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FOR IMMEDIATE RELEASE: September 26, 2008

SCHUMER, CLINTON: NYS COULD LOSE MILLIONS OF DISASTER DOLLARS IF FEMA IMPLEMENTS NEW RULE - SENATORS URGE IMMEDIATE REVERSAL OF HARMFUL PROPOSAL


Estimates Show That If Rule Had Been In Place, NYS Would Have Lost $33 Million in Federal Dollars for Last 9 Presidentially-Declared Disasters - Like Floods, Winter Storms and Hurricanes

Proposed Rule Will Hamper Disaster Recovery and Mitigation - Place Unfair Burden on State and Local Government to Manage Complicated Federal Disaster Program

Schumer, Clinton Write Letter to FEMA Administrator Paulison Urging Immediate Reversal of Rule

U.S. Senators Charles E. Schumer and Hillary Rodham Clinton today urged immediate reversal of a new rule proposed by Federal Emergency Management Agency (FEMA) that will drastically decrease the reimbursed dollars New York State can get for management of presidentially-declared disasters. New York State has estimated that if this rule had been in place for the past nine disasters, the state would have lost $33 million in critical funding from FEMA.

In an effort to halt implementation of the rule, Schumer and Clinton wrote a personal letter to FEMA Administrator R. David Paulison urging the agency to reinstate current rules that allow the state to handle disaster recovery and mitigation without an unfair burden on New York’s state and local government.

“ The disaster of Hurricane Katrina showed us that FEMA must do more and do it better, not walk away from its responsibility to aid state and local governments when disaster strikes, as this absurd rule would allow," said Schumer. "This proposed rule is unfair and unnecessarily burdensome and should be thrown out with yesterday's trash.  In just the last few years New York has been hit with multiple massive flooding in Binghamton and the Hudson Valley, a freak ice storm in Buffalo, and massive snow storm in Watertown, not to mention 9-11.  In each instance this proposal would have greatly hampered our ability to protect life, property and return things to normalcy with speed. I will fight with my partners to make sure it is not implemented." 

“This rule is counterproductive to the mission of FEMA. It would not only force states and local governments to shoulder a greater burden of the recovery costs, it would also require them to spend valuable time navigating a series of complex disaster program requirements instead of focusing on critical recovery efforts. I call on FEMA to withdraw this interim rule, and I will continue to work with my colleagues to ensure that it is not implemented,” said Senator Clinton.

 

The Disaster Mitigation Act of 2000 directed FEMA to establish management cost rates for the Public Assistance (PA) program and the Hazard Mitigation Grant Program (HMGP) to help state and local governments respond to a Presidentially-declared disaster. However, FEMA did not respond to the public comments or advance a final rule between August 2002 and October 2007.  It was only in November 2007 that FEMA--without consulting with the emergency management community--announced an interim final rule that leaves States unable to fully recover the costs of managing a federal disaster and administering PA and HMGP. 

 

This Interim rule poses a threat to state and local governments seeking disaster relief by delaying and capping the reimbursement rate. As it stands, the rule eliminates the Administrative Allowance to cover direct and indirect costs incurred while requesting assistance for disaster relief and caps the total amount that a state may be reimbursed at $20 million which is unrealistic for catastrophic disasters such as Hurricane Katrina.  

 

To ensure reversal of the Interim Rule and remove the unfair burden on state and local governments, Senators Schumer and Clinton wrote a letter to FEMA Administrator R. David Paulison.

A full copy of the letter is below

 

Below is a full copy of the letter:

 

 

 

September 26, 2008

 

The Honorable R. David Paulison

Administrator   

Federal Emergency Management Agency

500 C Street SW

Washington, DC 20472

 

Dear Administrator Paulison:

 

We write to request that FEMA revise its interim final rule limiting the costs that states can recover for managing a federal disaster.  While we appreciate FEMA reopening the public comment period, we believe FEMA should reevaluate its management cost rule and embark on a fresh rulemaking that better reflects the true costs to the states of managing disaster declarations. 

 

As you are aware, the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L.100-107) provided FEMA with the authority to establish two programs to help state and local governments respond to a Presidentially-declared disaster, the Public Assistance (PA) program and the Hazard Mitigation Grant Program (HMGP).  The Disaster Mitigation Act of 2000 (P.L.106-390) directed FEMA to establish management cost rates for PA and HMGP for state and local government.  FEMA requested initial comments on a proposed rule implementing P.L. 106-390 in August 2002.  However, FEMA did not respond to the public comments or advance a final rule between August 2002 and October 2007.  It was only in November 2007 that FEMA--without consulting with the emergency management community--announced an interim final rule that leaves States unable to fully recover the costs of managing a federal disaster and administering PA and HMGP. 

 

There are four particularly troubling provisions in the interim rule:

 

  1. The interim rule eliminates the “Administrative Allowance” and “State Management Administrative Allowance.”  Local governments in New York utilize the Administrative Allowance to cover direct and indirect costs incurred in requesting, obtaining, and administering PA and HMGP.   The “State Management Administrative Allowance allows New York to hire disaster assistance personnel that work with FEMA and local governments to develop preliminary damage assessments and help the affected community navigate the disaster claims process.  The loss of both allowances, which total approximately $6 million per disaster, would leave New York State, local governments and non-profits without the support necessary to manage disaster declaration responsibilities. 

 

  1. The interim rule significantly cuts funding for states to manage the PA program.  According to the National Emergency Management Association, it cost states on average 10 percent of their PA allocation to manage and administer the PA program.  Yet FEMA’s interim rule would cap the allowance at 3.34 percent. States will be forced to cover the gap of 2.87 percent to manage the federal PA program.

 

  1. The interim rule sets the management cost rate for HMGP at 4.89 percent when the average state rate is 11 percent.  As with PA, states will be forced to close this gap.  Since states will have to front more costs for hazard mitigation management efforts under the interim rule, less HMGP funding will be available for local mitigation projects.  HMGP is the only post-disaster mitigation program and the effect of the interim rule is to weaken state hazard mitigation plans nationwide.   

 

  1. The interim rule caps the total amount a state may be reimbursed for managing a federal disaster at $20 million.  This arbitrary cap is unrealistic for catastrophic disasters such as Hurricane Katrina or the Northridge Earthquake.

 

The intent of P.L. 106-390 was to transfer program responsibility from FEMA to the states. In return for taking on additional program management responsibilities, the states were authorized to receive higher administrative cost allowances.  The interim rule does not appear to be in concert with the intent of the law, pushing a greater share of disaster management costs onto state and local government.  New York’s Emergency Management Office has estimated that the state and local governments would have lost $33 million in federal dollars had FEMA’s interim rule been in place for the state’s previous nine Presidentially-declared disasters. 

 

The interim final rule will delay disaster recovery and mitigation and place an unfair burden on state and local government to manage and comply with complex federal disaster program requirements.  We respectfully request that FEMA withdraw its interim rule and reinstate the Administrative Allowance and State Management Administrative Allowance. This will allow the state and local government to continue to efficiently and effectively manage the program requirements as mandated in PL 106-390 and the Stafford Act.  Thank you for your consideration of this request. 

 

                                                            Sincerely,

 

 

Charles E. Schumer                                                      Hillary Rodham Clinton

Senator                                                                        Senator

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