[Federal Register Volume 88, Number 166 (Tuesday, August 29, 2023)]
[Rules and Regulations]
[Pages 59730-59783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18457]
[[Page 59729]]
Vol. 88
Tuesday,
No. 166
August 29, 2023
Part V
Department of Homeland Security
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Federal Emergency Management Agency
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44 CFR Part 296
Hermit's Peak/Calf Canyon Fire Assistance; Final Rule
Federal Register / Vol. 88 , No. 166 / Tuesday, August 29, 2023 /
Rules and Regulations
[[Page 59730]]
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
44 CFR Part 296
[Docket ID FEMA-2022-0037]
RIN 1660-AB14
Hermit's Peak/Calf Canyon Fire Assistance
AGENCY: Federal Emergency Management Agency, Department of Homeland
Security.
ACTION: Final rule.
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SUMMARY: This final rule sets out the procedures for claimants to seek
compensation for injury or loss of property resulting from the Hermit's
Peak/Calf Canyon Fire.
DATES: This rule is effective August 29, 2023.
FOR FURTHER INFORMATION CONTACT: Angela Gladwell, Office of Response
and Recovery, 202-646-2500, [email protected]. Persons
with hearing or speech challenges may access this number through TTY by
calling the toll-free Federal Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Summary of Legal Authority
Congress enacted the Hermit's Peak/Calf Canyon Fire Assistance Act
(``Act'') as part of the Continuing Appropriations and Ukraine
Supplemental Appropriations Act, 2023, Public Law 117-180, 136 Stat.
2114 (2022), and directed FEMA to issue an Interim Final Rule (``IFR'')
within 45 days of enactment. Congress passed the Act to compensate
those parties who suffered injury and loss of property from the
Hermit's Peak/Calf Canyon Fire (``Fire''). The Act requires FEMA to
design and administer a claims program to compensate victims of the
Fire for injuries resulting from the Fire and to provide for the
expeditious consideration and settlement for those claims and injuries.
The Act further directs FEMA to establish an arbitration process for
disputes regarding claims. On December 29, 2022, the Consolidated
Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459 provided
additional funding for the Act's implementation.
B. Summary of the IFR
On November 14, 2022, FEMA published the IFR that established the
procedures for processing and paying claims for property, business,
and/or financial losses to those sustaining losses from the Fire.
FEMA's procedures in the IFR were generally consistent with those
established for claims associated with the Cerro Grande Fire Assistance
Act.\1\ Under the IFR procedures, a claimant initiates a claim by
filing a Notice of Loss with the Office of Hermit's Peak/Calf Canyon
Fire Claims (``Claims Office''). After receipt and acknowledgement by
the Claims Office, the Claims Office contacts the claimant to review
the claim and helps the claimant formulate a strategy for obtaining any
necessary supporting documentation to complete the Proof of Loss. After
coordinating with the Claims Reviewer, the claimant reviews and signs a
Proof of Loss and submits it to the Claims Office. The Claims Reviewer
reviews and evaluates the Proof of Loss and submits a report to the
Authorized Official for review to determine whether compensation is due
to the claimant. The Authorized Official's written decision is provided
to the claimant. If satisfied with the decision, the claimant receives
payment after returning a completed Release and Certification Form. If
the claimant is not satisfied with the decision, an Administrative
Appeal could be filed with the Director of the Claims Office. If the
claimant is not satisfied after appeal, the dispute could be resolved
through binding arbitration or heard in the United States District
Court for the District of New Mexico.
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\1\ The Cerro Grande Fire Assistance Act (Pub. L. 106-246
(2001)) required FEMA to design and administer a program to fully
compensate those who suffered injuries resulting from the Cerro
Grande Fire. The Cerro Grande Fire resulted from a prescribed fire
ignited on May 4, 2000, by National Park Service fire personnel at
the Bandelier National Monument, New Mexico under an approved
prescribed fire plan. That fire burned approximately 47,750 acres
and destroyed over 200 residential structures. The Cerro Grande Fire
Assistance Act process is detailed in an Interim Final Rule (65 FR
52259 (Aug. 27, 2000) and a Final Rule (66 FR 15847 (Mar. 21, 2001)
that is now codified at 44 CFR part 295.
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C. Summary of Changes From the IFR to the Final Rule
FEMA is making changes from the IFR to the Final Rule to reflect
the concerns raised by commenters and better adhere to the intent of
the Act by addressing the needs of the communities impacted by the
Fire. Given the geographic, economic, and cultural distinctions between
the impacted communities of the Cerro Grande and the Hermit's Peak/Calf
Canyon Fires, FEMA is revising some sections of the regulatory text to
ensure the claims process is more tailored to claimants impacted by the
Fire. FEMA is revising the regulatory text in the Final Rule to
eliminate the 25 percent formulas associated with reforestation and
revegetation in Sec. 296.21(c)(2) and with heightened risk reduction
in Sec. 296.21(e)(5) that were based on the Cerro Grande Fire
Assistance process. FEMA recognizes the distinct geographic, economic,
and cultural differences between these impacted communities and that
these formulas, while an efficient way to process claims in the Cerro
Grande Fire Assistance process, are not easily adapted to meet the
needs of claimants injured by the Fire. FEMA agrees with the majority
of commenters that removal of these formulas is essential to ensuring
claimants in the Hermit's Peak/Calf Canyon Fire Assistance process are
compensated for their actual compensatory damages resulting from the
Fire. FEMA is modifying Sec. 296.21(c)(3)(ii) regarding claims for a
decrease in the value of real property. Distinct from Cerro Grande, the
claimants impacted by this Fire have commented that they are more
likely to have significant acreage damaged that has the potential for
long-term natural restoration. Requiring that the property value be
permanently diminished for a decrease in property value claim, as
provided in the IFR, is inconsistent with the geography, economy, and
real estate valuations of the impacted communities.\2\ Based on
comments received and to ensure the Final Rule accommodates the needs
of claimants and impacted communities, FEMA is revising the language in
296.21(c)(3)(ii) to allow a claimant to establish that the value of the
real property was ``significantly'' diminished ``long-term'' as a
result of the Fire. FEMA is adding paragraph (c)(5) to incorporate
language from the Act regarding physical infrastructure to ensure that
claimants understand compensatory damages may be awarded for damage or
destruction of physical infrastructure, including damage to irrigation
infrastructure such as acequia systems. Acequia systems are unique to
the communities impacted by
[[Page 59731]]
the Fire and, just as the Act recognizes this distinction, FEMA is also
recognizing it and incorporating it into the Final Rule.
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\2\ ``On the flip side, economic strategies traditionally
employed in the Santa Fe National Forest assessment area, typically
combining ranching, acequia agriculture, wood collection and other
communal land uses, appear to be less viable in the context of
rising land values and declining prices for primary commodities.
Consequently, many of these traditional uses are party to the
transformation of land use patterns, as ranches and agricultural
lands are sold for residential and second home development.''
University of New Mexico Bureau of Business and Economic Research,
``Socioeconomic Assessment of the Santa Fe National Forest,'' August
2007 at pg. 99, found at https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf (last accessed July 5, 2023).
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In the IFR, FEMA requested additional feedback on some of the dates
set relating to claims for financial losses. Based on comments
received, FEMA is making changes to those dates. FEMA currently
requires claimants seeking compensation for out-of-pocket expenses for
treatment of mental health conditions to submit claims for treatment
rendered on or before April 6, 2024. FEMA is revising this paragraph to
allow claims for treatment identified on or before November 14, 2024,
consistent with the timeframe for submitting a claim under the Act.
FEMA recognizes that mental health treatment may extend beyond the
deadline for filing a claim and claimants may reopen claims under Sec.
296.35 for good cause. FEMA is also making a clarifying edit in the
Final Rule by specifying that the treatment can be for a condition that
resulted from the Fire or for conditions worsened by the Fire. Based on
comments received, this edit helps clarify that treatment for
conditions worsened by the Fire will also be compensated. In the IFR,
FEMA allows compensation for donations provided no later than September
20, 2022. FEMA is revising Sec. 296.21(c)(4) to allow claimants to
seek actual compensatory damages for donations provided to survivors no
later than November 14, 2022. FEMA is setting the date of the IFR
publication as the timeframe by which donations will be considered
compensable.
FEMA is modifying the language in Sec. 296.31(a) regarding
reimbursement for expert opinions. FEMA understands that claimants
impacted by this Fire are more likely to need the services of experts
to help better value their claims than the claimants in the Cerro
Grande Fire Assistance process given the scope of the Fire and the
geographic, economic, and cultural distinctions between the impacted
communities. FEMA is revising the regulatory text to allow for
reimbursement for expert opinions that the Claims Office deems
necessary to determine the amount of the claim. This additional
flexibility will help claimants and FEMA better understand and process
claims.
FEMA is also revising Sec. 296.35 of the regulatory text in the
Final Rule regarding reopening a claim. The IFR provides that claimants
can seek to reopen their claim to consider issues raised when the
claimant closes on the sale of a home and wishes to present a claim for
a decrease in the value of their real property under Sec.
296.21(c)(3). FEMA is revising this language in the Final Rule to allow
claimants to reopen their claim when the claimant closes on the sale of
real property, expanding the ability to reopen a claim beyond just a
home. This change reflects the unique geographic area impacted by the
Fire and the reality that claimants may sell a portion of their land
without necessarily selling their home and experience a loss for which
compensation should be made available. FEMA is also revising the
timeline by which a request to reopen must be submitted for claims
related to additional losses as part of a reconstruction in excess of
those previously awarded or for good cause. Recognizing the challenges
claimants face with reconstruction and other potential issues that can
arise that require a claim to be reopened, FEMA is revising Sec.
296.35 to set the deadline by which requests to reopen these types of
claims must be submitted as a date in the future that the Director of
the Claims Office will set and publish in the Federal Register and at
https://www.fema.gov/hermits-peak.
FEMA is making some clarifying revisions in the Final Rule.
Currently in Sec. 296.1, FEMA states the purpose of the rule is to pay
for actual compensatory damages for injuries suffered from the Fire
(emphasis added). FEMA is revising this language, consistent with the
language from the Act, to pay for actual compensatory damages for
injuries resulting from the Fire (emphasis added). FEMA is making this
edit to better communicate to claimants that all injuries resulting
from the Fire, including injuries resulting from flooding, mudflow,
mold, and debris flow in the aftermath of the Fire, are compensable.
However, a claimant may not be eligible for compensation if their
injuries resulted from flooding, mudflow, mold, or debris unrelated to
the Fire. FEMA is also updating the definition of ``subsistence
resources'' to include ``other natural resource'' gathering, consistent
with how the impacted communities are engaged in subsistence
activities. FEMA is updating Sec. 296.12 regarding election of
remedies. The IFR discusses how claimants waive their right to pursue
claims if they accept an award. FEMA is revising this section to
clarify that the claimant waives their right to pursue other claims
only after acceptance of a final award, consistent with commenters'
request for additional clarity on this point and for consistency with
the Act. Consistent with the Act, FEMA is incorporating language in
Sec. 296.13 to reiterate the prioritization of claims for injured
persons over subrogees. In Sec. 296.21(a), FEMA is resolving a
grammatical error by changing ``Injury'' to ``injury'' and another
grammatical error by adding ``that'' to Sec. 296.21(f) to read that
the Act allows FEMA to compensate Injured Persons only for damages not
paid, or that will not be paid, by insurance or other third-party
payments or settlements.
II. Background and Legal Authority
On September 30, 2022, President Biden signed the Act into law as
part of the Continuing Appropriations and Ukraine Supplemental
Appropriations Act, 2023, Public Law 117-180, 136 Stat. 2114 (2022).\3\
Congress passed the Act to compensate those parties who suffered injury
and loss of property from the Hermit's Peak/Calf Canyon Fire. On April
6, 2022, the U.S. Forest Service initiated the Las Dispensas-Gallinas
prescribed burn on Federal land in the Santa Fe National Forest in San
Miguel County, New Mexico. That same day the prescribed burn, which
became known as the ``Hermit's Peak Fire,'' escaped the burn unit's
boundaries and was declared a wildfire, spreading to other Federal and
non-Federal lands.\4\ On April 19, 2022, the Calf Canyon Fire, also in
San Miguel County, New Mexico, began burning on Federal land and was
later identified as the result of a pile burn in January 2022 that
remained dormant under the surface before reemerging.\5\ The Hermit's
Peak and Calf Canyon Fires merged on April 27, 2022, and both fires
were reported as the Hermit's Peak Fire or the Hermit's Peak/Calf
Canyon Fire. By May 2, 2022, the fire had grown, causing evacuations in
multiple villages and communities in San Miguel County and Mora County,
including the San Miguel County jail, the State's psychiatric hospital,
the United World College, and New Mexico
[[Page 59732]]
Highlands University.\6\ At the request of New Mexico Governor Lujan
Grisham, President Biden issued a major disaster declaration on May 4,
2022.\7\ The Hermit's Peak/Calf Canyon Fire was not 100 percent
contained until August 21, 2022.\8\
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\3\ As mentioned above, Division N, Title VI of the Consolidated
Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459
authorized additional funding to implement the Act.
\4\ Section 102(a)(1) and (2), Hermit's Peak/Calf Canyon Fire
Assistance Act, Public Law 117-180, 136 Stat. 2114 (2002). See also
``Las Dispensas Prescribed Burn Declared Wildfire,'' Apr. 6, 2022
found at https://inciweb.nwcg.gov/incident/article/8049/68044/ (last
accessed July 5, 2023 Sept. 15, 2022) and Theresa Davis, ``How `good
fires' can turn into wildfires,'' Albuquerque Journal, Apr. 30, 2022
found at https://www.alqjournal.com/2494692/how-good-fires-can-turn-into-wildfires.html (last accessed Sept. 15, 2022).
\5\ See Bill Gabbert, ``Investigators determine Calf Canyon Fire
caused by holdover from prescribed fire,'' Wildfire Today, May 27,
2022 found at https://wildfiretoday.com/?s=calf+canyon+holdover&apbct__email_id__search_form_34270= (last
accessed Oct. 6, 2022).
\6\ See Bill Gabbert, ``Calf Canyon/Hermits Peak Fire grows to
more than 120,000 acres,'' Wildfire Today, May 2, 2022 found at
https://wildfiretoday.com/2002/05/02/calf-canyon-hermits-peak-fire-grows-to-more-than-120000-acres/ (last accessed Sept. 15, 2022). See
also Bryan Pietsch and Jason Samenow, ``New Mexico blaze is now
largest wildfire in state history,'' The Washington Post, May 17,
2022, found at https://www.washingtonpost.com/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/ (last accessed July 27,
2023).
\7\ 87 FR 33808 (June 3, 2022).
\8\ ``Hermits Peak/Calf Canyon Fire 100 percent contained, fire
officials say,'' The New Mexican, Aug. 21, 2022 found at https://www.santafenewmexican.com/news/local_news/hermits-peak-calf-canyon-fire-100-percent-contained-fire-officials-say/articles_5ac054fc-21a1-11ed-9401-134e852ee0a8.html (last accessed July 5, 2023).
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The Act provides compensation to injured persons impacted by the
Fire. It requires FEMA to design and administer a claims program to
compensate injured parties for injuries resulting from the Fire and to
provide for the expeditious consideration and settlement for those
claims and injuries. The Act further directs FEMA to establish an
arbitration process for disputes regarding claims.
On November 14, 2022, FEMA published an IFR with a 60-day comment
period that established the procedures for the processing and payment
of claims to those injured by the Fire sustaining property, business,
and/or financial losses. FEMA held public meetings during the comment
period to further gather public feedback on the rule. Based on public
comment, FEMA is making changes to the Final Rule to better reflect the
differences between the Cerro Grande Fire and the Hermit's Peak/Calf
Canyon Fire, as the Hermit's Peak/Calf Canyon Fire destroyed a
significant amount of forested private lands, communities, acequias,
ranches, and farms, and to further reflect the specific cultural,
economic, and geographic distinctions between the areas impacted by the
Hermit's Peak/Calf Canyon Fire. This rule finalizes the IFR, with
changes in response to public comments received on the IFR.
III. Discussion of Public Comments and FEMA's Responses
A. Summary of Public Comments
The public comment period on the IFR closed on January 13, 2023,
and FEMA received 190 germane written comments.\9\ FEMA hosted six
public meetings on the IFR and received 103 germane comments from those
public meetings.\10\ FEMA also hosted a meeting with the State of New
Mexico's Department of Homeland Security and Emergency Management and
supporting contract staff, and received comments during that
meeting.\11\ Commenters included individuals, State and local
government entities, congressional representatives, associations, law
firms, and non-profit organizations. Some commenters appreciated FEMA's
effort to publish the IFR in a timely manner, arrange public meetings
to listen to concerns in-person, and launch the claims process. Most
commenters offered recommendations for changes to the IFR. FEMA
describes the specific revisions to the Final Rule and addresses the
specific concerns of commenters below.
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\9\ FEMA received three comments that did not address the
Interim Final Rule or the claims process: One commenter asked where
the regulation could be read, and FEMA contacted the commenter to
provide this information; another commenter shared a poem to reflect
their feelings during the holiday season after the Fire; one comment
from a law firm was incomplete without attachments referenced.
\10\ FEMA also received an inquiry on the status of another FEMA
application at a public meeting. A commenter offered their services
to assist with claims, filling out applications for Federal
agencies, internet use, mental health assistance, etc. at two public
meetings. Another commenter from the same organization also offered
services during a public meeting.
\11\ Transcripts of that meeting have been posted to the public
docket at https://www.regulations.gov/docket/FEMA-2022-0037.
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B. Differences Between the Hermit's Peak/Calf Canyon Fire and the Cerro
Grande Fire
Some commenters recommended changes to the IFR based on the
distinctions between the Cerro Grande and Hermit's Peak/Calf Canyon
Fires.
Comment: Several commenters stated distinctions between the two
areas where the fires were located. As one commenter stated, the
Hermit's Peak/Calf Canyon Fire ``destroyed significant forested private
lands, communities, acequias, ranches, and farms.'' Another commenter
stated that the Cerro Grande Fire ``burned a mostly urban environment
of high-value homes on mostly small tracts of land'' while the Hermit's
Peak/Calf Canyon Fire burned ``mostly rural land with relatively fewer
and lower value structures.''
FEMA Response: FEMA agrees that the challenges facing the
communities and claimants impacted by the Hermit's Peak/Calf Canyon
Fire are distinct and that the IFR should be revised to better reflect
those distinctions. The Cerro Grande Fire burned approximately 47,000
forested acres, causing $1 billion in property damage with over 280
homes destroyed or damaged and 40 laboratory structures burned.\12\ In
contrast, the Hermit's Peak/Calf Canyon Fire burned more than 340,000
acres, just under 200,000 of which were privately owned, and destroyed
at least 160 homes and over 900 structures.\13\ According to the 2020
Census, Los Alamos County's population density is 178 people per square
mile compared to 5.8 people per square mile in San Miguel County and
2.2 people per square mile in Mora County.\14\ In the Socioeconomic
Assessment of the Santa Fe National Forest, provided to the U.S. Forest
Service by the University of New Mexico, Bureau of Business and
Economic Research, approximately one third of privately held land
within the Santa Fe National Forest is located in San Miguel
County.\15\ Given the Hermit's Peak/Calf Canyon Fire's scope and the
type of land impacted by that fire, FEMA is proposing changes to
sections 296.4, 296.21(c)(2), 296.21(c)(3)(ii), 296.21(e)(5),
296.31(a), and 296.31(c)(3) while adding Sec. 296.21(c)(5) to address
the concerns raised that are unique to those communities. Changes to
each of these sections is further described below.
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\12\ Bill Gabbert, ``Cerro Grande fire, 10 years ago today,''
May 10, 2010 found at https://wildfiretoday.com/2010/05/10/cerro-grande-fire-10-years-ago-today/ (last accessed July 5,, 2023).
\13\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022,
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Mar. 3, 2023).
\14\ See https://www.census.gov/library/stories/state-by-state/new-mexico-population-change-between-census-decade.html (last
accessed July 5, 2023).
\15\ University of New Mexico Bureau of Business and Economic
Research, ``Socioeconomic Assessment of the Santa Fe National
Forest,'' August 2007 at pg. 5, found at https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf (last accessed Mar. 3,
2023).
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Comment: Commenters reiterated the communities impacted by the
Hermit's Peak/Calf Canyon Fire also had different economic and cultural
practices. One commenter stated that ``FEMA is totally unfamiliar with
how land management, including use of resources is conducted in an area
where descendants of an individual land grant have access to and use of
resources within that grant.'' The commenter went on to note that the
Cerro Grande Fire impacted a part of the State that ``has little in
common with the cultural and economic practices in this area.'' As one
commenter stated, ``Individuals and businesses relied on
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the forests not just for subsistence, but also for their annual income
for themselves and others in the community.'' Another commenter stated,
``The use of the land's timber in small (family) enterprises is one of
the keys to the livelihoods of this area. Another is the small farming
enterprises consisting of small orchards, raising hay, cattle, and
horses. This is not a region of city life and landscaping, but is
rural, with a deep heritage of independent living and family
business.''
FEMA Response: FEMA agrees that the losses facing the communities
and claimants impacted by the Hermit's Peak/Calf Canyon Fire are
distinct and that the IFR should be revised to better reflect those
distinctions. The Act requires FEMA to compensate claimants for
injuries resulting from the Fire and the injuries suffered by claimants
in this community are distinct from those suffered in Cerro Grande.
Specifically, FEMA notes the economic differences between the two
impacted communities resulted in different losses within each
community. Los Alamos County has an economy ``almost entirely composed
of government, retail, and service sector jobs. These three sectors
combined make up more than 90 percent of the county's employment . . .
Los Alamos is somewhat unique in its lack of farming and other `core'
industry sectors such as construction and manufacturing . . . Mora
County is by far the smallest county in the region, in terms of size as
well as economy . . . San Miguel County is fairly small, and farm
employment makes up a larger portion of overall employment there than
in any other county in the region except Rio Arriba. San Miguel and
Mora County contain minor, though substantial, sections of the Santa Fe
N[ational] F[orest]. These two counties, as the smaller and poorer
economies of the region, likely rely more heavily on the benefits of
the forest as a provider of primary products such as fuel wood and
food, as well as land for ranching and logging.'' \16\ The communities
impacted by the Hermit's Peak/Calf Canyon Fire rely much more on the
land for their economic viability than the Los Alamos County community
that was impacted by the Cerro Grande Fire. Additionally, the
population per square mile in the impacted communities demonstrates a
much higher density in Los Alamos County compared to Mora and San
Miguel Counties and requiring FEMA to consider the differences in the
residential areas impacted by the two fires.\17\ To fully implement the
intent of the Act, FEMA must consider these differences between the
impacted communities and address the specific injuries suffered by the
Hermit's Peak/Calf Canyon Fire communities around the use of the land
in those communities. FEMA is proposing changes to Sec. Sec. 296.4,
296.21(c)(2), 296.21(c)(3)(ii), 296.21(e)(5), 296.31(a), and 296.35
while adding Sec. 296.21(c)(5) to address the concerns raised that are
unique to these communities. Changes to each of these sections are
further described below.
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\16\ University of New Mexico Bureau of Business and Economic
Research, ``Socioeconomic Assessment of the Santa Fe National
Forest,'' August 2007 at pgs. 78-79 and 89, found at https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf (last
accessed Mar. 3, 2023).
\17\ The population per square mile in 2020 was 178 in Los
Alamos County, 5.8 in San Miguel County, and 2.2 in Mora County. See
U.S. Census Quick Facts--Los Alamos County, New Mexico found at
https://www.census.gov/quickfacts/losalamoscountynewmexico, https://www.census.gov/quickfacts/sanmiguelcountynewmexico, and https://www.census.gov/quickfacts/moracountynewmexico (last accessed July 5,
2023).
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Comment: Commenters stated another distinction between those
impacted by the Hermit's Peak/Calf Canyon Fire and those impacted by
the Cerro Grande Fire included the number of claimants that are
insured, stating more claimants in the Cerro Grande Fire were insured
than in the Hermit's Peak/Calf Canyon Fire.
FEMA Response: FEMA agrees that the challenges facing the claimants
impacted by the Hermit's Peak/Calf Canyon Fire are distinct and that
the IFR should be revised to better reflect those distinctions.
Specifically, FEMA is proposing changes to sections 296.21(c)(2),
296.21(e)(5), 296.31(a), and 296.35 while adding Sec. 296.21(c)(5) to
address the concerns raised regarding the number of uninsured claimants
impacted by the fire.
Comment: A commenter suggested FEMA look at other wildfires beyond
Cerro Grande, including the recent California wildfire involving a
utility company.
FEMA Response: FEMA appreciates the suggestion and has reviewed
some of the best practices associated with the California compensation
process referenced by the commenter. That process, however, involved a
bankruptcy settlement of a private corporation under California law.
FEMA is required to follow the statutory framework provided in the Act.
While the Claims Office is reviewing some of the best practices from
the California incident, that incident and the compensation process
implemented to compensate those injured thereby are factually and
legally too distinct from the Act's requirements to be considered a
full template for implementation in regulation.
C. Comments on Sec. Sec. 296.1 and 296.3, the Rule's Purpose and
Information
Comment: FEMA received comments stating the IFR's purpose should be
revised to reflect the Act's purpose language. Specifically, a
commenter wrote ``The Hermit's Peak/Calf Canyon Fire Assistance Act
provides one of the purposes of the Act is `to compensate victims of
the Hermit's Peak/Calf Canyon Fire, for injuries resulting from the
fire.' . . . FEMA's [I]nterim [F]inal [R]ule's current phrase `suffered
from the Hermit's Peak/Calf Canyon Fire' (emphasis added) could result
in limiting allowable losses to solely fire damages, in violation of
the Act.''
FEMA's Response: FEMA agrees that the Act's purpose as stated in
section 102(b)(1) is to compensate victims for ``injuries resulting
from the Fire'' (emphasis added) and is amending Sec. 296.1 to state
that the Claims Office will receive, evaluate, process, and pay actual
compensatory damages for injuries resulting from the Hermit's Peak/Calf
Canyon Fire. This technical edit provides consistency with the language
of the Act.
Comment: Some commenters requested FEMA change the purpose of the
rule in Sec. 296.1 to include flood damages, as well as throughout the
rest of the rule.
FEMA Response: The Final Rule language as revised in Sec. 296.1 as
explained above is sufficiently broad to encompass a range of damages
claimants may have suffered, including flood and flood-related damages.
Further, the definition of ``injured person'' includes injuries
``resulting from the Hermit's Peak/Calf Canyon Fire'' and is
sufficiently broad to encompass flooding, mudflow, mold, and debris
flow, as well as other types of injuries that may result from the Fire.
Comment: One commenter suggested that FEMA include specific
reference to mitigation efforts in the rule's purpose.
FEMA Response: Section 296.1 does not require any edits to
incorporate mitigation efforts into the rule. The purposes of the Act
are to compensate Fire victims for injuries resulting from the Fire and
the expeditious consideration and settlement of claims for those
injuries. Further, the Act requires FEMA to promulgate a regulation
``for the processing and payment of claims under the Act.'' Consistent
with the Act, FEMA's Final Rule states the purpose of the regulation is
to ``establish the Office of Hermit's Peak/Calf Canyon Fire Claims
(`Claims Office') to receive, evaluate, process,
[[Page 59734]]
and pay actual compensatory damages for injuries resulting from the
Hermit's Peak/Calf Canyon Fire.'' The Act authorizes FEMA to compensate
claimants for the ``costs of reasonable efforts, as determined by the
Administrator, to reduce the risk of wildfire, flood, or other natural
disaster in the counties impacted by the Hermit's Peak/Calf Canyon Fire
to risk levels prevailing in those counties before the Hermit's Peak/
Calf Canyon Fire,'' and FEMA details this compensation in Sec.
296.21(e)(5). Section 296.1 does not require revision to allow for
compensation for eligible risk reduction measures.
Comment: Some commenters suggested FEMA amend the information and
assistance section to incorporate details regarding the Claims Office
addresses and phone number. One commenter suggested FEMA allow for
applications, correspondence, and supporting documentation to be
exchanged by postal mail. This commenter also recommended FEMA create
centralized locations where northern New Mexicans can physically go to
access the electronic application and receive assistance in filling out
the applications in multiple languages so that the application and
supporting documentation can be timely submitted.
FEMA Response: FEMA appreciates these suggestions and plans to
provide further details regarding the Claims Office operation and
opportunities for claimants to obtain assistance online at https://www.fema/gov/hermits-peak as explained in the regulation. Because FEMA
wants to continue adapting to claimants' needs in this process, it is
best to direct claimants to the website in the regulations for the
latest information available on the process. FEMA will continue to
provide outreach efforts to the community in addition to posting at
https://www.fema.gov/hermits-peak.
D. Comments on Sec. 296.4 Definitions
Some commenters suggested FEMA modify the definitions provided in
the IFR to better reflect the unique challenges presented by the
Hermit's Peak/Calf Canyon Fire.
Comment: One commenter recommended FEMA amend the definition of
``Authorized Official's Determination'' to include determinations by
mail and electronically.
FEMA Response: FEMA does not believe edits to the regulatory text
are required as ``mailed'' can incorporate both physical and electronic
mailing. FEMA anticipates that, where applicants have provided contact
information to allow for electronic mailing of this determination, the
Agency will provide the Authorized Official's determination both by
mail and electronically. However, there may be instances where the
claimant has not provided contact information to allow for electronic
mailing and thus FEMA could only provide the determination by physical
mail. To ensure flexibility in these instances, FEMA is not amending
the regulatory language.
Comment: One commenter also recommended adding a definition of a
``Claims Navigator'' to the regulation, providing suggestions on how
these Navigators would work with claimants in the process.
FEMA Response: FEMA does not believe this change is needed. The
Agency is not referencing this term in the regulatory text. Terms not
used in the regulatory text do not need to be defined in the
definitions section of the regulation.\18\
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\18\ See ``Writing Resources for Federal Agencies, Regulatory
Drafting Guide, Definitions'' found at https://www.archives.gov/federal-register/write/legal-docs/definitions.html (last accessed
Feb. 16, 2023).
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Comment: A commenter suggested revision to the definition of ``good
cause'' to include ``or any circumstance where the Administrator
determines that good cause would further the mission of the Claims
Office to pay compensatory damages for injuries suffered from the
Hermit's Peak/Calf Canyon Fire.''
FEMA Response: FEMA disagrees with the comments that the additional
language in the definition of ``good cause'' is required. The Act
authorizes the Director of the Claims Office to assume the duties of
the Administrator.\19\ Adding language to the definition of ``good
cause'' to allow the Administrator to make a good cause determination
would result in a redundancy as the IFR language provides the Director
discretion to make good cause determinations. As written, the IFR
provides for the use of good cause in circumstances regarding deadlines
or supplementing and reopening claims.
---------------------------------------------------------------------------
\19\ Section 103, Definition of ``Administrator'' (1)(B).
---------------------------------------------------------------------------
Comment: Some commenters also requested the definition of ``good
cause'' be amended to include ``or where damage from post-fire flooding
is suffered by the claimant after filing a claim.''
FEMA Response: FEMA disagrees that the ``good cause'' definition
must be revised to consider flooding damage after filing a claim. As
explained above, the definition of ``injured person'' includes injuries
``resulting from the Hermit's Peak/Calf Canyon Fire'' and is broad
enough to encompass flooding, mudflow, mold, and debris flow, as well
as other types of injuries that may be considered as a result of the
Fire. The current language allows for good cause ``where damage is
found after a claim has been submitted'' and this language, read in
conjunction with the definition of ``injured person'' addresses
concerns regarding whether such damage could constitute good cause to
supplement or reopen a claim.
Comment: One commenter raised concerns that ``good cause'' was too
subjective.
FEMA Response: The application of a good cause definition requires
use of discretion that by nature contains some subjectivity that cannot
be fully eliminated from the determination.
Comment: A commenter recommended FEMA change the definition of the
``Hermit's Peak/Calf Canyon Fire'' to add ``flooding, mudflow, mold,
and debris flow resulting from the two fires.'' The commenter requested
FEMA specifically reference flooding, mudflow, mold, and debris flow as
a cause of injury and as a damage that can be compensated.
FEMA Response: FEMA disagrees that this change is needed to the
definition of ``Hermit's Peak/Calf Canyon Fire'' to compensate
claimants for these types of injuries resulting from the Fire. The
definition of ``injured person'' includes injuries ``resulting from the
Hermit's Peak/Calf Canyon Fire'' and is broad enough to encompass
flooding, mudflow, mold, and debris flow, as well as other types of
injuries that may be considered as a result of the Fire. Adding this
language may narrow the scope of damages an injured person may seek to
claim, and FEMA prefers to retain the current definition of the Fire
while allowing claimants suffering injuries resulting from the Fire be
allowed to present their claims.
Comment: Three commenters recommended that FEMA modify the
definition of household ``to clarify that it does not exclude the
claims of owners that did not live at the property on a continuous
basis'' and that rather, these individuals should be included. While
including them in the definition of household, the commenters
recommended that these individuals ``not be compensated for financial
damages already paid to the primary resident.'' Rather, the individuals
should be ``eligible for compensation based on their individual loss.''
FEMA Response: FEMA is not amending the definition of ``household''
as requested by these comments. Claimants can file a claim as a
[[Page 59735]]
household or individually in these circumstances and the Claims Office
will accept the claim for review. Nothing in the current definition
prohibits claims filing either as a household or individually.
Comment: A commenter suggested the definition of ``injured person''
be modified to include ``acequia, land grant'' immediately after
``school district'' in the definition.
FEMA Response: FEMA does not believe this amendment is required to
cover the entities referenced. Rather, these entities are covered under
the current definition as an ``other non-Federal entity that suffered
injury resulting from the Hermit's Peak/Calf Canyon Fire.''
Comment: Another commenter stated FEMA should amend the definition
of ``injured person'' to include flooding, mudflow, mold, and debris
flow as a cause of injury and damage that can be compensated.
FEMA Response: FEMA disagrees that this edit is required to the
regulatory text. The current definition provides for these types of
injuries, as well as other types of injuries that may be considered an
injury resulting from the Fire. Adding this language may narrow the
scope of damages an injured person may seek to claim. The proposed
language also conflates injuries from flooding, mudflow, mold, and
debris irrespective of their connection with the Fire with injuries
from flooding, mudflow, mold, and debris that are connected to the
Fire. Only the latter are compensable under the Act. Therefore, FEMA
prefers to retain the current definition of the Fire, which will allow
claimants suffering injuries resulting from the Fire to present their
claims.
Comment: Commenters wrote that nonprofit organizations should be
considered ``injured person.''
FEMA Response: The current definition of ``injured person''
includes an ``other non-Federal entity that suffered injury resulting
from the Hermit's Peak/Calf Canyon Fire'' and that terminology
encompasses non-profit organizations. FEMA understands non-profit
organizations may have suffered injuries resulting from the Fire, and
FEMA believes the current definition sufficiently encompasses all types
of for-profit and non-profit entities. FEMA's website at https://www.fema.gov/hermits-peak provides more information explaining the
regulatory text to help claimants better understand who is considered
an injured person under the Act.
Comment: Some commenters suggested that FEMA amend the definition
of ``subsistence resources'' to include ``and other natural resource''
to reflect the types of resources gathered and the broad range of
subsistence use practices of both acequia-served communities, as well
as Tribal and Pueblo sovereigns.
FEMA Response: Consistent with these suggestions, FEMA is adding
``or other natural resource'' to the definition of ``subsistence
resources'' to reflect the specific needs of the impacted communities.
As explained above, the Hermit's Peak/Calf Canyon Fire impacted an area
that is economically and culturally distinct from the communities
impacted by the Cerro Grande Fire. This change reflects FEMA's
understanding that other natural resources beyond firewood may be
gathered for subsistence purposes.
E. Comments on the Claims Process Generally
Commenters offered comments and suggestions on a wide range of
issues on the claims process. Commenters offered suggestions on ways to
streamline the process and to make the process more accessible to the
impacted communities. Commenters wrote of experiences with FEMA and
other Federal agencies, stating how FEMA and other agencies handled
their cases under other programs.
Comment: One commenter stated, ``Nothing in my experience with
F[EMA] so far gives me faith that you are on my side or have my best
interests at heart.'' The comment continued ``So far communication
between government entities and organizations has been nonexistent or
completely dysfunctional . . . I need to have more confidence in your
ability to work with other entities, or even communicate within
F[EMA].'' Commenters provided suggestions on hiring personnel for the
Claims Office, including the Claims Office Director, Claims Navigators,
Claims Reviewers, and other staff, and how the agency should train the
staff. Commenters also stated their anger, frustration, and mistrust of
the process and requested to be treated with respect and compassion.
One commenter wrote ``Cataloging every single thing we lost in the
fire, correlating it with a receipt, and looking up how much it will
currently cost to replace it has been a full-time job for a while now,
and extremely difficult emotionally.'' Another commenter wrote about a
recent experience with FEMA stating ``it did nothing to build trust or
confidence in FEMA. The end effect has been the exact opposite. And in
turn, I have since prepared myself to expect more of this inappropriate
treatment from FEMA in all future interactions.'' A different commenter
wrote ``HPFAA administrators and claims reviewers must handle all
injured victim cases as though this injury to their lives and
livelihoods is a direct result of a felony act of arson deliberately
committed against them all. Government employees and contractors
responsible for this conflagration will never truly be held accountable
to receive due punishment for actions which will never even
`officially' be considered gross incompetence, but that doesn't make
the end result any less destructive than an act of intentional criminal
arson would be.'' One commenter stated ``I want you to remember that
this is a fire caused by the [F]ederal government and that we are the
victims of this. Please treat us with respect.''
FEMA Response: FEMA acknowledges the unique challenges faced by the
communities impacted by the Fire and how challenging it has been for
claimants to recover. FEMA and the Federal government provided a range
of existing programs to those impacted by the Fire, many of which were
not designed to meet the needs of the impacted communities, given the
extent of the injuries suffered as a result of the Fire. Those programs
were not designed to provide full financial compensation to those
injured by the Fire. For example, the Individuals and Households
Program (IHP) provides financial and direct services to eligible
individuals and households affected by a disaster, who have uninsured
or under-insured necessary expenses and serious needs. IHP is not a
substitute for insurance and cannot fully compensate for all losses
caused by a disaster; rather, that assistance is intended to meet basic
needs and supplement disaster recovery efforts.\20\ As disaster
assistance programs are not designed to fully compensate those impacted
by disasters, some applicants in these communities are frustrated with
and uncertain about, the Federal government's ability to assist them.
The Act's commitment to compensate victims through the Claims Office
process allows FEMA to directly provide claimants with compensation to
better assist claimants and communities in more fully recovering from
this devastating Fire. The Agency is committed to working with
claimants and communities to ensure the Claims Office meets their needs
and compensates claimants for the damages resulting from the Fire. The
Claims Office hired Claims Navigators from the community to guide
claimants through
[[Page 59736]]
the application process, focusing on ensuring that claimants understand
the process of applying for compensation, what compensation is
available for their losses, and what documentation is needed to obtain
this compensation.
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\20\ https://www.fema.gov/assistance/individual/program (last
accessed Mar. 3, 2023).
---------------------------------------------------------------------------
The Claims Office operates independently of FEMA's other programs,
and it provides a great deal more flexibility in the process of
applying for and receiving compensation than these more traditional
grant programs. Unlike FEMA's Individual Assistance and Public
Assistance, which provide disaster assistance to individuals and
households impacted by declared disasters, the Claims Office is not
subject to any caps on the amount of assistance it can provide. Unlike
FEMA's Public Assistance Program, which provides grants to States,
Federally recognized Tribal governments, U.S. territories, local
governments, and certain private non-profit (PNP) organizations, the
Claims Office does not have any cost share requirements, and there are
no conditions placed on receipt of the compensation.
1. Comments on the Claims Office Administrator
Comment: Commenters made specific requests regarding the
appointment of the Claims Office Administrator. Commenters requested
that an Independent Claims Administrator be appointed. One commenter
stated that the broad ``make whole'' compensation approach of the Act
was different from FEMA's normal disaster relief operation and Congress
recognized this by providing for the appointment of an Independent
Claims Administrator in the Act. This commenter stated the number of
potential claimants and broad scope of the harm they have suffered
required the appointment of an Independent Claims Administrator with
experience in `make whole' compensation processes. A different
commenter wrote that these claims processes are extremely complex, with
many moving parts and unique issues, and would be best overseen by a
claims manager familiar with fire-related claims processes. Another
commenter suggested an independent trustee or claim administrator be
appointed to manage and stated FEMA should not be in charge of
administration.
FEMA Response: Section 104(a)(3) gives the Administrator the option
to appoint an Independent Claims Manager to head the Claims Office. In
her discretion, the Administrator selected a Claims Office Director
with over 15 years of experience building and managing Federal programs
to start up the Claims Office and did not opt to appoint an Independent
Claims Manager. FEMA understands the commenters' desire to have an
Independent Claims Manager appointed. Given the short timelines that
the Agency had to publish the IFR and begin processing claims, FEMA
determined it was both efficient and effective to select a candidate
with extensive experience in government assistance programs to lead the
Claims Office. FEMA also understands concerns that other FEMA programs
do not operate in the same way in which the Act requires the Claims
Office to operate. However, FEMA was tasked with the implementation of
the Act, including operation of the Claims Office for this Fire, and
further has prior experience in operating a Claims Office in New Mexico
for the Cerro Grande Fire in 2000. FEMA recognizes the distinctions
between the two fires, but also believes the Agency can build on best
practices and incorporate principles of equity, as well as lessons
learned from the Cerro Grande Claims Office, to implement a Claims
Office for the Hermit's Peak/Calf Canyon Fire Assistance Act that will
acknowledge the differences between the two fires and best serve the
claimants and communities impacted by the Hermit's Peak/Calf Canyon
Fire.
Comment: In addition to requesting an independent claims
administrator, several commenters requested the claims administrator be
a New Mexico attorney and/or retired judge.
FEMA Response: As explained above, the Administrator has exercised
her discretion and selected the Director of the Claims Office. The
Director has extensive experience building and managing Federal
assistance programs and will lead the Claims Office in these nascent
stages. FEMA appreciates commenters' concerns that the Claims Office be
led by someone with familiarity with New Mexico law, as well as the
unique political, economic, and cultural institutions of the impacted
communities. FEMA has engaged in an extensive effort to recruit locally
for positions to support the processing of claims and provision of
compensation to claimants impacted by the Fire to ensure these specific
concerns are addressed. FEMA believes that local hiring at all other
levels of the Claims Office will better serve to meet the needs of
claimants and communities rather than a single hire at the Director
level. Additionally, FEMA is making changes in the Final Rule to better
reflect the needs of the impacted communities.
Comment: One commenter suggested another commenter be appointed as
the Independent Claims Office Administrator.
FEMA Response: As explained above, the Administrator has exercised
her discretion to hire the Director of the Claims Office with extensive
experience building and managing Federal programs to lead the Claims
Office.
2. Comments on the Claims Office
Commenters offered suggestions on how to staff and manage the
Claims Office.
Comment: Commenters suggested that FEMA hire members of the local
community to increase trust in the claims process. Some commenters
stated the importance of hiring New Mexicans familiar with acequias.
FEMA Response: FEMA agrees with these comments. As explained above,
FEMA has engaged in an extensive effort to recruit locally for
positions to support the processing of claims and provision of
compensation to claimants impacted by the Fire to ensure these specific
concerns are addressed.\21\ FEMA believes that hiring local applicants
at all other levels of the Claims Office will better serve to meet the
needs of claimants and communities by helping to ensure the Claims
Office is staffed with individuals familiar with the specific needs of
the communities impacted by the Fire. As of April 10, 2023, almost 70
percent of the permanent Claims Office team are local staff.\22\ Local
staff work out of Claims Offices in Santa Fe, Las Vegas, and Mora, New
Mexico, and serve in multiple capacities ranging from the Deputy
Director, Advocate and Claims Navigators, to external affairs and
facility support. Additionally, FEMA is making changes in the Final
Rule to better reflect the needs of the impacted communities.
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\21\ FEMA hosted a Hiring Fair on January 10, 2023, in Mora, NM
and provided Federal Resume Writing webinars on December 29, 2022,
and January 3, 2023. Details regarding the available positions were
also posted to https://www.fema.gov/fact-sheet/hermits-peakcalf-canyon-claims-office-now-hiring (last accessed Feb. 16, 2023).
\22\ FEMA notes that given the permanent positions in the Claims
Office are located in Mora, Las Vegas, and Santa Fe, New Mexico,
most applicants seeking these positions were local.
---------------------------------------------------------------------------
Comment: A commenter suggested FEMA stay alert to favoritism
``infiltrating the ranks of claims reviewers hired from the local
population.''
FEMA Response: FEMA appreciates the commenter's concerns regarding
favoritism. Federal employees are held to certain basic obligations of
public
[[Page 59737]]
service that require employees to ``act impartially and not give
preferential treatment to any private organization or individual.''
\23\ As part of the hiring and onboarding process, these obligations
are explained, and training is provided to ensure employees understand
the obligations of public service. FEMA also is coordinating with the
Department of Homeland Security Office of Inspector General and the
FEMA Fraud unit to ensure vigilant oversight.
---------------------------------------------------------------------------
\23\ 5 CFR 2635.101(b)(8).
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Comment: Some commenters suggested FEMA hire a specific contractor
to assist the manager and FEMA to process claims.
FEMA Response: Consistent with the Federal Acquisition
Regulation,\24\ FEMA awarded multiple competitive contracts to provide
support services to the Claims Office. Services include consulting,
claims processing, systems analysis, operation, and data analysis
support. Each contractor shall, to the maximum extent possible, create
opportunities for the utilization of local small businesses, including
the utilizing of businesses from underserved communities and develop a
plan to utilize local firms and/or hire local residents.
---------------------------------------------------------------------------
\24\ See https://www.acquisition.gov/browse/index/far.
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Comment: One commenter suggested FEMA hire an experienced claims
processor that can start handling claims immediately stating FEMA would
need to figure out how to handle claims first.
FEMA Response: The Claims Office engaged in a competitive hiring
action to hire an experienced Claims Chief. This position oversees the
claims process from the completion of the Notice of Loss to the final
payout on the claim. The Claims Office also hired a number of
experienced contract claims examiners with insurance adjusting
experience to review and make recommendations on claims. The Claims
Chief oversees Claims Reviewers at the main Claims Office, as well as
at least three public-facing claims offices in Mora, San Miguel, and
Las Vegas, New Mexico.
Comment: A commenter suggested FEMA take the time that is required
to provide substantial training for newly hired staff.
FEMA Response: FEMA agrees that training will be critical for all
newly hired staff for the Claims Office. FEMA intends to provide
standard onboarding training for all new employees, as well as
specialized training for all Claims Office employees to fully
understand the claims process and the Act's requirements. Training
includes roles and responsibilities, claims processes and operations,
cultural awareness, statutes and regulations, customer service and
customer experience, risk reduction practices, coordination with State
agencies, and other related trainings.
Comment: One commenter provided a recent experience with a field
inspector that inspected their homestead for potential disaster relief
and stated that ``the person you chose to do this inspection is an
incompetent at such work as this.'' The commenter suggested FEMA be
very careful in their hiring practices and contracting of third parties
for claims office operations to prevent ``such outrageous incidents''
as described in their experience.
FEMA Response: FEMA appreciates the commenter's honesty and
willingness to share their experience. FEMA intends to staff the Claims
Office with local hires that can better understand the unique
political, economic, and cultural institutions of the communities
impacted by the Fire, as well as claimants seeking compensation under
the Act, in addition to experienced contract employees. As explained
above, FEMA plans to provide training for all Claims Office employees
to fully understand the claims process and the Act's requirements.
Comment: One commenter provided a memorandum with a seven-step
process on how the Claims Office can develop a mindset to get to yes
and serve clients effectively. This individual also submitted comments
on the culture of the Claims Office. The comment ``focus[ed] on a
seven-step plan to help this program transform its approach as it
processes the regulation comments, from a denial-based approach to a
positive, effective process for those it is meant to serve.''
FEMA Response: FEMA appreciates the commenter's detailed
suggestions. As pointed out by the commenter, the Claims Office process
will be different from FEMA's disaster relief programs, and it will be
important for employees of the Claims Office to acknowledge and embrace
those differences in process and implementation efforts. Based on the
comments received, FEMA established a set of guiding principles for the
Claims Office culture needed to deliver this mission.\25\ FEMA will
work to ensure a full understanding by the entire Claims Office staff
of the claims process and the Act's requirements and the importance of
focusing on the needs of claimants and communities impacted by the
Fire. With that in mind, the Claims Office provides each claimant with
an assigned Navigator. The Claims Navigator works directly with the
claimant and Claims Reviewers, asking questions, helping claimants
obtain documentation, helping claimants complete the Notice of Loss and
Proof of Loss, and shepherding the claimant through the process to
better ensure that the claimant is fully compensated for their loss.
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\25\ See https://www.fema.gov/hermits-peak.
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The Claims Office has also established an independent Claims Office
Advocate. The Claims Office Advocate responds to, manages, and
recommends solutions to issues with the process itself, whether those
issues be with the Claims Navigators and Claims Reviewers, the claims
process itself, or how the process is being implemented. The Claims
Office Advocate is responsible for identifying issues with the claims
process and addressing those issues on the claimant's behalf. The
Claims Office Advocate serves as an additional resource to claimants by
helping to improve their understanding of the claims process and
providing guidance about the steps in that process and the associated
requirements.
The Claims Office Advocate also identifies issues, risks, and
opportunities for improvement and develops recommendations for claims
process enhancements that will address these and deliver a better,
fairer claims process that is accessible to all claimants. While the
Claims Navigators and Claims Reviewers report to a Team Lead, the
Advocate reports directly to the Director of the Claims Office. As
such, the Claims Office Advocate has a direct line of communication
with the Director of the Claims Office, and the Advocate is positioned
to advocate on behalf of claimants and to make recommendations for
enhancements to the claims process.
Comment: One commenter suggested that State Case Managers be
integrated into the program and trained as Navigators.
FEMA Response: FEMA anticipates that Claims Navigators will provide
the assistance envisioned by the commenter and additional staffing
outside of the Claims Office will not be required. However, the Claims
Office is implementing procedures to coordinate with the State of New
Mexico as appropriate.
Comment: One commenter asked how many claims would be covered by
each Claims Reviewer.
FEMA Response: FEMA does not have an estimate on the volume of
claims per Claims Reviewer at this time. FEMA anticipates Claims
Reviewers will have a workload balance reflective of both
[[Page 59738]]
claim volume and claim complexity to ensure claimants' needs are
effectively met by the Claims Office.
3. Comments on the Use of Funds
Comment: Commenters sought clarification on how FEMA would use the
funds provided by the Act between administrative costs and claims
payments to claimants. Some commenters wrote about experiences with
administrative costs with one commenter stating that ``to provide a
trailer for a family it can cost 300k with much of this money going to
pay FEMA workers and for admin costs.'' Commenters asked what the
administrative costs would be and how much of the available
appropriated funding would go to administrative costs and how much
funding would go to claimants. One commenter wrote ``how much of the
available funds will go to administration and how much will go to
victims?''. Another commenter stated, ``I wonder what the
administrative costs are if they are going to come out of this $2.5
billion of it is gone before any money goes to anybody in this room and
maybe that's necessary.''
FEMA Response: Section 104(a)(2)(C)(i) of the Act states that ``The
Office shall be funded from funds made available to the Administrator
for carrying out this section.'' FEMA is required to use the funding
provided under the Act for the administrative costs to run the Claims
Office. FEMA has a general obligation to spend Federal funds wisely and
Congress required FEMA to provide quarterly reports to the Committee on
Appropriations of the Senate and House of Representatives on the
obligations and expenditures of the funds made available under the
Act.\26\ Congress also directed a portion of the funding to the
Department of Homeland Security Inspector General to fund program
oversight. FEMA intends to comply with this Congressional reporting
requirement regarding the use of funding under the Act. This
transparency will help allay the commenters' concerns about the total
administrative costs for the Claims Office.
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\26\ Public Law 117-180, Division A, Section 136 (2022).
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Comment: Commenters suggested FEMA provide transparency in how the
funds appropriated under the Act were spent. One commenter suggested
that information about how the funds were being spent be shared
publicly in real time via an online dashboard. Such a tool would help
prevent internal fraud and help FEMA identify external fraud and
program favoritism while also allowing everyone the ability to be
alerted to something suspicious happening with funds. Another commenter
agreed, recommending that FEMA allow the public to review the overall
project budget and other transparency related to fiscal accountability.
One commenter wrote that ``FEMA should provide full transparency of
cost, budget, expenditures, etc. including administrative costs,
operational costs, total payouts, total denials, etc. to not only to
the [Department of Homeland Security's Office of the Inspector General]
but also to the State--without violation of the Privacy Act.''
FEMA Response: As explained above, Congress required FEMA to
provide quarterly reports to the Committee on Appropriations of the
Senate and House of Representatives on the obligations and expenditures
of the funds made available under the Act.\27\ FEMA intends to comply
with this Congressional reporting requirement regarding the use of
funding under the Act. This transparency will help allay the
commenters' concerns about the total administrative costs for the
Claims Office. In addition, the Claims Office Advocate will be creating
easily understandable reports with program metrics to be shared on
https://www.fema.gov/hermits-peak and through other communications
channels.
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\27\ Public Law 117-180, Division A, Section 136 (2022).
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Comment: Commenters also provided recommendations on ways to use
and/or distribute the funding appropriated. One commenter suggested
funding be dedicated to the reintroduction of beavers to the region to
help repair the land.
FEMA Response: FEMA does not have the authority under the Act to
dedicate funding as recommended by the commenter as claimants must
submit claims demonstrating their injuries resulting from the Fire to
obtain compensation. Funding for activities like reintroduction of
beavers may be eligible as a nature-based solution to reduce the
heightened risk of wildfire, flood, or other natural disaster and
claimants seeking compensation must demonstrate that this claim is
clearly tied to an increased risk that resulted from the Fires.
Comment: A commenter wrote suggesting that FEMA ``create a grid
system on a map with a baseline payment scale using at least 1.5
billion dollars to be distributed equally where the [F]ire/flooding/
damaged areas are the epicenter with the highest baseline ($250,000)
payment and the areas with lesser damage (such as minimal property
damage, i.e., smoke damage or food loss) still receive baseline funding
at a lesser significant (over $2,500) amount.'' The commenter wrote
that none of the funding provided should be taxable income. The
commenter stated this proposal is to ``ensure that all landowners in
the affected areas get a baseline of funding.'' The commenter also
suggested ``[$]2 billion in funding go to the public entities to
prevent future disasters such as monies allocated to public safety.''
The commenter suggested ``another [$]1 billion to public utility
infrastructure and public communications.'' The commenter wrote that
the rest of the funding could be used for ``paying out and making
individuals with losses whole and covering gaps missed in my proposed
comments above.''
FEMA Response: FEMA is authorized under the Act to pay claimants
for actual compensatory damages for injuries resulting from the
Fire.\28\ FEMA does not have the authority under the Act to establish
the type of funding system recommended by the commenter as claimants
must submit claims demonstrating their injuries resulting from the Fire
to obtain compensation. FEMA further did not receive sufficient funding
under the Act to implement the payment plan proposed by the commenter.
FEMA notes that the Act at section 104((h)(4) provides that the value
of compensation provided under the Act ``shall not be considered income
or resources for any purpose under any Federal, State, or local laws,
including laws relating to taxation . . .'' FEMA cannot advise
individual claimants on their individual tax obligations, however, and
encourages claimants to consult with their tax advisers if they have
questions related to tax obligations.
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\28\ See Sections 102(b) and 104(c) of the Act.
---------------------------------------------------------------------------
Comment: A commenter asked whether the funding provided under the
Act covered the costs for the matching funds requirement waiver in
section 104(k) of the Act or if the funding under the Act was
exclusively reserved for claims.
FEMA Response: The Act does not authorize FEMA to utilize the funds
appropriated to cover the matching funds requirement waiver in section
104(k). These additional matching funds to meet the 100 percent cost
share will have to be provided from the funding provided for those
programs generally, not the funding provided by the Act.
[[Page 59739]]
Comment: Commenters suggested ways in which the funding
appropriated under the Act should not be used. Commenters suggested
administrative costs be paid out of a separate budget rather than the
appropriated funding. One commenter suggested administrative costs
should be paid for out of a separate FEMA budget.
FEMA Response: As explained above, section 104(a)(2)(C)(i) requires
FEMA to use the funding made available under the Act to fund the Claims
Office. FEMA is required to follow the Act's requirement to fund the
Claims Office from the Act's funding.
Comment: One commenter requested FEMA Claims Reviewers tour the
entire burn scar area and not to use the funding appropriated for that
tour.
FEMA Response: FEMA appreciates the request, the value placed in
seeing the devastation resulting from the Fire first-hand, and the need
for Claims Office staff to fully comprehend the extent of injuries
suffered. FEMA plans to provide training to all Claims Office staff
that will include extensive background information on the Fire and its
impacts. FEMA believes that Claims Reviewers should be aware of the
devastation to help comprehend the losses and spend their time focused
on assisting claimants with their claims, not taking tours of the
entire burn scar area.
Comment: Commenters stated the funding appropriated was not
sufficient to fully compensate claimants. One commenter suggested the
total $3.9 billion appropriated will not cover the cost of recovery
from the level of destruction caused by the Fire. This commenter stated
more destruction was guaranteed from the Fire and argued it would be
worse if people rebuilt in the wrong places before the land stability
is restored. Other commenters agreed that the amount appropriated was
not sufficient to cover the damages and one of those commenters stated
that the lack of sufficient funding would result in denying people
compensation.
FEMA Response: The Act and subsequent legislation appropriated
$3.95 billion in funding. FEMA is obligated to provide quarterly
reports to Congress on the use of funds under the Act and these reports
ensure transparency of the use of funds and the sufficiency of funding
under the Act.
Comment: To combat fraud, one commenter recommended FEMA review
fire-affected county audits performed by the New Mexico State Attorney
General's Office to anticipate where and how acts of fraud will occur.
Another commenter stated in their comment the New Mexico State Auditor
performs these audits, providing links to recent reports.
FEMA Response: FEMA appreciates the concerns regarding potential
fraud and is incorporating fraud awareness and detection training into
the comprehensive training provided to all Claims Office staff. FEMA
notes that Congress provided appropriations for the Department of
Homeland Security's Office of the Inspector General for oversight of
activities authorized by the Act.\29\
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\29\ See Public Law 117-180, Division A, Section 136 (2022).
---------------------------------------------------------------------------
Comment: A commenter stated that insurance companies would demand
compensation for the amounts they have paid or will pay to insured
claimants.
FEMA Response: Insurance companies are eligible for compensation as
injured persons under the Act. Section 104(d)(1)(A)(ii) of the Act
requires FEMA to place priority on claims submitted by injured parties
that are not insurance companies seeking payment as subrogees. Section
296.13 of the IFR requires subrogees to file their Notice of Loss after
they have made all payments entitled to the injured person for Fire-
related injuries under the terms of the insurance policy. As explained
below, FEMA is amending Sec. 296.13 in the Final Rule to add language
from the Act specifically to clarify the claims prioritization
required. Further, Sec. 296.21(f) of the regulation requires FEMA to
compensate injured persons only for damages not paid and that will not
be paid by insurance companies. As explained above, these provisions,
in addition to the changes made to Sec. 296.13 in this Final Rule,
will help ensure that the compensation is first made available to
injured persons that are not insurance companies.
Comment: Finally, commenters suggested other funds outside of those
appropriated be used to pay for compensation under the Act. One
commenter stated that FEMA ``not use taxpayer dollars to compensate
victims, but instead seize the assets of the oil and gas companies
whose industry has created global warming and red flag conditions all
over the country and use those assets to compensate victims.'' One
commenter suggested those responsible for causing the Fire should
donate their retirement funds to those impacted by the Fire.
FEMA Response: Congress appropriated $3.95 billion for
implementation of the Act and FEMA is required to use that appropriated
funding to implement the Act and pay claimants actual compensatory
damages for injuries resulting from the Fire.
4. Comments on Sec. 296.5 Overview of the Claims Process
Comment: One commenter suggested FEMA set up remote assistance
given COVID, RSV, and influenza infection concerns. Another commenter
stated that claimants should be allowed to meet remotely with claims
reviewers as it was unreasonable for FEMA to expect victims to travel
long distances. One commenter suggested FEMA set up mobile claim
offices in southwest Colfax County and south Taos County. One commenter
stated that ``60 to 70 percent of the people up in Mora [County] are
Hispanic and a lot of people don't even have access to computers.'' The
commenter suggested FEMA ``try to get somebody who can speak Spanish to
go with these people because that's what we need.'' Commenters also
suggested FEMA get out into the community as part of the claims process
and outreach to the community.
FEMA Response: FEMA plans to offer opportunities for one-on-one
engagement through Claims Reviewers who will work to engage claimants
in ways to meet their needs whether in person or via remote technology.
Claims Office Navigators are trained to accommodate the needs of
claimants and are prepared to meet them in the satellite Claims Offices
in Las Vegas, Mora, and Santa Fe, New Mexico at claimants' homes or
offices, or any place convenient to claimants, taking into account
health and safety concerns. Note that FEMA will provide services both
at set office locations for the Claims Office, as well as pop-up
offices that will rotate through communities and locations in the
affected area, to reduce travel burdens on claimants. The pop-up
offices will be staffed by Claims Navigators, who can assist claimants
in completing and submitting Notices of Loss, providing claims updates,
and answering general questions. FEMA recognizes the importance of
having claims staff, who interact with claimants and help facilitate
the claims process, that are able to speak both Spanish and English.
FEMA locally hired bilingual speakers to ensure that claims staff can
communicate with claimants in their preferred language.
Comment: Several commenters wrote that attorneys should be notified
during the process when claimants are represented by counsel.
FEMA Response: With an appropriate Privacy Act waiver, FEMA will
ensure contact is made with both claimants and their attorneys. The
Claims Office has included consent language necessary to comply with
the Privacy Act in the standard Notice of Loss form. The
[[Page 59740]]
consent is needed for an attorney or other third-party representative
to have access to a claimant's privacy information maintained in the
Claims Office system of records. In addition to providing basic
information about the claimant and representative, the claimant must
sign the consent section if they choose to be represented by a third
party.
Comment: One commenter wrote that information on claim status and
timeline to receive payment should also be easily accessible at the
claimant level. Two commenters suggested FEMA provide an online method
of checking the status of their claim and hard copies of documents for
those claimants without internet access.
FEMA Response: FEMA is currently developing an online claims system
that will provide claimants with real time access to claim status in
addition to providing status information by phone or mail (electronic
and/or physical). FEMA anticipates this system will be rolled out in
the near future and will provide outreach to the community when the
system is available for use to help claimants understand and utilize
the system.
Comment: One commenter asked that State Case Managers be integrated
into the program and trained as Navigators to serve as a single point
of contact to help claimants throughout the process.
FEMA Response: As explained above, FEMA anticipates that Claims
Navigators will provide the assistance envisioned by the commenter and
additional staffing outside of the Claims Office will not be required.
In the event a claimant has unmet needs or otherwise requests a
Disaster Case Manager, the standard Notice of Loss form includes a
section for the claimant to consent to sharing claim data maintained in
the system of record with Disaster Case Managers.
Comment: Several commenters suggested that FEMA streamline the
claims process. One method for streamlining the process suggested by
commenters related to access to available Federal programs. Commenters
suggested that FEMA streamline access to available Federal programs
and, in addition to funds appropriated under the Act, to utilize other
Federal funding opportunities when and where available.
FEMA Response: FEMA agrees with this suggestion and is coordinating
with other Federal agencies to ensure data sharing and better
communication between programs. FEMA has engaged with and continues to
engage with the Small Business Administration, the Department of
Agriculture, and other Federal agencies to help facilitate coordination
of the assistance available to claimants and the impacted communities.
Consistent with the Act's requirements in section 104(g), FEMA is
consulting with other Federal agencies, and State, local, and Tribal
authorities to ensure the efficient administration of the claims
process and provide for local concerns. To preserve funding from the
Hermit's Peak/Calf Canyon appropriations to pay eligible claims, FEMA
requires applicants eligible for FEMA's Public Assistance program to
exhaust available public assistance funds before seeking compensation
from the Claims Office.
Comment: Another suggestion involved preparing formulas for
compensation. One commenter asked how FEMA would compensate claimants
for a variety of damages and requested transparency and a formula that
should be shared with claimants. Another commenter suggested that FEMA
move forward with developing estimates to help reduce the wait for
compensation. One commenter asked how claims would be made equitable
and if there would be standard reimbursement rates for similar claims.
Two commenters suggested monetary thresholds be established to ensure
time and effort are proportionate to the claim values being made. As
one of the commenters explained, there are thresholds throughout many
other Federal programs where the burden of proof is significantly less
based on the overall claim value. Another commenter, however, stated
that ``no two claims will be alike, and the process cannot be developed
or allowed to become an assembly line approach.''
FEMA Response: FEMA recognizes the need for an efficient,
streamlined process through the use of a damage calculation formula,
while also balancing the unique types of claims being presented under
the Act and ensuring claimants are paid actual compensatory damage as
required by the Act. FEMA anticipates developing some damage
calculation formulas, such as providing for a certain dollar amount of
compensation per acre of land damaged, so that claimants have the
option to leverage one of those formulas or present their individual
claim and request for specific damage amounts. FEMA believes this
optionality will best balance the need for an efficient process with
the individual needs of claimants, as claimants will be able to make
the choice in presenting their claim for compensation.
5. Comments on Sec. 296.10 Filing a Claim Under the Act
Comment: One commenter suggested FEMA allow claimants to file a
Notice of Loss in person consistent with the IFR. Another commenter
stated that FEMA should allow claimants to file claims in person, as
well as via mail, email, and a web-based portal system to ensure
accessibility. A commenter suggested FEMA allow for applications,
correspondence, and supporting documentation to be exchanged by postal
mail. This commenter also recommended FEMA create centralized locations
where northern New Mexicans can physically go to access the electronic
application and receive assistance in filling out the applications in
multiple languages so that the application and supporting documentation
can be submitted in a timely manner.
FEMA Response: FEMA appreciates these suggestions. FEMA does not
believe changes to the Final Rule are necessary to implement these
suggestions, but rather that as the Claims Office continues to expand
operations, the information would be made available to the public via
https://www.fema.gov/hermits-peak and other resources including direct
community outreach. FEMA is currently accepting Notice of Loss forms in
person at the claim's office locations in Santa Fe, Mora, and Las
Vegas, New Mexico and those office addresses can be found at https://www.fema.gov/hermits-peak. FEMA will provide services both at set
office locations for the Claims Offices, as well as pop-up offices that
will rotate through communities and locations in the affected area, to
reduce travel burdens on claimants. The pop-up offices will be staffed
by Claims Navigators, who can assist claimants in completing and
submitting Notices of Loss, providing claims updates, and answering
general questions.
6. Comments on Sec. 296.11 Deadlines
Comment: Several comments were received regarding the two-year
deadline for filing a claim detailed in Sec. 296.11 of the IFR, with
most commenters stating that a two-year period to file a claim was
insufficient. Commenters suggested extending the deadline based on an
inability to determine damages because of the current inability to
access their property, the potential for future impacts from flooding,
and/or the long-term health and environmental effects given the size
and scope of the Fire. A commenter suggested extending the deadline to
three years for mitigation
[[Page 59741]]
efforts. Some commenters asked FEMA to be flexible in granting
extensions. One commenter asked that extensions be granted in cases
where knowledge of damages, recovery efforts, etc. are hindered by
cooperation with government agencies.
FEMA Response: Some deadlines in the rule are beyond FEMA's
control. Section 104(b) of the Act requires claimants submit their
Notice of Loss no later than November 14, 2024, two years from the date
the IFR was promulgated. FEMA was required by the Act to publish the
IFR within 45 days of the Act's passage and the IFR was published 45
days after the Act's passage.\30\ FEMA has built in extensions of the
claim processing timeline after receipt of the Notice of Loss for good
cause, recognizing the realities of the Fire's impact. Sections 296.34
and 296.35 establish a process for notifying FEMA of injuries that are
not referenced in the initial Notice of Loss. Whether a claimant tells
FEMA about an injury in the initial Notice of Loss or an amendment
under Sec. 296.34, FEMA must know about the injury by November 14,
2024. For heightened risk reduction efforts, a claimant must include
the claim in their Notice of Loss by November 14, 2024, or an amended
Notice of Loss filed no later than November 14, 2025. See Sec.
296.21(e)(5).
---------------------------------------------------------------------------
\30\ 87 FR 68085 (Nov. 14, 2023).
---------------------------------------------------------------------------
Comment: One commenter indicated the two-year period did not end on
November 14, 2024, because the Final Rule had not been promulgated and
it would not be promulgated until 60 days after filing in the Federal
Register.
FEMA Response: FEMA disagrees with this characterization of the
two-year period and rule promulgation. Specifically, Section 104(f)(1)
of the Act requires FEMA to ``promulgate and publish in the Federal
Register interim final regulations for the processing and payment of
claims under this Act.'' Publication of an IFR constitutes promulgation
of a rule, as the rule was effective upon publication, and comments
were requested post-promulgation. This sequence of events, publication
of the interim final rule, followed by a public comment period,
occurred here. Consistent with the Act's purpose at section 102(b), the
immediate effective date of the rule ensures FEMA was able to begin
accepting and processing claims on the date of publication.
7. Comments on Sec. 296.12 Election of Remedies
Comment: Commenters sought clarifications about how the election of
remedies worked. One commenter asked what would happen if the claimant
did not accept the final determination by the Claims Office. Another
commenter asked if people did not want to go through FEMA, whether they
could sue and if there were multiple owners of a single property
whether some could go through FEMA and also sue.
FEMA Response: As explained in the IFR's preamble, the Act provides
that an injured person who accepts an award under the Act waives the
right to pursue any claims arising out of or relating to the same
subject matter under the Federal Tort Claims Act (FTCA) or a civil
lawsuit. Similarly, those claimants who accept an award under the FTCA
or a civil lawsuit waive the right to pursue claims under the Act.
Until the final award payment is accepted, the claimant may pursue any
and/or all of the options available. This flexibility allows injured
persons to pursue different avenues of compensation until a final award
is accepted. The IFR language states that an injured person who accepts
an award under the Act or through a FTCA or civil action waives their
right to pursue all claims for injuries arising out of or related to
the same subject matter. To ensure this is clear in the Final Rule,
FEMA is revising paragraphs Sec. 296.12(a) and (b) to clarify that the
injured person only waives the right to pursue all claims upon
acceptance of a final award through the Act, the FTCA, or through a
civil action.
Comment: A commenter stated that a claimant's right to civil action
or other redress should not be waived or limited until a final payment
has been agreed upon with FEMA, and that it must be clear to claimants
at what point(s) in the process they are waiving their rights to
further legal action, as well as how they can retain their right to
further legal action for different types of subject matter. Another
commenter agreed and recommended FEMA clarify that the waiver of the
right to pursue claims under the FTCA or a civil action only applies to
final awards, and when the claimant has signed a Release and
Certification Form.
FEMA Response: FEMA agrees and as explained above, is revising
Sec. 296.12(a) and (b) in the Final Rule to clarify that the injured
person only waives the right to pursue all claims upon acceptance of a
final award.
Comment: One commenter wrote on the feasibility of waiving future
claims given the extent of damages, losses, and expenses may not be
fully known at the time of the award. The commenter suggested a lump
sum payment of 15 percent of all injury, damages, losses, and expenses
be added to each claim to cover these future unknown items.
FEMA Response: FEMA understands the concerns with waiving rights to
pursue further claims after accepting a final award. The Act at section
104(b) requires claims to be submitted within two years and requires a
waiver of rights to pursue further claims upon acceptance of a final
award. Claims related to future losses as a result of the Fire would
need to be made through other remedies as the Act sets a two-year
limitation for claims under the Act. FEMA is unable to pay lump sum
payments to cover future unknown injuries, as unknown injuries are
speculative in nature and the Act requires FEMA to pay for actual
compensatory damages.
Comment: Commenters stated the Federal government committed crimes
and that the Act did not preclude criminal charges. These commenters
recommended allowing claimants the ability to apply for crime victim
compensation.
FEMA Response: As explained above, the Act sets forth means for
claimants to seek compensation for injuries suffered as a result of the
Fire. Section 104(h) of the Act offers claimants three options to seek
compensation from the Federal government for injuries resulting from
the Fire: (1) a claim under the Act; (2) a FTCA claim or civil action;
or (3) an authorized civil action under any other provision of law. The
Act does not expand the scope of the FTCA or other civil actions under
any other provision of law. The Act does not provide for criminal
prosecution or other remedies. The Act also does not provide for crime
victim compensation. Rather, section 104(c)(3) of the Act provides for
payment of actual compensatory damages. FEMA is not authorized under
the Act to pay additional compensation beyond actual compensatory
damages.
Comment: One commenter stated the Federal government ``should not
be allowed to dictate limits on compensation to victims they violated.
The victims should be allowed to state what will make them individually
whole and what will be required for their healing for the next several
years, or however long it takes, to recover from the offending actions
as only the victim will know what that is and what it will take for
them to heal.'' The commenter further stated that claimants should not
be required to use other Federal programs.
FEMA Response: As explained above, Section 104(h) of the Act offers
claimants three options to seek compensation from the Federal
government for injuries resulting from
[[Page 59742]]
the Fire: (1) a claim under the Act; (2) a FTCA claim or civil action;
or (3) an authorized civil action under any other provision of law.
Claimants may choose among these remedies to address their personal
circumstances and needs, taking into account timely resolution and
costs of each option. Only upon acceptance of a final compensation
award under one of these options will claimants release the Federal
government from further claims arising out of or relating to the same
subject matter. The Act further requires in section 104(d)(1)(B) that
FEMA make determinations as to whether the claimant is an injured
person under the Act; the injury resulted from the Fire, whether the
claimant is otherwise eligible to receive payment, whether sufficient
funds are available for payment, and the amount to be allowed and paid
under the Act. The Act only authorizes FEMA to make these
determinations and sets the framework for how FEMA must make them. The
Act does not authorize FEMA to honor and accept all requests for
compensation.
8. Comments on Sec. 296.13 Subrogation
Comment: Three commenters suggested FEMA delete references to
insurance companies in the regulation. One commenter stated that
insurance companies will demand compensation for the amounts they have
paid or will pay to insured claimants and found that to be fair.
However, the commenter stated that greed may influence the insurers'
claims and those claims would then negatively affect claimant
compensation. Two other commenters stated that this section should be
revised to reflect the Act's prioritization of injured persons over
subrogees.
FEMA Response: As explained above, insurance companies are injured
persons under the Act. FEMA does not believe it is appropriate to
delete references to insurance companies in the regulation, as the
Act's references to them requires FEMA to discuss them in the
regulation. Section 104(d)(1)(A)(ii) requires FEMA to place priority on
claims submitted by injured parties that are not insurance companies
seeking payment as subrogees. Section 296.13 of the IFR requires
subrogees to file their Notice of Loss after they have made all
payments entitled to the injured person for Fire-related injuries under
the terms of the insurance policy. The IFR does not, however, include
the prioritization language from the Act. Given the confusion and
concerns with this section, FEMA is amending Sec. 296.13 to
specifically clarify the prioritization required under the Act in the
Final Rule by requiring that subrogation claims from insurance
companies will be paid only after paying claims submitted by injured
persons that are not insurance companies seeking payment as subrogees.
9. Comments on Sec. 296.14 Assignments
Comment: Several commenters stated that assignment of rights could
not be prohibited. Commenters stated that New Mexico law allowed for
assignment of rights. A commenter stated that ``New Mexico law allows
lawyers to recover their fees by way of liens, and FEMA regulations
should not seek to interfere with the lawyer and client relationship
nor with the ability of the claimant's lawyer to recover their fee.''
The commenter also wrote that the FTCA has no prohibition on
assignments.
FEMA Response: FEMA disagrees that the assignment of rights cannot
be prohibited. Federal law generally prohibits assignment of claims
against the Federal government. The Assignment of Claims Act prohibits
the assignment of a claim against the Federal government unless the
claim is allowed, the amount of the claim is decided, and a warrant for
payment of the claim has been issued.\31\ The Assignment of Claims Act
requires that the assignment must specify the warrant and the
assignment must be made freely and attested to by two witnesses.\32\
The person making the assignment must acknowledge it before an official
who may acknowledge a deed, that official must certify the assignment,
and the certificate issued by the official must state that the official
explained the assignment when it was acknowledged.\33\ Thus, FEMA can
only allow for an assignment of a claim after the Authorized Official's
Determination has been issued and accepted by the claimant and the
claimant has completed the other steps in the process required under
the Federal law to have the assignment reference FEMA's award
determination. The process includes being attested to by two witnesses
and acknowledged by an official who will certify the assignment and
their explanation of the assignment to the claimant. This extensive
process is contrary to the authorizing Act's purpose and the
requirements placed on FEMA by the Act to compensate victims of the
Fire and expeditiously settle claims for those injured. Prohibiting
assignment of claims under the Act is consistent with the purpose of
the Act and other Federal law. The Final Rule will not include
amendments to the assignment of rights. FEMA notes that assignments are
generally not allowed under the Federal Tort Claims Act.\34\ Also, to
the extent that a lien does not involve an assignment, it is a question
of State law to be resolved between the lien holder and the claimant.
---------------------------------------------------------------------------
\31\ 31 U.S.C. 3727(b).
\32\ Id.
\33\ Id.
\34\ See United States v. Shannon, 342 U.S. 288 (1952).
---------------------------------------------------------------------------
Comment: Three commenters suggested that assignment be allowed in
instances of death, with one other commenter also requesting a process
by which compensation can be provided to surviving heirs if a claimant
passes away. These commenters stated that if the claim is legitimate,
the owner's right to assign for a variety of reasons should not be
limited. Another commenter suggested provisions be made for dependent
family members and property co-owners to receive full compensation in
situations where a claimant dies.
FEMA Response: Claimants who pass away during the claims process
can continue to pursue claims through their surviving heirs under
applicable New Mexico estate law.\35\ An assignment of rights is not
required for surviving heirs to pursue a claim under the Act. FEMA
notes that some claimants may wish to have family members pursue the
claim on their behalf and some commenters during public meetings stated
they were pursuing claims on behalf of relatives. The current
regulatory text allows a claimant to authorize a relative or other
third party to have access to claims information and to represent them
on the claim by executing the appropriate section in the Notice of
Loss. The authority to represent a claimant does not require an
assignment of benefits.
---------------------------------------------------------------------------
\35\ See Uniform Probate Code, Chapter 45, New Mexico Statutes
Annotated (2021).
---------------------------------------------------------------------------
Comment: A commenter stated FEMA did not have the authority under
the Act or New Mexico law to restrict assignment of property, stating
claimants should have the right to sell their property and the new
property owner should be able to recover damages to the property as
well as family assignment in case of death. Another commenter requested
that they be able to assign their claim if they want to sell their
property or have someone inherit their claim.
FEMA Response: FEMA disagrees that the assignment of rights cannot
be prohibited. As explained above, Federal law generally prohibits
assignment of claims against the Federal government.\36\ The extensive
process required to assign claims against the
[[Page 59743]]
Federal government is contrary to the authorizing Act's purpose and the
requirements placed on FEMA by the Act to compensate victims of the
Fire and expeditiously settle claims for those injured. Prohibiting
assignment of claims under the Act is consistent with the purpose of
the Act and other Federal law and is not amending the Final Rule. The
Final Rule will not include amendments to the assignment of rights.
---------------------------------------------------------------------------
\36\ 31 U.S.C. 3727(b).
---------------------------------------------------------------------------
Comment: One commenter said that claimants should have the ability
to assign rights to family members or friends but stated ``assignment
of rights cannot be to the detriment of the individual signing it away
or to the benefit of the person who is trying to get it.'' This
commenter further stated that they ``want to see representation for
people who need it but not necessarily assign the rights over.''
FEMA Response: FEMA appreciates the commenter's concerns and
believes that assigning rights in the context of a claim under the Act
could result in unscrupulous activity. The extensive process required
by the Assignment of Claims Act to assign a claim against the Federal
government was put in place for several reasons, one of which was to
reduce concerns about predatory assignments.\37\ FEMA seeks to avoid
situations where predatory assignments could occur. Consistent with
Federal law and the reasons stated above, FEMA is not amending the
Final Rule.
---------------------------------------------------------------------------
\37\ See generally Spofford v. Kirk, 97 U.S. 484, 489 (1878)
``the question remains, whether the act of Congress was not intended
to render all claims against the government inalienable alike in law
and in equity, for every purpose, and between all parties. The
intention of Congress must be discovered in the act itself. It was
entitled `An Act to prevent frauds upon the treasury of the United
States.' It may be assumed, therefore, that such was its purpose.
What the frauds were against which it was intended to set up a
guard, and how they might be perpetrated, nothing in the statute
informs us. We can only infer from its provisions what the frauds
and mischiefs had been, or were apprehended, which led to its
enactment.''
---------------------------------------------------------------------------
Comment: A commenter wrote that FEMA should modify this section to
allow the State of New Mexico to file a claim on behalf of residents
solely for private property debris removal work not eligible for
Category A/B reimbursements under the Public Assistance Program.
Another commenter wrote of a shortage of available contract resources
impacting the cost and timing of rebuilding efforts and recommending
FEMA allow individuals to permit State agencies to act on their behalf
to address debris removal and damage through a opt in assignment. Other
commenters stated concerns with the effective use of funds for debris
removal generally.
FEMA Response: FEMA recognizes the challenges presented with debris
removal on private property and the concerns with ensuring funding is
effectively utilized under the Act. Under the Act, the Claims Office is
authorized to compensate injured persons for their injuries resulting
from the Fire. The Office recognizes that due to the timing of debris
removal, as well as other elements of a claim, a claimant may require
funds quickly and is prepared to make partial payments to claimants for
severable elements of a claim, including debris removal, allowing
claimants to choose who clears the debris.
F. Comments on Sec. 296.21(a) Allowable Damages
1. Comments on Allowable Damages Generally
Comment: Several commenters suggested FEMA cover specific types of
damages and detail them further in the regulation. Commenters
frequently requested that the claims process ``make them whole.'' One
commenter often recited specific types of damages for which FEMA should
be prepared to compensate (to make whole) to include those damages they
considered to be ``immeasurable'' or ``unseen.'' One commenter stated
that ``FEMA must compensate injured victims for immediately measurable
losses (i.e. destroyed homes, buildings and their contents, property
infrastructures, forestland resources, croplands and crops, and
domestic water conveyances and storage facilities, etc.) and for
intangible losses as well (i.e. destroyed sentimental items which can
never be replaced, mental and emotional tolls regardless of the extent
of professional treatment received, and future potential value of
everything damaged and lost).'' One commenter stated that, in addition
to damage caused as a result of the Fire, ``there is more damage
continuing to happen to injured victims each day on a level which
cannot be seen, measured, or described by any metric'' and further that
the Act's ``reconciliations should go far beyond mere recovery to day-
before-the-fire life conditions for every injured victim because the
damage runs far deeper and much wider than what actually burned in the
fire. It has severely, irreversibly damaged injured victims' souls, and
they deserve to be compensated for that too.''
FEMA Response: FEMA recognizes the significant injuries suffered by
claimants and the long-term recovery needed for the communities
impacted by the Fire. The Act at section 104(c)(3)(A) limits payment to
``actual compensatory damages measured by injuries suffered.'' Section
104(d)(4) of the Act limits allowable damages to uncompensated damages
for loss of property, business loss, and financial loss; and therefore,
limits the actual compensatory damages FEMA may provide to economic
damages. This limitation of the Act with respect to allowable damages
excludes non-economic damages such as pain and suffering. FEMA
recognizes that making people whole for the full scope of loss after a
devastating fire may not be possible. The Act authorizes payment of
damages, and money cannot restore the full array of the human
experience. Section 296.21(e)(3) does authorize payment for out-of-
pocket mental health treatment expenses, which can help alleviate the
emotional suffering and enable affected individuals to recover. Where
New Mexico law allows pain and suffering and non-economic damages in
limited circumstances primarily involving personal injuries, a claimant
that suffered personal injury may choose to pursue a judicial remedy
against the United States Forest Service under the Federal Tort Claims
Act or other civil law. The Act provides the claimant with considerable
flexibility and allows the claimant to opt out of the Claims Office
option and into litigation at any time up until acceptance of a final
offer.
2. Comments on Non-Economic Damages
Several commenters wrote that non-economic damages must be
considered allowable damages.
Comment: One commenter wrote that claimants were entitled to claims
for nuisance and trespass for fire damage to their property under New
Mexico law. Another commenter expanded on the nuisance theory stating
``A wildfire likely qualifies [as] a private or mixed public/private
nuisance, and therefore is actionable either way, at least for those
who suffered damage to their real or personal property. Noneconomic
damages are recoverable for a nuisance claim for `annoyance,
discomfort, and inconvenience.' Notably, a plaintiff need not prove
economic damages (e.g., a diminution in property value) to recover
damages for `annoyance, discomfort, and inconvenience.' ''
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for nuisance and trespass.
Comment: A different commenter also noted the potential trespass
claim, writing ``A defendant commits common-law trespass in New Mexico
by redirecting a foreign substance onto the plaintiff's property. . . .
Under this
[[Page 59744]]
reasoning a wildfire that spreads onto a plaintiff's property would
also constitute a trespass. Although a plaintiff may recover damages
for `annoyance, discomfort, and inconvenience' caused by a private
nuisance, there is no New Mexico authority expressly allowing similar
damages on trespass claims. That said, many jurisdictions allow damages
for annoyance, discomfort, and distress proximately caused by a
trespass. Some of these distinguish between those damages and emotional
distress, while others appear to conflate the two. New Mexico would
likely strictly limit recovery to `annoyance, discomfort, and distress'
and not allow true emotional-distress damages.''
FEMA Response: The Act does not provide for non-economic damages
for nuisance and trespass.
Comment: Several commenters stated emotional distress, disturbance,
annoyance, and other non-economic losses for those with real and/or
personal property losses from the Fire regardless of whether or not the
claimant suffered a physical injury as well as those same losses for
those claimants who suffered a reasonable fear of death or serious
bodily injury as a result of their proximity to the zone of fire
danger, regardless of whether the claimant suffered a physical injury
should be compensated.
FEMA Response: The Act does not provide for non-economic damages
for emotional distress, disturbance, and annoyance.
Comment: Three commenters supported the expansion of allowable
damages to include non-economic damages, including loss of enjoyment,
loss of lifestyle, as well as mental and emotional distress,
sentimental losses, and disturbance and annoyance damages. These
commenters stated that these losses may be greater and more important
than the financial loss.
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for loss of enjoyment, loss of lifestyle, mental and
emotional distress, sentimental losses, or disturbance and enjoyment.,
3. Comments on Emotional Distress/Mental Health Damages
Some commenters stated the specific non-economic damages for which
they suggested compensation should be available under the Act.
Comment: One commenter wrote suggesting claimants could assert a
claim for intentional infliction of emotional distress, stating ``those
individuals who were within the fire's zone of danger and had a
reasonable, objective fear of death or serious bodily injury should be
able to recover non-economic, emotional distress damages as well . . .
Emotional distress is available under New Mexico law when there is a
physical injury . . . These victims suffered smoke inhalation, which is
a physical injury, and thereby makes them eligible for emotional
distress damages under New Mexico law.''
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for intentional infliction of emotional distress.
Comment: A commenter wrote that New Mexico law recognizes claims
for both negligent and intentional infliction of emotional distress.
The commenter discussed negligent infliction of emotional distress and
intentional infliction of emotional distress, stating that claimants
may be able to allege an intentional infliction of emotional distress
claim by ``showing the defendant's conduct was reckless and outrageous
enough to warrant liability.'' The commenter further noted that
claimants prevailing on either claim for infliction of emotional
distress would be entitled to damages for ``physical pain, nervousness,
grief, anxiety, worry, and shock.'' The commenter added that the
Federal government had a special relationship with claimants given
their responsibility for the control of the forests and had neglected
that special relationship, ignored its own regulations, and caused much
emotional distress.
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for negligent and intentional infliction of emotional
distress.
Comment: One commenter stated that the FTCA includes damages for
emotional distress and that New Mexico law also provided the authority
to award emotional distress damages. The commenter also stated that
disturbance and annoyance damages for the interference of real
property, which are non-economic damages, are recoverable. The
commenter also cited to Castillo v. City of Las Vegas \38\ as another
source for recoverable non-economic damages including emotional or
sentimental damages.
---------------------------------------------------------------------------
\38\ 145 N.M. 205 (2008).
---------------------------------------------------------------------------
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for emotional distress If a claimant believes they are
eligible for non-economic damages under New Mexico law and the Federal
Tort Claims Act, they may choose to file a civil claim against the
United States Forest Service in Federal court. They may file suit at
any time prior to acceptance of a final determination.
Comment: One commenter stated that FEMA should provide
reimbursement for the physical, the mental, and the emotional stress
caused by the Fire and referenced the Camp Fire in California as an
example of where these types of damages were paid.
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for physical, mental, and emotional distress. The Camp
Fire claims were adjudicated applying California law, which differs
significantly from the Hermit's Peak/Calf Canyon Fire Assistance Act.
The Camp Fire claims also involved claims asserted in a bankruptcy
proceeding against a private company, not the Federal government.
4. Comments on Other Damages
Commenters also raised compensation for future work and loss of
opportunity, future potential land use plans, sentimental value, and
loss of wildlife.
Comment: One commenter asked how claimants would be compensated for
the conservation practices of the area, including grazing and thinning
out dense forest lands and making habitat for wildlife. The commenter
also asked how claimants would be compensated for future work and loss
of opportunity for those conservation practices.
FEMA Response: Congress established the Claims Office to provide
actual compensatory damages to injured persons that suffered injury
resulting from the Fire. To the extent that individual claimants
establish injury from the Fire, the Claims Office will work with them
to identify appropriate measures of damage. The Claims Office is
prepared to work with claimants to identify and hire experts to assist
in valuing complex or unusual claims. Under the Act, other Federal
agencies with particular expertise also can be engaged to assist.
Comment: Another commenter wrote suggesting FEMA consider future
land use plans to properly compensate claimants, detailing their own
plans for development of their property impacted by the Fire.
FEMA Response: Under the Act, the Claims Office provides provide
actual compensatory damages to injured persons that suffered injury
resulting from the Fire. Some claims may be too speculative to be
eligible for tort compensation under applicable law, but all potential
claimants are encouraged to submit a Notice of Loss to enable the
Claims Office to evaluate individual claims.
[[Page 59745]]
Comment: One commenter wrote that New Mexico law allows recovery of
sentimental value for personal and real property and stated that
victims are not made whole unless they recover both the economic value
of contents, structures, and trees, plus their sentimental value.
FEMA Response: Under the Act, the Claims Office provides provide
actual compensatory damages to injured persons that suffered injury
resulting from the Fire, but not for non-economic damages. All
potential claimants are encouraged to submit a Notice of Loss to enable
the Claims Office to evaluate individual claims. The Office will work
with claimants to identify eligible economic losses and to properly
value claims. FEMA does not believe changes to the regulatory text are
required in the Final Rule for claimants to seek this type of
compensation if they can demonstrate the loss and that the loss
resulted from the Fire.
In addition to specific damages, commenters suggested FEMA provide
compensation for specific reimbursements associated with damages.
Comment: Two commenters suggested FEMA compensate for property
taxes, either to the local government or individual property owners.
One of these commenters suggested property taxes be addressed by the
New Mexico legislature, as it was for the Cerro Grande Fire, and that
Federal funds should pay State and local governments the difference in
property tax funds.
FEMA Response: Under the Act, the Claims Office provides actual
compensatory damages to injured persons that suffered injury resulting
from the fire. All potential claimants are encouraged to submit a
Notice of Loss to enable the Claims Office to evaluate individual
claims. The Office will work with claimants to identify eligible
economic losses and to properly value claims. FEMA does not believe
changes to the regulatory text are required in the Final Rule for
claimants to seek this type of compensation if they can demonstrate the
loss and that the loss resulted from the Fire.
Comment: One commenter suggested FEMA pay for indirect damage,
including damages resulting from mandatory evacuation, burn scar
flooding, and contractor damages.
FEMA Response: To the extent that damage resulted from the Fire,
damages are compensable under the regulation as written. Specifically
mandatory evacuation expenses and burn scar flooding can be compensable
if resulting from the Fire. Contractor damages may not be compensable,
but the Claims Office encourages claimants to submit all possible
losses to be evaluated. As previously explained, the regulation
provides types of actual compensatory damages that are compensable
under the Act, but that list is not all-inclusive. Claimants seeking
compensation for actual compensatory damages not specifically listed in
the regulation can still submit a claim for compensation under the Act.
Comment: Other commenters suggested that FEMA provide air and water
quality testing/monitoring.
FEMA Response: FEMA understands the concerns regarding water and
air quality and the need for testing and monitoring. These types of
expenses might be compensable as expert opinion expenses under Sec.
296.31(a) or as part of the lump sum incidental expenses for claims
expenses reimbursement under Sec. 296.31(b).
Comment: Two commenters suggested funding to address economic
development as the population (per capita) had decreased since the
Fire, as either business and/or financial loss under the Act.
FEMA Response: Economic development can be speculative and a
claimant seeking compensatory damages for loss of economic development
would need to be able to demonstrate such loss and that such loss was a
result of the Fire. As explained above, the regulation provides types
of actual compensatory damages that are compensable under the Act, but
that list is not all-inclusive. Claimants seeking compensation for
actual compensatory damages not specifically listed in the regulation
should still submit a claim for compensation under the Act. For this
type of claim, claimants can work with their Claims Navigator and
Claims Reviewer to demonstrate that such damages would be considered
actual compensatory damages for injuries resulting from the Fire
consistent with the Act. FEMA does not believe changes to the
regulatory text are required in the Final Rule for claimants to seek
this type of compensation if they can demonstrate the loss and that the
loss resulted from the Fire.
Comment: One commenter suggested an additional amount be awarded
where the claimant dies to compensate for the further injury inflicted
as a result of delays in compensation.
FEMA Response: FEMA disagrees with this commenter. This proposed
claim would not be for actual compensatory damages for injuries
resulting from the Fire and is not authorized.
5. Comments on Flood Damages
Comment: One commenter suggested FEMA add flood damage to Sec.
296.21(a) writing that it was ``illogical to provide compensation for
flood insurance as a financial loss in Sec. 296.21(e)(2) but not for
flood damage.'' A different commenter stated that claimants face risks
of further injury from flooding, landslide/mudslide, and debris flow
and that full cooperation from owners of all affected property parcels
located upstream and upslope was essential to recovery. The commenter
requested FEMA acknowledge, address, and compensate for those long-term
risks.
FEMA Response: FEMA is revising the purpose of the regulation in
Sec. 296.1 to incorporate language to address this issue. By changing
the current regulatory text addressing the compensable injuries from
``suffered from'' to ``resulting from'' the Fire, this change addresses
the commenters' concerns with whether flood damage is an allowable
damage. Further, the definition of ``injured person'' includes injuries
``resulting from the Hermit's Peak/Calf Canyon Fire'' and is broad
enough to encompass flooding as well as other types of injuries that
may be considered to be resulting from the Fire.
6. Comments on Personal Injury Damages
Comment: Commenters suggested that FEMA clarify that personal
injury is an allowable damage.
FEMA Response: Section 296.21(a) allows for payment of actual
compensatory damages for injury and ``injury'' is defined in Sec.
296.4 to include personal injury. All potential claimants are
encouraged to submit a Notice of Loss to enable the Claims Office to
evaluate individual claims. The Claims Office will work with claimants
to identify eligible economic losses, which could include compensation
for economic losses associated with personal injury such as medical
bills, on-going therapy, and the like and to properly value claims.
Comment: One commenter suggested that FEMA provide compensation for
health issues for residents and animals affected by compromised water
and air quality issues.
FEMA Response: FEMA agrees these types of damages are generally
compensable under the Act as personal injury damages and damage to
property. These health issues, if resulting from the Fire, could be
considered injuries under the Act's definition and compensable as such.
[[Page 59746]]
7. Comments on Calculation of Damages
Comment: One commenter noted that the legal precedent in New Mexico
does not require claimants to adhere to a strict formula to calculate
damages. Another commenter agreed, citing to Maestas v. Medina.\39\ A
different commenter asked which New Mexico laws were being used to
calculate damages.
---------------------------------------------------------------------------
\39\ 2011 N.M. App. Unpub. LEXIS 276 (2011).
---------------------------------------------------------------------------
FEMA Response: In paragraph 296.21(a) FEMA states, consistent with
the Act, that the agency will apply New Mexico law to the calculation
of damages. The Claims Office will work with claimants to identify an
appropriate measure of damages consistent with applicable law.
8. Comments on Reasonable Damages
Comment: Finally, commenters discussed the requirement that damages
must be reasonable in amount in the IFR. Some commenters suggested that
FEMA delete the requirement that damages must be reasonable in amount
while others recommended it be changed to actual damages supported. One
commenter stated that FEMA should give claimants the autonomy to define
reasonableness for themselves.
FEMA Response: The Act limits compensation to actual damages
incurred by the claimant. To better ensure that the claimant is only
being compensated for the actual damages incurred and that claimant is
not being compensated in amounts that exceed the actual damages
incurred, FEMA requires that the damages be reasonable in amount.
G. Comments on Sec. 296.21(b) Exclusions
1. Comments on Punitive Damages
Comment: Two commenters suggested claimants be allowed to seek
punitive damages.
FEMA Response: Section 104(c)(3)(B)(ii) of the Act specifically
excludes punitive damages from the compensation available under the
Act. It is thus beyond FEMA's statutory authority to compensate for
these damages.
2. Comments on Criminality
Comment: One commenter wrote ``Essentially, the USFS committed a
crime when--against all experience-informed protests from local
citizens--its agents (the district ranger, burn boss and all commanding
managers above them) made the decision to begin the Dispensas
Prescribed Burn which rapidly and irreversibly exploded into the
catastrophe now known as the Hermit's Peak Fire. They also committed a
crime of negligence when they failed to properly monitor burn piles
which reignited and caused the Calf Canyon Fire which merged with the
Hermit's Peak Fire to cause widespread devastation now wreaking havoc
for victims of the fire.''
FEMA Response: FEMA is not authorized under the Act to pursue these
types of claims. In the Act, the United States accepted responsibility
for damage resulting from the Fire and waived sovereign immunity to
compensate victims in tort. By excluding punitive damages, the Act
makes clear that damages for intentional and other behavior otherwise
giving rise to heightened liability are not compensable. FEMA is not
revising the Final Rule.
3. Comments on Attorneys' and Agents' Fees
While one commenter specifically expressed support for this
provision,\40\ a large number of commenters wrote that FEMA should pay
attorneys' and agents' fees associated with the claims process.
---------------------------------------------------------------------------
\40\ The commenter wrote ``Subpart C Section 296.21(b) Excludes
reimbursement for attorney's fees and agents' fees, plus claimant's
cost of prosecuting a claim. This should stay. We want all of the
money to go to the people injured in any way by the Hermit's Peak/
Calf Canyon Fire.''
---------------------------------------------------------------------------
Comment: One commenter wrote that the Administrator had the
discretion to pay legal fees under the Act because the Act allows the
award of financial losses of ``any other loss that the Administrator
determines to be appropriate for inclusion as financial loss.'' The
commenter stated that claimants using lawyers are likely to have more
complete and better documented claims and that FEMA should want and
encourage claimants to have complete and well documented claims. The
commenter also noted that if claimants pay the financial expense of a
lawyer the victims will not be made 100 percent whole unless they
recover both 100 percent of losses and 20 percent for legal fees. A
different commenter also stated that FEMA should encourage the
efficiency and assistance that will result from allowing claimants to
obtain attorney assistance and be made whole by allowing claimants to
recover their attorney's fees.
FEMA Response: The Act is silent regarding FEMA's authority to pay
attorney or agent fees. Generally, if Congress knows how to say
something but chooses not to, its silence is controlling.\41\ While the
Act places limits on the amount an attorney or agent may charge in
section 104(j)(1), the Act does not provide for attorney or agent fees
as allowable damages. Further, the ``American Rule,'' generally
applicable in civil litigation and accepted by the United States
Supreme Court initially in the case of Arcambel v. Wiseman,\42\
provides that in the absence of a statute indicating otherwise, each
party is responsible for paying their own attorney fees. FEMA designed
the claims process so that claimants will receive all eligible
compensation without the need to engage the services of an attorney,
and the Claims Office hired Claims Navigators to assist claimants
compiling necessary documentation and with the Proof of Loss. Although
claimants have the right to hire an attorney, one is not required.
---------------------------------------------------------------------------
\41\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\42\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: A commenter wrote ``The Fire Victim Trust in California
added legal fees to gross economic awards, and it has been a tremendous
benefit as around 90 [percent] of claimants hired lawyers.''
FEMA Response: As noted, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\43\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. FEMA is applying the
generally accepted American Rule for attorney fees. FEMA designed the
claims process so that claimants will receive all eligible compensation
without the need to engage the services of an attorney, and the Claims
Office hired Claims Navigators to assist claimants compiling necessary
documentation and with the Proof of Loss. Although claimants have the
right to hire an attorney, one is not required. Also as noted, the Fire
Victim Trust in California involved a private party defendant under the
oversight of a bankruptcy court applying California law and does not
present a useful
[[Page 59747]]
paradigm for the Hermit's Peak/Calf Canyon Fire.
---------------------------------------------------------------------------
\43\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
---------------------------------------------------------------------------
Comment: A commenter wrote that Congress only prevented the award
of punitive damages and interest in the Act, not the award of legal
fees.
FEMA Response: As noted, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\44\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. FEMA is applying the
generally accepted American Rule for attorney fees. FEMA designed the
claims process so that claimants will receive all eligible compensation
without the need to engage the services of an attorney, and the Claims
Office hired Claims Navigators to assist claimants compiling necessary
documentation and with the Proof of Loss. Also as noted, the Act is a
limited waiver of sovereign immunity, and similar to cases decided
under the Federal Tort Claims Act,\45\ the Act does not waive sovereign
immunity to allow payment of attorney fees.
---------------------------------------------------------------------------
\44\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\45\ E.g., Anderson v. United States, 127 F.3d 1190, 1191 (9th
Cir. 1997) (``The FTCA does not contain an express waiver of
sovereign immunity for attorneys' fees and expenses.''); Joe v.
United States, 772 F.2d 1535 (11th Cir. 1985).
---------------------------------------------------------------------------
Comment: Several commenters stated the process was too complicated
and required professional and/or legal assistance to navigate and that
payment of these fees would help to make them whole.
FEMA Response: One purpose of the Act is to provide for expeditious
consideration and settlement of claims from the Fire. The Claims Office
interprets this to require an approach to settling claims that
claimants can complete without engaging the services of attorneys or
other professionals. To achieve this goal, FEMA hired a number of
Claims Navigators from the local community, trained these Claims
Navigators to identify compensable losses and to understand what is
needed to complete a Proof of Loss, and developed a Claims Office ethos
that emphasizes the needs of the claimant. The Claims Navigators work
with claimants to ensure that they develop the information needed to
receive compensation for all eligible losses. The Claims Office
recognizes that some claims will require special expertise and will pay
for experts that are needed to value particular claims. FEMA also notes
that at the time the comment was submitted, the Claims Office had not
yet fully developed the claims procedures, so it is understandable that
the commenters did not recognize that the process is designed so that
claimants do not need legal assistance.
Comment: One commenter wrote that the Act recognized that claimants
may seek legal assistance and capped those fees at 20 percent. The
commenter stated that a FEMA representative, ``protected by sovereign
immunity, with no legal, ethical, or fiduciary obligation to the
claimant, will be advising the claimant on the strategy to meet their
burden of proof to obtain make-whole damages allowed by the language of
the HPFAA and New Mexico State law. This approach puts claimants in the
hands of FEMA representatives who have a conflict of interest. That is
simply improper, unfair, unduly harmful to claimants, and places an
administrative burden on FEMA and its representatives that otherwise
would be borne by the claimant's attorneys.'' This commenter also
stated that the claims process required claimants to make decisions
with legal implications and that FEMA employees and contractors would
be able to obtain legal advice and assistance from their counsel in the
process. The commenter stated that FEMA's legal team would be paid from
Act's funds as an administrative expense and that claimants' attorneys'
fees should be as well. The commenter also added that if represented by
attorneys, FEMA should pay those funds directly to the attorneys for
proper handling and lien resolution through authorized IOLTA trust
accounts stating that claimants would have lien obligations that must
be satisfied out of the compensation received, whether to satisfy fees,
mortgages, medical liens, or other liens.
FEMA Response: As with the Cerro Grande Act, in this Act, Congress
limits attorney fees that an attorney is able to charge given it has
established a claims process statutorily mandating the expeditious
provision of compensation to all injured persons. FEMA designed the
program to help claimants navigate the process. The Claims Office is
implementing measures to eliminate potential conflicts of interest, and
otherwise the Claims Office has no incentive not to pay claimants for
all eligible losses. The Act creates the Claims Office and instructs
the Director of the Claims Office, other officials, and staff to fully
compensate claimants applying the authorizations and limitations in the
law. The Director, other officials, and staff have a legal duty to pay
eligible claimants the full amount of proven claims. Third, the
assignment of benefits prohibition in the regulations.
Comment: One commenter stated that attorneys' fees should be
covered to help with the claims process for those especially that are
elderly, handicapped, or those with basic literacy skills that don't
have the ability to file the claims process themselves, that ``the
attorneys' fees should not come out of the final claim; that should be
added on top of it.''
FEMA Response: As discussed above, the Act is silent regarding
FEMA's authority to pay attorney or agent fees. Generally, if Congress
knows how to say something but chooses not to, its silence is
controlling.\46\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. Further, the ``American
Rule,'' generally applicable in civil litigation and initially accepted
by the United States Supreme Court in the case of Arcambel v.
Wiseman,\47\ provides that in the absence of a statute indicating
otherwise, each party is responsible for paying their own attorney
fees. FEMA designed the claims process so that claimants will receive
all eligible compensation without the need to engage the services of an
attorney, and the Claims Office hired Claims Navigators to assist
claimants compiling necessary documentation and with the Proof of Loss.
Although claimants have the right to hire an attorney, one is not
required. Also, the State of New Mexico has identified several programs
providing free legal representation for individuals affected by the
Fire.
---------------------------------------------------------------------------
\46\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\47\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: One commenter stated that attorneys' fees and consultant
fees need to be paid out of the Act's funding if the fees to administer
the program would be paid out of the Act's funding.
FEMA Response: As explained above, section 104(a)(2)(C)(i) requires
FEMA to use the funding made available under the Act to fund the Claims
Office. FEMA is required to follow the Act's
[[Page 59748]]
requirement to fund the Claims Office from the Act's funding.
Additionally, as discussed above, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\48\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. Further, the ``American
Rule,'' generally applicable in civil litigation and initially accepted
by the United States Supreme Court in the case of Arcambel v.
Wiseman,\49\ provides that in the absence of a statute indicating
otherwise, each party is responsible for paying their own attorney
fees. FEMA designed the claims process so that claimants will receive
all eligible compensation without the need to engage the services of an
attorney, and the Claims Office hired Claims Navigators to assist
claimants compiling necessary documentation and with the Proof of Loss.
Although claimants have the right to hire an attorney, one is not
required.
---------------------------------------------------------------------------
\48\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\49\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: Some commenters stated that the funding provided under the
Act was not sufficient to pay the claims and attorneys' and agents'
fees.
FEMA Response: FEMA is also concerned about the use of funds under
the Act to pay attorneys' fees. As explained above, FEMA is committed
to hiring staff and providing resources to assist all claimants with
their claims. While claimants can seek counsel on their own, the claims
process, as structured, will provide claimants with the assistance
needed to prepare and submit their claims effectively.
Comment: A commenter requested consistency in awards for damage,
asking if FEMA would treat all claimants equitably whether the claimant
chose to represent themselves and hired an attorney to handle their
claim.
FEMA Response: FEMA understands the commenter's concern but
reiterates that the agency is bound to act in a fair manner with all
claimants, regardless of representation. FEMA is committed to hiring
staff and providing resources to assist all claimants with their
claims. While claimants can seek counsel on their own, the claims
process, as structured, will provide claimants with the assistance
needed to prepare and submit their claims effectively.
4. Comments on the Cost of Prosecuting a Claim
Comment: Several commenters sought to remove this exclusion from
damages. One commenter wrote ``Absolutely every second of time spent on
every action required of victims for them to receive compensations from
the Hermit's Peak Fire Assistance Act must be covered as recoverable
expense since this situation has been foisted upon victims against
their will and through no fault of their own. This must be the case no
matter the severity level of injury suffered by victims because this
entire ordeal is both time consuming and stressful as it drags on to
full conclusion.'' A different commenter wrote ``Time spent in claims
preparation is not considered a damage. The time required for
processing this claim is extensive. Loss of my time is a loss of that
part of my life, and it should be considered valuable.''
FEMA Response: FEMA provides claimants with the ability to recover
the reasonable costs incurred in providing documentation requested by
the Claims Office pursuant to Sec. 296.31(a) and incidental expenses
pursuant to Sec. 296.31(b). However, time spent in the prosecution of
a claim is not considered an actual compensatory damage. Section
104(c)(3)(A) of the Act requires FEMA to reimburse claimants only for
actual compensatory damages. FEMA cannot reimburse claimants for time
spent working on their claims as such reimbursement is beyond the
agency's statutory authority.
Comment: One commenter wrote that because the Act authorizes
compensation for `any other loss that the Administrator determines to
be appropriate for inclusion,' FEMA can allow the cost of prosecuting a
claim to be recoverable.
FEMA Response: As explained in the IFR, compensatory damages for
time spent in claims preparation or prosecuting a claim are not
available under New Mexico law or the Federal Tort Claims Act.
Moreover, there is no evidence Congress intended that claimants be
compensated for the value of their time in preparing a claim. As
explained in the IFR, FEMA is choosing to exercise discretion to
provide a lump sum payment to claimants for miscellaneous and
incidental expenses incurred in the claims process. FEMA will provide a
lump sum payment of five percent of the insured and uninsured loss
(excluding flood insurance premiums), not to exceed $25,000. The
minimum lump sum payment is $150. Section 296.31(b) of the IFR
represents a fair and reasonable accommodation between the agency's
responsibility to spend Federal funds wisely and the desire to
compensate claimants as fully as possible.
Providing compensation for a claimant's time would be difficult to
administer, as FEMA would have to determine equitably the value of a
claimant's time and to verify that claimants have expended the number
of hours that are claimed. FEMA's payments under the Act are subject to
independent audit by the GAO and the DHS OIG and claimants would likely
find attempts by auditors to verify the payment for hours spent in the
claims process highly intrusive. Additionally, the type of compensation
requested by commenters here would require production of receipts and
other documentation, resulting in an overly burdensome process for this
payment to claimants contrary to other comments requesting the agency
streamline and simplify the claims process.
H. Comments on Sec. 296.21(c) Loss of Property
Comment: One comment stated flood damage should be specifically
added to this section. Several other commenters suggested an addition
to this paragraph to allow for other losses including anticipated
future damages from flooding through November 14, 2032. These
commenters noted that it could be up to ten years before conditions
stabilize in the impacted forests and watersheds and that the Act's
language indicates that post-fire flooding injuries should be
considered as actual compensatory damages.
FEMA Response: As explained above, FEMA is revising Sec. 296.1 of
the Final Rule to clarify that claimants may seek compensatory damages
for injuries resulting from the Fire. This language is broad enough to
encompass a range of injuries resulting from the Fire, including flood
damages. Additionally, the definition of ``injured person'' includes
injuries ``resulting from the Hermit's Peak/Calf Canyon Fire'' and is
broad enough to encompass flooding, mudflow, mold, and debris flow as
well as other types of injuries that may be considered to be resulting
from the Fire. FEMA does not believe additional edits to this section
of the regulation are required as a result. Further, FEMA is unable to
extend the deadline for claims submission requested by the
[[Page 59749]]
commenters. As previously explained, some deadlines in the rule are
beyond FEMA's control and authority to change. Section 104(b) of the
Act requires claimants submit their Notice of Loss no later than
November 14, 2024, two years from the date the IFR is promulgated. FEMA
has built in extensions of this timeline for good cause, recognizing
the realities of the Fire's impact. Sections 296.34 and 296.35 below
establish a process for notifying FEMA of injuries that are not
referenced in the initial Notice of Loss. Whether a claimant tells FEMA
about an injury in the initial Notice of Loss or an amendment under
Sec. 296.34, FEMA must know about the injury by November 14, 2024. For
heightened risk reduction efforts, a claimant must include the claim in
their Notice of Loss by November 14, 2024, or an amended Notice of Loss
filed no later than November 14, 2025. See Sec. 296.21(c)(5).
Additionally, FEMA recognizes the potential long-term impacts of
flooding after fire and will encourage claimants to consider risk
reduction measures to address those risks.
1. Comments on Sec. 296.21(c)(1) Real Property and Contents
Comment: Several commenters wrote about how FEMA would value real
property and contents when analyzing claims under the Act. Most of
these commenters suggested FEMA consider the actual costs to rebuild
and construct in the future, acknowledging increasing market values of
land, construction, and other costs such as inflation. with some
commenters stating that it may not be safe to immediately rebuild.
FEMA Response: The language in the IFR addresses these concerns as
it explains the costs of reconstruction must factor in post-Fire
construction costs as well as current building codes at the time of
construction. FEMA will work with claimants to ensure that compensation
effectively addresses future construction cost concerns and
compensation for any decrease in the value of the land on which the
structure sat as detailed in Sec. 296.21(c)(1). FEMA is not making any
changes to this section of the Final Rule.
Comment: Some commenters stated that it may not be safe to
immediately rebuild. One commenter wrote claimants face decades of
uncertainty regarding terrain stability and that ``such areas are now
extremely high-risk hazard zones.''
FEMA Response: FEMA understands concerns about rebuilding
immediately after the Fire and will work with claimants to ensure that
compensation effectively addresses concerns regarding stabilizing the
land and for any decrease in the value of the land on which the
structure sat as detailed in Sec. 296.21(c)(1). The current text in
the IFR is sufficient to address this concern and is not making any
changes to this section of the Final Rule.
Comment: Commenters raised questions regarding compensation for
other damages beyond home reconstruction. Some commenters suggested
FEMA consider the intrinsic value of the property lost, as well as loss
of use damages and compensation for future potential land use.
Commenters suggested that damages be calculated based on replacement
and/or intrinsic value--not fair market value. Other commenters wrote
requesting compensation for lost sentimental value for damaged real and
personal property and the loss of use of personal or real property.
FEMA Response: Generally, FEMA's calculation of damages, including
how damaged property is valued, will be governed by the Act and Federal
law. To the extent that this valuation is not pre-empted by Federal
law, New Mexico law will govern.
Comment: Some commenters suggested payment of double compensatory
damages for trespass under New Mexico Statutes Annotated section 30-14-
1.1.
FEMA Response: As noted, the Act does not provide for punitive or
non-economic damages, including non-economic damages for nuisance and
trespass. Economic damages associated with nuisance and trespass are
available upon proper proof. However, because the Act limits recovery
to actual damages, double compensation would not be available.
Comment: Two commenters suggested FEMA compensate for property
taxes, either to the local government or individual property owners.
FEMA Response: The Claims Office compensates claimants for actual
damages resulting from the Fire. Any increases in property tax or any
decreases in property tax revenue income, if resulting from the Fire,
would be compensable under the IFR.
Comment: One commenter asked how losses for wells, water, and
erosion would be compensated.
FEMA Response: While the IFR addresses erosion, FEMA is adding
paragraph (c)(5) to Sec. 296.21 of the Final Rule specifically address
damages for physical infrastructure including irrigation infrastructure
such as acequia systems. This change in the Final Rule can also
encompass concerns raised regarding well and water losses to the extent
those losses are of physical infrastructure. Those losses may also be
considered part of real property and contents losses in Sec.
296.21(c)(1).
Comment: One commenter suggested FEMA find ways to compensate
people that work a land grant, as those claimants would not have deeds
to the property and figure out ways to get them documentation to
support their claims.
FEMA Response: The IFR language sufficiently addresses these
commenters' concerns. Specifically, FEMA defines ``injured person'' in
Sec. 296.4 to include individuals, businesses, Indian Tribes, State
and local government entities, and ``other non-Federal entit(ies).''
This broad definition currently encompasses all potential claims
associated with land grants as a result. As explained above, the Claims
Office locally hired Navigators to assist claimants compiling necessary
documentation and completing the Proof of Loss in support of the claim.
Claims Navigators and Claims Reviewers will work with each claimant to
ensure that they are able to get the proper documentation to complete
their claim and will use alternative methods to prove ownership when
the deed is not available, such as affidavits, utility bills, and tax
records.
Comment: One commenter inquired as to whether or not their vehicle
and newly published book would be covered under the regulation.
FEMA Response: Section 296.21(c)(1) of the IFR explains that
claimants can seek compensation for the contents of real property
damaged by the Fire. The commenter's personal property mentioned is
covered by the current language and no changes to the regulatory text
is required for the Final Rule.
Comment: Several commenters focused on the issue of compensation
for debris removal under this paragraph. Commenters generally sought
clarification on what compensation was available. Commenters sought
wages as compensation for debris removal efforts they complete because
of the lack of available contractors in the area. One commenter stated
``there is so much devastation, the cleanup part of the reimbursement
is going to fall mainly on the landowner because there [are] not enough
contractors or help out there to do this much clean up. And so, in
order to do that, the landowners are going to need to pay themselves
for their time and equipment that they use and need to cleanup a
massive amount of trees. And so, I would hope that part of the
compensation for the debris removal and reforestation is, would include
wages for the landowners or their
[[Page 59750]]
friends or whoever to pay to get it done.''
FEMA Response: Claimants seeking compensation for their own work or
the work of those they hire to remove debris can claim this expense
under Sec. 296.21(c)(1). FEMA does not believe further edits to the
regulatory text are required for claimants to seek this compensation.
Comment: Commenters questioned the extent to which adjacent
property owners could be held responsible for debris flow traced to
their property.
FEMA Response: FEMA recognizes that not every property owner will
file a claim or seek to restore their property and FEMA cannot require
property owners to do so. Claimants seeking to promote recovery of
their properties can file a claim under this paragraph. Also, the Act
does not authorize FEMA to pursue liability against third parties who
may be responsible for damage.
Comment: Other commenters raised concerns about current debris
removal efforts. A commenter stated that trees being removed for right
of way created stumps that were too high and dangerous and a lack of
inspections on the work performed. The commenter stated a general lack
of progress on debris removal and how a lack of fencing resulted in
animals in the road, presenting a danger to commuters in the area.
FEMA Response: FEMA understands the challenges associated with
debris removal after a wildfire and subsequent flooding. This paragraph
of the IFR provides claimants the ability to receive compensation for
removing debris and burned trees. As noted, FEMA and other Federal and
State agencies have a number of programs that provided assistance after
the Fire and had responsibilities for debris removal. The Claims Office
provides compensation for damages resulting from the Fire, including
debris removal, and is not responsible for debris removal and other
post-disaster activities undertaken by other Federal and State
agencies.
Comment: Finally, some commenters sought clarification on
prioritization of claimants with respect to this paragraph. Commenters
generally suggested that FEMA focus first on those who lost their
homes, including mobile homes, and do everything possible to make them
whole.
FEMA Response: FEMA intends to prioritize individual claimants over
subrogees consistent with the Act's mandate at section
104(d)(1)(A)(ii). FEMA understands the unique challenges presented for
those that lost their homes in the Fire and agrees that those claims
require immediate attention. FEMA will work to ensure that all claims
are reviewed in an expeditious and fair manner.
Comment: A commenter raised concerns about FEMA assistance through
the Individual Assistance Program related to SBA loans, stating that an
SBA loan would not make claimants whole.
FEMA Response: Under the Act, this commenter has the option of
filing a claim to be compensated for these damages if the assistance
provided under the Individual Assistance Program was insufficient to
fully compensate them.\50\ FEMA notes that the Individual Assistance
Program has specific criteria for assistance,\51\ including
requirements regarding pursuing a loan with the Small Business
Administration, that are not found in the Act. FEMA encourages
claimants to seek compensation for actual compensatory damages for
injuries resulting from the Fire and as explained above, the Act can
provide compensation if the assistance provided under the Individual
Assistance Program was insufficient to fully compensate claimants.
Notably, Small Business Administration loans, and the interest accrued
on these loans, is compensable under the Act.
---------------------------------------------------------------------------
\50\ Section 296.21(e)(1) provides for compensation under the
Act for interest paid on loans for damages resulting from the Fire
as well as proceeds from the compensation award to repay any SBA
loans obtained.
\51\ For information on the criteria for participation in the
Individual Assistance Program please see the Individual Assistance
Program and Policy Guide, Version 1.1 found at https://www.fema.gov/sites/default/files/documents/fema_iappg-1.1.pdf (last accessed Feb.
24, 2023).
---------------------------------------------------------------------------
Comment: One commenter asked if the Act would compensate for
looting that occurred on their property after the Fire, stating they
were denied assistance under the Individual Assistance Program.
FEMA Response: Under the Act, this commenter has the option of
filing a claim to be compensated for these damages if the assistance
provided under the Individual Assistance Program was insufficient to
fully compensate them.\52\ FEMA notes that the Individual Assistance
Program has specific criteria for assistance.\53\ FEMA encourages
claimants to seek compensation for actual compensatory damages for
injuries resulting from the Fire and as explained above, the Act can
provide compensation for damage from the Fire if the assistance
provided under the Individual Assistance Program was insufficient to
fully compensate them.
---------------------------------------------------------------------------
\52\ Section 296.21(e)(1) provides for compensation under the
Act for interest paid on loans for damages resulting from the Fire
as well as proceeds from the compensation award to repay any SBA
loans obtained.
\53\ For information on the criteria for participation in the
Individual Assistance Program please see the Individual Assistance
Program and Policy Guide, Version 1.1 found at https://www.fema.gov/sites/default/files/documents/fema_iappg-1.1.pdf (last accessed Feb.
24, 2023).
---------------------------------------------------------------------------
2. Comments on Sec. 296.21(c)(2) Reforestation and Revegetation
Comment: Most commenters opposed the formula to pay 25 percent of
the pre-Fire value of the lot and structures as compensation for
reforestation and revegetation. Commenters stated 75 percent less value
was unacceptable when there were large parcels of land previously
forested before the Fire and recommended FEMA delete the 25 percent cap
on reforestation damages, with several commenters stating the 25
percent limit violated New Mexico law. One commenter wrote ``For
landowners that have more than 100 acres, this is a tremendous
financial burden when they need to come up with 75 [percent]. The
compensation needs to be changed from 25 [percent] to a greater extent
to cover losses from fire, erosion, creeks and water ways, meadows,
deep canyons, pine trees, oak brush, and trees.'' A different commenter
wrote ``Generations of stakeholders have provided a free ecological
service maintaining the lands that make up the watersheds that provide
clean water for millions downstream. This includes best practices for
farming and forestry. Restoring the forests and planting new trees is
essential for regenerating a healthy ecosystem, and repairing the harm
done by the US government. Providing 100 [percent] of costs for loss
will ensure that future generations have a better chance to develop
this unique rural/mountain economy.''
FEMA Response: In the IFR, FEMA limited compensation for trees and
other landscaping to 25 percent of the pre-Fire value of the structure
and lot. This approach was generally consistent with the approach taken
in the Cerro Grande Fire Assistance process. As explained in the IFR,
the 25 percent limitation does not apply to business losses for timber,
crops, and other natural resources under Sec. 296.21(d). In response
to commenter concerns and confusion regarding the application of this
formula, FEMA is revising this paragraph in the Final Rule to eliminate
references to the 25 percent formula. FEMA understands that the land
impacted by this Fire was more heavily forested than the Cerro Grande
Fire and that those resources were relied on for personal, subsistence,
and business needs, making the formula in this section of the IFR
particularly confusing. The Final Rule allows for
[[Page 59751]]
compensatory damages for the cost of replacement of destroyed trees and
other landscaping and removes references to the 25 percent formula.
Comment: Several commenters opposed to this paragraph stated the
distinctions between the Cerro Grande Fire and Hermit's Peak/Calf
Canyon Fire communities necessitated a different valuation analysis for
the claims process. One commenter wrote ``Landowners of Mora and San
Miguel are usually on many acres of land (some have been passed down
through generations), whereas Cerro Grande were on smaller lots. 75
[percent] less value is unacceptable when you have a large parcel of
land that was previously forested.'' Another commenter wrote ``This
approach was used in the Cerro Grande Fire Assistance Process in Los
Alamos, New Mexico of which is one of the wealthiest counties per
capita in the nation. I suspect the structures and land parcels are of
higher value in Los Alamos versus Mora, New Mexico based on property
assessments. It is suggested to reconsider the formula because
properties in Mora would receive less compensation for similar damage
from the wildfire versus Los Alamos.'' A commenter wrote ``Unlike
properties in Los Alamos that were damaged by the Cerro Grande Fire and
upon which this interim rule is based, many of the properties damaged
by the Hermit's Peak and Calf Canyon Fires consist of hundreds of tree-
covered acres, not small, landscaped lots. New Mexico has a long
history of subsistence use of forests and trees that should be
recognized by this rule.''
FEMA Response: As explained above, FEMA appreciates the insights
provided by commenters on the distinctions between the areas impacted
by the Cerro Grande Fire and the Hermit's Peak/Calf Canyon Fire. These
differences are important to recognize, and FEMA agrees that these
differences require revision to the IFR where the process implemented
for the Cerro Grande Fire will no longer meet the needs of claimants
for the Hermit's Peak/Calf Canyon Fire. In response to commenters'
concerns, FEMA is revising this paragraph in the Final Rule to
eliminate references to the 25 percent formula. As explained above,
FEMA understands the communities impacted by this Fire were less
densely populated and contained larger areas of privately held land.
This land was also more heavily forested, making the loss of trees and
vegetation a particularly devastating loss for claimants. The Final
Rule allows for compensatory damages for the cost of replacement of
destroyed trees and other landscaping and removes references to the 25
percent formula.
Comment: A commenter wrote that the Act did not impose caps on tree
or mitigation damages and that New Mexico law did not have a cap on
damages to trees or for mitigation, but rather that New Mexico law
allows plaintiffs to recover the full value of any trees destroyed on
their property. This commenter further stated that ``New Mexico law
allows as compensatory damages double the value of tree damages. While
the Act prohibits `punitive damages' it does not prohibit statutory
compensatory damages but requires application of New Mexico law which
includes section 30-14-1.1.''
FEMA Response: In the IFR, FEMA limited compensation for trees and
other landscaping to 25 percent of the pre-Fire value of the structure
and lot. This approach was generally consistent with the approach taken
in the Cerro Grande Fire Assistance process. As explained in the IFR,
the 25 percent limitation does not apply to business losses for timber,
crops, and other natural resources under Sec. 296.21(d). In response
to commenter concerns and confusion regarding the application of this
formula, FEMA is revising this paragraph in the Final Rule to eliminate
references to the 25 percent formula. FEMA understands that the land
impacted by this Fire was more heavily forested than the Cerro Grande
Fire and that those resources were relied on for personal, subsistence,
and business needs, making the formula in this section of the IFR
particularly confusing. The Final Rule allows for compensatory damages
for the cost of replacement of destroyed trees and other landscaping
and removes references to the 25 percent formula.
Comment: Commenters asked how the valuation used in the formula
would be made under the formula, with one commenter requesting the
inclusion of intrinsic value to be part of the damage's calculation for
real property loss. A commenter asked how the 25 percent would be
quantified and qualified. A different commenter requested that losses
be calculated using replacement and/or intrinsic value, not fair market
value and that these values should account for the generational
investment in the land and forest that was destroyed, as well as the
loss that will be incurred while regrowth takes place.
FEMA Response: In response to commenter concerns and confusion
regarding the application of this formula as explained above, FEMA is
revising this paragraph in the Final Rule to eliminate references to
the 25 percent formula. The Final Rule allows for compensatory damages
for the cost of replacement of destroyed trees and other landscaping.
Valuation of losses under this revised language will be at 100 percent
of the damage. Generally, FEMA's calculation of damages, including how
damaged property is valued, will be governed by the Act, Federal law,
and New Mexico law, but only to the extent that New Mexico law is not
pre-empted by Federal law.
Comment: In lieu of the proposed formula, one commenter suggested
FEMA pay per acre ($10,000 per acre) to be used to replant and rebuild
loss.
FEMA Response: FEMA appreciates the suggestion for a payment
formula based on acreage. FEMA attempted to streamline the process by
offering the formula presented in the IFR and understands there can be
advantages to formulas to better assist claimants in receiving prompt
payment. Given the challenges with the specific formula in the IFR and
the unique concerns of the impacted communities because of the heavily
forested areas and personal, subsistence, and business uses of the
forest and vegetation, FEMA is removing the 25 percent formula from
this section of the regulation. However, FEMA is looking at ways to
better streamline the claims process in response to other comments and
is considering offering payment formulas based on acreage such as the
one suggested by one of the commenters to claimants. Any such type of
formula would provide claimants with the option to either leverage that
formula with their claim or submit documentation detailing their
specific damages.
Comment: Another commenter stated that landowners should be allowed
to request wages as compensation for reforestation efforts on their
land because of the lack of contractors to assist in the area.
FEMA Response: Claimants seeking compensation for their own work or
the work of those they hire for reforestation efforts can claim this
expense under this paragraph. FEMA does not believe further edits to
the regulatory text are required for claimants to seek this
compensation.
Comment: Commenters also commented on limiting compensation where
the costs may be covered by another Federal program. Most commenters
suggested FEMA remove this limitation, stating claimants should not be
required to use other Federal programs, with some raising concerns
those Federal programs may not have sufficient funding to cover the
losses associated with the Fire. One commenter stated that FEMA must be
[[Page 59752]]
responsible for identifying other Federal programs and help claimants
receive other identified funding in a timely manner to ensure they do
not lose out on the Act's funding based on available funding that they
may otherwise never receive.
FEMA Response: Section 296.21(c) of the IFR states that
compensatory damages may be awarded for the ``cost of reforestation or
revegetation not covered by any other Federal program.'' This language
has caused confusion with commenters as interpreting it to require
claimants to first apply with other Federal programs. FEMA does not
require claimants to apply to other Federal programs associated with
reforestation and/or revegetation. Rather, the language was intended to
clarify that, where the claimant has received payment from another
Federal program, FEMA will only be able to compensate for reforestation
and/or revegetation under the Act for those costs not covered already
in the payment received from the other Federal program. This avoids a
duplication of payment for the same damage. Claimants have the option
of seeking assistance from other Federal programs for reforestation and
revegetation, filing for compensation under the Act, or pursuing both
other Federal program and compensation under the Act. The language in
Sec. 296.21(c) is simply to clarify that FEMA cannot duplicate payment
but can provide additional payment to cover actual compensatory damages
for reforestation and revegetation. As explained above, FEMA is
coordinating with other Federal agencies to ensure data sharing and
better communication between programs. FEMA has engaged with and
continues to engage with the Small Business Administration, the
Department of Agriculture, and other Federal agencies to help
facilitate coordination of the assistance available to claimants and
the impacted communities. Consistent with the Act's requirements in
section 104(g), FEMA is in consultation with other Federal agencies,
and State, local, and Tribal authorities to ensure the efficient
administration of the claims process to include ways to ensure
claimants have the information they need regarding Federal programs
available to them.
Comment: Commenters also sought clarification on the distinctions
between claims for reforestation and revegetation and subsistence or
business loss. A commenter wrote that many claimants used trees for
subsistence resources and asked for clarification regarding whether
trees could be considered subsistence resources based on the language
of the IFR.
FEMA Response: As explained in the IFR, FEMA limited compensation
for trees and other landscaping to 25 percent of the pre-Fire value of
the structure and lot. This approach was generally consistent with the
approach taken in the Cerro Grande Fire Assistance process. As
explained in the IFR, the 25 percent limitation did not apply to
business losses for timber, crops, and other natural resources under
Sec. 296.21(d). In response to commenter concerns and confusion
regarding the application of this formula, FEMA is revising this
paragraph in the Final Rule to eliminate references to the 25 percent
formula as the Cerro Grande formula is not appropriate given the
geographic, economic, and cultural distinctions between that area and
the areas impacted by this Fire. The Final Rule allows for compensatory
damages for the cost of replacement of destroyed trees and other
landscaping. Compensation for business loss and subsistence resources
continue to be compensated at 100 percent. FEMA further notes that the
definition of ``subsistence resources'' in Sec. 296.4 of the Final
Rule includes firewood or other natural resource gathering, timbering,
or agricultural activities undertaken by the claimant without financial
renumeration. This definition should encompass the loss of trees as
subsistence resources. The edits made to Sec. 296.21(c)(2) of the
Final Rule are sufficient to address the commenters' concerns and
modify the claims process to more appropriately address the needs of
the claimants and communities impacted by this Fire.
3. Comments on Sec. 296.21(c)(3) Decrease in Value of Real Property
Comment: Several commenters recommended FEMA delete the requirement
that claimants demonstrate the value of the real property was
permanently diminished as a result of the Fire. Two commenters
recommended FEMA revise the language to ``significantly'' or ``long-
term.''
FEMA Response: FEMA agrees that it will be difficult to demonstrate
the real property value is permanently diminished given the size and
scope of the Fire as well as the types of damages caused to real
property in this area. As discussed above, the Hermit's Peak/Calf
Canyon Fire impacted communities that are less densely populated and
more heavily forested than the Cerro Grande Fire. These undeveloped
areas may not be able to easily establish a permanent diminution in
value as a result of the Fire. FEMA is removing the term
``permanently'' from Sec. 296.21(c)(3) in the Final Rule and is
rewriting this paragraph to read that the claimant can establish that
the value of the real property was significantly diminished long-term
as a result of the Hermit's Peak/Calf Canyon Fire. This change
addresses the commenters' concerns regarding their ability to prove
property values were permanently diminished while also still requiring
some demonstration of a significant diminution in property value that
is long-term in nature. The change in the Final Rule balances the need
to compensate claimants for actual compensatory damages with the
challenges of demonstrating a loss of property value where the claimant
does not sell the property.
Comment: Commenters raised specific concerns in documenting the
diminution of property value, noting real estate sale amounts are not
available in public records in New Mexico and recommending FEMA develop
a method to compensate for real property claims using local appraisers,
insurance records, and tax assessments.
FEMA Response: FEMA understands these concerns and will be
developing tools to assist claimants with this process. The regulatory
text does not require revision as the process for demonstrating this
injury can be better addressed in tools developed for claimants to
accompany Claims Office policy and procedures.
Comment: Some commenters sought the inclusion of intrinsic value in
this loss calculation.
FEMA Response: Generally, FEMA's calculation of damages, including
how damaged property is valued, will be governed by the Act and Federal
law and, to the extent it is not pre-empted by Federal law, New Mexico
law.
Comment: One commenter stated the loss calculation would increase
if neighboring homes were not also rebuilt.
FEMA Response: FEMA recognizes that not every property owner will
file a claim or seek to rebuild on their property. Claimants receiving
payment for their real property are not required to rebuild and FEMA
cannot require property owners to do so. Claimants may provide
information on how the lack of rebuilding in their area is impacting
their property value when filing a claim under this paragraph.
Comment: Another commenter suggested FEMA provide more than two
years to be able to claim the loss of property value. The commenter
stated ``for those of us who are not going to sell our property in the
next two years, how
[[Page 59753]]
are we going to claim the loss in value of our property due to the fire
and flood? I believe that the regulation should contemplate more than
[two] years to be able to claim this loss.''
FEMA Response: As explained above, some deadlines in the rule are
beyond FEMA's control. The Act requires claimants submit their Notice
of Loss no later than November 14, 2024, two years from the date the
IFR is published. FEMA has built in extensions of this timeline for
good cause, recognizing the realities of the Fire's impact. Sections
296.34 and 296.35 below establish a process for notifying FEMA of
injuries that are not referenced in the initial Notice of Loss. In
Sec. 296.35, the IFR allows claimants to reopen a claim no later than
November 14, 2025 if they sold their real estate and wished to present
a claim for decrease in the value of real property. Additionally,
claimants may request compensation for a decrease in the value of real
property if they can demonstrate the value of the real property was
significantly diminished long-term as a result of the Fire pursuant to
changes made to this section in the Final Rule.
Comment: Several commenters suggested FEMA incorporate language
regarding water rights into this paragraph because water rights are
treated as property rights in New Mexico and a claimant should be
permitted to submit a claim for the decrease in value of a water right.
FEMA Response: Claimants can file a claim for damages regarding
water rights under the current language of this section and no changes
are required in the Final Rule. Specifically, the current regulatory
language regarding real property can be read to include water rights
attached to that real property.
4. Comments on Sec. 296.21(c)(4) Subsistence
Comment: Commenters raised questions about how damages would be
defined and calculated under this paragraph. One commenter stated
claimants in the area tend to practice self-sustainability in addition
to using the land for business purposes and asked that FEMA further
define on how losses under this would be calculated. Another commenter
wrote ``FEMA needs to build in as much flexibility as possible for
compensating future claims related to lost subsistence. The restoration
of certain subsistence resources is difficult to predict, and the
services may be permanently lost in certain cases.'' Comments were also
received on the appropriate timeline for when these resources can
reasonably be expected to return to the level of availability that
existed prior to the Fire. Some commenters suggested that FEMA
determine a date of five years as the timeline by which subsistence
resources can be expected to return to the level of availability that
existed before the Fire while at least one commenter felt that five
years was not a sufficient period of time.
FEMA Response: FEMA recognizes the challenges associated with
calculating damages for subsistence. FEMA anticipates consulting
experts with respect to subsistence resource claims to ensure the
damages calculations address the reasonable cost of replacing these
resources and the timeline for when these resources can reasonably be
expected to return to the level of availability that existed prior to
the Fire. FEMA is looking at ways to better streamline the claims
process in response to other comments and is considering offering
payment formulas for subsistence. Any such type of formula would
provide claimants with the option to either leverage that formula with
their claim or submit documentation detailing their specific damages.
Comment: Some commenters suggested that income losses be considered
part of subsistence losses. A commenter suggested that the regulations
acknowledge that subsistence resources can also be the primary source
of revenue and income for impacted individuals and businesses.
FEMA Response: FEMA disagrees with the commenter. As defined at
Sec. 296.4, ``subsistence resources'' include ``activities undertaken
by the claimant without financial renumeration'' and losses involving
revenue and income are better addressed as business loss.
Comment: Other commenters sought compensation for ongoing costs for
rent, food, energy, and other resources needed to maintain a
subsistence lifestyle both in the immediate and long-term. One
commenter suggested FEMA fully cover the recovery costs necessary to
restore agricultural systems and damages and mitigation costs related
to water quality, water rights, and soil health impairments for
household and subsistence uses.
FEMA Response: FEMA recognizes that the loss of subsistence
resources can result in the need to obtain substitute resources in the
cash economy. The current IFR allows for the costs of obtaining
substitute resources in the cash economy to be considered compensatory
damages. Other Federal and/or State programs may also address some of
the immediate costs such as rent raised by commenters. To the extent
the agricultural system and related costs constitute a subsistence
resource (i.e., one for which the claimant receives no financial
renumeration), it can be considered under a subsistence resource claim.
To the extent such a system and related costs are for financial
renumeration, a claim can be filed for damages as a business loss. As
explained above, claimants can file a claim for damages regarding water
rights under the current language of the regulation and no changes are
required in the Final Rule. Specifically, the current regulatory
language regarding real property can be read to include water rights
attached to that real property.
Comment: Several commenters on this paragraph focused on the need
for firewood and other subsistence resources, with one commenter
requesting vouchers for firewood for the next five to ten years or
until the forests have regrown to support subsistence firewood
requirements.
FEMA Response: The IFR includes firewood gathering as a subsistence
resource that can be compensable. Claimants can seek compensation for
firewood under the subsistence resources paragraphs of the regulation
and, where firewood may have been sold by the claimant, under the
business loss paragraph of the regulation.
5. Comments on Physical Infrastructure (New Sec. 296.21(c)(5))
Comment: Several commenters suggested FEMA incorporate language
into the regulation clarifying the availability of compensation for
damages to physical infrastructure. Two commenters recommended FEMA
specifically incorporate guidance on acequias in the Final Rule to help
alleviate challenges for claimants. Another commenter suggested
language be added to this paragraph to include physical infrastructure
such as irrigation infrastructure, acequias, and the loss of use of
irrigation water rights appurtenant to the land with which other
commenters agreed.
FEMA Response: Consistent with the Act at section
104(d)(4)(A)(iii), FEMA is adding paragraph (c)(5) to Sec. 296.21 to
address physical infrastructure damage. This paragraph clarifies that
claimants may seek compensation for the damage or destruction of
physical infrastructure that may include damage to irrigation
infrastructure such as acequia systems. This addition is consistent
with the Act and incorporating this language better reflects the unique
challenges faced by the communities impacted by the Fire. As explained
above, claimants can file a claim for damages regarding water
[[Page 59754]]
rights under the current language of the regulation and no changes are
required in the Final Rule.
I. Comments on Sec. 296.21(d) Business Loss
Comment: Some commenters raised questions about the types of
damages that would be considered as business losses, from opportunities
to seek other business ventures to compensating for lost opportunity,
agricultural loss, future business loss, lost income from landowner tag
use or national forest permits, and future lost income.
FEMA Response: In paragraph (d), FEMA details the types of damages
generally considered eligible for compensation. This list, however, is
not all inclusive and FEMA will review each claim on a case-by-case
basis to determine whether the loss is eligible for compensation under
the Act. Claimants should submit all claims associated with loss or
damages resulting from the fire for review and consideration.
Comment: Two commenters suggested compensation for economic
development for the areas impacted by the Fire.
FEMA Response: As explained above, economic development can be
speculative and a claimant seeking compensatory damages for loss of
economic development would need to be able to demonstrate such loss was
a result of the Fire. The IFR currently provides the types of actual
compensatory damages that are compensable under the Act, but that list
is not all-inclusive. Claimants seeking compensation for actual
compensatory damages not specifically listed in the regulation can
still submit a claim for compensation under the Act. For this type of
claim, claimants should consider how these damages would be considered
actual compensatory damages for injuries resulting from the Fire
consistent with the Act. FEMA does not believe changes to the
regulatory text are required in the Final Rule for claimants to seek
this type of compensation if they can demonstrate the loss and that the
loss resulted from the Fire.
Comment: One commenter suggested FEMA cover damages and mitigation
costs related to water quality and water rights impacts to businesses,
including agricultural producers.
FEMA Response: Businesses may file claims for damages associated
with water rights as part of claims associated with damages to real
property under that paragraph and/or under business loss.
Comment: Some commenters asked how FEMA would calculate business
losses and specifically loss of business income given the economic
challenges presented by the COVID-19 pandemic. Commenters generally
stated that FEMA consider the time period prior to the pandemic, but
also to consider other factors such as prior fires impacting the area.
FEMA Response: FEMA understands the challenges regarding the
appropriate timeline for consideration of business loss calculations
given the COVID-19 pandemic and prior disasters. FEMA must also
consider the programs available to businesses during those periods and
the financial resources those programs may have provided to businesses.
Claimants seeking compensation should present what they believe is a
reasonable period of time to demonstrate their income and business
losses resulting from the Fire. FEMA anticipates future policy and
procedure documents will provide examples to help claimants with this
type of compensation request.
Comment: Commenters also asked about the types of businesses that
are covered under the Act. One comment stated the statutory
construction of the Act allows for reimbursement of business loss for
nonprofit organizations.
FEMA Response: The current definition of ``injured person''
includes ``other non-Federal entity'' and that terminology encompasses
non-profit organizations. While FEMA understands the importance of non-
profit organizations in the relief process, the agency believes the
current definition sufficiently encompasses all types of for-profit and
non-profit entities and those entities can seek damages for business
loss.
Comment: Two commenters asked about the eligibility for business
losses for those communities that were not in the direct area of the
Fire but suffered losses as a result of the Fire. In prioritizing these
claims, a commenter asked FEMA to first consider claims from claimants
with actual fire and flood damage, but then consider business loss for
claimants where the State closed off areas during the Fire.
FEMA Response: Unlike disaster declarations that cover a specific
geographic area, the Act covers all injured parties that suffered
injuries as a result of the Fire. Claimants seeking compensation for
their business losses should file a claim demonstrating their loss was
a result of the Fire for consideration. Regarding prioritization, FEMA
is amending Sec. 296.13 to specifically clarify the prioritization
required under section 104(d)(1)(A)(ii) of the Act that requires FEMA
to place priority on claims submitted by injured parties that are not
insurance companies seeking payment as subrogees. FEMA will work to
ensure that all claims are reviewed in an expeditious and fair manner.
Comment: Finally, a commenter asked questions about the
reforestation damages formula and its application to business losses
for revenue received from cutting Christmas trees on their property.
FEMA Response: As explained in the IFR, business losses are
distinct from reforestation losses and a formula developed for
reforestation would not be applied to those losses. Timber, crops, and
other natural resources were listed under business losses in paragraph
(d). With the updates made to paragraph (c)(2) above, FEMA has removed
the 25 percent reforestation formula from the regulation. Business
losses are not subject to a specific formula as part of compensation
under the regulation.
J. Comments on Sec. 296.21(e) Financial Loss Generally
Comment: Commenters raised questions about the types of financial
losses to be covered under the Act and the eligible claimants for
financial losses. One commenter suggested FEMA clarify how claimants
can be compensated for the increased cost of homeowner and business
insurance, stating these additional expenses will be ongoing for
decades. Another commenter suggested FEMA cover unforeseen financial
costs associated with evacuations.
FEMA Response: In paragraph (e), FEMA details the types of damages
generally considered eligible for compensation under financial loss.
This list, however, is not all inclusive and FEMA will review each
claim on a case-by-case basis to determine whether or not the loss is
eligible for compensation under the Act. Claimants should submit all
claims associated with financial loss for review and consideration.
Comment: One comment stated the statutory construction of the Act
allows for reimbursement of financial loss for nonprofit organizations.
FEMA Response: The current definition of ``injured person''
includes ``other non-Federal entity'' and that terminology encompasses
non-profit organizations. While FEMA understands the importance of non-
profit organizations in the relief process, the agency believes the
current definition sufficiently encompasses all types of for-profit and
non-profit entities and
[[Page 59755]]
those entities can seek damages for financial loss.
Comment: One commenter made several specific suggestions in their
comment seeking funding for public transportation and increased county
staff salaries and fringe benefits.
FEMA Response: As explained above, FEMA details the types of
damages generally considered eligible for compensation under financial
loss in this paragraph in the IFR. This list, however, is not all
inclusive and FEMA will review each claim on a case-by-case basis to
determine whether or not the loss is eligible for compensation under
the Act. Claimants should submit all claims associated with business
loss for review and consideration. FEMA reminds claimants that they
must demonstrate that the financial loss was a result of the Fire. FEMA
does not believe changes to the regulatory text are required in the
Final Rule for claimants to seek financial losses if they can
demonstrate these losses were a result of the Fire.
Comment: Two commenters wrote that FEMA should provide funding to
allow for economic redevelopment and stimulus activities under business
and/or financial loss.
FEMA Response: As explained above, economic development can be
speculative and a claimant seeking compensatory damages for loss of
economic development would need to be able to demonstrate such loss was
a result of the Fire. The IFR currently provides the types of actual
compensatory damages that are compensable under the Act, but that list
is not all-inclusive. Claimants seeking compensation for actual
compensatory damages not specifically listed in the regulation can
still submit a claim for compensation under the Act. For this type of
claim, claimants should consider how these damages would be considered
actual compensatory damages to compensate claimants for injuries
resulting from the Fire consistent with the Act. FEMA does not believe
changes to the regulatory text are required in the Final Rule for
claimants to seek this type of compensation if they can demonstrate the
loss and that the loss resulted from the Fire.
1. Comments on Sec. 296.21(e)(1) Recovery Loans
Comment: One commenter wrote that claimants are carrying the cost
burden of paying interest on loans provided by the SBA and suggested
that FEMA define a process in coordination with the SBA such that when
an individual signs a Notice of Loss, any further payment of SBA
interest will be deferred.
FEMA Response: Section 296.21(e)(1) of the IFR provides
compensation for interest paid on recovery loans, including SBA loans,
and FEMA will cooperate with the SBA for procedures on the repayment of
those loans. While FEMA intends to compensate claimants for interest
paid on their SBA or other recovery loan, FEMA does not have the
statutory authority to defer payment of interest on SBA loans in the
interim.
2. Comments on Sec. 296.21(e)(2) Flood Insurance
Comment: Commenters suggested specific changes to this section of
the IFR. Specifically, commenters suggested the agency delete the two-
year limitation on flood insurance. Some commenters requested a five-
year period for flood insurance coverage while suggested a 10- or 15-
year period of coverage. Commenters also requested that these premium
payments be available as compensation for claimants that are not
required to purchase flood insurance.
FEMA Response: Section 104(d)(4)(C)(viii) of the Act provides for
payment of flood insurance premiums required to be paid on or before
May 31, 2024. FEMA expanded upon this section of the Act to provide
claimants with payment for flood insurance premiums even if the
claimant is not required to purchase flood insurance, as the agency
understands some claimants may have legitimate reasons for concern
around flooding even if they are not currently required to maintain
flood insurance. FEMA exercised the discretion in section
104(d)(4)(C)(x) to allow compensation for flood insurance premiums if
the claimant purchased flood insurance after the Fire due to the fear
of heightened flood risk. FEMA does not believe, however, that the
agency has the statutory authority to extend these payments beyond the
period set by Congress in the Act. The current regulatory text
sufficiently addresses the timeline and explains that both claimants
currently required to purchase flood insurance and those claimants that
purchase flood insurance based on their fear of heightened flood risk
will be compensated for their flood insurance premiums due on or before
May 31, 2024. As explained in the IFR, FEMA may provide flood insurance
to such claimants directly through a group or blanket policy. The terms
of that policy may allow for a longer period of coverage than the
annual renewals under the regular National Flood Insurance Program
Standard Flood Insurance Policy so long as the premium for that policy
is paid on or before May 31, 2024. Additionally, FEMA notes that the
Act provides for funding for heightened risk reduction to help
alleviate the long-term impacts of flooding. This funding under Sec.
296.21(e)(5) is available for claimants to file a claim until November
14, 2025.
Comment: One commenter wrote asking FEMA to clarify that an
increase in flood insurance premiums is allowable as an allowable
financial loss.
FEMA Response: As explained above, section 104(d)(4)(C)(viii) of
the Act provides compensation for payment of flood insurance premiums
paid on or before May 31, 2024. The current regulatory text
sufficiently addresses the timeline and explains that both claimants
currently required to purchase flood insurance and those claimants that
purchase flood insurance based on their fear of heightened flood risk
will be compensated for their flood insurance premiums paid on or
before May 31, 2024 even if those premiums increase. FEMA does not
believe changes to the regulatory text are required in the Final Rule
for this clarification.
3. Comments on Sec. 296.21(e)(3) Out-of-Pocket Expenses for Mental
Health Treatment
Comment: Commenters were generally supportive of this paragraph but
sought clarifications and an extension of the time for which expenses
would be compensated. Most commenters asked FEMA to consider the long-
term impacts of the Fire and extend the coverage of expenses beyond
2024. A commenter stated that negative mental and emotional impacts
would continue for decades, if not through the remainder of their
lives. Another commenter wrote that not all mental health impacts of
this major disaster were known to us now and would take additional time
to be identified and treated, recommending FEMA extend this
reimbursement deadline to treatments rendered by the end of 2025.
FEMA Response: FEMA appreciates the concerns raised by commenters
on the timeline associated with out-of-pocket mental health expenses.
In the IFR, FEMA limited this timeline to April 6, 2024, two years
after the date the Fire began. FEMA agrees that this timeline should be
extended and recognizes that mental health treatment may extend beyond
the deadline to file a claim. The Final Rule extends the deadline
allowing claimants to seek reimbursement for out-of-pocket mental
health treatment expenses for treatment identified on or before
November 14, 2024. FEMA is extending the deadline
[[Page 59756]]
until November 14, 2024 for consistency with the timeline to file a
claim under the Act to ensure that all treatment identified during that
period may be claimed. FEMA recognizes that mental health treatment may
extend beyond the deadline for filing a claim and claimants may also
reopen claims under Sec. 296.35 for good cause.
Comment: One commenter expressed confusion about whether or not
mental health treatment would be compensated. Other commenters
requested clarification that the mental health treatment expenses apply
to conditions that the Fire worsened.
FEMA Response: FEMA is revising Sec. 296.21(e)(3) in the Final
Rule to clarify that compensation will be available for out-of-pocket
mental health treatment expenses for conditions resulting from and
conditions that were worsened by the Fire. This change in the Final
Rule will ensure those victims whose conditions worsened as a result of
the Fire will be able to receive compensation for out-of-pocket mental
health treatment expenses.
Comment: Commenters also raised questions about personal injuries
and physical health conditions, raising questions about long-term
health effects because of exposure to contaminant and carcinogens and
other air and water pollutants as a result of the Fire and how FEMA
would cover those damages.
FEMA Response: As one commenter noted, FEMA defines injury in Sec.
296.4 to include personal injury consistent with the Federal Tort
Claims Act and personal injury damages are compensable under the Act.
FEMA lists the types of damages for which compensation may be awarded
for financial loss. This list, however, is not all inclusive and FEMA
will review each claim on a case-by-case basis to determine whether or
not the loss is eligible for compensation under the Act. Claimants
should submit all claims associated with personal injury for review and
consideration. FEMA does not believe changes to the regulatory text
from the IFR are required in the Final Rule given the definition of
injury clearly encompasses personal injury.
4. Comments on Sec. 296.21(e)(4) Donations
Comment: Most commenters generally supported extending the
timeframe provided for donations beyond the September 20, 2022
timeframe provided in the IFR. Three commenters supported changing the
timeframe for donations to one year after the Fire was contained. Two
of the three commenters disagreed on the appropriate date to reflect
one year after the Fire's containment with one commenter recommending
August 30, 2023 and another recommending FEMA change the date to August
21, 2023.
FEMA Response: FEMA agrees that the timeframe should be extended
and given the confusion regarding the timeline for the Fire's
containment, FEMA is changing the deadline in the Final Rule from
September 20, 2022 to November 14, 2022 to reflect the date the IFR was
published. FEMA seeks to balance the need to extend this deadline with
concerns raised by other commenters regarding the inclusion of
donations as allowable financial loss damages in the IFR. Setting the
timeframe for these donations to the IFR's publication date ensures
that those donations made to support those suffering from the Fire will
be compensated up until the date at which claimants had a better
understanding of how FEMA would provide for compensation for their
losses and the date when claimants could begin to pursue a claim under
the Act thus reducing the need to rely on these donations.
Comment: Two individual commenters opposed the inclusion of
donations in the regulation. A commenter wrote ``Voluntary and charity
is just that, given freely and without expectation of gain or
reimbursement. If that was the actual intent of the presence of these
organization in the area, then they should not be reimbursed for their
acts of charity and volunteering.'' Another commenter asked if there
were other programs that could compensate these organizations for the
donations provided to the people of impacted by the Fire. A different
commenter recommended FEMA prioritize payment of claims for property
loss, financial loss, and business loss before reimbursing claims for
voluntary donations.
FEMA Response: FEMA incorporated the ability to seek compensation
for financial loss for donations consistent with the Cerro Grande Fire
Assistance process. FEMA heard from the public that this Fire is
distinct in many ways from the Cerro Grande Fire and requires
differences in the process but believes the ability to compensate those
that provided donations should remain in the Final Rule given the
Hermit's Peak/Calf Canyon Fire's impact. FEMA understands that these
donations may have come from individuals, businesses, and other
entities not just charitable organizations whose sole purpose is
providing such services and wants to ensure those claimants are able to
seek compensation for their donation efforts to support the community.
Recognizing the concerns raised by these commenters as well as those
commenters that felt this was an important component of the IFR, FEMA
is extending but still limiting the timeframe available for those
seeking compensation for financial losses associated with donations to
the date the IFR was published. Setting the timeframe for these
donations to the IFR's publication date ensures that those donations
made to support those suffering from the Fire will be compensated up
until the date at which claimants had a better understanding of how
FEMA would provide for compensation for their losses and the date when
claimants could begin to pursue a claim under the Act thus reducing the
need to rely on these donations. FEMA also recognizes that donations to
injured parties are not considered a duplication of benefits and that
extension of the time frame would create the anomalous situation where
FEMA would be duplicating compensation. FEMA agrees with the commenter
that prioritization of claims should be focused first on claims for
property loss, financial loss, and business loss before reimbursing
claims for voluntary donations and will implement a process to ensure
this prioritization to the greatest extent possible.
5. Comments on Sec. 296.21(e)(5) Heightened Risk Reduction
Comment: Commenters generally opposed the formula for compensation
provided for heightened risk reduction efforts. Several commenters
recommended deleting the 25 percent formula for heightened risk
reduction efforts. A commenter wrote that the Act did not impose caps
on tree or mitigation damages. A different commenter wrote that the Act
addressed limits on damages, limiting them to `actual compensatory
damages measured by injuries suffered' and that the Act further placed
New Mexico law in a position subordinate to the terms of the Act itself
by allowing for New Mexico law to govern the calculation of damages.
Another commenter stated that ``these arbitrary Urban Centric caps do
not make victims whole as required by the Act but rather shorts the
landowners.''
FEMA Response: FEMA recognizes that this Fire is distinct from the
Cerro Grande Fire and that the formula for compensation utilized for
the Cerro Grande Fire Assistance process will not sufficiently address
the risk reduction needs for claimants in this Fire and is eliminating
the 25 percent formula from
[[Page 59757]]
the Final Rule. Specifically, FEMA is removing the language
``Compensation under this section may not exceed 25 percent of the
higher of payments from all sources (i.e., the Act, insurance proceeds,
FEMA assistance under the Stafford Act) for damages to the structure
and lot, or the pre-fire value of the structure and lot'' from the
Final Rule. FEMA also recognizes that compensation for risk reduction
is not generally compensable under New Mexico law.
Comment: Commenters also questioned the language in the IFR
requiring that claimants must complete the risk reduction project for
which they receive compensation. One commenter wrote that the
requirement that the risk reduction project must be completed before
compensation can be awarded was an incorrect reading of the Act. ``The
word `incurred' in Section 104(d)(4)(C)(vii) of the Act does not mean
`completed' or `paid.' Rather, the word `incur' means ``to become
through one's own action liable or subject to.' (Oxford English
Dictionary.) If a claimant has contracted for risk reduction work or
started but not completed the work for which he/she will be financially
responsible, the claimant has ``incurred'' the cost within the meaning
of the statute. Requiring the work to be completed before compensation
is awarded defeats the purpose of the Act to compensate fire victims
for their losses. Requiring work to be completed prior to compensation
defeats the intent of the Act and is patently unreasonable. To require
a wildfire victim to advance money to remediate the damage caused by
the Forest Service, but not be recompensed until the work is complete,
is not within the express language or intent of the Act.'' Another
commenter wrote that requiring completion of the risk reduction work
before compensation would be provided defeated the purpose of the Act
as many claimants would not be able to afford to do the work without
the compensation funds. This commenter stated that once a claimant
secured a contract for the risk reduction work, they would have
technically incurred the costs and the Act allows for advance or
partial payments before final settlement.
FEMA Response: FEMA disagrees with the commenters' reading of the
IFR that there is a requirement to complete the work before
compensation can be received. Rather, the IFR states that claimants
``must complete the risk reduction project for which they receive
compensation.'' FEMA does not require that the work be completed prior
to payment. Rather, the language requires applicants to complete the
work for which they receive compensation related to the risk reduction
project. FEMA understands that claimants may not have completed the
project at the time the claim for this compensation is filed and
anticipates these claims may include estimates for the work to be done
specifically by allowing claimants to amend their Notice of Loss by
November 14, 2025. Claimants must ultimately complete the risk
reduction project for which they receive compensation as failing to do
so would be contrary to the Act's purpose in providing compensation to
reduce these risks, and because the compensation provided would not
generally be otherwise available in litigation under New Mexico law.
FEMA retains the right to inspect real property. See Sec. 296.30.
Comment: One commenter suggested removing all language related to
the 25 percent formula as well as language regarding the deadlines
associated with filings and that claimants should consider current
building codes and complete the project for which they receive
compensation.
FEMA Response: FEMA agrees with the commenter regarding the formula
and is removing the sentence associated with it as explained above.
However, FEMA disagrees that the agency can and should remove the
remaining language in the IFR. The IFR provides a deadline by which
claimants must submit the claim for compensation for heightened risk
reduction efforts. This language is consistent with other sections of
the regulation where deadlines are provided, and the deadline provided
here is consistent with the Act. FEMA generally does not have the
statutory authority to extend this deadline. FEMA further believes
claimants should be encouraged to consider current building codes and
standards when completing heightened risk reduction projects as these
codes and standards should generally result in more resilient
rebuilding and likely will be mandatory under local building
ordinances. Finally, as explained above, claimants must complete the
risk reduction project for which they receive compensation as failing
to do so would be contrary to the Act's purpose in providing
compensation to reduce these risks. FEMA retains the right to inspect
real property. See Sec. 296.30.
Comment: One commenter requested that FEMA not attempt to reassure
claimants of the safety of rebuilding homes where they once stood as
the Fire impacts now made those areas extremely high-risk hazard zones.
FEMA Response: FEMA understands concerns about rebuilding
immediately after the Fire and will work with claimants to discuss how
these concerns can be addressed as part of the heightened risk
reduction process. The Act allows for these damages and FEMA is
required to provide actual compensatory damages to claimants seeking
them under the Act. FEMA does not believe any changes to this section
of the Final Rule are required to address this concern.
Comment: One commenter asked how heightened risk reduction loss
would be calculated and whether payment would be made for processes
completed and for those anticipated to be completed.
FEMA Response: Claimants seeking compensation for this loss should
submit the documentation they have showing costs incurred or expected
to be incurred as part of the heightened risk reduction project. As
explained above, the IFR states that claimants ``must complete the risk
reduction project for which they receive compensation.'' FEMA does not
require that the work be completed prior to payment. Rather, the
language requires applicants to complete the work for which they
receive compensation related to the risk reduction project. FEMA
understands that claimants may not have completed the project at the
time the claim for this compensation is filed and anticipates these
claims may include estimates for the work to be done specifically by
allowing claimants to amend their Notice of Loss by November 14, 2025.
Claimants must ultimately complete the risk reduction project for which
they receive compensation as failing to do so would be contrary to the
Act's purpose in providing compensation to reduce these risks. FEMA
retains the right to inspect real property. See Sec. 296.30.
Comment: Several commenters recommended FEMA add language to this
section to state that ``compensation under this section will not be
awarded for costs that have been reimbursed under FEMA's Public
Assistance Programs or by insurance.'' The commenters requested that
FEMA interpret this limitation liberally and in alignment with FEMA's
mission.
FEMA Response: FEMA appreciates the commenters' desire for clarity,
but the agency believes Sec. 296.21(e) resolves these concerns.
Specifically, the IFR at Sec. 296.21(e) states that FEMA is not
authorized to compensate claimants for damages paid by insurance.
Further, Sec. 296.21(f)(2) states that ``compensation will not be
awarded under the Act for injuries or costs that are eligible under the
Public Assistance Program.'' FEMA
[[Page 59758]]
does not believe revising the Final Rule as requested by the commenters
is necessary to meet the intent of the statute. FEMA notes the
commenters' desire for the agency to consider additional risk reduction
efforts to make individuals and communities more resilient than the
pre-Fire condition, but the Act limits FEMA's authority to compensate
claimants to the costs of reasonable efforts to reduce risks to levels
prevailing prior to the Fire. If a claimant seeks to implement a
heightened risk reduction project that will result in reduced risks
beyond the level prevailing at the time of the Fire, FEMA will consider
such a request on a case-by-case basis consistent with the agency's
discretion under the Act.
Comment: A commenter wrote regarding nature-based solutions,
stating that the science was well established, and that these solutions
were actively applied by the U.S. Forest Service to burned areas. The
commenter mentioned mulching, seeding, and replanting burned forest
ground as accepted means of reduction the risk of flood waters running
downslope.
FEMA Response: FEMA appreciates the commenter's response to the
agency's request for feedback regarding nature-based solutions. FEMA
continues to support implementation of these solutions where
appropriate and encourages claimants to consider nature-based solutions
as part of their claim for compensation under this provision.
Comment: One commenter recommended that FEMA develop some pre-
approved mitigation opportunities for homeowners, businesses, and other
entities to allow claimants to better determine the appropriate
projects for them. The commenter stated that this would allow the
Claims Office to automatically approve those projects with the present
dollar amount and thus not require every single specific claim go
through some arduous mitigation process.
FEMA Response: FEMA appreciates the suggestion for a pre-approved
project plan and associated cost formula. FEMA attempted to streamline
the process by offering the formula presented in the IFR and
understands there can be advantages to these types of schemes to better
assist claimants in receiving prompt payment. As explained above, FEMA
is revising the language in this paragraph to eliminate the 25 percent
formula that raised so many concerns with commenters. However, FEMA is
looking at ways to better streamline the claims process in response to
other comments and is considering offering payment formulas based on
specific project types as the commenter suggested. For example, FEMA is
considering a menu of potential actions claimants may take for
heightened risk reduction claims that would reduce claim review time
and streamline payment for those claims. Any such type of formula would
provide claimants with the option to either leverage that formula with
their claim or submit documentation detailing their specific damages
and costs.
K. Comments on Sec. 296.21(f) Insurance and Other Benefits Generally
Comment: As mentioned above, some commenters requested FEMA
eliminate references to other Federal government programs and their use
in the claims process. Commenters raised general concerns about the
burden placed on claimants to engage in other Federal programs and
expressed concerns about a lack of interagency cooperation.
FEMA Response: FEMA does not intend to require claimants to apply
to other Federal programs, except for FEMA's Public Assistance program.
Rather, the language was intended to clarify that, where the claimant
has received payment from another Federal program, FEMA will only be
able to compensate claimants under the Act for those costs not covered
already in the payment received from the other Federal program. This
avoids a duplication of payment for the same damage. Claimants have the
option of seeking assistance from other Federal programs, filing for
compensation under the Act, or pursuing both other Federal program and
compensation under the Act. The language in this section of the IFR
simply clarifies that FEMA cannot duplicate payment but can provide
additional payment to cover actual compensatory damages that were not
covered by other Federal programs. FEMA notes that the IFR only
prohibits payment under the Act for injuries or costs that are eligible
under the Public Assistance Program. The Act provides in section 104(k)
to waive the matching funds required for Federal programs and require
that those programs pay the cost share directly. This ensures that
those funds are taken from those Federal programs rather than the Act's
funding and thus helps further extend the ability of the Act to fund
compensation for claimants. Section 296.21(f)(2) of the IFR confirms
that FEMA will not pay claimants for injuries or costs that are
eligible under the Public Assistance Program but rather that these
injuries and costs need to be paid through the Public Assistance
Program and given the Act's provisions, FEMA is required to pay those
eligible costs at 100 percent without a cost share requirement for
State and local projects.
As explained above, FEMA is coordinating with other Federal
agencies to ensure data sharing and better communication between
programs. FEMA has engaged with and continues to engage with the Small
Business Administration, the Department of Agriculture, and other
Federal agencies to help facilitate coordination of the assistance
available to claimants and the impacted communities. Consistent with
the Act's requirements in section 104(g), FEMA is consulting with other
Federal agencies, and State, local, and Tribal authorities to ensure
the efficient administration of the claims process to include ways to
ensure claimants have the information they need regarding Federal
programs available to them.
Comment: One commenter requested FEMA streamline access to
available Federal programs and, in addition to funds appropriated under
the Act, to utilize other Federal funding opportunities when and where
available. The commenter asked that State Case Managers be integrated
into the program and trained as Navigators to serve as a single point
of contact to help claimants throughout the process. The commenter also
requested FEMA reopen Federal programs where deadlines may have passed
to submit applications to allow claimants the opportunity to take
advantage of those programs.
FEMA Response: FEMA anticipates that Claims Navigators will provide
the assistance envisioned by the commenter and additional staffing
outside of the Claims Office will not be required. FEMA is unable to
reopen non-FEMA Federal programs for claimants but can work with
claimants regarding Federal program availability generally and the
deadlines associated with FEMA-specific programs.
1. Comments on Sec. 296.21(f)(1) Insurance
Comment: Three commenters recommended FEMA delete all references to
insurance companies in the regulation.
FEMA Response: Section 104(d)(1)(C) of the Act requires FEMA to
reduce the amount paid for the claim by the amount that is equal to the
total of insurance benefits and other payments or settlements with
respect to the claim. FEMA does not have the statutory authority to
delete this requirement.
Comment: One commenter requested FEMA note that if an insurance
company has not paid all that FEMA anticipated, FEMA should commit to
awarding the difference at the time the
[[Page 59759]]
authorized official's determination is made.
FEMA Response: In the preamble to the IFR, FEMA stated that the
agency can award the difference at the time the Authorized Official's
determination is made. FEMA also noted in the preamble that the State
of New Mexico generally requires insurance companies to settle
catastrophic claims within 90 days of the date the claim was reported,
and the agency expects that most, if not all, insurance claims will be
paid before the determination is issued. FEMA further explained in the
IFR preamble that if the insurance claim is resolved after the
determination and the claimant is due additional compensation as a
result, the claim can be reconsidered under sections 296.34 or 296.35
of the IFR. FEMA believe this process is sufficient to resolve the
commenter's concerns and no changes to the regulatory text of the Final
Rule are required.
Comment: Another commenter stated that insurance companies will
demand compensation for the amounts they have paid or will pay to
insured claimants and found that to be fair. However, the commenter
stated that greed may influence the insurers claims and those claims
would then negatively affect claimant compensation.
FEMA Response: Section 104(d)(1)(A)(ii) of the Act requires FEMA to
place priority on claims submitted by injured parties that are not
insurance companies seeking payment as subrogees. Section 296.13 of the
IFR requires subrogees to file their Notice of Loss after they have
made all payments entitled to the injured person for Fire-related
injuries under the terms of the insurance policy. FEMA is amending
Sec. 296.13 to specifically clarify the prioritization required under
the Act. Further, Sec. 296.21(f) of the regulation requires FEMA to
compensate injured persons only for damages not paid or not to be paid
by insurance companies. As explained above, these provisions, in
addition to the changes made to Sec. 296.13 of the Final Rule, will
help ensure that the compensation available to injured persons is not
negatively affected.
Comment: One individual commenter expressed concerns that insurance
benefits would be impacted by claims under the Act and that claims
under the Act will impact insurance benefits.
FEMA Response: As explained above, Section 104(d)(1)(A)(ii) of the
Act requires FEMA to place priority on claims submitted by injured
parties that are not insurance companies seeking payment as subrogees.
Section 296.13 of the IFR requires subrogees to file their Notice of
Loss after they have made all payments entitled to the injured person
for Fire-related injuries under the terms of the insurance policy. FEMA
is amending Sec. 296.13 to specifically clarify the prioritization
required under the Act. Further, Sec. 296.21(f) of the regulation
requires FEMA to compensate injured persons only for damages not paid
or not to be paid by insurance companies. As explained above, these
provisions, in addition to the changes made to Sec. 296.13 of the
Final Rule, will help ensure that the compensation available to injured
persons is not negatively affected.
2. Comments on Sec. 296.21(f)(2) Coordination With FEMA's Public
Assistance Program
Comment: Some commenters requested FEMA remove references to the
Public Assistance Program as the deadlines have passed for that
program. Other commenters suggested the paragraph be reworded from
expecting claimants to apply for the program to encouraging them to do
so and to state that compensation under the Act will not be awarded for
damages already compensated by FEMA's Public Assistance Program instead
of all eligible costs.
FEMA Response: FEMA disagrees with the commenters seeking to delete
this provision of the IFR. FEMA is retaining this language in the Final
Rule as the agency believes it is important to clarify that those
injuries and costs eligible under the Public Assistance Program must be
paid from that program to ensure the funds are used consistently with
the Act's provision in section 104(k). FEMA understands that the Public
Assistance application period has closed but will continue to accept
these applications given the Act's requirements. Those entities
eligible for Public Assistance should continue to apply for and seek
assistance through that program.
Comment: One commenter requested that FEMA, in coordination with
the New Mexico Department of Homeland Security and Emergency
Management, assist claimants in applying for and receiving assistance
under the Public Assistance Program.
FEMA Response: As explained above, FEMA is coordinating with other
Federal agencies to ensure data sharing and better communication
between programs. FEMA has engaged with and continues to engage with
the Small Business Administration, the Department of Agriculture, and
other Federal agencies to help facilitate coordination of the
assistance available to claimants and the impacted communities.
Consistent with the Act's requirements in section 104(g), FEMA is in
consultation with other Federal agencies, and State, local, and Tribal
authorities to ensure the efficient administration of the claims
process to include ways to ensure claimants have the information they
need regarding Federal programs available to them.
Comment: A commenter requested compensation in several areas that
may qualify for the Public Assistance Program.
FEMA Response: Any claimant with an injury or costs that may be
eligible for Public Assistance should apply for Public Assistance. FEMA
understands that the Public Assistance application period has closed
but will continue to accept these applications given the Act's
requirements.
3. Comments on Sec. 296.21(f)(3) Benefits Provided by FEMA's
Individual Assistance Program
Comment: One commenter requested that FEMA amend this section to
make clear that if FEMA only partially compensated a claimant for
injuries or costs under the Individual Assistance Program that the
Claims Office will compensate the remainder of costs and injuries under
the Act.
FEMA Response: FEMA does not believe the language in the IFR
requires revision on this point. The current language provides that
FEMA will not award compensation under the Act for those injuries or
costs that have been reimbursed under the Individual Assistance
program. This language necessitates that those injuries or costs that
have not been fully reimbursed are eligible under the Act for
compensation. FEMA is not making any changes to the Final Rule in this
paragraph given the current language is sufficiently clear.
Comment: Two commenters requested FEMA clarify that temporary
emergency support and sheltering, as well as temporary housing costs
provided by FEMA should be considered in addition to the Act's funding
and should not impact an individual claim.
FEMA Response: FEMA disagrees with these commenters. FEMA cannot
pay for temporary housing costs under the Act if the individual has
already received payment for these expenses under the Individual
Assistance program as this would result in a duplication of payment.
These costs, however, would not be deducted from a real property claim.
Thus, if a claimant obtained a temporary housing unit through FEMA's
Individual Assistance program but sought compensation to rebuild their
home after the Fire, FEMA would fully compensate the claimant for the
costs associated with rebuilding
[[Page 59760]]
their home and would not deduct the costs associated with the
claimant's time in the temporary housing unit from the claim as these
are distinct costs.
L. Comments on Claims Evaluation
1. Comments on Sec. 296.30(a) Burden of Proof
Comment: Commenters raised a range of concerns about this
paragraph. Several commenters requested that FEMA consider alternative
ways of demonstrating ownership, particularly given the
multigenerational landowners in the region and lack of availability of
real estate sale amounts in the public record in New Mexico. A
commenter suggested FEMA pay attention to uninsured claimants and those
without ``proper'' paperwork, particularly those multigenerational
landowners. A different commenter stated that sale prices, appraisals,
and mortgage amounts were not public information in New Mexico, asking
how claimants seeking to prove the value of their land would get that
information.
FEMA Response: The burden of proof remains with the claimant to
demonstrate injuries resulting from the Fire, but, as explained above,
the Claims Office locally hired Navigators to assist claimants
compiling necessary documentation and completing the proof of loss in
support of the claim. When necessary, the Claims Office can fund
appraisals, surveys, or other data collections efforts to aid the
claimant in proving value or ownership of property. Further, as
explained in Sec. 296.30(a), FEMA may compensate a claimant for an
injury in the absence of supporting documentation on the strength of
other documentary evidence and an affidavit executed by the claimant.
Claims Office staff are aware of issues surrounding proof of ownership
for land and will work with each claimant to determine alternate
methods in determining ownership when deeds are not available. FEMA
will work with claimants on this issue and allow claimants the
flexibility to extend the deadline for submission of the Proof of Loss
where good cause to do so is found.
Comment: A commenter requested claims be assumed to be reasonable
and true with the burden of proof on the Federal government to disprove
the claim, stating that claimants should be allowed to ``self-certify''
their claims. One commenter wrote that claims should be assumed
reasonable and true, and that the burden of proof should be on the
Federal government to disprove the claim. This commenter also suggested
that claimants should be allowed to self-certify their claims under the
penalty of law.
FEMA Response: The burden of proof remains with the claimant to
demonstrate injuries resulting from the Fire. FEMA has a legal
responsibility to ensure that funds appropriated for claims under the
Act are used to pay valid claims. The agency cannot assume that all
claims are reasonable and true without appropriate supporting
documentation, as such a process would open the Act's funding to
significant fraud and abuse. To ensure the Act's funds are properly
paid to claimants that suffered injuries as a result of the Fire, FEMA
must review supporting documentation associated with each claim. As
explained in Sec. 296.30(a), FEMA may compensate a claimant for an
injury in the absence of supporting documentation on the strength of
other evidence and affidavits executed by the claimant and others.
Comment: Other commenters also requested the burden be placed on
FEMA to research their claims and if the burden was not shifted to
FEMA, that claimants should be able to utilize their own experts to
assist with their claim and should be reimbursed for the expert's
costs.
FEMA Response: As stated above, the burden of proof remains with
the claimant to demonstrate injuries resulting from the Fire. As
explained in Sec. 296.30(a), FEMA may compensate a claimant for an
injury in the absence of supporting documentation on the strength of
other evidence and affidavits executed by the claimant and others.
Additionally, Sec. 296.31(a) provides for the use of experts in the
process. FEMA is revising the IFR language regarding expenses for
experts as detailed below to help address this and other commenters'
concerns about the use of experts and the costs associated with doing
so. FEMA will work with claimants on this issue and allow claimants the
flexibility to extend the deadline for submission of the Proof of Loss
where good cause to do so is found pursuant to Sec. 296.30(b). FEMA
also provides flexibility in supplementing and reopening claims as
detailed in sections 296.34 and 296.35.
Comment: One commenter stated that while they understood that
providing proof of ownership was necessary and important for good
governance of the funds provided in the Act, they had concerns that the
burden of proof would be overly burdensome and difficult for some
claimants. The commenter recommended FEMA be flexible in determining
what documentation is required.
FEMA Response: As explained above, the burden of proof remains with
the claimant to demonstrate injuries resulting from the Fire. As
discussed above, the Claims Office locally hired Navigators to assist
claimants compiling necessary documentation and completing the proof of
loss in support of the claim. Further, as explained in Sec. 296.30(a),
FEMA may compensate a claimant for an injury in the absence of
supporting documentation on the strength of other evidence and
affidavits. Claims Office staff are aware of issues surrounding proof
of ownership for land and will work with each claimant to determine
alternate methods in determining ownership when deeds are not available
such as affidavits, utility bills and tax records. FEMA will work with
claimants on this issue and allow claimants the flexibility to extend
the deadline for submission of the Proof of Loss where good cause to do
so is found. The goal of the claims process is to reduce complexity and
provide assistance with the claims process to the extent possible.
2. Comments on Sec. 296.30(b) Proof of Loss
Comment: One commenter requested that claimants be able to ``self-
certify'' their claims under penalty of perjury.
FEMA Response: The burden of proof remains with the claimant to
demonstrate injuries resulting from the Fire. As explained above, FEMA
has a legal responsibility to ensure that funds appropriated for claims
under the Act are used to pay valid claims. The agency cannot assume
that all claims are reasonable and true without appropriate supporting
documentation, as such a process would open the Act's funding to
significant fraud and abuse. To ensure the Act's funds are properly
paid to claimants that suffered injuries as a result of the Fire, FEMA
must review supporting documentation associated with each claim. FEMA
does currently require that claimants submit claims under penalty of
perjury to help reduce the potential for fraud, but the agency is
unable to allow for self-certification of claims to ensure the good
governance of the Act's funds. As explained in Sec. 296.30(a), FEMA
may compensate a claimant for an injury in the absence of supporting
documentation on the strength of other evidence and affidavits executed
by the claimant and others.
Comment: Commenters raised questions about the deadline for
submitting a Proof of Loss. Commenters felt the 150-day period was too
short with some commenters stating they may not have information on
what damages would be covered by insurance or other
[[Page 59761]]
Federal and State government programs within that timeframe. Some
commenters suggested the time frame to provide proof of loss be
extended to no less than 270 days, especially in cases where expert
opinions/reports were needed for the claim.
FEMA Response: As the preamble to the IFR explained, claimants are
required to submit their Proof of Loss within 150 days of submission of
their Notice of Loss. Section 104(d)(1)(A)(i) of the Act states that
FEMA must determine the compensation due to a claimant within 180 days
of the date upon which the Notice of Loss is filed. To ensure FEMA
meets this mandate, claimants need to provide specific details about
their injuries by signing the Proof of Loss. FEMA recognizes the
challenges with these deadlines and intends to allow extensions where
such extensions are for the claimants' benefit. Claimants who submit
their Notice of Loss should submit a signed Proof of Loss to the Claims
Office not later than 150 days after the initial Notice of Loss was
submitted. Adherence to this deadline will leave FEMA with 30 days to
determine the compensation due to the claimant and enable the agency to
meet the 180-day timeframe required by Congress. FEMA also provides
that this deadline may be extended for good cause at the discretion of
the Director of the Claims Office.
Comment: Some commenters wrote they would be required to submit a
Proof of Loss Form with extensive supporting documentation by April 14,
2023 if the Notice of Loss was submitted as early as November 15, 2022
under the timeline provided in the IFR. These commenters stated this
was unfair as FEMA had not made available a Proof of Loss Form. These
commenters recommended a 250-day timeline to submit a Proof of Loss.
FEMA Response: As explained above, claimants are required to submit
their Proof of Loss within 150 days of submission of their Notice of
Loss. Section 104(d)(1)(A)(i) of the Act states that FEMA must
determine the compensation due to a claimant within 180 days of the
date upon which the Notice of Loss is filed, which is the date the
Notice of Loss is acknowledged by the Claims Office. FEMA would be
unable to fulfill this mandate if claimants do not provide specific
details about their injuries by signing the Proof of Loss. FEMA
recognizes the challenges with these deadlines and intends to allow
extensions where such an extension is for the claimant's benefit.
Claimants who submit their Notice of Loss should submit a signed Proof
of Loss to the Claims Office not later than 150 days after the initial
Notice of Loss was acknowledged. Adherence to this deadline will leave
FEMA with 30 days to determine the compensation due to the claimant and
enable the agency to meet the 180-day timeframe required by Congress.
FEMA also provides that this deadline may be extended for good cause at
the discretion of the Director of the Claims Office. FEMA notes that
the agency completed an emergency information collection associated
with the IFR for the Notice of Loss and Proof of Loss forms in November
2022.\54\ Those forms were revised in February 2023.\55\
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\54\ See OMB Control No. 1660-0155 found at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202211-1660-001 (last
accessed Mar. 1, 2023).
\55\ See OMB Control No. 1660-0155 revision found at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202302-1660-001 (last
accessed Mar. 1, 2023).
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Comment: Two commenters raised concerns about the 150-day deadline
for claimants to submit their Proof of Loss, stating FEMA had an
additional 180 days to respond to claims. One of the commenters wrote
``Also interesting is how 120-day response time limits are placed on
Hermit's Peak Fire victims while HPFAA Administrators and Reviewers and
such have 180-day limits to respond to victims submitted claims/
amendments and such while they are all drawing cushy government pay
checks the entire time they spend on claims assessment, judgement and
payment.''
FEMA Response: FEMA disagrees with the commenters' interpretation
of the timeline provided in the IFR. Claimants are required to submit
their Proof of Loss within 150 days of submission of their Notice of
Loss. Section 104(d)(1)(A)(i) of the Act states that FEMA must
determine the compensation due to a claimant within 180 days of the
date upon which the Notice of Loss is filed. This timeline gives FEMA
30 days to process the Proof of Loss to issue a determination on the
claim. Claimants who submit their Notice of Loss should submit a signed
Proof of Loss to the Claims Office not later than 150 days after the
initial Notice of Loss was submitted to ensure the Congressional
mandate for FEMA to process claims within 180 days can be met.
Comment: A commenter requested the deadline for the Proof of Loss
submittal be relative to the Notice of Loss Acknowledgement date, not
relative to the Notice of Loss submittal date. The commenter requested
that the deadline for Proof of Loss submittal should be made relative
to the Notice of Loss acknowledgement date, not relative to the Notice
of Loss submittal date like it says in the handouts. Another commenter,
however, commented that FEMA must pay claims within 180 days and that
the 180-day clock must begin when the claim is filed, not based on a
FEMA-determined milestone after the claim.
FEMA Response: The IFR in Sec. 296.30(b) currently provides that
the requirement to submit the Proof of Loss is 150 days from the date
the Notice of Loss was submitted. This language is sufficiently clear
without change, as FEMA has explained in additional guidance that
``submitted'' under the regulation is the date FEMA acknowledges
receipt of the Notice of Loss. Further, Sec. 296.10(f) explains that a
Notice of Loss is deemed to be filed on the date it is received and
acknowledged by the Claims Office. FEMA is thus not changing the Final
Rule language. The language in the IFR is consistent with the Act's
requirement to pay claimants within 180 days of the claim's submittal.
FEMA does not believe a Notice of Loss can be submitted until it has
been reviewed for sufficiency and receipt has been acknowledged by
FEMA. This review and acknowledgement of receipt benefits the claimant.
FEMA heard commenters above expressing concerns with the timeline to
submit a Proof of Loss and while the agency is limited in its ability
to extend that timeframe, allowing FEMA the time to review the Notice
of Loss and issuing an acknowledgement before starting the 150-day
timeline by which claimants must submit their Proof of Loss allows FEMA
to identify any initial challenges with the claim and provide the
claimant with initial guidance to update the Notice as required in
advance of starting to work on the Proof of Loss resulting in a better
overall claim and a more efficient review of that claim.
Comment: One commenter asked that the Proof of Loss be an iterative
process between FEMA and the claimant, allowing claimants to supplement
the Proof of Loss as appropriate.
FEMA Response: FEMA agrees. In Sec. 296.5, FEMA explains the
process will involve Claims Reviewers working with claimants to assist
in developing a strategy to obtain the documentation required for their
claim. FEMA anticipates Claims Reviewers will engage with claimants to
ensure the Proof of Loss is as comprehensive as possible at the time of
submission. Further, Section 296.34 explains the process to supplement
claims after submission of a Proof of Loss.
[[Page 59762]]
3. Comments on Sec. 296.30(c) Release and Certification Form
Comment: One commenter wrote about the feasibility of waiving
future claims given the extent of damages, losses, and expenses may not
be fully known at the time of the award. The commenter wrote that the
full extent of damages, losses, and expenses may not be known at the
time of award, and it was beyond anyone's ability to foretell those
future damages to claim them on their Notice of Loss. The commenter
suggested FEMA allow a lump sum payment of 15 percent of all injury,
damages, losses, and expenses to be added on to each claim to cover for
these future unknown items to resolve this concern.
FEMA Response: FEMA understands the concerns with waiving rights to
pursue further claims after accepting a final award, but section 104(e)
of the Act requires that payment made be final and conclusive with
respect to all claims on the same subject matter and that such payment
constitute a full release of all claims against the United States on
the same subject matter. FEMA is bound by this statutory language to
require a release for all final payments. As explained in Sec.
296.30(b), the deadline to submit a Proof of Loss may be extended for
good cause. Additionally, sections 296.34 and 296.35 allow claimants to
supplement and/or reopen claims. FEMA recognizes the latest deadline
for these actions is November 14, 2025; however, this deadline is
consistent with the Agency's statutory authority and FEMA does not have
the authority to further extend this deadline. Claims related to future
damages as a result of the Fire would need to be made through other
remedies as the Act sets a two-year limitation for claims under the
Act. FEMA is unable to pay lump sum payments to cover future unknown
injuries, as unknown injuries are speculative in nature and the Act
requires FEMA to pay for actual compensatory damages.
Comment: A commenter stated that a claimant's right to civil action
or other redress should not be waived or limited until a final payment
has been agreed to with FEMA and that it must be clear to claimants at
what point(s) in the process they are waiving their rights to further
legal action as well as how they can retain their right to further
legal action for different types of subject matter.
FEMA Response: An injured person who accepts an award under the Act
waives the right to pursue any claims arising out of or relating to the
same subject matter under the Federal Tort Claims Act or a civil
lawsuit. Similarly, those claimants who accept an award under the
Federal Tort Claims Act or a civil lawsuit waive the right to pursue
claims under the Act. Until the final award payment is accepted, the
claimant may pursue any and/or all of the options available. This
flexibility would allow for injured persons to pursue different avenues
of compensation until a final award is accepted. To ensure this is
clear in the Final Rule, FEMA is revising paragraphs (a) and (b) of
Sec. 296.12 to clarify that the injured person only waives the right
to pursue these options upon acceptance of a final award.
Comment: A commenter requested FEMA not seek to recover possible
overpayments where FEMA has made a material mistake, or to establish a
specific, short window of time after the Release is signed and denote a
value for which it would recover. The commenter wrote that allowing
FEMA to recover overpayments when a material mistake was made could
lead to a culture of distrust in which claimants were reluctant to seek
damages due to a fear that if the agency made a mistake, the claimant
could be held liable for repayment. The commenter recommended FEMA
either not recover possible overpayments, or to establish a specific,
short window of time after the Public Release is signed and denote a
value for which it would recover. Another commenter agreed, stating
FEMA's reclamation of costs due to an administrative mistake could
jeopardize local trust in the program and should be disallowed or
limited to extremely rare and clearly defined circumstances. One
commenter stated that once FEMA has made a payment to the claimant, any
errors made by FEMA should not be recoverable.
FEMA Response: FEMA appreciates the concerns raised by these
commenters, but the agency is legally obligated to recover funding
issued in error. The Act limits compensation to actual damages incurred
as a result of the Fire. If the claimant was not injured or did not
suffer damages as a result of the Fire and payment is made, such
payment is not compensation for actual compensatory damages. FEMA is
legally obligated to recover funds paid in situations of civil or
criminal fraud, misrepresentation, presentation of a false claim, and
where the claimant was not eligible for partial payment under the Act.
FEMA considers partial payments made where the claimant was not
eligible for the compensation to be a material mistake in Sec.
296.30(d). FEMA also notes that Congress provided appropriations for
the Department of Homeland Security's Office of the Inspector General
for oversight of activities authorized by the Act, including oversight
of payments made in error.\56\
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\56\ See Public Law 117-180, Division A, Section 136 (2022).
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M. Comments on Reimbursement of Claims Expenses
1. Comments on Sec. 296.31(a) Expert Opinions
Comment: Commenters generally opposed the requirement that FEMA
request an appraisal or other third-party opinion before such an
expense could be reimbursed under the Act. Most commenters requested
FEMA delete the requirement that FEMA request the appraisal or opinion.
Commenters stated they would not be made whole if they were not
reimbursed for expert opinions.
FEMA Response: FEMA heard commenters' concerns regarding this
provision in the IFR and is making changes to the Final Rule.
Specifically, the IFR language only allows for reimbursement if
requested by the Claims Office. FEMA is revising this paragraph in the
Final Rule to allow for reimbursement for reasonable costs incurred in
providing appraisals or other third-party opinions that the Claims
Office deems necessary to determine the amount of the claim. FEMA
recognizes the size and scope of this Fire, along with the geographic,
economic, and cultural distinctions between this Fire and the Cerro
Grande Fire, may result in claimants having to rely more frequently on
expert opinions in their claims process and is updating the Final Rule
to reflect this need. This revision will allow claimants to seek
reimbursement for reasonable costs incurred in obtaining expert
opinions that the Claims office reviews and agrees are necessary to
determine the amount of the claim. This revision in the Final Rule
provides more flexibility to claimants to seek expert opinions as part
of the claims process while also retaining good governance of the use
of the Act's funds to those opinions that are necessary to effectively
determine the claim amount.
Comment: Commenters stated that New Mexico law allowed for
compensation for expert opinions and that given the complexity of the
claims process, claimants needed experts to help value their claims.
FEMA Response: As explained above, FEMA is revising this paragraph
in the Final Rule to allow for reimbursement for reasonable costs
incurred in providing appraisals or other third-party opinions that the
Claims Office deems
[[Page 59763]]
necessary to determine the amount of the claim. This revision will
allow claimants to seek reimbursement for reasonable costs incurred in
obtaining expert opinions that the Claims office reviews and agrees are
necessary to determine the amount of the claim.
Comment: One commenter noted that there are very few appraisers or
title companies in the area.
FEMA Response: FEMA acknowledges the lack of experts in the area
and anticipates working with claimants to obtain appropriate resources
for these needed opinions.
Comment: Another commenter stated that many claimants had already
incurred costs for obtaining expert opinions and stated reimbursement
for those expenses would acknowledge that the recovery process did not
start when the Claims Office launched, but well in advance. Several
commenters agreed that FEMA should exercise discretion to pay the
reasonable costs of expert services obtained prior to the IFR's
publication.
FEMA Response: FEMA considered this approach when making the
decision to revise the language to this paragraph of the Final Rule.
However, FEMA felt this deadline would not fully address most
commenters' concerns with the ability to effectively value their claim
on their own and the need for experts to assist. The revision to the
Final Rule to allow reasonable costs for these opinions that the Claims
Office agrees are necessary regardless of when the opinion was
requested will provide more flexibility to claimants to seek expert
opinions as part of the claims process while also retaining good
governance of the use of the Act's funds to those opinions that are
necessary to effectively determine the claim amount.
Comment: A commenter requested that FEMA make available technical
assistance and expert services to claimants, including arborists,
surveyors, appraisers/adjusters, and engineers to help with the most
common losses.
FEMA Response: FEMA agrees and will work with claimants to identify
appropriate resources to assist with valuing claims as explained above.
Comment: One commenter requested compensation for a Habitat
Equivalency Analysis and GIS mapping as necessary to prove loss in the
most accurate way. One commenter suggested FEMA provide claimants with
access to all after-wildfire high-resolution aerial imagery of the Fire
area to determine the extent of the damage more accurately to private
forestlands as well as surrounding forestlands, stating the most recent
imagery is insufficient.
FEMA Response: FEMA recommends claimants seeking compensation for
expert opinions or resources submit their claim for reimbursement
explaining why the opinion and/or resource was required to effectively
value their claim. As explained above, if claimants are having
difficulty obtaining these opinions and/or resources, FEMA will work
with the claimant to assist in locating the resources needed to
effectively value their claim.
2. Comments on Sec. 296.31(b) Lump Sum Payments for Incidental
Expenses
Comment: Several commenters requested that FEMA pay for all
expenses associated with the claims process, removing the exclusion for
damages for time spent prosecuting a claim in Sec. 296.21(b) and
changing the lump sum payment in paragraph (b) to allow for full
recoupment of all expenses, including time. Some commenters focused in
on specific incidental expenses, requesting reimbursement for expenses
such as travel expenses and replacement of documents.
FEMA Response: As explained in the IFR, compensatory damages for
time spent in claims preparation are not considered actual compensatory
damages. There is no evidence Congress intended that claimants be
compensated for the value of their time in preparing a claim. Providing
compensation for a claimant's time would be difficult to administer, as
FEMA would have to determine equitably the value of a claimant's time
and to verify that claimants have expended the number of hours that are
claimed. FEMA's payments under the Act are subject to independent audit
by the GAO and the DHS OIG and claimants would likely find attempts by
auditors to verify the payment for hours spent in the claims process
highly intrusive. Additionally, the type of compensation requested by
commenters here would require production of receipts and other
documentation, resulting in an overly burdensome process for this
payment to claimants contrary to other comments requesting the agency
streamline and simplify the claims process. As explained in the IFR,
FEMA is choosing to exercise discretion to provide a lump sum payment
to claimants for miscellaneous and incidental expenses incurred in the
claims process. FEMA will provide a lump sum payment of five percent of
the insured and uninsured loss (excluding flood insurance premiums),
not to exceed $25,000. The minimum lump sum payment is $150. Section
296.31(b) of the IFR represents a fair and reasonable accommodation
between the agency's responsibility to spend Federal funds wisely and
the desire to compensate claimants as fully as possible.
Comment: One commenter suggested FEMA partner with a trusted local
financial institution to carry out payment of approved claims expense
reimbursements to help ensure prompt, complete, and correct payments to
approved claimants.
FEMA Response: The current claims process requires claimants to
provide FEMA with information on how they want to be paid, either by
electronic funds transfer or check. No third-party financial
institution is required for these transactions.
Comment: Two commenters recommended that subrogation claimants and
those claimants whose only Fire-related loss is for flood insurance
premiums should be eligible if their property was not previously
designated in a flood zone but is now considered to be in one as a
result of the Fire.
FEMA Response: FEMA disagrees that these claimants should be
eligible for a lump sum payment for incidental expenses incurred in
their claims preparation. Subrogees are generally insurance companies,
and their industry involves claims review and preparation. These
entities have no legal right to pursue expenses for claims preparation.
The burden placed on those claimants only seeking flood insurance
premiums is minimal, as the only claim made is for flood insurance
premiums and the documentation needed to support such a claim would be
very limited compared to other claims. To ensure the funding provided
under the Act is utilized to compensate claimants as fully as possible
while also ensuring Federal funds are wisely spent, these claimants
should not be eligible for a lump sum payment for incidental expenses.
FEMA is retaining the language in paragraph (b) in the Final Rule
making these types of claimants ineligible for the lump sum payment.
N. Comments on Sec. Sec. 296.34 and 296.35 Supplementing Claims and
Reopening a Claim
1. Comments on Sec. 296.34 Supplementing Claims
Comment: A few commenters sought clarification and/or revision to
this section of the IFR. One commenter asked if claimants made an error
whether they were allowed to file again.
FEMA Response: As explained in the IFR, there is flexibility built
into the process for claimants to tell FEMA
[[Page 59764]]
about injuries and damages that they could not have discovered or did
not remember when they signed the Notice of Loss or Proof of Loss. This
may also include situations where a claimant makes an inadvertent
error. Sections 296.34 and 296.35 explain this flexibility. Section
296.34 allows claimants to supplement their claim by working directly
with a Claims Reviewer prior to submitting their Proof of Loss. If a
claimant is not prepared to sign a Proof of Loss within the timeframe
required, an extension may be requested from the Director of the Claims
Office. Alternatively, the claimant may withdraw the claim and re-file
the claim before November 14, 2024. Once the Proof of Loss is filed, a
claimant can request to supplement their claim by writing to the
Director of the Claims Office providing the reasons why the claim needs
to be supplemented. The claimant should consult with the Claims
Reviewer about the procedure for obtaining permission from the Director
of the Claims Office.
Comment: Several commenters requested FEMA update the supplementing
claims section of the regulation to simplify the process for
supplementing claims and eliminate references to the Administrative
Appeals process. These commenters wrote that requiring claimants to
supplement a claim pursuant to comparatively complex adjudicatory-like
procedures undermined FEMA's intent to create a simple claims process
that is sensitive to the burdens already placed upon claimants by the
Fire.
FEMA Response: FEMA disagrees with the commenters' suggestion that
incorporating language on the Administrative Appeals process in this
section of the regulation complicates the process. Section 296.34
allows claimants to supplement their claim by working directly with a
Claims Reviewer prior to submitting their Proof of Loss. If a claimant
is not prepared to sign a Proof of Loss within the timeframe required,
an extension may be requested from the Director of the Claims Office.
Once the Proof of Loss is filed, a claimant can request to supplement
their claim by writing to the Director of the Claims Office providing
the reasons why the claim needs to be supplemented. The claimant should
consult with the Claims Reviewer about the procedure for obtaining
permission from the Director of the Claims Office. The Director of the
Claims Office will then directly review the additional claim consistent
with how the Director reviews claims in the Administrative Appeal
process. By providing for the procedures used in the Administrative
Appeal process, FEMA ensures that the supplemental claims information
is reviewed directly by the Director after the Authorized Official's
determination is issued on the remainder of the claim. If the claimant
decides to appeal the Authorized Official's determination on other
injuries, the Director of the Claims Office will decide both matters in
a single appeal proceeding to expedite processing. Alternatively, the
claimant may withdraw the claim and re-file the claim once before
November 14, 2024, when the injuries are better defined. The process
provided for in Sec. 296.34 is sufficient and not overly burdensome on
the claimant.
Comment: A commenter requested that FEMA allow claims to be
reopened and supplemented in response to future flooding events.
FEMA Response: As explained above, there is flexibility built into
the process for claimants to tell FEMA about injuries and damages that
they could not have discovered or did not remember when they signed the
Proof of Loss, including future flooding events. Sections 296.34 and
296.35 allow claimants to supplement and/or reopen claims respectively.
2. Comments on Sec. 296.35 Reopening a Claim
Comment: A few commenters sought clarification and/or revision to
the reopening claims section of the IFR. Most of these commenters were
concerned about the deadline to reopen a claim, stating additional
damages may be experienced. One commenter asked how to proceed where
their claim is paid, and they then suffer additional damages from
flooding seeking clarification on whether they should file another
Notice of Loss.
FEMA Response: FEMA recognizes that damages may continue beyond the
deadline for submitting a claim. The agency is generally bound by the
Act's requirements for claims to be submitted within two years of the
IFR's publication. In the IFR, FEMA allows for claimants to reopen
their claims for up to an additional year after submitting their
initial claim.
Comment: One commenter requested that FEMA allow a lump sum payment
of 15 percent of all injuries, damages, losses, and expenses to be
added on to each claim to cover for future unknown items.
FEMA Response: As explained above, FEMA recognizes that damages may
continue beyond the deadline for submitting a claim. The agency is
generally bound by the Act's requirements for claims to be submitted
within two years of the IFR's publication. In the IFR, FEMA allows for
claimants to reopen their claims for up to an additional year after
submitting their initial claim. Claims related to future damages as a
result of the Fire would need to be made through other remedies as the
Act sets a two-year limitation for claims under the Act. FEMA is unable
to pay lump sum payments to cover future unknown injuries, as unknown
injuries are speculative in nature and the Act requires FEMA to pay for
actual compensatory damages. To the extent that a claimant is able to
reasonably quantify expected future losses, future losses are
compensable.
Comment: Two commenters recommended FEMA insert ``real property''
in place of ``home'' in this section to ensure that this clause is not
limited to homes but includes all real property.
FEMA Response: FEMA concurs with this recommendation and is
amending the IFR language that limits the close of the sale to a home.
FEMA agrees with commenters that changing the language to address the
sale of real property instead of a home is more appropriate and is
revising Sec. 296.35 to reflect that those claimants could reopen a
claim if they closed on the sale of real property and wish to present a
claim for a decrease in the value of the real property under Sec.
296.21(c)(3). This change is consistent with concerns raised by
commenters that the Cerro Grande Fire Assistance process was not
necessarily appropriate to this Fire given the distinct geographic,
economic, and cultural considerations of the impacted communities. As
explained above, this Fire impacted significant forested areas and more
rural areas than the Cerro Grande Fire. This change in the Final Rule
more appropriately reflects the Hermit's Peak/Calf Canyon Fire
claimants' needs by including all real property.
Comment: Several commenters requested FEMA update this section of
the regulation, providing specific suggestions to revise the section on
reopening claims to separate out claims for heightened risk reduction,
the sale of real property, reconstruction, and good cause, as well as
providing an open-ended deadline for submission of reopened claims
allowing a deadline to be set in the future via a Federal Register
notice.
FEMA Response: Section 296.35 provides for reopening a claim after
the claimant has submitted a Release and Certification Form again with
the goal to allow claimants an opportunity to request damages in excess
of those previously awarded. Claimants can use
[[Page 59765]]
the reopening provision of this section to seek compensation for an
injury not previously reported to FEMA in circumstances where claimants
seek heightened risk reduction compensation under Sec. 296.21(e)(5);
the claimant closed the sale of a home and wishes to present a claim
for a decrease in the value of the real property under Sec.
296.21(c)(3); the claimant has incurred additional losses under Sec.
296.21(c)(1) as part of a reconstruction in excess of those previously
awarded; or where the Director of the Claims Office determines good
cause exists to reopen the claim. While FEMA does not believe the
current language in the IFR needs to be restructured as these
commenters suggested in the Final Rule, FEMA recognizes that damages
may continue beyond the deadline for submitting a claim. FEMA plans to
consider and incorporate future losses into the claims valuation
methodology, where appropriate. In the IFR, FEMA allows for claimants
to reopen their claims for up to an additional year after submitting
their initial claim. FEMA is revising Sec. 296.35 consistent with the
commenter's request to use the Cerro Grande process to extend the
deadline where reconstruction costs under Sec. 296.21(c)(3) exceed the
previously paid claim or for good cause. FEMA will issue notice in the
Federal Register and at https://www.fema.gov/hermits-peak of this
future deadline. FEMA believes this change is consistent with the prior
Cerro Grande process and will help ensure claimants are compensated for
their actual damages as a result of the Fire.
3. Comments on Sec. 296.37 Confidentiality of Information
Comment: One commenter stated the Federal government is responsible
for providing the right to privacy to claimants. One commenter raised
concerns about privacy violations with local hires.
FEMA Response: FEMA agrees that the Federal government is
responsible for ensuring confidentiality for private information
submitted by claimants. Section 296.37 provides that confidential
information submitted by individual claimants is protected from
disclosure to the extent permitted by the Privacy Act. The Privacy Act
protects the confidentiality of information provided by individual
claimants. This information may only be disclosed with the consent of
the claimant or pursuant to a routine use, which has been disclosed to
the public. Confidential, proprietary, and trade secret information
provided by entities, such as business, Indian Tribes, Tribal entities,
and government agencies, are not eligible for Privacy Act protection,
but may be exempt from disclosure under the Freedom of Information Act.
All FEMA employees are obligated to follow the Privacy Act
requirements, whether they are local hires or not and FEMA will ensure
that all employees receive appropriate training on the Privacy Act.
O. Comments on Sec. 296.41 Administrative Appeal
Comment: Commenters raised concerns and questions about the appeals
process provided in Sec. 296.41. Some commenters asked for more detail
in the regulation regarding the appeals process. A commenter wrote that
the regulations were unclear as they did not outline under which
circumstances a victim could appeal FEMA's decision, nor a timeline of
the appeals process. The commenter asked that if a claimant wished to
appeal, must the claimant appeal the entire award, or could the appeal
be limited to the portion of the award to which the claimant objects.
The commenter also asked if a claimant wished to have their case heard
in the United States District Court, did that mean that the claimant
had to file a Federal Tort Claim and begin the process from square one,
or would the District Court review the award given by FEMA for legal
error and the standard of review if heard by the District Court. The
commenter further asked if there would there be an opportunity for
appellate review thereafter.
FEMA Response: The current regulatory text is sufficient to provide
claimants with a general understanding of the process and that details
of the process are more appropriate for additional guidance or
procedural documents, not the regulation. The regulation states that in
their appeal, a claimant should identify the portion of the Authorized
Official's determination they believe is incorrect, whether that be the
entire claim or just certain portions of the claim. The regulation also
enables the claimant to supplement the record with additional
documentary evidence supporting the appeal. After the appeal is
decided, if the claimant continues to be dissatisfied with the
determination, the claimant can pursue arbitration pursuant to Section
104(h)(3) of the Act or elect to seek record review of the decision in
the Federal District Court for the District of New Mexico pursuant to
Section 104(i) of the Act. Alternatively, the claimant can elect not to
pursue compensation through the Hermit's Peak/Calf Canyon Claims Office
and elect to pursue their other legal remedies against the United
States as explained in the Act.\57\
---------------------------------------------------------------------------
\57\ See Sections 104(h)(1)(B) and 104(h)(1)(C) of the Act.
---------------------------------------------------------------------------
Comment: Two commenters raised questions about how the appeals
process would work, asking what happened if claimants did not accept
the Authorized Official's final determination but chose not to appeal
while another commenter asked if claimants would be allowed to choose
their own attorney if they file an appeal.
FEMA Response: If a claimant opts not to appeal and does not accept
the final determination, the claimant remains free to pursue other
remedies as detailed in the regulation at Sec. 296.12. Claimants that
wish to have legal representation may select their own counsel at any
point in the claims process.
Comment: FEMA received one comment in support of the IFR's
allowance for either the Claims Office Director or the claimant to
request a conference. The commenter, however, requested additional
changes to the IFR. The commenter wrote ``I support this Interim Rule,
with two caveats. First, to be fair and effective, attorneys
representing claimants must be involved with their clients in either
conferences or mediations. Second, mediators must be qualified and
independent. In other words, they cannot be employees or
representatives of FEMA or any other branch or agency of the United
States Government. Th[e]s[e] changes would make the proposed conference
and mediation process comport with ordinary and fair claims processing
practice.''
FEMA Response: As explained above, claimants that wish to have
legal representation may select their own counsel at any point in the
claims process. With an appropriate Privacy Act waiver, which is
included in the Notice of Loss form, FEMA will ensure attorneys are
allowed to participate with claimants in any and all parts of the
Claims Process, up to and including any appeal-related conferences and
arbitration of the claim. The Arbitration Administrator will maintain a
list of qualified arbitrators who have agreed to serve. The Claims
Office is using a contracting vehicle to engage independent arbitrators
to serve as Claims Office arbitrators. Where possible, the Claims
Office will use arbitrators that are local to New Mexico. The
arbitrations will be decided by one arbitrator if the amount in dispute
is $500,000 or less and a panel of three arbitrators if the amount in
dispute exceeds $500,000. Arbitrators will be
[[Page 59766]]
assigned by the Arbitration Administrator through a random drawing.
Comment: One commenter requested FEMA allow claimant's attorney to
be notified and included throughout the entire hearing process. The
commenter also requested that the rule be changed to allow the claimant
to discover the evidence and opinions of those considered or proffered
by the Claims Office against the claimant.
FEMA Response: As explained above, claimants that wish to have
legal representation may select their own counsel at any point in the
claims process. With an appropriate Privacy Act waiver, which is
included in the Notice of Loss form, FEMA will ensure attorneys are
allowed to participate with claimants in any and all parts of the
Claims Process, up to and including arbitration of the claim if the
claimant elects to proceed to arbitration. As required by the Privacy
Act, 5 U.S.C. 552a, and implemented through Claims Office procedure,
claimants always have access to their entire claims files. Moreover,
FEMA is working to establish the System of Record, Claim and Loss
Information Portal (CLIP), that will have a public facing portal where
claimants can choose to create a secure account to review the status of
their claim and upload documentation related to their Proof of Loss.
Comment: Another commenter suggested FEMA allow for in-person
conferences and hearings as often as possible.
FEMA Response: Section 296.41(g) of the IFR states that hearings
will generally be conducted virtually, but also allows the Director of
the Claims Office to convene an in-person hearing at a location in New
Mexico designated by the Director. The IFR language allows for in-
person hearings and claimants can request in-person hearings if they
prefer. FEMA does not believe the IFR requires amendment to allow for
in-person hearings and is not revising the Final Rule.
P. Comments on Sec. 296.42 Arbitration
Comment: Three commenters stated that expenses incurred for
arbitration should be covered as compensatory damages.
FEMA Response: It is unclear what the specific arbitration expenses
are that are referenced in this comment. Generally, the Claims Office
will pay all the fees and expenses of the arbitrator(s), as well as any
associated fees and expenses for securing a location to hold the
arbitration. The claimant is responsible for any expenses they incur,
including travel costs. As explained in the IFR, compensatory damages
for time spent in claims preparation are not available under New Mexico
law or the Federal Tort Claims Act. Moreover, there is no evidence
Congress intended that claimants be compensated for the value of their
time in preparing a claim. Providing compensation for a claimant's time
would be difficult to administer, as FEMA would have to determine
equitably the value of a claimant's time and to verify that claimants
have expended the number of hours that are claimed. FEMA's payments
under the Act are subject to independent audit by the GAO and the DHS
OIG and claimants would likely find attempts by auditors to verify the
payment for hours spent in the claims process highly intrusive.
Additionally, the type of compensation requested by commenters here
would require production of receipts and other documentation, resulting
in an overly burdensome process for this payment to claimants contrary
to other comments requesting the agency streamline and simplify the
claims process. As explained in the IFR, FEMA is choosing to exercise
discretion to provide a lump sum payment to claimants for miscellaneous
and incidental expenses incurred in the claims process. FEMA will
provide a lump sum payment of five percent of the insured and uninsured
loss (excluding flood insurance premiums), not to exceed $25,000. The
minimum lump sum payment is $150. Section 296.31(b) of the IFR
represents a fair and reasonable accommodation between the agency's
responsibility to spend Federal funds wisely and the desire to
compensate claimants as fully as possible.
To the extent the commenter is requesting that attorney's fees be
compensated by the Claims Office, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\58\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. Further, the ``American
Rule,'' generally applicable in civil litigation and initially accepted
by the United States Supreme Court in the case of Arcambel v.
Wiseman,\59\ provides that in the absence of a statute indicating
otherwise, each party is responsible for paying their own attorney
fees. FEMA designed the claims process so that claimants will receive
all eligible compensation without the need to engage the services of an
attorney, and the Claims Office hired Claims Navigators to assist
claimants compiling necessary documentation and with the Proof of Loss.
Although claimants have the right to hire an attorney, one is not
required.
---------------------------------------------------------------------------
\58\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\59\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: A commenter requested FEMA allow for in-person conferences
and hearings as often as possible. Another commenter also suggested
that these hearings take place in person and in the county of loss as
virtual hearings are challenging because of limited or no broadband
service in many areas impacted by the Fire.
FEMA Response: Section 296.42(d) of the IFR states that hearings
will generally be conducted virtually, but also allows the arbitrator
to convene an in-person hearing at a location in New Mexico designated
by the Arbitration Administrator. The IFR language allows for in-person
hearings and claimants can request in-person hearings if they prefer.
FEMA does not believe the IFR requires amendment to allow for in-person
hearings and is not revising the Final Rule.
Comment: Comments were also received on the independence,
selection, and qualifications of arbitrators. One commenter requested
the list of qualified arbitrators be provided by an independent source
outside of FEMA. Commenters asked about the independence of arbitrators
hired by FEMA. One commenter stated ``I seriously question the
independence of an arbitrator who is both hired by and paid by FEMA . .
. The one time in the past when I had to go to binding arbitration, the
arbitrators were chosen from a board of independent arbitrators, not
someone who was hired by the plaintiff or the defendant I should say in
this case.'' Another commenter stated, ``I have never seen where the
arbitrators brought in and both sides don't get to eliminate based on
how that arbitrator rules his rulings.'' A different commenter
requested that arbitrators be from New Mexico as they needed to be
aware of the culture, the livelihood, the history, the importance of
the people in the impacted communities. Another
[[Page 59767]]
commenter suggested that the arbitrators should be people who know New
Mexico law.
FEMA Response: FEMA understands the concerns raised by commenters
regarding the selection of arbitrators for the claims process. These
concerns are best addressed in policy and procedure documents
associated with the claims process and not the regulations. FEMA is
thus not making changes to the Final Rule regarding this issue.
Q. Comments on the Rulemaking
Comment: One commenter wrote on the lack of public comments posted
with over half of the comment period completed and asked what FEMA was
doing to publicize how to comment on the rulemaking. The commenter also
asked questions about the availability of a local library for people to
use the internet for public comment submission and suggested local FEMA
offices accept verbal comments that could be posted online.
FEMA Response: FEMA received over 190 written comments on this rule
in addition to over 100 comments during six public meetings held during
the comment period across the area impacted by the Fire. FEMA provided
public outreach to include News Releases, Media Advisories, and
targeted communications to Federal, State, and local officials and
their staff in New Mexico to help promote the process for submitting
comments to https://www.regulations.gov. As explained above,
transcripts of the public meetings were posted to the docket at https://www.regulations.gov to allow the public the opportunity to review
comments made during these meetings if unable to attend.
Comment: A commenter asked how out-of-state property owners would
be notified of the Act and suggested FEMA obtain a list from the
assessor's office to mail those individuals information.
FEMA Response: The IFR was published in the Federal Register at
https://www.federalregister.gov/documents/2022/11/14/2022-24728/hermits-peakcalf-canyon-fire-assistance and also via print publication
at 87 FR 68085 on November 14, 2022. The Federal Register is national
in scope and this notice in addition to the information provided at
https://www.fema.gov/hermits-peak constitute sufficient notice to out-
of-state property owners.
Comment: One commenter requested that FEMA provide access to the
Federal Register to claimants.
FEMA Response: FEMA provided access to the IFR by providing the
link to the Federal Register containing the IFR at https://www.fema.gov/hermits-peak. Additionally, as explained above, the IFR
was published in the Federal Register at https://www.federalregister.gov/documents/2022/11/14/2022-24728/hermits-peakcalf-canyon-fire-assistance and also via print publication at 87 FR
68085 on November 14, 2022.
Comment: Two commenters sought virtual means of attending the
public meetings on the IFR.
FEMA Response: FEMA was unable to provide video conferencing or
virtual attendance options during these meetings as they were not held
in FEMA facilities. FEMA provided an explanation of this challenge in
the Notice of Additional Public Meetings published on December 9, 2022.
Transcripts of all public meetings are available on the docket at
https://www.regulations.gov.
Comment: A commenter stated that that they were unable to hear a
comment during a public meeting. Another commenter stated that the
transcripts from the public meetings had not been posted to the public
docket as of January 6, 2023 and suggested that all public meeting
transcripts be posted preferably 72 but not less than 48 hours before
the comment period closed.
FEMA Response: Transcripts of all public meetings are available on
the docket at https://www.regulations.gov. FEMA understands the
commenters' concerns about the timing of posting these transcripts and
the agency worked diligently to have all of the transcripts posted
prior to the end of the public comment period. Two transcripts were
posted on January 9, 2023. Three transcripts were posted on January 12,
2023, and the remaining transcript from the last public meeting was
posted on January 13, 2023 in advance of the close of the public
comment period. Given the volume of public meetings made available and
the availability of the transcripts in advance of the close of the
comment period provided sufficient opportunity for the public to either
attend and/or review the meeting transcripts in advance of submitting
any comments on the rule. FEMA notes that over 100 comments were
received during the six public meetings held and over 50 comments were
received on the last day of the comment period.
Comment: Another commenter stated that FEMA may be having too many
meetings as the meetings were taking a toll on the community and
another commenter at that meeting also agreed, stating the meetings
just felt like lip service and asked for progress on the Final Rule and
changes to issues raised during meetings such as reforestation.
FEMA Response: FEMA has worked diligently to the review and
adjudicate all of the comments received on the IFR. FEMA is publishing
this Final Rule in less than 8 months after the public comment period
closed. This timeframe demonstrates the agency's commitment to
expeditiously process claims under the Act and resolve outstanding
concerns of the community regarding the Act's implementation by FEMA.
Comment: One commenter suggested FEMA post responses to comments
while a commenter at a public meeting suggested that FEMA publish a
table that lists the comments and FEMA's responses.
FEMA Response: FEMA is providing responses to comments received as
a result of the rulemaking process in this Final Rule.
Comment: One commenter suggested that when fee or reimbursement
schedules were developed, to allow for notice and comment and another
commenter at a public meeting agreed.
FEMA Response: FEMA appreciates this suggestion and if FEMA decides
to proceed with payment formulas as discussed above, FEMA will consider
whether notice and comment would be appropriate for such formulas at
that time.
Comment: One commenter requested the opportunity to comment on the
Final Rule.
FEMA Response: The rulemaking process as set forth in the
Administrative Procedure Act does not require an agency to accept
comment on a Final Rule.\60\ Further information on the rulemaking
process can be found at https://www.federalregister.gov/uploads/2011/01/the_rulemaking_process.pdf.\61\
---------------------------------------------------------------------------
\60\ 5 U.S.C. 553.
\61\ Last accessed Mar. 1, 2023.
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R. Other General Comments
1. Comments on the Fire Footprint and Loss
Commenters sought clarification and offered suggestions regarding
claimants' eligibility outside of the Fire's immediate footprint.
Comment: One commenter indicated that people and businesses outside
the Fire's direct footprint were impacted and should be compensated.
This commenter wrote that many people and businesses outside of the
Fires' direct footprint were impacted due to things like the forest
closures during fire response as well as the months following. A
different commenter suggested relief be provided to New Mexico
residents that do not live in the
[[Page 59768]]
direct area of the fire as their business experienced a significant
loss due to the Fire and damage to property in the impacted area. A
commenter asked whether there was a geographic boundary for who is
eligible to file a claim, explaining how the Fire impacted several
counties with evacuations. Another commenter stated that the flooding
impacted communities downstream from San Miguel and Mora counties and
that there were several businesses impacted as well in those areas.
However, another commenter requested claims be limited to residents of
a specific geographic area. The commenter requested that FEMA limit
claims to only residents and property owners in Mora and San Miguel
Counties and bordering areas of neighboring counties stating that the
funding that had been allocated to these victims was far from
sufficient to cover the immediate, obvious loss that the people
experienced with the Fire.
FEMA Response: The Act recognizes that injured persons can seek
compensation for actual compensatory damages for injuries incurred as a
result of the Fire. There are no geographic limitations on this
compensation beyond the claimant demonstrating they were injured as a
result of the Fire. While the disaster declarations were limited to
specific counties and further narrowed by the FEMA program,\62\ the Act
has no such limitations. FEMA thus anticipates receiving and processing
claims for any claimant suffering injury as a result of the Fire and
seeking actual compensatory damages.
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\62\ See DR-4652-NM found at https://www.fema.gov/disaster/4652
(last accessed Mar. 1, 2023).
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2. Other General Comments
Comment: A commenter expressed concern that FEMA was not seeking
input from local leadership knowledgeable in the local culture and
business and regulatory processes while a commenter at a public meeting
requested accountability to local groups who are responsible for long-
range recovery planning.
FEMA Response: Consistent with the Act's requirements in section
104(g), FEMA is in consultation with other Federal agencies, and State,
local, and Tribal authorities to ensure the efficient administration of
the claims process and provide for local concerns.
Comment: One commenter suggested FEMA involve the United States
Attorney for the District of New Mexico or the New Mexico State
Attorney General to ensure the regulations follow New Mexico law.
FEMA Response: As explained above, section 104(g) of the Act
requires FEMA to consult with other Federal agencies, and State, local,
and Tribal authorities to ensure the efficient administration of the
claims process. FEMA has consulted and continues to consult with
Federal, State, local, and Tribal authorities consistent with the Act's
requirements. FEMA consulted with a range of relevant Federal, State,
and local agencies and governments. FEMA also completed a Tribal
consultation as part of the regulatory process.
Comment: One commenter suggested that FEMA review the minutes of
the meeting held by Representative Fernandez' in Mora after the Act's
passage to understand the intent of the Act.
FEMA Response: FEMA appreciates the commenter's input on
Representative Fernandez' public meeting. FEMA has met with the New
Mexico Congressional Delegation regarding the Act's implementation and
received a comment on the IFR from the Delegation. FEMA has adjudicated
that comment in this Final Rule and continues to engage with
Congressional Representatives regarding the implementation of the Act.
Comment: One commenter suggested FEMA provide education and
awareness to county residents on preparedness for future manmade and
natural disasters.
FEMA Response: While this suggestion is outside the scope of the
Act, the suggestion does fall within FEMA's overall mission. The agency
is coordinating with the State on the integration of long-term recovery
efforts and resilience resources under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (``Stafford Act'') and other
applicable statutory authorities.\63\
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\63\ 42 U.S.C. 5121 et seq.
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Comment: One commenter asked FEMA to do outreach to the community
and assist people, as the experience with seeking benefits from FEMA
during the disaster had been one of being turned away.
FEMA Response: Unlike the FEMA programs operated under the Stafford
Act, the Hermit's Peak/Calf Canyon Fire Assistance Act offers a
distinct claims process for claimants to seek actual compensatory
damages for injuries suffered as a result of the Fire. The Act's
provisions do not have the same eligibility requirements associated
with the Public Assistance and Individual Assistance Programs under the
Stafford Act. Claimants that were denied assistance under those
programs should not assume their claim will be rejected under the Act.
The regulation provides the general framework for compensation under
the Act and claimants that have been injured as a result of the Fire
should pursue claims for compensatory damages under the Act even if
they were denied assistance under the Stafford Act programs.
FEMA is currently accepting Notice of Loss forms in person at the
Claims Office locations in Santa Fe, Mora, and Las Vegas, New Mexico
and those office addresses can be found at https://www.fema.gov/hermits-peak. FEMA will provide services both at set office locations
for the Claims Offices, as well as pop-up offices that will rotate
through communities and locations in the affected area, to reduce
travel burdens on claimants. The pop-up offices will be staffed by
Claims Navigators, who can assist claimants in completing and
submitting Notices of Loss, providing claims updates, and answering
general questions. FEMA plans to offer opportunities for one-on-one
engagement with Navigators and Claims Reviewers who will work to engage
claimants in ways to meet their needs whether in person or via remote
technology. Claims Office Navigators are trained to accommodate the
needs of claimants. FEMA recognizes the importance of having claims
staff, who interact with claimants and help facilitate the claims
process, that are able to speak both Spanish and English. FEMA locally
hired bilingual speakers to ensure that claims staff can communicate
with claimants in their preferred language.
Comment: Another commenter asked that FEMA listen to the community
on what they value, as it is different from how FEMA appeared to be
valuing buildings, the land, the trees, or the water.
FEMA Response: FEMA heard the comments regarding the need to
reassess the formulas placed in the IFR and is making changes in the
Final Rule to address those concerns. The Final Rule's changes better
reflect the impacted communities' needs and values while maintaining
consistency with the Act's authorities.
Comment: A commenter stated ``Every time there is a flood, every
time there is a massive weather event, FEMA is to come out now. So,
they are understaffed, but here there is a big difference because the
appropriations that our legislators have fought to get something in
place. So, if you got something, you got something to work with, and I
am saying that like our flood was in 2017, and I still haven't
recovered . . . So, your comments, and you're coming to these meetings
are
[[Page 59769]]
demonstrations that you care about yourselves, you know they are not
going to chase you off.''
FEMA Response: FEMA agrees with the commenter that the Act's
provisions are different from Stafford Act programs and that claimants
should engage with FEMA on their claims. As the commenter stated, FEMA
received appropriations for the Act and is required to staff the Claims
Office to meet the needs of the community to process their claims in an
expeditious manner.
Comment: One commenter stated that the communities needed to
leverage the Act's funding in conjunction with the overall rollout of
infrastructure funding to protect food security and food systems.
FEMA Response: FEMA recognizes that other funding may be available
to further support the long-term recovery of the impacted communities
beyond the funding appropriated by the Act. FEMA appreciates the
commenter's suggestion that the impacted communities also consider that
funding and how all available funding can work to improve the
community. FEMA has consulted and continues to consult with Federal,
State, local, and Tribal authorities consistent with the Act's
requirements.
Comment: One commenter stated that they were concerned that money
from the Act would go to contractors that are coming in from the
outside area.
FEMA Response: FEMA understands the need for local hiring for the
Claims Office and FEMA has engaged in an extensive effort to recruit
locally for positions to support the processing of claims and provision
of compensation to claimants impacted by the Fire to ensure these
specific concerns are addressed. FEMA is not responsible for hiring
contractors to handle local projects under the Act. FEMA recognizes
that other Federal programs, including FEMA Stafford Act programs, may
leverage contract support for local projects. The process associated
with those contracts varies by program. General information on
contracting for FEMA programs can be found at https://www.fema.gov/grants/procurement.\64\
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\64\ Last accessed Mar. 1, 2023.
---------------------------------------------------------------------------
Comment: Another commenter provided a suggestion on how to spend
the funding allocated under the Act by requiring it to cycle through
the community several times before it leaves the impacted communities.
FEMA Response: FEMA is authorized under the Act to pay claimants
for actual compensatory damages for injuries resulting from the
Fire.\65\ FEMA does not have the authority under the Act to require
claimants to spend the compensation awarded in the local community.
---------------------------------------------------------------------------
\65\ See Sections 102(b) and 104(c) of the Act.
---------------------------------------------------------------------------
Comment: Another commenter recommended FEMA hire local contractors
for FEMA projects. The commenter stated ``The other piece is the issue
with contracts. So, we have a lot of local contractors working here. We
have local contractors working. We have the majority of them not
working and that is another FEMA issue. Massive contracts went out, the
Mora people, or Mora contractors are being subcontracted; they are not
even given the opportunity--that is wages lost. If you are working for
a contractor as a subcontractor, you've lost wages. You've lost
revenue, and that's another part that FEMA's failed to do and failed to
represent the people.''
FEMA Response: As explained above, FEMA is not responsible for
hiring contractors to handle local projects under the Act. FEMA
recognizes that other Federal programs, including FEMA Stafford Act
programs, may leverage contract support for local projects. The process
associated with those contracts varies by program. General information
on contracting for FEMA programs can be found at https://www.fema.gov/grants/procurement.\66\ The Claims Office encourages its contractors to
hire locally.
---------------------------------------------------------------------------
\66\ Last accessed Mar. 1, 2023.
---------------------------------------------------------------------------
Comment: A commenter stated the Claims Office was responsible for
clarifying and ensuring that claimants are not taxed for the claims
payments they receive through the program.
FEMA Response: FEMA appreciates claimants' concerns with taxes.
Section 104(h)(f) of the Act states that ``the value of compensation
that may be provided under this Act shall not be considered income or
resources for any purpose under any Federal, State, or local laws,
including laws related to taxation, welfare, and public assistance
programs . . .'' FEMA is providing this information to claimants as
part of the payment process. FEMA is not responsible for taxation and
encourages claimants to obtain specific assistance if a Federal, State,
or local entity seeks to consider compensation under the Act as taxable
income or income for welfare or public assistance purposes. The agency
does not believe changes to the IFR regulatory text are needed in the
Final Rule to effect the commenter's request.
S. Change Chart
The below table summarizes the changes FEMA has made in this final
rule. The economic impacts of these changes are discussed further in
Section IV.B, ``Executive Order 12866, Regulatory Planning and Review
and Executive Order 13563, Improving Regulation and Regulatory
Review.''
----------------------------------------------------------------------------------------------------------------
44 CFR IFR text Final rule text Reason for change Economic impact
----------------------------------------------------------------------------------------------------------------
296.1................... This part implements This part implements Consistency with None.
the Hermit's Peak/ the Hermit's Peak/ authorizing
Calf Canyon Fire Calf Canyon Fire statute's language
Assistance Act Assistance Act and clarity that
(Act), Division G (Act), Division G injuries resulting
of Public Law 117- of Public Law 117- from the Fire are
180, 136 Stat. 180, 136 Stat. compensable.
2114, 2168, which 2114, 2168, which
requires the requires the
Federal Emergency Federal Emergency
Management Agency Management Agency
(FEMA) to establish (FEMA) to establish
the Office of the Office of
Hermit's Peak/Calf Hermit's Peak/Calf
Canyon Fire Claims Canyon Fire Claims
(``Claims Office'') (``Claims Office'')
to receive, to receive,
evaluate, process, evaluate, process,
and pay actual and pay actual
compensatory compensatory
damages for damages for
injuries suffered injuries resulting
from the Hermit's from the Hermit's
Peak/Calf Canyon Peak/Calf Canyon
Fire. Fire.
[[Page 59770]]
296.4................... Subsistence Subsistence Consistency with the Higher claims values
Resources means Resources means distinctions for those claiming
food and other food and other between the assistance for
items obtained items obtained communities ``other natural
through hunting, through hunting, impacted by the resource''
fishing, firewood fishing, firewood Cerro Grande and gathering.
gathering, or other natural Hermit's Peak/Calf Potential increase
timbering, grazing resource gathering, Canyon Fires and in transfer
or agricultural timbering, grazing need to accommodate payments from FEMA
activities or agricultural geographic, to claimants.
undertaken by the activities economic, and
claimant without undertaken by the cultural
financial claimant without distinctions into
remuneration, on financial the Hermit's Peak/
land damaged by the remuneration, on Calf Canyon Fire
Hermit's Peak/Calf land damaged by the Assistance process.
Canyon Fire. Hermit's Peak/Calf
Canyon Fire.
296.12(a)............... An Injured Person An Injured Person Clarity that None.
who accepts an who accepts a final claimants only
award under the Act award under the Act waive their rights
waives the right to waives the right to upon acceptance of
pursue all claims pursue all claims a final award.
for injuries for injuries
arising out of or arising out of or
relating to the relating to the
same subject matter same subject matter
against the United against the United
States or any States or any
employee, officer, employee, officer,
or agency of the or agency of the
United States United States
through the Federal through the Federal
Tort Claims Act or Tort Claims Act or
a civil action a civil action
authorized by any authorized by any
other provision of other provision of
law. law.
296.12(b)............... An Injured Person An Injured Person Clarity that None.
who accepts an who accepts a final claimants only
award through a award through a waive their rights
Federal Tort Claims Federal Tort Claims upon acceptance of
Act claim or a Act claim or a a final award.
civil action civil action
against the United against the United
States or any States or any
employee, officer, employee, officer,
or agency of the or agency of the
United States United States
relating to the relating to the
Hermit's Peak/Calf Hermit's Peak/Calf
Canyon Fire waives Canyon Fire waives
the right to pursue the right to pursue
any claim arising any claim arising
out of or relating out of or relating
to the same subject to the same subject
matter under the matter under the
Act. Act.
296.13.................. An insurer or other An insurer or other Consistency with None.
third party with third party with authorizing
the rights of a the rights of a statute's language.
subrogee, who has subrogee, who has
compensated an compensated an
injured person for injured person for
Hermit's Peak/Calf Hermit's Peak/Calf
Canyon Fire related Canyon Fire related
injuries, may file injuries, may file
a Notice of Loss a Notice of Loss
under the Act for under the Act for
the subrogated the subrogated
claim. A subrogee claim. A subrogee
may file a Notice may file a Notice
of Loss without of Loss without
regard to whether regard to whether
the Injured Person the Injured Person
who received who received
payment from the payment from the
subrogee filed a subrogee filed a
Notice of Loss. A Notice of Loss. A
Subrogation Notice Subrogation Notice
of Loss should be of Loss should be
filed after the filed after the
subrogee has made subrogee has made
all payments that all payments that
it believes the it believes the
Injured Person is Injured Person is
entitled to receive entitled to receive
for Hermit's Peak/ for Hermit's Peak/
Calf Canyon Fire Calf Canyon Fire
related injuries related injuries
under the terms of under the terms of
the insurance the insurance
policy or other policy or other
agreement between agreement between
the subrogee and the subrogee and
the Injured Person, the Injured Person,
but not later than but not later than
November 14, 2024. November 14, 2024.
By filing a Notice By filing a Notice
of Loss for any of Loss for any
subrogated claim, subrogated claim,
the subrogee elects the subrogee elects
the Act as its the Act as its
exclusive remedy exclusive remedy
against the United against the United
States or any States or any
employee, officer, employee, officer,
or agency of the or agency of the
United States for United States for
all subrogated all subrogated
claims arising out claims arising out
of the Hermit's of the Hermit's
Peak/Calf Canyon Peak/Calf Canyon
Fire. Subrogation Fire. Subrogation
claims must be made claims must be made
on a Notice of Loss on a Notice of Loss
form furnished by form furnished by
the Claims Office. the Claims Office
and such claims
will be paid only
after paying claims
submitted by
injured persons
that are not
insurance companies
seeking payment as
subrogees.
296.21(a)............... (a) Allowable (a) Allowable Technical edit...... None.
damages. The Act damages. The Act
provides for the provides for the
payment of actual payment of actual
compensatory compensatory
damages for Injury damages for injury
or loss of or loss of
property, business property, business
loss, and financial loss, and financial
loss. The laws of loss. The laws of
the State of New the State of New
Mexico will apply Mexico will apply
to the calculation to the calculation
of damages. Damages of damages. Damages
must be reasonable must be reasonable
in amount. in amount.
[[Page 59771]]
296.21(c)(2)............ Reforestation and Reforestation and Consistency with the Removes the formula
revegetation. revegetation. distinctions for compensation
Compensation for Compensatory between the for destroyed trees
the replacement of damages may be communities and other
destroyed trees and awarded for the impacted by the landscaping.
other landscaping cost of destroyed Cerro Grande and This would
will not exceed 25 trees and other Hermit's Peak/Calf potentially lead to
percent of the pre- landscaping. Canyon Fires and an increase in the
fire value of the need to accommodate value of awarded
structure and lot. geographic, claims. Claimants
economic, and would benefit by
cultural receiving
distinctions into additional
the Hermit's Peak/ assistance and be
Calf Canyon Fire able to recover
Assistance process. more fully.
This would not
affect the maximum
total impact of the
rule of $3.95B, but
transfer payments
from FEMA to these
claimants would
potentially
increase.
FEMA may also bear
an additional
administrative cost
to process the
additional claims.
296.21(c)(3)(ii)........ The claimant can The claimant can Consistency with the None.
establish that the establish that the distinctions
value of the real value of the real between the
property was property was communities
permanently significantly impacted by the
diminished as a diminished long- Cerro Grande and
result of the term as a result of Hermit's Peak/Calf
Hermit's Peak/Calf the Hermit's Peak/ Canyon Fires and
Canyon Fire. Calf Canyon Fire. need to accommodate
geographic,
economic, and
cultural
distinctions into
the Hermit's Peak/
Calf Canyon Fire
Assistance process.
296.21(c)(5)............ N/A................. Physical Consistency with None.
Infrastructure. authorizing
Compensatory statute's language
damages may be and with the
awarded for the distinctions
damage to physical between the
infrastructure, communities
including damages impacted by the
to irrigation Cerro Grande and
infrastructure such Hermit's Peak/Calf
as acequia systems. Canyon Fires and
need to accommodate
geographic,
economic, and
cultural
distinctions into
the Hermit's Peak/
Calf Canyon Fire
Assistance process.
296.21(e)(3)............ Out of pocket Out of pocket Reflects public Removes time limit
expenses for expenses for comment feedback on on reimbursements
treatment of mental treatment of mental to allow for claims for treatment.
health conditions. health conditions. to be filed under Additional claims
FEMA may reimburse FEMA may reimburse deadline for all will potentially be
an individual an individual other claims and filed after April
claimant for claimant for revised for clarity 6, 2024, leading to
reasonable out of reasonable out of on the types of more claims and
pocket expenses pocket expenses mental health claims payments.
incurred for incurred for conditions covered. This would
treatment of a treatment of a potentially lead to
mental health mental health an increase in the
condition rendered condition rendered value of awarded
by a licensed by a licensed claims. Claimants
mental health mental health would benefit by
professional, which professional, which receiving
condition resulted condition resulted additional
from the Hermit's from or was assistance and be
Peak/Calf Canyon worsened by the able to recover
Fire. FEMA will not Hermit's Peak/Calf more fully.
reimburse for Canyon Fire. This would not
treatment rendered affect the maximum
after April 6, 2024. total impact of the
rule of $3.95B, but
transfer payments
from FEMA to these
claimants would
potentially
increase.
FEMA may also bear
an additional
administrative cost
to process the
additional claims.
296.21(e)(4)............ Donations. FEMA will Donations. FEMA will Reflects public Extends the deadline
compensate compensate comment feedback on by approximately 8
claimants for the claimants for the appropriate weeks for
cost of cost of timeline. compensation for
merchandise, use of merchandise, use of donations to
equipment or other equipment or other survivors of the
non-personal non-personal fire.
services, directly services, directly Additional claims
or indirectly or indirectly for reimbursement
donated to donated to were potentially be
survivors of the survivors of the filed between
Hermit's Peak/Calf Hermit's Peak/Calf September 21 and
Canyon Fire not Canyon Fire not November 14, 2022,
later than later than November leading to more
September 20, 2022. 14, 2022. Donations claims and claims
Donations will be will be valued at payments.
valued at cost. cost. This would
potentially lead to
an increase in the
number of awarded
claims. More
claimants would
benefit by
receiving
assistance and be
able to recover
more fully.
This would not
affect the maximum
total impact of the
rule of $3.95B, but
transfer payments
from FEMA to
claimants would
increase.
FEMA may also bear
an additional
administrative cost
to process the
additional claims.
[[Page 59772]]
296.21(e)(5)............ Heightened Risk Heightened Risk Consistency with the Removes the formula
Reduction. FEMA Reduction. FEMA distinctions for compensation
will reimburse will reimburse between the for measures taken
claimants for the claimants for the communities to reduce risk from
costs incurred to costs incurred to impacted by the natural hazards
implement implement Cerro Grande and heightened by the
reasonable measures reasonable measures Hermit's Peak/Calf Fire.
necessary to reduce necessary to reduce Canyon Fires and This would
risks from natural risks from natural need to accommodate potentially lead to
hazards heightened hazards heightened geographic, an increase in the
by the Hermit's by the Hermit's economic, and value of awarded
Peak/Calf Canyon Peak/Calf Canyon cultural claims. Claimants
Fire to the level Fire to the level distinctions into would benefit by
of risk prevailing of risk prevailing the Hermit's Peak/ receiving
before the Hermit's before the Hermit's Calf Canyon Fire additional
Peak/Calf Canyon Peak/Calf Canyon Assistance process. assistance and be
Fire. Such measures Fire. Such measures able to recover
may include, for may include, for more fully.
example, risk example, risk This would not
reduction projects reduction projects affect the maximum
that reduce an that reduce an total impact of the
increased risk from increased risk from rule of $3.95B, but
flooding, flooding, transfer payments
mudslides, and mudslides, and from FEMA to these
landslides in and landslides in and claimants would
around burn scars. around burn scars. potentially
Compensation under Claimants seeking increase.
this section may compensation for FEMA may also bear
not exceed 25 heightened risk an additional
percent of the reduction must administrative cost
higher of payments include the claim to process the
from all sources in their Notice of claims.
(i.e., the Act, Loss by November
insurance proceeds, 14, 2024 or an
FEMA assistance amended Notice of
under the Stafford Loss filed no later
Act) for damage to than November 14,
the structure and 2025. Claimants
lot, or the pre- should take into
fire value of the account current
structure and lot. building codes and
Claimants seeking standards and must
compensation for complete the risk
heightened risk reduction project
reduction must for which they
include the claim receive
in their Notice of compensation.
Loss by November
14, 2024 or an
amended Notice of
Loss filed no later
than November 14,
2025. Claimants
should take into
account current
building codes and
standards and must
complete the risk
reduction project
for which they
receive
compensation.
296.21(f)............... Insurance and other Insurance and other Technical edit...... None.
benefits. The Act benefits. The Act
allows FEMA to allows FEMA to
compensate Injured compensate Injured
Persons only for Persons only for
damages not paid, damages not paid,
or will not be and that will not
paid, by insurance be paid, by
or other third- insurance or other
party payments or third-party
settlements. payments or
settlements.
296.31(a)............... FEMA will reimburse FEMA will reimburse Consistency with the None.
claimants for the claimants for the distinctions
reasonable costs reasonable costs between the
they incur in they incur in communities
providing providing impacted by the
documentation documentation Cerro Grande and
requested by the requested by the Hermit's Peak/Calf
Claims Office. FEMA Claims Office. FEMA Canyon Fires and
will also reimburse will also reimburse need to accommodate
claimants for the claimants for the geographic,
reasonable costs reasonable costs economic, and
they incur in they incur in cultural
providing providing distinctions into
appraisals, or appraisals, or the Hermit's Peak/
other third-party other third-party Calf Canyon Fire
opinions, requested opinions, that the Assistance process.
by the Claims Claims Office deems
Office. FEMA will necessary to
not reimburse determine the
claimants for the amount of the
cost of appraisals claim. FEMA will
or other third- not reimburse
party opinions not claimants for the
requested by the cost of appraisals
Claims Office. or other third-
party opinions not
requested by the
Claims Office.
[[Page 59773]]
296.35.................. The Director of the The Director of the Consistency with the A claimant may file
Claims Office may Claims Office may distinctions a claim for
reopen a claim if reopen a claim if between the depreciation after
requested to do so requested to do so communities the sale of any
by the claimant, by the claimant, impacted by the real property, not
notwithstanding the notwithstanding the Cerro Grande and only a home.
submission of the submission of the Hermit's Peak/Calf The deadline to
Release and Release and Canyon Fires and request to reopen a
Certification Form, Certification Form, need to accommodate claim under limited
for the limited for the limited geographic, circumstances is
purpose of purpose of economic, and extended by
considering issues considering issues cultural publication in the
raised by the raised by the distinctions into Federal Register.
request to reopen request to reopen the Hermit's Peak/ Both of these
if, not later than if, not later than Calf Canyon Fire changes would
November 14, 2025, November 14, 2025, Assistance process potentially lead to
the claimant the claimant while also an increase in
desires heightened desires heightened incorporating a claims and more
risk reduction risk reduction past practice from claims being
compensation in compensation in Cerro Grande to awarded. Claimants
accordance with accordance with extend the deadline would benefit by
Sec. Sec. by Federal Register receiving
296.21(e)(5); the 296.21(e)(5); the publication for additional
claimant closed the claimant closed the certain losses. assistance and be
sale of a home and sale of real able to recover
wishes to present a property and wishes more fully.
claim for decrease to present a claim This would not
in the value of the for decrease in the affect the maximum
real property under value of the real total impact of the
Sec. property under Sec. rule of $3.95B, but
296.21(c)(3); the 296.21(c)(3). transfer payments
claimant has Claimants may from FEMA to these
incurred additional request to reopen claimants would
losses under Sec. claims where the potentially
296.21(c)(1) as claimant has increase.
part of a incurred additional FEMA may also bear
reconstruction in losses under Sec. an additional
excess of those 296.21(c)(1) as administrative cost
previously awarded; part of a to process the
or the Director of reconstruction in claims.
the Claims Office excess of those
otherwise previously awarded
determines that or the Director of
claimant has the Claims Office
demonstrated good otherwise
cause. determines that
claimant has
demonstrated good
cause no later than
the deadline
established by the
Director of the
Claims Office as
published in the
Federal Register
and at https://www.fema.gov/hermits-peak.
----------------------------------------------------------------------------------------------------------------
IV. Regulatory Analysis
A. Administrative Procedure Act (APA)
The IFR that this Final Rule makes final, with the changes detailed
above in response to public comment is already in effect. FEMA issued
the IFR pursuant to statutory authority under the Act. Specifically,
section 104(f)(1) requires FEMA to publish ``interim final regulations
for the processing and payment of claims under this Act.'' Further, the
IFR had to be published ``not later than 45 days after the date of
enactment.'' Given Congress' specific authority to issue an IFR, the
agency had good cause to proceed without advance notice and comment as
would have otherwise been required under the APA. See 5 U.S.C.
553(b)(B); Hermit's Peak/Calf Canyon Fire Assistance, 87 FR 68085,
68095 (Nov. 14, 2022) (``Consistent with Congress' direction in section
104(f)(1) of the Act that FEMA publish `interim final regulations for
the processing and payment of claims under [the] Act,' good cause
exists pursuant to 5 U.S.C. 553 (b)(B) as it would be impracticable and
contrary to the public interest to require notice and comment
rulemaking in this instance.'').
FEMA finds there is good cause, under 5 U.S.C. 553(d)(3), not to
require a 30-day delayed effective date for this rulemaking because
delaying implementation of this Final Rule by 30 days is contrary to
the goal of the statutory purpose found at section 102(b)(2) of the Act
to provide for the expeditious consideration and settlement of claims
for injuries resulting from the Fire. The Act required FEMA to
promulgate and publish an IFR within 45 days after the Act's enactment,
and delay in the effective date of a Final Rule with changes to that
IFR would further negatively impact claimants seeking compensation
through the Act. The updates made in this Final Rule will address
concerns raised by commenters on the application of the Cerro Grande
Fire Assistance processes for the Hermit's Peak/Calf Canyon Fire
Assistance process and ensures the process better reflects the needs of
injured persons and impacted communities from the Hermit's Peak/Calf
Canyon Fire given the geographic, economic, and cultural distinctions
between the Cerro Grande and Hermit's Peak/Calf Canyon Fires. This
Final Rule will provide additional clarity to claimants seeking to
utilize the Hermit's Peak/Calf Canyon claims process and receive
compensation for actual compensatory damages suffered as a result of
the Fire. Given the Congressional mandate to expeditiously consider and
settle these claims, this Final Rule must be effective upon
publication.
The Fire constitutes the largest wildfire in New Mexico
history.\67\ Over 340,000 acres of forest burned during the Fire and
over half of the land impacted by the Fire consisted of privately-owned
land, with just under 200,000 total acres burned.\68\ At least 160
homes and a total of over 900 structures were destroyed during the
Fire.\69\ Despite containment, the impact of the Fire continues to be
felt in the impacted areas, causing flooding and setting off a drinking
water crisis.\70\ The higher burn severity of soil on private lands
increases the likelihood of flooding and mudslide impacts on those
areas. Residents in the areas of the Fire have already suffered
significant damage from flooding, including washed out roads and
buildings, drowned pastures, and burned debris
[[Page 59774]]
moved downstream.\71\ In addition, as noted above, Congress explicitly
mandated in section 104(f)(1) of the Act that FEMA promulgate these
regulations expeditiously as interim final regulations, a factor that
supports a finding of ``good cause'' to also issue this Final Rule
without an effective date delay. Pursuant to section 104(f)(1) of the
Act, consistent with 5 U.S.C. 553(d)(3), and for the reasons stated
above, FEMA therefore will make this Final Rule effective immediately
upon publication.
---------------------------------------------------------------------------
\67\ See Bryan Pietsch and Jason Samenow, ``New Mexico blaze is
now largest wildfire in state history,'' The Washington Post, May
17, 2022 found at https://www.washingtonpost.come/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/ (last accessed July 27,
2023).
\68\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
\69\ Id.
\70\ See Jordan Honeycutt, ``Rain brings flash flooding to
Hermits Peak Calf Canyon burn scar,'' KRQE, July 13, 2022 found at
https://www.krqe.com/news/new-mexico/rain-brings-flash-flooding-to-hermits-peak-calf-canyon-burn-scar/ (last accessed July 27, 2023),
and Simon Romero, ``How New Mexico's Largest Wildfire Set Off a
Drinking Water Crisis,'' The New York Times, Sept. 26, 2022 found at
https://www.nytimes.com/2022/09/26/us/new-mexico-las-vegas-fire-water.html (last accessed Sept. 27, 2022).
\71\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
---------------------------------------------------------------------------
B. Executive Order 12866, Regulatory Planning and Review, as Amended,
and Executive Order 13563, Improving Regulation and Regulatory Review
Executive Order 12866 (Regulatory Planning and Review), as amended
by Executive Order 14094 (Modernizing Regulatory Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review), directs
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 designated this rule a ``significant regulatory
action'' as defined under section 3(f)(1) of Executive Order 12866, as
amended by E.O. 14094. Accordingly, the rule has been reviewed by OMB.
In the IFR, FEMA established a process by which claimants who were
injured as a result of the Fire may apply for compensation under the
Act. FEMA is updating that process through this Final Rule. Affected
State, local, and Tribal governments, private sector businesses, not-
for-profit organizations, and individuals and households are eligible
to apply for compensation based on clarifying changes made in this
Final Rule. The established process results in costs to claimants for
time to apply for and substantiate a claim, and for FEMA to process and
adjudicate claims. Claimants submit a Notice of Loss to FEMA, meet with
a FEMA Claims Reviewer, obtain the documentation needed to substantiate
claims, sign a Proof of Loss, and complete and return a Release and
Certification Form. Additionally, affected insurance companies are
eligible to submit a subrogation notice of loss for possible
compensation under the Act. Claimants who disagree with FEMA's
evaluation of the claim may also incur costs to appeal the
determination. FEMA estimates approximately 28,725 claimants will seek
compensation under the Act annually, totaling 732,490 burden hours per
year.\72\
---------------------------------------------------------------------------
\72\ Agency Information Collection Activities: Proposed
Collection; Comment Request; Generic Clearance for Notice of Loss
and Proof of Loss, 88 FR 29144 (May 5, 2023). FEMA estimates that
28,725 applicants annually will incur approximately 25.5 burden
hours each. Over the two-year period, FEMA estimates a total of
57,450 claims with a corresponding 1,464,980 burden hours.
---------------------------------------------------------------------------
The IFR and this rule result in additional transfer payments from
FEMA to victims for the settlement of claims for injuries resulting
from the Fire. Injuries may include property, business and/or financial
losses. Congress appropriated $3.95 billion to provide for the
expeditious consideration and settlement of these claims.\73\ The
maximum total economic impact of these actions, therefore, is $3.95
billion (assuming that all funds awarded will be expended). These funds
are for the settlement of actual compensatory damages measured by
injuries suffered, FEMA's administration of the program, and DHS OIG
oversight.\74\ However, without knowing the dollar amount of claims
that will be filed for these injuries, it is impossible to predict the
amount of the economic impact with any precision. As of July 5, 2023,
FEMA has received 1,353 Notices of Loss, which includes 2,257
claimants.
---------------------------------------------------------------------------
\73\ Division A of Public Law 117-180, 136 Stat. 2144 (2022) and
Consolidated Appropriations Act, 2023, Public Law 117-328, 136 Stat.
4459.
\74\ Id.
---------------------------------------------------------------------------
The Act requires claims to be submitted no later than two years
after publication of the IFR or November 14, 2024.\75\ The Act requires
that FEMA determine and fix the amount to be paid for a claim within
180 days after a claim is submitted.\76\ Although the impact of the
rule could be spread over multiple years as claims are received,
processed, and paid, the total economic effects of a specific payment
would only occur once, rather than annually.
---------------------------------------------------------------------------
\75\ Id.
\76\ Division G of Public Law 117-180, 136 Stat. 2114 (2022).
---------------------------------------------------------------------------
These actions provide distributional benefits to victims of the
Fire. FEMA has provided immediate assistance under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (Stafford Act),
as amended (Pub. L. 93-288) (42 U.S.C. 5121, et seq.) to those eligible
for public and individual assistance pursuant to the President's
declaration of a major disaster on May 4, 2022. The additional
compensation from the Act will more fully compensate victims and allow
affected State, local and Tribal governments, businesses,
organizations, and individuals to rebuild.
In this Final Rule, FEMA is updating the established process by
which claimants who were injured as a result of the Fire may apply for
compensation under the Act. FEMA anticipates that several of the
changes it made from the IFR to this Final Rule will lead to impacts on
costs, benefits, and transfer payments. Below, FEMA discusses the
impact of these changes relative to the IFR. Specifically, these
changes include the following:
In 44 CFR 296.4, FEMA added ``other natural resources'' to the
definition of ``Subsistence Resources.'' Expanding the definition leads
to the potential for claimants to receive compensation for claims
including other natural resources; however, FEMA anticipates any impact
on claim values will be a de minimis amount, as the additional language
is intended to be clarifying in nature. In Sec. 296.21(c)(2), FEMA
removed the formula on compensation for destroyed trees and other
landscaping. Removing this formula leads to the potential for claimants
to receive higher levels of compensation for these claims, and
therefore, an increase in claims values. Section 296.21(e)(3) removes
the time limit on reimbursements for treatment, allowing for claimants
to file additional claims after April 6, 2024. This will potentially
lead to an increase in the number and value of claims filed and awarded
as compared to the IFR. Claimants will potentially benefit by receiving
treatment for mental health conditions that they would not have sought
out if their expenses could not be reimbursed. In Sec. 296.21(e)(4),
FEMA extended the deadline for compensation from September 20, 2022 to
November 14, 2022 for donations claimants made to survivors of the
Hermit's Peak/Calf Canyon Fire. This will potentially lead to an
increase in the number and value of claims awarded by FEMA relative to
the IFR. In Sec. 296.21(e)(5), FEMA removed the formula for
compensation for measures taken to reduce risk from natural disasters
heightened by the Fire. Removing this formula leads to the potential
for claimants to receive higher levels of compensation for these
claims, and therefore, an increase in claims values. FEMA edited Sec.
296.35 to allow
[[Page 59775]]
for a claimant to file a claim for depreciation after the sale of any
real property, not only the sale of a home. FEMA also extends a
deadline in this section, allowing for a claimant to request to reopen
a claim under limited circumstances until the deadline established in
the Federal Register. Both of these changes will potentially lead to an
increase in claims and more claims being awarded as compared to the
IFR.
All increases in the number or value of claims payments in
comparison to the IFR will lead to an increase in transfer payments
from FEMA to affected recipients. The extent to which the claim values
increase, recipients will benefit by being made more whole after their
loss, thereby improving their ability recover and be resilient. Any
increase in the number of claims filed will also lead to an increase in
burden hours to claimants and administrative costs to FEMA. None of
these changes will affect the maximum total impact of the rule of $3.95
billion.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)) applies only
to rules for which an agency publishes a general notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, FEMA
did not issue a notice of proposed rulemaking, and was not required to
do so under any law. Accordingly, the RFA's requirements do not apply
to this Final Rule.
D. Unfunded Mandates Reform Act of 1995
As noted above, no notice of proposed rulemaking was published in
advance of this action. Therefore, the written statement provisions of
the Unfunded Mandates Reform Act of 1995, as amended, (2 U.S.C. 1501 et
seq.) do not apply to this regulatory action.
E. Paperwork Reduction Act of 1995
This rule contains information collections necessary to support
FEMA's implementation of the Act. The Notice of Loss and Proof of Loss
forms (OMB Control Number 1660-0155) were submitted and approved under
OMB's emergency clearance procedures on November 14, 2022 to allow FEMA
to begin accepting claims immediately after publication of the IFR. A
revision of the initial emergency collection was approved on February
16, 2023 to incorporate additional forms necessary to effectively
process claims under the Act. FEMA is pursuing approval under the
normal notice and comment process for this collection and will publish
notice in the Federal Register for comment before receiving an
extension of the emergency approval.
F. Privacy Act
Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must
determine whether implementation of a 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.
In accordance with DHS policy, FEMA has completed a Privacy
Threshold Analysis (PTA) for this rule. DHS has determined that this
rulemaking does not affect the 1660-0155 OMB Control Number's
compliance with the E-Government Act of 2002 or the Privacy Act of
1974, as amended. Specifically, DHS has concluded that the 1660-0155
OMB Control Number is covered by the DHS/FEMA/PIA-044 National Fire
Incident Reporting Systems (NFIRS) Privacy Impact Assessment (PIA) and
the DHS/FEMA/PIA-049 Individual Assistance (IA) Program PIA.
Additionally, DHS has decided that the 1660-0155 OMB Control Number is
covered by DHS/ALL-004 General Information Technology Access Account
Records System (GITAARS), 77 FR 70792 (Nov. 27, 2012), and DHS/ALL-013
Department of Homeland Security Claims Records, 73 FR 63987 (Oct. 28,
2008) System of Records Notices (SORNs).
G. 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.
FEMA entered into consultation with the Indian Tribes that have
been impacted by the Fire and whose Tribal entities or Tribal members
have been impacted by the Fire during the public comment period of the
Interim Final Rulemaking. The consultation was held on December 9, 2022
at 3:00 p.m. The concerns raised during that consultation are addressed
above.
H. 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 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 determined that this rulemaking does not have a
substantial direct effect 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, however, met with the State of New Mexico on
January 10, 2023 to discuss the effect of the IFR on the State. The
transcript from that meeting can be found on the public docket at
https://www.regulations.gov/document/FEMA-2022-0037-0142 and comments
raised during that meeting are addressed above.
[[Page 59776]]
I. National Environmental Policy Act of 1969 (NEPA)
Under Section 102 of the National Environmental Policy Act of 1969
(NEPA), as amended, 42 U.S.C. 4321 et seq., an agency must prepare an
environmental assessment or environmental impact statement for any
major Federal action that significantly affects the quality of the
human environment unless the action can be statutorily or categorically
excluded. 40 CFR 1501.1(a), 1501.4. A ``major federal action'' includes
new or revised agency rules or regulations. 40 CFR 1508.1(q)(2). A
categorical exclusion is a category of actions that the Federal agency
has determined, normally does not significantly affect the quality of
the human environment. 42 U.S.C. 4336e(1). If there are extraordinary
circumstances, however, a normally excluded action may have a
significant effect, and if the effect cannot be mitigated, further
environmental review is required. 40 CFR 1501.4.
This rulemaking is a major Federal action subject to NEPA. Based on
the public comments received, the rulemaking revises the IFR to better
address the needs of the communities affected by the Fire with
particular consideration to their geographic, economic and cultural
characteristics. The purpose of the rulemaking is to establish a
process and procedures for FEMA to expeditiously pay actual
compensatory damages for injuries resulting from the Fire. FEMA has
determined that categorical exclusion 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, applies
to this rulemaking. Specifically, categorical exclusion A3 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 Final Rule meets Categorical
Exclusion A3(a), ``[t]hose of a strictly administrative or procedural
nature,'' and A3(b), ``[t]hose that implement, without substantive
change, statutory or regulatory requirements.'' FEMA has determined
that there are no extraordinary circumstances that prevent the use of
this categorical exclusion for this rulemaking action.
J. Executive Orders 12898 and 14096 on Environmental Justice
Under Executive Order 12898, ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations,'' 59 FR 7629 (Feb. 16, 1994), as amended by Executive
Order 12948, 60 FR 6381, (Feb. 1, 1995), FEMA incorporates
environmental justice into its policies and programs. The Executive
Order requires each Federal agency to conduct its programs, policies,
and activities that substantially affect human health or the
environment in a manner that ensures that those programs, policies, and
activities do not have the effect of excluding persons from
participation in programs, denying persons the benefits of programs, or
subjecting persons to discrimination because of race, color, or
national origin. Further, Executive Order 14096, ``Revitalizing Our
Nation's Commitment to Environmental Justice for All,'' 88 FR 25251
(Apr. 26, 2023), charges Federal agencies to make achieving
environmental justice part of their missions, consistent with statutory
authority, by identifying, analyzing, and addressing the
disproportionate and adverse human health and environmental effects and
hazards of Federal activities, including those related to climate
change and cumulative impacts of environmental and other burdens on
communities with environmental justice concerns.
This rulemaking does not have a disproportionate and adverse helath
or environmental effect on communities, nor does it exclude persons
from participation in FEMA programs, deny persons the benefits of FEMA
programs, or subject persons to discrimination because of race, color,
or national origin. The rulemaking finalizes the IFR and establishes
the procedures for processing and paying claims for property, business
and other financial losses to those person(s) sustaining losses from
the Fire. The eligibility requirements are to ensure the validity of
the claim for compensation. See e.g., 44 CFR 296.4 (definition of
``injured person''), 296.20, 296.21, and 296.30. With its revisions to
the IFR, the rulemaking better addresses the needs of the communities
affected by the Fire based on the public comments received and the
communities' particular geographic, economic, and cultural
characteristics. Claimants also have appeal rights: they can file an
administrative appeal of the decision by the Director of the Claims
Office, and/or resolve a dispute through binding arbitration or appeal
the Director's decision to the United States District Court for the
District of New Mexico. All persons eligible for compensatory payments
resulting from the Fire will benefit.
K. 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 submitted this rule to the Congress and to GAO pursuant to
the CRA. The Office of Management and Budget has determined that this
rule is ``economically significant,'' but this rule is not a ``major
rule'' within the meaning of the CRA. FEMA believes this Final Rule is
not subject to the additional review requirements under the CRA given
the statutory mandate to issue the Interim Final Rule within 45 days of
the Act's enactment under section 104(f) of the Act and Congress's
desire for the agency to begin processing and paying claims pursuant to
the Act expeditiously under section 102(b)(2). The changes made in the
Final Rule need to be immediately effective to resolve the comments
raised during the IFR's public comment period to the claims process and
ensure the continued expeditious processing and payment of claims under
the Act. This Final Rule is a procedural rule and does not confer any
substantive rights, benefits, or obligations but rather only updates
the agency's procedures for how to voluntarily file a claim under the
Act. As such, this Final Rule is a ``rule of agency organization,
procedure, or practice that does not substantially affect the rights or
obligation of non-agency parties'' pursuant to 5 U.S.C. 804(3)(C).
Finally, even if this final rule is considered a ``rule'' under the
CRA, FEMA finds there is good cause to dispense with notice and public
comment under 5 U.S.C. 808(2). Notice and public comment are
impracticable and contrary to public interest given the Act's
requirement for the agency to publish an IFR within 45 days of
enactment and the Act's purpose to provide expeditious consideration
and settlement of claims for victims of the
[[Page 59777]]
Fire as explained above. Therefore, there is no delay in its effective
date under the CRA.
List of Subjects in 44 CFR Part 296
Administrative practice and procedure, Claims, Disaster Assistance,
Federally affected areas, Indians, Indians--lands, Indians--Tribal
government, Organization and functions (Government agencies), Public
lands, Reporting and recordkeeping requirements, State and local
governments.
0
For the reasons discussed in the preamble, the Federal Emergency
Management Agency (FEMA) is revising part 296 to read as follows:
PART 296--HERMIT'S PEAK/CALF CANYON FIRE ASSISTANCE
Sec.
Subpart A--General
296.1 Purpose.
296.2 Policy.
296.3 Information and assistance.
296.4 Definitions.
296.5 Overview of the claims process.
296.6-296.9 [Reserved]
Subpart B--Bringing a Claim Under the Hermit's Peak/Calf Canyon Fire
Assistance Act
296.10 Filing a claim under the Hermit's Peak/Calf Canyon Fire
Assistance Act
296.11 Deadline for notifying FEMA of injuries.
296.12 Election of remedies.
296.13 Subrogation.
296.14 Assignments.
296.15-296.19 [Reserved]
Subpart C--Compensation Available under the Hermit's Peak/Calf Canyon
Fire Assistance Act
296.20 Prerequisite to compensation.
296.21 Allowable damages.
296.22-296.29 [Reserved]
Subpart D--Claims Evaluation
296.30 Establishing injuries and damages.
296.31 Reimbursement of claim expenses.
296.32 Determination of compensation due to claimant.
296.33 Partial payments.
296.34 Supplementing claims.
296.35 Reopening a claim.
296.36 Access to records.
296.37 Confidentiality of information.
296.38-296.39 [Reserved]
Subpart E--Dispute Resolution
296.40 Scope.
296.41 Administrative appeal.
296.42 Arbitration.
296.43 Judicial review.
Authority: Pub. L. 117-180, 136 Stat. 2114, 2168; Homeland
Security Act of 2002, 6 U.S.C. 101 et seq.
Subpart A--General
Sec. 296.1 Purpose.
This part implements the Hermit's Peak/Calf Canyon Fire Assistance
Act (Act), Division G of Public Law 117-180, 136 Stat. 2114, 2168,
which requires the Federal Emergency Management Agency (FEMA) to
establish the Office of Hermit's Peak/Calf Canyon Fire Claims (``Claims
Office'') to receive, evaluate, process, and pay actual compensatory
damages for injuries resulting from the Hermit's Peak/Calf Canyon Fire.
Sec. 296.2 Policy.
It is our policy to provide for the expeditious resolution of
damage claims through a process that is administered with sensitivity
to the burdens placed upon claimants by the Hermit's Peak/Calf Canyon
Fire.
Sec. 296.3 Information and assistance.
Information and assistance concerning the Act is available from the
Claims Office, Federal Emergency Management Agency online at https://www.fema.gov/hermits-peak.
Sec. 296.4 Definitions.
Administrative Appeal means an appeal of the Authorized Official's
Determination to the Director of the Claims Office in accordance with
the provisions of Subpart E of this part.
Administrative Record means all information submitted by the
claimant and all information collected by FEMA concerning the claim,
which is used to evaluate the claim and to formulate the Authorized
Official's Determination. It also means all information that is
submitted by the claimant or FEMA in an Administrative Appeal and the
decision of the Administrative Appeal. It excludes the opinions,
memoranda and work papers of FEMA attorneys and drafts of documents
prepared by Claims Office personnel and contractors.
Administrator means the Administrator of the Federal Emergency
Management Agency.
Arbitration Administrator means the FEMA official responsible for
administering arbitration procedures to resolve disputes regarding a
claim. Contact information for the Arbitration Administrator can be
found online at https://www.fema.gov/hermits-peak.
Authorized Official means an employee of the United States who is
delegated with authority by the Director of the Claims Office to render
binding determinations on claims and to determine compensation due to
claimants under the Act.
Authorized Official's Determination means a report signed by an
Authorized Official and mailed to the claimant evaluating each element
of the claim as stated in the Proof of Loss and determining the
compensation, if any, due to the claimant.
Claimant means a person who has filed a Notice of Loss under the
Act.
Claims Office means the Office of Hermit's Peak/Calf Canyon Fire
Claims.
Claims Reviewer means an employee of the United States or a Claims
Office contractor or subcontractor who is authorized by the Director of
the Claims Office to review and evaluate claims submitted under the
Act.
Days means calendar days, including weekends and holidays.
Director means an Independent Claims Manager appointed by the
Administrator who will serve as the Director of the Claims Office.
Good Cause, for purposes of extending the deadline for filing,
supplementing a claim, or reopening a claim includes, but is not
limited to: instances where a claimant, through no fault of their own,
may not be able to access needed documentation in time to submit a
claim or transmit relevant information or data; or where damage is
found after a claim has been submitted; or other instances in which the
Director of the Claims Office, in their discretion, determines that an
undue hardship or change in circumstances on the claimant warrants an
extension of a deadline or the supplementation or reopening of existing
claims.
Hermit's Peak/Calf Canyon Fire means:
(1) The fire resulting from the initiation by the U.S. Forest
Service of a prescribed burn in the Santa Fe National Forest in San
Miguel County, New Mexico on April 6, 2022;
(2) The pile burn holdover resulting from the prescribed burn by
the U.S. Forest Services which reemerged on April 19, 2022; and
(3) The merger of the two fires described in paragraphs (1) and (2)
of this definition, reported as the Hermit's Peak Fire or the Hermit's
Peak Fire/Calf Canyon Fire.
Household means a group of people, related or unrelated, who live
together on a continuous basis and does not include members of an
extended family who do not regularly and continuously cohabit.
Household Including Tribal Members means a Household that existed
on April 6, 2022, which included one or more Tribal Members as
continuous residents.
Indian Tribe means the recognized governing body of any Indian or
Alaska Native Tribe, band, nation, pueblo, village, community,
component band, or
[[Page 59778]]
components reservation individually identified (including
parenthetically) in the list published most recently as of September
30, 2022, pursuant to section 104 of the Federally Recognized Indian
Tribe List Act of 1994.
Individual Assistance means the FEMA program established under
subchapter IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides
assistance to individuals and families adversely affected by a major
disaster or an emergency.
Injured Person means an individual, regardless of citizenship or
alien status; or an Indian Tribe, Tribal corporation, corporation,
partnership, company, association, county, township, city, State,
school district, or other non-Federal entity that suffered injury
resulting from the Hermit's Peak/Calf Canyon Fire. The term Injured
Person includes an Indian Tribe with respect to any claim relating to
property or natural resources held in trust for the Indian Tribe by the
United States. Lenders holding mortgages or security interests on
property affected by the Hermit's Peak/Calf Canyon Fire and lien
holders are not an ``Injured Person'' for purposes of the Act.
Injury means ``injury or loss of property, or personal injury or
death,'' as used in the Federal Tort Claims Act, 28 U.S.C. 1346(b)(1).
Notice of Loss means a form supplied by the Claims Office through
which an Injured Person or Subrogee makes a claim for possible
compensation under the Act.
Proof of Loss means a statement attesting to the nature and extent
of the claimant's injuries.
Public Assistance Program means the FEMA program established under
Subchapter IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides
grants to States, local governments, Indian Tribes and private
nonprofit organizations for emergency measures and repair, restoration,
and replacement of damaged facilities.
Release and Certification Form means a document in the manner
prescribed by section 104(e) of the Act that all claimants who have
received or are awarded compensatory damages under the Act must execute
and return to the Claims Office as required by Sec. 296.30(c).
Subrogee means an insurer or other third party that has paid to a
claimant compensation for Injury and is subrogated to any right that
the claimant has to receive payment under the Act.
Subsistence Resources means food and other items obtained through
hunting, fishing, firewood and other natural resource gathering,
timbering, grazing or agricultural activities undertaken by the
claimant without financial remuneration, on land damaged by the
Hermit's Peak/Calf Canyon Fire.
Tribal Member means an enrolled member of an Indian Tribe.
Sec. 296.5 Overview of the claims process.
(a) The Act is intended to provide persons who suffered Injury from
the Hermit's Peak/Calf Canyon Fire with a simple, expedited process to
seek compensation from the United States. This section provides a brief
explanation of the claims process for claims other than subrogation
claims. It is not intended to supersede the more specific regulations
that follow and explain the claims process in greater detail. To obtain
compensation under the Act, an Injured Person must submit all Hermit's
Peak/Calf Canyon Fire related claims against the United States or any
employee, officer, or agency of the United States to the FEMA Claims
Office. An Injured Person who elects to accept an award under the Act
is barred from accepting an award pursuant to a claim under the Federal
Tort Claims Act or a civil action against the United States or any
employee, officer, or agency of the United States arising out of or
relating to the same subject matter. Judicial review of FEMA decisions
under the Act is available.
(b) The first step in the process is to file a Notice of Loss with
the Claims Office. The Claims Office will provide the claimant with a
written acknowledgement that the claim has been filed and a claim
number.
(c) Shortly thereafter, a Claims Reviewer will contact the claimant
to review the claim. Claims Reviewer will help the claimant formulate a
strategy for obtaining any necessary documentation or other support.
This assistance does not relieve the claimant of their responsibility
for establishing all elements of the injuries and the compensatory
damages that are sought, including that the Hermit's Peak/Calf Canyon
Fire caused the injuries. After the claimant has had an opportunity to
discuss the claim with the Claims Reviewer, a Proof of Loss will be
presented to the claimant for signature. After any necessary
documentation has been obtained and the claim has been fully evaluated,
the Claims Reviewer will submit a report to the Authorized Official.
The Claims Reviewer is responsible for providing an objective
evaluation of the claim to the Authorized Official.
(d) The Authorized Official will review the report and determine
whether compensation is due to the claimant. The claimant will be
notified in writing of the Authorized Official's determination. If the
claimant is satisfied with the decision, payment will be made after the
claimant returns a completed Release and Certification Form. If the
claimant is dissatisfied with the Authorized Official's determination,
an administrative appeal may be filed with the Director of the Claims
Office. If the claimant remains dissatisfied after the appeal is
decided, the dispute may be resolved through binding arbitration or
heard in the United States District Court for the District of New
Mexico.
Sec. Sec. 296.6-296.9 [Reserved]
Subpart B--Bringing a Claim Under the Hermit's Peak/Calf Canyon
Fire Assistance Act
Sec. 296.10 Filing a claim under the Hermit's Peak/Calf Canyon Fire
Assistance Act.
(a) Any Injured Person may bring a claim under the Act by filing a
Notice of Loss. A claim submitted on any form other than a Notice of
Loss will not be accepted. The claimant must provide a brief
description of each injury on the Notice of Loss.
(b) A single Notice of Loss may be submitted on behalf of a
household containing Injured Persons provided that all Injured Persons
on whose behalf the claim is presented are identified.
(c) The Notice of Loss must be signed by each claimant, if the
claimant is an individual, or by a duly authorized legal representative
of each claimant, if the claimant is an entity or an individual who
lacks the legal capacity to sign the Notice of Loss. If one is signing
a Notice of Loss as the legal representative of a claimant, the signer
must disclose their relationship to the claimant. FEMA may require a
legal representative to submit evidence of their authority to act.
(d) The Claims Office will provide Notice of Loss forms through the
mail, electronically, in person at the Claims Office or by telephone
request. The Notice of Loss form can also be downloaded from the
internet at https://www.fema.gov/hermits-peak.
(e) A Notice of Loss may be filed with the Claims Office by mail,
electronically, or in person. Details regarding the filing process can
be found at https://www.fema.gov/hermits-peak.
(f) A Notice of Loss that is completed and properly signed is
deemed to be filed on the date it is received and acknowledged by the
Claims Office.
[[Page 59779]]
Sec. 296.11 Deadline for notifying FEMA of injuries.
The deadline for filing a Notice of Loss is November 14, 2024.
Except as provided in Sec. 296.35 with respect to a request to reopen
a claim, an injury that has not been described: on a Notice of Loss, on
a supplement to a Notice of Loss or a request to supplement a Notice of
Loss under Sec. 296.34 received by the Claims Office on or before
November 14, 2024 cannot be compensated under the Act. The Act
establishes this deadline and does not provide any extensions of the
filing deadline.
Sec. 296.12 Election of remedies.
(a) An Injured Person who accepts a final award under the Act
waives the right to pursue all claims for injuries arising out of or
relating to the same subject matter against the United States or any
employee, officer, or agency of the United States through the Federal
Tort Claims Act or a civil action authorized by any other provision of
law.
(b) An Injured Person who accepts a final award through a Federal
Tort Claims Act claim or a civil action against the United States or
any employee, officer, or agency of the United States relating to the
Hermit's Peak/Calf Canyon Fire waives the right to pursue any claim
arising out of or relating to the same subject matter under the Act.
Sec. 296.13 Subrogation.
An insurer or other third party with the rights of a subrogee, who
has compensated an injured person for Hermit's Peak/Calf Canyon Fire
related injuries, may file a Notice of Loss under the Act for the
subrogated claim. A subrogee may file a Notice of Loss without regard
to whether the Injured Person who received payment from the subrogee
filed a Notice of Loss. A Subrogation Notice of Loss should be filed
after the subrogee has made all payments that it believes the Injured
Person is entitled to receive for Hermit's Peak/Calf Canyon Fire
related injuries under the terms of the insurance policy or other
agreement between the subrogee and the Injured Person, but not later
than November 14, 2024. By filing a Notice of Loss for any subrogated
claim, the subrogee elects the Act as its exclusive remedy against the
United States or any employee, officer, or agency of the United States
for all subrogated claims arising out of the Hermit's Peak/Calf Canyon
Fire. Subrogation claims must be made on a Notice of Loss form
furnished by the Claims Office and such claims will be paid only after
paying claims submitted by injured persons that are not insurance
companies seeking payment as subrogees.
Sec. 296.14 Assignments.
Assignment of claims and the right to receive compensation for
claims under the Act is prohibited and will not be recognized by FEMA.
Sec. Sec. 296.15-296.19 [Reserved]
Subpart C--Compensation Available Under the Hermit's Peak/Calf
Canyon Fire Assistance Act
Sec. 296.20 Prerequisite to compensation.
In order to receive compensation under the Act, a claimant must be
an Injured Person who suffered an injury as a result of the Hermit's
Peak/Calf Canyon Fire and sustained damages.
Sec. 296.21 Allowable damages.
(a) Allowable damages. The Act provides for the payment of actual
compensatory damages for injury or loss of property, business loss, and
financial loss. The laws of the State of New Mexico will apply to the
calculation of damages. Damages must be reasonable in amount.
(b) Exclusions. Punitive damages, statutory damages under section
30-32-4 of the New Mexico Statutes Annotated (2019), interest on
claims, attorney's fees and agents' fees incurred in prosecuting a
claim under the Act or an insurance policy, and adjusting costs
incurred by an insurer or other third party with the rights of a
subrogee that may be owed by a claimant as a consequence of receiving
an award are not recoverable from FEMA. The cost to a claimant of
prosecuting a claim under the Act does not constitute compensatory
damages and is not recoverable from FEMA, except as provided in Sec.
296.31(b).
(c) Loss of property. Compensatory damages may be awarded for an
uninsured or underinsured property loss, a decrease in the value of
real property, damage to physical infrastructure, cost resulting from
lost subsistence, cost of reforestation or revegetation not covered by
any other Federal program, and any other loss that the Administrator
determines to be appropriate for inclusion as a loss of property.
(1) Real property and contents. Compensatory damages for the damage
or destruction of real property and its contents may include the
reasonable cost of reconstruction of a structure comparable in design,
construction materials, size, and improvements, taking into account
post-fire construction costs in the community in which the structure
existed before the fire and current building codes and standards.
Compensatory damages may also include the cost of removing debris and
burned trees, including hazardous materials or soils, stabilizing the
land, replacing contents, and compensation for any decrease in the
value of land on which the structure sat pursuant to paragraph (c)(3)
of this section.
(2) Reforestation and revegetation. Compensatory damages may be
awarded for the cost of replacement of destroyed trees and landscaping.
(3) Decrease in the value of real property. Compensatory damages
may be awarded for a decrease in the value of real property that a
claimant owned before the Hermit's Peak/Calf Canyon Fire if:
(i) The claimant sells the real property in a good faith, arm's
length transaction that is closed no later than November 14, 2024 and
realizes a loss in the pre-fire value; or
(ii) The claimant can establish that the value of the real property
was significantly diminished long-term as a result of the Hermit's
Peak/Calf Canyon Fire.
(4) Subsistence. Compensatory damages will be awarded for lost
Subsistence Resources.
(i) FEMA may reimburse an injured party for the reasonable cost of
replacing Subsistence Resources customarily and traditionally used by
the claimant on or before April 6, 2022, but no longer available to the
claimant as a result of the Hermit's Peak/Calf Canyon Fire. For each
category of Subsistence Resources, the claimant must elect to receive
compensatory damages either for the increased cost of obtaining
Subsistence Resources from lands not damaged by the Hermit's Peak/Calf
Canyon Fire or for the cost of procuring substitute resources in the
cash economy.
(ii) FEMA may consider evidence submitted by claimants, Indian
Tribes, and other knowledgeable sources in determining the nature and
extent of a claimant's subsistence uses.
(iii) Compensatory damages for subsistence losses will be paid for
the period between April 6, 2022 and the date when Subsistence
Resources can reasonably be expected to return to the level of
availability that existed before the Hermit's Peak/Calf Canyon Fire.
FEMA may rely upon the advice of experts in making this determination.
(iv) Long-term damage awards for subsistence resources will be made
to claimants in the form of lump sum cash payments.
(5) Physical infrastructure. Compensatory damages may be awarded
for the damage to physical
[[Page 59780]]
infrastructure, including damages to irrigation infrastructure such as
acequia systems.
(d) Business loss. Compensatory damages may be awarded for damage
to tangible assets or inventory, including timber, crops, and other
natural resources; business interruption losses; overhead costs;
employee wages for work not performed; loss of business net income; and
any other loss that the Administrator determines to be appropriate for
inclusion as a business loss.
(e) Financial loss. Compensatory damages may be awarded for
increased mortgage interest costs, insurance deductibles, temporary
living or relocation expenses, lost wages or personal income, emergency
staffing expenses, debris removal and other cleanup costs, costs of
reasonable heightened risk reduction, premiums for flood insurance, and
any other loss that the Administrator determines to be appropriate for
inclusion as financial loss.
(1) Recovery loans. FEMA will reimburse claimants awarded
compensation under the Act for interest paid on loans, including Small
Business Administration disaster loans obtained after April 6, 2022 for
damages resulting from the Fire. Interest will be reimbursed for the
period beginning on the date that the loan was taken out and ending on
the date when the claimant receives a compensation award (other than a
partial payment). Claimants are required to use the proceeds of their
compensation award to repay Small Business Administration disaster
loans. FEMA will cooperate with the Small Business Administration to
formulate procedures for assuring that claimants repay Small Business
Administration disaster loans contemporaneously with the receipt of
their compensation award.
(2) Flood insurance. FEMA will reimburse claimants for flood
insurance premiums to be paid on or before May 31, 2024 if, as a result
of the Hermit's Peak/Calf Canyon Fire, a claimant who was not required
to purchase flood insurance before the Hermit's Peak/Calf Canyon Fire
is required to purchase flood insurance or the claimant did not
maintain flood insurance before the Fire but purchased flood insurance
after the Fire due to fear of heightened flood risk. Alternatively,
FEMA may provide flood insurance to such claimants directly through a
group or blanket policy.
(3) Out of pocket expenses for treatment of mental health
conditions. FEMA may reimburse an individual claimant for reasonable
out of pocket expenses incurred for treatment of a mental health
condition rendered by a licensed mental health professional, which
condition resulted from or was worsened by the Hermit's Peak/Calf
Canyon Fire. FEMA will not reimburse for treatment identified after
November 14, 2024
(4) Donations. FEMA will compensate claimants for the cost of
merchandise, use of equipment or other non-personal services, directly
or indirectly donated to survivors of the Hermit's Peak/Calf Canyon
Fire not later than November 14, 2022. Donations will be valued at
cost.
(5) Heightened risk reduction. FEMA will reimburse claimants for
the costs incurred to implement reasonable measures necessary to reduce
risks from natural hazards heightened by the Hermit's Peak/Calf Canyon
Fire to the level of risk prevailing before the Hermit's Peak/Calf
Canyon Fire. Such measures may include, for example, risk reduction
projects that reduce an increased risk from flooding, mudslides, and
landslides in and around burn scars. Claimants seeking compensation for
heightened risk reduction must include the claim in their Notice of
Loss by November 14, 2024 or an amended Notice of Loss filed no later
than November 14, 2025. Claimants should take into account current
building codes and standards and must complete the risk reduction
project for which they receive compensation.
(f) Insurance and other benefits. The Act allows FEMA to compensate
Injured Persons only for damages not paid, and that will not be paid,
by insurance or other third-party payments or settlements.
(1) Insurance. Claimants who carry insurance will be required to
disclose the name of the insurer(s) and the nature of the insurance and
provide the Claims Office with such insurance documentation as the
Claims Office reasonably requests.
(2) Coordination with FEMA's Public Assistance Program. Injured
Persons eligible for disaster assistance under FEMA's Public Assistance
Program are expected to apply for all available assistance. Pursuant to
the Act, the Federal share of the costs for Public Assistance projects
is 100 percent. Compensation will not be awarded under the Act for
injuries or costs that are eligible under the Public Assistance
Program.
(3) Benefits provided by FEMA's Individual Assistance program.
Compensation under the Act will not be awarded for injuries or costs
that have been reimbursed under the Federal Assistance to Individual
and Households Program or any other FEMA Individual Assistance Program.
(4) Worker's compensation claims. Individuals who have suffered
injuries that are compensable under State or Federal worker's
compensation laws must apply for all benefits available under such
laws.
(5) Benefits provided by non-governmental organizations and
individuals. Gifts or donations made to a claimant by a non-
governmental organization or an individual, other than wages paid by
the claimant's employer or insurance payments, will be disregarded in
evaluating claims and need not be disclosed to the Claims Office by
claimants.
Sec. 296.22-296.29 [Reserved]
Subpart D--Claims Evaluation
Sec. 296.30 Establishing injuries and damages.
(a) Burden of proof. The burden of proving injuries and damages
rests with the claimant. A claimant may submit for the Administrative
Record a statement explaining why the claimant believes that the
injuries and damages are compensable and any documentary evidence
supporting the claim. Claimants will provide documentation, which is
reasonably available, including photographs and video, to corroborate
the nature, extent, and value of their injuries and/or to execute
affidavits in a form established by the Claims Office. FEMA may
compensate a claimant for an injury in the absence of supporting
documentation, in its discretion, on the strength of an affidavit or
Proof of Loss executed by the claimant, if documentary evidence
substantiating the injury is not reasonably available. FEMA may also
require an inspection of real property. FEMA may request that a
business claimant execute an affidavit, which states that the claimant
will provide documentary evidence, including but not limited to income
tax returns, if requested by the DHS Office of the Inspector General or
the Government Accountability Office during an audit of the claim.
(b) Proof of Loss. All claimants are required to attest to the
nature and extent of each injury for which compensation is sought in
the Proof of Loss. The Proof of Loss, which will be in a form specified
by the Claims Office, must be signed by the claimant or the claimant's
legal representative if the claimant is not an individual or is an
individual who lacks the legal capacity to execute the Proof of Loss.
The Proof of Loss must be signed under penalty of perjury. Non-
subrogation claimants should submit a signed Proof of Loss to the
Claims Office not later than 150 days after the date when the Notice of
[[Page 59781]]
Loss was submitted. This deadline may be extended at the discretion of
the Director of the Claims Office for good cause. If a non-subrogation
claimant fails to submit a signed Proof of Loss within the timeframes
set forth in this section and does not obtain an extension from the
Director of the Claims Office, the Claims Office may administratively
close the claim and require the claimant to repay any partial payments
made on the claim. Subrogation claimants will submit the Proof of Loss
contemporaneously with filing the Notice of Loss.
(c) Release and Certification Form. All claimants who receive
compensation under the Act are required to sign a Release and
Certification Form, including for partial payments under Sec. 296.33.
The Release and Certification Form must be executed by the claimant or
the claimant's legal representative if the claimant is an entity or
lacks the legal capacity to execute the Release and Certification Form.
A Release and Certification Form must be received by the Claims Office
before the Claims Office provides payment on the claim. The United
States will not attempt to recover compensatory damages paid to a
claimant who has executed and returned a Release and Certification Form
within the periods provided above, except in the case of fraud or
misrepresentation by the claimant or the claimant's representative,
failure of the claimant to cooperate with an audit as required by Sec.
296.36 or a material mistake by FEMA.
(d) Authority to settle or compromise claims. Notwithstanding any
other provision of this part, the Director of the Claims Office may
extend an offer to settle or compromise a claim or any portion of a
claim at any time during the process outlined in this part, which if
accepted by the claimant will be binding on the claimant and on the
United States, except that the United States may recover funds
improperly paid to a claimant due to fraud or misrepresentation on the
part of the claimant or the claimant's representative, a material
mistake on FEMA's part or the claimant's failure to cooperate in an
audit as required by Sec. 296.36.
Sec. 296.31 Reimbursement of claim expenses.
(a) FEMA will reimburse claimants for the reasonable costs they
incur in providing documentation requested by the Claims Office. FEMA
will also reimburse claimants for the reasonable costs they incur in
providing appraisals, or other third-party opinions that the Claims
Office deems necessary to determine the amount of the claim. FEMA will
not reimburse claimants for the cost of appraisals or other third-party
opinions not deemed necessary by the Claims Office.
(b) FEMA will provide a lump sum payment for incidental expenses
incurred in claims preparation to claimants that are awarded
compensatory damages under the Act after a properly executed Release
and Certification Form has been returned to the Claims Office. The
amount of the lump sum payment will be the greater of $150 or 5% of the
Act's compensatory damages and insurance proceeds recovered by the
claimant for Hermit's Peak/Calf Canyon Fire related injuries (not
including the lump sum payment or monies reimbursed under the Act for
the purchase of flood insurance) but will not exceed $25,000.
Subrogation claimants and claimants whose only Hermit's Peak/Calf
Canyon Fire related loss is for flood insurance premiums will not be
eligible.
Sec. 296.32 Determination of compensation due to claimant.
(a) Authorized Official's report. After the Claims Office has
evaluated all elements of a claim as stated in the Proof of Loss, the
Authorized Official will issue, and provide the claimant with a copy
of, the Authorized Official's determination.
(b) Claimant's options upon issuance of the Authorized Official's
determination. Not later than 120 days after the date that appears on
the Authorized Official's determination, the claimant must either
accept the determination by submitting a Release and Certification Form
to FEMA and/or initiate an Administrative Appeal in accordance with
Sec. 296.41. Claimants must sign the Release and Certification Form to
receive payment on their claims (including for partial payments). The
claimant will receive payment of compensation awarded by the Authorized
Official after FEMA receives the completed Release and Certification
Form. If the claimant does not either submit a Release and
Certification Form to FEMA or initiate an Administrative Appeal no
later than 120 days after the date that appears on the Authorized
Official's determination, the claimant will be conclusively presumed to
have accepted the Authorized Official's determination. The Director of
the Claims Office may modify the deadlines set forth in this subsection
at the request of a claimant for good cause shown.
Sec. 296.33 Partial payments.
The Claims Office at the request of a claimant may make one or more
partial payments on any aspect of a claim that is severable. Receipt by
a claimant of a partial payment is contingent on the claimant signing a
Release and Certification Form for the severable part of the claim for
which partial payment is being made. Acceptance of a partial payment in
no way affects a claimant's ability to pursue an Administrative Appeal
of the Authorized Official's determination or to pursue other rights
afforded by the Act with respect to any portion of a claim for which a
Release and Certification Form has not been executed. The Claims Office
decision on whether to provide a partial payment cannot be appealed.
Sec. 296.34 Supplementing claims.
A claimant may amend the Notice of Loss to include additional
claims at any time before signing a Proof of Loss. After the claimant
has submitted a Proof of Loss and before submission of a Release and
Certification Form, a claimant may request that the Director of the
Claims Office consider one or more injuries not addressed in the Proof
of Loss. The request must be submitted in writing to the Director of
the Claims Office and received not later than the deadline for filing
an Administrative Appeal under Sec. 296.32 or November 14, 2024,
whichever is earlier. It must be supported by the claimant's
explanation of why the injury was not previously reported. If good
cause is found to consider the additional injury, the Director will
determine whether compensation is due to the claimant for the Loss
under the Administrative Appeal procedures described in Sec. 296.41.
Sec. 296.35 Reopening a claim.
The Director of the Claims Office may reopen a claim if requested
to do so by the claimant, notwithstanding the submission of the Release
and Certification Form, for the limited purpose of considering issues
raised by the request to reopen if, not later than November 14, 2025,
the claimant desires heightened risk reduction compensation in
accordance with Sec. 296.21(e)(5) or the claimant closed the sale of
real property and wishes to present a claim for decrease in the value
of the real property under Sec. 296.21(c)(3). Claimants may request to
reopen claims where the claimant has incurred additional losses under
Sec. 296.21(c)(1) as part of a reconstruction in excess of those
previously awarded or the Director of the Claims Office otherwise
determines that claimant has demonstrated good cause no later than the
deadline established by the Director of the Claims Office as published
in the Federal
[[Page 59782]]
Register and at https://www.fema.gov/hermits-peak.
Sec. 296.36 Access to records.
For purpose of audit and investigation, a claimant will grant the
DHS Office of the Inspector General and the Comptroller General of the
United States access to any property that is the subject of a claim and
to any and all books, documents, papers, and records (including any
relevant tax records) maintained by a claimant or under the claimant's
control pertaining or relevant to the claim.
Sec. 296.37 Confidentiality of information.
Confidential information submitted by individual claimants is
protected from disclosure to the extent permitted by the Privacy Act.
These protections are described in the Privacy Act Notice provided with
the Notice of Loss. Other claimants should consult with FEMA concerning
the availability of confidentiality protection under exemptions to the
Freedom of Information Act and other applicable laws before submitting
confidential, proprietary or trade secret information.
Sec. 296.38-296.39 [Reserved]
Subpart E--Dispute Resolution
Sec. 296.40 Scope.
This subpart describes a claimant's right to bring an
Administrative Appeal in response to the Authorized Official's
Determination. It also describes the claimant's right to pursue
arbitration or seek judicial review following an Administrative Appeal.
Sec. 296.41 Administrative appeal.
(a) Notice of appeal. A claimant may request that the Director of
the Claims Office review the Authorized Official's determination by
written request to the Appeals Docket, Office of Hermit's Peak/Calf
Canyon Claims, postmarked or delivered within 120 days after the date
that appears on the Authorized Official's determination pursuant to
Sec. 296.32. The claimant will submit along with the notice of appeal
a statement explaining why the Authorized Official's determination was
incorrect. Information regarding where to file can be found at http://www.fema.gov/hermits-peak.
(b) Acknowledgement of appeal. The Claims Office will acknowledge
receipt of an appeal. Following the receipt of a timely filed appeal,
the Director of the Claims Office will obtain the Administrative Record
from the Authorized Official and transmit a copy to the claimant.
(c) Supplemental filings. The claimant may supplement their
statement accompanying the appeal and provide any additional
documentary evidence supporting the appeal within 60 days after the
date when the appeal is filed. The Director of the Claims Office may
extend these timeframes or authorize additional filings either on their
own initiative or in response to a request by the claimant for good
cause shown.
(d) Admissible evidence. The claimant may rely upon any relevant
evidence to support the appeal, regardless of whether the evidence was
previously submitted to the Claims Reviewer for consideration by the
Authorized Official.
(e) Obtaining evidence. The Director of the Claims Office may
request from the claimant or from the Authorized Official any
additional information that is relevant to the issues posed by the
appeal in their discretion.
(f) Conferences. The Director of the Claims Office may schedule a
conference to gain a better understanding of the issues or to explore
settlement or compromise possibilities. The claimant may also request a
conference. Conferences will generally be conducted virtually. In
limited circumstances, the Director may convene an in-person conference
at a location in New Mexico designated by the Director. A claimant may
request that the Director of the Claims Office appoint a mediator at
FEMA's expense to facilitate such conferences.
(g) Hearings. The Director of the Claims Office may exercise the
discretion to convene an informal hearing to receive oral testimony
from witnesses or experts. The rules under which hearings will be
conducted will be established by the Director of the Claims Office and
provided to the claimant. Formal rules of evidence applicable to court
proceedings will not be used in hearings under this subsection.
Hearings will generally be conducted virtually, be transcribed, and the
transcript will be entered in the Administrative Record. In limited
circumstances, the Director may convene an in-person hearing at a
location in New Mexico designated by the Director.
(h) Decision on appeal. After the allotted time for submission of
evidence has passed, the Director of the Claims Office will close the
Administrative Record and render a written decision on the
Administrative Appeal. The Director of the Claims Office's decision on
the Administrative Appeal will constitute the final decision of the
Administrator of FEMA under sections 104(d)(2)(B) and 104(i)(1) of the
Act.
(i) Claimant's options following appeal. The claimant's concurrence
with the decision in the Administrative Appeal will be conclusively
presumed unless the claimant initiates arbitration in accordance with
Sec. 296.42 or seeks judicial review in accordance with Sec. 296.43.
If the claimant concurs with the Director's determination, payment of
any additional damages awarded by the Director will be made to the
claimant upon receipt of a properly executed Release and Certification
Form.
Sec. 296.42 Arbitration.
(a) Initiating arbitration. A claimant who is dissatisfied with the
outcome of the Administrative Appeal may elect to submit the dispute to
a binding arbitration process. A claimant may initiate arbitration by
submitting a written request to the Arbitration Administrator for
Hermit's Peak/Calf Canyon Claims. Additional information regarding how
to submit a written arbitration request can be found at http://www.fema.gov/hermits-peak. The written request for arbitration must be
electronically stamped or postmarked no later than 60 days after the
date that appears on the Administrative Appeal decision.
(b) Permissible claims. A claimant may not arbitrate an issue
unless it was raised and decided in the Administrative Appeal.
Arbitration will be conducted on the evidence in the Administrative
Record. Evidence not previously entered into the Administrative Record
will not be considered.
(c) Selection of arbitrator. The Arbitration Administrator will
maintain a list of qualified arbitrators who have agreed to serve. The
arbitration will be decided by one arbitrator if the amount in dispute
is $500,000 or less and a panel of three arbitrators if the amount in
dispute exceeds $500,000. Arbitrators will be assigned by the
Arbitration Administrator through a random drawing.
(d) Conduct of arbitration. Pursuant to guidelines from the
Arbitration Administrator, which will be provided directly to claimants
who have filed a request for arbitration, the arbitration process will
include an arbitration hearing with consideration of the claimant's
written request for arbitration, the Administrative Record, and oral
testimony. Hearings will generally be conducted virtually. In limited
circumstances, the arbitrator may convene an in-person hearing at a
location in New Mexico designated by the Arbitration Administrator.
(e) Decision. After a hearing and reviewing the evidence, the
arbitrator(s)
[[Page 59783]]
will render a written decision and will transmit the decision to the
Arbitration Administrator, the claimant, and the Director of the Claims
Office. If a panel of three arbitrators conducts the arbitration, at
least two of the three arbitrators must sign the decision. The
arbitrator(s) should render a decision no later than 10 Days after a
hearing is concluded. The Arbitration Administrator may extend the time
for a decision with notice to the claimant and the Director of the
Claims Office. The decision will establish the compensation due to the
claimant, if any, and the reasons therefor.
(f) Action on arbitration decision. The Arbitration Administrator
will forward the arbitration decision to the claimant and, if
additional compensation is awarded to the claimant, a Release and
Certification Form. Additional compensation awarded in the arbitration
will be paid to the claimant after the signed Release and Certification
Form is received by the Arbitration Administrator.
(g) Final decision. The decision of the arbitrator(s) will be final
and binding on all parties and will not be subject to any
administrative or judicial review. The arbitrator(s) may correct
clerical, typographical or computational errors as requested by the
Arbitration Administrator.
(h) Administration of arbitration. The Arbitration Administrator
oversees arbitration procedures and will resolve any procedural
disputes arising in the course of the arbitration.
(i) Expenses. The Arbitration Administrator will pay all fees and
expenses of the arbitrator(s). The claimant is responsible for any
expenses they incur, including travel costs.
Sec. 296.43 Judicial review.
As an alternative to arbitration, a claimant dissatisfied with the
outcome of an Administrative Appeal may seek judicial review of the
decision by bringing a civil lawsuit against FEMA in the United States
District Court for the District of New Mexico. This lawsuit must be
brought within 60 Days of the date that appears on the Administrative
Appeal decision. Pursuant to section 104(i) of the Act, the court may
only consider evidence in the Administrative Record. The court will
uphold FEMA's decision if it is supported by substantial evidence on
the record considered as a whole.
Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2023-18457 Filed 8-28-23; 8:45 am]
BILLING CODE 9111-68-P