[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4205 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4205

  To provide incentives to encourage private sector efforts to reduce 
earthquake losses, to establish a national disaster mitigation program, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 2, 2005

   Mr. Ford introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
Transportation and Infrastructure, Science, and Financial Services, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
  To provide incentives to encourage private sector efforts to reduce 
earthquake losses, to establish a national disaster mitigation program, 
                        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.

    This Act may be cited as the ``National Earthquake Preparedness, 
Response, and Recovery Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) As a result of research funded by the National 
        Earthquake Hazards Reduction Program, a substantial body of 
        knowledge exists about earth sciences, geotechnical and 
        structural engineering, and human behavior relating 
        earthquakes.
            (2) The foremost challenge as we enter the 21st century is 
        putting this knowledge to work by reducing future losses to 
        improve the safety of Americans and the performance of State 
        and local government facilities and private buildings and 
        facilities.
            (3) Earthquakes and tsunamis cause great danger to human 
        life and property throughout the United States and continue to 
        threaten Americans significantly in over 40 States and 
        territories. In 1811 and 1812, the continental United States 
        experienced one of the largest earthquakes in its history in 
        the New Madrid seismic zone, which stretches from southern 
        Illinois to northeastern Arkansas. The magnitude of those 
        earthquakes resulted in large areas of land sinking into the 
        earth, the formation of Reelfoot Lake in northwestern Tennessee 
        and the Mississippi River changing its course. According to the 
        United States Geological Survey, the probability of a repeat of 
        the 1811-1812 earthquakes (magnitude 7.5 to 8.00) in a 50 year 
        period is 10 percent. The probability of a magnitude 6.0 or 
        larger is 25 percent to 40 percent.
            (4) Too few States and local communities have sufficiently 
        identified and assessed their risk and implemented adequate 
        measures to reduce losses from such disasters and to ensure 
        that their critical public infrastructure and facilities will 
        continue to function after a disaster.
            (5) Too much of the Nation's stocks of housing and 
        commercial buildings remain inherently vulnerable to earthquake 
        shaking. Future losses in these facilities can be lessened 
        using currently feasible technology.
            (6) Too much of local government infrastructure remain at 
        risk and are likely to be non-functional in the aftermath of 
        foreseeable earthquake events at the time when the services 
        that local governments provide are critically necessary.
            (7) Federal, State, and local government expenditures for 
        disaster assistance and recovery have increased without 
        commensurate reduction in the likelihood of future losses from 
        such earthquakes.
            (8) Feasible techniques for reducing future earthquake 
        losses are readily available.
            (9) Economic incentives are needed to assist States and 
        local communities and the public in implementing available 
        measures to reduce losses and ensure continued functionality of 
        their infrastructure.
    (b) Purpose.--It is the purpose of this Act to establish a national 
disaster mitigation program that--
            (1) reduces the loss of life and property, human suffering, 
        economic disruption, and disaster assistance costs resulting 
        from earthquakes;
            (2) offers financial incentives to encourage private sector 
        efforts to reduce earthquake losses;
            (3) provides matching finds to encourage and assist States 
        and local governments and the private sector in their efforts 
        to implement measures designed to ensure the continued 
        functionality of public infrastructure, commerce, and 
        habitation after earthquakes;
            (4) creates Federal, State, and local government 
        partnerships to reduce the vulnerability of public 
        infrastructure, commercial enterprises, and residential 
        buildings to earthquakes; and
            (5) ensures that the Director of the Federal Emergency 
        Management Agency meets or surpasses the highest professional 
        requirements.

SEC. 3. QUALIFICATIONS OF UNDER SECRETARY FOR EMERGENCY PREPAREDNESS 
              AND RESPONSE AND DIRECTOR OF THE FEDERAL EMERGENCY 
              MANAGEMENT AGENCY.

    (a) Qualifications of Under Secretary for Emergency Preparedness 
and Response.--Section 501 of the Homeland Security Act of 2002 (6 
U.S.C. 311) is amended--
            (1) by inserting ``(a) In General.--'' before ``There''; 
        and
            (2) by adding at the end the following:
    ``(b) Qualifications.--
            ``(1) In general.--The Under Secretary shall be appointed 
        by the President in accordance with section 103 from among 
        individuals who are uniquely qualified to carry out the duties 
        and powers of the office by virtue of their emergency 
        management experience, educational background, training, and 
        professional contributions.
            ``(2) Considerations.--
                    ``(A) Emergency management experience.--In 
                assessing an individual's emergency management 
                experience under paragraph (1), the President shall 
                determine whether the individual has a minimum of 4 
                years of comprehensive experience in emergency 
                management, mitigation, and response, including 
                participation in full scale exercises and actual 
                disasters.
                    ``(B) Educational background.--In assessing an 
                individual's educational background under paragraph 
                (1), the President shall determine whether the 
                individual has a 4-year baccalaureate degree, an 
                advanced degree, and a certification as an emergency 
                manager.
                    ``(C) Training.--In assessing an individual's 
                training under paragraph (1), the President shall 
                determine whether the individual has a minimum of 100 
                hours of emergency management training and a minimum of 
                100 hours of general management training.
                    ``(D) Professional contributions.--In assessing an 
                individual's professional contributions under paragraph 
                (1), the President shall determine whether the 
                individual has made significant contributions to the 
                emergency management profession in the areas of 
                professional membership, speaking, publication of 
                articles, service on professional boards, and other 
                areas beyond the scope of the emergency management job 
                requirements.''.
    (b) Appointment and Qualifications of Director of Federal Emergency 
Management Agency.--Section 507 of the Homeland Security Act of 2002 (6 
U.S.C. 317) is amended--
            (1) by redesignating subsections (a) and (b) as subsections 
        (b) and (c), respectively; and
            (2) by inserting before subsection (b), as so redesignated, 
        the following:
    ``(a) Appointment and Qualifications of Director.--The Federal 
Emergency Management Agency shall be headed by a Director, who shall be 
appointed by the President, by and with the advice and consent of the 
Senate. The Director shall be appointed from among individuals who meet 
the same qualification requirements as apply to the Under Secretary for 
Emergency Preparedness and Response under section 501(b).''.

SEC. 4. NONREFUNDABLE CREDIT FOR EXPENSES RELATED TO SEISMIC RETROFIT 
              OF PRINCIPAL RESIDENCE.

    (a) General Rule.--Subpart A of part IV of subchapter A of chapter 
1 of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25D the 
following:

``SEC. 25E. EXPENSES RELATED TO SEISMIC RETROFIT OF PRINCIPAL 
              RESIDENCE.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to 50 percent of so much of the qualified 
seismic retrofit expenses of the taxpayer for the taxable year as do 
not exceed $6,000.
    ``(b) Qualified Seismic Retrofit Expenses.--For purposes of this 
section--
            ``(1) In general.--The term `qualified seismic retrofit 
        expenses' means amounts paid or incurred by the taxpayer during 
        the taxable year in relation to any seismic retrofit 
        construction of the principal residence of the taxpayer.
            ``(2) Seismic retrofit construction.--The term `seismic 
        retrofit construction' means any addition or improvement--
                    ``(A) which is certified by the State disaster 
                agency or other applicable agency--
                            ``(i) as resulting in the mitigation of the 
                        risk of damage to existing property from an 
                        earthquake, and
                            ``(ii) as being in addition to any addition 
                        or improvement required by any State or local 
                        law with respect to such property, and
                    ``(B) which is placed in service at least 5 years 
                after the date the building is first placed in service.
        Such term does not include the cost of acquiring such property 
        (or any interest therein).
            ``(3) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
    ``(c) Denial of Double Benefit.--No deduction shall be allowed 
under any other provision of this chapter with respect to any amount of 
qualified seismic retrofit expenses taken into account under subsection 
(a).
    ``(d) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section with respect to any residence, the basis 
of such residence shall be reduced by the amount of the credit so 
allowed.''.
    (b) Conforming Amendments.--
            (1) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 25D 
        the following new item:

``Sec. 25E. Expenses related to seismic retrofit of principal 
                            residence.''.
            (2) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (36), by striking 
        the period at the end of paragraph (37) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(38) in the case of a residence with respect to which a 
        credit was allowed under section 25E, to the extent provided in 
        section 25E(d).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred in taxable years beginning after 
December 31, 2005.

SEC. 5. RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN SEISMIC RETROFIT 
              EXPENSES.

    (a) Treatment as 5-Year Property.--Section 168(e)(3)(B) of the 
Internal Revenue Code of 1986 (relating to 5-year property) is amended 
by striking ``and'' at the end of clause (v), by striking the period 
and inserting ``, and'' at the end of clause (vi), and by inserting 
after clause (vi) the following new clause:
                            ``(vii) any qualified seismic retrofit 
                        property.''.
    (b) Definition of Qualified Seismic Retrofit Property.--Section 
168(i) of the Internal Revenue Code of 1986 (relating to definitions 
and special rules) is amended by adding at the end the following new 
paragraph:
            ``(18) Qualified seismic retrofit property.--
                    ``(A) In general.--The term `qualified seismic 
                retrofit property' means any addition or improvement to 
                real property for which depreciation is allowable under 
                this section--
                            ``(i) for which the expenditure is properly 
                        chargeable to the capital account, and
                            ``(ii) which is a seismic retrofit.
                    ``(B) Seismic retrofit.--For purposes of 
                subparagraph (A)(i), the term `seismic retrofit' means 
                any addition or improvement--
                            ``(i) which is certified by the State 
                        disaster agency or other applicable agency--
                                    ``(I) as resulting in the 
                                mitigation of the risk of damage to 
                                existing property from an earthquake, 
                                and
                                    ``(II) as being in addition to any 
                                addition or improvement required by any 
                                State or local law with respect to such 
                                property, and
                            ``(ii) which is placed in service at least 
                        5 years after the date the building is first 
                        placed in service.
                Such term does not include the cost of acquiring such 
                property (or any interest therein).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified seismic retrofit property placed in service after 
December 31, 2005.

SEC. 6. QUALIFIED SEISMIC RETROFITTING BONDS.

    (a) In General.--Section 144 of the Internal Revenue Code of 1986 
(relating to qualified small issue bond; qualified student loan bond; 
qualified redevelopment bond) is amended by adding at the end the 
following new subsection:
    ``(d) Qualified Seismic Retrofitting Bond.--For purposes of this 
part--
            ``(1) In general.--The term `qualified seismic retrofitting 
        bond' means any bond issued as part of an issue 95 percent or 
        more of the net proceeds of which are to be used--
                    ``(A) for seismic retrofitting expenditures, and
                    ``(B) in a manner which meets the requirements of 
                paragraph (3).
            ``(2) Seismic retrofitting expenditure.--For purposes of 
        paragraph (1), the term `seismic retrofitting expenditure' 
        means any amount properly chargeable to capital account--
                    ``(A) which is certified by the State disaster 
                agency or other applicable agency--
                            ``(i) as resulting in the mitigation of the 
                        risk of damage to existing property from an 
                        earthquake, and
                            ``(ii) as being in addition to any addition 
                        or improvement required by any State or local 
                        law with respect to such property, and
                    ``(B) which is placed in service at least 5 years 
                after the date the building is first placed in service.
        Such term does not include the cost of acquiring such property 
        (or any interest therein).
            ``(3) Use of proceeds requirements.--The use of the 
        proceeds of an issue meets the requirements of this paragraph 
        if within the 26-month period beginning with the date of 
        issue--
                    ``(A) at least 95 percent of the net proceeds of 
                such issue are used for seismic retrofitting 
                expenditures or are used to finance 1 or more loans to 
                ultimate borrowers for such expenditures, or
                    ``(B) to the extent not so used under subparagraph 
                (A), such proceeds in excess of $10,000 are used to 
                redeem bonds which are part of such issue.''.
    (b) Bonds Treated as Qualified Bonds.--Paragraph (1) of section 
141(e) of the Internal Revenue Code of 1986 (defining qualified bond) 
is amended by striking ``or'' at the end of subparagraph (F), by 
redesignating subparagraph (G) as subparagraph (H), and by inserting 
after subparagraph (F) the following new subparagraph:
                    ``(G) a qualified seismic retrofitting bond, or''.
    (c) Bonds Included for Purposes of Small Issuer Exemption Status.--
Subclause (I) of section 265(b)(3)(C)(ii) of the Internal Revenue Code 
of 1986 (relating to obligations not taken into account in determining 
status as qualified small issuer) is amended by inserting ``, or a 
qualified seismic retrofitting bond, as defined in section 144(d)(1)'' 
after ``section 145''.
    (d) Exception From Volume Cap.--Section 146(g) of the Internal 
Revenue Code of 1986 (relating to exception for certain bonds) is 
amended by striking ``and'' at the end of paragraph (3), by striking 
the period at the end of paragraph (4) and inserting a comma, and by 
adding after paragraph (4) the following new paragraphs:
            ``(5) any qualified mortgage bond if 95 percent or more of 
        the net proceeds of the bond are to be used to provide home 
        improvement loans in connection with seismic retrofitting 
        expenditures (as defined in section 144(d)(2) without regard to 
        the capital account requirement), and
            ``(6) any qualified seismic retrofitting bond.''.
    (e) Proceeds of Mortgage Revenue Bonds Used in Connection With 
Seismic Retrofitting.--
            (1) In general.--Paragraph (4) of section 143(k) of the 
        Internal Revenue Code of 1986 (relating to other definitions 
        and special rules for qualified mortgage bonds) is amended to 
        read as follows:
            ``(4) Qualified home improvement loan.--The term `qualified 
        home improvement loan' means--
                    ``(A) the financing (in an amount which does not 
                exceed $15,000)--
                            ``(i) of alterations, repairs, and 
                        improvements on or in connection with an 
                        existing residence by the owner thereof, but
                            ``(ii) only for such items as substantially 
                        protect or improve the basic livability or 
                        energy efficiency of the property, and
                    ``(B) the financing (in an amount which does not 
                exceed $20,000) of seismic retrofitting expenditures 
                (as defined in section 144(d)(2) without regard to the 
                capital account requirement) in connection with an 
                existing residence by the owner thereof.''.
            (2) Exception from income requirements.--Section 143(f) of 
        such Code (relating to income requirements) is amended by 
        adding at the end the following new paragraph:
            ``(7) Exception for certain qualified home improvement 
        loans.--Paragraph (1) shall not apply with respect to any 
        qualified home improvement loan (as defined in subsection 
        (k)(4)(B).''.
    (f) Clerical Amendments.--
            (1) The heading of section 144 of the Internal Revenue Code 
        of 1986 is amended by striking ``bond.'' and inserting ``bond; 
        qualified seismic retrofitting bond.''.
            (2) The item relating to section 144 in the table of 
        sections for subpart A of part IV of subchapter B of chapter 1 
        of such Code is amended by striking ``bond.'' and inserting 
        ``bond; qualified seismic retrofitting bond.''
    (g) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 7. TREATMENT OF PASSIVE LOSSES OF CERTAIN PARTNERSHIPS ENGAGED IN 
              SEISMIC RETROFITTING.

    (a) In General.--Section 469 of the Internal Revenue Code of 1986 
(relating to passive activity losses and credits limited) is amended by 
adding at the end the following new subsection:
    ``(n) Exemption for Seismic Retrofitting Trade or Business.--
            ``(1) In general.--In the case of any natural person, 
        subsection (a) shall not apply to that portion of the passive 
        activity loss or the deduction equivalent (within the meaning 
        of subsection (j)(5)) of the passive activity credit for any 
        taxable year which is attributable to any seismic retrofitting 
        activity which such person engages in during the taxable year, 
        whether or not the taxpayer materially participates in such 
        activity.
            ``(2) Seismic retrofitting activity.--For purposes of this 
        subsection, the term `seismic retrofitting activity' means any 
        activity which involves the trade or business of seismic 
        retrofit construction (as defined in section 25E(b)(2)) for 
        residential property.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2005.

SEC. 8. MORTGAGE INSURANCE INCENTIVE.

    Section 203(b)(2) of the National Housing Act (12 U.S.C. 
1709(b)(2)), is amended, in the first undesignated paragraph (relating 
to increase of amounts insured for costs due to installation of solar 
energy systems) that follows subparagraph (A), by inserting ``or due to 
seismic retrofitting of the residence (within the meaning of the term 
`seismic retrofit construction' under section 25E(b)(2) of the Internal 
Revenue Code of 1986)'' before the period at the end.

SEC. 9. EARTHQUAKE DISASTER MITIGATION AND RECOVERY PLANNING GRANT 
              PROGRAM.

    (a) Definitions.--Section 4 of the Earthquake Hazards Reduction Act 
of 1977 (42 U.S.C. 7703) is amended by adding at the end the following:
            ``(10) Agency.--The term `Agency' means the Federal 
        Emergency Management Agency.
            ``(11) Critical facility.--The term `critical facility' 
        means--
                    ``(A) a public structure (including a police 
                station, fire station, city or town hall, school, or 
                other public building) or a public or nonprofit private 
                hospital that is--
                            ``(i) owned by an entity; and
                            ``(ii) critical to the continuity of the 
                        entity or to the conduct of the disaster 
                        response activities of the entity; or
                    ``(B) a facility that--
                            ``(i) provides medical services to a 
                        specific occupational or industry segment of 
                        the general public; and
                            ``(ii) is operated by an organization 
                        described in subsection (c) or (d) of section 
                        501 of the Internal Revenue Code of 1986 and 
                        exempt from taxation under subsection (a) of 
                        such section.
            ``(12) Critical public infrastructure.--The term `critical 
        public infrastructure' means a utility or transportation system 
        (including a bridge, energy system, water or sewer system, or 
        communication system) that is--
                    ``(A) owned by an entity; and
                    ``(B) critical to the conduct of the disaster 
                response activities of the entity.
            ``(13) Earthquake disaster.--
                    ``(A) In general.--The term `earthquake disaster' 
                means a disaster that results from a movement of the 
                earth.
                    ``(B) Inclusions.--The term `earthquake disaster' 
                includes a disaster that results from a tsunami or an 
                earthquake-caused landslide or liquefaction (as 
                determined by the Director of the Agency).
            ``(14) Grant program.--The term `grant program' means the 
        earthquake disaster mitigation and recovery planning grant 
        program established under section 6.
            ``(15) Indian tribe.--The term `Indian tribe' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            ``(16) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001).
            ``(17) Local government.--The term `local government' 
        means--
                    ``(A) a city, town, township, county, parish, 
                village, or other general-purpose political subdivision 
                of a State;
                    ``(B) an Indian tribe; and
                    ``(C) a geologic hazard abatement or similar 
                special purpose district formed to carry out or fund 
                projects to reduce the vulnerability of infrastructure 
                and buildings to earthquake disasters.
            ``(18) Loss reduction trust fund.--The term `Loss Reduction 
        Trust Fund' means the Loss Reduction Trust Fund established by 
        section 7.''.
    (b) Grant Program.--The Earthquake Hazards Reduction Act of 1977 is 
amended by inserting after section 5 (42 U.S.C. 7704) the following:

``SEC. 6. EARTHQUAKE DISASTER MITIGATION AND RECOVERY PLANNING GRANT 
              PROGRAM.

    ``(a) Establishment.--The Director of the Agency may establish a 
grant program to provide financial assistance to eligible recipients 
described in subsection (b) to pay the Federal share of the cost of 
carrying out earthquake disaster mitigation and recovery planning 
measures with respect to the critical facilities and critical public 
infrastructure under the jurisdiction of the recipients.
    ``(b) Eligible Recipients.--
            ``(1) In general.--To be eligible for a grant under the 
        grant program, an entity shall be a local government, public or 
        nonprofit private hospital, or public institution of higher 
        education that--
                    ``(A) has jurisdiction over, or is located in, an 
                area that is subject to earthquake disasters;
                    ``(B) submits to the Director of the Agency for 
                approval an application for the grant in such form as 
                the Director shall require;
                    ``(C) has completed an earthquake disaster risk 
                analysis;
                    ``(D) has adopted a long-term strategic earthquake 
                disaster loss reduction plan that identifies high 
                priority earthquake disaster loss reduction projects; 
                and
                    ``(E) meets criteria established by the Director 
                under paragraph (2).
            ``(2) Criteria.--
                    ``(A) Establishment.--The Director of the Agency 
                shall establish, by regulation, criteria that local 
                governments, public and nonprofit private hospitals, 
                and public institutions of higher education shall meet 
                to qualify for grants under the grant program.
                    ``(B) Requirement applicable to local 
                governments.--The criteria under subparagraph (A) 
                applicable to local governments shall include the 
                requirement that a local government adopt and enforce 
                comprehensive ordinances, building codes, land use 
                measures, and other measures for earthquake disaster 
                loss reduction that--
                            ``(i) take into consideration the 
                        identified earthquake hazards applicable to the 
                        area over which the local government has 
                        jurisdiction; and
                            ``(ii) reflect current, cost-effective 
                        techniques designed to reduce losses from 
                        earthquake disasters and ensure the continued 
                        functionality of critical facilities and 
                        critical public infrastructure.
                    ``(C) Consultation.--The criteria under 
                subparagraph (A) shall be adopted after consultation 
                with--
                            ``(i) Federal, State, and local government 
                        officials and agencies; and
                            ``(ii) other persons knowledgeable in the 
                        fields of natural disasters and hazard 
                        mitigation.
    ``(c) Cost Sharing.--
            ``(1) In general.--Subject to paragraph (2), the Federal 
        share of the cost of measures carried out using a grant under 
        the grant program shall be 75 percent.
            ``(2) Insufficiency of federal funds.--In paying the 
        Federal share under paragraph (1) in a case in which there are 
        insufficient funds in the Loss Reduction Trust Fund to fund all 
        applications that are eligible for approval, the Director of 
        the Agency may consider--
                    ``(A) the desirability of geographical dispersal of 
                available funds;
                    ``(B) the extent to which any applicant faces a 
                greater risk of earthquake disasters, in number or 
                severity, than other applicants;
                    ``(C) the extent to which each applicant is 
                expending resources on addressing urgent problems 
                concerning critical facilities or critical public 
                infrastructure; and
                    ``(D) the extent to which the measures proposed to 
                be funded using the grant are expected to result in 
                cost savings to the Federal Government under the Robert 
                T. Stafford Disaster Relief and Emergency Assistance 
                Act (42 U.S.C. 5121 et seq.).
    ``(d) Use of Grant Funds.--
            ``(1) In general.--A grant under the grant program may be 
        used--
                    ``(A) to retrofit critical facilities and critical 
                public infrastructure in accordance with paragraph (2);
                    ``(B) to implement earthquake disaster mitigation 
                measures in accordance with paragraph (3); and
                    ``(C) to develop earthquake disaster recovery plans 
                in accordance with paragraph (4).
            ``(2) Retrofit of critical facilities and critical public 
        infrastructure.--
                    ``(A) In general.--A grant under the grant program 
                may be used to retrofit a critical facility or critical 
                public infrastructure with parts or equipment that 
                meets current standards for withstanding earthquake 
                disasters (as determined by the Director of the 
                Agency).
                    ``(B) Selection of critical facilities and critical 
                public infrastructure.--A critical facility or critical 
                public infrastructure shall be selected for a grant 
                under subparagraph (A) if the critical facility or 
                critical public infrastructure is identified in a long-
                term strategic earthquake disaster loss reduction plan 
                adopted under subsection (b)(1)(D) as having high 
                priority for retrofit because of the effect that damage 
                to the critical facility or critical public 
                infrastructure from an earthquake disaster would have 
                on the quality of human life in the region and on 
                recovery from the earthquake disaster.
            ``(3) Implementation of earthquake disaster mitigation 
        measures.--A grant under the grant program may be used to 
        implement an earthquake disaster mitigation measure designed to 
        ensure the continued functionality of a critical facility or 
        critical public infrastructure.
            ``(4) Development of earthquake disaster recovery plans.--
                    ``(A) In general.--A grant under the grant program 
                may be used to develop an earthquake disaster recovery 
                plan that includes--
                            ``(i) a plan for reestablishing government 
                        operations and community services after an 
                        earthquake disaster; and
                            ``(ii) a plan for long-term recovery after 
                        an earthquake disaster.
                    ``(B) Schedule for payment of grant funds.--Of a 
                grant for measures described in subparagraph (A)--
                            ``(i) 50 percent shall be paid upon 
                        approval by the Director of the Agency of the 
                        application for the grant; and
                            ``(ii) 50 percent shall be paid upon 
                        adoption of the earthquake disaster recovery 
                        plan by the local government, public hospital, 
                        or public institution of higher education.

``SEC. 7. LOSS REDUCTION TRUST FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a fund to be known as the `Loss Reduction Trust Fund', 
consisting of--
            ``(1) such amounts as are appropriated to the Loss 
        Reduction Trust Fund under subsection (b);
            ``(2) such amounts as are appropriated to the Loss 
        Reduction Trust Fund under section 12(e); and
            ``(3) any interest earned on investment of amounts in the 
        Loss Reduction Trust Fund under subsection (d).
    ``(b) Transfers to Loss Reduction Trust Fund.--There are 
appropriated to the Loss Reduction Trust Fund amounts equivalent to--
            ``(1) such amounts as the Director of the Agency determines 
        are remaining after the close-out of any active disaster 
        declaration account under the Robert T. Stafford Disaster 
        Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.);
            ``(2) such amounts as--
                    ``(A) were allocated for hazard mitigation 
                assistance with respect to a major disaster under 
                section 404 of that Act (42 U.S.C. 5170c); and
                    ``(B) the Director of the Agency determines are 
                remaining after expiration of the time limits 
                established under subsection (c) of that section; and
            ``(3) amounts received as gifts under subsection (f).
    ``(c) Expenditures From Loss Reduction Trust Fund.--Upon request by 
the Director of the Agency, the Secretary of the Treasury shall 
transfer from the Loss Reduction Trust Fund to the Director of the 
Agency such amounts as the Director of the Agency determines are 
necessary to carry out section 6.
    ``(d) Investment of Amounts.--
            ``(1) In general.--The Secretary of the Treasury shall 
        invest such portion of the Loss Reduction Trust Fund as is not, 
        in the judgment of the Secretary of the Treasury, required to 
        meet current withdrawals. Investments may be made only in 
        interest-bearing obligations of the United States.
            ``(2) Acquisition of obligations.--For the purpose of 
        investments under paragraph (1), obligations may be acquired--
                    ``(A) on original issue at the issue price; or
                    ``(B) by purchase of outstanding obligations at the 
                market price.
            ``(3) Sale of obligations.--Any obligation acquired by the 
        Loss Reduction Trust Fund may be sold by the Secretary of the 
        Treasury at the market price.
            ``(4) Credits to fund.--The interest on, and the proceeds 
        from the sale or redemption of, any obligations held in the 
        Loss Reduction Trust Fund shall be credited to and form a part 
        of the Loss Reduction Trust Fund.
    ``(e) Transfers of Amounts.--
            ``(1) In general.--The amounts required to be transferred 
        to the Loss Reduction Trust Fund under this section shall be 
        transferred at least monthly from the general fund of the 
        Treasury to the Loss Reduction Trust Fund on the basis of 
        estimates made by the Secretary of the Treasury.
            ``(2) Adjustments.--Proper adjustment shall be made in 
        amounts subsequently transferred to the extent prior estimates 
        were in excess of or less than the amounts required to be 
        transferred.
    ``(f) Gifts.--The Secretary of the Treasury may accept gifts of 
cash for transfer to the Loss Reduction Trust Fund.''.
    (c) Funding for Central United States Earthquake Consortium.--
Section 12(a)(8)(B) of the Earthquake Hazards Reduction Act of 1977 (42 
U.S.C. 7706) is amended by striking the comma at the end and inserting 
the following: ``, of which $1,000,000 is for the Central United States 
Earthquake Consortium to fund a multi-State consortium to reduce the 
threat of earthquake damages in the New Madrid seismic region through 
efforts to enhance preparedness, response, recovery, and mitigation,'' 
    (d) Authorization of Appropriations.--Section 12 of the Earthquake 
Hazards Reduction Act of 1977 (42 U.S.C. 7706) is amended by adding at 
the end the following:
    ``(e) Loss Reduction Trust Fund.--There is authorized to be 
appropriated to the Loss Reduction Trust Fund $1,000,000,000.''.
    (e) Postdisaster Assistance.--
            (1) Definitions.--Section 102 of the Robert T. Stafford 
        Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122) 
        is amended by adding at the end the following:
            ``(10) Critical facility.--The term `critical facility' 
        means--
                    ``(A) a public structure (including a police 
                station, fire station, city or town hall, school, or 
                other public building) or a public or nonprofit private 
                hospital that is--
                            ``(i) owned by an entity; and
                            ``(ii) critical to the continuity of the 
                        entity or to the conduct of the disaster 
                        response activities of the entity; or
                    ``(B) a facility that--
                            ``(i) provides medical services to a 
                        specific occupational or industry segment of 
                        the general public; and
                            ``(ii) is operated by an organization 
                        described in subsection (c) or (d) of section 
                        501 of the Internal Revenue Code of 1986 and 
                        exempt from taxation under subsection (a) of 
                        such section.
            ``(11) Critical public infrastructure.--The term `critical 
        public infrastructure' means a utility or transportation system 
        (including a bridge, energy system, water or sewer system, or 
        communication system) that is--
                    ``(A) owned by an entity; and
                    ``(B) critical to the conduct of the disaster 
                response activities of the entity.''.
    (f) Conforming Amendments.--Section 12(a) of the Earthquake Hazards 
Reduction Act of 1977 (42 U.S.C. 7706(a)) is amended by inserting ``(as 
in effect on September 30, 1997)'' after ``6 of this Act'' each place 
it appears.

SEC. 10. FUNDING FOR ADVANCED NATIONAL SEISMIC RESEARCH AND MONITORING 
              SYSTEM.

    (a) Findings.--Congress finds the following:
            (1) The Advanced National Seismic System (know as 
        ``ANSS''), established by the Director of the United States 
        Geographical Survey under section 13 of the Earthquake Hazards 
        Reduction Act of 1977 (42 U.S.C. 7707), is charged with 
        providing timely data and information for seismic events, 
        including their effects on buildings and structures, by 
        employing modern monitoring methods and technologies.
            (2) These technologies include an integrated system of 
        modern seismographs, communications networks, data processing, 
        and well-trained personnel.
            (3) ANSS will automatically broadcast information when a 
        significant earthquake occurs for immediate assessment of its 
        impact.
            (4) Where feasible, for sites at a distance from the 
        epicenter, ANSS will broadcast an early warning seconds before 
        strong shaking arrives.
            (5) This capability can provide a warning that may save 
        lives and critical infrastructure.
            (6) Since fiscal year 2002, Congress has appropriated 
        funding for ANSS at a level that is considerably lower than its 
        authorization.
    (b) Sense of Congress.--It is the sense of Congress that the 
Advanced National Seismic System should be funded at its authorization 
level in order to achieve the goal of deploying a nationwide network of 
over 7,000 earthquake sensor systems serving the entire United States 
and providing dense coverage in 26 at-risk urban areas.
                                 <all>