[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Proposed Rules]
[Pages 80719-80745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27094]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

[Docket ID FEMA-2020-0038]
RIN 1660-AA99


Cost of Assistance Estimates in the Disaster Declaration Process 
for the Public Assistance Program

AGENCY: Federal Emergency Management Agency, Department of Homeland 
Security (DHS).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Emergency Management Agency (FEMA) is proposing a 
rule to substantively revise the ``Estimated cost of the assistance'' 
disaster declaration factor that FEMA uses to review a Governor's 
request for a major disaster under the Public Assistance Program. FEMA 
proposes revisions to this factor to more accurately assess the 
disaster response capabilities of the 50 States, the District of 
Columbia, and the U.S. territories (States), and to respond to the 
direction of Congress in the Disaster Recovery Reform Act of 2018, 
which requires FEMA to review its disaster declaration factors and 
update them via rulemaking, as appropriate.

DATES: All comments must be submitted by February 12, 2021.

ADDRESSES: You may submit comments on this proposed rule, identified by 
Docket ID FEMA-2020-0038, by the following method:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    Comments on the proposed information collections included in this 
proposed rule should be submitted both to FEMA, as indicated above, and 
to the Office of Information and Regulatory Affairs, Office of 
Management and Budget. Comments should be identified by the appropriate 
OMB Control Number(s), addressed to the Desk Officer for the Department 
of Homeland Security, Federal Emergency Management Agency, and sent via 
electronic mail to dhsdeskofficer@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT: Tod Wells, Deputy Director of Public 
Assistance, Federal Emergency Management Agency, 500 C Street SW, 
Washington, DC 20472, 202-646-3936, fema-recovery-pa-policy@fema.dhs.gov.

SUPPLEMENTARY INFORMATION:

I. Public Participation

    We encourage you 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, identify the agency name and the docket ID 
for this rulemaking, indicate the specific section of this document to 
which each comment applies, and give the reason for each comment. You 
may submit your comments and material by electronic means, mail, or 
delivery to the address under the ADDRESSES section. Please submit your 
comments and material by only one means.
    Regardless of the method used for submitting comments or material, 
all submissions will 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. You may wish to read the Privacy and 
Security Notice that is available via a link on the homepage of http://www.regulations.gov.
    Viewing comments and documents: For access to the docket to read 
supporting documents and comments received, go to the Federal e-
Rulemaking Portal at http://www.regulations.gov. Background documents 
and submitted comments may also be inspected at FEMA, Office of Chief 
Counsel, 500 C Street SW, Washington, DC 20472-3100.

II. Executive Summary

    Pursuant to 44 CFR 206.48(a), FEMA considers several factors when 
determining whether to recommend that the President declare a major 
disaster authorizing the Public Assistance (PA) program.\1\ FEMA 
proposes to amend the factor in 44 CFR 206.48(a)(1) for ``estimated 
cost of the assistance,'' to raise the per capita indicator and the 
minimum threshold.\2\
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    \1\ Under section 401 of the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (Stafford Act) (42 U.S.C. 5170), the 
President may declare that a major disaster exists after finding, 
upon request by a State governor, that such disaster is beyond the 
capabilities of the State and affected local governments, and that 
Federal assistance is needed. FEMA receives the governor's request 
and makes a recommendation to the President whether such a 
declaration is warranted. See 44 CFR 206.37.
    \2\ See 44 CFR 206.48(a). Other factors include: Insurance 
coverage in force, hazard mitigation, and other Federal assistance 
programs. Id.
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    Since 1986, FEMA has evaluated the estimated cost of Federal and 
non-Federal public assistance against the statewide population and used 
a per capita dollar amount (set at $1 in 1986) as an indicator that a 
disaster may warrant Federal assistance. The per capita indicator 
remained at $1 until 1999, when the Agency began adjusting the 
indicator for inflation in 1999 and annually thereafter.\3\ Also in 
1999, FEMA established a $1 million minimum threshold, meaning it would 
not recommend that the President authorize the PA program unless there 
was at least $1 million in damages resulting from the disaster and 
within the proposed area for Public Assistance. At the time, FEMA 
believed $1 million was a level of damage from which even the least 
populous States could recover with their own resources. FEMA has never 
increased the $1 million threshold. Additionally, FEMA also considers 
impacts at the local level and recent disasters in the 12 months prior 
to a declaration request to evaluate the impact to the State or 
locality.
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    \3\ At the time of drafting this proposed rule, the indicator 
was $1.50 in fiscal year 2019. See FEMA, Notice of Adjustment of 
Statewide per Capita Impact Indicator, 83 FR 53279 (Oct. 22, 2018).
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    In the Disaster Recovery Reform Act of 2018 (DRRA), Congress 
directed FEMA to give greater consideration to the recent multiple 
disasters and localized impacts factors when evaluating a request for a 
major disaster.\4\ Congress also directed FEMA to generally review the 
factors it considers when considering a request for a major disaster, 
specifically the estimated cost of assistance factor, and to update the 
factors through rulemaking, as appropriate.\5\
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    \4\ Sec. 1232 of Public Law 115-254, 132 Stat. 3460 (Oct. 5, 
2018). However, as discussed below, FEMA does not propose to 
substantively amend 44 CFR 206.48(a)(2) because that factor is 
already sufficiently flexible to address the requirements of section 
1232 of the DRRA.
    \5\ Sec. 1239 of Public Law 115-254, 132 Stat. 3466 (Oct. 5, 
2018).
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    The lack of increases to the per capita indicator from 1986 to 1999 
has undercut the value of this factor as an indicator of State capacity 
given the 51 percent reduction in purchasing power during that time.\6\ 
In addition, a State

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fiscal capacity factor pegged to $1 per person in 1986 does not capture 
more sophisticated measurements of fiscal capacity available through 
consideration of a State's total taxable resources. Accordingly, the 
current per capita indicator and minimum threshold do not provide an 
accurate measure of States' capabilities to respond to disasters.
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    \6\ April 1986 CPI-U was 108.6 and January 1999 CPI-U was 164.3. 
(164.3-108.6)/108.6 = 51.29%. See Bureau of Labor Statistics, U.S. 
Department of Labor, ``Consumer Price Index, Archived Consumer Price 
Index Supplemental Files'': Historical CPI-U, November 2019, 
(available for download at https://www.bls.gov/cpi/tables/supplemental-files/home.htm).
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    With respect to the minimum threshold, while FEMA determined in 
1999 that every State could handle at least $1 million in damages with 
their own resources, that figure has also not increased with inflation 
or rising State budgets and expenditures.\7\ As a result, FEMA may 
recommend that the President declare major disaster declarations for 
incidents that, with more accurate assessment, would be found to be 
well within a State's financial capabilities to respond to on its own. 
FEMA proposes to adjust these factors so that it may more closely 
adhere to the law which authorizes Federal disaster assistance only 
when an event ``is beyond the capabilities'' of the State and affected 
local governments.\8\
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    \7\ See Government Accountability Office (GAO), Federal Disaster 
Assistance: Improved Criteria Needed to Assess Eligibility and a 
Jurisdiction's Capability to Respond and Recover On Its Own, GAO-12-
838 (2012); Department of Homeland Security (DHS), Office of 
Inspector General (OIG), Opportunities to Improve FEMA's Public 
Assistance Preliminary Damage Assessment Process, OIG-12-79 (2012).
    \8\ See section 401 of the Stafford Act (42 U.S.C. 5170).
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    FEMA proposes to increase the per capita indicator to account for 
increases in inflation from 1986 to 1999, and to adjust the individual 
States' indicators by their total taxable resources (TTR). These 
changes will allow FEMA to more accurately gauge a State's fiscal 
capacity by accounting for taxable resources other than the State's 
population, such as business income, undistributed corporate profits, 
and out-of-state residents. FEMA also proposes to increase the minimum 
threshold by accounting for inflation from 1999 to 2019, and annually 
thereafter.
    FEMA also proposes to use the U.S. Census Bureau's annual 
population estimates produced under the Population Estimates Program 
(PEP) instead of the decennial census population data produced every 10 
years, which FEMA currently uses to calculate each State's Cost of 
Assistance (COA) Indicator. By increasing the per capita indicator and 
the minimum threshold, and using more current population data, FEMA's 
recommendation to the President will be a better informed and more 
accurate assessment of whether an incident exceeds State capabilities. 
The resulting reduction in disaster declarations for smaller incidents 
will allow FEMA to better focus its efforts and resources on larger 
disasters without the complications of reallocating resources from 
multiple smaller-scale commitments. Collectively, these changes would 
provide a better distribution of responsibilities between the States 
and the Federal Government, and will incentivize States to invest more 
in response, recovery, and mitigation capabilities, and lead to a more 
resilient and prepared Nation.
    With respect to the recent multiple disasters and localized impacts 
factors, FEMA proposes not to substantively amend 44 CFR 206.48(a)(2) 
and (5). As is discussed below, these factors are already sufficiently 
flexible to address the requirements of section 1232 of the DRRA. FEMA 
also does not propose at this time to substantively amend the other 
declaration factors at 44 CFR 206.48(a)(3) (``Insurance coverage in 
force''), (4) (``Hazard mitigation''), and (6) (``Programs of other 
Federal assistance'') because they already provide adequate 
consideration of important information for FEMA's assessment of a 
State's capabilities to respond to an event, while also providing 
sufficient flexibility for FEMA to account for a variety of 
circumstances across the States.
    Importantly, this proposed rule will not affect FEMA's 
recommendations on direct requests for a major disaster declaration 
received from Tribal governments. For direct requests from Tribal 
governments, FEMA relies on the Tribal Declarations Pilot Guidance and 
criteria in that guidance instead of 44 CFR 206.48.\9\
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    \9\ See FEMA, Tribal Declarations Pilot Guidance, available at: 
https://www.fema.gov/tribal-declarations-pilot-guidance. Notice of 
availability published at 82 FR 3016 (Jan. 10, 2017).
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    FEMA also proposes minor technical and corresponding grammatical 
changes to 44 CFR 206.48 to ensure consistent language between the 
Public Assistance declaration factors in 44 CFR 206.48(a) and the 
Individual Assistance factors in 44 CFR 206.48(b).

III. Background

    The Disaster Relief Act of 1974,\10\ which was amended and renamed 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act 
(Stafford Act) in 1988,\11\ formally established the foundation of the 
current disaster assistance system. Generally, FEMA coordinates the 
Federal Government's response to major disasters and provides various 
forms of financial and direct assistance. One of the primary types of 
financial assistance FEMA provides is through the PA program.\12\ FEMA 
provides financial assistance to States, Tribes, Territories, and local 
governments and certain private non-profit entities for debris 
removal,\13\ emergency protective measures,\14\ and the repair, 
restoration, and replacement of infrastructure damaged or destroyed by 
a disaster event.\15\ Repair and replacement assistance, known as 
``permanent work,'' helps jurisdictions to repair or replace a wide 
variety of infrastructure including buildings, roads, bridges, and 
sewer and water systems.
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    \10\ Disaster Relief Act of 1974, Public Law 93-288 (1974).
    \11\ Robert T. Stafford Disaster Relief and Emergency Assistance 
Act, Public Law 100-707 (1988); Public Law 93-288 (1974), as 
amended; 42 U.S.C. 5121 et seq.
    \12\ See 42 U.S.C. 5172.
    \13\ See 44 CFR 206.224.
    \14\ See 44 CFR 206.225.
    \15\ See 44 CFR 206.226.
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    Before an affected jurisdiction can receive funding through the PA 
program, the President of the United States must authorize it through a 
declaration of a major disaster or emergency.\16\ To obtain a 
declaration, the Governor must make a request through FEMA.\17\ Upon 
receipt, FEMA is responsible for evaluating the Governor's request and 
providing a recommendation to the President regarding its 
disposition.\18\
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    \16\ See 42 U.S.C. 5170b, 5192; see also 44 CFR 206.38 and 
206.40.
    \17\ 42 U.S.C. 5170 & 5191. The Chief Executive of an Indian 
Tribal government may also request a major disaster declaration from 
the President under the Tribal Declarations Pilot Guidance. FEMA, 
Tribal Declarations Pilot Guidance, available at: https://www.fema.gov/tribal-declarations-pilot-guidance. Notice of 
availability published at 82 FR 3016 (Jan. 10, 2017). The factors 
FEMA considers when reviewing a request submitted under the Tribal 
Declarations Pilot Guidance are not a part of the factors FEMA 
considers under 44 CFR 206.48(a) and are outside the scope of this 
proposed rulemaking.
    \18\ See 44 CFR 206.37(c).
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    When considering a jurisdiction's request for a major disaster 
declaration authorizing the PA program, FEMA considers all relevant 
information including, but not limited to, six specific factors.\19\ 
These specific factors are:
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    \19\ See 44 CFR 206.48(a).
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    1. Estimated cost of the assistance; \20\
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    \20\ Id. at Sec.  206.48(a)(1).
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    2. localized impacts; \21\
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    \21\ Id. at Sec.  206.48(a)(2).

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    3. insurance coverage in force; \22\
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    \22\ Id. at Sec.  206.48(a)(3).
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    4. hazard mitigation; \23\
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    \23\ Id. at Sec.  206.48(a)(4).
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    5. recent multiple disasters; \24\ and
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    \24\ See 44 CFR 206.48(a)(5).
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    6. programs of other Federal assistance.\25\
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    \25\ Id. at Sec.  206.48(a)(6).
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    FEMA evaluates every request with regard to each of these 
delineated factors, to the extent applicable. However, there is a 
strong correlation between the first factor, the estimated cost of the 
assistance, and the likelihood that FEMA will recommend that the 
President issue a major disaster declaration.
    On October 5, 2018, the President signed the Disaster Recovery 
Reform Act (DRRA).\26\ Section 1239 of the DRRA directs FEMA to review 
the factors it considers when evaluating a request for a major disaster 
declaration, specifically the estimated cost of assistance factor, and 
to initiate rulemaking to update the declaration factors. Further, 
Section 1232 of the DRRA directs the FEMA Administrator to give 
``greater consideration'' to the localized impacts and recent multiple 
disasters factors and to make corresponding adjustments to FEMA 
policies and regulations. FEMA now proposes to amend 44 CFR 206.48(a) 
to make changes to the estimated cost of assistance factor. With 
respect to the recent multiple disasters and localized impacts factors, 
FEMA evaluated the provision of the DRRA as well as the current factors 
in regulation and determined that the regulation is sufficiently 
flexible to address the DRRA requirements. On May 1, 2019, FEMA issued 
guidance to Regional Administrators directing them to include in their 
recommendations appropriate and fulsome information regarding severe 
local impacts and the history of recent multiple disasters.\27\ As is 
discussed below, FEMA requests comment on whether revisions to the 
recent multiple disasters factor are necessary.
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    \26\ Public Law 115-254, 132 Stat. 3438 (Oct. 5, 2018).
    \27\ Memorandum for Regional Administrators from Jeff Byard, 
Associate Administrator, Office of Response and Recovery, 
Declaration Factors for Local Impact and Recent Multiple Disasters 
(May 1, 2019).
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A. Cost of Assistance Estimates

1. Creation of the Per Capita Indicator
    Pursuant to 44 CFR 206.48(a)(1), FEMA evaluates the estimated cost 
of Federal and non-Federal public assistance resulting from an incident 
to inform its recommendation to the President of whether an incident is 
of such severity and magnitude that it is beyond the capabilities of 
the State and warrants Federal assistance under a major disaster 
declaration. To make this estimation, FEMA calculates the estimated 
cost of assistance, generally determined from joint FEMA-State 
Preliminary Damage Assessments, against the statewide population and if 
the estimated per capita dollar amount exceeds $1.50 (fiscal year (FY) 
2019 per capita indicator),\28\ FEMA considers this an indicator that 
the incident is of such a size and magnitude that it may warrant 
Federal assistance for the State under a major disaster declaration. In 
other words, FEMA relies on the per capita indicator to assess the 
financial impact of an incident on a State and as an indicator of 
whether the State is overwhelmed and unable to effectively respond to 
an event on its own.
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    \28\ Since the drafting of this proposed rule, FEMA has 
published the FY 2020 per capita indicator of $1.53. However, for 
the purposes of this proposed rule and analysis, FEMA will continue 
to discuss the FY 2019 per capita of $1.50. See FEMA, Notice of 
Adjustment of Statewide per Capita Impact Indicator, 83 FR 53279 
(Oct. 22, 2018).
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    FEMA publishes the updated per capita indicator in the Federal 
Register each year.\29\ FEMA multiplies the indicator by the impacted 
State's most recent decennial population to determine the amount of 
damage that a State is expected to be able to independently manage 
without the need for supplemental Federal assistance (the State Cost of 
Assistance (COA) Indicator). For example, if an event occurred in 
FY2019 in a State with a 2010 decennial census population of 1,500,000, 
FEMA would multiply that population by the $1.50 indicator and arrive 
at a State COA indicator of $2,250,000.\30\ If the estimated cost of 
assistance exceeds $2,250,000, FEMA would consider this a strong 
indicator that the State is overwhelmed and in need of supplemental 
Federal assistance.
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    \29\ See, e.g., 84 FR 55324 (Oct. 16, 2019).
    \30\ Per Capita Impact Indicator and Project Thresholds are 
published on FEMA's website, available at https://www.fema.gov/public-assistance-indicator-and-project-thresholds.
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    Although FEMA considers every request for a Presidential major 
disaster declaration in light of each applicable regulatory factor, the 
probability of an incident being declared a major disaster and that 
incident having exceeded the State COA indicator in disaster damage 
between 2005 and 2014 was over 80 percent (494 of 589 declared major 
disasters).\31\ In other words, whether damage assessments find an 
amount of damage that meets or exceeds the State COA indicator is 
highly correlated to whether that State will ultimately receive 
supplemental Federal assistance for that incident.
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    \31\ 82 FR 4064, 4067 (Jan. 12, 2017).
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    FEMA began informally using the per capita indicator in 1986 and 
set it at $1, based on the 1983 nationwide per capita personal income 
(PCPI), as $1 was determined to be a reasonable portion of PCPI for a 
State to contribute towards the cost of a disaster. This amount also 
correlated closely to about 0.1 percent of established General Fund 
expenditures by States. With the passage of time, however, the 
indicator lost its relation to both metrics upon which FEMA first 
calculated it. When FEMA began using a per capita indicator of $1 in 
1986, the most recent PCPI data available was 1983 PCPI, which was 
$11,687.\32\ By 1999, PCPI had risen 145 percent to $28,675.\33\ 
Similarly, the per capita indicator also fell short of keeping pace 
with State general fund expenditures. Between 1986 and 1999, the 
national average increase in State general fund expenditures was 146 
percent.\34\ Despite these increases in PCPI and State general fund 
expenditures, FEMA did not increase the per capita indicator until 
1999.
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    \32\ Disaster Assistance; Subpart C, the Declaration Process and 
State Commitments, 51 FR 13333, Apr. 18, 1986, found at http://cdn.loc.gov/service/ll/fedreg/fr051/fr051075/fr051075.pdf. Revisions 
were made to the BEA 1983 PCPI after publication of the proposed 
1986 rule. FEMA used the PCPI of $11,687 to maintain consistency 
with the data used at the time of establishing the per capita 
indicator.
    \33\ Per Capita Personal Income (PCPI) is calculated annually by 
the United States Department of Commerce's Bureau of Economic 
Analysis. PCPI data is available for download at https://apps.bea.gov/regional/downloadzip.cfm: Download ``Annual Personal 
Income by State'' under ``State Personal Income Accounts.'' 
Historical PCPI data pulled from Excel sheet titled 
``SAINC1_ALL_AREAS_1929_2018.''
    \34\ Compare National Association of State Budget Officers 
(NASBO), 1988 State Expenditure Report, with NASBO, 2000 State 
Expenditure Report (available for download at: https://www.nasbo.org/reports-data/state-expenditure-report/state-expenditure-archives). Actual fiscal total US expenditures were 
$880,252 million in 1999 (found page 6 of the 2000 report) and 
$358,277 million in 1986 (found page 5 of the 1988 report). 
Calculation: (($880,252-$358,277)/$358,277) * 100 = 145.69 percent 
(146 percent rounded).
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2. Changes to the Per Capita Indicator and Establishment of the Minimum 
Threshold
    In 1999, FEMA issued a rule to codify the per capita indicator at 
$1 and establish, beginning in 1999, that FEMA would annually adjust 
the per capita indicator for inflation based on the Consumer Price 
Index for All Urban Consumers (CPI-U).\35\ This rule, along with the 
failure to increase the indicator over the years, removed any remaining 
association the indicator had in the past

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with PCPI or State general fund expenditures.
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    \35\ 64 FR 47697 (Sept. 1, 1999).
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    In setting the per capita indicator in 1999, FEMA chose not to 
retroactively account for inflation from 1986-1999.\36\ Accordingly, 
FEMA did not, and to this date has not, accounted for the 51 percent 
increase in the CPI-U between April of 1986 (when the per capita 
indicator was first set at $1) and January of 1999 (when FEMA proposed 
to adjust the per capita indicator for inflation).\37\ Consequently, 
since 1999, the per capita indicator has risen to its FY 2019 value of 
$1.50, rather than $2.32, which would be the value of the per capita 
indicator had FEMA accounted for inflation between 1986 and 1999.\38\
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    \36\ In 1998, FEMA considered adjusting the per capita indicator 
to $1.51 to account for inflation since 1986, but because of input 
from state emergency management officials, FEMA decided not to do 
so. See GAO, GAO 12-838.
    \37\ See Historical CPI-U, April 2019 (available for download at 
https://www.bls.gov/cpi/tables/supplemental-files/home.htm). CPI-U 
in April 1986 was 108.6, CPI-U in January 1999 was 164.3. (164.3-
108.6)/108.6 = 51.23%.
    \38\ FEMA, Notice of Adjustment of Statewide per Capita Impact 
Indicator, gave notice that the statewide per capita impact 
indicator increased to $1.50 for all disasters declared on or after 
October 1, 2018. 83 FR 53279 (Oct. 22, 2018). FEMA calculated 
inflation from between 1986 and 1999 by using the CPI-U from April 
1986 to August 2018. Calculation: ((August 2018 CPI-U (252.146)--
April 1986 CPI-U (108.6))/April 1986 CPI-U (108.6)) + $1 = $2.32 
(rounded). FEMA uses the latest available month of CPI-U data to 
adjust the minimum threshold and per capita indicator each fiscal 
year, which is generally August CPI-U data. August 2018 CPI-U data 
was the latest available data when FEMA established the FY2019 per 
capita indicator and is used in this analysis to maintain 
consistency with FEMA practice.
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    Also, in 1999, FEMA established, through regulation, a $1 million 
minimum threshold for any PA major disaster, regardless of the 
calculated State COA indicator.\39\ FEMA set the threshold at $1 
million because it believed that even the lowest population States 
could reasonably be expected to cover this level of public assistance 
damage.\40\ Importantly, FEMA did not subject the $1 million floor to 
adjustments for inflation. FEMA has never raised the $1 million 
threshold.
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    \39\ 44 CFR 206.48(a)(1).
    \40\ FEMA, Disaster Assistance; Factors Considered When 
Evaluating a Governor's Request for a Major Disaster Declaration, 64 
FR 47697 (Sept. 1, 1999).
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3. Criticism of the Current Cost of Assistance Estimates Factor
    In recent years, the Government Accountability Office (GAO),\41\ 
the Department of Homeland Security Office of Inspector General (DHS 
OIG),\42\ and Congress,\43\ have criticized and called for changes to 
the way FEMA considers the estimated cost of assistance for a disaster. 
For example, the GAO found that the PA per capita indicator is 
artificially low because it does not reflect the rise in PCPI since 
1986, or 13 years of inflation from 1986 to 1999, resulting in 
recommendations to the President that do not comprehensively assess a 
jurisdiction's capability to respond to and recover from a disaster on 
its own.\44\ Similarly, the DHS OIG found that roughly one-third of 
FEMA-State Preliminary Damage Assessments used to estimate the damage 
of a given event would not have exceeded the States' COA indicators if 
the per capita indicator had been indexed to the Consumer Price Index 
since 1983.\45\ Both GAO and the DHS OIG recommended that FEMA develop 
and implement a methodology that provides a better reflection of 
current economic conditions and a more comprehensive assessment of a 
jurisdiction's capability to respond and recover from a disaster 
without Federal assistance in order to decrease the frequency of 
disaster declarations and transfer some costs back to State and local 
jurisdictions.\46\ Additionally, GAO and the DHS OIG recommended that 
FEMA supplement the per capita indicator with more complete data on a 
jurisdiction's financial resources (i.e., its tax base), such as TTR, 
in order to obtain a more comprehensive assessment of the 
jurisdiction's ability to respond to a disaster on its own.\47\
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    \41\ See, e.g., GAO, Disaster Assistance: Improvements Needed in 
Disaster Declaration Criteria and Eligibility Assurance Procedures, 
GAO 01-837 (2001); See also, GAO, GAO-12-838 at 29.
    \42\ See DHS OIG, OIG-12-79 at 3.
    \43\ See, e.g., S.1960, Fairness in Federal Disaster 
Declarations Act of 2014, 113th Cong.; H.R. 3925, Fairness in 
Federal Disaster Declarations Act of 2014, 113th Cong. (establishing 
criteria for FEMA to incorporate in rulemaking with specific 
weighted factors); H.R. 1859, Disaster Declaration Improvement Act 
of 2013, 113th Cong. (requiring new regulations concerning major 
disaster declarations).
    \44\ GAO, GAO-12-838 at 48.
    \45\ DHS OIG, OIG-12-79 at 7.
    \46\ GAO, GAO 12-838 at 48-49; See also DHS OIG, OIG-12-79 at 7-
8.
    \47\ GAO, GAO 12-838 at 48-49; See also DHS OIG, OIG-12-79 at 7-
9.
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    More recently, in section 1239 of the DRRA, Congress directed FEMA 
to review the factors it considers when evaluating a request for a 
major disaster declaration, specifically the estimated cost of 
assistance factor, and to initiate rulemaking to update the declaration 
factors.\48\
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    \48\ See Public Law 115-254, 132 Stat. 3466 (Oct. 5, 2018).
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4. Problems With the Current Cost of Assistance Estimates Factor
a. The Current Cost of Assistance Estimates Factor No Longer Provides 
an Accurate Measure of States' Capabilities To Respond to Disasters and 
Is No Longer Reflective of Current Economic Conditions
    The lack of increases to the per capita indicator from 1986 to 1999 
undercut the value of this factor as an indicator of State capacity 
given the reduction in purchasing power during that time. Similarly, on 
the minimum threshold, the lack of an increase since 1999 has prevented 
this factor from keeping pace with inflation, and rising State budgets 
and resources. For context, the lowest State budget for FY 2018 
(Delaware) was just over $4 billion,\49\ while its State COA indicator 
for FY 2018 was just over $1.31 million, or 0.032 percent of the 
State's budget. For comparison, in FY 1987, Delaware's budget was just 
under $1 billion,\50\ while its State COA indicator was just under 
$595,000, or 0.063 percent of Delaware's FY 1987 State budget. 
Similarly, the lowest TTR amongst the States for FY 2016 (Vermont) was 
$36.1 billion,\51\ while that State in FY 2016 was subject to the $1 
million minimum threshold, or 0.0028 percent of the State's TTR. 
Because its State COA indicator was less than $1 million, Vermont would 
have been subject to the $1 million threshold in FY 2016. For 
comparison, Vermont's TTR in 1997 was $17.3 billion, while it was 
subject to the $1 million minimum threshold, or 0.0058 percent of its 
1997 TTR. As shown from these figures, the ratio of the per capita 
indicator and the minimum threshold as a percentage of State budgets 
and TTR has decreased since FEMA began using the per capita indicator 
and minimum threshold. Moreover, as discussed in the Regulatory Impact 
Analysis (RIA) found in the docket of this rulemaking, since 1999, 
State gross domestic product (GDP), total State expenditures, and State 
TTR have increased, on a nationwide average, by approximately 113 
percent, 131 percent, and 130

[[Page 80723]]

percent, respectively.\52\ In comparison, since 1999, the per capita 
indicator and the minimum threshold have risen 50 percent and 0 
percent, respectively.
---------------------------------------------------------------------------

    \49\ Delaware General Assembly, Section 1, House Substitute No. 
1 for House Bill No. 275 of 2017. p. 60. Retrieved 11 June 2018 
(available for download at: http://delcode.delaware.gov/sessionlaws/ga149/chp058.pdf).
    \50\ NASBO, The State Expenditure Report, at 59 (July 1987) 
(available for download at: https://www.nasbo.org/reports-data/state-expenditure-report/state-expenditure-archives).
    \51\ U.S. Dept. of Treasury, 2018 Total Taxable Resources 
Estimates (Sept. 2018), (available for download at: https://home.treasury.gov/system/files/226/TTR-tables-2018.pdf) (last 
accessed Feb. 19, 2019). 2016 is the most recently reported year for 
TTR because there is a two-year lag in reporting.
    \52\ See Regulatory Impact Analysis (RIA) at 47. The RIA is 
available in the public docket for this proposed rule on 
regulations.gov.
---------------------------------------------------------------------------

    Consequently, FEMA is relying upon per capita indicator and minimum 
threshold factors that are no longer adequate measures of a State's 
capability to respond to and recover from a disaster. The result is a 
greater likelihood that FEMA recommends major disaster declarations for 
relatively small incidents that a more accurate assessment would find 
is within a State's financial capabilities to respond to on its own. 
This result is counter to the intent of the Stafford Act that Federal 
assistance be supplemental, and only necessary for disasters that 
exceed a State's capabilities. In light of the rise in the costs to 
respond to and recover from a disaster (construction costs in 
particular), the lack of increases to the per capita indicator has led 
to outcomes, especially in less populous States, where minor, 
concentrated infrastructural damage (e.g., a dirt road washout or 
damage to a single building) would result in costs sufficient to meet 
the per capita indicator and potentially result in a disaster 
declaration. While such incidents can certainly be disruptive and 
expensive, it is questionable whether such minor, concentrated damage 
really overwhelms a State and warrants a Presidential major disaster 
declaration.
    In sum, the per capita indicator and minimum threshold are not 
reflective of the change in economic conditions since 1986 and 1999, 
respectively, and are no longer adequate measures of the States' 
capabilities to respond to, and recover from, incidents on their own. 
The increases in State resources and expenditures, and costs, 
generally, without corresponding increases to the per capita indicator 
and minimum threshold, has created a situation where Federal assistance 
is being provided for incidents which are more appropriately addressed 
by the States. This is counter to the intent of the Stafford Act that 
Federal assistance be provided only where State and local capabilities 
are overwhelmed.
b. The Current Cost of Assistance Estimates Factor Undermines FEMA's 
Mission to Better Prepare the Nation for Disasters by Disincentivizing 
States From Investing in Disaster Mitigation and Preparedness
    The current per capita indicator and minimum threshold act as 
disincentives for States to invest in disaster response and recovery 
capabilities for incidents that should be within their capability to 
respond. Emergency management is a shared responsibility that is most 
effective when disaster operations are federally supported, State 
managed, and locally executed, where Federal support supplements, 
rather than supplants, State and local efforts.\53\ In order to build a 
more prepared and resilient nation, it is essential that State, local, 
Tribal, and Territorial governments continually mitigate risk to 
hazards posed by natural disasters, and build their response and 
recovery capabilities for future incidents, including the creation of 
dedicated financial reserves to respond to incidents.
---------------------------------------------------------------------------

    \53\ FEMA, 2018-2022 Strategic Plan at 8 (2018).
---------------------------------------------------------------------------

    While State and local governments respond on their own to countless 
small incidents that do not reach the level of their current State COA 
indicator, there is little incentive for States to build their response 
and recovery capabilities beyond their current State COA indicator, 
since Federal assistance will be provided at that point, even though 
FEMA believes all States have financial capabilities beyond their 
current State COA indicator. For example, in a 2015 study of 10 States, 
the GAO found that some States reported that they could cover disaster 
costs without dedicated disaster reserves because they generally relied 
on the Federal Government to fund most of the costs associated with 
disaster response and recovery.\54\ GAO ultimately concluded, in part, 
that given the fiscal challenges facing all levels of government, there 
may be increased pressure to consider whether the current State and 
Federal approach for providing disaster assistance balances 
responsibilities appropriately.\55\
---------------------------------------------------------------------------

    \54\ GAO, Budgeting for Disasters: Approaches to Budgeting for 
Disasters in Selected States, GAO-15-424, at 17 (March 2015).
    \55\ Id. at 21.
---------------------------------------------------------------------------

    The current situation is contrary to two of FEMA's primary 
objectives when FEMA first formally established the declaration factors 
in regulation in 1999: To encourage States to establish their own 
funded disaster assistance programs and to incentivize States to 
mitigate hazards and obtain insurance coverage, where possible.\56\ 
Moreover, the status quo undermines FEMA's mission to build a more 
prepared and resilient nation by encouraging States to rely on Federal 
assistance when they are capable of being better prepared and more 
resilient on their own.
---------------------------------------------------------------------------

    \56\ See FEMA, Disaster Assistance; Factors Considered When 
Evaluating a Governor's Request for a Major Disaster Declaration, 64 
FR 47697 (Sept. 1, 1999). See also, FEMA, Disaster Assistance; 
Factors Considered When Evaluating a Governor's Request for a Major 
Disaster Declaration, 64 FR 3910, 3911 (Apr. 26, 1999).
---------------------------------------------------------------------------

c. The Current Cost of Assistance Estimates Factor Undermines FEMA's 
Mission To Prepare for and Respond to the Worst Disasters Without Delay
    FEMA's response and recovery operations for numerous and cumulative 
small disasters weaken its ability to quickly respond to and aid 
recovery efforts for larger, or concurrent catastrophic disasters. 
FEMA's incident workforce is historically over-committed to smaller 
disasters, leaving a fraction of the Agency's capacity to prepare for, 
respond to, and recover from complex catastrophes and national security 
emergencies.\57\
---------------------------------------------------------------------------

    \57\ FEMA, 2017 Hurricane Season FEMA After-Action Report, at 23 
(July 12, 2018).
---------------------------------------------------------------------------

    The constraints imposed by numerous and cumulative smaller 
disasters affect the Agency's readiness to support disaster recovery 
operations without unacceptable delays by consuming FEMA staff time and 
resources that would be better used for larger disasters. For example, 
FEMA began the 2017 disaster season with nearly 30 percent of its 
workforce deployed on numerous smaller disasters across the country, 
which then required extraordinary and disruptive measures to reallocate 
and redistribute employees to meet the evolving requirements for 
hurricanes Harvey, Irma, Maria, and the California Wildfires.\58\ When 
Hurricane Harvey made landfall in Texas, FEMA already had 692 open 
disaster and emergency declarations.\59\ Of that total, it had staff 
deployed to 32 disasters across 19 field offices.\60\ Additionally, in 
anticipation of concurrent impacts from Hurricane Irma, FEMA 
transitioned 9 active field offices supporting 13 disasters to regional 
offices prior to their anticipated closure date. The respective FEMA 
regional offices assumed responsibility for supporting these operations 
once the field offices transitioned, requiring FEMA regional staff to 
aid recovery efforts for these disasters in addition to those disasters 
already overseen by the Regional offices, as well as the daily 
operations of the Regional offices.\61\ Of the 298 staff that were 
demobilized from the 9 field offices, FEMA redeployed 182 personnel to 
Hurricanes Harvey, Irma, and Maria within 15 days, 223

[[Page 80724]]

personnel within 30 days, and 242 personnel within 90 days.\62\
---------------------------------------------------------------------------

    \58\ Id.
    \59\ This total includes emergency, major, and fire management 
assistance declarations.
    \60\ FEMA, 2017 Hurricane Season FEMA After-Action Report, at 
14.
    \61\ Id. at 18.
    \62\ Id.
---------------------------------------------------------------------------

    FEMA's responsibilities require it to have the capacity to respond 
in the shortest possible time, under all conditions, and to provide 
adequate staffing and resources for long-term recovery efforts for FEMA 
to successfully accomplish its mission. FEMA needs immediate 
operational availability because complex, no-notice or concurrent 
catastrophes do not provide time to maximize readiness by amassing a 
workforce and extracting response resources from multiple smaller-scale 
commitments. Moreover, FEMA needs proper staffing, resources, and focus 
for the long-term recovery operations for large disasters so that 
affected communities can be repaired and rebuilt and return to normal 
day-to-day life as soon as possible. FEMA is unable to properly meet 
these demands when such a large portion of FEMA's staffing and focus 
are committed to numerous and cumulative smaller disasters that are 
actually, or should be, within the States' capabilities to handle on 
their own.
    As noted in FEMA's After-Action Report for the 2017 Hurricane 
Season, for FEMA to be better positioned for future challenges, State 
and territorial governments should be able to respond to and recover 
from smaller incidents within their capabilities either organically or 
through collaboration with neighboring states and territories. 
Strengthened States and territories, in turn, allow FEMA to preserve 
sufficient capacity to promptly respond to and recover from large, 
complex, or concurrent catastrophes and national security 
emergencies.\63\ However, as noted above, the current per capita 
indicator and minimum threshold disincentivize States from building 
their capabilities to respond to smaller incidents on their own, which 
undermines FEMA's ability to respond to and recover from large, 
complex, or concurrent large disasters, and weakens the preparedness 
and resilience of the Nation. FEMA could be faster and more effective 
in planning for, responding to, and recovering from large catastrophic 
disasters if more of its workforce was able to focus on such large 
disasters, rather than being dispersed to numerous smaller incidents 
more appropriately handled by the States.
---------------------------------------------------------------------------

    \63\ Id. at 23.
---------------------------------------------------------------------------

d. FEMA's Use of the Decennial Census as a Data Source for Population
    FEMA has exclusively relied upon the U.S. Census Bureau's decennial 
census reports on population to calculate State COA indicators since 
the inception of the per capita indicator.\64\ The decennial census is 
a major governmental undertaking that involves canvasing the nation and 
is considered the most-accurate account of the United States population 
at the time it is conducted.\65\ However, the decennial survey is only 
conducted every 10 years. Meanwhile, populations constantly fluctuate 
due to changing circumstances, such as economic growth and downturn, 
relocations driven by disaster, and other factors. In many cases these 
fluctuations are rather de minimis, but occasionally they are not. In 
such instances, as more time elapses after the most recently completed 
decennial census survey, the data from that decennial survey census 
becomes a less and less accurate measure of the current populations. 
Therefore, the Census Bureau uses the Population Estimates Program 
(PEP) to update the populations since the decennial Census was 
collected.
---------------------------------------------------------------------------

    \64\ The Census Bureau's Population Estimates Program (PEP) 
produces annual estimates for years after the last published 
decennial census 2010, as well as for past decades. Existing data 
series such as births, deaths, Federal tax returns, Medicare 
enrollment, and immigration, are used to update the decennial census 
base counts. PEP estimates are used in Federal funding allocations, 
in setting the levels of national surveys, and in monitoring recent 
demographic changes. U.S. Census Bureau, Population and Housing 
Units Estimates: Frequently Asked Questions (available at: https://www.census.gov/programs-surveys/popest/about/faq.html) (last 
accessed April 26, 2019).
    \65\ Also known as the Population and Housing Census, the 
Decennial U.S. Census counts every resident in the United States. It 
is mandated by Article I, Section 2 of the Constitution and takes 
place every 10 years. The data collected by the decennial census 
determine the number of seats each state has in the U.S. House of 
Representatives and is also used to distribute billions in Federal 
funds to local communities. U.S. Census Bureau, Our Surveys & 
Programs: Our Censuses (available at https://www.census.gov/programs-surveys/censuses.html) (last accessed June 26, 2019).
---------------------------------------------------------------------------

    Illustrative of how drastically the decennial census data can 
diverge from the PEP estimates are the cases of Nevada in 2000 and 
Puerto Rico in 2010, showing the greatest increase and greatest 
decrease in population in those periods, respectively. The 2000 
decennial census reported the population of Nevada to be 1,998,257.\66\ 
The 2001 PEP estimate for Nevada was 2,098,399. By 2009, the PEP 
estimate had risen to 2,684,665.\67\ The 2010 decennial census reported 
Nevada's population at 2,700,551. Nevada's population grew by 35 
percent between 2000 and 2010. Consequently, by 2010, the 2000 
decennial census data showed a population for Nevada that was 35 
percent lower than its 2010 population. Comparatively, the 2009 Nevada 
PEP estimate was off by only 0.6 percent from the actual population 
reported in the 2010 decennial survey. Similarly, the 2010 decennial 
census reported the population of Puerto Rico to be 3,725,789.\68\ 
However, by July of 2018, the PEP estimate for Puerto Rico fell to 
3,195,153, a 14 percent decrease.\69\
---------------------------------------------------------------------------

    \66\ U.S. Census Bureau, Report No. DP-1, Profiles of General 
Demographic Characteristics 2000: Census of Population and Housing: 
Nevada (May 2001) (available for download at: https://www2.census.gov/library/publications/2001/dec/2kh32.pdf?#) (last 
accessed April 26, 2019).
    \67\ See U.S. Census Bureau, Intercensal Estimates of the 
Resident Population by Sex, Race and Hispanic Origin for States and 
the United States: April 1, 2000 to July 1, 2010 (available for 
download at: https://www.census.gov/data/tables/time-series/demo/popest/intercensal-2000-2010-state.html) (last accessed April 26, 
2019).
    \68\ Id.
    \69\ U.S. Census Bureau, Puerto Rico Commonwealth Population 
Totals and Components of change: 2010-2018: Annual Estimates of the 
Resident Population for the United States, Regions, States, and 
Puerto Rico: April 2010 to July 2018 (available for download at: 
https//www.census.gov/data/tables/time-series/demo/popest/2010s-total-puerto-rico.html) (last accessed May 2, 2019).
---------------------------------------------------------------------------

    Despite the increasing divergence of past decennial data from 
current populations in out years, FEMA continues to utilize solely 
decennial data for purposes of calculating the State COA indicators. 
Under this approach, FEMA essentially locks-in the population of each 
State until the new decennial census data is collected, analyzed, and 
reported. In monetary terms, FEMA's choice to rely solely on decennial 
population values can impact the State COA indicator for a State whose 
population is quickly changing.
    Nevada and Puerto Rico again provide illustrative examples of this 
effect. In 2009, the PA per capita indicator was $1.31.\70\ Based on 
the 2000 decennial population that FEMA was still utilizing in 2009, 
Nevada's State COA indicator in 2009 was $2,617,717.\71\ Even if FEMA 
made no changes to the underlying State COA indicator formula other 
than substituting the 2009 PEP population estimate for the 2000 
decennial census population estimate, Nevada's State COA indicator 
would have risen to $3,516,911.\72\ That results in a difference of 
$899,194. Thus, continuing to utilize the static 2000 decennial census 
figures in 2009 undervalues Nevada's State COA indicator by 34 percent. 
With respect to Puerto Rico, based on the 2010 decennial census data 
that FEMA currently utilizes, Puerto Rico's FY 2019 State COA indicator 
is $5,588,684.\73\ Assuming no changes to the underlying per capita 
indicator

[[Page 80725]]

formula other than substituting 2018 PEP population estimate for the 
2010 decennial census population estimate, Puerto Rico's State COA 
indicator would be $4,792,730,\74\ or a difference of $795,954. Thus, 
continuing to utilize the 2010 decennial census figures in 2019 
overvalues Puerto Rico's State COA indicator by 14 percent.
---------------------------------------------------------------------------

    \70\ 73 FR 60303 (Oct. 10, 2008).
    \71\ Calculation: 1,998,257 x $1.31 = $2,617,717.
    \72\ Calculation: 2,684,665 x $1.31 = $3,516,911.
    \73\ Calculation: 3,725,789 x $1.50 = $5,588,684.
    \74\ Calculation: 3,195,153 x $1.50 = $4,792,730.
---------------------------------------------------------------------------

    As shown above, FEMA's reliance on population data from the most 
recent decennial survey can lead to an imprecise assessment of a 
State's population. Using PEP estimates will provide more up-to-date 
population information and allow for more accurate analysis.

B. Localized Impacts and Multiple Disasters

    In addition to estimating the cost of assistance for a disaster, 
pursuant to 44 CFR 206.48(a)(1), FEMA also considers a variety of other 
factors when reviewing a request for a major disaster declaration 
authorizing PA. While the cost of assistance estimates factor is often 
the greatest indicator of whether FEMA will recommend that the 
President issue a major disaster declaration, that factor alone does 
not automatically mean a denial if the State does not meet it, nor does 
it guarantee a declaration if the State does meet it.\75\ Rather, FEMA 
considers each factor to better evaluate the unique circumstances or 
needs created by each incident.\76\
---------------------------------------------------------------------------

    \75\ 64 FR 47697. See also 64 FR 3911.
    \76\ 64 FR 47697. See also 64 FR 3911.
---------------------------------------------------------------------------

    Two of the factors that FEMA considers in reviewing a Governor's 
request are the recent disasters in an area, and the localized impacts 
of a disaster.\77\ With respect to recent disasters, FEMA considers the 
disaster history within the last 12-month period to better evaluate the 
overall impact on the State or locality. FEMA considers declarations 
under the Stafford Act as well as declarations by the Governor and the 
extent to which the State has spent its own funds. With respect to 
localized impacts, FEMA considers the impact of the incident at the 
county and local government level, as well as impacts at the American 
Indian and Alaskan Native Tribal Government levels, because at times 
there are extraordinary concentrations of damages that might overwhelm 
State capabilities even if the State COA indicator is not met, 
especially where critical facilities are involved or where localized 
per capita impacts might be extremely high. For example, at times 
localized damage may be in the tens or even hundreds of dollars per 
capita, though the statewide per capita impact was low.
---------------------------------------------------------------------------

    \77\ 44 CFR 206.48(a)(2) & (5).
---------------------------------------------------------------------------

    In recent years, some members of Congress have expressed concern 
that the President has denied declarations that were warranted because 
of other recent disasters in the area and localized impacts, 
particularly where the impact is limited to the rural or sparsely 
populated areas of a high population State and the estimated costs of 
the incident do not exceed the State COA indicator. Section 1232 of the 
DRRA requires the Administrator of FEMA to give greater consideration 
to recent multiple disasters or severe localized impacts when making 
disaster declaration recommendations to the President, and to make 
corresponding adjustments to FEMA's policies and regulations regarding 
such consideration.
    The existing recent multiple disasters provision in FEMA's 
regulations is broad with respect to how much consideration the 
Administrator gives to disasters in the previous 12 months. Consistent 
with that provision and with FEMA's May 1 guidance to Regional 
Administrators, directing them to include in their recommendations 
appropriate and fulsome information regarding severe local impacts and 
the history of recent multiple disasters,\78\ FEMA is giving greater 
consideration to these factors when making disaster declaration 
recommendations. Accordingly, FEMA does not propose to substantively 
amend 44 CFR 206.48(a)(5), but requests comment on whether the 12-month 
time limit currently in place is sufficient to address this factor as 
required by the DRRA. Similarly, FEMA proposes not to substantively 
amend the current regulatory text for the localized impacts factor in 
Sec.  206.48(a)(2). FEMA believes that the current regulatory text 
enables FEMA to provide adequate consideration of local impacts while 
ensuring that FEMA does not over step the statutory requirement that an 
event be beyond State capability. FEMA also does not propose at this 
time to substantively amend the other declaration factors at 44 CFR 
206.48(a)(3) (``Insurance coverage in force''), (4) (``Hazard 
mitigation''), and (6) (``Programs of other Federal assistance''). The 
current regulatory text for these factors already provides for adequate 
consideration of important information for FEMA assessment of a State's 
capabilities to respond to an event, while also providing sufficient 
flexibility for FEMA to account for a variety of circumstances across 
the States. However, FEMA is proposing minor technical and grammatical 
changes to all of Sec.  206.48(a).
---------------------------------------------------------------------------

    \78\ Memorandum for Regional Administrators from Jeff Byard, 
Associate Administrator, Office of Response and Recovery, 
Declaration Factors for Local Impact and Recent Multiple Disasters 
(May 1, 2019).
---------------------------------------------------------------------------

IV. Discussion of the Proposed Rule

    FEMA proposes to revise the ``Estimated cost of the assistance'' 
factor in 44 CFR 206.48(a)(1) by increasing the per capita indicator to 
account for inflation from 1986 to 1999 and adjusting the individual 
States' indicators by their total taxable resources (TTR),\79\ and by 
increasing the minimum threshold by accounting for inflation from 1999 
to 2019, and annually thereafter. These changes would provide FEMA with 
a better informed and more accurate assessment of whether an incident 
has exceeded State capabilities when it makes its recommendations to 
the President; incentivize States to invest more in response, recovery, 
and mitigation capabilities, which would provide a better distribution 
of responsibilities between the States and the Federal Government and 
better overall national preparedness for disasters; and the associated 
reductions in declarations of small incidents would allow FEMA to 
better focus its efforts and resources on large disasters without the 
complications of reallocating resources from multiple smaller-scale 
commitments.
---------------------------------------------------------------------------

    \79\ As discussed more below, FEMA will not adjust the District 
of Columbia's per capita indicator for TTR because of the unique tax 
and Federal funding circumstances in the District, as well as 
Congress' control over the ability of the District to manipulate its 
own revenues. Additionally, FEMA will not adjust the territories' 
per capita indicators for TTR because Treasury does not report TTR 
for the territories.
---------------------------------------------------------------------------

    Additionally, FEMA also proposes to use the U.S. Census Bureau's 
annual population estimates produced under the Population Estimates 
Program (PEP) instead of the decennial census population data. Using 
the U.S. Census Bureau's annual PEP data instead of the decennial 
census data would ensure a more accurate assessment of an individual 
State's population, which would better enable FEMA to achieve its 
readiness and preparedness missions by allowing FEMA to expend more 
attention and resources on incidents that actually exceed the States' 
capabilities.
    Importantly, this proposed rule does not affect disaster 
declaration requests received directly from Tribal governments under 
the Tribal

[[Page 80726]]

Declarations Pilot Guidance, or any of the criteria contained in that 
guidance.\80\
---------------------------------------------------------------------------

    \80\ FEMA, Tribal Declarations Pilot Guidance, available at: 
https://www.fema.gov/tribal-declarations-pilot-guidance. Notice of 
availability published at 82 FR 3016 (Jan. 10, 2017).
---------------------------------------------------------------------------

    FEMA also proposes minor technical and corresponding grammatical 
changes to the introductory paragraph of Sec.  206.48 and all of 
paragraph (a) to ensure consistent language throughout this section.

A. 44 CFR 206.48(a)(1)--Adjusting the Per Capita Indicator

1. Increasing the Per Capita Indicator To Account for Inflation Between 
1986 and 1999
    FEMA proposes to increase the per capita indicator from a FY 2019 
value of $1.50,\81\ to $2.32 (rounded), to account for increases to the 
Consumer Price Index for All Urban Consumers (CPI-U) between 1986 and 
1999.\82\ FEMA would continue to adjust the per capita indicator 
annually to reflect changes in the CPI-U, as is current practice. This 
would establish the baseline per capita indicator which FEMA would 
further adjust for each State, as described below.
---------------------------------------------------------------------------

    \81\ The FY2019 per capita indicator was the most current per 
capita indicator at the time that this proposed rule was written.
    \82\ Using August 1986 and 1999 CPI-U historical data.
---------------------------------------------------------------------------

    The CPI-U is calculated and published by the U.S. Department of 
Labor, Bureau of Labor Statistics,\83\ and uses the period of 1982 to 
1984 as the base level where the CPI-U = 100. Current FEMA practice is 
to update the per capita indicator each fiscal year using the latest 
available month of CPI-U data. Since the per capita indicator is 
reported for the fiscal year and is published each October, the latest 
available CPI-U data is August data published in September each year. 
To maintain consistency with how FEMA updates the per capita indicator, 
FEMA calculated the inflation adjustment by comparing the April CPI-U 
for the base year 1986 (108.60) with the August CPI-U for 2018 
(252.146). At the time of this analysis, August 2018 CPI-U data was the 
most recently available August CPI-U data available. This resulted in 
an inflation adjustment factor of 2.322.\84\ FEMA then multiplied the 
inflation adjustment factor of 2.322 by the original per capita 
indicator of $1.00 to find a base per capita indicator of $2.32 
(rounded).
---------------------------------------------------------------------------

    \83\ BLS Archived Consumer Price Index Supplemental Files 
(available for download at: https://www.bls.gov/CPI-U/tables/supplemental-files/home.htm). Data was taken from the Historical 
CPI-U, February 2019 publication.
    \84\ Calculation: $1 + (252.146-108.60)/108.60 = $2.322 
(rounded).
---------------------------------------------------------------------------

    Moving forward, once FEMA increases the indicator for the 1986-1999 
inflationary adjustments, the continued practice of adjusting the 
indicator to account for changes in the CPI-U would continue to ensure 
that the indicator keeps pace with inflation. This would lead to 
reductions in the number and frequency of future major disaster 
declarations, and decreases in Federal costs of disaster assistance, by 
having States take responsibility for costs that are within their 
capability to manage.
    Much like FEMA's decision in 1999 to set the per capita indicator 
at $1 and begin adjusting for inflation, rather than PCPI,\85\ the 
current proposed change (to increase the per capita indicator for 
inflation between 1986 and 1999) provides a simple, clear, consistent, 
and long standing means of evaluating the size of a disaster relative 
to the size of the State, while also decreasing the number and 
frequency of disaster declarations, and decreasing Federal disaster 
costs. Moreover, increasing the per capita indicator to account for 
inflation from 1986 to 1999 would be more reflective of current dollar 
values, and would better enable FEMA to achieve its readiness and 
preparedness missions because FEMA would be able to apply more 
attention and resources to large catastrophic incidents as less FEMA 
focus and resources would be needed for smaller incidents actually 
within the States' capabilities.
---------------------------------------------------------------------------

    \85\ See 64 FR 47697 (Sept. 1, 1999).
---------------------------------------------------------------------------

2. Adjusting the Increased Per Capita Indicator for Total Taxable 
Resources
    In addition to increasing the per capita indicator to account for 
inflation from 1986 to 1999, FEMA proposes to adjust the increased, 
baseline per capita indicator for a State's TTR to set an indicator 
that better recognizes a State's actual fiscal capability.
    The TTR of the State is a publicly available annual estimate of the 
relative fiscal capacity of a State, calculated by the U.S. Department 
of Treasury (Treasury).\86\ Treasury defines TTR as the unduplicated 
sum of the income flows produced within a State and the income flows, 
received by its residents, which a State could potentially tax.\87\ TTR 
includes much of the business income that does not become part of the 
income flow to jurisdiction residents, as well as undistributed 
corporate profits, and rents and interest payments made by businesses 
to out-of-jurisdiction real estate owners and lenders.\88\ TTR does not 
consider the actual fiscal choices made by the States, but rather, it 
reflects their potential resources and is an indicator of a State's 
broader economy.\89\ In summary, TTR is a flow concept, meaning it is a 
comprehensive measure of all the income flows a State can potentially 
tax.\90\ Treasury bases its calculation of the TTR on the Gross State 
Product (GSP) and State personal income,\91\ accounting for the 
earnings of State residents who work outside the State borders, 
dividend and monetary interest income earned from sources outside of 
the State, select transfers from the Federal Government, and net 
realized capital gains. The following components of GSP were not 
available to States to tax and hence subtracted from GSP: Federal 
indirect business taxes, employer and employee contributions to social 
insurance, and Federal civilian enterprises surplus/deficit.\92\
---------------------------------------------------------------------------

    \86\ Treasury updates TTR data annually with a 2-year lag in the 
data, available at https://home.treasury.gov/policy-issues/economic-policy/total-taxable-resources.
    \87\ Dep't of Treasury, Office of Economic Policy, Treasury 
Methodology for Estimating Total Taxable Resources, at 2 (Revised 
Nov. 2002) (available for download at: https://www.treasury.gov/resource-center/economic-policy/Documents/nmpubsum.pdf).
    \88\ See Id. at 1-4.
    \89\ See Id. at 2.
    \90\ Id.
    \91\ Id. at 2-3.
    \92\ See Id. at 1-4.
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    Consideration of TTR as an indicator of State fiscal capacity is 
also consistent with FEMA's recent rulemaking revising the factors 
considered when evaluating requests for Individual Assistance (IA). The 
revised regulations for evaluating requests for IA (44 CFR 206.48(b)) 
use TTR as the main indicator of a State's fiscal capacity to provide 
IA.\93\
---------------------------------------------------------------------------

    \93\ FEMA, Factors Considered When Evaluating a Governor's 
Request for Individual Assistance for a Major Disaster, 84 FR 10632 
(March 21, 2019). The revised IA regulations also allow States to 
submit information regarding State GDP and local per capita personal 
income, as well as other limiting factors, which FEMA may use as an 
alternative or supplemental evaluation method to TTR from which to 
measure a State's fiscal capacity to provide IA in response to a 
disaster. See 44 CFR 206.48(b)(1)(i)(A)-(C).
---------------------------------------------------------------------------

    FEMA considered other potential alternatives for adjusting the per 
capita indicator to better measure a State's financial capabilities, 
including State GDP (i.e., the total value of the goods and services 
produced within the State in a particular year); State Total Actual 
Revenues (TAR) (i.e., the amount of revenue a particular State actually 
raises in a typical year); and a composite index of per capita TTR, per 
capita surplus/deficit, per capita reserve funding, and the State's 
bond rating. State GDP and TAR are strongly correlated with TTR;

[[Page 80727]]

however, TTR, as a measure of potential, does not suffer from 
complications of political choice in TAR or GDP that result from 
differences between States in State tax obligations and the services 
for which tax dollars are allocated. Accordingly, given the correlation 
between the three, and the policy-neutrality of TTR, FEMA believes that 
TTR is the best measure of a State's financial capabilities by which to 
adjust the baseline per capita indicator.
    Under the composite index approach, FEMA would average the four 
fiscal capacity indices and use the final figure to adjust each State's 
per capita indicator. This type of analysis was previously considered 
for use in FEMA's Establishing a Deductible for FEMA's Public 
Assistance Program Supplemental Advance Notice of Proposed Rulemaking 
(Deductible ANPRM).\94\ The Deductible ANPRM was an earlier attempt to 
address the issue of underestimating States' fiscal capacity when 
recommending disaster declarations, and the four-part composite index 
analysis was part of the reason the deductible was eventually rejected. 
Public comments received on the Deductible ANPRM made clear that State 
and local stakeholders were uncomfortable with the complexity of the 
four-factor analysis; although it is more in-depth and could 
potentially produce more accurate assessments of States' fiscal 
capacities, the analysis is also a substantially more complicated 
framework for States and PA sub-recipients to adapt to and plan around. 
FEMA decided against using it here for these same reasons. FEMA 
believes adjusting the per capita indicator only by TTR strikes an 
appropriate balance between improving the fiscal capacity analysis by 
considering more than simply a State's population, and not burdening 
States with an overly complicated formula that slows implementation of 
the new framework.
---------------------------------------------------------------------------

    \94\ 82 FR 4064, 4072 (Jan. 12, 2017).
---------------------------------------------------------------------------

    Based on the above, FEMA believes that adjusting the baseline per 
capita indicator for TTR would result in a more realistic estimate of a 
State's financial capability. As previously discussed, adjusting the 
per capita indicator to adjust for inflation using the CPI-U between 
1986 and 1999 would provide a more accurate measurement of the current 
costs of response and recovery, as well as changing present value of 
the dollar. Adjusting the indicator based on a State's TTR would 
provide additional accuracy in gauging a State's fiscal capacity by 
accounting for taxable resources other than the State's population, 
such as business income, undistributed corporate profits, and resident 
earnings from out-of-state employment. This approach also aligns with 
the recommendations of DHS OIG and GAO, Congress' direction in section 
1239 of the DRRA, as well as the Stafford Act and FEMA's Strategic 
Plan, by ensuring that Federal assistance supplements State and local 
efforts when State and local capabilities have been exceeded, rather 
than supplanting resources that a State is financially capable of 
providing on its own.
    Treasury reports TTR in three formats: billions of dollars, dollars 
per capita, and the per capita index. To adjust for TTR, FEMA would use 
1/100th of the TTR per capita index, which is calculated relative to 
the national average TTR for a given year, where a TTR per capita index 
of 100 represents the national average. For example, if a State had a 
TTR per capita index of 101, FEMA would multiply the baseline indicator 
by 1.01 to adjust (e.g., $2.32 x 1.01 = $2.34). FEMA would use the most 
recent TTR data available. Using 2018 published data, the minimum per 
capita indicator adjusted for TTR would be $1.52 (Mississippi, $2.32 x 
.655 = $1.52) and the maximum per capita indicator adjusted for TTR 
would be $3.17 (Connecticut, $2.32 x 1.368 = $3.17).\95\
---------------------------------------------------------------------------

    \95\ U.S Dept. of Treasury, 2018 Total Taxable Resources 
Estimates (2018), https://home.treasury.gov/system/files/226/TTR-tables-2018.pdf.
---------------------------------------------------------------------------

    FEMA believes that this method is the clearest and simplest method 
of utilizing the reported formats of TTR.\96\ If FEMA were to use one 
of the other reported formats of TTR, FEMA would need to set a 
percentage of State total TTR in billions of dollars or State TTR per 
capita that would be appropriate for measuring a State's fiscal 
capability for responding to an incident, or FEMA would need to devise 
a formula by which to obtain a number that would adjust the baseline 
per capita indicator. FEMA believes that such changes could be 
difficult to implement on an annual basis, would be overly complex, and 
could result in confusion for stakeholders.\97\ In contrast, much like 
the adjustment to the baseline per capita indicator, FEMA believes that 
the proposed method of adjusting for TTR provides the simplest, 
clearest, and most workable method by which to adjust the per capita 
indicator in order to ensure that FEMA accurately measures a State's 
financial capabilities.
---------------------------------------------------------------------------

    \96\ The GAO recommended the same approach to use a fiscal index 
to adjust the per capita indicator. GAO, GAO 12-838 at 71-72.
    \97\ Notably, the revisions to the regulations governing 
requests for IA included the ability for States to submit 
information on their GDP and local per capita personal income (PCPI) 
which FEMA may use as a supplemental or alternative factor to TTR 
when measuring a State's fiscal capacity to provide IA. See 44 CFR 
206.48(b)(1). While such data may be useful in the IA context, it is 
less so in the PA context. First, FEMA notes that the use of State 
GDP and local PCPI are only as potential supplemental or alternative 
data points for fiscal capacity; TTR is still the preeminent factor 
for determining fiscal capacity for IA requests. Second, the IA 
program does not use a per capita indicator like the PA program, nor 
does it use any adjustment factors such as the proposed rule. 
Accordingly, if FEMA were to incorporate State GDP and local PCPI, 
along with TTR, into its consideration of PA requests, it would need 
to create a formula to adjust the per capita indicator, which would 
add complexity to the per capita indicator with little benefit given 
that TTR already incorporates a measure of a State's GDP and 
personal income. Moreover, States may submit data on their GDP or 
local PCPI to supplement their request for a PA declaration, since 
FEMA may consider information in addition to the factors in 44 CFR 
206.48(a) to the extent that it further informs FEMA's 
recommendation to the President.
---------------------------------------------------------------------------

    As shown in Table 1, the individual States' per capita indicators 
would range from $1.51 to $3.15. Every State's per capita indicator 
would increase due to the adjustment for increases to the CPI-U from 
1986 and 1999. However, adjusting for TTR would decrease 29 States' per 
capita threshold from the base amount, 20 States would see an increase 
in their per capita indicator threshold, and 7 States would still have 
a $2.32 adjusted per capita indicator.\98\
---------------------------------------------------------------------------

    \98\ As noted above, FEMA is not proposing to use TTR data for 
the territories and DC. South Dakota had a TTR of 100 in 2018.
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    FEMA proposes not to adjust the District of Columbia's per capita 
indicator for TTR. The complex tax and Federal appropriation 
circumstances in the District of Columbia, as well as Congress' control 
over the ability of the District to manipulate its own revenues, would 
require impractical and potentially inaccurate adjustments in the TTR 
method. For example, Federal law prohibits the District from taxing 
non-resident commuters. Additionally, evaluating the District of 
Columbia's TTR is further complicated by the direct Federal oversight 
and appropriation of the District's budget. Accordingly, TTR does not 
provide the additional accuracy in determining the District's financial 
capability as it does for the States. Therefore, FEMA would use the 
increased per capita indicator to determine the District's per capita 
threshold, without adjusting for TTR. FEMA specifically requests 
comment on possible alternatives to this approach that would improve 
the accuracy of FEMA's fiscal capacity analysis for the District.
    Additionally, FEMA is not proposing to adjust the per capita 
indicator for TTR for the territories because Treasury

[[Page 80728]]

does not report TTR for the territories.\99\ This would result in the 
territories having the same per capita threshold as the average State, 
which may in practice be an over-estimation of the territories' fiscal 
capacity. However, without a published TTR to use, adopting the same 
approach proposed here for the States simply is not an option. FEMA 
requests comment on alternative approaches that would improve FEMA's 
fiscal capacity analysis for the territories. One such alternative, on 
which FEMA requests comment, would be to adjust the per capita 
indicator for the territories by the lowest TTR reported for any of the 
States.
---------------------------------------------------------------------------

    \99\ The territories for which Treasury does not report TTR 
include: American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, Puerto Rico and the U.S. Virgin Islands.
---------------------------------------------------------------------------

3. Using Annual Population Data To Calculate the States' COA Indicator
    FEMA proposes to use the U.S. Census Bureau's annual population 
estimates produced under PEP instead of the decennial census population 
data when calculating the State COA indicator. PEP produces annual 
estimates for years after the last published decennial census, as well 
as for past decades. The Census Bureau uses existing data series such 
as births, deaths, Federal tax returns, Medicare enrollment, and 
immigration to update the decennial census base counts. PEP estimates 
are used in Federal funding allocations, in setting the levels of 
national surveys, and in monitoring recent demographic changes.\100\ As 
years pass since the most-recent decennial survey, the PEP estimates 
bear less relation to the previous numbers and adopt a stronger 
correlation to the results of the next decennial survey. In other 
words, as more time elapses between the most recently completed 
decennial survey and the next decennial survey, the PEP estimates 
become more current measures of the States' populations than the most 
recently conducted decennial survey.
---------------------------------------------------------------------------

    \100\ U.S. Census Bureau, Population and Housing Units 
Estimates: Frequently Asked Questions (available at: https://www.census.gov/programs-surveys/popest/about/faq.html) (accessed 
April 26, 2019).
---------------------------------------------------------------------------

    Using the annual PEP data instead of data from the most recent 
decennial census would provide a more contemporaneous measure of a 
State's population to use in FEMA's calculation of State COA 
indicators. As shown in the examples of Nevada and Puerto Rico, use of 
decennial census data can lead to inaccurate assessments of a State's 
current population. Using the U.S. Census Bureau's annual PEP data 
instead of the decennial census data would ensure a more current 
assessment. Using the PEP data would better enable FEMA to achieve its 
readiness and preparedness missions because FEMA would be able to 
expend more attention and resources to large catastrophic incidents 
since less FEMA focus and resources would be needed for smaller 
incidents within the States' capabilities.
4. State COA Indicators After Accounting for Proposed Changes
    The following table shows for each State: (1) The most recent TTR 
per capita index (2016),\101\ (2) the proposed State per capita 
indicator after adjusting for inflation and TTR, (3) State population 
from the most recent PEP estimates (2018),\102\ (4) the resultant 
proposed State COA indicators, (5) the FY2019 State COA indicators 
based on the FY2019 per capita indicator ($1.50) \103\ and 2010 
decennial census data, and (6) the difference between the proposed and 
baseline State COA indicators.
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    \101\ The Treasury Department publishes updated TTR per capita 
indices two years after the year in question. The most recent data 
available at the time of this analysis was 2016 data.
    \102\ PEP estimates are released in July each year covering the 
previous year and all other years back to the last decennial census. 
At the time of this analysis, the data for 2018 was the most recent 
data available.
    \103\ FEMA publishes updated per capita indicators in the 
Federal Register each year, with FY 2019 being the most recent data 
available at the time of this analysis. If this proposed change were 
adopted, FEMA's annual publication in the Federal Register would 
include a list of TTR-adjusted per capita indicators and COA 
indicators for each State.

                                                         Table 1--Proposed State COA Indicators
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Proposed state
                                                            per capita    PEP population  Proposed state   FY 2019 state
                  State                      2016 TTR        indicator       estimate     COA indicators        COA       Difference (A-  Percent change
                                           (percentage)     (2016 TTR *       (2018)            (A)        indicators--         B)
                                                              $2.32)                                       baseline (B)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................            73.7           $1.71       4,887,871      $8,358,259      $7,169,604      $1,188,655            16.6
Alaska..................................           110.5            2.56         737,438       1,887,841       1,065,347         822,494            77.2
Arizona.................................            76.6            1.78       7,171,646      12,765,530       9,588,026       3,177,504            33.1
Arkansas................................            74.2            1.72       3,013,825       5,183,779       4,373,877         809,902            18.5
California..............................           114.2            2.65      39,557,045     104,826,169      55,880,934      48,945,235            87.6
Colorado................................             102            2.37       5,695,564      13,498,487       7,543,794       5,954,693            78.9
Connecticut.............................           136.8            3.17       3,572,665      11,325,348       5,361,146       5,964,202           111.2
District of Columbia....................             100            2.32         967,171       2,243,837         902,585       1,341,252           148.6
Delaware................................           131.7            3.06         702,455       2,149,512       1,346,901         802,611            59.6
Florida.................................            85.4            1.98      21,299,325      42,172,664      28,201,965      13,970,699            49.5
Georgia.................................            87.3            2.03      10,519,475      21,354,534      14,531,480       6,823,054            47.0
Hawaii..................................              99            2.30       1,420,491       3,267,129       2,040,452       1,226,677            60.1
Idaho...................................            74.5            1.73       1,754,208       3,034,780       2,351,373         683,407            29.1
Illinois................................           108.4            2.51      12,741,080      31,980,111      19,245,948      12,734,163            66.2
Indiana.................................            90.7            2.10       6,691,878      14,052,944       9,725,703       4,327,241            44.5
Iowa....................................           102.5            2.38       3,156,145       7,511,625       4,569,533       2,942,092            64.4
Kansas..................................            96.3            2.23       2,911,505       6,492,656       4,279,677       2,212,979            51.7
Kentucky................................            76.6            1.78       4,468,402       7,953,756       6,509,051       1,444,705            22.2
Louisiana...............................            85.8            1.99       4,659,978       9,273,356       6,800,058       2,473,298            36.4
Maine...................................            79.6            1.85       1,338,404       2,476,047       1,992,542         483,505            24.3
Maryland................................           117.2            2.72       6,042,718      16,436,193       8,660,328       7,775,865            89.8
Massachusetts...........................           130.4            3.03       6,902,149      20,913,511       9,821,444      11,092,067           112.9
Michigan................................            85.6            1.99       9,995,915      19,891,871      14,825,460       5,066,411            34.2
Minnesota...............................             105            2.44       5,611,179      13,691,277       7,955,888       5,735,389            72.1
Mississippi.............................            65.5            1.52       2,986,530       4,539,526       4,450,946          88,580             2.0
Missouri................................            86.1            2.00       6,126,452      12,252,904       8,983,391       3,269,513            36.4
Montana.................................            80.2            1.86       1,062,305       1,975,887       1,484,123         491,764            33.1
Nebraska................................           107.1            2.48       1,929,268       4,784,585       2,739,512       2,045,073            74.7

[[Page 80729]]

 
Nevada..................................            91.9            2.13       3,034,392       6,463,255       4,050,827       2,412,428            59.6
New Hampshire...........................           112.9            2.62       1,356,458       3,553,920       1,974,705       1,579,215            80.0
New Jersey..............................           122.8            2.85       8,908,520      25,389,282      13,187,841      12,201,441            92.5
New Mexico..............................              76            1.76       2,095,428       3,687,953       3,088,769         599,184            19.4
New York................................             132            3.06      19,542,209      59,799,160      29,067,153      30,732,007           105.7
North Carolina..........................            86.4            2.00      10,383,620      20,767,240      14,303,225       6,464,015            45.2
North Dakota............................           119.8            2.78         760,077       2,113,014       1,008,887       1,104,127           109.4
Ohio....................................            91.6            2.13      11,689,442      24,898,511      17,304,756       7,593,755            43.9
Oklahoma................................            80.7            1.87       3,943,079       7,373,558       5,627,027       1,746,531            31.0
Oregon..................................            95.7            2.22       4,190,713       9,303,383       5,746,611       3,556,772            61.9
Pennsylvania............................           100.4            2.33      12,807,060      29,840,450      19,053,569      10,786,881            56.6
Rhode Island............................           101.9            2.36       1,057,315       2,495,263       1,578,851         916,412            58.0
South Carolina..........................            75.5            1.75       5,084,127       8,897,222       6,938,046       1,959,176            28.2
South Dakota............................             100            2.32         882,235       2,046,785       1,221,270         825,515            67.6
Tennessee...............................            84.9            1.97       6,770,010      13,336,920       9,519,158       3,817,762            40.1
Texas...................................            96.6            2.24      28,701,845      64,292,133      37,718,342      26,573,791            70.5
Utah....................................            87.4            2.03       3,161,105       6,417,043       4,145,828       2,271,215            54.8
Vermont *...............................            91.7            2.13         626,299       1,334,017         938,612         395,405            42.1
Virginia................................           105.1            2.44       8,517,685      20,783,151      12,001,536       8,781,615            73.2
Washington..............................             116            2.69       7,535,591      20,270,740      10,086,810      10,183,930           101.0
West Virginia...........................              72            1.67       1,805,832       3,015,739       2,779,491         236,248             8.5
Wisconsin...............................            95.4            2.21       5,813,568      12,847,985       8,530,479       4,317,506            50.6
Wyoming.................................           117.9            2.74         577,737       1,582,999         845,439         737,560            87.2
Puerto Rico.............................             100            2.32       3,195,153       7,412,755       5,588,684       1,824,071            32.6
American Samoa *........................             100            2.32          55,519         128,804          83,279          45,525            54.7
Guam *..................................             100            2.32         159,358         369,711         239,037         130,674            54.7
Northern Mariana Islands *..............             100            2.32          44,943         104,268          67,415          36,853            54.7
Virgin Islands *........................             100            2.32         106,405         246,860         159,608          87,252            54.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These jurisdictions are subject to the current $1 million minimum threshold because the State COA indicator falls beneath the minimum threshold.

B. 44 CFR 206.48(a)(1)--Adjusting the $1 Million Minimum Threshold for 
Inflation

    FEMA proposes to increase the minimum threshold in the cost of 
assistance estimates factor to account for inflation from 1999, and to 
adjust the threshold using CPI-U annually hereafter. The proposed rule 
would increase the current minimum threshold from $1 million to $1.535 
million for FY 2019.\104\ As noted above, FEMA has never increased the 
minimum threshold since it established the threshold in 1999, despite a 
51 percent increase in the CPI-U and corresponding rises in the costs 
to respond to incidents, as well as rises in State GDP, expenditures, 
and TTR. Accordingly, while FEMA believed in 1999 that $1 million was a 
reasonable amount for even the least populous States and Territories to 
handle on their own, FEMA believes that the $1 million minimum 
threshold may no longer be an accurate benchmark of the least populous 
States' and Territories' capabilities to respond to incidents. Based on 
the rises in State and Territories' GDP, expenditures, and TTR, FEMA 
believes that States and Territories should be able to handle the 
increased minimum threshold.
---------------------------------------------------------------------------

    \104\ FEMA calculated the inflation adjustment by comparing the 
January CPI-U for the base year 1999 (164.3) with the August CPI-U 
for 2018 (252.146). This resulted in an inflation adjustment factor 
of 1.535. FEMA then multiplied the inflation adjustment factor of 
1.535 by the original minimum threshold of $1 million to find a 
minimum threshold of $1,535,000 (rounded).
---------------------------------------------------------------------------

    With the proposed changes to the per capita indicator and the 
minimum threshold, Vermont, and the territories of the U.S. Virgin 
Islands, Guam, American Samoa, and the Commonwealth of the Northern 
Mariana Islands would have State COA indicators that would fall below 
the proposed minimum threshold.\105\ Accordingly, these jurisdictions 
would be subject to the $1.535 million minimum threshold.
---------------------------------------------------------------------------

    \105\ As shown in Table 1 above, with the proposed changes to 
the per capita indicator, Vermont's State COA indicator would be 
just over $1.30 million. Each of the noted territorial jurisdictions 
COA indicators fall well below the proposed $1.535 million minimum 
threshold. Therefore, under this proposed rule, in cases where the 
estimated cost of assistance meets or exceeds the COA indicators for 
Vermont or the territorial jurisdictions, but is less than the 
$1.535 million minimum threshold, the minimum threshold would apply, 
and the estimated cost of assistance for the State or Territory 
would have to meet this higher amount. FEMA anticipates that these 
territorial jurisdictions will generally be subject to the annual 
minimum threshold year to year due to their small populations.
---------------------------------------------------------------------------

    Importantly, by accounting for increases to the CPI-U since 1999 
and annually moving forward, the minimum threshold would be more 
representative of current dollar values and be a more accurate 
indicator of the least populous States' capabilities to respond to 
incidents. The reduction in disaster declarations would keep FEMA from 
expending resources and attention on incidents within the States' 
capabilities, allowing FEMA to better prepare for large, catastrophic 
incidents. A higher minimum threshold would incentivize less populous 
States and Territories to build their response and recovery 
capabilities and mitigate the hazards of future incidents.
    In addition to analyzing the effects of increasing the minimum 
threshold to account for CPI-U from 1999, FEMA analyzed several 
alternatives to increasing the minimum threshold. The full results of 
the analysis are presented in the RIA. FEMA analyzed increases since 
1999 in State general fund expenditures (which were used as a partial 
basis for the $1 per capita indicator set in 1986), State TTR, and 
State GDP, as potential alternatives to the proposed action.
    FEMA also analyzed whether its administrative costs for past 
smaller disasters demonstrated a threshold for which FEMA's 
administrative burden exceeded the amount of Federal assistance 
provided. In other words, instances in which FEMA's cost to deliver the 
assistance may have exceeded the cost of the assistance provided. 
Administrative costs include

[[Page 80730]]

disaster-related personnel costs such as salaries, benefits, and 
travel; the cost of tasking another Federal agency to support 
operations (mission assignments); technical assistance contracts 
associated with the execution of the PA program; and, general 
administrative costs such as leases, communications, supplies, and 
equipment that are incurred from declaration to disaster closure.\106\ 
Given the broad scope of items included in administrative costs, 
particularly related to personnel, administrative costs are a good 
representation of the overall Federal resources and attention that are 
expended on a given disaster.
---------------------------------------------------------------------------

    \106\ Administrative costs do not include program costs 
associated with mission assignments for Direct Federal Assistance, 
Urban Search and Rescue costs, and all other program deliverables 
and assistance such as grants to survivors.
---------------------------------------------------------------------------

    Based on the analysis of alternatives, FEMA believes that 
increasing the minimum threshold to account for post-1999 increases to 
CPI-U is the best alternative for raising the minimum threshold because 
the other alternatives would increase the complexity of setting the 
minimum threshold, with few, if any, additional benefits. As explained 
in the stand-alone RIA found in the docket of this rulemaking,\107\ 
while the other alternatives may result in modest gains in reducing 
disaster declarations and Federal expenditures, those gains would be 
outweighed by the complexity that FEMA and stakeholders would encounter 
in implementing these other alternatives. Importantly, however, in 
addition to increases in the CPI-U, the increases in State 
expenditures, GDP, and TTR, and FEMA's average administrative costs for 
small disasters collectively demonstrate that the current $1 million 
threshold is no longer an accurate benchmark for the States' 
capabilities to respond to disasters on their own. Therefore, based on 
the totality of this information, FEMA believes an increase to the 
minimum threshold is necessary.
---------------------------------------------------------------------------

    \107\ See Regulatory Impact Analysis at 47-51.
---------------------------------------------------------------------------

    Accordingly, FEMA proposes to amend the minimum threshold to 
account for increases to the CPI-U from 1999 to present, and annually 
thereafter. The proposed changes would provide the simplest and most 
certain means of increasing the minimum threshold, and for annual 
changes to the threshold. The proposed use of the CPI-U to increase the 
minimum threshold is also consistent with the adjustments to the per 
capita indicator. Additionally, adjusting the minimum threshold for 
changes to the CPI-U would better reflect current dollar values and the 
States' incident response capabilities, allow FEMA to be better 
prepared for larger, catastrophic incidents, and incentivize States to 
build their response capabilities and mitigate hazards posed by future 
incidents, thereby helping FEMA achieve its mission to make the nation 
better prepared and more resilient.

C. 44 CFR 206.48(a)(2)-(6)--Other Factors

    Section 1232 of the DRRA requires the Administrator of FEMA to give 
greater consideration to recent multiple disasters or severe localized 
impacts when making disaster declaration recommendations to the 
President, and to make corresponding adjustments to FEMA's policies and 
regulations regarding such consideration. The current text of 44 CFR 
206.48(a)(5) provides broad discretion for the consideration of 
multiple disasters occurring in the 12-month period prior to the event. 
Consistent with that provision and with FEMA's May 1 guidance to 
Regional Administrators, directing them to include in their 
recommendations appropriate and fulsome information regarding severe 
local impacts and the history of recent multiple disasters,\108\ FEMA 
is giving greater consideration to these factors when making disaster 
declaration recommendations. Accordingly, FEMA is not proposing to 
substantively amend Sec.  206.48(a)(5), but requests comment on whether 
a revision of the 12-month time limit currently in place is necessary 
to give greater consideration to this factor as required by the DRRA.
---------------------------------------------------------------------------

    \108\ Memorandum for Regional Administrators from Jeff Byard, 
Associate Administrator, Office of Response and Recovery, 
Declaration Factors for Local Impact and Recent Multiple Disasters 
(May 1, 2019).
---------------------------------------------------------------------------

    Similarly, FEMA proposes not to substantively amend the current 
regulatory text for the localized impacts factor in Sec.  206.48(a)(2). 
As noted above, FEMA has instructed Regional staff to give greater 
consideration to local impacts moving forward \109\ and FEMA believes 
that the current regulatory text provides FEMA sufficient flexibility 
to provide adequate consideration of local impacts while ensuring that 
FEMA does not over step the statutory requirement that an event be 
beyond State capability.\110\
---------------------------------------------------------------------------

    \109\ Memorandum for Regional Administrators from Jeff Byard, 
Associate Administrator, Office of Response and Recovery, 
Declaration Factors for Local Impact and Recent Multiple Disasters 
(May 1, 2019).
    \110\ Importantly, the DRRA did not amend section 401 of the 
Stafford Act which requires that the President determine that an 
event, to qualify as a major disaster warranting Federal assistance, 
be beyond the capabilities of the State and the affected local 
governments. See 42 U.S.C. 5170(a). So, while the President must 
give consideration to the impact of an event on local governments, 
he must also determine that the event exceeds the capabilities of 
the State.
---------------------------------------------------------------------------

    Additionally, with regard to the requirements of section 1239 of 
the DRRA that FEMA review all of the declaration factors and update 
them as necessary, FEMA does not propose to substantively amend the 
other declaration factors at 44 CFR 206.48(a)(3) (``Insurance coverage 
in force''), (4) (``Hazard mitigation''), and (6) (``Programs of other 
Federal assistance'') at this time. FEMA believes that the regulatory 
text for these factors already provides adequate consideration of 
important information for FEMA's assessment of a State's capabilities 
to respond to an event, while also providing sufficient flexibility for 
FEMA to account for a variety of circumstances across the States. 
Notably, although FEMA is not proposing to substantively amend these 
factors, FEMA may consider relevant information submitted by a 
requesting State that is outside the scope of the declaration factors 
listed in 44 CFR 206.48(a).

D. 44 CFR 206.48--Minor Technical and Grammatical Edits

    FEMA also proposes minor technical and corresponding grammatical 
changes to the undesignated introductory paragraph and to Sec.  
206.48(a) to ensure consistent language between the PA declaration 
factors in 44 CFR 206.48(a) and the IA factors in 44 CFR 206.48(b). 
FEMA proposes to replace all uses of the term ``we'' in 44 CFR 206.48 
with ``FEMA''. This would be consistent with the IA declaration factors 
in 44 CFR 206.48(b). FEMA also proposes minor corresponding edits to 
account for the change to the use of ``FEMA'' to ensure proper grammar.

VI. Regulatory Analysis

A. Executive Order 12866, As Amended, Regulatory Planning and Review; 
Executive Order 13563, Improving Regulation and Regulatory Review; and 
Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs

    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

[[Page 80731]]

equity). Executive Order 13563 emphasizes the importance of quantifying 
both costs and benefits, of reducing costs, of harmonizing rules, and 
of promoting flexibility. Executive Order 13771 (Reducing Regulation 
and Controlling Regulatory Costs) directs agencies to reduce regulation 
and control regulatory costs and provides that ``for every one new 
regulation issued, at least two prior regulations be identified for 
elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    The Office of Management and Budget (OMB) has designated this rule 
an ``economically significant regulatory action,'' under section 
3(f)(1) of Executive Order 12866. Accordingly, this rule has been 
reviewed by OMB. This rule is exempt from the requirements of Executive 
Order 13771 because it has de minimis costs spread across all States 
and territories. See OMB's Memorandum ``Guidance Implementing Executive 
Order 13771, Titled `Reducing Regulation and Controlling Regulatory 
Costs''' (April 5, 2017).
    FEMA conducted a Regulatory Impact Analysis (RIA) to assess the 
potential costs, benefits, and transfers from this proposed rule, and 
it has been found to be economically significant under E.O. 12866. FEMA 
provides an executive summary of the RIA below. For the full analysis, 
please see the RIA posted in the docket of this proposed rule on 
regulations.gov.
    FEMA proposes to amend one of the factors it considers when 
recommending a major disaster declaration that authorizes PA. 
Specifically, the proposed rule would update 44 CFR 206.48(a)(1), 
``Estimated cost of the assistance.'' FEMA proposes four associated 
changes in 44 CFR 206.48(a) to conform regulations to Section 1239 of 
the Disaster Recovery Reform Act of 2018 (DRRA). Table 2 provides a 
summary of the impacts of the proposed rule. The four proposed changes 
are:
    (1) Increase the per capita indicator from $1.50 to $2.32 to 
account for inflation using Consumer Price Index for All Urban 
Consumers (CPI-U) data from 1986 to 1999 because no inflation factor 
was applied during that time frame. Adjust the per capita indicator by 
each individual State's total taxable resources (TTR).
    (2) Increase the minimum threshold for major disaster declarations 
that authorize PA from $1 million to $1.535 million to account for 
inflation since 1999 and to adjust the threshold by CPI-U annually 
thereafter.\111\
---------------------------------------------------------------------------

    \111\ January 1999 CPI-U was 164.3 and August 2018 CPI-U was 
252.146. Calculation: (252.14 - 164.3)/164.3 + 1 = 1.535 
conversation factor (rounded). 1.535 x $1,000,000 = $1,535,000.
---------------------------------------------------------------------------

    (3) Use the US Census Bureau's annual population estimates produced 
under the Population Estimates Program (PEP) when calculating the 
individual State's threshold. FEMA's current practice is to use the 
decennial census population data when calculating the State COA 
indicator.
    (4) Make minor technical and corresponding grammatical changes to 
the undesignated introductory paragraph and to paragraph (a) of Sec.  
206.48.

      Table 2--Summary of the Impacts of the Proposed Rule (2018$)
------------------------------------------------------------------------
           Category                             Summary
------------------------------------------------------------------------
Proposed Changes.............  Replace the per capita indicator of $1.50
                                with $2.32 to account for inflation from
                                1986-1999 and then adjust by State TTR
                                annually.
                               Replace the minimum threshold of
                                $1,000,000 with $1,535,000 and adjust by
                                CPI-U annually.
                               Use PEP annual population estimates
                                instead of decennial census data to
                                calculate the State COA indicators.
                               Technical and grammatical changes to 44
                                CFR 206.48(a).
Affected Population..........  Applicants eligible to submit an
                                application for a PA project, include 56
                                State and Territorial governments, 573
                                Federally recognized Indian Tribal
                                governments, local governments, and
                                certain private nonprofit organizations
                                (PNPs). From 2008-2017, 7,456 Applicants
                                would have been impacted by the proposed
                                rule.
Transfers....................  $208.76 million annualized and $1.47
                                billion and $1.78 billion 10-year
                                monetized reduction in transfers to the
                                Applicants from FEMA at 7 and 3 percent
                                discount rates, respectively.
Cost Savings (due to reduced   $62.71 million annualized and $440.45
 disaster declaration           million and $534.93 million 10-year
 requests and applications).    monetized FEMA costs savings at 7 and 3
                                percent discount rates, respectively.
                               $8.04 million annualized; and $56.44
                                million and $68.55 million 10-year
                                monetized; Applicant cost savings at 7
                                and 3 percent discount rates,
                                respectively.
Costs (quantitative).........  $5,274 and $4,513 annualized; and $37,042
                                and $38,496 10-year monetized costs to
                                Applicants and FEMA at 7 and 3 percent
                                discount rates, respectively.
Costs (qualitative)..........  Applicants would need to invest more in
                                response recovery, and mitigation
                                capabilities. Damaged facilities may not
                                be repaired or replaced and could be
                                susceptible to future disasters.
Benefits (quantitative)......  No quantitative benefits.
Benefits (qualitative).......  Provide FEMA with a more accurate
                                assessment of whether an incident has
                                exceeded an Applicant's capabilities to
                                respond to and recover from an incident.
                               Incentivize Applicants to invest more in
                                response, recovery, and mitigation
                                capabilities, and increase overall
                                national preparedness for incidents.
                               Allow FEMA to refine its focus and
                                resources on large-scale disasters.
------------------------------------------------------------------------


[[Page 80732]]

Affected Population
    The proposed rule would reduce the number of major disaster 
declarations authorizing PA and therefore affect all non-Federal 
entities that are eligible to request PA following a Federal major 
disaster declaration. Eligible applicants for PA include 50 State and 6 
Territorial governments, and the District of Columbia as well as 573 
Federally recognized Indian Tribal governments,\112\ local governments, 
and certain PNPs. A disaster declaration is done at the State level, 
but the Applicants fill out the forms for PA eligibility and to receive 
funding once PA funding is made available through a declaration. For 
simplicity, FEMA refers to the affected population as Applicants 
throughout the RIA. If this proposed rule had been in effect from 2008-
2017, 7,456 Applicants for 159 PA disasters would have been impacted by 
the proposed rule. These Applicants would have had a reduction in grant 
funding, including funding and management costs for PA, funding and 
management costs for HMGP, and funding and management costs for BRIC. 
These Applicants would have also had paperwork cost savings for not 
filling out the forms to determine eligibility and receive funding.
---------------------------------------------------------------------------

    \112\ As noted above, Tribal governments may directly submit a 
request for a major disaster declaration to FEMA under the Tribal 
Declarations Pilot Guidance, instead of requesting assistance 
through the State. The potential impacts of this proposed rule are 
discussed in more detail below and in the RIA. See Section 13 of the 
RIA.
---------------------------------------------------------------------------

Reduction in Disaster Declarations
    As discussed later in this analysis, FEMA used data for the PA 
disasters from fiscal years (FY) 2008-2017 to estimate how the proposed 
rule would impact the number of PA disasters and the funding and costs 
associated with those PA disasters. FEMA used historical data on the 
estimated impacts on PA disasters from 2008-2017 as a proxy to estimate 
the impacts over the next ten years after this rule becomes final and 
effective. FEMA found there were a total of 585 PA disasters over the 
10-year period of analysis, an average of 59 disasters per year. FEMA 
estimates that there likely would be 159 PA disasters that would no 
longer be declared disasters under the proposed rule, an average of 16 
fewer PA disasters declared per year as discussed further in the RIA. 
This represents a 27 percent reduction in PA disasters declared from 
2008-2017 under this proposed rule.
Transfers
    Transfer payments are monetary payments from one group to another 
that do not affect the total resources available to society. Transfers 
can have significant efficiency effects in addition to distributional 
effects and are not included in the estimates of the benefits and costs 
of a regulation. Transfers are analyzed in this RIA because grants, 
i.e. those grants made by FEMA for PA, are considered transfers.
    The reduction in PA disasters would result in a reduction in grant 
funding to the PA Applicants. The reduction in funding from these 
programs equates to a reduction in transfers from FEMA to the 
Applicants. FEMA estimates the total 10-year undiscounted transfers of 
the proposed rulemaking would be $2.09 billion. The total 10-year 
discounted transfers would be $1.47 billion at a 7 percent discount 
rate and 1.78 billion at a 3 percent discount rate, with annualized 
transfers of $208.76 million at both 7 and 3 percent discount rates 
(Table 3).

                             Table 3--Total Estimated Transfers of the Proposed Rule
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
                                                                       Total                Discounted
                                                                   undiscounted  -------------------------------
                                                                   reduction in
                              Year                                transfers from
                                                                      FEMA to           7%              3%
                                                                    applicants
----------------------------------------------------------------------------------------------------------------
1...............................................................    $208,758,700    $195,101,589    $202,678,350
2...............................................................     208,758,700     182,337,933     196,775,097
3...............................................................     208,758,700     170,409,284     191,043,783
4...............................................................     208,758,700     159,261,013     185,479,401
5...............................................................     208,758,700     148,842,068     180,077,088
6...............................................................     208,758,700     139,104,736     174,832,125
7...............................................................     208,758,700     130,004,427     169,739,927
8...............................................................     208,758,700     121,499,464     164,796,046
9...............................................................     208,758,700     113,550,901     159,996,161
10..............................................................     208,758,700     106,122,337     155,336,078
                                                                 -----------------------------------------------
    Total.......................................................   2,087,587,000   1,466,233,752   1,780,754,055
----------------------------------------------------------------------------------------------------------------
Annualized......................................................                     208,758,700     208,758,700
----------------------------------------------------------------------------------------------------------------

Cost Savings
    The proposed rulemaking would result in administrative cost savings 
for FEMA, and paperwork cost savings for the Applicants and FEMA due to 
a decrease in the number of PA, BRIC, and HMGP applications resulting 
from fewer disaster declarations. A reduction in declarations would 
allow FEMA to focus its efforts and resources on larger disasters 
without the complications of reallocating response resources from 
multiple smaller scale commitments. The 10-year undiscounted FEMA cost 
savings resulting from the proposed rule would be $627.10 million 
($440.45 million discounted at 7 percent discount rate and $534.92 
million at a 3 percent discount rate; $62.71 million annualized at both 
7 and 3 percent discount rates). FEMA estimates the 10-year 
undiscounted Applicant cost savings would be $73.30 million ($51.48 
million at 7 percent and $62.53 million at 3 percent; $7.33 million 
annualized at both 7 and 3 percent). The total 10-year undiscounted 
cost savings for both FEMA and the Applicants would be $700.40 million, 
because there would be fewer requests for disasters to be declared and 
there would be fewer Applicants able to apply for relief. The

[[Page 80733]]

10-year total discounted cost savings would be $491.93 million at 7 
percent and $597.46 million at 3 percent, with an annualized cost 
savings of $70.75 million (Table 4).

                           Table 4--Total Estimated Cost Savings of the Proposed Rule
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
                                                                       Total                Discounted
              Year                Applicant cost     FEMA cost     undiscounted  -------------------------------
                                      savings         savings      cost savings         7%              3%
----------------------------------------------------------------------------------------------------------------
1...............................      $8,035,714     $62,710,053     $70,745,767     $66,117,539     $68,685,211
2...............................       8,035,714      62,710,053      70,745,767      61,792,093      66,684,671
3...............................       8,035,714      62,710,053      70,745,767      57,749,619      64,742,399
4...............................       8,035,714      62,710,053      70,745,767      53,971,607      62,856,698
5...............................       8,035,714      62,710,053      70,745,767      50,440,754      61,025,920
6...............................       8,035,714      62,710,053      70,745,767      47,140,892      59,248,466
7...............................       8,035,714      62,710,053      70,745,767      44,056,908      57,522,783
8...............................       8,035,714      62,710,053      70,745,767      41,174,681      55,847,362
9...............................       8,035,714      62,710,053      70,745,767      38,481,010      54,220,740
10..............................       8,035,714      62,710,053      70,745,767      35,963,561      52,641,495
                                 -------------------------------------------------------------------------------
    Total.......................      80,357,140     627,100,530     707,457,670     496,888,663     603,475,742
----------------------------------------------------------------------------------------------------------------
Annualized......................  ..............  ..............  ..............      70,745,767      70,745,767
----------------------------------------------------------------------------------------------------------------

Costs
    The proposed rule would substantively revise the estimated cost of 
the assistance disaster declaration factor. The proposed rule would not 
create new factors for FEMA to consider when reviewing a request for a 
PA disaster. FEMA would not change its current process for updating the 
per capita indicator or PA damage thresholds. FEMA's current practice 
is to update the per capita indicator each fiscal year to adjust for 
inflation using the for CPI-U and post the updated indicator on the 
Federal Register and FEMA website. The proposed rule would also require 
FEMA to update the minimum threshold every year to adjust for 
inflation. This is a new practice that FEMA is implementing to more 
accurately gauge a State's fiscal capacity to respond to disasters, as 
the threshold has not been updated since it was introduced in 1999. 
However, FEMA already calculates the change in CPI-U to apply to the 
per capita indicator each year. FEMA would apply the same change in 
CPI-U used to update the per capita indicator to the minimum threshold. 
The proposed rule would require FEMA to adjust the per capita indicator 
for each State's TTR, which is a new practice. FEMA estimates it would 
cost $12 per year for a FEMA employee to adjust the per capita 
indicator by TTR annually.
    FEMA would continue to post the updated per capita indicator each 
fiscal year and would not require any additional annual calculations or 
data requirements from the Applicants. The proposed rule would impose a 
one-time cost of $39,545 to the Applicants to familiarize themselves 
with the proposed changes the first year (Table 5). The minimum 
threshold would now be published yearly along with the per capita 
indicator. Because Applicants already look up the per capita indicator, 
FEMA does not expect additional costs associated with also looking up 
the minimum threshold. The proposed changes could impose qualitative 
costs that FEMA was unable to quantify. Qualitative costs are discussed 
in the RIA. Transferring the costs of PA disasters to Applicants would 
require the Applicants to invest more in response, recovery, and 
mitigation capabilities. It is possible that without Federal 
assistance, Applicants may opt to not repair damaged facilities or pay 
for other recovery efforts. Damaged facilities that are not repaired or 
replaced could be more susceptible to subsequent incidents in the 
future. Additionally, damaged facilities that are not repaired or 
replaced may no longer be used, which could be a significant loss of 
infrastructure to small governments who might opt to not repair damaged 
facilities due to fiscal limitations.

                               Table 5--Total Estimated Costs of the Proposed Rule
                                                     [2018$]
----------------------------------------------------------------------------------------------------------------
                                                                       Total                Discounted
              Year                   Applicant      FEMA costs     undiscounted  -------------------------------
                                       costs                           costs            7%              3%
----------------------------------------------------------------------------------------------------------------
1...............................         $39,545             $12         $39,557         $36,969         $38,405
2...............................               0              12              12              10              11
3...............................               0              12              12              10              11
4...............................               0              12              12               9              11
5...............................               0              12              12               9              10
6...............................               0              12              12               8              10
7...............................               0              12              12               7              10
8...............................               0              12              12               7               9
9...............................               0              12              12               7               9
10..............................               0              12              12               6               9
                                 -------------------------------------------------------------------------------
    Total.......................          39,545             120          39,665          37,042          38,496
----------------------------------------------------------------------------------------------------------------

[[Page 80734]]

 
Annualized......................  ..............  ..............  ..............           5,274           4,513
----------------------------------------------------------------------------------------------------------------

Benefits
    FEMA was unable to quantify benefits of the proposed regulatory 
changes due to a lack of data on future impacts of adjusting 
declaration factors. FEMA instead focused on proposed regulatory 
changes that would provide FEMA with a more accurate assessment of 
whether an incident has exceeded an Applicant's capabilities to respond 
to and recover from an incident. This is because the minimum threshold 
and per capita indicator have not consistently been updated to account 
for inflation, and not based on a State's fiscal capacity to respond. 
The proposed changes would ensure that these factors are taken into 
account. FEMA believes that the proposed changes also would incentivize 
Applicants to invest more in response, recovery, and mitigation 
capabilities, since Federal assistance would be focused on larger-scale 
disasters, and Applicants will have more responsibility to ensure they 
are adequately equipped to handle smaller disasters. This would provide 
a better distribution of responsibilities between the Applicants and 
the Federal Government. These incentives would increase overall 
national preparedness for incidents. In addition, FEMA believes these 
changes to the PA declaration factors would result in a reduction in 
the number of declarations for smaller incidents, allowing FEMA to 
refine its focus and resources on larger incidents without the 
complications of reallocating response resources from multiple smaller-
scale commitments, that States and local governments would have the 
capacity to manage without Federal assistance. FEMA requests public 
comment on the ability of Applicants to invest more in response, 
recovery, and mitigation capabilities.
Summary
    Table 6 provides a summary of the annual and total quantified 
costs, cost savings, and reduction in transfers by category after 
implementation of the proposed rule, and Table 7 provides the A-4 
accounting summary.

   Table 6--Summary of Transfers and Cost Savings of the Proposed Rule
------------------------------------------------------------------------
                                                              Annual
          Transfer, cost, or cost savings item             undiscounted
------------------------------------------------------------------------
Reduction in Transfers
    PA Funding..........................................    $144,534,939
    HMGP Funding........................................      33,330,171
    BRIC Funding........................................       7,267,390
    PA Management Cost Funding..........................      17,344,193
    HMGP Management Cost................................       4,999,526
Funding
    BRIC Management Cost Funding........................       1,282,481
                                                         ---------------
        Total Reduction in Transfers....................     208,758,700
------------------------------------------------------------------------
Cost Savings
    Applicant Paperwork Cost Savings....................       8,035,714
    FEMA Administrative Cost............................      62,409,381
Savings
    FEMA Paperwork Cost Savings.........................         300,672
    Total FEMA Cost Savings.............................      62,710,053
                                                         ---------------
        Total Cost Savings (Applicants and FEMA)........      70,745,767
------------------------------------------------------------------------
Costs
    Applicant Costs.....................................
        Year 1..........................................          39,545
        Years 2-10......................................               0
    FEMA Costs..........................................              12
                                                         ---------------
        Total Costs, Year 1.............................          39,557
        Total Costs, Years 2-10.........................              12
------------------------------------------------------------------------


[[Page 80735]]


                                        Table 7 A-4 Accounting Statement
                                                     [$2018]
----------------------------------------------------------------------------------------------------------------
                                        Period of Analysis: 2008 to 2017
-----------------------------------------------------------------------------------------------------------------
                                   7 percent discount  3 percent discount
             Category                     rate                rate         Source citation (RIA, preamble, etc.)
----------------------------------------------------------------------------------------------------------------
BENEFITS:
    Annualized Quantified........          N/A                 N/A
----------------------------------------------------------------------------------------------------------------
    Qualitative..................   Provide FEMA with a more       RIA Section 12.
                                   accurate assessment of whether an
                                   incident exceeds Applicant
                                   capabilities.
                                    Allow FEMA to focus efforts
                                   and resources on larger incidents.
                                    Provide better distribution
                                   of responsibilities between Applicants
                                   and the Federal Government.
----------------------------------------------------------------------------------------------------------------
COSTS:
    Annualized Monetized                0.005274            0.004513       RIA Section 8.
     $millions/year.
----------------------------------------------------------------------------------------------------------------
Annualized quantified............                N/A                 N/A
----------------------------------------------------------------------------------------------------------------
    Qualitative..................   Applicants would need to
                                   invest more in response, recovery, and
                                   mitigation capabilities.
                                    Damaged facilities may not be
                                   repaired or replaced, and could be
                                   susceptible to future disasters.
----------------------------------------------------------------------------------------------------------------
COST SAVINGS:
    Annualized Monetized                       70.75               70.75   RIA Section 8.
     $millions/year.
----------------------------------------------------------------------------------------------------------------
TRANSFERS:
    Annualized Monetized                      208.76              208.76   RIA Section 9.
     $millions/year.
----------------------------------------------------------------------------------------------------------------
    From/To......................  Reduction in transfers from FEMA to PA  RIA Section 9.
                                   Applicants
----------------------------------------------------------------------------------------------------------------
             Category              Effects                                            Source citation
                                                                           (RIA, preamble, etc.)
----------------------------------------------------------------------------------------------------------------
State, Local, and/or Tribal        Included in the Cost Savings is $5.88   RIA.
 Government.                       million annual paperwork cost savings
                                   to Applicants. Included in the
                                   Transfers is $8.48 million in PA
                                   funding that Tribal Applicants would
                                   not have received from 2008-20187.
                                   However, $7.11 of that funding would
                                   have potentially been available for
                                   Tribal governments had that requested
                                   a disaster declaration under the
                                   Tribal Declarations Pilot Guidance.
----------------------------------------------------------------------------------------------------------------
Small business...................  There were 7,456 unique Applicants for  RFA (IRFA).
                                   the 159 removed PA disasters from 2008-
                                   2017. Using a sample size of 380, FEMA
                                   found that 79% were likely to be small
                                   entities (5,890 Applicants). The
                                   average PA funding received per small
                                   entity in the sample was $168,046,
                                   with a range from a low of $0 to a
                                   high of $20.65 million. If the changes
                                   in the proposed rule were in effect,
                                   these entities would not have received
                                   this PA funding.
----------------------------------------------------------------------------------------------------------------
Wages............................  None.
----------------------------------------------------------------------------------------------------------------
Growth...........................  None.
----------------------------------------------------------------------------------------------------------------


[[Page 80736]]

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires agency review of proposed and final rules to assess their 
impact on small entities. When an agency promulgates a notice of 
proposed rulemaking under 5 U.S.C. 553, the agency must prepare an 
initial regulatory flexibility analysis (IRFA) unless it determines and 
certifies pursuant to 5 U.S.C. 605(b) that a rule, if promulgated, 
would not have a significant impact on a substantial number of small 
entities. However, FEMA is publishing this IRFA to aid the public in 
commenting on the potential small entity impacts of the proposed 
requirements in this NPRM. FEMA invites all interested parties to 
submit data and information regarding the potential direct economic 
impacts on small entities that would result from the adoption of this 
NPRM. FEMA will consider all comments received in the public comment 
process.
    In accordance with the Regulatory Flexibility Act (RFA), 5 U.S.C. 
601 et seq., as amended by the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FEMA prepared 
this IRFA to examine the impacts of the proposed rule on small 
entities. A small entity may be: A small independent business, defined 
as independently owned and operated, is organized for profit, and is 
not dominant in its field per the Small Business Act (5 U.S.C. 632); a 
small not-for-profit organization (any not-for-profit enterprise which 
is independently owned and operated and is not dominant in its field); 
or a small governmental jurisdiction (locality with fewer than 50,000 
people) per 5 U.S.C. 601-612.
    FEMA has discussed most of these issues in other sections of the 
NPRM and in the stand-alone RIA found in the docket of this rulemaking. 
In this section, FEMA will address the issues specific to the analysis 
of small entities that have not been addressed elsewhere.
    1. A description of the reasons why action by the agency is being 
considered.
    FEMA is proposing to amend the estimated cost of the assistance 
factor, including the minimum threshold, in 44 CFR 206.48. Pursuant to 
44 CFR 206.48, FEMA considers several factors when determining whether 
to recommend that the President declare a major disaster authorizing 
the PA program. Since 1986, FEMA has evaluated the estimated cost of 
Federal and non-Federal public assistance against the statewide 
population and used a per capita dollar amount (set at $1 in 1986) as 
an indicator that a disaster may warrant Federal assistance. FEMA did 
not increase the indicator until 1999, when it began adjusting for 
inflation in 1999 and annually thereafter. Also, in 1999, FEMA 
established a $1 million minimum threshold, meaning it would not 
recommend that the President authorize the PA program unless there was 
at least $1 million in PA damage, which FEMA believed was a level of 
damage even the least populous States could handle with their own 
resources. FEMA has never increased this threshold. The current per 
capita indicator and minimum threshold do not provide an accurate 
measure of States' capabilities to respond to disasters. The lack of 
increases to the per capita indicator from 1986 to 1999 undercut the 
value of this factor as an indicator of State capacity given the 
inflation increases during that time. With respect to the minimum 
threshold, a 1999 determination by FEMA that all States could handle at 
least $1.0 million in damages with their own resources is outdated 
given the 53.5 percent increase from 1999 in the inflation rate over 
the last 20 years and rising State budgets and expenditures.\113\
---------------------------------------------------------------------------

    \113\ January 1999 CPI-U of 164.3 and August 2018 CPI-U of 
252.146. Calculation: (252.146-164.3)/164.3 = 53.5% (rounded).
---------------------------------------------------------------------------

    Additionally, FEMA proposes to use the U.S. Census Bureau's annual 
population estimates produced under the PEP instead of the decennial 
census population data when calculating the State COA indicators. These 
changes would ensure a more accurate assessment of an individual 
State's financial capability to respond to and recover from a disaster, 
which would better enable FEMA to achieve its readiness and 
preparedness missions by allowing FEMA to expend more attention and 
resources on disasters that exceed the States' capabilities.
    2. A succinct statement of the objectives of, and legal basis for, 
the proposed rule.
    Section 1239 of DRRA directs FEMA to review the factors it 
considers when evaluating a request for a major disaster declaration, 
specifically the estimated cost of assistance factor, and to initiate 
rulemaking to update the declaration factors. FEMA proposes to amend 44 
CFR 206.48(a) to make changes to the estimated cost of assistance 
factor.
    FEMA is proposing to revise the cost of assistance estimates factor 
in 44 CFR 206.48(a)(1) by increasing the per capita indicator to 
account for inflation from 1986 to 1999 and adjusting the individual 
States' indicators by their TTR, and by increasing the minimum 
threshold by accounting for inflation from 1999 to 2019, and annually 
thereafter. FEMA also proposes to use the U.S. Census Bureau's annual 
population estimates produced under PEP instead of the decennial census 
population data. These changes would provide FEMA with a better 
informed and more accurate assessment of whether an incident has 
exceeded State capabilities when it makes its recommendations to the 
President; incentivize States to invest more in response, recovery, and 
mitigation capabilities, which would provide a better distribution of 
responsibilities between the States and the Federal Government and 
better overall national preparedness for disasters; and the associated 
reductions in declarations of smaller incidents would allow FEMA to 
better focus its efforts and resources on large disasters without the 
complications of reallocating resources from multiple smaller-scale 
commitments.
    3. A description of and, where feasible, an estimate of the number 
of small entities to which the rule will apply.
    The proposed rule directly affects all Applicants that are eligible 
to request PA under a Federal major disaster declaration authorizing 
PA. Eligible Applicants for PA include: State and Territorial 
governments, including the District of Columbia, American Samoa, the 
Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and 
the U.S. Virgin Islands; federally recognized Indian Tribal 
Governments, including Alaska Native villages and organizations; local 
governments; and certain private nonprofits.\114\
---------------------------------------------------------------------------

    \114\ To be an eligible private nonprofit applicant, the private 
nonprofit must show that it has: A current ruling letter from the 
U.S. Internal Revenue Service granting tax exemption under sections 
501(c), (d), or (e) of the Internal Revenue Code of 1954, or 
documentation from the State substantiating it is a non-revenue 
producing, nonprofit entity organized or doing business under State 
law. Additionally, prior to determining whether the private 
nonprofit is eligible, FEMA must first determine whether the private 
nonprofit owns or operates an eligible facility.
---------------------------------------------------------------------------

    FEMA reviewed the PA disasters that it identified that likely would 
not have been declared from 2008-2017 due to the proposed rule, as 
presented in Table 8-1 in Section 8 of the stand-alone RIA found in the 
docket of this rulemaking, to estimate the number of small entities to 
which the proposed rule would apply. For each of the 159 PA disasters 
removed, FEMA used PA data in FEMA's Enterprise Data Warehouse (EDW) 
database to identify the Applicants for each of the PA disasters.

[[Page 80737]]

FEMA found there were 7,456 unique Applicants for the 158 PA disasters.
    FEMA selected a random sample of 383 Applicants from the 7,456 
unique Applicants to estimate the percentage that are small 
entities.\115\ The term ``small entities'' includes small businesses 
that meet the Small Business Administration (SBA) size standard for 
small business concerns at 13 CFR 121.201, not-for-profit organizations 
that are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with population of less than 
50,000. FEMA researched and found data and information on 383 randomly 
sampled Applicants. FEMA found that of the 383 Applicants, 25 were 
classified as State governments, 312 were local governments, 3 were 
Tribal governments, and 43 were nonprofits. FEMA removed the 3 Tribal 
governments from the sample as they are sovereign entities and are not 
covered by the RFA. State governments are not considered small entities 
because they have populations greater than 50,000. For the Applicants 
classified as local governments, FEMA used 2010 decennial Census Bureau 
population data to determine the Applicant population size. Of the 312 
local governments, 259 (or 83 percent) had populations below 50,000 and 
would be considered as small entities. For nonprofit Applicants, FEMA 
reviewed the nonprofit's website utilizing an open source database 
(Manta.com) and any other publicly available information to determine 
the size of the nonprofit and ownership. FEMA researched the 43 private 
nonprofits and found that all of them were independently owned and 
operated and are not dominant in their field. Therefore, FEMA assumed 
all 43 private nonprofits were likely to be small entities. Table 8 
summarizes the findings of the small entity threshold analysis.
---------------------------------------------------------------------------

    \115\ FEMA used Slovin's formula to determine the sample size. 
Using a 95 percent confidence interval, a sample size of 380 
recipients and subrecipients is sufficient. Slovin's formula = N/
(1+Ne[supcaret]2) = 7,456/(1 + 7,456 * (0.05[supcaret]2)) = 379.633, 
rounded up to 380.

                                    Table 8--Summary of Applicants in Sample
----------------------------------------------------------------------------------------------------------------
                                                                   Exceed  small   Below  small
                Type of recipient or subrecipient                     entity          entity           Total
                                                                     threshold       threshold
----------------------------------------------------------------------------------------------------------------
State Government................................................              25               0              25
Local Government................................................              53             259             312
Private Nonprofits..............................................               0              43              43
Total...........................................................              78             302             380
Percentage......................................................             21%             79%            100%
----------------------------------------------------------------------------------------------------------------

    Of the 380 Applicants, FEMA found that 302 entities were small as 
defined by the SBA thresholds. Therefore, FEMA estimates that 79% of 
the total 7,456 Applicants of PA were small entities (5,890 Applicants 
were small entities). The 302 sampled small entities received a total 
of $50.75 million in PA funding for the disasters removed from 2008-
2017 according to FEMA's EDW database. If the changes in the proposed 
rule were in effect, these entities would not have received this PA 
funding. The average PA funding received per small entity in the sample 
was $168,046 over the 10-year period. The PA funding a small entity 
received ranged from a low of $0 to a high of $20.65 million. Of the 
302 small entities, 4 received $0 in PA funding. FEMA welcomes any data 
or comments from the public on the number of small entities that may be 
impacted by this proposed rule an any impacts to those small entities.
    4. A description of the projected reporting, recordkeeping and 
other compliance requirements of the proposed rule, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record.
    The proposed rule would call for a revision of a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520). This proposed rule would call for amendments to the existing 
collection requirements previously approved under the collections of 
information (COI) with OMB Control Numbers 1660-0009 and 1660-
0017.\116\ The costs associated with COI 1660-0009 include the time and 
cost burden for an Applicant to request a disaster declaration. A 
request for a disaster declaration comes from the State level. There is 
no burden for small entities included in COI 1660-0009, as the burden 
to complete FEMA form 010-0-13 is completed by the equivalent of a 
State Government Chief Executive and a State Administrative Support 
Worker. Therefore, there is no paperwork burden impact to small 
entities for COI 1660-0009.
---------------------------------------------------------------------------

    \116\ ``Public Assistance Program'', 1660-0017 can be found at 
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201902-1660-001. The most recently approved ICR at the time of this analysis was 
ICR Reference Number 201902-1660-001. ``The Declaration Process: 
Requests for Preliminary Damage Assessment (PDA), Requests for 
Supplemental Federal Disaster Assistance, Appeals, and Requests for 
Cost Share Adjustments'', 1660-0009 can be found at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201905-1660-003. The 
most recently approved ICR at the time of this analysis was ICR 
Reference Number 201905-1660-003.
---------------------------------------------------------------------------

    The costs associated with COI 1660-0017 include the time and cost 
burden for Applicants to provide FEMA information that is required for 
PA program eligibility determinations, grants management, and 
compliance with other Federal laws and regulations. For the 159 PA 
disasters removed from 2008-2017 from this proposed rule, there would 
be a reduction in paperwork burden for Applicants that applied for the 
PA program, as covered by COI 1660-0017. There would be a reduction in 
respondents for FEMA Forms 009-0-49, 009-0-91, 009-0-91A, 009-0-91B, 
009-0-91C, 009-0-91D, 009-0-120, 009-0-121, 009-0-123, 009-0-124, 009-
0-125, 009-0-126, 009-0-127, 009-0-128, and 009-0-141. The number of 
respondents would not change for FEMA Form 009-0-111, State 
Administrative Plan and State Plan Amendments (no form), Request for 
Appeals and Recommendation (no form), and Requests for Arbitration and 
Recommendation resulting from Hurricanes Katrina or Rita (no form), as 
these forms are not impacted by the proposed rule.
    The burden per response varies by form (see Table 9 in Section E, 
Paperwork Reduction Act of 1995). The number of forms each Applicant 
fills out varies by Applicant and by disaster. If an Applicant fills 
out every form impacted by this proposed rule, the maximum burden per 
Applicant is 11.4

[[Page 80738]]

hours (found using the ``Average Hourly Burden'' column in Table 9, 
excluding those forms or items not impacted by the proposed rule). 
Therefore, small entities would have a maximum reduction of 11.4 hours 
of paperwork burden for each PA disaster removed due to the proposed 
rule. FEMA previously estimated that 79% of the total 7,456 Applicants 
of PA for the 159 removed PA disasters were small entities (5,890 
Applicants were small entities). If all 5,890 small entity Applicants 
had filled out every form impacted by the proposed rule, there would 
have been a reduction in paperwork burden of 67,146 hours (5,890 small 
entities x 11.4 hours) from 2008-2017. There are no additional 
reporting, recordkeeping, or other compliance requirements resulting 
from this proposed rule.
    5. An identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap or conflict with the 
proposed rule.
    There are no relevant Federal rules that may duplicate, overlap, or 
conflict with this proposed rule.
    6. A description of any significant alternatives to the proposed 
rule which accomplish the stated objectives of applicable statutes and 
which minimize any significant economic impact of the proposed rule on 
small entities.
    FEMA considered several alternatives to the proposed changes to the 
per capita indicator and the minimum threshold. The alternatives are 
described in more detail in Section 15 of the stand-alone RIA found in 
the docket of this rulemaking. Because PA is approved at the State 
level, this proposed rule would only directly affect States. Small 
entities would be indirectly affected by a reduction in declared 
disasters at the State level, but FEMA is unable to address the impacts 
to small entities directly. A summary of those alternatives follows.
    FEMA considered two alternatives to adjusting the per capita 
indicator: adjusting the per capita indicator by PCPI and adjusting the 
per capita indicator by PCPI and then adjusting by TTR. The preliminary 
estimate for 2018 US PCPI is $53,712.\117\ FEMA established the per 
capita indicator at $1 in 1986 based on the 1983 US PCPI, which was the 
latest available published information at the time. The PCPI used to 
set the original per capita indicator was $11,687.\118\ PCPI increased 
by 360 percent from 1983 to 2018 (($53,712-$11,687)/$11,687). FEMA used 
the PCPI estimate of $11,687 from the 1986 proposed rulemaking as this 
was the data FEMA used to set the original per capita indicator. 
Applying the increase in PCPI to the original per capita indicator of 
$1 would result in a per capita indicator of $4.60. The per capita 
indicator alternatives resulted in per capita indicators that were 
higher than the proposed changes, which would result in more PA 
disasters that would not have exceeded the proposed thresholds from 
2008-2017. Fewer PA disasters would result in more small entities 
impacted by the proposed rule, since fewer declared disasters would 
lead to a reduction in Public Assistance provided to local governments 
and Private Non-Profits within each State. FEMA rejected the PCPI-based 
per capita indicator thresholds because FEMA believed the resulting per 
capita indicators may be too high for some States to meet. Moreover, 
the potentially large changes to PCPI from year to year, in comparison 
to changes to the CPI-U, could result in instability and uncertainty in 
what the per capita indicator may be each year for individual States 
and make it more difficult for States to plan.
---------------------------------------------------------------------------

    \117\ State Annual Personal Income, 2018 (Preliminary) and State 
Quarterly Personal Income, 4th Quarter 2018, Table 1: Personal 
Income, Population, and Per Capita Personal Income, by State and 
Region, 2017-2018, https://www.bea.gov/system/files/2019-03/spi0319.pdf.
    \118\ Disaster Assistance; Subpart C, the Declaration Process 
and State Commitments, 51 FR 13333, Apr. 18, 1986, found at http://cdn.loc.gov/service/ll/fedreg/fr051/fr051075/fr051075.pdf. FEMA 
began using $1 per capita informally in 1986. Revisions were made to 
the BEA 1983 PCPI after publication of the proposed 1986 rule. FEMA 
used the PCPI of $11,687 to maintain consistency with the data used 
at the time of establishing the per capita indicator.
---------------------------------------------------------------------------

    FEMA considered four alternatives to adjusting the minimum 
threshold using CPI-U: Using the change in GDP, State expenditures, or 
TTR to adjust the minimum threshold, or using FEMA administrative costs 
to calculate a minimum threshold for which FEMA's administrative burden 
exceeded the amount of Federal assistance provided. The minimum 
threshold alternatives resulted in minimum thresholds that were higher 
than the proposed minimum threshold and would have led to a 1 percent 
increase in the PA disasters that would not have exceeded the 
thresholds. Fewer PA disasters could result in more small entities 
impacted by the proposed rule. FEMA rejected adjusting the minimum 
threshold using the change in GDP, State expenditures, or TTR because 
the alternatives increase the complexity of calculating the threshold, 
but have little additional impact on the reduction in total PA 
disasters.
    FEMA rejected using administrative costs to calculate a minimum 
threshold because FEMA was unable to derive a specific dollar value of 
estimated PA obligations at which the proportion of administrative 
costs relative to PA obligations could justify that a prospective 
minimum threshold be set at that amount. Based on FEMA's analysis of 
available information across all PA disasters in the past ten years, 
there is no specific size of PA disaster at which point administrative 
costs exceed the amount of PA assistance, or where excessive 
administrative costs essentially renders such PA assistance ineffectual 
from a Federal cost standpoint.
    FEMA considered the following two alternatives that would have a 
smaller impact on small entities.
(a) No Regulatory Action
    FEMA considered not proposing the minimum threshold and per capita 
indicator regulatory changes in this proposed rule. FEMA rejected this 
alternative because section 1239 of the DRRA directs FEMA to review the 
factors it considers when evaluating a request for a major disaster 
declaration, specifically the estimated cost of assistance factor, and 
to initiate rulemaking to update the declaration factors. Additionally, 
the lack of increases to the per capita indicator from 1986 to 1999 
undercuts the value of this factor as an indicator of State capacity 
given the increases in inflation during that time. For the minimum 
threshold, the lack of an increase since 1999 has prevented this factor 
from keeping pace with inflation, and rising State budgets and 
resources. By not proposing the per capita indicator and minimum 
threshold regulatory changes in the proposed rule, FEMA would be 
relying upon per capita indicator and minimum threshold factors that 
are no longer adequate measures of a State's capability to respond to 
and recover from a disaster. The no regulatory action alternative would 
result in a greater likelihood that the President declares major 
disaster declarations for relatively small incidents that a more 
accurate assessment would find is within a State's financial 
capabilities to respond to on its own.
(b) Population Alternative
    FEMA considered continuing to use the US Census Bureau's decennial 
census population estimates instead of the proposed PEP annual 
estimates. FEMA found that using the decennial populations instead of 
the PEP annual estimates would have resulted in a reduction of 148 PA 
disasters from

[[Page 80739]]

2008-2017, an average of 15 per year. This is a difference of 10 
disasters from when FEMA used the proposed PEP annual populations in 
the analysis. This difference was a result of the States having a 
higher population with the PEP annual population estimates compared to 
the decennial population, and therefore a higher State COA indicator.
    FEMA rejected this alternative because FEMA's reliance on 
population data from the most recent decennial survey can lead to an 
imprecise assessment of a State's capabilities to respond to and 
recover from a disaster on its own. Decennial population data can lead 
to an inaccurate per capita indicator for States experiencing rapid 
changes in population. This could result in a greater likelihood that 
the President declares major disaster declarations for relatively small 
incidents that are within a State's financial capabilities to respond 
to on its own after it has experienced rapid population growth, or, 
conversely, a likelihood that the President does not declare major 
disaster declarations for incidents that may actually exceed a State's 
capabilities to respond to on its own where that State's population has 
rapidly decreased.
    More detailed information on the alternatives can be found in 
Section 15 of the stand-alone RIA found in the docket of this 
rulemaking.
7. Conclusion
    FEMA is interested in the potential impacts of the proposed rule on 
small entities and requests public comment on these potential impacts. 
If you think that this rule will have a significant economic impact on 
you, your business, or your organization, please submit a comment to 
the docket at the address under ADDRESSES in the rule. In your comment, 
explain why, how, and to what degree you think this rule will have an 
economic impact on you. FEMA is also interested in less burdensome 
alternatives for small entities. If you know of less burdensome 
alternatives, please include them in your comment.

C. Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private sector 
(other than to the extent that such regulations incorporate 
requirements specifically set forth in law).'' Section 202 of the Act 
(2 U.S.C. 1532) further requires that ``before promulgating any general 
notice of proposed rulemaking that is likely to result in the 
promulgation of any rule that includes any Federal mandate that may 
result in expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more (adjusted 
annually for inflation) in any one year, and before promulgating any 
final rule for which a general notice of proposed rulemaking was 
published, the agency shall prepare a written statement'' detailing the 
effect on State, local, and tribal governments and the private sector. 
FEMA has determined that this proposed rule can be excluded from this 
assessment as the proposed rule meets the criteria set forth in 2 
U.S.C. 1503(4), which states, ``This chapter shall not apply to . . . 
any provision in a proposed or final Federal regulation that-- . . . 
(4) provides for emergency assistance or relief at the request of any 
State, local, or tribal government or any official of a State, local, 
or tribal government.'' Therefore, no actions are deemed necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995.

D. National Environmental Policy Act of 1969 (NEPA)

    Under the National Environmental Policy Act of 1969 (NEPA), as 
amended, 42 U.S.C. 42 U.S.C. 4321 et. seq., an agency must prepare an 
environmental assessment or environmental impact statement for any 
rulemaking that significantly affects the quality of the human 
environment. FEMA has determined that this rulemaking does not 
significantly affect the quality of the human environment and 
consequently has not prepared an environmental assessment or 
environmental impact statement.
    Rulemaking is a major Federal action subject to NEPA. Categorical 
exclusion A3 included in the list of exclusion categories at Department 
of Homeland Security Instruction Manual 023-01-001-01, Revision 01, 
Implementation of the National Environmental Policy Act, Appendix A, 
issued November 6, 2014, covers the promulgation of rules, issuance of 
rulings or interpretations, and the development and publication of 
policies, orders, directives, notices, procedures, manuals, and 
advisory circulars if they meet certain criteria provided in A3(a-f). 
This proposed rule amends an existing regulation without changing its 
environmental effect, which meets Categorical Exclusion A3(d). This 
proposed rule is a narrowly crafted revision to FEMA's existing 
regulations updating the criteria that FEMA considers when recommending 
an area eligible for PA under a major disaster declaration. The 
proposed rule is not part of any larger regulatory action. Further, 
there are no extraordinary circumstances present that would create the 
potential for a significant environmental impact. Therefore, each of 
the conditions for application of categorical exclusion A3(d) is 
satisfied, and this action is categorically excluded from further NEPA 
review.
    Because no other extraordinary circumstances have been identified, 
this rule does not require the preparation of either an EA or an EIS as 
defined by NEPA. See Department of Homeland Security Instruction Manual 
023-01-001-01, Revision 01, Implementation of the National 
Environmental Policy Act, section (V)(B)(2).

E. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995, as amended, 44 U.S.C. 
3501-3520, an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the agency 
obtains approval from the Office of Management and Budget (OMB) for the 
collection and the collection displays a valid OMB control number. See 
44 U.S.C. 3506, 3507. This rulemaking contains a collection of 
information, as defined by the Paperwork Reduction Act of 1995, as 
amended, 44 U.S.C. 3501-3520. This action contains proposed amendments 
to the existing information collection requirements previously approved 
under OMB Control Number 1660-0009 and 1660-0017. As required by the 
Paperwork Reduction Act of 1995, FEMA has submitted these proposed 
collection amendments to OMB for its review.

Collection of Information Number 1660-0009

    Title: The Declaration Process: Requests for Preliminary Damage 
Assessment (PDA), Requests for Supplemental Federal Disaster 
Assistance, Appeals, and Requests for Cost Share Adjustments.
    OMB Control Number: 1660-0009.
    Type of information collection: Revision of a currently approved 
collection.
    Form Numbers: FEMA Forms 010-0-13 and 009-0-140 (used by FEMA 
personnel or contractors only).
    Summary of the Collection of Information: When a disaster occurs in 
a State, the Governor of the State or the Acting Governor in his/her 
absence, may request a major disaster declaration or an emergency 
declaration using FEMA Form 010-0-13. The information obtained by joint 
Federal, State, and

[[Page 80740]]

local preliminary damage assessments is analyzed by FEMA regional 
senior level staff. The regional summary and the regional analysis and 
recommendation will include a discussion of State and local resources 
and capabilities, and other assistance available to meet the disaster 
related needs. The Administrator of FEMA provides a recommendation and 
a copy of the Governor's request to the President. In the event the 
information required by law is not contained in the request, the 
Governor's request cannot be processed and forwarded to the White 
House.
    Need for Information: The Stafford Act requires that all requests 
for a major disaster or emergency declaration be made by the Governor 
of the affected State or the Chief Executive of an affected Indian 
tribal government. Section 401(a) of the Stafford Act stipulates that 
such a request shall be based on a finding that the disaster is of such 
severity and magnitude that effective response is beyond the 
capabilities of the State and the affected local government, and that 
Federal assistance is necessary. Section 401(a) further stipulates that 
as a part of such request, and as a prerequisite to major disaster 
assistance under the Stafford Act, the Governor shall take appropriate 
response action under State law and direct the execution of the State's 
emergency plan and shall furnish specific information that must be 
included in a request for a major disaster declaration. Section 401(a) 
stipulates that the request must include specific information on the 
nature and amount of State and local resources which have been or will 
be committed to alleviate the results of the disaster. Section 501(a) 
requires the same information to be provided in requests for 
declarations of an emergency.
    Use of Information: This collection includes FEMA Form 010-0-13, 
Request for Presidential Disaster Declaration Major Disaster or 
Emergency, which asks for the same data that were stated and required 
in the previous narrative Governor's requests to the President 
requesting supplemental Federal assistance, through the appropriate 
Regional Administrator, combined with the findings of a joint FEMA, 
State and local Preliminary Damage Assessment (PDA). The PDA is 
analyzed and provides the basis for a Regional Summary, Analysis, and 
Recommendation, which is submitted to the Assistant Administrator of 
the Disaster Assistance Directorate. The information is reviewed and 
evaluated, and the Administrator formulates a recommendation which is 
submitted to the President for consideration of a disaster or emergency 
declaration. The FEMA form eliminates the need for follow-up 
communications and reporting during a declaration request.
    Description of the Respondents: State, local, or Tribal government.
    Number of Respondents: The current OMB-approved number of 
respondents is 623 per year. The proposed rulemaking would not impact 
the number of respondents.
    Number of Responses: FEMA estimates the number of responses would 
be 340 per year. This is a decrease of 16 responses from the OMB-
approved number of responses of 356 per year.
    Burden of Response: For each response, FEMA estimates it takes 9 
hours to complete FEMA Form 010-0-13. In addition, FEMA estimates it 
takes 24.126 hours to gather information for the FEMA Form 010-0-13. 
The total burden for each response is 33.126 hours
    Estimate of Total Annual Burden: The previously approved total 
annual burden was 11,792.8 hours. FEMA estimates that the number of 
responses would decrease by 16 per year. At 33.126 hours per response, 
the reduced burden for submitting the responses would be 530 hours 
(rounded). Based on the proposed rule's decrease in burden, the new 
estimated total annual burden is 11,262.8 hours.

Collection of Information Number 1660-0017

    Title: Public Assistance Program,
    OMB Control Number: 1660-0017,
    Type of information collection: Revision of a currently approved 
collection.
    Form Numbers: FEMA Forms 009-0-49, 009-0-91, 009-0-91A, 009-0-91B, 
009-0-91C, 009-0-91D, 009-0-111, 009-0-120, 009-0-121, 009-0-123, 009-
0-124, 009-0-125, 009-0-126, 009-0-127, 009-0-128, 055-0-0-1, and 009-
0-141.
    Summary of the Collection of Information: The Stafford Act 
authorizes grants to assist State, tribal, and local governments and 
certain Private Non-Profit entities with the response to and recovery 
from disasters following Presidentially declared major disasters and 
emergencies.
    Need for Information: The information collected is required for the 
PA program eligibility determinations, grants management, and 
compliance with other Federal laws and regulations. Title 44 CFR part 
206 specifies the information collections necessary to facilitate the 
provision of assistance under the PA program.
    Use of Information: The information collected is utilized by FEMA 
to make determinations for PA grants based on the information supplied 
by the respondents.
    Description of Respondents: State, local, or tribal government.
    Number of Respondents: The current OMB-approved number of 
respondents is 56 per year for FEMA Forms 009-0-49, 009-0-91, 009-0-
91A, 009-0-91B, 009-0-91C, 009-0-91D, 009-0-111, 009-0-120, 009-0-121, 
009-0-123, 009-0-124, 009-0-125, 009-0-126, 009-0-127, 009-0-128, 009-
0-141, State Administrative Plan and State Plan Amendments (no form), 
and Request for Appeals and Recommendation (no form); and 4 per year 
for Requests for Arbitration and Recommendation resulting from 
Hurricanes Katrina or Rita (no form). FEMA estimates the number of 
respondents would be 40 per year, a decrease of 16 respondents from the 
OMB-approved number of responses of 56 per year, for FEMA Forms 009-0-
49, 009-0-91, 009-0-91A, 009-0-91B, 009-0-91C, 009-0-91D, 009-0-120, 
009-0-121, 009-0-123, 009-0-124, 009-0-125, 009-0-126, 009-0-127, 009-
0-128, and 009-0-141. The number of respondents would not change for 
FEMA Form 009-0-111, State Administrative Plan and State Plan 
Amendments (no form), Request for Appeals and Recommendation (no form), 
and Requests for Arbitration and Recommendation resulting from 
Hurricanes Katrina or Rita (no form).
    Number of Responses: The number of responses per respondent varies 
by form (see Table 9). The number of responses per respondent (form) 
would not change due to the proposed rule. The decrease in the number 
of respondents for certain forms would result in a decrease in the 
total annual responses. FEMA estimates the total annual number of 
responses would be 284,564 per year. This is a decrease of 113,504 
responses from the OMB-approved number of responses of 398,068 per 
year.

[[Page 80741]]



                               Table 9--Estimated Annualized Burden Hours by Form
----------------------------------------------------------------------------------------------------------------
                                                                                  Average hourly
       Form name/form No.           Respondents    Responses per   Total annual      burden per    Total hourly
                                                    respondent       responses       response      annual burden
----------------------------------------------------------------------------------------------------------------
FEMA Form 009-0-49, Request for               40             129           5,160            0.25           1,290
 Public Assistance..............
FEMA Form 009-0-91, Project                   40             840          33,600             1.5          50,400
 Worksheet (PW) and a Request
 for Time Extension.............
FEMA Form 009-0-91A Project Work              40             784          31,360             1.5          47,040
 Sheet (PW) Damage Description
 and Scope of Work..............
FEMA Form 009-0-91B, Project                  40             784          31,360          1.3333          41,813
 Worksheet (PW) Cost Estimate
 Continuation Sheet and Request
 for additional funding for Cost
 Overruns.......................
FEMA Form 009-0-91C Project                   40             728          29,120             1.5          43,680
 Worksheet (PW) Maps and
 Sketches Sheet.................
FEMA Form 009-0-91D Project                   40             728          29,120             1.5          43,680
 Worksheet (PW) Photo Sheet.....
FEMA Form 009-0-120, Special                  40             840          33,600             0.5          16,800
 Considerations Questions.......
FEMA Form 009-0-128, Applicant's              40             784          31,360             0.5          15,680
 Benefits Calculation Worksheet.
FEMA Form 009-0-121, PNP                      40              94           3,760             0.5           1,880
 Facility Questionnaire.........
FEMA Form 009-0-123, Force                    40              94           3,760             0.5           1,880
 Account Labor Summary Record...
FEMA Form 009-0-124, Materials                40              94           3,760            0.25             940
 Summary Record.................
FEMA Form 009-0-125, Rented                   40              94           3,760             0.5           1,880
 Equipment Summary Record.......
FEMA Form 009-0-126, Contract                 40              94           3,760             0.5           1,880
 Work Summary Record............
FEMA Form 009-0-127, Force                    40              94           3,760            0.25             940
 Account Equipment Summary
 Record.........................
State Administrative Plan and                 56               1              56               8             448
 State Plan Amendments/No Form..
FEMA Form 009-0-111, Quarterly                56               4             224             100          22,400
 Progress Report................
Request for Appeals &                         56               9             504               3           1,512
 Recommendation/No Forms........
Request for Arbitration &                      4               5              20               3              60
 Recommendation resulting from
 Hurricanes Katrina or Rita/No
 Form...........................
FEMA Form 009-0-141, FAC-TRAX                 40             913          36,520            1.25          45,650
 System.........................
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............         284,564        126.3333         339,853
----------------------------------------------------------------------------------------------------------------

    Burden of Response: The burden per response varies by form (see 
Table 9). The total burden per response varies by respondent, with a 
maximum burden per respondent of 126.3333 hours if a respondent 
completes every form and those items without forms. The burden per 
response would not change due to this rulemaking.
    Estimate of Total Annual Burden: The previously approved total 
annual burden was 466,025 hours. FEMA estimates that the number of 
respondents would decrease by 16 per year for FEMA Forms 009-0-49, 009-
0-91, 009-0-91A, 009-0-91B, 009-0-91C, 009-0-91D, 009-0-120, 009-0-121, 
009-0-123, 009-0-124, 009-0-125, 009-0-126, 009-0-127, 009-0-128, and 
009-0-141. Table 9 shows the resultant change in the total annual 
burden by form. Based on the proposed rule's decrease in burden, the 
new estimated total annual burden is 339,853 hours. This is a reduction 
of 126,172 hours per year.

                                Table 9--Itemized Changes in Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                  Program change
                                                                      (burden     Program change
               Data collection activity/instrument                 currently on        (new)        Difference
                                                                  OMB Inventory)
----------------------------------------------------------------------------------------------------------------
FEMA Form 009-0-49, Request for Public Assistance...............           1,806           1,290            -516
FEMA Form 009-0-91, Project Worksheet (PW) and a Request for              70,560          50,400         -20,160
 Time Extension.................................................
FEMA Form 009-0-91A Project Work Sheet (PW) Damage Description            65,856          47,040         -18,816
 and Scope of Work..............................................
FEMA Form 009-0-91B, Project Worksheet (PW) Cost Estimate                 58,537          41,813         -16,724
 Continuation Sheet and Request for additional funding for Cost
 Overruns.......................................................
FEMA Form 009-0-91C Project Worksheet (PW) Maps and Sketches              61,152          43,680         -17,472
 Sheet..........................................................
FEMA Form 009-0-91D Project Worksheet (PW) Photo Sheet..........          61,152          43,680         -17,472
FEMA Form 009-0-120, Special Considerations Questions...........          23,520          16,800          -6,720
FEMA Form 009-0-128, Applicant's Benefits Calculation Worksheet.          21,952          15,680          -6,272
FEMA Form 009-0-121, PNP Facility Questionnaire.................           2,632           1,880            -752
FEMA Form 009-0-123, Force Account Labor Summary Record.........           2,632           1,880            -752
FEMA Form 009-0-124, Materials Summary Record...................           1,316             940          -376.0
FEMA Form 009-0-125, Rented Equipment Summary Record............           2,632           1,880            -752

[[Page 80742]]

 
FEMA Form 009-0-126, Contract Work Summary Record...............           2,632           1,880            -752
FEMA Form 009-0-127, Force Account Equipment Summary Record.....           1,316             940            -376
State Administrative Plan and State Plan Amendments/No Form.....             448             448               0
FEMA Form 009-0-111, Quarterly Progress Report..................          22,400          22,400               0
Request for Appeals & Recommendation/No Forms...................           1,512           1,512               0
Request for Arbitration & Recommendation resulting from                       60              60               0
 Hurricanes Katrina or Rita/No Form.............................
FEMA Form 009-0-141, FAC-TRAX System............................          63,910          45,650         -18,260
                                                                 -----------------------------------------------
    Total.......................................................         466,025         339,853        -126,172
----------------------------------------------------------------------------------------------------------------

    As required by 44 U.S.C. 3507(d), FEMA will submit a copy of the 
proposed rule to OMB for its review of the collection of information.
    FEMA asks for public comment on the proposed collection of 
information to help determine how useful the information is, whether it 
can help FEMA perform its functions better, whether it is readily 
available elsewhere, how accurate the estimate of the burden of 
collection is, how valid the methods for determining burden are, how 
FEMA can improve the quality, usefulness, and clarity of the 
information, and how FEMA can minimize the burden of collection.
    If you submit comments on the collection of information, submit 
them both to OMB and to the Docket Management Facility, where indicated 
under the ADDRESSES section of the proposed rule, by the date given 
under the DATES section.
    You are not required to respond to a collection of information 
unless it displays a currently valid control number from OMB. Before 
FEMA could enforce the collection of information requirements in this 
proposed rule, OMB would need to approve FEMA's request to collect this 
information.

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 proposed regulation will result 
in a system of records. A ``record'' is any item, collection, or 
grouping of information about an individual that is maintained by an 
agency, including, but not limited to, his/her education, financial 
transactions, medical history, and criminal or employment history and 
that contains his/her name, or the identifying number, symbol, or other 
identifying particular assigned to the individual, such as a finger or 
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A ``system of 
records'' is a group of records under the control of an agency from 
which information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual. An agency cannot disclose any record which is contained 
in a system of records except by following specific procedures.
    The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires 
specific procedures when an agency takes action to develop or procure 
information technology that collects, maintains, or disseminates 
information that is in an identifiable form. This Act also applies when 
an agency initiates a new collection of information that will be 
collected, maintained, or disseminated using information technology if 
it includes any information in an identifiable form permitting the 
physical or online contacting of a specific individual.
    A Privacy Threshold Analysis for this proposed rule was approved on 
May 23, 2019. Any information will be collected in existing FEMA Form 
010-0-13, and will still only include the Governor's point of contact 
and general office phone number as well as other State specific and 
disaster specific information of a non-personally[hyphen]identifiable 
nature. The information received through the form is neither retrieved 
nor retrievable by personally identifiable information (PII). Any 
retrieval would be done by utilizing State specific or disaster 
specific information of a non[hyphen]identifiable nature. This form and 
its contents are covered by a System of Records Notice, DHS/FEMA/PIA-
013 Grant Management Programs and notice is provided by the DHS/FEMA-
009 Hazard Mitigation Disaster Public Assistance and Disaster Loan 
Programs SORN. This rulemaking does not impact FEMA's collection of PII 
in the disaster declarations process and form and no Privacy Impact 
Assessment or System of Records Notice is required at this time.

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

    Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments,'' 65 FR 67249, November 9, 2000, applies to agency 
regulations that have Tribal implications, that is, regulations that 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. Under this Executive order, to the extent 
practicable and permitted by law, no agency shall promulgate any 
regulation that has Tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute, unless funds necessary to pay the direct costs 
incurred by the Indian Tribal government or the Tribe in complying with 
the regulation are provided by the Federal Government, or the agency 
consults with Tribal officials.
    FEMA has reviewed this proposed rule under Executive Order 13175 
and believes that this proposed rule would not have a substantial 
direct effect on one or more Indian tribes, on the relationship between 
the Federal Government and Indian Tribes, or on the distribution of 
power and responsibilities between the Federal Government and Indian 
Tribes. The Sandy Recovery Improvement Act of 2013 requires the 
President when issuing regulations to ``consider the unique conditions 
that affect the general welfare of Indian tribal governments.'' To this 
end, FEMA, in coordination

[[Page 80743]]

with DHS, OMB and several tribes and tribal organizations, decided to 
develop the Tribal Declarations Pilot Guidance. The guidance underwent 
extensive and exhaustive tribal consultation for over 3 years, which 
included over 150 listening sessions across the country and the 
adjudication of over 2,000 comments. Under the Tribal Declarations 
Pilot Guidance, FEMA established separate factors for evaluating tribal 
governments' requests. These factors include (but are not limited to) a 
lower minimum damage amount for Public Assistance ($250,000) and the 
elimination of a per capita damage amount. These factors reflect the 
Agency's acknowledgement that tribal nations have different needs and 
capabilities than states. The factors listed in the Tribal Declarations 
Pilot Guidance will not be altered by this proposed rule, as the 
proposed rule only applies to States and Territories. Additionally, as 
noted in the RIA, Tribal applicants and subapplicants would have 
received $10.74 million less in PA funding between 2008 and 2017 had 
the proposed rule been in effect. However, $9 million of that funding 
would have been potentially available for some of those Tribal 
governments had they requested a major disaster declaration under the 
Tribal Declarations Pilot Guidance because those Tribal governments 
received more than $250,000 in PA assistance. Therefore, it is possible 
more Tribal governments may request disaster declarations through the 
Tribal Declarations Pilot Guidance as a result of the proposed rule. 
However, as discussed in the RIA, there are many other factors that 
affect whether a Tribal government requests a declaration through the 
Tribal Declarations Pilot Guidance.
    The remaining $1.74 million of PA funding that Tribal governments 
would likely not have received resulted in an average of $36,192 per 
project for each of the 44 Tribal governments across the 29 disasters 
analyzed. While FEMA appreciates that some Tribal governments have 
limited financial capabilities, FEMA believes most Tribal governments 
could handle such costs in responding to an event on their own. 
Accordingly, FEMA does not believe that consultation under Executive 
Order 13175 is necessary; however, FEMA welcomes comments on the 
potential impacts of the proposed rule on Tribal governments. 
Additionally, in accordance with the requirement in section 1239 of the 
DRRA that FEMA meaningfully consult with State, local and Tribal 
governments, FEMA will conduct additional outreach with Tribal 
government stakeholders as well as representatives of State, regional 
and local governments.

H. Executive Order 13132, Federalism

    Executive Order 13132, ``Federalism,'' 64 FR 43255, August 10, 
1999, sets forth principles and criteria that agencies must adhere to 
in formulating and implementing policies that have federalism 
implications, that is, regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Federal 
agencies must closely examine the statutory authority supporting any 
action that would limit the policymaking discretion of the States, and 
to the extent practicable, must consult with State and local officials 
before implementing any such action.
    FEMA has reviewed this proposed rule under Executive Order 13132 
believes that this proposed rule would not have substantial direct 
effects on the States, on the relationship between the National 
Government and the States, on the distribution of power and 
responsibilities among the various levels of government, or on the 
policymaking discretion of the States, and therefore does not have 
federalism implications as defined by the Executive order. The proposed 
rule substantively affects one of several factors that FEMA considers 
when determining whether to recommend that the President declare that a 
major disaster has occurred on the basis of a governor's request that 
such a declaration be made. Importantly, FEMA considers all of the 
factors in making a decision on a recommendation, as each disaster 
request involves circumstances unique to that disaster event, the 
State, and affected communities. Moreover, FEMA's recommendation to the 
President does not obligate the President to agree with FEMA's 
recommendation. Rather, the President may declare or not declare a 
disaster on their own accord. Furthermore, the proposed rule does not 
affect a State's ability or choice to request such a declaration, since 
disaster declaration requests are voluntary, and States choose whether 
or not to request Federal assistance. While FEMA hopes that the 
proposed rule will encourage States to invest more in mitigating future 
disasters and their consequences, such funding decisions are ultimately 
left to the States' discretion. Accordingly, the proposed rule does not 
have federalism implications as defined by the Executive order.
    However, FEMA welcomes comments on the proposed rule's potential 
impacts on States and territories, and their relationships with the 
Federal Government. Additionally, in accordance with the requirement in 
section 1239 of the DRRA that FEMA meaningfully consult with State, 
local and Tribal governments, FEMA will conduct additional outreach 
with representatives of State, regional and local governments.

I. Executive Order 11988, Floodplain Management, as amended

    Pursuant to Executive Order 11988, each agency is required to 
provide leadership and take action to reduce the risk of flood loss, to 
minimize the impact of floods on human safety, health and welfare, and 
to restore and preserve the natural and beneficial values served by 
floodplains in carrying out its responsibilities for (1) acquiring, 
managing, and disposing of Federal lands and facilities; (2) providing 
Federally undertaken, financed, or assisted construction and 
improvements; and (3) conducting Federal activities and programs 
affecting land use, including but not limited to water and related land 
resources planning, regulating, and licensing activities. In carrying 
out these responsibilities, each agency must evaluate the potential 
effects of any actions it may take in a floodplain; to ensure that its 
planning programs and budget requests reflect consideration of flood 
hazards and floodplain management; and to prescribe procedures to 
implement the policies and requirements of the Executive order.
    Before promulgating any regulation, an agency must determine 
whether the proposed 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 and 
prepare and circulate a notice containing an explanation of why the 
action is proposed to be located in the floodplain.
    The requirements of Executive Order 11988 apply in the context of 
the provision of Federal financial assistance

[[Page 80744]]

relating to, among other things, construction and property improvement 
activities, as well as conducting Federal programs affecting a 
floodplain(s). The changes proposed in this rule would not have an 
effect on floodplain management. This proposed rule revises the 
criteria that FEMA considers when recommending a State eligible for PA 
under a major disaster declaration. A major disaster declaration 
recommendation to the President is an administrative action for FEMA's 
PA program. When FEMA undertakes specific actions in administering PA 
that may have effects on floodplain management, FEMA follows the 
procedures set forth in 44 CFR part 9 to assure compliance with this 
Executive order. This serves as the notice that is required by the 
E.O..

J. Executive Order 11990, Protection of Wetlands

    Pursuant to Executive Order 11990, 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 for (1) acquiring, managing, and disposing of Federal 
lands and facilities; and (2) providing Federally undertaken, financed, 
or assisted construction and improvements; and (3) conducting Federal 
activities and programs affecting land use, including but not limited 
to water and related land resources planning, regulating, and licensing 
activities. Each agency, to the extent permitted by law, must avoid 
undertaking or providing assistance for new construction located in 
wetlands unless the head of the agency finds (1) that there is no 
practicable alternative to such construction, and (2) that the proposed 
action includes all practicable measures to minimize harm to wetlands 
which may result from such use. In making this finding the head of the 
agency may take into account economic, environmental and other 
pertinent factors.
    In carrying out the activities described in the Executive order, 
each agency must consider factors relevant to a proposal's effect on 
the survival and quality of the wetlands. Among these factors are: 
Public health, safety, and welfare, including water supply, quality, 
recharge and discharge; pollution; flood and storm hazards; and 
sediment and erosion; maintenance of natural systems, including 
conservation and long term productivity of existing flora and fauna, 
species and habitat diversity and stability, hydrologic utility, fish, 
wildlife, timber, and food and fiber resources; and other uses of 
wetlands in the public interest, including recreational, scientific, 
and cultural uses.
    The requirements of Executive Order 11990 apply in the context of 
the provision of Federal financial assistance relating to, among other 
things, construction and property improvement activities, as well as 
conducting Federal programs affecting land use. The changes proposed in 
this rule would not have an effect on land use or wetlands. This 
proposed rule revises the criteria that FEMA considers when 
recommending a State eligible for PA under a major disaster 
declaration. A major disaster declaration recommendation to the 
President is an administrative action for FEMA's PA program. When FEMA 
undertakes specific actions in administering PA that may have such 
effects, FEMA follows the procedures set forth in 44 CFR part 9 to 
assure compliance with this Executive order.

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, February 16, 1994, as amended by Executive 
Order 12948, 60 FR 6381, February 1, 1995, FEMA incorporates 
environmental justice into its policies and programs. The Executive 
order requires each Federal agency to conduct its programs, policies, 
and activities that substantially affect human health or the 
environment in a manner that ensures that those programs, policies, and 
activities do not have the effect of excluding persons from 
participation in programs, denying persons the benefits of programs, or 
subjecting persons to discrimination because of race, color, or 
national origin.
    This rulemaking will not have a disproportionately high or adverse 
effect on minority or low-income populations. The proposed rule 
substantively affects one of several factors that FEMA considers when 
determining whether to recommend that the President declare that a 
major disaster has occurred on the basis of a governor's request that 
such a declaration be made for PA. FEMA's PA program provides 
assistance to States, local governments, and private non-profits in 
repairing, restoring, and replacing facilities damaged by disasters, 
such as buildings, roads, bridges, and other infrastructure. FEMA's 
review of a governor's request for a major disaster declaration for PA 
only considers the relevant factors as they pertain to a disaster's 
impacts on those public or eligible private non-profit facilities 
covered by the PA program. Accordingly, no action that FEMA can 
anticipate under this rule will have a disproportionately high and 
adverse human health or environmental effect on any segment of the 
population.

L. Federal Participation in the Development and Use of Voluntary 
Consensus Standards and in Conformity Assessment Activities,'' OMB 
Circular A-119

    ``Voluntary consensus standards'' are standards developed or 
adopted by voluntary consensus standards bodies, both domestic and 
international. These standards include provisions requiring that owners 
of relevant intellectual property have agreed to make that intellectual 
property available on a non-discriminatory, royalty-free or reasonable 
royalty basis to all interested parties. OMB Circular A-119 directs 
agencies to use voluntary consensus standards in their regulatory 
actions in lieu of government-unique standards except where 
inconsistent with law or otherwise impractical. The policies in the 
Circular are intended to reduce to a minimum the reliance by agencies 
on government-unique standards.
    The proposed rule does not contain a ``standard'' as defined by OMB 
Circular A-119. This proposed rule revises the criteria that FEMA 
considers when recommending a State eligible for PA under a major 
disaster declaration. A major disaster declaration recommendation to 
the President is an administrative action for FEMA's PA program. 
Accordingly, an analysis under OMB Circular A-119 is not required.

M. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5 
U.S.C. 801-808, before a rule can take effect, the Federal agency 
promulgating the rule must submit to Congress and to the Government 
Accountability Office (GAO) a copy of the rule, a concise general 
statement relating to the rule, including whether it is a major rule, 
the proposed effective date of the rule, a copy of any cost-benefit 
analysis; descriptions of the agency's actions under the Regulatory 
Flexibility Act and the Unfunded Mandates Reform Act, and any other 
information or statements required by relevant Executive orders.
    FEMA will send this rule to the Congress and to GAO pursuant to the 
CRA if the rule is finalized. The rule, as proposed, is a ``major 
rule'' within the meaning of the CRA. It will have an

[[Page 80745]]

annual effect on the economy of $100,000,000 or more, and may result in 
a major increase in costs or prices for Federal, State, or local 
government agencies. It will not have significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States- based enterprises to compete with 
foreign-based enterprises in domestic and export markets.

List of Subjects in 44 CFR Part 206

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

    For the reasons stated in the preamble, the Federal Emergency 
Management Agency proposes to amend 44 CFR part 206, subpart B, as 
follows:

PART 206--FEDERAL DISASTER ASSISTANCE

0
1. The authority citation for part 206 continues to read as follows:

    Authority:  Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5207; Homeland Security Act 
of 2002, 6 U.S.C. 101 et seq.; Department of Homeland Security 
Delegation 9001.1.

0
2. Revise Sec.  206.48 introductory text and paragraph (a) to read as 
follows:


Sec.  206.48   Factors considered when evaluating a Governor's request 
for a major disaster declaration.

    When FEMA reviews a Governor's request for major disaster 
assistance under the Stafford Act, these are the primary factors in 
making a recommendation to the President whether assistance is 
warranted. FEMA considers other relevant information as well.
    (a) Public Assistance Program. FEMA evaluates the following factors 
to evaluate the need for assistance under the Public Assistance 
Program.
    (1) Estimated cost of the assistance. FEMA evaluates the estimated 
cost of Federal and non-Federal public assistance against the statewide 
population to give some measure of the per capita impact within the 
State. FEMA uses a figure of $2.32 per capita as an indicator that the 
disaster is of such size that it might warrant Federal assistance, and 
will adjust this figure annually based on the Consumer Price Index for 
all Urban Consumers. With the exception of the District of Columbia, 
the Commonwealth of Puerto Rico, U.S. Virgin Islands, the Commonwealth 
of the Northern Mariana Islands, American Samoa, and Guam, FEMA further 
adjusts each State's per capita indicator according to each State's 
Total Taxable Resources (TTR) as reported by the U.S. Department of 
Treasury. FEMA is establishing a minimum threshold of $1.535 million in 
public assistance damages per disaster in the belief that FEMA can 
reasonably expect even the lowest population States to cover this level 
of public assistance damage. FEMA will adjust this minimum threshold 
annually based on the Consumer Price Index for all Urban Consumers. 
FEMA will publish the adjusted figures annually in the Federal 
Register.
    (2) Localized impacts. FEMA evaluates the impact of the disaster at 
the county and local government level, as well as impacts at the 
American Indian and Alaskan Native Tribal Government levels, because at 
times there are extraordinary concentrations of damages that might 
warrant Federal assistance even if the statewide per capita is not met. 
This is particularly true where critical facilities are involved or 
where localized per capita impacts might be extremely high. For 
example, FEMA has at times seen localized damages in the tens or even 
hundreds of dollars per capita though the statewide per capita impact 
was low.
    (3) Insurance coverage in force. FEMA considers the amount of 
insurance coverage that is in force or should have been in force as 
required by law and regulation at the time of the disaster, and reduces 
the amount of anticipated assistance by that amount.
    (4) Hazard mitigation. To recognize and encourage mitigation, FEMA 
considers the extent to which State and local government measures 
contributed to the reduction of disaster damages for the disaster under 
consideration. For example, if a State can demonstrate in its disaster 
request that a Statewide building code or other mitigation measures are 
likely to have reduced the damages from a particular disaster, FEMA 
considers that in the evaluation of the request. This could be 
especially significant in those disasters where, because of mitigation, 
the estimated public assistance damages fell below the per capita 
indicator.
    (5) Recent multiple disasters. FEMA looks at the disaster history 
within the last 12-month period to better evaluate the overall impact 
on the State or locality. FEMA considers declarations under the 
Stafford Act as well as declarations by the Governor and the extent to 
which the State has spent its own funds.
    (6) Programs of other Federal assistance. FEMA also considers 
programs of other Federal agencies because at times their programs of 
assistance might more appropriately meet the needs created by the 
disaster.
* * * * *

Pete Gaynor,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2020-27094 Filed 12-11-20; 8:45 am]
BILLING CODE 9111-23-P


