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reimbursement of an individual or nongovernmental entity for the cost of removing debris from his own property.

(e) Any salvage value of debris or wreckage cleared under an application for public assistance shall be deducted from the Federal reimbursement to the applicant for expenses actually incurred for such clearance of debris and wreckage.

§ 2205.56 Community disaster loans.

(a) The Administrator may make a community disaster loan, to any local government which may suffer a substantial loss of tax and other revenues as a result of a major disaster, and has demonstrated a need for financial assistance in order to perform its governmental functions.

(b) A community disaster loan may be approved in either the fiscal year in which the disaster occurred or the fiscal year immediately following that year: Provided, however, That only one such loan may be approved. This loan, if approved, will be used to carry on such local governmental functions as existed prior to the major disaster.

(c) To obtain a community disaster loan, the local government must submit a loan request through the Governor or his authorized representative. The loan must be justified on the basis of need and shall be computed as the difference between the estimate of receipts of tax and other revenues, considering the effect of the major disaster, and the predisaster estimates of receipt of tax and other revenues used to make up the annual operating budget for the fiscal year in which the disaster occurred. This loan request will be prepared by the affected local government and certified as reasonable by the Governor or his authorized representative. If the Administrator determines that the projected loss is substantial and that the projected revenue loss is consistent with Federal damage estimates, he may approve a loan up to the amount of projected loss or 25 percent of the annual operating budget for the fiscal year in which the major disaster occurred, whichever is the lesser. Prior to the approval of any community disaster loan, the local government must agree in writing that as soon as its actual revenues for the fiscal year covered by its projections are known, it will compare such actual revenues with the figures projected previously and will immediately repay any portion of the loan

which is in excess of the amount of such a loan that would have been made on the basis of actual revenues received.

(d) Such loans shall bear interest at a rate not less than (1) a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest one-eighth of 1 per centum, plus (2) such additional charge, if any, toward covering other costs of the program as the Administrator may determine to be consistent with its purposes.

(e) No loan made under this section shall be for a period more than three years, unless otherwise approved by the Administrator.

(f) To the extent that revenues of the local government during the three full fiscal years period following the disaster are insufficient, as a result of the major disaster, to meet the operating budget of the local government, including additional disaster-related expenses of a municipal operating character, repayment of all or any part of such community disaster loan shall be cancelled. In its request for such cancellation, the local government shall include copies of the operating budgets for the three full fiscal years preceding the disaster year and will provide explanation of any major increases or changes to their normal operating budget.

(g) Any community disaster loans including cancellations made under this section shall not reduce or otherwise affect any grants or other assistance under the Act or these regulations. § 2205.57

Grants for removing timber from privately owned lands. Removal of timber damaged by a major disaster from privately owned lands may be eligible for Federal assistance.

(a) An action plan shall be prepared by the State to tailor the cleanup and timber salvage operation to fit the specific situation, including at least the following:

(1) Priorities in the approval of work shall be established to guide efforts to areas where fire, pest, and wildlife hazards are concentrated.

(2) An appropriate limitation shall be placed on the degree of cleanup to be approved.

(3) Approved work practices and a scale of acceptable unit costs (per acre or otherwise) shall be established, if feasible.

(b) Inspection of the areas to be cleared shall be made by State and Federal representatives to provide a valid basis for approval of work to be done. In those cases where work has already been started or completed, the inspection is to determine a reasonable basis for approving or disapproving such work. Inspection reports shall include a complete description of the land to be cleared and of the eligible work and an estimate of the salvage value as well as the estimated cost of such work.

(c) Considerations in determining public interest under this section shall include threats to life and property, and possible flood hazards.

(d) Considerations in determining eligible costs under this section shall include:

(1) Claims for reimbursement shall be subject to verification on the basis of inspections and audits of completed work.

(2) Any applicable insurance recoveries and any salvage value of all timber removed or to be removed are to be considered and deducted from the costs for approved work. If the individual property owner elects to burn or otherwise dispose of the damaged timber instead of salvaging it, an estimated net value of potential salvage shall be established by the State and Federal representatives. If they cannot agree, the Regional Director shall make the determination, and his decision will be final.

(3) Costs for construction of temporary roads approved by the Regional Director as necessary for access to or salvage of damaged timber are eligible. § 2205.58 Protection of the environment.

(a) No action taken or assistance provided pursuant to sections 305, 306, or 403 of the Act, or any assistance provided pursuant to sections 402 or 419 of the Act that has the effect of restoring facilities substantially as they existed prior to the disaster in conformity with current applicable codes, specifications, and standards, shall be deemed a major Federal action significantly affecting the quality of the human environment within the meaning of the National Environmental Policy Act of 1969 (83 Stat. 852). Major Federal actions significantly affecting

the quality of the environment are those actions which require Environmental Impact Statements in accordance with section 102(2)(c) of the National Environmental Policy Act.

(b) Environmental clearances may be required for permanent replacement projects, including grants-in-lieu under § 2205.54 that do not have the effect of restoring facilities substantially as they existed prior to the disaster in conformity with current applicable codes, specifications, and standards. However, minor relocations to restore facilities essentially to the same design and capacity that existed prior to the disaster shall not be deemed major Federal actions.

(c) In every major Federal action involving Federal disaster assistance under the Act, the Regional Director shall determine whether or not the quality of human environment may be significantly affected thereby. In any case where affirmative determination may result, the Regional Director shall consult with the Administrator or his staff to arrange for compliance with section 102, National Environmental Policy Act.

§ 2205.59 Minimum standards for public and private structures.

As a condition of a disaster loan or grant made under the provisions of the Act, the recipient applicant shall agree that any repair or construction to be financed therewith shall be in accordance with applicable standards of safety, decency, and sanitation and in conformity with current locally applicable codes, specifications, and standards, and shall furnish such evidence of compliance with this section as may be required by the Regional Director. If compliance with such locally applicable codes, specifications, and standards in effect prior to the major disaster clearly will not result in a safe and usable facility, the Administrator may authorize additional work as appropriate. As a further condition of any loan or grant made under the provisions of the Act, the State or local government shall agree that the natural hazards in the areas in which the proceeds of the grants or loans are to be used shall be evaluated. The State or local government shall also agree that appropriate action shall be taken to mitigate such hazards, including safe land-use and construction practices, in accordance with standards prescribed by the Administrator, after ade

quate consultation with the appropriate elected officials of general purpose local governments.

§ 2205.60 Time limitations.

(a) Project applications shall be submitted within 90 days, or a lesser period if so prescribed by the Regional Director, following the date of the President's declaration of a major disaster. If the circumstances of the disaster are such as to make immediate detailed damage surveys and reports by local/State/Federal agencies impractical the Regional Director may, if the State so requests, extend this time limitation.

(b) Federal assistance as the result of a major disaster provided under sections 305, 306, 402, 403, and 419 of the Act shall begin with the President's declaration of a major disaster and, with the following exceptions, shall terminate upon expiration of these prescribed time periods:

Initiation Completion deadline deadline

(1) Debris clearance..... 30 days. 180 days. (2) Emergency measures.. .do... Do. (3) Permanent restorative ----.do................... 18 months.1 projects.

1 These time limitations apply to categorical grants and to grants involving flexible funding under sections 402(f) and 419 of the Act. The Regional Director may require an applicant to submit a completion schedule for his approval.

(c) Exceptions:

(1) Based on extenuating circumstances or unusual project requirements clearly beyond the control of the applicant and the direct recipient of the Federal assistance, the Regional Director may extend any of these time periods, not to exceed 6 months on a project-byproject basis.

(2) Based on his determination that such action is warranted, the Administrator may extend any of the time periods prescribed by this section or completion dates prescribed above.

(d) The Regional Director may impose lesser time limits for completion of work under paragraphs (a) (1), (2), and (3) of this section if considered appropriate.

(e) When an applicant fails to make a timely start of work approved under sections 305, 306, 402, 403, or 419 of the Act, the Regional Director shall review the project approval and may withdraw Federal funding.

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As used in this subpart:

(a) "Financial assistance" means any form of loan, grant, guaranty, insurance, payment, rebate, subsidy, disaster assistance loan or grant, or any other form of direct or indirect Federal financial assistance, other than general or special revenue sharing or formula grants made to States.

(b) "Financial assistance for acquisition or construction purposes" means any form of Federal financial assistance which is intended in whole or in part for the acquisition, construction, reconstruction, repair, or improvement of any publicly or privately owned building or mobile home, and for any machinery, equipment, fixtures, and furnishings contained or to be contained therein.

(c) "Building" means a walled and roofed structure, other than a gas or liquid storage tank, that is fully enclosed and affixed to a permanent site.

(d) "Community" means a State or political subdivision thereof which has zoning and building code jurisdiction over a particular area having special flood hazards. Unincorporated communities or private non-profit medical care facilities which may be otherwise eligible for Federal disaster assistance but do not fulfill the above definition must meet the flood insurance requirements of these regulations and must be sponsored by an applicant (community) which fulfills this definition in cases when the provision of the Flood Disaster Protection Act applies.

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property eligible for Federal reimbursement under the Act. This exemption includes eligible emergency work under: (i) Subpart B (Emergencies); (ii) Subpart C (Fire Suppression), and; (iii) §§ 2205.45, 2205.53, 2205.54, 2205.55, 2205.56, and 2205.57 of Subpart D (Major Disasters), of this part.

(2) Federal financial assistance on any State-owned property that is covered by an adequate State policy of self-insurance approved by the Federal Insurance Administrator.

(3) Federal financial assistance under Title II of the Act.

§ 2205.64 Applicability.

(a) Federal financial assistance for permanent work on buildings in an area identified by the Federal Insurance Administrator as having special flood hazards unless exempted above, is subject to the full restrictions and limitations imposed by the Flood Disaster Protection Act of 1973 for all project applications approved for such buildings in accordance with the following:

(1) Effective March 2, 1974, if the Federal Insurance Administrator has identified the areas having special flood hazards in a community in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, any building and contents not covered by flood insurance for the full insurable value or the maximum amount of insurance available, whichever is the lesser, is not eligible for Federal financial assistance.

(2) For all project applications approved after June 30, 1975, if the Federal Insurance Administrator has identified an area in a community as having special flood hazards and the community is not participating in the flood insurance program under the National Flood Insurance Act of 1968, restorative work as the result of disaster damage to buildings in a special flood hazard area is ineligible for Federal financial assistance.

(3) In the case of subparagraph (1) or (2) of this paragraph, any building may become eligible for Federal financial assistance, if the community concerned within six months after the date of the Federal Damage Survey Report qualifies for and enters the flood insurance program; obtains and maintains the necessary flood insurance policy for the entire useful life of the assisted project, as determined by the Regional Director; and

provides FDAA with written evidence thereof.

(4) Flood insurance is required in connection with obtaining Federal disaster assistance grants for permanent restorative work within an identified flood-hazard area, even if a flood had not occasioned the major disaster declaration. If the applicant replaces a building outside of the special flood hazard area, Federal financial assistance for eligible permanent restorative work will not be denied for failure to insure or failure of the community to participate in the flood insurance program.

(b) Where permanent repair, replacement, or relocation is involved, floodproofing not required by locally applicable codes, specifications, and standards shall be accomplished at the owner's expense.

(c) The Regional Director will work closely with the State Coordinating Offcer, State and local governments, and the field staff of the Federal Insurance Administration to ensure that the provisions of this part for special flood hazard areas are considered in the processing and approval of project applications under § 2205.7. In addition, the Regional Director will require compliance with the provisions in this part in issuing mission assignments for direct Federal assistance under § 2205.8 whenever property subject to the provisions of the Flood Disaster Protection Act of 1973 is involved.

(d) For any State-owned building not covered by an approved State policy of self-insurance, the Regional Director shall require proof of adequate flood insurance covering proposed permanent restorative work eligible for reimbursement under the Act.

(e) When an eligible applicant for permanent restorative work to buildings damaged by a disaster provides proof of flood insurance to obtain Federal funding, he makes a commitment to continue the flood insurance for the useful life of the eligible restorative work, as determined by the Regional Director. For those buildings on which the eligible applicant is delinquent on flood insurance commitments, the Regional Director shall suspend any future Federal assistance until such delinquency is eliminated.

(f) When a State has been approved by the Federal Insurance Administrator as a self-insurer, the Regional Director shall determine the amount of self-insurance applicable to any building damaged

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The following categories of Federal disaster assistance are excluded from the requirements to obtain and maintain such insurance as is required by section 314 of the Act, and this subpart:

(a) Emergency assistance provided under section 305 or 306, of the Act.

(b) Assistance otherwise eligible under section 402 or 419 of the Act for any State-owned property that is covered by an adequate State policy of self-insurance approved by the Administrator.

(c) Assistance under section 402 or 419 of the Act for any property for which insurance is not reasonably available, adequate, and necessary, including but not limited to: Roads, streets, bridges and other highway facilities, traffic controls, parking meters, drainage channels and debris basins, dikes and levees, pumping stations, and utility distribution systems.

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(b) No such assistance shall be approved unless the applicant has provided assurances, acceptable to the Regional Director, that any insurance required under these regulations will be obtained and maintained.

(c) Approval of otherwise eligible project applications may be deferred by the Regional Director for not to exceed six months to permit the applicant to provide such assurances referred to in paragraph (b) of this section. The Administrator, when he deems necessary, may extend the time for submission of such assurances by the applicant.

(d) No applicant for assistance under sections 402 or 419 of the Act shall receive such assistance for any property or part thereof for which he has previously received assistance under the Act unless insurance required under section 314 of the Act and these regulations has been obtained and maintained with respect to such property.

(e) Insurance requirements prescribed in this subpart shall apply equally to private non-profit facilities which receive assistance under section 402(b) of the Act. Private non-profit organizations shall submit necessary documentation and assurances pursuant to this subpart through the appropriate applicant. § 2205.69 Type of insurance.

Assurances by the applicant under this subpart to obtain reasonably available, adequate, and necessary insurance shall be required only for the type or types of hazard included in the declaration of the major disaster in which the damages occurred. The Regional Director shall not require greater types and extent of insurance than are certified to him as reasonable by the appropriate State Insurance Commissioner responsible regulation of such insurance.

§ 2205.70 Extent of insurance.

for

Prior to approval of assistance under section 402 or 419 of the Act to replace, restore, repair, reconstruct, or construct any property for which insurance is required under this subpart, the applicant shall provide assurances acceptable to the Regional Director that he will obtain and maintain reasonably available, adequate, and necessary insurance to protect against future loss to the property. Such insurance must protect against loss to the property and not solely to that portion which was damaged or destroyed by the major disaster.

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