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Applicant Eligibility Determination

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DesastreFEMA-1155-DR
ApplicantYuba Investment Company
Appeal TypeSecond
PA ID#000-00000
PW ID#N/A
Date Signed1999-08-13T04:00:00

Citation: Yuba Investment Company; FEMA-1155-DR-CA; Applicant Eligibility Determination

Cross Reference: Dam, eligible applicant, private, investor-owned company

Summary: Following the flood disaster in December 1996, the applicant submitted a Notice of Interest (NOI) for Public Assistance to repair a dam under its ownership. The NOI was inadvertently submitted to the Hazard Mitigation Grant Program and was not submitted to the Public Assistance Program until after the application period had closed. FEMA denied consideration of the NOI due to the untimeliness of its submittal. Upon first appeal, FEMA accepted the NOI and reviewed the application based on eligibility criteria. The Regional Director denied the appeal explaining that the applicant did not meet the regulatory criteria for consideration as an eligible applicant. The State submitted the applicant's second appeal to the Executive Associate Director contending that it is a public utility and any member of the public may use the applicant's facilities if they pay for the service and are within the established service area. Furthermore, the applicant contends that the dam is eligible for repair because: 1) Representatives of the United States Department of Agriculture and the State Dam Safety office determined that the dam needs to be repaired. 2) FEMA never reviewed the application based on need. 3) The California Public Utilities Commission directs the applicant. In addition, Brown's Valley Irrigation District and Olivehurst's Water District are not public agencies, but received FEMA assistance. As these districts are not State or local government agencies, the applicant believes FEMA defines them as public entities. Because the applicant provides a similar service, it believes it is a public entity and is eligible for FEMA funding. 4) The applicant questions why the dam is eligible to receive Hazard Mitigation Grant Program assistance for retrofitting, but the dam is not eligible for permanent restoration assistance. 5) The applicant is an eligible public entity under 44 CFR 206.221(g).

Issues: Is Yuba Investment Company an eligible applicant?

Findings: No. The applicant is a private, investor-owned corporation. It is not a State or local government, special district of the State, Indian tribe or tribal organization, eligible Private Non-Profit organization, or a public entity.

Rationale: 44 CFR 206.221(g) and 44 CFR 206.222

Appeal Letter

August 13, 1999

Ms. Nancy Ward
Governor's Authorized Representative
Governor's Office of Emergency Services
PO Box 419023
Rancho Cordova, California 95741-9023

Re: Second Appeal; Yuba Investment Company; FEMA-1155-DR-CA

Dear Ms. Ward:

This is in response to your September 25, 1998, transmittal of the referenced appeal. Yuba Investment Company (applicant) is requesting that the Federal Emergency Management Agency (FEMA) reevaluate its determination that the applicant is not eligible for Public Assistance funding. The Regional Director determined that the applicant was not an eligible State or local governmental agency or Private Non-Profit organization and, therefore, was not eligible for Public Assistance.

By letters dated August 5, 1998 and November 9, 1998, the applicant submitted a second appeal contending that it is a public utility that is directed by a State agency. The applicant asserts that it provides a service to the public and is a public entity. As explained in the enclosed analysis, I have determined that the applicant does not meet FEMA's definition of an eligible public entity. The applicant is a private, investor-owned corporation which is not eligible for Public Assistance funding. Therefore, the appeal is denied.

Please inform the applicant of this determination. In accordance with the appeal procedure governing appeal decisions made on or after May 8, 1998, my decision constitutes the final decision on this matter. The current appeal procedure was published as a final rule in the Federal Register on April 8, 1998. It amends 44 CFR 206.206.

Sincerely,

/S/

Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

Enclosure

cc: Martha Z. Whetstone
Regional Director
FEMA Region IX

Appeal Analysis

BACKGROUND

Following a flood disaster in December 1996, Yuba Investment Company (applicant) submitted a Notice of Interest (NOI) to the Governor's Office of Emergency Services (OES). The NOI was submitted to OES on April 29, 1997. The applicant claimed that an irrigation dam under its ownership was damaged by the flooding event and requested assistance to repair the damages. The applicant intended to apply for Public Assistance funding. However, the applicant was not fully knowledgeable of FEMA's programs and submitted the NOI for the Hazard Mitigation Grant Program (HMGP). The application period for Public Assistance closed on March 9, 1997. On June 6, 1997, the OES forwarded the NOI to FEMA's Public Assistance office. FEMA's Public Assistance Officer did not accept the NOI due to the untimeliness of the application.

First Appeal

On January 29, 1998, OES submitted the applicant's first appeal. The applicant explained that it did not receive sufficient guidance from Federal and State agencies to know how to appropriately apply for Public Assistance funding. Furthermore, the NOI was submitted prior to the closing date of the HMGP application period. The applicant believed that it was disqualified from assistance due to its lack of knowledge of FEMA/OES procedures.

The Regional Director accepted the NOI and reviewed the applicant's case based on eligibility criteria. The Regional Director replied to the first appeal in two letters. In a letter dated July 17, 1998, the applicant's appeal was denied on the basis that the applicant did not meet the general definition of a Private Non-Profit organization as defined in 44 CFR 206.221(e) and 206.221(f)(1) and (2). In the second letter dated November 5, 1998, the Regional Director further elaborated on the reasons why the applicant was not eligible to receive Public Assistance funding. As stated in 44 CFR 206.222, State or local governments and certain Private Non-Profit organizations are eligible to apply for Public Assistance. Furthermore, no information was provided that confirmed that the applicant is a public entity that receives direction and funding from any political subdivision of the State. As the applicant is a private, investor-owned corporation, the Regional Director determined that it was not eligible for Public Assistance.

Second Appeal

The applicant responded to the Regional Director's denial in letters dated August 5, 1998, and November 9, 1998. In the August 5 letter, the applicant contends that it is a public utility and under the direction of the California Public Utility Commission (CPUC). Any member of the public may use the applicant's facilities if they pay for the service and are within the established service area. Because FEMA provided funding to similar public utilities, the applicant believes it is also eligible for Public Assistance funding.

In the November 9 letter, the applicant contends that repair of its dam is eligible for the following reasons:

  1. Representatives of the United States Department of Agriculture and the State Dam Safety office determined that the dam needs to be repaired. Also, OES sent a packet of materials explaining that the applicant was eligible for FEMA assistance.
  2. FEMA never reviewed the application based on need.
  3. The CPUC, which is a political subdivision of the State, directs the applicant. Therefore, the applicant is a public entity. In addition, Brown's Valley Irrigation District and Olivehurst's Water District are not public agencies, but received FEMA assistance. As these districts are not State or local government agencies, the applicant believes FEMA defines them as public entities. Because the applicant provides a similar service, it believes it is a public entity and is eligible for FEMA funding.
  4. The applicant questions why the dam is eligible to receive Hazard Mitigation Grant Program assistance for retrofitting, but the dam is not eligible for permanent restoration assistance. The dam must be repaired before it can be retrofitted.
  5. The applicant is an eligible public entity under 44 CFR 206.221(g).


DISCUSSION

The following is in response to the applicant's contentions listed above:

  1. The Department of Agriculture and the State Dam Safety Office do not determine if an applicant is eligible for FEMA assistance. At a minimum, the applicant must meet the eligibility criteria defined in the Stafford Act and 44 CFR 206.222. In addition, other Federal and State agencies do not determine if the repair of damages to a facility is eligible for FEMA assistance.

    The HMGP application materials provided by OES did not establish the applicant's eligibility under the Public Assistance Program. HMGP provides grants to State and local governments to implement long-term hazard mitigation measures after a major disaster. This program is intended to reduce the impacts of future disasters on both private and public facilities. Although private businesses may not apply directly to the program, a community may apply on behalf of businesses. Thus, OES recognized that the applicant may have been eligible to receive HMGP funding through the community and forwarded the application materials accordingly. In contrast, private, investor-owned businesses are not eligible for grant funding under the Public Assistance Program. Although the applicant may be eligible for HMGP funding through the community, that does not in turn make them eligible for funding under the Public Assistance Program. The following are eligible applicants under the Public Assistance Program: 1) State governments; 2) Local governments; 3) a political subdivision of the State, such as a special district; 4) certain Private Non-Profit organizations and; 5) public entities.

  2. The applicant requests that FEMA review its application based on need. FEMA understands that disaster-related damages can have a severe impact on public and private facilities and the economic vitality of a community. However, the Stafford Act permits FEMA to provide Public Assistance funding only to eligible applicants. As a private, investor-owned corporation, Yuba Investment Company is not eligible for Public Assistance funding.

  3. The applicant is a private, investor-owned company. However, the applicant believes that it is a public entity and eligible for Public Assistance funding, because the CPUC has defined the irrigation service it provides as a "public utility." In addition, the applicant contends that it is public entity because it serves the public interest and is regulated by a State governmental agency. Without the approval of the CPUC, the applicant cannot change the structure of the company, change prices, lease or sell, or change services.

    Although CPUC regulates the applicant's irrigation service, the applicant is not a public entity as defined by FEMA's regulations. As stated in 44 CFR 206.221(g), a public entity is ".an organization formed for a public purpose whose direction and funding are provided by one or more political subdivisions of the State." To meet these requirements, the majority of the Board of Directors of the organization must be made up of public officials and the majority of the organization's operational funding must be derived from public sources such as a State or local government agency. The applicant has not demonstrated that it meets these criteria.

    In fact, there are a number of privately owned corporations that are regulated by government agencies and provide a public service and are not eligible for Public Assistance funding. For example, Pacific Gas and Electric is regulated and defined as a public utility by the CPUC. However, it is not considered an eligible public entity because it is a privatelun investors.

    Brown's Valley Irrigation District and Olivehurst's Water District are special districts and, therefore, are eligible for Public Assistance funding. Special districts, which are political subdivisions of the State government, are eligible applicants.

  4. Only eligible applicants are eligible for Public Assistance funding to permanently restore their facilities following a disaster event. Permanent restoration funding under the Public Assistance Program is provided for the repair and restoration of publicly owned and certain Private Non-Profit facilities. Conversely, private, investor-owned facilities are not eligible for permanent restoration funding. However, FEMA provides funding through the HMGP to protect all improved property, including private property, from future disaster events.

  5. As stated in our response to item 3 above, the applicant has not demonstrated that it meets the definition of an eligible public entity.



CONCLUSION

The applicant is a private, investor-owned corporation. It is not a State or local government, special district of the State, Indian tribe or tribal organization, Private Non-Profit organization, or a public entity. Therefore, it is not an eligible applicant for the Public Assistance Program. The appeal is denied.