[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5114 Reported in House (RH)]

                                                 Union Calendar No. 282
111th CONGRESS
  2d Session
                                H. R. 5114

                          [Report No. 111-495]

 To extend the authorization for the national flood insurance program, 
     to identify priorities essential to reform and ongoing stable 
          functioning of the program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 22, 2010

Ms. Waters (for herself, Mr. Frank of Massachusetts, Mr. Kanjorski, Mr. 
   Costello, Ms. Matsui, Mr. Thompson of Mississippi, Mr. Patrick J. 
Murphy of Pennsylvania, Mrs. Capps, Mr. Cardoza, Mr. Hare, Mr. Al Green 
   of Texas, and Ms. Linda T. Sanchez of California) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

                              May 26, 2010

              Additional sponsors: Mr. Stark and Mr. Sires

                              May 26, 2010

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on April 
                               22, 2010]


_______________________________________________________________________

                                 A BILL


 
 To extend the authorization for the national flood insurance program, 
     to identify priorities essential to reform and ongoing stable 
          functioning of the 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 AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Flood Insurance 
Reform Priorities Act of 2010''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Extension of national flood insurance program.
Sec. 4. Maximum coverage limits.
Sec. 5. Phase-in of actuarial rates for nonresidential properties, 
                            certain pre-FIRM properties, and non-
                            primary residences.
Sec. 6. 5-year delay in effective date of mandatory purchase 
                            requirement for new flood hazard areas.
Sec. 7. 5-year phase-in of flood insurance rates for newly mapped 
                            areas.
Sec. 8. Increase in annual limitation on premium increases.
Sec. 9. Consideration of construction, reconstruction, and improvement 
                            of flood protection systems in 
                            determination of flood insurance rates.
Sec. 10. Treatment of certain flood protection projects.
Sec. 11. Notification to homeowners regarding mandatory purchase 
                            requirement applicability and rate phase-
                            ins.
Sec. 12. Coverage for additional living expenses and business 
                            interruption.
Sec. 13. Exception to waiting period for effective date of policies.
Sec. 14. Minimum deductibles for claims.
Sec. 15. Payment of premiums in installments for low-income 
                            policyholders.
Sec. 16. Enforcement.
Sec. 17. Notification to tenants of availability of contents insurance.
Sec. 18. Flood insurance outreach.
Sec. 19. Notice of availability of flood insurance and escrow in RESPA 
                            good faith estimate.
Sec. 20. Authorization of additional FEMA staff.
Sec. 21. Plan to verify maintenance of flood insurance on Mississippi 
                            and Louisiana properties receiving 
                            emergency supplemental funds.
Sec. 22. Flood insurance advocate.
Sec. 23. Eligibility of property demolition and rebuilding under flood 
                            mitigation assistance program.
Sec. 24. Study regarding mandatory purchase requirement for non-
                            federally related loans.
Sec. 25. Study of methods to increase flood insurance program 
                            participation by low-income families.
Sec. 26. Report on inclusion of building codes in floodplain management 
                            criteria.
Sec. 27. Study on repaying flood insurance debt.
Sec. 28. Study regarding impact of rate increases on pre-FIRM 
                            properties.
Sec. 29. Study of effects of Act.
Sec. 30. Rulemaking.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) since the enactment of National Flood Insurance Act of 
        1968, the national flood insurance program has been the primary 
        source of reliable, reasonably priced, flood insurance coverage 
        for millions of American homes and businesses;
            (2) today over 5,500,000 homes and businesses in the United 
        States rely on the national flood insurance program to provide 
        a degree of financial security;
            (3) although participation in the national flood insurance 
        program has, in the past, largely been limited to properties 
        required to participate in the program because of the program's 
        mandatory purchase requirement for properties in special flood 
        hazard areas with loans from federally regulated lenders, 
        recent annual and extraordinary flooding has resulted in the 
        program enjoying its highest voluntary participation since the 
        establishment of the mandatory flood insurance purchase 
        requirement;
            (4) several years of below-average flood claims losses and 
        increased voluntary participation in the national flood 
        insurance program have allowed the program to fully service the 
        debt incurred following Hurricanes Katrina and Rita and allowed 
        the program to pay $598,000,000 of the principal of that 
        outstanding debt;
            (5) though significant reforms are needed to further 
        improve the financial outlook of the national flood insurance 
        program, long-term and reliable authorization of the program is 
        an essential element to stabilizing the already fragile United 
        States housing market;
            (6) increased flooding in areas outside designated special 
        flood hazard areas prompted the Executive and the Congress in 
        2002 to begin calling for the national flood insurance program 
        to develop and disseminate revised, updated flood insurance 
        rate maps that reflect the real risk of flooding for properties 
        not previously identified as being located within a special 
        flood hazard area;
            (7) dissemination of accurate, up-to-date, flood-risk 
        information remains a primary goal of the national flood 
        insurance program and such information should be disseminated 
        as soon as such information is collected and available;
            (8) communities should be encouraged to make their 
        residents aware of updated flood-risk data while communities 
        are assessing and incorporating updated flood-risk data into 
        long-term community planning;
            (9) the maximum coverage limits for flood insurance 
        policies should be increased to reflect inflation and the 
        increased cost of housing; and
            (10) phasing out flood insurance premium subsidies 
        currently extended to vacation homes, second homes, and 
        commercial properties would result in significant average 
        annual savings to the national flood insurance program.
    (b) Purposes.--The purposes of this Act are--
            (1) to identify priorities essential to the reform and 
        ongoing stable functioning of the national flood insurance 
        program;
            (2) to increase incentives for homeowners and communities 
        to participate in the national flood insurance program and to 
        improve oversight to ensure better accountability of the 
        national flood insurance program and the Federal Emergency 
        Management Agency; and
            (3) to increase awareness of homeowners of flood risks and 
        improve the information regarding such risks provided to 
        homeowners.

SEC. 3. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

    (a) Program Extension.--Section 1319 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking 
``September 30, 2008'' and inserting ``September 30, 2015''.
    (b) Financing.--Section 1309(a) of such Act (42 U.S.C. 4016(a)) is 
amended by striking ``September 30, 2008'' and inserting ``September 
30, 2015''.
    (c) Extension of Pilot Program for Mitigation of Severe Repetitive 
Loss Properties.--Section 1361A of the National Flood Insurance Act of 
1968 (42 U.S.C. 4102a) is amended--
            (1) in subsection (k)(1), by striking ``2005, 2006, 2007, 
        2008, and 2009'' and inserting ``2011, 2012, 2013, 2014, and 
        2015''; and
            (2) by striking subsection (l).

SEC. 4. 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 ``$335,000'';
            (2) in paragraph (3), by striking ``$100,000'' and 
        inserting ``$135,000''; and
            (3) in paragraph (4)--
                    (A) by striking ``$500,000'' each place such term 
                appears and inserting ``$670,000''; and
                    (B) by inserting before ``; and'' the following: 
                ``; except that, in the case of any nonresidential 
                property that is a structure containing more than one 
                dwelling unit that is made available for occupancy by 
                rental (notwithstanding the provisions applicable to 
                the determination of the risk premium rate for such 
                property), additional flood insurance in excess of such 
                limits shall be made available to every insured upon 
                renewal and every applicant for insurance so as to 
                enable any such insured or applicant to receive 
                coverage up to a total amount that is equal to the 
                product of the total number of such rental dwelling 
                units in such property and the maximum coverage limit 
                per dwelling unit specified in paragraph (2); except 
                that in the case of any such multi-unit, nonresidential 
                rental property that is a pre-FIRM structure (as such 
                term is defined in section 578(b) of the National Flood 
                Insurance Reform Act of 1994 (42 U.S.C. 4014 note)), 
                the risk premium rate for the first $500,000 of 
                coverage shall be determined in accordance with section 
                1307(a)(2) and the risk premium rate for any coverage 
                in excess of such amount shall be determined in 
                accordance with section 1307(a)(1)''.

SEC. 5. PHASE-IN OF ACTUARIAL RATES FOR NONRESIDENTIAL PROPERTIES, 
              CERTAIN PRE-FIRM PROPERTIES, AND NON-PRIMARY RESIDENCES.

    (a) In General.--Section 1308(c) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4015(c)) is amended--
            (1) by redesignating paragraph (2) as paragraph (5); and
            (2) by inserting after paragraph (1) the following new 
        paragraphs:
            ``(2) Nonresidential properties.--Any nonresidential 
        property, which term shall not include any multifamily rental 
        property that consists of four or more dwelling units.
            ``(3) Non-primary residences.--Any residential property 
        that is not the primary residence of any individual, including 
        the owner of the property or any other individual who resides 
        in the property as a tenant.
            ``(4) Recently purchased pre-firm single-family properties 
        used as principal residencies.--Any single family property 
        that--
                    ``(A) has been constructed or substantially 
                improved and for which such construction or improvement 
                was started, as determined by the Director, before 
                December 31, 1974, or before 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; and
                    ``(B) is purchased after the date of enactment of 
                the Flood Insurance Reform Priorities Act of 2010.''.
    (b) Technical Amendments.--Section 1308 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4015) is amended--
            (1) in subsection (c)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``the limitations provided under paragraphs 
                (1) and (2)'' and inserting ``subsection (e)''; and
                    (B) in paragraph (1), by striking ``, except'' and 
                all that follows through ``subsection (e)''; and
            (2) in subsection (e), by striking ``paragraph (2) or (3)'' 
        and inserting ``paragraph (5)''.
    (c) Effective Date and Transition.--
            (1) Effective date.--The amendments made by subsections (a) 
        and (b) shall apply beginning upon the expiration of the 3-year 
        period that begins on the date of the enactment of this Act, 
        except as provided in paragraph (2) of this subsection.
            (2) Transition for properties covered by flood insurance 
        upon effective date.--
                    (A) Increase of rates over time.--In the case of 
                any property described in paragraph (2), (3), or (4) of 
                section 1308(c) of the National Flood Insurance Act of 
                1968, as amended by subsection (a) of this section, 
                that, as of the effective date under paragraph (1) of 
                this subsection, is covered under a policy for flood 
                insurance made available under the national flood 
                insurance program for which the chargeable premium 
                rates are less than the applicable estimated risk 
                premium rate under section 1307(a)(1) for the area in 
                which the property is located, the Director of the 
                Federal Emergency Management Agency shall increase the 
                chargeable premium rates for such property over time to 
                such applicable estimated risk premium rate under 
                section 1307(a)(1).
                    (B) Annual increase.--Such increase shall be made 
                by increasing the chargeable premium rates for the 
                property (after application of any increase in the 
                premium rates otherwise applicable to such property), 
                once during the 12-month period that begins upon the 
                effective date under paragraph (1) of this subsection 
                and once every 12 months thereafter until such increase 
                is accomplished, by 20 percent (or such lesser amount 
                as may be necessary so that the chargeable rate does 
                not exceed such applicable estimated risk premium rate 
                or to comply with subparagraph (C)).
                    (C) Properties subject to phase-in and annual 
                increases.--In the case of any pre-FIRM property (as 
                such term is defined in section 578(b) of the National 
                Flood Insurance Reform Act of 1974), the aggregate 
                increase, during any 12-month period, in the chargeable 
                premium rate for the property that is attributable to 
                this paragraph or to an increase described in section 
                1308(e) of the National Flood Insurance Act of 1968 may 
                not exceed 20 percent.
                    (D) Full actuarial rates.--The provisions of 
                paragraphs (2), (3), and (4) of such section 1308(c) 
                shall apply to such a property upon the accomplishment 
                of the increase under this paragraph and thereafter.

SEC. 6. 5-YEAR DELAY IN EFFECTIVE DATE OF MANDATORY PURCHASE 
              REQUIREMENT FOR NEW FLOOD HAZARD AREAS.

    (a) In General.--Section 102 of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4012a) is amended by adding at the end the following 
new subsection:
    ``(i) Delayed Effective Date of Mandatory Purchase Requirement for 
New Flood Hazard Areas.--
            ``(1) In general.--In the case of any area that was not 
        previously designated as an area having special flood hazards 
        and that, pursuant to any issuance, revision, updating, or 
        other change in flood insurance maps that takes effect on or 
        after September 1, 2008, becomes designated as an area having 
        special flood hazards, if each State and local government 
        having jurisdiction over any portion of the geographic area has 
        complied with paragraph (2), such designation shall not take 
        effect for purposes of subsection (a), (b), or (e) of this 
        section, or section 202(a) of this Act, until the expiration of 
        the 5-year period beginning upon the date that such maps, as 
        issued, revised, update, or otherwise changed, become 
        effective.
            ``(2) Notice requirements.--A State or local government 
        shall be considered to have complied with this paragraph with 
        respect to any geographic area described in paragraph (1) only 
        if the State or local government has, before the effective date 
        of the issued, revised, updated, or changed maps, and in 
        accordance with such standards as shall be established by the 
        Director--
                    ``(A) developed an evacuation plan to be 
                implemented in the event of flooding in such portion of 
                the geographic area; and
                    ``(B) developed and implemented an outreach and 
                communication plan to advise occupants in such portion 
                of the geographic area of potential flood risks, the 
                opportunity to purchase flood insurance, and the 
                consequences of failure to purchase flood insurance.
            ``(3) Rule of construction.--Nothing in paragraph (1) may 
        be construed to affect the applicability of a designation of 
        any area as an area having special flood hazards for purposes 
        of the availability of flood insurance coverage, criteria for 
        land management and use, notification of flood hazards, 
        eligibility for mitigation assistance, or any other purpose or 
        provision not specifically referred to in paragraph (1).''.
    (b) Conforming Amendment.--The second sentence of subsection (h) of 
section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101(h)) is amended by striking ``Such'' and inserting ``Except for 
notice regarding a change described in section 102(i)(1) of the Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4012a(i)(1)), such''.
    (c) No Refunds.--Nothing in this section or the amendments made by 
this section may be construed to authorize or require any payment or 
refund for flood insurance coverage purchased for any property that 
covered any period during which such coverage is not required for the 
property pursuant to the applicability of the amendment made by 
subsection (a).

SEC. 7. 5-YEAR PHASE-IN OF FLOOD INSURANCE RATES FOR NEWLY MAPPED 
              AREAS.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4015), as amended by the preceding provisions of this Act, is further 
amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by inserting ``or notice'' after ``prescribe by 
        regulation'';
            (2) in subsection (c), by inserting ``and subsection (g)'' 
        before the first comma; and
            (3) by adding at the end the following new subsection:
    ``(g) 5-Year Phase-In of Flood Insurance Rates for Newly Mapped 
Areas.--Notwithstanding any other provision of law relating to 
chargeable risk premium rates for flood insurance coverage under this 
title, in the case of any area that was not previously designated as an 
area having special flood hazards and that, pursuant to any issuance, 
revision, updating, or other change in flood insurance maps, becomes 
designated as such an area, during the 5-year period that begins upon 
the expiration of the period referred to in section 102(i)(1) of the 
Flood Disaster Protection Act of 1973 with respect to such area, the 
chargeable premium rate for flood insurance under this title with 
respect to any property that is located within such area shall be--
            ``(1) for the first year of such 5-year period, 20 percent 
        of the chargeable risk premium rate otherwise applicable under 
        this title to the property;
            ``(2) for the second year of such 5-year period, 40 percent 
        of the chargeable risk premium rate otherwise applicable under 
        this title to the property;
            ``(3) for the third year of such 5-year period, 60 percent 
        of the chargeable risk premium rate otherwise applicable under 
        this title to the property;
            ``(4) for the fourth year of such 5-year period, 80 percent 
        of the chargeable risk premium rate otherwise applicable under 
        this title to the property; and
            ``(5) for the fifth year of such 5-year period, 100 percent 
        of the chargeable risk premium rate otherwise applicable under 
        this title to the property.''.

SEC. 8. INCREASE IN ANNUAL LIMITATION ON PREMIUM INCREASES.

    Section 1308(e) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4015(e)) is amended by striking ``10 percent'' and inserting 
``20 percent''.

SEC. 9. CONSIDERATION OF CONSTRUCTION, RECONSTRUCTION, AND IMPROVEMENT 
              OF FLOOD PROTECTION SYSTEMS IN DETERMINATION OF FLOOD 
              INSURANCE RATES.

    (a) In General.--Section 1307 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4014) is amended--
            (1) in subsection (e)--
                    (A) in the first sentence, by striking 
                ``construction of a flood protection system'' and 
                inserting ``construction, reconstruction, or 
                improvement of a flood protection system (without 
                respect to the level of Federal investment or 
                participation)''; and
                    (B) in the second sentence--
                            (i) by striking ``construction of a flood 
                        protection system'' and inserting 
                        ``construction, reconstruction, or improvement 
                        of a flood protection system''; and
                            (ii) by inserting ``based on the present 
                        value of the completed system'' after ``has 
                        been expended''; and
            (2) in subsection (f)--
                    (A) in the first sentence in the matter preceding 
                paragraph (1), by inserting ``(without respect to the 
                level of Federal investment or participation)'' before 
                the period at the end;
                    (B) in the third sentence in the matter preceding 
                paragraph (1), by inserting ``, whether coastal or 
                riverine,'' after ``special flood hazard''; and
                    (C) in paragraph (1), by striking ``a Federal 
                agency in consultation with the local project sponsor'' 
                and inserting ``the entity or entities that own, 
                operate, maintain, or repair such system''.
    (b) Regulations.--Not later than 90 days after the date of the 
enactment of this Act, the Administrator of the Federal Emergency 
Management Agency shall promulgate regulations to carry out the 
amendments made by subsection (a). Section 5 may not be construed to 
annul, alter, affect, authorize any waiver of, or establish any 
exception to, the requirement under the preceding sentence.
    (c) Implementation.--The Administrator of the Federal Emergency 
Management Agency shall implement this section and the amendments made 
by this section in a manner that will not materially weaken the 
financial position of the national flood insurance program or increase 
the risk of financial liability to Federal taxpayers.

SEC. 10. TREATMENT OF CERTAIN FLOOD PROTECTION PROJECTS.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4015), as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new subsection:
    ``(h) Treatment of Certain Flood Protection Projects.--
            ``(1) Inapplicability of mandatory purchase requirement; 
        premium rates.--Notwithstanding any other provision of law, 
        upon full completion, as designed, of a flood protection system 
        that was intended to provide flood protection with respect to a 
        covered area, such covered area--
                    ``(A) shall not be considered to be an area having 
                special flood hazards for purposes of this Act or 
                subsections (a), (b), or (e) of section 102, or section 
                202(a) of the Flood Disaster Protection Act of 1973; 
                and
                    ``(B) shall be eligible for flood insurance under 
                this Act, if and to the extent that such area is 
                eligible for such insurance under the other provisions 
                of this Act, at premium rates not exceeding those that 
                would be applicable under this section if the flood 
                protection system referred to in paragraph (2) for such 
                area had been completed and accredited as providing 
                protection from floods at the level that the system was 
                designed to provide (before construction, 
                reconstruction, or improvement of the system, as 
                applicable, began).
        The flood insurance rate maps shall indicate, for each covered 
        area, the status of the area under subparagraphs (A) and (B).
            ``(2) Covered area.--For purposes of this subsection, a 
        covered area is an area that was intended to be protected by a 
        flood protection system--
                    ``(A)(i) for which, as of April 15, 2010--
                            ``(I) construction, reconstruction, or 
                        improvement has not been completed;
                            ``(II) adequate progress, within the 
                        meaning of section 1307(e), has been made on 
                        such construction, reconstruction, or 
                        improvement; and
                            ``(III) is in an area having special flood 
                        hazards; or
                    ``(ii) for which, as of such date--
                            ``(I) construction, reconstruction, or 
                        improvement has been completed;
                            ``(II) a determination regarding 
                        accreditation has not been made; and
                            ``(III) is in an area having special flood 
                        hazards;
                    ``(B) that was designed to provide protection for 
                at least the 100-year frequency flood; and
                    ``(C) that has been determined, pursuant to 
                waterflow data or other scientific information of a 
                Federal agency obtained after, or that has changed 
                since, commencement of construction, reconstruction, or 
                improvement, will not provide protection from floods at 
                the level referred to in subparagraph (B).''.

SEC. 11. NOTIFICATION TO HOMEOWNERS REGARDING MANDATORY PURCHASE 
              REQUIREMENT APPLICABILITY AND RATE PHASE-INS.

    Section 201 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4105) is amended by adding at the end the following new subsection:
    ``(f) Annual Notification.--The Director, in consultation with 
affected communities, shall establish and carry out a plan to notify 
residents of areas having special flood hazards, on an annual basis--
            ``(1) that they reside in such an area;
            ``(2) of the geographical boundaries of such area;
            ``(3) of whether section 1308(h) of the National Flood 
        Insurance Act of 1968 applies to properties within such area; 
        and
            ``(4) of the provisions of section 102 requiring purchase 
        of flood insurance coverage for properties located in such an 
        area, including the date on which such provisions apply with 
        respect to such area, taking into consideration section 102(i); 
        and
            ``(5) of a general estimate of what similar homeowners in 
        similar areas typically pay for flood insurance coverage, 
        taking into consideration section 1308(g) of the National Flood 
        Insurance Act of 1968;''.

SEC. 12. 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) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5)--
                    (A) by inserting ``pursuant to paragraph (2), (3), 
                or (4)'' after ``any flood insurance coverage''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(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, optional 
        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) in the case of any commercial property or other 
        residential property, including multifamily rental property, 
        optional coverage for losses resulting from any partial or 
        total interruption of the insured's business caused by damage 
        to, or loss of, such property from a flood shall be made 
        available to every insured upon renewal and every applicant, 
        except that--
                    ``(A) the Director may provide such coverage under 
                such terms, conditions, and requirements as the 
                Director considers appropriate to meet the needs of 
                small businesses while complying with the requirement 
                under subparagraph (C); and
                    ``(B) any 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. 13. EXCEPTION TO WAITING PERIOD FOR EFFECTIVE DATE OF POLICIES.

    Section 1306(c)(2)(A) of the National Flood Insurance Act of 1968 
(42 U.S.C. 4013(c)(2)(A)) is amended by inserting before the semicolon 
the following: ``or is in connection with the purchase or other 
transfer of the property for which the coverage is provided (regardless 
of whether a loan is involved in the purchase or transfer transaction), 
but only when such initial purchase of coverage is made not later 30 
days after such making, increasing, extension, or renewal of the loan 
or not later than 30 days after such purchase or other transfer of the 
property, as applicable''.

SEC. 14. MINIMUM DEDUCTIBLES FOR CLAIMS.

    Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4019) is amended--
            (1) by striking ``The Director is'' and inserting the 
        following: ``(a) In General.--The Director is''; and
            (2) by adding at the end the following:
    ``(b) Minimum Annual Deductibles.--
            ``(1) Pre-FIRM properties.--For any structure that is 
        covered by flood insurance under this title, and on which 
        construction or substantial improvement occurred on or before 
        December 31, 1974, or before the effective date of an initial 
        flood insurance rate map published by the Director under 
        section 1360 for the area in which such structure is located, 
        the minimum annual deductible for damage to or loss of such 
        structure shall be--
                    ``(A) $1,500, if the flood insurance coverage for 
                such structure covers loss of, or physical damage to, 
                such structure in an amount equal to or less than 
                $100,000; and
                    ``(B) $2,000, if the flood insurance coverage for 
                such structure covers loss of, or physical damage to, 
                such structure in an amount greater than $100,000.
            ``(2) Post-FIRM properties.--For any structure that is 
        covered by flood insurance under this title, and on which 
        construction or substantial improvement occurred after December 
        31, 1974, or after the effective date of an initial flood 
        insurance rate map published by the Director under section 1360 
        for the area in which such structure is located, the minimum 
        annual deductible for damage to or loss of such structure shall 
        be--
                    ``(A) $750, if the flood insurance coverage for 
                such structure covers loss of, or physical damage to, 
                such structure in an amount equal to or less than 
                $100,000; and
                    ``(B) $1,000, if the flood insurance coverage for 
                such structure covers loss of, or physical damage to, 
                such structure in an amount greater than $100,000.''.

SEC. 15. PAYMENT OF PREMIUMS IN INSTALLMENTS FOR LOW-INCOME 
              POLICYHOLDERS.

    Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4013) is amended by adding at the end the following new subsection:
    ``(d) Payment of Premiums in Installments for Low-income 
Policyholders.--In addition to any other terms and conditions under 
subsection (a), such regulations shall provide that, in the case of any 
residential property that is owned by a family whose income level is at 
or below 200 percent of the poverty line (as defined by the Office of 
Management and Budget, and revised annually in accordance with section 
673 of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902)) 
applicable to the size of such family, or a family that has no adult 
member who is employed, premiums for flood insurance coverage for such 
property may be paid in monthly installments.''.

SEC. 16. ENFORCEMENT.

    Section 102(f) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a(f)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A)(iii), by striking ``or'' at 
                the end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in connection with the making, increasing, 
                extending, servicing, or renewing of any loan, 
                requiring the purchase of flood insurance coverage 
                under the National Flood Insurance Act of 1968, or 
                purchasing such coverage pursuant to subsection (e)(2), 
                in an amount in excess of the minimum amount required 
                under subsections (a) and (b) of this section.'';
            (2) in paragraph (5)--
                    (A) in the first sentence, by striking ``$350'' and 
                inserting ``$2,000''; and
                    (B) in the last sentence, by striking ``$100,000'' 
                and inserting ``$1,000,000; except that such limitation 
                shall not apply to a regulated lending institution or 
                enterprise for a calendar year if, in any three (or 
                more) of the five calendar years immediately preceding 
                such calendar year, the total amount of penalties 
                assessed under this subsection against such lending 
                institution or enterprise was $1,000,000''; and
            (3) in paragraph (6), by adding after the period at the end 
        the following: ``No penalty may be imposed under this 
        subsection on a regulated lending institution or enterprise 
        that has made a good faith effort to comply with the 
        requirements of the provisions referred to in paragraph (2) or 
        for any non-material violation of such requirements.''.

SEC. 17. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS INSURANCE.

    The National Flood Insurance Act of 1968 is amended by inserting 
after section 1308 (42 U.S.C. 4015) the following new section:

``SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS 
              INSURANCE.

    ``(a) In General.--The Director shall, upon entering into a 
contract for flood insurance coverage under this title for any 
property--
            ``(1) provide to the insured sufficient copies of the 
        notice developed pursuant to subsection (b); and
            ``(2) require the insured to provide a copy of the notice, 
        or otherwise provide notification of the information under 
        subsection (b) in the manner that the manager or landlord deems 
        most appropriate, to each such tenant and to each new tenant 
        upon commencement of such a tenancy.
    ``(b) Notice.--Notice to a tenant of a property in accordance with 
this subsection is written notice that clearly informs a tenant--
            ``(1) whether the property is located in an area having 
        special flood hazards;
            ``(2) that flood insurance coverage is available under the 
        national flood insurance program under this title for contents 
        of the unit or structure leased by the tenant;
            ``(3) of the maximum amount of such coverage for contents 
        available under this title at that time; and
            ``(4) of where to obtain information regarding how to 
        obtain such coverage, including a telephone number, mailing 
        address, and Internet site of the Director where such 
        information is available.''.

SEC. 18. FLOOD INSURANCE OUTREACH.

    Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 
4011 et seq.), as amended by the preceding provisions of this Act, is 
further amended by adding at the end the following new section:

``SEC. 1326. GRANTS FOR OUTREACH TO PROPERTY OWNERS AND RENTERS.

    ``(a) In General.--The Director may, to the extent amounts are made 
available pursuant to subsection (h), make grants to local governmental 
agencies responsible for floodplain management activities (including 
such agencies of Indians tribes, as such term is defined in section 4 
of the Native American Housing Assistance and Self-Determination Act of 
1996 (25 U.S.C. 4103)) in communities that participate in the national 
flood insurance program under this title, for use by such agencies to 
carry out outreach activities to encourage and facilitate the purchase 
of flood insurance protection under this Act by owners and renters of 
properties in such communities and to promote educational activities 
that increase awareness of flood risk reduction.
    ``(b) Outreach Activities.--Amounts from a grant under this section 
shall be used only for activities designed to--
            ``(1) identify owners and renters of properties in 
        communities that participate in the national flood insurance 
        program, including owners of residential and commercial 
        properties;
            ``(2) notify such owners and renters when their properties 
        become included in, or when they are excluded from, an area 
        having special flood hazards and the effect of such inclusion 
        or exclusion on the applicability of the mandatory flood 
        insurance purchase requirement under section 102 of the Flood 
        Disaster Protection Act of 1973 (42 U.S.C. 4012a) to such 
        properties;
            ``(3) educate such owners and renters regarding the flood 
        risk and reduction of this risk in their community, including 
        the continued flood risks to areas that are no longer subject 
        to the flood insurance mandatory purchase requirement;
            ``(4) educate such owners and renters regarding the 
        benefits and costs of maintaining or acquiring flood insurance, 
        including, where applicable, lower-cost preferred risk policies 
        under this title for such properties and the contents of such 
        properties; and
            ``(5) encouraging such owners and renters to maintain or 
        acquire such coverage.
    ``(c) Cost Sharing Requirement.--
            ``(1) In general.--In any fiscal year, the Director may not 
        provide a grant under this section to a local governmental 
        agency in an amount exceeding 3 times the amount that the 
        agency certifies, as the Director shall require, that the 
        agency will contribute from non-Federal funds to be used with 
        grant amounts only for carrying out activities described in 
        subsection (b).
            ``(2) Non-federal funds.--For purposes of this subsection, 
        the term `non-Federal funds' includes State or local government 
        agency amounts, in-kind contributions, any salary paid to staff 
        to carry out the eligible activities of the grant recipient, 
        the value of the time and services contributed by volunteers to 
        carry out such services (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.
    ``(d) Administrative Cost Limitation.--Notwithstanding subsection 
(b), the Director may use not more than 5 percent of amounts made 
available under subsection (g) to cover salaries, expenses, and other 
administrative costs incurred by the Director in making grants and 
provide assistance under this section.
    ``(e) Application and Selection.--
            ``(1) In general.--The Director shall provide for local 
        governmental agencies described in subsection (a) to submit 
        applications for grants under this section and for competitive 
        selection, based on criteria established by the Director, of 
        agencies submitting such applications to receive such grants.
            ``(2) Selection considerations.--In selecting applications 
        of local government agencies to receive grants under paragraph 
        (1), the Director shall consider--
                    ``(A) the existence of a cooperative technical 
                partner agreement between the local governmental agency 
                and the Federal Emergency Management Agency;
                    ``(B) the history of flood losses in the relevant 
                area that have occurred to properties, both inside and 
                outside the special flood hazards zones, which are not 
                covered by flood insurance coverage;
                    ``(C) the estimated percentage of high-risk 
                properties located in the relevant area that are not 
                covered by flood insurance;
                    ``(D) demonstrated success of the local 
                governmental agency in generating voluntary purchase of 
                flood insurance; and
                    ``(E) demonstrated technical capacity of the local 
                governmental agency for outreach to individual property 
                owners.
    ``(f) Direct Outreach by FEMA.--In each fiscal year that amounts 
for grants are made available pursuant to subsection (h), the Director 
may use not more than 50 percent of such amounts to carry out, and to 
enter into contracts with other entities to carry out, activities 
described in subsection (b) in areas that the Director determines have 
the most immediate need for such activities.
    ``(g) Reporting.--Each local government agency that receives a 
grant under this section, and each entity that receives amounts 
pursuant to subsection (f), shall submit a report to the Director, not 
later than 12 months after such amounts are first received, which shall 
include such information as the Director considers appropriate to 
describe the activities conducted using such amounts and the effect of 
such activities on the retention or acquisition of flood insurance 
coverage.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated for grants under this section $50,000,000 for each of 
fiscal years 2011 through 2015.''.

SEC. 19. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW IN RESPA 
              GOOD FAITH ESTIMATE.

    Subsection (c) of section 5 of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by adding at the 
end the following new sentence: ``Each such good faith estimate shall 
include the following conspicuous statements and information: (1) that 
flood insurance coverage for residential real estate is generally 
available under the national flood insurance program whether or not the 
real estate is located in an area having special flood hazards and 
that, to obtain such coverage, a home owner or purchaser should contact 
the national flood insurance program; (2) a telephone number and a 
location on the Internet by which a home owner or purchaser can contact 
the national flood insurance program; and (3) that the escrowing of 
flood insurance payments is required for many loans under section 
102(d) of the Flood Disaster Protection Act of 1973, and may be a 
convenient and available option with respect to other loans.''.

SEC. 20. AUTHORIZATION OF ADDITIONAL FEMA STAFF.

    Notwithstanding any other provision of law, the Director of the 
Federal Emergency Management Agency may employ such additional staff as 
may be necessary to carry out all of the responsibilities of the 
Director pursuant to this Act and the amendments made by this Act. 
There are authorized to be appropriated to Director such sums as may be 
necessary for costs of employing such additional staff.

SEC. 21. PLAN TO VERIFY MAINTENANCE OF FLOOD INSURANCE ON MISSISSIPPI 
              AND LOUISIANA PROPERTIES RECEIVING EMERGENCY SUPPLEMENTAL 
              FUNDS.

    The Secretary of Housing and Urban Development and the Director of 
the Federal Emergency Management Agency shall jointly develop and 
implement a plan to verify that persons receiving funds under the 
Homeowner Grant Assistance Program of the State of Mississippi or the 
Road Home Program of the State of Louisiana from amounts allocated to 
the State of Mississippi or the State of Louisiana, respectively, from 
the Community development fund under the Emergency Supplemental 
Appropriations Act to Address Hurricanes in the Gulf of Mexico and 
Pandemic Influenza, 2006 (Public Law 109-148) are maintaining flood 
insurance on the property for which such persons receive such funds as 
required by each such Program.

SEC. 22. FLOOD INSURANCE ADVOCATE.

    Chapter II of the National Flood Insurance Act of 1968 is amended 
by inserting after section 1330 (42 U.S.C. 4041) the following new 
section:

``SEC. 1330A. OFFICE OF THE FLOOD INSURANCE ADVOCATE.

    ``(a) Establishment of Position.--
            ``(1) In general.--There shall be in the Federal Emergency 
        Management Agency an Office of the Flood Insurance Advocate 
        which shall be headed by the National Flood Insurance Advocate. 
        The National Flood Insurance Advocate shall report directly to 
        the Director and shall, to the extent amounts are provided 
        pursuant to subsection (f), be compensated at the same rate as 
        the highest rate of basic pay established for the Senior 
        Executive Service under section 5382 of title 5, United States 
        Code, or, if the Director so determines, at a rate fixed under 
        section 9503 of such title.
            ``(2) Appointment.--The National Flood Insurance Advocate 
        shall be appointed by the Director, and without regard to the 
        provisions of title 5, United States Code, relating to 
        appointments in the competitive service or the Senior Executive 
        Service.
            ``(3) Qualifications.--An individual appointed under 
        paragraph (2) shall have a background in customer service as 
        well as insurance.
            ``(4) Staff.--To the extent amounts are provided pursuant 
        to subsection (f), the National Flood Insurance Advocate may 
        employ such personnel as may be necessary to carry out the 
        duties of the Office.
    ``(b) Functions of Office.--
            ``(1) In general.--It shall be the function of the Office 
        of the Flood Insurance Advocate to--
                    ``(A) assist insureds under the national flood 
                insurance program in resolving problems with the 
                Federal Emergency Management Agency relating to such 
                program;
                    ``(B) identify areas in which such insureds have 
                problems in dealings with the Agency relating to such 
                program;
                    ``(C) identify potential legislative, 
                administrative, or regulatory changes which may be 
                appropriate to mitigate such problems; and
                    ``(D) assist communities and homeowners with 
                interpreting, implementing, and appealing floodplain 
                maps and floodplain map determinations.
            ``(2) Annual reports.--
                    ``(A) Activities.--Not later than December 31 of 
                each calendar year, the National Flood Insurance 
                Advocate shall report to the Committee on Financial 
                Services of the House of Representatives and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate on the activities of the Office of the Flood 
                Insurance Advocate during the fiscal year ending during 
                such calendar year. Any such report shall contain full 
                and substantive analysis, in addition to statistical 
                information, and shall--
                            ``(i) identify the initiatives the Office 
                        of the Flood Insurance Advocate has taken on 
                        improving services for insureds under the 
                        national flood insurance program and 
                        responsiveness of the Federal Emergency 
                        Management Agency with respect to such program;
                            ``(ii) identify areas of the law or 
                        regulations relating to the national flood 
                        insurance program that impose significant 
                        compliance burdens on such insureds or the 
                        Federal Emergency Management Agency, including 
                        specific recommendations for remedying these 
                        problems; and
                            ``(iii) include such other information as 
                        the National Flood Insurance Advocate may deem 
                        advisable.
                    ``(B) Direct submission of report.--Each report 
                required under this paragraph shall be provided 
                directly to the committees identified in subparagraph 
                (A) without any prior review or comment from the 
                Director, the Secretary of Homeland Security, or any 
                other officer or employee of the Federal Emergency 
                Management Agency or the Department of Homeland 
                Security, or the Office of Management and Budget.
    ``(c) Funding.--Pursuant to section 1310(a)(4), the Director may 
use amounts from the National Flood Insurance Fund to fund the 
activities of the Office of the Flood Advocate in each of fiscal years 
2011 through 2016, except that the amount so used in each such fiscal 
year may not exceed $5,000,000 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.''.

SEC. 23. ELIGIBILITY OF PROPERTY DEMOLITION AND REBUILDING UNDER FLOOD 
              MITIGATION ASSISTANCE PROGRAM.

    Section 1366(e)(5)(B) of the National Flood Insurance Act of 1968 
(42 U.S.C. 4104c(e)(5)(B)) is amended by striking ``or floodproofing'' 
and inserting ``floodproofing, or demolition and rebuilding''.

SEC. 24. STUDY REGARDING MANDATORY PURCHASE REQUIREMENT FOR NON-
              FEDERALLY RELATED LOANS.

    (a) In General.--The Comptroller General shall conduct a study to 
assess the impact, effectiveness, and feasibility of, and basis under 
the Constitution of the United States for, amending the provisions of 
the Flood Disaster Protection Act of 1973 regarding the properties that 
are subject to the mandatory flood insurance coverage purchase 
requirements under such Act to extend such requirements to any property 
that is located in any area having special flood hazards and which 
secures the repayment of a loan that is not described in paragraph (1), 
(2), or (3) of section 102(b) of such Act, and shall determine how best 
to administer and enforce such a requirement, taking into consideration 
other insurance purchase requirements under Federal and State law.
    (b) Report.--The Comptroller General shall submit a report to the 
Congress regarding the results and conclusions of the study under 
subsection (a) not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act.

SEC. 25. STUDY OF METHODS TO INCREASE FLOOD INSURANCE PROGRAM 
              PARTICIPATION BY LOW-INCOME FAMILIES.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study to identify and analyze potential methods, practices, 
and incentives that would increase the extent to which low-income 
families (as such term is defined in section 3(b) of the United States 
Housing Act of 1937 (42 U.S.C. 1437a(b))) that own residential 
properties located within areas having special flood hazards purchase 
flood insurance coverage for such properties under the national flood 
insurance program. In conducting the study, the Comptroller General 
shall analyze the effectiveness and costs of the various methods, 
practices, and incentives identified, including their effects on the 
national flood insurance program.
    (b) Report.--The Comptroller General shall submit to the Congress a 
report setting forth the conclusions of the study under this section 
not later than 12 months after the date of the enactment of this Act.

SEC. 26. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN MANAGEMENT 
              CRITERIA.

    Not later than the expiration of the 6-month period beginning on 
the date of the enactment of this Act, the Administrator of the Federal 
Emergency Management Agency shall conduct a study and submit a report 
to the Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the Senate 
regarding the impact, effectiveness, and feasibility of amending 
section 1361 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4102) to include widely used and nationally recognized building codes 
as part of the floodplain management criteria developed under such 
section, and shall determine--
            (1) the regulatory, financial, and economic impacts of such 
        a building code requirement on homeowners, States and local 
        communities, local land use policies, and the Federal Emergency 
        Management Agency;
            (2) the resources required of State and local communities 
        to administer and enforce such a building code requirement;
            (3) the effectiveness of such a building code requirement 
        in reducing flood-related damage to buildings and contents;
            (4) the impact of such a building code requirement on the 
        actuarial soundness of the National Flood Insurance Program;
            (5) the effectiveness of nationally recognized codes in 
        allowing innovative materials and systems for flood-resistant 
        construction; and
            (6) the feasibility and effectiveness of providing an 
        incentive in lower premium rates for flood insurance coverage 
        under such Act for structures meeting whichever of such widely 
        used and nationally recognized building code or any applicable 
        local building code provides greater protection from flood 
        damage.

SEC. 27. STUDY ON REPAYING FLOOD INSURANCE DEBT.

    Not later than the expiration of the 6-month period beginning on 
the date of the enactment of this Act, the Administrator of the Federal 
Emergency Management Agency shall submit a report to the Congress 
setting forth a plan for repaying within 10 years all amounts, 
including any amounts previously borrowed but not yet repaid, owed 
pursuant to clause (2) of subsection (a) of section 1309 of the 
National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)(2)).

SEC. 28. STUDY REGARDING IMPACT OF RATE INCREASES ON PRE-FIRM 
              PROPERTIES.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study to assess the impacts of implementing provisions 
regarding pre-FIRM properties (as such term is defined in section 
578(b) of the National Flood Insurance Reform Act of 1994 (42 U.S.C. 
4014)), including the impact on the program participation rate among 
owners, renters, and tenants of non-primary residences or commercial 
nonresidential properties. In conducting the study, the Comptroller 
General shall analyze the cost effectiveness and effect on local 
government tax base of various options, including an option of 
implementing such provisions on the severe repetitive loss properties 
only.
    (b) Report.--The Comptroller General shall submit a report to 
Congress regarding the results and conclusions of the study under 
subsection (a) not later than the expiration of the 9-month period 
beginning on the date of enactment of this Act.

SEC. 29. STUDY OF EFFECTS OF ACT.

    (a) Study.--The Administrator of the Federal Emergency Management 
Agency shall conduct a study to identify and assess the impacts, 
including short-term and long-term impacts, of this Act and the 
amendments made by this Act on the financial soundness of the national 
flood insurance program.
    (b) Report.--Not later than 12 months after the date of the 
enactment of this Act, the Administrator shall submit a report to the 
Congress setting forth the results and conclusions of study under 
subsection (a), which shall include specific recommendations for 
actions to mitigate against any negative financial impacts resulting 
from this Act and the amendments made by this Act that could increase 
the debt of the national flood insurance program.

SEC. 30. RULEMAKING.

    (a) Interim Final Rule.--The Administrator of the Federal Emergency 
Management Agency shall issue an interim final rule as a temporary 
regulation implementing this Act and the amendments made by this Act as 
soon as practicable after the date of the enactment of this Act, 
without regard to the provisions of chapter 5 of title 5, United States 
Code. All regulations prescribed under the authority of this subsection 
that are not earlier superseded by final regulations shall expire not 
later than one year after the date of the enactment of this Act.
    (b) Initiation of Rulemaking.--The Administrator of the Federal 
Emergency Management Agency may initiate a rulemaking to implement this 
Act and the amendments made by this Act as soon as practicable after 
the date of the enactment of this Act. The final rule issued pursuant 
to such rulemaking may supersede the interim final rule promulgated 
under subsection (a).
                                                 Union Calendar No. 282

111th CONGRESS

  2d Session

                               H. R. 5114

                          [Report No. 111-495]

_______________________________________________________________________

                                 A BILL

 To extend the authorization for the national flood insurance program, 
     to identify priorities essential to reform and ongoing stable 
          functioning of the program, and for other purposes.

_______________________________________________________________________

                              May 26, 2010

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