[Federal Register Volume 87, Number 148 (Wednesday, August 3, 2022)]
[Rules and Regulations]
[Pages 47359-47380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16555]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

[Docket ID FEMA-2022-0020]
RIN 1660-AB10


Public Assistance Program's Simplified Procedures Large Project 
Threshold

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule and request for comments.

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SUMMARY: The Federal Emergency Management Agency (FEMA) is revising its 
regulations governing the Public Assistance program that provides 
grants to State, local, Tribal, and territorial governments, as well as 
eligible private nonprofit organizations, for debris removal, emergency 
protective measures, and the repair, replacement, or restoration of 
disaster-damaged facilities after a presidentially-declared major 
disaster to update the monetary threshold for when FEMA will process an 
application using ``simplified procedures.''

DATES: This rule is effective August 3, 2022. Comments must be received 
on or before October 3, 2022.

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

FOR FURTHER INFORMATION CONTACT: Tod Wells, Recovery Directorate, 
Federal Emergency Management Agency, 500 C Street SW, Washington, DC 
20472, [email protected], (202) 646-3834. Persons with speech or 
hearing difficulties may reach this number via teletype at 711.

SUPPLEMENTARY INFORMATION: 

1. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting comments and related materials. We will consider all 
comments and material received during the comment period.
    If you submit a comment, include the Docket ID FEMA-2022-0020, 
indicate the specific section of this document to which each comment 
applies, and give the reason for each comment. All submissions may be 
posted, without change, to the Federal e-Rulemaking Portal at http://www.regulations.gov, and will include any personal information you 
provide. Therefore, submitting this information makes it public. For 
more information about privacy and the docket, see 83 FR 48645.
    Viewing comments and documents: For access to the docket to read 
background documents or comments received, go to the Federal e-
Rulemaking Portal at http://www.regulations.gov.

2. Background and Discussion of Rule

    FEMA's Public Assistance (PA) program provides grants to State, 
local, Tribal, and territorial governments, as well as eligible private 
nonprofit (PNP) organizations, for debris removal, emergency protective 
measures, and the repair, replacement, or restoration of disaster-
damaged facilities after a Presidentially-declared major disaster.\1\ 
FEMA categorizes each grant award as either a small or large 
project,\2\ which is determined by a monetary threshold set each year 
by FEMA pursuant to statute. See section 422 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (Stafford Act), codified 
at 42 U.S.C. 5189.\3\ FEMA obligates money for a small project based on 
an estimate of the project costs, and FEMA obligates money for a large 
project based on actual project costs as the project progresses and 
cost documentation is provided to FEMA.\4\
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    \1\ The PA program is authorized by the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act, as amended, 42 U.S.C. 
5170b, 5172, 5173, 5192.
    \2\ A project is a logical grouping of work required as a result 
of the declared major disaster or emergency and may include eligible 
work at several sites. See 44 CFR 206.201(k); FEMA Policy 104-009-2, 
Public Assistance Program and Policy Guide, v.4 (PAPPG), pp. 60-63 
(June 1, 2020), available at https://www.fema.gov/sites/default/files/documents/fema_pappg-v4-updated-links_policy_6-1-2020.pdf.
    \3\ See also 44 CFR 206.203(c), 206.205. FEMA obligates money 
for a small project based on an estimate of the project costs; FEMA 
obligates money for a large project based on actual project costs as 
the project progresses and cost documentation is provided to FEMA.
    \4\ See 44 CFR 206.203(c); PAPPG, pp. 199-202.
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    In 2013, the Sandy Recovery Improvement Act (SRIA) \5\ amended 
section 422(b) of the Stafford Act and required FEMA to complete an 
analysis to determine whether an increase in the large project 
threshold was appropriate and submit to Congress a report on its 
findings not later than one year after January 29, 2013.\6\ On January 
29, 2014, FEMA submitted its report to Congress, which recommended 
increasing the maximum threshold from $68,500 \7\ to $120,000.\8\ 
Section 422(b)(2) of the Stafford Act required FEMA to implement the 
new threshold ``immediately'' following submission of the report to 
Congress, ``without regard

[[Page 47360]]

to chapter 5 of title 5'' of the United States Code, on Administrative 
Procedure, which includes a section on Rule making,\9\ (see Section 3.A 
below) and to adjust the threshold annually to reflect changes in the 
Department of Labor's Consumer Price Index for Urban Consumers (CPI-
U).\10\ Following submission of its report, FEMA published a final rule 
updating the maximum threshold to $120,000.\11\
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    \5\ Public Law 113-2, section 1107.
    \6\ 42 U.S.C. 5189(b)(1).
    \7\ The large project threshold for Fiscal Year (FY) 2014. 78 FR 
64232 (Oct. 28, 2013). See also https://www.fema.gov/assistance/public/applicants/per-capita-impact-indicator.
    \8\ A copy of this report is on regulations.gov under docket ID 
FEMA-2014-0009.
    \9\ 5 U.S.C. 553.
    \10\ 42 U.S.C. 5189(b)(2).
    \11\ 79 FR 10686 (Feb. 26, 2014).
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    In addition to the final rule, FEMA published a notice requesting 
comments from the public regarding the report that justified the 
increase.\12\ FEMA received 19 public comments, 18 of which were from 
16 States.\13\ Of these, eight States \14\ supported increasing the 
maximum threshold. Commenters noted benefits of the updated maximum 
threshold, such as increased State/local control over funding and 
decreased documentation burden, time, and expenses in administering PA 
grants, especially regarding reduced need for final reconciliation of 
actual costs, final inspections, funding increase requests, and 
monitoring. Commenters also noted that the ability to immediately 
disburse 75 percent of project costs after obligation will help 
expedite recovery in affected areas.
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    \12\ 79 FR 68899 (Nov. 19, 2014).
    \13\ FEMA received 18 comments from the following States: 
Alaska, Arizona, Arkansas, Idaho, Indiana, Kansas, New Jersey, New 
Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, 
South Dakota, Washington, and Wisconsin. (Alaska and Kansas each 
submitted two comments). FEMA received one comment from a private 
citizen from California.
    \14\ South Carolina (FEMA-2014-0009-0005); Idaho (FEMA-2014-
0009-0007); New Jersey (FEMA-2014-0009-0009); Oregon (FEMA-2014-
0009-0010); Wisconsin (FEMA-2014-0009-0011); Arkansas (FEMA-2014-
0009-0012); Alaska (FEMA-2014-0009-0020 and FEMA-2014-0009-0022); 
and Washington (FEMA-2014-0009-0021).
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    Five States \15\ opposed increasing the maximum threshold. Indiana 
noted that its State Administrative Plan requires reconciliation of 
costs, and that it performs audits in accordance with the Single Audit 
Act.\16\ Neither of these requirements should prevent adoption of an 
increase to the threshold. All non-Federal entities that expend 
$750,000 or more during the non-Federal entity's fiscal year in Federal 
awards are subject to the Single Audit Act and must have a single or 
program-specific audit conducted for that year in accordance with the 
provisions 2 CFR part 200.\17\ The scope of the audits are to ensure 
that non-Federal entities have complied with Federal statutes, 
regulations, and the terms and conditions of Federal awards.\18\ The 
State Administrative Plan each State is required to have for the PA 
program refers back to the audit procedures in 2 CFR part 200 and 
should be updated annually.\19\ This rule will change FEMA's 
regulations and the terms and conditions of PA grants with respect to 
the large project threshold. That means there will be no impact to 
States with respect to any Federal auditing requirements. It appears 
that this has since been understood and adopted by the State of 
Indiana; FEMA reviewed Indiana's 2021 State Administrative Plan and 
determined that it only requires reconciliation of costs for large 
projects.
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    \15\ Indiana (FEMA-2014-0009-0013); Arizona (FEMA-2014-0009-
0014); Ohio (FEMA-2014-0009-0015); North Carolina (FEMA-2014-0009-
0017); and Pennsylvania (FEMA-2014-0009-0018).
    \16\ The Single Audit Act, passed by Congress in 1984, requires 
most governmental recipients of Federal assistance to have annual 
financial or compliance audits. See 31 U.S.C. 7501 et seq.
    \17\ 2 CFR 200.501(a).
    \18\ 2 CFR 200.514(d).
    \19\ 44 CFR 206.207(b)(1)(iii)(H); 44 CFR 206.207(b)(3).
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    North Carolina expressed concern that an increase in the maximum 
threshold may increase the frequency of cost overruns and underruns, 
putting additional pressure on recipients to ensure that estimates are 
accurate. Since 2014, FEMA has taken concerns about the accuracy of its 
estimates into consideration, and has adopted changes within the PA 
program that have significantly improved, streamlined, and centralized 
its cost estimating process to establish more consistent estimating 
across all regions and disasters. This has resulted in continued 
improvements to the accuracy of all its estimates.\20\
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    \20\ To ensure that the estimation process is accurate, FEMA 
also conducted an analysis on Net Small Project Overruns (NSPOs), 
the process by which a subrecipient requests additional funding 
through the PA appeals process if its total cost incurred for all of 
its small projects exceeds the total amount FEMA obligated for those 
projects. The analysis showed that out of 627,656 total obligated 
small projects since 1997, there were only 20 instances of second 
appeal NSPOs (0.003 percent). Additionally, out of 137,913 total 
obligated small projects since 2013, there were only 70 instances of 
first appeal NSPOs (0.05 percent). Small projects make up a 
significant majority of the PA project universe; for example, since 
the adoption of the National PA Delivery Model in 2017, 45,944 out 
of 59,178 total projects were small projects, making up 78 percent 
of the total number of PA projects in that time. The number of first 
and second NSPO appeals in relation to the total number of small 
projects is not statistically significant. This indicates that the 
funding FEMA provides for small projects is, by and large, 
sufficient for applicants to complete all of their small projects. A 
copy of this report is on regulations.gov under docket ID FEMA-2014-
0009.
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    Arizona stated that it has a statutory requirement to audit all 
projects, and also noted that fronting a larger Federal share based on 
estimates could increase its burden when the estimated costs of a 
subrecipient's project differ from actual costs. FEMA reviewed 
Arizona's 2021 State Administrative Plan and, similar to Indiana, it 
appears that Arizona no longer has the statutory requirement because 
its 2021 Plan only requires reconciliation of costs for large projects. 
Arizona also objected to FEMA's implementing the change in threshold 
without prior consultation with the States. However, Congress 
explicitly directed FEMA to ``immediately'' establish the threshold 
``without regard to chapter 5 of title 5'' of the United States Code. 
42 U.S.C. 5189(b)(2)(A). As a result, FEMA immediately implemented the 
updated threshold in 2014 without seeking prior public comment, but 
sought post-promulgation comments on the report. FEMA intends to reach 
out specifically to the five States who objected in 2014 to ensure that 
they understand how to implement the increase and issue clarifying 
guidance, if necessary.
    Ohio and Pennsylvania both commented that because they pay for 25 
percent of projects (through the cost share), they were unlikely to 
change their procedures in order to ensure reconciliation.\21\ FEMA 
acknowledges that many States have their own requirements to reconcile 
all project costs, and may wish to ensure that local governments have a 
higher level of accuracy when completing PA projects based on the 
State's 25 percent contribution to their projects. While FEMA lacks 
control over what rules States may impose upon themselves, FEMA notes 
that the current threshold has failed to keep pace with the PA 
program's increased disaster spending, and increasing the threshold 
would greatly reduce the administrative burden and resources spent by 
FEMA and recipients without audit requirements. This reduction in 
administrative burden would result in expedited funding, facilitating 
quicker recovery in these areas. That some recipients impose upon 
themselves rules that may ultimately prevent their recovery in the most 
expedited manner does not mean that FEMA should deprive all recipients 
of the opportunity to expedite recovery.
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    \21\ Ohio also noted, however, that good quality Project 
Worksheets (PWs) and clear scopes of work would likely reduce its 
administrative costs.
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    Congress enacted section 422 of the Stafford Act to increase the 
administrative efficiency of the PA program. The simplified procedures 
authorized under section 422 allow FEMA to award funding for projects

[[Page 47361]]

under the threshold based on estimates, simplifying final accounting 
and project closeout procedures. This expedites FEMA's processing of PA 
grant funding by eliminating much of the administrative burden that 
FEMA experiences when awarding projects at or above the threshold 
(i.e., large projects), ultimately reducing FEMA's cost of 
administering PA funding. PA projects beneath the established threshold 
represent the vast majority of individual projects, but a small portion 
of FEMA's overall funding under the PA program. These procedures, 
therefore, allow FEMA to expedite its provision of Federal disaster 
assistance, saving FEMA, and by extension, the American taxpayer, time 
and money on small projects, but still provide financial oversight for 
the majority of funding provided under the PA program. Moreover, States 
without statutory audit requirements \22\ will also benefit from these 
efficiencies in their administration of PA grants.
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    \22\ States without audit requirements that supported the 
increase were Oregon (FEMA-2014-0009-0010); Arkansas (FEMA-2014-
0009-0011); and Alaska (FEMA-2014-0009-0020 and FEMA-2014-0009-
0022). Idaho (FEMA-2014-0009-0007), which reconciles actual costs on 
all projects, also supported the increase, as did South Carolina 
(FEMA-2014-0009-0005), which reconciles actual costs on 20 percent 
of small projects (and all large projects).
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    In 1988, when Congress set the original threshold at $35,000, it 
noted that ``damage survey reports of less than $35,000 have 
constituted 95% of all damage survey reports but only 32% of all 
expended dollars.'' \23\ Congress envisioned that these simplified 
procedures would allow ``. . . [applicants] [to] receive an amount 
estimated by the Federal Government . . . rather than the standard--and 
sometimes cumbersome--procedure of performing audits and inspections to 
verify the cost of an eligibility for payment of the costs of the 
work.'' \24\ Congress believed that this more streamlined approach 
would ``result in substantial savings of time and money that . . . 
should have a significant and beneficial impact on FEMA's overall 
program.'' \25\ Through the SRIA amendments to section 422(b), Congress 
again highlighted the importance of the administrative efficiency of 
the PA program when it directed FEMA to determine whether an increase 
in the threshold was appropriate and to review the threshold every 
three years.\26\ FEMA is mindful both of Congress' efforts to improve 
administrative efficiency of the program and its responsibility to be 
fiscal stewards of public funding.
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    \23\ See H.R. REP. NO. 100-517 (1988), p. 11. ``Damage survey 
reports'' is the former name of PA project worksheets.
    \24\ Id.
    \25\ Id.
    \26\ In 2013, the number of projects beneath the threshold had 
decreased from 95 percent (1988) to 88 percent.
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    Following 2014, FEMA continued to adjust the threshold annually to 
reflect changes in the CPI-U, as required under section 422(b)(2).\27\ 
Section 422(b)(3) requires FEMA to review the threshold every three 
years.\28\ FEMA conducted an analysis in 2017 and recommended no change 
to the threshold at that time.\29\ As a result, FEMA has only made 
annual CPI-U adjustments to the threshold since then.\30\
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    \27\ 42 U.S.C. 5189(b)(2). FEMA publishes the annual adjustments 
to the large project threshold at https://www.fema.gov/assistance/public/applicants/per-capita-impact-indicator. For more information 
on the National PA Delivery Model, see the Public Assistance 
Delivery Model Fact Sheet (Aug. 17, 2018), available at https://www.fema.gov/sites/default/files/2020-07/fema_pa_delivery-model_factsheet.pdf.
    \28\ 42 U.S.C. 5189(b)(3).
    \29\ A copy of this analysis is on regulations.gov under docket 
ID FEMA-2022-0020. During the period of 2014-2017, FEMA saw fewer 
disasters and, as a result, decreased disaster spending. Compared to 
FY 2013, when FEMA spent a total of $18.4 billion on recovery, FEMA 
spent under $2 billion annually in FYs 2014 to 2017.
    \30\ The current threshold, for Fiscal Year 2022, is $139,800. 
86 FR 63040 (Nov. 15, 2021); see also FEMA, Per Capita Impact 
Indicator and Project Thresholds, https://www.fema.gov/assistance/public/applicants/per-capita-impact-indicator (accessed Nov. 3, 
2021). Note, however, that the analysis included in this rule was 
conducted based on the Fiscal Year 2021 threshold of $132,800. See 
85 FR 69639 (Nov. 3, 2020).
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    Since FEMA's analysis in 2017, the United States has seen increased 
disaster activity either due to, or amplified or aggravated by, the 
climate crisis. For example, in 2017, Hurricanes Harvey, Irma, and 
Maria caused a combined total of $294.2 billion in damages,\31\ with 
FEMA providing over $49.9 billion in PA funding for these 
disasters.\32\ Damages from wildfires in that year and the next totaled 
approximately $46.2 billion; \33\ FEMA provided over $742 million in PA 
funding for the 2017 wildfires.\34\ In 2020, FEMA responded to 22 
events with losses exceeding $1 billion--the highest in its history--
which included a record number of tropical storms in the Atlantic and 
the Nation's most active wildfire year recorded.\35\ The estimated 
damages from these 22 events totaled approximately $95 billion, with 
over $6.5 billion comprising FEMA's share of non-COVID related PA 
funding.\36\
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    \31\ See National Oceanic & Atmospheric Administration (NOAA), 
National Centers for Environmental Information (NCEI), Billion-
Dollar Weather and Climate Disasters: Events, https://www.ncdc.noaa.gov/billions/events/US/1980-2021 (accessed Nov. 3, 
2021); see also https://www.washingtonpost.com/news/energy-environment/wp/2018/01/08/hurricanes-wildfires-made-2017-the-most-costly-u-s-disaster-year-on-record/.
    \32\ This estimate of PA funding is based on data from FEMA's 
Emergency Management Mission Integrated Environment (EMMIE) 
Enterprise Data Warehouse, as of Dec. 10, 2021.
    \33\ See NOAA NCEI, Billion-Dollar Weather and Climate 
Disasters: Events, https://www.ncdc.noaa.gov/billions/events/US/1980-2021 (accessed Nov. 3, 2021).
    \34\ This estimate of PA funding is based on data from FEMA's 
EMMIE Enterprise Data Warehouse, as of Dec. 10, 2021.
    \35\ See National Oceanic and Atmospheric Administration, 
``Record Number of Billion-Dollar Disasters Struck U.S. in 2020, 
Jan. 8, 2021, available at https://www.noaa.gov/stories/record-number-of-billion-dollar-disasters-struck-us-in-2020 (last accessed 
Nov. 3, 2021).
    \36\ Id. The estimate of PA funding is based on data from FEMA's 
EMMIE Enterprise Data Warehouse, as of Dec. 10, 2021.
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    In addition to increased natural disasters, in 2020 FEMA also 
issued an unprecedented 57 major disaster declarations in response to 
COVID-19,\37\ including every State, 5 territories, the Seminole Tribe 
of Florida, and the District of Columbia.\38\ Defeating COVID-19 
remains the Administration's top public health priority. As of January 
24, 2022, the Nation has lost more than 869,000 lives to COVID-19, 
which has particularly affected vulnerable populations who are at the 
highest risk of infection and adverse outcomes. It is the policy of the 
United States to prioritize and invest in the Nation's public health 
system to address health disparities that have been exposed and 
worsened by COVID-19 and build a stronger public health system that 
allows us to be ready for the next virus.\39\ In line with the goal of 
defeating the pandemic, the President directed FEMA to expand financial 
support of State, local, Tribal, and territorial partners by increasing 
the Federal cost share under PA to 100 percent to ensure safe re-
opening.\40\ FEMA also

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participates in the White House's COVID-19 Pandemic Testing Board, 
which coordinates the Federal Government's efforts to promote COVID-19 
testing and identifies barriers to increase testing among priority 
populations and high-risk groups,\41\ and has helped vaccinate more 
than 200 million Americans.\42\
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    \37\ COVID-19 is a communicable disease caused by severe acute 
respiratory syndrome coronavirus 2 (SARS-CoV-2), that was first 
identified as the cause of an outbreak of respiratory illness that 
began in Wuhan, Hubei Province, People's Republic of China. On March 
13, 2020, the President declared a nationwide emergency under 
section 501(b) of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, authorizing FEMA to provide assistance for 
emergency protective measures to respond to the COVID-19 pandemic. 
COVID-19 Emergency Declaration available at https://www.fema.gov/news-release/2020/03/13/covid-19-emergency-declaration (accessed 
Dec. 15, 2020).
    \38\ See https://www.fema.gov/disasters/ (accessed Dec. 15, 
2020).
    \39\ Proclamation 10175 of April 5, 2021, ``National Public 
Health Week, 2021,'' 86 FR 18171 (Apr. 8, 2021).
    \40\ See Memorandum of February 2, 2021, ``Maximizing Assistance 
From the Federal Emergency Management Agency To Respond to COVID-
19,'' 86 FR 8281 (Feb. 5, 2021).
    \41\ Executive Order 13996, ``Establishing the COVID-19 Pandemic 
Testing Board and Ensuring a Sustainable Public Health Workforce for 
COVID-19 and Other Biological Threats,'' 86 FR 7197 (Jan. 26, 2021).
    \42\ https://www.fema.gov/blog/100-days-fema-and-our-partners-action (last accessed May 4, 2021).
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    In Fiscal Year 2020 declarations, FEMA's funding under the PA 
program is over $35.9 billion. Although costs for COVID-19 accounted 
for 93 percent of this funding,\43\ as climate change continues to make 
natural disasters more frequent and more destructive, FEMA expects even 
greater spending on recovery will be required in the future.\44\
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    \43\ FEMA's COVID-19 PA Obligations are $33.5 billion as of 
November 8, 2021.
    \44\ Since 1980, for instance, the U.S. has sustained 291 
climate-related disasters where damages reached or exceeded $1 
billion, with the total cost of these events alone exceeding $1.900 
trillion. National Oceanic and Atmospheric Administration, 
``Billion-Dollar Weather and Climate Disasters: Overview,'' 
available at https://www.ncdc.noaa.gov/billions/ (last accessed Apr. 
12, 2021).
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    In 2020, FEMA conducted another analysis to ensure that FEMA is 
maximizing the benefits of simplified procedures in light of its more 
recent disaster spending, while also effectively managing risk 
associated with the provision of Federal disaster assistance and the 
responsible stewardship of public funds.\45\ In particular, FEMA 
considered the extent to which increasing the threshold would reduce 
the administrative burden and resources spent by FEMA and recipients 
without statutory audit requirements, and how that reduction in 
administrative burden would result in expedited funding, facilitating 
quicker recovery. FEMA also considered past performance, specifically 
how the current threshold has failed to keep pace with the PA program's 
increased disaster spending. Regarding accountability measures, FEMA 
concluded that the reduced scrutiny accompanying an increased threshold 
would not pose a significant risk given FEMA's improvements to its cost 
estimating procedures.\46\ Based on this analysis, FEMA determined that 
it should increase the threshold for simplified procedures to 
$1,000,000. FEMA determined that projects below the Fiscal Year (FY) 
2021 CPI-adjusted threshold of $132,800 represented only 76.8 percent 
of the total number of projects and 2.4 percent of total funding. 
Raising the threshold to $1,000,000 achieves the same approximate 
percentage of total projects as Congress' original adoption of 
simplified procedures in 1988 at 95 percent.\47\ Raising the threshold 
to $1,000,000 accounts for a larger amount of small projects (from 76.8 
to 94.4 percent) and an increase in the percentage of total funding 
(from 2.4 to 8.4 percent). This comports with Congress' original goal 
of maximizing the number of total projects eligible for simplified 
procedures while minimizing the amount of funding subject to the risks 
inherent to simplified final accounting. FEMA will continue to adjust 
annually for inflation based on the CPI-U.
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    \45\ A copy of this analysis is on regulations.gov under docket 
ID FEMA-2022-0020.
    \46\ See infra, note 20.
    \47\ In FEMA's 2014 report, it noted that projects under 
$400,000 made up 98 percent of projects. Projects under $1,000,000 
now make up 95 percent of projects primarily due to extreme outlier 
projects. In 2014, FEMA had only had one $1 billion project ever, 
while it has had eight projects over $1 billion since 2017, two of 
which are in the ~$10 billion range. These projects heavily skew the 
curve. The reason for the very large projects may be related to both 
the increase in very large disasters since 2014, and FEMA's current 
method of consolidating projects. Stafford Act section 428, ``Public 
Assistance Program Alternative Procedures,'' was authorized by SRIA 
in 2013 and allows FEMA to combine multiple projects into one 
project. (The PA Program does not combine projects unless they are 
428 projects; PA only combines sites when the project is not a 428 
project). Following the introduction of section 428, FEMA has seen a 
notable uptick in project costs under the 428 consolidated 
designation.
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    This rule also adds a new paragraph ``(c)(3)'' in section 206.203 
providing that the new threshold will apply to all Project Worksheets 
(PWs) for major disasters and emergencies declared on or after March 
13, 2020, that have not been obligated as of the effective date of this 
rule.\48\ For PWs from major disasters and emergencies declared before 
March 13, 2020, or that have already been obligated, the threshold will 
continue to be the amount previously published in the Federal Register 
for the applicable fiscal year.\49\ As a result, this rule's 
applicability to unobligated future PWs will ensure FEMA and recipients 
can more efficiently process unobligated PWs for (for instance) COVID-
19 declarations, which continue to fund important pandemic-related 
work, while avoiding unnecessary confusion and administrative burden by 
not affecting previous project size determinations. FEMA notes that on 
March 1, 2022, the President directed FEMA to continue funding 
assistance for COVID-19 declarations at a 100 percent Federal share 
through July 1, 2022.
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    \48\ FEMA chose to limit the application of the new threshold 
based on the date of obligation, rather than the date of the 
disaster, because the date of obligation is the point at which FEMA 
and the recipient agree on the estimate.
    \49\ See https://www.fema.gov/assistance/public/applicants/per-capita-impact-indicator.
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3. Regulatory Analysis

A. Administrative Procedure Act

    The Administrative Procedure Act (APA) generally requires agencies 
to publish a notice of proposed rulemaking in the Federal Register and 
provide interested persons the opportunity to submit comments. See 5 
U.S.C. 553(b) and (c). The APA provides an exception to this prior 
notice and comment requirement for matters relating to public property, 
loans, grants, benefits, or contracts. 5 U.S.C. 553(a)(2). FEMA's PA 
program is a grant program through which FEMA obligates funding to 
State, local, Tribal, and territorial governments, as well as eligible 
PNP organizations, for debris removal, emergency protective measures, 
and the repair, replacement, or restoration of disaster-damaged 
facilities after a presidentially-declared major disaster. Because this 
rule relates to FEMA's obligation of grant funding under the PA 
program, it is exempt from notice and comment rulemaking under the APA.
    FEMA acknowledges its general policy to provide for public 
participation in rulemaking unless it determines that circumstances 
warrant a departure from that general policy.\50\ The circumstances 
presented here warrant such a departure. First, FEMA is still receiving 
and processing COVID-19 PWs and will continue to fund them at 100 
percent Federal funding through at least July 1, 2022. Taking pre-
promulgation comment on the rule would delay application of the new 
threshold and the more efficient processing of unobligated PWs for 
COVID-19 declarations, which continue to fund important pandemic-
related work.
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    \50\ 44 CFR 1.3(a) and (c).
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    Second, the APA also provides an exception to prior notice and 
comment for rules of agency organization, procedure, or practice. 5 
U.S.C. 553(b)(A). In addition to falling under the APA's exception to 
notice and comment for rules relating to grants, this final rule is 
also a procedural rule, promulgated for agency efficiency purposes, 
because it is limited to updating FEMA's internal procedures regarding 
the dollar figure at or below which FEMA will obligate funding based on 
an estimate of project costs, and above which FEMA will obligate

[[Page 47363]]

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

    \51\ ``The words of the statute must be read in their context 
and with a view to their place in the overall statutory scheme . . . 
A court must therefore interpret the statute as a symmetrical and 
coherent regulatory scheme, . . . and fit, if possible, all parts 
into an harmonious whole.'' FDA v. Brown & Williamson Tobacco, 529 
U.S. 120, 132-33 (2000).
---------------------------------------------------------------------------

    Legislative history suggests that Congress intended that FEMA 
maintain administrative efficiency in the PA program with an adjustable 
threshold.\52\ The three-year review cycle coupled with an APA waiver 
creates such administrative efficiency. The phrase ``threshold for 
eligibility'' refers generally to the simplified procedure threshold 
and ``under this section'' refers to the review process established 
under the section. Under that review process, as established in 
subsection (b)(2), FEMA completes an analysis of the threshold, submits 
a report to Congress regarding the analysis, and then immediately 
establishes the new threshold without regard to the APA.
---------------------------------------------------------------------------

    \52\ See H.R. REP. NO. 100-517 (1988), p. 11.
---------------------------------------------------------------------------

    In so interpreting the statute, FEMA also relies on the fact that 
42 U.S.C. 5189(b) is silent as to the expiration of the APA waiver. 
Generally, if Congress knows how to say something but chooses not to, 
its silence is controlling.\53\ 42 U.S.C. 5189(b) contains no 
restrictions typically found in other APA waivers. There is an 
instructive example of a time-limited APA waiver within another section 
of the Stafford Act. 42 U.S.C. 5174, which governs the Individual 
Assistance program, generally requires FEMA to promulgate regulations 
to implement the program.\54\ However, as amended by the Disaster 
Recovery Reform Act,\55\ it states that FEMA may ``waive notice and 
comment rulemaking'' to carry out new authority for a state-managed 
housing program as a pilot program if FEMA determined that doing so was 
necessary for expeditious implementation.\56\ This APA waiver for the 
state-managed housing program, however, was limited to two years and 
since FEMA did not publish final regulations within that time frame, 
the waiver authority and authority to conduct a pilot expired.\57\ As 
with other APA waivers, Congress in 42 U.S.C. 5174 provided a 
definitive temporal limitation to its APA waiver (and specified a 
consequence associated with that limitation), whereas in 42 U.S.C. 5189 
Congress provided none. This further supports the conclusion that 
Congress did not intend to limit the APA waiver for establishing a 
simplified procedures threshold.
---------------------------------------------------------------------------

    \53\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir. 
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995), 
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th 
Cir. 2000).
    \54\ 42 U.S.C. 5174(j).
    \55\ Public Law 115-254, div. D, Oct. 5, 2018, 132 Stat. 3438.
    \56\ 42 U.S.C. 5174(f)(3)(J)(i).
    \57\ See 42 U.S.C. 5174(f)(3)(J)(ii)-(iii).
---------------------------------------------------------------------------

    Further, the APA generally requires that substantive rules 
incorporate a 30-day delayed effective date. 5 U.S.C. 553(d). Because 
this rule is a procedural rule and is also otherwise exempt from the 
APA's notice and comment requirement, FEMA finds that a delayed 
effective date is unnecessary.

B. Executive Orders 12866, ``Regulatory Planning and Review'' and 
13563, ``Improving Regulation and Regulatory Review''

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') direct agencies 
to assess the costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility.
    This final rule has been designated a ``significant regulatory 
action'' although not economically significant, by the Office of 
Management and Budget (OMB) under section 3(f) of Executive Order 
12866. Accordingly, the rule has been reviewed by OMB.
i. Need for Regulation
    In accordance with Executive Orders 12866, 13563, and Office of 
Management and Budget (OMB) Circular A-4, an agency must identify the 
problem that it intends to address through regulatory action. The 
action may be taken to address a statutory or judicial directive, 
significant market failure, or to meet some other compelling public 
need. This final rule responds to a statutory directive and will 
improve the functioning of government by changing the maximum threshold 
to a level that improves efficiency and reduces administrative costs. 
Because PA is a Federal program, regulation at the Federal level is 
appropriate.
    Section 1107 of the Sandy Recovery Improvement Act of 2013 (SRIA) 
\58\ amends section 422 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act \59\ authorizing Simplified Procedures for the 
PA program under

[[Page 47364]]

sections 403, 406, 407, and 502.\60\ The objective of Simplified 
Procedures is to allow FEMA to quickly provide grant funding for 
recovery while lowering the administrative burden in cases where the 
benefit of uncovering fraud or waste is low. Every three years, after 
the initial implementation of the thresholds, the President, acting 
through the FEMA Administrator, shall review the threshold for 
Simplified Procedures under the Stafford Act.\61\ Since the authority 
and direction are present in statute, updating the thresholds in line 
with the statutory requirement is both appropriate and necessary. 
Without this update, moreover, both FEMA and recipients will continue 
to not be able to fully realize the benefits of Simplified Procedures.
---------------------------------------------------------------------------

    \58\ Public Law 113-2, section 1107, 127 Stat. 46.
    \59\ 42 U.S.C. 5189.
    \60\ 42 U.S.C. 5170b, 5172, 5173, 5192.
    \61\ 42 U.S.C. 5189(b)(3).
---------------------------------------------------------------------------

    Since the adoption of Simplified Procedures, the maximum threshold 
has gradually shifted away from the initial policy benchmarks. Congress 
set the threshold at $35,000 in 1988, which represented 95 percent of 
FEMA projects and 32 percent of PA disaster assistance funding.\62\ 
Despite past adjustments to the maximum threshold and increases for 
inflation, small projects below the current threshold account for fewer 
than 76.8 percent of the total number of projects and 2.4 percent of 
funding due to the increasing frequency and magnitude of major weather 
and climate disasters.63 64 From 1990-1999, FEMA obligated 
on average about $2.7 billion in PA funding for disasters per year.\65\ 
From 2000-2009, FEMA obligated on average about $5.8 billion in PA 
funding for disasters per year.\66\ From 2010-2019, FEMA obligated on 
average about $8.1 billion in PA funding for disasters per year.\67\ 
Prior adjustments include yearly adjustments to the maximum threshold 
every fiscal year based on the CPI-U and a thorough review by the 
program every three years. FEMA is updating its regulations, as 
required by section 422(b), based on the findings of the 2020 review.
---------------------------------------------------------------------------

    \62\ See H.R. REP. NO. 100-517 (1988).
    \63\ National Oceanic & Atmospheric Administration (NOAA). 
(2021). 2020 U.S. billion-dollar weather and climate disasters in 
historical context. Adam B. Smith. https://www.climate.gov/news-features/blogs/beyond-data/2020-us-billion-dollar-weather-and-climate-disasters-historical.
    \64\ U.S. Global Change Research Program (USGCRP). (2018). 
Fourth National Climate Assessment, Chapter 2: Our Changing Climate. 
https://nca2018.globalchange.gov/chapter/2/.
    \65\ Estimate based on data from FEMA's EMMIE Enterprise Data 
Warehouse, as of Dec. 10, 2021.
    \66\ Id.
    \67\ Id. FEMA analyzed the data for obligated PA projects up to 
September 30, 2020. All amounts are shown in 2020 dollars. 
Obligation of disaster funding can occur after the disaster year.
---------------------------------------------------------------------------

ii. Affected Population
    The final rule will affect all potential applicants for Federal 
assistance under the PA program. Eligible applicants for PA include 56 
State and territorial governments, 573 Federally recognized Indian 
Tribal governments, local governments, and certain PNPs.
iii. Summary of Regulatory Changes

                                           Table 1--Summary of Changes
----------------------------------------------------------------------------------------------------------------
               Item                        Current                   Change                      Impact
----------------------------------------------------------------------------------------------------------------
Maximum threshold for Simplified    $132,800 in FY 2021,   $1,000,000 for unobligated  --The annual average
 Procedures.                         adjusted every         PWs processed on or after   benefit will be
                                     fiscal year using      the effective date of the   $6,464,964. The total
                                     CPI-U.                 rule for major disasters    net 3-year benefit
                                                            and emergencies declared    discounted at 3 percent
                                                            on or after March 13,       and 7 percent,
                                                            2020, adjusted every        respectively, are
                                                            fiscal year using CPI-U.    18,286,871 and
                                                                                        $16,966,108. The
                                                                                        annualized benefit is
                                                                                        $6,464,964 and
                                                                                        $6,464,964 at the 3 and
                                                                                        7 percent discount
                                                                                        rates, respectively.
                                                                                       --The annual cost will be
                                                                                        $10,454 for just the
                                                                                        first year. The total 3-
                                                                                        year net cost discounted
                                                                                        at 3 percent and 7
                                                                                        percent, respectively,
                                                                                        are $10,150 and $9,770.
                                                                                        The annualized cost is
                                                                                        $3,588 and $3,723 at the
                                                                                        3 and 7 percent
                                                                                        respective discount
                                                                                        rates.
                                                                                       --The total 3-year
                                                                                        transfer payments from
                                                                                        FEMA to the recipients
                                                                                        discounted at 3 and 7
                                                                                        percent are $40,803,651
                                                                                        and $37,856,623,
                                                                                        respectively. This
                                                                                        estimated transfer is
                                                                                        $14,425,330 annualized.
----------------------------------------------------------------------------------------------------------------

iv. Methodology
    This economic analysis adheres to the guidelines in: Executive 
Order 12866, ``Regulatory Planning and Review'' and amendments; 
Executive Order 13563, ``Improving Regulation and Regulatory Review;'' 
and the Office of Management and Budget's (OMB) Circular A-4 on 
Regulatory Analysis.
    The methodology discussed below pertains to the Regulatory Impact 
Analysis (RIA) assessing the costs, benefits, and transfers associated 
with an increase of the PA small project maximum threshold to 
$1,000,000 for major disasters and emergencies declared on or after 
March 13, 2020, for unobligated projects.\68\ The maximum threshold 
will be implemented to capture projects necessitated by the COVID-19 
pandemic.
---------------------------------------------------------------------------

    \68\ For FY 2021, the maximum threshold for PA is $132,800. 
While in 2020, it was $131,100. The final rule will be implemented 
for major disasters and emergencies declared on or after March 13, 
2020, for unobligated projects.
---------------------------------------------------------------------------

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

[[Page 47365]]

dates between August 25, 2017, through September 30, 2020.\69\
---------------------------------------------------------------------------

    \69\ The 2020 Review includes data with declaration dates from 
August 25, 2017 through November 8, 2021.
---------------------------------------------------------------------------

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

    \70\ For more information on the National PA Delivery Model, see 
the Public Assistance Delivery Model Fact Sheet published on August 
17, 2018, available at https://www.fema.gov/sites/default/files/2020-07/fema_pa_delivery-model_factsheet.pdf (last accessed Feb. 1, 
2022).
---------------------------------------------------------------------------

    FEMA typically uses 10 years of historical data, analyzes it, then 
calculates a 10-year forward looking estimate for benefit, cost, and 
transfers. However, due to the data limitations discussed above, FEMA 
was only able to obtain 3.1 years of historical data. For the purpose 
of this analysis, FEMA estimated the benefits, costs, and transfers for 
the next three years, since the Stafford Act requires FEMA to 
reevaluate the maximum threshold every three years.
    FEMA obtained additional data to estimate wage rates from the 
Office of Personnel Management (OPM) and Bureau of Labor Statistics 
(BLS). All wage rate data is in year 2020 dollars. Burden hours 
associated with applying for and processing small and large projects 
were determined through FEMA internal assessments at the regional level 
where the average number of hours involved to close out small and large 
projects was calculated.
    To estimate the impacts of this regulation, FEMA assessed the 
number of projects classified as small projects at the current 
threshold (no action baseline) and after the threshold is raised to 
$1,000,000.
v. Assumptions
    Project cost data in GM and obligation/deobligation data in EMMIE 
is reported in nominal dollars for their respective year. Due to the 
projects spanning multiple years from 2017 through 2020, the project 
cost data for each project was adjusted to year 2020 dollars using the 
CPI-U. Their status as either small or large was then assessed using 
the thresholds in 2020 dollars ($132,800 and $1,000,000).
    This analysis calculated the Present Value (PV) of cost and 
transfer flows. PV calculations permit comparisons of cost and benefit 
streams that involve different time paths. FEMA used the following 
formula to calculate these flows:
[GRAPHIC] [TIFF OMITTED] TR03AU22.000

where ``r'' is the discount rate, and ``t'' is the number of years in 
the future that the benefits or costs are expected to occur. Per OMB 
Circular A-4, FEMA used real discount rates of three percent and seven 
percent to discount benefits and costs measured in constant dollars. 
Unlike typical market interest rates, real rates exclude the expected 
rate of future price inflation. These figures estimate the value of 
future benefits and costs adjusted for differences in their timing.
vi. Baseline
    Following guidance in OMB Circular A-4, FEMA assessed each impact 
of this rule against a no action baseline. A no action baseline is an 
assessment of the way the world would look absent this rule. For this 
analysis, the no action baseline is a maximum threshold that remains at 
$132,800, in 2020 dollars.
vii. Number of Projects and Total Dollars
    To search for potential alternative thresholds, FEMA first analyzed 
the current situation if no changes were made to the maximum threshold 
for FY 2021 beyond the annual CPI-U adjustment. FEMA looked at the 
number of projects and total dollars by project amount since the 
adoption of the PA delivery model. Small projects, which are projects 
with total project costs below the $132,800 threshold, made up 76.8 
percent, or 47,376, of the total count of 61,710 projects. Large 
projects, which are projects with a total project cost at or above the 
threshold, accounted for 23.2 percent, or 14,334 of the total count of 
61,710 projects. From August 25, 2017 through FY 2020 (3.1 years), the 
funding of small projects was $1.6 billion (2.4 percent) and $66.0 
billion (97.6 percent) for large projects.
    FEMA also looked at the number of projects and total dollars over 
the same time period had $1,000,000 been the threshold. Small projects 
would have accounted for 94.4 percent, or 58,234, of the total count of 
61,710 projects. Large projects would have accounted for 5.6 percent, 
or 3,476, of the total count of 61,710 projects. The funding of small 
projects would have been $5.7 billion (8.4 percent) and $62.0 billion 
(91.6 percent) for large projects. This would account for a difference 
of 10,858 projects classified as small under the $1,000,000 threshold 
that were classified as large under the $132,800 threshold (14,334-
3,476).
viii. Cost
    FEMA estimates that there will be a one-time familiarization cost 
of $10,454 associated from changing the maximum threshold from $132,800 
to $1,000,000 for unobligated future projects for major disasters and 
emergencies declared on or after March 13, 2020, as discussed later in 
this analysis. The total 3-year net cost rate discounted at 3 percent 
and 7 percent, respectively, are $10,150 and $9,770. The annualized 
cost is $3,588 and $3,723 at the 3 and 7 percent respective discount 
rates.
    Small projects are subject to less scrutiny than large projects and 
by increasing the maximum threshold to $1,000,000, a total of 10,858 
more projects would have been classified as small projects that were 
classified as large projects under the current threshold of $132,800.
    Under the $1,000,000 threshold, the small projects will be subject 
to less scrutiny compared to the no action

[[Page 47366]]

baseline. This could potentially increase the risk of inaccurate 
reporting and decrease the ability for FEMA to identify and remedy 
noncompliance for these projects. This risk already exists for small 
projects, as recipients and subrecipients are only required to certify 
that they spent the money appropriately according to FEMA's policy. 
Conversely, recipients and subrecipients of large projects are required 
to fill out additional paperwork and provide proof to verify their 
spending.
    When a recipient or subrecipient applies for PA funding, they would 
complete the phases of the Public Assistance delivery model.\71\ These 
phases are 1. Operational planning, 2. Impacts and eligibility, 3. 
Scoping and costing, 4. Final review, 5. Obligation and recovery 
transition, 6. Post-award monitoring and amendments, and 7. Final 
reconciliation and closeout. FEMA does not perform a final inspection 
of completed small projects; however, the applicants must certify that 
the subapplicants completed the work in compliance with all applicable 
laws, regulations, and policies.\72\ Noncompliance would occur if the 
recipient or subrecipient did not complete the work for a project that 
has been obligated by FEMA based on the Statement of Work (SOW). FEMA 
assumes that it is rare for noncompliance to occur since the applicants 
must certify the work and would be subject to penalties if they certify 
the completion of work when that information is inaccurate. For this 
reason, FEMA assumes that the cost to FEMA for noncompliance is 
minimal. Data is not available to estimate how common noncompliance 
occurs in small projects. FEMA acknowledges this risk exists, but is 
following the lead of Congress that believes that having a large dollar 
threshold for small projects creates a more streamlined approach that 
would ``result in substantial savings of time and money that . . . 
should have a significant and beneficial impact on FEMA's overall 
program.'' \73\
---------------------------------------------------------------------------

    \71\ FEMA. How to Apply for Public Assistance. https://www.fema.gov/assistance/public/apply#phases. Last accessed on Dec. 
1, 2021.
    \72\ See Stafford Act Sec.  422 (42 U.S.C. 5189).
    \73\ See H.R. REP. NO. 100-517 (1988), p. 11; see also, e.g., 
OFFICE OF INSPECTOR GEN., ASSESSMENT OF FEMA'S PUBLIC ASSISTANCE 
PROGRAM POLICIES AND PROCEDURES (2009), available at http://www.oig.dhs.gov/assets/Mgmt/OIG_10-26_Dec09.pdf (recommended 
increasing the maximum threshold because of the administrative 
efficiency and streamlined process for all parties); U.S. GEN. 
ACCOUNTING OFFICE, DISASTER ASSISTANCE: IMPROVEMENTS NEEDED IN 
DETERMINING ELIGIBILITY FOR PUBLIC ASSISTANCE (1996), available at 
http://www.gao.gov/assets/160/155459.pdf (recommended increasing the 
minimum threshold to increase administrative efficiency); HOMELAND 
SEC. STUDIES AND ANALYSIS INST., ANALYSIS OF THE FEMA PUBLIC 
ASSISTANCE (PA) PROGRAM (2011), available at http://assets.fiercemarkets.net/public/sites/govit/fema_foia_perera_bottomupreview.pdf (recommended increasing the 
minimum threshold to increase administrative efficiency).
---------------------------------------------------------------------------

    A subrecipient may request additional funding through the PA 
appeals process, also known as the Net Small Project Overrun (NSPO) 
process, if the cost incurred for all of its small projects exceeds the 
total amount requested by the subrecipient for which FEMA has already 
obligated for those projects. Subrecipients do not have this option for 
large projects. Increasing the maximum threshold to $1,000,000 would 
result in more small projects, which would mean that subrecipients 
would have more opportunities to apply for additional funds. 
Historically, only 0.05 percent of small projects have had first appeal 
NSPOs and 0.003 percent have had second appeal NSPOs.\74\ Raising the 
maximum threshold to $1,000,000 would lead to 10,858 more small 
projects over the 3.1 year period, and approximately 5.8 additional 
NSPOs (10,858 x (.05 percent in first appeal NSPOs + 0.003 percent in 
second appeal NSPOs)) over the time period, or fewer than 2 annually 
(5.8 additional NSPOs / 3.1 years). These additional NSPOs would 
require time from subrecipients to apply and FEMA to process. FEMA 
cannot estimate the number of hours due to a lack of data available on 
time estimates for NSPOs.
---------------------------------------------------------------------------

    \74\ Out of 137,913 total obligated small projects since 2013, 
there were only 70 instances of first appeal NSPOs (0.05 percent). 
Out of 627,656 total obligated small projects since 1997, there were 
only 20 instances of second appeal NSPOs (0.003 percent).
---------------------------------------------------------------------------

Familiarization Costs for Recipients
    The increase of the maximum threshold to $1,000,000 for unobligated 
future project worksheets for major disasters and emergencies declared 
on or after March 13, 2020, will require time for the recipients to 
familiarize themselves with the changes made in this final rule. The 
total cost for familiarization would be $10,454 for the first year. 
FEMA estimates recipients would spend one hour to familiarize 
themselves with this change. FEMA assumes a State Government Chief 
Executive, a senior level government official, or equivalent 
occupation, would read the existing and updated regulations to 
understand the changes.\75\ FEMA obtained the wage rate of $58.34 for a 
State Government Chief Executive from BLS Occupational Employment 
Statistics (OES) data.\76\ To account for employee benefits, the fully-
loaded hourly mean wage rate for Chief Executives is $93.34 ($58.34 
hourly mean wage for Chief Executives x 1.6 wage rate multiplier for 
State and local government workers).\77\ FEMA used 56 States and 
territories in the estimate as this is the level from which a PA 
disaster declaration request is made. FEMA assumes there would be at 
least 112 (56 States and territories x 2) Chief Executives that review 
the changes, two from each State and territories. FEMA estimates it 
would cost $10,454 for recipients to familiarize themselves with the 
changes ($93.34 fully-loaded hourly mean wage rate x 1 hour x 112 Chief 
Executives). This will be a one-time cost for the recipients in the 
first year.
---------------------------------------------------------------------------

    \75\ Estimates for time and wage rates were taken from the 
Factors Considered When Evaluating a Governor's Request for 
Individual Assistance for a Major Disaster Final Rule, 84 FR 10632, 
10649 (Mar. 21, 2019).
    \76\ BLS OES, May 2020, State Government, Standard Occupational 
Code 11-1011 for Chief Executives, mean wage. https://www.bls.gov/oes/2020/may/oes111011.htm. Last accessed on July 16, 2021.
    \77\ Bureau of Labor Statistics. Employer Costs for Employee 
Compensation, Table 1. ``Employer costs per employee compensation 
March 2020. Retrieved from https://www.bls.gov/news.release/archives/ecec_06182020.pdf. Accessed on October 19, 2021. The wage 
multiplier is calculated by dividing total compensation for State 
and local government workers of $52.45 by Wages and salaries for 
State and local government workers of $32.62 per hour yielding a 
benefits multiplier of approximately 1.6.
---------------------------------------------------------------------------

    FEMA assumes the States and territories regularly update their 
emergency response networks and local emergency management divisions on 
changes in the field and the States and territories will disseminate 
the regulatory changes through each State's and territory's respective 
process. FEMA expects there to be no additional implementation costs.
Summary of Costs
    There is an unquantifiable risk of an increase in noncompliance due 
to a lower level of oversight on small projects that are classified as 
large projects under the no action baseline.
    FEMA estimates that the cost associated from changing the maximum 
threshold from $132,800 to $1,000,000 for unobligated projectss for 
major disasters and emergencies declared on or after March 13, 2020, 
would be $10,454. This cost is for familiarization of the $1,000,000 
maximum threshold for these unobligated projects.

[[Page 47367]]

    The following calculations are estimates of costs for three years 
in the future. The annual cost will be $10,454 for only the first year. 
The average cost will be $3,485 ($10,454 / 3) each year. The discounted 
total net 3-year cost rate at 3 percent and 7 percent, respectively, 
are $10,150 and $9,770. The annualized cost is $3,588 and $3,723 at the 
3 and 7 percent discount rates. (See Table 2).

                                  Table 2--Estimated Cost Over a 3-Year Period
                                                     [2020$]
----------------------------------------------------------------------------------------------------------------
                                                                                    Annual cost     Annual cost
                              Year                                  Total cost     discounted at   discounted at
                                                                                        3%              7%
----------------------------------------------------------------------------------------------------------------
1...............................................................         $10,454         $10,150          $9,770
2...............................................................               0               0               0
3...............................................................               0               0               0
                                                                 -----------------------------------------------
    Total.......................................................          10,454          10,150           9,770
----------------------------------------------------------------------------------------------------------------
Annualized......................................................                           3,588           3,723
----------------------------------------------------------------------------------------------------------------

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

    \78\ See 44 CFR 206.201(k); FEMA Policy 104-009-2, Public 
Assistance Program and Policy Guide, v.4, pp. 60-63 (June 1, 2020), 
available at https://www.fema.gov/sites/default/files/documents/fema_pappg-v4-updated-links_policy_6-1-2020.pdf.
---------------------------------------------------------------------------

Cost Savings to FEMA
    Processing a small project takes less time for FEMA to process than 
a large project. If the maximum threshold was $1,000,000, it would have 
resulted in a $13,246,760 administrative cost savings for FEMA, over a 
3.1-year period.
    The amount of time that FEMA spends to close out a project varies 
depending on whether it is classified as a large or small project. 
Based on State and FEMA regional offices' input to a National Emergency 
Management Association (NEMA) report, on average, each large project 
takes 24.8 hours and each small project takes 4.9 hours to close out, a 
difference of 19.9 hours (24.8 hours - 4.9 hours) per project.\79\ The 
average amount of time FEMA spends to close out a large project is not 
dependent upon the dollar amount associated with the project. FEMA used 
the average hourly wage of $41.99 (($34.76 GS 11 Step 5 + $41.66 GS 12 
Step 5 + $49.54 GS 13 Step 5) / 3) based on OPM's locality pay area of 
rest of U.S. for 2020.\80\ FEMA calculated the fully loaded hourly wage 
by multiplying the average hourly wage by 1.46 for civilian workers, 
resulting in $61.31 ($41.99 x 1.46) per hour.\81\ FEMA multiplied the 
time for large and small projects by the fully loaded hourly wage, 
resulting in $1,520.49 ($61.31 x 24.8 hours) for the closing cost for 
large projects and $300.42 ($61.31 x 4.9 hours) for the closing cost 
for small projects. This results in the administrative efficiencies 
between large and small projects, with a difference of -$1,220.07 
($300.42 - $1,520.49). FEMA estimates that, on average, it saves the 
agency $1,220 per PW to process a small project over a large project. 
(See Table 3).
---------------------------------------------------------------------------

    \79\ ``Determination on the Public Assistance Simplified 
Procedures Thresholds: Fiscal Year 2014 Report to Congress, Analysis 
Report for Sandy Recovery Improvement Act of 2013'' (Jan. 29, 2014), 
page 26. Available at https://www.regulations.gov/document/FEMA-2014-0009-0002.
    \80\ Pay & Leave: Salaries & Wages for locality pay area of rest 
of U.S. OPM. Available at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/20Tables/html/RUS_h.aspx. 
Last accessed: May 6, 2021.
    \81\ Bureau of Labor Statistics, Employer Costs for Employee 
Compensation, Table 1. ``Employer costs for employee compensation: 
March 2020.'' Available at https://www.bls.gov/news.release/archives/ecec_06182020.pdf. Accessed November 2, 2021. The wage 
multiplier is calculated by dividing total compensation for civilian 
workers of $37.73 by Wages and salaries for civilian workers of 
$25.91 per hour yielding a benefits multiplier of approximately 
1.46.

          Table 3--Estimated Total Administrative Cost to FEMA
------------------------------------------------------------------------
                                   Large project        Small project
------------------------------------------------------------------------
Average amount of time it       24.8 hours.........  4.8 hours.
 takes FEMA to close out each
 project.
FEMA employee fully-loaded      $61.31.............  $61.31.
 wage rate.
    Total Admin Cost for FEMA   $1,520.............  $300.
     for each project.
------------------------------------------------------------------------

    Small projects have fewer requirements for final reconciliation and 
close out time compared to large projects. By increasing the maximum 
threshold, FEMA expects more projects to be classified as small, 
therefore reducing the time spent on completing supplemental forms. If 
the maximum threshold would have been $1,000,000,

[[Page 47368]]

there would have been 10,858 projects classified as small that are 
currently classified as large.\82\ Increasing the maximum threshold to 
$1,000,000 will increase the number of small projects so that it 
accounts for 94.4 percent of FEMA PA projects. This will align with the 
original threshold Congress set in 1988, where the number of small 
projects represented 95 percent of FEMA PA projects. The estimated cost 
savings to FEMA is $13,246,760 ($1,220 x 10,858) for 3.1 years. (See 
Table 4).
---------------------------------------------------------------------------

    \82\ 58,234 small projects would exist at the $1,000,000 
threshold and 47,376 small projects at the actual threshold. The 
difference in the number of small projects is 58,234-47,376 = 
10,858.

      Table 4--Estimated Total Cost Savings to FEMA Over 3.1 Years
                                 [2020$]
------------------------------------------------------------------------
                                             $132,800
                                             Threshold     $1M Threshold
------------------------------------------------------------------------
Number of Small Projects at Each                  47,376          58,234
 Threshold..............................
Difference in the Number of Small         ..............          10,858
 Projects from the Current Threshold....
Cost savings from Processing Each Small   ..............          $1,220
 Project instead of a Large Project.....
    Estimated Total Cost Savings to FEMA              $0     $13,246,760
     \83\...............................
------------------------------------------------------------------------

Cost Savings to Recipients and Subrecipients
---------------------------------------------------------------------------

    \83\ Estimated savings is calculated by taking the number of 
small projects at each threshold and then multiplying it by the 
increase in small projects from the current threshold. $1,220 x 
10,858 = $13,246,760.
---------------------------------------------------------------------------

    Processing a small project takes less time for recipients and 
subrecipients compared to a large project because small projects 
require fewer forms. If the maximum threshold were $1,000,000, it would 
have resulted in a $1,285,474 cost savings for recipients and 
subrecipients over the 3.1-year period.
    To estimate cost savings, FEMA used BLS data for average hourly 
wage rates for Emergency Management Directors for State Governments, 
$34.97.\84\ To account for benefits, FEMA multiplied the wage rate by 
1.6 for State and local government workers to obtain a fully loaded 
hourly wage of $55.95 ($34.97 x 1.6). FEMA requires six supplemental 
forms for large projects that are not required for small 
projects.85 86 Based on FEMA regional input, recipients with 
projects over the maximum threshold must fill out (1) FEMA Form 009-0-
123: Force Account Labor Summary Record, (2) FEMA Form 009-0-124: 
Materials Summary Record, (3) FEMA Form 009-0-125: Rented Equipment 
Summary Record, (4) FEMA Form 009-0-126: Contract Work Summary Record, 
(5) FEMA Form 009-0-127: Force Account Equipment Summary Record, and 
(6) FEMA Form 009-0-111: Quarterly Progress Report.
---------------------------------------------------------------------------

    \84\ According to the U.S. Department of Labor, Bureau of Labor 
Statistics, the May 2020 Occupational Employment and Wage Estimates 
hourly mean wage rate for Emergency Management Directors (Standard 
Occupational Classification 11-9161) for State Government employees 
is $34.97. https://www.bls.gov/oes/2020/may/oes119161.htm, accessed 
November 23, 2021.
    \85\ Public Assistance Program, Paperwork Reduction Act 
Information Collection Supporting Statement, OMB Control Number: 
1660-0017, available at: www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201304-1660-001, see Supporting Statement A.
    \86\ Recipients or subrecipients with small projects may fill 
out some of these five forms after the work is complete if they are 
submitting paperwork to request for funds for the actual cost(s).
---------------------------------------------------------------------------

    The recipient or subrecipient must submit FEMA Forms 009-0-123, 
009-0-124, 009-0-125, 009-0-126, and 009-0-127 for each large project 
undertaken. These five forms take a combined total of 2 hours for each 
recipient or subrecipient to complete.\87\ Additionally, each recipient 
must submit FEMA Form 009-0-111 once quarterly when it has at least one 
large ongoing project. This form would include all large projects for 
that recipient. The form takes 100 hours to fill out.
---------------------------------------------------------------------------

    \87\ Public Assistance Program, Paperwork Reduction Act 
Information Collection Supporting Statement, OMB Control Number: 
1660-0017, available at: www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201304-1660-001, see Supporting Statement A. 
According to the Paperwork Reduction Act Information Collection 
Supporting Statement, FEMA Form 009-0-123 takes 0.5 hours, 009-0-124 
takes 0.25 hours, 009-0-125 takes 0.5 hours, 009-0-126 takes 0.5 
hours, and 009-0-127 takes 0.25 hours to complete.
---------------------------------------------------------------------------

    To estimate the cost savings for FEMA Forms 009-0-123, 009-0-124, 
009-0-125, 009-0-126, and 009-0-127, FEMA multiplied the total time 
required to complete these forms by the fully-loaded wage rate for 
State and local government Emergency Management Directors. Recipients 
and subrecipients would have a cost savings of $111.90 (2 hours x 
$55.95) per project for recipients and subrecipients to process a small 
project over a large project. FEMA then multiplied the $112 cost 
savings per project by the 10,858 large projects that would have been a 
small projects if the maximum threshold were $1,000,000. FEMA estimated 
a total cost savings of $1,216,096 ($112 x 10,858) for recipients and 
subrecipients over the 3.1-year period for forms 009-0-123, 009-0-124, 
009-0-125, 009-0-126, and 009-0-127. (See Table 5). Annually, FEMA 
estimated the cost savings to be $392,289 ($1,216,096 / 3.1 years).
    To estimate the cost savings for recipients for FEMA Form 009-0-
111, FEMA multiplied the time required to complete this quarterly form 
by the fully-loaded wage rate for State and Local government Emergency 
Management Directors. Recipients would have a cost savings of $5,595 
($55.95 x 100 hours) per quarter. FEMA then analyzed the data to 
determine then number of recipients who would not have at least one 
ongoing large project if the maximum threshold were $1,000,000 compared 
to those who would at the $132,800 threshold. FEMA assumed all 
recipients with at least one ongoing project submitted FEMA Form 009-0-
111 each quarter for the duration of the 3.1-year period and the 
recipient without an ongoing large project did not submit this form. 
Over the 3.1-year period, the number of recipients with at least 1 
ongoing project would reduce by 1, from 56 to 55.\88\ Annually, this 
cost savings for recipients equates to $22,380 ($5,595 x 4 quarters) 
and $69,378 over the 3.1-year period ($22,380 x 3.1 year).
---------------------------------------------------------------------------

    \88\ The recipient was the State of Wyoming and the project cost 
was $142,489.
---------------------------------------------------------------------------

    Annually, increasing the maximum threshold from $132,800 to 
$1,000,000 would have a total cost savings for recipients and 
subrecipients of $414,669 ($392,289 + $22,380).

[[Page 47369]]



  Table 5--Estimated Total Cost Savings to Recipients and Subrecipients
                             Over 3.1 Years
                                 [2020$]
------------------------------------------------------------------------
                                             $132,800
                                             Threshold     $1M Threshold
------------------------------------------------------------------------
  FEMA Forms 009-0-123, 009-0-124, 009-0-125, 009-0-126, and 009-0-127
------------------------------------------------------------------------
Number of Large Projects at Each                  14,334           3,476
 Threshold..............................
Decrease in the Number of Large Projects               0          10,858
 from the Current Threshold.............
Cost of Processing Each Large Project     ..............            $112
 \89\...................................
Estimated Cost Savings for the Five                   $0      $1,216,096
 Forms \90\.............................
------------------------------------------------------------------------
                           FEMA Form 009-0-111
------------------------------------------------------------------------
Number of Recipients with Ongoing Large               56              55
 Projects...............................
Decrease in the Number of Recipients                   0               1
 from the Current Threshold.............
Cost savings from Submitting Fewer Forms              $0         $69,378
Estimated Cost Savings for FEMA Form 009-             $0         $69,378
 0-111 \91\.............................
                                         -------------------------------
    Estimated Total Cost Savings to                   $0      $1,285,474
     Recipients and Subrecipients over
     3.1 Years \92\.....................
------------------------------------------------------------------------

Total Benefits at the $1M Threshold
---------------------------------------------------------------------------

    \89\ For forms 009-0-123, 009-0-124, 009-0-125, 009-0-126, and 
009-0-127.
    \90\ Estimated cost savings for the five forms = Decrease in the 
number of large projects from the current threshold x cost of 
processing each large project. 10,858 x $112 = $1,216,096.
    \91\ Estimated cost savings for FEMA Form 009-0-111 = Decrease 
in the number of recipients from the current threshold x cost 
savings from submitting fewer forms. 1 x $69,378 = $69,378.
    \92\ Estimated total cost savings to recipeients and 
subrecipients = Estimated cost savings for the five forms + 
estimated total cost savings for FEMA Form 009-0-111. $1,216,096 + $ 
69,378 = $1,285,474.

       Table 6--Total Benefits at the $1M Threshold Over 3.1 Years
                                 [2020$]
------------------------------------------------------------------------
           Administrative cost savings to FEMA             $1M Threshold
------------------------------------------------------------------------
Decrease in the number of large projects PWs............          10,858
Cost Savings from Processing Each Small Project over a            $1,220
 Large Project..........................................
Estimated Total Cost savings to FEMA \93\...............     $13,246,760
------------------------------------------------------------------------
        Administrative Cost Savings to Recipient and Subrecipient
------------------------------------------------------------------------
  FEMA Forms 009-0-123, 009-0-124, 009-0-125, 009-0-126, and 009-0-127
------------------------------------------------------------------------
Decrease in the number of large projects from the                 10,858
 Current Threshold......................................
Dollars per PW to recipients/subrecipients (reduction in            $112
 forms).................................................
Estimated Cost Savings for the Five Forms...............      $1,216,096
------------------------------------------------------------------------
                           FEMA Form 009-0-111
------------------------------------------------------------------------
Decrease in the Number of Recipients from the Current                  1
 Threshold..............................................
Cost savings from Submitting Fewer Forms................         $69,378
Estimated Cost Savings for FEMA Form 009-0-111..........         $69,378
Estimated Total Cost Savings to Recipients and                $1,285,474
 Subrecipients..........................................
                                                         ---------------
    Total Administrative Cost Savings \94\..............     $14,532,234
------------------------------------------------------------------------

Project Consolidations
---------------------------------------------------------------------------

    \93\ Estimated total cost savings to FEMA = Decrease in the 
number of large projects PWs x Cost Savings from processing each 
small project over a large project. 10,858 x $1,220 = $13,246,760.
    \94\ $13,246,760 + $1,285,474 = $14,532,234.
---------------------------------------------------------------------------

    A recipient may decide to consolidate its grant requests by 
combining eligible work at one or more sites on a single PW. 
Subrecipients have some discretion in how they group eligible work 
across PWs, and some currently try to avoid including too much on a 
single PW in order to stay below the maximum threshold. They instead 
spread the work across multiple PWs below the threshold. With a 
$1,000,000 threshold, projects under this threshold will be considered 
small, giving recipients and subrecipients greater flexibility in how 
they use the funds they receive. With small projects, recipients and 
subrecipients can retain any excess funds (as opposed to FEMA 
deobligating these funds) and can use them to reduce risk and improve 
future disaster operations. If a recipient or subrecipient were to 
exceed the threshold, it would potentially serve as a deterrent to 
fully consolidating eligible work on PWs, as the benefits of Simplified 
Procedures would then be lost. Raising the maximum threshold to 
$1,000,000 removes the disincentive for consolidating eligible work on 
PWs with a total cost under that amount. This reduces the total number 
of PWs to be processed, thereby increasing the administrative 
efficiency for recipients, subrecipients, and FEMA. Since there is no 
accurate way for FEMA to determine how much eligible work could 
potentially be consolidated on fewer

[[Page 47370]]

PWs, FEMA is not able to determine the exact number of small project 
PWs that will now no longer be submitted under the increased threshold. 
However, with a current average of 15,283 small projects annually and 
up to an additional 10,858 projects that will now be small projects, 
FEMA assumes additional consolidation will occur.\95\
---------------------------------------------------------------------------

    \95\ The data include 47,376 small projects between August 25, 
2017 through September 30, 2020, or 3.1 years. 47,376 / 3.1 = 
15,283.
---------------------------------------------------------------------------

Implementation Cost Savings for Applicable Unobligated PWs
    FEMA will implement the $1,000,000 maximum threshold for major 
disasters and emergencies declared on or after March 13, 2020, for 
projects that have not been obligated as of the effective date of this 
rule. FEMA conducted the same analysis as above in the cost savings to 
FEMA and cost savings to recipients and subrecipients, but looked only 
at the projects that were unobligated at the time that FEMA pulled the 
data from data management systems.\96\ FEMA adjusted the project cost 
data for these projects to year 2020 dollars using the CPI-U and their 
status as either small or large assessed using the thresholds in 2020 
dollars ($132,800 and $1,000,000). This implementation will be 
applicable for current unobligated projects with a declaration date 
between March 13, 2020 to September 30, 2020.\97\ FEMA identified 
projects in the database with a declaration date between March 13, 2020 
to September 30, 2020 then focused on those projects that were 
currently unobligated. Then FEMA conducted two analyses: one looking at 
the number of unobligated small projects at $132,800 threshold, and the 
other looking at the number of unobligated small projects at the 
$1,000,000 threshold. FEMA then compared the differences in these 
numbers at the two thresholds. At the $132,800 threshold, there were 
5,579 unobligated small projects. At the $1,000,000 threshold, there 
would be 9,715 unobligated small projects. FEMA estimates 4,136 (9,715-
5,579) out of the 10,877 total unobligated projects will be classified 
as small that were formerly classified as large when the maximum 
threshold is adjusted to $1,000,000 for unobligated projects going back 
to March 13, 2020.
---------------------------------------------------------------------------

    \96\ FEMA pulled the data on April 6, 2021, from EMMIE and GM.
    \97\ September 30, 2020 is the last date of FY 2020 and the last 
date used for this RIA analysis. Obligation of disaster funding can 
occur after the disaster year.
---------------------------------------------------------------------------

    This will result in cost savings to FEMA of $5,045,920 ($1,220 x 
4,136) and cost savings to recipients and subrecipients of $463,232 
($112 x 4,136) from FEMA Forms 009-0-123, 009-0-124, 009-0-125, 009-0-
126, and 009-0-127. (See Table 7). The number of recipients filling out 
FEMA Form 009-0-111 will not be impacted because the number of 
recipients with large projects is not impacted when including the 
unobligated projects. This implementation will have a total cost 
savings of $5,509,152 ($5,045,920 + $463,232).

  Table 7--Estimated Total Cost Savings for Unobligated Projects With a
               Declaration Date On or After March 13, 2020
------------------------------------------------------------------------
                                             $132,800
                                             Threshold     $1M Threshold
------------------------------------------------------------------------
Number of Unobligated Small Projects at            5,579           9,715
 Each Threshold.........................
Difference in the Number of Unobligated   ..............           4,136
 Small Projects from FY 2020 Threshold..
Cost savings from Processing Each         ..............          $1,220
 Unobligated Small Project instead of a
 Large Project for FEMA.................
Estimated Total Cost Savings to FEMA                  $0      $5,045,920
 \98\...................................
Cost savings from Processing Each                      0            $112
 Unobligated Small Project instead of a
 Large Project for Recipients and
 Subrecipients for FEMA Forms 009-0-123,
 009-0-124, 009-0-125, 009-0-126, and
 009-0-127..............................
Estimated Total Cost Savings to                       $0        $463,232
 Recipients and Subrecipients \99\......
                                         -------------------------------
    Total Cost Savings..................              $0      $5,509,152
------------------------------------------------------------------------

Summary of Benefits Over a 3-Year Period
---------------------------------------------------------------------------

    \98\ Estimated savings is calculated by taking the number of 
small projects at each threshold and then multiplying it by the 
increase in small projects from the FY 2020 threshold. $1,220 x 
4,136 = $5,045,920.
    \99\ Estimated savings is calculated by taking the number of 
small projects at each threshold and then multiplying it by the 
increase in small projects from the FY 2020 threshold. $112 x 4,136 
= $463,232.
---------------------------------------------------------------------------

    Based on historical data, FEMA estimates that the total benefit 
from changing the maximum threshold from $132,800 to $1,000,000 will be 
$20,041,386 ($14,532,234 + $5,509,152) over the period analyzed. These 
benefits are calculated from the 3.1 years of historical data from 
GM.\100\
---------------------------------------------------------------------------

    \100\ GM began on August 25, 2017. FEMA used data from August 
25, 2017 to September 30, 2020 for this analysis. There are 1,132 
days during this period. FEMA took the total number of days during 
the time of the analysis and divided it by the average of number of 
days per year. 1,132 / 365 = 3.1.
---------------------------------------------------------------------------

    The following calculations are estimates of benefits for three 
years in the future based on the previous section's benefits estimates. 
These figures include three-year total and discounted annualized 
figures. FEMA adjusts the 3.1-year period to 3 years to arrive at a the 
total undiscounted estimated benefit for three years of 
$19,394,890.\101\
---------------------------------------------------------------------------

    \101\ The total benefit amount over 3.1 years was $20,041,386. 
To adjust this figure for only 3 years, it was divided by 3.1 and 
then multiplied by 3. (($20,041,386 / 3.1) x 3) = $19,394,890.
---------------------------------------------------------------------------

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

[[Page 47371]]



                                 Table 8--Estimated Benefit Over a 3-Year Period
                                                     [2020$]
----------------------------------------------------------------------------------------------------------------
                                                                                      Annual          Annual
                                                                                     benefits        benefits
                              Year                                Total benefits   discounted at   discounted at
                                                                                        3%              7%
----------------------------------------------------------------------------------------------------------------
1...............................................................      $6,464,964      $6,276,664      $6,042,022
2...............................................................       6,464,964       6,093,849       5,646,750
3...............................................................       6,464,964       5,916,358       5,277,336
                                                                 -----------------------------------------------
    Total.......................................................  ..............      18,286,871      16,966,108
Annualized......................................................  ..............       6,464,964       6,464,964
----------------------------------------------------------------------------------------------------------------

x. Transfers
    Transfer payments are monetary payments from one group to another 
that do not affect total resources available to society. Transfers such 
as Federal grants, insurance payments, direct subsidies, and indirect 
subsidies (e.g., cross-subsidies) can have significant efficiency 
effects in addition to distributional effects and are not included in 
the estimates of the benefits or costs of a regulation. The transfers 
associated with this final rule are the amount that is from a reduction 
in deobligations of excess project funds.
Deobligation
    When the cost estimates exceed actual costs for small projects, 
FEMA does not deobligate those funds from the recipients or 
subrecipients; it is only for large projects where excess funds are 
deobligated. For projects which become categorized as small under the 
increased threshold, FEMA will no longer deobligate those excess funds 
and the funds will remain with the recipients and subrecipients. By 
allowing recipients and subrecipients to keep these excess funds, the 
funds are still providing a benefit to the public since the funds are 
available given to recipients (State, local, Tribal, and territorial 
governments). FEMA does not place any requirements on how the excess 
funds are spent. FEMA cannot quantify the exact benefit to the public 
for these specific funds and recognizes that either efficiency gains or 
losses could occur once acquired by the recipients and subrecipients. 
These excess funds are a considered a transfer payment from FEMA to 
recipients and therefore would not affect the total resources available 
to society.
    FEMA analyzed the deobligation amounts for large projects, adjusted 
to year 2020 dollars, and compared them using the current threshold of 
$132,800 and the increased threshold of $1,000,000.\102\ Projects where 
the total obligated amount was deobligated were excluded from the 
analysis, as total deobligation indicates that the project was not 
conducted at all and the funds would not have been awarded regardless 
of project size. For large projects, those above the current threshold 
of $132,800, a total of $543,871,441 has been deobligated in the 3.1 
years of projects analyzed. Using a threshold of $1,000,000, 
$499,152,919 would still have been deobligated over the same period, or 
a difference of $44,718,521 (8.2 percent) less. This difference 
accounts for 0.07 percent ($44,718,521 / $67,659,994,342) of all PA 
costs during the same period. When the maximum threshold is changed 
from $132,800 to $1,000,000, the amount of deobligations decreases by 
$14,425,329 ($44,718,521 / 3.1 years) per year amongst all 56 states 
and territories, or $257,595 ($14,425,329 / 56) in average 
deobligations per State or territory per year.
---------------------------------------------------------------------------

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

    Table 10 below shows the deobligated values and the amount that was 
deobligated for large projects at the $132,800 threshold compared to 
the amount that would have been deobligated for large projects using a 
$1,000,000 threshold. The resulting difference is the amount of 
deobligations that would not have been recouped by FEMA for projects 
considered large at the $132,800 threshold but small at a $1,000,000 
threshold over the period analyzed.

         Table 9--Deobligations at Each Threshold Over 3.1 Years
                                 [2020$]
------------------------------------------------------------------------
                                            $132,800
                                           Threshold      $1M Threshold
------------------------------------------------------------------------
Deobligation Amount...................     $543,871,441     $499,152,919
Difference From $132,800 Threshold....                0     -$44,718,521
------------------------------------------------------------------------


[[Page 47372]]

Estimated Transfers Over a 3-Year Period
    The figures in the previous section are estimates of 3.1 years of 
historical deobligations compared at the two thresholds.\103\ The 
following calculations are estimates of transfers for three years in 
the future based on the deobligation estimates found in the previous 
section. These figures include three-year total and discounted 
annualized figures. The total undiscounted estimated transfers for 
three years is $43,275,988.\104\ The average annual undiscounted 
transfers from FEMA to recipients and subrecipients is 
$14,425,329.\105\ The discounted total net 3-year transfer rate at 3 
and 7 percent, respectively, are $40,803,651 and $37,856,623. 
Annualized transfers are $14,425,330 and $14,425,329, respectively.
---------------------------------------------------------------------------

    \103\ GM began on August 25, 2017. FEMA used data from August 
25, 2017 to September 30, 2020 for this analysis. There are 1,132 
days during this time period. FEMA took the total number of days 
during the time of the analysis and divided it by the average of 
number of days per year. 1,132 / 365 = 3.1.
    \104\ The total deobligation amount over 3.1 years was 
$44,718,521. To adjust this figure for only 3 years, it was first 
divided by 3.1 and then multiplied by 3. (($44,718,521 / 3.1) x 3) = 
$43,275,988.
    \105\ $43,275,988 / 3 = $14,425,329.

                               Table 10--Estimated Transfers Over a 3-Year Period
                                                     [2020$]
----------------------------------------------------------------------------------------------------------------
                                                                                      Annual          Annual
                                                     Transfers         Total         transfers       transfers
                      Year                         from FEMA  to     transfers     discounted at   discounted at
                                                     recipient                          3%              7%
----------------------------------------------------------------------------------------------------------------
1...............................................     $14,425,329     $14,425,329     $14,005,174     $13,481,616
2...............................................      14,425,329      14,425,329      13,597,257      12,599,641
3...............................................      14,425,329      14,425,329      13,201,220      11,775,366
                                                 ---------------------------------------------------------------
    Total \106\.................................      43,275,988      43,275,988      40,803,651      37,856,623
Annualized......................................  ..............  ..............      14,425,330      14,425,329
----------------------------------------------------------------------------------------------------------------

xi. Impacts
---------------------------------------------------------------------------

    \106\ Figures may not total due to rounding.
---------------------------------------------------------------------------

    FEMA will increase the large project maximum threshold pursuant to 
the SRIA. The subject of this RIA is an increase from the current 
maximum threshold for Simplified Procedures to $1,000,000 for major 
disasters and emergencies declared on or after March 13, 2020, for 
unobligated projects. This will impact current unobligated projects. It 
will then continue to be adjusted each fiscal year for inflation using 
the CPI-U and reevaluated again three years after implementation.\107\
---------------------------------------------------------------------------

    \107\ FEMA publishes the annual adjustments to the maximum 
threshold on its website. See https://www.fema.gov/assistance/public/applicants/per-capita-impact-indicator.
---------------------------------------------------------------------------

    Despite past adjustments to the maximum threshold, it has gradually 
shifted away from the initial policy benchmarks. Congress set the 
threshold at $35,000 in 1988, which represented 95 percent of FEMA 
projects and 32 percent of PA disaster assistance funding. Prior 
adjustments include yearly adjustments to the maximum threshold every 
fiscal year based on the CPI-U and a thorough review by the program 
every three years. With the $132,800 threshold in place, small projects 
account for 77 percent of all projects and 2.4 percent of funding due 
to the increasing frequency and magnitude of major disasters due to the 
increase in the number of weather and climate disasters. Those involved 
with the PA process are impacted by this rule, including State, local, 
Tribal, and territorial governments, and certain private non-profit 
organizations.
    Raising the maximum threshold for Simplified Procedures to 
$1,000,000, thereby increasing the number of small projects, will help 
speed closure of both projects and funding for disaster recovery, which 
will decrease the administrative burden of a disaster, help speed 
disaster recovery, and reduce the associated length of ongoing 
government oversight and associated costs. FEMA estimates the average 
annual benefit of this rule will be $6,464,964. The discounted total 3-
year benefit at 3 percent and 7 percent discount rates, respectively, 
are $18,286,871 and $16,966,108. The annualized benefit is $6,464,964 
and $6,464,964 at both the 3 and 7 percent discount rates.
    There will be a cost of $10,454 for the first year for recipients 
to familiarize themselves with the changes. The total 3-year total cost 
discounted at 3 percent and 7 percent, respectively, are $10,150 and 
$9,770. The annualized cost is $3,588 and $3,723 at the 3 and 7 percent 
respective discount rates.
    Increasing the maximum threshold leads to FEMA failing to recoup 
some over-obligated funds. These funds instead remain with grant 
recipients, which are State, local, Tribal or territorial governments, 
and certain private non-profit organizations. This estimated transfer 
from FEMA to the recipients and subrecipients is $14,425,330 
annualized.

----------------------------------------------------------------------------------------------------------------
                                                                              Source citation  (RIA, preamble,
              Category                3% Discount rate   7% Discount rate                  etc.)
----------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized benefits..         $6,464,964         $6,464,964  RIA.
    Annualized quantified, but                     N/A                N/A  N/A.
     unmonetized benefits.
    Qualitative (unquantified)       .................  .................  N/A.
     benefits.
Costs:
    Annualized monetized costs.....             $3,588             $3,723  RIA.
    Annualized quantified, but                     N/A                N/A  N/A.
     unmonetized, costs.
                                    ----------------------------------------------------------------------------

[[Page 47373]]

 
    Qualitative (unquantified)        Projects which would fall below the  RIA.
     costs.                               maximum threshold once the
                                     regulation goes into effect would be
                                       subjected to less scrutiny, which
                                      could potentially increase the risk
                                     of inaccurate reporting and decrease
                                     the ability for FEMA to identify and
                                       remedy noncompliance. While this
                                        risk exists, it is unclear how
                                      common noncompliance would be among
                                                these projects
----------------------------------------------------------------------------------------------------------------
Transfers:
    Annualized monetized transfers:        $14,425,330        $14,425,329  RIA.
     ``on-budget''.
                                    ----------------------------------------------------------------------------
    from whom to whom?.............      From FEMA to grant recipients     .....................................
                                    ----------------------------------------------------------------------------
    Annualized monetized transfers:                N/A                N/A  N/A.
     ``off-budget''.
                                    ----------------------------------------------------------------------------
    from whom to whom?.............                   N/A                  N/A.
----------------------------------------------------------------------------------------------------------------
              Category                              Effects                Source Citation (RIA, preamble, etc.)
----------------------------------------------------------------------------------------------------------------
Effects on State, local, and/or       Eligible applicants for PA include   RIA.
 tribal governments.                 56 State and territorial governments
                                      and 573 Federally recognized Indian
                                     Tribal governments, as well as local
                                       governments, and certain private
                                          nonprofits (PNPs). Eligible
                                      applicants with projects below the
                                       $1M threshold would not incur the
                                     costs associated with large projects
                                    ----------------------------------------------------------------------------
Effects on small businesses........   Small PNPs that are eligible for PA  N/A.
                                         funds, will be able to access
                                       funding at a lower administrative
                                        cost if it is under the maximum
                                                   threshold
                                    ----------------------------------------------------------------------------
Effects on wages...................                  None                  None.
                                    ----------------------------------------------------------------------------
Effects on growth..................                  None                  None.
----------------------------------------------------------------------------------------------------------------

xii. Uncertainty Analysis
    The findings, results, and conclusions of this analysis could 
change if the assumptions used in the primary analysis were to change. 
FEMA cannot accurately forecast disasters due to their 
unpredictability, including how many disasters will occur or the 
magnitude of future disasters. Therefore, the estimates of this 
analysis are sensitive to future disaster declarations, which are 
uncertain.
    High-cost climate disasters have been growing in frequency over the 
last few decades. From 1980-1989, there were 29 disasters and the 
average annual cost of damages was $17.8B. From 1990-1999, there were 
53 disasters and the average annual cost of damages was $27.4B, with 
FEMA obligating on average about $2.7 billion in PA funding for these 
disasters per year. From 2000-2009, there were 62 disasters and the 
average annual cost of damages was $51.9B, with FEMA obligating on 
average about $5.8 billion in PA funding for these disasters per year. 
From 2010-2019, there were 119 disasters and the average annual cost of 
damages was $81.10B, with FEMA obligating on average about $8.1 billion 
in PA funding for these disasters per year.108 109 The 
number and cost of weather and climate disasters are increasing in the 
United States due to a combination of an increase in assets being 
exposed to risk, the level of damage a hazard of given intensity causes 
at a location, and the fact that climate change is increasing the 
frequency of some types of extreme weather events that lead to high-
cost disasters.\110\
---------------------------------------------------------------------------

    \108\ National Oceanic & Atmospheric Administration (NOAA). 
(2021). 2020 U.S. billion-dollar weather and climate disasters in 
historical context. Adam B. Smith. https://www.climate.gov/news-features/blogs/beyond-data/2020-us-billion-dollar-weather-and-climate-disasters-historical.
    \109\ FEMA analyzed the data for obligated PA projects up to 
September 30, 2020. Obligation of disaster funding can occur after 
the disaster year.
    \110\ U.S. Global Change Research Program (USGCRP). (2018). 
Fourth National Climate Assessment, Chapter 2: Our Changing Climate. 
https://nca2018.globalchange.gov/chapter/2/.
---------------------------------------------------------------------------

xiii. Alternatives Considered
    FEMA has evaluated several alternative regulatory approaches within 
FEMA's statutory discretion for implementing the final rule in 
accordance with Section 6(a)(3)(c) of Executive Order 12866, 
``Regulatory Planning and Review,'' and the formal principles of OMB's 
Circular A-4. Alternative approaches include different implementation 
methods for the final rule.
    The alternatives for this final rule would be to leave the maximum 
threshold unchanged or increase it to a different maximum.
    FEMA considered four alternatives for this final rule. FEMA 
considered:

[[Page 47374]]

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

    \111\ The Disaster Relief and Emergency Assistance Amendment of 
1988 introduced the Simplified Procedures maximum threshold to 
reduce administrative expenses and time associated with a Federal 
disaster grant. Congress initially selected $35,000 as the threshold 
because ``damage survey reports of less than $35,000 have 
constituted 95 percent of all damage survey reports but only 32 
percent of all expended dollars.''
---------------------------------------------------------------------------

$250,000 Threshold
    If FEMA were to increase the maximum threshold to $250,000 for FY 
2021, it would require regulatory changes. This would increase the 
percentage of small PA projects to 83.9 percent; however, it would be a 
smaller percentage than the original goal in 1988 of 95 percent. The 
funding for small projects would account for 3.6 percent of the total 
funding of PA projects. The number of large projects over the 3.1-year 
period of analysis would decrease from a current 14,334 to 9,960, or a 
decrease of 4,374 (14,334-9,960), which is approximately a 30.5 
((14,334-9,960) / 14,334) percent decrease from the current threshold. 
The number of recipients with at least 1 ongoing large project would 
reduce by 1, from 56 to 55. The 4,374 decrease in the number of large 
projects would have an estimated cost savings of $5,336,280 (4,374 x 
$1,220) for FEMA. The decrease in number of projects and 1 fewer 
recipient would have an estimated cost savings of $559,266 ((4,374 x 
$112) + ($5,595 x 4 quarters x 3.1 years)) for recipients and 
subrecipients.
$500,000 Threshold
    If FEMA were to increase the maximum threshold to $500,000 for FY 
2021, it would require regulatory changes. This would increase the 
percentage of small PA projects to 90.0 percent; however, it would be a 
smaller percentage than the original goal in 1988 of 95 percent. The 
funding for small projects would account for 5.6 percent of the total 
funding of PA projects. The number of large projects over the 3.1-year 
period of analysis would decrease from 14,334 to 6,156, or a decrease 
of 8,178 (14,334-6,156), which is approximately a 57.1 ((14,334-6,156) 
/ 14,334) percent decrease from the current threshold. The number of 
recipients with at least 1 ongoing large project would reduce by 1, 
from 56 to 55. The 8,178 decrease in the number of large projects would 
have an estimated cost savings of $9,977,160 (8,178 x $1,220) for FEMA. 
The decrease in number of projects and 1 fewer recipient would and an 
estimated cost savings of $985,314 ((8,178 x $112) + ($5,595 x 4 
quarters x 3.1 years)) for recipients and subrecipients.
$750,000 Threshold
    If FEMA were to increase the maximum threshold to $750,000 for FY 
2021, it would require regulatory changes. This would increase the 
percentage of small PA projects to 92.8 percent; however, it would be a 
smaller percentage than the original goal in 1988 of 95 percent. The 
funding for small projects would account for 7.1 percent of the total 
funding of PA projects. The number of large projects over the 3.1-
period of analysis would decrease from 14,334 to 4,469, or a decrease 
of 9,865 (14,334-4,469), which is approximately a 68.8 ((14,334-4,469) 
/ 14,334) percent decrease from the current threshold. The number of 
recipients with at least 1 ongoing large project would reduce by 1, 
from 56 to 55. The 9,865 decrease in the number of large projects would 
have an estimated cost savings of $12,035,300 (9,865 x $1,220) for 
FEMA. The decrease in number of projects and 1 fewer recipient would 
have an estimated cost savings of $1,174,258 ((9,865 x $112) + ($5,595 
x 4 quarters x 3.1 years)) for recipients and subrecipients.

    Table 11--PA Projects and Aggregate Project Amounts Since the Adoption of the PA Delivery Model (3.1-Year
                                Period). Adjusted for Each Alternative Thresholds
----------------------------------------------------------------------------------------------------------------
                                       $250K Threshold    $500K Threshold    $750K Threshold     $1M Threshold
----------------------------------------------------------------------------------------------------------------
Number of Small Projects............             51,750             55,554             57,241             58,234
Percentage of Small Projects to                   83.9%              90.0%              92.8%              94.4%
 Total Projects.....................
Number of Large Projects............              9,960              6,156              4,469              3,476
Percentage of Large Projects to                   16.1%              10.0%               7.2%               5.6%
 Total Projects.....................
Total Small Project Funding.........     $2,432,028,984     $3,777,518,663     $4,812,471,896     $5,670,643,149
Percentage of Small Project Funding                3.6%               5.6%               7.1%               8.4%
 to Total Project Funding...........
Total Large Project Funding.........    $65,227,965,358    $63,882,475,679    $62,847,522,446    $61,989,351,193
Percentage of Large Project Funding               96.4%              94.4%              92.9%              91.6%
 to Total Project Funding...........
----------------------------------------------------------------------------------------------------------------


                           Table 12--Cost Savings for Maximum Thresholds Alternatives
----------------------------------------------------------------------------------------------------------------
                                                       $250K           $500K           $750K
           Admin cost savings to FEMA                Threshold       Threshold       Threshold     $1M Threshold
----------------------------------------------------------------------------------------------------------------
Increases in the number of small projects PWs...           4,374           8,178           9,865          10,858
Cost Savings from Processing Each Small Project           $1,220          $1,220          $1,220          $1,220
 over a Large Project...........................
Estimated Total Cost savings to FEMA............      $5,336,280      $9,977,160     $12,035,300     $13,246,760
----------------------------------------------------------------------------------------------------------------

[[Page 47375]]

 
Admin Cost Savings to Recipient and Subrecipient  ..............  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
                      FEMA Forms 009-0-123, 009-0-124, 009-0-125, 009-0-126, and 009-0-127
----------------------------------------------------------------------------------------------------------------
Decrease in the number of large projects PWs....           4,374           8,178           9,865          10,858
Dollars per PW to recipients/subrecipients                  $112            $112            $112            $112
 (reduction in forms)...........................
Estimated Cost Savings for the Five Forms.......        $489,888        $915,936      $1,104,880      $1,216,096
----------------------------------------------------------------------------------------------------------------
                                               FEMA Form 009-0-111
----------------------------------------------------------------------------------------------------------------
Decrease in the Number of Recipients from the                  1               1               1               1
 Current Threshold..............................
Cost savings from Submitting Fewer Forms........         $69,378         $69,378         $69,378         $69,378
Estimated Cost Savings for FEMA Form 009-0-111..         $69,378         $69,378         $69,378         $69,378
Estimated Total Cost Savings to Recipients and          $559,266        $985,314      $1,174,258      $1,285,474
 Subrecipients..................................
                                                 ---------------------------------------------------------------
    Total Administrative Cost Savings...........      $5,895,546     $10,962,474     $13,209,558     $14,532,234
----------------------------------------------------------------------------------------------------------------

    After analyzing the five potential thresholds, FEMA selected a 
threshold of $1,000,000 because it would bring Simplified Procedures 
closest to the initial policy benchmarks, raising the percentage of 
small projects from 77 percent back to 94.4 percent and raising the 
percentage of PA disaster funding for small projects from 2.4 percent 
to 8.4 percent.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), and 
section 213(a) of the Small Business Regulatory Enforcement Fairness 
Act of 1996, Public Law 104-121, 110 Stat. 847, 858-59 (Mar. 29, 1996) 
(5 U.S.C. 601 note) require that special consideration be given to the 
effects of regulations on small entities. The RFA applies only when an 
agency is ``required by section 553 . . . to publish general notice of 
proposed rulemaking for any proposed rule.'' 5 U.S.C. 603(a). An RFA 
analysis is not required for this rulemaking because FEMA is not 
required to publish a notice of proposed rulemaking.

D. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 658, 1501-1504, 
1531-1536, 1571, pertains to any rulemaking which is likely to result 
in the promulgation of any rule that includes a Federal mandate that 
may result in the expenditure by State, local, and Tribal governments, 
in the aggregate, or by the private sector, of $100 million (adjusted 
annually for inflation) or more in any one year. If the rulemaking 
includes such a Federal mandate, the Act requires an agency to prepare 
an assessment of the anticipated costs and benefits of the Federal 
mandate. The Act also pertains to any regulatory requirements that 
might significantly or uniquely affect small governments. Before 
establishing any such requirements, an agency must develop a plan 
allowing for input from the affected governments regarding the 
requirements.
    FEMA has determined that this rulemaking will not result in the 
expenditure by State, local, and Tribal governments, in the aggregate, 
nor by the private sector, of $100,000,000 or more in any one year as a 
result of a Federal mandate, and it will not significantly or uniquely 
affect small governments. In addition, this rulemaking falls under an 
exclusion to this Act for rules that provide for emergency assistance 
or relief at the request of any State, local, or Tribal government. See 
2 U.S.C. 1503(4). Therefore, no actions are deemed necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995.

E. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44 
U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
agency obtains approval from the Office of Management and Budget (OMB) 
for the collection and the collection displays a valid OMB control 
number. See 44 U.S.C. 3506, 3507.
    In this rule, FEMA is seeking a revision to the already existing 
collection of information, OMB Control Number 1660-0017. This rule 
revises FEMA's regulations governing the Public Assistance program at 
44 CFR 206.203(c) to increase the monetary threshold for when FEMA will 
process an application using ``simplified procedures'' to $1,000,000. 
For this information collection, the number of annual responses is 
decreasing from 449,084 to 431,720, the annual burden hours are 
decreasing from 491,533 to 484,189, and the annual cost to respondents 
is decreasing from $27,845,344 to $27,090,374. These changes are due to 
a decrease in the number of responses for FEMA Forms 009-0-123, 009-0-
124, 009-0-125, 009-0-126, and 009-0-127 and for the number of 
respondents for FEMA Form 009-0-111. FEMA requires that recipients of 
large projects fill out these supplemental forms to account for the 
actual costs for reconciliation purposes. These forms are not required 
for small projects. The decrease in the number of large projects as a 
result of the increase in the large project threshold means fewer 
applicants submitting these forms.
Collection of Information
    Title: PA Program.
    Type of information collection: Revision of a currently approved 
collection.
    OMB Number: 1660-0017.
    Forms: FEMA Form 009-0-49 Request for Public Assistance; FEMA Form 
009-0-91 Project Worksheet (PW); FEMA Form 009-0-91A Project Worksheet 
(PW)--Damage Description and Scope of Work Continuation Sheet; FEMA 
Form 009-0-91B Project Worksheet (PW)--Cost Estimate Continuation 
Sheet; FEMA Form 009-0-91C Project Worksheet (PW)--Maps and Sketches 
Sheet; FEMA Form 009-0-91D Project Worksheet (PW)--Photo Sheet; FEMA 
Form 009-0-120 Special Considerations Questions; FEMA Form 009-0-121 
PNP Facility Questionnaire; FEMA Form 009-0-123 Force Account Labor 
Summary Record; FEMA Form 009-0-124 Materials Summary Record;

[[Page 47376]]

FEMA Form 009-0-125 Rented Equipment Summary Record; FEMA Form 009-0-
126 Contract Work Summary Record; FEMA Form 009-0-127 Force Account 
Equipment Summary Record; FEMA Form 009-0-128 Applicant's Benefits 
Calculation Worksheet; FEMA Form 009-0-111, Quarterly Progress Report; 
FEMA Form 009-0-141, FAC-TRAX System.
    Abstract: The information collected is utilized by FEMA to make 
determinations for PA grants based on the information supplied by the 
respondents.
    Affected Public: State, local, or Tribal Government.
    Estimated Number of Respondents: 1,067.
    Estimated Number of Responses: 431,720.
    Estimated Total Annual Burden Hours: 484,189.
    The table below provides estimates of annualized cost to 
respondents for the hour burdens for the collection of information.

                                                  Table 13--Estimated Annualized Burden Hours and Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Number of                    Avg.        Total                     Total
                                                                Number of    responses      Total      burden per     annual        Avg.        annual
        Type of respondent              Form name/form No.     respondents      per       number of     response   burden  (in     hourly     respondent
                                                                             respondent   responses    (in hours)     hours)     wage rate       cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
State, Local or Tribal Government.  FEMA Form 009-0-49,                 56          129        7,224         0.25        1,806       $55.95     $101,046
                                     Request for PA.
State, Local or Tribal Government.  FEMA Form 009-0-91,                 56          840       47,040          1.5       70,560        55.95    3,947,832
                                     Project Worksheet (PW)
                                     and a Request for Time
                                     Extension.
State, Local or Tribal Government.  FEMA Form 009-0-91A                 56          784       43,904          1.5       65,856        55.95    3,684,643
                                     Project Work Sheet (PW)
                                     Damage Description and
                                     Scope of Work.
State, Local or Tribal Government.  FEMA Form 009-0-91B,                56          784       43,904       1.3333       58,537        55.95    3,275,145
                                     Project Worksheet (PW)
                                     Cost Estimate
                                     Continuation Sheet and
                                     Request for additional
                                     funding for Cost
                                     Overruns.
State, Local or Tribal Government.  FEMA Form 009-0-91C                 56          728       40,768          1.5       61,152        55.95    3,421,454
                                     Project Worksheet (PW)
                                     Maps and Sketches Sheet.
State, Local or Tribal Government.  FEMA Form 009-0-91D                 56          728       40,768          1.5       61,152        55.95    3,421,454
                                     Project Worksheet (PW)
                                     Photo Sheet.
State, Local or Tribal Government.  FEMA Form 009-0-120,                56          840       47,040          0.5       23,520        55.95    1,315,944
                                     Special Considerations
                                     Questions/.
State, Local or Tribal Government.  FEMA Form 009-0-128,                56          784       43,904          0.5       21,952        55.95    1,228,214
                                     Applicant's Benefits
                                     Calculation Worksheet/.
State, Local or Tribal Government.  FEMA Form 009-0-121, PNP            56           94        5,264          0.5        2,632        55.95      147,260
                                     Facility Questionnaire.
State, Local or Tribal Government.  FEMA Form 009-0-123,                56           32        1,792          0.5          896        55.95       50,131
                                     Force Account Labor
                                     Summary Record \112\.
State, Local or Tribal Government.  FEMA Form 009-0-124,                56           32        1,792         0.25          448        55.95       25,066
                                     Materials Summary Record/
                                     .
State, Local or Tribal Government.  FEMA Form 009-0-125,                56           32        1,792          0.5          896        55.95       50,131
                                     Rented Equipment Summary
                                     Record.
State, Local or Tribal Government.  FEMA Form 009-0-126,                56           32        1,792          0.5          896        55.95       50,131
                                     Contract Work Summary
                                     Record/.
State, Local or Tribal Government.  FEMA Form 009-0-127,                56           32        1,792         0.25          448        55.95       25,066
                                     Force Account Equipment
                                     Summary Record/.
State, Local or Tribal Government.  State Administrative Plan           56            1           56            8          448        55.95       25,066
                                     and State Plan
                                     Amendments/No Form.
State, Local or Tribal Government.  FEMA Form 009-0-111,                55            4          220          100       22,000        55.95    1,230,900
                                     Quarterly Progress
                                     Report.
State, Local or Tribal Government.  Request for Appeals or              56            9          504            3        1,512        55.95       84,596
                                     Arbitrations &
                                     Recommendation/No Forms.
State, Local or Tribal Government.  Request for Arbitration &            4            5           20            3           60        55.95        3,357
                                     Recommendation resulting
                                     from Hurricanes Katrina
                                     or Rita/No Form.
State, Local or Tribal Government.  FEMA Form 009-0-141, FAC-           56          913       51,128         1.25       63,910        55.95    3,575,765
                                     TRAX System.
State, Local or Tribal Government.  FEMA Template 104-FY-21-            56          911       51,016          0.5       25,508        55.95    1,427,173
                                     100 Equitable COVID-19
                                     Response and Recovery.
                                                              ------------------------------------------------------------------------------------------
    Total.........................  .........................        1,067  ...........      431,720  ...........      484,189  ...........   27,090,374
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The ``Avg. Hourly Wage Rate'' for each respondent includes a 1.6 multiplier to reflect a fully-loaded wage rate.


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

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

    Estimated Total Annual Respondent Cost: $27,090,374.
    Estimated Respondents' Operation and Maintenance Costs: N/A.
    Estimated Respondents' Capital and Start-Up Costs: N/A.
    Estimated Total Annual Costs to the Federal Government: $1,957,204.
    FEMA calculated the impact on the Information Collection Request if 
the maximum threshold were changed from $132,800 to $1,000,000 by 
taking the difference in the number of large projects at the $132,800 
threshold compared to the $1,000,000 threshold. At the $132,800 
threshold, there are

[[Page 47377]]

14,334 large projects over 3.1 years. At the $1,000,000 threshold, 
there are 3,476 large projects in 3.1 years. FEMA earlier mentions the 
10,858 (14,334-3,476) projects that will now be considered small from 
these numbers of projects over 3.1 years. Annually, there will be 3,503 
(10,858 / 3.1) additional small projects that were formerly large.
    FEMA then calculated the total number of responses for each form at 
the $1,000,000 threshold by taking the total number of responses at the 
$132,800 threshold and then subtracting 3,503. For FEMA Form 009-0-123, 
009-0-124, 009-0-125, 009-0-126, and 009-0-127, FEMA estimates there 
will be 1,761 (5,264-3,503) total number of responses for each of these 
forms at the $1,000,000 threshold. FEMA then analyzed the data to 
determine then number of recipients who would not have at least one 
ongoing large project if the maximum threshold were $1,000,000 compared 
to those who would at the $132,800 threshold. Over the 3.1-year period, 
the number of recipients with at least 1 ongoing large project would 
reduce by 1, from 56 to 55, meaning 1 fewer recipient would submit FEMA 
Form 009-0-111. The total number of responses to the quarterly form 
would reduce by 12.4 (4 responses x 3.1) over the 3.1-year period, or 
by approximately 4 responses annually.

F. Privacy Act/E-Government Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must 
determine whether implementation of a regulation will result in a 
system of records. A ``record'' is any item, collection, or grouping of 
information about an individual that is maintained by an agency, 
including, but not limited to, one's education, financial transactions, 
medical history, and criminal or employment history and that contains 
one's name, or the identifying number, symbol, or other identifying 
particular assigned to the individual, such as a finger or voice print 
or a photograph. See 5 U.S.C. 552a(a)(4). A ``system of records'' is a 
group of records under the control of an agency from which information 
is retrieved by the name of the individual or by some identifying 
number, symbol, or other identifying particular assigned to the 
individual. An agency cannot disclose any record which is contained in 
a system of records except by following specific procedures.
    The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires 
specific procedures when an agency takes action to develop or procure 
information technology that collects, maintains, or disseminates 
information that is in an identifiable form. This Act also applies when 
an agency initiates a new collection of information that will be 
collected, maintained, or disseminated using information technology if 
it includes any information in an identifiable form permitting the 
physical or online contacting of a specific individual.
    In accordance with U.S. Department of Homeland Security (DHS) 
policy, FEMA has completed a Privacy Threshold Analysis for this rule. 
FEMA has determined this rulemaking does not require the development 
and publication of a new or modified System of Records Notice (SORN). 
The information collected has coverage under an existing Privacy Impact 
Assessments (PIA) and an existing SORN:
    DHS/FEMA/PIA-013 Grant Management Programs;
    DHS/FEMA-009 Hazard Mitigation Assistance Grant Programs SORN.
    The rule does not impact the personally identifiable information 
(PII) that FEMA currently collects, stores, maintains, or disseminates. 
The rulemaking has adequate coverage under the above listed PIA and 
SORN.

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

    Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments,'' 65 FR 67249 (Nov. 9, 2000), applies to agency 
regulations that have Tribal implications, that is, regulations that 
have substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. Under this Executive Order, to the extent 
practicable and permitted by law, no agency shall promulgate any 
regulation that has Tribal implications, that imposes substantial 
direct compliance costs on Indian Tribal governments, and that is not 
required by statute, unless funds necessary to pay the direct costs 
incurred by the Indian Tribal government or the Tribe in complying with 
the regulation are provided by the Federal Government, or the agency 
consults with Tribal officials.
    FEMA has reviewed this final rule under Executive Order 13175 and 
has determined that it does not have a substantial direct effect on one 
or more Indian tribes, on the relationship between the Federal 
Government and Indian Tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian Tribes. This 
rule updates the dollar figure related to FEMA's procedures for 
handling grants for small and large projects. It is therefore 
procedural and will not affect the substantive rights or interests of 
Indian Tribal governments.

H. Executive Order 13132, ``Federalism''

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
sets forth principles and criteria that agencies must adhere to in 
formulating and implementing policies that have federalism 
implications, that is, regulations that have substantial direct effects 
on the States, on the relationship between the national government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. Federal agencies must closely examine 
the statutory authority supporting any action that would limit the 
policymaking discretion of the States, and to the extent practicable, 
must consult with State and local officials before implementing any 
such action.
    FEMA has determined that this rulemaking does not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, and 
therefore does not have federalism implications as defined by the 
Executive Order.

I. Executive Order 11988, ``Floodplain Management''

    Pursuant to Executive Order 11988, ``Floodplain Management,'' 42 FR 
26951 (May 24, 1977), each agency must provide leadership and take 
action to reduce the risk of flood loss, to minimize the impact of 
floods on human safety, health and welfare, and to restore and preserve 
the natural and beneficial values served by floodplains in carrying out 
its responsibilities for (1) acquiring, managing, and disposing of 
Federal lands and facilities; (2) providing Federally undertaken, 
financed, or assisted construction and improvements; and (3) conducting 
Federal activities and programs affecting land use, including but not 
limited to water and related land resources planning, regulating, and 
licensing activities. In carrying out these responsibilities, each 
agency must evaluate the potential effects of any actions it may take 
in a floodplain; ensure that its planning programs and budget requests 
reflect consideration of flood hazards and floodplain management; and 
prescribe procedures

[[Page 47378]]

to implement the policies and requirements of the Executive Order.
    Before promulgating any regulation, an agency must determine 
whether the regulations will affect a floodplain(s), and if so, the 
agency must consider alternatives to avoid adverse effects and 
incompatible development in the floodplain(s). If the head of the 
agency finds that the only practicable alternative consistent with the 
law and with the policy set forth in Executive Order 11988 is to 
promulgate a regulation that affects a floodplain(s), the agency must, 
prior to promulgating the regulation, design or modify the regulation 
in order to minimize potential harm to or within the floodplain, 
consistent with the agency's floodplain management regulations. It must 
also prepare and circulate a notice containing an explanation of why 
the action is to be located in the floodplain.
    The purpose of this rule is to update the dollar figure related to 
FEMA's procedures for handling grants for small and large projects. In 
accordance with 44 CFR part 9, ``Floodplain Management and Protection 
of Wetlands,'' FEMA determines that the changes in this rule would not 
have an effect on floodplains. When FEMA undertakes specific actions 
that may affect floodplain management, FEMA follows the procedures set 
forth in 44 CFR part 9 to ensure compliance with this Executive Order. 
These procedures include a specific, eight-step process for conducting 
floodplain management and wetland reviews. With few exceptions (such as 
emergencies) and as set forth in applicable statutes or regulations, 
reviews for compliance must be completed before FEMA approves funding 
and before work is started. This rule does not change this process.

J. Executive Order 11990, ``Protection of Wetlands''

    Executive Order 11990, ``Protection of Wetlands,'' 42 FR 26961 (May 
24, 1977) sets forth that each agency must provide leadership and take 
action to minimize the destruction, loss or degradation of wetlands, 
and to preserve and enhance the natural and beneficial values of 
wetlands in carrying out the agency's responsibilities. These 
responsibilities include (1) acquiring, managing, and disposing of 
Federal lands and facilities; and (2) providing Federally undertaken, 
financed, or assisted construction and improvements; and (3) conducting 
Federal activities and programs affecting land use, including but not 
limited to water and related land resources planning, regulating, and 
licensing activities. Each agency, to the extent permitted by law, must 
avoid undertaking or providing assistance for new construction located 
in wetlands unless the head of the agency finds (1) that there is no 
practicable alternative to such construction, and (2) that the action 
includes all practicable measures to minimize harm to wetlands which 
may result from such use. In making this finding, the head of the 
agency may take into account economic, environmental and other 
pertinent factors.
    In carrying out the activities described in Executive Order 11990, 
each agency must consider factors relevant to a proposal's effect on 
the survival and quality of the wetlands. These include public health, 
safety, and welfare, including water supply, quality, recharge and 
discharge; pollution; flood and storm hazards; sediment and erosion; 
maintenance of natural systems, including conservation and long term 
productivity of existing flora and fauna, species and habitat diversity 
and stability, hydrologic utility, fish, wildlife, timber, and food and 
fiber resources. They also include other uses of wetlands in the public 
interest, including recreational, scientific, and cultural uses. The 
purpose of this rule is to update the dollar figure related to FEMA's 
procedures for handling grants for small and large projects. In 
accordance with 44 CFR part 9, ``Floodplain Management and Protection 
of Wetlands,'' FEMA determines that the changes in this rule would not 
have an effect on wetlands. When FEMA undertakes specific actions that 
may affect floodplain management, FEMA follows the procedures set forth 
in 44 CFR part 9 to ensure compliance with this Executive Order. These 
procedures include a specific, eight-step process for conducting 
floodplain management and wetland reviews. With few exceptions (such as 
emergencies) and as set forth in applicable statutes or regulations, 
reviews for compliance must be completed before FEMA approves funding 
and before work is started. This rule does not change this process.

K. Executive Order 12898, ``Environmental Justice''

    Pursuant to Executive Order 12898, ``Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations,'' 59 FR 7629 (Feb.16, 1994), as amended by Executive Order 
12948, 60 FR 6381 (Feb. 1, 1995), FEMA incorporates environmental 
justice into its policies and programs. The Executive Order requires 
each Federal agency to conduct its programs, policies, and activities 
that substantially affect human health or the environment in a manner 
that ensures that those programs, policies, and activities do not have 
the effect of excluding persons from participation in programs, denying 
persons the benefits of programs, or subjecting persons to 
discrimination because of race, color, or national origin.
    This rulemaking will not result in disproportionately high or 
adverse effects on human health or the environment. The purpose of this 
rule is to update the dollar figure related to FEMA's procedures for 
handling grants for small and large PA projects. The PA program 
provides funding to States, local governments, Tribal governments, and 
PNP facilities/organizations to assist them in their emergency response 
and disaster response and recovery efforts. The rulemaking will not 
have the effect of excluding persons from participation in or denying 
persons the benefit of this program, nor will it subject persons to 
discrimination because of race, color, or national origin. The PA 
program is administered consistent with the nondiscrimination 
requirements of 44 CFR 206.11 and section 308 of the Stafford Act, 42 
U.S.C. 5151.

L. National Environmental Policy Act of 1969 (NEPA)

    Section 102 of the National Environmental Policy Act of 1969 
(NEPA), 83 Stat. 852 (Jan. 1, 1970) (42 U.S.C. 4321 et seq.) requires 
Federal agencies to consider the impacts of their major actions on the 
quality of the human environment. Each agency can develop categorical 
exclusions (CATEXs) to cover major Federal actions that have been 
demonstrated to not typically trigger significant impacts to the human 
environment individually or cumulatively. If an action does not qualify 
for a CATEX and has the potential to significantly affect the 
environment, Federal agencies conduct environmental assessments (EAs) 
to evaluate those actions. The Council on Environmental Quality's (CEQ) 
procedures for implementing NEPA, 40 CFR parts 1500 through 1508, 
require Federal agencies to prepare Environmental Impact Statements 
(EISs) for major Federal actions significantly affecting the quality of 
the human environment. At the end of the EA process, the agency 
determines whether to make a Finding of No Significant Impact (FONSI) 
or whether to initiate the EIS process. A major federal action may be 
categorically excluded under a Federal agency's NEPA procedures and if 
there are no extraordinary circumstances. 40 CFR 1507.3, 1508.4. This 
rule falls within the scope of the

[[Page 47379]]

Department of Homeland Security List of Categorical Exclusion A3(a), 
which covers rules of a strictly administrative or procedural nature. 
The update to the monetary threshold in this rule will have no 
significant effect on the human environment, is categorically excluded 
consistent with DHS procedure and NEPA regulations, and no 
extraordinary circumstances have been identified. Therefore, this rule 
does not require the preparation of either an EA or an EIS as defined 
by NEPA. See Department of Homeland Security Instruction Manual 023-01-
001-01, Revision 01, Implementation of the National Environmental 
Policy Act, section (V)(B)(2).

M. National Historic Preservation Act

    The National Historic Preservation Act (NHPA) (54 U.S.C. 300101, 
formerly 16 U.S.C. 470) was enacted in 1966, with various amendments 
throughout the years. Section 106 of the NHPA (54 U.S.C. 306108) 
requires Federal agencies to consider the effects of its actions, 
referred to as an ``undertaking,'' on any historic property listed, or 
eligible for listing, on the National Register. Section 106 requires 
the Federal agency to consult with any Federal agencies, State, local, 
and Tribal governments, and members of the public who have an interest 
in the effects of the undertaking. Section 106 mandates the 
consultation process in the early stages of project planning and that 
it be completed prior to the approval of expenditure of any Federal 
funds for the undertaking. Subpart B of 36 CFR part 800 lays out a 
four-step Section 106 process to fulfill this obligation: 1--Initiate 
the process (800.3); 2--Identify historic properties (800.4), 3--Assess 
adverse effects (800.5), and 4--Resolve adverse effects (800.6).
    This rule updates the Public Assistance monetary threshold for when 
FEMA uses the application of simplified procedures for administrative 
efficiency. Pursuant to section 106 of the NHPA and its implementing 
regulations at 36 CFR part 800, FEMA has determined that this 
rulemaking does not have the potential to cause effects to historic 
properties. In accordance with 36 CFR 800.3(a)(1), FEMA has no further 
obligations under section 106. When FEMA undertakes specific actions 
that may affect historic properties, FEMA follows the procedures set 
forth in 36 CFR part 800 to ensure compliance with this law. These 
procedures include a specific, four-step process for determining 
effects to historic properties. With few exceptions (such as 
emergencies) and as set forth in applicable statutes or regulations, 
reviews for compliance must be completed before FEMA approves funding 
and before work is started. This rule does not change this process.

N. Endangered Species Act

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

O. Congressional Review of Agency Rulemaking

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

    For the reasons stated in the preamble, the Federal Emergency 
Management Agency amends 44 CFR part 206 as follows:

PART 206--FEDERAL DISASTER ASSISTANCE

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; sec. 1105, Pub. L. 113-2, 127 Stat. 43 (42 U.S.C. 
5189a note).


0
2. In Sec.  206.203:
0
a. In paragraphs (c)(1) and (2), remove ``$120,000'' and add in its 
place ``$1,000,000'' wherever it appears; and
0
b. Add paragraph (c)(3).
    The addition reads as follows:


Sec.  206.203   Federal grant assistance.

* * * * *

[[Page 47380]]

    (c) * * *
    (3) Applicability date. The dollar threshold provided in this 
paragraph (c) applies to project worksheets that have not been 
obligated as of August 3, 2022 for major disasters and emergencies 
declared on or after March 13, 2020.
* * * * *

Deanne B. Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2022-16555 Filed 8-2-22; 8:45 am]
BILLING CODE 9111-23-P


