Final Rule on Simplified Procedures

47359

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations
TABLE 1 TO PARAGRAPH (a)(9)(v)—NEGATIVE DECLARATIONS FOR THE 2015 OZONE NAAQS—Continued
Title

EPA 453/R–08–003 ..............

Miscellaneous Metal and Plastic Parts Coatings; Table 4—Automotive/Transportation and Business Machine Plastic Parts.
Miscellaneous Metal and Plastic Parts Coatings; Table 5—Pleasure Craft Surface
Coating.
Miscellaneous Metal and Plastic Parts Coatings; Table 6—Motor Vehicle Materials
Fiberglass Boat Manufacturing Materials ....................................................................
Miscellaneous Industrial Adhesives .............................................................................
Automobile and Light-Duty Truck Assembly Coatings ................................................
Oil and Natural Gas Industry .......................................................................................
Major non-CTG sources of VOC .................................................................................
Major sources of NOX ..................................................................................................

EPA 453/R–08–003 ..............
EPA 453/R–08–003 ..............
EPA 453/R–08–004 ..............
EPA 453/R–08–005 ..............
EPA 453/R–08–006 ..............
EPA 453/B–16–001 ..............
—N/A— .................................
—N/A— .................................

*

*

*

*

Emergency Management Agency, 500 C
Street SW, Washington, DC 20472,
[email protected], (202) 646–
3834. Persons with speech or hearing
difficulties may reach this number via
teletype at 711.
SUPPLEMENTARY INFORMATION:

*

[FR Doc. 2022–16019 Filed 8–2–22; 8:45 am]
BILLING CODE 6560–50–P

DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
44 CFR Part 206
[Docket ID FEMA–2022–0020]
RIN 1660–AB10

Public Assistance Program’s
Simplified Procedures Large Project
Threshold
Federal Emergency
Management Agency, DHS.
ACTION: Final rule and request for
comments.
AGENCY:

The Federal Emergency
Management Agency (FEMA) is revising
its regulations governing the Public
Assistance program that provides grants
to State, local, Tribal, and territorial
governments, as well as eligible private
nonprofit organizations, for debris
removal, emergency protective
measures, and the repair, replacement,
or restoration of disaster-damaged
facilities after a presidentially-declared
major disaster to update the monetary
threshold for when FEMA will process
an application using ‘‘simplified
procedures.’’
DATES: This rule is effective August 3,
2022. Comments must be received on or
before October 3, 2022.
ADDRESSES: The docket for this
rulemaking is available for inspection
using the Federal eRulemaking Portal at
http://www.regulations.gov and can be
viewed by following that website’s
instructions.
FOR FURTHER INFORMATION CONTACT: Tod
Wells, Recovery Directorate, Federal
SUMMARY:

lotter on DSK11XQN23PROD with RULES1

Adopted: 01/25/2021
Submitted: 03/23/2021
SIP Approved: 08/03/2022

CTG document No.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

1. Public Participation
Interested persons are invited to
participate in this rulemaking by
submitting comments and related
materials. We will consider all
comments and material received during
the comment period.
If you submit a comment, include the
Docket ID FEMA–2022–0020, indicate
the specific section of this document to
which each comment applies, and give
the reason for each comment. All
submissions may be posted, without
change, to the Federal e-Rulemaking
Portal at http://www.regulations.gov,
and will include any personal
information you provide. Therefore,
submitting this information makes it
public. For more information about
privacy and the docket, see 83 FR
48645.
Viewing comments and documents:
For access to the docket to read
background documents or comments
received, go to the Federal
e-Rulemaking Portal at http://
www.regulations.gov.
2. Background and Discussion of Rule
FEMA’s Public Assistance (PA)
program provides grants to State, local,
Tribal, and territorial governments, as
well as eligible private nonprofit (PNP)
organizations, for debris removal,
emergency protective measures, and the
repair, replacement, or restoration of
disaster-damaged facilities after a
Presidentially-declared major disaster.1
FEMA categorizes each grant award as
1 The PA program is authorized by the Robert T.
Stafford Disaster Relief and Emergency Assistance
Act, as amended, 42 U.S.C. 5170b, 5172, 5173,
5192.

PO 00000

Frm 00029

Fmt 4700

Sfmt 4700

X
X
X
X
X
X
X
X
X

either a small or large project,2 which is
determined by a monetary threshold set
each year by FEMA pursuant to statute.
See section 422 of the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act (Stafford Act), codified
at 42 U.S.C. 5189.3 FEMA obligates
money for a small project based on an
estimate of the project costs, and FEMA
obligates money for a large project based
on actual project costs as the project
progresses and cost documentation is
provided to FEMA.4
In 2013, the Sandy Recovery
Improvement Act (SRIA) 5 amended
section 422(b) of the Stafford Act and
required FEMA to complete an analysis
to determine whether an increase in the
large project threshold was appropriate
and submit to Congress a report on its
findings not later than one year after
January 29, 2013.6 On January 29, 2014,
FEMA submitted its report to Congress,
which recommended increasing the
maximum threshold from $68,500 7 to
$120,000.8 Section 422(b)(2) of the
Stafford Act required FEMA to
implement the new threshold
‘‘immediately’’ following submission of
the report to Congress, ‘‘without regard
2 A project is a logical grouping of work required
as a result of the declared major disaster or
emergency and may include eligible work at several
sites. See 44 CFR 206.201(k); FEMA Policy 104–
009–2, Public Assistance Program and Policy
Guide, v.4 (PAPPG), pp. 60–63 (June 1, 2020),
available at https://www.fema.gov/sites/default/
files/documents/fema_pappg-v4-updated-links_
policy_6-1-2020.pdf.
3 See also 44 CFR 206.203(c), 206.205. FEMA
obligates money for a small project based on an
estimate of the project costs; FEMA obligates money
for a large project based on actual project costs as
the project progresses and cost documentation is
provided to FEMA.
4 See 44 CFR 206.203(c); PAPPG, pp. 199–202.
5 Public Law 113–2, section 1107.
6 42 U.S.C. 5189(b)(1).
7 The large project threshold for Fiscal Year (FY)
2014. 78 FR 64232 (Oct. 28, 2013). See also https://
www.fema.gov/assistance/public/applicants/percapita-impact-indicator.
8 A copy of this report is on regulations.gov under
docket ID FEMA–2014–0009.

E:\PICKUP\03AUR1.SGM

03AUR1

47360

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

to chapter 5 of title 5’’ of the United
States Code, on Administrative
Procedure, which includes a section on
Rule making,9 (see Section 3.A below)
and to adjust the threshold annually to
reflect changes in the Department of
Labor’s Consumer Price Index for Urban
Consumers (CPI–U).10 Following
submission of its report, FEMA
published a final rule updating the
maximum threshold to $120,000.11
In addition to the final rule, FEMA
published a notice requesting comments
from the public regarding the report that
justified the increase.12 FEMA received
19 public comments, 18 of which were
from 16 States.13 Of these, eight States 14
supported increasing the maximum
threshold. Commenters noted benefits of
the updated maximum threshold, such
as increased State/local control over
funding and decreased documentation
burden, time, and expenses in
administering PA grants, especially
regarding reduced need for final
reconciliation of actual costs, final
inspections, funding increase requests,
and monitoring. Commenters also noted
that the ability to immediately disburse
75 percent of project costs after
obligation will help expedite recovery
in affected areas.
Five States 15 opposed increasing the
maximum threshold. Indiana noted that
its State Administrative Plan requires
reconciliation of costs, and that it
performs audits in accordance with the
Single Audit Act.16 Neither of these
requirements should prevent adoption
of an increase to the threshold. All nonFederal entities that expend $750,000 or
more during the non-Federal entity’s
fiscal year in Federal awards are subject
to the Single Audit Act and must have
a single or program-specific audit

conducted for that year in accordance
with the provisions 2 CFR part 200.17
The scope of the audits are to ensure
that non-Federal entities have complied
with Federal statutes, regulations, and
the terms and conditions of Federal
awards.18 The State Administrative Plan
each State is required to have for the PA
program refers back to the audit
procedures in 2 CFR part 200 and
should be updated annually.19 This rule
will change FEMA’s regulations and the
terms and conditions of PA grants with
respect to the large project threshold.
That means there will be no impact to
States with respect to any Federal
auditing requirements. It appears that
this has since been understood and
adopted by the State of Indiana; FEMA
reviewed Indiana’s 2021 State
Administrative Plan and determined
that it only requires reconciliation of
costs for large projects.
North Carolina expressed concern that
an increase in the maximum threshold
may increase the frequency of cost
overruns and underruns, putting
additional pressure on recipients to
ensure that estimates are accurate. Since
2014, FEMA has taken concerns about
the accuracy of its estimates into
consideration, and has adopted changes
within the PA program that have
significantly improved, streamlined,
and centralized its cost estimating
process to establish more consistent
estimating across all regions and
disasters. This has resulted in continued
improvements to the accuracy of all its
estimates.20
Arizona stated that it has a statutory
requirement to audit all projects, and
also noted that fronting a larger Federal
17 2

CFR 200.501(a).
CFR 200.514(d).
19 44 CFR 206.207(b)(1)(iii)(H); 44 CFR
206.207(b)(3).
20 To ensure that the estimation process is
accurate, FEMA also conducted an analysis on Net
Small Project Overruns (NSPOs), the process by
which a subrecipient requests additional funding
through the PA appeals process if its total cost
incurred for all of its small projects exceeds the
total amount FEMA obligated for those projects.
The analysis showed that out of 627,656 total
obligated small projects since 1997, there were only
20 instances of second appeal NSPOs (0.003
percent). Additionally, out of 137,913 total
obligated small projects since 2013, there were only
70 instances of first appeal NSPOs (0.05 percent).
Small projects make up a significant majority of the
PA project universe; for example, since the
adoption of the National PA Delivery Model in
2017, 45,944 out of 59,178 total projects were small
projects, making up 78 percent of the total number
of PA projects in that time. The number of first and
second NSPO appeals in relation to the total
number of small projects is not statistically
significant. This indicates that the funding FEMA
provides for small projects is, by and large,
sufficient for applicants to complete all of their
small projects. A copy of this report is on
regulations.gov under docket ID FEMA–2014–0009.
18 2

95

U.S.C. 553.
U.S.C. 5189(b)(2).
11 79 FR 10686 (Feb. 26, 2014).
12 79 FR 68899 (Nov. 19, 2014).
13 FEMA received 18 comments from the
following States: Alaska, Arizona, Arkansas, Idaho,
Indiana, Kansas, New Jersey, New Mexico, North
Carolina, Ohio, Oregon, Pennsylvania, South
Carolina, South Dakota, Washington, and
Wisconsin. (Alaska and Kansas each submitted two
comments). FEMA received one comment from a
private citizen from California.
14 South Carolina (FEMA–2014–0009–0005);
Idaho (FEMA–2014–0009–0007); New Jersey
(FEMA–2014–0009–0009); Oregon (FEMA–2014–
0009–0010); Wisconsin (FEMA–2014–0009–0011);
Arkansas (FEMA–2014–0009–0012); Alaska
(FEMA–2014–0009–0020 and FEMA–2014–0009–
0022); and Washington (FEMA–2014–0009–0021).
15 Indiana (FEMA–2014–0009–0013); Arizona
(FEMA–2014–0009–0014); Ohio (FEMA–2014–
0009–0015); North Carolina (FEMA–2014–0009–
0017); and Pennsylvania (FEMA–2014–0009–0018).
16 The Single Audit Act, passed by Congress in
1984, requires most governmental recipients of
Federal assistance to have annual financial or
compliance audits. See 31 U.S.C. 7501 et seq.

lotter on DSK11XQN23PROD with RULES1

10 42

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

PO 00000

Frm 00030

Fmt 4700

Sfmt 4700

share based on estimates could increase
its burden when the estimated costs of
a subrecipient’s project differ from
actual costs. FEMA reviewed Arizona’s
2021 State Administrative Plan and,
similar to Indiana, it appears that
Arizona no longer has the statutory
requirement because its 2021 Plan only
requires reconciliation of costs for large
projects. Arizona also objected to
FEMA’s implementing the change in
threshold without prior consultation
with the States. However, Congress
explicitly directed FEMA to
‘‘immediately’’ establish the threshold
‘‘without regard to chapter 5 of title 5’’
of the United States Code. 42 U.S.C.
5189(b)(2)(A). As a result, FEMA
immediately implemented the updated
threshold in 2014 without seeking prior
public comment, but sought postpromulgation comments on the report.
FEMA intends to reach out specifically
to the five States who objected in 2014
to ensure that they understand how to
implement the increase and issue
clarifying guidance, if necessary.
Ohio and Pennsylvania both
commented that because they pay for 25
percent of projects (through the cost
share), they were unlikely to change
their procedures in order to ensure
reconciliation.21 FEMA acknowledges
that many States have their own
requirements to reconcile all project
costs, and may wish to ensure that local
governments have a higher level of
accuracy when completing PA projects
based on the State’s 25 percent
contribution to their projects. While
FEMA lacks control over what rules
States may impose upon themselves,
FEMA notes that the current threshold
has failed to keep pace with the PA
program’s increased disaster spending,
and increasing the threshold would
greatly reduce the administrative
burden and resources spent by FEMA
and recipients without audit
requirements. This reduction in
administrative burden would result in
expedited funding, facilitating quicker
recovery in these areas. That some
recipients impose upon themselves
rules that may ultimately prevent their
recovery in the most expedited manner
does not mean that FEMA should
deprive all recipients of the opportunity
to expedite recovery.
Congress enacted section 422 of the
Stafford Act to increase the
administrative efficiency of the PA
program. The simplified procedures
authorized under section 422 allow
FEMA to award funding for projects
21 Ohio also noted, however, that good quality
Project Worksheets (PWs) and clear scopes of work
would likely reduce its administrative costs.

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

under the threshold based on estimates,
simplifying final accounting and project
closeout procedures. This expedites
FEMA’s processing of PA grant funding
by eliminating much of the
administrative burden that FEMA
experiences when awarding projects at
or above the threshold (i.e., large
projects), ultimately reducing FEMA’s
cost of administering PA funding. PA
projects beneath the established
threshold represent the vast majority of
individual projects, but a small portion
of FEMA’s overall funding under the PA
program. These procedures, therefore,
allow FEMA to expedite its provision of
Federal disaster assistance, saving
FEMA, and by extension, the American
taxpayer, time and money on small
projects, but still provide financial
oversight for the majority of funding
provided under the PA program.
Moreover, States without statutory audit
requirements 22 will also benefit from
these efficiencies in their administration
of PA grants.
In 1988, when Congress set the
original threshold at $35,000, it noted
that ‘‘damage survey reports of less than
$35,000 have constituted 95% of all
damage survey reports but only 32% of
all expended dollars.’’ 23 Congress
envisioned that these simplified
procedures would allow ‘‘. . .
[applicants] [to] receive an amount
estimated by the Federal Government
. . . rather than the standard—and
sometimes cumbersome—procedure of
performing audits and inspections to
verify the cost of an eligibility for
payment of the costs of the work.’’ 24
Congress believed that this more
streamlined approach would ‘‘result in
substantial savings of time and money
that . . . should have a significant and
beneficial impact on FEMA’s overall
program.’’ 25 Through the SRIA
amendments to section 422(b), Congress
again highlighted the importance of the
administrative efficiency of the PA
program when it directed FEMA to
determine whether an increase in the
threshold was appropriate and to review
22 States without audit requirements that
supported the increase were Oregon (FEMA–2014–
0009–0010); Arkansas (FEMA–2014–0009–0011);
and Alaska (FEMA–2014–0009–0020 and FEMA–
2014–0009–0022). Idaho (FEMA–2014–0009–0007),
which reconciles actual costs on all projects, also
supported the increase, as did South Carolina
(FEMA–2014–0009–0005), which reconciles actual
costs on 20 percent of small projects (and all large
projects).
23 See H.R. REP. NO. 100–517 (1988), p. 11.
‘‘Damage survey reports’’ is the former name of PA
project worksheets.
24 Id.
25 Id.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

the threshold every three years.26 FEMA
is mindful both of Congress’ efforts to
improve administrative efficiency of the
program and its responsibility to be
fiscal stewards of public funding.
Following 2014, FEMA continued to
adjust the threshold annually to reflect
changes in the CPI–U, as required under
section 422(b)(2).27 Section 422(b)(3)
requires FEMA to review the threshold
every three years.28 FEMA conducted an
analysis in 2017 and recommended no
change to the threshold at that time.29
As a result, FEMA has only made
annual CPI–U adjustments to the
threshold since then.30
Since FEMA’s analysis in 2017, the
United States has seen increased
disaster activity either due to, or
amplified or aggravated by, the climate
crisis. For example, in 2017, Hurricanes
Harvey, Irma, and Maria caused a
combined total of $294.2 billion in
damages,31 with FEMA providing over
$49.9 billion in PA funding for these
disasters.32 Damages from wildfires in
that year and the next totaled
approximately $46.2 billion; 33 FEMA
provided over $742 million in PA
26 In 2013, the number of projects beneath the
threshold had decreased from 95 percent (1988) to
88 percent.
27 42 U.S.C. 5189(b)(2). FEMA publishes the
annual adjustments to the large project threshold at
https://www.fema.gov/assistance/public/
applicants/per-capita-impact-indicator. For more
information on the National PA Delivery Model, see
the Public Assistance Delivery Model Fact Sheet
(Aug. 17, 2018), available at https://www.fema.gov/
sites/default/files/2020-07/fema_pa_deliverymodel_factsheet.pdf.
28 42 U.S.C. 5189(b)(3).
29 A copy of this analysis is on regulations.gov
under docket ID FEMA–2022–0020. During the
period of 2014–2017, FEMA saw fewer disasters
and, as a result, decreased disaster spending.
Compared to FY 2013, when FEMA spent a total of
$18.4 billion on recovery, FEMA spent under $2
billion annually in FYs 2014 to 2017.
30 The current threshold, for Fiscal Year 2022, is
$139,800. 86 FR 63040 (Nov. 15, 2021); see also
FEMA, Per Capita Impact Indicator and Project
Thresholds, https://www.fema.gov/assistance/
public/applicants/per-capita-impact-indicator
(accessed Nov. 3, 2021). Note, however, that the
analysis included in this rule was conducted based
on the Fiscal Year 2021 threshold of $132,800. See
85 FR 69639 (Nov. 3, 2020).
31 See National Oceanic & Atmospheric
Administration (NOAA), National Centers for
Environmental Information (NCEI), Billion-Dollar
Weather and Climate Disasters: Events, https://
www.ncdc.noaa.gov/billions/events/US/1980-2021
(accessed Nov. 3, 2021); see also https://
www.washingtonpost.com/news/energyenvironment/wp/2018/01/08/hurricanes-wildfiresmade-2017-the-most-costly-u-s-disaster-year-onrecord/.
32 This estimate of PA funding is based on data
from FEMA’s Emergency Management Mission
Integrated Environment (EMMIE) Enterprise Data
Warehouse, as of Dec. 10, 2021.
33 See NOAA NCEI, Billion-Dollar Weather and
Climate Disasters: Events, https://www.ncdc.
noaa.gov/billions/events/US/1980-2021 (accessed
Nov. 3, 2021).

PO 00000

Frm 00031

Fmt 4700

Sfmt 4700

47361

funding for the 2017 wildfires.34 In
2020, FEMA responded to 22 events
with losses exceeding $1 billion—the
highest in its history—which included a
record number of tropical storms in the
Atlantic and the Nation’s most active
wildfire year recorded.35 The estimated
damages from these 22 events totaled
approximately $95 billion, with over
$6.5 billion comprising FEMA’s share of
non-COVID related PA funding.36
In addition to increased natural
disasters, in 2020 FEMA also issued an
unprecedented 57 major disaster
declarations in response to COVID–19,37
including every State, 5 territories, the
Seminole Tribe of Florida, and the
District of Columbia.38 Defeating
COVID–19 remains the Administration’s
top public health priority. As of January
24, 2022, the Nation has lost more than
869,000 lives to COVID–19, which has
particularly affected vulnerable
populations who are at the highest risk
of infection and adverse outcomes. It is
the policy of the United States to
prioritize and invest in the Nation’s
public health system to address health
disparities that have been exposed and
worsened by COVID–19 and build a
stronger public health system that
allows us to be ready for the next
virus.39 In line with the goal of defeating
the pandemic, the President directed
FEMA to expand financial support of
State, local, Tribal, and territorial
partners by increasing the Federal cost
share under PA to 100 percent to ensure
safe re-opening.40 FEMA also
34 This estimate of PA funding is based on data
from FEMA’s EMMIE Enterprise Data Warehouse,
as of Dec. 10, 2021.
35 See National Oceanic and Atmospheric
Administration, ‘‘Record Number of Billion-Dollar
Disasters Struck U.S. in 2020, Jan. 8, 2021, available
at https://www.noaa.gov/stories/record-number-ofbillion-dollar-disasters-struck-us-in-2020 (last
accessed Nov. 3, 2021).
36 Id. The estimate of PA funding is based on data
from FEMA’s EMMIE Enterprise Data Warehouse,
as of Dec. 10, 2021.
37 COVID–19 is a communicable disease caused
by severe acute respiratory syndrome coronavirus 2
(SARS–CoV–2), that was first identified as the cause
of an outbreak of respiratory illness that began in
Wuhan, Hubei Province, People’s Republic of
China. On March 13, 2020, the President declared
a nationwide emergency under section 501(b) of the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act, authorizing FEMA to provide
assistance for emergency protective measures to
respond to the COVID–19 pandemic. COVID–19
Emergency Declaration available at https://
www.fema.gov/news-release/2020/03/13/covid-19emergency-declaration (accessed Dec. 15, 2020).
38 See https://www.fema.gov/disasters/ (accessed
Dec. 15, 2020).
39 Proclamation 10175 of April 5, 2021, ‘‘National
Public Health Week, 2021,’’ 86 FR 18171 (Apr. 8,
2021).
40 See Memorandum of February 2, 2021,
‘‘Maximizing Assistance From the Federal

E:\PICKUP\03AUR1.SGM

Continued

03AUR1

47362

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

participates in the White House’s
COVID–19 Pandemic Testing Board,
which coordinates the Federal
Government’s efforts to promote
COVID–19 testing and identifies barriers
to increase testing among priority
populations and high-risk groups,41 and
has helped vaccinate more than 200
million Americans.42
In Fiscal Year 2020 declarations,
FEMA’s funding under the PA program
is over $35.9 billion. Although costs for
COVID–19 accounted for 93 percent of
this funding,43 as climate change
continues to make natural disasters
more frequent and more destructive,
FEMA expects even greater spending on
recovery will be required in the future.44
In 2020, FEMA conducted another
analysis to ensure that FEMA is
maximizing the benefits of simplified
procedures in light of its more recent
disaster spending, while also effectively
managing risk associated with the
provision of Federal disaster assistance
and the responsible stewardship of
public funds.45 In particular, FEMA
considered the extent to which
increasing the threshold would reduce
the administrative burden and resources
spent by FEMA and recipients without
statutory audit requirements, and how
that reduction in administrative burden
would result in expedited funding,
facilitating quicker recovery. FEMA also
considered past performance,
specifically how the current threshold
has failed to keep pace with the PA
program’s increased disaster spending.
Regarding accountability measures,
FEMA concluded that the reduced
scrutiny accompanying an increased
threshold would not pose a significant
risk given FEMA’s improvements to its
cost estimating procedures.46 Based on
this analysis, FEMA determined that it
should increase the threshold for
simplified procedures to $1,000,000.
FEMA determined that projects below
Emergency Management Agency To Respond to
COVID–19,’’ 86 FR 8281 (Feb. 5, 2021).
41 Executive Order 13996, ‘‘Establishing the
COVID–19 Pandemic Testing Board and Ensuring a
Sustainable Public Health Workforce for COVID–19
and Other Biological Threats,’’ 86 FR 7197 (Jan. 26,
2021).
42 https://www.fema.gov/blog/100-days-fema-andour-partners-action (last accessed May 4, 2021).
43 FEMA’s COVID–19 PA Obligations are $33.5
billion as of November 8, 2021.
44 Since 1980, for instance, the U.S. has sustained
291 climate-related disasters where damages
reached or exceeded $1 billion, with the total cost
of these events alone exceeding $1.900 trillion.
National Oceanic and Atmospheric Administration,
‘‘Billion-Dollar Weather and Climate Disasters:
Overview,’’ available at https://www.ncdc.
noaa.gov/billions/ (last accessed Apr. 12, 2021).
45 A copy of this analysis is on regulations.gov
under docket ID FEMA–2022–0020.
46 See infra, note 20.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

the Fiscal Year (FY) 2021 CPI-adjusted
threshold of $132,800 represented only
76.8 percent of the total number of
projects and 2.4 percent of total funding.
Raising the threshold to $1,000,000
achieves the same approximate
percentage of total projects as Congress’
original adoption of simplified
procedures in 1988 at 95 percent.47
Raising the threshold to $1,000,000
accounts for a larger amount of small
projects (from 76.8 to 94.4 percent) and
an increase in the percentage of total
funding (from 2.4 to 8.4 percent). This
comports with Congress’ original goal of
maximizing the number of total projects
eligible for simplified procedures while
minimizing the amount of funding
subject to the risks inherent to
simplified final accounting. FEMA will
continue to adjust annually for inflation
based on the CPI–U.
This rule also adds a new paragraph
‘‘(c)(3)’’ in section 206.203 providing
that the new threshold will apply to all
Project Worksheets (PWs) for major
disasters and emergencies declared on
or after March 13, 2020, that have not
been obligated as of the effective date of
this rule.48 For PWs from major
disasters and emergencies declared
before March 13, 2020, or that have
already been obligated, the threshold
will continue to be the amount
previously published in the Federal
Register for the applicable fiscal year.49
As a result, this rule’s applicability to
unobligated future PWs will ensure
FEMA and recipients can more
efficiently process unobligated PWs for
(for instance) COVID–19 declarations,
which continue to fund important
pandemic-related work, while avoiding
unnecessary confusion and
administrative burden by not affecting
47 In FEMA’s 2014 report, it noted that projects
under $400,000 made up 98 percent of projects.
Projects under $1,000,000 now make up 95 percent
of projects primarily due to extreme outlier projects.
In 2014, FEMA had only had one $1 billion project
ever, while it has had eight projects over $1 billion
since 2017, two of which are in the ∼$10 billion
range. These projects heavily skew the curve. The
reason for the very large projects may be related to
both the increase in very large disasters since 2014,
and FEMA’s current method of consolidating
projects. Stafford Act section 428, ‘‘Public
Assistance Program Alternative Procedures,’’ was
authorized by SRIA in 2013 and allows FEMA to
combine multiple projects into one project. (The PA
Program does not combine projects unless they are
428 projects; PA only combines sites when the
project is not a 428 project). Following the
introduction of section 428, FEMA has seen a
notable uptick in project costs under the 428
consolidated designation.
48 FEMA chose to limit the application of the new
threshold based on the date of obligation, rather
than the date of the disaster, because the date of
obligation is the point at which FEMA and the
recipient agree on the estimate.
49 See https://www.fema.gov/assistance/public/
applicants/per-capita-impact-indicator.

PO 00000

Frm 00032

Fmt 4700

Sfmt 4700

previous project size determinations.
FEMA notes that on March 1, 2022, the
President directed FEMA to continue
funding assistance for COVID–19
declarations at a 100 percent Federal
share through July 1, 2022.
3. Regulatory Analysis
A. Administrative Procedure Act
The Administrative Procedure Act
(APA) generally requires agencies to
publish a notice of proposed rulemaking
in the Federal Register and provide
interested persons the opportunity to
submit comments. See 5 U.S.C. 553(b)
and (c). The APA provides an exception
to this prior notice and comment
requirement for matters relating to
public property, loans, grants, benefits,
or contracts. 5 U.S.C. 553(a)(2). FEMA’s
PA program is a grant program through
which FEMA obligates funding to State,
local, Tribal, and territorial
governments, as well as eligible PNP
organizations, for debris removal,
emergency protective measures, and the
repair, replacement, or restoration of
disaster-damaged facilities after a
presidentially-declared major disaster.
Because this rule relates to FEMA’s
obligation of grant funding under the PA
program, it is exempt from notice and
comment rulemaking under the APA.
FEMA acknowledges its general
policy to provide for public
participation in rulemaking unless it
determines that circumstances warrant a
departure from that general policy.50
The circumstances presented here
warrant such a departure. First, FEMA
is still receiving and processing COVID–
19 PWs and will continue to fund them
at 100 percent Federal funding through
at least July 1, 2022. Taking prepromulgation comment on the rule
would delay application of the new
threshold and the more efficient
processing of unobligated PWs for
COVID–19 declarations, which continue
to fund important pandemic-related
work.
Second, the APA also provides an
exception to prior notice and comment
for rules of agency organization,
procedure, or practice. 5 U.S.C.
553(b)(A). In addition to falling under
the APA’s exception to notice and
comment for rules relating to grants, this
final rule is also a procedural rule,
promulgated for agency efficiency
purposes, because it is limited to
updating FEMA’s internal procedures
regarding the dollar figure at or below
which FEMA will obligate funding
based on an estimate of project costs,
and above which FEMA will obligate
50 44

CFR 1.3(a) and (c).

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

funding based on actual project costs.
When FEMA classifies a project as
‘‘small,’’ FEMA reviews the project to
ensure the work is eligible, and FEMA
forgoes the administrative burden of
validating all costs with respect to the
project. Not having to validate all costs
would reduce documentation
requirements for both FEMA and
recipients. Additionally, small project
classification allows recipients and
FEMA to forgo quarterly report
submission and review, respectively, as
well as undergo an abbreviated closeout
process that would not affect
substantive rights. This action does not
affect the substantive rights or
obligations of PA recipients, including
their eligibility to receive funding under
the PA program. Instead, FEMA is
updating the threshold in order to
classify more projects as ‘‘small’’ to
reduce burdens for both FEMA and the
recipient.
Lastly, section 422(b) of the Stafford
Act also contains a waiver of the APA,
allowing FEMA to establish the
threshold for eligibility ‘‘without regard
to [5 U.S.C. chapter 5].’’ FEMA
interprets 42 U.S.C. 5189(b)(2)’s APA
waiver to apply to future updates to the
threshold as a result of the three-year
review that 5189(b)(3) requires.
Specifically, subsection (b)(3) requires
FEMA to ‘‘review the threshold for
eligibility under this section’’ every
three years. It is possible to read the
phrase ‘‘under this section’’ as simply
clarifying that the threshold to which
the three-year review applies is the
threshold authorized under 42 U.S.C.
5189 with no further meaning attributed
to the words. However, this
interpretation ignores the context and
history of 42 U.S.C. 5189 and would
mean that the direction from Congress is
simply to review the threshold every
three years with no indication of what
Congress intended FEMA to do with the
results of the three-year review.51
Congress specifically directed FEMA in
subsection (b)(2)(B) to adjust the
threshold annually to reflect changes in
the Consumer Price Index for all Urban
Consumers published by the
Department of Labor. It stands to reason
that Congress would also provide
direction to FEMA regarding
adjustments to the base threshold as a
result of the three-year review, and yet
this interpretation would mean that
51 ‘‘The words of the statute must be read in their
context and with a view to their place in the overall
statutory scheme . . . A court must therefore
interpret the statute as a symmetrical and coherent
regulatory scheme, . . . and fit, if possible, all parts
into an harmonious whole.’’ FDA v. Brown &
Williamson Tobacco, 529 U.S. 120, 132–33 (2000).

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

Congress did not provide such
direction.
Legislative history suggests that
Congress intended that FEMA maintain
administrative efficiency in the PA
program with an adjustable threshold.52
The three-year review cycle coupled
with an APA waiver creates such
administrative efficiency. The phrase
‘‘threshold for eligibility’’ refers
generally to the simplified procedure
threshold and ‘‘under this section’’
refers to the review process established
under the section. Under that review
process, as established in subsection
(b)(2), FEMA completes an analysis of
the threshold, submits a report to
Congress regarding the analysis, and
then immediately establishes the new
threshold without regard to the APA.
In so interpreting the statute, FEMA
also relies on the fact that 42 U.S.C.
5189(b) is silent as to the expiration of
the APA waiver. Generally, if Congress
knows how to say something but
chooses not to, its silence is
controlling.53 42 U.S.C. 5189(b) contains
no restrictions typically found in other
APA waivers. There is an instructive
example of a time-limited APA waiver
within another section of the Stafford
Act. 42 U.S.C. 5174, which governs the
Individual Assistance program,
generally requires FEMA to promulgate
regulations to implement the program.54
However, as amended by the Disaster
Recovery Reform Act,55 it states that
FEMA may ‘‘waive notice and comment
rulemaking’’ to carry out new authority
for a state-managed housing program as
a pilot program if FEMA determined
that doing so was necessary for
expeditious implementation.56 This
APA waiver for the state-managed
housing program, however, was limited
to two years and since FEMA did not
publish final regulations within that
time frame, the waiver authority and
authority to conduct a pilot expired.57
As with other APA waivers, Congress in
42 U.S.C. 5174 provided a definitive
temporal limitation to its APA waiver
(and specified a consequence associated
with that limitation), whereas in 42
U.S.C. 5189 Congress provided none.
This further supports the conclusion
that Congress did not intend to limit the
52 See

H.R. REP. NO. 100–517 (1988), p. 11.
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).
54 42 U.S.C. 5174(j).
55 Public Law 115–254, div. D, Oct. 5, 2018, 132
Stat. 3438.
56 42 U.S.C. 5174(f)(3)(J)(i).
57 See 42 U.S.C. 5174(f)(3)(J)(ii)–(iii).
53 Animal

PO 00000

Frm 00033

Fmt 4700

Sfmt 4700

47363

APA waiver for establishing a simplified
procedures threshold.
Further, the APA generally requires
that substantive rules incorporate a 30day delayed effective date. 5 U.S.C.
553(d). Because this rule is a procedural
rule and is also otherwise exempt from
the APA’s notice and comment
requirement, FEMA finds that a delayed
effective date is unnecessary.
B. Executive Orders 12866, ‘‘Regulatory
Planning and Review’’ and 13563,
‘‘Improving Regulation and Regulatory
Review’’
Executive Orders 12866 (‘‘Regulatory
Planning and Review’’) and 13563
(‘‘Improving Regulation and Regulatory
Review’’) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility.
This final rule has been designated a
‘‘significant regulatory action’’ although
not economically significant, by the
Office of Management and Budget
(OMB) under section 3(f) of Executive
Order 12866. Accordingly, the rule has
been reviewed by OMB.
i. Need for Regulation
In accordance with Executive Orders
12866, 13563, and Office of
Management and Budget (OMB)
Circular A–4, an agency must identify
the problem that it intends to address
through regulatory action. The action
may be taken to address a statutory or
judicial directive, significant market
failure, or to meet some other
compelling public need. This final rule
responds to a statutory directive and
will improve the functioning of
government by changing the maximum
threshold to a level that improves
efficiency and reduces administrative
costs. Because PA is a Federal program,
regulation at the Federal level is
appropriate.
Section 1107 of the Sandy Recovery
Improvement Act of 2013 (SRIA) 58
amends section 422 of the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act 59 authorizing Simplified
Procedures for the PA program under
58 Public
59 42

Law 113–2, section 1107, 127 Stat. 46.
U.S.C. 5189.

E:\PICKUP\03AUR1.SGM

03AUR1

47364

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

sections 403, 406, 407, and 502.60 The
objective of Simplified Procedures is to
allow FEMA to quickly provide grant
funding for recovery while lowering the
administrative burden in cases where
the benefit of uncovering fraud or waste
is low. Every three years, after the initial
implementation of the thresholds, the
President, acting through the FEMA
Administrator, shall review the
threshold for Simplified Procedures
under the Stafford Act.61 Since the
authority and direction are present in
statute, updating the thresholds in line
with the statutory requirement is both
appropriate and necessary. Without this
update, moreover, both FEMA and
recipients will continue to not be able
to fully realize the benefits of Simplified
Procedures.

Since the adoption of Simplified
Procedures, the maximum threshold has
gradually shifted away from the initial
policy benchmarks. Congress set the
threshold at $35,000 in 1988, which
represented 95 percent of FEMA
projects and 32 percent of PA disaster
assistance funding.62 Despite past
adjustments to the maximum threshold
and increases for inflation, small
projects below the current threshold
account for fewer than 76.8 percent of
the total number of projects and 2.4
percent of funding due to the increasing
frequency and magnitude of major
weather and climate disasters.63 64 From
1990–1999, FEMA obligated on average
about $2.7 billion in PA funding for
disasters per year.65 From 2000–2009,
FEMA obligated on average about $5.8
billion in PA funding for disasters per

year.66 From 2010–2019, FEMA
obligated on average about $8.1 billion
in PA funding for disasters per year.67
Prior adjustments include yearly
adjustments to the maximum threshold
every fiscal year based on the CPI–U
and a thorough review by the program
every three years. FEMA is updating its
regulations, as required by section
422(b), based on the findings of the 2020
review.
ii. Affected Population
The final rule will affect all potential
applicants for Federal assistance under
the PA program. Eligible applicants for
PA include 56 State and territorial
governments, 573 Federally recognized
Indian Tribal governments, local
governments, and certain PNPs.
iii. Summary of Regulatory Changes

TABLE 1—SUMMARY OF CHANGES
Item

Current

Change

Impact

Maximum threshold for
Simplified Procedures.

$132,800 in FY 2021,
adjusted every fiscal
year using CPI–U.

$1,000,000 for unobligated PWs processed
on or after the effective date of the rule for
major disasters and emergencies declared
on or after March 13, 2020, adjusted every
fiscal year using CPI–U.

—The annual average benefit will be
$6,464,964. The total net 3-year benefit
discounted at 3 percent and 7 percent, respectively,
are
18,286,871
and
$16,966,108. The annualized benefit is
$6,464,964 and $6,464,964 at the 3 and 7
percent discount rates, respectively.
—The annual cost will be $10,454 for just the
first year. The total 3-year net cost discounted at 3 percent and 7 percent, respectively, are $10,150 and $9,770. The
annualized cost is $3,588 and $3,723 at
the 3 and 7 percent respective discount
rates.
—The total 3-year transfer payments from
FEMA to the recipients discounted at 3 and
7
percent
are
$40,803,651
and
$37,856,623, respectively. This estimated
transfer is $14,425,330 annualized.

iv. Methodology
This economic analysis adheres to the
guidelines in: Executive Order 12866,
‘‘Regulatory Planning and Review’’ and
amendments; Executive Order 13563,
‘‘Improving Regulation and Regulatory
Review;’’ and the Office of Management
and Budget’s (OMB) Circular A–4 on
Regulatory Analysis.
The methodology discussed below
pertains to the Regulatory Impact
Analysis (RIA) assessing the costs,
benefits, and transfers associated with
an increase of the PA small project
lotter on DSK11XQN23PROD with RULES1

60 42

U.S.C. 5170b, 5172, 5173, 5192.
U.S.C. 5189(b)(3).
62 See H.R. REP. NO. 100–517 (1988).
63 National Oceanic & Atmospheric
Administration (NOAA). (2021). 2020 U.S. billiondollar weather and climate disasters in historical
context. Adam B. Smith. https://www.climate.gov/
news-features/blogs/beyond-data/2020-us-billiondollar-weather-and-climate-disasters-historical.
61 42

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

maximum threshold to $1,000,000 for
major disasters and emergencies
declared on or after March 13, 2020, for
unobligated projects.68 The maximum
threshold will be implemented to
capture projects necessitated by the
COVID–19 pandemic.
The analysis to determine the
maximum threshold was completed
prior to this RIA and reported in the
2020 Review. The 2020 Review
evaluated multiple alternative
maximum thresholds and the benefits
and costs of each with regards to the PA

Program; a brief discussion of those
alternatives is included in this
document. This RIA aligns with the
2020 Review by evaluating the selected
threshold by using data from the same
databases to analyze the benefits, costs,
and transfers in similar ways. The two
analyses differ in their purposes, with
this RIA focusing specifically on the
$1,000,000 threshold and its impacts for
recipients, subrecipients, and FEMA.
The two analyses also look at different
periods. As explained further below,
this analysis focuses on declaration

64 U.S. Global Change Research Program
(USGCRP). (2018). Fourth National Climate
Assessment, Chapter 2: Our Changing Climate.
https://nca2018.globalchange.gov/chapter/2/.
65 Estimate based on data from FEMA’s EMMIE
Enterprise Data Warehouse, as of Dec. 10, 2021.
66 Id.
67 Id. FEMA analyzed the data for obligated PA
projects up to September 30, 2020. All amounts are

shown in 2020 dollars. Obligation of disaster
funding can occur after the disaster year.
68 For FY 2021, the maximum threshold for PA
is $132,800. While in 2020, it was $131,100. The
final rule will be implemented for major disasters
and emergencies declared on or after March 13,
2020, for unobligated projects.

PO 00000

Frm 00034

Fmt 4700

Sfmt 4700

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

69 The 2020 Review includes data with
declaration dates from August 25, 2017 through
November 8, 2021.
70 For more information on the National PA
Delivery Model, see the Public Assistance Delivery
Model Fact Sheet published on August 17, 2018,
available at https://www.fema.gov/sites/default/
files/2020-07/fema_pa_delivery-model_
factsheet.pdf (last accessed Feb. 1, 2022).

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

obtain 3.1 years of historical data. For
the purpose of this analysis, FEMA
estimated the benefits, costs, and
transfers for the next three years, since
the Stafford Act requires FEMA to
reevaluate the maximum threshold
every three years.
FEMA obtained additional data to
estimate wage rates from the Office of
Personnel Management (OPM) and
Bureau of Labor Statistics (BLS). All
wage rate data is in year 2020 dollars.
Burden hours associated with applying
for and processing small and large
projects were determined through
FEMA internal assessments at the
regional level where the average number
of hours involved to close out small and
large projects was calculated.
To estimate the impacts of this
regulation, FEMA assessed the number
of projects classified as small projects at
the current threshold (no action
baseline) and after the threshold is
raised to $1,000,000.
v. Assumptions
Project cost data in GM and
obligation/deobligation data in EMMIE
is reported in nominal dollars for their
respective year. Due to the projects
spanning multiple years from 2017
through 2020, the project cost data for
each project was adjusted to year 2020
dollars using the CPI–U. Their status as
either small or large was then assessed
using the thresholds in 2020 dollars
($132,800 and $1,000,000).
This analysis calculated the Present
Value (PV) of cost and transfer flows. PV
calculations permit comparisons of cost
and benefit streams that involve
different time paths. FEMA used the
following formula to calculate these
flows:

where ‘‘r’’ is the discount rate, and ‘‘t’’
is the number of years in the future that
the benefits or costs are expected to
occur. Per OMB Circular A–4, FEMA
used real discount rates of three percent
and seven percent to discount benefits
and costs measured in constant dollars.
Unlike typical market interest rates, real
rates exclude the expected rate of future
price inflation. These figures estimate
the value of future benefits and costs
adjusted for differences in their timing.
vi. Baseline
Following guidance in OMB Circular
A–4, FEMA assessed each impact of this
rule against a no action baseline. A no
action baseline is an assessment of the
way the world would look absent this
rule. For this analysis, the no action

PO 00000

Frm 00035

Fmt 4700

Sfmt 4700

baseline is a maximum threshold that
remains at $132,800, in 2020 dollars.
vii. Number of Projects and Total
Dollars
To search for potential alternative
thresholds, FEMA first analyzed the
current situation if no changes were
made to the maximum threshold for FY
2021 beyond the annual CPI–U
adjustment. FEMA looked at the number
of projects and total dollars by project
amount since the adoption of the PA
delivery model. Small projects, which
are projects with total project costs
below the $132,800 threshold, made up
76.8 percent, or 47,376, of the total
count of 61,710 projects. Large projects,
which are projects with a total project
cost at or above the threshold,
accounted for 23.2 percent, or 14,334 of
the total count of 61,710 projects. From
August 25, 2017 through FY 2020 (3.1
years), the funding of small projects was
$1.6 billion (2.4 percent) and $66.0
billion (97.6 percent) for large projects.
FEMA also looked at the number of
projects and total dollars over the same
time period had $1,000,000 been the
threshold. Small projects would have
accounted for 94.4 percent, or 58,234, of
the total count of 61,710 projects. Large
projects would have accounted for 5.6
percent, or 3,476, of the total count of
61,710 projects. The funding of small
projects would have been $5.7 billion
(8.4 percent) and $62.0 billion (91.6
percent) for large projects. This would
account for a difference of 10,858
projects classified as small under the
$1,000,000 threshold that were
classified as large under the $132,800
threshold (14,334¥3,476).
viii. Cost
FEMA estimates that there will be a
one-time familiarization cost of $10,454
associated from changing the maximum
threshold from $132,800 to $1,000,000
for unobligated future projects for major
disasters and emergencies declared on
or after March 13, 2020, as discussed
later in this analysis. The total 3-year
net cost rate discounted at 3 percent and
7 percent, respectively, are $10,150 and
$9,770. The annualized cost is $3,588
and $3,723 at the 3 and 7 percent
respective discount rates.
Small projects are subject to less
scrutiny than large projects and by
increasing the maximum threshold to
$1,000,000, a total of 10,858 more
projects would have been classified as
small projects that were classified as
large projects under the current
threshold of $132,800.
Under the $1,000,000 threshold, the
small projects will be subject to less
scrutiny compared to the no action

E:\PICKUP\03AUR1.SGM

03AUR1

ER03AU22.000

lotter on DSK11XQN23PROD with RULES1

dates between August 25, 2017, through
September 30, 2020.69
The primary data sources used for this
analysis were PA data from Grants
Manager (GM) and the Emergency
Management Mission Integrated
Environment (EMMIE). Data from GM
provided several characteristics about
the grants, including the number of
projects and each project’s cost. Data
from EMMIE provided additional
characteristics, including the obligation
and deobligation amounts associated
with each large project. FEMA formally
adopted the National PA Delivery
Model on August 25, 2017, and this is
also when FEMA started collecting data
using the GM database. Prior to the
implementation of GM, EMMIE was the
primary system of record for PA data.
The GM database tracks the PA
processes with more detail than EMMIE,
including dates for all application and
project process steps and tasks, as well
as other attributes of the damages. The
data from GM allows FEMA to perform
analysis on project timeliness and
accuracy using more detail. FEMA
continues to also use EMMIE, which
captures some data that GM does not,
including obligation amounts. For this
analysis, both GM and EMMIE data
were needed and used. Therefore, the
date that GM was adopted was selected
as the beginning of the project data
analyzed.70 This analysis includes
obligated project data for major disasters
declared on or after August 25, 2017,
through September 30, 2020. There are
1,132 days during this period. FEMA
took the total number of days during the
time of the analysis (1,132 days) and
divided it by the number of days per
year (365 days) to get the time span of
data, 3.1 years (1,132 days ÷ 365 days).
This provides a more accurate analysis
of project thresholds within the context
of the processes and procedures
implemented as part of the National PA
Delivery Model. It provides a better
understanding of how potential
adjustments to the threshold impact
stakeholders based on the way that PA
is currently implemented.
FEMA typically uses 10 years of
historical data, analyzes it, then
calculates a 10-year forward looking
estimate for benefit, cost, and transfers.
However, due to the data limitations
discussed above, FEMA was only able to

47365

47366

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

baseline. This could potentially increase
the risk of inaccurate reporting and
decrease the ability for FEMA to
identify and remedy noncompliance for
these projects. This risk already exists
for small projects, as recipients and
subrecipients are only required to
certify that they spent the money
appropriately according to FEMA’s
policy. Conversely, recipients and
subrecipients of large projects are
required to fill out additional paperwork
and provide proof to verify their
spending.
When a recipient or subrecipient
applies for PA funding, they would
complete the phases of the Public
Assistance delivery model.71 These
phases are 1. Operational planning, 2.
Impacts and eligibility, 3. Scoping and
costing, 4. Final review, 5. Obligation
and recovery transition, 6. Post-award
monitoring and amendments, and 7.
Final reconciliation and closeout. FEMA
does not perform a final inspection of
completed small projects; however, the
applicants must certify that the
subapplicants completed the work in
compliance with all applicable laws,
regulations, and policies.72
Noncompliance would occur if the
recipient or subrecipient did not
complete the work for a project that has
been obligated by FEMA based on the
Statement of Work (SOW). FEMA
assumes that it is rare for
noncompliance to occur since the
applicants must certify the work and
would be subject to penalties if they
certify the completion of work when
that information is inaccurate. For this
reason, FEMA assumes that the cost to
FEMA for noncompliance is minimal.
Data is not available to estimate how
common noncompliance occurs in small
projects. FEMA acknowledges this risk
exists, but is following the lead of
Congress that believes that having a
large dollar threshold for small projects
creates a more streamlined approach
that would ‘‘result in substantial savings
of time and money that . . . should
have a significant and beneficial impact
on FEMA’s overall program.’’ 73
71 FEMA. How to Apply for Public Assistance.
https://www.fema.gov/assistance/public/
apply#phases. Last accessed on Dec. 1, 2021.
72 See Stafford Act § 422 (42 U.S.C. 5189).
73 See H.R. REP. NO. 100–517 (1988), p. 11; see
also, e.g., OFFICE OF INSPECTOR GEN.,
ASSESSMENT OF FEMA’S PUBLIC ASSISTANCE
PROGRAM POLICIES AND PROCEDURES (2009),
available at http://www.oig.dhs.gov/assets/Mgmt/
OIG_10-26_Dec09.pdf (recommended increasing the
maximum threshold because of the administrative
efficiency and streamlined process for all parties);
U.S. GEN. ACCOUNTING OFFICE, DISASTER
ASSISTANCE: IMPROVEMENTS NEEDED IN
DETERMINING ELIGIBILITY FOR PUBLIC

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

A subrecipient may request additional
funding through the PA appeals process,
also known as the Net Small Project
Overrun (NSPO) process, if the cost
incurred for all of its small projects
exceeds the total amount requested by
the subrecipient for which FEMA has
already obligated for those projects.
Subrecipients do not have this option
for large projects. Increasing the
maximum threshold to $1,000,000
would result in more small projects,
which would mean that subrecipients
would have more opportunities to apply
for additional funds. Historically, only
0.05 percent of small projects have had
first appeal NSPOs and 0.003 percent
have had second appeal NSPOs.74
Raising the maximum threshold to
$1,000,000 would lead to 10,858 more
small projects over the 3.1 year period,
and approximately 5.8 additional
NSPOs (10,858 × (.05 percent in first
appeal NSPOs + 0.003 percent in second
appeal NSPOs)) over the time period, or
fewer than 2 annually (5.8 additional
NSPOs ÷ 3.1 years). These additional
NSPOs would require time from
subrecipients to apply and FEMA to
process. FEMA cannot estimate the
number of hours due to a lack of data
available on time estimates for NSPOs.
Familiarization Costs for Recipients
The increase of the maximum
threshold to $1,000,000 for unobligated
future project worksheets for major
disasters and emergencies declared on
or after March 13, 2020, will require
time for the recipients to familiarize
themselves with the changes made in
this final rule. The total cost for
familiarization would be $10,454 for the
first year. FEMA estimates recipients
would spend one hour to familiarize
themselves with this change. FEMA
assumes a State Government Chief
Executive, a senior level government
official, or equivalent occupation,
would read the existing and updated
regulations to understand the changes.75
ASSISTANCE (1996), available at http://
www.gao.gov/assets/160/155459.pdf (recommended
increasing the minimum threshold to increase
administrative efficiency); HOMELAND SEC.
STUDIES AND ANALYSIS INST., ANALYSIS OF
THE FEMA PUBLIC ASSISTANCE (PA) PROGRAM
(2011), available at http://assets.fiercemarkets.net/
public/sites/govit/fema_foia_perera_
bottomupreview.pdf (recommended increasing the
minimum threshold to increase administrative
efficiency).
74 Out of 137,913 total obligated small projects
since 2013, there were only 70 instances of first
appeal NSPOs (0.05 percent). Out of 627,656 total
obligated small projects since 1997, there were only
20 instances of second appeal NSPOs (0.003
percent).
75 Estimates for time and wage rates were taken
from the Factors Considered When Evaluating a

PO 00000

Frm 00036

Fmt 4700

Sfmt 4700

FEMA obtained the wage rate of $58.34
for a State Government Chief Executive
from BLS Occupational Employment
Statistics (OES) data.76 To account for
employee benefits, the fully-loaded
hourly mean wage rate for Chief
Executives is $93.34 ($58.34 hourly
mean wage for Chief Executives × 1.6
wage rate multiplier for State and local
government workers).77 FEMA used 56
States and territories in the estimate as
this is the level from which a PA
disaster declaration request is made.
FEMA assumes there would be at least
112 (56 States and territories × 2) Chief
Executives that review the changes, two
from each State and territories. FEMA
estimates it would cost $10,454 for
recipients to familiarize themselves
with the changes ($93.34 fully-loaded
hourly mean wage rate × 1 hour × 112
Chief Executives). This will be a onetime cost for the recipients in the first
year.
FEMA assumes the States and
territories regularly update their
emergency response networks and local
emergency management divisions on
changes in the field and the States and
territories will disseminate the
regulatory changes through each State’s
and territory’s respective process. FEMA
expects there to be no additional
implementation costs.
Summary of Costs
There is an unquantifiable risk of an
increase in noncompliance due to a
lower level of oversight on small
projects that are classified as large
projects under the no action baseline.
FEMA estimates that the cost
associated from changing the maximum
threshold from $132,800 to $1,000,000
for unobligated projectss for major
disasters and emergencies declared on
or after March 13, 2020, would be
$10,454. This cost is for familiarization
of the $1,000,000 maximum threshold
for these unobligated projects.
Governor’s Request for Individual Assistance for a
Major Disaster Final Rule, 84 FR 10632, 10649
(Mar. 21, 2019).
76 BLS OES, May 2020, State Government,
Standard Occupational Code 11–1011 for Chief
Executives, mean wage. https://www.bls.gov/oes/
2020/may/oes111011.htm. Last accessed on July 16,
2021.
77 Bureau of Labor Statistics. Employer Costs for
Employee Compensation, Table 1. ‘‘Employer costs
per employee compensation March 2020. Retrieved
from https://www.bls.gov/news.release/archives/
ecec_06182020.pdf. Accessed on October 19, 2021.
The wage multiplier is calculated by dividing total
compensation for State and local government
workers of $52.45 by Wages and salaries for State
and local government workers of $32.62 per hour
yielding a benefits multiplier of approximately 1.6.

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations
The following calculations are
estimates of costs for three years in the
future. The annual cost will be $10,454
for only the first year. The average cost

will be $3,485 ($10,454 ÷ 3) each year.
The discounted total net 3-year cost rate
at 3 percent and 7 percent, respectively,
are $10,150 and $9,770. The annualized

47367

cost is $3,588 and $3,723 at the 3 and
7 percent discount rates. (See Table 2).

TABLE 2—ESTIMATED COST OVER A 3-YEAR PERIOD
[2020$]
Year

Total cost

Annual cost
discounted at
3%

Annual cost
discounted at
7%

1 ...................................................................................................................................................
2 ...................................................................................................................................................
3 ...................................................................................................................................................

$10,454
0
0

$10,150
0
0

$9,770
0
0

Total ......................................................................................................................................

10,454

10,150

9,770

3,588

3,723

Annualized ...................................................................................................................................

ix. Benefits
FEMA identifies both qualitative and
quantitative benefits to support
increasing the maximum threshold.
Raising the maximum threshold to
$1,000,000 will reduce the
administrative burden and improve
program efficiency for recipients,
subrecipients, and FEMA. FEMA
considers these cost savings to be
benefits.
FEMA requires subrecipients to
restrict each PW to a conceptual and
logical grouping of eligible work at one
or more sites to minimize the number of
PWs necessary to provide assistance for
each subrecipient.78 Some subrecipients
currently try to avoid including too
many sites on a single PW in order to
stay below the maximum threshold.
Increasing the maximum threshold will
remove the need to adjust PWs in this
way for projects near the current
threshold, and lead to a higher total
dollar amount per PW and a smaller
number of PWs with more logically

grouped work. Since small projects are
generally less administratively
burdensome for FEMA, recipients, and
subrecipients, this rule will increase
administrative efficiencies because it
decreases the time it takes for staff to
manage and review grants.
Cost Savings to FEMA
Processing a small project takes less
time for FEMA to process than a large
project. If the maximum threshold was
$1,000,000, it would have resulted in a
$13,246,760 administrative cost savings
for FEMA, over a 3.1-year period.
The amount of time that FEMA
spends to close out a project varies
depending on whether it is classified as
a large or small project. Based on State
and FEMA regional offices’ input to a
National Emergency Management
Association (NEMA) report, on average,
each large project takes 24.8 hours and
each small project takes 4.9 hours to
close out, a difference of 19.9 hours
(24.8 hours ¥ 4.9 hours) per project.79
The average amount of time FEMA

spends to close out a large project is not
dependent upon the dollar amount
associated with the project. FEMA used
the average hourly wage of $41.99
(($34.76 GS 11 Step 5 + $41.66 GS 12
Step 5 + $49.54 GS 13 Step 5) ÷ 3) based
on OPM’s locality pay area of rest of
U.S. for 2020.80 FEMA calculated the
fully loaded hourly wage by multiplying
the average hourly wage by 1.46 for
civilian workers, resulting in $61.31
($41.99 × 1.46) per hour.81 FEMA
multiplied the time for large and small
projects by the fully loaded hourly
wage, resulting in $1,520.49 ($61.31 ×
24.8 hours) for the closing cost for large
projects and $300.42 ($61.31 × 4.9
hours) for the closing cost for small
projects. This results in the
administrative efficiencies between
large and small projects, with a
difference of ¥$1,220.07 ($300.42 ¥
$1,520.49). FEMA estimates that, on
average, it saves the agency $1,220 per
PW to process a small project over a
large project. (See Table 3).

TABLE 3—ESTIMATED TOTAL ADMINISTRATIVE COST TO FEMA
Large project

lotter on DSK11XQN23PROD with RULES1

Average amount of time it takes FEMA to close out each project .........................................................................
FEMA employee fully-loaded wage rate .................................................................................................................
Total Admin Cost for FEMA for each project ..................................................................................................

24.8 hours ......
$61.31 ............
$1,520 ............

Small project
4.8 hours.
$61.31.
$300.

Small projects have fewer
requirements for final reconciliation and
close out time compared to large

projects. By increasing the maximum
threshold, FEMA expects more projects
to be classified as small, therefore

reducing the time spent on completing
supplemental forms. If the maximum
threshold would have been $1,000,000,

78 See 44 CFR 206.201(k); FEMA Policy 104–009–
2, Public Assistance Program and Policy Guide, v.4,
pp. 60–63 (June 1, 2020), available at https://
www.fema.gov/sites/default/files/documents/fema_
pappg-v4-updated-links_policy_6-1-2020.pdf.
79 ‘‘Determination on the Public Assistance
Simplified Procedures Thresholds: Fiscal Year 2014
Report to Congress, Analysis Report for Sandy
Recovery Improvement Act of 2013’’ (Jan. 29, 2014),

page 26. Available at https://www.regulations.gov/
document/FEMA-2014-0009-0002.
80 Pay & Leave: Salaries & Wages for locality pay
area of rest of U.S. OPM. Available at https://
www.opm.gov/policy-data-oversight/pay-leave/
salaries-wages/salary-tables/20Tables/html/RUS_
h.aspx. Last accessed: May 6, 2021.
81 Bureau of Labor Statistics, Employer Costs for
Employee Compensation, Table 1. ‘‘Employer costs

for employee compensation: March 2020.’’
Available at https://www.bls.gov/news.release/
archives/ecec_06182020.pdf. Accessed November 2,
2021. The wage multiplier is calculated by dividing
total compensation for civilian workers of $37.73 by
Wages and salaries for civilian workers of $25.91
per hour yielding a benefits multiplier of
approximately 1.46.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

PO 00000

Frm 00037

Fmt 4700

Sfmt 4700

E:\PICKUP\03AUR1.SGM

03AUR1

47368

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

there would have been 10,858 projects
classified as small that are currently
classified as large.82 Increasing the
maximum threshold to $1,000,000 will
increase the number of small projects so

that it accounts for 94.4 percent of
FEMA PA projects. This will align with
the original threshold Congress set in
1988, where the number of small
projects represented 95 percent of

FEMA PA projects. The estimated cost
savings to FEMA is $13,246,760 ($1,220
× 10,858) for 3.1 years. (See Table 4).

TABLE 4—ESTIMATED TOTAL COST SAVINGS TO FEMA OVER 3.1 YEARS
[2020$]
$132,800
Threshold
Number of Small Projects at Each Threshold .........................................................................................................
Difference in the Number of Small Projects from the Current Threshold ...............................................................
Cost savings from Processing Each Small Project instead of a Large Project ......................................................
Estimated Total Cost Savings to FEMA 83 .......................................................................................................

58,234
10,858
$1,220
$13,246,760

Processing a small project takes less
time for recipients and subrecipients
compared to a large project because
small projects require fewer forms. If the
maximum threshold were $1,000,000, it
would have resulted in a $1,285,474
cost savings for recipients and
subrecipients over the 3.1-year period.
To estimate cost savings, FEMA used
BLS data for average hourly wage rates
for Emergency Management Directors
for State Governments, $34.97.84 To
account for benefits, FEMA multiplied
the wage rate by 1.6 for State and local
government workers to obtain a fully
loaded hourly wage of $55.95 ($34.97 ×
1.6). FEMA requires six supplemental
forms for large projects that are not
required for small projects.85 86 Based on
FEMA regional input, recipients with
projects over the maximum threshold
must fill out (1) FEMA Form 009–0–123:
Force Account Labor Summary Record,
(2) FEMA Form 009–0–124: Materials
Summary Record, (3) FEMA Form 009–
0–125: Rented Equipment Summary
Record, (4) FEMA Form 009–0–126:
Contract Work Summary Record, (5)
FEMA Form 009–0–127: Force Account
Equipment Summary Record, and (6)
FEMA Form 009–0–111: Quarterly
Progress Report.

The recipient or subrecipient must
submit FEMA Forms 009–0–123, 009–
0–124, 009–0–125, 009–0–126, and 009–
0–127 for each large project undertaken.
These five forms take a combined total
of 2 hours for each recipient or
subrecipient to complete.87
Additionally, each recipient must
submit FEMA Form 009–0–111 once
quarterly when it has at least one large
ongoing project. This form would
include all large projects for that
recipient. The form takes 100 hours to
fill out.
To estimate the cost savings for FEMA
Forms 009–0–123, 009–0–124, 009–0–
125, 009–0–126, and 009–0–127, FEMA
multiplied the total time required to
complete these forms by the fullyloaded wage rate for State and local
government Emergency Management
Directors. Recipients and subrecipients
would have a cost savings of $111.90 (2
hours × $55.95) per project for
recipients and subrecipients to process
a small project over a large project.
FEMA then multiplied the $112 cost
savings per project by the 10,858 large
projects that would have been a small
projects if the maximum threshold were
$1,000,000. FEMA estimated a total cost
savings of $1,216,096 ($112 × 10,858)
for recipients and subrecipients over the
3.1-year period for forms 009–0–123,
009–0–124, 009–0–125, 009–0–126, and

009–0–127. (See Table 5). Annually,
FEMA estimated the cost savings to be
$392,289 ($1,216,096 ÷ 3.1 years).
To estimate the cost savings for
recipients for FEMA Form 009–0–111,
FEMA multiplied the time required to
complete this quarterly form by the
fully-loaded wage rate for State and
Local government Emergency
Management Directors. Recipients
would have a cost savings of $5,595
($55.95 × 100 hours) per quarter. FEMA
then analyzed the data to determine
then number of recipients who would
not have at least one ongoing large
project if the maximum threshold were
$1,000,000 compared to those who
would at the $132,800 threshold. FEMA
assumed all recipients with at least one
ongoing project submitted FEMA Form
009–0–111 each quarter for the duration
of the 3.1-year period and the recipient
without an ongoing large project did not
submit this form. Over the 3.1-year
period, the number of recipients with at
least 1 ongoing project would reduce by
1, from 56 to 55.88 Annually, this cost
savings for recipients equates to $22,380
($5,595 × 4 quarters) and $69,378 over
the 3.1-year period ($22,380 × 3.1 year).
Annually, increasing the maximum
threshold from $132,800 to $1,000,000
would have a total cost savings for
recipients and subrecipients of $414,669
($392,289 + $22,380).

82 58,234 small projects would exist at the
$1,000,000 threshold and 47,376 small projects at
the actual threshold. The difference in the number
of small projects is 58,234¥47,376 = 10,858.
83 Estimated savings is calculated by taking the
number of small projects at each threshold and then
multiplying it by the increase in small projects from
the current threshold. $1,220 × 10,858 =
$13,246,760.
84 According to the U.S. Department of Labor,
Bureau of Labor Statistics, the May 2020
Occupational Employment and Wage Estimates
hourly mean wage rate for Emergency Management
Directors (Standard Occupational Classification 11–

9161) for State Government employees is $34.97.
https://www.bls.gov/oes/2020/may/oes119161.htm,
accessed November 23, 2021.
85 Public Assistance Program, Paperwork
Reduction Act Information Collection Supporting
Statement, OMB Control Number: 1660–0017,
available at: www.reginfo.gov/public/do/PRAView
Document?ref_nbr=201304-1660-001, see
Supporting Statement A.
86 Recipients or subrecipients with small projects
may fill out some of these five forms after the work
is complete if they are submitting paperwork to
request for funds for the actual cost(s).

87 Public Assistance Program, Paperwork
Reduction Act Information Collection Supporting
Statement, OMB Control Number: 1660–0017,
available at: www.reginfo.gov/public/do/PRAView
Document?ref_nbr=201304-1660-001, see
Supporting Statement A. According to the
Paperwork Reduction Act Information Collection
Supporting Statement, FEMA Form 009–0–123
takes 0.5 hours, 009–0–124 takes 0.25 hours, 009–
0–125 takes 0.5 hours, 009–0–126 takes 0.5 hours,
and 009–0–127 takes 0.25 hours to complete.
88 The recipient was the State of Wyoming and
the project cost was $142,489.

Cost Savings to Recipients and
Subrecipients

lotter on DSK11XQN23PROD with RULES1

47,376
........................
........................
$0

$1M Threshold

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

PO 00000

Frm 00038

Fmt 4700

Sfmt 4700

E:\PICKUP\03AUR1.SGM

03AUR1

47369

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations
TABLE 5—ESTIMATED TOTAL COST SAVINGS TO RECIPIENTS AND SUBRECIPIENTS OVER 3.1 YEARS
[2020$]
$132,800
Threshold

$1M Threshold

FEMA Forms 009–0–123, 009–0–124, 009–0–125, 009–0–126, and 009–0–127
Number of Large Projects at Each Threshold .........................................................................................................
Decrease in the Number of Large Projects from the Current Threshold ................................................................
Cost of Processing Each Large Project 89 ..............................................................................................................
Estimated Cost Savings for the Five Forms 90 ........................................................................................................

14,334
0
........................
$0

3,476
10,858
$112
$1,216,096

Number of Recipients with Ongoing Large Projects ...............................................................................................
Decrease in the Number of Recipients from the Current Threshold ......................................................................
Cost savings from Submitting Fewer Forms ...........................................................................................................
Estimated Cost Savings for FEMA Form 009–0–111 91 .........................................................................................

56
0
$0
$0

55
1
$69,378
$69,378

Estimated Total Cost Savings to Recipients and Subrecipients over 3.1 Years 92 .........................................

$0

$1,285,474

FEMA Form 009–0–111

Total Benefits at the $1M Threshold

TABLE 6—TOTAL BENEFITS AT THE $1M THRESHOLD OVER 3.1 YEARS
[2020$]
Administrative cost savings to FEMA

$1M Threshold

Decrease in the number of large projects PWs ..................................................................................................................................
Cost Savings from Processing Each Small Project over a Large Project ..........................................................................................
Estimated Total Cost savings to FEMA 93 ...........................................................................................................................................

10,858
$1,220
$13,246,760

Administrative Cost Savings to Recipient and Subrecipient
FEMA Forms 009–0–123, 009–0–124, 009–0–125, 009–0–126, and 009–0–127
Decrease in the number of large projects from the Current Threshold ..............................................................................................
Dollars per PW to recipients/subrecipients (reduction in forms) .........................................................................................................
Estimated Cost Savings for the Five Forms .......................................................................................................................................

10,858
$112
$1,216,096

FEMA Form 009–0–111
Decrease in the Number of Recipients from the Current Threshold ..................................................................................................
Cost savings from Submitting Fewer Forms .......................................................................................................................................
Estimated Cost Savings for FEMA Form 009–0–111 .........................................................................................................................
Estimated Total Cost Savings to Recipients and Subrecipients .........................................................................................................

1
$69,378
$69,378
$1,285,474

Total Administrative Cost Savings 94 ............................................................................................................................................

$14,532,234

lotter on DSK11XQN23PROD with RULES1

Project Consolidations
A recipient may decide to consolidate
its grant requests by combining eligible
work at one or more sites on a single
PW. Subrecipients have some discretion
in how they group eligible work across
PWs, and some currently try to avoid
including too much on a single PW in
order to stay below the maximum
threshold. They instead spread the work
across multiple PWs below the
threshold. With a $1,000,000 threshold,

projects under this threshold will be
considered small, giving recipients and
subrecipients greater flexibility in how
they use the funds they receive. With
small projects, recipients and
subrecipients can retain any excess
funds (as opposed to FEMA deobligating
these funds) and can use them to reduce
risk and improve future disaster
operations. If a recipient or subrecipient
were to exceed the threshold, it would
potentially serve as a deterrent to fully
consolidating eligible work on PWs, as

the benefits of Simplified Procedures
would then be lost. Raising the
maximum threshold to $1,000,000
removes the disincentive for
consolidating eligible work on PWs with
a total cost under that amount. This
reduces the total number of PWs to be
processed, thereby increasing the
administrative efficiency for recipients,
subrecipients, and FEMA. Since there is
no accurate way for FEMA to determine
how much eligible work could
potentially be consolidated on fewer

89 For forms 009–0–123, 009–0–124, 009–0–125,
009–0–126, and 009–0–127.
90 Estimated cost savings for the five forms =
Decrease in the number of large projects from the
current threshold × cost of processing each large
project. 10,858 × $112 = $1,216,096.

91 Estimated cost savings for FEMA Form 009–0–
111 = Decrease in the number of recipients from the
current threshold × cost savings from submitting
fewer forms. 1 × $69,378 = $69,378.
92 Estimated total cost savings to recipeients and
subrecipients = Estimated cost savings for the five

forms + estimated total cost savings for FEMA Form
009–0–111. $1,216,096 + $ 69,378 = $1,285,474.
93 Estimated total cost savings to FEMA =
Decrease in the number of large projects PWs × Cost
Savings from processing each small project over a
large project. 10,858 × $1,220 = $13,246,760.
94 $13,246,760 + $1,285,474 = $14,532,234.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

PO 00000

Frm 00039

Fmt 4700

Sfmt 4700

E:\PICKUP\03AUR1.SGM

03AUR1

47370

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

PWs, FEMA is not able to determine the
exact number of small project PWs that
will now no longer be submitted under
the increased threshold. However, with
a current average of 15,283 small
projects annually and up to an
additional 10,858 projects that will now
be small projects, FEMA assumes
additional consolidation will occur.95
Implementation Cost Savings for
Applicable Unobligated PWs
FEMA will implement the $1,000,000
maximum threshold for major disasters
and emergencies declared on or after
March 13, 2020, for projects that have
not been obligated as of the effective
date of this rule. FEMA conducted the
same analysis as above in the cost
savings to FEMA and cost savings to
recipients and subrecipients, but looked
only at the projects that were
unobligated at the time that FEMA
pulled the data from data management
systems.96 FEMA adjusted the project

cost data for these projects to year 2020
dollars using the CPI–U and their status
as either small or large assessed using
the thresholds in 2020 dollars ($132,800
and $1,000,000). This implementation
will be applicable for current
unobligated projects with a declaration
date between March 13, 2020 to
September 30, 2020.97 FEMA identified
projects in the database with a
declaration date between March 13,
2020 to September 30, 2020 then
focused on those projects that were
currently unobligated. Then FEMA
conducted two analyses: one looking at
the number of unobligated small
projects at $132,800 threshold, and the
other looking at the number of
unobligated small projects at the
$1,000,000 threshold. FEMA then
compared the differences in these
numbers at the two thresholds. At the
$132,800 threshold, there were 5,579
unobligated small projects. At the

$1,000,000 threshold, there would be
9,715 unobligated small projects. FEMA
estimates 4,136 (9,715¥5,579) out of the
10,877 total unobligated projects will be
classified as small that were formerly
classified as large when the maximum
threshold is adjusted to $1,000,000 for
unobligated projects going back to
March 13, 2020.
This will result in cost savings to
FEMA of $5,045,920 ($1,220 × 4,136)
and cost savings to recipients and
subrecipients of $463,232 ($112 × 4,136)
from FEMA Forms 009–0–123, 009–0–
124, 009–0–125, 009–0–126, and 009–0–
127. (See Table 7). The number of
recipients filling out FEMA Form 009–
0–111 will not be impacted because the
number of recipients with large projects
is not impacted when including the
unobligated projects. This
implementation will have a total cost
savings of $5,509,152 ($5,045,920 +
$463,232).

TABLE 7—ESTIMATED TOTAL COST SAVINGS FOR UNOBLIGATED PROJECTS WITH A DECLARATION DATE ON OR AFTER
MARCH 13, 2020
$132,800
Threshold
Number of Unobligated Small Projects at Each Threshold ....................................................................................
Difference in the Number of Unobligated Small Projects from FY 2020 Threshold ...............................................
Cost savings from Processing Each Unobligated Small Project instead of a Large Project for FEMA .................
Estimated Total Cost Savings to FEMA 98 ..............................................................................................................
Cost savings from Processing Each Unobligated Small Project instead of a Large Project for Recipients and
Subrecipients for FEMA Forms 009–0–123, 009–0–124, 009–0–125, 009–0–126, and 009–0–127 ................
Estimated Total Cost Savings to Recipients and Subrecipients 99 .........................................................................

5,579
........................
........................
$0

9,715
4,136
$1,220
$5,045,920

0
$0

$112
$463,232

Total Cost Savings ...........................................................................................................................................

$0

$5,509,152

Summary of Benefits Over a 3-Year
Period
Based on historical data, FEMA
estimates that the total benefit from
changing the maximum threshold from
$132,800 to $1,000,000 will be
$20,041,386 ($14,532,234 + $5,509,152)
over the period analyzed. These benefits

lotter on DSK11XQN23PROD with RULES1

$1M Threshold

95 The data include 47,376 small projects between
August 25, 2017 through September 30, 2020, or 3.1
years. 47,376 ÷ 3.1 = 15,283.
96 FEMA pulled the data on April 6, 2021, from
EMMIE and GM.
97 September 30, 2020 is the last date of FY 2020
and the last date used for this RIA analysis.
Obligation of disaster funding can occur after the
disaster year.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

are calculated from the 3.1 years of
historical data from GM.100
The following calculations are
estimates of benefits for three years in
the future based on the previous
section’s benefits estimates. These
figures include three-year total and
discounted annualized figures. FEMA
adjusts the 3.1-year period to 3 years to
arrive at a the total undiscounted

estimated benefit for three years of
$19,394,890.101
The average annual benefit will be
$6,464,964. The discounted total net 3year benefit rate at 3 percent and 7
percent, respectively, are $18,286,871
and $16,966,108. The annualized
benefit is $6,464,964 at both the 3 and
7 percent discount rates. (See Table 8).

98 Estimated savings is calculated by taking the
number of small projects at each threshold and then
multiplying it by the increase in small projects from
the FY 2020 threshold. $1,220 × 4,136 = $5,045,920.
99 Estimated savings is calculated by taking the
number of small projects at each threshold and then
multiplying it by the increase in small projects from
the FY 2020 threshold. $112 × 4,136 = $463,232.
100 GM began on August 25, 2017. FEMA used
data from August 25, 2017 to September 30, 2020

for this analysis. There are 1,132 days during this
period. FEMA took the total number of days during
the time of the analysis and divided it by the
average of number of days per year. 1,132 ÷ 365 =
3.1.
101 The total benefit amount over 3.1 years was
$20,041,386. To adjust this figure for only 3 years,
it was divided by 3.1 and then multiplied by 3.
(($20,041,386 ÷ 3.1) × 3) = $19,394,890.

PO 00000

Frm 00040

Fmt 4700

Sfmt 4700

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

47371

TABLE 8—ESTIMATED BENEFIT OVER A 3-YEAR PERIOD
[2020$]

Year

Total benefits

Annual
benefits
discounted at
3%

Annual
benefits
discounted at
7%

1 ...................................................................................................................................................
2 ...................................................................................................................................................
3 ...................................................................................................................................................

$6,464,964
6,464,964
6,464,964

$6,276,664
6,093,849
5,916,358

$6,042,022
5,646,750
5,277,336

Total ......................................................................................................................................
Annualized ...................................................................................................................................

........................
........................

18,286,871
6,464,964

16,966,108
6,464,964

x. Transfers
Transfer payments are monetary
payments from one group to another
that do not affect total resources
available to society. Transfers such as
Federal grants, insurance payments,
direct subsidies, and indirect subsidies
(e.g., cross-subsidies) can have
significant efficiency effects in addition
to distributional effects and are not
included in the estimates of the benefits
or costs of a regulation. The transfers
associated with this final rule are the
amount that is from a reduction in
deobligations of excess project funds.
Deobligation
When the cost estimates exceed actual
costs for small projects, FEMA does not
deobligate those funds from the
recipients or subrecipients; it is only for
large projects where excess funds are
deobligated. For projects which become
categorized as small under the increased
threshold, FEMA will no longer
deobligate those excess funds and the
funds will remain with the recipients
and subrecipients. By allowing
recipients and subrecipients to keep
these excess funds, the funds are still

providing a benefit to the public since
the funds are available given to
recipients (State, local, Tribal, and
territorial governments). FEMA does not
place any requirements on how the
excess funds are spent. FEMA cannot
quantify the exact benefit to the public
for these specific funds and recognizes
that either efficiency gains or losses
could occur once acquired by the
recipients and subrecipients. These
excess funds are a considered a transfer
payment from FEMA to recipients and
therefore would not affect the total
resources available to society.
FEMA analyzed the deobligation
amounts for large projects, adjusted to
year 2020 dollars, and compared them
using the current threshold of $132,800
and the increased threshold of
$1,000,000.102 Projects where the total
obligated amount was deobligated were
excluded from the analysis, as total
deobligation indicates that the project
was not conducted at all and the funds
would not have been awarded
regardless of project size. For large
projects, those above the current
threshold of $132,800, a total of
$543,871,441 has been deobligated in

the 3.1 years of projects analyzed. Using
a threshold of $1,000,000, $499,152,919
would still have been deobligated over
the same period, or a difference of
$44,718,521 (8.2 percent) less. This
difference accounts for 0.07 percent
($44,718,521 ÷ $67,659,994,342) of all
PA costs during the same period. When
the maximum threshold is changed from
$132,800 to $1,000,000, the amount of
deobligations decreases by $14,425,329
($44,718,521 ÷ 3.1 years) per year
amongst all 56 states and territories, or
$257,595 ($14,425,329 ÷ 56) in average
deobligations per State or territory per
year.
Table 10 below shows the deobligated
values and the amount that was
deobligated for large projects at the
$132,800 threshold compared to the
amount that would have been
deobligated for large projects using a
$1,000,000 threshold. The resulting
difference is the amount of
deobligations that would not have been
recouped by FEMA for projects
considered large at the $132,800
threshold but small at a $1,000,000
threshold over the period analyzed.

TABLE 9—DEOBLIGATIONS AT EACH THRESHOLD OVER 3.1 YEARS
[2020$]
$132,800
Threshold

lotter on DSK11XQN23PROD with RULES1

Deobligation Amount ...........................................................................................................................................
Difference From $132,800 Threshold ..................................................................................................................

$543,871,441
0

102 Obligation and deobligation amounts for
projects are available in the Emmie database. The
dollar amounts were adjusted for inflation to year
2020 dollars to be accurately compared against the
$132,800 and $1M thresholds, which are year 2020
dollars.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

PO 00000

Frm 00041

Fmt 4700

Sfmt 4700

E:\PICKUP\03AUR1.SGM

03AUR1

$1M Threshold
$499,152,919
¥$44,718,521

47372

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

Estimated Transfers Over a 3-Year
Period
The figures in the previous section are
estimates of 3.1 years of historical
deobligations compared at the two
thresholds.103 The following
calculations are estimates of transfers

for three years in the future based on the
deobligation estimates found in the
previous section. These figures include
three-year total and discounted
annualized figures. The total
undiscounted estimated transfers for
three years is $43,275,988.104 The
average annual undiscounted transfers

from FEMA to recipients and
subrecipients is $14,425,329.105 The
discounted total net 3-year transfer rate
at 3 and 7 percent, respectively, are
$40,803,651 and $37,856,623.
Annualized transfers are $14,425,330
and $14,425,329, respectively.

TABLE 10—ESTIMATED TRANSFERS OVER A 3-YEAR PERIOD
[2020$]
Transfers
from FEMA
to recipient

Year

Annual
transfers
discounted at
7%

1 .......................................................................................................................
2 .......................................................................................................................
3 .......................................................................................................................

$14,425,329
14,425,329
14,425,329

$14,425,329
14,425,329
14,425,329

$14,005,174
13,597,257
13,201,220

$13,481,616
12,599,641
11,775,366

Total 106 .....................................................................................................
Annualized .......................................................................................................

43,275,988
........................

43,275,988
........................

40,803,651
14,425,330

37,856,623
14,425,329

xi. Impacts
FEMA will increase the large project
maximum threshold pursuant to the
SRIA. The subject of this RIA is an
increase from the current maximum
threshold for Simplified Procedures to
$1,000,000 for major disasters and
emergencies declared on or after March
13, 2020, for unobligated projects. This
will impact current unobligated
projects. It will then continue to be
adjusted each fiscal year for inflation
using the CPI–U and reevaluated again
three years after implementation.107
Despite past adjustments to the
maximum threshold, it has gradually
shifted away from the initial policy
benchmarks. Congress set the threshold
at $35,000 in 1988, which represented
95 percent of FEMA projects and 32
percent of PA disaster assistance
funding. Prior adjustments include
yearly adjustments to the maximum
threshold every fiscal year based on the
CPI–U and a thorough review by the

program every three years. With the
$132,800 threshold in place, small
projects account for 77 percent of all
projects and 2.4 percent of funding due
to the increasing frequency and
magnitude of major disasters due to the
increase in the number of weather and
climate disasters. Those involved with
the PA process are impacted by this
rule, including State, local, Tribal, and
territorial governments, and certain
private non-profit organizations.
Raising the maximum threshold for
Simplified Procedures to $1,000,000,
thereby increasing the number of small
projects, will help speed closure of both
projects and funding for disaster
recovery, which will decrease the
administrative burden of a disaster, help
speed disaster recovery, and reduce the
associated length of ongoing
government oversight and associated
costs. FEMA estimates the average
annual benefit of this rule will be
$6,464,964. The discounted total 3-year

Category
Benefits:
Annualized Monetized benefits ..............................................................
Annualized quantified, but unmonetized benefits ..................................
Qualitative (unquantified) benefits ..........................................................
Costs:
Annualized monetized costs ..................................................................
Annualized quantified, but unmonetized, costs .....................................

lotter on DSK11XQN23PROD with RULES1

Annual
transfers
discounted at
3%

Total
transfers

103 GM began on August 25, 2017. FEMA used
data from August 25, 2017 to September 30, 2020
for this analysis. There are 1,132 days during this
time period. FEMA took the total number of days
during the time of the analysis and divided it by
the average of number of days per year. 1,132 ÷ 365
= 3.1.

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

Frm 00042

Fmt 4700

Source citation
(RIA, preamble, etc.)

3% Discount rate

7% Discount rate

$6,464,964
N/A
..............................

$6,464,964
N/A
..............................

RIA.
N/A.
N/A.

$3,588
N/A

$3,723
N/A

RIA.
N/A.

104 The total deobligation amount over 3.1 years
was $44,718,521. To adjust this figure for only 3
years, it was first divided by 3.1 and then
multiplied by 3. (($44,718,521 ÷ 3.1) × 3) =
$43,275,988.
105 $43,275,988 ÷ 3 = $14,425,329.

PO 00000

benefit at 3 percent and 7 percent
discount rates, respectively, are
$18,286,871 and $16,966,108. The
annualized benefit is $6,464,964 and
$6,464,964 at both the 3 and 7 percent
discount rates.
There will be a cost of $10,454 for the
first year for recipients to familiarize
themselves with the changes. The total
3-year total cost discounted at 3 percent
and 7 percent, respectively, are $10,150
and $9,770. The annualized cost is
$3,588 and $3,723 at the 3 and 7 percent
respective discount rates.
Increasing the maximum threshold
leads to FEMA failing to recoup some
over-obligated funds. These funds
instead remain with grant recipients,
which are State, local, Tribal or
territorial governments, and certain
private non-profit organizations. This
estimated transfer from FEMA to the
recipients and subrecipients is
$14,425,330 annualized.

Sfmt 4700

106 Figures

may not total due to rounding.
publishes the annual adjustments to the
maximum threshold on its website. See https://
www.fema.gov/assistance/public/applicants/percapita-impact-indicator.
107 FEMA

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations
Category

3% Discount rate

Qualitative (unquantified) costs ..............................................................

Projects which would fall below the
maximum threshold once the regulation goes into effect would be subjected to less scrutiny, which could
potentially increase the risk of inaccurate reporting and decrease the
ability for FEMA to identify and remedy noncompliance. While this risk
exists, it is unclear how common
noncompliance would be among
these projects

Transfers:
Annualized monetized transfers: ‘‘on-budget’’ .......................................
from whom to whom? .............................................................................

$14,425,330

$14,425,329

I

Source citation
(RIA, preamble, etc.)
RIA.

RIA.

From FEMA to grant recipients

Annualized monetized transfers: ‘‘off-budget’’ .......................................

N/A

from whom to whom? .............................................................................

N/A

I

N/A

N/A.
N/A.

Category

Effects

Effects on State, local, and/or tribal governments ........................................

Eligible applicants for PA include 56
State and territorial governments and
573 Federally recognized Indian Tribal governments, as well as local governments, and certain private nonprofits (PNPs). Eligible applicants
with projects below the $1M threshold would not incur the costs associated with large projects

RIA.

Effects on small businesses ..........................................................................

Small PNPs that are eligible for PA
funds, will be able to access funding
at a lower administrative cost if it is
under the maximum threshold

N/A.

Effects on wages ...........................................................................................

None

None.

Effects on growth ...........................................................................................

None

None.

xii. Uncertainty Analysis

lotter on DSK11XQN23PROD with RULES1

7% Discount rate

I

The findings, results, and conclusions
of this analysis could change if the
assumptions used in the primary
analysis were to change. FEMA cannot
accurately forecast disasters due to their
unpredictability, including how many
disasters will occur or the magnitude of
future disasters. Therefore, the estimates
of this analysis are sensitive to future
disaster declarations, which are
uncertain.
High-cost climate disasters have been
growing in frequency over the last few
decades. From 1980–1989, there were
29 disasters and the average annual cost
of damages was $17.8B. From 1990–
1999, there were 53 disasters and the
average annual cost of damages was
$27.4B, with FEMA obligating on
average about $2.7 billion in PA funding
for these disasters per year. From 2000–
2009, there were 62 disasters and the
average annual cost of damages was
$51.9B, with FEMA obligating on

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

average about $5.8 billion in PA funding
for these disasters per year. From 2010–
2019, there were 119 disasters and the
average annual cost of damages was
$81.10B, with FEMA obligating on
average about $8.1 billion in PA funding
for these disasters per year.108 109 The
number and cost of weather and climate
disasters are increasing in the United
States due to a combination of an
increase in assets being exposed to risk,
the level of damage a hazard of given
intensity causes at a location, and the
fact that climate change is increasing the
frequency of some types of extreme

108 National Oceanic & Atmospheric
Administration (NOAA). (2021). 2020 U.S. billiondollar weather and climate disasters in historical
context. Adam B. Smith. https://www.climate.gov/
news-features/blogs/beyond-data/2020-us-billiondollar-weather-and-climate-disasters-historical.
109 FEMA analyzed the data for obligated PA
projects up to September 30, 2020. Obligation of
disaster funding can occur after the disaster year.

PO 00000

Frm 00043

Fmt 4700

47373

Sfmt 4700

Source Citation (RIA,
preamble, etc.)

weather events that lead to high-cost
disasters.110
xiii. Alternatives Considered
FEMA has evaluated several
alternative regulatory approaches within
FEMA’s statutory discretion for
implementing the final rule in
accordance with Section 6(a)(3)(c) of
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ and the formal
principles of OMB’s Circular A–4.
Alternative approaches include different
implementation methods for the final
rule.
The alternatives for this final rule
would be to leave the maximum
threshold unchanged or increase it to a
different maximum.
FEMA considered four alternatives for
this final rule. FEMA considered:
110 U.S. Global Change Research Program
(USGCRP). (2018). Fourth National Climate
Assessment, Chapter 2: Our Changing Climate.
https://nca2018.globalchange.gov/chapter/2/.

E:\PICKUP\03AUR1.SGM

03AUR1

47374

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

• Leaving the maximum threshold
unchanged at $132,800 for FY 2021;
• Increasing the maximum threshold
to $250,000 for FY 2021;
• Increasing the maximum threshold
to $500,000 for FY 2021; and
• Increasing the maximum threshold
to $750,000 for FY 2021.
Annual inflation adjustments will
continue each fiscal year pursuant to
SRIA.
Current Threshold
If FEMA did not increase the
maximum threshold, no regulatory or
other program changes would be
required. The current threshold would
still achieve the goal of capturing a
majority of the small PA projects at 76.8
percent; however, it would be a smaller
percentage than the original goal in
1988 of 95 percent.111 The funding for
small projects accounts for 2.4 percent
of the total funding of PA projects at the
current threshold. There would be
14,334 large projects and 47,376 small
projects.
$250,000 Threshold
If FEMA were to increase the
maximum threshold to $250,000 for FY
2021, it would require regulatory
changes. This would increase the
percentage of small PA projects to 83.9
percent; however, it would be a smaller
percentage than the original goal in
1988 of 95 percent. The funding for
small projects would account for 3.6
percent of the total funding of PA
projects. The number of large projects

over the 3.1-year period of analysis
would decrease from a current 14,334 to
9,960, or a decrease of 4,374
(14,334¥9,960), which is approximately
a 30.5 ((14,334¥9,960) ÷ 14,334)
percent decrease from the current
threshold. The number of recipients
with at least 1 ongoing large project
would reduce by 1, from 56 to 55. The
4,374 decrease in the number of large
projects would have an estimated cost
savings of $5,336,280 (4,374 × $1,220)
for FEMA. The decrease in number of
projects and 1 fewer recipient would
have an estimated cost savings of
$559,266 ((4,374 × $112) + ($5,595 × 4
quarters × 3.1 years)) for recipients and
subrecipients.
$500,000 Threshold
If FEMA were to increase the
maximum threshold to $500,000 for FY
2021, it would require regulatory
changes. This would increase the
percentage of small PA projects to 90.0
percent; however, it would be a smaller
percentage than the original goal in
1988 of 95 percent. The funding for
small projects would account for 5.6
percent of the total funding of PA
projects. The number of large projects
over the 3.1-year period of analysis
would decrease from 14,334 to 6,156, or
a decrease of 8,178 (14,334¥6,156),
which is approximately a 57.1
((14,334¥6,156) ÷ 14,334) percent
decrease from the current threshold.
The number of recipients with at least
1 ongoing large project would reduce by

1, from 56 to 55. The 8,178 decrease in
the number of large projects would have
an estimated cost savings of $9,977,160
(8,178 × $1,220) for FEMA. The decrease
in number of projects and 1 fewer
recipient would and an estimated cost
savings of $985,314 ((8,178 × $112) +
($5,595 × 4 quarters × 3.1 years)) for
recipients and subrecipients.
$750,000 Threshold
If FEMA were to increase the
maximum threshold to $750,000 for FY
2021, it would require regulatory
changes. This would increase the
percentage of small PA projects to 92.8
percent; however, it would be a smaller
percentage than the original goal in
1988 of 95 percent. The funding for
small projects would account for 7.1
percent of the total funding of PA
projects. The number of large projects
over the 3.1-period of analysis would
decrease from 14,334 to 4,469, or a
decrease of 9,865 (14,334¥4,469),
which is approximately a 68.8
((14,334¥4,469) ÷ 14,334) percent
decrease from the current threshold.
The number of recipients with at least
1 ongoing large project would reduce by
1, from 56 to 55. The 9,865 decrease in
the number of large projects would have
an estimated cost savings of $12,035,300
(9,865 × $1,220) for FEMA. The decrease
in number of projects and 1 fewer
recipient would have an estimated cost
savings of $1,174,258 ((9,865 × $112) +
($5,595 × 4 quarters × 3.1 years)) for
recipients and subrecipients.

TABLE 11—PA PROJECTS AND AGGREGATE PROJECT AMOUNTS SINCE THE ADOPTION OF THE PA DELIVERY MODEL (3.1YEAR PERIOD). ADJUSTED FOR EACH ALTERNATIVE THRESHOLDS
$250K Threshold
Number of Small Projects ........................................................
Percentage of Small Projects to Total Projects ......................
Number of Large Projects .......................................................
Percentage of Large Projects to Total Projects ......................
Total Small Project Funding ....................................................
Percentage of Small Project Funding to Total Project Funding .........................................................................................
Total Large Project Funding ....................................................
Percentage of Large Project Funding to Total Project Funding .........................................................................................

$500K Threshold

$750K Threshold

$1M Threshold

51,750
83.9%
9,960
16.1%
$2,432,028,984

55,554
90.0%
6,156
10.0%
$3,777,518,663

57,241
92.8%
4,469
7.2%
$4,812,471,896

58,234
94.4%
3,476
5.6%
$5,670,643,149

3.6%
$65,227,965,358

5.6%
$63,882,475,679

7.1%
$62,847,522,446

8.4%
$61,989,351,193

96.4%

94.4%

92.9%

91.6%

TABLE 12—COST SAVINGS FOR MAXIMUM THRESHOLDS ALTERNATIVES
$250K
Threshold

lotter on DSK11XQN23PROD with RULES1

Admin cost savings to FEMA
Increases in the number of small projects PWs ..............................................
Cost Savings from Processing Each Small Project over a Large Project ......
Estimated Total Cost savings to FEMA ...........................................................

111 The Disaster Relief and Emergency Assistance
Amendment of 1988 introduced the Simplified
Procedures maximum threshold to reduce

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

4,374
$1,220
$5,336,280

administrative expenses and time associated with a
Federal disaster grant. Congress initially selected
$35,000 as the threshold because ‘‘damage survey

PO 00000

Frm 00044

Fmt 4700

Sfmt 4700

$500K
Threshold
8,178
$1,220
$9,977,160

$750K
Threshold
9,865
$1,220
$12,035,300

$1M Threshold
10,858
$1,220
$13,246,760

reports of less than $35,000 have constituted 95
percent of all damage survey reports but only 32
percent of all expended dollars.’’

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

47375

TABLE 12—COST SAVINGS FOR MAXIMUM THRESHOLDS ALTERNATIVES—Continued
Admin cost savings to FEMA

$250K
Threshold

$500K
Threshold

$750K
Threshold

$1M Threshold

Admin Cost Savings to Recipient and Subrecipient

........................

........................

........................

........................

8,178
$112
$915,936

9,865
$112
$1,104,880

10,858
$112
$1,216,096

FEMA Forms 009–0–123, 009–0–124, 009–0–125, 009–0–126, and 009–0–127
Decrease in the number of large projects PWs ..............................................
Dollars per PW to recipients/subrecipients (reduction in forms) .....................
Estimated Cost Savings for the Five Forms ....................................................

4,374
$112
$489,888

FEMA Form 009–0–111
Decrease in the Number of Recipients from the Current Threshold ..............
Cost savings from Submitting Fewer Forms ...................................................
Estimated Cost Savings for FEMA Form 009–0–111 .....................................
Estimated Total Cost Savings to Recipients and Subrecipients .....................

1
$69,378
$69,378
$559,266

1
$69,378
$69,378
$985,314

1
$69,378
$69,378
$1,174,258

1
$69,378
$69,378
$1,285,474

Total Administrative Cost Savings ............................................................

$5,895,546

$10,962,474

$13,209,558

$14,532,234

After analyzing the five potential
thresholds, FEMA selected a threshold
of $1,000,000 because it would bring
Simplified Procedures closest to the
initial policy benchmarks, raising the
percentage of small projects from 77
percent back to 94.4 percent and raising
the percentage of PA disaster funding
for small projects from 2.4 percent to 8.4
percent.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601–612), and section 213(a) of
the Small Business Regulatory
Enforcement Fairness Act of 1996,
Public Law 104–121, 110 Stat. 847, 858–
59 (Mar. 29, 1996) (5 U.S.C. 601 note)
require that special consideration be
given to the effects of regulations on
small entities. The RFA applies only
when an agency is ‘‘required by section
553 . . . to publish general notice of
proposed rulemaking for any proposed
rule.’’ 5 U.S.C. 603(a). An RFA analysis
is not required for this rulemaking
because FEMA is not required to
publish a notice of proposed
rulemaking.

lotter on DSK11XQN23PROD with RULES1

D. Unfunded Mandates Reform Act of
1995
The Unfunded Mandates Reform Act
of 1995, 2 U.S.C. 658, 1501–1504, 1531–
1536, 1571, pertains to any rulemaking
which is likely to result in the
promulgation of any rule that includes
a Federal mandate that may result in the
expenditure by State, local, and Tribal
governments, in the aggregate, or by the
private sector, of $100 million (adjusted
annually for inflation) or more in any
one year. If the rulemaking includes
such a Federal mandate, the Act
requires an agency to prepare an
assessment of the anticipated costs and
benefits of the Federal mandate. The Act

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

also pertains to any regulatory
requirements that might significantly or
uniquely affect small governments.
Before establishing any such
requirements, an agency must develop a
plan allowing for input from the
affected governments regarding the
requirements.
FEMA has determined that this
rulemaking will not result in the
expenditure by State, local, and Tribal
governments, in the aggregate, nor by
the private sector, of $100,000,000 or
more in any one year as a result of a
Federal mandate, and it will not
significantly or uniquely affect small
governments. In addition, this
rulemaking falls under an exclusion to
this Act for rules that provide for
emergency assistance or relief at the
request of any State, local, or Tribal
government. See 2 U.S.C. 1503(4).
Therefore, no actions are deemed
necessary under the provisions of the
Unfunded Mandates Reform Act of
1995.
E. Paperwork Reduction Act of 1995
Under the Paperwork Reduction Act
of 1995 (PRA), as amended, 44 U.S.C.
3501–3520, an agency may not conduct
or sponsor, and a person is not required
to respond to, a collection of
information unless the agency obtains
approval from the Office of Management
and Budget (OMB) for the collection and
the collection displays a valid OMB
control number. See 44 U.S.C. 3506,
3507.
In this rule, FEMA is seeking a
revision to the already existing
collection of information, OMB Control
Number 1660–0017. This rule revises
FEMA’s regulations governing the
Public Assistance program at 44 CFR
206.203(c) to increase the monetary
threshold for when FEMA will process

PO 00000

Frm 00045

Fmt 4700

Sfmt 4700

an application using ‘‘simplified
procedures’’ to $1,000,000. For this
information collection, the number of
annual responses is decreasing from
449,084 to 431,720, the annual burden
hours are decreasing from 491,533 to
484,189, and the annual cost to
respondents is decreasing from
$27,845,344 to $27,090,374. These
changes are due to a decrease in the
number of responses for FEMA Forms
009–0–123, 009–0–124, 009–0–125,
009–0–126, and 009–0–127 and for the
number of respondents for FEMA Form
009–0–111. FEMA requires that
recipients of large projects fill out these
supplemental forms to account for the
actual costs for reconciliation purposes.
These forms are not required for small
projects. The decrease in the number of
large projects as a result of the increase
in the large project threshold means
fewer applicants submitting these forms.
Collection of Information
Title: PA Program.
Type of information collection:
Revision of a currently approved
collection.
OMB Number: 1660–0017.
Forms: FEMA Form 009–0–49
Request for Public Assistance; FEMA
Form 009–0–91 Project Worksheet (PW);
FEMA Form 009–0–91A Project
Worksheet (PW)—Damage Description
and Scope of Work Continuation Sheet;
FEMA Form 009–0–91B Project
Worksheet (PW)—Cost Estimate
Continuation Sheet; FEMA Form 009–
0–91C Project Worksheet (PW)—Maps
and Sketches Sheet; FEMA Form 009–
0–91D Project Worksheet (PW)—Photo
Sheet; FEMA Form 009–0–120 Special
Considerations Questions; FEMA Form
009–0–121 PNP Facility Questionnaire;
FEMA Form 009–0–123 Force Account
Labor Summary Record; FEMA Form
009–0–124 Materials Summary Record;

E:\PICKUP\03AUR1.SGM

03AUR1

47376

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

FEMA Form 009–0–125 Rented
Equipment Summary Record; FEMA
Form 009–0–126 Contract Work
Summary Record; FEMA Form 009–0–
127 Force Account Equipment
Summary Record; FEMA Form 009–0–
128 Applicant’s Benefits Calculation
Worksheet; FEMA Form 009–0–111,
Quarterly Progress Report; FEMA Form
009–0–141, FAC–TRAX System.

Abstract: The information collected is
utilized by FEMA to make
determinations for PA grants based on
the information supplied by the
respondents.
Affected Public: State, local, or Tribal
Government.
Estimated Number of Respondents:
1,067.

Estimated Number of Responses:
431,720.
Estimated Total Annual Burden
Hours: 484,189.
The table below provides estimates of
annualized cost to respondents for the
hour burdens for the collection of
information.

TABLE 13—ESTIMATED ANNUALIZED BURDEN HOURS AND COSTS
Number of
respondents

Number of
responses
per
respondent

Total
number of
responses

Avg.
burden per
response
(in hours)

Total
annual
burden
(in hours)

Avg.
hourly
wage rate

Total
annual
respondent
cost

Type of respondent

Form name/form No.

State, Local or Tribal Government.
State, Local or Tribal Government.

FEMA Form 009–0–49, Request for PA

56

129

7,224

0.25

1,806

$55.95

$101,046

FEMA Form 009–0–91, Project Worksheet (PW) and a Request for Time
Extension.
FEMA Form 009–0–91A Project Work
Sheet (PW) Damage Description and
Scope of Work.
FEMA Form 009–0–91B, Project Worksheet (PW) Cost Estimate Continuation Sheet and Request for additional funding for Cost Overruns.
FEMA Form 009–0–91C Project Worksheet (PW) Maps and Sketches
Sheet.
FEMA Form 009–0–91D Project Worksheet (PW) Photo Sheet.
FEMA Form 009–0–120, Special Considerations Questions/.
FEMA Form 009–0–128, Applicant’s
Benefits Calculation Worksheet/.
FEMA Form 009–0–121, PNP Facility
Questionnaire.
FEMA Form 009–0–123, Force Account Labor Summary Record 112.
FEMA Form 009–0–124, Materials
Summary Record/.
FEMA Form 009–0–125, Rented
Equipment Summary Record.
FEMA Form 009–0–126, Contract
Work Summary Record/.
FEMA Form 009–0–127, Force Account Equipment Summary Record/.
State Administrative Plan and State
Plan Amendments/No Form.
FEMA Form 009–0–111, Quarterly
Progress Report.
Request for Appeals or Arbitrations &
Recommendation/No Forms.
Request for Arbitration & Recommendation resulting from Hurricanes Katrina or Rita/No Form.
FEMA Form 009–0–141, FAC–TRAX
System.
FEMA Template 104–FY–21–100 Equitable COVID–19 Response and Recovery.

56

840

47,040

1.5

70,560

55.95

3,947,832

56

784

43,904

1.5

65,856

55.95

3,684,643

56

784

43,904

1.3333

58,537

55.95

3,275,145

56

728

40,768

1.5

61,152

55.95

3,421,454

56

728

40,768

1.5

61,152

55.95

3,421,454

56

840

47,040

0.5

23,520

55.95

1,315,944

56

784

43,904

0.5

21,952

55.95

1,228,214

56

94

5,264

0.5

2,632

55.95

147,260

56

32

1,792

0.5

896

55.95

50,131

56

32

1,792

0.25

448

55.95

25,066

56

32

1,792

0.5

896

55.95

50,131

56

32

1,792

0.5

896

55.95

50,131

56

32

1,792

0.25

448

55.95

25,066

56

1

56

8

448

55.95

25,066

55

4

220

100

22,000

55.95

1,230,900

56

9

504

3

1,512

55.95

84,596

4

5

20

3

60

55.95

3,357

56

913

51,128

1.25

63,910

55.95

3,575,765

56

911

51,016

0.5

25,508

55.95

1,427,173

1,067

....................

431,720

....................

484,189

....................

27,090,374

State, Local or Tribal Government.
State, Local or Tribal Government.

State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
State, Local or Tribal Government.
Total ...............

...............................................................

lotter on DSK11XQN23PROD with RULES1

Note: The ‘‘Avg. Hourly Wage Rate’’ for each respondent includes a 1.6 multiplier to reflect a fully-loaded wage rate.

112 FEMA uses whole numbers for burden
estimates in this table. These estimates do not
match the RIA, since at the $1,000,000 threshold,
FEMA calculated a total of 1,761 responses for
forms 009–0–123, 009–0–124, 009–0–125, 009–0–
126, and 009–0–0127. The number of respondents
would remain the same at 56, while the average
number of responses per respondent would be
31.45 (rounded up to 32 for the PRA analysis). In

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

Estimated Total Annual Respondent
Cost: $27,090,374.
Estimated Respondents’ Operation
and Maintenance Costs: N/A.
Estimated Respondents’ Capital and
Start-Up Costs: N/A.
the RIA, the total number of responses was
estimated to be 1,761(56 × 31.45).

PO 00000

Frm 00046

Fmt 4700

Sfmt 4700

Estimated Total Annual Costs to the
Federal Government: $1,957,204.
FEMA calculated the impact on the
Information Collection Request if the
maximum threshold were changed from
$132,800 to $1,000,000 by taking the
difference in the number of large
projects at the $132,800 threshold
compared to the $1,000,000 threshold.
At the $132,800 threshold, there are

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

14,334 large projects over 3.1 years. At
the $1,000,000 threshold, there are
3,476 large projects in 3.1 years. FEMA
earlier mentions the 10,858
(14,334¥3,476) projects that will now
be considered small from these numbers
of projects over 3.1 years. Annually,
there will be 3,503 (10,858 ÷ 3.1)
additional small projects that were
formerly large.
FEMA then calculated the total
number of responses for each form at
the $1,000,000 threshold by taking the
total number of responses at the
$132,800 threshold and then subtracting
3,503. For FEMA Form 009–0–123, 009–
0–124, 009–0–125, 009–0–126, and 009–
0–127, FEMA estimates there will be
1,761 (5,264¥3,503) total number of
responses for each of these forms at the
$1,000,000 threshold. FEMA then
analyzed the data to determine then
number of recipients who would not
have at least one ongoing large project
if the maximum threshold were
$1,000,000 compared to those who
would at the $132,800 threshold. Over
the 3.1-year period, the number of
recipients with at least 1 ongoing large
project would reduce by 1, from 56 to
55, meaning 1 fewer recipient would
submit FEMA Form 009–0–111. The
total number of responses to the
quarterly form would reduce by 12.4 (4
responses × 3.1) over the 3.1-year
period, or by approximately 4 responses
annually.
F. Privacy Act/E-Government 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,
one’s education, financial transactions,
medical history, and criminal or
employment history and that contains
one’s name, or the identifying number,
symbol, or other identifying particular
assigned to the individual, such as a
finger or voice print or a photograph.
See 5 U.S.C. 552a(a)(4). A ‘‘system of
records’’ is a group of records under the
control of an agency from which
information is retrieved by the name of
the individual or by some identifying
number, symbol, or other identifying
particular assigned to the individual. An
agency cannot disclose any record
which is contained in a system of
records except by following specific
procedures.
The E-Government Act of 2002, 44
U.S.C. 3501 note, also requires specific
procedures when an agency takes action
to develop or procure information

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

technology that collects, maintains, or
disseminates information that is in an
identifiable form. This Act also applies
when an agency initiates a new
collection of information that will be
collected, maintained, or disseminated
using information technology if it
includes any information in an
identifiable form permitting the
physical or online contacting of a
specific individual.
In accordance with U.S. Department
of Homeland Security (DHS) policy,
FEMA has completed a Privacy
Threshold Analysis for this rule. FEMA
has determined this rulemaking does
not require the development and
publication of a new or modified
System of Records Notice (SORN). The
information collected has coverage
under an existing Privacy Impact
Assessments (PIA) and an existing
SORN:
DHS/FEMA/PIA–013 Grant
Management Programs;
DHS/FEMA–009 Hazard Mitigation
Assistance Grant Programs SORN.
The rule does not impact the
personally identifiable information (PII)
that FEMA currently collects, stores,
maintains, or disseminates. The
rulemaking has adequate coverage
under the above listed PIA and SORN.
G. Executive Order 13175,
‘‘Consultation and Coordination With
Indian Tribal Governments’’
Executive Order 13175, ‘‘Consultation
and Coordination with Indian Tribal
Governments,’’ 65 FR 67249 (Nov. 9,
2000), applies to agency regulations that
have Tribal implications, that is,
regulations that have substantial direct
effects on one or more Indian Tribes, on
the relationship between the Federal
government and Indian Tribes, or on the
distribution of power and
responsibilities between the Federal
Government and Indian Tribes. Under
this Executive Order, to the extent
practicable and permitted by law, no
agency 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 has reviewed this final rule
under Executive Order 13175 and has
determined that it does not have a
substantial direct effect on one or more
Indian tribes, on the relationship
between the Federal Government and
Indian Tribes, or on the distribution of

PO 00000

Frm 00047

Fmt 4700

Sfmt 4700

47377

power and responsibilities between the
Federal Government and Indian Tribes.
This rule updates the dollar figure
related to FEMA’s procedures for
handling grants for small and large
projects. It is therefore procedural and
will not affect the substantive rights or
interests of Indian Tribal governments.
H. Executive Order 13132, ‘‘Federalism’’
Executive Order 13132, ‘‘Federalism,’’
64 FR 43255 (Aug. 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.
I. Executive Order 11988, ‘‘Floodplain
Management’’
Pursuant to Executive Order 11988,
‘‘Floodplain Management,’’ 42 FR 26951
(May 24, 1977), each agency must
provide leadership and take action to
reduce the risk of flood loss, to
minimize the impact of floods on
human safety, health and welfare, and
to restore and preserve the natural and
beneficial values served by floodplains
in carrying out its responsibilities for (1)
acquiring, managing, and disposing of
Federal lands and facilities; (2)
providing Federally undertaken,
financed, or assisted construction and
improvements; and (3) conducting
Federal activities and programs affecting
land use, including but not limited to
water and related land resources
planning, regulating, and licensing
activities. In carrying out these
responsibilities, each agency must
evaluate the potential effects of any
actions it may take in a floodplain;
ensure that its planning programs and
budget requests reflect consideration of
flood hazards and floodplain
management; and prescribe procedures

E:\PICKUP\03AUR1.SGM

03AUR1

47378

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

to implement the policies and
requirements of the Executive Order.
Before promulgating any regulation,
an agency must determine whether the
regulations will affect a floodplain(s),
and if so, the agency must consider
alternatives to avoid adverse effects and
incompatible development in the
floodplain(s). If the head of the agency
finds that the only practicable
alternative consistent with the law and
with the policy set forth in Executive
Order 11988 is to promulgate a
regulation that affects a floodplain(s),
the agency must, prior to promulgating
the regulation, design or modify the
regulation in order to minimize
potential harm to or within the
floodplain, consistent with the agency’s
floodplain management regulations. It
must also prepare and circulate a notice
containing an explanation of why the
action is to be located in the floodplain.
The purpose of this rule is to update
the dollar figure related to FEMA’s
procedures for handling grants for small
and large projects. In accordance with
44 CFR part 9, ‘‘Floodplain Management
and Protection of Wetlands,’’ FEMA
determines that the changes in this rule
would not have an effect on floodplains.
When FEMA undertakes specific actions
that may affect floodplain management,
FEMA follows the procedures set forth
in 44 CFR part 9 to ensure compliance
with this Executive Order. These
procedures include a specific, eight-step
process for conducting floodplain
management and wetland reviews. With
few exceptions (such as emergencies)
and as set forth in applicable statutes or
regulations, reviews for compliance
must be completed before FEMA
approves funding and before work is
started. This rule does not change this
process.
J. Executive Order 11990, ‘‘Protection of
Wetlands’’
Executive Order 11990, ‘‘Protection of
Wetlands,’’ 42 FR 26961 (May 24, 1977)
sets forth that each agency must provide
leadership and take action to minimize
the destruction, loss or degradation of
wetlands, and to preserve and enhance
the natural and beneficial values of
wetlands in carrying out the agency’s
responsibilities. These responsibilities
include (1) acquiring, managing, and
disposing of Federal lands and facilities;
and (2) providing Federally undertaken,
financed, or assisted construction and
improvements; and (3) conducting
Federal activities and programs affecting
land use, including but not limited to
water and related land resources
planning, regulating, and licensing
activities. Each agency, to the extent
permitted by law, must avoid

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

undertaking or providing assistance for
new construction located in wetlands
unless the head of the agency finds (1)
that there is no practicable alternative to
such construction, and (2) that the
action includes all practicable measures
to minimize harm to wetlands which
may result from such use. In making
this finding, the head of the agency may
take into account economic,
environmental and other pertinent
factors.
In carrying out the activities described
in Executive Order 11990, each agency
must consider factors relevant to a
proposal’s effect on the survival and
quality of the wetlands. These include
public health, safety, and welfare,
including water supply, quality,
recharge and discharge; pollution; flood
and storm hazards; sediment and
erosion; maintenance of natural
systems, including conservation and
long term productivity of existing flora
and fauna, species and habitat diversity
and stability, hydrologic utility, fish,
wildlife, timber, and food and fiber
resources. They also include other uses
of wetlands in the public interest,
including recreational, scientific, and
cultural uses. The purpose of this rule
is to update the dollar figure related to
FEMA’s procedures for handling grants
for small and large projects. In
accordance with 44 CFR part 9,
‘‘Floodplain Management and
Protection of Wetlands,’’ FEMA
determines that the changes in this rule
would not have an effect on wetlands.
When FEMA undertakes specific actions
that may affect floodplain management,
FEMA follows the procedures set forth
in 44 CFR part 9 to ensure compliance
with this Executive Order. These
procedures include a specific, eight-step
process for conducting floodplain
management and wetland reviews. With
few exceptions (such as emergencies)
and as set forth in applicable statutes or
regulations, reviews for compliance
must be completed before FEMA
approves funding and before work is
started. This rule does not change this
process.
K. Executive Order 12898,
‘‘Environmental Justice’’
Pursuant to Executive Order 12898,
‘‘Federal Actions to Address
Environmental Justice in Minority
Populations and Low-Income
Populations,’’ 59 FR 7629 (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

PO 00000

Frm 00048

Fmt 4700

Sfmt 4700

health or the environment in a manner
that ensures that those programs,
policies, and activities do not have the
effect of excluding persons from
participation in programs, denying
persons the benefits of programs, or
subjecting persons to discrimination
because of race, color, or national origin.
This rulemaking will not result in
disproportionately high or adverse
effects on human health or the
environment. The purpose of this rule is
to update the dollar figure related to
FEMA’s procedures for handling grants
for small and large PA projects. The PA
program provides funding to States,
local governments, Tribal governments,
and PNP facilities/organizations to
assist them in their emergency response
and disaster response and recovery
efforts. The rulemaking will not have
the effect of excluding persons from
participation in or denying persons the
benefit of this program, nor will it
subject persons to discrimination
because of race, color, or national origin.
The PA program is administered
consistent with the nondiscrimination
requirements of 44 CFR 206.11 and
section 308 of the Stafford Act, 42
U.S.C. 5151.
L. National Environmental Policy Act of
1969 (NEPA)
Section 102 of the National
Environmental Policy Act of 1969
(NEPA), 83 Stat. 852 (Jan. 1, 1970) (42
U.S.C. 4321 et seq.) requires Federal
agencies to consider the impacts of their
major actions on the quality of the
human environment. Each agency can
develop categorical exclusions
(CATEXs) to cover major Federal actions
that have been demonstrated to not
typically trigger significant impacts to
the human environment individually or
cumulatively. If an action does not
qualify for a CATEX and has the
potential to significantly affect the
environment, Federal agencies conduct
environmental assessments (EAs) to
evaluate those actions. The Council on
Environmental Quality’s (CEQ)
procedures for implementing NEPA, 40
CFR parts 1500 through 1508, require
Federal agencies to prepare
Environmental Impact Statements (EISs)
for major Federal actions significantly
affecting the quality of the human
environment. At the end of the EA
process, the agency determines whether
to make a Finding of No Significant
Impact (FONSI) or whether to initiate
the EIS process. A major federal action
may be categorically excluded under a
Federal agency’s NEPA procedures and
if there are no extraordinary
circumstances. 40 CFR 1507.3, 1508.4.
This rule falls within the scope of the

E:\PICKUP\03AUR1.SGM

03AUR1

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

lotter on DSK11XQN23PROD with RULES1

Department of Homeland Security List
of Categorical Exclusion A3(a), which
covers rules of a strictly administrative
or procedural nature. The update to the
monetary threshold in this rule will
have no significant effect on the human
environment, is categorically excluded
consistent with DHS procedure and
NEPA regulations, and no extraordinary
circumstances have been identified.
Therefore, this rule does not require the
preparation of either an EA or an EIS as
defined by NEPA. See Department of
Homeland Security Instruction Manual
023–01–001–01, Revision 01,
Implementation of the National
Environmental Policy Act, section
(V)(B)(2).
M. National Historic Preservation Act
The National Historic Preservation
Act (NHPA) (54 U.S.C. 300101, formerly
16 U.S.C. 470) was enacted in 1966,
with various amendments throughout
the years. Section 106 of the NHPA (54
U.S.C. 306108) requires Federal
agencies to consider the effects of its
actions, referred to as an ‘‘undertaking,’’
on any historic property listed, or
eligible for listing, on the National
Register. Section 106 requires the
Federal agency to consult with any
Federal agencies, State, local, and Tribal
governments, and members of the
public who have an interest in the
effects of the undertaking. Section 106
mandates the consultation process in
the early stages of project planning and
that it be completed prior to the
approval of expenditure of any Federal
funds for the undertaking. Subpart B of
36 CFR part 800 lays out a four-step
Section 106 process to fulfill this
obligation: 1—Initiate the process
(800.3); 2—Identify historic properties
(800.4), 3—Assess adverse effects
(800.5), and 4—Resolve adverse effects
(800.6).
This rule updates the Public
Assistance monetary threshold for when
FEMA uses the application of simplified
procedures for administrative efficiency.
Pursuant to section 106 of the NHPA
and its implementing regulations at 36
CFR part 800, FEMA has determined
that this rulemaking does not have the
potential to cause effects to historic
properties. In accordance with 36 CFR
800.3(a)(1), FEMA has no further
obligations under section 106. When
FEMA undertakes specific actions that
may affect historic properties, FEMA
follows the procedures set forth in 36
CFR part 800 to ensure compliance with
this law. These procedures include a
specific, four-step process for
determining effects to historic
properties. With few exceptions (such as
emergencies) and as set forth in

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

applicable statutes or regulations,
reviews for compliance must be
completed before FEMA approves
funding and before work is started. This
rule does not change this process.
N. Endangered Species Act
The Endangered Species Act (ESA)
mandates that Federal agencies
determine whether their actions may
affect listed species and/or their
designated critical habitat (critical
habitat has been designated for some,
but not all listed species). Without
authorization or exemption from
Federal resource agencies, it is unlawful
for any person, whether government
employee or private citizen, to take
listed animal species, or remove,
damage, or destroy (among other
actions) an endangered plant species. 16
U.S.C. 1538, 1539.
To comply with section 7(a)(2) of the
ESA, for every action that FEMA carries
out, funds, or authorizes, FEMA must
first determine if listed species and their
designated critical habitat are present in
the action area. If species are present in
the action area, then FEMA must make
one of the following determinations
with respect to the effect of the action
on listed species and critical habitat: (1)
No Effect (NE); (2) May affect, but is not
likely to adversely affect (NLAA); or (3)
May affect and is likely to adversely
affect (LAA).
This rule would update the Public
Assistance monetary threshold for when
FEMA uses the application of simplified
procedures for administrative efficiency.
This rulemaking has been evaluated by
FEMA and due to its administrative
nature, FEMA has determined the
rulemaking does not have the potential
to affect federally-listed species or
designated critical habitat. As such,
FEMA has made a No Effect
determination for this rulemaking. Per
the ESA regulations, notification to, and
consultation with, the U.S. Fish and
Wildlife Service and/or the National
Marine Fisheries Service are not
required for activities with a No Effect
determination. When FEMA undertakes
specific actions that may affect listed
species and their designated critical
habitat, FEMA follows the procedures
set forth in section 7(a)(2) to ensure
compliance with this law. These
procedures include a process for
determining the effect of the action on
listed species and critical habitat. The
rule does not change this process.
O. 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,

PO 00000

Frm 00049

Fmt 4700

Sfmt 4700

47379

the Federal agency promulgating the
rule must submit to Congress and to the
Government Accountability Office
(GAO) a copy of the rule; a concise
general statement relating to the rule,
including whether it is a major rule; the
proposed effective date of the rule; a
copy of any cost-benefit analysis;
descriptions of the agency’s actions
under the Regulatory Flexibility Act and
the Unfunded Mandates Reform Act;
and any other information or statements
required by relevant executive orders.
FEMA has sent this final rule to the
Congress and to GAO pursuant to the
CRA. The rule is not a ‘‘major rule’’
within the meaning of the CRA. It will
not have an annual effect on the
economy of $100,000,000 or more; it
will not result in a major increase in
costs or prices for consumers,
individual industries, Federal, State, or
local government agencies, or
geographic regions; and it will not have
significant adverse effects on
competition, employment, investment,
productivity, innovation, or on the
ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.
List of Subjects in 44 CFR Part 206
Administrative practice and
procedure, Coastal zone, Community
facilities, Disaster assistance, Fire
prevention, Grant programs-housing and
community development, Housing,
Insurance, Intergovernmental relations,
Loan programs-housing and community
development, Natural resources,
Penalties, and Reporting and
recordkeeping requirements.
For the reasons stated in the
preamble, the Federal Emergency
Management Agency amends 44 CFR
part 206 as follows:
PART 206—FEDERAL DISASTER
ASSISTANCE
1. The authority citation for part 206
continues to read as follows:

■

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

2. In § 206.203:
a. In paragraphs (c)(1) and (2), remove
‘‘$120,000’’ and add in its place
‘‘$1,000,000’’ wherever it appears; and
■ b. Add paragraph (c)(3).
The addition reads as follows:
■
■

§ 206.203

*

*

E:\PICKUP\03AUR1.SGM

Federal grant assistance.

*

03AUR1

*

*

47380

Federal Register / Vol. 87, No. 148 / Wednesday, August 3, 2022 / Rules and Regulations

(c) * * *
(3) Applicability date. The dollar
threshold provided in this paragraph (c)
applies to project worksheets that have

not been obligated as of August 3, 2022

for major disasters and emergencies
declared on or after March 13, 2020.
*
*
*
*
*
Deanne B. Criswell,
Administrator, Federal Emergency
Management Agency.
[FR Doc. 2022–16555 Filed 8–2–22; 8:45 am]

lotter on DSK11XQN23PROD with RULES1

BILLING CODE 9111–23–P

VerDate Sep<11>2014

17:44 Aug 02, 2022

Jkt 256001

PO 00000

Frm 00050

Fmt 4700

Sfmt 9990

E:\PICKUP\03AUR1.SGM

03AUR1