[Federal Register Volume 74, Number 223 (Friday, November 20, 2009)]
[Rules and Regulations]
[Pages 60203-60214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-27883]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

[Docket ID FEMA-2006-0028]
RIN 1660-AA45


Public Assistance Eligibility

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule.

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SUMMARY: The Federal Emergency Management Agency (FEMA) provides 
financial assistance to State, local, and Tribal governments, as well 
as certain private non-profit organizations, for response and recovery 
activities required as a result of a presidentially-declared major 
disaster or emergency. Assistance may include reimbursement for 
sheltering and evacuation costs

[[Page 60204]]

incurred to assist individuals displaced by a declared major disaster 
or emergency. This rule finalizes the July 2006 interim rule which 
amended FEMA's Public Assistance eligibility regulations to allow 
grantees to seek reimbursement for sheltering and evacuation costs 
incurred outside of the area designated under a Presidential emergency 
or major disaster declaration, if such costs are otherwise eligible for 
FEMA Public Assistance. This rule further clarifies those regulations 
to specify which entities may be eligible for reimbursement for costs 
incurred from providing evacuation and sheltering services outside the 
area of the declared emergency or major disaster, and the procedures 
FEMA will use to reimburse those applicants. The rule also establishes 
the terms ``impact-State'' and ``host-State'' to differentiate between 
the State for which the President has issued a declaration and that 
requests evacuation and/or sheltering assistance, and the State (or 
Tribe) that provides the sheltering and/or evacuation assistance, 
respectively. Finally, the rule makes a procedural change to the way in 
which a host-State receives reimbursement for the regular salary or 
hourly wages and benefits paid to its permanent employees.

DATES: Effective Date: December 21, 2009.

ADDRESSES: The electronic docket for this rulemaking is available on 
the Federal eRulemaking Portal at www.regulations.gov, in Docket ID 
``FEMA-2006-0028.'' A hard copy of the docket may also be viewed at 
FEMA, Office of Chief Counsel, Room 835, 500 C Street, SW., Washington, 
DC 20472-3100.

FOR FURTHER INFORMATION CONTACT: Tod Wells, Acting 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

    FEMA, through its Public Assistance program, provides financial 
assistance to State, Tribal, and local governments, as well as certain 
private non-profit organizations to quickly respond to and assist 
communities to recover from major disasters or emergencies declared by 
the President. In providing assistance through this program, FEMA 
provides a grant to a ``grantee,'' which is typically a State, but may 
also be an Indian Tribal government. 44 CFR 206.201(e) and 206.202(f). 
The grantee administers the program and provides funding directly to 
``subgrantees,'' which may be local governments, eligible private non-
profit organizations, and Indian Tribal governments. An Indian Tribal 
government may choose to be either a grantee or a subgrantee. The 
grantee submits eligible costs incurred by it and/or its subgrantees to 
FEMA for reimbursement.
    Traditionally, the grantee is the State that requests and receives 
a major disaster or emergency declaration from the President, and the 
costs eligible for reimbursement from FEMA are costs incurred in the 
area designated in the major disaster or emergency declaration. Costs 
incurred outside the declared area were not reimbursable. When a State, 
Indian Tribal, or local government, or an eligible private non-profit 
incurred costs as a result of a disaster that occurred elsewhere, the 
State \1\ was required to seek its own emergency declaration to have 
those costs reimbursed.
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    \1\ As defined in the Stafford Act, only States may receive 
major disaster or emergency declarations. Although Indian Tribal 
governments may be grantees under a State's declaration, the 
President does not have the authority to issue a declaration for a 
Tribe. See 42 U.S.C. 5122, 5170, and 5191.
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    In response to Hurricanes Katrina and Rita in 2005, 45 States 
requested and received emergency declarations to recover sheltering 
costs for tens of thousands of evacuees from the Gulf Coast States. 
Declaring an emergency in each of these States \2\ was an imperfect 
method of responding because each State incurred administrative costs 
to request an emergency declaration, and requesting States were subject 
to the cost share requirements of The Robert T. Stafford Disaster 
Relief and Emergency Assistance Act \3\ (Stafford Act). FEMA concluded 
that ``host'' States, Tribes, and local governments could better assist 
``impact'' States needing assistance evacuating and sheltering their 
residents as a result of declared major disasters or emergencies if the 
host-State could obtain reimbursement directly from either the impact 
State, Tribe or local government or directly from FEMA without first 
obtaining an individual emergency declaration.
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    \2\ The standard Federal/State cost share rate is 75/25, 
although it may be raised to 90/10 or 100% Federal. See 42 U.S.C. 
5170(b), 5193(a), and 44 CFR 206.47. The declarations issued to 
States that provided sheltering and/or evacuation services as a 
result of Hurricanes Katrina and Rita in 2005 and Hurricane Gustav 
in 2008 were set by the President at a 100 percent Federal rate. 
There is no guarantee, however, that future disasters will receive a 
100 percent rate as the rate is set on a case by case basis at the 
President's discretion.
    \3\ 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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    On July 14, 2006, FEMA published an interim rule amending its 
Public Assistance eligibility regulations to allow grantees to seek 
reimbursement for sheltering and evacuation costs incurred outside of 
the area designated under a Presidential emergency or major disaster 
declaration, if such costs are otherwise eligible for FEMA Public 
Assistance funding. 71 FR 40025. FEMA, in promulgating the 2006 interim 
rule, recognized the benefit in reimbursing grantees outside of a 
designated area when they are requested to provide, and consequently 
incur, costs for sheltering and evacuation support to evacuees from 
another State, Tribe, or local government.
    In making this change, the 2006 interim rule expanded eligible 
costs to include sheltering and evacuation costs that occur outside of 
a declared area, and allowed States to recover these costs through 
direct Federal reimbursement when such assistance was requested by the 
State with a declaration.
    The expansion of eligible costs to include sheltering and 
evacuation activities that occur outside a declared area affected costs 
both within and outside a declared State. The evacuation and sheltering 
costs provided between local governments within a State may be covered 
by mutual aid agreements, whereas assistance provided outside a state 
may be covered either by a mutual aid agreement between States or 
direct Federal reimbursement to a State from FEMA pursuant to a 
disaster declaration.
    Many local governments have pre-existing mutual aid agreements and 
share materials and services with one another in times of need. Under 
mutual aid agreements, a requesting jurisdiction within a designated 
area may request another jurisdiction outside of the designated area to 
provide evacuation and sheltering services for the requesting 
jurisdiction's residents. Additionally, many States participate in the 
Emergency Management Assistance Compact (EMAC), or have other similar 
agreements, through which the States agree to provide assistance to one 
another when requested. Under a mutual aid arrangement, the 
jurisdiction that requested the assistance reimburses the providing 
jurisdiction for its costs, and then in turn, seeks reimbursement from 
FEMA (through the State, if the requesting entity is an eligible 
subgrantee).
    The 2006 interim rule also allowed other States that provide 
evacuation and sheltering services to recover their costs from FEMA 
after a declared State requests direct Federal assistance pursuant to 
44 CFR 206.208. FEMA provides direct Federal assistance to the

[[Page 60205]]

declared State when a State or Indian Tribal government outside the 
declared area, at FEMA's request, provides sheltering and evacuation 
services to that declared State. States, Tribes, and local governments 
that provide sheltering and/or evacuation assistance do not seek direct 
Federal assistance; the State with the declaration makes the request, 
and then FEMA identifies States and Tribes that are willing and able to 
help. This change, therefore, only affects costs outside a State that 
was granted an emergency or major disaster declaration; it will not 
affect local governments or private non-profit entities within the 
declared State. Only when an impact-State is overwhelmed and lacks the 
capability to perform or contract for emergency work would it turn to 
FEMA for direct Federal assistance. Since a State must exhaust its 
resources before receiving direct Federal assistance from FEMA, there 
would be no resources available within the State to provide evacuation 
and sheltering services.
    FEMA evaluated the effectiveness of the 2006 interim rule following 
mass evacuations from Louisiana, including the City of New Orleans, in 
advance of Hurricane Gustav in August 2008. Although FEMA has found 
that the changes made by the 2006 Public Assistance Eligibility interim 
rule significantly improved the reimbursement process during the 2008 
hurricane season, FEMA identified several areas to further improve the 
procedures for reimbursing evacuation and sheltering assistance. For 
example, although some States preferred to be directly reimbursed by 
FEMA, they requested clarification regarding the reimbursement process 
and which entities would be eligible for direct reimbursement. In the 
Public Assistance program, typically the State for which the major 
disaster or emergency is declared (the ``impact-State'') is the 
grantee, but, in this case, a State without a major disaster or 
emergency declaration providing the evacuation services may receive a 
grant. This new situation raised questions as to whether the State 
without a declaration has the responsibilities of a grantee with 
respect to its grant, or whether it is a subgrantee of the impact-
State. States did not understand who was responsible for the non-
Federal cost share under the 2006 interim rule. The 2006 interim rule 
did not answer whether an undeclared State that provided sheltering and 
evacuation services stood as a grantee or as a subgrantee to the 
declared State, and there was no clear application process in place. 
Grantees are typically responsible for paying the non-Federal cost 
share and for oversight under 44 CFR part 13.
    This confusion led to delays and duplicative application 
requirements for those seeking to recover regular salary or hourly 
wages and benefits paid to an applicant's permanent employees, referred 
to as ``straight-time force account labor costs.'' For example, because 
straight-time force account labor costs were eligible only when 
incurred through mutual aid agreements between States, States sought 
reimbursement for these costs through mutual aid agreements and would 
apply for direct funding from FEMA for the remaining costs. Thus, a 
clear understanding of the procedures for addressing out-of-state 
evacuation and sheltering is essential to FEMA's effective management 
of the Public Assistance program. This final rule clarifies the process 
for FEMA reimbursement of those entities outside a declared area that 
provide sheltering and/or evacuation assistance. Further, it will 
provide a more efficient grant process that is likely to result in more 
States being willing to provide their resources to protect residents of 
another State impacted by a major disaster or emergency.
    FEMA recognized, in addition, the need to reimburse straight-time 
force account labor costs through the direct Federal assistance 
process. Public Assistance grants are generally not available to 
reimburse force account straight-time for emergency work. 44 CFR 
206.228(a)(2). Since an applicant's costs for permanently employed 
personnel are pre-disaster existing resource costs the employer would 
incur in addressing its responsibilities regardless of whether the 
event occurred, these costs are not eligible. Overtime wages are 
reimbursable, however, for permanent employees working extra hours in 
performing eligible emergency work as a result of the declared 
emergency or major disaster. Labor costs, including overtime wages, 
moreover, to backfill employees assigned to perform eligible emergency 
work in support of the declared emergency or major disaster are also 
reimbursable.
    FEMA currently reimburses straight-time force account labor costs 
when States use the mutual aid process (such as EMAC). These costs are 
eligible under mutual aid because the jurisdiction providing the 
assistance under the agreement is considered a contractor hired as a 
result of the declared event to address the needs of another 
jurisdiction. Contrary to the typical disaster assistance subgrantee, 
States that host another State's residents are not expending pre-
budgeted costs to address their own governmental responsibilities. FEMA 
has been repeatedly advised that States assisting other States' 
residents are unable and unwilling to assume this added expense should 
a future disaster occur. This final rule, therefore, makes a change in 
procedure that allows for the reimbursement of straight-time force 
account labor to host-States directly from FEMA, rather than solely 
through the mutual aid process. This change is strictly procedural, and 
does not otherwise affect the eligibility of those costs, or the amount 
reimbursed. This change is expected to result in more States being 
willing to provide host-State sheltering assistance.
    FEMA, in this rule, addresses public comments received on the 
interim rule, finalizes the regulations, and implements these 
procedural improvements. This rule establishes definitions for 
``impact-State'' and ``host-State'' to clearly differentiate between 
the State that is being directly impacted by the event resulting in a 
Presidential emergency or disaster declaration and has requested direct 
Federal assistance to address its evacuation and sheltering needs out 
of state, and the State that is, at FEMA's request, providing the 
evacuation and sheltering to residents from the designated areas. The 
rule more clearly articulates the entities that may be eligible to act 
as a host-State, and establishes application procedures for host-States 
seeking reimbursement for evacuation and sheltering activities directly 
from FEMA. Finally, the rule revises the procedure by which host-States 
receive reimbursement of straight-time force account labor costs. As 
with the 2006 interim rule, this rule allows for both mechanisms for 
reimbursement--a host-State may receive reimbursement either through a 
mutual aid agreement or by direct reimbursement from FEMA.

II. Discussion

A. Amendments to FEMA's Public Assistance Regulations Under This Final 
Rule

1. Designation of Affected Areas--Clarification of Terminology
    FEMA's regulations occasionally refer to ``disaster-affected'' 
areas or ``designated disaster'' areas in sections that apply to both 
emergencies and major disasters. To remove the potential that one could 
misconstrue the use of the term ``disaster'' as FEMA's intent to 
exclude application during declared emergencies, FEMA has revised the

[[Page 60206]]

language to be more precise. The term ``disaster-affected'' has been 
replaced with the term ``affected'' in 44 CFR 206.40(b). The word 
``disaster'' has been removed before ``affected'' in 44 CFR 
206.2(a)(6). The term ``designated disaster area'' has been replaced 
with ``designated area'' in 44 CFR 206.223(a)(2), and the words 
``emergency or,'' have been added before the phrase ``major disaster 
event'' in 44 CFR 206.223(a)(1). Similarly, to clarify that 44 CFR 
206.208(a) applies to emergency assistance under an emergency 
declaration as well as a major disaster declaration, this rule adds 
Stafford Act citations to that section.
2. Direct Reimbursement for Host-State Evacuation and/or Sheltering--
Clarification of Procedure and General Eligibility
    As a result of the 2006 interim rule, a State or Tribe may be 
reimbursed for costs incurred from evacuation and sheltering activities 
performed outside the designated area. This rule amends FEMA 
regulations to align with the preamble of the 2006 interim rule and 
clarify that a State with a Stafford Act declaration may request direct 
Federal assistance from FEMA for evacuation and/or sheltering 
activities that occur outside the State. In doing so, the rule points 
applicants to the eligibility requirements for those who may provide 
evacuation and/or sheltering assistance when requested, what costs are 
eligible for reimbursement, and establishes the procedures the 
providing entity must follow to seek reimbursement. The State with a 
Presidential declaration may also request assistance from another State 
on its own, through a mutual aid agreement (such as EMAC), but this 
rule does not specifically address that option since mutual aid costs 
are already reimbursed by FEMA.
    Direct Federal assistance under 44 CFR 206.208 applies when a State 
lacks the capability to perform or contract for emergency work. When 
this occurs, the State asks FEMA for assistance. In this rule the 
requesting State is referred to as the ``impact-State.'' When such a 
request is made, FEMA will ask another State or an Indian Tribal 
government if it is capable and willing to provide sheltering and/or 
evacuation assistance to the impact-State. If such State or Indian 
Tribal Government is capable and willing, FEMA will then provide direct 
reimbursement through a grant to the State or Indian Tribal government 
that provides evacuation and/or sheltering activities. The providing 
State or Indian Tribal government is referred to in this rule as the 
``host-State'' or ``host-Tribe,'' respectively, or collectively as the 
``host-State.'' Through the direct Federal assistance process, the 
host-State is a grantee. Although it is obtaining assistance as a 
result of the impact-State's declaration, it is not a subgrantee of the 
impact-State. This means that although the impact-State will continue 
to incur the Federal cost-share for the assistance, the impact-State is 
not responsible for the oversight of the host-State's grant under the 
requirements of 44 CFR part 13 as it would for subgrantees. The cost-
share requirements for impact-States are discussed more fully elsewhere 
in this preamble.
    FEMA's regulations set out the criteria that routinely apply when 
direct Federal assistance is requested by and provided to a State that 
has received a Stafford Act declaration. 44 CFR 206.208. This rule 
clarifies that the criteria also apply to a host-State and an impact-
State. For example, the impact-State is responsible for the non-Federal 
cost share under 44 CFR 206.208(b)(iii) and as required in 44 CFR 
206.208(c), the requested work must be eligible under the Public 
Assistance eligibility criteria contained in Subpart H, Public 
Assistance Eligibility. Since the criteria set out in 44 CFR 206.208 
apply to an impact-State's request for direct Federal assistance, as 
well as to how FEMA can provide such assistance, a provision has been 
added to 44 CFR 206.208 that specifically addresses host-State 
reimbursement.
    The 2006 interim rule was also silent with respect to when and to 
which entity FEMA would award a grant for direct Federal reimbursement. 
FEMA must take into consideration the host-State's evacuation and 
sheltering capabilities before it can award a grant to the host-State 
to protect against the possibility of individuals being sent to States 
that are unable to appropriately shelter them. Neither FEMA nor the 
impact-State should send people to a host-State, as a matter of policy, 
if that host-State is unable to meet the needs of the evacuees. A grant 
to a State that cannot host evacuees would not serve the purpose of 
aiding the impact-State. The determination of a host-State's capability 
will be made on a case-by-case basis and the criteria will vary 
depending upon the specific needs of the impact-State, but will 
generally focus on the availability of short or mid-term housing, and 
equipment for evacuation activities. This rule adds a provision to 44 
CFR 206.208 to address this need, providing that a grant to a host-
State is available when FEMA determines that a host-State has 
sufficient capability to meet some or all of the sheltering and/or 
evacuation needs of the impact-State.
    To establish a record of the agreement and reduce confusion and 
miscommunication, this rule adds a requirement to 44 CFR 206.208 that 
the host-State must agree in writing to provide evacuation and/or 
sheltering assistance to individuals from the impact-State. This 
agreement is referred to as the commitment letter, and is provided to 
FEMA before the execution of the FEMA/Host-State Agreement.
    The 2006 interim rule also lacked sufficient clarity with respect 
to the host-State's obligation to enter into a written agreement with 
FEMA. This rule clarifies that a host-State must enter into a FEMA/
Host-State Agreement (similar to a FEMA/State Agreement) before grant 
funds will be awarded. This FEMA/Host-State Agreement, which covers the 
conditions of the grant award, is consistent with that required of a 
declared State grantee pursuant to 44 CFR 206.44. The FEMA/Host-State 
Agreement also includes a provision on the cost share.
    Grantees are required by the Stafford Act and FEMA's implementing 
regulations to pay a percentage share of the costs of the Federal 
assistance, known as the non-Federal cost share. See 42 U.S.C. 5170(b), 
5193(a), and 44 CFR 206.47. Such costs would include those for 
evacuation and sheltering activities. This cost share requirement 
applies whether the cost is incurred through mutual aid or through 
direct Federal assistance. The Federal/non-Federal cost share for a 
grant to a host-State to evacuate and/or shelter individuals from the 
impact-State is the same as the cost share established for all other 
Category B, Emergency Protective Measures, for the declared major 
disaster or emergency. As with all other assistance under the 
declaration, the non-Federal cost share for host-State sheltering is 
the responsibility of the impact-State under its declaration. This 
means that the host-State will be reimbursed for 100 percent of its 
eligible costs and the impact-State will continue to be responsible for 
the non-Federal cost share as agreed to in its FEMA/State Agreement. 
FEMA finds that the host-State should be reimbursed for 100 percent of 
its eligible costs because it is using its State resources to aid 
individuals from another State. Such costs are not part of a host-
State's annual budget. For impact-States, these costs would have been 
borne by the impact-State had they sheltered their residents in-State, 
or requested assistance from the host-State themselves through mutual 
aid. This clarification, therefore, adds no new

[[Page 60207]]

costs for the impact-State. An impact-State must agree, when requesting 
direct Federal assistance for evacuation and sheltering, to provide the 
non-Federal cost share for all eligible costs incurred by any host-
State to ensure that no improper Federalism implications occur and that 
impact-States knowingly and willingly agree to incur these costs.
    States have expressed some confusion as to whether host-State 
grantees are required to submit the same information, and undertake the 
same obligations as other grantees. The requirements for host-State 
direct reimbursement under 44 CFR 206.202(f)(1) and 206.208 should be 
read together. A host-State's responsibilities, including the 
requirement to assume the responsibilities of a Public Assistance 
grantee with respect to its grant award, are set out in 44 CFR 
206.202(f). The host-State assumes these responsibilities because the 
host-State is receiving a direct grant from FEMA and is therefore 
acting as a grantee. For clarity, in 44 CFR 206.208, this rule 
specifically adds a reference to 44 CFR 206.202(f)(1), Host-State 
Evacuation and/or Sheltering.
    This rule clearly states that, as a grantee, the host-State must 
submit a Standard Form 424, Application for Federal Assistance, to 
apply for reimbursement from FEMA. SF-424 is not a new requirement, as 
FEMA requires this form from all grantees under 44 CFR 206.202(e). The 
host-State is responsible for this and other grants management 
provisions in the regulation only with respect to its evacuation/
sheltering grant. FEMA also requires all grantees to develop a State 
administrative plan. See 44 CFR 206.207. The State administrative plan 
includes the designation of State agencies responsible for program 
administration, identifies Public Assistance staffing functions, and 
includes procedures for conducting briefings, notifying potential 
applicants, processing appeal requests, and other procedures for 
administering the Public Assistance program. Grantees are required to 
update their administrative plans under 44 CFR 206.207. This rule 
clearly states that this requirement also applies to host-States under 
44 CFR 206.202(f).
3. Straight-Time Force Account Labor
    As discussed above, FEMA currently reimburses applicants for the 
overtime costs of their permanently employed personnel who perform 
emergency work as a result of a declared event when direct Federal 
assistance is provided. FEMA does not, however, reimburse the straight-
time wages for these employees. When a host-State provides evacuation 
and/or sheltering assistance under a mutual aid agreement, however, 
FEMA does reimburse host-State force account labor for both straight-
time and overtime. FEMA treats the costs incurred by the host-State 
(referred to as a ``providing entity'') under a mutual aid agreement as 
contract labor, with regular time and overtime wages and certain 
benefits eligible, provided the labor rates are reasonable.
    FEMA's reimbursement of regular- or ``straight-time'' salaries is 
generally governed by 44 CFR part 13 (Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments); 2 CFR Part 225 (Cost Principles for State, Local, and 
Indian Tribal Governments); OMB Circular A-102, Grants and Cooperative 
Agreements with State and Local Governments; and OMB Circular A-87, 
Principles for Determining Costs Applicable to Grants and Contracts 
with State, Local, and Federally Recognized Indian Tribal Governments. 
FEMA has determined that it is appropriate to reimburse the regular- or 
straight-time salaries of a host-State's permanent employees' eligible 
evacuation and sheltering activities on behalf of an impact-State 
because a host-State is providing assistance to an impact-State's 
residents. The host-State is using its own resources for another 
State's residents, and, therefore, should be wholly compensated for the 
assistance that it has not budgeted. This assistance is not being 
provided for the benefit of the host-State's taxpayers.
    As a result of Hurricanes Katrina and Rita, FEMA recognized the 
importance of host-State evacuation and sheltering activities in 
response to a large-scale event. Host-States should be encouraged to 
provide such assistance for future large scale events, as necessary, 
and delay in reimbursement through the impact-State discourages such 
assistance. Allowing reimbursement of straight-time force account labor 
under both the mutual aid and direct grant mechanisms ensures 
consistency and fairness in reimbursement of these eligible costs. 
Allowing this reimbursement also avoids any potential administrative 
burden of the States being required to consider differences in eligible 
costs when considering which reimbursement mechanism is most suitable. 
This rule, therefore, establishes a process for FEMA to provide direct 
Federal reimbursement to a host-State for straight-time salaries and 
benefits of a host-State's permanently employed personnel who perform 
evacuation and/or sheltering activities. A host-State's straight and 
overtime costs may be directly reimbursed through the host-State's 
grant from FEMA.
4. Definitions of Host-State and Impact-State
    FEMA makes frequent reference to entities within the designated 
area of a Presidential emergency or major disaster declaration and 
entities that provide evacuation and/or sheltering assistance outside 
the State receiving the emergency or major disaster declaration. FEMA 
has recognized the need to assign shorter, uniform terms to identify 
these entities. A uniform definition ensures consistency and clarity in 
implementation of this regulation. This final rule therefore adds 
definitions for ``host-State'' and ``impact-State'' to 44 CFR 206.201, 
which is the definitions section for the Public Assistance project 
administration regulations.
    A ``host-State'' is a State or Indian Tribal government that by 
agreement with FEMA is providing sheltering and/or evacuation support 
to evacuees from an impact-State. An ``impact-State'' is the State for 
which the President has declared an emergency or major disaster and 
that, due to a need to protect its affected residents, requests 
assistance from FEMA pursuant to 44 CFR 206.208 to evacuate and/or 
shelter such individuals outside the State.
5. Definitions of Grantee and Indian Tribal Government
    Since host-States are grantees, as described in this rulemaking, 
FEMA is updating the definition of ``grantee.'' Typically, the declared 
State is the grantee eligible to receive assistance under the emergency 
or major disaster declaration, and is responsible for the 
administration and use of assistance provided under the Public 
Assistance program for that declaration. The revised definition of 
grantee states that for purposes of the Public Assistance regulations, 
the declared State is the grantee, except as noted in 44 CFR 
206.202(f). The exception under paragraph (f) allows a host-State to 
apply for a grant for the specific purpose of providing sheltering and 
evacuation activities to the impact-State that requested direct Federal 
assistance from FEMA. Under this exception, a host-State reimbursed by 
FEMA pursuant to 44 CFR 206.208 for sheltering and/or evacuation 
activities has all of the responsibilities of the declared State in 
administering its Public Assistance grant. FEMA makes a similar 
clarifying amendment to the definition of ``grantee'' in 44 CFR 206.431 
to note that the grantee is generally the declared State. FEMA has 
added this clarification

[[Page 60208]]

because before this rulemaking the ``grantee'' has always been presumed 
to be the declared State for both the Public Assistance and Hazard 
Mitigation Assistance programs. Without this change, FEMA was concerned 
that in the absence of express language to the contrary, the definition 
would leave the impression that a State is not required to be the 
declared one to receive assistance under the Hazard Mitigation Grant 
Program.
    Before this final rule, the definition of grantee referred to a 
State, and 44 CFR 206.202(f) created an exception that allowed Indian 
Tribal governments affected by an emergency or major disaster to apply 
directly to FEMA for a grant when State law prohibits a State to act as 
grantee for an Indian Tribal government. This rule merges the exception 
for Indian Tribal governments that appeared in paragraph (f) into the 
definition of grantee to clarify that an Indian Tribal government in 
the affected area may choose to be a grantee, or it may act as a 
subgrantee under the State receiving the declaration. This merger gives 
Indian Tribal governments the level of recognition commensurate with 
the declared States because both can apply directly to FEMA for 
disaster assistance and is consistent with the other program 
definitions of the term ``grantee'' throughout FEMA's regulations. This 
merger into the definition is consistent with FEMA's established 
practice, recognition of, and commitment to, a government-to-government 
relationship with Indian Tribal governments. FEMA recognizes the tribal 
right of self-government that flows from the inherent sovereignty of 
Tribes as nations, and that Federally-recognized Tribes have a unique 
and direct relationship with the Federal government. This sovereign 
status also permits a qualified Indian Tribal government to deal 
directly with FEMA with respect to Public Assistance funding for which 
it is eligible under a Presidentially-declared emergency or major 
disaster declaration. In choosing to act as grantee, the Indian Tribal 
government assumes the responsibilities of grantees, including the 
reporting, recordkeeping, and other requirements contained in the 
program regulations. This choice and assumption also comports with the 
intent of FEMA's policy, Final Agency Policy for Government-to-
Government Relations with American Indian and Alaska Native Tribal 
Governments, 64 FR 2096 (Jan. 12, 1999), as available at http://www.fema.gov/government/tribal/natamerpolcy.shtm, which permits a 
qualified Tribal government to interact directly with FEMA and act as 
its own grantee.
    Finally, unlike many of FEMA's other regulatory parts, Subpart G 
lacked a definition of the term ``Indian Tribal government.'' The 
definition added to 44 CFR 206.201 matches the definition of ``Indian 
Tribal government'' in other sections of FEMA regulations, such as at 
44 CFR 201.2 (Mitigation Planning), 206.430 (Hazard Mitigation Grant 
Program), and 207.2 (Management Costs).
    FEMA will be updating its guidance to the States to reflect the 
changes made in this rule. When these documents are available, they 
will be posted to FEMA's Web site at http://www.fema.gov, as well as to 
the docket for this rulemaking at http://www.regulations.gov, Docket 
ID: FEMA-2006-0028.

B. Discussion of Public Comments on the 2006 Interim Rule

    FEMA received four comments on the 2006 interim rule. The 
commenters included one emergency management organization, one State, 
and two local governments.
1. General Comments
    The International Association of Emergency Managers (IAEM) stated 
that it received responses from 10 of its members, all in favor of the 
rule. The Georgia Emergency Management Agency (GEMA) stated that it was 
in favor of the rule because it facilitates a reasonable means of 
providing sheltering and evacuation support outside the impacted areas 
without imposing all of the other requirements associated with 
providing access to Public Assistance funding. The Onslow County North 
Carolina Emergency Services & Homeland Security Department (Onslow 
County) stated that the rule allowed non-affected counties to better 
support affected areas without absorbing the costs directly in their 
smaller budgets.
    These comments reflect one of the main reasons FEMA promulgated the 
interim rule: to reduce the costs and administrative burden placed on 
the host-State. By eliminating the requirement that a host-State 
request and receive an emergency declaration from the President before 
recouping eligible costs for evacuation and sheltering activities, the 
host-State is not required to activate the same level of emergency 
management plans, staff, and resources that are normally required to 
manage and coordinate operations with FEMA.
2. Self-Evacuees
    GEMA expressed concern that communities outside the designated 
areas that provide sheltering and evacuation for self-evacuees would 
not be eligible for direct reimbursement from FEMA. GEMA was concerned 
that the volume of individuals that may choose to evacuate and seek 
shelter without government support, could overwhelm existing resources 
and necessitate the opening of mass sheltering operations to provide 
basic services to the evacuees. For example, displaced individuals may 
choose to evacuate without government support temporarily to a more 
distant region due to family connections or other perceived advantages, 
even if FEMA-funded shelter operations were available in other 
jurisdictions nearer the impacted area. If a sufficient number of 
evacuees requiring shelter chose to relocate to areas other than those 
designated by the impacted communities or by FEMA, then, GEMA asserted, 
the receiving community should have some recourse to seek financial 
reimbursement in the event that the number of displaced, non-housed 
persons necessitates the opening of sheltering services.
    FEMA generally does not have the authority to provide grant funds 
under the Stafford Act outside of the designated areas of the 
Presidential declaration. If a local government finds itself 
overwhelmed by self evacuees, but is not included in the State's 
designated areas, the State may find it is appropriate to request that 
FEMA include the county among the designated areas under the 
declaration. As discussed elsewhere in this preamble, FEMA has been 
delegated the authority to amend emergency and major disaster 
declarations to add counties when appropriate, and frequently exercises 
this authority.
    If a State without a Stafford Act declaration is burdened with 
providing sheltering support to self-evacuees, the State may ask the 
declared State to seek direct Federal assistance from FEMA under the 
provisions of this rule, or seek reimbursement through a mutual aid 
agreement with the declared State. Although FEMA recommends mutual aid, 
in some cases where there is a large-scale event, direct reimbursement 
from FEMA may be available in accordance with this rule.
3. Mutual Aid Agreements--Burden on Local Governments
    The City of Plano was concerned that mutual aid agreements would 
burden local governments. The commenter stated that it would not be 
practical for

[[Page 60209]]

local governments to administer mutual aid agreements because it would 
be inefficient and a complex task for local governments to predetermine 
the host entities across the United States with which it should enter 
into a mutual aid agreement. The commenter also expressed concern that 
interstate agreements would be difficult to enforce and that local 
governments would not have sufficient funds to reimburse the host 
entities. Further, the City of Plano asserts that cities would be less 
likely to participate if, as stated in the 2006 interim rule, the 
eligible applicant will reimburse the providing entity and then be 
reimbursed by FEMA.
    FEMA encourages the use of mutual aid agreements, including the 
Emergency Management Assistance Compact (EMAC). A mutual aid agreement 
is an efficient mechanism for providing evacuation and sheltering 
services when there are a relatively small number of disaster victims. 
States may enter into post-event mutual aid agreements, which would 
negate the difficulty local governments may have in determining host 
entities in advance. A providing entity's costs for evacuation and 
sheltering services under a mutual aid agreement are eligible for 
reimbursement by FEMA through the declared State, just as those costs 
are eligible if the declared State seeks direct assistance from FEMA.
    The 2006 interim rule provides, and this rule clarifies, that a 
State (or Tribal government) may become a host-State when an impact-
State requests direct Federal assistance from FEMA, FEMA approves the 
request, and requests the host-State to provide evacuation and 
sheltering services outside of the designated area. In this situation, 
the host-State would receive direct reimbursement from FEMA. This 
provides an alternate method to mutual aid agreements and may be more 
appropriate for large-scale events, such as Hurricanes Katrina and 
Rita, where the impact-State is overwhelmed and lacks the capability to 
respond to the need.

IV. Regulatory Requirements

A. Administrative Procedure Act

    The Administrative Procedure Act requires FEMA to publish notice 
and consider public comments before promulgating substantive amendments 
to regulations, 5 U.S.C. 553(b), except when the amendment is a 
``rule[] of agency organization, procedure, or practice * * *.'' 5 
U.S.C. 553(b)(3)(B). This rule makes one change that was not 
contemplated in the 2006 interim rule to the manner in which FEMA 
reimburses a host-State for straight-time force account labor costs 
incurred in support of evacuation from an impacted State. As discussed 
throughout this preamble, straight-time force account labor costs are 
fully reimbursable by FEMA if the service is provided through a mutual 
aid agreement with the impact-State. This rule amends the regulations 
to permit these costs to be directly reimbursable by FEMA. The rule 
does not increase or decrease those costs, but merely changes the 
method by which host-States obtain the funds. This amendment is a rule 
of agency organization, procedure, or practice that is exempt from the 
notice and comments requirements under 5 U.S.C. 553(b)(A).

B. Executive Order 12866, Regulatory Planning and Review

    FEMA has prepared and reviewed this rule consistent with Executive 
Order 12866, Regulatory Planning and Review. This rule has been deemed 
a significant, but not economically significant regulatory action by 
the Office of Management and Budget (OMB), and has, therefore, been 
reviewed by OMB.
    This rule results in $51,681 in cost savings for each large scale 
disaster that requires evacuation and sheltering activities to occur 
outside the area designated by the major disaster or emergency 
declaration. These savings are due to administrative savings resulting 
from States not being required to request Presidential declarations of 
their own for the event, but being able to act as ``host-States'' under 
another State's declaration. As a result, States do not need to 
prepare, and FEMA is not required to review and analyze, those 
declaration requests to make a recommendation to the President, thereby 
avoiding the administrative cost associated with such a review. This 
rule does not change the amount of assistance provided by FEMA for 
evacuation and sheltering activities, only the procedures by which 
States seek and receive reimbursement from FEMA for those costs.
    Host-State evacuation and sheltering assistance is needed in only 
rare occurrences, and to date has only occurred twice--for Hurricanes 
Katrina and Rita in 2005 and Hurricane Gustav in 2008. In 2005, States 
not directly impacted by Hurricanes Katrina or Rita received a large 
number of evacuees from the impacted States of Louisiana, Mississippi, 
and Alabama. Although they were not actually struck by the storm, these 
States that provided evacuation and sheltering services to evacuees 
from the impacted States incurred costs. To reimburse these costs, the 
President declared emergencies in many of these States, thereby making 
Federal assistance available for the eligible costs they incurred in 
providing evacuation and sheltering assistance to evacuees from the 
impacted States. Without obtaining a declaration, costs incurred by 
these States were not eligible for Federal reimbursement because the 
evacuation and sheltering assistance was provided outside the 
designated areas of the impacted States.
    At the time Hurricanes Katrina and Rita struck, costs eligible for 
reimbursement were limited to those incurred within a designated area. 
Therefore, if a State incurred costs to evacuate and/or shelter 
residents from another State, that ``host-State'' was required to 
request and obtain its own emergency declaration to recoup eligible 
costs. Forty-five of the fifty States received Presidentially-declared 
emergencies so that they could receive Federal assistance for costs 
incurred after Hurricanes Katrina and Rita for evacuation and 
sheltering activities.\4\ FEMA provided approximately $752.62 million 
in Public Assistance funding for reimbursement for host-State 
evacuation and sheltering activities for Hurricanes Katrina and Rita. 
The Federal cost share (which was 100 percent) for some States, such as 
Texas, Arkansas, and Tennessee, where costs totaled $558.28 million, 
$44.28 million and $33.66 million, respectively, was substantial. Even 
States geographically distant from States directly struck by Katrina 
received Federal reimbursement for their costs. For example, 
Massachusetts received $5.72 million. It became apparent that an 
emergency declaration was not the appropriate vehicle by which FEMA 
should reimburse a host-State for sheltering and evacuation activities. 
Sheltering and evacuation are a limited set of activities that 
normally, by themselves, would not warrant a Presidentially-declared 
emergency. FEMA needed a mechanism other than a host-State declaration 
to allow reimbursement for sheltering and evacuation activities outside 
of the areas contained in a Presidential declaration.
---------------------------------------------------------------------------

    \4\ Data Source: National Emergency Management Information 
System (NEMIS), FEMA 2009; Enterprise Data Warehouse, FEMA 2009.
---------------------------------------------------------------------------

    FEMA published the interim rule to address this need and to allow 
FEMA to reimburse sheltering and evacuation costs incurred by State, 
local, and Tribal governments that were located outside of a 
Presidentially-declared emergency or major disaster area, if the costs 
were otherwise eligible for Public Assistance funding.
    Two mechanisms are provided for reimbursement. Under one mechanism,

[[Page 60210]]

an impacted State may request an entity outside of the designated area 
to provide evacuation and sheltering services for the impacted State's 
citizens. The entity that provides the evacuation or sheltering 
services may seek reimbursement under a mutual aid or similar agreement 
with the impacted State. Under the other mechanism, the impacted State 
may seek direct Federal assistance from FEMA, and FEMA may, in turn, 
request an entity outside of the designated area to provide evacuation 
and sheltering services for the impacted State. This mechanism would 
allow the providing entity to directly receive reimbursement of its 
eligible costs from FEMA.
    States that provide evacuation and sheltering services outside of 
the designated area(s) are no longer required to request and receive an 
emergency declaration from the President to recoup eligible Public 
Assistance costs for those services under the 2006 interim rule. States 
avoid the administrative requirements associated with requesting an 
emergency declaration or requesting additional designated areas to an 
existing emergency or major disaster declaration. As a result, FEMA is 
not required to review and analyze those declaration requests to make a 
recommendation to the President, thereby avoiding the administrative 
cost associated with such a review.
    The Governor of the State requesting an emergency declaration from 
the President submits:
     Confirmation that the Governor has executed the State 
Emergency Plan;
     Preliminary damage assessment;
     State resources committed (a description of State and 
local resources that have already been committed) and an estimate of 
Federal assistance needed; and
     Certification that the State will comply with the cost-
sharing requirements of the Stafford Act.
    States incur costs to gather and submit this information to FEMA. 
FEMA estimates 33 burden hours for a State to prepare and submit a 
major disaster or emergency declaration.\4\ To determine that figure, 
FEMA assumes that the 33 burden hours include 9 hours of work spent by 
management staff and 24 hours by technical staff per major disaster or 
emergency declaration.
---------------------------------------------------------------------------

    \4\ 74 FR 36498 (2009), Collection of Information Notice, The 
Declaration Process. On an annual basis, FEMA estimates 56 
respondents average 6 responses per year at 33 hours per response, 
totaling an estimated 11,088 burden hours per year for submission of 
a declaration request.
---------------------------------------------------------------------------

    FEMA obtained the national average hourly wages for managerial 
($46.91) and technical ($24.03) positions in State government from the 
Bureau of Labor Statistics.\5\ The managerial wage rate was for the 
``Chief Executive'' position (standard occupational classification 
(SOC) code : 11-1021). The technical wage rate was for the 
``First-Line Supervisors/Managers of Office and Administrative Support 
Workers'' position (SOC code 43-1011) in State government. The 
hourly wage reflects only the direct cost of employment. FEMA 
multiplied the wage rates by 1.4 to derive the full employment costs 
for managerial ($65.67) and technical ($33.64) positions in State 
governments. Using these figures, FEMA estimates the cost savings 
experienced by States for not having to request a major disaster or 
emergency declaration is $1,398. Table 1 details the cost to a State 
for submitting a major disaster or emergency declaration.
---------------------------------------------------------------------------

    \5\ The Bureau of Labor Statistics (2009). ``May 2007 National 
Industry-specific Occupational Employment and Wage Estimates, NAICS 
999200--State Government (OES Designation).'' http://www.bls.gov/oes/current/naics4_999200.htm#b43-0000.

------------------------------------------------------------------------
                                    Managerial   Technical     Hours by
            Activities               ($65.67)     ($33.64)    activities
------------------------------------------------------------------------
Data gathering for Governor's                0           24           24
 request.........................
Preparing and submitting                     9            0            9
 Governor's request..............
                                  --------------------------------------
    Total burden hours...........            9           24           33
                                  ======================================
Estimated cost savings...........         $591         $807       $1,398
------------------------------------------------------------------------

    As part of FEMA's review of a declaration request, FEMA regional 
staff analyzes the information obtained by joint Federal, State, and 
local preliminary damage assessments. FEMA's regional summary, regional 
analysis, and recommendation includes a discussion of State and local 
resources and capabilities, and other assistance available to meet 
disaster-related needs. The Administrator of FEMA then submits a 
recommendation to the President and provides a copy of the Governor's 
request. FEMA takes the following steps in reviewing a major disaster 
or emergency declaration request:
     Federal officials, with the assistance of State, local, 
and Tribal officials, prepare a preliminary damage assessment.
     The FEMA Regional Administrator evaluates the damage and 
requirements for Federal assistance and makes a recommendation to the 
FEMA Administrator.
     The FEMA Administrator reviews the Governor's request and 
the regional analysis and then makes a recommendation to the President.
    FEMA estimates that it expends 48 burden hours in reviewing a major 
disaster or emergency declaration request. The 48 burden hours 
represent 9.6 hours spent by 5 management-level employees. This time is 
not consecutive, as FEMA often submits recommendations to the President 
on declaration requests within the span of a single day. These 
individuals represent program specialists, attorneys, and other senior 
officials, and the time includes work to review the Governor's request, 
generate FEMA's recommendation to the President, and activities that 
occur after the President grants or denies the Governor's request (such 
as publishing a Federal Register Notice).
    FEMA obtained the hourly wages for a managerial (GS 15, Step 5, 
$65.62), position in the Federal government from the U.S. Office of 
Personnel Management.\6\ This hourly wage includes the locality pay for 
the area of Washington, DC and reflects only the direct cost of 
employment. The full employment cost is $91.87. FEMA used the same 
factor of 1.4 to derive the full cost wage for Federal employees as it 
used for State employees.
---------------------------------------------------------------------------

    \6\ U.S. Office of Personnel Management (2009). Salary Table 
2009--Washington, DC Area, http://www.opm.gov/flsa/oca/09tables/html/dcb_h.asp.
---------------------------------------------------------------------------

    FEMA estimates that the cost to FEMA to review a request for a 
major disaster or emergency declaration and to make a recommendation to 
the President is $4,410 (= $91.87 x 48). Therefore, the total 
administrative cost savings both to FEMA and State governments per 
major disaster or

[[Page 60211]]

emergency declaration is $5,808 (= $1,398 + $4,410).
    Hurricane Gustav in August 2008 has been the only disaster event 
since the 2006 interim rule was published that required assistance \7\ 
from host-States for sheltering and evacuation. As a result of 
Hurricane Gustav, FEMA provided approximately $42 million to the nine 
host-States: Alabama, Arkansas, Indiana, Kentucky, Missouri, New 
Mexico, Oklahoma, Tennessee, and Texas.\8\ After this disaster event, 
which was FEMA's first opportunity to implement the 2006 interim rule, 
FEMA realized a need to clarify the eligibility of host-States and the 
reimbursement process. As a result, this final rule clarifies the 
eligibility of host-States by adding definitions for the terms ``host-
State'' and ``impact-State,'' and by revising the definition of 
``grantee.'' The final rule also provides additional information to 
clarify how a host-State receives a direct Federal grant from FEMA. The 
final rule clarifies that the host-State must submit a Standard Form 
SF-424 (Application for Federal Assistance) directly to FEMA to apply 
for reimbursement, that a host-State must enter into a FEMA/Host-State 
agreement (similar to a FEMA/State Agreement), and that a host-State is 
required to prepare any amendments to the State administrative plan to 
meet current policy guidance. However, these changes are not new 
requirements for grantees and this rule simply clarifies that these 
requirements apply to host-States. FEMA does not expect that these 
changes will result in any additional costs to the States.
---------------------------------------------------------------------------

    \7\ As noted above, evacuation and sheltering activities also 
occurred as a result of Hurricane Ike, but no financial assistance 
was required from FEMA for those purposes for that event.
    \8\ This is an estimate as of April 8, 2009. FEMA continues to 
process reimbursement for the nine host-States for Hurricane Gustav.
---------------------------------------------------------------------------

    FEMA also requires that a host-State must agree in writing to 
provide evacuation and/or sheltering support to the impact-State. FEMA 
refers to this agreement as the commitment letter, which the host-State 
submits to FEMA before the execution of the FEMA/Host-State Agreement. 
FEMA estimates that it will take one managerial employee one hour to 
draft and submit this letter. FEMA does not expect to use the host-
State sheltering provisions regularly. Federal host-State sheltering 
assistance has only been needed twice--for Hurricanes Katrina and Rita 
in 2005, and Hurricane Gustav in 2008. However, for the purpose of this 
economic analysis, FEMA conservatively estimates that it will be 
implemented once a year. Using Hurricane Gustav as a ``typical'' 
example, FEMA expects nine states to submit this letter when FEMA uses 
host-State sheltering. Therefore, the cost to comply with this new 
requirement will be $591 (= 1 x 9 x $65.67) per year.
    FEMA also added a provision in this final rule that allows the 
agency to directly reimburse the regular-time salaries and benefits of 
a host-State's permanently employed personnel that perform evacuation 
and/or sheltering activities. These costs assist individuals who are 
not taxpayers in the host-State. In providing these services, a host-
State incurs costs for a task that is not otherwise its responsibility, 
and therefore the Federal government should wholly compensate host-
States for those services provided. Currently, a host-State can seek 
reimbursement for force account labor costs from the impact-State under 
a mutual aid agreement,\9\ but these costs are not reimbursable via a 
direct grant from FEMA pursuant to 44 CFR 206.228.
---------------------------------------------------------------------------

    \9\ Mutual aid agreements where one State or local government 
reimburses another State or local government for services provided 
take many forms, including the Emergency Management Assistance 
Compact. Granting the consent of Congress to the Emergency 
Management Assistance Compact, Public Law 104-321, 110 Stat. 3877 
(Oct. 19, 1996).
---------------------------------------------------------------------------

    Under a mutual aid agreement, the State requesting assistance would 
reimburse the State providing assistance for eligible regular-time and 
overtime force account labor costs it incurred. The State requesting 
assistance would then seek reimbursement of those eligible costs from 
FEMA, subject to a cost share. Regular-time force account labor is 
reimbursable under a mutual aid agreement because FEMA considers the 
eligible costs incurred as contract labor. The new provision in this 
final rule would allow a host-State to be reimbursed regular-time force 
account labor costs when it provides assistance under a direct grant 
with FEMA. This is consistent with the eligible costs that can be 
reimbursed for services provided under a mutual aid agreement. In 
addition, it avoids the administrative burden of a host-State seeking 
reimbursement for these costs through mutual aid from an impact-State 
when it is otherwise being reimbursed through a direct grant from FEMA. 
For Hurricane Gustav, FEMA has reimbursed approximately $1 million for 
regular-time force account costs incurred by three (Alabama, New 
Mexico, and Oklahoma) of the nine host-States as of April 8, 2009. The 
other six states have not submitted costs, if any, to FEMA for 
reimbursement. The total amount obligated will likely increase once 
FEMA takes into account the regular-time force account costs for the 
other six host-States. However, this change in the regulation, which 
allows for straight-time reimbursement via direct grant, will not 
affect the amount of eligible Public Assistance funding; it merely 
streamlines the process by which funds reach the host-State. The cost 
implications of this rule are solely administrative in nature.
    Although we have only experienced three disasters to date that have 
required the type of mass evacuation that called for host-State 
sheltering and evacuation assistance, to produce conservative estimates 
of the impact of the rule, FEMA assumes that there will be one large-
scale disaster on an annual basis that will require host-States to 
provide sheltering and evacuation. If there is one large-scale disaster 
(and nine host-States per large-scale disaster), this rule will result 
in a reduction in administrative costs of $39,690 to FEMA and $11,991 
to the States. Therefore, the annual impact of this rule is estimated 
at $51,681 per year (= $39,690 + $11,991). Table 2 details the annual 
impact of the interim final rule. FEMA has determined that this rule 
will not have a significant economic impact of $100 million or more per 
year.

                                       Table 2--Annual Impact of the Rule
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Assumptions........................   Number of large-scale disaster events that will require host-
                                      States to provide sheltering and evacuation support per year: 1.
                                      Number of host-States per large-scale disaster (based on Hurricane
                                      Gustav): 9.
----------------------------------------------------------------------------------------------------------------
                                                  FEMA                  State, Local, and Tribal Governments
Administrative Cost per Major                   -$4,410                                -$1,398
 Disaster/Emergency Declaration.

[[Page 60212]]

 
The Commitment Letter..............                                                    $65.67
Number of Large-Scale Disaster                     1                                      1
 Events per Year.
Number of host-States per Large-                   9                                      9
 Scale Disaster.
Administrative Cost per Year.......             -$39,690                              -$11,991
                                     (= -$4,410 x 1 x 9)..........  [= (-$1,398 + $65.67) x 1 x 9]
                                    ----------------------------------------------------------------------------
    Total..........................                                   = -$51,681
                                                                (-$39,690 + -$11,991)
----------------------------------------------------------------------------------------------------------------

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 (Pub. L. 104-121, 110 Stat. 847, 858-9 (March 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).'' This rule finalizes an 
interim final rule and no initial or final regulatory flexibility 
analysis is required by the RFA.

D. National Environmental Policy Act (NEPA)

    The National Environmental Policy Act, Public Law 91-190, 83 Stat. 
852 (Jan. 1, 1970) (42 U.S.C. 4321 et seq.) (NEPA), as amended, 
requires the development of environmental impact statements in Federal 
actions ``significantly affecting the quality of the human 
environment.'' FEMA has adopted categorical exclusions from the 
preparation of an environmental assessment or environmental impact 
statement for essential assistance or emergency assistance. 44 CFR 
10.8(d)(2)(xix)(B), (O); 44 CFR 10.8(d)(2)(ii). Actions taken or 
assistance provided under sections 403 and 502 of the Stafford Act are 
also statutorily excluded from NEPA review. 42 U.S.C. 5170b and 5192; 
44 CFR 10.8(c)(1). The promulgation of this rule, accordingly, 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

    Executive Order 12898, Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, 59 FR 7629, 
February 16, 1994, requires agencies to incorporate environmental 
justice into policies and programs, and to conduct 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 those programs, denying persons the benefits of those 
programs, or subjecting persons to discrimination because of their 
race, color, or national origin. FEMA does not anticipate any action 
under this rule would have a disproportionately high or adverse human 
health and environmental effect on any segment of the population.

F. Congressional Review of Agency Rulemaking

    FEMA will send this rule to the Congress and to the General 
Accounting Office under the Congressional Review of Agency Rulemaking 
Act, (Congressional Review Act), Public Law 104-121, 110 Stat. 873 
(March 29, 1996) (5 U.S.C. 804). This rule is not a ``major rule'' 
within the meaning of the Congressional Review Act.

G. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, 
109 Stat. 48 (March 22, 1995) (2 U.S.C. 1501 et seq.), requires 
agencies to prepare a written assessment of the costs, benefits, and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more, adjusted for inflation, in any one year. 2 U.S.C. 
1532(a). 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.

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 rule involves only principles and 
criteria that affect the eligibility for and manner in which FEMA 
reimburses States, Tribes and political subdivisions for costs incurred 
in support of disaster recovery and does not have federalism 
implications under Executive Order 13132.

I. Paperwork Reduction Act of 1995

    The Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., requires 
government agencies to acquire approval from the Office of Management 
and Budget (OMB) for uses of forms and collections of information from 
the public. This final rule addresses the collection of four documents: 
The SF-424 Application for Federal Assistance, which is approved under 
OMB control number 1660-0025 until August 31, 2011, a State 
Administrative Plan, a FEMA/Host-State Agreement (similar to the FEMA/
State Agreement), and the Commitment Letter. Collections of the State 
Administrative Plan, FEMA/Host-State Agreement, and Commitment Letter 
have not been approved by OMB under the Paperwork Reduction Act.
    The PRA applies when a request for information is addressed to 10 
or more persons. OMB has clarified that, `` `ten or more persons' 
refers to the persons to whom a collection of information is addressed 
by the agency within any 12-month period.'' 5 CFR 1320.3(c)(4). FEMA 
has determined, based on assessments of past disasters, that the likely 
number of respondents for host-State applications from non disaster-
declared States in a 12-month period will not reach the threshold. FEMA 
estimates that there will be nine host-State applications and 
collections that would transpire in a 12-month period using Hurricane 
Gustav as an ``average'' disaster in which host-State sheltering is 
needed.

[[Page 60213]]

    Collection of information from host-States is not expected to 
trigger the PRA because the number of host-State applicants is not 
likely to exceed nine. Therefore, FEMA has not sought approval from OMB 
for the collection of the State Administrative Plan, the FEMA/Host-
State Agreement, or the Commitment Letter.

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

    Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments, 65 FR 67249, November 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; the Public Assistance Program provides funding to impact-States 
and host-States, including Tribal governments, for sheltering and 
evacuation activities. 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.


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For the reasons discussed in the preamble, the Federal Emergency 
Management Agency amends 44 CFR part 206, subparts B and G, as follows:

PART 206--FEDERAL DISASTER ASSISTANCE

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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.


Sec.  206.40  [Amended]

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2. In Sec.  206.40, amend paragraph (b) by removing ``disaster-
affected'' and adding ``affected'' in its place in the first sentence 
and by removing ``A disaster-affected'' and adding ``An affected'' in 
its place in the third sentence.

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3. In Sec.  206.201--
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a. Revise paragraph (e) to read as set forth below;
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b. Redesignate paragraphs (g) through (l) as paragraphs (j) through 
(o); and
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c. Add new paragraphs (g) through (i).


Sec.  206.201  Definitions

* * * * *
    (e) Grantee. Grantee means the government to which a grant is 
awarded, and which is accountable for the use of the funds provided. 
The grantee is the entire legal entity even if only a particular 
component of the entity is designated in the grant award document. 
Generally, except as provided in Sec.  206.202(f), the State for which 
the emergency or major disaster is declared is the grantee. However, an 
Indian Tribal government may choose to be a grantee, or it may act as a 
subgrantee under the State. If an Indian Tribal government is the 
grantee, it will assume the responsibilities of the ``grantee'' or 
``State'' as described in this part with respect to administration of 
the Public Assistance program.
* * * * *
    (g) Host-State. A State or Indian Tribal government that by 
agreement with FEMA provides sheltering and/or evacuation support to 
evacuees from an impact-State. An Indian Tribal government may also be 
referred to as a ``Host-Tribe.''
    (h) Impact-State. The State for which the President has declared an 
emergency or major disaster and that, due to a need to evacuate and/or 
shelter affected individuals outside the State, requests such 
assistance from FEMA pursuant to Sec.  206.208.
    (i) Indian Tribal government means any federally recognized 
governing body of an Indian or Alaska Native Tribe, band, nation, 
pueblo, village, or community that the Secretary of the Interior 
acknowledges to exist as an Indian Tribe under the Federally Recognized 
Tribe List Act of 1994, 25 U.S.C. 479a. This does not include Alaska 
Native corporations, the ownership of which is vested in private 
individuals.
* * * * *

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4. In Sec.  206.202, revise paragraph (f) introductory text and 
paragraph (f)(1) to read as follows:


Sec.  206.202  Application procedures.

* * * * *
    (f) Exceptions. The following are exceptions to the procedures and 
time limitations outlined in this section.
    (1) Host-State Evacuation and/or Sheltering. (i) General. A grant 
to a host-State for sheltering and/or evacuation support is available 
under this section when an impact-State requests direct Federal 
assistance for sheltering and/or evacuation support pursuant to Sec.  
206.208. To receive this grant, a host-State must enter into a FEMA-
Host-State Agreement, amend its State Administrative Plan pursuant to 
Sec.  206.207, and submit a Standard Form SF424 Application for Federal 
Assistance directly to FEMA to apply for reimbursement of eligible 
costs for evacuating and/or sheltering individuals from an impact-
State. Upon award, the host-State assumes the responsibilities of the 
``grantee'' or ``State'' under this part with respect to its grant 
award.
    (ii) Force Account Labor Costs. For the performance of eligible 
evacuation and sheltering support under sections 403 or 502 of the 
Stafford Act, the straight-time salaries and benefits of a host-State's 
permanently employed personnel are eligible for

[[Page 60214]]

reimbursement. This is an exception to Sec.  206.228(a)(2).
* * * * *

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5. In Sec.  206.208-
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a. In the first complete sentence of paragraph (a), remove the phrase 
``sections 402(4), 403 or 407'' and add the phrase ``sections 402(1) 
and (4), 403, 407, 502(a)(1), (5) and (7)'' in its place; and
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b. Add paragraph (c)(3) to read as follows:


Sec.  206.208  Direct Federal assistance.

* * * * *
    (c) * * *
    (3) If an impact-State requests assistance in providing evacuation 
and sheltering support outside an impact-State, FEMA may directly 
reimburse a host-State for such eligible costs through a grant to a 
host-State under an impact-State's declaration, consistent with Sec.  
206.202(f)(1). FEMA may award a grant to a host-State when FEMA 
determines that a host-State has sufficient capability to meet some or 
all of the sheltering and/or evacuation needs of an impact-State, and a 
host-State agrees in writing to provide such support to an impact-
State.
* * * * *

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6. In Sec.  206.223, revise paragraphs (a)(1) and (a)(2) to read as 
follows:


Sec.  206.223  General work eligibility.

    (a) * * *
    (1) Be required as the result of the emergency or major disaster 
event;
    (2) Be located within the designated area of a major disaster or 
emergency declaration, except that sheltering and evacuation activities 
may be located outside the designated area; and
* * * * *

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7. In Sec.  206.431, revise the definition of ``grantee'' to read as 
follows:


Sec.  206.431  Definitions.

* * * * *
    Grantee means the government to which a grant is awarded and which 
is accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity 
is designated in the grant award document. Generally, the State for 
which the major disaster is declared is the grantee. However, an Indian 
tribal government may choose to be a grantee, or it may act as a 
subgrantee under the State. An Indian tribal government acting as a 
grantee will assume the responsibilities of a ``state'', under this 
subpart, for the purposes of administering the grant.
* * * * *

    Dated: November 9, 2009.
W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. E9-27883 Filed 11-19-09; 8:45 am]
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