[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 253 Reported in House (RH)]

                                                 Union Calendar No. 152
108th CONGRESS
  1st Session
                                H. R. 253

                          [Report No. 108-266]

 To amend the National Flood Insurance Act of 1968 to reduce losses to 
  properties for which repetitive flood insurance claim payments have 
                               been made.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 8, 2003

Mr. Bereuter (for himself and Mr. Blumenauer) introduced the following 
    bill; which was referred to the Committee on Financial Services

                           September 5, 2003

        Additional sponsors: Mr. Petri, Mr. Frost, and Mr. Terry

                           September 5, 2003

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on January 
                                8, 2003]

_______________________________________________________________________

                                 A BILL


 
 To amend the National Flood Insurance Act of 1968 to reduce losses to 
  properties for which repetitive flood insurance claim payments have 
                               been made.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Two Floods and You Are Out of the 
Taxpayers' Pocket Act of 2003''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) the national flood insurance program (A) identifies the 
        flood risk, (B) provides flood risk information to the public, 
        (C) encourages State and local governments to make appropriate 
        land use adjustments to constrict the development of land which 
        is exposed to flood damage and minimize damage caused by flood 
        losses, and (D) makes flood insurance available on a nationwide 
        basis that would otherwise not be available, to accelerate 
        recovery from floods, mitigate future losses, save lives, and 
        reduce the personal and national costs of flood disasters;
            (2) the national flood insurance program insures 
        approximately 4,400,000 policyholders;
            (3) approximately 48,000 properties currently insured under 
        the program have experienced, within a 10-year period, two or 
        more flood losses where each such loss exceeds the amount 
        $1,000;
            (4) approximately 10,000 of these repetitive-loss 
        properties have experienced either two or three losses that 
        cumulatively exceed building value or four or more losses, each 
        exceeding $1,000;
            (5) repetitive-loss properties constitute a significant 
        drain on the resources of the national flood insurance program, 
        costing about $200,000,000 annually;
            (6) repetitive-loss properties comprise approximately one 
        percent of currently insured properties but are expected to 
        account for 25 to 30 percent of claims losses;
            (7) the vast majority of repetitive-loss properties were 
        built before local community implementation of floodplain 
        management standards under the program and thus are eligible 
        for subsidized flood insurance;
            (8) while some property owners take advantage of the 
        program allowing subsidized flood insurance without requiring 
        mitigation action, others are trapped in a vicious cycle of 
        suffering flooding, then repairing flood damage, then suffering 
        flooding, without the means to mitigate losses or move out of 
        harm's way;
            (9) mitigation of repetitive-loss properties through 
        buyouts, elevations, relocations, or flood-proofing will 
        produce savings for policyholders under the program and for 
        Federal taxpayers through reduced flood insurance losses and 
        reduced Federal disaster assistance;
            (10) a strategy of making mitigation offers aimed at high-
        priority repetitive-loss properties and shifting more of the 
        burden of recovery costs to property owners who choose to 
        remain vulnerable to repetitive flood damage can encourage 
        property owners to take appropriate actions that reduce loss of 
        life and property damage and benefit the financial soundness of 
        the program; and
            (11) the method for addressing repetitive-loss properties 
        should be flexible enough to take into consideration legitimate 
        circumstances that may prevent an owner from taking a 
        mitigation action.

SEC. 3. EXTENSION OF PROGRAM AND CONSOLIDATION OF AUTHORIZATIONS.

    The National Flood Insurance Act of 1968 is amended as follows:
            (1) Borrowing authority.--In the first sentence of section 
        1309(a) (42 U.S.C. 4016(a)), by striking ``through December'' 
        and all that follows through ``, and'' and inserting the 
        following: ``through the date specified in section 1319, and''.
            (2) Authority for contracts.--In section 1319 (42 U.S.C. 
        4026), by striking ``after'' and all that follows and inserting 
        ``after September 30, 2008.''.
            (3) Emergency implementation.--In section 1336(a) (42 
        U.S.C. 4056(a)), by striking ``during the period'' and all that 
        follows through ``in accordance'' and inserting ``during the 
        period ending on the date specified in section 1319, in 
        accordance''.
            (4) Authorization of appropriations for studies.--In 
        section 1376(c) (42 U.S.C. 4127(c)), by striking ``through'' 
        and all that follows and inserting the following: ``through the 
        date specified in section 1319, for studies under this 
        title.''.

SEC. 4. ESTABLISHMENT OF PILOT PROGRAM FOR MITIGATION OF SEVERE 
              REPETITIVE LOSS PROPERTIES.

    (a) In General.--The National Flood Insurance Act of 1968 is 
amended by inserting after section 1361 (42 U.S.C. 4102) the following 
new section:

  ``pilot program for mitigation of severe repetitive loss properties

    ``Sec. 1362. (a) Authority.--To the extent amounts are made 
available for use under this section, the Director may, subject to the 
limitations of this section, provide financial assistance to States and 
communities for taking actions with respect to severe repetitive loss 
properties (as such term is defined in subsection (b)) to mitigate 
flood damage to such properties and losses to the National Flood 
Insurance Fund from such properties.
    ``(b) Severe Repetitive Loss Property.--For purposes of this 
section, the term `severe repetitive loss property' has the following 
meaning:
            ``(1) Single-family properties.--In the case of a property 
        consisting of one to four residences, such term means a 
        property that--
                    ``(A) is covered under a contract for flood 
                insurance made available under this title; and
                    ``(B) has incurred flood-related damage--
                            ``(i) for which four or more separate 
                        claims payments have been made under flood 
                        insurance coverage under this title before the 
                        date of the enactment of the Two Floods and You 
                        Are Out of the Taxpayers' Pocket Act of 2003, 
                        with the amount of each such claim exceeding 
                        $5,000, and with the cumulative amount of such 
                        claims payments exceeding $20,000;
                            ``(ii) for which four or more separate 
                        claims payments have been made under flood 
                        insurance coverage under this title after the 
                        date of the enactment of the Two Floods and You 
                        Are Out of the Taxpayers' Pocket Act of 2003, 
                        with the amount of each such claim exceeding 
                        $3,000, and with the cumulative amount of such 
                        claims payments exceeding $15,000; or
                            ``(iii) for which at least two separate 
                        claims payments have been made under such 
                        coverage, with the cumulative amount of such 
                        claims exceeding the value of the property.
            ``(2) Multifamily properties.--In the case of a property 
        consisting of five or more residences, such term shall have 
        such meaning as the Director shall by regulation provide.
    ``(c) Eligible Activities.--Amounts provided under this section to 
a State or community may be used only for the following activities:
            ``(1) Mitigation activities.--To carry out mitigation 
        activities that reduce flood damages to severe repetitive loss 
        properties, including elevation, relocation, demolition, and 
        floodproofing of structures, and minor physical localized flood 
        control projects.
            ``(2) Purchase.--To purchase severe repetitive loss 
        properties, subject to subsection (f).
    ``(d) Matching Requirement.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Director may not provide assistance under this section to a 
        State or community in an amount exceeding 3 times the amount 
        that the State or community certifies, as the Director shall 
        require, that the State or community will contribute from non-
        Federal funds for carrying out the eligible activities to be 
        funded with such assistance amounts.
            ``(2) Waiver.--
                    ``(A) Authority.--Subject to subparagraph (B), the 
                Director may waive the limitation under paragraph (1) 
                for any State, and for the communities located in that 
                State, with respect to a year, if, for such year--
                            ``(i) 5 percent or more of the total number 
                        of severe repetitive loss properties in the 
                        United States are located in such State; and
                            ``(ii) the State submits a plan to the 
                        Director specifying how the State intends to 
                        reduce the number of severe repetitive loss 
                        properties and the Director determines, after 
                        consultation with State and technical experts, 
                        that the State has taken actions to reduce the 
                        number of such properties.
                    ``(B) Limitation.--In each waiver under 
                subparagraph (A), the Director may waive the limitation 
                under paragraph (1) only to the extent that the State 
                or community involved is required to contribute, for 
                each severe repetitive loss property for which grant 
                amounts are provided, not less than 10 percent of the 
                cost of the activities for such properties that are to 
                be funded with grant amounts.
            ``(3) Non-federal funds.--For purposes of this subsection, 
        the term `non-Federal funds' includes State or local agency 
        funds, in-kind contributions, any salary paid to staff to carry 
        out the eligible activities of the recipient, the value of the 
        time and services contributed by volunteers to carry out such 
        activities (at a rate determined by the Director), and the 
        value of any donated material or building and the value of any 
        lease on a building.
    ``(e) Standards for Mitigation Offers.--The program under this 
section for providing assistance for eligible activities for severe 
repetitive loss properties shall be subject to the following 
limitations:
            ``(1) Priority.--In determining the properties for which to 
        provide assistance for eligible activities under subsection 
        (c), the Director shall provide assistance for properties in 
        the order that will result in the greatest amount of savings to 
        the National Flood Insurance Fund in the shortest period of 
        time.
            ``(2) Offers.--The Director shall provide assistance in a 
        manner that permits States and communities to make offers to 
        owners of severe repetitive loss properties to take eligible 
        activities under subsection (c) as soon as is practicable.
            ``(3) Notice.--Upon making an offer to provide assistance 
        with respect to a property for any eligible activity under 
        subsection (c), the State or community shall notify each holder 
        of a recorded interest on the property of such offer and 
        activity.
    ``(f) Purchase Offers.--A State or community may take action under 
subsection (c)(2) to purchase a severe repetitive loss property only if 
the following requirements are met:
            ``(1) Use of property.--The State or community enters into 
        an agreement with the Director that provides assurances that 
        the property purchased will be used in a manner that is 
        consistent with the requirements of clauses (i) and (ii) of 
        section 404(b)(2)(B) of the Robert T. Stafford Disaster Relief 
        and Emergency Assistance Act (42 U.S.C. 5170c(b)(2)(B)) for 
        properties acquired, accepted, or from which a structure will 
        be removed pursuant to a project provided property acquisition 
        and relocation assistance under such section 404(b).
            ``(2) Purchase price.--The amount of purchase offer is not 
        less than the greatest of--
                    ``(A) the amount of the original purchase price of 
                the property, when purchased by the holder of the 
                current policy of flood insurance under this title;
                    ``(B) the total amount owed, at the time the offer 
                to purchase is made, under any loan secured by a 
                recorded interest on the property; and
                    ``(C) an amount equal to the fair market value of 
                the property immediately before the most recent flood 
                event affecting the property.
    ``(g) Increase to Actuarial Rates in Cases of Refusal to 
Mitigate.--
            ``(1) In general.--In any case in which the owner of a 
        severe repetitive loss property refuses an offer to take action 
        under paragraph (1) or (2) of subsection (c) with respect to 
        such property, the Director shall--
                    ``(A) notify each holder of a recorded interest on 
                the property of such refusal; and
                    ``(B) increase the chargeable risk premium rate for 
                flood insurance coverage under this title for the 
                property to an amount equal to the applicable estimated 
                risk premium rate for such area (or subdivision 
                thereof) under section 1307(a)(1) and apply appropriate 
                loss deductibles.
            ``(2) Appeals.--
                    ``(A) In general.--Any owner of a severe repetitive 
                loss property may appeal a determination of the 
                Director to take action under paragraph (1)(B) with 
                respect to such property, based only upon the following 
                grounds:
                            ``(i) As a result of such action, the owner 
                        of the property will not be able to purchase a 
                        replacement primary residence of comparable 
                        value and that is functionally equivalent.
                            ``(ii) As a result of such action, the 
                        preservation or maintenance of any prehistoric 
                        or historic district, site, building, 
                        structure, or object included in, or eligible 
                        for inclusion in, the National Register of 
                        historic places will be interfered with, 
                        impaired, or disrupted.
                            ``(iii) The flooding that resulted in the 
                        flood insurance claims described in subsection 
                        (b)(2) for the property resulted from 
                        significant actions by a third party in 
                        violation of Federal, State, or local law, 
                        ordinance, or regulation.
                            ``(iv) In purchasing the property, the 
                        owner relied upon flood insurance rate maps of 
                        the Federal Emergency Management Agency that 
                        were current at the time and did not indicate 
                        that the property was located in an area having 
                        special flood hazards.
                    ``(B) Procedure.--An appeal under this paragraph of 
                a determination of the Director shall be made by 
                filing, with the Director, a request for an appeal 
                within 90 days after receiving notice of such 
                determination. Upon receiving the request, the Director 
                shall select, from a list of independent third parties 
                compiled by the Director for such purpose, a party to 
                hear such appeal. Within 90 days after filing of the 
                request for the appeal, such third party shall review 
                the determination of the Director and shall set aside 
                such determination if the third party determines that 
                the grounds under subparagraph (A) exist. During the 
                pendency of an appeal under this paragraph, the 
                Director shall stay the applicability of the rates 
                established pursuant to paragraph (1).
                    ``(C) Effect of final determination.--In an appeal 
                under this paragraph--
                            ``(i) if a final determination is made that 
                        the grounds under subparagraph (A) exist, the 
                        third party hearing such appeal shall make a 
                        determination of how much to reduce the 
                        chargeable risk premium rate for flood 
                        insurance coverage for the property involved in 
                        the appeal from the amount required under 
                        paragraph (1) and the Director shall promptly 
                        reduce the chargeable risk premium rate for 
                        such property by such amount; and
                            ``(ii) if a final determination is made 
                        that the grounds under subparagraph (A) do not 
                        exist, the Director shall promptly increase the 
                        chargeable risk premium rate for such property 
                        to the amount established pursuant to paragraph 
                        (1) and shall collect from the property owner 
                        the amount necessary to cover the stay of the 
                        applicability of such increased rates during 
                        the pendency of the appeal.
                    ``(D) Costs.--If the third party hearing an appeal 
                under this paragraph is compensated for such service, 
                the costs of such compensation shall be borne--
                            ``(i) by the owner of the property 
                        requesting the appeal, if the final 
                        determination in the appeal is that the grounds 
                        under subparagraph (A) do not exist; and
                            ``(ii) by the National Flood Insurance 
                        Fund, if such final determination is that the 
                        grounds under subparagraph (A) do exist.
                    ``(E) Report.--Not later than 6 months after the 
                date of the enactment of the Two Floods and You Are Out 
                of the Taxpayers' Pocket Act of 2003, the Director 
                shall submit a report to the House of Representatives 
                and the Senate describing the rules, procedures, and 
                administration for appeals under this paragraph.
    ``(h) Discretionary Actions in Cases of Fraudulent Claims.--If the 
Director determines that a fraudulent claim was made under flood 
insurance coverage under this title for a severe repetitive loss 
property, the Director may--
            ``(1) cancel the policy and deny the provision to such 
        policyholder of any new flood insurance coverage under this 
        title for the property; or
            ``(2) refuse to renew the policy with such policyholder 
        upon expiration and deny the provision of any new flood 
        insurance coverage under this title to such policyholder for 
        the property.
    ``(i) Funding.--Pursuant to section 1310(a)(8), the Director may 
use amounts from the National Flood Insurance Fund to provide 
assistance under this section in each of fiscal years 2004, 2005, 2006, 
2007, and 2008, except that the amount so used in each such fiscal year 
may not exceed $40,000,000 and shall remain available until expended. 
Notwithstanding any other provision of this title, amounts made 
available pursuant to this subsection shall not be subject to 
offsetting collections through premium rates for flood insurance 
coverage under this title.
    ``(j) Termination.--The Director may not provide assistance under 
this section to any State or community after September 30, 2008.''.
    (b) Availability of National Flood Insurance Fund Amounts.--Section 
1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) 
is amended--
            (1) in paragraph (7), by striking ``and'' at the end; and
            (2) by striking paragraph (8) and inserting the following 
        new paragraph:
            ``(8) for financial assistance under section 1362 to States 
        and communities for taking actions under such section with 
        respect to severe repetitive loss properties, but only to the 
        extent provided in section 1362(i); and''.

SEC. 5. ENHANCED AUTHORITY IN FLOOD MITIGATION ASSISTANCE PROGRAM.

    (a) Mitigation Assistance for Repetitive Claims Properties.--
Section 1366(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104c) is amended--
            (1) by striking paragraph (4) and inserting the following 
        new paragraph:
            ``(4) Standard for assistance.--In providing grants under 
        this subsection for mitigation activities, the Director shall 
        give first priority for funding to repetitive claims 
        properties, or to such subsets of such properties as the 
        Director may establish pursuant to subsection (n)(2), that the 
        Director determines are the most cost-effective for the 
        taxpayers of the United States, are in the best interests of 
        the National Flood Insurance Fund, and for which matching 
        amounts under subsection (f) are available.''; and
            (2) by adding at the end the following new paragraph:
            ``(6) Notice.--Upon making an offer to conduct any eligible 
        mitigation activity under paragraph (5) with respect to a 
        repetitive claims property or a severe repetitive loss property 
        (as such term is defined in section 1362(b)) using amounts 
        provided under this section, the State or community shall 
        notify each holder of a recorded interest on the property of 
        such offer and activity.''.
    (b) Limitations on Property Acquisition.--Section 1366(e)(5)(C) of 
the National Flood Insurance Act of 1968 (42 U.S.C. 4104c(e)(5)(C)) is 
amended by striking ``for public use, as the Director determines is 
consistent with sound land management and use in such area'' and 
inserting the following: ``except that amounts provided under this 
section may not be used for acquisition of any property unless--
                            ``(i) the State or community enters into an 
                        agreement with the Director that provides 
                        assurances that the property purchased will be 
                        used in a manner that is consistent with the 
                        requirements of clauses (i) and (ii) of section 
                        404(b)(2)(B) of the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 U.S.C. 
5170c(b)(2)(B)) for properties acquired, accepted, or from which a 
structure will be removed pursuant to a project provided property 
acquisition and relocation assistance under such section 404(b); and
                            ``(ii) the amount of purchase offer is not 
                        less than the greatest of--
                                    ``(I) the amount of the original 
                                purchase price of the property, when 
                                purchased by the holder of the current 
                                policy of flood insurance under this 
                                title;
                                    ``(II) the total amount owed, at 
                                the time the offer to purchase is made, 
                                under any loan secured by a recorded 
                                interest on the property; and
                                    ``(III) an amount equal to the fair 
                                market value of the property 
                                immediately before the most recent 
                                flood event affecting the property''.
    (c) Waiver of Limitations on Assistance.--Section 1366(f) of the 
National Flood Insurance Act of 1968 (42 U.S.C. 4104c(f)) is amended by 
striking paragraph (3) and inserting the following new paragraph:
            ``(3) Waiver.--The Director may waive the dollar amount 
        limitations under paragraphs (1) and (2) for any State or 
        community--
                    ``(A) for any 5-year period when a major disaster 
                or emergency declared by the President (pursuant to the 
                Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5121 et seq.)) as a result of 
                flood conditions is in effect with respect to areas in 
                the State or community; or
                    ``(B) whenever the Director determines that 
                repetitive claims properties are located within such 
                State or community and that waiver of the cost 
                limitations is cost-effective and in the best interests 
                of the National Flood Insurance Fund.''.
    (d) Penalties for Refusal to Mitigate and Fraudulent Claims.--
Section 1366 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104c) is amended--
            (1) by striking subsection (k);
            (2) by redesignating subsection (j) as subsection (l); and
            (3) by inserting after subsection (i) the following new 
        subsections:
    ``(j) Increase to Actuarial Rates in Cases of Refusal to 
Mitigate.--
            ``(1) In general.--In any case in which the owner of a 
        repetitive claims property refuses an offer of a State or 
        community to conduct, with respect to such property, mitigation 
        activities under subsection (e) under a mitigation plan 
        approved by the Director, the Director shall--
                    ``(A) notify each holder of a recorded interest on 
                the property of such refusal; and
                    ``(B) increase the chargeable risk premium rate for 
                flood insurance coverage under this title for the 
                property to an amount equal to the applicable estimated 
                risk premium rate for such area (or subdivision 
                thereof) under section 1307(a)(1) and apply appropriate 
                loss deductibles.
            ``(2) Appeals.--
                    ``(A) Mitigation actions.--Any owner of a 
                repetitive claims property may appeal a determination 
                of the Director to take action under paragraph (1)(B) 
                with respect to such property, based only upon the 
                following grounds:
                            ``(i) As a result of such action, the owner 
                        of the property will not be able to purchase a 
                        replacement primary residence of comparable 
                        value and that is functionally equivalent.
                            ``(ii) As a result of such action, the 
                        preservation or maintenance of any prehistoric 
                        or historic district, site, building, 
                        structure, or object included in, or eligible 
                        for inclusion in, the National Register of 
                        historic places will be interfered with, 
                        impaired, or disrupted.
                            ``(iii) The flooding that resulted in the 
                        flood insurance claims payments described in 
                        subsection (n)(2) for the property resulted 
                        from significant actions by a third party in 
                        violation of Federal, State, or local law, 
                        ordinance, or regulation.
                            ``(iv) In purchasing the property, the 
                        owner relied upon flood insurance rate maps of 
                        the Federal Emergency Management Agency that 
                        were current at the time and did not indicate 
                        that the property was located in an area having 
                        special flood hazards.
                    ``(B) Procedure.--An appeal under this paragraph of 
                a determination of the Director shall be made by 
                filing, with the Director, a request for an appeal 
                within 90 days after receiving notice of such 
                determination. Upon receiving the request, the Director 
                shall select, from a list of independent third parties 
                compiled by the Director for such purpose, a party to 
                hear such appeal. Within 90 days after filing of the 
                request for the appeal, such third party shall review 
                the determination of the Director and shall set aside 
                such determination if the third party determines that 
                the grounds under subparagraph (A) exist. During the 
                pendency of an appeal under this paragraph, the 
                Director shall stay the applicability of the rates 
                established pursuant to paragraph (1).
                    ``(C) Effect of final determination.--In an appeal 
                under this paragraph--
                            ``(i) if a final determination is made that 
                        the grounds under subparagraph (A) exist, the 
                        third party hearing such appeal shall make a 
                        determination of how much to reduce the 
                        chargeable risk premium rate for flood 
                        insurance coverage for the property involved in 
                        the appeal from the amount required under 
                        paragraph (1) and the Director shall promptly 
                        reduce the chargeable risk premium rate for 
                        such property by such amount; and
                            ``(ii) if a final determination is made 
                        that the grounds under subparagraph (A) do not 
                        exist, the Director shall promptly increase the 
                        chargeable risk premium rate for such property 
                        to the amount established pursuant to paragraph 
                        (1) and shall collect from the property owner 
                        the amount necessary to cover the stay of the 
                        applicability of such increased rates during 
                        the pendency of the appeal.
                    ``(D) Costs.--If the third party hearing an appeal 
                under this paragraph is compensated for such service, 
                the costs of such compensation shall be borne--
                            ``(i) by the owner of the property 
                        requesting the appeal, if the final 
                        determination in the appeal is that the grounds 
                        under subparagraph (A) do not exist; and
                            ``(ii) by the National Flood Mitigation 
                        Fund, if such final determination is that the 
                        grounds under subparagraph (A) do exist.
                    ``(E) Report.--Not later than 6 months after the 
                date of the enactment of the Two Floods and You Are Out 
                of the Taxpayers' Pocket Act of 2003, the Director 
                shall submit a report to the House of Representatives 
                and the Senate describing the rules, procedures, and 
                administration for appeals under this paragraph, which 
                shall be submitted together with the report required 
                under section 1362(g)(2)(E).
    ``(k) Discretionary Actions in Cases of Fraudulent Claims.--If the 
Director determines that a fraudulent claim was made under flood 
insurance coverage under this title for a repetitive claims property, 
the Director may--
            ``(1) cancel the policy and deny the provision to such 
        policyholder of any new flood insurance coverage under this 
        title for the property; or
            ``(2) refuse to renew the policy with such policyholder 
        upon expiration and deny the provision of any new flood 
        insurance coverage under this title to such policyholder for 
        the property.''.
    (e) Coordination With States and Communities.--Section 1366 of the 
National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is amended by 
adding at the end the following new subsection:
    ``(m) Coordination With States and Communities.--The Director 
shall, in consultation and coordination with States and communities:
            ``(1) Identification of repetitive claims properties.--
        Identify repetitive claims properties and properties at risk of 
        becoming repetitive claims properties.
            ``(2) Management of 100-year floodplain.--Take such actions 
        as are appropriate to encourage and improve participation of 
        owners of properties that are not located in areas having 
        special flood hazards but are located within the 100-year 
        floodplain.''.
    (f) Definition of Repetitive Claims Property.--Section 1366 of the 
National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is amended by 
adding at the end the following new subsection:
    ``(n) Definitions.--For purposes of this section:
            ``(1) Community.--The term `community' means--
                    ``(A) a political subdivision that--
                            ``(i) has zoning and building code 
                        jurisdiction over a particular area having 
                        special flood hazards; and
                            ``(ii) is participating in the national 
                        flood insurance program; or
                    ``(B) a political subdivision of a State, or other 
                authority, that is designated to develop and administer 
                a mitigation plan and manage projects by political 
                subdivisions, all of which meet the requirements of 
                subparagraph (A).
            ``(2) Repetitive claims property.--The term `repetitive 
        claims property' means, without regard to the ownership of the 
        property, a property with respect to which claim payments for 
        losses have been made--
                    ``(A) under flood insurance coverage under this 
                title,
                    ``(B) on more than one occasion within a 10-year 
                period, and
                    ``(C) for which the cumulative value of the amount 
                by which such claims exceed the amount of any 
                applicable deductible under such coverage is $5,000 or 
                more,
        The Director may, by regulation, further define subsets of 
        repetitive claims properties for purposes of subsection 
        (e)(4).''.
    (g) Funding.--Section 1367(b) of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4104d(b)) is amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4); and
            (2) by striking paragraph (1) and inserting the following 
        new paragraphs:
            ``(1) in each fiscal year, amounts from the National Flood 
        Insurance Fund not exceeding $20,000,000;
            ``(2) in each of fiscal years 2004, 2005, 2006, 2007, and 
        2008, in addition to amounts under paragraph (1), amounts from 
        the National Flood Insurance Fund not exceeding $40,000,000, to 
        remain available until expended, except that--
                    ``(A) such amounts shall be used only under section 
                1366 for mitigation activities for repetitive claims 
                properties (as such term is defined in section 
                1366(n)); and
                    ``(B) notwithstanding any other provision of this 
                title, amounts made available pursuant to this 
                paragraph shall not be subject to offsetting 
                collections through premium rates for flood insurance 
                coverage under this title; and''.

SEC. 6. FEMA AUTHORITY TO FUND MITIGATION ACTIVITIES FOR INDIVIDUAL 
              REPETITIVE CLAIMS PROPERTIES.

    (a) In General.--Chapter I of the National Flood Insurance Act of 
1968 (42 U.S.C. 4011 et seq.) is amended by adding at the end the 
following new section:

          ``grants for repetitive insurance claims properties

    ``Sec. 1323. (a) In General.--The Director may provide funding for 
mitigation actions that reduce flood damages to repetitive claims 
properties, but only if the Director determines that--
            ``(1) such activities are in the best interest of the 
        National Flood Insurance Fund; and
            ``(2) such activities can not be funded under the program 
        under section 1366 because--
                    ``(A) the requirements of section 1366(g) are not 
                being met by the State or community in which the 
                property is located; or
                    ``(B) the State or community does not have the 
                capacity to manage such activities.
    ``(b) Priority for Worst-Case Properties.--In determining 
properties for which funding is to be provided under this section, the 
Director shall give priority based on the amount of losses to the 
National Flood Insurance Fund that claims for a property have caused or 
are reasonably expected to cause.
    ``(c) Definition.--For purposes of this section, the term 
`repetitive claims property' has the meaning given such term in section 
1366(n).''.
    (b) Availability of National Flood Insurance Fund Amounts.--Section 
1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) 
is amended by adding at the end the following new paragraph:
            ``(9) for funding, not to exceed $10,000,000 in any fiscal 
        year, for mitigation actions under section 1323, except that, 
        notwithstanding any other provision of this title, amounts made 
        available pursuant to this paragraph shall not be subject to 
        offsetting collections through premium rates for flood 
        insurance coverage under this title.''.

SEC. 7. ACTUARIAL RATE PROPERTIES.

    (a) In General.--Section 1308 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4015) is amended by striking subsection (c) and 
inserting the following new subsection:
    ``(c) Actuarial Rate Properties.--Subject only to the limitations 
provided under paragraphs (1) and (2), the chargeable rate shall not be 
less than the applicable estimated risk premium rate for such area (or 
subdivision thereof) under section 1307(a)(1) with respect to the 
following properties:
            ``(1) Post-firm properties.--Any property the construction 
        or substantial improvement of which the Director determines has 
        been started after December 31, 1974, or started after the 
        effective date of the initial rate map published by the 
        Director under paragraph (2) of section 1360 for the area in 
        which such property is located, whichever is later, except that 
        the chargeable rate for properties under this paragraph shall 
        be subject to the limitation under subsection (e).
            ``(2) Properties refusing mitigation assistance.--Any 
        property for which the Director has taken action under section 
        1362(g)(1) or 1366(i)(1).
            ``(3) Certain leased coastal and river properties.--Any 
        property leased from the Federal Government (including 
        residential and nonresidential properties) that the Director 
        determines is located on the river-facing side of any dike, 
        levee, or other riverine flood control structure, or seaward of 
        any seawall or other coastal flood control structure.''.
    (b) Inapplicability of Annual Limitations on Premium Increases.--
Section 1308(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 
4015(e)) is amended by striking ``Notwithstanding'' and inserting 
``Except with respect to properties described under paragraph (2) or 
(3) of subsection (c) and notwithstanding''.

SEC. 8. REMOVING REPETITIVE INSURANCE CLAIMS PROPERTIES FROM FEDERAL 
              DISASTER ASSISTANCE RESPONSIBILITY.

    (a) In General.--Section 582 of the National Flood Insurance Reform 
Act of 1994 (42 U.S.C. 5154a) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Unmitigated Repetitive Insurance Claims Properties.--
Notwithstanding any other provision of law, no Federal disaster relief 
assistance made available in a flood disaster area may be used to make 
a payment (including any loan assistance payment) for repair, 
replacement, or restoration for damage to a property located in such 
area if--
            ``(1) such property is a repetitive claims property (as 
        such term is defined in section 1366(n) of the National Flood 
        Insurance Act of 1968 (42 U.S.C. 4104c(o)) or a severe 
        repetitive loss property (as such term is defined in section 
        1362(b) of such Act (42 U.S.C. 4103(b)); and
            ``(2) in accordance with such requirements as the Director 
        may establish, mitigation assistance under section 1362 or 1366 
        of the National Flood Insurance Act of 1968 has been offered to 
the owner of the property, before or after the occurrence of the flood 
loss events, which was refused by the owner.''.
    (b) Effective Date.--Notwithstanding subsection (f) of section 582 
of the National Flood Insurance Reform Act of 1994 (as so redesignated 
by paragraph (1)(A) of this subsection), the amendment made by 
paragraph (1) shall apply to disasters declared after the date of the 
enactment of this Act.

SEC. 9. ELECTRONIC DATABASE OF REPETITIVE CLAIMS PROPERTIES.

    Section 1364 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104a) is amended by adding at the end the following new subsection:
    ``(d) Electronic Database of Repetitive Claims Properties.--The 
Director may, if the Director determines such action is feasible, 
establish and maintain a database identifying by location and address 
all repetitive claims properties (as such term is defined in section 
1366(n)), repetitive loss structures (as such term is defined in 
section 1370), and severe repetitive loss properties (as such term is 
defined in section 1362(b)). If established, the Director shall make 
the database available to the public in a format that may be searched 
electronically. Such a database shall not include any information 
regarding ownership of properties.''.

SEC. 10. REPLACEMENT OF MOBILE HOMES ON ORIGINAL SITES.

    Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4022) is amended by adding at the end the following new subsection:
    ``(c) Replacement of Mobile Homes on Original Sites.--
            ``(1) Community participation.--The placement of any mobile 
        home on any site shall not affect the eligibility of any 
        community to participate in the flood insurance program under 
        this title and the Flood Disaster Protection Act of 1973 
        (notwithstanding that such placement may fail to comply with 
        any elevation or flood damage mitigation requirements), if--
                    ``(A) such mobile home was previously located on 
                such site;
                    ``(B) such mobile home was relocated from such site 
                because of flooding that threatened or affected such 
                site; and
                    ``(C) such replacement is conducted not later than 
                the expiration of the 180-day period that begins upon 
                the subsidence (in the area of such site) of the body 
                of water that flooded to a level considered lower than 
                flood levels.
            ``(2) Definition.--For purposes of this subsection, the 
        term `mobile home' has the meaning given such term in the law 
        of the State in which the mobile home is located.''.

SEC. 11. REITERATION OF FEMA RESPONSIBILITY TO MAP MUDSLIDES.

    As directed in section 1360(b) of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4101(b)), the Director of the Federal Emergency 
Management Agency is again directed to accelerate the identification of 
risk zones within flood-prone and mudslide-prone areas, as provided by 
subsection (a)(2) of such section 1360, in order to make known the 
degree of hazard within each such zone at the earliest possible date.




                                                 Union Calendar No. 152

108th CONGRESS

  1st Session

                               H. R. 253

                          [Report No. 108-266]

_______________________________________________________________________

                                 A BILL

 To amend the National Flood Insurance Act of 1968 to reduce losses to 
  properties for which repetitive flood insurance claim payments have 
                               been made.

_______________________________________________________________________

                           September 5, 2003

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed