[Federal Register Volume 67, Number 38 (Tuesday, February 26, 2002)]
[Rules and Regulations]
[Pages 8844-8854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4321]



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Part III





Federal Emergency Management Agency





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44 CFR Parts 201 and 206



Hazard Mitigation Planning and Hazard Mitigation Grant Program; Interim 
Final Rule

  Federal Register / Vol. 67, No. 38 / Tuesday, February 26, 2002 / 
Rules and Regulations  

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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Parts 201 and 206

RIN 3067-AD22


Hazard Mitigation Planning and Hazard Mitigation Grant Program

AGENCY: Federal Emergency Management Agency.

ACTION: Interim final rule.

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SUMMARY: This rule addresses State mitigation planning, identifies new 
local mitigation planning requirements, authorizes Hazard Mitigation 
Grant Program (HMGP) funds for planning activities, and increases the 
amount of HMGP funds available to States that develop a comprehensive, 
enhanced mitigation plan. This rule also requires that repairs or 
construction funded by a disaster loan or grant must be carried out in 
accordance with applicable standards and says that FEMA may require 
safe land use and construction practices as a condition of grantees 
receiving disaster assistance under the Stafford Act.

DATES: Effective Date: February 26, 2002.
    Comment Date: We will accept written comments through April 29, 
2002.

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

FOR FURTHER INFORMATION CONTACT: Margaret E. Lawless, Federal Insurance 
and Mitigation Administration, Federal Emergency Management Agency, 500 
C Street, SW., Washington, DC, 20472, 202-646-3027, (facsimile) 202-
646-3104, or (email) [email protected].

SUPPLEMENTARY INFORMATION:

Introduction

    Throughout the preamble and the rule the terms ``we'', ``our'' and 
``us'' refer to FEMA.
    Section 322 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (Stafford Act or the Act), 42 U.S.C. 5165, enacted under 
Sec. 104 the Disaster Mitigation Act of 2000, (DMA 2000) P.L. 106-390, 
provides new and revitalized approaches to mitigation planning. This 
section: (1) Continues the requirement for a Standard State Mitigation 
plan as a condition of disaster assistance; (2) provides for States to 
receive an increased percentage of HMGP funds (from 15 to 20 percent of 
the total estimated eligible Federal assistance) if, at the time of the 
declaration of a major disaster, they have in effect a FEMA-approved 
Enhanced State Mitigation Plan that meets the factors listed in this 
rule; (3) establishes a new requirement for local mitigation plans; and 
(4) authorizes up to 7 percent of the HMGP funds available to a State 
to be used for development of State, tribal, and local mitigation 
plans. We will give Indian tribal governments the opportunity to 
fulfill the requirements of Sec. 322 either as a grantee or a 
subgrantee. An Indian tribal government may choose to apply for HMGP 
funding directly to us and would then serve as a grantee, meeting the 
State level responsibilities, or it may apply through the State, 
meeting the local government or subgrantee responsibilities.
    Section 322, in concert with other sections of the Act, provides a 
significant opportunity to reduce the Nation's disaster losses through 
mitigation planning. In addition, implementation of planned, pre-
identified, cost-effective mitigation measures will streamline the 
disaster recovery process. The Act provides a framework for linking 
pre- and post-disaster mitigation planning and initiatives with public 
and private interests to ensure an integrated, comprehensive approach 
to disaster loss reduction. The language in the Act, taken as a whole, 
emphasizes the importance of strong State and local planning processes 
and comprehensive program management at the State level. The new 
planning criteria also support State administration of the HMGP, and 
contemplate a significant State commitment to mitigation activities, 
comprehensive State mitigation planning, and strong program management.
    The planning process also provides a link between State and local 
mitigation programs. Both State level and local plans should address 
strategies for incorporating post-disaster early mitigation 
implementation strategies and sustainable recovery actions. We also 
recognize that governments are involved in a range of planning 
activities and that mitigation plans may be linked to or reference 
hazardous materials and other non-natural hazard plans. Improved 
mitigation planning will result in a better understanding of risks and 
vulnerabilities, as well as to expedite implementation of measures and 
activities to reduce those risks, both pre- and post-disaster.
    Section 409 of the Stafford Act, 42 U.S.C. 5176, which required 
mitigation plans and the use of minimum codes and standards, was 
repealed by the DMA 2000. These issues are now addressed in two 
separate sections of the law: mitigation planning is in section 322 of 
the Act, and minimum codes and standards are in section 323 of the Act. 
We previously implemented section 409 through 44 CFR Part 206, Subpart 
M. Since current law now distinguishes the planning from the codes and 
standards in separate sections, we will address them in different 
sections of the CFR. We address the new planning regulations in Part 
201 to reflect the broader relevance of planning to all FEMA mitigation 
programs, while the minimum standards remain in Part 206, Federal 
Disaster Assistance, Subpart M. The regulations implementing the Hazard 
Mitigation Grant Program are in Part 206, Subpart N. This rule also 
contains changes to Subpart N, to reflect the new planning criteria 
identified in section 322 of the Act.
    The administration is considering changes to FEMA's mitigation 
programs in the President's Budget for FY 2003. However, States and 
localities still would be required to have plans in effect, which meet 
the minimum requirements under this rule, as a condition of receiving 
mitigation assistance after November 1, 2003.
    Implementation Strategy. States must have an approved hazard 
mitigation plan in order to receive Stafford Act assistance, excluding 
assistance provided pursuant to emergency provisions. These regulations 
provide criteria for the new two-tiered State mitigation plan process: 
Standard State Mitigation Plans, which allow a State to receive HMGP 
funding based on 15 percent of the total estimated eligible Stafford 
Act disaster assistance, and Enhanced State Mitigation Plans, which 
allow a State to receive HMGP funds based on 20 percent of the total 
estimated eligible Stafford Act disaster assistance. Enhanced State 
Mitigation Plans must demonstrate that the State has developed a 
comprehensive mitigation program, that it effectively uses available 
mitigation funding, and that it is capable of managing the increased 
funding. All State Mitigations Plans must be reviewed, revised, and re-
approved by FEMA every three years. An important requirement of the 
legislation is that we must approve a completed enhanced plan before a 
disaster declaration, in order for the State to be eligible for the 
increased funding.
    We will no longer require States to revise their mitigation plan 
after every disaster declaration, as under former

[[Page 8845]]

 section 409 of the Act, 42 U.S.C. 5176. We recommend, however, that 
States consider revising their plan if a disaster or other 
circumstances significantly affect its mitigation priorities. States 
with existing mitigation plans, approved under former section 409, will 
continue to be eligible for the 15 percent HMGP funding until November 
1, 2003, when all State mitigation plans must meet the requirements of 
these regulations. If State plans are not revised and approved to meet 
the Standard State Mitigation Plan requirements by that time, they will 
be ineligible for Stafford Act assistance, excluding emergency 
assistance.
    Indian tribal governments may choose to apply directly to us for 
HMGP funding, and would therefore be responsible for having an approved 
State level mitigation plan, and would act as the grantee. If an Indian 
tribal government chooses to apply for HMGP grants through the State, 
they would be responsible for having an approved local level mitigation 
plan, and would serve as a subgrantee accountable to the State as 
grantee.
    This rule also establishes local planning criteria so that these 
jurisdictions can actively begin the hazard mitigation planning 
process. This requirement is to encourage the development of 
comprehensive mitigation plans before disaster events. Section 322 
requires local governments to have an approved local mitigation plan to 
be eligible to receive an HMGP project grant; however, this requirement 
will not fully take effect until November 1, 2003. FEMA Regional 
Directors may grant an exception to this requirement in extenuating 
circumstances. Until November 1, 2003, local governments will be able 
to receive HMGP project grant funds and may prepare a mitigation plan 
concurrently with implementation of their project grant. We anticipate 
that the Predisaster Mitigation program authorized by section 203 of 
the Act, 42 U.S.C. 5133, will also support this local mitigation 
planning by making funds available for the development of comprehensive 
local mitigation plans. Managing States that we approve under new 
criteria established under section 404 of the Act, 42 U.S.C. 5170c(c), 
as amended by section 204 of DMA 2000 will have approval authority for 
local mitigation plans. This provision does not apply to States that we 
approved under the Managing State program in effect before enactment of 
DMA 2000.
    Our goal is for State and local governments to develop 
comprehensive and integrated plans that are coordinated through 
appropriate State, local, and regional agencies, as well as non-
governmental interest groups. To the extent feasible and practicable, 
we would also like to consolidate the planning requirements for 
different FEMA mitigation programs. This will ensure that one local 
plan will meet the minimum requirements for all of the different FEMA 
mitigation programs, such as the Flood Mitigation Assistance Program 
(authorized by sections 553 and 554 of the National Flood Insurance 
Reform Act of 1994, 42 U.S.C. 4104c and 42 U.S.C. 4104d), the Community 
Rating System (authorized by section 541 of the National Flood 
Insurance Reform Act of 1994, 42 U.S.C. 4022), the Pre-Disaster 
Mitigation Program (authorized by section 203 of the Stafford Act), the 
Hazard Mitigation Grant Program (authorized by section 404 of the 
Stafford Act), and the mitigation activities that are based upon the 
provisions of section 323 and subsections 406(b) and (e) of the 
Stafford Act. The mitigation plans may also serve to integrate 
documents and plans produced under other emergency management programs. 
State level plans should identify overall goals and priorities, 
incorporating the more specific local risk assessments, when available, 
and including projects identified through the local planning process.
    Under section 322(d), up to 7 percent of the available HMGP funds 
may now be used for planning, and we encourage States to use these 
funds for local plan development. In a memorandum to FEMA Regional 
Directors dated December 21, 2000, we announced that this provision of 
section 322 was effective for disasters declared on or after October 
30, 2000, the date on which the Disaster Mitigation Act of 2000 became 
law. Regional Directors are encouraging States to make these funds 
immediately available to local and Indian tribal governments, although 
the funds can be used for plan development and review at the State 
level as well.
    As discussed earlier in this Supplementary Information, subsection 
323(a) of the Stafford Act, 42 U.S.C. 5166(a), requires as a 
precondition to receiving disaster assistance under the Act that State 
and local governments, as well as eligible private nonprofit entities, 
must agree to carry out repair and reconstruction activities ``in 
accordance with applicable standards of safety, decency, and sanitation 
and in conformity with applicable codes, specifications, and 
standards.'' In addition, that subsection authorizes the President 
(FEMA, by virtue of Executive Order 12148, as amended) to ``require 
safe land use and construction practices, after adequate consultation 
with appropriate State and local officials'' in the course of the use 
of Federal disaster assistance by eligible applicants to repair and 
restore disaster-damaged facilities.
    At the same time that we implement the planning mandates of section 
322 of the Stafford Act, we are also implementing the Minimum Standards 
for Public and Private Structures provision of section 323 of the Act. 
This rule appears at Subpart M of Part 206 of Title 44 of the Code of 
Federal Regulations. As mentioned earlier, the section 322 planning 
regulations are in Part 201, while Part 206, Subpart M includes only 
the minimum codes and standards regulations mandated in Sec. 323. The 
rule to implement Sec. 323 of the Act reinforces the link between pre-
disaster planning, building and construction standards, and post-
disaster reconstruction efforts.
    We encourage comments on this interim final rule, and we will make 
every effort to involve all interested parties prior to the development 
of the Final Rule.

Justification for Interim Final Rule

    In general, FEMA publishes a rule for public comment before issuing 
a final rule, under the Administrative Procedure Act, 5 U.S.C. 533 and 
44 CFR 1.12. The Administrative Procedure Act, however, provides an 
exception from that general rule where the agency for good cause finds 
the procedures for comment and response contrary to public interest. 
Section 322 of the Stafford Act allows States to receive increased 
post-disaster grant funding for projects designed to reduce future 
disaster losses. States will only be eligible for these increased funds 
if they have a FEMA-approved Enhanced State Mitigation Plan.
    This interim final rule provides the criteria for development and 
approval of these plans, as well as criteria for local mitigation plans 
required by this legislation. In order for State and local governments 
to be positioned to receive these mitigation funds as soon as possible, 
these regulations must be in effect. The public benefit of this rule 
will be to assist States and communities assess their risks and 
identify activities to strengthen the larger community and the built 
environment in order to become less susceptible to disasters. Planning 
serves as the vital foundation to saving lives and protecting 
properties, having integrated plans in place can serve to both 
streamline recovery efforts and lessen potential future damages. 
Therefore, we believe it is contrary to the public interest to delay

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the benefits of this rule. In accordance with the Administrative 
Procedure Act, 5 U.S.C. 553(d)(3), we find that there is good cause for 
the interim final rule to take effect immediately upon publication in 
the Federal Register in order to meet the needs of States and 
communities by identifying criteria for mitigation plans in order to 
reduce risks nationwide, establish criteria for minimum codes and 
standards in post-disaster reconstruction, and to allow States to 
adjust their mitigation plans to receive the increase in mitigation 
funding.
    In addition, we believe that, under the circumstances, delaying the 
effective date of this rule until after the comment period would not 
further the public interest. Prior to this rulemaking, FEMA hosted a 
meeting where interested parties provided comments and suggestions on 
how we could implement these planning requirements. Participants in 
this meeting included representatives from the National Emergency 
Management Association, the Association of State Floodplain Managers, 
the National Governors' Association, the International Association of 
Emergency Managers, the National Association of Development 
Organizations, the American Public Works Association, the National 
League of Cities, the National Association of Counties, the National 
Conference of State Legislatures, the International City/County 
Management Association, and the Bureau of Indian Affairs. We took 
comments and suggestions provided at this meeting into account in 
developing this interim final rule. Therefore, we find that prior 
notice and comment on this rule would not further the public interest. 
We actively encourage and solicit comments on this interim final rule 
from interested parties, and we will consider them in preparing the 
final rule. For these reasons, we believe we have good cause to publish 
an interim final rule.

National Environmental Policy Act

    44 CFR 10.8(d)(2)(ii) excludes this rule from the preparation of an 
environmental assessment or environmental impact statement, where the 
rule relates to actions that qualify for categorical exclusion under 44 
CFR 10.8(d)(2)(iii), such as the development of plans under this 
section.

Executive Order 12866, Regulatory Planning and Review

    We have prepared and reviewed this rule under the provisions of 
E.O. 12866, Regulatory Planning and Review. Under Executive Order 
12866, 58 FR 51735, October 4, 1993, a significant regulatory action is 
subject to OMB review and the requirements of the Executive Order. The 
Executive Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    The purpose of this rule is to implement section 322 of the 
Stafford Act which addresses mitigation planning at the State, tribal, 
and local levels, identifies new local planning requirements, allows 
Hazard Mitigation Grant Program (HMGP) funds for planning activities, 
and increases the amount of HMGP funds available to States that develop 
a comprehensive, enhanced mitigation plan. The rule identifies local 
mitigation planning requirements before approval of project grants, and 
requires our approval of an Enhanced State Mitigation plan as a 
condition for increased mitigation funding. The rule also implements 
section 323 of the Stafford Act, which requires that repairs or 
construction funded by disaster loans or grants must comply with 
applicable standards and safe land use and construction practices. As 
such the rule itself will not have an effect on the economy of more 
than $100,000,000.
    Therefore, this rule is a significant regulatory action and is not 
an economically significant rule under Executive Order 12866. The 
Office of Management and Budget (OMB) has reviewed this rule under 
Executive Order 12866.

Executive Order 12898, Environmental Justice

    Under Executive Order 12898, Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations, 59 FR 7629, February 16, 1994, we 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 our programs, denying persons the benefits of our 
programs, or subjecting persons to discrimination because of their 
race, color, or national origin.
    No action that we can anticipate under the final rule will have a 
disproportionately high or adverse human health and environmental 
effect on any segment of the population. Section 322 focuses 
specifically on mitigation planning to: Identify the natural hazards, 
risks, and vulnerabilities of areas in States, localities, and tribal 
areas; support development of local mitigation plans; provide for 
technical assistance to local and tribal governments for mitigation 
planning; and identify and prioritize mitigation actions that the State 
will support, as resources become available. Section 323 requires 
compliance with applicable codes and standards in repair and 
construction, and use of safe land use and construction standards. 
Accordingly, the requirements of Executive Order 12898 do not apply to 
this interim final rule.

Paperwork Reduction Act of 1995

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)) and concurrent with the publication of this interim final 
rule, we have submitted a request for review and approval of a new 
collection of information, which is contained in this interim final 
rule. Under the Paperwork Reduction Act of 1995, a person may not be 
penalized for failing to comply with an information collection that 
does not display a currently valid Office of Management and Budget 
(OMB) control number. The request was submitted to OMB for approval 
under the emergency processing procedures in OMB regulation 5 CFR 
1320.1. OMB has approved this collection of information for use through 
August 31, 2002, under OMB Number 3067-0297.
    We expect to follow this emergency request with a request for OMB 
approval to continue the use of the collection of information for a 
term of three years. The request will be processed under OMB's normal 
clearance procedures in accordance with provisions of OMB regulation 5 
CFR 1320.10. To help us with the timely processing of the emergency and 
normal clearance submissions to OMB, we invite the general public to 
comment on the collection of information. This notice and request for 
comments complies with the provisions of the Paperwork

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Reduction Act of 1995 (44 U.S.C. 3506(c)(2)(A)).

Collection of Information

    Title: State/Local/Tribal Hazard Mitigation Plans under Section 322 
of the Disaster Mitigation Act of 2000.
    Abstract: Section 322 of the Robert T. Stafford Disaster Relief and 
Emergency Assistant Act, as amended by Section 104 of the Disaster 
Mitigation Act of 2000, provides new and revitalized approaches to 
mitigation planning. To obtain Federal assistance, new planning 
provisions require that each state, local, and tribal government 
prepare a hazard mitigation plan to include sections that describe the 
planning process, an assessment of the risks, a mitigation strategy, 
and identification of the plan maintenance and updating process. The 
Act provides a framework for linking pre- and post-disaster mitigation 
planning and initiatives with public and private interests to ensure an 
integrated, comprehensive approach to disaster loss reduction. Under 
Section 322 there is a two-tiered State mitigation plan process. State 
mitigation plans must be reviewed, revised, and submitted to us every 3 
years.
    (1) A Standard State Mitigation Plan must be approved by us in 
order for States to be eligible to receive Hazard Mitigation Grant 
Program (HGMP) funding based on 15 percent of the total estimated 
eligible Federal disaster assistance. This plan demonstrates the 
State's goals, priorities, and commitment to reduce risks from natural 
hazards and serves as a guide for State and local decision makers as 
they commit resources to reducing the effects of natural hazards.
    (2) An Enhanced State Mitigation Plan must be approved by us for a 
State to be eligible to receive HMGP funds based on 20 percent of the 
total estimated eligible Federal disaster assistance. This plan must be 
approved by us within the 3 years prior to the current major disaster 
declaration. It must demonstrate that a State has developed a 
comprehensive mitigation program, is effectively using available 
mitigation funding, and is capable of managing the increased funding.
    To be eligible to receive HMGP project grants, local governments 
must develop Local Mitigation Plans that include a risk assessment and 
mitigation strategy to reduce potential losses and target resources. 
Plans must be reviewed, revised, and submitted to us for approval every 
5 years.
    To receive HMGP project grants, tribal governments may apply as a 
grantee or subgrantee, and will be required to meet the planning 
requirements of a State or local government.
    Estimated Total Annual Burden:

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                                                                      No. of         Hours per     Annual burden
                    Type of collection/forms                        respondents      response          hours
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Update state or tribal mitigation plans (standard state                       18             320           5,760
 mitigation plans)..............................................
State review of local plans.....................................       500 local               8           4,000
                                                                           plans
States develop Enhanced State Mitigation Plans..................               7             100             700
Local or tribal governments develop mitigation plans............       500 local             300         150,000
                                                                           plans
                                                                 -----------------------------------------------
    Total burden................................................  ..............  ..............         160,460
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    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 technological collection 
techniques may further reduce the respondents' burden. FEMA will accept 
comments through April 29, 2002.
    Addressee: Interested persons should submit written comments to 
Muriel B. Anderson, Chief, Records Management Section, Program Services 
and Systems Branch, Facilities Management and Services Division, 
Administration and Resource Planning Directorate, Federal Emergency 
Management Agency, 500 C Street, Street, SW., Washington, DC 20472.

FOR FURTHER INFORMATION CONTACT: You may obtain copies of the OMB 
paperwork clearance package by contacting Ms. Anderson at (202) 646-
2625 (voice), (202) 646-3347 (facsimile), or by e-mail at 
[email protected].

Executive Order 13132, Federalism

    Executive Order 13132, Federalism, dated August 4, 1999, sets forth 
principles and criteria that agencies must adhere to in formulating and 
implementing policies that have federalism implications, that is, 
regulations that have substantial direct effects on the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Federal agencies must closely examine the statutory 
authority supporting any action that would limit the policymaking 
discretion of the States, and to the extent practicable, must consult 
with State and local officials before implementing any such action.
    We have reviewed this rule under E.O.13132 and have concluded that 
the rule does not have federalism implications as defined by the 
Executive Order. We have determined that the rule does not 
significantly affect the rights, roles, and responsibilities of States, 
and involves no preemption of State law nor does it limit State 
policymaking discretion.
    However, we have consulted with State and local officials. In order 
to assist us in the development of this rule, we hosted a meeting to 
allow interested parties an opportunity to provide their perspectives 
on the legislation and options for implementation of Sec. 322. 
Stakeholders who attended the meeting included representatives from the 
National Emergency Management Association, the Association of State 
Floodplain Managers, the National Governors' Association, the 
International Association of Emergency Managers, the National 
Association of Development Organizations, the American Public Works 
Association, the National League of Cities, the National Association of 
Counties, the National Conference of State Legislatures, the 
International City/County Management Association, and the Bureau of 
Indian Affairs. We received valuable input from all parties at the 
meeting, which we took into account in the development of this rule. 
Additionally, we actively encourage and solicit comments on this 
interim final rule from interested parties, and we will

[[Page 8848]]

consider them in preparing the final rule.

Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    We have reviewed this interim final rule under Executive Order 
13175, which became effective on February 6, 2001. Under the Hazard 
Mitigation Grant Program (HMGP), Indian tribal governments will have 
the option to apply for grants directly to us and to serve as 
``grantee'', carrying out ``State'' roles. If they choose this option, 
tribal governments may submit either a State-level Standard Mitigation 
Plan for the 15 percent HMGP funding or a State-level Enhanced 
Mitigation Plan for 20 percent HMGP funding. In either case, Indian 
tribal governments would be able to spend up to 7 percent of those 
funds on planning. Before developing this rule, we met with 
representatives from State and local governments and the Bureau of 
Indian Affairs, to discuss the new planning opportunities and 
requirements of Sec. 322 of the Stafford Act. We received valuable 
input from all parties, which helped us to develop this interim final 
rule.
    In reviewing the interim final rule, we find that it does not have 
``tribal implications'' as defined in Executive Order 13175 because it 
will not have a substantial direct effect on one or more Indian tribes, 
on the relationship between the Federal Government and Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal Government and Indian tribes. Moreover, the interim final rule 
does not impose substantial direct compliance costs on tribal 
governments, nor does it preempt tribal law, impair treaty rights or 
limit the self-governing powers of tribal governments.

Congressional Review of Agency Rulemaking

    We have sent this interim final rule to the Congress and to the 
General Accounting Office under the Congressional Review of Agency 
Rulemaking Act, Public Law 104-121. The rule is a not ``major rule'' 
within the meaning of that Act. It is an administrative action in 
support of normal day-to-day mitigation planning activities required by 
section 322 and compliance under section 323 of the Stafford Act, as 
enacted in DMA 2000.
    The rule will not result in a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. It will not have ``significant adverse 
effects'' on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises. This final rule is subject to 
the information collection requirements of the Paperwork Reduction Act, 
and OMB has assigned Control No. 3067-0297. The rule is not an unfunded 
Federal mandate within the meaning of the Unfunded Mandates Reform Act 
of 1995, Public Law 104-4, and any enforceable duties that we impose 
are a condition of Federal assistance or a duty arising from 
participation in a voluntary Federal program.

List of Subjects in 44 CFR Part 201 and Part 206

    Administrative practice and procedure, Disaster assistance, Grant 
programs, Mitigation planning, Reporting and recordkeeping 
requirements.

    Accordingly, Amend 44 CFR, Subchapter D--Disaster Assistance, as 
follows:
    1. Add Part 201 to read as follows:

PART 201--MITIGATION PLANNING

Sec.
201.1   Purpose.
201.2   Definitions.
201.3   Responsibilities.
201.4   Standard State Mitigation Plans.
201.5   Enhanced State Mitigation Plans.
201.6   Local Mitigation Plans.

    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.


Sec. 201.1  Purpose.

    (a) The purpose of this part is to provide information on the 
polices and procedures for mitigation planning as required by the 
provisions of section 322 of the Stafford Act, 42 U.S.C. 5165.
    (b) The purpose of mitigation planning is for State, local, and 
Indian tribal governments to identify the natural hazards that impact 
them, to identify actions and activities to reduce any losses from 
those hazards, and to establish a coordinated process to implement the 
plan, taking advantage of a wide range of resources.


Sec. 201.2  Definitions.

    Grantee means the government to which a grant is awarded, which is 
accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity 
is designated in the grant award document. Generally, the State is the 
grantee. However, after a declaration, an Indian tribal government may 
choose to be a grantee, or may act as a subgrantee under the State. An 
Indian tribal government acting as grantee will assume the 
responsibilities of a ``state'', as described in this part, for the 
purposes of administering the grant.
    Hazard mitigation means any sustained action taken to reduce or 
eliminate the long-term risk to human life and property from hazards.
    Hazard Mitigation Grant Program means the program authorized under 
section 404 of the Stafford Act, 42 U.S.C 5170c and implemented at 44 
CFR Part 206, Subpart N, which authorizes funding for certain 
mitigation measures identified through the evaluation of natural 
hazards conducted under section 322 of the Stafford Act 42 U.S.C 5165.
    Indian tribal government means any Federally recognized governing 
body of an Indian or Alaska Native tribe, band, nation, pueblo, 
village, or community that the Secretary of Interior acknowledges to 
exist as an Indian tribe under the Federally Recognized Tribe List Act 
of 1994, 25 U.S.C. 479a. This does not include Alaska Native 
corporations, the ownership of which is vested in private individuals.
    Local government is any county, municipality, city, town, township, 
public authority, school district, special district, intrastate 
district, council of governments (regardless of whether the council of 
governments is incorporated as a nonprofit corporation under State 
law), regional or interstate government entity, or agency or 
instrumentality of a local government; any Indian tribe or authorized 
tribal organization, or Alaska Native village or organization; and any 
rural community, unincorporated town or village, or other public 
entity.
    Managing State means a State to which FEMA has delegated the 
authority to administer and manage the HMGP under the criteria 
established by FEMA pursuant to 42 U.S.C. 5170c(c). FEMA may also 
delegate authority to tribal governments to administer and manage the 
HMGP as a Managing State.
    Regional Director is a director of a regional office of FEMA, or 
his/her designated representative.
    Small and impoverished communities means a community of 3,000 or 
fewer individuals that is identified by the State as a rural community, 
and is not a remote area within the corporate boundaries of a larger 
city; is economically disadvantaged, by having an average per capita 
annual income of residents not exceeding 80 percent of national, per 
capita income, based on

[[Page 8849]]

best available data; the local unemployment rate exceeds by one 
percentage point or more, the most recently reported, average yearly 
national unemployment rate; and any other factors identified in the 
State Plan in which the community is located.
    The Stafford Act refers to the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act, Public Law 93-288, as amended (42 U.S.C. 
5121-5206).
    State is any State of the United States, the District of Columbia, 
Puerto Rico, the Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands.
    State Hazard Mitigation Officer is the official representative of 
State government who is the primary point of contact with FEMA, other 
Federal agencies, and local governments in mitigation planning and 
implementation of mitigation programs and activities required under the 
Stafford Act.
    Subgrantee means the government or other legal entity to which a 
subgrant is awarded and which is accountable to the grantee for the use 
of the funds provided. Subgrantees can be a State agency, local 
government, private non-profit organizations, or Indian tribal 
government. Indian tribal governments acting as a subgrantee are 
accountable to the State grantee.


Sec. 201.3  Responsibilities.

    (a) General. This section identifies the key responsibilities of 
FEMA, States, and local/tribal governments in carrying out section 322 
of the Stafford Act, 42 U.S.C. 5165.
    (b) FEMA. The key responsibilities of the Regional Director are to:
    (1) Oversee all FEMA related pre- and post-disaster hazard 
mitigation programs and activities;
    (2) Provide technical assistance and training to State, local, and 
Indian tribal governments regarding the mitigation planning process;
    (3) Review and approve all Standard and Enhanced State Mitigation 
Plans;
    (4) Review and approve all local mitigation plans, unless that 
authority has been delegated to the State in accordance with 
Sec. 201.6(d);
    (5) Conduct reviews, at least once every three years, of State 
mitigation activities, plans, and programs to ensure that mitigation 
commitments are fulfilled, and when necessary, take action, including 
recovery of funds or denial of future funds, if mitigation commitments 
are not fulfilled.
    (c) State. The key responsibilities of the State are to coordinate 
all State and local activities relating to hazard evaluation and 
mitigation and to:
    (1) Prepare and submit to FEMA a Standard State Mitigation Plan 
following the criteria established in Sec. 201.4 as a condition of 
receiving Stafford Act assistance (except emergency assistance).
    (2) In order to be considered for the 20 percent HMGP funding, 
prepare and submit an Enhanced State Mitigation Plan in accordance with 
Sec. 201.5, which must be reviewed and updated, if necessary, every 
three years from the date of the approval of the previous plan.
    (3) At a minimum, review and, if necessary, update the Standard 
State Mitigation Plan by November 1, 2003 and every three years from 
the date of the approval of the previous plan in order to continue 
program eligibility.
    (4) Make available the use of up to the 7 percent of HMGP funding 
for planning in accordance with Sec. 206.434.
    (5) Provide technical assistance and training to local governments 
to assist them in applying for HMGP planning grants, and in developing 
local mitigation plans.
    (6) For Managing States that have been approved under the criteria 
established by FEMA pursuant to 42 U.S.C. 5170c(c), review and approve 
local mitigation plans in accordance with Sec. 201.6(d).
    (d) Local governments. The key responsibilities of local 
governments are to:
    (1) Prepare and adopt a jurisdiction-wide natural hazard mitigation 
plan as a condition of receiving project grant funds under the HMGP, in 
accordance with Sec. 201.6.
    (2) At a minimum, review and, if necessary, update the local 
mitigation plan every five years from date of plan approval to continue 
program eligibility.
    (e) Indian tribal governments. Indian tribal governments will be 
given the option of applying directly to us for Hazard Mitigation Grant 
Program funding, or they may choose to apply through the State. If they 
apply directly to us, they will assume the responsibilities of the 
State, or grantee, and if they apply through the State, they will 
assume the responsibilities of the local government, or subgrantee.


Sec. 201.4  Standard State Mitigation Plans.

    (a) Plan requirement. By November 1, 2003, States must have an 
approved Standard State Mitigation plan meeting the requirements of 
this section, in order to receive assistance under the Stafford Act, 
although assistance authorized under disasters declared prior to 
November 1, 2003 will continue to be made available. In any case, 
emergency assistance provided under 42 U.S.C. 5170a, 5170b, 5173, 5174, 
5177, 5179, 5180, 5182, 5183, 5184, 5192 will not be affected. The 
mitigation plan is the demonstration of the State's commitment to 
reduce risks from natural hazards and serves as a guide for State 
decision makers as they commit resources to reducing the effects of 
natural hazards. States may choose to include the requirements of the 
HMGP Administrative Plan in their mitigation plan.
    (b) Planning process. An effective planning process is essential in 
developing and maintaining a good plan. The mitigation planning process 
should include coordination with other State agencies, appropriate 
Federal agencies, interested groups, and be integrated to the extent 
possible with other ongoing State planning efforts as well as other 
FEMA mitigation programs and initiatives.
    (c) Plan content. To be effective the plan must include the 
following elements:
    (1) Description of the planning process used to develop the plan, 
including how it was prepared, who was involved in the process, and how 
other agencies participated.
    (2) Risk assessments that provide the factual basis for activities 
proposed in the strategy portion of the mitigation plan. Statewide risk 
assessments must characterize and analyze natural hazards and risks to 
provide a statewide overview. This overview will allow the State to 
compare potential losses throughout the State and to determine their 
priorities for implementing mitigation measures under the strategy, and 
to prioritize jurisdictions for receiving technical and financial 
support in developing more detailed local risk and vulnerability 
assessments. The risk assessment shall include the following:
    (i) An overview of the type and location of all natural hazards 
that can affect the State, including information on previous 
occurrences of hazard events, as well as the probability of future 
hazard events, using maps where appropriate;
    (ii) An overview and analysis of the State's vulnerability to the 
hazards described in this paragraph (c)(2), based on estimates provided 
in local risk assessments as well as the State risk assessment. The 
State shall describe vulnerability in terms of the jurisdictions most 
threatened by the identified hazards, and most vulnerable to damage and 
loss associated with hazard events. State owned critical or operated 
facilities located in the

[[Page 8850]]

identified hazard areas shall also be addressed;
    (iii) An overview and analysis of potential losses to the 
identified vulnerable structures, based on estimates provided in local 
risk assessments as well as the State risk assessment. The State shall 
estimate the potential dollar losses to State owned or operated 
buildings, infrastructure, and critical facilities located in the 
identified hazard areas.
    (3) A Mitigation Strategy that provides the State's blueprint for 
reducing the losses identified in the risk assessment. This section 
shall include:
    (i) A description of State goals to guide the selection of 
activities to mitigate and reduce potential losses.
    (ii) A discussion of the State's pre- and post-disaster hazard 
management policies, programs, and capabilities to mitigate the hazards 
in the area, including: an evaluation of State laws, regulations, 
policies, and programs related to hazard mitigation as well as to 
development in hazard-prone areas; a discussion of State funding 
capabilities for hazard mitigation projects; and a general description 
and analysis of the effectiveness of local mitigation policies, 
programs, and capabilities.
    (iii) An identification, evaluation, and prioritization of cost-
effective, environmentally sound, and technically feasible mitigation 
actions and activities the State is considering and an explanation of 
how each activity contributes to the overall mitigation strategy. This 
section should be linked to local plans, where specific local actions 
and projects are identified.
    (iv) Identification of current and potential sources of Federal, 
State, local, or private funding to implement mitigation activities.
    (4) A section on the Coordination of Local Mitigation Planning that 
includes the following:
    (i) A description of the State process to support, through funding 
and technical assistance, the development of local mitigation plans.
    (ii) A description of the State process and timeframe by which the 
local plans will be reviewed, coordinated, and linked to the State 
Mitigation Plan.
    (iii) Criteria for prioritizing communities and local jurisdictions 
that would receive planning and project grants under available funding 
programs, which should include consideration for communities with the 
highest risks, repetitive loss properties, and most intense development 
pressures. Further, that for non-planning grants, a principal criterion 
for prioritizing grants shall be the extent to which benefits are 
maximized according to a cost benefit review of proposed projects and 
their associated costs.
    (5) A Plan Maintenance Process that includes:
    (i) An established method and schedule for monitoring, evaluating, 
and updating the plan.
    (ii) A system for monitoring implementation of mitigation measures 
and project closeouts.
    (iii) A system for reviewing progress on achieving goals as well as 
activities and projects identified in the Mitigation Strategy.
    (6) A Plan Adoption Process. The plan must be formally adopted by 
the State prior to submittal to us for final review and approval.
    (7) Assurances. The plan must include assurances that the State 
will comply with all applicable Federal statutes and regulations in 
effect with respect to the periods for which it receives grant funding, 
in compliance with 44 CFR 13.11(c). The State will amend its plan 
whenever necessary to reflect changes in State or Federal laws and 
statutes as required in 44 CFR 13.11(d).
    (d) Review and updates. Plan must be reviewed and revised to 
reflect changes in development, progress in statewide mitigation 
efforts, and changes in priorities and resubmitted for approval to the 
appropriate Regional Director every three years. The Regional review 
will be completed within 45 days after receipt from the State, whenever 
possible. We also encourage a State to review its plan in the post-
disaster timeframe to reflect changing priorities, but it is not 
required.


Sec. 201.5  Enhanced State Mitigation Plans.

    (a) A State with a FEMA approved Enhanced State Mitigation Plan at 
the time of a disaster declaration is eligible to receive increased 
funds under the HMGP, based on twenty percent of the total estimated 
eligible Stafford Act disaster assistance. The Enhanced State 
Mitigation Plan must demonstrate that a State has developed a 
comprehensive mitigation program, that the State effectively uses 
available mitigation funding, and that it is capable of managing the 
increased funding. In order for the State to be eligible for the 20 
percent HMGP funding, FEMA must have approved the plan within three 
years prior to the disaster declaration.
    (b) Enhanced State Mitigation Plans must include all elements of 
the Standard State Mitigation Plan identified in Sec. 201.4, as well as 
document the following:
    (1) Demonstration that the plan is integrated to the extent 
practicable with other State and/or regional planning initiatives 
(comprehensive, growth management, economic development, capital 
improvement, land development, and/or emergency management plans) and 
FEMA mitigation programs and initiatives that provide guidance to State 
and regional agencies.
    (2) Documentation of the State's project implementation capability, 
identifying and demonstrating the ability to implement the plan, 
including:
    (i) Established eligibility criteria for multi-hazard mitigation 
measures.
    (ii) A system to determine the cost effectiveness of mitigation 
measures, consistent with OMB Circular A-94, Guidelines and Discount 
Rates for Benefit-Cost Analysis of Federal Programs, and to rank the 
measures according to the State's eligibility criteria.
    (iii) Demonstration that the State has the capability to 
effectively manage the HMGP as well as other mitigation grant programs, 
including a record of the following:
    (A) Meeting HMGP and other mitigation grant application timeframes 
and submitting complete, technically feasible, and eligible project 
applications with appropriate supporting documentation;
    (B) Preparing and submitting accurate environmental reviews and 
benefit-cost analyses;
    (C) Submitting complete and accurate quarterly progress and 
financial reports on time; and
    (D) Completing HMGP and other mitigation grant projects within 
established performance periods, including financial reconciliation.
    (iv) A system and strategy by which the State will conduct an 
assessment of the completed mitigation actions and include a record of 
the effectiveness (actual cost avoidance) of each mitigation action.
    (3) Demonstration that the State effectively uses existing 
mitigation programs to achieve its mitigation goals.
    (4) Demonstration that the State is committed to a comprehensive 
state mitigation program, which might include any of the following:
    (i) A commitment to support local mitigation planning by providing 
workshops and training, State planning grants, or coordinated 
capability development of local officials, including Emergency 
Management and Floodplain Management certifications.
    (ii) A statewide program of hazard mitigation through the 
development of legislative initiatives, mitigation councils, formation 
of public/private

[[Page 8851]]

partnerships, and/or other executive actions that promote hazard 
mitigation.
    (iii) The State provides a portion of the non-Federal match for 
HMGP and/or other mitigation projects.
    (iv) To the extent allowed by State law, the State requires or 
encourages local governments to use a current version of a nationally 
applicable model building code or standard that addresses natural 
hazards as a basis for design and construction of State sponsored 
mitigation projects.
    (v) A comprehensive, multi-year plan to mitigate the risks posed to 
existing buildings that have been identified as necessary for post-
disaster response and recovery operations.
    (vi) A comprehensive description of how the State integrates 
mitigation into its post-disaster recovery operations.
    (c) Review and updates. (1) A State must review and revise its plan 
to reflect changes in development, progress in statewide mitigation 
efforts, and changes in priorities, and resubmit it for approval to the 
appropriate Regional Director every three years. The Regional review 
will be completed within 45 days after receipt from the State, whenever 
possible.
    (2) In order for a State to be eligible for the 20 percent HMGP 
funding, the Enhanced State Mitigation plan must be approved by FEMA 
within the three years prior to the current major disaster declaration.


Sec. 201.6  Local Mitigation Plans.

    The local mitigation plan is the representation of the 
jurisdiction's commitment to reduce risks from natural hazards, serving 
as a guide for decision makers as they commit resources to reducing the 
effects of natural hazards. Local plans will also serve as the basis 
for the State to provide technical assistance and to prioritize project 
funding.
    (a) Plan requirement. (1) For disasters declared after November 1, 
2003, a local government must have a mitigation plan approved pursuant 
to this section in order to receive HMGP project grants. Until November 
1, 2003, local mitigation plans may be developed concurrent with the 
implementation of the project grant.
    (2) Regional Directors may grant an exception to the plan 
requirement in extraordinary circumstances, such as in a small and 
impoverished community, when justification is provided. In these cases, 
a plan will be completed within 12 months of the award of the project 
grant. If a plan is not provided within this timeframe, the project 
grant will be terminated, and any costs incurred after notice of 
grant's termination will not be reimbursed by FEMA.
    (3) Multi-jurisdictional plans (e.g. watershed plans) may be 
accepted, as appropriate, as long as each jurisdiction has participated 
in the process and has officially adopted the plan. State-wide plans 
will not be accepted as multi-jurisdictional plans.
    (b) Planning process. An open public involvement process is 
essential to the development of an effective plan. In order to develop 
a more comprehensive approach to reducing the effects of natural 
disasters, the planning process shall include:
    (1) An opportunity for the public to comment on the plan during the 
drafting stage and prior to plan approval;
    (2) An opportunity for neighboring communities, local and regional 
agencies involved in hazard mitigation activities, and agencies that 
have the authority to regulate development, as well as businesses, 
academia and other private and non-profit interests to be involved in 
the planning process; and
    (3) Review and incorporation, if appropriate, of existing plans, 
studies, reports, and technical information.
    (c) Plan content. The plan shall include the following:
    (1) Documentation of the planning process used to develop the plan, 
including how it was prepared, who was involved in the process, and how 
the public was involved.
    (2) A risk assessment that provides the factual basis for 
activities proposed in the strategy to reduce losses from identified 
hazards. Local risk assessments must provide sufficient information to 
enable the jurisdiction to identify and prioritize appropriate 
mitigation actions to reduce losses from identified hazards. The risk 
assessment shall include:
    (i) A description of the type, location, and extent of all natural 
hazards that can affect the jurisdiction. The plan shall include 
information on previous occurrences of hazard events and on the 
probability of future hazard events.
    (ii) A description of the jurisdiction's vulnerability to the 
hazards described in paragraph (c)(2)(i) of this section. This 
description shall include an overall summary of each hazard and its 
impact on the community. The plan should describe vulnerability in 
terms of:
    (A) The types and numbers of existing and future buildings, 
infrastructure, and critical facilities located in the identified 
hazard areas;
    (B) An estimate of the potential dollar losses to vulnerable 
structures identified in paragraph (c)(2)(i)(A) of this section and a 
description of the methodology used to prepare the estimate;
    (C) Providing a general description of land uses and development 
trends within the community so that mitigation options can be 
considered in future land use decisions.
    (iii) For multi-jurisdictional plans, the risk assessment section 
must assess each jurisdiction's risks where they vary from the risks 
facing the entire planning area.
    (3) A mitigation strategy that provides the jurisdiction's 
blueprint for reducing the potential losses identified in the risk 
assessment, based on existing authorities, policies, programs and 
resources, and its ability to expand on and improve these existing 
tools. This section shall include:
    (i) A description of mitigation goals to reduce or avoid long-term 
vulnerabilities to the identified hazards.
    (ii) A section that identifies and analyzes a comprehensive range 
of specific mitigation actions and projects being considered to reduce 
the effects of each hazard, with particular emphasis on new and 
existing buildings and infrastructure.
    (iii) An action plan describing how the actions identified in 
paragraph (c)(2)(ii) of this section will be prioritized, implemented, 
and administered by the local jurisdiction. Prioritization shall 
include a special emphasis on the extent to which benefits are 
maximized according to a cost benefit review of the proposed projects 
and their associated costs.
    (iv) For multi-jurisdictional plans, there must be identifiable 
action items specific to the jurisdiction requesting FEMA approval or 
credit of the plan.
    (4) A plan maintenance process that includes:
    (i) A section describing the method and schedule of monitoring, 
evaluating, and updating the mitigation plan within a five-year cycle.
    (ii) A process by which local governments incorporate the 
requirements of the mitigation plan into other planning mechanisms such 
as comprehensive or capital improvement plans, when appropriate.
    (iii) Discussion on how the community will continue public 
participation in the plan maintenance process.
    (5) Documentation that the plan has been formally adopted by the 
governing body of the jurisdiction requesting approval of the plan 
(e.g., City Council, County Commissioner, Tribal Council). For multi-
jurisdictional plans, each jurisdiction requesting approval of the plan 
must document that it has been formally adopted.

[[Page 8852]]

    (d) Plan review. (1) Plans must be submitted to the State Hazard 
Mitigation Officer for initial review and coordination. The State will 
then send the plan to the appropriate FEMA Regional Office for formal 
review and approval.
    (2) The Regional review will be completed within 45 days after 
receipt from the State, whenever possible.
    (3) Plans must be reviewed, revised if appropriate, and resubmitted 
for approval within five years in order to continue to be eligible for 
HMGP project grant funding.
    (4) Managing States that have been approved under the criteria 
established by FEMA pursuant to 42 U.S.C. 5170c(c) will be delegated 
approval authority for local mitigation plans, and the review will be 
based on the criteria in this part. Managing States will review the 
plans within 45 days of receipt of the plans, whenever possible, and 
provide a copy of the approved plans to the Regional Office.

PART 206--FEDERAL DISASTER ASSISTANCE FOR DISASTERS DECLARED ON OR 
AFTER NOVEMBER 23, 1988

    2. The authority citation for part 206 is revised 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.

    2a. Revise Part 206, Subpart M to read as follows:

Subpart M--Minimum Standards

Sec.
206.400  General.
206.401  Local standards.
206.402  Compliance.


Sec. 206.400  General.

    (a) As a condition of the receipt of any disaster assistance under 
the Stafford Act, the applicant shall carry out any repair or 
construction to be financed with the disaster assistance in accordance 
with applicable standards of safety, decency, and sanitation and in 
conformity with applicable codes, specifications and standards.
    (b) Applicable codes, specifications, and standards shall include 
any disaster resistant building code that meets the minimum 
requirements of the National Flood Insurance Program (NFIP) as well as 
being substantially equivalent to the recommended provisions of the 
National Earthquake Hazards Reduction Program (NEHRP). In addition, the 
applicant shall comply with any requirements necessary in regards to 
Executive Order 11988, Floodplain Management, Executive Order 12699, 
Seismic Safety of Federal and Federally Assisted or Regulated New 
Building Construction, and any other applicable Executive orders.
    (c) In situations where there are no locally applicable standards 
of safety, decency and sanitation, or where there are no applicable 
local codes, specifications and standards governing repair or 
construction activities, or where the Regional Director determines that 
otherwise applicable codes, specifications, and standards are 
inadequate, then the Regional Director may, after consultation with 
appropriate State and local officials, require the use of nationally 
applicable codes, specifications, and standards, as well as safe land 
use and construction practices in the course of repair or construction 
activities.
    (d) The mitigation planning process that is mandated by section 322 
of the Stafford Act and 44 CFR part 201 can assist State and local 
governments in determining where codes, specifications, and standards 
are inadequate, and may need to be upgraded.


Sec. 206.401  Local standards.

    The cost of repairing or constructing a facility in conformity with 
minimum codes, specifications and standards may be eligible for 
reimbursement under section 406 of the Stafford Act, as long as such 
codes, specifications and standards meet the criteria that are listed 
at 44 CFR 206.226(b).


Sec. 206.402  Compliance.

    A recipient of disaster assistance under the Stafford Act must 
document for the Regional Director its compliance with this subpart 
following the completion of any repair or construction activities.

Subpart N--Hazard Mitigation Grant Program

    3. Revise Sec. 206.431 to read as follows:


Sec. 206.431  Definitions.

    Activity means any mitigation measure, project, or action proposed 
to reduce risk of future damage, hardship, loss or suffering from 
disasters.
    Applicant means a State agency, local government, Indian tribal 
government, or eligible private nonprofit organization, submitting an 
application to the grantee for assistance under the HMGP.
    Enhanced State Mitigation Plan is the hazard mitigation plan 
approved under 44 CFR part 201 as a condition of receiving increased 
funding under the HMGP.
    Grant application means the request to FEMA for HMGP funding, as 
outlined in Sec. 206.436, by a State or tribal government that will act 
as grantee.
    Grant award means total of Federal and non-Federal contributions to 
complete the approved scope of work.
    Grantee means the government to which a grant is awarded and which 
is accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity 
is designated in the grant award document. Generally, the State is the 
grantee. However, an Indian tribal government may choose to be a 
grantee, or it may act as a subgrantee under the State. An Indian 
tribal government acting as a grantee will assume the responsibilities 
of a ``state'', under this subpart, for the purposes of administering 
the grant.
    Indian tribal government means any Federally recognized governing 
body of an Indian or Alaska Native tribe, band, nation, pueblo, 
village, or community that the Secretary of Interior acknowledges to 
exist as an Indian tribe under the Federally Recognized Tribe List Act 
of 1994, 25 U.S.C. 479a. This does not include Alaska Native 
corporations, the ownership of which is vested in private individuals.
    Local Mitigation Plan is the hazard mitigation plan required of a 
local or Indian tribal government acting as a subgrantee as a condition 
of receiving a project subgrant under the HMGP as outlined in 44 CFR 
201.6.
    Standard State Mitigation Plan is the hazard mitigation plan 
approved under 44 CFR part 201, as a condition of receiving Stafford 
Act assistance as outlined in Sec. 201.4.
    State Administrative Plan for the Hazard Mitigation Grant Program 
means the plan developed by the State to describe the procedures for 
administration of the HMGP.
    Subgrant means an award of financial assistance under a grant by a 
grantee to an eligible subgrantee.
    Subgrant application means the request to the grantee for HMGP 
funding by the eligible subgrantee, as outlined in Sec. 206.436.
    Subgrantee means the government or other legal entity to which a 
subgrant is awarded and which is accountable to the grantee for the use 
of the funds provided. Subgrantees can be a State agency, local 
government, private non-profit organizations, or Indian tribal 
government as outlined in Sec. 206.433.

[[Page 8853]]

Indian tribal governments acting as a subgrantee are accountable to the 
State grantee.

    4. Revise Sec. 206.432(b) to read as follows:


Sec. 206.432  Federal grant assistance.

* * * * *
    (b) Amounts of assistance. The total of Federal assistance under 
this subpart shall not exceed either 15 or 20 percent of the total 
estimated Federal assistance (excluding administrative costs) provided 
for a major disaster under 42 U.S.C. 5170b, 5172, 5173, 5174, 5177, 
5178, 5183, and 5201 as follows:
    (1) Fifteen (15) percent. Effective November 1, 2003, a State with 
an approved Standard State Mitigation Plan, which meets the 
requirements outlined in 44 CFR 201.4, shall be eligible for assistance 
under the HMGP not to exceed 15 percent of the total estimated Federal 
assistance described in this paragraph. Until that date, existing, 
approved State Mitigation Plans will be accepted.
    (2) Twenty (20) percent. A State with an approved Enhanced State 
Mitigation Plan, in effect prior to the disaster declaration, which 
meets the requirements outlined in 44 CFR 201.5 shall be eligible for 
assistance under the HMGP not to exceed 20 percent of the total 
estimated Federal assistance described in this paragraph.
    (3) The estimates of Federal assistance under this paragraph (b) 
shall be based on the Regional Director's estimate of all eligible 
costs, actual grants, and appropriate mission assignments.
* * * * *

    5. Section 206.434 is amended by redesignating paragraphs (b) 
through (g) as paragraphs (c) through (h), respectively; adding a new 
paragraph (b); revising redesignated paragraphs (c) introductory text 
and (c)(1); and revising redesignated paragraph (d) to read as follows:


Sec. 206.434  Eligibility.

* * * * *
    (b) Plan requirement. (1) For all disasters declared on or after 
November 1, 2003, local and tribal government applicants for subgrants, 
must have an approved local mitigation plan in accordance with 44 CFR 
201.6 prior to receipt of HMGP subgrant funding. Until November 1, 
2003, local mitigation plans may be developed concurrent with the 
implementation of subgrants.
    (2) Regional Directors may grant an exception to this requirement 
in extraordinary circumstances, such as in a small and impoverished 
community when justification is provided. In these cases, a plan will 
be completed within 12 months of the award of the project grant. If a 
plan is not provided within this timeframe, the project grant will be 
terminated, and any costs incurred after notice of grant's termination 
will not be reimbursed by FEMA.
    (c) Minimum project criteria. To be eligible for the Hazard 
Mitigation Grant Program, a project must:
    (1) Be in conformance with the State Mitigation Plan and Local 
Mitigation Plan approved under 44 CFR part 201;
* * * * *
    (d) Eligible activities. (1) Planning. Up to 7% of the State's HMGP 
grant may be used to develop State, tribal and/or local mitigation 
plans to meet the planning criteria outlined in 44 CFR part 201.
    (2) Types of projects. Projects may be of any nature that will 
result in protection to public or private property. Eligible projects 
include, but are not limited to:
    (i) Structural hazard control or protection projects;
    (ii) Construction activities that will result in protection from 
hazards;
    (iii) Retrofitting of facilities;
    (iv) Property acquisition or relocation, as defined in paragraph 
(e) of this section;
    (v) Development of State or local mitigation standards;
    (vi) Development of comprehensive mitigation programs with 
implementation as an essential component;
    (vii) Development or improvement of warning systems.
* * * * *
    6. Revise Sec. 206.435(a) to read as follows:


Sec. 206.435  Project identificaiton and selection criteria.

    (a) Identification. It is the State's responsibility to identify 
and select eligible hazard mitigation projects. All funded projects 
must be consistent with the State Mitigation Plan. Hazard Mitigation 
projects shall be identified and prioritized through the State, Indian 
tribal, and local planning process.
* * * * *

    7. Revise Sec. 206.436 to read as follows:


Sec. 206.436  Application procedures.

    (a) General. This section describes the procedures to be used by 
the grantee in submitting an application for HMGP funding. Under the 
HMGP, the State or Indian tribal government is the grantee and is 
responsible for processing subgrants to applicants in accordance with 
44 CFR part 13 and this part 206. Subgrantees are accountable to the 
grantee.
    (b) Governor's Authorized Representative. The Governor's Authorized 
Representative serves as the grant administrator for all funds provided 
under the Hazard Mitigation Grant Program. The Governor's Authorized 
Representative's responsibilities as they pertain to procedures 
outlined in this section include providing technical advice and 
assistance to eligible subgrantees, and ensuring that all potential 
applicants are aware of assistance available and submission of those 
documents necessary for grant award.
    (c) Hazard mitigation application. Upon identification of 
mitigation measures, the State (Governor's Authorized Representative) 
will submit its Hazard Mitigation Grant Program application to the FEMA 
Regional Director. The application will identify one or more mitigation 
measures for which funding is requested. The application must include a 
Standard Form (SF) 424, Application for Federal Assistance, SF 424D, 
Assurances for Construction Programs, if appropriate, and an narrative 
statement. The narrative statement will contain any pertinent project 
management information not included in the State's administrative plan 
for Hazard Mitigation. The narrative statement will also serve to 
identify the specific mitigation measures for which funding is 
requested. Information required for each mitigation measure shall 
include the following:
    (1) Name of the subgrantee, if any;
    (2) State or local contact for the measure;
    (3) Location of the project;
    (4) Description of the measure;
    (5) Cost estimate for the measure;
    (6) Analysis of the measure's cost-effectiveness and substantial 
risk reduction, consistent with Sec. 206.434(c);
    (7) Work schedule;
    (8) Justification for selection;
    (9) Alternatives considered;
    (10) Environmental information consistent with 44 CFR part 9, 
Floodplain Management and Protection of Wetlands, and 44 CFR part 10, 
Environmental Considerations.
    (d) Application submission time limit. The State's application may 
be amended as the State identifies and selects local project 
applications to be funded. The State must submit all local HMGP 
applications and funding requests for the purpose of identifying new 
projects to the Regional Director within 12 months of the date of 
disaster declaration.
    (e) Extensions. The State may request the Regional Director to 
extend the application time limit by 30 to 90 day

[[Page 8854]]

increments, not to exceed a total of 180 days. The grantee must include 
a justification in its request.
    (f) FEMA approval. The application and supplement(s) will be 
submitted to the FEMA Regional Director for approval. FEMA has final 
approval authority for funding of all projects.
    (g) Indian tribal grantees. Indian tribal governments may submit a 
SF 424 directly to the Regional Director.

Subpart H--Public Assistance Eligibility

* * * * *

    8. Revise Sec. 206.220 to read as follows:


Sec. 206.220  General.

    This subpart provides policies and procedures for determinations of 
eligibility of applicants for public assistance, eligibility of work, 
and eligibility of costs for assistance under sections 402, 403, 406, 
407, 418, 419, 421(d), 502, and 503 of the Stafford Act. Assistance 
under this subpart must also conform to requirements of 44 CFR part 
201, Mitigation Planning, and 44 CFR part 206, subparts G--Public 
Assistance Project Administration, I--Public Assistance Insurance 
Requirements, J--Coastal Barrier Resources Act, and M--Minimum 
Standards. Regulations under 44 CFR part 9--Floodplain Management and 
44 CFR part 10--Environmental Considerations, also apply to this 
assistance.
    9. Section 206.226 is amended by redesignating paragraphs
    (b) through (j) as paragraphs (c) through (k), respectively; adding 
a new paragraph (b); and revising redesignated paragraph (g)(5) to read 
as follows:


Sec. 206.226  Restoration of damaged facilities.

* * * * *
    (b) Mitigation planning. In order to receive assistance under this 
section, as of November 1, 2003, the State must have in place a FEMA 
approved State Mitigation Plan in accordance with 44 CFR part 201.
* * * * *
    (g) * * *
    (5) If relocation of a facility is not feasible or cost effective, 
the Regional Director shall disapprove Federal funding for the original 
location when he/she determines in accordance with 44 CFR parts 9, 10, 
201, or subpart M of this part 206, that restoration in the original 
location is not allowed. In such cases, an alternative project may be 
applied for.
* * * * *

    Dated: February 19, 2002.
Michael D. Brown,
General Counsel.
[FR Doc. 02-4321 Filed 2-25-02; 8:45 am]
BILLING CODE 6718-05-P