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Federal Register / Vol. 86, No. 173 / Friday, September 10, 2021 / Rules and Regulations
FEMA will add definitions for Federal award and pass-through entity; and replace definitions of grantee, subgrant, and subgrantee with recipient, subaward, and subrecipient, respectively. These changes will make the HMA regulations consistent with FEMAs other regulations.
Revising, Adding, or Removing Definitions. FEMA is revising existing definitions for clarification purposes, add several definitions to conform with BW12 and current agency practice, and delete others that are obsolete. FEMA
believes the changes are clear and more consistent with definitions used in 2
CFR part 200 and the HMA Guidance.16
Shifting from Standard Mitigations to RL and SRL Structures. One of the main focuses of this rulemaking is on mitigation grants made to properties in the NFIP that have been repeatedly subject to costly loss claims. FEMA
provides a range of available mitigation options including the FMA program to address vulnerable RL and SRL
structures. Once a structure is mitigated through one of the programs, it could be protected from flooding, and can be removed from the repetitive flood loss list of un-mitigated properties insured by the NFIP. This reduces the flood vulnerability to RL and SRL structures, preventing further losses to the policyholders, as well as to FEMA. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013
when FEMA implemented it through the HMA Guidance.
Shifting from State Allocations to Competition. Before BW12, FMA
program funding was based on an allocation methodology that required an analysis of the number of insured properties and RL properties present within a jurisdiction and each State was allocated a share of the overall available funding. BW12 changed this process to a fully-competitive program that allows
FEMA to select subapplications according to FEMA priorities no matter the location.
This change lifted the constraints that were formerly in place against multiple eligible subrecipients in the same jurisdiction with vulnerable properties, allowing a more adequate coverage area within and across States and contributing to the increase in the size and volume of RL and SRL properties covered by each grant. FEMA is able to identify and mitigate properties with the highest risk from flooding and provide the greatest savings to the NFIP. This benefit applies to the pre-statutory baseline, but not the no-action baseline because recipients and FEMA both realized this benefit beginning in 2013
when FEMA implemented it through the HMA Guidance.
Eliminating the Limit on In-Kind Contributions. Eliminating the limit on in-kind contributions for a recipients cost share modifies the nature, or makeup, of the recipients contribution but does not change the overall dollar amount required for the recipients contribution. FEMA believes this is advantageous because recipients and subrecipients are able to leverage their own optimal mix of in-kind and cash to meet their portion of the cost-share.
There is no change to transfers between FEMA and grantees because the cost share does not change; however, the make-up of the recipients portion changes.
Summary of Benefits. Under a noaction baseline FEMA believes this rule will promote a better understanding of the FMA program by updating the regulations that govern the HMA
programs to conform with adjustments made by BW12 and current agency practice. These changes will clarify existing requirements and help facilitate the flood portion of the Hazard Mitigation Grant Program processes.
FEMA estimated annual cost savings of $81,159 per year. Removing the definition of market value leads to
cost savings to FEMA. Removing this definition will reduce the time it takes to conduct an initial grant application review by 2 hours.
Under a pre-statutory pre-BW12
baseline, FEMA believes there are considerable benefits associated with the shift to entirely competitive awards for the grants instead of the previous State-specific allocations, as well as the more flexible in-kind match option. The shift to more vulnerable RL and SRL
properties by modifying the cost shares and giving priority to applications with the most vulnerable properties are expected to reduce the frequency of loss claims and promote community resiliency through mitigation. There are also qualitative benefits due to the elimination of the cap on FMA funding for States and communities and the opening of the program to a fully competitive award system. These changes enhance FEMAs ability to administer the FMA program in a more streamlined and cost effective manner.
Removing State allocations of grant resources and accepting in-kind State contributions further streamline the program. Collectively, these benefits justify the rule and update FEMAs regulations to reflect current statutory authority.
Transfers Federal Cost Shares. The adjustments in cost shares made by BW12 result in distributional impacts, with certain grant programs receiving relative increases and decreases in grant funds.
To analyze the impact of changes to the cost shares, FEMA summarized available mitigation project data for standard, RL, and SRL grants.17
Between 2006 and 2012 pre-BW12, FEMA provided a total of 390 grants to 244 recipients for 1,014 properties. The value of those grants was $292,374,087, with FEMA paying $205,762,109 and recipients paying $86,611,978. Table 4
shows the distribution of these grants by category.

TABLE 4PRE-BW12 MITIGATION PROJECTS AND ASSOCIATED VALUE BY GRANT CATEGORY
2019$
Standard 75% Federal cost share Year
Number of grants
jbell on DSKJLSW7X2PROD with RULES

2006
2007

93
85

Value of grants $39,020,873
46,309,864

16 Hazard Mitigation Assistance Guidance HMA
Guidance, Feb. 8, 2021, available at https
www.fema.gov/sites/default/files/2020-04/HMA_
Guidance_FY15.pdf last accessed Feb. 9, 2021.
17 FEMA assumes that the mitigation project level grant data with applications comprising mixed
VerDate Sep<11>2014

21:14 Sep 09, 2021

Federal share obligated
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$28,914,463
33,827,089

Repetitive loss 75% Federal cost share Number of grants
Value of grants
Federal share obligated
Number of grants
Value of grants
Federal share obligated

2

$150,655

$150,655

property categories resulting in blended cost share percentages any total cost share not equal to 100
percent, 90 percent, or 75 percent Federal would be rounded up to the nearest threshold category.
This would not round up project values or Federal cost shares in dollar terms, only their tabulation
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Severe repetitive loss 90100% Federal cost share
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and consideration as RL or SRL. An application with a determined Federal cost share of 9199
percent would be counted as part of the 100 percent SRL category, while applications with 7689
percent Federal cost shares would be counted as part of the 90 percent Federal RL category.

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