Private Nonprofit

Appeal Brief

Summary Paragraph

From September 23 to November 4, 2022, Hurricane Ian impacted Florida. Saving the Sunshine State, Inc. (Applicant), a private nonprofit (PNP) organization, submitted a Request for Public Assistance (RPA), seeking funds to repair its hurricane-damaged facilities. In its RPA, the Applicant stated its primary purpose as providing low-income housing and attached deeds, incorporation, and tax exemption documentation. FEMA issued a Request for Information  seeking documentation detailing the authority under which the Applicant provided the claimed low-income housing services. The Applicant responded by submitting three membership agreements and a pamphlet. On December 28, 2022, FEMA issued a Determination Memorandum, denying the RPA and finding the Applicant did not demonstrate ownership of a facility that provided an eligible PNP service. The Applicant appealed, contending it was an eligible PNP and had provided documentation showing its tax-exempt status, facility ownership,  and compliance with the Internal Revenue Service’s guidelines requirements for low-income residents. The Florida Division of Emergency Management (Recipient) forwarded the Applicant’s appeal to FEMA with its support. On November 15, 2023, the FEMA Region 4 Regional Administrator denied the appeal. FEMA found the Applicant did not document the PNP as a low-income housing establishment under a specific authority, as required by FEMA, and thus did not demonstrate that it owned or operated an eligible facility or provided an eligible service. The Applicant submitted its second appeal, reiterating its first appeal arguments and providing no additional supporting documentation. 

Authorities

• Stafford Act §§ 102(11), 406(a)(1)(B).
• 44 C.F.R. §§ 206.206(a), 206.221(c), (f), 206.222(b).
• PAPPG, at 43-47, 56, 63-64.
• Anchorage Middleton Fire & EMS, FEMA-4497-DR-KY, at 3.

Headnotes

• An eligible PNP facility is one that provides an eligible critical service (e.g., educational, utility, emergency, medical or custodial care) or provides a noncritical, but essential social service and provides those services to the general public. Eligible PNP noncritical, essential social services include low-income housing (as defined by Federal or state, local, territorial, or tribal (SLTT) law or regulation).
  • The Applicant has not demonstrated it owns or operates an eligible PNP facility which provides noncritical, essential social services to the general public that meet the requirements of low-income housing as defined by federal or SLTT law or regulation.

Conclusion

The Applicant has not demonstrated it owns or operates an eligible PNP facility which provides noncritical, essential social services to the general public that are considered low-income housing as defined by federal or SLTT law or regulation. Accordingly, the Applicant is not eligible for PA funding and this appeal is denied.

Appeal Letter

Appeal Analysis

Background

From September 23 to November 4, 2022, Hurricane Ian impacted Florida with strong winds, storm surge, and heavy rain that caused major flooding.[1] On October 4, 2022, Saving the Sunshine State, Inc. (Applicant), a Private Nonprofit (PNP) organization, submitted a Request for Public Assistance (RPA) seeking funds to repair three hurricane-damaged facilities. According to the Applicant’s RPA submission, its primary purpose is providing low-income housing at these facilities.[2] The Applicant provided deeds for each facility and its incorporation and tax exemption documentation in support of its RPA. On October 14, 2022, FEMA issued a Request for Information (RFI) seeking documentation detailing the authority under which the Applicant provided eligible services, including licensing requirements and other relevant local laws, regulations, or statutes regarding low-income housing. FEMA noted that the Applicant did not provide documentation on whether the housing provided by the Applicant was defined as “low-income housing” by Federal or state, local, territorial, or tribal (SLTT) law or regulation. On November 10, 2022, the Applicant responded by submitting three membership agreements and a pamphlet published by the Florida state government. The pamphlet provided definitions for transient and non-transient public lodging establishments, as well as lodging arrangements exempt from state licensing requirements.[3] The membership agreements granted occupants non-exclusive access to the facilities pursuant to detailed terms and conditions.[4]  

On December 28, 2022, FEMA issued a Determination Memorandum, finding the Applicant failed to demonstrate that it provided an eligible PNP service at an eligible PNP facility and, therefore, denying the Applicant’s RPA. FEMA stated that the type of arrangement identified by the Applicant and described in its membership agreements did not constitute low-income housing as intended by FEMA policy, or as defined by Federal or SLTT law or regulation.

First Appeal

In a letter dated February 25, 2023, the Applicant submitted its first appeal of FEMA’s denial. The Applicant contended it was an eligible PNP and provided documentation showing its tax-exempt status with the Internal Revenue Service (IRS) and ownership of the claimed facilities. It also stated that its properties met the IRS’s Safe Harbor guidelines for low-income occupants because all of its occupants made 80 percent or less of the median income of a particular zip code. In response to FEMA’s determination, which had noted that the Applicant’s membership agreements required members to maintain a separate primary residence outside of the facilities at all times, the Applicant also stated the IRS Safe Harbor guidelines did not require a facility to be a low-income resident’s sole or primary residence. On April 26, 2023, the Florida Division of Emergency Management (Recipient) forwarded the Applicant’s appeal to FEMA with its support.

On November 15, 2023, the FEMA Region 4 Regional Administrator denied the appeal. FEMA found that the documentation provided by the Applicant did not define the PNP as a low-income housing establishment under a specific authority, as required by FEMA, and thus the Applicant did not demonstrate that it owned or operated an eligible facility or provided an eligible service.

Second Appeal

On January 13, 2024, the Applicant submitted its second appeal requesting reconsideration of FEMA’s denial of eligibility, asserting its facilities are eligible because they provide housing to low-income individuals. The Applicant reiterates its first appeal arguments. It also emphasizes that individuals use its services out of necessity, often cannot prove a lack of income, and may not keep accurate financial documents that would allow for documented proof of their financial hardship. Therefore, the Applicant confirms it only requires individuals to attest orally or in writing to their income range, which it states is consistent with the practices of homeless shelters, food pantries, and state assistance programs. The Applicant also states that, because its facilities are among the only transitional housing programs that allow individuals and families that do not suffer from addiction, parole, or probation difficulties, it consequently serves to fill the gap between homeless shelters and permanent housing for individuals that need time to save the money and build their credit to be able to afford to rent their own place. On March 7, 2024, the Recipient forwarded the Applicant’s appeal to FEMA, noting that the Applicant did not provide documentation to demonstrate its services met the requirements of a low-income housing establishment and recommending FEMA, as appropriate, request additional specific information directly from the Applicant to cover any deficiencies.

Discussion

FEMA may provide funding for repair, restoration, reconstruction, or replacement of eligible PNP facilities damaged or destroyed by a major disaster.[5] To be eligible for Public Assistance (PA), a PNP organization must currently have: (1) a ruling letter from the IRS that was in effect at the time of the disaster, granting tax exemption under sections 501(c), (d), or (e) of the Internal Revenue Code of 1954; or (2) satisfactory evidence from the State that the organization is a non-revenue producing, nonprofit entity organized or doing business under State law.[6] In addition, it must also show that it owns or operates an eligible PNP facility.[7] An eligible PNP facility is one that provides an eligible critical service (e.g., educational, utility, emergency, medical or custodial care) or provides a noncritical, but essential social service and provides those services to the general public.[8] Eligible PNP noncritical, essential social services include low-income housing (as defined by Federal or SLTT law or regulation).[9]  It is the applicant’s responsibility to provide documentation to substantiate its claim as eligible and to clearly explain how those records support the appeal.[10] If an applicant does not provide sufficient documentation to support its eligibility, FEMA cannot provide PA funding.[11]

The Applicant has provided documentation, including deeds, articles of incorporation, and an IRS letter, to demonstrate the following: (1) ownership of the facilities included in its RPA; (2) IRS tax exemption as a charitable organization; and (3) fulfillment of the state of Florida’s requirements as a business. However, these documents do not identify any specific service the Applicant provides, and they do not state that the Applicant’s purpose is to provide low-income housing pursuant to any federal or state authority. Rather, the Applicant’s Articles of Incorporation, and the confirmation letter from the IRS, merely state the Applicant is organized exclusively for charitable purposes that qualify as exempt.[12] 

The documentation in the record does not demonstrate that the Applicant’s facilities provide low-income housing, and the Applicant has not identified any Federal or SLTT law or regulation, including any Florida law or regulation, that supports its classification of the facilities as providing low-income housing services. Moreover, FEMA’s own review of a non-exhaustive list of authorities related to low-income housing did not identify any Federal or state laws or regulations that demonstrate the Applicant’s facilities constitute low-income housing.[13] For example, the Applicant did not show or assert it receives federal or state housing assistance payments pursuant to any subsidy program for low-income housing.[14]

The Applicant claims that its facilities meet Federal guidelines, in that all of the occupants make 80 percent or less of the median income for their zip code. However, the Applicant has not provided documentation substantiating this claim. For example, the membership agreements provided do not document the members’ annual income or contain any income requirements to determine a member’s eligibility for low-income housing. Instead, each membership agreement shows the Applicant offers low-cost rooms and other social services rather than low-income housing pursuant to state or federal authority. The Applicant explains that, because some of the individuals that receive its services do not keep accurate financial documents or cannot prove their lack of income, it only requires individuals to attest orally or in writing to their annual income range without providing actual financial documentation. However, the Applicant has not established that it implements this requirement through supporting documentation.

Neither the Applicant’s Articles of Incorporation, membership agreements, pamphlet defining public housing, nor statement regarding the geographic area median income, without additional supporting documentation, demonstrate the Applicant provides a noncritical but essential social service, specifically low-income housing under a specific federal or SLTT authority, that would make the Applicant eligible for PA funding.   

Conclusion

The Applicant has not demonstrated it owns or operates an eligible PNP facility which provides noncritical, essential social services that are considered low-income housing as defined by Federal or SLTT law or regulation. Accordingly, the Applicant is not eligible for PA funding and this appeal is denied.