[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2238 Reported in Senate (RS)]
Calendar No. 513
108th CONGRESS
2d Session
S. 2238
[Report No. 108-262]
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 SENATE OF THE UNITED STATES
March 25, 2004
Mr. Bunning (for himself, Mr. Shelby, Mr. Sarbanes, Mr. Schumer, Mrs.
Dole, Mr. Hagel, Ms. Mikulski, Mr. Miller, Mr. Allard, and Mr. Johnson)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
May 13, 2004
Reported by Mr. Shelby, with amendments
[Omit the part struck through and insert the part printed in italic]
_______________________________________________________________________
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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Flood Insurance
Reform Act of 2004''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings.
TITLE I--AMENDMENTS TO FLOOD INSURANCE ACT OF 1968
Sec. 101. Extension of program and consolidation of authorizations.
Sec. 102. Establishment of pilot program for mitigation of severe
repetitive loss properties.
Sec. 103. Amendments to existing flood mitigation assistance program.
Sec. 104. FEMA authority to fund mitigation activities for individual
repetitive claims properties.
Sec. 105. Amendments to additional coverage for compliance with land
use and control measures.
Sec. 106. Actuarial rate properties.
Sec. 107. Geospatial digital flood hazard data.
Sec. 108. Replacement of mobile homes on original sites.
Sec. 109. Reiteration of FEMA responsibility to map mudslides.
TITLE II--MISCELLANEOUS PROVISIONS
Sec. 201. Definitions.
Sec. 202. Supplemental forms.
Sec. 203. Acknowledgement form.
Sec. 204. Flood insurance claims handbook.
Sec. 205. Appeal of decisions relating to flood insurance coverage.
Sec. 206. Study and report on use of cost compliance coverage.
Sec. 207. Minimum training and education requirements.
Sec. 208. GAO study and report.
Sec. 209. Prospective payment of flood insurance premiums.
Sec. 210. Report on changes to fee schedule or fee payment
arrangements.
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, 2 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 2 or 3 losses that
cumulatively exceed building value or 4 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 1
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;
(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; and
(12) focusing the mitigation and buy-out of repetitive loss
properties upon communities and property owners that choose to
voluntarily participate in a mitigation and buy-out program
will maximize the benefits of such a program, while minimizing
any adverse impact on communities and property owners.
TITLE I--AMENDMENTS TO FLOOD INSURANCE ACT OF 1968
SEC. 101. EXTENSION OF PROGRAM AND CONSOLIDATION OF AUTHORIZATIONS.
(a) Borrowing Authority.--The first sentence of section 1309(a) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)), is
amended by striking ``through December'' and all that follows through
``, and'' and inserting ``through the date specified in section 1319,
and''.
(b) Authority for Contracts.--Section 1319 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4026), is amended by striking
``after'' and all that follows and inserting ``after September 30,
2008.''.
(c) Emergency Implementation.--Section 1336(a) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4056(a)), is amended 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''.
(d) Authorization of Appropriations for Studies.--Section 1376(c)
of the National Flood Insurance Act of 1968 (42 U.S.C. 4127(c)), is
amended by striking ``through'' and all that follows and inserting
``through the date specified in section 1319, for studies under this
title.''.
SEC. 102. 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:
``SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE LOSS
PROPERTIES.
``(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 1 to 4 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 3 or more separate claims
payments have been made under flood insurance
coverage under this title, with the amount of
each such claim exceeding $3,000, and with the
cumulative amount of such claims payments
exceeding $15,000; or
``(ii) for which at least 2 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 5 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, and the demolition and rebuilding of
properties to at least 1 foot above Base Flood Elevation or
greater, if required by any local ordinance.
``(2) Purchase.--To purchase severe repetitive loss
properties, subject to subsection (f).
``(d) Matching Requirement.--
``(1) In general.--Except as provided in paragraph (2), in
any 1-year period 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) Reduced community match.--With respect to any 1-year
period in which assistance is made available under this
section, the Director may adjust the contribution required
under paragraph (1) by any State, and for the communities
located in that State, to not less than 10 percent of the cost
of the activities for each severe repetitive loss property for
which grant amounts are provided if, for such year--
``(A) the State has an approved State mitigation
plan meeting the requirements for hazard mitigation
planning under section 322 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5165) that specifies how the State intends to reduce
the number of severe repetitive loss properties; and
``(B) the Director determines, after consultation
with the State, that the State has taken actions to
reduce the number of such properties.
``(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 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 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) Offers.--The Director shall provide assistance in a
manner that permits States and communities to make offers to
owners of severe repetitive loss properties and of associated
land to engage in eligible activities as soon as possible.
``(3) 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, or an amount equal to the
current fair market value of the property.
``(4) Comparable housing payment.--If a purchase offer made
under paragraph (2) is less than the cost of the homeowner-
occupant to purchase a comparable replacement dwelling outside
the flood hazard area in the same community, the Director shall
make available an additional relocation payment to the
homeowner-occupant to apply to the difference.
``(g) Increased Premiums 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) notwithstanding subsections (a) through (c)
of section 1308, thereafter the chargeable premium rate
with respect to the property shall be the amount equal
to 150 percent of the chargeable rate for the property
at the time that the offer was made, as adjusted by any
other premium adjustments otherwise applicable to the
property and any subsequent increases pursuant to
paragraph (2) and subject to the limitation under
paragraph (3).
``(2) Increased premiums upon subsequent flood damage.--
Notwithstanding subsections (a) through (c) of section 1308, if
the owner of a severe repetitive loss property does not accept
an offer to take action under paragraph (1) or (2) of
subsection (c) with respect to such property and a claim
payment exceeding $1,500 is made under flood insurance coverage
under this title for damage to the property caused by a flood
event occurring after such offer is made, thereafter the
chargeable premium rate with respect to the property shall be
the amount equal to 150 percent of the chargeable rate for the
property at the time of such flood event, as adjusted by any
other premium adjustments otherwise applicable to the property
and any subsequent increases pursuant to this paragraph and
subject to the limitation under paragraph (3).
``(3) Limitation on increased premiums.--In no case may the
chargeable premium rate for a severe repetitive loss property
be increased pursuant to this subsection to an amount exceeding
the applicable estimated risk premium rate for the area (or
subdivision thereof) under section 1307(a)(1).
``(4) Treatment of deductibles.--Any increase in chargeable
premium rates required under this subsection for a severe
repetitive loss property may be carried out, to the extent
appropriate, as determined by the Director, by adjusting any
deductible charged in connection with flood insurance coverage
under this title for the property.
``(5) Notice of continued offer.--Upon each renewal or
modification of any flood insurance coverage under this title
for a severe repetitive loss property, the Director shall
notify the owner that the offer made pursuant to subsection (c)
is still open.
``(6) 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) or (2)
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) Based on independent information,
such as contractor estimates or appraisals, the
property owner believes that the price offered
for purchasing the property is not an accurate
estimation of the value of the property, or the
amount of Federal funds offered for mitigation
activities, when combined with funds from non-
Federal sources, will not cover the actual cost
of mitigation.
``(iii) 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.
``(iv) 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.
``(v) 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)(B) or (2), as
applicable.
``(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)(B) or (2) 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)(B) or (2), as applicable, 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 Flood Insurance Reform Act
of 2004, the Director shall submit a report describing
the rules, procedures, and administration for appeals
under this paragraph to--
``(i) the Committee on Banking, Housing,
and Urban Affairs of the Senate; and
``(ii) the Committee on Financial Services
of the House of Representatives.
``(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.--
``(1) In general.--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.
``(2) Administrative expenses.--Of the amounts made
available under this subsection, the Director may use up to 5
percent for expenses associated with the administration of
section 1361A.
``(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:
``(8) for financial assistance under section 1361A 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 1361A(i); and''.
SEC. 103. AMENDMENTS TO EXISTING FLOOD MITIGATION ASSISTANCE PROGRAM.
(a) Standard for Approval of Mitigation Plans.--Section 1366(e)(3)
of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is
amended by adding at the end the following new sentence: ``The Director
may approve only mitigation plans that give priority for funding to
such properties, or to such subsets of properties, as are in the best
interest of the National Flood Insurance Fund.''.
(b) Priority for Mitigation Assistance.--Section 1366(e) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is amended by
striking paragraph (4) and inserting the following:
``(4) Priority for mitigation assistance.--In providing
grants under this subsection for mitigation activities, the
Director shall give first priority for funding to such
properties, or to such subsets of such properties as the
Director may establish, that the Director determines are in the
best interests of the National Flood Insurance Fund and for
which matching amounts under subsection (f) are available.''.
(c) 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:
``(m) Coordination With States and Communities.--The Director
shall, in consultation and coordination with States and communities
take such actions as are appropriate to encourage and improve
participation in the national flood insurance program of owners of
properties, including owners of properties that are not located in
areas having special flood hazards <DELETED>but are located within the
100-year floodplain</DELETED> (the 100-year floodplain), but are
located within flood prone areas.''.
(d) Funding.--Section 1367(b) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4104d(b)) is amended by striking paragraph (1) and
inserting the following:
``(1) in each fiscal year, amounts from the National Flood
Insurance Fund not exceeding $40,000,000, to remain available
until expended;''.
(e) Reduced Community Match.--Section 1366(g) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4104c(g)), is amended--
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
``(2) Reduced community match.--With respect to any 1-year
period in which assistance is made available under this
section, the Director may adjust the contribution required
under paragraph (1) by any State, and for the communities
located in that State, to not less than 10 percent of the cost
of the activities for each severe repetitive loss property for
which grant amounts are provided if, for such year--
``(A) the State has an approved State mitigation
plan meeting the requirements for hazard mitigation
planning under section 322 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5165) that specifies how the State intends to reduce
the number of severe repetitive loss properties; and
``(B) the Director determines, after consultation
with the State, that the State has taken actions to
reduce the number of such properties.''.
(f) National Flood Mitigation Fund.--Section 1366(b)(2) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4104c(b)(2)), is
amended by striking ``$1,500,000'' and inserting ``7.5 percent of the
available funds under this section''.
SEC. 104. 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:
``SEC. 1323. GRANTS FOR REPETITIVE INSURANCE CLAIMS PROPERTIES.
``(a) In General.--The Director may provide funding for mitigation
actions that reduce flood damages to individual properties for which 1
or more claim payments for losses have been made under flood insurance
coverage under this title, 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 cannot 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 the
properties for which funding is to be provided under this section, the
Director shall consult with the States in which such properties are
located and 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.''.
(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:
``(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. 105. AMENDMENTS TO ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND
USE AND CONTROL MEASURES.
(a) Compliance With Land Use and Control Measures.--Section 1304(b)
of the National Flood Insurance Act of 1968 (42 U.S.C. 4011(b)) is
amended--
(1) in the matter preceding paragraph (1)--
(A) by striking ``compliance'' and inserting
``implementing measures that are consistent''; and
(B) by inserting ``by the community'' after
``established'';
(2) in paragraph (2), by striking ``have flood damage in
which the cost of repairs equals or exceeds 50 percent of the
value of the structure at the time of the flood event; and''
and inserting ``are substantially damaged structures;''
(3) in paragraph (3), by striking ``compliance with land
use and control measures.'' and inserting ``the implementation
of such measures; and''; and
(4) by inserting after paragraph (3) and before the last
undesignated paragraph the following:
``(4) properties for which an offer of mitigation
assistance is made under--
``(A) section 1366 (Flood Mitigation Assistance
Program);
``(B) section 1368 (Repetitive Loss Priority
Program and Individual Priority Property Program);
``(C) the Hazard Mitigation Grant Program
authorized under section 404 of the Robert T. Stafford
Disaster Assistance and Emergency Relief Act (42 U.S.C.
5170c);
``(D) the Predisaster Hazard Mitigation Program
under section 203 of the Robert T. Stafford Disaster
Assistance and Emergency Relief Act (42 U.S.C. 5133);
and
``(E) any programs authorized or for which funds
are appropriated to address any unmet needs or for
which supplemental funds are made available.''.
(b) Definitions.--Section 1370(a) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4121(a)) is amended--
(1) by striking paragraph (7) and inserting the following:
``(7) the term `repetitive loss structure' means a
structure covered by a contract for flood insurance that--
``(A) has incurred flood-related damage on 2
occasions, in which the cost of repair, on the average,
equaled or exceeded 25 percent of the value of the
structure at the time of each such flood event; and
``(B) at the time of the second incidence of flood-
related damage, the contract for flood insurance
contains increased cost of compliance coverage.'';
(2) in paragraph (13), by striking ``and'' at the end;
(3) in paragraph (14), by striking the period and inserting
``; and''; and
(4) by adding at the end the following:
``(15) the term `substantially damaged structure' means a
structure covered by a contract for flood insurance that has
incurred damage for which the cost of repair exceeds an amount
specified in any regulation promulgated by the Director, or by
a community ordinance, whichever is lower.''.
SEC. 106. 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:
``(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) 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. 107. GEOSPATIAL DIGITAL FLOOD HAZARD DATA.
For the purposes of flood insurance and floodplain management
activities conducted pursuant to the National Flood Insurance Program
under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et
seq.), geospatial digital flood hazard data distributed by the Federal
Emergency Management Agency, or its designee, or the printed products
derived from that data, are interchangeable and legally equivalent for
the determination of the location of 1 in 100 year and 1 in 500 year
flood planes, provided that all other geospatial data shown on the
printed product meets or exceeds any accuracy standard promulgated by
the Federal Emergency Management Agency.
SEC. 108. 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:
``(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. 109. 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.
TITLE II--MISCELLANEOUS PROVISIONS
SEC. 201. DEFINITIONS.
In this title, the following definitions shall apply:
(1) Director.--The term ``Director'' means the Director of
the Federal Emergency Management Agency.
(2) Flood insurance policy.--The term ``flood insurance
policy'' means a flood insurance policy issued under the
National Flood Insurance Act of 1968 (42 U.S.C. et seq.).
(3) Program.--The term ``Program'' means the National Flood
Insurance Program established under the National Flood
Insurance Act of 1968 (42 U.S.C. 4001 et seq.).
SEC. 202. SUPPLEMENTAL FORMS.
(a) In General.--Not later than 6 months after the date of
enactment of this Act, the Director shall develop supplemental forms to
be issued in conjunction with the issuance of a flood insurance policy
that set forth, in simple terms--
(1) the exact coverages being purchased by a policyholder;
(2) any exclusions from coverage that apply to the
coverages purchased;
(3) an explanation, including illustrations, of how lost
items and damages will be valued under the policy at the time
of loss;
(4) the number and dollar value of claims filed under a
flood insurance policy over the life of the property, and the
effect, under the National Flood Insurance Act of 1968 (42
U.S.C. 4001 et seq.), of the filing of any further claims under
a flood insurance policy with respect to that property; and
(5) any other information that the Director determines will
be helpful to policyholders in understanding flood insurance
coverage.
(b) Distribution.--The forms developed under subsection (a) shall
be given to--
(1) all holders of a flood insurance policy at the time of
purchase and renewal; and
(2) insurance companies and agents that are authorized to
sell flood insurance policies.
SEC. 203. ACKNOWLEDGEMENT FORM.
(a) In General.--Not later than 6 months after the date of
enactment of this Act, the Director shall develop an acknowledgement
form to be signed by the purchaser of a flood insurance policy that
contains--
(1) an acknowledgement that the purchaser has received a
copy of the standard flood insurance policy, and any forms
developed under section 202; and
(2) an acknowledgement that the purchaser has been told
that the contents of a property or dwelling are not covered
under the terms of the standard flood insurance policy, and
that the policyholder has the option to purchase additional
coverage for such contents.
(b) Distribution.--Copies of an acknowledgement form executed under
subsection (a) shall be made available to the purchaser and the
Director.
SEC. 204. FLOOD INSURANCE CLAIMS HANDBOOK.
(a) In General.--Not later than 6 months after the date of
enactment of this Act, the Director shall develop a flood insurance
claims handbook that contains--
(1) a description of the procedures to be followed to file
a claim under the Program, including how to pursue a claim to
completion;
(2) how to file supplementary claims, proof of loss, and
any other information relating to the filing of claims under
the Program; and
(3) detailed information regarding the appeals process
established under section 205.
(b) Distribution.--The handbook developed under subsection (a)
shall be made available to--
(1) each insurance company and agent authorized to sell
flood insurance policies; and
(2) each purchaser, at the time of purchase and renewal, of
a flood insurance policy, and at the time of any flood loss
sustained by such purchaser.
SEC. 205. APPEAL OF DECISIONS RELATING TO FLOOD INSURANCE COVERAGE.
Not later than 6 months after the date of enactment of this Act,
the Director shall, by regulation, establish an appeals process through
which holders of a flood insurance policy may appeal the decisions,
with respect to claims, proofs of loss, and loss estimates relating to
such flood insurance policy, of--
(1) any insurance agent or adjuster, or insurance company;
or
(2) any employee or contractor of the Federal Emergency
Management Agency.
SEC. 206. STUDY AND REPORT ON USE OF COST COMPLIANCE COVERAGE.
Not later than 1 year after the date of enactment of this Act, the
Director of the Federal Emergency Management Agency shall submit to
Congress a report that sets forth--
(1) the use of cost of compliance coverage under section
1304(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4011(b)) in connection with flood insurance policies;
(2) any barriers to policyholders using the funds provided
by cost of compliance coverage under that section 1304(b) under
a flood insurance policy, and recommendations to address those
barriers; and
(3) the steps that the Federal Emergency Management Agency
has taken to ensure that funds paid for cost of compliance
coverage under that section 1304(b) are being used to lessen
the burdens on all homeowners and the Program.
SEC. 207. MINIMUM TRAINING AND EDUCATION REQUIREMENTS.
The Director of the Federal Emergency Management Agency shall, in
cooperation with the insurance industry, State insurance regulators,
and other interested parties--
(1) establish minimum training and education requirements
for all insurance agents who sell flood insurance policies; and
(2) not later than 6 months after the date of enactment of
this Act, publish these requirements in the Federal Register,
and inform insurance companies and agents of the requirements.
SEC. 208. GAO STUDY AND REPORT.
(a) Study.--The Comptroller General of the United States shall
conduct a study of--
(1) the adequacy of the scope of coverage provided under
flood insurance policies in meeting the intended goal of
Congress that flood victims be restored to their pre-flood
conditions, and any recommendations to ensure that goal is
being met;
(2) the adequacy of payments to flood victims under flood
insurance policies; and
(3) the practices of the Federal Emergency Management
Agency and insurance adjusters in estimating losses incurred
during a flood, and how such practices affect the adequacy of
payments to flood victims.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General shall submit to Congress a report
regarding the results of the study under subsection (a).
SEC. 209. PROSPECTIVE PAYMENT OF FLOOD INSURANCE PREMIUMS.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C.
4015) is amended by adding at the end the following:
``(f) Adjustment of Premium.--Notwithstanding any other provision
of law, if the Director determines that the holder of a flood insurance
policy issued under this Act is paying a lower premium than is required
under this section due to an error in the flood plain determination,
the Director may only prospectively charge the higher premium rate.''.
SEC. 210. REPORT ON CHANGES TO FEE SCHEDULE OR FEE PAYMENT
ARRANGEMENTS.
Not later than 3 months after the date of enactment of this Act,
the Director shall submit a report on any changes or modifications made
to the fee schedule or fee payment arrangements between the Federal
Emergency Management Agency and insurance adjusters who provide
services with respect to flood insurance policies to--
(1) the Committee on Banking, Housing, and Urban Affairs of
the Senate; and
(2) the Committee on Financial Services of the House of
Representatives.
Calendar No. 513
108th CONGRESS
2d Session
S. 2238
[Report No. 108-262]
_______________________________________________________________________
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.
_______________________________________________________________________
May 13, 2004
Reported with amendments