[Federal Register Volume 67, Number 15 (Wednesday, January 23, 2002)]
[Proposed Rules]
[Pages 3412-3426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1386]



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Part IV





Federal Emergency Management Agency





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44 CFR Part 206



Disaster Assistance; Federal Assistance to Individuals and Households; 
Proposed Rule

  Federal Register / Vol. 67 , No. 15 / Wednesday, January 23, 2002 / 
Proposed Rules  

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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067-AD25


Disaster Assistance; Federal Assistance to Individuals and 
Households

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement section 206 of the Disaster 
Mitigation Act of 2000 by consolidating ``Temporary Housing 
Assistance'' and ``Individual and Family Grant Programs'' into a single 
program called ``Federal Assistance to Individuals and Households''. 
Through this consolidation we are attempting to streamline the 
administration of the provision of assistance to disaster victims.

DATES: We (FEMA) invite your comments on this proposed rule, which we 
should receive by March 11, 2002.

ADDRESSES: Please send any comments on this proposed rule to the Rules 
Docket Clerk, Office of the General Counsel, Federal Emergency 
Management Agency, room 840, 500 C Street, SW., Washington, DC 20472, 
or (fax) (202) 646-4536, or (email) [email protected].

FOR FURTHER INFORMATION CONTACT: Lumumba Yancey, Readiness, Response 
and Recovery Directorate, (202) 646-3939, or (email) at 
[email protected].

SUPPLEMENTARY INFORMATION: By virtue of its enactment of section 206(a) 
of the Disaster Mitigation Act of 2000, Pub.L. 106-390, Congress 
effectively combined into one section of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (Stafford Act, or the Act) 
what previously had been two separate provisions. The first is the old 
version of section 408 of the Stafford Act, 42 U.S.C. 5174, entitled 
``Temporary Housing Assistance''. The second is section 411 of the 
Stafford Act, 42 U.S.C. 5178, entitled ``Individual and Family Grant 
Programs''. Under section 206(d) of Pub.L. 106-390, this consolidation 
of sections 408 and 411 of the Stafford Act will not become effective 
until 18 months after enactment of Pub.L. 106-390. The President signed 
Pub.L. 106-390 on October 30, 2000; the new consolidated authority 
becomes effective on May 1, 2002. Once made final this proposed rule 
will guide FEMA's implementation of the new statutory provision.
    The intent of section 206 of Pub.L. 106-390 is to consolidate and 
streamline the provision of assistance under sections 408 and 411 of 
the Stafford Act. For example, House Report No. 106-40 (the report that 
accompanied H.R. 707, which became Pub.L. 106-390) indicates that H.R. 
707 ``attempts to increase the efficiency of existing disaster 
assistance programs by eliminating unnecessary and complicated aspects 
of the program. This includes * * * combining the housing and 
individual and family assistance programs.'' See p. 11 of House Report 
No. 106-40.
    Because of the clear Congressional interest in streamlining the 
provision of assistance under the new version of section 408 of the 
Act, 42 U.S.C. 5174, we propose to administer a consolidated program 
under section 408. Under the new version of 42 U.S.C. 5174 there would 
be a single registration period for assistance (see Sec. 206.103 of the 
proposed rule), a consolidated statement of eligibility and 
ineligibility conditions for assistance (Sec. 206.104 of the proposed 
rule), a consolidated definition of the criteria for assistance 
(Sec. 206.105 of the proposed rule), a consolidated appeal process 
(Sec. 206.106 of the proposed rule), a consolidated process for 
recovery of funds (Sec. 206.107 of the proposed rule), and a 
consolidated process for possible State administration of certain types 
of assistance that are authorized by amended section 408 (Sec. 206.111 
of the proposed rule).
    We anticipate that generally FEMA will administer all assistance 
under amended 42 U.S.C. 5174. However, under Sec. 206.111 of the 
proposed rule the States will have the discretion to administer certain 
types of assistance previously known as the Individual and Family Grant 
Programs (see Sec. 206.111(a) of the proposed rule). In addition, we 
anticipate that some States may ask to participate in the management of 
a portion of the direct housing program. The decision to allow States 
to do so is within FEMA's discretion, which we will apply by a 
Memorandum of Understanding (MOU). States that wish to administer these 
programs would work with FEMA to develop an annual MOU to govern their 
activities under 42 U.S.C. 5174 as a precondition of active involvement 
in such activities. The MOUs would reflect the streamlined approach to 
the activities authorized by 42 U.S.C. 5174 and would describe 
different optional procedures for States to use in the administration 
of the program.
    Under Sec. 206.111(a) of the proposed rule, States would be given 
the option to administer certain types of assistance under the new 
authority entitled ``Assistance to Address Other Needs.'' See revised 
42 U.S.C. 5174(e). We drafted the proposed regulation to give States 
this discretion in light of the language of 42 U.S.C. 5174(f), which 
authorizes States to ``request a grant from (FEMA) to provide financial 
assistance to individuals and households in the State under paragraph 
(e)* * *.'' We anticipate that most States that opt to administer this 
program will use FEMA's processing system in performing their 
activities, but we also plan to offer States the opportunity to 
administer the program more independently. At the same time we are 
sensitive to the clear expression of congressional intent to 
consolidate and streamline assistance under the provision. We invite 
comment from the public on the tension between the need to consolidate 
and streamline the activities which are authorized by the new version 
of 42 U.S.C. 5174, on the one hand, and the need to ensure the 
availability of an active State role in the process, on the other hand.
    In addition, the proposed rule contemplates that in some situations 
States may opt to participate in the management of ``direct'' disaster 
housing assistance programs under 42 U.S.C. 5174(c)(1)(B). See 
Sec. 206.111(b) of the proposed rule. Our existing rule at 44 CFR 
206.101(s) contemplates the possibility of States managing any portion 
of a temporary housing program. On the other hand, Sec. 206.111(b) of 
the proposed rule only contemplates the possibility of a State managing 
the ``direct housing'' authority under 42 U.S.C. 5174(c)(1)(B). We 
decided to draft the regulation in a more limited manner than the 
current regulation because of the clear congressional desire for a more 
consolidated and streamlined program under 42 U.S.C. 5174. At the same 
time we propose to continue the policy of enabling States that desire 
to do so to become active participants in the process of providing 
temporary direct housing assistance to their residents in the aftermath 
of major disasters.
    The current version of 42 U.S.C. 5174 does not contain an explicit 
reference to the possibility of a State administering the temporary 
housing authority of the Act. Nevertheless, FEMA published 44 CFR 
206.101(s) several years ago in spite of the lack of explicit authority 
for States to administer any portion of the temporary housing 
authorities of the Stafford Act. Because no one has questioned this 
rule in the many years that it has been in place, we believe that there 
is implicit authority to retain a rule that calls for possible State

[[Page 3413]]

management of the temporary direct housing authority of the Stafford 
Act. We solicit input from the public on this aspect of the proposed 
rule.
    42 U.S.C. 5174(b) is the general authority for the President to 
provide housing assistance to disaster victims, which the President 
delegated to the Director of FEMA under Executive Order 12148. This new 
paragraph explicitly indicates that FEMA has authority to determine the 
most appropriate form of housing assistance to provide to disaster 
victims. This is a new provision in the Stafford Act that in the past 
we addressed in our implementing regulations. In addition, 42 U.S.C. 
5174(b) states explicitly for the first time that we can provide more 
than one form of housing assistance to disaster victims ``based on the 
suitability and availability of the types of assistance, to meet the 
needs of individuals and households in the particular disaster 
situation.'' See 42 U.S.C. 5174(b)(2)(B).
    Section 408(a)(3) of the previous version of the Stafford Act 
stated that ``Federal financial and operational assistance under this 
section shall continue for not longer than 18 months....'' The general 
rule under this provision is that all forms of temporary housing 
assistance are available for up to 18 months, unless FEMA extends the 
period in the public interest. On the other hand, under the amended 
version of 42 U.S.C. 5174(c)(1)(B)(ii) the only type of temporary 
housing assistance that is specifically limited to 18 months is 
``direct'' housing assistance (e.g., mobile homes and travel trailers). 
However, there is no indication in the Disaster Mitigation Act of 2000 
that Congress intended for other forms of temporary housing assistance 
to be available generally for more than 18 months. In addition, in most 
cases if we were to provide rental assistance under the new version of 
42 U.S.C. 5174(c)(1) for more than 18 months, the total assistance 
would exceed the $25,000 cap that is imposed by amended 42 U.S.C. 
5174(h). Therefore, we have included a provision in the proposed rule 
that would limit temporary housing assistance generally (rather than 
only in the case of the provision of ``direct'' housing assistance) to 
no more than 18 months (see Sec. 206.101(d) of the proposed rule). We 
would appreciate comments from the public on this aspect of the 
proposed rule.
    The new version of 42 U.S.C. 5174(c) identifies the types of 
housing assistance that FEMA can provide in the aftermath of 
presidentially-declared major disasters. The types of authorized 
housing assistance are:
    (1) Financial assistance to rent alternate housing (see the amended 
version of 42 U.S.C. 5174(c)(1)(A), as well as Sec. 206.108(b)(1)(i) of 
the proposed rule);
    (2) ``Direct'' housing assistance in the form of temporary housing 
units (e.g., mobile homes and travel trailers) that FEMA purchases or 
leases for disaster victims, usually in situations where rental 
accommodations are not available (see the amended version of 42 U.S.C. 
5174(c)(1)(B), as well as Sec. 206.108(b)(1)(ii) of the proposed rule);
    (3) Financial assistance (up to $5,000 per household) for the 
repair of owner-occupied private residences, utilities, and residential 
infrastructure that are damaged in major disasters (which can be 
provided without demonstrating that a disaster victim's housing needs 
can be met by other means, other than by insurance reimbursement) (see 
the amended version of 42 U.S.C. 5174(c)(2), as well as 
Sec. 206.108(b)(2) of the proposed rule);
    (4) Financial assistance (up to $10,000 per household) for the 
replacement of owner-occupied private residences that are damaged by 
major disasters (see the amended version of 42 U.S.C. 5174(c)(3), as 
well as Sec. 206.108(b)(3) of the proposed rule); and
    (5) Financial assistance or direct assistance to disaster victims 
to construct permanent housing in insular areas (i.e., the Virgin 
Islands, Guam, American Samoa, and the Commonwealth of the Northern 
Mariana Islands) and in Puerto Rico and other remote locations when no 
alternate housing resources are available and when the other forms of 
authorized temporary housing assistance are ``unavailable, infeasible, 
or not cost-effective'' (see the amended version of 42 U.S.C. 
5174(c)(4), as well as Sec. 206.108(b)(4) of the proposed rule).
    There are several significant differences between this new version 
of the Stafford Act's housing authority and the previous version. The 
previous version of 42 U.S.C. 5174 was entitled ``Temporary Housing 
Assistance'', and it authorized exclusively temporary assistance to 
address the housing needs of disaster victims. The new version of 42 
U.S.C. 5174, on the other hand, contains two housing authorities that 
have more permanent than temporary features. There is now an 
authorization for replacement housing to be provided to disaster 
victims (see the amended version of 42 U.S.C. 5174(c)(3), which we 
discuss below), and there is an authority for permanent housing 
construction at the new version of 42 U.S.C. 5174(c)(4), which we also 
discuss below. These new provisions of the Act suggest congressional 
recognition that in some unique circumstances we should implement the 
traditionally temporary housing authorities of the Stafford Act so as 
to provide a longer term solution to the housing needs of disaster 
victims.
    Another change to the Act relates to 42 U.S.C. 5174(b) of the 
earlier version of the Act. That provision, which is not in the new 
version of the temporary housing authority, authorized the payment of 
mortgage or rental assistance to disaster victims who, as a result of 
financial hardship caused by a major disaster, were unable to continue 
paying their pre-disaster rent or mortgages. Because this form of 
housing assistance is no longer in the Act, for major disasters 
declared on or after May 1, 2002, this type of housing assistance will 
not be available under the Stafford Act.
    Another change in the new housing authority relates to the 
authority to provide financial assistance to repair owner-occupied 
residences in the aftermath of major disasters. The previous version of 
this authority did not contain a cap on the amount of such assistance. 
Our practice has been to impose such caps administratively. The new 
version of the temporary housing authority (see the revised version of 
42 U.S.C. 5174(c)(2)) contains a $5,000 cap on this type of assistance 
(to be adjusted annually to reflect changes in the Consumer Price 
Index). See Sec. 206.108(b)(2) of the proposed rule. The $5,000 cap 
would cover not only repairs to owner-occupied private residences, but 
also hazard mitigation measures. The legislative history relating to 
this new provision suggests that there is some confusion whether the 
amended language imposes an absolute cap on the amount of authorized 
repair assistance. Although we believe that the enacted provision 
creates an absolute $5,000 cap on this type of assistance, we are 
concerned that that cap might imprudently tie our hands in our 
administration of this provision of the revised legislation. Therefore, 
we ask for public comments on the housing repair authority generally, 
and on the $5,000 cap in particular.
    Congress also authorized two new forms of housing assistance in the 
new version of 42 U.S.C. 5174. The first appears at 42 U.S.C. 
5174(c)(3). This provision authorizes for the first time in the history 
of the Federal disaster assistance program funding to replace owner-
occupied private residences that are damaged in major disasters. The 
provision of the proposed regulation that would implement this new 
authority appears at Sec. 206.108(b)(3) of the proposed rule. The 
proposed rule

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states that before we can provide this type of replacement assistance, 
an authorized member of the affected household must agree to purchase 
flood insurance on the replacement housing unit under any applicable 
flood insurance purchase mandates that are created by the Flood 
Disaster Protection Act of 1973 and the National Flood Insurance Reform 
Act of 1994. The proposed rule indicates that this new replacement 
housing authority would only apply where an owner-occupied private 
residence could be replaced ``in its entirety'' for $10,000 or less 
(adjusted annually to reflect changes in the Consumer Price Index). 
FEMA does not expect that it will be feasible to use this authority 
often.
    The second new form of housing assistance in the new version of 42 
U.S.C. 5174 authorizes the construction of permanent housing in insular 
areas and other remote areas where it would not be feasible or cost-
effective to rely on other types of temporary housing assistance. On 
several occasions in the past we have provided permanent housing 
assistance in remote insular areas of Puerto Rico and various Pacific 
islands because there were no rental resources available, repairs to 
pre-disaster residences were not feasible, and it would not have been 
cost-effective to purchase and ship mobile homes or other readily-
fabricated dwellings to the disaster sites. The enactment of this new 
provision reflects an understanding that in rare, limited circumstances 
permanent housing assistance may be the only viable way to provide 
housing in the aftermath of major disasters. We would implement this 
new authority under Sec. 206.108(b)(4) of the proposed regulation. The 
new authority could be implemented in insular areas, i.e., the Virgin 
Islands, American Samoa, Guam, and the Commonwealth of the Northern 
Mariana Islands, and in Puerto Rico and other areas that are eligible 
to receive disaster assistance under the Stafford Act, but which are so 
remote as to make other forms of housing assistance extremely difficult 
and costly to provide.
    The regulations that implement the current version of 42 U.S.C. 
5174 explicitly refer to the provision of ``transient accommodations'' 
assistance. See 44 CFR 206.101(g)(1)(ii). That provision of the 
existing regulations authorizes FEMA to provide short-term housing 
assistance for up to 30 days to help disaster victims meet their 
immediate post-disaster housing needs. The proposed rule that we 
publish today does not explicitly refer to ``transient 
accommodations'', but we propose to provide this type of financial 
assistance as an implicit subset of the financial assistance that we 
will continue to provide under the revised version of 42 U.S.C. 
5174(c)(1)(A) of the Stafford Act and under Sec. 206.108(b)(1)(i) of 
the proposed rule.
    The new version of 42 U.S.C. 5174(d) imposes certain terms and 
conditions on the provision of direct housing assistance to disaster 
victims. The general rule is that we will place direct housing 
assistance on a site provided by the State, local government, owner of 
the site, or by the disaster victim. We can, however, provide a site 
when we determine that a site that we provide would be more economical 
or accessible than one provided by the State, local government, site 
owner, or the disaster victim. The previous version of 42 U.S.C. 
5174(a)(4) dictated that the costs of site construction and development 
would be cost shared between FEMA and the State or local government, 
but the new version of 42 U.S.C. 5174 does not retain this cost sharing 
provision. Therefore, we may fund the entire costs of site construction 
and development in the future'' but only where we determine that it is 
necessary for the Federal government to assume this obligation.
    New 42 U.S.C. 5174(d)(2) describes the process for disposal of 
temporary housing units that are purchased for the use of disaster 
victims. We may sell such housing units directly to disaster victims 
who occupy the units if they lack other permanent housing. As described 
in the proposed rule at Sec. 206.109(a)(1)(ii), the sales price will be 
at fair market value, except that FEMA may adjust the sales price for 
purchasers who are not able to pay such an amount for the purchase of a 
temporary housing unit. As provided under new 42 U.S.C. 
5174(d)(2)(A)(iii), as well as Sec. 206.109(a)(1)(iii) of the proposed 
rule, we would deposit the proceeds of such sales into the Disaster 
Relief Fund, which we administer to implement the Stafford Act.
    Paragraphs (A)(iv) and (B)(ii)(II) of revised 42 U.S.C. 5174(d)(2) 
relate to the obligation to purchase insurance on disaster housing 
units. The insurance purchase mandates relate to ``hazard insurance'' 
and ``flood insurance'' (flood insurance is not typically provided in 
standard homeowners insurance policies). Initially we want to point out 
that we interpret the mandate to purchase ``hazard insurance'' to 
equate to a mandate to obtain standard homeowners insurance policies on 
disaster housing units that are purchased following major disaster 
responses. We do not intend to require the purchase of insurance for 
every conceivable hazard that might exist in a given locale under these 
two paragraphs in 42 U.S.C. 5174(d)(2).
    We also want to ask those who review this proposed rule to note the 
different statutory provisions relating to the purchase of flood 
insurance on housing units that FEMA sells under 42 U.S.C. 5174(d)(2). 
42 U.S.C. 5174(d)(2)(A)(iv) and (d)(2)(B)(ii)(II) mandate that as a 
condition of the sale of a housing unit to disaster victims or to 
States, to other governmental entities, or to voluntary organizations, 
respectively, the purchaser must agree to purchase and maintain flood 
insurance on the housing unit. That mandate does not apply to ``any 
other person'' who purchases a housing unit under the terms of 42 
U.S.C. 5174(d)(2)(B). There is no indication in the legislation or the 
legislative history why Congress may have intended to require disaster 
victims, State or local governments, or voluntary organizations to 
purchase flood insurance on housing units that FEMA sells in the 
aftermath of major disasters, but not to require other purchasers of 
housing units to buy flood insurance. In addition, it is noteworthy 
that the revised version of 42 U.S.C. 5174(c)(3)(C) (relating to 
replacement housing grants, as opposed to the sale of housing units 
that FEMA purchases) only requires the purchase of flood insurance on 
replacement housing when such housing is in a designated special flood 
hazard area.
    There is no legislative history clarifying the distinction between 
the different flood insurance purchase mandates in amended 42 U.S.C. 
5174. We believe that although there are different provisions relating 
to flood insurance purchase mandates within 42 U.S.C. 5174, it is 
important that we should apply the flood insurance purchase mandates 
arising out of the Act consistently. Therefore, we interpret the 
various flood insurance purchase mandates of 42 U.S.C. 5174 to apply 
only when a housing unit is to be placed in a designated special flood 
hazard area. This interpretation is consistent with the generic flood 
insurance purchase mandate that arises out of the Flood Disaster 
Protection Act of 1973, Public Law 93-234. However, in light of the 
differences between the different flood insurance purchase provisions 
within this new statutory provision, we invite comments from the public 
on our interpretation of this issue.
    We also want to direct the public's attention to another 
significant aspect of amended 42 U.S.C. 5174 as it relates to the 
administration of this authority vis-a-vis the flood insurance purchase 
mandates of other legislation. Section

[[Page 3415]]

102 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4012a, and 
section 582 of the National Flood Insurance Reform Act of 1994, 42 
U.S.C. 5154a, respectively, impose stringent flood insurance purchase 
mandates generically and on disaster victims in particular. It is also 
noteworthy that 42 U.S.C. 5174(c)(3)(C) of the amended Act (relating to 
``replacement housing'') explicitly provides that there is no authority 
to waive ``any provision of Federal law requiring the purchase of flood 
insurance as a condition of the receipt of * * * '' replacement housing 
assistance.
    The regulations that implement the current IFG program authorize 
victims of flood disasters who qualify for IFG assistance to receive 
flood insurance coverage under a Group Flood Insurance Policy (GFIP). 
Under the GFIP, IFG assistance is used to purchase a three-year flood 
insurance policy under the National Flood Insurance Program, which FEMA 
administers pursuant to the National Flood Insurance Act of 1968, as 
amended. See 44 CFR 206.131(d)(2). No similar provision is included in 
the proposed rule that accompanies this discussion because we propose 
to eliminate the GFIP and restore the responsibility for the flood 
insurance purchase requirement back to the individual or household 
receiving the federal assistance. Under the current GFIP process, IFG 
funds are used to purchase three years of flood insurance for disaster 
victims who are eligible for IFG assistance. If the GFIP process is 
eliminated, as we are proposing, then victims of flooding disasters 
will be responsible for obtaining and maintaining flood insurance at 
their own expense. If they fail to do so, then in the aftermath of 
future flooding they will not be eligible to receive assistance under 
subsection 408(e) of the Act. We recognize that while we have the 
discretion to require disaster victims to purchase flood insurance 
using their own resources, as we are proposing to do, there are other 
ways to address this issue. We could keep in place the current GFIP 
process, pursuant to which disaster victims are provided flood 
insurance coverage for three years at subsidized rates without having 
to provide their own resources to pay for such coverage. We could also 
implement a modified version of the GFIP process, pursuant to which 
disaster victims would be provided flood insurance for three years at 
subsidized rates that they would have to pay for using their own 
resources. Or we could do away with the GFIP process but still provide 
victims with flood insurance coverage that would be paid out of 
assistance for which the disaster victims qualify under section 408 of 
the Act. See Sec. 206.101(k)(3)(i) of the proposed rule. We invite 
comments from the public on this aspect of the proposed rule.
    The amended version of 42 U.S.C. 5174(e), entitled ``Financial 
Assistance to Address Other Needs'', is similar to the program that is 
currently authorized at section 411, ``Individual and Family Grant 
Programs'', 42 U.S.C. 5178. Beginning on May 1, 2002, 42 U.S.C. 5174(e) 
will authorize FEMA, in consultation with the Governor of a State in 
which the President has declared a major disaster, to provide financial 
assistance to meet disaster-related medical, dental, and funeral 
expenses. The section will also authorize FEMA to address personal 
property, transportation, and other necessary expenses or serious needs 
resulting from major disasters.
    In addition, new 42 U.S.C. 5174(f) addresses the role that States 
may play in the implementation of the program entitled ``Financial 
Assistance to Address Other Needs''. Sections 206.110 and 206.111 of 
the proposed regulation describe how we will implement these provisions 
of 42 U.S.C. 5174. Under Sec. 206.111 of the proposed regulation States 
will have the option (1) to let FEMA administer the financial 
assistance that 42 U.S.C. 5174(e) authorizes, (2) to work with FEMA to 
administer the program, or (3) to run the program independently, 
consistent with the Stafford Act and FEMA's implementing regulations 
and policies.
    The amended version of 42 U.S.C. 5174(f)(2) is a new provision. It 
relates to the mandates of the Privacy Act, 5 U.S.C. 552a. The new 
provision states that FEMA should ``provide for the substantial and 
ongoing involvement of the States * * * including by providing to the 
States access to the electronic records of individuals and households 
receiving assistance under this section in order for the States to make 
available any additional State and local assistance* * * Section 
206.101(j) of the proposed rule would implement this new statutory 
provision by authorizing FEMA to share applicant information with 
States in order to facilitate the provision of additional State and 
local assistance to disaster victims. We would be interested in hearing 
from members of the public their reaction to this provision of the 
proposed rule, especially as it relates to the mandates of the Privacy 
Act.
    As mandated in the revised version of 42 U.S.C. 5174(g), the costs 
of providing ``financial assistance to address other needs'' will be 
cost shared on a 75 percent Federal/25 percent State basis, as was the 
case before the recent amendments to the Stafford Act. In addition, the 
amended version of 42 U.S.C. 5174(h) indicates that no individual or 
household can receive more than $25,000 (adjusted annually under 
changes in the Consumer Price Index) with respect to a single major 
disaster declaration.
    Finally, section 206(b) of the Disaster Mitigation Act of 2000 
amends section 502(a)(6) of the Stafford Act, 42 U.S.C. 5192(a)(6), to 
make assistance under the revised version of 42 U.S.C. 5174 available 
in the aftermath of presidentially-declared emergencies, as well as 
major disasters. The draft rule that accompanies this discussion refers 
throughout to declarations of major disaster. However, because of the 
amendment at section 206(b) there is now authorization to make 
assistance available under 42 U.S.C. 5174 in both emergencies and major 
disasters.

National Environmental Policy Act (NEPA)

    NEPA imposes requirements for considering the environmental impacts 
of agency decisions. It requires that an agency prepare an 
Environmental Impact Statement (EIS) for ``major federal actions 
significantly affecting the quality of the human environment.'' If an 
action may or may not have a significant impact, the agency must 
prepare an environmental assessment (EA). If, because of this study, 
the agency makes a Finding of No Significant Impact (FONSI), no further 
action is necessary. If an action will have a significant effect, then 
the agency uses the EA to develop an EIS.
    Agencies can categorically identify actions that do not normally 
have a significant impact on the environment. FEMA's existing 
regulations implementing NEPA exempt from NEPA review the preparation 
of regulations relating to actions that qualify for categorical 
exclusions. See 44 CFR 10.8(d)(2)(ii). In addition, FEMA's regulations 
also categorically exclude temporary housing and Individual and Family 
Grant assistance from NEPA review. See 44 CFR 10.8(d)(2)(xix)(D) and 
(F). Therefore, we have determined that FEMA's rules implementing NEPA 
exempt this rule from the preparation of an EA or an EIS. The changes 
reflected in this proposed rule are exempt from NEPA because they 
reflect administrative changes to the program that would have no effect 
on the environment. However, we would perform an environmental review 
under 44 CFR part 10 on any proposed project

[[Page 3416]]

that we would fund and implement under the authorities covered by this 
rule.

Paperwork Reduction Act of 1995

    This proposed rule contains information collection requirements. As 
required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 
3507(d)), we have submitted the proposed rule with a copy of the PRA 
OMB clearance package to the Office of Management and Budget (OMB) for 
review. Under the PRA, a person may not be penalized for failing to 
comply with an information collection that does not display a currently 
valid OMB control number.
    FEMA has already obtained OMB approval for the information 
collection request under OMB Control Number 3067-0009, Disaster 
Assistance Registration/Application for Disaster Assistance. The 
information from the form is used to implement the current versions of 
sections 408 and 411 of the Stafford Act. Although the OMB approval for 
this information collection request expires July 28, 2003, FEMA is 
taking steps to reduce the information collection burden relating to 
this form. Our effort to reduce the burden is independent of the recent 
amendment to section 408 of the Stafford Act, to the recent repeal of 
section 411 of the Stafford Act, and the information collection 
requirements contained in this proposed rule.

Collection of Information

    Title: Request for Approval of Late Application.
    Abstract: After the registration period ends, FEMA will accept late 
registrations for an additional 60 days. FEMA will process late 
registrations for those applicants who provide justification for the 
delay in their registration. In order for FEMA to effectively review 
the late application request, we ask that the request be in writing and 
explain the reason(s) for the delay in registering.
    Respondents: Applicant.
    Title: Request for Continued Assistance (Housing and Medical).
    Abstract: After the initial assistance, FEMA may provide continued 
Housing and Medical reimbursement, based on need. In order for FEMA to 
effectively evaluate the continuing need for housing and/or medical 
assistance, we ask that the request be in writing and that the 
applicant provide information about their permanent housing plans or 
receipts (bills) for medical expenses.
    Respondents: Applicant.
    Title: Appeal of Program Decision.
    Abstract: Under the provisions of section 423 of the Stafford Act, 
applicants for assistance from FEMA may appeal any eligibility 
determination. In order for FEMA to effectively respond to an 
applicants appeal, we ask that the appeal be in writing and explain the 
reason(s) for the appeal.
    Respondents: Applicant.
    Title: Review of Memorandum of Understanding (MOU) and Guidance 
Supplemental.
    Abstract: The Governor may request the authority to participate in 
administration or management of the Federal Assistance to Individuals 
and Households Program. In order for FEMA to effectively coordinate 
program activities, we require the State to sign an agreement, which 
establishes a partnership between FEMA and the State for the delivery 
of disaster assistance. The agreement is used to identify the State's 
proposed level of support and participation during disaster recovery.
    Respondents: State.
    Title: Development of Management Plans for Direct Housing (to 
include Financial Agreement).
    Abstract: The Governor may request authority to participate in the 
management of the Temporary Housing-Direct Assistance Program under the 
Federal Assistance to Individuals and Households Program. In order for 
FEMA to effectively account for the program costs, we require the State 
to provide a management plan to address the financial and grants 
management mandates that all applicable Federal laws, regulations and 
circulars impose, including 44 CFR parts 11 and 13.
    Respondents: State.
    Title: Development of State Management Plans for Financial 
Assistance to Address Other Needs (to include Financial Agreement).
    Abstract: The Governor may request a grant from FEMA to provide 
financial assistance to individuals and households in the State under 
the Federal Assistance to Individuals and Households Program. In order 
for FEMA to effectively account for the program costs, we require the 
State to provide a management plan to address the financial and grants 
management mandates that all applicable Federal laws, regulations and 
circulars impose, including 44 CFR parts 11 and 13.
    Respondents: State.
    Estimated Total Annual Burden:

----------------------------------------------------------------------------------------------------------------
                                                                                           Annual       Annual
         Information collection request           Number of    Frequency     Time per      burden      costs to
                                                 respondents  of response    response      hours     respondents
----------------------------------------------------------------------------------------------------------------
Applicants:
Request for Approval of Late Application.......         8000            1   45 minutes         6000        36000
    Request for Continued Assistance (Housing           2000            1   30 minutes         1000         6000
     and Medical)..............................
    Appeal of Program Decision (to include             30000            1   45 minutes        22500       135000
     review and use of supplemental guidance)..
States:
    Review Memorandum of Understanding (MOU)              56            1      3 hours          168         2676
     and Guidance Supplemental.................
    Development of Management Plans for Direct            56            1      2 hours          112         1784
     Housing (to include for Financial
     Agreements)...............................
Development of State Administrative Plans for             56            1      3 hours          168         2676
 Financial Assistance to Address Other Needs
 (to include Financial Agreement)..............
                                                -------------                          -------------------------
      Total....................................        40168                                  29948       184136
----------------------------------------------------------------------------------------------------------------

Comments

    We are soliciting written comments to: (a) Evaluate whether the 
proposed data collection is necessary for the proper performance of the 
agency, including whether the information shall have practical utility; 
(b) evaluate the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) obtain recommendations to 
enhance the quality, utility, and clarity of the information to be 
collected; and (d) evaluate the extent to which automated, electronic, 
mechanical, or other

[[Page 3417]]

technological collection techniques may further reduce the respondents' 
burden. Your comments should be submitted to OMB, Office of Information 
and Regulatory Affairs, Attention: Desk Officer for the Federal 
Emergency Management Agency, Washington, DC 20503 by [insert date 60 
days from the date of publication of this notice in the Federal 
Register].
    For Further Information Contact: For copies of the information 
collection requirements in this proposed rule, contact Muriel B. 
Anderson, Federal Emergency Management Agency, 500 C Street, SW, 
Washington, DC 20472 using one of the following: telephone number (202) 
646-2625; facsimile number (202) 646-2247; or e-mail address: 
[email protected].

Regulatory Planning and Review

    Under section 408 of the Stafford Act, as it would be implemented 
by this proposed rule, FEMA could provide different types of housing 
assistance to individuals and families whose pre-disaster housing 
became uninhabitable as a result of a catastrophe that the President 
declared to be an emergency or a major disaster under the Stafford Act. 
We described earlier the different forms that housing assistance could 
take, depending upon the needs of the disaster victim, the location of 
the disaster victim's residence, the extent of the damage to the 
victim's residence, the cost to the government of providing different 
forms of housing assistance, and the availability of alternate interim 
housing accommodations in the vicinity of the disaster victim's 
residence. We also described the types of other serious needs that FEMA 
is authorized to address pursuant to 42 U.S.C. 5174. Based upon its 
enactment of section 206 of the Disaster Mitigation Act of 2000, as 
well as the earlier versions of these authorities, Congress has 
determined that the Federal government should provide certain forms of 
disaster assistance to individuals and families who are adversely 
affected by those catastrophes which the President determines to be of 
sufficient severity and magnitude to require governmental assistance to 
recover from the effects of such catastrophes. This proposed regulation 
would merely describe the process by which FEMA would implement this 
program.
    Section 3 of the Regulatory Flexibility Act, 5 U.S.C. 603, requires 
agencies that promulgate regulations under the Administrative Procedure 
Act to prepare and make available for public comment an initial 
regulatory flexibility analysis. Agencies are required in these 
analyses to describe the impact of regulatory activities on ``small 
entities'', as that term is defined at 5 U.S.C. 601. The term includes 
``small business concerns'' (under section 3 of the Small Business 
Act), ``small organizations'' (which is defined as independently owned 
and operated non-profit entities that are not dominant in their 
fields), and ``small governmental jurisdictions'' (which means 
governments of cities, counties, towns, townships, villages, school 
districts, or special districts that have populations of less than 
50,000). See 5 U.S.C. 601. Because disaster assistance under 42 U.S.C. 
5174 is provided to individuals and families, rather than to ``small 
entities'', this proposed rule would not have a significant economic 
impact on small entities. It is obvious that the provision of housing 
and other forms of assistance to disaster victims in communities with 
populations under 50,000 would benefit the disaster victims. It is also 
clear that such assistance would indirectly benefit any ``small'' 
communities in which disaster victims live because it would relieve 
those governments from having to provide disaster relief without 
assistance from FEMA. Therefore, any impact on small governments that 
might result from FEMA's implementation of 42 U.S.C. 5174 would be 
beneficial to those entities. Nevertheless, because this proposed rule 
would not have a direct impact on small entities, we have determined 
that there is no need for FEMA to prepare an initial regulatory impact 
analysis relating to this proposed rule under the Regulatory 
Flexibility Act. We invite comments from the public on this 
determination.
    In addition, pursuant to Executive Order 12866 we examined whether 
this proposed rule would be a ``significant regulatory action'', as 
that term is defined at section 3(f) of the Executive Order. E.O. 12866 
requires agencies to assess the costs and benefits of available 
regulatory alternatives and, when regulation is necessary, to select 
regulatory approaches that maximize net benefits, including potential 
economic, environmental, public health and safety effects. A regulatory 
impact analysis must be prepared for major rules with economically 
significant effects ($100,000,000 in any one year). In the course of 
our development of this proposed rule vis-a-vis the analysis that is 
contemplated by E.O. 12866, we reviewed FEMA's costs of implementing 
the temporary housing authority that is codified at the existing 
version of 42 U.S.C. 5174 (relating only to the provision of temporary 
housing assistance) and at the existing version of 42 U.S.C. 5178 Act 
(relating to the Individual and Family Grant, or IFG, Program) for the 
past three fiscal years. Pursuant to section 502(a)(6) of the Stafford 
Act, 42 U.S.C. 5192(a)(6), temporary housing assistance can be provided 
in response to either Presidentially-declared emergencies or major 
disasters. However, Individual and Family Grant assistance can only be 
provided in response to major disaster declarations. In accordance with 
the revisions to 42 U.S.C. 5174 that will become effective in May of 
2002, the entire range of assistance under the new version of 42 U.S.C. 
5174 will be available in the aftermath of both emergencies and major 
disasters.
    Our review of FEMA's costs over the past three fiscal years reveals 
that in approximately 16 percent of the Presidentially-declared major 
disasters FEMA did not provide either temporary housing or Individual 
and Family Grant assistance. This is because the housing and IFG 
authorities within the Stafford Act are not triggered in every 
Presidential emergency and major disaster declaration--in particular 
situations there may only be a need to provide disaster assistance to 
governmental entities. However, in the majority of the major disasters 
that the Presidents have declared during the past three fiscal years we 
did provide housing and IFG assistance. In those major disasters where 
we provided housing and IFG assistance, there was a broad range of 
costs associated with the aid. In one major disaster the amount of 
temporary housing expenditures was only about $7,700, while in two 
other major disasters we provided temporary housing assistance which in 
each situation resulted in the expenditure of approximately 
$150,000,000. The range of expenditures for the IFG program was also 
substantial. In two major disasters FEMA did not distribute any IFG 
assistance, while in one major disaster during fiscal year 2001 we 
distributed in excess of $182,000,000 in IFG assistance. In any event, 
in each of fiscal years 1999, 2000, and 2001, FEMA paid out in excess 
of $100,000,000 as temporary housing and IFG assistance.
    Section 3(f) of E.O. 12866 defines ``significant regulatory 
action'' as ``any regulatory action that is likely to result in a rule 
that may: (1) Have an annual effect on the economy of $100,000,000 or 
more or adversely affect in a material way the economy * * * (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 (4) Raise 
novel legal or policy issues.* * *'' This proposed

[[Page 3418]]

rule does not meet the criteria under paragraphs 2, 3, or 4 of this 
provision of the Executive Order. In addition, we have determined that 
this rule is not likely to adversely affect the economy (under 
paragraph 1 of this provision). It is clear based upon the statistics 
cited in the preceding paragraph that FEMA will in all likelihood pay 
out in excess of $100,000,000 in most fiscal years under 42 U.S.C. 5174 
after it becomes effective. Therefore, one could determine that this 
proposed rule is ``significant'' pursuant to the definition at section 
3(f)(1) of E.O. 12866. For this reason we have prepared the economic 
impact analysis which follows.
    However, we believe it is also noteworthy that this proposed rule 
does not relate to a new or discretionary program of a regulatory 
nature. The new version of 42 U.S.C. 5174 reflects a Congressional 
desire for a consolidated and streamlined approach to the pre-existing 
authorities of sections 408 and 411 of the Stafford Act, 42 U.S.C. 5174 
and 5178, respectively. It is apparent from a review of the statistics 
cited above that there is already a baseline expenditure by FEMA of 
amounts which vary from year-to-year depending on each year's disaster 
activity, but which exceed $100,000,000 per year. Because the 
consolidated authority at 42 U.S.C. 5174 has not created a new program, 
but is merely a refinement of two pre-existing authorities, we do not 
expect that FEMA will pay out annually in excess of $100,000,000 more 
than we currently provide in the course of our implementation of the 
existing temporary housing and IFG authorities.
    We have determined that disaster assistance which will be 
distributed under 42 U.S.C. 5174 will have a positive impact on 
disaster victims and their families, on the economies of local and 
tribal governments which have been affected by emergencies and major 
disasters, on the economies of States in which catastrophes occur, and 
generally on the health and safety of communities which are struck by 
catastrophes. Although FEMA has not performed studies to quantify the 
positive impacts that have historically inured to the benefit of 
disaster victims and their communities as a result of the provision of 
temporary housing and IFG benefits, it is obvious that such forms of 
assistance have a positive impact. Helping disaster victims obtain 
temporary housing has significant favorable economic consequences--both 
directly for disaster victims and their families, and indirectly by 
funneling money back into local, tribal, and State economies which have 
been adversely affected by emergencies and major disasters. The 
provision of financial assistance to eligible disaster victims enables 
them to address their short-term needs, both by obtaining housing and 
by purchasing goods and services that are essential to meeting their 
disaster-related needs that are not met by insurance or other sources. 
At the same time, the expenditure by disaster victims of financial 
assistance provides much-needed boosts to the local, tribal, and State 
economies, both in the form of expenditures relating to housing needs 
(e.g., rentals of available housing and construction activities) and 
relating to other necessary needs (e.g., funeral, medical and dental 
expenses). It is also obvious that the provision of housing assistance 
and assistance to address other unmet needs provides an indirect 
benefit to local governments because it relieves those governments of 
the burden of providing assistance to their residents and of the 
associated expenses of caring for families that might otherwise require 
sheltering and other forms of assistance. However, as stated above, 
this rule would, for the most part, consolidate and streamline existing 
authorities, and this rule cannot claim benefits from the existing 
programs. Thus FEMA expects that the primary benefits of this rule will 
be a reduction in the cost to the State governments of administering 
these programs and to the public in obtaining this assistance. FEMA has 
not analyzed these possible costs savings and requests additional 
information from the public.

Assessment of Regulation on Families

    The provision of assistance under 42 U.S.C. 5174 pursuant to the 
proposed rule would also have a positive impact on families under 
section 654 of the Treasury and General Government Appropriations Act 
of 1999. That provision requires agencies to assess the impact of 
proposed agency actions on family well-being, the stability and safety 
of families, and the performance of family functions. It is clear that 
FEMA's implementation of the program which is authorized by 42 U.S.C. 
5174 will have a beneficial impact on family well-being in the 
aftermath of emergencies and major disasters. In the absence of such a 
program there would be a greater possibility that family stability 
might be at risk as a result of the stresses that inevitably come from 
the displacement of families from their homes and communities following 
catastrophes that damage their homes or make them inaccessible. The 
provision of housing assistance relieves families of financial and 
emotional stress, enables families to resume a normal lifestyle, and 
helps maintain the cohesion of families that have been struck by 
catastrophes. Therefore, we have determined that this proposed rule is 
consistent with section 654 of the Treasury and General Government 
Appropriations Act of 1999 and that FEMA's implementation of the rule 
would help to stabilize family circumstances following Presidentially-
declared emergencies and major disasters.

Executive Orders 11988 and 11990, Floodplain Management and 
Protection of Wetlands

    Under Executive Order 11988 federal agencies are required to 
``provide leadership to reduce the risk of flood loss, to minimize the 
impact of floods on human safety, health and welfare, and to restore 
and preserve the natural and beneficial values served by floodplains * 
* *'' See section 1 of E.O. 11988. Under Executive Order 11990 federal 
agencies are required to ``provide leadership and * * *take action to 
minimize the destruction, loss or degradation of wetlands, and to 
preserve and enhance the natural and beneficial values of wetlands in 
carrying out the agency's responsibilities * * * '' See section 1 of 
E.O. 11990. The requirements of these Executive Orders apply in the 
context of the provision of federal financial assistance relating to, 
among other things, construction and property improvement activities, 
as well as conducting federal programs affecting land use.
    Most of the activities that FEMA will carry out pursuant to section 
408 of the Stafford Act and these regulations will not involve either 
providing federal financial assistance relating to construction and 
property improvements or conducting federal programs that will affect 
land use. We anticipate that much of the housing assistance we will 
provide in the context of major disasters which are declared by the 
President after May 1, 2002, will be in the form of funds to rent 
alternative accommodations while victims' pre-disaster residences are 
being repaired. See subsection 408(c)(1)(A)(i). A substantial portion 
of the housing assistance we will provide when this rule becomes 
effective will be in the form of funding to repair residences which 
have been damaged by major disasters. See subsection 408(c)(2). These 
types of construction activities are not the type, which typically 
trigger the application of the Executive Orders. Finally, the majority 
of the needs that will be addressed under subsection 408(e) of the 
Stafford Act relate to replacement of personal property and to medical, 
dental, and

[[Page 3419]]

funeral expenses. These forms of financial assistance do not trigger 
the Executive Orders either. See 44 CFR 9.5(c)(8)-(11), which describe 
FEMA's interpretation of this issue under the pre-existing versions of 
sections 408 and 411 of the Stafford Act.
    Nevertheless, there are certain activities that are authorized by 
the revised version of section 408 of the Act and this rule that may 
trigger the requirements of the Executive Orders. For example, the use 
of federal funds to construct housing pursuant to subsections 408(c)(3) 
and (4) could trigger the process described in the Executive Orders and 
FEMA's implementing regulation, which appears at 44 CFR part 9. In 
addition, if federal funds were used pursuant to subsection 408(d)(1) 
to construct group sites for the placement of mobile homes or readily 
fabricated dwellings for the use of disaster victims, FEMA would follow 
the process described in the Executive Orders and our implementing 
regulation.

Executive Order 13132, Federalism

    Executive Order 13132 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, on the relationship between 
the national government and 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 proposed rule under Executive Order 13132 and 
have determined that the rule does not have ``substantial direct 
effects on the States'' and therefore does not have the type of 
federalism implications contemplated by the Executive Order. While the 
draft rule contemplates the possible optional involvement of States in 
the implementation of portions of the activities authorized by amended 
section 408 of the Stafford Act, it is also clear that the revised 
statutory provision anticipates that FEMA will have a leadership role 
in overseeing the implementation of the overall program. We can foresee 
no way that the rule would affect significantly the distribution of 
power and responsibilities among the various levels of government or 
limit the policymaking discretion of the States.
    In addition, we have consulted with State and local representatives 
in the development of the proposed rule. Our consultations included 
discussions with various State Emergency Management Directors at 
meetings in: (1) St. Louis, Missouri, in January 2001; (2) at a 
conference of the National Emergency Management Association (NEMA) in 
Arlington, Virginia, in February 2001; and (3) at a NEMA Response and 
Recovery Subcommittee meeting in April 2001. We also held discussions 
with the local emergency management directors at a meeting with the 
International Association of Emergency Managers in Emmitsburg, Maryland 
on April 3, 2001. Further, we held a meeting for the national 
associations and organizations that represent State and local officials 
in Washington, DC on April 26, 2001, in order to describe and discuss 
the issues and programs involved in this proposed rule. Also in 
attendance at the briefing were Governors' Washington, DC 
representatives. In summary, based on our extensive consultations with 
representatives of a number of States, and based on our determination 
that the proposed rule will not have ``substantial direct effects on 
the States'', we believe that the publication of this proposed rule is 
consistent with the terms of Executive Order 13132. We invite comment 
from State and local officials on this important issue.

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 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 proposed rule will 
have a disproportionately high and adverse human health effect on any 
segment of the population. In addition, the proposed rule does not 
impose substantial direct compliance costs on those communities. 
Accordingly, the requirements of the Executive Order do not apply to 
this proposed rule.

Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Under Executive Order 13175, 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 government or we consult with those 
governments. If FEMA complies by consulting, Executive Order 13175 
requires us to provide to the Office of Management and Budget a 
description of the extent of our prior consultations 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 13175 requires us to provide 
to the Director of OMB a tribal summary impact statement describing the 
extent of our prior consultation with tribal officials, the nature of 
their concerns, and our position supporting the need to issue the 
regulation, and a statement of the extent to which we have met the 
concerns of tribal officials.
    The Disaster Mitigation Act of 2000 requires this proposed rule. We 
have not consulted with Indian tribal officials, grounded on our belief 
that this proposed rule will not significantly and uniquely affect the 
communities of Indian tribal governments. Nor will the rule impose 
substantial direct compliance costs on those communities. Accordingly, 
the requirements of Executive Order 13175 do not apply in the context 
of this proposed rule.

List of Subjects in 44 CFR Part 206

    Administrative practice and procedure, Community facilities, 
Disaster Assistance, Grant programs, Loan programs, Reporting and 
recordkeeping requirements.
    Accordingly, amend 44 CFR part 206 as follows:
    1. The authority citation of Part 206 continues to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121--5206; Reorganization Plan No. 3 of 
1978, 43 FR 41943; 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 
19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 
1979 Comp., p. 412; and E.O. 12673, 54 FR 12571, 3 CFR, 1989 Comp., 
p. 214.

    2. Revise Subpart D as follows and remove Subpart E.

[[Page 3420]]

Subpart D--Federal Assistance to Individuals and Households
Sec.
206.101   Federal assistance to individuals and households.
206.102   Definitions.
206.103   Registration period.
206.104   Eligibility factors.
206.105   Criteria for continued assistance.
206.106   Appeals.
206.107   Recovery of funds.
206.108   Housing assistance.
206.109   Disposal of housing units.
206.110   Financial assistance to address other needs.
206.111   State Participation in the Section 408 Program.

Subpart D--Federal Assistance to Individuals and Households


Sec. 206.101  Federal Assistance to Individuals and Households.

    (a) Purpose. This section implements the policy and procedures set 
forth in section 408 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5174. This program provides 
financial assistance and, if necessary, direct assistance to eligible 
individuals and households who, as a direct result of a major disaster, 
have uninsured or under-insured, necessary expenses and serious needs 
and are unable to meet such expenses or needs through other means.
    (b) Maximum amount of assistance. No individual or household will 
receive financial assistance greater than $25,000 under this subpart 
with respect to a single major disaster. FEMA will adjust the $25,000 
limit annually to reflect changes in the Consumer Price Index (CPI) for 
All Urban Consumers that the Department of Labor publishes.
    (c) Multiple types of assistance. One or more types of housing 
assistance may be made available under this section to meet the needs 
of individuals and households in the particular disaster situation. 
FEMA shall determine the appropriate types of housing assistance to be 
provided under this section based on considerations of cost 
effectiveness, convenience to the individuals and households and the 
suitability and availability of the types of assistance. An applicant 
is expected to accept the first offer of housing assistance; 
unwarranted refusal of assistance may result in the forfeiture of 
future housing assistance. Temporary Housing and Repair assistance 
shall be utilized to the fullest extent practicable before other types 
of housing assistance.
    (d) Date of eligibility. Eligibility for Federal assistance under 
this subpart will begin on the date of the incident that results in a 
presidential declaration that a major disaster exists, except that 
reasonable expenses that are incurred in anticipation of and 
immediately preceding such event may be eligible for Federal assistance 
under this chapter.
    (e) Period of assistance. FEMA may provide assistance under this 
subpart for a period not to exceed 18 months from the date of 
declaration. The Associate Director (AD) may extend this period if he/
she determines that due to extraordinary circumstances an extension 
would be in the public interest.
    (f) Assistance not counted as income. Assistance under this subpart 
is not to be counted as income or a resource in the determination of 
eligibility for welfare, income assistance or income-tested benefit 
programs that the Federal Government funds.
    (g) Exemption from garnishment. All assistance provided under this 
subpart is exempt from garnishment, seizure, encumbrance, levy, 
execution, pledge, attachment, release or waiver. Recipients of rights 
under this provision may not reassign or transfer the rights.
    (h) Duplication of benefits. In accordance with the requirements of 
section 312 of the Stafford Act, 42 U.S.C. 5155, FEMA will not provide 
assistance under this subpart when any other source has already 
provided such assistance or when such assistance is available from any 
other source. In the instance of insured applicants, we will provide 
assistance under this subpart only when:
    (1) Payment of the applicable benefits are significantly delayed;
    (2) Applicable benefits are exhausted;
    (3) Applicable benefits are insufficient to cover the housing need; 
or
    (4) Housing is not available on the private market.
    (i) Cost sharing. (1) Except as provided in paragraph (h)(2) of 
this section, the Federal share of eligible costs paid under this 
subpart shall be 100 percent.
    (2) Federal and State cost shares for assistance under Sec. 206.110 
will be as follows;
    (i) The Federal share will be 75 percent; and
    (ii) The State will pay the 25 percent non-Federal share from funds 
that the State makes available.
    (j) Application of the Privacy Act. (1) All provisions of the 
Privacy Act of 1974, 5 U.S.C. 552a, apply to this subpart. FEMA may not 
disclose an applicant's record except in response to:
    (i) A release signed by the applicant that specifies the purpose 
for the release, to whom the release is to be made, and who authorizes 
the release;
    (ii) In accordance with one of the published routine uses in our 
system of records; or
    (iii) As provided in paragraph (i)(2) of this section.
    (2) Under section 408(f)(2) of the Stafford Act, 42 U.S.C. 
5174(f)(2), FEMA must share applicant information with States in order 
for the States to make available any additional State and local 
disaster assistance to individuals and households.
    (i) States receiving applicant information under this paragraph 
must protect such information in the same manner that the Privacy Act 
requires FEMA to protect it.
    (ii) States receiving such applicant information must not disclose 
the information further to other entities, nor must they use it for 
purposes other than providing additional State or local disaster 
assistance to individuals and households.
    (k) Flood Disaster Protection Act requirement. (1) The Flood 
Disaster Protection Act of 1973, Pub. L. 93-234, as amended (42 U.S.C. 
section 4106), imposes certain restrictions on federal financial 
assistance for acquisition and construction purposes. For the purpose 
of this paragraph, financial assistance for acquisition or construction 
purposes means a grant to an individual or household to buy, receive, 
build, repair or improve insurable portions of a home and/or to 
purchase or repair insurable contents. For a discussion of what 
elements of a home and contents are insurable, see 44 CFR part 61, 
Insurance Coverage and Rates.
    (2) Individuals or households may not receive Federal Assistance 
grants for real and/or personal property that is located in a special 
flood hazard area, see Sec. 59.1 of this title. However, if the 
community in which the damaged property is located is participating in 
the National Flood Insurance Program (NFIP), then individuals and 
households can receive assistance. If a community qualifies for and 
enters the National Flood Insurance Program during the 6-month period 
following the declaration, the Governor's Authorized Representative 
(GAR) may request a time extension from FEMA (see Sec. 206.103) to 
accept registrations and to process grant applications in that 
community.
    (3) Flood insurance purchase requirement:
    (i) Individuals and households named by FEMA as eligible recipients 
under section 408 of the Stafford Act who receive a grant, due to flood 
damages, for acquisition or construction purposes under this subpart 
must buy and maintain flood insurance, as required in 42 U.S.C. 4012a, 
for at least the grant amount, in order to get any Federal assistance 
for future flood damage to

[[Page 3421]]

any insurable property. This applies only to real and personal property 
that is in or will be in a designated Special Flood Hazard Area and 
that can be insured under the National Flood Insurance Program.
    (A) If the grantee is a homeowner, flood insurance coverage must be 
maintained on the structure at the flood-damaged property address for 
as long as the address exists. The flood insurance requirement is 
reassigned to any subsequent owner of the flood-damaged structure.
    (B) If the grantee is a renter, flood insurance coverage must be 
maintained on the contents for as long as the renter resides at the 
flood-damaged rental unit. The restriction is lifted once the renter 
moves from the rental unit.
    (ii) FEMA may not provide financial assistance for acquisition or 
construction purposes to individuals or households who fail to buy and 
maintain flood insurance required under paragraph (k)(3)(i) of this 
section.
    (l) Citizenship requirement. (1) Under Title IV of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (Pub. 
L.104-193), FEMA may only provide assistance under this subpart to 
applicants who are:
    (i) U.S. Citizens--born in the United States, derivative citizens, 
or naturalized citizens;
    (ii) Non-Citizen Nationals--generally, persons born in certain 
outlying possessions of the United States, or a person whose parents 
are U.S. non-citizen nationals (subject to certain residency 
requirements); or
    (iii) Qualified Aliens--this category generally includes 
individuals who are Lawful Permanent residents (possessing an alien 
registration receipt card, sometimes referred to as a ``Green Card'') 
or those with legal status provided in Pub. L. 104-193 (admission into 
the U.S. for humanitarian purposes).
    (2) For purposes of this subpart, the citizenship requirements 
listed in this paragraph do not apply to citizens of the Federated 
States of Micronesia (FSM) and the Republic of the Marshall Islands 
(RMI) when residing in the FSM or RMI at the time a declared major 
disaster or emergency impacts this area. However, the requirements of 
this paragraph continue to apply to such citizens when an event affects 
them while residing outside FSM or RMI.


Sec. 206.102  Definitions.

    Adequate, alternate housing means housing that: Accommodates the 
needs of the occupants; is within the normal commuting patterns of the 
area or is within reasonable commuting distance of work, school, or 
agricultural activities that provide over 50 percent of the household 
income; and is within the financial ability of the occupant in the 
realization of a realistic permanent housing plan.
    Alternative housing resources means any housing that is available 
or can quickly be made available in lieu of permanent housing 
construction and is cost-effective when compared to permanent 
construction costs. Some examples are rental resources, mobile homes 
and travel trailers.
    Applicant means an individual or household who has applied for 
assistance under this subpart.
    Assistance from other means includes monetary or in-kind 
contributions from voluntary or charitable organizations, insurance, 
other governmental programs, or from any sources other than those of 
the applicant.
    Dependent means someone who is normally claimed as such on the 
Federal tax return of another, according to the Internal Revenue Code. 
It may also mean the minor children of a couple not living together, 
where the children live in the affected residence with the parent or 
guardian who does not actually claim them on the tax return.
    Displaced applicant means one whose primary residence is 
uninhabitable, inaccessible, required by the landlord or not functional 
as a direct result of the disaster and has no other housing available 
in the area, i.e., a secondary home or vacation home.
    Effective date of assistance means the date that the applicant was 
determined eligible for assistance.
    Eligible hazard mitigation measures are home improvements that an 
applicant can accomplish in order to reduce or prevent future disaster 
damages to essential components of the home.
    Fair market rent means housing market-wide estimates of rents that 
provide opportunities to rent standard quality housing throughout the 
geographic area in which rental housing units are in competition. The 
fair market rent rates applied are those identified by the Department 
of Housing and Urban Development as being adequate for existing rental 
housing in a particular area.
    Financial ability means the capability of the applicant to pay the 
housing costs on a permanent basis. The determination is based on 30 
percent of the post-disaster household income. At the discretion of 
FEMA, extreme or unusual financial circumstances may be considered when 
computing financial ability.
    Financial assistance means a cash grant that may be provided to 
eligible individuals and households, usually in the form of a check or 
electronic funds transfer.
    Functional means an item or home capable of being used for its 
intended purpose.
    Household means all persons (adults and children) who lived in the 
pre-disaster residence who request assistance under this subpart, plus 
any additions during the assistance period, such as infants, spouse, or 
part-time residents who were not present at the time of the disaster, 
but who are expected to return during the assistance period.
    Housing costs means rent and mortgage payments, including 
principal, interest, real estate taxes, real property insurance, and 
utility costs.
    Inaccessible means as a result of the incident, the applicant 
cannot reasonably be expected to gain entry to his or her pre-disaster 
residence due to the disruption, or destruction, of access routes or 
other impediments to access, or restrictions placed on movement by a 
responsible official due to continued health or safety problems.
    Individuals mean all persons living in a household who are not 
dependents.
    In-kind contributions mean something other than monetary 
assistance, such as goods, commodities or services.
    Manufactured housing sites means those sites used for the placement 
of government or privately owned mobile homes, travel trailers, and 
other manufactured housing units, including:
    (1) Commercial Site, a site customarily leased for a fee, which is 
fully equipped to accommodate a housing unit;
    (2) Private Site, a site that the applicant provides or obtains at 
no cost to the Federal Government, complete with utilities; and
    (3) Group Site, a site provided by the State that accommodates two 
or more units and is complete with utilities.
    Necessary expense means the cost associated with acquiring an item 
or items, obtaining a service, or paying for any other activity that 
meets a serious need.
    Occupant means a resident of a housing unit.
    Owner-occupied means that the residence is occupied by:
    (1) The legal owner;
    (2) A person who does not hold formal title to the residence and 
pays no rent, but is responsible for the payment of taxes or 
maintenance of the residence; or
    (3) A person who has lifetime occupancy rights with formal title 
vested in another.

[[Page 3422]]

    Permanent housing plan means a realistic plan that, within a 
reasonable timeframe, puts the disaster victim back into permanent 
housing that is similar to the victim's pre-disaster housing situation. 
A reasonable timeframe includes sufficient time for securing funds, 
locating a permanent dwelling, and moving into the dwelling.
    Primary residence means the dwelling where the applicant normally 
lives, during the major portion of the calendar year, or the dwelling 
that is required because of proximity to employment, including 
agricultural activities, that provide 50 percent of the household's 
income.
    Reasonable commuting distance means a distance that does not place 
undue hardship on an applicant. It also takes into consideration the 
traveling time involved due to road conditions, e.g., mountainous 
regions or bridges out and the normal commuting patterns of the area.
    Safe means secure from disaster-related hazards or threats to 
occupants.
    Sanitary means free of disaster-related health hazards.
    Serious need means the requirement for an item, or service, that is 
essential to an applicant's ability to prevent, mitigate, or overcome a 
disaster-related hardship, injury or adverse condition.
    Uninhabitable--means the dwelling is not safe, sanitary or fit to 
occupy.
    We, our, or us mean FEMA.


Sec. 206.103  Registration Period.

    (a) Initial period. The standard FEMA registration period is 60 
days following the date that the President declares an incident a major 
disaster or an emergency.
    (b) Extension of the registration period. The Regional Director or 
his/her designee may extend the registration period when the State 
requests more time to collect registrations from the affected 
population. The Regional Director or his/her designee may also extend 
the standard registration period when necessary to establish the same 
registration deadline for contiguous counties or States.
    (c) Late registrations. After the standard or extended registration 
period ends, FEMA will accept late registrations for an additional 60 
days. We will process late registrations for those registrants who 
provide suitable documentation to support and justify the reason for 
the delay in their registration.


Sec. 206.104  Eligibility Factors.

    (a) Conditions of eligibility. In general, FEMA may provide 
assistance to individuals and households who qualify for such 
assistance under section 408 of the Stafford Act and this subpart. FEMA 
may only provide assistance:
    (1) When the individual or household meets citizenship requirements 
defined in Sec. 206.101(l);
    (2) When the individual or household has incurred a necessary 
expense or serious need in the disaster area, without regard to their 
residency in the area, within the State in which the President has 
declared an emergency or major disaster;
    (3) In a situation where the applicant has insurance, when the 
individual or household files a claim with their insurance provider for 
all potentially applicable types of insurance coverage and is denied;
    (4) In a situation where the applicant has insurance, when the 
insured individual or household's insurance proceeds have been 
significantly delayed through no fault of his, her or their own, and 
the applicant has agreed to repay the assistance to FEMA or the State 
from insurance proceeds that he, she or they receive later; the 
insurance proceeds are less than the maximum amount of assistance FEMA 
can authorize and the proceeds are insufficient to cover the necessary 
expenses or serious needs; or when housing is not available on the 
private market;
    (5) When the individual or household has accepted all assistance 
from other sources for which he, she, or they are eligible, including 
insurance;
    (6) When the applicant agrees to refund to FEMA or the State any 
portion of the grant that the applicant receives or is eligible to 
receive as assistance from another source;
    (7) With respect to housing assistance, if the primary residence 
has been destroyed, is uninhabitable, or is inaccessible; and
    (8) With respect to housing assistance, if a renter's rental unit 
is no longer available;
    (b) Conditions of ineligibility. We may not provide assistance 
under this subpart:
    (1) For housing to individuals or households who are displaced from 
other than their pre-disaster primary residence;
    (2) For housing to individuals or households who have adequate 
rent-free housing accommodations;
    (3) For housing to individuals or households who own a secondary or 
vacation residence within reasonable commuting distance to the disaster 
area, or who own unoccupied rental property that meets their temporary 
housing needs;
    (4) For housing to individuals or households who evacuated the 
residence in response to official warnings solely as a precautionary 
measure and who are able to return to the residence immediately after 
the incident;
    (5) For housing for improvements or additions to the pre-disaster 
condition of property, except those required to comply with local and 
State ordinances or eligible mitigation measures;
    (6) To individuals or households who have adequate insurance 
coverage and where there is no indication that insurance proceeds will 
be delayed, or who have refused assistance from insurance providers;
    (7) To individuals or households whose damaged primary residence is 
located in a designated special flood hazard area, and in a community 
that is not participating in the National Flood Insurance Program, 
except that financial assistance may be provided to rent alternate 
housing and for medical, dental and funeral expenses to such 
individuals or households;
    (8) For business losses, including farm businesses and self-
employment; or
    (9) For any items not otherwise authorized by this section.


Sec. 206.105  Criteria for Continued Assistance.

    (a) FEMA expects all recipients of assistance under this subpart to 
obtain and occupy permanent housing at the earliest possible time. FEMA 
may provide continued Housing assistance up to18 months, based on need, 
and generally only when adequate, alternate housing is not available or 
when the permanent housing plan has not been fulfilled through no fault 
of the applicant.
    (b) Additional Criteria for Continued Assistance:
    (1) All applicants requesting continued rent assistance must 
establish a realistic permanent housing plan no later than the first 
certification for continued assistance. Applicants will be required to 
provided documentation showing that they are making efforts to obtain 
permanent housing.
    (2) Applicants requesting continued rent assistance must submit 
rent receipts to show that they have exhausted the FEMA rent funds.
    (3) FEMA generally expects that pre-disaster renters will use their 
initial rental assistance to obtain permanent housing. However, we may 
certify them for continued rent assistance when adequate, alternate 
housing is not available, or when they have not realized a permanent 
housing plan through no fault of their own.

[[Page 3423]]

    (4) FEMA may certify pre-disaster owners for continued rent 
assistance when adequate, alternate housing is not available, or when 
they have not realized a permanent housing plan through no fault of 
their own.
    (5) Individuals or households requesting additional assistance for 
personal property, transportation, medical, dental, funeral, moving and 
storage, or other necessary expenses and serious needs will be required 
to submit information and/or documentation identifying the continuing 
need.


Sec. 206.106  Appeals.

    (a) Under the provisions of section 423 of the Stafford Act, 
applicants for assistance under this subpart may appeal any 
determination of eligibility for assistance made under this subpart. 
Applicants must file their appeal within 60 days after the date that we 
notify the applicant of the award or denial of assistance. Applicants 
may appeal the following:
    (1) Eligibility for assistance, including recoupment;
    (2) Amount or type of assistance;
    (3) Cancellation of an application;
    (4) The rejection of a late application;
    (5) The denial of continued assistance under section 206.105, 
Criteria for Continued Assistance;
    (6) FEMA's intent to collect rent for occupants of a housing unit 
that FEMA provides;
    (7) Termination of direct housing assistance;
    (8) Denial of a request to purchase a FEMA-provided housing unit at 
the termination of eligibility;
    (9) The sales price of a FEMA-provided housing unit they want to 
purchase; or
    (10) Any other eligibility-related decision.
    (b) Appeals must be in writing and explain the reason(s) for the 
appeal. The applicant or person who the applicant authorizes to act on 
his or her behalf must sign the appeal. If someone other than the 
applicant files the appeal, then the applicant must also submit a 
signed statement giving that person authority to represent him, her or 
them.
    (c) Applicants must appeal to the Regional Director or his/her 
designee for decision made under this subpart, except when FEMA has 
made a grant to the State to provide assistance to individuals and 
households under Sec. 206.111(a), State Administration of Other Needs 
Program.
    (d) An applicant may ask for a copy of information in his/her or 
their file by writing to FEMA or the State. If someone other than the 
applicant is submitting the request, then the applicant must also 
submit a signed statement giving that person authority to represent 
him, her, or them.
    (e) The appropriate FEMA or State program official will notify the 
applicant in writing of the receipt of the appeal.
    (f) The Regional Director or his/her designee or appropriate State 
official will review the original decision after receiving the appeal. 
FEMA or the State will give the appellant a written notice of the 
disposition of the appeal within 90 days of the receiving the appeal. 
The decision of the appellate authority is final.


Sec. 206.107  Recovery of Funds.

    (a) The applicant must agree to repay to FEMA or the State from 
insurance proceeds or recoveries from any other source an amount 
equivalent to the value of the assistance provided. In no event must 
the amount repaid to FEMA exceed the amount that the applicant recovers 
from insurance or any other source.
    (b) An applicant must return funds to FEMA or the State when FEMA 
or the State determines that FEMA or the State made the grant 
erroneously, the applicant spent the money inappropriately, or the 
applicant obtained the grant through fraudulent means.
    (c) If FEMA has approved a grant to the State to provide assistance 
under section 206.110, then the State must return to FEMA 75 percent of 
all funds recovered by the State from applicants. FEMA will return to 
the State 25 percent of all funds recovered from applicants under 
Sec. 206.110 when FEMA administers the program.


Sec. 206.108  Housing Assistance.

    (a) Purpose. FEMA may provide financial or direct assistance under 
this section to respond to the disaster-related housing needs of 
individuals and households.
    (b) Types of housing assistance--(1) Temporary housing assistance--
(i) Financial assistance. Eligible individuals and households may 
receive financial assistance to rent alternate housing resources, 
existing rental units, manufactured housing, recreational vehicles or 
other readily fabricated dwellings. In addition, FEMA may provide 
assistance for the reasonable cost of any transportation, utility 
hookups, or installation of a manufactured housing unit or recreational 
vehicle to be used for housing and reasonable lodging expenses incurred 
because of the disaster.
    (A) We will include all members of a pre-disaster household in a 
single registration and will provide assistance for one temporary 
housing residence, unless the Regional Director or his/her designee 
determines that the size or nature of the household requires that we 
provide assistance for more than one residence.
    (B) FEMA will base the rental assistance on the Department of 
Housing and Urban Development's current fair market rates for existing 
rental units. FEMA will further base the applicable rate on the 
household's bedroom requirement and the location of the rental unit.
    (C) The occupant is responsible for all utility costs and security 
deposits, except where the utility does not meter services separately 
and utilities are a part of the rental charge. The Regional Director or 
his/her designee may authorize the payment of security deposits; 
however, the owner or occupant must reimburse the full amount of the 
security deposit to the Federal Government before or at the time that 
the temporary housing assistance ends.
    (ii) Direct assistance. (A) FEMA may provide direct assistance in 
the form of purchased or leased temporary housing units directly to 
individuals or households who lack available housing resources and 
would be unable to make use of the assistance provided under paragraph 
(b)(1)(i) of this section.
    (B) FEMA will include all members of a household in a single 
application and will provide assistance for one temporary housing 
residence, unless the Regional Director or his/her designee determines 
that the size or nature of the household requires that we provide 
assistance for more than one residence.
    (C) Any site upon which a FEMA-provided housing unit is placed must 
comply with applicable State and local codes and ordinances, as well as 
44 CFR part 9, Floodplain Management and Protection of Wetlands, and 
Part 10, Environmental Considerations.
    (D) All utility costs and security deposits are the responsibility 
of the occupant except where the utility does not meter utility 
services separately and utility services are a part of the rental 
charge.
    (E) FEMA-provided housing units may be placed in the following 
locations:
    (1) A commercial site that is complete with utilities; when the 
Regional Director or his/her designee determines that the upgrading of 
commercial sites, or installation of utilities on such sites, will 
provide more cost-effective, timely and suitable temporary housing than

[[Page 3424]]

other types of resources, then Federal assistance may be authorized for 
such actions.
    (2) A private site that an applicant provides, complete with 
utilities; when the Regional Director or his/her designee determines 
that the cost of installation or repairs of essential utilities on 
private sites will provide more cost effective, timely, and suitable 
temporary housing than other types of resources, then Federal 
assistance may be authorized for such actions.
    (3) A group site the State or local government provides that 
accommodates two or more units and is complete with utilities; when the 
Regional Director or his/her designee determines that the cost of 
developing a group site provided by the State or local government, to 
include installation or repairs of essential utilities on the sites, 
will provide more cost effective, timely, and suitable temporary 
housing than other types of resources, then Federal assistance may be 
authorized for such actions.
    (4) A group site provided by FEMA, if the Regional Director or his/
her designee determines that such a site would be more economical or 
accessible than one that the State or local government provides.
    (F) At the end of the 18-month period of assistance, FEMA may 
charge up to the fair market rent rate for each temporary housing unit 
provided. We will base the rent charged on the number of bedrooms 
occupied and needed by the household. When establishing the amount of 
rent, FEMA will take into account the financial ability of the 
household.
    (G) We may terminate direct assistance for reasons that include, 
but are not limited to, the following:
    (1) The period of assistance expired under Sec. 206.101(d) and has 
not been extended;
    (2) Adequate alternate housing is available to the occupant(s);
    (3) The occupant obtained housing assistance either through 
misrepresentation or fraud;
    (4) The occupant failed to comply with any term of the lease/rental 
agreement or other rules of the site where the unit is located.
    (5) The occupant does not provided documentation showing that they 
are working towards the permanent housing plan
    (H) FEMA will provide written notice when initiating the 
termination of any assistance that we provide under our lease 
agreements. This notice will specify the reasons for termination of 
assistance and occupancy, the date of termination, the procedure for 
appealing the determination, and the occupant's liability for such 
additional charges as the Regional Director or his/her designee deems 
appropriate after the termination date, including fair market rent for 
the unit.
    (I) Duplication of benefits may occur when an applicant has 
additional living expense insurance benefits to cover the cost of 
renting alternate housing. In these instances, FEMA may provide a 
temporary housing unit if adequate alternate housing is not available, 
or if doing so is in the best interest of the household and the 
government. We will establish fair market rent, not to exceed insurance 
benefits available.
    (2) Repairs. (i) FEMA may provide financial assistance for the 
repairs of uninsured disaster-related damages to an owner's primary 
residence. The funds are to help return owner-occupied primary 
residences to a safe and sanitary living or functioning condition. 
Repairs may include utilities and residential infrastructure (such as 
private access routes, wells and/or septic systems) damaged by a major 
disaster.
    (ii) The type of repair FEMA authorizes may vary depending upon the 
nature of the disaster. We may authorize repair of items where feasible 
or replacement when necessary to insure the safety or health of the 
occupant and to make the residence functional.
    (iii) FEMA may also provide assistance for eligible hazard 
mitigation measures that reduce the likelihood of future damage to such 
residences, utilities or infrastructure.
    (iv) Eligible individuals or households may receive up to $5,000 
under this paragraph, adjusted annually to reflect changes in the CPI, 
to repair damages to their primary residence without first having to 
show that the assistance can be met through other means, except 
insurance proceeds.
    (v) The individual or household is responsible for obtaining local 
permits or inspections that applicable State or local building codes 
may require.
    (3) Replacement. FEMA may provide financial assistance under this 
paragraph to replace a disaster-damaged owner's occupied, primary 
residence if the dwelling can be replaced, in its entirety, for $10,000 
or less, as adjusted annually to reflect changes in the CPI.
    (4) Permanent housing construction. FEMA may provide financial or 
direct assistance to applicants for the purpose of constructing 
permanent housing in insular areas outside the continental United 
States and in other remote locations when alternative housing resources 
are not available and the types of financial or direct temporary 
housing assistance described in paragraph (b)(1) of this section are 
unavailable, infeasible, or not cost-effective.
    (c) Eligible costs. (1) Repairs to the primary residence or 
replacement of items must be disaster-related and must be of average 
quality, size, and capacity, taking into consideration the needs of the 
occupant. Repairs to the primary residence are limited to restoration 
of the dwelling to a safe and sanitary living or functioning condition 
and may include:
    (i) Repair or replacement of the structural components, including 
foundation, exterior walls, and roof;
    (ii) Repair or replacement of the structure's windows and doors;
    (iii) Repair or replacement of the structure's Heating, Ventilation 
and Air Conditioning System;
    (iv) Repair or replacement of the structure's utilities, including 
electrical, plumbing, gas, water and sewage systems;
    (v) Repair or replacement of the structure's interior, including 
floors, walls, ceilings, doors and cabinetry;
    (vi) Repair to the structure's access and egress, including 
privately owned access road;
    (vii) Blocking, leveling, and anchoring of a mobile home, and 
reconnecting or resetting mobile home sewer, water, electrical and fuel 
lines and tanks; and
    (viii) Items or services determined to be eligible hazard 
mitigation measures.
    (2) Permanent Housing Construction, in general, must be consistent 
with current minimal local building codes and standards where they 
exist, or minimal acceptable construction industry standards in the 
area. Dwellings will be of average quality, size and capacity, taking 
into consideration the needs of the occupant.


Sec. 206.109  Disposal of Housing Units.

    (a) FEMA may sell housing units purchased under 
Sec. 206.108(b)(1)(ii), Temporary Housing, Direct Assistance, as 
follows:
    (1) Sale to an applicant.
    (i) Sale to the individual or household occupying the unit, if the 
occupant lacks permanent housing, has a site that complies with local 
codes and ordinances and Part 9 of this Title.
    (ii) Adjustment to the sales price.
    (A) FEMA may approve adjustments to the sales price when selling a 
housing unit to the occupant of a unit, if the purchaser's financial 
resources are less than the fair market value of the home or unit, and 
when doing so is in the best interest of the applicant and FEMA.
    (iii) We will deposit the proceeds of a sale under paragraph (a)(1) 
of this

[[Page 3425]]

section in the appropriate Disaster Relief Fund account.
    (iv) FEMA may sell a housing unit to an individual or household 
only on the condition that the purchaser agrees to obtain and maintain 
hazard insurance, as well as flood insurance on the unit if it is or 
will be in a designated Special Flood Hazard Area.
    (2) Other methods of disposal:
    (i) FEMA may sell, transfer, donate, or otherwise make a unit 
available directly to a State or other governmental entity, or to a 
voluntary organization, for the sole purpose of providing temporary 
housing to disaster victims in major disasters and emergencies. As a 
condition of the sale, transfer, or donation, or other method of 
provision, the State, governmental entity, or voluntary organization 
must agree to:
    (A) Comply with the nondiscrimination provisions of the Stafford 
Act, 42 U.S.C. 5151; and
    (B) Obtain and maintain hazard insurance on the unit, as well as 
flood insurance if the housing unit is or will be in a designated 
Special Flood Hazard Area.
    (ii) FEMA may also sell housing units at a fair market value to any 
other person.
    (b) A unit will be sold ``as is, where is'', except for repairs 
FEMA deems necessary to protect health or safety, which are to be 
completed before the sale. There will be no implied warranties. In 
addition, FEMA will inform the purchaser that he/she may have to bring 
the unit up to codes and standards that are applicable at the proposed 
site.


Sec. 206.110  Financial Assistance to Address Other Needs.

    (a) Purpose. FEMA and the State may provide financial assistance to 
individuals and households who have other disaster-related necessary 
expenses or serious needs. To qualify for a grant under this section, 
an applicant must also:
    (1) Apply to the United States Small Business Administration's 
(SBA) Disaster Home Loan Program for all available assistance under the 
program; and
    (2) Be declined for SBA Disaster Home Loan Program assistance; or
    (3) Demonstrate that the SBA assistance received does not satisfy 
their total necessary expenses or serious needs arising out of the 
major disaster.
    (b) Types of assistance.--(1) Medical, dental, and funeral 
expenses. FEMA may provide financial assistance for medical, dental and 
funeral items or services to meet the disaster-related necessary 
expenses and serious needs of individuals and households.
    (2) Personal property, transportation, and other expenses. (i) FEMA 
may provide financial assistance for personal property and 
transportation items or services to meet the disaster-related necessary 
expenses and serious needs of individuals and households.
    (ii) FEMA may provide financial assistance for other items or 
services that are not included in the specified categories for other 
assistance but which FEMA approves, in coordination with the State, as 
eligible to meet unique necessary expenses and serious needs of 
individuals and households.
    (c) Eligible costs.--(1) Personal property. Necessary expenses and 
serious needs for repair or replacement of personal property are 
generally limited to the following:
    (i) Clothing;
    (ii) Household items, furnishings or appliances;
    (iii) Tools, specialized or protective clothing, and equipment 
required by an employer as a condition of employment;
    (iv) Computers, uniforms, schoolbooks and supplies required for 
educational purposes; and
    (v) Cleaning or sanitizing any eligible personal property item.
    (2) Transportation. Necessary expenses or serious needs for 
transportation are generally limited to the following:
    (i) Repairing or replacing vehicles; and
    (ii) Financial assistance for public transportation and any other 
transportation related costs or services.
    (3) Medical expenses. Medical expenses are generally limited to the 
following:
    (i) Medical costs;
    (ii) Dental costs; and
    (iii) Repair or replacement of medical equipment.
    (4) Funeral expenses. Funeral expenses are generally limited to the 
following
    (i) Funeral services;
    (ii) Burial or cremation; and
    (iii) Other related funeral expenses.
    (5) Moving and storage expenses. Necessary expenses and serious 
needs related to moving and storing personal property away from the 
threat of damage including the evacuation, storage, and return of the 
personal property to the individual or household's place of residence.
    (6) Other. Other disaster-related expenses not addressed in the 
above categories may include:
    (i) Costs of towing, setup, and connecting or reconnecting 
essential utilities for an owner-occupied manufactured housing unit not 
provided by FEMA; and
    (ii) Other miscellaneous items or services that FEMA, in 
consultation with the State, determines are necessary expenses and 
serious needs.


Sec. 206.111  State Participation in the Section 408 Program.

    (a) State Administration of Other Needs Program. A State may 
request a grant from FEMA to provide financial assistance to 
individuals and households in the State under Sec. 206.110 of this 
subpart. The total Federal grant under this paragraph will be equal to 
75 percent of the cost of meeting necessary expenses or serious needs 
of individuals and households, plus State administrative costs not to 
exceed 5 percent of the Federal grant. Any State that administers the 
program to provide financial assistance to individuals and households 
must administer the program consistent with Sec. 206.110 of this 
subpart and under the Memorandum of Understanding that we describe at 
paragraph (c) of this section.
    (b) State Participation in the Management of the Temporary Housing-
Direct Assistance Program. A State may request authority to participate 
in the management of the Temporary Housing-Direct Assistance Program 
that we describe at Sec. 206.108(b)(1)(ii) of this subpart. The total 
Federal cost under this paragraph will be 100 percent. The Regional 
Director or his/her designee may approve such a request if State 
participation in the management of the program would be in the best 
interest of the Federal government and those needing housing 
assistance.
    (1) Any State that participates in the management of a Temporary 
Housing-Direct Assistance Program must do so consistent with 
Sec. 206.108(b)(1)(ii) of this subpart and under the Memorandum of 
Understanding that we describe at paragraph (c) of this section;
    (2) Before a State may participate in the management of the 
Temporary Housing-Direct Assistance Program, the State must agree to 
hold and save the United States free from damages and indemnify the 
Federal Government against any claims arising from the Temporary 
Housing-Direct Assistance Program;
    (3) The State may perform one or more of the following activities 
in the course of its participation in the management of the Temporary 
Housing-Direct Assistance Program:
    (i) Site assessment;
    (ii) Unit procurement and installation;
    (iii) Unit maintenance;
    (iv) Staging operations;
    (v) Group site design and development;

[[Page 3426]]

    (vi) Occupant Services (Leasing in and certifying occupants for 
continuing assistance); and
    (vii) Site Restoration.
    (c) FEMA-State Memorandum of Understanding. The delivery of 
assistance by a State under this section is contingent upon and 
governed by a FEMA-State Memorandum of Understanding (MOU), which 
describes the partnership between FEMA and the State for the delivery 
of assistance under section 408 of the Stafford Act, 42 U.S.C. 5174.
    (1) General. The MOU explains the roles and responsibilities of 
FEMA and the State in the provision of assistance by the State under 
this section;
    (2) The Regional Director and the Governor or designee will execute 
the MOU, which they will renew annually. The effective date of each 
year's MOU will be January 1, and each executed MOU will be effective 
for one year. FEMA and the State may amend executed MOUs during the 
course of a year.
    (3) If both parties do not execute an MOU by January 1, FEMA will 
administer all assistance under this section for that calendar year.
    (4) The MOU will include provisions relating to the need for the 
State to comply with this section and the financial and grants 
management mandates that all applicable Federal laws, regulations and 
circulars impose, including parts 11 and 13 of this title.
    (5) The MOU will include provisions for State compliance with the 
nondiscrimination provisions of the Stafford Act, 42 U.S.C. 5151.

    Dated: January 15, 2002.
Michael D. Brown,
Acting Deputy Director.
[FR Doc. 02-1386 Filed 1-22-02; 8:45 am]
BILLING CODE 6718-02-P