[Federal Register Volume 81, Number 209 (Friday, October 28, 2016)]
[Proposed Rules]
[Pages 74967-74979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25521]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 50, 55, 58, and 200

[Docket No. FR-5717-P-01]
RIN 2501-AD62


Floodplain Management and Protection of Wetlands; Minimum 
Property Standards for Flood Hazard Exposure; Building to the Federal 
Flood Risk Management Standard

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise HUD's regulations governing 
floodplain management to require, as part of the decision making 
process established to ensure compliance with Executive orders on 
Floodplain Management and Federal Flood Risk Management, that a HUD 
assisted or financed (including mortgage insurance) project involving 
new construction or substantial improvement that is situated in an area 
subject to floods be elevated or floodproofed between 2 and 3 feet 
above the base flood elevation as determined by best available 
information.
    The proposed rule would also revise HUD's Minimum Property 
Standards for one-to-four unit housing under HUD mortgage insurance and 
low-rent public housing programs. Building to the proposed standards 
will, consistent with the Executive orders, increase resiliency to 
flooding, reduce the risk of flood loss, minimize the impact of floods 
on human safety, health, and welfare, and promote sound, sustainable, 
long-term planning informed by a more accurate evaluation of flood risk 
that takes into account possible sea level rise and increased 
development associated with population growth.
    This document also proposes to revise a categorical exclusion 
available when HUD performs the environmental review under the National 
Environmental Policy Act (NEPA) and related Federal laws by making it 
consistent with changes to a similar categorical exclusion that is 
available to HUD grantees or other responsible entities when they 
perform these environmental reviews. This change will make the review 
standard identical regardless of whether HUD or a grantee is performing 
the review.

DATES: Comment Due Date: December 27, 2016.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410-0500. Communications must refer 
to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    Note: To receive consideration as public comments, comments must be 
submitted through one of the two methods specified above. Again, all 
submissions must refer to the docket number and title of the rule.
    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an appointment to review the public comments must be 
scheduled in advance by calling the Regulations Division at 202-708-
3055 (this is not a toll-free number). Individuals with speech or 
hearing impairments may access this number via TTY by calling the 
Federal Relay Service at 800-877-8339. Copies of all comments submitted 
are available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Danielle Schopp, Director, Office of 
Environment and Energy, Office of Community Planning and Development, 
Department of Housing and Urban Development, 451 7th Street SW., Room 
7250, Washington, DC 20410-8000, telephone number 202-402-4442. For 
inquiry by phone or email, contact Elizabeth Zepeda, Environmental 
Review Division, Office of Environment and Energy, Office of Community 
Planning and Development, at 202-402-3988 (this is not a toll-free 
number), or email to: [email protected]. For questions 
regarding the Minimum Property Standards, Robert L Frazier, Housing 
Program Policy Specialist, Office of Housing, Home Valuation Division, 
202-708-2121. Persons with hearing or speech impairments may access 
this number through TTY by calling the toll-free Federal Relay Service 
at 800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    In the United States, floods caused 4,586 deaths from 1959 to 
2005.\1\ With climate change and associated sea-level rise, flooding 
risks have increased over time, and are anticipated to continue 
increasing. The National Climate Assessment (May 2014), for example,

[[Page 74968]]

projects that extreme weather events, such as severe flooding, will 
persist throughout the 21st century. Severe flooding can cause 
significant damage to infrastructure, including buildings, roads, 
ports, industrial facilities, and even coastal military installations. 
With more than $260 billion in flood damages across the Nation since 
1980, it is necessary to take action to responsibly use Federal funds, 
and HUD must ensure it does not wastefully make Federal investments in 
the same structures after repeated flooding events. In addition, the 
FFRMS will align with the thousands of communities across the country 
that have strengthened their local floodplain management codes and 
standards to ensure that buildings and infrastructure are resilient to 
flood risk. HUD recognizes that the need to make structures resilient 
also requires a flexible approach to adapt to the needs of the Federal 
agency, local community, and the circumstances surrounding each project 
or action.
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    \1\ ``Flood Fatalities in the United States,'' Sharon T. Ashley 
and Walker S. Ashley, Journal of Applied Meteorology and 
Climatology. Available at: http://journals.ametsoc.org/doi/pdf/10.1175/2007JAMC1611.1.
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    In response to the threats that increasing flood risks pose to life 
and taxpayer funded property, on January 30, 2015, the President signed 
Executive Order 13690, Establishing a Federal Flood Risk Management 
Standard and a Process for Further Soliciting and Considering 
Stakeholder Input. Significantly, Executive Order 13690 amended 
Executive Order 11988, Floodplain Management, issued in 1977 \2\ by, 
among other things, revising Section 6(c) of Executive Order 11988 to 
provide new approaches to establish the floodplain. Executive Order 
13690 provided, however, that prior to any actions implementing 
Executive Order 13690, additional input from stakeholders be solicited 
and considered. Consistent with this direction, the Federal Emergency 
Management Agency (FEMA), as Chair of the Mitigation Framework 
Leadership Group (MitFLG \3\), published a notice in the Federal 
Register seeking comment on the proposed ``Revised Guidelines for 
Implementing Executive Order 11988, Floodplain Management'' to provide 
guidance to agencies on the implementation of Executive Orders 13690 
and 11988 (80 FR 6530, February 5, 2015). On March 26, 2015 (80 FR 
16018), FEMA on behalf of MitFLG published a document in the Federal 
Register extending the public comment period for 30 days until May 6, 
2015. MitFLG held 9 public listening sessions across the country that 
were attended by over 700 participants from State and local governments 
and other stakeholder organizations to discuss the Guidelines.\4\ 
MitFLG considered stakeholder input and provided recommendations to the 
Water Resources Council.\5\
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    \2\ E.O. 13690 was published in the Federal Register on February 
4, 2015 (80 FR 6425). Throughout this document, references to E.O. 
11988 as amended by E.O. 13690 will be referred to as ``Executive 
Order 11988, as amended.'' References to E.O. 11988 as published in 
1977 will simply be referred to as ``Executive Order 11988.''
    \3\ The Mitigation Framework Leadership Group (MitFLG) is a 
senior level group formed in 2013 to coordinate mitigation efforts 
across the Federal Government and to assess the effectiveness of 
mitigation capabilities as they are developed and deployed across 
the Nation. The MitFLG includes relevant local, state, tribal, and 
Federal organizations. The balance of non-Federal members ensures 
appropriate integration of Federal efforts across the whole 
community.'' The MitFLG Charter is available at: http://www.aswm.org/pdf_lib/nffa/mitigation_framework_leadership_group_charter.pdf.
    \4\ A list of stakeholder listening sessions can be found at: 
www.fema.gov/federal-flood-risk-management-standard-ffrms.
    \5\ The Water Resources Council (WRC) is tasked to maintain a 
continuing study and prepare an assessment of the adequacy of 
supplies of water necessary to meet the water requirements in each 
water resource region in the United States and the national interest 
therein. The WRC is a means for the coordination of the water and 
related land resources policies and programs of the several Federal 
agencies. The WRC is composed of the Secretary of the Interior, the 
Secretary of Agriculture, the Secretary of the Army, the Secretary 
of Commerce, the Secretary of Housing and Urban Development, the 
Secretary of Transportation, the Administrator of the Environmental 
Protection Agency, and the Secretary of Energy.
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    On October 8, 2015, the Water Resources Council issued updated 
``Guidelines for Implementing Executive Order 11988, Floodplain 
Management, and Executive Order 13690, Establishing a Federal Flood 
Risk Management Standard and a Process for Further Soliciting and 
Considering Stakeholder Input'' (Guidelines). The Guidelines state that 
although the Guidelines describe various approaches for determining the 
higher vertical flood elevation and corresponding horizontal floodplain 
for federally funded projects, they are not meant to be an elevation 
standard, but are a resilience standard. Accordingly, roads, parking 
lots, and other horizontal infrastructure do not require elevation nor 
do acquisitions of structures that do not require substantial 
improvements. However, the new Guidelines require that all future 
actions where federal funds are used for new construction, substantial 
improvement or to address substantial damage meet the level of 
resilience established by the Guidelines. In implementing the 
Guidelines and establishing the Federal Flood Risk Management Standard 
(FFRMS), Federal agencies were to select among the following three 
approaches for establishing the flood elevation and hazard area in 
siting, design, and construction:
     Climate-Informed Science Approach (CISA): Utilizing best-
available, actionable data and methods that integrate current and 
future changes in flooding based on science,
     Freeboard \6\ Value Approach (FVA): Two or three feet of 
elevation, depending on the criticality of the building, above the 100-
year, or 1 percent-annual-chance, flood elevation, or
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    \6\ Freeboard is defined by FEMA as ``a factor of safety usually 
expressed in feet above a flood level for purposes of floodplain 
management. ``Freeboard'' tends to compensate for the many unknown 
factors that could contribute to flood heights greater than the 
height calculated for a selected size flood and floodway conditions, 
such as wave action, bridge openings, and the hydrological effect of 
urbanization of the watershed.'' See 44 CFR 59.1. Freeboard is not 
required by NFIP standards, but communities are encouraged to adopt 
at least a one-foot freeboard to account for the one-foot rise built 
into the concept of designating a floodway and the encroachment 
requirements where floodways have not been designated. Freeboard may 
result in lower flood insurance rates due to lower flood risk. 
Available at: http://www.fema.gov/freeboard.
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     500 Year Flood (0.2 Percent Flood) Approach: 500-year, or 
0.2 percent-annual-chance, flood elevation.
    The FVA and 0.2 Percent Flood approaches result in higher 
elevations with correspondingly larger horizontal floodplain areas. 
CISA will generally have a similar result, except that agencies using 
CISA may find the resulting elevation to be equal to or lower than the 
current elevation in some areas due to the nature of the specific 
climate change processes and physical factors affecting flood risk at 
the project site. However, as a matter of policy established in the 
Executive Order 11988 and 13690 Implementing Guidelines, CISA can only 
be used if the resulting flood elevation is equal to or higher than 
current base flood elevation. The higher elevations result in a larger 
horizontal floodplain as illustrated below:

[[Page 74969]]

[GRAPHIC] [TIFF OMITTED] TP28OC16.000

    Executive Order 11988, issued May 24, 1977 (published in the 
Federal Register on May 25, 1977 at 42 FR 26951), requires Federal 
agencies to avoid, to the extent possible, the long and short term 
adverse impacts associated with the occupancy and modification of 
floodplains and to avoid direct and indirect support of floodplain 
development wherever there is a practicable alternative. Floodplains 
are found both in coastal flood areas, where rising tides and storm 
surge are often responsible for flooding, and in riverine flood areas 
where moving water bodies may overrun their banks due to heavy rains or 
snow melt. Because flood risk can change over time, FEMA continually 
revises floodplain maps to incorporate new information and reflect 
current understanding of flood risk.
    Prior to Executive Order 13690, a floodplain for Executive Order 
11988 purposes referred to the lowland and relatively flat areas 
adjoining inland and coastal waters including flood-prone areas of 
offshore islands, including at a minimum, that area subject to a one 
percent or greater chance of flooding in any given year (often referred 
to as the ``100-year'' flood or ``base flood''). Executive Order 13690 
amended Executive Order 11988, to require agencies to update the FFRMS 
and the original Executive Order 11988 floodplain using one (or a 
combination) of the three approaches listed above, which are 
incorporated in the FFRMS.
    Consistent with Executive Order 11988, when no practicable 
alternative exists to development in flood-prone areas, HUD requires 
the design or modification of the proposed action to minimize potential 
adverse impact to and from flooding. HUD has implemented Executive 
Order 11988 and its 8-step review process through regulations at 24 CFR 
part 55. HUD requires the 8-step review process for activities 
occurring in the floodplain such as new construction of infrastructure 
or substantial improvement of buildings and hospitals. HUD requires 
that all HUD assisted or financed construction and improvements 
(including mortgage insurance actions) undergo the 8-step review 
process unless they are subject to an exception or categorical 
exclusion under 24 CFR 50.19, 24 CFR 55.12, 24 CFR 58.34, or 24 CFR 
58.35(b). For example, the 8-step review process in Sec.  55.20 does 
not apply to non-critical\7\ mortgage insurance actions and other 
financial assistance for the purchasing, mortgaging or refinancing of 
existing one-to-four family properties in communities that are in the 
Regular Program of the National Flood Insurance Program (NFIP) and in 
good standing, where the property is not located in a floodway or 
coastal high hazard area, or to financial assistance for minor repairs 
or improvements on one-to-four family properties. While the 8-step 
review process may not apply to these activities, HUD's current Minimum 
Property Standards at 24 CFR 200.926d require that single-family 
housing newly constructed under HUD mortgage insurance and specific 
low-rent public housing programs have its lowest floor at or above the 
base flood elevation.
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    \7\ Non-critical actions are any actions that are not critical 
actions as defined at 24 CFR 55.2(b)(3)(i).
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II. This Proposed Rule

A. Short Summary

    The proposed revision to HUD's floodplain regulations uses the 
framework of Executive Order 11988 which HUD has implemented for almost 
40 years and does not change which actions require elevation and 
floodproofing of structures. This proposed rule would require that non-
critical actions be elevated 2 feet above the base flood elevation. In 
addition, the rule would require that critical actions be elevated 
above the greater of the 500-year floodplain or 3 feet above the base 
flood elevation. For structures subject to HUD's floodplain regulation, 
this proposed rule also would enlarge the horizontal area of interest 
commensurate with the vertical increase, but the rule does not change 
the scope of actions to which the floodplain review process or 
elevation requirements in the floodplains regulations apply. The 
proposed rule would also revise HUD's Minimum Property Standards for 
one-to-four-unit housing under HUD mortgage insurance and low-rent 
public housing programs to require that the lowest floor in both newly 
constructed and substantially improved structures located within the 
100-year floodplain be built at least 2 feet above the base flood 
elevation as determined by best available information, but does not 
enlarge the horizontal area of interest.

[[Page 74970]]

B. Detailed Discussion

    As communities continue to recover from the devastating effects of 
Hurricane Sandy and other flood disasters, HUD has determined that 
their lessons cannot be ignored and point to the need for mitigation 
and resilience standards that ensure that structures located in flood-
prone areas are built or rebuilt stronger, safer, and less vulnerable 
to future flooding events. As a result, consistent with the FVA 
described above for HUD assisted or financed actions, this proposed 
rule would require that structures involving new construction and 
substantial improvements and subject to 24 CFR part 55 be built to 
FFRMS and elevated at least 2 feet above the base flood elevation using 
best available information.\8\ For structures that meet the definition 
of critical actions as described in Sec.  55.2(b)(3)(i), this proposed 
rule would require that structures in the FFRMS floodplain be elevated 
to the greater of the 500-year floodplain or 3 feet above the base 
flood elevation. For new or substantially improved non-residential 
structures in the FFRMS floodplain that are not critical actions, HUD 
is proposing that the structure either be elevated to the same level as 
residential structures, or, alternatively, be designed and constructed 
such that the structure is floodproofed to at least 2 feet above the 
base flood elevation.
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    \8\ Best available information, may be the latest FEMA issued 
data or guidance, including advisory data (such as Advisory Base 
Flood Elevations (ABFE)), preliminary Flood Insurance Rate Maps 
(FIRMs), final FIRMs, or other Federal, State or local information.
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    This proposed rule would also apply a similar new elevation 
standard to one-to-four family residential structures, located in the 1 
percent-annual-chance floodplain, that involve new construction or 
substantial improvement with mortgages insured by the Federal Housing 
Administration. This proposed rule would require elevation of these 
structures at least 2 feet above base flood elevation using the best 
available information. In order to meet the goal of improving the 
resilience of such properties while also aligning to the manner in 
which such programs already operate, the proposed rule excludes the 
horizontal extent of the FVA described above for such properties, as 
explained further in later in this preamble.
    Elevation standards for manufactured housing receiving mortgage 
insurance are not covered in this rule change, but HUD expects to 
address this issue in future rulemaking. However, 24 CFR part 55, 
subject to exceptions and exclusions, will continue to apply to 
manufactured housing that receives assistance that is not in the form 
of mortgage insurance. This rule does not change the scope of 
activities that require compliance with the 8-step process, but rather 
it changes the vertical and horizontal extent of the floodplain for the 
purposes of 24 CFR part 55.
    There are two primary purposes for this rulemaking. First, HUD's 
experience in the wake of Hurricane Sandy and other flood disasters is 
that unless structures in flood-prone areas are properly designed, 
constructed, and elevated, they may not withstand future severe 
flooding events. As recognized by MitFLG and required by the FFRMS and 
Executive Order 13690, requiring structures to be elevated an 
additional elevation above the base flood elevation will increase 
resiliency and reduce property damage, economic loss, and loss of life, 
and can also benefit homeowners by reducing flood insurance rates. 
These higher elevations provide an extra buffer of 2 to 3 feet above 
the base flood elevation based on the best available information to 
improve the long term resilience of communities. Second, the higher 
elevation standards help account for increased flood risk associated 
with projected sea level rise, which is not considered in current FEMA 
maps and flood insurance costs. As stated in ``Global Sea Level Rise 
Scenarios for the United States National Climate Assessment'' U.S. 
Department of Commerce, National Oceanic and Atmospheric 
Administration, December 2012,\9\ federal experts have a very high 
confidence (greater than a 9 in 10 chance) that global mean sea level 
will rise at least 0.2 meters (8 inches) and no more than 2.0 meters 
(6.6 feet) by the year 2100. The higher elevation standard will address 
the lower end of this projection, while also allowing for greater 
impacts to be addressed as well.
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    \9\ Available at http://cpo.noaa.gov/Home/AllNews/TabId/315/ArtMID/668/ArticleID/80/Global-Sea-Level-Rise-Scenarios-for-the-United-States-National-Climate-Assessment.aspx.
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    This proposed rule uses the framework of Executive Order 11988 
which HUD has implemented for nearly forty years. The proposed rule in 
24 CFR part 55 does not change the requirements and guidance specifying 
when elevation and floodproofing of structures is required. For 
instance, HUD currently requires that a single family property 
involving new construction or substantial improvement financed with a 
HUD grant and located in the 1 percent-annual-chance floodplain in the 
effective Flood Insurance Rate Map (FIRM) be elevated to the effective 
FIRM base flood elevation. This proposed rule would add two feet of 
additional elevation to the base flood elevation as a resilience 
standard. Similarly, the proposed rule would not change the 
requirements or guidance governing rowhomes or structures with 
basements except to add two feet of additional elevation. As in the 
past, projects involving substantial improvement to rowhomes would have 
several options: (1) Elevate the effected home or homes, either by 
raising the floor within the home or elevating the full block; (2) if 
the homes are possibly historic, take formal steps to have the home(s) 
listed on the National Register of Historical Places or on a State 
Inventory of Historic Places, as structures with historic status are 
not required to elevate; or (3) alter the design plans so that 
substantial improvement is not being performed, such that elevation is 
not required. Likewise, some structures with basements would continue 
to be affected under the proposed rule. In some cases, raising the 
floor or filling in basements altogether may be necessary. In non-
residential structures, floodproofing could be an option to preserve 
basements. HUD does not anticipate significant impacts on basements 
from the proposed rule; since HUD began collecting data on single-
family properties basements in 2014, no single-family property has been 
affected by HUD's current flood elevation requirements.
    HUD chose the FVA over the CISA and the 0.2 Percent Flood 
approaches for a variety of reasons. First, the FVA can be applied 
consistently to any area participating in the NFIP. The FVA can be 
calculated using existing flood maps. This is not true for the CISA 
standard unless HUD were to establish criteria for every community 
regarding the application of particular climate and greenhouse gas 
scenarios and associated impacts (e.g., changes in precipitation 
patterns or relative sea-level rise rates). Rather than requiring this 
level of review and analysis, HUD chose the more direct FVA. Second, 
the two alternative approaches to FVA require expertise that may not be 
available to all communities. The 0.2 Percent Flood is not mapped in 
all communities, reflects in most coastal areas the stillwater (without 
storm surge) component of flooding and this is only appropriate for 
determining the horizontal floodplain extent. Local wave effects 
associated with the 0.2 percent stillwater flood elevation would need 
to be determined

[[Page 74971]]

for the data to be used in establishing first floor or floodproofing 
elevation or any other engineering application. The 0.2 Percent Flood 
also requires a significant degree of expertise to map over an area or 
for an individual site. The same is also true for the CISA standard, 
which requires not just historical analysis but a greater anticipation 
of trends and future conditions. Third, HUD anticipates that it will 
not be cost effective to establish the CISA or the 0.2 Percent Flood 
for all projects. HUD funds or assists tens of thousands of small 
projects each year. For example, repaving a road or rehabilitating a 
single family home may not necessitate the extra amounts of cost 
required by the CISA and 0.2 Percent Flood approaches. Fourth, as 
stated earlier, many states and communities already have success 
applying a higher-elevation approach to floodplains. Due to the 
familiarity that many communities have with higher elevation standards, 
the FVA was seen as a very practical approach with documented history 
of application. For all of these reasons, HUD chose the FVA approach.
    Requiring a higher elevation standard will also address increased 
risk that occurs when flood maps do not reflect the current development 
footprint. Additional development and impervious surface decrease 
floodplain capacity and increase flood risk to structures. As more of 
the floodplain is paved, the floodplain absorbs less water and the area 
subject to flooding is increased. For this reason and generalized 
uncertainty in flood modeling processes, two prominent building codes, 
the International Building Code and International Residential Code \10\ 
both recommend the use of elevation of structures--also called 
``freeboard''--to mitigate flood hazards. Freeboard is defined by FEMA 
to mean a factor of safety usually expressed in feet above base flood 
elevation for purposes of floodplain management. Freeboard is currently 
required by 20 States (plus the District of Columbia and Puerto Rico) 
and 596 localities.\11\
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    \10\ The IBC states: G103.1 Permit applications.
    The building official shall review all permit applications to 
determine whether proposed development sites will be reasonably safe 
from flooding. If a proposed development site is in a flood hazard 
area, all site development activities (including grading, filling, 
utility installation and drainage modification), all new 
construction and substantial improvements (including the placement 
of prefabricated buildings and manufactured homes) and certain 
building work exempt from permit under Section 105.2 shall be 
designed and constructed with methods, practices and materials that 
minimize flood damage and that are in accordance with this code and 
ASCE 24.
    ASCE 24 then states a few freeboard requirements. See: http://www.fema.gov/media-library-data/1436288616344-93e90f72a5e4ba75bac2c5bb0c92d251/ASCE24-14_Highlights_Jan2015_revise2.pdf. The IRC provides that: Buildings 
and structures in flood hazard areas designated as Coastal A Zones 
shall have the lowest floors elevated to or above the base flood 
elevation plus 1 foot (305 mm), or to the design flood elevation, 
whichever is higher. R322.2.1 Elevation requirements. http://publicecodes.cyberregs.com/icod/irc/2012/icod_irc_2012_3_sec022.htm.
    \11\ Association of State Floodplain Managers, States and Other 
Communities in FEMA CRS with Building Freeboard Requirements, 
(2015), available at http://www.floods.org/ace-files/documentlibrary/FloodRiskMngmtStandard/States_with_freeboard_and_CRS_Communities_with_Freeboard_in_Other_states_2-27-15.pdf.
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    A recent FEMA study also estimated that the size of floodplains and 
demand for flood insurance coverage will continue to increase.\12\ The 
study estimated that the total number of NFIP insurance policies was 
projected to increase by approximately 80 percent by 2100. The number 
of riverine policies may increase by about 100 percent and the number 
of coastal policies may increase by approximately 60 percent. The 
increase in the number of polices is due in part to development 
associated with normal population growth and in part to the effect of 
climate change on the amount of land in the floodplain within 
communities.
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    \12\ Available at: http://www.aecom.com/content/wp-content/uploads/2016/06/Climate_Change_Report_AECOM_2013-06-11.pdf
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    Requiring additional elevation above the base flood elevation also 
produces net savings in housing costs over time. HUD's mission is to 
create strong, sustainable, inclusive communities and quality 
affordable homes for all. Flood insurance and rebuilding costs can have 
drastic adverse effects on the affordability of homes. By elevating 
additional feet above the base flood elevation, homeowners may benefit 
from flood insurance premium reductions that will increase long-term 
affordability. As stated in FEMA's ``Home Builder's Guide To Coastal 
Construction, Designing for Flood Levels Above the BFE'' Technical 
Bulletin No. 1.6,\13\ constructing or reconstructing structures 2 feet 
above base flood elevation at a modest cost can result in premium 
savings of 50 percent in V Zone structures and 48 percent in A Zones. 
Please see the discussion of other cost reductions and benefits of 
increasing elevation in the regulatory impact analysis that accompanies 
this rule.
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    \13\ Available at: http://www.fema.gov/media-library-data/20130726-1537-20490-8057/fema499_1_6_rev.pdf
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1. Federal Flood Risk Management Standard Floodplain
    HUD proposes to implement FFRMS by revising Sec.  55.20, which is 
HUD's current 8-step process for evaluating HUD-assisted projects for 
flood risk and identifying steps to mitigate that risk. The 8-step 
process is currently triggered whenever a proposed non-critical action 
falls within the 100-year floodplain, as defined in Sec.  55.2(b)(9), 
and whenever a critical action falls within the 500-year floodplain, as 
defined in Sec.  55.2(b)(4). This proposed rule would expand the scope 
of Sec.  55.20 by applying it to all projects situated at an elevation 
at or below the FFRMS floodplain.
    HUD proposes to define FFRMS floodplain in Sec.  55.2(b)(12) for 
non-critical actions as land that is less than two feet above the 100-
year floodplain. For critical actions, the FFRMS floodplain would be 
defined to include land that is either within the 500-year floodplain 
or less than three feet above the 100-year floodplain. Section 55.20(e) 
of the proposed rule would provide that, in addition to the current 
mitigation and risk reduction requirements, all actions in the FFRMS 
floodplain must be elevated or, in certain cases, floodproofed above 
the FFRMS floodplain. If higher elevations, setbacks, or other 
floodplain management measures are required by state, tribal, or 
locally adopted code or standards, HUD would provide that those higher 
standards would apply.
    For non-critical actions that are non-residential structures or 
multifamily residential structures that have no residential dwelling 
units below the FFRMS floodplain, HUD is proposing that projects may, 
as an alternative to being designed and built above the FFRMS 
floodplain, be designed and constructed such that, below the FFRMS 
floodplain, the structure is floodproofed. HUD would, except for 
changing ``base flood level'' to ``FFRMS floodplain,'' as defined in 
Sec.  55.2(b)(12), adopt FEMA's requirements for floodproofing as 
provided in FEMA's regulations at 44 CFR 60.3(c)(3)(ii), which 
describes ``floodproofing'' as requiring that structures, ``together 
with attendant utility and sanitary facilities, be designed so that 
below the base flood level the structure is watertight with walls 
substantially impermeable to the passage of water and with structural 
components having the capability of resisting hydrostatic and 
hydrodynamic loads and effects of buoyancy.'' If higher standards are 
required by the NFIP or state, tribal, or locally adopted codes or 
standards, or if FEMA revises its NFIP regulation, those higher 
standards or

[[Page 74972]]

later regulation would apply; except that notwithstanding any later, 
less stringent general standard, HUD will continue to require 
floodproofing to at least the FFRMS floodplain for those projects. In 
summary, all new construction or substantial rehabilitation of non-
residential and certain mixed-use structures within the FFRMS 
floodplain that are not elevated must be floodproofed consistent with 
the latest FEMA standards above the level of the FFRMS floodplain. This 
provision would permit owners of non-residential and certain mixed-use 
buildings to construct structures in a way that is less expensive than 
elevation but allows the buildings to withstand flooding, thus 
appropriately balancing property protection with costs and reflecting 
the lower risk to human life and safety in non-residential structures 
or parts of structures.
    In the case of multifamily buildings, HUD would provide that the 
term ``lowest floor'' must be applied consistent with FEMA's Elevation 
Certificate guidance or FEMA's current guidance that establishes lowest 
floor. Specifically, HUD would define ``lowest floor'' to mean the 
lowest floor of the lowest enclosed area (including basement), except 
that an unfinished or flood resistant enclosure, usable solely for 
parking of vehicles, building access or storage in an area other than a 
basement area is not considered a building's lowest floor, provided, 
that such enclosure is not built so as to render the structure in 
violation of the non-elevation design requirements of 44 CFR 60.3.
    The definition of ``substantial improvement,'' codified at Sec.  
55.2(b)(10), would not change but continue to include any repair, 
reconstruction, modernization or improvement of a structure, the cost 
of which equals or exceeds 50 percent of the market value of the 
structure either: (1) Before the improvement or repair is started; or 
(2) if the structure has been damaged and is being restored, before the 
damage occurred. The definition of substantial improvement also 
includes repairs, reconstruction, modernization, or improvements that 
increase the average peak number of customers or employees likely to be 
on-site at any one time or the number of dwelling units in residential 
projects more than 20 percent. ``Substantial improvement'' does not 
include alterations to structures listed on the National Register of 
Historic Places or on a State Inventory of Historic Places or 
improvement of a structure to comply with existing state or local code 
specifications that is solely necessary to assure safe living 
conditions.
    The provisions relating to Letters of Map Amendment (LOMAs) and 
Letters of Map Revision (LOMRs) at Sec.  55.12(c)(8) as well as the 
provision at Sec.  55.26 covering the adoption of other agency 
floodplain and wetland reviews would also be updated to reflect the 
FFRMS.
2. Data Sources
    Under this proposed rule, the required data source and best 
available information under Executive Order 11988 remains the latest 
FEMA issued data or guidance, which includes advisory data (such as 
Advisory Base Flood Elevations (ABFE)) or preliminary and final Flood 
Insurance Rate Maps (FIRM). Executive Order 11988 on floodplain 
management requires that federal agencies use the best available 
information to determine the flood risk for locations of projects and 
activities. Section 55.2(b)(1) provides that when FEMA provides interim 
flood hazard data, such as ABFE or preliminary maps and studies, HUD or 
the responsible entity shall use the latest of these sources to 
establish the floodplain. If FEMA information is unavailable or 
insufficiently detailed, other federal, state, tribal, or local data 
may be used as ``best available information'' in accordance with 
Executive Order 11988. However, a base flood elevation from an interim 
or preliminary or non-FEMA source cannot be used if it is lower than 
the current FIRM and Flood Insurance Study. This proposed rule 
clarifies, however, that in addition to FIRMs or ABFEs, the use of 
sources, such as U.S. Global Change Research Program, National Oceanic 
and Atmospheric Administration, United States Army Corps of Engineers, 
U.S. Geological Survey, and other FEMA sources, regarding climate 
impacts and sea level rise may be considered and must be considered for 
Environmental Impact Statements (EIS). These agencies often offer 
analyses that are forward-looking and may be more robust than the data 
offered under NFIP, which does not currently analyze sea level rise in 
FIRMs. These sources cover subject areas such as estimated sea level 
rise or catastrophic failure of flood control projects that may lead 
the reviewer to determine that an elevation greater than the FFRMS 
floodplain is appropriate. These sources may supplement the FIRM or 
ABFE but cannot be used as a basis for a lower elevation than otherwise 
required under this part.
3. Other Changes
    In addition to increasing the elevation requirement, the rule 
proposes several other changes to enhance efficiency and consistency. 
First, the rule would amend the public notice requirements in 
Sec. Sec.  55.20(b)(1) and 58.43(a) to allow parties to provide the 
public with notice of potential actions using government Web sites in 
lieu of a ``local printed news medium'' or ``newspaper of general 
circulation in the affected community'' as required under the current 
regulations. Second, the proposed rule also adds the word ``method'' to 
Sec.  55.20(c)(1) to make the sentence consistent with language that 
immediately follows in Sec.  55.20(c)(1)(ii) stating that alternative 
flood protection method considerations are, in addition to alternative 
site considerations, required under this subpart. Third, the proposed 
rule updates the definition of Coastal High Hazard Area (V Zone) to 
match FEMA's more thorough definition at 44 CFR 59.1, which is used by 
the NFIP. The change will have no impact on the function of 24 CFR part 
55, because FEMA FIRMs will remain the principal source of V Zone data. 
Finally, the proposed rule makes a technical correction to a citation 
located in table 1 in Sec.  55.11(c).
4. Minimum Property Standards
    This rulemaking also proposes to apply a new elevation standard to 
one-to-four-family residential structures with mortgages insured by the 
FHA. Generally, in HUD's single-family mortgage insurance programs, 
Direct Endorsement mortgagees submit applications for mortgage 
insurance to HUD, and Lender Insurance mortgagees endorse loans for 
insurance, after the structure has been built. Thus, there is no HUD 
review or approval before the completion of construction. In these 
instances, HUD is not undertaking, financing or assisting construction 
or improvements. Thus, the FHA single family mortgage insurance program 
is not subject to Executive Order 11988, NEPA (42 U.S.C. 4321 et seq.), 
or related environmental laws or authorities. However, newly 
constructed single-family properties in HUD's mortgage insurance 
programs are generally required to meet HUD's minimum property 
standards under 24 CFR 200.926 through 200.926e. These property 
standards require that when HUD insures a mortgage on a property, the 
property meets basic livability and safety standards and is code 
compliant. The section relating to construction in flood hazard areas, 
Sec.  200.926d(c)(4), has

[[Page 74973]]

long been included as a property standard.
    In alignment with the proposals in this rulemaking that address 
FFRMS under Executive Order 11988, HUD is also proposing to amend its 
Minimum Property Standards on site design, and specifically the 
standards addressing drainage and flood hazard exposure at Sec.  
200.926d(c)(4). The purpose of the amendment of the property standard 
is to decrease potential damage from floods, increase the safety and 
soundness of the property for residents, and provide for more resilient 
communities in flood hazard areas. HUD would revise the section by 
requiring the lowest floor of newly constructed and substantially 
improved structures, within the 100-year floodplain, with and without 
basements to be at least 2 feet above the base flood elevation as 
determined by best available information. For one- to four-unit housing 
under HUD mortgage insurance and low-rent public housing programs, 
HUD's Minimum Property Standards in 24 CFR part 200 currently require 
that a one- to four-unit property involving new construction, located 
in the 1 percent-annual-chance floodplain in the effective Flood 
Insurance Rate Map (FIRM), be elevated to the effective FIRM base flood 
elevation. This proposed rule would add two feet of additional 
elevation to the base flood elevation as a resilience standard and 
would apply this standard to substantial improvement as well as new 
construction of such properties. This rule would not require 
consideration of the horizontally expanded FFRMS floodplain for single-
family mortgage insurance projects governed by the requirements in the 
Minimum Property Standards.
5. Categorical Exclusion
    HUD also proposes to amend Sec.  50.20(a)(2)(i) to revise the 
categorical exclusion from environmental review under NEPA for minor 
rehabilitation of one- to four-unit residential properties. 
Specifically, HUD would remove the qualification that the footprint of 
the structure may not be increased in a floodplain or wetland when HUD 
performs the review. HUD recently removed the footprint trigger from 
the categorical exclusion at Sec.  58.35(a)(3)(i) to allow 
rehabilitations reviewed by HUD responsible entities this ability to 
utilize this exclusion. This change will make the review standard the 
same regardless of whether HUD or a responsible entity is performing 
the review. Currently, when HUD performs a review under 24 CFR part 50, 
four units can be constructed in a floodplain or wetland as an 
individual action without an environmental assessment under the 
categorical exclusion in Sec.  50.20(a)(3), but rehabilitated 
structures in a floodplain or wetland with an increased footprint would 
require a full environmental assessment. It is logically inconsistent 
to require a greater review for minor rehabilitations than new 
construction and to apply a higher level of review for HUD as opposed 
to grantees.
6. Specific Questions for Comment
    In addition to seeking comments on implementing FFRMS, HUD 
specifically seeks public comments on the impact of the proposed 
elevation requirement on the accessibility of covered multifamily 
dwellings under the Fair Housing Act, the Americans with Disabilities 
Act (ADA), the Architectural Barriers Act (ABA), and section 504 of the 
Rehabilitation Act of 1973. Elevating buildings as a flood damage 
mitigation strategy may have a negative impact on affected communities' 
disabled and elderly populations, unless those buildings are made 
accessible. As a result, HUD invites comments on strategies it could 
employ to increase the accessibility of properties so affected in the 
event the proposed increase in elevation is adopted. Additionally, HUD 
invites comment on the cost and benefits of such strategies, including 
data that supports the costs and benefits.
    HUD is not including as part of this proposed rule, guidance to 
determine the horizontal extent of the FFRMS floodplain. In this 
regard, HUD believes that it is imperative to preserve the option to 
use new methodologies to determine horizontal extent as they become 
available. Nevertheless, HUD is seeking public comments on potential 
limits to the area and horizontal extent of the floodplain beyond the 
100-year floodplain when using the FFRMS. Specifically, HUD is 
considering whether to use HUD's current areawide compliance process 
described at 24 CFR 55.25 to allow HUD to enter into allow voluntary 
agreements with communities to limit horizontal extent beyond the 100-
year floodplain where: (1) Best-available and actionable climate data 
shows the area and horizontal extent of the two foot freeboard (or 
three foot for a Critical Action) FFRMS exceeds local, relative sea-
level rise rates or other climate-related projections and the 500-year 
floodplain including wave heights; and
    (2) There are limited or no safely or sustainably developable sites 
in a community outside of the two foot FVA (or three foot for a 
Critical Action).
    HUD also invites comment on other approaches to limit the 
horizontal extent of the floodplain beyond the 100-year floodplain. 
Information regarding the cost and benefits of adopting any proposed 
limit is also requested.
    Further information about best-available and actionable climate 
data and the Climate-Informed Science Approach of the FFRMS is 
available in Appendix H of the October 8, 2015 Guidelines for Executive 
Order 11988, Floodplain Management, and Executive Order 13690, 
Establishing a Federal Flood Risk Management Standard and a Process for 
Further Soliciting and Considering Stakeholder Input (Guidelines).
    Finally, HUD invites comments on alternative approaches to define 
the FFRMS floodplain for critical actions. For structures that meet the 
definition of critical actions as described in Sec.  55.2(b)(3)(i) 
(e.g., fire stations, police stations, and hospitals), this proposed 
rule would require that structures be elevated to the greater of the 
500-year floodplain or 3 feet above the base flood elevation. HUD 
requests alternative suggestions for defining the floodplain for the 
purposes of these projects for which even a slight chance of flooding 
is too great.

III. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. 
Executive Order 13563 (Improving Regulations and Regulatory Review) 
directs executive agencies to analyze regulations that are ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned.'' Executive Order 13563 also directs that, where relevant, 
feasible, and consistent with regulatory objectives, and to the extent 
permitted by law, agencies are to identify and consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public. This rule was determined to be a ``significant 
regulatory action'' as defined in section 3(f) of Executive Order 12866 
(although not an economically significant regulatory action, as 
provided under section 3(f)(1) of the Executive Order).
    As discussed in this preamble, the proposed regulatory amendments

[[Page 74974]]

would, based on Executive Order 13690 and the Guidelines, require, as 
part of the decisionmaking process established to ensure compliance 
with Executive Order 11988 (Floodplain Management), that new 
construction or substantial improvement in a floodplain be elevated or 
floodproofed 2 feet above the base flood elevation for non-critical 
actions and above the greater of the 500-year floodplain or 3 feet 
above the base flood elevation for critical actions based on FEMA's 
best available data. This proposed rule would also apply a similar new 
elevation standard to one-to-four family residential structures, 
located in the 1 percent-annual-chance floodplain, that involve new 
construction or substantial improvement with mortgages insured by the 
Federal Housing Administration. This rulemaking also proposes to revise 
a categorical exclusion available when HUD performs the environmental 
review by making it consistent with changes to a similar categorical 
exclusion that is available to HUD grantees or other responsible 
entities when they perform the environmental review. The rulemaking is 
part of HUD's commitment under the President's Climate Action plan. 
Building to these standards would increase resiliency, reduce the risk 
of flood loss, minimize the impact of floods on human safety, health 
and welfare, and promote sound, sustainable, long-term planning 
informed by a more accurate evaluation of risk that takes into account 
possible sea level rise and increased development associated with 
population growth.

Regulatory Impact Analysis

    Increasing the required minimum elevation of HUD-assisted 
structures located in and around the floodplain will prevent damage 
caused by flooding and avoid relocation costs to tenants associated 
with temporary moves when HUD-assisted structures sustain flood damage 
and are temporarily uninhabitable. These benefits, which are realized 
throughout the life of HUD-assisted structures, are offset by the one-
time increase in construction costs, borne only at the time of 
construction. Introducing a standard that requires additional freeboard 
above the base flood elevation takes into consideration FEMA's history 
of recommending freeboard as a tool for mitigation which extends 
several decades and provides, in HUD's view, the best assessment of 
risk to protect federal investments in flood zones.
    In addition, the likelihood that floods in coastal areas will 
become more frequent and damaging due to rising sea levels in future 
decades necessitates a stricter standard than the one currently in 
place. As stated in ``Global Sea Level Rise Scenarios for the United 
States National Climate Assessment'' U.S. Department of Commerce, 
National Oceanic and Atmospheric Administration, December 2012,\14\ 
federal experts have a very high confidence (greater than a 9 in 10 
chance) that global mean sea level will rise at least 0.2 meters (8 
inches) and no more than 2.0 meters (6.6 feet) by the year 2100. The 
Intergovernmental Panel on Climate Change (2013) also confirms that the 
sea level will continue rising throughout the 21st century.\15\
---------------------------------------------------------------------------

    \14\ Available at http://cpo.noaa.gov/Home/AllNews/TabId/315/ArtMID/668/ArticleID/80/Global-Sea-Level-Rise-Scenarios-for-the-United-States-National-Climate-Assessment.aspx.
    \15\ IPCC, 2013: Summary for Policymakers. In: Climate Change 
2013: The Physical Science Basis. Contribution of Working Group I to 
the Fifth Assessment Report of the Intergovernmental Panel on 
Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, 
S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley 
(eds.)]. Cambridge University Press, Cambridge, United Kingdom and 
New York, NY, USA.
---------------------------------------------------------------------------

    As discussed in the regulatory impact analysis that accompanies 
this rule, HUD estimates that requiring developers to construct or 
floodproof HUD-funded or insured properties to two feet above base 
flood elevation will increase construction costs by $12.803 million to 
$47.525 million. These are one-time costs which occur at the time of 
construction. Benefits of the increased standard include avoided damage 
to buildings, as measured by decreased insurance premiums, and avoided 
costs associated with tenants being displaced. These benefits occur 
annually over the life of the structures. Over a 30-year period, the 
present value of aggregate benefits total $12.336 million to $50.657 
million assuming a 3 percent discount rate and $8.192 million to 
$33.317 million assuming a 7 percent discount rate.
    These estimates are based on the annual production of HUD-assisted 
and insured structures in the floodplain and accounts for the 20 states 
(in addition to the District of Columbia and Puerto Rico) \16\ with 
existing freeboard requirements. Four of these states require 
residential structures to be constructed with the lowest floor at least 
two feet above the base flood elevation (Indiana, Montana, New York and 
Wisconsin) and 18 states and territories require residential structures 
to be built with the lowest floor at least one foot above the base 
flood elevation. The cost of compliance would be lower in these states 
than it would be in states that have no minimum elevation requirements 
above the base flood elevation. Further increase in the sea level rise 
or inland and riverine flooding would increase the benefits of this 
proposed rule. For a complete description of HUD's analysis, please see 
the accompanying Regulatory Impact Analysis for this rule on 
regulations.gov.
---------------------------------------------------------------------------

    \16\ Arizona, Colorado, Georgia, Illinois, Iowa, Kansas, 
Maryland, Maine, Michigan, Minnesota, North Dakota, Nebraska, New 
Jersey, Oregon, Puerto Rico and Rhode Island require base flood 
elevation +1 foot. The District of Columbia and Pennsylvania require 
base flood elevation + 1.5 feet. Indiana, Montana, New York and 
Wisconsin require base flood elevation + 2 feet. See http://www.floods.org/ace-files/documentlibrary/FloodRiskMngmtStandard/States_with_freeboard_and_CRS_Communities_with_Freeboard_in_Other_states_2-27-15.pdf).
---------------------------------------------------------------------------

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule would not have 
a significant economic impact on a substantial number of small 
entities. HUD's statistics on developers of FHA-insured properties do 
not precisely correlate with SBA's size standard of a small business 
for the category of ``Real Estate Credit,'' which size standard is less 
than $36.5 million in assets. HUD does have data on net worth and 
liquidity, however, and for the purposes of this discussion treats 
these as essentially similar to ``assets'' as meant in the SBA size 
standards.
    With respect to all entities, including small entities, it is 
unlikely that the economic impact would be significant. As the 
Regulatory Impact Analysis (RIA) explains, the benefits of reduced 
damage offset the construction costs before taking further sea level 
rise into consideration. Further, small entities may benefit more since 
they are less likely to endure financial hardships caused by severe 
flooding.
    Based on an engineering study conducted for FEMA,\17\ the 
construction cost of increasing the base of a new residential structure 
two additional feet of vertical elevation varies from 0.3 percent to 
4.8 percent of the base building cost. This results in an increase of 
up to $5,074 per single family home and $70,769 per multi-family 
property located in states with no existing freeboard requirements. 
Consequently, this would not pose a significant burden

[[Page 74975]]

to small entities in the single family housing development industry.
---------------------------------------------------------------------------

    \17\ See Federal Emergency Management Agency. 2013. ``2008 
Supplement to the 2006 Evaluation of the National Flood Insurance 
Program's Building Standards''.
---------------------------------------------------------------------------

    These costs are likely higher than would actually be caused by the 
increased standard because most HUD-assisted or insured substantial 
improvement projects already involve elevation to comply with the 
current standard, elevation to the base flood elevation (base flood 
elevation+0). Thus, elevating a structure an additional two feet would 
be marginal compared to the initial cost of elevation to the floodplain 
level.
    For this reason, the undersigned certifies that there is no 
significant economic impact on small entities. Notwithstanding HUD's 
determination that this rule will not have a significant economic 
impact on a substantial number of small entities, HUD specifically 
invites comments regarding any less burdensome alternatives to this 
rule that would meet HUD's program responsibilities.
Environmental Impact
    A Finding of No Significant Impact (FONSI) with respect to 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of NEPA (42 U.S.C. 
4332(2)(C)). The Finding of No Significant Impact is available for 
public inspection on regulations.gov and between the hours of 8 a.m. 
and 5 p.m. weekdays in the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410. Due to security measures at the 
HUD Headquarters building, please schedule an appointment to review the 
FONSI by calling the Regulations Division at 202-708-3055 (this is not 
a toll-free number). Individuals with speech or hearing impairments may 
access this number via TTY by calling the toll-free Federal Relay 
Service at 800-877-8339.
Federalism Impact
    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or preempts state law, 
unless the agency meets the consultation and funding requirements of 
section 6 of the Executive order. This rulemaking does not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments nor preempts state law 
within the meaning of the Executive order.
Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and on the private sector. This proposed rule would 
not impose any federal mandates on any state, local, or tribal 
governments, or on the private sector, within the meaning of UMRA.
Paperwork Reduction Act
    The information collection requirements contained in this rule were 
reviewed by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520) and assigned OMB Control Number 2506-0151. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information, unless the collection displays a valid 
control number.

List of Subjects

24 CFR Part 50

    Environmental impact statements.

24 CFR Part 55

    Environmental impact statements, Floodplains, Wetlands.

24 CFR Part 58

    Community development block grants, Environmental impact 
statements, Grant programs--housing and community development, 
Reporting and recordkeeping requirements.

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Housing standards, Lead poisoning, Loan 
programs--housing and community development, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

    Accordingly, for the reasons stated in the preamble above, HUD 
proposes to amend 24 CFR parts 50, 55, 58, and 200 as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

0
1. The authority citation for part 50 continues to read as follows:

    Authority:  42 U.S.C. 3535(d) and 4332; and Executive Order 
11991, 3 CFR, 1977 Comp., p.123.


Sec.  50.4  [Amended]

0
2. Amend Sec.  50.4(b)(2) by removing ``(3 CFR, 1977 Comp., p. 117)'' 
and adding in its place ``as amended by Executive Order 13690, February 
4, 2015 (80 FR 6423), (3 CFR, 2015 Comp., p. 6423).''
0
3. Revise Sec.  50.20(a)(2)(i) to read as follows:


Sec.  50.20  Categorical exclusions subject to the Federal laws and 
authorities cited in Sec.  50.4.

    (a) * * *
    (2) * * *
    (i) In the case of a building for residential use (with one to four 
units), the density is not increased beyond four units, and the land 
use is not changed;
* * * * *

PART 55--FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS

0
4. The authority citation for part 55 is revised to read as follows:

    Authority:  42 U.S.C. 3535(d), 4001-4128 and 5154a; E.O. 13690, 
80 FR 6425, E.O. 11988, 42 FR 26951, 3 CFR, 1977 Comp., p. 117; E.O. 
11990, 42 FR 26961, 3 CFR, 1977 Comp., p 121.


Sec.  55.1  [Amended]

0
5. Amend Sec.  55.1 as follows:
0
a. In paragraph (a)(1), add ``, as amended,'' after ``Floodplain 
Management''; and
0
b. In paragraph (a)(3), add ``, as amended,'' after ``Floodplain 
Management''.
0
6. Amend Sec.  55.2 as follows:
0
a. Remove ``Floodplain Management Guidelines for Implementing Executive 
Order 11988 (43 FR 6030, February 10, 1978)'' from paragraph (a) and 
add in its place ``Guidelines for Implementing Executive Order 11988, 
Floodplain Management, and Executive Order 13690, Establishing a 
Federal Flood Risk Management Standard and a Process for Further 
Soliciting and Considering Stakeholder Input (80 FR 64008, October 22, 
2015)'';
0
b. Revise paragraphs (b)(1), (4) and (9); and
0
c. Add paragraphs (b)(12) and (13);
    The revisions and additions read as follows:


Sec.  55.2  Terminology.

* * * * *
    (b) * * *
    (1) Coastal high hazard area means an area of special flood hazard 
extending from offshore to the inland limit of a primary frontal dune 
along an open coast and any other area subject to high velocity wave 
action from storms or seismic sources. On a Flood Insurance Rate Map 
(FIRM), this appears as zone

[[Page 74976]]

V1-30, VE or V. FIRMs and Flood Insurance Studies (FISs) are relied 
upon for the designation of ``coastal high hazard areas'' as well as 
``100-year floodplains'' (Sec.  55.2(b)(9)), ``500-year floodplains'' 
(Sec.  55.2(b)(4)), and ``floodways'' (Sec.  55.2(b)(5)).
    (i) When FEMA provides interim flood hazard data, such as Advisory 
Base Flood Elevations (ABFE) or preliminary maps and studies, HUD or 
the responsible entity shall use the latest of these sources.
    (ii) If FEMA information is unavailable or insufficiently detailed, 
other Federal, state, or local data may be used as ``best available 
information'' in accordance with Executive Order 11988. A base flood 
elevation from an interim or preliminary or non-FEMA source may not be 
used if it is lower than the current FIRM and FIS.
    (iii) In addition to FIRMs or ABFEs, the use of data from sources 
such as the U.S. Global Change Research Program, National Oceanic and 
Atmospheric Administration, United States Army Corps of Engineers, U.S. 
Geological Survey, and other FEMA sources may be considered. When 
performing an Environmental Impact Statement (EIS), an analysis of the 
best available, actionable climate science, as determined by HUD or the 
responsible entity, must be performed using data from these sources. 
These sources may supplement the FIRM or ABFE in order to better 
minimize impacts to projects or to elevate or floodproof structures 
above the risk adjusted floodplain. These sources may not be used as a 
basis for a lower elevation than otherwise required under this part.
* * * * *
    (4) 500-year floodplain means the area, including the base flood 
elevation, subject to inundation from a flood having a 0.2 percent 
chance or greater of being equaled or exceeded in any given year. (See 
Sec.  55.2(b)(1) for appropriate data sources.)
* * * * *
    (9) 100-year floodplain means the area subject to inundation from a 
flood having a one percent or greater chance of being equaled or 
exceeded in any given year. (See Sec.  55.2(b)(1) for appropriate data 
sources.)
* * * * *
    (12) FFRMS floodplain means area in which an action is proposed 
that:
    (i) If a non-critical action, is located on a site less than two 
feet above the 100-year floodplain; or
    (ii) If a critical action, is on a site that is either within the 
500-year floodplain or less than three feet above the 100-year 
floodplain. The larger floodplain and higher elevation must be applied 
where the 500-year floodplain is mapped.
    (13) Structure means a walled or roofed building, including a 
manufactured home and a gas or liquid storage tank that is principally 
above ground.
0
7. In Sec.  55.11, revise table 1 to read as follows:


Sec.  55.11  Applicability of Subpart C decisionmaking process.

* * * * *

                                               Table 1 to Part 55
----------------------------------------------------------------------------------------------------------------
                                                                Type of proposed action
                                      --------------------------------------------------------------------------
     Type of proposed action (new                                                           Wetlands or FFRMS
  reviewable action or an amendment)                              Coastal high hazard       floodplain outside
                 \1\                          Floodways                  areas             coastal high hazard
                                                                                            area and floodways
----------------------------------------------------------------------------------------------------------------
Critical Actions as defined in Sec.    Critical actions not     Critical actions not     Allowed if the proposed
 55.2(b)(3).                            allowed.                 allowed.                 critical action is
                                                                                          processed under Sec.
                                                                                          55.20.\2\
Noncritical actions not excluded       Allowed only if the      Allowed only if the      Allowed if proposed
 under Sec.   55.12(b) or (c).          proposed non-critical    proposed noncritical     noncritical action is
                                        action is a              action is processed      processed under Sec.
                                        functionally dependent   under Sec.   55.20 \2\   55.20.\2\
                                        use and processed        and is (1) a
                                        under Sec.   55.20 \2\.  functionally dependent
                                                                 use, (2) existing
                                                                 construction
                                                                 (including
                                                                 improvements), or (3)
                                                                 reconstruction
                                                                 following destruction
                                                                 caused by a disaster.
                                                                 If the action is not a
                                                                 functionally dependent
                                                                 use, the action must
                                                                 be designed for
                                                                 location in a Coastal
                                                                 High Hazard Area under
                                                                 Sec.   55.1(c)(3).
----------------------------------------------------------------------------------------------------------------
\1\ Under E. O. 11990, the decision making process in Sec.   55.20 only applies to Federal assistance for new
  construction in wetlands locations.
\2\ Or those paragraphs of Sec.   55.20 that are applicable to an action listed in Sec.   55.12(a).

0
8. Revise Sec.  55.12(c)(8) to read as follows:


Sec.  55.12  Inapplicability of 24 CFR part 55 to certain categories of 
proposed actions.

* * * * *
    (c) * * *
    (8) HUD's or the responsible entity's approval of financial 
assistance for a project on any nonwetland site in the FFRMS floodplain 
for which FEMA has issued:
    (i) A final Letter of Map Amendment (LOMA), final Letter of Map 
Revision (LOMR), or final Letter of Map Revision Based on Fill (LOMR-F) 
that presents information that can be used to demonstrate that the 
property (including ingress and egress on the property) is not located 
in the FFRMS floodplain; or
    (ii) A conditional LOMA, conditional LOMR, or conditional LOMR-F 
that presents information that can be used to demonstrate that the 
property (including ingress and egress on the property) will not be 
located in the FFRMS floodplain if HUD or the responsible entity's 
approval is subject to the requirements and conditions of the 
conditional LOMA or conditional LOMR;
* * * * *
0
9. In Sec.  55.20, revise paragraphs (a), (b) introductory text, 
(b)(1), (b)(3), (c) introductory text, (c)(1) introductory text, 
(c)(1)(i), (d) introductory text, (d)(1) introductory text, (e), (f), 
(g)(1) introductory text, and (g)(1)(i) to read as follows:


Sec.  55.20  Decision making process.

* * * * *

[[Page 74977]]

    (a) Step 1. (1) Determine whether the proposed action occurs in the 
FFRMS floodplain or results in new construction in a wetland. If the 
proposed action does not occur in the FFRMS floodplain or result in new 
construction in a wetland, then no further compliance with this part is 
required.
    (2) The following process shall be followed by HUD (or the 
responsible entity) in making wetland determinations:
    (i) Refer to Sec.  55.28(a) where an applicant has submitted with 
its application to HUD (or to the recipient under programs subject to 
24 CFR part 58) an individual Section 404 permit (including approval 
conditions and related environmental review).
    (ii) Refer to Sec.  55.2(b)(11) for making wetland determinations 
under this part.
    (iii) For proposed actions occurring in both a wetland and the 
FFRMS floodplain, completion of the decision making process under this 
section is required regardless of the issuance of a Section 404 permit. 
In such a case, the wetland will be considered among the primary 
natural and beneficial functions and values of the FFRMS floodplain.
    (b) Step 2. Notify the public and agencies responsible for 
floodplain management or wetlands protection at the earliest possible 
time of a proposal to consider an action in the FFRMS floodplain or 
wetland and involve the affected and interested public in the decision 
making process.
    (1) The public notices required by paragraphs (b) and (g) of this 
section may be combined with other project notices wherever 
appropriate. Notices required under this part must be bilingual if the 
affected public is largely non-English speaking. In addition, all 
notices must be published in an appropriate local news medium or 
appropriate government Web site, and must be sent to Federal, state, 
and local public agencies, organizations, and, where not otherwise 
covered, individuals known to be interested in the proposed action.
* * * * *
    (3) A notice under this paragraph shall state: The name, proposed 
location and description of the activity; the total number of acres of 
FFRMS floodplain or wetland involved; the related natural and 
beneficial functions and values of the FFRMS floodplain or wetland that 
may be adversely affected by the proposed activity; the HUD approving 
official (or the certifying officer of the responsible entity 
authorized by 24 CFR part 58); and the phone number to call for 
information. The notice shall indicate the hours of HUD or the 
responsible entity's office, and any Web site at which a full 
description of the proposed action may be reviewed.
    (c) Step 3. Identify and evaluate alternatives to locating the 
proposed action in the FFRMS floodplain or wetland. Where possible, use 
natural systems, ecosystem processes, and nature-based approaches when 
developing alternatives for consideration.
    (1) Except as provided in paragraph (c)(3) of this section, HUD's 
or the responsible entity's consideration of practicable alternatives 
to the proposed site or method should include the following:
    (i) Locations outside the FFRMS floodplain or wetland;
* * * * *
    (d) Step 4. Identify the potential direct and indirect impacts 
associated with the occupancy or modification of the FFRMS floodplain 
or the wetland and the potential direct and indirect support of FFRMS 
floodplain and wetland development that could result from the proposed 
action.
    (1) FFRMS floodplain evaluation. The focus of the FFRMS floodplain 
evaluation should be on adverse impacts to lives and property and on 
natural and beneficial FFRMS floodplain values. Natural and beneficial 
values include:
* * * * *
    (e) Step 5. Design or modify the proposed action to minimize the 
potential adverse impacts to and from the FFRMS floodplain or the 
wetland and to restore and preserve its natural and beneficial 
functions and values. All calculations in this section of the base 
flood elevation and 500-year flood elevation must be made using the 
best available information as required by Sec.  55.2(b)(1). For actions 
in the FFRMS floodplain, the required elevation described in this 
section must be documented on an Elevation Certificate or a 
Floodproofing Certificate in the Environmental Review Record prior to 
construction, or by such other means as HUD may from time to time 
direct, provided that notwithstanding any language to the contrary, the 
minimum elevation or floodproofing requirement shall be the FFRMS 
floodplain as defined in this section.
    (1) If a structure designed principally for residential use 
undergoing new construction or substantial improvement is located in a 
floodplain, the lowest floor or FEMA-approved equivalent must be 
designed using the FFRMS floodplain as the baseline standard for 
elevation, except where higher elevations are required by state, 
tribal, or locally adopted code or standards, in which case those 
higher elevations apply. Where non-elevation standards such as setbacks 
or other flood risk reduction standards that have been issued to 
identify, communicate, or reduce the risks and costs of floods are 
required by state, tribal, or locally adopted code or standards, those 
standards shall apply in addition to the FFRMS baseline elevation 
standard.
    (2) New construction and substantial improvement of non-residential 
structures, or residential structures that have no dwelling units and 
no residents below the FFRMS floodplain and that are not critical 
actions as defined at Sec.  55.2(b)(3), shall be designed either:
    (i) With the lowest floor, including basement, elevated to or above 
the FFRMS floodplain; or
    (ii) With the structure floodproofed at least up to and below the 
FFRMS floodplain. Floodproofing standards are as stated in FEMA's 
regulations at 44 CFR 60.3(c)(3)(ii), or such other regulatory standard 
as FEMA may issue, and applicable guidance, except that where the 
standard refers to base flood level, elevation is required above the 
FFRMS floodplain, as defined in this part.
    (3) The term ``lowest floor'' means the lowest floor of the lowest 
enclosed area (including basement), except that an unfinished or flood 
resistant enclosure, usable solely for parking of vehicles, building 
access or storage in an area other than a basement area is not 
considered a building's lowest floor; provided, that such enclosure is 
not built so as to render the structure in violation of the applicable 
non-elevation design requirements of 44 CFR 60.3. ``Lowest floor'' must 
be applied consistent with FEMA's Elevation Certificate guidance or 
other applicable current FEMA guidance.
    (4) Minimization techniques for floodplain and wetlands purposes 
include, but are not limited to: The use of permeable surfaces; natural 
landscape enhancements that maintain or restore natural hydrology 
through infiltration, native plant species, bioswales, rain gardens, or 
evapotranspiration; stormwater capture and reuse; green or vegetative 
roofs with drainage provisions; Natural Resource Conservation Service 
or other conservation easements; WaterSense products; rain barrels and 
grey water diversion systems; and other low impact development and 
green infrastructure strategies, technologies, and techniques. For 
floodplain purposes, minimization also includes floodproofing and 
elevating structures above the required

[[Page 74978]]

FFRMS floodplain. Where possible, use natural systems, ecosystem 
processes, and nature-based approaches when developing alternatives for 
consideration.
    (5) Appropriate and practicable compensatory mitigation is 
recommended for unavoidable adverse impacts to more than one acre of 
wetlands. Compensatory mitigation includes, but is not limited to: 
Permitee-responsible mitigation, mitigation banking, in-lieu fee 
mitigation, the use of preservation easements or protective covenants, 
and any form of mitigation promoted by state or federal agencies. The 
use of compensatory mitigation may not substitute for the requirement 
to avoid and minimize impacts to the maximum extent practicable.
    (6) All critical actions in the FFRMS floodplain must be modified 
to include:
    (i) Preparation of and participation in an early warning system;
    (ii) An emergency evacuation and relocation plan;
    (iii) Identification of evacuation route(s) out of the FFRMS and 
500-year floodplain; and
    (iv) Identification marks of past or estimated flood levels on all 
structures.
    (f) Step 6. Reevaluate (or evaluate for actions under Sec.  
55.12(a)) the proposed action to determine:
    (1) Whether the action is still practicable in light of exposure to 
flood hazards in the FFRMS floodplain or wetland, possible adverse 
impacts on the FFRMS floodplain or wetland, the extent to which it will 
aggravate the current and future hazards to other floodplains or 
wetlands, and the potential to disrupt the natural and beneficial 
functions and values of floodplains or wetlands; and
    (2) Whether alternatives preliminarily rejected at Step 3 
(paragraph (c) of this section) are practicable in light of information 
gained in Steps 4 and 5 (paragraphs (d) and (e) of this section).
    (i) The reevaluation of alternatives, or initial evaluation of a no 
action or non-floodplain alternative for actions under Sec.  55.12(a), 
shall include the potential impacts avoided or caused inside and 
outside the FFRMS floodplain or wetlands area. The impacts should 
include the protection of human life, real property, and the natural 
and beneficial functions and values served by the floodplain or 
wetland.
    (ii) A reevaluation of alternatives, or initial evaluation of a no 
action or non-floodplain alternative for actions under Sec.  55.12(a), 
under this step should include a discussion of economic costs. For 
floodplain areas, the cost estimates should include savings or the 
costs of flood insurance (where applicable); floodproofing; replacement 
of services or functions of critical actions that might be lost; and 
elevation to at least the elevation of the FFRMS floodplain, as 
appropriate on the applicable source under Sec.  55.2(b)(1). For 
wetlands, the cost estimates should include the cost of new 
construction activities, including fill, impacting the wetlands, and 
mitigation.
    (g) * * * (1) If the reevaluation results in a determination that 
there is no practicable alternative to locating the proposal in the 
FFRMS floodplain or wetland, publish a final notice that includes:
    (i) The reasons why the proposal must be located in the FFRMS 
floodplain or wetland;
* * * * *
0
10. Amend Sec.  55.26 as follows:
0
a. Revise the section heading;
0
b. In paragraph (b)(2), remove the word ``and'';
0
b. In paragraph (c), remove the period at the end of the paragraph and 
add in its place a semicolon and the word ``and'';
0
c. Add paragraph (d).
    The addition reads as follows:


Sec.  55.26  Adoption of another agency's review under Executive 
orders.

* * * * *
    (d) All actions must at least be elevated or floodproofed two feet 
above the 100-year floodplain (or to the higher of the 500-year flood 
elevation or 3 feet above the 100-year floodplain for Critical Actions) 
unless an agreement is in place to allow for the other Federal agency's 
FFRMS elevation standard pursuant to 42 U.S.C. 5189g.
0
11. Revise Sec.  55.27(a)(2) to read as follows:


Sec.  55.27  Documentation.

    (a) * * *
    (2) Under Sec.  55.20(e), measures to minimize the potential 
adverse impacts of the proposed action on the affected floodplain or 
wetland as identified in Sec.  55.20(d) have been applied to the design 
for the proposed action. Prior to construction of a project in a 
floodplain, the documentation must include an elevation certificate or 
floodproofing certificate (or such other similar certification as HUD 
may from time to time direct) indicating the FFRMS floodplain elevation 
was used if required under Sec.  55.20(e).
* * * * *

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ASSUMING HUD 
ENVIRONMENTAL REVIEW RESPONSIBILITIES

0
12. The authority citation for part 58 continues to read as follows:

    Authority:  12 U.S.C. 1707 note, 1715z- 13a(k); 25 U.S.C. 4115 
and 4226; 42 U.S.C. 1437x, 3535(d), 3547, 4321-4335, 4852, 5304(g), 
12838, and 12905(h); title II of Pub. L. 105-276; E.O. 11514 as 
amended by E.O. 11991, 3 CFR, 1977 Comp., p. 123.

0
13. Revise Sec.  58.5(b)(1) to read as follows:


Sec.  58.5  Related Federal laws and authorities.

* * * * *
    (b) * * *
    (1) Executive Order 11988, Floodplain Management, as amended by 
Executive Order 13690, February 4, 2015 (80 FR 6425), 3 CFR, 2015 
Comp., p. 6425, as interpreted in HUD regulations at 24 CFR part 55.
* * * * *
0
14. Revise Sec.  58.43(a) to read as follows:


Sec.  58.43  Dissemination and/or publication of the findings of no 
significant impact.

    (a) If the responsible entity makes a finding of no significant 
impact, it must prepare a FONSI notice, using the current HUD-
recommended format or an equivalent format. As a minimum, the 
responsible entity must send the FONSI notice to individuals and groups 
known to be interested in the activities, to the local news media, to 
the appropriate tribal, local, State and Federal agencies; to the 
Regional Offices of the Environmental Protection Agency having 
jurisdiction and to the HUD Field Office (or the State where 
applicable). The responsible entity may also publish the FONSI notice 
in a newspaper of general circulation in the affected community or on 
an appropriate government Web site. If the notice is not published, it 
must also be prominently displayed in public buildings, such as the 
local Post Office and within the project area or in accordance with 
procedures established as part of the citizen participation process.
* * * * *

PART 200--INTRODUCTION TO FHA PROGRAMS

0
15. The authority citation for part 200 continues to read as follows:

    Authority:  12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).

0
16. In Sec.  200.926, add paragraph (a)(3) to read as follows:

[[Page 74979]]

Sec.  200.926  Minimum property standards for one and two family 
dwellings.

    (a) * * *
    (3) Applicability of standards to substantial improvement. The 
standards in Sec.  200.926d(c)(4)(i) through (iii) are also applicable 
to structures that are approved for insurance or other benefits prior 
to the start of substantial improvement, as defined in Sec.  
55.2(b)(10) of this title.
* * * * *
0
17. In Sec.  200.926d, revise paragraphs (c)(4)(i) through (iii), 
remove paragraph (c)(4)(iv), and redesignate paragraphs (c)(4)(v) and 
(c)(4)(vi) as paragraphs (c)(4)(iv) and (c)(4)(v), respectively.
    The revisions read as follows:


Sec.  200.926d  Construction requirements.

* * * * *
    (c) * * *
    (4) * * *
    (i) Residential structures located in Special Flood Hazard Areas. 
The elevation of the lowest floor shall be at least two feet above the 
base flood elevation (see 24 CFR 55.2 for appropriate data sources).
    (ii) Residential structures located in FEMA-designated ``coastal 
high hazard areas''. (A) Basements or any permanent enclosure of space 
below the lowest floor of a structure are prohibited.
    (B) Where FEMA has determined the base flood level without 
establishing stillwater elevations, the bottom of the lowest structural 
member of the lowest floor (excluding pilings and columns) and its 
horizontal supports shall be at least two feet above the base flood 
elevation.
    (iii) New construction or substantial improvement. (A) In all cases 
in which a Direct Endorsement (DE) mortgagee or a Lender Insurance (LI) 
mortgagee seeks to insure a mortgage on a one- to four-family dwelling 
that is newly constructed or which undergoes a substantial improvement, 
as defined in Sec.  55.12(b)(10) of this title (including a 
manufactured home that is newly erected or undergoes a substantial 
improvement) that was processed by the DE or LI mortgagee, the DE or LI 
mortgagee must determine whether the property improvements (dwelling 
and related structures/equipment essential to the value of the property 
and subject to flood damage) are located on a site that is within a 
Special Flood Hazard Area, as designated on maps of the Federal 
Emergency Management Agency. If so, the DE mortgagee, before submitting 
the application for insurance to HUD, or the LI mortgagee, before 
submitting all the required data regarding the mortgage to HUD, must 
obtain:
    (1) A final Letter of Map Amendment (LOMA);
    (2) A final Letter of Map Revision (LOMR); or
    (3) A signed Elevation Certificate documenting that the lowest 
floor (including basement) of the property improvements is at least two 
feet above the base flood elevation as determined by FEMA's best 
available information.
    (B) Under the DE program, these mortgages are not eligible for 
insurance unless the DE mortgagee submits the LOMA, LOMR, or Elevation 
Certificate to HUD with the mortgagee's request for endorsement.
* * * * *

    Dated: September 27, 2016.
Harriet Tregoning,
Principal Deputy Assistant Secretary for Community Planning and 
Development.
[FR Doc. 2016-25521 Filed 10-27-16; 8:45 am]
 BILLING CODE 4210-67-P