[Federal Register Volume 72, Number 210 (Wednesday, October 31, 2007)]
[Rules and Regulations]
[Pages 61720-61750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21265]



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Part II





Department of Homeland Security





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Federal Emergency Management Agency



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44 CFR Parts 59, 61, 78, et al.



Flood Mitigation Grants and Hazard Mitigation Planning; Interim Rule

  Federal Register / Vol. 72 , No. 210 / Wednesday, October 31, 2007 / 
Rules and Regulations  

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Parts 59, 61, 78, 79, 80, 201, and 206

[Docket ID FEMA-2006-0010]
RIN 1660-AA36


Flood Mitigation Grants and Hazard Mitigation Planning

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Interim rule.

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SUMMARY: This interim rule implements certain provisions of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 to 
provide new incentives for States and communities to mitigate the 
effects of flood damage to severe repetitive loss properties by 
creating the Severe Repetitive Loss program (SRL), and through reduced 
cost-share requirements in the existing Flood Mitigation Assistance 
program (FMA). In addition, the rule ensures that the FMA planning 
requirements are consistent with other applicable regulations, and 
streamlines the planning requirements for Indian tribal governments. It 
also describes requirements for the acquisition of property for open 
space with mitigation funds, including under SRL and FMA. Finally, this 
interim rule makes technical changes to clarify current practices and 
implements conforming amendments to reflect current authorities, 
including the recent change to the standard amount of authorized Hazard 
Mitigation Grant Program assistance.

DATES: Effective Date: December 3, 2007.
    Comment Date: Comments on the rule including the new Paperwork 
Reduction Act collections are due on or before December 31, 2007.
    Applicability Date: Part 78 will continue to apply to the 
administration of funds awarded for which the application period opened 
prior to December 3, 2007. Parts 79 and 80 will apply to the 
administration of funds awarded for which the application period opens 
on or after December 3, 2007, except that Sec.  80.19 will apply as of 
December 3, 2007 regardless of the original project date.

ADDRESSES: You may submit comments, identified by Docket ID FEMA-2006-
0010, by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: [email protected]. Include Docket ID FEMA-2006-0010 in the 
subject line of the message.
    Fax: 866-466-5370.
    Mail/Hand Delivery/Courier: Rules Docket Clerk, Office of Chief 
Counsel, Federal Emergency Management Agency, Room 835, 500 C Street, 
SW., Washington, DC 20472.

FOR FURTHER INFORMATION CONTACT: Cecelia Rosenberg, Mitigation 
Directorate, Federal Emergency Management Agency, 500 C Street, SW., 
Washington DC 20472, (phone) 202-646-3321, (facsimile) 202-646-2719, or 
(e-mail) [email protected].

SUPPLEMENTARY INFORMATION:

Request for Comments

    FEMA encourages public participation in this rulemaking. Comments 
will be most helpful if they state a particular section (or sections) 
of the rule, and offer specific proposals for change, as needed. All 
submissions received must include the agency name and docket ID (FEMA-
2006-0010). Regardless of the method used for submitting comments or 
material, all submissions will be posted, without change, to the 
Federal eRulemaking Portal at http://www.regulations.gov, and will 
include any personal information you provide. Therefore, submitting 
this information makes it public. You may wish to read the Privacy Act 
notice that is available on the Privacy and Use Notice link on the 
Administration Navigation Bar of www.regulations.gov.
    All comments received, as well as this document are available on 
the public docket for this rulemaking. For access to the docket, go to 
the Federal eRulemaking Portal at http://www.regulations.gov. Submitted 
comments may also be inspected at FEMA, Office of Chief Counsel, Room 
835, 500 C Street, SW., Washington, DC 20472.
    At this time, FEMA does not anticipate it will hold a public 
meeting for this rulemaking project.

Table of Abbreviations

BC--Benefit Cost
BCA--Benefit Cost Analysis
CAP-SSE--Community Assistance Program-State Support Services Element
CRS--Community Rating System
DHS--Department of Homeland Security
FEMA--Federal Emergency Management Agency
FIRM--Flood Insurance Rate Map
FIS--Flood Insurance Study
FMA--Flood Mitigation Assistance
HMGP--Hazard Mitigation Grant Program
ICC--Increased Cost of Compliance
NEPA--National Environmental Policy Act of 1969
NFIA--National Flood Insurance Act of 1968
NFIF--National Flood Insurance Fund
NFIP--National Flood Insurance Program
OMB--Office of Management and Budget
PDM--Pre-disaster Mitigation
POC--Point of Contact
PRA--Paperwork Reduction Act of 1995
RFC--Repetitive Flood Claims
SHMO--State Hazard Mitigation Officer
SQA Net--Simple and Quick Access Net
SRL--Severe Repetitive Loss
USACE--United States Army Corps of Engineers

I. Background

    This rule implements provisions of the Bunning-Bereuter-Blumenauer 
Flood Insurance Reform Act of 2004 (the Act), Public Law 108-264, 118 
Stat. 714, found at 42 U.S.C. 4102a. The Act amends the National Flood 
Insurance Act of 1968 to provide new programs and incentives for States 
and communities to mitigate flood damage to severe repetitive loss 
properties. Severe repetitive loss properties are residential 
properties covered under a contract for flood insurance that have 
incurred flood-related damage (i) for which 4 or more separate claims 
payments have been made under flood insurance coverage, with the amount 
of each such claim exceeding $5,000, and with the cumulative amount 
exceeding $20,000; or (ii) for which at least 2 separate claims 
payments have been made under such coverage, with the cumulative amount 
exceeding the value of the property. Pursuant to the Act, this interim 
rule implements the new Severe Repetitive Loss (SRL) program, which is 
authorized by the Act until September 30, 2009, and amends the existing 
Flood Mitigation Assistance (FMA) program to meet the requirements of 
the Act. In addition, FEMA is modifying the mitigation planning 
regulations to minimize the burden on State, local, and Indian tribal 
governments, to streamline the planning process, and to ensure 
consistency in the local planning requirements that apply to all FEMA 
mitigation programs, including the SRL and FMA programs.
    Also, effective October 4, 2006, section 684 of the Post-Katrina 
Emergency Management Reform Act of 2006, Public Law 109-295, amended 
the amount of Hazard Mitigation Grant Program (HMGP) assistance 
authorized for States with an approved Standard State Mitigation Plan 
from 7.5 percent to 15 percent of the total estimated Federal 
assistance (excluding administrative costs) provided for a major 
disaster under FEMA Public and Individual Assistance programs for 
amounts spent up to $2 billion, and established a sliding scale for 
HMGP assistance, based on the amount of the total estimated

[[Page 61721]]

Federal assistance. This interim rule amends FEMA's regulations to 
reflect this statutory change.

II. Discussion of Interim Rule

    The SRL grant program was created pursuant to Section 1361A of the 
National Flood Insurance Act of 1968 (NFIA, or ``the Act''), 42 U.S.C. 
4030, as amended by the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004, Public Law 108-264, with the goal of reducing flood 
damages to SRL properties. The long-term goal of the SRL program is to 
reduce or eliminate claims under the NFIP through project activities 
that will result in the greatest savings to the NFIF in the shortest 
period of time.
    The new program, the SRL program, is authorized through September 
30, 2009 and is designed to provide mitigation assistance to address 
properties that have experienced repetitive flood losses and that are 
insured under the NFIP. The SRL program focuses on a subset of all 
repetitive flood loss properties: Those residential properties with a 
high frequency of losses or a high value of claims. The mitigation of 
losses sustained by these properties, through projects such as buyouts, 
elevation, relocation, or floodproofing, will produce savings for 
policyholders under the NFIP and for Federal taxpayers through reduced 
flood insurance losses and reduced Federal disaster assistance. The 
program relies on a strategy of making mitigation offers to these 
severe repetitive loss property owners and shifting more of the burden 
of recovery costs to those property owners who decline the offer of 
mitigation assistance, and choose to remain vulnerable to repetitive 
flood damage, by incrementally increasing their rates for flood 
insurance. As established by Congress, the sale of flood insurance 
under the NFIP is subject to the rules and regulations of FEMA. FEMA 
has elected to have State-licensed insurance companies' agents and 
brokers sell flood insurance to consumers. Those whose rates are 
increased will be eligible to appeal this increase via an independent 
third party from a list based on professional qualifications 
impartially developed by FEMA's Alternative Dispute Resolution (ADR) 
office. To reduce costs, the property owner may request that the 
Administrator substitute a reviewer from FEMA's ADR office for the 
independent third party.
    With respect to grant programs, FEMA has actively engaged in flood 
mitigation through its HMGP, FMA, PDM and Repetitive Flood Claims (RFC) 
programs. Each of these programs was created under different 
legislative authorities, and as a result, have varied impacts on 
reducing the nation's inventory of the most floodprone structures. What 
has not existed is a program that specifically addresses and provides 
funds for the elimination of, or reduction of risk to, the subset of 
those properties that create the largest impact on claims paid from the 
NFIF. Most of these properties existed before the inception of the NFIP 
and its associated floodplain management standards, and are thus 
eligible for discounted insurance rates. Furthermore, none of these 
other programs feature a formal mitigation offer process whereby 
insurance rates may be increased if the property owner declines the 
offer.
    FEMA intends to focus the SRL program in communities and on 
property owners who choose to participate in the program. This will 
maximize the benefits of the program, while minimizing adverse impacts 
on communities and property owners. The program will provide an 
opportunity for many property owners to address recurring flooding 
problems, and reduce the impact of these events.
    The legislation also provides an incentive to mitigate damage to 
severe repetitive loss properties through reduced non-Federal cost-
share requirements for the SRL and FMA programs (from 25 percent to 10 
percent) for projects in States with approved State Mitigation Plans 
that meet the additional repetitive loss requirements. The reduced cost 
share would be available only for projects that address severe 
repetitive loss properties.
    While the SRL and FMA programs will be implemented as separate 
programs, with different funding accounts, they are similar in their 
goals and purpose. FEMA has included both of these programs in one 
implementing regulation to ensure as much consistency as reasonable 
between the programs and to limit the confusion around program 
implementation, since both programs will likely be managed by the same 
State agency staff.
    The final rule implementing the FMA program is published elsewhere 
in today's Federal Register. (It follows an interim rule published 
March 20, 1997 at 62 FR 13346.) See 44 CFR part 78. This part will 
continue to be used to implement the FMA program for all grants awarded 
for which the application period opened prior to December 3, 2007.
    This new interim rule creates a new part (part 79, with details 
specific to acquisition projects at a new part 80), that restates the 
requirements for the existing FMA program in a format more consistent 
with the approach to all of FEMA's mitigation grant programs. Part 79 
will implement the FMA program for all grants awarded for which the 
application period opens on or after December 3, 2007.
    Part 79 also implements a change to the cost share available to 
States under the FMA program if their approved mitigation plan meets 
certain criteria, described herein in Sec.  201.4. States would be 
eligible for a reduced cost share if their mitigation plan addresses 
actions related to reducing the risk to repetitive loss properties that 
they have already taken, and those actions that they intend to take.
    The requirements for the new SRL program are incorporated into this 
rule. In addition, this interim rule brings the FMA program regulations 
into conformance with current policies, and ensures better conformance 
to existing grants management requirements. In authorizing the SRL 
program in section 102 of the Act, and amending the FMA program in 
section 103 of the Act, Congress directed FEMA to ``provide assistance 
for properties in the order that will result in the greatest amount of 
savings to the National Flood Insurance Fund in the shortest period of 
time'' and to provide assistance for activities that are ``in the best 
interest of the National Flood Insurance Fund.'' FEMA has concluded 
that Congress' stated goals for the two programs are similar. 
Therefore, there is no substantial difference in how FEMA will 
determine the funding priority for the two programs.
    As an additional aspect of implementing these programs, this rule 
includes a new part (part 80) which describes the requirements and 
procedures for open space property acquisition which applies to the SRL 
and FMA programs, as well as all FEMA hazard mitigation assistance 
programs. In light of the Act's requirements regarding property 
acquisition, FEMA determined that a central reference point for all 
mitigation grant program property acquisitions would make the programs 
more consistent overall and easier to implement.
    Elsewhere in today's Federal Register, FEMA published a final rule 
implementing section 322 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (Stafford Act), 42 U.S.C. 5165. (It follows an 
interim rule published February 26, 2002 at 67 FR 8844.) The final rule 
identified the requirements for State, Tribal, and local mitigation 
plans. This new interim rule streamlines the mitigation planning 
requirements contained in that rule by making the

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FMA planning requirements, currently implemented in a separate part of 
the regulation at Sec.  78.5, consistent with the mitigation planning 
requirements outlined in part 201. This will ensure that local 
governments can comply with one set of mitigation planning requirements 
in order to be eligible to apply for all FEMA mitigation project grant 
funding, including the FMA and SRL programs.
    In addition, this interim rule streamlines the roles and 
responsibilities of Indian tribal governments in mitigation planning. 
In the preexisting regulations, Indian tribal governments were given 
the option of preparing either a State-level Mitigation Plan, or a 
Local-level Mitigation Plan, depending on whether or not they intended 
to apply directly to FEMA as a grantee or whether they would apply 
through the State as a subgrantee. FEMA has found, however, that 
neither of these options has sufficiently met the needs of the Indian 
tribal governments.
    To address this problem, this interim rule establishes a specific 
planning requirement for Indian tribal governments that recognizes some 
of the unique aspects of these governments. The rule establishes Tribal 
Mitigation Plans for plans prepared and approved after December 3, 
2007. The rule provides that plans prepared and approved under the 
preexisting rule, under either the State or local requirements, would 
also be recognized as Tribal Mitigation Plans. These older plans, 
however, would be required to meet the revised criteria when the 
original approval expires. Most Indian tribal governments fit the local 
planning model, in that they do not have sub-jurisdictions as States 
do; however, if they are grantees, the rule would require that they 
provide the capability assessment and identification of funding options 
that are listed in the State plan requirements. This rule combines the 
appropriate aspects of these planning requirements into one section, 
with a single plan required for Indian tribal governments.
    This rule also implements section 106 of the Act, which modifies 
the insurance rates for property leased from the Federal government 
``located on the river-facing side of any dike, levee, or other 
riverine flood control structure, or seaward of any seawall or other 
coastal flood control structure.'' These properties will be charged the 
full actuarial insurance premium rates.
    Finally, this rule makes conforming amendments, as well as 
technical corrections to clarify current authorities and practices. 
This rule thus makes revisions to the amount of assistance available to 
States under the Hazard Mitigation Grant Program in Sec.  79.4 as a 
result of changes made to the Stafford Act in the Post-Katrina 
Emergency Management Reform Act passed in October 2006.

III. Solicitation of Public Comments

    Section 102 of the Act required FEMA, within 90 days of the Act, to 
consult with State and local officials in carrying out the development 
of procedures for the distribution of funds to States and communities 
to carry out eligible mitigation activities. To meet this requirement, 
FEMA published a Federal Register notice on September 15, 2004, at 69 
FR 55642, to initiate consultation with State and local officials, as 
well as members of the public. In the notice, FEMA solicited responses 
to the following questions: What key factors FEMA should consider in 
developing the SRL program; the parameters that FEMA should use to 
define severe repetitive loss for multifamily structures; the process 
FEMA should use to notify property owners that their property is 
considered a severe repetitive loss property by virtue of the 
legislative definition; the criteria FEMA should use to allocate funds 
to States, including whether or not there should be caps on the funding 
as is the case under the FMA program; the criteria that should be used 
to approve State mitigation plans to take advantage of the increased 
Federal cost share; the criteria FEMA should use to determine projects 
that will result in the greatest amount of savings to the National 
Flood Insurance Fund (NFIF); and, what types of assistance should FEMA 
provide to States and communities when making offers to owners of SRL 
properties. Interested parties initially had until November 30, 2004, 
to submit written comments in response to these questions. FEMA 
extended the deadline for comments until December 7, 2004. FEMA 
received 26 written comments. Eight of those comments were received 
from States, ten from communities and eight were from associations. On 
November 17, 2004, as part of the consultation process, FEMA held a 
meeting in Washington DC with representative officials of State and 
local governments, organizations representing emergency management, 
floodplain management, and insurance professions, and other interested 
parties.
    FEMA reviewed and considered all oral and written responses as FEMA 
developed the SRL grant program and this interim rule. FEMA's 
questions, the public comments, and FEMA's responses to the public 
comments are listed below.

Question 1: What key factors should FEMA consider in developing the 
Pilot Program for Severe Repetitive Loss Properties under section 
1361A?

    Multiple commenters stated that the program should be administered 
by the States, similar to existing FEMA mitigation grant programs, 
including FMA and Pre-Disaster Mitigation (PDM). However, once 
commenter wrote that the existing programs take too long to implement.
    Multiple commenters stated that funding allocations should be 
disbursed based on the location of SRL properties (those with the 
greatest drain, greatest losses, most number of SRL properties, etc.), 
rather than disbursing funds evenly among States. Multiple comments 
indicated that the ranking of properties should ensure that those 
properties with the most loss claims should be addressed first. 
Multiple commenters stated that allocations should also consider the 
State and/or community capability, defined as having plans in place, 
past performance shown to mitigate repetitive loss properties, projects 
lined-up, and/or matching funds available. Multiple comments also 
indicated that funds should be prioritized to those communities with 
experience managing FEMA funds and/or with matching funds and projects 
lined-up. Multiple commenters indicated that reallocations should occur 
quickly to move funds to communities that need them.
    A considerable number of commenters stated that the data used for 
determining those properties that meet the SRL property definition was 
not accurate and needed to be updated/corrected, and that real-time 
claim reporting was needed.
    Multiple commenters stated that the parameters for demolition 
rebuild projects need to be clarified. Multiple commenters stated that 
property owners, communities, and States must be able to determine the 
most appropriate mitigation measures.
    Multiple commenters stated that there needs to be clear definitions 
for ``notices'' and ``offers,'' and that both need to include clear 
details of the appeals process and insurance implications. Further, 
multiple commenters stated that there needs to be a clear description 
of the property value in an offer.
    Multiple commenters stated that FEMA would need additional staff 
with National Flood Insurance Program (NFIP) expertise to manage the 
program.

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    Multiple commenters stated that the Increased Cost of Compliance 
(ICC) should be made available for match, or indicated that many 
communities would not be able to provide the cost share.
    Multiple commenters indicated that the program should focus on cost 
effectiveness, and Benefit/Cost analysis in particular.
    Multiple commenters indicated that the planning requirement should 
be clearly defined, and multiple commenters suggested a plan be 
required to prioritize funding.
    Multiple commenters requested that a streamlined, simple, or 
tailored application and grants management process be implemented; and 
that guidance needs to be clear regarding the roles and 
responsibilities of FEMA, States and communities.
    Multiple commenters stated that mitigation funds should be directed 
to only those covered under an NFIP policy. Multiple respondents 
indicated that insurance policy writers needed education and awareness/
outreach, both to understand the program and the ICC benefits.
FEMA's Response
    In response to comments regarding administration of the program by 
the States, the new Part 79 added in this rulemaking deals with the 
States' program administration responsibilities, which are being 
designed similar to the way FEMA's other mitigation grant programs 
operate. In response to comments regarding the accuracy of data used to 
identify SRL properties, insurance and claims information for 
properties validated as meeting the legislative characteristics of SRL 
are now available to States on a web-based site (SQA Net), which is 
updated monthly. Furthermore, regulations and program procedures 
clearly describe the notice, offer, and appeals processes. Program 
procedures have been developed to define the parameters and limitations 
imposed for the demolition/rebuild activity type. State, local and 
tribal mitigation plans will be required and are described in this 
interim rule; allocation of funds will be based on the number of SRL 
properties within each State, in accordance with the authorizing 
legislation; it is also described in this interim rule. Awards shall be 
prioritized in order of the greatest savings to the National Flood 
Insurance Fund, by virtue of the Benefit Cost Ratio.
    With respect to concerns over the accuracy of claims data, FEMA has 
continually worked to update the claims information data to increase 
accuracy, including field verification of property information when 
necessary. Furthermore, property owners can discuss errors in their 
claim history with NFIP representatives. As described under the 
response to Question 3, a property owner is given a toll-free number to 
call if they have questions about their designation as an SRL property.
    With respect to concerns regarding the details of receiving a 
mitigation offer, particularly for an acquisition, FEMA has developed 
an offer letter that will contain information regarding the mitigation 
project type; the amount of the purchase offer, including the basis and 
methodology for calculating the purchase offer, and the final offer 
amount that reflects applicable deductions; notification that 
participation in the SRL program is voluntary; the amount of time the 
property owner has to accept or reject the offer; the right of the 
property owner to appeal the increase in flood insurance rates if they 
refuse the offer; a summary of the consultation process, and other 
pertinent information.
    In response to the comment that funds should only be directed to 
those covered under a NFIP policy, the definition of a SRL property 
includes the requirement that the property is covered by a NFIP policy.
    ICC coverage under the Standard Flood Insurance Policy (SFIP) 
provides for the payment of a claim to help pay for the cost to comply 
with State or community floodplain management laws or ordinances from a 
flood event in which a building has been declared substantially damaged 
or repetitively damaged. When an insured building is damaged by a flood 
and the State or community declares the building to be substantially or 
repetitively damaged, ICC coverage will help pay for the cost to 
elevate, floodproof, demolish, or relocate the building up to a maximum 
benefit of $30,000. This coverage is in addition to the building 
coverage for the repair of actual physical damages from flood under the 
SFIP. ICC claims payments from previous flood events may be used to 
meet the non-Federal cost share requirements, as long as the period for 
making such a claim remains open.

Question 2: What parameters should FEMA use to define severe repetitive 
loss for multifamily structures consisting of 5 or more residences?

    Multiple commenters stated that the multifamily properties 
definition should be the same as the single-family properties 
definition. However, several alternative options to define multifamily 
properties were suggested including:
     The ratio of cumulative loss versus replacement cost;
     The determination of substantial damage for a structure;
     A proportionate definition based on the number of units; 
or
     Five or more residences covered under a single contract 
for flood insurance that have had 4 or more claims, each exceeding 6.25 
percent of the replacement value of the structure, with cumulative 
payments exceeding 25 percent of the replacement value. Parameters to 
consider included total damages, number of losses, dollar loss per 
claim, and low-rise versus high-rise structures.
    Multiple commenters agreed that at least 2 claims payments that 
cumulatively exceed the replacement value of the structure (as stated 
in Section 1361A(b)(2) of the Act) should apply to single family as 
well as multifamily properties.
    Multiple commenters indicated that multifamily properties should 
follow single-family properties as the priority for mitigation funding.
    Multiple commenters indicated that Benefit Cost Analysis data 
applied to multifamily projects consider more than building damages, 
but also content damages, in order to make multifamily projects cost-
effective.
FEMA's Response
    FEMA evaluated two options in selecting the definition of 
``multifamily property'' for the purposes of this interim final rule. 
The first option was keeping the same claims thresholds as defined in 
the Act for single family properties. The second option FEMA evaluated 
was defining ``multifamily property'' as reflecting the increased 
property values and number of units typically associated with 
multifamily properties. FEMA analyzed claim information for multifamily 
properties and determined that a claim history including four separate 
claims of $25,000 with the cumulative amount of such payments exceeding 
$100,000 or having at least two separate claims payments with the 
cumulative amount of such claims exceeding the value of the property 
would be reasonable criteria to select for the meaning of the term 
``severe repetitive loss'' for multifamilty properties.
    Based on evaluating options, FEMA determined that selecting the 
first option allowed properties for which a relatively inexpensive 
mitigation solution may be available (such as elevating HVAC equipment 
or eliminating finished enclosures below

[[Page 61724]]

elevated floors) to be eligible for SRL program funds. These minimal 
mitigation steps may also lead to a diminished need for disaster 
housing as well. This definition was chosen because it allows for the 
maximum number of multifamily residences to be eligible for funding 
consideration under the SRL program by virtue of meeting the definition 
of an SRL property.
    Thus, ``multifamily property'' is defined in part 79 as ``a 
property consisting of five or more residences''. Furthermore, the 
definition of ``Severe Repetitive Loss'' as defined in part 79 of this 
interim rule uses the same parameters for multifamily properties as for 
single family.

Question 3: What process should FEMA use to notify property owners that 
their property is considered a severe repetitive loss property as 
defined by the statute?

    A considerable number of commenters stated that notices to property 
owners needed to be coordinated with, sent concurrently to, or shared 
with State, Tribal and local communities. A considerable number of 
respondents stated that FEMA should be responsible for notifying 
property owners, and multiple commenters indicated that this notice 
should be in writing, either through certified or registered mail.
    A considerable number of respondents stated that the notice needed 
to include clear, non-legal, plain English language that described the 
notice, the program, the determination, the process, appeals, etc. 
Multiple commenters suggested a standard form or one-page document 
explaining the program. Furthermore, multiple responses wrote that the 
notice be provided with the property owner's insurance policy renewal 
to link the program to insurance coverage. Multiple commenters stated 
that disclosure in property records, and real estate transactions 
needed to be enforced.
FEMA's Response
    FEMA's Special Direct Facility (SDF) is operated by the NFIP's 
Servicing Agent. It has been in existence since 2000, when FEMA 
determined it needed to manage more closely the loss adjustments to the 
subset of repetitive loss properties that had the highest number of 
losses. For the same reasons, property owners whose claims history 
meets the SRL criteria have been receiving letters approximately 150 
days before their policy is renewed that identify their properties as 
SRL properties. In addition to managing loss adjustments, the SDF will 
manage the increase in premiums should the property owner decline an 
offer of mitigation. The letters also explain that their flood 
insurance policy will be transferred to FEMA's Special Direct Facility 
(if the policy is not already being serviced there). These letters are 
also sent to the property owner's flood insurance agent, and to their 
mortgage lender. This letter provides a toll-free number that the 
property owner can call if they have questions about their designation 
as an SRL property, or any other questions about the transfer of their 
policy.

Question 4: What criteria should FEMA consider when allocating funds to 
States and/or communities under the Pilot Program? Should FEMA consider 
base allocations for States with higher numbers of severe repetitive 
loss properties?

    Multiple commenters stated that funds should target those 
properties with the most losses to the NFIF, therefore targeting the 
most egregious properties regardless of location. A considerable number 
of commenters indicated that allocations should be based on the total 
number of SRL properties per State. Finally, multiple commenters 
indicated that base allocations for those States with high numbers of 
SRL properties should be considered.
    Multiple commenters stated that any allocation should provide 
enough to cover the cost of at least 1 project or some acceptable 
number of properties, and multiple responses stated that allocations 
should consider variations in costs to mitigate.
    Commenters wrote that additional considerations for allocation 
included capability factors, such as project readiness, leveraged local 
investment, past mitigation grant performance, NFIP compliance, and 
Community Rating System (CRS) ratings. Multiple commenters suggested 
FEMA base allocations on approved mitigation plans.
    Commenters suggested several alternative bases for allocations, 
including: Insured values or market values, or values based on value of 
future losses.
FEMA's Response
    Subpart 79.4 of this interim rule provides for allocations to be 
based upon the percentage of the total number of SRL properties located 
within each State, as per the authorizing legislation, Flood Insurance 
Reform Act of 2004, Public Law 108-264. States with little or no 
allocation will be able to apply for 10 percent of the total funds 
appropriated in any fiscal year, provided that the State or Tribal 
applicant has at least 1 SRL property. State allocations will be large 
enough to permit the implementation of at least 1 project.
    FEMA considered several options in evaluating how to administer 
allocations based on the percentage of the total number of SRL 
properties located within each State, as per the authorizing 
legislation, Flood Insurance Reform Act of 2004, Public Law 108-264. 
States with little or no funding allocation will be able to apply for 
10 percent of the total funds made available under SRL in any fiscal 
year, provided that the State or Tribal applicant has at least one SRL 
property. The options evaluated and not accepted included small 
allocations to all States; larger allocations to a limited number of 
States with numerous SRL properties; and a variety of allocation 
scenarios for States with a limited number of SRL properties.
    Ultimately FEMA decided on an allocation that could be adjusted 
annually based on the number of SRL properties in a particular State. 
FEMA would evaluate the point at which it is more beneficial for a 
State to compete for the 10 percent set-aside than to receive an 
allocation that was insufficient. This allocation approach provided the 
necessary funds to accomplish mitigation projects. The average flood 
mitigation project funded under FEMA's mitigation programs is 
approximately $70,000-$100,000.
    The legislation also required a 10 percent set-aside of the grant 
funds for States receiving little or no allocation. FEMA determined 
that ``little or no allocation'' meant the point at which it was more 
beneficial for a State to compete for appropriate funds to accomplish 
mitigation activities than to receive a small allocation, or one which 
is below the $70,000-$100,000 average mitigation project cost. The 
allocation option that FEMA selected is a reasonable approach to both 
allocations and the 10 percent set-aside.

Question 5: Should there be caps on Pilot Program funding for States 
and communities similar to Flood Mitigation Assistance program funds? 
If so, how would the cap amounts be determined?

    The overwhelming response was there should be no caps on funding.
    Multiple commenters requested FEMA remove the caps on funding 
currently implemented under the FMA program as well.

[[Page 61725]]

FEMA's Response
    At the commenters' request, FEMA has not imposed any funding caps 
within the SRL program. FMA caps are not changed by this rule, since 
they are statutorily based.

Question 6: What criteria should FEMA use to review and approve State 
mitigation plans consistent with 44 CFR part 201 to ensure that they 
contain recommended actions to mitigate severe repetitive loss 
properties?

    Multiple commenters indicated that FEMA should be as flexible as 
possible in the criteria used to review and approve plans, including 
simple goals and strategies that acknowledge properties at risk.
    Multiple commenters indicated that mitigation is local, and 
therefore States should not be held accountable for local strategies. 
Multiple commenters suggested that existing State or local plans should 
be accepted, particularly given the limited timeframe of authority for 
the Pilot program.
    Suggestions, if a plan is required, included providing for 
amendments to existing plans and approving projects while the 
amendments are being reviewed. Multiple commenters suggested that 
criteria to be reviewed focus on capability factors such as plan 
implementation, past performance and effort, not the number of severe 
repetitive loss properties mitigated. Multiple commenters were 
concerned that the lack of accuracy in the repetitive loss database may 
affect their ability to meet the planning requirements related to 
severe repetitive loss property mitigation. Discrepancies in claims 
information and property values as shown in the repetitive loss 
database may result in not showing certain properties as being SRL 
properties, yet those properties may in fact have been mitigated, 
``counting'' towards a SRL property mitigated. Similarly, database 
discrepancies may show a property as being SRL, when in fact it may not 
be. Therefore, if the property has not been mitigated, it may count 
``against'' the state's efforts to indicate mitigation of SRL 
properties in their state plan.
    Several commenters stated that disclosure of offer and insurance 
information needed to be a part of the property's permanent record, and 
information needs to be conveyed to the existing and new homeowners 
regarding the mitigation offer. Finally, multiple commenters indicated 
that there were too many ``lists'' between repetitive loss and severe 
repetitive loss.
FEMA's Response
    In this interim rule, FEMA requires states to have an approved 
State Mitigation Plan meeting the requirements of Sec. Sec.  201.4 or 
201.5 to qualify for the reduced non-federal cost share. The plan must 
satisfy all standard requirements but also identify specific actions 
the state has taken to reduce the number of repetitive loss properties; 
specify how the state intends to reduce the number of such properties; 
and describe the state's strategy to ensure that local jurisdictions 
with SRL properties take actions to reduce the number of these 
properties, including the development of local mitigation plans. 
Amendments to currently approved State plans will be acceptable. 
However, at the time of the next required plan update, the amendment 
must be incorporated into the plan and adopted as part of the plan. 
Until such time as the amendment is approved by FEMA, grants could be 
awarded; but the lower non-Federal cost share would not be available 
until the amendment is approved. While State and local plans must 
contain different types of data, the two types of planning efforts must 
be linked via common mitigation goals and objectives.
    With respect to the number of repetitive loss lists, FEMA has made 
available a separate list of SRL properties on SQA Net, which is 
available to State NFIP Coordinators and State Hazard Mitigation 
Officers via FEMA Regional Offices. SQA Net is a secure web portal that 
enables access of data from the NFIP flood insurance database. Data is 
updated monthly. In pursuing a repetitive loss strategy, FEMA developed 
a definition of repetitive loss structures, and maintained a list of 
those structures. A target repetitive loss list was also developed, 
which consisted of a subset of the list of repetitive loss properties 
that had the highest number of losses. FEMA does not consider these 
lists to be excessive, and finds that each serves a valuable purpose.

Question 7: What criteria should FEMA use to make the determination 
that a State has taken actions to reduce the number of severe 
repetitive loss properties in its communities?

    Commenters characterized criteria in terms of qualitative and 
quantitative criteria, as well as procedures for developing and 
reviewing plans.
    Qualitative factors suggested include the effort (that is, the 
number of offers made or the most egregious properties approached, but 
not necessarily accepted or mitigated); documentation that any actions 
were taken; partnerships with other programs and funding sources; level 
of outreach; and strength of the Community Assistance Program-State 
Support Services Element (CAP-SSSE). This program provides funding to 
States to provide technical assistance to communities in the National 
Flood Insurance Program (NFIP) and to evaluate community performance in 
implementing NFIP floodplain management activities. Quantitative 
factors proposed include number of properties mitigated, higher 
regulatory standards, number of Community Rating System (CRS) 
communities, number of repetitive loss properties, other programs in 
place, a plan in place, prioritization of properties, leveraging of 
matching funds, and others.
    Multiple commenters stated that States with approved mitigation 
plans in place should not have to submit new plans or ``prove'' that 
actions have been taken. Conversely, multiple commenters suggested that 
States submit a report or other documentation each year to show actions 
taken.
 FEMA's Response
    Section Sec.  201.5(c)(3)(v) of this interim rule addresses the 
State mitigation planning requirements for meeting this provision. The 
regulation requires documentation of actions already taken that 
specifically focused on SRL properties. Because the mitigation measures 
for each State and community could vary widely depending on the factual 
circumstances of each state and community, FEMA opted not to set fixed 
criteria.
    With respect to submitting plans and updates, since most States 
already have approved mitigation plans, they may only need to make 
limited revisions or clarifications to the plan that focus on this 
subset of properties. The entire plan will not need to be resubmitted, 
only the amendment that pertains to the SRL mitigation actions. 
Finally, at a minimum, states are required to review and update their 
mitigation plans every 3 years. Although they may opt to submit 
revisions annually, showing the mitigation actions taken, FEMA believed 
an annual requirement to be overly burdensome.

Question 8: What criteria should FEMA use to determine projects that 
will result in the greatest amount of savings to the National Flood 
Insurance Fund? How should the criteria relate to current FEMA 
procedures for determining cost effectiveness?

    A considerable number of commenters stated that Benefit Cost

[[Page 61726]]

Analysis (BCA) should be used to determine the greatest amount of 
savings to the NFIF. Multiple commenters indicated that the benefit 
cost analysis should be waived for all SRL properties or for those with 
2 or more claims that cumulatively exceed the property value. 
Additional suggestions for the use of benefit cost methodologies 
included providing clear guidance, a request that it be simple to use, 
and that it allow FEMA and applicants to consider all factors, not just 
damages. Commenters provided alternative criteria for ranking 
properties such as: claims paid; claims relative to property values; 
greatest cost savings to insured properties mitigated; or cost 
effectiveness based on insurance premium costs.
    Multiple commenters expressed that the term ``property value'' 
needed to be defined clearly, whether based on appraisal value, 
replacements value, insured value, or fair market value.
FEMA's Response
    All projects for which FEMA provides funding must be cost 
effective. For the purpose of determining the amount of savings to the 
NFIF as a result of the project, FEMA agreed with the commenters and 
used a Benefit Cost Ratio. In this rule, FEMA determines an SRL 
property by the cumulative amount of claims when 4 or more claims have 
been made, or by the market value of the property in relation to the 
cumulative amount of two or more claims when that cumulative amount 
exceeds the market value (Sec.  79.2(g)).
    Instead of using the term ``property value'', FEMA used the term 
``market value'' and defined it in Sec.  79.2. FEMA defined market 
value as the amount in cash, or on terms reasonably equivalent to cash, 
for which in all probability the property would have sold on the 
effective date of the valuation, after a reasonable exposure time on 
the open market, from a willing and reasonably knowledgeable seller to 
a willing and reasonably knowledgeable buyer, with neither acting under 
any compulsion to buy or sell, giving due consideration to all 
available economic uses of the property at the time of the valuation.

Question 9: What types of assistance do States and communities want 
from FEMA when making offers to owners of severe repetitive loss 
properties?

    Multiple commenters asked for funding for States and communities to 
assist with administrative costs, technical assistance needs, staff, 
and application development as part of making offers to owners of SRL 
properties. State and community commenters also stated that legal 
assistance prior to initiating offers and negotiating with owners would 
assist them.
    A considerable number of commenters stated that the data supporting 
the SRL properties list needed to be updated for accuracy, including 
validating the data for addresses, names, claims history, and property 
values. In addition, commenters requested access to the database, SQA 
Net, flexibility to add structures or validate data, and verifying 
premiums. Commenters also suggested FEMA maintain a single national 
database for projects, and provide information on the true actuarial 
rate in case of refusal at the time of the offer.
    Multiple commenters stated that adequate number of FEMA staff 
needed to be available to manage the program, and that the staff needs 
to be trained in NFIP and FEMA mitigation programs.
    Multiple commenters stated that assistance was needed to notify 
property owners of the consequences of not accepting offers. The 
commenters also stated that a simple FEMA handout or document 
explaining the insurance repercussions and the appeals process would be 
extremely helpful. Multiple commenters also requested FEMA describe the 
tax implications of accepting mitigation funds.
    Multiple commenters requested training be made available or 
improved for the program, and specifically identified insurance agents 
as a target for training.
FEMA's Response
    As with our other grant programs, administrative costs are 
available to applicants and subapplicants as a percentage of the grant 
award, once the grant is awarded. Furthermore, applicants and 
subapplicants may be reimbursed for pre-award costs for activities 
directly related to the development of the project proposal. These 
costs can only have been incurred during the open application period. 
These criteria are detailed in Sec.  79.8 of this interim rule.
    Certain legal expenses may be considered eligible applicant and/or 
subapplicant management cost activities when associated with: 
solicitation, review and processing of the SRL subapplications and 
subgrant awards, obtaining pre-award consultation agreements from SRL 
property owners, and staff salary costs directly related to performing 
the activities above. All management cost activities must be in 
conformance with 44 CFR part 13, Uniform Administrative Requirements 
for Grants and Cooperative Agreements to State and Local Governments 
and applicable program guidance.
    Applicant management costs are limited to up to 10 percent of the 
grant award and subapplicant management costs are limited to up to 5 
percent of the grant award. Eligible management costs incurred prior to 
the grant award, but after the SRL application period has opened are 
identified as pre-award management costs. Costs incurred with respect 
to pre-award activities associated with project implementation are not 
eligible.
    Data on SRL properties is available on the SQA Net to State NFIP 
Coordinators and State Hazard Mitigation Officers. This data is being 
validated and updated continuously. Over one third of the properties 
identified as having a data anomaly have been validated. New 
information is published each month on SQA Net. Information on the 
insurance premium rate increases for property owners refusing the 
mitigation offer will be provided during the consultation. Project-
related data for the SRL program will be housed within the same 
database that is maintained for all other Pre-Disaster Mitigation (PDM) 
grant programs.
    Only FEMA Regional and disaster related staff as well as State 
personnel, have been granted access to the repetitive loss and SRL data 
available to SQA Net. Several new features have been added to SQA Net 
recently including the ability to submit requested updates to 
repetitive loss records electronically over the Internet. The ability 
to search for claims records and to view former and active policy 
records via SQA Net is expected to be in place by Spring 2008. With 
respect to allowing local government access to SQA Net, there are 
concerns regarding potential security issues and the increased 
possibility of the unintentional inappropriate release of the data at 
the local level resulting in a Privacy Act violation. Although they do 
not have access to the SQA Net system, local communities continue to be 
approved users of the repetitive loss data under the Privacy Act.
    Program implementation information will contain information on 
premium rate increases, if a property owner refuses the mitigation 
offer. This program information also contains checklists of the types 
of information that the State or community would need to compile and 
make available as part of the consultations. The program information 
will be augmented further with mitigation consultation tools and 
resources for States and communities to aid in the consultation and 
offer process.

[[Page 61727]]

    Tax implications of accepting mitigation offers must be answered by 
the property owner's tax advisor or other State or locally sponsored 
tax advisory service. FEMA does not have the authority to provide 
information on this issue.
    Section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004 calls for the establishment of minimum training and 
education requirements for insurance agents who sell flood insurance 
policies. FEMA is working with state insurance commissioners on 
training requirements for agents that sell flood insurance policies.

Question 10: What role should states and communities have in the 
appeals process for severe repetitive loss property owners who decline 
mitigation offers under the Pilot Program? What rules and procedures 
should be contained in the Appeals Process?

    Of the comments received, 19 entities offered comments on question 
10. A general synopsis of these comments is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                 States/           Local         Associations/
            General comments on appeals process                territories      communities      organizations
----------------------------------------------------------------------------------------------------------------
Advocate information sharing between FEMA and States.......               1                3                  4
Advocate State and/or community involvement in Appeals                    5                4                  1
 Process...................................................
Advocate that only FEMA be involved in Appeals Process.....  ...............               1   .................
State participants still discussing the issue with other                  1   ...............  .................
 State agencies............................................
----------------------------------------------------------------------------------------------------------------

    The following are the comments on the appeals requirement of the 
Pilot Program presented by State and local officials and representative 
organizations during the consultation:
     Clarity in the details, especially the Appeals Process and 
the insurance consequences.
     States and communities are also sensitive to any 
possibility of liability which may preclude much participation in the 
Appeals Process. However, States and communities may be willing to 
participate in an administrative capacity in collecting data for 
appeals and ensuring that applications are completed.
     Property owners should make an appeal in writing, along 
with supporting documentation. The jurisdiction can also file 
documentation either in support or against the property owner's reason 
for the appeal.
     The decision to accept or deny the appeal must come from 
FEMA, thereby removing the States and communities from the threat of 
legal action. FEMA should send written notice of its findings to the 
state, community and property owner.
     Appeals rule requirements should not be written in a way 
that allows the property owners to easily avoid mitigation activities 
or higher flood insurance premiums.
     States and communities should be an informational role; 
again, concern to keep the States and communities from the potential 
legal liabilities.
     The local communities and the State officials should just 
assist people with the appeals. FEMA should make all your final 
decisions and handle all the paperwork. We also feel that there should 
be some formal recommendation from your parishes or local communities 
or State.
     The appeal process should start with the community. If the 
owner of a property rejects an offer but can easily show that in 
purchasing, that he relied on a FIRM [Flood Insurance Rate Map] map 
that indicated the property was not on the mapped flood hazard area, 
this should not have to go to FEMA.
     The appeal should go through the local government. They 
are the ones with claims on the property; they could validate it. 
Should come through the state as the administrator of the program. We 
could validate it; just like with an appeal from the local government, 
you concur, you may not concur, no comment, but that provides the 
additional insight.
FEMA's Response
    As established in Sec.  78.7(d) of this rule, an appeal on 
increased insurance rates is made in writing by the property owner to 
the FEMA Regional Administrator within 90 days of the date of the 
notice of insurance increase. The Regional Administrator may request 
the Grantee, and Sub-grantee (State and community) if applicable, to 
assist in the collection of data to support the property owner's 
appeal. The Regional Administrator will review the information provided 
by the property owner and may participate in discussions with the 
property owner, and if applicable, with the Grantee and Sub-grantee to 
resolve the appeal prior to sending it to an Independent Third Party or 
a reviewer from FEMA's Alternative Dispute Resolution office (at the 
property owner's discretion).

IV. Regulatory Requirements

A. Administrative Procedure Act Statement

    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 
that the procedures for prior comment and response are impracticable, 
unnecessary, or contrary to public interest.
    This interim rule implements provisions of the Bunning-Bereuter-
Blumenauer Flood Insurance Reform Act of 2004, which amended the 
National Flood Insurance Act of 1968. The key component of this rule 
includes implementation of the new SRL program as well as amending 
provisions of the existing FMA program. The rule also streamlines the 
planning process, and clarifies the planning requirements to address 
existing, unanticipated inconsistencies.
    Authorization for the SRL program expires on September 30, 2009. 
Funding for the new SRL program was made available as of fiscal year 
2006, thus it is important to allow States, tribes, communities, and 
property owners to access these funds so that they may have the 
opportunity to reduce their flood losses to these high risk properties 
as soon as possible. It is also in the public interest to mitigate 
these SRL properties as soon as possible to minimize further costs 
resulting from upcoming seasonal flooding. These properties often pose 
the highest costs to the Nation in terms of discounted Federal flood 
insurance rates, as well as Federal disaster assistance payments,
    Prior comment on this rule is not in the public interest where the 
implementation of the new SRL program, as well as the modified FMA 
program, will assist States recovering from flood disasters nationwide, 
including Hurricanes Katrina and Rita, by providing additional grant 
resources

[[Page 61728]]

and increasing the Federal cost share for projects mitigating SRL 
properties. In particular, States and communities are at a critical 
stage for identifying properties to be mitigated in the post-Katrina 
recovery efforts, and these funds are essential for targeting the most 
costly properties in the area. To be most effective, the funds need to 
be made available to the Gulf Coast States and communities affected by 
Katrina and Rita as soon as possible. At the end of August 2007, there 
were just under 8,100 properties identified as meeting the definition 
of severe repetitive loss properties; approximately 58 percent, or 
4,685 properties, lie within the 5 States most affected by Hurricanes 
Katrina and Rita. Mitigating these SRL properties will provide States 
the opportunity to reduce future losses to these SRL properties, which 
represent the largest drain on the NFIF and also will reduce future 
disaster costs to the local, State, and Federal government.
    States, tribes, and communities also have a strong interest in 
accessing, as soon as possible, information in the rule that outlines 
how the States can revise their mitigation plans to receive the reduced 
cost share under the FMA and SRL programs. This cost-share reduction is 
an important incentive and, in some cases, necessary to allow 
communities, which otherwise would not be able to meet the match 
requirement, to mitigate SRL properties. It is essential that the 
availability of this information not be delayed, particularly where in 
many cases the revisions to mitigation plans will themselves, require 
time-consuming coordination across multiple agencies.
    In accordance with the Administrative Procedure Act, 5 U.S.C. 553 
(b), FEMA believes that prior notice and comment would be contrary to 
the public interest, as it would serve only to delay the benefits of 
this rule to States, tribes, and communities, and would continue 
imposing the costs of these at-risk properties on the general public.
    FEMA nevertheless recognizes the importance of public input in the 
regulatory process. To that end, FEMA involved the public in a 
consultation process prior to the publication of this interim rule. To 
initiate the consultation process, FEMA published a Federal Register 
notice on September 15, 2004, 69 FR 55642. The comment period was 
supposed to close on November 30, 2004, but FEMA extended the deadline 
for comments until December 7, 2004, and received 26 written comments 
from States, communities, and associations. Also, as part of the 
consultation, FEMA invited representative officials of State and local 
governments, organizations representing emergency management, 
floodplain management, and insurance professions, to provide oral 
presentations on the requirements and issues raised in the Federal 
Register notice. Comments received were given careful consideration in 
the preparation of this interim rule.
    Finally, FEMA actively encourages and solicits comments on this 
interim rule from interested parties. These comments will be given 
careful consideration, and could result in changes to these 
regulations.

B. National Environmental Policy Act

    FEMA has considered this rule in accordance with its implementing 
regulations for complying with the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321-4370f), which are found at 44 CFR part 10. 
This rule addresses applicant planning requirements, as well as 
eligibility, funding increases, and cost sharing/funding incentives 
relating to certain disaster mitigation programs and does not change 
the type or nature of mitigation actions that may be funded. This 
rulemaking would neither individually nor cumulatively have a 
significant effect on the human environment and, therefore, neither an 
environmental assessment nor an environmental impact statement is 
required. This rulemaking is among the category of actions included in 
the Categorical Exclusions listed at 44 CFR 10.8(d)(2)(ii), which 
excludes the preparation, revision and adoption of regulations from the 
preparation of an environmental assessment or environmental impact 
statement, where the rule relates to actions that qualify for 
categorical exclusions. The related actions of the development of plans 
and administrative activities that are included in this rule are also 
categorically excluded under 44 CFR 10.8(d)(2)(iii) and 44 CFR 
10.8(d)(2)(i).

C. Executive Order 11988, Floodplain Management

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 11988, Floodplain Management. Part 9 sets forth FEMA's 
policy, procedures, and responsibilities in implementing this Executive 
Order. In summary, these are, to the greatest possible degree: To avoid 
long and short term adverse impacts associated with the occupancy and 
modification of floodplains; avoid direct and indirect support of 
floodplain development whenever there is a practical alternative; 
reduce the risk of flood loss; promote the use of nonstructural flood 
protection methods to reduce the risk of flood loss; minimize the 
impacts of floods on human health, safety and welfare; restore and 
preserve the natural and beneficial values served by floodplains; and 
adhere to the objectives of the Unified National Program for Floodplain 
Management. As stated in the rule, the purpose of the SRL and FMA 
programs is to mitigate insured property losses from floods, thereby 
minimizing impacts to the NFIF, which is consistent with the intent of 
the Executive Order. In addition, for project activities funded through 
the SRL and FMA programs, each project will go through the 
environmental review process, which will include compliance with 
Executive Order 11988.

D. Executive Order 12866, Regulatory Planning and Review

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 12866, Regulatory Planning and Review. Under Executive 
Order 12866, a significant regulatory action is subject to the Office 
of Management and Budget (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.
Regulatory Alternatives
    In determining how to move forward with this rule, two alternatives 
were considered. The first alternative was to issue an interim rule for 
the SRL program, and to modify the existing separate FMA rule to 
incorporate changes made by the Act. This would result in two sections 
of the CFR addressing mitigation grant programs funded through the NFIP 
which could result in disjointed implementation of the two similar 
programs.
    The second alternative (and the one adopted by FEMA) was to 
establish and proceed with the implementation of the SRL and FMA 
programs as described in

[[Page 61729]]

this interim rule. This will allow FEMA to ensure a more consistent 
approach to implementation and management of these programs. FEMA has 
been working to implement all of the mitigation grant programs in a 
consistent manner, and this regulatory change furthers that attempt. 
These changes are also expected to limit confusion around program 
implementation since both programs will likely be managed by the same 
state agency staff.
Congressional Appropriations
    The regulations implementing the FMA program were originally issued 
on March 20, 1997. Historically, the program has provided $20 million 
in grants on an annual basis to States and communities to reduce flood 
losses to properties insured under the NFIP. In fiscal year 2007, $31 
million was made available for the FMA program to fund activities that 
help reduce repetitive flood insurance claims, thereby reducing the 
drain on the NFIP from these properties. This program provides an 
opportunity for every State to fund planning and project activities 
but, since it is a small program, it is unable to assist all those who 
could benefit from it. The Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004 provides for additional program funding for the FMA 
program, as well as makes it easier for some to participate in the 
program, by providing the ability for States to reduce the cost share 
for those properties that meet the definition of a severe repetitive 
loss property.
    The primary purpose of this rule is to implement the new SRL 
program, which will provide grants to property owners to mitigate their 
risk from flooding, with incremental increases in the insurance 
premiums imposed if they decline to accept the offers of mitigation. In 
fiscal year 2007, $40 million was made available by Congress for the 
SRL program. Therefore, in fiscal year 2007, a total of $71 million was 
allocated for these programs ($31 million for FMA and $40 million for 
SRL).
Impact From Increase in Insurance Premiums
    Most severe repetitive loss properties were built prior to December 
31, 1974, and the insurance premiums for these properties are supported 
financially by other NFIP policyholders. Repetitive loss properties 
only account for approximately 1 percent of the current NFIP policies, 
yet these properties historically account for over 30 percent of the 
amount paid in claims. Under the SRL program, owners of severe 
repetitive loss properties will receive mitigation offers. Refusals of 
these offers will result in increased premiums for owners of these 
properties. Thus, in either case, this rule should help shift the 
disproportionate burden away from the majority of NFIP policyholders 
who do not own SRL properties.
    Within the NFIP, the average discounted premium paid by owners of 
property built before December 31, 1974 is $800 per year. However, if 
those properties were rated on an actuarial basis, taking into account 
their actual flood risk, the annual premiums they should be paying 
would average between $1,700 and $1,900 per year. Severe repetitive 
loss properties as a subset of the pre-1974 properties have higher 
flood risks than most properties with discounted premiums insured under 
the NFIP, and their actuarial rates could be much higher. For purposes 
of estimating the annual economic impact of this interim rule, FEMA 
used an average actuarial premium rate of $5,000 for these severe 
repetitive loss properties. This average actuarial rate does not 
reflect the discount premium rate; rather it more closely represents 
the flood risk to the property.
    Of the $40 million available each year for the SRL program, FEMA 
assumes that $37 million will be awarded as project grants, and that 
the average grant per property is $75,000. Therefore, offers will be 
made to approximately 500 property owners in the first year. It is 
assumed that up to 3 percent of those property owners might decline the 
offer of mitigation assistance, and that these 15 properties would be 
subject to the increased insurance premiums. This 3 percent figure is 
based on the fact that although NFIP engages in litigation for less 
than 1 percent of its claims in an average claims year, there have been 
3 times the normal number of claims as a result of Hurricanes Katrina, 
Rita, and Wilma. Also, after the wildfires of Cerro Grande, FEMA 
instituted a similar grant program whereby homeowners received funds 
for repair, with an appeals provision. Approximately 3 percent of those 
homeowners appealed their grant amount.
    This increased cost of insurance for these 15 properties would 
result in an average discounted premium increase of approximately $400 
per property owner (50% of the $800 average discounted premium), for a 
total increase in insurance premiums of $6,000 the first year. This 
premium rate can increase over time, until the actuarial rate 
(averaged, for the purpose of this rule to $5,000) is reached. At no 
time, however, would the premium paid for the affected property exceed 
the actuarial rate. If, over the remaining 1 year of the pilot SRL 
program, one expects the number of property owners declining the offer 
of assistance to remain the same, then the total number of affected 
properties will be 30. Within 10 to 20 years, when all 30 of the 
affected properties whose owners declined the mitigation offer will 
each pay actuarial premium rates described above as averaging $5,000 
per year, the maximum annual impact of the program would be $150,000 
($5000 x 30).
Changes to HMGP
    The rulemaking makes a technical change to reflect existing HMGP 
post-disaster allocation amounts already in effect as a result of 
amendments to Section 404 of the Stafford Act (42 U.S.C. 5170c, as 
amended by Pub. L. 109-295, Sec.  684). The change set non-
discretionary standard allocation amounts for the program.
Open Space
    As part of implementing the SRL and FMA, this rule also includes a 
new part (part 80) which describes the requirements and procedures for 
open space acquisition which will apply to these programs, as well as 
all FEMA mitigation grant programs. The Act requires certain special 
acquisition procedures for SRL, however open space acquisitions funded 
under all FEMA mitigation grant programs otherwise subject to the same 
requirements to ensure mitigation objectives are met. Prior to this 
rule, acquisition requirements for each mitigation grant program were 
addressed in the respective mitigation grant program regulations or 
guidance, such as at Sec.  78.12 for FMA and Sec.  206.434 for HMGP, 
including associated program guidance. A central reference point for 
all mitigation grant program property acquisitions is intended to make 
the programs easier to implement. There will be no additional cost from 
this change.
Increase in Federal Share
    The rule also implements the changes to the FMA program by allowing 
for a 90 percent Federal share for the mitigation of severe repetitive 
loss properties, amending the method by which State funding allocations 
are calculated, and making the FMA planning requirements and other 
program aspects consistent with other FEMA mitigation planning and 
program requirements. Though there is no net change in the funding 
allocated for FMA with this new cost share provision, the distribution 
of the funding will shift to the Federal ``side''. In FY 2007, $31

[[Page 61730]]

million was made available for the FMA program. Since the change in 
Federal share will be from 75 percent to 90 percent, the change in 
Federal outlay will be $4.65 million. This figure includes two very 
conservative assumptions: That all properties mitigated under FMA will 
be SRL properties; and that all States will seek this new cost share by 
virtue of revising their State mitigation plans.
Intangible Benefit
    As of the end of August 2007, just under 8,100 properties were 
identified as meeting the definition of severe repetitive loss. Of 
those, approximately 58 percent are in the 5 States most affected by 
hurricanes Katrina and Rita. Alabama has 223 properties, Louisiana has 
2,567 properties, Mississippi has 148 properties, Texas has 1,275 
properties, and Florida has 472 properties. Implementation of the new 
SRL program, as well as the modified FMA program, will assist these 
States in recovering from these disasters by providing additional grant 
resources and the ability to increase the Federal cost share for 
projects mitigating SRL properties.
    The economic impact of this rule is approximately $76 million. This 
rulemaking has been determined to be a nonsignificant regulatory action 
under section 3(f) of Executive Order 12866 by OMB. This rule adheres 
to the principles of regulation of the Executive Order.

E. 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, FEMA incorporates 
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 FEMA can anticipate under the interim rule will have 
a disproportionately high or adverse human health and environmental 
effect on any segment of the population. This rule implements the SRL 
program, providing mitigation grants to severe repetitive loss 
properties, and modifies aspects of the FMA program and the mitigation 
planning requirements. With respect to Indian tribal governments, the 
rule streamlines and simplifies the planning requirements. Finally, 
this interim rule amends Sec.  206.432 to reflect statutory and 
technical changes to HMGP. Accordingly, the requirements of Executive 
Order 12898 do not apply to this interim rule.

F. Paperwork Reduction Act of 1995

    This interim rule includes provisions constituting collections of 
information under the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 
3501 et seq.). Under section 3507(d) of the PRA, The Federal Emergency 
Management Agency (FEMA) will submit a copy of this rulemaking action 
to the Office of Management and Budget (OMB) for review. FEMA is 
submitting a request for review and approval of collections of 
information under OMB's emergency processing procedures. Through 
publication of this interim rule, FEMA is requesting a 6-month approval 
for these information collections. FEMA plans to follow this emergency 
approval request with a 3-year approval request. The 3-year request 
will be processed under OMB's normal clearance procedures in accordance 
with the provisions of OMB regulation at 5 CFR 1320.10. This interim 
rule also serves as the 60 day notice required by 5 CFR 1320.8. FEMA 
invites the public to comment on the proposed collections of 
information during this 60 day comment period.
    Several collections of information referenced in this interim rule 
have existing OMB approvals under the PRA. The rule in Sec. Sec.  
79.3(b), 79.3(c), 79.3(d), 79.5(a)(2), 79.5(b), 79.6(b), 79.7(b), 
79.9(a), 201.3, 201.6, and 201.7 contains collections of information 
under the PRA for which FEMA requests approval of amendments to 
existing collections by OMB. In addition, FEMA is requesting approval 
of two new collections of information for the interim rule contained 
under the new Sec. Sec.  79.7(d), 80.13(a), 80.13(b), 80.17(e), 
80.19(b), 80.19(d), 80.19(e), 80.21, and 206.434.
1. Collection of Information
    Part 201 under OMB Number 1660-0062, State/Local/Tribal Hazard 
Mitigation Plans--under section 322 of Stafford Act clarifies the 
State, Tribal, and local mitigation planning requirements. Before this 
interim rule goes into effect, applicants for FMA funds are required to 
develop a plan that specifically addresses flood mitigation planning 
requirements under part 78. This plan is collected under OMB collection 
number 1660-0075; Flood Mitigation Assistance--Flood Mitigation Plan. 
Applicants for all other types of mitigation grant funding are required 
to develop a plan that addresses all hazards for which the applicant 
seeks funds under part 201, which may also include floods. This plan is 
collected under OMB collection number 1660-0062; State/Local/Tribal 
Hazard Mitigation Plans--under section 322 of Stafford Act. With the 
revisions established by this interim rule, the all hazards plan 
developed under part 201 will meet the requirements for all mitigation 
grants including FMA, which means that applicants will no longer be 
required to submit the flood specific plans under part 78. Because of 
this change FEMA is discontinuing OMB collection number 1660-0075, and 
revising OMB collection number 1660-0062.
    Due to this change in the mitigation grant process, there are 
outstanding flood mitigation grants that have been issued with the 
requirement that the grantee submit a flood mitigation plan pursuant to 
the requirements of part 78. Although FEMA will no longer require the 
submission of flood mitigation plans for those funds awarded during 
application periods that open on or after the effective date of this 
rule, FEMA will continue to accept flood mitigation plans until the end 
of a grantee's current period of performance to include any extensions 
granted pursuant to Sec.  78.9 and FEMA's Financial and Acquisition 
Management Division's Extension Policy.
    Title: State/Local/Tribal Hazard Mitigation Plans-Section 322 of 
the Disaster Mitigation Act of 2000.
    OMB Number: 1660-0062.
    Abstract: The purpose of the State/Local/Tribal Hazard Mitigation 
Plan requirements is to outline the strategy by which State, tribal and 
local governments use to demonstrate the 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.
    Affected Public: State, Local or Tribal Government.
    Number of Respondents: 56.
    Estimated Time per Respondent: 2,408.
    Estimated Total Annual Burden Hours: 768,320.
    Frequency of Response: On Occasion.
    The authorized SRL grant program will be implemented under the new 
part 79. However, the administration of FMA funds for which application 
period opens prior to publication of this rule will be subject to part 
78, while the new

[[Page 61731]]

part 79 is used to administer new FMA grants.
2. Collection of Information
    The SRL grant program was authorized by Congress in 2004 and 
expires on September 30, 2009. The SRL grant program focuses on a 
subset of all repetitive flood loss properties, residential properties 
with a high frequency of losses or a high value of claims, defined as 
severe repetitive loss properties. This is a non-disaster grant program 
that is authorized annually and not as a result of a Presidential 
Disaster Declaration. The information collection activity under the 
approved OMB information collection 1660-0025, FEMA Grant 
Administrative Forms is a paper-based collection used by States and 
local government to obtain grant information and is being amended to 
include the following burden hours for the SRL grant program.
    Title: FEMA Grant Administration Forms.
    OMB Number: 1660-0025.
    Abstract: This collection of information focuses on the 
standardization and consistent use of standard and FEMA forms 
associated with grantees request for disaster and non-disaster federal 
assistance, submission of financial and administrative reporting and 
recordkeeping. The use of the forms will minimize burden on the 
respondents and enable FEMA to continue to improve in its grants 
administration practices.
    Affected Public: State, Local or Tribal Government.
    Estimated Total Annual Burden Hours:

                                                                    Disaster Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Number of       Frequency of                                       Annual
 Data collections activity/instruments     respondents        responses       Hour burden per response        responses       Total annual burden hours
                                                     (A)               (B)  (C).........................     (D) = (A x B)  (C x D)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PA:
    SF 424............................                56                 1  45 minutes..................                56  42 hours.
    FF 20-20..........................                56                 1  9.7 hours...................                56  543 hours.
    FF 20-16, A, B, C.................                56                 1  1.7 hours...................                56  95 hours.
    FF 20-10..........................                56                 4  1 hour......................               224  224 hours.
    SF-LLL............................                56                 1  10 minutes..................                56  9 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                56  ................  13.3 hours..................               392  57 Disaster Declarations x
                                                                                                                             913 hours = 52,041.
SCC:
    SF 424............................                17                 1  45 minutes..................                17  13 hours.
    SF 20-20..........................                17                 1  9.7 hours...................                17  165 hours.
    FF 20-16, A, B, C.................                17                 1  1.7 hours...................                17  29 hours.
    FF 20-10 (SF 269).................                17                 4  1 hour......................                68  68 hours.
    SF-LLL............................                17                 1  10 minutes..................                17  3 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                17  ................  13.3 hours..................               119  57 Disaster Declarations x
                                                                                                                             278 hours = 15,846.
ONA:
    SF 424............................                40                 1  45 minutes..................                40  30 hours.
    FF 20-20..........................                40                 1  9.7 hours...................                40  388 hours.
    FF 20-16, A, B, C.................                40                 1  1.7 hours...................                40  68 hours.
    FF 20-10..........................                40                 4  1 hour......................               160  160 hours.
    SF-LLL............................                40                 1  10 minutes..................                40  7 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                40  ................  13.3 hours..................               320  57 Disaster Declarations x
                                                                                                                             653 hours = 37,221.
HMGP:
    SF 424............................                52                 1  45 minutes..................                52  39 hours.
    FF 20-20..........................                52                15  9.7 hours...................               780  7,566. hours.
    FF 20-16, A, B, C.................                52                 1  1.7 hours...................                52  88 hours.
    FF 20-10..........................                52                 4  1 hour......................               208  208 hours.
    FF 20-17..........................                52                15  17.2 hours..................               780  13,416 hours.
    FF 20-18..........................                52                 6  4.2 hours...................               312  1,310 hours.
    FF 20-19..........................                52                 6  5 minutes...................               312  25 hours.
    SF-LLL............................                52                 1  10 minutes..................                52  9 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                52  ................  35 hours....................             2,548  57 Disaster Declarations x
                                                                                                                             22,661 hours = 1,291,677.
FMAGP:
    SF 424............................                12                 4  45 minutes..................                48  36 hours.
    FF 20-20..........................                36                 4  9.7 hours...................               144  1,397 hours.
    FF 20-16, A, B, C.................                36                 4  1.7 hours...................               144  245 hours.

[[Page 61732]]

 
    FF 20-15..........................                36                 4  17.2 hours..................               144  2,477 hours.
    FF 20-10..........................                12                 4  1 hour......................                48  48 hours.
    FF 20-18..........................                36                 4  4.2 hours...................               144  605 hours.
    FF 20-19..........................                36                 4  5 minutes...................               144  12 hours.
    SF-LLL............................                36                 4  10 minutes..................               144  24 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                36  ................  35 hours....................               960  94 Disaster Declarations x
                                                                                                                             4,844 hours = 455,336.
                                       -----------------------------------------------------------------------------------------------------------------
        Disaster Grants Total.........                56  ................  110 hours...................             3,800  1,852,121 hours.
                                       -----------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                  Non-Disaster Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Number of       Frequency of                                       Annual
 Data collection activity/instruments      respondents        responses       Hour burden per response        responses          Total burden hours
                                                     (A)               (B)  (C).........................     (D) = (A x B)  (C x D)
--------------------------------------------------------------------------------------------------------------------------------------------------------
US&R:
    SF 424............................                28                 1  45 minutes..................                28  21 hours.
    FF 20-20..........................                28                 1  9.7 hours...................                28  272 hours.
    FF 20-16, A, B, C.................                28                 1  1.7 hours...................                28  48 hours.
    FF 76-10A.........................                28                 1  1.2 hours...................                28  34 hours.
    FF 20-10..........................                28                 2  1 hour......................                56  56 hours.
    SF 270............................                28                 1  1 hour......................                28  28 hours.
    SF LLL............................                28                 1  10 minutes..................                28  5 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                28  ................  16 hours....................               224  498 hours.
CAP-SSSE:
    SF 424............................                56                 1  45 minutes..................                56  42 hours.
    FF 20-20..........................                56                 1  9.7 hours...................                56  543 hours.
    FF 20-15..........................                56                 1  17.2 hours..................                56  963 hours.
    FF 20-16, A, B, C.................                56                 1  1.7 hours...................                56  95 hours.
    FF 76-10A.........................                56                 1  1.2 hours...................                56  67 hours.
    FF 20-10..........................                56                 2  1 hour......................               112  112 hours.
    FF 20-18..........................                56                 1  4.2 hours...................                56  235 hours.
    FF 20-19..........................                56                 1  5 minutes...................                56  4 hours.
    SF LLL............................                56                 1  10 minutes..................                56  9 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                56  ................  36 hours....................               560  2,070 hours.
CSEPP:
    SF 424............................                10                 1  45 minutes..................                10  8.0 hours.
    FF 20-20..........................                10                 1  9.7 hours...................                10  97.0 hours.
    FF 20-10..........................                10                 4  1 hour......................                40  40.0 hours.
    FF 20-16, A, B, C.................                10                 1  1.7 hour....................                10  17.0 hours.
    FF 76-10A.........................                10                 1  1.2 hour....................                10  12.0 hours.
    FF 20-18..........................                10                 1  4.2 hours...................                10  42.0 hours.
    FF 20-19..........................                10                 1  5 minutes...................                10  1.0 hours.
    SF LLL............................                10                 1  10 minutes..................                10  2.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                10  ................  19 hours....................               120  219 hours.
NDSP:
    SF 424............................                51                 1  45 minutes..................                51  38.0 hours.
    FF 20-20..........................                51                 1  9.7 hours...................                51  495.0 hours.
    FF 20-16, A, B, C.................                51                 1  1.7 hours...................                51  87.0 hours.
    FF 76-10A.........................                51                 1  1.2 hours...................                51  61.0 hours.
    FF 20-10..........................                51                 4  1 hour......................               204  204.0 hours.
    SF 270............................                51                 1  1 hour......................                51  51.0 hours.
    SF LLL............................                51                 1  10 minutes..................                51  8.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                51  ................  16 hours....................               510  944 hours.
ICE:
    FF 20-10..........................                17                 4  1 hour......................                68  68.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                17  ................  1 hour......................                17  68 hours.

[[Page 61733]]

 
EqC:
    FF 20-10..........................                 3                 2  1 hour......................                 6  6 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                 3  ................  1 hour......................                 6  6 hours.
AIDMATRIX:
    SF 424............................                 1                 1  45 minutes..................                 1  .75 minutes.
    FF 20-20..........................                 1                 1  9.7 hours...................                 1  9.7 hours.
    FF 20-10..........................                 1                 4  1 hour......................                 4  4.0 hours.
    FF 20-16 A, B, C..................                 1                 1  1.7 hours...................                 1  1.7 hours.
    SF LLL............................                 1                 1  10 minutes..................                 1  .16 minutes.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                 1  ................  13 hours....................                 8  16 hours.
AHPP:
    SF 424............................                 4                 1  45 minutes..................                 4  3.0 hours.
    FF 20-20..........................                 4                 1  9.7 hours...................                 4  39.0 hours.
    FF 20-10..........................                 4                 4  1 hour......................                16  16.0 hours.
    FF 20-16, A, B, C.................                 4                 1  1.7 hours...................                 4  6.8 hours.
    SF LLL............................                 4                 1  10 minutes..................                 4  .66 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                 4  ................  13 hours....................                32  65 hours.
CTP:
    SF 424............................                20                 1  45 minutes..................                20  15.0 hours.
    FF 20-20..........................                20                 1  9.7 hours...................                20  194.0 hours.
    FF 20-15..........................                20                 1  17.2 hours..................                20  344.0 hours.
    FF 20-16, A, B, C.................                20                 1  1.7 hours...................                20  34.0 hours.
    FF 20-10..........................                20                 4  1 hour......................                80  80.0 hours.
    SF LLL............................                20                 1  10 minutes..................                20  3.3 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                20  ................  31 hours....................               180  670.3 hours.
MMMS:
    SF 424............................                20                 1  45 minutes..................                20  15.0 hours.
    FF 20-20..........................                20                 1  9.7 hours...................                20  194.0 hours.
    FF 20-15..........................                20                 1  17.2 hours..................                20  344.0 hours.
    FF 20-16, A, B, C.................                20                 1  1.7 hours...................                20  34.0 hours.
    FF 20-10..........................                20                 2  1 hour......................                40  40.0 hours.
    SF LLL............................                20                 1  10 minutes..................                20  3.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                20  ................  31 hours....................               120  630 hours.
RFC:
    SF 424............................                56                 1  45 minutes..................                56  42.0 hours.
    FF 20-20..........................                56                 1  9.7 hours...................                56  543.0 hours.
    FF 76-10A.........................                56                 1  1.2 hours...................                56  67.0 hours.
    FF 20-16, A, B, C.................                56                 1  1.7 hours...................                56  95.0 hours.
    FF 20-10..........................                56                 4  1 hour......................               224  224.0 hours.
    FF 20-18..........................                56                 1  4.2 hours...................                56  235.0 hours.
    FF-20-19..........................                56                 1  5 minutes...................                56  5.0 hours.
    SF LLL............................                56                 1  10 minutes..................                56  9.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                56  ................  19 hours....................               616  1,220 hours.
SRL:
    FF 424............................                56                 1  45 minutes..................                56  42.0 hours.
    FF 20-20..........................                56                 1  9.7 hours...................                56  543.0 hours.
    FF 76-10A.........................                56                 1  1.2 hours...................                56  67.0 hours.
    FF 20-16, A, B, C.................                56                 1  1.7 hours...................                56  95.0 hours.
    FF 20-10..........................                56                 4  1 hour......................               224  224.0 hours.
    FF 20-18..........................                56                 1  4.2 hours...................                56  235.0 hours.
    FF 20-19..........................                56                 1  5 minutes...................                56  5 hours.
    SF LLL............................                56                 1  10 minutes..................                56  9.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                56  ................  19 hours....................               616  1,220 hours.
FMA:
    SF 424............................                56                 3  45 minutes..................               168  126.0 hours.
    FF 20-20..........................                56                 3  9.7 hours...................               168  1630.0 hours.
    FF 20-16, A, B, C.................                56                 1  1.7 hours...................                56  95.0 hours.
    FF 76-10A.........................                56                 3  1.2 hours...................               168  202.0 hours.
    FF 20-10..........................                56                 4  1 hour......................               224  224.0 hours.
    FF 20-18..........................                56                 1  4.2 hours...................                56  235.0 hours.
    FF 20-19..........................                56                 1  5 minutes...................                56  4.0 hours.
    SF LLL............................                56                 1  10 minutes..................                56  9.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                56  ................  19 hours....................               952  2,525 hours.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 61734]]


                                                                  Non-Disaster Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Number of       Frequency of                                       Annual
 Data collection activity/instruments      respondents        responses       Hour burden per response        responses          Total burden hours
                                                     (A)               (B)  (C).........................     (D) = (A x B)  (C x D)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PDM:
    SF 424............................                56                 2  45 minutes..................               112  84 hours.
    FF 20-15..........................                56                 1  17.2 hours..................                56  963.2 hours.
    FF 20-20..........................                56                 2  9.7 hours...................               112  1,086.4 hours.
    FF 76-10A.........................                56                 2  1.2 hours...................               112  134.4 hours.
    FF 20-16, A, B, C.................                56                 2  1.7 hours...................               112  190.4 hours.
    FF 20-10..........................                56                 8  1 hour......................               448  448 hours.
    FF 20-17..........................                56                20  17.2 hours..................             1,120  19,264 hours.
    FF 20-18..........................                56                 2  4.2 hours...................               112  470.4 hours.
    FF 20-19..........................                56                 2  5 minutes...................               112  9.3 hours.
    SF LLL............................                56                 2  10 minutes..................               112  18.6 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................                56  ................  53 hours....................             2,408  22,668.7 hours.
AFG*:
    SF 424............................             4,246                 1  45 minutes..................             4,246  3,185.0 hours.
    FF 20-20..........................             4,246                 2  9.7 hours...................             8,492  82,372.0 hours.
    FF 76-10A.........................             4,246                 2  1.2 hours...................             8,492  10,190.0 hours.
    FF 20-16, A, B, C.................             4,246                 1  1.7 hours...................             4,246  7,218.0 hours.
    FF 20-10..........................             4,246                 2  1 hour......................             8,492  8,492.0 hours.
    FF 20-17..........................             4,246                 1  17.2 hour...................             4,246  73,031.0 hours.
    FF 20-18..........................             4,246                 1  4.2 hours...................             4,246  17,833.0 hours.
    FF 20-19..........................             4,246                 1  5 minutes...................             4,246  340.0 hours.
    SF LLL............................             4,246                 1  10 minutes..................             4,246  705.0 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................             4,246  ................  36 hours....................            50,952  203,366 hours.
SAFER*:
    SF 424............................               243                 1  45 minutes..................               243  182.0 hours.
    FF 20-20..........................               243                 2  9.7 hours...................               486  4,714.0 hours.
    FF 76-10A.........................               243                 2  1.2 hours...................               486  583.0 hours.
    FF 20-16, A, B, C.................               243                 1  1.7 hours...................               243  413.1 hours.
    FF 20-10..........................               243                 4  1 hour......................               972  972 hours.
    FF 20-17..........................               243                 1  17.2 hours..................               243  4,179.6 hours.
    FF 20-18..........................               243                 1  4.2 hours...................               243  1,020.6 hours.
    FF 20-19..........................               243                 1  5 minutes...................               243  20.2 hours.
    SF LLL............................               243                 1  10 minutes..................               243  40.5 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Subtotal......................               243  ................  36 hours....................             3,402  12,125.7 hours.
                                       -----------------------------------------------------------------------------------------------------------------
        Non-Disaster Grants Total.....  ................  ................  359.........................            55,378  248,312.
                                       -----------------------------------------------------------------------------------------------------------------
            Grand Total...............  ................  ................  469.........................            59,178  2,100,433.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* AFG and SAFER grants are awarded directly to individual Fire departments.

3. Collection of Information
    The information collection activity under the approved OMB 
information collection 1660-0072, Mitigation Grant Program/e-Grants 
(previous named Flood Mitigation Assistance (e-Grants)) and Grant 
Supplemental Information is an electronic system used to meet the 
intent of the eGovernment initiative. This collection does not 
supersede the paper-based collection for Grants (OMB No. 1660-0025). 
Applicants may apply using the e-Grants (1660-0072) application 
accessible on the Internet at https://portal.fema.gov. The OMB approved 
collection 1660-0072 have been combined with OMB No. 1660-0071, Pre-
Disaster Mitigation (PDM) Grant Program/e-Grants to streamline and 
simplify documentation of the same information collected for all 
mitigation e-Grants program. Because of this change OMB No. 1660-0071 
has been discontinued as a separate collection. This collection also 
includes the authorized SRL program.
    Title: Mitigation Grant Program/ e-Grants.
    OMB Number: 1660-0072.
    Abstract: The States will utilize the Mitigation Grant Program/e-
Grants, automated application to report to FEMA on a quarterly basis, 
certify how funding is being used and to report on the progress of 
mitigation activities funded under grant awards, made to grantees by 
FEMA who will use the system to review the grantees quarterly reports 
to ensure that mitigation grant activities are progressing on schedule 
and to track the expenditures of funds.
    Affected Public: State, Local or Tribal Government.
    Estimated Total Annual Burden Hours:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number of       Frequency of    Burden hours per                      Total annual
    Project/activity (survey, forms(s), focus group, etc.)         respondents        responses        respondent     Annual responses    burden hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
FMA:
    Benefit-Cost Determination................................                56                 2                 5               112               560

[[Page 61735]]

 
    Environmental Review......................................                56                 2               7.5               112               840
    Project Narrative--Sub-grant Application..................                56                 4                12               224             2,688
                                                               -----------------------------------------------------------------------------------------
        Subtotal FMA..........................................                56  ................              24.5               448             4,088
RFC:
    Benefit-Cost Determination................................                56                 1                 5                56               280
    Environmental Review......................................                56                 1               7.5                56               420
    Project Narrative--Sub-grant Application..................                56                 2                12               112             1,344
                                                               -----------------------------------------------------------------------------------------
        Subtotal RFC..........................................                56  ................              24.5               224             2,084
PDM:
    Benefit-Cost Determination................................                56                20                 5             1,120             5,600
    Environmental Review......................................                56                20               7.5             1,120             8,400
    Project Narrative--Sub-grant Application (including PDM                   56                20                12             1,120            13,440
     Evaluation Information Questions \5\)....................
                                                               -----------------------------------------------------------------------------------------
        Subtotal PDM..........................................                56  ................              24.5             3,360            27,440
SRL:
    Benefit-Cost Determination................................                56                 7                 5               392             1,960
    Environment Review........................................                56                 7               7.5               392             2,940
    Project Narrative--Sub-grant Application..................                56                 8                12               448             5,376
                                                               -----------------------------------------------------------------------------------------
        Subtotal SRL..........................................                56  ................              24.5             1,232            10,276
                                                               -----------------------------------------------------------------------------------------
            Total.............................................                56  ................                98              5264            43,888
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Collection of Information
    The Property Acquisition and Relocation for Open Space (part 80) 
will govern property acquisitions for the creation of open space under 
all of FEMA mitigation grant programs authorized under both the 
Stafford Act and the National Flood Insurance Act of 1968, as amended. 
Acquisition and relocation of property for open space use is one of the 
most common mitigation activities, and is an eligible activity type 
authorized for Federal grant funds under all of FEMA mitigation grant 
programs. FEMA mitigation grant programs require all properties 
acquired with FEMA funds to be deed restricted and maintained as open 
space in perpetuity. This ensures that no future risks from hazards 
occur to life or structures on that property, and no future disaster 
assistance or insurance payments are made as a result of damages to 
that property. This new collection of information is necessary to 
establish uniform requirements for State and local implementation of 
acquisition activities, and to enforce open space maintenance and 
monitoring requirements for properties acquired with FEMA mitigation 
grant funds. This interim rule includes a conforming amendment to the 
HMGP to refer to the new part 80 for acquisition and relocation 
activities, and deletes Sec.  206.434(f).
    Title: Property Acquisition and Relocation for Open Space.
    Type of Information Collection: New Collection.
    OMB Number: 1660-New23.
    Form Numbers: None.
    Abstract: FEMA and State and local recipients of FEMA mitigation 
grant programs will use the information collected under the Property 
Acquisition requirements to implement acquisition activities under the 
terms of grant agreements for acquisition and relocation activities. 
FEMA and State/local grant recipients will also use the information to 
monitor and enforce the open space requirements for all properties 
acquired with FEMA mitigation grants.
    Affected Public: State, local, or Indian tribal government and 
individuals or households.
    Estimated Total Annual Burden Hours:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number of       Frequency of        Number of      Hour burden per    Total burden
                   Data collection activity                        respondents        responses         responses         response            hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Voluntary Participation Statement.............................                56                40                 1              2240              2440
Deed Restriction Requirements.................................                56                40                 4              2240              8960
Monitoring and Reporting Requirements.........................                56                 1                 4                56               224
Transfer Certification........................................  ................  ................  ................  ................  ................
Enforcement Notices...........................................  ................  ................  ................  ................  ................
                                                               -----------------------------------------------------------------------------------------
    Total.....................................................                56  ................                 9             4,536            11,424
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. Collection of Information
    The appeals process in Sec.  79.7(d) outlines the process by which 
any owner of a severe repetitive loss property may appeal the decision 
of FEMA to increase the chargeable insurance premium rate on property. 
The legislation that created the SRL program provides that any owner of 
a severe repetitive loss property who refuses an offer of mitigation 
may appeal the decision of FEMA to increase the chargeable insurance 
premium rate on that property. The process requires the owner to submit 
a written appeal, including any supporting documentation for their 
appeal to FEMA within 90 days of the notice of the insurance rate 
increase. This new collection of information is necessary to ensure 
that the property owner is given

[[Page 61736]]

opportunity to provide additional documentation that support one of the 
six allowable bases for appeal, outlined in the authorizing 
legislation, and implemented at Sec.  79.7(d).
    Title: Severe Repetitive Loss (SRL) Appeals Process.
    Type of Information Collection: New Collection.
    OMB Number: 1660-New36.
    Form Numbers: None.
    Abstract: The SRL program provides property owners with the ability 
to appeal an increase in their flood insurance premium rate if they 
refuse an offer of mitigation under this program. The property owner 
must submit information to FEMA to support their appeal.
    Affected Public: Federal Government, and individuals or households.
    Estimated Total Annual Burden Hours:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number of       Frequency of        Number of      Hour burden per    Total burden
                   Data collection activity                        respondents        responses         responses         response            hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Appeal written request and supporting documentation...........                10                 1                10                10               100
                                                               -----------------------------------------------------------------------------------------
    Total.....................................................                10  ................                10                10               100
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comments: Written comments are solicited 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 information collection, including the validity 
of the methodology and assumptions used; (c) enhance the quality, 
utility, and clarity of the information to be collected; and (d) 
minimize the burden of the collection of information on those who are 
to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technology, e.g., permitting 
electronic submission of responses. FEMA will continue to accept 
comments from interested persons through December 31, 2007. Submit 
comments by one of the methods provided in the ADDRESSES section at the 
beginning of this rule.
    Requests for additional information regarding FEMA's Paperwork 
Reduction Act requirements or copies of the information collection 
should be made to Chief, Records Management and Privacy, FEMA, 500 C 
Street, SW., Room 609, Washington, DC 20472, facsimile number (202) 
646-3347, or e-mail address [email protected].

G. 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.
    FEMA published a Federal Register notice on September 15, 2004, 69 
FR 55642, to initiate consultation with State and local officials, as 
well as members of the public in the formulation of this rule. 
Interested parties initially had until November 30, 2004, to submit 
written comments in response to the notice. FEMA extended the deadline 
for comments until December 7, 2004, and received 23 written comments 
from States, communities, and associations.
    On November 17, 2004, as part of the consultation process, FEMA 
held a meeting in Washington DC with representative officials of State 
and local governments; organizations representing emergency management, 
floodplain management, and insurance professions; and other interested 
parties.
    Both the written comments received and the oral comments presented 
at the meeting addressed aspects of the SRL program, including the 
circumstances affecting severe repetitive loss property owners, the 
mitigation offer process, the effects of insurance premium increases on 
individuals who refuse mitigation offers, and the appeals process. In 
the context of preparing this rule, FEMA reviewed and addressed all of 
the comments received in response to the Federal Register notice 
including the oral presentations made on November 17, 2004.
    FEMA has reviewed this rule under Executive Order 13132 and has 
concluded that the rule, which implements statutory requirements for a 
new SRL program as well as a potential increase in the Federal share 
for the FMA program, simplifies the planning requirements, and reflects 
a statutorily mandated change to the HMGP allocation, does not have 
federalism implications as defined by the Executive Order. FEMA has 
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.
    FEMA will continue to evaluate the new SRL and FMA programs, as 
well as the planning requirements, and will work with interested 
parties as FEMA implements the requirements of 44 CFR parts 59, 61, 78, 
79, 80, 201, and 206. In addition, FEMA actively encourages and 
solicits comments on this interim rule from interested parties, and 
FEMA will consider those comments in preparing the final rule.

H. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    FEMA has reviewed this interim rule under Executive Order 13175. In 
reviewing the portion of the interim rule which streamlines the 
mitigation planning requirements affecting Indian tribal governments, 
FEMA finds that, while it does have ``tribal implications'' as defined 
in Executive Order 13175, 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.
    FEMA has worked with Indian tribal governments while implementing 
its programs, and has modified its procedures to accommodate some of 
the issues relating to the tribal governments. This rule clarifies 
those procedures and streamlines the roles and responsibilities of 
Indian tribal governments in mitigation planning. In the February 26, 
2002 interim rule, Indian tribal governments were given the option of 
preparing either a State-level Mitigation Plan, or a Local-level 
Mitigation Plan depending on whether or not they intended to apply 
directly to FEMA as a grantee, or whether they

[[Page 61737]]

would apply through the State as a subgrantee. Neither of these options 
has sufficiently met the needs of the Indian tribal governments. The 
new interim rule establishes a specific planning requirement for Indian 
tribal governments that recognizes some of the unique aspects of these 
governments. The rule establishes requirements for Tribal Mitigation 
Plans for plans prepared and approved after December 3, 2007. The rule 
provides that plans prepared and approved under the preexisting rule, 
either under the State or local requirements, would also be recognized 
as Tribal Mitigation Plans. These older plans, however, would be 
required to meet the revised criteria when the original plan approval 
expires. This rule combines the appropriate aspects of State and local 
planning requirements into one section for Indian tribal governments. 
Prior to the preparation of this rule, FEMA discussed the planning 
requirements with many of the Indian tribal governments as they were 
developing their own plans, or while attending tribal training courses, 
and heard the concerns regarding the planning requirements.
    In conclusion, the interim rule does not impose substantial direct 
compliance costs on Indian tribal governments, nor does it preempt 
tribal law, impair treaty rights nor limit the self-governing powers of 
Indian tribal governments.

I. Congressional Review of Agency Rulemaking

    FEMA has sent this interim rule to the Congress and to the General 
Accountability Office under the Congressional Review of Agency 
Rulemaking Act, (Congressional Review Act), Public Law 104-121. This 
interim rule is not a ``major rule'' within the meaning of the 
Congressional Review Act. It implements statutory requirements creating 
the SRL program and statutory amendments providing for an increased 
Federal share for FMA projects affecting severe repetitive loss 
properties; streamlines and makes consistent the planning requirements 
for FMA and Indian tribal governments; and makes a technical update to 
reflect a statutory change in the HMGP allocation.
    The interim 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. 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 
FEMA imposes are a condition of Federal assistance or a duty arising 
from participation in a voluntary Federal program.

J. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') mandates that an agency 
conduct a RFA analysis when an agency is ``required by section 553 * * 
* to publish general notice of proposed rulemaking for any proposed 
rule * * * 5 U.S.C. 603(a). Accordingly, RFA analysis is not required 
when a rule is exempt from notice and comment rulemaking under 5 U.S.C. 
553(b). DHS has determined that good cause exists under 5 U.S.C. 
553(b)(B) to exempt this rule from the notice and comment requirements 
of 5 U.S.C. 553(b). Therefore no RFA analysis under 5 U.S.C. 603 is 
required for this rule.

K. Executive Order 12630, Taking of Private Property

    This rule will not affect a taking of private property or otherwise 
have taking implications under Executive Order 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights. In fact, Sec.  80.5(a) states that

[e]ligible acquisition projects are those where the property owner 
participates voluntarily, and the grantee/subgrantee will not use 
its eminent domain authority to acquire the property for the open 
space purposes should negotiations fail.

L. Executive Order 12988, Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

List of Subjects

44 CFR Part 59

    Flood insurance, Reporting and recordkeeping requirements.

44 CFR Part 61

    Flood insurance, Reporting and recordkeeping requirements.

44 CFR Parts 78 and 79

    Flood insurance, Grant programs.

44 CFR Part 80

    Acquisition and relocation for open space.

44 CFR Part 201

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

44 CFR Part 206

    Administrative practice and procedure, Coastal zone, Community 
facilities, Disaster assistance, Fire prevention, Grant programs--
housing and community development, Housing, Insurance, 
Intergovernmental relations, Loan programs--housing and community 
development, Natural resources, Penalties, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, the Federal Emergency 
Management Agency amends 44 CFR chapter I as set forth below:

PART 59--GENERAL PROVISIONS

0
1. The authority citation for part 59 continues to read as follows:

    Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 
1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31, 
1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.


0
2. Section 59.1 is amended by revising the definition of State as 
follows:


Sec.  59.1  Definitions.

* * * * *
    State means 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.
* * * * *

PART 61--INSURANCE COVERAGE AND RATES

0
3. The authority citation for part 61 continues to read as follows:

    Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 
1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31, 
1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.


0
4. In Sec.  61.9 add paragraphs (d) and (e) as follows:


Sec.  61.9  Establishment of chargeable rates.

* * * * *
    (d) Properties that meet the definition of Severe Repetitive Loss 
properties as defined in Sec.  79.2(g) of this subchapter, and who 
refuse an offer of mitigation pursuant to Sec.  79.7 of this subchapter 
are not eligible for the rates identified in paragraphs (a) through (c) 
of this section.
    (e) Properties leased from the Federal Government and located 
either on the

[[Page 61738]]

river-facing side of a dike, levee, or other riverine flood control 
structure, or seaward of any seawall or other coastal flood control 
structure are not eligible for the rates identified in paragraphs (a) 
through (c) of this section.

PART 78--FLOOD MITIGATION ASSISTANCE

0
5. The authority citation for part 78 is revised to read as follows:

    Authority: 6 U.S.C. 101; 42 U.S.C. 4001 et seq.; 42 U.S.C. 
4104c, 4104d; 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; E.O. 13286, 
68 FR 10619, 3 CFR, 2003 Comp., p. 166.


0
6. Revise Sec.  78.1(a) to read as follows:


Sec.  78.1  Purpose.

    (a) The purpose of this part is to prescribe actions, procedures, 
and requirements for administration of the Flood Mitigation Assistance 
(FMA) program, authorized by Sections 1366 and 1367 of the National 
Flood Insurance Act of 1968, 42 U.S.C. 4104c and 4104d. The rules in 
this part apply to the administration of funds awarded under the FMA 
program for which the application period opened prior to December 3, 
2007. On or after that date, the administration of funds awarded under 
FMA program shall be subject to the rules in part 79 of this 
subchapter.
* * * * *

0
7. Remove the undesignated center heading FEDERAL CRIME INSURANCE 
PROGRAM which precedes RESERVED PARTS 80-149.

0
8. Add part 79 to read as follows:

PART 79--FLOOD MITIGATION GRANTS

Sec.
79.1 Purpose.
79.2 Definitions.
79.3 Responsibilities.
79.4 Availability of funding.
79.5 Application process.
79.6 Eligibility.
79.7 Offers and appeals under the SRL program.
79.8 Allowable costs.
79.9 Grant administration.

    Authority: 6 U.S.C. 101; 42 U.S.C. 4001 et seq.; 42 U.S.C. 
4104c, 4104d; 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; E.O. 13286, 
68 FR 10619, 3 CFR, 2003 Comp., p. 166.


Sec.  79.1  Purpose.

    (a) The purpose of this part is to prescribe actions, procedures, 
and requirements for administration of the hazard mitigation grant 
programs made available under the National Flood Insurance Act of 1968, 
as amended, and the Flood Disaster Protection Act of 1973, as amended, 
42 U.S.C. 4001 et seq. The Severe Repetitive Loss (SRL) and Flood 
Mitigation Assistance (FMA) grant programs mitigate losses from floods, 
minimizing impacts to the National Flood Insurance Fund (NFIF). The 
rules in this part apply to the administration of funds under the SRL 
and FMA programs for which the application period opens on or after 
December 3, 2007. Prior to this date, the administration of funds under 
the FMA program shall be subject to the rules in part 78 of this 
subchapter.
    (b) The purpose of the SRL program is to:
    (1) Assist State and local governments in funding actions that 
reduce or eliminate the risk of flood damage to residential properties 
insured under the National Flood Insurance Program (NFIP) that meet the 
definition of severe repetitive loss property;
    (2) Reduce the need to increase flood insurance premiums of NFIP 
policyholders that would otherwise be required to pay for potential 
future repetitive claims associated with severe repetitive loss 
properties; and
    (3) Reduce loss of life, property damage, outlays for the NFIF, and 
Federal disaster assistance by reducing or eliminating the risk of 
flood damage to those insured properties that have historically 
experienced the most severe flood losses.
    (c) The purpose of the FMA program is to assist State and local 
governments in funding cost-effective actions that reduce or eliminate 
the risk of flood damage to buildings, manufactured homes, and other 
structures insured under the NFIP.


Sec.  79.2  Definitions.

    (a) Except as otherwise provided in this part, the definitions set 
forth in section 59.1 of this subchapter are applicable to this part.
    (b) Applicant is the State or Indian tribal government applying to 
FEMA for a grant, and which will be accountable for the use of the 
funds.
    (c) Community means:
    (1) A political subdivision, including any Indian tribe, authorized 
tribal organization, Alaskan native village or authorized native 
organization, that has zoning and building code jurisdiction over a 
particular area having special flood hazards, and is participating in 
the NFIP; or
    (2) A political subdivision of a State, or other authority that is 
designated by a political subdivision to develop and administer a 
mitigation plan.
    (d) Grantee means the State or Indian tribal government to which 
FEMA awards a grant 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.
    (e) Market Value is generally defined as the amount in cash, or on 
terms reasonably equivalent to cash, for which in all probability the 
property would have sold on the effective date of the valuation, after 
a reasonable exposure time on the open competitive market, from a 
willing and reasonably knowledgeable seller to a willing and reasonably 
knowledgeable buyer, with neither acting under any compulsion to buy or 
sell, giving due consideration to all available economic uses of the 
property at the time of the valuation.
    (f) Multifamily Property means a property consisting of 5 or more 
residences.
    (g) Severe Repetitive Loss Properties are defined as single or 
multifamily residential properties that are covered under an NFIP flood 
insurance policy and:
    (1) That have incurred flood-related damage for which 4 or more 
separate claims payments have been made, with the amount of each claim 
(including building and contents payments) exceeding $5,000, and with 
the cumulative amount of such claims payments exceeding $20,000; or
    (2) For which at least 2 separate claims payments (building 
payments only) have been made under such coverage, with cumulative 
amount of such claims exceeding the market value of the building.
    (3) In both instances, at least 2 of the claims must be within 10 
years of each other, and claims made within 10 days of each other will 
be counted as 1 claim.
    (h) Subapplicant means a State agency, community, or Indian tribal 
government submitting an application for planning or project activity 
to the applicant for assistance under the FMA or SRL programs. Upon 
grant award, the subapplicant is referred to as the subgrantee.
    (i) Subgrant means an award of financial assistance made under a 
grantee to an eligible subgrantee.
    (j) Subgrantee means the State agency, community, or Indian tribal 
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.
    (k) Administrator means the head of the Federal Emergency 
Management

[[Page 61739]]

Agency, or his/her designated representative, appointed under section 
503 of the Post-Katrina Emergency Management Reform Act of 2006 (Pub. 
L. 109-295). The term also refers to the Director as discussed in part 
2 of this chapter.
    (l) Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative, appointed under section 507 of the Post-Katrina 
Emergency Management Reform Act of 2006 (Pub. L. 109-295). The term 
also refers to Regional Directors as discussed in part 2 of this 
chapter.


Sec.  79.3  Responsibilities.

    (a) Federal Emergency Management Agency (FEMA). Administer and 
provide oversight to all FEMA-related hazard mitigation programs and 
grants, including:
    (1) Issue program implementation procedures, as necessary, which 
will include information on availability of funding;
    (2) Allocate funds to States for the FMA and for the SRL programs;
    (3) Award all grants to the grantee after evaluating subgrant 
applications for eligibility and ensuring compliance with applicable 
Federal laws, giving priority to such properties, or to the subset of 
such properties, as the Administrator may determine are in the best 
interest of the NFIF;
    (4) Provide technical assistance and training to State, local and 
Indian tribal governments regarding the mitigation and grants 
management process;
    (5) Review and approve State, Indian tribal, and local mitigation 
plans in accordance with part 201 of this chapter;
    (6) Comply with applicable Federal statutory, regulatory, and 
Executive Order requirements related to environmental and historic 
preservation compliance, including reviewing and supplementing, if 
necessary, the environmental analyses conducted by the State and 
subgrantee in accordance with part 10 of this chapter;
    (7) Establish and maintain an updated list of SRL properties and 
make such information available to States and communities; and
    (8) Notify owners of SRL properties that their properties meet the 
definition of a severe repetitive loss property and provide a summary 
of the opportunities and implications of being identified as such.
    (b) State. The State will serve as the applicant and grantee 
through a single Point of Contact (POC) for the FMA and SRL programs. 
The POC is a State agency that must have working knowledge of NFIP 
goals, requirements, and processes and ensure that the programs are 
coordinated with other mitigation activities at the State level. States 
will:
    (1) Have a FEMA approved Mitigation Plan in accordance with part 
201 of this chapter;
    (2) Review and submit local mitigation plans to the FEMA Regional 
Administrator for final review and approval;
    (3) Provide technical assistance and training to communities on 
mitigation planning, mitigation project activities, developing subgrant 
applications, and implementing approved subgrants;
    (4) Prioritize and recommend subgrant applications to be approved 
by FEMA, based on the State Mitigation Plan, other State evaluation 
criteria and the eligibility criteria described in Sec.  79.6;
    (5) Award FEMA-approved subgrants; and
    (6) Comply with program requirements under this part, grant 
management requirements identified under part 13 of this chapter, the 
grant agreement articles, and other applicable Federal, State, tribal 
and local laws and regulations.
    (c) Indian tribal governments. The Indian tribal government will 
coordinate all tribal activities relating to hazard evaluation and 
mitigation including:
    (1) Have a FEMA approved Tribal Mitigation Plan in accordance with 
Sec.  201.7 of this chapter;
    (2) A Federally Recognized Indian tribal government as defined by 
the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a, 
applying directly to FEMA for mitigation grant funding will assume the 
responsibilities of the ``State'' as the term is used in this part, as 
applicant or grantee, described in paragraphs (b)(3) through (6) of 
this section; and
    (3) A Federally Recognized Indian tribal government as defined by 
the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a, 
applying through the State, will assume the responsibilities of the 
community (as the subapplicant or subgrantee) described in paragraphs 
(d)(2) through (4) of this section.
    (d) Community. The community (referred to as both subapplicant and 
subgrantee) will:
    (1) Prepare and submit a FEMA-approved Local Mitigation Plan, 
consistent with the requirements of part 201 of this chapter;
    (2) Complete and submit subgrant applications to the State POC for 
FMA planning, project and management cost subgrants, and for SRL 
project and management cost subgrants;
    (3) Implement all approved subgrants; notifying each holder of a 
recorded interest in severe repetitive loss properties when an offer of 
mitigation assistance has been made under the SRL program, and when 
such offer has been refused; and
    (4) Comply with program requirements under this part, grant 
management requirements identified under part 13 of this chapter, the 
grant agreement articles, and other applicable Federal, State, tribal 
and local laws and regulations.


Sec.  79.4  Availability of funding.

    (a) Allocation. (1) For the amount made available for the SRL 
program, the Administrator will allocate the available funds to States 
each fiscal year based upon the percentage of the total number of 
severe repetitive loss properties located within that State. Ten 
percent of the total funds made available in any fiscal year will be 
made available to States and Indian tribal applicants that have at 
least 1 SRL property and that receive little or no allocation.
    (2) For the amount made available for the FMA program, the 
Administrator will allocate the available funds each fiscal year. Funds 
will be distributed based upon the number of NFIP policies, repetitive 
loss structures, and any other such criteria as the Administrator may 
determine are in the best interests of the NFIF.
    (i) A maximum of 7.5 percent of the amount made available in any 
fiscal year may be allocated for FMA planning grants nationally. A 
planning grant will not be awarded to a State or community more than 
once every 5 years, and an individual planning grant will not exceed 
$150,000 to any State agency applicant, or $50,000 to any community 
subapplicant. The total planning grant made in any fiscal year to any 
State, including all communities located in the State, will not exceed 
$300,000.
    (ii) The total amount of FMA project grant funds provided during 
any 5-year period will not exceed $10,000,000 to any State agency(s) or 
$3,300,000 to any community. The total amount of project grant funds 
provided to any State, including all communities located in the State 
will not exceed $20,000,000 during any 5-year period. The Administrator 
may waive the limits of this subsection for any 5-year period when a 
major disaster or emergency is declared pursuant to the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act for flood 
conditions.
    (b) Redistribution. Funds allocated to States who choose not to 
participate in

[[Page 61740]]

either the FMA or SRL program in any given year will be reallocated to 
participating States and Indian tribal applicants. Any funds allocated 
to a State, and the communities within the State, which have not been 
obligated within the timeframes established by the Administrator, shall 
be redistributed by the Administrator to other States and communities 
to carry out eligible activities in accordance with this part.
    (c) Cost share. All mitigation activities approved under the 
State's grant will be subject to the following cost-share provisions:
    (1) FEMA may contribute up to 75 percent of the eligible cost of 
activities for grants approved for funding; or
    (2) FEMA may contribute up to 90 percent of the cost of the 
eligible activities for each severe repetitive loss property for which 
grant amounts are provided if the State has an approved State 
Mitigation Plan meeting the repetitive loss requirements identified in 
Sec.  201.4(c)(3)(v) of this chapter at the time the project 
application is submitted;
    (3) For the FMA program only, of the non-Federal contribution, not 
more than one half will be provided from in-kind contributions.


Sec.  79.5  Application process.

    (a) Applicant or grantee. (1) States will be notified of the amount 
allocated to them for the SRL and FMA programs each fiscal year, along 
with the application timeframes.
    (2) The State will be responsible for soliciting applications from 
eligible communities, or subapplicants, and for reviewing and 
prioritizing applications prior to forwarding them to FEMA for review 
and award.
    (3) Participation in these flood mitigation grant programs is 
voluntary, and States may elect not to participate in either the SRL or 
FMA program in any fiscal year without compromising their eligibility 
in future years.
    (4) Indian tribal governments interested in applying directly to 
FEMA for either the FMA or SRL program grants should contact the 
appropriate FEMA Regional Administrator for application information.
    (b) Subapplicant or subgrantee. Participation in the SRL and the 
FMA program is voluntary, and communities may elect not to apply. 
Communities or other subapplicants who choose to apply must develop 
applications within the timeframes and requirements established by FEMA 
and must submit applications to the State.


Sec.  79.6  Eligibility.

    (a) Eligible applicants and subapplicants. (1) States, Indian 
tribal governments, and communities participating in the NFIP may apply 
for FMA planning and project grants and associated management costs.
    (2) States, Indian tribal governments, and communities 
participating in the NFIP may apply for SRL project grants and 
associated management costs.
    (3) Communities withdrawn, suspended, or not participating under 
part 60 of this subchapter of the NFIP are not eligible for either the 
FMA or SRL programs.
    (b) Plan requirement. (1) States must have an approved State 
Mitigation Plan meeting the requirements of Sec. Sec.  201.4 or 201.5 
of this chapter in order to apply for grants through the FMA or SRL 
programs. Indian tribal governments must have an approved plan meeting 
the requirements of part 201 of this chapter at the time of 
application.
    (2) In order to be eligible for FMA and SRL project grants, 
subapplicants must have an approved mitigation plan at the time of 
application in accordance with part 201 of this chapter that, at a 
minimum, addresses flood hazards.
    (c) Eligible activities. (1) Planning. FMA planning grants may be 
used to develop or update State, Indian tribal and/or local mitigation 
plans which meet the planning criteria outlined in part 201 of this 
chapter. FMA planning grants are limited to those activities necessary 
to develop or update the flood portion of any mitigation plan. Planning 
grants are not eligible for funding under the SRL program.
    (2) Projects. Projects funded under the SRL program are limited to 
those activities that specifically reduce or eliminate flood damages to 
severe repetitive loss properties. Projects funded under the FMA 
program are limited to activities that reduce flood damages to 
properties insured under the NFIP. For either program, applications 
involving any activities for which implementation has already been 
initiated or completed are not eligible for funding, and will not be 
considered. Eligible activities are:
    (i) Acquisition of real property from property owners, and 
demolition or relocation of buildings to convert the property to open 
space use in perpetuity, in accordance with part 80 of this subchapter;
    (ii) Demolition or relocation of structures to areas outside of the 
floodplain;
    (iii) Elevation of existing structures to at least base flood 
levels or higher, if required by FEMA or if required by any State or 
local ordinance, and in accordance with criteria established by the 
Administrator;
    (iv) Floodproofing of existing non-residential structures in 
accordance with the requirements of the NFIP or higher standards if 
required by FEMA or if required by any State or local ordinance, and in 
accordance with criteria established by the Administrator;
    (v) Floodproofing of historic structures as defined in Sec.  59.1 
of this subchapter;
    (vi) For SRL only, demolition and rebuilding of properties to at 
least base flood levels or higher, if required by FEMA or if required 
by any State or local ordinance, and in accordance with criteria 
established by the Administrator; and
    (vii) Minor physical localized flood reduction measures that lessen 
the frequency or severity of flooding and decrease predicted flood 
damages, and that do not duplicate the flood prevention activities of 
other Federal agencies. Major flood control projects such as dikes, 
levees, floodwalls, seawalls, groins, jetties, dams and large-scale 
waterway channelization projects are not eligible.
    (d) Minimum project criteria. In addition to being an eligible 
project type, mitigation grant projects must also:
    (1) Be in conformance with mitigation plans approved under part 201 
of this chapter for the State and community where the project is 
located;
    (2) Be in conformance with part 9 of this chapter, Floodplain 
management and protection of wetlands, part 10 of this chapter, 
Environmental considerations, Sec.  60.3 of this subchapter, Flood 
plain management criteria for flood-prone areas, and other applicable 
Federal, State, tribal, and local laws and regulations;
    (3) Be technically feasible;
    (4) Solve a problem independently, or constitute a functional 
portion of a long-term solution where there is assurance that the 
project as a whole will be completed. This assurance will include 
documentation identifying the remaining funds necessary to complete the 
project, and the timeframe for completing the project;
    (5) Be cost-effective and reduce the risk of future flood damage;
    (6) Consider long-term changes to the areas and entities it 
protects, and have manageable future maintenance and modification 
requirements. The subgrantee is responsible for the continued 
maintenance needed to preserve the hazard mitigation benefits of these 
measures; and

[[Page 61741]]

    (7) Not duplicate benefits available from another source for the 
same purpose or assistance that another Federal agency or program has 
more primary authority to provide.


Sec.  79.7  Offers and appeals under the SRL program.

    (a) Consultation. States and communities shall consult, to the 
extent practicable, and in accordance with criteria determined by the 
Administrator, with owners of the severe repetitive loss properties to 
select the most appropriate eligible mitigation activity. These 
consultations shall be initiated in the early stages of the project 
development, and shall continue throughout the process. After FEMA 
awards the project grant, the subgrantee shall continue to consult with 
the property owners to determine the specific conditions of the offer.
    (b) Mitigation offer. After FEMA awards the grant and the 
subgrantee completes final consultations with the property owners, the 
subgrantee shall develop and present official offers to the property 
owners participating in the mitigation activities.
    (1) The offer shall include all pertinent information regarding the 
mitigation activity, including a detailed description of the activity 
(e.g. property acquisition, elevation), the responsibilities of and 
benefits to the property owner, a summary of the consultation process, 
timeframes, and the consequences of refusing such offer. For open space 
acquisitions, it will also include the market value of the property, 
the basis for the purchase offer, and the final offer amount. The offer 
will also clearly state that the property owner's participation in the 
SRL program is voluntary.
    (2) The subgrantee will send the written offer to the property 
owner's current mailing address as a certified letter, along with a 
copy to the appropriate FEMA Regional Administrator. In addition, the 
subgrantee will notify each holder of a recorded interest on the 
property when such offer is extended, along with the identification of 
the mitigation assistance being offered.
    (3) The property owner will have 45 days from the date of the 
letter to accept or refuse the offer of mitigation assistance in 
writing. Failure to respond in writing within this time period will be 
deemed a refusal of the offer.
    (c) Insurance increases due to refusal of offer. In any case in 
which the property owner refuses an offer of mitigation assistance made 
through the SRL program, the Administrator shall provide written notice 
that the chargeable insurance rates with respect to the property will 
increase effective on the next renewal of the policy.
    (1) The chargeable insurance premium rate shall be increased to the 
amount equal to 150 percent of the chargeable rate for the property at 
the time that the offer was made, as adjusted by any other premium 
adjustments otherwise applicable to the property. Each time there is 
another claim payment in excess of $1,500, the chargeable premium rate 
for that property shall be the amount equal to 150 percent over the 
chargeable rate at the time of every such claim, as adjusted by any 
other premium adjustments otherwise applicable to the property. The 
increases shall end when the actuarial rate is reached.
    (2) Upon each renewal or modification of the flood insurance 
coverage, the property owner will be able to accept the original 
mitigation offer, if the community, through the State, forwards the 
request to FEMA, and if sufficient funds are available.
    (d) Appeals of insurance rate increases. Any owner of a severe 
repetitive loss property may appeal the decision to increase the 
chargeable insurance premium rate as described in paragraph (c) of this 
section by submitting a written appeal, including supporting 
documentation that is postmarked or delivered to the appropriate FEMA 
Regional Administrator within 90 days of the date of the notice of the 
insurance increase. The increase in the amount of chargeable premium 
rate for flood insurance coverage for the property will be suspended 
pending the outcome of the appeal.
    (1) Appeals must be based upon one or more of the following 
grounds. The property owner must include documentation to support each 
ground serving as a basis for the appeal:
    (i) The offered mitigation activity is an acquisition and the 
property owner would be unable to purchase a replacement of the primary 
residence that is of comparable value and that is functionally 
equivalent. The property owner must document the actions taken to 
locate such replacement dwelling and demonstrate that no such dwelling 
is available.
    (ii)(A) The amount of Federal funds offered for a mitigation 
activity, when combined with funds from the required non-Federal 
sources, would not cover the actual eligible costs of the mitigation 
activity contained in the mitigation offer, based on independent 
information. In the case of an acquisition, the purchase offer is not 
an accurate estimation of the market value of the property, based on 
independent information.
    (B) For a mitigation activity other than acquisition, the property 
owner must submit independent estimates from professional engineers or 
registered architects to support this claim. For an acquisition, the 
property owner must submit an appraisal from a qualified appraiser to 
support this claim, and valuations will be considered by a review 
appraiser.
    (iii) The offered mitigation activity would diminish the integrity 
of a historic district, site, building, or object's significant 
historic characteristics to the extent where the historic resource 
would lose its status as listed or eligible for inclusion on the 
National Register of Historic Places. The property owner must submit 
appropriate documentation from the State Historic Preservation Officer/
Tribal Historic Preservation Officer to support this claim.
    (iv) For a multifamily property: Each of the flood insurance claims 
payments that served as the basis for its designation as a severe 
repetitive loss property must have resulted directly from the actions 
of a third party in violation of Federal, State, or local law, 
ordinance, or regulation. The property owner(s) must submit appropriate 
evidence, documentation, or data to support this claim.
    (v) The property owner relied upon FEMA Flood Insurance Rate Maps 
(FIRMs) that were current at the time the property was purchased, and 
the effective FIRM and associated Flood Insurance Study (FIS) did not 
indicate that the property was located in an area having special flood 
hazards. The property owner must produce the dated FIRM and FIS in 
effect at the time the property was purchased to support this claim.
    (vi) An alternative mitigation activity would be at least as cost 
effective as the offered mitigation activity. The property owner must 
submit documentation of the costs for a technically feasible and 
eligible alternative mitigation activity based on estimates from 
qualified appraisers, professional engineers, or registered architects, 
and information and documentation demonstrating the cost effectiveness 
using a FEMA approved methodology to support this claim.
    (2) The FEMA Regional Administrator will conduct an initial review 
of each appeal that is filed on a timely basis to determine if the 
appeal complies with this section and includes sufficient documentation 
to be evaluated. The Regional Administrator may reject an appeal on 
initial review if it is made on

[[Page 61742]]

a basis other than those listed in paragraph (d)(1) of this section; if 
the property owner does not provide sufficient documentation, 
including, if applicable, supplemental information requested by the 
Regional Administrator by the deadline established by the Regional 
Administrator, which shall not exceed the timeframe described in 
paragraph (d) of this section; or if the appeal otherwise fails to 
comply with this section.
    (3) If, upon initial review, the Regional Administrator determines 
that the basis for the offered mitigation activity was erroneous on its 
face and the appeal can be resolved in favor of the property owner, the 
appeal will be closed and no insurance increase will apply to the 
property. All other cases will be referred to the Administrator for 
assignment to an independent third party for review. The independent 
third party shall make a final determination on each appeal within 90 
days of the date on which FEMA receives the appeal. As a low cost 
option, the property owner may request that the Administrator 
substitute a reviewer from FEMA's Alternative Dispute Resolution Office 
for the independent third party.
    (4) A property owner who brings an appeal will be responsible for 
paying his/her attorneys' fees and costs to gather the necessary 
documentation and data to demonstrate the ground(s) for the appeal. 
Attorneys' fees and costs cannot be awarded by the independent third 
party.
    (5) If the property owner prevails on appeal, the independent third 
party shall require the Administrator to charge the risk premium rate 
for flood insurance coverage of the property at the amount paid prior 
to the mitigation offer, as adjusted by any other premium adjustments 
otherwise applicable to the property. If the independent third party 
hearing the appeal is compensated for such service, the NFIF shall bear 
the costs of such compensation.
    (6) If the property owner loses the appeal, the Administrator shall 
promptly increase the chargeable risk premium rate for flood insurance 
coverage of the property to the amount established pursuant to 
paragraph (c) of this section, and shall collect from the property 
owner the amount necessary to cover the stay of the applicability of 
such increased rates while the appeal was pending. If FEMA does not 
receive the additional premium by the date it is due, the amount of 
coverage will be reduced to match the amount of premium payment 
received. If the independent third party hearing the appeal is 
compensated for such service, the property owner shall bear the costs 
of such compensation.


Sec.  79.8  Allowable costs.

    (a) General. General policies for determining allowable costs are 
addressed in Sec. Sec.  13.4, 13.6, and 13.22 of this chapter. 
Allowable costs are explained in this paragraph.
    (1) Eligible Management Costs--(i) Grantee. States are eligible to 
receive management costs consisting of a maximum of 10 percent of the 
planning and project activities awarded to the State, each fiscal year 
under FMA and SRL, respectively. These costs must be included in the 
application to FEMA. An Indian tribal government applying directly to 
FEMA is eligible for management costs consisting of a maximum of 10 
percent of grants awarded for planning and project activities under the 
SRL and FMA programs respectively.
    (ii) Subgrantee. Subapplicants may include a maximum of 5 percent 
of the total funds requested for their subapplication for management 
costs to support the implementation of their planning or project 
activity. These costs must be included in the subapplication to the 
State.
    (2) Indirect costs. Indirect costs of administering the FMA and SRL 
programs are eligible as part of the 10 percent management costs for 
the grantee or the 5 percent management costs of the subgrantee, but in 
no case do they make the recipient eligible for additional management 
costs that exceed the caps identified in paragraph (a)(1) of this 
section. In addition, all costs must be in accordance with the 
provisions of part 13 of this chapter and Office of Management and 
Budget Circular A-87.
    (b) Pre-award costs. FEMA may fund eligible pre-award planning or 
project costs at its discretion and as funds are available. Grantees 
and subgrantees may be reimbursed for eligible pre-award costs for 
activities directly related to the development of the project or 
planning proposal. These costs can only be incurred during the open 
application period of the respective grant program. Costs associated 
with implementation of the activity but incurred prior to grant award 
are not eligible. Therefore, activities where implementation is 
initiated or completed prior to award are not eligible and will not be 
reimbursed.
    (c) Duplication of benefits. Grant funds may not duplicate benefits 
received by or available to applicants, subapplicants and project 
participants from insurance, other assistance programs, legal awards, 
or any other source to address the same purpose. Such individual or 
entity must notify the grantee and FEMA of all benefits that it 
receives or anticipates from other sources for the same purpose. FEMA 
will reduce the subgrant award by the amounts available for the same 
purpose from another source.
    (d) Negligence or other tortious conduct. FEMA grant funds are not 
available where an applicant, subapplicant, other project participant, 
or third party's negligence or intentional actions contributed to the 
conditions to be mitigated. If the applicant, subapplicant, or project 
participant suspects negligence or other tortious conduct by a third 
party for causing such condition, they are responsible for taking all 
reasonable steps to recover all costs attributable to the tortious 
conduct of the third party. FEMA generally considers such amounts to be 
duplicated benefits available for the same purpose, and will treat them 
consistent with paragraph (c) of this section.
    (e) FEMA grant funds are not available to satisfy or reimburse for 
legal obligations, such as those imposed by a legal settlement, court 
order, or State law.


Sec.  79.9  Grant administration.

    (a) The Grantee must follow FEMA grant requirements, including 
submission of performance and financial status reports, and shall 
follow adequate competitive procurement procedures. In addition, 
grantees are responsible for ensuring that all subgrantees are aware of 
and follow the requirements contained in part 13 of this chapter.
    (b) During the implementation of an approved grant, the State POC 
may find that actual costs are exceeding the approved award amount. 
While there is no guarantee of additional funding, FEMA will only 
consider requests made by the State POC to pay for such overruns if:
    (1) Funds are available to meet the requested increase in funding;
    (2) The amended grant award meets the cost-share requirements 
identified in this section; and
    (3) The total amount obligated to the State does not exceed the 
maximum funding amounts set in Sec.  79.4(a)(2).
    (c) Grantees may use cost underruns from ongoing subgrants to 
offset overruns incurred by another subgrant(s) awarded under the same 
grant. All costs for which funding is requested must have been included 
in the original application's cost estimate.
    (d) For all cost overruns that exceed the amount approved under the 
grant,

[[Page 61743]]

and which require additional Federal funds, the State POC shall submit 
a written request with a recommendation, including a justification for 
the additional funding to the Regional Administrator for a 
determination. If approved, the Regional Administrator shall increase 
the grant through an amendment to the original award document.
    (e) At the time of closeout, FEMA will recapture any funds provided 
to a State or a community under these programs if the applicant has not 
provided the appropriate matching funds, the approved project has not 
been completed within the timeframes specified in the grant agreement, 
or the completed project does not meet the criteria specified in this 
part.

0
9. Add part 80 to read as follows:

PART 80--PROPERTY ACQUISITION AND RELOCATION FOR OPEN SPACE

Subpart A--General
Sec.
80.1 Purpose and scope.
80.3 Definitions.
80.5 Roles and responsibilities.
Subpart B--Requirements Prior to Award
80.7 General.
80.9 Eligible and ineligible costs.
80.11 Project eligibility.
80.13 Application information.
Subpart C--Post-Award Requirements
80.15 General.
80.17 Project implementation.
80.19 Land use and oversight.
Subpart D--After the Grant Requirements
80.21 Closeout requirements.

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5206; the National Flood 
Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq.; 
Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., 
p. 329; Homeland Security Act of 2002, 6 U.S.C. 101; E.O. 12127, 44 
FR 19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 
1979 Comp., p. 412; E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 
166.

 Subpart A--General


Sec.  80.1  Purpose and scope.

    This part provides guidance on the administration of FEMA 
mitigation assistance for projects to acquire property for open space 
purposes under all FEMA hazard mitigation assistance programs. It 
provides information on the eligibility and procedures for implementing 
projects for acquisition and relocation of at-risk properties from the 
hazard area to maintain the property for open space purposes. This part 
applies to property acquisition for open space project awards made 
under any FEMA hazard mitigation assistance program. This part 
supplements general program requirements of the funding grant program 
and must be read in conjunction with the relevant program regulations 
and guidance available at http://www.fema.gov. This part, with the 
exception of Sec.  80.19 Land use and oversight, applies to projects 
for which the funding program application period opens or for which 
funding is made available pursuant to a major disaster declared on or 
after December 3, 2007. Prior to that date, applicable program 
regulations and guidance in effect for the funding program (available 
at http://www.fema.gov) shall apply. Section 80.19 Land use and 
oversight apply as of December 3, 2007 to all FEMA funded acquisitions 
for the purpose of open space.


Sec.  80.3  Definitions.

    (a) Except as noted in this part, the definitions applicable to the 
funding program apply to implementation of this part. In addition, for 
purposes of this part:
    (b) Applicant is the State or Indian tribal government applying to 
FEMA for a grant, and which will be accountable for the use of the 
funds.
    (c) Grantee means the State or Indian tribal government to which 
FEMA awards a grant 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.
    (d) Market Value is generally defined as the amount in cash, or on 
terms reasonably equivalent to cash, for which in all probability the 
property would have sold on the effective date of the valuation, after 
a reasonable exposure time on the open competitive market, from a 
willing and reasonably knowledgeable seller to a willing and reasonably 
knowledgeable buyer, with neither acting under any compulsion to buy or 
sell, giving due consideration to all available economic uses of the 
property at the time of the valuation.
    (e) National of the United States means a person within the meaning 
of the term as defined in the Immigration and Nationality Act, 8 U.S.C. 
section 1101(a)(22).
    (f) Purchase offer is the initial value assigned to the property, 
which is later adjusted by applicable additions and deductions, 
resulting in a final offer amount to a property owner.
    (g) Qualified alien means a person within the meaning of the term 
as defined at 8 U.S.C. 1641.
    (h) ``Qualified conservation organization'' means a qualified 
organization with a conservation purpose pursuant to 26 CFR 1.170A-14 
and applicable implementing regulations, that is such an organization 
at the time it acquires the property interest and that was such an 
organization at the time of the major disaster declaration, or for at 
least 2 years prior to the opening of the grant application period.
    (i) Subapplicant means the entity that submits an application for 
FEMA mitigation assistance to the State or Indian tribal applicant/
grantee. With respect to open space acquisition projects under the 
Hazard Mitigation Grant Program (HMGP), this term has the same meaning 
as given to the term ``applicant'' in part 206, subpart N of this 
chapter. Upon grant award, the subapplicant is referred to as the 
subgrantee.
    (j) Subgrant means an award of financial assistance made under a 
grantee to an eligible subgrantee.
    (k) Subgrantee means the State agency, community, or Indian tribal 
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.
    (l) Administrator means the head of the Federal Emergency 
Management Agency, or his/her designated representative, appointed 
under section 503 of the Post-Katrina Emergency Management Reform Act 
of 2006 (Pub. L. 109-295). The term also refers to the Director as 
discussed in part 2 of this chapter.
    (m) Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative, appointed under section 507 of the Post-Katrina 
Emergency Management Reform Act of 2006 (Pub. L. 109-295). The term 
also refers to Regional Directors as discussed in part 2 of this 
chapter.


Sec.  80.5  Roles and responsibilities.

    The roles and responsibilities of FEMA, the State, the 
subapplicant/subgrantee, and participating property owners in the 
particular context of mitigation projects for the purpose of creating 
open space include the activities in this section. These are in 
addition to grants management roles and responsibilities identified in 
regulations and guidance of the program funding the project (available 
at http://www.fema.gov) and other responsibilities specified in this 
part.
    (a) Federal roles and responsibilities. Oversee property 
acquisition activities undertaken under FEMA mitigation grant programs, 
including:

[[Page 61744]]

    (1) Providing technical assistance to the applicant/grantee to 
assist in implementing project activities in compliance with this part;
    (2) Reviewing applications for eligibility and compliance with this 
part;
    (3) Reviewing proposals for subsequent transfer of a property 
interest and approving appropriate transferees;
    (4) Making determinations on the compatibility of proposed uses 
with the open space purpose, in accordance with Sec.  80.19;
    (5) Complying with applicable Federal statutory, regulatory, and 
Executive Order requirements related to environmental and historic 
preservation compliance, including reviewing and supplementing, if 
necessary, environmental analyses conducted by the State and subgrantee 
in accordance with part 10 of this chapter;
    (6) Providing no Federal disaster assistance, flood insurance 
claims payments, or other FEMA assistance with respect to the property 
or any open-space related improvements, after the property interest 
transfers; and
    (7) Enforcing the requirements of this part and the deed 
restrictions to ensure that the property remains in open space use in 
perpetuity.
    (b) State (applicant/grantee) roles and responsibilities. Serve as 
the point of contact for all property acquisition activities by 
coordinating with the subapplicant/subgrantee and with FEMA to ensure 
that the project is implemented in compliance with this part, 
including:
    (1) Providing technical assistance to the subapplicant/subgrantee 
to assist in implementing project activities in compliance with this 
part;
    (2) Ensuring that applications are not framed in a manner that has 
the effect of circumventing any requirements of this part;
    (3) Reviewing the application to ensure that the proposed activity 
complies with this part, including ensuring that the property 
acquisition activities remain voluntary in nature, and that the 
subgrantee and property owners are made aware of such;
    (4) Submitting to FEMA subapplications for proposed projects in 
accordance with the respective program schedule and programmatic 
requirements, and including all the requisite information to enable 
FEMA to determine the eligibility, technical feasibility, cost 
effectiveness, and environmental and historic preservation compliance 
of the proposed projects;
    (5) Reviewing proposals for subsequent transfer of property 
interest and obtaining FEMA approval of such transfers; and ensuring 
that all uses proposed for the property are compatible with open space 
project purposes;
    (6) Making no application for, nor providing, Federal disaster 
assistance or other FEMA assistance for the property or any open-space 
related improvements, after the property interest transfers;
    (7) Enforcing the terms of this part and the deed restrictions to 
ensure that the property remains in open space use in perpetuity; and
    (8) Reporting on property compliance with the open space 
requirements after the grant is awarded.
    (c) Subapplicant/Subgrantee roles and responsibilities. Coordinate 
with the applicant/grantee and with the property owners to ensure that 
the project is implemented in compliance with this part, including:
    (1) Submitting all applications for proposed projects in accordance 
with the respective program schedule and programmatic requirements, and 
including all the requisite information to enable the applicant/grantee 
and FEMA to determine the eligibility, technical feasibility, cost 
effectiveness, and environmental and historic preservation compliance 
of the proposed projects;
    (2) Ensuring that applications are not framed in a manner that has 
the effect of circumventing any requirements of this part;
    (3) Coordinating with the property owners to ensure they understand 
the benefits and responsibilities of participating in the project, 
including that participation in the project is voluntary, and that the 
property owner(s) are made aware of such;
    (4) Developing the application and implementing property 
acquisition activities in compliance with this part, and ensuring that 
all terms of the deed restrictions and grant award are enforced;
    (5) Ensuring fair procedures and processes are in place to 
compensate property owners and tenants affected by the purchase of 
property; such as determining property values and/or the amount of the 
mitigation offer, and reviewing property owner disputes regarding such 
offers;
    (6) Making no application for Federal disaster assistance, flood 
insurance, or other FEMA benefits for the property or any open-space 
related improvements, after the property interest transfers;
    (7) Taking and retaining full property interest, consistent with 
this part; or if transferring such interest, obtaining approval of the 
grantee and FEMA;
    (8) Submitting to the grantee and FEMA proposed uses on the 
property for open space compatibility determinations; and
    (9) Monitoring and reporting on property compliance after the grant 
is awarded.
    (d) Participating property owner roles and responsibilities. Notify 
the subapplicant/subgrantee of its interest to participate, provide 
information to the subapplicant/subgrantee, and take all required 
actions necessary for the completion of the grant application and the 
implementation of property acquisition activities in accordance with 
this part.

Subpart B--Requirements Prior to Award


Sec.  80.7  General.

    A project involving property acquisition or the relocation of 
structures for open space is eligible for hazard mitigation assistance 
only if the subapplicant meets the pre-award requirements set forth in 
this subpart. A project may not be framed in a manner that has the 
effect of circumventing the requirements of this subpart.


Sec.  80.9  Eligible and ineligible costs.

    (a) Allowable costs. Eligible project costs may include 
compensation for the value of structures, for their relocation or 
demolition, for associated land, and associated costs. For land that is 
already held by an eligible entity, compensation for the land is not an 
allowable cost, but compensation for development rights may be 
allowable.
    (b) Pre-award costs. FEMA may fund eligible pre-award project costs 
at its discretion and as funds are available. Grantees and subgrantees 
may be reimbursed for eligible pre-award costs for activities directly 
related to the development of the project proposal. These costs can 
only be incurred during the open application period of the respective 
grant program. Costs associated with implementation of the project but 
incurred prior to grant award are not eligible. Therefore, activities 
where implementation is initiated or completed prior to award are not 
eligible and will not be reimbursed.
    (c) Duplication of benefits. Grant funds may not duplicate benefits 
received by or available to applicants, subapplicants and other project 
participants from insurance, other assistance programs, legal awards, 
or any other source to address the same purpose. Such individual or 
entity must notify the subapplicant and FEMA of all benefits that it 
receives, anticipates, or has available from other sources for the

[[Page 61745]]

same purpose. FEMA will reduce the subgrant award by the amounts 
available for the same purpose from another source.
    (d) Negligence or other tortious conduct. FEMA acquisition funds 
are not available where an applicant, subapplicant, other project 
participant, or third party's negligence or intentional actions 
contributed to the conditions to be mitigated. If the applicant, 
subapplicant, or project participant suspects negligence or other 
tortious conduct by a third party for causing such condition, they are 
responsible for taking all reasonable steps to recover all costs 
attributable to the tortious conduct of the third party. FEMA generally 
considers such amounts to be duplicated benefits available for the same 
purpose, and will treat them consistent with paragraph (c) of this 
section.
    (e) FEMA mitigation grant funds are not available to satisfy or 
reimburse for legal obligations, such as those imposed by a legal 
settlement, court order, or State law.


Sec.  80.11  Project eligibility.

    (a) Voluntary participation. Eligible acquisition projects are 
those where the property owner participates voluntarily, and the 
grantee/subgrantee will not use its eminent domain authority to acquire 
the property for the open space purposes should negotiations fail.
    (b) Acquisition of improved properties. Eligible properties are 
those with at-risk structures on the property, including those that are 
damaged or destroyed due to an event. In some cases, undeveloped, at-
risk land adjacent to an eligible property with existing structures may 
be eligible.
    (c) Subdivision restrictions. The land may not be subdivided prior 
to acquisition except for portions outside the identified hazard area, 
such as the Special Flood Hazard Area or any risk zone identified by 
FEMA.
    (d) Subapplicant property interest. To be eligible, the 
subapplicant must acquire or retain fee title (full property interest) 
as part of the project implementation. A pass through of funds from an 
eligible entity to an ineligible entity must not occur.
    (e) Hazardous materials. Eligible properties include only those 
that are not contaminated with hazardous materials, except for 
incidental demolition and household hazardous waste.
    (f) Open space restrictions. Property acquired or from which a 
structure is removed must be dedicated to and maintained as open space 
in perpetuity consistent with this part.


Sec.  80.13  Application information.

    (a) An application for acquisition of property for the purpose of 
open space must include:
    (1) A photograph that represents the appearance of each property 
site at the time of application;
    (2) Assurances that the subapplicant will implement the project 
grant award in compliance with subparts C and D of this part;
    (3) The deed restriction language, which shall be consistent with 
the FEMA model deed restriction that the local government will record 
with the property deeds. Any variation from the model deed restriction 
language can only be made with prior approval from FEMA's Office of 
General Counsel;
    (4) The documentation of voluntary interest signed by each property 
owner, which must include that the subapplicant has informed them in 
writing that it will not use its eminent domain authority for the open 
space purpose; and
    (5) Assurance that the subject property is not part of an intended, 
planned, or designated project area for which the land is to be 
acquired by a certain date, and that local and State governments have 
no intention to use the property for any public or private facility in 
the future inconsistent with this part;
    (6) If the applicant is offering pre-event value: certification 
that the property owner is a National of the United States or qualified 
alien; and
    (7) Other information as determined by the Administrator.
    (b) Consultation regarding other ongoing Federal activities. (1) 
The subapplicant must demonstrate that it has consulted with the United 
States Army Corps of Engineers (USACE) regarding the subject land's 
potential future use for the construction of a levee system. The 
subapplicant must also demonstrate that it has, and will, reject any 
future consideration of such use if it accepts FEMA assistance to 
convert the property to permanent open space.
    (2) The subapplicant must demonstrate that it has coordinated with 
its State Department of Transportation to ensure that no future, 
planned modifications, improvements, or enhancements to Federal aid 
systems are under consideration that will affect the subject property.
    (c) Restriction on alternate properties. Changes to the properties 
in an approved mitigation project will be considered by FEMA but not 
approved automatically. The subapplicant must identify the alternate 
properties in the project application and each alternate property must 
meet eligibility requirements in order to be considered.

Subpart C--Post-Award Requirements


Sec.  80.15  General.

    A project involving property acquisition or the relocation of 
structures for open space must be implemented consistent with the 
requirements set forth in this subpart.


Sec.  80.17  Project implementation.

    (a) Hazardous materials. The subgrantee shall take steps to ensure 
it does not acquire or include in the project properties contaminated 
with hazardous materials by seeking information from property owners 
and from other sources on the use and presence of contaminants 
affecting the property from owners of properties that are or were 
industrial or commercial, or adjacent to such. A contaminated property 
must be certified clean prior to participation. This excludes permitted 
disposal of incidental demolition and household hazardous wastes. FEMA 
mitigation grant funds may not be used for clean up or remediation of 
contaminated properties.
    (b) Clear title. The subgrantee will obtain a title insurance 
policy demonstrating that fee title conveys to the subgrantee for each 
property to ensure that it acquires only a property with clear title. 
The property interest generally must transfer by a general warranty 
deed. Any incompatible easements or other encumbrances to the property 
must be extinguished before acquisition.
    (c) Purchase offer and supplemental payments. (1) The amount of 
purchase offer is the current market value of the property or the 
market value of the property immediately before the relevant event 
affecting the property (``pre-event'').
    (i) The relevant event for Robert T. Stafford Disaster Relief and 
Emergency Assistance Act assistance under HMGP is the major disaster 
under which funds are available; for assistance under the Pre-disaster 
Mitigation program (PDM) (42 U.S.C. 5133), it is the most recent major 
disaster. Where multiple disasters have affected the same property, the 
grantee and subgrantee shall determine which is the relevant event.
    (ii) The relevant event for assistance under the National Flood 
Insurance Act is the most recent event resulting in a National Flood 
Insurance Program (NFIP) claim of at least $5000.
    (2) For acquisition of properties under the Severe Repetitive Loss 
program under part 79 of this subchapter, the purchase offer is not 
less than the

[[Page 61746]]

greatest of the amount in paragraph (c)(1) of this section; the 
original purchase price paid by the participating property owner 
holding the flood insurance policy; or the outstanding amount of any 
loan to the participating property owner, which is secured by a 
recorded interest in the property at the time of the purchase offer.
    (3) The grantee should coordinate with the subgrantee in their 
determination of whether the valuation should be based on pre-event or 
current market value. Generally, the same method to determine market 
value should be used for all participants in the project.
    (4) A property owner who did not own the property at the time of 
the relevant event, or who is not a National of the United States or 
qualified alien, is not eligible for a purchase offer based on pre-
event market value of the property. Subgrantees will ask each 
participating property owner to certify that they are either a National 
of the United States or qualified alien before offering pre-event 
market value for the property.
    (5) Certain tenants who must relocate as a result of the project 
are entitled to relocation benefits under the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act (such as moving 
expenses, replacement housing rental payments, and relocation 
assistance advisory services) in accordance with 49 CFR part 24.
    (6) If a purchase offer for a residential property is less than the 
cost of the homeowner-occupant to purchase a comparable replacement 
dwelling outside the hazard-prone area in the same community, the 
subgrantee for funding under the Severe Repetitive Loss program 
implemented at part 79 of this subchapter shall make available a 
supplemental payment to the homeowner-occupant to apply to the 
difference. Subgrantees for other mitigation grant programs may make 
such a payment available in accordance with criteria determined by the 
Administrator.
    (7) The subgrantee must inform each property owner, in writing, of 
what it considers to be the market value of the property, the method of 
valuation and basis for the purchase offer, and the final offer amount. 
The offer will also clearly state that the property owner's 
participation in the project is voluntary.
    (d) Removal of Existing Buildings. Existing incompatible facilities 
must be removed by demolition or by relocation outside of the hazard 
area within 90 days of settlement of the property transaction. The FEMA 
Regional Administrator may grant an exception to this deadline only for 
a particular property based upon written justification if extenuating 
circumstances exist, but shall specify a final date for removal.
    (e) Deed Restriction. The subgrantee, upon settlement of the 
property transaction, shall record with the deed of the subject 
property notice of applicable land use restrictions and related 
procedures described in this part, consistent with FEMA model deed 
restriction language.


Sec.  80.19  Land use and oversight.

    This section applies to acquisitions for open space projects to 
address flood hazards. If the Administrator determines to mitigate in 
other circumstances, he/she will adapt the provisions of this section 
as appropriate.
    (a) Open space requirements. The property shall be dedicated and 
maintained in perpetuity as open space for the conservation of natural 
floodplain functions.
    (1) These uses may include: Parks for outdoor recreational 
activities; wetlands management; nature reserves; cultivation; grazing; 
camping (except where adequate warning time is not available to allow 
evacuation); unimproved, unpaved parking lots; buffer zones; and other 
uses FEMA determines compatible with this part.
    (i) Allowable uses generally do not include: Walled buildings, 
levees, dikes, or floodwalls, paved roads, highways, bridges, 
cemeteries, landfills, storage of any hazardous or toxic materials, 
above or below ground pumping and switching stations, above or below 
ground storage tanks, paved parking, off-site fill or other uses that 
obstruct the natural and beneficial functions of the floodplain.
    (ii) In the rare circumstances where the Administrator has 
determined competing Federal interests were unavoidable and has 
analyzed floodplain impacts for compliance with Sec.  60.3 of this 
subchapter or higher standards, the Administrator may find only USACE 
projects recognized by FEMA in 2000 and improvements to pre-existing 
Federal-aid transportation systems to be allowable uses.
    (2) No new structures or improvements will be built on the property 
except as indicated below:
    (i) A public facility that is open on all sides and functionally 
related to a designated open space or recreational use;
    (ii) A public restroom; or
    (iii) A structure that is compatible with open space and conserves 
the natural function of the floodplain, which the Administrator 
approves in writing before the construction of the structure begins.
    (3) Any improvements on the property shall be in accordance with 
proper floodplain management policies and practices. Structures built 
on the property according to paragraph (a)(2) of this section shall be 
floodproofed or elevated to at least the base flood level plus 1 foot 
of freeboard, or greater, if required by FEMA, or if required by any 
State or local ordinance, and in accordance with criteria established 
by the Administrator.
    (4) After the date of property settlement, no Federal entity or 
source may provide disaster assistance for any purpose with respect to 
the property, nor may any application for such assistance be made to 
any Federal entity or source.
    (5) The property is not eligible for coverage under the NFIP for 
damage to structures on the property occurring after the date of the 
property settlement, except for pre-existing structures being relocated 
off the property as a result of the project.
    (b) Subsequent transfer. After acquiring the property interest, the 
subgrantee, including successors in interest, shall convey any interest 
in the property only if the Regional Administrator, through the State, 
gives prior written approval of the transferee in accordance with this 
paragraph.
    (1) The request by the subgrantee, through the State, to the 
Regional Administrator must include a signed statement from the 
proposed transferee that it acknowledges and agrees to be bound by the 
terms of this section, and documentation of its status as a qualified 
conservation organization if applicable.
    (2) The subgrantee may convey a property interest only to a public 
entity or to a qualified conservation organization. However, the 
subgrantee may convey an easement or lease to a private individual or 
entity for purposes compatible with the uses described in paragraph 
(a), of this section, with the prior approval of the Regional 
Administrator, and so long as the conveyance does not include authority 
to control and enforce the terms and conditions of this section.
    (3) If title to the property is transferred to a public entity 
other than one with a conservation mission, it must be conveyed subject 
to a conservation easement that shall be recorded with the deed and 
shall incorporate all terms and conditions set forth in this section, 
including the easement holder's responsibility to enforce the easement. 
This shall be accomplished by one of the following means:

[[Page 61747]]

    (i) The subgrantee shall convey, in accordance with this paragraph, 
a conservation easement to an entity other than the title holder, which 
shall be recorded with the deed, or
    (ii) At the time of title transfer, the subgrantee shall retain 
such conservation easement, and record it with the deed.
    (4) Conveyance of any property interest must reference and 
incorporate the original deed restrictions providing notice of the 
conditions in this section and must incorporate a provision for the 
property interest to revert to the subgrantee or grantee in the event 
that the transferee ceases to exist or loses its eligible status under 
this section.
    (c) Inspection. FEMA, its representatives and assigns, including 
the grantee shall have the right to enter upon the property, at 
reasonable times and with reasonable notice, for the purpose of 
inspecting the property to ensure compliance with the terms of this 
part, the property conveyance and of the grant award.
    (d) Monitoring and reporting. Every 3 years the subgrantee (in 
coordination with any current successor in interest) through the 
grantee, shall submit to the FEMA Regional Administrator a report 
certifying that the subgrantee has inspected the property within the 
month preceding the report, and that the property continues to be 
maintained consistent with the provisions of this part, the property 
conveyance and the grant award.
    (e) Enforcement. The subgrantee, grantee, FEMA, and their 
respective representatives, successors and assigns, are responsible for 
taking measures to bring the property back into compliance if the 
property is not maintained according to the terms of this part, the 
conveyance, and the grant award. The relative rights and 
responsibilities of FEMA, the grantee, the subgrantee, and subsequent 
holders of the property interest at the time of enforcement, shall 
include the following:
    (1) The grantee will notify the subgrantee and any current holder 
of the property interest in writing and advise them that they have 60 
days to correct the violation.
    (i) If the subgrantee or any current holder of the property 
interest fails to demonstrate a good faith effort to come into 
compliance with the terms of the grant within the 60-day period, the 
grantee shall enforce the terms of the grant by taking any measures it 
deems appropriate, including but not limited to bringing an action at 
law or in equity in a court of competent jurisdiction.
    (ii) FEMA, its representatives, and assignees may enforce the terms 
of the grant by taking any measures it deems appropriate, including but 
not limited to 1 or more of the following:
    (A) Withholding FEMA mitigation awards or assistance from the State 
and subgrantee; and current holder of the property interest.
    (B) Requiring transfer of title. The subgrantee or the current 
holder of the property interest shall bear the costs of bringing the 
property back into compliance with the terms of the grant; or
    (C) Bringing an action at law or in equity in a court of competent 
jurisdiction against any or all of the following parties: the grantee, 
the subgrantee, and their respective successors.

Subpart D--After the Grant Requirements


Sec.  80.21  Closeout requirements.

    Upon closeout of the grant, the subgrantee, through the grantee, 
shall provide FEMA, with the following:
    (a) A copy of the deed recorded for each property, demonstrating 
that each property approved in the original application was mitigated 
and that the deed restrictions recorded are consistent with the FEMA 
model deed restriction language to meet the requirements of this part;
    (b) A photo of each property site after project completion;
    (c) The latitude-longitude coordinates of each property site;
    (d) Identification of each property as a repetitive loss property, 
if applicable; and
    (e) Other information as determined by the Administrator.

PART 201--MITIGATION PLANNING

0
10. The authority citation for part 201 is revised to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5206; Reorganization Plan No. 
3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; Homeland Security 
Act of 2002, 6 U.S.C. 101; E.O. 12127, 44 FR 19367, 3 CFR, 1979 
Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 1979 Comp., p. 412; 
E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.


0
11. Section 201.2 is amended by revising the definition of ``Hazard 
Mitigation Grant Program'' and by adding the following definitions to 
the alphabetical list of definitions:


Sec.  201.2  Definitions.

    Administrator means the head of the Federal Emergency Management 
Agency, or his/her designated representative, appointed under section 
503 of the Post-Katrina Emergency Management Reform Act of 2006 (Pub. 
L. 109-295). The term also refers to the Director as discussed in part 
2 of this chapter.
    Flood Mitigation Assistance (FMA) means the program authorized by 
section 1366 of the National Flood Insurance Act of 1968, as amended, 
42 U.S.C. 4104c, and implemented at parts 78 and 79.
* * * * *
    Hazard Mitigation Grant Program (HMGP) means the program authorized 
under section 404 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5170c, and implemented at part 206, 
subpart N of this chapter.
* * * * *
    Pre-Disaster Mitigation Program (PDM) means the program authorized 
under section 203 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5133.
* * * * *
    Repetitive Flood Claims (RFC) program means the program authorized 
under section 1323 of the National Flood Insurance Act of 1968, as 
amended, 42 U.S.C. 4011, which provides funding to reduce flood damages 
to individual properties for which 1 or more claim payments for losses 
have been made under flood insurance coverage and that will result in 
the greatest savings to the National Flood Insurance Program (NFIP) in 
the shortest period of time.
    Severe Repetitive Loss (SRL) program means the program authorized 
under section 1361(a) of the National Flood Insurance Act of 1968, as 
amended, 42 U.S.C. 4102a, and implemented at part 79 of this chapter.
    Severe Repetitive Loss properties are defined as single or 
multifamily residential properties that are covered under an NFIP flood 
insurance policy and:
    (1) That have incurred flood-related damage for which 4 or more 
separate claims payments have been made, with the amount of each claim 
(including building and contents payments) exceeding $5,000, and with 
the cumulative amount of such claims payments exceeding $20,000; or
    (2) For which at least 2 separate claims payments (building 
payments only) have been made under such coverage, with cumulative 
amount of such claims exceeding the market value of the property.
    (3) In both instances, at least 2 of the claims must be within 10 
years of each

[[Page 61748]]

other, and claims made within 10 days of each other will be counted as 
1 claim.
* * * * *

0
12. Revise paragraphs (c)(1), (c)(3), (d)(2) and (e) of Sec.  201.3 to 
read as follows:


Sec.  201.3  Responsibilities.

* * * * *
    (c) * * *
    (1) Prepare and submit to FEMA a Standard State Mitigation Plan 
following the criteria established in Sec.  201.4 as a condition of 
receiving non-emergency Stafford Act assistance and FEMA mitigation 
grants. In addition, a State may choose to address severe repetitive 
loss properties in their plan as identified in Sec.  201.4(c)(3)(v) to 
receive the reduced cost share for the Flood Mitigation Assistance 
(FMA) and Severe Repetitive Loss (SRL) programs, pursuant to Sec.  
79.4(c)(2) of this chapter.
* * * * *
    (3) At a minimum, review and update the Standard State Mitigation 
Plan every 3 years from the date of the approval of the previous plan 
in order to continue program eligibility.
* * * * *
    (d) * * *
    (2) At a minimum, review and update the local mitigation plan every 
5 years from date of plan approval of the previous plan in order to 
continue program eligibility.
    (e) Indian tribal governments. The key responsibilities of the 
Indian tribal government are to coordinate all tribal activities 
relating to hazard evaluation and mitigation and to:
    (1) Prepare and submit to FEMA a Tribal Mitigation Plan following 
the criteria established in Sec.  201.7 as a condition of receiving 
non-emergency Stafford Act assistance as a grantee. This plan will also 
allow Indian tribal governments to apply through the State, as a 
subgrantee, for any FEMA mitigation project grant. Indian tribal 
governments with a plan approved by FEMA on or before October 1, 2008 
under Sec.  201.4 or Sec.  201.6 will also meet this planning 
requirement. All Tribal Mitigation Plans approved after that date must 
follow the criteria identified in Sec.  201.7. In addition, an Indian 
tribal government may choose to address severe repetitive loss 
properties as identified in Sec.  201.4(c)(3)(v) as a condition of 
receiving the reduced cost share for the FMA and SRL programs, pursuant 
to Sec.  79.4(c)(2) of this chapter.
    (2) Review and update the Tribal Mitigation Plan at least every 5 
years from the date of approval of the previous plan in order to 
continue program eligibility.
    (3) In order to be considered for the increased HMGP funding, the 
Tribal Mitigation Plan must meet the Enhanced State Mitigation Plan 
criteria identified in Sec.  201.5. The plan must be reviewed and 
updated at least every 3 years from the date of approval of the 
previous plan.

0
13. Revise paragraphs (a) and (c)(7) and add paragraph (c)(3)(v) of 
Sec.  201.4 to read as follows:


Sec.  201.4  Standard State Mitigation Plans.

    (a) Plan requirement. States must have an approved Standard State 
Mitigation Plans meeting the requirements of this section as a 
condition of receiving non-emergency Stafford Act assistance and FEMA 
mitigation grants. Emergency assistance provided under 42 U.S.C. 5170a, 
5170b, 5173, 5174, 5177, 5179, 5180, 5182, 5183, 5184, 5192 will not be 
affected. Mitigation planning grants provided through the Pre-disaster 
Mitigation (PDM) program, authorized under section 203 of the Stafford 
Act, 42 U.S.C. 5133, will also continue to be available. 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.
* * * * *
    (c) * * *
    (3) * * *
    (v) A State may request the reduced cost share authorized under 
Sec.  79.4(c)(2) of this chapter for the FMA and SRL programs, if it 
has an approved State Mitigation Plan meeting the requirements of this 
section that also identifies specific actions the State has taken to 
reduce the number of repetitive loss properties (which must include 
severe repetitive loss properties), and specifies how the State intends 
to reduce the number of such repetitive loss properties. In addition, 
the plan must describe the strategy the State has to ensure that local 
jurisdictions with severe repetitive loss properties take actions to 
reduce the number of these properties, including the development of 
local mitigation plans.
* * * * *
    (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) of this chapter. The State will 
amend its plan whenever necessary to reflect changes in State or 
Federal statutes and regulations as required in 44 CFR 13.11(d) of this 
chapter.
* * * * *

0
14. Revise paragraphs (a)(1), (a)(2), (c)(2)(ii) introductory text, 
(d)(1), and (d)(3) and add a sentence to the end of paragraph 
(c)(3)(ii) of Sec.  201.6 to read as follows:


Sec.  201.6  Local Mitigation Plans.

* * * * *
    (a) * * *
    (1) A local government must have a mitigation plan approved 
pursuant to this section in order to receive HMGP project grants. The 
Administrator may, at his discretion, require a local mitigation plan 
for the Repetitive Flood Claims Program. A local government must have a 
mitigation plan approved pursuant to this section in order to apply for 
and receive mitigation project grants under all other mitigation grant 
programs.
    (2) Plans prepared for the FMA program, described at part 79 of 
this chapter, need only address these requirements as they relate to 
flood hazards in order to be eligible for FMA project grants. However, 
these plans must be clearly identified as being flood mitigation plans, 
and they will not meet the eligibility criteria for other mitigation 
grant programs, unless flooding is the only natural hazard the 
jurisdiction faces.
* * * * *
    (c) * * *
    (2) * * *
    (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. All plans approved after October 1, 2008 must 
also address NFIP insured structures that have been repetitively 
damaged by floods. The plan should describe vulnerability in terms of:
* * * * *
    (3) * * *
    (ii) * * * All plans approved by FEMA after October 1, 2008, must 
also address the jurisdiction's participation in the NFIP, and 
continued compliance with NFIP requirements, as appropriate.
* * * * *
    (d) * * *
    (1) Plans must be submitted to the State Hazard Mitigation Officer 
(SHMO) for initial review and coordination. The State will then send 
the plan to the appropriate FEMA Regional Office for formal review and 
approval. Where the State point of contact for the FMA program is 
different from the SHMO, the SHMO will be responsible for

[[Page 61749]]

coordinating the local plan reviews between the FMA point of contact 
and FEMA.
* * * * *
    (3) A local jurisdiction must review and revise its plan to reflect 
changes in development, progress in local mitigation efforts, and 
changes in priorities, and resubmit it for approval within 5 years in 
order to continue to be eligible for mitigation project grant funding.
* * * * *

0
15. Add Sec.  201.7 to read as follows:


Sec.  201.7  Tribal Mitigation Plans.

    The Indian Tribal Mitigation Plan is the representation of the 
Indian tribal government'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.
    (a) Plan requirement. (1) Indian tribal governments applying to 
FEMA as a grantee must have an approved Tribal Mitigation Plan meeting 
the requirements of this section as a condition of receiving non-
emergency Stafford Act assistance and FEMA mitigation grants. Emergency 
assistance provided under 42 U.S.C. 5170a, 5170b, 5173, 5174, 5177, 
5179, 5180, 5182, 5183, 5184, 5192 will not be affected. Mitigation 
planning grants provided through the PDM program, authorized under 
section 203 of the Stafford Act, 42 U.S.C. 5133, will also continue to 
be available.
    (2) An Indian tribal government may choose to address severe 
repetitive loss properties in their plan, as identified in Sec.  
201.4(c)(3)(v), to receive the reduced cost share for the FMA and SRL 
programs.
    (3) Indian tribal governments applying through the State as a 
subgrantee must have an approved Tribal Mitigation Plan meeting the 
requirements of this section in order to receive HMGP project grants. 
The Administrator, at his discretion may require a local mitigation 
plan for the Repetitive Flood Claims Program. A tribe must have an 
approved Tribal Mitigation Plan in order to apply for and receive FEMA 
mitigation project grants, under all other mitigation grant programs.
    (4) Multi-jurisdictional plans (e.g. county-wide or watershed 
plans) may be accepted, as appropriate, as long as the Indian tribal 
government has participated in the process and has officially adopted 
the plan. Indian tribal governments must address all the elements 
identified in this section to ensure eligibility as a grantee or as a 
subgrantee.
    (b) An effective planning process is essential in developing and 
maintaining a good plan. The mitigation planning process should include 
coordination with other tribal agencies, appropriate Federal agencies, 
adjacent jurisdictions, interested groups, and be integrated to the 
extent possible with other ongoing tribal planning efforts as well as 
other FEMA mitigation programs and initiatives.
    (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. This shall include:
    (i) An opportunity for the public to comment on the plan during the 
drafting stage and prior to plan approval, including a description of 
how the Indian tribal government defined ``public;''
    (ii) As appropriate, an opportunity for neighboring communities, 
tribal 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 nonprofit interests to 
be involved in the planning process;
    (iii) Review and incorporation, if appropriate, of existing plans, 
studies, and reports; and
    (iv) Be integrated to the extent possible with other ongoing tribal 
planning efforts as well as other FEMA programs and initiatives.
    (2) A risk assessment that provides the factual basis for 
activities proposed in the strategy to reduce losses from identified 
hazards. Tribal risk assessments must provide sufficient information to 
enable the Indian tribal government 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 tribal planning area. The plan shall 
include information on previous occurrences of hazard events and on the 
probability of future hazard events.
    (ii) A description of the Indian tribal government'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 tribe. 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) A general description of land uses and development trends 
within the tribal planning area so that mitigation options can be 
considered in future land use decisions; and
    (D) Cultural and sacred sites that are significant, even if they 
cannot be valued in monetary terms.
    (3) A mitigation strategy that provides the Indian tribal 
government'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 Indian tribal government.
    (iv) A discussion of the Indian tribal government's pre- and post-
disaster hazard management policies, programs, and capabilities to 
mitigate the hazards in the area, including: An evaluation of tribal 
laws, regulations, policies, and programs related to hazard mitigation 
as well as to development in hazard-prone areas; and a discussion of 
tribal funding capabilities for hazard mitigation projects.
    (v) Identification of current and potential sources of Federal, 
tribal, or private funding to implement mitigation activities.
    (vi) An Indian tribal government may request the reduced cost share 
authorized under Sec.  79.4(c)(2) of this chapter of the FMA and SRL 
programs if they have an approved Tribal Mitigation Plan meeting the 
requirements of this section that also identify actions the Indian 
tribal government has taken to reduce the number of repetitive loss 
properties (which must include severe repetitive loss properties), and 
specifies how the Indian tribal government intends to

[[Page 61750]]

reduce the number of such repetitive loss properties.
    (4) A plan maintenance process that includes:
    (i) A section describing the method and schedule of monitoring, 
evaluating, and updating the mitigation plan.
    (ii) A system for monitoring implementation of mitigation measures 
and project closeouts.
    (iii) A process by which the Indian tribal government incorporates 
the requirements of the mitigation plan into other planning mechanisms 
such as reservation master plans or capital improvement plans, when 
appropriate.
    (iv) Discussion on how the Indian tribal government will continue 
public participation in the plan maintenance process.
    (v) A system for reviewing progress on achieving goals as well as 
activities and projects identified in the mitigation strategy.
    (5) Plan Adoption Process. The plan must be formally adopted by the 
governing body of the Indian tribal government prior to submittal to 
FEMA for final review and approval.
    (6) Assurances. The plan must include assurances that the Indian 
tribal government 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 Sec.  13.11(c) of this chapter. The 
Indian tribal government will amend its plan whenever necessary to 
reflect changes in tribal or Federal laws and statutes as required in 
Sec.  13.11(d) of this chapter.
    (d) Plan review and updates. (1) Plans must be submitted to the 
appropriate FEMA Regional Office for formal review and approval. Indian 
tribal governments who would like the option of being a subgrantee 
under the State must also submit their plan to the State Hazard 
Mitigation Officer for review and coordination.
    (2) The Regional review will be completed within 45 days after 
receipt from the Indian tribal government, whenever possible.
    (3) Indian tribal governments must review and revise their plan to 
reflect changes in development, progress in local mitigation efforts, 
and changes in priorities, and resubmit it for approval within 5 years 
in order to continue to be eligible for non-emergency Stafford Act 
assistance and FEMA mitigation grant funding, with the exception of the 
Repetitive Flood Claims program.

PART 206-FEDERAL DISASTER ASSISTANCE

0
16. The authority citation for part 206 continues to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5206; Reorganization Plan No. 
3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; Homeland Security 
Act of 2002, 6 U.S.C. 101; E.O. 12127, 44 FR 19367, 3 CFR, 1979 
Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 1979 Comp., p. 412; 
E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

0
17. Section 206.432 is amended by revising paragraphs (b) introductory 
text and (b)(1) to read as follows:


Sec.  206.432  Federal grant assistance.

* * * * *
    (b) Amounts of Assistance. The total Federal contribution of funds 
is based on the estimated aggregate grant amount to be made under 42 
U.S.C. 5170b, 5172, 5173, 5174, 5177, 5178, and 5183 of the Stafford 
Act for the major disaster (less associated administrative costs), and 
shall be as follows:
    (1) Standard percentages. Not to exceed 15 percent for the first 
$2,000,000,000 or less of such amounts; not to exceed 10 percent of the 
portion of such amounts over $2,000,000,000 and not more than 
$10,000,000,000; and not to exceed 7.5 percent of the portion of such 
amounts over $10,000,000,000 and not more than $35,333,000,000.
* * * * *

0
18. Section 206.433 is amended by revising paragraph (c) to read as 
follows:


Sec.  206.433  State responsibilities.

* * * * *
    (c) Hazard Mitigation Officer. The State must appoint a Hazard 
Mitigation Officer who serves as the responsible individual for all 
matters related to the Hazard Mitigation Grant Program.
* * * * *

0
19. Revise paragraphs (a)(2), (c)(5)(ii), (e) introductory text; add a 
sentence after the first sentence of (d)(2); remove paragraph (f); and 
redesignate current paragraphs (g) and (h) as (f) and (g) of Sec.  
206.434 to read as follows:


Sec.  206.434  Eligibility.

    (a) * * *
    (2) Private nonprofit organizations that own or operate a private 
nonprofit facility as defined in Sec.  206.221(e). A qualified 
conservation organization as defined at Sec.  80.3(h) of this chapter 
is the only private nonprofit organization eligible to apply for 
acquisition or relocation for open space projects;
* * * * *
    (c) * * *
    (5) * * *
    (ii) Will not cost more than the anticipated value of the reduction 
in both direct damages and subsequent negative impacts to the area if 
future disasters were to occur,
* * * * *
    (d) * * *
    (2) * * * Activities for which implementation has already been 
initiated or completed are not eligible for funding. * * *
* * * * *
    (e) Property acquisitions and relocation requirements. Property 
acquisitions and relocation projects for open space proposed for 
funding pursuant to a major disaster declared on or after December 3, 
2007 must be implemented in accordance with part 80 of this chapter. 
For major disasters declared prior to December 3, 2007, a project 
involving property acquisition or the relocation of structures and 
individuals is eligible for assistance only if the applicant enters 
into an agreement with the FEMA Regional Director that provides 
assurances that:
* * * * *

0
20. Add new paragraph (c) to Sec. 206.439 to read as follows:


Sec.  206.439  Allowable costs.

* * * * *
    (c) Pre-award costs. FEMA may fund eligible pre-award planning or 
project costs at its discretion and as funds are available. Grantees 
and subgrantees may be reimbursed for eligible pre-award costs for 
activities directly related to the development of the project or 
planning proposal. These costs can only be incurred during the open 
application period of the grant program. Costs associated with 
implementation of the activity but incurred prior to grant award are 
not eligible. Therefore, activities where implementation is initiated 
or completed prior to award are not eligible and will not be 
reimbursed.

    Dated: October 24, 2007.
Harvey E. Johnson, Jr.,
Deputy Administrator/Chief Operating Officer, Federal Emergency 
Management Agency.
[FR Doc. E7-21265 Filed 10-30-07; 8:45 am]
BILLING CODE 9110-41-P