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Federal Register / Vol. 86, No. 173 / Friday, September 10, 2021 / Rules and Regulations eligible activity under the proposed 44
CFR 77.6c, FEMA has added 77.6c4: Project Scoping. Activities that enable subapplicants to develop complete subapplications for eligible mitigation activities including but not limited to data development.
In response to the comment that expressed concerns regarding the statement Pre-award costs can only be incurred during the open application period for the FMA program, this statement has been removed. Section 77.7b now reads, Pre-award costs.
FEMA may fund eligible pre-award costs related to developing the application or subapplication at its discretion and as funds are available.
Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the development of the project or planning proposal. Costs associated with implementation of the activity but incurred prior to award are not eligible.
Therefore, activities where implementation is initiated or completed prior to award are not eligible and will not be reimbursed.
In addition to the above and in order to align with 2 CFR part 200, FEMA
removed its proposed definition of management costs in the proposed 44
CFR 77.2. The NPRMs proposed definition of management costs inadvertently tied it to FEMAs regulations implementing its authority under the Robert T. Stafford Disaster Relief and Emergency Assistance Act Stafford Act.3 However, the FMA
Program is not authorized under the Stafford Act, but rather the National Flood Insurance Act.4 As a result, direct and indirect administrative costs are governed by the cost principles of 2 CFR
part 200 Subpart E, and FEMA has added the phrase direct and indirect administrative costs pursuant to 2 CFR
part 200 Subpart E in 44 CFR
77.7a1i to clarify this. Because the FMA Program is authorized under the National Flood Insurance Act, FEMA
also added the National Flood Insurance Act both to the Authority citation for 44
CFR part 201 and to section 201.1.
Lastly, to conform with updates to 2
CFR published on August 13, 2020,5
and other updates to statutory citations, FEMA removed the phrase to carry out an activity under the FMA program in the definition of recipient in 77.2h and updated citations to 2 CFR part 200
and 25 U.S.C. 5131 as necessary.
3 Public Law 93288 42 U.S.C. 51215207; see 44 CFR part 207.
4 42 U.S.C. 4104c.
5 85 FR 49506.

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IV. Regulatory Analysis A. Executive Order 12866, as amended, Regulatory Planning and Review Executive Orders 12866 Regulatory Planning and Review and 13563
Improving Regulation and Regulatory Review direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. Executive Order 13563
emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
The Office of Management and Budget OMB has not designated this rule a significant regulatory action under section 3f of Executive Order 12866.
Accordingly, OMB has not reviewed it.
FEMA did not receive any public comments relating to the RIA in the NPRM and has made no changes to this Regulatory Analysis as a result.
Additionally, changes made to the Final Rule due to public comments were due to clarifications in regulatory text, and changes made to better conform the text with statute. These changes will not have an economic impact, and FEMA
does not address them further in this analysis.
Need for Regulation The Biggert-Waters Flood Insurance Reform Act of 2012 BW12, Public Law 112141, 126 Stat. 916, amended the National Flood Insurance Act of 1968 NFIA to require changes to FEMAs Hazard Mitigation Assistance HMA programs. FEMA implemented most of these changes through the Hazard Mitigation Assistance Guidance in 2013.6 FEMA is now updating its HMA regulations to reflect these changes.
Following guidance in OMB Circular A4, FEMA assessed the impacts of this rule against a no-action baseline as well as a pre-statutory baseline. The noaction baseline is an assessment against what the world would be like if the rule is not adopted. The pre-statutory baseline is an assessment against what the world would be like if the relevant statutes had not been adopted and, in this case, already been implemented through guidance.
Under a no-action baseline, this rule results in cost savings to FEMA, and 6 FEMA, Hazard Mitigation Assistance Guidance, Feb 27, 2015, available at https www.fema.gov/
sites/default/files/2020-04/HMA_Guidance_
FY15.pdf last accessed Feb 5, 2021.

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familiarization costs to HMA recipients.
Under a pre-statutory baseline, this rule results in familiarization costs to HMA
recipients, cost savings to FEMA, distributional impacts, and qualitative benefits, but no marginal costs. The annual distributional impact of this rule is estimated at $24.96 million 7 in increased transfers from FEMA to HMA
recipients.
FEMA addressed the substantive changes in this analysis and presented how they affect costs, benefits, and transfers. The remaining changes are nonsubstantive, meaning they are technical and include definitional updates and other changes that modernize and standardize regulations, reduce redundancy, or increase readability. The nonsubstantive changes do not have an economic impact. FEMA
included a detailed marginal analysis table that summarizes the substantive and nonsubstantive changes in this rule and the related impacts in the public docket for this rulemaking available on www.regulations.gov under Docket ID
FEMA201900110002.
Affected Population This rule affects all recipients of FEMAs Flood Mitigation Assistance FMA grants. Recipients include 56
State and territorial governments and 574 Indian Tribal governments.8 Local governments and governmental organizations such as flood districts and sewer districts are considered subrecipients and must apply through a State or Indian Tribal government. For simplicity, FEMA refers to the affected population as recipients throughout the analysis, except in cases where there are different requirements for recipients or subrecipients.
Baselines BW12 made substantial changes to FEMAs HMA programs. FEMA
implemented most of these changes via the HMA Guidance in 2013. FEMA is now codifying those changes in this rule. Following guidance in OMB
Circular A4, FEMA assessed the impacts of this rule against a prestatutory baseline covering 20062012
7 In the NPRM, FEMA incorrectly stated in the introductory text of the RIA that the annual distributional impact of the rule was $4.16 million in transfers. 86 FR 53474 at 53490. However, this was a clerical error which appeared in that sentence and was not repeated in the remainder of the document. As noted in the remainder of the RIA, the correct estimate was $28.4 million. 86 FR 53474
at 53491 Table 1; 53495 text and Footnote 113;
and 53496 Table 8A4.
8 Indian Entities Recognized by, and Eligible to Receive Services from the United States Bureau of Indian Affairs, 86 FR 7554, Jan. 29, 2021.

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