[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1610 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 1610
To amend the National Flood Insurance Act of 1968 to allow the
Administrator of the Federal Emergency Management Agency to provide
capitalization grants to States to establish revolving funds to provide
funding assistance to reduce flood risks, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 7, 2019
Mr. Crist (for himself and Mr. Williams) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the National Flood Insurance Act of 1968 to allow the
Administrator of the Federal Emergency Management Agency to provide
capitalization grants to States to establish revolving funds to provide
funding assistance to reduce flood risks, 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 ``State Flood Mitigation Revolving
Fund Act of 2019''.
SEC. 2. STATE REVOLVING LOAN FUNDS FOR FLOOD MITIGATION.
Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C.
4011 et seq.) is amended by adding at the end the following:
``SEC. 1326. STATE REVOLVING LOAN FUNDS FOR FLOOD MITIGATION.
``(a) Definitions.--In this section--
``(1) the term `Community Rating System' means the
community rating system carried out under section 1315(b);
``(2) the term `eligible State' means a State, the District
of Columbia, and the Commonwealth of Puerto Rico;
``(3) the term `insular area' means--
``(A) Guam;
``(B) American Samoa;
``(C) the Commonwealth of the Northern Mariana
Islands;
``(D) the Federated States of Micronesia;
``(E) the Republic of the Marshall Islands;
``(F) the Republic of Palau; and
``(G) the United States Virgin Islands;
``(4) the term `intended use plan' means a plan prepared
under subsection (d)(1);
``(5) the term `low-income geographic area' means an area
described in paragraph (1) or (2) of section 301(a) of the
Public Works and Economic Development Act of 1965 (42 U.S.C.
3161(a));
``(6) the term `low-income homeowner' means the owner of a
primary residence, the household income of which in a taxable
year is not more than 80 percent of the median income for the
area in which the residence is located;
``(7) the term `participating State' means an eligible
State that--
``(A) has entered into an agreement under
subsection (b)(1); and
``(B) agrees to comply with the requirements of
this section;
``(8) the term `pre-FIRM building' means a building for
which construction or substantial improvement occurred before
the effective date of the initial Flood Insurance Rate Map
published by the Administrator under section 1360 for the area
in which the building is located;
``(9) the term `repetitive loss structure' has the meaning
given the term in section 1370(a);
``(10) the term `severe repetitive loss property' has the
meaning given the term in section 1307(h);
``(11) the term `State loan fund' means a flood mitigation
assistance revolving loan fund established by an eligible State
under this section; and
``(12) the term `tribal government' means the recognized
government of an Indian tribe, or the governing body of an
Alaska Native regional or village corporation, that has been
determined eligible to receive services from the Bureau of
Indian Affairs.
``(b) General Authority.--
``(1) In general.--The Administrator may enter into an
agreement with an eligible State to provide a capitalization
grant for the eligible State to establish a revolving fund that
will provide funding assistance to help homeowners, businesses,
nonprofit organizations, and communities reduce flood risk in
order to decrease--
``(A) the loss of life and property;
``(B) the cost of flood insurance; and
``(C) Federal disaster payments.
``(2) Timing of deposit and agreements for distribution of
funds.--
``(A) In general.--Not later than the last day of
the fiscal year following the fiscal year in which a
capitalization grant is made to a participating State
under paragraph (1), the participating State shall--
``(i) deposit the grant in the State loan
fund of the State; and
``(ii) enter into one or more binding
agreements that provide for the State to
distribute the grant funds for purposes
authorized under subsection (c) such that--
``(I) in the case of the initial
grant made under this section to a
State, not less than 75 percent of the
amount of the grant funds shall be
distributed before the expiration of
the 24-month period beginning upon
deposit of such funds in the State loan
fund of the State; and
``(II) in the case of any
subsequent grant made under this
section to a State, not less than 90
percent of the amount of the grant
funds made under the capitalization
grant shall be distributed before the
expiration of the 12-month period
beginning upon deposit of such funds in
the State loan fund of the State.
``(B) Noncompliance.--Except as provided in
subparagraph (C), if a participating State does not
comply with subparagraph (A) with respect to a grant,
the Administrator shall reallocate the grant in
accordance with paragraph (3)(B).
``(C) Exception.--The Administrator may not
reallocate any funds under subparagraph (B) to a
participating State that violated subparagraph (A) with
respect to a grant made during the same fiscal year in
which the funds to be reallocated were originally made
available.
``(3) Allocation.--
``(A) In general.--The Administrator shall allocate
amounts made available to carry out this section to
participating States--
``(i) for the participating States to
deposit in the State loan funds established by
the participating States; and
``(ii) except as provided in paragraph (6),
in accordance with the requirements described
in subparagraph (B).
``(B) Requirements.--The requirements described in
this subparagraph are as follows:
``(i) Fifty percent of the total amount
made available under subparagraph (A) shall be
allocated so that each participating State
receives the percentage amount that is obtained
by dividing the number of properties that were
insured under the national flood insurance
program in that State in the fiscal year
preceding the fiscal year in which the amount
is allocated by the total number of properties
that were insured under the national flood
insurance program in the fiscal year preceding
the fiscal year in which the amount is
allocated.
``(ii) Fifty percent of the total amount
made available under subparagraph (A) shall be
allocated so that each participating State
receives a percentage of funds that is equal to
the product obtained under clause (iii)(IV)
with respect to that participating State after
following the procedures described in clause
(iii).
``(iii) The procedures described in this
clause are as follows:
``(I) Divide the total amount
collected in premiums for properties
insured under the national flood
insurance program in each participating
State during the previous fiscal year
by the number of properties insured
under the national flood insurance
program in that State for that fiscal
year.
``(II) Add together each quotient
obtained under subclause (I).
``(III) For each participating
State, divide the quotient obtained
under subclause (I) with respect to
that State by the sum obtained under
subclause (II).
``(IV) For each participating
State, multiply the amount that is 50
percent of the total amount made
available under subparagraph (A) by the
quotient obtained under subclause
(III).
``(4) No revolving fund required.--
``(A) In general.--Notwithstanding any other
provision of this section, and subject to subparagraph
(B), a participating State that receives less than
$4,000,000 under paragraph (3)(B) in a fiscal year may
distribute the funds directly in the form of grants or
technical assistance for a purpose described in
subsection (c)(2), without regard to whether the State
has established a State loan fund.
``(B) State matching.--A participating State that
exercises the authority under subparagraph (A) in a
fiscal year shall provide matching funds from non-
Federal sources in an amount that is equal to 25
percent of the amount that the State receives under
paragraph (3)(B) in that fiscal year for purposes
described in subparagraph (A).
``(5) Allocation of remaining funds.--After allocating
amounts made available to carry out this section for a fiscal
year in accordance with paragraph (3), the Administrator shall
allocate any remaining amounts made available for that fiscal
year to participating States, using the procedures described in
clauses (i) through (iii) of paragraph (3)(B).
``(6) Allocation for tribal governments and insular
areas.--The Administrator shall reserve not less than 5.0
percent of the amount made available to carry out this section
in a fiscal year to enter into grant agreements with tribal
governments and insular areas, with the grant funds to be
distributed--
``(A) according to criteria established by the
Administrator; and
``(B) for a purpose described in subsection (c)(2).
``(7) Administrative costs; technical assistance.--The
Administrator shall reserve not more than 1.5 percent of the
amount made available to carry out this section in a fiscal
year--
``(A) for administrative costs incurred in carrying
out this section; and
``(B) to provide technical assistance to recipients
of grants under this section.
``(c) Use of Funds.--
``(1) In general.--Amounts deposited in a State loan fund,
including repayments of loans made from the fund and interest
earned on the amounts in the fund, shall be used--
``(A) consistent with paragraphs (2) and (3) and
subsection (g), to provide financial assistance for--
``(i) homeowners, businesses, and nonprofit
organizations that are eligible to participate
in the national flood insurance program; and
``(ii) any local government that
participates in the national flood insurance
program;
``(B) as a source of revenue and security for
leveraged loans, the proceeds of which shall be
deposited in the State loan fund; or
``(C) for the sale of bonds as security for payment
of the principal and interest on revenue or general
obligation bonds issued by the participating State to
provide matching funds under subsection (g), if the
proceeds from the sale of the bonds are deposited in
the State loan fund.
``(2) Purposes.--A recipient of financial assistance
provided through amounts from a State loan fund--
``(A) shall use the amounts to reduce--
``(i) flood risk; or
``(ii) potential flood claims submitted
under the national flood insurance program;
``(B) shall use the amounts in a cost-effective
manner under requirements established by the State,
which may require an applicant for financial assistance
to submit any information that the State considers
relevant or necessary before the date on which the
applicant receives the assistance;
``(C) shall use the amounts for projects that--
``(i) meet design and construction
standards established by the Administrator;
``(ii) are located in communities that--
``(I) participate in the national
flood insurance program; and
``(II) have developed a State,
local, or tribal government hazard
mitigation plan that has been approved
by the Administrator under section
1366;
``(iii)(I) address a repetitive loss
structure or a severe repetitive loss property;
or
``(II) address flood risk in the 500-year
floodplain, areas of residual flood risk, or
other areas of potential flood risk, as
identified by the Administrator; and
``(iv) address current risk and anticipate
future risk, such as sea-level rise;
``(D) may use the amounts--
``(i) for projects relating to--
``(I) structural elevation;
``(II) floodproofing;
``(III) the relocation or removal
of buildings from the 100-year
floodplain or other areas of flood
risk, including the acquisition of
properties for such a purpose;
``(IV) environmental restoration
activities that directly reduce flood
risk;
``(V) any eligible activity
described in subparagraphs (A) through
(G) of section 1366(c)(3); or
``(VI) other activities determined
appropriate by the Administrator;
``(ii) with respect to a project described
in clause (i), only for expenditures directly
related to a project described in that clause,
including expenditures for planning, design,
and associated pre-construction activities; and
``(iii) to acquire, for the purposes of
permanent protection, land, buildings, or a
conservation easement from a willing seller or
grantor;
``(E) may not use the amounts--
``(i) to construct buildings or expand
existing buildings unless the activity is for
the purpose of flood mitigation;
``(ii) to improve any structure, unless the
recipient has obtained flood insurance coverage
in an amount at least equal to the lesser of
the eligible project costs or the maximum
insurable limit for the structure under the
national flood insurance program coverage for
the structure, which coverage shall be
maintained for the useful life of the
structure;
``(iii) to improve a residential property
with an appraised value that is not less than
125 percent of the limitation on the maximum
original principal obligation of a conventional
mortgage that may be purchased by the Federal
National Mortgage Association or the Federal
Home Loan Mortgage Corporation in the area in
which the property is located, as established
under section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)) and section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2));
``(iv) for the direct benefit of a
homeowner if the annual household adjusted
gross income of the homeowner during the
previous fiscal year was not less than
$200,000, as annually adjusted by the
Administrator to reflect changes in the
Consumer Price Index for All Urban Consumers,
as published by the Bureau of Labor Statistics
of the Department of Labor and rounded to the
nearest $25; or
``(v) to acquire real property or an
interest in real property unless the property
is purchased from a willing seller; and
``(F) shall, in the use of such amounts, give
priority to the maximum extent practicable to projects
that assist low-income homeowners and low-income
geographical areas.
``(d) Intended Use Plans.--
``(1) In general.--After providing the opportunity for
public review and comment, each participating State shall
annually prepare a plan that identifies, for the year following
the date of issuance of the intended use plan, the intended
uses of the amounts available in the State loan fund of the
participating State.
``(2) Consultation during preparation.--Each participating
State, in preparing an intended use plan, shall ensure that the
State agency with primary responsibility for floodplain
management--
``(A) provides oversight with respect to the
preparation of the intended use plan; and
``(B) consults with any other appropriate State
agency, including agencies responsible for coastal and
environmental management.
``(3) Contents.--A participating State shall, in each
intended use plan--
``(A) include--
``(i) an explanation of the mitigation and
resiliency benefits the State intends to
achieve, including by--
``(I) reducing future damage and
loss associated with flooding;
``(II) reducing the number of
severe repetitive loss properties and
repetitive loss structures in the
State;
``(III) decreasing the number of
flood insurance claims in the State;
and
``(IV) increasing the rating under
the Community Rating System for
communities in the State;
``(ii) information with respect to the
availability of, and the application process
for receiving, financial assistance from the
State loan fund of the State;
``(iii) the criteria and methods
established for the distribution of amounts
from the State loan fund of the State;
``(iv) the amount of financial assistance
that the State anticipates allocating to--
``(I) local government projects;
and
``(II) projects for homeowners,
business, or nonprofit organizations;
``(v) the expected terms of the assistance
provided under clause (iv); and
``(vi) a description of the financial
status of the State loan fund and the short-
term and long-term goals of the State loan
fund; and
``(B) provide, to the maximum extent practicable,
that priority for the use of amounts from the State
loan fund shall be given to projects that--
``(i) address severe repetitive loss
properties and repetitive loss structures;
``(ii) assist low-income homeowners and
low-income geographic areas; and
``(iii) address flood risk for pre-FIRM
buildings.
``(4) Publication.--Each participating State shall publish
and periodically update a list of all projects receiving
funding from the State loan fund of the State, which shall
include identification of--
``(A) the community in which the project is
located;
``(B) the type and amount of assistance provided
for each project; and
``(C) the expected funding schedule and date of
completion of each project.
``(e) Fund Management.--Amounts in a State loan fund shall--
``(1) remain available for providing financial assistance
under this section until distributed;
``(2) if the amounts are not required for immediate
distribution or expenditure, be invested in interest-bearing
obligations; and
``(3) except as provided in subsection (i), include only--
``(A) amounts received from capitalization grants
made under this section;
``(B) repayments of loans made from the fund; and
``(C) interest earned on amounts in the fund.
``(f) Matching Funds.--
``(1) Full grant.--On or before the date on which a
participating State receives a capitalization grant, the State
shall deposit into the State loan fund of the State, in
addition to the amount of the capitalization grant, an amount
from non-Federal sources that is not less than 20 percent of
the total amount of the capitalization grant.
``(2) Reduced grant.--Notwithstanding paragraph (1), if a
State deposits in the State loan fund of the State in
connection to a capitalization grant an amount from non-Federal
sources that is less than 20 percent of the total amount of the
capitalization grant that would otherwise be received by the
State, the Administrator shall reduce the amount of the
capitalization grant received by the State to the amount that
is 5 times the amount so deposited and shall allocate such
remaining grant amounts under subsection (b)(5) together with
the amounts allocated under such subsection.
``(g) Types of Assistance.--Unless otherwise prohibited by State
law, a participating State may use the amounts deposited into a State
loan fund under this section only--
``(1) to make a loan, on the condition that--
``(A) the interest rate for the loan is not more
than the market interest rate;
``(B) the recipient of the loan will begin making
principal and interest payments on the loan not later
than 1 year after the date on which the project for
which the loan was made is completed;
``(C) the loan will be fully amortized not later
than 20 years after the date on which the project for
which the loan was made is completed, except that, in
the case of a loan made for a project in a low-income
geographic area or to a low-income homeowner, the State
may provide a longer amortization period for the loan
if that longer period--
``(i) ends on a date that is not later than
30 years after the date on which the project is
completed; and
``(ii) is not longer than the expected
design life of the project;
``(D) the recipient of the loan demonstrates, based
on verified and documented information that, at the
time the loan is consummated, that the recipient has a
reasonable ability to repay the loan, according to its
terms, except that this subparagraph may not be
construed to authorize any reduction or limitation in
efforts to comply with the requirements of subsection
(c)(2)(E) (relating to priority for assistance for low-
income homeowners and low-income geographical areas);
and
``(E) payments of principal and interest with
respect to the loan will be deposited into the State
loan fund;
``(2) to buy or refinance the debt obligation of a local
government at an interest rate that is not more than the market
interest rate;
``(3) to guarantee, or purchase insurance for, a local
obligation, the proceeds of which finance a project eligible
for assistance under this section, if the guarantee or
purchase, as applicable, would--
``(A) improve credit market access; or
``(B) reduce the interest rate with respect to the
obligation;
``(4) as a source of revenue or as security for the payment
of principal and interest on revenue or general obligation
bonds issued by the State if the proceeds of the sale of the
bonds will be deposited into the State loan fund; or
``(5) to earn interest on those amounts.
``(h) Assistance for Low-Income Homeowners and Low-Income
Geographic Areas.--
``(1) In general.--Notwithstanding any other provision of
this section, if a participating State uses amounts from a
State loan fund to provide financial assistance under
subsection (c) in a low-income geographic area or to a low-
income homeowner, the State may provide additional
subsidization to the recipient of the assistance, including
forgiveness of the principal of a loan.
``(2) Limitation.--For each fiscal year, the total amount
of additional subsidization provided by a participating State
under paragraph (1) may not exceed 30 percent of the amount of
the capitalization grant allocated to the State for that fiscal
year.
``(i) Administration of Fund.--
``(1) In general.--A participating State may combine the
financial administration of a State loan fund with the
financial administration of any other revolving fund
established by the State if--
``(A) combining the administration of the funds
would--
``(i) be convenient and avoid
administrative costs; and
``(ii) not violate the law of the State;
and
``(B) the Administrator determines that--
``(i) amounts obtained from a grant made
under this section, amounts obtained from the
repayment of a loan made from a State loan
fund, and interest earned on amounts in a State
loan fund will be--
``(I) accounted for separately from
amounts from other revolving funds; and
``(II) used only for purposes
authorized under this section; and
``(ii) after consulting with the
appropriate State agencies, the authority to
establish assistance priorities and carry out
oversight and related activities, other than
financial administration, with respect to flood
assistance remains with the State agency with
primary responsibility for floodplain
management.
``(2) Administrative and technical costs.--
``(A) In general.--For each fiscal year, a
participating State may use the amount described in
subparagraph (B) to--
``(i) pay the reasonable costs of
administration of the programs under this
section, including the recovery of reasonable
costs incurred in establishing a State loan
fund;
``(ii) provide appropriate oversight of
projects authorized under this section; and
``(iii) provide technical assistance and
outreach to recipients in the State of amounts
under this section, including with respect to
updating hazard mitigation plans and
participating in the Community Rating System,
in an amount that is not more than 4 percent of
the funds made available to the State under
this section.
``(B) Description.--The amount described in this
subparagraph is an amount equal to the sum of--
``(i) any fees collected by a participating
State to recover the costs described in
subparagraph (A)(i), regardless of the source;
and
``(ii) the greatest of--
``(I) $400,000;
``(II) 0.2 percent of the value of
the State loan fund of a State, as of
the date on which the valuation is
made; and
``(III) an amount equal to 7
percent of all grant awards made to a
participating State for the State loan
fund of the State under this section
for the fiscal year.
``(3) Audit and report.--
``(A) Audit requirement.--Not less frequently than
biennially, each participating State shall conduct an
audit of the State loan fund of the State.
``(B) Report.--Each participating State shall
submit to the Administrator a biennial report regarding
the activities of the State under this section during
the period covered by the report, including--
``(i) the result of any audit conducted by
the State under subparagraph (A); and
``(ii) a review of the effectiveness of the
State loan fund of the State with respect to--
``(I) the intended use plans of the
State; and
``(II) meeting the objectives
described in subsection (b)(1).
``(4) Oversight.--In conducting oversight with respect to
State loan funds established under this section, the
Administrator--
``(A) shall--
``(i) periodically audit the funds in
accordance with procedures established by the
Comptroller General of the United States; and
``(ii) not less frequently than once every
4 years, review each State loan fund to
determine the effectiveness of the fund in
reducing flood risk; and
``(B) may, at any time--
``(i) make recommendations to a
participating State with respect to the
administration of the State loan fund of the
State; or
``(ii) require specific changes with
respect to a State loan fund in order to
improve the effectiveness of the fund.
``(j) Liability Protections.--The Federal Government shall not be
liable for any claim based upon the exercise or performance of, or the
failure to exercise or perform, a discretionary function or duty on the
part of the Federal agency, or an employee of the Federal Government,
in carrying out the provision of this section.
``(k) Regulations.--The Administrator shall promulgate such
guidance or regulations as may be necessary to carry out this section,
including guidance or regulations that--
``(1) ensure that each participating State to which funds
are allocated under this section uses the funds as efficiently
as possible;
``(2) reduce, to the maximum extent practicable, waste,
fraud, and abuse with respect to the implementation of this
section; and
``(3) require any party that receives funds directly or
indirectly under this section, including a participating State
and a recipient of amounts from a State loan fund, to use
procedures with respect to the management of the funds that
conform to generally accepted accounting standards.
``(l) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section
for fiscal years 2020 through 2029.''.
SEC. 3. CONSIDERATION OF MITIGATION MEASURES FUNDED BY STATE LOAN FUNDS
IN FLOOD INSURANCE PREMIUM RATES.
(a) Estimated Rates.--Clause (ii) of section 1307(a)(1)(A) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4014(a)(1)(A)(ii)) is
amended by inserting ``and any activities assisted through amounts from
a State loan fund established pursuant to section 1326,'' after
``similar measures,''.
(b) Chargeable Rates.--Paragraph (1) of section 1308(b) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4015(b)(1)) is amended
by striking ``and similar measures'' and inserting ``similar measures,
and any activities assisted through amounts from a State loan fund
established pursuant to section 1326''.
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