[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 62 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                 H. R. 62

     To revise the national flood insurance program to provide for 
mitigation insurance coverage and claims payments to reduce damages to 
   structures suffering severe or repetitive flooding or subject to 
    shoreline erosion, to promote compliance with requirements for 
     mandatory purchase of flood insurance, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

 Mr. Bereuter introduced the following bill; which was referred to the 
            Committee on Banking, Finance and Urban Affairs

                           September 14, 1993

      Additional sponsors: Ms. Kaptur, Mr. de Lugo, and Mr. Castle

_______________________________________________________________________

                                 A BILL


 
     To revise the national flood insurance program to provide for 
mitigation insurance coverage and claims payments to reduce damages to 
   structures suffering severe or repetitive flooding or subject to 
    shoreline erosion, to promote compliance with requirements for 
     mandatory purchase of flood insurance, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``National Flood 
Insurance Compliance, Mitigation, and Erosion Management Act of 1993''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Declaration of purpose under the National Flood Insurance Act 
                            of 1968.
                          TITLE I--DEFINITIONS

Sec. 101. Flood Disaster Protection Act of 1973.
Sec. 102. National flood insurance act of 1968.
            TITLE II--COMPLIANCE AND INCREASED PARTICIPATION

Sec. 201. Existing flood insurance purchase requirements.
Sec. 202. Expanded flood insurance purchase requirements.
Sec. 203. Escrow of flood insurance payments.
Sec. 204. Fine for failure to require flood insurance or notify.
Sec. 205. Ongoing compliance with flood insurance purchase 
                            requirements.
Sec. 206. Notice requirements.
Sec. 207. Standard hazard determination forms.
Sec. 208. Financial Institutions Examination Council.
Sec. 209. Conforming amendment.
 TITLE III--RATINGS AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT 
                                PROGRAMS

Sec. 301. Community rating system and incentives for community 
                            floodplain management.
Sec. 302. Funding.
            TITLE IV--MITIGATION OF FLOOD AND EROSION RISKS

Sec. 401. Repeal of flooded property purchase and loan program.
Sec. 402. Termination of erosion-threatened structures program.
Sec. 403. Flood and erosion damage mitigation insurance.
Sec. 404. Limitations on flood insurance coverage in areas of extreme 
                            erosion risk.
Sec. 405. Modification of floodplain management provisions.
Sec. 406. Riverine erosion study.
                  TITLE V--FLOOD INSURANCE TASK FORCE

Sec. 501. Flood Insurance Interagency Task Force.
                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Maximum flood insurance coverage amounts.
Sec. 602. Flood insurance program arrangements with private insurance 
                            entities.
Sec. 603. Updating of flood maps and assessment and mapping of erosion 
                            hazard zones.
Sec. 604. Funding for increased administrative and operational 
                            responsibilities.
Sec. 605. Regulations.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) with respect to flood damage, a structured prefunded 
        insurance program is preferable to a response based on post-
        disaster relief;
            (2) the Federal Government and State and local governments 
        must work together to successfully carry out the national flood 
        insurance program;
            (3) a Federal flood insurance program that combines 
        predisaster mitigation efforts together with an insurance and 
        compliance program will reduce the physical and economic 
        effects of flood damage on the Federal Government, State, and 
        local governments, and individuals;
            (4) the national flood insurance program and the citizens 
        of the United States have benefited from a low incidence of 
        major storms and hurricanes in recent years;
            (5) the present reserve in the national flood insurance 
        program of nearly $400,000,000 remains extremely vulnerable to 
        another major storm causing billions of dollars in damage 
        claims, which could deplete the national flood insurance fund, 
        exacerbate the Federal budget deficit, and threaten the safety 
        and soundness of financing institutions holding uninsured 
        mortgages on properties in flood-prone areas;
            (6) only 1,700,000 of an estimated 11,000,000 households in 
        special flood hazard areas are protected by flood insurance;
            (7) the number of properties insured against floods 
        remained roughly constant during the 1980's despite continuing 
        growth in real estate activity in coastal, lakeshore, and 
        riverine areas;
            (8) requiring flood insurance coverage for structures 
        subject to private mortgages (in addition to those subject to 
        federally related mortgages) will result in a more 
        comprehensive flood-risk insurance program;
            (9) the floodplain management and land use and control 
        measures adopted by communities participating in the national 
        flood insurance program have resulted in lower claims for 
        structures constructed in compliance with such measures;
            (10) the national flood insurance program should require 
        and provide for notification regarding flood insurance purchase 
        requirements under the program to homeowners, mortgage lenders, 
        and mortgage servicers;
            (11) lending to aid development of areas within the Coastal 
        Barrier Resources System is inherently risky and can affect the 
        financial condition of federally insured financial 
        institutions;
            (12) the Federal regulatory agencies for depository and 
        nondepository institutions should, in the course of 
        examinations of institutions, pay particular attention to the 
        quality of loans that would aid the development of coastal 
        barriers within the Coastal Barrier Resources System;
            (13) incentives in the form of reduced premium rates for 
        flood insurance under the national flood insurance program 
        should be provided in communities that have adopted and 
        enforced exemplary or particularly effective measures for 
        floodplain management;
            (14) a community-based approach to mitigation and erosion 
        management, to reduce losses in floodplains, is the most 
        comprehensive, effective, and cost-efficient method of 
        minimizing losses in floodplains and reducing disaster 
        assistance expenditures;
            (15) such community-based mitigation and loss prevention 
        methods should be incorporated in the national flood insurance 
        program;
            (16) unprecedented growth in population and development has 
        occurred along coasts and rivers of the United States and it is 
        estimated that a significant portion of the United States 
        population is exposed to the hazard of floods, flooding 
        disasters, and erosion damage;
            (17) repeat claims, which involve about 2 percent of total 
        insured properties, account for 32 percent of the total losses 
        from the flood insurance fund, amounting to over $1,000,000,000 
        since January 1978;
            (18) no comprehensive Federal program exists to evaluate 
        and provide technical assistance and funds for the mitigation 
        of damages to repetitively and severely damaged structures or 
        insured structures threatened by shoreline erosion, and such a 
        program would reduce the vulnerability of the Federal 
        Government to flood losses;
            (19) no comprehensive Federal program exists to assist in 
        the removal of structures out of high risk areas, such as 
        regulatory floodways and coastal high hazard zones, before 
        disaster strikes;
            (20) flood and erosion hazards can be significantly reduced 
        by deterring development in wetlands and open-space and 
        recreational areas;
            (21) gradual, long-term retreat of portions of the Nation's 
        coastline and the resulting inland advancement of flood hazards 
        is increasing the exposure of insured structures to flood 
        damages;
            (22) a comprehensive coastal erosion management program can 
        provide a variety of mitigation alternatives to reduce erosion 
        losses to existing structures and protect new structures from 
        erosion losses, thereby reducing Federal expenditures due to 
        erosion;
            (23) since enactment in 1988, section 1306(c) of the 
        National Flood Insurance Act of 1968 has not functioned as 
        envisioned or intended and has resulted in a preference for 
        demolition of buildings subject to erosion damages, which is 
        more costly than relocating structures;
            (24) there has been a recognized need for the Federal 
        Emergency Management Agency to formally assess, on an ongoing 
        basis, the accuracy of flood hazard maps for communities, 
        thereby ensuring that maps are updated and revised in a timely 
        fashion as needed;
            (25) the level of flood insurance coverage that an 
        individual can purchase has not been increased since 1977;
            (26) due to substantial increases in construction costs, 
        many property owners are prevented from purchasing flood 
        insurance for the replacement value of the building, 
        potentially resulting in an owner not receiving a payment to 
        fully restore flood-damaged property; and
            (27) wise use of the floodplain minimizes adverse impacts 
        upon the natural and beneficial functions of the floodplain, 
        such as moderation of flooding, retention of floodwaters, 
        reduction of erosion and sedimentation, preservation of water 
        quality, groundwater recharge, and provision of fisheries and 
        wildlife habitat.

SEC. 3. DECLARATION OF PURPOSE UNDER THE NATIONAL FLOOD INSURANCE ACT 
              OF 1968.

    Section 1302(e) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4001(e)) is amended--
            (1) by redesignating clauses (3), (4), and (5), as clauses 
        (4), (5), and (6), respectively; and
            (2) by inserting after the comma at the end of clause (2) 
        the following: ``(3) encourage State and local governments to 
        protect natural and beneficial floodplain functions that reduce 
        flood-related losses,''.

                          TITLE I--DEFINITIONS

SEC. 101. FLOOD DISASTER PROTECTION ACT OF 1973.

    (a) In General.--Section 3(a) of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4003(a)) is amended--
            (1) by striking paragraph (5) and inserting the following 
        new paragraph:
            ``(5) `Federal entity for lending regulation' means the 
        Board of Governors of the Federal Reserve System, the Federal 
        Deposit Insurance Corporation, the Comptroller of the Currency, 
        the Office of Thrift Supervision, and the National Credit Union 
        Administration, and with respect to a particular regulated 
        lending institution means the entity primarily responsible for 
        the supervision, approval, or regulation of the institution;'';
            (2) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (3) by inserting after paragraph (6) the following new 
        paragraphs:
            ``(7) `lender' includes any regulated lending institution, 
        other lending institution, and Federal agency (to the extent 
        the agency makes direct loans subject to the provisions of this 
        Act), but does not include any agency engaged primarily in the 
        purchase of mortgage loans;
            ``(8) `other lending institution' means any lending 
        institution that is not subject to the supervision, approval, 
        regulation, or insuring of any Federal entity for lending 
        regulation and that is not a Federal agency, but does not 
        include institutions engaged primarily in the purchase of 
        mortgage loans; and
            ``(9) `regulated lending institution' means any bank, 
        savings and loan association, credit union, or similar 
        institution subject to the supervision, approval, regulation, 
        or insuring of a Federal entity for lending regulation.''.
    (b) Conforming Amendments.--
            (1) Requirements to purchase flood insurance.--Section 
        102(b) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
        4012a(b)) is amended by striking ``Each Federal instrumentality 
        responsible for the supervision, approval, regulation, or 
        insuring of banks, savings and loan associations, or similar 
        institutions shall by regulation direct such institutions'' and 
        inserting ``Each Federal entity for lending regulation shall by 
        regulation direct regulated lending institutions''.
            (2) Effect of nonparticipation in flood insurance 
        program.--Section 202(b) of the Flood Disaster Protection Act 
        of 1973 (42 U.S.C. 4106(b)) is amended by striking ``Federal 
        instrumentality described in such section shall by regulation 
        require the institutions'' and inserting ``Federal entity for 
        lending regulation (with respect to regulated lending 
        institutions), the Secretary of Housing and Urban Development 
        (with respect to other lending institutions), and the 
        appropriate head of each Federal agency acting as a lender, 
        shall by regulation require the lenders''.

SEC. 102. NATIONAL FLOOD INSURANCE ACT OF 1968.

    (a) In General.--Section 1370(a) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4121(a)) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (3) by inserting after paragraph (6) the following new 
        paragraphs:
            ``(7) the term `coastal' means relating to the coastlines 
        and bays of the tidal waters of the United States or the 
        shorelines of the Great Lakes, but does not refer to bayous, 
        riverine areas, and riverine portions of estuaries;
            ``(8) the term `Federal entity for lending regulation' 
        means the Board of Governors of the Federal Reserve System, the 
        Federal Deposit Insurance Corporation, the Comptroller of the 
        Currency, the Office of Thrift Supervision, and the National 
        Credit Union Administration, and with respect to a particular 
        regulated lending institution means the entity primarily 
        responsible for the supervision, approval, or regulation of the 
        institution;
            ``(9) the term `lender' includes any regulated lending 
        institution, other lending institution, and Federal agency (to 
        the extent the agency makes direct loans subject to the 
        provisions of this Act), but does not include any agency 
        engaged primarily in the purchase of mortgage loans;
            ``(10) the term `natural and beneficial floodplain 
        functions' means (A) the functions associated with the natural 
        or relatively undisturbed floodplain that moderate flooding, 
        retain flood waters, or reduce erosion and sedimentation, and 
        (B) ancillary beneficial functions, including maintenance of 
        water quality, recharge of ground water, and provision of 
        fisheries and wildlife habitat;
            ``(11) the term `regulated lending institution' means a 
        bank, savings and loan association, credit union, or similar 
        institution subject to the supervision, approval, regulation, 
        or insuring of a Federal entity for lending regulation;
            ``(12) the term `other lending institution' means any 
        lending institution that is not subject to the supervision, 
        approval, regulation, or insuring of any Federal entity for 
        lending regulation and that is not a Federal agency, but does 
        not include institutions engaged primarily in the purchase of 
        mortgage loans; and''.
    (b) Conforming Amendment.--Section 1322(d) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by striking 
``federally supervised, approved, regulated, or insured financial 
institution'' and inserting ``regulated lending institution''.

            TITLE II--COMPLIANCE AND INCREASED PARTICIPATION

SEC. 201. EXISTING FLOOD INSURANCE PURCHASE REQUIREMENTS.

    Section 102(a) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a(a)) is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) Paragraph (1) may not be construed to permit the provision of 
any amount of financial assistance with respect to any building or 
mobile home and related personal property for which flood insurance is 
required under such paragraph, unless the requirements under such 
paragraph are complied with in full. The prohibitions and requirements 
under paragraph (1) relating to financial assistance may not be waived 
for any purpose.''.

SEC. 202. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.

    (a) In General.--Section 102(b) of the Flood Disaster Protection 
Act of 1973 (42 U.S.C. 4012a(b)), as amended by the preceding 
provisions of this Act, is further amended--
            (1) by inserting ``(1)'' after ``(b)'';
            (2) by inserting ``(after consultation and coordination 
        with the Financial Institutions Examination Council established 
        under the Federal Financial Institutions Examination Council 
        Act of 1974)'' before ``shall by regulation''; and
            (3) by adding at the end the following new paragraphs:
    ``(2) The Secretary of Housing and Urban Development (after 
consultation and coordination with the Financial Institutions 
Examination Council) shall by regulation direct that any other lending 
institution may not make, increase, extend, or renew any loan secured 
by improved real estate or a mobile home located or to be located in an 
area that has been identified by the Director of the Federal Emergency 
Management Agency as an area having special flood hazards and in which 
flood insurance has been made available under the National Flood 
Insurance Act of 1968, unless the building or mobile home and any 
personal property securing such loan is covered for the term of the 
loan by flood insurance in the amount provided in paragraph (1).
    ``(3) A Federal agency may not make, increase, extend, or renew any 
loan secured by improved real estate or a mobile home located or to be 
located in an area that has been identified by the Director of the 
Federal Emergency Management Agency as an area having special flood 
hazards and in which flood insurance has been made available under the 
National Flood Insurance Act of 1968, unless the building or mobile 
home and any personal property securing such loan is covered for the 
term of the loan by flood insurance in the amount provided in paragraph 
(1). The relevant head of each Federal agency acting as a lender shall 
issue any regulations necessary to carry out this paragraph. Such 
regulations shall be consistent with and substantially identical to the 
regulations issued under paragraphs (1) and (2).
    ``(4) Notwithstanding any other Federal or State law, any lender 
may charge the borrower a reasonable fee (as determined by the 
Director) for the costs of determining whether the improved real estate 
or mobile home securing the loan is located in an area of special flood 
hazards, but only if such determination is made pursuant to the making, 
increasing, extending, or renewing of a loan described under paragraph 
(1), (2), or (3) that is initiated by the borrower.
    ``(5) If a borrower under a loan disputes or challenges the 
determination of the lender that the improved real estate or mobile 
home securing the loan is located in an area of special flood hazards, 
the lender shall review and consider any relevant information submitted 
to the lender by the borrower.''.
    (b) Applicability.--The amendment made by subsection (a)(3) shall 
apply only with respect to--
            (1) any loan made, increased, extended, or renewed after 
        the expiration of the 1-year period beginning on the date of 
        the enactment of this Act; and
            (2) any loan outstanding after the expiration of the 5-year 
        period beginning on the date of the enactment of this Act.

SEC. 203. ESCROW OF FLOOD INSURANCE PAYMENTS.

    (a) In General.--Section 102 of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4012a) is amended by adding at the end the following 
new subsection:
    ``(d)(1) For loans secured by residential real estate, each Federal 
entity for lending regulation (with respect to any loans of regulated 
lending institutions) and the Secretary of Housing and Urban 
Development (with respect to any loans of other lending institutions), 
after consultation and coordination with the Financial Institutions 
Examination Council, shall by regulation direct that, if the lender or 
other servicer of the loan requires the escrowing of taxes, insurance 
premiums, or any other charges with respect to property secured under 
residential real estate loans, then any premiums and fees for flood 
insurance under the National Flood Insurance Act of 1968 for the 
residential real estate shall be paid to the lender or servicer of the 
loan. Premiums and fees paid to the lender or servicer shall be paid in 
a manner sufficient to make payments as due for the duration of the 
loan. Upon receipt of the premiums, the lender or servicer of the loan 
shall deposit the premiums in an escrow account on behalf of the 
borrower. Upon receipt of a notice from the Director or the provider of 
the insurance that insurance premiums are due, the lender or servicer 
shall pay from the escrow account to the provider of the insurance the 
amount of insurance premiums owed.
    ``(2) The appropriate head of each Federal agency acting as a 
lender shall by regulation require and provide for escrow and payment 
of any flood insurance premiums and fees relating to residential 
property securing loans made by the agency under the circumstances and 
in the manner provided under paragraph (1). Any regulations issued 
under this paragraph shall be consistent with and substantially 
identical to the regulations issued under paragraph (1).
    ``(3) Escrow accounts established pursuant to this subsection shall 
be subject to the provisions of section 10 of the Real Estate 
Settlement Procedures Act of 1974.
    ``(4)(A) Notwithstanding any State or local law, the Federal 
entities for lending regulation, the Secretary of Housing and Urban 
Development (after consultation and coordination with the Financial 
Institutions Examination Council), and the appropriate heads of Federal 
agencies acting as lenders shall by regulation direct that any lender 
who purchases flood insurance or renews a contract for flood insurance 
on behalf of or as an agent of a borrower of a loan secured by 
residential real estate for which (i) flood insurance is required, and 
(ii) an escrow account for payment of taxes, insurance premiums, or 
other charges has not been established, shall provide to the borrower 
written notice of the purchase or renewal (as the Director determines 
appropriate) on at least 2 separate occasions before the purchase or 
renewal.
    ``(B) The notice under this paragraph shall contain the following 
information:
            ``(i) A statement that the lender will purchase or renew 
        the flood insurance on behalf of or as an agent of the 
        borrower.
            ``(ii) The date on which such purchase or renewal will 
        occur.
            ``(iii) The cost of the insurance coverage as purchased or 
        renewed by the lender.
            ``(iv) A statement that the borrower may avoid the purchase 
        or renewal by the lender by purchasing flood insurance coverage 
        under the national flood insurance program or from private 
        insurers.
            ``(v) Any other information that the Director considers 
        appropriate.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply with respect to--
            (1) any loan made, increased, extended, or renewed after 
        the expiration of the 1-year period beginning on the date of 
        the enactment of this Act; and
            (2) any loan outstanding after the expiration of the 5-year 
        period beginning on the date of the enactment of this Act.

SEC. 204. FINE FOR FAILURE TO REQUIRE FLOOD INSURANCE OR NOTIFY.

    Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a), as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new subsection:
    ``(e)(1) Any regulated or other lending institution that is found 
to have a pattern or practice of committing violations under paragraph 
(2) shall be assessed a civil penalty by the appropriate Federal entity 
for lending regulation (with respect to regulated lending institutions) 
or the Secretary of Housing and Urban Development (with respect to any 
other lending institutions) of not more than $350 for each such 
violation. A penalty under this subsection may be issued only after 
notice and an opportunity for a hearing on the record.
    ``(2) The violations referred to in paragraph (1) shall be--
            ``(A) after the date of the enactment of the National Flood 
        Insurance Compliance, Mitigation, and Erosion Management Act of 
        1993, making, increasing, extending, or renewing a loan in 
        violation of escrow requirements under subsection (d) of this 
        section; and
            ``(B) with respect to any loan made, increased, extended or 
        renewed after the expiration of the 1-year period beginning on 
        such date of enactment and any loan outstanding after the 
        expiration of the 5-year period beginning on such date of 
        enactment, making, increasing, extending, or renewing any such 
        loan in violation of the regulations issued pursuant to 
        subsection (b) of this section or the notice requirements under 
        section 1364 of the National Flood Insurance Act of 1968.
    ``(3) The total amount of penalties assessed under this subsection 
against any single lender for any calendar year may not exceed 
$100,000.
    ``(4) Notwithstanding any State or local law, for purposes of this 
subsection, any lender that purchases flood insurance or renews a 
contract for flood insurance on behalf of or as an agent of a borrower 
of a loan for which flood insurance is required shall be considered to 
have complied with the regulations issued under subsection (b).
    ``(5) Any sale or other transfer of a loan by a lender who has 
committed a violation under paragraph (1), that occurs subsequent to 
the violation, shall not affect the liability of the transferring 
lender with respect to any penalty under this subsection. A lender 
shall not be liable for any violations relating to a loan committed by 
another lender who previously held the loan.
    ``(6) Any penalties collected under this subsection shall be paid 
into the National Flood Insurance Fund established under section 1310 
of the National Flood Insurance Act of 1968.
    ``(7) Any penalty under this subsection shall be in addition to any 
civil remedy or criminal penalty otherwise available.
    ``(8) No penalty may be imposed under this subsection for any 
violation under paragraph (1) after the expiration of the 5-year period 
beginning on the date of the occurrence of the violation.''.

SEC. 205. ONGOING COMPLIANCE WITH FLOOD INSURANCE PURCHASE 
              REQUIREMENTS.

    (a) In General.--Section 102 of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4012a), as amended by the preceding provisions of 
this Act, is further amended by adding at the end the following new 
subsection:
    ``(f)(1) Except as provided in paragraphs (2), (3), and (4), before 
the sale or transfer of any loan secured by improved real estate or a 
mobile home, the seller or transferor of the loan shall determine 
whether the property is in an area that has been designated by the 
Director as an area having special flood hazards. The seller or 
transferor shall, before sale or transfer, notify the purchaser or 
transferee and any servicer of the loan in writing regarding the 
results of the determination. A determination under this paragraph 
shall be evidenced using the standard hazard determination form under 
section 1365 of the National Flood Insurance Act of 1968.
    ``(2) For any loan secured by improved real estate or a mobile 
home, a determination and notice under paragraph (1) shall not be 
required if, during the 5-year period ending on the date of the sale or 
transfer of the loan--
            ``(A) a determination and notice under paragraph (1) has 
        been made for the property secured by the loan; or
            ``(B)(i) the loan has been made, increased, extended, or 
        renewed; and
            ``(ii) the lender making, increasing, extending, or 
        renewing the loan was subject, at the time of such transaction, 
        to regulations issued pursuant to paragraph (1), (2), or (3) of 
        subsection (b).
    ``(3)(A) For any loan secured by improved real estate or a mobile 
home that is sold or transferred by the Federal Deposit Insurance 
Corporation acting in its corporate capacity or in its capacity as 
conservator or receiver, the purchaser or transferee of the loan shall 
determine whether the property is in an area that has been designated 
by the Director as an area having special flood hazards.
    ``(B) Such determination and notice shall not be required for any 
loan--
            ``(i) sold or transferred to an entity under the control of 
        the Federal Deposit Insurance Corporation; or
            ``(ii) for which the purchaser or transferee exercises any 
        available option to transfer or put the loan back to the 
        Federal Deposit Insurance Corporation.
    ``(C) A purchaser or transferee of a loan required to make a 
determination and notification under subparagraph (A) shall notify the 
Director and any servicer of the loan of the results of the 
determination (using the standard hazard determination form under 
section 1365 of the National Flood Insurance Act of 1968) before the 
expiration of the 90-day period beginning on the later of (i) the 
purchase or transfer of the loan, or (ii) the expiration of any option 
that the purchaser or transferee may have to transfer or put the loan 
back to the Federal Deposit Insurance Corporation.
    ``(4)(A) For any loan secured by improved real estate or a mobile 
home that is sold or transferred by the Resolution Trust Corporation 
acting in its corporate capacity or in its capacity as a conservator or 
receiver, the purchaser or transferee of the loan shall determine 
whether the property is in an area that has been designated by the 
Director as an area having special flood hazards if--
            ``(i) the Resolution Trust Corporation acquires the loan 
        after the date of the effectiveness of this subsection and 
        sells or transfers the loan before the expiration of the 12-
        month period beginning on such effective date; or
            ``(ii) the Corporation holds the loan on the date of the 
        effectiveness of this subsection and sells or transfers the 
        loan before the expiration of the 6-month period beginning on 
        such effective date.
    ``(B) A purchaser or transferee of a loan required to make a 
determination and notification under subparagraph (A) shall notify the 
Director and any servicer of the loan of the results of the 
determination (using the standard hazard determination form under 
section 1365 of the National Flood Insurance Act of 1968) before the 
expiration of the 90-day period beginning upon the purchase or transfer 
of the loan.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply with respect to any loan outstanding or entered into after the 
expiration of the 1-year period beginning on the date of the enactment 
of this Act.

SEC. 206. NOTICE REQUIREMENTS.

    Section 1364 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104a) is amended to read as follows:

                         ``notice requirements

    ``Sec. 1364. (a) Notification of Special Flood Hazards.--
            ``(1) Lending institutions.--Each Federal entity for 
        lending regulation (with respect to regulated lending 
        institutions) and the Secretary of Housing and Urban 
        Development (with respect to other lending institutions), after 
        consultation and coordination with the Financial Institutions 
        Examination Council, shall by regulation require such 
        institutions, as a condition of making, increasing, extending, 
        or renewing any loan secured by improved real estate or a 
        mobile home located or to be located in an area that has been 
        identified by the Director under this title or the Flood 
        Disaster Protection Act of 1973 as an area having special flood 
        hazards, to notify the purchaser or lessee (or obtain 
        satisfactory assurances that the seller or lessor has notified 
        the purchaser or lessee) and the servicer of the loan of such 
        special flood hazards, in writing, a reasonable period in 
        advance of the signing of the purchase agreement, lease, or 
        other documents involved in the transaction. The regulations 
        shall also require that the lenders retain a record of the 
        receipt of the notices by the purchaser or lessee and the 
        servicer.
            ``(2) Federal agencies as lenders.--The appropriate head of 
        each Federal agency acting as a lender shall by regulation 
        require notification in the manner provided under paragraph (1) 
        with respect to any loan that is made by the agency and secured 
        by improved real estate or a mobile home located or to be 
        located in an area that has been identified by the Director 
        under this title or the Flood Disaster Protection Act of 1973 
        as an area having special flood hazards. Any regulations issued 
        under this paragraph shall be consistent with and substantially 
        identical to the regulations issued under paragraph (1).
            ``(3) Contents of notice.--Written notification required 
        under this subsection shall include--
                    ``(A) a warning, in a form to be established in 
                consultation with and subject to the approval of the 
                Director, stating that the real estate or mobile home 
                securing the loan is located or is to be located in an 
                area having special flood hazards;
                    ``(B) a description of the flood insurance purchase 
                requirements under section 102(b) of the Flood Disaster 
                Protection Act of 1973;
                    ``(C) a statement that flood insurance coverage may 
                be purchased under the national flood insurance program 
                and is also available from private insurers; and
                    ``(D) any other information that the Director 
                considers necessary to carry out the purposes of the 
                national flood insurance program.
    ``(b) Notification of Change of Loan Holder and Servicer.--
            ``(1) Lending institutions.--Each Federal entity for 
        lending regulation (with respect to regulated lending 
        institutions) and the Secretary of Housing and Urban 
        Development (with respect to other lending institutions), after 
        consultation and coordination with the Financial Institutions 
        Examination Council, shall by regulation require such 
        institutions, as a condition of making, increasing, extending, 
        renewing, selling, or transferring any loan described in 
        subsection (a)(1), to notify the Director (or the designee of 
        the Director) in writing during the term of the loan of the 
        owner and servicer of the loan. Such institutions shall also 
        notify the Director (or such designee) of any change in the 
        owner or servicer of the loan, not later than 60 days after the 
        effective date of such change. The regulations under this 
        subsection shall provide that upon any sale or transfer of a 
        loan, the duty to provide notification under this subsection 
        shall transfer to the transferee of the loan.
            ``(2) Federal agencies as lenders.--The appropriate head of 
        each Federal agency acting as a lender shall by regulation 
        provide for notification in the manner provided under paragraph 
        (1) with respect to any loan described in subsection (a)(1) 
        that is made by the agency. Any regulations issued under this 
        paragraph shall be consistent with and substantially identical 
        to the regulations issued under paragraph (1) of this 
        subsection.
    ``(c) Notification of Expiration of Insurance.--The Director (or 
the designee of the Director) shall, not less than 45 days before the 
expiration of any contract for flood insurance under this title, issue 
notice of such expiration by first class mail to the owner of the 
property, the servicer of any loan secured by the property covered by 
the contract, and the owner of the loan.''.

SEC. 207. STANDARD HAZARD DETERMINATION FORMS.

    Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101 et seq.) is amended by adding at the end the following new 
section:

                 ``standard hazard determination forms

    ``Sec. 1365. (a) Development.--The Director, in consultation with 
representatives of the mortgage and lending industry, the Federal 
entities for lending regulation, the Federal agencies acting as 
lenders, and any other appropriate individuals, shall develop standard 
written and electronic forms for applications relating to real estate 
loans and mortgages for determining flood hazard exposure of a 
property.
    ``(b) Design and Contents.--
            ``(1) Purpose.--The form under subsection (a) shall be 
        designed to facilitate a determination of the exposure to flood 
        hazards of structures located on the property to which the loan 
        application relates. The form shall be consistent with and 
        appropriate to facilitate compliance with the provisions of 
        this title.
            ``(2) Contents.--The form shall require identification of 
        the type of flood-risk zone in which the property is located, 
        the complete map and panel numbers for the property, and the 
        date of the map used for the determination, with respect to 
        flood hazard information on file with the Director. If the 
        property is not located in an area of special flood hazard the 
        form shall require a statement to such effect and shall 
        indicate the complete map and panel numbers of the property. If 
        the complete map and panel numbers for the property are not 
        available because the property is not located in a community 
        that is participating in the national flood insurance program 
        or because no map exists for the relevant area, the form shall 
        require a statement to such effect. The form shall provide for 
        inclusion or attachment of any relevant documents indicating 
        revisions or amendments to maps.
    ``(c) Required Use.--The Federal entities for lending regulation 
shall by regulation require the use of the form under this section by 
regulated lending institutions. The appropriate head of each Federal 
agency acting as a lender shall by regulation provide for the use of 
the form with respect to any loan made by such agency. The Federal 
National Mortgage Association and the Federal Home Loan Mortgage 
Corporation shall by regulation require use of the form in connection 
with loans purchased by such corporations. The Secretary of Housing and 
Urban Development shall encourage the use of the form by other lending 
institutions.
    ``(d) Guarantees Regarding Information.--In providing information 
regarding special flood hazards on the form developed under this 
section (or otherwise required of a lender not required to use the form 
under this section) any lender making, increasing, extending, or 
renewing a loan secured by improved real estate or a mobile home may 
provide for the acquisition or determination of such information to be 
made by a person other than such institution, only to the extent such 
person guarantees the accuracy of the information. The Director shall 
by regulations establish requirements relating to the nature and manner 
of such guarantees.
    ``(e) Electronic Form.--The Federal entities for lending 
regulation, the Secretary of Housing and Urban Development, and the 
appropriate head of each Federal agency acting as a lender shall by 
regulation require any lender using the electronic form developed under 
this section with respect to any loan to make available upon the 
request of such Federal entity, Secretary, or agency head, a written 
form under this section for such loan within 48 hours after such 
request.''.

SEC. 208. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

    Section 1006 of the Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3305) is amended by adding at the end 
the following new subsection:
    ``(g) The council shall consult and assist the Federal entities for 
lending regulation and the Secretary of Housing and Urban Development 
in developing and coordinating uniform standards and requirements for 
use by lenders as provided under the National Flood Insurance Act of 
1968 and the Flood Disaster Protection Act of 1973.''.

SEC. 209. CONFORMING AMENDMENT.

    The section heading for section 102 of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a) is amended to read as follows:

   ``flood insurance purchase and compliance requirements and escrow 
                              accounts''.

 TITLE III--RATINGS AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT 
                                PROGRAMS

SEC. 301. COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY 
              FLOODPLAIN MANAGEMENT.

    Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4022) is amended--
            (1) by inserting after ``Sec. 1315.'' the following: ``(a) 
        Requirement for Participation in Flood Insurance Program.--''; 
        and
            (2) by adding at the end the following new subsection:
    ``(b) Community Rating System and Incentives for Community 
Floodplain Management.--
            ``(1) Authority and goals.--The Director shall carry out a 
        community rating system program to evaluate the measures 
        adopted by areas (and subdivisions thereof) in which the 
        Director has made flood insurance coverage available to provide 
        for adequate land use and control provisions consistent with 
        the comprehensive criteria for such land management and use 
        under section 1361, to facilitate accurate risk-rating, to 
        promote flood insurance awareness, and to complement adoption 
        of more effective measures for floodplain and coastal erosion 
        management.
            ``(2) Incentives.--The program under this subsection shall 
        provide incentives in the form of adjustments in the premium 
        rates for flood insurance coverage in areas that the Director 
        determines have adopted and enforced the goals of the community 
        rating system under this subsection. In providing incentives 
        under this paragraph, the Director may provide for additional 
        adjustments in premium rates for flood insurance coverage in 
        areas that the Director determines have implemented measures 
        relating to the protection of natural and beneficial floodplain 
        functions.
            ``(3) Funds.--The Director shall carry out the program 
        under this subsection with amounts, as the Director determines 
        necessary, from the National Flood Insurance Fund under section 
        1310 and any other amounts that may be appropriated for such 
        purpose.
            ``(4) Reports.--The Director shall submit a report to the 
        Congress regarding the program under this subsection not later 
        than the expiration of the 2-year period beginning on the date 
        of the enactment of the National Flood Insurance Compliance, 
        Mitigation, and Erosion Management Act of 1993. The Director 
        shall submit a report under this paragraph not less than every 
        2 years thereafter. Each report under this paragraph shall 
        include an analysis of the cost-effectiveness and other 
        accomplishments and shortcomings of the program and any 
        recommendations of the Director for legislation regarding the 
        program.''.

SEC. 302. FUNDING.

    Section 1310(a) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4017(a)) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting a semicolon; and
            (3) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) for carrying out the program under section 
        1315(b);''.

            TITLE IV--MITIGATION OF FLOOD AND EROSION RISKS

SEC. 401. REPEAL OF FLOODED PROPERTY PURCHASE AND LOAN PROGRAM.

    (a) Repeal.--Section 1362 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4103) is repealed.
    (b) Transition Phase.--Notwithstanding subsection (a), during the 
period beginning on the date of the enactment of this Act and ending on 
the date that flood and erosion mitigation insurance is first made 
generally available under section 1306a of the National Flood Insurance 
Act of 1968, the Director of the Federal Emergency Management Agency 
may enter into loan and purchase commitments as provided under section 
1362 of such Act (as in effect immediately before the enactment of this 
Act).
    (c) Savings Provision.--Notwithstanding subsection (a), the 
Director shall take any action necessary to comply with any purchase or 
loan commitment entered into before the expiration of the period 
referred to in subsection (b) pursuant to authority under section 1362 
of the National Flood Insurance Act of 1968 or subsection (b).

SEC. 402. TERMINATION OF EROSION-THREATENED STRUCTURES PROGRAM.

    (a) In General.--Section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013) is amended by striking subsection (c).
    (b) Transition Phase.--Notwithstanding subsection (a), during the 
period beginning on the date of the enactment of this Act and ending on 
the date that flood and erosion mitigation insurance is first made 
generally available under section 1306a of the National Flood Insurance 
Act of 1968, the Director of the Federal Emergency Management Agency 
may pay amounts under flood insurance contracts for demolition or 
relocation of structures as provided in section 1306(c) of the National 
Flood Insurance Act of 1968 (as in effect immediately before the 
enactment of this Act).
    (c) Savings Provision.--Notwithstanding subsection (a), the 
Director shall take any action necessary to make payments under flood 
insurance contracts pursuant to any commitments made before the 
expiration of the period referred to in subsection (b) pursuant to the 
authority under section 1306(c) of the National Flood Insurance Act of 
1968 or subsection (b).

SEC. 403. FLOOD AND EROSION DAMAGE MITIGATION INSURANCE.

    (a) In General.--The National Flood Insurance Act of 1968 (42 
U.S.C. 4001 et seq.) is amended by inserting after section 1306 the 
following new section:

           ``flood and erosion mitigation insurance coverage

    ``Sec. 1306a. (a) In General.--The Director shall provide, under 
the flood insurance program under this title, for mitigation insurance 
under this section to reduce damage and losses from future floods to 
structures located in special flood hazard areas and other areas and to 
prevent damages to structures located along shorelines that are subject 
to erosion.
    ``(b) Separate Contract and Premiums.--The Director shall make 
flood and erosion mitigation insurance available as provided under this 
section and as a supplement to or under a separate contract for flood 
insurance coverage under this title, and shall provide for the 
establishment and payment of separate premiums under subsection (i) and 
separate claims under this section for such mitigation insurance.
    ``(c) Community Eligibility Requirements for Erosion Mitigation 
Coverage.--Mitigation insurance claim payments for the purposes of 
relocating or demolishing structures subject to imminent erosion damage 
under subsection (f)(2)(C) may not be provided under this section 
unless an appropriate public body shall have adopted erosion management 
measures that contain the following requirements:
            ``(1) Prohibition of construction in 30-year erosion 
        setback areas.--New or substantially improved construction (as 
        defined by the Director) shall not be permitted within the 30-
        year erosion setback determined by the Director under section 
        1360(g).
            ``(2) Limited construction in 60-year erosion setback 
        areas.--Only readily movable new and substantially improved 
        construction that consists of 1 to 4 dwelling units, and 
        structures relocated pursuant to subsection (h)(1)(A)(i) shall 
        be permitted within the 60-year erosion setback determined by 
        the Director under section 1360(g).
    ``(d) Available and Required Coverage.--
            ``(1) Required coverage.--Each Federal instrumentality 
        responsible for the supervision, approval, regulation, or 
        insuring of banks, savings and loan associations, or similar 
        institutions shall by regulation direct such institutions not 
        to make, increase, extend, or renew, after the expiration of 
        the 1-year period beginning on the date of the enactment of the 
        National Flood Insurance Compliance, Mitigation, and Erosion 
        Management Act of 1993, any loan secured by improved real 
        estate or a mobile home described in this paragraph, unless the 
        building or mobile home and any personal property securing such 
        loan is covered for the term of the loan by mitigation 
        insurance under this section at a rate determined necessary by 
        the Director. Mitigation insurance shall be required under this 
        paragraph for any property--
                    ``(A) located in an area of special flood hazards 
                on which a structure was constructed before the 
                adoption of a flood insurance rate map under section 
                1360(a)(2) by the relevant community participating in 
                the flood insurance program under this title; or
                    ``(B) located in an erosion hazard zone (as 
                determined by the Director under section 1360(g)) along 
                the shoreline of the Great Lakes or the tidal waters of 
                the United States, in a community that has adopted 
                adequate erosion management measures under subsection 
                (c) of this section.
            ``(2) Available coverage.--The Director may make available 
        mitigation insurance for any property not required to be 
        covered under paragraph (1) that is--
                    ``(A) located in an area of special flood hazards 
                on which a structure was constructed or substantially 
                improved after the adoption of a flood insurance rate 
                map under section 1360(a)(2) by the relevant community 
                participating in the flood insurance program under this 
                title; or
                    ``(B) not located in an area of special flood 
                hazards.
            ``(3) Erosion hazard zone surcharge.--The Director shall 
        assess surcharges under subsection (i)(2) on the flood 
        insurance contracts for any structure located along the 
        shoreline of the Great Lakes or the coastline of the tidal 
        waters of the United States in an erosion hazard zone (as 
        determined by the Director under section 1360(g)) if the 
        structure is located in a community that has not adopted the 
        erosion management measures under subsection (c) of this 
        section.
            ``(4) Certification of erosion danger.--The Director shall 
        provide for determination and certification under subsection 
        (f)(2)(C)(i) of structures subject to imminent danger of 
        collapse or subsidence located in communities that have not 
        adopted the erosion management measures under subsection (c).
    ``(e) Eligible Structures.--A contract for mitigation insurance 
under this section shall provide for payment of a claim only for 
structures that, at the time of the event for which the claim is made, 
have been continuously covered by both flood and mitigation insurance 
as follows:
            ``(1) 5-year flood insurance coverage.--The structure shall 
        have been covered by a contract for flood insurance under this 
        title for the shorter of--
                    ``(A) the 5-year period ending on the date of the 
                event for which the claim is made; or
                    ``(B) the period beginning on the date of purchase 
                of the structure by the owner making the claim.
            ``(2) 5-year mitigation insurance coverage.--The structure 
        shall have been covered by a contract for mitigation insurance 
        under this section for the shorter of--
                    ``(A) the 5-year period ending on the date of the 
                event for which the claim is made;
                    ``(B) the period beginning on the date of the 
                availability of mitigation insurance under this 
                section; or
                    ``(C) the period beginning on the date of purchase 
                of the structure by the owner making the claim.
    ``(f) Eligible Damage and Mitigation Claims.--A contract for 
mitigation insurance under this section shall provide for payment of a 
claim for mitigation activities under subsection (g) or (h) only for 
structures eligible under subsection (e) that suffer any of the 
following damage or imminent damage:
            ``(1) Flood damage.--The structure shall have--
                    ``(A) incurred flood damage on not less than 2 
                previous occasions (including the event for which the 
                claim is made) during the 5-year period ending on the 
                date of the event for which the claim is made, the 
                damage for which on average is greater than 25 percent 
                of the value of the structure (as determined by the 
                Director according to the procedure under subsection 
                (h)(2)(A)); or
                    ``(B) incurred substantial flood damage (as such 
                term is defined by the Director) as a result of the 
                event for which the claim is made.
            ``(2) Imminent erosion damage.--The structure shall be--
                    ``(A) located on land that is along the shoreline 
                of the Great Lakes or the tidal waters of the United 
                States, in an erosion hazard zone determined by the 
                Director under section 1360(g);
                    ``(B) located in a community that has adopted the 
                erosion management measures under subsection (c); and
                    ``(C) subject to imminent danger of collapse or 
                subsidence as a result of erosion or undermining caused 
                by waves, currents of water, or bluff recession, as--
                            ``(i) certified by the Director or the 
                        appropriate Federal, State, or local authority 
                        (as the Director shall determine); or
                            ``(ii) condemned by the appropriate State 
                        or local authority.
    ``(g) Claims for Repetitive or Substantial Flood Damage.--Claims 
under a contract for mitigation insurance for flood damage described 
under subsection (f)(1) shall be subject to the following requirements:
            ``(1) Use of payment amounts.--Any amounts received for 
        payment of a claim under such subsection may be used only as 
        follows:
                    ``(A) Mitigation activities.--For activities to 
                demolish, relocate, elevate, or floodproof a structure, 
                as the Director shall determine after evaluating--
                            ``(i) the extent of damage;
                            ``(ii) the physical characteristics of the 
                        structure;
                            ``(iii) the severity of the 100-year 
                        frequency flood at the site of the structure; 
                        and
                            ``(iv) any applicable State and local 
                        regulations and codes.
                    ``(B) Cost effectiveness.--For activities that are 
                the most cost-effective and technically feasible, in 
                the determination of the Director, with respect to 
                affording the structure protection from the 100-year 
                frequency flood and enabling the structure to comply 
                with the land use and control measures adopted by the 
                community under section 1315(a), except that if no 
                cost-effective or technically feasible activities are 
                available, the Director may, on a case-by-case basis, 
                consider and permit use of such amounts for alternative 
                activities that do not fully enable a structure to 
                comply with such standards.
                    ``(C) Required use of substantial flood damage 
                payment amounts.--If received for payment of a claim 
                for substantial flood damage described under 
                subparagraph (B) of subsection (f)(1), the payment 
                shall be used as provided under this paragraph for 
                activities that afford the structure protection from 
                the 100-year frequency flood and enable the structure 
                to comply with the land use and control measures 
                adopted by the community under section 1315(a).
            ``(2) Effect of payment of claim.--
                    ``(A) Compliance with floodplain management 
                measures.--For any structure for which a payment is to 
                be made on a claim under a contract for mitigation 
                insurance for flood damage described under subparagraph 
                (A) or (B) of subsection (f)(1) for the purpose of 
                affording the structure protection from the 100-year 
                frequency flood and enabling the structure to comply 
                with the land use and control measures adopted by the 
                community under section 1315(a)--
                            ``(i) upon the first renewal of the flood 
                        insurance contract for such property occurring 
                        after the payment of such claim, the Director 
                        shall provide for premium rates for flood 
                        insurance for such structure based only on the 
                        risk involved and sound actuarial principles; 
                        and
                            ``(ii) notwithstanding subsection (d)(1), 
                        upon the completion of mitigation activities, 
                        the provisions of such subsection requiring the 
                        purchase of mitigation insurance shall not 
                        apply.
                    ``(B) Noncompliance with floodplain management 
                measures.--For any structure for which a payment is 
                made on a claim under a contract for mitigation 
                insurance for repetitive flood damage described under 
                subsection (f)(1)(A) for the purpose of conducting 
                floodproofing and other activities that do not afford 
                the structure protection from the 100-year frequency 
                flood nor enable the structure to comply with the land 
                use and control measures adopted by the community under 
                section 1315(a)--
                            ``(i) the Director shall continue to 
                        provide for premium rates for flood insurance 
                        for such structure based on the procedure 
                        otherwise generally used by the Director for 
                        determining such rate;
                            ``(ii) the Director shall continue to 
                        require the purchase of mitigation insurance 
                        under subsection (d)(1), but shall provide for 
                        discounted premium rates for such mitigation 
                        insurance under subsection (i)(3)(C)(ii) at a 
                        rate that reflects the risk of future 
                        mitigation insurance payments for flood claims 
                        for substantial damage under subsection 
                        (f)(1)(B); and
                            ``(iii) the Director shall provide for an 
                        increase in the minimum deductible for flood 
                        insurance for such structure based on the level 
                        of protection against flood damage afforded the 
                        structure by such activities.
            ``(3) Effect of nonpayment of repetitive damage claim.--
        With respect to any structure for which a payment is not made 
        for a claim under a contract for mitigation insurance for 
        repetitive flood damage described under subsection (f)(1)(A) 
        because of the unavailability of a cost-effective alternative 
        under paragraph (1)(B) of this subsection--
                    ``(A) the Director shall continue to provide for 
                premium rates for flood insurance for such structure 
                based on the procedure generally used by the Director 
                for determining such rate;
                    ``(B) the Director shall provide for an increase in 
                the minimum deductible for flood insurance and provide 
                for further increases in the deductible upon any 
                further payments of claims under the flood insurance 
                contract for such structure; and
                    ``(C) the Director shall continue to require the 
                purchase of mitigation insurance under subsection 
                (d)(1), and shall provide for premium rates under 
                subsection (i) that reflect the payment of possible 
                future mitigation insurance claims under subsection 
                (f)(1)(B).
            ``(4) Procedure for payment of mitigation claims.--The 
        Director shall establish procedures for--
                    ``(A) issuance of payment of claims for mitigation 
                activities under this subsection in increments based on 
                the percentage of the mitigation activity completed; 
                and
                    ``(B) on-site and other verification of the 
                percentage of the mitigation activity completed.
    ``(h) Claims for Imminent Erosion Damage.--Claims under a contract 
for mitigation insurance for imminent erosion damage described under 
subsection (f)(2) shall be subject to the following requirements:
            ``(1) Use of payment amounts.--Any amounts received for 
        payment of a claim under such subsection may be used only as 
        follows:
                    ``(A) Relocation activities.--For activities to 
                relocate the structure--
                            ``(i) landward of the 30-year erosion 
                        setback established under section 1360(g)(3), 
                        if the structure is a readily movable structure 
                        consisting of 1 to 4 dwelling units; and
                            ``(ii) landward of the 60-year erosion 
                        setback established under section 1360(g)(2), 
                        if the structure is any other type of movable 
                        structure.
                    ``(B) Demolition activities.--For activities to 
                demolish the structure if--
                            ``(i) the remaining portion of the lot or 
                        parcel of property on which the structure is 
                        located is inadequate to accommodate the 
                        relocation of the structure in conformance with 
                        subparagraph (A) and no alternative location 
                        exists for relocation of the structure that (in 
                        the determination of the Director) would be 
                        cost-effective;
                            ``(ii) the cost of relocating the structure 
                        is greater than the value of the structure as 
                        determined under the procedure under paragraph 
                        (2)(A); or
                            ``(iii) the structure is not of such 
                        structural soundness (in the determination of 
                        the Director) to permit relocation in a safe 
                        manner.
            ``(2) Amount of claim payment.--The Director shall pay 
        claims for imminent erosion damage described under subsection 
        (f)(2) that the Director determines are in compliance with 
        regulations issued pursuant to subsection (k) in the following 
        amounts:
                    ``(A) Relocation claims.--For relocation of a 
                structure under paragraph (1)(A), an amount not to 
                exceed 40 percent of the value of the structure, as the 
                Director shall determine according to the lesser of--
                            ``(i) the fair market value of a comparable 
                        structure not subject to imminent collapse or 
                        subsidence;
                            ``(ii) the price paid for the structure and 
                        any improvement to the structure, as adjusted 
                        for inflation in accordance with an index 
                        determined by the Director to be appropriate; 
                        or
                            ``(iii) the value of the structure under 
                        the flood insurance contract issued pursuant to 
                        this title.
                    ``(B) Demolition claims.--For demolition of a 
                structure under paragraph (1)(B)--
                            ``(i) following final determination that 
                        the requirements of paragraph (1)(B) have been 
                        met, an amount equal to 40 percent of the value 
                        of the structure as determined under the 
                        procedure under subparagraph (A); and
                            ``(ii) following demolition of the 
                        structure (including any septic containment 
                        system) prior to collapse, the remaining 60 
                        percent of the value of the structure and 10 
                        percent of the value of the structure, or the 
                        actual cost of demolition, whichever is less.
            ``(3) Claim payment and coverage limitation regarding 
        mitigation activities.--With respect to any structure covered 
        by mitigation insurance that is eligible for a claim for 
        imminent erosion damage described under subsection (f)(2), 
        after the expiration of the 2-year period beginning on the date 
        of the certification or condemnation of the structure under 
        subparagraph (C) of such subsection, the Director--
                    ``(A) may not pay any amounts for relocation or 
                demolition activities;
                    ``(B) shall provide for the cancellation of the 
                mitigation insurance coverage for such structure;
                    ``(C) shall provide for the flood insurance 
                coverage under this title to pay, in the event of any 
                single occasion of flood damage, not more than 40 
                percent of the value of the structure (as the Director 
                shall determine under the procedure under paragraph 
                (2)(A)) or the actual damage incurred, whichever is 
                less; and
                    ``(D) shall provide for the cancellation of the 
                flood insurance coverage for such structure after the 
                payment for any damages pursuant to subparagraph (C).
            ``(4) Claim payment and coverage limitation regarding 
        community participation.--With respect to any structure covered 
        under a contract for flood insurance under this title that is 
        located in a community that has not adopted the erosion 
        management measures under subsection (c), after the 
        certification or condemnation of the structure pursuant to 
        subsection (d)(4) the Director shall--
                    ``(A) provide for a claim under flood insurance 
                coverage under this title, in the event of any single 
                occasion of flood damage, in an amount of not more than 
                40 percent of the value of the structure (as the 
                Director shall determine under the procedure under 
                paragraph (2)(A)) or the actual damage incurred, 
                whichever is less; and
                    ``(B) provide for the cancellation of the flood 
                insurance coverage for such structure after the payment 
                for any damages pursuant to subparagraph (A).
    ``(i) Mitigation Insurance Premiums and Surcharges.--
            ``(1) In general.--The Director shall on occasion, after 
        consultation with the advisory committee under section 1318, 
        appropriate representatives of the pool formed or otherwise 
        created under section 1331, and appropriate representatives of 
        the insurance authorities of the respective States, prescribe 
        by regulation under subsection (1)--
                    ``(A) chargeable premium rates for any types and 
                classes of properties for which mitigation insurance 
                coverage shall be available under this section; and
                    ``(B) the terms and conditions under which, and the 
                areas (including subdivisions thereof) within which 
                such rates shall apply.
            ``(2) Surcharges.--The Director shall provide for 
        surcharges under contracts for flood insurance under this title 
        for structures described in subsection (d)(3) and establish 
        rates for such surcharges, including rates for surcharges for 
        each of the areas within the 10-year, 30-year, and 60-year 
        erosion setbacks established under section 1360(g).
            ``(3) General rate calculation.--Mitigation insurance rates 
        and surcharge rates under this subsection for each structure 
        shall, insofar as practicable--
                    ``(A) be based on a consideration of the number and 
                amount of claims previously paid under a contract for 
                flood insurance under this title for the structure;
                    ``(B) be determined for each of the areas within 
                the 10-year, 30-year, and 60-year erosion setbacks 
                under section 1360(g); and
                    ``(C) provide for discounted rates and surcharges 
                for structures--
                            ``(i) for which the date of the 
                        construction precedes the date of the 
                        establishment of the relevant erosion hazard 
                        zones under section 1360(g)(1) in which the 
                        structure is located; and
                            ``(ii) for which mitigation activities 
                        under subsection (g)(2)(B)(ii) have been 
                        completed, at a rate that reflects the level of 
                        protection against flood damage afforded the 
                        structure by such activities.
            ``(4) Administrative costs.--The rates and surcharges 
        established by the Director under this subsection may include 
        any amount for administrative expenses of carrying out the 
        mitigation insurance program under this section as the Director 
        determines necessary, pursuant to consultation as provided 
        under paragraph (1).
    ``(j) Appeals.--The Director shall provide for appeals by owners of 
structures covered by a contract for mitigation insurance under this 
section that are eligible for a mitigation claim payment, for the 
purposes of challenging--
            ``(1) the eligibility status of the structure under 
        subsections (e) and (f); and
            ``(2) the mitigation action selected by the Director under 
        subsection (g)(1) or (h)(1).
    ``(k) Regulations.--The Director shall promulgate regulations and 
guidelines to implement the provisions of this section.''.
    (b) Definitions.--Section 1370(a) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4121), as amended by section 102(a) of this Act, 
is further amended by adding at the end the following new paragraph:
            ``(13) the term `mitigation insurance' means coverage under 
        the national flood insurance program under this title for flood 
        and erosion damage and mitigation activities, as provided in 
        section 1306a.''.

SEC. 404. LIMITATIONS ON FLOOD INSURANCE COVERAGE IN AREAS OF EXTREME 
              EROSION RISK.

    The National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.) 
is amended by inserting after section 1313 the following new section:

          ``properties located within 10-year erosion setback

    ``Sec. 1314. After the initial establishment of erosion setbacks 
under section 1360(g), the Director may not make flood insurance 
available with respect to any new or substantially improved 
construction located within the 10-year erosion setback established by 
the Director under such section.''.

SEC. 405. MODIFICATION OF FLOODPLAIN MANAGEMENT PROVISIONS.

    Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4022), as amended by section 301 of this Act, is further amended by 
adding at the end the following new subsection:
    ``(c) Modification of Requirement for Participation for Areas not 
Adopting Erosion Management Measures.--After the date of the adoption 
by a community of the applicable flood insurance rate map for the 
community under section 1360(a)(2), new flood insurance coverage may 
not be provided under this title in any area (or subdivision thereof) 
for which the appropriate public body has not adopted erosion 
management measures in accordance with the requirements of section 
1306a(c), unless the appropriate public body shall have adopted 
adequate land use and control measures under subsection (a) that also 
contain the following requirements:
            ``(1) Building standards.--Any new or substantially 
        improved construction located in an erosion hazard zone under 
        section 1360(g)(1) shall comply with building standards 
        applicable for coastal high hazard areas.
            ``(2) Base flood elevation standards.--Any new or 
        substantially improved construction located in an erosion 
        hazard zone established by the Director under section 
        1360(g)(1) shall comply with whichever of the following 
        elevation standards affords the greater protection from flood 
        damage:
                    ``(A) The elevation standard (existing at the time 
                of the construction) affording protection for the 100-
                year frequency flood that is applicable to the area 
                within the 10-year erosion setback established by the 
                Director under such subsection.
                    ``(B) The actual elevation standard for the 
                construction site (existing at the time of 
                construction) affording protection for the 100-year 
                frequency flood.''.

SEC. 406. RIVERINE EROSION STUDY.

    (a) Study.--The Director of the Federal Emergency Management Agency 
shall conduct a study to determine the feasibility of identifying and 
establishing erosion rates for communities subject to riverine erosion 
hazards and the best manner of identifying and establishing such rates. 
Under the study the Director shall--
            (1) investigate and assess existing and state-of-the-art 
        technical methodologies for assessing riverine erosion;
            (2) examine natural riverine processes, environmental 
        conditions, and human-induced changes to the banks of rivers 
        and streams, examples of erosion and likely causes, and 
        examples of erosion control and reasons for their performance; 
        and
            (3) analyze riverine erosion management strategies, the 
        technical standards, methods, and data necessary to support 
        such strategies, and methods of administering such strategies 
        through the national flood insurance program.
    (b) Report.--The Director shall submit a report to the Congress 
regarding the findings and conclusions of the study under this section 
not later than the expiration of the 2-year period beginning on the 
date of the enactment of this Act. The report shall include any 
recommendations of the Director regarding appropriate methods and 
approaches for identifying and determining riverine erosion rates and 
management strategies relating to riverine erosion.

                  TITLE V--FLOOD INSURANCE TASK FORCE

SEC. 501. FLOOD INSURANCE INTERAGENCY TASK FORCE.

    (a) Establishment.--There is hereby established an interagency task 
force to be known as the Flood Insurance Task Force (in this section 
referred to as the ``Task Force'').
    (b) Membership.--
            (1) In general.--The Task Force shall be composed of 7 
        members, who shall be the designees of--
                    (A) the Federal Insurance Administrator;
                    (B) the Federal Housing Commissioner;
                    (C) the Secretary of Veterans Affairs;
                    (D) the Administrator of the Farmers Home 
                Administration;
                    (E) the Administrator of the Small Business 
                Administration;
                    (F) a designee of the Financial Institutions 
                Examination Council;
                    (G) the chairman of the Board of Directors of the 
                Federal Home Loan Mortgage Corporation;
                    (H) the chairman of the Board of Directors of the 
                Federal National Mortgage Association;
                    (I) the Under Secretary of Commerce for Oceans and 
                Atmosphere;
                    (J) the Director of the United States Fish and 
                Wildlife Service; and
                    (K) the Administrator of the Environmental 
                Protection Agency.
            (2) Qualifications.--Members of the Task Force shall be 
        designated for membership on the Task Force by reason of 
        demonstrated knowledge and competence regarding the national 
        flood insurance program.
    (c) Duties.--The Task Force shall carry out the following duties:
            (1) Make recommendations to the head of each Federal agency 
        and corporation referred to under subsection (b)(1) regarding 
        establishment or adoption of standardized enforcement 
        procedures among such agencies and corporations responsible for 
        enforcing compliance with the requirements under the national 
        flood insurance program to ensure fullest possible compliance 
        with such requirements.
            (2) Conduct a study of the extent to which Federal agencies 
        and the secondary mortgage market can provide assistance in 
        ensuring compliance with the requirements under the national 
        flood insurance program and submit to the Congress a report 
        describing the study and any conclusions.
            (3) Conduct a study of the extent to which existing 
        programs of Federal agencies and corporations for compliance 
        with the requirements under the national flood insurance 
        program can serve as a model for other Federal agencies 
        responsible for enforcing compliance, and submit to the 
        Congress a report describing the study and any conclusions.
            (4) Develop guidelines regarding enforcement and compliance 
        procedures, based on the studies and findings of the Task Force 
        and publishing the guidelines in a usable format.
    (d) Noncompensation.--Members of the Task Force shall receive no 
additional pay by reason of their service on the Task Force.
    (e) Chairperson.--The members of the Task Force shall elect one 
member as chairperson of the Task Force.
    (f) Meetings and Action.--The Task Force shall meet at the call of 
the chairman or a majority of the members of the Task Force and may 
take action by a vote of the majority of the members. The Federal 
Insurance Administrator shall coordinate and call the initial meeting 
of the Task Force.
    (g) Officers.--The chairperson of the Task Force may appoint any 
officers to carry out the duties of the Task Force under subsection 
(c).
    (h) Staff of Federal Agencies.--Upon request of the chairperson of 
the Task Force, the head of any of the Federal agencies and 
corporations referred to under subsection (b)(1) may detail, on a 
nonreimbursable basis, any of the personnel of such agency to the Task 
Force to assist the Task Force in carrying out its duties under this 
Act.
    (i) Powers.--In carrying out this section, the Task Force may hold 
hearings, sit and act at times and places, take testimony, receive 
evidence and assistance, provide information, and conduct research as 
the Task Force considers appropriate.
    (j) Subcommittee on Natural and Beneficial Functions of the 
Floodplain.--The members of the Task Force appointed under subsections 
(b)(1) (I), (J), and (K) shall constitute a select subcommittee which, 
in addition to their duties under subsection (c), shall make 
recommendations regarding the implementation of the provisions of the 
National Flood Insurance Compliance, Mitigation, and Erosion Management 
Act of 1993 that deal with protection of the natural and beneficial 
functions of the floodplain.
    (k) Termination.--The Task Force shall terminate upon the 
expiration of the 24-month period beginning upon the designation of the 
last member to be designated under subsection (b)(1).

                   TITLE VI--MISCELLANEOUS PROVISIONS

SEC. 601. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.

    (a) In General.--Section 1306(b) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4013(b)) is amended--
            (1) in paragraph (1)(A)--
                    (A) by inserting ``and'' after the comma at the end 
                of clause (i);
                    (B) by striking ``, and'' at the end of clause (ii) 
                and inserting ``; and''; and
                    (C) by striking clause (iii);
            (2) by striking subparagraph (B) of paragraph (1) and 
        inserting the following new subparagraph:
                    ``(B) in the case of any nonresidential property, 
                including churches--
                            ``(i) $100,000 aggregate liability for each 
                        structure, and
                            ``(ii) $100,000 aggregate liability for any 
                        contents related to each structure;'';
            (3) by striking subparagraph (C) of paragraph (1);
            (4) in paragraph (2), by striking ``so as to enable'' and 
        all that follows through the end of the paragraph and inserting 
        ``up to an amount, including the limits specified in clause (i) 
        of subparagraph (A) of paragraph (1), of $250,000 multiplied by 
        the number of dwelling units in the building;'';
            (5) in paragraph (3), by striking ``so as to enable'' and 
        all that follows through the end of the paragraph and inserting 
        ``up to an amount of $90,000 for any single-family dwelling and 
        $240,000 for any residential structure containing more than one 
        dwelling unit;''; and
            (6) by striking paragraph (4) and inserting the following 
        new paragraph:
            ``(4) in the case of any nonresidential property, including 
        churches, additional flood insurance in excess of the limits 
        specified in clauses (i) and (ii) of subparagraph (B) of 
        paragraph (1) shall be made available to every insured upon 
        renewal and every applicant for insurance up to an amount of 
        $2,400,000 for each structure and $2,400,000 for any contents 
        related to each structure; and''.
    (b) Removal of Ceiling on Coverage Required.--Section 1306(b) of 
the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is 
amended--
            (1) in paragraph (5), by striking ``; and'' at the end and 
        inserting a period; and
            (2) by striking paragraph (6).
    (c) Conforming Amendments.--Section 1306(b)(5) of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4013(b)(5)) is amended--
            (1) by striking ``(A), (B), or (C)'' and inserting ``(A) or 
        (B)''; and
            (2) by striking ``(1)(C)''.

SEC. 602. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH PRIVATE INSURANCE 
              ENTITIES.

    Section 1345(b) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4081(b)) is amended by striking the period at the end and 
inserting the following: ``and without regard to the provisions of the 
Federal Advisory Committee Act (5 U.S.C. App.).''.

SEC. 603. UPDATING OF FLOOD MAPS AND ASSESSMENT AND MAPPING OF EROSION 
              HAZARD ZONES.

    Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101) is amended by adding at the end the following new subsections:
    ``(e) Once during each 5-year period (the 1st such period beginning 
on the date of the enactment of the National Flood Insurance 
Compliance, Mitigation, and Erosion Management Act of 1993) or more 
often as the Director determines necessary because of storm-induced 
erosion, increased watershed development, or other extraordinary 
situations, the Director shall assess the need to revise and update all 
floodplain areas and flood risk zones identified, delineated, or 
established under this section.
    ``(f) The Director shall revise and update any floodplain areas and 
flood-risk zones--
            ``(1) upon the determination of the Director, according to 
        the assessment under subsection (e), that revision and updating 
        are necessary for the areas and zones; or
            ``(2) upon the request from any State or local government 
        stating that specific floodplain areas or flood-risk zones in 
        the State or locality need revision or updating, if sufficient 
        technical data justifying the request is submitted and the unit 
        of government making the request agrees to provide funds in an 
        amount equal to the amount of funds provided by the Director 
        (or the equivalent value of data, technical analysis, or other 
        in-kind services) for the requested revision or update.
    ``(g)(1) Not later than the expiration of the 6-year period 
beginning on the date of the enactment of the National Flood Insurance 
Compliance, Mitigation, and Erosion Management Act of 1993, the 
Director shall assess, identify, and map, before all areas along the 
shorelines of the Great Lakes and the tidal waters of the United States 
that have special erosion hazards (in this section referred to as 
`erosion hazard zones'), as provided in this subsection.
    ``(2) On each flood insurance rate map established under this 
section, the Director shall identify and provide legible demarcation 
for areas that are subject to special erosion hazards within a 60-year 
period based on past annual average rates of shoreline retreat in such 
areas (in this section referred to as the `60-year erosion setback').
    ``(3) On each flood insurance rate map established under this 
section, the Director shall provide information by area regarding the 
existing annual average rate of erosion for each area, so that users of 
the maps can delineate boundaries for areas subject to erosion within 
10 years (in this section referred to as the `10-year erosion setback') 
and within 30 years (in this section referred to as the `30-year 
erosion setback').
    ``(4) The Director shall provide for revising and updating erosion 
hazard zones as frequently as the Director determines to be necessary 
for purposes of this title. In revising the geographical boundaries of 
erosion hazard zones, the Director shall place special emphasis on 
considering--
            ``(A) the 10-year erosion setback, based on the past annual 
        average rates of shoreline and coastline retreat in such areas;
            ``(B) areas (or subdivisions thereof) that are experiencing 
        or have recently experienced erosion rates in excess of the 
        annual average erosion rate, due to storms, high lake levels, 
        or other factors; and
            ``(C) areas where erosion control measures have been 
        implemented or erosion rates have been otherwise significantly 
        altered by manmade or induced activity.''.

SEC. 604. FUNDING FOR INCREASED ADMINISTRATIVE AND OPERATIONAL 
              RESPONSIBILITIES.

    (a) Availability of Fund.--Section 1310(a) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4017(a)), as amended by section 302 of 
this Act, is amended--
            (1) in the matter preceding paragraph (1), by inserting 
        ``(except as otherwise provided)'' after ``without fiscal year 
        limitation''; and
            (2) by adding at the end the following new paragraphs:
            ``(7) for administrative costs necessary to develop and 
        service the program for mitigation insurance under section 
        1306a, including costs necessary to provide technical 
        assistance in determining and monitoring the appropriate 
        mitigation action for structures under such section;
            ``(8) for assessment and mapping of erosion hazard zones 
        under section 1360(g), except that the fund shall be available 
        for the purpose under this paragraph in an amount not to exceed 
        an aggregate of $25,000,000 over the 6-year period beginning on 
        the date of the enactment of the National Flood Insurance 
        Compliance, Mitigation, and Erosion Management Act of 1993; and
            ``(9) for the revision and updating of erosion hazard zones 
        under section 1360(g)(4), except that the fund shall be 
        available for the purpose under this paragraph in an amount not 
        to exceed $2,000,000 in each fiscal year beginning after the 
        expiration of the 6-year period beginning on the date of the 
        enactment of the National Flood Insurance Compliance, 
        Mitigation, and Erosion Management Act of 1993.''.
    (b) Credits of Fund.--Section 1310(b) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4017(b)) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) by redesignating paragraph (6) as paragraph (7); and
            (3) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) any penalties collected under section 102(e) of the 
        Flood Disaster Protection Act of 1973.''.

SEC. 605. REGULATIONS.

    The Director of the Federal Emergency Management Agency, the 
Secretary of Housing and Urban Development, and any appropriate head of 
any Federal agency may each issue any regulations necessary to carry 
out the applicable provisions of this Act and the applicable amendments 
made by this Act.

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