Will FEMA Recommend Public Assistance Following a Disaster? Proposed Rulemaking

Will FEMA Recommend Public Assistance Following a Disaster? Proposed Rulemaking

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INSIGHTi

Will FEMA Recommend Public Assistance
Following a Disaster? Proposed Rulemaking
Updated April 8, 2022
This Insight reviews the Federal Emergency Management Agency’s (FEMA’s) proposed rulemaking on
assessing requests for Public Assistance (PA) for major disaster declarations under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (Stafford Act, P.L. 93-288, as amended). FEMA estimated
that the rulemaking, if finalized, would significantly reduce PA obligations. The public comment period
closed in April 2021. As of April 2022, FEMA reported to CRS that the agency’s next action on the rule
is undetermined, and that the “does not expect to have a regulatory action” before December 10, 2022.
Current Process to Assess Requests for Public Assistance
PA supports state, local, tribal, and territorial governments (SLTTs), and eligible nonprofits when
requested by a governor or tribal chief executive and authorized through a presidential Stafford Act
declaration of emergency or major disaster (see Figure 1). On average, PA accounts for the largest source
of spending authorized under the Stafford Act.
FEMA determines whether there are unmet needs that may warrant PA, and makes a recommendation to
the President, who has the sole authority to issue a declaration authorizing PA for Emergency Work
(debris removal and/or emergency protective measures) and/or Permanent Work (reconstruction of
eligible facilities).
For major disasters, FEMA uses multiple factors to assess requests for PA. FEMA estimates the cost of PA
across the affected jurisdiction (particularly eligible uninsured costs of facility reconstruction). FEMA
typically only recommends that the President make PA available when
1. Estimates exceed $1 million across a state or territory, or $250,000 across a tribe; and
2. Costs for states and territories exceed “per-capita indicators” annually-adjusted to
account for inflation. For FY2022, these indicators are $1.63 across affected states or
territories, and $4.10 across affected counties.
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FEMA exercises discretion when making recommendations to the President. FEMA may consider a recent
history of disasters that exhausted SLTT capacity, severe local impacts, or the use of mitigating measures
(which may have reduced damages)—and recommend approval even when cost thresholds are not met.
While no single factor determines FEMA’s recommendations, per-capita indicators have historically
proved crucial. In 2012, the Government Accountability Office (GAO) found that 99% of analyzed major
disaster declarations reflected damage estimates where indicators were met or exceeded. The exclusive
use of per-capita indicators may violate the Stafford Act prohibition on the use of sliding scales to deny
federal assistance.
Figure 1. Stafford Act Declaration Request Process

Source: Developed by CRS based on 44 C.F.R. §§206.31-206.48.
Proposed Rule on Assessing Requests for Public
Assistance
In 2012, GAO found that FEMA’s indicators had not kept pace with inflation and per-capita income
gains. GAO suggested that FEMA increase the thresholds or identify another metric (e.g., total taxable
resources; TTR) to assess SLTT capacity to respond and recover.
The enactment of the Disaster Recovery Reform Act of 2018 (DRRA, P.L. 115-254) required FEMA to
review the factors used to assess requests for PA. Section 1232 required greater consideration to severe
local impacts and recent disasters. FEMA reported that it updated FEMA’s declaration request template to
implement Section 1232. Section 1239 required FEMA to review and update the PA cost-estimating
factors following consultation with SLTTs.
FEMA subsequently published notice of proposed rulemaking in December 2020 modifying PA cost
estimates by:

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1. Increasing minimum damage threshold for states and territories from $1 million to
$1,535,000;
2. Increasing “baseline” per-capita indicator from $1.50 to $2.32, reflecting inflation gains;
3. Adjusting individual state (not territory) per-capita indicators based on TTR; and
4. Using of annual population estimates (rather than decennial census data).
FEMA estimates that per-capita thresholds may increase between 2% and 113% under the rule (using
FY2019 figures). To demonstrate the effects of the proposed rule, FEMA modeled these policy changes
on disaster activity between 2008 and 2017 and found the following:
 27% (159) fewer major disaster declarations would have included PA, averaging 16 fewer
annually;
 7,456 entities would have received less federal assistance; and
 FEMA would not have transferred approximately $2.1 billion (undiscounted) in federal
assistance.
Policy Issues and Comments—Proposed Rulemaking
Some Members of Congress and other stakeholders have raised concerns during the rulemaking,
including the following.
Appropriate Provision of Public Assistance
GAO previously raised concerns that artificially low indicators led FEMA to recommend that PA be
provided when SLTTs did not require federal assistance. In response, FEMA’s proposed rulemaking shifts
the cost of smaller disasters to SLTTs .
However, other stakeholders have noted that state disaster spending is highly variable and noted that most
incidents are already managed without federal assistance. The proposed rule could suddenly and
significantly reduce necessary federal assistance.
Inequitable Access to Public Assistance
Some worry that the indicators (especially if increased) may disadvantage small, rural and/or less wealthy
areas with less costly facilities and damage, or disadvantage communities in states with high populations
and/or TTR. FEMA reports it will consider severe local impacts in accordance with DRRA , however,
some public comments requested greater transparency into its methods and the related rulemaking.
Recurring, Slow-Onset, or Compound Disasters
FEMA only measures costs incurred during a certain time period, the “incident period.” Damages accrued
during recurring, slow-onset, or compound events (e.g., floods, sea level rise, fires following an
earthquake) may not always coincide with the incident period, jeopardizing the availability of PA.
FEMA’s indicators also measure damages within political boundaries that may not align with the
geography of a hazard. The proposed rule does not discuss these issues.
Strain on SLTT Capacity Due to COVID-19 Pandemic
Many comments by SLTT stakeholders raised concerns that the proposed rule could dramatically reduce
federal assistance for disasters while SLTT capacity is strained due to the COVID-19 pandemic.

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Effects on Disaster Mitigation Efforts
FEMA’s rulemaking explained that the current indicators may disincentivize SLTT mitigation
investments due to the expectation that federal assistance will be provided. FEMA claimed that
redistributing costs to states will, by contrast, incentivize mitigation investments, promoting a “resilient
… Nation.” Some comments question this logic and raise concern that the finalized rule will actually
reduce allocations for FEMA mitigation programs tied to PA spending.

Author Information

Erica A. Lee

Analyst in Emergency Management and Disaster
Recovery

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
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IN11534 · VERSION 7 · UPDATED