Occasionally an applicant may determine that  the public welfare would not be best served by restoring a damaged facility  or its function using FEMA funds. This usually occurs when the service  provided by the facility is no longer needed, although the facility was still  in use at the time of the disaster. Under these circumstances, the applicant  may apply to FEMA to use the eligible funds for an Alternate  Project. Alternate projects include:
   †  Repair or  expansion of other public facilities
   †  Construction of  new public facilities
   †  Demolition of  the original structure
   †  Purchase of  capital equipment
   †  Funding of  cost-effective hazard mitigation measures in the area affected by the  disaster
   †  Funding project  shortfalls due to mandatory NFIP reductions on applicant buildings in  floodplains
   †  Supplemental  funds used on an improved project
   The alternate project option may be proposed for  both small and large projects, but only for permanent restoration projects  located within the declared disaster area. All requests for alternate  projects must be made within 12 months of the Kickoff Meeting and approved by  FEMA prior to construction.
   Alternate projects for governmental entities are  eligible for 90 percent of the approved Federal share of the estimated  eligible costs associated with repairing the damaged facility to its  pre-disaster design, or of the approved Federal share of the actual costs of  completing the alternate project, whichever is less. Alternate projects for  PNP entities are eligible for 75 percent of the approved Federal share, or of  the approved Federal share of the actual costs of completing the alternate  project, whichever is less.
   The proposed alternate project may not be  located in the regulatory floodway and will have to be insured if located in  the 100-year floodplain (see Insurance). Funding may not be used for operating costs or to meet the  State or local share requirement on other public assistance projects or  projects that utilize other Federal grants. Section 406 Hazard Mitigation  funds cannot be applied to an alternate project (see Hazard Mitigation, Section 406).  FEMA must ensure that the proposed projects are an appropriate use of funds  and comply with environmental and historic preservation laws.
   References:   Section 406 (c) of the Stafford Act 44 CFR §206.203(d)(2)
   Public Assistance Guide, FEMA 322, pages 79,  111-112, 134