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Flooded AreaResearchers at UC Davis recently concluded that California should consider leaving the National Flood Insurance Program (NFIP) and explore implementation of its own statewide flood insurance program in order to invest in risk reduction rather than premiums.  This is an idea that has been talked about for years by state and local flood management experts.  But does it make sense?

The National Flood Insurance Program

The U.S. Congress established NFIP with the passage of the National Flood Insurance Act of 1968. NFIP is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses in exchange for state and community floodplain management regulations that reduce future flood damages. Participation in the NFIP is based on an agreement between communities and the Federal Emergency Management Agency (FEMA). If a community adopts and enforces a floodplain management ordinance to reduce future flood risk to new construction in floodplains, the government will make flood insurance available within the community as a financial protection against flood losses.

ThoughtsThis is a follow-up to our blog post last week, “FEMA Issues Draft Regulatory Amendments To Implement President Obama’s Executive Order 13690 And The Federal Flood Risk Management Standard; Comments Due By October 21, 2016.”

FEMA’s Approach to Amending Its Regulations

Many of the proposed amendments to the regulations focus on the details for the implementation methodologies as well as the inter-relationship between them. For example, what should one do when there are contradictory scientific approaches? What should one do when the best available science indicates a flood elevation that is lower than would be used under the freeboard value approach? Is it practical to use the .2 percentage approach when only 18% of FEMA’s maps contain data on the .2% event? Based on these and other questions, on page 35 of the proposed amendment package FEMA proposes to make the freeboard value approach the standard approach for all events that are not critical actions, and to make the freeboard value approach the chosen approach for critical actions unless the agency finds that the climate-informed science approach results in a higher elevation.

EightIntroduction

Executive Order 11988 (EO 11988) requires Federal agencies to avoid, to the extent possible, the long- and short-term adverse impacts associated with the occupancy and modification of floodplains where there is a practicable alternative. The Federal Emergency Management Agency (FEMA) is now proposing to amend its regulations (found in 44 CFR Part 9) which describes the traditional 8-step process that FEMA uses to implement EO 11988. The amendment is being driven by Executive Order 13690 (EO 13690), issued by President Obama in 2015 to address increased risks as a result of climate change, which changed the definition of “floodplain” for projects that are “Federally funded” (defined as actions involving the use of Federal funds for new construction, substantial improvement, or to address substantial damage to a structure or facility). In these cases, the new broader definition of floodplain (developed under one of three approaches described below) will likely result in a larger floodplain and a requirement to design projects such that they are resilient to a higher vertical elevation. However, for actions that don’t meet the definition of a Federally funded project, FEMA will continue to use the historical definition.

Flood Insurance. ProgramjpgPeople definitely care. But not enough people are likely to care to make a political issue out of it due to how the rate increases were designed. The National Flood Insurance Program (NFIP) rate increases called for by the last two acts of Congress are designed as slow and modest increases for the vast majority of folks holding policies. Indeed, this appears to be the reason Congress passed the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), in order to amend and soften the rate increases called for by the Biggert-Waters Flood Insurance Reform Act of 2012. During this current election year it takes a lot to get Congress focused on action, and the rate increases do not appear to fall on a large enough group to generate the noise that gets Congress’ attention. Added to that, the Republican Party is currently focused on demonstrating fiscal restraint, and rate increases designed to repay an approximately $20 billion deficit fit right into the current messaging.

I think that the following headline would have gotten the attention of people and politicians and possibly caused Congress to change its mind: “NFIP rates for homes to grow more than 20% a year!” However, that is only a true statement for non-primary residences located in AE and VE zones that were constructed before the first NFIP flood insurance rate map (FIRM) issued for the relevant region (so called “pre-FIRM” structures). A pretty small group of folks would be affected by this. Or perhaps a headline like: “25% annual rate increases by FEMA will apply to businesses!” But that is only a true statement for businesses located in AE and VE zones that were also constructed before the first NFIP flood insurance rate map issued for the relevant region. Again, a small group of folks to lobby Congress.

The House Appropriations Committee has passed the fiscal year 2016 Energy and Water Appropriations bill this last week. That bill, which does not yet have the authority of law, includes the following content regarding the Federal Flood Risk Management Standard. If the bill passes the House, and then the Senate,…

May 6th is the deadline for comments to be submitted on the draft guidelines for the Federal Flood Risk Management Standard. While there have been further attempts at extending the comment period (see for example this letter from 33 members of the House of Representatives), it appears that the deadline will not be changing. Here are some of our current musing on what sorts of comments should be submitted. Please feel free to share these comments around, and to share your comments with us for inclusion in our final letter.

Dear _______:

The [agency or entity name] is pleased to provide comments on the draft Revised Guidelines for Implementing Executive Order 11988, Floodplain Management issued on January 28, 2015 (“Draft Guidelines”). We are a [describe agency or entity].

As a preliminary matter, we are very supportive of the stated goal which appears to underlie the Draft Guidelines and Executive Order 13690 (“EO 13690”): to more fully consider climate change in predicting flood risk and to ensure that this is considered in the context of Federal investments in infrastructure. Indeed, to know that climate change will almost certainly affect flood risk, and to not consider this in the context of federal investments would be foolhardy and could shorten the useful life of Federal infrastructure. But the question is not whether climate change should be considered. Rather, the questions are (1) how it should be considered, (2) whether the Draft Guidelines provide a clear, consistent, and predictable framework for managing the process within the Federal family, and (3) whether other areas have been accidently swept into the consideration of the Draft Guidelines. It is our belief that the current Draft Guidelines do a disservice to the Federal Government by not providing a clear, consistent, and predictable framework and by accidently sweeping other areas into coverage of the Draft Guidelines. We therefore recommend that changes be made to the Draft Guidelines and that they then be released for a further comment period.

This letter is organized into two sections, consisting of general comments that are thematic in nature, and then specific comments on specific sections of the Draft Guidelines.

Since 2008 the Natomas area in the City of Sacramento has been under an effective moratorium on new development due to insufficient flood protection. The area is preparing to re-start development once the City receives a letter from the Federal Emergency Management Agency (FEMA) that lifts a flood hazard designation…

There is significant uncertainty as to the intent and effect of the new Federal Flood Risk Management Standard, released as part of the Obama Administration’s issuance of Executive Order 13690, issued in January to amend Executive Order 11988. Based on the chatter in the flood risk management community, the…

The Federal Emergency Management Agency (FEMA) has announced the first four listening sessions for the newly proposed draft guidance to implement the Federal Flood Risk Management Standard (FFRMS) arising out of President Obama’s recent amendment of Executive Order 11988.  As we noted in previous blog entries, the President has amended…

Eight Republican Senators have issued a letter to President Obama questioning the legality of the President’s newly issued Executive Order (EO) amending Executive Order 11988 issued by President Carter in 1997.  The letter was signed by Senators Cochran (Mississippi), Vitter (Louisiana), Cornyn (Texas), Isakson (Georgia), Wicker (Mississippi), Blunt (Missouri), Boozeman (Arkansas), and Cassidy (Louisiana) on February 5, 2015.

Discussion
While some commentators have begun questioning whether the new EO may exceed the President’s authority, the Republican Senators have instead focused on a procedural issue, noting that Public Law 113-235 (providing for FY2015 appropriations) requires the Executive Branch to solicit and consider input from governors, mayors, and other stakeholders before issuing a new Federal Flood Risk Management Standard (FFRMS). The Senators then allege that this act required solicitation and consultation that did not occur.