[Federal Register Volume 87, Number 148 (Wednesday, August 3, 2022)]
[Rules and Regulations]
[Pages 47359-47380]
[FR Doc No: 2022-16555]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 206

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

Public Assistance Program's Simplified Procedures Large Project
Threshold

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule and request for comments.

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

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

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

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

SUPPLEMENTARY INFORMATION:

1. Public Participation

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

2. Background and Discussion of Rule

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

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

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

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

A. Administrative Procedure Act

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

C. Regulatory Flexibility Act

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

D. Unfunded Mandates Reform Act of 1995

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

E. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (PRA), as amended, 44
U.S.C. 3501-3520, an agency may not conduct or sponsor, and a person is
not required to respond to, a collection of information unless the
agency obtains approval from the Office of Management and Budget (OMB)
for the collection and the collection displays a valid OMB control
number. See 44 U.S.C. 3506, 3507.
    In this rule, FEMA is seeking a revision to the already existing
collection of information, OMB Control Number 1660-0017. This rule