Appeal Timeliness

Appeal Brief

Between April 30 and May 18, 2010, tornadoes and severe storms caused damage throughout Nashville-Davidson County, Tennessee (Applicant).  The Applicant applied for public assistance funding for repairs to its Metro Transit Authority and Administration buildings, including a trolley barn and a guard house (Facilities).  On March 14, 2011, FEMA awarded PW 5543 for repairs to the Metro Transit Authority and Administration buildings, but found that the Facilities were ineligible because they were scheduled for demolition with Federal funds.  The Applicant appealed the decision and FEMA granted the appeal on December 20, 2013, finding the Facilities eligible, subject to an insurance review.  FEMA later found that the Facilities were located in a Special Flood Hazard Area, and on July 14, 2015, obligated PW 5543 Version 1, reducing funding by $291,673.00 as part of a mandatory National Flood Insurance Program reduction.  The Applicant received notice of Version 1 from the Tennessee Emergency Management Agency (Grantee) on August 18, 2015, and then submitted its first appeal to the Grantee via letter dated October 2, 2015.  Although the Grantee received the Applicant’s first appeal letter on October 6, 2015, the Grantee did not transmit the appeal to FEMA Region IV until March 23, 2017.  In its transmittal letter dated March 16, 2017, the Grantee acknowledged that it submitted the appeal well outside the 60 day timeframe, but that this was a result of misfiling due to staffing problems.  The FEMA Region IV Regional Administrator (RA) issued her first appeal decision via letter dated November 13, 2017, finding that the appeal was untimely because the Grantee had forwarded the Applicant’s appeal outside the requisite 60-day time period.  The RA also noted that section 705(c) of the Stafford Act did not preclude FEMA from deobligating funding because the Applicant’s appeal rights were exhausted when the RA’s decision became the final agency determination.  The Applicant submitted its second appeal by letter dated January 12, 2018, arguing that FEMA should have granted the Grantee a waiver under section 301 of the Stafford Act; that FEMA instituted a new policy of denying appeals based on grantees’ untimeliness in violation of section 325(a) of the Stafford Act; and that 44 C.F.R. § 206.206(c)(2) abrogates an Applicant’s statutory right of appeal.  FEMA is denying the Applicant’s appeal because the Grantee transmitted the Applicant’s first appeal outside the requite 60-day timeframe, thus, it is untimely.

Authorities and Second Appeals

• Stafford Act §§ 301; 325(a); 423(a), (c); 705(c).
• 44 C.F.R. §§ 206.32(d); 206.44; 206.201(e); 206.202; 206.206(c)(2).
• Fla. Dep’t of Transp., FEMA-4068-DR-FL, at 3-4.
• Disaster Assistance, 55 Fed. Reg. 2,297.
   

Headnotes

• Per 44 C.F.R. § 206.206(c)(2), a grantee must review and forward an applicant’s appeal to FEMA within 60-days of receipt. 
  • The Grantee submitted the Applicant’s second appeal approximately 475 days after receipt, thus, the appeal is untimely.
• Under Stafford Act section 301, FEMA may modify or waive administrative conditions for assistance if an applicant or grantee was not able to satisfy those conditions as a result of the major disaster.
  • Here, the Grantee failed to transmit the appeal in a timely manner due to staffing changes, not the disaster.
• The 60-day submission timeframe in Stafford Act section 423(a) applies to both applicants and grantees, because grantees are legally responsible for any financial awards dispersed under the Stafford Act.
  • The 60-day submission timeframe in 44 C.F.R. § 206.206(c)(2) does not abrogate an applicant’s statutory right of appeal.
• Under Stafford Act section 325(a), FEMA cannot apply new or modified policies without a notice and comment period and may not apply them retroactively.
  • FEMA did provide a notice and comment period for 44 C.F.R. § 206.206(c)(2) and did not retroactively apply a new policy by enforcing the 60-day timeline for grantees, as the deadlines provided by statute and regulation have remained unchanged for decades.    

Appeal Letter

Appeal Analysis

Background

Between April 30 and May 18, 2010, tornadoes and severe storms caused damage throughout Nashville-Davidson County, Tennessee (Applicant), leading the Cumberland River to overflow and flood the Applicant’s Metro Transit Authority and Administration buildings.  The Applicant applied for Public Assistance (PA) funding to repair the buildings, including a trolley barn and a guard house (Facilities).  FEMA prepared Project Worksheet (PW) 5543 Version 0, awarding $2,309,282.29 for repairs to the Metro Transit Authority and Administration buildings, but did not approve funding for the Facilities because they were scheduled for demolition with Federal funds.[1]  The Applicant appealed FEMA’s determination in Version 0 and FEMA granted the appeal on December 20, 2013, finding that the Facilities were eligible because they were not actually scheduled for demolition with Federal funds and were in use at the time of the disaster, but also noted that funding for the Facilities would be subject to an insurance review.[2]  As a result of its insurance review, FEMA found that the Facilities were located in a Special Flood Hazard Area (SFHA) and that a mandatory National Flood Insurance Program (NFIP) reduction applied.  On July 14, 2015, FEMA obligated PW 5543 Version 1, reducing funding for the Facilities by $291,673.00 due to the NFIP reduction.[3]  The Applicant received notice of Version 1 from the Tennessee Emergency Management Agency (Grantee) on August 18, 2015.[4] 

First Appeal

After receiving notice of FEMA’s NFIP reduction, the Applicant submitted its first appeal to the Grantee via letter dated October 2, 2015.  The Applicant argued that in Version 1, FEMA mis-categorized the decontamination project as Category E, Buildings and Equipment, instead of Category B, Emergency Work, and that Category B work was not subject to mandatory NFIP reduction.[5]  Although the Applicant submitted its first appeal letter to the Grantee on October 6, 2015,[6] the Grantee did not transmit the appeal to FEMA Region IV until March 23, 2017.  In its transmittal letter dated March 16, 2017, the Grantee acknowledged that it transmitted the appeal well outside the 60 day submission timeframe, but that this was a result of misfiling due to staffing problems.[7] 

The Region IV Regional Administrator (RA) issued a Final Request for Information (Final RFI) via letter dated August 31, 2017.[8]  In its Final RFI, the RA requested documents and information showing that the Grantee transmitted the Applicant’s appeal to FEMA within the requisite 60 days of receipt per Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.206(c)(2).[9]  The Applicant responded to the final RFI by letter dated September 26, 2017.[10]  The Applicant did not submit additional information, but noted it would file a second appeal detailing instances of its consistent rate of timely appeal submissions and of late FEMA appeal decisions.[11]  The Grantee also responded to the Final RFI by letter dated September 25, 2017.[12]  The Grantee again acknowledged that it forwarded the Applicant’s appeal letter well past the deadline, but argued that it was the only time it had asked FEMA for flexibility in considering a late transmittal.[13] 

The RA issued her first appeal decision on November 13, 2017,[14] finding that the appeal was untimely because the Grantee had forwarded the Applicant’s appeal outside the requisite 60-day time period.[15]  The RA also noted that section 705(c) of the Stafford Act did not preclude Region IV from deobligating funding because the Applicant’s first appeal rights lapsed after the expiration of the 60-day timeframe.[16] 

Second Appeal

The Applicant submitted its second appeal by letter dated January 12, 2018.[17]  In its second appeal, the Applicant argues:

1)  Section 301 of the Stafford Act vests FEMA with the authority to waive administrative conditions when warranted, and FEMA should have waived the requirement that the Grantee transfer the appeal within 60 days, given that it was due to human error and the substantive arguments were meritorious.[18]

2)  FEMA’s policy of denying appeals based on a grantee’s tardiness is inconsistent with section 423(a) of the Stafford Act, which grants the applicant a statutory right of appeal.  The C.F.R. only provides that grantees “will” transfer applicant appeals within 60 days and there is no remedy for them failing to do so; thus, FEMA’s policy and regulation contravene an applicant’s statutory appeal right.[19]

3)  FEMA only recently instituted a policy of denying all appeals that grantees submit past the 60-day deadline, and changed this policy without a notice and comment period as required by section 325(a)(1) of the Stafford Act.  In addition, FEMA applies this new policy retroactively, violating section 325(a)(2).[20]

4) The Applicant also requests that FEMA issue an RFI to “identify any remaining substantive issues . . . and allow [the Applicant] sufficient time to respond.”[21]  In addition, the Applicant also argues section 705(c) is distinct from section 423, and that FEMA has read section 705(c) in such a way that it applies only when an applicant raises the issue on appeal.[22]  The Applicant requests to know FEMA’s position on the issue and an opportunity to respond.[23]

The Grantee transferred the Applicant’s second appeal and concurred with its arguments by letter dated January 23, 2018,[24] and also argued that while the Applicant’s Facilities were located in a SFHA, the work done on the Facilities should have been classified as emergency work that would not have warranted a NFIP reduction.[25] 

Discussion

Appeal Timeliness

Section 423(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 provides that “any decision regarding eligibility for . . . assistance under this title may be appealed within 60 days after the date on which the applicant for such assistance is notified of the award or denial of award of such assistance.”[26]  Within 60 days of receiving an applicant’s appeal, a grantee will review and forward the appeal to FEMA with a written recommendation.[27]  If either the Applicant or the Grantee fail to meet these deadlines, the appeal is untimely and the applicant’s appeal rights lapse.[28]  Neither the Stafford Act nor Title 44 of the Code of Federal Regulations authorize FEMA to grant time extensions for filing appeals.[29]

Both the Applicant and the Grantee acknowledge that the Grantee transmitted the Applicant’s appeal letter well outside the 60-day deadline.[30]  While the Grantee states that this late transmittal was the result of misfiling due to staffing changes,[31] the Stafford Act and 44 C.F.R. do not provide for granting time extensions, regardless of the reason for the delay.  Thus, the appeal is untimely.

Waiver of Administrative Conditions - Stafford Act § 301

Under section 301 of the Stafford Act, FEMA may modify or waive administrative conditions for assistance if an applicant or grantee was not able to satisfy those conditions as “a result of the major disaster.”[32]  Here, the Grantee stated that its failure to satisfy 44 C.F.R. § 206.206(c)(2) was due to staffing changes that resulted in the Applicant’s appeal letter being misfiled.[33]  Neither the Applicant nor the Grantee have alleged or demonstrated that the late transmittal was related to the disaster, rather both acknowledge it was a result of human error and staffing issues.  Thus, section 301 of the Stafford Act does not apply, and FEMA cannot waive the 60-day deadline for the Grantee. 

FEMA’s Regulatory Implementation of Stafford Act § 423

The Applicant maintains that 44 C.F.R. § 206.206(c)(2) conflicts with the intent of section 423 of the Stafford Act; however, this is not the case.  The term “applicant” is broad and is inclusive of both grantee and subgrantees; therefore, the 60-day timeframe applies to both applicants and grantees separately.[34]  A contrary interpretation would absolve grantees from complying with a basic grant management function that they receive funding to complete and legally agreed to perform by signing the FEMA State Agreement.[35]  Moreover, inclusion of grantees within the appeal process is necessary because grantees, as the recipient of the grant award, are legally accountable for use of the funds.[36]  As grantees are responsible for any resulting financial outcome of an award, excluding them from them appeal process would not comport with the Stafford Act.[37]  Therefore, 44 C.F.R. does not abrogate an applicant’s statutory right of appeal.

Notice and Comment Requirements - Stafford Act § 325(a)

Section 325(a) of the Stafford Act provides for a notice and comment period for any new or modified policy that governs implementation of the PA program and that could result in “significant reduction of assistance under the program.”[38]  Furthermore, if FEMA implements such a policy, FEMA cannot apply it retroactively, i.e., to disasters that took place before the date that the policy takes effect.[39]  The Applicant argues that FEMA has instituted a new policy in denying appeals solely on a grantee’s failure to transmit appeals within the requisite 60-day timeframe.[40]  This is not a new policy; FEMA has enforced submission timeframes that apply to both the applicant and the grantee for years.  Moreover, nearly thirty years ago, a notice and comment period was provided for the very section at issue, 44 C.F.R. § 206.206, and neither the regulations nor statute governing the appeal period have changed since that time.[41]  The Applicant’s assertion that FEMA has instituted a new policy, without a notice and comment period, and applied it retroactively, is without merit.

Conclusion

The Applicant’s first appeal is untimely because the Grantee submitted the appeal well after the requisite 60-day timeframe.  Accordingly, the Applicant’s second appeal is denied.[42]