This administrative policy was codified into law in amendments to the Stafford Act contained in P.L. The cost-shares are reflective of the Stafford Act's fundamental insistence on state participation and that the State "will comply with all applicable cost-sharing requirements of this Act." Section 406 is the repair or replacement of public infrastructure. An adjustment of the cost-share from 25% state and local share of a project to 10%, as proscribed in regulation, can greatly reduce the costs of the disaster for state and local governments while increasing federal expenditures. Some have questioned whether the per capita amount employed by FEMA is reasonable based on average per capita amounts of damages for major disaster declarations. Timing and Frequency of Cost-Share Adjustments

In some catastrophic events, such as Hurricane Katrina, the estimated eligible damage amounts crested the cost-share threshold early in the disaster recovery period (in the case of Katrina, two months following the event) and the cost-share was adjusted. These are the waivers intended to be made through FEMA's cost-share adjustment process as defined in regulation using a per capita threshold amount of damage. While the majority of cost-share waivers have met this threshold, others have been included for various reasons that will be detailed throughout this report. Cost Shares for U.S. Cost-Share Waivers By Program Area

		Public Assistance Cost-Share Waivers

Sections 403, 406, and 407 are those Stafford provisions that reimburse emergency work, permanent infrastructure repair and debris removal. Unlike the flexibility noted above for the programs with a floor of "not less than 75 percent," the Stafford Act states that "the Federal share shall be 75 percent," necessitating legislation to adjust that amount for the ONA program. Cost-share reduction legislation for the Gulf Coast (including the declarations for Hurricanes Katrina, Rita, and Wilma) did not address the HMGP section; as a result, the cost-share for hazard mitigation costs remains at 75 % federal and 25% state and local. Under P.L. Hurricanes Hugo and Andrew and a Different Cost-Share

During the disaster-quiescent 1980's the question of cost-share was not a prominent part of the discussion for either Congress or the state and local governments affected by disaster declarations. This second threshold was used to qualify the nine Midwestern states most impacted by the flooding for a reduced cost-share. Also, the decision to grant cost-share waivers to Florida and Texas may have been in recognition of the amount of help both states had provided to Mississippi and Louisiana, respectively, in both emergency management resources and in hosting large numbers of evacuees in the wake of the storms of 2005. There have been several instances when Congress chose to adjust a state's cost-share by legislation. That for states in which the President declared a major disaster (as that term is defined in Section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 USC 5122) on September 24, 2005, as a result of Hurricane Rita, each county or parish eligible for individual and public assistance under such declaration in such states will be treated equally for purposes of cost-share adjustments under such Act, to account for the impact in those counties and parishes of Hurricanes Rita and Katrina. 111-32 , reduced cost-shares for damages from Hurricane Ike. However, the per capita damage amounts in both states were far below the per capita qualifying criteria. However, the major disaster declarations for the affected states did contain a cost-share adjustment for the Direct Federal Assistance provided for power and transportation help. In that event, the Bush Administration established the federal nature of the contribution early in the process. Certainly the broader authority to judge what is or is not a disaster under the Stafford Act has provided president's since 1988 with more latitude to approve unusual or "marginal" events as disasters or emergencies. But regulatory cost-share waivers, if applied broadly and without the compelling support of recent congressional legislative waivers, could chip away at that commitment and complicate, rather than strengthen, the federal-state partnership

	Conclusion

The cost-shares for the funding of Stafford Act programs speak to the cooperative working relationship reflected in that legislation between the two levels of government in addressing disaster response and recovery work. Recent congressional actions demonstrate a recognition of the financial burdens caused by disaster damage, while also demonstrating a willingness to adjust cost-share amounts for events that are not of the scope and size associated with previous cost-share adjustments. The resulting additional assistance provided to states and localities, through more generous cost-shares, increases the overall disaster costs to the federal government. Within this new reality, the cost-share adjustments, and their increase of the federal share, could begin to impinge on the annual budget choices faced by the Obama Administration and Congress.
The Robert T. Stafford Disaster Relief and Emergency Assistance Act (The Stafford Act, P.L. 93-288) includes the Public Assistance (PA) program, Sections 406 and 407 of the act. These sections provide assistance to states, local governments and non-profit organizations for debris removal and rebuilding of the public and non-profit infrastructure. The Stafford Act is a partnership between the federal and state governments and part of the partnership is the notion that state and local governments should have some "skin in the game." That is, they should contribute toward some of the costs incurred by the disaster response and recovery programs. The division of costs between federal and state governments is known as a "cost-share." The language of the Stafford Act defining cost-shares for the repair, restoration, and replacement of damaged facilities provides that the federal share "shall be not less than 75 percent." These provisions have been in effect for over 20 years. The Stafford Act also gives the President the authority to adjust some of the cost-shares. While this authority is long standing, the history of FEMA's administrative adjustments and Congress' legislative actions in this area, are of a more recent vintage.
In all, there have been 245 cost-share adjustments of varying sizes and lengths of time dating back to 1986. In 1998 FEMA promulgated regulations that provide a more consistent and open approach to cost-share adjustments. The overwhelming majority of these cost-share adjustments have been based on that regulatory authority and carried out by the executive branch through administrative actions. However, since 1997, and particularly in the wake of the difficult issues caused by the Gulf Coast storms of 2005, Congress has begun to exercise its authority to adjust cost-shares. The recent trend toward legislative cost-share waivers suggests that Congress may have an interest in continuing to influence the federal/state relationship in providing resources to respond to disaster situations.
The cost-share regulation establishes eligible per capita disaster damage amounts that could qualify a state for cost-share reductions. The per capita amounts are updated on an annual basis. With the adjustment process formalized in regulation, and with larger disasters more frequent in succeeding years, the cost-share waivers have also become more common. Certainly the interest in achieving such a reduction for the state and local share has grown with the awareness of the cost-share adjustments during large disaster events such as Hurricane Katrina. Beyond actions by the executive branch, Congress has adjusted cost-shares through legislation when a state or states may not, or have yet to meet, the per capita threshold. FEMA and the Clinton administration adjusted the cost-shares for some states affected by the 1993 Mississippi River flooding that had not met the per capita policy amount.
In 2007, Congress adjusted the cost-shares following the Gulf Coast hurricanes of 2005 for states that did not meet the identified threshold and also waived cost-shares for programs other than the PA program. Most recently, in P.L. 111-32, Congress again adjusted the state cost-shares for the two states most impacted by Hurricane Ike in 2008. The legislation also waived the cost-share for two other states, separate from the hurricane area, with major disaster declarations that did not meet the qualifying threshold. There have been multiple cost-share adjustments for the Hurricane Sandy major disaster declarations. Broader administrative cost-share adjustments for the major disaster declarations for Hurricane Sandy will depend on whether the eligible per capita disaster damage totals mandated by regulation are reached. While the expenditures for Sandy are large, so too are the populations in the affected states.
Under the Insular Areas Act, a different threshold is implemented for U.S. territories that provides a more generous cost-share for smaller disaster events in several of the territories. Cost-share waivers have also been frequently applied.
Cost-share waivers can be a great help to a state and its communities seeking to recover from a disaster event and reeling from the economic problems caused by the disaster. But such waivers also reduce the supplemental nature of Stafford Act funding through the increase of the federal share. How such cost-share waivers are administered is an issue that FEMA has addressed through regulation and Congress has addressed through legislation. This report will be revised as warranted by events.