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[Federal Register: June 15, 1995 (Volume 60, Number 115)]

[Proposed Rules]

[Page 31442-31444]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]



 

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FEDERAL EMERGENCY MANAGEMENT AGENCY


 

44 CFR Part 65


 

RIN 3067-AC38


 

 

Review of Determinations for Required Purchase of Flood Insurance


 

AGENCY: Federal Emergency Management Agency (FEMA).


 

ACTION: Proposed rule.


 

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SUMMARY: FEMA proposes to establish the procedures and process for its

review of determinations of whether a building or mobile home is

located in an identified Special Flood Hazard Area. The review process

will provide an opportunity for borrowers and lenders of loans secured

by improved real estate to resolve disputes regarding contested

determinations.


 

DATES: We invite your comments on this proposed rule, which should be

submitted on or before August 14, 1995.


 

ADDRESSES: Please send written comments to the Rules Docket Clerk,

Office of the General Counsel, Federal Emergency Management Agency, 500

C Street SW., Washington, DC 20472, (facsimile) (202) 646-4536.


 

FOR FURTHER INFORMATION CONTACT: Michael K. Buckley, P.E., Chief,

Hazard Identification Branch, Mitigation Directorate, 500 C Street SW.,

Washington, DC 20472, (202) 646-2756, (facsimile) (202) 646-4596 (not

toll-free calls).


 

SUPPLEMENTARY INFORMATION: Section 102(e) of the Flood Disaster

Protection Act of 1973, as amended by the National Flood Insurance

Reform Act of 1994 (NFIRA) (42 U.S.C. 4012a(e)(3), states that the

borrower and lender for a loan secured by improved real estate or a

mobile home may jointly request FEMA to review a determination of

whether the building or mobile home is located in an identified Special

Flood Hazard Area (SFHA). Within 45 days after receiving the request,

if all required supporting technical information is provided, FEMA

would review the determination and provide to the borrower and the

lender a letter stating, based on the information supplied, whether the

building or mobile home is in an identified Special Flood Hazard Area.

These procedures would be available to the borrower and the lender

during the 45-day period after the borrower is notified that flood

insurance is required. Only joint requests by both the lender and the

borrower (requests accompanied by a letter signed by both parties)

would be accepted under these procedures. Requests submitted more

[[Page 31443]] than 45 days after borrower notification be not be

reviewed and would be returned.


 

Background


 

Section 102(b) of the Flood Disaster Protection Act of 1973, as

amended by the National Flood Insurance Reform Act of 1994 (NFIRA), 42

U.S.C. 4012a(b), requires that federally regulated lending institutions

and federal agency lenders review the National Flood Insurance Program

(NFIP) map for the community in which they are contemplating making,

increasing, extending, or renewing any loan secured by improved real

estate to determine whether the building or mobile home is located in

an identified Special Flood Hazard Area, and if so, require the

purchase of flood insurance for the building or mobile home. Section

524(e)(3)(A) of the NFIRA provides for the borrower and lender jointly

to request that FEMA review the determination. There may be cases in

which there is a disagreement regarding the accuracy of a

determination, and this procedure will confirm or disprove the accuracy

of the original determination. In many cases, a third party performs

these determinations for lenders. The NFIRA states that a lender may

provide for the acquisition or determination of information regarding

special flood hazards to be made by a person other than the lender only

to the extent such person guarantees the accuracy of the information.

Because lenders rely on information provided by these third parties to

ensure compliance with mandatory flood insurance purchase requirements,

lenders have ample incentives to ensure the quality of this

information. Therefore, FEMA expects that these determinations would be

done correctly and FEMA's review of these determinations will be

necessary only in unusual cases. If additional information (such as a

property survey) becomes available after the initial determination was

performed, FEMA would expect that this additional information would be

presented to the party making the determination for consideration

before asking FEMA to review the determination.


 

Standard Hazard Determination Form


 

As mandated by Section 528 of the NFIRA (42 U.S.C. 4104b), FEMA is

developing a Standard Hazard Determination Form to be used by all

regulated lenders and federal agency lenders making flood hazard

determinations for improved property used to secure loans. The Standard

Hazard Determination Form was published as a proposed rule in the

Federal Register on April 7, 1995, 60 FR 17758. We propose that when

the borrower and lender ask FEMA to make a flood hazard determination

review, they would provide to FEMA the completed Standard Hazard

Determination Form together with all other technical information used

in making the flood hazard determination. After reviewing that

technical information, FEMA would issue a written determination

concurring with or disagreeing with the original determination, and

stating whether the National Flood Insurance Program map indicates the

subject building or mobile home is in the SFHA.


 

Fee for Review by FEMA


 

FEMA would initiate cost recovery procedures for its review of

determinations. This action would reduce expenses to the flood

insurance policyholders and would contribute to maintaining the NFIP as

self-supporting. We anticipate that a flat fee of $60 would cover a

majority of the costs associated with reviewing, recording, processing,

and dispatching FEMA determinations. This fee would also apply to a

finding of insufficient information. This fee would be reviewed on an

annual basis and would be changed, if necessary, by publishing a notice

in the Federal Register.


 

Effect on Existing Letter of Map Amendment (LOMA)/Letter of Map

Revision (LOMR) Procedures


 

The procedures proposed under this part would not result in a

revision to an NFIP map and are not intended to replace those

procedures already provided in 44 CFR Parts 65 and 70. If additional

technical data, such as elevation information about the building or

mobile home, are provided with the request for review of a

determination, FEMA would not automatically initiate the LOMA or LOMR

process for the property. A request for a LOMA or LOMR may be submitted

at any time and must be presented following the procedures established

under 44 CFR parts 70 and 65 for those requests.

National Environmental Policy Act


 

This proposed rule would be categorically excluded from the

requirements of 44 CFR part 10, Environmental Consideration. No

environmental impact assessment has been prepared.


 

Regulatory Flexibility Act


 

The Deputy Director certifies that this rule would not have a

significant economic impact on a substantial number of small entities

in accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et

seq., because it would not be expected (1) to have significant

secondary or incidental effects on a substantial number of small

entities, nor (2) to create any additional burden on small entities.

Moreover, establishing a procedure for FEMA's review of determinations

is required by the National Flood Insurance Reform Act of 1994, 42

U.S.C. 4012a. A regulatory flexibility analysis has not been prepared.


 

Regulatory Planning and Review


 

This proposed rule would not be a significant regulatory action

under Executive Order 12866 of September 30, 1994, Regulatory Planning

and Review, 58 FR 51735. To the extent possible this proposed rule

adheres to the principles of regulation as set forth in Executive Order

12866. This proposed rule has not been reviewed by the Office of

Management and Budget under the provisions of Executive Order 12866.


 

Paperwork Reduction Act


 

This proposed rule would not involve any collection of information

for the purposes of the Paperwork Reduction Act.


 

Executive Order 12612, Federalism


 

This proposed rule would involve no policies that have federalism

implications under Executive Order 12612, Federalism, dated October 26,

1987.


 

Executive Order 12778, Civil Justice Reform


 

This proposed rule would meet the applicable standards of section

2(b)(2) of Executive Order 12778.


 

List of Subjects in 44 CFR Part 65


 

Flood insurance, Reporting and recordkeeping requirements.


 

Accordingly, 44 CFR part 65 is proposed to be amended to read as

follows:


 

PART 65--IDENTIFICATION AND MAPPING OF SPECIAL HAZARD AREAS


 

1. The authority citation for part 65 is proposed to be revised to

read as follows:


 

Authority: 42 U.S.C. 4001 et seq., Reorganization Plan No. 3 of

1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31,

1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.


 

2. Section 65.17 is proposed to be added to read as follows:

[[Page 31444]]



 

Sec. 65.17 Review of determinations.


 

This section describes the procedures that shall be followed and

the types of information required by FEMA to review a determination of

whether a building or mobile home is located within an identified

Special Flood Hazard Area (SFHA).

(a) General Conditions. The borrower and lender of a loan secured

by improved real estate or a mobile home may jointly request that FEMA

review a determination that the building or mobile home is located in

an identified SFHA. Such a request must be submitted within 45 days of

the lender's notification to the borrower that the building or mobile

home is in the SFHA and that flood insurance is required. Such a

request must be submitted jointly by the lender and the borrower and

shall include the required fee and technical information related to the

building or mobile home.

(b) Data and Other Requirements. Items required for FEMA's review

of a determination shall include the following:

(1) Payment of the required fee by credit card, check, or money

order, payable in U.S. funds, to the National Flood Insurance Fund;

(2) A request for FEMA's review of the determination, signed by

both the borrower and the lender;

(3) A copy of the lender's notification to the borrower that the

building or mobile home is in an SFHA and that flood insurance is

required (the request for review of the determination must be

postmarked within 45 days of borrower notification);

(4) A completed Standard Hazard Determination Form for the building

or mobile home, together with a legible copy of all technical data used

in making the determination; and

(5) A copy of the effective Flood Hazard Boundary Map (FHBM) or

Flood Insurance Rate Map (FIRM) panel for the community in which the

building or mobile home is located, with the building or mobile home

location indicated. Portions of the map panel may be submitted but

shall include the area of the building or mobile home in question

together with the map panel title block, including effective date, bar

scale, and north arrow.

(c) Review and Response by FEMA. Within 45 days after receipt of a

request to review a determination, FEMA will notify the applicants in

writing of one of the following:

(1) Request submitted more than 45 days after borrower

notification; no review will be performed and all materials are being

returned;

(2) Insufficient information was received to review the

determination; therefore, the determination is upheld until a complete

submittal is received; or

(3) The results of FEMA's review of the determination, which shall

include the following:

(i) The name of the NFIP community in which the building or mobile

home is located;

(ii) The property address or other identification of the property

and building or mobile home to which the determination applies;

(iii) The NFIP map panel number and effective date upon which the

determination is based;

(iv) A statement indicating whether the building or mobile home is

within the Special Flood Hazard Area;

(v) The time frame during which the determination is effective

(generally until the next map revision occurs for the map panel

involved).


 

Dated: June 9, 1995.

Harvey G. Ryland,

Deputy Director.

[FR Doc. 95-14690 Filed 6-14-95; 8:45 am]

BILLING CODE 6718-03-P