Sneak Preview: FEMA Proposes To Implement Disaster Deductible

February 12, 2016 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from a recent article in the Federal Grants Management Handbook.) The Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA) is proposing to implement a disaster deductible, in which state, tribal or territorial governments would be required to meet a predetermined level of nonfederal financial commitment before FEMA will provide federal assistance under the Public Assistance Program following a major disaster. By requiring them to meet a deductible, FEMA aims to encourage recipients to take measures to improve disaster planning and recovery.

FEMA’s regulations for declaring emergency assistance are located in Title 44, Part 206 of the Code of Federal Regulations (C.F.R.). After receiving a declaration request, FEMA considers multiple factors such as the amount and type of damages on affected individuals; the available resources of the state, tribal or territorial government (i.e., prime recipient); extent of insurance to cover losses; and several other factors. Public Assistance program funding provides federal funds for debris removal, emergency protective measures and permanent restoration of infrastructure. FEMA provides funding to the prime recipients such as state, territorial and tribal governments, which may pass through funding to subrecipients such as local governments, nonprofits and for-profits who may conduct cleanup or hire dislocated workers.

Under 44 C.F.R. 206.48(a)(1), recipients may receive federal assistance for 75 percent of public assistance-eligible damages when they meet a $1 million major disaster threshold. Therefore, if a recipient sought federal assistance for a disaster that met the $1 million threshold, for example, the federal share would be $750,000, and the recipient share would be $250,000. However, in comparison, FEMA notes that a disaster causing $999,999 in damages would not warrant a major disaster declaration. In this case, a recipient and its subrecipients would be required to fund all the disaster costs without any supplemental federal funds. “There is a level of disaster activity that the affected state, tribal or territorial government can handle on its own,” FEMA said. The agency works toward promoting better local planning so that federal funds are used by recipients to supplement, not supplant local funding,

FEMA said that because every governmental recipient of disaster assistance “has some measurable capacity to independently respond” to a disaster, it is proposing to implement a disaster deductible in addition to the “supplement not supplant” requirements already in place. A prime recipient that forwards a declaration for disaster assistance would be required to demonstrate that it has satisfied a predetermined deductible amount before FEMA would consider providing assistance. FEMA said the calculated deductible level would be published periodically and would be representative of the recipient’s capability.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

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