[Congressional Record (Bound Edition), Volume 150 (2004), Part 9]
[Senate]
[Pages 12157-12169]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   FLOOD INSURANCE REFORM ACT OF 2004

  Mr. WARNER. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of Calendar 513, S. 2238.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A 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.

  There being no objection, the Senate proceeded to consider the bill 
which was reported by the Committee on Banking, Housing, and Urban 
Affairs, with amendments, as follows:
  [Strike the parts shown in black brackets and insert the parts shown 
in italic.]

                                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 ``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.

[[Page 12158]]

Sec. 203. Acknowledgement form.
Sec. 204. Flood insurance claims handbook.
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 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 3 or more separate claims payments have 
     been made under flood insurance coverage under this title, 
     with the amount of each such claim exceeding $3,000, and with 
     the cumulative amount of such claims payments exceeding 
     $15,000; 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 1 foot above Base Flood Elevation or 
     greater, if required by any local ordinance.
       ``(2) Purchase.--To purchase severe repetitive loss 
     properties, subject to subsection (f).
       ``(d) Matching Requirement.--
       ``(1) In general.--Except as provided in paragraph (2), in 
     any 1-year period 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) Standards for Mitigation Offers.--The program under 
     this section for providing 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.
       ``(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) 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.
       ``(f) Purchase Offers.--A State or community may take 
     action under subsection

[[Page 12159]]

     (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.
       ``(g) 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.
       ``(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 that the grounds 
     under subparagraph (A) exist, the third party hearing such 
     appeal shall make a determination of how much 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) and the Director shall promptly 
     reduce the chargeable risk premium rate for such property by 
     such amount; and
       ``(ii) if a final determination is made that the grounds 
     under subparagraph (A) do not exist, the Director shall 
     promptly increase 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 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.
       ``(h) 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.
       ``(i) 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 2004, 2005, 2006, 2007, and 2008, 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 
     section 1361A.
       ``(j) Termination.--The Director may not provide assistance 
     under this section to any State or community after September 
     30, 2008.''.
       (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

[[Page 12160]]

       (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 [but are located within the 100-year 
     floodplain] (the 100-year floodplain), but are located within 
     flood prone areas.''.
       (d) Funding.--Section 1367(b) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4104d(b)) is amended 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;''.
       (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 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

[[Page 12161]]

     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 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.


[[Page 12162]]

  Mr. SHELBY. Mr. President, I would first like to acknowledge the 
leadership of Senator Bunning in crafting this legislation. In 
addition, several members of the Banking Committee, from both sides of 
the aisle, are co-sponsors on S. 2238. The Banking Committee 
unanimously voted to favorably report S. 2238 on March 30, 2004. This 
has truly been a bipartisan effort.
  This is important legislation that will go a long way in bringing the 
flood insurance fund toward financial soundness, while protecting 
existing property owners. The pilot program established in Section 102 
will help to address the mitigation of severe repetitive loss 
properties. These properties, while only a small percentage of insured 
properties, constitute a large share of claims paid. FEMA estimates 
that while repetitive loss properties only account for approximately 1 
percent of all insured properties, these properties account for over 30 
percent of amounts paid in claims. In addition, most of these 
properties were constructed before the development of flood insurance 
rate maps, and are paying subsidized rates for flood insurance.
  S. 2238 provides an additional $40 million annually for mitigation 
activities. This additional funding will allow families that have lived 
through several floods and suffered substantial harm, both financial 
and emotional, to either flood-proof their home or have their home 
bought-out.
  I also want to commend Senator Sarbanes for his efforts. Title II of 
S. 2238 is largely his creation. I believe Title II will ensure that 
families displaced by floods receive adequate and timely assistance.
  The managers' amendment to S. 2238 represents several technical and 
conforming changes. First the definition of repetitive loss property is 
narrowed. This change was made to assure concerned parties that the 
pilot program would be targeted at those properties that have indeed 
suffered the greatest losses. The managers' amendment also clarifies 
the funding allocation of the additional mitigation dollars that will 
be provided under the pilot program. A more explicit allocation is 
needed to insure that those States hit hardest by flooding receive an 
adequate flow of funding. The managers' amendment also extends the 
pilot program and the National Flood Insurance Program until September 
30, 2009.
  Mr. SARBANES. Mr. President, I support the passage of S. 2238, as 
amended, and want to urge my colleagues to support this critical 
legislation which ensures the continuation of the National Flood 
Insurance Program, which covers over 4.4 million properties around the 
country. Unless we quickly act to reauthorize this program, it will 
expire at the end of this month. In addition to extending the National 
Flood Insurance Program for 5 years, this bill establishes a loss 
mitigation pilot program to help mitigate flood risks for properties 
that have been flooded numerous times.
  This bill has been drafted in a bipartisan manner, and I particularly 
want to thank Senators Bunning and Shelby for working collaboratively 
with me to craft this legislation and also for accepting my amendment 
which makes a number of administrative changes to the National Flood 
Insurance Program designed to strengthen the program and ensure that 
flood victims can fairly and adequately recover for flood losses. While 
Federal flood insurance was created almost 40 years ago to ``provide 
the necessary funds promptly to assure rehabilitation or restoration of 
damaged property to pre-flood status or to permit comparable investment 
elsewhere,'' unfortunately, the program is not working as Congress 
envisioned. Recent flooding in Maryland as a result of Hurricane Isabel 
in September 2003, showed that under the strain of a major flooding 
event, the National Flood Insurance Program was unable to withstand the 
pressure. Unfortunately, many of the 6,000 Marylanders who filed claims 
after Hurricane Isabel found the process of recovering under their 
flood insurance policies to be difficult, time-consuming and 
frustrating. Too many victims were given incomplete or inaccurate 
information or were coerced into settling claims that came nowhere near 
close to providing adequate funding for repairs.
  My amendment, as contained in this bill, ensures that policyholders 
are provided with accurate and timely information about their policies 
as well as what to do in the event of a flood. As a result of this 
legislation, FEMA will be required to establish a formal appeals 
process for complaints; disseminate a claims handbook so that families 
know exactly what to do if they are flooded; provide simple forms and 
disclosures so that all policyholders know what coverages are available 
and what coverages they are purchasing; and, establish minimum agent 
training requirements so that insurance agents, the main points of 
contact for flood victims, have a better understanding of this program. 
In addition, this bill asks the General Accounting Office of conduct a 
thorough review of the flood insurance program, with particular 
emphasis on limitations in the flood insurance policy and FEMA's 
interpretations of this policy. We need to have a detailed 
understanding of what these limitations are and what the consequences 
are of broadening coverage. As a result of these changes, I am hopeful 
that flood victims around the country will not face the same obstacles 
to receiving fair payments as Marylanders faced last year.
  In addition to the administrative changes we are making in this bill, 
I have been working with my colleague, Senator Mikulski, and FEMA to 
ensure that FEMA does all it can to improve its processes and policies 
so that flood victims can better navigate the flood insurance program 
and more fairly settle their claims. I believe that FEMA is working to 
fix those problems that were brought to its attention, and I want to 
thank Mr. Anthony Lowe, former Federal insurance administrator, and Mr. 
Trey Reid, acting insurance administrator, who now oversees the 
program, for working with me and my colleagues to go back and make sure 
that Hurricane Isabel flood victims are treated fairly. After Hurricane 
Isabel, I received numerous complaints that flood victims were 
pressured into accepting settlements far below what they consider fair, 
in addition to our findings that FEMA distributed inaccurate price 
guidelines for the costs of repairs. When confronted with these issues, 
Mr. Lowe, Mr. Reid, and FEMA staff quickly responded. Letters have now 
been sent to all flood victims who believe they were treated unfairly 
can have their claims reviewed. While I appreciate these efforts, I 
understand that there is some concern that these reviews are not being 
conducted in an independent way, and I have urged FEMA to take all 
actions to ensure that this process is fair. The process of reviewing 
these claims is a fair and necessary step in maintaining the integrity 
of the National Flood Insurance Program, and I will continue working 
with FEMA to ensure that all victims are able to have their claims 
reviewed in an unbiased manner.
  This is an important piece of legislation. In addition to the changes 
contained in my amendment, this bill will help to strengthen and 
stabilize the flood insurance program by providing $40 million a year 
to states and communities to mitigate flood risks. While the National 
Flood Insurance Program has primarily been able to cover losses through 
the premiums it collects, there have been times when it has had to 
borrow funds from the Treasury, and this is in large part due to a 
relatively small number of properties. According to FEMA, these 
repetitive loss properties account for only 1 percent of policies, but 
over 35 percent of all losses in the flood insurance program. This bill 
makes funding available so that communities can assist families who are 
stuck in a cycle of repeated flooding to get out of harm's way, and so 
that these properties are less of a drain on the National Flood 
Insurance Program.
  Once again, I thank Senators Shelby and Bunning for working with me 
in such a collaborative manner on this bill.
  Mr. NELSON of Florida. Mr. President, I commend Senators Shelby, 
Sarbanes, and Bunning for their efforts in drafting the S. 2238, the

[[Page 12163]]

Bunning/Bereuter/Blumenauer Flood Insurance Reform Act. They have 
worked with Senator Graham and me to make some important changes that 
will greatly benefit Federal flood insurance policy holders. Since 
1968, the National Flood Insurance Program has provided reasonably 
priced insurance to Americans across the country. In Florida alone, 
there are approximately 2 million flood insurance policies.
  I support this legislation and, as the former elected insurance 
commissioner of the State of Florida, appreciate its goals and purpose. 
However, I have a unique situation in Florida dealing with flood 
insurance and would like to take a few minutes to bring it to my 
colleagues' attention.
  There is a community in Gulf Country in North Florida known as Cape 
San Blas. The area has some of the most impressive, pristine beaches in 
the State. You can see the unique physical characteristics of the Cape 
quite clearly from space--it is a swath of land that juts out into the 
Gulf of Mexico.
  Most of the residents of Cape San Blas have lived there for some time 
and have seen first hand the incredible damage and awesome forces of 
nature brought to bear by hurricanes. And ere we are today, 2 weeks 
into hurricane season and a good number of the residents of the Cape 
either do not have flood insurance or have to purchase it at a very 
high price.
  Since 1983, most of Cape San Blas has been included in the Coastal 
Barrier Resources System, which prevents the Cape from receiving many 
forms of Federal assistance, most notably flood insurance. But the 
residents made due by other means, relying on the private market or, in 
some cases, simply not purchasing flood insurance because it was not a 
requirement at the time.
  Back in 1995, after Hurricane Opal tore through parts of the Florida 
panhandle, the Federal Emergency Management Agency, FEMA, determined 
its flood maps required revisions. The agency decided it would need to 
remap the area and began the process. The new maps took effect in 
November 202 and placed a large portion of the Cape and the surrounding 
area in a special flood hazard area--an area of land that has a 1 
percent chance of being flooded in any given year. A home located 
within this area has a 26 percent chance of suffering flood damage 
during the term of a 30-year mortgage.
  The special flood hazard area designation has had a devastating 
effect on the local economy for several reasons. First, under the Flood 
Disaster Protection Act of 1973 mandates flood insurance for property 
in a special flood hazard area that receives a federally backed loan. 
If a local bank writes a home loan, without Federal backing, while the 
bank may not require flood insurance, it does face a safety and 
soundness issue and possible enforcement action with federal banking 
regulators for offering high-risk loans.
  As a result of the new classification, some residents who never had 
to carry flood insurance before suddenly found it was a requirement. 
Many long-time homeowners have been forced to scramble to buy private 
flood insurance, often at very high rates. Some are also prevented from 
borrowing against their hard-earned equity, because second mortgages 
also require hard-to-obtain flood insurance. Local banks have had to 
turn away homeowners because of this.
  The new maps and classification have had a devastating effect on 
homeowners and the local economy already weakened by the closure of a 
paper mill and saddled with high rates of unemployment. With the stroke 
of a pen, FEMA radically changed the lives of thousands of residents 
and property owners in Cape San Blas. On the Cape, prior to FEMA's new 
maps, about 70 percent of the lands were not in special flood zone 
areas and financing was easily obtainable. The new maps placed 
approximately 75 percent of the Cape in a special flood hazard area and 
financing is near impossible. Even worse, the new flood maps have 
slowed the new economic engine of the Cape--tourism, construction and 
development.
  This is a clear case of a Government action adversely affecting the 
lives of citizens. It is simply unfair. There must be a way to make the 
residents whole again, and I think we have a responsibility to explore 
every possible avenue to do so. I had considered legislative remedies 
for the residents of Cape San Blas on the flood insurance bill. Yet I 
am very aware the flood insurance program is set to expire in 15 days 
and do not want to block the passage of this legislation, which is so 
critical to Florida and the Nation. But in the coming weeks, I intend 
to work with my colleagues and the Banking and Environment and Public 
Works Committees, with Congressman Allen Boyd, who represents Cape San 
Blas, and the appropriate Federal agencies to find an equitable 
solution to the problem facing the residents of Cape San Blas.
  Ms. LANDRIEU. Mr. President, I am pleased to see that the Senate will 
reauthorize the National Flood Insurance program today. This is such an 
important program for the people of Louisiana.
  If there is a theme that runs through the social and economic history 
of my State, it is water. The Mississippi River, with its great 
southern port of New Orleans, has been a center of commerce and an 
economic gateway to the east. Smaller rivers, streams, and bayous run 
throughout our parishes. More than 8,277 square miles of Louisiana are 
covered by water, nearly 16 percent. The entire southern third of my 
State could be called a giant wetland, much of it below sea level, 
including the city of New Orleans.
  Floods are a part of life in Louisiana, particularly in the southern 
part of the State. Louisiana has more than 377,000 insured properties 
under the program as of 2003. That same year the program paid nearly 
6,000 flood loss claims in Louisiana. The National Flood Insurance 
Program allows Louisianians to stay in their homes and protects them 
from the devastation nature can wreak.
  The flood program gives the housing, insurance, banking, and mortgage 
lending markets in my State greater stability. It also brings peace of 
mind to those families who need the program to protect their most 
important assets: their homes and businesses.
  However, when this reauthorization bill was reported out of the 
Banking Committee, I had deep concerns about a pilot program contained 
in the bill designed to address severe repetitive loss properties. 
These are properties that experience a lot of flooding. The Federal 
Emergency Management Agency estimates that these repetitive loss 
properties, while only making up about one percent of all the insured 
properties, cost the program $200 million annually. Some property 
owners have collected flood claims that are four or five times higher 
than the actual value of the property. They refuse to take any action 
to minimize the cost to the program and benefit from subsidized 
insurance rates.
  Under the pilot program, $40 million in funding would be available on 
an optional basis for States and communities to take steps to mitigate 
the flood damage potential on these properties. If a property owner 
receives a mitigation offer and turns it down, their flood insurance 
premiums would increase 50 percent, and would keep on increasing by 50 
percent until it reached the actuarial rate for the property. This 
provision would help prevent some of the abuse in the program.
  Louisiana has the most repetitive loss properties in the county, 
about one-third of the total number nationwide. I had concerns about 
how this pilot program would impact low income property owners in my 
State and so I put a hold on the bill. I felt that even though State 
and local communities could opt into the program, they would not have 
as much control over how the program would get funding to property 
owners that want mitigation. FEMA held all the cards.
  Let me give an example of what I mean. Under the original bill, FEMA 
would award mitigation funds based upon what it felt was in the best 
interest of the flood insurance program. I believed that this gave FEMA 
the power to overrule local determinations of what kind of flood 
mitigation to offer and what properties to mitigate.

[[Page 12164]]

For example, a local community that wanted to elevate a structure above 
the base flood elevation could be denied relief because FEMA decided 
that buyouts were in the best interest of the flood insurance program 
in order to permanently remove properties out of the flood insurance 
program altogether.
  The impact this could have on property owners could be devastating. I 
did not want to see low-income people facing a terrible choice: sell 
your property or see your rates go up. Many of these families have 
lived on this land for generations. It may flood regularly, but it is 
also home. I wanted to make sure the pilot program struck a proper 
balance between the needs of the flood insurance program and the rights 
of property owners.
  The chairman and ranking member of the Banking Committee, Senators 
Shelby and Sarbanes, and myself worked together to make changes to the 
bill that I believe have achieved this balance. The changes keep the 
pilot program in place but add safeguards requiring FEMA to pay greater 
deference to local decisions about what properties to mitigate and what 
kinds of mitigation offers are most appropriate. We added demolition 
and rebuild as an additional eligible mitigation activity under the 
bill, an option that Louisiana's flood plain managers wanted. We also 
included a funding formula that insures that Louisiana gets its fair 
share of funding under the pilot program. Under FEMA's current 
mitigation program, Louisiana only received about $1 million even 
though the State had more than $60 million in need.
  I thank Chairman Shelby and the ranking member of the Banking 
Committee, Senator Sarbanes, as well as their staffs for their 
willingness to work with me on these changes. We have made this 
important bill a better deal for local communities in my State and 
across the country.
  Mr. WARNER. My understanding is it is cleared on both sides. I ask 
unanimous consent that the amendment at the desk be agreed to, the 
committee amendments be agreed to, the bill, as amended, be read a 
third time and passed, the motion to reconsider be laid upon the table, 
and that any statements relating to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3451) was agreed to, as follows:

         (Purpose: To make technical and conforming amendments)

       On page 2, line 3, strike ``Flood Insurance Reform Act of 
     2004'' and insert ``Bunning-Bereuter-Blumenauer Flood 
     Insurance Reform Act of 2004''.
       On page 7, line 6, insert ``that decide to participate in 
     the pilot program established under this section'' after 
     ``communities''.
       On page 7, line 20, strike ``3'' and insert ``4''.
       On page 7, line 24, strike ``$3,000'' and insert 
     ``$5,000''.
       On page 7, line 26, strike ``$15,000'' and insert 
     ``$20,000''.
       On page 8, line 19, strike ``1 foot above''.
       On page 8, line 22, strike ``(f)'' and insert ``(g)''.
       On page 8, line 25, strike ``1-year period'' and insert 
     ``fiscal year''.
       On page 10, between lines 13 and 14, insert the following:
       ``(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.
       On page 10, line 14, strike ``(e)'' and insert ``(f)''.
       On page 10, line 23, insert ``, in a manner consistent with 
     the allocation formula under paragraph (5)'' after ``time''.
       On page 11, between lines 3 and 4, insert the following:
       ``(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).
       On page 11, line 4, strike ``(3)'' and insert ``(6)''.
       On page 11, line 9, strike ``(f)'' and insert ``(g)''.
       On page 13, line 3, strike ``(g)'' and insert ``(h)''.
       On page 16, line 11, strike ``historic places'' and insert 
     ``Historic Places''.
       On page 16, after line 25, insert the following:
       ``(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.
       On page 17, line 22, strike ``that the grounds'' and insert 
     ``in favor of the property owner''.
       On page 17, line 24, strike ``make a determination of how 
     much to'' and insert ``require the Director to''.
       On page 18, lines 4 through 6, strike ``and the Director 
     shall promptly reduce the chargeable risk premium rate for 
     such property by such amount'' and insert ``to the amount 
     paid prior to the offer to take action under paragraph (1) or 
     (2) of subsection (c)''.
       On page 19, line 6, strike ``Flood'' and insert ``Bunning-
     Bereuter-Blumenaur Flood''.
       On page 19, line 16, strike ``(h)'' and insert ``(i)''.
       On page 20, between lines 2 and 3, insert the following:
       ``(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.
       On page 20, line 3, strike ``(i)'' and insert ``(k)''.
       On page 20, line 7, strike ``2004,''.
       On page 20, line 8, strike ``and 2008'' and insert ``2008, 
     and 2009''.
       On page 20, line 19, strike ``section 1361A'' and insert 
     ``this section''.
       On page 20, line 20, strike ``(j)'' and insert ``(l)''.
       On page 20, line 22, strike ``2008'' and insert ``2009''.
       On page 22, line 12, strike ``(m)'' and insert ``(l)''.
       On page 22, strike line 21 and all that follows through 
     page 23, line 3, and insert the following:
       (d) Funding.--Section 1367 of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4104d) is amended--

[[Page 12165]]

       (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.''.

  The committee amendments were agreed to.
  The bill (S. 2238), as amended, was read the third time and passed, 
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-Blumenauer 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.
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

[[Page 12166]]

     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 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

[[Page 12167]]

     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 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

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     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 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.

[[Page 12169]]

       (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 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.

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