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directs EPA to use voluntary consensus DEPARTMENT OF HOMELAND background documents or comments standards in its regulatory activities SECURITY received, go to the Federal e- unless to do so would be inconsistent Rulemaking Portal at http:// with applicable law or otherwise Federal Emergency Management www.regulations.gov. Agency impractical. Voluntary consensus II. Background standards are technical standards (e.g., materials specifications, test methods, 44 CFR Part 206 A. The Public Assistance Program sampling procedures, and business [Docket ID: FEMA–2019–0012] Under the Public Assistance (PA) practices) that are developed or adopted Program, authorized by the Robert T. by voluntary consensus standards RIN 1660–AB00 Stafford Disaster Relief and Emergency Assistance Act 1 (Stafford Act), FEMA bodies. NTTAA directs agencies to Public Assistance Appeals and awards grants to eligible applicants to provide Congress, through OMB, Arbitrations explanations when the Agency decides assist them in responding to and not to use available and applicable AGENCY: Federal Emergency recovering from Presidentially-declared voluntary consensus standards. Management Agency, DHS. emergencies and major disasters. The ACTION: Notice of proposed rulemaking. recipient, as defined at 44 CFR This action modifies existing 206.201(m), is the government to which regulations to correct an error in the SUMMARY: The Federal Emergency a grant is awarded, and which is regulations and therefore involves Management Agency (FEMA) is accountable for the use of the funds technical standards previously proposing regulations to implement the provided. Generally, the State for which established by EPA. The amendments to new right of arbitration authorized by the emergency or major disaster is the regulations do not involve the the Disaster Recovery Reform Act of declared is the recipient. The recipient application of new technical standards. 2018 (DRRA), and to revise its can also be an Indian Tribal EPA is continuing to use the technical regulations regarding first and second government. The applicant, as defined standards previously established in its Public Assistance appeals. at 44 CFR 206.201(a), is a State agency, local government, or eligible private rules regarding the light-duty vehicle DATES: Comments must be received no GHG standards for MYs 2017–2025. See later than 30, 2020. nonprofit organization submitting an 77 FR 62960 and 85 FR 25265. application to the recipient for ADDRESSES: You submit comments, assistance under the recipient’s grant. K. Executive Order 12898: Federal identified by Docket ID: FEMA–2019– The PA Program provides Federal Actions To Address Environmental 0012, via the Federal eRulemaking funds for debris removal, emergency Justice in Minority Populations and Portal: http://www.regulations.gov. protective measures, and permanent Low-Income Populations Follow the instructions for submitting restoration of infrastructure. When the comments. President issues an emergency or major The EPA believes that this action does FOR FURTHER INFORMATION CONTACT: disaster declaration authorizing PA not have disproportionately high and Shabnaum Amjad, Deputy Associate FEMA may accept applications from adverse human health or environmental Chief Counsel, Regulatory Affairs, Office eligible applicants under the PA effects on minority populations, low- of Chief Counsel, Federal Emergency Program. To apply for a grant under the income populations and/or indigenous Management Agency, 500 C Street SW, PA Program, the eligible applicant must peoples, as specified in Executive Order Washington, DC 20472. Phone: 202– submit a Request for PA to FEMA 12898 (59 FR 7629, 16, 1994). 212–2398 or email: Shabnaum.Amjad@ through the recipient. Upon award, the This regulatory action merely corrects fema.dhs.gov. recipient notifies the applicant of the award, and the applicant becomes a previously established provisions that SUPPLEMENTARY INFORMATION: auto manufacturers use to demonstrate subrecipient. compliance for light-duty vehicles. I. Public Participation FEMA uses Project Worksheets (PWs) to administer the PA Program. A FEMA We encourage you to participate in List of Subjects in 40 CFR Part 600 Project Specialist develops PWs for this rulemaking by submitting large projects, working with a recipient comments and related materials. We Environmental protection, representative and the applicant. A PW will consider all comments and Administrative practice and procedure, is the primary form used to document materials received during the comment Electric power, Fuel economy, Labeling, the location, damage description and period. Reporting and recordkeeping dimensions, scope of work, and cost If you submit a comment, identify the requirements. estimate for a project. Although large agency name and the Docket ID for this projects are funded on documented Andrew Wheeler, rulemaking, indicate the specific section actual costs, work typically is not of this document to which each Administrator. complete at the time of project comment applies, and give the reason [FR Doc. 2020–17214 Filed 8–28–20; 8:45 am] formulation, PW development, and for each comment. All submissions will BILLING CODE 6560–50–P approval. Therefore, FEMA obligates be posted, without change, to the large project grants based on estimated Federal e-Rulemaking Portal at costs and relies on financial www.regulations.gov, and will include reconciliation at project closeout for any personal information you provide. final costs. Therefore, submitting this information The obligation process is the process makes it public. For more about privacy by which FEMA makes funds available and the docket, visit https:// to the recipient. The funds reside in a www.regulations.gov/ document?D=DHS-2018-0029-0001. 1 Disaster Relief Act of 1974, Public Law 93–288, Viewing comments and documents: 88 Stat. 143 (, 1974), as amended, 42 U.S.C. For access to the docket to read 5121 et seq.

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Federal account until drawn down by The FEMA Regional Administrator resolve outstanding disputes regarding the recipient and disbursed to the reviews the appeal and takes one of two PA projects over $500,000. The ARRA applicant, unless partially or otherwise actions: (1) Renders a decision on the arbitration regulations are only available deobligated for reasons including, but appeal and informs the recipient of the to the States of Louisiana, Mississippi, not limited to, discrepancies between decision; or (2) requests additional Alabama, and Texas under the following estimated and actual costs, updated information. If the appeal is granted, the declarations: DR–1603, DR–1604, DR– estimates, a determination that a prior FEMA Regional Administrator takes 1605, DR–1606, and DR–1607. eligibility determination was incorrect, appropriate action, such as approving additional funds received from other additional funding or sending a Project D. Former 44 CFR 206.210, Dispute sources that could represent a Specialist to meet with the appellant to Resolution Pilot Program prohibited duplication of benefits, or determine additional eligible funding. The Sandy Recovery Improvement expiration of the period of performance. 44 CFR 206.206(c)(3). Act of 2013 4 (SRIA) authorized FEMA Occasionally, an applicant or If the FEMA Regional Administrator to conduct a Dispute Resolution Pilot recipient may disagree with FEMA denies the appeal, the applicant or Program (DRPP), which was in effect 2 regarding a determination related to recipient may submit a second appeal. from , 2013 to 31, their request for Public Assistance. Such The applicant must submit the second 2015. 78 FR 49950, Aug 16, 2013. FEMA disagreements may include, for appeal to the recipient within 60 promulgated regulations at 44 CFR instance, whether an applicant or calendar days of receiving the notice of 206.210 (since removed) to effectuate recipient, facility, item of work, or the FEMA Regional Administrator’s the pilot program. It included project is eligible for Public Assistance; decision on the first appeal. The arbitration by an independent review whether approved costs are sufficient to recipient must forward the second panel to resolve disputes relating to PA complete the work; whether a requested appeal with a written recommendation projects, to facilitate an efficient time extension was properly denied; to the FEMA Regional Administrator recovery from major disasters. whether a portion of the cost claimed within 60 calendar days of receiving the Applicants could choose to use for their for the work is eligible; or whether the second appeal. 44 CFR 206.206(c)(2). second appeal either the DRPP or the approved scope of work is correct. In The FEMA Regional Administrator will review already offered under 44 CFR such circumstances, the applicant or forward the second appeal for action to 206.206. Arbitration by an independent recipient may appeal FEMA’s the FEMA Assistant Administrator for review panel was available only for determination. 44 CFR 206.206. Recovery as soon as practicable. disputes in an amount equal to or Recipients may make recipient-related B. 44 CFR 206.206, Public Assistance greater than $1,000,000 for projects with second appeals to the FEMA Assistant Appeals non-Federal cost share requirement Administrator for Recovery. Under the appeals procedures in 44 The FEMA Assistant Administrator (where, the subrecipient had a cost CFR 206.206, an eligible applicant, for Recovery at FEMA Headquarters share requirement), and for applicants subrecipient, or recipient may appeal reviews the second appeal and renders that had completed a first appeal any determination made by FEMA a decision or requests additional pursuant to 44 CFR 206.206. related to an application for or the information from the applicant. In a The arbitration decisions under this provision of Public Assistance. There case involving highly technical issues, section were to be binding upon the are two levels of appeal. The first appeal FEMA may request an independent parties to the dispute, as required by is to the FEMA Regional Administrator. scientific or technical analysis by a section 1105(b)(2) of SRIA. Under The second appeal is to the FEMA group or person having expertise in the section 1105 of SRIA, the authority to Assistant Administrator for Recovery at subject matter of the appeal. 44 CFR accept a request for arbitration pursuant FEMA Headquarters. 206.206(d). Upon receipt of requested to the DRPP sunset on , The applicant must file an appeal information and reports from the 2015, and FEMA has since removed with the recipient within 60 calendar applicant, FEMA must render a decision these regulations.5 FEMA did not days of the applicant’s receipt of a on the second appeal within 90 calendar receive any requests for arbitration notice from FEMA of the Federal days. 44 CFR 206.206(c)(3). This pursuant to the DRPP. determination that is being appealed. 44 decision constitutes the final E. Arbitration Under the Disaster CFR 206.206(c)(1). The applicant must administrative decision of FEMA. 44 Recovery Reform Act of 2018 (DRRA) provide documentation to support the CFR 206.206(e)(3). position of the appeal. In this On , 2018, the President documentation, the applicant will C. 44 CFR 206.209, Arbitration for Public Assistance Determinations signed into law the Disaster Recovery specify the monetary amount in dispute 6 Related to Hurricanes Katrina and Rita Reform Act of 2018 (DRRA). Section and the provisions in Federal law, 1219 of DRRA, which amended Section regulation, or policy with which the Under 44 CFR 206.209, applicants 423(d) of the Stafford Act (42 U.S.C. applicant believes FEMA’s initial action may request arbitration to resolve 5189a), provides a right of arbitration to was inconsistent. 44 CFR 206.206(a). disputed PA applications under major certain applicants of the PA Program The recipient reviews and evaluates the disaster declarations for Hurricanes that have a dispute concerning the appeal documentation. The recipient Katrina and Rita, pursuant to the eligibility for assistance or repayment of then prepares a written authority of the American Recovery and assistance. recommendation on the merits of the Reinvestment Act of 2009 (ARRA).3 Pursuant to section 601 of the ARRA, appeal and forwards that 4 Sandy Recovery Improvement Act of 2013, recommendation to the FEMA Regional FEMA promulgated 44 CFR 206.209 to Public Law 113–2, 127 Stat. 43 (Jan. 29, 2013), 42 Administrator within 60 calendar days establish arbitration procedures to U.S.C. 5189a note. of the recipient’s receipt of the appeal 5 See Removal of Dispute Resolution Pilot from the applicant. 44 CFR 2 Introductory text of paragraph(a) of 44 CFR Program for Public Assistance Appeals, 83 FR 44238, Aug. 30, 2018. 206.206(c)(2). Recipients may make 206.206. 3 American Recovery and Reinvestment Act of 6 Disaster Recovery Reform Act of 2018, Public recipient-related appeals to the FEMA 2009, Public Law 111–5, 123 Stat. 115 (Feb. 17, Law 115–254, 132 Stat. 3186 (Oct. 5, 2018), 42 Administrator. 2009), 26 U.S.C. 1 note. U.S.C. 5189a.

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To request arbitration pursuant to the 206.206 to add in the new right to dispute,’’ ‘‘Applicant,’’ ‘‘Final agency newly amended 42 U.S.C. 5189a, a PA arbitration under DRRA, in conjunction determination,’’ ‘‘Recipient,’’ ‘‘Rural applicant (1) must have a dispute with some revisions to the current area,’’ and ‘‘Urbanized area,’’ as follows. arising from a disaster declared after appeals process. The DRRA adds Administrator. FEMA proposes to 1, 2016, (2) must be disputing arbitration as a permanent alternative to define the term ‘‘Administrator’’ to an amount that exceeds $500,000 (or a second appeal under the PA Program. mean the Administrator of the Federal $100,000 for an applicant in a ‘‘rural Additionally, applicants that have had a Emergency Management Agency for area’’ with a population of less than first appeal pending with FEMA for clarity. 200,000 and outside of an urbanized more than 180 calendar days may Amount in dispute. FEMA proposes area), and (3) must have submitted a withdraw such appeal and submit a to define the term ‘‘Amount in dispute’’ first appeal pursuant to the request for arbitration. In both cases, the to mean the difference between the requirements established under 44 CFR amount in dispute must be greater than amount of financial assistance sought 206.206. Such applicants that receive a $500,000, or greater than $100,000 for for a Public Assistance project and the negative first appeal decision then have an applicant for assistance in a rural amount of financial assistance for which the option of submitting either a request area. The other major proposed FEMA has determined such Public for a second appeal or a request for revisions to 44 CFR 206.206 include Assistance project is eligible. The DRRA arbitration. In addition, an applicant adding definitions; adding amendments to 42 U.S.C. 5189a(d)(1) that has had a first appeal pending with subparagraphs to clarify what actions introduced the term ‘‘dispute,’’ and also FEMA for more than 180 calendar days FEMA may take and will not take while added dollar thresholds that applicants may withdraw such appeal and submit an appeal is pending and state that must meet (which differ depending on a request for arbitration. FEMA may issue separate guidance as the area of the country in which the Applicants that had a second appeal necessary, similar to current 44 CFR applicant applies for assistance) in order pending with FEMA as of October 5, 206.209(m); adding a finality of decision to request arbitration. ‘‘Amount in 2018, from a disaster declared after paragraph; requiring electronic dispute’’ is not used in the current , 2016 may, if they meet the submission for appeals and arbitrations appeals section, 44 CFR 206.206, amount in dispute requirement of documents; and clarifying overall time because there is no required dollar $500,000 (or $100,000 for rural areas), limits for first and second appeals. threshold to appeal a decision. withdraw their second appeal and These proposed rules for arbitration Accordingly, FEMA proposes to define request arbitration. Following the are separate and distinct from the the term ‘‘amount in dispute’’ because DRRA’s enactment, FEMA individually arbitration provisions located in 44 CFR applicants seeking arbitration must state notified applicants with pending second 206.209. an amount in dispute as a prerequisite for the arbitration portion of proposed appeals that were eligible to withdraw Applicants should also review the Civilian Board of Contract Appeals 44 CFR 206.206. those appeals and request arbitration. regulations at 48 CFR part 6101, Rules A Project is a logical grouping of work Applicants that are not eligible to of Procedure of the Civilian Board of required as a result of the declared request arbitration are (1) applicants Contract Appeals, and 48 CFR part major disaster or emergency. The scope that have received a second appeal 6106, Rules of Procedure for Arbitration of work and cost estimate for a project determination from FEMA prior to of Public Assistance Eligibility or are documented on a PW. 44 CFR October 5, 2018, and (2) applicants that Repayment, for additional CBCA rules 206.201(k). Applicants and recipients were eligible to submit a second appeal of procedure. cannot combine PWs together in order prior to October 5, 2018, but did not do FEMA proposes to change the 44 CFR to obtain eligibility. FEMA makes PA so within the 60 calendar days required 7 206.206 section heading from determinations at the PW level. by 44 CFR 206.206. ‘‘Appeals’’ to ‘‘Appeals and Facility means any publicly or As amended by Section 1219 of the arbitrations,’’ since FEMA proposes new privately owned building, works, DRRA, 42 U.S.C. 5189a(d) names the regulatory text to implement DRRA’s system, or equipment, built or Civilian Board of Contract Appeals right of arbitration at § 206.206. manufactured, or an improved and (CBCA) as the entity responsible for Throughout this section, FEMA maintained natural feature. Land used conducting these arbitrations. The proposes to change references to the for agricultural purposes is not a CBCA has promulgated regulations at 48 ‘‘Disaster Assistance Directorate’’ to the facility. 44 CFR 206.201(c). FEMA must CFR part 6106 establishing its ‘‘Recovery Directorate.’’ The proposed consider the amount in dispute at the arbitration procedures for such purpose. changes are technical edits, as they PW level, rather than by facility (as one The CBCA also currently conducts represent past FEMA organizational PW could encompass multiple facilities) arbitrations arising from Hurricanes changes. Also, throughout this section or by appeal (which could consolidate Katrina and Rita under the ARRA FEMA proposes to change all ‘‘dates’’ to multiple PWs, thereby increasing the regulations pursuant to an Inter-Agency ‘‘calendar dates’’ for clarity. Finally, amount in dispute). Agreement between the CBCA and since FEMA is proposing new Applicant. FEMA proposes to define FEMA. arbitration regulations, FEMA is the term ‘‘Applicant’’ to refer to the III. Proposed Rule proposing that the first appeal, second definition at 206.201(a) for the sake of appeal, and arbitration requirements are consistency within the program. FEMA proposes to revise its current in separate paragraphs for clarity. Final agency determination. FEMA PA appeals regulation at 44 CFR Currently in § 206.206, FEMA’s first and proposes to define the term ‘‘Final agency determination’’ to mean the 7 On , 2018, FEMA implemented second appeal requirements are section 1219 of DRRA by posting a Fact Sheet on comingled. decision of FEMA, if the applicant or its website. After CBCA published their 5, recipient does not submit a first appeal 2019 proposed rule, see 84 FR 7861, FEMA updated A. Definitions (Proposed 44 CFR within the time limits provided for in the: Section 1219 Public Assistance Appeals and 206.206(a)) paragraph (b)(1)(ii)(A) of proposed Arbitration Fact Sheet on , 2019. A link to the current Fact Sheet: https://www.fema.gov/ Currently, § 206.206 does not include § 206.206; or the decision of FEMA, if media-library/assets/documents/175821. Accessed any definitions. FEMA proposes to add the applicant or recipient withdraws the , 2020. the terms ‘‘Administrator,’’ ‘‘Amount in pending appeal and does not file a

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request for arbitration within 30 that an eligible applicant or recipient establishing deadlines for second calendar days of the withdrawal of the may appeal or an eligible applicant may appeals and arbitrations. pending appeal; or the decision of the arbitrate any determination previously FEMA is proposing a requirement that FEMA Regional Administrator, if the made related to an application for or the the recipient provide a recommendation applicant or recipient does not submit a provision of Public Assistance on the applicant’s appeal due to the second appeal within the time limits according to the procedures of proposed recipient’s grant management provided for in paragraph (b)(2)(ii)(A) of § 206.206. This language is similar to responsibilities and fiscal accountability proposed § 206.206. This term was the current regulation at § 206.206 for all PA grants under a major disaster introduced by the DRRA amendments to introductory paragraph. FEMA proposes declaration, including its commitment 42 U.S.C. 5189a(d)(5)(B) and requires a changing ’’ applicant, subrecipient, or to comply with the applicable cost share definition. recipient’’ to ‘‘applicant or recipient’’ requirement.9 The recipient has a The purpose of the proposed since the definition of applicant at responsibility to ensure all applicants definition is to clearly state when a § 206.201(a) includes subrecipient. abide by grant and cost share FEMA determination is final and thus FEMA proposes changing ‘‘Federal requirements, so in this capacity FEMA no longer ripe for any additional review assistance’’ to ‘‘Public Assistance’’ to believes that the recipient should make through FEMA’s administrative appeal clarify that appeal and arbitration a recommendation on the substance of process or arbitration under the DRRA. procedures only apply to Public the applicant’s first appeal. Using ‘‘final agency determination’’ to Assistance. Additionally, FEMA The final sentence of proposed replace the current term ‘‘final proposes to add ‘‘or an eligible paragraph (b)(1) is currently the third administrative decision,’’ used in applicant may arbitrate’’ to the proposed sentence in paragraph 206.206(a), which § 206.206(e)(3), will align FEMA’s § 206.206(b) introductory paragraph, states that the recipient may make regulation with the language introduced since the current § 206.206 only recipient-related appeals to the Regional by the DRRA amendments at 42 U.S.C. discusses an appeal and 42 U.S.C. 5189a Administrator. 5189a(d)(5)(B). requires applicants to have the choice to In proposed paragraph (b)(1)(i), FEMA Recipient. FEMA proposes to define either request an arbitration or a second states the requirements of a first appeal, the term ‘‘Recipient’’ to refer to the appeal. FEMA also proposes to replace which must include all documented definition at § 206.201(m) for the sake of ‘‘procedures below’’ with ‘‘procedures justification supporting the applicant or consistency within the program. of this section’’ for clarity. recipient’s position; the specific amount Rural area. FEMA proposes to define C. First Appeal (Proposed 44 CFR in dispute, as applicable; and the the term ‘‘Rural area’’ to mean an area 206.206(b)(1)) specific provisions in Federal law, with a population of less than 200,000 regulation, or policy with which the outside an urbanized area. As amended In the introductory paragraph of applicant or recipient believes the by the DRRA, 42 U.S.C. 5189a(d)(4) proposed paragraph (b)(1), FEMA states FEMA determination was inconsistent. defines this term. that the applicant must make a first This is consistent with the current FEMA makes PA determinations at appeal in writing and submit it regulation in § 206.206(a), except that the PW level. Therefore, considerations electronically through the recipient to FEMA proposes to change ‘‘initial of the amount in dispute and rural/ the Regional Administrator. The current action’’ to ‘‘FEMA determination.’’ This urban status must be done at the PW regulation (at 44 CFR 206.206(a)) does change clarifies what the ‘‘initial level, rather than by facility (as one PW not require submission electronically, action’’ actually is and aligns the could encompass multiple facilities) or but states submissions must be in regulation with the terminology the by appeal (which could consolidate writing. FEMA proposes this revision to program now uses. As such, no multiple PWs. If a PW encompasses the current regulation to accurately substantive change is intended. multiple facilities, and those facilities track the transmittal/receipt of appeals Similarly, FEMA proposes to change happen to be in both rural and for the purposes of establishing ‘‘monetary figure in dispute’’ to deadlines for second appeal and urbanized areas, then FEMA will ‘‘amount in dispute, as applicable’’ so arbitration. consider the entire PW as ‘‘rural.’’ that we could use one term for both Urbanized area. FEMA proposes to The revision removes the mandatory language that the recipient ‘‘shall review appeals and arbitrations, plus for clarity. define the term ‘‘Urbanized area’’ to Currently, FEMA allows an applicant, mean the area as identified by the and evaluate’’ all subrecipient appeals before submission to the Regional subrecipient, or recipient to appeal a Census Bureau. The provision of assistance without Census Bureau defines an ‘‘urbanized Administrator. Instead, FEMA proposes that the recipient must include a written providing a monetary figure. (E.g. time area’’ as an area that consists of densely extension requests, scope of work settled territory that contains 50,000 or recommendation on the applicant’s appeal with the electronic submission of change requests, etc.) Therefore, FEMA more people.8 The DRRA amendments has proposed ‘‘amount in dispute, as to 42 U.S.C. 5189a(d)(4) introduced this the applicant’s first appeal to the Regional Administrator. To include a applicable’’ to replace the current term and it requires a definition. FEMA regulations of ‘‘monetary figure in proposes to defer to the Census Bureau recommendation on the applicant’s appeal, the recipient must review and definition, which meets FEMA’s needs 9 evaluate the appeal. Accordingly, FEMA All grants FEMA administers must comply with for determining eligibility for an the government-wide rules governing all Federal arbitration. proposes striking the review and the assistance. These rules, set out at 2 CFR part 200, evaluation portion of the sentence as apply to FEMA awards to recipients as well as to B. Appeals and Arbitrations (Proposed superfluous. FEMA’s proposed language subawards under the FEMA award, which a 44 CFR 206.206(b) Introductory recipient, as pass-through entity, awards to regarding the mandatory subrecipients. These rules govern administrative Paragraph) recommendation includes electronic and grants management requirements, cost For the introductory paragraph of submission to the Regional principles, and audit requirements. FEMA Manual Administrator. Again, the change to 205–0–1, ‘‘Grants Management,’’ as a whole serves § 206.206(b), FEMA proposes to state to explain key requirements of 2 CFR part 200 as electronic submissions is to accurately they pertain to FEMA assistance. The following 8 See ‘‘Qualifying Urban Areas for the 2010 track the transmittal/receipt of regulations cover FEMA’s cost share requirement: Census, 77 FR 18651, Mar. 27, 2012. recommendations for the purposes of 44 CFR 206.36(c)(5), 206.44, and 206.203(b).

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dispute.’’ Also, the current regulation and paragraph 206.206(c)(2) allows a that in appeals involving highly uses the term ‘‘appellant’’ instead of recipient to review and forward an technical issues, the Regional ‘‘applicant or recipient’’ for the applicant’s appeals along with a written Administrator may, at his or her requirement of specifying the provisions recommendation within 60 days. FEMA discretion, submit the appeal to an in Federal law, regulation, or policy in has combined the two 60-day deadlines independent scientific or technical dispute. FEMA’s reason for changing into a 120-calendar days deadline. person or group having expertise in the from ‘‘appellant’’ to ‘‘applicant or Under proposed paragraph subject matter of the appeal for advice ‘‘recipient’’ is for consistency in (b)(1)(ii)(B), within 90 calendar days or recommendation. The period for terminology and no substantive change following receipt of a first appeal, if technical review may be in addition to is intended. Finally, in keeping with there is a need for additional other allotted time periods. Within 90 principles of transparency and plain information, the Regional Administrator calendar days of the report, the Regional language, FEMA proposes to replace will provide electronic notice to the Administrator will provide electronic ‘‘shall’’ with ‘‘must’’ in the last sentence recipient and applicant. This is notice of the disposition of the appeal of current § 206.206(a) and reorganizing consistent with the current regulations, to the recipient and applicant. This is the last sentence by separating it into with the added requirement for consistent with the current regulation at subparagraphs (b)(1)(i)(A) through (C). electronic notification and simultaneous 44 CFR 206.206(d), except for the Proposed paragraph (b)(1)(ii) notification of the applicant. FEMA also requirement to electronically notify the addresses time limits for first appeals. proposes for clarity to state that if there recipient and provide simultaneous Under proposed paragraph (b)(1)(ii)(A), is no need for additional information, notice to the applicant. the applicant may make a first appeal then FEMA will not provide FEMA proposes to add a new through the recipient within 60 calendar notification. Finally, FEMA also paragraph regarding the effect of an days from the date of the FEMA proposes to state that the Regional appeal in proposed paragraph (b)(1)(iv). determination that is the subject of the Administrator will generally allow the Proposed paragraph (b)(1)(iv)(A) states appeal, and the recipient must recipient 30 calendar days to provide that FEMA will take no action to electronically forward to the Regional any additional information. This is implement any determination pending Administrator the applicant’s first consistent with the current regulation, an appeal decision from the Regional appeal with a recommendation within except that the current regulation does Administrator, subject to the exceptions 120 calendar days from the date of the not include the 30-calendar day in paragraph (b)(1)(iv)(B) of proposed FEMA determination that is the subject timeframe, but rather states that the § 206.206. This section is added to of the appeal. FEMA proposes to change Regional Administrator will include a provide clarity to an appellant as to the term ‘‘appellant’’ to ‘‘applicant’’ for date by which the information must be what actions FEMA will not take and consistency in terminology; no provided. This change is to better allow what actions FEMA may take while an substantive change is intended. FEMA FEMA to issue timely determinations on appeal is pending. It does not alter any also proposes to change ‘‘after receipt of first appeal. The proposed regulations, current FEMA practices or procedures, a notice of the action that is being at (b)(1)(ii)(B) and (C), have split the nor does the rule limit any rights an appealed’’ to ‘‘from the date of the current regulations into two paragraphs. appellant has regarding their appeal. FEMA determination that is the subject Under proposed paragraph In proposed paragraph (b)(1)(iv)(B), of the appeal’’ to enable FEMA to (b)(1)(ii)(C), FEMA will require the FEMA states that, notwithstanding accurately track the transmittal/receipt Regional Administrator to provide (b)(1)(iv)(A), FEMA may suspend of appeals. electronic notice of the disposition of funding (referring to 2 CFR 200.338); The proposed revision removes the the appeal to the applicant and recipient defer or disallow other claims mandatory language that the recipient within 90 calendar days of receipt of the questioned for reasons also disputed in ‘‘will review’’ the first appeal. In order appeal or within 90 calendar days the pending appeal; or take other action for the recipient to provide a written following the receipt of additional to recover, withhold, or offset funds if recommendation, the recipient must information or following expiration of specifically authorized by statute or review the appeal, so the deleted the period for providing the regulation. As stated above, this section language is superfluous. FEMA information. The proposed regulations is added to provide clarity to an proposes adding a requirement that the reorganize the word order of the current appellant as to what actions FEMA will recipient forward the applicant’s appeal regulation and adds the following not take and what actions FEMA may and the recipient’s recommendation phrase ‘‘within 90 calendar days of take while an appeal is pending and electronically to the Regional receipt of the appeal’’ for clarification. does not alter any of FEMA’s current Administrator. The proposed change to Additionally, proposed paragraph practices or procedures or limit any electronic submissions is to accurately (b)(1)(ii)(C) adds the requirement to rights an appellant has regarding their track the transmittal/receipt of appeals provide electronic notice of the appeal. for the purposes of establishing disposition of the appeal, removes the As stated in the current regulation in deadlines for second appeal and requirement that it be ‘‘in writing,’’ and the final sentence of § 206.206(c)(3), if arbitration. includes simultaneous notification of the Regional Administrator grants an Finally, under proposed paragraph the applicant. The change to electronic appeal, the Regional Administrator will (b)(1)(ii)(A), FEMA proposes to state submissions is to accurately track the take appropriate implementing that FEMA will deny all first appeals it transmittal/receipt of appeals for the action(s). This language is now in receives from the recipient more than purposes of establishing deadlines for proposed paragraph (b)(1)(v). 120 calendar days from the date of the second appeal and arbitration. In proposed paragraph (b)(1)(vi), FEMA determination that is the subject Currently, FEMA may receive FEMA states that FEMA may issue of the appeal. This addition is added for submissions several ways, including separate guidance as necessary to clarity to explain what occurs if an electronically, through courier delivery, supplement paragraph (b)(1). This applicant misses the deadline. This and through the United States (U.S.) language arises from 44 CFR 206.209(m) addition is not a new deadline. mail. and is carried over to this proposed Currently, 44 CFR 206.206(c)(1) allows Proposed paragraph (b)(1)(iii) regulation for consistency. Since FEMA an applicant 60 days to file an appeal addresses technical advice and states has separated first appeal, second

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appeal, and arbitration requirements the recipient may make recipient-related 206.206(c)(1) allows an applicant 60 into separate paragraphs for clarity, appeals to the Regional Administrator. days to file an appeal and paragraph FEMA proposes adding a guidance In proposed paragraph (b)(2)(i), FEMA 206.206(c)(2) allows a recipient to subparagraph to the first and second states the requirements of a second review and forward an applicant’s appeal paragraphs for consistency. appeal, which must include all appeals along with a written FEMA already provides guidance for documented justification supporting the recommendation within 60 days. FEMA first appeals in the Public Assistance applicant or recipient’s position; the has combined the two 60-day deadlines Program and Policy Guide, FP–104– specific amount in dispute, as into a 120-calendar day deadline. 009–2 ( 2018). FEMA likewise applicable; and the specific provisions Proposed paragraph (b)(2)(ii)(B) states provides guidance for staff in Federal law, regulation, or policy that within 90 calendar days following implementing appeals procedures in with which the applicant or recipient receipt of a second appeal, if there is a Recovery Directorate Manual Public believes the FEMA determination was need for additional information, the Assistance Program Appeal Procedures inconsistent. This is consistent with the Assistant Administrator for the (Version 4) Approval Date: , current regulation, with the substitution Recovery Directorate will provide 2016. As such, proposed paragraph of ‘‘FEMA determination’’ for ‘‘initial electronic notice to the recipient and (b)(1)(vi) will not alter current practice. action’’ and ‘‘appellant’’ for ‘‘applicant applicant. If there is no need for or recipient’’ for clarity as described additional information, then FEMA will D. Second Appeal (Proposed 44 CFR above. not provide notification. The Assistant 206.206(b)(2)) Also consistent with the proposed Administrator for the Recovery The introductory paragraph to paragraph (b)(1)(i) described above, Directorate will generally allow the proposed § 206.206(b)(2) states that if FEMA proposes replacing ‘‘monetary recipient 30 calendar days to provide the Regional Administrator denies a first figure in dispute’’ with ‘‘amount in any additional information. This is appeal in whole or in part, the applicant dispute, as applicable,’’ since FEMA consistent with the current regulation, may make a second appeal in writing allows an applicant or recipient to except that the current regulation does and submit it electronically through the appeal a FEMA determination that does not include the 30-calendar day time recipient to the Assistant Administrator not concern a monetary figure. limit or simultaneous notification of the for the Recovery Directorate. This is Additionally, FEMA proposes again to applicant. consistent with the current regulation, change ‘‘appellant’’ to ‘‘applicant or Proposed paragraph (b)(2)(ii)(C) states except for the addition of the recipient’’ in this paragraph for that the Assistant Administrator for the requirement to submit electronically. consistency of terminology, and Recovery Directorate will provide This requirement ensures the accurate replacing ‘‘shall’’ with ‘‘must’’ for electronic notice of the disposition of and clear tracking of transmittal dates of purposes of plain language. FEMA the appeal to the recipient and applicant appeals for the purposes of establishing finally proposes reorganizing the last within 90 calendar days of receipt of the deadlines for arbitrations. In addition, sentence by separating it into appeal or within 90 calendar days the current regulation refers to the subparagraphs (b)(2)(i)(A)–(b)(2)(i)(C). following the receipt of additional ‘‘Assistant Administrator for the Proposed paragraph (b)(2)(ii) information or following expiration of Disaster Assistance Directorate.’’ The addresses time limits for second the period for providing the title of this position is now the appeals. Under proposed paragraph information. This is consistent with the ‘‘Assistant Administrator for the (b)(2)(ii)(A), if the Regional current regulations except for the Recovery Directorate;’’ the proposed Administrator denies a first appeal in requirement that the notice be provided regulation reflects this new title. whole or in part, the applicant may electronically, and the simultaneous The second to last sentence under the make a second appeal through the notification of the applicant. Again, the introductory paragraph to proposed recipient within 60 calendar days from change to electronic submission is to § 206.206(b)(2) states that the recipient the date of the Regional Administrator’s accurately track the transmittal/receipt. must include a written recommendation first appeal decision and the recipient Proposed paragraph (b)(2)(iii) states on the applicant’s appeal with the must electronically forward to the that in appeals involving highly electronic submission of the applicant’s Assistant Administrator for the technical issues, the Assistant second appeal to the Assistant Recovery Directorate the applicant’s Administrator for the Recovery Administrator for the Recovery second appeal with a recommendation Directorate may, at his or her discretion, Directorate. This is consistent with within 120 calendar days from the date submit the appeal to an independent FEMA’s current implementation of of the Regional Administrator’s first scientific or technical person or group § 206.206(c)(2). FEMA’s proposed appeal decision. FEMA will deny all having expertise in the subject matter of language regarding the mandatory second appeals it receives from the the appeal for advice or recommendation includes electronic recipient more than 120 calendar days recommendation. The paragraph further submission to the Assistant from the date of the Regional states that the period for this technical Administrator for the Recovery Administrator’s first appeal decision. review may be in addition to other Directorate. Again, the change to This proposed language allows the allotted time periods and within 90 electronic submissions is to accurately recipient the same level of review and calendar days of receipt of the report, track the transmittal/receipt of involvement in the second appeal the Assistant Administrator for the recommendations for the purposes of process as they have with the first Recovery Directorate will provide establishing deadlines. appeals process, which is consistent electronic notice of the disposition of The last sentence under the with how FEMA currently implements the appeal to the recipient and introductory paragraph to proposed § 206.206, and emphasizes that FEMA applicant. Proposed paragraph (b)(2)(iii) § 206.206(b)(2) states that the recipient will deny all second appeals it receives has been added to this section to be may make recipient-related second from the recipient more than 120 consistent with proposed paragraph appeals to the Assistant Administrator calendar days from the date of the (b)(1)(iii), which mirrors this section for for the Recovery Directorate. This is Regional Administrator’s first appeal first appeals. consistent with the current third decision. This addition is not a new Proposed paragraph (b)(2)(iv) sentence in paragraph 206.206(a) that deadline. Currently, 44 CFR addresses the effect of an appeal and has

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been added to this section to be is consistent with 42 U.S.C. guidance as necessary to supplement consistent with the proposed paragraph 5189a(d)(5)(A). paragraph (b)(3). This proposed rule is in (b)(1)(iv), which mirrors this section FEMA is proposing in paragraph consistent with 42 U.S.C. 5189a(d)(5)(A) for first appeals. 206.206(b)(3)(iii)(B)(1) a 60 calendar day and directly corresponds to language Proposed paragraph (b)(2)(v) states deadline for submission of requests for contained in 44 CFR 206.209(m). that if the Assistant Administrator for arbitration. FEMA is proposing 60 the Recovery Directorate grants an calendar days to be consistent with the F. Finality of Decision (Proposed 44 CFR appeal, the Assistant Administrator for submission time limits for second 206.206(c)) the Recovery Directorate will direct the appeals. Proposed paragraph 206.206(c) states Regional Administrator to take Proposed paragraph that a FEMA final agency determination appropriate implementing action(s). 206.206(b)(3)(iii)(B)(2) provides that if or a decision of the Assistant Proposed paragraph (b)(2)(v) has been the first appeal was timely submitted, Administrator for the Recovery added to this section for consistency and the Regional Administrator has not Directorate on a second appeal with the proposed paragraph in rendered a decision within 180 calendar constitutes a final decision of FEMA. In (b)(1)(v), which mirrors this section for days of receiving the appeal, an the alternative, a decision of the first appeals. applicant may electronically submit a majority of the CBCA panel constitutes Proposed paragraph (b)(2)(vi) withdrawal of the pending appeal a final decision, binding on all parties. addresses guidance and has been added simultaneously to the recipient, the See 48 CFR 6106.613. (CBCA’s Decision; to this section for consistency with the FEMA Regional Administrator, and the finality regulation.) Final decisions are proposed paragraph (b)(1)(vi), which CBCA. The applicant may then submit not subject to further administrative mirrors this section for first appeals. a request for arbitration within 30 review. This is consistent with the E. Arbitration (Proposed 44 CFR calendar days from the date of the provision in 42 U.S.C. 5189a(d)(1) that 206.206(b)(3)) withdrawal of the pending appeal. This CBCA decisions are binding. The proposed language describes the right to purpose of this paragraph is to clarify Proposed paragraph 206.206(b)(3)(i) arbitration consistent with 42 U.S.C. that an applicant cannot appeal, states that an applicant may request 5189a(d)(5)(A) and adds a 30-day arbitrate, or pursue any administrative arbitration from the CBCA if there is a deadline to ensure that applicants make remedy for any matter for which FEMA disputed agency determination arising requests for arbitration promptly. Since has issued a final agency determination from a major disaster declared on or the applicant will have already received or a second appeal decision; or after January 1, 2016. This is consistent 60 calendar days when they initially regarding which the CBCA has issued with the requirements set forth in 42 filed their appeal, FEMA believes that an arbitration decision. U.S.C. 5189a(d), as amended by Section allowing 30 calendar days to request 1219 of the DRRA. The proposed G. Removal of Current 44 CFR arbitration following withdrawal of their paragraph sets forth additional 206.206(e), Transition appeal is a sufficient submission period. requirements for eligibility to request If the applicant does not request FEMA proposes removing current arbitration, stating in (b)(3)(i)(B) that the arbitration within 30 calendar days after paragraphs 206.206(e)(1) and (2) as they amount in dispute is greater than withdrawing their pending appeal, then are no longer necessary for this section. $500,000, or greater than $100,000 for the decision of FEMA becomes the final FEMA proposes removing current an applicant for assistance in a rural paragraph 206.206(e)(3) because FEMA area; and in (b)(3)(i)(C) that the Regional agency determination. Proposed paragraph proposes defining ‘‘final agency Administrator has either denied a first 206.206(b)(3)(iii)(C) states that the determination’’ in § 206.206(a). Using appeal decision or received a first request for arbitration must contain a the proposed term ‘‘final agency appeal but not rendered a decision written statement that specifies the determination’’ to replace the current within 180 calendar days of receipt. amount in dispute, all documentation term ‘‘final administrative decision,’’ These eligibility requirements are supporting the position of the applicant, used in § 206.206(e)(3), will align consistent with the requirements set the disaster number, and the name and FEMA’s regulation with the language forth in 42 U.S.C. 5189a(d). FEMA address of the applicant’s authorized introduced by Congress in 42 U.S.C. added proposed paragraph (b)(3)(ii) to representative or counsel. This rule is 5189a(d)(5)(B), offering consistency clarify that arbitration is in lieu of a consistent with 42 U.S.C. with the statute. second appeal. The proposed regulatory 5189a(d)(5)(A), which refers to the text clarifies that an applicant cannot IV. Regulatory and Statutory Analyses arbitration process established under submit a second appeal after requesting the authority of section 601 of ARRA A. Executive Order 12866, as Amended, arbitration. 10 Proposed paragraph 206.206(b)(3)(iii) codified at 44 CFR 206.209. Regulatory Planning and Review, Proposed paragraph 206.206(b)(3)(iv) details how applicants may request Executive Order 13563, Improving states that expenses for each party will arbitration. Proposed paragraph Regulation and Regulatory Review; and be paid by the party who incurred the 206.206(b)(3)(iii)(A) states that an Executive Order 13771, Reducing expense. This is consistent with 42 applicant may initiate arbitration by Regulation and Controlling Regulatory U.S.C. 5189a(d)(5)(A). Since 42 U.S.C. submitting an electronic request Costs 5189a(d)(1) requires the Civilian Board simultaneously to the recipient, CBCA, Executive Orders 12866 (‘‘Regulatory of Contract Appeals to conduct and FEMA. See 48 CFR part 6106 Planning and Review’’) and 13563 arbitrations, CBCA’s regulations state (CBCA’s ‘‘Rules of Procedure for (‘‘Improving Regulation and Regulatory that the CBCA arbitrates at no cost to the Arbitration of PA Eligibility or Review’’) direct agencies to assess the parties. (See 48 CFR 6106.606.) Repayment’’). Proposed paragraph costs and benefits of available regulatory Proposed paragraph 206.206(b)(3)(v) 206.206(b)(3)(iii)(B)(1) states that an alternatives and, if regulation is states that FEMA may issue separate applicant must submit a request for necessary, to select regulatory arbitration within 60 calendar days from 10 American Recovery and Reinvestment Act of approaches that maximize net benefits the date of the Regional Administrator’s 2009, Public Law 111–5, 123 Stat. 115 (Feb. 17, (including potential economic, first appeal decision. This proposed rule 2009), 26 U.S.C. 1 note. environmental, public health and safety

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effects, distributive impacts, and where an applicant has had a first already available, and eligible equity). Executive Order 13563 appeal pending with FEMA for more applicants have been notified of this emphasizes the importance of than 180 calendar days. Applicants option.12 quantifying both costs and benefits, of choosing arbitration would have their As amended by Section 1219 of the reducing costs, of harmonizing rules, case heard by a panel of judges with the DRRA, 42 U.S.C. 5189a(d) names the and of promoting flexibility. Executive CBCA. A decision by the majority of the CBCA as the entity responsible for Order 13771 (‘‘Reducing Regulation and CBCA panel constitutes a final decision conducting these arbitrations. The Controlling Regulatory Costs’’) directs that would be binding on all parties. CBCA has promulgated regulations at 48 agencies to reduce regulation and Final decisions would not be subject to CFR part 6106 establishing its control regulatory costs and provides further administrative review. arbitration procedures for such purpose. that ‘‘for every one new regulation Pursuant to 42 U.S.C. 5189a, as FEMA is proposing in paragraph issued, at least two prior regulations be amended by section 1219 of the DRRA, 206.206(b)(3)(iii)(B) a 60 calendar day identified for elimination, and that the to request arbitration, an applicant (1) deadline for submitting requests for cost of planned regulations be prudently must have a dispute arising from a arbitration. FEMA is proposing this as managed and controlled through a disaster declared after January 1, 2016; FEMA does not want different budgeting process.’’ (2) must be disputing an amount that submission time limits for second The Office of Management and Budget exceeds $500,000 (or $100,000 for an appeals and arbitrations. Rather, FEMA (OMB) has designated this rule as a non- applicant in a ‘‘rural area’’ with a believes that there should be significant regulatory action, under population of less than 200,000 and consistency between the time to request section 3(f) of Executive Order 12866. outside of an urbanized area); and, (3) arbitration and the time to submit Accordingly, OMB has not reviewed it. must have submitted a first appeal and second appeals for administrative ease Due to this non-significant has either received a denial of the first and to reduce potential confusion determination, this rule is also exempt appeal or has not received a decision amongst applicants. from the requirements of Executive after 180 calendar days. Affected Population Order 13771. See the OMB This proposed rule would directly Memorandum titled ‘‘Guidance affect applicants or recipients disputing The proposed rule would affect PA Implementing Executive Order 13771, FEMA PA eligibility determinations or applicants arising from major disaster titled ‘Reducing Regulation and disputing the amount awarded for PA declarations. Specifically, applicants Controlling Regulatory Costs’ ’’ (, projects. Applicants would be required that (1) submitted a first appeal and 2017.) to submit appeals through their State, or received a negative decision, or, (2) have FEMA is proposing this rule to in the case of a Tribal declaration,11 a first appeal pending for more than 180 implement a new right of arbitration their Tribal government (recipients). days and wish to withdraw the appeal authorized by DRRA, and to revise its The recipient would then forward the in favor of arbitration. Applicants may only request arbitration for disputes in regulations regarding first and second request to the FEMA Regional excess of $500,000, or $100,000 in rural PA appeals. Administrator, along with a areas, and for disputes that arise from FEMA’s PA Program provides Federal recommendation for a first appeal. grant assistance to government If an applicant has not received a major disasters declared on or after organizations and eligible private decision on their first appeal after 180 January 1, 2016. nonprofit (PNP) organizations following days and meets the other two Summary of Regulatory Changes a Presidential disaster declaration. The previously-outlined criteria, they may PA Program is administered through a FEMA proposes to revise its current withdraw the first appeal and request PA appeals regulation at 44 CFR coordinated effort between FEMA, arbitration. Alternatively, if the States, or federally recognized Tribes 206.206 to add in the new right to applicant does not agree with the arbitration under DRRA, in conjunction and local governments or eligible PNPs Regional Administrator’s decision on (subrecipients). with some revisions to the current the first appeal, they may either submit appeals process. DRRA adds arbitration Need for Regulatory Action a second appeal to the FEMA Assistant as a permanent alternative to a second Administrator for the Recovery Under current regulations, when appeal under the PA Program, or for Directorate or request arbitration. A FEMA determines that an applicant or applicants that have had a first appeal panel of judges with the CBCA would recipient is ineligible for PA funding, or pending with FEMA for more than 180 hear any arbitration cases. The applicant if the applicant or recipient disputes the calendar days that may withdraw such would send a representative and amount awarded, FEMA has appeal and submit a request for possibly expert witnesses to the implemented a process to appeal the arbitration, provided the dispute is in arbitration hearing. The recipient would decision. First, the applicant or excess of $500,000, or $100,000 in rural also send a representative to support the recipient can appeal to the FEMA areas, and for disputes that arise from applicant. FEMA representatives and Regional Administrator. If the applicant major disasters declared on or after expert witnesses would also attend the or recipient does not submit a second January 1, 2016. The other major hearing to defend FEMA’s appeal within 60 days, the result of the proposed revisions to 44 CFR 206.206 determination. include adding definitions; adding first appeal is the final agency The proposed rule would codify determination. If the applicant or subparagraphs to clarify what actions regulations for the appeals and FEMA may take and will not take while recipient is not satisfied with the result arbitration process as directed by 42 of the first appeal, they can submit a U.S.C. 5189a(d)(5). Applicants are 12 On December 18, 2018, FEMA implemented second appeal to the FEMA Assistant eligible for arbitration for disputes section 1219 of DRRA by posting a Fact Sheet on Administrator for the Recovery arising from major disasters declared on its website. After CBCA published their , Directorate. The result of the second or after January 1, 2016. This process is 2019 proposed rule, see 84 FR 7861, FEMA updated appeal is a final decision of FEMA. the: Section 1219 Public Assistance Appeals and FEMA is proposing in this rule to Arbitration Fact Sheet (3–27–19). A link to the 11 Tribes may choose to apply for PA current Fact Sheet: https://www.fema.gov/media- implement provisions for arbitration in independently as a recipient (tribal declaration) or library/assets/documents/175821. Accessed May lieu of a second appeal, or in cases may submit through their State as a subrecipient. 15, 2020.

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an appeal is pending and state that in progress, so FEMA does not have from the Hurricane Katrina and Rita FEMA may issue separate guidance as available data on the outcome of these disasters pursuant to 44 CFR 206.209, in necessary, similar to current 44 CFR cases. Of the 10 closed cases, FEMA lieu of filing a first appeal, from 2009 206.209(m); adding a finality of decision prevailed in 6 cases, the applicant through 2017 to derive an estimate on paragraph; requiring electronic prevailed in 3 cases, and the applicant the number of arbitration cases that submission for appeals and arbitrations withdrew from the arbitration process applicants might submit per year documents; and clarifying overall time prior to a decision in 1 case. Of the four pursuant to 42 U.S.C. 5189a(d). limits for first and second appeals. cases involving PNPs, FEMA prevailed Pursuant to 42 U.S.C. 5189(d)(5)(A), in three cases and the applicant arbitrations authorized by the DRRA Assumptions prevailed in one case. These figures will must follow the process established in This analysis uses the following continue to change as FEMA continues 44 CFR 206.209 for Katrina and Rita assumptions: to receive arbitration requests. arbitrations, so FEMA relied on the • All monetary values are presented While arbitration is available for annual average percentage of cases in 2018 dollars. FEMA used the Bureau disaster declarations retroactive to submitted under this regulation as a of Labor Statistics (BLS) Consumer Price January 1, 2016, the process did not basis for estimating the number of cases Index for All Urban Consumers (CPI–U): become available to applicants until that would arise for this proposed rule. U.S. city average, all items, by month, FEMA published guidance in December The authority to arbitrate in lieu of Annual Average as published May 2018, and FEMA did not begin receiving filing a first appeal for Hurricanes 2019.13 arbitration requests until , 2019. • Katrina and Rita became available in This proposed rule does not apply This means that FEMA only has 14 February 2009 and 2017 is the latest to emergency disaster declarations. months of historical data, and therefore, calendar year where complete data was Thus, FEMA only included major FEMA also relies on older arbitration available at the time of this analysis. disaster declarations in this analysis. regulations as a proxy for the expected • Applicants could arbitrate in lieu of a FEMA assumes the length of time number of arbitration cases arising out first appeal only if the amount of the for an arbitration case is based on the of this proposed rule. project was greater than $500,000.15 hearing location. FEMA previously had regulations During this period, applicants submitted • FEMA used 2018 wage rates for all permitting arbitrations arising from a total of 75 arbitrations and a total 290 parties involved in arbitration cases. disaster declarations for Superstorm first appeals.16 From this available data, Baseline Sandy. No applicants requested applicants chose arbitration in lieu of a arbitration pursuant to these Following guidance in OMB Circular first appeal 26 percent of the time ((75 regulations. The authority for these ÷ × A–4, FEMA assesses the impacts of this 290) 100 = approximately 26 arbitrations has sunset and FEMA has percent). proposed rule against a pre-statutory since removed the regulations. FEMA baseline. The pre-statutory baseline is Pursuant to 42 U.S.C. 5189(d)(5)(B), has regulations, at 44 CFR 206.209, arbitration is authorized by the DRRA in an assessment of what the world would permitting arbitrations arising from look like if the relevant statute(s) had lieu of a second appeal where the disaster declarations for Hurricanes dispute is more $500,000, or $100,000 not been adopted. In this instance, Katrina and Rita. This regulation is only FEMA has been accepting arbitration for rural areas. For second appeals available for PA applicants under estimates, FEMA looked at all PA cases since the implementation of Hurricane Katrina and Rita disaster DRRA, and retroactive to January 1, appeals from 2009 through 2017, rather declarations. The number of arbitrations than just the appeals resulting from 2016. Since the statute has already been submitted under this authority and the implemented and because this rule is Hurricanes Katrina and Rita since a process relied on to conduct these second appeal was available to all not making additional substantive arbitrations provide insight to project changes, the rule has no cost or benefits applicants. FEMA found that there were the number of arbitration cases in this 17 related to the new right of arbitration. 801 second appeals submitted. Of that proposed rule. While the Katrina/Rita total, FEMA had data on the amount in The benefit of this rule is making arbitration regulations have some key information publicly available in the dispute for 559 appeals. FEMA applied differences from the proposed the proposed urban/rural and minimum CFR for transparency and to prevent any regulations, such as time frames and confusion on the most up-to-date allowing applicants to request 15 Please note that arbitration cases for Hurricanes arbitration process. arbitration in lieu of first appeals, it is Katrina and Rita are not bound by a threshold for Currently, FEMA has no permanent the best historical data that FEMA has rural areas as is proposed by this rule. FEMA does regulations for arbitrations outside of available to estimate the number of not know if this limitation would result in more or Hurricanes Katrina and Rita. Since the expected arbitration cases for this less cases filed. passage of the DRRA, certain PA 16 Data on appeals and arbitrations is provided by proposed rule. FEMA’s Office of Chief Counsel Disaster Disputes applicants under declarations since FEMA recognizes that the regulations Branch. Not all of these first appeals would have January 1, 2016 may request arbitration at 44 CFR 206.209 have a 30 day time been eligible for arbitration. To be eligible for pursuant to 42 U.S.C. 5189a(d). On limit for submitting arbitration requests; arbitration, the amount in dispute would have had 21, 2019, CBCA published a final rule to have been greater than $500,000. FEMA does not whereas, FEMA is proposing a 60 have amount in dispute data available for these (see 84 FR 29085) and FEMA has calendar-day time limit for arbitrations cases, so the arbitration percentage may be published a corresponding fact sheet. under this proposed rule. FEMA does overstated. Between January 1, 2016 and , not know the impact that these 17 During the period of 2009–2017, 801 second 2020, FEMA received 15 14 requests for additional 30 days may have on the level appeals were submitted. FEMA has amount in arbitration. Five of these cases are still dispute data for 559 cases. The amount in dispute number of arbitrations submitted. for 242 cases was not available. FEMA does not have the amount in dispute data on the 242 cases 13 Accessed and downloaded , 2019. Number of Potential Arbitration Cases because FEMA did not maintain electronic records https://www.bls.gov/cpi/tables/supplemental-files/ In addition to reviewing the limited for appeals prior to 2015. Prior to 2015, this data historical-cpi-u-201905.pdf. was manually entered into a database with many 14 The number of arbitration requests was historical data available on the 15 fields left blank. Therefore, the percentages used for provided by FEMA’s Office of Chief Counsel arbitration cases, FEMA also examined estimates for this proposed rule are based on a total Disaster Disputes Branch as of May 7, 2020. the number of arbitrations submitted of 559 cases.

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project amount requirements to these ((261÷ 559) × 100 = approximately 47 second appeals that would have been appeals and found that 261 or 47 percent). eligible under this proposed rule, by percent would have been eligible for FEMA then applied the arbitration year, from 2009 to 2017 as shown in arbitration under this proposed rule 18 rate of 47 percent from the Katrina and Table 1. Rita arbitrations to the number of

TABLE 1—TOTAL AND ANNUAL AVERAGE ESTIMATED ARBITRATION CASES PER YEAR

Expected Number of Percent Percent number of CY second eligible under choosing arbitration appeals proposed rule arbitration cases

2009 ...... 122 47 26 15 2010 ...... 92 47 26 11 2011 ...... 107 47 26 13 2012 ...... 93 47 26 11 2013 ...... 102 47 26 12 2014 ...... 82 47 26 10 2015 ...... 43 47 26 5 2016 ...... 83 47 26 10 2017 ...... 77 47 26 9

Total ...... 801 ...... 96

Average ...... 89 ...... 11

Based on historical data from 2009 representatives, and FEMA’s number of expert witnesses or none. through 2017 and case data from 44 CFR representatives; and contract costs for Because of the variability in the way 206.209, FEMA estimates that there applicants and FEMA to retain legal arbitrations are conducted, FEMA is would be an average of 11 arbitration counsel and experts. Cost estimates are presenting what it considers a typical cases in lieu of a second appeal per year based on the expected number of case upon which to base its cost under the proposed rule. arbitration cases per year. Since FEMA estimates. This ‘‘typical case’’ is based The option to withdraw a first appeal does not reimburse for applicant on recent experience with the 15 and request arbitration was not available arbitration expenses, FEMA does not arbitration already cases filed. under 44 CFR 206.209, so FEMA could have data on the expenses incurred by Generally, the applicant will use one or not use this historical data 19 to estimate applicants who have arbitrated from two attorneys and at least one expert the number of arbitration cases after a Hurricanes Katrina and Rita to serve as witness. However, the arbitration first appeal withdrawal. However, a proxy for this proposed rule. Other process is extremely flexible, and an arbitration has been available under 42 provisions of the proposed rule, such as applicant can use whatever resources it U.S.C. 5189a(d)(5) since January 1, timeframe requirements, electronic thinks would be most appropriate for its 2016. So far, 15 cases were submitted, filing requirements, technical advice case. For example, in one case, the with two submitted for a first appeal and clarifications would not have applicant hired several non-local lasting more than 180 days. Based on associated costs. FEMA does not expect attorneys for representation. In another this limited data, FEMA estimates that the electronic filing requirement to have case, the arbitration was conducted via 13.3 percent of arbitration cases would associated costs since nearly all written reports only, and no hearing was result from a withdrawal of a first applicants have access to internet and conducted. appeal. ((2 ÷ 15) × 100 = 13.3 percent). email, and most submit arbitration Costs to the CBCA are not discussed Applying the 13.3 percent rate to the requests through their attorneys. The in this analysis. CBCA promulgated annual average number of expected proposed timeframe requirements their own regulations regarding their arbitration cases would result in one would align the submission deadlines procedures for FEMA arbitration cases. additional arbitration case per year (13.3 for arbitration and appeals and would Under DRRA, CBCA will be responsible percent × 11 cases = 1.46, rounded to not place additional burdens on the for covering the costs of conducting one case). Therefore, FEMA estimates an applicants. FEMA currently provides arbitration hearings. All other parties average of 12 arbitration cases per year technical advice as needed, so this including the applicant, the recipient, (11 + 1 = 12 arbitrations per year). would not be a new practice under this and FEMA would be responsible for proposed rule. Costs covering their own expenses. The The arbitration process is highly proposed rule does not mandate any Based on experience from the customizable for the applicant. The costs for the applicant or recipient. The arbitrations conducted for Hurricanes applicant may choose to use an arbitration process would be entirely Katrina and Rita, costs from this attorney, or several attorneys to voluntary on the part of the applicant. proposed rule would arise mainly from represent them during the arbitration Applicants would choose to request travel expenses; opportunity costs of process. The applicant may also choose arbitration, if they determine that the time for the applicant and applicant’s not to hire legal representation at all. cost of arbitration is justified by the representatives, recipient’s Additionally, the applicant may use any potential benefits.

18 Out of 559 cases, 166 had an amount in dispute $500,000, of which 95 were classified as rural. 261 19 Out of 3,778 first appeals between 2009 and greater than $500,000 and would be eligible (166 + 95 = 261) cases out of 559, or 47 percent 2017, 1,834 or 49 percent lasted longer than 180 regardless of the urban/rural classification. 193 would have met the eligibility requirements for days. ((1,834 ÷ 3,778) × 100 = 49 percent). cases were for amounts between $100,000 and arbitration in lieu of a second appeal.

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This analysis estimates a range of hourly wages of $101.24 for Lawyers, employees is not available, FEMA used potential costs based on the applicant’s $43.80 for Court Reporters, $69.66 for the Federal lodging and per diem rates or recipient’s use of attorneys for Engineers, and $86.96 for General and for applicants travelling to Washington representation. The proposed rule Operations Managers. DC to attend hearings. According to would not require attorneys to represent FEMA used the 2018 hourly wage GSA, in 2018, the average price of a any party for arbitration. However, tables for the Washington-Baltimore- hotel room in the U.S. in the 24 FEMA would be represented by Arlington, DC–MD–VA–WV–PA Washington, DC was $219 per night and attorneys at any arbitration hearing. locality rate for FEMA employees outside of Washington, DC was $93 per The costs to the applicant, recipient, participating in arbitration cases. Based night. The per diem rate for meals and and FEMA would be due to travel and on current FEMA practice, FEMA incidentals on the first and last travel opportunity cost of time and contract assumes that GS–13 employees would costs for legal counsel and experts. To perform both legal and other services for days is $52 and $69 for other travel estimate the opportunity cost of time, an arbitration case and the work would day(s) in Washington, DC. Similarly, the FEMA assumed that each case would be reviewed by a manager at the GS–15 per diem rates for meals and incidentals take each party 46.5 hours 20 (rounded level. The hourly GS–13 Step 5 salary on the first and last day is $39 and $51 to 47 hours) to prepare for the hearing, was $52.66, and the hourly GS–15 step for the other days outside of attend the hearing, and for post hearing 5 salary was $73.20. In order to account Washington, DC. work. Hearings have historically lasted for the benefits paid by employers, The U.S. Department of two working days, or 16 hours.21 FEMA used a 1.46 multiplier to Transportation (DOT) provides Additional time would be required for calculate loaded wage rates of $76.88 for information on the price of domestic travel as is discussed later in this a GS–13 Federal employee and $106.87 airfare.26 According to the Bureau of analysis. FEMA also assumes that each for a GS–15 Federal employee. Transportation Statistics, the annual party would make use of expert Travel cost of an average domestic flight within witnesses in support of their case. the United States, the average airfare Additionally, FEMA generally pays for Arbitration cases are heard by a panel was $350 roundtrip.27 The total travel a court reporter. of judges of the CBCA, which is based in Washington, DC. The arbitration costs for applicants attending hearings Opportunity Cost of Time process is very customizable, so in Washington, DC would be $1,249 per A typical arbitration request requires applicants can choose to have the person ($350 average airfare + ($219 the work of several people, including hearings locally, where a CBCA judge hotel in DC × 3 nights) + ($69 meals and lawyers to represent the applicants, a would travel to their location, and incidentals × 2 days of stay) + ($52 court reporter to take a transcript of the FEMA would also send its meals and incidentals × 2 travel days)) hearing, and State, local, Tribal, or PNP representatives. Alternatively, cases = $1,249). managers who are responsible for could be heard at the CBCA, and the compiling and submitting the original applicant would travel to Washington, Expert Witnesses PA request. Applicants will also DC, along with any lawyers and expert FEMA assumes that each party would typically supply expert witnesses when witnesses. Finally, the applicant could make use of expert witnesses to support choose to have the CBCA review making their case to the CBCA panel. their case. The expert witnesses would documents, and nobody would be FEMA used General and Operations be required to travel to the hearing at Managers to represent State, Tribal, required to travel. Because PA the expense of the party that hired them. local, and PNP managers. Many PA applicants are located throughout the Based on historical experience, projects involve repair or replacement of U.S. and can be travelling from any preparing for the hearing is estimated to buildings and infrastructure, so FEMA location within the U.S., FEMA used assumes that Engineers would be the average nationwide travel costs to take 20 hours, the duration of the most likely occupation used as expert estimate the travel costs for this rule. hearing is estimated to be 16 hours and witnesses. The U.S. General Service the travel time is estimated at 11 hours FEMA used hourly wage rates from Administration (GSA) provides for a total of 47 hours for a hearing in the Bureau of Labor Statistics guidance on travel policy, hotel rates, Washington, DC, the opportunity costs Occupational Employment Statistics for and meals and incidentals for Federal of time for one expert witness to attend the following occupations: Lawyers employees. FEMA used GSA data on a hearing would be $3,274 ($69.66 × 47 (SOC 23–1011), $69.34; Court Reporters hotel prices and per diem rates to hours). Thus, the total cost for one (SOC 23–2091), $30.00; Engineers (SOC estimate travel expense costs of expert witness’ travel and opportunity 17–2000), $47.71; and General and attending a hearing in person.25 Because cost of time is $4,523 ($1,249 + $3,274). Operations Managers (SOC 11–1021) data on travel expenses for non-Federal Table 2 shows the detailed the costs of $59.56.22 To account for employee an expert witness. To provide a range of benefits, FEMA used a wage multiplier wages and salary of $24.91. Values for the total estimates since cases vary, a hearing at 23 compensation and wages and salary are for civilian of 1.46, resulting in fully-loaded workers in the all workers occupational group. the applicant’s location for an expert Accessed , 2019. witness would cost $2,508 ($69.66 × 36 20 Based on information provided by FEMA Office 24 U.S. Office of Personnel Management. 2018 hours). of Chief Counsel Disaster Disputes Branch. General Schedule (GS) Locality Pay Tables. 21 Based on information provided by FEMA Office Accessed May 22, 2020. https://www.opm.gov/ of Chief Counsel Disaster Disputes Branch. policy-data-oversight/pay-leave/salaries-wages/ 22 U.S. Bureau of Labor Statistics. National salary-tables/18Tables/html/DCB_h.aspx. 26 Bureau of Transportation Statistics. ‘‘Annual Occupational Employment and Wage Estimates 25 U.S. General Services Administration. ‘‘FY Fares 1995–2019 3Q 2019’’ (.xlsx) , 2020. United States. May 2018. Accessed , 2020. 2018 Per Diem Rates for District of Columbia .’’ https://www.bls.gov/oes/2018/may/oes_nat.htm. Accessed on , 2020. Standard CONUS rate U.S. Department of Transportation. https:// 23 BLS Employer Costs for Employee used for lodging and MI&E. https://www.gsa.gov/ www.bts.gov/sites/bts.dot.gov/files/ Compensation, Table 1, December 2018 located at travel/plan-book/per-diem-rates/per-diem-rates- Annual%20Fares%201995- https://www.bls.gov/news.release/archives/ecec_ lookup/?action=perdiems_report&state=DC&fiscal_ 2019%203Q%202019.xlsx. 03192019.pdf. The loaded wage factor is equal to year=2018&zip=&city=. Per diem rates are calendar 27 The airfare was adjusted to 2018 dollars and the total compensation of $36.32 divided by the year instead of fiscal year. excludes airline tickets under $50.

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TABLE 2—ESTIMATED COST PER EXPERT WITNESS, WASHINGTON, DC HEARING [2018$]

Opportunity Three nights costs of time Round trip flight of lodging at Meals and Total travel ex- for a hearing Total expert $219 per night incidentals penses in Washington, witness cost DC

(A) (B) (C) (D) = (A + B + (E) (D + E) C)

$350 ...... $657 $242 $1,249 $3,274 $4,523

Cost for the Applicant discussed in this analysis, costs include the applicant’s representative is an 47 hours for hearing preparation, attorney, the opportunity costs of time The total cost for the applicant attending the hearing, and post hearing would be $10,916 ($101.24 per hour includes travel expenses (round trip work, plus 11 hours of travel time for wages for a lawyer × 58 hours) + ($86.96 flight, three nights of lodging, and meals applicants and the applicant’s per hour wages for a general and and incidentals) and opportunity costs representative. FEMA notes that an operations manager × 58 hours) = of time for the applicant, the applicant’s applicant can choose not to bring a $10,916). If the applicant does not use representatives, and the expert representative or an applicant’s an attorney as their representative, the witnesses. The total travel expenses for representative could be one attorney or opportunity costs of time would be the applicant and the representative in some cases more than one attorney. $10,087 (2 general and operations would be $2,498 ($1,249 × 2 personnel To provide a range of costs, FEMA managers at $86.96 each × 58 hours = = $2,498), if the hearing is held in analyzes the typical case where one $10,087). Table 3 shows the range of Washington DC. As previously attorney or no attorneys are present. If total costs to the applicant.

TABLE 3—RANGE OF APPLICANT COSTS—WASHINGTON, DC HEARING [2018$]

Opportunity cost of time Travel Total

1 Attorney and 1 Non-Attorney ...... $10,916 $2,498 $13,414 2 Non-Attorneys ...... 10,087 2,498 12,585

The total cost to the applicant if they opportunity costs of time for the general and operations manager × 47 were to travel to Washington, DC for a applicant and representative (assuming hours) + ($101.24 for an attorney × 47 hearing with a representative and two the representative is local), and 36 hours hours) + (2 expert witnesses at $69.66 expert witnesses, ranges from $21,631 of opportunity costs of time to attend each × 36 hours) = $13,861) depending ((2 expert witnesses at a cost of $4,523 the hearing for two expert witnesses on who the recipient uses as a each) + $12,585 recipient cost) to (assuming the expert witnesses are representative. Table 4 shows the range $22,460 ((2 expert witnesses at $4,523 local) and would range from $13,190 ((2 of total costs for an applicant for each) + $13,414 recipient and attorney general and operations managers at hearings held at the applicant’s location. cost). $86.96 each × 47 hours) + (2 expert For a local hearing, the costs to the witnesses at $69.66 each × 36 hours) = applicant would include 47 hours of $13,190) to $13,861 (($86.96 for a

TABLE 4—APPLICANT COSTS—LOCAL HEARING [2018$]

Expert Opportunity witnesses cost of time Total

1 Attorney and 1 Non-Attorney ...... $5,016 $8,845 $13,861 2 Non-Attorneys ...... 5,016 8,174 13,190

Cost for the Recipient The cost per arbitration case for the representatives × $1,249) of those recipient, is the opportunity costs of attending the hearing in Washington, The recipient would not present time for the representative totaling DC. As shown in table 5, the total cost information in the arbitration case, but $10,087 (2 general and operations to the recipient would be $12,585 if the would send one or more representatives managers at $86.96 each × 58 hours = hearing was held in Washington, DC. in a supporting role for the applicant. $10,087) and travel expenses $2,498 (2

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TABLE 5—ESTIMATED RECIPIENT COSTS, WASHINGTON, DC HEARING [2018$]

Opportunity cost of time Travel Total

General and Operations Managers ...... $10,087 $2,498 $12,585

For a local hearing, two ($106.87 GS 15 Step 5 Supervisory of subjects, for example soil degradation representatives would spend 47 hours Attorney × 47) hours = $8,636). or building construction. on the case and the cost to the recipient Based on historical experience, FEMA Arbitration hearings do not require would be $8,174 (2 general and would also require four non-attorneys transcription services. However, FEMA operations managers at $86.96 each × 47 (e.g., GS–13 Step 5 program analysts) to has historically hired a court reporter hours = $8,174). support the arbitration case only for the for hearings and provided the transcript duration of the hearing. The opportunity to the CBCA for their records. FEMA Cost to Government/FEMA costs of time associated with the would continue to pay for a court program analysts would be $4,920 (4 GS reporter for the duration of a hearing FEMA would require two attorneys 13 Step 5 program analysts at $76.88 under the proposed rule. The for a typical arbitration case, a GS–13 each × 16 hours = $4,920). Thus, the opportunity costs of time for the court step 5 attorney and a GS–15 step 5 total opportunity costs of time for all six reporter services for a transcript would supervisory attorney, to review and to FEMA personnel would be $13,556. be $701 per arbitration case ($43.80 per prepare a response to the request for FEMA would also call their own hour wages for Court Reporters × 16 arbitration. Based on historical expert witnesses to attend the hearing. hours of arbitration time = $701). experience, the two attorneys’ total time Based on historical experience, FEMA The estimated total cost to FEMA, from preparation to post hearing is 47 assumes that it would use four expert including staff time, expert witnesses hours.28 The opportunity costs of time witnesses per case for a total of $10,032 and transcript services, would be of the attorneys, including preparation ($2,508 cost per expert witness × 4 $24,289 per case. Table 6 presents the and review of a case, is $8,636 (($76.88 expert witnesses = $10,032). The expert cost of each component by opportunity GS 13 Step 5 attorney × 47 hours) + witnesses provide testimony on a range cost of time and other costs.

TABLE 6—ESTIMATED FEMA COSTS—WASHINGTON, DC HEARING [2018$]

Cost for FEMA employees Cost for four expert witnesses Cost of court (2 attorneys Total per-case reporter and 4 program cost to FEMA analysts)

$10,032 ...... $701 $13,556 $24,289

For a hearing at the applicant’s previously mentioned and would be each × 58 hours) $12,397 plus $4,920 for location, FEMA representatives would $1,249 per person for a total of $2,498, non-travelling program analysts need to travel to the location of the if 2 attorneys travel to the applicant’s resulting in a total cost of $17,317. The hearing. Costs for a local hearing would location. Additionally, FEMA estimates estimated costs to FEMA for a local be higher due to paying for travel time that the time would increase to 58 hours hearing are presented in Table 7. as well as actual travel costs. Travel due to 11 hours of travel time for the costs are estimated using the figures attorneys totaling (2 attorneys at $106.87

TABLE 7—ESTIMATED FEMA COSTS—LOCAL [2018$]

Opportunity Cost of court costs of time Travel costs Total per-case Cost for four expert witnesses reporter for FEMA (2 attorneys) cost to FEMA employees

$10,032 ...... $701 $ 17,317 $2,498 $30,548

In addition to these costs, FEMA’s PA wage rate, the additional cost to FEMA to $191,002 ($160,454 + $30,548) if the Program would also hire an Arbitration would be $160,454 per year. Therefore, hearing is held at the applicant’s Coordinator at the GS–13 Step 5 level the annual total costs to FEMA range location. with an annual salary of $109,900.With from $184,743 ($160,454 + $24,289) if the 1.46 multiplier for a fully loaded the hearing is held in Washington, DC

28 Based on information provided by FEMA Office of Chief Counsel Disaster Disputes Branch.

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Total Costs is held in Washington, DC or local to the the hearing was held in Washington, applicant. Government and FEMA costs DC. FEMA estimates that the total costs The total cost per case vary based on would be higher for a hearing held local per case to range between $51,912 and who the applicant uses as a to the applicant, and likewise, applicant $59,343. Table 8 presents the range of representative, and whether the hearing and recipient costs would be higher if estimated costs per arbitration case.

TABLE 8—TOTAL COST PER CASE [2018$]

FEMA Applicant Recipient Total

Low ...... $30,548 $13,190 $8,174 $51,912 High ...... 24,289 22,460 12,585 59,334

As established earlier in this analysis, case for applicant) + (12 × $8,174 per shows the estimated total costs per year FEMA estimate an average of 12 case for the recipient)= $783,398) (low) of this proposed rule. The low cost arbitration cases per year. Therefore, and $872,462((12 cases × $24,289 per estimate assumes that all hearings FEMA estimates the total annual costs case) + $160,454 for a new FEMA would be held at the applicant’s to range between $783,398 ((12 cases × employee + (12 × $22,460 per case for location, while the high estimate $30,548 per case) + $160,454 for a new the applicant) + (12 × $12,585 for the assumes hearings would be held in FEMA employee + (12 × $13,190 per recipient)= $872,462) (high). Table 9 Washington, DC.

TABLE 9—TOTAL COST PER YEAR FOR 12 CASES [2018$]

FEMA Applicant Recipient Total

Low ...... $527,030 $158,280 $98,088 $783,398 High ...... 451,922 269,520 151,020 872,462

Tables 10 and 11 show the total 10- year costs and 10-year costs annualized at 3 percent and 7 percent.

TABLE 10—10-YEAR COST TOTALS USING 3 PERCENT AND 7 PERCENT DISCOUNT RATES [Low Estimate, 2018$]

Applicant Recipient Annual costs Annual costs Year FEMA costs costs costs Total costs discounted at discounted at 3% 1 7% 1

1 ...... $527,030 $158,280 $98,088 $783,398 $759,896 $728,560 2 ...... 527,030 158,280 98,088 783,398 737,099 677,561 3 ...... 527,030 158,280 98,088 783,398 714,986 630,132 4 ...... 527,030 158,280 98,088 783,398 693,536 586,023 5 ...... 527,030 158,280 98,088 783,398 672,730 545,001 6 ...... 527,030 158,280 98,088 783,398 652,548 506,851 7 ...... 527,030 158,280 98,088 783,398 632,972 471,371 8 ...... 527,030 158,280 98,088 783,398 613,983 438,375 9 ...... 527,030 158,280 98,088 783,398 595,564 407,689 10 ...... 527,030 158,280 98,088 783,398 577,697 379,151

Total ...... 5,270,300 1,582,800 980,880 7,833,980 6,651,012 5,370,714

Annualized ...... 783,398 783,398 1 The annualized amounts for 7 percent and 3 percent are equal in this table because the amounts for each year are identical and the first year is discounted.

TABLE 11—10-YEAR COST TOTALS USING 3 PERCENT AND 7 PERCENT DISCOUNT RATES [High Estimate, 2018$]

Applicant Recipient Annual costs Annual costs Year FEMA costs costs costs Total costs discounted at discounted at 3% 1 7% 1

1 ...... $451,922 $269,520 $151,020 $872,462 $846,288 $811,390 2 ...... 451,922 269,520 151,020 872,462 820,899 754,593 3 ...... 451,922 269,520 151,020 872,462 796,273 701,771 4 ...... 451,922 269,520 151,020 872,462 772,384 652,647

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TABLE 11—10-YEAR COST TOTALS USING 3 PERCENT AND 7 PERCENT DISCOUNT RATES—Continued [High Estimate, 2018$]

Annual costs Annual costs Applicant Recipient discounted at Year FEMA costs costs costs Total costs discounted at 3% 1 7% 1

5 ...... 451,922 269,520 151,020 872,462 749,212 606,962 6 ...... 451,922 269,520 151,020 872,462 726,736 564,475 7 ...... 451,922 269,520 151,020 872,462 704,934 524,962 8 ...... 451,922 269,520 151,020 872,462 683,786 488,215 9 ...... 451,922 269,520 151,020 872,462 663,272 454,040 10 ...... 451,922 269,520 151,020 872,462 643,374 422,257

Total ...... 4,519,220 2,595,200 1,510,200 8,724,620 7,407,158 5,981,312

Annualized ...... 872,462 872,462 1 The annualized amounts for 7 percent and 3 percent are equal in this table because the amounts for each year are identical and the first year is discounted.

FEMA believes that it would not have an impartial panel and present evidence favor for the applicant in less than 20 any implementation or familiarization as to why they are disputing a FEMA percent of Katrina/Rita arbitrations.30 costs. FEMA currently has an arbitration determination. Applicants can also The applicant may nevertheless process that is very similar to the retain expert witnesses to provide perceive they have a better opportunity proposed rule for cases arising from support to their position. Expert to gain additional Federal funding Hurricanes Katrina and Rita. FEMA has witnesses provide testimony within through arbitration. Applicants would already notified eligible applicants, their technical specialty to assist the select arbitration as their case would be dating back to January 1, 2016 of their arbitration panel in understanding the eligibility for arbitration under DRRA underlying work for which FEMA heard by a third party, rather than an section 1219. ultimately decides eligibility. appeal process that is conducted Further, applicants would not have Additionally, applicants would have entirely by FEMA. Applicants would familiarization costs because the process the opportunity to respond in real time perceive a more impartial system, if the for requesting arbitration would consist to evidence presented by FEMA, forum encourages both parties to solicit of an email request and would use allowing them more control over the discussion rather than ‘‘paper’’ based materials previously submitted in the dispute than they might have under a appeals. Applicants would expect that application for PA funding. second appeal. Applicants may opt to impartiality would best achieve their hire an expert witness in arbitration to objective of a fair resolution. Benefits help present the disputed information Tables 12 and 13 analyze the The benefits of this proposed rule in a manner more favorable to the historical outcomes from second would be qualitative in nature, and applicant. The ability to hire expert appeals and arbitration from 44 CFR would apply mostly to the applicant. witnesses may provide applicants with 206.209. Because of the unpredictable FEMA believes that this proposed rule additional utility and may be an nature and unique circumstances of would further its mission of supporting incentive to select arbitration. every disaster, these figures may not be State, Tribal, and local governments, as The proposed rule would also allow representative of future outcomes, as the well as eligible PNPs by offering them applicants to present the same technical outcomes are based on the arbitration an alternative procedure for disputing documentation in both the appeals and policies for Hurricanes Rita and Katrina PA eligibility and funding decisions. arbitration procedures. An applicant Applicants retain the option to submit who submits a first appeal, but elects to and the unique circumstances of each a second appeal. The proposed rule withdrawal in favor of arbitration may case. would offer an alternative that the opt to reuse the information in the applicant may see as more impartial request for arbitration that was TABLE 12—SECOND APPEALS because the arbitration cases would be previously submitted in the first appeal. OUTCOMES heard by CBCA judges, as opposed to Applicants may gain utility from the [2009–2017] second appeals that would continue to convenience of reusing documents. be conducted entirely within FEMA. Second Number of Impartiality appeal Percent Additionally, applicants would have the outcome cases opportunity to present their case in It is not possible to quantify an person and call expert witnesses to applicant’s increased utility due to Granted ...... 118 14.7 support their claims. These two options perceived impartiality. The purpose of Denied ...... 445 55.6 Partially Granted ...... 67 8.4 would allow applicants to choose the arbitration is to create a process to Active ...... 1 0.1 course that would be most appropriate resolve the issues in a manner Other 1 ...... 170 21.2 to their circumstances. satisfactory to all parties. Based on past Total ...... 801 100 Customization cases, FEMA has granted or partially granted 23 percent of the second 1 The category of Other includes appeal decision Applicants may select arbitration, if appeals submitted by applicants.29 not available, remand, rescind, arbitration, and they consider this process more CBCA has found in favor or partially in withdrawn. customizable. The arbitration process would provide applicants with the 29 Based on information provided by FEMA Office 30 Based on information provided by FEMA Office opportunity to appear in person before of Chief Counsel Disaster Disputes Branch. of Chief Counsel Disaster Disputes Branch.

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TABLE 13—ARBITRATION OUTCOMES TABLE 13—ARBITRATION OUTCOMES FEMA may award a different amount of UNDER 44 CFR 206.209 UNDER 44 CFR 206.209—Continued grant funding under the arbitration [2009–2017] [2009–2017] process than it would under current regulations that only allow for a second Number of Arbitration outcome Number of Percent Arbitration outcome Percent appeal. However, it would be cases cases speculative for FEMA to make an Binding Decision with- Total ...... 75 100 estimate as to the potential changes in out CBCA ...... 3 4.0 2 The category of Other includes other decision, grant disbursement due to the proposed In Favor of FEMA ...... 17 22.7 dismissed, and ongoing cases. rule. In Favor of Applicant ... 10 13.3 Partial in Favor of Ap- Transfers Impacts plicant ...... 31 41.3 Withdrawn ...... 3 4.0 FEMA is unable to quantify transfers Table 14 summarizes the costs, Other 2 ...... 11 14.7 due to this proposed rule. Transfers benefits, and transfer impacts from the would arise from the possibility that proposed rule.

TABLE 14—OMB CIRCULAR A–4 ACCOUNTING TABLE

Estimates Units Category Period cov- Low estimate High estimate Year dollar Discount rate ered

Benefits: Annualized Monetized ...... $0 $0 2018 7% 10 Years. $0 $0 2018 3% 10 Years. Annualized Quantified ...... 0 0

0 0 Qualitative ...... • Additional option for review of PA projects and decisions. • Greater perception of impartiality in the arbitration process. • Ability to customize arbitration process.

Costs: Annualized Monetized ...... $783,398 $ 872,462 2018 7% 10 Years. $783,398 $4872,462 2018 3% 10 Years. Annualized Quantified ...... 0 0 0 0

Qualitative ...... • Longer time frame to resolve disputes under arbitration option.

Transfers Possible changes to PA grant disbursements.

Effects: Small Entities ...... FEMA expects 9 arbitration cases per year from small entities with an estimated cost of between $13,190 and $22,460 per small entity. Wages ...... None. Growth ...... None.

Uncertainty Analysis Hurricanes Katrina and Rita, which is the current 60 day submission different in a couple of key respects timeframe for second appeals. This The estimates of the costs of the from the proposed arbitration process. additional time may affect the number proposed rule are subject to uncertainty While the cost shares for Katrina and of arbitration cases submitted in the due to the uniqueness of each Rita were 100 percent, cost shares for arbitration case. The cost estimates can future, but FEMA cannot reliably future disaster declarations may be as predict these impacts at this time. vary widely depending on complexity high as 25 percent for applicants. and other factors. As a result, the cost Because Katrina/Rita applicants were Alternatives estimate could be overstated or not required to pay for any portion of FEMA considered several alternative understated. their project cost, they had an incentive There are several sources of to apply for more costly projects and regulatory approaches to the uncertainty in this analysis: The number pursue arbitration when denied. Future requirements in the proposed rule. The of eligible applicants, the proposed disasters with a cost share may lead alternatives included: (1) Not issuing a deadlines for filing, and the potential applicants to be more conservative in mandatory regulation; (2) proposing an number of arbitration cases. Major applying for PA projects, which may alternate definition of rural; and (3) not disasters do not occur on a regular time result in fewer arbitration requests than requiring electronic submission. FEMA interval. The severity of the disaster was indicated in the primary estimate. did not consider a no-action alternative. would affect the number of applicants Additionally, the timeframe for The DRRA mandates FEMA to that decide to apply for funding in the submitting arbitration requests under 44 promulgate a rule allowing the option of PA Program. The number of eligible CFR 206.209 was 30 days. However, arbitration in lieu of a second appeal applicants can vary year-to-year. FEMA is proposing a 60 day submission and specifies the CBCA as the Historical data used in this analysis deadline for arbitration submissions arbitration administrator. As such, was based on the arbitration process for under DRRA requirements to align with FEMA must pursue a regulatory action.

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FEMA considered using OMB’s an initial regulatory flexibility analysis utilities, water treatment facilities, nonmetropolitan area definition as an (IRFA) unless it determines and certifies public buildings, and other alternate definition of the term ‘‘rural.’’ that a rule, if promulgated, would not infrastructure. When the President OMB’s nonmetropolitan area is defined have a significant economic impact on declares an emergency or major disaster as areas outside the boundaries of a substantial number of small entities. declaration authorizing disbursement of metropolitan areas. FEMA does not believe this proposed funds through the PA Program, that Nonmetropolitan areas are outside the rule will have a significant economic presidential declaration automatically boundaries of metropolitan areas and impact on a substantial number of small authorizes FEMA to accept applications are further subdivided into two types: entities. However, FEMA is publishing from eligible applicants under the PA 1. Micropolitan (micro) areas, which are this IRFA to aid the public in Program. To apply for a grant under the nonmetro labor-market areas centered on commenting on the potential small PA Program, the eligible applicant must urban clusters of 10,000–49,999 persons and business impacts of the proposed submit a Request for PA to FEMA defined with the same criteria used to define requirements in this NPRM. FEMA through the recipient. Upon award, the metro areas. invites all interested parties to submit recipient notifies the applicant of the 2. All remaining counties, often labeled data and information regarding the award, and the applicant becomes a ‘‘noncore’’ counties because they are not part potential economic impact on small subrecipient. of ‘‘core-based’’ metro or micro areas. entities that would result from the The DRRA requires FEMA to OMB defines metropolitan areas to adoption of this NPRM. FEMA will promulgate a regulation providing include: consider all comments received during applicants with a right of arbitration under FEMA’s PA Program. Applicants 1. Central counties with one or more the public comment period when urbanized areas; urbanized areas are densely- making a final determination. In currently have a right to arbitration to settled urban entities with 50,000 or more accordance with the Regulatory dispute FEMA eligibility determinations people. Flexibility Act, an IFRA must contain associated with Hurricanes Katrina and 2. Outlying counties that are economically the following statements, including Rita; see 44 CFR 206.209. The proposed tied to the core counties as measured by descriptions of the reason(s) for the rule would expand the scope by labor-force commuting. Outlying counties are rulemaking, its objective(s), the affected allowing applicants to request included if 25 percent of workers living in small entities, any additional burden for arbitration for disputes under all the county commute to the central counties, book or record keeping and other disaster declarations after January 1, or if 25 percent of the employment in the compliance requirements; any Federal 2016 that are above certain dollar county consists of workers coming out from amount thresholds. The proposed rule the central counties—the so-called ‘‘reverse’’ rules that duplicate, overlap, or conflict commuting pattern. with the rulemaking, and significant would grant applicants an additional alternatives considered. The following method of recourse. FEMA did not recommend using the sections address these subjects 2. A Succinct Statement of the OMB’s definition because it combines individually in the context of this Objectives of, and Legal Basis for, the rural area populations into Metropolitan proposed rule. counties. The OMB definition would Proposed Rule also result in some rural areas such as 1. A Description of the Reasons why The proposed rule would implement the Grand Canyon being considered a Action by the Agency Is Being section 1219 of the DRRA by providing metropolitan county. This alternative Considered applicants with a right to arbitration for would not result in reducing the impact PA helps State and local governments the PA Program under major disaster on small entities, while accomplishing respond to and recover from the declarations. Pursuant to section 1219, the stated objective of the rule. challenges faced during major disasters to request arbitration a PA applicant (1) FEMA considered not requiring and emergencies. To support State and must have a dispute arising from a applicants to submit a request for local governments facing those disaster declared after January 1, 2016, arbitration electronically. Current challenges, Congress passed DRRA. (2) must be disputing an amount that practices allow FEMA to accept hard Under the PA Program, as authorized exceeds $500,000 (or $100,000 for an copy submissions (through U.S. Mail or by the Stafford Act, FEMA awards applicant in a ‘‘rural area’’ with a other means) for first and second grants to eligible applicants to assist population of less than 200,000 outside appeals. In addition, FEMA currently them in responding to and recovering an urbanized area), and (3) must have accepts electronic submissions for from Presidentially-declared submitted a first appeal pursuant to the requests for arbitration under 44 CFR emergencies and major disasters. The time requirements established in 44 CFR 206.209. FEMA chose this alternative, as recipient, as defined at 44 CFR 206.206. it would provide FEMA with enhanced 206.201(m), is the government to which Accordingly, FEMA is initiating a ability to track and establish deadlines a grant is awarded, and which is rulemaking to amend appeals regulation in the arbitration process. CBCA’s rule accountable for the use of the funds at 44 CFR 206.206 to add in the new requires applicants to use an electronic provided. Generally, the State for which right to arbitration under DRRA. The method to submit their documentation the emergency or major disaster is proposed rule would revise appeals and request for arbitration to CBCA. declared is the recipient. The recipient procedures and establish arbitration Thus, FEMA believes requiring can also be an Indian Tribal procedures. electronic submission would not pose government. The applicant, as defined 3. A Description of and, Where Feasible, an undue burden on most applicants. at 44 CFR 206.201(a), is a State agency, local government, or eligible private an Estimate of the Number of Small B. Regulatory Flexibility Act nonprofit organization submitting an Entities to Which the Proposed Rule The Regulatory Flexibility Act of 1980 application to the recipient for Will Apply (5 U.S.C. 601 et seq.) and Executive assistance under the State’s grant. ‘‘Small entity’’ is defined in 5 U.S.C. Order 13272 (67 FR 53461, Aug. 16, The PA Program provides Federal 601. The term ‘‘small entity’’ can have 2002) require agency review of proposed funds for debris removal, emergency the same meaning as the terms ‘‘small and final rules to assess their impact on protective measures, repair and business,’’ ‘‘small organization,’’ and small entities. An agency must prepare replacement of roads and bridges, ‘‘small governmental jurisdiction.’’

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Section 601(3) defines a ‘‘small organizations. Based on information would need to be familiar with PA business’’ as having the same meaning presented in the Executive Orders 12866 regulations and policies. as ‘‘small business concern’’ under and 13563, FEMA estimates 12 5. An Identification, to the Extent Section 3 of the Small Business Act arbitration cases per year. If 75 percent Practicable, of all Relevant Federal (SBA). This includes any small business of these are small entities, FEMA Rules Which May Duplicate, Overlap, or concern that is independently owned estimates 9 arbitration requests per year Conflict With the Proposed Rule and operated and is not dominant in its from small entities with an average cost field of operation. Section 601(4) of between $13,190 and $22,460 per FEMA’s regulations on appeals, found defines a ‘‘small organization’’ as any case. Nine small entities may not at 44 CFR 206.206, are still in effect and not-for-profit enterprise which is represent a substantial number of small provide the required process for independently owned and operated and entities impacted by this proposed rule submitting first and second appeals.34 is not dominant in their field of and FEMA does not believe the costs Applicants must submit a request for a operation. Section 601(5) defines ‘‘small imposed to these small entities are first appeal prior to submitting a request governmental jurisdiction’’ as significant. FEMA welcomes any for arbitration. Applicants may submit a governments of cities, counties, towns, comments from the public on the request for arbitration or a second townships, villages, school districts, or number of small entities presented in appeal, but not both. special districts, with a population of this analysis and any impacts imposed Section of 1219 of DRRA requires less than 50,000. onto them by this proposed rule. CBCA to conduct the arbitrations. The SBA also stipulates in its size Accordingly, applicants that request standards of how large an entity may be 4. A Description of the Projected arbitration to dispute a FEMA and still be classified as a ‘‘small Reporting, Recordkeeping and Other determination must also meet the CBCA entity.’’ These small business size Compliance Requirements of the electronic submission requirement. standards are matched to industries Proposed Rule, Including an Estimate of There are overlapping provisions described in the North American the Classes of Small Entities Which Will between FEMA’s proposed rule and Industry Classification System (NAICS) Be Subject to the Requirement and the CBCA’s final rule.35 Applicants should to determine if an entity is considered Type of Professional Skills Necessary also see CBCA regulations at 48 CFR small. for Preparation of the Report or Record parts 6101 and 6106 for additional This proposed rule does not place any procedures for requesting arbitration. Arbitration—As an alternative to the requirements on small entities. It does, appeal process, applicants may request 6. A Description of Any Significant however, offer them an alternative arbitration of the disputed Alternatives to the Proposed Rule means to dispute FEMA’s determination determination. To be eligible for Section Which Accomplish the Stated for PA eligibility. If the entity chooses 423 arbitration, a PA applicant’s request Objectives of Applicable Statutes and to dispute a PA determination, and they must meet all three of the following Which Minimize Any Significant select arbitration rather than a second conditions: (1) The amount in dispute Economic Impact of the Proposed Rule appeal, they would be responsible for arises from a disaster declared after on Small Entities their share of the cost of the arbitration January 1, 2016; (2) the disputed process. The alternatives included: (1) Using All small entities would have to meet amount exceeds $500,000 (or $100,000 another definition for ‘‘rural’’ and (2) the proposed requirements to be eligible if the applicant is in a ‘‘rural area,’’ not requiring electronic submission. for arbitration. FEMA identified 3,778 defined as having a population of less FEMA considered using OMB’s applicants for FEMA’s PA Program that than 200,000 living outside an nonmetropolitan area definition as an would be eligible for arbitration under urbanized area); and (3) the applicant alternate definition of the term ‘‘rural.’’ the proposed requirements for the time submitted a first appeal with FEMA OMB’s nonmetropolitan area is defined frame from 2009 through 2017. FEMA pursuant to the requirements as areas outside the boundaries of used Slovin’s formula and a 90 percent established in 44 CFR 206.206. metropolitan areas and are further confidence interval to determine the The applicant must submit a Request subdivided into two types: 1. Micropolitan (micro) areas, which sample size.31 FEMA sampled 97 of for Arbitration to the recipient, CBCA, are nonmetro labor-market areas these applicants and found that 73 (75 and FEMA. The Request for Arbitration must contain a written statement, which centered on urban clusters of 10,000– percent) met the definition of a small 49,999 persons and defined with the entity based on the population size of specifies the amount in dispute, all documentation supporting the position same criteria used to define metro areas. local governments (less than 50,000 2. All remaining counties, often 32 of the applicant, the disaster number, population), or PNPs based on size labeled ‘‘noncore’’ counties because 33 and the name and address of the standards set by the SBA. The they are not part of ‘‘core-based’’ metro remaining 24 entities were not found to applicant’s authorized representative or counsel. FEMA estimates that it would or micro areas. be considered as small entities. Eligible OMB defines metropolitan areas to take an applicant 2 hours to complete small entities included 70 small include: government agencies and three PNP the Request for Arbitration (these 2 1. Central counties with one or more hours are accounted for in the economic urbanized areas; urbanized areas are 31 Slovin’s formula is n = N/(1 + N *e ∧2). analysis through the 47 hours of hearing densely-settled urban entities with Therefore, 3,778/(1 + 3,778 * 0.1∧2) = 97 (rounded). preparation time for applicants) with a 32 50,000 or more people. Information on population sizes was obtained wage rate of $86.96 for a general and 2. Outlying counties that are using the U.S. Census Bureau’s City and Town operations manager. FEMA estimates Population Totals 2010–2018. Available at https:// economically tied to the core counties www.census.gov/data/tables/time-series/demo/ the opportunity cost of time for popest/2010s-total-cities-and-towns.html. completing the request would be 34 A link to the current Fact Sheet: https:// 33 Small Business Administration. ‘‘Table of Size $173.92 per applicant. With an www.fema.gov/media-library/assets/documents/ Standards’’ (.xlxs). Available at https:// estimated 9 cases per year, FEMA 175821. Accessed May 15, 2020. www.sba.gov/document/support--table-size- estimates the total burden for 35 A copy of CBCA’s final rule can be found standards. Revenue and employment information online at: https://www.govinfo.gov/content/pkg/FR- for individual PNP’s was obtained from PNP completing the request at $1,565 per 2019-06-21/pdf/2019-13081.pdf. Accessed 22, websites. year. The person completing the request 2019.

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as measured by labor-force commuting. expenditure by State, local, and Tribal Type of information collection: Outlying counties are included if 25 governments, in the aggregate, or by the Revision of a currently approved percent of workers living in the county private sector, of $100 million (adjusted collection. commute to the central counties, or if 25 annually for inflation) or more in any OMB Number: 1660–0017. percent of the employment in the one year. If the rulemaking includes a Form Forms: FEMA Form 009–0–49 county consists of workers coming out Federal mandate, the Act requires an Request for Public Assistance; FEMA from the central counties—the so-called agency to prepare an assessment of the Form 009–0–91 Project Worksheet (PW); ‘‘reverse’’ commuting pattern. anticipated costs and benefits of the FEMA Form 009–0–91A Project FEMA did not recommend using the Federal mandate. The Act also pertains Worksheet (PW)—Damage Description OMB’s definition as it combines rural to any regulatory requirements that and Scope of Work Continuation Sheet; area populations into Metropolitan might significantly or uniquely affect FEMA Form 009–0–91B Project counties. The OMB definition would small governments. Before establishing Worksheet (PW)—Cost Estimate also result in some rural areas such as any such requirements, an agency must Continuation Sheet; FEMA Form 009– the Grand Canyon being considered a develop a plan allowing for input from 0–91C Project Worksheet (PW)—Maps metropolitan county. This alternative the affected governments regarding the and Sketches Sheet; FEMA Form 009– would not result in reducing the impact requirements. Exemptions from the Act 0–91D Project Worksheet (PW)—Photo on small entities while accomplishing are found at 2 U.S.C. 1503, they include Sheet; FEMA Form 009–0–120 Special the stated objective of the rule. any regulation or proposed regulation Considerations Questions; FEMA Form FEMA considered not requiring that ‘‘provides for emergency assistance 009–0–121 PNP Facility Questionnaire; electronic submission. Current practices or relief at the request of any State, FEMA Form 009–0–123 Force Account allow FEMA to accept physical mail for local, or tribal government or any Labor Summary Record; FEMA Form appeals. In addition, FEMA currently official of a State, local, or tribal 009–0–124 Materials Summary Record; accepts electronic submissions for government.’’ Thus, FEMA finds this FEMA Form 009–0–125 Rented requests for arbitration under 44 CFR rule to be exempt from the Act. Equipment Summary Record; FEMA 206.209. As CBCA provided an Additionally, FEMA has determined Form 009–0–126 Contract Work electronic address for applicants to that this rule would not result in the Summary Record; FEMA Form 009–0– submit their request for arbitration and expenditure by State, local, and Tribal 127 Force Account Equipment documentation, applicants must use governments, in the aggregate, nor by Summary Record; FEMA Form 009–0– electronic method if they choose the the private sector, of $100 million or 128 Applicant’s Benefits Calculation arbitration process. Thus, FEMA more (adjusted annually for inflation) in Worksheet; FEMA Form 009–0–111, believes requiring electronic submission any one year because of a Federal Quarterly Progress Report; FEMA Form would not pose an additional undue mandate, and it would not significantly 009–0–141, FAC–TRAX System. burden on applicants that are or uniquely affect small governments. Abstract: The information collected is considered small entities. Therefore, no actions are deemed utilized by FEMA to make Conclusion necessary under the provisions of the determinations for PA grants based on Unfunded Mandates Reform Act of the information supplied by the FEMA is interested in the potential 1995. respondents. impacts from this rule on small Affected Public: State, local, or Tribal businesses and requests public D. Paperwork Reduction Act of 1995 Government. comment on these potential impacts. If As required by the Paperwork Estimated Number of Respondents: you think that this rule will have a Reduction Act of 1995 (PRA), Public 1,012. significant economic impact on you, Law 104–13, 109 Stat. 163, (May 22, Estimated Number of Responses: your business, or organization, please 1995) (44 U.S.C. 3501 et seq.), an agency 398,068. submit a comment to the docket at the may not conduct or sponsor, and a Estimated Total Annual Burden address under ADDRESSES in this person is not required to respond to, a Hours: 466,025. proposed rule. In your comment, collection of information unless the The proposed rule to implement explain why, how, and to what degree collection of information displays a section 423 arbitration would not you think this rule will have an valid control number. impact the total number of responses or economic impact. FEMA does not In this proposed rule, FEMA is burden hours. FEMA proposes to add a believe this proposed rule will have a seeking a revision to the already existing new paragraph to 44 CFR 206.206 to add significant economic impact on a collection of information, OMB Control a right of arbitration for applicants. The substantial number of small entities. Number 1660–0017. The annual cost to proposed regulation would provide However, FEMA is publishing this IRFA the Federal Government is decreasing applicants an additional choice in to aid the public in commenting on the from $1,920,626 to $1,890,650. The FEMA’s appeals and arbitration potential small business impacts of the decrease to the cost to the Federal processes: Applicants must choose proposed requirements in this NPRM. Government occurred since we deleted either submitting a second appeal or FEMA invites all interested parties to $29,976 in arbitration travel costs; as, submitting a request for arbitration. Or, submit data and information regarding we do not have to include them per the an applicant may select arbitration if the the potential economic impact on small PRA exceptions for civil & Regional Administrator has received a entities that would result from the administrative actions. See 44 U.S.C. first appeal, but has not rendered a adoption of this NPRM. 3518(c). This proposed rule serves as decision within 180 calendar days of the 60-day comment period for this receipt. There is no change to the C. Unfunded Mandates Reform Act proposed change pursuant to 5 CFR number of responses due to the The Unfunded Mandates Reform Act 1320.12. FEMA invites the public to proposed rule, as applicants can only of 1995, 2 U.S.C. 658, 1501–1504, 1531– comment on the proposed collection of choose one option. 1536, 1571 (the Act), pertains to any information. FEMA estimated it will take notice of proposed rulemaking which approximately 2 hours to prepare a implements any rule that includes a Collection of Information letter for appeal or arbitration. This Federal mandate that may result in the Title: PA Program. estimate is based on the assumption that

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most of the information necessary for take approximately 1 hour to prepare a information from the request for an preparing the appeal or arbitration recommendation. appeal or arbitration and the recipient request is found in the existing Project Currently, the estimated time to would review similar information in Worksheet. complete a request and submit a letter providing its recommendation. The Recipients will also provide a of recommendation for an appeal is proposed rule would not impact the recommendation per each applicant three hours. FEMA also estimates the estimate of the burden hours. request for an appeal or arbitration. The time to complete a request and submit Table A.12 provides estimates of total number of recommendations a letter of recommendation for annualized cost to respondents for the would not change because of the arbitration would also be three hours. hour burdens for the collection of proposed rule. FEMA estimates it will The applicant could re-use the same information. ESTIMATED ANNUALIZED BURDEN HOURS AND COSTS

Number of Avg. burden Number of responses Total No. of per Total annual Avg. hourly Total annual Type of respondent Form name/form No. respondents per responses response burden wage rate respondent respondent (in hours) (in hours) cost

State, Local or Trib- FEMA Form 009–0–49, Request for 56 129 7,224 0.25 1,806 $63.52 $114,717 al Government. PA/. State, Local or Trib- FEMA Form 009–0–91, Project Work- 56 840 47,040 1.50 70,560 63.52 4,481,971 al Government. sheet (PW) and a Request for Time Extension. State, Local or Trib- FEMA Form 009–0–91A Project Work 56 784 43,904 1.50 65,856 63.52 4,183,173 al Government. Sheet (PW) Damage Description and Scope of Work...... FEMA Form 009–0–91B, Project Work- 56 784 43,904 1.3333 58,537 63.52 3,718,283 sheet (PW) Cost Estimate Continu- ation Sheet and Request for addi- tional funding for Cost Overruns. State, Local or Trib- FEMA Form 009–0–91C Project Work- 56 728 40,768 1.50 61,152 63.52 3,884,375 al Government. sheet (PW) Maps and Sketches Sheet. State Local or Trib- FEMA Form 009–0–91D Project Work- 56 728 40,768 1.50 61,152 63.52 3,884,375 al Government. sheet (PW) Photo Sheet. State, Local or Trib- FEMA Form 009–0–120, Special Con- 56 840 47,040 0.50 23,520 63.52 1,493,990 al Government. siderations Questions/. State, Local or Trib- FEMA Form 009–0–128, Applicant’s 56 784 43,904 0.50 21,952 63.52 1,394,391 al Government. Benefits Calculation Worksheet/. State, Local or Trib- FEMA Form 009–0–121, PNP Facility 56 94 5,264 0.50 2,632 63.52 167,185 al Government. Questionnaire. State, Local or Trib- FEMA Form 009–0–123, Force Ac- 56 94 5,264 0.50 2,632 63.52 167,185 al Government. count Labor Summary Record. State, Local or Trib- FEMA Form 009–0–124, Materials 56 94 5,264 0.25 1,316 63.52 83,592 al Government. Summary Record/. State, Local or Trib- FEMA Form 009–0–125, Rented 56 94 5,264 0.50 2,632 63.52 167,185 al Government. Equipment Summary Record. State, Local or Trib- FEMA Form 009–0–126, Contract 56 94 5,264 0.50 2,632 63.52 167,185 al Government. Work Summary Record/. State, Local or Trib- FEMA Form 009–0–127, Force Ac- 56 94 5,264 0.25 1,316 63.52 83,592 al Government. count Equipment Summary Record/. State, Local or Trib- State Administrative Plan and State 56 1 56 8.00 448 63.52 28,457 al Government. Plan Amendments/No Form. State, Local or Trib- FEMA Form 009–0–111, Quarterly 56 4 224 100.00 22,400 63.52 1,422,848 al Government. Progress Report. State, Local or Trib- Request for Appeals or Arbitrations & 56 9 504 3.00 1,512 63.52 96,042 al Government. Recommendation/No Forms. State, Local or Trib- Request for Arbitration & Rec- 4 5 20 3.00 60 63.52 3,811 al Government. ommendation resulting from Hurri- canes Katrina or Rita/No Form. State, Local or Trib- FEMA Form 009–0–141, FAC–TRAX 56 913 51,128 1.25 63,910 63.52 4,059,563 al Government. System.

Total ...... 1,012 ...... 398,068 ...... 466,025 ...... 29,601,921 Note: The ‘‘Avg. Hourly Wage Rate’’ for each respondent includes a 1.46 multiplier to reflect a fully-loaded wage rate.

Estimated Total Annual Respondent whether implementation of a proposed individual, such as a finger or voice Cost: $29,601,921. regulation will result in a system of print or a photograph. See 5 U.S.C. Estimated Respondents’ Operation records. A ‘‘record’’ is any item, 552a(a)(4). A ‘‘system of records’’ is a and Maintenance Costs: N/A. collection, or grouping of information group of records under the control of an Estimated Respondents’ Capital and about an individual that is maintained agency from which information is Start-Up Costs: N/A. by an agency, including, but not limited retrieved by the name of the individual Estimated Total Annual Costs to the to, his/her education, financial or by some identifying number, symbol, Federal Government: $1,890,650. transactions, medical history, and or other identifying particular assigned criminal or employment history and to the individual. An agency cannot E. Privacy Act that contains his/her name, or the disclose any record which is contained Under the Privacy Act of 1974, 5 identifying number, symbol, or other in a system of records except by U.S.C. 552a, an agency must determine identifying particular assigned to the following specific procedures.

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In accordance with DHS policy, of arbitration authorized by the DRRA, Under the proposed rule, Indian FEMA has completed a Privacy and to revise FEMA’s regulations Tribes have the same opportunity to Threshold Analysis (PTA) for this regarding first and second PA appeals. participate in arbitrations as other proposed rule. DHS has determined that These changes are to implement eligible applicants; however, given the this proposed rulemaking does not statutory requirements and to amend participation criteria required under 42 affect the 1660–0017 OMB Control existing regulation without changing its U.S.C. 5189a(d) and its voluntary Number’s current compliance with the environmental effect, consistent with nature, FEMA anticipates a very small E-Government Act of 2002 or the Catex A3, as defined in DHS Instruction number, if any Indian Tribes, will Privacy Act of 1974, as amended. As a Manual 023–01–001–01 (Rev. 01), participate in the new proposed result, DHS has concluded that the Appendix A. No extraordinary permanent right of arbitration. FEMA 1660–0017 OMB Control Number is circumstances exist that will trigger the also anticipates a very small number of covered by the DHS/FEMA/PIA–013 need to develop an EA or EIS. See DHS Indian Tribes will be affected by the Grants Management Programs Privacy Instruction Manual 023–01–001–01 other major revisions to 44 CFR 206.206. Impact Assessment (PIA). Additionally, V(B)(2). An EA will not be prepared As a result, FEMA does not expect this DHS has decided that the 1660–0017 because a catex applies to this proposed rule to have a substantial OMB Control Number is covered by the rulemaking action and no extraordinary direct effect on one or more Indian DHS/FEMA—009 Hazard Mitigation, circumstances exist. tribes or impose direct compliance costs Disaster Public Assistance, and Disaster on Indian Tribal governments. Loan Programs System of Records, 79 G. Executive Order 13175, Consultation Additionally, since FEMA anticipates a FR 16015, Mar. 24, 2014 System of and Coordination With Indian Tribal very small number, if any Indian Tribes Records Notice (SORN). Governments will participate in the arbitration portion of the proposed rule nor will be F. National Environmental Policy Act of Executive Order 13175, ‘‘Consultation affected by the rest of the proposed 1969 (NEPA) and Coordination With Indian Tribal Governments,’’ 65 FR 67249, Nov. 9, revisions to 44 CFR 206.206, FEMA Section 102 of the National 2000, applies to agency regulations that does not expect the regulations to have Environmental Policy Act of 1969 have Tribal implications, that is, substantial direct effects on the (NEPA), 83 Stat. 852 (Jan. 1, 1970) (42 regulations that have substantial direct relationship between the Federal U.S.C. 4321 et seq.) requires agencies to effects on one or more Indian tribes, on Government and Indian Tribes or on the consider the impacts of their proposed the relationship between the Federal distribution of power and actions on the quality of the human Government and Indian Tribes, or on responsibilities between the Federal environment. The Council on the distribution of power and Government and Indian Tribes. Environmental Quality’s (CEQ) responsibilities between the Federal procedures for implementing NEPA, 40 H. Executive Order 13132, Federalism Government and Indian Tribes. Under CFR parts 1500 through 1508, require A rule has implications for federalism this Executive Order, to the extent Federal agencies to prepare under Executive Order 13132 practicable and permitted by law, no Environmental Impact Statements (EISs) ‘‘Federalism’’ (64 FR 43255, Aug. 10, agency will promulgate any regulation for major Federal actions significantly 1999), if it has a substantial direct effect that has Tribal implications, that affecting the quality of the human on the States, on the relationship imposes substantial direct compliance environment. Each agency can develop between the national government and costs on Indian Tribal governments, and categorical exclusions (catexes) to cover the States, or on the distribution of that is not required by statute, unless actions that have been demonstrated to power and responsibilities among the funds necessary to pay the direct costs not typically trigger significant impacts various levels of government. FEMA has incurred by the Indian Tribal to the human environment individually analyzed this proposed rule under government or the Tribe in complying or cumulatively. Agencies develop Executive Order 13132 and determined with the regulation are provided by the environmental assessments (EAs) to that it does not have implications for Federal Government, or the agency evaluate those actions that are ineligible federalism. for an agency’s catexes and which have consults with Tribal officials. the potential to significantly impact the The purpose of this rule is to propose I. Executive Order 12630, Taking of human environment. At the end of the regulations to implement the new right Private Property EA process, the agency will determine of arbitration authorized by 42 U.S.C. This rule will not effect a taking of whether to make a Finding of No 5189a(d) and to revise FEMA’s private property or otherwise have Significant Impact (FONSI) or whether regulations regarding first and second taking implications under Executive to initiate the EIS process. PA appeals. Current regulations at 44 Order 12630, ‘‘Governmental Actions Rulemaking is a major Federal action CFR 206.206 only provide regulatory and Interference With Constitutionally subject to NEPA. The list of catexes at guidance on a first and second PA Protected Property Rights’’ (53 FR 8859, DHS Instruction Manual 023–01–001– appeal process, but not arbitration. The Mar. 18, 1988). 01 (Revision 01), ‘‘Implementation of other major proposed revisions to 44 the National Environmental Policy Act CFR 206.206 include adding definitions; J. Executive Order 12898, (NEPA),’’ Appendix A, includes a catex adding subparagraphs to clarify what Environmental Justice for the promulgation of certain types of actions FEMA may take and will not Executive Order 12898 ‘‘Federal rules, including rules that implement, take while an appeal is pending and Actions To Address Environmental without substantive change, statutory or state that FEMA may issue separate Justice in Minority Populations and regulatory requirements and rules that guidance as necessary, similar to current Low-Income Populations’’ (59 FR 7629, interpret or amend an existing 44 CFR 206.209(m); adding a finality of Feb. 16, 1994), mandates that Federal regulation without changing its decision paragraph; requiring electronic agencies identify and address, as environmental effect. (Catex A3(b) and submission for appeals and arbitrations appropriate, disproportionately high (d)). documents; and clarifying overall and adverse human health or The purpose of this rule is to propose timeframe limits for first and second environmental effects of their programs, regulations to implement the new right appeals. policies, and activities on minority and

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low-income populations. It requires descriptions of the agency’s actions Final agency determination means: each Federal agency to conduct its under the Regulatory Flexibility Act and (1) The decision of FEMA, if the programs, policies, and activities that the Unfunded Mandates Reform Act; applicant or recipient does not submit a substantially affect human health or the and any other information or statements first appeal within the time limits environment in a manner that ensures required by relevant executive orders. provided for in paragraph (b)(1)(ii)(A) of that those programs, policies, and FEMA will send this rule to the this section; or activities do not have the effect of Congress and to GAO pursuant to the (2) The decision of FEMA, if the excluding persons from participation in, CRA, if the rule is finalized. The rule is applicant or recipient withdraws the denying persons the benefit of, or not a ‘‘major rule’’ within the meaning pending appeal and does not file a subjecting persons to discrimination of the CRA. It will not have an annual request for arbitration within 30 because of their race, color, or national effect on the economy of $100,000,000 calendar days of the withdrawal of the origin or income level. or more; it will not result in a major pending appeal; or The purpose of this rule is to propose increase in costs or prices for (3) The decision of the FEMA regulations to implement the new right consumers, individual industries, Regional Administrator, if the applicant of arbitration authorized by the DRRA in Federal, State, or local government or recipient does not submit a second 42 U.S.C. 5189a(d) and to revise FEMA’s agencies, or geographic regions; and it appeal within the time limits provided regulations regarding first and second will not have significant adverse effects for in paragraph (b)(2)(ii)(A) of this PA appeals. Current regulations, at 44 on competition, employment, section. CFR 206.206, only provide regulatory investment, productivity, innovation, or Recipient refers to the definition at guidance on a first and second PA on the ability of United States-based § 206.201(m). appeal process, but not arbitration. The enterprises to compete with foreign- Rural area means an area with a other major proposed revisions to 44 based enterprises in domestic and population of less than 200,000 outside CFR 206.206 include adding definitions; export markets. an urbanized area. adding subparagraphs to clarify what Urbanized area means the area as actions FEMA may take and will not List of Subjects in 44 CFR Part 206 identified by the United States Census take while an appeal is pending and Administrative practice and Bureau. state that FEMA may issue separate procedure, Coastal zone, Community (b) Appeals and Arbitrations. An guidance as necessary, similar to current facilities, Disaster assistance, Fire eligible applicant or recipient may 44 CFR 206.209(m); adding a finality of prevention, Grant programs-housing and appeal or an eligible applicant may decision paragraph; requiring electronic community development, Housing, arbitrate any determination previously submission for appeals and arbitrations Insurance, Intergovernmental relations, made related to an application for or the documents; and clarifying overall Loan programs-housing and community provision of Public Assistance timeframe limits for first and second development, Natural resources, according to the procedures of this appeals. There are no adverse effects Penalties, Reporting and recordkeeping section. (1) First Appeal. The applicant must and no disproportionate effects on requirements. minority or low-income populations. make a first appeal in writing and For the reasons stated in the submit it electronically through the K. Executive Order 12988, Civil Justice preamble, the Federal Emergency recipient to the Regional Administrator. Reform Management Agency proposes to amend The recipient must include a written This proposed rule meets applicable 44 CFR part 206 as follows: recommendation on the applicant’s appeal with the electronic submission of standards in sections 3(a) and 3(b)(2) of PART 206—FEDERAL DISASTER the applicant’s first appeal to the Executive Order 12988, ‘‘Civil Justice ASSISTANCE Reform’’ (61 FR 4729, Feb. 7, 1996), to Regional Administrator. The recipient minimize litigation, eliminate ■ 1. The authority citation for part 206 may make recipient-related appeals to ambiguity, and reduce burden. continues to read as follows: the Regional Administrator. (i) Content. A first appeal must: L. Executive Order 13045, Protection of Authority: Robert T. Stafford Disaster (A) Contain all documented Children From Environmental Health Relief and Emergency Assistance Act, 42 justification supporting the applicant or Risks and Safety Risks U.S.C. 5121 through 5207; Homeland recipient’s position; This proposed rule will not create Security Act of 2002, 6 U.S.C. 101 et seq.; (B) Specify the amount in dispute, as Department of Homeland Security Delegation applicable; and environmental health risks or safety 9001.1. risks for children under Executive Order (C) Specify the provisions in Federal 13045, ‘‘Protection of Children From ■ 2. Revise § 206.206 to read as follows: law, regulation, or policy with which the applicant or recipient believes the Environmental Health Risks and Safety § 206.206 Appeals and arbitrations. Risks’’ (62 FR 19885, Apr. 23, 1997). FEMA determination was inconsistent. (a) Definitions. The following (ii) Time Limits. (A) The applicant M. Congressional Review of Agency definitions apply to this section: may make a first appeal through the Rulemaking Administrator means the recipient within 60 calendar days from Under the Congressional Review of Administrator of the Federal Emergency the date of the FEMA determination that Agency Rulemaking Act (CRA), 5 U.S.C. Management Agency. is the subject of the appeal and the 801–808, before a rule can take effect, Amount in dispute means the recipient must electronically forward to the Federal agency promulgating the difference between the amount of the Regional Administrator the rule must submit to Congress and to the financial assistance sought for a Public applicant’s first appeal with a Government Accountability Office Assistance project and the amount of recommendation within 120 calendar (GAO) a copy of the rule; a concise financial assistance for which FEMA days from the date of the FEMA general statement relating to the rule, has determined such Public Assistance determination that is the subject of the including whether it is a major rule; the project is eligible. appeal. FEMA will deny all first appeals proposed effective date of the rule; a Applicant refers to the definition at it receives from the recipient more than copy of any cost-benefit analysis; § 206.201(a). 120 calendar days from the date of the

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FEMA determination that is the subject recommendation on the applicant’s other allotted time periods. Within 90 of the appeal. appeal with the electronic submission of calendar days of receipt of the report, (B) Within 90 calendar days following the applicant’s second appeal to the the Assistant Administrator for the receipt of a first appeal, if there is a need Assistant Administrator for the Recovery Directorate will provide for additional information, the Regional Recovery Directorate. The recipient may electronic notice of the disposition of Administrator will provide electronic make recipient-related second appeals the appeal to the recipient and notice to the recipient and applicant. If to the Assistant Administrator for the applicant. there is no need for additional Recovery Directorate. (iv) Effect of an Appeal. (A) FEMA information, then FEMA will not (i) Content. A second appeal must: will take no action to implement any provide notification. The Regional (A) Contain all documented determination pending an appeal Administrator will generally allow the justification supporting the applicant or decision from the Assistant recipient 30 calendar days to provide recipient’s position; Administrator for the Recovery any additional information. (B) Specify the amount in dispute, as Directorate, subject to the exceptions in (C) The Regional Administrator will applicable; and paragraph (b)(2)(iv)(B) of this section. provide electronic notice of the (C) Specify the provisions in Federal (B) Notwithstanding paragraph disposition of the appeal to the law, regulation, or policy with which (b)(2)(iv)(A) of this section, FEMA may applicant and recipient within 90 the applicant or recipient believes the (1) Suspend funding (see 2 CFR calendar days of receipt of the appeal or FEMA determination was inconsistent. 200.338); within 90 calendar days following the (ii) Time Limits. (A) If the Regional (2) Defer or disallow other claims receipt of additional information or Administrator denies a first appeal in questioned for reasons also disputed in following expiration of the period for whole or in part, the applicant may the pending appeal; or providing the information. make a second appeal through the (3) Take other action to recover, (iii) Technical Advice. In appeals recipient within 60 calendar days from withhold, or offset funds if specifically involving highly technical issues, the the date of the Regional Administrator’s authorized by statute or regulation. Regional Administrator may, at his or first appeal decision and the recipient (v) Implementation. If the Assistant her discretion, submit the appeal to an must electronically forward to the Administrator for the Recovery independent scientific or technical Assistant Administrator for the Directorate grants an appeal, the person or group having expertise in the Recovery Directorate the applicant’s Assistant Administrator for the subject matter of the appeal for advice second appeal with a recommendation Recovery Directorate will direct the or recommendation. The period for this within 120 calendar days from the date Regional Administrator to take technical review may be in addition to of the Regional Administrator’s first appropriate implementing action(s). other allotted time periods. Within 90 appeal decision. FEMA will deny all (vi) Guidance. FEMA may issue calendar days of receipt of the report, second appeals it receives from the separate guidance as necessary to the Regional Administrator will provide recipient more than 120 calendar days supplement paragraph (b)(2) of this electronic notice of the disposition of from the date of the Regional section. the appeal to the recipient and Administrator’s first appeal decision. (3) Arbitration. (i) Applicability. An applicant. (B) Within 90 calendar days following applicant may request arbitration from (iv) Effect of an Appeal. (A) FEMA receipt of a second appeal, if there is a the Civilian Board of Contract Appeals will take no action to implement any need for additional information, the (CBCA) if: determination pending an appeal Assistant Administrator for the (A) There is a disputed agency decision from the Regional Recovery Directorate will provide determination arising from a major Administrator, subject to the exceptions electronic notice to the recipient and disaster declared on or after January 1, in paragraph (b)(1)(iv)(B) of this section. applicant. If there is no need for 2016; and (B) Notwithstanding paragraph additional information, then FEMA will (B) The amount in dispute is greater (b)(1)(iv)(A) of this section, FEMA may: not provide notification. The Assistant than $500,000, or greater than $100,000 (1) Suspend funding (see 2 CFR Administrator for the Recovery for an applicant for assistance in a rural 200.338); Directorate will generally allow the area; and (2) Defer or disallow other claims recipient 30 calendar days to provide (C) The Regional Administrator has questioned for reasons also disputed in any additional information. denied a first appeal decision or the pending appeal; or (C) The Assistant Administrator for received a first appeal but not rendered (3) Take other action to recover, the Recovery Directorate will provide a decision within 180 calendar days of withhold, or offset funds if specifically electronic notice of the disposition of receipt. authorized by statute or regulation. the appeal to the recipient and applicant (ii) Limitations. A request for (v) Implementation. If the Regional within 90 calendar days of receipt of the arbitration is in lieu of a second appeal. Administrator grants an appeal, the appeal or within 90 calendar days (iii) Request for Arbitration. (A) An Regional Administrator will take following the receipt of additional applicant may initiate arbitration by appropriate implementing action(s). information or following expiration of submitting an electronic request (vi) Guidance. FEMA may issue the period for providing the simultaneously to the recipient, the separate guidance as necessary to information. CBCA, and FEMA. See 48 CFR part supplement paragraph (b)(1) of this (iii) Technical Advice. In appeals 6106. section. involving highly technical issues, the (B) Time Limits. (1) An applicant (2) Second Appeal. If the Regional Assistant Administrator for the must submit a request for arbitration Administrator denies a first appeal in Recovery Directorate may, at his or her within 60 calendar days from the date whole or in part, the applicant may discretion, submit the appeal to an of the Regional Administrator’s first make a second appeal in writing and independent scientific or technical appeal decision; or submit it electronically through the person or group having expertise in the (2) If the first appeal was timely recipient to the Assistant Administrator subject matter of the appeal for advice submitted, and the Regional for the Recovery Directorate. The or recommendation. The period for this Administrator has not rendered a recipient must include a written technical review may be in addition to decision within 180 calendar days of

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receiving the appeal, an applicant may use of the Supplier Performance Risk degradation, or monetary loss. SPRS electronically submit a withdrawal of System. ‘‘flags’’ items identified by Government the pending appeal simultaneously to DATES: Comments on the proposed rule sources as ‘‘high risk’’ and provides the recipient, the FEMA Regional should be submitted in writing to the suggested mitigations, or as ‘‘not high Administrator, and the CBCA. The risk’’. address shown below on or before • applicant may then submit a request for , 2020, to be considered in Price Risk. SPRS collects historical pricing data from Government sources arbitration within 30 calendar days from the formation of a final rule. the date of the withdrawal of the and applies a common statistical ADDRESSES: Submit comments method to calculate the average price pending appeal. identified by DFARS Case 2019–D009, (C) Content of request. The request for paid for a product or services, using any of the following methods: generating a price range that contracting arbitration must contain a written Æ Regulations.gov: http:// officers can use in the evaluation of fair statement that specifies the amount in www.regulations.gov. Search for dispute, all documentation supporting and reasonable pricing. Price Risk ‘‘DFARS Case 2019–D009.’’ Select determines whether ‘‘a proposed price the position of the applicant, the ‘‘Comment Now’’ and follow the disaster number, and the name and is consistent with historical prices paid instructions provided to submit a for that item and is depicted by high, address of the applicant’s authorized comment. Please include ‘‘DFARS Case representative or counsel. low, or within range’’. 2019–D009’’ on any attached document. • Supplier Risk. SPRS calculates a (iv) Expenses. Expenses for each party Æ Email: [email protected]. Include will be paid by the party who incurred supplier risk score, for contracting DFARS Case 2019–D009 in the subject officers to compare competing the expense. line of the message. (v) Guidance. FEMA may issue Æ suppliers. This score includes three Fax: 571–372–6094. years of relevant supplier performance separate guidance as necessary to Æ Mail: Defense Acquisition information from existing Government supplement paragraph (b)(3) of this Regulations System, Attn: Heather data sources. section. Kitchens, OUSD(A&S)DPC/DARS, Room (c) Finality of decision. A FEMA final 3B941, 3060 Defense Pentagon, II. Discussion and Analysis agency determination or a decision of Washington, DC 20301–3060. The proposed rule amends the DFARS the Assistant Administrator for the Comments received generally will be to: (1) Move coverage of the Supplier Recovery Directorate on a second appeal posted without change to http:// Performance Risk System (SPRS) from constitute a final decision of FEMA. In www.regulations.gov, including any part 213, Simplified Acquisition the alternative, a decision of the personal information provided. To Procedures, to a new subpart 204.7X, majority of the CBCA panel constitutes confirm receipt of your comment(s), Supplier Performance Risk System; and a final decision, binding on all parties. please check www.regulations.gov, (2) replace DFARS clause 252.213–7000, See 48 CFR 6106.613. Final decisions approximately two to three days after Notice to Prospective Suppliers on Use are not subject to further administrative submission to verify posting (except of Supplier Performance Risk System in review. allow 30 days for posting of comments Past Performance Evaluations, with submitted by mail). Pete Gaynor, DFARS provision 252.204–70XX, Notice FOR FURTHER INFORMATION CONTACT: Ms. Administrator, Federal Emergency to Prospective Suppliers on Use of Management Agency. Heather Kitchens, telephone 571–372– Supplier Performance Risk System in 6095. [FR Doc. 2020–16040 Filed 8–28–20; 8:45 am] Performance Evaluations, to enhance BILLING CODE 9111–19–P SUPPLEMENTARY INFORMATION: the use of SPRS in the evaluation of a supplier’s performance through the I. Background introduction of SPRS system-generated The Supplier Performance Risk item, price, and supplier risk DEPARTMENT OF DEFENSE System (SPRS) is a DoD enterprise assessments. Defense Acquisition Regulations application that retrieves quality and In the new subpart, at 204.7X01, System delivery data from Government systems definitions are added for item, price, to calculate ‘‘on time’’ delivery scores and supplier risk. Section 204.7X02, 48 CFR Parts 204, 209, 212, 213, and and quality classifications. Contracting Applicability, provides that the use of 252 officers will use the overall risk SPRS is required to be used to evaluate assessment generated by the SPRS quotes and offers in response to all [Docket 2020–0027] module to evaluate quotes and offers solicitations for supplies and services, received under all solicitations for including solicitations using FAR part RIN 0750–AK44 supplies and services, including 12 procedures for the acquisition of Defense Federal Acquisition solicitations using part 12 procedures commercial items. Language is added at Regulation Supplement: Use of for the acquisition of commercial items. 204.7X03, Procedures, to provide Supplier Performance Risk System The system generates three risk guidance to the contracting officer on (SPRS) Assessments (DFARS Case assessments using the SPRS Evaluation how SPRS risk assessments shall be 2019–D009) Criteria and calculations at https:// considered during award decisions, how www.sprs.csd.disa.mil/pdf/SPRS_ to respond to risk assessment ratings, AGENCY: Defense Acquisition DataEvaluationCriteria.pdf. These risk and what mitigating strategies shall be Regulations System, Department of assessments are described as follows: considered for risk assessments prior to Defense (DoD). • Item Risk. SPRS collects data to award. A prescription for use of the new ACTION: Proposed rule. generate the probability that a product solicitation provision at 252.204–70XX or service, based on intended use, will is added at 204.7X04. SUMMARY: DoD is proposing to amend introduce counterfeit or nonconforming The proposed rule amends the DFARS the Defense Federal Acquisition material entering the DoD supply chain, by requiring contracting officers to use Regulation Supplement (DFARS) to which can result in significant the supplier risk assessments available update the policy and procedures for personnel safety issues, mission in SPRS as a factor in determining

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