[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4320 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4320

   To restore the financial solvency of the national flood insurance 
                    program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 15, 2005

 Mr. Oxley (for himself and Mr. Frank of Massachusetts) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
   To restore the financial solvency of the national flood insurance 
                    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 Flood Insurance Program 
Commitment to Policyholders and Reform Act of 2005''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the amount of the flood insurance claims resulting from 
        Hurricane Katrina and Hurricane Rita will likely exceed the 
        aggregate amount of all claims previously paid in the history 
        of the national flood insurance program, and will require an 
        increase in the program's borrowing authority;
            (2) flood insurance policyholders have a legitimate 
        expectation that they will receive fair and timely compensation 
        for losses covered under their policies;
            (3) substantial flooding has occurred, and will likely 
        occur again, outside of the areas designated as the 100-year 
        floodplain;
            (4) to adequately and correctly assess potential flood 
        damage and losses in all areas on the United States, the 
        national flood insurance program will need to update its flood 
        maps with the latest technology;
            (5) the maximum coverage limits for flood insurance 
        policies should be increased to reflect inflation and the 
        increased cost of housing;
            (6) significant reforms to the national flood insurance 
        program required in the Bunning-Bereuter-Blumenauer Flood 
        Insurance Reform Act of 2004 have yet to be implemented; and
            (7) despite reforms required in the Bunning-Bereuter-
        Blumenauer Flood Insurance Reform Act of 2004, the national 
        flood insurance program requires a modernized and updated 
        administrative model to ensure that the people of the United 
        States have continued access to flood insurance.
    (b) Purposes.--The purposes of this Act are--
            (1) to protect the integrity of the national flood 
        insurance program by fully funding existing legal obligations 
        expected by existing policyholders who have paid policy 
        premiums in return for flood insurance coverage;
            (2) to increase incentives for homeowners and communities 
        to participate in the national flood insurance program and to 
        improve oversight to ensure full participation in the program 
        for owners of properties for which such participation is 
        mandatory;
            (3) to increase awareness of homeowners of flood risks and 
        improve the quality of information regarding such risks 
        provided to homeowners; and
            (4) to better mitigate future flood damage risks through a 
        combination of enhanced protective measures, property 
        elevation, and buyouts of flood-prone properties.

SEC. 3. MANDATORY PURCHASE REQUIREMENT FOR 500-YEAR FLOOD PLAIN.

    (a) Flood Disaster Protection Act of 1973.--Section 3(a) of the 
Flood Disaster Protection Act of 1973 (42 U.S.C. 4003(a)) is amended--
            (1) in paragraph (10), by striking ``and'' at the end;
            (2) in paragraph (11), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following new paragraph:
            ``(12) `area having special flood hazards' or `flood hazard 
        area' means any area that is determined by the Director--
                    ``(A) pursuant section 1360 of the National Flood 
                Insurance Act of 1968, to be subject to inundation by 
                the flood that has a 0.2 percent chance of being 
                equaled or exceeded in any year; or
                    ``(B) to be an area that would be an area described 
                in subparagraph (A) of this paragraph, but for the 
                existence of a structural flood protection system;''.
    (b) National Flood Insurance Act of 1968.--The National Flood 
Insurance Act of 1968 is amended--
            (1) in section 1370(a) (42 U.S.C. 4121(a))--
                    (A) in paragraph (14), by striking ``and'' at the 
                end;
                    (B) in paragraph (15), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(16) the term `area having special flood hazards' and 
        `flood hazard area' mean an area that is determined by the 
        Director--
                    ``(A) pursuant section 1360, to be subject to 
                inundation by the flood that has a 0.2 percent chance 
                of being equaled or exceeded in any year; or
                    ``(B) to be an area that would be an area described 
                in subparagraph (A) of this paragraph, but for the 
                existence of a structural flood protection system;'';
            (2) in section 1361A(g)(4) (42 U.S.C. 4102a(g)(4)), by 
        striking ``flood hazard area'' and inserting ``area having 
        special flood hazards''; and
            (3) in section 1366(m) (42 U.S.C. 4104c(m)), by striking 
        ``100-year'' and inserting ``500-year''.
    (c) Annual Flood Map Modernization Reports and Certification of 
Completion.--
            (1) In general.--During the period that ends upon the 
        completion by the Director of the Federal Emergency Management 
        Agency of the updating and modernization of all floodplain 
        areas and flood-risk zones, the Director shall submit a report 
        annually to the Congress describing the extent to which such 
        updating and modernization has been completed. Upon the 
        completion of such updating, the Director shall submit to the 
        Congress, and cause to be published in the Federal Register, a 
        report certifying such completion.
            (2) Timing.-- The first report under this subsection shall 
        be submitted not later than June 30, 2006, and successive 
        reports required under this subsection during the period 
        referred to in paragraph (1) shall be submitted not later than 
        June 30 of each year during such period.
    (d) Applicability.--The amendments made by subsections (a) and (b) 
shall take effect, and apply beginning on--
            (1) January 1, 2009, or
            (2) publication of the certification by the Director 
        pursuant to subsection (c),
whichever occurs first.

SEC. 4. ENFORCEMENT.

    Paragraph (5) of section 102(f) of the Flood Disaster Protection 
Act of 1973 (42 U.S.C. 4012a) is amended--
            (1) by striking ``$350'' and inserting ``$2,000''; and
            (2) by striking the last sentence.

SEC. 5. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 REFORM ACT.

    (a) Appeals Process.--As directed in section 205 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
note), the Director of the Federal Emergency Management Agency is again 
directed to, not later than 90 days after the date of the enactment of 
this Act, 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 as required by such section.
    (b) Minimum Training and Education Requirements.--The Director of 
the Federal Emergency Management Agency is directed to enforce the 
minimum training and education requirements for all insurance agents 
who sell flood insurance policies that have been established under the 
notice published September 1, 2005 (70 Fed. Reg. 52117) pursuant to 
section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform 
Act of 2004 (42 U.S.C. 4011 note).
    (c) Mitigation Programs.--Not later than the expiration of the 30-
day period beginning on the date of the enactment of this Act, the 
Director of the Federal Emergency Management Agency shall issue 
regulations necessary to implement the amendments made by sections 102, 
103, 104, and 105 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004 (118 Stat. 714 et seq.).
    (d) Report.--Not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act, the Director of the 
Federal Emergency Management Agency shall submit a report to the 
Congress describing the implementation of each provision of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public 
Law 108-264) and identifying each regulation, order, notice, and other 
material issued by the Director in implementing each such provision.

SEC. 6. MAXIMUM COVERAGE LIMITS.

    Subsection (b) of section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013(b)) is amended--
            (1) in paragraph (2), by striking ``$250,000'' and 
        inserting ``$335,500'';
            (2) in paragraph (3), by striking ``$100,000'' and 
        inserting ``$135,000''; and
            (3) in paragraph (4), by striking ``$500,000'' each place 
        such term appears and inserting ``$670,700''.

SEC. 7. COVERAGE FOR ADDITIONAL LIVING EXPENSES AND BUSINESS 
              INTERRUPTION.

    Subsection (b) of section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013), as amended by section 5 of this Act, is 
further amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new paragraph:
            ``(6) in the case of any residential property, each renewal 
        or new contract for flood insurance coverage shall provide not 
        less than $1,000 aggregate liability per dwelling unit for any 
        necessary increases in living expenses incurred by the insured 
        when losses from a flood make the residence unfit to live in, 
        which coverage shall be available only at chargeable rates that 
        are not less than the estimated premium rates for such coverage 
        determined in accordance with section 1307(a)(1);
            ``(7) in the case of any residential property, coverage for 
        additional living expenses described in paragraph (6) shall be 
        made available to every insured upon renewal and every 
        applicant in excess of the limits provided in paragraph (6) in 
        such amounts and at such rates as the Director shall establish, 
        except that such chargeable rates shall not be less than the 
        estimated premium rates for such coverage determined in 
        accordance with section 1307(a)(1); and
            ``(8) the Director shall make available, for purchase by 
        any policyholder of a policy for flood insurance coverage for a 
        commercial property, optional coverage for losses resulting 
        from any partial or total interruption of the policyholder's 
        business caused by damage to or loss of such property from a 
        flood, except that--
                    ``(A) for purposes of such coverage, losses shall 
                be determined based on the profits the covered business 
                would have earned, based on previous financial records, 
                had the flood not occurred; and
                    ``(B) such coverage shall be made available only at 
                chargeable rates that are not less than the estimated 
                premium rates for such coverage determined in 
                accordance with section 1307(a)(1).''.

SEC. 8. INCREASE IN BORROWING AUTHORITY.

    (a) Borrowing Authority.--The first sentence of subsection (a) of 
section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4016(a)), as amended by the National Flood Insurance Program Enhanced 
Borrowing Authority Act of 2005 (Public Law 109-65; 119 Stat. 1998), is 
amended by striking ``$3,500,000,000'' and inserting 
``$22,000,000,000''.
    (b) FEMA Report.--Not later than the expiration of the 6-month 
period beginning on the date of the enactment of this Act, the Director 
of the Federal Emergency Management Agency shall submit a report to the 
Congress setting forth a plan for repaying any amounts borrowed 
pursuant to increase in borrowing authority authorized under the 
amendments made by subsection (a).

SEC. 9. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, AND POLICY 
              LANGUAGE.

    Not later than the expiration of the 3-month period beginning on 
the date of the enactment of this Act, the Director of the Federal 
Emergency Management Agency shall--
            (1) issue regulations, and revise any materials made 
        available by such Agency, to clarify the applicability of 
        replacement cost coverage under the national flood insurance 
        program;
            (2) revise any regulations, forms, notices, guidance, and 
        publications relating to the full cost of repair or replacement 
        under the replacement cost coverage to more clearly describe 
        such coverage to flood insurance policyholders and information 
        to be provided by such policyholders relating to such coverage, 
        and to avoid providing misleading information to such 
        policyholders; and
            (3) revise the language in standard flood insurance 
        policies under such program regarding rating and coverage 
        descriptions in a manner that is consistent with language used 
        widely in other homeowners and property and casualty insurance 
        policies, including such language regarding classification of 
        buildings, basements, crawl spaces, detached garages, 
        enclosures below elevated buildings, and replacement costs.

SEC. 10. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE PROGRAM.

    Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4027) is amended--
            (1) in the section heading, by striking ``report to the 
        president'' and inserting ``reports'';
            (2) in subsection (a), by striking ``In General'' and 
        inserting ``Biennial Report to President''; and
            (3) by adding at the end the following new subsection:
    ``(c) Semiannual Reports to Congress on Financial Status.--Not 
later than June 30 and December 31 of each year, the Director shall 
submit a report to the Congress regarding the financial status of the 
national flood insurance program under this title. Each such report 
shall describe the financial status of the National Flood Insurance 
Fund and current and projected levels of claims, premium receipts, 
expenses, and borrowing under the program.''.
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