[Federal Register Volume 66, Number 123 (Tuesday, June 26, 2001)]
[Rules and Regulations]
[Pages 33897-33900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15807]


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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 70

RIN 3067-AD19


National Flood Insurance Program (NFIP); Clarification of Letter 
of Map Amendment Determinations

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Final rule.

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SUMMARY: We, FEMA, are amending our procedures for issuing Letters of 
Map Amendment (also referred to as LOMAs) to add a possible outcome to 
those already described in our rules. When a property is outside a 
designated Special Flood Hazard Area (SFHA) as shown on the NFIP map we 
will issue a LOMA but will not modify the Flood Hazard Boundary Map 
(FHBM) or Flood Insurance Rate Map (FIRM).

EFFECTIVE DATE: July 26, 2001.

FOR FURTHER INFORMATION CONTACT: Matthew B. Miller, P.E., Federal 
Insurance Administration, Federal Emergency Management Agency at (202) 
646-3461, or (email) [email protected].

SUPPLEMENTARY INFORMATION:

Background

    Congress created the NFIP in 1968 to provide federally supported 
flood insurance coverage, which generally had not been available 
through private insurance companies. The program is based on an 
agreement between the Federal Government and each flood-prone community 
that chooses to participate in the program. FEMA makes flood insurance 
available to property owners within a community provided that the 
community adopts and enforces floodplain management regulations that 
meet or exceed the minimum requirements of the NFIP set forth in Title 
44, Chapter I, Part 60 of the NFIP Floodplain Management Regulations 
(44 CFR Part 60).

Mandatory Purchase of Insurance

    The Flood Disaster Protection Act of 1973, as amended by the 
National Flood Insurance Reform Act of 1994, mandates the purchase of 
flood insurance on structures located in identified SFHAs as a 
condition of Federal or federally-related financial assistance for 
acquisition or construction of structures in SFHAs of any community. 
The Acts prohibit Federal agency lenders, such as the Small Business 
Administration, United States Department of Agriculture's Rural Housing 
Service, and Government-Sponsored Enterprises for Housing (Freddie Mac 
and Fannie Mae) from making, increasing, guaranteeing, or purchasing a 
loan secured by improved real estate or mobile home(s) in an SFHA, 
unless flood insurance has been purchased and maintained on the 
property during the term of the loan. The Acts also prohibit federally-
regulated lenders from making, increasing, extending, or renewing any 
loan secured by improved real estate located in the SFHA in a 
participating community unless the secured property and any personal 
property securing the loan is covered by flood insurance. The 
prohibition of financial assistance also applies to non-participating 
communities.

Need for Clarification of Determinations

    Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101) requires the Director of FEMA to

[[Page 33898]]

identify and map floodplains and to identify flood risk zones, and also 
makes provision for revising and updating floodplains and flood-risk 
zones and requiring public notification of flood map changes. The 
requirements for amending the FIRMs are in 44 CFR part 70, Procedure 
for Map Correction.
    We amend or revise NFIP flood maps for a number of reasons, such as 
the availability of improved techniques for assessing the flood risk, 
changes in the physical condition of the floodplain or watershed, or as 
additional data become available to improve the identification of flood 
hazards. The criteria for determining whether to remove unimproved land 
or land with structures from the SFHA because ground elevations of the 
land or structures are above the BFE are in sections (Secs. ) 70.3 and 
70.4. If the criteria are met, we will issue a LOMA.
    When requesting a LOMA, property owners must submit adequate 
supporting data according to the criteria established in Secs. 70.3 and 
70.4, such as a legal description of the property, location of the 
insurable structure on the property, and information regarding the 
lowest adjacent grade (LAG) elevation. However, if the structure in 
question, when plotted on the NFIP map, does not touch the mapped SFHA, 
we do not require the LAG elevation as part of the data that support 
the request.
    Under Sec. 70.4, after we review the scientific or technical 
information that the LOMA applicant submitted, we notify the applicant 
that we have compared the ground elevations of the entire legally 
defined parcel of land or the elevation of the lowest adjacent grade to 
a structure with the elevation of the base flood and that:
    (a) The property is within a designated flood-risk zone and we 
state the basis for our determination; or
    (b) The property should not be included within a designated flood-
risk zone and we will amend the FHBM or the FIRM; or
    (c) We need an additional 60 days to make a determination.
    There is an alternative outcome that we sometimes encounter during 
the LOMA review process that part 70 does not describe. After plotting 
the property location on the NFIP map, a property or structure may fall 
outside the delineated SFHA. When this happens, the LOMA states that 
the property or structure is ``out as shown'' and there is no need to 
take action to correct the map because the map already indicates that 
the property or structure falls outside the SFHA.
    There has been considerable confusion over the determination made 
in some LOMAs that state a property or structure is ``out as shown'' on 
the effective NFIP map. Specifically, when a third party determination 
company has made a determination for a lender that a structure is in 
the SFHA and the borrower requests a LOMA from FEMA that results in a 
determination that the structure is already mapped outside the SFHA, 
lenders are requesting that the third party change its finding to agree 
with FEMA's. Without comparing the data used by the determination 
company to the data used by FEMA comparing the property and structure, 
a conclusion is unsure. If this conflict arises during the loan 
origination process, there is an established process for resolving 
disputes under part 65.17: ``Review of Determinations.'' We are 
amending this rule to clarify the status of LOMAs that make a 
determination of ``out as shown.''
    By this rule, we are adding an additional possible outcome to those 
described in Sec. 70.4: The property is not within a designated SFHA as 
shown on the NFIP map and no modification of the Flood Hazard Boundary 
Map or FIRM is necessary.

Administrative Procedure Act Statement

    Under the National Flood Insurance Program FEMA must identify 
floodprone areas throughout the United States and revise and update 
flood maps when sufficient technical data justify a request for map 
amendment or map revision (42 U.S.C. 4101). If an insurable property is 
located within an identified SFHA, the property owner must obtain flood 
insurance under specified conditions (42 U.S.C. 4012a). It follows that 
if an insurable property is located outside an SFHA the mandatory flood 
insurance purchase requirements of the Flood Disaster Protection Act of 
1973 do not apply (although the owner may purchase flood insurance 
voluntarily).
    This rule is an ``interpretative'' rule under the Administrative 
Procedure Act (5 U.S.C. 553(b)(A)). The rule interprets the National 
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 
1973 to clarify that when we find sufficient technical data and 
determine that a property or structure is ``out as shown'' on an 
existing FHBM or FIRM, that is, when the property is located outside an 
SFHA as shown on the map, we will issue a Letter of Map Amendment but 
will not modify the FHBM or FIRM.
    Accordingly, we have determined that this rule is not subject to 
the requirements of 5 U.S.C. 553(b), and we are making the rule 
effective upon publication under the authority of 5 U.S.C. 553(d)(2). 
The Office of Management and Budget, Office of Information and 
Regulatory Affairs, has reviewed this rule.

National Environmental Policy Act (NEPA)

    NEPA imposes requirements for considering the environmental impacts 
of agency decisions. It requires that an agency prepare an 
Environmental Impact Statement (EIS) for ``major federal actions 
significantly affecting the quality of the human environment.'' If an 
action may or may not have a significant impact, the agency must 
prepare an environmental assessment (EA). If, as a result of this 
study, the agency makes a Finding of No Significant Impact (FONSI), no 
further action is necessary. If it will have a significant effect, then 
the agency uses the EA to develop an EIS.

Categorical Exclusions

    Agencies can categorically identify actions (for example, repair of 
a building damaged by a disaster) that do not normally have a 
significant impact on the environment. The purpose of this interpretive 
rule is to clarify and state expressly in our rules that when we 
determine that a property or structure is ``out as shown'' on an 
existing FHBM or FIRM, we will issue a Letter of Map Amendment but will 
not modify the FHBM or FIRM.
    Accordingly, we have determined that this rule is excluded from the 
preparation of an environmental assessment or environmental impact 
statement under 44 CFR 10.8(d)(2)(ii), where the rule is related to 
actions that qualify for categorical exclusion under 44 CFR 
10.8(d)(2)(iv).

Paperwork Reduction Act

    This rule requires the collection of information. Under the 
Paperwork Reduction Act (Act) we must consider the impact of paperwork 
and other information collection burdens imposed on the public. The Act 
mandates specific reductions in the amount of paperwork requirements 
imposed by agencies. It requires specific approval by the Office of 
Management and Budget (OMB) of any new requirements for collection of 
information imposed on ten or more persons by an agency; without such 
approval, the agency lacks the authority to enforce any such 
requirement. The Act also requires us to inform respondents that a 
response is not required unless the collection of information displays 
a valid OMB control number.
    OMB has previously approved the following information collection

[[Page 33899]]

requirements covered by this final rule under the provisions of the 
Paperwork Reduction Act, as amended:

------------------------------------------------------------------------
        OMB Control Number                         Title
------------------------------------------------------------------------
3067-0147, Expires                 Report to Submit Technical or
   8/31/2001                        Scientific Data to Correct Mapping
                                    Deficiencies Unrelated to Community-
                                    Wide Elevation Determinations
                                    (Amendments & Revisions to National
                                    Flood Insurance Program Map)
3067-0148, Expires                 Consultation with Local Officials to
  7/31/2001                         Assure Compliance with Sections 110
                                    and 206 of the Flood Disaster
                                    Protection Act of 1973 (Revisions to
                                    National Flood Insurance Program
                                    Maps) 81-89/81/89A 81-89B/81-89C 81/
                                    89D/81/89E 81-89F/81-89G 81-89H/81-
                                    89I 81-89J/81-89K
3067-0257, Expires                 Report to Submit Technical Data to
  7/31/2001                         Correct Mapping Deficiencies
                                    Unrelated to Community-Wide
                                    Elevation Determinations for a
                                    Single Residential Lot or Structure.
                                    FEMA-FORM-81-92.
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We will be applying to the Office of Management and Budget to extend 
our authorizations under Control Number 3067-0147, 3067-0148, and 3067-
0257. Any person who is to respond to this collection of information is 
not required to respond unless the collection of information displays a 
currently valid OMB control number.

Executive Order 12866, Regulatory Planning and Review

    We have prepared and reviewed this rule under the provisions of 
E.O. 12866, Regulatory Planning and Review. Under Executive Order 
12866, 58 FR 51735, October 4, 1993, a significant regulatory action is 
subject to OMB review and the requirements of the Executive Order. The 
Executive Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This rule is an ``interpretative'' rule under the Administrative 
Procedure Act (5 U.S.C. 553(b)(A)). The rule interprets the National 
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 
1973 to clarify that when we find sufficient technical data and 
determine that a property or structure is ``out as shown'' on an 
existing FHBM or FIRM, that is, when the property is located outside an 
SFHA as shown on the map, we will issue a Letter of Map Amendment and 
that does not modify the FHBM or FIRM. We know of no conditions that 
would qualify the rule as a ``significant regulatory action'' within 
the definition of section 3(f) of the Executive Order.
    Accordingly, this rule is not a major rule as defined in 5 U.S.C. 
804(2). To the extent possible this rule adheres to the principles of 
regulation as set forth in Executive Order 12866. The Office of 
Management and Budget (OMB) has not reviewed this rule under Executive 
Order 12866.

Executive Order 13132, Federalism

    Executive Order 13132, Federalism, dated August 4, 1999, sets forth 
principles and criteria that agencies must adhere to in formulating and 
implementing policies that have federalism implications, that is, 
regulations that have substantial direct effects on the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Federal agencies must closely examine the statutory 
authority supporting any action that would limit the policymaking 
discretion of the States, and to the extent practicable, must consult 
with State and local officials before implementing any such action.
    We have reviewed this final rule under Executive Order 13132 and 
have concluded that the rule does not have federalism implications as 
defined by the Executive Order. The rule interprets the National Flood 
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 to 
clarify that when we find sufficient technical data and determine that 
a property or structure is ``out as shown'' on an existing FHBM or 
FIRM, that is, when the property is located outside an SFHA as shown on 
the map, we will issue a Letter of Map Amendment and that does not 
modify the FHBM or FIRM.
    We have determined that the rule does not significantly affect the 
rights, roles, and responsibilities of States, and involves no 
preemption of State law nor does it limit State policymaking 
discretion. Accordingly, the provisions of Executive Order 13132, 
Federalism, do not apply to this rule. The Office of Management and 
Budget has reviewed this rule under the provisions of Executive Order 
13132.
    This rule involves no policies that have federalism implications 
under Executive Order 13132, Federalism, dated .

Congressional Review of Agency Rulemaking

    We have sent this final rule 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 is an interpretive rule in support of normal 
day-to-day mapping activities related to Letters of Map Amendment under 
the National Flood Insurance Program.
    The rule will not result in a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. 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 foreign-based enterprises. This final rule is subject to 
the information collection requirements of the Paperwork Reduction Act 
and OMB has assigned Control Nos. 3067-0147, 3067-0148, and 3067-0257. 
The rule is not an unfunded Federal mandate within the meaning of the 
Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, and any 
enforceable duties that we impose are a condition of Federal assistance 
or a duty arising from participation in a voluntary Federal program.

List of Subjects in 44 CFR Part 70

    Administrative practice and procedure, Reporting and recordkeeping 
requirements.


    Accordingly, we amend 44 CFR 70 as follows:

PART 70--PROCEDURE FOR MAP CORRECTION

    1. The authority citation for Part 70 continues 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.


[[Page 33900]]



    2. We revise Sec. 70.4 to read as follows:


Sec. 70.4  Review by the Director.

    The Director, after reviewing the scientific or technical 
information submitted under the provisions of Sec. 70.3, shall notify 
the applicant in writing of his/her determination within 60 days after 
we receive the applicant's scientific or technical information that we 
have compared either the ground elevations of an entire legally defined 
parcel of land or the elevation of the lowest adjacent grade to a 
structure with the elevation of the base flood and that:
    (a) The property is within a designated A, A0, A1-30, AE, AH, A99, 
AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A, V0, V1-30, VE, or V Zone, and 
will state the basis of such determination; or
    (b) The property should not be within a designated A, A0, A1-30, 
AE, AH, A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A,V0, V1-30, VE, or 
V Zone and that we will modify the FHBM or FIRM accordingly; or
    (c) The property is not within a designated A, A0, A1-30, AE, AH, 
A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A,V0, V1-30, VE, or V Zone 
as shown on the FHBM or FIRM and no modification of the FHBM or FIRM is 
necessary; or
    (d) We need an additional 60 days to make a determination.
* * * * *

Robert F. Shea,
Acting Administrator, Federal Insurance Administration.
[FR Doc. 01-15807 Filed 6-25-01; 8:45 am]
BILLING CODE 6718-04-P