In their lawsuit, California, New York, Maryland and 18 other states said the impact of the FEMA program has been devastating, with pre-disaster mitigation projects under development for years suddenly at risk. FEMA announced in April that it would rescind and reallocate funding for project awards that had not already been distributed, and that the program would be terminated altogether going forward. 

The states said the federal action violated the Administrative Procedures Act as well as the U.S. Constitution’s separation of powers doctrine. 

In its ruling, the U.S. District Court in Boston sided with the states, noting that funds for the Building Resilient Infrastructure and Communities program had been congressionally appropriated. “At the time of each new ... appropriation, Congress contemplated that FEMA would … dedicate these funds to the [BRIC] program,” the court said, concluding that redirecting the funds to post-disaster relief grants violates what Congress intended. 

Over the past four years, FEMA has selected nearly 2,000 projects to receive roughly $4.5 billion in Building Resilient Infrastructure and Communities funding nationwide, according to the Maryland attorney general’s office, which notes that the state was awarded approximately $80 million between 2020 and 2023, and will be directly impacted. The effects are already being felt: a $36-million flood mitigation project in Crisfield, Md., has been put on hold indefinitely. 

FEMA did not respond to ENR's request for comment on its plans for an appeal.

No Vote on Panel’s Recommendations

FEMA itself is facing a major shakeup. U.S. Dept. of Homeland Security Secretary Kristi Noem has repeatedly called for it to be eliminated in its current form. On Dec. 10, the agency announced the appointment of Gregg Phillips, who has been a vocal critic of FEMA and gained notoriety in 2016 with election conspiracy claims, to one of its top posts—head of the Office of Response and Recovery, which coordinates federal, state and tribal response to natural disasters. 

A day later, the FEMA Review Council, a panel appointed by Trump and chaired by Noem and U.S. Defense Secretary Pete Hegseth, abruptly cancelled a vote scheduled for that day, to release their report with recommendations for revamping the agency following reports from several news agencies that Noem had reduced the document to 20 pages from 160. Registrants later received an email from FEMA stating that the report release and vote would be rescheduled. 

Pete Gaynor, FEMA administrator during the first Trump administration, said Dec. 15 during a Carnegie Endowment for International Peace webinar that the council had put “a lot of due diligence in the report, and it was going to be the North Star in some ways.”  

The report is the culmination of input based on several months of full panel and separate meetings with state and local leaders across the U.S. Members of the panel include Texas Gov. Greg Abbott (R) and Kevin Guthrie, executive director of Florida’s Division of Emergency Management. 

According to news stories first reported by CNN, the review council recommended elevating FEMA to a cabinet-level agency, reducing its staff by as much as 50%, shifting public assistance reimbursement to community block grants and privatizing the National Flood Insurance Program. 

Gaynor expressed skepticism that the flood insurance program could be privatized, because insurance companies won’t want to cover properties that are most at-risk, which are those most often covered through the flood insurance program, he said. “It's a tall order to say we're just going to pass off [NFIP] to the private sector. I don't think it's going to happen.”

The central elements from recommendations in the leaked report are similar to those in legislation approved by lawmakers on the House Transportation and Infrastructure Committee Sept. 3 in a bipartisan 57-3 vote, advancing the bill to the House floor. 

Major reform is possible by using the council draft as a starting point, and pegging its key elements to the legislation in the House, suggested Danielle Aymond, an attorney at Baker Donelson who specializes in disaster recovery and emergency management cases. “I think we can hit the accelerator and before hurricane season, we can have totally reformed the system through that vehicle,” she said during the Carnegie Endowment webinar. 

More than 80 survivors of natural disasters were in Washington, D.C., Dec. 15 and 16 to push for passage of the House bill, which currently has 40 sponsors—24 Republicans and 16 Democrats. T.J. Ware, an incident commander with United Disaster Relief, a disaster-survivor advocacy nonprofit, told ENR that he is encouraged based on commitments made by lawmakers. “Overall, the reception on the Hill suggests real movement, and a growing understanding that meaningful FEMA reform is both necessary and overdue,” he said.