[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Rules and Regulations]
[Pages 68085-68104]
[FR Doc No: 2022-24728]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR 296

[Docket ID FEMA-2022-0037]
RIN 1660-AB14

Hermit's Peak/Calf Canyon Fire Assistance

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

ACTION: Interim final rule; request for comments.

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SUMMARY: This interim final rule sets out the procedures for Claimants
to seek compensation for injury or loss of property resulting from the
Hermit's Peak/Calf Canyon Fire.

DATES:
    Effective Date: This rule is effective November 14, 2022.
    Comment Date: Comments must be received on or before January 13,
2023.

ADDRESSES: You may submit comments, identified by Docket ID FEMA-2022-
0037, via the Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT: Angela Gladwell, Office of Response
and Recovery,<PHONE_NUMBER>, [email protected]. Persons
with hearing or speech challenges may access this number through TTY by
calling the toll-free Federal Relay Service at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. 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-2022-0037,
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.
    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.
    FEMA will hold four in-person public meetings to solicit public
feedback about this Interim Final Rule. FEMA is announcing these public
meetings to give the public as much notice as possible regarding their
dates. FEMA will hold meetings on the below dates. If the locations and
times of these meetings change, FEMA will announce the specific times
and locations in a separate Federal Register document.
    November 17, 2022 from 5:00 p.m. to 7:00 p.m. MT at Old Memorial
Middle School, 947 Legion Drive, Las Vegas, NM 87701;
    December 1, 2022 from 5:00 p.m. to 7:00 p.m. MT at the Mora High
School, 10 Ranger Road, Mora, NM 87732;
    December 15, 2022 from 5:00 p.m. to 7:00 p.m. MT at Old Memorial
Middle School, 947 Legion Drive, Las Vegas, NM 87701; and
    January 5, 2023 from 5:00 p.m. to 7:00 p.m. MT at the Mora High
School, 10 Ranger Road, Mora, NM 87732.
    Depending on the number of speakers, the meetings may end before
their announced end time, following the last call for comments.
Reasonable accommodations are available for people with disabilities.
To request a reasonable accommodation, contact the person listed in the
FOR FURTHER INFORMATION CONTACT section as soon as possible. Last
minute requests will be accepted but may not be possible to fulfill.
All comments on this IFR made during the meetings will be posted to
https://www.regulations.gov, Docket ID FEMA-2022-0037. Please review
http://www.fema.gov/hermits-peak for more information and any updates
on these public meetings.

II. Background

    On September 30, 2022, President Biden signed into law the Hermit's
Peak/Calf Canyon Fire Assistance Act (``Act'') as part of the
Continuing Appropriations and Ukraine Supplemental Appropriations Act,
2023, Public Law 117-180, 136 Stat. 2114 (2022). The Congress passed
the Act to compensate those parties who suffered injury and loss of
property from the Hermit's Peak/Calf Canyon Fire (``Fire'').
    On April 6, 2022, the U.S. Forest Service initiated the Las
Dispensas-Gallinas prescribed burn on Federal land in the Santa Fe
National Forest in San Miguel County, New Mexico. That same day the
prescribed burn, which became known as the ``Hermit's Peak Fire,''
exceeded the containment capabilities of the U.S. Forest Service and
was declared a wildfire, spreading to other Federal and non-Federal
lands.\1\ On April 19, 2022, the Calf Canyon Fire, also in San Miguel
County, New Mexico, began burning on Federal land and was later
identified as the result of a pile burn in January 2022 that remained
dormant under the surface before reemerging.\2\ The Hermit's Peak and
Calf Canyon Fires merged on April 27, 2022, and both fires were
reported as the Hermit's Peak Fire or the Hermit's Peak/Calf Canyon
Fire. By May 2, 2022, the fire had grown, causing evacuations in
multiple villages and communities in San Miguel County and Mora County,
including the San Miguel County jail, the State's psychiatric hospital,
the United World College, and New Mexico Highlands University.\3\ At
the request of New Mexico Governor Lujan Grisham, President Biden
issued a major disaster declaration on May 4, 2022.\4\ The Hermit's
Peak/Calf Canyon Fire was not 100 percent contained until August 21,
2022.\5\
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    \1\ Section 102(a)(1) and (2), Hermit's Peak/Calf Canyon Fire
Assistance Act, Public Law 117-180, 136 Stat. 2114 (2002). See also
``Las Dispensas Prescribed Burn Declared Wildfire,'' Apr. 6, 2022
found at https://inciweb.nwcg.gov/incident/article/8049/68044/ (last
accessed Sept. 15, 2022) and Theresa Davis, ``How `good fires' can
turn into wildfires,'' Albuquerque Journal, Apr. 30, 2022 found at
https://www.alqjournal.com/2494692/how-good-fires-can-turn-into-wildfires.html (last accessed Sept. 15, 2022).
    \2\ See Bill Gabbert, ``Investigators determine Calf Canyon Fire
caused by holdover from prescribed fire,'' Wildfire Today, May 27,
2022 found at https://wildfiretoday.com/?s=calf+canyon+holdover&apbct__email_id__search_form_34270= (last
accessed Oct. 6, 2022).
    \3\ See Bill Gabbert, ``Calf Canyon/Hermits Peak Fire grows to
more than 120,000 acres,'' Wildfire Today, May 2, 2022 found at
https://wildfiretoday.com/2002/05/02/calf-canyon-hermits-peak-fire-grows-to-more-than-120000-acres/ (last accessed Sept. 15, 2022). See
also Bryan Pietsch and Jason Samenow, ``New Mexico blaze is now
largest wildfire in state history,'' The Washington Post, May 17,
2022 found at https://www.washingtonpost.com/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/ (last accessed Sept. 15, 2022).
    \4\ 87 FR 33808 (June 3, 2022).
    \5\ ``Hermits Peak/Calf Canyon Fire 100 percent contained, fire
officials say,'' The New Mexican, Aug. 21, 2022 found at https://www.santafenewmexican.com/news/local_news/hermits-peak-calf-canyon-fire-100-percent-contained-fire-officials-say/articles_5ac054fc-21a1-11ed-9401-134e852ee0a8.html (last accessed Sept. 15, 2022).
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    The Act provides compensation to injured persons impacted by the
Fire. It requires FEMA to design and administer a claims program to
compensate victims of the Fire, for injuries resulting from the fire
and to provide for the expeditious consideration and settlement for
those claims and injuries. The Act further directs FEMA to establish an
arbitration process for disputes regarding claims.
    This interim final rule establishes the procedures for the
processing and payment of claims to those injured by the Fire
sustaining property, business, and/or financial losses. FEMA's
procedures in this interim final rule are generally consistent with
prior processes established for claims associated with the Cerro Grande
Fire Assistance Act.\6\ Specific discussion and request for comment is
provided where FEMA seeks to revise and/or modernize that process. As
referenced above, FEMA plans to hold in-person public meetings during
the 60-day comment period.
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    \6\ The Cerro Grande Fire Assistance Act (Pub. L. 106-246
(2001)) required FEMA to design and administer a program for fully
compensating those who suffered injuries resulting from the Cerro
Grande Fire. The Cerro Grande fire resulted from a prescribed fire
ignited on May 4, 2000, by National Park Service fire personnel at
the Bandelier National Monument, New Mexico under an approved
prescribed fire plan. That fire burned approximately 47,750 acres
and destroyed over 200 residential structures. The Cerro Grande Fire
Assistance Act process is detailed in an Interim Final Rule (65 FR
52259 (Aug. 27, 2000) and a Final Rule (66 FR 15847 (Mar. 21, 2001)
that is now codified at 44 CFR part 295.
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    The first step in the claims process under this part is for the
Claimant to file a Notice of Loss with the Office of Hermit's Peak/Calf
Canyon Fire Claims (``Claims Office''). After receipt and
acknowledgement by the Claims Office, a Claims Reviewer will contact
the

claimant to review the claim and help the claimant formulate a strategy
for obtaining any necessary supporting documentation to complete the
Proof of Loss. After discussion of the claim with the Claims Reviewer,
the claimant will review and sign a Proof of Loss and submit it to the
Claims Office. The Claims Reviewer will submit a report to the
Authorized Official for review to determine whether compensation is due
to the claimant. The Authorized Official's written decision will be
provided to the claimant. If satisfied with the decision, the claimant
will receive payment after returning a completed Release and
Certification Form. If the claimant is not satisfied with the decision,
an Administrative Appeal may be filed with the Director of the Claims
Office. If the claimant is not satisfied after appeal, the dispute may
be resolved through binding arbitration or heard in the United States
District Court for the District of New Mexico. The specific proposals
in this rule are more fully described below.

III. Discussion of the Interim Final Rule

    This interim final rule adds 44 CFR part 296 to establish the
procedures for processing and payment of claims to those injured by the
Fire sustaining property, business, and/or financial losses.

A. Subpart A--General

    Subpart A provides a general introduction and overview of the
process.
1. Section 296.1 Purpose
    This section provides for the purpose of the regulation, which is
to establish the Office of Hermit's Peak/Calf Canyon Fire Claims to
evaluate, process, and pay actual compensatory damages for injuries
suffered from the Fire.
2. Section 296.2 Policy
    This section explains FEMA's policy to provide expeditious
resolution of damage claims for those injured by the Fire. The policy
requires sensitivity to claimants' situations in administering the
process.
3. Section 296.3 Information and assistance
    This section provides information on the Claims Office and general
information about assistance available as a result of the Fire.
4. Section 296.4 Definitions
    This section provides definitions for the relevant regulatory
terms, consistent with the Act and terms defined in the Cerro Grande
Fire Assistance process found at 44 CFR part 295. FEMA is adding
definitions for ``Administrator,'' ``Claims Office,'' and ``Hermit's
Peak/Calf Canyon Fire'' consistent with the Act's definition of these
terms. FEMA is including a definition of ``Director'' to mean the
Independent Claims Manager appointed by the Administrator who will lead
the Claims Office. FEMA is adding a definition of ``Good Cause'' to
further explain when FEMA will allow claimants to extend the deadline
for filing, supplementing claims, or reopening a claim for good cause.
FEMA is incorporating a definition for ``Injury'' similar to the
definition of ``Loss'' found in the Cerro Grande Fire Assistance
process to reflect the terminology of the Act, and an updated
definition of ``Indian Tribe,'' ``Notice of Loss,'' and ``Proof of
Loss'' to reflect the definitions and updated requirements found in the
Act. FEMA is also including a definition for ``Individual Assistance''
consistent with the definition found at 44 CFR 206.2. Finally, FEMA is
including a definition for ``Subrogee'' to mean an insurer or other
third party that has paid compensation to a claimant for injury and
subrogated to any right the claimant has to receive payment under the
Act.
5. Section 296.5 Overview of the Claims Process
    The claims process is generally described in this section and is
generally consistent with the process established in the Cerro Grande
Fire Assistance process at 44 CFR part 295. The claimant must first
file a Notice of Loss with the Claims Office. A Claims Reviewer will
then contact the claimant to review the claim and help the claimant
formulate a strategy for obtaining any necessary supporting
documentation. After discussion of the claim with the Claims Reviewer,
the claimant will review and sign a Proof of Loss. The Proof of Loss
will document all injuries and loss of property, business losses, and
financial losses pursuant to the Act. The Claims Reviewer will fully
evaluate the claim and submit a report to the Authorized Official for
review to determine whether compensation is due to the claimant. The
Authorized Official's written decision will be provided to the
claimant. If the claimant is satisfied with the decision, payment will
be received upon return of a completed Release and Certification Form.
If the claimant is not satisfied with the decision, an Administrative
Appeal may be filed with the Director of the Claims Office. If the
claimant is not satisfied after appeal, the dispute may be resolved
through binding arbitration or heard in the United States District
Court for the District of New Mexico.

B. Subpart B--Bringing a Claim Under the Hermit's Peak/Calf Canyon Fire
Assistance Act

    Consistent with the Cerro Grande Fire Assistance claims process,
subpart B explains the procedure for filing a claim under the Act.
1. Section 296.10 Filing a Claim Under the Hermit's Peak/Calf Canyon
Fire Assistance Act
    Any Injured Person can file a Notice of Loss to bring a claim under
the Act which must include a brief description of each injury. FEMA
will only accept a Notice of Loss form to bring a claim to ensure
efficient and consistent processing of all claims associated with the
Fire. FEMA reminds claimants in paragraph (a) that the Notice of Loss
must contain a brief description of each injury, as defined in section
296.4. For the convenience of claimants, FEMA is offering the option
for a single Notice of Loss submission for a household so long as all
those injured are identified. Paragraph (c) explains the signature
process for the Notice of Loss. If the claimant is an entity or
individual who lacks the legal capacity to sign the Notice of Loss,
then and only then can a duly authorized legal representative of the
claimant sign the Notice of Loss. The same principle applies to
affidavits submitted in support of claims, the Proof of Loss, and the
Release and Certification Form. Public adjusters and attorneys may not
sign documents filed under the Act on behalf of individual claimants
who have the legal capacity to execute these documents.
    Paragraph (e) modernizes the process by providing options to file
the Notice of Loss by mail, electronically, or in person. Details
regarding the filing process can be found at http://www.fema.gov/hermits-peak. FEMA seeks comment on whether this update will improve
the overall claims process. Paragraph (f) clarifies that the Notice of
Loss is deemed to be filed on the date received and acknowledged by the
Claims Office if completed and properly signed.
2. Section 296.11 Deadline for Notifying FEMA of Injuries
    Pursuant to the Act, the deadline to file a Notice of Loss is two
years after the date the interim final rule is promulgated or November
14, 2022. There is no ability to extend this deadline under the Act and
section 296.11 provides clear instructions regarding the deadline to
ensure claimants are informed of the timeline

by which to submit their Notice of Loss. FEMA cannot provide
compensatory damages for an injury unless the claimant has reported it
to FEMA by November 14, 2024. Sections 296.34 and 296.35 below
establish a process for notifying FEMA of injuries that are not
referenced in the initial Notice of Loss. Whether a claimant tells FEMA
about an injury in the initial Notice of Loss or an amendment under
section 296.34, FEMA must know about the injury by November 14, 2024.
3. Section 296.12 Election of Remedies
    The Act permits an Injured Person to seek compensation through one
of three mechanisms: (1) the Act; or (2) the Federal Tort Claims Act;
or (3) a civil lawsuit against the United States (if authorized by
another law). The Act further provides that a claimant's choice of one
of these three mechanisms becomes ``final and conclusive on the
Claimant . . . upon acceptance of an award.'' Therefore, in paragraph
(a), FEMA clarifies that Injured Persons who accept an award under the
Act waive the right to pursue any claims arising out of or relating to
the same subject matter, whether through the Federal Tort Claims Act or
a civil lawsuit. Under paragraph (b), any person or entity who accepts
an award on a claim under the Federal Tort Claims Act or a civil action
against the United States, or any employee, officer, or agency of the
United States for fire-related claims waives the right to pursue any
claims for injuries arising out of or relating to the same subject
matter. FEMA seeks comment on the best means of implementing the Act's
election of remedies provision.
4. Section 296.13 Subrogation
    Section 296.13 describes the procedures to be used by insurers (or
other third parties with the rights of a Subrogee) for submitting
subrogation claims. This section is generally consistent with the Cerro
Grande Fire Assistance process. The procedures described in paragraphs
(c) through (f) of section 295.10 apply with equal vigor to subrogation
claims, including the requirement that the Notice of Loss be received
by November 14, 2024. No subrogation claim will be considered unless
the Subrogee elects the Act as its exclusive mechanism for seeking
compensation from the United States for all Hermit's Peak/Calf Canyon
Fire-related subrogation claims and any other Hermit's Peak/Calf Canyon
Fire-related injuries. FEMA will reject a subrogation claim to recover
payments until the Subrogee has paid the insured everything that the
Subrogee believes that the Injured Person is entitled to receive under
the policy. A Notice of Loss may be filed if there is a dispute between
the Injured Person and the Subrogee, which is pending before a third
party (e.g., appraiser, arbitrator, or court), provided that the
insurer has made the final payment that it believes that the insured is
entitled to receive under the policy.
5. Section 296.14 Assignments
    Consistent with the Cerro Grande Fire Assistance process, this
section prohibits assignment of claims. It also prohibits assignment of
the right to receive payment for claims. FEMA intends to make the Act's
compensation payments only to the injured claimant.

C. Subpart C--Compensation Available Under the Hermit's Peak/Calf
Canyon Fire Assistance Act

    Subpart C describes the compensation available under the Act.
Section 104(c)(3) of the Act limits payments under the Act to ``actual
compensatory damages measured by injuries suffered'' and shall not
include ``interest before settlement or payment of a claim; or punitive
damages.'' Consistent with the Cerro Grande Fire Assistance process,
FEMA views the terms ``compensation,'' ``damages,'' and ``compensatory
damages'' under the Act as synonyms and uses them interchangeably in
this interim final rule. FEMA may only compensate claimants for damages
that resulted from the Fire. Each claim will be reviewed on its unique
facts and merits. Claimants should not assume that an injury resulting
from the Fire is not compensable simply because the regulation fails to
address it specifically. Claimants should include all injuries
resulting from the Fire on the Notice of Loss. Generally speaking, FEMA
will determine compensatory damages in accordance with the laws of the
State of New Mexico, except where the Act is more generous. If FEMA
denies a claim, an explanation of the reasons for doing so will be
provided.
1. Section 296.20 Prerequisite to Compensation
    Consistent with the Cerro Grande Fire Assistance process, a
claimant must be an Injured Person who suffered an injury as a result
of the Fire and sustained damages to receive compensation under the
Act.
2. Section 296.21 Allowable Damages
    As required by the Act, FEMA will provide for payment of actual
compensatory damages under paragraph (a). Consistent with the Act \7\
and Cerro Grande Fire Assistance process, FEMA will apply the laws of
the State of New Mexico to the calculation of damages. Damages must be
reasonable in amount. To reduce complexity in the process, FEMA has
eliminated language referencing reasonable steps to reduce damages.
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    \7\ Section 104(c)(2), Hermit's Peak/Calf Canyon Fire Assistance
Act, Public Law 117-180, 136 Stat. 2114, 2168 (2022).
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    Consistent with the Act and the Cerro Grande Fire Assistance
process, paragraph (b) provides that FEMA will not reimburse claimants
for attorneys' fees or agents' fees. Our treatment of attorney and
agent fees is consistent with the Act. Section 104(j) of the Act limits
the fees that an attorney or agent may charge a client. It does not
provide that FEMA will reimburse claimants for attorneys' or agents'
fees and this exclusion applies to attorney and agent fees incurred in
the prosecution of a claim under the Act. FEMA also notes that the Act
does not regard attorneys' fees as compensatory damages. Attorneys'
fees are not considered compensatory damages in tort actions under New
Mexico law.\8\ Further, the statutory damages under New Mexico law \9\
may not be recovered as Congress did not authorize FEMA to pay
statutory damages in the Act.
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    \8\ See New Mexico Right to Choose/NARAL v. Johnson, 127 N.M.
654 (1999).
    \9\ See NM Stat. Ann. Sec.  30-21-4.
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    Paragraphs (c) through (e) explain how FEMA plans to approach the
types of claims the agency expects to encounter most frequently. FEMA
addressed all three categories of damages allowed under the Act--
property, business, and/or financial losses--but made a deliberate
choice not to address all the examples of such categories enumerated
under the Act. There is no intention to limit the right of claimants in
this section. Claimants may recover all damages allowable under section
104(d)(4) of the Act.
    Consistent with the approach taken in the Act, paragraph (c) sets
out FEMA's approach to compensating for property losses. Paragraph
(c)(1) explains FEMA's approach to loss of real property and contents.
FEMA will provide compensatory damages for the damage or destruction of
a property and its contents, including the reasonable cost of
reconstruction of a structure comparable in design, construction
materials, size, and improvements. FEMA will calculate these costs
using post-fire construction costs in the locality that a damaged or
destroyed structure existed before the Fire. FEMA will compensate
property owners to

rebuild their structures in accordance with the building codes and
standards applicable at the time that their claim is processed,
regardless of whether the destroyed structure complied with codes and
standards before the Fire. To process claims within a timely manner,
FEMA may be required to estimate a property owner's costs well before
construction is completed. Property owners who decide to rebuild and
later find that their actual costs exceeded FEMA's estimate may
supplement or reopen their claims under Sections 296.34 and 296.35 of
this interim final rule.
    In paragraph (c)(2), FEMA is limiting compensation for trees and
other landscaping to 25 percent of the pre-fire value of the structure
and lot. This approach is generally consistent with the approach taken
in the Cerro Grande Fire Assistance process. Under New Mexico tort law,
damages are awarded for destroyed or damaged trees based on the value
of the trees destroyed or the difference in value of the real estate
with and without the trees.\10\ This 25 percent limitation does not
apply to business losses for timber, crops, and other natural resources
under section 296.21(d). The New Mexico tort law formula is a less
generous formula than the replacement cost calculation FEMA implemented
in the Cerro Grande Fire Assistance process. FEMA is implementing the
same formula as the Cerro Grande Fire Assistance process now.
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    \10\ See Mogollon Gold & Copper Co. v. Stout, 14 NW 245 (1907).
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    Paragraph (c)(3) is intended to implement section 104(d)(4)(A)(ii)
of the Act, which authorizes FEMA to pay ``otherwise uncompensated
damages resulting from the Hermit's Peak/Calf Canyon Fire for . . . a
decrease in the value of real property.'' Consistent with the Cerro
Grande Fire Assistance process, paragraph (c)(3) allows FEMA to
compensate for realized losses in the value of real property, i.e.,
land and structure, to the extent that such losses have not been fully
compensated either through compensation under paragraph (c)(1) or
otherwise. To be awarded compensatory damages, paragraph (c)(3)
requires the claimant to either sell the real property in a good faith
arm's length transaction that closes no later than November 14, 2024
and the claimant realizes a loss in the pre-fire value (see paragraph
(c)(1)); or the claimant can establish that the real property value was
permanently diminished as a result of the Fire (see paragraph (c)(2)).
Losses involving the value of commercial real estate will be evaluated
on a case-by-case basis.
    Paragraph (c)(4) addresses compensation to Injured Persons for
Subsistence Resources losses. FEMA is generally mirroring the Cerro
Grande Fire Assistance process for subsistence in this section, but
consistent with section 104(d)(4)(A)(iv) of the Act, FEMA is not
limiting compensation to Indian Tribes, Tribal entities, Tribal
Members, or Households including Tribal Members but rather allowing
this compensation for all Injured Persons that have sustained
Subsistence Resource losses. Reimbursement is available for the
reasonable cost of replacing Subsistence Resources used by a claimant
prior to the start of the Fire, but that are no longer available to the
claimant as a result of the Fire. Claimants may receive either
compensatory damages for the increased cost of obtaining subsistence
resources from lands not damaged by the Fire or for the cost of
procuring substitute Subsistence Resources in the cash economy.
Compensatory damages will be paid for the period between April 6, 2022,
and the date when subsistence resources can reasonably be expected to
return to the level of availability that existed before the Fire. Long-
term damages for subsistence resources will be made in the form of lump
sum cash payments to eligible claimants.
    In paragraph (d), FEMA addresses business losses. Consistent with
the Act, FEMA will award compensatory damages for damage to tangible
assets or inventory, including timber, crops, and other natural
resources; business interruption losses; overhead costs; employee wages
for work not performed; loss of business net income; and any other loss
that the Administrator determines to be appropriate for inclusion as a
business loss.
    Paragraph (e) discusses financial losses. Consistent with the Act,
these losses include increased mortgage interest costs, insurance
deductibles, temporary or relocation expenses, lost wages or personal
income, emergency staffing expenses, debris removal and other cleanup
costs, costs of reasonable heightened risk reduction, premiums for
flood insurance, and any other loss that the Administrator determines
to be appropriate for inclusion as a financial loss. Paragraph (e)(1)
addresses recovery loans and provides for reimbursement of loans,
including Small Business Administration (SBA) disaster loans obtained
after April 6, 2022, for damages resulting from the Fire. Consistent
with the Cerro Grande Fire Assistance process, FEMA will reimburse
interest for the period beginning on the date the loan was taken out
and ending on the date when the claimant receives a compensation award
(other than partial payment). Claimants are required to use the
proceeds of their compensation awards to repay the SBA disaster loans
and FEMA will coordinate with the SBA to formulate procedures for
assuring repayment contemporaneously with the compensation award
receipt.
    Paragraph (e)(2) addresses the requirement from the Act that
claimants be eligible for compensation for flood insurance premiums.
Consistent with the Act, claimants that were not required by law to
maintain flood insurance before the Fire and did not have such
insurance before the Fire may receive reimbursement for the cost of
reasonable flood insurance premiums for a two-year period for their
owned or leased real property if required to purchase flood insurance.
Because there has not been sufficient time to revise flood zone maps
since the Fire, some claimants who may have legitimate reasons for
concern may not be required to maintain flood insurance. FEMA is
exercising the discretion in section 104(d)(4)(C)(x) to allow
compensation for flood insurance premiums if the claimant purchased
flood insurance after the Fire due to the fear of heightened flood
risk. FEMA may also provide flood insurance directly through a group or
blanket policy.
    Consistent with the Cerro Grande Fire Assistance process, paragraph
(e)(3) states that FEMA may reimburse claimants for reasonable out of
pocket treatment costs for mental health conditions resulting from the
Fire. FEMA is offering reimbursement for treatment received between
April 6, 2022 and April 6, 2024. Damages for mental health conditions
are not recoverable under New Mexico law, except in a very limited
class of cases. While FEMA will reimburse claimants for these expenses,
given the limitation of New Mexico law FEMA will not entertain
subrogation claims for mental health treatment unless those expenses
could be recovered in a tort action under New Mexico law.
    During the fire and its immediate aftermath, many individuals,
charitable organizations, businesses, and other entities made voluntary
donations of cash, goods, and services to assist the fire fighting and
fire recovery effort and to help those affected by the Fire. Consistent
with the Cerro Grande Fire Assistance process, in paragraph (e)(4) FEMA
will compensate claimants for the cost of merchandise, use of
equipment, or other non-personal

services, directly or indirectly donated to survivors of the Fire, if
donated no later than September 20, 2022. Given the scope of the Fire,
FEMA believes a 30-day period after containment of the Fire constitutes
an appropriate time frame for these donations to be reimbursable;
however, the agency seeks comment on whether this time period is
sufficient. Donations will be valued at cost. FEMA is removing
compensation for discounts as provided in the Cerro Grande Fire
Assistance process, as the agency currently lacks information about
whether such discounts were provided in the wake of the Fire. However,
FEMA seeks comment on whether claimants should be able to seek
compensation for discounts on goods and services offered to fire
survivors as well as on the method for calculating such compensation
should FEMA amend its regulations to authorize compensation for
discounts on goods or services offered to fire survivors.
    Section 104(d)(4)(C)(vii) of the Act grants FEMA the authority to
compensate claimants for reasonable efforts to reduce an increased risk
to their property from wildfires, floods, or other natural disasters.
Consistent with the Act and with the Cerro Grande Fire Assistance
process, paragraph (e)(5) provides that FEMA will reimburse claimants
for reasonable efforts to reduce risk back to levels prevailing before
the Fire. Such measures may include, for example, risk reduction
projects that reduce an increased risk from flooding, mudslides, and
landslides in and around burn scars in an amount not to exceed 25
percent of the higher of compensation from all sources, (i.e., the Act,
insurance, and FEMA assistance under the Stafford Act), for damage to
the structure and lot, or the pre-fire value of the structure and lot.
Claimants seeking compensation under paragraph (e)(5) must include the
claim in a Notice of Loss filed not later than November 14, 2024 or an
amended Notice of Loss filed not later than November 14, 2025. This is
the deadline provided by section 104(d)(4)(C)(vii) of the Act.
Claimants should take into account current building codes and standards
and consider nature-based solutions \11\ to reduce their heightened
risk. Claimants must complete the risk reduction project for which they
receive compensation. FEMA believes paragraph (e)(5) clarifies the
process for obtaining compensation for heightened risk reduction
losses, regardless of the type of structure the claimant owns. FEMA is
increasing the total compensation available for risk reduction projects
given the general increase in costs of such projects since the Cerro
Grande Fire Assistance process was implemented and to encourage
claimants to consider implementing nature-based solutions to reduce the
heightened risks to their property as a result of the Fire.\12\ FEMA
seeks comment on whether the compensation is sufficient to reduce the
heightened risk and whether nature-based solutions should be considered
in risk reduction projects.
---------------------------------------------------------------------------

    \11\ See https://www.fema.gov/emergency-managers/risk-management/nature-based-solutions (last accessed Oct. 31, 2022).
    \12\ FEMA seeks to encourage Claimants to consider nature-based
solutions consistent with Executive Order 14072 ``Strengthening the
Nation's Forests, Communities, and Local Economies,'' 87 FR 24851,
Apr. 22, 2022.
---------------------------------------------------------------------------

    Paragraph (f) addresses insurance and other benefits. The Act
allows FEMA to provide compensation only if damages have not been paid
or will not be paid by insurance, a third party, or through another
FEMA program. Claimants are not required to submit their claims to
their insurance company nor are they required to pursue a settlement
from their insurance company after filing a claim under the Act. FEMA
encourages claimants to continue to pursue their insurance claims
because this may expedite the process of reconstructing documentation
that will be helpful to the claims process under the Act. If a claimant
has received or expects to receive a payment from an insurance company,
the actual or anticipated payment must be disclosed. If a claimant has
not settled with the insurance company by the time FEMA is prepared to
make a partial payment on the claim, FEMA will examine the insurance
policy and determine what the agency reasonably expects the insurance
company to pay. FEMA will review the issues again in the Authorized
Official's determination. If the insurance company has not paid all
that FEMA anticipated, FEMA can award the difference at the time that
the Authorized Official's determination is made. FEMA notes that the
State of New Mexico generally requires insurance companies to settle
catastrophic claims brought by policyholders within 90 days of the date
that the claim was reported to the insurer.\13\ FEMA expects that most,
if not all, insurance claims will be paid before the Authorized
Official's determination is issued. However, in the event that the
insurance claim is resolved after the Authorized Official's
determination is issued and as a result the claimant is due additional
compensation under the Act, the claimant should ask the Claims Office
to reconsider the matter under sections 296.34 or 296.35.
---------------------------------------------------------------------------

    \13\ See New Mexico Statutes Annotated Chapter 59A-16-20 (2021)
found at https://nmonesource.com/nmos/nmsa/en/item/4438/index.do#!fragment/zoupio-_Toc110333083/BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoAvbRABwEtsBaAfX2zgEYOAGAZn+4AOXgEoANMmylCEAIqJCuAJ7QA5KrERCYXAnmKVqraVIAbQgAIAggDkAIheR1khUko1adCAMp5SAIRUAJQBRABkQgDVbAGEQsVIwACNoT10QEREgA (last accessed Sept. 27,
2022).
---------------------------------------------------------------------------

    Those Injured Persons eligible for disaster assistance under the
Public Assistance Program are expected to apply for all available
assistance, and compensation will not be awarded for specific costs or
losses that are eligible under that program. Consistent with the Act,
FEMA clarifies that the Federal share of costs for Public Assistance
projects is 100 percent. Similarly, compensation under the Act will not
be awarded for losses or costs that have been reimbursed under the
Federal Assistance to Individual and Households Program. Those
individuals that obtain assistance under the Individuals and Households
Program are not precluded from filing a claim under the Act. Claimants
may seek compensation for losses or costs that exceed the amount
provided under the Individuals and Households Program. FEMA encourages
all Injured Persons to seek assistance under the FEMA programs for
which they are eligible. Those individuals suffering injuries that are
compensable under State or Federal worker's compensation laws must
apply for all benefits under such laws. Note that gifts or donations
made to claimants by non-governmental organizations and individuals,
other than wages paid by the claimant's employer or insurance payments,
will be disregarded in evaluating claims and need not be disclosed by
claimants.

D. Subpart D--Claims Evaluation

    Subpart D explains the process after the claim is filed, including
how claims are documented and how claimants can obtain payment if they
agree with FEMA's evaluation.
1. Section 296.30 Establishing Injuries and Damages
    Section 296.30 explains FEMA's approach to documentation of
injuries which is generally consistent with the Cerro Grande Fire
Assistance process. This section explains who has the burden of proof,
the forms needed when going through the claims process and who has the
authority to settle claims. FEMA expects that claimants will provide
whatever documentation is reasonably available to support their claim.

    Once a claimant has begun the process set out in section 296.30,
the claims office assigns a Claims Reviewer to the claim. The Claims
Reviewer will review, investigate, and objectively evaluate the claim
for the Claims Office. Claims Reviewers cannot function as agents or
representatives of the claimant. Claims Reviewers will be proactive in
helping claimants identify injuries and in formulating a strategy for
proving them and in assisting claimants in locating documentation that
may be available from third-party sources. Claimants may be asked to
sign release forms authorizing FEMA's Claims Reviewers to obtain
information and documentation from third-party sources.
    Section 295.30(a) states that the claimant bears the burden of
proof for establishing all elements of the injury and compensatory
damages. This paragraph also provides claimants the opportunity to make
a record supporting the claim by submitting any information or
documentation that they deem relevant. The responsibility for making
this record rests with the claimant, not the Claims Reviewer. As FEMA
must support compensation decisions with evidence, the agency expects
claimants will provide whatever evidence is reasonably available to
corroborate the nature, extent, and value of their losses. If
documentation or substantiating evidence of an injury or damage is not
reasonably available (e.g., it burned in the fire), the Claims Office
may determine that the claimant's statement alone will be sufficient to
substantiate the injury or damage based on the unique circumstances
presented by each case, taking into consideration potential alternative
sources of substantiation and documentation. Paragraph (a) authorizes
the Claims Office to ask claimants to provide affidavits to support the
claim. FEMA is, however, sensitive to privacy concerns of claimants.
Where FEMA believes an affidavit from a close associate of the claimant
will strengthen the claim, the agency may suggest that the claimant
obtain one. FEMA will not automatically reject the claim if the
claimant declines to provide the affidavit. FEMA will consider all
evidence in the record, including an alternative substantiation offered
by the claimant, in making a decision. Paragraph (a) also reminds
claimants that FEMA may require an inspection of real property as part
of the claims process and their establishment of injuries and damages.
FEMA is advising claimants who have suffered business losses that they
may expedite resolution of their claim if they voluntarily provide
copies of their income tax returns. Claimants who decline to submit
their income tax return voluntarily during the claims review process
must sign an affidavit agreeing to produce the returns if requested by
the Department of Homeland Security's Office of the Inspector General
(DHS OIG) or the General Accounting Office (GAO) in the course of an
audit.
    Under paragraph (b), claimants are required to attest to the nature
and extent of each injury of which compensation is sought in the Proof
of Loss. Before the Authorized Official's determination can be issued,
the claimant must sign the Proof of Loss. This Proof of Loss must be
signed under penalty of perjury by the claimant or the claimant's legal
representative in specific circumstances. Paragraph (b) also sets forth
the deadline by which a Proof of Loss must be submitted after a Notice
of Loss and allows discretion for good cause to extend that deadline.
For example, a claimant, through no fault of their own, may not be able
to access needed documentation in time to submit a claim and the
Director of the Claims Office may consider those circumstances as good
cause to extend the deadline. It is in both the claimant's interest and
FEMA's interest that claims be expeditiously resolved. The intent of
the Act is to compensate fire survivors as quickly as possible.
Congress entrusted FEMA with administering an orderly compensation
process. Section 104(d)(1)(A)(i) of the Act states that FEMA must
determine the compensation due to a claimant within 180 days of the
date upon which the Notice of Loss is filed. It is impossible for FEMA
to fulfill this mandate if claimants are unwilling to provide specific
details about their injuries by signing the Proof of Loss. While FEMA
believes that Congress intended for the agency to have the flexibility
to provide claimants with extra time document their injuries in
appropriate cases, nothing in the Act suggests that claimants should be
able to keep their claims open for an extended period of time.
Claimants who submit their Notice of Loss should submit a signed Proof
of Loss to the Claims Office not later than 150 days after the initial
Notice of Loss was submitted. Adherence to this deadline will leave
FEMA with 30 days to determine the compensation due to the claimant and
enable the agency to meet the 180-day timeframe required by Congress.
To provide a claims process that is orderly for all and to meet the
agency's obligation to be good stewards of the Federal funds provided
by Congress for administration of the program, Claimants must comply
with the timeframes for signing a Proof of Loss set forth in this
paragraph. Section 104(d)(1)(A)(i) of the Act assumes that the claimant
will fully cooperate with FEMA in the adjudication of the claim to
ensure a timely determination. FEMA will try to process claims in less
than 180 days but may require the full 180-day period in many cases.
Partial payments are intended to ease the burden on the claimant during
this period.
    There is flexibility built into the process for claimants to tell
FEMA about injuries and damages that they could not have discovered or
did not remember when they signed the Proof of Loss. Sections 296.34
and 296.35 explain this flexibility. If a claimant is not prepared to
sign a Proof of Loss, for good cause, an extension may be requested
from the Director of the Claims Office. Extensions will not be granted
automatically, but only on consideration of the equities in the
request. Alternatively, the claimant may withdraw the claim and re-file
the claim once before November 14, 2024, when the injuries are better
defined. If a claimant does not complete the Proof of Loss within the
timeframes specified in this paragraph or fails to obtain an extension,
the Claims Office may administratively close the claim.
    Paragraph (c) requires claimants who receive compensation to sign
and return a Release and Certification Form, including for partial
payments under section 296.33. The Release and Certification Form must
be received before the Claims Office provides payment on the claim.
FEMA is simplifying the process from the Cerro Grande Fire Assistance
process to eliminate specific timelines and would rather tie the return
of the form to payment. Section 104(e) of the Act provides that at the
end of the process, the United States and all employees, officers, and
agencies of the United States are released from all claims related to
the Fire and the compensation settlement is conclusive for the
claimant. The Act does not bar the United States from recovering
payments made to the claimant after the return of the Release and
Certification Form. The Act was intended to provide a more expeditious
and less adversarial process for compensation than is available under
the Federal Tort Claims Act. Paragraph (c) provides that the United
States will not attempt to recover monies paid to claimants completing
this process, except in the case of fraud or misrepresentation by the
claimant or the claimant's representative, failure of the claimant to
cooperate with an audit as required by section 296.36, or a

material mistake by FEMA. The Act generally obligates FEMA to attempt
to recover payments where there is evidence of civil or criminal fraud,
misrepresentation, presentation of a false claim or where a claimant
was not eligible for a partial payment received pursuant to the
Act.\14\ FEMA may also recover overpayments where the agency made a
material mistake in calculation of the damages owed to the claimant and
in other appropriate cases.
---------------------------------------------------------------------------

    \14\ See Section 104(l), Public Law 117-180, 136 Stat. 2114,
2168.
---------------------------------------------------------------------------

    Paragraph (d) authorizes the Director of the Claims Office to offer
claimants an opportunity to settle or compromise a claim in whole or in
part at any time during the process. This authority allows flexibility
in the process to help claimants recover more efficiently and is
consistent with the Cerro Grande Fire Assistance process.
2. Section 296.31 Reimbursement of Claim Expenses
    Early in the process, claimants should also discuss with the Claims
Reviewer whether FEMA will require an appraisal or other third-party
opinion of value to evaluate a claim. FEMA may order appraisals and
third-party opinions directly or request the claimant to obtain them.
Section 296.31 provides that if FEMA requests the claimant provide an
appraisal or other third-party opinion, FEMA will reimburse the
claimant for the reasonable cost of obtaining it. Paragraph (a)
addresses the circumstances in which FEMA will reimburse a claimant for
reasonable costs of third-party opinions obtained by the claimant. It
provides that FEMA will do so only if the agency requests that the
claimant procure the opinion. It is the claimant's responsibility to
develop and submit whatever evidence they think is appropriate to
support the claim. Claims preparation expenses are not regarded as
compensatory damages under New Mexico law or under the Federal Tort
Claims Act. Similarly, they are not recoverable under the Act. If FEMA
requests that a claimant obtain a third-party opinion and the expert
selected by the claimant believes they must consult with other experts
to render the opinion, the claimant should notify the Claims Reviewer
and provide an estimate of the total cost. FEMA will not reimburse the
claimant for the cost of these other experts unless the Claims Office
has expressly approved their use.
    Compensatory damages for time spent in claims preparation are not
available under New Mexico law or the Federal Tort Claims Act.
Moreover, there is no evidence Congress intended that claimants be
compensated for the value of their time in preparing a claim. Providing
compensation for a claimant's time would be difficult to administer, as
FEMA would have to determine equitably the value of a claimant's time
and to verify that claimants have expended the number of hours that are
claimed. FEMA's payments under the Act are subject to independent audit
by the GAO and the DHS OIG and claimants would likely find attempts by
auditors to verify the payment for hours spent in the claims process
highly intrusive. However, as with the Cerro Grande Fire Assistance
process, FEMA is choosing to exercise discretion to provide a lump sum
payment to claimants for miscellaneous and incidental expenses incurred
in the claims process. Subrogation claimants and claimants whose only
Fire-related loss is the cost of a flood insurance premium are not
eligible for the lump sum payment. FEMA will provide a lump sum payment
of five percent of the insured and uninsured loss (excluding flood
insurance premiums), not to exceed $25,000. The minimum lump sum
payment is $150.\15\ The payment amounts for these miscellaneous and
incidental expenses are based upon the Cerro Grande Fire Assistance
process and have been updated to reflect inflationary increases since
that rule was published.\16\ FEMA believes that paragraph (b)
represents a fair and reasonable accommodation between the agency's
responsibility to spend Federal funds wisely and the desire to
compensate claimants as fully as possible. The lump sum payment under
paragraph (b) will be made after a properly executed Release and
Certification Form is returned to the Claims Office and cannot be
obtained through partial payment.
---------------------------------------------------------------------------

    \15\ The Cerro Grande Fire Assistance regulations at 44 CFR
295.31(b) provided for a lump sum payment of $100 or 5% of the
compensatory damages, not to exceed $15,000.
    \16\ Inflationary adjustments have been made based on the
Consumer Price Index for All Urban Consumers as published by the
U.S. Department of Labor. See generally https://www.bls.gov/data/inflation_calculator.htm.
---------------------------------------------------------------------------

3. Section 296.32 Determination of Compensation Due to Claimant
    Section 296.32 explains how FEMA will evaluate claims. Claims
Reviewers do not have the authority to determine whether a claim is
eligible for compensation or how much compensation will be paid. Their
role is to work with the claimant to obtain relevant evidence, analyze
the evidence, and make a recommendation to an Authorized Official. Each
claim will be assigned to an Authorized Official, and only Authorized
Officials have the authority to decide claims.
    When the Authorized Official has decided a claim, they will send a
written notification to the claimant's address as it appears in the
Claims Office records. The date that appears on this notification
starts a 120-day clock during which a claimant must either accept the
finding or appeal it. The procedure for appealing an Authorized
Official's determination is explained in section 295.41. If the
claimant has not acted at the end of this period, they may forfeit
further rights to an Administrative Appeal. The Director of the Claims
Office may modify the 120-day deadline if good cause exists.
4. Section 296.33 Partial Payments
    This section explains the partial payment process. Section
104(d)(2) of the Act authorizes FEMA to make partial payments at the
request of the claimant. As in the Cerro Grande Fire Assistance
process, the Claims Office may make one or more partial payments to the
claimant if there is a reasonable basis to estimate the claimant's
damages. FEMA believes this section offers sufficient discretion to the
agency to make partial payments of any amount and to expedite payments
where it is appropriate to do so. The amount of a partial payment in
any particular case will depend on the nature of the claim and in some
cases, how well the claim is supported. FEMA encourages claimants who
require expedited payments to discuss the matter with a Claims
Reviewer. FEMA is updating the Cerro Grande Fire Assistance process by
requiring claimants to sign a Release and Certification Form as part of
the partial payment process. This change simplifies the requirement
that the Form be submitted to receive any payment. While the Claims
Office's decision to provide a partial payment cannot be appealed,
acceptance of a partial payment does not affect the claimant's ability
to pursue an appeal, arbitration, or other options under the Act with
respect to any portion of a claim for which a Release and Certification
Form is not executed.
5. Section 296.34 Supplementing Claims
    Section 104(d)(1)(A)(i) of the Act requires FEMA to determine and
fix the amount to be paid for a claim within 180 days after the claim
is submitted. To meet this deadline, FEMA may ask claimants to sign the
Proof of Loss and require that the Authorized Officials render a
definitive determination more expeditiously than some claimants

would prefer. Section 296.34 provides claimants with the flexibility to
make additional claims after submitting a Proof of Loss and before
submission of the Release and Certification Form. Before signing the
Proof of Loss, the claimant may amend the Notice of Loss to seek
compensation for injuries not referenced in the Notice of Loss.
claimants who wish to amend the Notice of Loss should contact the
Claims Reviewer. The additional injuries will be noted on the Proof of
Loss and will be adjudicated in the Authorized Official's
determination. Once the claimant has signed the Proof of Loss, they may
request permission from the Director of the Claims Office to amend the
Notice of Loss for consideration of one or more injuries not addressed
in the Proof of Loss. The claimant should consult with the Claims
Reviewer about the procedure for obtaining permission of the Director
of the Claims Office. The Director of the Claims Office will grant the
request if it is supported by good cause. If the request is granted,
the Director will determine whether compensation is due for the
additional injury under the Administrative Appeal procedures described
in subpart E of part 296. The additional injury will not be considered
until after the Authorized Official's determination is issued on the
remainder of the claim. If the claimant decides to appeal the
Authorized Official's determination on other injuries, the Director of
the Claims Office will decide both matters in a single appeal
proceeding. Claimants are reminded that they must put the Claims Office
on notice of any injury not mentioned in the initial Notice of Loss not
later than the deadline for filing an Administrative Appeal under
section 296.41 or November 14, 2024, whichever is earlier. A written
request for permission to amend a Notice of Loss after the Proof of
Loss is signed must be on file with the Director of the Claims Office
no later than the deadline for filing an Administrative Appeal under
section 296.41 or November 14, 2024, whichever is earlier.
6. Section 296.35 Reopening a Claim
    Section 296.35 provides for reopening a claim after the claimant
has submitted a Release and Certification Form again with the goal to
allow claimants an opportunity to request damages in excess of those
previously awarded. In appropriate cases, the claimant can use the
reopening provision of this section to seek compensation for an injury
not previously reported to FEMA. Specifically, claimants may request to
reopen if, not later than November 14, 2025, the claimant desires
heightened risk reduction compensation under section 296.21(e)(5); the
claimant closed the sale of a home and wishes to present a claim for a
decrease in the value of the real property under section 296.21(c)(3);
or the claimant has incurred additional losses under section
296.21(c)(1) as part of a reconstruction in excess of those previously
awarded. Requests to reopen for good cause will only be granted in the
Director's discretion. The Director's decision to reopen or not reopen
a claim is not subject to review under the arbitration provisions of
Subpart E of this part. Reopened claims will not be decided by the
Director of the Claims Office but by an Authorized Official, after
considering the recommendation of the Claims Reviewer. Claimants who
are dissatisfied with the Authorized Official's determination on the
reopened claim may appeal to the Director of the Claims Office pursuant
to subpart E of part 296.
7. Section 296.36 Access to Records
    Claimants are required to grant the DHS OIG and the Comptroller
General of the United States access to the subject property and to
records and information in their control that are relevant to their
claims for purposes of audit and investigation. These records include,
but are not limited to, any relevant tax records. The Act requires that
the GAO, a legislative branch agency, audit claims and payments made
under the Act. The DHS OIG is responsible for investigating charges of
fraud and abuse and auditing FEMA's programs.
8. Section 296.37 Confidentiality of Information
    The Privacy Act protects the confidentiality of information
provided by individual claimants. This information may only be
disclosed with the consent of the claimant or pursuant to a routine
use, which has been disclosed to the public. Confidential, proprietary,
and trade secret information provided by entities, such as business,
Indian Tribes, Tribal entities, and government agencies, are not
eligible for Privacy Act protection, but may be exempt from disclosure
under the Freedom of Information Act. Non-individual claimants are
encouraged to discuss the need to protect confidential information from
disclosure with FEMA before the information is submitted. FEMA may not
be able to prevent the disclosure of this information without awareness
of its confidential nature.

E. Subpart E--Dispute Resolution

    Subpart E discusses a claimant's rights if they disagree with
FEMA's evaluation of the claim.
1. Section 296.40 Scope
    Claimants are afforded a right to appeal the initial determination
to the Director of the Claims Office. This is referred to as an
Administrative Appeal. If the claimant is dissatisfied with the
Administrative Appeal decision, they may put the matter to binding
arbitration or seek judicial review in federal court.
2. Section 296.41 Administrative Appeal
    Section 296.41 describes the Administrative Appeal process.
Consistent with the Cerro Grande Fire Assistance process, claimants
disagreeing with the conclusions of FEMA's Authorized Official under
section 296.32 must pursue an Administrative Appeal before initiating
arbitration or seeking judicial review in federal court. An
Administrative Appeal decision constitutes the final decision of the
Director of the Claims Office. Pursuant to paragraph (a), a written
request for an Administrative Appeal must be postmarked or
electronically stamped within 120 days after the date of the Authorized
Official's determination.
    FEMA requests that claimants provide the Claims Reviewer with all
relevant evidence supporting the claim. The goal of the process is to
render equitable compensation decisions the first time, not to
encourage Administrative Appeals or further proceedings. However,
paragraphs (c) and (d) allow for the claimant to submit supplemental
filings and to present any relevant factual evidence concerning the
issues under appeal, even if it was not presented earlier in the
process to ensure claimants are fully heard. Claimants who wish to
raise new claims or damage theories after submitting a Proof of Loss
should ask the Director of the Claims Office to supplement their claim
under section 296.34 of this part.
    Under section 296.41, the Director of the Claims Office may request
additional information, may schedule a conference, or may convene a
hearing under paragraphs (e), (f), and (g) respectively. To ensure
effective, efficient resolution of claims, FEMA is updating the process
to allow claimants to request a mediator to facilitate a conference
during the Administrative Appeal. This allows claimants to request a
facilitator earlier in the process as part of the Administrative

Appeal at a conference in paragraph (f) instead of at the later
arbitration stage of the process. FEMA believes this change will
resolve claims faster consistent with the Act's purpose to
expeditiously consider and settle claims. FEMA seeks comment on this
update. Following the Administrative Appeal decision, if the claimant
does not initiate arbitration or seek judicial review in the prescribed
timelines, their concurrence with the decision will be conclusively
presumed under paragraph (i). If the claimant concurs with the
Director's decision, any additional damages will be paid upon receipt
of a properly executed Release and Certification Form.
3. Sections 296.42 Arbitration
    Section 104(h)(3)(A) of the Act requires FEMA establish procedures
under which a dispute regarding a claim may be settled by arbitration.
Section 296.42 establishes these procedures. Consistent with the Cerro
Grande Fire Assistance arbitration process, any issue decided in an
Administrative Appeal may be referred to binding arbitration. Paragraph
(a) requires the written request for arbitration be electronically
stamped or postmarked no later than 60 days after the Administrative
Appeal decision date. FEMA is updating the process to allow for
electronic submission of arbitration requests and seeks comment on this
update. Evidence not previously entered into the Administrative Record
will not be considered during arbitration under paragraph (b). A
claimant cannot arbitrate an issue unless it was raised and decided in
the Administrative Appeal.
    As explained above, FEMA is updating the process to allow claimants
to request a mediator to facilitate a conference during the
Administrative Appeal in 296.41(f). FEMA believes this change will
resolve claims faster consistent with the Act's purpose to
expeditiously consider and settle claims. FEMA seeks comment on this
update.
    Based on FEMA's experience with the arbitration process for the
Cerro Grande Fire Assistance, the agency is updating paragraph (c)
regarding arbitrator selection. Specifically, FEMA is changing the
arbitrator selection process to a random drawing from a list of
qualified arbitrators who have agreed to serve, rather than allowing
the claimant to select an arbitrator from such a list for claims at or
below a certain amount. This change would improve efficiency in the
process and would not result in any inequity to claimants, as the
selection would be from a random drawing. FEMA believes this change
will result in a faster assignment of arbitrator to resolve the claim
more efficiently consistent with the Act's goal to expeditiously
consider and settle claims for injuries resulting from the Fire. FEMA
seeks comment on this process. FEMA is also increasing the thresholds
associated with the assignment of either one arbitrator or a panel of
three arbitrators to reflect inflationary increases since the Cerro
Grande regulation was published.\17\ Amounts in dispute of $500,000 or
less will be decided by one arbitrator while a panel of three
arbitrators will decide amounts in dispute exceeding $500,000.\18\ FEMA
seeks comment on the increased thresholds.
---------------------------------------------------------------------------

    \17\ Inflationary adjustments have been made based on the
Consumer Price Index for All Urban Consumers as published by the
U.S. Department of Labor. See generally https://www.bls.gov/data/inflation_calculator.htm.
    \18\ The Cerro Grande Fire Assistance regulations at 44 CFR
295.42(d) set the threshold at $300,000.
---------------------------------------------------------------------------

    In paragraph (d), FEMA seeks to modernize the arbitration process
by generally offering virtual arbitration hearings to promote
efficiency in the process. Additionally, given the scope of the Fire,
FEMA is not providing a specific location for any in-person hearing,
but rather allowing the Arbitration Administrator the flexibility to
select a location in New Mexico for those limited circumstances in
which an in-person hearing is held. Decisions will be in writing and
provided to the Arbitration Administrator, the claimant, and the
Director of the Claims Office under paragraph (e). FEMA seeks comment
on these provisions.
    Consistent with the Cerro Grande Fire Assistance process, decisions
will be rendered no later than 10 days after a hearing is concluded,
although the Arbitration Administrator may extend the decision timeline
with notice to both the claimant and the Director of the Claims Office.
Written arbitration decisions will establish the compensation due to a
claimant, if any, and the corresponding rationale. Consistent with the
Cerro Grande Fire Assistance arbitration process, the Arbitration
Administrator will forward a Release and Certification Form to the
claimant with the written decision. Any additional compensation that is
awarded as a result of the arbitration will be paid after the signed
Release and Certification Form is received.
    Paragraphs (f) and (g) are generally consistent with the Cerro
Grande Fire Assistance process. If additional compensation is awarded
at arbitration, the Arbitration Administrator will forward the decision
to the claimant with a Release and Certification Form. Such
compensation will be paid to the claimant after the signed Form is
received by the Arbitration Administrator. FEMA reiterates in paragraph
(g) that arbitration decisions are not subject to any further appeal or
review and are binding on the claimant and on FEMA. Paragraph (i)
includes a provision that while the Arbitration Administrator will pay
all fees and expenses of the arbitrator or arbitrators assigned,
claimants are responsible for any expenses they incur as a result of
the arbitration, including travel costs. This update to the Cerro
Grande Fire Assistance process ensures fairness by eliminating the
provision to allow the parties to jointly agree to pay such fees. FEMA
seeks comment on this provision.
4. Section 296.43 Judicial Review
    Section 296.43 discusses judicial review of the Administrative
Appeal decision, which remains consistent with the Cerro Grande Fire
Assistance process and the provisions of the Act. Claimants may seek
judicial review in lieu of arbitration if dissatisfied with the outcome
of the Administrative Appeal decision. The suit must be filed in the
United States District Court for the District of New Mexico within 60
days of a final decision of the Administrator under the Act. Only
evidence in the administrative record will be considered by the court.
Claimants should be aware that section 104(i)(3) of the Act requires
that the court uphold the Administrative Appeals decision if it is
supported by substantial evidence on the record considered as a whole.

IV. Regulatory Analysis

A. Administrative Procedure Act (APA)

    For the reasons that follow, FEMA is issuing this rule as an
interim final rule pursuant to statutory authority under the Act.
Specifically, section 104(f)(1) requires FEMA to publish ``interim
final regulations for the processing and payment of claims under this
Act.'' Further, these regulations must be published ``not later than 45
days after the date of enactment.'' Given Congress' specific authority
to issue an interim final rule, the agency is proceeding without
advance notice and comment as required under the APA. See 5 U.S.C.
553(b) and (c).
    The APA also provides an exception to prior notice and comment for
rules of agency organization, procedures, or practice. 5 U.S.C.
553(b)(A). This interim final rule implements the Hermit's Peak/Calf
Canyon Fire Assistance Act by detailing how FEMA will process and pay
claims under the Act. The majority of the provisions in

this interim final rule are procedural because they create the
procedural framework through which FEMA is able to efficiently
implement a claims process to compensate victims of the Fire. The rule
details how a claimant may seek compensation through a claims process
with the Office of Hermit's Peak/Calf Canyon Fire Claims (``Claims
Office'') from initiating a claim with a Notice of Loss through appeal
and arbitration or judicial review of an Authorized Official's
determination of the claim. This interim final rule provides the
voluntary process by which an Injured Party may file a claim under the
Act. Injured Persons may seek compensation through the Federal Tort
Claims Act or a civil action in lieu of filing a claim under the Act.
This interim final rule sets out the agency's procedure for how to
voluntarily file a claim. Since this rule is procedural in nature, it
is excepted from the notice and comment requirements under 5 U.S.C.
553(b)(A).
    Consistent with Congress' direction in section 104(f)(1) of the Act
that FEMA publish ``interim final regulations for the processing and
payment of claims under [the] Act,'' good cause exists pursuant to 5
U.S.C. 553(b)(B) as it would be impracticable and contrary to the
public interest to require notice and comment rulemaking in this
instance. Potential claimants are currently without (and awaiting)
compensation for injuries they suffered due to a massive wildfire. They
need to rebuild as soon as possible to regain normalcy, reduce erosion,
and restore land health.\19\ The sooner the federal government can
compensate them, the sooner they can begin the process of rebuilding
and recovery. And so FEMA must establish the relevant regulatory
framework without delay, so as to be able to respond expeditiously and
without unnecessary confusion regarding the applicable procedures for
claimants under the Act. Section 102(b)(2) lists as one of the two
purposes of the Act to ``provide for the expeditious consideration and
settlement of claims'' for the injuries suffered as a result of the
Fire. The Fire constitutes the largest wildfire in New Mexico
history.\20\ Over 340,000 acres of forest burned during the Fire and
over half of the land impacted by the Fire consisted of privately-owned
land, with just under 200,000 total acres burned.\21\ At least 160
homes and a total of over 900 structures were destroyed during the
Fire.\22\ Despite containment, the impact of the Fire continues to be
felt in the impacted areas, causing flooding and setting off a drinking
water crisis.\23\ The higher burn severity of soil on private lands
increases the likelihood of flooding and mudslide impacts on those
areas. Residents in the areas of the Fire have already suffered
significant damage from flooding, including washed out roads and
buildings, drowned pastures, and burned debris moved downstream.\24\ In
addition, as noted above, Congress explicitly mandated in section
104(f)(1) of the Act that FEMA promulgate these regulations
expeditiously as interim final regulations, a factor that supports a
finding of ``good cause.'' Pursuant to section 104(f)(1) of the Act,
consistent with 5 U.S.C. 553(b)(B), and for the reasons stated above,
FEMA therefore will dispense with prior public notice and the
opportunity to comment on this rule before finalizing this rule and to
make this interim final rule effective immediately upon publication.
---------------------------------------------------------------------------

    \19\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
    \20\ See Bryan Pietsch and Jason Samenow, ``New Mexico blaze is
now largest wildfire in state history,'' The Washington Post, May
17, 2022 found at https://www.washingtonpost.come/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/ (last accessed Sept. 15,
2022).
    \21\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
    \22\ Id.
    \23\ See Jordan Honeycutt, ``Rain brings flash flooding to
Hermits Peak Calf Canyon burn scar,'' KRQE, July 13, 2022 found at
https://www.krqe.com/news/new-mexico/rain-brings-flash-flooding-to-hermits-peak-calf-canyon-burn-scar/ (last accessed Sept. 27, 2022),
and Simon Romero, ``How New Mexico's Largest Wildfire Set Off a
Drinking Water Crisis,'' The New York Times, Sept. 26, 2022 found at
https://www.nytimes.com/2022/09/26/us/new-mexico-las-vegas-fire-water.html (last accessed Sept. 27, 2022).
    \24\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022
found at https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653 (last accessed Sept. 27, 2022).
---------------------------------------------------------------------------

    Based on the discussion above, FEMA further finds there is good
cause, under 5 U.S.C. 553(d)(3), not to require a 30-day delayed
effective date for this rulemaking because delaying implementation of
the rule by 30 days is contrary to the goal of the statutory
requirement to issue an interim final rule within 45 days after the
Act's enactment, and delay would further negatively impact claimants
seeking compensation through the Act. While FEMA believes the agency
has the statutory authority pursuant to section 104(f)(1) of the Act
and 5 U.S.C. 553 (b)(A), 553(b)(B), and 553(d)(3) to issue the rule
without advance notice and comment and with an immediate effective
date, FEMA is interested in the views of the public and requests
comment on all aspects of the interim final rule.

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

    Executive Order 12866 (Regulatory Planning and Review) and
Executive Order 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 rule has been
designated a ``significant regulatory action'' that is economically
significant, under section 3(f)(1) of Executive Order 12866.
Accordingly, the rule has been reviewed by the Office of Management and
Budget.
    In this rule, FEMA is establishing the process by which claimants
who were injured as a result of the Fire may apply for compensation
under the Act. Affected State, local, and Tribal governments, private
sector businesses, not-for-profit organizations, and individuals and
households will be eligible to apply for compensation. This rule will
result in costs to claimants for time to apply for and substantiate a
claim, and for FEMA to process and adjudicate claims. Claimants will
submit a Notice of Loss to FEMA, meet with a FEMA Claims Reviewer,
obtain the documentation needed to substantiate claims, sign a Proof of
Loss, and complete and return a Release and Certification Form.
Additionally, affected insurance companies can submit a subrogation
notice of loss for possible compensation under the Act. Claimants who
disagree with FEMA's evaluation of the claim may also incur costs to
appeal the determination. FEMA estimates over 57,000 claimants will
seek compensation under the Act, totaling between 1.3 and 1.6 million
burden hours over the two-year period,

depending on if all applicants submit all forms.\25\
---------------------------------------------------------------------------

    \25\ Not all Claimants will submit a Mitigation Assistance or a
Subrogation Notice and Proof of Loss Form. FEMA estimates that
57,450 applicants will incur between 22.75 and 27.75 burden hours,
depending on the Forms they submit.
---------------------------------------------------------------------------

    The rule will result in additional transfer payments from FEMA to
victims for the settlement of claims for injuries resulting from the
Fire. Injuries may include property, business and/or financial losses.
Congress appropriated $2.5 billion to provide for the expeditious
consideration and settlement of these claims.\26\ The maximum total
economic impact of this rule, therefore, is $2.5 billion (assuming that
all funds awarded will be expended). These funds are for the settlement
of actual compensatory damages measured by injuries suffered, FEMA's
administration of the program, and DHS OIG oversight.\27\ However,
without knowing the dollar amount of claims that will be filed for
these injuries, it is impossible to predict the amount of the economic
impact of this rule with any precision.
---------------------------------------------------------------------------

    \26\ Division A of Public Law 117-180, 136 Stat. 2144 (2022).
    \27\ Id.
---------------------------------------------------------------------------

    The Act requires claims must be submitted no later than two years
after publication of this interim final rule or November 14, 2024.\28\
The Act requires that FEMA determine and fix the amount to be paid for
a claim within 180 days after a claim is submitted.\29\ Although the
impact of the rule could be spread over multiple years as claims are
received, processed, and paid, the total economic effects of a specific
payment would only occur once, rather than annually.
---------------------------------------------------------------------------

    \28\ Id.
    \29\ Division G of Public Law 117-180, 136 Stat. 2114 (2022).
---------------------------------------------------------------------------

    This rule will provide distributional benefits to victims of the
Fire. FEMA has provided immediate assistance under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act to those eligible
for public and individual assistance pursuant to the President's
declaration of a major disaster on May 4, 2022. The additional
compensation from the Act will more fully compensate victims and allow
affected State, local and Tribal governments, businesses,
organizations, and individuals to rebuild.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)) applies only
to rules for which an agency publishes a general notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, FEMA
is not issuing a notice of proposed rulemaking. Accordingly, the RFA's
requirements do not apply.

D. Unfunded Mandates Reform Act of 1995

    FEMA has not issued a notice of proposed rulemaking for this
regulatory action; therefore, the written statement provisions of the
Unfunded Mandates Reform Act of 1995, as amended, do not apply to this
regulatory action.

E. Paperwork Reduction Act of 1995

    This rule contains information collections necessary to support
FEMA's implementation of the Act. The Notice of Loss and Proof of Loss
forms are a new collection (OMB Control Number 1660-NW162) submitted
under OMB's emergency clearance procedures to allow FEMA to begin
accepting claims immediately after publication of this interim final
rule. Additionally, FEMA will seek public comments on the collection
through the normal clearance process.

F. Privacy Act

    Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must
determine whether implementation of a regulation will result in a
system of records. A ``record'' is any item, collection, or grouping of
information about an individual that is maintained by an agency,
including, but not limited to, his/her education, financial
transactions, medical history, and criminal or employment history and
that contains his/her name, or the identifying number, symbol, or other
identifying particular assigned to the individual, such as a finger or
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A ``system of
records'' is a group of records under the control of an agency from
which information is retrieved by the name of the individual or by some
identifying number, symbol, or other identifying particular assigned to
the individual. An agency cannot disclose any record which is contained
in a system of records except by following specific procedures.
    In accordance with DHS policy, FEMA has completed a Privacy
Threshold Analysis (PTA) for this rule. DHS has determined that this
rulemaking does not affect the 1660-NW162 OMB Control Number's
compliance with the E-Government Act of 2002 or the Privacy Act of
1974, as amended. Specifically, DHS has concluded that the 1660-NW162
OMB Control Number is covered by the DHS/FEMA/PIA-044 National Fire
Incident Reporting Systems (NFIRS) Privacy Impact Assessment (PIA) and
the DHS/FEMA/PIA-049 Individual Assistance (IA) Program PIA.
Additionally, DHS has decided that the 1660-NW162 OMB Control Number is
covered by DHS/FEMA-008 Disaster Recovery Assistance Files, 87 FR 7852
(Feb. 10, 2022), DHS/ALL-004 General Information Technology Access
Account Records System, 77 FR 70792 (Nov. 27, 2012), and DHS/ALL-013
Department of Homeland Security Claims Records, 73 FR 63987 (Oct. 28,
2008) System of Records Notices (SORNs).

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

    Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments,'' 65 FR 67249, November 9, 2000, applies to agency
regulations that have Tribal implications, that is, regulations that
have substantial direct effects on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes. Under this Executive Order, to the extent
practicable and permitted by law, no agency shall promulgate any
regulation that has Tribal implications, that imposes substantial
direct compliance costs on Indian Tribal governments, and that is not
required by statute, unless funds necessary to pay the direct costs
incurred by the Indian Tribal government or the Tribe in complying with
the regulation are provided by the Federal Government, or the agency
consults with Tribal officials.
    FEMA has reviewed this interim final rule under Executive Order
13175 and has determined that this interim final rule may have a
substantial direct effect on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes. FEMA will enter into consultation with
the Indian Tribes that have been impacted by the Fire and whose Tribal
entities or Tribal members have been impacted by the Fire during the
public comment period of this rulemaking.

H. Executive Order 13132, Federalism

    Executive Order 13132, ``Federalism,'' 64 FR 43255, August 10,
1999, sets forth principles and criteria that agencies must adhere to
in formulating and implementing policies that have federalism
implications, that is, regulations that have ``substantial direct
effects on the States, on the relationship

between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government.''
Federal agencies must closely examine the statutory authority
supporting any action that would limit the policymaking discretion of
the States, and to the extent practicable, must consult with State and
local officials before implementing any such action.
    FEMA has determined that this rulemaking does not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, and
therefore does not have federalism implications as defined by the
Executive Order. FEMA, however, seeks comment on this determination
from any States that have been impacted by the Fire and who seek
assistance pursuant to the Act.

I. National Environmental Policy Act of 1969 (NEPA)

    Under the National Environmental Policy Act of 1969 (NEPA), as
amended, 42 U.S.C. 4321 et seq., an agency must prepare an
environmental assessment or environmental impact statement for any
rulemaking that significantly affects the quality of the human
environment. FEMA has determined that this rulemaking does not
significantly affect the quality of the human environment and
consequently has not prepared an environmental assessment or
environmental impact statement.
    Rulemaking is a major Federal action subject to NEPA. Categorical
exclusion A3 included in the list of exclusion categories at Department
of Homeland Security Instruction Manual 023-01-001-01, Revision 01,
Implementation of the National Environmental Policy Act, Appendix A,
issued November 6, 2014, covers the promulgation of rules, issuance of
rulings or interpretations, and the development and publication of
policies, orders, directives, notices, procedures, manuals, and
advisory circulars if they meet certain criteria provided in A3(a)-(f).
This interim final rule meets Categorical Exclusion A3(a), ``[t]hose of
a strictly administrative or procedural nature,'' and A3(b), ``[t]hose
that implement, without substantive change, statutory or regulatory
requirements.'' FEMA has determined that there are no extraordinary
circumstances that prevent the use of this categorical exclusion for
this rulemaking action.

J. Executive Order 12898 Environmental Justice

    Under Executive Order 12898, ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations,'' 59 FR 7629 (Feb. 16, 1994), as amended by Executive
Order 12948, 60 FR 6381, (Feb. 1, 1995), FEMA incorporates
environmental justice into its policies and programs. The Executive
Order requires each Federal agency to conduct its programs, policies,
and activities that substantially affect human health or the
environment in a manner that ensures that those programs, policies, and
activities do not have the effect of excluding persons from
participation in programs, denying persons the benefits of programs, or
subjecting persons to discrimination because of race, color, or
national origin.
    This rulemaking would not have a disproportionately high or adverse
effect on human health or the environment, nor would it exclude persons
from participation in FEMA programs, deny persons the benefits of FEMA
programs, or subject persons to discrimination because of race, color,
or national origin.

K. Congressional Review of Agency Rulemaking

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5
U.S.C. 801-808, before a rule can take effect, the Federal agency
promulgating the rule must: submit to Congress and to the Government
Accountability Office (GAO) a copy of the rule; a concise general
statement relating to the rule, including whether it is a major rule;
the proposed effective date of the rule; a copy of any cost-benefit
analysis; descriptions of the agency's actions under the Regulatory
Flexibility Act and the Unfunded Mandates Reform Act; and any other
information or statements required by relevant executive orders.
    FEMA has submitted this rule to the Congress and to GAO pursuant to
the CRA. The Office of Management and Budget has determined that this
rule is ``economically significant,'' but FEMA believes this rule is
not a ``major rule'' within the meaning of the CRA. FEMA believes this
interim final rule is not subject to the additional review requirements
under the CRA given the statutory mandate to issue this interim final
rule within 45 days of the Act's enactment under section 104(f) of the
Act. This interim final rule is a procedural rule and does not confer
any substantive rights, benefits, or obligations but rather only sets
out the agency's procedure for how to voluntarily file a claim under
the Act. As such, this interim final rule is a ``rule of agency
organization, procedure, or practice that does not substantially affect
the rights or obligation of non-agency parties'' pursuant to 5 U.S.C.
804(3)(C). Finally, even if this interim final rule is considered a
``rule'' under the CRA, FEMA finds there is good cause to dispense with
notice and public comment under 5 U.S.C. 808(2). Notice and public
comment are impracticable and contrary to public interest given the
Act's requirement for the agency to publish an interim final rule
within 45 days of enactment and the Act's purpose to provide
expeditious consideration and settlement of claims for victims of the
Fire as explained above. Therefore, there is no delay in its effective
date under the CRA.

List of Subjects in 44 CFR Part 296

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

    For the reasons discussed in the preamble, the Federal Emergency
Management Agency (FEMA) amends subchapter E of title 44 of the Code of
Federal Regulations by revising the subchapter heading and adding part
296 to read as follows:

SUBCHAPTER E--FIRE ASSISTANCE

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

Sec.
Subpart A--General
296.1 Purpose of this part.
296.2 Policy.
296.3 Information and assistance.
296.4 Definitions.
296.5 Overview of the claims process.
296.6-296.9 [Reserved]
Subpart B--Bringing a Claim Under the Hermit's Peak/Calf Canyon Fire
Assistance Act
296.10 Filing a claim under the Hermit's Peak/Calf Canyon Fire
Assistance Act.
296.11 Deadline for notifying FEMA of injuries.
296.12 Election of remedies.
296.13 Subrogation.
296.14 Assignments.
296.15-296.19 [Reserved]
Subpart C--Compensation Available Under the Hermit's Peak/Calf Canyon
Fire Assistance Act
296.20 Prerequisite to compensation.
296.21 Allowable damages.
296.22-296.29 [Reserved]

Subpart D--Claims Evaluation
296.30 Establishing injuries and damages.
296.31 Reimbursement of claim expenses.
296.32 Determination of compensation due to claimant.
296.33 Partial payments.
296.34 Supplementing claims.
296.35 Reopening a claim.
296.36 Access to records.
296.37 Confidentiality of information.
296.38-296.39 [Reserved]
Subpart E--Dispute Resolution
296.40 Scope.
296.41 Administrative appeal.
296.42 Arbitration.
296.43 Judicial review.

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

Subpart A--General

Sec.  296.1   Purpose.

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

Sec.  296.2   Policy.

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

Sec.  296.3   Information and assistance.

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

Sec.  296.4   Definitions.

    Administrative Appeal means an appeal of the Authorized Official's
Determination to the Director of the Claims Office in accordance with
the provisions of Subpart E of this part.
    Administrative Record means all information submitted by the
claimant and all information collected by FEMA concerning the claim,
which is used to evaluate the claim and to formulate the Authorized
Official's Determination. It also means all information that is
submitted by the claimant or FEMA in an Administrative Appeal and the
decision of the Administrative Appeal. It excludes the opinions,
memoranda and work papers of FEMA attorneys and drafts of documents
prepared by Claims Office personnel and contractors.
    Administrator means the Administrator of the Federal Emergency
Management Agency.
    Arbitration Administrator means the FEMA official responsible for
administering arbitration procedures to resolve disputes regarding a
claim. Contact information for the Arbitration Administrator can be
found online at http://www.fema.gov/hermits-peak.
    Authorized Official means an employee of the United States who is
delegated with authority by the Director of the Claims Office to render
binding determinations on claims and to determine compensation due to
claimants under the Act.
    Authorized Official's Determination means a report signed by an
Authorized Official and mailed to the claimant evaluating each element
of the claim as stated in the Proof of Loss and determining the
compensation, if any, due to the claimant.
    Claimant means a person who has filed a Notice of Loss under the
Act.
    Claims Office means the Office of Hermit's Peak/Calf Canyon Fire
Claims.
    Claims Reviewer means an employee of the United States or a Claims
Office contractor or subcontractor who is authorized by the Director of
the Claims Office to review and evaluate claims submitted under the
Act.
    Days means calendar days, including weekends and holidays.
    Director means an Independent Claims Manager appointed by the
Administrator who will serve as the Director of the Claims Office.
    Good Cause, for purposes of extending the deadline for filing,
supplementing a claim, or reopening a claim includes, but is not
limited to: instances where a claimant, through no fault of their own,
may not be able to access needed documentation in time to submit a
claim or transmit relevant information or data; or where damage is
found after a claim has been submitted; or other instances in which the
Director of the Claims Office, in their discretion, determines that an
undue hardship or change in circumstances on the claimant warrants an
extension of a deadline or the supplementation or reopening of existing
claims.
    Hermit's Peak/Calf Canyon Fire means
    (1) The fire resulting from the initiation by the U.S. Forest
Service of a prescribed burn in the Santa Fe National Forest in San
Miguel County, New Mexico on April 6, 2022;
    (2) The pile burn holdover resulting from the prescribed burn by
the U.S. Forest Services which reemerged on April 19, 2022; and
    (3) The merger of the two fires described in paragraphs (1) and (2)
of this definition, reported as the Hermit's Peak Fire or the Hermit's
Peak Fire/Calf Canyon Fire.
    Household means a group of people, related or unrelated, who live
together on a continuous basis and does not include members of an
extended family who do not regularly and continuously cohabit.
    Household Including Tribal Members means a Household that existed
on April 6, 2022, which included one or more Tribal Members as
continuous residents.
    Indian Tribe means the recognized governing body of any Indian or
Alaska Native Tribe, band, nation, pueblo, village, community,
component band, or components reservation individually identified
(including parenthetically) in the list published most recently as of
September 30, 2022, pursuant to section 104 of the Federally Recognized
Indian Tribe List Act of 1994.
    Individual Assistance means the FEMA program established under
Subchapter IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides
assistance to individuals and families adversely affected by a major
disaster or an emergency.
    Injured Person means an individual, regardless of citizenship or
alien status; or an Indian Tribe, Tribal corporation, corporation,
partnership, company, association, county, township, city, State,
school district, or other non-Federal entity that suffered injury
resulting from the Hermit's Peak/Calf Canyon Fire. The term Injured
Person includes an Indian Tribe with respect to any claim relating to
property or natural resources held in trust for the Indian Tribe by the
United States. Lenders holding mortgages or security interests on
property affected by the Hermit's Peak/Calf Canyon Fire and lien
holders are not an ``Injured Person'' for purposes of the Act.
    Injury means ``injury or loss of property, or personal injury or
death,'' as used in the Federal Tort Claims Act, 28 U.S.C. 1346(b)(1).
    Notice of Loss means a form supplied by the Claims Office through
which an Injured Person or Subrogee makes a claim for possible
compensation under the Act.
    Proof of Loss means a statement attesting to the nature and extent
of the claimant's injuries.
    Public Assistance Program means the FEMA program established under

Subchapter IV of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, as amended, 42 U.S.C. 5121, et seq., which provides
grants to States, local governments, Indian Tribes and private
nonprofit organizations for emergency measures and repair, restoration,
and replacement of damaged facilities.
    Release and Certification Form means a document in the manner
prescribed by section 104(e) of the Act that all claimants who have
received or are awarded compensatory damages under the Act must execute
and return to the Claims Office as required by Sec.  296.30(c).
    Subsistence Resources means food and other items obtained through
hunting, fishing, firewood gathering, timbering, grazing or
agricultural activities undertaken by the claimant without financial
remuneration, on land damaged by the Hermit's Peak/Calf Canyon Fire.
    Subrogee means an insurer or other third party that has paid to a
claimant compensation for Injury and is subrogated to any right that
the claimant has to receive payment under the Act.
    Tribal Member means an enrolled member of an Indian Tribe.

Sec.  296.5   Overview of the claims process.

    (a) The Act is intended to provide persons who suffered Injury from
the Hermit's Peak/Calf Canyon Fire with a simple, expedited process to
seek compensation from the United States. This section provides a brief
explanation of the claims process for claims other than subrogation
claims. It is not intended to supersede the more specific regulations
that follow and explain the claims process in greater detail. To obtain
compensation under the Act, an Injured Person must submit all Hermit's
Peak/Calf Canyon Fire related claims against the United States or any
employee, officer, or agency of the United States to the FEMA Claims
Office. An Injured Person who elects to accept an award under the Act
is barred from accepting an award pursuant to a claim under the Federal
Tort Claims Act or a civil action against the United States or any
employee, officer, or agency of the United States arising out of or
relating to the same subject matter. Judicial review of FEMA decisions
under the Act is available.
    (b) The first step in the process is to file a Notice of Loss with
the Claims Office. The Claims Office will provide the claimant with a
written acknowledgement that the claim has been filed and a claim
number.
    (c) Shortly thereafter, a Claims Reviewer will contact the claimant
to review the claim. Claims Reviewer will help the claimant formulate a
strategy for obtaining any necessary documentation or other support.
This assistance does not relieve the claimant of their responsibility
for establishing all elements of the injuries and the compensatory
damages that are sought, including that the Hermit's Peak/Calf Canyon
Fire caused the injuries. After the claimant has had an opportunity to
discuss the claim with the Claims Reviewer, a Proof of Loss will be
presented to the claimant for signature. After any necessary
documentation has been obtained and the claim has been fully evaluated,
the Claims Reviewer will submit a report to the Authorized Official.
The Claims Reviewer is responsible for providing an objective
evaluation of the claim to the Authorized Official.
    (d) The Authorized Official will review the report and determine
whether compensation is due to the claimant. The claimant will be
notified in writing of the Authorized Official's determination. If the
claimant is satisfied with the decision, payment will be made after the
claimant returns a completed Release and Certification Form. If the
claimant is dissatisfied with the Authorized Official's determination,
an administrative appeal may be filed with the Director of the Claims
Office. If the claimant remains dissatisfied after the appeal is
decided, the dispute may be resolved through binding arbitration or
heard in the United States District Court for the District of New
Mexico.

Subpart B--Bringing a Claim Under the Hermit's Peak/Calf Canyon
Fire Assistance Act

Sec.  296.10   Filing a claim under the Hermit's Peak/Calf Canyon Fire
Assistance Act.

    (a) Any Injured Person may bring a claim under the Act by filing a
Notice of Loss. A claim submitted on any form other than a Notice of
Loss will not be accepted. The claimant must provide a brief
description of each injury on the Notice of Loss.
    (b) A single Notice of Loss may be submitted on behalf of a
household containing Injured Persons provided that all Injured Persons
on whose behalf the claim is presented are identified.
    (c) The Notice of Loss must be signed by each claimant, if the
claimant is an individual, or by a duly authorized legal representative
of each claimant, if the claimant is an entity or an individual who
lacks the legal capacity to sign the Notice of Loss. If one is signing
a Notice of Loss as the legal representative of a claimant, the signer
must disclose their relationship to the claimant. FEMA may require a
legal representative to submit evidence of their authority to act.
    (d) The Claims Office will provide Notice of Loss forms through the
mail, electronically, in person at the Claims Office or by telephone
request. The Notice of Loss form can also be downloaded from the
internet at http://www.fema.gov/hermits-peak.
    (e) A Notice of Loss may be filed with the Claims Office by mail,
electronically, or in person. Details regarding the filing process can
be found at http://www.fema.gov/hermits-peak.
    (f) A Notice of Loss that is completed and properly signed is
deemed to be filed on the date it is received and acknowledged by the
Claims Office.

Sec.  296.11   Deadline for notifying FEMA of injuries.

    The deadline for filing a Notice of Loss is November 14, 2024.
Except as provided in Sec.  296.35 with respect to a request to reopen
a claim, an injury that has not been described: on a Notice of Loss, on
a supplement to a Notice of Loss or a request to supplement a Notice of
Loss under Sec.  296.34 received by the Claims Office on or before
November 14, 2024 cannot be compensated under the Act. The Act
establishes this deadline and does not provide any extensions of the
filing deadline.

Sec.  296.12   Election of remedies.

    (a) An Injured Person who accepts an award under the Act waives the
right to pursue all claims for injuries arising out of or relating to
the same subject matter against the United States or any employee,
officer, or agency of the United States through the Federal Tort Claims
Act or a civil action authorized by any other provision of law.
    (b) An Injured Person who accepts an award through a Federal Tort
Claims Act claim or a civil action against the United States or any
employee, officer, or agency of the United States relating to the
Hermit's Peak/Calf Canyon Fire waives the right to pursue any claim
arising out of or relating to the same subject matter under the Act.

Sec.  296.13   Subrogation.

    An insurer or other third party with the rights of a subrogee, who
has compensated an injured person for Hermit's Peak/Calf Canyon Fire
related injuries, may file a Notice of Loss under the Act for the
subrogated claim. A subrogee may file a Notice of Loss without regard
to whether the Injured Person who received payment from the subrogee
filed a Notice of Loss. A Subrogation Notice of Loss should be filed
after the subrogee has made all

payments that it believes the Injured Person is entitled to receive for
Hermit's Peak/Calf Canyon Fire related injuries under the terms of the
insurance policy or other agreement between the subrogee and the
Injured Person, but not later than November 14, 2024. By filing a
Notice of Loss for any subrogated claim, the subrogee elects the Act as
its exclusive remedy against the United States or any employee,
officer, or agency of the United States for all subrogated claims
arising out of the Hermit's Peak/Calf Canyon Fire. Subrogation claims
must be made on a Notice of Loss form furnished by the Claims Office.

Sec.  296.14   Assignments.

    Assignment of claims and the right to receive compensation for
claims under the Act is prohibited and will not be recognized by FEMA.

Subpart C--Compensation Available Under the Hermit's Peak/Calf
Canyon Fire Assistance Act

Sec.  296.20   Prerequisite to compensation.

    In order to receive compensation under the Act, a claimant must be
an Injured Person who suffered an injury as a result of the Hermit's
Peak/Calf Canyon Fire and sustained damages.

Sec.  296.21   Allowable damages.

    (a) Allowable damages. The Act provides for the payment of actual
compensatory damages for Injury or loss of property, business loss, and
financial loss. The laws of the State of New Mexico will apply to the
calculation of damages. Damages must be reasonable in amount.
    (b) Exclusions. Punitive damages, statutory damages under section
30-32-4 of the New Mexico Statutes Annotated (2019), interest on
claims, attorney's fees and agents' fees incurred in prosecuting a
claim under the Act or an insurance policy, and adjusting costs
incurred by an insurer or other third party with the rights of a
subrogee that may be owed by a claimant as a consequence of receiving
an award are not recoverable from FEMA. The cost to a claimant of
prosecuting a claim under the Act does not constitute compensatory
damages and is not recoverable from FEMA, except as provided in Sec.
296.31(b).
    (c) Loss of property. Compensatory damages may be awarded for an
uninsured or underinsured property loss, a decrease in the value of
real property, damage to physical infrastructure, cost resulting from
lost subsistence, cost of reforestation or revegetation not covered by
any other Federal program, and any other loss that the Administrator
determines to be appropriate for inclusion as a loss of property.
    (1) Real property and contents. Compensatory damages for the damage
or destruction of real property and its contents may include the
reasonable cost of reconstruction of a structure comparable in design,
construction materials, size, and improvements, taking into account
post-fire construction costs in the community in which the structure
existed before the fire and current building codes and standards.
Compensatory damages may also include the cost of removing debris and
burned trees, including hazardous materials or soils, stabilizing the
land, replacing contents, and compensation for any decrease in the
value of land on which the structure sat pursuant to paragraph (c)(3)
of this section.
    (2) Reforestation and revegetation. Compensation for the
replacement of destroyed trees and other landscaping will not exceed 25
percent of the pre-fire value of the structure and lot.
    (3) Decrease in the value of real property. Compensatory damages
may be awarded for a decrease in the value of real property that a
claimant owned before the Hermit's Peak/Calf Canyon Fire if:
    (i) The claimant sells the real property in a good faith, arm's
length transaction that is closed no later than November 14, 2024 and
realizes a loss in the pre-fire value; or
    (ii) The claimant can establish that the value of the real property
was permanently diminished as a result of the Hermit's Peak/Calf Canyon
Fire.
    (4) Subsistence. Compensatory damages will be awarded for lost
Subsistence Resources.
    (i) FEMA may reimburse an injured party for the reasonable cost of
replacing Subsistence Resources customarily and traditionally used by
the claimant on or before April 6, 2022, but no longer available to the
claimant as a result of the Hermit's Peak/Calf Canyon Fire. For each
category of Subsistence Resources, the claimant must elect to receive
compensatory damages either for the increased cost of obtaining
Subsistence Resources from lands not damaged by the Hermit's Peak/Calf
Canyon Fire or for the cost of procuring substitute resources in the
cash economy.
    (ii) FEMA may consider evidence submitted by claimants, Indian
Tribes, and other knowledgeable sources in determining the nature and
extent of a claimant's subsistence uses.
    (iii) Compensatory damages for subsistence losses will be paid for
the period between April 6, 2022 and the date when Subsistence
Resources can reasonably be expected to return to the level of
availability that existed before the Hermit's Peak/Calf Canyon Fire.
FEMA may rely upon the advice of experts in making this determination.
    (iv) Long-term damage awards for subsistence resources will be made
to claimants in the form of lump sum cash payments.
    (d) Business loss. Compensatory damages may be awarded for damage
to tangible assets or inventory, including timber, crops, and other
natural resources; business interruption losses; overhead costs;
employee wages for work not performed; loss of business net income; and
any other loss that the Administrator determines to be appropriate for
inclusion as a business loss.
    (e) Financial loss. Compensatory damages may be awarded for
increased mortgage interest costs, insurance deductibles, temporary
living or relocation expenses, lost wages or personal income, emergency
staffing expenses, debris removal and other cleanup costs, costs of
reasonable heightened risk reduction, premiums for flood insurance, and
any other loss that the Administrator determines to be appropriate for
inclusion as financial loss.
    (1) Recovery loans. FEMA will reimburse claimants awarded
compensation under the Act for interest paid on loans, including Small
Business Administration disaster loans obtained after April 6, 2022 for
damages resulting from the Fire. Interest will be reimbursed for the
period beginning on the date that the loan was taken out and ending on
the date when the claimant receives a compensation award (other than a
partial payment). Claimants are required to use the proceeds of their
compensation award to repay Small Business Administration disaster
loans. FEMA will cooperate with the Small Business Administration to
formulate procedures for assuring that claimants repay Small Business
Administration disaster loans contemporaneously with the receipt of
their compensation award.
    (2) Flood insurance. FEMA will reimburse claimants for flood
insurance premiums to be paid on or before May 31, 2024 if, as a result
of the Hermit's Peak/Calf Canyon Fire, a claimant who was not required
to purchase flood insurance before the Hermit's Peak/Calf Canyon Fire
is required to purchase flood insurance or the claimant did not
maintain flood insurance before the Fire but purchased flood insurance
after the Fire due to fear of heightened flood risk. Alternatively,
FEMA may provide flood

insurance to such claimants directly through a group or blanket policy.
    (3) Out of pocket expenses for treatment of mental health
conditions. FEMA may reimburse an individual claimant for reasonable
out of pocket expenses incurred for treatment of a mental health
condition rendered by a licensed mental health professional, which
condition resulted from the Hermit's Peak/Calf Canyon Fire. FEMA will
not reimburse for treatment rendered after April 6, 2024.
    (4) Donations. FEMA will compensate claimants for the cost of
merchandise, use of equipment or other non-personal services, directly
or indirectly donated to survivors of the Hermit's Peak/Calf Canyon
Fire not later than September 20, 2022. Donations will be valued at
cost.
    (5) Heightened Risk Reduction. FEMA will reimburse claimants for
the costs incurred to implement reasonable measures necessary to reduce
risks from natural hazards heightened by the Hermit's Peak/Calf Canyon
Fire to the level of risk prevailing before the Hermit's Peak/Calf
Canyon Fire. Such measures may include, for example, risk reduction
projects that reduce an increased risk from flooding, mudslides, and
landslides in and around burn scars. Compensation under this section
may not exceed 25 percent of the higher of payments from all sources
(i.e., the Act, insurance proceeds, FEMA assistance under the Stafford
Act) for damage to the structure and lot, or the pre-fire value of the
structure and lot. Claimants seeking compensation for heightened risk
reduction must include the claim in their Notice of Loss by November
14, 2024 or an amended Notice of Loss filed no later than November 14,
2025. Claimants should take into account current building codes and
standards and must complete the risk reduction project for which they
receive compensation.
    (f) Insurance and other benefits. The Act allows FEMA to compensate
Injured Persons only for damages not paid, or will not be paid, by
insurance or other third-party payments or settlements.
    (1) Insurance. Claimants who carry insurance will be required to
disclose the name of the insurer(s) and the nature of the insurance and
provide the Claims Office with such insurance documentation as the
Claims Office reasonably requests.
    (2) Coordination with FEMA's Public Assistance Program. Injured
Persons eligible for disaster assistance under FEMA's Public Assistance
Program are expected to apply for all available assistance. Pursuant to
the Act, the Federal share of the costs for Public Assistance projects
is 100 percent. Compensation will not be awarded under the Act for
injuries or costs that are eligible under the Public Assistance
Program.
    (3) Benefits provided by FEMA's Individual Assistance program.
Compensation under the Act will not be awarded for injuries or costs
that have been reimbursed under the Federal Assistance to Individual
and Households Program or any other FEMA Individual Assistance Program.
    (4) Worker's compensation claims. Individuals who have suffered
injuries that are compensable under State or Federal worker's
compensation laws must apply for all benefits available under such
laws.
    (5) Benefits provided by non-governmental organizations and
individuals. Gifts or donations made to a claimant by a non-
governmental organization or an individual, other than wages paid by
the claimant's employer or insurance payments, will be disregarded in
evaluating claims and need not be disclosed to the Claims Office by
claimants.

Subpart D--Claims Evaluation

Sec.  296.30   Establishing injuries and damages.

    (a) Burden of proof. The burden of proving injuries and damages
rests with the claimant. A claimant may submit for the Administrative
Record a statement explaining why the claimant believes that the
injuries and damages are compensable and any documentary evidence
supporting the claim. Claimants will provide documentation, which is
reasonably available, including photographs and video, to corroborate
the nature, extent, and value of their injuries and/or to execute
affidavits in a form established by the Claims Office. FEMA may
compensate a claimant for an injury in the absence of supporting
documentation, in its discretion, on the strength of an affidavit or
Proof of Loss executed by the claimant, if documentary evidence
substantiating the injury is not reasonably available. FEMA may also
require an inspection of real property. FEMA may request that a
business claimant execute an affidavit, which states that the claimant
will provide documentary evidence, including but not limited to income
tax returns, if requested by the DHS Office of the Inspector General or
the Government Accountability Office during an audit of the claim.
    (b) Proof of Loss. All claimants are required to attest to the
nature and extent of each injury for which compensation is sought in
the Proof of Loss. The Proof of Loss, which will be in a form specified
by the Claims Office, must be signed by the claimant or the claimant's
legal representative if the claimant is not an individual or is an
individual who lacks the legal capacity to execute the Proof of Loss.
The Proof of Loss must be signed under penalty of perjury. Non-
subrogation claimants should submit a signed Proof of Loss to the
Claims Office not later than 150 days after the date when the Notice of
Loss was submitted. This deadline may be extended at the discretion of
the Director of the Claims Office for good cause. If a non-subrogation
claimant fails to submit a signed Proof of Loss within the timeframes
set forth in this section and does not obtain an extension from the
Director of the Claims Office, the Claims Office may administratively
close the claim and require the claimant to repay any partial payments
made on the claim. Subrogation claimants will submit the Proof of Loss
contemporaneously with filing the Notice of Loss.
    (c) Release and Certification Form. All claimants who receive
compensation under the Act are required to sign a Release and
Certification Form, including for partial payments under Sec.  296.33.
The Release and Certification Form must be executed by the claimant or
the claimant's legal representative if the claimant is an entity or
lacks the legal capacity to execute the Release and Certification Form.
A Release and Certification Form must be received by the Claims Office
before the Claims Office provides payment on the claim. The United
States will not attempt to recover compensatory damages paid to a
claimant who has executed and returned a Release and Certification Form
within the periods provided above, except in the case of fraud or
misrepresentation by the claimant or the claimant's representative,
failure of the claimant to cooperate with an audit as required by Sec.
296.36 or a material mistake by FEMA.
    (d) Authority to settle or compromise claims. Notwithstanding any
other provision of this part, the Director of the Claims Office may
extend an offer to settle or compromise a claim or any portion of a
claim at any time during the process outlined in this part, which if
accepted by the claimant will be binding on the claimant and on the
United States, except that the United States may recover funds
improperly paid to a claimant due to fraud or misrepresentation on the
part of the claimant or the claimant's representative, a material
mistake on FEMA's part or the claimant's failure to

cooperate in an audit as required by Sec.  296.36.

Sec.  296.31   Reimbursement of claim expenses.

    (a) FEMA will reimburse claimants for the reasonable costs they
incur in providing documentation requested by the Claims Office. FEMA
will also reimburse claimants for the reasonable costs they incur in
providing appraisals, or other third-party opinions, requested by the
Claims Office. FEMA will not reimburse claimants for the cost of
appraisals or other third-party opinions not requested by the Claims
Office.
    (b) FEMA will provide a lump sum payment for incidental expenses
incurred in claims preparation to claimants that are awarded
compensatory damages under the Act after a properly executed Release
and Certification Form has been returned to the Claims Office. The
amount of the lump sum payment will be the greater of $150 or 5% of the
Act's compensatory damages and insurance proceeds recovered by the
claimant for Hermit's Peak/Calf Canyon Fire related injuries (not
including the lump sum payment or monies reimbursed under the Act for
the purchase of flood insurance) but will not exceed $25,000.
Subrogation claimants and claimants whose only Hermit's Peak/Calf
Canyon Fire related loss is for flood insurance premiums will not be
eligible.

Sec.  296.32   Determination of compensation due to claimant.

    (a) Authorized Official's report. After the Claims Office has
evaluated all elements of a claim as stated in the Proof of Loss, the
Authorized Official will issue, and provide the claimant with a copy
of, the Authorized Official's determination.
    (b) Claimant's options upon issuance of the Authorized Official's
determination. Not later than 120 days after the date that appears on
the Authorized Official's determination, the claimant must either
accept the determination by submitting a Release and Certification Form
to FEMA and/or initiate an Administrative Appeal in accordance with
Sec.  296.41. Claimants must sign the Release and Certification Form to
receive payment on their claims (including for partial payments). The
claimant will receive payment of compensation awarded by the Authorized
Official after FEMA receives the completed Release and Certification
Form. If the claimant does not either submit a Release and
Certification Form to FEMA or initiate an Administrative Appeal no
later than 120 days after the date that appears on the Authorized
Official's determination, the claimant will be conclusively presumed to
have accepted the Authorized Official's determination. The Director of
the Claims Office may modify the deadlines set forth in this subsection
at the request of a claimant for good cause shown.

Sec.  296.33   Partial payments.

    The Claims Office at the request of a claimant may make one or more
partial payments on any aspect of a claim that is severable. Receipt by
a claimant of a partial payment is contingent on the claimant signing a
Release and Certification Form for the severable part of the claim for
which partial payment is being made. Acceptance of a partial payment in
no way affects a claimant's ability to pursue an Administrative Appeal
of the Authorized Official's determination or to pursue other rights
afforded by the Act with respect to any portion of a claim for which a
Release and Certification Form has not been executed. The Claims Office
decision on whether to provide a partial payment cannot be appealed.

Sec.  296.34   Supplementing claims.

    A claimant may amend the Notice of Loss to include additional
claims at any time before signing a Proof of Loss. After the claimant
has submitted a Proof of Loss and before submission of a Release and
Certification Form, a claimant may request that the Director of the
Claims Office consider one or more injuries not addressed in the Proof
of Loss. The request must be submitted in writing to the Director of
the Claims Office and received not later than the deadline for filing
an Administrative Appeal under Sec.  296.32 or November 14, 2024,
whichever is earlier. It must be supported by the claimant's
explanation of why the injury was not previously reported. If good
cause is found to consider the additional injury, the Director will
determine whether compensation is due to the claimant for the Loss
under the Administrative Appeal procedures described in Sec.  296.41.

Sec.  296.35   Reopening a claim.

    The Director of the Claims Office may reopen a claim if requested
to do so by the claimant, notwithstanding the submission of the Release
and Certification Form, for the limited purpose of considering issues
raised by the request to reopen if, not later than November 14, 2025,
the claimant desires heightened risk reduction compensation in