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Federal Register / Vol. 86, No. 155 / Monday, August 16, 2021 / Rules and Regulations administrative review in both subparagraphs, as it applies to the finality of both FEMA and CBCA
decisions.
Assumptions This analysis used the following assumptions:
All monetary values are presented in 2019 dollars. FEMA used the Bureau of Labor Statistics BLS Consumer Price Index for All Urban Consumers CPIU:
U.S. city average, all items, by month, Annual Average as published December 2019.11
This analysis does not include a discussion of emergency disaster declarations; since, arbitration is only available to dispute the determinations of major disaster declarations.12
FEMA assumed the length of time for an arbitration case is based on the hearing location.
FEMA used 2019 wage rates for all parties involved in arbitration cases.
Baseline
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Following guidance in OMB Circular A4, FEMA assessed the impacts of this final rule against a pre-statutory baseline. The pre-statutory baseline is an assessment of what the world would look like if the relevant statutes had not been adopted. In this instance, FEMA has been accepting arbitration cases since the implementation of DRRA, and retroactive to January 1, 2016. Since the statute has already been implemented and because this rule is not making additional substantive changes, the rule has no cost or benefits related to the new right of arbitration under a no-action baseline. The costs, benefits, and transfers of this rule are measured against the pre-statutory baseline. The benefit of this rule is making information publicly available in the CFR for transparency and to prevent any confusion on the most upto-date arbitration process.
Currently, FEMA has no permanent regulations for arbitrations outside of Hurricanes Katrina and Rita. Since the 11 Historical Consumer Price Index for All Urban Consumers CPIU: U.S. city average, all items, by month. Bureau of Labor Statistics: Consumer Price Index 2019. Accessed October 23, 2020. https
www.bls.gov/cpi/tables/supplemental-files/archive2019.zip. In the final rule, the data for the Executive Orders 12866 and 13563 section has been updated with the most recently available data at the time of the analysis.
12 The NPRM incorrectly stated in the Executive Orders 12866 and 13563 section that this proposed rule does not apply to emergency disaster declarations. The NPRM should have stated that here was no need to the cost for applicants to appeal determinations of emergency disaster declarations because FEMA currently allows for such and the NPRM did not limit appeals to major disaster declaration determinations.

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passage of the DRRA, certain PA
applicants under declarations since January 1, 2016 may request arbitration pursuant to 42 U.S.C. 5189ad. On June 21, 2019, CBCA published a final rule see 84 FR 29085 and FEMA has published a corresponding fact sheet.
Between January 1, 2016 and November 9, 2020, FEMA received 20 requests for arbitration.13 Three of these cases are still in progress, so FEMA does not have available data on the outcome of these cases. Of the 17 closed cases, FEMA
prevailed in 10 cases, the applicant prevailed in 4 cases, and the applicant withdrew from the arbitration process prior to a decision in 3 cases. These figures will change as FEMA continues to receive arbitration requests.
While arbitration is available for disaster declarations retroactive to January 1, 2016, the process did not become available to applicants until FEMA published guidance in December 2018, and FEMA did not begin receiving arbitration requests until March 7, 2019.
This means that FEMA only has 19
months of historical data, and therefore, FEMA relied on older arbitration regulations as a proxy for the expected number of arbitration cases arising out of this final rule.
FEMA previously had regulations permitting arbitrations arising from disaster declarations for Superstorm Sandy. No applicants requested arbitration pursuant to these regulations. The authority for these arbitrations has sunset and FEMA has since removed the regulations. FEMA
has regulations, at 44 CFR 206.209, permitting arbitrations arising from disaster declarations for Hurricanes Katrina and Rita. This regulation is only available for PA applicants under Hurricane Katrina and Rita disaster declarations. The number of arbitrations submitted under this authority and the process relied on to conduct these arbitrations provide insight to project the number of arbitration cases in this final rule. While the Katrina/Rita arbitration regulations have some key differences from this final regulation, such as time frames and allowing applicants to request arbitration in lieu of first appeals, it is the best historical data that FEMA has available to estimate the number of expected arbitration cases for this final rule.
FEMA recognized that the regulations at 44 CFR 206.209 have a 30-day time limit for submitting arbitration requests;
whereas, this final rule has a 60
calendar-day time limit for arbitrations.
13 The number of arbitration requests was provided by FEMAs Office of Chief Counsel Disaster Disputes Branch as of November 9, 2020.

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FEMA was not able to estimate the impact these additional 30 days may have on the number of arbitrations submitted.
Number of Potential Arbitration Cases In addition to reviewing the limited historical data available on the 20
arbitration cases, FEMA also examined the number of arbitrations submitted from the Hurricane Katrina and Rita disasters pursuant to 44 CFR 206.209, in lieu of filing a first appeal, from 2010
through 2019 to derive an estimate of the number of arbitration cases that applicants might submit per year pursuant to 42 U.S.C. 5189ad.
Pursuant to 42 U.S.C. 5189d5A, arbitrations authorized by the DRRA
must follow the process established in 44 CFR 206.209 for Katrina and Rita arbitrations, so FEMA relied on the annual average percentage of cases submitted under this regulation as a basis for estimating the number of cases that would arise for this final rule. This analysis was conducted using data from 2010 through 2019.14 Applicants could arbitrate in lieu of a first appeal only if the amount of the project was greater than $500,000.15 During this period, applicants submitted a total of 73
arbitrations and a total 225 first appeals.16 From this available data, applicants chose arbitration in lieu of a first appeal 32 percent of the time 73
225 100 = approximately 32
percent.
Pursuant to 42 U.S.C. 5189d5B, arbitration is authorized by the DRRA in lieu of a second appeal where the dispute is more $500,000, or $100,000
for rural areas. For second appeals 14 The proposed rule stated that The authority to arbitrate in lieu of a filing a first appeal for Hurricanes Katrina and Rita became available in February 2009 and 2017 is the latest calendar year where complete data was available at the time of this analysis. Review under the Executive Orders 12866 and 13563 section in the proposed rule was conducted with data available at the time. FEMA
typically uses 10 years of historical data for their analysis. However, 10 years of historical data was not available at the time of the analysis of the proposed rule. For this final rule, FEMA was able to use 10 years of historical data, 2010 through 2019. Hurricane Katrina and Rita occurred in 2005.
FEMA notes that as time passes, fewer applicants are submitting requests for public assistance each year, as over 15 years has passed since the Katrina/
Rita declarations.
15 Please note that arbitration cases for Hurricanes Katrina and Rita are not bound by a threshold for rural areas as is this rule. FEMA does not know if this limitation will result in more or less cases submitted.
16 Data on appeals and arbitrations is provided by FEMAs Office of Chief Counsel Disaster Disputes Branch. Not all these first appeals would have been eligible for arbitration. To be eligible for arbitration, the amount in dispute would have had to have been greater than $500,000. FEMA does not have amount in dispute data available for these cases, so the arbitration percentage may be overstated.

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