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entitled 'National Flood Insurance Program: Additional Guidance on 
Building Requirements to Mitigate Agricultural Structures' Damage in 
High-Risk Areas Is Needed' which was released on July 29, 2014. 

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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

June 2014: 

National Flood Insurance Program: 

Additional Guidance on Building Requirements to Mitigate Agricultural 
Structures' Damage in High-Risk Areas Is Needed: 

GAO-14-583: 

GAO Highlights: 

Highlights of GAO-14-583, a report to congressional requesters. 

Why GAO Did This Study: 

NFIP helps protect property in high-risk floodplains by, among other 
things, requiring communities that participate in the program to adopt 
floodplain management regulations, including building requirements for 
new or substantially improved structures such as elevating, dry flood-
proofing, or wet flood-proofing structures. 

GAO was asked to evaluate the possible effects of NFIP, including its 
building requirements, on farmers in riverine areas that have a high 
risk of flooding. This report examines, among other things, the 
effects of building requirements on farmers in high-risk areas and 
options that could help address any challenges farmers face. To do 
this work, GAO analyzed laws, regulations, and FEMA policy and claims 
data; interviewed 12 state and local floodplain managers, 24 farmers, 
and 6 lenders in 8 selected communities in California, Louisiana, 
North Carolina, and North Dakota (selection based on geographic 
diversity, presence of high-risk flood areas, and type of farming that 
required on-site structures); and interviewed flood management and 
planning experts and FEMA officials. 

What GAO Found: 

The effects of the National Flood Insurance Program's (NFIP) building 
requirements for elevating or flood-proofing agricultural structures 
in high-risk areas varied across selected communities, according to 
interviews GAO conducted with floodplain managers and farmers. 
Specifically: 

* Floodplain managers and 12 farmers in selected rural communities 
with whom GAO spoke in Louisiana, North Carolina, and North Dakota 
generally were not concerned about these requirements. Most of these 
farmers told GAO that they had land outside the high-risk areas where 
they could build or expand their structures, or they could elevate 
their structures relatively easily. 

* Floodplain managers in selected California communities told GAO that 
farmers in their communities had been adversely affected by the 
building requirements. They said that most farm land was in high-risk 
areas and elevation of structures would be difficult and costly—due to 
the relatively deep flood depths, structures would be required to be 
elevated up to 15 feet to comply with the building requirements. They 
also indicated that some structures were difficult to make watertight 
below the projected flood level (dry flood-proofing). 

According to a California floodplain manager and several farmers with 
whom GAO spoke, the farmers who were adversely affected by the 
building requirements have had to work around outdated Federal 
Emergency Management Agency (FEMA) guidance that does not fully 
address the challenges of vast and relatively deep floodplains or 
reflect industry changes. For example, the 1993 guidance from FEMA 
allowed an alternative flood-proofing technique (wet flood-proofing) 
that permits water to flow through certain agricultural structures in 
expansive high-risk areas. However, farmers in the California 
communities told GAO this was not a viable option because pests might 
enter openings and contaminate crops stored inside. FEMA typically 
updates guidance as needed but acknowledged the need for additional 
guidance that covers all of the different types of agricultural 
structures and reflects recent developments in the size and scale of 
farm operations, including supporting structures that were expensive 
to build and replace. Additional and more comprehensive guidance would 
allow FEMA to better respond to recent developments and structural 
needs in vast and deep floodplains. 

Some local floodplain managers, farmers, and lenders from the selected 
communities identified options to help farmers manage the challenges 
of building or expanding agricultural structures in high-risk areas, 
but many of the options would entail certain risks and may run counter 
to the objectives of NFIP. For example, one commonly cited option 
calls for exempting agricultural structures from building 
requirements, with farmers assuming all of the flood risk and opting 
out of federal disaster relief. Both FEMA and the experts noted such 
an exemption could set a precedent, leading others to ask for similar 
exemptions. Further, FEMA officials stated that the agency had no 
legal authority to allow farmers or any other group to opt out of 
disaster relief. 

What GAO Recommends: 

The Administrator of FEMA should update existing guidance on 
mitigating the risk of flood damage to agricultural structures to 
include additional information that reflects recent farming 
developments and structural needs in vast and deep floodplains. FEMA 
agreed with the recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-14-583]. For more 
information, contact Daniel Garcia-Diaz at (202) 512-8678 or 
garciadiazd@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Effects of NFIP Building Requirements Varied for Farmers in Selected 
Communities, but Additional Guidance May Help Those Adversely Affected: 

Mandatory Purchase Requirements and Premium Changes Have Affected 
Rural Residents More Than Farmers: 

Options to Address Concerns about NFIP Requirements in Agricultural 
and Rural Areas Involve Trade-Offs and Risks: 

Conclusion: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Analysis of National Flood Insurance Program (NFIP) 
Premiums and Claims, Rural and Agricultural and Urban: 

Appendix III: Additional Information on Selected Agricultural and 
Rural Communities: 

Appendix IV: Comments from the Department of Homeland Security: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: National Flood Insurance Program Flood Zone Designations: 

Table 2: Selected Communities and the Number of Farmers and Rural 
Residents in Each: 

Table 3: Total Annual Premiums and Claims for Rural and Agricultural 
Riverine Areas (in constant 2014 dollars), 1994-2013 (excluding 1999): 

Table 4: Total Annual Premiums and Claims for Urban Riverine Areas (in 
constant 2014 dollars), 1994-2013 (excluding 1999): 

Table 5: Total Premiums and Claims by State for Rural and Agricultural 
Riverine Areas (in constant 2014 dollars), 1994-2013 (excluding 1999): 

Table 6: Total Premiums and Claims by State for Urban Riverine Areas 
(in constant 2014 dollars), 1994-2013 (excluding 1999): 

Table 7: Key Characteristics of Sutter County, California: 

Table 8: Key Characteristics of Yolo County, California: 

Table 9: Key Characteristics of Rapides Parish, Louisiana: 

Table 10: Key Characteristics of St. Landry Parish, Louisiana: 

Table 11: Key Characteristics of Duplin County, North Carolina: 

Table 12: Key Characteristics of Tyrrell County, North Carolina: 

Table 13: Key Characteristics of Cass County, North Dakota: 

Table 14: Key Characteristics of Walsh County, North Dakota: 

Figures: 

Figure 1: Levee, Sutter County, California: 

Figure 2: Rural and Agricultural Riverine Special Flood Hazard Areas 
(SFHA): 

Figure 3: Characteristics of Selected Agricultural Riverine 
Communities, May, 2014: 

Figure 4: Rice Drying Structure, an Example of a Structure That Is 
Difficult to Dry Flood-proof because Openings Are Needed for Fan 
Exhaust (Sutter County, Calif.): 

Figure 5: Rural (2010), Agricultural (2007), and Urban Areas (2010): 

Figure 6: FEMA Flood Map, Sutter County, California: 

Figure 7: FEMA Flood Map, Yolo County, California: 

Figure 8: FEMA Flood Map, St. Landry Parish, Louisiana: 

Figure 9: FEMA Flood Map, Duplin County, North Carolina: 

Figure 10: FEMA Flood Map, Tyrrell County, North Carolina: 

Figure 11: FEMA Flood Map, Walsh County, North Dakota: 

Abbreviations: 

AFMA: Agricultural Floodplain Management Alliance: 

BFE: base flood elevation: 

DHS: Department of Homeland Security: 

FEMA: Federal Emergency Management Agency: 

LAMP: Levee Analysis and Mapping Procedures: 

NFIP: National Flood Insurance Program: 

PRP: Preferred Risk Policy: 

SFHA: special flood hazard area: 

USDA: Department of Agriculture: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

June 30, 2014: 

The Honorable Dianne Feinstein: 
Chairwoman: 
Subcommittee on Energy and Water Development: 
Committee on Appropriations: 
United States Senate: 

The Honorable John Garamendi: 
House of Representatives: 

The National Flood Insurance Program (NFIP) is the federal 
government's key effort to minimize the damage and financial effect of 
floods. NFIP has been the main source of insurance against flood 
damage for most residents and businesses, including farmers, since 
1968. Community participation in NFIP is voluntary, but in order for 
residents and businesses to purchase flood insurance through the 
program, communities must join NFIP and adopt at least the minimum 
standards for floodplain management regulations, including building 
requirements. In communities participating in NFIP, owners of 
properties in special flood hazard areas (SFHA) obtain mortgages from 
federally regulated lending institutions or federal agency lenders or 
who receive direct financial assistance for acquisition or 
construction purposes are required to purchase flood insurance. 
[Footnote 1] As of the end of fiscal year 2013, about 22 percent (1.21 
million out of 5.54 million) of all NFIP policies were located in 
rural and agricultural riverine SFHAs.[Footnote 2] According to the 
Federal Emergency Management Agency (FEMA), about 5 percent of NFIP 
policies cover nonresidential buildings, including agricultural 
buildings. 

NFIP has been the subject of two new laws passed by Congress and 
signed by the President since 2012 and other congressional efforts to 
modernize the program and improve its finances after the program 
sustained heavy losses from major hurricanes, especially Hurricane 
Katrina in 2005. Starting in 2003, Congress appropriated $1.2 billion 
for the Map Modernization initiative, a comprehensive effort intended 
to upgrade the nation's inventory of flood maps to a digital format. 
On July 6, 2012, the President signed into law the Biggert-Waters 
Flood Insurance Reform Act of 2012 (Biggert-Waters Act) and introduced 
many changes to, among other things, strengthen the future solvency of 
NFIP.[Footnote 3] For example, it required FEMA to phase out almost 
all discounted insurance premiums (commonly referred to as subsidized 
premiums), end the practice of allowing premiums for properties that 
were remapped into a higher-risk flood zone to be calculated, in many 
cases, the same way as they were before they were remapped 
(grandfathering rates), and improve flood risk mapping, among other 
things. However, on March 21, 2014, the President signed into law the 
Homeowner Flood Insurance Affordability Act of 2014 (2014 Act), which 
repealed or altered portions of the Biggert-Waters Act.[Footnote 4] 
Because of these changes, some concerns regarding the elimination of 
subsidized premiums and grandfathering may no longer be valid. 

Some in the agricultural industry have questioned the effects of many 
of these changes on farmers and rural residents. For example, FEMA's 
mapping updates could place large portions of certain agricultural 
areas in SFHAs, so property owners in these areas could be required to 
purchase flood insurance if they do not have it and could see rates on 
existing policies rise. They could also be subject to floodplain 
management regulations that cover SFHAs, including building 
requirements that could raise the costs of new construction and 
involve mitigation efforts, such as elevating structures. We were 
asked to evaluate the possible effects of NFIP including floodplain 
regulations and insurance mandates on farmers and rural residents in 
high-risk rural and agricultural riverine floodplains. 

This report discusses (1) the effects on farmers and rural residents 
of NFIP's building requirements for agricultural and residential 
structures, (2) the effects on rural residents and farmers of the 
mandatory purchase requirement and changes in premium rates, and (3) 
options that have been proposed to address any issues resulting from 
changes to NFIP requirements, and stakeholders' views on these 
proposals.[Footnote 5] 

For all objectives, we analyzed relevant laws, including changes made 
by the Biggert-Waters Act and the 2014 Act, as well as FEMA 
regulations and policies, and conducted a literature review. We also 
interviewed FEMA and Department of Agriculture (USDA) officials, 
representatives of national farming and floodplain management 
organizations, representatives of agricultural floodplain management 
organizations, lenders, and the insurance industry. We conducted case 
studies in eight selected NFIP communities in California, Louisiana, 
North Carolina, and North Dakota. We selected these geographically 
diverse locations because they were located at least partially in or 
near high-risk floodplains and included farms that produced crops or 
livestock requiring onsite agricultural structures. 

To examine any effects that farmers and rural residents have faced as 
a result of NFIP's building requirements and the mandatory purchase 
requirement, we interviewed state and local floodplain managers, 
agricultural extension service officials, and agricultural lenders to 
obtain their views on how NFIP requirements had affected or could 
affect farmers and rural residents. Local floodplain managers and 
agricultural extension specialists helped us identify farmers and 
rural residents who had been remapped into SFHAs and could provide 
first-hand perspectives, and we conducted interviews with some of 
these individuals. To identify ways to address any challenges farmers 
and rural residents faced in complying with NFIP's building 
requirements and the mandatory purchase requirement, we gathered ideas 
from local floodplain managers, agricultural lenders, farmers, and 
rural residents that we met with during our case studies. We then 
asked experts from flood management, city and regional planning 
organizations, cognizant academics, and officials from FEMA to comment 
on the ideas we gathered. 

We conducted this performance audit from August 2013 to June 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

National Flood Insurance Program: 

Floods are the most frequent natural disasters in the United States, 
causing billions of dollars of damage annually. In 1968, Congress 
created NFIP to address the increasing cost of federal disaster 
assistance by providing flood insurance to property owners in flood-
prone areas, where such insurance was either not available or 
prohibitively expensive.[Footnote 6] Since its inception, the NFIP has 
been a key component of the nation's efforts to minimize or mitigate 
the financial impact of flood damage on property owners and limit 
federal expenditures after floods occur. Community participation is 
central to NFIP's success. In order to participate in the program, 
communities must adopt and agree to enforce floodplain management 
regulations to reduce future flood damage. In exchange, NFIP makes 
federally backed flood insurance available to homeowners and other 
property owners (for example, farmers and other businesses) in these 
communities. As of May 2014, about 22,052 communities were 
participating in the program. 

Insurance Coverage: 

Property owners can purchase flood insurance to cover both buildings 
and contents for residential and nonresidential properties. Insurable 
structures must have two or more outside rigid walls and a fully 
secured roof that is affixed to a permanent site. NFIP's maximum 
coverage limit for residential policyholders is $250,000 for buildings 
and $100,000 for contents. For nonresidential policyholders, the 
maximum coverage is $500,000 for buildings and $500,000 for contents. 
[Footnote 7] Agricultural structures are considered nonresidential 
structures, so items such as grain stored in a bin or a tractor stored 
in a shed are covered by contents coverage. Policyholders purchase 
separate policies for each structure they insure. Deductibles range 
from $1,000 to $5,000 on residential structures and $1,000 to $50,000 
on nonresidential structures.[Footnote 8] 

When NFIP was created, property owners were not required to buy flood 
insurance, so participation was voluntary. Congress amended the 
original law in 1973 to require some property owners to purchase flood 
insurance in certain circumstances (mandatory purchase requirement). 
The mandatory purchase requirement applies to owners of properties 
located in SFHAs in participating communities with mortgages held by 
federally regulated lenders or federal agency lenders, or who receive 
direct financial assistance for acquisition or construction purposes. 
[Footnote 9] Individuals in SFHAs who receive federal disaster 
assistance after September 23, 1994, for flood losses to real or 
personal property are also required to purchase and maintain flood 
insurance on the property as a condition for receiving future disaster 
assistance. The 2014 Act permits residential policyholders to forgo 
coverage for detached structures that do not serve as residences. 
[Footnote 10] 

NFIP Building Requirements for SFHAs: 

The 1973 Act also added certain requirements that, according to FEMA 
officials, were intended to encourage community participation in NFIP. 
Specifically, communities are required to adopt and agree to enforce 
adequate floodplain management regulations as a condition of 
participation in NFIP. In exchange, flood insurance and certain 
federal disaster assistance will be made available to property owners 
in the community. Community ordinances or regulations must be 
consistent with NFIP's minimum regulatory requirements, although 
communities may exceed the minimum criteria by adopting more 
comprehensive regulations. The following are some of the key NFIP 
building requirements and alternatives for new and substantially 
improved or substantially damaged structures located in riverine 
SFHAs.[Footnote 11] 

* Elevation. All new and substantially improved or substantially 
damaged structures must be elevated to or above the base flood 
elevation (BFE). The BFE is the projected level that flood water is 
expected to reach or exceed during a flood with an estimated 1 percent 
chance of occurring in any given year. The flood depth--height at 
which structures should be built--is calculated by the difference 
between the BFE and ground elevations that is established by 
topographic surveys. 

* Dry flood-proofing. Nonresidential structures, including 
agricultural structures, may be flood-proofed instead of elevated. 
Nonresidential structures that are dry flood-proofed are designed to 
be watertight below the BFE.[Footnote 12] 

* Wet flood-proofing. FEMA also has guidance to allow communities to 
grant some categories of nonresidential structures, including certain 
agricultural structures, an exception from the requirement that 
certain structures be elevated or dry flood-proofed. This variance 
enables certain structures to be wet flood-proofed--applying permanent 
or contingent measures to a structure and/or its contents that prevent 
or provide resistance to damage from flooding by allowing flood waters 
to enter the structure. FEMA has instructed communities that variances 
may be issued for certain types of agricultural structures located in 
wide, expansive floodplains that are used solely for agricultural 
purposes, such as storage, harvesting, or drying. These types of 
structures include grain bins, corn cribs, general purpose barns open 
on at least one side, and buildings that store farm machinery and 
equipment. 

Rate Setting for NFIP Premiums: 

FEMA bases premium rates for NFIP policies on a property's risk of 
flooding and several other factors. Specifically, FEMA uses location 
and property characteristics, such as flood zone designation, 
elevation of the property relative to the property's BFE, building 
type (e.g., residential or nonresidential), number of floors, presence 
of a basement, and the year of construction relative to the year of a 
community's original flood map.[Footnote 13] Additionally, FEMA uses 
data on prior claims, coverage amount, and policy deductible amount. 

NFIP has historically had two types of flood insurance premium rates: 
those that reflect the full risk of flooding to a property (full-risk 
rates) and those that do not. Properties that have not been charged 
property-specific full-risk rates have included those with 
grandfathered and subsidized rates.[Footnote 14] The largest number of 
subsidized policies has been for properties built before the initial 
flood insurance rate maps became available.[Footnote 15] The authority 
for subsidized rates was included in the National Flood Insurance Act 
of 1968 as an incentive to encourage participation in the program. 

In July 2012, Congress enacted the Biggert-Waters Act, which made 
significant changes to FEMA's ability to charge subsidized rates. 
These changes phased out existing subsidies for certain types of 
properties through 25 percent annual premium increases until the full-
risk rate is reached, including business properties, residential 
properties that are not a primary residence, properties that have 
experienced or sustained substantial damage exceeding 50 percent of 
fair market value or substantial improvement exceeding 30 percent of 
fair market value, and severe repetitive loss properties.[Footnote 16] 
For other properties, the Biggert-Waters Act raised the cap on annual 
premium rate increases from 10 percent to 20 percent, by risk class. 
The Biggert-Waters Act also prohibited subsidies from being extended 
for homes sold to new owners and removed them if properties were not 
covered or had a lapse in coverage after the date of enactment of the 
act as a result of the policyholders' deliberate choice. However, the 
2014 Act reinstated premium subsidies for properties that were 
purchased after July 6, 2012, and properties not insured as of July 6, 
2012. It also generally limited annual increases in property-specific 
premium rates to 18 percent for policies not covered by the 25-percent 
increases by the Biggert-Waters Act, although it changed the 
substantial improvement threshold to 50 percent from the Biggert-
Waters Act's 30 percent.[Footnote 17] The 2014 Act does not remove the 
phase out for policies covering nonprimary residences, severe 
repetitive loss properties, and business properties, among others. 

The Biggert-Waters Act also generally prohibited the grandfathering of 
rates after future remapping and required any rate increases stemming 
from future remapping to be phased in over time. However, the 2014 Act 
eliminated the Biggert-Waters Act's changes to grandfathering 
provisions, but included a provision which may prohibit grandfathering 
in limited situations.[Footnote 18] 

Flood Zone Mapping: 

FEMA creates maps that show the degree of flood hazard so that 
properties in participating communities can be assigned actuarial 
premium rates--that is, rates that reflect the full risk of flooding--
for insurance purposes. Flood maps, also show SFHAs for which 
communities must adopt and enforce building requirements as part of 
their NFIP participation. Lending institutions use flood maps to 
identify properties that are required to have flood insurance and to 
help ensure that the owners buy and maintain it. FEMA engineers create 
flood maps using statistical information such as data for river flow, 
storm tides, hydrologic/hydraulic analyses, and rainfall and 
topographic surveys.[Footnote 19] The results of the topographic and 
flood hazard analyses are combined and integrated into digital maps 
that depict floodplain boundaries and the projected height of the base 
flood--the flood level that has a 1 percent chance of being equaled or 
exceeded in any given year.[Footnote 20] 

NFIP establishes flood zone designations through its mapping process 
(see table 1). Areas designated as A, AE, V, or VE zones have a high 
risk of flooding and are considered SFHAs. Areas designated as V or VE 
zones are located along the coast and have an additional hazard 
associated with storm waves. Areas with a moderate to low risk of 
flooding are designated as B, C, or X zones. Areas where flood risk is 
possible but undetermined are designated as D zones. For the purpose 
of our study, we are considering areas with flood zone designations 
beginning with an A to be high-risk riverine floodplains. 

Table 1: National Flood Insurance Program Flood Zone Designations: 

Flood zone designation: B, C, X; 
Risk level: Moderate to low risk. 

Flood zone designation: A, AE; 
Risk level: High-risk. 

Flood zone designation: V, VE; 
Risk level: High-risk coastal. 

Flood zone designation: D; 
Risk level: Undetermined risk. 

Source: FEMA. GAO-14-583. 

[End of table] 

FEMA is required by statute to assess the need to revise and update 
all floodplain areas and flood risk zones at least every 5 years. The 
agency has undertaken two initiatives to update and modernize its 
flood maps. Until 2003, flood maps were created and stored in paper 
format. From 2003 to 2008, FEMA spent $1.2 billion to upgrade the 
nation's flood maps to digital format as part of the Map Modernization 
initiative. Through this program, FEMA created digital flood maps for 
more than 92 percent of the population.[Footnote 21] In fiscal year 
2009, FEMA began a 5-year initiative--Risk MAP--to improve the quality 
of data used in flood mapping. FEMA's goals for the initiative include 
addressing gaps in flood hazard data; increasing public awareness of 
risk; and supporting mitigation planning by state, local, and tribal 
entities. 

Risk MAP's primary areas of focus are coastal flood hazard areas, 
areas affected by levees, and significant riverine flood hazards. Risk 
MAP received $325 million in appropriations in fiscal year 2009, but 
appropriations have declined since, falling to about $216 million in 
fiscal year 2014. According to FEMA officials, FEMA prioritizes its 
mapping projects based on needs and risk and balances them with 
available funding. Need is determined by assessing current flood data 
and changes since the last update. Risk is assessed largely by 
population and the number of structures and their exposure to flood 
hazards. While rural and agricultural areas may have needs identified, 
they are generally low risk and thus may not be a high priority for 
map updates.[Footnote 22] According to FEMA officials, low-risk areas 
are more likely to receive approximated mapping studies than detailed 
mapping studies. Approximated mapping studies are not based on the 
same quality or quantity of data as are detailed studies. Maps made 
using approximated studies also do not show the BFE. This may require 
that communities or property owners in those areas obtain a BFE from 
local or state officials, developers, or other organizations. They may 
also develop their own BFE by hiring an engineer or surveyor or using 
guidance provided by FEMA, according to FEMA officials. 

Levees--man-made structures, usually earthen embankments, designed and 
constructed in accordance with sound engineering practices to contain, 
control, or divert the flow of water to provide protection from 
temporary flooding--are found in approximately 22 percent of U.S. 
counties (figure 1). Levees are important factors in mapping flood 
risk. Levees that are accredited by FEMA can result in a community 
being mapped in a flood zone with a lower risk than it would be 
without the accredited levee.[Footnote 23] In order to have a levee 
accredited, the owners or community officials must demonstrate that 
the levee system provides adequate flood protection and has been 
adequately maintained by submitting an engineering certification 
indicating that the levee complies with established criteria. If a 
levee receives accreditation, property owners in the area it protects 
may not be subject to the mandatory purchase requirement if the area 
is not mapped as an SFHA. In some cases, areas behind accredited 
levees are still prone to flooding due to a lack of interior drainage 
or flooding from other sources and will therefore still be mapped as 
an SFHA, resulting in the property owners behind that levee still 
being required to purchase flood insurance.[Footnote 24] 

Figure 1: Levee, Sutter County, California: 

[Refer to PDF for image: photograph] 

Source: GAO. GAO-14-583. 

[End of figure] 

Rural and Agricultural Areas Located in Riverine SFHAs: 

Because FEMA does not identify whether floodplains are in urban or 
rural areas for the purposes of administering NFIP, we used available 
data to estimate the location of rural communities and agricultural 
areas in riverine SFHAs. We defined rural areas as areas that are not 
considered urbanized areas or urban clusters using U.S. Census Bureau 
data. We defined agricultural areas as those counties with 50 percent 
or more of their land areas used in agriculture, according to USDA's 
Atlas of Rural and Small-Town America. Figure 2 shows the location of 
riverine SFHAs according to FEMA's flood map data in the areas we 
defined as agricultural areas and rural communities.[Footnote 25] 

Figure 2: Rural and Agricultural Riverine Special Flood Hazard Areas 
(SFHA): 

[Refer to PDF for image: illustrated U.S. map] 

Depicted: 

Rural and agricultural riverine Special Flood Hazard Areas (SFHA); 
Flood maps may contain SFHAs but data only in paper format. 

Source: FEMA flood map data and GAO analysis of Census and USDA data. 
GAO-14-583. 

Note: The grey areas on the map include both SFHAs and moderate-to low-
risk areas, but because the data are only in paper format, SFHAs could 
not be depicted. Therefore, the rural and agricultural riverine SFHAs 
on the map may be understated. The white areas on the map include 
urban areas, coastal areas, rural and agricultural areas of low-or 
moderate-risk, and unmapped areas. Also, because we considered 
counties as agricultural if 50 percent or more of their land area was 
used in farming, we may have captured some urban areas in the rural 
and agricultural SFHAs depicted on this map. 

[End of figure] 

Our analysis of FEMA data showed that the population mapped in rural 
and agricultural SFHAs stayed about the same during FEMA's Map 
Modernization initiative, though certain areas saw increases or 
decreases.[Footnote 26] Specifically, the population in rural and 
agricultural SFHAs increased by 0.11 percent through Map 
Modernization, while the population in urban SFHAs decreased by 0.8 
percent. 

Effects of NFIP Building Requirements Varied for Farmers in Selected 
Communities, but Additional Guidance May Help Those Adversely Affected: 

Based on interviews with floodplain management officials, farmers, and 
others in selected communities, the effects of NFIP's building 
requirements for agricultural structures have generally varied. To 
comply with these requirements, new or substantially improved 
nonresidential structures in high-risk areas must be elevated or dry 
flood-proofed. FEMA guidance issued in 1993 noted that communities 
could allow wet flood-proofing that permits water to flow through a 
structure, for some nonresidential structures, including certain types 
of agricultural structures located in vast, expansive floodplains. 
However, the agency acknowledged that the methods included in the 
guidance do not cover all of the different types of agricultural 
structures located in vast flood plains with deep flood depths and may 
not reflect the changes in the size and scale of farm operations in 
recent years. Without additional guidance from FEMA, farmers may face 
challenges in effectively complying with its building requirements. 

Effects of NFIP Building Requirements Varied, with Some Farmers Having 
Faced Difficulties Flood-Proofing Agricultural Structures: 

We found that the effects of NFIP building requirements varied in 
selected communities and the requirements negatively affected certain 
farmers who were located in vast floodplains with relatively deep 
flood depths. We selected eight geographically diverse locations in 
SFHA riverine floodplains in California, Louisiana, North Carolina, 
and North Dakota that supported crops or livestock requiring onsite 
agricultural structures.[Footnote 27] Representatives from FEMA, USDA, 
and national floodplain management and farm organizations told us that 
they were unaware of any farmers in these states or others that faced 
negative effects on their operations from the NFIP building 
requirements (e.g., elevation, dry flood-proofing, or wet flood-
proofing for certain nonresidential structures). State and local 
floodplain managers we spoke with from Louisiana, North Carolina, and 
North Dakota also said that they were not aware of any widespread 
concerns that farmers were having with NFIP's building requirements or 
of any negative effects the requirements might be having on 
agricultural expansion. Correspondingly, 12 farmers in the communities 
we selected concurred with these views and generally told us that they 
had not been adversely affected by NFIP building requirements. 

However, state and local floodplain managers we spoke with from 
California said that some farmers in their state had been negatively 
affected by the requirements. The California state floodplain manager 
told us that the affected farmers typically lived and operated in 
agricultural areas behind levee systems that trapped water and had 
deep flood depths--up to 15 feet in some areas, compared with 1 to 6 
feet in other states.[Footnote 28] The deep flood depths make it 
difficult for the farmers to build new structures in accordance with 
NFIP requirements because of the cost and complexity of elevating and 
dry or wet proofing the new structures. This challenge is especially 
difficult in several counties along the lower Sacramento River, 
including Sutter and Yolo Counties where building requirements had 
affected farmers' ability to expand or rebuild agricultural 
structures, according to the California state floodplain manager. In 
addition, representatives of an agricultural floodplain management 
group whose members are primarily from California's Central Valley 
said that farmers they represented were concerned about the financial 
and technical feasibility of elevating or flood-proofing some 
agricultural structures to meet NFIP's building requirements. The 11 
farmers we spoke to in these two communities shared these concerns and 
told us that they had experienced similar negative effects due to the 
NFIP building requirements. 

Two key factors may partly explain the differing views of farmers in 
California as compared to those in the other selected rural and 
agricultural communities regarding the effects of NFIP building 
requirements. First, SFHAs in the two California communities have 
greatly increased in size in recent years compared to the other 
communities (see figure 3). According to FEMA, the increase was mainly 
a result of areas behind unaccredited levees at risk of flooding being 
remapped into SFHAs. Second, the requirement to elevate or dry flood-
proof structures above the BFE is harder to meet in the California 
communities because the flood depth is up to 15 feet in certain areas, 
compared to the other selected communities in North Dakota and 
Louisiana whose flood depths range from 1 to 6 feet. 

Figure 3: Characteristics of Selected Agricultural Riverine 
Communities, May, 2014: 

[Refer to PDF for image: illustrated table] 

National Flood Insurance Program community: Sutter County, CA; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 34.7% (12/2/08); 
Change in percentage of land in SFHA after most recent map update: 
+79.7%; Main reason for SFHA change by type of update: Hydrology[A]; 
Hydraulics[B]; Levee analysis. 

National Flood Insurance Program community: Yolo County, CA; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 40.1% (5/16/12); 
Change in percentage of land in SFHA after most recent map update: 
+66.2%; 
Main reason for SFHA change by type of update: Levee analysis. 

National Flood Insurance Program community: Rapides Parish, LA; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 30.7% (6/2/99); 
Change in percentage of land in SFHA after most recent map update: No 
change; 
Main reason for SFHA change by type of update: No recent map update. 

National Flood Insurance Program community: St. Landry Parish, LA; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 56.6% (8/5/10); 
Change in percentage of land in SFHA after most recent map update: 
+3.1%; 
Main reason for SFHA change by type of update: Topography[C]. 

National Flood Insurance Program community: Duplin County, NC; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 14.2% (2/16/07); 
Change in percentage of land in SFHA after most recent map update: 
-10.5%; 
Main reason for SFHA change by type of update: Hydrology[A]; 
Hydraulics[B]; Topography[C]. 

National Flood Insurance Program community: Tyrrell County, NC; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 56.4% (9/19/07); 
Change in percentage of land in SFHA after most recent map update: 
-34.4%; 
Main reason for SFHA change by type of update: Hydrology[A]; 
Hydraulics[B]; Topography[C]. 

National Flood Insurance Program community: Cass County, ND; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 15.3% (7/13/12)[D]; 
Change in percentage of land in SFHA after most recent map update: 
+4.7%; 
Main reason for SFHA change by type of update: Hydrology[A]; 
Hydraulics[B]; Topography[C]. 

National Flood Insurance Program community: Walsh County, ND; 
Percentage of land in Special Flood Hazard Area (SFHA) (most recent 
map update): 16.6% (11/2/12); 
Change in percentage of land in SFHA after most recent map update: 
+21.2%; 
Main reason for SFHA change by type of update: Hydrology[A]; 
Hydraulics[B]; Topography[C]. 

Source: GAO summary of FEMA data. GAO-14-583. 

[A] According to FEMA, hydrology changes as houses are built, areas 
are paved, forests are logged, and other development occurs that 
allows more and faster runoff into streams and rivers. 

[B] Hydraulics change as culverts are added and replaced, bridges are 
added, streams are channelized, and other development occurs that 
changes the way the water flows through the flooding source. 

[C] Updated topography refers to changes in the elevation of the 
terrain. 

[End of figure] 

Farmers in Louisiana, North Carolina, and North Dakota generally have 
been able to expand their operations in areas outside of SFHAs. For 
example, local floodplain managers in Duplin and Tyrrell Counties 
(North Carolina) told us that huge livestock processing plants were 
usually built outside of SFHAs after Hurricane Floyd in 1999 destroyed 
millions of livestock in the state.[Footnote 29] Because of the severe 
damage from this hurricane, the state encouraged farmers to build 
their agricultural structures outside of SFHAs whenever possible. In 
addition, according to some farmers we spoke to in the selected 
Louisiana communities, at least a portion of their farmland was in non-
SFHA areas, and they built or expanded their agricultural structures 
in those areas. As a result, they were not required to comply with the 
NFIP building requirements because those structures were not built in 
SFHAs. Further, four farmers in the Louisiana communities told us that 
they generally built their agricultural structures at the highest 
points on their farms, areas that were outside the SFHA. 

In contrast, local floodplain managers from Sutter and Yolo Counties 
in California told us that these counties are surrounded by levees 
that were recently de-accredited, which resulted in a large increase 
of land in the counties to be remapped into SFHAs.[Footnote 30] They 
anticipated that more parts of their counties would be remapped into 
SFHAs as more levees were de-accredited. Some farmers in these 
counties that we contacted said that because their land had recently 
been remapped into SFHAs, they did not have much land outside of SFHAs 
on which to build structures that were not required to meet NFIP's 
building requirements. As a result, building or expanding structures 
on the land that is now in SFHAs would be costly and technically 
difficult. For example, one walnut farmer said that he could not 
afford to put a processing facility in an area outside of the SFHA 
because it was more urban, resulting in a higher cost and heavy 
traffic (in peak season, he has 20 to 30 trucks loading daily). He 
added that, even if he could afford to put a processing facility 
outside the SFHA, he could not process crops that far from the harvest 
area (which lay inside the SFHAs) because the walnuts could be damaged 
during transport. 

We also found that the California farmers from our selected 
communities experienced greater challenges in relation to elevating 
structures than farmers in other areas. Local floodplain managers from 
the selected communities in Louisiana, North Carolina, and North 
Dakota told us farmers in their communities typically needed to raise 
building foundations by just a few feet (which they were generally 
able to do by adding fill dirt) to meet the BFE requirements for 
structures built inside SFHAs.[Footnote 31] Farmers we spoke to also 
concurred with these views. For example, a farmer from Louisiana's St. 
Landry Parish who grows rice and soybeans and raises crawfish told us 
that although most of his structures were outside of the SFHA, he took 
precautionary steps to elevate them all--those outside it as well as 
those within it--by at least 2 feet based on his experience with 
regular flooding in the past and estimated future flooding trends. 
However, in both Sutter and Yolo Counties in California, the flood 
depths were relatively deeper (up to 15 feet in some areas). The 
Sutter County floodplain manager explained that elevating a structure 
3 or more feet could require a base, or building pad, that occupied 
much more square footage than the structure. It could require 
additional land to build a slope that was not too steep to allow 
access to the structure. A slope that was too steep could present an 
obstacle for truck and equipment movement, making it impractical to 
conduct business. Further, 7 farmers there told us that it was 
technically difficult and cost prohibitive to elevate structures to 
the required height. 

According to state and local floodplain managers and farmers we spoke 
with, farmers in Sutter and Yolo Counties who were subject to the NFIP 
building requirements were also facing challenges flood-proofing their 
new or substantially expanded agricultural structures to comply with 
NFIP building requirements. FEMA allows new, substantially improved, 
or substantially damaged nonresidential structures, including 
agricultural structures, to be dry flood-proofed (made watertight 
below the BFE). However, according to FEMA guidance, dry flood-
proofing is often feasible only when the flood depth is less than 
around 3 feet, because deeper flood depths produce pressure on 
structures that may crack the walls or cause them to collapse. In 
addition, a local floodplain manager and a farmer told us that, 
regardless of the flood depth, it would be difficult to dry flood-
proof structures used for rice and fruit drying because these 
buildings needed large openings for fan exhausts to dry the crops and 
prevent moisture from spoiling them (see figure 4). 

Figure 4: Rice Drying Structure, an Example of a Structure That Is 
Difficult to Dry Flood-proof because Openings Are Needed for Fan 
Exhaust (Sutter County, Calif.) 

[Refer to PDF for image: photograph] 

Depicted: 
Openings are needed for fan exhausts. 

Source: GAO. GAO-14-583. 

[End of figure] 

Guidance on Alternative Methods for Flood-Proofing Does Not Fully 
Address Risks in Vast, Deep Flood Depth Areas: 

FEMA has provided guidance on wet flood-proofing as an alternative to 
elevation and dry flood-proofing for certain nonresidential 
structures, including agricultural structures, but officials recognize 
that this guidance still may not be sufficient for assisting farmers 
in riverine floodplains with deep flood depths. Realizing the need to 
provide alternative methods to meet building requirements after a 
catastrophic flood in the Midwest in 1993, in the same year, FEMA 
issued guidance that allowed certain structures that cannot be 
elevated or dry flood-proofed to be wet flood-proofed, allowing water 
to flow through a building while minimizing damage to the structure 
and its contents.[Footnote 32] However, wet flood-proofing may not be 
viable for certain agricultural structures. For example, according to 
Sutter County's floodplain manager, USDA and the Food and Drug 
Administration have requirements for the water-tight storage of 
certain farm products, making wet flood-proofing not a viable option. 
The walnut farmer from Sutter County that we spoke to further 
explained that as a result of these requirements, he had to seal the 
structure to prevent cross-contamination of different crops, something 
that is important for allergy sufferers. Another farmer told us that 
if water could get into openings, so could pests that would damage 
crops. Further, crops such as rice would be ruined if moisture enters 
the structure. 

Furthermore, FEMA's current guidance does not take into account 
important changes to the agricultural industry that have occurred in 
recent years. According to FEMA and USDA officials, the agricultural 
industry has become more consolidated, which has greatly increased the 
size and scale of farm operations. For example, supporting 
agricultural structures are now much more expensive to build and 
replace and may represent unique challenges not envisioned in the 
existing guidance. Such changes in the agricultural industry 
underscore the need for FEMA to periodically update and provide 
additional guidance that reflects current conditions. 

The absence of current guidance on alternative methods has led some 
farmers to "work around" the building requirements. Six farmers we 
interviewed in Yolo and Sutter Counties in California told us that 
they worked around the building requirements while trying to expand 
their businesses. Two farmers in these communities told us that they 
had quickly built their facilities before flood map revisions placed 
their farms in SFHAs. A nursery farmer in Sutter County built a 
laboratory in an existing warehouse to avoid building a separate 
structure, although he lost the warehouse function. Three of the 
farmers said that instead of building new structures, they were 
careful to make incremental additions or repairs that were below 
NFIP's substantial improvement threshold.[Footnote 33] Two of the 
farmers also told us that, rather than building anything separately, 
they attached every expansion to an existing structure, thus 
sacrificing space for loading and unloading. Because it is costly, or, 
in certain circumstances, not technically feasible to comply with 
current NFIP building requirements, some farmers in our selected 
California communities were concerned about future expansion after 
recent map updates. Three farmers cited the importance of agriculture 
to the local economy and said that agriculture was the best use for 
floodplains.[Footnote 34] However, these workarounds may not fully 
address the long-term expansion needs of these farmers, and more 
importantly, the workarounds may ultimately defeat the purpose of the 
NFIP building requirements because they may increase the risks of 
flood damage to the structures. 

FEMA officials stated that it is their practice to update technical 
guidance as needed and recognized that the challenges some farmers 
faced in expanding or building agricultural structures in SFHAs might 
call for additional approaches for complying with NFIP building 
requirements. Officials explained that FEMA has not updated the 
guidance for wet flood-proofing in over 20 years because the agency 
thought the guidance covered the types of agricultural structures that 
could be feasibly wet flood-proofed. However, FEMA has identified the 
need for better ways to protect structures, especially in wide, 
expansive floodplains where flood depths may range from a few feet to 
20 feet or more in depth. In particular, FEMA officials said they 
would like to further evaluate the vulnerability of structures and 
their contents to flood hazards and identify how mitigation measures, 
such as elevation, dry and wet flood-proofing, and other measures 
could be used to minimize flood damage. FEMA also plans to solicit 
input from structure manufacturers and from farmers. 

FEMA officials told us that they intend to begin updating all 
technical bulletins, including the 1993 bulletin, in the next 18 
months; however, they are at a preliminary stage and have not yet 
identified resources for such a study or determined its scope and time 
frames for completion. In addition, FEMA officials told us that, 
although a recent statutory mandate in the 2014 Act for providing new 
guidelines on alternatives to elevation is specifically required for 
residential structures, they plan to issue broader guidance that could 
apply to nonresidential structures as well.[Footnote 35] 

Without updating and providing additional guidance, FEMA is missing an 
opportunity to help farmers who face challenges in effectively 
complying with its building requirements, especially if more 
agricultural production areas are remapped into SFHAs. Such guidance 
may not only be needed by farmers in the selected communities in 
California that we reviewed, but also in other similar agricultural 
areas across the country. Specifically, FEMA officials noted that 
there are other agricultural areas in vast riverine floodplains with 
deep flood depths across the country--some up to 37 feet--including 
Southwest Illinois, Northeast Arkansas, Southwest Mississippi, 
Southeast North Carolina, and Northwestern Missouri. 

Building Requirements Have Had Other Negative Effects on Rural 
Communities: 

Some stakeholders from selected communities stated that NFIP's 
building requirements in SFHAs could contribute to the long-term 
economic decline of some small towns in rural areas. The local 
floodplain manager from Yolo County told us that in addition to 
difficulties in building and expanding agricultural structures, demand 
for farm worker housing is strong, and the requirement that new or 
substantially improved homes be elevated up to or above the BFE, which 
can be up to 15 feet, adds significantly to the already high price of 
housing. The floodplain manager stated that NFIP building restrictions 
that make it infeasible to build or expand agricultural structures, 
including farm worker housing, could reduce both the tax base and the 
economic stability of the county by driving agricultural businesses 
elsewhere. However, according to FEMA, the current building 
requirements are effective in reducing flood-related damage and the 
loss of life because of specific requirements, such as elevation. 
Further, according to FEMA, properties that adhere to building 
requirements sustain less damage and as a result, may have lower 
insurance premiums, which in turn could make insurance rates more 
affordable and attract broader participation in the program.[Footnote 
36] 

Farmers and rural residents we interviewed in Yolo County expressed 
similar concerns about the economic viability of their communities. 
For example, one farmer told us that a small nearby town that had been 
remapped into an SFHA would likely have trouble attracting viable 
businesses to keep the community thriving, because the building 
restrictions meant that businesses could only take over existing 
structures. Some residents of Yolo County also told us their fire 
station needed a new roof, which would have been considered a 
substantial improvement because its cost would have exceeded 50 
percent of what the building was worth. However, according to the 
residents, the county had not allowed permits for any new buildings or 
substantial improvements to existing buildings since the 2012 map 
update because FEMA had not designated the BFE for the community. For 
these reasons, and because undertaking a substantial improvement would 
have meant elevating or dry flood-proofing the fire station, the town 
had to do minimal repairs, keeping the costs under the substantial 
improvements threshold. 

Mandatory Purchase Requirements and Premium Changes Have Affected 
Rural Residents More Than Farmers: 

The mandatory purchase requirement and premium changes resulting from 
remapping and the elimination of subsidies and grandfathered rates 
appear to have affected rural home markets more than they have farming 
operations. For example, some homes affected by these changes might 
have lost value and become harder to sell and some development has 
been halted according to some state and local floodplain managers, 
rural residents, and developers we spoke with. Further, farmers often 
did not need to buy flood insurance on some structures because they 
were able to provide their own financing or take other measures, such 
as obtaining a loan only on land without structures. 

Mandatory Purchase Requirement's Effect on the Residential Home Market: 

The mandatory purchase requirement and potential premium rate 
increases associated with recent map updates and, in some cases, 
legislative changes to NFIP, are likely to affect the residential real 
estate markets in rural areas more than the farming operations in 
those same areas, according to state floodplain managers and other 
stakeholders in our selected communities.[Footnote 37] Representatives 
from national farm organizations were unaware of any effects of the 
mandatory purchase requirement on farmers; and local floodplain 
managers, agricultural lenders, and 12 farmers we spoke with in the 
selected communities generally agreed that mandatory purchase 
requirements had not affected agricultural land values. 

However, all of the state floodplain managers with whom we spoke had 
heard concerns about the effects on the rural residential real estate 
market of increased rates resulting from the elimination of some 
subsidies and grandfathering provisions. In addition, some local 
floodplain managers, agricultural lenders, and five farmers we spoke 
with expect that being mapped into an SFHA would have a negative 
impact on the value of residential housing in certain communities 
either now or in the future. For instance, one agricultural lender in 
both selected communities in Louisiana said that being mapped into an 
SFHA would decrease the value of residential homes on the market in 
rural communities because of the increased cost of flood insurance 
premiums. Also, a resident with whom we spoke who lived in a rural 
part of Louisiana's Rapides Parish said that being mapped into an SFHA 
had reduced the value of his house and made it more difficult to sell, 
because prospective buyers would see it as prone to flooding. 
Similarly, in Walsh County, North Dakota, three residents told us that 
the requirement to buy flood insurance and the rate increases seen in 
their community after the SFHA was expanded in a 2012 map update had 
nearly halted the residential real estate market in their community. 
One resident said that he had tried to move but could not, because 
potential buyers walked away when they realized his home was in an 
SFHA. 

Some concerns were also raised about the overall affordability of NFIP 
insurance for homeowners mapped into SFHAs. Representatives of the 
Property Casualty Insurers Association of America told us that 
remapping would likely cause some affordability concerns as more areas 
were moved into high-risk zones. However, they noted that remapping 
would likely not impact residents of rural areas any differently than 
it would remapped residents in urban areas. Similarly, two residents 
of Walsh County, North Dakota, told us that the rate increases 
associated with their recent map change had made it hard for them to 
now afford to live in their homes. Concerns were also raised about the 
affordability of insurance premiums and the impact on the housing 
market once the phasing out of subsidized rates established in the 
Biggert-Waters Act and the elimination of grandfathering provisions 
began, but some of these concerns may no longer be relevant, because 
the 2014 Act amended sections of the Biggert-Waters Act that would 
have resulted in rate increases for some residential policyholders. 

At the same time, local floodplain managers and residents of some 
selected communities said that NFIP insurance requirements associated 
with being in an SFHA could lead to positive outcomes for rural towns, 
including more mitigation actions and less development in the 
floodplain. For instance, the local floodplain manager of Duplin 
County, North Carolina, said that the few homeowners in the SFHA who 
had not elevated their homes would probably choose to do so, since 
mitigation actions could lower premium rates. Similarly, a resident of 
Walsh County, North Dakota who was concerned about rate increases 
after being mapped into an SFHA, said that he and some of his 
neighbors had already elevated their homes above the BFE or were 
considering elevating them. In addition, the local floodplain managers 
from Sutter County, California, and Duplin County, North Carolina, 
both stated that inhibiting development in SFHAs could help manage the 
adverse impacts of floods and help meet one of FEMA's goals of 
mitigation. We heard about areas in most of our selected communities 
where development had begun prior to a map update but was halted when 
the areas were remapped into SFHAs. For example, in Yolo County, 
California, and St. Landry Parish, Louisiana, we visited developments 
that had been partially built before being remapped into SFHAs. The 
developers in both areas said that the elevation requirements and 
probable decline in the value of the homes because of the flood 
insurance requirements would make further development economically 
infeasible. In both cases, the developers were not sure what would 
happen to the undeveloped land. We also heard from local floodplain 
managers in Duplin County, North Carolina, and Yolo and Sutter 
Counties in California that being mapped into an SFHA had halted 
development in parts of their counties. 

While the lack of development in SFHAs may be beneficial for 
floodplain management, the local floodplain managers and other 
stakeholders in Yolo and Sutter Counties in California noted the 
possible negative effects of being remapped into SFHAs--including 
changes in building requirements and insurance costs--on residents of 
small rural towns. As with building requirements, members of the 
selected communities said that insurance costs associated with being 
remapped into an SFHA could contribute to the long-term economic 
decline of some small towns. For instance, the local floodplain 
manager in Yolo County, California, told us that the town with the 
unfinished development that we discussed previously would probably 
enter a long, slow decline, in part because of recent changes in 
building requirements and insurance costs resulting from being 
remapped into an SFHA. He added that not only was it no longer 
economically feasible to develop certain areas within the town's 
borders, but also most of the town's inhabitants were farm workers who 
could not afford flood insurance for their houses. However, he said 
that NFIP requirements were only one factor that was impacting the 
economic future of this town. In addition, he noted that changes to 
building requirements and insurance costs resulting from being 
remapped into an SFHA would not impact all small towns in the same way 
and that other towns in the community would prosper despite being 
remapped into SFHAs. An agricultural lender we spoke with in Yolo 
County agreed that being remapped into SFHAs could have long-term 
economic impacts on rural towns that depended on the agricultural 
economy, because farm businesses that were already operating on thin 
profit margins could be hurt by the additional cost of flood 
insurance. This is because farmers must accept the market price for 
their crops, and therefore it may be difficult to pass the price of 
flood insurance on to their customers, according to one farmer and one 
lender we spoke with in California. In addition, the local floodplain 
manager in Sutter County said that some small businesses that 
supported agriculture, such as a local tractor dealership, had already 
seen premium rate increases due to the Biggert-Waters Act eliminating 
their subsidies. He believed that some of these small businesses would 
have to close because they would not be able to afford the full-risk 
rates for business structures. 

Many Farmers May Not Be Required to Buy Flood Insurance: 

Like NFIP's building requirements, the mandatory purchase requirement 
and changes in flood insurance premiums have had limited effects on 
farmers we spoke to in the selected communities, except some in 
California. Many of those we spoke with--including FEMA and USDA 
officials, representatives of national farming organizations and a 
floodplain management organization, all state floodplain managers, and 
one insurance industry organization--were not aware of farm businesses 
that had been adversely impacted by flood insurance costs. However, 
representatives of an agricultural floodplain management group, whose 
members were primarily from California's Central Valley, said that its 
members were concerned that the cost of flood insurance on their 
structures in areas that had recently been remapped into SFHAs could 
make their businesses unsustainable. For example, according to a rice 
farmer in California, recent mapping updates placed his structures in 
an SFHA, raising his flood insurance premiums substantially. He said 
that his flood insurance premiums were now his third largest 
production expense. Three farmers in Yolo and Sutter Counties and the 
local floodplain manager in Sutter County were also concerned about 
rate increases they expected in the next year as NFIP moved toward 
full-risk rates.[Footnote 38] However, six farmers we spoke with in 
the California communities told us that their flood insurance premiums 
were a very small portion of their total production cost. In addition, 
some of the farmers from these communities chose to purchase flood 
insurance even though they were not required to do so and considered 
it another cost of doing business. 

According to state floodplain managers for most of the selected 
communities, many farmers were not required to insure their 
structures, for varying reasons. For instance, 

* In the two Louisiana communities we reviewed, all but one of the 
farmers with whom we spoke had farm structures only on parts of their 
land that lay outside SFHAs. None of these farmers voluntarily 
purchased flood insurance on these structures. 

* In North Carolina, the floodplain manager said that many farms in 
the state were sponsored by large corporations that funded the 
construction of any necessary structures, and as a result farmers did 
not need loans that might include a mandatory purchase requirement. 

In contrast, the floodplain manager from California said that 
institutions that provided loans to farmers for structures, such as 
rice or prune dryers, might require flood insurance as a condition of 
the loan, even if they were not required to do so. 

Farmers may also take measures to avoid the requirement to buy flood 
insurance on their farm structures, although some of these measures 
may limit their ability to expand their business. The North Dakota 
floodplain manager and an agricultural lender from North Dakota stated 
that farmers often found ways to avoid the mandatory purchase 
requirement by, for instance, not pledging their structures as 
collateral for a loan. In addition, according to some agricultural 
lenders, local floodplain managers, and farmers in the selected 
communities, farmers might take other steps. For instance, 

* Farmers may divide their land into separate parcels before they 
apply for a loan so that they can apply for a loan only on parcels 
that do not have any structures.[Footnote 39] A farmer in Sutter 
County, California, who had used this method to avoid buying flood 
insurance noted that it limited his options for receiving financing 
for his business, because he could not seek as much financing as he 
could if he chose to use all of his land as collateral. 

* Farmers may tear down old structures or remove walls from them so 
that NFIP no longer considers them "insurable."[Footnote 40] 

* Farmers may fund business changes with cash rather than with loans 
on land with structures. One farmer we spoke with in Yolo County 
delayed planting a new crop because he lacked the cash to do so and 
did not want to take out a loan because he would have had to purchase 
flood insurance. He said that he expected it would take him 2 years to 
raise the needed money. 

Also, almost all (five of six) of the agricultural lenders with whom 
we spoke had concerns about requiring farmers to purchase flood 
insurance on farm structures that had little or no value, such as 
dilapidated sheds or chicken coops.[Footnote 41] These lenders told us 
that this issue was their most significant concern in implementing the 
mandatory purchase requirement for farm loans. These structures often 
provide little to no economic value to farmers, and lenders said that 
they would not require insurance on them in the absence of the 
mandatory purchase requirement because they did not need to use the 
structures as collateral. Two of the lenders told us that they had 
lost business because of this requirement. Further, one lender told us 
that it was difficult to determine the replacement value of a building 
that the appraiser valued at zero or in some cases did not even 
include in the appraisal.[Footnote 42] One lender told us that in 
these situations their loan officers worked with the farmers to 
exclude the structures from the mortgage to avoid the mandatory 
purchase requirement. 

Options to Address Concerns about NFIP Requirements in Agricultural 
and Rural Areas Involve Trade-Offs and Risks: 

Local floodplain managers, farmers and lenders identified several 
options to help farmers located in SFHAs manage NFIP requirements for 
building new or substantially improved structures and lowering the 
cost of NFIP insurance. The most commonly cited option involved 
exempting agricultural structures from NFIP building requirements and 
the mandatory purchase requirement. Other options included charging 
insurance premiums based on an area's historical flood losses, 
accounting for some level of protection by certain unaccredited 
levees, providing need-based assistance to farmers and rural 
residents, and increasing funding for mitigation efforts. However, 
FEMA officials, experts from national floodplain management and city 
and regional planning organizations, and academics told us that many 
of these options carried risks and may run counter to the NFIP 
objectives. 

Exempt Agricultural Structures. The most commonly cited option from 
farmers and local lenders, mainly from California and Louisiana, 
involved exempting new agricultural structures and those that needed 
substantial improvements from NFIP building requirements and the 
mandatory purchase requirement. Legislation has been proposed to amend 
NFIP to include relaxing NFIP requirements for some agricultural 
structures, including the Agricultural Structures Building Act of 
2013, which aims to allow farmers to repair, expand, and construct 
agricultural structures without elevation in SFHAs.[Footnote 43] In 
addition, one group has advocated the creation of a separate 
agricultural zone that would not require expensive elevation and dry 
flood-proofing but would require wet flood-proofing of certain 
structures. Some farmers from Sutter and Yolo Counties in California 
told us that they did not believe that the flood risk for their areas 
was high, since these counties have not experienced a major flood 
since the 1950s. The farmers have said that they would be willing to 
assume all risks and opt out of federal disaster relief if they could 
expand and construct buildings without being required to follow NFIP 
building requirements. 

However, experts from national floodplain management organizations and 
academics told us that such exemptions were counter to the objectives 
of NFIP and carried significant risks. For example, one expert 
indicated that it might be difficult to differentiate agricultural 
structures from other nonresidential structures that may also store 
agricultural products (e.g., a corner store or a large industrial 
facility that may also store grain in an adjacent warehouse). He said 
that the tendency would be to classify any structures that could be 
remotely related to agriculture as agricultural structures. Further, 
experts we spoke to indicated that such an exemption could set a 
precedent, leading others to ask for similar exemptions. 

FEMA officials shared these views, adding that FEMA had no legal 
authority to allow farmers or any other specific population group to 
opt out of disaster relief. According to FEMA officials, allowing 
farmers to assume all risks and not receive disaster relief would 
require further legislative changes to the Stafford Disaster Relief 
and Emergency Assistance Act.[Footnote 44] Furthermore, one of the 
primary goals of FEMA's building requirements is to help reduce flood-
related property damage. Complying with FEMA's building requirements 
would reduce flood-related losses and lower insurance premiums for 
compliant structures, according to FEMA officials. They added that 
this reduction in turn may help attract broader participation in the 
program. Exempting structures may defeat this goal and encourage 
farmers to build noncompliant structures in high-risk areas that may 
inadvertently cause damage to nearby communities, according to 
officials. For example, agricultural structures that do not adhere to 
building requirements--that is, that are not elevated or flood-
proofed--could be washed downstream, creating blockages that could 
cause additional flooding in communities there. Both FEMA and the 
experts told us that while farmers might view their choices as 
affecting only themselves, flood mitigation needed to be considered 
holistically from the perspective of risks to the larger community. 
Further, experts indicated that exempting structures may reinforce 
farmers' potential misperceptions of their flood risks. 

Charge Insurance Premiums Based on Historical Losses to Flooding. Some 
farmers, rural residents, state and local floodplain managers, and 
other organizations have suggested creating a variable premium rate 
structure based on historical flood risks in different areas. For 
example, some farmers from California told us that they should pay 
lower flood insurance premiums than others residing in areas that the 
farmers consider to be more flood-prone areas, such as coastal areas, 
as these farmers had not experienced flooding since the 1950s and did 
not perceive their flood risks as significant. However, according to 
FEMA the premium rates are determined by flood zone, among other 
factors, and policyholders in high-risk coastal areas (V zones) 
already pay higher rates than policy holders in other zones. Further, 
FEMA stated that flood maps already account for historical floods, in 
addition to other factors. According to the national floodplain 
management expert we spoke with, some states that had so far collected 
less in claims from NFIP than other states might welcome this option. 
[Footnote 45] But they also noted that people tended to underestimate 
their long-term flood risks.[Footnote 46] 

Exempt Low-Value Agricultural Structures. As mentioned earlier, 
lenders from four of the selected communities suggested giving them 
the flexibility to decide whether a farmer needed flood insurance on 
low-value agricultural structures. Some lenders told us that they did 
not need to use the low-value structures as collateral. Experts 
indicated that this option could be further explored, provided that 
independent third parties appraised the structures and confirmed their 
values. FEMA officials also noted that federal financial regulators, 
not the agency, set the standards for insurance requirements for low-
value structures and that FEMA did not have the authority to dictate 
to lenders what they could do. According to FEMA, in some instances 
lenders may require insurance even though it may not be required under 
the law. Therefore, farmers may face the prospect of paying for flood 
insurance coverage on properties that have low value. 

Account for Some Protection Provided by Unaccredited Levees. According 
to a floodplain manager from Sutter County, California, and others, 
unaccredited levees still provide some protection and insurance 
premiums should reflect this fact. The experts we spoke with said that 
this option would help adjust insurance rates and provide more 
flexibility for policyholders in adhering to NFIP building 
requirements and mandatory purchase requirements. FEMA recognizes that 
unaccredited levee systems may still provide some measure of 
protection against flooding and has developed Levee Analysis and 
Mapping Procedures (LAMP) to account more precisely for the level of 
protection levees provide when mapping flood risk.[Footnote 47] LAMP's 
goal is not to reduce insurance rates but to use the best scientific 
methodologies to more accurately determine flood risks and help ensure 
that premiums are based on the most accurate determination of flood 
risk. For example, LAMP may determine that an area around the levee 
should be in zone D (a non-SFHA area with undetermined risks). The 
levee may still technically not be accredited, but structures located 
in zone D have no mandatory purchase requirement or building 
requirements because it is not considered as SFHA. Policyholders in 
this zone would not be required by law to purchase insurance, but FEMA 
strongly advises that they do. However, some experts said that 
determining the safety of levees was difficult. FEMA officials noted 
that while LAMP allowed for a more detailed analysis of unaccredited 
levees, this analysis might not always result in lower BFEs, smaller 
SFHAs, or reduced NFIP premiums. FEMA and other experts emphasized 
that levees were never 100 percent safe and that communities needed to 
acknowledge the possibility that any levee--including those that are 
accredited to provide protection for a 1 percent annual event--could 
fail. 

Provide Need-Based Assistance. Some farmers also cited need-based 
assistance as an option to help those who could not afford NFIP 
premiums to meet the insurance requirements. In general, stakeholders 
agreed that this option warranted further exploration, since flood 
insurance has been an affordability issue for many people. We have 
previously identified targeted assistance or subsidies based on 
financial need of policyholders as an option to consider to reduce the 
financial impact of subsidies on NFIP.[Footnote 48] However, FEMA 
officials pointed out that the agency currently does not have the 
statutory authority or resources to provide need-based and targeted 
assistance to help property owners with NFIP insurance premiums. As 
required by the Biggert-Waters Act and the 2014 Act, the National 
Academy of Sciences is studying the issue of affordability but has not 
yet produced its report.[Footnote 49] FEMA officials said that it 
would be premature to comment on how need-based assistance might 
operate. 

Increase Funding for Mitigation. State floodplain managers from 
California and Louisiana and a local floodplain manager from North 
Carolina advocated providing additional resources for mitigation 
efforts. According to FEMA, mitigation efforts lead to lower premium 
costs and more effectiveness against flood damage. However, the 
experts explained that some local communities, especially rural ones, 
lacked the expertise and administrative capabilities to apply for and 
administer grants for mitigation activities.[Footnote 50] Furthermore, 
not all communities are aware of these mitigation programs. FEMA 
officials added that they currently received applications requesting 
three to four times the available funding, as the program was 
oversubscribed. In addition, the applications are reviewed at the 
state level, and state officials generally give priority to areas with 
critical facilities such as power plants and hospitals and to large 
communities with high population densities, according to FEMA 
officials.[Footnote 51] The officials indicated that in general, 
agricultural areas and rural communities may be unlikely to meet these 
criteria and thus may have difficulty obtaining mitigation funding. 

Conclusion: 

A number of rural and agricultural areas have recently been mapped 
into SFHAs. Farmers with new or substantially improved structures in 
these areas must now comply with NFIP building requirements, and 
farmers in some locales--specifically counties that we visited in 
California--face challenges meeting them. Based on information from 
FEMA, complying with NFIP's building requirements may be a broader 
problem applicable to agricultural communities that have vast 
floodplains with deep flood depths similar to those in California. The 
two options of complying with the program's building requirements--
elevating and dry flood-proofing--are not always feasible for certain 
structures in these types of locations. For example, farmers in areas 
with deep flood depths cannot realistically elevate large structures 
to meet FEMA requirements and may not be able to dry flood-proof all 
structures. With regard to wet flood-proofing for some nonresidential 
structures, including certain agricultural structures, FEMA last 
updated its guidance for granting such variances in 1993. Although 
FEMA typically updates guidance as needed and acknowledges the 
challenges some farmers face, it has not updated its guidance with 
alternatives for complying with building requirements in over 20 
years, or expanded it to reflect changes in the agricultural industry. 
Updated and detailed guidance that provides alternative mitigation 
methods for protecting agricultural structures from flooding and takes 
into account relevant changes to the agricultural industry would be an 
important step in assisting farmers in identifying feasible 
alternatives to complying with building requirements in expansive 
floodplains with deep flood depths. 

Recommendation for Executive Action: 

As FEMA determines the scope of its efforts to revise its existing 
guidance, we recommend that the Secretary of the Department of 
Homeland Security (DHS) direct the Administrator of FEMA to update 
existing guidance to include additional information on and options for 
mitigating the risk of flood damage to agricultural structures to 
reflect recent farming developments and structural needs in vast and 
deep floodplains. 

Agency Comments: 

We provided a draft of this report to the Department of Homeland 
Security (DHS) for its review and comment. DHS provided written 
comments that are presented in appendix IV. In its comments, DHS 
concurred with our recommendation to update existing guidance to 
include additional information on and options for mitigating the risk 
of flood damage to agricultural structures to reflect recent farming 
developments and structural needs in vast, deep floodplains. In 
particular, the letter noted that FEMA recognizes that agriculture is 
a good use of the floodplain. Further, changes in the agricultural 
industry and the diversity of agricultural structures are important to 
recognize in future guidance. FEMA stated that it is working to 
determine the best approach to update its guidance, but has not yet 
determined a completion date. FEMA also provided technical comments, 
which we incorporated, as appropriate. 

As agreed with your offices, unless you publicly release the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to FEMA and other interested parties. In addition, the report is 
available at no charge on the GAO website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-8678 or garciadiazd@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. Key contributors to this report 
are listed in appendix V. 

Signed by: 

Daniel Garcia-Diaz: 
Director, Financial Markets and Community Investment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This report discusses (1) the effects on farmers and rural residents 
of the National Flood Insurance Program's (NFIP) building requirements 
for agricultural and residential structures, (2) the effects of the 
mandatory purchase requirement and changes in premium rates, and (3) 
options that have been proposed to address any issues resulting from 
changes to NFIP requirements and stakeholders' views on these 
proposals. We focused our review on riverine rural and agricultural 
floodplains and excluded coastal areas.[Footnote 52] 

For all objectives, we analyzed relevant laws, as well as Federal 
Emergency Management Agency (FEMA) regulations and policies, including 
building requirements for properties located in special flood hazard 
areas (SFHA), flood mapping modernization efforts, and the analysis 
and mapping procedures for unaccredited levees.[Footnote 53] We 
analyzed statutory requirements such as the mandatory purchase 
requirement for properties located in SFHAs. We reviewed the Biggert-
Waters Flood Insurance Reform Act of 2012 (the Biggert-Waters Act), 
including provisions to phase out some premium subsidies.[Footnote 54] 
We also reviewed provisions of the Homeowner Flood Insurance 
Affordability Act of 2014 (2014 Act) that repealed or altered portions 
of the Biggert-Waters Act.[Footnote 55] We identified and reviewed 
research on the effects of NFIP requirements on farmers and rural 
residents. 

To obtain views on the effects of NFIP's building and insurance 
requirements on farmers and rural residents, we met with a number of 
stakeholders. These included federal officials, representatives of 
national farming organizations (i.e., American Farm Bureau Federation, 
Association of State Departments of Agriculture, National Farmers 
Union, and American Farmland Trust), and national floodplain and city 
and regional planning organizations (i.e., American Planning 
Association, Association of State Floodplain Managers, and National 
Association of Flood & Stormwater Management Agencies). We interviewed 
academics in the areas of floodplain management, officials from FEMA's 
Mapping, Insurance, Building Science and Flood Management Branches, 
and officials from Department of Agriculture's (USDA) Economic 
Research Service and Rural Development branches. In addition, we 
interviewed representatives of Agricultural Floodplain Management 
Alliance (AFMA) members primarily in California, and the insurance 
industry. 

To identify the locations of rural and agricultural areas in SFHAs, we 
distinguished rural and agricultural land areas from urban land areas. 
FEMA does not make such a distinction for the purposes of 
administering NFIP. To make these distinctions, we first analyzed data 
from the U.S. Census Bureau (2010) and USDA's Atlas of Rural and Small 
Town America (2007) to determine the rural and agricultural areas 
within the United States. We defined rural areas as areas that were 
not considered urbanized areas or urban clusters using Census data and 
agricultural areas as counties where 50 percent or more of the land 
area was used for farming.[Footnote 56] We considered all other areas 
as urban (see figure 5). We reviewed information available online from 
the Census web site and the USDA web site on the data quality 
assurance processes for the data. We concluded that the Census and 
USDA data that we used were sufficiently reliable for purposes of 
using them as a base for this determination. 

Figure 5: Rural (2010), Agricultural (2007), and Urban Areas (2010): 

[Refer to PDF for image: illustrated U.S. map] 

Depicted areas: 
Agricultural or rural; 
Urban. 

Source: GAO (data); MapInfo (image). GAO-14-583. 

[End of figure] 

We provided FEMA the data on rural and agricultural areas described 
above. FEMA mapping specialists used the data we provided them and 
combined it with FEMA's flood map data. For the rural and agricultural 
areas with maps that had been converted to a digital format as of 
February 2014, FEMA mapped the SFHAs. For the rural and agricultural 
areas that had flood maps that had not yet been converted to digital 
format as of February 2014, FEMA showed these areas on the map. FEMA 
excluded areas with coastal flood zones from the map. 

To determine the number and percentage of policyholders located in 
rural and agricultural riverine SFHAs, we determined which ZIP codes 
were in the rural, agricultural, and urban areas. If 50 percent or 
more of land area of a ZIP code was within a rural or agricultural 
area, we considered it a rural or agricultural ZIP code. We analyzed 
FEMA's policy data as of September 30, 2013, (most recently available 
fiscal year-end data), to determine how many policies were zoned in an 
SFHA in the ZIP codes we deemed rural or agricultural using the method 
described above. We excluded policies with a coastal flood zone 
designation because the scope of this study was on riverine 
flooding.[Footnote 57] To determine the percentage of the population 
mapped into or out of SFHAs because of FEMA's Map Modernization 
initiative, we analyzed available FEMA data on the number of people 
that received a map change at the Census Block Group level under this 
initiative. We determined which Census Block Groups were in rural and 
agricultural ZIP codes and compared the number of people that received 
a change in SFHA designation in those Census Block Groups to 
population data from the 2010 Census, which was also provided by FEMA. 
We reviewed documentation on how the data were collected and 
interviewed a FEMA official on the usability of the data. We 
determined these data were sufficiently reliable for our purposes. 

To assess any effects of NFIP's building requirements and the 
mandatory purchase requirement on farmers and rural residents, we 
conducted case studies in eight selected NFIP communities. We selected 
these communities using the following criteria: 

* crop and livestock production requiring nonresidential farm 
structures or nearby on-farm processing (e.g., rice, corn, soybeans, 
cotton, sugar beets, hogs, chickens, and cattle (dairy)); 

* some agricultural land located in SFHAs that was prone to flooding; 
and: 

* geographic variations (e.g., East coast, West Cost, the South and 
the Midwest) of the riverine agricultural areas located in SFHAs 
across the country. 

We selected California, Louisiana, North Carolina, and North Dakota as 
key states. We then interviewed four state floodplain managers from 
each state to obtain their views on any effects NFIP building 
requirements and the mandatory purchase requirement have had or could 
have on farmers and rural residents. In addition, we solicited their 
input, as well as additional input from three state agricultural 
extension specialists in California, Louisiana, and North Carolina, in 
identifying two additional communities in their states that met our 
criteria. The eight selected communities were: Sutter County, 
California; Yolo County, California; Rapides County, Louisiana; St. 
Landry Country, Louisiana; Duplin County, North Carolina; Tyrrell 
County, North Carolina; Cass Country, North Dakota; and Walsh Country, 
North Dakota. 

We interviewed eight local floodplain managers and five agricultural 
extension service officials in the suggested communities to obtain 
their views on the effects of NFIP on farmers and rural residents. We 
also requested the help of the floodplain managers and extension 
personnel in identifying local farmers and rural residents with 
properties located in SFHAs. The local officials helped us identify a 
total of 24 farmers and 10 rural residents from the selected 
communities. Although we provided the officials with guidance for the 
characteristics of persons identified, we did not independently verify 
that all of our criteria were met and acknowledge that some selection 
bias may be present since we relied on local officials for selecting 
the farmers to participate in our study. We contacted the people 
identified for each community. We conducted structured interviews with 
all farmers and rural residents who had been remapped into SFHAs 
according to local officials and could provide first-hand perspectives 
on any challenges they faced in complying with NFIP's building 
requirements and the mandatory purchase requirement. We also discussed 
identified options to address these challenges. 

We spoke with some farmers and rural residents who had been remapped 
into SFHAs after their community's initial flood map had been 
established and some farmers and rural residents who were not 
currently mapped into an SFHA. We also spoke with six agricultural 
lenders about the effect insurance requirements had on farmers and 
rural residents and with two developers about the effects of the 
requirements on rural communities. We then summarized all interviews 
and analyzed them by category of questions: NFIP building 
requirements, the mandatory purchase requirement, effects on the 
community, and options to address these challenges. 

Table 2 shows, for each of the eight selected communities, the number 
of farmers and rural residents with whom we spoke and the major crops 
produced by those farmers. We could not obtain the same number of 
interviews in each community, because the local floodplain managers 
and agricultural extension specialists who provided referrals to 
people provided different numbers and types of contacts in each of the 
selected communities. In addition, the relationships between the local 
floodplain manager and the contacts sometimes differed, and in some 
cases a relationship may have affected our ability or inability to 
obtain an interview with that person. For example, some successful 
contacts served on community water management task forces with the 
local floodplain manager. 

Table 2: Selected Communities and the Number of Farmers, Rural 
Residents, Agricultural Lenders and Developers Interviewed: 

Selected NFIP community: Sutter County, CA; 
Number of farmers and production: 8; 
Produced walnuts, rice, root stock, prunes, plums, crop protectant, 
and fertilizer; 
Number of rural residents: None; 
Number of agricultural lenders/developers: 1 lender. 

Selected NFIP community: Yolo County, CA; 
Number of farmers and production: 4; 
Produced wine, wine grapes, alfalfa, wheat, tomatoes, walnuts, corn, 
and seed crops; 
Number of rural residents: 4; 
Number of agricultural lenders/developers: 1 lender/1 developer. 

Selected NFIP community: Rapides Parish, LA; 
Number of farmers and production: 3; 
Produced rice, crawfish, grain sorghum, wheat, corn, soybeans, and 
cotton; 
Number of rural residents: 2; 
Number of agricultural lenders/developers: 1 lender. 

Selected NFIP community: St. Landry Parish, LA; 
Number of farmers and production: 2; 
Produced rice, crawfish, soybeans, and wheat; 
Number of rural residents: None; 
Number of agricultural lenders/developers: 1 lender/1 developer. 

Selected NFIP community: Duplin County, NC; 
Number of farmers and production: 4; 
Produced hogs, chicken, corn, soybean, cotton, and wheat; 
Number of rural residents: None; 
Number of agricultural lenders/developers: [Empty]. 

Selected NFIP community: Tyrrell County, NC; 
Number of farmers and production: None; 
Number of rural residents: None; 
Number of agricultural lenders/developers: 1 lender. 

Selected NFIP community: Cass County, ND[A]; 
Number of farmers and production: 2; 
Produced corn, soybeans, and wheat; 
Number of rural residents: None; 
Number of agricultural lenders/developers: 1 lender. 

Selected NFIP community: Walsh County, ND; 
Number of farmers and production: 1; 
Produced spring wheat, corn, pinto beans, soybeans, sugar and beets; 
Number of rural residents: 4; 
Number of agricultural lenders/developers: [Empty]. 

Source: GAO. GAO-14-583. 

[A] Because the NFIP community consisting of the unincorporated parts 
of Cass County had not yet adopted a preliminary flood map that placed 
portions of the community in an SFHA, we spoke with two farmers from 
other NFIP communities in Cass County. 

[End of table] 

We visited California and Louisiana and interviewed the local farmers 
and residents. For the other two states (North Carolina and North 
Dakota), we interviewed the farmers and rural residents by telephone. 

The purpose of our extensive work in these selected communities was to 
illustrate and more fully understand farmers' and residents' 
experiences in dealing with NFIP's requirements. Our individual 
interviews were not designed to demonstrate the extent of an issue 
such as a survey might do and we determined that personal contact 
would prove more reliable in completing interviews with this rural 
population. In addition, through individual interviews we were able to 
obtain a more complete understanding of each person's perspective, the 
reasons for their opinions or attitudes on specific topics and their 
insights into concerns related to NFIP requirements, all of which 
would supplement the information provided by state and local NFIP 
officials. The combination of design, targeted research questions, 
multiple sources of information, the use of selected representative 
communities to address the research questions and systematic analyses 
all serve to support greater generalizability of our findings. 
Nevertheless, due to the differing nature of communities and their 
responses to the NFIP requirements, a possibility exists that had we 
selected different communities we might have found some different 
results. We believe that the patterns and consistency of our findings 
within and across our selected cases support the widespread 
applicability of our findings. 

To identify options to address any challenges farmers and rural 
residents faced in complying with NFIP's building requirements and the 
mandatory purchase requirement, we gathered suggestions from local 
NFIP administrators, local lenders, farmers, and rural residents that 
we met with during our case studies. We then asked experts from flood 
management and city and regional planning organizations, cognizant 
academics, and officials from FEMA to comment on the ideas that we 
gathered and summarized their views. 

To determine historical NFIP premium and claims amounts, we analyzed 
annual NFIP premium data for years 1994-1998 and 2000-2013, and the 
NFIP claims database as of September 30, 2013 (most recently available 
fiscal year-end data).[Footnote 58] We adjusted these premium and 
claim amounts for inflation to report them in constant 2014 dollars. 
We conducted electronic testing including checks for outliers and 
missing data. We also interviewed FEMA officials on the usability and 
reliability of the data and reviewed our past assessments of these 
data. We determined these data were sufficiently reliable for our 
purposes. We determined the premiums and claims attributable to rural 
and agricultural areas and to urban areas using the ZIP codes for 
rural, agricultural, and urban areas we found using the method 
described above. We used 2007 agricultural data and 2010 rural and 
urban data as the base years for determining whether a ZIP code area 
was rural, agricultural, or urban. As a result, we may under-represent 
the premiums and claims attributable to the rural and agricultural 
areas for earlier years because urban areas have tended to grow larger 
over time. Data were not available for 1999 and the years prior to 
1994 that would allow us to determine the premium amounts comparable 
to the premium amounts we reported for 1994 through 2013. FEMA told us 
that the available premium data for 1999 and years prior to 1994 was 
for all policies that had been in place during the year, as opposed to 
the policies in force at a specific point in time of each year. Using 
these data would have resulted in overstated premiums. Also, FEMA told 
us that in some of the earlier years ZIP codes were not reported 
consistently from the insurance companies. In some years, ZIP codes 
were not available at all (1978-1981, 1983, and 1992). 

[End of section] 

Appendix II: Analysis of National Flood Insurance Program (NFIP) 
Premiums and Claims, Rural and Agricultural and Urban: 

We analyzed FEMA data on National Flood Insurance Program (NFIP) 
premiums and claims from 1994 through 2013 (except 1999) to determine 
the claims paid to and the premiums taken-in by FEMA from rural and 
agricultural riverine areas and urban riverine areas.[Footnote 59] We 
also analyzed the total premiums and claims for rural and agricultural 
areas and urban areas on a state-by-state basis for this time period. 

Overall, our analysis of premiums and claims indicates that in both 
rural and agricultural and urban areas nationwide, policyholders have 
historically received more in claims than they have paid in premiums. 
However, flooding is a highly variable event, with losses differing 
widely from year to year. Therefore, analysis of historical data can 
lead to unreliable conclusions about the actual flood risk faced by a 
given state or area. Also, catastrophic events greatly impact the long-
term aggregate experience of a state. While the difference between 
premiums and claims in rural and agricultural and urban areas is not a 
meaningful measure of whether policyholders are paying premiums 
commensurate with their risk because NFIP premiums are intended to 
cover losses as well as operating expenses, among other reasons, it 
provides additional descriptive information. 

Table 3 shows NFIP premiums and claims of policyholders in rural and 
agricultural areas from 1994 through 2013 (except 1999). This 
information provides some indication of the trends over this period 
for rural areas. 

Table 3: Total Annual Premiums and Claims for Rural and Agricultural 
Riverine Areas (in constant 2014 dollars), 1994-2013 (excluding 1999): 

Dollars in thousands. 

Calendar year: 2013; 
Rural and agricultural riverine areas Total premiums: $1,385,209; 
Rural and agricultural riverine areas Total claims: $156,929[A]; 
Ratio of claims to premiums: 0.11. 

Calendar year: 2012; 
Rural and agricultural riverine areas Total premiums: $1,317,016; 
Rural and agricultural riverine areas Total claims: $1,578,485; 
Ratio of claims to premiums: 1.2. 

Calendar year: 2011; 
Rural and agricultural riverine areas Total premiums: $1,314,237; 
Rural and agricultural riverine areas Total claims: $1,236,725; 
Ratio of claims to premiums: 0.94. 

Calendar year: 2010; 
Rural and agricultural riverine areas Total premiums: $1,271,112; 
Rural and agricultural riverine areas Total claims: $397,394; 
Ratio of claims to premiums: 0.31. 

Calendar year: 2009; 
Rural and agricultural riverine areas Total premiums: $1,195,438; 
Rural and agricultural riverine areas Total claims: $280,280; 
Ratio of claims to premiums: 0.23. 

Calendar year: 2008; 
Rural and agricultural riverine areas Total premiums: $1,135,962; 
Rural and agricultural riverine areas Total claims: $2,233,049; 
Ratio of claims to premiums: 1.97. 

Calendar year: 2007; 
Rural and agricultural riverine areas Total premiums: $1,049,637; 
Rural and agricultural riverine areas Total claims: $337,142; 
Ratio of claims to premiums: 0.32. 

Calendar year: 2006; 
Rural and agricultural riverine areas Total premiums: $975,137; 
Rural and agricultural riverine areas Total claims: $440,104; 
Ratio of claims to premiums: 0.45. 

Calendar year: 2005; 
Rural and agricultural riverine areas Total premiums: $853,057; 
Rural and agricultural riverine areas Total claims: $6,607,700; 
Ratio of claims to premiums: 7.75. 

Calendar year: 2004; 
Rural and agricultural riverine areas Total premiums: $810,990; 
Rural and agricultural riverine areas Total claims: $1,325,846; 
Ratio of claims to premiums: 1.63. 

Calendar year: 2003; 
Rural and agricultural riverine areas Total premiums: $779,378; 
Rural and agricultural riverine areas Total claims: $436,523; 
Ratio of claims to premiums: 0.56. 

Calendar year: 2002; 
Rural and agricultural riverine areas Total premiums: $754,314; 
Rural and agricultural riverine areas Total claims: $332,853; 
Ratio of claims to premiums: 0.44. 

Calendar year: 2001; 
Rural and agricultural riverine areas Total premiums: $740,352; 
Rural and agricultural riverine areas Total claims: $284,983; 
Ratio of claims to premiums: 0.38. 

Calendar year: 2000; 
Rural and agricultural riverine areas Total premiums: $745,011; 
Rural and agricultural riverine areas Total claims: $79,415; 
Ratio of claims to premiums: 0.11. 

Calendar year: 1998; 
Rural and agricultural riverine areas Total premiums: $732,542; 
Rural and agricultural riverine areas Total claims: $676,241; 
Ratio of claims to premiums: 0.92. 

Calendar year: 1997; 
Rural and agricultural riverine areas Total premiums: $623,629; 
Rural and agricultural riverine areas Total claims: $527,643; 
Ratio of claims to premiums: 0.85. 

Calendar year: 1996; 
Rural and agricultural riverine areas Total premiums: $521,269; 
Rural and agricultural riverine areas Total claims: $677,365; 
Ratio of claims to premiums: 1.3. 

Calendar year: 1995; 
Rural and agricultural riverine areas Total premiums: $466,580; 
Rural and agricultural riverine areas Total claims: $685,838; 
Ratio of claims to premiums: 1.47. 

Calendar year: 1994; 
Rural and agricultural riverine areas Total premiums: $410,932; 
Rural and agricultural riverine areas Total claims: $311,947; 
Ratio of claims to premiums: 0.76. 

Calendar year: Total; 
Rural and agricultural riverine areas Total premiums: $$17,081,802; 
Rural and agricultural riverine areas Total claims: $$18,606,462; 
Ratio of claims to premiums: 1.09. 

Source: GAO analysis of FEMA data. GAO-14-583. 

Notes: Because 1999 policy data were not available from FEMA in a 
comparable format to the data for the other years, we are excluding 
premiums and claims for that year in this analysis. 

[A] Not all 2013 claims were processed at the time we collected the 
data from FEMA. 

[End of table] 

Similarly, table 4 provides 1994-2013 (except 1999) premium and claims 
data for urban areas. 

Table 4: Total Annual Premiums and Claims for Urban Riverine Areas (in 
constant 2014 dollars), 1994-2013 (excluding 1999): 

Dollars in thousands. 

Calendar year: 2013; 
Urban riverine areas Total premiums: $2,224,326; 
Urban riverine areas Total claims: $145,947[A]; 
Ratio of claims to premiums: 0.07. 

Calendar year: 2012; 
Urban riverine areas Total premiums: $2,104,928; 
Urban riverine areas Total claims: $7,290,166; 
Ratio of claims to premiums: 3.46. 

Calendar year: 2011; 
Urban riverine areas Total premiums: $2,082,646; 
Urban riverine areas Total claims: $1,283,414; 
Ratio of claims to premiums: 0.62. 

Calendar year: 2010; 
Urban riverine areas Total premiums: $2,070,372; 
Urban riverine areas Total claims: $425,804; 
Ratio of claims to premiums: 0.21. 

Calendar year: 2009; 
Urban riverine areas Total premiums: $1,950,615; 
Urban riverine areas Total claims: $560,298; 
Ratio of claims to premiums: 0.29. 

Calendar year: 2008; 
Urban riverine areas Total premiums: $1,906,114; 
Urban riverine areas Total claims: $1,555,033; 
Ratio of claims to premiums: 0.82. 

Calendar year: 2007; 
Urban riverine areas Total premiums: $1,781,760; 
Urban riverine areas Total claims: $341,244; 
Ratio of claims to premiums: 0.19. 

Calendar year: 2006; 
Urban riverine areas Total premiums: $1,669,818; 
Urban riverine areas Total claims: $287,366; 
Ratio of claims to premiums: 0.17. 

Calendar year: 2005; 
Urban riverine areas Total premiums: $1,481,128; 
Urban riverine areas Total claims: $14,241,951; 
Ratio of claims to premiums: 9.62. 

Calendar year: 2004; 
Urban riverine areas Total premiums: $1,404,981; 
Urban riverine areas Total claims: $1,373,001; 
Ratio of claims to premiums: 0.98. 

Calendar year: 2003; 
Urban riverine areas Total premiums: $1,349,121; 
Urban riverine areas Total claims: $529,058; 
Ratio of claims to premiums: 0.39. 

Calendar year: 2002; 
Urban riverine areas Total premiums: $1,317,264; 
Urban riverine areas Total claims: $213,858; 
Ratio of claims to premiums: 0.16. 

Calendar year: 2001; 
Urban riverine areas Total premiums: $1,317,598; 
Urban riverine areas Total claims: $1,354,849; 
Ratio of claims to premiums: 1.03. 

Calendar year: 2000; 
Urban riverine areas Total premiums: $1,322,863; 
Urban riverine areas Total claims: $251,053; 
Ratio of claims to premiums: 0.19. 

Calendar year: 1998; 
Urban riverine areas Total premiums: $1,311,434; 
Urban riverine areas Total claims: $523,512; 
Ratio of claims to premiums: 0.4. 

Calendar year: 1997; 
Urban riverine areas Total premiums: $1,149,065; 
Urban riverine areas Total claims: $181,899; 
Ratio of claims to premiums: 0.16. 

Calendar year: 1996; 
Urban riverine areas Total premiums: $1,031,843; 
Urban riverine areas Total claims: $458,854; 
Ratio of claims to premiums: 0.44. 

Calendar year: 1995; 
Urban riverine areas Total premiums: $943,272; 
Urban riverine areas Total claims: $1,151,750; 
Ratio of claims to premiums: 1.22. 

Calendar year: 1994; 
Urban riverine areas Total premiums: $834,893; 
Urban riverine areas Total claims: $282,422; 
Ratio of claims to premiums: 0.34. 

Calendar year: Total; 
Urban riverine areas Total premiums: $$29,254,041; 
Urban riverine areas Total claims: $$32,451,479; 
Ratio of claims to premiums: 1.11. 

Source: GAO analysis of FEMA data. GAO-14-583. 

Notes: Because 1999 policy data were not available from FEMA in a 
comparable format to the data for the other years, we are excluding 
premiums and claims for that year in this analysis. 

[A] Not all 2013 claims were processed at the time we collected the 
data from FEMA. 

[End of table] 

Table 5 includes available premium and claims data by year in the 
rural and agricultural riverine areas of each state. Because 
comparable 1999 premium data were not available, the ratio of claims 
to premiums for some states may be distorted.[Footnote 60] In 1999, 
some states on the east coast experienced large losses from Hurricane 
Floyd likely resulting in high claim amounts. According to FEMA, for 
example, NFIP policyholders in the state of North Carolina received 
over $141 million in claims between September 1999 and June 2000. If 
the premiums and claims for 1999 were included, the ratio of claims to 
premiums for states affected by Hurricane Floyd could have been larger. 

Table 5: Total Premiums and Claims by State for Rural and Agricultural 
Riverine Areas (in constant 2014 dollars), 1994-2013 (excluding 1999): 

Dollars in thousands. 

State: Alaska; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $30,029; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $7,631; 
Ratio of claims to premiums: 0.25. 

State: Alabama; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $251,748; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $734,877; 
Ratio of claims to premiums: 2.92. 

State: Arkansas; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $139,659; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $81,002; 
Ratio of claims to premiums: 0.58. 

State: Arizona; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $164,342; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $11,881; 
Ratio of claims to premiums: 0.07. 

State: California; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $1,963,946; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $365,585; 
Ratio of claims to premiums: 0.19. 

State: Colorado; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $147,906; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $9,238; 
Ratio of claims to premiums: 0.06. 

State: Connecticut; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $67,858; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $31,725; 
Ratio of claims to premiums: 0.47. 

State: District of Columbia; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): [Empty]; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): [Empty]; 
Ratio of claims to premiums: [Empty]. 

State: Delaware; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $77,150; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $23,170; 
Ratio of claims to premiums: 0.3. 

State: Florida; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $2,493,450; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $1,069,660; 
Ratio of claims to premiums: 0.43. 

State: Georgia; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $578,678; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $124,876; 
Ratio of claims to premiums: 0.22. 

State: Hawaii; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $175,993; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $32,036; 
Ratio of claims to premiums: 0.18. 

State: Iowa; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $159,721; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $247,331; 
Ratio of claims to premiums: 1.55. 

State: Idaho; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $58,038; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $6,551; 
Ratio of claims to premiums: 0.11. 

State: Illinois; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $246,779; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $188,710; 
Ratio of claims to premiums: 0.76. 

State: Indiana; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $178,784; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $155,699; 
Ratio of claims to premiums: 0.87. 

State: Kansas; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $116,338; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $59,034; 
Ratio of claims to premiums: 0.51. 

State: Kentucky; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $186,644; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $219,247; 
Ratio of claims to premiums: 1.17. 

State: Louisiana; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $1,783,964; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $5,726,140; 
Ratio of claims to premiums: 3.21. 

State: Massachusetts; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $183,708; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $32,541; 
Ratio of claims to premiums: 0.18. 

State: Maryland; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $187,768; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $123,534; 
Ratio of claims to premiums: 0.66. 

State: Maine; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $90,019; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $19,968; 
Ratio of claims to premiums: 0.22. 

State: Michigan; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $173,412; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $19,369; 
Ratio of claims to premiums: 0.11. 

State: Minnesota; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $89,750; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $138,087; 
Ratio of claims to premiums: 1.54. 

State: Missouri; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $193,740; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $230,248; 
Ratio of claims to premiums: 1.19. 

State: Mississippi; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $340,630; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $2,018,966; 
Ratio of claims to premiums: 5.93. 

State: Montana; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $43,040; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $8,501; 
Ratio of claims to premiums: 0.2. 

State: North Carolina; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $664,838; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $590,866; 
Ratio of claims to premiums: 0.89. 

State: North Dakota; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $83,022; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $290,116; 
Ratio of claims to premiums: 3.49. 

State: Nebraska; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $134,223; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $21,497; 
Ratio of claims to premiums: 0.16. 

State: New Hampshire; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $51,587; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $34,455; 
Ratio of claims to premiums: 0.67. 

State: New Jersey; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $610,780; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $953,199; 
Ratio of claims to premiums: 1.56. 

State: New Mexico; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $134,857; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $10,676; 
Ratio of claims to premiums: 0.08. 

State: Nevada; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $69,273; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $6,913; 
Ratio of claims to premiums: 0.1. 

State: New York; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $349,225; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $578,694; 
Ratio of claims to premiums: 1.66. 

Ohio; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $287,702; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $199,627; 
Ratio of claims to premiums: 0.69. 

State: Oklahoma; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $110,558; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $86,674; 
Ratio of claims to premiums: 0.78. 

State: Oregon; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $238,806; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $74,083; 
Ratio of claims to premiums: 0.31. 

State: Pennsylvania; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $487,727; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $766,733; 
Ratio of claims to premiums: 1.57. 

State: Rhode Island; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $48,843; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $38,141; 
Ratio of claims to premiums: 0.78. 

State: South Carolina; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $519,285; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $22,586; 
Ratio of claims to premiums: 0.04. 

State: South Dakota; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $45,702; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $36,191; 
Ratio of claims to premiums: 0.79. 

State: Tennessee; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $142,386; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $169,688; 
Ratio of claims to premiums: 1.19. 

State: Texas; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $1,847,503; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $2,206,746; 
Ratio of claims to premiums: 1.19. 

State: Utah; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $22,125; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $1,111; 
Ratio of claims to premiums: 0.05. 

State: Virginia; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $259,763; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $217,605; 
Ratio of claims to premiums: 0.84. 

State: Vermont; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $50,605; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $63,870; 
Ratio of claims to premiums: 1.26. 

State: Washington; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $324,084; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $207,313; 
Ratio of claims to premiums: 0.64. 

State: Wisconsin; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $134,064; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $53,891; 
Ratio of claims to premiums: 0.4. 

State: West Virginia; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $223,627; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $263,985; 
Ratio of claims to premiums: 1.18. 

State: Wyoming; 
Rural and agricultural riverine areas: Total premiums: (1994-2013, 
excluding 1999): $28,304; 
Rural and agricultural riverine areas: Total claims: (1994-2013[A], 
excluding 1999): $795; 
Ratio of claims to premiums: 0.03. 

Source: GAO analysis of FEMA data. GAO-14-583. 

Notes: Because 1999 policy data were not available from FEMA in a 
comparable format to the data for the other years, we are excluding 
premiums and claims for that year in this analysis. Due to this 
exclusion, the ratio of claims to premiums for some states may appear 
higher or lower than actual. 

In addition to claims, NFIP premiums are also intended to cover 
expenses necessary to operate NFIP. In addition, an analysis of two 
decades of historical data could lead to unreliable conclusions about 
the actual flood risk faced by a given state. 

[A] Not all 2013 claims were processed at the time we collected the 
data from FEMA. 

[End of table] 

Table 6 provides the same premium and claims information for urban 
areas by state. 

Table 6: Total Premiums and Claims by State for Urban Riverine Areas 
(in constant 2014 dollars), 1994-2013 (excluding 1999): 

Dollars in thousands. 

State: Alaska; 
Urban riverine areas total premiums: (1994-2013): $2,845; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$160; 
Ratio of claims to premiums: 0.06. 

State: Alabama; 
Urban riverine areas total premiums: (1994-2013): $135,235; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$304,820; 
Ratio of claims to premiums: 2.25. 

State: Arkansas; 
Urban riverine areas total premiums: (1994-2013): $24,096; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$12,691; 
Ratio of claims to premiums: 0.53. 

State: Arizona; 
Urban riverine areas total premiums: (1994-2013): $144,645; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$8,302; 
Ratio of claims to premiums: 0.06. 

State: California; 
Urban riverine areas total premiums: (1994-2013): $1,431,599; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$134,051; 
Ratio of claims to premiums: 0.09. 

State: Colorado; 
Urban riverine areas total premiums: (1994-2013): $74,138; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$2,686; 
Ratio of claims to premiums: 0.04. 

State: Connecticut; 
Urban riverine areas total premiums: (1994-2013): $458,810; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$388,679; 
Ratio of claims to premiums: 0.85. 

State: District of Columbia; 
Urban riverine areas total premiums: (1994-2013): $8,306; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$3,646; 
Ratio of claims to premiums: 0.44. 

State: Delaware; 
Urban riverine areas total premiums: (1994-2013): $111,544; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$45,906; 
Ratio of claims to premiums: 0.41. 

State: Florida; 
Urban riverine areas total premiums: (1994-2013): $12,294,959; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$2,725,923; 
Ratio of claims to premiums: 0.22. 

State: Georgia; 
Urban riverine areas total premiums: (1994-2013): $240,531; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$201,623; 
Ratio of claims to premiums: 0.84. 

State: Hawaii; 
Urban riverine areas total premiums: (1994-2013): $168,259; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$6,964; 
Ratio of claims to premiums: 0.04. 

State: Iowa; 
Urban riverine areas total premiums: (1994-2013): [Empty]; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
[Empty]; 
Ratio of claims to premiums: [Empty]. 

State: Idaho; 
Urban riverine areas total premiums: (1994-2013): $6,395; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): $45; 
Ratio of claims to premiums: 0.01. 

State: Illinois; 
Urban riverine areas total premiums: (1994-2013): $343,305; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$179,854; 
Ratio of claims to premiums: 0.52. 

State: Indiana; 
Urban riverine areas total premiums: (1994-2013): $175,009; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$72,884; 
Ratio of claims to premiums: 0.42. 

State: Kansas; 
Urban riverine areas total premiums: (1994-2013): $15,345; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$12,444; 
Ratio of claims to premiums: 0.81. 

State: Kentucky; 
Urban riverine areas total premiums: (1994-2013): $62,167; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$52,431; 
Ratio of claims to premiums: 0.84. 

State: Louisiana; 
Urban riverine areas total premiums: (1994-2013): $2,635,418; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$13,054,624; 
Ratio of claims to premiums: 4.95. 

State: Massachusetts; 
Urban riverine areas total premiums: (1994-2013): $518,870; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$142,915; 
Ratio of claims to premiums: 0.28. 

State: Maryland; 
Urban riverine areas total premiums: (1994-2013): $298,581; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$170,499; 
Ratio of claims to premiums: 0.57. 

State: Maine; 
Urban riverine areas total premiums: (1994-2013): $10,185; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$2,965; 
Ratio of claims to premiums: 0.29. 

State: Michigan; 
Urban riverine areas total premiums: (1994-2013): $152,086; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$17,301; 
Ratio of claims to premiums: 0.11. 

State: Minnesota; 
Urban riverine areas total premiums: (1994-2013): $23,514; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$7,087; 
Ratio of claims to premiums: 0.3. 

State: Missouri; 
Urban riverine areas total premiums: (1994-2013): $126,747; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$115,962; 
Ratio of claims to premiums: 0.91. 

State: Mississippi; 
Urban riverine areas total premiums: (1994-2013): $189,613; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$1,324,054; 
Ratio of claims to premiums: 6.98. 

State: Montana; 
Urban riverine areas total premiums: (1994-2013): $1,796; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$482; 
Ratio of claims to premiums: 0.27. 

State: North Carolina; 
Urban riverine areas total premiums: (1994-2013): $358,085; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$252,604; 
Ratio of claims to premiums: 0.71. 

State: North Dakota; 
Urban riverine areas total premiums: (1994-2013): [Empty]; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
[Empty] ; 
Ratio of claims to premiums: [Empty]. 

State: Nebraska; 
Urban riverine areas total premiums: (1994-2013): $12,320; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$1,165; 
Ratio of claims to premiums: 0.09. 

State: New Hampshire; 
Urban riverine areas total premiums: (1994-2013): $39,300; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$13,998; 
Ratio of claims to premiums: 0.36. 

State: New Jersey; 
Urban riverine areas total premiums: (1994-2013): $2,130,262; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$4,170,723; 
Ratio of claims to premiums: 1.96. 

State: New Mexico; 
Urban riverine areas total premiums: (1994-2013): $12,543; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$632; 
Ratio of claims to premiums: 0.05. 

State: Nevada; 
Urban riverine areas total premiums: (1994-2013): $75,616; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$37,935; 
Ratio of claims to premiums: 0.5. 

State: New York; 
Urban riverine areas total premiums: (1994-2013): $1,464,840; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$4,242,605; 
Ratio of claims to premiums: 2.9. 

State: Ohio; 
Urban riverine areas total premiums: (1994-2013): $177,068; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$86,847; 
Ratio of claims to premiums: 0.49. 

State: Oklahoma; 
Urban riverine areas total premiums: (1994-2013): $56,409; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$14,093; 
Ratio of claims to premiums: 0.25. 

State: Oregon; 
Urban riverine areas total premiums: (1994-2013): $77,057; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$29,295; 
Ratio of claims to premiums: 0.38. 

State: Pennsylvania; 
Urban riverine areas total premiums: (1994-2013): $409,106; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$387,389; 
Ratio of claims to premiums: 0.95. 

State: Rhode Island; 
Urban riverine areas total premiums: (1994-2013): $152,039; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$69,654; 
Ratio of claims to premiums: 0.46. 

State: South Carolina; 
Urban riverine areas total premiums: (1994-2013): $875,658; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$33,971; 
Ratio of claims to premiums: 0.04. 

State: South Dakota; 
Urban riverine areas total premiums: (1994-2013): [Empty]; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
[Empty] ; 
Ratio of claims to premiums: [Empty]. 

State: Tennessee; 
Urban riverine areas total premiums: (1994-2013): $96,349; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$171,886; 
Ratio of claims to premiums: 1.78. 

State: Texas; 
Urban riverine areas total premiums: (1994-2013): $2,472,116; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$3,341,013; 
Ratio of claims to premiums: 1.35. 

State: Utah; 
Urban riverine areas total premiums: (1994-2013): $12,299; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$257; 
Ratio of claims to premiums: 0.02. 

State: Virginia; 
Urban riverine areas total premiums: (1994-2013): $667,032; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$414,122; 
Ratio of claims to premiums: 0.62. 

State: Vermont; 
Urban riverine areas total premiums: (1994-2013): $239; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): $52; 
Ratio of claims to premiums: 0.22. 

State: Washington; 
Urban riverine areas total premiums: (1994-2013): $84,516; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$33,865; 
Ratio of claims to premiums: 0.4. 

State: Wisconsin; 
Urban riverine areas total premiums: (1994-2013): $33,879; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$28,069; 
Ratio of claims to premiums: 0.83. 

State: West Virginia; 
Urban riverine areas total premiums: (1994-2013): $14,583; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
$8,393; 
Ratio of claims to premiums: 0.58. 

State: Wyoming; 
Urban riverine areas total premiums: (1994-2013): [Empty]; 
Urban riverine areas total claims: (1994-2013[A], excluding 1999): 
[Empty]; 
Ratio of claims to premiums: [Empty]. 

Source: GAO analysis of FEMA data. GAO-14-583. 

Notes: Because 1999 policy data were not available from FEMA in a 
comparable format to the data for the other years, we are excluding 
premiums and claims for that year in this analysis. Due to this 
exclusion, the ratio of claims to premiums for some states may appear 
higher or lower than actual. 

In addition to claims, NFIP premiums are also intended to cover 
expenses necessary to operate NFIP. In addition, an analysis of two 
decades of historical data could lead to unreliable conclusions about 
the actual flood risk faced by a given state. 

[A] Not all 2013 claims were processed at the time we collected the 
data from FEMA. 

[End of table] 

Additional study would be required to determine whether policyholders 
in some states with lower losses are paying a higher premium than is 
appropriate for their risk and others paying too little. For example, 
our analysis did not control for differences in the type of policy 
purchased, such as the mix of certain property types across states and 
insurance coverage amounts, which could affect both premiums and 
claims. In addition, we did not control for differences in the mix of 
subsidized and full-risk policies or the impact of subsidized premiums 
on our results. As we have reported previously, some states have a 
relatively large number or proportion of subsidized properties that 
generally would lead to higher expected claims relative to 
premiums.[Footnote 61] The limitations in setting full-risk rates that 
we discussed in the prior report could result in systematic mispricing 
relative to risk that becomes apparent only over long periods. 
Further, the analysis conducted for this report included both 
subsidized and full-risk properties, and so the results should be 
considered in this context. 

[End of section] 

Appendix III: Additional Information on Selected Agricultural and 
Rural Communities: 

The following are some basic characteristics of the selected 
communities: Sutter County, California; Yolo County, California; 
Rapides Parish, Louisiana; St. Landry Parish, Louisiana; Duplin 
County, North Carolina; Tyrrell County, North Carolina; Cass Country, 
North Dakota; and Walsh Country, North Dakota.[Footnote 62] Tables 7 
to 14 show, for each individual community, the total number of 
National Flood Insurance Program (NFIP) policies, the number of 
policies in a special flood hazard area (SFHA), the number of miles of 
levees in the county, and the top agricultural commodities in the 
county.[Footnote 63] Figures 6 to 11 show FEMA's flood maps for the 
counties, when available.[Footnote 64] 

Sutter County, California: 

Table 7: Key Characteristics of Sutter County, California: 

Number of NFIP policies, as of Sept. 30, 2013 (Sutter County National 
Flood Insurance Program (NFIP) Community): 4,812. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Sutter County NFIP Community); 1,040. 

Levee miles, accredited, as of May 2014[A]; 47. 

Levee miles, not accredited, as of May 2014[A ]; 180. 

Top 5 agricultural commodities by value of production (2012)[B]; 
Fruits and tree nuts; Rice; Vegetables, melons, potatoes, and sweet 
potatoes; Other grains, oilseeds, dry beans, and dry peas; Corn. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

Figure 6: FEMA Flood Map, Sutter County, California: 

[Refer to PDF for image: map] 

Depicted: 
Special Flood Hazard Area (SFHA); 
Non-SFHA; 
Map data unavailable in digitized format; 
Levee. 

Source: FEMA (data); MapInfo (image). GAO-14-583. 

[End of figure] 

Yolo County, California: 

Table 8: Key Characteristics of Yolo County, California: 

Number of NFIP policies, as of Sept. 30, 2013 (Yolo County National 
Flood Insurance Program (NFIP) Community): 1,337. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Yolo County NFIP Community); 977. 

Levee miles, accredited, as of May 2014[A]; 105. 

Levee miles, not accredited, as of May 2014[A]; 282. 

Top 5 agricultural commodities by value of production (2012)[B]; 
Fruits and tree nuts; Vegetables, melons, potatoes, and sweet 
potatoes; Rice; Corn; Wheat. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

Figure 7: FEMA Flood Map, Yolo County, California: 

[Refer to PDF for image: map] 

Depicted: 
Special Flood Hazard Area (SFHA); 
Non-SFHA; 
Levee. 

Source: FEMA (data); MapInfo (image). GAO-14-583. 

[End of figure] 

Rapides Parish, Louisiana: 

Table 9: Key Characteristics of Rapides Parish, Louisiana: 

Number of NFIP policies, as of Sept. 30, 2013 (Rapides Parish National 
Flood Insurance Program (NFIP) Community): 1,472. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Rapides Parish NFIP Community); 808. 

Levee miles, accredited, as of May 2014[A]; 0. 

Levee miles, not accredited, as of May 2014[A]; 68. 

Top 5 agricultural commodities by value of production (2012)[B]; 
Nursery, greenhouse, floriculture, and sod; Soybeans; Other crops and 
hay; Cattle and calves; Corn. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

St. Landry Parish, Louisiana: 

Table 10: Key Characteristics of St. Landry Parish, Louisiana: 

Number of NFIP policies, as of Sept. 30, 2013 (St. Landry Parish 
National Flood Insurance Program (NFIP) Community): 1,855. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (St. Landry Parish NFIP Community); 1,248. 

Levee miles, accredited, as of May 2014[A]; 80. 

Levee miles, not accredited, as of May 2014[A]; 0. 

Top 5 agricultural commodities by value of production (2012)[B]; 
Soybeans; Rice; Sorghum; Corn; Other crops and hay. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

Figure 8: FEMA Flood Map, St. Landry Parish, Louisiana: 

[Refer to PDF for image: map] 

Depicted: 
Special Flood Hazard Area (SFHA); 
Non-SFHA; 
Levee. 

Source: FEMA (data); MapInfo (image). GAO-14-583. 

[End of figure] 

Duplin County, North Carolina: 

Table 11: Key Characteristics of Duplin County, North Carolina: 

Number of NFIP policies, as of Sept. 30, 2013 (Duplin County National 
Flood Insurance Program (NFIP) Community): 346. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Duplin County NFIP Community); 54. 

Levee miles, accredited, as of May 2014[A]; 0. 

Levee miles, not accredited, as of May 2014[A]; 0. 

Top 5 agricultural commodities by value of production (2012)[B]; Hogs 
and pigs; Poultry and eggs; Corn; Soybeans; Vegetables, melons, 
potatoes, and sweet potatoes. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

Figure 9: FEMA Flood Map, Duplin County, North Carolina: 

[Refer to PDF for image: map] 

Depicted: 
Special Flood Hazard Area (SFHA); 
Non-SFHA; 
Levee. 

Source: FEMA (data); MapInfo (image). GAO-14-583. 

[End of figure] 

Tyrrell County, North Carolina: 

Table 12: Key Characteristics of Tyrrell County, North Carolina: 

Number of NFIP policies, as of Sept. 30, 2013 (Tyrrell County National 
Flood Insurance Program (NFIP) Community): 436. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Tyrrell County NFIP Community); 402. 

Levee miles, accredited, as of May 2014[A]; 24. 

Levee miles, not accredited, as of May 2014[A]; 0. 

Top 5 agricultural commodities by value of production (2012); Not able 
to determine[B]. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. 
Because the majority of crop/livestock categories for Tyrrell County 
were not disclosed, GAO could not determine the top 5 agricultural 
commodities in the county. 

[End of table] 

Figure 10: FEMA Flood Map, Tyrrell County, North Carolina: 

[Refer to PDF for image: map] 

Depicted: 
Special Flood Hazard Area (SFHA); 
Non-SFHA; 
Levee. 

Source: FEMA (data); MapInfo (image). GAO-14-583. 

[End of figure] 

Cass County, North Dakota: 

Table 13: Key Characteristics of Cass County, North Dakota: 

Number of NFIP policies, as of Sept. 30, 2013 (Cass County National 
Flood Insurance Program (NFIP) Community): 8. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Cass County NFIP Community); 0[A]. 

Levee miles, accredited, as of May 2014[B]; 46. 

Levee miles, not accredited, as of May 2014[B]; 7. 

Top 5 agricultural commodities by value of production (2012)[C]; Corn; 
Soybeans; Wheat; Other crops and hay; Cattle and calves. 

Source: FEMA and USDA data. GAO-14-583. 

[A] The Cass County NFIP community 385362 had no policyholders in an 
SFHA as of September 30, 2013 because the community had not yet 
adopted its updated preliminary flood map. Prior to this map update, 
the entire community was in zone X, without a defined SFHA. 

[B] These miles represent only the levees that FEMA has inventoried. 

[C] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

Walsh County, North Dakota: 

Table 14: Key Characteristics of Walsh County, North Dakota: 

Number of NFIP policies, as of Sept. 30, 2013 (Walsh County National 
Flood Insurance Program (NFIP) Community): 54. 

Number of NFIP policies in Special Flood Hazard Areas (SFHA), as of 
Sept. 30, 2013 (Walsh County NFIP Community); 45. 

Levee miles, accredited, as of May 2014[A]; 0. 

Levee miles, not accredited, as of May 2014[A]; 4. 

Top 5 agricultural commodities by value of production (2012)[B]; 
Wheat; Vegetables, melons, potatoes, and sweet potatoes; Other crops 
and hay; Other grains, oilseeds, dry beans, and dry peas; Corn. 

Source: FEMA and USDA data. GAO-14-583. 

[A] These miles represent only the levees that FEMA has inventoried. 

[B] Some crop/livestock categories did not contain sales production 
data and were not disclosed due to USDA disclosure rules. For example, 
USDA did not disclose production data for crop/livestock categories in 
which the data represented less than three operations in a county. GAO 
could not incorporate such categories in our analysis. While it is 
possible, it is unlikely that we have left out any major 
crop/livestock categories. 

[End of table] 

Figure 11: FEMA Flood Map, Walsh County, North Dakota: 

[Refer to PDF for image: map] 

Depicted: 
Special Flood Hazard Area (SFHA); 
Non-SFHA; 
Levee. 

Source: FEMA (data); MapInfo (image). GAO-14-583. 

[End of figure] 

[End of section] 

Appendix IV: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528: 

June 20, 2014: 

Daniel Garcia-Diaz: 
Director, Financial Markets and Community Investment: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Garcia-Diaz: 

Re: Draft Report GAO-14-583, "National Flood Insurance Program:
Additional Guidance on Building Requirements to Mitigate Agriculture 
Structures' Damage in High-Risk Areas Is Needed" 

Thank you for the opportunity to review and comment on this draft 
report. The U.S. Department of Homeland Security (DHS) appreciates the 
U.S. Government Accountability Office's (GAO's) work in planning and 
conducting its review and issuing this report. 

The Federal Emergency Management Agency (FEMA) is committed to 
providing the best possible service to its State, local, and tribal 
partners. The partners' adoption and enforcement of sound floodplain 
management ordinances is vital to the success of the National Flood 
Insurance Program. Currently more than 20,500 communities voluntarily 
adopt and enforce floodplain management ordinances that provide flood-
loss-reduction building standards for new and existing development. 
FEMA supports these efforts by regularly reviewing its own policies and
ensuring that communities have the best available information to make 
informed decisions with regard to floodplain management. 

The draft report contained one recommendation, with which the 
Department concurs. Specifically, GAO recommended that the 
Administrator of FEMA: 

Recommendation: Update existing guidance to include additional 
information on and options for mitigating the risk of flood damage to 
agricultural structures to reflect recent farming developments and 
structural needs in vast and high-depth floodplains. 

Response: Concur. FEMA's Federal Insurance & Mitigation Administration 
recognizes that agriculture land is a good use of the floodplain, and 
that changes in the agriculture industry and the diversity of 
structures that support agriculture are important to recognize in 
future guidance. FEMA is working to determine the best approach for 
updating its Technical Bulletin 7, "Wet Floodproofing Requirements." 
Estimated Completion Date: To Be Determined. 

Again, thank you for the opportunity to review and comment on this 
draft report. Technical comments were previously provided under 
separate cover. Please feel free to contact me if you have any 
questions. We look forward to working with you in the future. 

Sincerely, 

Signed by: 

Jim H. Crumpacker, CIA, CFE: 
Director: 
Departmental GAO-OIG Liaison Office: 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Garcia-Diaz, (202) 512-8678 or garciadiazd@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Triana McNeil and Jill Naamane 
(Assistant Directors); Simin Ho (Analyst in Charge); Emily Chalmers; 
William Chatlos; Barbara El Osta; Melissa Kornblau; John Mingus; Marc 
Molino; and Ruben Montes De Oca made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Special flood hazard areas (SFHA), which are depicted on NFIP 
maps, represent the land subject to a 1 percent or greater chance of 
flooding in any given year. FEMA previously referred to this type of 
flood as the 100-year flood. 

[2] For purpose of this report, we defined rural areas as areas that 
are not considered urbanized areas or urban clusters using U.S. Census 
Bureau data and agricultural areas as those counties with 50 percent 
or more of their land areas used in farming, based on the Department 
of Agriculture's (USDA) Atlas of Rural and Small-Town America. We 
defined riverine floodplains as any areas lying outside of the coastal 
areas that were at a high risk of flooding. The Federal Emergency 
Management Agency (FEMA) defines coastal areas as those areas that 
face potential storm surges and wave actions. 

[3] Pub. L. No. 112-141, Div. F, Tit. II, Subtit. A, 126 Stat. 405, 
916 (2012). NFIP has been on our high-risk list since March 2006 after 
incurring billions of dollars in catastrophic losses from the 2005 
hurricanes. NFIP currently owes about $24 billion to the U.S. Treasury. 

[4] Pub. L. No. 113-89, 128 Stat. 1020 (2014). 

[5] Federally backed or federally regulated lenders are required by 
the Flood Disaster Protection Act of 1973 to demonstrate adequate 
flood insurance coverage to their regulators for property serving as 
the principle collateral of a loan if the building is located in a 
SFHA in a participating community (known as the mandatory purchase 
requirement). Pub. L. No. 93-234, 87 Stat. 975 (1973) (codified as 
amended in scattered sections of 42 U.S.C.). Because the mandatory 
purchase requirement is required by statute, FEMA has no authority to 
waive it. Additionally, federal financial regulators, rather than 
FEMA, monitor compliance with the mandatory purchase requirement. 

[6] The National Flood Insurance Act of 1968 established NFIP. Pub. L. 
No. 90-448, Tit. XIII, 82 Stat. 476, 572 (1968). 

[7] Multifamily buildings designed for use by five or more families 
are eligible for nonresidential policy limits. 

[8] Section 12 of the 2014 Act provides FEMA the authority to increase 
the deductible for residential structures to $10,000. Pub. L. No. 113-
89, § 12, 128 Stat. at 1025 (codified at 42 U.S.C. § 4013(d)). 

[9] The mandatory purchase requirement applies to mortgages made, 
increased, extended, or renewed by lending institutions regulated by 
the Board of Governors of the Federal Reserve System, the Federal 
Deposit Insurance Corporation, the Office of Comptroller of the 
Currency, the National Credit Union Administration, or the Farm Credit 
Administration. The requirement also applies to all mortgage loans 
purchased by Fannie Mae and Freddie Mac in the secondary market if the 
loan is secured by property in an SFHA for which flood insurance is 
available and to loans and grants guaranteed or provided by the 
Federal Housing Administration, USDA Rural Development, and the 
Department of Veterans Affairs. USDA Rural Development provides low-
income housing assistance through several programs, including the 
section 515 (Rural Rental Housing) and section 502 (Single-Family 
Housing) loan programs and the section 504 (Rural Housing Repair and 
Rehabilitation) loan and grant program. 

[10] Pub. L. No. 113-89, § 13(a), 128 Stat. at 1026 (codified at .42 
U.S.C. § 4012a(c)). 

[11] FEMA defines a substantial improvement as any reconstruction, 
rehabilitation, addition, or other improvement of a structure, the 
cost of which equals or exceeds 50 percent of the market value of the 
structure before the start of construction of the improvement, with 
exceptions for historic structures and projects to correct certain 
health, sanitary, or safety code violations. Substantial damage means 
damage of any origin sustained by a structure for which the cost of 
restoring the structure to its predamaged condition would equal or 
exceed 50 percent of the market value of the structure before the 
damage occurred. 44 C.F.R. § 59.1. The National Flood Insurance Reform 
Act of 1994 amended the National Flood Insurance Act to allow for 
local communities to exempt agricultural structures substantially 
damaged by flooding from floodplain management regulations. Such 
structures would not be eligible for any federal disaster relief. 
Further, FEMA is required to either deny flood insurance for these 
structures or charge full-risk rates. Pub. L. No. 103-325, § 580, 108 
Stat. 2160, 2285 (1994) (codified at 42 U.S.C. § 4022(a)(2)). 

[12] To meet the requirement for dry flood-proofing, a nonresidential 
structure must, together with attendant utility and sanitary 
facilities, be designed so that below the base flood level the 
structure is watertight with walls substantially impermeable to the 
passage of water and with structural components having the capability 
of resisting hydrostatic and hydrodynamic loads and effects of 
buoyancy. 44 C.F.R. § 60.3(c)(3)(ii). 

[13] Insurance premiums for structures that receive a variance may be 
higher than they are for structures that comply with the requirement 
to either elevate or dry flood-proof a structure, because premium 
rates reflect the degree of risk the covered property faces. 

[14] FEMA does not categorize policies with grandfathered rates--rates 
that were not changed after properties were remapped into higher risk 
flood zones--as "subsidized" because they are within classes of 
policies that are not subsidized for the class as a whole. However, 
FEMA officials acknowledged that property owners that obtain 
grandfathered rates are being cross-subsidized by other policyholders 
in the same flood zone that are paying higher rates. 

[15] FEMA also subsidizes policies for other properties--for example, 
properties behind certain unfinished or de-accredited levees, certain 
properties built after the initial flood insurance rate maps became 
available, and emergency program properties are subsidized. 

[16] For single-family properties, severe repetitive loss properties 
are those that have incurred four or more claims payments exceeding 
$5,000 each, with a cumulative amount of such payments over $20,000; 
or at least two claims with a cumulative total exceeding the value of 
the property. For multifamily properties, FEMA will define the term by 
regulation. 42 U.S.C. § 4014(h). 

[17] Pub. L. No. 113-89, §§ 5, 15, 128 Stat. at 1022, 1026. In 
addition to these changes, the 2014 Act also required FEMA to refund 
to policyholders premiums paid after July 2012 that exceed the 
subsidized premiums permissible under the 2014 Act. Id. § 3, 128 Stat. 
at 1021. In addition, the act generally added a surcharge of $25 for 
residential properties and $250 for nonresidential properties and 
secondary residences to be deposited in the NFIP reserve fund. Id. § 
8, 128 Stat. at 1023. According to FEMA, the fee will be included on 
all policies, including full-risk rated policies, until all pre-FIRM 
subsidies are eliminated. 

[18] Id. §§ 4, 6, 128 Stat. at 1022, 1023. Specifically, the 2014 Act 
requires FEMA to transition policyholders newly mapped into the SFHA 
to a full-risk rate from a Preferred Risk Policy (PRP) rate at a 
maximum of 18 percent premium increase per year. FEMA offered a PRP 
Eligibility Extension program as a cost-saving option for property 
owners whose buildings had been mapped into SFHAs after October 1, 
2008. The extension allowed policyholders to pay a lower premium rate 
until the policy is converted to the more expensive rate. Beginning 
January 1, 2011, FEMA allowed the lower premium rate to be charged for 
2 years after a revised flood map became effective. On January 1, 
2013, FEMA extended the period for which the lower premium rate could 
be charged, until it implemented changes in premium rates required by 
the Biggert-Waters Act. FEMA introduced a rate change that increased 
premiums for those under the PRP Eligibility Extension program by 20 
percent, as allowed by the Biggert-Waters Act, on October 1, 2013. 
FEMA is now reviewing what will be done with these policies under the 
2014 Act. 

[19] Hydrologic analyses look at the conditions affecting the amount 
of water that flows downstream during a flood. For example, soil and 
vegetation absorb rain and reduce runoff, while pavement and other 
impermeable manmade surfaces increase the flow of runoff and thus the 
risk of flooding. Topographic data assess the elevation of the terrain. 

[20] This information is also described in a Flood Insurance Study. 
The maps and the Flood Insurance Study are adopted by participating 
communities and the flood heights shown on maps and in the study 
become the regulatory BFEs for floodplain management and insurance 
rating in that community. 

[21] According to FEMA officials, some maps produced under the Map 
Modernization initiative were still in progress at the time of our 
review. 

[22] However, according to FEMA officials, some rural or agricultural 
areas would have been a part of these mapping efforts because for Risk 
MAP, FEMA maps on a watershed basis, which is a large area of land 
that may include both populated and unpopulated areas. 

[23] FEMA does not certify levees. Rather, FEMA relies on communities 
and levee owners to provide certification proving that their levees 
meet FEMA's requirements. Once they do, FEMA can show the levee as 
accredited on the flood insurance rate map. For FEMA requirements for 
levee systems, see 44 C.F.R. § 65.10. 

[24] In response to concerns from stakeholders and Congress, FEMA 
began Levee Analysis and Mapping Procedures (LAMP), a pilot program to 
test a new process to analyze and map areas protected by unaccredited 
levees in 2013. Through this process, FEMA will use improved 
technology to account more precisely for the level of protection 
provided by unaccredited levees when mapping flood risk. 

[25] Figure 2 does not include SFHAs in communities whose maps had not 
yet been converted to digital format as of February, 2014. 

[26] We conducted this analysis using FEMA data for all maps that had 
been converted to a digital format by December, 2011. 

[27] Sutter County, California, Yolo County, California, Rapides 
Parish, Louisiana, St. Landry Parish, Louisiana, Duplin County, North 
Carolina, Tyrrell County, North Carolina, Cass County, North Dakota, 
Walsh County, North Dakota. 

[28] According to FEMA, the flood depth--height at which structures 
should be built--is calculated by the difference between the BFE and 
ground elevations that is established by topographic surveys. 

[29] Hurricane Floyd was an event that had a 0.2 percent chance of 
occurring in any given year, destroyed almost 3 million livestock and 
2.5 million acres of crops with over $500 million worth of damages. In 
addition, the total damage of agricultural structures and facilities 
from the hurricane was estimated to be about $256 million. 

[30] Updated levee analysis can result in levee de-accreditation--that 
is, a determination that a levee no longer meets federal design, 
construction, maintenance, and operation standards to provide 
protection from a major flood. Subsequently, areas behind the levees 
can be remapped into SFHAs. See 44 C.F.R. §§ 65.10, 65.14. 

[31] As mentioned earlier, all new and substantially improved or 
substantially damaged structures must be elevated to or above the BFE 
to meet NFIP's elevation requirement. The BFE is the projected 
elevation which floodwater is anticipated to equal or exceed during a 
flood that is estimated to have a 1 percent chance of occurring in any 
given year. 

[32] See FEMA, Wet Flood-proofing Requirements for Structures Located 
in Special Flood Hazard Areas in Accordance with the National Flood 
Insurance Program, Technical Bulletin 7--93, (Washington, D.C.: 
December 1993). The guidance specified that only certain agricultural 
structures can be wet flood-proofed using techniques that will result 
in minimal damage to the building and contents and create no 
additional threats to public safety. For example, confined animal feed 
lots are not allowed to be wet flood-proofed. Because wet flood-
proofed structures are generally exposed to higher risks than those 
that meet the elevation or dry flood-proofing requirements, the 
insurance rates are generally significantly higher. 

[33] As mentioned earlier, FEMA defines a substantial improvement as 
any reconstruction, rehabilitation, addition, or other improvement of 
a structure, the cost of which equals or exceeds 50 percent of the 
market value of the structure before the start of construction of the 
improvement, with exceptions for certain types of structures. 
Substantial damage is damage of any origin for which the cost of 
restoring the structure to its pre-damaged condition would equal or 
exceed 50 percent of the market value of the building before the 
damage occurred. 

[34] According to California's Department of Water Resources and the 
Central Valley Flood Protection Board, California is the top producer 
of agricultural products in the United States. The Central Valley of 
California (where Sutter and Yolo Counties are located), provides 
approximately 25 percent of U.S. food supply; it provides 
approximately 50 percent of U.S.-grown fruits, nuts, and vegetables. 

[35] Section 26 of the 2014 Act directs FEMA to establish guidelines 
for property owners that provide alternative methods of mitigation, 
other than building elevation, to reduce flood risk to residential 
buildings that cannot be elevated due to their structural 
characteristics. The guidelines are also to inform property owners how 
the implementation of such mitigation methods may affect their flood 
insurance premiums. Pub. L. No. 113-89, § 26, 128 Stat. at 1032 
(codified at 42 U.S.C. § 4102(d)). 

[36] For more information, see FEMA, Including Building Codes in the 
National Flood Insurance Program, Fiscal Year 2013 Report to Congress, 
Impact Study for Biggert-Waters Flood Insurance Reform Act of 2012 
(Washington, D.C.: October 2013). 

[37] The premium rate increases we discuss in this section are 
primarily due to recent map updates that have placed portions of 
selected communities in SFHAs. In addition, stakeholders in some 
communities had concerns about rate increases they anticipated due to 
the Biggert-Waters Act. Some of these concerns, however, may no longer 
be relevant because the 2014 Act eliminated some of the sections of 
the Biggert-Waters Act that would have resulted in rate increases for 
some policyholders. 

[38] Many farmers in Sutter County were receiving PRP Eligibility 
Extension program rates, according to the floodplain manager for 
Sutter County. As we previously discussed, FEMA offered the PRP 
Eligibility Extension program as a cost-saving option for property 
owners whose buildings had been mapped into SFHAs after October 1, 
2008. This extension allowed policyholders to pay a lower premium rate 
until the policy is converted to the more expensive rate. On October 
1, 2013, FEMA introduced a rate change that increased premiums for 
those under the PRP Eligibility Extension program by 20 percent. FEMA 
had intended to raise the rates on these policies 20 percent per year 
until they reached the full-risk rate, as allowed under the Biggert-
Waters Act. However, the 2014 Act reduced FEMA's maximum premium 
increase authority from 20 percent to 18 percent, which will apply to 
the policies currently insured in the PRP Eligibility Extension 
program. FEMA is now reviewing what will be done with these policies 
under the 2014 Act. 

[39] However, farmers we spoke with in Yolo County, California, said 
that the county did not allow them to separate their land into 
different parcels in an effort to discourage development. 

[40] Among other requirements, buildings with two or more outside 
rigid walls and a fully secured roof that are affixed to a permanent 
site are considered insurable structures, according to NFIP 
regulations. 44 C.F.R. § 59.1. 

[41] According to FEMA officials, the mandatory purchase requirement 
is regulated by banking regulators, not by FEMA. They stated that FEMA 
did not have the legal authority to require lenders to ensure that 
their customers complied with the mandatory purchase requirement. 

[42] The Flood Disaster Protection Act of 1973, as amended, requires 
that lenders have their interests insured to the lowest of three 
values: (1) the maximum amount of insurance available through NFIP, 
(2) the full replacement value of the building, or (3) the outstanding 
principal balance of the loan. Pub. L. No. 93-234, § 102(a), 87 Stat. 
at 978 (codified as amended at 42 U.S.C. § 4012a(a). In the case of 
agricultural loans that cover several structures, the replacement 
value of a small farm structure, such as a barn or shed, may likely be 
the lesser amount of the three. 

[43] H.R. 3315, 113th Cong. (2013). 

[44] Robert T. Stafford Disaster Relief and Emergency Assistance Act, 
Pub. L. No. 93-288, 88 Stat. 143 (1974) (codified as amended at 42 
U.S.C. §§ 5121-5207). 

[45] We have previously reported that it takes only one catastrophic 
event to change a state from a net contributor to a net beneficiary of 
NFIP. We conducted state-by-state analyses of claims and premiums data 
and found that, for example, Louisiana was a net contributor until 
2004, and it became a net beneficiary primarily because of Hurricanes 
Katrina, Wilma, and Rita. See GAO, Flood Insurance: FEMA's Rate-
Setting Process Warrants Attention, [hyperlink, 
http://www.gao.gov/products/GAO-09-12] (Washington, D.C.: Oct. 31, 
2008). 

[46] Prior studies using modeling have demonstrated that severe 
flooding in this area of California is indeed a real risk. In 2011, 
for emergency planning purposes, scientists from the U.S. Geological 
Survey designed a large, scientifically realistic winter storm 
scenario, "ARkStorm," by combining prehistoric geologic flood history 
in California with modern flood mapping and climate-change 
projections. The hypothetical storm could produce up to 10 feet of 
rain, causing extensive flooding. Specifically, the Central Valley 
would experience flooding 300 miles long and 20 or more miles wide and 
result in agricultural and other losses of nearly $400 billion. 

[47] Under FEMA's prior levee approach before LAMP, a levee system 
that did not meet the NFIP requirements was analyzed and mapped as if 
it had no effect on the landward side of the levee system during the 
base flood. If a levee did meet the requirements, it was accredited, 
and communities with accredited levees may be mapped in a lower risk 
flood zone. 

[48] See GAO, Flood Insurance: More Information Needed on Subsidized 
Properties, [hyperlink, http://www.gao.gov/products/GAO-13-607] 
(Washington D.C.: July 3, 2013). 

[49] The Biggert-Waters Act requires FEMA to enter into a contract 
with the National Academy of Sciences to inform its study of 
participation and affordability for certain policyholders. Pub. L. No. 
112-141, § 100236, 126 Stat. 405, 957 (2012). The study is required to 
include methods to maintain participation, methods to educate 
consumers about flood risk, and alternatives to subsidies to address 
affordability, including means-tested vouchers. FEMA has projected an 
April 2015 completion date for this study. The 2014 Act provides 
additional time--until September 2015--to complete this study. Pub. L. 
No. 113-89, § 16, 128 Stat. 1020, 1026 (2014). It also provides more 
funding for the study and includes several new requirements, such as 
identifying options for maintaining affordability if annual premiums 
increase to an amount greater than 2 percent of the liability coverage 
on the policy. Further, the 2014 Act requires FEMA to submit to 
Congress a draft affordability framework, based in part on the 
affordability study, within 18 months of the study's completion. Id. § 
9, 128 Stat. at 1024. 

[50] FEMA supports a variety of flood mitigation activities that are 
designed to reduce the risk of flood damage and the financial exposure 
of NFIP. These activities, which are mostly implemented at the state 
and local levels, include hazard mitigation planning; the adoption and 
enforcement of floodplain management regulations and building codes; 
and the use of hazard control structures such as levees, dams, and 
floodwalls or natural protective features such as wetlands and dunes. 
Additionally, property-level mitigation options include elevating a 
building to or above the area's base flood elevation, relocating the 
building to an area of less flood risk, or purchasing and demolishing 
the building and turning the property into green space. 

[51] We have also previously reported on the advantages and 
disadvantages of need-based assistance and increased mitigation 
efforts when considering reforming NFIP. For more information, see 
[hyperlink, http://www.gao.gov/products/GAO-13-607]; and Overview of 
GAO's Past Work on the National Flood Insurance Program, [hyperlink, 
http://www.gao.gov/products/GAO-14-297R] (Washington D.C.: Apr. 9, 
2014). 

[52] We defined riverine floodplain as any area lying outside of the 
coastal areas that was at a high risk of flooding. FEMA defines 
coastal areas as those areas that face potential storm surges and wave 
actions. 

[53] Levees are man-made structures, usually earthen embankments, 
designed and constructed in accordance with sound engineering 
practices to contain, control, or divert the flow of water to provide 
protection from temporary flooding. 44 C.F.R. § 59.1. Levees that are 
accredited by FEMA can result in a community being mapped in a flood 
zone with a lower risk than it would be without the accredited levee. 

[54] Pub. L. No. 112-141, Div. F, Tit. II, Subtit. A, 126 Stat. 405, 
916 (2012). 

[55] Pub. L. No. 113-89, 128 Stat. 1020 (2014). 

[56] To define rural areas, we used Census Urban, Urbanized Area, 
Urban Cluster and Rural Population, 2010: United States data. 

[57] We focused on riverine SFHAs because the area was where we were 
likely to find agricultural structures that might be subject to NFIP 
building requirements. 

[58] We are not able to report premium and claims data for the year 
1999 due to technical issues. 

[59] Because FEMA was not able to provide us similar data for 1999, we 
are excluding premiums and claims for that year in this analysis. 

[60] For more information on our methodology, please see appendix I. 

[61] See [hyperlink, http://www.gao.gov/products/GAO-09-12]. 

[62] We chose the NFIP communities that consisted of the 
unincorporated portions of each of these counties because those are 
the most rural portions of the counties. The NFIP community ID numbers 
are: Sutter County-060394#; Yolo County-060423#; Rapides Parish-
220145#; St. Landry Parish-220165#; Duplin County-370083#; Tyrrell 
County-370232#; Cass County, North Dakota-385362; and Walsh County-
380135#. As we described previously, for Cass County we expanded the 
area from which we chose farmers and rural residents to speak with 
because the NFIP community that consists of the unincorporated parts 
of Cass County had not yet adopted its new map with an expanded SFHA. 

[63] The top agricultural commodities were determined using data from 
the USDA's National Agricultural Statistics Service's 2012 Census of 
Agriculture. 

[64] The flood maps for Rapides Parish, Louisiana and Cass County, 
North Dakota are not available because FEMA has not yet digitized 
these maps. 

[End of section] 

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