Rule2023-18457
Hermit's Peak/Calf Canyon Fire Assistance
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 29, 2023
Effective
August 29, 2023
Issuing agencies
Homeland Security DepartmentFederal Emergency Management Agency
Abstract
This final rule sets out the procedures for claimants to seek compensation for injury or loss of property resulting from the Hermit's Peak/Calf Canyon Fire.
Full Text
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<title>Federal Register, Volume 88 Issue 166 (Tuesday, August 29, 2023)</title>
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[Federal Register Volume 88, Number 166 (Tuesday, August 29, 2023)]
[Rules and Regulations]
[Pages 59730-59783]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-18457]
[[Page 59729]]
Vol. 88
Tuesday,
No. 166
August 29, 2023
Part V
Department of Homeland Security
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Federal Emergency Management Agency
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44 CFR Part 296
Hermit's Peak/Calf Canyon Fire Assistance; Final Rule
Federal Register / Vol. 88 , No. 166 / Tuesday, August 29, 2023 /
Rules and Regulations
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
44 CFR Part 296
[Docket ID FEMA-2022-0037]
RIN 1660-AB14
Hermit's Peak/Calf Canyon Fire Assistance
AGENCY: Federal Emergency Management Agency, Department of Homeland
Security.
ACTION: Final rule.
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SUMMARY: This final rule sets out the procedures for claimants to seek
compensation for injury or loss of property resulting from the Hermit's
Peak/Calf Canyon Fire.
DATES: This rule is effective August 29, 2023.
FOR FURTHER INFORMATION CONTACT: Angela Gladwell, Office of Response
and Recovery, 202-646-2500, <a href="/cdn-cgi/l/email-protection#387e7d757915705d4a55514c4b15685d5953785e5d5559165c504b165f574e"><span class="__cf_email__" data-cfemail="afe9eae2ee82e7caddc2c6dbdc82ffcacec4efc9cac2ce81cbc7dc81c8c0d9">[email protected]</span></a>. Persons
with hearing or speech challenges may access this number through TTY by
calling the toll-free Federal Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Summary of Legal Authority
Congress enacted the Hermit's Peak/Calf Canyon Fire Assistance Act
(``Act'') as part of the Continuing Appropriations and Ukraine
Supplemental Appropriations Act, 2023, Public Law 117-180, 136 Stat.
2114 (2022), and directed FEMA to issue an Interim Final Rule (``IFR'')
within 45 days of enactment. Congress passed the Act to compensate
those parties who suffered injury and loss of property from the
Hermit's Peak/Calf Canyon Fire (``Fire''). The Act requires FEMA to
design and administer a claims program to compensate victims of the
Fire for injuries resulting from the Fire and to provide for the
expeditious consideration and settlement for those claims and injuries.
The Act further directs FEMA to establish an arbitration process for
disputes regarding claims. On December 29, 2022, the Consolidated
Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459 provided
additional funding for the Act's implementation.
B. Summary of the IFR
On November 14, 2022, FEMA published the IFR that established the
procedures for processing and paying claims for property, business,
and/or financial losses to those sustaining losses from the Fire.
FEMA's procedures in the IFR were generally consistent with those
established for claims associated with the Cerro Grande Fire Assistance
Act.\1\ Under the IFR procedures, a claimant initiates a claim by
filing a Notice of Loss with the Office of Hermit's Peak/Calf Canyon
Fire Claims (``Claims Office''). After receipt and acknowledgement by
the Claims Office, the Claims Office contacts the claimant to review
the claim and helps the claimant formulate a strategy for obtaining any
necessary supporting documentation to complete the Proof of Loss. After
coordinating with the Claims Reviewer, the claimant reviews and signs a
Proof of Loss and submits it to the Claims Office. The Claims Reviewer
reviews and evaluates the Proof of Loss and submits a report to the
Authorized Official for review to determine whether compensation is due
to the claimant. The Authorized Official's written decision is provided
to the claimant. If satisfied with the decision, the claimant receives
payment after returning a completed Release and Certification Form. If
the claimant is not satisfied with the decision, an Administrative
Appeal could be filed with the Director of the Claims Office. If the
claimant is not satisfied after appeal, the dispute could be resolved
through binding arbitration or heard in the United States District
Court for the District of New Mexico.
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\1\ The Cerro Grande Fire Assistance Act (Pub. L. 106-246
(2001)) required FEMA to design and administer a program to fully
compensate those who suffered injuries resulting from the Cerro
Grande Fire. The Cerro Grande Fire resulted from a prescribed fire
ignited on May 4, 2000, by National Park Service fire personnel at
the Bandelier National Monument, New Mexico under an approved
prescribed fire plan. That fire burned approximately 47,750 acres
and destroyed over 200 residential structures. The Cerro Grande Fire
Assistance Act process is detailed in an Interim Final Rule (65 FR
52259 (Aug. 27, 2000) and a Final Rule (66 FR 15847 (Mar. 21, 2001)
that is now codified at 44 CFR part 295.
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C. Summary of Changes From the IFR to the Final Rule
FEMA is making changes from the IFR to the Final Rule to reflect
the concerns raised by commenters and better adhere to the intent of
the Act by addressing the needs of the communities impacted by the
Fire. Given the geographic, economic, and cultural distinctions between
the impacted communities of the Cerro Grande and the Hermit's Peak/Calf
Canyon Fires, FEMA is revising some sections of the regulatory text to
ensure the claims process is more tailored to claimants impacted by the
Fire. FEMA is revising the regulatory text in the Final Rule to
eliminate the 25 percent formulas associated with reforestation and
revegetation in Sec. 296.21(c)(2) and with heightened risk reduction
in Sec. 296.21(e)(5) that were based on the Cerro Grande Fire
Assistance process. FEMA recognizes the distinct geographic, economic,
and cultural differences between these impacted communities and that
these formulas, while an efficient way to process claims in the Cerro
Grande Fire Assistance process, are not easily adapted to meet the
needs of claimants injured by the Fire. FEMA agrees with the majority
of commenters that removal of these formulas is essential to ensuring
claimants in the Hermit's Peak/Calf Canyon Fire Assistance process are
compensated for their actual compensatory damages resulting from the
Fire. FEMA is modifying Sec. 296.21(c)(3)(ii) regarding claims for a
decrease in the value of real property. Distinct from Cerro Grande, the
claimants impacted by this Fire have commented that they are more
likely to have significant acreage damaged that has the potential for
long-term natural restoration. Requiring that the property value be
permanently diminished for a decrease in property value claim, as
provided in the IFR, is inconsistent with the geography, economy, and
real estate valuations of the impacted communities.\2\ Based on
comments received and to ensure the Final Rule accommodates the needs
of claimants and impacted communities, FEMA is revising the language in
296.21(c)(3)(ii) to allow a claimant to establish that the value of the
real property was ``significantly'' diminished ``long-term'' as a
result of the Fire. FEMA is adding paragraph (c)(5) to incorporate
language from the Act regarding physical infrastructure to ensure that
claimants understand compensatory damages may be awarded for damage or
destruction of physical infrastructure, including damage to irrigation
infrastructure such as acequia systems. Acequia systems are unique to
the communities impacted by
[[Page 59731]]
the Fire and, just as the Act recognizes this distinction, FEMA is also
recognizing it and incorporating it into the Final Rule.
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\2\ ``On the flip side, economic strategies traditionally
employed in the Santa Fe National Forest assessment area, typically
combining ranching, acequia agriculture, wood collection and other
communal land uses, appear to be less viable in the context of
rising land values and declining prices for primary commodities.
Consequently, many of these traditional uses are party to the
transformation of land use patterns, as ranches and agricultural
lands are sold for residential and second home development.''
University of New Mexico Bureau of Business and Economic Research,
``Socioeconomic Assessment of the Santa Fe National Forest,'' August
2007 at pg. 99, found at <a href="https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf">https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf</a> (last accessed July 5, 2023).
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In the IFR, FEMA requested additional feedback on some of the dates
set relating to claims for financial losses. Based on comments
received, FEMA is making changes to those dates. FEMA currently
requires claimants seeking compensation for out-of-pocket expenses for
treatment of mental health conditions to submit claims for treatment
rendered on or before April 6, 2024. FEMA is revising this paragraph to
allow claims for treatment identified on or before November 14, 2024,
consistent with the timeframe for submitting a claim under the Act.
FEMA recognizes that mental health treatment may extend beyond the
deadline for filing a claim and claimants may reopen claims under Sec.
296.35 for good cause. FEMA is also making a clarifying edit in the
Final Rule by specifying that the treatment can be for a condition that
resulted from the Fire or for conditions worsened by the Fire. Based on
comments received, this edit helps clarify that treatment for
conditions worsened by the Fire will also be compensated. In the IFR,
FEMA allows compensation for donations provided no later than September
20, 2022. FEMA is revising Sec. 296.21(c)(4) to allow claimants to
seek actual compensatory damages for donations provided to survivors no
later than November 14, 2022. FEMA is setting the date of the IFR
publication as the timeframe by which donations will be considered
compensable.
FEMA is modifying the language in Sec. 296.31(a) regarding
reimbursement for expert opinions. FEMA understands that claimants
impacted by this Fire are more likely to need the services of experts
to help better value their claims than the claimants in the Cerro
Grande Fire Assistance process given the scope of the Fire and the
geographic, economic, and cultural distinctions between the impacted
communities. FEMA is revising the regulatory text to allow for
reimbursement for expert opinions that the Claims Office deems
necessary to determine the amount of the claim. This additional
flexibility will help claimants and FEMA better understand and process
claims.
FEMA is also revising Sec. 296.35 of the regulatory text in the
Final Rule regarding reopening a claim. The IFR provides that claimants
can seek to reopen their claim to consider issues raised when the
claimant closes on the sale of a home and wishes to present a claim for
a decrease in the value of their real property under Sec.
296.21(c)(3). FEMA is revising this language in the Final Rule to allow
claimants to reopen their claim when the claimant closes on the sale of
real property, expanding the ability to reopen a claim beyond just a
home. This change reflects the unique geographic area impacted by the
Fire and the reality that claimants may sell a portion of their land
without necessarily selling their home and experience a loss for which
compensation should be made available. FEMA is also revising the
timeline by which a request to reopen must be submitted for claims
related to additional losses as part of a reconstruction in excess of
those previously awarded or for good cause. Recognizing the challenges
claimants face with reconstruction and other potential issues that can
arise that require a claim to be reopened, FEMA is revising Sec.
296.35 to set the deadline by which requests to reopen these types of
claims must be submitted as a date in the future that the Director of
the Claims Office will set and publish in the Federal Register and at
<a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a>.
FEMA is making some clarifying revisions in the Final Rule.
Currently in Sec. 296.1, FEMA states the purpose of the rule is to pay
for actual compensatory damages for injuries suffered from the Fire
(emphasis added). FEMA is revising this language, consistent with the
language from the Act, to pay for actual compensatory damages for
injuries resulting from the Fire (emphasis added). FEMA is making this
edit to better communicate to claimants that all injuries resulting
from the Fire, including injuries resulting from flooding, mudflow,
mold, and debris flow in the aftermath of the Fire, are compensable.
However, a claimant may not be eligible for compensation if their
injuries resulted from flooding, mudflow, mold, or debris unrelated to
the Fire. FEMA is also updating the definition of ``subsistence
resources'' to include ``other natural resource'' gathering, consistent
with how the impacted communities are engaged in subsistence
activities. FEMA is updating Sec. 296.12 regarding election of
remedies. The IFR discusses how claimants waive their right to pursue
claims if they accept an award. FEMA is revising this section to
clarify that the claimant waives their right to pursue other claims
only after acceptance of a final award, consistent with commenters'
request for additional clarity on this point and for consistency with
the Act. Consistent with the Act, FEMA is incorporating language in
Sec. 296.13 to reiterate the prioritization of claims for injured
persons over subrogees. In Sec. 296.21(a), FEMA is resolving a
grammatical error by changing ``Injury'' to ``injury'' and another
grammatical error by adding ``that'' to Sec. 296.21(f) to read that
the Act allows FEMA to compensate Injured Persons only for damages not
paid, or that will not be paid, by insurance or other third-party
payments or settlements.
II. Background and Legal Authority
On September 30, 2022, President Biden signed the Act into law as
part of the Continuing Appropriations and Ukraine Supplemental
Appropriations Act, 2023, Public Law 117-180, 136 Stat. 2114 (2022).\3\
Congress passed the Act to compensate those parties who suffered injury
and loss of property from the Hermit's Peak/Calf Canyon Fire. On April
6, 2022, the U.S. Forest Service initiated the Las Dispensas-Gallinas
prescribed burn on Federal land in the Santa Fe National Forest in San
Miguel County, New Mexico. That same day the prescribed burn, which
became known as the ``Hermit's Peak Fire,'' escaped the burn unit's
boundaries and was declared a wildfire, spreading to other Federal and
non-Federal lands.\4\ On April 19, 2022, the Calf Canyon Fire, also in
San Miguel County, New Mexico, began burning on Federal land and was
later identified as the result of a pile burn in January 2022 that
remained dormant under the surface before reemerging.\5\ The Hermit's
Peak and Calf Canyon Fires merged on April 27, 2022, and both fires
were reported as the Hermit's Peak Fire or the Hermit's Peak/Calf
Canyon Fire. By May 2, 2022, the fire had grown, causing evacuations in
multiple villages and communities in San Miguel County and Mora County,
including the San Miguel County jail, the State's psychiatric hospital,
the United World College, and New Mexico
[[Page 59732]]
Highlands University.\6\ At the request of New Mexico Governor Lujan
Grisham, President Biden issued a major disaster declaration on May 4,
2022.\7\ The Hermit's Peak/Calf Canyon Fire was not 100 percent
contained until August 21, 2022.\8\
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\3\ As mentioned above, Division N, Title VI of the Consolidated
Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459
authorized additional funding to implement the Act.
\4\ Section 102(a)(1) and (2), Hermit's Peak/Calf Canyon Fire
Assistance Act, Public Law 117-180, 136 Stat. 2114 (2002). See also
``Las Dispensas Prescribed Burn Declared Wildfire,'' Apr. 6, 2022
found at <a href="https://inciweb.nwcg.gov/incident/article/8049/68044/">https://inciweb.nwcg.gov/incident/article/8049/68044/</a> (last
accessed July 5, 2023 Sept. 15, 2022) and Theresa Davis, ``How `good
fires' can turn into wildfires,'' Albuquerque Journal, Apr. 30, 2022
found at <a href="https://www.alqjournal.com/2494692/how-good-fires-can-turn-into-wildfires.html">https://www.alqjournal.com/2494692/how-good-fires-can-turn-into-wildfires.html</a> (last accessed Sept. 15, 2022).
\5\ See Bill Gabbert, ``Investigators determine Calf Canyon Fire
caused by holdover from prescribed fire,'' Wildfire Today, May 27,
2022 found at <a href="https://wildfiretoday.com/?s=calf+canyon+holdover&apbct__email_id__search_form_34270=">https://wildfiretoday.com/?s=calf+canyon+holdover&apbct__email_id__search_form_34270=</a> (last
accessed Oct. 6, 2022).
\6\ See Bill Gabbert, ``Calf Canyon/Hermits Peak Fire grows to
more than 120,000 acres,'' Wildfire Today, May 2, 2022 found at
<a href="https://wildfiretoday.com/2002/05/02/calf-canyon-hermits-peak-fire-grows-to-more-than-120000-acres/">https://wildfiretoday.com/2002/05/02/calf-canyon-hermits-peak-fire-grows-to-more-than-120000-acres/</a> (last accessed Sept. 15, 2022). See
also Bryan Pietsch and Jason Samenow, ``New Mexico blaze is now
largest wildfire in state history,'' The Washington Post, May 17,
2022, found at <a href="https://www.washingtonpost.com/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/">https://www.washingtonpost.com/nation/2022/05/17/calf-canyon-hermits-peak-fire-new-mexico/</a> (last accessed July 27,
2023).
\7\ 87 FR 33808 (June 3, 2022).
\8\ ``Hermits Peak/Calf Canyon Fire 100 percent contained, fire
officials say,'' The New Mexican, Aug. 21, 2022 found at <a href="https://www.santafenewmexican.com/news/local_news/hermits-peak-calf-canyon-fire-100-percent-contained-fire-officials-say/articles_5ac054fc-21a1-11ed-9401-134e852ee0a8.html">https://www.santafenewmexican.com/news/local_news/hermits-peak-calf-canyon-fire-100-percent-contained-fire-officials-say/articles_5ac054fc-21a1-11ed-9401-134e852ee0a8.html</a> (last accessed July 5, 2023).
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The Act provides compensation to injured persons impacted by the
Fire. It requires FEMA to design and administer a claims program to
compensate injured parties for injuries resulting from the Fire and to
provide for the expeditious consideration and settlement for those
claims and injuries. The Act further directs FEMA to establish an
arbitration process for disputes regarding claims.
On November 14, 2022, FEMA published an IFR with a 60-day comment
period that established the procedures for the processing and payment
of claims to those injured by the Fire sustaining property, business,
and/or financial losses. FEMA held public meetings during the comment
period to further gather public feedback on the rule. Based on public
comment, FEMA is making changes to the Final Rule to better reflect the
differences between the Cerro Grande Fire and the Hermit's Peak/Calf
Canyon Fire, as the Hermit's Peak/Calf Canyon Fire destroyed a
significant amount of forested private lands, communities, acequias,
ranches, and farms, and to further reflect the specific cultural,
economic, and geographic distinctions between the areas impacted by the
Hermit's Peak/Calf Canyon Fire. This rule finalizes the IFR, with
changes in response to public comments received on the IFR.
III. Discussion of Public Comments and FEMA's Responses
A. Summary of Public Comments
The public comment period on the IFR closed on January 13, 2023,
and FEMA received 190 germane written comments.\9\ FEMA hosted six
public meetings on the IFR and received 103 germane comments from those
public meetings.\10\ FEMA also hosted a meeting with the State of New
Mexico's Department of Homeland Security and Emergency Management and
supporting contract staff, and received comments during that
meeting.\11\ Commenters included individuals, State and local
government entities, congressional representatives, associations, law
firms, and non-profit organizations. Some commenters appreciated FEMA's
effort to publish the IFR in a timely manner, arrange public meetings
to listen to concerns in-person, and launch the claims process. Most
commenters offered recommendations for changes to the IFR. FEMA
describes the specific revisions to the Final Rule and addresses the
specific concerns of commenters below.
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\9\ FEMA received three comments that did not address the
Interim Final Rule or the claims process: One commenter asked where
the regulation could be read, and FEMA contacted the commenter to
provide this information; another commenter shared a poem to reflect
their feelings during the holiday season after the Fire; one comment
from a law firm was incomplete without attachments referenced.
\10\ FEMA also received an inquiry on the status of another FEMA
application at a public meeting. A commenter offered their services
to assist with claims, filling out applications for Federal
agencies, internet use, mental health assistance, etc. at two public
meetings. Another commenter from the same organization also offered
services during a public meeting.
\11\ Transcripts of that meeting have been posted to the public
docket at <a href="https://www.regulations.gov/docket/FEMA-2022-0037">https://www.regulations.gov/docket/FEMA-2022-0037</a>.
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B. Differences Between the Hermit's Peak/Calf Canyon Fire and the Cerro
Grande Fire
Some commenters recommended changes to the IFR based on the
distinctions between the Cerro Grande and Hermit's Peak/Calf Canyon
Fires.
Comment: Several commenters stated distinctions between the two
areas where the fires were located. As one commenter stated, the
Hermit's Peak/Calf Canyon Fire ``destroyed significant forested private
lands, communities, acequias, ranches, and farms.'' Another commenter
stated that the Cerro Grande Fire ``burned a mostly urban environment
of high-value homes on mostly small tracts of land'' while the Hermit's
Peak/Calf Canyon Fire burned ``mostly rural land with relatively fewer
and lower value structures.''
FEMA Response: FEMA agrees that the challenges facing the
communities and claimants impacted by the Hermit's Peak/Calf Canyon
Fire are distinct and that the IFR should be revised to better reflect
those distinctions. The Cerro Grande Fire burned approximately 47,000
forested acres, causing $1 billion in property damage with over 280
homes destroyed or damaged and 40 laboratory structures burned.\12\ In
contrast, the Hermit's Peak/Calf Canyon Fire burned more than 340,000
acres, just under 200,000 of which were privately owned, and destroyed
at least 160 homes and over 900 structures.\13\ According to the 2020
Census, Los Alamos County's population density is 178 people per square
mile compared to 5.8 people per square mile in San Miguel County and
2.2 people per square mile in Mora County.\14\ In the Socioeconomic
Assessment of the Santa Fe National Forest, provided to the U.S. Forest
Service by the University of New Mexico, Bureau of Business and
Economic Research, approximately one third of privately held land
within the Santa Fe National Forest is located in San Miguel
County.\15\ Given the Hermit's Peak/Calf Canyon Fire's scope and the
type of land impacted by that fire, FEMA is proposing changes to
sections 296.4, 296.21(c)(2), 296.21(c)(3)(ii), 296.21(e)(5),
296.31(a), and 296.31(c)(3) while adding Sec. 296.21(c)(5) to address
the concerns raised that are unique to those communities. Changes to
each of these sections is further described below.
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\12\ Bill Gabbert, ``Cerro Grande fire, 10 years ago today,''
May 10, 2010 found at <a href="https://wildfiretoday.com/2010/05/10/cerro-grande-fire-10-years-ago-today/">https://wildfiretoday.com/2010/05/10/cerro-grande-fire-10-years-ago-today/</a> (last accessed July 5,, 2023).
\13\ See New Mexico Forest and Watershed Restoration Institute,
``Hermit's Peak and Calf Canyon Fire: The largest wildfire in New
Mexico's recorded history and its lasting impacts'' Aug. 24, 2022,
found at <a href="https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653">https://storymaps.arcgis.com/stories/d48e2171175f4aa4b5613c2d11875653</a> (last accessed Mar. 3, 2023).
\14\ See <a href="https://www.census.gov/library/stories/state-by-state/new-mexico-population-change-between-census-decade.html">https://www.census.gov/library/stories/state-by-state/new-mexico-population-change-between-census-decade.html</a> (last
accessed July 5, 2023).
\15\ University of New Mexico Bureau of Business and Economic
Research, ``Socioeconomic Assessment of the Santa Fe National
Forest,'' August 2007 at pg. 5, found at <a href="https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf">https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf</a> (last accessed Mar. 3,
2023).
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Comment: Commenters reiterated the communities impacted by the
Hermit's Peak/Calf Canyon Fire also had different economic and cultural
practices. One commenter stated that ``FEMA is totally unfamiliar with
how land management, including use of resources is conducted in an area
where descendants of an individual land grant have access to and use of
resources within that grant.'' The commenter went on to note that the
Cerro Grande Fire impacted a part of the State that ``has little in
common with the cultural and economic practices in this area.'' As one
commenter stated, ``Individuals and businesses relied on
[[Page 59733]]
the forests not just for subsistence, but also for their annual income
for themselves and others in the community.'' Another commenter stated,
``The use of the land's timber in small (family) enterprises is one of
the keys to the livelihoods of this area. Another is the small farming
enterprises consisting of small orchards, raising hay, cattle, and
horses. This is not a region of city life and landscaping, but is
rural, with a deep heritage of independent living and family
business.''
FEMA Response: FEMA agrees that the losses facing the communities
and claimants impacted by the Hermit's Peak/Calf Canyon Fire are
distinct and that the IFR should be revised to better reflect those
distinctions. The Act requires FEMA to compensate claimants for
injuries resulting from the Fire and the injuries suffered by claimants
in this community are distinct from those suffered in Cerro Grande.
Specifically, FEMA notes the economic differences between the two
impacted communities resulted in different losses within each
community. Los Alamos County has an economy ``almost entirely composed
of government, retail, and service sector jobs. These three sectors
combined make up more than 90 percent of the county's employment . . .
Los Alamos is somewhat unique in its lack of farming and other `core'
industry sectors such as construction and manufacturing . . . Mora
County is by far the smallest county in the region, in terms of size as
well as economy . . . San Miguel County is fairly small, and farm
employment makes up a larger portion of overall employment there than
in any other county in the region except Rio Arriba. San Miguel and
Mora County contain minor, though substantial, sections of the Santa Fe
N[ational] F[orest]. These two counties, as the smaller and poorer
economies of the region, likely rely more heavily on the benefits of
the forest as a provider of primary products such as fuel wood and
food, as well as land for ranching and logging.'' \16\ The communities
impacted by the Hermit's Peak/Calf Canyon Fire rely much more on the
land for their economic viability than the Los Alamos County community
that was impacted by the Cerro Grande Fire. Additionally, the
population per square mile in the impacted communities demonstrates a
much higher density in Los Alamos County compared to Mora and San
Miguel Counties and requiring FEMA to consider the differences in the
residential areas impacted by the two fires.\17\ To fully implement the
intent of the Act, FEMA must consider these differences between the
impacted communities and address the specific injuries suffered by the
Hermit's Peak/Calf Canyon Fire communities around the use of the land
in those communities. FEMA is proposing changes to Sec. Sec. 296.4,
296.21(c)(2), 296.21(c)(3)(ii), 296.21(e)(5), 296.31(a), and 296.35
while adding Sec. 296.21(c)(5) to address the concerns raised that are
unique to these communities. Changes to each of these sections are
further described below.
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\16\ University of New Mexico Bureau of Business and Economic
Research, ``Socioeconomic Assessment of the Santa Fe National
Forest,'' August 2007 at pgs. 78-79 and 89, found at <a href="https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf">https://www.fs.usda.gov/internet/FSE_DOCUMENTS/fsbdev3_021243.pdf</a> (last
accessed Mar. 3, 2023).
\17\ The population per square mile in 2020 was 178 in Los
Alamos County, 5.8 in San Miguel County, and 2.2 in Mora County. See
U.S. Census Quick Facts--Los Alamos County, New Mexico found at
<a href="https://www.census.gov/quickfacts/losalamoscountynewmexico">https://www.census.gov/quickfacts/losalamoscountynewmexico</a>, <a href="https://www.census.gov/quickfacts/sanmiguelcountynewmexico">https://www.census.gov/quickfacts/sanmiguelcountynewmexico</a>, and <a href="https://www.census.gov/quickfacts/moracountynewmexico">https://www.census.gov/quickfacts/moracountynewmexico</a> (last accessed July 5,
2023).
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Comment: Commenters stated another distinction between those
impacted by the Hermit's Peak/Calf Canyon Fire and those impacted by
the Cerro Grande Fire included the number of claimants that are
insured, stating more claimants in the Cerro Grande Fire were insured
than in the Hermit's Peak/Calf Canyon Fire.
FEMA Response: FEMA agrees that the challenges facing the claimants
impacted by the Hermit's Peak/Calf Canyon Fire are distinct and that
the IFR should be revised to better reflect those distinctions.
Specifically, FEMA is proposing changes to sections 296.21(c)(2),
296.21(e)(5), 296.31(a), and 296.35 while adding Sec. 296.21(c)(5) to
address the concerns raised regarding the number of uninsured claimants
impacted by the fire.
Comment: A commenter suggested FEMA look at other wildfires beyond
Cerro Grande, including the recent California wildfire involving a
utility company.
FEMA Response: FEMA appreciates the suggestion and has reviewed
some of the best practices associated with the California compensation
process referenced by the commenter. That process, however, involved a
bankruptcy settlement of a private corporation under California law.
FEMA is required to follow the statutory framework provided in the Act.
While the Claims Office is reviewing some of the best practices from
the California incident, that incident and the compensation process
implemented to compensate those injured thereby are factually and
legally too distinct from the Act's requirements to be considered a
full template for implementation in regulation.
C. Comments on Sec. Sec. 296.1 and 296.3, the Rule's Purpose and
Information
Comment: FEMA received comments stating the IFR's purpose should be
revised to reflect the Act's purpose language. Specifically, a
commenter wrote ``The Hermit's Peak/Calf Canyon Fire Assistance Act
provides one of the purposes of the Act is `to compensate victims of
the Hermit's Peak/Calf Canyon Fire, for injuries resulting from the
fire.' . . . FEMA's [I]nterim [F]inal [R]ule's current phrase `suffered
from the Hermit's Peak/Calf Canyon Fire' (emphasis added) could result
in limiting allowable losses to solely fire damages, in violation of
the Act.''
FEMA's Response: FEMA agrees that the Act's purpose as stated in
section 102(b)(1) is to compensate victims for ``injuries resulting
from the Fire'' (emphasis added) and is amending Sec. 296.1 to state
that the Claims Office will receive, evaluate, process, and pay actual
compensatory damages for injuries resulting from the Hermit's Peak/Calf
Canyon Fire. This technical edit provides consistency with the language
of the Act.
Comment: Some commenters requested FEMA change the purpose of the
rule in Sec. 296.1 to include flood damages, as well as throughout the
rest of the rule.
FEMA Response: The Final Rule language as revised in Sec. 296.1 as
explained above is sufficiently broad to encompass a range of damages
claimants may have suffered, including flood and flood-related damages.
Further, the definition of ``injured person'' includes injuries
``resulting from the Hermit's Peak/Calf Canyon Fire'' and is
sufficiently broad to encompass flooding, mudflow, mold, and debris
flow, as well as other types of injuries that may result from the Fire.
Comment: One commenter suggested that FEMA include specific
reference to mitigation efforts in the rule's purpose.
FEMA Response: Section 296.1 does not require any edits to
incorporate mitigation efforts into the rule. The purposes of the Act
are to compensate Fire victims for injuries resulting from the Fire and
the expeditious consideration and settlement of claims for those
injuries. Further, the Act requires FEMA to promulgate a regulation
``for the processing and payment of claims under the Act.'' Consistent
with the Act, FEMA's Final Rule states the purpose of the regulation is
to ``establish the Office of Hermit's Peak/Calf Canyon Fire Claims
(`Claims Office') to receive, evaluate, process,
[[Page 59734]]
and pay actual compensatory damages for injuries resulting from the
Hermit's Peak/Calf Canyon Fire.'' The Act authorizes FEMA to compensate
claimants for the ``costs of reasonable efforts, as determined by the
Administrator, to reduce the risk of wildfire, flood, or other natural
disaster in the counties impacted by the Hermit's Peak/Calf Canyon Fire
to risk levels prevailing in those counties before the Hermit's Peak/
Calf Canyon Fire,'' and FEMA details this compensation in Sec.
296.21(e)(5). Section 296.1 does not require revision to allow for
compensation for eligible risk reduction measures.
Comment: Some commenters suggested FEMA amend the information and
assistance section to incorporate details regarding the Claims Office
addresses and phone number. One commenter suggested FEMA allow for
applications, correspondence, and supporting documentation to be
exchanged by postal mail. This commenter also recommended FEMA create
centralized locations where northern New Mexicans can physically go to
access the electronic application and receive assistance in filling out
the applications in multiple languages so that the application and
supporting documentation can be timely submitted.
FEMA Response: FEMA appreciates these suggestions and plans to
provide further details regarding the Claims Office operation and
opportunities for claimants to obtain assistance online at <a href="https://www.fema/gov/hermits-peak">https://www.fema/gov/hermits-peak</a> as explained in the regulation. Because FEMA
wants to continue adapting to claimants' needs in this process, it is
best to direct claimants to the website in the regulations for the
latest information available on the process. FEMA will continue to
provide outreach efforts to the community in addition to posting at
<a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a>.
D. Comments on Sec. 296.4 Definitions
Some commenters suggested FEMA modify the definitions provided in
the IFR to better reflect the unique challenges presented by the
Hermit's Peak/Calf Canyon Fire.
Comment: One commenter recommended FEMA amend the definition of
``Authorized Official's Determination'' to include determinations by
mail and electronically.
FEMA Response: FEMA does not believe edits to the regulatory text
are required as ``mailed'' can incorporate both physical and electronic
mailing. FEMA anticipates that, where applicants have provided contact
information to allow for electronic mailing of this determination, the
Agency will provide the Authorized Official's determination both by
mail and electronically. However, there may be instances where the
claimant has not provided contact information to allow for electronic
mailing and thus FEMA could only provide the determination by physical
mail. To ensure flexibility in these instances, FEMA is not amending
the regulatory language.
Comment: One commenter also recommended adding a definition of a
``Claims Navigator'' to the regulation, providing suggestions on how
these Navigators would work with claimants in the process.
FEMA Response: FEMA does not believe this change is needed. The
Agency is not referencing this term in the regulatory text. Terms not
used in the regulatory text do not need to be defined in the
definitions section of the regulation.\18\
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\18\ See ``Writing Resources for Federal Agencies, Regulatory
Drafting Guide, Definitions'' found at <a href="https://www.archives.gov/federal-register/write/legal-docs/definitions.html">https://www.archives.gov/federal-register/write/legal-docs/definitions.html</a> (last accessed
Feb. 16, 2023).
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Comment: A commenter suggested revision to the definition of ``good
cause'' to include ``or any circumstance where the Administrator
determines that good cause would further the mission of the Claims
Office to pay compensatory damages for injuries suffered from the
Hermit's Peak/Calf Canyon Fire.''
FEMA Response: FEMA disagrees with the comments that the additional
language in the definition of ``good cause'' is required. The Act
authorizes the Director of the Claims Office to assume the duties of
the Administrator.\19\ Adding language to the definition of ``good
cause'' to allow the Administrator to make a good cause determination
would result in a redundancy as the IFR language provides the Director
discretion to make good cause determinations. As written, the IFR
provides for the use of good cause in circumstances regarding deadlines
or supplementing and reopening claims.
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\19\ Section 103, Definition of ``Administrator'' (1)(B).
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Comment: Some commenters also requested the definition of ``good
cause'' be amended to include ``or where damage from post-fire flooding
is suffered by the claimant after filing a claim.''
FEMA Response: FEMA disagrees that the ``good cause'' definition
must be revised to consider flooding damage after filing a claim. As
explained above, the definition of ``injured person'' includes injuries
``resulting from the Hermit's Peak/Calf Canyon Fire'' and is broad
enough to encompass flooding, mudflow, mold, and debris flow, as well
as other types of injuries that may be considered as a result of the
Fire. The current language allows for good cause ``where damage is
found after a claim has been submitted'' and this language, read in
conjunction with the definition of ``injured person'' addresses
concerns regarding whether such damage could constitute good cause to
supplement or reopen a claim.
Comment: One commenter raised concerns that ``good cause'' was too
subjective.
FEMA Response: The application of a good cause definition requires
use of discretion that by nature contains some subjectivity that cannot
be fully eliminated from the determination.
Comment: A commenter recommended FEMA change the definition of the
``Hermit's Peak/Calf Canyon Fire'' to add ``flooding, mudflow, mold,
and debris flow resulting from the two fires.'' The commenter requested
FEMA specifically reference flooding, mudflow, mold, and debris flow as
a cause of injury and as a damage that can be compensated.
FEMA Response: FEMA disagrees that this change is needed to the
definition of ``Hermit's Peak/Calf Canyon Fire'' to compensate
claimants for these types of injuries resulting from the Fire. The
definition of ``injured person'' includes injuries ``resulting from the
Hermit's Peak/Calf Canyon Fire'' and is broad enough to encompass
flooding, mudflow, mold, and debris flow, as well as other types of
injuries that may be considered as a result of the Fire. Adding this
language may narrow the scope of damages an injured person may seek to
claim, and FEMA prefers to retain the current definition of the Fire
while allowing claimants suffering injuries resulting from the Fire be
allowed to present their claims.
Comment: Three commenters recommended that FEMA modify the
definition of household ``to clarify that it does not exclude the
claims of owners that did not live at the property on a continuous
basis'' and that rather, these individuals should be included. While
including them in the definition of household, the commenters
recommended that these individuals ``not be compensated for financial
damages already paid to the primary resident.'' Rather, the individuals
should be ``eligible for compensation based on their individual loss.''
FEMA Response: FEMA is not amending the definition of ``household''
as requested by these comments. Claimants can file a claim as a
[[Page 59735]]
household or individually in these circumstances and the Claims Office
will accept the claim for review. Nothing in the current definition
prohibits claims filing either as a household or individually.
Comment: A commenter suggested the definition of ``injured person''
be modified to include ``acequia, land grant'' immediately after
``school district'' in the definition.
FEMA Response: FEMA does not believe this amendment is required to
cover the entities referenced. Rather, these entities are covered under
the current definition as an ``other non-Federal entity that suffered
injury resulting from the Hermit's Peak/Calf Canyon Fire.''
Comment: Another commenter stated FEMA should amend the definition
of ``injured person'' to include flooding, mudflow, mold, and debris
flow as a cause of injury and damage that can be compensated.
FEMA Response: FEMA disagrees that this edit is required to the
regulatory text. The current definition provides for these types of
injuries, as well as other types of injuries that may be considered an
injury resulting from the Fire. Adding this language may narrow the
scope of damages an injured person may seek to claim. The proposed
language also conflates injuries from flooding, mudflow, mold, and
debris irrespective of their connection with the Fire with injuries
from flooding, mudflow, mold, and debris that are connected to the
Fire. Only the latter are compensable under the Act. Therefore, FEMA
prefers to retain the current definition of the Fire, which will allow
claimants suffering injuries resulting from the Fire to present their
claims.
Comment: Commenters wrote that nonprofit organizations should be
considered ``injured person.''
FEMA Response: The current definition of ``injured person''
includes an ``other non-Federal entity that suffered injury resulting
from the Hermit's Peak/Calf Canyon Fire'' and that terminology
encompasses non-profit organizations. FEMA understands non-profit
organizations may have suffered injuries resulting from the Fire, and
FEMA believes the current definition sufficiently encompasses all types
of for-profit and non-profit entities. FEMA's website at <a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a> provides more information explaining the
regulatory text to help claimants better understand who is considered
an injured person under the Act.
Comment: Some commenters suggested that FEMA amend the definition
of ``subsistence resources'' to include ``and other natural resource''
to reflect the types of resources gathered and the broad range of
subsistence use practices of both acequia-served communities, as well
as Tribal and Pueblo sovereigns.
FEMA Response: Consistent with these suggestions, FEMA is adding
``or other natural resource'' to the definition of ``subsistence
resources'' to reflect the specific needs of the impacted communities.
As explained above, the Hermit's Peak/Calf Canyon Fire impacted an area
that is economically and culturally distinct from the communities
impacted by the Cerro Grande Fire. This change reflects FEMA's
understanding that other natural resources beyond firewood may be
gathered for subsistence purposes.
E. Comments on the Claims Process Generally
Commenters offered comments and suggestions on a wide range of
issues on the claims process. Commenters offered suggestions on ways to
streamline the process and to make the process more accessible to the
impacted communities. Commenters wrote of experiences with FEMA and
other Federal agencies, stating how FEMA and other agencies handled
their cases under other programs.
Comment: One commenter stated, ``Nothing in my experience with
F[EMA] so far gives me faith that you are on my side or have my best
interests at heart.'' The comment continued ``So far communication
between government entities and organizations has been nonexistent or
completely dysfunctional . . . I need to have more confidence in your
ability to work with other entities, or even communicate within
F[EMA].'' Commenters provided suggestions on hiring personnel for the
Claims Office, including the Claims Office Director, Claims Navigators,
Claims Reviewers, and other staff, and how the agency should train the
staff. Commenters also stated their anger, frustration, and mistrust of
the process and requested to be treated with respect and compassion.
One commenter wrote ``Cataloging every single thing we lost in the
fire, correlating it with a receipt, and looking up how much it will
currently cost to replace it has been a full-time job for a while now,
and extremely difficult emotionally.'' Another commenter wrote about a
recent experience with FEMA stating ``it did nothing to build trust or
confidence in FEMA. The end effect has been the exact opposite. And in
turn, I have since prepared myself to expect more of this inappropriate
treatment from FEMA in all future interactions.'' A different commenter
wrote ``HPFAA administrators and claims reviewers must handle all
injured victim cases as though this injury to their lives and
livelihoods is a direct result of a felony act of arson deliberately
committed against them all. Government employees and contractors
responsible for this conflagration will never truly be held accountable
to receive due punishment for actions which will never even
`officially' be considered gross incompetence, but that doesn't make
the end result any less destructive than an act of intentional criminal
arson would be.'' One commenter stated ``I want you to remember that
this is a fire caused by the [F]ederal government and that we are the
victims of this. Please treat us with respect.''
FEMA Response: FEMA acknowledges the unique challenges faced by the
communities impacted by the Fire and how challenging it has been for
claimants to recover. FEMA and the Federal government provided a range
of existing programs to those impacted by the Fire, many of which were
not designed to meet the needs of the impacted communities, given the
extent of the injuries suffered as a result of the Fire. Those programs
were not designed to provide full financial compensation to those
injured by the Fire. For example, the Individuals and Households
Program (IHP) provides financial and direct services to eligible
individuals and households affected by a disaster, who have uninsured
or under-insured necessary expenses and serious needs. IHP is not a
substitute for insurance and cannot fully compensate for all losses
caused by a disaster; rather, that assistance is intended to meet basic
needs and supplement disaster recovery efforts.\20\ As disaster
assistance programs are not designed to fully compensate those impacted
by disasters, some applicants in these communities are frustrated with
and uncertain about, the Federal government's ability to assist them.
The Act's commitment to compensate victims through the Claims Office
process allows FEMA to directly provide claimants with compensation to
better assist claimants and communities in more fully recovering from
this devastating Fire. The Agency is committed to working with
claimants and communities to ensure the Claims Office meets their needs
and compensates claimants for the damages resulting from the Fire. The
Claims Office hired Claims Navigators from the community to guide
claimants through
[[Page 59736]]
the application process, focusing on ensuring that claimants understand
the process of applying for compensation, what compensation is
available for their losses, and what documentation is needed to obtain
this compensation.
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\20\ <a href="https://www.fema.gov/assistance/individual/program">https://www.fema.gov/assistance/individual/program</a> (last
accessed Mar. 3, 2023).
---------------------------------------------------------------------------
The Claims Office operates independently of FEMA's other programs,
and it provides a great deal more flexibility in the process of
applying for and receiving compensation than these more traditional
grant programs. Unlike FEMA's Individual Assistance and Public
Assistance, which provide disaster assistance to individuals and
households impacted by declared disasters, the Claims Office is not
subject to any caps on the amount of assistance it can provide. Unlike
FEMA's Public Assistance Program, which provides grants to States,
Federally recognized Tribal governments, U.S. territories, local
governments, and certain private non-profit (PNP) organizations, the
Claims Office does not have any cost share requirements, and there are
no conditions placed on receipt of the compensation.
1. Comments on the Claims Office Administrator
Comment: Commenters made specific requests regarding the
appointment of the Claims Office Administrator. Commenters requested
that an Independent Claims Administrator be appointed. One commenter
stated that the broad ``make whole'' compensation approach of the Act
was different from FEMA's normal disaster relief operation and Congress
recognized this by providing for the appointment of an Independent
Claims Administrator in the Act. This commenter stated the number of
potential claimants and broad scope of the harm they have suffered
required the appointment of an Independent Claims Administrator with
experience in `make whole' compensation processes. A different
commenter wrote that these claims processes are extremely complex, with
many moving parts and unique issues, and would be best overseen by a
claims manager familiar with fire-related claims processes. Another
commenter suggested an independent trustee or claim administrator be
appointed to manage and stated FEMA should not be in charge of
administration.
FEMA Response: Section 104(a)(3) gives the Administrator the option
to appoint an Independent Claims Manager to head the Claims Office. In
her discretion, the Administrator selected a Claims Office Director
with over 15 years of experience building and managing Federal programs
to start up the Claims Office and did not opt to appoint an Independent
Claims Manager. FEMA understands the commenters' desire to have an
Independent Claims Manager appointed. Given the short timelines that
the Agency had to publish the IFR and begin processing claims, FEMA
determined it was both efficient and effective to select a candidate
with extensive experience in government assistance programs to lead the
Claims Office. FEMA also understands concerns that other FEMA programs
do not operate in the same way in which the Act requires the Claims
Office to operate. However, FEMA was tasked with the implementation of
the Act, including operation of the Claims Office for this Fire, and
further has prior experience in operating a Claims Office in New Mexico
for the Cerro Grande Fire in 2000. FEMA recognizes the distinctions
between the two fires, but also believes the Agency can build on best
practices and incorporate principles of equity, as well as lessons
learned from the Cerro Grande Claims Office, to implement a Claims
Office for the Hermit's Peak/Calf Canyon Fire Assistance Act that will
acknowledge the differences between the two fires and best serve the
claimants and communities impacted by the Hermit's Peak/Calf Canyon
Fire.
Comment: In addition to requesting an independent claims
administrator, several commenters requested the claims administrator be
a New Mexico attorney and/or retired judge.
FEMA Response: As explained above, the Administrator has exercised
her discretion and selected the Director of the Claims Office. The
Director has extensive experience building and managing Federal
assistance programs and will lead the Claims Office in these nascent
stages. FEMA appreciates commenters' concerns that the Claims Office be
led by someone with familiarity with New Mexico law, as well as the
unique political, economic, and cultural institutions of the impacted
communities. FEMA has engaged in an extensive effort to recruit locally
for positions to support the processing of claims and provision of
compensation to claimants impacted by the Fire to ensure these specific
concerns are addressed. FEMA believes that local hiring at all other
levels of the Claims Office will better serve to meet the needs of
claimants and communities rather than a single hire at the Director
level. Additionally, FEMA is making changes in the Final Rule to better
reflect the needs of the impacted communities.
Comment: One commenter suggested another commenter be appointed as
the Independent Claims Office Administrator.
FEMA Response: As explained above, the Administrator has exercised
her discretion to hire the Director of the Claims Office with extensive
experience building and managing Federal programs to lead the Claims
Office.
2. Comments on the Claims Office
Commenters offered suggestions on how to staff and manage the
Claims Office.
Comment: Commenters suggested that FEMA hire members of the local
community to increase trust in the claims process. Some commenters
stated the importance of hiring New Mexicans familiar with acequias.
FEMA Response: FEMA agrees with these comments. As explained above,
FEMA has engaged in an extensive effort to recruit locally for
positions to support the processing of claims and provision of
compensation to claimants impacted by the Fire to ensure these specific
concerns are addressed.\21\ FEMA believes that hiring local applicants
at all other levels of the Claims Office will better serve to meet the
needs of claimants and communities by helping to ensure the Claims
Office is staffed with individuals familiar with the specific needs of
the communities impacted by the Fire. As of April 10, 2023, almost 70
percent of the permanent Claims Office team are local staff.\22\ Local
staff work out of Claims Offices in Santa Fe, Las Vegas, and Mora, New
Mexico, and serve in multiple capacities ranging from the Deputy
Director, Advocate and Claims Navigators, to external affairs and
facility support. Additionally, FEMA is making changes in the Final
Rule to better reflect the needs of the impacted communities.
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\21\ FEMA hosted a Hiring Fair on January 10, 2023, in Mora, NM
and provided Federal Resume Writing webinars on December 29, 2022,
and January 3, 2023. Details regarding the available positions were
also posted to <a href="https://www.fema.gov/fact-sheet/hermits-peakcalf-canyon-claims-office-now-hiring">https://www.fema.gov/fact-sheet/hermits-peakcalf-canyon-claims-office-now-hiring</a> (last accessed Feb. 16, 2023).
\22\ FEMA notes that given the permanent positions in the Claims
Office are located in Mora, Las Vegas, and Santa Fe, New Mexico,
most applicants seeking these positions were local.
---------------------------------------------------------------------------
Comment: A commenter suggested FEMA stay alert to favoritism
``infiltrating the ranks of claims reviewers hired from the local
population.''
FEMA Response: FEMA appreciates the commenter's concerns regarding
favoritism. Federal employees are held to certain basic obligations of
public
[[Page 59737]]
service that require employees to ``act impartially and not give
preferential treatment to any private organization or individual.''
\23\ As part of the hiring and onboarding process, these obligations
are explained, and training is provided to ensure employees understand
the obligations of public service. FEMA also is coordinating with the
Department of Homeland Security Office of Inspector General and the
FEMA Fraud unit to ensure vigilant oversight.
---------------------------------------------------------------------------
\23\ 5 CFR 2635.101(b)(8).
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Comment: Some commenters suggested FEMA hire a specific contractor
to assist the manager and FEMA to process claims.
FEMA Response: Consistent with the Federal Acquisition
Regulation,\24\ FEMA awarded multiple competitive contracts to provide
support services to the Claims Office. Services include consulting,
claims processing, systems analysis, operation, and data analysis
support. Each contractor shall, to the maximum extent possible, create
opportunities for the utilization of local small businesses, including
the utilizing of businesses from underserved communities and develop a
plan to utilize local firms and/or hire local residents.
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\24\ See <a href="https://www.acquisition.gov/browse/index/far">https://www.acquisition.gov/browse/index/far</a>.
---------------------------------------------------------------------------
Comment: One commenter suggested FEMA hire an experienced claims
processor that can start handling claims immediately stating FEMA would
need to figure out how to handle claims first.
FEMA Response: The Claims Office engaged in a competitive hiring
action to hire an experienced Claims Chief. This position oversees the
claims process from the completion of the Notice of Loss to the final
payout on the claim. The Claims Office also hired a number of
experienced contract claims examiners with insurance adjusting
experience to review and make recommendations on claims. The Claims
Chief oversees Claims Reviewers at the main Claims Office, as well as
at least three public-facing claims offices in Mora, San Miguel, and
Las Vegas, New Mexico.
Comment: A commenter suggested FEMA take the time that is required
to provide substantial training for newly hired staff.
FEMA Response: FEMA agrees that training will be critical for all
newly hired staff for the Claims Office. FEMA intends to provide
standard onboarding training for all new employees, as well as
specialized training for all Claims Office employees to fully
understand the claims process and the Act's requirements. Training
includes roles and responsibilities, claims processes and operations,
cultural awareness, statutes and regulations, customer service and
customer experience, risk reduction practices, coordination with State
agencies, and other related trainings.
Comment: One commenter provided a recent experience with a field
inspector that inspected their homestead for potential disaster relief
and stated that ``the person you chose to do this inspection is an
incompetent at such work as this.'' The commenter suggested FEMA be
very careful in their hiring practices and contracting of third parties
for claims office operations to prevent ``such outrageous incidents''
as described in their experience.
FEMA Response: FEMA appreciates the commenter's honesty and
willingness to share their experience. FEMA intends to staff the Claims
Office with local hires that can better understand the unique
political, economic, and cultural institutions of the communities
impacted by the Fire, as well as claimants seeking compensation under
the Act, in addition to experienced contract employees. As explained
above, FEMA plans to provide training for all Claims Office employees
to fully understand the claims process and the Act's requirements.
Comment: One commenter provided a memorandum with a seven-step
process on how the Claims Office can develop a mindset to get to yes
and serve clients effectively. This individual also submitted comments
on the culture of the Claims Office. The comment ``focus[ed] on a
seven-step plan to help this program transform its approach as it
processes the regulation comments, from a denial-based approach to a
positive, effective process for those it is meant to serve.''
FEMA Response: FEMA appreciates the commenter's detailed
suggestions. As pointed out by the commenter, the Claims Office process
will be different from FEMA's disaster relief programs, and it will be
important for employees of the Claims Office to acknowledge and embrace
those differences in process and implementation efforts. Based on the
comments received, FEMA established a set of guiding principles for the
Claims Office culture needed to deliver this mission.\25\ FEMA will
work to ensure a full understanding by the entire Claims Office staff
of the claims process and the Act's requirements and the importance of
focusing on the needs of claimants and communities impacted by the
Fire. With that in mind, the Claims Office provides each claimant with
an assigned Navigator. The Claims Navigator works directly with the
claimant and Claims Reviewers, asking questions, helping claimants
obtain documentation, helping claimants complete the Notice of Loss and
Proof of Loss, and shepherding the claimant through the process to
better ensure that the claimant is fully compensated for their loss.
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\25\ See <a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a>.
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The Claims Office has also established an independent Claims Office
Advocate. The Claims Office Advocate responds to, manages, and
recommends solutions to issues with the process itself, whether those
issues be with the Claims Navigators and Claims Reviewers, the claims
process itself, or how the process is being implemented. The Claims
Office Advocate is responsible for identifying issues with the claims
process and addressing those issues on the claimant's behalf. The
Claims Office Advocate serves as an additional resource to claimants by
helping to improve their understanding of the claims process and
providing guidance about the steps in that process and the associated
requirements.
The Claims Office Advocate also identifies issues, risks, and
opportunities for improvement and develops recommendations for claims
process enhancements that will address these and deliver a better,
fairer claims process that is accessible to all claimants. While the
Claims Navigators and Claims Reviewers report to a Team Lead, the
Advocate reports directly to the Director of the Claims Office. As
such, the Claims Office Advocate has a direct line of communication
with the Director of the Claims Office, and the Advocate is positioned
to advocate on behalf of claimants and to make recommendations for
enhancements to the claims process.
Comment: One commenter suggested that State Case Managers be
integrated into the program and trained as Navigators.
FEMA Response: FEMA anticipates that Claims Navigators will provide
the assistance envisioned by the commenter and additional staffing
outside of the Claims Office will not be required. However, the Claims
Office is implementing procedures to coordinate with the State of New
Mexico as appropriate.
Comment: One commenter asked how many claims would be covered by
each Claims Reviewer.
FEMA Response: FEMA does not have an estimate on the volume of
claims per Claims Reviewer at this time. FEMA anticipates Claims
Reviewers will have a workload balance reflective of both
[[Page 59738]]
claim volume and claim complexity to ensure claimants' needs are
effectively met by the Claims Office.
3. Comments on the Use of Funds
Comment: Commenters sought clarification on how FEMA would use the
funds provided by the Act between administrative costs and claims
payments to claimants. Some commenters wrote about experiences with
administrative costs with one commenter stating that ``to provide a
trailer for a family it can cost 300k with much of this money going to
pay FEMA workers and for admin costs.'' Commenters asked what the
administrative costs would be and how much of the available
appropriated funding would go to administrative costs and how much
funding would go to claimants. One commenter wrote ``how much of the
available funds will go to administration and how much will go to
victims?''. Another commenter stated, ``I wonder what the
administrative costs are if they are going to come out of this $2.5
billion of it is gone before any money goes to anybody in this room and
maybe that's necessary.''
FEMA Response: Section 104(a)(2)(C)(i) of the Act states that ``The
Office shall be funded from funds made available to the Administrator
for carrying out this section.'' FEMA is required to use the funding
provided under the Act for the administrative costs to run the Claims
Office. FEMA has a general obligation to spend Federal funds wisely and
Congress required FEMA to provide quarterly reports to the Committee on
Appropriations of the Senate and House of Representatives on the
obligations and expenditures of the funds made available under the
Act.\26\ Congress also directed a portion of the funding to the
Department of Homeland Security Inspector General to fund program
oversight. FEMA intends to comply with this Congressional reporting
requirement regarding the use of funding under the Act. This
transparency will help allay the commenters' concerns about the total
administrative costs for the Claims Office.
---------------------------------------------------------------------------
\26\ Public Law 117-180, Division A, Section 136 (2022).
---------------------------------------------------------------------------
Comment: Commenters suggested FEMA provide transparency in how the
funds appropriated under the Act were spent. One commenter suggested
that information about how the funds were being spent be shared
publicly in real time via an online dashboard. Such a tool would help
prevent internal fraud and help FEMA identify external fraud and
program favoritism while also allowing everyone the ability to be
alerted to something suspicious happening with funds. Another commenter
agreed, recommending that FEMA allow the public to review the overall
project budget and other transparency related to fiscal accountability.
One commenter wrote that ``FEMA should provide full transparency of
cost, budget, expenditures, etc. including administrative costs,
operational costs, total payouts, total denials, etc. to not only to
the [Department of Homeland Security's Office of the Inspector General]
but also to the State--without violation of the Privacy Act.''
FEMA Response: As explained above, Congress required FEMA to
provide quarterly reports to the Committee on Appropriations of the
Senate and House of Representatives on the obligations and expenditures
of the funds made available under the Act.\27\ FEMA intends to comply
with this Congressional reporting requirement regarding the use of
funding under the Act. This transparency will help allay the
commenters' concerns about the total administrative costs for the
Claims Office. In addition, the Claims Office Advocate will be creating
easily understandable reports with program metrics to be shared on
<a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a> and through other communications
channels.
---------------------------------------------------------------------------
\27\ Public Law 117-180, Division A, Section 136 (2022).
---------------------------------------------------------------------------
Comment: Commenters also provided recommendations on ways to use
and/or distribute the funding appropriated. One commenter suggested
funding be dedicated to the reintroduction of beavers to the region to
help repair the land.
FEMA Response: FEMA does not have the authority under the Act to
dedicate funding as recommended by the commenter as claimants must
submit claims demonstrating their injuries resulting from the Fire to
obtain compensation. Funding for activities like reintroduction of
beavers may be eligible as a nature-based solution to reduce the
heightened risk of wildfire, flood, or other natural disaster and
claimants seeking compensation must demonstrate that this claim is
clearly tied to an increased risk that resulted from the Fires.
Comment: A commenter wrote suggesting that FEMA ``create a grid
system on a map with a baseline payment scale using at least 1.5
billion dollars to be distributed equally where the [F]ire/flooding/
damaged areas are the epicenter with the highest baseline ($250,000)
payment and the areas with lesser damage (such as minimal property
damage, i.e., smoke damage or food loss) still receive baseline funding
at a lesser significant (over $2,500) amount.'' The commenter wrote
that none of the funding provided should be taxable income. The
commenter stated this proposal is to ``ensure that all landowners in
the affected areas get a baseline of funding.'' The commenter also
suggested ``[$]2 billion in funding go to the public entities to
prevent future disasters such as monies allocated to public safety.''
The commenter suggested ``another [$]1 billion to public utility
infrastructure and public communications.'' The commenter wrote that
the rest of the funding could be used for ``paying out and making
individuals with losses whole and covering gaps missed in my proposed
comments above.''
FEMA Response: FEMA is authorized under the Act to pay claimants
for actual compensatory damages for injuries resulting from the
Fire.\28\ FEMA does not have the authority under the Act to establish
the type of funding system recommended by the commenter as claimants
must submit claims demonstrating their injuries resulting from the Fire
to obtain compensation. FEMA further did not receive sufficient funding
under the Act to implement the payment plan proposed by the commenter.
FEMA notes that the Act at section 104((h)(4) provides that the value
of compensation provided under the Act ``shall not be considered income
or resources for any purpose under any Federal, State, or local laws,
including laws relating to taxation . . .'' FEMA cannot advise
individual claimants on their individual tax obligations, however, and
encourages claimants to consult with their tax advisers if they have
questions related to tax obligations.
---------------------------------------------------------------------------
\28\ See Sections 102(b) and 104(c) of the Act.
---------------------------------------------------------------------------
Comment: A commenter asked whether the funding provided under the
Act covered the costs for the matching funds requirement waiver in
section 104(k) of the Act or if the funding under the Act was
exclusively reserved for claims.
FEMA Response: The Act does not authorize FEMA to utilize the funds
appropriated to cover the matching funds requirement waiver in section
104(k). These additional matching funds to meet the 100 percent cost
share will have to be provided from the funding provided for those
programs generally, not the funding provided by the Act.
[[Page 59739]]
Comment: Commenters suggested ways in which the funding
appropriated under the Act should not be used. Commenters suggested
administrative costs be paid out of a separate budget rather than the
appropriated funding. One commenter suggested administrative costs
should be paid for out of a separate FEMA budget.
FEMA Response: As explained above, section 104(a)(2)(C)(i) requires
FEMA to use the funding made available under the Act to fund the Claims
Office. FEMA is required to follow the Act's requirement to fund the
Claims Office from the Act's funding.
Comment: One commenter requested FEMA Claims Reviewers tour the
entire burn scar area and not to use the funding appropriated for that
tour.
FEMA Response: FEMA appreciates the request, the value placed in
seeing the devastation resulting from the Fire first-hand, and the need
for Claims Office staff to fully comprehend the extent of injuries
suffered. FEMA plans to provide training to all Claims Office staff
that will include extensive background information on the Fire and its
impacts. FEMA believes that Claims Reviewers should be aware of the
devastation to help comprehend the losses and spend their time focused
on assisting claimants with their claims, not taking tours of the
entire burn scar area.
Comment: Commenters stated the funding appropriated was not
sufficient to fully compensate claimants. One commenter suggested the
total $3.9 billion appropriated will not cover the cost of recovery
from the level of destruction caused by the Fire. This commenter stated
more destruction was guaranteed from the Fire and argued it would be
worse if people rebuilt in the wrong places before the land stability
is restored. Other commenters agreed that the amount appropriated was
not sufficient to cover the damages and one of those commenters stated
that the lack of sufficient funding would result in denying people
compensation.
FEMA Response: The Act and subsequent legislation appropriated
$3.95 billion in funding. FEMA is obligated to provide quarterly
reports to Congress on the use of funds under the Act and these reports
ensure transparency of the use of funds and the sufficiency of funding
under the Act.
Comment: To combat fraud, one commenter recommended FEMA review
fire-affected county audits performed by the New Mexico State Attorney
General's Office to anticipate where and how acts of fraud will occur.
Another commenter stated in their comment the New Mexico State Auditor
performs these audits, providing links to recent reports.
FEMA Response: FEMA appreciates the concerns regarding potential
fraud and is incorporating fraud awareness and detection training into
the comprehensive training provided to all Claims Office staff. FEMA
notes that Congress provided appropriations for the Department of
Homeland Security's Office of the Inspector General for oversight of
activities authorized by the Act.\29\
---------------------------------------------------------------------------
\29\ See Public Law 117-180, Division A, Section 136 (2022).
---------------------------------------------------------------------------
Comment: A commenter stated that insurance companies would demand
compensation for the amounts they have paid or will pay to insured
claimants.
FEMA Response: Insurance companies are eligible for compensation as
injured persons under the Act. Section 104(d)(1)(A)(ii) of the Act
requires FEMA to place priority on claims submitted by injured parties
that are not insurance companies seeking payment as subrogees. Section
296.13 of the IFR requires subrogees to file their Notice of Loss after
they have made all payments entitled to the injured person for Fire-
related injuries under the terms of the insurance policy. As explained
below, FEMA is amending Sec. 296.13 in the Final Rule to add language
from the Act specifically to clarify the claims prioritization
required. Further, Sec. 296.21(f) of the regulation requires FEMA to
compensate injured persons only for damages not paid and that will not
be paid by insurance companies. As explained above, these provisions,
in addition to the changes made to Sec. 296.13 in this Final Rule,
will help ensure that the compensation is first made available to
injured persons that are not insurance companies.
Comment: Finally, commenters suggested other funds outside of those
appropriated be used to pay for compensation under the Act. One
commenter stated that FEMA ``not use taxpayer dollars to compensate
victims, but instead seize the assets of the oil and gas companies
whose industry has created global warming and red flag conditions all
over the country and use those assets to compensate victims.'' One
commenter suggested those responsible for causing the Fire should
donate their retirement funds to those impacted by the Fire.
FEMA Response: Congress appropriated $3.95 billion for
implementation of the Act and FEMA is required to use that appropriated
funding to implement the Act and pay claimants actual compensatory
damages for injuries resulting from the Fire.
4. Comments on Sec. 296.5 Overview of the Claims Process
Comment: One commenter suggested FEMA set up remote assistance
given COVID, RSV, and influenza infection concerns. Another commenter
stated that claimants should be allowed to meet remotely with claims
reviewers as it was unreasonable for FEMA to expect victims to travel
long distances. One commenter suggested FEMA set up mobile claim
offices in southwest Colfax County and south Taos County. One commenter
stated that ``60 to 70 percent of the people up in Mora [County] are
Hispanic and a lot of people don't even have access to computers.'' The
commenter suggested FEMA ``try to get somebody who can speak Spanish to
go with these people because that's what we need.'' Commenters also
suggested FEMA get out into the community as part of the claims process
and outreach to the community.
FEMA Response: FEMA plans to offer opportunities for one-on-one
engagement through Claims Reviewers who will work to engage claimants
in ways to meet their needs whether in person or via remote technology.
Claims Office Navigators are trained to accommodate the needs of
claimants and are prepared to meet them in the satellite Claims Offices
in Las Vegas, Mora, and Santa Fe, New Mexico at claimants' homes or
offices, or any place convenient to claimants, taking into account
health and safety concerns. Note that FEMA will provide services both
at set office locations for the Claims Office, as well as pop-up
offices that will rotate through communities and locations in the
affected area, to reduce travel burdens on claimants. The pop-up
offices will be staffed by Claims Navigators, who can assist claimants
in completing and submitting Notices of Loss, providing claims updates,
and answering general questions. FEMA recognizes the importance of
having claims staff, who interact with claimants and help facilitate
the claims process, that are able to speak both Spanish and English.
FEMA locally hired bilingual speakers to ensure that claims staff can
communicate with claimants in their preferred language.
Comment: Several commenters wrote that attorneys should be notified
during the process when claimants are represented by counsel.
FEMA Response: With an appropriate Privacy Act waiver, FEMA will
ensure contact is made with both claimants and their attorneys. The
Claims Office has included consent language necessary to comply with
the Privacy Act in the standard Notice of Loss form. The
[[Page 59740]]
consent is needed for an attorney or other third-party representative
to have access to a claimant's privacy information maintained in the
Claims Office system of records. In addition to providing basic
information about the claimant and representative, the claimant must
sign the consent section if they choose to be represented by a third
party.
Comment: One commenter wrote that information on claim status and
timeline to receive payment should also be easily accessible at the
claimant level. Two commenters suggested FEMA provide an online method
of checking the status of their claim and hard copies of documents for
those claimants without internet access.
FEMA Response: FEMA is currently developing an online claims system
that will provide claimants with real time access to claim status in
addition to providing status information by phone or mail (electronic
and/or physical). FEMA anticipates this system will be rolled out in
the near future and will provide outreach to the community when the
system is available for use to help claimants understand and utilize
the system.
Comment: One commenter asked that State Case Managers be integrated
into the program and trained as Navigators to serve as a single point
of contact to help claimants throughout the process.
FEMA Response: As explained above, FEMA anticipates that Claims
Navigators will provide the assistance envisioned by the commenter and
additional staffing outside of the Claims Office will not be required.
In the event a claimant has unmet needs or otherwise requests a
Disaster Case Manager, the standard Notice of Loss form includes a
section for the claimant to consent to sharing claim data maintained in
the system of record with Disaster Case Managers.
Comment: Several commenters suggested that FEMA streamline the
claims process. One method for streamlining the process suggested by
commenters related to access to available Federal programs. Commenters
suggested that FEMA streamline access to available Federal programs
and, in addition to funds appropriated under the Act, to utilize other
Federal funding opportunities when and where available.
FEMA Response: FEMA agrees with this suggestion and is coordinating
with other Federal agencies to ensure data sharing and better
communication between programs. FEMA has engaged with and continues to
engage with the Small Business Administration, the Department of
Agriculture, and other Federal agencies to help facilitate coordination
of the assistance available to claimants and the impacted communities.
Consistent with the Act's requirements in section 104(g), FEMA is
consulting with other Federal agencies, and State, local, and Tribal
authorities to ensure the efficient administration of the claims
process and provide for local concerns. To preserve funding from the
Hermit's Peak/Calf Canyon appropriations to pay eligible claims, FEMA
requires applicants eligible for FEMA's Public Assistance program to
exhaust available public assistance funds before seeking compensation
from the Claims Office.
Comment: Another suggestion involved preparing formulas for
compensation. One commenter asked how FEMA would compensate claimants
for a variety of damages and requested transparency and a formula that
should be shared with claimants. Another commenter suggested that FEMA
move forward with developing estimates to help reduce the wait for
compensation. One commenter asked how claims would be made equitable
and if there would be standard reimbursement rates for similar claims.
Two commenters suggested monetary thresholds be established to ensure
time and effort are proportionate to the claim values being made. As
one of the commenters explained, there are thresholds throughout many
other Federal programs where the burden of proof is significantly less
based on the overall claim value. Another commenter, however, stated
that ``no two claims will be alike, and the process cannot be developed
or allowed to become an assembly line approach.''
FEMA Response: FEMA recognizes the need for an efficient,
streamlined process through the use of a damage calculation formula,
while also balancing the unique types of claims being presented under
the Act and ensuring claimants are paid actual compensatory damage as
required by the Act. FEMA anticipates developing some damage
calculation formulas, such as providing for a certain dollar amount of
compensation per acre of land damaged, so that claimants have the
option to leverage one of those formulas or present their individual
claim and request for specific damage amounts. FEMA believes this
optionality will best balance the need for an efficient process with
the individual needs of claimants, as claimants will be able to make
the choice in presenting their claim for compensation.
5. Comments on Sec. 296.10 Filing a Claim Under the Act
Comment: One commenter suggested FEMA allow claimants to file a
Notice of Loss in person consistent with the IFR. Another commenter
stated that FEMA should allow claimants to file claims in person, as
well as via mail, email, and a web-based portal system to ensure
accessibility. A commenter suggested FEMA allow for applications,
correspondence, and supporting documentation to be exchanged by postal
mail. This commenter also recommended FEMA create centralized locations
where northern New Mexicans can physically go to access the electronic
application and receive assistance in filling out the applications in
multiple languages so that the application and supporting documentation
can be submitted in a timely manner.
FEMA Response: FEMA appreciates these suggestions. FEMA does not
believe changes to the Final Rule are necessary to implement these
suggestions, but rather that as the Claims Office continues to expand
operations, the information would be made available to the public via
<a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a> and other resources including direct
community outreach. FEMA is currently accepting Notice of Loss forms in
person at the claim's office locations in Santa Fe, Mora, and Las
Vegas, New Mexico and those office addresses can be found at <a href="https://www.fema.gov/hermits-peak">https://www.fema.gov/hermits-peak</a>. FEMA will provide services both at set
office locations for the Claims Offices, as well as pop-up offices that
will rotate through communities and locations in the affected area, to
reduce travel burdens on claimants. The pop-up offices will be staffed
by Claims Navigators, who can assist claimants in completing and
submitting Notices of Loss, providing claims updates, and answering
general questions.
6. Comments on Sec. 296.11 Deadlines
Comment: Several comments were received regarding the two-year
deadline for filing a claim detailed in Sec. 296.11 of the IFR, with
most commenters stating that a two-year period to file a claim was
insufficient. Commenters suggested extending the deadline based on an
inability to determine damages because of the current inability to
access their property, the potential for future impacts from flooding,
and/or the long-term health and environmental effects given the size
and scope of the Fire. A commenter suggested extending the deadline to
three years for mitigation
[[Page 59741]]
efforts. Some commenters asked FEMA to be flexible in granting
extensions. One commenter asked that extensions be granted in cases
where knowledge of damages, recovery efforts, etc. are hindered by
cooperation with government agencies.
FEMA Response: Some deadlines in the rule are beyond FEMA's
control. Section 104(b) of the Act requires claimants submit their
Notice of Loss no later than November 14, 2024, two years from the date
the IFR was promulgated. FEMA was required by the Act to publish the
IFR within 45 days of the Act's passage and the IFR was published 45
days after the Act's passage.\30\ FEMA has built in extensions of the
claim processing timeline after receipt of the Notice of Loss for good
cause, recognizing the realities of the Fire's impact. Sections 296.34
and 296.35 establish a process for notifying FEMA of injuries that are
not referenced in the initial Notice of Loss. Whether a claimant tells
FEMA about an injury in the initial Notice of Loss or an amendment
under Sec. 296.34, FEMA must know about the injury by November 14,
2024. For heightened risk reduction efforts, a claimant must include
the claim in their Notice of Loss by November 14, 2024, or an amended
Notice of Loss filed no later than November 14, 2025. See Sec.
296.21(e)(5).
---------------------------------------------------------------------------
\30\ 87 FR 68085 (Nov. 14, 2023).
---------------------------------------------------------------------------
Comment: One commenter indicated the two-year period did not end on
November 14, 2024, because the Final Rule had not been promulgated and
it would not be promulgated until 60 days after filing in the Federal
Register.
FEMA Response: FEMA disagrees with this characterization of the
two-year period and rule promulgation. Specifically, Section 104(f)(1)
of the Act requires FEMA to ``promulgate and publish in the Federal
Register interim final regulations for the processing and payment of
claims under this Act.'' Publication of an IFR constitutes promulgation
of a rule, as the rule was effective upon publication, and comments
were requested post-promulgation. This sequence of events, publication
of the interim final rule, followed by a public comment period,
occurred here. Consistent with the Act's purpose at section 102(b), the
immediate effective date of the rule ensures FEMA was able to begin
accepting and processing claims on the date of publication.
7. Comments on Sec. 296.12 Election of Remedies
Comment: Commenters sought clarifications about how the election of
remedies worked. One commenter asked what would happen if the claimant
did not accept the final determination by the Claims Office. Another
commenter asked if people did not want to go through FEMA, whether they
could sue and if there were multiple owners of a single property
whether some could go through FEMA and also sue.
FEMA Response: As explained in the IFR's preamble, the Act provides
that an injured person who accepts an award under the Act waives the
right to pursue any claims arising out of or relating to the same
subject matter under the Federal Tort Claims Act (FTCA) or a civil
lawsuit. Similarly, those claimants who accept an award under the FTCA
or a civil lawsuit waive the right to pursue claims under the Act.
Until the final award payment is accepted, the claimant may pursue any
and/or all of the options available. This flexibility allows injured
persons to pursue different avenues of compensation until a final award
is accepted. The IFR language states that an injured person who accepts
an award under the Act or through a FTCA or civil action waives their
right to pursue all claims for injuries arising out of or related to
the same subject matter. To ensure this is clear in the Final Rule,
FEMA is revising paragraphs Sec. 296.12(a) and (b) to clarify that the
injured person only waives the right to pursue all claims upon
acceptance of a final award through the Act, the FTCA, or through a
civil action.
Comment: A commenter stated that a claimant's right to civil action
or other redress should not be waived or limited until a final payment
has been agreed upon with FEMA, and that it must be clear to claimants
at what point(s) in the process they are waiving their rights to
further legal action, as well as how they can retain their right to
further legal action for different types of subject matter. Another
commenter agreed and recommended FEMA clarify that the waiver of the
right to pursue claims under the FTCA or a civil action only applies to
final awards, and when the claimant has signed a Release and
Certification Form.
FEMA Response: FEMA agrees and as explained above, is revising
Sec. 296.12(a) and (b) in the Final Rule to clarify that the injured
person only waives the right to pursue all claims upon acceptance of a
final award.
Comment: One commenter wrote on the feasibility of waiving future
claims given the extent of damages, losses, and expenses may not be
fully known at the time of the award. The commenter suggested a lump
sum payment of 15 percent of all injury, damages, losses, and expenses
be added to each claim to cover these future unknown items.
FEMA Response: FEMA understands the concerns with waiving rights to
pursue further claims after accepting a final award. The Act at section
104(b) requires claims to be submitted within two years and requires a
waiver of rights to pursue further claims upon acceptance of a final
award. Claims related to future losses as a result of the Fire would
need to be made through other remedies as the Act sets a two-year
limitation for claims under the Act. FEMA is unable to pay lump sum
payments to cover future unknown injuries, as unknown injuries are
speculative in nature and the Act requires FEMA to pay for actual
compensatory damages.
Comment: Commenters stated the Federal government committed crimes
and that the Act did not preclude criminal charges. These commenters
recommended allowing claimants the ability to apply for crime victim
compensation.
FEMA Response: As explained above, the Act sets forth means for
claimants to seek compensation for injuries suffered as a result of the
Fire. Section 104(h) of the Act offers claimants three options to seek
compensation from the Federal government for injuries resulting from
the Fire: (1) a claim under the Act; (2) a FTCA claim or civil action;
or (3) an authorized civil action under any other provision of law. The
Act does not expand the scope of the FTCA or other civil actions under
any other provision of law. The Act does not provide for criminal
prosecution or other remedies. The Act also does not provide for crime
victim compensation. Rather, section 104(c)(3) of the Act provides for
payment of actual compensatory damages. FEMA is not authorized under
the Act to pay additional compensation beyond actual compensatory
damages.
Comment: One commenter stated the Federal government ``should not
be allowed to dictate limits on compensation to victims they violated.
The victims should be allowed to state what will make them individually
whole and what will be required for their healing for the next several
years, or however long it takes, to recover from the offending actions
as only the victim will know what that is and what it will take for
them to heal.'' The commenter further stated that claimants should not
be required to use other Federal programs.
FEMA Response: As explained above, Section 104(h) of the Act offers
claimants three options to seek compensation from the Federal
government for injuries resulting from
[[Page 59742]]
the Fire: (1) a claim under the Act; (2) a FTCA claim or civil action;
or (3) an authorized civil action under any other provision of law.
Claimants may choose among these remedies to address their personal
circumstances and needs, taking into account timely resolution and
costs of each option. Only upon acceptance of a final compensation
award under one of these options will claimants release the Federal
government from further claims arising out of or relating to the same
subject matter. The Act further requires in section 104(d)(1)(B) that
FEMA make determinations as to whether the claimant is an injured
person under the Act; the injury resulted from the Fire, whether the
claimant is otherwise eligible to receive payment, whether sufficient
funds are available for payment, and the amount to be allowed and paid
under the Act. The Act only authorizes FEMA to make these
determinations and sets the framework for how FEMA must make them. The
Act does not authorize FEMA to honor and accept all requests for
compensation.
8. Comments on Sec. 296.13 Subrogation
Comment: Three commenters suggested FEMA delete references to
insurance companies in the regulation. One commenter stated that
insurance companies will demand compensation for the amounts they have
paid or will pay to insured claimants and found that to be fair.
However, the commenter stated that greed may influence the insurers'
claims and those claims would then negatively affect claimant
compensation. Two other commenters stated that this section should be
revised to reflect the Act's prioritization of injured persons over
subrogees.
FEMA Response: As explained above, insurance companies are injured
persons under the Act. FEMA does not believe it is appropriate to
delete references to insurance companies in the regulation, as the
Act's references to them requires FEMA to discuss them in the
regulation. Section 104(d)(1)(A)(ii) requires FEMA to place priority on
claims submitted by injured parties that are not insurance companies
seeking payment as subrogees. Section 296.13 of the IFR requires
subrogees to file their Notice of Loss after they have made all
payments entitled to the injured person for Fire-related injuries under
the terms of the insurance policy. The IFR does not, however, include
the prioritization language from the Act. Given the confusion and
concerns with this section, FEMA is amending Sec. 296.13 to
specifically clarify the prioritization required under the Act in the
Final Rule by requiring that subrogation claims from insurance
companies will be paid only after paying claims submitted by injured
persons that are not insurance companies seeking payment as subrogees.
9. Comments on Sec. 296.14 Assignments
Comment: Several commenters stated that assignment of rights could
not be prohibited. Commenters stated that New Mexico law allowed for
assignment of rights. A commenter stated that ``New Mexico law allows
lawyers to recover their fees by way of liens, and FEMA regulations
should not seek to interfere with the lawyer and client relationship
nor with the ability of the claimant's lawyer to recover their fee.''
The commenter also wrote that the FTCA has no prohibition on
assignments.
FEMA Response: FEMA disagrees that the assignment of rights cannot
be prohibited. Federal law generally prohibits assignment of claims
against the Federal government. The Assignment of Claims Act prohibits
the assignment of a claim against the Federal government unless the
claim is allowed, the amount of the claim is decided, and a warrant for
payment of the claim has been issued.\31\ The Assignment of Claims Act
requires that the assignment must specify the warrant and the
assignment must be made freely and attested to by two witnesses.\32\
The person making the assignment must acknowledge it before an official
who may acknowledge a deed, that official must certify the assignment,
and the certificate issued by the official must state that the official
explained the assignment when it was acknowledged.\33\ Thus, FEMA can
only allow for an assignment of a claim after the Authorized Official's
Determination has been issued and accepted by the claimant and the
claimant has completed the other steps in the process required under
the Federal law to have the assignment reference FEMA's award
determination. The process includes being attested to by two witnesses
and acknowledged by an official who will certify the assignment and
their explanation of the assignment to the claimant. This extensive
process is contrary to the authorizing Act's purpose and the
requirements placed on FEMA by the Act to compensate victims of the
Fire and expeditiously settle claims for those injured. Prohibiting
assignment of claims under the Act is consistent with the purpose of
the Act and other Federal law. The Final Rule will not include
amendments to the assignment of rights. FEMA notes that assignments are
generally not allowed under the Federal Tort Claims Act.\34\ Also, to
the extent that a lien does not involve an assignment, it is a question
of State law to be resolved between the lien holder and the claimant.
---------------------------------------------------------------------------
\31\ 31 U.S.C. 3727(b).
\32\ Id.
\33\ Id.
\34\ See United States v. Shannon, 342 U.S. 288 (1952).
---------------------------------------------------------------------------
Comment: Three commenters suggested that assignment be allowed in
instances of death, with one other commenter also requesting a process
by which compensation can be provided to surviving heirs if a claimant
passes away. These commenters stated that if the claim is legitimate,
the owner's right to assign for a variety of reasons should not be
limited. Another commenter suggested provisions be made for dependent
family members and property co-owners to receive full compensation in
situations where a claimant dies.
FEMA Response: Claimants who pass away during the claims process
can continue to pursue claims through their surviving heirs under
applicable New Mexico estate law.\35\ An assignment of rights is not
required for surviving heirs to pursue a claim under the Act. FEMA
notes that some claimants may wish to have family members pursue the
claim on their behalf and some commenters during public meetings stated
they were pursuing claims on behalf of relatives. The current
regulatory text allows a claimant to authorize a relative or other
third party to have access to claims information and to represent them
on the claim by executing the appropriate section in the Notice of
Loss. The authority to represent a claimant does not require an
assignment of benefits.
---------------------------------------------------------------------------
\35\ See Uniform Probate Code, Chapter 45, New Mexico Statutes
Annotated (2021).
---------------------------------------------------------------------------
Comment: A commenter stated FEMA did not have the authority under
the Act or New Mexico law to restrict assignment of property, stating
claimants should have the right to sell their property and the new
property owner should be able to recover damages to the property as
well as family assignment in case of death. Another commenter requested
that they be able to assign their claim if they want to sell their
property or have someone inherit their claim.
FEMA Response: FEMA disagrees that the assignment of rights cannot
be prohibited. As explained above, Federal law generally prohibits
assignment of claims against the Federal government.\36\ The extensive
process required to assign claims against the
[[Page 59743]]
Federal government is contrary to the authorizing Act's purpose and the
requirements placed on FEMA by the Act to compensate victims of the
Fire and expeditiously settle claims for those injured. Prohibiting
assignment of claims under the Act is consistent with the purpose of
the Act and other Federal law and is not amending the Final Rule. The
Final Rule will not include amendments to the assignment of rights.
---------------------------------------------------------------------------
\36\ 31 U.S.C. 3727(b).
---------------------------------------------------------------------------
Comment: One commenter said that claimants should have the ability
to assign rights to family members or friends but stated ``assignment
of rights cannot be to the detriment of the individual signing it away
or to the benefit of the person who is trying to get it.'' This
commenter further stated that they ``want to see representation for
people who need it but not necessarily assign the rights over.''
FEMA Response: FEMA appreciates the commenter's concerns and
believes that assigning rights in the context of a claim under the Act
could result in unscrupulous activity. The extensive process required
by the Assignment of Claims Act to assign a claim against the Federal
government was put in place for several reasons, one of which was to
reduce concerns about predatory assignments.\37\ FEMA seeks to avoid
situations where predatory assignments could occur. Consistent with
Federal law and the reasons stated above, FEMA is not amending the
Final Rule.
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\37\ See generally Spofford v. Kirk, 97 U.S. 484, 489 (1878)
``the question remains, whether the act of Congress was not intended
to render all claims against the government inalienable alike in law
and in equity, for every purpose, and between all parties. The
intention of Congress must be discovered in the act itself. It was
entitled `An Act to prevent frauds upon the treasury of the United
States.' It may be assumed, therefore, that such was its purpose.
What the frauds were against which it was intended to set up a
guard, and how they might be perpetrated, nothing in the statute
informs us. We can only infer from its provisions what the frauds
and mischiefs had been, or were apprehended, which led to its
enactment.''
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Comment: A commenter wrote that FEMA should modify this section to
allow the State of New Mexico to file a claim on behalf of residents
solely for private property debris removal work not eligible for
Category A/B reimbursements under the Public Assistance Program.
Another commenter wrote of a shortage of available contract resources
impacting the cost and timing of rebuilding efforts and recommending
FEMA allow individuals to permit State agencies to act on their behalf
to address debris removal and damage through a opt in assignment. Other
commenters stated concerns with the effective use of funds for debris
removal generally.
FEMA Response: FEMA recognizes the challenges presented with debris
removal on private property and the concerns with ensuring funding is
effectively utilized under the Act. Under the Act, the Claims Office is
authorized to compensate injured persons for their injuries resulting
from the Fire. The Office recognizes that due to the timing of debris
removal, as well as other elements of a claim, a claimant may require
funds quickly and is prepared to make partial payments to claimants for
severable elements of a claim, including debris removal, allowing
claimants to choose who clears the debris.
F. Comments on Sec. 296.21(a) Allowable Damages
1. Comments on Allowable Damages Generally
Comment: Several commenters suggested FEMA cover specific types of
damages and detail them further in the regulation. Commenters
frequently requested that the claims process ``make them whole.'' One
commenter often recited specific types of damages for which FEMA should
be prepared to compensate (to make whole) to include those damages they
considered to be ``immeasurable'' or ``unseen.'' One commenter stated
that ``FEMA must compensate injured victims for immediately measurable
losses (i.e. destroyed homes, buildings and their contents, property
infrastructures, forestland resources, croplands and crops, and
domestic water conveyances and storage facilities, etc.) and for
intangible losses as well (i.e. destroyed sentimental items which can
never be replaced, mental and emotional tolls regardless of the extent
of professional treatment received, and future potential value of
everything damaged and lost).'' One commenter stated that, in addition
to damage caused as a result of the Fire, ``there is more damage
continuing to happen to injured victims each day on a level which
cannot be seen, measured, or described by any metric'' and further that
the Act's ``reconciliations should go far beyond mere recovery to day-
before-the-fire life conditions for every injured victim because the
damage runs far deeper and much wider than what actually burned in the
fire. It has severely, irreversibly damaged injured victims' souls, and
they deserve to be compensated for that too.''
FEMA Response: FEMA recognizes the significant injuries suffered by
claimants and the long-term recovery needed for the communities
impacted by the Fire. The Act at section 104(c)(3)(A) limits payment to
``actual compensatory damages measured by injuries suffered.'' Section
104(d)(4) of the Act limits allowable damages to uncompensated damages
for loss of property, business loss, and financial loss; and therefore,
limits the actual compensatory damages FEMA may provide to economic
damages. This limitation of the Act with respect to allowable damages
excludes non-economic damages such as pain and suffering. FEMA
recognizes that making people whole for the full scope of loss after a
devastating fire may not be possible. The Act authorizes payment of
damages, and money cannot restore the full array of the human
experience. Section 296.21(e)(3) does authorize payment for out-of-
pocket mental health treatment expenses, which can help alleviate the
emotional suffering and enable affected individuals to recover. Where
New Mexico law allows pain and suffering and non-economic damages in
limited circumstances primarily involving personal injuries, a claimant
that suffered personal injury may choose to pursue a judicial remedy
against the United States Forest Service under the Federal Tort Claims
Act or other civil law. The Act provides the claimant with considerable
flexibility and allows the claimant to opt out of the Claims Office
option and into litigation at any time up until acceptance of a final
offer.
2. Comments on Non-Economic Damages
Several commenters wrote that non-economic damages must be
considered allowable damages.
Comment: One commenter wrote that claimants were entitled to claims
for nuisance and trespass for fire damage to their property under New
Mexico law. Another commenter expanded on the nuisance theory stating
``A wildfire likely qualifies [as] a private or mixed public/private
nuisance, and therefore is actionable either way, at least for those
who suffered damage to their real or personal property. Noneconomic
damages are recoverable for a nuisance claim for `annoyance,
discomfort, and inconvenience.' Notably, a plaintiff need not prove
economic damages (e.g., a diminution in property value) to recover
damages for `annoyance, discomfort, and inconvenience.' ''
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for nuisance and trespass.
Comment: A different commenter also noted the potential trespass
claim, writing ``A defendant commits common-law trespass in New Mexico
by redirecting a foreign substance onto the plaintiff's property. . . .
Under this
[[Page 59744]]
reasoning a wildfire that spreads onto a plaintiff's property would
also constitute a trespass. Although a plaintiff may recover damages
for `annoyance, discomfort, and inconvenience' caused by a private
nuisance, there is no New Mexico authority expressly allowing similar
damages on trespass claims. That said, many jurisdictions allow damages
for annoyance, discomfort, and distress proximately caused by a
trespass. Some of these distinguish between those damages and emotional
distress, while others appear to conflate the two. New Mexico would
likely strictly limit recovery to `annoyance, discomfort, and distress'
and not allow true emotional-distress damages.''
FEMA Response: The Act does not provide for non-economic damages
for nuisance and trespass.
Comment: Several commenters stated emotional distress, disturbance,
annoyance, and other non-economic losses for those with real and/or
personal property losses from the Fire regardless of whether or not the
claimant suffered a physical injury as well as those same losses for
those claimants who suffered a reasonable fear of death or serious
bodily injury as a result of their proximity to the zone of fire
danger, regardless of whether the claimant suffered a physical injury
should be compensated.
FEMA Response: The Act does not provide for non-economic damages
for emotional distress, disturbance, and annoyance.
Comment: Three commenters supported the expansion of allowable
damages to include non-economic damages, including loss of enjoyment,
loss of lifestyle, as well as mental and emotional distress,
sentimental losses, and disturbance and annoyance damages. These
commenters stated that these losses may be greater and more important
than the financial loss.
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for loss of enjoyment, loss of lifestyle, mental and
emotional distress, sentimental losses, or disturbance and enjoyment.,
3. Comments on Emotional Distress/Mental Health Damages
Some commenters stated the specific non-economic damages for which
they suggested compensation should be available under the Act.
Comment: One commenter wrote suggesting claimants could assert a
claim for intentional infliction of emotional distress, stating ``those
individuals who were within the fire's zone of danger and had a
reasonable, objective fear of death or serious bodily injury should be
able to recover non-economic, emotional distress damages as well . . .
Emotional distress is available under New Mexico law when there is a
physical injury . . . These victims suffered smoke inhalation, which is
a physical injury, and thereby makes them eligible for emotional
distress damages under New Mexico law.''
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for intentional infliction of emotional distress.
Comment: A commenter wrote that New Mexico law recognizes claims
for both negligent and intentional infliction of emotional distress.
The commenter discussed negligent infliction of emotional distress and
intentional infliction of emotional distress, stating that claimants
may be able to allege an intentional infliction of emotional distress
claim by ``showing the defendant's conduct was reckless and outrageous
enough to warrant liability.'' The commenter further noted that
claimants prevailing on either claim for infliction of emotional
distress would be entitled to damages for ``physical pain, nervousness,
grief, anxiety, worry, and shock.'' The commenter added that the
Federal government had a special relationship with claimants given
their responsibility for the control of the forests and had neglected
that special relationship, ignored its own regulations, and caused much
emotional distress.
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for negligent and intentional infliction of emotional
distress.
Comment: One commenter stated that the FTCA includes damages for
emotional distress and that New Mexico law also provided the authority
to award emotional distress damages. The commenter also stated that
disturbance and annoyance damages for the interference of real
property, which are non-economic damages, are recoverable. The
commenter also cited to Castillo v. City of Las Vegas \38\ as another
source for recoverable non-economic damages including emotional or
sentimental damages.
---------------------------------------------------------------------------
\38\ 145 N.M. 205 (2008).
---------------------------------------------------------------------------
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for emotional distress If a claimant believes they are
eligible for non-economic damages under New Mexico law and the Federal
Tort Claims Act, they may choose to file a civil claim against the
United States Forest Service in Federal court. They may file suit at
any time prior to acceptance of a final determination.
Comment: One commenter stated that FEMA should provide
reimbursement for the physical, the mental, and the emotional stress
caused by the Fire and referenced the Camp Fire in California as an
example of where these types of damages were paid.
FEMA Response: The Act does not authorize FEMA to provide non-
economic damages for physical, mental, and emotional distress. The Camp
Fire claims were adjudicated applying California law, which differs
significantly from the Hermit's Peak/Calf Canyon Fire Assistance Act.
The Camp Fire claims also involved claims asserted in a bankruptcy
proceeding against a private company, not the Federal government.
4. Comments on Other Damages
Commenters also raised compensation for future work and loss of
opportunity, future potential land use plans, sentimental value, and
loss of wildlife.
Comment: One commenter asked how claimants would be compensated for
the conservation practices of the area, including grazing and thinning
out dense forest lands and making habitat for wildlife. The commenter
also asked how claimants would be compensated for future work and loss
of opportunity for those conservation practices.
FEMA Response: Congress established the Claims Office to provide
actual compensatory damages to injured persons that suffered injury
resulting from the Fire. To the extent that individual claimants
establish injury from the Fire, the Claims Office will work with them
to identify appropriate measures of damage. The Claims Office is
prepared to work with claimants to identify and hire experts to assist
in valuing complex or unusual claims. Under the Act, other Federal
agencies with particular expertise also can be engaged to assist.
Comment: Another commenter wrote suggesting FEMA consider future
land use plans to properly compensate claimants, detailing their own
plans for development of their property impacted by the Fire.
FEMA Response: Under the Act, the Claims Office provides provide
actual compensatory damages to injured persons that suffered injury
resulting from the Fire. Some claims may be too speculative to be
eligible for tort compensation under applicable law, but all potential
claimants are encouraged to submit a Notice of Loss to enable the
Claims Office to evaluate individual claims.
[[Page 59745]]
Comment: One commenter wrote that New Mexico law allows recovery of
sentimental value for personal and real property and stated that
victims are not made whole unless they recover both the economic value
of contents, structures, and trees, plus their sentimental value.
FEMA Response: Under the Act, the Claims Office provides provide
actual compensatory damages to injured persons that suffered injury
resulting from the Fire, but not for non-economic damages. All
potential claimants are encouraged to submit a Notice of Loss to enable
the Claims Office to evaluate individual claims. The Office will work
with claimants to identify eligible economic losses and to properly
value claims. FEMA does not believe changes to the regulatory text are
required in the Final Rule for claimants to seek this type of
compensation if they can demonstrate the loss and that the loss
resulted from the Fire.
In addition to specific damages, commenters suggested FEMA provide
compensation for specific reimbursements associated with damages.
Comment: Two commenters suggested FEMA compensate for property
taxes, either to the local government or individual property owners.
One of these commenters suggested property taxes be addressed by the
New Mexico legislature, as it was for the Cerro Grande Fire, and that
Federal funds should pay State and local governments the difference in
property tax funds.
FEMA Response: Under the Act, the Claims Office provides actual
compensatory damages to injured persons that suffered injury resulting
from the fire. All potential claimants are encouraged to submit a
Notice of Loss to enable the Claims Office to evaluate individual
claims. The Office will work with claimants to identify eligible
economic losses and to properly value claims. FEMA does not believe
changes to the regulatory text are required in the Final Rule for
claimants to seek this type of compensation if they can demonstrate the
loss and that the loss resulted from the Fire.
Comment: One commenter suggested FEMA pay for indirect damage,
including damages resulting from mandatory evacuation, burn scar
flooding, and contractor damages.
FEMA Response: To the extent that damage resulted from the Fire,
damages are compensable under the regulation as written. Specifically
mandatory evacuation expenses and burn scar flooding can be compensable
if resulting from the Fire. Contractor damages may not be compensable,
but the Claims Office encourages claimants to submit all possible
losses to be evaluated. As previously explained, the regulation
provides types of actual compensatory damages that are compensable
under the Act, but that list is not all-inclusive. Claimants seeking
compensation for actual compensatory damages not specifically listed in
the regulation can still submit a claim for compensation under the Act.
Comment: Other commenters suggested that FEMA provide air and water
quality testing/monitoring.
FEMA Response: FEMA understands the concerns regarding water and
air quality and the need for testing and monitoring. These types of
expenses might be compensable as expert opinion expenses under Sec.
296.31(a) or as part of the lump sum incidental expenses for claims
expenses reimbursement under Sec. 296.31(b).
Comment: Two commenters suggested funding to address economic
development as the population (per capita) had decreased since the
Fire, as either business and/or financial loss under the Act.
FEMA Response: Economic development can be speculative and a
claimant seeking compensatory damages for loss of economic development
would need to be able to demonstrate such loss and that such loss was a
result of the Fire. As explained above, the regulation provides types
of actual compensatory damages that are compensable under the Act, but
that list is not all-inclusive. Claimants seeking compensation for
actual compensatory damages not specifically listed in the regulation
should still submit a claim for compensation under the Act. For this
type of claim, claimants can work with their Claims Navigator and
Claims Reviewer to demonstrate that such damages would be considered
actual compensatory damages for injuries resulting from the Fire
consistent with the Act. FEMA does not believe changes to the
regulatory text are required in the Final Rule for claimants to seek
this type of compensation if they can demonstrate the loss and that the
loss resulted from the Fire.
Comment: One commenter suggested an additional amount be awarded
where the claimant dies to compensate for the further injury inflicted
as a result of delays in compensation.
FEMA Response: FEMA disagrees with this commenter. This proposed
claim would not be for actual compensatory damages for injuries
resulting from the Fire and is not authorized.
5. Comments on Flood Damages
Comment: One commenter suggested FEMA add flood damage to Sec.
296.21(a) writing that it was ``illogical to provide compensation for
flood insurance as a financial loss in Sec. 296.21(e)(2) but not for
flood damage.'' A different commenter stated that claimants face risks
of further injury from flooding, landslide/mudslide, and debris flow
and that full cooperation from owners of all affected property parcels
located upstream and upslope was essential to recovery. The commenter
requested FEMA acknowledge, address, and compensate for those long-term
risks.
FEMA Response: FEMA is revising the purpose of the regulation in
Sec. 296.1 to incorporate language to address this issue. By changing
the current regulatory text addressing the compensable injuries from
``suffered from'' to ``resulting from'' the Fire, this change addresses
the commenters' concerns with whether flood damage is an allowable
damage. Further, the definition of ``injured person'' includes injuries
``resulting from the Hermit's Peak/Calf Canyon Fire'' and is broad
enough to encompass flooding as well as other types of injuries that
may be considered to be resulting from the Fire.
6. Comments on Personal Injury Damages
Comment: Commenters suggested that FEMA clarify that personal
injury is an allowable damage.
FEMA Response: Section 296.21(a) allows for payment of actual
compensatory damages for injury and ``injury'' is defined in Sec.
296.4 to include personal injury. All potential claimants are
encouraged to submit a Notice of Loss to enable the Claims Office to
evaluate individual claims. The Claims Office will work with claimants
to identify eligible economic losses, which could include compensation
for economic losses associated with personal injury such as medical
bills, on-going therapy, and the like and to properly value claims.
Comment: One commenter suggested that FEMA provide compensation for
health issues for residents and animals affected by compromised water
and air quality issues.
FEMA Response: FEMA agrees these types of damages are generally
compensable under the Act as personal injury damages and damage to
property. These health issues, if resulting from the Fire, could be
considered injuries under the Act's definition and compensable as such.
[[Page 59746]]
7. Comments on Calculation of Damages
Comment: One commenter noted that the legal precedent in New Mexico
does not require claimants to adhere to a strict formula to calculate
damages. Another commenter agreed, citing to Maestas v. Medina.\39\ A
different commenter asked which New Mexico laws were being used to
calculate damages.
---------------------------------------------------------------------------
\39\ 2011 N.M. App. Unpub. LEXIS 276 (2011).
---------------------------------------------------------------------------
FEMA Response: In paragraph 296.21(a) FEMA states, consistent with
the Act, that the agency will apply New Mexico law to the calculation
of damages. The Claims Office will work with claimants to identify an
appropriate measure of damages consistent with applicable law.
8. Comments on Reasonable Damages
Comment: Finally, commenters discussed the requirement that damages
must be reasonable in amount in the IFR. Some commenters suggested that
FEMA delete the requirement that damages must be reasonable in amount
while others recommended it be changed to actual damages supported. One
commenter stated that FEMA should give claimants the autonomy to define
reasonableness for themselves.
FEMA Response: The Act limits compensation to actual damages
incurred by the claimant. To better ensure that the claimant is only
being compensated for the actual damages incurred and that claimant is
not being compensated in amounts that exceed the actual damages
incurred, FEMA requires that the damages be reasonable in amount.
G. Comments on Sec. 296.21(b) Exclusions
1. Comments on Punitive Damages
Comment: Two commenters suggested claimants be allowed to seek
punitive damages.
FEMA Response: Section 104(c)(3)(B)(ii) of the Act specifically
excludes punitive damages from the compensation available under the
Act. It is thus beyond FEMA's statutory authority to compensate for
these damages.
2. Comments on Criminality
Comment: One commenter wrote ``Essentially, the USFS committed a
crime when--against all experience-informed protests from local
citizens--its agents (the district ranger, burn boss and all commanding
managers above them) made the decision to begin the Dispensas
Prescribed Burn which rapidly and irreversibly exploded into the
catastrophe now known as the Hermit's Peak Fire. They also committed a
crime of negligence when they failed to properly monitor burn piles
which reignited and caused the Calf Canyon Fire which merged with the
Hermit's Peak Fire to cause widespread devastation now wreaking havoc
for victims of the fire.''
FEMA Response: FEMA is not authorized under the Act to pursue these
types of claims. In the Act, the United States accepted responsibility
for damage resulting from the Fire and waived sovereign immunity to
compensate victims in tort. By excluding punitive damages, the Act
makes clear that damages for intentional and other behavior otherwise
giving rise to heightened liability are not compensable. FEMA is not
revising the Final Rule.
3. Comments on Attorneys' and Agents' Fees
While one commenter specifically expressed support for this
provision,\40\ a large number of commenters wrote that FEMA should pay
attorneys' and agents' fees associated with the claims process.
---------------------------------------------------------------------------
\40\ The commenter wrote ``Subpart C Section 296.21(b) Excludes
reimbursement for attorney's fees and agents' fees, plus claimant's
cost of prosecuting a claim. This should stay. We want all of the
money to go to the people injured in any way by the Hermit's Peak/
Calf Canyon Fire.''
---------------------------------------------------------------------------
Comment: One commenter wrote that the Administrator had the
discretion to pay legal fees under the Act because the Act allows the
award of financial losses of ``any other loss that the Administrator
determines to be appropriate for inclusion as financial loss.'' The
commenter stated that claimants using lawyers are likely to have more
complete and better documented claims and that FEMA should want and
encourage claimants to have complete and well documented claims. The
commenter also noted that if claimants pay the financial expense of a
lawyer the victims will not be made 100 percent whole unless they
recover both 100 percent of losses and 20 percent for legal fees. A
different commenter also stated that FEMA should encourage the
efficiency and assistance that will result from allowing claimants to
obtain attorney assistance and be made whole by allowing claimants to
recover their attorney's fees.
FEMA Response: The Act is silent regarding FEMA's authority to pay
attorney or agent fees. Generally, if Congress knows how to say
something but chooses not to, its silence is controlling.\41\ While the
Act places limits on the amount an attorney or agent may charge in
section 104(j)(1), the Act does not provide for attorney or agent fees
as allowable damages. Further, the ``American Rule,'' generally
applicable in civil litigation and accepted by the United States
Supreme Court initially in the case of Arcambel v. Wiseman,\42\
provides that in the absence of a statute indicating otherwise, each
party is responsible for paying their own attorney fees. FEMA designed
the claims process so that claimants will receive all eligible
compensation without the need to engage the services of an attorney,
and the Claims Office hired Claims Navigators to assist claimants
compiling necessary documentation and with the Proof of Loss. Although
claimants have the right to hire an attorney, one is not required.
---------------------------------------------------------------------------
\41\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\42\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: A commenter wrote ``The Fire Victim Trust in California
added legal fees to gross economic awards, and it has been a tremendous
benefit as around 90 [percent] of claimants hired lawyers.''
FEMA Response: As noted, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\43\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. FEMA is applying the
generally accepted American Rule for attorney fees. FEMA designed the
claims process so that claimants will receive all eligible compensation
without the need to engage the services of an attorney, and the Claims
Office hired Claims Navigators to assist claimants compiling necessary
documentation and with the Proof of Loss. Although claimants have the
right to hire an attorney, one is not required. Also as noted, the Fire
Victim Trust in California involved a private party defendant under the
oversight of a bankruptcy court applying California law and does not
present a useful
[[Page 59747]]
paradigm for the Hermit's Peak/Calf Canyon Fire.
---------------------------------------------------------------------------
\43\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
---------------------------------------------------------------------------
Comment: A commenter wrote that Congress only prevented the award
of punitive damages and interest in the Act, not the award of legal
fees.
FEMA Response: As noted, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\44\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. FEMA is applying the
generally accepted American Rule for attorney fees. FEMA designed the
claims process so that claimants will receive all eligible compensation
without the need to engage the services of an attorney, and the Claims
Office hired Claims Navigators to assist claimants compiling necessary
documentation and with the Proof of Loss. Also as noted, the Act is a
limited waiver of sovereign immunity, and similar to cases decided
under the Federal Tort Claims Act,\45\ the Act does not waive sovereign
immunity to allow payment of attorney fees.
---------------------------------------------------------------------------
\44\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\45\ E.g., Anderson v. United States, 127 F.3d 1190, 1191 (9th
Cir. 1997) (``The FTCA does not contain an express waiver of
sovereign immunity for attorneys' fees and expenses.''); Joe v.
United States, 772 F.2d 1535 (11th Cir. 1985).
---------------------------------------------------------------------------
Comment: Several commenters stated the process was too complicated
and required professional and/or legal assistance to navigate and that
payment of these fees would help to make them whole.
FEMA Response: One purpose of the Act is to provide for expeditious
consideration and settlement of claims from the Fire. The Claims Office
interprets this to require an approach to settling claims that
claimants can complete without engaging the services of attorneys or
other professionals. To achieve this goal, FEMA hired a number of
Claims Navigators from the local community, trained these Claims
Navigators to identify compensable losses and to understand what is
needed to complete a Proof of Loss, and developed a Claims Office ethos
that emphasizes the needs of the claimant. The Claims Navigators work
with claimants to ensure that they develop the information needed to
receive compensation for all eligible losses. The Claims Office
recognizes that some claims will require special expertise and will pay
for experts that are needed to value particular claims. FEMA also notes
that at the time the comment was submitted, the Claims Office had not
yet fully developed the claims procedures, so it is understandable that
the commenters did not recognize that the process is designed so that
claimants do not need legal assistance.
Comment: One commenter wrote that the Act recognized that claimants
may seek legal assistance and capped those fees at 20 percent. The
commenter stated that a FEMA representative, ``protected by sovereign
immunity, with no legal, ethical, or fiduciary obligation to the
claimant, will be advising the claimant on the strategy to meet their
burden of proof to obtain make-whole damages allowed by the language of
the HPFAA and New Mexico State law. This approach puts claimants in the
hands of FEMA representatives who have a conflict of interest. That is
simply improper, unfair, unduly harmful to claimants, and places an
administrative burden on FEMA and its representatives that otherwise
would be borne by the claimant's attorneys.'' This commenter also
stated that the claims process required claimants to make decisions
with legal implications and that FEMA employees and contractors would
be able to obtain legal advice and assistance from their counsel in the
process. The commenter stated that FEMA's legal team would be paid from
Act's funds as an administrative expense and that claimants' attorneys'
fees should be as well. The commenter also added that if represented by
attorneys, FEMA should pay those funds directly to the attorneys for
proper handling and lien resolution through authorized IOLTA trust
accounts stating that claimants would have lien obligations that must
be satisfied out of the compensation received, whether to satisfy fees,
mortgages, medical liens, or other liens.
FEMA Response: As with the Cerro Grande Act, in this Act, Congress
limits attorney fees that an attorney is able to charge given it has
established a claims process statutorily mandating the expeditious
provision of compensation to all injured persons. FEMA designed the
program to help claimants navigate the process. The Claims Office is
implementing measures to eliminate potential conflicts of interest, and
otherwise the Claims Office has no incentive not to pay claimants for
all eligible losses. The Act creates the Claims Office and instructs
the Director of the Claims Office, other officials, and staff to fully
compensate claimants applying the authorizations and limitations in the
law. The Director, other officials, and staff have a legal duty to pay
eligible claimants the full amount of proven claims. Third, the
assignment of benefits prohibition in the regulations.
Comment: One commenter stated that attorneys' fees should be
covered to help with the claims process for those especially that are
elderly, handicapped, or those with basic literacy skills that don't
have the ability to file the claims process themselves, that ``the
attorneys' fees should not come out of the final claim; that should be
added on top of it.''
FEMA Response: As discussed above, the Act is silent regarding
FEMA's authority to pay attorney or agent fees. Generally, if Congress
knows how to say something but chooses not to, its silence is
controlling.\46\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. Further, the ``American
Rule,'' generally applicable in civil litigation and initially accepted
by the United States Supreme Court in the case of Arcambel v.
Wiseman,\47\ provides that in the absence of a statute indicating
otherwise, each party is responsible for paying their own attorney
fees. FEMA designed the claims process so that claimants will receive
all eligible compensation without the need to engage the services of an
attorney, and the Claims Office hired Claims Navigators to assist
claimants compiling necessary documentation and with the Proof of Loss.
Although claimants have the right to hire an attorney, one is not
required. Also, the State of New Mexico has identified several programs
providing free legal representation for individuals affected by the
Fire.
---------------------------------------------------------------------------
\46\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\47\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: One commenter stated that attorneys' fees and consultant
fees need to be paid out of the Act's funding if the fees to administer
the program would be paid out of the Act's funding.
FEMA Response: As explained above, section 104(a)(2)(C)(i) requires
FEMA to use the funding made available under the Act to fund the Claims
Office. FEMA is required to follow the Act's
[[Page 59748]]
requirement to fund the Claims Office from the Act's funding.
Additionally, as discussed above, the Act is silent regarding FEMA's
authority to pay attorney or agent fees. Generally, if Congress knows
how to say something but chooses not to, its silence is
controlling.\48\ While the Act places limits on the amount an attorney
or agent may charge in section 104(j)(1), the Act does not provide for
attorney or agent fees as allowable damages. Further, the ``American
Rule,'' generally applicable in civil litigation and initially accepted
by the United States Supreme Court in the case of Arcambel v.
Wiseman,\49\ provides that in the absence of a statute indicating
otherwise, each party is responsible for paying their own attorney
fees. FEMA designed the claims process so that claimants will receive
all eligible compensation without the need to engage the services of an
attorney, and the Claims Office hired Claims Navigators to assist
claimants compiling necessary documentation and with the Proof of Loss.
Although claimants have the right to hire an attorney, one is not
required.
---------------------------------------------------------------------------
\48\ Animal Legal Defense Fund v. USDA, 789 F.3d 1206 (11th Cir.
2015), citing In re Haas, 48 F.3d 1153, 1156 (11th Cir. 1995),
abrogated on other grounds by In re Griffith, 206 F.3d 1389 (11th
Cir. 2000). See also United States v. Roof, 10 F.4th 314 (4th Cir.
2021), citing Discover Bank v. Vaden, 396 F.3d 366, 370 (4th Cir.
2005).
\49\ 3 U.S. (3 Dall.) 306 (1796). See also Peter v. NantKwest,
Inc., 140 S.Ct. 365 (2019), Hardt v. Reliance Standard Life
Insurance Co., 560 U.S. 242 (2010), Ruckelshaus v. Sierra Club, 463
U.S. 680 (1983), and Summit Valley Industries, Inc. v. Carpenters,
456 U.S. 717 (1982).
---------------------------------------------------------------------------
Comment: Some commenters stated that the funding provided under the
Act was not sufficient to pay the claims and attorneys' and agents'
fees.
FEMA Response: FEMA is also concerned about the use of funds under
the Act to pay attorneys' fees. As explained above, FEMA is committed
to hiring staff and providing resources to assist all claimants with
their claims. While claimants can seek counsel on their own, the claims
process, as structured, will provide claimants with the assistance
needed to prepare and submit their claims effectively.
Comment: A commenter requested consistency in awards for damage,
asking if FEMA would treat all claimants equitably whether the claimant
chose to represent themselves and hired an attorney to handle their
claim.
FEMA Response: FEMA understands the commenter's concern but
reiterates that the agency is bound to act in a fair manner with all
claimants, regardless of representation. FEMA is committed to hiring
staff and providing resources to assist all claimants with their
claims. While claimants can seek counsel on their own, the claims
process, as structured, will provide claimants with the assistance
needed to prepare and submit their claims effectively.
4. Comments on the Cost of Prosecuting a Claim
Comment: Several commenters sought to remove this exclusion from
damages. One commenter wrote ``Absolutely every second of time spent on
every action required of victims for them to receive compensations from
the Hermit's Peak Fire Assistance Act must be covered as recoverable
expense since this situation has been foisted upon victims against
their will and through no fault of their own. This must be the case no
matter the severity level of injury suffered by victims because this
entire ordeal is both time consuming and stressful as it drags on to
full conclusion.'' A different commenter wrote ``Time spent in claims
preparation is not considered a damage. The time required for
processing this claim is extensive. Loss of my time is a loss of that
part of my life, and it should be considered valuable.''
FEMA Response: FEMA provides claimants with the ability to recover
the reasonable costs incurred in providing documentation requested by
the Claims Office pursuant to Sec. 296.31(a) and incidental expenses
pursuant to Sec. 296.31(b). However, time spent in the prosecution of
a claim is not considered an actual compensatory damage. Section
104(c)(3)(A) of the Act requires FEMA to reimburse claimants only for
actual compensatory damages. FEMA cannot reimburse claimants for time
spent working on their claims as such reimbursement is beyond the
agency's statutory authority.
Comment: One commenter wrote that because the Act authorizes
compensation for `any other loss that the Administrator determines to
be appropriate for inclusion,' FEMA can allow the cost of prosecuting a
claim to be recoverable.
FEMA Response: As explained in the IFR, compensatory damages for
time spent in claims preparation or prosecuting a claim are not
available under New Mexico law or the Federal Tort Claims Act.
Moreover, there is no evidence Congress intended that claimants be
compensated for the value of their time in preparing a claim. As
explained in the IFR, FEMA is choosing to exercise discretion to
provide a lump sum payment to claimants for miscellaneous and
incidental expenses incurred in the claims process. FEMA will provide a
lump sum payment of five percent of the insured and uninsured loss
(excluding flood insurance premiums), not to exceed $25,000. The
minimum lump sum payment is $150. Section 296.31(b) of the IFR
represents a fair and reasonable accommodation between the agency's
responsibility to spend Federal funds wisely and the desire to
compensate claimants as fully as possible.
Providing compensation for a claimant's time would be difficult to
administer, as FEMA would have to determine equitably the value of a
claimant's time and to verify that claimants have expended the number
of hours that are claimed. FEMA's payments under the Act are subject to
independent audit by the GAO and the DHS OIG and claimants would likely
find attempts by auditors to verify the payment for hours spent in the
claims process highly intrusive. Additionally, the type of compensation
requested by commenters here would require production of receipts and
other documentation, resulting in an overly burdensome process for this
payment to claimants contrary to other comments requesting the agency
streamline and simplify the claims process.
H. Comments on Sec. 296.21(c) Loss of Property
Comment: One comment stated flood damage should be specifically
added to this section. Several other commenters suggested an addition
to this paragraph to allow for other losses including anticipated
future damages from flooding through November 14, 2032. These
commenters noted that it could be up to ten years before conditions
stabilize in the impacted forests and watersheds and that the Act's
language indicates that post-fire flooding injuries should be
considered as actual compensatory damages.
FEMA Response: As explained above, FEMA is revising Sec. 296.1 of
the Final Rule to clarify that claimants may seek compensatory damages
for injuries resulting from the Fire. This language is broad enough to
encompass a range of injuries resulting from the Fire, including flood
damages. Additionally, the definition of ``injured person'' includes
injuries ``resulting from the Hermit's Peak/Calf Canyon Fire'' and is
broad enough to encompass flooding, mudflow, mold, and debris flow as
well as other types of injuries that may be considered to be resulting
from the Fire. FEMA does not believe additional edits to this section
of the regulation are required as a result. Further, FEMA is unable to
extend the deadline for claims submission requested by the
[[Page 59749]]
commenters. As previously explained, some deadlines in the rule are
beyond FEMA's control and authority to change. Section 104(b) of the
Act requires claimants submit their Notice of Loss no later than
November 14, 2024, two years from the date the IFR is promulgated. FEMA
has built in extensions of this timeline for good cause, recognizing
the realities of the Fire's impact. Sections 296.34 and 296.35 below
establish a process for notifying FEMA of injuries that are not
referenced in the initial Notice of Loss. Whether a claimant tells FEMA
about an injury in the initial Notice of Loss or an amendment under
Sec. 296.34, FEMA must know about the injury by November 14, 2024. For
heightened risk reduction efforts, a claimant must include the claim in
their Notice of Loss by November 14, 2024, or an amended Notice of Loss
filed no later than November 14, 2025. See Sec. 296.21(c)(5).
Additionally, FEMA recognizes the potential long-term impacts of
flooding after fire and will encourage claimants to consider risk
reduction measures to address those risks.
1. Comments on Sec. 296.21(c)(1) Real Property and Contents
Comment: Several commenters wrote about how FEMA would value real
property and contents when analyzing claims under the Act. Most of
these commenters suggested FEMA consider the actual costs to rebuild
and construct in the future, acknowledging increasing market values of
land, construction, and other costs such as inflation. with some
commenters stating that it may not be safe to immediately rebuild.
FEMA Response: The language in the IFR addresses these concerns as
it explains the costs of reconstruction must factor in post-Fire
construction costs as well as current building codes at the time of
construction. FEMA will work with claimants to ensure that compensation
effectively addresses future construction cost concerns and
compensation for any decrease in the value of the land on which the
structure sat as detailed in Sec. 296.21(c)(1). FEMA is not making any
changes to this section of the Final Rule.
Comment: Some commenters stated that it may not be safe to
immediately rebuild. One commenter wrote claimants face decades of
uncertainty regarding terrain stability and that ``such areas are now
extremely high-risk hazard zones.''
FEMA Response: FEMA understands concerns about rebuilding
immediately after the Fire and will work with claimants to ensure that
compensation effectively addresses concerns regarding stabilizing the
land and for any decrease in the value of the land on which the
structure sat as detailed in Sec. 296.21(c)(1). The current text in
the IFR is sufficient to address this concern and is not making any
changes to this section of the Final Rule.
Comment: Commenters raised questions regarding compensation for
other damages beyond home reconstruction. Some commenters suggested
FEMA consider the intrinsic value of the property lost, as well as loss
of use damages and compensation for future potential land use.
Commenters suggested that damages be calculated based on replacement
and/or intrinsic value--not fair market value. Other commenters wrote
requesting compensation for lost sentimental value for damaged real and
personal property and the loss of use of personal or real property.
FEMA Response: Generally, FEMA's calculation of damages, including
how damaged property is valued, will be governed by the Act and Federal
law. To the extent that this valuation is not pre-empted by Federal
law, New Mexico law will govern.
Comment: Some commenters suggested payment of double compensatory
damages for trespass under New Mexico Statutes Annotated section 30-14-
1.1.
FEMA Response: As noted, the Act does not provide for punitive or
non-economic damages, including non-economic damages for nuisance and
trespass. Economic damages associated with nuisance and trespass are
available upon proper proof. However, because the Act limits recovery
to actual damages, double compensation would not be available.
Comment: Two commenters suggested FEMA compensate for property
taxes, either to the local government or individual property owners.
FEMA Response: The Claims Office compensates claimants for actual
damages resulting from the Fire. Any increases in property tax or any
decreases in property tax revenue income, if resulting from the Fire,
would be compensable under the IFR.
Comment: One commenter asked how losses for wells, water, and
erosion would be compensated.
FEMA Response: While the IFR addresses erosion, FEMA is adding
paragraph (c)(5) to Sec. 296.21 of the Final Rule specifically address
damages for physical infrastructure including irrigation infrastructure
such as acequia systems. This change in the Final Rule can also
encompass concerns raised regarding well and water losses to the extent
those losses are of physical infrastructure. Those losses may also be
considered part of real property and contents losses in Sec.
296.21(c)(1).
Comment: One commenter suggested FEMA find ways to compensate
people that work a land grant, as those claimants would not have deeds
to the property and figure out ways to get them documentation to
support their claims.
FEMA Response: The IFR language sufficiently addresses these
commenters' concerns. Specifically, FEMA defines ``injured person'' in
Sec. 296.4 to include individuals, businesses, Indian Tribes, State
and local government entities, and ``other non-Federal entit(ies).''
This broad definition currently encompasses all potential claims
associated with land grants as a result. As explained above, the Claims
Office locally hired Navigators to assist claimants compiling necessary
documentation and completing the Proof of Loss in support of the claim.
Claims Navigators and Claims Reviewers will work with each claimant to
ensure that they are able to get the proper documentation to complete
their claim and will use alternative methods to prove ownership when
the deed is not available, such as affidavits, utility bills, and tax
records.
Comment: One commenter inquired as to whether or not their vehicle
and newly published book would be covered under the regulation.
FEMA Response: Section 296.21(c)(1) of the IFR explains that
claimants can seek compensation for the contents of real property
damaged by the Fire. The commenter's personal property mentioned is
covered by the current language and no changes to the regulatory text
is required for the Final Rule.
Comment: Several commenters focused on the issue of compensation
for debris removal under this paragraph. Commenters generally sought
clarification on what compensation was available. Commenters sought
wages as compensation for debris removal efforts they complete because
of the lack of available contractors in the area. One commenter stated
``there is so much devastation, the cleanup part of the reimbursement
is going to fall mainly on the landowner because there [are] not enough
contractors or help out there to do this much clean up. And so, in
order to do that, the landowners are going to need to pay themselves
for their time and equipment that they use and need to cleanup a
massive amount of trees. And so, I would hope that part of the
compensation for the debris removal and reforestation is, would include
wages for the landowners or their
[[Page 59750]]
friends or whoever to pay to get it done.''
FEMA Response: Claimants seeking compensation for their own work or
the work of those they hire to remove debris can claim this expense
under Sec. 296.21(c)(1). FEMA does not believe further edits to the
regulatory text are required for claimants to seek this compensation.
Comment: Commenters questioned the extent to which adjacent
property owners could be held responsible for debris flow traced to
their property.
FEMA Response: FEMA recognizes that not every property owner will
file a claim or seek to restore their property and FEMA cannot require
property owners to do so. Claimants seeking to promote recovery of
their properties can file a claim under this paragraph. Also, the Act
does not authorize FEMA to pursue liability against third parties who
may be responsible for damage.
Comment: Other commenters raised concerns about current debris
removal efforts. A commenter stated that trees being removed for right
of way created stumps that were too high and dangerous and a lack of
inspections on the work performed. The commenter stated a general lack
of progress on debris removal and how a lack of fencing resulted in
animals in the road, presenting a danger to commuters in the area.
FEMA Response: FEMA understands the challenges associated with
debris removal after a wildfire and subsequent flooding. This paragraph
of the IFR provides claimants the ability to receive compensation for
removing debris and burned trees. As noted, FEMA and other Federal and
State agencies have a number of programs that provided assistance after
the Fire and had responsibilities for debris removal. The Claims Office
provides compensation for damages resulting from the Fire, including
debris removal, and is not responsible for debris removal and other
post-disaster activities undertaken by other Federal and State
agencies.
Comment: Finally, some commenters sought clarification on
prioritization of claimants with respect to this paragraph. Commenters
generally suggested that FEMA focus first on those who lost their
homes, including mobile homes, and do everything possible to make them
whole.
FEMA Response: FEMA intends to prioritize individual claimants over
subrogees consistent with the Act's mandate at section
104(d)(1)(A)(ii). FEMA understands the unique challenges presented for
those that lost their homes in the Fire and agrees that those claims
require immediate attention. FEMA will work to ensure that all claims
are reviewed in an expeditious and fair manner.
Comment: A commenter raised concerns about FEMA assistance through
the Individual Assistance Program related to SBA loans, stating that an
SBA loan would not make claimants whole.
FEMA Response: Under the Act, this commenter has the option of
filing a claim to be compensated for these damages if the assistance
provided under the Individual Assistance Program was insufficient to
fully compensate them.\50\ FEMA notes that the Individual Assistance
Program has specific criteria for assistance,\51\ including
requirements regarding pursuing a loan with the Small Business
Administration, that are not found in the Act. FEMA encourages
claimants to seek compensation for actual compensatory damages for
injuries resulting from the Fire and as explained above, the Act can
provide compensation if the assistance provided under the Individual
Assistance Program was insufficient to fully compensate claimants.
Notably, Small Business Administration loans, and the interest accrued
on these loans, is compensable under the Act.
---------------------------------------------------------------------------
\50\ Section 296.21(e)(1) provides for compensation under the
Act for interest paid on loans for damages resulting from the Fire
as well as proceeds from the compensation award to repay any SBA
loans obtained.
\51\ For information on the criteria for participation in the
Individual Assistance Program please see the Individual Assistance
Program and Policy Guide, Version 1.1 found at <a href="https://www.fema.gov/sites/default/files/documents/fema_iappg-1.1.pdf">https://www.fema.gov/sites/default/files/documents/fema_iappg-1.1.pdf</a> (last accessed Feb.
24, 2023).
---------------------------------------------------------------------------
Comment: One commenter asked if the Act would compensate for
looting that occurred on their property after the Fire, stating they
were denied assistance under the Individual Assistance Program.
FEMA Response: Under the Act, this commenter has the option of
filing a claim to be compensated for these damages if the assistance
provided under the Individual Assistance Program was insufficient to
fully compensate them.\52\ FEMA notes that the Individual Assistance
Program has specific criteria for assistance.\53\ FEMA encourages
claimants to seek compensation for actual compensatory damages for
injuries resulting from the Fire and as explained above, the Act can
provide compensation for damage from the Fire if the assistance
provided under the Individual Assistance Program was insufficient to
fully compensate them.
---------------------------------------------------------------------------
\52\ Section 296.21(e)(1) provides for compensation under the
Act for interest paid on loans for damages resulting from the Fire
as well as proceeds from the compensation award to repay any SBA
loans obtained.
\53\ For information on the criteria for participation in the
Individual Assistance Program please see the Individual Assistance
Program and Policy Guide, Version 1.1 found at <a href="https://www.fema.gov/sites/default/files/documents/fema_iappg-1.1.pdf">https://www.fema.gov/sites/default/files/documents/fema_iappg-1.1.pdf</a> (last accessed Feb.
24, 2023).
---------------------------------------------------------------------------
2. Comments on Sec. 296.21(c)(2) Reforestation and Revegetation
Comment: Most commenters opposed the formula to pay 25 percent of
the pre-Fire value of the lot and structures as compensation for
reforestation and revegetation. Commenters stated 75 percent less value
was unacceptable when there were large parcels of land previously
forested before the Fire and recommended FEMA delete the 25 percent cap
on reforestation damages, with several commenters stating the 25
percent limit violated New Mexico law. One commenter wrote ``For
landowners that have more than 100 acres, this is a tremendous
financial burden when they need to come up with 75 [percent]. The
compensation needs to be changed from 25 [percent] to a greater extent
to cover losses from fire, erosion, creeks and water ways, meadows,
deep canyons, pine trees, oak brush, and trees.'' A different commenter
wrote ``Generations of stakeholders have provided a free ecological
service maintaining the lands that make up the watersheds that provide
clean water for millions downstream. This includes best practices for
farming and forestry. Restoring the forests and planting new trees is
essential for regenerating a healthy ecosystem, and repairing the harm
done by the US government. Providing 100 [percent] of costs for loss
will ensure that future generations have a better chance to develop
this unique rural/mountain economy.''
FEMA Response: In the IFR, FEMA limited compensation for trees and
other landscaping to 25 percent of the pre-Fire value of the structure
and lot. This approach was generally consistent with the approach taken
in the Cerro Grande Fire Assistance process. As explained in the IFR,
the 25 percent limitation does not apply to business losses for timber,
crops, and other natural resources under Sec. 296.21(d). In response
to commenter concerns and confusion regarding the application of this
formula, FEMA is revising this paragraph in the Final Rule to eliminate
references to the 25 percent formula. FEMA understands that the land
impacted by this Fire was more heavily forested than the Cerro Grande
Fire and that those resources were relied on for personal, subsistence,
and business needs, making the formula in this section of the IFR
particularly confusing. The Final Rule allows for
[[Page 59751]]
compensatory damages for the cost of replacement of destroyed trees and
other landscaping and removes references to the 25 percent formula.
Comment: Several commenters opposed to this paragraph stated the
distinctions between the Cerro Grande Fire and Hermit's Peak/Calf
Canyon Fire communities necessitated a different valuation analysis for
the claims process. One commenter wrote ``Landowners of Mora and San
Miguel are usually on many acres of land (some have been passed down
through generations), whereas Cerro Grande were on smaller lots. 75
[percent] less value is unacceptable when you have a large parcel of
land that was previously forested.'' Another commenter wrote ``This
approach was used in the Cerro Grande Fire Assistance Process in Los
Alamos, New Mexico of which is one of the wealthiest counties per
capita in the nation. I suspect the structures and land parcels are of
higher value in Los Alamos versus Mora, New Mexico based on property
assessments. It is suggested to reconsider the formula because
properties in Mora would receive less compensation for similar damage
from the wildfire versus Los Alamos.'' A commenter wrote ``Unlike
properties in Los Alamos that were damaged by the Cerro Grande Fire and
upon which this interim rule is based, many of the properties damaged
by the Hermit's Peak and Calf Canyon Fires consist of hundreds of tree-
covered acres, not small, landscaped lots. New Mexico has a long
history of subsistence use of forests and trees that should be
recognized by this rule.''
FEMA Response: As explained above, FEMA appreciates the insights
provided by commenters on the distinctions between the areas impacted
by the Cerro Grande Fire and the Hermit's Peak/Calf Canyon Fire. These
differences are important to recognize, and FEMA agrees that these
differences require revision to the IFR where the process implemented
for the Cerro Grande Fire will no longer meet the needs of claimants
for the Hermit's Peak/Calf Canyon Fire. In response to commenters'
concerns, FEMA is revising this paragraph in the Final Rule to
eliminate references to the 25 percent formula. As explained above,
FEMA understands the communities impacted by this Fire were less
densely populated and contained larger areas of privately held land.
This land was also more heavily forested, making the loss of trees and
vegetation a particularly devastating loss for claimants. The Final
Rule allows for compensatory damages for the cost of replacement of
destroyed trees and other landscaping and removes references to the 25
percent formula.
Comment: A commenter wrote that the Act did not impose caps on tree
or mitigation damages and that New Mexico law did not have a cap on
damages to trees or for mitigation, but rather that New Mexico law
allows plaintiffs to recover the full value of any trees destroyed on
their property. This commenter further stated that ``New Mexico law
allows as compensatory damages double the value of tree damages. While
the Act prohibits `punitive damages' it does not prohibit statutory
compensatory damages but requires application of New Mexico law which
includes section 30-14-1.1.''
FEMA Response: In the IFR, FEMA limited compensation for trees and
other landscaping to 25 percent of the pre-Fire value of the structure
and lot. This approach was generally consistent with the approach taken
in the Cerro Grande Fire Assistance process. As explained in the IFR,
the 25 percent limitation does not apply to business losses for timber,
crops, and other natural resources under Sec. 296.21(d). In response
to commenter concerns and confusion regarding the application of this
formula, FEMA is revising this paragraph in the Final Rule to eliminate
references to the 25 percent formula. FEMA understands that the land
impacted by this Fire was more heavily forested than the Cerro Grande
Fire and that those resources were relied on for personal, subsistence,
and business needs, making the formula in this section of the IFR
particularly confusing. The Final Rule allows for compensatory damages
for the cost of replacement of destroyed trees and other landscaping
and removes references to the 25 percent formula.
Comment: Commenters asked how the valuation used in the formula
would be made under the formula, with one commenter requesting the
inclusion of intrinsic value to be part of the damage's calculation for
real property loss. A commenter asked how the 25 percent would be
quantified and qualified. A different commenter requested that losses
be calculated using replacement and/or intrinsic value, not fair market
value and that these values should account for the generational
investment in the land and forest that was destroyed, as well as the
loss that will be incurred while regrowth takes place.
FEMA Response: In response to commenter concerns and confusion
regarding the application of this formula as explained above, FEMA is
revising this paragraph in the Final Rule to eliminate references to
the 25 percent formula. The Final Rule allows for compensatory damages
for the cost of replacement of destroyed trees and other landscaping.
Valuation of losses under this revised language will be at 100 percent
of the damage. Generally, FEMA's calculation of damages, including how
damaged property is valued, will be governed by the Act, Federal law,
and New Mexico law, but only to the extent that New Mexico law is not
pre-empted by Federal law.
Comment: In lieu of the proposed formula, one commenter suggested
FEMA pay per acre ($10,000 per acre) to be used to replant and rebuild
loss.
FEMA Response: FEMA appreciates the suggestion for a payment
formula based on acreage. FEMA attempted to streamline the process by
offering the formula presented in the IFR and understands there can be
advantages to formulas to better assist claimants in receiving prompt
payment. Given the challenges with the specific formula in the IFR and
the unique concerns of the impacted communities because of the heavily
forested areas and personal, subsistence, and business uses of the
forest and vegetation, FEMA is removing the 25 percent formula from
this section of the regulation. However, FEMA is looking at ways to
better streamline the claims process in response to other comments and
is considering offering payment formulas based on acreage such as the
one suggested by one of the commenters to claimants. Any such type of
formula would provide claimants with the option to either leverage that
formula with their claim or submit documentation detailing their
specific damages.
Comment: Another commenter stated that landowners should be allowed
to request wages as compensation for reforestation efforts on their
land because of the lack of contractors to assist in the area.
FEMA Response: Claimants seeking compensation for their own work or
the work of those they hire for reforestation efforts can claim this
expense under this paragraph. FEMA does not believe further edits to
the regulatory text are required for claimants to seek this
compensation.
Comment: Commenters also commented on limiting compensation where
the costs may be covered by another Federal program. Most commenters
suggested FEMA remove this limitation, stating claimants should not be
required to use other Federal programs, with some raising concerns
those Federal programs may not have sufficient funding to cover the
losses associated with the Fire. One commenter stated that FEMA must be
[[Page 59752]]
responsible for identifying other Federal programs and help claimants
receive other identified funding in a timely manner to ensure they do
not lose out on the Act's funding based on available funding that they
may otherwise never receive.
FEMA Response: Section 296.21(c) of the IFR states that
compensatory damages may be awarded for the ``cost of reforestation or
revegetation not covered by any other Federal program.'' This language
has caused confusion with commenters as interpreting it to require
claimants to first apply with other Federal programs. FEMA does not
require claimants to apply to other Federal programs associated with
reforestation and/or revegetation. Rather, the language was intended to
clarify that, where the claimant has received payment from another
Federal program, FEMA will only be able to compensate for reforestation
and/or revegetation under the Act for those costs not covered already
in the payment received from the other Federal program. This avoids a
duplication of payment for the same damage. Claimants have the option
of seeking assistance from other Federal programs for reforestation and
revegetation, filing for compensation under the Act, or pursuing both
other Federal program and compensation under the Act. The language in
Sec. 296.21(c) is simply to clarify that FEMA cannot duplicate payment
but can provide additional payment to cover actual compensatory damages
for reforestation and revegetation. As explained above, FEMA is
coordinating with other Federal agencies to ensure data sharing and
better communication between programs. FEMA has engaged with and
continues to engage with the Small Business Administration, the
Department of Agriculture, and other Federal agencies to help
facilitate coordination of the assistance available to claimants and
the impacted communities. Consistent with the Act's requirements in
section 104(g), FEMA is in consultation with other Federal agencies,
and State, local, and Tribal authorities to ensure the efficient
administration of the claims process to include ways to ensure
claimants have the information they need regarding Federal programs
available to them.
Comment: Commenters also sought clarification on the distinctions
between claims for reforestation and revegetation and subsistence or
business loss. A commenter wrote that many claimants used trees for
subsistence resources and asked for clarification regarding whether
trees could be considered subsistence resources based on the language
of the IFR.
FEMA Response: As explained in the IFR, FEMA limited compensation
for trees and other landscaping to 25 percent of the pre-Fire value of
the structure and lot. This approach was generally consistent with the
approach taken in the Cerro Grande Fire Assistance process. As
explained in the IFR, the 25 percent limitation did not apply to
business losses for timber, crops, and other natural resources under
Sec. 296.21(d). In response to commenter concerns and confusion
regarding the application of this formula, FEMA is revising this
paragraph in the Final Rule to eliminate references to the 25 percent
formula as the Cerro Grande formula is not appropriate given the
geographic, economic, and cultural distinctions between that area and
the areas impacted by this Fire. The Final Rule allows for compensatory
damages for the cost of replacement of destroyed trees and other
landscaping. Compensation for business loss and subsistence resources
continue to be compensated at 100 percent. FEMA further notes that the
definition of ``subsistence resources'' in Sec. 296.4 of the Final
Rule includes firewood or other natural resource gathering, timbering,
or agricultural activities undertaken by the claimant without financial
renumeration. This definition should encompass the loss of trees as
subsistence resources. The edits made to Sec. 296.21(c)(2) of the
Final Rule are sufficient to address the commenters' concerns and
modify the claims process to more appropriately address the needs of
the claimants and communities impacted by this Fire.
3. Comments on Sec. 296.21(c)(3) Decrease in Value of Real Property
Comment: Several commenters recommended FEMA delete the requirement
that claimants demonstrate the value of the real property was
permanently diminished as a result of the Fire. Two commenters
recommended FEMA revise the language to ``significantly'' or ``long-
term.''
FEMA Response: FEMA agrees that it will be difficult to demonstrate
the real property value is permanently diminished given the size and
scope of the Fire as well as the types of damages caused to real
property in this area. As discussed above, the Hermit's Peak/Calf
Canyon Fire impacted communities that are less densely populated and
more heavily forested than the Cerro Grande Fire. These undeveloped
areas may not be able to easily establish a permanent diminution in
value as a result of the Fire. FEMA is removing the term
``permanently'' from Sec. 296.21(c)(3) in the Final Rule and is
rewriting this paragraph to read that the claimant can establish that
the value of the real property was significantly diminished long-term
as a result of the Hermit's Peak/Calf Canyon Fire. This change
addresses the commenters' concerns regarding their ability to prove
property values were permanently diminished while also still requiring
some demonstration of a significant diminution in property value that
is long-term in nature. The change in the Final Rule balances the need
to compensate claimants for actual compensatory damages with the
challenges of demonstrating a loss of property value where the claimant
does not sell the property.
Comment: Commenters raised specific concerns in documenting the
diminution of property value, noting real estate sale amounts are not
available in public records in New Mexico and recommending FEMA develop
a method to compensate for real property claims using local appraisers,
insurance records, and tax assessments.
FEMA Response: FEMA understands these concerns and will be
developing tools to assist claimants with this process. The regulatory
text does not require revision as the process for demonstrating this
injury can be better addressed in tools developed for claimants to
accompany Claims Office policy and procedures.
Comment: Some commenters sought the inclusion of intrinsic value in
this loss calculation.
FEMA Response: Generally, FEMA's calculation of damages, including
how damaged property is valued, will be governed by the Act and Federal
law and, to the extent it is not pre-empted by Federal law, New Mexico
law.
Comment: One commenter stated the loss calculation would increase
if neighboring homes were not also rebuilt.
FEMA Response: FEMA recognizes that not every property owner will
file a claim or seek to rebuild on their property. Claimants receiving
payment for their real property are not required to rebuild and FEMA
cannot require property owners to do so. Claimants may provide
information on how the lack of rebuilding in their area is impacting
their property value when filing a claim under this paragraph.
Comment: Another commenter suggested FEMA provide more than two
years to be able to claim the loss of property value. The commenter
stated ``for those of us who are not going to sell our property in the
next two years, how
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are we going to claim the loss in value of our property due to the fire
and flood? I believe that the regulation should contemplate more than
[two] years to be able to claim this loss.''
FEMA Response: As explained above, some deadlines in the rule are
beyond FEMA's control. The Act requires claimants submit their Notice
of Loss no later than November 14, 2024, two years from the date the
IFR is published. FEMA has built in extensions of this timeline for
good cause, recognizing the realities of the Fire's impact. Sections
296.34 and 296.35 below establish a process for notifying FEMA of
injuries that are not referenced in the initial Notice of Loss. In
Sec. 296.35, the IFR allows claimants to reopen a claim no later than
November 14, 2025 if they sold their real estate and wished to present
a claim for decrease in the value of real property. Additionally,
claimants may request compensation for a decrease in the value of real
property if they can demonstrate the value of the real property was
significantly diminished long-term as a result of the Fire pursuant to
changes made to this section in the Final Rule.
Comment: Several commenters suggested FEMA incorporate language
regarding water rights into this paragraph because water rights are
treated as property rights in New Mexico and a claimant should be
permitted to submit a claim for the decrease in value of a water right.
FEMA Response: Claimants can file a claim for damages regarding
water rights under the current language of this section and no changes
are required in the Final Rule. Specifically, the current regulatory
language regarding real property can be read to include water rights
attached to that real property.
4. Comments on Sec. 296.21(c)(4) Subsistence
Comment: Commenters raised questions about how damages would be
defined and calculated under this paragraph. One commenter stated
claimants in the area tend to practice self-sustainability in addition
to using the land for business purposes and asked that FEMA further
define on how losses under this would be calculated. Another commenter
wrote ``FEMA needs to build in as much flexibility as possible for
compensating future claims related to lost subsistence. The restoration
of certain subsistence resources is difficult to predict, and the
services may be permanently lost in certain cases.'' Comments were also
received on the appropriate timeline for when these resources can
reasonably be expected to return to the level of availability that
existed prior to the Fire. Some commenters suggested that FEMA
determine a date of five years as the timeline by which subsistence
resources can be expected to return to the level of availability that
existed before the Fire while at least one commenter felt that five
years was not a sufficient period of time.
FEMA Response: FEMA recognizes the challenges associated with
calculating damages for subsistence. FEMA anticipates consulting
experts with respect to subsistence resource claims to ensure the
damages calculations address the reasonable cost of replacing these
resources and the timeline for when these resources can reasonably be
expected to return to the level of availability that existed prior to
the Fire. FEMA is looking at ways to better streamline the claims
process in response to other comments and is considering offering
payment formulas for subsistence. Any such type of formula would
provide claimants with the option to either leverage that formula with
their claim or submit documentation detailing their specific damages.
Comment: Some commenters suggested that income losses be considered
part of subsistence losses. A commenter suggested that the regulations
acknowledge that subsistence resources can also be the primary source
of revenue and income for impacted individuals and businesses.
FEMA Response: FEMA disagrees with the commenter. As defined at
Sec. 296.4, ``subsistence resources'' include ``activities undertaken
by the claimant without financial renumeration'' and losses involving
revenue and income are better addressed as business loss.
Comment: Other commenters sought compensation for ongoing costs for
rent, food, energy, and other resources needed to maintain a
subsistence lifestyle both in the immediate and long-term. One
commenter suggested FEMA fully cover the recovery costs necessary to
restore agricultural systems and damages and mitigation costs related
to water quality, water rights, and soil health impairments for
household and subsistence uses.
FEMA Response: FEMA recognizes that the loss of subsistence
resources can result in the need to obtain substitute resources in the
cash economy. The current IFR allows for the costs of obtaining
substitute resources in the cash economy to be considered compensatory
damages. Other Federal and/or State programs may also address some of
the immediate costs such as rent raised by commenters. To the extent
the agricultural system and related costs constitute a subsistence
resource (i.e., one for which the claimant receives no financial
renumeration), it can be considered under a subsistence resource claim.
To the extent such a system and related costs are for financial
renumeration, a claim can be filed for damages as a business loss. As
explained above, claimants can file a claim for damages regarding water
rights under the current language of the regulation and no changes are
required in the Final Rule. Specifically, the current regulatory
language regarding real property can be read to include water rights
attached to that real property.
Comment: Several commenters on this paragraph focused on the need
for firewood and other subsistence resources, with one commenter
requesting vouchers for firewood for the next five to ten years or
until the forests have regrown to support subsistence firewood
requirements.
FEMA Response: The IFR includes firewood gathering as a subsistence
resource that can be compensable. Claimants can seek compensation for
firewood under the subsistence resources paragraphs of the regulation
and, where firewood may have been sold by the claimant, under the
business loss paragraph of the regulation.
5. Comments on Physical Infrastructure (New Sec. 296.21(c)(5))
Comment: Several commenters suggested FEMA incorporate language
into the regulation clarifying the availability of compensation for
damages to physical infrastructure. Two commenters recommended FEMA
specifically incorporate guidance on acequias in the Final Rule to help
alleviate challenges for claimants. Another commenter suggested
language be added to this paragraph to include physical infrastructure
such as irrigation infrastructure, acequias, and the loss of use of
irrigation water rights appurtenant to the land with which other
commenters agreed.
FEMA Response: Consistent with the Act at section
104(d)(4)(A)(iii), FEMA is adding paragraph (c)(5) to Sec. 296.21 to
address physical infrastructure damage. This paragraph clarifies that
claimants may seek compensation for the damage or destruction of
physical infrastructure that may include damage to irrigation
infrastructure such as acequia systems. This addition is consistent
with the Act and incorporating this language better reflects the unique
challenges faced by the communities impacted by the Fire. As explained
above, claimants can file a claim for damages regarding water
[[Page 59754]]
rights under the current language of the regulation and no changes are
required in the Final Rule.
I. Comments on Sec. 296.21(d) Business Loss
Comment: Some commenters raised questions about the types of
damages that would be considered as business losses, from opportunities
to seek other business ventures to compensating for lost opportunity,
agricultural loss, future business loss, lost income from landowner tag
use or national forest permits, and future lost income.
FEMA Response: In paragraph (d), FEMA details the types of damages
generally considered eligible for compensation. This list, however, is
not all inclusive and FEMA will review each claim on a case-by-case
basis to determine whether the loss is eligible for compensation under
the Act. Claimants should submit all claims associated with loss or
damages resulting from the fire for review and consideration.
Comment: Two commenters suggested compensation for economic
development for the areas impacted by the Fire.
FEMA Response: As explained above, economic development can be
speculative and a claimant seeking compensatory damages for loss of
economic development would need to be able to demonstrate such loss was
a result of the Fire. The IFR currently provides the types of actual
compensatory damages that are compensable under the Act, but that list
is not all-inclusive. Claimants seeking compensation for actual
compensatory damages not specifically listed in the regulation can
still submit a claim for compensation under the Act. For this type of
claim, claimants should consider how these damages would be considered
actual compensatory damages for injuries resulting from the Fire
consistent with the Act. FEMA does not believe changes to the
regulatory text are required in the Final Rule for claimants to seek
this type of compensation if they can demonstrate the loss and that the
loss resulted from the Fire.
Comment: One commenter suggested FEMA cover damages and mitigation
costs related to water quality and water rights impacts to businesses,
including agricultural producers.
FEMA Response: Businesses may file claims for damages associated
with water rights as part of claims associated with damages to real
property under that paragraph and/or under business loss.
Comment: Some commenters asked how FEMA would calculate business
losses and specifically loss of business income given the economic
challenges presented by the COVID-19 pandemic. Commenters generally
stated that FEMA consider the time period prior to the pandemic, but
also to consider other factors such as prior fires impacting the area.
FEMA Response: FEMA understands the challenges regarding the
appropriate timeline for consideration of business loss calculations
given the COVID-19 pandemic and prior disasters. FEMA must also
consider the programs available to businesses during those periods and
the financial resources those programs may have provided to businesses.
Claimants seeking compensation should present what they believe is a
reasonable period of time to demonstrate their income and business
losses resulting from the Fire. FEMA anticipates future policy and
procedure documents will provide examples to help claimants with this
type of compensation request.
Comment: Commenters also asked about the types of businesses that
are covered under the Act. One comment stated the statutory
construction of the Act allows for reimbursement of business loss for
nonprofit organizations.
FEMA Response: The current definition of ``injured person''
includes ``other non-Federal entity'' and that terminology encompasses
non-profit organizations. While FEMA understands the importance of non-
profit organizations in the relief process, the agency believes the
current definition sufficiently encompasses all types of for-profit and
non-profit entities and those entities can seek damages for business
loss.
Comment: Two commenters asked about the eligibility for business
losses for those communities that were not in the direct area of the
Fire but suffered losses as a result of the Fire. In prioritizing these
claims, a commenter asked FEMA to first consider claims from claimants
with actual fire and flood damage, but then consider business loss for
claimants where the State closed off areas during the Fire.
FEMA Response: Unlike disaster declarations that cover a specific
geographic area, the Act covers all injured parties that suffered
injuries as a result of the Fire. Claimants seeking compensation for
their business losses should file a claim demonstrating their loss was
a result of the Fire for consideration. Regarding prioritization, FEMA
is amending Sec. 296.13 to specifically clarify the prioritization
required under section 104(d)(1)(A)(ii) of the Act that requires FEMA
to place priority on claims submitted by injured parties that are not
insurance companies seeking payment as subrogees. FEMA will work to
ensure that all claims are reviewed in an expeditious and fair manner.
Comment: Finally, a commenter asked questions about the
reforestation damages formula and its application to business losses
for revenue received from cutting Christmas trees on their property.
FEMA Response: As explained in the IFR, business losses are
distinct from reforestation losses and a formula developed for
reforestation would not be applied to those losses. Timber, crops, and
other natural resources were listed under business losses in paragraph
(d). With the updates made to paragraph (c)(2) above, FEMA has removed
the 25 percent reforestation formula from the regulation. Business
losses are not subject to a specific formula as part of compensation
under the regulation.
J. Comments on Sec. 296.21(e) Financial Loss Generally
Comment: Commenters raised questions about the types of financial
losses to be covered under the Act and the eligible claimants for
financial losses. One commenter suggested FEMA clarify how claimants
can be compensated for the increased cost of homeowner and business
insurance, stating these additional expenses will be ongoing for
decades. Another commenter suggested FEMA cover unforeseen financial
costs associated with evacuations.
FEMA Response: In paragraph (e), FEMA details the types of damages
generally considered eligible for compensation under financial loss.
This list, however, is not all inclusive and FEMA will review each
claim on a case-by-case basis to determine whether or not the loss is
eligible for compensation under the Act. Claimants should submit all
claims associated with financial loss for review and consideration.
Comment: One comment stated the statutory construction of the Act
allows for reimbursement of financial loss for nonprofit organizations.
FEMA Response: The current definition of ``injured person''
includes ``other non-Federal entity'' and that terminology encompasses
non-profit organizations. While FEMA understands the importance of non-
profit organizations in the relief process, the agency believes the
current definition sufficiently encompasses all types of for-profit and
non-profit entities and
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those entities can seek damages for financial loss.
Comment: One commenter made several specific suggestions in their
comment seeking funding for public transportation and increased county
staff salaries and fringe benefits.
FEMA Response: As explained above, FEMA details the types of
damages generally considered eligible for compensation under financial
loss in this paragraph in the IFR. This list, however, is not all
inclusive and FEMA will review each claim on a case-by-case basis to
determine whether or not the loss is eligible for compensation under
the Act. Claimants should submit all claims associated with business
loss for review and consideration. FEMA reminds claimants that they
must demonstrate that the financial loss was a result of the Fire. FEMA
does not believe changes to the regulatory text are required in the
Final Rule for claimants to seek financial losses if they can
demonstrate these losses were a result of the Fire.
Comment: Two commenters wrote that FEMA should provide funding to
allow for economic redevelopment and stimulus activities under business
and/or financial loss.
FEMA Response: As explained above, economic development can be
speculative and a claimant seeking compensatory damages for loss of
economic development would need to be able to demonstrate such loss was
a result of the Fire. The IFR currently provides the types of actual
compensatory damages that are compensable under the Act, but that list
is not all-inclusive. Claimants seeking compensation for actual
compensatory damages not specifically listed in the regulation can
still submit a claim for compensation under the Act. For this type of
claim, claimants should consider how these damages would be considered
actual compensatory damages to compensate claimants for injuries
resulting from the Fire consistent with the Act. FEMA does not believe
changes to the regulatory text are required in the Final Rule for
claimants to seek this type of compensation if they can demonstrate the
loss and that the loss resulted from the Fire.
1. Comments on S
[…truncated; see source link]Indexed from Federal Register on August 29, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.