[Federal Register: February 24, 2005 (Volume 70, Number 36)]
[Rules and Regulations]               
[Page 9181-9203]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24fe05-14]                         


[[Page 9181]]

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Part III





Department of Homeland Security





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Federal Emergency Management Agency



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44 CFR Part 208



National Urban Search and Rescue Response System; Maximum Pay Rate 
Table, National Urban Search and Rescue Response System (US&R); Interim 
Final Rule and Notice


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 208

RIN 1660-AA07 (formerly RIN 3067-AC93)

 
National Urban Search and Rescue Response System

AGENCY: Federal Emergency Management Agency (FEMA), Emergency 
Preparedness and Response Directorate (EP&R), Department of Homeland 
Security (DHS).

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule standardizes the financing, administration 
and operation of the National Urban Search and Rescue Response System, 
a cooperative effort of the Department of Homeland Security, 
participating State emergency management agencies and local public 
safety agencies across the country. This rule addresses the 
relationship between Sponsoring Agencies \1\ of Urban Search & Rescue 
(US&R) Task Forces and DHS and also funding for preparedness and 
response activities, including the acquisition of equipment and 
supplies and training.
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    \1\ Sponsoring Agencies are State or local government agencies 
that have signed Memoranda of Agreement with DHS to organize and 
manage US&R Task Forces.
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    Concurrently we \2\ are publishing as a Notice in this issue of the 
Federal Register a Maximum Pay Rate Table on which we also request 
comments.
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    \2\ Throughout the preamble to this rule the terms ``we'' and 
``our'' refer to and mean the Department of Homeland Security. 
``You'' refers to the reader.

DATES: This interim rule is effective February 24, 2005. We invite 
comments on this interim rule and the Maximum Pay Rate Table published 
separately today as a Notice in this issue of the Federal Register. We 
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will accept comments on both until April 11, 2005.

ADDRESSES: Mail: When submitting comments by mail, please send the 
comments to the Rules Docket Clerk, Office of the General Counsel, 
Federal Emergency Management Agency, 500 C Street, SW., room 840, 
Washington, DC 20472. To ensure proper handling, please reference RIN 
1660-AA07 and Docket No. DHS-2004-0010 on your correspondence. This 
mailing address may also be used for submitting comments on paper, 
disk, or CD-ROM.
    Hand Delivery/Courier: The address for submitting comments by hand 
delivery or courier is the same as that for submitting comments by 
mail.
    Viewing Comments: You may view comments and background material at: 
http://www.epa.gov/feddocket or http://www.regulations.gov. You may 
also inspect comments in person at the Office of the General Counsel, 
Federal Emergency Management Agency, 500 C Street, SW., room 840, 
Washington, DC 20472.

FOR FURTHER INFORMATION CONTACT: Michael Tamillow, Federal Emergency 
Management Agency, Emergency Preparedness and Response Directorate, 
Department of Homeland Security, 500 C Street, SW., room 326, 
Washington, DC 20472, (202) 646-2549, or (e-mail) 
mike.tamillow@dhs.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Federal Emergency Management Agency (FEMA) published a proposed 
rule, National Urban Search and Rescue Response System, on December 18, 
2002, 67 FR 77627-77640 (Proposed Rule). On March 1, 2003, FEMA became 
a part of the Emergency Preparedness and Response Directorate (EP&R), 
Department of Homeland Security (DHS). The National Urban Search and 
Rescue Response System is now a program in FEMA under the EP&R 
Directorate.
    This preamble and Interim Rule reflect certain decisions made 
regarding comments that FEMA received on the Proposed Rule, and changes 
resulting from FEMA's integration into the Department of Homeland 
Security. The process for creating and updating the Maximum Pay Rate 
Table (Table), which establishes the maximum rates that DHS will pay 
for certain medical, engineering, canine handling and backfill 
services, is described in Sec.  208.12. The Maximum Pay Rate Table, 
which was mentioned but not published in the Proposed Rule, is 
incorporated in the Interim Rule, and published concurrently with this 
Interim Rule as a Notice. Because the Maximum Pay Rate Table was not 
published previously and will become a part of the National Urban 
Search and Rescue Response System final rule, we are asking for public 
comment both on the Table and the Interim Rule.
    Section 303 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (Stafford Act), 42 U.S.C. 5144, authorizes the President 
of the United States to form emergency support teams of Federal 
personnel to be deployed in an area affected by a major disaster or 
emergency. The President delegated this function to the Director of the 
FEMA under Executive Order (E.O.) 12148. Under E.O. 13286 of February 
28, 2003, the President amended E.O. 12148 to transfer the FEMA 
Director's delegated authority to the Secretary of Homeland Security, 
and under Homeland Security Delegation No. 9100, delegated the 
Secretary's authority under Title V of the Homeland Security Act of 
2002, which includes the Stafford Act, to the Under Secretary for 
Emergency Preparedness and Response (EP&R).
    Section 306(a) of the Stafford Act authorizes the President (as 
delegated to the Under Secretary for EP&R) to accept and use the 
services or facilities of any State or local government, or of any 
agency, officer or employee thereof, with the consent of such 
government, in the performance of his responsibilities under the 
Stafford Act. Section 306(b) of the Stafford Act authorizes the 
President to appoint and fix the compensation of temporary personnel 
without regard to U.S. Code provisions governing appointments in the 
competitive service. Section 403(a)(3)(B) of the Stafford Act provides 
further that the President may authorize Federal agencies to perform 
work on public or private lands essential to save lives and protect 
property, including search and rescue and emergency medical care, and 
other essential needs. Under section 621(c) of the Stafford Act, the 
Secretary may accept and use the services of State or local 
governments, and use voluntary services by individuals or organizations 
as needed.
    FEMA established the National Urban Search & Rescue Response System 
(System or US&R) under the authorities cited. The System provides 
specialized lifesaving assistance during major disasters or emergencies 
that the President declares under the Stafford Act. US&R operational 
activities include locating, extricating and providing on-site medical 
treatment to victims trapped in collapsed structures, victims of 
weapons of mass destruction events, and when assigned, performing 
incident command or other operational activities.
    Created in consultation with State emergency management agencies 
and local public safety agencies, the System is built around a core of 
Sponsoring Agencies prepared to deploy US&R Task Forces \3\ immediately 
and initiate US&R operations at DHS's direction. Members of the Task 
Forces, also referred to as ``System Members,'' may respond as

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part of Joint Management Teams (JMT) \4\ or other overhead or technical 
teams, or as individual resources.
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    \3\ The US&R System comprises 28 Task Forces in 19 States. A 
full Task Force consists of 70 System Members, three deep (designed 
for 210 members) specially trained and equipped to find, extricate, 
and provide initial medical care to victims of collapsed buildings, 
weapons of mass destruction, as well as to perform other assigned 
duties.
    \4\ A Joint Management Team is a multi-disciplinary group of 
National Disaster Medical System (NDMS), Urban Search and Rescue 
(US&R) and other specialists combined to provide operational, 
planning, logistics, finance and administrative support for US&R and 
NDMS resources, and to provide technical advice and assistance to 
State and local governments.
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    The Task Forces are staffed primarily by local fire department and 
emergency services personnel specially trained and experienced in 
collapsed structure search and rescue operations, incident management, 
and other emergency operational activities. On activation by DHS, 
members of the US&R Task Forces, US&R System Members of Joint 
Management Teams, and other overhead or technical teams, operate as 
Temporary Excepted Federal Volunteers.\5\
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    \5\ The term ``Temporary Excepted Federal Volunteer'' means that 
a System member's status is temporary for the period of Federal 
activation, excepted from Civil Service rules regarding Federal 
employment, Federal for purposes of tort claim protection and 
Federal ``workers' compensation'', and a volunteer in that DHS does 
not pay the individual directly, but reimburses the Sponsoring 
Agency for the System Member's services.
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    The National Urban Search and Rescue Response System presently 
comprises 28 US&R Task Forces in 19 States. Typically, a State agency 
or local public safety agency (Sponsoring Agency) sponsors each of the 
Task Forces. While the Sponsoring Agencies are solely responsible for 
the administrative management of their respective Task Forces, many 
Sponsoring Agencies invite other public safety agencies and other 
entities in their vicinity to contribute personnel and other resources 
to the Task Force. These public safety agencies and other entities that 
enter into agreements with the Sponsoring Agency to contribute 
personnel and other resources are Participating Agencies. In certain 
cases, individuals who are not employed by a Sponsoring Agency or 
Participating Agency \6\ become members of a Task Force as Affiliated 
Personnel.\7\
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    \6\ A Participating Agency is a State or Local Government, non-
profit organization, or private organization that has executed an 
agreement with a Sponsoring Agency to participate in the National 
US&R Response System.
    \7\ Affiliated Personnel are individuals not normally employed 
by a Sponsoring Agency or Participating Agency and individuals 
normally affiliated with a Sponsoring Agency or Participating Agency 
as volunteers.
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    DHS provides financial support in the form of grants or Cooperative 
Agreements \8\ (Grants) to each of the Sponsoring Agencies under the 
disaster preparedness and training authorities of the Stafford Act. The 
Sponsoring Agencies use these Grants to train Task Force personnel, 
maintain a state of readiness and to acquire necessary equipment and 
supplies. DHS awards and administers Grants under 44 CFR 13. In return 
for this financial support, each Task Force must be available for 
deployment as a Federal resource when DHS activates it.\9\ Task Forces 
also must maintain minimum training requirements that DHS 
prescribes.\10\
    Separate non-standardized memoranda of agreement (MOA), which were 
individually negotiated at different stages in the System's 
development, currently govern the relationship between DHS and each of 
the Sponsoring Agencies. In addition, we require the Sponsoring 
Agencies to enter into separate Cooperative Agreements on forms that 
our Office of Financial Management prescribes. As the System has 
matured, the participants have concluded that it is desirable to 
standardize these relationships through a set of comprehensive 
regulations. We developed the Interim Rule with the assistance of the 
National Urban Search and Rescue Advisory Committee and its Legal 
Issues Working Group.
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    \8\ Cooperative Agreements are similar to grants, but differ 
from grants in the amount of government cooperation and involvement 
in the implementation of the agreement.
    \9\ The Task Forces also respond to disasters and emergencies in 
their home states as State resources. DHS does not normally and 
directly reimburse Sponsoring Agencies of the Task Forces for the 
costs that Task Forces incur when deploying in their home states, 
although in a State deployment, Task Forces may use equipment that 
they have purchased with DHS grant funds and Federal property that 
is in their custody. Subpart C of this rule does not cover in-state 
deployment of US&R resources. However, Federal reimbursement for the 
cost of an in-state deployment may be available through DHS's Public 
Assistance Program under regulations published at 44 CFR part 206. 
In addition, the Office of Foreign Disaster Assistance of the U.S. 
Agency for International Development (USAID) often uses the services 
of certain Task Forces to deliver humanitarian assistance abroad 
under agreements to which DHS is not a party. The rule does not 
affect the relationships between USAID and the Sponsoring Agencies 
of the Task Forces.
    \10\ In addition to participation on Task Forces, participants 
in the System (referred to as System Members) may also be called 
upon to serve as members of Joint Management Teams or other overhead 
or technical teams.
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    Adoption of the Interim Rule enables DHS to standardize our 
agreements with the Sponsoring Agencies. Following adoption of the 
final rule, we will ask each of the Sponsoring Agencies to enter into a 
new, streamlined MOA as well as a Preparedness Cooperative 
Agreement,\11\ as described in subpart B of the rule, and a Response 
Cooperative Agreement,\12\ as described in subpart C of this rule. 
These new, standardized agreements will document our relationship with 
the Sponsoring Agencies.\13\ Upon the effective date of the Interim 
Rule, if a conflict exists between a provision of the rule and an 
existing MOA, the provision of the rule will control.
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    \11\ DHS enters into a Preparedness Cooperative Agreement with 
each Sponsoring Agency to provide Federal funding to develop and 
maintain System resource (personnel, equipment and supplies) 
capabilities and readiness for operations, including training.
    \12\ When DHS activates a Task Force it provides Federal funding 
for the Task Force's response under the terms of the Response 
Cooperative Agreement.
    \13\ Following adoption of the final rule, DHS expects to 
develop a National US&R Response System Directive Manual, which will 
contain system policies and explain other Federal regulations, and 
will govern the operation of the National US&R Response System. The 
Directive Manual will be updated periodically as needed.
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References in the Preamble to Parts, Subparts or Sections

    Throughout the preamble and rule, references to part, subpart, or 
sections (as ``section'' or ``Sec.  '') are to parts, subparts or 
sections of this rule unless specifically cited as a section of an Act, 
e.g., section 306 of the Stafford Act, or document other than this 
rule.

Organization of the Interim Rule

    The Interim Rule is divided into four subparts. Subpart A addresses 
the organization of the National US&R Response System, explains the 
relationship among the various components of the system, incorporates 
certain provisions of other regulations and provides for sanctions if 
US&R regulations and directives are violated.
    Subpart B describes the process through which we provide grant 
funds to the Sponsoring Agencies to maintain Task Force readiness. 
Sponsoring Agencies use these grant funds to administer the Task 
Forces, provide initial and recurrent training,\14\ and acquire and 
maintain a uniform cache of equipment and supplies.
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    \14\ Sections 306(a) and 621(c) of the Stafford Act, 42 U.S.C. 
5149(a), 5197(c), authorize DHS to federalize members of US&R Task 
Forces to participate in preparedness activities. We periodically 
federalize US&R teams to participate in DHS-sanctioned training 
exercises, also known as mobilization exercises. During these 
periods, they are not ``Activated'' within the meaning of Sec.  
208.2 of the rule and, therefore, the provisions of subpart C do not 
apply to DHS-sanctioned training exercises. Funding for 
participation in DHS-sanctioned training exercises may be available 
under Sec.  208.24(b) of the rule.
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    Following adoption of the final rule, we will ask each Sponsoring 
Agency to enter into a Preparedness Cooperative Agreement with us. In 
addition, from time to time, DHS will purchase and distribute equipment 
and supplies directly to each Task Force.

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    Subpart C addresses the deployment of System Members, either as 
part of a Task Force, a Joint Management Team, or another overhead or 
technical team, as a Federal resource, and the reimbursement of the 
Sponsoring Agencies for the costs that they incur as a result of these 
deployments. This subpart also explains the Response Cooperative 
Agreement that we will ask each Sponsoring Agency to sign following 
adoption of the final rule.
    Subpart D establishes the procedures by which Sponsoring Agencies 
may present claims to DHS for reimbursement of costs incurred when we 
use System Members as Federal resources, including the timeframes in 
which the Sponsoring Agencies must present such claims, and procedures 
for appeals, in writing and submitted within 60 days after receipt of 
written notice of DHS's determination of the initial appeal. The 
timeframes and procedures for appeals are set out in Sec.  208.62, 
Appeals.
    A glossary of defined terms that we use throughout the Interim Rule 
and in subpart A appears in Sec.  208.2. A sub-glossary of defined 
terms used 208.32 (subpart C) appears in that subpart.

Sectional Analysis

    Section 208.33 sets forth the principles under which we will 
reimburse Sponsoring Agencies for participating in Alerts \15\ and 
Activations.\16\ Subsection (a) expresses our policy that participation 
in Alerts and Activations be as cost neutral as possible to Sponsoring 
Agencies and Participating Agencies. This commitment is critical to 
avoid putting local fire departments, which are the predominant 
sponsors of the Task Forces, at risk for the cost of providing 
emergency services outside of their respective jurisdictions. Payments 
are subject to 44 CFR part 13, particularly Sec. Sec.  13.21 (payment) 
and 13.22 (allowable cost). 44 CFR 13.22 incorporates various Office of 
Management and Budget (OMB) circulars that address allowable cost. 
However, if there is a conflict between this rule and 44 CFR part 13 or 
the OMB Circulars, this rule controls.
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    \15\ Alert means the status of a System resource's readiness 
when triggered by an Alert Order indicating that DHS may Activate 
the System resource.
    \16\ Activation means the status of a System resource placed at 
the direction, control and funding of DHS in response to, or in 
anticipation of, a presidential declaration of a major disaster or 
emergency under the Stafford Act.
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    Section 208.39 explains how we will compensate Sponsoring Agencies 
for personnel costs during Activations. When we deploy System Members, 
either as part of a Task Force, or as part of a Joint Management Team 
or other overhead or technical team, we appoint them into Federal 
service as Excepted Temporary Federal Volunteers and they work under 
our direction and control for the duration of the deployment. However, 
System Members who are regularly employed by a Sponsoring Agency or 
Participating Agency retain their concurrent employment relationship 
with their usual employers.\17\ The maintenance of this concurrent 
employment relationship is a fundamental principle of the National US&R 
Response System, and dates from the inception of the System. We adopted 
the principle after consultations with the States, local governments 
and public safety employee organizations and we intend it to prevent 
System Members from suffering a break in their service to the usual 
employer while away on the Federal deployment. While on a Federal 
deployment, these System Members receive pay and benefits from their 
usual employers during the Federal deployment just as they would if 
they were not Activated.
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    \17\ In some cases, the relationship between the individual and 
the Sponsoring Agency or Participating Agency is a contractual 
relationship or a volunteer relationship. These regulations do not 
create a common law employment relationship between an individual 
and a Sponsoring Agency or Participating Agency where none otherwise 
exists.
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    Section 208.39(a) of this part provides that we will reimburse the 
Sponsoring Agency for personnel costs that result from the Activation 
and are consistent with this rule. The Sponsoring Agency is responsible 
for reimbursing the personnel costs of its Participating Agencies under 
the provisions of Sec.  208.39.
    Section 208.39(b) of this part speaks to how we compensate 
Sponsoring Agencies for overtime costs that might not have been 
incurred but for the Federal deployment. Section 7(k) of the Fair Labor 
Standards Act (section 7(k)) exempts public safety organizations from 
paying their employees overtime under certain circumstances. As 
interpreted by Department of Labor regulations and court decisions, the 
section 7(k) exemption does not apply unless the employee in question 
is trained in fire protection, has the legal authority and 
responsibility to engage in fire suppression, is employed by a public 
safety agency engaged in fire suppression and actually engages in fire 
suppression at least 80 percent of the time.
    After reviewing Department of Labor regulations relating to section 
7(k) and relevant court decisions, we are uncertain whether the rescue 
activities undertaken by Sponsoring Agencies of the US&R Task Forces 
are analogous to fire suppression. We also note that some System 
Members will not fall within the section 7(k) exemption because they 
are not regularly employed in fire suppression. It would be unfair to 
compensate these individuals at one overtime rate, when fellow System 
Members, who may be volunteers or part-time fire service employees, are 
compensated at another overtime rate. For these reasons, DHS instructs 
the Sponsoring Agencies to disregard the section 7(k) exemption when 
calculating its reimbursement for personnel costs, and reimburses 
Sponsoring Agencies for regular wages and overtime wages as described 
in Sec.  208.39(d), (e) and (f).\18\ This instruction will not create a 
windfall for Sponsoring Agencies and Participating Agencies because 
they cannot charge DHS for personnel costs in excess of those that they 
actually and normally incur.
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    \18\ Section 208.40(b) addresses reimbursement for various 
differentials paid by Sponsoring Agencies.
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    Section 208.39(c) of this part establishes a uniform 24-hour tour 
of duty during the Federal deployment. DHS will reimburse the 
Sponsoring Agencies for 24 hours of pay for each day that a System 
Member is deployed, from his or her arrival at the Point of Assembly 
\19\ until his or her release from duty, which may be the airport or 
Air Force Base to which the Task Force returns, or at the Task Force's 
original Point of Assembly,\20\ or some other point. This reimbursement 
procedure is known as ``portal to portal'' pay.
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    \19\ Certain activated System Members will not report to a Point 
of Assembly, but rather will be instructed to travel to the incident 
location directly from their home or regular place of work. These 
individuals are Activated when they leave their home or regular 
place of business and we will adjust the ``portal to portal'' pay of 
these individuals accordingly.
    \20\ The Point of Assembly is the location where a Task Force 
assembles before departure in response to an activation order.
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    We are not establishing a different rate of reimbursement for meal 
periods or scheduled sleep periods. Once deployed, all System Members 
must be available for immediate response twenty-four hours a day during 
the entire deployment period. Meal periods and sleep periods will be 
interrupted if System Members are needed to engage in vital lifesaving 
activities, just as they are in the firehouse.
    Search and rescue professionals whom we expect to respond on a 
moment's notice at any time during a 24-hour period should be 
compensated for 24 hours of work. Activated System Members often work 
the first 24 to 48 hours of the Activation continuously, as

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this initial period involves packaging the Task Force for transport, 
loading and unloading equipment, attending briefings, receiving and 
adjusting to changes in operational objectives, establishing the base 
of operations and initiating the search for live victims. Once the 
search begins, we control Task Force activities during the entire 24-
hour period and Task Forces must be available for immediate response at 
any time.
    Section 208.39(g) provides for the reimbursement of Backfill \21\ 
expenses. The National US&R Response System depends upon the voluntary 
participation of public safety agencies. We recognize that these public 
safety agencies may be short-handed when some of their personnel are 
away on a Federal deployment. If a public safety agency ordinarily 
Backfills a position in situations where a regular employee is 
unavailable for a period of time similar to that spent on a US&R 
deployment (e.g., Family and Medical Leave, participation in an 
extended mutual aid assignment, injury or disability), then the public 
safety agency may bill DHS for the cost of Backfilling the position for 
the period that the regular employee is away on a Federal deployment. 
However, we will only reimburse for the incremental overtime salary and 
benefit expenses associated with the replacement employee. We will not 
reimburse the Backfilling agency for the regular salary and overtime 
cost of the replacement employee because the public safety agency would 
have to pay this cost if the Federal deployment had not occurred.
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    \21\ Backfill means the personnel practice of temporarily 
replacing a person in his or her usual position with another person.
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Public Comments on the Proposed Rule

    During the comment period on the Proposed Rule, which closed on 
February 3, 2003, we received a number of comments. We summarize the 
comments and our response to them in the materials that follow.
    Usage of Terms in the SUPPLEMENTARY INFORMATION. We received 
comments concerning the use of the terms ``Task Force Member'' and 
``System Member'' in the SUPPLEMENTARY INFORMATION to the Proposed 
Rule. In the SUPPLEMENTARY INFORMATION to the Proposed Rule, we used 
the term ``Task Force Member'' to denote individuals who respond as 
part of the National US&R Response System. However, while most 
participants in the System respond as part of a US&R Task Force, 
participants in the System may also be called upon to serve on Joint 
Management Teams and other overhead or technical teams. As a result, 
the term ``System Member'' is a more accurate and comprehensive term to 
describe individuals who participate in System activities, and the term 
``Task Force Member'' is best used to describe a System Member who is 
Activated as part of a Task Force. We have corrected the usage of these 
terms in the SUPPLEMENTARY INFORMATION to the Interim Rule.
    In certain parts of the SUPPLEMENTARY INFORMATION to the Proposed 
Rule, we also used the term ``US&R Task Force,'' rather than 
``Sponsoring Agency,'' to denote the agency or entity with which DHS 
has entered into legal and financial agreements with respect to the 
US&R Task Forces. We have corrected the usage of these terms in the 
SUPPLEMENTARY INFORMATION to the Interim Rule.
    Finally, in the SUPPLEMENTARY INFORMATION to the Proposed Rule, we 
described the reimbursable period during an Activation as ending when a 
System Member returns to the pre-deployment staging area. This 
description conflicts both with standard terminology and the reality of 
System deployments. A more accurate description of the duration of the 
reimbursable period during an Activation is set forth in the Interim 
Rule.
    Eligibility for Reimbursement and Coverage Under Federal Statutes 
While Traveling to and from the Point of Assembly. One Task Force 
commented on the time period that we propose to pay System Members, 
namely from arrival at the Point of Assembly until his or her release 
from duty, which may be the airport or Air Force Base to which the Task 
Force returns, or at the Task Force's original Point of Assembly, or 
some other point. Noting that some of its members live 2 or more hours 
away from the Point of Assembly, the Sponsoring Agency reimburses 
members from the time that they are alerted to the time that they 
return home (including travel mileage).
    Response: This question has two aspects: (1) Reimbursement for time 
spent traveling to and from the Point of Assembly, and reimbursement 
for travel mileage while traveling to and from the Point of Assembly; 
and (2) consideration of time spent traveling to and from the Point of 
Assembly as ``in the course of employment'' for the purposes of 
workers' compensation (for injuries sustained) and tort liability (for 
civil wrongs or harms caused) during that travel.
    Reimbursement: This issue is related to the Fair Labor Standards 
Act (FLSA), which establishes a minimum hourly wage for employees and 
requires employers to pay overtime wages for hours worked above the 
statutory maximum. It is also related to the Portal-to-Portal Act of 
1947, which requires that time spent ``walking, riding, or traveling to 
and from the actual place of performance of the principal activity or 
activities which such employee is employed to perform'' is not 
compensable time under the FLSA unless it is compensable by contract, 
custom, or practice. The general Federal rule regarding travel mileage 
is: commuting to and from work, that is, between permanent residence 
and permanent duty station, is a personal expense. The employee is 
expected to be at work; how the employee chooses to get there is 
entirely his or her own business. 27 Comp. Gen. 1 (1947).
    There are exceptions to the general rule if the travel is not 
ordinary and is spent outside the workday to and from job assignments. 
Examples include substantial travel to an emergency job assignment at a 
location outside the normal workplace, or the employer requires the 
employee to be ``on call'' to respond to emergency job assignments. A 
corollary of the ``substantial travel'' exception is that the travel is 
noncompensable if the amount of time spent traveling is minimal.
    On reconsideration of our position, we will reimburse certain 
travel costs and time spent traveling to the Point of Assembly when a 
System Member responds to an Activation and must travel a considerable 
distance or time, as determined by DHS on a case by case basis, to 
reach the Point of Assembly. Otherwise, we will follow the general rule 
regarding noncompensable travel, including minimal travel. When we 
activate a Task Force or other System resource, timely assembly of the 
System Members is critical, and under those circumstances warrants our 
exception to the general rule. This exception will apply only to 
Activations, and will not apply, for instance, to Alerts, to travel 
home after return to the Point of Assembly, or to travel required for 
training, which we consider to be ordinary noncompensable travel.
    In the Course of Employment: Ordinary travel to and from a fixed 
workplace is generally not within the scope of employment for workers' 
compensation purposes, under the ``going and coming'' rule. Under the 
rule, employees with a fixed workplace are covered by workers' 
compensation only when they are on their employer's premises, or 
performing an assignment required by the employer. One of the

[[Page 9186]]

exceptions to the general rule of going and coming is travel to and 
from job assignments, where the employer compensates the employee for 
the time or expense of the travel. Consistent with that exception and 
our intent to reimburse travel costs and time spent traveling to the 
Point of Assembly in response to an Activation, on a case-by-case basis 
we will meet our obligations regarding workers' compensation claims 
that arise out of injuries that System Members incur while traveling to 
a Point of Assembly in response to an Activation, but for no other 
purpose.
    Definitions. We received several comments on the definitions in 
Sec.  208.2, and made the following changes:
    We changed the term ``Memorandum of Understanding'' to ``Memorandum 
of Agreement.''
    The definition for ``Equipment Cache List'' now reads: ``The DHS-
issued list that defines:
    ``(1) The equipment and supplies that US&R will furnish to 
Sponsoring Agencies; and
    ``(2) the maximum quantities and types of equipment and supplies 
that a Sponsoring Agency may purchase and maintain with FEMA funds.''
    The definition for ``Participating Agency'' reads: ``A State or 
Local Government, non-profit organization, or private organization that 
has executed an agreement with the Sponsoring Agency to participate in 
the National US&R Response System.''
    One Task Force expressed concern regarding the definitions of 
``Program Manager,'' ``Program Office,'' and ``Project Manager.'' We 
have decided to retain the definitions of ``Program Manager'' and 
``Program Office'' as they are. Currently, the Program Manager is the 
Chief of the US&R Section, which is part of the Response Division of 
FEMA, under the Emergency Preparedness and Response Directorate of DHS, 
and the Program Office is the US&R Section. However, these entities may 
change as the organizational structure of DHS evolves. We will notify 
the Sponsoring Agencies if we designate a different Program Manager or 
Program Office. We have deleted the definition of ``Project Manager'' 
from the definitions set forth in Sec.  208.22, since that terms 
appears nowhere else in the Interim Rule.
    We have added the following definition: ``Program Directive means 
guidance and direction for action to ensure consistency and 
standardization across the National US&R Response System.'' This 
replaces the term ``System Order'' in the proposed rule with ``Program 
Directive'' in the interim rule.
    One commenter recommended that DHS include a definition of 
``Affiliated Member.'' The equivalent term is defined at Sec.  208.32 
as ``Affiliated Personnel.''
    Section 208.6, System Resource Reports. One commenter noted that 
Sponsoring Agency, Participating Agencies and System Members are to 
cooperate fully in audits, investigations, studies and evaluation, and 
asked, ``who pays for salary cost associated with gathering and 
processing the information?''
    DHS provides funding for program management in the Preparedness 
Cooperative Agreement to support administrative activities, including 
the salary costs for gathering and processing System resource reports.
    Workers' Compensation and Other Benefit Costs. Several Sponsoring 
Agencies commented that workers' compensation and other benefit costs 
incurred by Sponsoring Agencies as the result of an injury or death to 
a System Member are not reimbursable costs. As set forth in Sec.  
208.11 and explained in the Supplementary Information, DHS will appoint 
System Members into Federal service, concurrent with those individuals' 
local employment, to secure protection for such employees under the 
Federal Employees' Compensation Act and the Federal Tort Claims Act. If 
a System Member sustains an injury, that System Member may file a claim 
for compensation under the Federal Employees' Compensation Act. Because 
the System Member's Federal appointment is concurrent with his or her 
local employment, the System Member may also be eligible for 
compensation under his or her local workers' compensation system. In 
that case, the System Member may collect either the incremental 
difference between Federal benefits and local benefits, or may collect 
local benefits in full, depending on whether the local benefits may be 
offset by the Federal payment to the System Member.
    As explained in Sec.  208.40, DHS will reimburse the Sponsoring 
Agency for the workers' compensation insurance premium costs associated 
with the time during Activation. However, any local benefit payment is 
not a reimbursable expense, because DHS (through the U.S. Department of 
Labor) provides coverage under the Federal Employees Compensation Act, 
and because we are prohibited under our current statutory authority 
from reimbursing Sponsoring Agencies for the costs of benefit payments.
    Death or Disability in Line of Duty. One Participating Agency asked 
whether a System Member killed or disabled while Activated would be 
entitled to benefits through the agency's municipal pension program, 
and whether the death or injury would be considered in the line of 
duty. We intend that System Members remain fully eligible for local 
benefits during Federal Activation, and that, as a result, any death or 
injury during Activation should be considered to have occurred while 
the System Member was acting in the scope of employment.
    Federal Death Benefits. One Sponsoring Agency asked how a ``Federal 
death benefit,'' if incurred, would be calculated. The ``Federal death 
benefit'' for System Members comprises two separate components: (1) A 
benefit payment under the Federal Employees Compensation Act; and (2) a 
payment under the Public Safety Officers' Benefit Act. The death and 
injury benefits available under each of those statutes are determined 
using formulas set forth in those statutes.
    Voluntary Contribution to Municipal Pension Plans. One Sponsoring 
Agency asked whether contributions to a municipal pension plan made 
voluntarily by System Members during an Activation, rather than 
contributions made by the System Member's employer under the terms of a 
collective bargaining agreement or other arrangement, are reimbursable 
by DHS. Voluntary employee contributions, as opposed to mandatory 
employer contributions, are not reimbursable expenses.
    Contributions to the Pension Plan Based on Overtime. One Sponsoring 
Agency commented that under its benefits plan, salary is defined as the 
total actual fixed cash compensation, including overtime, and 
contributions to its pension plan are based on this total salary, 
including overtime. The Sponsoring Agency asked whether contributions 
to the pension plan based on overtime pay received during Activation 
reimbursable under this rule. Under Sec.  208.40(a)(2), these 
contributions are reimbursable.
    Cost Sharing. One Task Force commented that Sec.  208.23(f) refers 
to ``Cost Sharing'' but makes no distinction between ``hard share,'' 
i.e., cash contributions, and ``soft share,'' i.e., other value-added 
benefits provided by the Sponsoring Agency. We do not presently require 
Sponsoring Agencies to provide a cost share, either hard or soft, for 
preparedness or response funding. Please note that section 208.22(f) 
provides for cost sharing if it were required in the future. If we were 
to institute a cost-sharing requirement in the future, we would clearly 
indicate in the Cooperative Agreement whether

[[Page 9187]]

such cost share would be ``hard'' or ``soft.''
    Equipment Ownership. Several Sponsoring Agencies commented that the 
Proposed Rule does not address ownership or disposition of equipment 
purchased under this program.
    OMB Circulars A-87 and A-110 specify that equipment purchased with 
Federal Grant funds is the property of the grantee. However, title, 
use, management and disposition of equipment purchased under a grant or 
Cooperative Agreement is set out in 44 CFR 13.32, a government-wide 
rule to which DHS adheres. While the Sponsoring Agency has title to any 
equipment purchased with Federal preparedness and response Cooperative 
Agreement funds, DHS reserves the right to transfer title to the 
Federal Government or a third party that we may name, under 44 CFR 
13.32(g). DHS would generally expect to limit its exercise of this 
right to instances when a Sponsoring Agency indicates or demonstrates 
that the Sponsoring Agency cannot fulfill its obligations under the 
Memorandum of Agreement.
    Maximum Pay Rate Table. We received the most number of comments 
concerning the Maximum Pay Rate Table (Table) identified in the 
Proposed Rule. For clarity, we set forth here the applicability of the 
Table and the process we will follow for creating and updating the 
Table.
    Section 208.32 defines the ``Maximum Pay Rate Table'' as ``the DHS-
issued table that identifies the maximum pay rates for selected System 
positions that may be used for reimbursement of Affiliated Personnel 
compensation and Backfill for Activated System Members employed by or 
otherwise associated with a for-profit Participating Agency.'' In that 
same section, ``Affiliated Personnel'' are defined as ``individuals not 
normally employed by a Sponsoring Agency or Participating Agency and 
individuals normally affiliated with a Sponsoring Agency or 
Participating Agency as volunteers.''
    One Sponsoring Agency commented that the Table seemed to contradict 
the principle of cost neutrality set forth prominently in the Proposed 
Rule. However, as defined, the Table applies only to those individuals 
who are not normally employed by a Sponsoring Agency or Participating 
Agency, or whose affiliation with a Sponsoring Agency or Participating 
Agency is as a volunteer; that is, an individual whom the Sponsoring 
Agency or Participating Agency does not normally compensate in any way, 
at any rate.
    The Table sets forth maximum rates for which we will reimburse the 
Sponsoring Agency for compensation paid to those individuals while 
Activated. The Sponsoring Agency may choose to compensate these 
individuals at a higher rate, but we will not reimburse the increment 
above the maximum rate specified in the Table. Likewise, the Sponsoring 
Agency may choose to enter into a Participating Agency agreement with 
the individual's employer, rather than use the individual as an 
Affiliated Personnel, in which case the Table would not apply. 
Consequently, only a Sponsoring Agency's choice to exceed the maximum 
rates set forth in the Maximum Pay Rate Table would result in an 
uncompensated expenditure, and the Table would not violate the 
principle of cost neutrality.
    A number of parties expressed concern that the Table was not 
provided concurrently with the publishing of the Proposed Rule. We 
chose not to delay the Proposed Rule until the Table could be 
developed. We have inserted a new section 208.12, Maximum Pay Rate 
Table, to establish the process for creating, updating and using the 
Table. We are also publishing the Table as a Notice in the Federal 
Register and are asking for comments on both the Interim Rule and the 
Table before publishing the final rule.
    One Sponsoring Agency expressed concern that the rates set forth in 
the Table could not be used with respect to individuals employed by the 
Sponsoring Agency, and not when the individual would serve on the Task 
Force as Affiliated Personnel (e.g., a Sponsoring Agency fire 
department dispatcher affiliated with the US&R Task Force in a non-
dispatcher role as a canine search specialist). Although the Table 
would not necessarily apply to reimbursement for salary and benefits 
for that individual, Sponsoring Agencies may use the rates in the Table 
as a guide for establishing compensation levels for Affiliated 
Personnel.
    Affiliated Personnel. Several commenters noted that the rule can be 
interpreted to preclude the reimbursement of Backfill expenses for 
Affiliated Personnel under Sec.  208.39(g). Those commenters expressed 
concern that, since the highly-trained civilians such as physicians, 
structural engineers and canine handlers are typically Affiliated 
Personnel, reimbursement for Backfill expenses is important to securing 
the participation of these individuals in the System. The restriction 
on Backfill costs for Affiliated Personnel could limit the ability of 
Sponsoring Agencies to recruit and retain these highly trained 
civilians.
    However, the only permissible way to reimburse Affiliated Personnel 
for Backfill costs is through Participating Agencies--neither we nor 
the Sponsoring Agencies have contractual or employment relationships 
with the individuals Backfilling the jobs of Affiliated Personnel. If 
reimbursement for Backfill expenses is a problem for Affiliated 
Personnel, we encourage them to have their employers or professional 
association seek Participating Agency status. Participating Agency 
status is available to private, for-profit organizations under the 
revised definition of ``Participating Agency'' set forth in this 
Interim Rule. (See Definitions, Sec.  208.2, Participating Agency, and 
Sec.  208.12, Maximum Pay Rate Table.) Note, however, that compensation 
costs, for the purposes of reimbursement and Backfill, refer to the 
System Member's actual compensation, or the compensation of the 
individual who Backfills a position (which includes salary and 
benefits, as described in Sec. Sec.  208.39 and 208.40), rather than 
billable or other rates that might be charged for services rendered to 
commercial clients or patients.
    Creating, Updating and Using the Maximum Pay Rate Table. We have 
inserted a new section 208.12 in this rule to establish how we will 
create, update and use the Table to reimburse Affiliated Personnel 
(Task Force Physicians, Task Force Engineers, and Canine Handlers) and 
Backfill for Activated System Members employed by or otherwise 
associated with a for-profit Participating Agency; the Table applies 
only to these named categories. Section 208.12 describes the method for 
determining maximum pay rates using United States Office of Personnel 
Management's (OPM) salary rates, and provides links to OPM's applicable 
salary rate tables and locality pay tables.
    The section provides that DHS will review and update the Table 
periodically (at least annually). DHS is publishing the initial Table 
in the Federal Register as a Notice with request for comments. DHS will 
publish subsequent revisions to the Table as Notices in the Federal 
Register.
    The section further states that a Sponsoring Agency may choose to 
pay Affiliated Personnel at a higher rate, but DHS will not reimburse 
the increment above the maximum rate specified in the Table.
    Resupply and Logistics Costs During a Federal Activation. One 
Sponsoring Agency noted that, under Sec.  208.38, we will not reimburse 
costs incurred for resupply and logistical support during Activation. 
That section states that resupply and logistical support needed

[[Page 9188]]

during Activation are the responsibility of the Joint Management Team 
(JMT). The Sponsoring Agency asked, ``What happens if the Incident 
Management Team [now the JMT] cannot be established?'
    During Activation, we are responsible for resupply and logistics. 
Currently, we accomplish this responsibility through either the JMT, 
which operates in the field, or the Emergency Support Function 9 (ESF-
9),\22\ which operates from the National Emergency Operations Center, 
an emergency coordinating center located at FEMA headquarters. As DHS 
develops and evolves, we may change the names or functions of these 
teams; however, the responsibility for resupply and logistics will 
remain with us. Task Forces should not engage in resupply or logistical 
support during Activation unless coordinated through one of these 
teams. In extraordinary circumstances, e.g., if the Task Force cannot 
make contact with either the JMT or the EST, the Task Force should 
follow the instructions in Sec.  208.44, Reimbursement for other costs. 
Absent such circumstances, we will not reimburse costs incurred for 
resupply and logistical support during Activation.
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    \22\ ESF-9, or Emergency Support Function 9, Urban Search and 
Rescue, is responsible to plan and coordinate the use of Urban 
Search and Rescue assets following an event that requires locating, 
extricating and providing immediate medical treatment of victims 
trapped in collapsed structures. ESF-9 also provides planning and 
coordination of US&R assets when they engage in other disaster-
related assignments.
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    Compensation for Exempt System Members. Several agencies commented 
on the proposed reimbursement for compensation paid to Exempt System 
Members, i.e., System Members who are paid a salary, rather than an 
hourly wage, and are otherwise exempt from the Fair Labor Standards 
Act. One agency commented that reimbursement for Exempt System Members 
should be based on the employees' salary, converted to a 40-hour 
workweek and then paid at that rate on an hourly basis during 
Activation. Another agency commented that the different methods of 
compensation calculation for Exempt and non-exempt System Members will 
result in non-exempt System Members receiving a greater amount of 
compensation during Activation than Exempt System Members, who are 
typically more experienced firefighters holding higher ranks in the 
Sponsoring Agency or Participating Agency. This agency speculated that 
the method of compensation calculation used in the Proposed Rule would 
result in fewer chief officers (who are typically classified as Exempt 
System Members) participating as System Members.
    There are two guiding principles underlying our compensation 
calculation rules: (1) Cost neutrality; and (2) customary and usual 
practice. The compensation calculation system for Exempt System Members 
complies with both of these principles. If an individual is classified 
as an Exempt System Member in his or her regular position with the 
Sponsoring Agency or Participating Agency, then this individual will 
receive compensation on a daily basis, rather than an hourly basis, 
regardless of the number of hours the individual works in a day. The 
rule provides reimbursement to the Sponsoring Agency or Participant 
Agency on this basis--that is, for the amount that the individual would 
have customarily and usually received. If the Sponsoring Agency or 
Participating Agency customarily and usually compensates Exempt System 
Members by paying a salary and overtime, or customarily and usually 
awards compensatory time or another overtime substitute for hours 
worked above a predetermined threshold, then the Sponsoring Agency may 
request reimbursement for the overtime amount, or the liquidated value 
of the compensatory time or other overtime substitute, in accordance 
with Sec. Sec.  208.39(e)(5)(ii) and (iii). In this way, this rule 
abides by the principle of cost neutrality.
    One Sponsoring Agency asked that we examine the feasibility of 
giving Sponsoring Agencies the option of having chief officers 
appointed as Disaster Assistance Employees (DAE) (temporary DHS 
employees) during Activation. In that case, those officers would be 
temporary Federal employees, would probably take a reduction in pay, 
and would take vacation or administrative leave from the Sponsoring 
Agency or Participating Agency for the period of Activation. In turn, a 
DAE appointment might affect their pension and seniority rights. We 
believe that disadvantages of DAE appointments outweigh any benefits 
that chief officers might derive, and that the current language of this 
rule concerning Exempt System Members represents the best general 
practice.
    One Sponsoring Agency asked whether, under Sec.  208.39(e)(3), 
chiefs compensated based on a 56-hour workweek should be converted to a 
40-hour workweek for purposes of calculating reimbursable compensation 
under the rule. This Sponsoring Agency also noted that compensating 
individuals who customarily and usually work a 56-hour workweek, by 
converting their hourly wage rate to a 40-hour workweek, results in 
approximately 40 percent higher costs during Activation. Sponsoring 
Agencies and Participating Agencies that compensate employees based on 
a 56-hour workweek take advantage of the partial overtime exemption set 
forth in section 7(k) of the Fair Labor Standards Act. As explained 
herein, we require that Sponsoring Agencies and Participating Agencies 
disregard the section 7(k) partial exemption in calculating personnel 
costs, and we will reimburse personnel costs based on a 40-hour work 
week, as described in Sec.  208.39 of this rule.
    One Sponsoring Agency notes that the calculation of reimbursable 
personnel costs will place an extra burden on payroll staff, and there 
will most likely be personnel who will be eligible for overtime 
compensation immediately upon Activation since they have already 
exceeded the overtime threshold for that week. We have included an 
administrative allowance in the reimbursement for response costs, found 
at Sec.  208.41, to compensate the Sponsoring Agency for this increased 
burden on payroll staff. We also provide for reimbursement of any 
additional salary and overtime costs in Sec.  208.39(f), e.g., those 
incurred because a System Member is eligible for overtime compensation 
immediately upon Activation.
    Reimbursement for Personnel Costs for Equipment Cache 
Rehabilitation. Under Sec.  208.43, we will reimburse Sponsoring 
Agencies for personnel costs associated with equipment cache 
rehabilitation up to the number of hours specified in the 
Demobilization Order.\23\ One Sponsoring Agency stated that the number 
of hours specified in the Demobilization Order should be an estimate 
only, rather than a fixed limit, and asked whether there is an appeal 
process for the number of hours specified in the Demobilization Order, 
or another mechanism for requesting additional hours based on 
unforeseen circumstances. There is no appeal process for the number of 
hours specified in the Demobilization Order. However, if the Sponsoring 
Agency feels that unforeseen circumstances will prevent it from 
completing its equipment cache rehabilitation within the specified 
number of hours, the Sponsoring Agency should follow the

[[Page 9189]]

procedures in Sec.  208.44 for reimbursement of other costs.
---------------------------------------------------------------------------

    \23\ A Demobilization Order is a DHS communication that 
terminates an Alert or Activation and identifies cost and time 
allowances for rehabilitation.
---------------------------------------------------------------------------

    Reimbursement for Other Costs. Section 208.44 sets a procedure for 
Sponsoring Agencies to follow if the Sponsoring Agency or the Task 
Force believes that it must incur an expense not included in subpart C 
for which it expects to request reimbursement. Section 208.44 requires 
that the Sponsoring Agency request in writing permission from DHS to 
make the expenditure or, if advance permission in writing is not 
possible to obtain, to meet three criteria before making the 
expenditure, including requesting and receiving advance verbal 
approval.
    One agency commented that during an extreme emergency, in 
particular during the initial 24- to 48-hours of an Activation, it can 
be difficult to obtain written or verbal approvals, and that personnel 
authorized to approve expenditures are not available 24 hours a day 
during this period. Moreover, this agency commented that Joint 
Management Teams, in the past, have left requests for resupply 
unanswered for extended periods of time. The agency recommended that we 
empower Task Force Leaders to make procurement decisions.
    We feel that this comment addresses operational problems rather 
than regulatory issues. Many of these problems will be alleviated by 
the construction of the new DHS operations center that will be staffed 
24 hours a day during an Activation, and by assuring that there is at 
least one person on duty in the operations center who holds delegated 
authority to authorize procurements. Moreover, the revised Equipment 
Cache List \24\ provides for the purchase of multiple, back-up methods 
of communication to assure that Task Forces can communicate with the 
operations center under any circumstances. We believe that the rule 
controls the costs associated with Activation and limits duplicative 
procurement without compromising responder safety.
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    \24\ The Equipment Cache List is the DHS-issued list that 
defines: (a) The equipment and supplies that US&R will furnish to 
Sponsoring Agencies; and (b) the maximum quantities and types of 
equipment and supplies that a Sponsoring Agency may purchase and 
maintain with DHS funds.
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    Advance of Funds. Section 208.45 states that we will provide the 
Sponsoring Agency with an advance of funds up to 75 percent of the 
estimated personnel costs of the Activation. Several agencies commented 
that we should increase this amount to 90 percent of the estimated 
personnel costs. These agencies commented that since personnel costs of 
an Activation can exceed $1 million, an advance up to 75 percent of 
that amount still leaves the Sponsoring Agency with approximately 
$250,000 in outlays for personnel costs for which it must wait for up 
to 120 days or more for reimbursement. The financial burden of these 
outlays would be compounded in the event of multiple Activations within 
a relatively short time period.
    We believe that up to 75 percent is the optimal amount for an 
advance of funds because it balances the need for funds against the 
possibility of overestimated funds. As one commenter pointed out, for 
many years we did not provide any advance of funds, and for more recent 
Activations we provided an advance equal to 25 percent of estimated 
personnel costs. The amount ``up to 75 percent'' is a result of our 
examination of personnel cost data from a number of previous 
Activations. It also recognizes the financial burden borne by the 
Sponsoring Agencies in carrying, even temporarily, these additional 
salary costs. However, Activations often last for a shorter period of 
time than we use to calculate the estimated personnel costs for the 
Activation, as was the case recently with Hurricane Isabel when teams 
were activated for fewer than 7 days. As one commenter pointed out, 
some percentage of personnel costs may be questioned and ultimately 
disallowed as a result of the reimbursement review process. For these 
reasons, at this time, we believe that up to 75 percent of estimated 
personnel costs is the best amount for an advance of funds. We expect 
to review Sponsoring Agencies' experience periodically under this 
provision, and will make revisions as warranted.
    Deadline for Submission of Claims. One agency commented that the 
deadline for submission of claims comes too soon after an Activation 
has ended. Currently, Sec.  208.52 specifies that Sponsoring Agencies 
must submit claims for reimbursement within 90 days of the conclusion 
of the Activation. Section 208.52 also states that DHS may extend and 
specify the time limitation upon a written request and justification 
from the Sponsoring Agency. The commenting agency noted that it could 
take many weeks to obtain certain items, often because of 
manufacturers' inventory status. The agency stated that setting a 
deadline of 120 days would obviate the need for a Sponsoring Agency to 
apply for repeated extensions.
    We believe that the 90-day timeframe for submission, with the 
opportunity for Sponsoring Agencies to apply for 30-day extensions, is 
the better policy. In the past, we found that Sponsoring Agencies often 
do not submit claims for reimbursement in a timely manner. This 
tendency interferes with our ability administratively to ``close out'' 
the accounts we set up for each major disaster or emergency, and also 
results in Sponsoring Agencies carrying unreimbursed costs for longer 
periods of time. We believe that it is better to require submission of 
claims for reimbursement within 90 days of the conclusion of the 
Activation, while permitting Sponsoring Agencies to apply for 30-day 
extensions at their option.
    Reevaluation and Potential Revision of the Rule. One agency 
commented that we should provide a date certain for reevaluation and 
potential revision of this rule. The agency believed that providing 
this date certain was important because some provisions of the rule 
will require additional discussion and development, and other issues 
may arise after the rule is implemented. We do not believe that there 
is a need to provide a date certain by which we will reevaluate and, if 
necessary, revise the rule. However, we will work with our State and 
Local Government partners through the National Urban Search and Rescue 
System Advisory Committee and its Legal Issues Working Group to 
evaluate this rule, measure its efficacy, and develop revisions as 
necessary.
    Task Force Leader. One Sponsoring Agency commented that this rule 
should include a definition of the role and responsibilities of the 
Task Force Leader, the highest leadership position on a US&R Task 
Force. The commenting agency stated that ``[t]he Task Force Leader is 
the individual during a deployment who is in control and responsible 
for the entire Task Force, in addition to reporting to FEMA (whether 
the FEMA Emergency Support Team (EST) or the IST [now JMT] the Task 
Force Leader is the individual that the Sponsoring Agency designates to 
represent the Sponsoring Agency both financially and legally while the 
Task Force is deployed.''
    We feel that the roles and responsibilities of the Task Force 
Leader should not be included in the rule. We have developed and 
published a Position Description for the Task Force Leader, and have 
described the roles and responsibilities of the Task Force Leader in 
several operational documents. These descriptions may change over time, 
and we want to retain flexibility by including these descriptions in 
operational documents rather than in the rule. Moreover, different 
Sponsoring Agencies have vested their Task Force Leaders with

[[Page 9190]]

different levels of authority. For these reasons, we have not defined 
the roles and responsibilities of the Task Force Leader in the rule.
    Use of Federally Purchased Equipment for Local Use in Daily 
Operations. One commenter noted that, in the Federalism Summary Impact 
Statement included with the Proposed Rule, we stated that ``Equipment 
and supplies purchased with Federal funds may be used to respond to 
state disasters or emergencies.'' The commenter asked whether the 
intent of the rule was to prevent the use of federally purchased 
equipment for daily operations.
    We intend the System to provide a Federal capability to respond to 
major disasters or emergencies involving structural collapse, weapons 
of mass destruction, or other incidents that the President declares. A 
Sponsoring Agency may use equipment and supplies purchased with Federal 
funds to respond to disasters or emergencies requiring urban search and 
rescue response at the state and local level, and if necessary, to 
repair or replace equipment so used at the Sponsoring Agency's expense. 
However, we do not intend that Sponsoring Agencies use federally 
purchased equipment in routine, day-to-day operations.
    Indirect Costs. One Sponsoring Agency commented on our prohibition 
of reimbursement for indirect costs related to response, and our 7.5 
percent limitation on indirect costs related to preparedness. The 
commenting agency noted that this limitation on indirect costs is 
inconsistent with other FEMA programs and diverges from standard 
Federal indirect cost percentages. The commenting agency stated that 
this limitation could threaten the ability of that Sponsoring Agency to 
remain in the System, stating that the ``work burden formulas 
presuppose economies of scale for a larger, pre-existing agency.''
    We brought this issue to the National US&R Advisory Committee, 
which recommended retention of the indirect costs policy as in the 
proposed rule. We agree. This limitation is not inconsistent with other 
limitations applicable to FEMA programs. Accordingly, we have not 
changed this section. Note that this limitation applies only to 
Preparedness Cooperative Agreements, which apply over the course of at 
least one year and to which indirect cost principles can be applied 
readily. Except as provided in Sec.  208.41, we allow no indirect costs 
under Response Cooperative Agreements. US&R deployments are most often 
short-term, on the order of 10-14 days. Consistent with section 407 of 
the Stafford Act, we will allow the administrative allowance listed in 
Sec.  208.41 of this part in lieu of attempting to establish indirect 
cost rates for short-term deployments.

Administrative Procedure Act Determination

    We are publishing this Interim Rule under the Administrative 
Procedure Act, 5 U.S.C. 553, with our request for public comments. 
Concurrently with publication of the Interim Rule, we are publishing 
the Maximum Pay Rate Table (Table) in the Federal Register as a Notice. 
We published a Proposed Rule, National Urban Search and Rescue Response 
System, on December 18, 2002, 67 FR 77627-77640, and received over 30 
comments from various Task Forces in the National US&R Response System. 
We discuss the comments in the preamble of the Interim Rule, indicating 
where we agree with the comments and have made changes, and also where 
we do not agree with the comments.
    We did not have the Table prepared at the time we published the 
Proposed Rule but received a large number of comments and questions 
about the Table. To provide an opportunity for comment before 
publishing the final rule, and because of the delay between the date of 
the Proposed Rule and the Interim Rule, we request that interested 
parties comment within 45 days of today's publication.
    The National US&R Response System provides a number of public 
services that are unique within the Federal Government. Members are 
experienced and trained professionals highly skilled in the often 
dangerous roles of searching for, extricating and providing initial 
medical care for victims from collapsed buildings, whether collapsed by 
natural or manmade causes. The searching is important to the public to 
ensure that every effort has been made to rescue people still alive 
within a collapsed structure. Members also have an important role in 
finding the bodies of those killed in the collapse, so that victims 
might be identified and returned to grieving families. The tasks 
performed and the dangers inherent in the work benefit other 
firefighters and disaster responders who do not have the specialized 
training and experience of the National US&R Response System Members 
and who are not put at risk by entering the collapsed structures when 
US&R teams are present.
    The Interim Rule is effective today, the date of publication. There 
is an urgent need within the National US&R Response System to 
standardize financial, administrative and operational functions among 
the 28 Task Forces located in 19 States. These needs include codifying 
the relationship between the Department of Homeland Security (DHS) and 
the Sponsoring Agencies of the 28 Task Forces, and standardizing the 
relationships of Sponsoring Agencies with their Participating Agencies 
and Affiliated Personnel. Efforts to standardize the Memoranda of 
Agreement between DHS and the Sponsoring Agencies, and in turn, the 
agreements between the Sponsoring Agencies and Participating Agencies 
and Affiliated Personnel, are essential to the effective functioning of 
the System and must be completed soon to inform, guide and govern all 
System participants uniformly in their respective roles, 
responsibilities and activities.
    In the years since September 11, 2001, Congress has appropriated 
increased funds to US&R for equipment, training, and other measures to 
ensure that each Task Force is fully staffed, trained and available for 
whatever disaster they may be called upon for help. It is imperative 
and urgent that there be full accountability for the funds granted to 
the Sponsoring Agencies, and that there be uniform standards that the 
Sponsoring Agencies can apply in the performance of their US&R 
responsibilities. This rule provides those standards; it is urgent that 
they be in effect as soon as possible.
    The direct effect of this rule is on the 28 Sponsoring Agencies, 
their Participating Agencies, and Affiliated Personnel--a relatively 
small, well-defined universe. The Sponsoring Agencies, the Advisory 
Committee of the National US&R Response System (Advisory 
Committee),\25\ the Working Groups \26\ under the Advisory Committee, 
and others associated with the National US&R Response System have 
frequently and repeatedly requested publication and implementation of 
this rule, which they urgently need to fulfill their obligations to the 
System, themselves and their organizations. As matters of sound policy, 
planning and management for the entire System, it is important to make 
the rule effective upon publication.
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    \25\ The Advisory Committee of the National US&R Response System 
provides advice, recommendations, and counsel on the continuing 
development and maintenance of a National US&R Response System to 
the Under Secretary for Emergency Preparedness and Response.
    \26\ The System has several specialized Working Groups, e.g., 
command and general staff, medical, legal issues, training, etc., 
that provide professional and technical advice on US&R issues to DHS 
through the National Advisory Committee.
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    Good cause exists and it is in the public interest to make this 
Interim Rule

[[Page 9191]]

effective upon publication (and to request comments on the Interim Rule 
and on the Table as published separately today as a Notice). DHS will 
review and evaluate any comments that it receives and will publish the 
final rule at a later date.

National Environmental Policy Act

    44 CFR 10.8(d)(2)(ii) categorically excludes from actions such as 
the preparation, revision, and adoption of regulations, and 
specifically 44 CFR 10.8(d)(2)(xviii)(C), which relates to planning and 
administrative activities in support of emergency and disaster response 
and recovery, including deployment of urban search and rescue teams. 
Accordingly, we have not prepared an environmental assessment or 
environmental impact statement for this rule.

Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866, 58 FR 51735, October 4, 1993, a 
``significant regulatory action'' is subject to OMB review and the 
requirements of Executive Order 12866. Section 3(f) of the Executive 
Order defines ``significant regulatory action'' as one that is likely 
to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or may adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    In determining whether to proceed with the formulation and 
publication of this rule, we considered three alternatives: maintain 
the status quo ante; manage the program through administrative 
directives; and cancel the program.
    Maintain the Status Quo Ante. The National US&R Response System has 
operated since the early 1990s without formal regulations. The first 
ten years or so were formative years with a great deal of flux. Federal 
appropriations were minimal until the events following September 11, 
2001, which led to major changes in planning, operations, management, 
training and funding. Twenty US&R teams responded to the World Trade 
Center and five responded to the Pentagon. After-action evaluations 
showed the need for greater interoperability of equipment, consistency 
in training and operating across the 28 teams, and many other factors 
to permit 28 disparate units in 19 States to perform as a cohesive 
whole. Congress appropriated larger sums to support the program, 
mandating that the program not add new task forces until existing task 
forces were fully equipped and trained. Spurred by the response of 
Congress and the Administration, we redoubled efforts to standardize 
the financing, administration and operation of the National US&R 
Response System.
    Under the status quo ante and the low level of Federal funding, we 
had little leverage to standardize the program. With increased 
appropriations and expanding mission that followed September 11, 2001 
(e.g., response to acts of terrorism and weapons of mass destruction 
events, response to hurricanes), operating without formal regulations 
was no longer tenable. Sound management and responsible stewardship of 
the program demand formal regulations. For these reasons, we rejected 
the status quo ante.
    Management by Administrative Directives. We rejected this 
alternative on grounds that administrative directives do not have the 
force of law, tend to be piecemeal, and do not adequately support our 
need for standardized practices within the US&R program. In contrast, 
the rule will have the force of law and will concisely support our need 
to standardize the financing, administration and operation of the US&R 
program.
    Cancel the Program. The US&R program grew out of the evident need 
to have highly skilled, specially trained and equipped personnel 
swiftly available to search for and extricate victims from collapsed 
buildings, whether from earthquakes and other natural causes, acts of 
terrorism, accidents or other human causes. The need is greater today 
than perceived in the late 1980s and early 1990s. The program has 
garnered a well- and hard-earned recognition of its effectiveness, with 
strong support from Congress, the Administration, and its Sponsoring 
and Participating Agencies. With that continuing support, cancellation 
of the program is not a feasible alternative.
    Interim Rule. We (FEMA) published a Proposed Rule, National Urban 
Search and Rescue Response System, on December 18, 2002, 67 FR 77627-
77640. During the 45-day comment period, we received about 30 comments 
from Sponsoring Agencies, one from a Participating Agency, one from a 
Member of Congress, and none from the public at large. We reviewed the 
comments, accepting some, rejecting some. This preamble and Interim 
Rule reflect the decisions made regarding the comments that we 
received.
    When we published the Proposed Rule, we mentioned, but had not yet 
prepared, the Maximum Pay Rate Table (Table). In order to have that 
part of the rule on which we had received comments go into effect, and 
to obtain public comments on the Table, we elected to publish the rule 
as an Interim Rule, and, concurrently to publish the Table as a Notice, 
with request for comments.
    Economic Significance of the Rule. This rule will not have an 
annual effect on the economy of $100 million or more and is not an 
economically significant rule under Executive Order 12866. The rule 
establishes the relationship between the Sponsoring Agencies of the 
Urban Search & Rescue (US&R) Task Forces and DHS, funding for 
preparedness and response activities, including the acquisition of 
equipment and supplies and training, and the eligibility of Task Forces 
to receive and maintain Federal excess property.
    This interim rule impacts 28 Sponsoring Agencies, 26 of which are 
from local communities, 2 are associated with state universities. All 
of the communities have populations greater than 50,000. Most of the 
Sponsoring Agencies have agreements with Participating Agencies for 
additional support to meet the staffing, equipment and training 
requirements of the National US&R Response System. US&R-related costs 
of Participating Agencies are paid by DHS through the Sponsoring 
Agencies. Similarly, expenses of Affiliated Personnel are reimbursed 
through the Sponsoring Agencies.
    DHS has designed the National US&R Response System to be as cost 
neutral to Sponsoring Agencies as Federal law authorizes. DHS acquires 
equipment and supplies, pays for training, meetings and related travel, 
lodging, and per diem expenses, and attempts to cover Sponsoring 
Agencies' preparedness costs through preparedness Cooperative 
Agreements. When DHS activates a US&R Task Force we reimburse the 
Sponsoring Agency for 100 per cent of its direct eligible costs 
incurred, including overtime and Backfill costs, and indirect costs 
capped at 7.5 percent of direct costs, under the terms of the response 
Cooperative Agreements. Sponsoring Agencies will incur certain 
paperwork burdens and expenses, which are described and quantified

[[Page 9192]]

below in the materials on the Paperwork Reduction Act. We expect that 
our Cooperative Agreements and their associated indirect cost rates 
will cover the eligible costs that the Sponsoring Agencies incur to 
participate in the National US&R Response System.
    Costs to DHS to administer the National US&R Response System 
include the salaries and expenses of an 8-person staff, and the 
indirect staff costs for financial, acquisition, logistics and other 
administrative services provided by DHS and FEMA. Current 
appropriations limit administrative costs to 3 percent of the total 
amount appropriated for US&R.
    FEMA's planning and program guidance for fiscal years 2005 through 
2009 set funding levels of $6.438 million for the National US&R 
Response System, representing the baseline nondisaster-specific budget 
for operating expenses. In the past two years, congressional annual 
appropriations for US&R were $60 million, most of which US&R passed to 
the Sponsoring Agencies pursuant to Cooperative Agreements. FEMA passes 
the amounts appropriated to the Sponsoring Agencies in preparedness 
Cooperative Agreements funded 100 percent by the Federal Government to 
cover planning, training, equipment or other essentials to fulfill the 
US&R mission, which do not impose conditions on the Sponsoring Agencies 
making them economically significant. Nor would Cooperative Agreement 
funding adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities.
    This rule is a significant regulatory action, but not an 
economically significant regulatory action within the definition of 
section 3(f) of Executive Order 12866, and it adheres to the principles 
of regulation of the Executive Order. The Office of Management and 
Budget has reviewed this rule under the provisions of the Executive 
Order.

Regulatory Flexibility Act, 5 U.S.C. 601

    Under the Regulatory Flexibility Act, agencies must consider the 
impact of their rulemakings on ``small entities'' (small businesses, 
small organizations and local governments). The Act also provides that, 
if a regulatory flexibility analysis is not required, the agency must 
certify in the rulemaking document that the rulemaking will not ``have 
a significant economic impact on a substantial number of small 
entities.''
    This rule standardizes the financing, administration and operation 
of the National Urban Search and Rescue Response System (System or 
US&R), which FEMA established under the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act. The System currently comprises 28 
US&R Task Forces in 19 States. A State agency or local public safety 
agency (Sponsoring Agency) typically sponsors a Task Force,\27\ staffed 
primarily by local fire department and emergency services personnel, 
and include Joint Management Teams (JMT) and other overhead or 
technical teams. None of the Sponsoring Agencies are in communities 
with populations fewer than 50,000. The governments of the Sponsoring 
Agencies are urban or State instrumentalities and none qualify as a 
``small governmental jurisdiction'' within the meaning of 5 U.S.C. 
601(5).
---------------------------------------------------------------------------

    \27\ The Task Forces also respond to disasters and emergencies 
in their home states as State resources. DHS does not directly 
reimburse Sponsoring Agencies of the Task Forces for the costs that 
they incur when deploying in their home state, although in a State 
deployment Task Forces may use equipment that they have purchased 
with DHS grant funds and Federal property that is in their custody. 
Subpart C of this rule does not cover in-state deployment of US&R 
resources. However, Federal reimbursement for the cost of an in-
state deployment may be available through DHS's Public Assistance 
Program under regulations published at 44 CFR part 206. In addition, 
the Office of Foreign Disaster Assistance of the U.S. Agency for 
International Development (USAID) often uses the services of certain 
US&R Task Forces to deliver humanitarian assistance abroad under 
agreements to which DHS is not a party. The rule does not affect the 
relationships between USAID and the Sponsoring Agencies of the Task 
Forces.
---------------------------------------------------------------------------

    Some of the Participating Agencies are small businesses, such as 
engineering firms and HMOs. DHS reimburses Sponsoring Agencies for the 
eligible costs that the Sponsoring Agencies incur in reimbursing their 
Participating Agencies. DHS expects Participating Agencies to receive 
full reimbursement for the salaries and expenses of their personnel who 
are participating System Members, indirect costs up to 7.5 percent, per 
diem, travel and related costs when Task Forces activated, and backfill 
expenses.
    DHS has designed the US&R program to be as cost neutral to 
Sponsoring Agencies as Federal law authorizes. When DHS activates a 
US&R Task Force it reimburses the Sponsoring Agency for its direct 
costs incurred, including overtime and Backfill costs, and indirect 
costs capped at 7.5 percent of direct costs. Upon activation, System 
Members become Temporary Excepted Federal Volunteers entitled to the 
benefits of the Federal Employees Compensation Act (FECA) and the 
Federal Tort Claims Act (FTCA). In some instances, State workers' 
compensation benefits exceed those available under FECA, and the 
difference between the State benefits and the Federal benefits may have 
to be borne by the Sponsoring Agency.
    US&R Task Forces also must maintain minimum training requirements 
that DHS prescribes. Under current interpretations by the Department of 
Justice, the FTCA covers System Members during Task Force activations, 
but does not apply to training activities. This lack of FTCA coverage 
during training is a potential liability that a Sponsoring Agency might 
incur, but such a circumstance has not occurred in 15 years of 
experience. DHS is working with the Department of Justice to determine 
what measures DHS could take to provide liability coverage for System 
Members during US&R training events.
    DHS assumes that the professional skills necessary for preparation 
of the reports and records are within the capabilities of the 
Sponsoring and Participating Agencies. DHA further assumes that 
Sponsoring and Participating Agencies incur no extra, unreimbursed 
costs for sound administration and accountability that Federal 
Cooperative Agreements require of any recipient of such awards. We have 
no basis for estimating the expected cost or range of costs per 
impacted Sponsoring or Participating Agency.
    DHS is not aware of any rules that may duplicate, overlap or 
conflict with this rule. In our discussion of E.O. 12866 above, we 
considered several alternatives to this rule, including status quo 
ante, cancellation of the program, management by program directives, 
and this interim rule. None of the alternatives to this rule met DHS 
needs to standardize the financing, administration and operation of the 
US&R System; none provided differing compliance or reporting 
requirements, or clarified, consolidated, or simplified compliance and 
reporting, or exempted any of the Sponsoring Agencies from coverage of 
the rule.
    For the reasons stated, we certify under 5 U.S.C. 605(b) that this 
Interim Rule will not have a significant economic impact on a 
substantial number of small entities and does not apply to this interim 
rule.

Paperwork Reduction Act of 1995

    DHS has determined that the implementation of this rule is subject 
to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520. As the 
Paperwork Reduction Act of 1995 requires and, concurrently with this 
rule, we have submitted a request for Office of Management and Budget 
(OMB) review and approval of a new collection of

[[Page 9193]]

information, which is contained in this rule. The collection of 
information complies with provisions of the Paperwork Reduction Act of 
1995, 44 U.S.C. 3506(c)(2)(A). We invite the general public to comment 
on the collection of information.

Collection of Information

    Title: Urban Search and Rescue Program.
    US&R grant application forms approved by OMB under Control Number 
1660-0025, which expires July 31, 2007, are:
    Form Numbers: SF 424, Application for Federal Assistance; DHS Form 
20-10, Financial Status Report; DHS Form 20-16, Summary Sheet for 
Assurances and Certifications; DHS Form 20-16A, Assurances--Non-
Construction Programs; DHS Form 20-16C, Certifications Regarding 
Lobbying; Debarment, Suspension and Other Responsibility Matters; and 
Drug-Free Workplace Requirements; DHS Form 20-20, Budget Information--
Non-Construction Programs; and SF LLL, Disclosure of Lobbying 
Activities.
    Abstract: This information collection is to implement the National 
Urban Search and Rescue System (US&R), by which DHS provides 
specialized lifesaving assistance during major disaster or emergency. 
US&R operational activities include locating, extricating and providing 
on-site medical treatment to victims trapped in collapsed structures, 
weapons of mass destruction events, and when assigned, incident command 
or coordination of other operational activities. In order to implement 
the US&R program DHS must collect certain types of information, 
including grant applications, budget and budget narrative, financial 
status reports, assurances and certifications, performance information, 
and requests for advances or reimbursement on forms approved by OMB 
under Control Number 1660-0025.
    Affected Public: State, local and Indian tribal governments.
    Estimated Total Annual Burden Hours: 803 hours. A breakdown of the 
burden follows:

----------------------------------------------------------------------------------------------------------------
                                         No. of     Frequency
              DHS forms                responders  of response   Hours per response and  Annual burden hours  (A
                                          (A)           (B)        recordkeeping  (C)            x B x C)
----------------------------------------------------------------------------------------------------------------
The following forms were approved
 under 1660-0025:
  SF-424 Application for Federal               28            1  1 hour.................  28 hours.
   Assistance.
  DHS Form 20-10 Financial Status              28            1  1 hour.................  28 hours.
   Report.
  DHS Forms 20-16, 20-16A, 20-16C,             28            1  30 minutes.............  14 hours.
   Summary Sheet for Assurances and
   Certifications.
  SF LLL, Disclosure of Lobbying               28            1  10 minutes.............  5 hours.
   Activities.
  DHS Form 20-20, Budget Information           28            2  9 hours................  504 hours.
   Non-Construction Programs and
   Budget Narrative.
  SF 270, Request for Advance or               28            2  4 hours................  224 hours.
   Reimbursement.
                                     --------------
      Subtotal......................  ...........          224  .......................  803 hours.
----------------------------------------------------------------------------------------------------------------

    OMB Number: New.
    Abstract: In order to implement the US&R program, DHS must collect 
certain types of information not included in OMB Control Number 1660-
0025, including memoranda of agreement, program narrative statements, 
grant awards, progress reports, extension or change requests, closeout 
information and audits.
    Affected Public: State, local and Indian tribal governments.
    Estimated Total Annual Burden Hours: 1181 hours. A breakdown of the 
burden follows:

----------------------------------------------------------------------------------------------------------------
                                         No. of     Frequency
              DHS forms                responders  of response  Hours per  response and    Annual  burden hours
                                          (A)           (B)        recordkeeping  (C)          (A x B x C)
----------------------------------------------------------------------------------------------------------------
The following are new collections:
  Narrative Statement...............           28            2  4 hours................  224 hours.
  Progress Reports..................           28            2  2 hours................  112 hours.
  Extension or Change Requests......            5            1  1 hour.................  5 hours.
  Audits of States, Local                      28            1  30 hours...............  840 hours.
   Governments, and Non-Profit
   Organizations.
  Memoranda of Agreement............           28            1  (\1\)..................  8
                                     --------------
      Subtotal......................  ...........          145  .......................  1181 hours.
=====================================--------------
      Total hours...................  ...........          369  .......................  1984 hours.
----------------------------------------------------------------------------------------------------------------
\1\ After we publish the final rule, we will prepare a standardized, streamlined memorandum of agreement in
  consultation with the National US&R Response System Advisory Committee and its Legal Issues Working Group.
  When completed, we will make a second Paperwork Reduction Act submission to OMB.

    Estimated Times and Costs: The approximate annual salary of State 
and local staff who will complete the forms is $35,000. The approximate 
hourly rate of pay is $18.90 ($35,000 divided by 1850 hours). The total 
cost to grantees is estimated to be $37,498.
    The cost to DHS is largely personnel salary costs to review and 
analyze the information collected on these forms--for all DHS grant 
programs, not just US&R grants, which is a significant portion of 
grants management annual work. We estimate that for the US&R program, 
DHS Headquarters would expend approximately 672 hours on analysis, or 
an average of 24 hours per program. We estimate the cost to DHS to be 
$14,112 (672 hours times $21 per hour of staff work). Printing costs 
are minimal because the forms are available in electronic format.

[[Page 9194]]

    The total annual estimated time and costs are 1984 hours and 
$37,498 cost to applicants and $14,112 cost to DHS. This calculation is 
based on the number of burden hours for each type of information 
collection/form, as indicated above, and the estimated wage rates for 
those individuals responsible for collecting the information or 
completing the forms. The new collection is required for sound grants 
management and compliance with OMB Circulars and DHS regulations.

FOR FURTHER INFORMATION CONTACT: Contact Michael Tamillow, Emergency 
Preparedness and Response Directorate, Department of Homeland Security, 
500 C Street, SW., Washington, DC 20472, telephone (202) 646-2549, 
facsimile (202) 646-4684, or e-mail mike.tamillow@dhs.gov for 
additional information. You may contact Muriel B. Anderson for copies 
of the proposed collection of information at (202) 646-2625 or 
(facsimile) (202) 646-3347, or e-mail informationcollections@dhs.gov.

Executive Order 13132 Federalism--Federalism Summary Impact Statement

    Executive Order 13132 requires DHS to develop a process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
Such policies are defined in the Executive Order to include rules that 
have ``substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government.''
    We have analyzed this interim rule in accordance with the 
principles and criteria in the Executive Order and has determined that 
this interim rule would not have a substantial direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. The rule imposes no mandates on State or 
local governments; participation in the National US&R Response System 
is strictly voluntary. Moreover, one of the most significant objectives 
of this program is to build State and local US&R capability. The US&R 
program recognizes the primary role of State and local governments in 
responding to disasters and emergencies. Equipment and supplies 
purchased with Federal funds may be used to respond to in-state 
disasters and emergencies. The teams may only be deployed across State 
lines when released by their home State. The assistance these teams 
provide, like other assistance under the Stafford Act, is only 
furnished when disaster or emergency needs exceed the combined State 
and local capabilities and the Governor requests the assistance. 
Therefore, we certify that this interim rule does not have federalism 
implications as defined in Executive Order 13132.
    While this interim rule does not have federalism implications, this 
rule has been developed through a collaborative process with 
representatives of State and local governments. As noted above, the 
Legal Issues Working Group, a subgroup of the National US&R Response 
System Advisory Committee, developed the original draft of these 
regulations. The National US&R Response System presented a draft to 
DHS. The Legal Issues Working Group and the National US&R Response 
System Advisory Committee both comprised Federal, State and Local 
Government officials, as well as representatives of labor 
organizations, some of whose members serve on the US&R Task Forces.

Congressional Review of Agency Rulemaking

    We have sent this final rule to the Congress and to the General 
Accounting Office under the Congressional Review of Agency Rulemaking 
Act, Pub. L. 104-121. The rule is not a ``major rule'' within the 
meaning of that Act. It standardizes the financing, administration and 
operation of the National Urban Search and Rescue Response System, a 
cooperative effort of the Department of Homeland Security, 
participating State emergency management agencies and local public 
safety agencies across the country.
    The rule will not result in a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. It will not have ``significant adverse 
effects'' on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises. This rule is subject to the 
information collection requirements of the Paperwork Reduction Act and 
OMB has assigned Control No. 1660-0025. The rule is not an unfunded 
Federal mandate within the meaning of the Unfunded Mandates Reform Act 
of 1995, Pub. L. 104-4, and any enforceable duties that we impose are a 
condition of Federal assistance or a duty arising from participation in 
a voluntary Federal program.

List of Subjects in 44 CFR Part 208

    Disaster assistance, Grant programs.

0
Accordingly, we add part 208 to title 44, chapter I of the Code of 
Federal Regulations, as follows:

PART 208--NATIONAL URBAN SEARCH AND RESCUE RESPONSE SYSTEM

Subpart A--General
Sec.
208.1 Purpose and scope of this part.
208.2 Definitions of terms used in this part.
208.3 Authority for the National US&R Response System.
208.4 Purpose for System.
208.5 Authority of the Director of the Response Division (Director).
208.6 System resource reports.
208.7 Enforcement.
208.8 Code of conduct.
208.9 Agreements between Sponsoring Agencies and Participating 
Agencies.
208.10 Other regulations.
208.11 Federal status of System Members.
208.12 Maximum Pay Rate Table.
208.13-208.20 [Reserved]
Subpart B--Preparedness Cooperative Agreements
208.21 Purpose.
208.22 Preparedness Cooperative Agreement process.
208.23 Allowable costs under Preparedness Cooperative Agreements.
208.24 Purchase and maintenance of items not listed on Equipment 
Cache List.
208.25 Obsolete equipment.
208.26 Accountability for use of funds.
208.27 Title to equipment.
208.28-208.30 [Reserved].
Subpart C--Response Cooperative Agreements
208.31 Purpose.
208.32 Definitions of terms used in this subpart.
208.33 Allowable costs.
208.34 Agreements between Sponsoring Agencies and others.
208.35 Reimbursement for Advisory.
208.36 Reimbursement for Alert.
208.37 Reimbursement for equipment and supply costs incurred during 
Activation.
208.38 Reimbursement for re-supply and logistics costs incurred 
during Activation.
208.39 Reimbursement for personnel costs incurred during Activation.
208.40 Reimbursement of fringe benefit costs during Activation.
208.41 Administrative allowance.
208.42 Reimbursement for other administrative costs.
208.43 Rehabilitation.
208.44 Reimbursement for other costs.
208.45 Advance of funds.
208.46 Title to equipment.
208.47-208.50 [Reserved]
Subpart D--Reimbursement Claims and Appeals
208.51 General.
208.52 Reimbursement procedures.

[[Page 9195]]

208.53-208.59 [Reserved]
208.60 Determination of claims.
208.61 Payment of claims.
208.62 Appeals.
208.63 Request by DHS for supplemental information.
208.64 Administrative and audit requirements.
208.65 Mode of transmission.
208.66 Reopening of claims for retrospective or retroactive 
adjustment of costs.
208.67-208.70 [Reserved]

    Authority: Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5121 through 5206; Reorganization Plan No. 
3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; Homeland Security 
Act of 2002, 6 U.S.C. 101; E.O. 12127, 44 FR 19367, 3 CFR, 1979 
Comp., p. 376; E.O. 12148, 44 FR 43239, 3 CFR, 1979 Comp., p. 412; 
E.O. 13286, 68 FR 10619, 3 CFR, 2003 Comp., p. 166.

Subpart A--General


Sec.  208.1  Purpose and scope of this part.

    (a) Purpose. The purpose of this part is to prescribe policies and 
procedures pertaining to the Department of Homeland Security's (DHS) 
National Urban Search and Rescue Response System.
    (b) Scope. This part applies to Sponsoring Agencies and other 
participants in the National Urban Search and Rescue Response System 
that have executed agreements governed by this part. Part 206 of this 
chapter does not apply to activities undertaken under this part, except 
as provided in Sec. Sec.  208.5 and 208.10 of this part. This part does 
not apply to reimbursement under part 206, subpart H, of this chapter.


Sec.  208.2  Definitions of terms used in this part.

    (a) General. Any capitalized word in this part is a defined term 
unless such capitalization results from the application of standard 
capitalization or style rules for Federal regulations. The following 
definitions have general applicability throughout this part:
    Activated or Activation means the status of a System resource 
placed at the direction, control and funding of DHS in response to, or 
in anticipation of, a presidential declaration of a major disaster or 
emergency under the Stafford Act.
    Activation Order means the DHS communication placing a System 
resource under the direction, control, and funding of DHS.
    Advisory means a DHS communication to System resources indicating 
that an event has occurred or DHS anticipates will occur that may 
require Alert or Activation of System resources.
    Alert means the status of a System resource's readiness when 
triggered by an Alert Order indicating that DHS may Activate the System 
resource.
    Alert Order means the DHS communication that places a System 
resource on Alert status.
    Assistance Officer means the DHS employee who has legal authority 
to bind DHS by awarding and amending Cooperative Agreements.
    Backfill means the personnel practice of temporarily replacing a 
person in his or her usual position with another person.
    Cooperating Agency means a State or Local Government that has 
executed a Cooperative Agreement to provide Technical Specialists.
    Cooperative Agreement means a legal instrument between DHS and a 
Sponsoring Agency or Cooperating Agency that provides funds to 
accomplish a public purpose and anticipates substantial Federal 
involvement during the performance of the contemplated activity.
    Daily Cost Estimate means a Sponsoring Agency's estimate of Task 
Force personnel compensation, itemized fringe benefit rates and amounts 
including calculations, and Backfill expenditures for a 24-hour period 
of Activation.
    Deputy Director means the Deputy Director of the Response Division, 
Emergency Preparedness and Response Directorate, Department of Homeland 
Security, or other person that the Director designates.
    DHS means the Department of Homeland Security.
    Director means the Director of the Response Division, Emergency 
Preparedness and Response Directorate, DHS.
    Disaster Search Canine Team means a disaster search canine and 
handler who have successfully completed the written examination and 
demonstrated the performance skills required by the Disaster Search 
Canine Readiness Evaluation Process. A disaster search canine is a dog 
that has successfully completed the DHS Disaster Search Canine 
Readiness Evaluation criteria for Type II or both Type II and Type I.
    Emergency means any occasion or instance for which, in the 
determination of the President, Federal assistance is needed to 
supplement State and local efforts and capabilities to save lives and 
to protect property and public health and safety, or to lessen or avert 
the threat of a catastrophe in any part of the United States.
    Equipment Cache List means the DHS-issued list that defines:
    (1) The equipment and supplies that US&R will furnish to Sponsoring 
Agencies; and
    (2) The maximum quantities and types of equipment and supplies that 
a Sponsoring Agency may purchase and maintain with DHS funds.
    Federal Excess Property means any Federal personal property under 
the control of a Federal agency that the agency head or a designee 
determines is not required for its needs or for the discharge of its 
responsibilities.
    Federal Response Plan means the signed agreement among various 
Federal departments and agencies that provides a mechanism for 
coordinating delivery of Federal assistance and resources to augment 
efforts of State and Local Governments overwhelmed by a Major Disaster 
or Emergency, supports implementation of the Stafford Act, as well as 
individual agency statutory authorities, and supplements other Federal 
emergency operations plans developed to address specific hazards.
    Joint Management Team or JMT means a multi-disciplinary group of 
National Disaster Medical System (NDMS), Urban Search and Rescue 
(US&R), and other specialists combined to provide operations, planning, 
logistics, finance and administrative support for US&R and NDMS 
resources, and to provide technical advice and assistance to States and 
Local Governments.
    Local Government means any county, city, village, town, district, 
or other political subdivision of any State; any federally recognized 
Indian tribe or authorized tribal organization; and any Alaska Native 
village or organization.
    Major Disaster means any natural catastrophe (including any 
hurricane, tornado, storm, high water, wind driven water, tidal wave, 
tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, 
or drought), or regardless of cause, any fire, flood, or explosion, in 
any part of the United States, that in the determination of the 
President, causes damage of sufficient severity and magnitude to 
warrant major disaster assistance under the Stafford Act to supplement 
the efforts and available resources of States, Local Governments, and 
disaster relief organizations in alleviating the damage, loss, 
hardship, or suffering caused thereby.
    Memorandum of Agreement (MOA) means the document signed by DHS, a 
Sponsoring Agency and its State that describes the relationship of the 
parties with respect to the National Urban Search & Rescue Response 
System.
    Participating Agency means a State or Local Government, non-profit 
organization, or private organization

[[Page 9196]]

that has executed an agreement with a Sponsoring Agency to participate 
in the National US&R Response System.
    Personnel Rehabilitation Period means the period allowed by DHS for 
a person's rehabilitation to normal conditions of living following an 
Activation.
    Preparedness Cooperative Agreement means the agreement between DHS 
and a Sponsoring Agency for reimbursement of allowable expenditures 
incurred by the Sponsoring Agency to develop and maintain System 
capabilities and operational readiness.
    Program Directive means guidance and direction for action to ensure 
consistency and standardization across the National US&R Response 
System.
    Program Manager means the individual, or his or her designee, 
within DHS who is responsible for day-to-day administration of the 
National US&R Response System.
    Program Office means the organizational entity within DHS that is 
responsible for day-to-day administration of the National US&R Response 
System.
    Response Cooperative Agreement means an agreement between DHS and a 
Sponsoring Agency for reimbursement of allowable expenditures incurred 
by the Sponsoring Agency as a result of an Alert or Activation.
    Sponsoring Agency means a State or Local Government that has 
executed an MOA with DHS to organize and administer a Task Force.
    Stafford Act means the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5121 through 5206.
    State means any State of the United States, the District of 
Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands, the Federated States of 
Micronesia or the Republic of the Marshall Islands.
    Support Specialist means a person participating in the System who 
assists the Task Force with administrative or other support during 
mobilization, ground transportation and demobilization as directed.
    System or National US&R Response System means the national US&R 
response capability administered by DHS.
    System Member means any Task Force Member, JMT Member, Technical 
Specialist, Support Specialist or Disaster Search Canine Team.
    Task Force means an integrated US&R organization of multi-
disciplinary resources with common communications and a leader, 
organized and administered by a Sponsoring Agency and meeting DHS 
standards.
    Task Force Member means a person occupying a position on a Task 
Force.
    Technical Specialist means a person participating in the System 
contributing technical knowledge and skill who may be placed on Alert 
or Activated as a single resource and not as a part of a JMT or a Task 
Force.
    US&R means urban search and rescue, the process of searching for, 
extricating, and providing for the immediate medical stabilization of 
victims who are entrapped in collapsed structures.
    (b) Additional definitions. Definitions for certain terms that 
apply only to individual subparts of this part are located in those 
subparts.


Sec.  208.3  Authority for the National US&R Response System.

    (a) Enabling legislation. The Federal Emergency Management Agency 
established and operated the System under the authority of Sec. Sec.  
303, 306(a), 306(b), 403(a)(3)(B) and 621(c) of the Stafford Act, 42 
U.S.C. 5144, 5149(a), 5149(b), 5170b(a)(3)(B) and 5197(c), 
respectively. Section 503 of the Homeland Security Act of 2002, 6 
U.S.C. 313, transferred the functions of the Director of FEMA to the 
Secretary of Homeland Security. The President redelegated to the 
Secretary of Homeland Security in Executive Order 13286 those 
authorities of the President under the Stafford Act that had been 
delegated previously to the Director of FEMA under Executive Order 
12148.
    (b) Implementing plan. The National Response Plan identifies DHS as 
the primary Federal agency with responsibility for Emergency Support 
Function 9, Urban Search and Rescue.


Sec.  208.4  Purpose for System.

    It is DHS policy to develop and provide a national system of 
standardized US&R resources to respond to Emergencies and Major 
Disasters that are beyond the capabilities of affected State and Local 
Governments.


Sec.  208.5  Authority of the Director of the Response Division 
(Director).

    (a) Participation in activities of the System. The Director is 
responsible for determining participation in the System and any 
activity thereof, including but not limited to whether a System 
resource is operationally ready for Activation.
    (b) Standards for and measurement of System efficiency and 
effectiveness. In addition to the authority provided in Sec.  206.13 of 
this chapter, the Director may establish performance standards and 
assess the efficiency and effectiveness of System resources.


Sec.  208.6  System resource reports.

    (a) Reports to Director. The Director may request reports from any 
System resource relating to its activities as part of the System.
    (b) Reports to FEMA Regional Directors. Any FEMA Regional Director 
may request through the Director reports from any System resource used 
within or based within the Regional Director's jurisdiction.
    (c) Audits, investigations, studies and evaluations. DHS and the 
General Accounting Office may conduct audits, investigations, studies, 
and evaluations as necessary. Sponsoring Agencies, Participating 
Agencies and System Members are expected to cooperate fully in such 
audits, investigations, studies and evaluations.


Sec.  208.7  Enforcement.

    (a) Remedies for noncompliance. In accordance with the provisions 
of 44 CFR 13.43, if a Sponsoring Agency, Participating Agency, 
Affiliated Personnel or other System Member materially fails to comply 
with a term of a Cooperative Agreement, Memorandum of Agreement, System 
directive or other Program Directive, the Director may take one or more 
of the actions provided in 44 CFR 13.43(a)(1) through (5). Any such 
enforcement action taken by the Director will be subject to the 
hearings, appeals, and effects of suspension and termination provisions 
of 44 CFR 13.43(b) and (c).
    (b) The enforcement remedies identified in this section, including 
suspension and termination, do not preclude a Sponsoring Agency, 
Participating Agency, Affiliated Personnel or other System Member from 
being subject to ``Debarment and Suspension'' under E.O. 12549, as 
amended, in accordance with 44 CFR 13.43(d).
    (c) Other authority for sanctions. Nothing in this section limits 
or precludes the application of other authority to impose civil or 
criminal sanctions, including 42 U.S.C. 5156.


Sec.  208.8  Code of conduct.

    The Director will develop and implement a code of conduct for 
System Members acting under DHS's direction and control. Nothing in 
this section or the DHS code of conduct will limit the authority of a 
Sponsoring Agency, Participating Agency or Cooperating Agency to apply 
its own code of conduct to its System Members or employees. If the DHS 
code is more restrictive, it controls.

[[Page 9197]]

Sec.  208.9  Agreements between Sponsoring Agencies and Participating 
Agencies.

    Every agreement between a Sponsoring Agency and a Participating 
Agency regarding the System must include a provision making this part 
applicable to the Participating Agency and its employees who engage in 
System activities.


Sec.  208.10  Other regulations.

    The following provisions of title 44 CFR, Chapter I also apply to 
the program in this part:
    (a) Section 206.9, which deals with the non-liability of DHS in 
certain circumstances.
    (b) Section 206.11, which prescribes nondiscrimination in the 
provision of disaster assistance.
    (c) Section 206.14, which deals with criminal and civil penalties.
    (d) Section 206.15, which permits recovery of assistance by DHS.


Sec.  208.11  Federal status of System Members.

    The Director will appoint all Activated System Members as temporary 
excepted Federal volunteers. The Director may appoint a System Member 
who participates in Alert activities as such a Federal volunteer. The 
Director may also appoint each System Member who participates in DHS-
sanctioned preparedness activities as a temporary excepted Federal 
volunteer. DHS intends these appointments to secure protection for such 
volunteers under the Federal Employees Compensation Act and the Federal 
Tort Claims Act and do not intend to interfere with any preexisting 
employment relationship between a System Member and a Sponsoring 
Agency, Cooperating Agency or Participating Agency. System Members whom 
DHS appoints as temporary excepted Federal volunteers will not receive 
any compensation or employee benefit directly from the United States of 
America for their service, but will be compensated through their 
Sponsoring Agency.


Sec.  208.12  Maximum Pay Rate Table.

    (a) Purpose. This section establishes the process for creating and 
updating the Maximum Pay Rate Table (Table), and the Table's use to 
reimburse Affiliated Personnel (Task Force Physicians, Task Force 
Engineers, and Canine Handlers) and Backfill for Activated System 
Members employed by or otherwise associated with a for-profit 
Participating Agency. Section 208.32 defines the ``Maximum Pay Rate 
Table'' as ``the DHS-issued table that identifies the maximum pay rates 
for selected System positions that may be used for reimbursement of 
Affiliated Personnel compensation and Backfill for Activated System 
Members employed by or otherwise associated with a for-profit 
Participating Agency.'' In that same section, the term ``Affiliated 
Personnel'' is defined as ``individuals not normally employed by a 
Sponsoring Agency or Participating Agency and individuals normally 
affiliated with a Sponsoring Agency or Participating Agency as 
volunteers.''
    (b) Scope of this section. (1) The Maximum Pay Rate Table applies 
to those individuals who are not normally employed by a Sponsoring 
Agency or Participating Agency, or whose affiliation with a Sponsoring 
Agency or Participating Agency is as a volunteer; that is, an 
individual whom the Sponsoring Agency or Participating Agency does not 
normally compensate in any way, at any rate.
    (2) The Table also applies to Backfill for Activated System Members 
employed by or otherwise associated with a for-profit Participating 
Agency.
    (c) Method for determining maximum pay rates. (1) DHS uses the 
United States Office of Personnel Management's salary rates, computed 
under 5 U.S.C. 5504, as the basis for the maximum pay rate schedule. 
DHS considers System members' experience and sets maximum pay rates at 
the maximum grade, middle step for each position, which demonstrates an 
experience level of five years.
    (2) The Office of Personnel Management (OPM) publishes salary and 
locality pay schedules each calendar year.
    (i) Physicians. DHS uses the latest Special Salary Rate Table 
Number 0290 for Medical Officers (Clinical) Worldwide for physicians. 
The rates used in the initial Table can be found at http://www.opm.gov/oca/03
 tables/SSR/HTML/0290.asp.

    (ii) Engineers and Canine Handlers. DHS uses the latest General 
Schedule pay scale for both positions. Both specialties are compared to 
the General Schedule pay scale to ensure parity with like specialties 
on a task force (canine handlers are equated with rescue specialists). 
The rates used in the initial Table can be found at http://www.opm.gov/oca/03tables/html/gs.asp
.

    (iii) Locality Pay. To determine adjustments for locality pay DHS 
uses the latest locality pay areas (including the ``Rest of U.S.'' 
area) established by OPM. The rates used in the initial Table can be 
found at http://www.opm.gov/oca/03tables/locdef.asp.

    (3) Review and update. DHS will review and update the Table 
periodically, at least annually. The comments of Sponsoring and 
Participating Agencies and their experience with the Table will be 
considered and evaluated in the course of the reviews.
    (4) Initial rates and subsequent revisions. DHS will publish the 
initial maximum pay rate table in the Federal Register as a notice with 
request for comments. Subsequent revisions will be made to the pay rate 
table as OPM changes salary rates as described in this section. When 
subsequent revisions are made to the maximum pay rate table DHS will 
publish the new maximum pay rate table in the Federal Register. The 
rates will be effective for the latest year indicated by OPM.\1\
---------------------------------------------------------------------------

    \1\ In some years the latest year may not be the current 
calendar year. For instance, OPM did not change its pay rates for 
calendar year 2004, and the 2003 schedules apply.
---------------------------------------------------------------------------

    (d) Application of the maximum pay rate table--(1) Applicability. 
The Maximum Pay Rate Table sets forth maximum rates for which DHS will 
reimburse the Sponsoring Agency for compensation paid to Activated 
Affiliated Personnel and as Backfill for Activated System Members 
employed by or otherwise associated with a for-profit Participating 
Agency.
    (2) Higher rates. The Sponsoring Agency may choose to pay 
Affiliated Personnel at a higher rate, but DHS will not reimburse the 
increment above the maximum rate specified in the Maximum Pay Rate 
Table. Likewise, the Sponsoring Agency may choose to enter into a 
Participating Agency agreement with the individual's employer, rather 
than use the individual as an Affiliated Personnel, in which case the 
Maximum Pay Rate Table would not apply.
    (3) Compensation for Sponsoring Agency employees serving as 
Affiliated Personnel. An employee of a Sponsoring Agency serving on a 
Task Force in a capacity other than his or her normal job, e.g., a fire 
department dispatcher affiliated with the Task Force as a canine search 
specialist, as an Affiliated Personnel, would not necessarily be 
subject to the Maximum Pay Rate Table for reimbursement for salary and 
benefits for that individual. However, Sponsoring Agencies may use the 
rates in the Maximum Pay Rate Table as a guide for establishing 
compensation levels for such individuals.
    (4) Backfill expenses for Affiliated Personnel under Sec.  
208.39(g). (i) The only way that DHS can reimburse for Backfill costs 
incurred for Affiliated Personnel is through Participating

[[Page 9198]]

Agencies. If reimbursement for Backfill expenses is needed for 
Affiliated Personnel, DHS encourages them to urge their employers or 
professional association to seek Participating Agency status.
    (ii) Private, for-profit organizations. Participating Agency status 
is available to private, for-profit organizations, e.g., HMOs or 
medical or engineering professional associations, under the revised 
definition of ``Participating Agency'' set forth in this Interim rule. 
(See Definitions, Sec.  208.2, Participating Agency, and Sec.  208.32, 
Maximum Pay Rate Table). When a for-profit Participating Agency must 
backfill an Activated System Member's position we will compensate that 
Participating Agency up to the maximum rate provided in the Table.
    (iii) Compensation costs. DHS will reimburse for-profit 
organizations, for purposes of reimbursement and Backfill, for the 
System Member's actual compensation or the actual compensation of the 
individual who Backfills a position (which includes salary and 
benefits, as described in Sec. Sec.  208.39 and 208.40), but will not 
reimburse for billable or other rates that might be charged for 
services rendered to commercial clients or patients.


Sec. Sec.  208.13--208.20  [Reserved]

Subpart B--Preparedness Cooperative Agreements


Sec.  208.21  Purpose.

    Subpart B of this part provides guidance on the administration of 
Preparedness Cooperative Agreements.


Sec.  208.22  Preparedness Cooperative Agreement process.

    (a) Application. To obtain DHS funding for an award or amendment of 
a Preparedness Cooperative Agreement, the Sponsoring Agency must submit 
an application. Standard form SF-424 ``Application for Federal 
Assistance'' generally will be used. However, the application must be 
in a form that the Assistance Officer specifies.
    (b) Award. DHS will award a Preparedness Cooperative Agreement to 
each Sponsoring Agency to provide Federal funding to develop and 
maintain System resource capabilities and operational readiness. For 
the purposes of the Preparedness Cooperative Agreement, the Sponsoring 
Agency will be considered the ``recipient.''
    (c) Amendment--(1) Procedure. Absent special circumstances, DHS 
will fund and amend Preparedness Cooperative Agreements on an annual 
basis. Before amendment, the Assistance Officer will issue a call for 
Cooperative Agreement amendment applications. The Assistance Officer 
will specify required application forms and supporting documentation to 
be submitted with the application.
    (2) Period of performance. Absent special circumstances, the period 
of performance for Preparedness Cooperative Agreements will be 1 year 
from the date of award. The Assistance Officer may allow for an 
alternate period of performance with the approval of the Director.
    (3) Assistance Officer. The Assistance Officer is the only 
individual authorized to award or modify a Preparedness Cooperative 
Agreement.
    (d) Award amounts. The Director will determine award amounts on an 
annual basis. A Task Force is eligible for an annual award only if the 
Program Manager receives and approves the Task Force's current-year 
Daily Cost Estimate.
    (e) DHS priorities. The Director will establish overall priorities 
for the use of Preparedness Cooperative Agreement funds taking into 
consideration the results of readiness evaluations and actual 
Activations, overall priorities of DHS, and other factors, as 
appropriate.
    (f) Cost sharing. The Director may subject Preparedness Cooperative 
Agreement awards to cost sharing provisions. In the call for 
Preparedness Cooperative Agreement amendment applications, the 
Assistance Officer must inform Sponsoring Agencies about any cost 
sharing obligations.
    (g) Sponsoring Agency priorities. The Sponsoring Agency should 
indicate its spending priorities in the application. The Program 
Manager will review these priorities and will make recommendations to 
the Assistance Officer for negotiating the final agreement.
    (h) Responsibility to maintain integrity of the equipment cache. 
The Sponsoring Agency is responsible to maintain the integrity of the 
equipment cache, including but not limited to, maintenance of the 
cache, replacement of equipment or supplies expended in training, 
activations, or local use of the cache, and timely availability of the 
cache for Task Force Activations.


Sec.  208.23  Allowable costs under Preparedness Cooperative 
Agreements.

    System Members may spend Federal funds that DHS provides under any 
Preparedness Cooperative Agreement and any required matching funds 
under 44 CFR 13.22 and this section to pay reasonable, allowable, 
necessary and allocable costs that directly support System activities, 
including the following:
    (a) Administration, including:
    (1) Management and administration of day-to-day System activities 
such as personnel compensation and benefits relating to System 
maintenance and development, record keeping, inventory of equipment, 
and correspondence;
    (2) Travel to and from System activities, meetings, conferences, 
training, drills and exercises;
    (3) Tests and examinations, including vaccinations, immunizations 
and other tests that are not normally required or provided in the 
course of a System Member's employment, and that DHS requires to meet 
its standards.
    (b) Training:
    (1) Development and delivery of, and participation in, System-
related training courses, exercises, and drills;
    (2) Construction, maintenance, lease or purchase of System-related 
training facilities or materials;
    (3) Personnel compensation expenses, including overtime and other 
related expenses associated with System-related training, exercises, or 
drills;
    (4) System-required evaluations and certifications other than the 
certifications that DHS requires System Members to possess at the time 
of entry into the System. For instance, DHS will not pay for a medical 
school degree, paramedic certification or recertification, civil 
engineering license, etc.
    (c) Equipment:
    (1) Procurement of equipment and supplies specifically identified 
on the then-current DHS-approved Equipment Cache List;
    (2) Maintenance and repair of equipment included on the current 
Equipment Cache List;
    (3) Maintenance and repair of equipment acquired with DHS approval 
through the Federal Excess Property program, except as provided in 
Sec.  208.25 of this part;
    (4) Purchase, construction, maintenance or lease of storage 
facilities and associated equipment for System equipment and supplies.
    (d) Disaster search canine expenses limited to:
    (1) Procurement for use as a System resource;
    (2) Training and certification expenses;
    (3) Veterinary care.
    (e) Management and administrative costs, actually incurred but not 
otherwise specified in this section that directly support the 
Sponsoring Agency's US&R capability, provided that such costs do not 
exceed 7.5 percent of the award/amendment amount.

[[Page 9199]]

Sec.  208.24  Purchase and maintenance of items not listed on Equipment 
Cache List.

    (a) Requests for purchase or maintenance of equipment and supplies 
not appearing on the Equipment Cache List, or that exceed the number 
specified in the Equipment Cache List, must be made in writing to the 
Program Manager. No Federal funds provided under any Preparedness 
Cooperative Agreement may be expended to purchase or maintain any 
equipment or supply item unless:
    (1) The equipment and supplies directly support the Sponsoring 
Agency's US&R capability;
    (2) The Program Manager approves the expenditure and gives written 
notice of his or her approval to the Sponsoring Agency before the 
Sponsoring Agency purchases the equipment or supply item.
    (b) Maintenance of items approved for purchase under this section 
is eligible for reimbursement, except as provided in Sec.  208.26 of 
this subpart.


Sec.  208.25  Obsolete equipment.

    (a) The Director will periodically identify obsolete items on the 
Equipment Cache List and provide such information to Sponsoring 
Agencies.
    (b) Neither funds that DHS provides nor matching funds required 
under a Preparedness Cooperative Agreement may be used to maintain or 
repair items that DHS has identified as obsolete.


Sec.  208.26  Accountability for use of funds.

    The Sponsoring Agency is accountable for the use of funds as 
provided under the Preparedness Cooperative Agreement, including 
financial reporting and retention and access requirements according to 
44 CFR 13.41 and 13.42.


Sec.  208.27  Title to equipment.

    Title to equipment purchased by a Sponsoring Agency with funds 
provided under a DHS Preparedness Cooperative Agreement vests in the 
Sponsoring Agency, provided that DHS reserves the right to transfer 
title to the Federal Government or a third party that DHS may name, 
under 44 CFR 13.32(g), for example, when a Sponsoring Agency indicates 
or demonstrates that it cannot fulfill its obligations under the 
Memorandum of Agreement.


Sec. Sec.  208.28-208.30  [Reserved]

Subpart C--Response Cooperative Agreements


Sec.  208.31  Purpose.

    Subpart C of this part provides guidance on the administration of 
Response Cooperative Agreements.


Sec.  208.32  Definitions of terms used in this subpart.

    Affiliated Personnel means individuals not normally employed by a 
Sponsoring Agency or Participating Agency and individuals normally 
affiliated with a Sponsoring Agency or Participating Agency as 
volunteers.
    Demobilization Order means a DHS communication that terminates an 
Alert or Activation and identifies cost and time allowances for 
rehabilitation.
    Exempt means any System Member who is exempt from the requirements 
of the Fair Labor Standards Act, 29 U.S.C. 201 et seq., pertaining to 
overtime compensation and other labor standards.
    Maximum Pay Rate Table means the DHS-issued table that identifies 
the maximum pay rates for selected System positions that may be used 
for reimbursement of Affiliated Personnel compensation and Backfill for 
Activated System Members employed by or otherwise associated with a 
for-profit Participating Agency. The Maximum Pay Rate Table does not 
apply to a System member whom a Sponsoring Agency or Participating 
Agency employs.
    Mobilization means the process of assembling equipment and 
personnel in response to an Alert or Activation.
    Non-Exempt means any System Member who is covered by 29 U.S.C. 201 
et seq.
    Rehabilitation means the process of returning personnel and 
equipment to a pre-incident state of readiness after DHS terminates an 
Activation.


Sec.  208.33  Allowable costs.

    (a) Cost neutrality. DHS policy is that an Alert or Activation 
should be as cost neutral as possible to Sponsoring Agencies and 
Participating Agencies. To make an Alert or Activation cost-neutral, 
DHS will reimburse under this subpart all reasonable, allowable, 
necessary and allocable costs that a Sponsoring Agency or Participating 
Agency incurs during the Alert or Activation.
    (b) Actual costs. Notwithstanding any other provision of this 
chapter, DHS will not reimburse a Sponsoring Agency or Participating 
Agency for any costs greater than those that the Sponsoring Agency or 
Participating Agency actually incurs during an Alert, Activation.
    (c) Normal or predetermined practices. Consistent with Office of 
Management and Budget (OMB) Circulars A-21, A-87, A-102 and A-110 (2 
CFR part 215), as applicable, Sponsoring Agencies and Participating 
Agencies must adhere to their own normal and predetermined practices 
and policies of general application when requesting reimbursement from 
DHS except as it sets out in this subpart.
    (d) Indirect costs. Indirect costs beyond the administrative and 
management costs allowance established by Sec.  208.41 of this part are 
not allowable.


Sec.  208.34  Agreements between Sponsoring Agencies and others.

    Sponsoring Agencies are responsible for executing such agreements 
with Participating Agencies and Affiliated Personnel as may be 
necessary to implement the Sponsoring Agency's Response Cooperative 
Agreement with DHS. Those agreements must identify established hourly 
or daily rates of pay for System Members. The hourly or daily rates of 
pay for Affiliated Personnel must be in accordance with, and must not 
exceed, the maximum pay rates contained in the then-current Maximum Pay 
Rate Table.


Sec.  208.35  Reimbursement for Advisory.

    DHS will not reimburse costs incurred during an Advisory.


Sec.  208.36  Reimbursement for Alert.

    (a) Allowable costs. DHS will reimburse costs incurred during an 
Alert, up to the dollar limit specified in the Alert Order, for the 
following activities:
    (1) Personnel costs, including Backfill, incurred to prepare for 
Activation.
    (2) Transportation costs relating to hiring, leasing, or renting 
vehicles and drivers.
    (3) The administrative allowance provided in Sec.  208.41 of this 
part.
    (4) Food and beverages for Task Force Members and Support 
Specialists when DHS does not provide meals during the Alert. DHS will 
limit food and beverage reimbursement to the amount of the then-current 
Federal meals daily allowance published in the Federal Register for the 
locality where such food and beverages were provided, multiplied by the 
number of personnel who received them.
    (b) Calculation of Alert Order dollar limit. The Alert Order dollar 
limit will equal:
    (1) An allowance of 10 percent of the Task Force's Daily Cost 
Estimate; and
    (2) A supplemental allowance of 1 percent of the Task Force's Daily 
Cost Estimate for each 24-hour period beyond the first 72 hours of 
Alert.
    (c) Non-allowable costs. DHS will not reimburse costs incurred or 
relating to the leasing, hiring or chartering of aircraft or the 
purchase of any equipment, aircraft, or vehicles.

[[Page 9200]]

Sec.  208.37  Reimbursement for equipment and supply costs incurred 
during Activation.

    (a) Allowable costs. DHS will reimburse costs incurred for the 
emergency procurement of equipment and supplies in the number, type, 
and up to the cost specified in the current approved Equipment Cache 
List, and up to the aggregate dollar limit specified in the Activation 
Order. The Director may determine emergency procurement dollar limits, 
taking into account previous Activation history, available funding, the 
extent and nature of the incident, and the current state of Task Force 
readiness.
    (b) Non-Allowable costs. DHS will not reimburse costs incurred for 
items that are not listed on the Equipment Cache List; for items 
purchased greater than the cost or quantity identified in the Equipment 
Cache List; or for any purchase of non-expendable items that duplicate 
a previous purchase under a Preparedness or Response Cooperative 
Agreement.


Sec.  208.38  Reimbursement for re-supply and logistics costs incurred 
during Activation.

    With the exception of emergency procurement authorized in the 
Activation Order, and replacement of consumable items provided for in 
Sec.  208.43(a)(2) of this subpart, DHS will not reimburse costs 
incurred for re-supply and logistical support during Activation. Re-
supply and logistical support of Task Forces needed during Activation 
are the responsibility of the Joint Management Team.


Sec.  208.39  Reimbursement for personnel costs incurred during 
Activation.

    (a) Compensation. DHS will reimburse the Sponsoring Agency for 
costs incurred for the compensation of each Activated System Member 
during Activation. Reimbursement of compensation costs for Activated 
Support Specialists will be limited to periods of time during which 
they were actively supporting the Activation or traveling to or from 
locations at which they were actively supporting the Activation. The 
provisions of Sec.  208.40 of this part govern costs incurred for 
providing fringe benefits to System Members.
    (b) Public Safety Exemption not applicable. DHS will reimburse 
Sponsoring Agencies for costs incurred by Non-Exempt System Members in 
accordance with 29 U.S.C. 207(a) of the Fair Labor Standards Act, 
without regard to the public safety exemption contained in 29 U.S.C. 
207(k). In other words, DHS will reimburse Sponsoring Agencies on an 
overtime basis for any hours worked by Non-Exempt System Members 
greater than 40 hours during a regular workweek.
    (c) Tour of duty. The tour of duty for all Activated System Members 
will be 24 hours. DHS will reimburse the Sponsoring Agency for salary 
and overtime costs incurred in compensating System Members for meal 
periods and regularly scheduled sleep periods during Activation. 
Activated System Members are considered ``on-duty'' and must be 
available for immediate response at all times during Activation.
    (d) Regular rate. The regular rate for purposes of calculating 
allowable salary and overtime costs is the amount determined in 
accordance with Sec.  208.39(e)(1) through (3) of this subpart.
    (e) Procedures for calculating compensation during Activation. A 
Sponsoring Agency or Participating Agency must:
    (1) Convert the base hourly wage of any Non-Exempt System Member 
regularly paid under 29 U.S.C. 207(k) to its equivalent for a 40-hour 
work week;
    (2) Convert the annual salary of any salaried Non-Exempt System 
Member to its hourly equivalent for a 40-hour workweek;
    (3) Calculate the daily compensation of Exempt System Members based 
on their current annual salary, exclusive of fringe benefits;
    (4) Calculate the total number of hours worked by each System 
Member to be included in the Sponsoring Agency's request for 
reimbursement; and
    (5) Submit a request for reimbursement under Sec.  208.52 of this 
part according to the following table:

------------------------------------------------------------------------
                               And the Sponsoring
 If the Sponsoring Agency or        Agency or        Then the following
 Participating  Agency * * *      Participating      compensation costs
                                  Agency * * *         are  allowable:
------------------------------------------------------------------------
(i) Customarily and usually   Does not customarily  The daily
 compensates Exempt System     and usually grant     compensation
 Members by paying a salary,   compensatory time     equivalent
 but not overtime,             or other form of      calculated under
                               overtime substitute   Sec.   208.39(e)(3)
                               to Exempt System      of this part for
                               members.              each Activated
                                                     Exempt System
                                                     Member for each
                                                     full or partial day
                                                     during Activation.
(ii) Customarily and usually  Customarily and       The daily
 compensates Exempt System     usually awards        compensation
 Members by paying a salary    compensatory time     equivalent
 but not overtime              or other overtime     calculated under
                               substitute for        Sec.   208.39(e)(3)
                               Exempt System         of this part for
                               Members for hours     each Activated
                               worked above a        Exempt System
                               predetermined hours   Member for each
                               threshold (for        full or partial day
                               example, the          during Activation
                               Sponsoring Agency     AND the dollar
                               customarily and       value at the time
                               usually grants        of accrual of the
                               compensatory time     compensatory time
                               for all hours         or other overtime
                               worked above 60 in    substitute for each
                               a given week).        Activated Exempt
                                                     System Member based
                                                     on the duration of
                                                     the Activation.
(iii) Customarily and         Customarily and       The daily
 usually compensates Exempt    usually calculates    compensation
 System Members by paying a    overtime for Exempt   equivalent
 salary and overtime,          System Members by     calculated under
                               paying a              Sec.   208.39(e)(3)
                               predetermined         of this part for
                               overtime payment      each Activated
                               for each hour         Exempt System
                               worked above a        Member for each
                               predetermined hours   full or partial day
                               threshold,.           during Activation
                                                     AND the
                                                     predetermined
                                                     overtime payment
                                                     for each hour
                                                     during the
                                                     Activation above
                                                     the previously
                                                     determined hours
                                                     threshold for each
                                                     Activated Exempt
                                                     System Member.
(iv) Customarily and usually  Does not customarily  For each seven-day
 compensates Non-Exempt        and usually grant     period during the
 System Members by paying      compensatory time     Activation, the
 overtime after 40 hours per   or other form of      hourly wage of each
 week,                         overtime substitute   Activated Non-
                               to Non-Exempt         Exempt System
                               System members,.      Member for the
                                                     first 40 hours AND
                                                     the overtime
                                                     payment for each
                                                     Activated Non-
                                                     Exempt System
                                                     Member for every
                                                     hour over 40.

[[Page 9201]]


(v) Customarily and usually   Does not customarily  For each seven-day
 compensates Non-Exempt        and usually grant     period during the
 System Members according to   compensatory time     Activation, the
 a compensation plan           or other form of      hourly wage
 established under 29 U.S.C.   overtime substitute   equivalent of each
 207(k),                       to Non-Exempt         Activated Non-
                               System Members,.      Exempt System
                                                     Member calculated
                                                     under Sec.
                                                     208.39(e)(1) of
                                                     this part for the
                                                     first 40 hours AND
                                                     the overtime
                                                     payment equivalent
                                                     for each Activated
                                                     Non-Exempt System
                                                     Member calculated
                                                     under Sec.
                                                     208.39(e)(1) of
                                                     this part for every
                                                     hour over 40.
(vi) Activates Personnel,     ....................  For each seven-day
 who are customarily and                             period during the
 usually paid an hourly wage                         Affiliated
 according to the Maximum                            Activation, the
 Pay Rate Table,                                     hourly wage for
                                                     each Activated
                                                     Affiliated
                                                     Personnel for the
                                                     first 40 hours and
                                                     one and one-half
                                                     times the hourly
                                                     wage for each
                                                     Activated
                                                     Affiliated
                                                     Personnel for every
                                                     hour over 40.
(vii) Activates Affiliated    ....................  The daily
 Personnel who are                                   compensation rate
 customarily and usually                             for each Activated
 paid a daily compensation                           Affiliated
 rate according to the                               Personnel for each
 Maximum Pay Rate Table,                             full or partial day
                                                     during the
                                                     Activation.
------------------------------------------------------------------------

    (f) Reimbursement of additional salary and overtime costs. DHS will 
reimburse any identified additional salary and overtime cost incurred 
by a Sponsoring Agency as a result of the temporary conversion of a 
Non-Exempt System Member normally compensated under 29 U.S.C. 207(k) to 
a 40-hour work week under 29 U.S.C. 207(a).
    (g) Reimbursement for Backfill costs upon Activation. DHS will 
reimburse the cost to Backfill System Members. Backfill costs consist 
of the expenses generated by filling the position in which the 
Activated System Member should have been working. These costs are 
calculated by subtracting the non-overtime compensation, including 
fringe benefits, of Activated System Members from the total costs (non-
overtime and overtime compensation, including fringe benefits) paid to 
Backfill the Activated System Members. Backfill reimbursement is 
available only for those positions that are normally Backfilled by the 
Sponsoring Agency or Participating Agency during Activation. Employees 
exempt under the Fair Labor Standards Act (FLSA) not normally 
Backfilled by the Sponsoring Agency or Participating Agency are not 
eligible for Backfill during Activation.


Sec.  208.40  Reimbursement of fringe benefit costs during Activation.

    (a) Except as specified in Sec. 208.40 (c) of this subpart, DHS 
will reimburse the Sponsoring Agency for fringe benefit costs incurred 
during Activation according to the following table:

------------------------------------------------------------------------
                               Then the Sponsoring
 If the Sponsoring Agency or        Agency or
 Participating  Agency * * *  Participating Agency         Example
                                   must * * *
------------------------------------------------------------------------
(1) Incurs a fringe benefit   Bill DHS for a pro-   The City Fire
 cost based on the number of   rata share of the     Department incurs a
 base hours worked by a        premium based on      premium of 3
 System Member,                the number of base    percent for dental
                               hours worked during   coverage based on
                               Activation.           the number of base
                                                     hours worked in a
                                                     week (53 hours).
                                                     The City should
                                                     bill DHS an
                                                     additional 3
                                                     percent of the
                                                     firefighter's
                                                     converted
                                                     compensation for
                                                     the first 40 hours
                                                     Activation.
(2) Incurs a fringe benefit   Bill DHS for a pro-   The City Fire
 cost based on the number of   rata share of the     Department pays a
 hours a System Member         premium based on      premium of 12
 actually worked (base hours   the number of hours   percent for
 and overtime),                each System Member    retirement based on
                               worked during         the number of hours
                               Activation.           worked by a
                                                     firefighter. The
                                                     City should bill
                                                     DHS an additional
                                                     12 percent of the
                                                     firefighter's total
                                                     compensation during
                                                     Activation.
(3) Incurs a fringe benefit   Bill DHS for a pro-   The City Fire
 cost on a yearly basis        rata share of those   Department pays
 based on the number of        fringe benefit        workers
 people employed full-time     costs based on the    compensation
 during the year,              number of non-        premiums into the
                               overtime hours        City risk fund for
                               worked during         the following year,
                               Activation by         based on the number
                               System Members        of full-time
                               employed full time.   firefighters
                                                     employed during the
                                                     current year. The
                                                     City should bill
                                                     DHS for workers
                                                     compensation
                                                     premium costs by
                                                     multiplying the
                                                     hourly fringe
                                                     benefit rate or
                                                     amount by the
                                                     number of non-
                                                     overtime hours
                                                     worked during
                                                     Activation by full
                                                     time firefighters
                                                     who are System
                                                     Members.
------------------------------------------------------------------------

    (b) Differential pay. DHS will reimburse the Sponsoring Agency for 
direct costs incurred because of any separate differential compensation 
paid for work performed during an Activation including, but not limited 
to, differentials paid for holidays, night work, hazardous duty, or 
other paid fringe benefits, provided such differentials are not 
otherwise reimbursed under paragraph (a) of this section. A detailed 
explanation of the differential payment for which the Sponsoring Agency 
seeks reimbursement must accompany any

[[Page 9202]]

request for reimbursement under this section together with 
identification of every fringe benefit sought under Sec. 208.40(a) of 
this part and the method used to calculate each such payment and the 
reimbursement sought from DHS.
    (c) DHS will not reimburse the Sponsoring Agency for fringe benefit 
costs for Affiliated Personnel.


Sec.  208.41  Administrative allowance.

    (a) The administrative allowance is intended to defray costs of the 
following activities, to the extent provided in paragraph (b) of this 
section:
    (1) Collecting expenditure information from Sponsoring Agencies and 
Participating Agencies;
    (2) Compiling and summarizing cost records and reimbursement 
claims;
    (3) Duplicating cost records and reimbursement claims; and
    (4) Submitting reimbursement claims, including mailing, 
transmittal, and related costs.
    (b) The administrative allowance will be equal to the following:
    (1) If total allowable costs are less than $100,000, 3 percent of 
total allowable costs included in the reimbursement claim;
    (2) If total allowable costs are $100,000 or more but less than 
$1,000,000, $3,000 plus 2 percent of costs included in the 
reimbursement claim greater than $100,000;
    (3) If total allowable costs are $1,000,000 or more, $21,000 plus 1 
percent of costs included in the reimbursement claim greater than 
$1,000,000.


Sec.  208.42  Reimbursement for other administrative costs.

    Costs incurred for conducting after-action meetings and preparing 
after-action reports must be billed as direct costs in accordance with 
DHS administrative policy.


Sec.  208.43  Rehabilitation.

    DHS will reimburse costs incurred to return System equipment and 
personnel to a state of readiness following Activation as provided in 
this section.
    (a) Costs for Equipment Cache List items--(1) Non-consumable items. 
DHS will reimburse costs incurred to repair or replace any non-
consumable item on the Equipment Cache List that was lost, damaged, 
destroyed, or donated at DHS direction to another entity, during 
Activation. For each such item, the Sponsoring Agency must document, in 
writing, the circumstances of the loss, damage, destruction, or 
donation.
    (2) Consumable items. DHS will reimburse costs incurred to replace 
any consumable item on the Equipment Cache List that was consumed 
during Activation.
    (3) Personnel costs associated with equipment cache rehabilitation. 
DHS will reimburse costs incurred for the compensation, including 
benefits, payable for actual time worked by each person engaged in 
rehabilitating the equipment cache following Activation, in accordance 
with the standard pay policy of the Sponsoring Agency or Participating 
Agency and without regard to the provisions of Sec.  208.39(e)(1) of 
this part, up to the number of hours specified in the Demobilization 
Order. Fringe benefits are reimbursed under the provisions of Sec.  
208.40 of this part.
    (b) Costs for personnel rehabilitation. DHS will reimburse costs 
incurred for the compensation, including benefits and Backfill, of each 
Activated System Member regularly scheduled to work during the 
rehabilitation period specified in the Demobilization Order, in 
accordance with the standard pay policy of the Sponsoring Agency or 
Participating Agency and without regard to the provisions of Sec.  
208.39(e)(1) of this part.
    (c) Other allowable costs--(1) Local transportation. DHS will 
reimburse costs incurred for transporting Task Force Members from the 
point of assembly to the point of departure and from the point of 
return to the location where they are released from duty. DHS will also 
reimburse transportation costs incurred for assembling and moving the 
equipment cache from its usual place(s) of storage to the point of 
departure, and from the point of return to its usual place(s) of 
storage. Such reimbursement will include costs to return the means of 
transportation to its point of origin.
    (2) Ground transportation. When DHS orders a Sponsoring Agency to 
move its Task Force Members and equipment cache by ground 
transportation, DHS will reimburse costs incurred for such 
transportation, including but not limited to charges for contract 
carriers, rented vehicles, contract vehicle operators, fleet vehicles, 
fuel and associated transportation expenses. The Director has authority 
to issue schedules of maximum hourly or per mile reimbursement rates 
for fleet and contract vehicles.
    (3) Food and beverages. DHS will reimburse expenditures for food 
and beverages for Activated Task Force Members and Support Specialists 
when the Federal government does not provide meals during Activation. 
Reimbursement of food and beverage costs for Activated Support 
Specialists will be limited to periods of time during which they were 
actively supporting the Activation or traveling to or from locations at 
which they were actively supporting the Activation. Food and beverage 
reimbursement will be limited to the amount of the then-current Federal 
meals and incidental expenses daily allowance published in the Federal 
Register for the locality where such food and beverages were provided, 
multiplied by the number of personnel who received the same.


Sec.  208.44  Reimbursement for other costs.

    (a) Except as allowed under paragraph (b) of this section, DHS will 
not reimburse other costs incurred preceding, during or upon the 
conclusion of an Activation unless, before making the expenditure, the 
Sponsoring Agency has requested, in writing, permission for a specific 
expenditure and has received written permission from the Program 
Manager or his or her designee to make such expenditure.
    (b) At the discretion of the Program Manager or his or her 
designee, a request for approval of costs presented after the costs 
were incurred must be in writing and establish that:
    (1) The expenditure was essential to the Activation and was 
reasonable;
    (2) Advance written approval by the Program Manager was not 
feasible; and
    (3) Advance verbal approval by the Program Manager had been 
requested and was given.


Sec.  208.45  Advance of funds.

    At the time of Activation of a Task Force, the Task Force will 
develop the documentation necessary to request an advance of funds be 
paid to such Task Force's Sponsoring Agency. Upon approval, DHS will 
submit the documentation to the Assistance Officer and will request an 
advance of funds up to 75 percent of the estimated personnel costs for 
the Activation. The estimated personnel costs will include the 
salaries, benefits, and Backfill costs for Task Force Members and an 
estimate of the salaries, benefits and Backfill costs required for 
equipment cache rehabilitation. The advance of funds will not include 
any costs for equipment purchase.


Sec.  208.46  Title to equipment.

    Title to equipment purchased by a Sponsoring Agency with funds 
provided under a DHS Response Cooperative Agreement vests in the 
Sponsoring Agency, provided that DHS reserves the right to transfer 
title to the Federal Government or a third party that DHS may name, 
under 44 CFR 13.32(g), when a Sponsoring Agency indicates or 
demonstrates that it cannot fulfill its

[[Page 9203]]

obligations under the Memorandum of Agreement.


Sec. Sec.  208.47-208.50  [Reserved]

Subpart D--Reimbursement Claims and Appeals


Sec.  208.51  General.

    (a) Purpose. This subpart identifies the procedures that Sponsoring 
Agencies must use to request reimbursement from DHS for costs incurred 
under Response Cooperative Agreements.
    (b) Policy. It is DHS policy to reimburse Sponsoring Agencies as 
expeditiously as possible consistent with Federal laws and regulations.


Sec.  208.52  Reimbursement procedures.

    (a) General. A Sponsoring Agency must present a claim for 
reimbursement to DHS in such manner as the Director specifies .
    (b) Time for submission. (1) Claims for reimbursement must be 
submitted within 90 days after the end of the Personnel Rehabilitation 
Period specified in the Demobilization Order.
    (2) The Director may extend and specify the time limitation in 
paragraph (b)(1) of this section when the Sponsoring Agency justifies 
and requests the extension in writing.


Sec. Sec.  208.53-208.59  [Reserved]


Sec.  208.60  Determination of claims.

    When DHS receives a reviewable claim for reimbursement, DHS will 
review the claim to determine whether and to what extent reimbursement 
is allowable. Except as provided in Sec.  208.63 of this part, DHS will 
complete its review and give written notice to the Sponsoring Agency of 
its determination within 90 days after the date DHS receives the claim. 
If DHS determines that any item of cost is not eligible for 
reimbursement, its notice of determination will specify the grounds on 
which DHS disallowed reimbursement.


Sec.  208.61  Payment of claims.

    DHS will reimburse all allowable costs for which a Sponsoring 
Agency requests reimbursement within 30 days after DHS determines that 
reimbursement is allowable, in whole or in part, at any stage of the 
reimbursement and appeal processes identified in this subpart.


Sec.  208.62  Appeals.

    (a) Initial appeal. The Sponsoring Agency may appeal to the Program 
Manager any determination made under Sec.  208.60 of this part to 
disallow reimbursement of an item of cost:
    (1) The appeal must be in writing and submitted within 60 days 
after receipt of DHS's written notice of disallowance under Sec.  
208.60 of this part.
    (2) The appeal must contain legal and factual justification for the 
Sponsoring Agency's contention that the cost is allowable.
    (3) Within 90 days after DHS receives an appeal, the Program 
Manager will review the information submitted, make such additional 
investigations as necessary, make a determination on the appeal, and 
submit written notice of the determination of the appeal to the 
Sponsoring Agency.
    (b) Final appeal. (1) If the Program Manager denies the initial 
appeal, in whole or in part, the Sponsoring Agency may submit a final 
appeal to the Deputy Director. The appeal must be made in writing and 
must be submitted not later than 60 days after receipt of written 
notice of DHS's determination of the initial appeal.
    (2) Within 90 days following the receipt of a final appeal, the 
Deputy Director will render a determination and notify the Sponsoring 
Agency, in writing, of the final disposition of the appeal.
    (c) Failure to file timely appeal. If the Sponsoring Agency does 
not file an appeal within the time periods specified in this section, 
DHS will deem that the Sponsoring Agency has waived its right to appeal 
any decision that could have been the subject of an appeal.


Sec.  208.63  Request by DHS for supplemental information.

    (a) At any stage of the reimbursement and appeal processes 
identified in this subpart, DHS may request the Sponsoring Agency to 
provide supplemental information that DHS considers necessary to 
determine either a claim for reimbursement or an appeal. The Sponsoring 
Agency must exercise its best efforts to provide the supplemental 
information and must submit to DHS a written response that includes 
such supplemental information as the Sponsoring Agency is able to 
provide within 30 days after receiving DHS's request.
    (b) If DHS makes a request for supplemental information at any 
stage of the reimbursement and appeal processes, the applicable time 
within which its determination of the claim or appeal is to be made 
will be extended by 30 days. However, without the consent of the 
Sponsoring Agency, no more than one such time extension will be allowed 
for any stage of the reimbursement and appeal processes.


Sec.  208.64  Administrative and audit requirements.

    (a) Non-Federal audit. For Sponsoring Agencies and States, 
requirements for non-Federal audit are contained in 44 CFR 13.26, in 
accordance with OMB Circular A-133, Audits of States, Local 
Governments, and Non-Profit Organizations.
    (b) Federal audit. DHS or the General Accounting Office may elect 
to conduct a Federal audit of any payment made to a Sponsoring Agency 
or State.


Sec.  208.65  Mode of transmission.

    When sending all submissions, determinations, and requests for 
supplemental information under this subpart, all parties must use a 
means of delivery that permits both the sender and addressee to verify 
the dates of delivery.


Sec.  208.66  Reopening of claims for retrospective or retroactive 
adjustment of costs.

    (a) Upon written request by the Sponsoring Agency DHS will reopen 
the time period for submission of a request for reimbursement after the 
Sponsoring Agency has submitted its request for reimbursement, if:
    (1) The salary or wage rate applicable to the period of an 
Activation is retroactively changed due to the execution of a 
collective bargaining agreement, or due to the adoption of a generally 
applicable State or local law, ordinance or wage order or a cost-of-
living adjustment;
    (2) The Sponsoring Agency or any Participating Agency incurs an 
additional cost because of a legally-binding determination; or
    (3) The Deputy Director determines that other extenuating 
circumstances existed that prevented the Sponsoring Agency from 
including the adjustment of costs in its original submission.
    (c) The Sponsoring Agency must notify DHS as early as practicable 
that it anticipates such a request.


Sec. Sec.  208.67-208.70  [Reserved]

    Dated: February 3, 2005.
Michael D. Brown,
Under Secretary, Emergency Preparedness and Response, Department of 
Homeland Security.
[FR Doc. 05-3192 Filed 2-23-05; 8:45 am]

BILLING CODE 9110-69-P