To restore the financial solvency of the national flood insurance program, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Flood Insurance Program 
Commitment to Policyholders and Reform Act of 2005''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the amount of the flood insurance claims resulting from 
        Hurricane Katrina and Hurricane Rita will likely exceed the 
        aggregate amount of all claims previously paid in the history 
        of the national flood insurance program, and will require an 
        increase in the program's borrowing authority;
            (2) flood insurance policyholders have a legitimate 
        expectation that they will receive fair and timely compensation 
        for losses covered under their policies;
            (3) substantial flooding has occurred, and will likely 
        occur again, outside of the areas designated as the 100-year 
        floodplain;
            (4) to adequately and correctly assess potential flood 
        damage and losses in all areas on the United States, the 
        national flood insurance program will need to update its flood 
        maps with the latest technology;
            (5) the maximum coverage limits for flood insurance 
        policies should be increased to reflect inflation and the 
        increased cost of housing;
            (6) significant reforms to the national flood insurance 
        program required in the Bunning-Bereuter-Blumenauer Flood 
        Insurance Reform Act of 2004 have yet to be implemented; and
            (7) despite reforms required in the Bunning-Bereuter-
        Blumenauer Flood Insurance Reform Act of 2004, the national 
        flood insurance program requires a modernized and updated 
        administrative model to ensure that the people of the United 
        States have continued access to flood insurance.
    (b) Purposes.--The purposes of this Act are--
            (1) to protect the integrity of the national flood 
        insurance program by fully funding existing legal obligations 
        expected by existing policyholders who have paid policy 
        premiums in return for flood insurance coverage;
            (2) to increase incentives for homeowners and communities 
        to participate in the national flood insurance program and to 
        improve oversight to ensure full participation in the program 
        for owners of properties for which such participation is 
        mandatory;
            (3) to increase awareness of homeowners of flood risks and 
        improve the quality of information regarding such risks 
        provided to homeowners; and
            (4) to better mitigate future flood damage risks through a 
        combination of enhanced protective measures, property 
        elevation, and buyouts of flood-prone properties.

SEC. 3. STUDY REGARDING MANDATORY PURCHASE REQUIREMENT FOR 500-YEAR 
              FLOODPLAIN AND REPORTS REGARDING FLOOD MAP MODERNIZATION.

    (a) Study Regarding Mandatory Purchase Requirement for 500-Year 
Floodplain.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study regarding the impact, 
        effectiveness, and feasibility of amending the provisions of 
        the Flood Disaster Protection Act of 1973 regarding the 
        properties that are subject to the mandatory flood insurance 
        coverage purchase requirements under such Act to extend such 
        requirements to all properties located in the 500-year 
        floodplain.
            (2) Issues.--The study under this subsection shall assess--
                    (A) the regulatory, financial and economic impacts 
                of extending such requirements on the costs of 
                homeownership, the actuarial soundness of the national 
                flood insurance program, the Federal Emergency 
                Management Agency, local communities, insurance 
                companies, and local land use;
                    (B) the effectiveness of extending such 
                requirements in protecting homeowners from financial 
                loss and in protecting the financial soundness of the 
                national flood insurance program, and the effectiveness 
                of extending such requirements in comparison with 
                providing for more effective enforcement of existing 
                mandatory flood insurance purchase requirements;
                    (C) the feasibility of extending such requirements 
                taking into consideration the need for identifying and 
                mapping the 500-year floodplain;
                    (D) any liability on the part of lenders to comply 
                with or enforce such extended requirements;
                    (E) any burdens on building officials and flood 
                plain managers to implement such requirements in the 
                expanded area;
                    (F) any increased burden on the Federal Emergency 
                Management Agency to make determinations on exemptions 
                to the floodplain and approval of local decisions;
                    (G) the effects of extending such requirements on 
                existing policy holders of flood insurance coverage for 
                properties located in the 100-year floodplain, 
                including the effects on continued compliance and 
                premium rates; and
                    (H) the effects of extending such requirements on 
                the ability of homeowners to make renovations to their 
                homes.
            (3) Report.--The Comptroller General shall submit a report 
        to the Congress regarding the results and conclusions of the 
        study under this subsection not later than the expiration of 
        the 6-month period beginning on the date of the enactment of 
        this Act.
    (b) Annual Flood Map Modernization Reports and Certification of 
Completion.--
            (1) In general.--During the period that ends upon the 
        completion by the Director of the Federal Emergency Management 
        Agency of the updating and modernization of all floodplain 
        areas and flood-risk zones, the Director shall submit a report 
        annually to the Congress describing the extent to which such 
        updating and modernization has been completed. Upon the 
        completion of such updating, the Director shall submit to the 
        Congress, and cause to be published in the Federal Register, a 
        report certifying such completion.
            (2) Timing.--The first report under this subsection shall 
        be submitted not later than June 30, 2006, and successive 
        reports required under this subsection during the period 
        referred to in paragraph (1) shall be submitted not later than 
        June 30 of each year during such period.

SEC. 4. ENFORCEMENT.

    Paragraph (5) of section 102(f) of the Flood Disaster Protection 
Act of 1973 (42 U.S.C. 4012a) is amended--
            (1) by striking ``$350'' and inserting ``$2,000''; and
            (2) by striking the last sentence.

SEC. 5. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 REFORM ACT.

    (a) Appeals Process.--As directed in section 205 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
note), the Director of the Federal Emergency Management Agency is again 
directed to, not later than 90 days after the date of the enactment of 
this Act, 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 as required by such section.
    (b) Minimum Training and Education Requirements.--The Director of 
the Federal Emergency Management Agency is directed to enforce the 
minimum training and education requirements for all insurance agents 
who sell flood insurance policies that have been established under the 
notice published September 1, 2005 (70 Fed. Reg. 52117) pursuant to 
section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform 
Act of 2004 (42 U.S.C. 4011 note).
    (c) Mitigation Programs.--Not later than the expiration of the 30-
day period beginning on the date of the enactment of this Act, the 
Director of the Federal Emergency Management Agency shall issue 
regulations necessary to implement the amendments made by sections 102, 
103, 104, and 105 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act of 2004 (118 Stat. 714 et seq.).
    (d) Report.--Not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act, the Director of the 
Federal Emergency Management Agency shall submit a report to the 
Congress describing the implementation of each provision of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public 
Law 108-264) and identifying each regulation, order, notice, and other 
material issued by the Director in implementing each such provision.

SEC. 6. MAXIMUM COVERAGE LIMITS.

    Subsection (b) of section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013(b)) is amended--
            (1) in paragraph (2), by striking ``$250,000'' and 
        inserting ``$335,500'';
            (2) in paragraph (3), by striking ``$100,000'' and 
        inserting ``$135,000''; and
            (3) in paragraph (4), by striking ``$500,000'' each place 
        such term appears and inserting ``$670,700''.

SEC. 7. COVERAGE FOR ADDITIONAL LIVING EXPENSES AND BUSINESS 
              INTERRUPTION.

    Subsection (b) of section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(6) in the case of any residential property, each renewal 
        or new contract for flood insurance coverage shall provide not 
        less than $1,000 aggregate liability per dwelling unit for any 
        necessary increases in living expenses incurred by the insured 
        when losses from a flood make the residence unfit to live in, 
        which coverage shall be available only at chargeable rates that 
        are not less than the estimated premium rates for such coverage 
        determined in accordance with section 1307(a)(1);
            ``(7) in the case of any residential property, coverage for 
        additional living expenses described in paragraph (6) shall be 
        made available to every insured upon renewal and every 
        applicant in excess of the limits provided in paragraph (6) in 
        such amounts and at such rates as the Director shall establish, 
        except that such chargeable rates shall not be less than the 
        estimated premium rates for such coverage determined in 
        accordance with section 1307(a)(1); and
            ``(8) in the case of any commercial property, optional 
        coverage for losses resulting from any partial or total 
        interruption of the insured's business caused by damage to, or 
        loss of, such property from a flood shall be made available to 
        every insured upon renewal and every applicant, except that--
                    ``(A) for purposes of such coverage, losses shall 
                be determined based on the profits the covered business 
                would have earned, based on previous financial records, 
                had the flood not occurred; and
                    ``(B) such coverage shall be made available only at 
                chargeable rates that are not less than the estimated 
                premium rates for such coverage determined in 
                accordance with section 1307(a)(1).''.

SEC. 8. INCREASE IN BORROWING AUTHORITY.

    (a) Borrowing Authority.--The first sentence of subsection (a) of 
section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4016(a)), as amended by the National Flood Insurance Program Enhanced 
Borrowing Authority Act of 2005 (Public Law 109-65; 119 Stat. 1998), is 
amended by striking ``$3,500,000,000'' and inserting 
``$22,000,000,000''.
    (b) FEMA Report.--Not later than the expiration of the 6-month 
period beginning on the date of the enactment of this Act, the Director 
of the Federal Emergency Management Agency shall submit a report to the 
Congress setting forth a plan for repaying any amounts borrowed 
pursuant to increase in borrowing authority authorized under the 
amendments made by subsection (a).

SEC. 9. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, AND POLICY 
              LANGUAGE.

    Not later than the expiration of the 3-month period beginning on 
the date of the enactment of this Act, the Director of the Federal 
Emergency Management Agency shall--
            (1) issue regulations, and revise any materials made 
        available by such Agency, to clarify the applicability of 
        replacement cost coverage under the national flood insurance 
        program;
            (2) revise any regulations, forms, notices, guidance, and 
        publications relating to the full cost of repair or replacement 
        under the replacement cost coverage to more clearly describe 
        such coverage to flood insurance policyholders and information 
        to be provided by such policyholders relating to such coverage, 
        and to avoid providing misleading information to such 
        policyholders; and
            (3) revise the language in standard flood insurance 
        policies under such program regarding rating and coverage 
        descriptions in a manner that is consistent with language used 
        widely in other homeowners and property and casualty insurance 
        policies, including such language regarding classification of 
        buildings, basements, crawl spaces, detached garages, 
        enclosures below elevated buildings, and replacement costs.

SEC. 10. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE PROGRAM.

    Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4027) is amended--
            (1) in the section heading, by striking ``REPORT TO THE 
        PRESIDENT'' and inserting ``REPORTS'';
            (2) in subsection (a), by striking ``In General'' and 
        inserting ``Biennial Report to President'' ; and
            (3) by adding at the end the following new subsection:
    ``(c) Semiannual Reports to Congress on Financial Status.--Not 
later than June 30 and December 31 of each year, the Director shall 
submit a report to the Congress regarding the financial status of the 
national flood insurance program under this title. Each such report 
shall describe the financial status of the National Flood Insurance 
Fund and current and projected levels of claims, premium receipts, 
expenses, and borrowing under the program.''.

SEC. 11. NOTICE OF AVAILABILITY OF FLOOD INSURANCE IN RESPA GOOD FAITH 
              ESTIMATE.

    Subsection (c) of section 5 of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by adding at the 
end the following new sentence: ``Each such good faith estimate shall 
include a conspicuous statement that flood insurance coverage for 
residential real estate is generally available under the National Flood 
Insurance Program whether or not the real estate is located in an area 
having special flood hazards and that, to obtain such coverage, a home 
owner or purchaser should contact a hazard insurance provider.''.

SEC. 12. ELIGIBILITY OF PROPERTY DEMOLITION AND REBUILDING FOR 
              MITIGATION ASSISTANCE PROGRAM.

    Subparagraph (B) of section 1366(e)(5) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4104c(e)(5)(B)) is amended by 
inserting before the semicolon at the end the following: ``, or the 
demolition and rebuilding of structures located in such areas to at 
least Base Flood Elevation or any higher elevation required by any 
local ordinance''.

SEC. 13. AUTHORIZATION OF ADDITIONAL FEMA STAFF.

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

Summary: National Flood Insurance Program Commitment to Policyholders and Reform Act of 2005 - Directs the Comptroller General to study and report to Congress on whether the mandatory flood insurance coverage purchase requirements of the Flood Disaster Protection Act of 1973 should extend to properties located in the 500-year floodplain. Requires the Director of the Federal Emergency Management Agency (FEMA) to report annually to Congress on the extent to which updating and modernization of all floodplain areas and flood-risk zones has been completed. Amends the Flood Disaster Protection Act of 1973 to: (1) increase from $350 to $2,000 the civil monetary penalty for mortgage lender failures to require flood insurance. And (2) eliminate the $100,000 cap on the total amount of such penalties assessed against any single regulated lending institution or enterprise during any calendar year. Requires the FEMA Director to: (1) establish an appeals process through which holders of a flood insurance policy may appeal decisions on claims, proofs of loss, and loss estimates relating to such flood insurance policy. (2) enforce the minimum training and education requirements for insurance agents who sell certain flood insurance policies. (3) issue regulations to implement specified requirements of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004. And (4) identify for Congress each regulation, order, notice, and other material issued by the Director to implement each provision of such Act. Amends the National Flood Insurance Act of 1968 to increase the maximum flood insurance coverage limits for residential property. Prescribes coverage of additional living expenses and business interruption. Increases from $3.5 billion to $22 billion the borrowing authority vested in the Director. Requires the Director to report to Congress a plan for repaying any amounts borrowed pursuant to such increase. Instructs the Director to: (1) issue regulations and revise materials to clarify replacement cost coverage under the national flood insurance program. And (2) revise regulations, forms, notices, guidance, and publications regarding the full cost of repair or replacement under the replacement cost coverage to more clearly describe such coverage and to avoid providing misleading information to policyholders. Requires the Director to report semi-annually to Congress on the financial status of the national flood insurance program. Amends the Real Estate Settlement Procedures Act of 1974 to require a good faith estimate to include a conspicuous statement that flood insurance coverage for residential real estate is generally available under the National Flood Insurance Program whether or not the real estate is located in an area having special flood hazards and that, to obtain such coverage, a home owner or purchaser should contact a hazard insurance provider. Amends the National Flood Insurance Act of 1968 to include among eligible mitigation plan activities the demolition and rebuilding of structures located in areas having special flood hazards to at least Base Flood Elevation or any higher elevation required by any local ordinance. Authorizes the Director to employ additional FEMA staff.