decision to revise the language to this paragraph of the Final Rule.
However, FEMA felt this deadline would not fully address most
commenters' concerns with the ability to effectively value their claim
on their own and the need for experts to assist. The revision to the
Final Rule to allow reasonable costs for these opinions that the Claims
Office agrees are necessary regardless of when the opinion was
requested will provide more flexibility to claimants to seek expert
opinions as part of the claims process while also retaining good
governance of the use of the Act's funds to those opinions that are
necessary to effectively determine the claim amount.
    Comment: A commenter requested that FEMA make available technical
assistance and expert services to claimants, including arborists,
surveyors, appraisers/adjusters, and engineers to help with the most
common losses.
    FEMA Response: FEMA agrees and will work with claimants to identify
appropriate resources to assist with valuing claims as explained above.
    Comment: One commenter requested compensation for a Habitat
Equivalency Analysis and GIS mapping as necessary to prove loss in the
most accurate way. One commenter suggested FEMA provide claimants with
access to all after-wildfire high-resolution aerial imagery of the Fire
area to determine the extent of the damage more accurately to private
forestlands as well as surrounding forestlands, stating the most recent
imagery is insufficient.
    FEMA Response: FEMA recommends claimants seeking compensation for
expert opinions or resources submit their claim for reimbursement
explaining why the opinion and/or resource was required to effectively
value their claim. As explained above, if claimants are having
difficulty obtaining these opinions and/or resources, FEMA will work
with the claimant to assist in locating the resources needed to
effectively value their claim.
2. Comments on Sec.  296.31(b) Lump Sum Payments for Incidental
Expenses
    Comment: Several commenters requested that FEMA pay for all
expenses associated with the claims process, removing the exclusion for
damages for time spent prosecuting a claim in Sec.  296.21(b) and
changing the lump sum payment in paragraph (b) to allow for full
recoupment of all expenses, including time. Some commenters focused in
on specific incidental expenses, requesting reimbursement for expenses
such as travel expenses and replacement of documents.
    FEMA Response: As explained in the IFR, compensatory damages for
time spent in claims preparation are not considered actual compensatory
damages. There is no evidence Congress intended that claimants be
compensated for the value of their time in preparing a claim. Providing
compensation for a claimant's time would be difficult to administer, as
FEMA would have to determine equitably the value of a claimant's time
and to verify that claimants have expended the number of hours that are
claimed. FEMA's payments under the Act are subject to independent audit
by the GAO and the DHS OIG and claimants would likely find attempts by
auditors to verify the payment for hours spent in the claims process
highly intrusive. Additionally, the type of compensation requested by
commenters here would require production of receipts and other
documentation, resulting in an overly burdensome process for this
payment to claimants contrary to other comments requesting the agency
streamline and simplify the claims process. As explained in the IFR,
FEMA is choosing to exercise discretion to provide a lump sum payment
to claimants for miscellaneous and incidental expenses incurred in the
claims process. FEMA will provide a lump sum payment of five percent of
the insured and uninsured loss (excluding flood insurance premiums),
not to exceed $25,000. The minimum lump sum payment is $150. Section
296.31(b) of the IFR represents a fair and reasonable accommodation
between the agency's responsibility to spend Federal funds wisely and
the desire to compensate claimants as fully as possible.
    Comment: One commenter suggested FEMA partner with a trusted local
financial institution to carry out payment of approved claims expense
reimbursements to help ensure prompt, complete, and correct payments to
approved claimants.
    FEMA Response: The current claims process requires claimants to
provide FEMA with information on how they want to be paid, either by
electronic funds transfer or check. No third-party financial
institution is required for these transactions.
    Comment: Two commenters recommended that subrogation claimants and
those claimants whose only Fire-related loss is for flood insurance
premiums should be eligible if their property was not previously
designated in a flood zone but is now considered to be in one as a
result of the Fire.
    FEMA Response: FEMA disagrees that these claimants should be
eligible for a lump sum payment for incidental expenses incurred in
their claims preparation. Subrogees are generally insurance companies,
and their industry involves claims review and preparation. These
entities have no legal right to pursue expenses for claims preparation.
The burden placed on those claimants only seeking flood insurance
premiums is minimal, as the only claim made is for flood insurance
premiums and the documentation needed to support such a claim would be
very limited compared to other claims. To ensure the funding provided
under the Act is utilized to compensate claimants as fully as possible
while also ensuring Federal funds are wisely spent, these claimants
should not be eligible for a lump sum payment for incidental expenses.
FEMA is retaining the language in paragraph (b) in the Final Rule
making these types of claimants ineligible for the lump sum payment.

N. Comments on Sec. Sec.  296.34 and 296.35 Supplementing Claims and
Reopening a Claim

1. Comments on Sec.  296.34 Supplementing Claims
    Comment: A few commenters sought clarification and/or revision to
this section of the IFR. One commenter asked if claimants made an error
whether they were allowed to file again.
    FEMA Response: As explained in the IFR, there is flexibility built
into the process for claimants to tell FEMA

about injuries and damages that they could not have discovered or did
not remember when they signed the Notice of Loss or Proof of Loss. This
may also include situations where a claimant makes an inadvertent
error. Sections 296.34 and 296.35 explain this flexibility. Section
296.34 allows claimants to supplement their claim by working directly
with a Claims Reviewer prior to submitting their Proof of Loss. If a
claimant is not prepared to sign a Proof of Loss within the timeframe
required, an extension may be requested from the Director of the Claims
Office. Alternatively, the claimant may withdraw the claim and re-file
the claim before November 14, 2024. Once the Proof of Loss is filed, a
claimant can request to supplement their claim by writing to the
Director of the Claims Office providing the reasons why the claim needs
to be supplemented. The claimant should consult with the Claims
Reviewer about the procedure for obtaining permission from the Director
of the Claims Office.
    Comment: Several commenters requested FEMA update the supplementing
claims section of the regulation to simplify the process for
supplementing claims and eliminate references to the Administrative
Appeals process. These commenters wrote that requiring claimants to
supplement a claim pursuant to comparatively complex adjudicatory-like
procedures undermined FEMA's intent to create a simple claims process
that is sensitive to the burdens already placed upon claimants by the
Fire.
    FEMA Response: FEMA disagrees with the commenters' suggestion that
incorporating language on the Administrative Appeals process in this
section of the regulation complicates the process. Section 296.34
allows claimants to supplement their claim by working directly with a
Claims Reviewer prior to submitting their Proof of Loss. If a claimant
is not prepared to sign a Proof of Loss within the timeframe required,
an extension may be requested from the Director of the Claims Office.
Once the Proof of Loss is filed, a claimant can request to supplement
their claim by writing to the Director of the Claims Office providing
the reasons why the claim needs to be supplemented. The claimant should
consult with the Claims Reviewer about the procedure for obtaining
permission from the Director of the Claims Office. The Director of the
Claims Office will then directly review the additional claim consistent
with how the Director reviews claims in the Administrative Appeal
process. By providing for the procedures used in the Administrative
Appeal process, FEMA ensures that the supplemental claims information
is reviewed directly by the Director after the Authorized Official's
determination is issued on the remainder of the claim. If the claimant
decides to appeal the Authorized Official's determination on other
injuries, the Director of the Claims Office will decide both matters in
a single appeal proceeding to expedite processing. Alternatively, the
claimant may withdraw the claim and re-file the claim once before
November 14, 2024, when the injuries are better defined. The process
provided for in Sec.  296.34 is sufficient and not overly burdensome on
the claimant.
    Comment: A commenter requested that FEMA allow claims to be
reopened and supplemented in response to future flooding events.
    FEMA Response: As explained above, there is flexibility built into
the process for claimants to tell FEMA about injuries and damages that
they could not have discovered or did not remember when they signed the
Proof of Loss, including future flooding events. Sections 296.34 and
296.35 allow claimants to supplement and/or reopen claims respectively.
2. Comments on Sec.  296.35 Reopening a Claim
    Comment: A few commenters sought clarification and/or revision to
the reopening claims section of the IFR. Most of these commenters were
concerned about the deadline to reopen a claim, stating additional
damages may be experienced. One commenter asked how to proceed where
their claim is paid, and they then suffer additional damages from
flooding seeking clarification on whether they should file another
Notice of Loss.
    FEMA Response: FEMA recognizes that damages may continue beyond the
deadline for submitting a claim. The agency is generally bound by the
Act's requirements for claims to be submitted within two years of the
IFR's publication. In the IFR, FEMA allows for claimants to reopen
their claims for up to an additional year after submitting their
initial claim.
    Comment: One commenter requested that FEMA allow a lump sum payment
of 15 percent of all injuries, damages, losses, and expenses to be
added on to each claim to cover for future unknown items.
    FEMA Response: As explained above, FEMA recognizes that damages may
continue beyond the deadline for submitting a claim. The agency is
generally bound by the Act's requirements for claims to be submitted
within two years of the IFR's publication. In the IFR, FEMA allows for
claimants to reopen their claims for up to an additional year after
submitting their initial claim. Claims related to future damages as a
result of the Fire would need to be made through other remedies as the
Act sets a two-year limitation for claims under the Act. FEMA is unable
to pay lump sum payments to cover future unknown injuries, as unknown
injuries are speculative in nature and the Act requires FEMA to pay for
actual compensatory damages. To the extent that a claimant is able to
reasonably quantify expected future losses, future losses are
compensable.
    Comment: Two commenters recommended FEMA insert ``real property''
in place of ``home'' in this section to ensure that this clause is not
limited to homes but includes all real property.
    FEMA Response: FEMA concurs with this recommendation and is
amending the IFR language that limits the close of the sale to a home.
FEMA agrees with commenters that changing the language to address the
sale of real property instead of a home is more appropriate and is
revising Sec.  296.35 to reflect that those claimants could reopen a
claim if they closed on the sale of real property and wish to present a
claim for a decrease in the value of the real property under Sec.
296.21(c)(3). This change is consistent with concerns raised by
commenters that the Cerro Grande Fire Assistance process was not
necessarily appropriate to this Fire given the distinct geographic,
economic, and cultural considerations of the impacted communities. As
explained above, this Fire impacted significant forested areas and more
rural areas than the Cerro Grande Fire. This change in the Final Rule
more appropriately reflects the Hermit's Peak/Calf Canyon Fire
claimants' needs by including all real property.
    Comment: Several commenters requested FEMA update this section of
the regulation, providing specific suggestions to revise the section on
reopening claims to separate out claims for heightened risk reduction,
the sale of real property, reconstruction, and good cause, as well as
providing an open-ended deadline for submission of reopened claims
allowing a deadline to be set in the future via a Federal Register
notice.
    FEMA Response: Section 296.35 provides for reopening a claim after
the claimant has submitted a Release and Certification Form again with
the goal to allow claimants an opportunity to request damages in excess
of those previously awarded. Claimants can use

the reopening provision of this section to seek compensation for an
injury not previously reported to FEMA in circumstances where claimants
seek heightened risk reduction compensation under Sec.  296.21(e)(5);
the claimant closed the sale of a home and wishes to present a claim
for a decrease in the value of the real property under Sec.
296.21(c)(3); the claimant has incurred additional losses under Sec.
296.21(c)(1) as part of a reconstruction in excess of those previously
awarded; or where the Director of the Claims Office determines good
cause exists to reopen the claim. While FEMA does not believe the
current language in the IFR needs to be restructured as these
commenters suggested in the Final Rule, FEMA recognizes that damages
may continue beyond the deadline for submitting a claim. FEMA plans to
consider and incorporate future losses into the claims valuation
methodology, where appropriate. In the IFR, FEMA allows for claimants
to reopen their claims for up to an additional year after submitting
their initial claim. FEMA is revising Sec.  296.35 consistent with the
commenter's request to use the Cerro Grande process to extend the
deadline where reconstruction costs under Sec.  296.21(c)(3) exceed the
previously paid claim or for good cause. FEMA will issue notice in the
Federal Register and at https://www.fema.gov/hermits-peak of this
future deadline. FEMA believes this change is consistent with the prior
Cerro Grande process and will help ensure claimants are compensated for
their actual damages as a result of the Fire.
3. Comments on Sec.  296.37 Confidentiality of Information
    Comment: One commenter stated the Federal government is responsible
for providing the right to privacy to claimants. One commenter raised
concerns about privacy violations with local hires.
    FEMA Response: FEMA agrees that the Federal government is
responsible for ensuring confidentiality for private information
submitted by claimants. Section 296.37 provides that confidential
information submitted by individual claimants is protected from
disclosure to the extent permitted by the Privacy Act. The Privacy Act
protects the confidentiality of information provided by individual
claimants. This information may only be disclosed with the consent of
the claimant or pursuant to a routine use, which has been disclosed to
the public. Confidential, proprietary, and trade secret information
provided by entities, such as business, Indian Tribes, Tribal entities,
and government agencies, are not eligible for Privacy Act protection,
but may be exempt from disclosure under the Freedom of Information Act.
All FEMA employees are obligated to follow the Privacy Act
requirements, whether they are local hires or not and FEMA will ensure
that all employees receive appropriate training on the Privacy Act.

O. Comments on Sec.  296.41 Administrative Appeal

    Comment: Commenters raised concerns and questions about the appeals
process provided in Sec.  296.41. Some commenters asked for more detail
in the regulation regarding the appeals process. A commenter wrote that
the regulations were unclear as they did not outline under which
circumstances a victim could appeal FEMA's decision, nor a timeline of
the appeals process. The commenter asked that if a claimant wished to
appeal, must the claimant appeal the entire award, or could the appeal
be limited to the portion of the award to which the claimant objects.
The commenter also asked if a claimant wished to have their case heard
in the United States District Court, did that mean that the claimant
had to file a Federal Tort Claim and begin the process from square one,
or would the District Court review the award given by FEMA for legal
error and the standard of review if heard by the District Court. The
commenter further asked if there would there be an opportunity for
appellate review thereafter.
    FEMA Response: The current regulatory text is sufficient to provide
claimants with a general understanding of the process and that details
of the process are more appropriate for additional guidance or
procedural documents, not the regulation. The regulation states that in
their appeal, a claimant should identify the portion of the Authorized
Official's determination they believe is incorrect, whether that be the
entire claim or just certain portions of the claim. The regulation also
enables the claimant to supplement the record with additional
documentary evidence supporting the appeal. After the appeal is
decided, if the claimant continues to be dissatisfied with the
determination, the claimant can pursue arbitration pursuant to Section
104(h)(3) of the Act or elect to seek record review of the decision in
the Federal District Court for the District of New Mexico pursuant to
Section 104(i) of the Act. Alternatively, the claimant can elect not to
pursue compensation through the Hermit's Peak/Calf Canyon Claims Office
and elect to pursue their other legal remedies against the United
States as explained in the Act.\57\
---------------------------------------------------------------------------

    \57\ See Sections 104(h)(1)(B) and 104(h)(1)(C) of the Act.
---------------------------------------------------------------------------

    Comment: Two commenters raised questions about how the appeals
process would work, asking what happened if claimants did not accept
the Authorized Official's final determination but chose not to appeal
while another commenter asked if claimants would be allowed to choose
their own attorney if they file an appeal.
    FEMA Response: If a claimant opts not to appeal and does not accept
the final determination, the claimant remains free to pursue other
remedies as detailed in the regulation at Sec.  296.12. Claimants that
wish to have legal representation may select their own counsel at any
point in the claims process.
    Comment: FEMA received one comment in support of the IFR's
allowance for either the Claims Office Director or the claimant to
request a conference. The commenter, however, requested additional
changes to the IFR. The commenter wrote ``I support this Interim Rule,
with two caveats. First, to be fair and effective, attorneys
representing claimants must be involved with their clients in either
conferences or mediations. Second, mediators must be qualified and
independent. In other words, they cannot be employees or
representatives of FEMA or any other branch or agency of the United
States Government. Th[e]s[e] changes would make the proposed conference
and mediation process comport with ordinary and fair claims processing
practice.''
    FEMA Response: As explained above, claimants that wish to have
legal representation may select their own counsel at any point in the
claims process. With an appropriate Privacy Act waiver, which is
included in the Notice of Loss form, FEMA will ensure attorneys are
allowed to participate with claimants in any and all parts of the
Claims Process, up to and including any appeal-related conferences and
arbitration of the claim. The Arbitration Administrator will maintain a
list of qualified arbitrators who have agreed to serve. The Claims
Office is using a contracting vehicle to engage independent arbitrators
to serve as Claims Office arbitrators. Where possible, the Claims
Office will use arbitrators that are local to New Mexico. The
arbitrations will be decided by one arbitrator if the amount in dispute
is $500,000 or less and a panel of three arbitrators if the amount in
dispute exceeds $500,000. Arbitrators will be

assigned by the Arbitration Administrator through a random drawing.
    Comment: One commenter requested FEMA allow claimant's attorney to
be notified and included throughout the entire hearing process. The
commenter also requested that the rule be changed to allow the claimant
to discover the evidence and opinions of those considered or proffered
by the Claims Office against the claimant.
    FEMA Response: As explained above, claimants that wish to have
legal representation may select their own counsel at any point in the
claims process. With an appropriate Privacy Act waiver, which is
included in the Notice of Loss form, FEMA will ensure attorneys are
allowed to participate with claimants in any and all parts of the
Claims Process, up to and including arbitration of the claim if the
claimant elects to proceed to arbitration. As required by the Privacy
Act, 5 U.S.C. 552a, and implemented through Claims Office procedure,
claimants always have access to their entire claims files. Moreover,
FEMA is working to establish the System of Record, Claim and Loss
Information Portal (CLIP), that will have a public facing portal where
claimants can choose to create a secure account to review the status of
their claim and upload documentation related to their Proof of Loss.
    Comment: Another commenter suggested FEMA allow for in-person
conferences and hearings as often as possible.
    FEMA Response: Section 296.41(g) of the IFR states that hearings
will generally be conducted virtually, but also allows the Director of
the Claims Office to convene an in-person hearing at a location in New
Mexico designated by the Director. The IFR language allows for in-
person hearings and claimants can request in-person hearings if they
prefer. FEMA does not believe the IFR requires amendment to allow for
in-person hearings and is not revising the Final Rule.

P. Comments on Sec.  296.42 Arbitration

    Comment: Three commenters stated that expenses incurred for
arbitration should be covered as compensatory damages.
    FEMA Response: It is unclear what the specific arbitration expenses
are that are referenced in this comment. Generally, the Claims Office
will pay all the fees and expenses of the arbitrator(s), as well as any
associated fees and expenses for securing a location to hold the
arbitration. The claimant is responsible for any expenses they incur,
including travel costs. As explained in the IFR, compensatory damages
for time spent in claims preparation are not available under New Mexico
law or the Federal Tort Claims Act. Moreover, there is no evidence
Congress intended that claimants be compensated for the value of their
time in preparing a claim. Providing compensation for a claimant's time
would be difficult to administer, as FEMA would have to determine
equitably the value of a claimant's time and to verify that claimants
have expended the number of hours that are claimed. FEMA's payments
under the Act are subject to independent audit by the GAO and the DHS
OIG and claimants would likely find attempts by auditors to verify the
payment for hours spent in the claims process highly intrusive.
Additionally, the type of compensation requested by commenters here
would require production of receipts and other documentation, resulting
in an overly burdensome process for this payment to claimants contrary
to other comments requesting the agency streamline and simplify the
claims process. As explained in the IFR, FEMA is choosing to exercise
discretion to provide a lump sum payment to claimants for miscellaneous
and incidental expenses incurred in the claims process. FEMA will
provide a lump sum payment of five percent of the insured and uninsured
loss (excluding flood insurance premiums), not to exceed $25,000. The
minimum lump sum payment is $150. Section 296.31(b) of the IFR
represents a fair and reasonable accommodation between the agency's
responsibility to spend Federal funds wisely and the desire to
compensate claimants as fully as possible.
    To the extent the commenter is requesting that attorney's fees be
compensated by the Claims Office, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\58\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. Further, the ``American
Rule,'' generally applicable in civil litigation and initially accepted
by the United States Supreme Court in the case of Arcambel v.
Wiseman,\59\ provides that in the absence of a statute indicating
otherwise, each party is responsible for paying their own attorney
fees. FEMA designed the claims process so that claimants will receive
all eligible compensation without the need to engage the services of an
attorney, and the Claims Office hired Claims Navigators to assist
claimants compiling necessary documentation and with the Proof of Loss.
Although claimants have the right to hire an attorney, one is not
required.
---------------------------------------------------------------------------

    \58\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
    \59\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------

    Comment: A commenter requested FEMA allow for in-person conferences
and hearings as often as possible. Another commenter also suggested
that these hearings take place in person and in the county of loss as
virtual hearings are challenging because of limited or no broadband
service in many areas impacted by the Fire.
    FEMA Response: Section 296.42(d) of the IFR states that hearings
will generally be conducted virtually, but also allows the arbitrator
to convene an in-person hearing at a location in New Mexico designated
by the Arbitration Administrator. The IFR language allows for in-person
hearings and claimants can request in-person hearings if they prefer.
FEMA does not believe the IFR requires amendment to allow for in-person
hearings and is not revising the Final Rule.
    Comment: Comments were also received on the independence,
selection, and qualifications of arbitrators. One commenter requested
the list of qualified arbitrators be provided by an independent source
outside of FEMA. Commenters asked about the independence of arbitrators
hired by FEMA. One commenter stated ``I seriously question the
independence of an arbitrator who is both hired by and paid by FEMA . .
. The one time in the past when I had to go to binding arbitration, the
arbitrators were chosen from a board of independent arbitrators, not
someone who was hired by the plaintiff or the defendant I should say in
this case.'' Another commenter stated, ``I have never seen where the
arbitrators brought in and both sides don't get to eliminate based on
how that arbitrator rules his rulings.'' A different commenter
requested that arbitrators be from New Mexico as they needed to be
aware of the culture, the livelihood, the history, the importance of
the people in the impacted communities. Another

commenter suggested that the arbitrators should be people who know New
Mexico law.
    FEMA Response: FEMA understands the concerns raised by commenters
regarding the selection of arbitrators for the claims process. These
concerns are best addressed in policy and procedure documents
associated with the claims process and not the regulations. FEMA is
thus not making changes to the Final Rule regarding this issue.

Q. Comments on the Rulemaking

    Comment: One commenter wrote on the lack of public comments posted
with over half of the comment period completed and asked what FEMA was
doing to publicize how to comment on the rulemaking. The commenter also
asked questions about the availability of a local library for people to
use the internet for public comment submission and suggested local FEMA
offices accept verbal comments that could be posted online.
    FEMA Response: FEMA received over 190 written comments on this rule
in addition to over 100 comments during six public meetings held during
the comment period across the area impacted by the Fire. FEMA provided
public outreach to include News Releases, Media Advisories, and
targeted communications to Federal, State, and local officials and
their staff in New Mexico to help promote the process for submitting
comments to https://www.regulations.gov. As explained above,
transcripts of the public meetings were posted to the docket at https://www.regulations.gov to allow the public the opportunity to review
comments made during these meetings if unable to attend.
    Comment: A commenter asked how out-of-state property owners would
be notified of the Act and suggested FEMA obtain a list from the
assessor's office to mail those individuals information.
    FEMA Response: The IFR was published in the Federal Register at
https://www.federalregister.gov/documents/2022/11/14/2022-24728/hermits-peakcalf-canyon-fire-assistance and also via print publication
at 87 FR 68085 on November 14, 2022. The Federal Register is national
in scope and this notice in addition to the information provided at
https://www.fema.gov/hermits-peak constitute sufficient notice to out-
of-state property owners.
    Comment: One commenter requested that FEMA provide access to the
Federal Register to claimants.
    FEMA Response: FEMA provided access to the IFR by providing the
link to the Federal Register containing the IFR at https://www.fema.gov/hermits-peak. Additionally, as explained above, the IFR
was published in the Federal Register at https://www.federalregister.gov/documents/2022/11/14/2022-24728/hermits-peakcalf-canyon-fire-assistance and also via print publication at 87 FR
68085 on November 14, 2022.
    Comment: Two commenters sought virtual means of attending the
public meetings on the IFR.
    FEMA Response: FEMA was unable to provide video conferencing or
virtual attendance options during these meetings as they were not held
in FEMA facilities. FEMA provided an explanation of this challenge in
the Notice of Additional Public Meetings published on December 9, 2022.
Transcripts of all public meetings are available on the docket at
https://www.regulations.gov.
    Comment: A commenter stated that that they were unable to hear a
comment during a public meeting. Another commenter stated that the
transcripts from the public meetings had not been posted to the public
docket as of January 6, 2023 and suggested that all public meeting
transcripts be posted preferably 72 but not less than 48 hours before
the comment period closed.
    FEMA Response: Transcripts of all public meetings are available on
the docket at https://www.regulations.gov. FEMA understands the
commenters' concerns about the timing of posting these transcripts and
the agency worked diligently to have all of the transcripts posted
prior to the end of the public comment period. Two transcripts were
posted on January 9, 2023. Three transcripts were posted on January 12,
2023, and the remaining transcript from the last public meeting was
posted on January 13, 2023 in advance of the close of the public
comment period. Given the volume of public meetings made available and
the availability of the transcripts in advance of the close of the
comment period provided sufficient opportunity for the public to either
attend and/or review the meeting transcripts in advance of submitting
any comments on the rule. FEMA notes that over 100 comments were
received during the six public meetings held and over 50 comments were
received on the last day of the comment period.
    Comment: Another commenter stated that FEMA may be having too many
meetings as the meetings were taking a toll on the community and
another commenter at that meeting also agreed, stating the meetings
just felt like lip service and asked for progress on the Final Rule and
changes to issues raised during meetings such as reforestation.
    FEMA Response: FEMA has worked diligently to the review and
adjudicate all of the comments received on the IFR. FEMA is publishing
this Final Rule in less than 8 months after the public comment period
closed. This timeframe demonstrates the agency's commitment to
expeditiously process claims under the Act and resolve outstanding
concerns of the community regarding the Act's implementation by FEMA.
    Comment: One commenter suggested FEMA post responses to comments
while a commenter at a public meeting suggested that FEMA publish a
table that lists the comments and FEMA's responses.
    FEMA Response: FEMA is providing responses to comments received as
a result of the rulemaking process in this Final Rule.
    Comment: One commenter suggested that when fee or reimbursement
schedules were developed, to allow for notice and comment and another
commenter at a public meeting agreed.
    FEMA Response: FEMA appreciates this suggestion and if FEMA decides
to proceed with payment formulas as discussed above, FEMA will consider
whether notice and comment would be appropriate for such formulas at
that time.
    Comment: One commenter requested the opportunity to comment on the
Final Rule.
    FEMA Response: The rulemaking process as set forth in the
Administrative Procedure Act does not require an agency to accept
comment on a Final Rule.\60\ Further information on the rulemaking
process can be found at https://www.federalregister.gov/uploads/2011/01/the_rulemaking_process.pdf.\61\
---------------------------------------------------------------------------

    \60\ 5 U.S.C. 553.
    \61\ Last accessed Mar. 1, 2023.
---------------------------------------------------------------------------

R. Other General Comments

1. Comments on the Fire Footprint and Loss
    Commenters sought clarification and offered suggestions regarding
claimants' eligibility outside of the Fire's immediate footprint.
    Comment: One commenter indicated that people and businesses outside
the Fire's direct footprint were impacted and should be compensated.
This commenter wrote that many people and businesses outside of the
Fires' direct footprint were impacted due to things like the forest
closures during fire response as well as the months following. A
different commenter suggested relief be provided to New Mexico
residents that do not live in the

direct area of the fire as their business experienced a significant
loss due to the Fire and damage to property in the impacted area. A
commenter asked whether there was a geographic boundary for who is
eligible to file a claim, explaining how the Fire impacted several
counties with evacuations. Another commenter stated that the flooding
impacted communities downstream from San Miguel and Mora counties and
that there were several businesses impacted as well in those areas.
However, another commenter requested claims be limited to residents of
a specific geographic area. The commenter requested that FEMA limit
claims to only residents and property owners in Mora and San Miguel
Counties and bordering areas of neighboring counties stating that the
funding that had been allocated to these victims was far from
sufficient to cover the immediate, obvious loss that the people
experienced with the Fire.
    FEMA Response: The Act recognizes that injured persons can seek
compensation for actual compensatory damages for injuries incurred as a
result of the Fire. There are no geographic limitations on this
compensation beyond the claimant demonstrating they were injured as a
result of the Fire. While the disaster declarations were limited to
specific counties and further narrowed by the FEMA program,\62\ the Act
has no such limitations. FEMA thus anticipates receiving and processing
claims for any claimant suffering injury as a result of the Fire and
seeking actual compensatory damages.
---------------------------------------------------------------------------

    \62\ See DR-4652-NM found at https://www.fema.gov/disaster/4652
(last accessed Mar. 1, 2023).
---------------------------------------------------------------------------

2. Other General Comments
    Comment: A commenter expressed concern that FEMA was not seeking
input from local leadership knowledgeable in the local culture and
business and regulatory processes while a commenter at a public meeting
requested accountability to local groups who are responsible for long-
range recovery planning.
    FEMA Response: Consistent with the Act's requirements in section
104(g), FEMA is in consultation with other Federal agencies, and State,
local, and Tribal authorities to ensure the efficient administration of
the claims process and provide for local concerns.
    Comment: One commenter suggested FEMA involve the United States
Attorney for the District of New Mexico or the New Mexico State
Attorney General to ensure the regulations follow New Mexico law.
    FEMA Response: As explained above, section 104(g) of the Act
requires FEMA to consult with other Federal agencies, and State, local,
and Tribal authorities to ensure the efficient administration of the
claims process. FEMA has consulted and continues to consult with
Federal, State, local, and Tribal authorities consistent with the Act's
requirements. FEMA consulted with a range of relevant Federal, State,
and local agencies and governments. FEMA also completed a Tribal
consultation as part of the regulatory process.
    Comment: One commenter suggested that FEMA review the minutes of
the meeting held by Representative Fernandez' in Mora after the Act's
passage to understand the intent of the Act.
    FEMA Response: FEMA appreciates the commenter's input on
Representative Fernandez' public meeting. FEMA has met with the New
Mexico Congressional Delegation regarding the Act's implementation and
received a comment on the IFR from the Delegation. FEMA has adjudicated
that comment in this Final Rule and continues to engage with
Congressional Representatives regarding the implementation of the Act.
    Comment: One commenter suggested FEMA provide education and
awareness to county residents on preparedness for future manmade and
natural disasters.
    FEMA Response: While this suggestion is outside the scope of the
Act, the suggestion does fall within FEMA's overall mission. The agency
is coordinating with the State on the integration of long-term recovery
efforts and resilience resources under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (``Stafford Act'') and other
applicable statutory authorities.\63\
---------------------------------------------------------------------------

    \63\ 42 U.S.C. 5121 et seq.
---------------------------------------------------------------------------

    Comment: One commenter asked FEMA to do outreach to the community
and assist people, as the experience with seeking benefits from FEMA
during the disaster had been one of being turned away.
    FEMA Response: Unlike the FEMA programs operated under the Stafford
Act, the Hermit's Peak/Calf Canyon Fire Assistance Act offers a
distinct claims process for claimants to seek actual compensatory
damages for injuries suffered as a result of the Fire. The Act's
provisions do not have the same eligibility requirements associated
with the Public Assistance and Individual Assistance Programs under the
Stafford Act. Claimants that were denied assistance under those
programs should not assume their claim will be rejected under the Act.
The regulation provides the general framework for compensation under
the Act and claimants that have been injured as a result of the Fire
should pursue claims for compensatory damages under the Act even if
they were denied assistance under the Stafford Act programs.
    FEMA is currently accepting Notice of Loss forms in person at the
Claims Office locations in Santa Fe, Mora, and Las Vegas, New Mexico
and those office addresses can be found at https://www.fema.gov/hermits-peak. FEMA will provide services both at set office locations
for the Claims Offices, as well as pop-up offices that will rotate
through communities and locations in the affected area, to reduce
travel burdens on claimants. The pop-up offices will be staffed by
Claims Navigators, who can assist claimants in completing and
submitting Notices of Loss, providing claims updates, and answering
general questions. FEMA plans to offer opportunities for one-on-one
engagement with Navigators and Claims Reviewers who will work to engage
claimants in ways to meet their needs whether in person or via remote
technology. Claims Office Navigators are trained to accommodate the
needs of claimants. FEMA recognizes the importance of having claims
staff, who interact with claimants and help facilitate the claims
process, that are able to speak both Spanish and English. FEMA locally
hired bilingual speakers to ensure that claims staff can communicate
with claimants in their preferred language.
    Comment: Another commenter asked that FEMA listen to the community
on what they value, as it is different from how FEMA appeared to be
valuing buildings, the land, the trees, or the water.
    FEMA Response: FEMA heard the comments regarding the need to
reassess the formulas placed in the IFR and is making changes in the
Final Rule to address those concerns. The Final Rule's changes better
reflect the impacted communities' needs and values while maintaining
consistency with the Act's authorities.
    Comment: A commenter stated ``Every time there is a flood, every
time there is a massive weather event, FEMA is to come out now. So,
they are understaffed, but here there is a big difference because the
appropriations that our legislators have fought to get something in
place. So, if you got something, you got something to work with, and I
am saying that like our flood was in 2017, and I still haven't
recovered . . . So, your comments, and you're coming to these meetings
are

demonstrations that you care about yourselves, you know they are not
going to chase you off.''
    FEMA Response: FEMA agrees with the commenter that the Act's
provisions are different from Stafford Act programs and that claimants
should engage with FEMA on their claims. As the commenter stated, FEMA
received appropriations for the Act and is required to staff the Claims
Office to meet the needs of the community to process their claims in an
expeditious manner.
    Comment: One commenter stated that the communities needed to
leverage the Act's funding in conjunction with the overall rollout of
infrastructure funding to protect food security and food systems.
    FEMA Response: FEMA recognizes that other funding may be available
to further support the long-term recovery of the impacted communities
beyond the funding appropriated by the Act. FEMA appreciates the
commenter's suggestion that the impacted communities also consider that
funding and how all available funding can work to improve the
community. FEMA has consulted and continues to consult with Federal,
State, local, and Tribal authorities consistent with the Act's
requirements.
    Comment: One commenter stated that they were concerned that money
from the Act would go to contractors that are coming in from the
outside area.
    FEMA Response: FEMA understands the need for local hiring for the
Claims Office and FEMA has engaged in an extensive effort to recruit
locally for positions to support the processing of claims and provision
of compensation to claimants impacted by the Fire to ensure these
specific concerns are addressed. FEMA is not responsible for hiring
contractors to handle local projects under the Act. FEMA recognizes
that other Federal programs, including FEMA Stafford Act programs, may
leverage contract support for local projects. The process associated
with those contracts varies by program. General information on
contracting for FEMA programs can be found at https://www.fema.gov/grants/procurement.\64\
---------------------------------------------------------------------------

    \64\ Last accessed Mar. 1, 2023.
---------------------------------------------------------------------------

    Comment: Another commenter provided a suggestion on how to spend
the funding allocated under the Act by requiring it to cycle through
the community several times before it leaves the impacted communities.
    FEMA Response: FEMA is authorized under the Act to pay claimants
for actual compensatory damages for injuries resulting from the
Fire.\65\ FEMA does not have the authority under the Act to require
claimants to spend the compensation awarded in the local community.
---------------------------------------------------------------------------

    \65\ See Sections 102(b) and 104(c) of the Act.
---------------------------------------------------------------------------

    Comment: Another commenter recommended FEMA hire local contractors
for FEMA projects. The commenter stated ``The other piece is the issue
with contracts. So, we have a lot of local contractors working here. We
have local contractors working. We have the majority of them not
working and that is another FEMA issue. Massive contracts went out, the
Mora people, or Mora contractors are being subcontracted; they are not
even given the opportunity--that is wages lost. If you are working for
a contractor as a subcontractor, you've lost wages. You've lost
revenue, and that's another part that FEMA's failed to do and failed to
represent the people.''
    FEMA Response: As explained above, FEMA is not responsible for
hiring contractors to handle local projects under the Act. FEMA
recognizes that other Federal programs, including FEMA Stafford Act
programs, may leverage contract support for local projects. The process
associated with those contracts varies by program. General information
on contracting for FEMA programs can be found at https://www.fema.gov/grants/procurement.\66\ The Claims Office encourages its contractors to
hire locally.
---------------------------------------------------------------------------

    \66\ Last accessed Mar. 1, 2023.
---------------------------------------------------------------------------

    Comment: A commenter stated the Claims Office was responsible for
clarifying and ensuring that claimants are not taxed for the claims
payments they receive through the program.
    FEMA Response: FEMA appreciates claimants' concerns with taxes.
Section 104(h)(f) of the Act states that ``the value of compensation
that may be provided under this Act shall not be considered income or
resources for any purpose under any Federal, State, or local laws,
including laws related to taxation, welfare, and public assistance
programs . . .'' FEMA is providing this information to claimants as
part of the payment process. FEMA is not responsible for taxation and
encourages claimants to obtain specific assistance if a Federal, State,
or local entity seeks to consider compensation under the Act as taxable
income or income for welfare or public assistance purposes. The agency
does not believe changes to the IFR regulatory text are needed in the
Final Rule to effect the commenter's request.

S. Change Chart

    The below table summarizes the changes FEMA has made in this final
rule. The economic impacts of these changes are discussed further in
Section IV.B, ``Executive Order 12866, Regulatory Planning and Review
and Executive Order 13563, Improving Regulation and Regulatory
Review.''

----------------------------------------------------------------------------------------------------------------
         44 CFR                 IFR text           Final rule text      Reason for change      Economic impact
----------------------------------------------------------------------------------------------------------------
296.1...................  This part implements  This part implements  Consistency with      None.
                           the Hermit's Peak/    the Hermit's Peak/    authorizing
                           Calf Canyon Fire      Calf Canyon Fire      statute's language
                           Assistance Act        Assistance Act        and clarity that
                           (Act), Division G     (Act), Division G     injuries resulting
                           of Public Law 117-    of Public Law 117-    from the Fire are
                           180, 136 Stat.        180, 136 Stat.        compensable.
                           2114, 2168, which     2114, 2168, which
                           requires the          requires the
                           Federal Emergency     Federal Emergency
                           Management Agency     Management Agency
                           (FEMA) to establish   (FEMA) to establish
                           the Office of         the Office of
                           Hermit's Peak/Calf    Hermit's Peak/Calf
                           Canyon Fire Claims    Canyon Fire Claims
                           (``Claims Office'')   (``Claims Office'')
                           to receive,           to receive,
                           evaluate, process,    evaluate, process,
                           and pay actual        and pay actual
                           compensatory          compensatory
                           damages for           damages for
                           injuries suffered     injuries resulting
                           from the Hermit's     from the Hermit's
                           Peak/Calf Canyon      Peak/Calf Canyon
                           Fire.                 Fire.

296.4...................  Subsistence           Subsistence           Consistency with the  Higher claims values
                           Resources means       Resources means       distinctions          for those claiming
                           food and other        food and other        between the           assistance for
                           items obtained        items obtained        communities           ``other natural
                           through hunting,      through hunting,      impacted by the       resource''
                           fishing, firewood     fishing, firewood     Cerro Grande and      gathering.
                           gathering,            or other natural      Hermit's Peak/Calf   Potential increase
                           timbering, grazing    resource gathering,   Canyon Fires and      in transfer
                           or agricultural       timbering, grazing    need to accommodate   payments from FEMA
                           activities            or agricultural       geographic,           to claimants.
                           undertaken by the     activities            economic, and
                           claimant without      undertaken by the     cultural
                           financial             claimant without      distinctions into
                           remuneration, on      financial             the Hermit's Peak/
                           land damaged by the   remuneration, on      Calf Canyon Fire
                           Hermit's Peak/Calf    land damaged by the   Assistance process.
                           Canyon Fire.          Hermit's Peak/Calf
                                                 Canyon Fire.
296.12(a)...............  An Injured Person     An Injured Person     Clarity that          None.
                           who accepts an        who accepts a final   claimants only
                           award under the Act   award under the Act   waive their rights
                           waives the right to   waives the right to   upon acceptance of
                           pursue all claims     pursue all claims     a final award.
                           for injuries          for injuries
                           arising out of or     arising out of or
                           relating to the       relating to the
                           same subject matter   same subject matter
                           against the United    against the United
                           States or any         States or any
                           employee, officer,    employee, officer,
                           or agency of the      or agency of the
                           United States         United States
                           through the Federal   through the Federal
                           Tort Claims Act or    Tort Claims Act or
                           a civil action        a civil action
                           authorized by any     authorized by any
                           other provision of    other provision of
                           law.                  law.
296.12(b)...............  An Injured Person     An Injured Person     Clarity that          None.
                           who accepts an        who accepts a final   claimants only
                           award through a       award through a       waive their rights
                           Federal Tort Claims   Federal Tort Claims   upon acceptance of
                           Act claim or a        Act claim or a        a final award.
                           civil action          civil action
                           against the United    against the United
                           States or any         States or any
                           employee, officer,    employee, officer,
                           or agency of the      or agency of the
                           United States         United States
                           relating to the       relating to the
                           Hermit's Peak/Calf    Hermit's Peak/Calf
                           Canyon Fire waives    Canyon Fire waives
                           the right to pursue   the right to pursue
                           any claim arising     any claim arising
                           out of or relating    out of or relating
                           to the same subject   to the same subject
                           matter under the      matter under the
                           Act.                  Act.
296.13..................  An insurer or other   An insurer or other   Consistency with      None.
                           third party with      third party with      authorizing
                           the rights of a       the rights of a       statute's language.
                           subrogee, who has     subrogee, who has
                           compensated an        compensated an
                           injured person for    injured person for
                           Hermit's Peak/Calf    Hermit's Peak/Calf
                           Canyon Fire related   Canyon Fire related
                           injuries, may file    injuries, may file
                           a Notice of Loss      a Notice of Loss
                           under the Act for     under the Act for
                           the subrogated        the subrogated
                           claim. A subrogee     claim. A subrogee
                           may file a Notice     may file a Notice
                           of Loss without       of Loss without
                           regard to whether     regard to whether
                           the Injured Person    the Injured Person
                           who received          who received
                           payment from the      payment from the
                           subrogee filed a      subrogee filed a
                           Notice of Loss. A     Notice of Loss. A
                           Subrogation Notice    Subrogation Notice
                           of Loss should be     of Loss should be
                           filed after the       filed after the
                           subrogee has made     subrogee has made
                           all payments that     all payments that
                           it believes the       it believes the
                           Injured Person is     Injured Person is
                           entitled to receive   entitled to receive
                           for Hermit's Peak/    for Hermit's Peak/
                           Calf Canyon Fire      Calf Canyon Fire
                           related injuries      related injuries
                           under the terms of    under the terms of
                           the insurance         the insurance
                           policy or other       policy or other
                           agreement between     agreement between
                           the subrogee and      the subrogee and
                           the Injured Person,   the Injured Person,
                           but not later than    but not later than
                           November 14, 2024.    November 14, 2024.
                           By filing a Notice    By filing a Notice
                           of Loss for any       of Loss for any
                           subrogated claim,     subrogated claim,
                           the subrogee elects   the subrogee elects
                           the Act as its        the Act as its
                           exclusive remedy      exclusive remedy
                           against the United    against the United
                           States or any         States or any
                           employee, officer,    employee, officer,
                           or agency of the      or agency of the
                           United States for     United States for
                           all subrogated        all subrogated
                           claims arising out    claims arising out
                           of the Hermit's       of the Hermit's
                           Peak/Calf Canyon      Peak/Calf Canyon
                           Fire. Subrogation     Fire. Subrogation
                           claims must be made   claims must be made
                           on a Notice of Loss   on a Notice of Loss
                           form furnished by     form furnished by
                           the Claims Office.    the Claims Office
                                                 and such claims
                                                 will be paid only
                                                 after paying claims
                                                 submitted by
                                                 injured persons
                                                 that are not
                                                 insurance companies
                                                 seeking payment as
                                                 subrogees.
296.21(a)...............  (a) Allowable         (a) Allowable         Technical edit......  None.
                           damages. The Act      damages. The Act
                           provides for the      provides for the
                           payment of actual     payment of actual
                           compensatory          compensatory
                           damages for Injury    damages for injury
                           or loss of            or loss of
                           property, business    property, business
                           loss, and financial   loss, and financial
                           loss. The laws of     loss. The laws of
                           the State of New      the State of New
                           Mexico will apply     Mexico will apply
                           to the calculation    to the calculation
                           of damages. Damages   of damages. Damages
                           must be reasonable    must be reasonable
                           in amount.            in amount.

296.21(c)(2)............  Reforestation and     Reforestation and     Consistency with the  Removes the formula
                           revegetation.         revegetation.         distinctions          for compensation
                           Compensation for      Compensatory          between the           for destroyed trees
                           the replacement of    damages may be        communities           and other
                           destroyed trees and   awarded for the       impacted by the       landscaping.
                           other landscaping     cost of destroyed     Cerro Grande and     This would
                           will not exceed 25    trees and other       Hermit's Peak/Calf    potentially lead to
                           percent of the pre-   landscaping.          Canyon Fires and      an increase in the
                           fire value of the                           need to accommodate   value of awarded
                           structure and lot.                          geographic,           claims. Claimants
                                                                       economic, and         would benefit by
                                                                       cultural              receiving
                                                                       distinctions into     additional
                                                                       the Hermit's Peak/    assistance and be
                                                                       Calf Canyon Fire      able to recover
                                                                       Assistance process.   more fully.
                                                                                This would not
                                                                                affect the maximum
                                                                                total impact of the
                                                                                rule of $3.95B, but
                                                                                transfer payments
                                                                                from FEMA to these
                                                                                claimants would
                                                                                potentially
                                                                                increase.
                                                                                FEMA may also bear
                                                                                an additional
                                                                                administrative cost
                                                                                to process the
                                                                                additional claims.
296.21(c)(3)(ii)........  The claimant can      The claimant can      Consistency with the  None.
                           establish that the    establish that the    distinctions
                           value of the real     value of the real     between the
                           property was          property was          communities
                           permanently           significantly         impacted by the
                           diminished as a       diminished long-      Cerro Grande and
                           result of the         term as a result of   Hermit's Peak/Calf
                           Hermit's Peak/Calf    the Hermit's Peak/    Canyon Fires and
                           Canyon Fire.          Calf Canyon Fire.     need to accommodate
                                                                       geographic,
                                                                       economic, and
                                                                       cultural
                                                                       distinctions into
                                                                       the Hermit's Peak/
                                                                       Calf Canyon Fire
                                                                       Assistance process.
296.21(c)(5)............  N/A.................  Physical              Consistency with      None.
                                                 Infrastructure.       authorizing
                                                 Compensatory          statute's language
                                                 damages may be        and with the
                                                 awarded for the       distinctions
                                                 damage to physical    between the
                                                 infrastructure,       communities
                                                 including damages     impacted by the
                                                 to irrigation         Cerro Grande and
                                                 infrastructure such   Hermit's Peak/Calf
                                                 as acequia systems.   Canyon Fires and
                                                                       need to accommodate
                                                                       geographic,
                                                                       economic, and
                                                                       cultural
                                                                       distinctions into
                                                                       the Hermit's Peak/
                                                                       Calf Canyon Fire
                                                                       Assistance process.
296.21(e)(3)............  Out of pocket         Out of pocket         Reflects public       Removes time limit
                           expenses for          expenses for          comment feedback on   on reimbursements
                           treatment of mental   treatment of mental   to allow for claims   for treatment.
                           health conditions.    health conditions.    to be filed under    Additional claims
                           FEMA may reimburse    FEMA may reimburse    deadline for all      will potentially be
                           an individual         an individual         other claims and      filed after April
                           claimant for          claimant for          revised for clarity   6, 2024, leading to
                           reasonable out of     reasonable out of     on the types of       more claims and
                           pocket expenses       pocket expenses       mental health         claims payments.
                           incurred for          incurred for          conditions covered.  This would
                           treatment of a        treatment of a                              potentially lead to
                           mental health         mental health                               an increase in the
                           condition rendered    condition rendered                          value of awarded
                           by a licensed         by a licensed                               claims. Claimants
                           mental health         mental health                               would benefit by
                           professional, which   professional, which                         receiving
                           condition resulted    condition resulted                          additional
                           from the Hermit's     from or was                                 assistance and be
                           Peak/Calf Canyon      worsened by the                             able to recover
                           Fire. FEMA will not   Hermit's Peak/Calf                          more fully.
                           reimburse for         Canyon Fire.                               This would not
                           treatment rendered                                                affect the maximum
                           after April 6, 2024.                                              total impact of the
                                                                                rule of $3.95B, but
                                                                                transfer payments
                                                                                from FEMA to these
                                                                                claimants would
                                                                                potentially
                                                                                increase.
                                                                                FEMA may also bear
                                                                                an additional
                                                                                administrative cost
                                                                                to process the
                                                                                additional claims.
296.21(e)(4)............  Donations. FEMA will  Donations. FEMA will  Reflects public       Extends the deadline
                           compensate            compensate            comment feedback on   by approximately 8
                           claimants for the     claimants for the     appropriate           weeks for
                           cost of               cost of               timeline.             compensation for
                           merchandise, use of   merchandise, use of                         donations to
                           equipment or other    equipment or other                          survivors of the
                           non-personal          non-personal                                fire.
                           services, directly    services, directly                         Additional claims
                           or indirectly         or indirectly                               for reimbursement
                           donated to            donated to                                  were potentially be
                           survivors of the      survivors of the                            filed between
                           Hermit's Peak/Calf    Hermit's Peak/Calf                          September 21 and
                           Canyon Fire not       Canyon Fire not                             November 14, 2022,
                           later than            later than November                         leading to more
                           September 20, 2022.   14, 2022. Donations                         claims and claims
                           Donations will be     will be valued at                           payments.
                           valued at cost.       cost.                                      This would
                                                                                potentially lead to
                                                                                an increase in the
                                                                                number of awarded
                                                                                claims. More
                                                                                claimants would
                                                                                benefit by
                                                                                receiving
                                                                                assistance and be
                                                                                able to recover
                                                                                more fully.
                                                                                This would not
                                                                                affect the maximum
                                                                                total impact of the
                                                                                rule of $3.95B, but
                                                                                transfer payments
                                                                                from FEMA to
                                                                                claimants would
                                                                                increase.
                                                                                FEMA may also bear
                                                                                an additional
                                                                                administrative cost
                                                                                to process the
                                                                                additional claims.

296.21(e)(5)............  Heightened Risk       Heightened Risk       Consistency with the  Removes the formula
                           Reduction. FEMA       Reduction. FEMA       distinctions          for compensation
                           will reimburse        will reimburse        between the           for measures taken
                           claimants for the     claimants for the     communities           to reduce risk from
                           costs incurred to     costs incurred to     impacted by the       natural hazards
                           implement             implement             Cerro Grande and      heightened by the
                           reasonable measures   reasonable measures   Hermit's Peak/Calf    Fire.
                           necessary to reduce   necessary to reduce   Canyon Fires and     This would
                           risks from natural    risks from natural    need to accommodate   potentially lead to
                           hazards heightened    hazards heightened    geographic,           an increase in the
                           by the Hermit's       by the Hermit's       economic, and         value of awarded
                           Peak/Calf Canyon      Peak/Calf Canyon      cultural              claims. Claimants
                           Fire to the level     Fire to the level     distinctions into     would benefit by
                           of risk prevailing    of risk prevailing    the Hermit's Peak/    receiving
                           before the Hermit's   before the Hermit's   Calf Canyon Fire      additional
                           Peak/Calf Canyon      Peak/Calf Canyon      Assistance process.   assistance and be
                           Fire. Such measures   Fire. Such measures                         able to recover
                           may include, for      may include, for                            more fully.
                           example, risk         example, risk                              This would not
                           reduction projects    reduction projects                          affect the maximum
                           that reduce an        that reduce an                              total impact of the
                           increased risk from   increased risk from                         rule of $3.95B, but
                           flooding,             flooding,                                   transfer payments
                           mudslides, and        mudslides, and                              from FEMA to these
                           landslides in and     landslides in and                           claimants would
                           around burn scars.    around burn scars.                          potentially
                           Compensation under    Claimants seeking                           increase.
                           this section may      compensation for                           FEMA may also bear
                           not exceed 25         heightened risk                             an additional
                           percent of the        reduction must                              administrative cost
                           higher of payments    include the claim                           to process the
                           from all sources      in their Notice of                          claims.
                           (i.e., the Act,       Loss by November
                           insurance proceeds,   14, 2024 or an
                           FEMA assistance       amended Notice of
                           under the Stafford    Loss filed no later
                           Act) for damage to    than November 14,
                           the structure and     2025. Claimants
                           lot, or the pre-      should take into
                           fire value of the     account current
                           structure and lot.    building codes and
                           Claimants seeking     standards and must
                           compensation for      complete the risk
                           heightened risk       reduction project
                           reduction must        for which they
                           include the claim     receive
                           in their Notice of    compensation.
                           Loss by November
                           14, 2024 or an
                           amended Notice of
                           Loss filed no later
                           than November 14,
                           2025. Claimants
                           should take into
                           account current
                           building codes and
                           standards and must
                           complete the risk
                           reduction project
                           for which they
                           receive
                           compensation.
296.21(f)...............  Insurance and other   Insurance and other   Technical edit......  None.
                           benefits. The Act     benefits. The Act
                           allows FEMA to        allows FEMA to
                           compensate Injured    compensate Injured
                           Persons only for      Persons only for
                           damages not paid,     damages not paid,
                           or will not be        and that will not
                           paid, by insurance    be paid, by
                           or other third-       insurance or other
                           party payments or     third-party
                           settlements.          payments or
                                                 settlements.
296.31(a)...............  FEMA will reimburse   FEMA will reimburse   Consistency with the  None.
                           claimants for the     claimants for the     distinctions
                           reasonable costs      reasonable costs      between the
                           they incur in         they incur in         communities
                           providing             providing             impacted by the
                           documentation         documentation         Cerro Grande and
                           requested by the      requested by the      Hermit's Peak/Calf
                           Claims Office. FEMA   Claims Office. FEMA   Canyon Fires and
                           will also reimburse   will also reimburse   need to accommodate
                           claimants for the     claimants for the     geographic,
                           reasonable costs      reasonable costs      economic, and
                           they incur in         they incur in         cultural
                           providing             providing             distinctions into
                           appraisals, or        appraisals, or        the Hermit's Peak/
                           other third-party     other third-party     Calf Canyon Fire
                           opinions, requested   opinions, that the    Assistance process.
                           by the Claims         Claims Office deems
                           Office. FEMA will     necessary to
                           not reimburse         determine the
                           claimants for the     amount of the
                           cost of appraisals    claim. FEMA will
                           or other third-       not reimburse
                           party opinions not    claimants for the
                           requested by the      cost of appraisals
                           Claims Office.        or other third-
                                                 party opinions not
                                                 requested by the
                                                 Claims Office.

296.35..................  The Director of the   The Director of the   Consistency with the  A claimant may file
                           Claims Office may     Claims Office may     distinctions          a claim for
                           reopen a claim if     reopen a claim if     between the           depreciation after
                           requested to do so    requested to do so    communities           the sale of any
                           by the claimant,      by the claimant,      impacted by the       real property, not
                           notwithstanding the   notwithstanding the   Cerro Grande and      only a home.
                           submission of the     submission of the     Hermit's Peak/Calf   The deadline to
                           Release and           Release and           Canyon Fires and      request to reopen a
                           Certification Form,   Certification Form,   need to accommodate   claim under limited
                           for the limited       for the limited       geographic,           circumstances is
                           purpose of            purpose of            economic, and         extended by
                           considering issues    considering issues    cultural              publication in the
                           raised by the         raised by the         distinctions into     Federal Register.
                           request to reopen     request to reopen     the Hermit's Peak/   Both of these
                           if, not later than    if, not later than    Calf Canyon Fire      changes would
                           November 14, 2025,    November 14, 2025,    Assistance process    potentially lead to
                           the claimant          the claimant          while also            an increase in
                           desires heightened    desires heightened    incorporating a       claims and more
                           risk reduction        risk reduction        past practice from    claims being
                           compensation in       compensation in       Cerro Grande to       awarded. Claimants
                           accordance with       accordance with       extend the deadline   would benefit by
                           Sec.                  Sec.                  by Federal Register   receiving
                           296.21(e)(5); the     296.21(e)(5); the     publication for       additional
                           claimant closed the   claimant closed the   certain losses.       assistance and be
                           sale of a home and    sale of real                                able to recover
                           wishes to present a   property and wishes                         more fully.
                           claim for decrease    to present a claim                         This would not
                           in the value of the   for decrease in the                         affect the maximum
                           real property under   value of the real                           total impact of the
                           Sec.                  property under Sec.                         rule of $3.95B, but
                           296.21(c)(3); the       296.21(c)(3).                             transfer payments
                           claimant has          Claimants may                               from FEMA to these
                           incurred additional   request to reopen                           claimants would
                           losses under Sec.     claims where the                            potentially
                           296.21(c)(1) as       claimant has                                increase.
                           part of a             incurred additional                        FEMA may also bear
                           reconstruction in     losses under Sec.                           an additional
                           excess of those       296.21(c)(1) as                             administrative cost
                           previously awarded;   part of a                                   to process the
                           or the Director of    reconstruction in                           claims.
                           the Claims Office     excess of those
                           otherwise             previously awarded
                           determines that       or the Director of
                           claimant has          the Claims Office
                           demonstrated good     otherwise
                           cause.                determines that
                                                 claimant has
                                                 demonstrated good
                                                 cause no later than
                                                 the deadline
                                                 established by the
                                                 Director of the
                                                 Claims Office as
                                                 published in the
                                                 Federal Register
                                                 and at https://www.fema.gov/hermits-peak.
----------------------------------------------------------------------------------------------------------------

IV. Regulatory Analysis

A. Administrative Procedure Act (APA)

    The IFR that this Final Rule makes final, with the changes detailed
above in response to public comment is already in effect. FEMA issued
the IFR pursuant to statutory authority under the Act. Specifically,
section 104(f)(1) requires FEMA to publish ``interim final regulations
for the processing and payment of claims under this Act.'' Further, the
IFR had to be published ``not later than 45 days after the date of
enactment.'' Given Congress' specific authority to issue an IFR, the
agency had good cause to proceed without advance notice and comment as
would have otherwise been required under the APA. See 5 U.S.C.
553(b)(B); Hermit's Peak/Calf Canyon Fire Assistance, 87 FR 68085,
68095 (Nov. 14, 2022) (``Consistent with Congress' direction in section
104(f)(1) of the Act that FEMA publish `interim final regulations for
the processing and payment of claims under [the] Act,' good cause
exists pursuant to 5 U.S.C. 553 (b)(B) as it would be impracticable and
contrary to the public interest to require notice and comment
rulemaking in this instance.'').
    FEMA finds there is good cause, under 5 U.S.C. 553(d)(3), not to
require a 30-day delayed effective date for this rulemaking because
delaying implementation of this Final Rule by 30 days is contrary to
the goal of the statutory purpose found at section 102(b)(2) of the Act
to provide for the expeditious consideration and settlement of claims
for injuries resulting from the Fire. The Act required FEMA to
promulgate and publish an IFR within 45 days after the Act's enactment,
and delay in the effective date of a Final Rule with changes to that
IFR would further negatively impact claimants seeking compensation
through the Act. The updates made in this Final Rule will address
concerns raised by commenters on the application of the Cerro Grande
Fire Assistance processes for the Hermit's Peak/Calf Canyon Fire
Assistance process and ensures the process better reflects the needs of
injured persons and impacted communities from the Hermit's Peak/Calf
Canyon Fire given the geographic, economic, and cultural distinctions
between the Cerro Grande and Hermit's Peak/Calf Canyon Fires. This
Final Rule will provide additional clarity to claimants seeking to
utilize the Hermit's Peak/Calf Canyon claims process and receive
compensation for actual compensatory damages suffered as a result of
the Fire. Given the Congressional mandate to expeditiously consider and
settle these claims, this Final Rule must be effective upon
publication.
    The Fire constitutes the largest wildfire in New Mexico
history.\67\ Over 340,000 acres of forest burned during the Fire and
over half of the land impacted by the Fire consisted of privately-owned
land, with just under 200,000 total acres burned.\68\ At least 160
homes and a total of over 900 structures were destroyed during the
Fire.\69\ Despite containment, the impact of the Fire continues to be
felt in the impacted areas, causing flooding and setting off a drinking
water crisis.\70\ The higher burn severity of soil on private lands
increases the likelihood of flooding and mudslide impacts on those
areas. Residents in the areas of the Fire have already suffered
significant damage from flooding, including washed out roads and
buildings, drowned pastures, and burned debris

moved downstream.\71\ In addition, as noted above, Congress explicitly
mandated in section 104(f)(1) of the Act that FEMA promulgate these
regulations expeditiously as interim final regulations, a factor that
supports a finding of ``good cause'' to also issue this Final Rule
without an effective date delay. Pursuant to section 104(f)(1) of the
Act, consistent with 5 U.S.C. 553(d)(3), and for the reasons stated
above, FEMA therefore will make this Final Rule effective immediately
upon publication.
---------------------------------------------------------------------------

    \67\ See Bryan Pietsch and Jason Samenow, ``New Mexico blaze is
now largest wildfire in state history,'' The Washington Post, May
17, 2022 found at https://www.washingtonpost.come/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/ (last accessed July 27,
2023).
    \68\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
    \69\ Id.
    \70\ See Jordan Honeycutt, ``Rain brings flash flooding to
Hermits Peak Calf Canyon burn scar,'' KRQE, July 13, 2022 found at
https://www.krqe.com/news/new-mexico/rain-brings-flash-flooding-to-hermits-peak-calf-canyon-burn-scar/ (last accessed July 27, 2023),
and Simon Romero, ``How New Mexico's Largest Wildfire Set Off a
Drinking Water Crisis,'' The New York Times, Sept. 26, 2022 found at
https://www.nytimes.com/2022/09/26/us/new-mexico-las-vegas-fire-water.html (last accessed Sept. 27, 2022).
    \71\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
---------------------------------------------------------------------------

B. Executive Order 12866, Regulatory Planning and Review, as Amended,
and Executive Order 13563, Improving Regulation and Regulatory Review

    Executive Order 12866 (Regulatory Planning and Review), as amended
by Executive Order 14094 (Modernizing Regulatory Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review), directs
agencies to assess the costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts,
and equity). Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. The Office of Management and
Budget (OMB) has designated this rule a ``significant regulatory
action'' as defined under section 3(f)(1) of Executive Order 12866, as
amended by E.O. 14094. Accordingly, the rule has been reviewed by OMB.
    In the IFR, FEMA established a process by which claimants who were
injured as a result of the Fire may apply for compensation under the
Act. FEMA is updating that process through this Final Rule. Affected
State, local, and Tribal governments, private sector businesses, not-
for-profit organizations, and individuals and households are eligible
to apply for compensation based on clarifying changes made in this
Final Rule. The established process results in costs to claimants for
time to apply for and substantiate a claim, and for FEMA to process and
adjudicate claims. Claimants submit a Notice of Loss to FEMA, meet with
a FEMA Claims Reviewer, obtain the documentation needed to substantiate
claims, sign a Proof of Loss, and complete and return a Release and
Certification Form. Additionally, affected insurance companies are
eligible to submit a subrogation notice of loss for possible
compensation under the Act. Claimants who disagree with FEMA's
evaluation of the claim may also incur costs to appeal the
determination. FEMA estimates approximately 28,725 claimants will seek
compensation under the Act annually, totaling 732,490 burden hours per
year.\72\
---------------------------------------------------------------------------

    \72\ Agency Information Collection Activities: Proposed
Collection; Comment Request; Generic Clearance for Notice of Loss
and Proof of Loss, 88 FR 29144 (May 5, 2023). FEMA estimates that
28,725 applicants annually will incur approximately 25.5 burden
hours each. Over the two-year period, FEMA estimates a total of
57,450 claims with a corresponding 1,464,980 burden hours.
---------------------------------------------------------------------------

    The IFR and this rule result in additional transfer payments from
FEMA to victims for the settlement of claims for injuries resulting
from the Fire. Injuries may include property, business and/or financial
losses. Congress appropriated $3.95 billion to provide for the
expeditious consideration and settlement of these claims.\73\ The
maximum total economic impact of these actions, therefore, is $3.95
billion (assuming that all funds awarded will be expended). These funds
are for the settlement of actual compensatory damages measured by
injuries suffered, FEMA's administration of the program, and DHS OIG
oversight.\74\ However, without knowing the dollar amount of claims
that will be filed for these injuries, it is impossible to predict the
amount of the economic impact with any precision. As of July 5, 2023,
FEMA has received 1,353 Notices of Loss, which includes 2,257
claimants.
---------------------------------------------------------------------------

    \73\ Division A of Public Law 117-180, 136 Stat. 2144 (2022) and
Consolidated Appropriations Act, 2023, Public Law 117-328, 136 Stat.
4459.
    \74\ Id.
---------------------------------------------------------------------------

    The Act requires claims to be submitted no later than two years
after publication of the IFR or November 14, 2024.\75\ The Act requires
that FEMA determine and fix the amount to be paid for a claim within
180 days after a claim is submitted.\76\ Although the impact of the
rule could be spread over multiple years as claims are received,
processed, and paid, the total economic effects of a specific payment
would only occur once, rather than annually.
---------------------------------------------------------------------------

    \75\ Id.
    \76\ Division G of Public Law 117-180, 136 Stat. 2114 (2022).
---------------------------------------------------------------------------

    These actions provide distributional benefits to victims of the
Fire. FEMA has provided immediate assistance under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (Stafford Act),
as amended (Pub. L. 93-288) (42 U.S.C. 5121, et seq.) to those eligible
for public and individual assistance pursuant to the President's
declaration of a major disaster on May 4, 2022. The additional
compensation from the Act will more fully compensate victims and allow
affected State, local and Tribal governments, businesses,
organizations, and individuals to rebuild.
    In this Final Rule, FEMA is updating the established process by
which claimants who were injured as a result of the Fire may apply for
compensation under the Act. FEMA anticipates that several of the
changes it made from the IFR to this Final Rule will lead to impacts on
costs, benefits, and transfer payments. Below, FEMA discusses the
impact of these changes relative to the IFR. Specifically, these
changes include the following:
    In 44 CFR 296.4, FEMA added ``other natural resources'' to the
definition of ``Subsistence Resources.'' Expanding the definition leads
to the potential for claimants to receive compensation for claims
including other natural resources; however, FEMA anticipates any impact
on claim values will be a de minimis amount, as the additional language
is intended to be clarifying in nature. In Sec.  296.21(c)(2), FEMA
removed the formula on compensation for destroyed trees and other
landscaping. Removing this formula leads to the potential for claimants
to receive higher levels of compensation for these claims, and
therefore, an increase in claims values. Section 296.21(e)(3) removes
the time limit on reimbursements for treatment, allowing for claimants
to file additional claims after April 6, 2024. This will potentially
lead to an increase in the number and value of claims filed and awarded
as compared to the IFR. Claimants will potentially benefit by receiving
treatment for mental health conditions that they would not have sought
out if their expenses could not be reimbursed. In Sec.  296.21(e)(4),
FEMA extended the deadline for compensation from September 20, 2022 to
November 14, 2022 for donations claimants made to survivors of the
Hermit's Peak/Calf Canyon Fire. This will potentially lead to an
increase in the number and value of claims awarded by FEMA relative to
the IFR. In Sec.  296.21(e)(5), FEMA removed the formula for
compensation for measures taken to reduce risk from natural disasters
heightened by the Fire. Removing this formula leads to the potential
for claimants to receive higher levels of compensation for these
claims, and therefore, an increase in claims values. FEMA edited Sec.
296.35 to allow

for a claimant to file a claim for depreciation after the sale of any
real property, not only the sale of a home. FEMA also extends a
deadline in this section, allowing for a claimant to request to reopen
a claim under limited circumstances until the deadline established in
the Federal Register. Both of these changes will potentially lead to an
increase in claims and more claims being awarded as compared to the
IFR.
    All increases in the number or value of claims payments in
comparison to the IFR will lead to an increase in transfer payments
from FEMA to affected recipients. The extent to which the claim values
increase, recipients will benefit by being made more whole after their
loss, thereby improving their ability recover and be resilient. Any
increase in the number of claims filed will also lead to an increase in
burden hours to claimants and administrative costs to FEMA. None of
these changes will affect the maximum total impact of the rule of $3.95
billion.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)) applies only
to rules for which an agency publishes a general notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, FEMA
did not issue a notice of proposed rulemaking, and was not required to
do so under any law. Accordingly, the RFA's requirements do not apply
to this Final Rule.

D. Unfunded Mandates Reform Act of 1995

    As noted above, no notice of proposed rulemaking was published in
advance of this action. Therefore, the written statement provisions of
the Unfunded Mandates Reform Act of 1995, as amended, (2 U.S.C. 1501 et
seq.) do not apply to this regulatory action.

E. Paperwork Reduction Act of 1995

    This rule contains information collections necessary to support
FEMA's implementation of the Act. The Notice of Loss and Proof of Loss
forms (OMB Control Number 1660-0155) were submitted and approved under
OMB's emergency clearance procedures on November 14, 2022 to allow FEMA
to begin accepting claims immediately after publication of the IFR. A
revision of the initial emergency collection was approved on February
16, 2023 to incorporate additional forms necessary to effectively
process claims under the Act. FEMA is pursuing approval under the
normal notice and comment process for this collection and will publish
notice in the Federal Register for comment before receiving an
extension of the emergency approval.

F. Privacy Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must
determine whether implementation of a regulation will result in a
system of records. A ``record'' is any item, collection, or grouping of
information about an individual that is maintained by an agency,
including, but not limited to, his/her education, financial
transactions, medical history, and criminal or employment history and
that contains his/her name, or the identifying number, symbol, or other
identifying particular assigned to the individual, such as a finger or
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A ``system of
records'' is a group of records under the control of an agency from
which information is retrieved by the name of the individual or by some
identifying number, symbol, or other identifying particular assigned to
the individual. An agency cannot disclose any record which is contained
in a system of records except by following specific procedures.
    In accordance with DHS policy, FEMA has completed a Privacy
Threshold Analysis (PTA) for this rule. DHS has determined that this
rulemaking does not affect the 1660-0155 OMB Control Number's
compliance with the E-Government Act of 2002 or the Privacy Act of
1974, as amended. Specifically, DHS has concluded that the 1660-0155
OMB Control Number is covered by the DHS/FEMA/PIA-044 National Fire
Incident Reporting Systems (NFIRS) Privacy Impact Assessment (PIA) and
the DHS/FEMA/PIA-049 Individual Assistance (IA) Program PIA.
Additionally, DHS has decided that the 1660-0155 OMB Control Number is
covered by DHS/ALL-004 General Information Technology Access Account
Records System (GITAARS), 77 FR 70792 (Nov. 27, 2012), and DHS/ALL-013
Department of Homeland Security Claims Records, 73 FR 63987 (Oct. 28,
2008) System of Records Notices (SORNs).

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

    Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments,'' 65 FR 67249, November 9, 2000, applies to agency
regulations that have Tribal implications, that is, regulations that
have substantial direct effects on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes. Under this Executive Order, to the extent
practicable and permitted by law, no agency shall promulgate any
regulation that has Tribal implications, that imposes substantial
direct compliance costs on Indian Tribal governments, and that is not
required by statute, unless funds necessary to pay the direct costs
incurred by the Indian Tribal government or the Tribe in complying with
the regulation are provided by the Federal Government, or the agency
consults with Tribal officials.
    FEMA entered into consultation with the Indian Tribes that have
been impacted by the Fire and whose Tribal entities or Tribal members
have been impacted by the Fire during the public comment period of the
Interim Final Rulemaking. The consultation was held on December 9, 2022
at 3:00 p.m. The concerns raised during that consultation are addressed
above.

H. Executive Order 13132, Federalism

    Executive Order 13132, ``Federalism,'' 64 FR 43255, August 10,
1999, sets forth principles and criteria that agencies must adhere to
in formulating and implementing policies that have federalism
implications, that is, regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.'' Federal
agencies must closely examine the statutory authority supporting any
action that would limit the policymaking discretion of the States, and
to the extent practicable, must consult with State and local officials
before implementing any such action.
    FEMA has determined that this rulemaking does not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, and
therefore does not have federalism implications as defined by the
Executive Order. FEMA, however, met with the State of New Mexico on
January 10, 2023 to discuss the effect of the IFR on the State. The
transcript from that meeting can be found on the public docket at
https://www.regulations.gov/document/FEMA-2022-0037-0142 and comments
raised during that meeting are addressed above.

I. National Environmental Policy Act of 1969 (NEPA)

    Under Section 102 of the National Environmental Policy Act of 1969
(NEPA), as amended, 42 U.S.C. 4321 et seq., an agency must prepare an
environmental assessment or environmental impact statement for any
major Federal action that significantly affects the quality of the
human environment unless the action can be statutorily or categorically
excluded. 40 CFR 1501.1(a), 1501.4. A ``major federal action'' includes
new or revised agency rules or regulations. 40 CFR 1508.1(q)(2). A
categorical exclusion is a category of actions that the Federal agency
has determined, normally does not significantly affect the quality of
the human environment. 42 U.S.C. 4336e(1). If there are extraordinary
circumstances, however, a normally excluded action may have a
significant effect, and if the effect cannot be mitigated, further
environmental review is required. 40 CFR 1501.4.
    This rulemaking is a major Federal action subject to NEPA. Based on
the public comments received, the rulemaking revises the IFR to better
address the needs of the communities affected by the Fire with
particular consideration to their geographic, economic and cultural
characteristics. The purpose of the rulemaking is to establish a
process and procedures for FEMA to expeditiously pay actual
compensatory damages for injuries resulting from the Fire. FEMA has
determined that categorical exclusion A3 included in the list of
exclusion categories at Department of Homeland Security Instruction
Manual 023-01-001-01, Revision 01, Implementation of the National
Environmental Policy Act, Appendix A, issued November 6, 2014, applies
to this rulemaking. Specifically, categorical exclusion A3 covers the
promulgation of rules, issuance of rulings or interpretations, and the
development and publication of policies, orders, directives, notices,
procedures, manuals, and advisory circulars if they meet certain
criteria provided in A3(a)-(f). This Final Rule meets Categorical
Exclusion A3(a), ``[t]hose of a strictly administrative or procedural
nature,'' and A3(b), ``[t]hose that implement, without substantive
change, statutory or regulatory requirements.'' FEMA has determined
that there are no extraordinary circumstances that prevent the use of
this categorical exclusion for this rulemaking action.

J. Executive Orders 12898 and 14096 on Environmental Justice

    Under Executive Order 12898, ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations,'' 59 FR 7629 (Feb. 16, 1994), as amended by Executive
Order 12948, 60 FR 6381, (Feb. 1, 1995), FEMA incorporates
environmental justice into its policies and programs. The Executive
Order requires each Federal agency to conduct its programs, policies,
and activities that substantially affect human health or the
environment in a manner that ensures that those programs, policies, and
activities do not have the effect of excluding persons from
participation in programs, denying persons the benefits of programs, or
subjecting persons to discrimination because of race, color, or
national origin. Further, Executive Order 14096, ``Revitalizing Our
Nation's Commitment to Environmental Justice for All,'' 88 FR 25251
(Apr. 26, 2023), charges Federal agencies to make achieving
environmental justice part of their missions, consistent with statutory
authority, by identifying, analyzing, and addressing the
disproportionate and adverse human health and environmental effects and
hazards of Federal activities, including those related to climate
change and cumulative impacts of environmental and other burdens on
communities with environmental justice concerns.
    This rulemaking does not have a disproportionate and adverse helath
or environmental effect on communities, nor does it exclude persons
from participation in FEMA programs, deny persons the benefits of FEMA
programs, or subject persons to discrimination because of race, color,
or national origin. The rulemaking finalizes the IFR and establishes
the procedures for processing and paying claims for property, business
and other financial losses to those person(s) sustaining losses from
the Fire. The eligibility requirements are to ensure the validity of
the claim for compensation. See e.g., 44 CFR 296.4 (definition of
``injured person''), 296.20, 296.21, and 296.30. With its revisions to
the IFR, the rulemaking better addresses the needs of the communities
affected by the Fire based on the public comments received and the
communities' particular geographic, economic, and cultural
characteristics. Claimants also have appeal rights: they can file an
administrative appeal of the decision by the Director of the Claims
Office, and/or resolve a dispute through binding arbitration or appeal
the Director's decision to the United States District Court for the
District of New Mexico. All persons eligible for compensatory payments
resulting from the Fire will benefit.

K. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5
U.S.C. 801-808 before a rule can take effect, the Federal agency
promulgating the rule must: submit to Congress and to the Government
Accountability Office (GAO) a copy of the rule; a concise general
statement relating to the rule, including whether it is a major rule;
the proposed effective date of the rule; a copy of any cost-benefit
analysis; descriptions of the agency's actions under the Regulatory
Flexibility Act and the Unfunded Mandates Reform Act; and any other
information or statements required by relevant executive orders.
    FEMA has submitted this rule to the Congress and to GAO pursuant to
the CRA. The Office of Management and Budget has determined that this
rule is ``economically significant,'' but this rule is not a ``major
rule'' within the meaning of the CRA. FEMA believes this Final Rule is
not subject to the additional review requirements under the CRA given
the statutory mandate to issue the Interim Final Rule within 45 days of
the Act's enactment under section 104(f) of the Act and Congress's
desire for the agency to begin processing and paying claims pursuant to
the Act expeditiously under section 102(b)(2). The changes made in the
Final Rule need to be immediately effective to resolve the comments
raised during the IFR's public comment period to the claims process and
ensure the continued expeditious processing and payment of claims under
the Act. This Final Rule is a procedural rule and does not confer any
substantive rights, benefits, or obligations but rather only updates
the agency's procedures for how to voluntarily file a claim under the
Act. As such, this Final Rule is a ``rule of agency organization,
procedure, or practice that does not substantially affect the rights or
obligation of non-agency parties'' pursuant to 5 U.S.C. 804(3)(C).
Finally, even if this final rule is considered a ``rule'' under the
CRA, FEMA finds there is good cause to dispense with notice and public
comment under 5 U.S.C. 808(2). Notice and public comment are
impracticable and contrary to public interest given the Act's
requirement for the agency to publish an IFR within 45 days of
enactment and the Act's purpose to provide expeditious consideration
and settlement of claims for victims of the

Fire as explained above. Therefore, there is no delay in its effective
date under the CRA.

List of Subjects in 44 CFR Part 296

    Administrative practice and procedure, Claims, Disaster Assistance,
Federally affected areas, Indians, Indians--lands, Indians--Tribal
government, Organization and functions (Government agencies), Public
lands, Reporting and recordkeeping requirements, State and local
governments.

0
For the reasons discussed in the preamble, the Federal Emergency
Management Agency (FEMA) is revising part 296 to read as follows:

PART 296--HERMIT'S PEAK/CALF CANYON FIRE ASSISTANCE

Sec.
Subpart A--General
296.1 Purpose.
296.2 Policy.
296.3 Information and assistance.
296.4 Definitions.
296.5 Overview of the claims process.
296.6-296.9 [Reserved]
Subpart B--Bringing a Claim Under the Hermit's Peak/Calf Canyon Fire
Assistance Act
296.10 Filing a claim under the Hermit's Peak/Calf Canyon Fire
Assistance Act
296.11 Deadline for notifying FEMA of injuries.
296.12 Election of remedies.
296.13 Subrogation.
296.14 Assignments.
296.15-296.19 [Reserved]
Subpart C--Compensation Available under the Hermit's Peak/Calf Canyon
Fire Assistance Act
296.20 Prerequisite to compensation.
296.21 Allowable damages.
296.22-296.29 [Reserved]
Subpart D--Claims Evaluation
296.30 Establishing injuries and damages.
296.31 Reimbursement of claim expenses.
296.32 Determination of compensation due to claimant.
296.33 Partial payments.
296.34 Supplementing claims.
296.35 Reopening a claim.
296.36 Access to records.
296.37 Confidentiality of information.
296.38-296.39 [Reserved]
Subpart E--Dispute Resolution
296.40 Scope.
296.41 Administrative appeal.
296.42 Arbitration.
296.43 Judicial review.

    Authority: Pub. L. 117-180, 136 Stat. 2114, 2168; Homeland
Security Act of 2002, 6 U.S.C. 101 et seq.

Subpart A--General

Sec.  296.1  Purpose.

    This part implements the Hermit's Peak/Calf Canyon Fire Assistance
Act (Act), Division G of Public Law 117-180, 136 Stat. 2114, 2168,
which requires the Federal Emergency Management Agency (FEMA) to
establish the Office of Hermit's Peak/Calf Canyon Fire Claims (``Claims
Office'') to receive, evaluate, process, and pay actual compensatory
damages for injuries resulting from the Hermit's Peak/Calf Canyon Fire.

Sec.  296.2  Policy.

    It is our policy to provide for the expeditious resolution of
damage claims through a process that is administered with sensitivity
to the burdens placed upon claimants by the Hermit's Peak/Calf Canyon
Fire.

Sec.  296.3  Information and assistance.

    Information and assistance concerning the Act is available from the
Claims Office, Federal Emergency Management Agency online at https://www.fema.gov/hermits-peak.

Sec.  296.4  Definitions.

    Administrative Appeal means an appeal of the Authorized Official's
Determination to the Director of the Claims Office in accordance with
the provisions of Subpart E of this part.
    Administrative Record means all information submitted by the
claimant and all information collected by FEMA concerning the claim,
which is used to evaluate the claim and to formulate the Authorized
Official's Determination. It also means all information that is
submitted by the claimant or FEMA in an Administrative Appeal and the
decision of the Administrative Appeal. It excludes the opinions,
memoranda and work papers of FEMA attorneys and drafts of documents
prepared by Claims Office personnel and contractors.
    Administrator means the Administrator of the Federal Emergency
Management Agency.
    Arbitration Administrator means the FEMA official responsible for
administering arbitration procedures to resolve disputes regarding a
claim. Contact information for the Arbitration Administrator can be
found online at https://www.fema.gov/hermits-peak.
    Authorized Official means an employee of the United States who is
delegated with authority by the Director of the Claims Office to render
binding determinations on claims and to determine compensation due to
claimants under the Act.
    Authorized Official's Determination means a report signed by an
Authorized Official and mailed to the claimant evaluating each element
of the claim as stated in the Proof of Loss and determining the
compensation, if any, due to the claimant.
    Claimant means a person who has filed a Notice of Loss under the
Act.
    Claims Office means the Office of Hermit's Peak/Calf Canyon Fire
Claims.
    Claims Reviewer means an employee of the United States or a Claims
Office contractor or subcontractor who is authorized by the Director of
the Claims Office to review and evaluate claims submitted under the
Act.
    Days means calendar days, including weekends and holidays.
    Director means an Independent Claims Manager appointed by the
Administrator who will serve as the Director of the Claims Office.
    Good Cause, for purposes of extending the deadline for filing,
supplementing a claim, or reopening a claim includes, but is not
limited to: instances where a claimant, through no fault of their own,
may not be able to access needed documentation in time to submit a
claim or transmit relevant information or data; or where damage is
found after a claim has been submitted; or other instances in which the
Director of the Claims Office, in their discretion, determines that an
undue hardship or change in circumstances on the claimant warrants an
extension of a deadline or the supplementation or reopening of existing
claims.
    Hermit's Peak/Calf Canyon Fire means:
    (1) The fire resulting from the initiation by the U.S. Forest
Service of a prescribed burn in the Santa Fe National Forest in San
Miguel County, New Mexico on April 6, 2022;
    (2) The pile burn holdover resulting from the prescribed burn by
the U.S. Forest Services which reemerged on April 19, 2022; and
    (3) The merger of the two fires described in paragraphs (1) and (2)
of this definition, reported as the Hermit's Peak Fire or the Hermit's
Peak Fire/Calf Canyon Fire.
    Household means a group of people, related or unrelated, who live
together on a continuous basis and does not include members of an
extended family who do not regularly and continuously cohabit.
    Household Including Tribal Members means a Household that existed
on April 6, 2022, which included one or more Tribal Members as
continuous residents.
    Indian Tribe means the recognized governing body of any Indian or
Alaska Native Tribe, band, nation, pueblo, village, community,
component band, or

components reservation individually identified (including
parenthetically) in the list published most recently as of September
30, 2022, pursuant to section 104 of the Federally Recognized Indian
Tribe List Act of 1994.
    Individual Assistance means the FEMA program established under
subchapter IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides
assistance to individuals and families adversely affected by a major
disaster or an emergency.
    Injured Person means an individual, regardless of citizenship or
alien status; or an Indian Tribe, Tribal corporation, corporation,
partnership, company, association, county, township, city, State,
school district, or other non-Federal entity that suffered injury
resulting from the Hermit's Peak/Calf Canyon Fire. The term Injured
Person includes an Indian Tribe with respect to any claim relating to
property or natural resources held in trust for the Indian Tribe by the
United States. Lenders holding mortgages or security interests on
property affected by the Hermit's Peak/Calf Canyon Fire and lien
holders are not an ``Injured Person'' for purposes of the Act.
    Injury means ``injury or loss of property, or personal injury or
death,'' as used in the Federal Tort Claims Act, 28 U.S.C. 1346(b)(1).
    Notice of Loss means a form supplied by the Claims Office through
which an Injured Person or Subrogee makes a claim for possible
compensation under the Act.
    Proof of Loss means a statement attesting to the nature and extent
of the claimant's injuries.
    Public Assistance Program means the FEMA program established under
Subchapter IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides
grants to States, local governments, Indian Tribes and private
nonprofit organizations for emergency measures and repair, restoration,
and replacement of damaged facilities.
    Release and Certification Form means a document in the manner
prescribed by section 104(e) of the Act that all claimants who have
received or are awarded compensatory damages under the Act must execute
and return to the Claims Office as required by Sec.  296.30(c).
    Subrogee means an insurer or other third party that has paid to a
claimant compensation for Injury and is subrogated to any right that
the claimant has to receive payment under the Act.
    Subsistence Resources means food and other items obtained through
hunting, fishing, firewood and other natural resource gathering,
timbering, grazing or agricultural activities undertaken by the
claimant without financial remuneration, on land damaged by the
Hermit's Peak/Calf Canyon Fire.
    Tribal Member means an enrolled member of an Indian Tribe.

Sec.  296.5  Overview of the claims process.

    (a) The Act is intended to provide persons who suffered Injury from
the Hermit's Peak/Calf Canyon Fire with a simple, expedited process to
seek compensation from the United States. This section provides a brief
explanation of the claims process for claims other than subrogation
claims. It is not intended to supersede the more specific regulations
that follow and explain the claims process in greater detail. To obtain
compensation under the Act, an Injured Person must submit all Hermit's
Peak/Calf Canyon Fire related claims against the United States or any
employee, officer, or agency of the United States to the FEMA Claims