55706 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

FEDERAL EMERGENCY

MANAGEMENT AGENCY

44 CFR Parts 59, 60, 64, 65, 70, and 75

RIN 3067–AC17

National Flood Insurance Program:

Insurance Coverage and Rates, Criteria

for Land Management, Use,

Identification, and Mapping of Flood

Control Restoration Zones

AGENCY: Federal Insurance

Administration, FEMA.

ACTION: Final rule.

SUMMARY: This final rule establishes a

new flood insurance rate zone, known

as the flood control restoration zone or

Zone AR, to delineate special flood

hazard areas on National Flood

Insurance Program (NFIP) Flood

Insurance Rate Maps (FIRMs). The rule’s

underlying statute stipulates that flood

insurance be made available at premium

rates appropriate to the temporary

nature of flood hazards during the

period when a flood protection system

is being restored. The Zone AR

designation is a means to recognize that

a flood protection system is being

restored to provide protection during

the base flood event, and to reduce the

flood insurance costs and elevation

requirements for properties that will be

exposed to an increased risk of flooding

during the restoration period. In return

for the availability of flood insurance

this rule also establishes minimum

flood plain management requirements

and provides regulatory guidance for

implementing statutory requirements.

EFFECTIVE DATE: This rule is effective

November 26, 1997.

FOR FURTHER INFORMATION CONTACT:

Michael Buckley, Hazard Identification

and Risk Assessment Division,

Mitigation Directorate, Federal

Emergency Management Agency, 500 C

Street SW., Washington, DC 20472,

(202) 646–2756.

SUPPLEMENTARY INFORMATION:

Rulemaking Chronology

Directed under § 928 of Pub. L. 102–

550 to publish regulations on the newly

authorized flood control restoration

zone, FEMA published a proposed rule

on April 1, 1994, 59 FR 15351. Based on

comments on the proposed rule we

made changes for the interim final rule.

In order to meet the statutory 2-year

deadline for publishing regulations, yet

to give the public and interested parties

another opportunity to comment on the

changes we made, we published an

interim final rule on October 25, 1994,

59 FR 53592, with a 45-day comment

period. We extended that comment

period 13 days to December 23, 1994 in

order to permit additional comments

and to hold a public meeting to receive

oral comments to supplement the

record. On December 19, 1994 we held

a public meeting at FEMA headquarters

in Washington, DC to hear from diverse

interest groups, including several of

whom participated by teleconference.

The interim final rule contains

provisions to implement a new flood

insurance rate zone, Zone AR, for areas

designated as a flood control restoration

zone on NFIP maps. It also establishes

minimum flood plain management

requirements and provides regulatory

guidance for implementing statutory

requirements of § 928 of Public Law

102–550, 42 U.S.C. 4014(f), including

procedures for delineating flood control

restoration zones on FIRMs.

We sent copies of the interim final

rule to members of Congress and to

chief executive officers of communities

affected by the rule concurrently with

our submission of the rule to the

Federal Register. We met with House

Banking Committee staff (Senate

Banking Committee staff members were

invited but were unable to attend) to

discuss the provisions in the interim

final rule.

At the request of a Member of

Congress representing several Los

Angeles County communities, FEMA

and the U.S. Army Corps of Engineers

participated in an informational public

meeting in Bellflower, California on

April 22, 1995 to discuss the restoration

of the flood protection system along the

Rio Hondo and Los Angeles Rivers. No

substantive new issues or comments

were raised at this meeting or otherwise

affected the substance of the rule

published today.

Scope of Public Participation

During the comment period provided

for the interim final rule, we received 47

letters, each containing multiple

comments about various issues in the

interim final rule. Most of the letters

represented the local interests of the Los

Angeles and Sacramento area

communities. Those submitting formal

comments on the interim final rule

included: one U.S. Senator, two

members of the U.S. House of

Representatives, community officials

and representatives of local

governments and community agencies,

representatives of the local business

community, and private citizens from

the Los Angeles and Sacramento

metropolitan areas, and state and

national representatives of

environmental and flood plain

management associations.

Twenty-five individuals participated

in the December 19, 1994 public

meeting, including a U.S.

Representative, several Congressional

staff members, local government

officials from Los Angeles, Sacramento,

and Stockton, representatives of

national environmental and flood plain

management associations, staff of

private lobbying firms representing

communities in the Los Angeles and

Sacramento areas, one individual

representing a private citizen, and a

private citizen/local activist.

Participation in the December 19, 1994,

meeting was also available through a

telephone conferencing connection.

Oral comments were recorded and a

written transcript was sent to each of

the meeting participants.

Overview of Comments

Comments on the interim final rule

expressed support for the AR Zone as a

means to accommodate community

participation in the NFIP during the

period required to restore an existing

flood protection system. Several

comments approved creation of uniform

criteria applicable nationwide to

communities affected by decertification

of an existing flood protection system,

and not limited to communities in the

Sacramento and Los Angeles, California

areas. Another noted that the interim

final rule established a reasonable

procedure for such communities, but

recognized the potential damages to

property and threat to life, particularly

where flood depths are significant.

A number of comments indicated

some misunderstanding of the NFIP, its

statutory authority and how the Program

is administered. Created by Congress in

the National Flood Insurance Act of

1968, 42 U.S.C. 4001 et seq., the NFIP

is a voluntary program that was

designed to reduce the loss of life and

property and rising Federal disaster

relief costs caused by flooding. The

NFIP makes federally backed flood

insurance available for property owners

located in participating communities.

Before the Congress created the NFIP,

flood insurance coverage was generally

not available through private insurers

among other things because of adverse

selection and the high cost to identify

flood risks. Under the NFIP the cost of

flood losses is transferred from the

general taxpayer to the flood plain

occupant by requiring owners of flood

plain properties to purchase flood

insurance coverage when obtaining

Federal or federally related financial

assistance for construction or

acquisition purposes. Today property

owners in over 18,500 participating
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55707

communities may purchase flood

insurance.

A number of comments asked that

FEMA withhold issuance of revised

FIRMs identifying the increased flood

hazard, or to issue maps showing the

community as non-floodprone. Some

comments questioned FEMA’s mandate

to identify flood hazards and questioned

why FEMA needs to identify flood

hazard areas. Several comments asked

that FEMA withhold issuance of FIRMs

for a community as long as progress is

being made to restore flood protection.

The National Flood Insurance Act of

1968, as amended by Pub. L. 102–550,

does not give FEMA authority to

withhold publication of maps outright,

or to withhold maps as long as

communities are making progress

toward restoration of the flood

protection system. The legislation

reduces flood insurance costs and

elevation requirements, recognizes the

added flood risk during the restoration

period, and leaves intact the mapping

requirements that have existed since

1968. The maps are required to identify

and delineate the flood hazards, as well

as to identify where flood insurance is

or is not required. Withholding the

maps would not be in the best interests

of the residents of the community who

need to be aware of the flood risk so that

they can make informed decisions that

will protect them and their property.

The 1968 Act requires that FEMA

identify and map flood hazards

nationwide and disseminate the

information to local communities so

that they and their residents can be

aware of the flood risk and take steps to

protect against future flood losses.

During the last 25 years, FEMA has

mapped over 165,000 square miles of

floodprone areas nationwide.

In return for making flood insurance

available, the community must commit

to adopt and enforce NFIP flood plain

management regulations to reduce the

potential for future flood damages in the

identified special flood hazard areas

(SFHAs). Development in these areas is

regulated by local flood plain

ordinances that are designed to reduce

future flood damages by requiring that

new and substantially improved

structures be protected to the base flood

level at a minimum. Experience has

proven these measures effective in

reducing flood losses.

The NFIP’s flood insurance and flood

plain management requirements are

based on flood insurance studies

conducted under contract for FEMA by

other Federal agencies and by private

engineering firms that have a

demonstrated expertise in hydrologic

and hydraulic analyses of flood plains.

From these studies, FIRMs are prepared

that identify the areas of the community

that will be inundated by the 1-percent

annual chance flood, that is, the flood

that has a 1 percent chance of being

equalled or exceeded in any year. The

1-percent annual chance flood standard

has been widely adopted by Federal,

State and local agencies for design and

regulatory purposes.

The 1-percent annual chance flood is

sometimes called the 100-year flood or,

as used in this rule, the ‘‘base flood’’.

‘‘Base flood’’ describes a flood of a

particular magnitude, the 1-percent

annual chance or 100-year flood. There

is a 26-percent chance that a flood of

this magnitude will occur at some point

during the life of a 30-year mortgage.

A number of comments questioned

the constitutionality of the flood

insurance purchase requirement, while

other comments expressed that it should

be individual choice to buy flood

insurance. Major flooding in the early

1970s prompted the Congress in 1973 to

enact certain mandatory insurance

purchase requirements that protect

Federal financial interests in the flood

plain. The mandatory flood insurance

purchase requirements apply to

mortgages and other financial assistance

obtained from a Federal or federally

regulated lender where the security for

the loan is a building or manufactured

housing located in a designated SFHA.

Flood insurance must also be purchased

by recipients of some types of floodrelated disaster assistance under the

Robert T. Stafford Disaster Relief and

Emergency Assistance Act.

Background on the Enactment of Zone

AR Provisions

Several of those commenting

indicated that they were not aware of

the background that led Congress to

authorize flood insurance availability

for flood control restoration zones.

FEMA contracts with other Federal

agencies and private contractors

periodically to restudy flood risks and

revise flood maps when there is

sufficient change in the flooding

conditions to warrant such action.

When the U.S. Army Corps of

Engineers, for example, determines that

a previously certified flood protection

system, such as a levee, no longer

provides protection during the base

flood, under the National Flood

Insurance Act FEMA must identify and

map the resulting floodprone areas.

Within these decertified areas, NFIP

regulations require participating

communities to enforce local flood plain

management ordinances for elevating

new construction and substantial

improvements of existing buildings to

the level of the base flood at a minimum

in order to reduce or eliminate flood

damages. These mandates are without

regard to any actions being taken to

restore a flood protection system.

Flood insurance premiums are

calculated on the actual flood risk to the

building or manufactured housing so

that the cost of flood insurance for new

construction placed below the base

flood level will reflect the increased

risk. In some cases, however, the

community may be taking specific

actions to restore protection to the base

flood level so that the increased flood

risk is considered to be a temporary

situation that will be remedied when

the system is fully restored.

In the 1980s the U.S. Army Corps of

Engineers determined that the levee

systems protecting certain parts of the

Sacramento and Los Angeles areas no

longer provided protection from the

base flood, and decertified those

systems. Under the National Flood

Insurance Act FEMA remapped the

areas no longer protected to the base

flood level. The remapping showed

large areas that would be subject to

flooding from the base flood, with

depths from 1–15 feet in the Los

Angeles area, and as deep as 26 feet in

parts of the Natomas area near

Sacramento. Concern for the costs of

new construction or substantial

improvements to existing buildings, and

concern for the cost of flood insurance

required by law in these areas, caused

communities and various interest

groups to petition the Congress for relief

while the levee systems were being

restored.

To bolster the position of affected

communities in the Los Angeles area, an

economic study prepared at the

University of Southern California (USC)

in 1992 predicted major adverse

economic impacts in the Los Angeles

area if the NFIP flood insurance and

flood plain management requirements

were enforced after decertification of the

levee systems on the Rio Hondo and Los

Angeles Rivers. The findings of the USC

study apparently were important

influences in persuading the Congress to

amend the National Flood Insurance Act

of 1968 to assist communities, such as

those in the Los Angeles and

Sacramento areas, where an existing

flood protection system no longer

provides base flood protection but is

being restored.

In October 1992 Congress enacted the

Housing and Community Development

Act of 1992, Public Law 102–550.

Section 928 of Pub. L. 102–550, 42

U.S.C. 4014(f), created a Flood Control

Restoration Zone (Zone AR) designation

to meet the communities’ concerns. The
55708 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

Zone AR designation is a carefully

crafted and balanced mechanism to

recognize that a flood protection system

is being restored to provide protection

during the base flood event, and to

reduce the flood insurance costs and

elevation requirements while still

providing some level of protection for

properties that will be exposed to an

increased risk of flooding during the

restoration period. Within Zone AR,

Congress reduced elevation

requirements for new construction,

eliminated elevation requirements for

substantial improvements to existing

structures, and capped the flood

insurance rate for insuring such

structures during the interim period

when the flood protection system is

being restored. By enacting § 928,

Congress anticipated that the Federal

government would accept some

additional costs in the form of increased

flood insurance liability and disaster

assistance, and that communities would

accept and enforce reduced flood plain

management requirements in order to

provide a minimal level of flood

protection for new structures built while

the flood protection system is being

restored. In creating the Zone AR

designation the Congress fully and

significantly addressed the economic

concerns addressed in the USC study,

balancing those concerns against the

national need to reduce the cost of

Federal disaster assistance and to have

those whose properties are at risk in the

nation’s flood plains bear a portion of

that risk.

Issues Raised

Major issues were raised in the public

comments about the definition of

developed areas, the requirement to

elevate or floodproof structures outside

of the ‘‘developed’’ area to the base

flood elevation, the federal funding

requirement for the restoration project,

the requirement that construction in

‘‘developed’’ areas be elevated to 3 feet

above the highest adjacent grade,

adherence to a maximum restoration

period and the absence of a ‘‘hold

harmless’’ provision for delays in

achieving restoration within that time

frame, and the requirement to submit

information about the legal status of the

project as part of the application and

submittal requirements for AR Zone

designation. These and other comments

are addressed in the sections that

follow.

Definition of ‘‘Developed Area’’

Several comments were received in

support of the definition of ‘‘developed

area’’ in the interim final rule. There

were also several comments that

expressed concerns about how the

definition is to be applied to vacant land

and infill sites and on issues related to

how ‘‘basic infrastructure’’ is defined

and what public property and facilities

can be included in a ‘‘developed area’’.

Comments also recommended that the

regulations be modified to include

multiple parcels, tracts, or lots of less

than 20 acres in ‘‘developed areas’’

under subsection (b) of the definition

rather than a single parcel, tract, or lot.

Specific comments concerning the

definition stated that the ‘‘developed

area’’ is too restrictive if all vacant land

and infill sites had to have been

previously developed and that

redevelopment of these sites has to be

supported by the infrastructure in place.

Related comments stated that the

supplementary information in the

interim final rule pertaining to the

concepts of ‘‘infill’’ and

‘‘redevelopment’’ is inconsistent with

Pub. L. 102–550 and industryrecognized definitions and practices

related to ‘‘infill’’ and ‘‘redevelopment’’.

Concern was expressed that the terms,

‘‘infill’’ and ‘‘redevelopment’’, which

are unrelated, are being used

interchangeably and that both terms

require the site to have been previously

developed in order to qualify a property

for inclusion in a ‘‘developed area’’. The

comment noted that the Real Estate

Glossary, published by Kenneth

Leventhal & Company, Certified Public

Accountants, defines ‘‘infill

development’’ as ‘‘development of

vacant, scattered sites in a developed

section of a city’’. According to this

definition, the comment stated, ‘‘infill’’

should not presume the existence of

prior structural improvements to qualify

the property to be included in a

‘‘developed area’’. It was recommended

that the definition be clarified to allow

all vacant sites of a city to be included

in the ‘‘developed area’’, including sites

in a natural and undisturbed state. It

was also recommended that the

‘‘developed area’’ include vacant land

that has been improperly subdivided

and vacant land that consists of parcels

and lots of inadequate size and irregular

form.

For simplification and ease of

administration at the local level, FEMA

established a definition for ‘‘developed

area’’ rather than require communities

to identify individually single parcels or

lots that meet a definition for ‘‘infill

sites’’, ‘‘rehabilitation of existing

structures’’, or ‘‘redevelopment of

previously developed areas’’, terms used

in Pub. L. 102–550. ‘‘Developed area’’,

as defined in the final rule at 44 CFR

59.1 (a)–(c) encompasses the larger

urbanized area as well as isolated

developed subdivisions beyond the

urban area. ‘‘Developed area’’ further

encompasses ‘‘vested rights’’ interests

by recognizing land that is planned,

permitted, and where construction is

underway. A community must adopt a

map or legal description designating the

‘‘developed area’’ and submit this

information as part of the Zone AR

application process.

FEMA agrees that clarification is

needed regarding the distinction

between ‘‘infill sites’’ and

‘‘redevelopment’’, and with regard to

whether vacant, undeveloped sites can

be included in ‘‘developed areas’’ as set

forth in the supplementary information

to the interim final rule. We do not

intend to imply that ‘‘infill sites’’ and

‘‘redevelopment’’ are synonymous nor

that an ‘‘infill site’’ presumes the

existence of prior structural

improvements or previous development.

‘‘Infill sites’’ can include: (1) land that

is undeveloped (either in a natural state

or in agricultural production); (2) land

that contains buildings that are

underused, unused, or dilapidated; or

(3) land that had been previously

developed and is now in a nonbuilding

use (e.g., a parking lot). Redevelopment

is generally associated with rebuilding a

site where a building or buildings are

dilapidated or have been previously

torn down.

Infill sites, including vacant,

undeveloped land, can be included in a

‘‘developed area’’ as long as the site

meets the criteria established under

paragraph (b) of the definition of

‘‘developed area’’. The ‘‘infill site’’ must

be contiguous on at least 3 or more sides

by a ‘‘developed area’’ meeting the

criteria of paragraph (a) of the

definition. This is consistent with the

supplementary information contained in

the proposed rule that states that

subsection (b) of the definition of the

‘‘developed area’’ addresses those urban

fringe areas that, because of their

relationship to surrounding developed

areas, should be considered ‘‘infill site’’

areas. FEMA believes that with this

clarification it is unnecessary to alter

the regulations.

Older subdivisions that remain

undeveloped because they contain lots

that are considered nonconforming

under local zoning, subdivision, or

planning regulations are considered

‘‘infill sites’’ and would qualify for

inclusion in a ‘‘developed area’’ in

accordance with paragraph (b) of the

definition. This type of subdivision may

also qualify under paragraph (c) for

‘‘vested rights’’ if the subdivision has

been replatted and development is

underway in accordance with this

paragraph.
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55709

A comment was made that the term

‘‘basic infrastructure’’ is not sufficiently

defined. Another comment asked FEMA

to clarify whether areas that require

substantial upgrading of infrastructure

are still considered ‘‘developed areas’’ if

all other conditions are met. In order to

sustain a primarily urbanized, built-up

area in accordance with paragraph (a) of

the definition of ‘‘developed area’’, a

certain level of infrastructure would

have to be in place. The term, ‘‘basic

infrastructure’’, is used because the

level of infrastructure needed to sustain

any combination of industrial,

residential, and commercial activities

will vary from community to

community.

Subsection (a)(1) of the definition of

‘‘developed area’’ is designed to have

the community designate an area that is

generally recognized as ‘‘urbanized’’ as

opposed to a land use pattern that is

undeveloped or is in agriculture.

Subsections (a)(2) and (a)(3) address

those isolated areas beyond the urban

core that are considered urbanized or

developed because the land is primarily

built-up in commercial, industrial, or

residential uses. FEMA recognizes that

infrastructure in older, urbanized areas

that is in substandard or poor condition

may need to be substantially upgraded

in areas that are being redeveloped. As

long as an area meets one of the three

criteria under paragraph (a) it can be

included in a ‘‘developed area’’.

Infrastructure would not have to be

substantially in place within the site

under paragraph (b) of the definition of

‘‘developed area’’ since the land may be

undeveloped or in agriculture, but

public utilities must be in place near the

edge of the site and can be extended

into the site. For example, the

community should be able to extend

sewer lines readily that are near the

edge of the site. The infrastructure

would have to be substantially in place

under paragraph (c) of the definition in

order to sustain the structures that are

built already or the construction that is

underway under the criteria established

in this paragraph. FEMA believes that it

is unnecessary to alter the regulations to

clarify this point.

In addition, a comment recommended

that the regulations clarify that all

public property and facilities, existing

and planned, including publicly-owned

open space, are included in ‘‘developed

areas’’.

Public facilities are included in the

category of infrastructure per paragraph

(a) of the definition of ‘‘developed area’’

since public facilities are needed to

support and sustain a primarily

urbanized, built-up area and provide

public services related to the health,

safety, and welfare of the population. As

stated in the supplementary information

to the interim final rule, the term

‘‘public facilities’’ in paragraph (a)

encompasses buildings and facilities,

such as municipal buildings (e.g., court

houses, city halls), schools, hospitals,

and publicly-owned open space, such as

public parks and recreational facilities,

and historic sites. The term ‘‘public

facilities’’ also encompasses quasipublic facilities and services, such as

museums, churches, and sports

facilities. Public facilities can include

existing as well as planned facilities as

long as the site for the public facility

meets one of the criteria established

under the definition of ‘‘developed

area’’. FEMA believes that it is

unnecessary to alter the regulations to

clarify this point further.

A comment said that it was unclear

why the exception under subsection (b)

of the definition of ‘‘developed area’’

pertains to only a single parcel, tract or

lot and does not apply to multiple

parcels, tracts, or lots of less than 20

acres. FEMA agrees that it is not

necessary to require that subsection (b)

of the definition of ‘‘developed area’’ be

tied to a single parcel, tract or lot. We

modified subsection (b) of the definition

of ‘‘developed area’’ to apply to multiple

parcels, tracts or lots, as long as the

combined parcels, tracts, or lots are less

than 20 acres and are contiguous on at

least three sides to areas meeting the

criteria of paragraph (a) of the definition

of ‘‘developed area’’ at the time the

designation is adopted.

Comments recommended that FEMA

revise the regulations to recognize areas

as developed when they have final

zoning land use approvals from local

government agencies; when they are

entirely non-residential; when funding

for the restoration project is provided

(local or shared with the Federal

Government); and when construction of

the restoration project is underway, and

completion is imminent.

FEMA established criteria to address

concerns for development that has been

planned, permitted, and construction is

underway. The definition of ‘‘developed

area’’ addresses ‘‘vested rights’’ by

establishing criteria for determining a

‘‘developed area’’ that is planned,

permitted, and where construction is

underway and infrastructure and

structures are being built. Paragraph (c)

of the definition of ‘‘developed area’’

would recognize areas as ‘‘developed’’

where the investment in the land and

infrastructure is substantial and

development, residential or nonresidential, is underway. FEMA believes

it is unnecessary to tie the criteria under

subparagraph (c) of the definition for

addressing ‘‘vested rights’’ to the status

of the restoration of the flood protection

system since the community is only

required to adopt the definition of

‘‘developed area’’ when it qualifies for

the Zone AR designation.

In order for FEMA to designate a flood

control restoration zone, Pub.L. 102–550

requires that the flood protection system

must be deemed restorable by a Federal

agency, a minimum level of protection

is provided, and the restoration is

scheduled to be completed within a

designated time period. FEMA believes

that it is unnecessary to alter the

regulations to clarify this point further.

Flood Plain Management and Land Use

Requirements in a Flood Control

Restoration Zone

We received comments concerning

the elevation requirements in the

interim final rule. Comments supporting

the elevation requirements noted that

those requirements comply with the

statutory provisions and strike a balance

between development interests and the

public interest in protecting new

development that will be exposed to

increased flood damage until the

restoration is complete. Comments

objecting to the elevation requirements

expressed concern that the increased

costs associated with elevating new

construction would adversely affect

development in communities. Several of

these comments recommended that

FEMA amend §60.3(f) to allow for

elevations of less than 3 feet in

developed areas when circumstances

warrant a lower elevation.

Several comments stated that

according to the legislative history and

the requirements in Pub.L. 102–550,

FEMA has the flexibility to allow for

less than the 3-foot elevation. The

comments also stated the opinion that

the interim final rule ignores a Senate

Committee report that directed FEMA to

establish flexible elevation requirements

where it is not practical or feasible to

elevate above 2 feet citing several

examples when a lower elevation might

be appropriate. These examples

involved considerations such as lot size,

access, incremental cost relative to flood

risk exposure, and length of the

restoration period. Several comments

recommended that the elevation

requirement be lowered to 2 feet

because seismic design requirements

that would apply when elevating to 3

feet would increase costs significantly.

Comments were also made that the

interim final rule effectively precludes

development in areas outside of the

‘‘developed area’’ due to the practical

limitations of elevating or floodproofing

when flood depths exceed 5 feet. These
55710 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

comments recommended that FEMA

amend the regulations to reduce the

elevation requirement for nonresidential structures in areas outside of

‘‘developed areas’’ because these

structures are not subject to the same

risks as residential structures and can be

designed to avoid collapse or movement

due to flooding. That recommendation

also suggested that a standard notice

and waiver agreement could be

executed by the owner of a commercial

building and flood insurance could be

required at appropriately higher rates.

The comments that cited the

legislative history for flexible elevation

requirements of less than 3 feet refer to

the report by the Committee on Banking,

Housing, and Urban Affairs United

States Senate, Report 102–332, for the

National Affordable Housing Act

Amendments of 1992, dated July 23,

1992. This report was for an earlier

legislative proposal to establish Zone

AR. Subsequent to this earlier proposal,

the legislation underwent a considerable

change to address Congressional

concern over increased risk within deep

flood plains that are currently less

developed or undeveloped. The concern

for deep flood plains was expressed in

the Congressional Record, dated October

8, 1992 (144 Cong. Rec. S17910), on the

final version of Pub.L. 102–550.

Furthermore, the October 8, 1992 record

indicated that ‘‘FEMA shall establish

flood plain management requirements

for new construction and substantial

improvements for less developed areas

of Los Angeles and Sacramento and for

other communities that may be eligible

for the Zone AR’’. There were no

comments in the Congressional Record

of the Senate or the House (144 Cong.

Rec. H11471, dated October 5, 1992) on

the final version of the Pub.L. 102–550

that refer to flexible elevation

requirements of less than 3 feet.

In establishing the flood plain

management requirements for

communities eligible for Zone AR

designation, FEMA is consistent with

Pub.L. 102–550. Pub.L. 102–550

stipulates that the NFIP minimum

elevation requirements for new

construction shall not exceed 3 feet in

Zone AR for ‘‘in-fill sites’’ and

‘‘redevelopment of previously

developed areas’’ no matter what the

flood depth. Whether base flood depths

behind a decertified flood protection

system are 5 feet, 15 feet, or 25 feet in

a ‘‘developed area’’ of a community, the

final rule only requires that structures

be elevated to 3 feet.

If base flood depths are less than 3

feet in either the ‘‘developed area’’ or

areas outside the ‘‘developed area’’, the

property owner need only elevate the

structure to the base flood depth, (i.e.,

elevate the structure only to 1 or 2 feet).

Congress did not intend the flood

plain management requirements in Zone

AR to deter property improvements.

Consistent with Pub.L. 102–550, there

are no elevation requirements for

‘‘rehabilitations to existing structures’’,

including substantial improvements.

FEMA believes Pub.L. 102–550 is

clear in establishing flood plain

management criteria for areas outside of

the ‘‘developed area’’. Pub.L. 102–550

establishes that ‘‘flood plain

management criteria shall not exceed 3

feet above existing grade for new

construction, provided the base flood

elevation based on the disaccredited

flood control system does not exceed 5

feet above existing grade, or the

remaining new construction is limited

to in-fill sites, rehabilitation of existing

structures, or redevelopment of

previously developed areas’’. The final

rule is consistent with Pub.L. 102–550.

Pub.L. 102–550 and the final rule do

not preclude development in areas

outside of the ‘‘developed area’’ as

claimed in several comments.

Residential and non-residential

structures can be built in areas outside

of the ‘‘developed area’’ as long as they

are built in accordance with the

minimum NFIP flood plain management

criteria. These criteria address

Congressional concern for deep flood

plains. While the NFIP flood plain

management criteria require the

elevation of residential structures,

nonresidential structures may be either

elevated or floodproofed. The

floodproofing criteria in the NFIP

Regulations [44 CFR 60.3(c)(3) and (4)]

require that walls below the base flood

elevation be substantially impermeable

to the passage of water and with the

structural components capable of

resisting hydrostatic and hydrodynamic

loads and effects of buoyancy. If

floodproofing is used in ‘‘developed

areas’’ and in other areas where flood

depths are less than 5 feet, nonresidential structures need only be

floodproofed to 3 feet.

The argument by respondents that

non-residential structures in flood

plains do not pose the same risks to lifesafety and to property as residential

structures understates the true impacts

of flooding and property loss. The

flooding of non-residential structures

does pose life-safety risks when flood

fighting takes place. When the flooding

has receded, damaged commercial or

industrial areas have severe economic

impacts on the community not only due

to damages to insured and uninsured

structures and their contents but also

due to the temporary or permanent loss

of jobs. This economic impact can often

go beyond the community with flood

losses being passed on to the taxpayer

in general through a variety of programs

and mechanisms, such as disaster

assistance and reduction in Federal,

State, and local tax revenues, including

casualty loss deductions on income

taxes and reductions in real property tax

assessments. In addition to these

impacts, exposure of the NFIP will also

be extensive considering that FEMA

provides insurance coverage of $500,000

for non-residential structures and

$500,000 for contents for a total

coverage of up to $1 million per

structure.

Pub.L. 102–550 accommodates the

needs of communities within

‘‘developed areas’’ through reduced

elevation requirements for new

construction while the flood protection

system is being restored yet recognizes

that properties will be exposed to an

increased flood risk during the

restoration period. Before this law was

passed, all new construction and

substantial improvements in areas

protected by a flood protection system

which no longer provides base flood

protection were required to be elevated

to the base flood elevation. Therefore, in

‘‘developed areas’’ that have deep flood

plains with flood depths of, for

example, 10, 15, or 20 feet, 3 feet

represents a substantial reduction in

elevation over what would otherwise be

required.

Given the increased flood risk to

which properties will be exposed during

the restoration period, the 3-foot

elevation requirement in ‘‘developed

areas’’ and in other areas where flood

depths are less than 5 feet will reduce

damages to structures that would

otherwise result if there were no

protection. If the flood protection

system is not restored, the 3-foot

elevation offers protection to structures

built during the time the Zone AR was

in effect. The 3-foot elevation may only

provide minimal protection in a total

failure of the flood protection system.

However, 3 feet of elevation would

afford protection from flood events that

may exceed the capacity of the

decertified flood protection system,

which at a minimum must provide

protection from a 3-percent annual

chance flood event. The 3-percent

annual chance flood has a 60 percent

probability of occurring during the life

of a 30-year mortgage, and 26 percent

probability in a 10-year period.

For example, where overtopping of

the flood protection system results in

sheet flow, surface water runoff, and

localized ponding rather than deep

flooding, the 3-foot elevation will
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55711

reduce damages. The elevation

protection will also reduce damages

from levee seepage and boil problems,

and from pump failures and stormwater

and sewer backups. If flood depths are

higher than 3 feet, the 3-foot elevation

requirement will minimize the number

of structures that are substantially

damaged by lowering the flood depth

within the structure.

Furthermore, the impact of the 3-foot

elevation on new construction in Zone

AR is not significant considering that

this requirement may be partially

satisfied by building code requirements

unrelated to the NFIP that will result in

new structures being built at least 6–28

inches above grade.

For crawl space construction, all three

national building codes (Uniform

Building Code, National Building Code,

and Standard Building Code) require a

minimum clearance of 18 inches

between the ground and untreated wood

floor joists. Allowing for a joist height

of 8 to 10 inches and an average

subflooring/flooring thickness of 5/8 to

1 inch for common crawl space

construction, the top of the lowest floor

can be as high as 27 to 29 inches above

the adjacent exterior grade. Thus, a new

residential structure on a crawl space

foundation in Zone AR would need to

be elevated by an additional 7–9 inches,

not a full 36 inches, to meet the 3-foot

requirement. Additional building code

requirements are not triggered by this

increase even in areas subject to seismic

hazards.

For slab-on-grade residential and nonresidential structures, the national

building codes require the top of the

slab to be at least 6 inches above

adjacent exterior grade to provide

protection from decay due to moisture.

Standard practice is to construct the

slab so that its top is at least 8 inches

above the adjacent grade to provide

protection from insects. Therefore, a

new slab-on-grade residential or

nonresidential structure would need to

be elevated by a maximum of 28 to 30

inches to meet the 3-foot elevation

requirement.

For floodproofing a non-residential

structure in accordance with the NFIP

criteria (as an alternative to elevating

the structure), the increased level of

protection needed is again 28–30

inches.

Local code requirements for site work

for slab-on-grade construction generally

specify that positive drainage must be

provided away from residential and

non-residential structures. These code

requirements, which are also unrelated

to the NFIP requirements, can result in

the addition of several inches to the

finished grade elevation before the slab

is constructed. As a result, the amount

of additional elevation required to meet

the 3-foot requirement may be further

reduced.

We also note that where Zone AR

flood depths are less than 3 feet, new

crawl space and slab-on-grade

structures, both residential and nonresidential, may require little or no

additional elevation.

The over 18,500 participating

communities in the NFIP are required

under their flood plain management

ordinances to regulate all flood plain

development. In doing so, these

communities require that all new

construction of residential structures in

flood plains be elevated to or above the

base flood elevation and that new nonresidential structures in flood plains be

elevated or dry floodproofed to or above

the base flood elevation. The over 2

million structures built in flood plains

since 1975 and the over 800,000 postFIRM flood insurance policies for

structures built following community

adoption of NFIP flood plain

management requirements are evidence

that development does not halt when

flood plains are designated and flood

plain regulations are adopted and

enforced by communities. Much of this

development has occurred in flood

plains that are subject to elevation

requirements higher than the 3-foot

requirement in this Final Rule.

Experience under the NFIP indicates

that protecting structures to the base

flood is achievable by builders,

developers, architects, and engineers.

Elevation on earth fill or standard

foundation systems, such as solid

concrete foundation walls, are typical

elevation techniques that have been

used since the NFIP’s inception.

Experience also indicates that elevation

is cost-effective when the benefits of

reduced flood losses are compared to

the additional cost of elevating to the

base flood elevation. In fact, structures

elevated to or above the base flood

elevation are 77 percent less likely to

suffer damage than those constructed

prior to community participation in the

NFIP.

Federal Funding Requirement

A great number of those commenting

objected to the certification requirement

in § 65.14(e)(6) of the interim final rule

that the design and construction of the

restoration project involve Federal

funds in order for the community to be

eligible for the Zone AR designation.

Comments offered a number of

reasons why the Federal funding

requirement should be removed from

the regulations and suggested various

alternatives to the Federal funding

requirement as a means to insure timely

completion of the restoration. These

include: (1) the statute does not require

eligibility to be contingent on Federal

funding; (2) there are adequate

safeguards in the interim final rule to

assure timely completion of restoration

projects without the requirement of

Federal funding; (3) the Federal funding

requirement is unnecessary as long as

the restoration project is certified by a

Federal agency; (4) regardless of the

project’s source of funding, FEMA has

the authority to replace the Zone AR

designation with a Zone AE designation

if the community does not meet the

restoration schedule; (5) Federal

funding should not be required, but

design and construction standards by

competent (including Federal)

authorities need to be followed; (6)

FEMA should promote restoration of the

system by the local community because

communities may be in a position to

complete restoration in a timely fashion;

(7) FEMA should devise criteria that

would satisfy the Agency that the source

of local funds was reliable, committed,

and secure, such as providing for a

performance bond; and (8) Federal

funds for restoration projects may not be

available to communities.

FEMA has carefully considered the

comments on the Federal funding issue

and finds merit in removing the

requirement that the restoration project

involve Federal funding as a

prerequisite for designating Zone AR.

Therefore, the final rule is revised at

§ 65.14(b) to extend Zone AR eligibility

to communities where the restoration

project does not involve Federal funds.

We remain concerned that failure to

complete the restoration for any reason

will permanently expose structures to

an increased flood risk if built below the

base flood elevation while the Zone AR

is in effect. However, we have balanced

that concern with an understanding that

communities are increasingly

committed to use local funds to restore

flood protection systems, particularly as

Federal funding sources are reduced.

FEMA has devised criteria to ensure

that the source of local funding is

reliable, committed, and secure.

Specifically, § 65.14(e)(2)(vi) provides

that if a community does not receive

Federal funds for constructing the

restoration project, then the community

must submit evidence that 100 percent

of the total financial project cost of the

completed flood protection system has

been appropriated from other sources.

This measure will give FEMA adequate

assurance that financial resources have

been committed to assure completion of

the restoration project.
55712 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

Note at § 65.14(h)(3) that in the

application requirements for restoration

projects not involving Federal funds the

community must submit a copy of a

study, certified by a registered

Professional Engineer, that demonstrates

that the restored system will meet all

applicable requirements of 44 CFR Part

65.

The final rule further stipulates at

§ 65.14(b)(2) that a community that does

not receive Federal funds for the

purpose of constructing the restoration

project must complete restoration of the

system within 5 years from the date the

community submits its application for

designation of a flood control

restoration zone. In FEMA’s experience,

a 5-year period is adequate time for

planning, preliminary and final design,

construction, and all review processes

of locally initiated projects that do not

involve Federal funds. A typical, locally

funded project often takes no more than

3 years to complete from project

inception through final construction.

We further expect that limiting the

duration of the Zone AR designation

would limit the number of structures

that would be built and exposed to

permanent increased flood risk if, for

any reason, the restoration were not

completed.

A community that does not receive

Federal funds for restoration of the flood

protection system is not eligible for a

finding of adequate progress under 44

CFR § 61.12, and is required to complete

the restoration project within the 5-year

period.

The final regulations provide that the

Zone AR designation will apply only to

the restoration of existing Federal flood

protection systems. A comment was

made that the NFIP is a national

program and should apply in all of the

country, not just in areas that have flood

control systems that were built by the

Federal government. We determined,

however, that this provision is in the

best interest of the NFIP, is consistent

with the existing regulatory provisions

of § 61.12 that pertain to flood

protection systems involving Federal

funds, and is consistent with the intent

of § 928 of Pub. L. 102–550.

Maximum Restoration Period

Several comments expressed concern

that the interim final rule extended the

maximum restoration period from 5 to

10 years. Other comments objected to

FEMA’s inclusion of a specific

maximum restoration period such as the

10-year maximum restoration period

incorporated in the interim final rule.

Others stated that a specific maximum

restoration period is contrary to the

statutory language and the legislative

intent and that FEMA should permit the

Zone AR designation as long as progress

is being made to restore protection.

Since insurance rates are subsidized

and structures can be built below the

base flood elevation during the

restoration period, a longer restoration

period further increases the potential

flood losses if flooding occurs before the

flood protection system is restored.

Some comments suggested that FEMA

strictly enforce a maximum restoration

period and that it aggressively negotiate

as short a restoration period as possible

with the Federal agency and community

project sponsors. A comment noted that

while the 10-year restoration period

provides a more reasonable time frame

for completing a federally funded

project, it also increases the time that

existing structures and future

construction are exposed to potential

damage. They suggested that to balance

the increase in the maximum restoration

period, FEMA should restrict the

definition and designation of

‘‘developed’’ areas and require strict

adherence to the Zone AR elevation

requirements, or impose stricter

requirements so as to limit the potential

for flood damage during the restoration

period.

FEMA is charged by the Congress to

administer a sound and effective flood

insurance program within the bounds of

the authority provided by statute. Public

Law 102–550 provides for the Zone AR

designation when a flood protection

system can be restored in a

‘‘designated’’ period of time. Since the

Zone AR was intended as an interim or

temporary flood hazard designation,

eligibility for the benefits that the

designation confers is contingent on

completion of the project within a

specific time frame. We concluded that

the statute authorizes FEMA to

designate a maximum restoration

period. These regulations designate a

10-year restoration period for federally

funded projects and a 5-year restoration

period for non-federally funded

projects.

Because it is in the Program’s best

interest to promote timely completion of

the restoration, FEMA will negotiate as

short a restoration period as possible,

recognizing that there may be legitimate

needs for adjusting the schedule as the

work progresses. Such adjustments may

not exceed the maximum applicable

restoration period.

‘‘Hold Harmless’’ Provision for Delays

in Complying With Restoration

Schedule

Many comments urged FEMA to

include a ‘‘hold harmless’’ provision

whereby the Zone AR designation

would be removed only if the

community failed to perform its

assigned responsibilities to restore flood

protection.

The final rule does not incorporate a

‘‘hold harmless’’ provision for delays

that exceed the applicable restoration

period. The final rule retains the

provision at §64.14(g) for minor

adjustments in the restoration schedule.

Central to this position is FEMA’s belief

that the flood control restoration zone

was not meant to be a long-term or

permanent flood insurance zone

designation. A provision to extend the

Zone AR designation or the inclusion of

a ‘‘hold harmless’’ provision, in our

opinion, would be contrary to the

statute.

Requirement To Disclose Information

About Litigation or Administrative

Actions

Several comments concerned the

requirement at §65.14(e)(1) that the

community’s application include a

statement whether the flood protection

system is the subject of pending

litigation or administrative actions.

Other comments suggested that if FEMA

retained the disclosure requirement

then the final rule should include an

affirmative statement that such litigation

would have no bearing on FEMA’s

decision to approve a community’s

application for Zone AR designation.

Similar comments expressed the

opinion that FEMA cannot anticipate

the outcome of litigation or evaluate the

validity of legal challenges. Some

comments expressed concern that the

section is ambiguous with respect to

FEMA’s obligation when litigation

exists and the community would have

no knowledge of the plaintiff’s litigation

plan.

One environmental organization’s

comment supported FEMA’s position on

the litigation issue. Another comment

noted that the 10-year limit on the Zone

AR designation is sufficient to revoke

the Zone AR designation without

adding the litigation issue as a decisionmaking clause. The 10-year restoration

period limits the duration of the Zone

AR designation after it has been granted,

whereas the litigation issue relates to

FEMA’s decision-making prior to

granting the designation.

We continue to maintain that FEMA

needs to be fully apprised of any and all

potential obstacles to the timely

restoration of the flood protection

system prior to granting the Zone AR

designation.

The Zone AR designation permits

new construction and substantial

improvements to existing structures to

be built below the base flood elevation
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55713

despite knowledge that those structures

will be exposed to an increased risk of

flood damage. FEMA must insure such

structures at a subsidized rate that does

not reflect the actual flood risk to which

the structure is exposed.

In contrast, new structures and

substantial improvements to existing

structures in SFHAs that are not

designated as Zone AR are required to

be elevated to the base flood level.

Flood insurance for any structures that

might be built below the level of the

base flood would be insured at actuarial

rates that reflect the actual flood risk.

The Zone AR elevation and insurance

provisions are justified only if there is

a clear expectation that the increased

flood risk is of short duration and that

full protection will be restored in a

timely fashion. Protracted litigation

could significantly impede a

community’s progress in completing the

restoration according to schedule and

could even cause the restoration never

to be completed. As a result, those

structures built below the base flood

level while the Zone AR was in effect

would be exposed permanently to a

greater risk of flooding, with the NFIP

assuming a considerable potential

liability when insuring those structures.

The Zone AR designation increases

the risk that the NFIP assumes by

insuring buildings and manufactured

housing built or installed below the base

flood level. FEMA must carefully assess

the projected viability of the restoration

project and weigh any obstacles to that

completion before granting a flood

control restoration zone designation.

Notice of the litigation or administrative

action would alert FEMA to be cautious

in evaluating the community’s

application.

The community may not be able to

predict with full accuracy the litigation

or administrative action plan or their

outcomes. Given that the Zone AR

designation is applicable for a fixed

maximum time and can be applied only

once for a given restoration, community

officials should carefully consider

litigation and administrative action

times before applying for the Zone AR

designation.

The existence of litigation would not

necessarily result in the denial of the

community’s application. However, we

are not prepared to include within the

regulation an affirmative statement that

the existence of litigation will have no

bearing on FEMA’s decision with regard

to a community’s application. We do

not consider the rule to be ambiguous as

to FEMA’s obligation when it is

determined that the restoration project

is the subject of litigation or

administrative action because there is

no specific action mandated by such a

finding. The existence of litigation is

one of several elements that FEMA will

consider in making the decision

whether to grant Zone AR designation.

The final rule retains the litigation

disclosure provision at §65.14(e)(1)(i) as

one of the several application

requirements.

Limitations on Zone AR Designation

We received a number of comments

that FEMA include regulatory language

to specify that communities will be

eligible for the Zone AR designation

should the restored flood protection

system be decertified again. Although

we clarified our position in the

supplementary information to the

interim final rule, the comments

expressed concern that we did not

change the regulatory text. Those

commenting believed that the regulatory

text could be interpreted to exclude

subsequent Zone AR designations in the

event that a fully restored system were

to be decertified again and that the

clarification contained in the

supplementary text would not be

binding upon the agency.

We made minor revisions to the rule

at §65.14(b) to accommodate the

concerns. Communities will be eligible

for the Zone AR designation should the

restored flood protection system be

decertified again.

Issuance of FIRMs Delineating Zone AE

Before Community Eligibility for Zone

AR Designation

We received comments objecting to

FEMA’s statement that communities

may be mapped as an AE Zone before

becoming eligible for Zone AR

designation as being contrary to the

intent of the legislation. The interim

final rule simply provided one scenario

for potential Zone AR eligibility. Some

communities may require an extended

period of time to meet eligibility

criteria. We anticipate that such

communities will receive maps

delineating AE, A1–30, AO, AH and A

Zones, which will be revised when the

statutory conditions for Zone AR

eligibility are met. Other communities,

particularly those who are active in

obtaining federal financial support or in

raising local funds for a restoration

project, may make sufficient progress to

be designated Zone AR before issuance

of revised FIRMs that reflect the

increased flood hazard.

One of these comments encouraged

FEMA to develop a parallel process in

mapping communities where an

existing flood protection system has

been decertified so that the community

is going through the Federal planning

process for restoring protection while

the revised FIRM is being prepared. In

response, we anticipate that most

communities will be aware of the

potential decertification of an existing

flood protection system at some time

during the restudy process. In fact, the

restudy may have been triggered by a

flood event nearly causing a failure or

overtopping of the system. Therefore,

the community may begin to investigate

a restoration project so that they can

meet the Zone AR eligibility

requirements before or concurrent with

the preparation of revised flood hazard

maps. In such cases, the revised FIRM

would show the increased flood hazard

areas as a Zone AR rather than another

flood hazard zone.

Another comment proposed that the

regulations incorporate a provision that

gives communities a reasonable period

of time to meet the Zone AR

requirements, suggesting that FEMA

withhold maps for potentially eligible

communities until the community is

eligible for a Zone AR designation.

FEMA is statutorily required to identify

and map flood hazard areas. Therefore,

if the community does not meet the

eligibility criteria when FEMA has

completed the remapping process,

including the statutory appeal period

and resolution of appeals, FEMA will be

required to delineate those areas as AE,

A1–30, AO, AH and A Zones on the

revised FIRM. FEMA does not have the

statutory authority to withhold issuance

of maps whether they delineate Zone

AR or other flood hazard zones.

Furthermore, communities and their

residents have the right to be informed

of the increased risk and such

information should not be withheld. A

FEMA policy of withholding the

issuance of FIRMs would jeopardize

individuals’ ability to make informed

decisions about the flood hazard to

which they are exposed.

Use of Terms

One comment stated that there is no

definition of the term ‘‘adequate

progress’’ as used in the regulation. The

term refers specifically to the provision

in §61.12 that permits a federal flood

protection system to be certified as

complete when it satisfies certain

specific ‘‘adequate progress’’ criteria

that are set out in that section of the

regulations at §61.12(b). There is no

need for further definition.

Another comment stated that the

regulation should define the terms

‘‘satisfactory progress’’ and ‘‘reasonable

certainty’’ at 44 CFR 65.14(i). This

section of the interim final rule

describes the conditions under which

FEMA would take action to remove the
55714 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

Zone AR designation for noncompliance

with the restoration schedule.

FEMA disagrees because the terms or

words used in this rule do not have a

specific meaning separate from the

meaning they would have if used in

general discourse. Any attempt to define

the terms used in the law and the rule

would merely expand the rule

unnecessarily, fail to accommodate all

conditions that would be encountered,

and limit discretion under the NFIP in

administering the law and the rule.

Another comment objected to the use

of the term ‘‘shall’’ in 44 CFR §64.14(i)

when referring to revising maps and

removing the Zone AR designation for

reasons of noncompliance. In response,

FEMA states that the use of the term

‘‘shall’’ directly relates to the agency’s

mandate to identify and map flood

hazards and to employ the statutory

appeals process, provided for in §110 of

the Flood Disaster Protection Act of

1973, 42 U.S.C. 4104(c); see also 44 CFR

Part 67. The term ‘‘shall’’ is accurate.

Insurance Rating Procedures

Some comments expressed concern

that flood insurance premiums are too

expensive. The NFIP applies actuarial

rates to all new construction. These

rates are determined by the zone on the

FIRM, and by national loss experience

and loss probabilities. The rates for

existing construction in SFHAs are

subsidized. The basis for this subsidy is

the fact that the buildings were

constructed in these areas without full

knowledge of the hazard. In deep

flooding areas, the actuarial rate would

be greater than the subsidized rate that

will be charged under Zone AR.

Congress has extended the benefit of

this subsidy to risks in Zone AR, even

though the full extent of the hazard is

known. In the law that established Zone

AR, Congress limited the rate that could

be charged to the equivalent of the preFIRM Zone A rate that is subsidized,

and placed limits on elevation

requirements. The NFIP pre-FIRM rate

is subject to change. Any change will

affect the Zone AR rate.

Role of Insurance Companies

Several comments expressed the

opinion that the NFIP’s mandatory

purchase requirements were set up to

benefit insurance companies and were

not being applied elsewhere in the

country. Mandatory purchase

requirements were established by the

Congress in 1973 in response to

escalating Federal costs of flooding

disasters and low voluntary

participation by property owners in the

NFIP. The NFIP mandatory purchase

requirements are enforced on a national

basis, and apply to all Federal and

federally regulated lenders.

The National Flood Insurance Act, as

amended, authorizes qualified

insurance companies to sell flood

insurance under an arrangement with

FEMA. The companies are paid a fee to

cover their costs for issuing and

servicing policies and for adjusting

claims. The net premiums collected

from the sale of flood insurance are

turned over to the Federal government

and are placed in the National Flood

Insurance Fund in the United States

Treasury. This fund is used to pay

future flood losses and other NFIP

related expenses.

Homeowner Protection

A comment stated that the NFIP

mandatory purchase requirements were

not intended to protect the homeowner,

but rather the mortgagee, and this is

why contents coverage is not available.

We disagree for at least two reasons.

First, contents coverage is available; it

can be purchased as separate coverage

or together with building coverage, and

may be required if the contents are part

of the security for the loan. Second,

when a mortgaged home is destroyed by

an uninsured peril, the obligation to

repay the mortgage still exists.

Consequently, any insurance that covers

this peril benefits the policyholder and

the mortgagee.

Relation to Earthquake Insurance

Some comments stated that while

mandatory purchase requirements exist

for flood insurance, there are none for

earthquake insurance. Congress

mandated the flood insurance purchase

requirements under the provisions of

the Flood Disaster Protection Act of

1973. As yet, Congress has not enacted

Federal legislation on earthquake

insurance. Several bills on the subject

were introduced in the 103d Congress,

in the 104th Congress, and again in the

first session of the 105th Congress, but

none have passed.

Community-Wide Flood Insurance

Coverage

A comment suggested that we develop

a flood insurance policy that would

cover an entire community, and be paid

for by the community. This suggestion

is not workable under the National

Flood Insurance Act. The NFIP has a

statutory limit on the amount of

insurance that can be written on an

individual building and its contents.

Consequently, the specific risk

information required to rate a flood

insurance policy is gathered on an

individual basis, and separate policies

are issued. However, there is nothing to

prevent a community from arranging

with one or more insurance agents or

companies to write the required policies

for its citizens, and list the community

as the payor.

National Environmental Policy Act

FEMA has determined, based on an

Environmental Assessment, that this

final rule will not have a significant

impact upon the quality of the human

environment. An Environmental Impact

Statement will not be prepared. A

Finding Of No Significant Impact is

included in the formal docket file and

is available for public inspection and

copying at the Rules Docket Clerk,

Office of the General Counsel, Federal

Emergency Management Agency, 500 C

Street, SW., Washington, DC 20472.

Comments received on the interim

final rule urged FEMA to revise the

Environmental Assessment to reflect the

changes that had been made in the

interim final rule and to address the

regulatory impact on minority and lowincome populations in accordance with

Executive Order 12898, Federal Actions

to Address Environmental Justice in

Minority Populations and Low-Income

Populations. Comments also disagreed

with FEMA’s finding that the

regulations would have no significant

impact on the environment. These

issues are addressed in supplemental

information prepared and appended to

the Environmental Assessment for this

rule. These revisions do not alter

FEMA’s Finding of No Significant

Impact.

Regulatory Flexibility Act

The Director certifies that this final

rule is exempt from the requirements of

the Regulatory Flexibility Act because

the proposed flood control restoration

zone is required by statute, 42 U.S.C.

4014(f), and is required to enhance and

maintain community eligibility in the

NFIP during the period needed to

restore flood protection systems to

provide a minimum protection from the

base flood required for accreditation on

FIRMs. A regulatory flexibility analysis

has not been prepared.

Paperwork Reduction Act

This final rule contains collections of

information as described the Paperwork

Reduction Act that are covered by the

following OMB Control Numbers: 3067–

0020; 3067–0022; 3067–0127; and 3067–

0147.

Executive Order 12612, Federalism

This final rule involves no policies

that have federalism implications under

Executive Order 12612, Federalism,

dated October 26, 1987.
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55715

Executive Order 12778, Civil Justice

Reform

This final rule meets the applicable

standards of section 2(b)(2) of Executive

Order 12778.

Executive Order 12866, Regulatory

Planning and Review

Promulgation of this final rule is

required by statute, 42 U.S.C. 4014(f),

which also specifies the regulatory

approach taken in the proposed rule. To

the extent possible under the statutory

requirements of 42 U.S.C. 4014(f), this

rule adheres to the principles of

regulation set forth in Executive Order

12866. This rule was reviewed by the

Office of Management and Budget in

accordance with Executive Order 12866.

Congressional Review of Agency

Rulemaking

This final rule has been submitted 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 does not result

in nor is it likely to result in an annual

effect on the economy of $100,000,000

or more; it will not result in a major

increase in costs or prices for

consumers, individual industries,

Federal, State, or local government

agencies, or geographic regions; and 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 foreignbased enterprises.

This final rule is exempt (1) from the

requirements of the Regulatory

Flexibility Act, as certified previously,

and (2) from the Paperwork Reduction

Act.

This rule is not an unfunded Federal

mandate within the meaning of the

Unfunded Mandates Reform Act of

1995, Pub. L. 104–4. It does not meet the

$100,000,000 threshold of that Act, and

any enforceable duties are imposed as a

condition of Federal assistance or a duty

arising from participation in a voluntary

Federal program.

List of Subjects in 44 CFR Parts 59, 60,

64, 65, 70, and 75

Administrative practice and

procedure, Flood insurance, Flood

plains, Reporting and recordkeeping

requirements.

Accordingly, 44 CFR Parts 59, 60, 64,

65, 70, and 75 are amended as follows:

PART 59—GENERAL PROVISIONS

1. The authority citation for Part 59 is

revised to read as follows:

Authority: 42 U.S.C. 4001 et seq.;

Reorganization Plan No. 3 of 1978, 43 FR

41943, 3 CFR, 1978 Comp., p. 329; E.O.

12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR,

1979 Comp., p. 376.

2. Section 59.1 is amended as follows:

The definitions of Area of shallow

flooding, Area of special flood hazard,

Developed area, and Special hazard

area are revised to read as follows:

§ 59.1 Definitions.

* * * * *

Area of shallow flooding means a

designated AO, AH, AR/AO, AR/AH, or

VO zone on a community’s Flood

Insurance Rate Map (FIRM) with a 1

percent or greater annual chance of

flooding to an average depth of 1 to 3

feet where a clearly defined channel

does not exist, where the path of

flooding is unpredictable, and where

velocity flow may be evident. Such

flooding is characterized by ponding or

sheet flow.

* * * * *

Area of special flood hazard is the

land in the flood plain within a

community subject to a 1 percent or

greater chance of flooding in any given

year. The area may be designated as

Zone A on the FHBM. After detailed

ratemaking has been completed in

preparation for publication of the flood

insurance rate map, Zone A usually is

refined into Zones A, AO, AH, A1–30,

AE, A99, AR, AR/A1–30, AR/AE, AR/

AO, AR/AH, AR/A, VO, or V1–30, VE,

or V. For purposes of these regulations,

the term ‘‘special flood hazard area’’ is

synonymous in meaning with the

phrase ‘‘area of special flood hazard’’.

* * * * *

Developed area means an area of a

community that is:

(a) A primarily urbanized, built-up

area that is a minimum of 20 contiguous

acres, has basic urban infrastructure,

including roads, utilities,

communications, and public facilities,

to sustain industrial, residential, and

commercial activities, and

(1) Within which 75 percent or more

of the parcels, tracts, or lots contain

commercial, industrial, or residential

structures or uses; or

(2) Is a single parcel, tract, or lot in

which 75 percent of the area contains

existing commercial or industrial

structures or uses; or

(3) Is a subdivision developed at a

density of at least two residential

structures per acre within which 75

percent or more of the lots contain

existing residential structures at the

time the designation is adopted.

(b) Undeveloped parcels, tracts, or

lots, the combination of which is less

than 20 acres and contiguous on at least

3 sides to areas meeting the criteria of

paragraph (a) at the time the designation

is adopted.

(c) A subdivision that is a minimum

of 20 contiguous acres that has obtained

all necessary government approvals,

provided that the actual ‘‘start of

construction’’ of structures has occurred

on at least 10 percent of the lots or

remaining lots of a subdivision or 10

percent of the maximum building

coverage or remaining building coverage

allowed for a single lot subdivision at

the time the designation is adopted and

construction of structures is underway.

Residential subdivisions must meet the

density criteria in paragraph (a)(3).

* * * * *

Special hazard area means an area

having special flood, mudslide (i.e.,

mudflow), or flood-related erosion

hazards, and shown on an FHBM or

FIRM as Zone A, AO, A1–30, AE, AR,

AR/A1–30, AR/AE, AR/AO, AR/AH,

AR/A, A99, AH, VO, V1–30, VE, V, M,

or E.

3. Section 59.24(a) is revised to read

as follows:

§ 59.24 Suspension of community

eligibility.

(a) A community eligible for the sale

of flood insurance shall be subject to

suspension from the Program for failing

to submit copies of adequate flood plain

management regulations meeting the

minimum requirements of paragraphs

(b), (c), (d), (e) or (f) of §60.3 or

paragraph (b) of §60.4 or §60.5, within

six months from the date the

Administrator provides the data upon

which the flood plain regulations for the

applicable paragraph shall be based.

Where there has not been any

submission by the community, the

Administrator shall notify the

community that 90 days remain in the

six month period in order to submit

adequate flood plain management

regulations. Where there has been an

inadequate submission, the

Administrator shall notify the

community of the specific deficiencies

in its submitted flood plain management

regulations and inform the community

of the amount of time remaining within

the six month period. If, subsequently,

copies of adequate flood plain

management regulations are not

received by the Administrator, no later

than 30 days before the expiration of the

original six month period the

Administrator shall provide written

notice to the community and to the state
55716 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

and assure publication in the Federal

Register under part 64 of this

subchapter of the community’s loss of

eligibility for the sale of flood insurance,

such suspension to become effective

upon the expiration of the six month

period. Should the community remedy

the defect and the Administrator receive

copies of adequate flood plain

management regulations within the

notice period, the suspension notice

shall be rescinded by the Administrator.

If the Administrator receives notice

from the State that it has enacted

adequate flood plain management

regulations for the community within

the notice period, the suspension notice

shall be rescinded by the Administrator.

The community’s eligibility shall

remain terminated after suspension

until copies of adequate flood plain

management regulations have been

received and approved by the

Administrator.

* * * * *

PART 60—CRITERIA FOR LAND

MANAGEMENT AND USE

4. The authority citation for Part 60 is

revised to read as follows:

Authority: 42 U.S.C. 4001 et seq.;

Reorganization Plan No. 3 of 1978, 43 FR

41943, 3 CFR, 1978 Comp., p. 329; E.O.

12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR,

1979 Comp., p. 376.

5. Section 60.2(a) is revised to read as

follows:

§ 60.2 Minimum compliance with flood

plain management criteria.

(a) A flood-prone community

applying for flood insurance eligibility

shall meet the standards of §60.3(a) in

order to become eligible if a FHBM has

not been issued for the community at

the time of application. Thereafter, the

community will be given a period of six

months from the date the Administrator

provides the data set forth in §60.3(b),

(c), (d), (e) or (f), in which to meet the

requirements of the applicable

paragraph. If a community has received

a FHBM, but has not yet applied for

Program eligibility, the community shall

apply for eligibility directly under the

standards set forth in §60.3(b).

Thereafter, the community will be given

a period of six months from the date the

Administrator provides the data set

forth in §60.3(c), (d), (e) or (f) in which

to meet the requirements of the

applicable paragraph.

* * * * *

6. Section 60.3(f) is revised to read as

follows:

§ 60.3 Flood plain management criteria for

flood-prone areas.

* * * * *

(f) When the Administrator has

provided a notice of final base flood

elevations within Zones A1–30 or AE on

the community’s FIRM, and, if

appropriate, has designated AH zones,

AO zones, A99 zones, and A zones on

the community’s FIRM, and has

identified flood protection restoration

areas by designating Zones AR, AR/A1–

30, AR/AE, AR/AH, AR/AO, or AR/A,

the community shall:

(1) Meet the requirements of

paragraphs (c)(1) through (14) and (d)(1)

through (4) of this section.

(2) Adopt the official map or legal

description of those areas within Zones

AR, AR/A1–30, AR/AE, AR/AH, AR/A,

or AR/AO that are designated developed

areas as defined in §59.1 in accordance

with the eligibility procedures under

§65.14.

(3) For all new construction of

structures in areas within Zone AR that

are designated as developed areas and

in other areas within Zone AR where

the AR flood depth is 5 feet or less:

(i) Determine the lower of either the

AR base flood elevation or the elevation

that is 3 feet above highest adjacent

grade; and

(ii) Using this elevation, require the

standards of paragraphs (c)(1) through

(14) of this section.

(4) For all new construction of

structures in those areas within Zone

AR that are not designated as developed

areas where the AR flood depth is

greater than 5 feet:

(i) Determine the AR base flood

elevation; and

(ii) Using that elevation require the

standards of paragraphs (c)(1) through

(14) of this section.

(5) For all new construction of

structures in areas within Zone AR/A1–

30, AR/AE, AR/AH, AR/AO, and AR/A:

(i) Determine the applicable elevation

for Zone AR from paragraphs (a)(3) and

(4) of this section;

(ii) Determine the base flood elevation

or flood depth for the underlying A1–

30, AE, AH, AO and A Zone; and

(iii) Using the higher elevation from

paragraphs (a)(5)(i) and (ii) of this

section require the standards of

paragraphs (c)(1) through (14) of this

section.

(6) For all substantial improvements

to existing construction within Zones

AR/A1–30, AR/AE, AR/AH, AR/AO,

and AR/A:

(i) Determine the A1–30 or AE, AH,

AO, or A Zone base flood elevation; and

(ii) Using this elevation apply the

requirements of paragraphs (c)(1)

through (14) of this section.

(7) Notify the permit applicant that

the area has been designated as an AR,

AR/A1–30, AR/AE, AR/AH, AR/AO, or

AR/A Zone and whether the structure

will be elevated or protected to or above

the AR base flood elevation.

PART 64—COMMUNITIES ELIGIBLE

FOR THE SALE OF INSURANCE

7. The authority citation for Part 64 is

revised to read as follows:

Authority: 42 U.S.C. 4001 et seq.;

Reorganization Plan No. 3 of 1978, 43 FR

41943, 3 CFR, 1978 Comp., p. 329; E.O.

12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR,

1979 Comp., p. 376.

8. Section 64.3 is amended by revising

the ‘‘AR’’ entry in the chart in paragraph

(a)(1) and revising paragraph (b) to read

as follows:

§ 64.3 Flood insurance maps.

(a) * * *

(1) * * *

Zone symbol

* * * * * * *

AR ......................................... Area of special flood hazard that results from the decertification of a previously accredited flood protection system that is determined to be in the process of being restored to provide base flood protection.

* * * * * * *

* * * * *

(b) Notice of the issuance of new or

revised FHBMs or FIRMs is given in

Part 65 of this subchapter. The

mandatory purchase of insurance is

required within designated Zones A,

A1–30, AE, A99, AO, AH, AR, AR/A1–

30, AR/AE, AR/AO, AR/AH, AR/A, V1–

30, VE, V, VO, M, and E.

* * * * *
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55717

PART 65—IDENTIFICATION AND

MAPPING OF SPECIAL HAZARD

AREAS

9. The authority citation for Part 65 is

revised to read as follows:

Authority: 42 U.S.C. 4001 et seq.;

Reorganization Plan No. 3 of 1978, 43 FR

41943, 3 CFR, 1978 Comp., p. 329; E.O.

12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR,

1979 Comp., p. 376.

§ 65.14 [Redesignated as §65.15]

10. Part 65 is amended by revising

§65.14 to read as follows:

§65.14 Remapping of areas for which local

flood protection systems no longer provide

base flood protection.

(a) General. (1) This section describes

the procedures to follow and the types

of information FEMA requires to

designate flood control restoration

zones. A community may be eligible to

apply for this zone designation if the

Administrator determines that it is

engaged in the process of restoring a

flood protection system that was:

(i) Constructed using Federal funds;

(ii) Recognized as providing base

flood protection on the community’s

effective FIRM; and

(iii) Decertified by a Federal agency

responsible for flood protection design

or construction.

(2) Where the Administrator

determines that a community is in the

process of restoring its flood protection

system to provide base flood protection,

a FIRM will be prepared that designates

the temporary flood hazard areas as a

flood control restoration zone (Zone

AR). Existing special flood hazard areas

shown on the community’s effective

FIRM that are further inundated by

Zone AR flooding shall be designated as

a ‘‘dual’’ flood insurance rate zone,

Zone AR/AE or AR/AH with Zone AR

base flood elevations, and AE or AH

with base flood elevations and Zone

AR/AO with Zone AR base flood

elevations and Zone AO with flood

depths, or Zone AR/A with Zone AR

base flood elevations and Zone A

without base flood elevations.

(b) Limitations. A community may

have a flood control restoration zone

designation only once while restoring a

flood protection system. This limitation

does not preclude future flood control

restoration zone designations should a

fully restored, certified, and accredited

system become decertified for a second

or subsequent time.

(1) A community that receives Federal

funds for the purpose of designing or

constructing, or both, the restoration

project must complete restoration or

meet the requirements of 44 CFR 61.12

within a specified period, not to exceed

a maximum of 10 years from the date of

submittal of the community’s

application for designation of a flood

control restoration zone.

(2) A community that does not receive

Federal funds for the purpose of

constructing the restoration project must

complete restoration within a specified

period, not to exceed a maximum of 5

years from the date of submittal of the

community’s application for designation

of a flood control restoration zone. Such

a community is not eligible for the

provisions of §61.12. The designated

restoration period may not be extended

beyond the maximum allowable under

this limitation.

(c) Exclusions. The provisions of these

regulations do not apply in a coastal

high hazard area as defined in 44 CFR

59.1, including areas that would be

subject to coastal high hazards as a

result of the decertification of a flood

protection system shown on the

community’s effective FIRM as

providing base flood protection.

(d) Effective date for risk premium

rates. The effective date for any risk

premium rates established for Zone AR

shall be the effective date of the revised

FIRM showing Zone AR designations.

(e) Application and submittal

requirements for designation of a flood

control restoration zone. A community

must submit a written request to the

Administrator, signed by the

community’s Chief Executive Officer,

for a flood plain designation as a flood

control restoration zone. The request

must include a legislative action by the

community requesting the designation.

The Administrator will not initiate any

action to designate flood control

restoration zones without receipt of the

formal request from the community that

complies with all requirements of this

section. The Administrator reserves the

right to request additional information

from the community to support or

further document the community’s

formal request for designation of a flood

control restoration zone, if deemed

necessary.

(1) At a minimum, the request from a

community that receives Federal funds

for the purpose of designing,

constructing, or both, the restoration

project must include:

(i) A statement whether, to the best of

the knowledge of the community’s Chief

Executive Officer, the flood protection

system is currently the subject matter of

litigation before any Federal, State or

local court or administrative agency,

and if so, the purpose of that litigation;

(ii) A statement whether the

community has previously requested a

determination with respect to the same

subject matter from the Administrator,

and if so, a statement that details the

disposition of such previous request;

(iii) A statement from the community

and certification by a Federal agency

responsible for flood protection design

or construction that the existing flood

control system shown on the effective

FIRM was originally built using Federal

funds, that it no longer provides base

flood protection, but that it continues to

provide protection from the flood

having at least a 3-percent chance of

occurrence during any given year;

(iv) An official map of the community

or legal description, with supporting

documentation, that the community will

adopt as part of its flood plain

management measures, which

designates developed areas as defined in

§59.1 and as further defined in §60.3(f).

(v) A restoration plan to return the

system to a level of base flood

protection. At a minimum, this plan

must:

(A) List all important project

elements, such as acquisition of permits,

approvals, and contracts and

construction schedules of planned

features;

(B) Identify anticipated start and

completion dates for each element, as

well as significant milestones and dates;

(C) Identify the date on which ‘‘as

built’’ drawings and certification for the

completed restoration project will be

submitted. This date must provide for a

restoration period not to exceed the

maximum allowable restoration period

for the flood protection system, or;

(D) Identify the date on which the

community will submit a request for a

finding of adequate progress that meets

all requirements of §61.12. This date

may not exceed the maximum allowable

restoration period for the flood

protection system;

(vi) A statement identifying the local

project sponsor responsible for

restoration of the flood protection

system;

(vii) A copy of a study, performed by

a Federal agency responsible for flood

protection design or construction in

consultation with the local project

sponsor, which demonstrates a Federal

interest in restoration of the system and

which deems that the flood protection

system is restorable to a level of base

flood protection.

(viii) A joint statement from the

Federal agency responsible for flood

protection design or construction

involved in restoration of the flood

protection system and the local project

sponsor certifying that the design and

construction of the flood control system

involves Federal funds, and that the

restoration of the flood protection
55718 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

system will provide base flood

protection;

(2) At a minimum, the request from a

community that receives no Federal

funds for the purpose of constructing

the restoration project must:

(i) Meet the requirements of

§65.14(e)(1)(i) through (iv);

(ii) Include a restoration plan to

return the system to a level of base flood

protection. At a minimum, this plan

must:

(A) List all important project

elements, such as acquisition of permits,

approvals, and contracts and

construction schedules of planned

features;

(B) Identify anticipated start and

completion dates for each element, as

well as significant milestones and dates;

and

(C) Identify the date on which ‘‘as

built’’ drawings and certification for the

completed restoration project will be

submitted. This date must provide for a

restoration period not to exceed the

maximum allowable restoration period

for the flood protection system;

(iii) Include a statement identifying

the local agency responsible for

restoration of the flood protection

system;

(iv) Include a copy of a study,

certified by registered Professional

Engineer, that demonstrates that the

flood protection system is restorable to

provide protection from the base flood;

(v) Include a statement from the local

agency responsible for restoration of the

flood protection system certifying that

the restored flood protection system will

meet the applicable requirements of Part

65; and

(vi) Include a statement from the local

agency responsible for restoration of the

flood protection system that identifies

the source of funds for the purpose of

constructing the restoration project and

a percentage of the total funds

contributed by each source. The

statement must demonstrate, at a

minimum, that 100 percent of the total

financial project cost of the completed

flood protection system has been

appropriated.

(f) Review and response by the

Administrator. The review and response

by the Administrator shall be in

accordance with procedures specified in

§ 65.9.

(g) Requirements for maintaining

designation of a flood control

restoration zone. During the restoration

period, the community and the costsharing Federal agency, if any, must

certify annually to the FEMA Regional

Office having jurisdiction that the

restoration will be completed in

accordance with the restoration plan

within the time period specified by the

plan. In addition, the community and

the cost-sharing Federal agency, if any,

will update the restoration plan and will

identify any permitting or construction

problems that will delay the project

completion from the restoration plan

previously submitted to the

Administrator. The FEMA Regional

Office having jurisdiction will make an

annual assessment and recommendation

to the Administrator as to the viability

of the restoration plan and will conduct

periodic on-site inspections of the flood

protection system under restoration.

(h) Procedures for removing flood

control restoration zone designation due

to adequate progress or complete

restoration of the flood protection

system. At any time during the

restoration period:

(1) A community that receives Federal

funds for the purpose of designing,

constructing, or both, the restoration

project shall provide written evidence of

certification from a Federal agency

having flood protection design or

construction responsibility that the

necessary improvements have been

completed and that the system has been

restored to provide protection from the

base flood, or submit a request for a

finding of adequate progress that meets

all requirements of §61.12. If the

Administrator determines that adequate

progress has been made, FEMA will

revise the zone designation from a flood

control restoration zone designation to

Zone A99.

(2) After the improvements have been

completed, certified by a Federal agency

as providing base flood protection, and

reviewed by FEMA, FEMA will revise

the FIRM to reflect the completed flood

control system.

(3) A community that receives no

Federal funds for the purpose of

constructing the restoration project must

provide written evidence that the

restored flood protection system meets

the requirements of Part 65. A

community that receives no Federal

funds for the purpose of constructing

the restoration project is not eligible for

a finding of adequate progress under

§61.12.

(4) After the improvements have been

completed and reviewed by FEMA,

FEMA will revise the FIRM to reflect the

completed flood protection system.

(i) Procedures for removing flood

control restoration zone designation due

to non-compliance with the restoration

schedule or as a result of a finding that

satisfactory progress is not being made

to complete the restoration. At any time

during the restoration period, should

the Administrator determine that the

restoration will not be completed in

accordance with the time frame

specified in the restoration plan, or that

satisfactory progress is not being made

to restore the flood protection system to

provide complete flood protection in

accordance with the restoration plan,

the Administrator shall notify the

community and the responsible Federal

agency, in writing, of the determination,

the reasons for that determination, and

that the FIRM will be revised to remove

the flood control restoration zone

designation. Within thirty (30) days of

such notice, the community may submit

written information that provides

assurance that the restoration will be

completed in accordance with the time

frame specified in the restoration plan,

or that satisfactory progress is being

made to restore complete protection in

accordance with the restoration plan, or

that, with reasonable certainty, the

restoration will be completed within the

maximum allowable restoration period.

On the basis of this information the

Administrator may suspend the

decision to revise the FIRM to remove

the flood control restoration zone

designation. If the community does not

submit any information, or if, based on

a review of the information submitted,

there is sufficient cause to find that the

restoration will not be completed as

provided for in the restoration plan, the

Administrator shall revise the FIRM, in

accordance with 44 CFR Part 67, and

shall remove the flood control

restoration zone designations and shall

redesignate those areas as Zone A1–30,

AE, AH, AO, or A.

PART 70—PROCEDURE FOR MAP

CORRECTION

11. The authority citation for Part 70

is revised to read as follows:

Authority: 42 U.S.C. 4001 et seq.;

Reorganization Plan No. 3 of 1978, 43 FR

41943, 3 CFR, 1978 Comp., p. 329; E.O.

12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR,

1979 Comp., p. 376.

12. Section 70.1 is revised to read as

follows:

§70.1 Purpose of part.

The purpose of this part is to provide

an administrative procedure whereby

the Administrator will review the

scientific or technical submissions of an

owner or lessee of property who

believes his property has been

inadvertently included in designated A,

AO, A1–30, AE, AH, A99, AR, AR/A1–

30, AR/AE, AR/AO, AR/AH, AR/A, VO,

V1–30, VE, and V Zones, as a result of

the transposition of the curvilinear line

to either street or to other readily

identifiable features. The necessity for

this part is due in part to the technical
Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations 55719

difficulty of accurately delineating the

curvilinear line on either an FHBM or

FIRM. These procedures shall not apply

when there has been any alteration of

topography since the effective date of

the first NFIP map (i.e., FHBM or FIRM)

showing the property within an area of

special flood hazard. Appeals in such

circumstances are subject to the

provisions of part 65 of this subchapter.

13. Section 70.3(a) is revised to read

as follows:

§70.3 Right to submit technical

information.

(a) Any owner or lessee of property

(applicant) who believes his property

has been inadvertently included in a

designated A, AO, A1–30, AE, AH, A99,

AR, AR/A1–30, AR/AE, AR/AO, AR/

AH, AR/A, VO, V1–30, VE, and V Zones

on a FHBM or a FIRM, may submit

scientific or technical information to the

Administrator for the Administrator’s

review.

* * * * *

14. Paragraphs (a) and (b) of §70.4 are

revised to read as follows:

§70.4 Review by the Administrator.

* * * * *

(a) The property is within a

designated A, AO, A1–30, AE, AH, A99,

AR, AR/A1–30, AR/AE, AR/AO, AR/

AH, AR/A, VO, V1–30, VE, or V Zone,

and shall set forth the basis of such

determination; or

(b) The property should not be

included within a designated A, AO,

A1–30, AE, AH, A99, AR, AR/A1–30,

AR/AE, AR/AO, AR/AH, AR/A, VO,

V1–30, VE, or V Zone and that the

FHBM or FIRM will be modified

accordingly; or

* * * * *

15. Paragraph (c) of section 70.5 is

revised to read as follows:

§70.5 Letter of map amendment.

* * * * *

(c) The identification of the property

to be excluded from a designated A, AO,

A1–30, AE, AH, A99, AR, AR/A1–30,

AR/AE, AR/AO, AR/AH, AR/A, VO,

V1–30, VE, or V Zone.

PART 75—EXEMPTION OF STATEOWNED PROPERTIES UNDER SELFINSURANCE PLAN

16. The authority citation for Part 75

is revised to read as follows:

Authority: 42 U.S.C. 4001 et seq.;

Reorganization Plan No. 3 of 1978, 43 FR

41943, 3 CFR, 1978 Comp., p. 329; E.O.

12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR,

1979 Comp., p. 376.

17. Section 75.1 is revised to read as

follows:

§75.1 Purpose of part.

The purpose of this part is to establish

standards with respect to the

Administrator’s determinations that a

State’s plan of self-insurance is adequate

and satisfactory for the purposes of

exempting such State, under the

provisions of section 102(c) of the Act,

from the requirement of purchasing

flood insurance coverage for Stateowned structures and their contents in

areas identified by the Administrator as

A, AO, AH, A1–30, AE, AR, AR/A1–30,

AR/AE, AR/AO, AR/AH, AR/A, A99, M,

V, VO, V1–30, VE, and E Zones, in

which the sale of insurance has been

made available, and to establish the

procedures by which a State may

request exemption under section 102(c).

18. Section 75.10 is revised to read as

follows:

§75.10 Applicability.

A State shall be exempt from the

requirement to purchase flood insurance

in respect to State-owned structures

and, where applicable, their contents

located or to be located in areas

identified by the Administrator as A,

AO, AH, A1–30, AE, AR, AR/A1–30,

AR/AE, AR/AO, AR/AH, AR/A, A99, M,

V, VO, V1–30, VE, and E Zones, and in

which the sale of flood insurance has

been made available under the National

Flood Insurance Act of 1968, as

amended, provided that the State has

established a plan of self-insurance

determined by the Administrator to

equal or exceed the standards set forth

in this subpart.

19. Paragraphs (a)(4), (a)(5), and (a)(7)

of § 75.11 are revised to read as follows:

§75.11 Standards.

(a) * * *

(4) Consist of a self-insurance fund, or

a commercial policy of insurance or

reinsurance, for which provision is

made in statute or regulation and that is

funded by periodic premiums or charges

allocated for state-owned structures and

their contents in areas identified by the

Administrator as A, AO, AH, A1–30,

AE, AR, AR/A1–30, AR/AE, AR/AO,

AR/AH, AR/A, A99, M, V, VO, V1–30,

VE, and E Zones. The person or persons

responsible for such self-insurance fund

shall report on its status to the chief

executive authority of the State, or to

the legislature, or both, not less

frequently than annually. The loss

experience shall be shown for each

calendar or fiscal year from inception to

current date based upon loss and loss

adjustment expense incurred during

each separate calendar or fiscal year

compared to the premiums or charges

for each of the respective calendar or

fiscal years. Such incurred losses shall

be reported in aggregate by cause of loss

under a loss coding system adequate, as

a minimum, to identify and isolate loss

caused by flood, mudslide (i.e.,

mudflow) or flood-related erosion. The

Administrator may, subject to the

requirements of paragraph (a)(5) of this

section, accept and approve in lieu of,

and as the reasonable equivalent of the

self-insurance fund, an enforceable

commitment of funds by the State, the

enforceability of which shall be certified

to by the State’s Attorney General, or

other principal legal officer. Such funds,

or enforceable commitment of funds in

amounts not less than the limits of

coverage that would be applicable under

Standard Flood Insurance Policies, shall

be used by the State for the repair or

restoration of State-owned structures

and their contents damaged as a result

of flood-related losses occurring in areas

identified by the Administrator as A,

AO, AH, A1–30, AE, AR, AR/A1–30,

AR/AE, AR/AO, AR/AH, AR/A, A99, M,

V, VO, V1–30, VE, and E Zones.

(5) Provide for the maintaining and

updating by a designated State official

or agency not less frequently than

annually of an inventory of all Stateowned structures and their contents

within A, AO, AH, A1–30, AE, AR, AR/

A1–30, AR/AE, AR/AO, AR/AH, AR/A,

A99, M, V, VO, V1–30, VE, and E zones.

The inventory shall:

(i) Include the location of individual

structures;

(ii) Include an estimate of the current

replacement costs of such structures and

their contents, or of their current

economic value; and

(iii) Include an estimate of the

anticipated annual loss due to flood

damage.

* * * * *

(7) Include, pursuant to § 60.12 of this

subchapter, a certified copy of the flood

plain management regulations setting

forth standards for State-owned

properties within A, AO, AH, A1–30,

AE, AR, AR/A1–30, AR/AE, AR/AO,

AR/AH, AR/A, A99, M, V, VO, V1–30,

VE, and E Zones.

* * * * *

20. Paragraph (c) of § 75.13 is revised

to read as follows:

§75.13 Review by the Administrator.

* * * * *

(c) Upon determining that the State’s

plan of self-insurance equals or exceeds

the standards set forth in §75.11 of this

subpart, the Administrator shall certify

that the State is exempt from the

requirement for the purchase of flood

insurance for State-owned structures

and their contents located or to be

located in areas identified by the
55720 Federal Register / Vol. 62, No. 207 / Monday, October 27, 1997 / Rules and Regulations

Administrator as A, AO, AH, A1–30,

AE, AR, AR/A1–30, AR/AE, AR/AO,

AR/AH, AR/A, A99, M, V, VO, V1–30,

VE, and E Zones. Such exemption,

however, is in all cases provisional. The

Administrator shall review the plan for

continued compliance with the criteria

set forth in this part and may request

updated documentation for the purpose

of such review. If the plan is found to

be inadequate and is not corrected

within ninety days from the date that

such inadequacies were identified, the

Administrator may revoke his

certification.

* * * * *

Dated: October 22, 1997.

James L. Witt,

Director.

[FR Doc. 97–28385 Filed 10–24–97; 8:45 am]

BILLING CODE 6718–03–P