WASHINGTON, D.C. -- Since Hurricane Ike's landfall in Texas, the Federal Emergency Management Agency (FEMA) has received, processed and approved three previous short-term extension requests for Public Assistance funding from Texas Governor Rick Perry. For the first 44 days of the disaster response, FEMA agreed to reimburse the state of Texas 100 percent of its emergency and debris removal costs. Recently, Perry made a fourth request to FEMA for an adjustment to the Federal cost share reimbursement for Hurricane Ike to100 percent for all Public Assistance costs. That request was received on October 20 and is undergoing a thorough review. FEMA offers the following information for the record.
Cost Share Adjustment
The cost share adjustment for Public Assistance Obligations was codified in 1998 by the regulatory document, the 44 CFR (Code of Federal Regulations). This regulation has affected the federal cost share obligations for Presidential disaster declarations since 1999.The Federal cost share has been adjusted for past disasters to be more responsive to the recovery efforts of the state and local communities, based on prevailing regulations and authorities.
Under the normal cost share, FEMA reimburses up to 75 percent for eligible disaster response and recovery public assistance expenses; States and local communities pay the remaining 25 percent.
Federal cost shares can be adjusted for two forms of assistance: emergency work and permanent work. The cost-share may be amended to 90 (FEMA) /10 (State and local), or even eliminated for certain types of work related to emergency protective measures and debris removal, but only in extreme situations where state and local hardships necessitate it.
Process for Requesting a Cost Share Adjustment
In order to adjust the 75 percent federal share of obligated emergency work and/or permanent work costs, the state must request that the President amend the cost share of federal obligations to the disaster.? Once the request is received, the decision-makers complete a careful assessment of the evolving nature of the scope of disaster repairs, and establish a credible projection of overall debris and permanent repair costs.?
As stewards of the federal treasury, decision-makers evaluate the precedent that will be set and, in this case, would determine whether a fourth cost adjustment is justified.?
The federal cost share for emergency work may be adjusted to 100 percent for a limited period in the early days of a major disaster. This has occurred 35 times since 1998. The federal cost share for permanent work may be adjusted up to 90 percent of federal obligations for whenever a disaster is so extraordinary that actual Federal obligations under the Stafford Act, excluding FEMA administrative cost, meet or exceed a qualifying threshold: $110 per capita of State population. To date, the federal cost share for permanent work has been adjusted from 75 percent to 90 percent 29 times since 1998.
There are only two presidential disaster declarations for which FEMA has paid 100 percent federal cost share for all eligible work.
- Cerro Grande Wildfire
- The federal cost share was 100 percent from the onset of the disaster. This was mandated by Congress.
- September 11 Terrorist Attacks.
- The federal cost share was 100 percent from the onset of the disaster. One State, New Jersey, received an emergency declaration and was reimbursed only for emergency work. Virginia was reimbursed only for emergency work. New York was reimbursed for emergency and permanent work.
To give a sense of the rareness of the circumstances for 100 percent federal reimbursement for permanent repair...