[Federal Register Volume 74, Number 167 (Monday, August 31, 2009)]
[Rules and Regulations]
[Pages 44761-44769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19994]



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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

[Docket ID FEMA-2009-0006]
RIN 1660-AA63


Arbitration for Public Assistance Determinations Related to 
Hurricanes Katrina and Rita (Disasters DR-1603, DR-1604, DR-1605, DR-
1606, and DR-1607)

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule.

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SUMMARY: Pursuant to the American Recovery and Reinvestment Act of 2009 
(ARRA), this final rule establishes an option for arbitration under the 
Public Assistance program administered by the Federal Emergency 
Management Agency. Public Assistance grant award determinations related 
to Hurricanes Katrina and Rita under major disaster declarations DR-
1603, DR-1604, DR-1605, DR-1606, and DR-1607 are eligible for 
arbitration, within the limits set by this rule.

DATES: Effective Date: August 31, 2009.

FOR FURTHER INFORMATION CONTACT: Tod Wells, Deputy Director, Public 
Assistance Division, Federal Emergency Management Agency, 500 C Street, 
SW., Washington DC, 20472-3100, (phone) 202-646-3936, or (e-mail) 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

A. Public Assistance Process for Project Approval

    Under the Public Assistance program, authorized by the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act \1\ (Stafford 
Act), the Federal Emergency Management Agency (FEMA) awards grants to 
State and local governments, Indian Tribal governments, and certain 
private nonprofit organizations (``eligible applicant''--44 CFR 
206.222) to assist them to respond to and recover from Presidentially-
declared emergencies and major disasters as quickly as possible. 
Specifically, the program provides assistance for debris removal, 
emergency protective measures, and permanent restoration of 
infrastructure. When the President declares an emergency or major 
disaster declaration for a State, authorizing the Public Assistance 
program, an eligible applicant may apply for Public Assistance. The 
applicant submits a Request for Public Assistance (FEMA Form 90-49) to 
FEMA through the Grantee, which is usually the State, but may be an 
Indian Tribal government. An eligible applicant may be a State agency, 
a local or Tribal government, or a private nonprofit organization. See 
44 CFR 206.222. Upon award, the Grantee notifies the applicant of the 
award, and the applicant becomes a subgrantee.
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    \1\ Disaster Relief Act of 1974, Public Law 93-288, 88 Stat. 143 
(May 22, 1974), as amended, 42 U.S.C. 5121 et seq.
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    The basis for the Public Assistance grant is a project worksheet. 
The project worksheet documents the details of the project, which is a 
logical grouping of work required as a result of a declared major 
disaster or emergency. A project may include eligible work at several 
sites, and may include more than one project worksheet. A project 
worksheet is the primary form used to document the location, damage 
description and dimensions, scope of work, and cost estimate for each 
project. The Office of Management and Budget has approved the project 
worksheet form (FEMA Form 90-91) under information collection number 
1660-0017. When the scope of work or estimated costs of a project 
change, FEMA generates an additional version of the project worksheet. 
It is not uncommon to have several versions of a project worksheet for 
one project, as it may be difficult to predict costs and scope of work 
at the beginning of a project.
    FEMA divides applications for Public Assistance into two groups--
large projects and small projects--based on the dollar amount of the 
project. The threshold for large and small projects is adjusted 
annually to reflect changes in the Consumer Price Index for All Urban 
Consumers published by the United States Department of Labor. The 
threshold for small projects in Fiscal Year 2005 (Hurricanes Katrina 
and Rita occurred in Fiscal Year 2005) was $55,500. The project 
worksheet process is slightly different for these two types of 
projects. Since the arbitration process applies only to large projects 
totaling more than $500,000, this rulemaking will address the process 
for reviewing project worksheets for large projects.
    Project worksheets for large projects are developed by a FEMA 
Project Specialist, working with the applicant/subgrantee, and are 
submitted directly to a FEMA Public Assistance Coordinator (PAC) Crew 
Leader for review and processing. Although large projects are funded on 
documented actual costs, work typically is not complete at the time of 
project approval. Therefore, FEMA obligates large project grants based 
on estimated costs. The obligation process is the process by which 
funds are made available to the Grantee. The funds reside in a Federal 
account until drawn down by the Grantee and paid to the applicant/
subgrantee. When the applicant/subgrantee or Grantee disagree with 
FEMA's determination about whether a cost is eligible for reimbursement 
or reasonable, among other project worksheet determinations, FEMA 
provides an appeals process to adjudicate such disputes.

B. Public Assistance Appeal Process Under 44 CFR 206.206

    Traditionally, under the appeals procedures in 44 CFR 206.206, an 
eligible applicant, subgrantee, or Grantee may appeal any determination 
made by FEMA related to an application for or the provision of Public 
Assistance. There are two levels of appeal. The first level appeal is 
to the FEMA Regional Administrator. The second level appeal is to the 
FEMA Assistant Administrator for the Disaster Assistance Directorate. 
Typical appeals involve disputes regarding whether an applicant, 
facility, item of work, or project is eligible for Public Assistance, 
whether approved costs are sufficient to complete the work, whether a 
requested time extension was properly denied, whether a portion of the 
cost claimed for the work is eligible, or whether the approved scope of 
work is correct.
    An applicant/subgrantee appellant must file an appeal with the 
Grantee within 60 days of the appellant's receipt of a notice of the 
determination that is being appealed. The appellant must provide 
documented justification to support the position of the appellant. This 
documentation should specify the monetary amount in dispute and the 
provisions in Federal law, regulation, or policy with which the 
appellant believes the initial action was inconsistent. The Grantee 
reviews and evaluates the appeal documentation. The Grantee then 
prepares a written recommendation on the merits of the appeal and 
forwards that recommendation to the FEMA Regional Administrator within 
60 days of its receipt of the appeal. The Grantee need not endorse the 
appeal position but must forward all appeals it receives.
    The Regional Administrator reviews the appeal and takes one of two 
actions: (1) Renders a decision on the appeal and informs the Grantee 
of the decision; or (2) requests additional information. The appellant 
may be granted 60 days to provide any additional information, and the 
Regional Administrator provides a

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decision on the appeal within 90 days of receipt of that information. 
If the appeal is granted, the Regional Administrator takes appropriate 
action, such as approving additional funding, denying additional 
funding, or sending a Project Specialist to meet with the appellant to 
determine additional eligible funding.
    If the Regional Administrator denies the appeal, the appellant may 
submit a second appeal. The appellant must submit the second appeal to 
the Grantee within 60 days of receiving notice of the Regional 
Administrator's decision. The Grantee must forward the second level 
appeal with a written recommendation to the Regional Administrator 
within 60 days of receiving the second appeal. The Regional 
Administrator reviews the information provided with the second appeal 
and requests additional information if necessary. The Regional 
Administrator forwards the second appeal with a recommendation for 
action to the FEMA Assistant Administrator as soon as practicable.
    The FEMA Assistant Administrator for the Disaster Assistance 
Directorate reviews the second appeal and renders a decision or 
requests additional information from the appellant. In a case involving 
highly technical issues, FEMA may request an independent scientific or 
technical analysis by a group or person having expertise in the subject 
matter of the appeal. Upon receipt of requested information from the 
appellant and any other requested reports, FEMA renders a decision on 
the second appeal within 90 days. This decision constitutes the final 
administrative decision of FEMA. See 44 CFR 206.206(e)(3).

C. The American Recovery and Reinvestment Act of 2009

    The President signed the American Recovery and Reinvestment Act of 
2009 (ARRA or Act), Public Law 111-5, into law on February 17, 2009. 
Section 601 of the ARRA requires the President to establish an 
arbitration panel under FEMA's Public Assistance program to expedite 
recovery efforts from Hurricanes Katrina and Rita within the Gulf Coast 
region. The ARRA further requires the arbitration panel to have 
sufficient authority regarding the award or denial of disputed Public 
Assistance applications for covered hurricane damage under sections 
403, 406, or 407 of the Stafford Act. The ARRA limits arbitration to 
projects that total more than $500,000. By memorandum dated August 6, 
2009, the President assigned to the Secretary of the U.S. Department of 
Homeland Security the function of the President under section 601. See 
74 FR 40055 (Aug. 10, 2009).
    Three states in the Gulf Coast region have Public Assistance 
project worksheets from Hurricane Katrina that are awaiting an initial 
determination from FEMA: Louisiana, Mississippi, and Alabama. Two 
states in the Gulf Coast region have Public Assistance project 
worksheets from Hurricane Rita that are awaiting an initial 
determination from FEMA: Louisiana and Texas. Any funding of these 
project worksheets would be under the following major disaster 
declarations: DR-1603 (Louisiana--Hurricane Katrina), DR-1604 
(Mississippi--Hurricane Katrina), DR-1605 (Alabama--Hurricane Katrina), 
DR-1606 (Texas--Hurricane Rita), and DR-1607 (Louisiana--Hurricane 
Rita). Approximately 44 appeals are pending from these declarations. 
Further, there are approximately 2,188 Public Assistance project 
worksheets from Louisiana and Mississippi awaiting an initial 
determination of eligibility under the Public Assistance program from 
FEMA, which, if disputed, may be appealed. These project worksheets are 
at various stages within the determination process. For example, some 
are incomplete and awaiting further information from the applicant, 
some are undergoing site visits, and some have additional versions 
requiring FEMA review.

II. Discussion of the Rule

A. General

    This regulation is promulgated pursuant to section 601 of the ARRA 
and establishes arbitration procedures to resolve outstanding disputes 
regarding Public Assistance projects over $500,000 from the states of 
Louisiana, Mississippi, Alabama, and Texas under the following 
declarations: DR-1603, DR-1604, DR-1605, DR-1606, and DR-1607. Public 
Assistance applicants/subgrantees under these declarations may request 
arbitration in lieu of filing an appeal under 44 CFR 206.206 for any 
determination made by FEMA that is eligible for appeal and meets the 
$500,000 threshold. As discussed below, Public Assistance applicants/
subgrantees under these declarations who were engaged in the FEMA 
appeals process as of February 17, 2009, and had not received a final 
agency decision prior to February 17, 2009, may request arbitration in 
lieu of the appeal, even if FEMA issued a final agency decision on the 
appeal on or after February 17, 2009.

B. Applicability and Limitations

    The purpose of the ARRA is to expedite recovery efforts from 
Hurricanes Katrina and Rita within the Gulf Coast region. Therefore, 
the option for arbitration is limited to Public Assistance project 
worksheets filed under one of the five major disaster declarations 
declared for Hurricanes Katrina and Rita in the Gulf Coast region. In 
addition, the total amount of the Public Assistance project must be 
greater than $500,000. This dollar limitation is set by section 601 of 
the ARRA and is not within FEMA's discretion.
    Arbitration is not an option if an agency decision became final 
before February 17, 2009, the date when arbitration became a legal 
option for Public Assistance applicants under the ARRA. For those 
determinations made prior to February 17, 2009, FEMA has determined 
that a final decision will exist in three instances: (1) When the 
applicant/subgrantee did not file an appeal within the 60-day appeal 
period; (2) when the applicant/subgrantee failed to file for a second 
appeal within 60 days of denial of its first appeal; or (3) when FEMA 
issued an appeal decision on a second appeal of the applicant/
subgrantee. See 44 CFR 206.206. If there was a final decision before 
February 17, 2009, the applicant/subgrantee has exhausted its 
administrative remedies and may not elect arbitration.
    The ARRA created the right to arbitration as of its effective date. 
If the applicant/subgrantee is eligible to file an appeal under 44 CFR 
206.206, or if a first or second level appeal was pending on or after 
February 17, 2009, arbitration remains an option. Applicants/
subgrantees that had a first or second level appeal pending on or after 
February 17, 2009, may choose arbitration, regardless of whether FEMA 
has issued a decision on the appeal since the effective date of the 
ARRA. However, if the applicant/subgrantee was eligible to appeal after 
the effective date of the ARRA, but allowed the appeal period to expire 
without filing an appeal, the applicant/subgrantee is not eligible to 
file an appeal and, therefore, is not eligible for arbitration.
    The stated purpose of the ARRA arbitration provision is to 
``expedite'' recovery efforts. Accordingly, a request for arbitration 
is in lieu of filing or continuing an appeal under 44 CFR 206.206. The 
use of only one review procedure, arbitration or appeal, is more 
expeditious than two consecutive review procedures. The use of both 
arbitration and the standard appeal process would lengthen, not 
expedite, the recovery process. Arbitration and appeals each require 
significant time to complete, and FEMA has determined going forward 
that it would be contrary

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to Congressional intent to allow applicants/subgrantees to pursue both 
an appeal and arbitration.

C. Content of Request for Arbitration and Other Submissions

    A request for arbitration must contain a written statement and all 
documentation supporting the applicant's or subgrantee's position. The 
applicant/subgrantee may provide supporting documentation not 
previously included in the project worksheet or the application to 
FEMA. There is no limit on the amount of documentation that may be 
provided. The request should include all information necessary for the 
arbitration panel to make an informed decision. The request should 
clearly set out the applicant's/subgrantee's position. The parties are 
encouraged to describe their claims in sufficient detail to make the 
circumstances of the dispute clear to the arbitration panel.
    Any party may be represented by counsel or another authorized 
representative. If represented, the party must provide the name and 
address of the representative to the other party, the Grantee, and the 
arbitration panel.
    All papers, notices, or other documents submitted to the 
arbitration panel by the applicant or subgrantee, the Grantee, or FEMA 
must be simultaneously served on each party's authorized representative 
or counsel. The submitting party must make such service by courier or 
overnight delivery service (such as Federal Express, DHL, United Parcel 
Service, or the United States Postal Service overnight delivery), 
addressed to the party, representative, or counsel, as applicable, at 
its last known address.

D. Submission of the Request for Arbitration

    An applicant/subgrantee must submit a request for arbitration 
simultaneously to the Grantee, the applicable FEMA Regional 
Administrator, and the arbitration administrator. FEMA will post an 
address, phone number, and fax number for the arbitration administrator 
on FEMA's Web site at http://www.fema.gov. Consistent with the Section 
B above, any application or project worksheet totaling more than 
$500,000 that is eligible for appeal is eligible for arbitration.
    If there is a first or second level appeal pending with FEMA, or if 
FEMA issued a decision on a first or second level appeal on or after 
February 17, 2009, the applicant/subgrantee must submit the request for 
arbitration, as well as a withdrawal of the pending appeal, if 
applicable, simultaneously to the Grantee, the applicable FEMA Regional 
Administrator, and the arbitration administrator by October 30, 2009. 
Otherwise, if the applicant/subgrantee seeks arbitration, it must 
request arbitration in writing to the Grantee within 30 calendar days 
after receipt of notice of the determination that is the subject of the 
arbitration request, or by September 30, 2009, whichever is later. 
Issues that may be arbitrated would be the same as those that are 
normally subject to appeal, provided the total amount of the project is 
greater than $500,000. As an example, a subgrantee could appeal the 
amount of the FEMA-approved costs, where the subgrantee believes the 
eligible amount should be greater. Examples of second appeals can be 
found at http://www.fema.gov/appeals/.

E. Submission by the Grantee

    Within 15 calendar days of receipt of the applicant's or 
subgrantee's request for arbitration, the Grantee may forward a written 
recommendation in support or opposition of the applicant's or 
subgrantee's request simultaneously to the FEMA Regional Administrator, 
the arbitration administrator, and the applicant. In addition, the 
Grantee must forward the name and address of the Grantee's authorized 
representative or counsel.
    In selecting 15 calendar days, FEMA is implementing the intent of 
the ARRA. The Act specifically requires the arbitration process to 
``expedite'' recovery efforts from Hurricanes Katrina and Rita. A 15-
calendar-day time limit is intended to expedite the resolution of the 
applicant's or subgrantee's dispute. However, this 15-day time period 
will allow sufficient time for the Grantee to review the request and 
prepare a recommendation without delaying the arbitration process.

F. Submission of FEMA's Response

    Within 30 calendar days of receipt of the applicant's or 
subgrantee's request, FEMA will simultaneously submit a response in 
support of its position, a copy of the project worksheet(s), and any 
supporting information to the arbitration administrator, the Grantee, 
and the applicant/subgrantee.

G. Selection of Arbitrators

    The arbitration panels will be composed of three judges drawn from 
the Federal pool of current and senior administrative law judges and 
other similar officials serving in adjudicative capacities on boards, 
commissions and agencies. Each panel will be selected by the 
arbitration administrator. The individuals assigned to any one panel 
may change from case to case, as assigned by the arbitration 
administrator. The arbitration administrator will notify all parties to 
the arbitration of the names and identities of the arbitrators selected 
for the panel.

H. Preliminary Conference

    Within 10 business days of the panel's receipt of FEMA's response 
to the request for arbitration, a preliminary conference will be held 
by telephone with the arbitrators, the parties and/or their 
representatives. The preliminary conference may address such issues as 
the future conduct of the case, including clarification of the issues 
and claims, possible arbitrator disqualification, the scheduling of 
hearings and the hearing location, if applicable, and other 
administrative matters.

I. Hearing

    The panel will provide the applicant/subgrantee and FEMA with an 
opportunity to make an oral presentation in person, by telephone 
conference, or other means during which all the parties may 
simultaneously hear all other participants. If the applicant/subgrantee 
or FEMA would like to request a hearing, it must be requested no later 
than the preliminary conference. The panel will determine the hearing 
location, and its decision will be final and binding. The panel will 
endeavor to hold the hearing within 60 calendar days of the preliminary 
conference, unless the panel postpones the hearing upon agreement of 
the parties, or at the request of a party for good cause shown. If the 
hearing is postponed, the panel will set a new date within 10 business 
days of the postponement.
    The parties may not engage in discovery or provide additional paper 
submissions at the hearing. Each party may present its position through 
oral presentations by individuals designated in advance of the hearing. 
If the panel deems it appropriate or necessary, it may request 
additional written materials from either or both parties or seek the 
advice or expertise of independent scientific or technical subject 
matter experts, such as engineers and architects.

J. Review by the Arbitration Panel

    In its review, the arbitration panel will consider all relevant 
written materials provided by the parties and the Grantee. If a hearing 
is held, the panel will also consider the oral presentations made at 
the hearing. In addition, the panel may, if it deems appropriate or 
necessary, seek the

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advice or expertise of independent scientific or technical subject 
matter experts, such as engineers or architects.

K. Decision: Time Limits

    The panel will make every effort to issue a written decision within 
60 calendar days after the panel declares the hearing closed, or if an 
oral presentation was not requested, within 60 calendar days following 
the receipt of FEMA's response to the request for arbitration. In 
general, 60 days is a reasonable time for a panel to review the 
determination, discuss the issues involved, and issue a decision. It is 
shorter than the 90 days allotted for first and second level appeals 
under the appeals process, and in keeping with the purpose of the 
arbitration provision--to expedite the recovery process.
    However, the issues involved in Public Assistance determinations 
can be technical and complex. In cases involving highly technical and 
complex matters, a decision of the panel may take longer than 60 days. 
The appeal regulation allows additional time for review of an appeal 
when highly technical issues are involved. See 44 CFR 206.206(d). 
Similarly, this regulation provides for the possibility that the 
arbitration panel will not be able to render a decision within 60 days 
on such issues.

L. Finality of Decision

    A decision of the majority of the panel will constitute a final 
decision, binding on all parties. Final decisions are not subject to 
further administrative review. Final decisions are not subject to 
judicial review, except as permitted by 9 U.S.C. 10.

M. Ex Parte Communications

    No party, and no one acting on behalf of any party, will have ex 
parte communications with an arbitrator. This means that neither the 
applicant/subgrantee, the Grantee, nor FEMA may communicate with an 
arbitrator about a particular arbitration without the participation of 
the other parties or their representatives. If a party engages in an ex 
parte communication, the party engaged in such communication must 
provide a summary or a transcript of the entire communication to the 
other parties.

N. Costs

    FEMA will pay the fees of the arbitrators, the costs of any expert 
retained by the panel and the arbitration facility costs, if any. The 
expenses for each party, including attorney's fees, representative 
fees, copying costs, costs associated with attending any hearing, and 
any other fees not specifically listed in the regulation must be paid 
by the party incurring the expense.

O. Guidance

    FEMA will issue separate guidance as necessary to supplement this 
regulation.

III. Regulatory Analysis

A. Administrative Procedure Act

    The Administrative Procedure Act (APA) requires an agency to 
publish a rule for public comment prior to implementation. 5 U.S.C. 
553. The APA, however, provides an exception to this requirement for 
rules of agency procedure or practice. 5 U.S.C. 553 (b)(3)(A).
    This rule implements section 601 of the ARRA by detailing how a 
Public Assistance applicant or subgrantee may request arbitration. It 
is therefore, a procedural rule; it establishes procedures for making 
an arbitration request and the procedures FEMA will follow in issuing 
an arbitration decision. The rule does not affect eligibility under the 
Public Assistance program; rather, it adds an option for review of 
Public Assistance applications to expedite recovery efforts. FEMA 
already provides for review of these determinations through the appeal 
provisions of 44 CFR 206.206. This rule simply provides an alternate 
procedure for seeking such a review of FEMA determinations.
    Further, because this rule is procedural in nature and does not 
confer any substantive rights, benefits or obligations, FEMA finds that 
this rule shall become effective immediately upon publication of this 
final rule in the Federal Register. 5 U.S.C. 553(d).

B. Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866, regulatory actions are subject to 
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.
    This rule is entirely voluntary. Applicants are not required to 
seek arbitration under the authority and requirements of this rule. 
This rule provides an additional option to applicants/subgrantees in 
lieu of appeal. For those that choose to undergo arbitration, this rule 
will result in a total cost increase of $389,363 to applicants/
subgrantees, and a cost savings of $4,242 to Grantees. This rule is not 
an economically significant regulatory action as defined in Executive 
Order 12866. This is not a significant rule under Executive Order 
12866; therefore, OMB has not reviewed this rule.
    Under FEMA's standard appeal procedures, an applicant/subgrantee 
must file an appeal with documentation supporting the appeal within 60 
days of the decision that is being appealed. The Grantee then forwards 
the request to the Regional Administrator within 60 days of receipt, 
and in doing so may submit a written recommendation to FEMA. The 
Regional Administrator then reviews the appeal and either makes a 
determination or seeks additional information from the applicant within 
90 days.
    If the Regional Administrator denies the appeal, the applicant/
subgrantee may submit a second appeal to the Grantee within 60 days of 
the Regional Administrator's denial. The Grantee must forward the 
second appeal to the Regional Administrator within 60 days of receipt. 
The Regional Administrator then forwards the second appeal to FEMA 
headquarters as soon as possible. Upon receipt, FEMA headquarters 
either requests additional information, requests independent scientific 
or technical analysis from experts, or makes a determination within 90 
days.
    Under the arbitration procedures contained in this rule, an 
applicant/subgrantee must submit a request for arbitration, with 
documentation supporting the request, simultaneously to the Grantee, 
applicable FEMA Regional Administrator, and the arbitration 
administrator. For those that do not have a pending appeal with FEMA, 
this request is due within 30 days of receipt of notice of the 
determination that is the subject of the arbitration request. If there 
is an appeal pending with FEMA, or if FEMA has issued a decision on a 
first or second level appeal on or after February 17, 2009, the request 
for arbitration with supporting documentation, and if

[[Page 44765]]

applicable, a statement that they withdraw the pending appeal, must be 
sent simultaneously to the Grantee, the applicable FEMA Regional 
Administrator, and the arbitration administrator by October 30, 2009. 
The Grantee may forward a recommendation to the Regional Administrator 
and the arbitration administrator, with a copy to the applicant, within 
15 days of receipt from the applicant/subgrantee.
    Once formed, the panel will conduct a preliminary conference by 
telephone, and if requested, the parties will be provided a hearing to 
make an oral presentation in person, by telephone conference or other 
means during which all the parties may simultaneously hear all other 
participants. The location will be chosen by the panel. The panel may, 
if it deems appropriate or necessary, seek the advice or expertise of 
independent scientific or technical subject matter experts, or request 
additional information from the parties. The panel will then endeavor 
to issue a written decision within 60 days after the hearing or, if 
there is no hearing, after receipt of FEMA's response to the request 
for arbitration.
    As of July 17, 2009, FEMA had 2,188 project worksheets that had not 
yet received an initial determination from FEMA as well as 44 pending 
appeals for disasters DR-1603, DR-1604, DR-1605, DR-1606, and DR-1607 
that are for projects over $500,000. Adding the 44 existing appeals to 
the 2,188 projects which may result in appealable determinations 
creates a total of 2,232 potential projects that may be eligible for 
arbitration. Not all project worksheets will have contested 
determinations that will result in arbitration, and not all pending 
appeals will be withdrawn in favor of arbitration. To generate the cost 
estimates for this rulemaking, FEMA used existing data for first 
appeals. FEMA receives an average of 364 appeals per year. 
Conservatively estimating that 80 percent of those appeals involve 
large projects, FEMA estimates that 291 appeals are associated with the 
total 5,008 large projects obligated by FEMA per year. As a result, 
FEMA estimates that 5.81 percent of large projects are appealed (5.81% 
= 291/5,008). By applying this percentage, FEMA estimates that 127 
appeals are expected from the 2,188 large projects over $500,000 that 
have not yet received an initial determination from FEMA for disasters 
DR-1693, DR-1604, DR-1605, DR-1606, and DR-1607 (5.81% x 2,188 = 127).
    The arbitration process requires the applicant/subgrantee to submit 
a request for arbitration simultaneously to the Grantee, the applicable 
FEMA Regional Administrator, and the arbitration administrator in the 
form of a written statement from the applicant/subgrantee, which FEMA 
conservatively estimates will take an applicant/subgrantee 
approximately one hour to complete.\2\ Within 15 days of receipt of the 
request for arbitration, the Grantee may forward a recommendation to 
FEMA and the arbitration administrator (with a copy to the applicant/
subgrantee), which FEMA estimates will take the Grantee approximately 
one hour to complete. FEMA therefore estimates that it will take 127 
applicants/subgrantees a cumulative 127 hours to prepare requests for 
arbitration and the four potential Grantees (the States of LA, MS, TX, 
and AL) a cumulative 127 hours to prepare and forward their 
recommendation to FEMA and the arbitration administrator.
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    \2\ This figure was generated using similar estimates from other 
Federal agencies requests for arbitration. For example, National 
Mediation Board receives about 80 ``Requests for Arbitration Panel 
for Airline System Boards of Adjustment'' annually with a burden 
estimate of 20 hours per year (74 FR 10098); or Federal Mediation 
and Conciliation Service's ``Request for Arbitration Services'' 
form, receiving approximately 10,000 per year and estimating about 
10 minutes to complete (71 FR 69130).
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    FEMA obtained the national average hourly wage for a managerial 
($36.50) position in State government from the Bureau of Labor 
Statistics (2009) ``May 2007 National Industry-specific Occupational 
Employment and Wage Estimates'', NAICS 999200--State Government (OES 
Designation). The managerial wage rate was for the ``General and 
Operations Managers position (standard occupational classification 
(SOC) code : 11-1021).'' The Bureau of Labor Statistics' 
hourly wage reflects only the direct cost of employment. FEMA, 
therefore, multiplied the wage rates by 1.4 to derive the full 
employment costs for a managerial ($51.10) position in State 
government. FEMA estimates that it will take applicants/subgrantees and 
Grantees the same amount of time to prepare requests for arbitration as 
it takes them to prepare requests for appeal. Therefore, FEMA estimates 
that this rulemaking will result in a cost savings of $6,490 (= 127 x 
51.10) for applicants/subgrantees and $6,490 (= 127 x 51.10) for 
Grantees. These cost savings occur because there is no requirement for 
an applicant/subgrantee to resubmit documentation through a second 
round of review to exhaust its administrative remedies under 
arbitration, as there is in the appeals process. This method is 
intended to reduce the administrative burden on applicants/subgrantees. 
Applicant/subgrantees may only seek one method for resolution of the 
dispute--appeal or arbitration--not both.
    In addition to the 2,188 project worksheets which have not yet 
received an initial determination from FEMA, as noted above, as of July 
17, 2009, FEMA currently has 44 pending appeals. Although it is not 
expected that all of these appeals will be withdrawn in favor of 
arbitration, as a conservative estimate for the purposes of this 
analysis, FEMA estimates that all 44 will withdraw in favor of 
arbitration. Therefore these applicants/subgrantees will also submit a 
request for arbitration containing a statement that they withdraw their 
appeal. FEMA estimates it will take the applicant/subgrantee 
approximately one hour to prepare its request and the Grantee one hour 
to prepare its recommendation and forward it to FEMA and the 
arbitration administrator. Using the $51.10 wage rate established 
above, FEMA estimates that this change will have a total cost of $2,248 
(= 44 x $51.10) to applicants/subgrantees and $2,248 (= 44 x $51.10) to 
Grantees.
    The panel will conduct a preliminary conference by telephone, and 
if requested, the parties will make an oral presentation in person, by 
telephone conference or other means during which all the parties may 
simultaneously hear all other participants at a location designated by 
the panel. In person appearance at a hearing is entirely voluntary, at 
the applicant's/subgrantee's discretion. If they choose to appear, 
however, the costs to do so are incurred by the applicant/subgrantee. 
Because the hearings may be conducted via telephone or other means 
during which all the parties may simultaneously hear all other 
participants, most applicants are not expected to have any travel 
costs. For those who are granted an in-person hearing, the panel may 
choose to have the hearing in Washington, DC. It is also likely that 
more than one person will attend. This is based on FEMA's experience 
meeting with applicants on second appeals, which usually involves about 
six people. This includes representatives from the applicant, the 
State, and any consultants. Assuming round trip air travel for a team 
of six people and that 25 percent of the applicants/subgrantees will 
make an in-person appearance, (43 = 25% x (127 + 44)), FEMA estimates 
that the travel cost to applicants/subgrantees will be

[[Page 44766]]

$89,526 (= 43 x 6 x $347 \3\)). In addition, should an applicant/
subgrantee choose to appear in person, it will incur (1) lodging, 
meals, and incidental expenses, and (2) the regular-time cost of the 
employee who attends the hearing in lieu of performing that employee's 
regular duties. Assuming that attendance at a hearing will require two 
work days to travel to and attend the hearing, lodging, meals, and 
incidental expenses will be $93,138 (= 43 x 6 people x $361 \4\). The 
time cost to applicants/subgrantees will be $210,941 (= 43 x 6 people x 
16 hours x $51.10). Therefore, the total cost to applicants/subgrantees 
for in-person presentation at a hearing is estimated to be $393,605 (= 
$89,526 + $93,138 + $210,941).
---------------------------------------------------------------------------

    \3\ Average domestic airfare in the 4th quarter of 2008 from the 
U.S. Department of Transportation's Bureau of Transportation 
Statistics (BTS), May 6, 2009, http://www.bts.gov/press_releases/2009/bts021_09/html/bts021_09.html.
    \4\ The amount of $361 includes hotel expense for one night, and 
meals and incidental expenses for two days. The per diem rate for 
the District of Columbia is obtained from the U.S. General Services 
Administration, May 2009, http://www.gsa.gov/Portal/gsa/ep/contentView.do?queryYear=2009&contentType=GSA_BASIC&contentId=17943&queryState=District+of+Columbia&noc=T.
---------------------------------------------------------------------------

    FEMA will pay the fees of the arbitrators, the costs of any expert 
retained by the panel, and the arbitration facility costs, if any. Even 
though FEMA cannot quantify this cost change, it is not likely to be 
economically significant given the number of arbitrations expected from 
disasters DR-1603, DR-1604, DR-1605, DR-1606, and DR-1607. 
Additionally, it will save the Federal government the time and costs it 
would have incurred to process appeals. FEMA estimates that this rule 
will result in a cost increase of $389,363 to applicants/subgrantees, 
and a cost saving of $4,242 to Grantees. Table 1 details the impact of 
the final rule. FEMA did not annualize the impact because this rule 
applies only to disasters DR-1603, DR-1604, DR-1605, DR-1606, and DR-
1607. FEMA has determined that this rule will not have a significant 
economic impact of $100 million or more per year.

              Table 1--Quantified Impact of the Final Rule
------------------------------------------------------------------------
                                            Applicants/
                                            Subgrantees      Grantees
------------------------------------------------------------------------
Requests for arbitration................         -$6,490
Requests forwarded for arbitration......  ..............         -$6,490
Withdraw in favor of arbitration........           2,248           2,248
In-person presentation..................         393,605  ..............
                                         -------------------------------
    Sub-total...........................         389,363          -4,242
                                         -------------------------------
        Grand Total.....................              385,121
------------------------------------------------------------------------

C. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), and 
section 213(a) of the Small Business Regulatory Enforcement Fairness 
Act of 1996, Public Law 104-121, 110 Stat. 847, 858-9 (Mar. 29, 1996) 
(5 U.S.C. 601 note) require that special consideration be given to the 
effects of proposed regulations on small entities. The 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, an RFA is not 
required when a rule is exempt from notice and comment rulemaking under 
5 U.S.C. 553(b). FEMA has determined that this rule is exempt from 
notice and comment rulemaking because it is a rule of agency procedure. 
See 5 U.S.C. 553(b)(3)(A). Therefore, an RFA analysis under 5 U.S.C. 
603 is not required for this rule.

D. National Environmental Policy Act (NEPA)

    This rulemaking is categorically excluded from further review under 
the National Environmental Policy Act (NEPA), Public Law 91-190, 83 
Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321 et seq.), as amended. Action 
taken or assistance provided under sections 403, 406, and 407 of the 
Stafford Act are statutorily excluded from NEPA and the preparation of 
environmental impact statements and environmental assessments by 
section 316 of the Stafford Act. 42 U.S.C. 5159; 44 CFR 10.8(c). NEPA 
implementing regulations governing FEMA activities at 44 CFR 
10.8(d)(2)(ii) categorically exclude 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. Action taken or 
assistance provided under sections 403 and 407 of the Stafford Act are 
categorically excluded under 44 CFR 10.8(d)(2)(xix). Because no other 
extraordinary circumstances have been identified, this rule does not 
require the preparation of either an environmental assessment or an 
environmental impact statement as defined by NEPA.

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 its 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 this rule will have a 
disproportionately high or adverse human health and environmental 
effect on any segment of the population. Accordingly, the requirements 
of Executive Order 12898 do not apply to this rule.

F. Congressional Review of Agency Rulemaking

    FEMA has sent this final rule to the Congress and to the Government 
Accountability Office under the Congressional Review of Agency 
Rulemaking Act, (``Congressional Review Act''), Public Law 104-121, 110 
Stat. 873 (Mar. 29, 1996) (5 U.S.C. 804). This rule is not a ``major 
rule'' within the meaning of the Congressional Review Act.

[[Page 44767]]

G. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, Public Law 104-4, 109 
Stat. 48 (Mar. 22, 1995) (2 U.S.C. 1501 et seq.), applies to any notice 
of proposed rulemaking that would implement any rule which includes a 
Federal mandate that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. If the rulemaking includes a Federal 
mandate, the Act requires an agency to prepare an assessment of the 
anticipated costs and benefits of the Federal mandate. The Act also 
pertains to any regulatory requirements that might significantly or 
uniquely affect small governments. Before establishing any such 
requirements, an agency must develop a plan allowing for input from the 
affected governments regarding the requirements. FEMA has determined 
that this rule will not result in the expenditure by State, local, and 
Tribal governments, in the aggregate, nor by the private sector, of 
$100 million or more in any one year as a result of a Federal mandate, 
and it will not significantly or uniquely affect small governments. In 
light of the foregoing, FEMA has determined that no actions are deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

H. Executive Order 13132, Federalism

    Executive Order 13132, Federalism, 64 FR 43255, 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. This final rule involves no policies that 
have federalism implications under Executive Order 13132.

I. Paperwork Reduction Act of 1995

    This rule contains a collection of information that is subject to 
review by the Office of Management and Budget (OMB) under the Paperwork 
Reduction Act of 1995 (PRA), as amended, Public Law 104-13, 109 Stat. 
163, (May 22, 1995) (44 U.S.C. 3501-3520). The information collection 
included in this rule is approved by OMB under control number 1660-
0017, Public Assistance Progress Report and Program Forms.

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

    Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments, 65 FR 67249, Nov. 9, 2000, applies to agency 
regulations that have Tribal implications, that is, regulations that 
have substantial direct effects 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. Under this Executive Order, to the extent 
practicable and permitted by law, no agency may promulgate any 
regulation that has Tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute, unless funds necessary to pay the direct costs 
incurred by the Indian Tribal government or the Tribe in complying with 
the regulation are provided by the Federal Government, or the agency 
consults with Tribal officials.
    There is no substantial direct compliance cost associated with this 
rule. This rule would not affect the distribution of power or 
responsibilities of Tribal governments.

K. Executive Order 12630, Governmental Actions and Interference With 
Constitutionally Protected Property Rights

    FEMA has reviewed this rule under Executive Order 12630, 
``Governmental Actions and Interference with Constitutionally Protected 
Property Rights'' (53 FR 8859, Mar. 18, 1988) as supplemented by 
Executive Order 13406, ``Protecting the Property Rights of the American 
People'' (71 FR 36973, June 28, 2006). This rule will not affect the 
taking of private property or otherwise have taking implications under 
Executive Order 12630.

L. Executive Order 12988, Civil Justice Reform

    FEMA has reviewed this rule under Executive Order 12988, ``Civil 
Justice Reform'' (61 FR 4729, Feb. 7, 1996). This rule meets applicable 
standards to minimize litigation, eliminate ambiguity, and reduce 
burden.

List of Subjects in 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 discussed in the preamble, the Federal Emergency 
Management Agency amends 44 CFR part 206, subpart G, as follows:

PART 206--FEDERAL DISASTER ASSISTANCE

0
1. 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 5207; 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; 
and E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

0
2. Add Sec.  206.209 to read as follows:


Sec.  206.209  Arbitration for Public Assistance determinations related 
to Hurricanes Katrina and Rita (Major disaster declarations DR-1603, 
DR-1604, DR-1605, DR-1606, and DR-1607).

    (a) Scope. Pursuant to section 601 of the American Recovery and 
Reinvestment Act of 2009, Public Law 111-5, this section establishes 
procedures for arbitration to resolve disputed Public Assistance 
applications under the following major disaster declarations: DR-1603, 
DR-1604, DR-1605, DR-1606, and DR-1607.
    (b) Applicability. An applicant or subgrantee (hereinafter 
``applicant'' for purposes of this section) may request arbitration of 
a determination made by FEMA on an application for Public Assistance, 
provided that the total amount of the project is greater than $500,000, 
and provided that:
    (1) the applicant is eligible to file an appeal under Sec.  
206.206; or
    (2) the applicant had a first or second level appeal pending with 
FEMA pursuant to Sec.  206.206 on or after February 17, 2009.
    (c) Governing rules. An applicant that elects arbitration agrees to 
abide by this section and applicable guidance. The arbitration will be 
conducted pursuant to procedure established by the arbitration panel.
    (d) Limitations--(1) Election of remedies. A request for 
arbitration under this section is in lieu of filing or continuing an 
appeal under Sec.  206.206.
    (2) Final agency action under Sec.  206.206. Arbitration is not 
available for any matter that obtained final agency

[[Page 44768]]

action by FEMA pursuant to Sec.  206.206 prior to February 17, 2009. 
Arbitration is not available for determinations for which the applicant 
failed to file a timely appeal under the provisions of Sec.  206.206 
prior to August 31, 2009, or for determinations which received a 
decision on a second appeal from FEMA prior to February 17, 2009.
    (e) Request for arbitration--(1) Content of request. The request 
for arbitration must contain a written statement and all documentation 
supporting the position of the applicant, the disaster number, and the 
name and address of the applicant's authorized representative or 
counsel.
    (2) Submission by the applicant to the Grantee, the FEMA Regional 
Administrator, and the arbitration administrator. An applicant under 
paragraph (b)(1) of this section must submit its request for 
arbitration in writing simultaneously to the Grantee, the FEMA Regional 
Administrator, and the arbitration administrator within 30 calendar 
days after receipt of notice of the determination that is the subject 
of the arbitration request or by September 30, 2009, whichever is 
later. An applicant under paragraph (b)(2) of this section must make a 
request for arbitration in writing and, if FEMA has not issued a 
decision on the appeal, submit a withdrawal of the pending appeal, 
simultaneously to the Grantee, the FEMA Regional Administrator, and the 
arbitration administrator by October 30, 2009.
    (3) Submission by the Grantee to the arbitration administrator and 
FEMA. Within 15 calendar days of receipt of the applicant's request for 
arbitration, the Grantee must forward the name and address of the 
Grantee's authorized representative or counsel, and may forward a 
written recommendation in support or opposition to the applicant's 
request for arbitration, simultaneously to the FEMA Regional 
Administrator, the arbitration administrator, and the applicant.
    (4) Submission of FEMA's response. FEMA will submit a memorandum in 
support of its position, a copy of the Project Worksheet(s), and any 
other supporting information, as well as the name and address of its 
authorized representative or counsel, simultaneously to the arbitration 
administrator, the Grantee, and the applicant, within 30 calendar days 
of receipt of the applicant's request for arbitration.
    (5) Process for submissions. When submitting a request for 
arbitration, the applicant should describe its claim with sufficient 
detail so that the circumstances of the dispute are clear to the 
arbitration panel. All papers, notices, or other documents submitted to 
the arbitration administrator under this section by the applicant, the 
Grantee, or FEMA will be served on each party's authorized 
representative or counsel. The submitting party will make such service 
by courier or overnight delivery service (such as Federal Express, DHL, 
United Parcel Service, or the United States Postal Service overnight 
delivery), addressed to the party, representative, or counsel, as 
applicable, at its last known address.
    (f) Selection of arbitration panel. The arbitration administrator 
will select the arbitration panel for arbitration and notify the 
applicant, FEMA, and the Grantee of the names and identities of the 
arbitrators selected for the panel.
    (g) Preliminary conference. The arbitration panel will hold a 
preliminary conference with the parties and/or representatives of the 
parties within 10 business days of the panel's receipt of FEMA's 
response to the request for arbitration. The panel and the parties will 
discuss the future conduct of the arbitration, including clarification 
of the disputed issues, request for disqualification of an arbitrator 
(if applicable), and any other preliminary matters. The date and place 
of any oral hearing will be set at the preliminary conference. The 
preliminary conference will be conducted by telephone.
    (h) Hearing--(1) Request for hearing. The panel will provide the 
applicant and FEMA with an opportunity to make an oral presentation on 
the substance of the applicant's claim in person, by telephone 
conference, or other means during which all the parties may 
simultaneously hear all other participants. If the applicant or FEMA 
would like to request an oral hearing, the request must be made no 
later than the preliminary conference.
    (2) Location of hearing. If an in-person hearing is authorized, it 
will be held at a hearing facility of the arbitration panel's choosing.
    (3) Conduct of hearing. Each party may present its position through 
oral presentations by individuals designated in advance of the hearing. 
These presentations may reference documents submitted pursuant to 
paragraph (e) of this section; the parties may not provide additional 
paper submissions at the hearing. If the panel deems it appropriate or 
necessary, it may request additional written materials from either or 
both parties or seek the advice or expertise of independent scientific 
or technical subject matter experts.
    (4) Closing of hearing. The panel will inquire of each party 
whether it has any further argument. When satisfied that the record is 
complete, the panel will declare the hearing closed, unless a post-
hearing submission of additional information or a memorandum of law is 
to be provided in accordance with this paragraph. The hearing will be 
declared closed as of the date set by the panel for the submission of 
the additional information or the memorandum of law.
    (5) Time limits. The panel will endeavor to hold the hearing within 
60 calendar days of the preliminary conference.
    (6) Postponement. The arbitration panel may postpone a hearing upon 
agreement of the parties, or upon request of a party for good cause 
shown. Within 10 business days of the postponement, the arbitration 
panel will notify the parties of the rescheduled date of the hearing.
    (7) Record of the hearing. There will be no recording of the 
hearing, unless a party specifically requests and arranges for such 
recording at its own expense.
    (8) Post-hearing submission of additional information. A party may 
file with the arbitration panel additional information or a memorandum 
of law after the hearing upon the arbitration panel's request or upon 
the request of one of the parties with the panel's consent. The panel 
will set the time for submission of the additional information or the 
memorandum of law.
    (9) Reopening of hearing. The hearing may be reopened on the 
panel's initiative under compelling circumstances at any time before 
the decision is made.
    (i) Review by the arbitration panel. (1) Determination of 
timeliness. Upon notification by FEMA, or on its own initiative, the 
arbitration panel will determine whether the applicant timely filed a 
request for arbitration.
    (2) Substantive review. The arbitration panel will consider all 
relevant written materials provided by the applicant, the Grantee, and 
FEMA, as well as oral presentations, if any. If the panel deems it 
appropriate or necessary, it may request additional written materials 
from either or both parties or seek the advice or expertise of 
independent scientific or technical subject matter experts.
    (j) Ex parte communications. No party and no one acting on behalf 
of any party will engage in ex parte communications with a member of 
the arbitration panel. If a party or someone acting on behalf of any 
party engages in ex parte communications with a member of the 
arbitration panel, the party that engaged in such communication will 
provide a summary or a transcript of the entire communication to the 
other parties.

[[Page 44769]]

    (k) Decision--(1) Time limits. The panel will make every effort to 
issue a written decision within 60 calendar days after the panel 
declares the hearing closed pursuant to paragraph (h)(4) of this 
section, or, if a hearing was not requested, within 60 calendar days 
following the receipt of FEMA's response to the request for 
arbitration. A decision of the panel may take longer than 60 calendar 
days if the arbitration involves a highly technical or complex matter.
    (2) Form and content. The decision of the panel will be in writing 
and signed by each member of the panel. The panel will issue a reasoned 
decision that includes a brief and informal discussion of the factual 
and legal basis for the decision.
    (3) Finality of decision. A decision of the majority of the panel 
shall constitute a final decision, binding on all parties. Final 
decisions are not subject to further administrative review. Final 
decisions are not subject to judicial review, except as permitted by 9 
U.S.C. 10.
    (4) Delivery of decision. Notice and delivery of the decision will 
be by facsimile or other electronic means and by regular mail to each 
party or its authorized representative or counsel.
    (l) Costs. FEMA will pay the fees associated with the arbitration 
panel, the costs of any expert retained by the panel, and the 
arbitration facility costs, if any. The expenses for each party, 
including attorney's fees, representative fees, copying costs, costs 
associated with attending any hearing, or any other fees not listed in 
this paragraph will be paid by the party incurring such costs.
    (m) Guidance. FEMA may issue separate guidance as necessary to 
supplement this section.

    Dated: August 14, 2009.
Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. E9-19994 Filed 8-28-09; 8:45 am]
BILLING CODE 9111-23-P