[Federal Register Volume 86, Number 173 (Friday, September 10, 2021)]
[Rules and Regulations]
[Pages 50653-50679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19186]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Parts 77, 78, 79, 80, 201, and 206

[Docket ID: FEMA-2019-0011]
RIN 1660-AA96


FEMA's Hazard Mitigation Assistance and Mitigation Planning 
Regulations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule revises the Federal Emergency Management 
Agency's Hazard Mitigation Assistance and mitigation planning 
regulations to reflect current statutory authority and agency practice.

DATES: This rule is effective October 12, 2021.

ADDRESSES: The docket for this rulemaking is available for inspection 
using the Federal eRulemaking Portal at http://www.regulations.gov and 
can be viewed by following that website's instructions.

FOR FURTHER INFORMATION CONTACT: Katherine Fox, Assistant Administrator 
for Mitigation, Federal Emergency Management Agency, 202-646-1046, 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background and Discussion of the Rule

    On August 28, 2020, the Federal Emergency Management Agency (FEMA) 
published a Notice of Proposed Rulemaking (NPRM) (85 FR 53474) to 
revise FEMA's Hazard Mitigation Assistance (HMA) program regulations to 
reflect current statutory authority and agency practice.\1\ FEMA's HMA 
program regulations consist of the Flood Mitigation Assistance (FMA) 
grant program, the Hazard Mitigation Grant Program (HMGP), financial 
assistance for property acquisition and relocation of open space, and 
mitigation planning regulations. The NPRM proposed to revise the FMA 
grant program regulations to incorporate changes made by amendments to 
the National Flood Insurance Act of 1968 (NFIA).\2\ The NPRM also 
proposed to update terms and definitions throughout the HMA and 
Mitigation Planning regulations to better align with uniform 
administrative requirements that apply to all Federal assistance.
---------------------------------------------------------------------------

    \1\ FEMA has already implemented most of the changes discussed 
in this Final Rule through the Hazard Mitigation Assistance Guidance 
in 2013. See FEMA, Hazard Mitigation Assistance Guidance, Feb 27, 
2015, available at https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf (last accessed Feb 5, 2021). FEMA is now 
updating its HMA regulations to reflect these changes.
    \2\ 42 U.S.C. 4001 et seq.
---------------------------------------------------------------------------

    The NPRM solicited public comment on these proposed changes. FEMA 
received five comments related to the rulemaking and one unrelated 
comment that was outside the scope of the rulemaking. (The unrelated 
comment was an expression of the commenter's political views and 
therefore not germane to this rule). FEMA does not consider the one 
unrelated comment in this preamble. In this final rule, FEMA adopts the 
changes it proposed in the NPRM with some minor revisions in 
consideration of the related comments as well as Title 2 of the Code of 
Federal Regulations (CFR) part 200. FEMA describes the comments 
received and changes to the final rule below.

II. Summary and Discussion of Public Comments

    FEMA received five written responses to the amendments to its 
Hazard Mitigation Assistance (HMA) program regulations. All commenters 
submitted responses online at regulations.gov. FEMA reviewed each 
unique comment and considered whether to change the regulation in 
response to the comment. A summary of each comment and FEMA's response 
is provided below. Responses are listed in order of Docket ID number.

Individual Citizen, Docket ID FEMA-2019-0011-0003

    This individual citizen recommended that FEMA eliminate the FMA 
program and reallocate those resources to be available for the purposes 
of obtaining open space. FEMA appreciates this comment and recognizes 
the importance of maintaining open space as a critical component of 
many hazard mitigation programs; indeed, this is why the acquisition of 
open space is one of the eligible project types under FEMA's HMA 
programs. However, FEMA lacks authority to eliminate the FMA program 
because FEMA is required by statute to implement this program (42 
U.S.C. 4104c(a)(1)-(3)). FEMA also recognizes that a one size fits all 
approach to hazard mitigation is not aligned with the comprehensive 
community and hazard mitigation planning processes.

Individual Citizen, Docket ID FEMA-2019-0011-0004

    This individual citizen recommended that the definition of 
``community'' be expanded to include community organizations. In 
response, FEMA notes that ``community'' is defined in statute in 42 
U.S.C. 4104c(h)(1) and as a result, FEMA cannot reinterpret, expand or 
change this definition. Although private nonprofits and other private 
sector entities such as businesses, industry associations, native 
corporations, and individuals are unable to apply for FEMA's HMA 
programs based on statute, FEMA encourages partnerships and recognizes 
that these entities can provide value to projects eligible for HMA 
funding.

The Association of State Floodplain Managers, Docket ID FEMA-2019-0011-
0005

    The Association of State Floodplain Managers (ASFPM) is an 
organization of professionals involved in floodplain management, flood 
hazard mitigation, the flood insurance, and flood preparedness, warning 
and recovery. The ASFPM Flood Mitigation Committee submitted a number 
of comments on behalf of the organization.
    First, the ASFPM expressed concerns that the proposed 44 CFR 
77.7(b) states that ``[Pre-award] costs can only be incurred during the 
open application period for the FMA program.'' Under FEMA's current 
practice, eligible pre-award costs may be incurred prior to application 
submission (limited by 44 CFR 79.8 to costs incurred during the open 
application period). However, it is not FEMA's intent to disallow 
otherwise

[[Page 50654]]

eligible pre-award costs that were incurred prior to the open 
application period. In response to this comment, FEMA has removed the 
statement referenced above from 44 CFR 77.7(b). Costs incurred prior to 
award may be reimbursed if they meet the eligibility requirements and 
are in compliance with 2 CFR part 200 Subpart E, Cost Principles. Pre-
award costs include costs directly related to developing an application 
or subapplication that are incurred prior to the date of the grant 
award and are allowed subject to FEMA approval at time of award. Such 
costs may include gathering National Environmental Policy Act (NEPA) 
data or developing a Benefit Cost Analysis (BCA), preparing design 
specifications (including the development of elevation plans), or 
conducting workshops or meetings related to development and submission 
of subapplications.
    Second, the ASFPM identified that the proposed 44 CFR 
77.6(c)(2)(vi) states, ``Non-localized flood risk reduction projects 
such as dikes, levees, floodwalls, seawalls, groins, jetties, dams and 
large-scale waterway channelization projects are not eligible,'' which 
is inconsistent with recent Notices of Funding Opportunity (NOFOs) 
speaking to the eligibility of ``community mitigation projects,'' which 
could qualify as non-localized flood risk reduction projects. It is not 
FEMA's intent for these project types to be ineligible under all 
circumstances. In response to this comment, FEMA has added language to 
44 CFR 77.6(c)(2)(vi) for clarity and consistency with 42 U.S.C. 
4014c(c)(3)(E), limiting funding to localized projects, except in rare 
instances. As a result, 44 CFR 77.6(c)(2)(vi) now reads, ``Non-
localized flood risk reduction projects such as dikes, levees, 
floodwalls, seawalls, groins, jetties, dams and large-scale waterway 
channelization projects are not eligible unless the Administrator 
specifically determines in approving a mitigation plan that such 
activities are the most cost-effective mitigation activities for the 
National Flood Mitigation Fund.'' This change to the regulatory text 
reflects a change in FEMA's current practice and emphasizes that 42 
U.S.C. 4014c allows the option to authorize these project types in very 
rare circumstances.
    Third, the ASFPM noted that the revised HMA regulations do not 
specifically list project scoping (previously known as ``advance 
assistance'') as an eligible activity under the proposed 44 CFR 
77.6(c). However, project scoping is an eligible activity under FEMA's 
current practice. In response to this comment, therefore, FEMA has 
added paragraph (4) to the list of eligible activities in 44 CFR 
77.6(c), it reads: ``Project Scoping. Activities that enable 
subapplicants to develop complete subapplications for eligible 
mitigation activities including but not limited to data development.''
    Fourth, the ASFPM commented that punishing a State for an 
individual community's land use violation by withholding funding from 
the entire State (as outlined in the proposed 44 CFR 80.19(e)(2)) seems 
mismatched and extreme, and suggested that withholding award or 
assistance be limited to the community that is in violation. The 
relationship between the State as the recipient, and a local community 
as a subrecipient is defined in 2 CFR 200.1, 200.332, and 200.339. The 
penalty of holding the State accountable for a community violation is 
consistent with the State acting as the recipient of the grant and 
being primarily responsible for compliance with grant terms. As a 
result, FEMA has determined to retain in 44 CFR 80.19(e)(2) the option 
to enforce this penalty as a result of land use noncompliance. This is 
consistent with FEMA's current practice.
    Fifth, the ASFPM identified the ongoing problem that States and 
communities are unable to access data on repetitive loss properties, 
severe repetitive loss properties, and National Flood Insurance Program 
(NFIP) insured structures due to FEMA's current restriction on privacy 
data. The ASFPM stated that this information is needed for the purposes 
of FEMA's application processes and the development of hazard 
mitigation plans. FEMA appreciates this feedback, is aware of this 
issue, and is currently working to address this problem throughout the 
Federal Insurance and Mitigation Administration (FIMA). In working on 
this issue, it is FEMA's intent to arrive at a solution that will both 
protect government interests and property owners' privacy, while also 
making the information that is needed accessible to communities.

Individual Citizen, Docket ID FEMA-2019-0011-0006

    This individual citizen spoke to the value and benefits of nature-
based solutions and suggested that FEMA explicitly speak to nature-
based solutions within the regulation. In response, FEMA notes that 
nature-based solutions are eligible under FMA under localized flood 
risk reduction projects or other activities as identified in a 
community's hazard mitigation plan, as has been FEMA's current 
practice. FEMA recognizes and embraces nature-based solutions as an 
approach to project design that can be applied to many different 
project types, but on its own is not a separate project type. 
Therefore, FEMA does not intend to identify and speak to nature-based 
solutions as a specific project type within the regulation. However, 
FEMA continues to advocate for the incorporation of nature-based 
solutions into mitigation activities funded through HMA grants.

Individual Citizen, Docket ID FEMA-2019-0011-0007

    This individual citizen encouraged FEMA to allow for the use of 
eminent domain for the purpose of carrying out involuntary buyout 
projects. The commenter speaks to proposed 44 CFR 80.11(a), which 
states ``Eligible acquisition projects are those where the property 
owner participates voluntarily, and the recipient/subrecipient will not 
use its eminent domain authority to acquire the property for the open 
space purposes should negotiations fail.'' FEMA does not intend to 
change the voluntary component of 44 CFR 80.11; however, FEMA offers 
clarification that this voluntary limitation is only applicable to open 
space projects. Voluntary property owner participation is not required 
under other project types. For example, if a community wanted to submit 
an application for a flood retention or control project, it could 
exercise its eminent domain powers to acquire applicable parcels. 
Furthermore, in response to this comment, FEMA notes that it is up to 
recipients to prioritize and submit projects for funding as outlined in 
44 CFR 77.3(b)(3).

III. Changes to Final Rule

    In response to the comment that noted inconsistencies with the 
regulatory text and Fiscal Year 2020 NOFOs for Flood Mitigation 
Assistance grants, the proposed 44 CFR 77.6(c)(2)(vi) now reads, 
``Localized flood risk reduction projects that lessen the frequency or 
severity of flooding and decrease predicted flood damages, and that do 
not duplicate the flood prevention activities of other Federal 
agencies. Non-localized flood risk reduction projects such as dikes, 
levees, floodwalls, seawalls, groins, jetties, dams and large-scale 
waterway channelization projects are not eligible unless the 
Administrator specifically determines in approving a mitigation plan 
that such activities are the most cost-effective mitigation activities 
for the National Flood Mitigation Fund.''
    In response to the comment that project scoping (previously known 
as ``advance assistance'') is not listed as an

[[Page 50655]]

eligible activity under the proposed 44 CFR 77.6(c), FEMA has added 
Sec.  77.6(c)(4): ``Project Scoping. Activities that enable 
subapplicants to develop complete subapplications for eligible 
mitigation activities including but not limited to data development.''
    In response to the comment that expressed concerns regarding the 
statement ``[Pre-award] costs can only be incurred during the open 
application period for the FMA program,'' this statement has been 
removed. Section 77.7(b) now reads, ``Pre-award costs. FEMA may fund 
eligible pre-award costs related to developing the application or 
subapplication at its discretion and as funds are available. Recipients 
and subrecipients may be reimbursed for eligible pre-award costs for 
activities directly related to the development of the project or 
planning proposal. Costs associated with implementation of the activity 
but incurred prior to award are not eligible. Therefore, activities 
where implementation is initiated or completed prior to award are not 
eligible and will not be reimbursed.''
    In addition to the above and in order to align with 2 CFR part 200, 
FEMA removed its proposed definition of ``management costs'' in the 
proposed 44 CFR 77.2. The NPRM's proposed definition of ``management 
costs'' inadvertently tied it to FEMA's regulations implementing its 
authority under the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (``Stafford Act'').\3\ However, the FMA Program is not 
authorized under the Stafford Act, but rather the National Flood 
Insurance Act.\4\ As a result, direct and indirect administrative costs 
are governed by the cost principles of 2 CFR part 200 Subpart E, and 
FEMA has added the phrase ``(direct and indirect administrative costs 
pursuant to 2 CFR part 200 Subpart E)'' in 44 CFR 77.7(a)(1)(i) to 
clarify this. Because the FMA Program is authorized under the National 
Flood Insurance Act, FEMA also added the National Flood Insurance Act 
both to the Authority citation for 44 CFR part 201 and to section 
201.1. Lastly, to conform with updates to 2 CFR published on August 13, 
2020,\5\ and other updates to statutory citations, FEMA removed the 
phrase ``to carry out an activity under the FMA program'' in the 
definition of ``recipient'' in 77.2(h) and updated citations to 2 CFR 
part 200 and 25 U.S.C. 5131 as necessary.
---------------------------------------------------------------------------

    \3\ Public Law 93-288 (42 U.S.C. 5121-5207); see 44 CFR part 
207.
    \4\ 42 U.S.C. 4104c.
    \5\ 85 FR 49506.
---------------------------------------------------------------------------

IV. Regulatory Analysis

A. Executive Order 12866, as amended, Regulatory Planning and Review

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') direct agencies 
to assess the costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility.
    The Office of Management and Budget (OMB) has not designated this 
rule a significant regulatory action under section 3(f) of Executive 
Order 12866. Accordingly, OMB has not reviewed it.
    FEMA did not receive any public comments relating to the RIA in the 
NPRM and has made no changes to this Regulatory Analysis as a result. 
Additionally, changes made to the Final Rule due to public comments 
were due to clarifications in regulatory text, and changes made to 
better conform the text with statute. These changes will not have an 
economic impact, and FEMA does not address them further in this 
analysis.
Need for Regulation
    The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), 
Public Law 112-141, 126 Stat. 916, amended the National Flood Insurance 
Act of 1968 (NFIA) to require changes to FEMA's Hazard Mitigation 
Assistance (HMA) programs. FEMA implemented most of these changes 
through the Hazard Mitigation Assistance Guidance in 2013.\6\ FEMA is 
now updating its HMA regulations to reflect these changes.
---------------------------------------------------------------------------

    \6\ FEMA, Hazard Mitigation Assistance Guidance, Feb 27, 2015, 
available at https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf (last accessed Feb 5, 2021).
---------------------------------------------------------------------------

    Following guidance in OMB Circular A-4, FEMA assessed the impacts 
of this rule against a no-action baseline as well as a pre-statutory 
baseline. The no-action baseline is an assessment against what the 
world would be like if the rule is not adopted. The pre-statutory 
baseline is an assessment against what the world would be like if the 
relevant statute(s) had not been adopted and, in this case, already 
been implemented through guidance.
    Under a no-action baseline, this rule results in cost savings to 
FEMA, and familiarization costs to HMA recipients. Under a pre-
statutory baseline, this rule results in familiarization costs to HMA 
recipients, cost savings to FEMA, distributional impacts, and 
qualitative benefits, but no marginal costs. The annual distributional 
impact of this rule is estimated at $24.96 million \7\ in increased 
transfers from FEMA to HMA recipients.
---------------------------------------------------------------------------

    \7\ In the NPRM, FEMA incorrectly stated in the introductory 
text of the RIA that the annual distributional impact of the rule 
was $4.16 million in transfers. 86 FR 53474 at 53490. However, this 
was a clerical error which appeared in that sentence and was not 
repeated in the remainder of the document. As noted in the remainder 
of the RIA, the correct estimate was $28.4 million. 86 FR 53474 at 
53491 (Table 1); 53495 (text and Footnote 113); and 53496 (Table 8-
A-4).
---------------------------------------------------------------------------

    FEMA addressed the substantive changes in this analysis and 
presented how they affect costs, benefits, and transfers. The remaining 
changes are nonsubstantive, meaning they are technical and include 
definitional updates and other changes that modernize and standardize 
regulations, reduce redundancy, or increase readability. The 
nonsubstantive changes do not have an economic impact. FEMA included a 
detailed marginal analysis table that summarizes the substantive and 
nonsubstantive changes in this rule and the related impacts in the 
public docket for this rulemaking available on www.regulations.gov 
under Docket ID FEMA-2019-0011-0002.
Affected Population
    This rule affects all recipients of FEMA's Flood Mitigation 
Assistance (FMA) grants. Recipients include 56 State and territorial 
governments and 574 Indian Tribal governments.\8\ Local governments and 
governmental organizations such as flood districts and sewer districts 
are considered subrecipients and must apply through a State or Indian 
Tribal government. For simplicity, FEMA refers to the affected 
population as ``recipients'' throughout the analysis, except in cases 
where there are different requirements for recipients or subrecipients.
---------------------------------------------------------------------------

    \8\ Indian Entities Recognized by, and Eligible to Receive 
Services from the United States Bureau of Indian Affairs, 86 FR 
7554, (Jan. 29, 2021).
---------------------------------------------------------------------------

Baselines
    BW-12 made substantial changes to FEMA's HMA programs. FEMA 
implemented most of these changes via the HMA Guidance in 2013. FEMA is 
now codifying those changes in this rule. Following guidance in OMB 
Circular A-4, FEMA assessed the impacts of this rule against a pre-
statutory baseline covering 2006-2012

[[Page 50656]]

(pre-BW-12) and a no-action baseline covering 2013-2019 \9\ (post-BW-
12).
---------------------------------------------------------------------------

    \9\ 2019 is the last year complete data is available.
---------------------------------------------------------------------------

    The pre-statutory baseline shows the effects of the rule compared 
to the current regulations (i.e., as if FEMA had not already 
implemented the changes through the HMA Guidance). The no-action 
baseline shows the effects of the rule compared to current FEMA 
practice (i.e., compared to the HMA Guidance, which reflects FEMA's 
current practice, but not the current regulations).
    Under the pre-statutory baseline, the rule has distributional 
impacts and qualitative benefits. The distributional impacts affect 
recipients of Repetitive Loss (RL) grants and Severe Repetitive Loss 
(SRL) grants that were combined into the FMA program pursuant to BW-12. 
Under BW-12, RL and SRL properties received increased assistance, while 
standard mitigation properties received decreased assistance. Under the 
no-action baseline, the only impacts are implementation costs and 
Federal cost savings. Table 1 shows the impacts of this rule under the 
pre-statutory and no-action baselines.

                   Table 1--Annual Effects of Rule Under Pre-Statutory and No-Action Baselines
                                                     [2019$]
----------------------------------------------------------------------------------------------------------------
               Baseline                         Costs                   Benefits                Transfers
----------------------------------------------------------------------------------------------------------------
Pre-Statutory........................  $1,041 (year 1 only)...  Qualitative............  $24.96 million from
                                                                                          FEMA to grant
                                                                                          recipients.
No-Action............................  $1,041 (year 1 only)...  $81,159................  None.
----------------------------------------------------------------------------------------------------------------

Effects
    The primary effects of BW-12 that are codified by this rule 
resulted from changes in the Federal cost shares. A cost share is the 
portion of the costs of a Federally assisted project or program borne 
by the Federal Government. FEMA pays a portion of the cost of a 
project, or the Federal cost share, and the recipient pays the 
remaining share.
    FMA Grant Cost Sharing Changes. The current regulations still 
reflect the pre-BW-12 cost share provisions of the RL and SRL grant 
programs. BW-12 modified these two programs and FEMA implemented the 
modifications in the 2013 HMA Guidance. The newly expanded FMA program 
now serves the recipients of these grant programs.
    BW-12 increased the RL Federal cost share from 75 percent to 
between 75 and 90 percent, and increased the SRL Federal cost share 
from between 90 and 100 percent to 100 percent. Table 2 shows the cost 
shares by type of grant.

                                      Table 2--Cost Share by Type of Grant
----------------------------------------------------------------------------------------------------------------
                                                    RL                                      SRL
                                 -------------------------------------------------------------------------------
            Baseline                FEMA cost share     Recipient cost      FEMA cost share     Recipient cost
                                          (%)             share  (%)              (%)             share  (%)
----------------------------------------------------------------------------------------------------------------
Pre-Statutory (2006-2012) Pre-BW- 75................  25................  90 to 100.........  10 to 0.
 12.
No-Action (2013-2019) Post-BW-12  75-90.............  10-25.............  100...............  0.
----------------------------------------------------------------------------------------------------------------

    Lowering the Cap and Removing the Frequency Restriction. Prior to 
BW-12, FMA funds for the development or update of the flood portion of 
community multi-hazard mitigation plans were capped at $150,000 in 
Federal funding for States and $50,000 for communities, with a total 
cap of $300,000 in Federal funding for applications statewide. FEMA 
could not award State or community planning grants more than once every 
5 years.
    BW-12 limited FMA grant funds to develop or update the flood 
portion of community multi-hazard mitigation plans to a $50,000 Federal 
share to any recipient or a $25,000 Federal share to any subrecipient. 
BW-12 also removed the restriction on awarding State or community 
planning grants more than once every 5 years. FEMA discusses the 
impacts of these changes in the costs section.
    Shifting from State Allocations to Competition. Prior to BW-12, 
FEMA annually allocated FMA program funding to recipients based on the 
number of insured properties and RL properties present within the 
recipient's jurisdiction. Recipients that did not meet the minimum 
threshold to receive a target allocation had to apply against funds 
that were set aside for this purpose. BW-12 replaced this process with 
a fully competitive program that selects subapplications against agency 
priorities identified annually. This change allows FEMA to identify and 
mitigate properties with the highest risk from flooding, thereby 
providing the greatest savings to the NFIP.
Costs
    Costs for this rule result from implementation of the rule, rather 
than the 2013 HMA Guidance. FEMA estimated these costs against the no-
action baseline since these are directly attributable to updating the 
text of the regulation, and not program changes that FEMA already 
implemented.
    Familiarization Costs. FEMA estimated familiarization costs for 
States, but not for local emergency management divisions or 
jurisdictions. FEMA assumed States regularly update their emergency 
response networks and notify local emergency management divisions on 
any changes. FEMA believes that States will continue to disseminate the 
new information through each State's established process. FEMA assumed 
that each State grant recipient will have two personnel that will need 
to familiarize themselves and understand the rule by reading the 
existing and new regulations to understand the changes. FEMA expects 
each person to spend one hour to become familiar with the changes. FEMA 
assumes that the rule is likely to be reviewed by each State's 
Emergency Management Director and one administrative support personnel. 
FEMA assumes that the U.S. Bureau of Labor Statistics (BLS) occupations

[[Page 50657]]

Emergency Management Director (SOC: 11-9160, mean hourly wage $39.68) 
\10\ and First-Line Supervisor of Office and Administrative Support 
Workers (SOC: 43-1010, mean hourly wage $28.91) \11\ are most 
representative of these roles in a State. Using the 1.46 
multiplier,\12\ the fully loaded wage rates are $57.93 and $42.21 
respectively. The estimated total cost of recipients making themselves 
familiar with the rule is $5,608 in year 1 ($1,041 per year annualized 
at 7 percent over 7 years, and $900 at 3 percent). ((56 recipients x 1 
hour x $57.93 wage) + (56 recipients x 1 hour x $42.21 wage) = $5,608)
---------------------------------------------------------------------------

    \10\ May 2019 National Occupational Employment and Wage Rates, 
National File (xls), First-Line Supervisors of Office & Admin 
Support Workers (SOC: 43-1010, Average, Column Title: H_Mean). 
Accessed and downloaded Feb 8, 2021. https://www.bls.gov/oes/tables.htm.
    \11\ May 2019 National Occupational Employment and Wage Rates, 
National File (xls), Emergency Management Directors (SOC: 11-9160, 
Average, Column Title: H_Mean). Accessed and downloaded Feb 8, 2021. 
https://www.bls.gov/oes/tables.htm.
    \12\ December 2019 Bureau of Labor Statistics, Employer Costs 
for Employee Compensation, Table 1. Employer costs per hour worked 
for employee compensation and costs as a percent of total 
compensation: Civilian workers, by major occupational and industry 
group, page 4 ($37.73/$25.91). Accessed and downloaded Feb 8, 2021. 
https://www.bls.gov/news.release/archives/ecec_06182020.pdf.
---------------------------------------------------------------------------

    Summary of Costs. FEMA estimated the rule has familiarization costs 
of $5,608 in the first year of implementation. FEMA assumed that all 
staff and resources will come from existing sources and thus represent 
an opportunity cost.
Benefits
    This rule will be beneficial to both FEMA and Hazard Mitigation 
Grant recipients. While the benefits are not quantifiable, FEMA 
believes that changes implemented by BW-12 allow it to target the most 
vulnerable properties, and streamline the mitigation grant process. 
Under the no-action baseline, most changes in this rule are technical 
and include definitional updates and other changes made to harmonize 
FEMA regulations with current FEMA practices and HMA guidance, 
modernize and standardize the regulations, reduce redundancy, or 
increase readability. These changes are largely nonsubstantive and do 
not have an economic impact.
    Cost Savings. FEMA estimated annual costs savings of $81,159 
resulting from removal of the definition of ``market value'' at 44 CFR 
79.2(f) and (g). The removal of ``market value'' is new to this 
regulation and was not implemented in previous guidance. Currently, the 
regulation requires FEMA to use the market value of a structure when 
making grant determinations. Removal of this requirement allows FEMA to 
consider the value of the structure listed on the flood insurance 
policy when considering a grant request related to a vulnerable 
structure, rather than the ``market value.'' This results in a 
reduction in the time it takes FEMA personnel to review a grant 
application. Using ``market value'' required additional research and 
appraisals, whereas the flood insurance property value is readily 
available to FEMA personnel. FEMA estimates that this change reduces 
the personnel time it takes to review a grant application by an 
estimated 2 hours per review for a total of $81,159 annually. The 
removal of ``market value'' may impact grant amounts due to possible 
differences from the insured value, but FEMA does not have data 
available to estimate this impact.
    FEMA based its estimates on the estimated annual average number of 
FMA grant applications that required a market value review between 2013 
and 2019 and the wage rates of the personnel reviewing the grants. The 
annual average number of grant requests was 545. Table 3 shows the 
annual number of grant requests for vulnerable properties that required 
a market value review between 2013 and 2019.

      Table 3--Annual Grant Requests Requiring Market Value Review
------------------------------------------------------------------------
                          Year                              FMA Program
------------------------------------------------------------------------
2013....................................................             552
2014....................................................             374
2015....................................................             678
2016....................................................             832
2017....................................................             743
2018....................................................             485
2019....................................................             149
                                                         ---------------
  Total.................................................           3,813
------------------------------------------------------------------------
Annual Average..........................................             545
------------------------------------------------------------------------

    Reviews of the grant applications can vary widely from simple--all 
documentation accompanies the request and requires very little follow-
up--to complex. For this analysis, FEMA chose to capture the 
variability in the grant application reviews by using a weighted 
average of the hours it takes to complete the reviews. FEMA estimated 
that 25 percent of the reviews are simple; these reviews take 8 hours 
each on average to complete. Reviews of applications that are average 
in their complexity comprise 50 percent of the reviews and are assumed 
to take 12 hours each. Twenty-five percent of the reviews are complex 
and take 16 hours on average to complete.\13\ Taking a weighted average 
of the times listed and using the distribution of 25 percent simple/50 
percent average/25 percent complex, FEMA estimated that grant 
application reviews take 12 hours on average to complete. ([(0.25 x 8) 
+ (0.50 x 12) + (0.25 x 16)] = 12 hours)
---------------------------------------------------------------------------

    \13\ FEMA personnel who review the FMA grant requests provided 
the information on the average time to review and the discussion of 
complexity.
---------------------------------------------------------------------------

    Program Specialists (GS 13, step 5) and contracted Civil Engineers 
conduct the reviews, the Program Specialists conduct 75 percent of 
reviews and the Civil Engineers conduct the remaining 25 percent. The 
fully-loaded average hourly wage for GS 13, step 5 at the FEMA regional 
locations is $77.20 \14\ and FEMA estimates $66.23 \15\ is the fully-
loaded hourly wage rate for Civil Engineers. Using the 12-hour average 
estimate for reviewing the grant application, FEMA estimated that each 
year it spends $486,952 on average to review FMA grant applications. 
([(545 grant reviews x 12 hours per review x $77.20 hourly wage for 
Program Specialist x 0.75) + ([(545 grant reviews x 12 hours per review 
x $66.23 hourly wage for Civil Engineer x 0.25)] = $486,952.05)
---------------------------------------------------------------------------

    \14\ Based on the OPM General Schedule of Pay, January 2019, the 
average base wage of GS 13, step 5 in each of the FEMA regional 
office locations is $52.88 (Boston, MA; New York, NY; Philadelphia, 
PA; Atlanta, GA; Chicago, IL; Denton, TX; Kansas City, MO; Denver, 
CO; Oakland, CA; and Bothell, WA), which is multiplied by a 1.46 
benefits multiplier (December 2018, BLS Employer Costs for Employee 
Compensation) to get a fully loaded wage rate of $77.20/hour. 
Accessed and downloaded Feb 9, 2021. https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2019/general-schedule/.
    \15\ Based on Bureau of Labor Statistics May 2019 National 
Employment and Wage Rate, National File (xls), a Civil Engineer, SOC 
17-2050, has a base wage of $45.36, which is multiplied by a 
benefits multiplier of 1.46 (December 2019, BLS Employer Costs for 
Employee Compensation) to get a fully loaded wage rate of $66.23/
hour. Accessed and downloaded Feb 8, 2021. https://www.bls.gov/oes/tables.htm.
---------------------------------------------------------------------------

    FEMA estimated that removing the definition of ``market value'' 
will reduce its administrative burden by 2 hours per review. This 
results in each review taking 10 hours instead of 12, on average. Using 
the same calculation as above and 10 hours instead of 12 hours per 
review, FEMA's average amount spent each year on reviewing FMA grant 
applications will be $405,793 and results in an estimated annual cost 
savings of $81,159. ($486,952 - $405,793 = $81,159)
    Clarification of Mitigation Grant Terms and Conditions. The current 
HMA grant program regulations contain inconsistencies or vague language 
that may cause confusion. Specifically,

[[Page 50658]]

FEMA will add definitions for ``Federal award'' and ``pass-through 
entity;'' and replace definitions of ``grantee,'' ``subgrant,'' and 
``subgrantee'' with ``recipient,'' ``subaward,'' and ``subrecipient,'' 
respectively. These changes will make the HMA regulations consistent 
with FEMA's other regulations.
    Revising, Adding, or Removing Definitions. FEMA is revising 
existing definitions for clarification purposes, add several 
definitions to conform with BW-12 and current agency practice, and 
delete others that are obsolete. FEMA believes the changes are clear 
and more consistent with definitions used in 2 CFR part 200 and the HMA 
Guidance.\16\
---------------------------------------------------------------------------

    \16\ Hazard Mitigation Assistance Guidance (HMA Guidance), Feb. 
8, 2021, available at https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf (last accessed Feb. 9, 2021).
---------------------------------------------------------------------------

    Shifting from Standard Mitigations to RL and SRL Structures. One of 
the main focuses of this rulemaking is on mitigation grants made to 
properties in the NFIP that have been repeatedly subject to costly loss 
claims. FEMA provides a range of available mitigation options including 
the FMA program to address vulnerable RL and SRL structures. Once a 
structure is mitigated through one of the programs, it could be 
protected from flooding, and can be removed from the repetitive flood 
loss list of un-mitigated properties insured by the NFIP. This reduces 
the flood vulnerability to RL and SRL structures, preventing further 
losses to the policyholders, as well as to FEMA. This benefit applies 
to the pre-statutory baseline, but not the no-action baseline because 
recipients and FEMA both realized this benefit beginning in 2013 when 
FEMA implemented it through the HMA Guidance.
    Shifting from State Allocations to Competition. Before BW-12, FMA 
program funding was based on an allocation methodology that required an 
analysis of the number of insured properties and RL properties present 
within a jurisdiction and each State was allocated a share of the 
overall available funding. BW-12 changed this process to a fully-
competitive program that allows FEMA to select subapplications 
according to FEMA priorities no matter the location.
    This change lifted the constraints that were formerly in place 
against multiple eligible subrecipients in the same jurisdiction with 
vulnerable properties, allowing a more adequate coverage area within 
and across States and contributing to the increase in the size and 
volume of RL and SRL properties covered by each grant. FEMA is able to 
identify and mitigate properties with the highest risk from flooding 
and provide the greatest savings to the NFIP. This benefit applies to 
the pre-statutory baseline, but not the no-action baseline because 
recipients and FEMA both realized this benefit beginning in 2013 when 
FEMA implemented it through the HMA Guidance.
    Eliminating the Limit on In-Kind Contributions. Eliminating the 
limit on in-kind contributions for a recipient's cost share modifies 
the nature, or make-up, of the recipient's contribution but does not 
change the overall dollar amount required for the recipient's 
contribution. FEMA believes this is advantageous because recipients and 
subrecipients are able to leverage their own optimal mix of in-kind and 
cash to meet their portion of the cost-share. There is no change to 
transfers between FEMA and grantees because the cost share does not 
change; however, the make-up of the recipient's portion changes.
    Summary of Benefits. Under a no-action baseline FEMA believes this 
rule will promote a better understanding of the FMA program by updating 
the regulations that govern the HMA programs to conform with 
adjustments made by BW-12 and current agency practice. These changes 
will clarify existing requirements and help facilitate the flood 
portion of the Hazard Mitigation Grant Program processes.
    FEMA estimated annual cost savings of $81,159 per year. Removing 
the definition of ``market value'' leads to cost savings to FEMA. 
Removing this definition will reduce the time it takes to conduct an 
initial grant application review by 2 hours.
    Under a pre-statutory (pre-BW-12) baseline, FEMA believes there are 
considerable benefits associated with the shift to entirely competitive 
awards for the grants instead of the previous State-specific 
allocations, as well as the more flexible in-kind match option. The 
shift to more vulnerable RL and SRL properties by modifying the cost 
shares and giving priority to applications with the most vulnerable 
properties are expected to reduce the frequency of loss claims and 
promote community resiliency through mitigation. There are also 
qualitative benefits due to the elimination of the cap on FMA funding 
for States and communities and the opening of the program to a fully 
competitive award system. These changes enhance FEMA's ability to 
administer the FMA program in a more streamlined and cost effective 
manner. Removing State allocations of grant resources and accepting in-
kind State contributions further streamline the program. Collectively, 
these benefits justify the rule and update FEMA's regulations to 
reflect current statutory authority.
Transfers
    Federal Cost Shares. The adjustments in cost shares made by BW-12 
result in distributional impacts, with certain grant programs receiving 
relative increases and decreases in grant funds. To analyze the impact 
of changes to the cost shares, FEMA summarized available mitigation 
project data for standard, RL, and SRL grants.\17\
---------------------------------------------------------------------------

    \17\ FEMA assumes that the mitigation project level grant data 
with applications comprising mixed property categories resulting in 
blended cost share percentages (any total cost share not equal to 
100 percent, 90 percent, or 75 percent Federal) would be rounded up 
to the nearest threshold category. This would not round up project 
values or Federal cost shares in dollar terms, only their tabulation 
and consideration as RL or SRL. An application with a determined 
Federal cost share of 91-99 percent would be counted as part of the 
100 percent SRL category, while applications with 76-89 percent 
Federal cost shares would be counted as part of the 90 percent 
Federal RL category.
---------------------------------------------------------------------------

    Between 2006 and 2012 (pre-BW-12), FEMA provided a total of 390 
grants to 244 recipients for 1,014 properties. The value of those 
grants was $292,374,087, with FEMA paying $205,762,109 and recipients 
paying $86,611,978. Table 4 shows the distribution of these grants by 
category.

                                                          Table 4--Pre-BW-12 Mitigation Projects and Associated Value by Grant Category
                                                                                             [2019$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% Federal cost share)      Repetitive loss (75% Federal cost share)   Severe repetitive loss (90-100% Federal
                                                                --------------------------------------------------------------------------------------                cost share)
                              Year                                                                                                                    ------------------------------------------
                                                                 Number of     Value of      Federal share  Number of     Value of      Federal share  Number of     Value of      Federal share
                                                                   grants       grants         obligated      grants       grants         obligated      grants       grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2006...........................................................         93     $39,020,873     $28,914,463  .........  ..............  ..............          2        $150,655        $150,655
2007...........................................................         85      46,309,864      33,827,089  .........  ..............  ..............  .........  ..............  ..............

[[Page 50659]]

 
2008...........................................................         70      37,110,276      25,084,903  .........  ..............  ..............          1          35,166          31,649
2009...........................................................         54      81,136,958      59,026,566          3       3,027,774       2,475,759          3         653,292         587,963
2010...........................................................         35      32,715,929      22,915,763          2       1,480,940         897,864  .........  ..............  ..............
2011...........................................................         17      17,530,961      11,234,999  .........  ..............  ..............  .........  ..............  ..............
2012...........................................................         25      33,201,399      20,614,436  .........  ..............  ..............  .........  ..............  ..............
Average........................................................         54      41,003,751      28,802,603       0.71         644,102         481,946       0.86         119,873         110,038
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total......................................................        379     287,026,260     201,618,219          5       4,508,714       3,373,623          6         839,113         770,267
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The 390 grants from pre-BW-12 were one of three types--Standard 
Mitigation (up to 75 percent Federal cost share); RL (75 percent 
Federal cost share); or SRL (90-100 percent Federal cost share). Prior 
to BW-12, there were 379 Standard Mitigation grants with a total value 
of $287,026,260. FEMA's share was $201,618,219 and the recipients' 
share was $85,408,041 (70 percent average Federal cost share). For RL 
grants, there were five grants with a total value of $4,508,714. FEMA's 
share was $3,373,623 and the recipients' share was $1,135,091 (75 
percent Federal cost share). For SRL grants, there were six grants made 
with a total value of $839,113. FEMA's share was $770,267 and the 
recipients' share was $68,846 (92 percent Federal cost share).
    Post-BW-12 (2013-2019), FEMA provided a total of 624 grants to 
1,153 recipients for 9,737 properties. The total value of those grants 
was $829,481,486. FEMA's share was $758,759,675 and recipients' share 
was $70,721,811. Table 5 shows the distribution of these grants by 
category.

                                                          Table 5--Post-BW-12 Mitigation Projects and Associated Value by Grant Category
                                                                                             [2019$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% Federal cost share)        Repetitive loss (75-90% Federal cost    Severe repetitive loss (100% Federal cost
                                                                -------------------------------------------                   share)                                     share)
                              Year                                                                         -------------------------------------------------------------------------------------
                                                                 Number of     Value of      Federal share  Number of     Value of      Federal share  Number of     Value of      Federal share
                                                                   grants       grants         obligated      grants       grants         obligated      grants       grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2013...........................................................         18     $10,917,788      $7,205,740          5     $12,120,501     $10,302,426         65    $100,175,666     $90,158,099
2014...........................................................         28       8,888,593       5,333,156          5       6,853,281       5,825,289         68      74,883,110      75,631,941
2015...........................................................         16       7,317,656       5,488,242          8      33,763,761      30,049,747         80     124,352,333     119,378,240
2016...........................................................         26      11,975,567       8,861,920         12      29,656,451      25,207,983         99     173,836,284     159,929,381
2017...........................................................         33      13,673,605      10,118,468          5       5,941,663       4,990,997         59      80,043,231      74,440,205
2018...........................................................          5       5,261,224       3,525,020         16      27,467,838      24,171,697         44      76,784,839      74,481,294
2019...........................................................          6       2,001,833       1,301,191          5       5,663,833       4,814,258         21      17,902,429      17,544,380
Average........................................................         19       8,576,609       5,976,248          8      17,352,475      15,051,771         62      92,568,270      87,366,220
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total......................................................        132      60,036,266      41,833,737         56     121,467,328     105,362,397        436     647,977,892     611,563,541
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    These 624 grants were one of three types--Standard Mitigation (up 
to 75 percent Federal cost share); RL (75-90 percent Federal cost 
share); or SRL (90-100 percent Federal cost share) (all post-BW-12 cost 
shares). There were 132 Standard Mitigation grants with a total value 
of $60,036,266. FEMA's share was $41,833,737 and the recipients' share 
was $18,202,529 (70 percent average Federal cost share). For RL grants, 
there were 56 grants with a total value of $121,467,328. FEMA's share 
was $105,362,397 and the recipients' share was $16,104,931 (87 percent 
Federal cost share). For SRL grants, there were 436 grants made with a 
total value of $647,977,892. FEMA's share was $611,563,541 and the 
recipients' share was $36,414,351 (94 percent Federal cost share).
    These grants often include some ineligible costs, including cost 
overruns or underruns, the use of insurance proceeds that FEMA deducted 
as a duplication of benefits,\18\ or Increased Cost of Compliance 
(ICC),\19\ so the actual cost shares do not equal the percentages 
listed above. For example, although SRL grants have a 100 percent 
Federal cost share, the actual average Federal share was 94 percent.
---------------------------------------------------------------------------

    \18\ Duplication of Benefits refers to assistance from more than 
one source that is used for the same mitigation purpose or activity. 
The purpose may apply to the whole project or only part of it. HMA 
funds cannot duplicate funds received by or available to applicants 
or subapplicants from other sources for the same purpose. Examples 
of other sources include insurance claims, other assistance programs 
(including previous project or planning grants and subawards from 
HMA programs), legal awards, or other benefits associated with 
properties or damage that are the subject of litigation. HMA does 
not require that property owners seek assistance from other sources 
(except for insurance claims). However, it is the responsibility of 
the property owner to report other benefits received, any 
applications for other assistance, the availability of insurance 
proceeds, or the potential for other compensation, such as from 
pending legal claims for damages, relating to the property. 
References: Sec. 312 of the Stafford Act; 44 CFR 79.6(d)(7); Hazard 
Mitigation Assistance Guidance (February 27, 2015), Part III, D.5, 
pages 31-32; HMA Tool for Identifying Duplication of Benefits 
https://www.fema.gov/sites/default/files/2020-04/HMA_Guidance_FY15.pdf (last accessed Feb 9, 2021).
    \19\ Increased Cost of Compliance (ICC) provides up to $30,000 
to help cover the cost of mitigation measures that will reduce flood 
risk. ICC coverage is a part of most standard flood insurance 
policies available under the NFIP https://www.fema.gov/media-library/assets/documents/1130 (last accessed Feb 9, 2021).
---------------------------------------------------------------------------

    Changing Cost Share Amounts and to a Fully Competitive Grant 
Process for FMA.
    Changing the cost shares had a distributional impact, where the 
proportion of Federal funds increased while the recipients' proportion 
decreased by the same amount.

[[Page 50660]]

Similarly, the shift from State allocations of grant funding to a 
competitive-based program that allows grants to be allocated to the 
most vulnerable properties, resulted in distributional impacts where 
recipients in certain States receive more in grant funding where others 
see a decrease. FEMA was not able to isolate this effect from the 
effect of changing the cost shares, since they were implemented at the 
same time.
    First, FEMA analyzed the shift in grant priorities as a 
distributional impact between grant programs. This was done by 
subtracting the total value of grants pre-BW-12 from the total value of 
grants post-BW-12 for each program, showing the relative decreases and 
increases by type of FMA grant caused by making the grants competitive 
and shifting funding to riskier properties.\20\
---------------------------------------------------------------------------

    \20\ These figures include a large increase in grant funding 
post-BW-12 for the 3 programs resulting from Congressional 
appropriations that are not due to changes in from this rule. This 
increase in overall funding is not ``held constant'' in the 
comparisons shown. From 2006-2012, total funding was $292.4 million 
and from 2013-2019, total funding was $829.5 million.
---------------------------------------------------------------------------

     The seven-year total share of standard mitigation grants 
decreased by $226,989,994 post-BW-12 ($60,036,266-$287,026,260).
     The seven-year total share of RL grants increased by 
$116,958,614 post-BW-12 ($121,467,328-$4,508,714).
     The seven-year total share of SRL grants increased by 
$647,138,779 post-BW-12 ($647,977,892-$839,113).
    This shows the total seven-year relative increases and decreases 
between FMA programs in terms of post-BW-12 grant funding: (-
$226,989,994 for standard grants + $116,958,614 for SL grants + 
$647,138,779 SRL grants = $537,107,399).
    Table 6 shows changes in the total number of grants as well as the 
Federal and non-Federal shares for all grants pre-BW-12 and post-BW-12 
with the percent change in grants and funding.

             Table 6--Change in Average Annual Number of Grants and Funding Pre-BW-12 to Post-BW-12
                                                     [2019$]
----------------------------------------------------------------------------------------------------------------
                                                  Percent pre-BW-                  Percent post-
                                     Pre-BW-12          12          Post-BW-12         BW-12      Percent change
----------------------------------------------------------------------------------------------------------------
                                               Standard Mitigation
----------------------------------------------------------------------------------------------------------------
Grants per Year.................              54            97.2              19            21.3           -75.9
Funding per year................     $41,003,751            98.2      $8,576,609             7.2           -90.9
----------------------------------------------------------------------------------------------------------------
                                                 Repetitive Loss
----------------------------------------------------------------------------------------------------------------
Grants per Year.................            0.71             1.3               8               9            +7.7
Funding per year................        $644,102             1.5     $17,352,475            14.6           +13.1
----------------------------------------------------------------------------------------------------------------
                                             Severe Repetitive Loss
----------------------------------------------------------------------------------------------------------------
Grants per Year.................            0.86             1.5              62            69.7           +68.2
----------------------------------------------------------------------------------------------------------------
Funding per year................        $119,873             0.3     $92,568,270            78.1           +77.8
----------------------------------------------------------------------------------------------------------------

    When comparing pre-BW-12 standard mitigation grants to post-BW-12, 
the average annual total amount of funding dropped from $41 million to 
$8.6 million. For RL structures, the average annual amount of funding 
increased from $0.64 million to $17.4 million. For SRL structures, the 
average annual funding increased from $0.12 million to $92.6 million 
when compared to pre-BW-12. This reflects BW-12 shifting priority from 
standard mitigations to RL and SRL structures. FEMA's data indicate a 
trend toward both larger project sizes and an increased number of RL 
and SRL projects.
    FEMA then analyzed the distributional impacts of the Federal cost 
shares that resulted from both the shift in priorities and the changes 
in cost shares. The Federal cost share for standard mitigation grants 
remained at 70 percent over the post-BW-12 period. The cost share for 
RL grants increased from an average of 75 percent pre-BW-12 to 87 
percent post-BW-12. SRL grants had an average 92 percent cost share 
pre-BW-12 and a 94 percent cost share post-BW-12. FEMA also analyzed 
the change in the Federal cost share for the three grant categories 
together, which shows the impact of BW-12 changes to cost share amounts 
as well as shifting funding to RL and SRL grants, which have higher 
cost shares.
    The total Federal share of all FMA grant categories pre-BW-12 was 
70.4 percent [($205,762,109 / $292,374,087) x 100]. Post BW-12, the 
Federal share was 91.5 percent [($758,759,675 / $829,481,486) x 100]. 
The increase in transfers from FEMA to grantees as a result of the 
changed cost shares and changed priorities, in terms of post-BW-12 
grant funding, was $174,739,761(91.5 percent -70.4 percent x 
$829,481,486) over seven years, or an average increase of $24,962,823 
per year.
    Under a no-action baseline, this rule results in no transfer 
impacts, as FEMA has already implemented the updated cost share 
percentages in the 2013 HMA Guidance. Under a pre-statutory (pre-BW-12) 
baseline, the revisions to the cost share and re-prioritization to 
grants with higher cost shares result in distributional transfer 
impacts shifting funding to the most vulnerable properties and an 
increase in transfers from FEMA to grant recipients. The discounted 
total seven-year transfers from FEMA to grant recipients are 
$174,739,761 million ($24.96 million annual average).\21\
---------------------------------------------------------------------------

    \21\ The annualized amounts for 3 percent and 7 percent are 
equal to the estimated annual transfers of $24.96 million because 
the amounts for each year are identical and the first year is 
discounted.
---------------------------------------------------------------------------

    Mitigation Planning Grants. BW-12 lowered the funding cap on the 
amount of money that could be used for the flood portion of the 
individual multi-hazard mitigation plans from $150,000 in recipients 
and $50,000 for subrecipients to $50,000 per recipient and $25,000 per 
subrecipient, but removed a restriction that grantees could only 
receive funding for planning grants once every 5 years. Lowering the 
cap on Federal funds results in decreased funding per applicant. 
However, FEMA believes this is offset

[[Page 50661]]

by the removal of the frequency restriction, which results in a 
negligible change in the number of approved applications and awards. 
FEMA found that the data does not show a substantial change in the 
number of applications, and thus FEMA assumed that the removal of the 
5-year restriction is countered by the lowered cap on funding, 
resulting in minimal distributional impacts as shown in Table 7. 
Because FEMA implemented these changes concurrently, FEMA was unable to 
isolate the effects of individual changes.

                                  Table 7--Mitigation Planning Grants 2006-2019
                                                     [2019$]
----------------------------------------------------------------------------------------------------------------
                                                                                     Approved     Average  grant
                              Year                                 Applications       grants           amount
----------------------------------------------------------------------------------------------------------------
2006............................................................             167              92        $291,961
2007............................................................             561             481          88,076
2008............................................................             523             374          83,738
2009............................................................             491             346          83,738
2010............................................................             364             288          82,992
2011............................................................             417             363         104,024
2012............................................................             173             155         144,992
----------------------------------------------------------------------------------------------------------------
Average Pre-BW-12...............................................             385             300         125,646
----------------------------------------------------------------------------------------------------------------
2013............................................................             260             228         117,107
2014............................................................             293             264          89,362
2015............................................................             351             315          94,685
2016............................................................             329             287         173,348
2017............................................................             422             377         100,049
2018............................................................             287             248         151,711
2019............................................................             149             116         105,929
----------------------------------------------------------------------------------------------------------------
Average Post-BW-12..............................................             299             262         118,884
----------------------------------------------------------------------------------------------------------------

    Since 2013, FEMA has applied the new caps on funding for FMA 
planning grants per recipient and subrecipient. The caps align with and 
reflect FEMA's shift to focus the majority of FMA program funds on 
mitigating the risk to the most vulnerable properties. FEMA is no 
longer constrained by any limit on how often a recipient or 
subrecipient can receive a planning grant or the total amount that can 
be granted to a recipient. Further, the lower caps per recipient and 
subrecipient allow FEMA to assist more recipients and subrecipients.
Alternatives
    Most of the changes in this rule are based on statute. FEMA has 
limited discretion in determining which changes to make. The changes 
that carry an economic impact under a pre-statutory (pre-BW-12) 
baseline are the changes to 44 CFR 79.4 (now 44 CFR 77.4): FMA Grant 
Federal Cost Shares and 44 CFR 79.6 (now 44 CFR 77.6): Flood Portion of 
Multi-Hazard Mitigation Plans. BW-12 prescribed these changes. These 
changes are neither new nor discretionary and FEMA did not consider 
alternatives.
    Below, the OMB A-4 Accounting Statement presents the annualized 
costs, benefits, and transfer payments of the final rule in 2019 
dollars using the no-action baseline. Accordingly, the below accounting 
statement shows the costs and benefits of this rule measured against 
what the world would be like if this rule were not adopted.

                              Table 8--A-4 Accounting Statement--No Action Baseline
                                                     [2019$]
----------------------------------------------------------------------------------------------------------------
                                        Period of analysis: 2021 to 2030
-----------------------------------------------------------------------------------------------------------------
                                                                                          Source citation (RIA,
               Category                7 Percent discount rate  3 Percent discount rate      preamble, etc.)
----------------------------------------------------------------------------------------------------------------
BENEFITS:
    Annualized Monetized.............  $81,159................  $81,159................  Preamble (RA).
    Annualized Quantified............  N/A....................  N/A....................
                                      --------------------------------------------------
    Qualitative......................   Allows FEMA to target most vulnerable    Preamble (RA).
                                        properties and streamline mitigation grant
                                        process.
                                        Modernize and standardize regulations
                                        to align current practice with other FEMA
                                        programs and increase readability.
                                      --------------------------------------------------
COSTS:
    Annualized Monetized.............  $746...................  $638...................  Preamble (RA).
    Annualized quantified............  N/A....................  N/A....................
                                      --------------------------------------------------
    Qualitative......................  N/A
                                      --------------------------------------------------
TRANSFERS:

[[Page 50662]]

 
    Annualized Monetized.............  0......................  0......................  Preamble (RA).
                                      --------------------------------------------------
    From/To..........................                        N/A.                        Preamble (RA).
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
                                                         Source citation
           Category                     Effects          (RIA, preamble,
                                                              etc.)
------------------------------------------------------------------------
State, Local, and/or Tribal      Allows State,  Preamble (RA).
 Government.                     local, and Tribal
                                 governments to
                                 prioritize more
                                 vulnerable properties
                                 and simplifies the
                                 grant process.
Small business................  There were 391 small    Preamble (FRFA).
                                 entity recipients
                                 from 2006-2019. Prior
                                 to BW-12, an average
                                 of 16 recipients per
                                 year were small
                                 entities. Post-BW-12,
                                 there was an average
                                 of 40 small entity
                                 recipients per year.
                                 Post-BW-12, small
                                 entities were more
                                 likely to receive RL
                                 or SRL grants and
                                 slightly less likely
                                 to receive standard
                                 mitigation grants, so
                                 the Federal cost
                                 shares (i.e., the
                                 portion of the grant
                                 funded by FEMA) for
                                 small entities were,
                                 on average, higher
                                 post-BW-12.
Wages.........................  None..................
Growth........................  None..................
------------------------------------------------------------------------

    FEMA also assessed the impacts of this rule under the pre-statutory 
baseline. The pre-statutory baseline is an assessment against what the 
world would be like if the relevant statute(s) had not been adopted, 
and in this case, already been implemented through guidance. FEMA 
estimates the impact of the changes codified in this rule to primarily 
be an increase in transfers from FEMA to HMA recipients of $24.96 
million annualized, due to the targeting of higher risk properties for 
grant funding. Additionally, the changes codified by this rule shifted 
from State-based allocations to a competitive process, allowing FEMA to 
select applications according to FEMA priorities rather than by 
location. This rule also eliminated limits on in-kind contributions, 
allowing recipients more flexibility to cover their portion of the cost 
shares. FEMA implemented the pre-statutory provisions of this rule in 
the 2013 HMA Unified Guidance.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires agency review of proposed and final rules to assess their 
impact on small entities. When an agency promulgates a notice of 
proposed rulemaking under 5 U.S.C. 553, the agency must prepare a Final 
Regulatory Flexibility Analysis (FRFA) unless it determines and 
certifies pursuant to 5 U.S.C. 605(b) that a rule, if promulgated, will 
not have a significant impact on a substantial number of small 
entities. FEMA believes this rule does not have a significant economic 
impact on a substantial number of small entities.
    In accordance with the Regulatory Flexibility Act of 1980 (RFA), 5 
U.S.C. 601 et seq., as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FEMA 
examined the effects of the adjustments made by BW-12 and implemented 
by FEMA in the 2013 HMA Guidance on small entities. A small entity may 
be: A small independent business, defined as independently owned and 
operated, is organized for profit, and is not dominant in its field per 
the Small Business Act (5 U.S.C. 632); a small organization, defined as 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field (5 U.S.C. 601); or a small 
governmental jurisdiction (locality with fewer than 50,000 people) per 
5 U.S.C. 601.
    The rule directly affects all eligible FMA grant recipients. FEMA 
estimates that the changes from BW-12 affect FMA grant recipients that 
are small governmental jurisdictions with a population of less than 
50,000, as defined at 5 U.S.C. 601(5).\22\ To estimate the effects on 
small entities of the adjustments made by BW-12, and codified in this 
rule, FEMA used the same methodology used in the regulatory 
analysis.\23\ In general, FEMA identified the affected population--
recipients of FEMA's FMA grants--and analyzed how the changes affect 
those recipients. Using those results, FEMA then evaluated which 
recipients qualified as ``small entities.'' Eligible FMA grant 
recipients may include States, U.S. territories, and Indian Tribal 
governments; subrecipients may include local governments and 
governmental organizations such as flood, sewer, and water districts. 
FEMA removed from its RFA dataset and analysis any recipients that are 
States and U.S. territories because they have populations greater than 
50,000. FEMA also removed any Indian Tribal governments because they 
are not included in the definition of a small entity.\24\ The remaining 
recipients

[[Page 50663]]

were either local governments or governmental organizations. FEMA used 
the U.S. Census Bureau's annual population estimates for 2019 produced 
by its Population Estimates Program (PEP) \25\ to determine the 
population for each recipient.\26\ Table 9 summarizes the number of 
small entities affected by the changes in BW-12.
---------------------------------------------------------------------------

    \18\ See 5 U.S.C. 601(3)-(6). In general, the term ``small 
entity'' can have the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction'' for 
purposes of this analysis. Specifically, section 601(3) defines a 
``small business'' as having the same meaning as ``small business 
concern'' under section 3 of the Small Business Act. This includes 
any small business concern that is independently owned and operated 
that is not dominant in its field of operation. Section 601(4) 
defines a ``small organization'' as any not-for-profit enterprise 
that is independently owned and operated that is not dominant in its 
field of operation. Section 601(5) defines ``small governmental 
jurisdiction'' as governments of cities, counties, towns, townships, 
villages, school districts, or special districts with a population 
of less than 50,000. Accessed and downloaded Feb 24, 2021. http://uscode.house.gov/view.xhtml?req=(title:5section:601edition:prelim) 
OR (granuleid:U.S.C.-prelim-title5-
section601)&f=treesort&edition=prelim#=0&jumpTo=true.
    \23\ FEMA's methodology is included in section IV. Regulatory 
Analysis of this final rule.
    \24\ The Regulatory Flexibility Act (RFA) defines a small entity 
as a small business, small nonprofit organization, or a small 
governmental jurisdiction. Section 601(5) defines small governmental 
jurisdictions as governments of cities, counties, towns, townships, 
villages, school districts, or special districts with a population 
of less than 50,000.
    \25\ FEMA used the U.S. Census Bureau's PEP estimates file 
entitled, ``sub-est2019_all.csv'' because it provided 2019 estimated 
populations for all States and all subgovernmental jurisdictions, 
including counties, parishes, etc., towns, cities, villages, etc. 
Accessed and downloaded Feb 24, 2021. https://www2.census.gov/programs-surveys/popest/datasets/2010-2019/cities/totals/.
    \26\ FEMA used the population of the county, parish, or borough 
in which the grant project was located as a proxy to determine the 
populations for governmental organizations. For example, FEMA used 
the New Castle County, DE 2019 population of 558,753 to determine if 
the New Castle Conservation District was a small entity. In this 
example, the population of 558,753 is greater than the 50,000 small 
entity threshold; thus, the new Castle Conservation District is not 
a small entity.

                        Table 9--Estimated Number of Small Entities Affected by This Rule
----------------------------------------------------------------------------------------------------------------
                                                                                     Grants to      Properties
                                                              Year                small entities   within grants
----------------------------------------------------------------------------------------------------------------
Pre-BW-12.....................................  2006............................              30              67
 
                                                2007............................              25              39
                                                2008............................              16              14
                                                2009............................              18              41
                                                2010............................              11              76
                                                2011............................               4              12
                                                2012............................               8              75
Post-BW-12....................................  2013............................              23              64
                                                2014............................              27              66
                                                2015............................              18              71
                                                2016............................              25              56
                                                2017............................              26              78
                                                2018............................             122              82
                                                2019............................              38              25
                                                                                 -------------------------------
    Total Small Entity Recipients.............  ................................             391             766
                                                                                 -------------------------------
    Total All Recipients......................  ................................           1,551           4,521
                                                                                 -------------------------------
    Small Entity Recipients as a Percent of     ................................           25.2%           17.0%
     Total Recipients.
----------------------------------------------------------------------------------------------------------------
Pre-BW-12.....................................  Total...........................             112             324
                                                Annual Average..................              16              46
Post-BW-12....................................  Total...........................             279             442
                                                Annual Average..................              40              63
----------------------------------------------------------------------------------------------------------------

    Between 2006 and 2019, FEMA awarded a total of 1,551 FMA grants to 
mitigate flood risk to 4,521 properties. Of the total 1,551 recipients, 
391 recipients, or 25.2 percent, had populations under 50,000 and are 
considered small entities. These small entities used the FMA grants to 
mitigate flood risk to 766 vulnerable properties. These 391 small 
entity recipients are all local governments.
    Pre-BW-12, FEMA awarded 112 grants to small entities. Of these, 109 
were for standard mitigation with an average Federal cost share of 73 
percent, 2 were RL with an average Federal cost share of 82 percent, 
and 1 was SRL with a cost share of 90 percent.

                                                   Table 10--Pre-BW-12 Projects and Value by Grant Category (2019$) Awarded to Small Entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% Federal cost share)       Repetitive loss (RL) (75% Federal Cost     Severe repetitive loss (SRL) (90%-100%
                                                                -------------------------------------------                   Share)                              Federal Cost Share)
                              Year                                                                         -------------------------------------------------------------------------------------
                                                                   Grants      Value of      Federal share                Value of      Federal share                Value of      Federal share
                                                                                grants         obligated      Grants       grants         obligated      Grants       grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2006...........................................................         30      $6,014,828      $4,467,682  .........  ..............  ..............  .........  ..............  ..............
2007...........................................................         25      11,015,869       7,786,046  .........  ..............  ..............  .........  ..............  ..............
2008...........................................................         16       2,189,233       1,603,820  .........  ..............  ..............  .........  ..............  ..............
2009...........................................................         15       8,068,507       5,868,226          2      $2,393,363      $1,952,676          1         $59,465         $53,518
2010...........................................................         11      15,403,139      11,551,457  .........  ..............  ..............  .........  ..............  ..............
2011...........................................................          4       2,950,334       2,079,950  .........  ..............  ..............  .........  ..............  ..............
2012...........................................................          8       6,509,829       4,876,130  .........  ..............  ..............  .........  ..............  ..............
                                                                --------------------------------------------------------------------------------------------------------------------------------
    Total......................................................        109      52,151,739      38,233,311          2       2,393,363       1,952,676          1          59,465          53,518
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Post-BW-12, FEMA awarded 279 grants to small entities. Of these, 40 
were standard mitigation with an average Federal cost share of 69 
percent, 3 were RL with an average Federal cost share of 88 percent, 
and 76 were SRL with an average Federal cost share of 90 percent. While 
the cost shares did not change significantly, more applicants received 
SRL grants when compared to the pre-BW-12 period. This shows the

[[Page 50664]]

prioritization of more vulnerable properties.

                                                   Table 11--Post-BW-12 Projects and Value by Grant Category (2019$) Awarded to Small Entities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Standard (<=75% Federal cost share)       Repetitive loss (RL) (75%-90% Federal        Severe repetitive loss (SRL) (100%
                                                                -------------------------------------------                cost share)                            Federal cost share)
                              Year                                                                         -------------------------------------------------------------------------------------
                                                                   Grants      Value of      Federal share                Value of      Federal share                Value of      Federal share
                                                                                grants         obligated      Grants       grants         obligated      Grants       grants         obligated
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2013...........................................................          8        $972,391        $435,490          1      $7,274,609      $6,452,685         14      $5,720,524      $3,778,669
2014...........................................................         11       2,575,473       1,623,207  .........  ..............  ..............         16      12,558,967      12,235,583
2015...........................................................          3       2,478,165       1,858,623  .........  ..............  ..............         15      10,676,146      10,007,363
2016...........................................................          6         290,884         197,705          2       1,798,791       1,556,119         17      10,678,636       9,299,774
2017...........................................................         12       5,191,261       3,881,929  .........  ..............  ..............         14       9,198,557       8,627,638
2018...........................................................         41       1,703,802       1,109,366          3       2,014,308       1,764,641         78      16,081,572      14,090,559
2019...........................................................         13         648,276         422,100          1         415,348         363,867         24       3,749,428       3,285,222
                                                                --------------------------------------------------------------------------------------------------------------------------------
    Total......................................................         94      13,860,253       9,528,420          7      11,503,056      10,137,312        178      68,663,830      61,324,808
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    This rule codifies legislative requirements included in the 
Biggert-Waters Flood Insurance Reform Act of 2012, Public Law 112-141, 
126 Stat. 916 (BW-12), which amended the National Flood Insurance Act 
of 1968 (NFIA) and required changes to all major components of the 
National Flood Insurance Program (NFIP), including mitigation grants 
authorized under the NFIA. FEMA implemented the legislative 
requirements in BW-12 through policy/guidance in 2013 and is now 
codifying these changes in regulation, to reflect current agency 
practice, and to clarify existing regulations. Pursuant to 5 U.S.C. 
605(b), FEMA certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities.

C. Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of Federal regulatory 
actions on state, local, and Tribal governments, and the private sector 
(other than to the extent that such regulations incorporate 
requirements specifically set forth in law).'' Section 202 of the Act 
(2 U.S.C. 1532) further requires that ``before promulgating any 
rulemaking that is likely to result in the promulgation of any rule 
that includes any Federal mandate that may result in expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year, and before promulgating any final rule for 
which a general notice of proposed rulemaking was published, the agency 
shall prepare a written statement'' detailing the effect on State, 
local, and Tribal governments and the private sector. This rule does 
not result in such an expenditure, and thus preparation of such a 
statement is not required.

D. National Environmental Policy Act of 1969 (NEPA)

    Section 102 of the National Environmental Policy Act of 1969 
(NEPA), 83 Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321 et seq.) requires 
Federal agencies to consider the impacts of their proposed actions on 
the quality of the human environment. Each agency can develop 
categorical exclusions (catexes) to cover actions that have been 
demonstrated to not typically trigger significant impacts to the human 
environment individually or cumulatively. If an action does not qualify 
for a catex and has the potential to significantly affect the 
environment, agencies develop environmental assessments (EAs) to 
evaluate those actions. The Council on Environmental Quality's (CEQ) 
procedures for implementing NEPA, 40 CFR parts 1500 through 1508, 
require Federal agencies to prepare Environmental Impact Statements 
(EISs) for major Federal actions significantly affecting the quality of 
the human environment. At the end of the EA process, the agency will 
determine whether to make a Finding of No Significant Impact (FONSI) or 
whether to initiate the EIS process.
    Under the National Environmental Policy Act of 1969 (NEPA), as 
amended, 42 U.S.C. 4321 et seq. an agency must prepare an Environmental 
Assessment (EA) and Environmental Impact Statement (EIS) for any 
rulemaking that significantly affects the quality of the human 
environment. FEMA has determined that this rulemaking does not 
significantly affect the quality of the human environment and 
consequently has not prepared an EA or EIS.
    Catex A3 included in the list of exclusion categories at Department 
of Homeland Security Instruction Manual 023-01-001-01, Revision 01, 
Implementation of the National Environmental Policy Act, Appendix A, 
issued November 6, 2014, covers the promulgation of rules, issuance of 
rulings or interpretations, and the development and publication of 
policies, orders, directives, notices, procedures, manuals, and 
advisory circulars if they meet certain criteria provided in A3(a-f). 
This rule meets the criteria in A3(a), (b), (c), and (d). The rule 
makes a number of regulatory revisions that are strictly 
administrative. In addition, the rule amends an existing regulation 
without changing its environmental effect, and also implements, without 
substantive change, statutory requirements and guidance documents. 
Because no extraordinary circumstances have been identified, this rule 
does not require the preparation of either an EA or an EIS as defined 
by NEPA. See Department of Homeland Security Instruction Manual 023-01-
001-01, Revision 01, Implementation of the National Environmental 
Policy Act, section (V)(B)(2).

E. Endangered Species Act

    The Endangered Species Act (ESA) mandates that Federal agencies 
determine whether their proposed actions may affect listed species and/
or their designated critical habitat (critical habitat has been 
designated for some, but not all listed species). Without authorization 
or exemption from Federal resource agencies, it is unlawful for any 
person, whether government employee or private citizen, to take listed 
animal species.
    To comply with Section 7(a)(2) of the ESA, for every action that 
FEMA proposes to carry out, fund, or authorize, FEMA must first 
determine if species and habitat are present in the action area. If 
species are present in the

[[Page 50665]]

action area, then FEMA must make one of the following determinations 
with respect to the effect of the proposed action on listed species and 
critical habitat: (1) No effect (NE); 2) may affect, but is not likely 
to adversely affect (NLAA); or 3) may affect and is likely to adversely 
affect (LAA).
    This rule has been evaluated by FEMA and due to the administrative 
nature, FEMA has determined the rule does not have the potential to 
affect federally-listed species or designated critical habitat. As 
such, a ``No Effect'' determination has been made for these activities. 
Per the ESA regulations, notification to, and consultation with, the 
U.S. Fish and Wildlife Service and/or the National Marine Fisheries 
Service are not required for activities with a ``No Effect'' 
determination.

F. National Historic Preservation Act of 1966

    The National Historic Preservation Act (NHPA) (54 U.S.C. 300101, 
formerly 16 U.S.C. 470) was enacted in 1966, with various amendments 
throughout the years. Section 106 of the NHPA (54 U.S.C. 306108) 
requires Federal agencies to take into account the effect of their 
actions on any historic property. It mandates a consultation process in 
the early stages of project planning and must be completed prior to the 
approval of expenditure of any Federal funds for the undertaking. 
Subpart B of 36 CFR part 800 lays out a four-step Section 106 process 
to fulfill this obligation: (1) Initiate the process (800.3); (2) 
identify historic properties (800.4); (3) assess adverse effects 
(800.5); and (4) resolve adverse effects (800.6).
    Pursuant to section 106 of the NHPA and its implementing 
regulations at 36 CFR part 800, FEMA has determined that this rule does 
not have the potential to cause effects to historic properties and in 
accordance with 36 CFR part 800.3(a)(1), FEMA has no further 
obligations under section 106.

G. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 
U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
agency obtains approval from the Office of Management and Budget (OMB) 
for the collection and the collection displays a valid OMB control 
number. See 44 U.S.C. 3506, 3507. This rule contains collections of 
information that are subject to review by OMB. The information 
collections included in this rule are approved by OMB under control 
numbers 1660-0072 (Flood Mitigation Assistance (eGrants) and Grant 
Supplement Information), 1660-0062 (State/Local/Tribal Hazard 
Mitigation Plans), 1660-0026 (State Administrative Plan for the Hazard 
Mitigation Grant Program), and 1660-0076 (Hazard Mitigation Grant 
Program Application and Reporting). Currently, FEMA is working to 
reinstate 1660-0103 (Property Acquisition and Relocation for Open 
Space).
    This rulemaking calls for no new collections of information under 
the PRA. This rule includes information currently collected by FEMA and 
approved in OMB information collections 1660-0072, 1660-0062, 1660-
0026, and 1660-0076. Currently, FEMA is working to reinstate 1660-0103. 
The actions of this rulemaking do not impose any additional burden to 
this collection of information. The changes in this rulemaking do not 
change the forms, the substance of the forms, or the number of 
recipients who would submit the forms to FEMA.

H. Privacy Act/E-Government Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must 
determine whether implementation of a proposed regulation will result 
in a system of records. A record is any item, collection, or grouping 
of information about an individual that is maintained by an agency, 
including, but not limited to, his/her education, financial 
transactions, medical history, and criminal or employment history and 
that contains his/her name, or the identifying number, symbol, or other 
identifying particular assigned to the individual, such as a finger or 
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A system of 
records is a group of records under the control of an agency from which 
information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual. An agency cannot disclose any record which is contained 
in a system of records except by following specific procedures.
    The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires 
specific procedures when an agency takes action to develop or procure 
information technology that collects, maintains, or disseminates 
information that is in an identifiable form. This Act also applies when 
an agency initiates a new collection of information that will be 
collected, maintained, or disseminated using information technology if 
it includes any information in an identifiable form permitting the 
physical or online contacting of a specific individual. A Privacy 
Threshold Analysis was completed.

I. 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 shall 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.
    Although Indian Tribal governments are potentially eligible 
applicants under HMA programs, FEMA has determined that this rule does 
not have a substantial direct effect on one or more Indian Tribes, on 
the relationship between the Federal Government and Indian Tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. There is no substantial direct compliance 
cost associated with this rule. The HMA programs are voluntary programs 
that provide funding to applicants, including Tribal governments, for 
eligible mitigation planning and projects that reduce disaster losses 
and protect life and property from future disaster damages. An Indian 
Tribal government may participate as either an applicant/recipient or a 
subapplicant/subrecipient. FEMA does not expect the regulatory changes 
in this rule to disproportionately affect Indian Tribal governments 
acting as recipients.

J. Executive Order 13132, Federalism

    Executive Order 13132, Federalism, 64 FR 43255, August 10, 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, on the relationship between the national government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. Federal agencies must closely examine 
the

[[Page 50666]]

statutory authority supporting any action that would limit the 
policymaking discretion of the States, and to the extent practicable, 
must consult with State and local officials before implementing any 
such action.
    FEMA has reviewed this rule under Executive Order 13132 and has 
determined that this rule does not have substantial direct effects on 
the States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, and therefore does not have federalism 
implications as defined by the Executive Order. FEMA has determined 
that this rule does not significantly affect the rights, roles, and 
responsibilities of States, and involves no preemption of State law nor 
does it limit State policymaking discretion. This rulemaking amends 
regulations governing voluntary grant programs that may be used by 
State, local and Tribal governments to fund eligible mitigation 
activities that reduce disaster losses and protect life and property 
from future disaster damages. States are not required to seek grant 
funding, and this rulemaking does not limit their policymaking 
discretion.

K. Executive Order 11988, Floodplain Management

    Pursuant to Executive Order 11988, each Federal agency is required 
to provide leadership and take action to reduce the risk of flood loss, 
to minimize the impact of floods on human safety, health and welfare, 
and to restore and preserve the natural and beneficial values served by 
floodplains in carrying out its responsibilities for (1) acquiring, 
managing, and disposing of Federal lands and facilities; (2) providing 
Federally undertaken, financed, or assisted construction and 
improvements; and (3) conducting Federal activities and programs 
affecting land use, including but not limited to water and related land 
resources planning, regulating, and licensing activities. In carrying 
out these responsibilities, each agency must evaluate the potential 
effects of any actions it may take in a floodplain; to ensure that its 
planning programs and budget requests reflect consideration of flood 
hazards and floodplain management; and to prescribe procedures to 
implement the policies and requirements of the Executive Order.
    Before promulgating any regulation, an agency must determine 
whether the regulation will affect a floodplain(s), and if so, the 
agency must consider alternatives to avoid adverse effects and 
incompatible development in the floodplain(s). If the head of the 
agency finds that the only practicable alternative consistent with the 
law and with the policy set forth in Executive Order 11988 is to 
promulgate a regulation that affects a floodplain(s), the agency must, 
prior to promulgating the regulation, design or modify the regulation 
in order to minimize potential harm to or within the floodplain, 
consistent with the agency's floodplain management regulations and 
prepare and circulate a notice containing an explanation of why the 
action is located in the floodplain. The purpose of the rule is to 
update FEMA's HMA program regulations to reflect statutory changes that 
have already been implemented. While the rule revises the regulations 
for FMA administered by the NFIP, it would not impact other NFIA 
regulations that pertain to land use, floodplain management, or flood 
insurance. The majority of the revisions in this rulemaking apply to 
the regulations for the FMA program, which is a voluntary grant program 
that provides funding for activities designed to reduce the risk of 
flood damage to structures insured under the NFIP. When FEMA undertakes 
specific actions that may have effects on floodplain management, FEMA 
follows the procedures set forth in 44 CFR part 9 to assure compliance 
with this Executive Order. These procedures include a specific, 8-step 
process for conducting floodplain management and wetland reviews. The 
rule does not change this process.

L. Executive Order 11990, Protection of Wetlands

    Pursuant to Executive Order 11990, each Federal agency must provide 
leadership and take action to minimize the destruction, loss or 
degradation of wetlands, and to preserve and enhance the natural and 
beneficial values of wetlands in carrying out the agency's 
responsibilities for (1) acquiring, managing, and disposing of Federal 
lands and facilities; and (2) providing Federally undertaken, financed, 
or assisted construction and improvements; and (3) conducting Federal 
activities and programs affecting land use, including but not limited 
to water and related land resources planning, regulating, and licensing 
activities. Each agency, to the extent permitted by law, must avoid 
undertaking or providing assistance for new construction located in 
wetlands unless the head of the agency finds (1) that there is no 
practicable alternative to such construction, and (2) that the proposed 
action includes all practicable measures to minimize harm to wetlands 
which may result from such use. In making this finding the head of the 
agency may take into account economic, environmental and other 
pertinent factors.
    In carrying out the activities described in the Executive Order, 
each agency must consider factors relevant to a proposal's effect on 
the survival and quality of the wetlands. Among these factors are: 
Public health, safety, and welfare, including water supply, quality, 
recharge and discharge; pollution; flood and storm hazards; and 
sediment and erosion; maintenance of natural systems, including 
conservation and long-term productivity of existing flora and fauna, 
species and habitat diversity and stability, hydrologic utility, fish, 
wildlife, timber, and food and fiber resources; and other uses of 
wetlands in the public interest, including recreational, scientific, 
and cultural uses.
    The requirements of Executive Order 11990 apply in the context of 
the provision of Federal financial assistance relating to, among other 
things, construction and property improvement activities. However, this 
rule would not have an effect on land use or wetlands. The purpose of 
the rule is to update FEMA's HMA program regulations to reflect 
statutory changes that have already been implemented. While the rule 
revises the regulations for FMA administered by the NFIP, it does not 
impact other NFIP regulations that pertain to land use, floodplain 
management, or flood insurance. The majority of the revisions in this 
rulemaking apply to the regulations for the FMA program, which is a 
voluntary grant program that provides funding for activities designed 
to reduce the risk of flood damage to structures insured under the 
NFIP. When FEMA undertakes specific actions that may have effects on 
wetlands, FEMA follows the procedures set forth in 44 CFR part 9 to 
assure compliance with this Executive Order. These procedures include a 
specific, 8-step process for conducting floodplain management and 
wetland reviews. The rule would not change this process.

M. Executive Order 12898, Environmental Justice

    Pursuant to Executive Order 12898, Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations, 59 FR 7629, February 16, 1994, as amended by Executive 
Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates 
environmental justice into its policies and programs.

[[Page 50667]]

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 programs, denying persons the benefits of 
programs, or subjecting persons to discrimination because of race, 
color, or national origin. This rulemaking will not have a 
disproportionately high or adverse effect on human health or the 
environment.

N. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5 
U.S.C. 801-808, before a rule can take effect, the Federal agency 
promulgating the rule must submit to Congress and to the Government 
Accountability Office (GAO) a copy of the rule, a concise general 
statement relating to the rule, including whether it is a major rule, 
the proposed effective date of the rule, a copy of any cost-benefit 
analysis, descriptions of the agency's actions under the Regulatory 
Flexibility Act and the Unfunded Mandates Reform Act, and any other 
information or statements required by relevant executive orders.
    FEMA has sent this rule to the Congress and to GAO pursuant to the 
CRA. The rule is not a major rule within the meaning of the CRA. It 
will not have an annual effect on the economy of $100,000,000 or more, 
it will not result in a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions, and it will not have significant 
adverse effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export markets.

List of Subjects

44 CFR Part 77

    Flood insurance, Grant programs.

44 CFR Parts 78 and 79

    Flood insurance, Grant programs.

44 CFR Part 80

    Disaster assistance, Grant programs.

44 CFR Part 201

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

44 CFR Part 206

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

    For the reasons set forth in the preamble, FEMA amends 44 CFR parts 
77, 78, 79, 80, 201, and 206 as follows:

PART 78--[REMOVED AND RESERVED]

0
2. Under the authority of 6 U.S.C. 101 et seq.; 42 U.S.C. 4001 et seq.; 
42 U.S.C. 4104c, 4104d, remove and reserve part 78.

PART 79--[REDESIGNATED]

0
2. Redesignate part 79 as part 77:

0
3. Revise newly redesignated part 77 to read as follows:

PART 77--FLOOD MITIGATION GRANTS

Sec.
77.1 Purpose and applicability.
77.2 Definitions.
77.3 Responsibilities.
77.4 Availability of funding.
77.5 Application process.
77.6 Eligibility.
77.7 Allowable costs.
77.8 Grant administration.

    Authority: 6 U.S.C. 101 et seq.; 42 U.S.C. 4001 et seq.; 42 
U.S.C. 4104c, 4104d.


Sec.  77.1   Purpose and applicability.

    (a) The purpose of this part is to prescribe actions, procedures, 
and requirements for administration of the Flood Mitigation Assistance 
(FMA) grant program made available under the National Flood Insurance 
Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, 
as amended, 42 U.S.C. 4001 et seq. The purpose of the FMA program is to 
assist States, Indian Tribal governments, and communities for planning 
and carrying out mitigation activities designed to reduce the risk of 
flood damage to structures insured under the National Flood Insurance 
Program (NFIP).
    (b) This part applies to the administration of funds under the FMA 
program for which the application period opens on or after October 12, 
2021.


Sec.  77.2  Definitions.

    (a) Except as otherwise provided in this part, the definitions set 
forth in Sec.  59.1 of this subchapter are applicable to this part.
    (b) Applicant means the entity, such as a State or Indian Tribal 
government, applying to FEMA for a Federal award under the FMA program. 
Once funds have been awarded, the applicant becomes the recipient and 
may also be a pass-through entity.
    (c) Closeout means the process by which FEMA or the pass-through 
entity determines that all applicable administrative actions and all 
required work of the Federal award have been completed and takes 
actions as described in 2 CFR 200.344, ``Closeout.''
    (d) Community means:
    (1) A political subdivision, including any Indian Tribe, authorized 
Tribal organization, Alaska Native village or authorized native 
organization, that has zoning and building code jurisdiction over a 
particular area having special flood hazards, and is participating in 
the NFIP; or
    (2) A political subdivision of a State or other authority that is 
designated by political subdivisions, all of which meet the 
requirements of paragraph (d)(1) of this section, to administer grants 
for mitigation activities for such political subdivisions.
    (e) Federal award means the Federal financial assistance a 
recipient or subrecipient receives directly from FEMA or indirectly 
from a pass-through entity. The terms ``award'' and ``grant'' may also 
be used to describe a Federal award under this part.
    (f) Indian Tribal government means any Federally recognized 
governing body of an Indian or Alaska Native Tribe, band, nation, 
pueblo, village, or community that the Secretary of Interior 
acknowledges to exist as an Indian Tribe under the Federally Recognized 
Indian Tribe List Act of 1994, 25 U.S.C. 5131. This does not include 
Alaska Native corporations, the ownership of which is vested in private 
individuals.
    (g) Pass-through entity means a recipient that provides a subaward 
to a subrecipient to carry out part of the FMA program.
    (h) Recipient means the State or Indian Tribal government that 
receives a Federal award directly from FEMA. A recipient may also be a 
pass-through entity. The term recipient does not include subrecipients.
    (i) Repetitive loss structure means a structure covered under an 
NFIP flood insurance policy that:
    (1) Has incurred flood-related damage on 2 occasions, in which the 
cost of repair, on average, equaled or exceeded 25% of the value of the 
structure at the time of each such flood event; and

[[Page 50668]]

    (2) At the time of the second incidence of flood related damage, 
the contract for flood insurance contains increased cost of compliance 
coverage.
    (j) Severe repetitive loss structure means a structure that is 
covered under an NFIP flood insurance policy and has incurred flood-
related damage:
    (1) For which 4 or more separate claims payments have been made 
under flood insurance coverage under subchapter B of this chapter, with 
the amount of each claim (including building and contents payments) 
exceeding $5,000, and with the cumulative amount of such claims 
payments exceeding $20,000; or
    (2) For which at least 2 separate flood insurance claims payments 
(building payments only) have been made, with cumulative amount of such 
claims exceeding the value of the insured structure.
    (k) State means any state of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, 
Guam, American Samoa, and the Commonwealth of the Northern Mariana 
Islands.
    (l) Subaward means an award provided by a pass-through entity to a 
subrecipient, for the subrecipient to carry out part of a Federal award 
received by the pass-through entity. It does not include payments to a 
contractor or payments to an individual that is a beneficiary of a 
Federal program. A subaward may be provided through any form of legal 
agreement, including an agreement that the pass-through entity 
considers a contract.
    (m) Subapplicant means a State agency, community, or Indian Tribal 
government submitting a subapplication to the applicant for assistance 
under the FMA program. Upon grant award, the subapplicant is referred 
to as the subrecipient.
    (n) Subrecipient means the State agency, community, or Indian 
Tribal government that receives a subaward from a pass-through entity 
for the subrecipient to carry out an activity under the FMA program.
    (o) Administrator means the head of the Federal Emergency 
Management Agency, or his/her designated representative.
    (p) Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative.


Sec.  77.3  Responsibilities.

    (a) Federal Emergency Management Agency (FEMA). Administer and 
provide oversight to all FEMA-related hazard mitigation programs and 
grants, including:
    (1) Issue program implementation procedures, as necessary, which 
will include information on availability of funding;
    (2) Award all grants to the recipient after evaluating subaward 
applications for eligibility and ensuring compliance with applicable 
Federal laws, giving priority to such properties, or to the subset of 
such properties, as the Administrator may determine are in the best 
interest of the NFIF;
    (3) Provide technical assistance and training to State, local and 
Indian Tribal governments regarding the mitigation and grants 
management process;
    (4) Review and approve State, Indian Tribal, and local mitigation 
plans in accordance with part 201 of this chapter;
    (5) Comply with applicable Federal statutory, regulatory, and 
Executive Order requirements related to environmental and historic 
preservation compliance, including reviewing and supplementing, if 
necessary, the environmental analyses conducted by the State and 
subrecipient in accordance with applicable laws, regulations, and 
agency policy;
    (6) Monitor implementation of awards through quarterly reports; and
    (7) Review all closeout documentation for compliance and sending 
the recipient a request for additional supporting documentation, if 
needed.
    (b) Recipient. The recipient must have working knowledge of NFIP 
goals, requirements, and processes and ensure that the program is 
coordinated with other mitigation activities. Recipients will:
    (1) Have a FEMA approved Mitigation Plan in accordance with part 
201 of this chapter;
    (2) Provide technical assistance and training to communities on 
mitigation planning, mitigation project activities, developing subaward 
applications, and implementing approved subawards;
    (3) Prioritize and recommend subaward applications to be approved 
by FEMA, based on the applicable mitigation plan(s), other evaluation 
criteria, and the eligibility criteria described in Sec.  77.6;
    (4) Award FEMA-approved subawards;
    (5) Monitor and evaluate the progress of the mitigation activity in 
accordance with the approved original scope of work and budget through 
quarterly reports;
    (6) Closeout the subaward in accordance with 2 CFR 200.344 and 
200.345, and applicable FEMA guidance; and
    (7) Comply with program requirements under this part, grant 
management requirements identified under 2 CFR parts 200 and 3002, the 
grant agreement articles, and other applicable Federal, State, Tribal 
and local laws and regulations.
    (c) Subrecipient. The subrecipient (or subapplicant, as applicable) 
will:
    (1) Complete and submit subaward applications to the recipient for 
FMA planning and project subawards;
    (2) Implement all approved subawards;
    (3) Monitor and evaluate the progress of the mitigation activity in 
accordance with the approved original scope of work and budget through 
quarterly reports;
    (4) Comply with program requirements under this part, grant 
management requirements identified under 2 CFR parts 200 and 3002, the 
grant agreement articles, and other applicable Federal, State, Tribal 
and local laws and regulations; and
    (5) Closeout the subaward in accordance with 2 CFR 200.344 and 
200.345, and applicable FEMA guidance.


Sec.  77.4  Availability of funding.

    (a) Allocation. (1) For the amount made available for the FMA 
program, the Administrator will allocate the available funds based upon 
criteria established for each application period. The criteria may 
include the number of NFIP policies, severe repetitive loss structures, 
repetitive loss structures, and any other factors the Administrator 
determines are in the best interests of the NFIF.
    (2) The amount of FMA funds used may not exceed $50,000 for any 
mitigation plan of a State or $25,000 for any mitigation plan of a 
community.
    (b) Cost share. All mitigation activities approved under the grant 
will be subject to the following cost share provisions:
    (1) For each severe repetitive loss structure, FEMA may contribute 
either:
    (i) Up to 100 percent of all eligible costs if the activities are 
technically feasible and cost effective; or
    (ii) Up to the amount of the expected savings to the NFIP for 
acquisition or relocation activities;
    (2) For repetitive loss structures, FEMA may contribute up to 90 
percent of the eligible costs;
    (3) For all other mitigation activities, FEMA may contribute up to 
75 percent of all eligible costs.
    (4) For projects that contain a combination of severe repetitive 
loss, repetitive loss, and/or other insured structures, the cost share 
will be calculated as appropriate for each type of structure submitted 
in the project subapplication.

[[Page 50669]]

    (c) Failure to make award within 5 years. Any FMA application or 
subapplication that does not receive a Federal award within 5 years of 
the application/subapplication submission date is considered to be 
denied, and any funding amounts allocated for such applications/
subapplications will be made available for other FMA awards and 
subawards.


Sec.  77.5  Application process.

    (a) Applicant. (1) Applicants will be notified of the availability 
of funding for the FMA program pursuant to 2 CFR 200.203 and 200.204.
    (2) The applicant is responsible for soliciting applications from 
eligible communities, or subapplicants, and for reviewing and 
prioritizing applications prior to forwarding them to FEMA for review 
and award.
    (b) Subapplicant. Communities or other subapplicants who choose to 
apply must develop subapplications within the timeframes and 
requirements established by FEMA and must submit subapplications to the 
applicant.


Sec.  77.6  Eligibility.

    (a) NFIP requirements. (1) States, Indian Tribal governments, and 
communities must be participating in the NFIP and may not be suspended 
or withdrawn under the program.
    (2) For projects that impact individual structures, for example, 
acquisitions and elevations, an NFIP policy for the structure must be 
in effect prior to the opening of the application period and be 
maintained for the life of the structure.
    (b) Plan requirement--(1) Applicants. States must have a FEMA-
approved mitigation plan meeting the requirements of Sec.  201.4 of 
this chapter that provides for reduction of flood losses to structures 
for which NFIP coverage is available. Indian Tribal governments must 
have a FEMA-approved mitigation plan meeting the requirements of Sec.  
201.7 of this chapter that provides for reduction of flood losses to 
structures for which NFIP coverage is available. The FEMA-approved 
mitigation plan is required at the time of application and award.
    (2) Subapplicants. To be eligible for FMA project grants, 
subapplicants must have an approved mitigation plan in accordance with 
part 201 of this chapter that provides for reduction of flood losses to 
structures for which NFIP coverage is available. The FEMA-approved 
mitigation plan is required at the time of application and award.
    (c) Eligible activities--(1) Planning. FMA planning grants may be 
used to develop or update State, Indian Tribal and/or local mitigation 
plans that meet the planning criteria outlined in part 201 of this 
chapter and provide for reduction of flood losses to structures for 
which NFIP coverage is available.
    (2) Projects. Projects funded under the FMA program are limited to 
activities that reduce flood damages to properties insured under the 
NFIP. Applications involving any activities for which implementation 
has already been initiated or completed are not eligible for funding, 
and will not be considered. Eligible activities are:
    (i) Acquisition of real property from property owners, and 
demolition or relocation of buildings and/or structures to areas 
outside of the floodplain to convert the property to open space use in 
perpetuity, in accordance with part 80 of this subchapter;
    (ii) Elevation of existing structures to at least base flood levels 
or higher, if required by FEMA or if required by any State or local 
ordinance, and in accordance with criteria established by the 
Administrator;
    (iii) Floodproofing of existing non-residential structures in 
accordance with the requirements of the NFIP or higher standards if 
required by FEMA or if required by any State or local ordinance, and in 
accordance with criteria established by the Administrator;
    (iv) Floodproofing of historic structures as defined in Sec.  59.1 
of this subchapter;
    (v) Demolition and rebuilding of properties to at least base flood 
levels or higher, if required by FEMA or if required by any State or 
local ordinance, and in accordance with criteria established by the 
Administrator;
    (vi) Localized flood risk reduction projects that lessen the 
frequency or severity of flooding and decrease predicted flood damages, 
and that do not duplicate the flood prevention activities of other 
Federal agencies. Non-localized flood risk reduction projects such as 
dikes, levees, floodwalls, seawalls, groins, jetties, dams and large-
scale waterway channelization projects are not eligible unless the 
Administrator specifically determines in approving a mitigation plan 
that such activities are the most cost-effective mitigation activities 
for the National Flood Mitigation Fund;
    (vii) Elevation, relocation, or floodproofing of utilities; and
    (viii) Other mitigation activities not described or identified in 
(c)(2)(i) through (vii) of this section that are described in the 
State, Tribal or local mitigation plan.
    (3) Technical assistance. If a recipient applied for and was 
awarded at least $1 million in the prior fiscal year, that recipient 
may be eligible to receive a technical assistance grant for up to 
$50,000.
    (4) Project Scoping. Activities that enable subapplicants to 
develop complete subapplications for eligible mitigation activities 
including but not limited to data development.
    (d) Minimum project criteria. In addition to being an eligible 
project type, mitigation grant projects must also:
    (1) Be in conformance with State, Tribal and/or local mitigation 
plans approved under part 201 of this chapter for the jurisdiction 
where the project is located;
    (2) Be in conformance with applicable environmental and historic 
preservation laws, regulations, and agency policy, including parts 9 
and 60 of this chapter, and other applicable Federal, State, Tribal, 
and local laws and regulations;
    (3) Be technically feasible and cost-effective; or, eliminate 
future payments from the NFIF for severe repetitive loss structures 
through an acquisition or relocation activity;
    (4) Solve a problem independently, or constitute a functional 
portion of a long-term solution where there is assurance that the 
project as a whole will be completed. This assurance will include 
documentation identifying the remaining funds necessary to complete the 
project, and the timeframe for completing the project;
    (5) Consider long-term changes to the areas and entities it 
protects, and have manageable future maintenance and modification 
requirements. The subrecipient is responsible for the continued 
maintenance needed to preserve the hazard mitigation benefits of these 
measures; and
    (6) Not duplicate benefits available from another source for the 
same purpose or assistance that another Federal agency or program has 
more primary authority to provide.


Sec.  77.7  Allowable costs.

    (a) General. General policies for allowable costs for implementing 
awards and subawards are addressed in 2 CFR 200.101, 200.102, 200.400-
200.476.
    (1) Eligible management costs--(i) Recipient. Recipients are 
eligible to receive management costs (direct and indirect 
administrative costs pursuant to 2 CFR part 200 Subpart E) consisting 
of a maximum of 10 percent of the planning and project activities 
awarded to the recipient, each fiscal year under FMA. These costs must 
be included in the application to FEMA.

[[Page 50670]]

    (ii) Subrecipient. Subapplicants may include a maximum of 5 percent 
of the total funds requested for their subapplication for management 
costs to support the implementation of their planning or project 
activity. These costs must be included in the subapplication to the 
recipient.
    (2) Indirect costs. Indirect costs of administering the FMA program 
are eligible as part of the 10 percent management costs for the 
recipient or the 5 percent management costs of the subrecipient, but in 
no case do they make the recipient eligible for additional management 
costs that exceed the caps identified in paragraph (a)(1) of this 
section. In addition, all costs must be in accordance with the 
provisions of 2 CFR parts 200 and 3002.
    (b) Pre-award costs. FEMA may fund eligible pre-award costs related 
to developing the application or subapplication at its discretion and 
as funds are available. Recipients and subrecipients may be reimbursed 
for eligible pre-award costs for activities directly related to the 
development of the project or planning proposal. Costs associated with 
implementation of the activity but incurred prior to award are not 
eligible. Therefore, activities where implementation is initiated or 
completed prior to award are not eligible and will not be reimbursed.
    (c) Duplication of benefits. Grant funds may not duplicate benefits 
received by or available to applicants, subapplicants and project 
participants from insurance, other assistance programs, legal awards, 
or any other source to address the same purpose. Such individual or 
entity must notify the recipient and FEMA of all benefits that it 
receives or anticipates from other sources for the same purpose. FEMA 
will reduce the subaward by the amounts available for the same purpose 
from another source.
    (d) Negligence or other tortious conduct. FEMA grant funds are not 
available where an applicant, subapplicant, other project participant, 
or third party's negligence or intentional actions contributed to the 
conditions to be mitigated. If the applicant, subapplicant, or project 
participant suspects negligence or other tortious conduct by a third 
party for causing such condition, they are responsible for taking all 
reasonable steps to recover all costs attributable to the tortious 
conduct of the third party. FEMA generally considers such amounts to be 
duplicated benefits available for the same purpose, and will treat them 
consistent with paragraph (c) of this section.
    (e) Legal obligations. FEMA grant funds are not available to 
satisfy or reimburse for legal obligations, such as those imposed by a 
legal settlement, court order, or State law.


Sec.  77.8  Grant administration.

    (a) General. Recipients must comply with the requirements contained 
in 2 CFR parts 200 and 3002 and FEMA award requirements, including 
submission of performance and financial status reports. Recipients must 
also ensure that subrecipients are aware of and comply with 2 CFR parts 
200 and 3002.
    (b) Cost overruns. (1) During the implementation of an approved 
grant, the recipient may find that actual costs are exceeding the 
approved award amount. While there is no guarantee of additional 
funding, FEMA will only consider requests made by the recipient to pay 
for such overruns if:
    (i) Funds are available to meet the requested increase in funding; 
and
    (ii) The amended grant award meets the eligibility requirements, 
including cost share requirements, identified in this section.
    (2) Recipients may use cost underruns from ongoing subawards to 
offset overruns incurred by another subaward(s) awarded under the same 
award. All costs for which funding is requested must have been included 
in the original subapplication's cost estimate. In cases where an 
underrun is not available to cover an overrun, the Administrator may, 
with justification from the recipient and subrecipient, use other 
available FMA funds to cover the cost overrun.
    (3) For all cost overruns that exceed the amount approved under the 
award, and which require additional Federal funds, the recipient must 
submit a written request with a recommendation, including a 
justification for the additional funding to the Regional Administrator 
for a determination. If approved, the Regional Administrator will 
increase the award through an amendment to the original award document.
    (c) Recapture. At the time of closeout, FEMA will recapture any 
funds provided to a State or a community under this part if the 
applicant has not provided the appropriate matching funds, the approved 
project has not been completed within the timeframes specified in the 
grant agreement, or the completed project does not meet the criteria 
specified in this part.
    (d) Remedies for noncompliance. FEMA may terminate an award or take 
other remedies for noncompliance in accordance with 2 CFR 200.339 
through 200.343.
    (e) Reconsideration. FEMA will reconsider determinations of 
noncompliance, additional award conditions, or its decision to 
terminate a Federal award. Requests for reconsideration must be made in 
writing to FEMA within 60 calendar days after receipt of a notice of 
the action, and in accordance with submission procedures set out in 
guidance. FEMA will notify the requester of the disposition of the 
request for reconsideration. If the decision is to grant the request 
for reconsideration, FEMA will take appropriate implementing action.

PART 79--[RESERVED]

0
4. Add and reserve part 79.

PART 80--PROPERTY ACQUISITION AND RELOCATION FOR OPEN SPACE

0
5. Revise the authority citation for part 80 to read as follows:

    Authority:  Robert T. Stafford disaster relief and emergency 
assistance act, 42 U.S.C. 5121 through 5207; the National Flood 
Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq.; Homeland 
Security Act of 2002, 6 U.S.C. 101.


0
6. Revise Sec.  80.3 to read as follows:


Sec.  80.3  Definitions.

    (a) Except as noted in this part, the definitions applicable to the 
funding program apply to implementation of this part. In addition, for 
purposes of this part:
    (b) Applicant means a State or Indian Tribal government applying to 
FEMA for a Federal award that will be accountable for the use of funds. 
Once funds have been awarded, the applicant becomes the recipient and 
may also be a pass-through entity.
    (c) Federal award means the Federal financial assistance that a 
recipient or subrecipient receives directly from FEMA or indirectly 
from a pass-through entity. The terms ``award'' and ``grant'' may also 
be used to describe a ``Federal award'' under this part.
    (d) Market Value means the price that the seller is willing to 
accept and a buyer is willing to pay on the open market and in an arm's 
length transaction.
    (e) National of the United States means a person within the meaning 
of the term as defined in the Immigration and Nationality Act, 8 U.S.C. 
1101(a)(22).
    (f) Pass-through entity means a recipient that provides a subaward 
to a subrecipient.
    (g) Purchase offer is the initial value assigned to the property, 
which is later

[[Page 50671]]

adjusted by applicable additions and deductions, resulting in a final 
offer amount to a property owner.
    (h) Qualified alien means a person within the meaning of the term 
as defined at 8 U.S.C. 1641.
    (i) Qualified conservation organization means a qualified 
organization with a conservation purpose pursuant to 26 CFR 1.170A-14 
and applicable implementing regulations, that is such an organization 
at the time it acquires the property interest and that was such an 
organization at the time of the major disaster declaration, or for at 
least 2 years prior to the opening of the grant application period.
    (j) Recipient means the State or Tribal government that receives a 
Federal award directly from FEMA. A recipient may also be a pass-
through entity. The term recipient does not include subrecipients.
    (k) Subapplicant means the entity that submits an application for 
FEMA mitigation assistance to the State or Indian Tribal applicant/
recipient. With respect to open space acquisition projects under the 
Hazard Mitigation Grant Program (HMGP), this term has the same meaning 
as given to the term ``applicant'' in part 206, subpart N of this 
chapter. Upon grant award, the subapplicant is referred to as the 
subrecipient.
    (l) Subaward means an award provided by a pass-through entity to a 
subrecipient, for the subrecipient to carry out part of a Federal award 
received by the pass-through entity.
    (m) Subrecipient means the State agency, community or Indian Tribal 
government or other legal entity to which a subaward is awarded and 
which is accountable to the recipient for the use of the funds 
provided.
    (n) Administrator means the head of the Federal Emergency 
Management Agency, or his/her designated representative.
    (o) Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative.


Sec.  80.5   [Amended]

0
7. Amend Sec.  80.5 by:
0
a. Removing the word ``grantee'' wherever it appears and adding in its 
place the word ``recipient''; and
0
b. Removing the word ``subgrantee'' wherever it appears and adding in 
its place the word ``subrecipient''.

0
8. Amend Sec.  80.9 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  80.9  Eligible and ineligible costs.

* * * * *
    (b) Pre-award costs. FEMA may fund eligible pre-award project costs 
at its discretion and as funds are available. Recipients and 
subrecipients may be reimbursed for eligible pre-award costs for 
activities directly related to the development of the project proposal. 
These costs can only be incurred during the open application period of 
the respective grant program. Costs associated with implementation of 
the project but incurred prior to grant award are not eligible. 
Therefore, activities where implementation is initiated or completed 
prior to award are not eligible and will not be reimbursed.
    (c) Duplication of benefits. Grant funds may not duplicate benefits 
received by or available to applicants, subapplicants and other project 
participants from insurance, other assistance programs, legal awards, 
or any other source to address the same purpose. Such individual or 
entity must notify the subapplicant and FEMA of all benefits that it 
receives, anticipates, or has available from other sources for the same 
purpose. FEMA will reduce the subaward by the amounts available for the 
same purpose from another source.
* * * * *

0
9. Amend Sec.  80.11 by revising paragraph (a) to read as follows:


Sec.  80.11  Project eligibility.

    (a) Voluntary participation. Eligible acquisition projects are 
those where the property owner participates voluntarily, and the 
recipient/subrecipient will not use its eminent domain authority to 
acquire the property for the open space purposes should negotiations 
fail.
* * * * *

0
10. Amend Sec.  80.13 by revising paragraph (a)(3) to read as follows:


Sec.  80.13  Application information.

    (a) * * *
    (3) The deed restriction language, which must be consistent with 
the FEMA model deed restriction that the local government will record 
with the property deeds. Any variation from the model deed restriction 
language can only be made with prior approval from FEMA's Office of 
Chief Counsel;
* * * * *

0
11. Revise Sec.  80.17 to read as follows:


Sec.  80.17  Project implementation.

    (a) Hazardous materials. The subrecipient must take steps to ensure 
it does not acquire or include in the project properties contaminated 
with hazardous materials by seeking information from property owners 
and from other sources on the use and presence of contaminants 
affecting the property from owners of properties that are or were 
industrial or commercial, or adjacent to such. A contaminated property 
must be certified clean prior to participation. This excludes permitted 
disposal of incidental demolition and household hazardous wastes. FEMA 
mitigation grant funds may not be used for clean up or remediation of 
contaminated properties.
    (b) Clear title. The subrecipient will obtain a title insurance 
policy demonstrating that fee title conveys to the subrecipient for 
each property to ensure that it acquires only a property with clear 
title. The property interest generally must transfer by a general 
warranty deed. Any incompatible easements or other encumbrances to the 
property must be extinguished before acquisition.
    (c) Purchase offer and supplemental payments. (1) The amount of 
purchase offer is the current market value of the property or the 
market value of the property immediately before the relevant event 
affecting the property (``pre-event'').
    (i) The relevant event for Robert T. Stafford Disaster Relief and 
Emergency Assistance Act assistance under HMGP is the major disaster 
under which funds are available; for assistance under the Pre-disaster 
Mitigation program (PDM) (42 U.S.C. 5133), it is the most recent major 
disaster. Where multiple disasters have affected the same property, the 
recipient and subrecipient will determine which is the relevant event.
    (ii) The relevant event for assistance under the National Flood 
Insurance Act is the most recent event resulting in a National Flood 
Insurance Program (NFIP) claim of at least $5,000.
    (2) The recipient should coordinate with the subrecipient in their 
determination of whether the valuation should be based on pre-event or 
current market value. Generally, the same method to determine market 
value should be used for all participants in the project.
    (3) A property owner who did not own the property at the time of 
the relevant event, or who is not a National of the United States or 
qualified alien, is not eligible for a purchase offer based on pre-
event market value of the property. Subrecipients who offer pre-event 
market value to the property owner must have already obtained 
certification during the application process that the property owner is 
either a National of the United States or a qualified alien.
    (4) Certain tenants who must relocate as a result of the project 
are entitled to relocation benefits under the Uniform Relocation 
Assistance and Real Property

[[Page 50672]]

Acquisition Act (such as moving expenses, replacement housing rental 
payments, and relocation assistance advisory services) in accordance 
with 49 CFR part 24.
    (5) If a purchase offer for a residential property is less than the 
cost of the homeowner-occupant to purchase a comparable replacement 
dwelling outside the hazard-prone area in the same community, 
subrecipients for mitigation grant programs may make such a payment 
available in accordance with criteria determined by the Administrator.
    (6) The subrecipient must inform each property owner, in writing, 
of what it considers to be the market value of the property, the method 
of valuation and basis for the purchase offer, and the final offer 
amount. The offer will also clearly state that the property owner's 
participation in the project is voluntary.
    (d) Removal of existing buildings. Existing incompatible facilities 
must be removed by demolition or by relocation outside of the hazard 
area within 90 days of settlement of the property transaction. The FEMA 
Regional Administrator may grant an exception to this deadline only for 
a particular property based upon written justification if extenuating 
circumstances exist, but will specify a final date for removal.
    (e) Deed Restriction. The subrecipient, upon settlement of the 
property transaction, must record with the deed of the subject property 
notice of applicable land use restrictions and related procedures 
described in this part, consistent with FEMA model deed restriction 
language.

0
12. Amend Sec.  80.19 by revising paragraphs (a) introductory text, 
(a)(3), and (b) through (e) to read as follows:


Sec.  80.19  Land use and oversight.

    * * * * *
    (a) Open space requirements. The property must be dedicated and 
maintained in perpetuity as open space for the conservation of natural 
floodplain functions.
* * * * *
    (3) Any improvements on the property must be in accordance with 
proper floodplain management policies and practices. Structures built 
on the property according to paragraph (a)(2) of this section must be 
floodproofed or elevated to at least the base flood level plus 1 foot 
of freeboard, or greater, if required by FEMA, or if required by any 
State or local ordinance, and in accordance with criteria established 
by the Administrator.
    * * * * *
    (b) Subsequent transfer. After acquiring the property interest, the 
subrecipient, including successors in interest, will convey any 
interest in the property only if the Regional Administrator, through 
the State, gives prior written approval of the transferee in accordance 
with this paragraph.
    (1) The request by the subrecipient, through the State, to the 
Regional Administrator must include a signed statement from the 
proposed transferee that it acknowledges and agrees to be bound by the 
terms of this section, and documentation of its status as a qualified 
conservation organization if applicable.
    (2) The subrecipient may convey a property interest only to a 
public entity or to a qualified conservation organization. However, the 
subrecipient may convey an easement or lease to a private individual or 
entity for purposes compatible with the uses described in paragraph (a) 
of this section, with the prior approval of the Regional Administrator, 
and so long as the conveyance does not include authority to control and 
enforce the terms and conditions of this section.
    (3) If title to the property is transferred to a public entity 
other than one with a conservation mission, it must be conveyed subject 
to a conservation easement that must be recorded with the deed and must 
incorporate all terms and conditions set forth in this section, 
including the easement holder's responsibility to enforce the easement. 
This must be accomplished by one of the following means:
    (i) The subrecipient will convey, in accordance with this paragraph 
(b), a conservation easement to an entity other than the title holder, 
which must be recorded with the deed, or
    (ii) At the time of title transfer, the subrecipient will retain 
such conservation easement, and record it with the deed.
    (4) Conveyance of any property interest must reference and 
incorporate the original deed restrictions providing notice of the 
conditions in this section and must incorporate a provision for the 
property interest to revert to the subrecipient or recipient in the 
event that the transferee ceases to exist or loses its eligible status 
under this section.
    (c) Inspection. FEMA, its representatives and assigns, including 
the recipient will have the right to enter upon the property, at 
reasonable times and with reasonable notice, for the purpose of 
inspecting the property to ensure compliance with the terms of this 
part, the property conveyance and of the grant award.
    (d) Monitoring and reporting. Every 3 years the subrecipient (in 
coordination with any current successor in interest) through the 
recipient, must submit to the FEMA Regional Administrator a report 
certifying that the subrecipient has inspected the property within the 
month preceding the report, and that the property continues to be 
maintained consistent with the provisions of this part, the property 
conveyance and the grant award.
    (e) Enforcement. The subrecipient, recipient, FEMA, and their 
respective representatives, successors and assigns, are responsible for 
taking measures to bring the property back into compliance if the 
property is not maintained according to the terms of this part, the 
conveyance, and the grant award. The relative rights and 
responsibilities of FEMA, the recipient, the subrecipient, and 
subsequent holders of the property interest at the time of enforcement, 
include the following:
    (1) The recipient will notify the subrecipient and any current 
holder of the property interest in writing and advise them that they 
have 60 days to correct the violation. If the subrecipient or any 
current holder of the property interest fails to demonstrate a good 
faith effort to come into compliance with the terms of the grant within 
the 60-day period, the recipient will enforce the terms of the grant by 
taking any measures it deems appropriate, including but not limited to 
bringing an action at law or in equity in a court of competent 
jurisdiction.
    (2) FEMA, its representatives, and assignees may enforce the terms 
of the grant by taking any measures it deems appropriate, including but 
not limited to 1 or more of the following:
    (i) Withholding FEMA mitigation awards or assistance from the State 
and subrecipient; and current holder of the property interest.
    (ii) Requiring transfer of title. The subrecipient or the current 
holder of the property interest will bear the costs of bringing the 
property back into compliance with the terms of the grant; or
    (iii) Bringing an action at law or in equity in a court of 
competent jurisdiction against any or all of the following parties: The 
recipient, the subrecipient, and their respective successors.

0
13. Amend Sec.  80.21 by revising the introductory text and paragraph 
(d) to read as follows:

[[Page 50673]]

Sec.  80.21  Closeout requirements.

    Upon closeout of the grant, the subrecipient, through the 
recipient, must provide FEMA, with the following:
* * * * *
    (d) Identification of each property as a repetitive loss structure, 
if applicable; and
* * * * *

PART 201--MITIGATION PLANNING

0
14. Revise the authority citation for part 201 to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act 
of 2002, 6 U.S.C. 101; National Flood Insurance Act of 1968, 42 
U.S.C. 4104c.


0
15. Amend Sec.  201.1 by revising paragraph (a) to read as follows:


Sec.  201.1  Purpose.

    (a) The purpose of this part is to provide information on the 
policies and procedures for mitigation planning as required by the 
provisions of section 322 of the Stafford Act, 42 U.S.C. 5165, and 
section 1366 of the National Flood Insurance Act of 1968, 42 U.S.C. 
4104c.
* * * * *

0
16. Revise Sec.  201.2 to read as follows:


Sec.  201.2  Definitions.

    Administrator means the head of the Federal Emergency Management 
Agency, or his/her designated representative.
    Applicant means the entity applying to FEMA for a Federal award 
that will be accountable for the use of funds.
    Federal award means the Federal financial assistance that a 
recipient or subrecipient receives directly from FEMA or indirectly 
from a pass-through entity. The term ``grant'' or ``award'' may also be 
used to describe a Federal award under this part.
    Flood Mitigation Assistance (FMA) means the program authorized by 
section 1366 of the National Flood Insurance Act of 1968, as amended, 
42 U.S.C. 4104c, and implemented at part 77.
    Hazard mitigation means any sustained action taken to reduce or 
eliminate the long-term risk to human life and property from hazards.
    Hazard Mitigation Grant Program (HMGP) means the program authorized 
under section 404 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5170c, and implemented at part 206, 
subpart N of this chapter.
    Indian Tribal government means any Federally recognized governing 
body of an Indian or Alaska Native Tribe, band, nation, pueblo, 
village, or community that the Secretary of Interior acknowledges to 
exist as an Indian Tribe under the Federally Recognized Indian Tribe 
List Act of 1994, 25 U.S.C. 5131. This does not include Alaska Native 
corporations, the ownership of which is vested in private individuals.
    Local government is any county, municipality, city, town, township, 
public authority, school district, special district, intrastate 
district, council of governments (regardless of whether the council of 
governments is incorporated as a nonprofit corporation under State 
law), regional or interstate government entity, or agency or 
instrumentality of a local government; any Indian Tribe or authorized 
Tribal organization, or Alaska Native village or organization; and any 
rural community, unincorporated town or village, or other public 
entity.
    Managing State means a State to which FEMA has delegated the 
authority to administer and manage the HMGP under the criteria 
established by FEMA pursuant to 42 U.S.C. 5170c(c). FEMA may also 
delegate authority to Tribal governments to administer and manage the 
HMGP as a Managing State.
    Pass-through entity means a recipient that provides a subaward to a 
subrecipient to carry out part of a Federal program.
    Pre-Disaster Mitigation Program (PDM) means the program authorized 
under section 203 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5133.
    Regional Administrator means the head of a Federal Emergency 
Management Agency regional office, or his/her designated 
representative.
    Recipient means the government that receives a Federal award 
directly from FEMA. A recipient may also be a pass-through entity. The 
term recipient does not include subrecipients. The recipient is the 
entire legal entity even if only a particular component of the entity 
is designated in the grant award document. Generally, the State is the 
recipient. However, an Indian Tribal government may choose to be a 
recipient, or may act as a subrecipient under the State. An Indian 
Tribal government acting as recipient will assume the responsibilities 
of a ``State'', as described in this part, for the purposes of 
administering the grant.
    Repetitive loss structure means a structure as defined at Sec.  
77.2 of this chapter.
    Severe repetitive loss structure is a structure as defined at Sec.  
77.2 of this chapter.
    Small and impoverished communities means a community of 3,000 or 
fewer individuals that is identified by the State as a rural community, 
and is not a remote area within the corporate boundaries of a larger 
city; is economically disadvantaged, by having an average per capita 
annual income of residents not exceeding 80 percent of national, per 
capita income, based on best available data; the local unemployment 
rate exceeds by one percentage point or more, the most recently 
reported, average yearly national unemployment rate; and any other 
factors identified in the State Plan in which the community is located.
    The Stafford Act refers to the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act, Public Law 93-288, as amended (42 U.S.C. 
5121-5207).
    State is any State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, 
American Samoa, and the Commonwealth of the Northern Mariana Islands.
    State Hazard Mitigation Officer is the official representative of 
State government who is the primary point of contact with FEMA, other 
Federal agencies, and local governments in mitigation planning and 
implementation of mitigation programs and activities required under the 
Stafford Act.
    Subapplicant means an entity submitting a subapplication to the 
applicant for a subaward to carry out part of a Federal award.
    Subaward means an award provided by a pass-through entity to a 
subrecipient for the subrecipient to carry out part of a Federal award.
    Subrecipient means the entity that receives a subaward from a pass-
through entity. Depending on the program, subrecipients of hazard 
mitigation assistance subawards can be a State agency, local 
government, private nonprofit organization, or Indian Tribal 
government. Subrecipients of FMA subawards can be a State agency, 
community, or Indian Tribal government, as described in 44 CFR part 77. 
Indian Tribal governments acting as a subrecipient are accountable to 
the State recipient.

0
17. Amend Sec.  201.3 by revising paragraphs (a), (b)(2), (c)(1), and 
(e)(1) to read as follows:


Sec.  201.3  Responsibilities.

    (a) General. This section identifies the key responsibilities of 
FEMA, States, and local/Tribal governments in carrying out section 322 
of the Stafford Act, 42 U.S.C. 5165.

[[Page 50674]]

    (b) * * *
    (2) Provide technical assistance and training to State, local, and 
Indian Tribal governments regarding the mitigation planning process;
* * * * *
    (c) * * *
    (1) Prepare and submit to FEMA a Standard State Mitigation Plan 
following the criteria established in Sec.  201.4 as a condition of 
receiving non-emergency Stafford Act assistance and FEMA mitigation 
grants. In accordance with Sec.  77.6(b) of this chapter, applicants 
and subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
* * * * *
    (e) * * *
    (1) Prepare and submit to FEMA a Tribal Mitigation Plan following 
the criteria established in Sec.  201.7 as a condition of receiving 
non-emergency Stafford Act assistance and FEMA mitigation grants as a 
recipient. This plan will also allow Indian Tribal governments to apply 
through the State, as a subrecipient, for any FEMA mitigation project 
grant. In accordance with Sec.  77.6(b) of this chapter, applicants and 
subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
* * * * *

0
18. Amend Sec.  201.4 by revising paragraphs (c)(2) through (4) to read 
as follows:


Sec.  201.4   Standard State Mitigation Plans.

* * * * *
    (c) * * *
    (2) Statewide risk assessments that provide the factual basis for 
activities proposed in the strategy portion of the mitigation plan. 
Statewide risk assessments must characterize and analyze natural 
hazards and risks to provide a statewide overview. This overview will 
allow the State to compare potential losses throughout the State and to 
determine their priorities for implementing mitigation measures under 
the strategy, and to prioritize jurisdictions for receiving technical 
and financial support in developing more detailed local risk and 
vulnerability assessments. The risk assessment must include the 
following:
    (i) An overview of the type and location of all natural hazards 
that can affect the State, including information on previous 
occurrences of hazard events, as well as the probability of future 
hazard events, using maps where appropriate;
    (ii) An overview and analysis of the State's vulnerability to the 
hazards described in this paragraph (c)(2), based on estimates provided 
in local risk assessments as well as the State risk assessment. The 
State must describe vulnerability in terms of the jurisdictions most 
threatened by the identified hazards, and most vulnerable to damage and 
loss associated with hazard events. State owned or operated critical 
facilities located in the identified hazard areas must also be 
addressed;
    (iii) An overview and analysis of potential losses to the 
identified vulnerable structures, based on estimates provided in local 
risk assessments as well as the State risk assessment. The State must 
estimate the potential dollar losses to State owned or operated 
buildings, infrastructure, and critical facilities located in the 
identified hazard areas.
    (3) A Mitigation Strategy that provides the State's blueprint for 
reducing the losses identified in the risk assessment. This section 
must include:
    (i) A description of State goals to guide the selection of 
activities to mitigate and reduce potential losses.
    (ii) A discussion of the State's pre- and post-disaster hazard 
management policies, programs, and capabilities to mitigate the hazards 
in the area, including: An evaluation of State laws, regulations, 
policies, and programs related to hazard mitigation as well as to 
development in hazard-prone areas; a discussion of State funding 
capabilities for hazard mitigation projects; and a general description 
and analysis of the effectiveness of local mitigation policies, 
programs, and capabilities.
    (iii) An identification, evaluation, and prioritization of cost-
effective, environmentally sound, and technically feasible mitigation 
actions and activities the State is considering and an explanation of 
how each activity contributes to the overall mitigation strategy. This 
section should be linked to local plans, where specific local actions 
and projects are identified.
    (iv) Identification of current and potential sources of Federal, 
State, local, or private funding to implement mitigation activities.
    (v) In accordance with Sec.  77.6(b) of this chapter, applicants 
and subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
    (4) A section on the Coordination of Local Mitigation Planning that 
includes the following:
    (i) A description of the State process to support, through funding 
and technical assistance, the development of local mitigation plans.
    (ii) A description of the State process and timeframe by which the 
local plans will be reviewed, coordinated, and linked to the State 
Mitigation Plan.
    (iii) Criteria for prioritizing communities and local jurisdictions 
that would receive planning and project grants under available funding 
programs, which should include consideration for communities with the 
highest risks, repetitive loss structures, and most intense development 
pressures. Further, that for non-planning grants, a principal criterion 
for prioritizing grants will be the extent to which benefits are 
maximized according to a cost benefit review of proposed projects and 
their associated costs.
* * * * *

0
19. Amend Sec.  201.6 by revising paragraphs (a) through (c) to read as 
follows:


Sec.  201.6  Local Mitigation Plans.

* * * * *
    (a) Plan requirements. (1) A local government must have a 
mitigation plan approved pursuant to this section in order to receive 
HMGP project grants. A local government must have a mitigation plan 
approved pursuant to this section in order to apply for and receive 
mitigation project grants under all other mitigation grant programs.
    (2) Plans prepared for the FMA program, described at part 77 of 
this chapter, need only address these requirements as they relate to 
flood hazards in order to be eligible for FMA project grants. However, 
these plans must be clearly identified as being flood mitigation plans, 
and they will not meet the eligibility criteria for other mitigation 
grant programs, unless flooding is the only natural hazard the 
jurisdiction faces.
    (3) Regional Administrators may grant an exception to the plan 
requirement in extraordinary circumstances, such as in a small and 
impoverished community, when justification is provided. In these cases, 
a plan will be completed within 12 months of the award of the project 
grant. If a plan is not provided within this timeframe, the project 
grant will be terminated, and any costs incurred after notice of 
grant's termination will not be reimbursed by FEMA.
    (4) Multi-jurisdictional plans (e.g., watershed plans) may be 
accepted, as appropriate, as long as each jurisdiction

[[Page 50675]]

has participated in the process and has officially adopted the plan. 
State-wide plans will not be accepted as multi-jurisdictional plans.
    (b) Planning process. An open public involvement process is 
essential to the development of an effective plan. In order to develop 
a more comprehensive approach to reducing the effects of natural 
disasters, the planning process must include:
    (1) An opportunity for the public to comment on the plan during the 
drafting stage and prior to plan approval;
    (2) An opportunity for neighboring communities, local and regional 
agencies involved in hazard mitigation activities, and agencies that 
have the authority to regulate development, as well as businesses, 
academia and other private and nonprofit interests to be involved in 
the planning process; and
    (3) Review and incorporation, if appropriate, of existing plans, 
studies, reports, and technical information.
    (c) Plan content. The plan must include the following:
    (1) Documentation of the planning process used to develop the plan, 
including how it was prepared, who was involved in the process, and how 
the public was involved.
    (2) A risk assessment that provides the factual basis for 
activities proposed in the strategy to reduce losses from identified 
hazards. Local risk assessments must provide sufficient information to 
enable the jurisdiction to identify and prioritize appropriate 
mitigation actions to reduce losses from identified hazards. The risk 
assessment must include:
    (i) A description of the type, location, and extent of all natural 
hazards that can affect the jurisdiction. The plan must include 
information on previous occurrences of hazard events and on the 
probability of future hazard events.
    (ii) A description of the jurisdiction's vulnerability to the 
hazards described in paragraph (c)(2)(i) of this section. This 
description must include an overall summary of each hazard and its 
impact on the community. All plans approved after October 1, 2008 must 
also address NFIP insured structures that have been repetitively 
damaged by floods. The plan should describe vulnerability in terms of:
    (A) The types and numbers of existing and future buildings, 
infrastructure, and critical facilities located in the identified 
hazard areas;
    (B) An estimate of the potential dollar losses to vulnerable 
structures identified in paragraph (c)(2)(ii)(A) of this section and a 
description of the methodology used to prepare the estimate;
    (C) Providing a general description of land uses and development 
trends within the community so that mitigation options can be 
considered in future land use decisions.
    (iii) For multi-jurisdictional plans, the risk assessment section 
must assess each jurisdiction's risks where they vary from the risks 
facing the entire planning area.
    (3) A mitigation strategy that provides the jurisdiction's 
blueprint for reducing the potential losses identified in the risk 
assessment, based on existing authorities, policies, programs and 
resources, and its ability to expand on and improve these existing 
tools. This section must include:
    (i) A description of mitigation goals to reduce or avoid long-term 
vulnerabilities to the identified hazards.
    (ii) A section that identifies and analyzes a comprehensive range 
of specific mitigation actions and projects being considered to reduce 
the effects of each hazard, with particular emphasis on new and 
existing buildings and infrastructure. All plans approved by FEMA after 
October 1, 2008, must also address the jurisdiction's participation in 
the NFIP, and continued compliance with NFIP requirements, as 
appropriate.
    (iii) An action plan describing how the actions identified in 
paragraph (c)(3)(ii) of this section will be prioritized, implemented, 
and administered by the local jurisdiction. Prioritization will include 
a special emphasis on the extent to which benefits are maximized 
according to a cost benefit review of the proposed projects and their 
associated costs.
    (iv) For multi-jurisdictional plans, there must be identifiable 
action items specific to the jurisdiction requesting FEMA approval or 
credit of the plan.
    (4) A plan maintenance process that includes:
    (i) A section describing the method and schedule of monitoring, 
evaluating, and updating the mitigation plan within a five-year cycle.
    (ii) A process by which local governments incorporate the 
requirements of the mitigation plan into other planning mechanisms such 
as comprehensive or capital improvement plans, when appropriate.
    (iii) Discussion on how the community will continue public 
participation in the plan maintenance process.
    (5) Documentation that the plan has been formally adopted by the 
governing body of the jurisdiction requesting approval of the plan 
(e.g., City Council, County Commissioner, Tribal Council). For multi-
jurisdictional plans, each jurisdiction requesting approval of the plan 
must document that it has been formally adopted.
* * * * *

0
20. Amend Sec.  201.7 by revising paragraphs (a), (c), and (d) to read 
as follows:


Sec.  201.7  Tribal Mitigation Plans.

* * * * *
    (a) Plan requirement. (1) Indian Tribal governments applying to 
FEMA as a recipient must have an approved Tribal Mitigation Plan 
meeting the requirements of this section as a condition of receiving 
non-emergency Stafford Act assistance and FEMA mitigation grants. 
Emergency assistance provided under 42 U.S.C. 5170a, 5170b, 5173, 5174, 
5177, 5179, 5180, 5182, 5183, 5184, 5192 will not be affected. 
Mitigation planning grants provided through the PDM program, authorized 
under section 203 of the Stafford Act, 42 U.S.C. 5133, will also 
continue to be available.
    (2) Indian Tribal governments applying through the State as a 
subrecipient must have an approved Tribal Mitigation Plan meeting the 
requirements of this section in order to receive HMGP project grants. A 
Tribe must have an approved Tribal Mitigation Plan in order to apply 
for and receive FEMA mitigation project grants, under all other 
mitigation grant programs. The provisions in Sec.  201.6(a)(3) are 
available to Tribes applying as subrecipients.
    (3) Multi-jurisdictional plans (e.g., county-wide or watershed 
plans) may be accepted, as appropriate, as long as the Indian Tribal 
government has participated in the process and has officially adopted 
the plan. Indian Tribal governments must address all the elements 
identified in this section to ensure eligibility as a recipient or as a 
subrecipient.
* * * * *
    (c) Plan content. The plan must include the following:
    (1) Documentation of the planning process used to develop the plan, 
including how it was prepared, who was involved in the process, and how 
the public was involved. This must include:
    (i) An opportunity for the public to comment on the plan during the 
drafting stage and prior to plan approval, including a description of 
how the Indian Tribal government defined ``public;''
    (ii) As appropriate, an opportunity for neighboring communities, 
Tribal and regional agencies involved in hazard mitigation activities, 
and agencies that have the authority to regulate

[[Page 50676]]

development, as well as businesses, academia, and other private and 
nonprofit interests to be involved in the planning process;
    (iii) Review and incorporation, if appropriate, of existing plans, 
studies, and reports; and
    (iv) Be integrated to the extent possible with other ongoing Tribal 
planning efforts as well as other FEMA programs and initiatives.
    (2) A risk assessment that provides the factual basis for 
activities proposed in the strategy to reduce losses from identified 
hazards. Tribal risk assessments must provide sufficient information to 
enable the Indian Tribal government to identify and prioritize 
appropriate mitigation actions to reduce losses from identified 
hazards. The risk assessment must include:
    (i) A description of the type, location, and extent of all natural 
hazards that can affect the Tribal planning area. The plan must include 
information on previous occurrences of hazard events and on the 
probability of future hazard events.
    (ii) A description of the Indian Tribal government's vulnerability 
to the hazards described in paragraph (c)(2)(i) of this section. This 
description must include an overall summary of each hazard and its 
impact on the Tribe. The plan should describe vulnerability in terms 
of:
    (A) The types and numbers of existing and future buildings, 
infrastructure, and critical facilities located in the identified 
hazard areas;
    (B) An estimate of the potential dollar losses to vulnerable 
structures identified in paragraph (c)(2)(ii)(A) of this section and a 
description of the methodology used to prepare the estimate;
    (C) A general description of land uses and development trends 
within the Tribal planning area so that mitigation options can be 
considered in future land use decisions; and
    (D) Cultural and sacred sites that are significant, even if they 
cannot be valued in monetary terms.
    (3) A mitigation strategy that provides the Indian Tribal 
government's blueprint for reducing the potential losses identified in 
the risk assessment, based on existing authorities, policies, programs 
and resources, and its ability to expand on and improve these existing 
tools. This section must include:
    (i) A description of mitigation goals to reduce or avoid long-term 
vulnerabilities to the identified hazards.
    (ii) A section that identifies and analyzes a comprehensive range 
of specific mitigation actions and projects being considered to reduce 
the effects of each hazard, with particular emphasis on new and 
existing buildings and infrastructure.
    (iii) An action plan describing how the actions identified in 
paragraph (c)(3)(ii) of this section will be prioritized, implemented, 
and administered by the Indian Tribal government.
    (iv) A discussion of the Indian Tribal government's pre- and post-
disaster hazard management policies, programs, and capabilities to 
mitigate the hazards in the area, including: An evaluation of Tribal 
laws, regulations, policies, and programs related to hazard mitigation 
as well as to development in hazard-prone areas; and a discussion of 
Tribal funding capabilities for hazard mitigation projects.
    (v) Identification of current and potential sources of Federal, 
Tribal, or private funding to implement mitigation activities.
    (vi) In accordance with Sec.  77.6(b) of this chapter, applicants 
and subapplicants for FMA project grants must have a FEMA-approved 
mitigation plan that addresses identified flood hazards and provides 
for reduction of flood losses to structures for which NFIP coverage is 
available.
    (4) A plan maintenance process that includes:
    (i) A section describing the method and schedule of monitoring, 
evaluating, and updating the mitigation plan.
    (ii) A system for monitoring implementation of mitigation measures 
and project closeouts.
    (iii) A process by which the Indian Tribal government incorporates 
the requirements of the mitigation plan into other planning mechanisms 
such as reservation master plans or capital improvement plans, when 
appropriate.
    (iv) Discussion on how the Indian Tribal government will continue 
public participation in the plan maintenance process.
    (v) A system for reviewing progress on achieving goals as well as 
activities and projects identified in the mitigation strategy.
    (5) The plan must be formally adopted by the governing body of the 
Indian Tribal government prior to submittal to FEMA for final review 
and approval.
    (6) The plan must include assurances that the Indian Tribal 
government will comply with all applicable Federal statutes and 
regulations in effect with respect to the periods for which it receives 
grant funding, including 2 CFR parts 200 and 3002. The Indian Tribal 
government will amend its plan whenever necessary to reflect changes in 
Tribal or Federal laws and statutes.
    (d) Plan review and updates. (1) Plans must be submitted to the 
appropriate FEMA Regional Office for formal review and approval. Indian 
Tribal governments who would like the option of being a subrecipient 
under the State must also submit their plan to the State Hazard 
Mitigation Officer for review and coordination.
    (2) The Regional review will be completed within 45 days after 
receipt from the Indian Tribal government, whenever possible.
    (3) Indian Tribal governments must review and revise their plan to 
reflect changes in development, progress in local mitigation efforts, 
and changes in priorities, and resubmit it for approval within 5 years 
in order to continue to be eligible for non-emergency Stafford Act 
assistance and FEMA mitigation grant funding.

PART 206--FEDERAL DISASTER ASSISTANCE

0
21. The authority citation for part 206 is revised to read as follows:

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act 
of 2002, 6 U.S.C. 101 et seq.; Department of Homeland Security 
Delegation 9001.1; sec. 1105, Pub. L. 113-2, 127 Stat. 43 (42 U.S.C. 
5189a note).


0
22. Revise Sec.  206.431 to read as follows:


Sec.  206.431  Definitions.

    Activity means any mitigation measure, project, or action proposed 
to reduce risk of future damage, hardship, loss or suffering from 
disasters.
    Applicant means the non-Federal entity consisting of a State or 
Indian Tribal government, applying to FEMA for a Federal award under 
the Hazard Mitigation Grant Program. Upon award, the applicant becomes 
the recipient and may also be a pass-through entity.
    Enhanced State Mitigation Plan is the hazard mitigation plan 
approved under 44 CFR part 201 as a condition of receiving increased 
funding under the HMGP.
    Grant application means the request to FEMA for HMGP funding, as 
outlined in Sec.  206.436, by a State or Tribal government that will 
act as recipient.
    Grant award means total of Federal and non-Federal contributions to 
complete the approved scope of work.
    Indian Tribal government means any Federally recognized governing 
body of an Indian or Alaska Native Tribe, band, nation, pueblo, 
village, or community that the Secretary of Interior acknowledges to 
exist as an Indian Tribe under the Federally Recognized Indian Tribe 
List Act of 1994, 25 U.S.C. 5131. This does not include Alaska Native

[[Page 50677]]

corporations, the ownership of which is vested in private individuals. 
Indian Tribal governments have the option to apply as an applicant or 
subapplicant.
    Local Mitigation Plan is the hazard mitigation plan required of a 
local government acting as a subrecipient as a condition of receiving a 
project subaward under the HMGP as outlined in 44 CFR 201.6.
    Pass-through entity means a recipient that provides a subaward to a 
subrecipient.
    Recipient means the State or Indian Tribal government that receives 
a Federal award directly from FEMA. A recipient may also be a pass-
through entity. The term recipient does not include subrecipients. The 
recipient is the entire legal entity even if only a particular 
component of the entity is designated in the grant award document. 
Generally, the State is the recipient. However, an Indian Tribal 
government may choose to be a recipient, or may act as a subrecipient 
under the State. An Indian Tribal government acting as recipient will 
assume the responsibilities of a ``State'', as described in this part, 
for the purposes of administering the grant.
    Standard State Mitigation Plan is the hazard mitigation plan 
approved under 44 CFR part 201, as a condition of receiving Stafford 
Act assistance as outlined in Sec.  201.4 of this chapter.
    State Administrative Plan for the Hazard Mitigation Grant Program 
means the plan developed by the State to describe the procedures for 
administration of the HMGP.
    Subapplicant means the State agency, local government, eligible 
private nonprofit organization, or Indian Tribal government submitting 
a subapplication to the applicant for financial assistance under HMGP. 
Upon award, the subapplicant becomes the subrecipient.
    Subaward means an award provided by a pass-through entity to a 
subrecipient for the subrecipient to carry out part of a Federal award.
    Subaward application means the request to the recipient for HMGP 
funding by the eligible subrecipient, as outlined in Sec.  206.436.
    Subrecipient means the government or other legal entity to which a 
subaward is awarded and which is accountable to the recipient for the 
use of the funds provided. Subrecipients can be a State agency, local 
government, private nonprofit organization, or Indian Tribal government 
as outlined in Sec.  206.433. Indian Tribal governments acting as a 
subrecipient are accountable to the State recipient.
    Tribal Mitigation Plan is the hazard mitigation plan required of an 
Indian Tribal government acting as a recipient or subrecipient as a 
condition of receiving a project award or subaward under the HMGP as 
outlined in 44 CFR 201.7.

0
23. Amend Sec.  206.432 by revising paragraphs (b) introductory text, 
(b)(2) and (3), and (c) to read as follows:


Sec.  206.432  Federal grant assistance.

* * * * *
    (b) Amounts of assistance. The total Federal contribution of funds 
is based on the estimated aggregate grant amount to be made under the 
Stafford Act for the major disaster (less associated administrative 
costs), and must be as follows:
* * * * *
    (2) Twenty (20) percent. A State with an approved Enhanced State 
Mitigation Plan, in effect before the disaster declaration, which meets 
the requirements outlined in Sec.  201.5 of this subchapter will be 
eligible for assistance under the HMGP not to exceed 20 percent of such 
amounts, for amounts not more than $35.333 billion.
    (3) The estimates of Federal assistance under this paragraph (b) 
will be based on the Regional Administrator's estimate of all eligible 
costs, actual grants, and appropriate mission assignments.
    (c) Cost sharing. All mitigation measures approved under the 
State's grant will be subject to the cost sharing provisions 
established in the FEMA-State Agreement. FEMA may contribute up to 75 
percent of the cost of measures approved for funding under the Hazard 
Mitigation Grant Program for major disasters declared on or after June 
10, 1993. The non-Federal share may exceed the Federal share. FEMA will 
not contribute to costs above the Federally approved estimate.

0
24. Amend Sec.  206.433 by revising paragraph (a) to read as follows:


Sec.  206.433  State responsibilities.

    (a) Recipient. The State will be the recipient to which funds are 
awarded and will be accountable for the use of those funds. There may 
be subrecipients within the State government.
* * * * *

0
25. Amend Sec.  206.434 by revising paragraphs (a), (b), (c)(1) and 
(5), (d)(1), and (e) to read as follows:


Sec.  206.434  Eligibility.

    (a) Eligible entities. The following are eligible to apply for the 
Hazard Mitigation Program Grant:
    (1) Applicants--States and Indian Tribal governments;
    (2) Subapplicants--(i) State agencies and local governments;
    (ii) Private nonprofit organizations that own or operate a private 
nonprofit facility as defined in Sec.  206.221(e). A qualified 
conservation organization as defined at Sec.  80.3(h) of this chapter 
is the only private nonprofit organization eligible to apply for 
acquisition or relocation for open space projects;
    (iii) Indian Tribal governments.
    (b) Plan requirement. (1) Local and Indian Tribal government 
applicants for project subawards must have an approved local or Tribal 
Mitigation Plan in accordance with 44 CFR part 201 before receipt of 
HMGP subaward funding for projects.
    (2) Regional Administrators may grant an exception to this 
requirement in extraordinary circumstances, such as in a small and 
impoverished community when justification is provided. In these cases, 
a plan will be completed within 12 months of the award of the project 
subaward. If a plan is not provided within this timeframe, the project 
subaward will be terminated, and any costs incurred after notice of 
subaward's termination will not be reimbursed by FEMA.
    (c) * * *
    (1) Be in conformance with the State Mitigation Plan and Local or 
Tribal Mitigation Plan approved under 44 CFR part 201; or for Indian 
Tribal governments acting as recipients, be in conformance with the 
Tribal Mitigation Plan approved under 44 CFR 201.7;
* * * * *
    (5) Be cost-effective and substantially reduce the risk of future 
damage, hardship, loss, or suffering resulting from a major disaster. 
The recipient must demonstrate this by documenting that the project;
    (i) Addresses a problem that has been repetitive, or a problem that 
poses a significant risk to public health and safety if left unsolved,
    (ii) Will not cost more than the anticipated value of the reduction 
in both direct damages and subsequent negative impacts to the area if 
future disasters were to occur,
    (iii) Has been determined to be the most practical, effective, and 
environmentally sound alternative after consideration of a range of 
options,
    (iv) Contributes, to the extent practicable, to a long-term 
solution to the problem it is intended to address,
    (v) Considers long-term changes to the areas and entities it 
protects, and has manageable future maintenance and modification 
requirements.
    (d) * * * (1) Planning. Up to 7% of the State's HMGP award may be 
used to develop State, Tribal and/or local

[[Page 50678]]

mitigation plans to meet the planning criteria outlined in 44 CFR part 
201.
* * * * *
    (e) Property acquisitions and relocation requirements. Property 
acquisitions and relocation projects for open space proposed for 
funding pursuant to a major disaster declared on or after December 3, 
2007 must be implemented in accordance with part 80 of this chapter.
* * * * *


Sec.  206.435  [Amended]

0
26. Amend Sec.  206.435 by removing the word ``shall'' and adding in 
its place the word ``will'' in the last sentence of paragraph (a).

0
27. Amend Sec.  206.436 by revising paragraphs (a), (b), (c) 
introductory text, (c)(1), (e), and (g) to read as follows:


Sec.  206.436  Application procedures.

    (a) General. This section describes the procedures to be used by 
the recipient in submitting an application for HMGP funding. Under the 
HMGP, the State or Indian Tribal government is the recipient and is 
responsible for processing subawards to applicants in accordance with 2 
CFR parts 200 and 3002. Subrecipients are accountable to the recipient.
    (b) Governor's Authorized Representative. The Governor's Authorized 
Representative serves as the grant administrator for all funds provided 
under the Hazard Mitigation Grant Program. The Governor's Authorized 
Representative's responsibilities as they pertain to procedures 
outlined in this section include providing technical advice and 
assistance to eligible subrecipients, and ensuring that all potential 
applicants are aware of assistance available and submission of those 
documents necessary for grant award.
    (c) Hazard mitigation application. Upon identification of 
mitigation measures, the State (Governor's Authorized Representative) 
will submit its Hazard Mitigation Grant Program application to the FEMA 
Regional Administrator. The application will identify one or more 
mitigation measures for which funding is requested. The application 
must include a Standard Form (SF) 424, Application for Federal 
Assistance, SF 424D, Assurances for Construction Programs, if 
appropriate, and a narrative statement. The narrative statement will 
contain any pertinent project management information not included in 
the State's administrative plan for Hazard Mitigation. The narrative 
statement will also serve to identify the specific mitigation measures 
for which funding is requested. Information required for each 
mitigation measure must include the following:
    (1) Name of the subrecipient, if any;
* * * * *
    (e) Extensions. The State may request the Regional Administrator to 
extend the application time limit by 30 to 90 day increments, not to 
exceed a total of 180 days. The recipient must include a justification 
in its request.
* * * * *
    (g) Indian Tribal recipients. Indian Tribal governments may submit 
a SF 424 directly to the Regional Administrator.

0
28. Amend Sec.  206.437 by revising paragraphs (a), (b)(4)(i), (x), and 
(xiii), and (d) to read as follows:


Sec.  206.437  State administrative plan.

    (a) General. The State must develop a plan for the administration 
of the Hazard Mitigation Grant Program.
    (b) * * *
    (4) * * *
    (i) Identify and notify potential applicants (subrecipients) of the 
availability of the program;
* * * * *
    (x) Provide technical assistance as required to subrecipient(s);
* * * * *
    (xiii) Determine the percentage or amount of pass-through funds for 
management costs provided under 44 CFR part 207 that the recipient will 
make available to subrecipients, and the basis, criteria, or formula 
for determining the subrecipient percentage or amount.
* * * * *
    (d) Approval. The State must submit the administrative plan to the 
Regional Administrator for approval. Following each major disaster 
declaration, the State must prepare any updates, amendments, or plan 
revisions required to meet current policy guidance or changes in the 
administration of the Hazard Mitigation Grant Program. Funds will not 
be awarded until the State Administrative Plan is approved by the FEMA 
Regional Administrator.

0
29. Revise Sec.  206.438 to read as follows:


Sec.  206.438  Project management.

    (a) General. The State serving as recipient has primary 
responsibility for project management and accountability of funds as 
indicated in 2 CFR parts 200 and 3002 and 44 CFR part 206. The State is 
responsible for ensuring that subrecipients meet all program and 
administrative requirements.
    (b) Cost overruns. During the execution of work on an approved 
mitigation measure the Governor's Authorized Representative may find 
that actual project costs are exceeding the approved estimates. Cost 
overruns which can be met without additional Federal funds, or which 
can be met by offsetting cost underruns on other projects, need not be 
submitted to the Regional Administrator for approval, so long as the 
full scope of work on all affected projects can still be met. For cost 
overruns which exceed Federal obligated funds and which require 
additional Federal funds, the Governor's Authorized Representative will 
evaluate each cost overrun and submit a request with a recommendation 
to the Regional Administrator for a determination. The applicant's 
justification for additional costs and other pertinent material must 
accompany the request. The Regional Administrator will notify the 
Governor's Authorized Representative in writing of the determination 
and process a supplement, if necessary. All requests that are not 
justified must be denied by the Governor's Authorized Representative. 
In no case will the total amount obligated to the State exceed the 
funding limits set forth in Sec.  206.432(b). Any such problems or 
circumstances affecting project costs must be identified through the 
quarterly progress reports required in paragraph (c) of this section.
    (c) Progress reports. The recipient must submit a quarterly 
progress report to FEMA indicating the status and completion date for 
each measure funded. Any problems or circumstances affecting completion 
dates, scope of work, or project costs which are expected to result in 
noncompliance with the approved grant conditions must be described in 
the report.
    (d) Payment of claims. The Governor's Authorized Representative 
will make a claim to the Regional Administrator for reimbursement of 
allowable costs for each approved measure. In submitting such claims 
the Governor's Authorized Representative must certify that reported 
costs were incurred in the performance of eligible work, that the 
approved work was completed and that the mitigation measure is in 
compliance with the provisions of the FEMA-State Agreement. The 
Regional Administrator will determine the eligible amount of 
reimbursement for each claim and approve payment. If a mitigation 
measure is not completed, and there is not adequate justification for 
noncompletion, no Federal funding will be provided for that measure.
    (e) Audit requirements. Uniform audit requirements as set forth in 
2 CFR parts 200 and 3002 and 44 CFR part 206

[[Page 50679]]

apply to all grant assistance provided under this subpart. FEMA may 
elect to conduct a Federal audit on the disaster assistance award or on 
any of the subawards.

0
30. Amend Sec.  206.439 by revising the second sentence of paragraph 
(c) to read as follows:


Sec.  206.439   Allowable costs.

* * * * *
    (c) * * * Recipients and subrecipients may be reimbursed for 
eligible pre-award costs for activities directly related to the 
development of the project or planning proposal. * * *

0
31. Amend Sec.  206.440 by revising the introductory text and 
paragraphs (a), (b) paragraph heading, (c) paragraph heading, (c)(2) 
and (3), (d), and (e)(3) to read as follows:


Sec.  206.440  Appeals.

    An eligible applicant, subrecipient, or recipient may appeal any 
determination previously made related to an application for or the 
provision of Federal assistance according to the procedures in this 
section.
    (a) Format and content. The applicant or recipient will make the 
appeal in writing through the recipient to the Regional Administrator. 
The recipient-will review and evaluate all subrecipient appeals before 
submission to the Regional Administrator. The recipient may make 
recipient-related appeals to the Regional Administrator. The appeal 
must contain documented justification supporting the appellant's 
position, specifying the monetary figure in dispute and the provisions 
in Federal law, regulation, or policy with which the appellant believes 
the initial action was inconsistent.
* * * * *
    (b) Levels of appeal. * * *
    (c) Time limits. * * *
    (2) The recipient will review and forward appeals from an applicant 
or subrecipient, with a written recommendation, to the Regional 
Administrator within 60 days of receipt.
    (3) Within 90 days following receipt of an appeal, the Regional 
Administrator (for first appeals) or Assistant Administrator for the 
Mitigation Directorate (for second appeals) will notify the recipient 
in writing of the disposition of the appeal or of the need for 
additional information. A request by the Regional Administrator or 
Assistant Administrator for the Mitigation Directorate for additional 
information will include a date by which the information must be 
provided. Within 90 days following the receipt of the requested 
additional information or following expiration of the period for 
providing the information, the Regional Administrator or Assistant 
Administrator for the Mitigation Directorate will notify the recipient 
in writing of the disposition of the appeal. If the decision is to 
grant the appeal, the Regional Administrator will take appropriate 
implementing action.
    (d) Technical advice. In appeals involving highly technical issues, 
the Regional Administrator or Assistant Administrator for the 
Mitigation Directorate may, at his or her discretion, submit the appeal 
to an independent scientific or technical person or group having 
expertise in the subject matter of the appeal for advice or 
recommendation. The period for this technical review may be in addition 
to other allotted time periods. Within 90 days of receipt of the 
report, the Regional Administrator or Assistant Administrator for the 
Mitigation Directorate will notify the recipient in writing of the 
disposition of the appeal.
    (e) * * *
    (3) The decision of the FEMA official at the next higher appeal 
level will be the final administrative decision of FEMA.

Deanne B. Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2021-19186 Filed 9-9-21; 8:45 am]
BILLING CODE 9110-11-P