A bill to establish a homeowner mitigation loan program within the Federal Emergency Management Agency to promote pre-disaster property mitigation measures.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Property Mitigation Assistance Act 
of 2007''.

SEC. 2. HOMEOWNER MITIGATION LOAN PROGRAM.

    Section 203 of the Robert T. Stafford Disaster Assistance and 
Emergency Relief Act (42 U.S.C. 5133) is amended--
            (1) by redesignating subsection (m) as subsection (n); and
            (2) by inserting after subsection (l) the following:
    ``(m) Homeowner Mitigation Loan Program.--
            ``(1) Establishment.--The Administrator of the Federal 
        Emergency Management Agency shall establish a grant program to 
        provide assistance to States to promote pre-disaster property 
        mitigation measures within the jurisdiction of the States.
            ``(2) Application.--A State desiring a grant under this 
        subsection shall submit an application as required pursuant to 
        regulations promulgated by the Administrator under paragraph 
        (7).
            ``(3) Eligibility requirements.--In order to be eligible to 
        receive a grant under paragraph (1) a State shall have--
                    ``(A) submitted a mitigation plan under section 
                322(c);
                    ``(B) established a process for accepting and 
                processing grant and loan applications from individual 
                homeowners and business owners;
                    ``(C) established a revolving loan fund to which 
                any grant amounts received under this section shall be 
                deposited; and
                    ``(D) submitted a detailed plan for how terms and 
                conditions for loans and grants authorized under 
                paragraph (5) will be set.
            ``(4) Funding formula.--
                    ``(A) In general.--The Administrator shall allocate 
                grant amounts to eligible States under paragraph (1) 
                according to a formula based on the following factors:
                            ``(i) The extent and nature of the 
                        potential hazards to property in the State.
                            ``(ii) The level and degree of risk of 
                        potential hazards or natural disasters 
                        confronted by the State.
                            ``(iii) The number of properties at risk in 
                        the event that a hazard or natural disaster 
                        should occur in the State.
                            ``(iv) The amount of prior property damages 
                        incurred by the State during any previous 
                        hazard or natural disaster.
                            ``(v) Any available data on the future risk 
                        of occurrence of any hazard or natural disaster 
                        in a State.
                    ``(B) Baseline amount.--Any formula developed by 
                the Administrator under subparagraph (A), shall ensure 
                that each eligible State shall, at a minimum, receive 
                an amount equal to not less than $500,000.
                    ``(C) Matching requirement.--To be eligible to 
                receive any grant funds under this subsection, a State 
                shall contribute matching non-Federal funds in an 
                amount equal to not less than 10 percent of the total 
                amount of the grant.
            ``(5) Eligible activities.--
                    ``(A) In general.--A grant under this subsection 
                may be used by a State to carry out grant and lending 
                functions as authorized under this paragraph.
                    ``(B) Revolving loans and grants to homeowners and 
                businesses.--
                            ``(i) Authority of states.--Each State is 
                        authorized to make from any revolving loan fund 
                        established pursuant to paragraph (3)(C) grants 
                        or loans from such fund to assist individual 
                        homeowners and businesses in undertaking pre-
                        disaster property mitigation measures.
                            ``(ii) Determination of the state.--No 
                        loans shall be provided under this paragraph 
                        unless a State determines that--
                                    ``(I) there is reasonable assurance 
                                of repayment of the loan; and
                                    ``(II) the amount of the loan, 
                                together with other funds available to 
                                the property owner, is adequate to 
                                assure the purposes for which the loan 
                                is made.
                            ``(iii) Grant and loan requirements.--
                                    ``(I) Grants.--A State may make 
                                grants for elevation and other pre-
                                disaster property mitigation measures 
                                to homeowners with household incomes of 
                                less than 50 percent of area median 
                                income.
                                    ``(II) Loans.--A State may make--
                                            ``(aa) low-interest loans 
                                        for elevation and other pre-
                                        disaster property mitigation 
                                        measures to homeowners with 
                                        household incomes of less than 
                                        120 percent of area median 
                                        income; and
                                            ``(bb) loans for elevation 
                                        and other pre-disaster property 
                                        mitigation measures to 
                                        homeowners with household 
                                        incomes of greater than 120 
                                        percent of area median income 
                                        or any other property owner, 
                                        including business owners.
                                    ``(III) Maximum grant and loan 
                                amounts.--
                                            ``(aa) In general.--Each 
                                        State shall establish maximum 
                                        grant and loan amounts for 
                                        elevation and other pre-
                                        disaster property mitigation 
                                        measures under subclause (II).
                                            ``(bb) Considerations.--In 
                                        establishing the grant and loan 
                                        amounts under item (aa), each 
                                        State shall consider the 
                                        following:

                                                    ``(AA) The degree 
                                                to which such amounts 
                                                will maximize 
                                                mitigation efforts.

                                                    ``(BB) The ability 
                                                of such amounts to 
                                                allow a homeowner to 
                                                properly and 
                                                effectively undertake 
                                                mitigation activities.

                                    ``(IV) Interest rate.--For purposes 
                                of this paragraph, each State shall 
                                develop a sliding scale mechanism for 
                                determining the rate of interest to 
                                charge homeowners who apply for loans 
                                under this program based on their 
                                income level.
                                    ``(V) No compounding.--Interest on 
                                the outstanding principal balance of 
                                any loan under this paragraph shall not 
                                compound.
                                    ``(VI) Balance due.--
                                            ``(aa) In general.--The 
                                        principal of any loan made 
                                        under this paragraph, including 
                                        any interest accrued on such 
                                        principal, shall not be due and 
                                        payable before the period set 
                                        forth in subclause (VII)(bb) 
                                        unless the real property 
                                        securing such loan is sold or 
                                        transferred.
                                            ``(bb) Deposit of balance 
                                        due.--If the event described in 
                                        item (aa) occurs, the principal 
                                        of any loan made under this 
                                        paragraph, including any 
                                        interest accrued on such 
                                        principal, shall immediately 
                                        become due and payable to the 
                                        State.
                                    ``(VII) Repayment period.--All 
                                loans made under this paragraph shall 
                                be repayable--
                                            ``(aa) on a monthly basis; 
                                        and
                                            ``(bb) within a period of 
                                        not more than 15 years.
                                    ``(VIII) No penalty for 
                                prepayment.--Any homeowner or other 
                                property owner who receives a loan 
                                under this section may repay the loan 
                                in full, without penalty, by lump sum 
                                or by installment payments, at any time 
                                prior to the loan becoming due and 
                                payable.
                                    ``(IX) Credits.--The interest on, 
                                and the proceeds from the collection or 
                                redemption of, any loan obligations 
                                held by the revolving loan fund of a 
                                State shall be credited to and form a 
                                part of such fund.
                                    ``(X) Subordination permitted.--Any 
                                loan made under this section will be 
                                subordinated to any refinancing of the 
                                first mortgage, any preexisting 
                                subordinate financing, any purchase 
                                money mortgage, or subordinated for any 
                                other reason, as determined by the 
                                State.
                    ``(C) Application process.--
                            ``(i) In general.--An individual homeowner 
                        or business desiring a loan or grant under this 
                        paragraph shall submit an application at such 
                        time, in such manner, and accompanied by such 
                        information as the State may reasonably 
                        require.
                            ``(ii) Required showing by homeowners.--An 
                        individual homeowner desiring a loan or grant 
                        under this paragraph shall submit to the State 
                        proof that such homeowner has insured the 
                        property on which any funds awarded under this 
                        paragraph will be used to undertake pre-
                        disaster property mitigation measures, 
                        including proving that such homeowner has flood 
                        insurance on such property if the pre-disaster 
                        mitigation measure to be undertaken are being 
                        done to lower the risk of loss from a flood.
                            ``(iii) State responsibility.--Each State 
                        receiving a grant under this subsection shall 
                        establish a process wherein not later than 60 
                        days after the receipt of an application for a 
                        loan or grant submitted by a homeowner or 
                        business under clause (i), the State issues a 
                        determination as to whether or not such 
                        application is approved. In making such 
                        determination that State shall examine if the 
                        proposed mitigation project in the application 
                        satisfies the requirements of this paragraph, 
                        including whether--
                                    ``(I) the homeowner or business is 
                                located in an area at risk of hazard or 
                                natural disaster;
                                    ``(II) the mitigation project is an 
                                eligible activity for purposes of such 
                                loan or grant; and
                                    ``(III) the cost of the mitigation 
                                project is reasonable.
                    ``(D) Consultation with localities.--Each State 
                receiving a grant under this subsection shall develop a 
                process by which such State will consult with local and 
                municipal governments as to each project proposed to be 
                funded by a loan or grant under this paragraph.
            ``(6) Prohibition on use of funds for community wide 
        mitigation activities.--None of the amounts made available 
        under this subsection may be used for community wide mitigation 
        activities.
            ``(7) Permissible designees.--A State receiving a grant 
        under this subsection may designate a State housing finance 
        agency or any other State agency, office, or entity with 
        experience in maintaining grant and loan programs to--
                    ``(A) apply for a grant under this subsection;
                    ``(B) receive and distribute grant funds awarded 
                under this subsection in accordance with the 
                requirements of this subsection; and
                    ``(C) perform any other administrative duties 
                related to the activities authorized by this 
                subsection.
            ``(8) Rulemaking.--Not later than 6 months after the date 
        of enactment of the Property Mitigation Assistance Act of 2007, 
        the Administrator shall promulgate regulations implementing the 
        provisions of this subsection.
            ``(9) Report to congress.--The Administrator shall, on 
        annual basis, report to Congress on the activities authorized 
        by this subsection.
            ``(10) Definitions.--As used in this subsection:
                    ``(A) Low-interest loan.--The term `low-interest 
                loan' means a loan that carries a simple annual 
                percentage rate that shall be determined in the 
                discretion of the State, but that shall, at minimum, be 
                less than the prime rate of interest.
                    ``(B) Median income.--The term `median income' 
                means, with respect to an area, the unadjusted median 
                family income for the area, as determined and published 
                annually by the Secretary of Housing and Urban 
                Development.
                    ``(C) Other pre-disaster property mitigation 
                measures.--The term `other pre-disaster property 
                mitigation measures' includes--
                            ``(i) activities such as the addition of 
                        storm shutters, hurricane clips, and safe 
                        rooms;
                            ``(ii) small elevation projects, such as 
                        the elevation of an electrical or heating 
                        system; and
                            ``(iii) any other activity the 
                        Administrator, State, or local government 
                        believes will mitigate the risks of future 
                        hazards and natural disasters.
                    ``(D) Prime rate of interest.--The term `prime rate 
                of interest' means the target federal funds rate as 
                determined by the Federal Open Markets Committee of the 
                Federal Reserve System plus 300 basis points.
                    ``(E) Property mitigation measures related to 
                elevation.--The term `property mitigation measures 
                related to elevation' means the elevation of a home.
                    ``(F) State.--The term `State' means any State of 
                the United States, the District of Columbia, the 
                Commonwealth of Puerto Rico, the Commonwealth of the 
                Northern Mariana Islands, American Samoa, Guam, each of 
                the United States Virgin Islands, and any territory or 
                possession of the United States.
            ``(11) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $200,000,000 for each of fiscal years 2008 through 2013.''.

Summary: Property Mitigation Assistance Act of 2007 - Amends the Robert T. Stafford Disaster Assistance and Emergency Relief Act to direct the Administrator of the Federal Emergency Management Agency (FEMA) to establish a grant program to provide assistance to states to promote pre-disaster property mitigation measures within their jurisdictions. Requires a state, to be eligible for assistance, to have: (1) submitted a mitigation plan. (2) established a process for accepting and processing grant and loan applications from individual homeowners and business owners. (3) established a revolving loan fund to which any grant amounts received under this Act shall be deposited. And (4) submitted a detailed plan for how terms and conditions for authorized loans and grants will be set. Directs the Administrator to allocate grant amounts to eligible states according to a formula based on specified factors, including the nature and extent of potential hazards to property in the state, the number of properties at risk in the event that a hazard or natural disaster should occur, the amount of prior property damage incurred by the state during any previous hazard or natural disaster, and any available data on the future risk of occurrence of any hazard or natural disaster in a state. Sets forth provisions regarding baseline amounts for eligible states and matching requirements. Authorizes each state to make grants or loans to assist individual homeowners and businesses in undertaking pre-disaster property mitigation measures from a revolving loan fund established under this Act.