IB 

Union Calendar No. 152

108TH CONGRESS 

1ST SESSION H. R. 253

[Report No. 108–266] 

To amend the National Flood Insurance Act of 1968 to reduce losses to 

properties for which repetitive flood insurance claim payments have been 

made. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2003

Mr. BEREUTER (for himself and Mr. BLUMENAUER) introduced the following 

bill; which was referred to the Committee on Financial Services 

SEPTEMBER 5, 2003

Additional sponsors: Mr. PETRI, Mr. FROST, and Mr. TERRY

SEPTEMBER 5, 2003 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on January 8, 2003] 

A BILL

To amend the National Flood Insurance Act of 1968 to 

reduce losses to properties for which repetitive flood insurance claim payments have been made.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Two Floods and You 

3 Are Out of the Taxpayers’ Pocket Act of 2003’’. 

4 SEC. 2. CONGRESSIONAL FINDINGS. 

5 The Congress finds that—

6 (1) the national flood insurance program (A) 

7 identifies the flood risk, (B) provides flood risk infor8 mation to the public, (C) encourages State and local 

9 governments to make appropriate land use adjust10 ments to constrict the development of land which is 

11 exposed to flood damage and minimize damage caused 

12 by flood losses, and (D) makes flood insurance avail13 able on a nationwide basis that would otherwise not 

14 be available, to accelerate recovery from floods, miti15 gate future losses, save lives, and reduce the personal 

16 and national costs of flood disasters; 

17 (2) the national flood insurance program insures 

18 approximately 4,400,000 policyholders; 

19 (3) approximately 48,000 properties currently 

20 insured under the program have experienced, within 

21 a 10-year period, two or more flood losses where each 

22 such loss exceeds the amount $1,000; 

23 (4) approximately 10,000 of these repetitive-loss 

24 properties have experienced either two or three losses 

25 that cumulatively exceed building value or four or 

26 more losses, each exceeding $1,000; 
3

1 (5) repetitive-loss properties constitute a signifi2 cant drain on the resources of the national flood in3 surance program, costing about $200,000,000 annu4 ally; 

5 (6) repetitive-loss properties comprise approxi6 mately one percent of currently insured properties but 

7 are expected to account for 25 to 30 percent of claims 

8 losses; 

9 (7) the vast majority of repetitive-loss properties 

10 were built before local community implementation of 

11 floodplain management standards under the program 

12 and thus are eligible for subsidized flood insurance; 

13 (8) while some property owners take advantage 

14 of the program allowing subsidized flood insurance 

15 without requiring mitigation action, others are 

16 trapped in a vicious cycle of suffering flooding, then 

17 repairing flood damage, then suffering flooding, with18 out the means to mitigate losses or move out of harm’s 

19 way; 

20 (9) mitigation of repetitive-loss properties 

21 through buyouts, elevations, relocations, or flood22 proofing will produce savings for policyholders under 

23 the program and for Federal taxpayers through re24 duced flood insurance losses and reduced Federal dis25 aster assistance; 
4

1 (10) a strategy of making mitigation offers 

2 aimed at high-priority repetitive-loss properties and 

3 shifting more of the burden of recovery costs to prop4 erty owners who choose to remain vulnerable to repet5 itive flood damage can encourage property owners to 

6 take appropriate actions that reduce loss of life and 

7 property damage and benefit the financial soundness 

8 of the program; and 

9 (11) the method for addressing repetitive-loss 

10 properties should be flexible enough to take into con11 sideration legitimate circumstances that may prevent 

12 an owner from taking a mitigation action. 

13 SEC. 3. EXTENSION OF PROGRAM AND CONSOLIDATION OF 

14 AUTHORIZATIONS. 

15 The National Flood Insurance Act of 1968 is amended 

16 as follows: 

17 (1) BORROWING AUTHORITY.—In the first sen18 tence of section 1309(a) (42 U.S.C. 4016(a)), by strik19 ing ‘‘through December’’ and all that follows through 

20 ‘‘, and’’ and inserting the following: ‘‘through the date 

21 specified in section 1319, and’’. 

22 (2) AUTHORITY FOR CONTRACTS.—In section 

23 1319 (42 U.S.C. 4026), by striking ‘‘after’’ and all 

24 that follows and inserting ‘‘after September 30, 

25 2008.’’.
5

1 (3) EMERGENCY IMPLEMENTATION.—In section 

2 1336(a) (42 U.S.C. 4056(a)), by striking ‘‘during the 

3 period’’ and all that follows through ‘‘in accordance’’ 

4 and inserting ‘‘during the period ending on the date 

5 specified in section 1319, in accordance’’. 

6 (4) AUTHORIZATION OF APPROPRIATIONS FOR

7 STUDIES.—In section 1376(c) (42 U.S.C. 4127(c)), by 

8 striking ‘‘through’’ and all that follows and inserting 

9 the following: ‘‘through the date specified in section 

10 1319, for studies under this title.’’. 

11 SEC. 4. ESTABLISHMENT OF PILOT PROGRAM FOR MITIGA12 TION OF SEVERE REPETITIVE LOSS PROP13 ERTIES. 

14 (a) IN GENERAL.—The National Flood Insurance Act 

15 of 1968 is amended by inserting after section 1361 (42 

16 U.S.C. 4102) the following new section: 

17 ‘‘PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE

18 LOSS PROPERTIES

19 ‘‘SEC. 1362. (a) AUTHORITY.—To the extent amounts 

20 are made available for use under this section, the Director 

21 may, subject to the limitations of this section, provide fi22 nancial assistance to States and communities for taking ac23 tions with respect to severe repetitive loss properties (as 

24 such term is defined in subsection (b)) to mitigate flood 

25 damage to such properties and losses to the National Flood 

26 Insurance Fund from such properties. 
6

1 ‘‘(b) SEVERE REPETITIVE LOSS PROPERTY.—For pur2 poses of this section, the term ‘severe repetitive loss prop3 erty’ has the following meaning: 

4 ‘‘(1) SINGLE-FAMILY PROPERTIES.—In the case 

5 of a property consisting of one to four residences, such 

6 term means a property that—

7 ‘‘(A) is covered under a contract for flood 

8 insurance made available under this title; and 

9 ‘‘(B) has incurred flood-related damage—

10 ‘‘(i) for which four or more separate 

11 claims payments have been made under 

12 flood insurance coverage under this title be13 fore the date of the enactment of the Two 

14 Floods and You Are Out of the Taxpayers’ 

15 Pocket Act of 2003, with the amount of each 

16 such claim exceeding $5,000, and with the 

17 cumulative amount of such claims pay18 ments exceeding $20,000; 

19 ‘‘(ii) for which four or more separate 

20 claims payments have been made under 

21 flood insurance coverage under this title 

22 after the date of the enactment of the Two 

23 Floods and You Are Out of the Taxpayers’ 

24 Pocket Act of 2003, with the amount of each 

25 such claim exceeding $3,000, and with the 
7

1 cumulative amount of such claims pay2 ments exceeding $15,000; or 

3 ‘‘(iii) for which at least two separate 

4 claims payments have been made under 

5 such coverage, with the cumulative amount 

6 of such claims exceeding the value of the 

7 property. 

8 ‘‘(2) MULTIFAMILY PROPERTIES.—In the case of 

9 a property consisting of five or more residences, such 

10 term shall have such meaning as the Director shall by 

11 regulation provide. 

12 ‘‘(c) ELIGIBLE ACTIVITIES.—Amounts provided under 

13 this section to a State or community may be used only for 

14 the following activities: 

15 ‘‘(1) MITIGATION ACTIVITIES.—To carry out 

16 mitigation activities that reduce flood damages to se17 vere repetitive loss properties, including elevation, re18 location, demolition, and floodproofing of structures, 

19 and minor physical localized flood control projects. 

20 ‘‘(2) PURCHASE.—To purchase severe repetitive 

21 loss properties, subject to subsection (f). 

22 ‘‘(d) MATCHING REQUIREMENT.—

23 ‘‘(1) IN GENERAL.—Except as provided in para24 graph (2), the Director may not provide assistance 

25 under this section to a State or community in an 
8

1 amount exceeding 3 times the amount that the State 

2 or community certifies, as the Director shall require, 

3 that the State or community will contribute from 

4 non-Federal funds for carrying out the eligible activi5 ties to be funded with such assistance amounts. 

6 ‘‘(2) WAIVER.—

7 ‘‘(A) AUTHORITY.—Subject to subparagraph 

8 (B), the Director may waive the limitation 

9 under paragraph (1) for any State, and for the 

10 communities located in that State, with respect 

11 to a year, if, for such year—

12 ‘‘(i) 5 percent or more of the total 

13 number of severe repetitive loss properties 

14 in the United States are located in such 

15 State; and 

16 ‘‘(ii) the State submits a plan to the 

17 Director specifying how the State intends to 

18 reduce the number of severe repetitive loss 

19 properties and the Director determines, 

20 after consultation with State and technical 

21 experts, that the State has taken actions to 

22 reduce the number of such properties. 

23 ‘‘(B) LIMITATION.—In each waiver under 

24 subparagraph (A), the Director may waive the 

25 limitation under paragraph (1) only to the ex-
9

1 tent that the State or community involved is re2 quired to contribute, for each severe repetitive 

3 loss property for which grant amounts are pro4 vided, not less than 10 percent of the cost of the 

5 activities for such properties that are to be fund6 ed with grant amounts. 

7 ‘‘(3) NON-FEDERAL FUNDS.—For purposes of 

8 this subsection, the term ‘non-Federal funds’ includes 

9 State or local agency funds, in-kind contributions, 

10 any salary paid to staff to carry out the eligible ac11 tivities of the recipient, the value of the time and 

12 services contributed by volunteers to carry out such 

13 activities (at a rate determined by the Director), and 

14 the value of any donated material or building and the 

15 value of any lease on a building. 

16 ‘‘(e) STANDARDS FOR MITIGATION OFFERS.—The pro17 gram under this section for providing assistance for eligible 

18 activities for severe repetitive loss properties shall be subject 

19 to the following limitations: 

20 ‘‘(1) PRIORITY.—In determining the properties 

21 for which to provide assistance for eligible activities 

22 under subsection (c), the Director shall provide assist23 ance for properties in the order that will result in the 

24 greatest amount of savings to the National Flood In25 surance Fund in the shortest period of time. 
10

1 ‘‘(2) OFFERS.—The Director shall provide assist2 ance in a manner that permits States and commu3 nities to make offers to owners of severe repetitive loss 

4 properties to take eligible activities under subsection 

5 (c) as soon as is practicable. 

6 ‘‘(3) NOTICE.—Upon making an offer to provide 

7 assistance with respect to a property for any eligible 

8 activity under subsection (c), the State or community 

9 shall notify each holder of a recorded interest on the 

10 property of such offer and activity. 

11 ‘‘(f) PURCHASE OFFERS.—A State or community may 

12 take action under subsection (c)(2) to purchase a severe re13 petitive loss property only if the following requirements are 

14 met: 

15 ‘‘(1) USE OF PROPERTY.—The State or commu16 nity enters into an agreement with the Director that 

17 provides assurances that the property purchased will 

18 be used in a manner that is consistent with the re19 quirements of clauses (i) and (ii) of section 

20 404(b)(2)(B) of the Robert T. Stafford Disaster Relief 

21 and Emergency Assistance Act (42 U.S.C. 

22 5170c(b)(2)(B)) for properties acquired, accepted, or 

23 from which a structure will be removed pursuant to 

24 a project provided property acquisition and relocation 

25 assistance under such section 404(b).
11

1 ‘‘(2) PURCHASE PRICE.—The amount of pur2 chase offer is not less than the greatest of—

3 ‘‘(A) the amount of the original purchase 

4 price of the property, when purchased by the 

5 holder of the current policy of flood insurance 

6 under this title;

7 ‘‘(B) the total amount owed, at the time the 

8 offer to purchase is made, under any loan se9 cured by a recorded interest on the property; and 

10 ‘‘(C) an amount equal to the fair market 

11 value of the property immediately before the 

12 most recent flood event affecting the property. 

13 ‘‘(g) INCREASE TO ACTUARIAL RATES IN CASES OF

14 REFUSAL TO MITIGATE.—

15 ‘‘(1) IN GENERAL.—In any case in which the 

16 owner of a severe repetitive loss property refuses an 

17 offer to take action under paragraph (1) or (2) of sub18 section (c) with respect to such property, the Director 

19 shall—

20 ‘‘(A) notify each holder of a recorded inter21 est on the property of such refusal; and 

22 ‘‘(B) increase the chargeable risk premium 

23 rate for flood insurance coverage under this title 

24 for the property to an amount equal to the appli25 cable estimated risk premium rate for such area 
12

1 (or subdivision thereof) under section 1307(a)(1) 

2 and apply appropriate loss deductibles. 

3 ‘‘(2) APPEALS.—

4 ‘‘(A) IN GENERAL.—Any owner of a severe 

5 repetitive loss property may appeal a determina6 tion of the Director to take action under para7 graph (1)(B) with respect to such property, 

8 based only upon the following grounds: 

9 ‘‘(i) As a result of such action, the 

10 owner of the property will not be able to 

11 purchase a replacement primary residence 

12 of comparable value and that is function13 ally equivalent. 

14 ‘‘(ii) As a result of such action, the 

15 preservation or maintenance of any pre16 historic or historic district, site, building, 

17 structure, or object included in, or eligible 

18 for inclusion in, the National Register of 

19 historic places will be interfered with, im20 paired, or disrupted. 

21 ‘‘(iii) The flooding that resulted in the 

22 flood insurance claims described in sub23 section (b)(2) for the property resulted from 

24 significant actions by a third party in vio-
13

1 lation of Federal, State, or local law, ordi2 nance, or regulation. 

3 ‘‘(iv) In purchasing the property, the 

4 owner relied upon flood insurance rate 

5 maps of the Federal Emergency Manage6 ment Agency that were current at the time 

7 and did not indicate that the property was 

8 located in an area having special flood haz9 ards. 

10 ‘‘(B) PROCEDURE.—An appeal under this 

11 paragraph of a determination of the Director 

12 shall be made by filing, with the Director, a re13 quest for an appeal within 90 days after receiv14 ing notice of such determination. Upon receiving 

15 the request, the Director shall select, from a list 

16 of independent third parties compiled by the Di17 rector for such purpose, a party to hear such ap18 peal. Within 90 days after filing of the request 

19 for the appeal, such third party shall review the 

20 determination of the Director and shall set aside 

21 such determination if the third party determines 

22 that the grounds under subparagraph (A) exist. 

23 During the pendency of an appeal under this 

24 paragraph, the Director shall stay the applica-
14

1 bility of the rates established pursuant to para2 graph (1). 

3 ‘‘(C) EFFECT OF FINAL DETERMINATION.—

4 In an appeal under this paragraph—

5 ‘‘(i) if a final determination is made 

6 that the grounds under subparagraph (A) 

7 exist, the third party hearing such appeal 

8 shall make a determination of how much to 

9 reduce the chargeable risk premium rate for 

10 flood insurance coverage for the property in11 volved in the appeal from the amount re12 quired under paragraph (1) and the Direc13 tor shall promptly reduce the chargeable 

14 risk premium rate for such property by 

15 such amount; and 

16 ‘‘(ii) if a final determination is made 

17 that the grounds under subparagraph (A) 

18 do not exist, the Director shall promptly in19 crease the chargeable risk premium rate for 

20 such property to the amount established 

21 pursuant to paragraph (1) and shall collect 

22 from the property owner the amount nec23 essary to cover the stay of the applicability 

24 of such increased rates during the pendency 

25 of the appeal.
15

1 ‘‘(D) COSTS.—If the third party hearing an 

2 appeal under this paragraph is compensated for 

3 such service, the costs of such compensation shall 

4 be borne—

5 ‘‘(i) by the owner of the property re6 questing the appeal, if the final determina7 tion in the appeal is that the grounds under 

8 subparagraph (A) do not exist; and 

9 ‘‘(ii) by the National Flood Insurance 

10 Fund, if such final determination is that 

11 the grounds under subparagraph (A) do 

12 exist. 

13 ‘‘(E) REPORT.—Not later than 6 months 

14 after the date of the enactment of the Two Floods 

15 and You Are Out of the Taxpayers’ Pocket Act 

16 of 2003, the Director shall submit a report to the 

17 House of Representatives and the Senate describ18 ing the rules, procedures, and administration for 

19 appeals under this paragraph. 

20 ‘‘(h) DISCRETIONARY ACTIONS IN CASES OF FRAUDU21 LENT CLAIMS.—If the Director determines that a fraudu22 lent claim was made under flood insurance coverage under 

23 this title for a severe repetitive loss property, the Director 

24 may—
16

1 ‘‘(1) cancel the policy and deny the provision to 

2 such policyholder of any new flood insurance coverage 

3 under this title for the property; or 

4 ‘‘(2) refuse to renew the policy with such policy5 holder upon expiration and deny the provision of any 

6 new flood insurance coverage under this title to such 

7 policyholder for the property. 

8 ‘‘(i) FUNDING.—Pursuant to section 1310(a)(8), the 

9 Director may use amounts from the National Flood Insur10 ance Fund to provide assistance under this section in each 

11 of fiscal years 2004, 2005, 2006, 2007, and 2008, except 

12 that the amount so used in each such fiscal year may not 

13 exceed $40,000,000 and shall remain available until ex14 pended. Notwithstanding any other provision of this title, 

15 amounts made available pursuant to this subsection shall 

16 not be subject to offsetting collections through premium 

17 rates for flood insurance coverage under this title. 

18 ‘‘(j) TERMINATION.—The Director may not provide as19 sistance under this section to any State or community after 

20 September 30, 2008.’’. 

21 (b) AVAILABILITY OF NATIONAL FLOOD INSURANCE

22 FUND AMOUNTS.—Section 1310(a) of the National Flood 

23 Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended—

24 (1) in paragraph (7), by striking ‘‘and’’ at the 

25 end; and 
17

1 (2) by striking paragraph (8) and inserting the 

2 following new paragraph: 

3 ‘‘(8) for financial assistance under section 1362 

4 to States and communities for taking actions under 

5 such section with respect to severe repetitive loss prop6 erties, but only to the extent provided in section 

7 1362(i); and’’. 

8 SEC. 5. ENHANCED AUTHORITY IN FLOOD MITIGATION AS9 SISTANCE PROGRAM. 

10 (a) MITIGATION ASSISTANCE FOR REPETITIVE CLAIMS

11 PROPERTIES.—Section 1366(e) of the National Flood In12 surance Act of 1968 (42 U.S.C. 4104c) is amended—

13 (1) by striking paragraph (4) and inserting the 

14 following new paragraph: 

15 ‘‘(4) STANDARD FOR ASSISTANCE.—In providing 

16 grants under this subsection for mitigation activities, 

17 the Director shall give first priority for funding to re18 petitive claims properties, or to such subsets of such 

19 properties as the Director may establish pursuant to 

20 subsection (n)(2), that the Director determines are the 

21 most cost-effective for the taxpayers of the United 

22 States, are in the best interests of the National Flood 

23 Insurance Fund, and for which matching amounts 

24 under subsection (f) are available.’’; and 
18

1 (2) by adding at the end the following new para2 graph: 

3 ‘‘(6) NOTICE.—Upon making an offer to conduct 

4 any eligible mitigation activity under paragraph (5) 

5 with respect to a repetitive claims property or a se6 vere repetitive loss property (as such term is defined 

7 in section 1362(b)) using amounts provided under 

8 this section, the State or community shall notify each 

9 holder of a recorded interest on the property of such 

10 offer and activity.’’. 

11 (b) LIMITATIONS ON PROPERTY ACQUISITION.—Sec12 tion 1366(e)(5)(C) of the National Flood Insurance Act of 

13 1968 (42 U.S.C. 4104c(e)(5)(C)) is amended by striking 

14 ‘‘for public use, as the Director determines is consistent with 

15 sound land management and use in such area’’ and insert16 ing the following: ‘‘except that amounts provided under this 

17 section may not be used for acquisition of any property un18 less—

19 ‘‘(i) the State or community enters 

20 into an agreement with the Director that 

21 provides assurances that the property pur22 chased will be used in a manner that is 

23 consistent with the requirements of clauses 

24 (i) and (ii) of section 404(b)(2)(B) of the 

25 Robert T. Stafford Disaster Relief and
19

1 Emergency Assistance Act (42 U.S.C. 

2 5170c(b)(2)(B)) for properties acquired, ac3 cepted, or from which a structure will be re4 moved pursuant to a project provided prop5 erty acquisition and relocation assistance 

6 under such section 404(b); and 

7 ‘‘(ii) the amount of purchase offer is 

8 not less than the greatest of—

9 ‘‘(I) the amount of the original 

10 purchase price of the property, when 

11 purchased by the holder of the current 

12 policy of flood insurance under this 

13 title; 

14 ‘‘(II) the total amount owed, at 

15 the time the offer to purchase is made, 

16 under any loan secured by a recorded 

17 interest on the property; and 

18 ‘‘(III) an amount equal to the fair 

19 market value of the property imme20 diately before the most recent flood 

21 event affecting the property’’. 

22 (c) WAIVER OF LIMITATIONS ON ASSISTANCE.—Sec23 tion 1366(f) of the National Flood Insurance Act of 1968 

24 (42 U.S.C. 4104c(f)) is amended by striking paragraph (3) 

25 and inserting the following new paragraph: 
20

1 ‘‘(3) WAIVER.—The Director may waive the dol2 lar amount limitations under paragraphs (1) and (2) 

3 for any State or community—

4 ‘‘(A) for any 5-year period when a major 

5 disaster or emergency declared by the President 

6 (pursuant to the Robert T. Stafford Disaster Re7 lief and Emergency Assistance Act (42 U.S.C. 

8 5121 et seq.)) as a result of flood conditions is 

9 in effect with respect to areas in the State or 

10 community; or 

11 ‘‘(B) whenever the Director determines that 

12 repetitive claims properties are located within 

13 such State or community and that waiver of the 

14 cost limitations is cost-effective and in the best 

15 interests of the National Flood Insurance 

16 Fund.’’. 

17 (d) PENALTIES FOR REFUSAL TO MITIGATE AND

18 FRAUDULENT CLAIMS.—Section 1366 of the National Flood 

19 Insurance Act of 1968 (42 U.S.C. 4104c) is amended—

20 (1) by striking subsection (k); 

21 (2) by redesignating subsection (j) as subsection 

22 (l); and 

23 (3) by inserting after subsection (i) the following 

24 new subsections: 
21

1 ‘‘(j) INCREASE TO ACTUARIAL RATES IN CASES OF RE2 FUSAL TO MITIGATE.—

3 ‘‘(1) IN GENERAL.—In any case in which the 

4 owner of a repetitive claims property refuses an offer 

5 of a State or community to conduct, with respect to 

6 such property, mitigation activities under subsection 

7 (e) under a mitigation plan approved by the Director, 

8 the Director shall—

9 ‘‘(A) notify each holder of a recorded inter10 est on the property of such refusal; and 

11 ‘‘(B) increase the chargeable risk premium 

12 rate for flood insurance coverage under this title 

13 for the property to an amount equal to the appli14 cable estimated risk premium rate for such area 

15 (or subdivision thereof) under section 1307(a)(1) 

16 and apply appropriate loss deductibles. 

17 ‘‘(2) APPEALS.—

18 ‘‘(A) MITIGATION ACTIONS.—Any owner of 

19 a repetitive claims property may appeal a deter20 mination of the Director to take action under 

21 paragraph (1)(B) with respect to such property, 

22 based only upon the following grounds: 

23 ‘‘(i) As a result of such action, the 

24 owner of the property will not be able to 

25 purchase a replacement primary residence 
22

1 of comparable value and that is function2 ally equivalent. 

3 ‘‘(ii) As a result of such action, the 

4 preservation or maintenance of any pre5 historic or historic district, site, building, 

6 structure, or object included in, or eligible 

7 for inclusion in, the National Register of 

8 historic places will be interfered with, im9 paired, or disrupted. 

10 ‘‘(iii) The flooding that resulted in the 

11 flood insurance claims payments described 

12 in subsection (n)(2) for the property re13 sulted from significant actions by a third 

14 party in violation of Federal, State, or local 

15 law, ordinance, or regulation. 

16 ‘‘(iv) In purchasing the property, the 

17 owner relied upon flood insurance rate 

18 maps of the Federal Emergency Manage19 ment Agency that were current at the time 

20 and did not indicate that the property was 

21 located in an area having special flood haz22 ards. 

23 ‘‘(B) PROCEDURE.—An appeal under this 

24 paragraph of a determination of the Director 

25 shall be made by filing, with the Director, a re-
23

1 quest for an appeal within 90 days after receiv2 ing notice of such determination. Upon receiving 

3 the request, the Director shall select, from a list 

4 of independent third parties compiled by the Di5 rector for such purpose, a party to hear such ap6 peal. Within 90 days after filing of the request 

7 for the appeal, such third party shall review the 

8 determination of the Director and shall set aside 

9 such determination if the third party determines 

10 that the grounds under subparagraph (A) exist. 

11 During the pendency of an appeal under this 

12 paragraph, the Director shall stay the applica13 bility of the rates established pursuant to para14 graph (1). 

15 ‘‘(C) EFFECT OF FINAL DETERMINATION.—

16 In an appeal under this paragraph—

17 ‘‘(i) if a final determination is made 

18 that the grounds under subparagraph (A) 

19 exist, the third party hearing such appeal 

20 shall make a determination of how much to 

21 reduce the chargeable risk premium rate for 

22 flood insurance coverage for the property in23 volved in the appeal from the amount re24 quired under paragraph (1) and the Direc25 tor shall promptly reduce the chargeable 
24

1 risk premium rate for such property by 

2 such amount; and 

3 ‘‘(ii) if a final determination is made 

4 that the grounds under subparagraph (A) 

5 do not exist, the Director shall promptly in6 crease the chargeable risk premium rate for 

7 such property to the amount established 

8 pursuant to paragraph (1) and shall collect 

9 from the property owner the amount nec10 essary to cover the stay of the applicability 

11 of such increased rates during the pendency 

12 of the appeal. 

13 ‘‘(D) COSTS.—If the third party hearing an 

14 appeal under this paragraph is compensated for 

15 such service, the costs of such compensation shall 

16 be borne—

17 ‘‘(i) by the owner of the property re18 questing the appeal, if the final determina19 tion in the appeal is that the grounds under 

20 subparagraph (A) do not exist; and 

21 ‘‘(ii) by the National Flood Mitigation 

22 Fund, if such final determination is that 

23 the grounds under subparagraph (A) do 

24 exist.
25

1 ‘‘(E) REPORT.—Not later than 6 months 

2 after the date of the enactment of the Two Floods 

3 and You Are Out of the Taxpayers’ Pocket Act 

4 of 2003, the Director shall submit a report to the 

5 House of Representatives and the Senate describ6 ing the rules, procedures, and administration for 

7 appeals under this paragraph, which shall be 

8 submitted together with the report required 

9 under section 1362(g)(2)(E). 

10 ‘‘(k) DISCRETIONARY ACTIONS IN CASES OF FRAUDU11 LENT CLAIMS.—If the Director determines that a fraudu12 lent claim was made under flood insurance coverage under 

13 this title for a repetitive claims property, the Director 

14 may—

15 ‘‘(1) cancel the policy and deny the provision to 

16 such policyholder of any new flood insurance coverage 

17 under this title for the property; or 

18 ‘‘(2) refuse to renew the policy with such policy19 holder upon expiration and deny the provision of any 

20 new flood insurance coverage under this title to such 

21 policyholder for the property.’’. 

22 (e) COORDINATION WITH STATES AND COMMU23 NITIES.—Section 1366 of the National Flood Insurance Act 

24 of 1968 (42 U.S.C. 4104c) is amended by adding at the 

25 end the following new subsection: 
26

1 ‘‘(m) COORDINATION WITH STATES AND COMMU2 NITIES.—The Director shall, in consultation and coordina3 tion with States and communities: 

4 ‘‘(1) IDENTIFICATION OF REPETITIVE CLAIMS

5 PROPERTIES.—Identify repetitive claims properties 

6 and properties at risk of becoming repetitive claims 

7 properties. 

8 ‘‘(2) MANAGEMENT OF 100-YEAR FLOODPLAIN.—

9 Take such actions as are appropriate to encourage 

10 and improve participation of owners of properties 

11 that are not located in areas having special flood haz12 ards but are located within the 100-year floodplain.’’. 

13 (f) DEFINITION OF REPETITIVE CLAIMS PROPERTY.—

14 Section 1366 of the National Flood Insurance Act of 1968 

15 (42 U.S.C. 4104c) is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(n) DEFINITIONS.—For purposes of this section: 

18 ‘‘(1) COMMUNITY.—The term ‘community’ 

19 means—

20 ‘‘(A) a political subdivision that—

21 ‘‘(i) has zoning and building code ju22 risdiction over a particular area having 

23 special flood hazards; and 

24 ‘‘(ii) is participating in the national 

25 flood insurance program; or 
27

1 ‘‘(B) a political subdivision of a State, or 

2 other authority, that is designated to develop and 

3 administer a mitigation plan and manage 

4 projects by political subdivisions, all of which 

5 meet the requirements of subparagraph (A). 

6 ‘‘(2) REPETITIVE CLAIMS PROPERTY.—The term 

7 ‘repetitive claims property’ means, without regard to 

8 the ownership of the property, a property with respect 

9 to which claim payments for losses have been made—

10 ‘‘(A) under flood insurance coverage under 

11 this title, 

12 ‘‘(B) on more than one occasion within a 

13 10-year period, and 

14 ‘‘(C) for which the cumulative value of the 

15 amount by which such claims exceed the amount 

16 of any applicable deductible under such coverage 

17 is $5,000 or more, 

18 The Director may, by regulation, further define sub19 sets of repetitive claims properties for purposes of sub20 section (e)(4).’’. 

21 (g) FUNDING.—Section 1367(b) of the National Flood 

22 Insurance Act of 1968 (42 U.S.C. 4104d(b)) is amended—

23 (1) by redesignating paragraphs (2) and (3) as 

24 paragraphs (3) and (4); and 
28

1 (2) by striking paragraph (1) and inserting the 

2 following new paragraphs: 

3 ‘‘(1) in each fiscal year, amounts from the Na4 tional Flood Insurance Fund not exceeding 

5 $20,000,000; 

6 ‘‘(2) in each of fiscal years 2004, 2005, 2006, 

7 2007, and 2008, in addition to amounts under para8 graph (1), amounts from the National Flood Insur9 ance Fund not exceeding $40,000,000, to remain 

10 available until expended, except that—

11 ‘‘(A) such amounts shall be used only under 

12 section 1366 for mitigation activities for repet13 itive claims properties (as such term is defined 

14 in section 1366(n)); and 

15 ‘‘(B) notwithstanding any other provision 

16 of this title, amounts made available pursuant to 

17 this paragraph shall not be subject to offsetting 

18 collections through premium rates for flood in19 surance coverage under this title; and’’. 

20 SEC. 6. FEMA AUTHORITY TO FUND MITIGATION ACTIVI21 TIES FOR INDIVIDUAL REPETITIVE CLAIMS 

22 PROPERTIES. 

23 (a) IN GENERAL.—Chapter I of the National Flood In24 surance Act of 1968 (42 U.S.C. 4011 et seq.) is amended 

25 by adding at the end the following new section:
29

1 ‘‘GRANTS FOR REPETITIVE INSURANCE CLAIMS PROPERTIES

2 ‘‘SEC. 1323. (a) IN GENERAL.—The Director may pro3 vide funding for mitigation actions that reduce flood dam4 ages to repetitive claims properties, but only if the Director 

5 determines that—

6 ‘‘(1) such activities are in the best interest of the 

7 National Flood Insurance Fund; and 

8 ‘‘(2) such activities can not be funded under the 

9 program under section 1366 because—

10 ‘‘(A) the requirements of section 1366(g) are 

11 not being met by the State or community in 

12 which the property is located; or 

13 ‘‘(B) the State or community does not have 

14 the capacity to manage such activities. 

15 ‘‘(b) PRIORITY FOR WORST-CASE PROPERTIES.—In 

16 determining properties for which funding is to be provided 

17 under this section, the Director shall give priority based on 

18 the amount of losses to the National Flood Insurance Fund 

19 that claims for a property have caused or are reasonably 

20 expected to cause. 

21 ‘‘(c) DEFINITION.—For purposes of this section, the 

22 term ‘repetitive claims property’ has the meaning given 

23 such term in section 1366(n).’’. 

24 (b) AVAILABILITY OF NATIONAL FLOOD INSURANCE

25 FUND AMOUNTS.—Section 1310(a) of the National Flood 
30

1 Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended by 

2 adding at the end the following new paragraph: 

3 ‘‘(9) for funding, not to exceed $10,000,000 in 

4 any fiscal year, for mitigation actions under section 

5 1323, except that, notwithstanding any other provi6 sion of this title, amounts made available pursuant to 

7 this paragraph shall not be subject to offsetting collec8 tions through premium rates for flood insurance cov9 erage under this title.’’. 

10 SEC. 7. ACTUARIAL RATE PROPERTIES. 

11 (a) IN GENERAL.—Section 1308 of the National Flood 

12 Insurance Act of 1968 (42 U.S.C. 4015) is amended by 

13 striking subsection (c) and inserting the following new sub14 section: 

15 ‘‘(c) ACTUARIAL RATE PROPERTIES.—Subject only to 

16 the limitations provided under paragraphs (1) and (2), the 

17 chargeable rate shall not be less than the applicable esti18 mated risk premium rate for such area (or subdivision 

19 thereof) under section 1307(a)(1) with respect to the fol20 lowing properties: 

21 ‘‘(1) POST-FIRM PROPERTIES.—Any property the 

22 construction or substantial improvement of which the 

23 Director determines has been started after December 

24 31, 1974, or started after the effective date of the ini25 tial rate map published by the Director under para-
31

1 graph (2) of section 1360 for the area in which such 

2 property is located, whichever is later, except that the 

3 chargeable rate for properties under this paragraph 

4 shall be subject to the limitation under subsection (e). 

5 ‘‘(2) PROPERTIES REFUSING MITIGATION ASSIST6 ANCE.—Any property for which the Director has 

7 taken action under section 1362(g)(1) or 1366(i)(1). 

8 ‘‘(3) CERTAIN LEASED COASTAL AND RIVER

9 PROPERTIES.—Any property leased from the Federal 

10 Government (including residential and nonresidential 

11 properties) that the Director determines is located on 

12 the river-facing side of any dike, levee, or other 

13 riverine flood control structure, or seaward of any 

14 seawall or other coastal flood control structure.’’. 

15 (b) INAPPLICABILITY OF ANNUAL LIMITATIONS ON

16 PREMIUM INCREASES.—Section 1308(e) of the National 

17 Flood Insurance Act of 1968 (42 U.S.C. 4015(e)) is amend18 ed by striking ‘‘Notwithstanding’’ and inserting ‘‘Except 

19 with respect to properties described under paragraph (2) 

20 or (3) of subsection (c) and notwithstanding’’. 
32

1 SEC. 8. REMOVING REPETITIVE INSURANCE CLAIMS PROP2 ERTIES FROM FEDERAL DISASTER ASSIST3 ANCE RESPONSIBILITY. 

4 (a) IN GENERAL.—Section 582 of the National Flood 

5 Insurance Reform Act of 1994 (42 U.S.C. 5154a) is amend6 ed—

7 (1) by redesignating subsections (d) and (e) as 

8 subsections (e) and (f), respectively; and 

9 (2) by inserting after subsection (c) the following 

10 new subsection: 

11 ‘‘(d) UNMITIGATED REPETITIVE INSURANCE CLAIMS

12 PROPERTIES.—Notwithstanding any other provision of 

13 law, no Federal disaster relief assistance made available in 

14 a flood disaster area may be used to make a payment (in15 cluding any loan assistance payment) for repair, replace16 ment, or restoration for damage to a property located in 

17 such area if—

18 ‘‘(1) such property is a repetitive claims prop19 erty (as such term is defined in section 1366(n) of the 

20 National Flood Insurance Act of 1968 (42 U.S.C. 

21 4104c(o)) or a severe repetitive loss property (as such 

22 term is defined in section 1362(b) of such Act (42 

23 U.S.C. 4103(b)); and 

24 ‘‘(2) in accordance with such requirements as the 

25 Director may establish, mitigation assistance under 

26 section 1362 or 1366 of the National Flood Insurance
33

1 Act of 1968 has been offered to the owner of the prop2 erty, before or after the occurrence of the flood loss 

3 events, which was refused by the owner.’’. 

4 (b) EFFECTIVE DATE.—Notwithstanding subsection (f) 

5 of section 582 of the National Flood Insurance Reform Act 

6 of 1994 (as so redesignated by paragraph (1)(A) of this sub7 section), the amendment made by paragraph (1) shall apply 

8 to disasters declared after the date of the enactment of this 

9 Act. 

10 SEC. 9. ELECTRONIC DATABASE OF REPETITIVE CLAIMS 

11 PROPERTIES. 

12 Section 1364 of the National Flood Insurance Act of 

13 1968 (42 U.S.C. 4104a) is amended by adding at the end 

14 the following new subsection: 

15 ‘‘(d) ELECTRONIC DATABASE OF REPETITIVE CLAIMS

16 PROPERTIES.—The Director may, if the Director deter17 mines such action is feasible, establish and maintain a 

18 database identifying by location and address all repetitive 

19 claims properties (as such term is defined in section 

20 1366(n)), repetitive loss structures (as such term is defined 

21 in section 1370), and severe repetitive loss properties (as 

22 such term is defined in section 1362(b)). If established, the 

23 Director shall make the database available to the public in 

24 a format that may be searched electronically. Such a data-
34

1 base shall not include any information regarding ownership 

2 of properties.’’. 

3 SEC. 10. REPLACEMENT OF MOBILE HOMES ON ORIGINAL 

4 SITES. 

5 Section 1315 of the National Flood Insurance Act of 

6 1968 (42 U.S.C. 4022) is amended by adding at the end 

7 the following new subsection: 

8 ‘‘(c) REPLACEMENT OF MOBILE HOMES ON ORIGINAL

9 SITES.—

10 ‘‘(1) COMMUNITY PARTICIPATION.—The place11 ment of any mobile home on any site shall not affect 

12 the eligibility of any community to participate in the 

13 flood insurance program under this title and the 

14 Flood Disaster Protection Act of 1973 (notwith15 standing that such placement may fail to comply 

16 with any elevation or flood damage mitigation re17 quirements), if—

18 ‘‘(A) such mobile home was previously lo19 cated on such site; 

20 ‘‘(B) such mobile home was relocated from 

21 such site because of flooding that threatened or 

22 affected such site; and 

23 ‘‘(C) such replacement is conducted not 

24 later than the expiration of the 180-day period 

25 that begins upon the subsidence (in the area of 
35

1 such site) of the body of water that flooded to a 

2 level considered lower than flood levels. 

3 ‘‘(2) DEFINITION.—For purposes of this sub4 section, the term ‘mobile home’ has the meaning given 

5 such term in the law of the State in which the mobile 

6 home is located.’’.

7 SEC. 11. REITERATION OF FEMA RESPONSIBILITY TO MAP 

8 MUDSLIDES. 

9 As directed in section 1360(b) of the National Flood 

10 Insurance Act of 1968 (42 U.S.C. 4101(b)), the Director of 

11 the Federal Emergency Management Agency is again di12 rected to accelerate the identification of risk zones within 

13 flood-prone and mudslide-prone areas, as provided by sub14 section (a)(2) of such section 1360, in order to make known 

15 the degree of hazard within each such zone at the earliest 

16 possible date.
Union Calendar No. 152

108TH CONGRESS 

1ST SESSION H. R. 253

[Report No. 108–266] 

A BILL

To amend the National Flood Insurance Act of 

1968 to reduce losses to properties for which repetitive flood insurance claim payments have been made. 

SEPTEMBER 5, 2003

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed