[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