Flood Mitigation Grants and Hazard Mitigation Planning, 61720-61750 [E7-21265]

Agencies

• Federal Emergency Management Agency
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 72, Number 210 (Wednesday, October 31, 2007)]
[Rules and Regulations]
[Pages 61720-61750]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21265]



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Part II





Department of Homeland Security





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Federal Emergency Management Agency



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44 CFR Parts 59, 61, 78, et al.



Flood Mitigation Grants and Hazard Mitigation Planning; Interim Rule

Federal Register / Vol. 72 , No. 210 / Wednesday, October 31, 2007 / 
Rules and Regulations

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Parts 59, 61, 78, 79, 80, 201, and 206

[Docket ID FEMA-2006-0010]
RIN 1660-AA36


Flood Mitigation Grants and Hazard Mitigation Planning

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Interim rule.

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SUMMARY: This interim rule implements certain provisions of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 to 
provide new incentives for States and communities to mitigate the 
effects of flood damage to severe repetitive loss properties by 
creating the Severe Repetitive Loss program (SRL), and through reduced 
cost-share requirements in the existing Flood Mitigation Assistance 
program (FMA). In addition, the rule ensures that the FMA planning 
requirements are consistent with other applicable regulations, and 
streamlines the planning requirements for Indian tribal governments. It 
also describes requirements for the acquisition of property for open 
space with mitigation funds, including under SRL and FMA. Finally, this 
interim rule makes technical changes to clarify current practices and 
implements conforming amendments to reflect current authorities, 
including the recent change to the standard amount of authorized Hazard 
Mitigation Grant Program assistance.

DATES: Effective Date: December 3, 2007.
    Comment Date: Comments on the rule including the new Paperwork 
Reduction Act collections are due on or before December 31, 2007.
    Applicability Date: Part 78 will continue to apply to the 
administration of funds awarded for which the application period opened 
prior to December 3, 2007. Parts 79 and 80 will apply to the 
administration of funds awarded for which the application period opens 
on or after December 3, 2007, except that Sec.  80.19 will apply as of 
December 3, 2007 regardless of the original project date.

ADDRESSES: You may submit comments, identified by Docket ID FEMA-2006-
0010, by one of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: FEMA-RULES@dhs.gov. Include Docket ID FEMA-2006-0010 in the 
subject line of the message.
    Fax: 866-466-5370.
    Mail/Hand Delivery/Courier: Rules Docket Clerk, Office of Chief 
Counsel, Federal Emergency Management Agency, Room 835, 500 C Street, 
SW., Washington, DC 20472.

FOR FURTHER INFORMATION CONTACT: Cecelia Rosenberg, Mitigation 
Directorate, Federal Emergency Management Agency, 500 C Street, SW., 
Washington DC 20472, (phone) 202-646-3321, (facsimile) 202-646-2719, or 
(e-mail) cecelia.rosenberg@dhs.gov.

SUPPLEMENTARY INFORMATION:

Request for Comments

    FEMA encourages public participation in this rulemaking. Comments 
will be most helpful if they state a particular section (or sections) 
of the rule, and offer specific proposals for change, as needed. All 
submissions received must include the agency name and docket ID (FEMA-
2006-0010). Regardless of the method used for submitting comments or 
material, all submissions 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 Act 
notice that is available on the Privacy and Use Notice link on the 
Administration Navigation Bar of www.regulations.gov.
    All comments received, as well as this document are available on 
the public docket for this rulemaking. For access to the docket, go to 
the Federal eRulemaking Portal at https://www.regulations.gov. Submitted 
comments may also be inspected at FEMA, Office of Chief Counsel, Room 
835, 500 C Street, SW., Washington, DC 20472.
    At this time, FEMA does not anticipate it will hold a public 
meeting for this rulemaking project.

Table of Abbreviations

BC--Benefit Cost
BCA--Benefit Cost Analysis
CAP-SSE--Community Assistance Program-State Support Services Element
CRS--Community Rating System
DHS--Department of Homeland Security
FEMA--Federal Emergency Management Agency
FIRM--Flood Insurance Rate Map
FIS--Flood Insurance Study
FMA--Flood Mitigation Assistance
HMGP--Hazard Mitigation Grant Program
ICC--Increased Cost of Compliance
NEPA--National Environmental Policy Act of 1969
NFIA--National Flood Insurance Act of 1968
NFIF--National Flood Insurance Fund
NFIP--National Flood Insurance Program
OMB--Office of Management and Budget
PDM--Pre-disaster Mitigation
POC--Point of Contact
PRA--Paperwork Reduction Act of 1995
RFC--Repetitive Flood Claims
SHMO--State Hazard Mitigation Officer
SQA Net--Simple and Quick Access Net
SRL--Severe Repetitive Loss
USACE--United States Army Corps of Engineers

I. Background

    This rule implements provisions of the Bunning-Bereuter-Blumenauer 
Flood Insurance Reform Act of 2004 (the Act), Public Law 108-264, 118 
Stat. 714, found at 42 U.S.C. 4102a. The Act amends the National Flood 
Insurance Act of 1968 to provide new programs and incentives for States 
and communities to mitigate flood damage to severe repetitive loss 
properties. Severe repetitive loss properties are residential 
properties covered under a contract for flood insurance that have 
incurred flood-related damage (i) for which 4 or more separate claims 
payments have been made under flood insurance coverage, with the amount 
of each such claim exceeding $5,000, and with the cumulative amount 
exceeding $20,000; or (ii) for which at least 2 separate claims 
payments have been made under such coverage, with the cumulative amount 
exceeding the value of the property. Pursuant to the Act, this interim 
rule implements the new Severe Repetitive Loss (SRL) program, which is 
authorized by the Act until September 30, 2009, and amends the existing 
Flood Mitigation Assistance (FMA) program to meet the requirements of 
the Act. In addition, FEMA is modifying the mitigation planning 
regulations to minimize the burden on State, local, and Indian tribal 
governments, to streamline the planning process, and to ensure 
consistency in the local planning requirements that apply to all FEMA 
mitigation programs, including the SRL and FMA programs.
    Also, effective October 4, 2006, section 684 of the Post-Katrina 
Emergency Management Reform Act of 2006, Public Law 109-295, amended 
the amount of Hazard Mitigation Grant Program (HMGP) assistance 
authorized for States with an approved Standard State Mitigation Plan 
from 7.5 percent to 15 percent of the total estimated Federal 
assistance (excluding administrative costs) provided for a major 
disaster under FEMA Public and Individual Assistance programs for 
amounts spent up to $2 billion, and established a sliding scale for 
HMGP assistance, based on the amount of the total estimated

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Federal assistance. This interim rule amends FEMA's regulations to 
reflect this statutory change.

II. Discussion of Interim Rule

    The SRL grant program was created pursuant to Section 1361A of the 
National Flood Insurance Act of 1968 (NFIA, or ``the Act''), 42 U.S.C. 
4030, as amended by the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004, Public Law 108-264, with the goal of reducing flood 
damages to SRL properties. The long-term goal of the SRL program is to 
reduce or eliminate claims under the NFIP through project activities 
that will result in the greatest savings to the NFIF in the shortest 
period of time.
    The new program, the SRL program, is authorized through September 
30, 2009 and is designed to provide mitigation assistance to address 
properties that have experienced repetitive flood losses and that are 
insured under the NFIP. The SRL program focuses on a subset of all 
repetitive flood loss properties: Those residential properties with a 
high frequency of losses or a high value of claims. The mitigation of 
losses sustained by these properties, through projects such as buyouts, 
elevation, relocation, or floodproofing, will produce savings for 
policyholders under the NFIP and for Federal taxpayers through reduced 
flood insurance losses and reduced Federal disaster assistance. The 
program relies on a strategy of making mitigation offers to these 
severe repetitive loss property owners and shifting more of the burden 
of recovery costs to those property owners who decline the offer of 
mitigation assistance, and choose to remain vulnerable to repetitive 
flood damage, by incrementally increasing their rates for flood 
insurance. As established by Congress, the sale of flood insurance 
under the NFIP is subject to the rules and regulations of FEMA. FEMA 
has elected to have State-licensed insurance companies' agents and 
brokers sell flood insurance to consumers. Those whose rates are 
increased will be eligible to appeal this increase via an independent 
third party from a list based on professional qualifications 
impartially developed by FEMA's Alternative Dispute Resolution (ADR) 
office. To reduce costs, the property owner may request that the 
Administrator substitute a reviewer from FEMA's ADR office for the 
independent third party.
    With respect to grant programs, FEMA has actively engaged in flood 
mitigation through its HMGP, FMA, PDM and Repetitive Flood Claims (RFC) 
programs. Each of these programs was created under different 
legislative authorities, and as a result, have varied impacts on 
reducing the nation's inventory of the most floodprone structures. What 
has not existed is a program that specifically addresses and provides 
funds for the elimination of, or reduction of risk to, the subset of 
those properties that create the largest impact on claims paid from the 
NFIF. Most of these properties existed before the inception of the NFIP 
and its associated floodplain management standards, and are thus 
eligible for discounted insurance rates. Furthermore, none of these 
other programs feature a formal mitigation offer process whereby 
insurance rates may be increased if the property owner declines the 
offer.
    FEMA intends to focus the SRL program in communities and on 
property owners who choose to participate in the program. This will 
maximize the benefits of the program, while minimizing adverse impacts 
on communities and property owners. The program will provide an 
opportunity for many property owners to address recurring flooding 
problems, and reduce the impact of these events.
    The legislation also provides an incentive to mitigate damage to 
severe repetitive loss properties through reduced non-Federal cost-
share requirements for the SRL and FMA programs (from 25 percent to 10 
percent) for projects in States with approved State Mitigation Plans 
that meet the additional repetitive loss requirements. The reduced cost 
share would be available only for projects that address severe 
repetitive loss properties.
    While the SRL and FMA programs will be implemented as separate 
programs, with different funding accounts, they are similar in their 
goals and purpose. FEMA has included both of these programs in one 
implementing regulation to ensure as much consistency as reasonable 
between the programs and to limit the confusion around program 
implementation, since both programs will likely be managed by the same 
State agency staff.
    The final rule implementing the FMA program is published elsewhere 
in today's Federal Register. (It follows an interim rule published 
March 20, 1997 at 62 FR 13346.) See 44 CFR part 78. This part will 
continue to be used to implement the FMA program for all grants awarded 
for which the application period opened prior to December 3, 2007.
    This new interim rule creates a new part (part 79, with details 
specific to acquisition projects at a new part 80), that restates the 
requirements for the existing FMA program in a format more consistent 
with the approach to all of FEMA's mitigation grant programs. Part 79 
will implement the FMA program for all grants awarded for which the 
application period opens on or after December 3, 2007.
    Part 79 also implements a change to the cost share available to 
States under the FMA program if their approved mitigation plan meets 
certain criteria, described herein in Sec.  201.4. States would be 
eligible for a reduced cost share if their mitigation plan addresses 
actions related to reducing the risk to repetitive loss properties that 
they have already taken, and those actions that they intend to take.
    The requirements for the new SRL program are incorporated into this 
rule. In addition, this interim rule brings the FMA program regulations 
into conformance with current policies, and ensures better conformance 
to existing grants management requirements. In authorizing the SRL 
program in section 102 of the Act, and amending the FMA program in 
section 103 of the Act, Congress directed FEMA to ``provide assistance 
for properties in the order that will result in the greatest amount of 
savings to the National Flood Insurance Fund in the shortest period of 
time'' and to provide assistance for activities that are ``in the best 
interest of the National Flood Insurance Fund.'' FEMA has concluded 
that Congress' stated goals for the two programs are similar. 
Therefore, there is no substantial difference in how FEMA will 
determine the funding priority for the two programs.
    As an additional aspect of implementing these programs, this rule 
includes a new part (part 80) which describes the requirements and 
procedures for open space property acquisition which applies to the SRL 
and FMA programs, as well as all FEMA hazard mitigation assistance 
programs. In light of the Act's requirements regarding property 
acquisition, FEMA determined that a central reference point for all 
mitigation grant program property acquisitions would make the programs 
more consistent overall and easier to implement.
    Elsewhere in today's Federal Register, FEMA published a final rule 
implementing section 322 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (Stafford Act), 42 U.S.C. 5165. (It follows an 
interim rule published February 26, 2002 at 67 FR 8844.) The final rule 
identified the requirements for State, Tribal, and local mitigation 
plans. This new interim rule streamlines the mitigation planning 
requirements contained in that rule by making the

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FMA planning requirements, currently implemented in a separate part of 
the regulation at Sec.  78.5, consistent with the mitigation planning 
requirements outlined in part 201. This will ensure that local 
governments can comply with one set of mitigation planning requirements 
in order to be eligible to apply for all FEMA mitigation project grant 
funding, including the FMA and SRL programs.
    In addition, this interim rule streamlines the roles and 
responsibilities of Indian tribal governments in mitigation planning. 
In the preexisting regulations, Indian tribal governments were given 
the option of preparing either a State-level Mitigation Plan, or a 
Local-level Mitigation Plan, depending on whether or not they intended 
to apply directly to FEMA as a grantee or whether they would apply 
through the State as a subgrantee. FEMA has found, however, that 
neither of these options has sufficiently met the needs of the Indian 
tribal governments.
    To address this problem, this interim rule establishes a specific 
planning requirement for Indian tribal governments that recognizes some 
of the unique aspects of these governments. The rule establishes Tribal 
Mitigation Plans for plans prepared and approved after December 3, 
2007. The rule provides that plans prepared and approved under the 
preexisting rule, under either the State or local requirements, would 
also be recognized as Tribal Mitigation Plans. These older plans, 
however, would be required to meet the revised criteria when the 
original approval expires. Most Indian tribal governments fit the local 
planning model, in that they do not have sub-jurisdictions as States 
do; however, if they are grantees, the rule would require that they 
provide the capability assessment and identification of funding options 
that are listed in the State plan requirements. This rule combines the 
appropriate aspects of these planning requirements into one section, 
with a single plan required for Indian tribal governments.
    This rule also implements section 106 of the Act, which modifies 
the insurance rates for property leased from the Federal government 
``located on the river-facing side of any dike, levee, or other 
riverine flood control structure, or seaward of any seawall or other 
coastal flood control structure.'' These properties will be charged the 
full actuarial insurance premium rates.
    Finally, this rule makes conforming amendments, as well as 
technical corrections to clarify current authorities and practices. 
This rule thus makes revisions to the amount of assistance available to 
States under the Hazard Mitigation Grant Program in Sec.  79.4 as a 
result of changes made to the Stafford Act in the Post-Katrina 
Emergency Management Reform Act passed in October 2006.

III. Solicitation of Public Comments

    Section 102 of the Act required FEMA, within 90 days of the Act, to 
consult with State and local officials in carrying out the development 
of procedures for the distribution of funds to States and communities 
to carry out eligible mitigation activities. To meet this requirement, 
FEMA published a Federal Register notice on September 15, 2004, at 69 
FR 55642, to initiate consultation with State and local officials, as 
well as members of the public. In the notice, FEMA solicited responses 
to the following questions: What key factors FEMA should consider in 
developing the SRL program; the parameters that FEMA should use to 
define severe repetitive loss for multifamily structures; the process 
FEMA should use to notify property owners that their property is 
considered a severe repetitive loss property by virtue of the 
legislative definition; the criteria FEMA should use to allocate funds 
to States, including whether or not there should be caps on the funding 
as is the case under the FMA program; the criteria that should be used 
to approve State mitigation plans to take advantage of the increased 
Federal cost share; the criteria FEMA should use to determine projects 
that will result in the greatest amount of savings to the National 
Flood Insurance Fund (NFIF); and, what types of assistance should FEMA 
provide to States and communities when making offers to owners of SRL 
properties. Interested parties initially had until November 30, 2004, 
to submit written comments in response to these questions. FEMA 
extended the deadline for comments until December 7, 2004. FEMA 
received 26 written comments. Eight of those comments were received 
from States, ten from communities and eight were from associations. On 
November 17, 2004, as part of the consultation process, FEMA held a 
meeting in Washington DC with representative officials of State and 
local governments, organizations representing emergency management, 
floodplain management, and insurance professions, and other interested 
parties.
    FEMA reviewed and considered all oral and written responses as FEMA 
developed the SRL grant program and this interim rule. FEMA's 
questions, the public comments, and FEMA's responses to the public 
comments are listed below.

Question 1: What key factors should FEMA consider in developing the 
Pilot Program for Severe Repetitive Loss Properties under section 
1361A?

    Multiple commenters stated that the program should be administered 
by the States, similar to existing FEMA mitigation grant programs, 
including FMA and Pre-Disaster Mitigation (PDM). However, once 
commenter wrote that the existing programs take too long to implement.
    Multiple commenters stated that funding allocations should be 
disbursed based on the location of SRL properties (those with the 
greatest drain, greatest losses, most number of SRL properties, etc.), 
rather than disbursing funds evenly among States. Multiple comments 
indicated that the ranking of properties should ensure that those 
properties with the most loss claims should be addressed first. 
Multiple commenters stated that allocations should also consider the 
State and/or community capability, defined as having plans in place, 
past performance shown to mitigate repetitive loss properties, projects 
lined-up, and/or matching funds available. Multiple comments also 
indicated that funds should be prioritized to those communities with 
experience managing FEMA funds and/or with matching funds and projects 
lined-up. Multiple commenters indicated that reallocations should occur 
quickly to move funds to communities that need them.
    A considerable number of commenters stated that the data used for 
determining those properties that meet the SRL property definition was 
not accurate and needed to be updated/corrected, and that real-time 
claim reporting was needed.
    Multiple commenters stated that the parameters for demolition 
rebuild projects need to be clarified. Multiple commenters stated that 
property owners, communities, and States must be able to determine the 
most appropriate mitigation measures.
    Multiple commenters stated that there needs to be clear definitions 
for ``notices'' and ``offers,'' and that both need to include clear 
details of the appeals process and insurance implications. Further, 
multiple commenters stated that there needs to be a clear description 
of the property value in an offer.
    Multiple commenters stated that FEMA would need additional staff 
with National Flood Insurance Program (NFIP) expertise to manage the 
program.

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    Multiple commenters stated that the Increased Cost of Compliance 
(ICC) should be made available for match, or indicated that many 
communities would not be able to provide the cost share.
    Multiple commenters indicated that the program should focus on cost 
effectiveness, and Benefit/Cost analysis in particular.
    Multiple commenters indicated that the planning requirement should 
be clearly defined, and multiple commenters suggested a plan be 
required to prioritize funding.
    Multiple commenters requested that a streamlined, simple, or 
tailored application and grants management process be implemented; and 
that guidance needs to be clear regarding the roles and 
responsibilities of FEMA, States and communities.
    Multiple commenters stated that mitigation funds should be directed 
to only those covered under an NFIP policy. Multiple respondents 
indicated that insurance policy writers needed education and awareness/
outreach, both to understand the program and the ICC benefits.
FEMA's Response
    In response to comments regarding administration of the program by 
the States, the new Part 79 added in this rulemaking deals with the 
States' program administration responsibilities, which are being 
designed similar to the way FEMA's other mitigation grant programs 
operate. In response to comments regarding the accuracy of data used to 
identify SRL properties, insurance and claims information for 
properties validated as meeting the legislative characteristics of SRL 
are now available to States on a web-based site (SQA Net), which is 
updated monthly. Furthermore, regulations and program procedures 
clearly describe the notice, offer, and appeals processes. Program 
procedures have been developed to define the parameters and limitations 
imposed for the demolition/rebuild activity type. State, local and 
tribal mitigation plans will be required and are described in this 
interim rule; allocation of funds will be based on the number of SRL 
properties within each State, in accordance with the authorizing 
legislation; it is also described in this interim rule. Awards shall be 
prioritized in order of the greatest savings to the National Flood 
Insurance Fund, by virtue of the Benefit Cost Ratio.
    With respect to concerns over the accuracy of claims data, FEMA has 
continually worked to update the claims information data to increase 
accuracy, including field verification of property information when 
necessary. Furthermore, property owners can discuss errors in their 
claim history with NFIP representatives. As described under the 
response to Question 3, a property owner is given a toll-free number to 
call if they have questions about their designation as an SRL property.
    With respect to concerns regarding the details of receiving a 
mitigation offer, particularly for an acquisition, FEMA has developed 
an offer letter that will contain information regarding the mitigation 
project type; the amount of the purchase offer, including the basis and 
methodology for calculating the purchase offer, and the final offer 
amount that reflects applicable deductions; notification that 
participation in the SRL program is voluntary; the amount of time the 
property owner has to accept or reject the offer; the right of the 
property owner to appeal the increase in flood insurance rates if they 
refuse the offer; a summary of the consultation process, and other 
pertinent information.
    In response to the comment that funds should only be directed to 
those covered under a NFIP policy, the definition of a SRL property 
includes the requirement that the property is covered by a NFIP policy.
    ICC coverage under the Standard Flood Insurance Policy (SFIP) 
provides for the payment of a claim to help pay for the cost to comply 
with State or community floodplain management laws or ordinances from a 
flood event in which a building has been declared substantially damaged 
or repetitively damaged. When an insured building is damaged by a flood 
and the State or community declares the building to be substantially or 
repetitively damaged, ICC coverage will help pay for the cost to 
elevate, floodproof, demolish, or relocate the building up to a maximum 
benefit of $30,000. This coverage is in addition to the building 
coverage for the repair of actual physical damages from flood under the 
SFIP. ICC claims payments from previous flood events may be used to 
meet the non-Federal cost share requirements, as long as the period for 
making such a claim remains open.

Question 2: What parameters should FEMA use to define severe repetitive 
loss for multifamily structures consisting of 5 or more residences?

    Multiple commenters stated that the multifamily properties 
definition should be the same as the single-family properties 
definition. However, several alternative options to define multifamily 
properties were suggested including:
     The ratio of cumulative loss versus replacement cost;
     The determination of substantial damage for a structure;
     A proportionate definition based on the number of units; 
or
     Five or more residences covered under a single contract 
for flood insurance that have had 4 or more claims, each exceeding 6.25 
percent of the replacement value of the structure, with cumulative 
payments exceeding 25 percent of the replacement value. Parameters to 
consider included total damages, number of losses, dollar loss per 
claim, and low-rise versus high-rise structures.
    Multiple commenters agreed that at least 2 claims payments that 
cumulatively exceed the replacement value of the structure (as stated 
in Section 1361A(b)(2) of the Act) should apply to single family as 
well as multifamily properties.
    Multiple commenters indicated that multifamily properties should 
follow single-family properties as the priority for mitigation funding.
    Multiple commenters indicated that Benefit Cost Analysis data 
applied to multifamily projects consider more than building damages, 
but also content damages, in order to make multifamily projects cost-
effective.
FEMA's Response
    FEMA evaluated two options in selecting the definition of 
``multifamily property'' for the purposes of this interim final rule. 
The first option was keeping the same claims thresholds as defined in 
the Act for single family properties. The second option FEMA evaluated 
was defining ``multifamily property'' as reflecting the increased 
property values and number of units typically associated with 
multifamily properties. FEMA analyzed claim information for multifamily 
properties and determined that a claim history including four separate 
claims of $25,000 with the cumulative amount of such payments exceeding 
$100,000 or having at least two separate claims payments with the 
cumulative amount of such claims exceeding the value of the property 
would be reasonable criteria to select for the meaning of the term 
``severe repetitive loss'' for multifamilty properties.
    Based on evaluating options, FEMA determined that selecting the 
first option allowed properties for which a relatively inexpensive 
mitigation solution may be available (such as elevating HVAC equipment 
or eliminating finished enclosures below

[[Page 61724]]

elevated floors) to be eligible for SRL program funds. These minimal 
mitigation steps may also lead to a diminished need for disaster 
housing as well. This definition was chosen because it allows for the 
maximum number of multifamily residences to be eligible for funding 
consideration under the SRL program by virtue of meeting the definition 
of an SRL property.
    Thus, ``multifamily property'' is defined in part 79 as ``a 
property consisting of five or more residences''. Furthermore, the 
definition of ``Severe Repetitive Loss'' as defined in part 79 of this 
interim rule uses the same parameters for multifamily properties as for 
single family.

Question 3: What process should FEMA use to notify property owners that 
their property is considered a severe repetitive loss property as 
defined by the statute?

    A considerable number of commenters stated that notices to property 
owners needed to be coordinated with, sent concurrently to, or shared 
with State, Tribal and local communities. A considerable number of 
respondents stated that FEMA should be responsible for notifying 
property owners, and multiple commenters indicated that this notice 
should be in writing, either through certified or registered mail.
    A considerable number of respondents stated that the notice needed 
to include clear, non-legal, plain English language that described the 
notice, the program, the determination, the process, appeals, etc. 
Multiple commenters suggested a standard form or one-page document 
explaining the program. Furthermore, multiple responses wrote that the 
notice be provided with the property owner's insurance policy renewal 
to link the program to insurance coverage. Multiple commenters stated 
that disclosure in property records, and real estate transactions 
needed to be enforced.
FEMA's Response
    FEMA's Special Direct Facility (SDF) is operated by the NFIP's 
Servicing Agent. It has been in existence since 2000, when FEMA 
determined it needed to manage more closely the loss adjustments to the 
subset of repetitive loss properties that had the highest number of 
losses. For the same reasons, property owners whose claims history 
meets the SRL criteria have been receiving letters approximately 150 
days before their policy is renewed that identify their properties as 
SRL properties. In addition to managing loss adjustments, the SDF will 
manage the increase in premiums should the property owner decline an 
offer of mitigation. The letters also explain that their flood 
insurance policy will be transferred to FEMA's Special Direct Facility 
(if the policy is not already being serviced there). These letters are 
also sent to the property owner's flood insurance agent, and to their 
mortgage lender. This letter provides a toll-free number that the 
property owner can call if they have questions about their designation 
as an SRL property, or any other questions about the transfer of their 
policy.

Question 4: What criteria should FEMA consider when allocating funds to 
States and/or communities under the Pilot Program? Should FEMA consider 
base allocations for States with higher numbers of severe repetitive 
loss properties?

    Multiple commenters stated that funds should target those 
properties with the most losses to the NFIF, therefore targeting the 
most egregious properties regardless of location. A considerable number 
of commenters indicated that allocations should be based on the total 
number of SRL properties per State. Finally, multiple commenters 
indicated that base allocations for those States with high numbers of 
SRL properties should be considered.
    Multiple commenters stated that any allocation should provide 
enough to cover the cost of at least 1 project or some acceptable 
number of properties, and multiple responses stated that allocations 
should consider variations in costs to mitigate.
    Commenters wrote that additional considerations for allocation 
included capability factors, such as project readiness, leveraged local 
investment, past mitigation grant performance, NFIP compliance, and 
Community Rating System (CRS) ratings. Multiple commenters suggested 
FEMA base allocations on approved mitigation plans.
    Commenters suggested several alternative bases for allocations, 
including: Insured values or market values, or values based on value of 
future losses.
FEMA's Response
    Subpart 79.4 of this interim rule provides for allocations to be 
based upon the percentage of the total number of SRL properties located 
within each State, as per the authorizing legislation, Flood Insurance 
Reform Act of 2004, Public Law 108-264. States with little or no 
allocation will be able to apply for 10 percent of the total funds 
appropriated in any fiscal year, provided that the State or Tribal 
applicant has at least 1 SRL property. State allocations will be large 
enough to permit the implementation of at least 1 project.
    FEMA considered several options in evaluating how to administer 
allocations based on the percentage of the total number of SRL 
properties located within each State, as per the authorizing 
legislation, Flood Insurance Reform Act of 2004, Public Law 108-264. 
States with little or no funding allocation will be able to apply for 
10 percent of the total funds made available under SRL in any fiscal 
year, provided that the State or Tribal applicant has at least one SRL 
property. The options evaluated and not accepted included small 
allocations to all States; larger allocations to a limited number of 
States with numerous SRL properties; and a variety of allocation 
scenarios for States with a limited number of SRL properties.
    Ultimately FEMA decided on an allocation that could be adjusted 
annually based on the number of SRL properties in a particular State. 
FEMA would evaluate the point at which it is more beneficial for a 
State to compete for the 10 percent set-aside than to receive an 
allocation that was insufficient. This allocation approach provided the 
necessary funds to accomplish mitigation projects. The average flood 
mitigation project funded under FEMA's mitigation programs is 
approximately $70,000-$100,000.
    The legislation also required a 10 percent set-aside of the grant 
funds for States receiving little or no allocation. FEMA determined 
that ``little or no allocation'' meant the point at which it was more 
beneficial for a State to compete for appropriate funds to accomplish 
mitigation activities than to receive a small allocation, or one which 
is below the $70,000-$100,000 average mitigation project cost. The 
allocation option that FEMA selected is a reasonable approach to both 
allocations and the 10 percent set-aside.

Question 5: Should there be caps on Pilot Program funding for States 
and communities similar to Flood Mitigation Assistance program funds? 
If so, how would the cap amounts be determined?

    The overwhelming response was there should be no caps on funding.
    Multiple commenters requested FEMA remove the caps on funding 
currently implemented under the FMA program as well.

[[Page 61725]]

FEMA's Response
    At the commenters' request, FEMA has not imposed any funding caps 
within the SRL program. FMA caps are not changed by this rule, since 
they are statutorily based.

Question 6: What criteria should FEMA use to review and approve State 
mitigation plans consistent with 44 CFR part 201 to ensure that they 
contain recommended actions to mitigate severe repetitive loss 
properties?

    Multiple commenters indicated that FEMA should be as flexible as 
possible in the criteria used to review and approve plans, including 
simple goals and strategies that acknowledge properties at risk.
    Multiple commenters indicated that mitigation is local, and 
therefore States should not be held accountable for local strategies. 
Multiple commenters suggested that existing State or local plans should 
be accepted, particularly given the limited timeframe of authority for 
the Pilot program.
    Suggestions, if a plan is required, included providing for 
amendments to existing plans and approving projects while the 
amendments are being reviewed. Multiple commenters suggested that 
criteria to be reviewed focus on capability factors such as plan 
implementation, past performance and effort, not the number of severe 
repetitive loss properties mitigated. Multiple commenters were 
concerned that the lack of accuracy in the repetitive loss database may 
affect their ability to meet the planning requirements related to 
severe repetitive loss property mitigation. Discrepancies in claims 
information and property values as shown in the repetitive loss 
database may result in not showing certain properties as being SRL 
properties, yet those properties may in fact have been mitigated, 
``counting'' towards a SRL property mitigated. Similarly, database 
discrepancies may show a property as being SRL, when in fact it may not 
be. Therefore, if the property has not been mitigated, it may count 
``against'' the state's efforts to indicate mitigation of SRL 
properties in their state plan.
    Several commenters stated that disclosure of offer and insurance 
information needed to be a part of the property's permanent record, and 
information needs to be conveyed to the existing and new homeowners 
regarding the mitigation offer. Finally, multiple commenters indicated 
that there were too many ``lists'' between repetitive loss and severe 
repetitive loss.
FEMA's Response
    In this interim rule, FEMA requires states to have an approved 
State Mitigation Plan meeting the requirements of Sec. Sec.  201.4 or 
201.5 to qualify for the reduced non-federal cost share. The plan must 
satisfy all standard requirements but also identify specific actions 
the state has taken to reduce the number of repetitive loss properties; 
specify how the state intends to reduce the number of such properties; 
and describe the state's strategy to ensure that local jurisdictions 
with SRL properties take actions to reduce the number of these 
properties, including the development of local mitigation plans. 
Amendments to currently approved State plans will be acceptable. 
However, at the time of the next required plan update, the amendment 
must be incorporated into the plan and adopted as part of the plan. 
Until such time as the amendment is approved by FEMA, grants could be 
awarded; but the lower non-Federal cost share would not be available 
until the amendment is approved. While State and local plans must 
contain different types of data, the two types of planning efforts must 
be linked via common mitigation goals and objectives.
    With respect to the number of repetitive loss lists, FEMA has made 
available a separate list of SRL properties on SQA Net, which is 
available to State NFIP Coordinators and State Hazard Mitigation 
Officers via FEMA Regional Offices. SQA Net is a secure web portal that 
enables access of data from the NFIP flood insurance database. Data is 
updated monthly. In pursuing a repetitive loss strategy, FEMA developed 
a definition of repetitive loss structures, and maintained a list of 
those structures. A target repetitive loss list was also developed, 
which consisted of a subset of the list of repetitive loss properties 
that had the highest number of losses. FEMA does not consider these 
lists to be excessive, and finds that each serves a valuable purpose.

Question 7: What criteria should FEMA use to make the determination 
that a State has taken actions to reduce the number of severe 
repetitive loss properties in its communities?

    Commenters characterized criteria in terms of qualitative and 
quantitative criteria, as well as procedures for developing and 
reviewing plans.
    Qualitative factors suggested include the effort (that is, the 
number of offers made or the most egregious properties approached, but 
not necessarily accepted or mitigated); documentation that any actions 
were taken; partnerships with other programs and funding sources; level 
of outreach; and strength of the Community Assistance Program-State 
Support Services Element (CAP-SSSE). This program provides funding to 
States to provide technical assistance to communities in the National 
Flood Insurance Program (NFIP) and to evaluate community performance in 
implementing NFIP floodplain management activities. Quantitative 
factors proposed include number of properties mitigated, higher 
regulatory standards, number of Community Rating System (CRS) 
communities, number of repetitive loss properties, other programs in 
place, a plan in place, prioritization of properties, leveraging of 
matching funds, and others.
    Multiple commenters stated that States with approved mitigation 
plans in place should not have to submit new plans or ``prove'' that 
actions have been taken. Conversely, multiple commenters suggested that 
States submit a report or other documentation each year to show actions 
taken.
 FEMA's Response
    Section Sec.  201.5(c)(3)(v) of this interim rule addresses the 
State mitigation planning requirements for meeting this provision. The 
regulation requires documentation of actions already taken that 
specifically focused on SRL properties. Because the mitigation measures 
for each State and community could vary widely depending on the factual 
circumstances of each state and community, FEMA opted not to set fixed 
criteria.
    With respect to submitting plans and updates, since most States 
already have approved mitigation plans, they may only need to make 
limited revisions or clarifications to the plan that focus on this 
subset of properties. The entire plan will not need to be resubmitted, 
only the amendment that pertains to the SRL mitigation actions. 
Finally, at a minimum, states are required to review and update their 
mitigation plans every 3 years. Although they may opt to submit 
revisions annually, showing the mitigation actions taken, FEMA believed 
an annual requirement to be overly burdensome.

Question 8: What criteria should FEMA use to determine projects that 
will result in the greatest amount of savings to the National Flood 
Insurance Fund? How should the criteria relate to current FEMA 
procedures for determining cost effectiveness?

    A considerable number of commenters stated that Benefit Cost

[[Page 61726]]

Analysis (BCA) should be used to determine the greatest amount of 
savings to the NFIF. Multiple commenters indicated that the benefit 
cost analysis should be waived for all SRL properties or for those with 
2 or more claims that cumulatively exceed the property value. 
Additional suggestions for the use of benefit cost methodologies 
included providing clear guidance, a request that it be simple to use, 
and that it allow FEMA and applicants to consider all factors, not just 
damages. Commenters provided alternative criteria for ranking 
properties such as: claims paid; claims relative to property values; 
greatest cost savings to insured properties mitigated; or cost 
effectiveness based on insurance premium costs.
    Multiple commenters expressed that the term ``property value'' 
needed to be defined clearly, whether based on appraisal value, 
replacements value, insured value, or fair market value.
FEMA's Response
    All projects for which FEMA provides funding must be cost 
effective. For the purpose of determining the amount of savings to the 
NFIF as a result of the project, FEMA agreed with the commenters and 
used a Benefit Cost Ratio. In this rule, FEMA determines an SRL 
property by the cumulative amount of claims when 4 or more claims have 
been made, or by the market value of the property in relation to the 
cumulative amount of two or more claims when that cumulative amount 
exceeds the market value (Sec.  79.2(g)).
    Instead of using the term ``property value'', FEMA used the term 
``market value'' and defined it in Sec.  79.2. FEMA defined market 
value as the amount in cash, or on terms reasonably equivalent to cash, 
for which in all probability the property would have sold on the 
effective date of the valuation, after a reasonable exposure time on 
the open market, from a willing and reasonably knowledgeable seller to 
a willing and reasonably knowledgeable buyer, with neither acting under 
any compulsion to buy or sell, giving due consideration to all 
available economic uses of the property at the time of the valuation.

Question 9: What types of assistance do States and communities want 
from FEMA when making offers to owners of severe repetitive loss 
properties?

    Multiple commenters asked for funding for States and communities to 
assist with administrative costs, technical assistance needs, staff, 
and application development as part of making offers to owners of SRL 
properties. State and community commenters also stated that legal 
assistance prior to initiating offers and negotiating with owners would 
assist them.
    A considerable number of commenters stated that the data supporting 
the SRL properties list needed to be updated for accuracy, including 
validating the data for addresses, names, claims history, and property 
values. In addition, commenters requested access to the database, SQA 
Net, flexibility to add structures or validate data, and verifying 
premiums. Commenters also suggested FEMA maintain a single national 
database for projects, and provide information on the true actuarial 
rate in case of refusal at the time of the offer.
    Multiple commenters stated that adequate number of FEMA staff 
needed to be available to manage the program, and that the staff needs 
to be trained in NFIP and FEMA mitigation programs.
    Multiple commenters stated that assistance was needed to notify 
property owners of the consequences of not accepting offers. The 
commenters also stated that a simple FEMA handout or document 
explaining the insurance repercussions and the appeals process would be 
extremely helpful. Multiple commenters also requested FEMA describe the 
tax implications of accepting mitigation funds.
    Multiple commenters requested training be made available or 
improved for the program, and specifically identified insurance agents 
as a target for training.
FEMA's Response
    As with our other grant programs, administrative costs are 
available to applicants and subapplicants as a percentage of the grant 
award, once the grant is awarded. Furthermore, applicants and 
subapplicants may be reimbursed for pre-award costs for activities 
directly related to the development of the project proposal. These 
costs can only have been incurred during the open application period. 
These criteria are detailed in Sec.  79.8 of this interim rule.
    Certain legal expenses may be considered eligible applicant and/or 
subapplicant management cost activities when associated with: 
solicitation, review and processing of the SRL subapplications and 
subgrant awards, obtaining pre-award consultation agreements from SRL 
property owners, and staff salary costs directly related to performing 
the activities above. All management cost activities must be in 
conformance with 44 CFR part 13, Uniform Administrative Requirements 
for Grants and Cooperative Agreements to State and Local Governments 
and applicable program guidance.
    Applicant management costs are limited to up to 10 percent of the 
grant award and subapplicant management costs are limited to up to 5 
percent of the grant award. Eligible management costs incurred prior to 
the grant award, but after the SRL application period has opened are 
identified as pre-award management costs. Costs incurred with respect 
to pre-award activities associated with project implementation are not 
eligible.
    Data on SRL properties is available on the SQA Net to State NFIP 
Coordinators and State Hazard Mitigation Officers. This data is being 
validated and updated continuously. Over one third of the properties 
identified as having a data anomaly have been validated. New 
information is published each month on SQA Net. Information on the 
insurance premium rate increases for property owners refusing the 
mitigation offer will be provided during the consultation. Project-
related data for the SRL program will be housed within the same 
database that is maintained for all other Pre-Disaster Mitigation (PDM) 
grant programs.
    Only FEMA Regional and disaster related staff as well as State 
personnel, have been granted access to the repetitive loss and SRL data 
available to SQA Net. Several new features have been added to SQA Net 
recently including the ability to submit requested updates to 
repetitive loss records electronically over the Internet. The ability 
to search for claims records and to view former and active policy 
records via SQA Net is expected to be in place by Spring 2008. With 
respect to allowing local government access to SQA Net, there are 
concerns regarding potential security issues and the increased 
possibility of the unintentional inappropriate release of the data at 
the local level resulting in a Privacy Act violation. Although they do 
not have access to the SQA Net system, local communities continue to be 
approved users of the repetitive loss data under the Privacy Act.
    Program implementation information will contain information on 
premium rate increases, if a property owner refuses the mitigation 
offer. This program information also contains checklists of the types 
of information that the State or community would need to compile and 
make available as part of the consultations. The program information 
will be augmented further with mitigation consultation tools and 
resources for States and communities to aid in the consultation and 
offer process.

[[Page 61727]]

    Tax implications of accepting mitigation offers must be answered by 
the property owner's tax advisor or other State or locally sponsored 
tax advisory service. FEMA does not have the authority to provide 
information on this issue.
    Section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004 calls for the establishment of minimum training and 
education requirements for insurance agents who sell flood insurance 
policies. FEMA is working with state insurance commissioners on 
training requirements for agents that sell flood insurance policies.

Question 10: What role should states and communities have in the 
appeals process for severe repetitive loss property owners who decline 
mitigation offers under the Pilot Program? What rules and procedures 
should be contained in the Appeals Process?

    Of the comments received, 19 entities offered comments on question 
10. A general synopsis of these comments is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                 States/           Local         Associations/
            General comments on appeals process                territories      communities      organizations
----------------------------------------------------------------------------------------------------------------
Advocate information sharing between FEMA and States.......               1                3                  4
Advocate State and/or community involvement in Appeals                    5                4                  1
 Process...................................................
Advocate that only FEMA be involved in Appeals Process.....  ...............               1   .................
State participants still discussing the issue with other                  1   ...............  .................
 State agencies............................................
----------------------------------------------------------------------------------------------------------------

    The following are the comments on the appeals requirement of the 
Pilot Program presented by State and local officials and representative 
organizations during the consultation:
     Clarity in the details, especially the Appeals Process and 
the insurance consequences.
     States and communities are also sensitive to any 
possibility of liability which may preclude much participation in the 
Appeals Process. However, States and communities may be willing to 
participate in an administrative capacity in collecting data for 
appeals and ensuring that applications are completed.
     Property owners should make an appeal in writing, along 
with supporting documentation. The jurisdiction can also file 
documentation either in support or against the property owner's reason 
for the appeal.
     The decision to accept or deny the appeal must come from 
FEMA, thereby removing the States and communities from the threat of 
legal action. FEMA should send written notice of its findings to the 
state, community and property owner.
     Appeals rule requirements should not be written in a way 
that allows the property owners to easily avoid mitigation activities 
or higher flood insurance premiums.
     States and communities should be an informational role; 
again, concern to keep the States and communities from the potential 
legal liabilities.
     The local communities and the State officials should just 
assist people with the appeals. FEMA should make all your final 
decisions and handle all the paperwork. We also feel that there should 
be some formal recommendation from your parishes or local communities 
or State.
     The appeal process should start with the community. If the 
owner of a property rejects an offer but can easily show that in 
purchasing, that he relied on a FIRM [Flood Insurance Rate Map] map 
that indicated the property was not on the mapped flood hazard area, 
this should not have to go to FEMA.
     The appeal should go through the local government. They 
are the ones with claims on the property; they could validate it. 
Should come through the state as the administrator of the program. We 
could validate it; just like with an appeal from the local government, 
you concur, you may not concur, no comment, but that provides the 
additional insight.
FEMA's Response
    As established in Sec.  78.7(d) of this rule, an appeal on 
increased insurance rates is made in writing by the property owner to 
the FEMA Regional Administrator within 90 days of the date of the 
notice of insurance increase. The Regional Administrator may request 
the Grantee, and Sub-grantee (State and community) if applicable, to 
assist in the collection of data to support the property owner's 
appeal. The Regional Administrator will review the information provided 
by the property owner and may participate in discussions with the 
property owner, and if applicable, with the Grantee and Sub-grantee to 
resolve the appeal prior to sending it to an Independent Third Party or 
a reviewer from FEMA's Alternative Dispute Resolution office (at the 
property owner's discretion).

IV. Regulatory Requirements

A. Administrative Procedure Act Statement

    In general, FEMA publishes a rule for public comment before issuing 
a final rule, under the Administrative Procedure Act, 5 U.S.C. 533 and 
44 CFR 1.12. The Administrative Procedure Act, however, provides an 
exception from that general rule where the agency for good cause finds 
that the procedures for prior comment and response are impracticable, 
unnecessary, or contrary to public interest.
    This interim rule implements provisions of the Bunning-Bereuter-
Blumenauer Flood Insurance Reform Act of 2004, which amended the 
National Flood Insurance Act of 1968. The key component of this rule 
includes implementation of the new SRL program as well as amending 
provisions of the existing FMA program. The rule also streamlines the 
planning process, and clarifies the planning requirements to address 
existing, unanticipated inconsistencies.
    Authorization for the SRL program expires on September 30, 2009. 
Funding for the new SRL program was made available as of fiscal year 
2006, thus it is important to allow States, tribes, communities, and 
property owners to access these funds so that they may have the 
opportunity to reduce their flood losses to these high risk properties 
as soon as possible. It is also in the public interest to mitigate 
these SRL properties as soon as possible to minimize further costs 
resulting from upcoming seasonal flooding. These properties often pose 
the highest costs to the Nation in terms of discounted Federal flood 
insurance rates, as well as Federal disaster assistance payments,
    Prior comment on this rule is not in the public interest where the 
implementation of the new SRL program, as well as the modified FMA 
program, will assist States recovering from flood disasters nationwide, 
including Hurricanes Katrina and Rita, by providing additional grant 
resources

[[Page 61728]]

and increasing the Federal cost share for projects mitigating SRL 
properties. In particular, States and communities are at a critical 
stage for identifying properties to be mitigated in the post-Katrina 
recovery efforts, and these funds are essential for targeting the most 
costly properties in the area. To be most effective, the funds need to 
be made available to the Gulf Coast States and communities affected by 
Katrina and Rita as soon as possible. At the end of August 2007, there 
were just under 8,100 properties identified as meeting the definition 
of severe repetitive loss properties; approximately 58 percent, or 
4,685 properties, lie within the 5 States most affected by Hurricanes 
Katrina and Rita. Mitigating these SRL properties will provide States 
the opportunity to reduce future losses to these SRL properties, which 
represent the largest drain on the NFIF and also will reduce future 
disaster costs to the local, State, and Federal government.
    States, tribes, and communities also have a strong interest in 
accessing, as soon as possible, information in the rule that outlines 
how the States can revise their mitigation plans to receive the reduced 
cost share under the FMA and SRL programs. This cost-share reduction is 
an important incentive and, in some cases, necessary to allow 
communities, which otherwise would not be able to meet the match 
requirement, to mitigate SRL properties. It is essential that the 
availability of this information not be delayed, particularly where in 
many cases the revisions to mitigation plans will themselves, require 
time-consuming coordination across multiple agencies.
    In accordance with the Administrative Procedure Act, 5 U.S.C. 553 
(b), FEMA believes that prior notice and comment would be contrary to 
the public interest, as it would serve only to delay the benefits of 
this rule to States, tribes, and communities, and would continue 
imposing the costs of these at-risk properties on the general public.
    FEMA nevertheless recognizes the importance of public input in the 
regulatory process. To that end, FEMA involved the public in a 
consultation process prior to the publication of this interim rule. To 
initiate the consultation process, FEMA published a Federal Register 
notice on September 15, 2004, 69 FR 55642. The comment period was 
supposed to close on November 30, 2004, but FEMA extended the deadline 
for comments until December 7, 2004, and received 26 written comments 
from States, communities, and associations. Also, as part of the 
consultation, FEMA invited representative officials of State and local 
governments, organizations representing emergency management, 
floodplain management, and insurance professions, to provide oral 
presentations on the requirements and issues raised in the Federal 
Register notice. Comments received were given careful consideration in 
the preparation of this interim rule.
    Finally, FEMA actively encourages and solicits comments on this 
interim rule from interested parties. These comments will be given 
careful consideration, and could result in changes to these 
regulations.

B. National Environmental Policy Act

    FEMA has considered this rule in accordance with its implementing 
regulations for complying with the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321-4370f), which are found at 44 CFR part 10. 
This rule addresses applicant planning requirements, as well as 
eligibility, funding increases, and cost sharing/funding incentives 
relating to certain disaster mitigation programs and does not change 
the type or nature of mitigation actions that may be funded. This 
rulemaking would neither individually nor cumulatively have a 
significant effect on the human environment and, therefore, neither an 
environmental assessment nor an environmental impact statement is 
required. This rulemaking is among the category of actions included in 
the Categorical Exclusions listed at 44 CFR 10.8(d)(2)(ii), which 
excludes the preparation, revision and adoption of regulations from the 
preparation of an environmental assessment or environmental impact 
statement, where the rule relates to actions that qualify for 
categorical exclusions. The related actions of the development of plans 
and administrative activities that are included in this rule are also 
categorically excluded under 44 CFR 10.8(d)(2)(iii) and 44 CFR 
10.8(d)(2)(i).

C. Executive Order 11988, Floodplain Management

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 11988, Floodplain Management. Part 9 sets forth FEMA's 
policy, procedures, and responsibilities in implementing this Executive 
Order. In summary, these are, to the greatest possible degree: To avoid 
long and short term adverse impacts associated with the occupancy and 
modification of floodplains; avoid direct and indirect support of 
floodplain development whenever there is a practical alternative; 
reduce the risk of flood loss; promote the use of nonstructural flood 
protection methods to reduce the risk of flood loss; minimize the 
impacts of floods on human health, safety and welfare; restore and 
preserve the natural and beneficial values served by floodplains; and 
adhere to the objectives of the Unified National Program for Floodplain 
Management. As stated in the rule, the purpose of the SRL and FMA 
programs is to mitigate insured property losses from floods, thereby 
minimizing impacts to the NFIF, which is consistent with the intent of 
the Executive Order. In addition, for project activities funded through 
the SRL and FMA programs, each project will go through the 
environmental review process, which will include compliance with 
Executive Order 11988.

D. Executive Order 12866, Regulatory Planning and Review

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 12866, Regulatory Planning and Review. Under Executive 
Order 12866, a significant regulatory ac