National Flood Insurance Program; Insurance Rates

FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 61

RIN 3067-AC24

National Flood Insurance Program; Insurance Rates

AGENCY: Federal Insurance Administration, FEMA.

ACTION: Final rule.

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SUMMARY: This final rule increases the National Flood Insurance Program

(NFIP) chargeable (subsidized) rates, which apply to all structures

located in communities participating in the Emergency Program of the

NFIP and to certain structures in communities in the Regular Program of

the NFIP. The rule is to help the NFIP satisfy the premium requirements

for the historical average loss year and to reduce the general

taxpayers' burden with a more equitable sharing of the costs of flood

losses between general taxpayers and the insureds.

EFFECTIVE DATE: October 1, 1994.

FOR FURTHER INFORMATION CONTACT: Charles M. Plaxico, Federal Emergency

Management Agency, Federal Insurance Administration, 500 C Street, SW.,

Washington, DC 20472, (202) 646-3422.

SUPPLEMENTARY INFORMATION: On March 21, 1994, the Federal Emergency

Management Agency (FEMA) published in the Federal Register (Vol. 59,

Page 13298) a proposed rule to increase the chargeable (subsidized)

rates. The chargeable (subsidized) rates, for which an increase was

proposed, are the rates applicable to structures located in communities

participating in the Emergency Program of the NFIP and to certain

structures in communities in the Regular Program of the NFIP. They are

countrywide rates for two broad building type classifications which,

when applied to the amount of insurance purchased and added to the

expense constant and Federal policy fee, produce a premium income

somewhat less than the expense and loss payments incurred on the flood

insurance policies issued on that basis. The funds needed to supplement

the inadequate premium income are provided by the National Flood

Insurance Fund. The subsidized rates are promulgated by the

Administrator for use under the Emergency Program (added to the NFIP by

the Congress in Section 408 of the Housing and Urban Development Act of

1969) and for use in the Regular Program on construction or substantial

improvements started before the effective date of the initial Flood

Insurance Rate Map (FIRM) or on or before December 31, 1974 (this

additional grandfathering was added to the NFIP by Congress in section

103 of the Flood Disaster Protection Act of 1973), whichever is later.

FEMA proposed to increase the chargeable or subsidized rates as

follows:

------------------------------------------------------------------------

Rates per year per

$100 coverage on

Type of structure --------------------

Structure Contents

------------------------------------------------------------------------

(1) Residential.................................... $0.60 $0.70

(2) All other (including hotels and motels with

normal occupancy of less than 6 months in

duration)......................................... .70 1.40

------------------------------------------------------------------------

For comparison, the current subsidized rates are as follows:

------------------------------------------------------------------------

Rates per year per

$100 coverage on

Type of structure --------------------

Structure

Contents

------------------------------------------------------------------------

(1) Residential.................................... $0.55 $0.65

(2) All other (including hotels and motels with

normal occupancy of less than 6 months in

duration)......................................... .65 1.30

------------------------------------------------------------------------

A 45-day period (ending on May 5, 1994) was provided for review and

comment on the proposed changes. No comments were received during the

comment period. Therefore, the revision increasing the chargeable

(subsidized) rates is incorporated into the final rule as proposed,

without change.

National Environmental Policy Act

Pursuant to section 102(2)(C) of the National Environmental Policy

Act of 1969, 42 U.S.C. 4371 et seq., and the implementing regulations

of the Council on Environmental Quality, 40 CFR parts 1500-1508, FEMA

has prepared an environmental assessment of the issuance by FEMA of

this final rule. The assessment concludes that there will be no

significant impact on the human environment as a result of the issuance

of the final rule. It is, therefore, found that the action does not

constitute a major Federal action significantly affecting the quality

of the human environment. On this basis, an Environmental Impact

Statement will not be prepared. Copies of the environmental assessment

are available for inspection at the Federal Emergency Management

Agency, room 840, 500 C St., SW., Washington, DC 20472.

Executive Order 12866, Regulatory Planning and Review

This final rule is not a significant regulatory action as defined

under Executive Order 12866 of September 30, 1993, Regulatory Planning

and Review, 58 FR 51735, October 4, 1993. To the extent possible, this

rule adheres to the principles of regulation set forth in this

Executive Order.

Paperwork Reduction Act

This final rule does not contain a collection of information

requirement as described in section 3504(h) of the Paperwork Reduction

Act.

Executive Order 12612, Federalism

This final rule involves no policies that have federalism

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

1987.

Executive Order 12778, Civil Justice Reform

This rule meets the applicable standards of section 2(b)(2) of

Executive Order 12778.

List of Subjects in 44 CFR Part 61

Flood Insurance.

Accordingly, 44 CFR part 61 is amended as follows:

PART 61--INSURANCE COVERAGE AND RATES

1. The authority citation for part 61 continues 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 61.9 is revised to read as follows:

Sec. 61.9 Establishment of chargeable rates.

(a) Pursuant to section 1308 of the Act, chargeable rates per year

per $100 of flood insurance are established as follows for all areas

designated by the Administrator under part 64 of this subchapter for

the offering of flood insurance.

Rates for New and Renewal Policies

------------------------------------------------------------------------

Rates per year per

$100 coverage on

Type of structure --------------------

Structure

Contents

------------------------------------------------------------------------

(1) Residential.................................... $0.60 $0.70

(2) All other (including hotels and motels with

normal occupancy of less than 6 months in

duration)......................................... .70 1.40

------------------------------------------------------------------------

(b) The contents rate shall be based upon the use of the individual

premises for which contents coverage is purchased.

(Catalog of Federal Domestic Assistance No. 83.100, ``Flood

Insurance.'')

Dated: May 18, 1994.

Elaine A. McReynolds,

Administrator, Federal Insurance Administration.

[FR Doc. 94-12628 Filed 5-23-94; 8:45 am]

BILLING CODE 6718-05-P