To amend the National Flood Insurance Act of 1968 to provide for identification, mitigation, and purchase of properties insured under the national flood insurance program that suffer repetitive losses.

Summary: Flood Loss Mitigation Act of 2001 - Amends the National Flood Insurance Act of 1968 to authorize the Director of the Federal Emergency Management Agency to: (1) carry out mitigation activities that reduce flood damages to qualified repetitive loss structures; and (2) purchase such structures, but only for public or open space use that is consistent with sound land management and use policies.Requires the Director to determine for each fiscal year the portion of amounts in the National Flood Insurance Fund attributable to savings from such activities and purchases, which shall be available for such activities and purchases in that fiscal year. Allows the Director, after determining that 75 percent of such existing qualified repetitive loss structures have been provided mitigation that sufficiently reduces the risk of losses from flooding or have been purchased, to use up to 75 percent of the amount reserved for such activities and purchases for the costs of mapping activities.Allows the Director, in cases of such structures whose owners refused purchase or mitigation offers: (1) to deny the provision of new flood insurance coverage and to cancel existing coverage; or (2) to increase the chargeable risk premium rate for new coverage to an amount that is not more than the applicable estimated risk premium rate. Allows the Director to deny or cancel existing coverage for properties for which fraudulent claims have been made. Permits appeals by owners aggrieved by any such determinations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Flood Loss Mitigation Act of 2001''.

SEC. 2. MITIGATION FOR AND PURCHASE OF CERTAIN REPETITIVE LOSS 
              STRUCTURES.

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

  ``mitigation for and purchase of certain repetitive loss structures

    ``Sec. 1362. (a) Authority.--To the extent amounts are made 
available for use under this section, the Director may, subject to the 
limitations of this section--
            ``(1) carry out mitigation activities that reduce flood 
        damages to qualified repetitive loss structures (as such term 
        is defined in subsection (e)); and
            ``(2) purchase qualified repetitive loss structures, but 
        only for public or open space use that is consistent with sound 
        land management and use policies.
    ``(b) Limitations.--The Director shall establish limitations on the 
use of amounts made available under this section for mitigation and 
purchase of structures, which shall--
            ``(1) be designed to encourage owners of structures to 
        maintain participation in the national flood insurance program; 
        and
            ``(2) include limitations that prohibit use of such amounts 
        for mitigation or purchase of any qualified repetitive loss 
        structure if--
                    ``(A) as a result of such action, the owner of the 
                structure will not be able to purchase a replacement 
                residence;
                    ``(B) any of the flooding that resulted in 
                designation of the structure as a qualified repetitive 
                loss structure was a result (in whole or in part) of 
                third party development;
                    ``(C) such action will interfere with, impair, or 
                disrupt the preservation or maintenance of historically 
                or architecturally significant properties or areas or 
                identifiable neighborhoods or areas of cultural 
                cohesiveness;
                    ``(D) in purchasing the structure, 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; or
                    ``(E) the Director otherwise determines, in the 
                discretion of the Director, that amounts under this 
                section should not be used for mitigation or purchase 
                of such structure.
    ``(c) Priority for Worst-Case Properties.--In determining the 
properties for which to take action under this section, the Director 
shall give priority to qualified repetitive loss structures on the 
basis of the amount of losses to the National Flood Insurance Fund that 
such structures have caused or will cause.
    ``(d) Borrowing.--
            ``(1) Issuance of obligations.--Subject to the provisions 
        of this subsection, the Director may issue and sell such notes 
        or other obligations to the Secretary of the Treasury as the 
        Director determines are necessary to provide funds to carry out 
        this section.
            ``(2) Terms and conditions.--Obligations under this 
        subsection shall be issued in the forms and denominations, 
        bearing the maturities, and subject to the terms and conditions 
        that the Secretary of the Treasury may prescribe.
            ``(3) Notification to congress.--At least 25 days before 
        the issuance or sale of a note or other obligation under 
        paragraph (1), the Director shall notify, in writing, the 
        Senate and the House of Representatives of the intention of 
        such issuance or sale and the dollar amount of such notes or 
        obligations.
            ``(4) Purchase of obligations.--The Secretary of the 
        Treasury shall purchase any obligations issued under this 
        subsection. For such purpose, the Secretary of the Treasury may 
        use as a public debt transaction the proceeds from the sale of 
        any securities issued under chapter 31 of title 31. The 
        purposes for which securities may be issued under such chapter 
        are extended to include any purchase of obligations issued 
        under this subsection.
            ``(5) Limitation on amount.--The Secretary of the Treasury 
        may not at any time purchase any obligations under this 
        subsection if the purchase would increase the aggregate 
        principal amount of the outstanding holdings of obligations 
        under this subsection by the Secretary to an amount greater 
        than $300,000,000.
            ``(6) Resale authority.--The Secretary of the Treasury may 
        sell any obligations issued under this subsection at the times 
        and prices and upon the terms and conditions that the Secretary 
        of the Treasury shall determine.
            ``(7) Treatment.--All purchases, redemptions, and sales of 
        obligations under this subsection by the Secretary of the 
        Treasury shall be treated as public debt transactions of the 
        United States.
    ``(e) Qualified Repetitive Loss Structure.--For purposes of this 
section (and sections 1310(g) and 1316(b)), the term `qualified 
repetitive loss structure' means a structure that has incurred such 
flood-related damage as the Director shall, by regulation, provide in 
accordance with the purposes of such sections.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated for costs of activities under this section $100,000,000 
for fiscal year 2002, $75,000,000 for fiscal year 2003, $50,000,000 for 
fiscal year 2004, and $25,000,000 for fiscal year 2005.''.

SEC. 3. TREATMENT OF SAVINGS.

    Section 1310 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4017) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (7), by striking ``and'' at the 
                end;
                    (B) in paragraph (8), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(9) for use under subsection (g) of this section.''; and
            (2) by adding at the end the following new subsection:
    ``(g) Use of Mitigation Savings.--
            ``(1) Determination.--For each fiscal year, the Director 
        shall make a determination of the portion of the amounts in the 
        fund that are attributable to savings from mitigation 
        activities and purchases under section 1362 of qualified 
        repetitive loss structures (as such term is defined in 
        subsection (e) of such section).
            ``(2) Use for mitigation.--In each fiscal year, an amount 
        in the fund equal to the amount determined under paragraph (1) 
        of this subsection shall be available (in accordance with 
        subsection (f)) only for mitigation activities for, and 
        purchase of, qualified repetitive loss structures under section 
        1362, except as provided in paragraph (3).
            ``(3) Use for mapping.--After a determination by the 
        Director that 75 percent of the number of qualified repetitive 
        loss structures that existed upon the enactment of the Flood 
        Loss Mitigation Act of 2001 have been provided mitigation that 
        sufficiently reduces the risk of losses from flooding, or have 
        been purchased for public or open space use that is consistent 
        with sound land management and use policies, the Director may 
        use up to 75 percent of the amount reserved in each fiscal year 
        under paragraph (2) of this subsection for costs of mapping 
        activities under section 1360.''.

SEC. 4. INELIGIBILITY FOR NATIONAL FLOOD INSURANCE PROGRAM.

    Section 1316 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4023) is amended--
            (1) by striking the section heading and inserting the 
        following:

          ``prohibition of coverage for certain properties'';

            (2) by inserting ``(a) Properties in Violation of State or 
        Local Law.--'' after ``1316.''; and
            (3) by adding at the end the following new subsections:
    ``(b) Qualified Repetitive Loss Structures.--In the case of a 
qualified repetitive loss structure (as such term is defined in section 
1362(e)) that was the subject of an offer to purchase or to provide 
mitigation activities funded under section 1362 that was refused by the 
owner of the property, the Director may--
            ``(1) deny the provision of any new flood insurance 
        coverage under this title for such property and may cancel any 
        existing coverage for such property; or
            ``(2) notwithstanding section 1308(e) or any other 
        provision of this title, increase the chargeable risk premium 
        rate for any new flood insurance coverage under this title for 
        such property to an amount that is not more than the applicable 
        estimated risk premium rate for the property under section 
        1307(a)(1).
    ``(c) Properties for Which Fraudulent Claims Have Been Made.--The 
Director may deny the provision of any new flood insurance coverage 
under this title, and may cancel any existing coverage, for a property 
if the Director determines that the owner of the property has made 
fraudulent claims for losses to the property under coverage provided 
under this title.
    ``(d) Appeals.--Any owner of a property who is aggrieved by a 
determination of the Director under subsection (b) or (c) may appeal 
such determination 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. The determination made on appeal by such 
third party shall considered a final determination of the Director for 
purposes of review under chapter 7 of title 5, United States Code.''.