA to compensate Injured Parties for certain categories of 
``loss of property,'' ``business loss,'' and ``financial loss,'' which 
are enumerated in the CGFAA. Damages must be reasonable in amount. 
Claimants must mitigate their damages, if possible.
    (b) Exclusions. Except as otherwise provided in the CGFAA, a 
Claimant will not receive compensation for any injury or damage that is 
not compensable under the Federal Tort Claims Act and New Mexico law. 
Punitive damages, interest on claims, attorney's fees, taxes that may 
be owed by a Claimant as a consequence of receiving an award, and 
agent's fees under the CGFAA are not recoverable from FEMA.
    (c) Damages arising in the future. In the event that a lump sum 
payment is awarded to a Claimant for future damages the amount of the 
payment shall be discounted to present value.
    (d) Destruction of home. Compensatory damages for the destruction 
of a home may include the reasonable cost of reconstructing a home 
comparable in design, construction materials, size and improvements to 
the home that was lost taking into account post-fire construction costs 
in the local area and current building codes and standards. 
Compensatory damages may also include the cost of removing debris and 
burned trees, landscaping, stabilizing the land, replacing household 
contents, and compensation for any decrease in the value of land on 
which the structure sat pursuant to subparagraph (e) of this section. 
If requested by a Claimant, a compensatory damage award may also 
include the reasonable cost of mitigation measures that will reduce the 
property's vulnerability to the future risk of wildfire, flood or other 
natural hazards related to the Cerro Grande Fire. The mitigation 
measures must be approved by the local government with land use 
regulatory jurisdiction over the property and must also be reviewed by 
FEMA under applicable environmental and historic preservation laws. A 
Claimant who receives funds for mitigation measures is required to 
construct the mitigation measures and will be required to repay to FEMA 
mitigation funds that are not properly spent.
    (e) Reduction in the value of land. Compensatory damages may be 
awarded for reduction in the value of land that a Claimant owned prior 
to the fire if:
    (1) The Claimant sells the land in a good faith arm's length 
transaction that is closed not later than August 28, 2002 and realizes 
a loss in the immediate pre-fire value; or
    (2) The Claimant can establish that the value of the land was 
diminished as a result of the Cerro Grande Fire.
    (f) Destruction of unique items of personal property. Compensatory 
damages may be awarded for unique items of personal property that were 
destroyed as a result of the Cerro Grande Fire. If the item can be 
replaced in the current market, the cost to replace the item will be 
awarded. If the item cannot be replaced in the current market, its fair 
market value on the date it was destroyed will be awarded.
    (g) Disaster recovery loans. FEMA will reimburse Claimants awarded 
compensation under the CGFAA for interest paid on Small Business 
Administration disaster loans and similar loans obtained after May 4, 
2000. Interest will be reimbursed for the period beginning on the date 
that the loan was taken out and ending on the date upon which the 
Claimant receives a compensation award (other than a partial payment). 
Claimants are required to use the proceeds of their compensation awards 
to repay Small Business Administration disaster loans. FEMA will 
cooperate with the Small Business Administration to formulate 
procedures for assuring that Claimants repay Small Business 
Administration disaster loans contemporaneously with

[[Page 52268]]

the receipt of CGFAA compensation awards.
    (h) Mitigation. FEMA may compensate Claimants for the cost of 
reasonable and cost-effective efforts incurred on or before August 28, 
2003 to mitigate the heightened risks of wildfire, flood or other 
natural hazards resulting from the Cerro Grande Fire that are 
consistent with a FEMA-approved Mitigation Compensation Plan. The 
Director of FEMA reserves the discretionary authority provided by the 
CGFAA to determine the reasonableness of each mitigation claim. 
Mitigation Compensation Plans and requests by Claimants for mitigation 
funds under this section are subject to review under the National 
Environmental Policy Act and other applicable environmental and 
historic preservation laws.
    (i) Subsistence. (1) Allowable damages. FEMA may reimburse an 
Indian tribe, a Tribal Member or a Household Including Tribal Members 
for the reasonable cost of replacing Subsistence Resources customarily 
and traditionally used by the Claimant on or before May 4, 2000, but no 
longer available to the Claimant as a result of the Cerro Grande Fire. 
For each category of Subsistence Resources, the Claimant must elect to 
receive compensatory damages either for the increased cost of obtaining 
Subsistence Resources from lands not damaged by the Cerro Grande Fire 
or for the cost of procuring substitute resources in the cash economy. 
Damage awards will be made in the form of lump sum cash payments to 
eligible Claimants.
    (2) Proof of subsistence use. FEMA may consider evidence submitted 
by Claimants, Indian Tribes and other knowledgeable sources in 
determining the nature and extent of a Claimant's subsistence uses.
    (3) Duration of damages. Compensatory damages for subsistence 
losses will be paid for the period between May 4, 2000 and the date 
upon which Subsistence Resources can reasonably be expected to return 
to the level of availability that existed prior to the Cerro Grande 
Fire. FEMA may rely upon the advice of experts in making this 
determination.
    (j) Duplication of benefits. The CGFAA allows FEMA to compensate 
Injured Parties only if their damages have not been paid or will not be 
paid by insurance or a third party.
    (1) Insurance. Claimants who carry insurance will be required to 
disclose the name of the insurance carrier and the nature of the 
insurance and provide OCGC with such insurance documentation as OCGC 
reasonably requests.
    (2) Coordination with FEMA's Public Assistance program. Injured 
Parties eligible for disaster assistance under FEMA's Public Assistance 
Program are expected to apply for all available assistance. 
Compensation will not be awarded under the CGFAA for:
    (i) Emergency costs that are eligible for reimbursement under the 
Public Assistance Program or
    (ii) Losses that are eligible for repair, restoration or 
replacement under the Public Assistance Program or
    (iii) Costs or charges determined excessive under the Public 
Assistance Program.
    (3) Benefits provided by non-governmental organizations and 
individuals. Unless otherwise provided by these regulations, disaster 
relief payments made to a Claimant by a non-governmental organization 
or an individual, other than wages paid by the Claimant's employer or 
insurance payments, will be disregarded in evaluating claims and need 
not be disclosed to OCGC by Claimants.
    (4) Benefits provided by FEMA's Individual Assistance program. 
Compensation under the CGFAA will not be awarded for losses or costs 
that have been reimbursed under the Individual and Family Grant Program 
or any other FEMA Individual Assistance Program.
    (5) Worker's compensation claims. Individuals who have suffered 
injuries that are compensable under State or Federal worker's 
compensation laws must apply for all benefits available under such 
laws.

Subpart D--Claims Evaluation


Sec. 295.30  Establishing damages.

    At a minimum, Claimants will be required to attest to the nature 
and extent of each Injury for which compensation is sought in the Proof 
of Loss. The Proof of Loss must be signed under penalty of perjury and 
subject to the provisions of 18 U.S.C. 1001, which establishes 
penalties for false statements. Claimants may be required to provide 
other documentation, which is reasonably available, to corroborate the 
nature, extent and value of their losses. Claimants may submit for the 
Administrative Record any documents that they believe are relevant to 
their claim.


Sec. 295.31  Reimbursement of claim expenses.

    FEMA will reimburse Claimants for the reasonable costs they incur 
in copying documentation requested by OCGC. FEMA will also reimburse 
Claimants for the reasonable costs they incur in providing appraisals, 
or other third-party opinions, requested by OCGC. FEMA will not 
reimburse Claimant for the cost of appraisals, or other third party 
opinions, not requested by OCGC.


Sec. 295.32  Determination of compensation due to claimant.

    (a) Authorized Official's report. After OCGC has evaluated all 
elements of a claim as stated in the Proof of Loss, the Authorized 
Official will issue, and provide the Claimant with a copy of, the 
Authorized Official's Determination.
    (b) Claimant's options upon issuance of the Authorized Official's 
determination. Not later than 120 Days after the date that appears on 
the Authorized Official's Determination, the Claimant must either 
accept the findings by submitting a Release and Certification Form to 
FEMA or initiate an Administrative Appeal in accordance with 
Sec. 295.41. The CGFAA requires that Claimants sign the Release and 
Certification Form in order to receive payment on their claims (except 
for partial payments). The Claimant will receive payment of 
compensation awarded by the Authorized Official after FEMA receives the 
completed Release and Certification Form. If the Claimant does not 
either submit a Release and Certification Form to FEMA or initiate an 
Administrative Appeal not later than 120 Days after the date that 
appears on the Authorized Official's Determination, he or she will be 
conclusively presumed to have accepted the Authorized Official's 
Determination. The Director of OCGC may modify the deadlines set forth 
in this subsection at the request of a Claimant for good cause shown.


Sec. 295.33  Supplementing claims.

    A Claimant may amend the Notice of Loss to include additional 
claims at any time prior to signing a Proof of Loss. A Claimant may 
submit an additional Notice of Loss to present claims that were not 
addressed in a Proof of Loss for good cause shown. Any additional claim 
must be submitted not later than August 28, 2002 except with respect to 
claims for mitigation costs under Sec. 295.21(h) of these regulations. 
Supplemental claims for mitigation costs under Sec. 295.21(h) of these 
regulations cannot be submitted after August 28, 2003.


Sec. 295.34  Reopening a claim.

    The Director of OCGC may reopen a claim in response to a Claimant's 
request after the Claimant has submitted a Release and Certification 
Form for the limited purpose of determining whether additional 
compensation is due if:

[[Page 52269]]

    (a) The Claimant has incurred mitigation expenses within three 
years of the date of these regulations for which reimbursement is 
sought under Sec. 295.21(h); or
    (b) The Claimant closed the sale of real property within two years 
of the date of these regulations and wishes to present a claim for 
reduction in the value of land under Sec. 295.21(e); or
    (c) The Claimant has incurred replacement costs under 
Sec. 295.21(d) in excess of those previously awarded; or
    (d) The Director of OCGC otherwise determines that Claimant has 
demonstrated good cause.


Sec. 295.35  Access to records.

    For purpose of audit and investigation, a Claimant shall grant the 
FEMA Office of the Inspector General and the Comptroller General of the 
United States access to any property that is the subject of a claim and 
to any and all books, documents, papers, and records maintained by a 
Claimant or under the Claimant's control pertaining or relevant to the 
claim.


Sec. 295.36  Confidentiality of information.

    Confidential information submitted by individual Claimants is 
protected from disclosure to the extent permitted by the Privacy Act. 
These protections are described in the Privacy Act Notice provided with 
the Notice of Loss. Other Claimants should consult with FEMA concerning 
the availability of confidentiality protection under exemptions to the 
Freedom of Information Act and other applicable laws before submitting 
confidential, proprietary or trade secret information.

Subpart E--Dispute Resolution


Sec. 295.40  Scope.

    This subpart describes a Claimant's right to bring an 
Administrative Appeal in response to the Authorized Official's 
Determination. It also describes the Claimant's right to pursue 
arbitration or seek judicial review following an Administrative Appeal.


Sec. 295.41  Administrative appeal.

    (a) Notice of appeal. A Claimant may request that the Director of 
OCGC review the Authorized Official's Determination by written request 
to the Appeals Docket, Office of Cerro Grande Claims, P.O. Box 1480, 
Los Alamos, NM 87544-1480 postmarked or delivered within 120 Days after 
the date that appears on the Authorized Official's Determination. The 
Claimant will submit along with the notice of appeal a statement 
explaining why the Authorized Official's Determination was incorrect.
    (b) Acknowledgement of appeal. OCGC shall acknowledge the receipt 
of appeals that are timely filed. Following the receipt of a timely 
filed appeal, the Director of OCGC will obtain the Administrative 
Record from the Authorized Official and transmit a copy to the 
Claimant.
    (c) Supplemental filings. The Claimant may supplement the statement 
of reasons and provide any additional documentary evidence supporting 
the appeal within 60 Days after the date upon which the appeal is 
filed. The Director of OCGC may extend these timeframes or authorize 
additional filings either on his or her own initiative or in response 
to a request by the Claimant for good cause shown.
    (d) Admissible evidence. The Claimant may rely upon any relevant 
evidence to support the appeal, regardless of whether the evidence was 
previously submitted to the Claims Reviewer for consideration by the 
Authorized Official.
    (e) Obtaining evidence. The Director of OCGC may request from the 
Claimant or from the Authorized Official any additional information 
that is relevant to the issues posed by the appeal in his or her 
discretion.
    (f) Conferences. The Director of OCGC may schedule a conference to 
gain a better understanding of the issues or to explore settlement 
possibilities.
    (g) Hearings. The Director of OCGC may exercise the discretion to 
convene a hearing to receive oral testimony from witnesses or experts. 
Hearings will be transcribed and the transcript will be entered in the 
Administrative Record.
    (h) Decision on appeal. After the allotted time for submission of 
evidence has passed, the Director of OCGC shall close the 
Administrative Record and render a written decision on the 
Administrative Appeal. The Director of OCGC's decision on the 
Administrative Appeal shall constitute the final decision of the 
Director of FEMA under Secs. 104(d)(2)(B) and 104(i)(1) of the CGFAA.
    (i) Claimant's options following appeal. The Claimant's concurrence 
with the decision in the Administrative Appeal will be conclusively 
presumed unless the Claimant initiates arbitration in accordance with 
Sec. 295.42 or seeks judicial review in accordance with Sec. 295.43. In 
order to receive payment of any compensation awarded by the 
Administrative Appeal decision the Claimant must submit a Release and 
Certification Form.


Sec. 295.42  Arbitration.

    (a) Initiating arbitration. A Claimant who is dissatisfied with the 
outcome of the Administrative Appeal may initiate binding arbitration 
by submitting a written request for arbitration to the Arbitration 
Administrator for Cerro Grande Claims, Office of Dispute Resolution, 
Federal Emergency Management Agency, 500 C Street, Southwest, room 214, 
Washington, DC 20472 on a form provided by OCGC. The written request 
for arbitration must be received not later than 60 Days after the date 
that appears on the Administrative Appeal decision.
    (b) Permissible claims. A Claimant may not arbitrate an issue 
unless it was raised and decided in the Administrative Appeal. 
Arbitration will be conducted on the evidence in the Administrative 
Record. Evidence not previously entered into the Administrative Record 
will not be considered.
    (c) Settlement and mediation alternatives. At any time after a 
request for arbitration is filed and prior to the time a decision is 
rendered, either party may request in writing that the Office of 
Dispute Resolution stay further proceedings in the arbitration to 
facilitate settlement discussions. A mediator may be appointed (if 
requested by the parties) to facilitate settlement discussions. If both 
parties concur in the request, the Office of Dispute Resolution will 
stay the arbitration and appoint a mediator at FEMA's expense. The stay 
may be terminated and the arbitration resumed upon written request of 
either party to the Office of Dispute Resolution. If the dispute is 
settled, the Office of Dispute Resolution shall issue an order 
terminating the arbitration and provide the Claimant with a Release and 
Certification Form to obtain payment of any compensation due.
    (d) Selection of arbitrator. Arbitration shall be decided by one 
arbitrator selected by the Claimant from a list of qualified 
arbitrators who have agreed to serve provided by the Office of Dispute 
Resolution.
    (e) Conduct of arbitration. The arbitration will be conducted in a 
manner determined by the arbitrator consistent with guidelines 
established by the Office of Dispute Resolution. The Office of Dispute 
Resolution will provide these guidelines upon request.
    (f) Hearings. The arbitrator may convene a hearing at a location 
designated by the Office of Dispute Resolution. Whenever possible 
hearings shall be held in Los Alamos, New Mexico unless the parties 
jointly agree to a different location.
    (g) Decision. After reviewing the evidence, the arbitrator shall 
render a decision in writing to the Claimant, the Director of OCGC and 
the Office of

[[Page 52270]]

Dispute Resolution. The decision will be rendered no later than 10 Days 
after a hearing is concluded or 60 Days after the arbitration is 
initiated, whichever is earlier. The Office of Dispute Resolution may 
extend the time for a decision. The decision shall establish the 
compensation due to the Claimant, if any, and the reasons therefore.
    (h) Action on arbitration decision. Upon receipt of the arbitration 
decision, the Office of Dispute Resolution shall provide the Claimant 
with a Release and Certification Form to obtain payment of any 
compensation awarded by the arbitrator.
    (i) Final decision. The decision of the arbitrator shall be final 
and binding on all parties and shall not be subject to any 
administrative or judicial review. The arbitrator may correct clerical, 
typographical or computational errors as requested by the Office of 
Dispute Resolution.
    (j) Administration of arbitration. The Office of Dispute Resolution 
shall serve as arbitration administrator and shall conclusively resolve 
any procedural disputes arising in the course of the arbitration. The 
Office of Dispute Resolution will pay the fees of the arbitrator and 
reimburse the arbitrator for arbitration related expenses unless the 
parties jointly agree otherwise.


Sec. 295.43  Judicial review.

    As an alternative to arbitration, a Claimant dissatisfied with the 
outcome of an Administrative Appeal may seek judicial review of the 
decision by bringing a civil lawsuit against FEMA in the United States 
District Court for the District of New Mexico. This lawsuit must be 
brought within 60 Days of the date that appears on the Administrative 
Appeal decision. The court may only consider evidence in the 
Administrative Record. The court will uphold FEMA's decision if it is 
supported by substantial evidence on the record considered as a whole. 
Claimants awarded compensation in a final judgment, not subject to 
further review, must submit a Release and Certification Form to OCGC in 
order to receive payment.

Subpart F--Glossary


Sec. 295.50  Definitions

    Administrative appeal means an appeal of the Authorized Official's 
Determination to the Director of OCGC in accordance with the provisions 
of Subpart E of these regulations.
    Administrative record means all information submitted by the 
Claimant and all information collected by FEMA concerning the claim, 
which is used to evaluate the claim and to formulate the Authorized 
Official's Determination. It also means all information that is 
submitted by the Claimant or FEMA in an Administrative Appeal and the 
decision of the Administrative Appeal. It excludes the opinions, 
memoranda and work papers of FEMA's attorneys and drafts of documents 
prepared by OCGC personnel and contractors.
    Authorized Official means an employee of the United States who is 
delegated with authority by the Director of OCGC to render binding 
determinations on claims and to determine compensation due to Claimants 
under the CGFAA.
    Authorized Official's Determination means a report signed by an 
Authorized Official and mailed to the Claimant evaluating each element 
of the claim as stated in the Proof of Loss and determining the 
compensation, if any, due to the Claimant.
    Claimant means a person who has filed a Notice of Loss under the 
CGFAA.
    Claims Reviewer means an employee of the Untied States or an OCGC 
contractor or subcontractor who is authorized by the Director of OCGC 
to review and evaluate claims submitted under the CGFAA.
    Days means calendar days, including weekends and holidays.
    Household means a group of people, related or unrelated, who live 
together on a continuous basis and does not include members of an 
extended family.
    Household Including Tribal Members means a Household that existed 
on May 4, 2000, which included one or more Tribal Members as continuous 
residents.
    Indian tribe means an entity listed on the most recent list of 
federally recognized tribes published in the Federal Register by the 
Secretary of the Interior pursuant to the Federally Recognized Indian 
Tribe List Act, 25 U.S.C. 479a, or successor legislation.
    Injured Person means an individual, regardless of citizenship or 
alien status, an Indian tribe, corporation, tribal corporation, 
partnership, company, association, cooperative, joint venture, limited 
liability company, estate, trust, county, city, State, school district, 
special district or other non-Federal entity that suffered Injury 
resulting from the Cerro Grande Fire and any entity that provided 
insurance to an Injured Person. The term Injured Person includes an 
Indian tribe with respect to any claim relating to property or natural 
resources held in trust for the Indian tribe by the United States. 
Lenders holding mortgages or security interests on property affected by 
the Cerro Grande fire and lien holders are not ``Injured Persons'' for 
purposes of the CGFAA.
    Injury means ``injury or loss of property, or personal injury or 
death,'' as that phrase appears in the Federal Tort Claims Act, 28 
U.S.C. 1346(b)(1).
    Mitigation Compensation Plan means a written mitigation plan 
submitted by a local government with land use regulatory authority or 
by an Indian tribe that recommends specific mitigation measures to 
reduce the heightened risks of wildfire, flood or other natural hazards 
resulting from the Cerro Grande Fire or seeks compensation for the cost 
of such measures expended before August 28, 2000, or both. The 
Mitigation Compensation Plan may address property specific mitigation 
measures and community level mitigation measures.
    Notice of Loss means a form supplied by OCGC through which an 
Injured Person makes a binding, conclusive and irrevocable election to 
have all Injuries resulting from the Cerro Grande Fire reviewed by FEMA 
for possible compensation under the CGFAA.
    Office of Dispute Resolution means the Office established by FEMA 
to promote use of Alternative Dispute Resolution as a means of 
resolving disputes. The address of the Office of Dispute Resolution is 
Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 
20472.
    Proof of Loss means a statement, signed by a Claimant under penalty 
of perjury and subject to the provisions of 18 U.S.C. 1001 that the 
claim is true and correct, attesting to the nature and extent of the 
Claimant's injuries.
    Public Assistance Program means the FEMA program establish under 
Subchapter IV of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides 
grants to States, local governments, Indian tribes and private 
nonprofit organizations for emergency measures and repair, restoration 
and replacement of damaged facilities.
    Release and Certification Form means a document in the manner 
prescribed by Sec. 104(e) of the CGFAA that a Claimant must complete 
and return in order to receive payment of compensation awarded pursuant 
to the CGFAA.
    Subsistence Resources means food and other items obtained through 
hunting, fishing, firewood and other resource gathering, timbering, 
grazing or agricultural activities undertaken by the Claimant without 
financial remuneration.
    Tribal Member means an enrolled member of an Indian Tribe.


[[Page 52271]]


    Dated: August 23, 2000.
James L. Witt,
Director.

    The Notice of Loss form follows in English and in Spanish:
BILLING CODE 6718-01-U

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[FR Doc. 00-21926 Filed 8-25-00; 8:45 am]
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