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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices management. To be covered by an NFIP
flood insurance policy, a property must be in a community that participates in the NFIP. To qualify for the NFIP, a community adopts and enforces a floodplain management ordinance to regulate development in flood hazard areas.5 The objective of the ordinance is to minimize the potential for flood damage to future development. Today, over 22,500 communities in the United States participate in the NFIP.6
In 1990, FEMA implemented the Community Rating System CRS as a voluntary program for recognizing and encouraging community floodplain management activities exceeding the minimum NFIP standards and the CRS
program was fully authorized by the National Flood Insurance Reform Act of 1994.7 Any community 8 in full compliance with the minimum NFIP
floodplain management requirements may apply to join the CRS program.
Through the CRS program, communities undertaking floodplain management activities that exceed the minimum floodplain management requirements of the NFIP earn CRS credits often referred to as points that result in flood insurance premiums discounts for NFIP policyholders who reside in that community. As of April 2021, over 1,500 communities participate in the CRS program nationwide. This represents about seven percent of eligible NFIP communities that could participate in the CRS program.
However, these communities have a large number of NFIP flood insurance policiesnearly 3.6 millionso more than 70 percent of all NFIP policies are written in communities participating in the CRS program.9
The CRS program credits community efforts that exceed the minimum standards by reducing flood insurance premiums for the communitys policyholders. The CRS program is similar to, but separate from, the private insurance industrys programs that grade communities on the effectiveness of their fire suppression and building 5 44

CFR 59.2b.
The WatermarkNational Flood Insurance Program Financial Statements found at: http
www.fema.gov/flood-insurance/work-with-nfip/
watermark-financial-statements last accessed July 27, 2021.
7 Public Law 103325, 108 Stat. 2255 1994.
8 Community means any State or area or political subdivision thereof, or any Indian tribe or authorized tribal organization, or Alaska Native village or authorized native organization, which has authority to adopt and enforce flood plain management regulations for the areas within its jurisdiction. 44 CFR 59.1.
9 FEMA, Community Rating System Fact Sheet, June 2021, at http www.fema.gov/fact-sheet/
community-rating-system last accessed July 12, 2021.

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code enforcement efforts. CRS program discounts on flood insurance premiums range from 5 percent up to 45 percent based on the level of CRS program credits awarded to communities. The discounts provide an incentive for communities to implement new flood protection activities that help save lives and property when a flood occurs and correlate to FEMAs expected savings for these local floodplain activities.
To participate in the CRS program, local floodplain management actions must be described, measured, and evaluated by the CRS program. The CRS
program assigns credits for defined activities. Most activities are optional;
however, some activities are required to achieve higher Classes. A higher-Class community achieves higher levels of discount; a Class 1 community achieves the highest discount of 45 percent. The basic documents detailing the program are the NFIP Community Rating System Coordinators Manual known as the CRS Coordinators Manual and the 2021 Addendum to the NFIP
Community Rating System Coordinators Manual known as the 2021 Addendum.10 Taken together, these documents set forth the procedures, creditable activities, and the credit assigned to each activity, and give examples of activities and how their credit is calculated.
The discounts on premium rates for NFIP flood insurance coverage are based on flood and erosion risk reduction measures implemented by a CRS
community.11 The CRS program provides credit to participating communities under 19 public information and floodplain management activities as described in the CRS
Coordinators Manual. To receive credit, community officials prepare documentation that verifies the efforts made under the 19 activities. The CRS
program activities include but are not limited to: 1 Public information to advise people about flood hazards, flood insurance, and ways to reduce flood damage; 2 mapping and regulations to limit floodplain development or provide increased protection to new and existing development; 3 flood damage 10 Includes both the FEMA, NFIP Community Rating System Coordinators Manual, at http
www.fema.gov/sites/default/files/documents/fema_
community-rating-system_coordinators-manual_
2017.pdf, and the 2021 Addendum to the NFIP
Community Rating System Coordinators Manual, at http www.fema.gov/sites/default/files/documents/
fema_community-rating-system_coordinatormanual_addendum-2021.pdf. last accessed July 1, 2021.
11 See 2017 CRS Coordinators Manual, Appendix D found at http www.fema.gov/sites/default/files/
documents/fema_community-rating-system_
coordinators-manual_2017.pdf.

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reduction; and 4 flood preparedness to provide flood warning, levee safety, and dam safety projects.
Based on the total number of credits a community earns, the CRS program assigns the community to one of ten different Classes. The community will then receive flood insurance discounts based on the communitys Class. For example, a community earning 4,500
credits or more qualifies for Class 1, and property owners in the Special Flood Hazard Area SFHA receive a 45
percent discount on their NFIP flood insurance premiums. Similarly, a community with as few as 500 credits will be in Class 9 and property owners in the SFHA receive a 5 percent discount. Communities may receive additional credit for regulating development outside the SFHA to the same standards as inside the SFHA.
Credits are also available for assessing future flood conditions, including the impacts of future development, urbanization, and climate change impacts including sea-level rise.
Additionally, communities can qualify for State-based credit based on the activities or regulations a State or regional agency implements within communities. A community that does not participate in the CRS program, or does not obtain the minimum number of credit points, is a Class 10 community and receives no discount on NFIP flood insurance premiums.
FEMA is seeking input on ways the agency can improve the CRS program:
1 To better align the CRS program with the improved understanding of flood risk and flood risk approaches that have developed since the programs inception; 2 to better incentivize communities and policyholders to become more resilient and to not only manage, but to lower their vulnerability to flood risk; and 3 to support the sound financial framework of the NFIP.
While the CRS program today has evolved, the overall approach and framework of the program has been the same since the start of the program. As FEMA undertakes many initiatives that will transform the NFIP, the agency is also evaluating the CRS program and its potential to support FEMA, State government, Tribal government, Territorial and community goals and needs. While the agency has made incremental changes since the CRS
programs implementation, the agency is seeking input to improve the program further through additional programmatic changes. With the continuous learning around flood, flood risk management, and flood risk reduction techniques, FEMA now has more information about and
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