[Federal Register Volume 62, Number 54 (Thursday, March 20, 1997)]
[Rules and Regulations]
[Pages 13346-13349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6910]


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FEDERAL EMERGENCY MANAGEMENT AGENCY
44 CFR Part 78

RIN 3067-AC45


Flood Mitigation Assistance

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Interim final rule; request for comments.

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SUMMARY: This interim final rule implements Secs. 553 and 554 of the 
National Flood Insurance Reform Act of 1994. Section 553 authorizes a 
Mitigation Assistance Program, which authorizes FEMA to provide grants 
to States and communities for planning assistance and for mitigation 
projects that reduce the risk of flood damages to structures covered 
under contracts for flood insurance. Section 554 establishes the 
National Flood Mitigation Fund to fund assistance provided under 
Sec. 553.

DATES: This interim final rule is effective April 29, 1997. We invite 
comments on this interim final rule, which should be received by June 
18, 1997.

ADDRESSES: Please send any comments to the Rules Docket Clerk, Office 
of the General Counsel, Federal Emergency Management Agency, 500 C 
Street SW., room 840, Washington, DC 20472, (facsimile) (202) 646-4536.

FOR FURTHER INFORMATION CONTACT: Robert F. Shea, Mitigation 
Directorate, Federal Emergency Management Agency, 500 C Street SW., 
Washington, DC 20472, (202) 646-3619, (facsimile) (202) 646-3104.

SUPPLEMENTARY INFORMATION: The enactment of Title V of the Community 
Development and Regulatory Reform Act, also known as the National Flood 
Insurance Reform Act of 1994 (the Act), created significant 
opportunities for mitigation. Section 553 of the Act, authorizes a 
Mitigation Assistance Program which FEMA has designated Flood 
Mitigation Assistance (FMA). Section 554 establishes the National Flood 
Mitigation Fund to provide assistance under Sec. 553. These regulations 
implement the requirements of Secs. 553 and 554 of the Act. FMA was 
developed to address concerns regarding repetitively or substantially 
damaged structures, or both, and the associated claims on the National 
Flood Insurance Fund. The overall goal of FMA is to fund cost-effective 
measures that reduce or eliminate the long-term risk of flood damage to 
buildings, manufactured homes, and other insurable structures.
    FEMA will ask the Governor of each State to identify a point of 
contact (POC) for FMA. Each State, through the POC, will receive annual 
funding for technical assistance and planning grants through the annual 
Cooperative Agreements. States will distribute the planning grants at 
their discretion, in accordance with the specified grant limitations. 
The purpose of the planning grants is to develop or update a Flood 
Mitigation Plan that FEMA must approve before approving a project 
grant. In addition, States will be notified as to the allocation for 
FMA project grants each year. States will solicit and evaluate project 
applications, choosing those they wish to fund. The POC will review the 
applications for completeness, basic eligibility, and consistency with 
the approved Flood Mitigation Plan. The POC will forward these projects 
to FEMA for final approval and funding through a supplement to the 
annual Cooperative Agreement. All project applications, as well as 
Flood Mitigation Plans, must go through the POC to be accepted by FEMA, 
unless a State chooses not to coordinate the program. Alternative 
procedures allowing for direct coordination with FEMA are available in 
the following two circumstances. If a Governor chooses not to identify 
a POC to coordinate the FMA, communities may submit applications and 
plans directly to FEMA.
    The regulations outline a basic planning process with minimum 
standards for the Flood Mitigation Plans. Existing plans, such as those 
credited through the Community Rating System or those prepared in 
conformance with Sec. 409 of the Stafford Act, 42 U.S.C. 5176, may meet 
the requirements of FMA with few or no modifications. The plan should 
summarize the planning process, and should be reviewed periodically by 
the community in order to remain a viable document. Flood Mitigation 
Plans must be formally adopted by the legal entity submitting the plan 
for FEMA approval.
    All FMA projects must be consistent with the goals of FMA, that is, 
to reduce the risk of flood damage to structures insured under the 
National Flood Insurance Program (NFIP). Specifically, project 
eligibility is dependent on two components: the type of activity must 
be eligible (elevation, acquisition, etc.) and each project must meet a 
set of minimum criteria (cost effectiveness, environmental 
considerations, etc.).
    The regulations address the need for States and communities to 
maintain liaisons with other organizations and agencies to better 
coordinate available programs. FMA strongly encourages

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States to maintain a multi-hazard interagency mitigation team or other 
coordinating body. The regulations for FMA were developed to be 
flexible enough to work with existing programs with complementary 
goals. With the limited funds available in FMA and in other mitigation 
programs, the ability to package programs will be important to 
potential applicants.
    FEMA used an open process in the development of these regulations, 
coordinating with many of our constituent groups. Several forums were 
held to help identify issues and approaches to implementing FMA, and 
draft regulations were circulated for comment.

National Environmental Policy Act

    An environmental review pursuant to the requirements of 44 CFR Part 
10, Environmental Consideration, will be completed before publication 
of the final rule.

Executive Order 12898, Environmental Justice

    Review of the socioeconomic conditions relating to this interim 
rule will be completed before publication of the final rule.

Executive Order 12866, Regulatory Planning and Review

    This interim final rule is not a significant regulatory action 
within the meaning of Sec. 2(f) of E.O. 12866 of September 30, 1993, 58 
FR 51735, but attempts to adhere to the regulatory principles set forth 
in E.O. 12866. The rule has not been reviewed by the Office of 
Management and Budget under E.O. 12866.

P.L. 104-121, Congressional Review of Agency Rulemaking

    This interim final rule is not a ``major rule'' within the meaning 
of Sec. 804 of P.L. 104-121, Congressional Review of Agency Rulemaking. 
FEMA has submitted a report to Congress summarizing the scope and 
effect of the rule, as required by Sec. 801 of P.L.104-121.

Paperwork Reduction Act

    A notice of the proposed information collections has been published 
in the Federal Register requesting comments on the planning 
requirements and other information collection instruments. FEMA will be 
submitting an OMB clearance package to OMB after the comment period is 
closed. Until OMB approval, FEMA cannot collect information under this 
rule. This includes Flood Mitigation Plans, Project Grant applications, 
and post-grant reports. FEMA will publish a Federal Register notice to 
notify potential applicants of OMB's approval and implementation for 
information collection purposes.

Executive Order 12612, Federalism

    This interim final rule involves no policies that have federalism 
implications under E.O. 12612, Federalism, dated October 26, 1987.

Executive Order 12778, Civil Justice Reform

    This interim final rule meets the applicable standards of 
Sec. 2(b)(2) of E.O. 12778.

List of Subjects in 44 CFR Part 78

    Flood insurance, Flood mitigation assistance, Grant programs.
    Accordingly, Chapter I, Subchapter B of Title 44 of the Code of 
Federal Regulations is amended by adding Part 78 to read as follows:

PART 78--FLOOD MITIGATION ASSISTANCE

Sec.
78.1  Purpose.
78.2  Definitions.
78.3  Responsibilities.
78.4  Applicant eligibility.
78.5  Flood Mitigation Plan development.
78.6  Flood Mitigation Plan approval process.
78.7  Grant application procedures.
78.8  Grant funding limitations.
78.9  Planning grant approval process.
78.10  Project grant approval process.
78.11  Minimum project eligibility criteria.
78.12  Eligible types of projects.
78.13  Grant administration.
78.14  Alternative procedures.

    Authority: 42 U.S.C. 4001 et seq.; 42 U.S.C. 4104c, 4104d; 
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.


Sec. 78.1  Purpose.

    (a) The purpose of this part is to prescribe actions, procedures, 
and requirements for administration of the Flood Mitigation Assistance 
(FMA) program, authorized by Sections 1366 and 1367 of the National 
Flood Insurance Act of 1968, 42 U.S.C. 4104c and 4104d.
    (b) The purpose of FMA is to assist State and local governments in 
funding cost-effective actions that reduce or eliminate the long-term 
risk of flood damage to buildings, manufactured homes, and other 
insurable structures. The long-term goal of FMA is to reduce or 
eliminate claims under the National Flood Insurance Program (NFIP) 
through mitigation activities. The program provides cost-shared grants 
for three purposes: Planning Grants to States and communities to assess 
the flood risk and identify actions to reduce that risk; Project Grants 
to execute measures to reduce flood losses; and Technical Assistance 
Grants that States may use to assist communities to develop viable FMA 
applications and implement FMA projects. FMA also outlines a process 
for development and approval of Flood Mitigation Plans.


Sec. 78.2  Definitions.

    (a) Except as otherwise provided in this part, the definitions set 
forth in part 59 of this subchapter are applicable to this part.
    (b) Community means
    (1) A political subdivision, including any Indian tribe or 
authorized tribal organization or Alaskan native village or authorized 
native organization, that has zoning and building code jurisdiction 
over a particular area having special flood hazards, and is 
participating in the NFIP; or
    (2) A political subdivision of a State, or other authority, that is 
designated to develop and administer a mitigation plan by political 
subdivisions, all of which meet the requirements of paragraph (b)(1) of 
this section.


Sec. 78.3  Responsibilities.

    (a) Federal. The Director will allocate available funds to each 
FEMA Region. The FEMA Regional Director will:
    (1) Allocate Technical Assistance and Planning Grants to each State 
through the annual Cooperative Agreements;
    (2) Approve Flood Mitigation Plans in accordance with Sec. 78.6; 
and
    (3) Award all FMA project grants, after evaluating applications for 
minimum eligibility criteria and ensuring compliance with applicable 
Federal laws.
    (b) State. The State will serve as grantee through the State Point 
of Contact (POC) designated by the Governor. The POC must have working 
knowledge of NFIP goals and processes and will ensure that FMA is 
coordinated with other mitigation activities at the State level. If a 
Governor chooses not to identify a POC to coordinate the FMA, 
communities may follow alternative procedures as described in 
Sec. 78.14. States will:
    (1) Provide technical assistance to communities to assist them in 
developing applications and implementing approved applications;
    (2) Award planning grants;
    (3) Submit plans to the FEMA Regional Director for approval;
    (4) Evaluate project applications, selecting projects to forward to 
the FEMA Regional Director for final approval; and

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    (5) Submit performance and financial reports to FEMA in compliance 
with 44 CFR 13.40 and 13.41.
    (c) Community. The community will:
    (1) Complete and submit applications to the State POC for the 
Planning and Projects Grants;
    (2) Prepare and submit the Flood Mitigation Plan;
    (3) Implement all approved projects;
    (4) Comply with FMA requirements, 44 CFR parts 13 and 14, the grant 
agreement, applicable Federal, State and local laws and regulations (as 
applicable); and
    (5) Account for the appropriate use of grant funds to the State 
POC.


Sec. 78.4  Applicant eligibility.

    (a) The State is eligible to apply for grants for Technical 
Assistance.
    (b) State agencies and communities are eligible to apply for 
Planning and Project Grants and to act as subgrantee. Communities on 
probation or suspended under 44 CFR part 60 of the NFIP are not 
eligible. To be eligible for Project Grants, an eligible applicant will 
develop, and have approved by the FEMA Regional Director, a Flood 
Mitigation Plan in accordance with Sec. 78.5.


Sec. 78.5  Flood Mitigation Plan development.

    A Flood Mitigation Plan will articulate a comprehensive strategy 
for implementing technically feasible flood mitigation activities for 
the area affected by the plan. At a minimum, plans will include the 
following elements:
    (a) Description of the planning process and public involvement. 
Public involvement may include workshops, public meetings, or public 
hearings.
    (b) Description of the existing flood hazard and identification of 
the flood risk, including estimates of the number and type of 
structures at risk, repetitive loss properties, and the extent of flood 
depth and damage potential.
    (c) The applicant's floodplain management goals for the area 
covered by the plan.
    (d) Identification and evaluation of cost-effective and technically 
feasible mitigation actions considered.
    (e) Presentation of the strategy for reducing flood risks and 
continued compliance with the NFIP, and procedures for ensuring 
implementation, reviewing progress, and recommending revisions to the 
plan.
    (f) Documentation of formal plan adoption by the legal entity 
submitting the plan (e.g., Governor, Mayor, County Executive).


Sec. 78.6  Flood Mitigation Plan approval process.

    The State POC will forward all Flood Mitigation Plans to the FEMA 
Regional Director for approval. The Regional Director will notify the 
State POC of the approval or disapproval of the plan within 120 days 
after submission. If the Regional Director does not approve a 
mitigation plan, the Regional Director will notify the State POC of the 
reasons for non-approval and offer suggestions for improvement.


Sec. 78.7  Grant application procedures.

    States will apply for Technical Assistance and Planning Grants 
through the annual Cooperative Agreement between FEMA and the State. 
The State POC will be notified regarding their available funds for 
project grants each fiscal year. The State may forward project 
applications to FEMA for review at any time.


Sec. 78.8  Grant funding limitations.

    (a) The Director will allocate the available funds for FMA each 
fiscal year. Each State will receive a base amount of $10,000 for 
Planning Grants and $100,000 for Project Grants, with the remaining 
funds distributed based on the number of NFIP policies, repetitive loss 
structures, and other such criteria as the Director may determine in 
furtherance of the disaster resistant community concept.
    (b) A maximum of $1,500,000 may be allocated for Planning Grants 
nationally each fiscal year. A Planning Grant will not be awarded to a 
State or community more than once every 5 years, and an individual 
Planning Grant will not exceed $150,000 to any State agency applicant, 
or $50,000 to any community applicant. The total Planning Grant made in 
any fiscal year to any State, including all communities located in the 
State, will not exceed $300,000.
    (c) A maximum of ten percent of the funds available for Project 
Grants will be allocated to Technical Assistance grants each fiscal 
year.
    (d) The total amount of FMA Project Grant funds provided during any 
5-year period will not exceed $10,000,000 to any State or $3,300,000 to 
any community. The total amount of Project Grant funds provided to any 
State, including all communities located in the State will not exceed 
$20,000,000 during any 5-year period.


Sec. 78.9  Planning grant approval process.

    The State POC will evaluate and approve applications for Planning 
Grants. Funds will be provided only for the flood portion of any 
mitigation plan, and Planning Grants will not be awarded to develop new 
or improved floodplain maps. The performance period for each Planning 
Grant will not exceed 3 years.


Sec. 78.10  Project grant approval process.

    The State POC will solicit applications from eligible applicants, 
review projects for eligibility, and select applications for funding. 
Those project applications will then be forwarded to FEMA for final 
approval. FEMA will provide funding on a project by project basis 
through a supplement to the annual Cooperative Agreement. The FEMA 
Regional Director will notify States regarding the program schedule at 
the beginning of each fiscal year.


Sec. 78.11  Minimum project eligibility criteria.

    The identification of a project or activity in an approved Flood 
Mitigation Plan does not mean it meets FMA eligibility criteria. 
Projects must:
    (a) Be cost-effective, not costing more than the anticipated value 
of the reduction in both direct damages and subsequent negative impacts 
to the area if future floods were to occur. Both costs and benefits are 
computed on a net present value basis.
    (b) Be in conformance with 44 CFR part 9, Floodplain Management and 
Protection of Wetlands; Executive Order 12699, Seismic Safety of 
Federal and Federally Assisted or Regulated New Building Construction; 
44 CFR part 10, Environmental Considerations; and any applicable 
environmental laws and regulations.
    (c) Be technically feasible.
    (d) Be in conformance with the minimum standards of the NFIP 
Floodplain Management Regulations at 44 CFR part 60.
    (e) Be in conformance with the Flood Mitigation Plan; the type of 
project being proposed must be identified in the plan.
    (f) Be located physically in a participating NFIP community that is 
not on probation or must benefit such community directly by reducing 
future flood damages.


Sec. 78.12  Eligible types of projects.

    The following types of projects are eligible for funding through 
FMA, providing they meet all other eligibility criteria.
    (a) Acquisition of insured structures and underlying real property 
in fee simple and easements restricting real property to open space 
uses.
    (b) Relocation of insured structures from acquired or restricted 
real property to non hazard-prone sites.
    (c) Demolition and removal of insured structures on acquired or 
restricted real property.

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    (d) Elevation of insured residential structures in accordance with 
44 CFR 60.3.
    (e) Elevation or dry floodproofing of insured non-residential 
structures in accordance with 44 CFR 60.3.
    (f) Other activities that bring an insured structure into 
compliance with the floodplain management requirements at 44 CFR 60.3.
    (g) Minor physical flood mitigation projects that reduce localized 
flooding problems and do not duplicate the flood prevention activities 
of other Federal agencies.
    (h) Beach nourishment activities.


Sec. 78.13  Grant administration.

    (a) FEMA may contribute up to 75 percent of the total eligible 
costs of each grant. At least 25 percent of the total eligible costs 
will be provided from a nonfederal source. Of this amount, not more 
than one half will be provided from in-kind contributions. Allowable 
costs will be governed by OMB Circular A-87 and 44 CFR part 13.
    (b) The grantee must submit performance and financial reports to 
FEMA and must ensure that all subgrantees are aware of their 
responsibilities under 44 CFR parts 13 and 14.
    (c) FEMA will recapture any funds provided to a State or a 
community under FMA and deposit the amounts in the National Flood 
Mitigation Fund if the applicant has not provided the appropriate 
matching funds, the approved project has not been completed within the 
timeframes specified in the grant agreement, or the completed project 
does not meet the criteria specified in the regulations in this part.


Sec. 78.14  Alternative procedures.

    For the purposes of this part, alternative procedures are available 
which allow the community to coordinate directly with FEMA in 
implementing the program. These alternative procedures are available in 
the following circumstances. Native American tribes or authorized 
tribal organizations may submit plans and applications to the State POC 
or directly to the FEMA Regional Director. If a Governor chooses not to 
identify a POC to coordinate the FMA, communities may also submit plans 
and applications to the FEMA Regional Director.

    Dated: March 13, 1997.
James L. Witt,
Director.
[FR Doc. 97-6910 Filed 3-19-97; 8:45 am]
BILLING CODE 6718-04-P