[Federal Register Volume 89, Number 133 (Thursday, July 11, 2024)]
[Notices]
[Pages 56889-56893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15271]
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
[Docket ID: FEMA-2024-0022]
Request for Information on the National Flood Insurance Program's
Community Rating System Redesign Effort
AGENCY: Federal Emergency Management Agency, Department of Homeland
Security (DHS).
ACTION: Request for information and notice of meetings.
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SUMMARY: The Federal Emergency Management Agency (FEMA) is issuing this
Request for Information (RFI) to receive the public's input on
potential future changes to the Community Rating System (CRS) under the
National Flood Insurance Program (NFIP). This RFI seeks further input
on suggested alternative program features and approaches for a
redesigned CRS program, based upon public input from the August 23,
2021 ``Request for Information on the National Flood Insurance
Program's Community Rating System'' published in the Federal Register.
FEMA will host virtual public meetings at the times and dates listed
below.
DATES: Comments must be received on or before September 9, 2024.
Submissions received after that date may not be considered.
For Public Meetings: FEMA will hold virtual public meetings on
Wednesday, August 21, 2024 from 2:00 p.m. to 3:30 p.m. EDT and
Thursday, August 22, 2024 from 3:00 p.m. to 4:30 p.m. EDT for a general
audience and on Tuesday, August 27, 2024 from 3:00-4:30 p.m. EDT
focused on issues specific to Indian Tribal governments. Depending on
the number of speakers, the meeting may end before the time indicated,
following the last call for comments. Requests to participate must be
received via the virtual meeting website no later than Monday, August
19, 2024. Registration must be completed using the links below specific
to each meeting:
Register for the August 21, 2024 meeting using https://cgstrategy.zoom.us/webinar/register/WN_4lNLtBUUQaqI2dxRPJtwHg.
Register for the August 22, 2024 meeting using https://cgstrategy.zoom.us/webinar/register/WN_qKV8jzlgQe6rt2LnpDqWOA.
Register for the August 27, 2024 Tribal focused meeting
using https://cgstrategy.zoom.us/webinar/register/WN_t7ex0KIyRJGX8J0qYHHqDg.
Reasonable accommodations are available for people with
disabilities. To request a reasonable accommodation (e.g.,
Communication Access Real-Time Translation [CART], sign language
interpretation), contact the person listed in the FOR FURTHER
INFORMATION CONTACT section below by Monday, August 19, 2024. Last
minute requests will be accepted but may not be possible to fulfill.
ADDRESSES: Interested persons may submit comments responsive to this
RFI electronically through the Federal eRulemaking Portal at https://www.regulations.gov. Follow the instructions for submitting comments
and use docket ID: FEMA-2024-0022. Submitting this information makes it
public; you may wish to read the
[[Page 56890]]
Privacy and Security Notice on https://www.regulations.gov.
Commenters are encouraged to identify specific question or
questions they are responding to by number. All submissions received
must include the agency name and Docket ID, and will be posted, without
change, to the Federal eRulemaking Portal at https://www.regulations.gov and will include any personal information you
provide. Therefore, submitting this information makes it public. You
may wish to read the Privacy and Security Notice that is available via
a link on the homepage of https://www.regulations.gov. Responses should
not include any personally identifiable information or confidential
commercial information.
For Public Meetings: Public meetings for a general audience will be
held virtually on Wednesday, August 21, 2024 from 2:00 p.m. to 3:30
p.m. EDT and Thursday, August 22, 2024 from 3:00 p.m. to 4:30 p.m. EDT
and for issues specific to Indian Tribal governments on Tuesday, August
27, 2024 from 3:00 p.m. to 4:30 p.m. EDT. Links to register for the
meetings are provided above. If you would like to speak at a meeting,
please so indicate on the registration form. For the August 27, 2024
Tribal meeting, FEMA will be prioritizing comments from representatives
and members of Indian Tribal governments.
FOR FURTHER INFORMATION CONTACT: Shilpa Mulik, CRS Redesign Program
Manager, Hazard Mitigation Directorate, Resilience, FEMA. Phone: (202)
212-7313; Email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
A. The Community Rating System
Between 2000 and 2024, floods have cost approximately $107.7
billion dollars in damage throughout the United States.\1\ Standard
homeowners and commercial property insurance policies do not cover
flood losses.\2\ To meet the need for vital flood insurance coverage,
FEMA administers the National Flood Insurance Program (NFIP), which
offers flood insurance coverage for buildings and/or contents in
communities that comply with the NFIP's minimum standards for
floodplain management.\3\ To be covered by an NFIP flood insurance
policy, a property must be in a community that participates in the
NFIP.\4\ To qualify to participate in the NFIP, a community adopts and
enforces local floodplain management standards which regulate
development in the Special Flood Hazard Area (SFHA).\5\ Today, over
22,600 communities in the United States participate in the NFIP.\6\
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\1\ NOAA National Centers for Environmental Information, U.S.
Billion-Dollar Weather and Climate Disasters (2024). Found at
https://www.ncei.noaa.gov/access/billions/events/US/2000-2024?disasters[]=flooding (last accessed June 28, 2024).
\2\ Insurance Information Institute, Which Disasters Are Covered
By Homeowners Insurance? Found at https://www.iii.org/article/which-disasters-are-covered-by-homeowners-insurance (last accessed June
28, 2024).
\3\ 42 U.S.C. 4022(a)(1).
\4\ Id.
\5\ 44 CFR 59.2(b); 44 CFR 59.1 (Special Flood Hazard Area ``is
the land in the flood plain within a community subject to a 1
percent or greater chance of flooding in any given year. The area
may be designated as Zone A on the FHBM. After detailed ratemaking
has been completed in preparation for publication of the flood
insurance rate map, Zone A usually is refined into Zones A, AO, AH,
A1-30, AE, A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A, VO, or V1-
30, VE, or V'').
\6\ FEMA, Flood Insurance, found at: https://www.fema.gov/flood-insurance (last accessed June 28, 2024).
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In 1990, FEMA implemented the Community Rating System (CRS) as a
voluntary program for recognizing and encouraging community floodplain
management activities exceeding the NFIP's minimum standards for
floodplain management.\7\ Communities that undertake floodplain
management activities exceeding the NFIP's minimum standards for
floodplain management may apply to join the CRS program and the
community will earn CRS program credits (often referred to as ``points/
credits'') for those activities exceeding the minimum floodplain
management requirements of the NFIP which are approved by FEMA. In CRS
communities, credits lead to flood insurance premium discounts to
reflect the reduced flood risk resulting from the community's higher
floodplain management standards or programs. As of October 2023,
approximately 1,500 communities participate in the CRS program
nationwide.\8\ This represents about seven percent of NFIP
participating communities, which represent nearly 3.6 million (more
than 70 percent) of all NFIP policies that are written.\9\ CRS program
discounts on flood insurance premiums range from 5 percent up to 45
percent based on the level of CRS program credits awarded to
communities.\10\
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\7\ 42 U.S.C. 4022(b); Public Law 103-325, 108 Stat. 2255 (1994)
(Congress authorized the CRS program under the National Flood
Insurance Reform Act of 1994).
\8\ FEMA, Communities Participating in the Community Rating
System, found at fema_crs_eligible-communities_oct-2023.xlsx (last
accessed June 28, 2024).
\9\ FEMA, Community Rating System, found at http://www.fema.gov/fact-sheet/community-rating-system (last accessed June 28, 2024).
\10\ FEMA NFIP Community Rating System Coordinator's Manual at
110-3, found at https://www.fema.gov/floodplain-management/community-rating-system#manual (last accessed June 28, 2024).
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FEMA is exploring changes and improvements to the CRS program
through a programmatic review and improvement effort (called ``CRS
Redesign''). With the continuous learning around flood, flood risk
management, and flood risk reduction techniques, FEMA now has more
information about, and understanding of, multi-frequency analysis,
pluvial flooding, climate change, and the extent of flood risk outside
of the SFHA. This new understanding has led FEMA to take a holistic
look at the CRS program to determine how the program can best meet FEMA
and NFIP consumer needs through the CRS Redesign.
FEMA seeks input on ways the agency can improve the CRS program,
specifically: (1) to incentivize communities to take measurable actions
and make sustained progress to reduce current and future flood risk;
(2) to embed equity as a foundation of the CRS program; (3) to
incentivize communities to encourage property owners to purchase flood
insurance and thus reduce their financial exposure to flood risk; and
(4) to deliver a community participant-centered and modernized program.
FEMA continually evaluates its programs, regulations, and policies
to identify opportunities to modify, streamline, expand, or repeal, as
appropriate. FEMA does so through legally mandated review requirements
(e.g., Unified Agenda reviews and reviews under section 610 of the
Regulatory Flexibility Act \11\), through existing RFIs, and through
other informal and long-established mechanisms (e.g., use of Advisory
Councils, feedback from FEMA field personnel, input from internal
working groups, outreach to regulated entities and the public, and
Government Accountability Office program reports). This Federal
Register notice supplements these existing extensive FEMA regulatory
and program review efforts.
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\11\ 5 U.S.C. 601 et seq.
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B. Overview of 2021 CRS RFI and Public Comments on Suggested Changes to
the CRS Program
1. 2021 CRS RFI Summary
On August 23, 2021, FEMA published a request for information
entitled ``Request for Information on the
[[Page 56891]]
National Flood Insurance Program's Community Rating System'' in the
Federal Register \12\ (called ``2021 CRS RFI''). The 2021 CRS RFI
sought input from the public that would help the agency determine
public interest in potential improvements to the CRS program.
Specifically, the 2021 CRS RFI sought public input on broad CRS
programmatic issues, such as:
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\12\ 86 FR 47128 (Aug. 23, 2021).
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Strengths and challenges of the CRS program;
Methods to increase equity and participation of
disadvantaged communities;
Methods to reduce flood risk to communities through the
CRS program;
Methods to incentivize participation and increase
floodplain management standards;
Methods to streamline administrative burdens, CRS program
credits, and decrease program participation burdens of the CRS program;
Methods to decrease future losses to repetitive loss
structures; and
Methods to increase collaboration and participation
through cross jurisdictional entities and increase integration with
other floodplain management activities, such as building standards.
2. 2021 CRS RFI Comments
FEMA received comments from 211 commenters addressing 116 unique
topics in response to the 2021 CRS RFI. Commenters included private
citizens; State, local, and Tribal governments; non-profit
organizations; and professional associations. FEMA completed a thorough
review of the comments and considered whether to explore alternative
CRS program features and approaches suggested by stakeholders.
Stakeholder feedback proposed a wide range of alternative program
features and approaches for the CRS program. FEMA also hosted virtual
public meetings to solicit input about the CRS program during the 2021
CRS RFI comment period. A non-exhaustive overview of the comments from
the 2021 CRS RFI and associated public meetings is provided below:
Comments on CRS Strengths
Commenters indicated that the CRS program offers flexibility for
communities to select among many CRS activities, that the CRS program
has strengthened communities' floodplain management efforts, and that
CRS' incentives resulted in reduced flood risk.
Comments on CRS Challenges
Commenters stated that the complexity and administrative burden of
the CRS program make it difficult for communities to participate in
CRS, that the CRS program raises equity concerns, and commenters
questioned the degree to which the CRS incentivizes (or does not
sufficiently incentivize) increases in community flood risk reduction.
Commenters also expressed concern regarding CRS's alignment with the
NFIP's current pricing approach and the overall affordability of NFIP
flood insurance. Additionally, commenters questioned whether the CRS
program is needed given the NFIP's current pricing approach which
calculates actuarially based premiums, whether the CRS discount classes
should be modified, and whether NFIP policy premiums will need to
increase to support CRS's premium discounts.
Comments on CRS and Equity
Commenters suggested providing direct technical assistance and
grant funds to underserved communities to increase CRS participation
and to build local floodplain management capacity. Commenters also
expressed a desire for CRS to provide more effective outreach tools for
underserved communities and for a CRS scoring system that accounts for
multiple aspects of a community including, but not limited to, a
community's size, development density, economic status, and
administrative capacity.
Commenters also suggested that CRS program credits should be shared
with the community, if not fully provided to the community instead of
only being provided to the policyholders as communities are doing the
work to reduce flood risk. Commenters also suggested that the
communities should be allowed to decide how to use the available CRS
program credits, including the ability to get a cost share to support
local CRS staff or mitigation funds to reduce a community's flood risk.
Comments on CRS and Future Conditions
Commenters indicated a desire to better incorporate future
conditions through mapping and modeling of future risk, to incentivize
communities to adopt programs related to future conditions, to create a
flexible credit system for creative efforts and innovative approaches
that improve communities' resilience, and for FEMA to disseminate more
guidance and data to communities to better incorporate future
conditions and climate resiliency into a community's CRS program.
Comments on Floodplain Management and Flood Risk Management
Commenters stated that the CRS program should continue to support
and should expand incentives for community-level action and floodplain
management and to better align measurable risk reduction in communities
of both current and future risks with program incentives (e.g.,
creditable activities and discounts). Commenters also suggested that
FEMA should continue to incentivize effective floodplain management and
community involvement through more effective outreach, technical
assistance, capability-building, and funding to support floodplain
management efforts in the CRS program.
Commenters also suggested that CRS activities and credits should be
limited to those activities that lower flood risk and result in
development that is less susceptible to flooding. Commenters noted that
the cost of CRS to the NFIP is too high, that credits must be given
more carefully, and that enforcement of compliance with NFIP minimum
floodplain management requirements within CRS communities must be
improved. Commenters noted that many CRS activities and credits are
unrelated to flood risk reduction, such as providing credits to
incentivize community activities to protect endangered species.
Comments on CRS Simplification
Commenters requested simplification of the CRS program application
process and simplification of CRS credits and activities. Commenters
suggested that the document submittal procedures to initially join the
CRS program and the scoring system in the CRS Coordinator's Manual
should be simplified to increase transparency. Commenters also
suggested that the CRS activities should be simplified by reducing the
number of activities that receive credit to allow communities to focus
on activities that result in the largest flood risk reduction (e.g.,
higher elevation standards or limiting development in the SFHA).
Comments on CRS Collaboration, Integration, and Alignment
Comments suggested that FEMA should establish a grant program to
fund local CRS positions or establish a cost-share program across
multiple municipalities to support CRS implementation. Commenters also
suggested the FEMA should increase the sharing of success stories and
best practices among CRS participating
[[Page 56892]]
communities and allow multi-jurisdictional or regionalized activities/
elements where communities could work together to submit regional
documentation allowing multi-jurisdictional partnerships to make CRS
more accessible (e.g., communities could work together through a multi-
jurisdictional entity to regionally implement the CRS program).
Commenters also suggested that the CRS should be fully integrated
into the NFIP by reimagining the NFIP's current pricing approach and
enrolling all communities into the CRS program as part of NFIP
participation starting at a CRS class 0 if the community only meets the
NFIP minimum floodplain management standards. Under this suggestion,
communities could move up in CRS class rating to increase their CRS
discount with a maximum discount of up to a 50%. Commenters also
suggested that a community should also be penalized for actions that
increase flood risk in the community (e.g., such as allowing violations
of adopted floodplain management development standards) down to a CRS
negative class with corresponding premium surcharges on all NFIP
policies in that community.
C. Overview of GAO-23-105977 Report's Findings and Agency
Recommendations
On July 31, 2023, the Government Accountability Office (GAO) issued
report number GAO-23-105977, Flood Insurance: FEMA's New Rate-Setting
Methodology Improves Actuarial Soundness but Highlights Need for
Broader Program Reform.\13\ GAO-23-105977 included the following two
FEMA agency recommendations relating to improving the CRS program:
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\13\ GAO-23-105977, Flood Insurance: FEMA's New Rate-Setting
Methodology Improves Actuarial Soundness but Highlights Need for
Broader Program Reform, found at https://www.gao.gov/products/gao-23-105977 (last accessed June 28, 2024).
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The Assistant Administrator of FEMA's Federal Insurance
Directorate (FID) should adjust CRS by calculating a community's rating
based only on community activities that reduce flood risk and by
incorporating discounts into the full-risk premium based on the
actuarial evaluation of risk reduction. (Recommendation 1); and
The Assistant Administrator of FEMA's FID should evaluate
other means for incentivizing desirable community activities that
cannot be actuarially justified but are currently a basis for discounts
in CRS. (Recommendation 2).
The GAO-23-105977 report stated that the premium discounts provided
under the CRS program are not actuarially justified and are paid for,
in large part, through a cross-subsidization by NFIP policyholders that
are not receiving the CRS discount. The GAO-23-105977 report also
stated that it is likely that policyholders receiving CRS discounts are
paying lower premiums that do not fully reflect their flood risk. The
amounts of CRS discounts--both to individual properties and program
wide--are not closely linked to potential loss reduction of currently
insured properties. While the activities that FEMA promotes through CRS
are important, few of them directly mitigate flood risk to the
property. For example, the GAO-23-105977 report noted that the CRS
discounts related to public information, warning and response, and
mapping and regulations do not reduce the potential for flood loss to
currently insured properties. The GAO-23-105977 report also stated that
the NFIP's new pricing approach accounts for some individual premium
rating variables, such as a structure's elevation in relation to flood
sources, which are also included in CRS' community-wide activities and
credits. This may result in NFIP double counting risk reduction
techniques/measures during rating and discount determination and
policyholders in certain CRS communities receiving a CRS discount that
is not based on the actuarial reduction of flood risk to currently
insured properties.
II. Maximizing the Value of Public Feedback
The impacts of Federal regulations and policies tend to be widely
dispersed on society. Members of the public are likely to have useful
information, data, and perspectives on the benefits and burdens of
FEMA's existing programs, regulations, information collections, and
policies. FEMA seeks additional public feedback relevant to FEMA's
potential redesign and improvement efforts for the CRS program given
the 2021 CRS RFI comments and the findings and agency recommendations
summarized above from the GAO-23-105977 report.
The following is meant to assist members of the public in
formulating comments. This notice contains a list of questions, the
answers to which will assist FEMA in understanding which suggested
alternative program features and approaches CRS program stakeholders
support or oppose and why. FEMA encourages public comment on these
questions and seeks any other national-level data commenters believe
are relevant to FEMA's CRS redesign efforts. Commenters should
identify, with specificity, the program feature, policy, or process at
issue. Below are recommendations for commenters to use when making
comments in response to this RFI, so that FEMA can better evaluate the
suggested changes to the CRS program:
Commenters should explain, with as much detail as
possible, why an aspect of the CRS program should be modified,
streamlined, expanded, or repealed, and provide specific suggestions of
ways the agency can better achieve its objectives;
Commenters should provide specific national-level data
that document the costs, burdens, and benefits of potentially new
requirements to the extent they are available. Commenters might also
address how FEMA can best obtain and consider accurate, objective
information and data about the costs, burdens, and benefits of a
redesigned CRS program and whether there are existing sources of data
that FEMA can use to evaluate the effects of the CRS program over time;
and,
Commenters should identify with specificity administrative
burdens, CRS program requirements, information collection burdens,
waiting time, or unnecessary complexity that may impose unjustified
barriers in general, or that may have adverse effects on equity for
all, including those in underserved communities.
III. Specific Information Requested
FEMA seeks comments on all suggested program features of a
redesigned CRS program, and specifically, FEMA has additional follow-up
questions from the 2021 CRS RFI on suggested CRS program changes.
FEMA's goal is to obtain diverse feedback on the CRS program that helps
inform FEMA decision-making on the future of the CRS program.
List of Questions for Commenters
(1) Should FEMA provide each community with a report highlighting
potential CRS program credits (often referred to as ``points/credits'')
that the community could earn to mitigate risk and reduce insurance
premiums, explaining strategies on how to receive more points, and
flagging NFIP minimum floodplain management standards compliance
issues? Why or why not?
(2) Should FEMA auto enroll all NFIP participating communities into
the CRS program to give the community CRS credit for activities that
they already undertake that exceed NFIP minimum floodplain management
standards (e.g., community has an open space preservation program to
reduce flooding)? Auto enrollment means all
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communities would automatically participate in CRS by virtue of
participating in the NFIP.
(3) Would there be any advantage if FEMA were to assess an
escalating surcharge on NFIP policy premiums for NFIP participating
communities that are not in compliance with the NFIP minimum floodplain
management standards? This would be in addition to the NFIP Probation
policy surcharge that is in 44 CFR 59.24(b).
(4) What are the advantages and/or disadvantages of providing
technical assistance to communities to support CRS participation? Would
communities take advantage of technical assistance and if so, what
type(s) of technical assistance would be most helpful? Examples of
suggested technical assistance include assisting communities with the
preparation of required CRS documents, CRS project management, CRS
program support, and preparation of repetitive loss analysis.
(5) FEMA currently offers premium discounts for many CRS activities
through the NFIP's current pricing approach. In CRS participating
communities, this may lead to policyholders receiving ``double''
discounts for the same CRS activities (e.g., elevation of individual
structure above the NFIP's minimum elevation requirement resulting in a
structure level discount through the NFIP's current pricing approach
and a CRS credit for a community-wide higher structure elevation
regulation).
(a) If FEMA were to provide NFIP premium discounts to individual
policyholders for CRS activities, through the NFIP's current pricing
approach, should FEMA offer duplicate CRS discounts for the same
activities that are already reflected in individual premiums? Why or
why not?
(b) Assuming no to (a), would communities be incentivized to adopt
measures in excess of FEMA's minimum floodplain management standards
for community-wide activities that reduce future flood risk (e.g.,
stormwater management regulations or enhanced future land use planning)
if FEMA were to only offer CRS discounts for those community-wide
activities that reduce future flood risk?
(6) Are there additional community-level activities that are not
currently included in the CRS program that measurably reduce flood risk
to property? Please describe and, if available, provide national-level
data that demonstrate how the activities measurably reduce current and/
or future flood risk reduction to property.
(7) Would a participating CRS community be willing to exchange CRS
insurance policyholder premium discounts (e.g., all, some, or none) in
a community for other comparable community-level benefits, such as
enhanced technical assistance for the local CRS program or capacity-
building grants? For example, if the aggregate amount of CRS discounts
offered to individuals in the community totals $100,000, would the
community be interested in redistributing the total individual CRS
discounts (e.g., $100,000) among the community and the individual
policyholders (e.g., $50,000 to the community for enhanced technical
assistance grants and $50,000 to be distributed to individual
policyholders in the form of CRS discounts)? By redistributing the CRS
insurance policyholder premium discount benefits from the policyholders
to the community, there would be a potential for both wider risk
reduction and larger financial benefit to the community. Would such an
approach make non-participating CRS communities more inclined to join
the CRS program?
(8) Besides individual flood insurance financial premium discounts,
what other benefits would best incentivize communities to maintain
participation in or to join the CRS program?
(9) The current CRS program credits 19 activities and 90+ elements
recognized by the CRS program and identified in the CRS Coordinator's
Manual along with the credit points assigned to each activity. An
activity is a floodplain management activity for which CRS credit has
been established (e.g., mapping and regulations--higher regulatory
standards). Elements are discrete parts of an activity that if
implemented result in CRS credit points under that activity (e.g.,
community-wide prohibition of outdoor storage in the SFHA, which is an
element of the activity of higher regulatory standards). What are some
advantages and/or disadvantages of reducing the number of activities
and elements, and streamlining CRS reporting requirements?
(10) What are the advantages and/or disadvantages of communities
working with other communities to implement CRS under a regional
approach? For example, a regional approach may include a regional
watershed or planning commission that implements a CRS program for
multiple communities or a shared CRS coordinator position among several
communities.
(11) What else should FEMA consider for potential improvements to
the CRS program and how can FEMA better engage with stakeholders to
effectively implement the CRS program?
FEMA notes that this notice is issued solely for information and
program-planning purposes. The suggested approaches do not reflect an
agency position or official action. Responses to this notice do not
bind FEMA to any further actions related to the response.
Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2024-15271 Filed 7-10-24; 8:45 am]
BILLING CODE 9111-47-P