Hazard Mitigation, Section 406

Hazard Mitigation, Section 406 of the Stafford Act is a funding source for cost-effective measures  that would reduce or eliminate the threat of future similar damage  to a facility damaged during the  disaster.  The  measures must apply only to the damaged elements of a facility rather than  to other, undamaged parts  of the  facility or to the  entire system. For example, if flooding inundates a sanitary sewer and blocks the manholes with sediment, mitigation to prevent the blockage  of the damaged manholes in a future event may be considered eligible.  However, work to improve  undamaged manholes using the same method would not be eligible,  even though the manholes are part of the same system.

Hazard mitigation measures restore a facility beyond its pre-disaster design. Section 406 mitigation measures are considered part of the total eligible cost of repair, restoration, or reconstruction of a facility. They are limited  to measures  of permanent work, and  the applicant may not apply mitigation funding to alternate projects  or improved projects  if a new replacement facility is involved. Likewise, in combining damaged facilities as an improved project, mitigation funding approved for an initial location does not move to the  new location of the  combined facility. Upgrades required to meet applicable codes and standards are not “mitigation measures” because these measures  are part of eligible restoration work.

FEMA evaluates proposed mitigation measures for cost-effectiveness, technical feasibility, and compliance with EHP laws, regulations, and EOs. In addition, FEMA ensures that the mitigation does not negatively impact the facility’s operation or surrounding areas, or create susceptibility to damage from another hazard.

Mitigation measures must be cost-effective. FEMA considers mitigation measures to be cost- effective if any of the following criteria are met:

• The cost for the mitigation measure does not exceed 15 percent of the total eligible repair cost (prior to any insurance reductions) of the facility or facilities for which the mitigation measure applies.

• The mitigation measure is specifically listed in Appendix J: Cost-Effective Hazard Mitigation Measures, AND the cost of the mitigation measure does not exceed 100 percent of the eligible repair cost (prior to any insurance reductions) of the facility or facilities for which the mitigation measure applies.

• The Recipient or Applicant demonstrates through an acceptable benefit-cost analysis (BCA) methodology that the measure is cost-effective. FEMA’s BCA software255 provides appropriate BCA methodologies.

Many mitigation measures that do not meet the first two requirements above prove to be cost- effective based on a BCA. If the mitigation measure is not cost-effective based on the first two criteria, FEMA, the Recipient, and the Applicant will work together to develop a BCA to determine whether it is cost-effective.

A BCA is based on a comparison of the total eligible cost for the mitigation measure to the total value of expected benefits. Benefits include reductions in:

• Damage to the facility and its contents

• The need for emergency protective measures

• The need for temporary facilities

• Loss of function

• Casualties (typically included only for earthquake, tornado, and wildfire mitigation)

254 www.fema.gov/media-library/assets/documents/103279.

255 www.fema.gov/benefit-cost-analysis.

To be eligible, the mitigation measures must directly reduce the potential of future, similar damage to the facility. Generally, eligible mitigation measures are those the Applicant performs on the damaged portion(s) of the facility. If the Applicant proposes mitigation measures that are distinct and separate from the damaged portion(s) of the facility, FEMA evaluates the proposal and determines eligibility on a case-by-case basis considering how the mitigation measure protects the damaged portion(s) of the facility and whether the mitigation measure is reasonable based on the extent of damage. Some examples of such measures include:

• Constructing floodwalls around damaged facilities

• Installing new drainage facilities (including culverts) along a damaged road

• Dry floodproofing both damaged and undamaged buildings that contain components of a system that are functionally interdependent (i.e., cases where the entire system is jeopardized if any one component of the system fails)

If FEMA determines mitigation measures to undamaged portions ineligible as 406 hazard mitigation, the Applicant may request HMGP (Section 404) funding from the State or Territory to provide protection to undamaged portions, while utilizing PA Program (Section 406) mitigation funds to provide protection to damaged portions.

Section 406 hazard mitigation opportunities usually present themselves during facility repair. However, in cases where the Applicant must repair a facility in an expedited manner, it may miss an opportunity to implement mitigation measures during repair. If the Applicant implements mitigation measures after the PA- funded repair is complete, the mitigation work may be eligible; however, FEMA will not provide PA funding for any duplicative work as a result of the subsequent mitigation.

In some instances, the Applicant may implement mitigation measures after the incident occurs but before the incident is declared or before FEMA has the opportunity to evaluate the measure for eligibility. In these cases, the mitigation work may still be eligible if it is cost-effective and FEMA confirms compliance with applicable EHP laws, regulations, and EOs.

If FEMA approves mitigation funding and the

Applicant does not complete the mitigation work, FEMA will deobligate the mitigation funds.

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