[Congressional Record (Bound Edition), Volume 150 (2004), Part 10]
[House]
[Pages 13181-13190]
[From the U.S. Government Publishing Office, www.gpo.gov]




     BUNNING-BEREUTER-BLUMENAUER FLOOD INSURANCE REFORM ACT OF 2004

  Mr. GREEN of Wisconsin. Mr. Speaker, I move to suspend the rules and 
pass the Senate bill (S. 2238) to amend the National Flood Insurance 
Act of 1968 to reduce losses to properties for which repetitive flood 
insurance claim payments have been made.
  The Clerk read as follows:

                                S. 2238

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Bunning-
     Bereuter-Blumenaur Flood Insurance Reform Act of 2004''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings.

           TITLE I--AMENDMENTS TO FLOOD INSURANCE ACT OF 1968

Sec. 101. Extension of program and consolidation of authorizations.
Sec. 102. Establishment of pilot program for mitigation of severe 
              repetitive loss properties.
Sec. 103. Amendments to existing flood mitigation assistance program.
Sec. 104. FEMA authority to fund mitigation activities for individual 
              repetitive claims properties.
Sec. 105. Amendments to additional coverage for compliance with land 
              use and control measures.
Sec. 106. Actuarial rate properties.
Sec. 107. Geospatial digital flood hazard data.
Sec. 108. Replacement of mobile homes on original sites.
Sec. 109. Reiteration of FEMA responsibility to map mudslides.

                   TITLE II--MISCELLANEOUS PROVISIONS

Sec. 201. Definitions.
Sec. 202. Supplemental forms.
Sec. 203. Acknowledgement form.
Sec. 204. Flood insurance claims handbook.

[[Page 13182]]

Sec. 205. Appeal of decisions relating to flood insurance coverage.
Sec. 206. Study and report on use of cost compliance coverage.
Sec. 207. Minimum training and education requirements.
Sec. 208. GAO study and report.
Sec. 209. Prospective payment of flood insurance premiums.
Sec. 210. Report on changes to fee schedule or fee payment 
              arrangements.

     SEC. 2. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) the national flood insurance program--
       (A) identifies the flood risk;
       (B) provides flood risk information to the public;
       (C) encourages State and local governments to make 
     appropriate land use adjustments to constrict the development 
     of land which is exposed to flood damage and minimize damage 
     caused by flood losses; and
       (D) makes flood insurance available on a nationwide basis 
     that would otherwise not be available, to accelerate recovery 
     from floods, mitigate future losses, save lives, and reduce 
     the personal and national costs of flood disasters;
       (2) the national flood insurance program insures 
     approximately 4,400,000 policyholders;
       (3) approximately 48,000 properties currently insured under 
     the program have experienced, within a 10-year period, 2 or 
     more flood losses where each such loss exceeds the amount 
     $1,000;
       (4) approximately 10,000 of these repetitive-loss 
     properties have experienced either 2 or 3 losses that 
     cumulatively exceed building value or 4 or more losses, each 
     exceeding $1,000;
       (5) repetitive-loss properties constitute a significant 
     drain on the resources of the national flood insurance 
     program, costing about $200,000,000 annually;
       (6) repetitive-loss properties comprise approximately 1 
     percent of currently insured properties but are expected to 
     account for 25 to 30 percent of claims losses;
       (7) the vast majority of repetitive-loss properties were 
     built before local community implementation of floodplain 
     management standards under the program and thus are eligible 
     for subsidized flood insurance;
       (8) while some property owners take advantage of the 
     program allowing subsidized flood insurance without requiring 
     mitigation action, others are trapped in a vicious cycle of 
     suffering flooding, then repairing flood damage, then 
     suffering flooding, without the means to mitigate losses or 
     move out of harm's way;
       (9) mitigation of repetitive-loss properties through 
     buyouts, elevations, relocations, or flood-proofing will 
     produce savings for policyholders under the program and for 
     Federal taxpayers through reduced flood insurance losses and 
     reduced Federal disaster assistance;
       (10) a strategy of making mitigation offers aimed at high-
     priority repetitive-loss properties and shifting more of the 
     burden of recovery costs to property owners who choose to 
     remain vulnerable to repetitive flood damage can encourage 
     property owners to take appropriate actions that reduce loss 
     of life and property damage and benefit the financial 
     soundness of the program;
       (11) the method for addressing repetitive-loss properties 
     should be flexible enough to take into consideration 
     legitimate circumstances that may prevent an owner from 
     taking a mitigation action; and
       (12) focusing the mitigation and buy-out of repetitive loss 
     properties upon communities and property owners that choose 
     to voluntarily participate in a mitigation and buy-out 
     program will maximize the benefits of such a program, while 
     minimizing any adverse impact on communities and property 
     owners.

           TITLE I--AMENDMENTS TO FLOOD INSURANCE ACT OF 1968

     SEC. 101. EXTENSION OF PROGRAM AND CONSOLIDATION OF 
                   AUTHORIZATIONS.

       (a) Borrowing Authority.--The first sentence of section 
     1309(a) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4016(a)), is amended by striking ``through December'' 
     and all that follows through ``, and'' and inserting 
     ``through the date specified in section 1319, and''.
       (b) Authority for Contracts.--Section 1319 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4026), is amended by 
     striking ``after'' and all that follows and inserting ``after 
     September 30, 2008.''.
       (c) Emergency Implementation.--Section 1336(a) of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4056(a)), is 
     amended by striking ``during the period'' and all that 
     follows through ``in accordance'' and inserting ``during the 
     period ending on the date specified in section 1319, in 
     accordance''.
       (d) Authorization of Appropriations for Studies.--Section 
     1376(c) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4127(c)), is amended by striking ``through'' and all 
     that follows and inserting ``through the date specified in 
     section 1319, for studies under this title.''.

     SEC. 102. ESTABLISHMENT OF PILOT PROGRAM FOR MITIGATION OF 
                   SEVERE REPETITIVE LOSS PROPERTIES.

       (a) In General.--The National Flood Insurance Act of 1968 
     is amended by inserting after section 1361 (42 U.S.C. 4102) 
     the following:

     ``SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE 
                   REPETITIVE LOSS PROPERTIES.

       ``(a) Authority.--To the extent amounts are made available 
     for use under this section, the Director may, subject to the 
     limitations of this section, provide financial assistance to 
     States and communities that decide to participate in the 
     pilot program established under this section for taking 
     actions with respect to severe repetitive loss properties (as 
     such term is defined in subsection (b)) to mitigate flood 
     damage to such properties and losses to the National Flood 
     Insurance Fund from such properties.
       ``(b) Severe Repetitive Loss Property.--For purposes of 
     this section, the term `severe repetitive loss property' has 
     the following meaning:
       ``(1) Single-family properties.--In the case of a property 
     consisting of 1 to 4 residences, such term means a property 
     that--
       ``(A) is covered under a contract for flood insurance made 
     available under this title; and
       ``(B) has incurred flood-related damage--
       ``(i) for which 4 or more separate claims payments have 
     been made under flood insurance coverage under this title, 
     with the amount of each such claim exceeding $5,000, and with 
     the cumulative amount of such claims payments exceeding 
     $20,000; or
       ``(ii) for which at least 2 separate claims payments have 
     been made under such coverage, with the cumulative amount of 
     such claims exceeding the value of the property.
       ``(2) Multifamily properties.--In the case of a property 
     consisting of 5 or more residences, such term shall have such 
     meaning as the Director shall by regulation provide.
       ``(c) Eligible Activities.--Amounts provided under this 
     section to a State or community may be used only for the 
     following activities:
       ``(1) Mitigation activities.--To carry out mitigation 
     activities that reduce flood damages to severe repetitive 
     loss properties, including elevation, relocation, demolition, 
     and floodproofing of structures, and minor physical localized 
     flood control projects, and the demolition and rebuilding of 
     properties to at least Base Flood Elevation or greater, if 
     required by any local ordinance.
       ``(2) Purchase.--To purchase severe repetitive loss 
     properties, subject to subsection (g).
       ``(d) Matching Requirement.--
       ``(1) In general.--Except as provided in paragraph (2), in 
     any fiscal year the Director may not provide assistance under 
     this section to a State or community in an amount exceeding 3 
     times the amount that the State or community certifies, as 
     the Director shall require, that the State or community will 
     contribute from non-Federal funds for carrying out the 
     eligible activities to be funded with such assistance 
     amounts.
       ``(2) Reduced community match.--With respect to any 1-year 
     period in which assistance is made available under this 
     section, the Director may adjust the contribution required 
     under paragraph (1) by any State, and for the communities 
     located in that State, to not less than 10 percent of the 
     cost of the activities for each severe repetitive loss 
     property for which grant amounts are provided if, for such 
     year--
       ``(A) the State has an approved State mitigation plan 
     meeting the requirements for hazard mitigation planning under 
     section 322 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5165) that specifies how 
     the State intends to reduce the number of severe repetitive 
     loss properties; and
       ``(B) the Director determines, after consultation with the 
     State, that the State has taken actions to reduce the number 
     of such properties.
       ``(3) Non-federal funds.--For purposes of this subsection, 
     the term `non-Federal funds' includes State or local agency 
     funds, in-kind contributions, any salary paid to staff to 
     carry out the eligible activities of the recipient, the value 
     of the time and services contributed by volunteers to carry 
     out such activities (at a rate determined by the Director), 
     and the value of any donated material or building and the 
     value of any lease on a building.
       ``(e) Notice of Mitigation Program.--
       ``(1) In general.--Upon selecting a State or community to 
     receive assistance under subsection (a) to carry out eligible 
     activities, the Director shall notify the owners of a severe 
     repetitive loss property, in plain language, within that 
     State or community--
       ``(A) that their property meets the definition of a severe 
     repetitive loss property under this section;
       ``(B) that they may receive an offer of assistance under 
     this section;
       ``(C) of the types of assistance potentially available 
     under this section;
       ``(D) of the implications of declining such offer of 
     assistance under this section; and
       ``(E) that there is a right to appeal under this section.
       ``(2) Identification of severe repetitive loss 
     properties.--The Director shall take such steps as are 
     necessary to identify severe repetitive loss properties, and 
     submit that information to the relevant States and 
     communities.
       ``(f) Standards for Mitigation Offers.--The program under 
     this section for providing

[[Page 13183]]

     assistance for eligible activities for severe repetitive loss 
     properties shall be subject to the following limitations:
       ``(1) Priority.--In determining the properties for which to 
     provide assistance for eligible activities under subsection 
     (c), the Director shall provide assistance for properties in 
     the order that will result in the greatest amount of savings 
     to the National Flood Insurance Fund in the shortest period 
     of time, in a manner consistent with the allocation formula 
     under paragraph (5).
       ``(2) Offers.--The Director shall provide assistance in a 
     manner that permits States and communities to make offers to 
     owners of severe repetitive loss properties to take eligible 
     activities under subsection (c) as soon as practicable.
       ``(3) Consultation.--In determining for which eligible 
     activities under subsection (c) to provide assistance with 
     respect to a severe repetitive loss property, the relevant 
     States and communities shall consult, to the extent 
     practicable, with the owner of the property.
       ``(4) Deference to local mitigation decisions.--The 
     Director shall not, by rule, regulation, or order, establish 
     a priority for funding eligible activities under this section 
     that gives preference to one type or category of eligible 
     activity over any other type or category of eligible 
     activity.
       ``(5) Allocation.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), of 
     the total amount made available for assistance under this 
     section in any fiscal year, the Director shall allocate 
     assistance to a State, and the communities located within 
     that State, based upon the percentage of the total number of 
     severe repetitive loss properties located within that State.
       ``(B) Redistribution.--Any funds allocated to a State, and 
     the communities within the State, under subparagraph (A) that 
     have not been obligated by the end of each fiscal year shall 
     be redistributed by the Director to other States and 
     communities to carry out eligible activities in accordance 
     with this section.
       ``(C) Exception.--Of the total amount made available for 
     assistance under this section in any fiscal year, 10 percent 
     shall be made available to communities that--
       ``(i) contain one or more severe repetitive loss 
     properties; and
       ``(ii) are located in States that receive little or no 
     assistance, as determined by the Director, under the 
     allocation formula under subparagraph (A).
       ``(6) Notice.--Upon making an offer to provide assistance 
     with respect to a property for any eligible activity under 
     subsection (c), the State or community shall notify each 
     holder of a recorded interest on the property of such offer 
     and activity.
       ``(g) Purchase Offers.--A State or community may take 
     action under subsection (c)(2) to purchase a severe 
     repetitive loss property only if the following requirements 
     are met:
       ``(1) Use of property.--The State or community enters into 
     an agreement with the Director that provides assurances that 
     the property purchased will be used in a manner that is 
     consistent with the requirements of section 404(b)(2)(B) of 
     the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5170c(b)(2)(B)) for properties 
     acquired, accepted, or from which a structure will be removed 
     pursuant to a project provided property acquisition and 
     relocation assistance under such section 404(b).
       ``(2) Offers.--The Director shall provide assistance in a 
     manner that permits States and communities to make offers to 
     owners of severe repetitive loss properties and of associated 
     land to engage in eligible activities as soon as possible.
       ``(3) Purchase price.--The amount of purchase offer is not 
     less than the greatest of--
       ``(A) the amount of the original purchase price of the 
     property, when purchased by the holder of the current policy 
     of flood insurance under this title;
       ``(B) the total amount owed, at the time the offer to 
     purchase is made, under any loan secured by a recorded 
     interest on the property; and
       ``(C) an amount equal to the fair market value of the 
     property immediately before the most recent flood event 
     affecting the property, or an amount equal to the current 
     fair market value of the property.
       ``(4) Comparable housing payment.--If a purchase offer made 
     under paragraph (2) is less than the cost of the homeowner-
     occupant to purchase a comparable replacement dwelling 
     outside the flood hazard area in the same community, the 
     Director shall make available an additional relocation 
     payment to the homeowner-occupant to apply to the difference.
       ``(h) Increased Premiums in Cases of Refusal To Mitigate.--
       ``(1) In general.--In any case in which the owner of a 
     severe repetitive loss property refuses an offer to take 
     action under paragraph (1) or (2) of subsection (c) with 
     respect to such property, the Director shall--
       ``(A) notify each holder of a recorded interest on the 
     property of such refusal; and
       ``(B) notwithstanding subsections (a) through (c) of 
     section 1308, thereafter the chargeable premium rate with 
     respect to the property shall be the amount equal to 150 
     percent of the chargeable rate for the property at the time 
     that the offer was made, as adjusted by any other premium 
     adjustments otherwise applicable to the property and any 
     subsequent increases pursuant to paragraph (2) and subject to 
     the limitation under paragraph (3).
       ``(2) Increased premiums upon subsequent flood damage.--
     Notwithstanding subsections (a) through (c) of section 1308, 
     if the owner of a severe repetitive loss property does not 
     accept an offer to take action under paragraph (1) or (2) of 
     subsection (c) with respect to such property and a claim 
     payment exceeding $1,500 is made under flood insurance 
     coverage under this title for damage to the property caused 
     by a flood event occurring after such offer is made, 
     thereafter the chargeable premium rate with respect to the 
     property shall be the amount equal to 150 percent of the 
     chargeable rate for the property at the time of such flood 
     event, as adjusted by any other premium adjustments otherwise 
     applicable to the property and any subsequent increases 
     pursuant to this paragraph and subject to the limitation 
     under paragraph (3).
       ``(3) Limitation on increased premiums.--In no case may the 
     chargeable premium rate for a severe repetitive loss property 
     be increased pursuant to this subsection to an amount 
     exceeding the applicable estimated risk premium rate for the 
     area (or subdivision thereof) under section 1307(a)(1).
       ``(4) Treatment of deductibles.--Any increase in chargeable 
     premium rates required under this subsection for a severe 
     repetitive loss property may be carried out, to the extent 
     appropriate, as determined by the Director, by adjusting any 
     deductible charged in connection with flood insurance 
     coverage under this title for the property.
       ``(5) Notice of continued offer.--Upon each renewal or 
     modification of any flood insurance coverage under this title 
     for a severe repetitive loss property, the Director shall 
     notify the owner that the offer made pursuant to subsection 
     (c) is still open.
       ``(6) Appeals.--
       ``(A) In general.--Any owner of a severe repetitive loss 
     property may appeal a determination of the Director to take 
     action under paragraph (1)(B) or (2) with respect to such 
     property, based only upon the following grounds:
       ``(i) As a result of such action, the owner of the property 
     will not be able to purchase a replacement primary residence 
     of comparable value and that is functionally equivalent.
       ``(ii) Based on independent information, such as contractor 
     estimates or appraisals, the property owner believes that the 
     price offered for purchasing the property is not an accurate 
     estimation of the value of the property, or the amount of 
     Federal funds offered for mitigation activities, when 
     combined with funds from non-Federal sources, will not cover 
     the actual cost of mitigation.
       ``(iii) As a result of such action, the preservation or 
     maintenance of any prehistoric or historic district, site, 
     building, structure, or object included in, or eligible for 
     inclusion in, the National Register of Historic Places will 
     be interfered with, impaired, or disrupted.
       ``(iv) The flooding that resulted in the flood insurance 
     claims described in subsection (b)(2) for the property 
     resulted from significant actions by a third party in 
     violation of Federal, State, or local law, ordinance, or 
     regulation.
       ``(v) In purchasing the property, the owner relied upon 
     flood insurance rate maps of the Federal Emergency Management 
     Agency that were current at the time and did not indicate 
     that the property was located in an area having special flood 
     hazards.
       ``(vi) The owner of the property, based on independent 
     information, such as contractor estimates or other 
     appraisals, demonstrates that an alternative eligible 
     activity under subsection (c) is at least as cost effective 
     as the initial offer of assistance.
       ``(B) Procedure.--An appeal under this paragraph of a 
     determination of the Director shall be made by filing, with 
     the Director, a request for an appeal within 90 days after 
     receiving notice of such determination. Upon receiving the 
     request, the Director shall select, from a list of 
     independent third parties compiled by the Director for such 
     purpose, a party to hear such appeal. Within 90 days after 
     filing of the request for the appeal, such third party shall 
     review the determination of the Director and shall set aside 
     such determination if the third party determines that the 
     grounds under subparagraph (A) exist. During the pendency of 
     an appeal under this paragraph, the Director shall stay the 
     applicability of the rates established pursuant to paragraph 
     (1)(B) or (2), as applicable.
       ``(C) Effect of final determination.--In an appeal under 
     this paragraph--
       ``(i) if a final determination is made in favor of the 
     property owner under subparagraph (A) exist, the third party 
     hearing such appeal shall require the Director to reduce the 
     chargeable risk premium rate for flood insurance coverage for 
     the property involved in the appeal from the amount required 
     under paragraph (1)(B) or (2) to the amount paid prior to the 
     offer to take action under paragraph (1) or (2) of subsection 
     (c); and
       ``(ii) if a final determination is made that the grounds 
     under subparagraph (A) do not exist, the Director shall 
     promptly increase

[[Page 13184]]

     the chargeable risk premium rate for such property to the 
     amount established pursuant to paragraph (1)(B) or (2), as 
     applicable, and shall collect from the property owner the 
     amount necessary to cover the stay of the applicability of 
     such increased rates during the pendency of the appeal.
       ``(D) Costs.--If the third party hearing an appeal under 
     this paragraph is compensated for such service, the costs of 
     such compensation shall be borne--
       ``(i) by the owner of the property requesting the appeal, 
     if the final determination in the appeal is that the grounds 
     under subparagraph (A) do not exist; and
       ``(ii) by the National Flood Insurance Fund, if such final 
     determination is that the grounds under subparagraph (A) do 
     exist.
       ``(E) Report.--Not later than 6 months after the date of 
     the enactment of the Bunning-Bereuter-Blumenaur Flood 
     Insurance Reform Act of 2004, the Director shall submit a 
     report describing the rules, procedures, and administration 
     for appeals under this paragraph to--
       ``(i) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate; and
       ``(ii) the Committee on Financial Services of the House of 
     Representatives.
       ``(i) Discretionary Actions in Cases of Fraudulent 
     Claims.--If the Director determines that a fraudulent claim 
     was made under flood insurance coverage under this title for 
     a severe repetitive loss property, the Director may--
       ``(1) cancel the policy and deny the provision to such 
     policyholder of any new flood insurance coverage under this 
     title for the property; or
       ``(2) refuse to renew the policy with such policyholder 
     upon expiration and deny the provision of any new flood 
     insurance coverage under this title to such policyholder for 
     the property.
       ``(j) Rules.--
       ``(1) In general.--The Director shall, by rule--
       ``(A) subject to subsection (f)(4), develop procedures for 
     the distribution of funds to States and communities to carry 
     out eligible activities under this section; and
       ``(B) ensure that the procedures developed under paragraph 
     (1)--
       ``(i) require the Director to notify States and communities 
     of the availability of funding under this section, and that 
     participation in the pilot program under this section is 
     optional;
       ``(ii) provide that the Director may assist States and 
     communities in identifying severe repetitive loss properties 
     within States or communities;
       ``(iii) allow each State and community to select properties 
     to be the subject of eligible activities, and the appropriate 
     eligible activity to be performed with respect to each severe 
     repetitive loss property; and
       ``(iv) require each State or community to submit a list of 
     severe repetitive loss properties to the Director that the 
     State or community would like to be the subject of eligible 
     activities under this section.
       ``(2) Consultation.--Not later than 90 days after the date 
     of enactment of this Act, the Director shall consult with 
     State and local officials in carrying out paragraph (1)(A), 
     and provide an opportunity for an oral presentation, on the 
     record, of data and arguments from such officials.
       ``(k) Funding.--
       ``(1) In general.--Pursuant to section 1310(a)(8), the 
     Director may use amounts from the National Flood Insurance 
     Fund to provide assistance under this section in each of 
     fiscal years 2005, 2006, 2007, 2008, and 2009, except that 
     the amount so used in each such fiscal year may not exceed 
     $40,000,000 and shall remain available until expended. 
     Notwithstanding any other provision of this title, amounts 
     made available pursuant to this subsection shall not be 
     subject to offsetting collections through premium rates for 
     flood insurance coverage under this title.
       ``(2) Administrative expenses.--Of the amounts made 
     available under this subsection, the Director may use up to 5 
     percent for expenses associated with the administration of 
     this section.
       ``(l) Termination.--The Director may not provide assistance 
     under this section to any State or community after September 
     30, 2009.''.
       (b) Availability of National Flood Insurance Fund 
     Amounts.--Section 1310(a) of the National Flood Insurance Act 
     of 1968 (42 U.S.C. 4017(a)) is amended--
       (1) in paragraph (7), by striking ``and'' at the end; and
       (2) by striking paragraph (8) and inserting the following:
       ``(8) for financial assistance under section 1361A to 
     States and communities for taking actions under such section 
     with respect to severe repetitive loss properties, but only 
     to the extent provided in section 1361A(i); and''.

     SEC. 103. AMENDMENTS TO EXISTING FLOOD MITIGATION ASSISTANCE 
                   PROGRAM.

       (a) Standard for Approval of Mitigation Plans.--Section 
     1366(e)(3) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4104c) is amended by adding at the end the following 
     new sentence: ``The Director may approve only mitigation 
     plans that give priority for funding to such properties, or 
     to such subsets of properties, as are in the best interest of 
     the National Flood Insurance Fund.''.
       (b) Priority for Mitigation Assistance.--Section 1366(e) of 
     the National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is 
     amended by striking paragraph (4) and inserting the 
     following:
       ``(4) Priority for mitigation assistance.--In providing 
     grants under this subsection for mitigation activities, the 
     Director shall give first priority for funding to such 
     properties, or to such subsets of such properties as the 
     Director may establish, that the Director determines are in 
     the best interests of the National Flood Insurance Fund and 
     for which matching amounts under subsection (f) are 
     available.''.
       (c) Coordination With States and Communities.--Section 1366 
     of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c) 
     is amended by adding at the end the following:
       ``(m) Coordination With States and Communities.--The 
     Director shall, in consultation and coordination with States 
     and communities take such actions as are appropriate to 
     encourage and improve participation in the national flood 
     insurance program of owners of properties, including owners 
     of properties that are not located in areas having special 
     flood hazards (the 100-year floodplain), but are located 
     within flood prone areas.''.
       (d) Funding.--Section 1367 of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4104d) is amended--
       (1) in subsection (b), by striking paragraph (1) and 
     inserting the following:
       ``(1) in each fiscal year, amounts from the National Flood 
     Insurance Fund not exceeding $40,000,000, to remain available 
     until expended;'';
       (2) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (3) by inserting after subsection (b) the following:
       ``(c) Administrative Expenses.--The Director may use not 
     more than 5 percent of amounts made available under 
     subsection (b) to cover salaries, expenses, and other 
     administrative costs incurred by the Director to make grants 
     and provide assistance under sections 1366 and 1323.''.
       (e) Reduced Community Match.--Section 1366(g) of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4104c(g)), is 
     amended--
       (2) by redesignating paragraph (2) as paragraph (3); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Reduced community match.--With respect to any 1-year 
     period in which assistance is made available under this 
     section, the Director may adjust the contribution required 
     under paragraph (1) by any State, and for the communities 
     located in that State, to not less than 10 percent of the 
     cost of the activities for each severe repetitive loss 
     property for which grant amounts are provided if, for such 
     year--
       ``(A) the State has an approved State mitigation plan 
     meeting the requirements for hazard mitigation planning under 
     section 322 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5165) that specifies how 
     the State intends to reduce the number of severe repetitive 
     loss properties; and
       ``(B) the Director determines, after consultation with the 
     State, that the State has taken actions to reduce the number 
     of such properties.''.
       (f) National Flood Mitigation Fund.--Section 1366(b)(2) of 
     the National Flood Insurance Act of 1968 (42 U.S.C. 
     4104c(b)(2)), is amended by striking ``$1,500,000'' and 
     inserting ``7.5 percent of the available funds under this 
     section''.

     SEC. 104. FEMA AUTHORITY TO FUND MITIGATION ACTIVITIES FOR 
                   INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.

       (a) In General.--Chapter I of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4011 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 1323. GRANTS FOR REPETITIVE INSURANCE CLAIMS 
                   PROPERTIES.

       ``(a) In General.--The Director may provide funding for 
     mitigation actions that reduce flood damages to individual 
     properties for which 1 or more claim payments for losses have 
     been made under flood insurance coverage under this title, 
     but only if the Director determines that--
       ``(1) such activities are in the best interest of the 
     National Flood Insurance Fund; and
       ``(2) such activities cannot be funded under the program 
     under section 1366 because--
       ``(A) the requirements of section 1366(g) are not being met 
     by the State or community in which the property is located; 
     or
       ``(B) the State or community does not have the capacity to 
     manage such activities.
       ``(b) Priority for Worst-Case Properties.--In determining 
     the properties for which funding is to be provided under this 
     section, the Director shall consult with the States in which 
     such properties are located and provide assistance for 
     properties in the order that will result in the greatest 
     amount of savings to the National Flood Insurance Fund in the 
     shortest period of time.''.
       (b) Availability of National Flood Insurance Fund 
     Amounts.--Section 1310(a) of the National Flood Insurance Act 
     of 1968 (42 U.S.C. 4017(a)) is amended by adding at the end 
     the following:
       ``(9) for funding, not to exceed $10,000,000 in any fiscal 
     year, for mitigation actions under

[[Page 13185]]

     section 1323, except that, notwithstanding any other 
     provision of this title, amounts made available pursuant to 
     this paragraph shall not be subject to offsetting collections 
     through premium rates for flood insurance coverage under this 
     title.''.

     SEC. 105. AMENDMENTS TO ADDITIONAL COVERAGE FOR COMPLIANCE 
                   WITH LAND USE AND CONTROL MEASURES.

       (a) Compliance With Land Use and Control Measures.--Section 
     1304(b) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4011(b)) is amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``compliance'' and inserting ``implementing 
     measures that are consistent''; and
       (B) by inserting ``by the community'' after 
     ``established'';
       (2) in paragraph (2), by striking ``have flood damage in 
     which the cost of repairs equals or exceeds 50 percent of the 
     value of the structure at the time of the flood event; and'' 
     and inserting ``are substantially damaged structures;''
       (3) in paragraph (3), by striking ``compliance with land 
     use and control measures.'' and inserting ``the 
     implementation of such measures; and''; and
       (4) by inserting after paragraph (3) and before the last 
     undesignated paragraph the following:
       ``(4) properties for which an offer of mitigation 
     assistance is made under--
       ``(A) section 1366 (Flood Mitigation Assistance Program);
       ``(B) section 1368 (Repetitive Loss Priority Program and 
     Individual Priority Property Program);
       ``(C) the Hazard Mitigation Grant Program authorized under 
     section 404 of the Robert T. Stafford Disaster Assistance and 
     Emergency Relief Act (42 U.S.C. 5170c);
       ``(D) the Predisaster Hazard Mitigation Program under 
     section 203 of the Robert T. Stafford Disaster Assistance and 
     Emergency Relief Act (42 U.S.C. 5133); and
       ``(E) any programs authorized or for which funds are 
     appropriated to address any unmet needs or for which 
     supplemental funds are made available.''.
       (b) Definitions.--Section 1370(a) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4121(a)) is amended--
       (1) by striking paragraph (7) and inserting the following:
       ``(7) the term `repetitive loss structure' means a 
     structure covered by a contract for flood insurance that--
       ``(A) has incurred flood-related damage on 2 occasions, in 
     which the cost of repair, on the average, equaled or exceeded 
     25 percent of the value of the structure at the time of each 
     such flood event; and
       ``(B) at the time of the second incidence of flood-related 
     damage, the contract for flood insurance contains increased 
     cost of compliance coverage.'';
       (2) in paragraph (13), by striking ``and'' at the end;
       (3) in paragraph (14), by striking the period and inserting 
     ``; and''; and
       (4) by adding at the end the following:
       ``(15) the term `substantially damaged structure' means a 
     structure covered by a contract for flood insurance that has 
     incurred damage for which the cost of repair exceeds an 
     amount specified in any regulation promulgated by the 
     Director, or by a community ordinance, whichever is lower.''.

     SEC. 106. ACTUARIAL RATE PROPERTIES.

       (a) In General.--Section 1308 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4015) is amended by striking 
     subsection (c) and inserting the following:
       ``(c) Actuarial Rate Properties.--Subject only to the 
     limitations provided under paragraphs (1) and (2), the 
     chargeable rate shall not be less than the applicable 
     estimated risk premium rate for such area (or subdivision 
     thereof) under section 1307(a)(1) with respect to the 
     following properties:
       ``(1) Post-firm properties.--Any property the construction 
     or substantial improvement of which the Director determines 
     has been started after December 31, 1974, or started after 
     the effective date of the initial rate map published by the 
     Director under paragraph (2) of section 1360 for the area in 
     which such property is located, whichever is later, except 
     that the chargeable rate for properties under this paragraph 
     shall be subject to the limitation under subsection (e).
       ``(2) Certain leased coastal and river properties.--Any 
     property leased from the Federal Government (including 
     residential and nonresidential properties) that the Director 
     determines is located on the river-facing side of any dike, 
     levee, or other riverine flood control structure, or seaward 
     of any seawall or other coastal flood control structure.''.
       (b) Inapplicability of Annual Limitations on Premium 
     Increases.--Section 1308(e) of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4015(e)) is amended by striking 
     ``Notwithstanding'' and inserting ``Except with respect to 
     properties described under paragraph (2) or (3) of subsection 
     (c), and notwithstanding''.

     SEC. 107. GEOSPATIAL DIGITAL FLOOD HAZARD DATA.

       For the purposes of flood insurance and floodplain 
     management activities conducted pursuant to the National 
     Flood Insurance Program under the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4001 et seq.), geospatial digital 
     flood hazard data distributed by the Federal Emergency 
     Management Agency, or its designee, or the printed products 
     derived from that data, are interchangeable and legally 
     equivalent for the determination of the location of 1 in 100 
     year and 1 in 500 year flood planes, provided that all other 
     geospatial data shown on the printed product meets or exceeds 
     any accuracy standard promulgated by the Federal Emergency 
     Management Agency.

     SEC. 108. REPLACEMENT OF MOBILE HOMES ON ORIGINAL SITES.

       Section 1315 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4022) is amended by adding at the end the 
     following:
       ``(c) Replacement of Mobile Homes on Original Sites.--
       ``(1) Community participation.--The placement of any mobile 
     home on any site shall not affect the eligibility of any 
     community to participate in the flood insurance program under 
     this title and the Flood Disaster Protection Act of 1973 
     (notwithstanding that such placement may fail to comply with 
     any elevation or flood damage mitigation requirements), if--
       ``(A) such mobile home was previously located on such site;
       ``(B) such mobile home was relocated from such site because 
     of flooding that threatened or affected such site; and
       ``(C) such replacement is conducted not later than the 
     expiration of the 180-day period that begins upon the 
     subsidence (in the area of such site) of the body of water 
     that flooded to a level considered lower than flood levels.
       ``(2) Definition.--For purposes of this subsection, the 
     term `mobile home' has the meaning given such term in the law 
     of the State in which the mobile home is located.''.

     SEC. 109. REITERATION OF FEMA RESPONSIBILITY TO MAP 
                   MUDSLIDES.

       As directed in section 1360(b) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101(b)), the Director of 
     the Federal Emergency Management Agency is again directed to 
     accelerate the identification of risk zones within flood-
     prone and mudslide-prone areas, as provided by subsection 
     (a)(2) of such section 1360, in order to make known the 
     degree of hazard within each such zone at the earliest 
     possible date.

                   TITLE II--MISCELLANEOUS PROVISIONS

     SEC. 201. DEFINITIONS.

       In this title, the following definitions shall apply:
       (1) Director.--The term ``Director'' means the Director of 
     the Federal Emergency Management Agency.
       (2) Flood insurance policy.--The term ``flood insurance 
     policy'' means a flood insurance policy issued under the 
     National Flood Insurance Act of 1968 (42 U.S.C. et seq.).
       (3) Program.--The term ``Program'' means the National Flood 
     Insurance Program established under the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4001 et seq.).

     SEC. 202. SUPPLEMENTAL FORMS.

       (a) In General.--Not later than 6 months after the date of 
     enactment of this Act, the Director shall develop 
     supplemental forms to be issued in conjunction with the 
     issuance of a flood insurance policy that set forth, in 
     simple terms--
       (1) the exact coverages being purchased by a policyholder;
       (2) any exclusions from coverage that apply to the 
     coverages purchased;
       (3) an explanation, including illustrations, of how lost 
     items and damages will be valued under the policy at the time 
     of loss;
       (4) the number and dollar value of claims filed under a 
     flood insurance policy over the life of the property, and the 
     effect, under the National Flood Insurance Act of 1968 (42 
     U.S.C. 4001 et seq.), of the filing of any further claims 
     under a flood insurance policy with respect to that property; 
     and
       (5) any other information that the Director determines will 
     be helpful to policyholders in understanding flood insurance 
     coverage.
       (b) Distribution.--The forms developed under subsection (a) 
     shall be given to--
       (1) all holders of a flood insurance policy at the time of 
     purchase and renewal; and
       (2) insurance companies and agents that are authorized to 
     sell flood insurance policies.

     SEC. 203. ACKNOWLEDGEMENT FORM.

       (a) In General.--Not later than 6 months after the date of 
     enactment of this Act, the Director shall develop an 
     acknowledgement form to be signed by the purchaser of a flood 
     insurance policy that contains--
       (1) an acknowledgement that the purchaser has received a 
     copy of the standard flood insurance policy, and any forms 
     developed under section 202; and
       (2) an acknowledgement that the purchaser has been told 
     that the contents of a property or dwelling are not covered 
     under the terms of the standard flood insurance policy, and 
     that the policyholder has the option to purchase additional 
     coverage for such contents.
       (b) Distribution.--Copies of an acknowledgement form 
     executed under subsection (a) shall be made available to the 
     purchaser and the Director.

     SEC. 204. FLOOD INSURANCE CLAIMS HANDBOOK.

       (a) In General.--Not later than 6 months after the date of 
     enactment of this Act, the

[[Page 13186]]

     Director shall develop a flood insurance claims handbook that 
     contains--
       (1) a description of the procedures to be followed to file 
     a claim under the Program, including how to pursue a claim to 
     completion;
       (2) how to file supplementary claims, proof of loss, and 
     any other information relating to the filing of claims under 
     the Program; and
       (3) detailed information regarding the appeals process 
     established under section 205.
       (b) Distribution.--The handbook developed under subsection 
     (a) shall be made available to--
       (1) each insurance company and agent authorized to sell 
     flood insurance policies; and
       (2) each purchaser, at the time of purchase and renewal, of 
     a flood insurance policy, and at the time of any flood loss 
     sustained by such purchaser.

     SEC. 205. APPEAL OF DECISIONS RELATING TO FLOOD INSURANCE 
                   COVERAGE.

       Not later than 6 months after the date of enactment of this 
     Act, the Director shall, by regulation, establish an appeals 
     process through which holders of a flood insurance policy may 
     appeal the decisions, with respect to claims, proofs of loss, 
     and loss estimates relating to such flood insurance policy, 
     of--
       (1) any insurance agent or adjuster, or insurance company; 
     or
       (2) any employee or contractor of the Federal Emergency 
     Management Agency.

     SEC. 206. STUDY AND REPORT ON USE OF COST COMPLIANCE 
                   COVERAGE.

       Not later than 1 year after the date of enactment of this 
     Act, the Director of the Federal Emergency Management Agency 
     shall submit to Congress a report that sets forth--
       (1) the use of cost of compliance coverage under section 
     1304(b) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4011(b)) in connection with flood insurance policies;
       (2) any barriers to policyholders using the funds provided 
     by cost of compliance coverage under that section 1304(b) 
     under a flood insurance policy, and recommendations to 
     address those barriers; and
       (3) the steps that the Federal Emergency Management Agency 
     has taken to ensure that funds paid for cost of compliance 
     coverage under that section 1304(b) are being used to lessen 
     the burdens on all homeowners and the Program.

     SEC. 207. MINIMUM TRAINING AND EDUCATION REQUIREMENTS.

       The Director of the Federal Emergency Management Agency 
     shall, in cooperation with the insurance industry, State 
     insurance regulators, and other interested parties--
       (1) establish minimum training and education requirements 
     for all insurance agents who sell flood insurance policies; 
     and
       (2) not later than 6 months after the date of enactment of 
     this Act, publish these requirements in the Federal Register, 
     and inform insurance companies and agents of the 
     requirements.

     SEC. 208. GAO STUDY AND REPORT.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of--
       (1) the adequacy of the scope of coverage provided under 
     flood insurance policies in meeting the intended goal of 
     Congress that flood victims be restored to their pre-flood 
     conditions, and any recommendations to ensure that goal is 
     being met;
       (2) the adequacy of payments to flood victims under flood 
     insurance policies; and
       (3) the practices of the Federal Emergency Management 
     Agency and insurance adjusters in estimating losses incurred 
     during a flood, and how such practices affect the adequacy of 
     payments to flood victims.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report regarding the results of the study under 
     subsection (a).

     SEC. 209. PROSPECTIVE PAYMENT OF FLOOD INSURANCE PREMIUMS.

       Section 1308 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4015) is amended by adding at the end the 
     following:
       ``(f) Adjustment of Premium.--Notwithstanding any other 
     provision of law, if the Director determines that the holder 
     of a flood insurance policy issued under this Act is paying a 
     lower premium than is required under this section due to an 
     error in the flood plain determination, the Director may only 
     prospectively charge the higher premium rate.''.

     SEC. 210. REPORT ON CHANGES TO FEE SCHEDULE OR FEE PAYMENT 
                   ARRANGEMENTS.

       Not later than 3 months after the date of enactment of this 
     Act, the Director shall submit a report on any changes or 
     modifications made to the fee schedule or fee payment 
     arrangements between the Federal Emergency Management Agency 
     and insurance adjusters who provide services with respect to 
     flood insurance policies to--
       (1) the Committee on Banking, Housing, and Urban Affairs of 
     the Senate; and
       (2) the Committee on Financial Services of the House of 
     Representatives.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Green) and the gentleman from Massachusetts (Mr. Frank) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. Green).


                             general leave

  Mr. GREEN of Wisconsin. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on S. 2238.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. GREEN of Wisconsin. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise in strong support of S. 2238, the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act, legislation to 
reauthorize and reform the National Flood Insurance Program.
  The legislation we are considering here today is a must-do bill. 
Currently, this program is set to expire on June 30 of this year; and 
without this program, the ability to close a loan and purchase a new 
home in literally thousands of communities all across this country will 
be placed in jeopardy.
  The NFIP was established by Congress with the passage of the National 
Insurance Act of 1968. The NFIP is a Federal program enabling property 
owners in participating companies to purchase insurance as a protection 
against flood losses in exchange for State and community floodplain 
management regulations that reduce future flood damages.
  Unfortunately, one of the authors of this important legislation, the 
gentleman from Nebraska (Mr. Bereuter), is unable to be with us here 
today. However, we would be remiss if we did not recognize his tireless 
efforts on this bill. For over 14 years, the gentleman from Nebraska 
(Mr. Bereuter) has worked hard to craft legislation that would reduce 
the cost of this program to the American taxpayer. Today, repetitive-
loss properties cost the NFIP about $200 million each year. These 
properties account for only 1 percent of the currently insured 
properties across the country; yet they represent 25 to 30 percent of 
all claims paid.
  Under our current program, repetitive loss properties are eligible 
for subsidized flood insurance at rates far below the actuarial rate 
they should be paying. With the passage of this legislation, people 
living in flood-prone areas will be provided assistance to reduce their 
risk of flooding. If they choose not to reduce their risk of flooding, 
they will be required to pay higher premiums.
  In addition to reauthorizing the existing Flood Mitigation Assistance 
program through 2008, the bill establishes a new pilot program aimed at 
reducing the number of severe repetitive-loss properties and provides 
$40 million to help reach that goal. It is important to note that this 
fund will not be subject to a Federal appropriation. Instead, this 
level of funding will come from money that is transferred from the 
National Flood Insurance Fund, which is composed of policyholder 
premiums.
  S. 2238 is virtually identical to H.R. 253, the Flood Insurance 
Reform Act of 2003, authored by the gentleman from Nebraska (Mr. 
Bereuter) and passed by this House on November 20, 2003. I want to take 
this opportunity to commend the gentleman from Nebraska (Mr. Bereuter) 
for his hard work on this legislation and for his exemplary service to 
this body over the years.
  I urge my colleagues to support the passage of this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I concur in the description given by the gentleman from 
Wisconsin. I am very proud of the work that on a bipartisan basis we 
did here in this Congress. The House really generated this. The other 
body went along with our initiative. The initiative really was due to 
two Members of the House, one on each side of the aisle, the gentleman 
from Nebraska, who has already been mentioned; and the gentleman from 
Oregon (Mr. Blumenauer), who worked very well together and provided the 
leadership that we on the committee were glad to support.

[[Page 13187]]

  Mr. Speaker, as recognition of that and because of the press of other 
business, I ask unanimous consent to turn over the management of the 
remainder of this bill to the gentleman from Oregon (Mr. Blumenauer).
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. GREEN of Wisconsin. Mr. Speaker, I continue to reserve the 
balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I appreciate very much the comments that the gentleman 
from Wisconsin made and particularly highlighting the long-standing 
contribution of our friend, the gentleman from Nebraska (Mr. Bereuter) 
who I have been privileged to work with the last 6 years on this bill, 
but I know he has been working on this issue and is a recognized 
congressional expert, one of the gentleman's many areas of expertise.
  I think it is also important to note the cooperation with the 
gentleman from Ohio (Chairman Oxley), the gentleman from Massachusetts 
(Ranking Member Frank) who worked with us as we were maneuvering with 
our friends in the Senate. I think this is a better bill for the 
effort.
  We have also had a great deal of back and forth from other Members 
who are from States that have suffered from repetitive-flood loss; and 
as a result of their efforts, and the work in the Senate, I think we 
actually have a bill that provides better and broader protections than 
when we had first begun this work.
  Last but not least, I note on the floor the presence of Kyle Gilster, 
who has done outstanding work staffing this on behalf of the gentleman 
from Nebraska (Mr. Bereuter). I note that we also have Janine Benners 
who has been doing this in my office.
  Mr. Speaker, I would insert at this point in the Record the remainder 
of my comments.
  Thank you to Mr. Frank, Senator Bunning, Senator Shelby, and Senator 
Sarbanes.
  I also want to thank the staff of Representative Bereuter, Kyle 
Gilster, and Representative Frank, Jeff Riley, for their work on this 
issue.
  The National Flood Insurance Program (NFIP) is crucial and good 
example of working with local communities to reduce impact of 
disasters. Benefits economy, environment, and individual property 
values.
  NFIP started in 1968--private insurance companies suffered high 
losses and stopped offering coverage for flood damage. NFIP helps 
homeowners deal with flood losses and gives communities tools to 
prevent future flood damage. Program has already lowered flood damage 
by 25 percent below the level that would have occurred without the 
program.
  Some problems with the program: in some cases, federal flood control 
policy encourages floodplain development by financing the construction 
and repair of levees and underwriting the risk of flooding.
  FEMA was concerned about this problem during the Clinton and Bush 
administrations. Mr. Bereuter and I worked with former FEMA 
Administrator James Lee Witt to develop our proposal to fix NFIP 
problems.
  The Office of Management and Budget has pointed out that in too many 
years the program has expenses greater than its revenue from insurance 
premiums which prevents building long-term reserves to handle the costs 
of flood insurance.
  Twenty-five percent of the policyholders pay substantially subsidized 
premiums, with the Federal Treasury and other policyholders paying the 
difference.
  Losers of the NFIP are people who live in areas that require flood 
insurance, even though they do not have their property flood often, pay 
dramatically high rates.
  The program is currently self supporting from premium income. 
However, in the 1980s federal taxpayers had to make up a shortfall of 
$1.2 billion when the income from the low premiums was not enough to 
cover the flood claims. The chances of this happening again are high.
  Repetitively flooded properties are a significant strain on the NFIP.
  FEMA reports that just 1 percent of the properties account for 25 
percent of NFIP flood loss dollars. Many of these properties have 
received more in flood insurance claims payments than the building's 
value.
  Subsidizing people to live in repetitively flooded areas does not 
make sense.
  It is bad for the federal taxpayer, bad for the environment, and bad 
for the families that are continually placed in harm's way.
  Property owners are trapped in a dangerous and expensive cycle. We do 
flood victims no favors by rebuilding their homes in harm's way.
  The legislation we are considering today will avoid many of the 
injuries, deaths, and damages before they occur, and give property 
owners the option of moving to a less hazardous area.
  Our approach helps build disaster resistant communities and safe 
homes by providing mitigation assistance to communities.
  This bill has a number of benefits:
  Most importantly, it will move people out of harm's way and 
discourage newcomers from moving there. This bill will save lives by 
moving people to higher ground.
  Often overlooked, it will save the federal government millions of 
dollars in avoided flood damages. FEMA reports that mitigation and 
building standards already in place have resulted in over $1 billion 
annually in reduced flood losses. Our bill will significantly increase 
these savings by increasing funding for mitigation.
  Savings to ratepayers in the National Flood Insurance Program. 
Mitigating repetitively flooded properties will reduce the pressure to 
raise flood insurance rates. The Association of State Floodplain 
Managers estimates that avoiding just one 10 percent rate increase 
could save the 4.4 million policyholders $175 million each year.
  Finally, this bill will significantly benefit the environment. If 
property-owners choose to relocate, the land will convert to open-
space. Non-structural approaches to flood control, such as voluntary 
buyouts and restoration of natural floodplains, are often much more 
effective in controlling floods than structural approaches. Natural 
floodplains also prevent pollution problems from flooding.
  As the bill went through the process in the House and Senate, we 
worked with Members from coastal areas to make the reforms more 
sensitive to the plight of their constituents.
  I would like to highlight one change we were able to make in the 
Increased Cost of Compliance (ICC) program. The bill not specifically 
provides for use of the ICC program funds as local match monies. This 
program, created in the 1994 Flood Insurance Reform Act, uses a flood 
insurance premium surcharge to raise money for mitigation--but it 
hasn't yet functioned well.
  Freeing up these funds for use in mitigation of repetitive loss 
properties will help the affected property owners by dramatically 
reducing costs to them and will help all policy holders by stemming the 
drain on the Flood Insurance Fund from repetitive claims.
  I respectfully urge passage of the Bunning-Bereuter-Blumenauer Flood 
Insurance Reform Act of 204. This is one of the best fiscal and 
environmental opportunities for Congress this year.
  We can't stop natural hazards from threatening our communities, but 
we can try to minimize or stop them from becoming disasters, and that's 
what this bill does.
  Mr. NEY. Mr. Speaker, today, I rise in support of S. 2238, the 
``Flood Insurance Reform Act of 2004.''
  The Senate bill, in most respects, is identical to H.R. 253, which 
passed the House on November 20, 2003. The Senate bill did make some 
acceptable changes to the House-passed bill, such as a new title which 
provides new consumer protections for flood insurance policyholders. 
The Senate bill will extend the authorization of the NFIP through 
September 30, 2008, and create a temporary pilot program to address 
severe repetitive loss properties. The authorization of the NFIP is set 
to expire on June 30, 2004. This legislation, S. 2238, represents a 
continuation of this chamber's past efforts to reform the National 
Flood Insurance Program.
  Floods have been, and continue to be, one of the most destructive and 
costly natural hazards to our nation. The National Flood Insurance 
Program is a valuable tool in addressing the losses incurred throughout 
this country due to floods. It assures that businesses and families 
have access to affordable insurance that would not be available on the 
open market.
  The National Flood Insurance Program was established in 1968 with the 
passage of the National Flood Insurance Act. Prior to that time, 
insurance companies generally did not offer coverage for flood 
disasters because of the high risks involved. Today, almost 20,000 
communities participate in the national flood insurance program. More 
than 90 insurance companies sell and service flood policies. There are 
approximately $4.4 million policies covering a total of $620 billion.
  In order to participate in the program, communities must agree to 
abide by certain hazard mitigation provisions. These provisions include 
adopting building codes that require new

[[Page 13188]]

floodplain structures to be protected against flooding or elevated 
above the 100-year floodplain.
  The National Flood Insurance program is administered by the Federal 
Emergency Management Agency (FEMA). It is worth noting that on November 
25, 2002, President Bush signed into law the Homeland Security Act of 
2002 which brought FEMA under the new Department of Homeland Security.
  As many of you are aware, the NFIP reauthorization expired on 
December 31, 2002. Unfortunately, Congress adjourned without extending 
the flood insurance program. This situation was quickly remedied in the 
108th Congress and on January 13, 2003, President Bush signed into law 
a bill to reauthorize the program for one year, retroactively to 
January 1, 2003. This one-year reauthorization gave us the time 
necessary to determine how best to go about reforming the existing 
program.
  This is a good day for the National Flood Insurance Program and is a 
good day for the American tax-payers. I applaud all members from both 
chambers for reaching an agreement.
  I urge my colleagues to support this initiative.
  Mr. BEREUTER. Mr. Speaker, this Member rises today to express his 
support for S. 2238, a bill to reauthorize the National Flood Insurance 
Program (NFIP). This legislation, the Bunning-Bereuter-Blumenauer Flood 
Insurance Reform Act of 2004, passed the Senate by unanimous consent on 
June 15, 2004. The Senate bill will extend the authorization of the 
NFIP through September 30, 2008, and create a temporary pilot program 
to address severe repetitive loss properties. The authorization of the 
NFIP is set to expire on June 30, 2004. This legislation, S. 2238, 
represents a continuation of this Member's past efforts to reform the 
NFIP.
  This Senate bill, in most respects, is identical to H.R. 253, which 
passed the House on November 20, 2003. This Member introduced H.R. 253 
on January 8, 2003, along with my distinguished colleague from Oregon 
(Mr. Blumenauer). The Senate bill did make some acceptable changes to 
the House-passed bill, such as a new title which provides new consumer 
protections for flood insurance policyholders. However, this Member 
continues to adamantly oppose one change by the Senate. The Senate bill 
allows a policyholder to make an appeal, based on independent 
information, such as contractor estimates or other appraisals. This 
Member will discuss his strong opposition to this provision at the 
appropriate time in this statement.
  When it comes to expressions of appreciation, this Member first would 
like to thank the distinguished gentleman from Oregon (Mr. Blumenauer) 
who was both an original cosponsor of H.R. 253 and a tireless advocate 
for reform of the NFIP. The distinguished gentleman from Oregon and 
this Member introduced similar versions of this legislation, in both 
the 106th and 107th Congresses.
  This Member would also like to thank both the distinguished gentleman 
from Ohio (Mr. Oxley), the Chairman of the House Financial Services 
Committee, and the distinguished gentleman from Massachusetts (Mr. 
Frank) for their efforts in bringing this Senate measure to the House 
floor. This Member must also thank the distinguished junior senator 
from Kentucky (Mr. Bunning), the chairman of the Senate Banking, 
Housing and Urban Affairs Subcommittee on Economic Policy, for 
introducing S. 2238. This Member also appreciates the contributions of 
the following Senators who are very supportive of this legislation: the 
distinguished senior senator from Alabama (Mr. Shelby), the Chairman of 
the Senate Banking, Housing and Urban Affairs Committee; the 
distinguished senior senator from Maryland (Mr. Sarbanes), and the 
distinguished senior senator from Nebraska, my friend, (Mr. Hagel) 
among others.
  This Member would also like to thank the distinguished gentleman from 
Louisiana (Mr. Baker) for being a conscientious legislator who offered 
a number of provisions which ultimately were included in H.R. 253 and 
which in turn have subsequently been incorporated into S. 2238. The 
incorporated suggestions by the distinguished gentleman from Louisiana 
have made the final product a better bill.
  Finally, this Member would also like to thank all of the House and 
Senate Committee staff who have worked on this legislation. 
Specifically, this Member would like to thank Kyle Gilster, a Nebraskan 
formerly on my congressional staff who is now a key member of the staff 
of the House Financial Services, for his efforts with H.R. 253. In 
addition, this Member also appreciates the very effective work of 
Janine Benner, who is a legislative staff member for the distinguished 
gentleman from Oregon (Mr. Blumenauer).
  Mr. Speaker, today, this Member would like to organize his remaining 
comments under the following three sections:
  1. background on repetitive loss properties;
  2. contents of S. 2238; and
  3. the changes the Senate made to H.R. 253.


              1. background on repetitive loss properties

  This Member has been actively proposing specific reform provisions 
for the NFIP for over 14 years. His work on this issue soon became a 
bipartisan effort with the distinguished gentleman from Massachusetts 
(Mr. Joseph Kennedy) who is no longer serving in the House. This 
legislation, S. 2238, is primarily drawn from H.R. 253, which 
represents a culmination of my legislative efforts to reduce the 
extraordinary loss of repetitive loss properties.
  Currently, repetitive loss properties cost the NFIP about $200 
million annually. These properties while comprising approximately one 
percent of the currently insured properties, are expected to account 
for 25 to 30 percent of claims paid. For example, one home, valued at 
$114,480, has received $806,591 in flood insurance claims over an 18-
year period.
  Today, the vast majority of repetitive-loss properties are eligible 
for subsidized flood insurance at rates far below the actuarial risk 
rate they should be paying. This bill, S. 2238, would at last move the 
NFIP towards a more free-market insurance model by requiring people 
living in flood prone areas to reduce their risk of flooding or pay 
higher premiums.


                         2. contents of S. 2238

  This legislation, S. 2238, authorizes funds for both the existing 
Flood Mitigation Assistance (FMA) program and a new pilot program. This 
approach is identical to the one that was used in H.R. 253.
  FMA Program. This bill, S. 2238, uses FEMA's existing FMA program to 
mitigate repetitive loss properties. This bill authorizes up to an 
additional $40 million a year to be transferred from the National Flood 
Insurance Fund into the FMA fund through FY2008.
  Pilot Program. Under S. 2238, $40 million a year is authorized to be 
transferred from the National Flood Insurance Fund into the pilot 
program. These funds are required to be used to reduce the number of 
severe repetitive loss properties. Under this legislation, a severe 
repetitive loss property must at least meet one of the following two 
definitions:
  (i) for which 4 or more separate claims have been made, with the 
amount of each claim exceeding $5,000, and with the cumulative amount 
exceeding $20,000; or
  (ii) for which at least two claims have been made which exceed the 
value of the property.
  Using this definition, the Federal Emergency Management Agency (FEMA) 
has estimated that approximately 6,200 properties nationwide would 
qualify as a severe repetitive loss property.
  This trial pilot program, which would expire on September 30, 2009, 
addresses these properties in a simple, straightforward manner. The 
owner of a severe repetitive loss property will be charged a rate 
closer to the actuarial, risk-based rates for their national flood 
insurance policy if two conditions prevail.
  The first condition is that it is by definition a severe repetitive 
loss property. The second condition is that the owner of the real 
property must have refused a mitigation measure from a state or 
locality, such as the elevation of the structure or a buy-out of the 
property. (It is important to note that this bill preserves state and 
local decision-making.)
  If both of these conditions have been met, rates for severe 
repetitive loss properties will be increased by 50 percent. Properties 
will be subject to additional 50 percent increases for each future 
flood insurance claim exceeding $1500. However, flood insurance rates 
cannot be increased to a rate higher than the actuarial level.


                     3. Senate changes to h.r. 253

  As mentioned earlier, some constructive changes were made in S. 2238. 
However, this Member continues to strongly oppose one change made by 
the Senate. The Senate bill adds a new source of appeal which allows a 
policyholder, based on independent information, such as contractor 
estimates or other appraisals, to demonstrate either of the following: 
the purchase price under a buyout is not an accurate estimate of the 
property; or that there is an alternative eligible mitigation activity. 
This Member strongly feels that this is a bad provision.
  This provision allows a policy holder to appeal an increase in their 
flood insurance rates if they find one appraiser to make a 
determination which is favorable to them. This ``independent 
appraiser'' provision is a mile-wide opening--anybody can shop around 
and find an appraiser which will give them grounds to appeal. This 
provision will result in an unnecessary number of appeals which will 
inevitably bog down the appeals process. This Member directs FEMA to 
pass regulations that will reduce the very wide breadth of this 
provision--thus, limiting the abuse of this appeal method.

[[Page 13189]]

  This Member had conveyed to the Senate his opposition to this 
provision. Nevertheless, they still did not strike this new appeals 
criteria. Unfortunately, we have run out of time in this legislation to 
make a change since the authorization of the NFIP expires on June 30, 
2004. This Member urges his colleagues in the House to pass a separate 
bill in the immediate future to strike this new appeals criteria.
  The Senate bill, S. 2238, does make certain changes relative to the 
House bill which are very constructive. For example, a new title was 
added which creates additional consumer protections for policyholders. 
This new title was added at the suggestion of the two distinguished 
Senators from Maryland (Mr. Sarbanes and Ms. Mikulski). The impetus for 
this new title was the problems that flood insurance policy holders in 
Maryland experienced in the aftermath of the most recent hurricane. 
This Member is in full support of this change.
  This new title requires the Director to develop consumer related 
disclosure/information forms and a flood insurance claims handbook for 
policyholders. The Director must promulgate regulations outlining an 
appeals process for policyholders with respect to claims, proofs of 
loss, and loss estimates related to flood insurance policies. The 
Director must also establish minimum training and education 
requirements, in cooperation with the insurance industry, for all 
insurance agents who sell flood insurance.
  Among other changes, the Senate bill modifies the Federal/state cost 
share for mitigation projects under the existing FMA program and the 
pilot program. The changes in the Senate bill were made at the request 
of the FEMA so that it would be easier to implement the pilot program 
and the FMA program nationwide.
  This Member believes that it is important that one final public 
policy point be made. The bill, S. 2238, would reduce the amount of 
regional cost-shifting on flood insurance which is occurring among 
states and within states. The policyholders in non-repetitive loss 
areas of the country (such as in Nebraska) by their higher than 
appropriate premiums are subsidizing the policyholders in repetitive 
loss areas of the country. Flood insurance policyholders in communities 
along the Platte River across Nebraska are paying significantly more in 
flood insurance premiums than the risk warrants. For example, property 
owners in North Platte have paid $1.2 million in flood insurance 
premiums over the last 25 years, while only $26,000 has been paid out 
in claims over this time period. The Senate bill, S. 2238, would give 
FEMA the funds and the tools to mitigate repetitive loss properties 
which will result in more affordable premiums in the future for 
policyholders from non-repetitive loss areas of the country, such as in 
Nebraska.
  Mr. Speaker, in conclusion, Congress is finally acting to stop the 
very expensive treading through the water of repetitive loss after 
repetitive loss. A very impressive and diverse group of taxpayer, 
financial, and environmental associations are all in strong support of 
S. 2238. This Member would encourage the House to pass, S. 2238, the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004, as it 
is very necessary reform legislation that is long overdue.
  Mr. OSBORNE. Mr. Speaker, I rise in support of S. 2238, the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004.
  S. 2238 was originally H.R. 253 which was authored by my dear 
colleague and fellow Nebraskan, Mr. Bereuter of Nebraska, and 
cosponsored by Mr. Blumenauer of Oregon. Both Members have been strong 
advocates for reforming the National Flood Insurance program, 
administered by the Federal Emergency Management Agency, since the 
106th Congress. Mr. Bereuter has been a champion of this legislation 
for the last 14 years.
  The legislation will extend the authorization of the National Flood 
Insurance Program (NFIP) through September 30, 2008, and create a 
temporary pilot program to address severe repetitive loss properties 
(SRLPs).
  The authorization of the NFIP is set to expire on June 30, 2004.
  I support the temporary pilot program included in this important 
legislation because it will address the problem of severe repetitive 
loss properties for which many communities in my district are paying 
increased premiums.
  I have numerous communities in my district paying substantial 
premiums on properties that have not been affected by flooding since 
the beginning of the program.
  One example is North Platte, Nebraska. The community sits between the 
North and South Platte Rivers. The North and South Platte Rivers merge 
east of North Platte. While the National Flood Insurance Program has 
been in place since 1968, North Platte has paid over $1 million in 
premiums each year, but has not received more than $26 thousand in 
flood insurance claims during that time. The community has been working 
diligently with FEMA and the Nebraska Department of Natural Resources 
to reduce the cost of the National Flood Insurance premiums, but 
premiums continue to remain high.
  That is why I support S. 2238.
  S. 2238 authorizes up to $40 million a year to be transferred from 
the National Flood Insurance Fund for mitigation assistance to reduce 
the problem of SRLPs. The money in the National Flood Insurance Fund 
comes from flood insurance premiums from policyholders and would not 
need an appropriation.
  This pilot program, which would expire on September 30, 2009, 
addresses these properties in a simple, straightforward manner; the 
owner of a SRLP will be charged a rate closer to the actuarial, risk-
based rates for their national flood insurance policy if two conditions 
prevail.
  The first condition is that it is indeed by definition a SRLP. Under 
this legislation, a severe repetitive loss property must at least meet 
one of the following two definitions: Four or more separate claims have 
been made, with the amount of each claim exceeding $5,000, and with the 
cumulative amount exceeding $20,000; at least two claims have been made 
which exceed the value of the property.
  The second condition which would cause the applicability of closer to 
actuarial rates to be applied is that the owner of the real property 
must have refused a mitigation measure from a state or locality, such 
as the elevation of the structure or a buy-out of the property. If both 
of these conditions have been met, rates for SRLPs will be increased by 
50 percent.
  Properties will be subject to additional 50 percent increases for 
each subsequent flood event where claims payments exceed $1,500. 
However, flood insurance rates applied cannot be higher than the 
actuarial based NFIP rates.
  I would again like to thank Mr. Bereuter and Mr. Blumenauer for their 
tireless determination to improve the National Flood Insurance Program 
to assist those communities that have not had repetitive losses.
  Mr. GREEN of Texas. Mr. Speaker, the National Flood Insurance Program 
is literally a lifeline to thousands of my constituents, restoring 
their homes and properties after devastating floods that have become 
too common for Houston and Harris County, Texas, residents. I support 
S. 2238 on the suspension calendar today.
  There are over 172,000 homes and businesses with National Flood 
Insurance Program (NFIP) policies in Houston and Harris County, over 37 
percent of the 461,000 statewide in Texas. These federally backed NFIP 
policies are vital to our area because private insurers would not make 
flood insurance available at any kind of affordable price. H.R. 2238 
reassures residents, realtors, insurers, and lending institutions that 
this Federal backing of the NFIP will be extended by 4 more years until 
September 2008.
  The reform included in this legislation will mean major changes for 
the Houston area, which has many homes with repeat flood insurance 
claims. It is important to treat NFIP policy holders fairly because 
they may now receive FEMA buyout and mitigation offers once they have 4 
separate claims of $5,000 each (or 2 claims exceeding the value of the 
home), and if they refuse, their premiums will increase by 50 percent, 
and an addition 50 percent after each following claim of $1,500, until 
the premium equals the ``market'' premium.
  These reform provisions have a noble goal of reducing flood premiums 
for most policy holders and assisting residents who repeatedly flood. 
But asking someone to leave their home through a government buyout 
offer can be a traumatic process, especially if the buyout offer does 
not allow for a smooth relocation of the flood victim.
  After Tropical Storm Allison in Harris County in 2001, we had ``fair 
market'' buyout FEMA offers so low that people would have been unable 
to purchase another home outside of the floodplain. So after Allison, 
we had to scramble to find additional Federal, State, and local sources 
of funding to assist these people, since FEMA's policy would not allow 
for purchase offers greater than ``fair market value.'' That kind of 
uncertainty for a homeowner facing 50 percent higher insurance premiums 
for refusing a government buyout is just not fair.
  In response to these experiences, I authored a provision included in 
this bill to require FEMA to offer additional funds if ``a purchase 
offer made under [this law] is less than the cost of the homeowner-
occupant to purchase a comparable replacement dwelling outside the 
flood hazard area in the same community, the Director [of FEMA] shall 
make available an additional relocation payment to the homeowner-
occupant to apply to the difference.'' [S. 2238 Section 102(g)(4)].
  I wish to extend my thanks to my colleagues who assisted me in this 
effort, Chairman

[[Page 13190]]

Oxley, Ranking Member Frank, and Congressman Bereuter. Their 
willingness to listen to the concerns of my constituents over this 
legislation is much appreciated. Because of the efforts of Chairman 
Oxley, Ranking Member Frank, and Congressman Bereuter to ensure that 
homeowners receive a fair price for their homes, I support this 
legislation and look forward to working with them on a fair and 
efficient implementation of a reformed, National Flood Insurance 
Program.
  Mr. BLUMENAUER. Mr. Speaker, I yield back the balance of my time.
  Mr. GREEN of Wisconsin. Mr. Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Green) that the House suspend the rules 
and pass the Senate bill, S. 2238.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate bill was passed.
  A motion to reconsider was laid on the table.

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