99–060 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 112–102 

FLOOD INSURANCE REFORM ACT OF 2011 

JUNE 9, 2011.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BACHUS, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 1309] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 1309) to extend the authorization of the national flood insurance program, to achieve reforms to improve the financial integrity and stability of the program, and to increase the role of private 

markets in the management of flood insurance risk, and for other 

purposes, having considered the same, report favorably thereon 

with an amendment and recommend that the bill as amended do 

pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Flood Insurance Reform Act of 

2011’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as follows: 

Sec. 1. Short title and table of contents. 

Sec. 2. Extensions. 

Sec. 3. Mandatory purchase. 

Sec. 4. Reforms of coverage terms. 

Sec. 5. Reforms of premium rates. 

Sec. 6. Technical Mapping Advisory Council. 

Sec. 7. FEMA incorporation of new mapping protocols. 

Sec. 8. Treatment of levees. 

Sec. 9. Privatization initiatives. 

Sec. 10. FEMA annual report on insurance program. 

Sec. 11. Actuarial rates for severe repetitive loss properties refusing mitigation or purchase offers. 

Sec. 12. Mitigation assistance. 

Sec. 13. Grants for direct funding of mitigation activities for individual repetitive claims properties. 

Sec. 14. Notification to homeowners regarding mandatory purchase requirement applicability and rate phaseins. 

Sec. 15. Notification of establishment of flood elevations. 

Sec. 16. Notification to tenants of availability of contents insurance. 

Sec. 17. Notification to policy holders regarding direct management of policy by FEMA. 

Sec. 18. Notice of availability of flood insurance and escrow in RESPA good faith estimate. 

Sec. 19. Reimbursement for costs incurred by homeowners obtaining letters of map amendment. 

Sec. 20. Treatment of swimming pool enclosures outside of hurricane season. 


rfrederick on DSKD9S0YB1PROD with HEARING
2 

Sec. 21. CDBG eligibility for flood insurance outreach activities and community building code administration 

grants. 

Sec. 22. Technical corrections. 

Sec. 23. Report on Write-Your-Own Program. 

Sec. 24. Studies of voluntary community-based flood insurance options. 

Sec. 25. Report on inclusion of building codes in floodplain management criteria. 

Sec. 26. Study on graduated risk. 

Sec. 27. No cause of action. 

SEC. 2. EXTENSIONS. 

(a) EXTENSION OF PROGRAM.—Section 1319 of the National Flood Insurance Act 

of 1968 (42 U.S.C. 4026) is amended by striking ‘‘September 30, 2011’’ and inserting 

‘‘September 30, 2016’’. 

(b) EXTENSION OF FINANCING.—Section 1309(a) of such Act (42 U.S.C. 4016(a)) is 

amended by striking ‘‘September 30, 2011’’ and inserting ‘‘September 30, 2016’’. 

SEC. 3. MANDATORY PURCHASE. 

(a) AUTHORITY TO TEMPORARILY SUSPEND MANDATORY PURCHASE REQUIREMENT.— 

(1) IN GENERAL.—Section 102 of the Flood Disaster Protection Act of 1973 (42 

U.S.C. 4012a) is amended by adding at the end the following new subsection: 

‘‘(i) AUTHORITY TO TEMPORARILY SUSPEND MANDATORY PURCHASE REQUIREMENT.— 

‘‘(1) FINDING BY ADMINISTRATOR THAT AREA IS AN ELIGIBLE AREA.—For any 

area, upon a request submitted to the Administrator by a local government authority having jurisdiction over any portion of the area, the Administrator shall 

make a finding of whether the area is an eligible area under paragraph (3). If 

the Administrator finds that such area is an eligible area, the Administrator 

shall, in the discretion of the Administrator, designate a period during which 

such finding shall be effective, which shall not be longer in duration than 12 

months. 

‘‘(2) SUSPENSION OF MANDATORY PURCHASE REQUIREMENT.—If the Administrator makes a finding under paragraph (1) that an area is an eligible area 

under paragraph (3), during the period specified in the finding, the designation 

of such eligible area as an area having special flood hazards shall not be effective for purposes of subsection (a), (b), and (e) of this section, and section 202(a) 

of this Act. Nothing in this paragraph may be construed to prevent any lender, 

servicer, regulated lending institution, Federal agency lender, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, 

at the discretion of such entity, from requiring the purchase of flood insurance 

coverage in connection with the making, increasing, extending, or renewing of 

a loan secured by improved real estate or a mobile home located or to be located 

in such eligible area during such period or a lender or servicer from purchasing 

coverage on behalf of a borrower pursuant to subsection (e). 

‘‘(3) ELIGIBLE AREAS.—An eligible area under this paragraph is an area that 

is designated or will, pursuant to any issuance, revision, updating, or other 

change in flood insurance maps that takes effect on or after the date of the enactment of the Flood Insurance Reform Act of 2011, become designated as an 

area having special flood hazards and that meets any one of the following 3 requirements: 

‘‘(A) AREAS WITH NO HISTORY OF SPECIAL FLOOD HAZARDS.—The area does 

not include any area that has ever previously been designated as an area 

having special flood hazards. 

‘‘(B) AREAS WITH FLOOD PROTECTION SYSTEMS UNDER IMPROVEMENTS.— 

The area was intended to be protected by a flood protection system— 

‘‘(i) that has been decertified, or is required to be certified, as providing protection for the 100-year frequency flood standard; 

‘‘(ii) that is being improved, constructed, or reconstructed; and 

‘‘(iii) for which the Administrator has determined measurable 

progress toward completion of such improvement, construction, reconstruction is being made and toward securing financial commitments 

sufficient to fund such completion. 

‘‘(C) AREAS FOR WHICH APPEAL HAS BEEN FILED.—An area for which a 

community has appealed— 

‘‘(i) designation of the area as having special flood hazards in a timely manner under section 1363; or 

‘‘(ii) any decertification or deaccreditation of a dam, levee, or other 

flood protection system or the level of protection afforded by a dam, 

levee, or system. 

‘‘(4) EXTENSION OF DELAY.—Upon a request submitted by a local government 

authority having jurisdiction over any portion of the eligible area, the AdminisVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6621 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
3 

trator may extend the period during which a finding under paragraph (1) shall 

be effective, except that— ‘‘(A) each such extension under this paragraph shall not be for a period exceeding 12 months; and ‘‘(B) for any area, the cumulative number of such extensions may not ex- ceed 2. 

‘‘(5) RULE OF CONSTRUCTION.—Nothing in this subsection may be construed to affect the applicability of a designation of any area as an area having special 

flood hazards for purposes of the availability of flood insurance coverage, criteria for land management and use, notification of flood hazards, eligibility for 

mitigation assistance, or any other purpose or provision not specifically referred 

to in paragraph (2). ‘‘(6) REPORTS.—The Administrator shall, in each annual report submitted pursuant to section 1320, include information identifying each finding under paragraph (1) by the Administrator during the preceding year that an area is an 

area having special flood hazards, the basis for each such finding, any extensions pursuant to paragraph (4) of the periods of effectiveness of such findings, 

and the reasons for such extensions.’’. 

(2) NO REFUNDS.—Nothing in this subsection or the amendments made by this subsection may be construed to authorize or require any payment or refund 

for flood insurance coverage purchased for any property that covered any period 

during which such coverage is not required for the property pursuant to the applicability of the amendment made by paragraph (1). 

(b) TERMINATION OF FORCE-PLACED INSURANCE.—Section 102(e) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(e)) is amended— 

(1) in paragraph (2), by striking ‘‘insurance.’’ and inserting ‘‘insurance, including premiums or fees incurred for coverage beginning on the date on which flood 

insurance coverage lapsed or did not provide a sufficient coverage amount.’’; 

(2) by redesignating paragraphs (3) and (4) as paragraphs (5) and 6), respectively; and 

(3) by inserting after paragraph (2) the following new paragraphs: 

‘‘(3) TERMINATION OF FORCE-PLACED INSURANCE.—Within 30 days of receipt by 

the lender or servicer of a confirmation of a borrower’s existing flood insurance 

coverage, the lender or servicer shall— 

‘‘(A) terminate the force-placed insurance; and 

‘‘(B) refund to the borrower all force-placed insurance premiums paid by 

the borrower during any period during which the borrower’s flood insurance 

coverage and the force-placed flood insurance coverage were each in effect, 

and any related fees charged to the borrower with respect to the forceplaced insurance during such period. 

‘‘(4) SUFFICIENCY OF DEMONSTRATION.—For purposes of confirming a borrower’s existing flood insurance coverage, a lender or servicer for a loan shall 

accept from the borrower an insurance policy declarations page that includes 

the existing flood insurance policy number and the identity of, and contact information for, the insurance company or agent.’’. 

(c) USE OF PRIVATE INSURANCE TO SATISFY MANDATORY PURCHASE REQUIREMENT.—Section 102(b) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 

4012a(b)) is amended— 

(1) in paragraph (1)— 

(A) by striking ‘‘lending institutions not to make’’ and inserting ‘‘lending 

institutions— 

‘‘(A) not to make’’; 

(B) in subparagraph (A), as designated by subparagraph (A) of this paragraph, by striking ‘‘less.’’ and inserting ‘‘less; and’’; and 

(C) by adding at the end the following new subparagraph: 

‘‘(B) to accept private flood insurance as satisfaction of the flood insurance coverage requirement under subparagraph (A) if the coverage provided 

by such private flood insurance meets the requirements for coverage under 

such subparagraph.’’; 

(2) in paragraph (2), by inserting after ‘‘provided in paragraph (1).’’ the following new sentence: ‘‘Each Federal agency lender shall accept private flood insurance as satisfaction of the flood insurance coverage requirement under the 

preceding sentence if the flood insurance coverage provided by such private 

flood insurance meets the requirements for coverage under such sentence.’’; 

(3) in paragraph (3), in the matter following subparagraph (B), by adding at 

the end the following new sentence: ‘‘The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall accept private 

flood insurance as satisfaction of the flood insurance coverage requirement 

under the preceding sentence if the flood insurance coverage provided by such 


rfrederick on DSKD9S0YB1PROD with HEARING
4 

private flood insurance meets the requirements for coverage under such sentence.’’; and 

(4) by adding at the end the following new paragraph: 

‘‘(5) PRIVATE FLOOD INSURANCE DEFINED.—In this subsection, the term ‘private flood insurance’ means a contract for flood insurance coverage allowed for 

sale under the laws of any State.’’. 

SEC. 4. REFORMS OF COVERAGE TERMS. 

(a) MINIMUM DEDUCTIBLES FOR CLAIMS.—Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019) is amended— 

(1) by striking ‘‘The Director is’’ and inserting the following: ‘‘(a) IN GENERAL.—The Administrator is’’; and 

(2) by adding at the end the following: 

‘‘(b) MINIMUM ANNUAL DEDUCTIBLES.— 

‘‘(1) SUBSIDIZED RATE PROPERTIES.—For any structure that is covered by flood 

insurance under this title, and for which the chargeable rate for such coverage 

is less than the applicable estimated risk premium rate under section 1307(a)(1) 

for the area (or subdivision thereof) in which such structure is located, the minimum annual deductible for damage to or loss of such structure shall be $2,000. 

‘‘(2) ACTUARIAL RATE PROPERTIES.—For any structure that is covered by flood 

insurance under this title, for which the chargeable rate for such coverage is 

not less than the applicable estimated risk premium rate under section 

1307(a)(1) for the area (or subdivision thereof) in which such structure is located, the minimum annual deductible for damage to or loss of such structure 

shall be $1,000.’’. 

(b) CLARIFICATION OF RESIDENTIAL AND COMMERCIAL COVERAGE LIMITS.—Section 

1306(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended— 

(1) in paragraph (2)— 

(A) by striking ‘‘in the case of any residential property’’ and inserting ‘‘in 

the case of any residential building designed for the occupancy of from one 

to four families’’; and 

(B) by striking ‘‘shall be made available to every insured upon renewal 

and every applicant for insurance so as to enable such insured or applicant 

to receive coverage up to a total amount (including such limits specified in 

paragraph (1)(A)(i)) of $250,000’’ and inserting ‘‘shall be made available, 

with respect to any single such building, up to an aggregate liability (including such limits specified in paragraph (1)(A)(i)) of $250,000’’; and 

(2) in paragraph (4)— 

(A) by striking ‘‘in the case of any nonresidential property, including 

churches,’’ and inserting ‘‘in the case of any nonresidential building, including a church,’’; and 

(B) by striking ‘‘shall be made available to every insured upon renewal 

and every applicant for insurance, in respect to any single structure, up to 

a total amount (including such limit specified in subparagraph (B) or (C) 

of paragraph (1), as applicable) of $500,000 for each structure and $500,000 

for any contents related to each structure’’ and inserting ‘‘shall be made 

available with respect to any single such building, up to an aggregate liability (including such limits specified in subparagraph (B) or (C) of paragraph 

(1), as applicable) of $500,000, and coverage shall be made available up to 

a total of $500,000 aggregate liability for contents owned by the building 

owner and $500,000 aggregate liability for each unit within the building for 

contents owned by the tenant’’. 

(c) INDEXING OF 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 (4), by striking ‘‘and’’ at the end; 

(2) in paragraph (5), by striking the period at the end and inserting ‘‘; and’’; 

(3) by redesignating paragraph (5) as paragraph (7); and 

(4) by adding at the end the following new paragraph: 

‘‘(8) each of the dollar amount limitations under paragraphs (2), (3), (4), (5), 

and (6) shall be adjusted effective on the date of the enactment of the Flood 

Insurance Reform Act of 2011, such adjustments shall be calculated using the 

percentage change, over the period beginning on September 30, 1994, and ending on such date of enactment, in such inflationary index as the Administrator 

shall, by regulation, specify, and the dollar amount of such adjustment shall be 

rounded to the next lower dollar; and the Administrator shall cause to be published in the Federal Register the adjustments under this paragraph to such 

dollar amount limitations; except that in the case of coverage for a property that 

is made available, pursuant to this paragraph, in an amount that exceeds the 


rfrederick on DSKD9S0YB1PROD with HEARING
5 

limitation otherwise applicable to such coverage as specified in paragraph (2), 

(3), (4), (5), or (6), the total of 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).’’. 

(d) OPTIONAL COVERAGE FOR LOSS OF USE OF PERSONAL RESIDENCE AND BUSINESS

INTERRUPTION.—Subsection (b) of section 1306 of the National Flood Insurance Act 

of 1968 (42 U.S.C. 4013(b)), as amended by the preceding provisions of this section, 

is further amended by inserting after paragraph (4) the following new paragraphs: 

‘‘(5) the Administrator may provide that, in the case of any residential property, each renewal or new contract for flood insurance coverage may provide not 

more than $5,000 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, except that— 

‘‘(A) purchase of such coverage shall be at the option of the insured; 

‘‘(B) any 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); and 

‘‘(C) the Administrator may make such coverage available only if the Administrator makes a determination and causes notice of such determination 

to be published in the Federal Register that— 

‘‘(i) a competitive private insurance market for such coverage does 

not exist; and 

‘‘(ii) the national flood insurance program has the capacity to make 

such coverage available without borrowing funds from the Secretary of 

the Treasury under section 1309 or otherwise; 

‘‘(6) the Administrator may provide that, in the case of any commercial property or other residential property, including multifamily rental property, 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 may be 

made available to every insured upon renewal and every applicant, up to a total 

amount of $20,000 per property, except that— 

‘‘(A) purchase of such coverage shall be at the option of the insured; 

‘‘(B) any 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); and 

‘‘(C) the Administrator may make such coverage available only if the Administrator makes a determination and causes notice of such determination 

to be published in the Federal Register that— 

‘‘(i) a competitive private insurance market for such coverage does 

not exist; and 

‘‘(ii) the national flood insurance program has the capacity to make 

such coverage available without borrowing funds from the Secretary of 

the Treasury under section 1309 or otherwise;’’. 

(e) PAYMENT OF PREMIUMS IN INSTALLMENTS FOR RESIDENTIAL PROPERTIES.—Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 4013) is amended 

by adding at the end the following new subsection: 

‘‘(d) PAYMENT OF PREMIUMS IN INSTALLMENTS FOR RESIDENTIAL PROPERTIES.— 

‘‘(1) AUTHORITY.—In addition to any other terms and conditions under subsection (a), such regulations shall provide that, in the case of any residential 

property, premiums for flood insurance coverage made available under this title 

for such property may be paid in installments. 

‘‘(2) LIMITATIONS.—In implementing the authority under paragraph (1), the 

Administrator may establish increased chargeable premium rates and surcharges, and deny coverage and establish such other sanctions, as the Administrator considers necessary to ensure that insureds purchase, pay for, and maintain coverage for the full term of a contract for flood insurance coverage or to 

prevent insureds from purchasing coverage only for periods during a year when 

risk of flooding is comparatively higher or canceling coverage for periods when 

such risk is comparatively lower.’’. 

SEC. 5. REFORMS OF PREMIUM RATES. 

(a) INCREASE IN ANNUAL LIMITATION ON PREMIUM INCREASES.—Section 1308(e) of 

the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)) is amended by striking 

‘‘10 percent’’ and inserting ‘‘20 percent’’. 

(b) PHASE-IN OF RATES FOR CERTAIN PROPERTIES IN NEWLY MAPPED AREAS.— 

(1) IN GENERAL.—Section 1308 of the National Flood Insurance Act of 1968 

(42 U.S.C. 4015) is amended— 

(A) in subsection (a), in the matter preceding paragraph (1), by inserting 

‘‘or notice’’ after ‘‘prescribe by regulation’’; 


rfrederick on DSKD9S0YB1PROD with HEARING
6 

(B) in subsection (c), by inserting ‘‘and subsection (g)’’ before the first comma; and 

(C) by adding at the end the following new subsection: ‘‘(g) 5-YEAR PHASE-IN OF FLOOD INSURANCE RATES FOR CERTAIN PROPERTIES IN

NEWLY MAPPED AREAS.— ‘‘(1) 50 PERCENT RATE FOR INITIAL YEAR.—Notwithstanding subsection (c) or any other provision of law relating to chargeable risk premium rates for flood 

insurance coverage under this title, in the case of any area that was not previously designated as an area having special flood hazards and that, pursuant 

to any issuance, revision, updating, or other change in flood insurance maps, 

becomes designated as such an area, during the 12-month period that begins, 

except as provided in paragraph (2), upon the date that such maps, as issued, 

revised, updated, or otherwise changed, become effective, the chargeable premium rate for flood insurance under this title with respect to any covered property that is located within such area shall be 50 percent of the chargeable risk 

premium rate otherwise applicable under this title to the property. ‘‘(2) APPLICABILITY TO PREFERRED RISK RATE AREAS.—In the case of any area described in paragraph (1) that consists of or includes an area that, as of date 

of the effectiveness of the flood insurance maps for such area referred to in 

paragraph (1) as so issued, revised, updated, or changed, is eligible for any reason for preferred risk rate method premiums for flood insurance coverage and 

was eligible for such premiums as of the enactment of the Flood Insurance Reform Act of 2011, the 12-month period referred to in paragraph (1) for such area 

eligible for preferred risk rate method premiums shall begin upon the expiration 

of the period during which such area is eligible for such preferred risk rate 

method premiums. 

‘‘(3) PHASE-IN OF FULL ACTUARIAL RATES.—With respect to any area described 

in paragraph (1), upon the expiration of the 12-month period under paragraph 

(1) or (2), as applicable, for such area, the Administrator shall increase the 

chargeable risk premium rates for flood insurance under this title for covered 

properties in such area by 20 percent, and by 20 percent upon the expiration 

of each successive 12-month period thereafter until the chargeable risk premium rates comply with subsection (c). 

‘‘(4) COVERED PROPERTIES.—For purposes of the subsection, the term ‘covered 

property’ means any residential property occupied by its owner or a bona fide 

tenant as a primary residence.’’. 

(2) REGULATION OR NOTICE.—The Administrator of the Federal Emergency 

Management Agency shall issue an interim final rule or notice to implement 

this subsection and the amendments made by this subsection as soon as practicable after the date of the enactment of this Act. 

(c) PHASE-IN OF ACTUARIAL RATES FOR CERTAIN PROPERTIES.— 

(1) IN GENERAL.—Section 1308(c) of the National Flood Insurance Act of 1968 

(42 U.S.C. 4015(c)) is amended— 

(A) by redesignating paragraph (2) as paragraph (7); and 

(B) by inserting after paragraph (1) the following new paragraphs: 

‘‘(2) COMMERCIAL PROPERTIES.—Any nonresidential property. 

‘‘(3) SECOND HOMES AND VACATION HOMES.—Any residential property that is 

not the primary residence of any individual. 

‘‘(4) HOMES SOLD TO NEW OWNERS.—Any single family property that— 

‘‘(A) has been constructed or substantially improved and for which such 

construction or improvement was started, as determined by the Administrator, before December 31, 1974, or before the effective date of the initial 

rate map published by the Administrator under paragraph (2) of section 

1360(a) for the area in which such property is located, whichever is later; 

and 

‘‘(B) is purchased after the effective date of this paragraph, pursuant to 

section 5(c)(3)(A) of the Flood Insurance Reform Act of 2011. 

‘‘(5) HOMES DAMAGED OR IMPROVED.—Any property that, on or after the date 

of the enactment of the Flood Insurance Reform Act of 2011, has experienced 

or sustained— 

‘‘(A) substantial flood damage exceeding 50 percent of the fair market 

value of such property; or 

‘‘(B) substantial improvement exceeding 30 percent of the fair market 

value of such property. 

‘‘(6) HOMES WITH MULTIPLE CLAIMS.—Any severe repetitive loss property (as 

such term is defined in section 1361A(b)).’’. 

(2) TECHNICAL AMENDMENTS.—Section 1308 of the National Flood Insurance 

Act of 1968 (42 U.S.C. 4015) is amended— 

(A) in subsection (c)— 


rfrederick on DSKD9S0YB1PROD with HEARING
7 

(i) in the matter preceding paragraph (1), by striking ‘‘the limitations provided under paragraphs (1) and (2)’’ and inserting ‘‘subsection (e)’’; 

and 

(ii) in paragraph (1), by striking ‘‘, except’’ and all that follows through ‘‘subsection (e)’’; and (B) in subsection (e), by striking ‘‘paragraph (2) or (3)’’ and inserting ‘‘paragraph (7)’’. (3) EFFECTIVE DATE AND TRANSITION.— (A) EFFECTIVE DATE.—The amendments made by paragraphs (1) and (2) shall apply beginning upon the expiration of the 12-month period that begins on the date of the enactment of this Act, except as provided in subparagraph (B) of this paragraph. (B) TRANSITION FOR PROPERTIES COVERED BY FLOOD INSURANCE UPON EF- FECTIVE DATE.— (i) INCREASE OF RATES OVER TIME.—In the case of any property de- scribed in paragraph (2), (3), (4), (5), or (6) of section 1308(c) of the National Flood Insurance Act of 1968, as amended by paragraph (1) of this 

subsection, that, as of the effective date under subparagraph (A) of this 

paragraph, is covered under a policy for flood insurance made available 

under the national flood insurance program for which the chargeable 

premium rates are less than the applicable estimated risk premium 

rate under section 1307(a)(1) of such Act for the area in which the 

property is located, the Administrator of the Federal Emergency Management Agency shall increase the chargeable premium rates for such 

property over time to such applicable estimated risk premium rate 

under section 1307(a)(1). 

(ii) AMOUNT OF ANNUAL INCREASE.—Such increase shall be made by 

increasing the chargeable premium rates for the property (after application of any increase in the premium rates otherwise applicable to 

such property), once during the 12-month period that begins upon the 

effective date under subparagraph (A) of this paragraph and once every 

12 months thereafter until such increase is accomplished, by 20 percent 

(or such lesser amount as may be necessary so that the chargeable rate 

does not exceed such applicable estimated risk premium rate or to comply with clause (iii)). 

(iii) PROPERTIES SUBJECT TO PHASE-IN AND ANNUAL INCREASES.—In 

the case of any pre-FIRM property (as such term is defined in section 

578(b) of the National Flood Insurance Reform Act of 1974), the aggregate increase, during any 12-month period, in the chargeable premium 

rate for the property that is attributable to this subparagraph or to an 

increase described in section 1308(e) of the National Flood Insurance 

Act of 1968 may not exceed 20 percent. 

(iv) FULL ACTUARIAL RATES.—The provisions of paragraphs (2), (3), 

(4), (5), and (6) of such section 1308(c) shall apply to such a property 

upon the accomplishment of the increase under this subparagraph and 

thereafter. 

(d) PROHIBITION OF EXTENSION OF SUBSIDIZED RATES TO LAPSED POLICIES.—Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015), as amended 

by the preceding provisions of this Act, is further amended— 

(1) in subsection (e), by inserting ‘‘or subsection (h)’’ after ‘‘subsection (c)’’; 

(2) by adding at the end the following new subsection: 

‘‘(h) PROHIBITION OF EXTENSION OF SUBSIDIZED RATES TO LAPSED POLICIES.—Notwithstanding any other provision of law relating to chargeable risk premium rates 

for flood insurance coverage under this title, the Administrator shall not provide 

flood insurance coverage under this title for any property for which a policy for such 

coverage for the property has previously lapsed in coverage as a result of the deliberate choice of the holder of such policy, at a rate less than the applicable estimated 

risk premium rates for the area (or subdivision thereof) in which such property is 

located.’’. 

(e) RECOGNITION OF STATE AND LOCAL FUNDING FOR CONSTRUCTION, RECONSTRUCTION, AND IMPROVEMENT OF FLOOD PROTECTION SYSTEMS IN DETERMINATION OF

RATES.— 

(1) IN GENERAL.—Section 1307 of the National Flood Insurance Act of 1968 

(42 U.S.C. 4014) is amended— 

(A) in subsection (e)— 

(i) in the first sentence, by striking ‘‘construction of a flood protection 

system’’ and inserting ‘‘construction, reconstruction, or improvement of 

a flood protection system (without respect to the level of Federal investment or participation)’’; and 


rfrederick on DSKD9S0YB1PROD with HEARING
8 

(ii) in the second sentence— 

(I) by striking ‘‘construction of a flood protection system’’ and inserting ‘‘construction, reconstruction, or improvement of a flood 

protection system’’; and 

(II) by inserting ‘‘based on the present value of the completed 

system’’ after ‘‘has been expended’’; and 

(B) in subsection (f)— 

(i) in the first sentence in the matter preceding paragraph (1), by inserting ‘‘(without respect to the level of Federal investment or participation)’’ before the period at the end; 

(ii) in the third sentence in the matter preceding paragraph (1), by 

inserting ‘‘, whether coastal or riverine,’’ after ‘‘special flood hazard’’; 

and 

(iii) in paragraph (1), by striking ‘‘a Federal agency in consultation 

with the local project sponsor’’ and inserting ‘‘the entity or entities that 

own, operate, maintain, or repair such system’’. 

(2) REGULATIONS.—The Administrator of the Federal Emergency Management 

Agency shall promulgate regulations to implement this subsection and the 

amendments made by this subsection as soon as practicable, but not more than 

18 months after the date of the enactment of this Act. Paragraph (3) may not 

be construed to annul, alter, affect, authorize any waiver of, or establish any 

exception to, the requirement under the preceding sentence. 

SEC. 6. TECHNICAL MAPPING ADVISORY COUNCIL. 

(a) ESTABLISHMENT.—There is established a council to be known as the Technical 

Mapping Advisory Council (in this section referred to as the ‘‘Council’’). 

(b) MEMBERSHIP.— 

(1) IN GENERAL.—The Council shall consist of— 

(A) the Administrator of the Federal Emergency Management Agency (in 

this section referred to as the ‘‘Administrator’’), or the designee thereof; 

(B) the Director of the United States Geological Survey of the Department of the Interior, or the designee thereof; 

(C) the Under Secretary of Commerce for Oceans and Atmosphere, or the 

designee thereof; 

(D) the commanding officer of the United States Army Corps of Engineers, or the designee thereof; 

(E) the chief of the Natural Resources Conservation Service of the Department of Agriculture, or the designee thereof; 

(F) the Director of the United States Fish and Wildlife Service of the Department of the Interior, or the designee thereof; 

(G) the Assistant Administrator for Fisheries of the National Oceanic and 

Atmospheric Administration of the Department of Commerce, or the designee thereof; and 

(H) 14 additional members to be appointed by the Administrator of the 

Federal Emergency Management Agency, who shall be— 

(i) an expert in data management; 

(ii) an expert in real estate; 

(iii) an expert in insurance; 

(iv) a member of a recognized regional flood and storm water management organization; 

(v) a representative of a State emergency management agency or association or organization for such agencies; 

(vi) a member of a recognized professional surveying association or 

organization; 

(vii) a member of a recognized professional mapping association or organization; 

(viii) a member of a recognized professional engineering association 

or organization; 

(ix) a member of a recognized professional association or organization 

representing flood hazard determination firms; 

(x) a representative of State national flood insurance coordination offices; 

(xi) representatives of two local governments, at least one of whom 

is a local levee flood manager or executive, designated by the Federal 

Emergency Management Agency as Cooperating Technical Partners; 

and 

(xii) representatives of two State governments designated by the Federal Emergency Management Agency as Cooperating Technical States. 


rfrederick on DSKD9S0YB1PROD with HEARING
9 

(2) QUALIFICATIONS.—Members of the Council shall be appointed based on 

their demonstrated knowledge and competence regarding surveying, cartography, remote sensing, geographic information systems, or the technical aspects 

of preparing and using flood insurance rate maps. In appointing members under 

paragraph (1)(I), the Administrator shall ensure that the membership of the 

Council has a balance of Federal, State, local, and private members. 

(c) DUTIES.— 

(1) NEW MAPPING STANDARDS.—Not later than the expiration of the 12-month 

period beginning upon the date of the enactment of this Act, the Council shall 

develop and submit to the Administrator and the Congress proposed new mapping standards for 100-year flood insurance rate maps used under the national 

flood insurance program under the National Flood Insurance Act of 1968. In developing such proposed standards the Council shall— 

(A) ensure that the flood insurance rate maps reflect true risk, including 

graduated risk that better reflects the financial risk to each property; such 

reflection of risk should be at the smallest geographic level possible (but not 

necessarily property-by-property) to ensure that communities are mapped 

in a manner that takes into consideration different risk levels within the 

community; 

(B) ensure the most efficient generation, display, and distribution of flood 

risk data, models, and maps where practicable through dynamic digital environments using spatial database technology and the Internet; 

(C) ensure that flood insurance rate maps reflect current hydrologic and 

hydraulic data, current land use, and topography, incorporating the most 

current and accurate ground and bathymetric elevation data; 

(D) determine the best ways to include in such flood insurance rate maps 

levees, decertified levees, and areas located below dams, including determining a methodology for ensuring that decertified levees and other protections are included in flood insurance rate maps and their corresponding 

flood zones reflect the level of protection conferred; 

(E) consider how to incorporate restored wetlands and other natural buffers into flood insurance rate maps, which may include wetlands, groundwater recharge areas, erosion zones, meander belts, endangered species 

habitat, barrier islands and shoreline buffer features, riparian forests, and 

other features; 

(F) consider whether to use vertical positioning (as defined by the Administrator) for flood insurance rate maps; 

(G) ensure that flood insurance rate maps differentiate between a property that is located in a flood zone and a structure located on such property 

that is not at the same risk level for flooding as such property due to the 

elevation of the structure; 

(H) ensure that flood insurance rate maps take into consideration the 

best scientific data and potential future conditions (including projections for 

sea level rise); and 

(I) consider how to incorporate the new standards proposed pursuant to 

this paragraph in existing mapping efforts. 

(2) ONGOING DUTIES.—The Council shall, on an ongoing basis, review the 

mapping protocols developed pursuant to paragraph (1), and make recommendations to the Administrator when the Council determines that mapping protocols 

should be altered. 

(3) MEETINGS.—In carrying out its duties under this section, the Council shall 

consult with stakeholders through at least 4 public meetings annually, and 

shall seek input of all stakeholder interests including State and local representatives, environmental and conservation organizations, insurance industry representatives, advocacy groups, planning organizations, and mapping organizations. 

(d) PROHIBITION ON COMPENSATION.—Members of the Council shall receive no additional compensation by reason of their service on the Council. 

(e) CHAIRPERSON.—The Administrator shall serve as the Chairperson of the Council. 

(f) STAFF.— 

(1) FEMA.—Upon the request of the Council, the Administrator may detail, 

on a nonreimbursable basis, personnel of the Federal Emergency Management 

Agency to assist the Council in carrying out its duties. 

(2) OTHER FEDERAL AGENCIES.—Upon request of the Council, any other Federal agency that is a member of the Council may detail, on a non-reimbursable 

basis, personnel to assist the Council in carrying out its duties. 


rfrederick on DSKD9S0YB1PROD with HEARING
10 

(g) POWERS.—In carrying out this section, the Council may hold hearings, receive 

evidence and assistance, provide information, and conduct research, as the Council 

considers appropriate. 

(h) TERMINATION.—The Council shall terminate upon the expiration of the 5-year 

period beginning on the date of the enactment of this Act. 

SEC. 7. FEMA INCORPORATION OF NEW MAPPING PROTOCOLS. 

(a) NEW RATE MAPPING STANDARDS.—Not later than the expiration of the 6-month 

period beginning upon submission by the Technical Mapping Advisory Council 

under section 6 of the proposed new mapping standards for flood insurance rate 

maps used under the national flood insurance program developed by the Council 

pursuant to section 6(c), the Administrator of the Federal Emergency Management 

Agency (in this section referred to as the ‘‘Administrator’’) shall establish new standards for such rate maps based on such proposed new standards and the recommendations of the Council. 

(b) REQUIREMENTS.—The new standards for flood insurance rate maps established 

by the Administrator pursuant to subsection (a) shall— 

(1) delineate and include in any such rate maps— 

(A) all areas located within the 100-year flood plain; 

(B) areas of residual risk, including areas behind levees, dams, and other 

man-made structures; and 

(C) areas subject to graduated and other risk levels, to the maximum extent possible; 

(2) ensure that any such rate maps— 

(A) include levees, including decertified levees, and the level of protection 

they confer; 

(B) reflect current land use and topography and incorporate the most current and accurate ground level data; 

(C) take into consideration the impacts and use of fill and the flood risks 

associated with altered hydrology; 

(D) differentiate between a property that is located in a flood zone and 

a structure located on such property that is not at the same risk level for 

flooding as such property due to the elevation of the structure; 

(E) identify and incorporate natural features and their associated flood 

protection benefits into mapping and rates; and 

(F) identify, analyze, and incorporate the impact of significant changes to 

building and development throughout any river or costal water system, including all tributaries, which may impact flooding in areas downstream; 

and 

(3) provide that such rate maps are developed on a watershed basis. 

(c) REPORT.—If, in establishing new standards for flood insurance rate maps pursuant to subsection (a) of this section, the Administrator does not implement all of 

the recommendations of the Council made under the proposed new mapping standards developed by the Council pursuant to section 6(c), upon establishment of the 

new standards the Administrator shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate specifying which such recommendations were 

not adopted and explaining the reasons such recommendations were not adopted. 

(d) IMPLEMENTATION.—The Administrator shall, not later than the expiration of 

the 6-month period beginning upon establishment of the new standards for flood insurance rate maps pursuant to subsection (a) of this section, commence use of the 

new standards and updating of flood insurance rate maps in accordance with the 

new standards. Not later than the expiration of the 5-year period beginning upon 

the establishment of such new standards, the Administrator shall complete updating of all flood insurance rate maps in accordance with the new standards, subject 

to the availability of sufficient amounts for such activities provided in appropriation 

Acts. 

(e) TEMPORARY SUSPENSION OF MANDATORY PURCHASE REQUIREMENT FOR CERTAIN PROPERTIES.— 

(1) SUBMISSION OF ELEVATION CERTIFICATE.—Subject to paragraphs (2) and (3) 

of this subsection, subsections (a), (b), and (e) of section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a), and section 202(a) of such Act, 

shall not apply to a property located in an area designated as having a special 

flood hazard if the owner of such property submits to the Administrator an elevation certificate for such property showing that the lowest level of the primary 

residence on such property is at an elevation that is at least three feet higher 

than the elevation of the 100-year flood plain. 

(2) REVIEW OF SURVEY.—The Administrator shall accept as conclusive each 

elevation survey submitted under paragraph (1) unless the Administrator conVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6621 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
11 

ducts a subsequent elevation survey and determines that the lowest level of the 

primary residence on the property in question is not at an elevation that is at 

least three feet higher than the elevation of the 100-year flood plain. The Administrator shall provide any such subsequent elevation survey to the owner of 

such property. (3) DETERMINATIONS FOR PROPERTIES ON BORDERS OF SPECIAL FLOOD HAZARD

AREAS.— 

(A) EXPEDITED DETERMINATION.—In the case of any survey for a property submitted to the Administrator pursuant to paragraph (1) showing that a 

portion of the property is located within an area having special flood hazards and that a structure located on the property is not located within such 

area having special flood hazards, the Administrator shall expeditiously 

process any request made by an owner of the property for a determination 

pursuant to paragraph (2) or a determination of whether the structure is 

located within the area having special flood hazards. (B) PROHIBITION OF FEE.—If the Administrator determines pursuant to subparagraph (A) that the structure on the property is not located within 

the area having special flood hazards, the Administrator shall not charge 

a fee for reviewing the flood hazard data and shall not require the owner 

to provide any additional elevation data. (C) SIMPLIFICATION OF REVIEW PROCESS.—The Administrator shall collaborate with private sector flood insurers to simplify the review process for 

properties described in subparagraph (A) and to ensure that the review 

process provides for accurate determinations. (4) TERMINATION OF AUTHORITY.—This subsection shall cease to apply to a property on the date on which the Administrator updates the flood insurance 

rate map that applies to such property in accordance with the requirements of 

subsection (d). 

SEC. 8. TREATMENT OF LEVEES. 

Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 4101) is 

amended by adding at the end the following new subsection: ‘‘(k) TREATMENT OF LEVEES.—The Administrator may not issue flood insurance maps, or make effective updated flood insurance maps, that omit or disregard the 

actual protection afforded by an existing levee, floodwall, pump or other flood protection feature, regardless of the accreditation status of such feature.’’. 

SEC. 9. PRIVATIZATION INITIATIVES. 

(a) FEMA AND GAO REPORTS.—Not later than the expiration of the 18-month period beginning on the date of the enactment of this Act, the Administrator of the 

Federal Emergency Management Agency and the Comptroller General of the United 

States shall each conduct a separate study to assess a broad range of options, methods, and strategies for privatizing the national flood insurance program and shall 

each submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with recommendations for the best manner to accomplish such privatization. 

(b) PRIVATE RISK-MANAGEMENT INITIATIVES.— 

(1) AUTHORITY.—The Administrator of the Federal Emergency Management 

Agency may carry out such private risk-management initiatives under the national flood insurance program as the Administrator considers appropriate to 

determine the capacity of private insurers, reinsurers, and financial markets to 

assist communities, on a voluntary basis only, in managing the full range of financial risks associated with flooding. 

(2) ASSESSMENT.—Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Administrator shall assess 

the capacity of the private reinsurance, capital, and financial markets by seeking proposals to assume a portion of the program’s insurance risk and submit 

to the Congress a report describing the response to such request for proposals 

and the results of such assessment. 

(3) PROTOCOL FOR RELEASE OF DATA.—The Administrator shall develop a protocol to provide for the release of data sufficient to conduct the assessment required under paragraph (2). 

(c) REINSURANCE.—The National Flood Insurance Act of 1968 is amended— 

(1) in section 1331(a)(2) (42 U.S.C. 4051(a)(2)), by inserting ‘‘, including as reinsurance of insurance coverage provided by the flood insurance program’’ before ‘‘, on such terms’’; 

(2) in section 1332(c)(2) (42 U.S.C. 4052(c)(2)), by inserting ‘‘or reinsurance’’ 

after ‘‘flood insurance coverage’’; 

(3) in section 1335(a) (42 U.S.C. 4055(a))— 

(A) by inserting ‘‘(1)’’ after ‘‘(a)’’; and 


rfrederick on DSKD9S0YB1PROD with HEARING
12 

(B) by adding at the end the following new paragraph: ‘‘(2) The Administrator is authorized to secure reinsurance coverage of coverage provided by the flood insurance program from private market insurance, reinsurance, and capital market sources at rates and on terms determined by the Administrator to be reasonable and appropriate in an amount sufficient to maintain the 

ability of the program to pay claims and that minimizes the likelihood that the program will utilize the borrowing authority provided under section 1309.’’; (4) in section 1346(a) (12 U.S.C. 4082(a))— 

(A) in the matter preceding paragraph (1), by inserting ‘‘, or for purposes of securing reinsurance of insurance coverage provided by the program,’’ before ‘‘of any or all of’’; (B) in paragraph (1)— (i) by striking ‘‘estimating’’ and inserting ‘‘Estimating’’; and 

(ii) by striking the semicolon at the end and inserting a period; (C) in paragraph (2)— (i) by striking ‘‘receiving’’ and inserting ‘‘Receiving’’; and 

(ii) by striking the semicolon at the end and inserting a period; (D) in paragraph (3)— (i) by striking ‘‘making’’ and inserting ‘‘Making’’; and 

(ii) by striking ‘‘; and’’ and inserting a period; (E) in paragraph (4)— (i) by striking ‘‘otherwise’’ and inserting ‘‘Otherwise’’; and 

(ii) by redesignating such paragraph as paragraph (5); and (F) by inserting after paragraph (3) the following new paragraph: ‘‘(4) Placing reinsurance coverage on insurance provided by such program.’’; and 

(5) in section 1370(a)(3) (42 U.S.C. 4121(a)(3)), by inserting before the semi- colon at the end the following: ‘‘, is subject to the reporting requirements of the 

Securities Exchange Act of 1934, pursuant to section 13(a) or 15(d) of such Act 

(15 U.S.C. 78m(a), 78o(d)), or is authorized by the Administrator to assume reinsurance on risks insured by the flood insurance program’’. 

(d) ASSESSMENT OF CLAIMS-PAYING ABILITY.— 

(1) ASSESSMENT.—Not later than September 30 of each year, the Administrator of the Federal Emergency Management Agency shall conduct an assessment of the claims-paying ability of the national flood insurance program, including the program’s utilization of private sector reinsurance and reinsurance 

equivalents, with and without reliance on borrowing authority under section 

1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016). In conducting the assessment, the Administrator shall take into consideration regional 

concentrations of coverage written by the program, peak flood zones, and relevant mitigation measures. 

(2) REPORT.—The Administrator shall submit a report to the Congress of the 

results of each such assessment, and make such report available to the public, 

not later than 30 days after completion of the assessment. 

SEC. 10. FEMA ANNUAL REPORT ON 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 ‘‘ANNUAL REPORT TO CONGRESS’’; 

(2) in subsection (a)— 

(A) by striking ‘‘biennially’’; 

(B) by striking ‘‘the President for submission to’’; and 

(C) by inserting ‘‘not later than June 30 of each year’’ before the period 

at the end; 

(3) in subsection (b), by striking ‘‘biennial’’ and inserting ‘‘annual’’; and 

(4) by adding at the end the following new subsection: 

‘‘(c) FINANCIAL STATUS OF PROGRAM.—The report under this section for each year 

shall include information regarding the financial status of the national flood insurance program under this title, including a description of 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. ACTUARIAL RATES FOR SEVERE REPETITIVE LOSS PROPERTIES REFUSING MITIGATION OR PURCHASE OFFERS. 

Subsection (h) of section 1361A of the National Flood Insurance Act of 1968 (42 

U.S.C. 4102a(h)) is amended— 

(1) in paragraph (1)— 

(A) in subparagraph (B), by striking ‘‘150 percent’’ and all that follows 

through ‘‘paragraph (3)’’ and inserting ‘‘the applicable estimated risk preVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6621 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
13 

mium rate for such coverage for the area (or subdivision thereof) determined in accordance with section 1307(a), subject to phase-in of such rates 

in the same manner provided under paragraph (2) of section 1308(g) for 

properties described in paragraph (1) of such section’’; and 

(B) by inserting after and below subparagraph (B) the following: 

‘‘An offer to take action under paragraph (1) or (2) of subsection (c) shall be 

considered to be made for purposes of this paragraph with respect to a severe 

repetitive loss property regardless of the time that the offer was made and regardless of whether the Administrator has transferred financial assistance 

under this section to the State or community making the offer for funding such 

action, but only if the owner of the property is provided a reasonable period of 

time, not to exceed 15 days, to respond to the offer.’’; 

(2) by striking paragraphs (2) and (3); and 

(3) by redesignating paragraphs (4) through (6) as paragraphs (2) through (4), 

respectively. 

SEC. 12. MITIGATION ASSISTANCE. 

Subsection (e) of section 1366 of the National Flood Insurance Act of 1968 (42 

U.S.C. 4104c(e)) is amended by adding at the end the following new paragraph: 

‘‘(6) ELIGIBILITY OF DEMOLITION AND REBUILDING OF PROPERTIES.—The Administrator shall consider as an eligible activity the demolition and rebuilding of 

properties to at least base flood levels or higher, if required by the Administrator or if required by any State or local ordinance, and in accordance with 

project implementation criteria established by the Administrator.’’. 

SEC. 13. GRANTS FOR DIRECT FUNDING OF MITIGATION ACTIVITIES FOR INDIVIDUAL REPETITIVE CLAIMS PROPERTIES. 

(a) DIRECT GRANTS TO OWNERS.—Section 1323 of the National Flood Insurance 

Act of 1968 (42 U.S.C. 4030) is amended— 

(1) in the section heading, by inserting ‘‘direct’’ before ‘‘grants’’; and 

(2) in subsection (a), in the the matter preceding paragraph (1)— 

(A) by inserting ‘‘, to owners of such properties,’’ before ‘‘for mitigation actions’’; and 

(B) by striking ‘‘1’’ and inserting ‘‘two’’. 

(b) AVAILABILITY OF FUNDS.—Paragraph (9) of section 1310(a) of the National 

Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended by inserting ‘‘which 

shall remain available until expended,’’ after ‘‘any fiscal year,’’. 

SEC. 14. NOTIFICATION TO HOMEOWNERS REGARDING MANDATORY PURCHASE REQUIREMENT APPLICABILITY AND RATE PHASE-INS. 

Section 201 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4105) is 

amended by adding at the end the following new subsection: 

‘‘(f) ANNUAL NOTIFICATION.—The Administrator, in consultation with affected communities, shall establish and carry out a plan to notify residents of areas having 

special flood hazards, on an annual basis— 

‘‘(1) that they reside in such an area; 

‘‘(2) of the geographical boundaries of such area; 

‘‘(3) of whether section 1308(h) of the National Flood Insurance Act of 1968 

applies to properties within such area; 

‘‘(4) of the provisions of section 102 requiring purchase of flood insurance coverage for properties located in such an area, including the date on which such 

provisions apply with respect to such area, taking into consideration section 

102(i); and 

‘‘(5) of a general estimate of what similar homeowners in similar areas typically pay for flood insurance coverage, taking into consideration section 1308(g) 

of the National Flood Insurance Act of 1968.’’. 

SEC. 15. NOTIFICATION OF ESTABLISHMENT OF FLOOD ELEVATIONS. 

Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 4101), as 

amended by the preceding provisions of this Act, is further amended by adding at 

the end the following new subsection: 

‘‘(l) NOTIFICATION TO MEMBERS OF CONGRESS OF MAP MODERNIZATION.—Upon any 

revision or update of any floodplain area or flood-risk zone pursuant to subsection 

(f), any decision pursuant to subsection (f)(1) that such revision or update is necessary, any issuance of preliminary maps for such revision or updating, or any other 

significant action relating to any such revision or update, the Administrator shall 

notify the Senators for each State affected, and each Member of the House of Representatives for each congressional district affected, by such revision or update in 

writing of the action taken.’’. 


rfrederick on DSKD9S0YB1PROD with HEARING
14 

SEC. 16. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS INSURANCE. 

The National Flood Insurance Act of 1968 is amended by inserting after section 

1308 (42 U.S.C. 4015) the following new section: 

‘‘SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS INSURANCE. 

‘‘(a) IN GENERAL.—The Administrator shall, upon entering into a contract for flood 

insurance coverage under this title for any property— 

‘‘(1) provide to the insured sufficient copies of the notice developed pursuant 

to subsection (b); and 

‘‘(2) require the insured to provide a copy of the notice, or otherwise provide 

notification of the information under subsection (b) in the manner that the manager or landlord deems most appropriate, to each such tenant and to each new 

tenant upon commencement of such a tenancy. 

‘‘(b) NOTICE.—Notice to a tenant of a property in accordance with this subsection 

is written notice that clearly informs a tenant— 

‘‘(1) whether the property is located in an area having special flood hazards; 

‘‘(2) that flood insurance coverage is available under the national flood insurance program under this title for contents of the unit or structure leased by the 

tenant; 

‘‘(3) of the maximum amount of such coverage for contents available under 

this title at that time; and 

‘‘(4) of where to obtain information regarding how to obtain such coverage, including a telephone number, mailing address, and Internet site of the Administrator where such information is available.’’. 

SEC. 17. NOTIFICATION TO POLICY HOLDERS REGARDING DIRECT MANAGEMENT OF POLICY 

BY FEMA. 

Part C of chapter II of the National Flood Insurance Act of 1968 (42 U.S.C. 4081 

et seq.) is amended by adding at the end the following new section: 

‘‘SEC. 1349. NOTIFICATION TO POLICY HOLDERS REGARDING DIRECT MANAGEMENT OF POLICY BY FEMA. 

‘‘(a) NOTIFICATION.—Not later than 60 days before the date on which a transferred 

flood insurance policy expires, and annually thereafter until such time as the Federal Emergency Management Agency is no longer directly administering such policy, 

the Administrator shall notify the holder of such policy that— 

‘‘(1) the Federal Emergency Management Agency is directly administering the 

policy; 

‘‘(2) such holder may purchase flood insurance that is directly administered 

by an insurance company; and 

‘‘(3) purchasing flood insurance offered under the National Flood Insurance 

Program that is directly administered by an insurance company will not alter 

the coverage provided or the premiums charged to such holder that otherwise 

would be provided or charged if the policy was directly administered by the Federal Emergency Management Agency. 

‘‘(b) DEFINITION.—In this section, the term ‘transferred flood insurance policy’ 

means a flood insurance policy that— 

‘‘(1) was directly administered by an insurance company at the time the policy 

was originally purchased by the policy holder; and 

‘‘(2) at the time of renewal of the policy, direct administration of the policy 

was or will be transferred to the Federal Emergency Management Agency.’’. 

SEC. 18. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW 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 the following conspicuous statements 

and information: (1) 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 the national flood insurance 

program; (2) a telephone number and a location on the Internet by which a home 

owner or purchaser can contact the national flood insurance program; and (3) that 

the escrowing of flood insurance payments is required for many loans under section 

102(d) of the Flood Disaster Protection Act of 1973, and may be a convenient and 

available option with respect to other loans.’’. 


rfrederick on DSKD9S0YB1PROD with HEARING
15 

SEC. 19. REIMBURSEMENT FOR COSTS INCURRED BY HOMEOWNERS OBTAINING LETTERS OF 

MAP AMENDMENT. 

(a) IN GENERAL.—Section 1360 of the National Flood Insurance Act of 1968 (42 

U.S.C. 4101), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsection: 

‘‘(m) REIMBURSEMENT.— 

‘‘(1) REQUIREMENT UPON BONA FIDE OFFER.—If an owner of any property located in an area described in section 102(i)(3) of the Flood Disaster Protection 

Act of 1973 obtains a letter of map amendment due to a bona fide error on the 

part of the Administrator of the Federal Emergency Management Agency, the 

Administrator shall reimburse such owner, or such entity or jurisdiction acting 

on such owner’s behalf, for any reasonable costs incurred in obtaining such letter. 

‘‘(2) REASONABLE COSTS.—The Administrator shall, by regulation or notice, determine a reasonable amount of costs to be reimbursed under paragraph (1), except that such costs shall not include legal or attorneys fees. In determining the 

reasonableness of costs, the Administrator shall only consider the actual costs 

to the owner of utilizing the services of an engineer, surveyor, or similar services.’’. 

(b) REGULATIONS.—Not later than 90 days after the date of the enactment of this 

Act, the Administrator of the Federal Emergency Management Agency shall issue 

the regulations or notice required under section 1360(m)(2) of the National Flood Insurance Act of 1968, as added by the amendment made by subsection (a) of this section. 

SEC. 20. TREATMENT OF SWIMMING POOL ENCLOSURES OUTSIDE OF HURRICANE SEASON. 

Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.) 

is amended by adding at the end the following new section: 

‘‘SEC. 1325. TREATMENT OF SWIMMING POOL ENCLOSURES OUTSIDE OF HURRICANE SEASON. 

‘‘In the case of any property that is otherwise in compliance with the coverage and 

building requirements of the national flood insurance program, the presence of an 

enclosed swimming pool located at ground level or in the space below the lowest 

floor of a building after November 30 and before June 1 of any year shall have no 

effect on the terms of coverage or the ability to receive coverage for such building 

under the national flood insurance program established pursuant to this title, if the 

pool is enclosed with non-supporting breakaway walls.’’. 

SEC. 21. CDBG ELIGIBILITY FOR FLOOD INSURANCE OUTREACH ACTIVITIES AND COMMUNITY 

BUILDING CODE ADMINISTRATION GRANTS. 

Section 105(a) of the Housing and Community Development Act of 1974 (42 

U.S.C. 5305(a)) is amended— 

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

(2) in paragraph (25), by striking the period at the end and inserting a semicolon; and 

(3) by adding at the end the following new paragraphs: 

‘‘(26) supplementing existing State or local funding for administration of 

building code enforcement by local building code enforcement departments, including for increasing staffing, providing staff training, increasing staff competence and professional qualifications, and supporting individual certification 

or departmental accreditation, and for capital expenditures specifically dedicated to the administration of the building code enforcement department, except 

that, to be eligible to use amounts as provided in this paragraph— 

‘‘(A) a building code enforcement department shall provide matching, nonFederal funds to be used in conjunction with amounts used under this paragraph in an amount— 

‘‘(i) in the case of a building code enforcement department serving an 

area with a population of more than 50,000, equal to not less than 50 

percent of the total amount of any funds made available under this title 

that are used under this paragraph; 

‘‘(ii) in the case of a building code enforcement department serving 

an area with a population of between 20,001 and 50,000, equal to not 

less than 25 percent of the total amount of any funds made available 

under this title that are used under this paragraph; and 

‘‘(iii) in the case of a building code enforcement department serving 

an area with a population of less than 20,000, equal to not less than 

12.5 percent of the total amount of any funds made available under 

this title that are used under this paragraph; 

except that the Secretary may waive the matching fund requirements under 

this subparagraph, in whole or in part, based upon the level of economic 


rfrederick on DSKD9S0YB1PROD with HEARING
16 

distress of the jurisdiction in which is located the local building code enforcement department that is using amounts for purposes under this paragraph, and shall waive such matching fund requirements in whole for any 

recipient jurisdiction that has dedicated all building code permitting fees to 

the conduct of local building code enforcement; and ‘‘(B) any building code enforcement department using funds made avail- able under this title for purposes under this paragraph shall empanel a 

code administration and enforcement team consisting of at least 1 full-time 

building code enforcement officer, a city planner, and a health planner or 

similar officer; and 

‘‘(27) provision of assistance to local governmental agencies responsible for floodplain management activities (including such agencies of Indians tribes, as 

such term is defined in section 4 of the Native American Housing Assistance 

and Self-Determination Act of 1996 (25 U.S.C. 4103)) in communities that participate in the national flood insurance program under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.), only for carrying out outreach activities to encourage and facilitate the purchase of flood insurance protection 

under such Act by owners and renters of properties in such communities and 

to promote educational activities that increase awareness of flood risk reduction; except that— ‘‘(A) amounts used as provided under this paragraph shall be used only 

for activities designed to— 

‘‘(i) identify owners and renters of properties in communities that 

participate in the national flood insurance program, including owners 

of residential and commercial properties; 

‘‘(ii) notify such owners and renters when their properties become included in, or when they are excluded from, an area having special flood 

hazards and the effect of such inclusion or exclusion on the applicability of the mandatory flood insurance purchase requirement under 

section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 

4012a) to such properties; 

‘‘(iii) educate such owners and renters regarding the flood risk and 

reduction of this risk in their community, including the continued flood 

risks to areas that are no longer subject to the flood insurance mandatory purchase requirement; 

‘‘(iv) educate such owners and renters regarding the benefits and 

costs of maintaining or acquiring flood insurance, including, where applicable, lower-cost preferred risk policies under this title for such properties and the contents of such properties; 

‘‘(v) encourage such owners and renters to maintain or acquire such 

coverage; 

‘‘(vi) notify such owners of where to obtain information regarding how 

to obtain such coverage, including a telephone number, mailing address, and Internet site of the Administrator of the Federal Emergency 

Management Agency (in this paragraph referred to as the ‘Administrator’) where such information is available; and 

‘‘(vii) educate local real estate agents in communities participating in 

the national flood insurance program regarding the program and the 

availability of coverage under the program for owners and renters of 

properties in such communities, and establish coordination and liaisons 

with such real estate agents to facilitate purchase of coverage under 

the National Flood Insurance Act of 1968 and increase awareness of 

flood risk reduction; 

‘‘(B) in any fiscal year, a local governmental agency may not use an 

amount under this paragraph that exceeds 3 times the amount that the 

agency certifies, as the Secretary, in consultation with the Administrator, 

shall require, that the agency will contribute from non-Federal funds to be 

used with such amounts used under this paragraph only for carrying out 

activities described in subparagraph (A); and for purposes of this subparagraph, the term ‘non-Federal funds’ includes State or local government 

agency amounts, in-kind contributions, any salary paid to staff to carry out 

the eligible activities of the local governmental agency involved, the value 

of the time and services contributed by volunteers to carry out such services 

(at a rate determined by the Secretary), and the value of any donated material or building and the value of any lease on a building; 

‘‘(C) a local governmental agency that uses amounts as provided under 

this paragraph may coordinate or contract with other agencies and entities 

having particular capacities, specialties, or experience with respect to certain populations or constituencies, including elderly or disabled families or 


rfrederick on DSKD9S0YB1PROD with HEARING
17 

persons, to carry out activities described in subparagraph (A) with respect 

to such populations or constituencies; and 

‘‘(D) each local government agency that uses amounts as provided under 

this paragraph shall submit a report to the Secretary and the Administrator, not later than 12 months after such amounts are first received, 

which shall include such information as the Secretary and the Administrator jointly consider appropriate to describe the activities conducted using 

such amounts and the effect of such activities on the retention or acquisition of flood insurance coverage.’’. 

SEC. 22. TECHNICAL CORRECTIONS. 

(a) FLOOD DISASTER PROTECTION ACT OF 1973.—The Flood Disaster Protection Act 

of 1973 (42 U.S.C. 4002 et seq.) is amended— 

(1) by striking ‘‘Director’’ each place such term appears, except in section 

102(f)(3) (42 U.S.C. 4012a(f)(3)), and inserting ‘‘Administrator’’; and 

(2) in section 201(b) (42 U.S.C. 4105(b)), by striking ‘‘Director’s’’ and inserting 

‘‘Administrator’s’’. 

(b) NATIONAL FLOOD INSURANCE ACT OF 1968.—The National Flood Insurance Act 

of 1968 (42 U.S.C. 4001 et seq.) is amended— 

(1) by striking ‘‘Director’’ each place such term appears and inserting ‘‘Administrator’’; and 

(2) in sections 1363 (42 U.S.C. 4104), by striking ‘‘Director’s’’ each place such 

term appears and inserting ‘‘Administrator’s’’. 

(c) FEDERAL FLOOD INSURANCE ACT OF 1956.—Section 15(e) of the Federal Flood 

Insurance Act of 1956 (42 U.S.C. 2414(e)) is amended by striking ‘‘Director’’ each 

place such term appears and inserting ‘‘Administrator’’. 

SEC. 23. REPORT ON WRITE-YOUR-OWN PROGRAM. 

Not later than one year after the date of the enactment of this Act, the Administrator of the Federal Emergency Management Agency shall submit to Congress a 

report describing procedures and policies that the Administrator can implement to 

limit the percentage of flood insurance polices directly managed by the Agency to 

not more than 10 percent, if possible, of all flood insurance policies issued in accordance with the National Flood Insurance Program. 

SEC. 24. STUDIES OF VOLUNTARY COMMUNITY-BASED FLOOD INSURANCE OPTIONS. 

(a) STUDIES.—The Administrator of the Federal Emergency Management Agency 

and the Comptroller General of the United States shall each conduct a separate 

study to assess options, methods, and strategies for offering voluntary communitybased flood insurance policy options and incorporating such options into the national 

flood insurance program. Such studies shall take into consideration and analyze how 

the policy options would affect communities having varying economic bases, geographic locations, flood hazard characteristics or classifications, and flood management approaches. 

(b) REPORTS.—Not later than the expiration of the 18-month period beginning on 

the date of the enactment of this Act, the Administrator of the Federal Emergency 

Management Agency and the Comptroller General of the United States shall each 

submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on 

the results and conclusions of the study such agency conducted under subsection (a), 

and each such report shall include recommendations for the best manner to incorporate voluntary community-based flood insurance options into the national flood insurance program and for a strategy to implement such options that would encourage 

communities to undertake flood mitigation activities. 

SEC. 25. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN MANAGEMENT CRITERIA. 

Not later than the expiration of the 6-month period beginning on the date of the 

enactment of this Act, the Administrator of the Federal Emergency Management 

Agency shall conduct a study and submit a report to the Committee on Financial 

Services of the House of Representatives and the Committee on Banking, Housing, 

and Urban Affairs of the Senate regarding the impact, effectiveness, and feasibility 

of amending section 1361 of the National Flood Insurance Act of 1968 (42 U.S.C. 

4102) to include widely used and nationally recognized building codes as part of the 

floodplain management criteria developed under such section, and shall determine— 

(1) the regulatory, financial, and economic impacts of such a building code requirement on homeowners, States and local communities, local land use policies, and the Federal Emergency Management Agency; 

(2) the resources required of State and local communities to administer and 

enforce such a building code requirement; 


rfrederick on DSKD9S0YB1PROD with HEARING
18 

(3) the effectiveness of such a building code requirement in reducing flood-re- lated damage to buildings and contents; (4) the impact of such a building code requirement on the actuarial soundness of the National Flood Insurance Program; (5) the effectiveness of nationally recognized codes in allowing innovative ma- terials and systems for flood-resistant construction; (6) the feasibility and effectiveness of providing an incentive in lower pre- mium rates for flood insurance coverage under such Act for structures meeting 

whichever of such widely used and nationally recognized building code or any 

applicable local building code provides greater protection from flood damage; (7) the impact of such a building code requirement on rural communities with different building code challenges than more urban environments; and (8) the impact of such a building code requirement on Indian reservations. 

SEC. 26. STUDY ON GRADUATED RISK. 

(a) STUDY.— The National Academy of Sciences shall conduct a study exploring methods for understanding graduated risk behind levees and the associated land development, insurance, and risk communication dimensions, which shall— (1) research, review, and recommend current best practices for estimating di- rect annualized flood losses behind levees for residential and commercial structures; 

(2) rank such practices based on their best value, balancing cost, scientific in- tegrity, and the inherent uncertainties associated with all aspects of the loss estimate, including geotechnical engineering, flood frequency estimates, economic 

value, and direct damages; (3) research, review, and identify current best floodplain management and land use practices behind levees that effectively balance social, economic, and 

environmental considerations as part of an overall flood risk management strategy; (4) identify examples where such practices have proven effective and rec- ommend methods and processes by which they could be applied more broadly 

across the United States, given the variety of different flood risks, State and 

local legal frameworks, and evolving judicial opinions; (5) research, review, and identify a variety of flood insurance pricing options for flood hazards behind levees which are actuarially sound and based on the 

flood risk data developed using the top three best value approaches identified 

pursuant to paragraph (1); (6) evaluate and recommend methods to reduce insurance costs through cre- ative arrangements between insureds and insurers while keeping a clear accounting of how much financial risk is being borne by various parties such that 

the entire risk is accounted for, including establishment of explicit limits on disaster aid or other assistance in the event of a flood; and 

(7) taking into consideration the recommendations pursuant to paragraphs (1) 

through (3), recommend approaches to communicating the associated risks to 

community officials, homeowners, and other residents. 

(b) REPORT.—Not later than the expiration of the 12-month period beginning on 

the date of the enactment of this Act, the National Academy of Sciences shall submit a report to the Committees on Financial Services and Science, Space, and Technology of the House of Representatives and the Committees on Banking, Housing, 

and Urban Affairs and Commerce, Science and Transportation of the Senate on the 

study under subsection (a) including the information and recommendations required 

under such subsection. 

SEC. 27. NO CAUSE OF ACTION. 

No cause of action shall exist and no claim may be brought against the United 

States for violation of any notification requirement imposed upon the United States 

by this Act or any amendment made by this Act. 

PURPOSE AND SUMMARY

H.R. 1309, the Flood Insurance Reform Act of 2011, reauthorizes 

the National Flood Insurance Program (NFIP) through September 

30, 2016, and amends the National Flood Insurance Act to ensure 

the immediate and near-term fiscal and administrative health of 

the NFIP. The bill also ensures the NFIP’s continued viability by 

encouraging broader participation in the program, increasing financial accountability, eliminating unnecessary rate subsidies, and updating the program to meet the needs of the 21st century. The key 


rfrederick on DSKD9S0YB1PROD with HEARING
19 

provisions of H.R. 1309 include: (1) a five-year reauthorization of 

the NFIP; (2) a three-year delay in the mandatory purchase requirement for certain properties in newly designated Special Flood 

Hazard Areas (SFHAs); (3) a phase-in of full-risk, actuarial rates 

for areas newly designated as Special Flood Hazard; (4) a reinstatement of the Technical Mapping Advisory Council; and (5) an emphasis on greater private sector participation in providing flood insurance coverage. 

BACKGROUND AND NEED FOR LEGISLATION

In 1968, Congress created the National Flood Insurance Program (NFIP) to address the nation’s flood exposure and the need to alleviate taxpayers’ responsibility for flood losses paid out in the form 

of post-disaster relief following annual flooding and severe flooding 

following hurricanes. At the time, Congress recognized that the inherent challenges of managing flood risk were too great for the private sector and that no viable private sector insurance alternative 

existed. The Flood Disaster Protection Act of 1973 established a 

mandatory flood insurance purchase requirement for structures located in identified Special Flood Hazard Areas. 

Under the 1973 Act, Federally regulated lenders were obligated to require flood insurance on any mortgage issued or guaranteed by 

the Federal government in a designated SFHA in a participating 

community. By 1994, lax enforcement of the mandatory purchase 

requirements led Congress to require lenders to purchase coverage 

on behalf of—and bill premiums to—mortgagees who failed to purchase coverage on their own (called ‘‘forced placed insurance’’). 

Since 1994, lenders who fail to enforce the mandatory purchase requirement have been subject to civil penalties. Eligible homeowners, renters, and business owners purchase cov- erage under the program either directly from the NFIP or, more 

often, from private insurers that voluntarily participate in the 

Write Your Own (WYO) program. WYO insurers take responsibility 

for policy administration and claims processing but assume no financial risk in settling claims. As of 2010, there are approximately 

5.6 million residential and commercial policyholders under the 

NFIP. 

The NFIP is administered by the Federal Emergency Manage- ment Agency (FEMA), which is housed in the Department of Homeland Security. The NFIP reduces future flood losses through: (i) 

flood hazard identification; (ii) floodplain management (e.g., land 

use controls and building codes); and (iii) insurance protection. The 

NFIP generated premium income of approximately $3.3 billion in 

2010. The 2005 hurricane season resulted in significant claims 

which the program’s annual premium income could not cover. To 

pay the claims, the NFIP borrowed from the U.S. Treasury. Prior 

to 2005, the NFIP’s borrowing authority had been limited by statute to $1.5 billion. Congress made up for the shortfall by increasing 

the program’s borrowing authority three times between September 

2005 and January 2007 (from $1.5 billion to $20.8 billion). The 

NFIP currently owes $17.775 billion to the U.S. Treasury. 

Congress last passed a long-term NFIP reauthorization and re- form bill in 2004 (P.L. 108–264). The House and Senate each 

passed significant reform measures during the 110th Congress but 

could not agree on final legislation. Since September 2008, the 


rfrederick on DSKD9S0YB1PROD with HEARING
20 

NFIP has been extended eleven times; the program authorization 

has lapsed three times during that same time period. Last year, 

after several short-term extensions and three temporary lapses in 

the program, Congress extended the current program through September 30, 2011. These short-term extensions and lapses in the 

program have created needless uncertainty in the residential and 

commercial real estate sectors in communities across the country. 

Without flood insurance from the NFIP, homebuyers or businesses are unable to complete real estate closings on properties located in SFHAs. From an insurance business perspective, WYO 

companies that voluntarily participate in the NFIP find it difficult 

to continue participating, given the uncertainty of the NFIP authorization. 

In administering the NFIP, FEMA: (i) identifies and maps flood- prone areas eligible to participate in the program; and (ii) sets land 

use controls and building codes that flood-prone communities are 

required to adopt and enforce in order to participate in the program. FEMA issues Flood Insurance Rate Maps (FIRMs) that delineate SFHAs, determined to have a ‘‘one chance in 100’’ of flooding in any given year (the ‘‘100–year floodplain’’). Because FIRMs 

determine where and at what rate insurance under the program is 

required, outdated or inaccurate FIRMs result in flood-prone properties either being left out of the program or being charged insufficient rates. FEMA currently is engaged in a multi-year flood map 

modernization program to update, revise, and digitize more than 

20,000 flood maps, some of which date back to the 1970s. The revising, updating and promulgation of these new flood maps has 

drawn considerable attention around the country as revised SFHAs 

include properties not previously required to purchase flood insurance. 

Under the NFIP, FEMA has established minimum flood plain 

management regulations that communities must adopt and enforce 

in order to be eligible for insurance under the program. Related to 

this land-use function, the NFIP includes mitigation programs, 

under which the Federal government purchases properties subject 

to repeated flood losses and relocates property owners to lower risk 

areas. 

The NFIP has a two-tiered rate structure: (i) a subsidized preFIRM rate for structures built before the 1974 mandatory purchase 

requirement went into effect for all FIRM properties; and (ii) an 

‘‘actuarial’’ rate for structures built or substantially improved after 

1974. Actuarial rates for the NFIP are not the same as actuarial 

rates for private market-based insurance, however. Under the 

NFIP, the actuarial rate has been less than the rate that would be 

charged for private, market-based flood insurance coverage. PreFIRM rates are determined through a Federal rule-making process 

with criteria designed to encourage participation in the program 

and not, by definition, to generate premium income sufficient to 

pay anticipated claims on pre-FIRM properties. 

Congress initially appropriated funds to subsidize the difference 

between pre-FIRM and ‘‘actuarial’’ rates, expecting that, over time, 

the percentage of pre-FIRM structures would decline and that most 

or all of the structures insured under the program would be subject 

to ‘‘actuarial’’ rates. These appropriations ended in 1985; however, 

pre-FIRM structures continue to represent approximately 24 perVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00020 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
21 

cent of structures insured under the NFIP (there are currently 

more than a million pre-FIRM properties). Between 1985 and 2005, 

the NFIP used its ‘‘actuarial’’ rate premiums, interest earned on 

those premiums, and borrowing authority to cover any shortfalls 

that resulted from the program’s two-tier rate structure. The program’s ‘‘actuarial’’ rates also are designed, in part, to en- courage participation in the program. As a result, these ‘‘actuarial’’ 

rates do not follow traditional underwriting methods designed to 

generate premium income sufficient to pay all reasonably anticipated claims and expenses. Instead, rates under the program are 

designed only to generate annual premium income sufficient to 

cover expenses and the average annual claims paid under the program since 1978. In ‘‘bad’’ years, when actual annual claims have 

exceeded the program’s average annual claims, the NFIP has used 

its borrowing authority to make up the shortfall. In ‘‘good’’ years, 

when average annual claims have exceeded actual annual claims, 

the NFIP has either used surplus premiums to repay funds borrowed in ‘‘bad’’ years or has saved surplus premiums to cover above 

average claims in future ‘‘bad’’ years. Since 2006, the Government Accountability Office (GAO) has identified the NFIP as ‘‘high-risk’’ because of inadequate management and insufficient funds. H.R. 1309 institutes reforms that will 

improve NFIP’s financial stability, reduce the burden on taxpayers, 

and facilitate the creation of a private market that eliminates taxpayer risk over the long-term. 

HEARINGS

The Subcommittee on Insurance, Housing and Community Op- portunity held a hearing on March 11, 2011 entitled ‘‘Legislative 

Proposals to Reform the National Flood Insurance Program.’’ The 

following witnesses testified: 

Panel One 

• Orice Williams Brown, Managing Director, Government Accountability Office • Sally McConkey, Vice Chair, Association of State Flood Plain Managers and Manager, Coordinated Hazard Assessment and Mapping Program, Illinois State Water Survey 

Panel Two 

• Stephen Ellis, on behalf of the SmarterSafer Coalition, and 

Vice President, Taxpayers for Common Sense, Washington, 

D.C. • Terry Sullivan, Chair, Committee on Flood Insurance, National Association of REALTORS® and Owner, Sullivan Realty, Spokane, Washington • Spencer Houldin, Chair, Government Affairs Committee, 

Independent Insurance Agents and Brokers of America and 

President, Ericson Insurance Services, Washington Depot, Connecticut 

• Franklin Nutter, President, Reinsurance Association of 

America, Washington, D.C. 

• Sandra G. Parrillo, Chair, National Association of Mutual 

Insurance Companies and President and CEO of Providence 

Mutual Fire Insurance Company, Warwick, Rhode Island 


rfrederick on DSKD9S0YB1PROD with HEARING
22 

• Donna Jallick, on behalf of the Property Casualty Insurers 

Association of America, and Vice President, Flood Operations, 

Harleysville Insurance, Harleysville, Pennsylvania • Barry Rutenberg, First Vice Chairman, National Association of Home Builders, Washington, D.C. 

The Subcommittee on Insurance, Housing and Community Opportunity held a hearing on April 1, 2011 entitled ‘‘Legislative Proposals to Reform the National Flood Insurance Program, Part II.’’ 

There was one witness: The Honorable W. Craig Fugate, Administrator, Federal Emergency Management Agency. 

COMMITTEE CONSIDERATION

The Subcommittee on Insurance, Housing and Community Opportunity met in open session on April 8, 2011 and ordered H.R. 

1309, Flood Insurance Reform Act of 2011, as amended, favorably 

reported to the Full Committee by a voice vote. 

The Committee on Financial Services met in open session on 

May 12, 2011 and ordered H.R. 1309, Flood Insurance Reform Act 

of 2011, as amended, favorably reported to the House by a record 

vote of 54 yeas and 0 nays (Record vote no. FC–28). 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Chairman Bachus to report the bill, as amended, to the House with a 

favorable recommendation was agreed to by a record vote of 54 

yeas and 0 nays (Record vote no. FC–28). The names of Members 

voting for and against follow: 

RECORD VOTE NO. FC–28 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Bachus ........................... X .............. .............. Mr. Frank (MA) ..................... X .............. ..............

Mr. Hensarling ...................... X .............. .............. Ms. Waters ........................... X .............. ..............

Mr. King (NY) ........................ X .............. .............. Ms. Maloney ......................... X .............. ..............

Mr. Royce .............................. X .............. .............. Mr. Gutierrez ........................ ......... .............. ..............

Mr. Lucas .............................. X .............. .............. Ms. Vela

 ́

zquez ...................... X .............. ..............

Mr. Paul ................................ ......... .............. .............. Mr. Watt ............................... X .............. ..............

Mr. Manzullo ......................... X .............. .............. Mr. Ackerman ....................... ......... .............. ..............

Mr. Jones ............................... X .............. .............. Mr. Sherman ........................ X .............. ..............

Mrs. Biggert .......................... X .............. .............. Mr. Meeks ............................. ......... .............. ..............

Mr. Gary G. Miller (CA) ......... X .............. .............. Mr. Capuano ........................ X .............. ..............

Ms. Capito ............................ X .............. .............. Mr. Hinojosa ......................... X .............. ..............

Mr. Garrett ............................ X .............. .............. Mr. Clay ................................ X .............. ..............

Mr. Neugebauer .................... X .............. .............. Mrs. McCarthy (NY) .............. ......... .............. ..............

Mr. McHenry .......................... X .............. .............. Mr. Baca .............................. ......... .............. ..............

Mr. Campbell ........................ X .............. .............. Mr. Lynch ............................. X .............. ..............

Ms. Bachmann ...................... X .............. .............. Mr. Miller (NC) ..................... X .............. ..............

Mr. McCotter ......................... X .............. .............. Mr. David Scott (GA) ............ X .............. ..............

Mr. McCarthy (CA) ................ X .............. .............. Mr. Al Green (TX) ................. X .............. ..............

Mr. Pearce ............................. X .............. .............. Mr. Cleaver ........................... X .............. ..............

Mr. Posey .............................. X .............. .............. Ms. Moore ............................. X .............. ..............

Mr. Fitzpatrick ....................... X .............. .............. Mr. Ellison ............................ ......... .............. ..............

Mr. Westmoreland ................. X .............. .............. Mr. Perlmutter ...................... X .............. ..............

Mr. Luetkemeyer .................... X .............. .............. Mr. Donnelly ......................... X .............. ..............

Mr. Huizenga ......................... X .............. .............. Mr. Carson ........................... X .............. ..............

Mr. Duffy ............................... X .............. .............. Mr. Himes ............................. X .............. ..............

Ms. Hayworth ........................ X .............. .............. Mr. Peters ............................. X .............. ..............

Mr. Renacci ........................... X .............. .............. Mr. Carney ............................ X .............. ..............


rfrederick on DSKD9S0YB1PROD with HEARING
23 

RECORD VOTE NO. FC–28—Continued 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Hurt ................................ X 

Mr. Dold ................................ X 

Mr. Schweikert ...................... X 

Mr. Grimm ............................. X 

Mr. Canseco .......................... X 

Mr. Stivers ............................ X 

Mr. Fincher ............................ X 

During consideration of H.R. 1309, the following amendments 

were considered: 

1. An amendment offered by Mr. Hensarling, no. 11, to strike the 

provision allowing FEMA to provide, under certain circumstances, 

additional coverage for business interruption and cost of living expenses, was not agreed to by a record vote of 9 yeas, 38 nays and 

1 present (Record vote no. FC–26). 

RECORD VOTE NO. FC–26 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Bachus ........................... ......... X .............. Mr. Frank (MA) .............................. .......... X ..............

Mr. Hensarling ..................... X ......... .............. Ms. Waters .................................... .......... X ..............

Mr. King (NY) ....................... ......... X .............. Mrs. Maloney ................................. .......... X ..............

Mr. Royce ............................. X ......... .............. Mr. Gutierrez ................................. .......... ......... ..............

Mr. Lucas ............................. ......... X .............. Ms. Vela

 ́

zquez ............................... .......... X ..............

Mr. Paul ............................... ......... ......... .............. Mr. Watt ........................................ .......... X ..............

Mr. Manzullo ........................ ......... X .............. Mr. Ackerman ................................ .......... ......... ..............

Mr. Jones .............................. ......... X .............. Mr. Sherman ................................. .......... X ..............

Mrs. Biggert ......................... ......... X .............. Mr. Meeks ..................................... .......... ......... ..............

Mr. Gary G. Miller (CA) ........ ......... X .............. Mr. Capuano ................................. .......... X ..............

Mrs. Capito .......................... ......... X .............. Mr. Hinojosa .................................. .......... X ..............

Mr. Garrett ........................... X ......... .............. Mr. Clay ........................................ .......... X ..............

Mr. Neugebauer .................... X ......... .............. Mrs. McCarthy (NY) ...................... .......... ......... ..............

Mr. McHenry ......................... X ......... .............. Mr. Baca ....................................... .......... ......... ..............

Mr. Campbell ....................... X ......... .............. Mr. Lynch ...................................... .......... X ..............

Mrs. Bachmann .................... X ......... .............. Mr. Miller (NC) .............................. .......... X ..............

Mr. McCotter ........................ ......... X .............. Mr. David Scott (GA) .................... .......... X ..............

Mr. McCarthy (CA) ............... ......... ......... .............. Mr. Al Green (TX) .......................... .......... X ..............

Mr. Pearce ............................ ......... X .............. Mr. Cleaver ................................... .......... X ..............

Mr. Posey .............................. ......... ......... .............. Ms. Moore ..................................... .......... X ..............

Mr. Fitzpatrick ...................... ......... ......... X Mr. Ellison ..................................... .......... ......... ..............

Mr. Westmoreland ................ ......... ......... .............. Mr. Perlmutter ............................... .......... X ..............

Mr. Luetkemeyer ................... ......... X .............. Mr. Donnelly .................................. .......... X ..............

Mr. Huizenga ........................ ......... X .............. Mr. Carson .................................... .......... ......... ..............

Mr. Duffy .............................. ......... X .............. Mr. Himes ..................................... .......... X ..............

Ms. Hayworth ....................... X ......... .............. Mr. Peters ..................................... .......... X ..............

Mr. Renacci .......................... ......... X .............. Mr. Carney .................................... .......... ......... ..............

Mr. Hurt ................................ X ......... ..............

Mr. Dold ............................... ......... X ..............

Mr. Schweikert ..................... ......... ......... ..............

Mr. Grimm ............................ ......... X ..............

Mr. Canseco ......................... ......... X ..............

Mr. Stivers ............................ ......... X ..............

Mr. Fincher ........................... ......... X ..............

2. An amendment offered by Mr. Hensarling, no. 21, to eliminate 

all existing pre-FIRM subsidized rate discounts for properties in 

the NFIP and phase-in full actuarial rates for those properties, was 

not agreed to by a record vote of 14 yeas and 38 nays (Record vote 

no. FC–27). 


rfrederick on DSKD9S0YB1PROD with HEARING
24 

RECORD VOTE NO. FC–27 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Bachus ............................... ......... X .............. Mr. Frank (MA) ......................... .......... X ..............

Mr. Hensarling .......................... X ......... .............. Ms. Waters ............................... .......... X ..............

Mr. King (NY) ............................ ......... X .............. Mrs. Maloney ............................ .......... X ..............

Mr. Royce .................................. X ......... .............. Mr. Gutierrez ............................. .......... ......... ..............

Mr. Lucas .................................. ......... X .............. Ms. Vela

 ́

zquez ........................... .......... X ..............

Mr. Paul .................................... ......... ......... .............. Mr. Watt ................................... .......... X ..............

Mr. Manzullo ............................. ......... X .............. Mr. Ackerman ........................... .......... ......... ..............

Mr. Jones .................................. ......... X .............. Mr. Sherman ............................. .......... X ..............

Mrs. Biggert .............................. ......... X .............. Mr. Meeks ................................. .......... ......... ..............

Mr. Gary G. Miller (CA) ............. ......... X .............. Mr. Capuano ............................. .......... X ..............

Mrs. Capito ............................... ......... X .............. Mr. Hinojosa ............................. .......... X ..............

Mr. Garrett ................................ X ......... .............. Mr. Clay .................................... .......... X ..............

Mr. Neugebauer ........................ X ......... .............. Mrs. McCarthy (NY) .................. .......... ......... ..............

Mr. McHenry .............................. X ......... .............. Mr. Baca ................................... .......... ......... ..............

Mr. Campbell ............................ ......... X .............. Mr. Lynch .................................. .......... X ..............

Mrs. Bachmann ........................ X ......... .............. Mr. Miller (NC) ......................... .......... X ..............

Mr. McCotter ............................. X ......... .............. Mr. David Scott (GA) ................ .......... X ..............

Mr. McCarthy (CA) .................... X ......... .............. Mr. Al Green (TX) ..................... .......... X ..............

Mr. Pearce ................................ X ......... .............. Mr. Cleaver ............................... .......... X ..............

Mr. Posey .................................. ......... ......... .............. Ms. Moore ................................. .......... X ..............

Mr. Fitzpatrick .......................... ......... X .............. Mr. Ellison ................................ .......... ......... ..............

Mr. Westmoreland ..................... X ......... .............. Mr. Perlmutter .......................... .......... X ..............

Mr. Luetkemeyer ....................... ......... X .............. Mr. Donnelly ............................. .......... X ..............

Mr. Huizenga ............................ ......... X .............. Mr. Carson ................................ .......... ......... ..............

Mr. Duffy ................................... ......... X .............. Mr. Himes ................................. .......... X ..............

Ms. Hayworth ............................ X ......... .............. Mr. Peters ................................. .......... X ..............

Mr. Renacci .............................. X ......... .............. Mr. Carney ................................ .......... X ..............

Mr. Hurt .................................... X ......... ..............

Mr. Dold .................................... ......... X ..............

Mr. Schweikert .......................... X ......... ..............

Mr. Grimm ................................ ......... X ..............

Mr. Canseco .............................. ......... X ..............

Mr. Stivers ................................ ......... X ..............

Mr. Fincher ............................... ......... X ..............

The following amendments and motion were also considered by 

the Committee: 

1. An amendment offered by Mrs. Biggert, no. 1, to make technical changes, was agreed to by voice vote. 

2. An amendment offered by Ms. Waters, no. 2, to allow for mitigation grants for repetitive flood loss properties to be provided directly to homeowners, was agreed to by voice vote. 

3. An amendment offered by Mr. Green, no. 3a, to an amendment 

offered by Mr. Schweikert, no. 3, to add ‘‘if possible’’ after ‘‘percent’’ 

on page 1 line 8, was agreed to by Unanimous Consent. 

4. An amendment offered by Mr. Schweikert, no. 3, as amended 

by an amendment offered by Mr. Green, no. 3a, to require FEMA 

to report on the policies and procedures that it can implement, to 

limit the number of policies in its NFIP Direct program to less 

than 10 percent, and to require FEMA to notify all holders of policies transferred to the NFIP Direct program of their options to purchase flood insurance directly from another insurance company, 

was agreed to by voice vote. 

5. An amendment offered by Mrs. McCarthy of NY, no. 4, to 

make homeowners in newly mapped areas subject to the 5-year 

phase-in of rates eligible for FEMA’s discounted Preferred Risk 

Premium (PRP) rate, was agreed to by voice vote. 

6. An amendment offered by Mr. Lucas, no. 5, to allow lenders 

purchasing forced place insurance for homeowners to charge for 


rfrederick on DSKD9S0YB1PROD with HEARING
25 

such insurance starting on the date on which the previous flood insurance policy had lapsed, was agreed to by voice vote. 

7. An amendment offered by Mrs. McCarthy of NY, no. 6, to direct FEMA to notify elected officials when there are changes or updates to a floodplain area or flood risk zones, was agreed to by 

voice vote. 

8. An amendment offered by Mr. Luetkemeyer and Mr. Renacci, 

no. 7, to clarify Congressional intent regarding residential and commercial coverage limits, was agreed to by voice vote. 

9. An amendment offered by Mr. Frank, no. 8, to allow certain 

properties with swimming pools enclosed with non-supporting 

breakaway walls to be eligible for participation in the NFIP, was 

agreed to by voice vote. 

10. An amendment offered by Mr. Westmoreland, no. 9, to make 

technical and clarifying changes to language exempting elevated 

structures from the mandatory purchase requirement, was agreed 

to by voice vote. 

11. An amendment offered by Mr. Watt, no. 10a, to an amendment offered by Mr. Watt, no. 10, to add representation for state 

and local government officials on the Technical Mapping Advisory 

Committee including at least one local levee flood manager or executive, was agreed to by Unanimous Consent. 

12. An amendment offered by Mrs. Biggert, no. 10b, to an 

amendment offered by Mr. Watt, no. 10, to have the Council ‘‘consider,’’ not ‘‘ensure,’’ the most efficient technology and data for flood 

risk data, models and maps, was offered and withdrawn. 

13. An amendment offered by Mr. Watt, no. 10, as amended by 

an amendment offered by Mr. Watt, no. 10a, to add representation 

for state and local government officials on the Technical Mapping 

Advisory Committee and ensure new maps incorporate spatial 

database technology and accurate ground and bathymetric elevation data, was agreed to by voice vote. 

14. An amendment offered by Ms. Moore, no. 12, to require 

FEMA and GAO to conduct a study to assess options, methods, and 

strategies for offering voluntary community-based flood insurance 

policy options, was agreed to by voice vote. 

15. An amendment offered by Mr. Neugebauer and Mr. Dold, no. 

13, to direct FEMA to study and report to Congress on the impact, 

effectiveness, and feasibility of including widely used and nationally recognized building codes as part of its floodplain management 

criteria, was agreed to by voice vote. 

16. An amendment offered by Ms. Waters, no. 14, to allow flood 

insurance outreach activities to be an eligible use of CDBG funds, 

was agreed to by voice vote. 

17. An amendment offered by Ms. Waters, no. 15, to allow homeowners to be reimbursed for certain costs associated with a successful challenge to bona fide mapping error made by FEMA resulting 

in a Letter of Map Amendment (LOMA), was agreed to by voice 

vote. 

18. An amendment offered by Mr. Fitzpatrick, no. 16, to require 

FEMA to assess and issue a report on the capacity of the private 

reinsurance market for flood insurance risk, was agreed to by voice 

vote. 

19. An amendment offered by Ms. Waters, no. 17, to allow for 

two additional one-year extensions of mandatory purchase delay for 


rfrederick on DSKD9S0YB1PROD with HEARING
26 

communities that demonstrate, to the satisfaction of FEMA, their 

need for additional time to complete flood control projects, appeals, 

or for other extenuating circumstances, was offered and withdrawn. 

20. An amendment offered by Mr. Canseco, no. 18, to exclude second homes and vacation homes from receiving ‘‘phase-in’’ subsidy 

rates in newly mapped areas, was offered and withdrawn. 

21. An amendment offered by Ms. Waters, no. 19, to reauthorize 

the severe repetitive loss pilot program, was not agreed to by voice 

vote. 

22. An amendment offered by Mr. Westmoreland, no. 20, to 

strike the annual inflation adjustment and replace it with a onetime adjustment to 2011, and to require any policyholder that opts 

for higher coverage due to the adjusted coverage limits to pay the 

full actuarial rate, was agreed to by voice vote. 

23. An amendment offered by Mr. Canseco, no. 22, to exclude second homes and vacation homes from receiving ‘‘phase-in’’ subsidy 

rates in newly mapped areas, except in cases of a residential property occupied by its owner or a bona fide tenant as a primary residence, was agreed to by voice vote. 

24. An amendment offered by Mrs. Biggert, no. 23, to require the 

National Academy of Sciences to conduct a study on graduated risk 

and report back to Congress, was agreed to by voice vote. 

25. An amendment offered by Mr. Luetkemeyer, Mr. Pearce and 

Mr. Paul, no. 24, to prohibit the FEMA Administrator from issuing 

or updating flood insurance maps that do not factor in the actual 

protection afforded by existing levees regardless of their accreditation status, was agreed to by voice vote. 

26. An amendment offered by Mr. Westmoreland, no. 25, to provide for actuarial rates for the owners of severe repetitive loss 

properties who refuse offers of mitigation or purchase assistance, 

was agreed to by voice vote. 

27. An amendment offered by Mr. Bachus, Mrs. Capito, and Mr. 

Schweikert, no. 26, to require lenders to accept substantially similar private flood insurance coverage as a satisfaction of a mandatory flood insurance purchase requirement, was agreed to by voice 

vote. 

28. A motion offered by Mr. Bachus, to move the previous question on H.R. 1309, was agreed to by voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held a hearing and made 

findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

H.R. 1309, the Flood Insurance Reform Act of 2011, reauthorizes 

the National Flood Insurance Program (NFIP) through September 

30, 2016, and amends the National Flood Insurance Act with reforms needed to ensure the immediate and near-term fiscal and administrative health of the NFIP. The bill also ensures the NFIP’s 

continued viability by encouraging broader participation in the proVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
27 

gram, increasing financial accountability, eliminating unnecessary 

rate subsidies, and updating the program to meet the needs of the 

21st century. The key provisions of H.R. 1309 include: (1) a fiveyear reauthorization of the NFIP; (2) a three-year delay in the 

mandatory purchase requirement for certain properties in newly 

designated Special Flood Hazard Areas (SFHAs); (3) a phase-in of 

full-risk, actuarial rates for areas newly designated as Special 

Flood Hazard; (4) a reinstatement of the Technical Mapping Advisory Council; and (5) an emphasis on greater private sector participation in providing flood insurance coverage. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

JUNE 8, 2011. 

Hon. SPENCER BACHUS, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has pre- pared the enclosed cost estimate for H.R. 1309, the Flood Insurance 

Reform Act of 2011. 

If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is Daniel Hoople. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 1309—Flood Insurance Act of 2011 

Summary: H.R. 1309 would authorize the National Flood Insur- ance Program (NFIP) of the Federal Emergency Management 

Agency (FEMA) to enter into and renew flood insurance policies 

through fiscal year 2016. Under current law, that authority will expire at the end of fiscal year 2011. The legislation also would make a number of changes to the NFIP aimed at improving the financial status of the program. 

Under both current law and this legislation, the NFIP may borrow 

an additional $3 billion from the Treasury (the program’s current 


rfrederick on DSKD9S0YB1PROD with HEARING
28 

debt stands at $17.8 billion). Assuming a small probability of a rare 

catastrophic event, CBO expects that this additional borrowing authority will be exhausted in 2014. The changes made by this legislation would reduce the need to borrow from the Treasury—a 

source of direct spending—by a total of $165 million in 2013 and 

2014, CBO estimates. However, because the program would continue to operate with an annual net deficit, reduced borrowing in 

those years would be offset by increased borrowing in 2015, resulting in no net effect on direct spending over the next 10 years. CBO also estimates that the changes made by H.R. 1309 would increase net income to the NFIP by $4.2 billion over the 2012–2021 

period, improving the financial status of the program by that 

amount. However, we expect that additional income earned by the 

program would be used to fulfill existing obligations that would 

otherwise be delayed under current law, resulting in no net effect 

on direct spending. Pay-as-you-go procedures apply because enacting the legislation would affect direct spending. Enacting this legislation would not affect revenues. 

H.R. 1309 would authorize a number of other activities, including establishing a Technical Mapping Advisory Council, updating flood 

maps to incorporate new standards within five years, and issuing 

several reports on the NFIP. The cost of some of those activities 

would be offset by fee collections paid by policyholders; however, 

CBO estimates that other provisions would cost $317 million over 

the 2012–2016 period, subject to appropriation of the necessary 

amounts. 

H.R. 1309 would impose intergovernmental and private-sector mandates, as defined in the Unfunded Mandates Reform Act 

(UMRA), on public and private mortgage lenders. Because the 

mandates would require only small changes in existing industry 

practice, CBO expects that the cost to comply with the mandates 

would be small relative to the annual thresholds established in 

UMRA for intergovernmental and private-sector mandates ($71 

million and $142 million in 2011, respectively, adjusted annually 

for inflation). 

Estimated cost to the federal government: The estimated budg- etary impact of H.R. 1309 is shown in Table 1. The costs of this 

legislation fall within budget function 450 (community and regional 

development). 

TABLE 1.—CHANGES IN DIRECT SPENDING AND SPENDING SUBJECT TO APPROPRIATION UNDER 

H.R. 1309 

By fiscal year in millions of dollars— 

2012 2013 2014 2015 2016 2012– 

2016 

2012– 

2021 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority .......................... 0 0 0 0 0 0 0 

Estimated Outlays ......................................... 0 ·45 ·120 165 0 0 0 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

New Mapping Standards: 

Estimated Authorization Level .................. 0 100 130 135 140 505 750 

Estimated Outlays ..................................... 0 20 66 100 128 314 745 

Studies and Reports: 

Estimated Authorization Level .............. 1 1 * * * 3 4 

Estimated Outlays ................................ 1 1 * * * 3 4 


rfrederick on DSKD9S0YB1PROD with HEARING
29 

1See Congressional Budget Office, The National Flood Insurance Program: Factors Affecting Actuarial Soundness (November 2009). 

TABLE 1.—CHANGES IN DIRECT SPENDING AND SPENDING SUBJECT TO APPROPRIATION UNDER 

H.R. 1309—Continued 

By fiscal year in millions of dollars— 

2012 2013 2014 2015 2016 2012– 

2016 

2012– 

2021 

Total Changes: 

Estimated Authorization Level .............. 1 101 130 135 140 508 754 

Estimated Outlays ................................ 1 21 66 100 128 317 749 

Note: * = between $0 and $500,000. 

Basis of estimate: For this estimate, CBO assumes that the legis- lation will be enacted by the end of fiscal year 2011 and that 

amounts estimated to be necessary will be appropriated for each 

year. 

Background 

Authority to Underwrite Coverage. The NFIP was established to encourage the purchase of flood insurance by property owners located in communities that adopt minimum guidelines for floodplain 

management and to enforce building codes designed to mitigate 

flood damages. Flood insurance coverage is mandatory for properties located within an area designated as having at least a 1 percent chance of being flooded in any year (such an area is known 

as a Special Flood Hazard Area, or SFHA) and is financed by a federally regulated lending institution, a government-sponsored enterprise for housing, or a federal lender. Property owners not receiving 

financing or coverage from those entities or located outside a SFHA 

may purchase flood insurance coverage from a private carrier or 

the NFIP at their discretion. Under current law, FEMA is authorized to underwrite the sale and renewal of flood insurance policies 

through September 30, 2011. Subsidized Premiums. Throughout the program’s history, FEMA has charged premiums well below the amount necessary to offset 

the expected cost (also known as the full-risk or actuarial cost) for 

properties built before a community’s Flood Insurance Rate Map 

(FIRM) was completed, or before 1975, whichever is later. Those 

properties, known as pre-FIRM properties, make up over 20 percent of all NFIP policies. FEMA estimates that pre-FIRM policyholders pay average premiums that are about 40 percent to 45 percent of the full-risk cost. Some post-FIRM properties also receive 

discounted premiums under current law; however, they are few in 

number (less than 1 percent of all NFIP policies) relative to preFIRM properties. It is unclear whether other property owners receive premium subsidies not directly specified in law.1 For this estimate, CBO assumes that all policies not directly receiving subsidies 

will generate a sufficient amount of income to cover expected 

claims and related expenses over time. 

Ability to Pay Claims and Other Expenses. The National Flood Insurance Fund (NFIF) is the sole source of claims payments and 

other expenses associated with the NFIP. Under current law, the 

fund is credited with premium and fee receipts from policyholders, 

annual appropriations, interest earned on fund balances, and 

amounts borrowed from the Treasury. As of February 2011, the 


rfrederick on DSKD9S0YB1PROD with HEARING
30 

2 Actuarial-level losses take into account the full range of possible losses, including rare catastrophic events like Hurricane Katrina. 

NFIP insured approximately 5.6 million policies with written annual premiums in force of $3.4 billion. For fiscal year 2011, the 

Congress provided the fund with $169 million in appropriations, 

offset by an equivalent amount of fee collections from policyholders 

(see Public Law 112–10). No interest income or borrowing is expected to occur this year, CBO estimates. 

The majority of the NFIP’s expenses consist of payments for insured claims resulting from outstanding coverage in force, which 

currently stands at about $1.2 trillion. FEMA estimates that claims 

payments in 2011 will total about 43.5 percent of premium income, 

based on the historical experience of policies and coverage amounts 

currently insured by the program. Actual expenses for insured 

claims, however, have varied widely by year, ranging from less 

than 10 percent of premium to almost 800 percent of premium 

(based on calendar-year totals). 

In most years, annual appropriations along with premium and 

fee income have been sufficient to cover the annual expenses of the 

NFIP. Prior to 2005, it was occasionally necessary for the program 

to borrow from the Treasury to meet expenses during greater-thanaverage-loss years; however, that borrowing was relatively small 

(less than $1 billion) and was repaid with interest. Nonetheless, because of the large subsidy that exists for many policies, CBO estimates that the program will—on average—have greater annual expenses than revenue. This differential became apparent in the 

aftermath of Hurricanes Katrina, Rita, and Wilma in 2005. Because of the severe and widespread damages experienced during 

those storms, the program borrowed an unprecedented $16.7 billion 

in fiscal year 2006 to cover claims and interest expenses. NFIP’s 

current debt to the Treasury stands at $17.8 billion. It is highly unlikely that the program will have sufficient income to repay those 

borrowed funds within the next 10 years. 

Assuming actuarial-level losses 2 in 2012 and beyond, the NFIP 

will need to continue borrowing from the Treasury until its line of 

credit (currently set at $20.7 billion) is exhausted, which CBO estimates will occur in 2014 under current law. At that point, because 

expenses of the program may only be paid to the extent that resources in the NFIF are available, net spending would be zero. 

Payments for claims and other expenses would be delayed until 

sufficient resources became available to the NFIF from premium 

and fee income. 

Direct Spending 

CBO estimates that enacting H.R. 1309 would have no net impact on direct spending over the 2012–2016 or 2012–2021 periods. 

Section 2 would provide FEMA with the authority to continue 

selling and renewing policies through fiscal year 2016. While this 

authority would otherwise expire at the end of the current fiscal 

year, the program is assumed to continue in the CBO baseline, consistent with the rules governing baseline projections for mandatory 

programs. Thus, extending the NFIP under this legislation would 

have no effect on direct spending relative to the baseline. 


rfrederick on DSKD9S0YB1PROD with HEARING
31 

3 CBO estimates that changes made by H.R. 1309 would reduce the aggregate subsidy built 

into premiums under current law by over 50 percent by 2021; however, because the legislation 

would not completely eliminate subsidies for all policies, we estimate that the program would 

continue to operate under an annual deficit. 

In addition to extending the NFIP, H.R. 1309 would make a number of changes to the program. The two changes that would affect direct spending are: • Premium increases for some pre-FIRM policyholders; and • Temporary discounted premiums for certain properties lo- cated in such areas. 

Other changes that CBO estimates would affect the amount of flood insurance coverage and the amount of premiums collected but 

would not affect net direct spending include: • Increasing the minimum-policy deductible; • Increasing the average annual limit on premium growth; • Increasing the maximum coverage for structure and con- tents policies; and • Introducing new lines of insurance for additional living ex- pense and business interruption. 

The estimated aggregate effects of those changes are listed in Table 2. 

TABLE 2.—CHANGE IN NET INCOME TO THE NFIP UNDER H.R. 1309 OVER SELECTED TIME 

PERIODS 

By fiscal year in millions of dollars— 

2012–2014 2012–2016 2012–2021 

Income: 

Premium Increases for Some Pre-FIRMs ....................................................... 222 936 5,364 

Temporary Discounted Premiums .................................................................. ·38 ·84 ·180 

Total Changes to Revenues .................................................................. 184 852 5,184 

Expenses: 

Increased Payments to WYO Companies ....................................................... 56 259 1,584 

Reduced Claims Due to Dropped Policies ..................................................... ·37 ·125 ·564 

Total Changes to Expenses .................................................................. 19 134 1,020 

Change in Net Income a ......................................................................................... 165 718 4,164 

Cumulative Net Effect on Direct Spending ............................................................ ·165 0 0 

a After the NFIP’s borrowing authority has been exhausted, changes in net income are reflected as a corresponding increase or decrease in the delay in claims payments expected to be experienced by NFIP policyholders and thus do not affect direct spending. 

Note: FIRM = Flood Insurance Rate Map; WYO = Write-Your-Own. 

Overall, CBO estimates that changes made by H.R. 1309 would increase net income to the NFIP by $165 million through 2014. 

CBO expects that the flood insurance program will not have exhausted its remaining borrowing authority during this period. 

Therefore, additional net income earned by the NFIP over that period would reduce expected borrowing from the Treasury—a source 

of direct spending. However, assuming annual program deficits,3

CBO estimates that any reduction in direct spending generated by 

lower borrowing in those years will be offset by increased direct 

spending from additional borrowing in 2015, resulting in no net effect on the federal budget over the next 10 years. After 2014, the changes made by H.R. 1309 would not affect net direct spending because CBO expects that any additional income 

earned by the program would be used to fulfill obligations (mostly 

claims payments) that would otherwise be delayed. However, enactment of the legislation would improve the financial status of the 


rfrederick on DSKD9S0YB1PROD with HEARING
32 

4The 20 percent would include some increase that FEMA would have applied to the policy 

under current law; thus the actual increase in per policy premium attributable to this legislation 

would be less than 20 percent. 5For properties newly mapped into a SFHA after October 1, 2008, that previously qualified for a Preferred Risk Policy (PRP) premium (i.e., could not have two or more claims or disaster 

relief payments of $1,000 or more, or three losses or payments of any kind), FEMA currently 

offers a discount equal to the premium the policyholder would have paid and the PRP premium. 

That discount is available for two years. For properties mapped into a SFHA after October 1, 

2008, and before January 1, 2011, the discounted premium is available for the two renewals 

between January 1, 2011, and December 31, 2012. 

program by reducing this expected ‘‘backlog’’ of unfulfilled payments. Under current law, CBO estimates that delayed payments 

would total $3.6 billion by 2016 and $12.6 billion by 2021. Under 

H.R. 1309, we estimate that the ‘‘backlog’’ would total $2.9 billion 

in 2016 and $8.4 billion in 2021, a reduction of about $700 million 

and $4.2 billion, respectively. Premium Increases for Some Pre-FIRM Properties. Section 5 

would direct FEMA to increase flood insurance premiums for preFIRM properties that are: nonresidential or nonprimary residences; 

residences sold to new owners; or severe repetitive loss properties 

(defined as residences with at least four paid claims greater than 

$5,000 or with two paid claims that cumulatively exceed the market value of the house). One year after enactment, all policyholders 

of properties fitting such categories would begin receiving premium 

increases of 20 percent per year 4 until the amount collected each 

year covers the full cost of the insurance. New policies that fit such 

criteria one year after enactment would immediately pay the fullrisk premium. 

Based on housing data and current policy information obtained from FEMA, about 355,000 policies would initially be subject to 

such premium increases under the bill, CBO estimates. Those policyholders currently pay an average premium of about $1,174 per 

year. Once subsidies are completely phased out, we expect that annual premiums for those policies would be, on average, about 21⁄4

times greater than premium that would otherwise be charged 

under current law. While some policyholders would reduce or eliminate coverage as a result of those increases, CBO estimates that 

any resulting decrease in premium receipts would be more than offset by increases from properties that remain in the program. 

Additional premium receipts from pre-FIRM policyholders would 

total $936 million over the 2012–2016 period and about $5.4 billion 

over the next 10 years, CBO estimates. Under current agreements, 

Write-Your-Own (WYO) companies would receive a portion of this 

additional premium (about 30 percent), reflected in Table 2 as an 

increase in expenses. Subsidized policyholders that drop out of the 

NFIP would save the cost of paying claims on those policies, resulting in a decrease in expenses. Altogether, CBO estimates that implementing the premium increases outlined in the legislation would 

increase net income to the NFIP by $775 million over the next five 

years and by about $4.3 billion over the 2012–2021 period. 

Temporary Discounted Premiums. Section 5 would direct FEMA 

to charge subsidized premiums for certain properties newly mapped 

into a SFHA after October 1, 2008. Under the bill, owners of primary residences in new SFHAs would be charged 50 percent of the 

premium that applies under current law during the first year following the map’s effective date (or, in the case of properties eligible 

for a Preferred Risk Policy Extension,5 during the first year folVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
33 

6Section 3 would delay the requirement to purchase flood insurance for some property owners. 

Upon receiving a request from a local government, property owners placed into a SFHA because 

of changes to a FIRM would not immediately be required to purchase flood insurance. This delay 

in the mandatory purchase requirement would last for a period of time to be determined by 

FEMA, but no longer than three years. 

lowing the expiration of that extension). The legislation requires 

FEMA, in each successive year, to increase rates by 20 percent 

until the premium is equal to the amount that otherwise would be 

charged in the absence of this section. 

That provision would create a new class of subsidized policies 

within the NFIP. The cost of the subsidy would be somewhat mitigated by the delay in the mandatory purchase requirement under 

section 3 of the bill.6 According to the American Institutes for Research, voluntary take-up of flood insurance within an SFHA is 

about 20 percent, compared to 75 percent to 80 percent if such coverage were mandatory. Because fewer property owners would purchase subsidized flood insurance if coverage is voluntary, the overall cost of the new subsidy would be lower than if coverage were 

mandatory. 

Based on the estimated number of properties that have been or 

would be placed into a SFHA, CBO estimates that implementing 

this new subsidy would reduce premium income to the NFIP by 

about $180 million over the next 10 years. The overall effect of this 

provision on net income would be somewhat less (about $125 million) because it also would result in reduced payments to WYO 

companies. 

Increase in the Minimum Policy Deductible. Section 4 would set 

the minimum deductible for structural coverage at $2,000 for subsidized properties and $1,000 for nonsubsidized properties. Under 

current law, FEMA has the discretion to set a minimum deductible. 

For the current policy year (which began October 2010), the standard deductible is $2,000 for most subsidized properties and $1,000 

for nonsubsidized properties; however, pre-FIRM policyholders may 

reduce that deductible by $1,000 in exchange for a higher premium. Under the bill, CBO expects that the standard deductible 

would remain unchanged but that subsidized policyholders would 

no longer be able to reduce their deductible. Based on information 

from FEMA, CBO estimates that about 250,000 policies (mostly for 

pre-FIRM properties) would carry a higher deductible as a result 

of this provision, which would reduce average insured claims for 

those properties by between 5 percent and 10 percent. However, increasing the deductible also would lower premium receipts by an 

equivalent amount. As such, CBO estimates that implementing 

this provision would not affect net income to the NFIP and would 

have no effect on the federal budget. 

Increase in Average Annual Limit on Premium Growth. Section 

5 would authorize the NFIP to increase premiums within a specific 

risk category by an average of up to 20 percent per year. Under 

current law, the limit is 10 percent. Based on historical experience, 

CBO assumes that raising this limit would not result in consistent 

premium increases of more than 10 percent for most subsidized 

policies. (Under both current law and H.R. 1309, actuarially rated 

policies are assumed to receive premium increases necessary to 

cover the full cost of the coverage.) Therefore, implementing this 


rfrederick on DSKD9S0YB1PROD with HEARING
34 

provision would have no net effect on the NFIP or the federal budget. 

Increase in Maximum Coverage and New Lines of Insurance. Section 4 would adjust the total amount of flood insurance coverage 

available by increasing the current limit by the level of inflation 

from the end of fiscal year 1994 to enactment of the legislation. 

The current limit is $350,000 ($250,000 for structures and 

$100,000 for contents) for a residential policy and $1 million 

($500,000 for structures and $500,000 for contents) for a non-residential policy. CBO estimates that the new coverage limits would 

be about $520,000 and $1.5 million, respectively. In addition, the 

legislation would direct FEMA to offer optional coverage of up to 

$5,000 for living expenses incurred during the loss of use of a personal residence and up to $20,000 for partial or total business 

interruption. 

Under the bill, the increased coverage limits and new lines of insurance would be offered to policyholders at the full-risk premium. 

For this estimate, CBO did not estimate the total amount of new 

coverage that would be purchased as a result of those provisions. 

We expect that any additional coverage would increase premium 

receipts to the federal government as well as claims payments and 

other expenses, resulting in no net effect on the federal budget. 

Spending Subject to Appropriation 

CBO estimates that implementing H.R. 1309 would cost $317 

million over the 2012–2016 period and $749 million over the 2012– 

2021 period, subject to appropriation of the necessary amounts. 

Technical Mapping Advisory Council. Section 6 would establish a Technical Mapping Advisory Council (TMAC) to develop and recommend new mapping standards for FIRMs. The council would include representatives from FEMA, the U.S. Geological Survey, the 

Army Corps of Engineers, other federal agencies, state and local 

governments, as well as experts from private stakeholder groups. 

The council would submit the new standards to FEMA and the 

Congress within 12 months of enactment and would continue to review those standards for four additional years, at which time the 

council would be terminated. 

Under current law, spending for floodplain management activities (which CBO assumes would include operations of the new 

council) are subject to future appropriation acts. FEMA is authorized to offset those costs by collecting a fee (known as the Federal 

Policy Fee) from policyholders. As such, CBO estimates that implementing this section would have no net effect on discretionary 

spending over the next five years. 

New Mapping Standards. Section 7 would direct FEMA to implement new standards for FIRMs. Beginning six months after the 

TMAC issues its initial set of recommendations, FEMA would have 

five years to update all FIRMs to incorporate the new standards, 

subject to the availability of appropriated funds. The greatest costs 

likely would arise from determining the level of protection afforded 

by decertified levees; however, because the new standards would be 

based on recommendations made by the TMAC and on findings 

from studies required in the bill (for example, graduated risk), it 

is unclear how the new standards and the cost to implement them 

would differ from those currently in use. Based in part on the proVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00034 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
35 

jected costs of implementing FEMA’s Risk Mapping, Assessment, 

and Planning program (which would incorporate some of the new 

standards in this section), CBO estimates implementing this section would cost $314 million over the 2012–2016 period. Because 

CBO expects the required map updating would continue through 

2018 under the bill, we estimate that implementing this section 

would cost an additional $431 million after 2016. All expenditures 

would be subject to appropriation of the necessary amounts. 

Studies and Reports. H.R. 1309 would direct FEMA and the Government Accountability Office (GAO) to conduct studies and issue 

reports on a number of topics, including limiting the percentage of 

policies directly managed by FEMA, community-based flood insurance, building codes, varying risk behind levees, privatization of 

the NFIP, and the financial status and claims-paying ability of the 

program. Based on the cost of similar studies, CBO estimates that 

producing the reports required under the legislation would cost 

about $3 million over the next five years, subject to appropriation 

of the necessary funds. 

Other Discretionary Changes. H.R. 1309 would make a number 

of other changes to current law, including authorizing FEMA to 

make flood mitigation grants directly to property owners (under 

current law, funding is provided through communities), authorizing 

the use of Community Development Block Grant funds for building 

code enforcement and flood program outreach, and authorizing the 

reimbursement of costs incurred by homeowners that obtain a Letter of Map Amendment (LOMA). CBO does not expect that changes 

made to mitigation or community development grants under the 

bill would significantly alter the pace of expenditures under either 

program. Based on information from FEMA, reimbursements of expenses related to LOMAs could total as much as $15 million annually; however, those costs would likely be recouped through increases in premiums or fees paid by policyholders, resulting in no 

net effect on the federal budget. 

Pay-as-you-go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table. 


rfrederick on DSKD9S0YB1PROD with HEARING
36 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1309 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON MAY 17, 2011 

By fiscal year, in millions of dollars 2011— 

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011– 2016 2011– 2021 

NET INCREASE OR DECREASE (·) IN THE DEFICIT 

Statutory Pay-As-You-Go Impact ................................................................................. 0 0 ·45 ·120 165 0 0 0 0 0 0 0 0 


rfrederick on DSKD9S0YB1PROD with HEARING
37 

Intergovernmental and private-sector impact: H.R. 1309 would 

impose intergovernmental and private-sector mandates, as defined 

in UMRA, on public and private mortgage lenders. Because the 

mandates would require only small changes in existing industry 

practice, CBO expects that the cost to comply with the mandates 

would be small relative to the annual thresholds established in 

UMRA for intergovernmental and private-sector mandates ($71 

million and $142 million in 2011, respectively, adjusted annually 

for inflation). 

Flood Insurance 

Current law prohibits lenders from making loans for real estate 

in areas at high risk for flood damage unless the property is covered by flood insurance. This bill would require lenders to accept 

flood insurance from a private company if the policy fulfills all federal requirements for flood insurance. Under current law, lenders 

also are required to purchase flood insurance on behalf of the 

homeowner if, at any time during the life of a loan, they determine 

that a homeowner does not have a current policy in place. The bill 

would require lenders to terminate those policies within 30 days of 

being notified that the homeowner has purchased another policy. 

Lenders also would have to refund any premium payments and 

fees made by the homeowner for the time when both policies were 

in effect. Based on information from industry sources on current 

practice, CBO estimates that the cost of complying with those mandates would be small. 

Disclosure Requirements 

Current law requires mortgage lenders that make federally related mortgages (as defined in title 12, U.S.C. 2602) to provide a 

good-faith estimate of the amount or range of charges the borrower 

is likely to incur for specific settlement services. (To the extent that 

state agencies issue loans or other credit instruments that would 

be subject to the requirements of the Real Estate Settlement Procedures Act, the bill also would impose intergovernmental mandates.) 

The bill would require such mortgage lenders to include specific information about the availability of flood insurance in each goodfaith estimate. The mandate would require small changes in existing disclosure requirements. Consequently, CBO estimates that the 

cost of the mandate to public and private mortgage lenders would 

be small. 

Other Impacts 

State, local, and tribal governments would benefit if funds authorized to be appropriated for mitigation and outreach activities 

related to flood hazards were made available in the future. Any 

costs to those governments, including matching funds, would be incurred voluntarily. 

Estimate prepared by: Federal Costs: Daniel Hoople; Impact on 

State, Local, and Tribal Governments: Melissa Merrell; Impact on 

the Private Sector: Sam Wice. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 


rfrederick on DSKD9S0YB1PROD with HEARING
38 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 1309 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title and table of contents 

This section establishes the short title of the bill, the Flood Insurance Reform Act of 2011. 

Section 2. Extensions 

This section reauthorizes the NFIP and its financing for five 

years from October 1, 2011, through September 30, 2016. 

Section 3. Mandatory purchase 

To ease the burden on newly mapped communities, this section 

establishes criteria for the temporary suspension of the mandatory 

purchase requirement for one year (with the possibility of two additional one-year suspensions) that the requirement may be suspended if the Federal Emergency Management Agency (FEMA) 

makes a finding, with respect to flood risk mapping on a community-by-community basis and pursuant to a formal request submitted by a local governing authority, that one or more of the following conditions are met: (1) the community has never been 

mapped as a high-risk area; (2) the community is taking specific 

steps to rebuild or repair a dam or a levee that has not been certified, or is required to be certified, as providing adequate protection from a 100-year flood, and the community is making adequate 

progress in completing the construction work and securing the financial commitments needed to complete the flood control project; 

or (3) the community has challenged the accuracy of a dam or levee 

decertification or disaccreditation, or a new or revised flood risk 

map, and has filed a formal appeal. 

This section also establishes that a mortgage lender or servicer 

must terminate the ‘‘force-placed’’ insurance and refund any premiums or fees paid for the period of coverage overlap within 30 

days of receiving confirmation in writing (e.g., an insurance policy 


rfrederick on DSKD9S0YB1PROD with HEARING
39 

declarations page) that a property owner has obtained flood insurance coverage. 

Additionally, this section clarifies and codifies longstanding practices that allow lenders and servicers to collect premiums and fees 

incurred for coverage beginning on the date an existing flood insurance policy lapsed or did not provide sufficient coverage. In this circumstance, the lender can collect fees and premiums for ‘‘forceplaced’’ insurance during the 45-day notification period. 

To encourage greater private sector participation, this section 

further requires lenders to accept non-NFIP backed flood insurance 

coverage provided by a private entity if that coverage meets all the 

same requirements as NFIP-backed flood insurance. 

This section also clarifies that private sector flood insurance 

products are acceptable where they meet the requirements of the 

NFIP. Like other property-casualty insurance products, private-sector flood products and the companies that offer them would be subject to state regulation. This section does not create preferences either for government or private-sector flood products; it does confirm, however, that private sector flood insurance products could 

replace Federal government products. 

Section 4. Reforms of coverage terms 

This section sets the minimum deductible levels at $1,000 for 

properties with full-risk rates and $2,000 for properties with discounted rates. It also establishes that the maximum coverage limits will be indexed for inflation, starting in 2012. 

This section also authorizes FEMA to offer optional coverage for 

additional living expenses, up to a maximum of $5,000, as well as 

to offer optional coverage for the interruption of business operations up to a maximum of $20,000, provided that FEMA: (1) 

charges full-risk rates for such coverage; (2) makes a finding that 

a competitive private market for such coverage does not exist; and 

(3) certifies that the NFIP has the capacity to offer such coverage 

without the need to borrow additional funds from Treasury. 

Additionally, this section directs FEMA to offer policyholders the 

option of paying their premiums for one-year policies in installments, and authorizes FEMA to impose higher rates or surcharges, 

or to deny future access to NFIP coverage, if property owners attempt to limit their coverage to coincide only with the annual 

storm season by neglecting to pay their premiums on schedule. 

Section 5. Reforms of premium rates 

This section increases the annual cap on premium rate increases 

from 10 percent to 20 percent. It also provides for a phase-in of 

full-risk rates for newly-mapped areas. For properties mapped into 

a high-risk area, initial rates are set at a 50 percent discount from 

full-risk rates, with annual rate increases thereafter limited by the 

aforementioned 20 percent annual cap. For areas eligible for the 

lower-cost Preferred Risk Policy (PRP) rates, the phase-in begins 

after the expiration of their PRP rates. For all properties, the 

phase-in of rates only applies to residential properties occupied by 

their owner or a bona fide tenant as a primary residence. 

Additionally, beginning one year after enactment, the premium 

rate subsidies (pre-FIRM discounts) for certain properties in the 

following categories are phased-out, with annual rate increases limVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00039 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
40 

ited by a 20 percent annual cap: commercial properties, second and 

vacation homes (i.e., residential properties not occupied by any individual as a primary residence), homes sold to new owners, homes 

damaged or improved (substantial flood damage exceeding 50 percent or substantial improvement exceeding 30 percent of the fair 

market value of the property), and properties with multiple flood 

claims (i.e., statutorily defined severe repetitive loss properties). 

This section removes the eligibility of property owners who allow 

their policies to lapse by choice to receive discounted rates on those 

properties. Furthermore, the section updates the standards by 

which FEMA evaluates a community’s eligibility for special flood 

insurance rates by considering: (1) state and local funding, in addition to federal funding, of flood control projects; (2) reconstruction 

and improvements, in addition to construction, of flood control 

projects; (3) the standard of ‘‘present value’’ in evaluating the 

progress of work completed on a flood control system; (4) riverine, 

in addition to coastal, flood hazard areas; and (5) the assessment 

of qualified private entities, instead of a federal agency, to determine if a flood protection system is restorable. 

Section 6. Technical Mapping Advisory Council 

This section re-establishes the Technical Mapping Advisory 

Council (Council), which operated from 1995 to 2000. The Council 

would bring together the FEMA Administrator as well as representatives of Federal agencies with mapping responsibilities, representatives of state governments, representatives of local governments, and private sector experts to review and propose new mapping standards within one year. FEMA then would be required, 

within six months, to revise its criteria for updating flood hazard 

maps based on the Council’s recommendations. The Council also 

would assist FEMA in addressing mapping issues as they arise. 

Section 7. FEMA incorporation of new mapping protocols 

This section requires FEMA to update flood insurance rate maps 

according to revised standards recommended by the Technical Mapping Advisory Council within six months, or to submit a report to 

Congress with an explanation for any recommendations it did not 

implement. This section also provides for a temporary suspension 

of the existing flood insurance mandatory purchase requirement 

until the new mapping protocols are implemented for any property 

the owner of which submits an elevation study documenting that 

the lowest level of the property is at least 3 feet higher than the 

elevation of the 100-year flood plain. 

Section 8. Treatment of levees 

This section prohibits FEMA from issuing or updating flood insurance maps that do not factor in the actual protection afforded 

by existing levees regardless of their accreditation status. FEMA’s 

former ‘‘without levees’’ policy assumed that an existing levee or 

other flood control structure that does not meet FEMA certification 

levels does not exist for the purposes of mapping flood hazard 

areas. This section codifies FEMA’s new policy, which takes into 

consideration the existence of levees and flood control structures for 

maps and flood insurance rates. Therefore, FEMA’s previous ‘‘all or 


rfrederick on DSKD9S0YB1PROD with HEARING
41 

nothing’’ approach for mapping flood hazard areas is eliminated 

and allows for ‘‘partial credit.’’ 

Section 9. Privatization initiatives 

This section directs FEMA and GAO each to assess a broad 

range of options to begin privatizing the NFIP over time and to report to Congress with recommendations in 18 months. Also, in reviewing the full range of risks associated with flooding, the FEMA 

Administrator is authorized to carry out initiatives to determine 

the capacity of private insurers, reinsurers, and financial markets 

to assume a portion the flood risk exposure in the United States. 

These provisions also clarify the FEMA Administrator’s authority 

to use private market reinsurance capacity to minimize the likelihood that the program would need to borrow additional Treasury 

funds. In addition, FEMA is directed to assess the capacity of the 

private reinsurance market by seeking proposals to assume a portion of the program’s risk, and to submit a report on such assessment within six months of enactment. Finally, this section requires 

FEMA each year to assess the capacity of the NFIP to pay claims 

without having to borrow from the Treasury, including its use of 

private sector reinsurance, and report that assessment to Congress. 

Section 10. FEMA annual report on insurance program 

This section replaces the required biennial report of FEMA to the 

President with an annual report to Congress including detailed information about the financial status of the program. 

Section 11. Actuarial rates for severe repetitive loss properties refusing mitigation or purchase offers 

This section requires owners of severe repetitive loss properties 

who refuse government offers of mitigation or purchase assistance 

for their properties to forfeit their subsidized rates and pay full actuarial rates. 

Section 12. Mitigation assistance 

This section clarifies that the demolition and rebuilding of flooddamaged properties should be considered by FEMA as an eligible 

activity for the purpose of mitigation assistance, which must be 

cost-effective. 

Section 13. Grants for direct funding of mitigation activities for individual repetitive claims properties 

This section allows for mitigation grants for repetitive flood loss 

properties to be provided directly to homeowners. 

Section 14. Notification to homeowners regarding mandatory purchase requirement applicability and rate phase-ins 

This section directs FEMA to establish an annual notification 

process to inform individuals who reside in an area having special 

flood hazards: (1) that they live in a such an area; (2) what the geographical boundaries of that area are; (3) if they are subject to the 

prohibition on the extension of subsidized rates for lapsed policies; 

(4) that they are subject to the existing flood insurance mandatory 

purchase requirement; and (5) what other homeowners in similar 

areas pay (on an estimated basis) for flood insurance. 


rfrederick on DSKD9S0YB1PROD with HEARING
42 

Section 15. Notification of establishment of flood elevations 

This section requires that FEMA notify Members of the House 

and Senate whose districts or states would be affected when there 

are changes or updates to a floodplain area or flood risk zones. 

Section 16. Notification to tenants of the availability of contents insurance 

This section requires FEMA to develop and distribute a notice to 

landlords and building managers that informs tenants: (1) if they 

live in an area having special flood hazards; (2) that NFIP offers 

insurance for the contents of the apartment; (3) the maximum level 

of that coverage; and (4) where to find information about obtaining 

such coverage. 

Section 17. Notification to policy holders regarding direct management of policy by FEMA 

This section requires FEMA to annually notify all holders of policies transferred to FEMA’s NFIP Direct policy servicing program of 

their options to purchase flood insurance directly from another 

Write-Your-Own (WYO) insurance company. 

Section 18. Notice of the availability of flood insurance and escrow 

in RESPA good faith estimate 

This section amends the Real Estate Settlement Procedures Act 

(RESPA) to disclose as part of RESPA’s good faith estimate: (1) 

that flood insurance is generally available from the NFIP for homes 

located both in and out of a special flood hazard area; (2) the contact information for the NFIP; and (3) that the escrowing of flood 

insurance payments is required for many loans and may be an option available under other loans. 

Section 19. Reimbursement for costs incurred by homeowners obtaining Letters of Map Amendment 

This section allows homeowners to be reimbursed for certain 

costs associated with a successful challenge to a bona fide mapping 

error made by FEMA resulting in a Letter of Map Amendment 

(LOMA), not including legal fees. 

Section 20. Treatment of swimming pool enclosures outside of hurricane season 

This section allows certain properties with swimming pools that 

are enclosed with non-supporting breakaway walls outside of hurricane season (November 20 through June 1) to be eligible for participation in the NFIP. 

Section 21. CDBG eligibility for flood insurance outreach activities 

and community building code administration grants 

To give local communities more flexibility to reduce the potential 

for property losses caused by flooding events, this section permits 

funds awarded under the Community Development Block Grant 

(CDBG) program to be used for local building code enforcement, as 

long as local matching funds are provided. It also allows CDBG 

funds to be used by local governments for flood risk outreach and 

education activities. 


rfrederick on DSKD9S0YB1PROD with HEARING
43 

Section 22. Technical corrections 

This section contains a technical correction to the underlying Na- tional Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 to update references in those statutes to the head 

of FEMA as its ‘‘Administrator’’ rather than its ‘‘Director.’’ 

Section 23. Report on write-your-own program 

To address the rapid increase in the number of policies administered under the FEMA’s NFIP Direct policy servicing program, this 

section requires FEMA to report on the policies and procedures 

that it can implement to limit the size of the NFIP Direct to less 

than 10 percent of all flood insurance policies. Last year, a WYO 

carrier decided to no longer participate in NFIP and placed the administration and servicing rights of all 800,000 of its policies with 

FEMA’s NFIP Direct program. Prior to this, only about 250,000 

policies were administered by NFIP Direct; now, FEMA is responsible for administering approximately 1,000,000 NFIP Direct policies. Having a large number of WYO carriers (there are currently 

88) ensures that the ability to effectively administer the program 

is spread among many firms and is not overly concentrated in the 

Federal government. 

Section 24. Studies of voluntary community-based flood insurance 

options 

This section requires FEMA and GAO each to conduct a study to assess options, methods, and strategies for offering voluntary 

community-based flood insurance policy options, and report their 

findings to Congress within 18 months. 

Section 25. Report on inclusion of building codes in floodplain management criteria 

This section directs FEMA to study the impact, effectiveness, and feasibility of including widely used and nationally recognized building codes as part of its floodplain management criteria and report 

its findings to Congress within 18 months. It is the intent of this 

provision that FEMA would examine only the use of the International Building Code © and/or International Residential Code ©, which contain relevant provisions covering flood plain management 

and are consistent with the current NFIP. Such ‘‘impact’’ studies, 

including those designed to examine building code requirements in 

rural communities and on Indian reservations, must address cost 

impacts, including upfront costs to consumers for buildings covered 

by such codes, and include in the ‘‘feasibility and effectiveness’’ assessment of the use of ‘‘innovative materials and systems for floodresistant construction.’’ 

The report must include language specifying that FEMA is required to abide by the standard regulatory process in considering 

the inclusion and application of building codes in these criteria. 

This section does not authorize FEMA to establish regulatory guidance that may be used in any enforcement action brought by the 

agency. 

Section 26. Study on graduated risk 

This section requires the National Academy of Sciences to study 

methods for understanding graduated risk for properties and resiVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00043 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
44 

dential and commercial structures behind levees and report its 

findings to Congress within one year. 

Section 27. No cause of action 

In an effort to ensure that individuals living in areas subject to 

flooding are aware of the potential risks that they face and insurance options available to them, various provisions of H.R. 1309 

place certain notification requirements on FEMA. These requirements—particularly those in Section 14 regarding ‘‘Notification to 

Homeowners Regarding Mandatory Purchase Requirement Applicability and Rate Phase-Ins,’’ Section 15 regarding ‘‘Notification of 

Establishment of Flood Elevations,’’ Section 16 regarding ‘‘Notification to Tenants of the Availability of Contents Insurance,’’ Section 

17 regarding ‘‘Notification to Policy Holders Regarding Direct Management of Policy by FEMA,’’ and Section 18 regarding ‘‘Notice of 

the Availability of Flood Insurance and Escrow in RESPA Good 

Faith Estimate’’—were designed to serve a strictly informational 

purpose for various stakeholders. 

The Committee intended for these notification requirements to 

educate individuals living in flood zones about flood risks, explain 

options to existing NFIP policyholders, and inform policymakers 

about pertinent mapping changes. Because the Committee did not 

intend for these requirements to give rise to private rights of action 

against the NFIP, FEMA, or any other agency of the United States 

for failure to meet the obligations imposed by the bill or the underlying statute, this section specifies that no cause of action against 

the federal government exists for violations of any notification requirement under this Act. Furthermore, this language was designed to codify existing judicial interpretations regarding similar 

notice requirements. See, e.g., Paul v. Landsafe Flood Determination, Inc., 550 F.3d 511 (5th Cir. 2008); Wentwood Woodside I, LP 

v. GMAC Commercial Mortgage Corp., 419 F.3d 310 (5th Cir. 

2005); Till v. Unifirst Fed. Sav. & Loan Ass’n., 653 F.2d 152 (5th 

Cir. 1981); Barras v. Cmty. Home Loan, LLC, No. 06–2000, 2007 

WL 2156558, 2007 U.S. Dist. LEXIS 53534 (W.D.La. July 24, 

2007); Clade v. Stone Ins., Inc., No. CIV.A.06–2304–F, 2006 WL 

2366373, 2006 U.S. Dist. LEXIS 57152 (E.D.La. Aug. 14, 2006). 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

NATIONAL FLOOD INSURANCE ACT OF 1968 

TITLE XIII—NATIONAL FLOOD INSURANCE 

SHORT TITLE

SEC. 1301. This title may be cited as the ‘‘National Flood Insurance Act of 1968’’. 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
45 

CHAPTER I—THE NATIONAL FLOOD INSURANCE PROGRAM 

BASIC AUTHORITY

SEC. 1304. (a) To carry out the purposes of this title, the ¿Director Administrator of the Federal Emergency Management Agency 

is authorized to establish and carry out a national flood insurance 

program which will enable interested persons to purchase insurance against loss resulting from physical damage to or loss of real 

property or personal property related thereto arising from any flood 

occurring in the United States. 

(b) ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE AND

CONTROL MEASURES.—The national flood insurance program established pursuant to subsection (a) shall enable the purchase of insurance to cover the cost of implementing measures that are consistent with land use and control measures established by the community under section 1361 for— 

(1) * * * 

* * * * * * * 

(3) properties that have sustained flood damage on multiple 

occasions, if the ¿Director Administrator determines that it is 

cost-effective and in the best interests of the National Flood Insurance Fund to require compliance with the land use and control measures. 

* * * * * * * 

The ¿Director Administrator shall impose a surcharge on each insured of not more than $75 per policy to provide cost of compliance 

coverage in accordance with the provisions of this subsection. 

(c) In carrying out the flood insurance program the ¿Director

Administrator shall, to the maxmium extent practicable, encourage 

and arrange for— 

(1) * * * 

* * * * * * * 

SCOPE OF PROGRAM AND PRIORITIES

SEC. 1305. (a) In carrying out the flood insurance program the 

¿Director Administrator shall afford a priority to making flood insurance available to cover residential properties which are designed for the occupancy of from one to four families, church properties, and business properties which are owned or leased and operated by small business concerns. 

(b) If on the basis of— 

(1) * * * 

* * * * * * * 

the ¿Director Administrator determines that it would be feasible 

to extend the flood insurance program to cover other properties, he 

may take such action under this title as from time to time may be 

necessary in order to make flood insurance available to cover, on 

such basis as may be feasible, any types and classes of— 

(A) * * * 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
46 

(c) The ¿Director Administrator shall make flood insurance 

available in only those States or areas (or subdivisions thereof) 

which he has determined have— 

(1) * * * 

* * * * * * * 

NATURE AND LIMITATION OF INSURANCE COVERAGE

SEC. 1306. (a) The ¿Director Administrator shall from time to 

time, after consultation with the advisory committee authorized 

under section 1318, appropriate representatives of the pool formed 

or otherwise created under section 1331, and appropriate representatives of the insurance authorities of the respective States, 

provide by regulation for general terms and conditions of insurability which shall be applicable to properties eligible for flood insurance coverage under section 1305, including— (1) * * * 

* * * * * * * 

(b) In addition to any other terms and conditions under sub- section (a), such regulations shall provide that— (1) any flood insurance coverage based on chargeable pre- mium rates under section 1308 which are less than the estimated premium rates under section 1307(a)(1) shall not exceed— 

(A) * * * 

(B) in the case of business properties which are owned 

or leased and operated by small business concerns, an aggregate liability with respect to any single structure, including any contents thereof related to premises of small 

business occupants (as term is defined by the ¿Director

Administrator), which shall be equal to (i) $100,000 plus (ii) $100,000 multiplied by the number of such occupants 

and shall be allocated among such occupants (or among 

the occupant or occupants and the owner) under regulations prescribed by the ¿Director Administrator; except 

that the aggregate liability for the structure itself may in 

no case exceed $100,000; and 

* * * * * * * 

(2) ¿in the case of any residential property in the case of 

any residential building designed for the occupancy of from one 

to four families for which the risk premium rate is determined 

in accordance with the provisions of section 1307(a)(1), additional flood insurance in excess of the limits specified in clause 

(i) of subparagraph (A) of paragraph (1) ¿shall be made available to every insured upon renewal and every applicant for insurance so as to enable such insured or applicant to receive 

coverage up to a total amount (including such limits specified 

in paragraph (1)(A)(i)) of $250,000 shall be made available, 

with respect to any single such building, up to an aggregate liability (including such limits specified in paragraph (1)(A)(i)) of 

$250,000; 

* * * * * * * 

(4) ¿in the case of any nonresidential property, including 

churches, in the case of any nonresidential building, including 


rfrederick on DSKD9S0YB1PROD with HEARING
47 

a church, for which the risk premium rate is determined in accordance with the provisions of section 1307(a)(1), additional 

flood insurance in excess of the limits specified in subparagraphs (B) and (C) of paragraph (1) ¿shall be made available 

to every insured upon renewal and every applicant for insurance, in respect to any single structure, up to a total amount 

(including such limit specified in subparagraph (B) or (C) of 

paragraph (1), as applicable) of $500,000 for each structure and 

$500,000 for any contents related to each structure shall be 

made available with respect to any single such building, up to 

an aggregate liability (including such limits specified in subparagraph (B) or (C) of paragraph (1), as applicable) of 

$500,000, and coverage shall be made available up to a total 

of $500,000 aggregate liability for contents owned by the building owner and $500,000 aggregate liability for each unit within 

the building for contents owned by the tenant; ¿and

(5) the Administrator may provide that, in the case of any 

residential property, each renewal or new contract for flood insurance coverage may provide not more than $5,000 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, except that— 

(A) purchase of such coverage shall be at the option of the 

insured; 

(B) any 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); and 

(C) the Administrator may make such coverage available 

only if the Administrator makes a determination and 

causes notice of such determination to be published in the 

Federal Register that— 

(i) a competitive private insurance market for such 

coverage does not exist; and 

(ii) the national flood insurance program has the capacity to make such coverage available without borrowing funds from the Secretary of the Treasury under 

section 1309 or otherwise; 

(6) the Administrator may provide that, in the case of any 

commercial property or other residential property, including 

multifamily rental property, 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 may 

be made available to every insured upon renewal and every applicant, up to a total amount of $20,000 per property, except 

that— 

(A) purchase of such coverage shall be at the option of the 

insured; 

(B) any 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); and 

(C) the Administrator may make such coverage available 

only if the Administrator makes a determination and 


rfrederick on DSKD9S0YB1PROD with HEARING
48 

causes notice of such determination to be published in the 

Federal Register that— 

(i) a competitive private insurance market for such 

coverage does not exist; and 

(ii) the national flood insurance program has the capacity to make such coverage available without borrowing funds from the Secretary of the Treasury under 

section 1309 or otherwise; 

¿(5) (7) any flood insurance coverage which may be made 

available in excess of the limits specified in subparagraph (A), 

(B), or (C) of paragraph (1), shall be based only on chargeable 

premium rates under section 1308 which are not less than the 

estimated premium rates under section 1307(a)(1), and the 

amount of such excess coverage shall not in any case exceed an 

amount equal to the applicable limit so specified (or allocated) 

under paragraph (1)(C), (2), (3), or (4), as applicable¿. ; and 

(8) each of the dollar amount limitations under paragraphs 

(2), (3), (4), (5), and (6) shall be adjusted effective on the date 

of the enactment of the Flood Insurance Reform Act of 2011, 

such adjustments shall be calculated using the percentage 

change, over the period beginning on September 30, 1994, and 

ending on such date of enactment, in such inflationary index as 

the Administrator shall, by regulation, specify, and the dollar 

amount of such adjustment shall be rounded to the next lower 

dollar; and the Administrator shall cause to be published in the 

Federal Register the adjustments under this paragraph to such 

dollar amount limitations; except that in the case of coverage 

for a property that is made available, pursuant to this paragraph, in an amount that exceeds the limitation otherwise applicable to such coverage as specified in paragraph (2), (3), (4), 

(5), or (6), the total of 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). 

* * * * * * * 

(d) PAYMENT OF PREMIUMS IN INSTALLMENTS FOR RESIDENTIAL

PROPERTIES.— 

(1) AUTHORITY.—In addition to any other terms and conditions under subsection (a), such regulations shall provide that, 

in the case of any residential property, premiums for flood insurance coverage made available under this title for such property may be paid in installments. 

(2) LIMITATIONS.—In implementing the authority under paragraph (1), the Administrator may establish increased chargeable premium rates and surcharges, and deny coverage and establish such other sanctions, as the Administrator considers 

necessary to ensure that insureds purchase, pay for, and maintain coverage for the full term of a contract for flood insurance 

coverage or to prevent insureds from purchasing coverage only 

for periods during a year when risk of flooding is comparatively 

higher or canceling coverage for periods when such risk is comparatively lower. 


rfrederick on DSKD9S0YB1PROD with HEARING
49 

ESTIMATES OF PREMIUM RATES

SEC. 1307. (a) The ¿Director Administrator is authorized to undertake and carry out such studies and investigations and receive 

or exchange such information as may be necessary to estimate, and 

shall from time to time estimate, on an area, subdivision, or other 

appropriate basis— (1) * * * 

* * * * * * * 

(b) In carrying out subsection (a), the ¿Director Administrator 

shall, to the maximum extent feasible and on a reimbursable basis, 

utilize the services of the Department of the Army, the Department 

of the Interior, The Department of Agriculture, the Department of 

Commerce, and the Tennessee Valley Authority, and, as appropriate, other Federal departments or agencies, and for such purposes may enter into agreements or other appropriate arrangements with any persons. (c) The ¿Director Administrator shall give priority to conducting 

studies and investigations and making estimates under this section 

in those States or areas (or subdivisions thereof) which he has determined have evidenced a positive interest in securing flood insurance coverage under the flood insurance program. (d) Notwithstanding any other provision of law, any structure existing on the date of enactment of the Flood Disaster Protection Act 

of 1973 and located within Avoyelles, Evangeline, Rapides, or Saint 

Landry Parish in the State of Louisiana, which the ¿Director Administrator determines is subject to additional flood hazards as a 

result of the construction or operation of the Atchafalaya Basin 

Levee System, shall be eligible for flood insurance under this title 

(if and to the extent it is eligible for such insurance under the other 

provisions of this title) at premium rates that shall not exceed 

those which would be applicable if such additional hazards did not 

exist. 

(e) Notwithstanding any other provision of law, any community 

that has made adequate progress, acceptable to the ¿Director Administrator, on the ¿construction of a flood protection system construction, reconstruction, or improvement of a flood protection system (without respect to the level of Federal investment or participation) which will afford flood protection for the one-hundred-year 

frequency flood as determined by the ¿Director Administrator, 

shall be eligible for flood insurance under this title (if and to the 

extent it is eligible for such insurance under the other provisions 

of this title) at premium rates not exceeding those which would be 

applicable under this section if such flood protection system had 

been completed. The ¿Director Administrator shall find that adequate progress on the ¿construction of a flood protection system

construction, reconstruction, or improvement of a flood protection 

system as required herein has been only if (1) 100 percent of the 

project cost of the system has been authorized, (2) at least 60 percent of the project cost of the system has been appropriated, (3) at 

least 50 percent of the project cost of the system has been expended 

based on the present value of the completed system, and (4) the system is at least 50 percent completed. 

(f) Notwithstanding any other provision of law, this subsection 

shall only apply in a community which has been determined by the 


rfrederick on DSKD9S0YB1PROD with HEARING
50 

¿Director Administrator of the Federal Emergency Management Agency to be in the process of restoring flood protection afforded by 

a flood protection system that had been previously accredited on a 

Flood Insurance Rate Map as providing 100-year frequency flood 

protection but no longer does so (without respect to the level of Fed- eral investment or participation). Except as provided in this subsection, in such a community, flood insurance shall be made available to those properties impacted by the disaccreditation of the 

flood protection system at premium rates that do not exceed those 

which would be applicable to any property located in an area of 

special flood hazard, the construction of which was started prior to 

the effective date of the initial Flood Insurance Rate Map published 

by the ¿Director Administrator for the community in which such property is located. A revised Flood Insurance Rate Map shall be 

prepared for the community to delineate as Zone AR the areas of 

special flood hazard, whether coastal or riverine, that result from 

the disaccreditation of the flood protection system. A community 

will be considered to be in the process of restoration if— (1) the flood protection system has been deemed restorable by ¿a Federal agency in consultation with the local project 

sponsor the entity or entities that own, operate, maintain, or repair such system; 

* * * * * * * 

Communities that the ¿Director Administrator of the Federal 

Emergency Management Agency determines to meet the criteria 

set forth in paragraphs (1) and (2) as of January 1, 1992, shall not 

be subject to revised Flood Insurance Rate Maps that contravene 

the intent of this subsection. Such communities shall remain eligible for C zone rates for properties located in zone AR for any policy 

written prior to promulgation of final regulations for this section. 

Floodplain management criteria for such communities shall not require the elevation of improvements to existing structures and 

shall not exceed 3 feet above existing grade for new construction, 

provided the base flood elevation based on the disaccredited flood 

control system does not exceed five feet above existing grade, or the 

remaining new construction in such communities is limited to infill 

sites, rehabilitation of existing structures, or redevelopment of previously developed areas. 

The ¿Director Administrator of the Federal Emergency Management Agency shall develop and promulgate regulations to implement this subsection, including minimum floodplain management 

criteria, within 24 months after the date of enactment of this subsection. 

ESTABLISHMENT OF CHARGEABLE PREMIUM RATES

SEC. 1308. (a) On the basis of estimates made under section 1307 

and such other information as may be necessary, the ¿Director

Administrator shall from time to time, after consultation with the 

advisory committee authorized under section 1318, appropriate representatives of the pool formed or otherwise created under section 

1331, and appropriate representatives of the insurance authorities 

of the respective States, prescribe by regulation or notice— 

(1) * * * 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
51 

(c) ACTUARIAL RATE PROPERTIES.—Subject only to ¿the limitations provided under paragraphs (1) and (2) subsection (e) and 

subsection (g), the chargeable rate shall not be less than the appli- cable estimated risk premium rate for such area (or subdivision 

thereof) under section 1307(a)(1) with respect to the following properties: 

(1) POST-FIRM PROPERTIES.—Any property the construction or 

substantial improvement of which the ¿Director Administrator determines has been started after December 31, 1974, or 

started after the effective date of the initial rate map published 

by the ¿Director Administrator under paragraph (2) of section 

1360 for the area in which such property is located, whichever 

is later¿, except that the chargeable rate for properties under 

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

(2) COMMERCIAL PROPERTIES.—Any nonresidential property. (3) SECOND HOMES AND VACATION HOMES.—Any residential 

property that is not the primary residence of any individual. (4) HOMES SOLD TO NEW OWNERS.—Any single family property that— (A) has been constructed or substantially improved and 

for which such construction or improvement was started, as 

determined by the Administrator, before December 31, 

1974, or before the effective date of the initial rate map 

published by the Administrator under paragraph (2) of section 1360(a) for the area in which such property is located, 

whichever is later; and 

(B) is purchased after the effective date of this paragraph, pursuant to section 5(c)(3)(A) of the Flood Insurance 

Reform Act of 2011. 

(5) HOMES DAMAGED OR IMPROVED.—Any property that, on or 

after the date of the enactment of the Flood Insurance Reform 

Act of 2011, has experienced or sustained— 

(A) substantial flood damage exceeding 50 percent of the 

fair market value of such property; or 

(B) substantial improvement exceeding 30 percent of the 

fair market value of such property. 

(6) HOMES WITH MULTIPLE CLAIMS.—Any severe repetitive loss property (as such term is defined in section 1361A(b)). 

¿(2) (7) CERTAIN LEASED COASTAL AND RIVER PROPERTIES.—Any property leased from the Federal Government 

(including residential and nonresidential properties) that the 

¿Director Administrator determines is located on the riverfacing side of any dike, levee, or other riverine flood control 

structure, or seaward of any seawall or other coastal flood control structure. 

(d) With respect to any chargeable premium rate prescribed 

under this section, a sum equal to the portion of the rate that covers any administrative expenses of carrying out the flood insurance 

and floodplain management programs which have been estimated 

under paragraphs (1)(B)(ii) and (1)(B)(iii) of section 1307(a) or paragraph (2) of such section (including the fees under such paragraphs), shall be paid to the ¿Director Administrator. The ¿Director Administrator shall deposit the sum in the National Flood Insurance Fund established under section 1310. 


rfrederick on DSKD9S0YB1PROD with HEARING
52 

(e) ANNUAL LIMITATION ON PREMIUM INCREASES.—Except with 

respect to properties described under ¿paragraph (2) or (3) paragraph (7) of subsection (c) or subsection (h), and notwithstanding 

any other provision of this title, the chargeable risk premium rates 

for flood insurance under this title for any properties within any 

single risk classification may not be increased by an amount that 

would result in the average of such rate increases for properties 

within the risk classification during any 12-month period exceeding 

¿10 percent 20 percent of the average of the risk premium rates 

for properties within the risk classification upon the commencement of such 12-month period. 

(f) ADJUSTMENT OF PREMIUM.—Notwithstanding any other provision of law, if the ¿Director Administrator determines that the 

holder of a flood insurance policy issued under this Act is paying 

a lower premium than is required under this section due to an 

error in the flood plain determination, the ¿Director Administrator may only prospectively charge the higher premium rate. 

(g) 5-YEAR PHASE-IN OF FLOOD INSURANCE RATES FOR CERTAIN

PROPERTIES IN NEWLY MAPPED AREAS.— 

(1) 50 PERCENT RATE FOR INITIAL YEAR.—Notwithstanding 

subsection (c) or any other provision of law relating to chargeable risk premium rates for flood insurance coverage under this 

title, in the case of any area that was not previously designated 

as an area having special flood hazards and that, pursuant to 

any issuance, revision, updating, or other change in flood insurance maps, becomes designated as such an area, during the 12- 

month period that begins, except as provided in paragraph (2), 

upon the date that such maps, as issued, revised, updated, or 

otherwise changed, become effective, the chargeable premium 

rate for flood insurance under this title with respect to any covered property that is located within such area shall be 50 percent of the chargeable risk premium rate otherwise applicable 

under this title to the property. 

(2) APPLICABILITY TO PREFERRED RISK RATE AREAS.—In the 

case of any area described in paragraph (1) that consists of or 

includes an area that, as of date of the effectiveness of the flood 

insurance maps for such area referred to in paragraph (1) as 

so issued, revised, updated, or changed, is eligible for any reason for preferred risk rate method premiums for flood insurance 

coverage and was eligible for such premiums as of the enactment of the Flood Insurance Reform Act of 2011, the 12-month 

period referred to in paragraph (1) for such area eligible for 

preferred risk rate method premiums shall begin upon the expiration of the period during which such area is eligible for such 

preferred risk rate method premiums. 

(3) PHASE-IN OF FULL ACTUARIAL RATES.—With respect to any 

area described in paragraph (1), upon the expiration of the 12- 

month period under paragraph (1) or (2), as applicable, for 

such area, the Administrator shall increase the chargeable risk 

premium rates for flood insurance under this title for covered 

properties in such area by 20 percent, and by 20 percent upon 

the expiration of each successive 12-month period thereafter 

until the chargeable risk premium rates comply with subsection 

(c). 


rfrederick on DSKD9S0YB1PROD with HEARING
53 

(4) COVERED PROPERTIES.—For purposes of the subsection, 

the term ‘‘covered property’’ means any residential property occupied by its owner or a bona fide tenant as a primary residence. 

(h) PROHIBITION OF EXTENSION OF SUBSIDIZED RATES TO LAPSED

POLICIES.—Notwithstanding any other provision of law relating to chargeable risk premium rates for flood insurance coverage under 

this title, the Administrator shall not provide flood insurance coverage under this title for any property for which a policy for such 

coverage for the property has previously lapsed in coverage as a result of the deliberate choice of the holder of such policy, at a rate 

less than the applicable estimated risk premium rates for the area 

(or subdivision thereof) in which such property is located. 

SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS INSURANCE. 

(a) IN GENERAL.—The Administrator shall, upon entering into a contract for flood insurance coverage under this title for any property— (1) provide to the insured sufficient copies of the notice devel- oped pursuant to subsection (b); and (2) require the insured to provide a copy of the notice, or oth- erwise provide notification of the information under subsection 

(b) in the manner that the manager or landlord deems most appropriate, to each such tenant and to each new tenant upon 

commencement of such a tenancy. (b) NOTICE.—Notice to a tenant of a property in accordance with this subsection is written notice that clearly informs a tenant— (1) whether the property is located in an area having special flood hazards; 

(2) that flood insurance coverage is available under the na- tional flood insurance program under this title for contents of 

the unit or structure leased by the tenant; (3) of the maximum amount of such coverage for contents available under this title at that time; and 

(4) of where to obtain information regarding how to obtain such coverage, including a telephone number, mailing address, 

and Internet site of the Administrator where such information 

is available. 

FINANCING

SEC. 1309. (a) All authority which was vested in the Housing and Home Finance Administrator by virtue of section 15(e) of the Federal Flood Insurance Act of 1956 (70 Stat. 1084) (pertaining to the 

issue of notes or other obligations or the Secretary of the Treasury), 

as amended by subsections (a) and (b) of section 1303 of this Act, 

shall be available to the ¿Director Administrator for the purpose 

of carrying out the flood insurance program under this title; except 

that the total amount of notes and obligations which may be issued 

by the ¿Director Administrator pursuant to such authority (1) 

without the approval of the President, may not exceed 

$500,000,000, and (2) with the approval of the President, may not 

exceed $1,500,000,000 through the date specified in section 1319, 

and $1,000,000,000 thereafter; except that, through ¿September 30, 

2011 September 30, 2016, clause (2) of this sentence shall be applied by substituting ‘‘$20,725,000,000’’ for ‘‘$1,500,000,000’’. The 


rfrederick on DSKD9S0YB1PROD with HEARING
54 

¿Director Administrator shall report to the Committee on Banking, Finance and Urban Affairs of the House of Representatives 

and the Committee on Banking, Housing, and Urban Affairs of the 

Senate at any time when he requests the approval of the President 

in accordance with the preceding sentence. (b) Any funds borrowed by the ¿Director Administrator under 

this authority shall, from time to time, be deposited in the National 

Flood Insurance Fund established under section 1310. 

NATIONAL FLOOD INSURANCE FUND

SEC. 1310. (a) To carry out the flood insurance program author- ized by this title, the ¿Director Administrator shall establish in 

the Treasury of the United States a National Flood Insurance Fund 

(hereinafter referred to as the ‘‘fund’’) which shall be an account 

separate from any other accounts or funds available to the ¿Director Administrator and shall be available as described in subsection (f), without fiscal year limitation (except as otherwise provided in this section)— 

(1) * * * 

* * * * * * * 

(9) for funding, not to exceed $10,000,000 in any fiscal year, which shall remain available until expended, for mitigation ac- tions under section 1323, except that, notwithstanding any 

other provision of this title, amounts made available pursuant 

to this paragraph shall not be subject to offsetting collections 

through premium rates for flood insurance coverage under this 

title. 

(b) The fund shall be credited with— 

(1) * * * 

* * * * * * * 

(5) such sums as are required to be paid to the ¿Director

Administrator under section 1308(d); and 

* * * * * * * 

(c) If, after— 

(1) * * * 

* * * * * * * 

the ¿Director Administrator determines that the moneys of the fund are in excess of current needs, he may request the investment 

of such amounts as he deems advisable by the Secretary of the 

Treasury in obligations issued or guaranteed by the United States. 

(d) In the event the ¿Director Administrator makes a determination in accordance with the provisions of section 1340 that operation of the flood insurance program, in whole or in part, should 

be carried out through the facilities of the Federal Government, the 

fund shall be available for all purposes incident thereto, including— 

(1) * * * 

* * * * * * * 

for so long as the program is so carried out, and in such event any 

premiums paid shall be deposited by the ¿Director Administrator 

to the credit of the fund. 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
55 

OPERATING COSTS AND ALLOWANCES

SEC. 1311. (a) The ¿Director Administrator shall from time to 

time negotiate with appropriate representatives of the insurance 

industry for the purpose of establishing— 

(1) * * * 

* * * * * * * 

(b) For purposes of subsection (a)— 

(1) the term ‘‘operating costs’’ shall (without limiting such 

term) include— 

(A) * * * 

* * * * * * * 

(D) other direct, actual, and necessary expenses which 

the ¿Director Administrator finds are incurred in connection with selling or servicing flood insurance coverage; and 

(2) the term ‘‘operating allowances’’ shall (without limiting 

such term) include amounts for profit and contingencies which 

the ¿Director Administrator finds reasonable and necessary 

to carry out the purposes of this title. 

PAYMENT OF CLAIMS

SEC. 1312. ¿The Director is (a) IN GENERAL.—The Administrator is authorized to prescribe regulations establishing the general method or methods by which proved and approved claims for 

losses may be adjusted and paid for any damage to or loss of property which is covered by flood insurance made available under the 

provisions of this title. 

(b) MINIMUM ANNUAL DEDUCTIBLES.— 

(1) SUBSIDIZED RATE PROPERTIES.—For any structure that is 

covered by flood insurance under this title, and for which the 

chargeable rate for such coverage is less than the applicable estimated risk premium rate under section 1307(a)(1) for the area 

(or subdivision thereof) in which such structure is located, the 

minimum annual deductible for damage to or loss of such 

structure shall be $2,000. 

(2) ACTUARIAL RATE PROPERTIES.—For any structure that is 

covered by flood insurance under this title, for which the 

chargeable rate for such coverage is not less than the applicable 

estimated risk premium rate under section 1307(a)(1) for the 

area (or subdivision thereof) in which such structure is located, 

the minimum annual deductible for damage to or loss of such 

structure shall be $1,000. 

DISSEMINATION OF FLOOD INSURANCE INFORMATION

SEC. 1313. The ¿Director Administrator shall from time to time 

take such action as may be necessary in order to make information 

and data available to the public, and to any State or local agency 

or official, with regard to— 

(1) * * * 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
56 

STATE AND LOCAL LAND USE CONTROLS

SEC. 1315. (a) REQUIREMENT FOR PARTICIPATION IN FLOOD INSURANCE PROGRAM.— 

(1) IN GENERAL.—After December 31, 1971, no new flood insurance coverage shall be provided under this title in any area 

(or subdivision thereof) unless an appropriate public body shall 

have adopted adequate land use and control measures (with effective enforcement provisions) which the ¿Director Administrator finds are consistent with the comprehensive criteria for 

land management and use under section 1361. 

(2) AGRICULTURAL STRUCTURES.— 

(A) * * * 

(B) PREMIUM RATES AND COVERAGE.—To the extent applicable, an agricultural structure repaired or restored pursuant to subparagraph (A) shall pay chargeable premium 

rates established under section 1308 at the estimated risk 

premium rates under section 1307(a)(1). If resources are 

available, the ¿Director Administrator shall provide technical assistance and counseling, upon request of the owner 

of the structure, regarding wet flood-proofing and other 

flood damage reduction measures for agricultural structures. The ¿Director Administrator shall not be required 

to make flood insurance coverage available for such an agricultural structure unless the structure is wet floodproofed through permanent or contingent measures applied to the structure or its contents that prevent or provide resistance to damage from flooding by allowing flood 

waters to pass through the structure, as determined by the 

¿Director Administrator. 

(C) PROHIBITION ON DISASTER RELIEF.—Notwithstanding 

any other provision of law, any agricultural structure repaired or restored pursuant to subparagraph (A) shall not 

be eligible for disaster relief assistance under any program 

administered by the ¿Director Administrator or any other 

Federal agency. 

* * * * * * * 

(b) COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY

FLOODPLAIN MANAGEMENT.— 

(1) AUTHORITY AND GOALS.—The ¿Director Administrator 

shall carry out a community rating system program, under 

which communities participate voluntarily— 

(A) * * * 

* * * * * * * 

(2) INCENTIVES.—The program shall provide incentives in the 

form of credits on premium rates for flood insurance coverage 

in communities that the ¿Director Administrator determines 

have adopted and enforced measures that reduce the risk of 

flood and erosion damage that exceed the criteria set forth in 

section 1361. In providing incentives under this paragraph, the 

¿Director Administrator may provide for credits to flood insurance premium rates in communities that the ¿Director Administrator determines have implemented measures that protect natural and beneficial floodplain functions. 


rfrederick on DSKD9S0YB1PROD with HEARING
57 

(3) CREDITS.—The credits on premium rates for flood insurance coverage shall be based on the estimated reduction in 

flood and erosion damage risks resulting from the measures 

adopted by the community under this program. If a community 

has received mitigation assistance under section 1366, the 

credits shall be phased in a manner, determined by the ¿Director Administrator, to recover the amount of such assistance 

provided for the community. 

(4) REPORTS.—Not later than 2 years after the date of enactment of the Riegle Community Development and Regulatory 

Improvement Act of 1994 and not less than every 2 years 

thereafter, the ¿Director Administrator shall submit a report 

to the Congress regarding the program under this subsection. 

Each report shall include an analysis of the cost-effectiveness 

of the program, any other accomplishments or shortcomings of 

the program, and any recommendations of the ¿Director Administrator for legislation regarding the program. 

PROPERTIES IN VIOLATION OF STATE AND LOCAL LAW

SEC. 1316. No new flood insurance coverage shall be provided 

under this title for any property which the ¿Director Administrator finds has been declared by a duly constituted State or local 

zoning authority, or other authorized public body, to be in violation 

of State or local laws, regulations or ordinances which are intended 

to discourage or otherwise restrict land development or occupancy 

in flood-prone areas. 

COORDINATION WITH OTHER PROGRAMS

SEC. 1317. In carrying out this title, the ¿Director Administrator shall consult with other departments and agencies of the 

Federal Government, and with interstate, State, and local agencies 

having responsibilities for flood control, flood forecasting, or flood 

damage prevention, in order to assure that the programs of such 

agencies and the flood insurance program authorized under this 

title are mutually consistent. 

ADVISORY COMMITTEE

SEC. 1318. (a) The ¿Director Administrator shall appoint a flood 

insurance advisory committee without regard to the provisions of 

title 5, United States Code, governing appointments in the competitive service, and such committee shall advise the ¿Director Administrator in the preparation of any regulations prescribed in accordance with this title and with respect to policy matters arising 

in the administration of this title, and shall perform such other responsibilities as the ¿Director Administrator may, from time to 

time, assign to such committee. 

* * * * * * * 

(c) Members of the committee shall, while attending conferences 

or meetings thereof, be entitled to receive compensation at a rate 

fixed by the ¿Director Administrator but not exceeding $100 per 

day, including traveltime, and while so serving away from their 

homes or regular places of business they may be allowed travel expenses, including per diem in lieu of subsistence, as is authorized 


rfrederick on DSKD9S0YB1PROD with HEARING
58 

under section 5703 of title 5, United States Code, for persons in the 

Government service employed intermittently. 

PROGRAM EXPIRATION

SEC. 1319. No new contract for flood insurance under this title 

shall be entered into after ¿September 30, 2011 September 30, 

2016. 

¿REPORT TO THE PRESIDENT ANNUAL REPORT TO CONGRESS

SEC. 1320. (a) IN GENERAL.—The ¿Director Administrator shall 

¿biennially submit a report of operations under this title to ¿the 

President for submission to the Congress not later than June 30 

of each year. 

(b) EFFECTS OF FLOOD INSURANCE PROGRAM.—The ¿Director

Administrator shall include, as part of the ¿biennial annual report submitted under subsection (a), a chapter reporting on the effects on the flood insurance program observed through implementation of requirements under the Riegle Community Development 

and Regulatory Improvement Act of 1994. 

(c) FINANCIAL STATUS OF PROGRAM.—The report under this section for each year shall include information regarding the financial 

status of the national flood insurance program under this title, including a description of 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. 1323. DIRECT GRANTS FOR REPETITIVE INSURANCE CLAIMS 

PROPERTIES. 

(a) IN GENERAL.—The ¿Director Administrator may provide 

funding, to owners of such properties, for mitigation actions that reduce flood damages to individual properties for which ¿1 two or 

more claim payments for losses have been made under flood insurance coverage under this title, but only if the ¿Director Administrator determines that— 

(1) * * * 

* * * * * * * 

(b) PRIORITY FOR WORST-CASE PROPERTIES.—In determining the 

properties for which funding is to be provided under this section, 

the ¿Director Administrator shall consult with the States in which 

such properties are located and provide assistance for properties in 

the order that will result in the greatest amount of savings to the 

National Flood Insurance Fund in the shortest period of time. 

* * * * * * * 

SEC. 1325. TREATMENT OF SWIMMING POOL ENCLOSURES OUTSIDE OF 

HURRICANE SEASON. 

In the case of any property that is otherwise in compliance with 

the coverage and building requirements of the national flood insurance program, the presence of an enclosed swimming pool located 

at ground level or in the space below the lowest floor of a building 

after November 30 and before June 1 of any year shall have no effect on the terms of coverage or the ability to receive coverage for 

such building under the national flood insurance program estabVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00058 Fmt 6659 Sfmt 6603 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
59 

lished pursuant to this title, if the pool is enclosed with non-supporting breakaway walls. 

CHAPTER II—ORGANIZATION AND ADMINISTRATION OF 

THE FLOOD INSURANCE PROGRAM 

ORGANIZATION AND ADMINISTRATION

SEC. 1330. Following such consultation with representatives of the insurance industry as may be necessary, the ¿Director Administrator shall implement the flood insurance program authorized under chapter I in accordance with the provision of part A of this 

chapter and, if a determination is made by him under section 1340, 

under part B of this chapter. 

PART A—INDUSTRY PROGRAM WITH FEDERAL FINANCIAL

ASSISTANCE

INDUSTRY FLOOD INSURANCE POOL

SEC. 1331. (a) The ¿Director Administrator is authorized to encourage and otherwise assist any insurance companies and other 

insurers which meet the requirements prescribed under subsection 

(b) to form, as associate, or otherwise join together in a pool— (1) * * * 

(2) for the purpose of assuming, including as reinsurance of insurance coverage provided by the flood insurance program, on 

such terms and conditions as may be agreed upon, such financial responsibility as will enable such companies and other insurers, with the Federal financial and other assistance available under this title, to assure a reasonable proportion of responsibility for the adjustment and payment of claims for 

losses under the flood insurance program. 

(b) In order to promote the effective administration of the flood 

insurance program under this part, and to assure that the objectives of this title are furthered, the ¿Director Administrator is authorized to prescribe appropriate requirements for insurance companies and other insurers participating in such pool including, but 

not limited to, minimum requirements for capital or surplus or assets. 

AGREEMENTS WITH FLOOD INSURANCE POOL

SEC. 1332. (a) The ¿Director Administrator is authorized to 

enter into such agreements with the pool formed or otherwise created under this part as he deems necessary to carry out the purposes of this title. 

(b) Such agreements shall specify— 

(1) * * * 

* * * * * * * 

(3) the maximum amount of profit, established by the ¿Director Administrator and set forth in the schedules prescribed 

under section 1311, which may be realized by such pool (and 

the companies and other insurers participating therein), 

* * * * * * * 

(c) In addition, such agreements shall contain such provisions as 

the ¿Director Administrator finds necessary to assure that— 


rfrederick on DSKD9S0YB1PROD with HEARING
60 

(1) * * * 

(2) the insurance companies and other insurers participating 

in the pool will take whatever action may be necessary to provide continuity of flood insurance coverage or reinsurance by 

the pool, and 

* * * * * * * 

PREMIUM EQUALIZATION PAYMENTS

SEC. 1334. (a) The ¿Director Administrator, on such terms and 

conditions as he may from time to time prescribe, shall make periodic payments to the pool formed or otherwise created under section 1331, in recognition of such reductions in chargeable premium 

rates under section 1308 below estimated premium rates under section 1307(a)(1) as are required in order to make flood insurance 

available on reasonable terms and conditions. 

(b) Designated periods under this section and the methods for determining the sum of premiums paid or payable during such periods shall be established by the ¿Director Administrator. 

REINSURANCE COVERAGE

SEC. 1335. (a)(1) The ¿Director Administrator is authorized to 

take such action as may be necessary in order to make available, 

to the pool formed or otherwise created under section 1331, reinsurance for losses (due to claims for proved and approved losses 

covered by flood insurance) which are in excess of losses assumed 

by such pool in accordance with the excess loss agreement entered 

into under subsection (c). 

(2) The Administrator is authorized to secure reinsurance coverage of coverage provided by the flood insurance program from private market insurance, reinsurance, and capital market sources at 

rates and on terms determined by the Administrator to be reasonable and appropriate in an amount sufficient to maintain the ability of the program to pay claims and that minimizes the likelihood 

that the program will utilize the borrowing authority provided 

under section 1309. 

(b) Such reinsurance shall be made available pursuant to contract, agreement, or any other arrangement, in consideration of 

such payment of a premium, fee, or other charge as the ¿Director

Administrator finds necessary to cover anticipated losses and other 

costs of providing such reinsurance. 

(c) The ¿Director Administrator is authoried to negotiate an excess loss agreement, from time to time, under which the amount 

of flood insurance retained by the pool, after ceding reinsurance, 

shall be adequate to further the purposes of this title, consistent 

with the objective of maintaining appropriate financial participation and risk sharing to the maximum extent practicable on the 

part of participating insurance companies and other insurers. 

(d) All reinsurance claims for losses in excess of losses assumed 

by the pool shall be submitted on a portfolio basis by such pool in 

accordance with terms and conditions established by the ¿Director

Administrator. 


rfrederick on DSKD9S0YB1PROD with HEARING
61 

EMERGENCY IMPLEMENTATION OF PROGRAM

SEC. 1336. (a) Notwithstanding any other provisions of this title, 

for the purpose of providing flood insurance coverage at the earliest 

possible time, the ¿Director Administrator shall carry out the 

flood insurance program authorized under chapter I during the period ending on the date specified in section 1319, in accordance 

with the provisions of this part and the other provision of this title 

insofar as they relate to this part but subject to the modifications 

made by or under subsection (b). 

(b) In carrying out the flood insurance program pursuant to subsection (a), the ¿Director Administrator— 

(1) * * * 

* * * * * * * 

PART B—GOVERNMENT PROGRAM WITH INDUSTRY ASSISTANCE

FEDERAL OPERATION OF THE PROGRAM

SEC. 1340. (a) If at any time, after consultation with representatives of the insurance industry, the ¿Director Administrator determines that operation of the flood insurance program as provided 

under part A cannot be carried out, or that such operation, in 

itself, would be assisted materially by the Federal Government’s 

assumption, in whole or in part, of the operational responsibility 

for flood insurance under this title (on a temporary or other basis) 

he shall promptly undertake any necessary arrangements to carry 

out the program of flood insurance authorized under chapter I 

through the facilities of the Federal Government, utilizing, for purposes of providing flood insurance coverage, either— 

(1) * * * 

(2) such other officers and employees of any executive agency 

(as defined in section 105 of title 5 of the United States Code) 

as the ¿Director Administrator and the head of any such 

agency may from time to time, agree upon, on a reimbursement or other basis, or 

* * * * * * * 

(b) Upon making the determination referred to in subsection (a), 

the ¿Director Administrator shall make a report to the Congress 

and, at the same time, to the private insurance companies participating in the National Flood Insurance Program pursuant to section 1310 of this Act. Such report shall— 

(1) * * * 

* * * * * * * 

(4) contain such recommendations as the ¿Director Administrator deems advisable. 

The ¿Director Administrator shall not implement the program of 

flood insurance authorized under chapter I through the facilities of 

the Federal Government until 9 months after the date of submission of the report under this subsection unless it would be impossible to continue to effectively carry out the National Flood Insurance Program operations during this time. 


rfrederick on DSKD9S0YB1PROD with HEARING
62 

ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW

SEC. 1341. In the event the program is carried out as provided in section 1340, the ¿Director Administrator shall be authorized 

to adjust and make payment of any claims for proved and approved 

losses covered by flood insurance, and upon the disallowance by the 

¿Director Administrator of any such claims, or upon the refusal of the claimant to accept the amount allowed upon any such claim, 

the claimant, within one year after the date of mailing of notice of 

disallowance or partial disallowance by the ¿Director Administrator, may institute an action against the ¿Director Administrator on such claim in the United States district court for the district in which the insured property or the major part thereof shall 

have been situated, and original exclusive jurisdiction is hereby 

conferred upon such court to hear and determine such action without regard to the amount in controversy. 

PART C—PROVISIONS OF GENERAL APPLICABILITY

SERVICES BY INSURANCE INDUSTRY

SEC. 1345. (a) In administering the flood insurance program under this chapter, the ¿Director Administrator is authorized to 

enter into any contracts, agreements, or other appropriate arrangements which may, from time to time, be necessary for the purpose 

of utilizing, on such terms and conditions as may be agreed upon, 

the facilities and services of any insurance companies or other insurers, insurance agents and brokers, or insurance adjustment organizations; and such contracts, agreements, or arrangements may 

include provision for payment of applicable operating costs and allowances for such facilities and services as set forth in the schedules prescribed under section 1311. 

* * * * * * * 

(c) The ¿Director Administrator of the Federal Emergency Man- agement Agency shall hold any agent or broker selling or undertaking to sell flood insurance under this title harmless from any 

judgment for damages against such agent or broker as a result of 

any court action by a policyholder or applicant arising out of an 

error or omission on the part of the Federal Emergency Management Agency, and shall provide any such agent or broker with indemnification, including court costs and reasonable attorney fees, 

arising out of and caused by an error or omission on the part of 

the Federal Emergency Management Agency and its contractors. 

The ¿Director Administrator of the Federal Emergency Management Agency may not hold harmless or indemnify an agent or 

broker for his or her error or omission. 

USE OF INSURANCE POOL, COMPANIES, OR OTHER PRIVATE

ORGANIZATIONS FOR CERTAIN PAYMENTS

SEC. 1346. (a) In order to provide for maximum efficency in the 

administration of the flood insurance program and in order to facilitate the expeditious payment of any Federal funds under such 

program, the ¿Director Administrator may enter into contracts 

with a pool formed or otherwise created under section 1331, or any 

insurance company or other private organization, for the purpose 

of securing performance by such pool, company, or organization, or 


rfrederick on DSKD9S0YB1PROD with HEARING
63 

for purposes of securing reinsurance of insurance coverage provided 

by the program, of any or all of the following responsibilities: (1) ¿estimating Estimating and later determining any amounts of payments to be made¿; . (2) ¿receiving Receiving from the ¿Director Administrator, disbursing, and accounting for funds in making such payments¿; . (3) ¿making Making such audits of the records of any insurance company or other insurer, insurance agent or 

broker, or insurance adjustment organization as may be 

necessary to assure that proper payments are made¿; 

and . (4) Placing reinsurance coverage on insurance provided by such program. 

¿(4) otherwise (5) Otherwise assisting in such manner as the contract may provide to further the purposes of this 

title. 

(b) Any contract with the pool or an insurance company or other private organization under this section may contain such terms and 

conditions at the ¿Director Administrator finds necessary or ap- propriate for carrying out responsibilities under subsection (a), and 

may provide for payment of any costs which the ¿Director Administrator determines are incidental to carrying out such responsibil- ities which are covered by the contract. 

* * * * * * * 

(d) No contract may be entered into under this section unless the 

¿Director Administrator finds that the pool, company, or organization will perform its obligations under the contract efficiently and 

effectively, and will meet such requirements as to financial responsibility, legal authority, and other matters as he finds pertinent. 

(e)(1) Any such contract may require the pool, company, or organization or any of its officers or employees certifying payments or 

disbursing funds pursuant to the contract, or otherwise participating in carrying out the contract, to give surety bond to the 

United States in such amount as the ¿Director Administrator may 

deem appropriate. 

* * * * * * * 

(f) Any contract entered into under this section shall be for a 

term of one year, and may be made automatically renewable from 

term to term in the absence of notice by either party of an intention to terminate at the end of the current term; except that the 

¿Director Administrator may terminate any such contract at any time (after reasonable notice to the pool, company, or organization 

involved) if he finds that the pool, company, or organization has 

failed substantially to carry out the contract, or is carrying out the 

contract in a manner inconsistent with the efficient and effective 

administration of the flood insurance program authorized under 

this title. 

SETTLEMENT AND ARBITRATION

SEC. 1347. (a) The ¿Director Administrator is authorized to 

make final settlement of any claims or demands which may arise 

as a result of any financial transactions which he is authorized to 

carry out under this chapter, and may, to assist him in making any 


rfrederick on DSKD9S0YB1PROD with HEARING
64 

such settlement, refer any disputes relating to such claims or demands to arbitration, with the consent of the parties concerned. (b) Such arbitration shall be advisory in nature, and any award, decision, or recommendation which may be made shall become final 

only upon the approval of the ¿Director Administrator. 

RECORDS AND AUDITS

SEC. 1348. (a) The flood insurance pool formed or otherwise created under part A of this chapter, and any insurance company or 

other private organization executing any contract, agreement, or 

other appropriate arrangement with the ¿Director Administrator 

under part B of this chapter or this part, shall keep such records 

as the ¿Director Administrator shall prescribe, including records which fully disclose the total costs of the program undertaken or 

the services being rendered, and such other records as will facilitate an effective audit. 

(b) The ¿Director Administrator and the Comptroller General of 

the United States, or any of their duly authorized representatives, 

shall have access for the purpose of audit and examination to any 

books, documents, papers and any such insurance company or 

other private organization that are pertinent to the costs of the 

program undertaken or the services being rendered. 

SEC. 1349. NOTIFICATION TO POLICY HOLDERS REGARDING DIRECT 

MANAGEMENT OF POLICY BY FEMA. 

(a) NOTIFICATION.—Not later than 60 days before the date on which a transferred flood insurance policy expires, and annually 

thereafter until such time as the Federal Emergency Management 

Agency is no longer directly administering such policy, the Administrator shall notify the holder of such policy that— (1) the Federal Emergency Management Agency is directly ad- ministering the policy; (2) such holder may purchase flood insurance that is directly administered by an insurance company; and (3) purchasing flood insurance offered under the National Flood Insurance Program that is directly administered by an 

insurance company will not alter the coverage provided or the 

premiums charged to such holder that otherwise would be provided or charged if the policy was directly administered by the 

Federal Emergency Management Agency. (b) DEFINITION.—In this section, the term ‘‘transferred flood insurance policy’’ means a flood insurance policy that— (1) was directly administered by an insurance company at the 

time the policy was originally purchased by the policy holder; 

and 

(2) at the time of renewal of the policy, direct administration 

of the policy was or will be transferred to the Federal Emergency Management Agency. 

CHAPTER III—COORDINATION OF FLOOD INSURANCE WITH 

LAND-MANAGEMENT PROGRAMS IN FLOOD-PRONE AREAS 

IDENTIFICATION OF FLOOD-PRONE AREAS

SEC. 1360. (a) The ¿Director Administrator is authorized to consult with, receive information from, and enter into any agreements 

or other arrangements with the Secretaries of the Army, the InteVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00064 Fmt 6659 Sfmt 6601 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
65 

rior, Agriculture, and Commerce, the Tennessee Valley Authority, 

and the heads of other Federal departments or agencies, on a reimbursement basis, or with the head of any State or local agency, or 

enter into contracts with any persons or private firms, in order that 

he may— (1) * * * 

* * * * * * * 

(b) The ¿Director Administrator is directed to accelerate the 

identification of risk zones within flood-prone and mudslide-prone 

areas, as provided by subsection (a)(2) of this section, in order to 

make known the degree of hazard within each such zone at the 

earliest possible date. To accomplish this objective, the ¿Director

Administrator is authorized, without regard to subsections (a) and (b) of section 3324 of title 31, United States Code, and section 3709 

of the Revised Statutes (41 U.S.C. 5), to make grants, provide technical assistance, and enter into contracts, cooperative agreements, 

or other transactions, on such terms as he may deem appropriate, 

or consent to modifications thereof, and to make advance or 

progress payments in connection therewith. (c) The Secretary of Defense (through the Army Corps of Engi- neers), the Secretary of the Interior (through the United States Geological Survey), the Secretary of Agriculture (through the Soil 

Conservation Service), the Secretary of Commerce (through the National Oceanic and Atmospheric Administration), the head of the 

Tennessee Valley Authority, and the heads of all other Federal 

agencies engaged in the identification or delineation of flood-risk 

zones within the several States shall, in consultation with the ¿Director Administrator, give the highest practicable priority in the allocation of available manpower and other available resources to 

the identification and mapping of flood hazard areas and flood-risk 

zones, in order to assist the ¿Director Administrator to meet the 

deadline established by this section. (d) The ¿Director Administrator shall, not later than September 

30, 1984, submit to the Congress a plan for bringing all communities containing flood-risk zones into full program status by September 30, 1987. 

(e) REVIEW OF FLOOD MAPS.—Once during each 5-year period (the 1st such period beginning on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 

1994) or more often as the ¿Director Administrator determines 

necessary, the ¿Director Administrator shall assess the need to revise and update all floodplain areas and flood risk zones identified, 

delineated, or established under this section, based on an analysis 

of all natural hazards affecting flood risks. (f) UPDATING FLOOD MAPS.—The ¿Director Administrator shall 

revise and update any floodplain areas and flood-risk zones— (1) upon the determination of the ¿Director Administrator, according to the assessment under subsection (e), that revision 

and updating are necessary for the areas and zones; or (2) upon the request from any State or local government stating that specific floodplain areas or flood-risk zones in the 

State or locality need revision or updating, if sufficient technical data justifying the request is submitted and the unit of 

government making the request agrees to provide funds in an 

amount determined by the ¿Director Administrator, but 


rfrederick on DSKD9S0YB1PROD with HEARING
66 

which may not exceed 50 percent of the cost of carrying out the 

requested revision or update. 

(g) AVAILABILITY OF FLOOD MAPS.—To promote compliance with 

the requirements of this title, the ¿Director Administrator shall 

make flood insurance rate maps and related information available 

free of charge to the Federal entities for lending regulation, Federal 

agency lenders, State agencies directly responsible for coordinating 

the national flood insurance program, and appropriate representatives of communities participating in the national flood insurance 

program, and at a reasonable cost to all other persons. Any receipts 

resulting from this subsection shall be deposited in the National 

Flood Insurance Fund, pursuant to section 1310(b)(6). 

(h) NOTIFICATION OF FLOOD MAP CHANGES.—The ¿Director Administrator shall cause notice to be published in the Federal Reg- ister (or shall provide notice by another comparable method) of any 

change to flood insurance map panels and any change to flood insurance map panels issued in the form of a letter of map amendment or a letter of map revision. Such notice shall be published or 

otherwise provided not later than 30 days after the map change or 

revision becomes effective. Notice by any method other than publication in the Federal Register shall include all pertinent information, provide for regular and frequent distribution, and be at least 

as accessible to map users as notice in the Federal Register. All notices under this subsection shall include information on how to obtain copies of the changes or revisions. (i) COMPENDIA OF FLOOD MAP CHANGES.—Every 6 months, the 

¿Director Administrator shall publish separately in their entirety 

within a compendium, all changes and revisions to flood insurance 

map panels and all letters of map amendment and letters of map 

revision for which notice was published in the Federal Register or 

otherwise provided during the preceding 6 months. The ¿Director

Administrator shall make such compendia available, free of charge, 

to Federal entities for lending regulation, Federal agency lenders, 

and States and communities participating in the national flood insurance program pursuant to section 1310 and at cost to all other 

parties. Any receipts resulting from this subsection shall be deposited in the National Flood Insurance Fund, pursuant to section 

1310(b)(6). 

(j) PROVISION OF INFORMATION.—In the implementation of revisions to and updates of flood insurance rate maps, the ¿Director

Administrator shall share information, to the extent appropriate, 

with the Under Secretary of Commerce for Oceans and Atmosphere 

and representatives from State coastal zone management programs. (k) TREATMENT OF LEVEES.—The Administrator may not issue 

flood insurance maps, or make effective updated flood insurance 

maps, that omit or disregard the actual protection afforded by an 

existing levee, floodwall, pump or other flood protection feature, regardless of the accreditation status of such feature. (l) NOTIFICATION TO MEMBERS OF CONGRESS OF MAP MOD- ERNIZATION.—Upon any revision or update of any floodplain area 

or flood-risk zone pursuant to subsection (f), any decision pursuant 

to subsection (f)(1) that such revision or update is necessary, any 

issuance of preliminary maps for such revision or updating, or any 

other significant action relating to any such revision or update, the 


rfrederick on DSKD9S0YB1PROD with HEARING
67 

Administrator shall notify the Senators for each State affected, and 

each Member of the House of Representatives for each congressional 

district affected, by such revision or update in writing of the action 

taken. 

(m) REIMBURSEMENT.— (1) REQUIREMENT UPON BONA FIDE OFFER.—If an owner of 

any property located in an area described in section 102(i)(3) of 

the Flood Disaster Protection Act of 1973 obtains a letter of 

map amendment due to a bona fide error on the part of the Administrator of the Federal Emergency Management Agency, the 

Administrator shall reimburse such owner, or such entity or jurisdiction acting on such owner’s behalf, for any reasonable 

costs incurred in obtaining such letter. (2) REASONABLE COSTS.—The Administrator shall, by regula- tion or notice, determine a reasonable amount of costs to be reimbursed under paragraph (1), except that such costs shall not 

include legal or attorneys fees. In determining the reasonableness of costs, the Administrator shall only consider the actual 

costs to the owner of utilizing the services of an engineer, surveyor, or similar services. 

CRITERIA FOR LAND MANAGEMENT AND USE

SEC. 1361. (a) The ¿Director Administrator is authorized to 

carry out studies and investigations, utilizing to the maximum extent practicable the existing facilities and services of other Federal 

departments or agencies, and State and local governmental agencies, and any other organizations, with respect to the adequacy of 

State and local measures in flood-prone areas as to land management and use, flood control, flood zoning, and flood damage prevention, and may enter into any contracts, agreements or other appropriate arrangements to carry out such authority. 

* * * * * * * 

(c) On the basis of such studies and investigations, and such other information as he deems necessary, the ¿Director Administrator shall from time to time develop comprehensive critera designed to encourage, where necessary, the adoption of adequate 

State and local measures which, to the maximum extent feasible, 

will— 

(1) * * * 

* * * * * * * 

SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE LOSS PROPERTIES. 

(a) AUTHORITY.—To the extent amounts are made available for 

use under this section, the ¿Director Administrator may, subject to the limitations of this section, provide financial assistance to 

States and communities that decide to participate in the pilot program established under this section for taking actions with respect 

to severe repetitive loss properties (as such term is defined in subsection (b)) to mitigate flood damage to such properties and losses 

to the National Flood Insurance Fund from such properties. 

(b) SEVERE REPETITIVE LOSS PROPERTY.—For purposes of this 

section, the term ‘‘severe repetitive loss property’’ has the following 

meaning: 

(1) * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
68 

(2) MULTIFAMILY PROPERTIES.—In the case of a property con- sisting of 5 or more residences, such term shall have such 

meaning as the ¿Director Administrator shall by regulation provide. 

* * * * * * * 

(d) MATCHING REQUIREMENT.— (1) IN GENERAL.—Except as provided in paragraph (2), in any 

fiscal year the ¿Director Administrator may not provide assistance under this section to a State or community in an 

amount exceeding 3 times the amount that the State or community certifies, as the ¿Director Administrator shall require, 

that the State or community will contribute from non-Federal 

funds for carrying out the eligible activities to be funded with 

such assistance amounts. 

(2) REDUCED COMMUNITY MATCH.—With respect to any 1- 

year period in which assistance is made available under this 

section, the ¿Director Administrator may adjust the contribu- tion required under paragraph (1) by any State, and for the 

communities located in that State, to not less than 10 percent 

of the cost of the activities for each severe repetitive loss property for which grant amounts are provided if, for such year— (A) * * * 

(B) the ¿Director Administrator determines, after consultation with the State, that the State has taken actions 

to reduce the number of such properties. 

(3) NON-FEDERAL FUNDS.—For purposes of this subsection, 

the term ‘‘non-Federal funds’’ includes State or local agency 

funds, in-kind contributions, any salary paid to staff to carry 

out the eligible activities of the recipient, the value of the time 

and services contributed by volunteers to carry out such activities (at a rate determined by the ¿Director Administrator), 

and the value of any donated material or building and the 

value of any lease on a building. 

(e) NOTICE OF MITIGATION PROGRAM.— 

(1) IN GENERAL.—Upon selecting a State or community to receive assistance under subsection (a) to carry out eligible activities, the ¿Director Administrator shall notify the owners of 

a severe repetitive loss property, in plain language, within that 

State or community— 

(A) * * * 

* * * * * * * 

(2) IDENTIFICATION OF SEVERE REPETITIVE LOSS PROPERTIES.—The ¿Director Administrator shall take such steps 

as are necessary to identify severe repetitive loss properties, 

and submit that information to the relevant States and communities. 

(f) STANDARDS FOR MITIGATION OFFERS.—The program under 

this section for providing assistance for eligible activities for severe 

repetitive loss properties shall be subject to the following limitations: 

(1) PRIORITY.—In determining the properties for which to 

provide assistance for eligible activities under subsection (c), 

the ¿Director Administrator shall provide assistance for properties in the order that will result in the greatest amount of 


rfrederick on DSKD9S0YB1PROD with HEARING
69 

savings to the National Flood Insurance Fund in the shortest 

period of time, in a manner consistent with the allocation formula under paragraph (5). 

(2) OFFERS.—The ¿Director Administrator shall provide assistance in a manner that permits States and communities to 

make offers to owners of severe repetitive loss properties to 

take eligible activities under subsection (c) as soon as practicable. 

* * * * * * * 

(4) DEFERENCE TO LOCAL MITIGATION DECISIONS.—The ¿Director Administrator shall not, by rule, regulation, or order, 

establish a priority for funding eligible activities under this 

section that gives preference to one type or category of eligible 

activity over any other type or category of eligible activity. 

(5) ALLOCATION.— 

(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

of the total amount made available for assistance under 

this section in any fiscal year, the ¿Director Administrator shall allocate assistance to a State, and the communities located within that State, based upon the percentage 

of the total number of severe repetitive loss properties located within that State. 

(B) REDISTRIBUTION.—Any funds allocated to a State, 

and the communities within the State, under subparagraph (A) that have not been obligated by the end of each 

fiscal year shall be redistributed by the ¿Director Administrator to other States and communities to carry out eligible activities in accordance with this section. 

(C) EXCEPTION.—Of the total amount made available for 

assistance under this section in any fiscal year, 10 percent 

shall be made available to communities that— 

(i) * * * 

(ii) are located in States that receive little or no assistance, as determined by the ¿Director Administrator, under the allocation formula under subparagraph (A). 

* * * * * * * 

(g) PURCHASE OFFERS.—A State or community may take action 

under subsection (c)(2) to purchase a severe repetitive loss property 

only if the following requirements are met: 

(1) USE OF PROPERTY.—The State or community enters into 

an agreement with the ¿Director Administrator that provides 

assurances that the property purchased will be used in a manner that is consistent with the requirements of section 

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

Emergency Assistance Act (42 U.S.C. 5170c(b)(2)(B)) for properties acquired, accepted, or from which a structure will be removed pursuant to a project provided property acquisition and 

relocation assistance under such section 404(b). 

(2) OFFERS.—The ¿Director Administrator shall provide assistance in a manner that permits States and communities to 

make offers to owners of severe repetitive loss properties and 


rfrederick on DSKD9S0YB1PROD with HEARING
70 

of associated land to engage in eligible activities as soon as 

possible. 

* * * * * * * 

(4) COMPARABLE HOUSING PAYMENT.—If a purchase offer made under paragraph (2) is less than the cost of the homeowner-occupant to purchase a comparable replacement dwelling outside the flood hazard area in the same community, the 

¿Director Administrator shall make available an additional 

relocation payment to the homeowner-occupant to apply to the 

difference. 

(h) INCREASED PREMIUMS IN CASES OF REFUSAL TO MITIGATE.— (1) IN GENERAL.—In any case in which the owner of a severe repetitive loss property refuses an offer to take action under 

paragraph (1) or (2) of subsection (c) with respect to such property, the ¿Director Administrator shall— 

(A) * * * 

(B) notwithstanding subsections (a) through (c) of section 1308, thereafter the chargeable premium rate with respect 

to the property shall be the amount equal to ¿150 percent 

of the chargeable rate for the property at the time that the 

offer was made, as adjusted by any other premium adjustments otherwise applicable to the property and any subsequent increases pursuant to paragraph (2) and subject to 

the limitation under paragraph (3) the applicable esti- mated risk premium rate for such coverage for the area (or 

subdivision thereof) determined in accordance with section 

1307(a), subject to phase-in of such rates in the same manner provided under paragraph (2) of section 1308(g) for 

properties described in paragraph (1) of such section. An offer to take action under paragraph (1) or (2) of subsection 

(c) shall be considered to be made for purposes of this paragraph with respect to a severe repetitive loss property regardless 

of the time that the offer was made and regardless of whether 

the Administrator has transferred financial assistance under 

this section to the State or community making the offer for 

funding such action, but only if the owner of the property is 

provided a reasonable period of time, not to exceed 15 days, to 

respond to the offer. 

¿(2) INCREASED PREMIUMS UPON SUBSEQUENT FLOOD DAM- AGE.—Notwithstanding subsections (a) through (c) of section 1308, if the owner of a severe repetitive loss property does not 

accept an offer to take action under paragraph (1) or (2) of subsection (c) with respect to such property and a claim payment 

exceeding $1,500 is made under flood insurance coverage under 

this title for damage to the property caused by a flood event 

occurring after such offer is made, thereafter the chargeable 

premium rate with respect to the property shall be the amount 

equal to 150 percent of the chargeable rate for the property at 

the time of such flood event, as adjusted by any other premium 

adjustments otherwise applicable to the property and any subsequent increases pursuant to this paragraph and subject to 

the limitation under paragraph (3). 

¿(3) LIMITATION ON INCREASED PREMIUMS.—In no case may the chargeable premium rate for a severe repetitive loss property be increased pursuant to this subsection to an amount exVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00070 Fmt 6659 Sfmt 6601 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
71 

ceeding the applicable estimated risk premium rate for the 

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

¿(4) (2) TREATMENT OF DEDUCTIBLES.—Any increase in chargeable premium rates required under this subsection for a 

severe repetitive loss property may be carried out, to the extent appropriate, as determined by the ¿Director Administrator, by adjusting any deductible charged in connection with flood insurance coverage under this title for the property. 

¿(5) (3) NOTICE OF CONTINUED OFFER.—Upon each renewal 

or modification of any flood insurance coverage under this title 

for a severe repetitive loss property, the ¿Director Administrator shall notify the owner that the offer made pursuant to subsection (c) is still open. 

¿(6) (4) APPEALS.— (A) IN GENERAL.—Any owner of a severe repetitive loss property may appeal a determination of the ¿Director Administrator to take action under paragraph (1)(B) or (2) with respect to such property, based only upon the following grounds: (i) * * * 

* * * * * * * 

(B) PROCEDURE.—An appeal under this paragraph of a determination of the ¿Director Administrator shall be 

made by filing, with the ¿Director Administrator, a request for an appeal within 90 days after receiving notice 

of such determination. Upon receiving the request, the 

¿Director Administrator shall select, from a list of independent third parties compiled by the ¿Director Administrator for such purpose, a party to hear such appeal. With- in 90 days after filing of the request for the appeal, such 

third party shall review the determination of the ¿Director Administrator and shall set aside such determination 

if the third party determines that the grounds under subparagraph (A) exist. During the pendency of an appeal 

under this paragraph, the ¿Director Administrator shall 

stay the applicability of the rates established pursuant to 

paragraph (1)(B) or (2), as applicable. (C) EFFECT OF FINAL DETERMINATION.—In an appeal 

under this paragraph— (i) if a final determination is made in favor of the 

property owner under subparagraph (A) exist, the 

third party hearing such appeal shall require the ¿Director Administrator to reduce the chargeable risk premium rate for flood insurance coverage for the 

property involved in the appeal from the amount required under paragraph (1)(B) or (2) to the amount 

paid prior to the offer to take action under paragraph 

(1) or (2) of subsection (c); and 

(ii) if a final determination is made that the grounds under subparagraph (A) do not exist, the ¿Director

Administrator shall promptly increase the chargeable risk premium rate for such property to the amount established pursuant to paragraph (1)(B) or (2), as applicable, and shall collect from the property owner the 

amount necessary to cover the stay of the applicability 


rfrederick on DSKD9S0YB1PROD with HEARING
72 

of such increased rates during the pendency of the appeal. 

* * * * * * * 

(E) REPORT.—Not later than 6 months after the date of 

the enactment of the Bunning-Bereuter-Blumenauer Flood 

Insurance Reform Act of 2004, the ¿Director Administrator shall submit a report describing the rules, procedures, and administration for appeals under this paragraph to— (i) * * * 

* * * * * * * 

(i) DISCRETIONARY ACTIONS IN CASES OF FRAUDULENT CLAIMS.— If the ¿Director Administrator determines that a fraudulent claim 

was made under flood insurance coverage under this title for a severe repetitive loss property, the ¿Director Administrator may— (1) * * * 

* * * * * * * 

(j) RULES.— (1) IN GENERAL.—The ¿Director Administrator shall, by 

rule— 

(A) * * * 

(B) ensure that the procedures developed under paragraph (1)— (i) require the ¿Director Administrator to notify 

States and communities of the availability of funding 

under this section, and that participation in the pilot 

program under this section is optional; (ii) provide that the ¿Director Administrator may 

assist States and communities in identifying severe repetitive loss properties within States or communities; 

* * * * * * * 

(iv) require each State or community to submit a list 

of severe repetitive loss properties to the ¿Director

Administrator that the State or community would like 

to be the subject of eligible activities under this section. 

(2) CONSULTATION.—Not later than 90 days after the date of 

enactment of this Act, the ¿Director Administrator shall consult with State and local officials in carrying out paragraph 

(1)(A), and provide an opportunity for an oral presentation, on 

the record, of data and arguments from such officials. 

(k) FUNDING.— 

(1) IN GENERAL.—Pursuant to section 1310(a)(8), the ¿Director Administrator may use amounts from the National Flood 

Insurance Fund to provide assistance under this section in 

each of fiscal years 2005, 2006, 2007, 2008, and 2009, except 

that the amount so used in each such fiscal year may not exceed $40,000,000 and shall remain available until expended. 

Notwithstanding any other provision of this title, amounts 

made available pursuant to this subsection shall not be subject 

to offsetting collections through premium rates for flood insurance coverage under this title. 


rfrederick on DSKD9S0YB1PROD with HEARING
73 

(2) ADMINISTRATIVE EXPENSES.—Of the amounts made available under this subsection, the ¿Director Administrator may use up to 5 percent for expenses associated with the administration of this section. 

(l) TERMINATION.—The ¿Director Administrator may not provide assistance under this section to any State or community after September 30, 2009. 

APPEALS

SEC. 1363. (a) In establishing projected flood elevations for land use purposes with respect to any community pursuant to section 

1361, the ¿Director Administrator shall first propose such determinations by publication for comment in the Federal Register, by 

direct notification to the chief executive officer of the community, 

and by publication in a prominent local newspaper. (b) The ¿Director Administrator shall publish notification of 

flood elevation determinations in a prominent local newspaper at 

least twice during the ten-day period following notification to the 

local government. During the ninety-day period following the second publication, any owner or lessee of real property within the 

community who believes his property rights to be adversely affected by the ¿Director’s Administrator’s proposed determination 

may appeal such determination to the local government. The sole 

basis for such appeal shall be the possession of knowledge or information indicating that elevations being proposed by the ¿Director

Administrator with respect to an identified area having special 

flood hazards are scientifically or technically incorrect, and the sole 

relief which shall be granted under the authority of this section in 

the event that such appeal is sustained in accordance with subsection (e) or (f) is a modification of the ¿Director’s Administrator’s proposed determination accordingly. (c) Appeals by private persons shall be made to the chief executive officer of the community, or to such agency as he shall publicly 

designate, and shall set forth the data that tend to negate or contradict the ¿Director’s Administrator’s finding in such form as the 

chief executive officer may specify. The community shall review 

and consolidate all such appeals and issue a written opinion stating whether the evidence presented is sufficient to justify an appeal 

on behalf of such persions by the community in its own name. 

Whether or not the community decides to appeal the ¿Director’s

Administrator’s determination, copies of individual appeals shall be 

sent to the ¿Director Administrator as they are received by the 

community, and the community’s appeal or a copy of its decision 

not to appeal shall be filed with the ¿Director Administrator not 

later than ninety days after the date of the second newspaper publication of the ¿Director’s Administrator’s notification. 

(d) In the event the ¿Director Administrator does not receive an 

appeal from the community within the ninety days provided he 

shall consolidate and review on their own merits, in accordance 

with the procedures set forth in subsection (e), the appeals filed 

within the community by private persons and shall make such 

modifications of his proposed determinations as may be appropriate, taking into account the written opinion, if any, issued by 

the community in not supporting such appeals. The ¿Director’s

Administrator’s decision shall be in written form, and copies thereVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00073 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
74 

of shall be sent both to the chief executive officer of the community 

and to each individual appellant. (e) Upon appeal by any community, as provided by this section, the ¿Director Administrator shall review and take fully into ac- count any technical or scientific data submitted by the community 

that tend to negate or contradict the information upon which his 

proposed determination is based. The ¿Director Administrator 

shall resolve such appeal by consultation with officials of the local 

government involved, by administrative hearing, or by submission 

of the conflicting data to an independent scientific body or appropriate Federal agency for advice. Until the conflict in data is resolved, and the ¿Director Administrator makes a final determination on the basis of his findings in the Federal Register, and so notifies the governing body of the community, flood insurance previously available within the community shall continue to be available, and no person shall be denied the right to purchase such insurance at chargeable rates. The ¿Director Administrator shall 

make his determination within a reasonable time. The community 

shall be given a reasonable time after the ¿Director’s Administrator’s final determination in which to adopt local land use and control measures consistent with the ¿Director’s Administrator’s determination. The reports and other information used by the ¿Director Administrator in making his final determination shall be 

made available for public inspection and shall be admissible in a 

court of law in the event the community seeks judicial review as 

provided by this section. 

(f) When, incident to any appeal under subsection (b) or (c), the 

owner or lessee of real property or the community, as the case may 

be, incurs expense in connection with the services of surveyors, engineers, or similar services, but not including legal services, in the 

effecting of an appeal which is successful in whole or in part, the 

¿Director Administrator shall reimburse such individual or community to an extent measured by the ratio of the successful portion 

of the appeal as compared to the entire appeal and applying such 

ratio to the reasonable value of all such services, but no reimbursement shall be made by the ¿Director Administrator in respect to 

any fee or expense payment, the payment of which was agreed to 

be contingent upon the result of the appeal. There is authorized to 

be appropriated for purposes of implementing this subsection, not 

to exceed $250,000. 

(g) Any appellant aggrieved by any final determination of the 

¿Director Administrator upon administrative appeal, as provided 

by this section, may appeal such determination to the United 

States district court for the district within which the community is 

located not more than sixty days after receipt of notice of such determination. The scope of review by the court shall be as provided 

by chapter 7 of title 5, United States Code. During the pendency 

of any such litigation, all final determinations of the ¿Director Administrator shall be effective for the purposes of this title unless 

stayed by the court for good cause shown. 

NOTICE REQUIREMENTS

SEC. 1364. (a) NOTIFICATION OF SPECIAL FLOOD HAZARDS.— 

(1) REGULATED LENDING INSTITUTIONS.—Each Federal entity 

for lending regulation (after consultation and coordination with 


rfrederick on DSKD9S0YB1PROD with HEARING
75 

the Financial Institutions Examination Council) shall by regulation require regulated lending institutions, as a condition of 

making, increasing, extending, or renewing any loan secured 

by improved real estate or a mobile home that the regulated 

lending institution determines is located or is to be located in 

an area that has been identified by the ¿Director Administrator under this title or the Flood Disaster Protection Act of 

1973 as an area having special flood hazards, to notify the purchaser or lessee (or obtain satisfactory assurances that the seller or lessor has notified the purchaser or lessee) and the 

servicer of the loan of such special flood hazards, in writing, 

a reasonable period in advance of the signing of the purchase 

agreement, lease, or other documents involved in the transaction. The regulations shall also require that the regulated 

lending institution retain a record of the receipt of the notices 

by the purchaser or lessee and the servicer. (2) FEDERAL AGENCY LENDERS.—Each Federal agency lender 

shall by regulation require notification in the manner provided 

under paragraph (1) with respect to any loan that is made by 

the Federal agency lender and secured by improved real estate 

or a mobile home located or to be located in an area that has 

been identified by the ¿Director Administrator under this title 

or the Flood Disaster Protection Act of 1973 as an area having 

special flood hazards. Any regulations issued under this paragraph shall be consistent with and substantially identical to 

the regulations issued under paragraph (1). 

(3) CONTENTS OF NOTICE.—Written notification required 

under this subsection shall include— 

(A) a warning, in a form to be established by the ¿Director Administrator, stating that the building on the improved real estate securing the loan is located, or the mobile home securing the loan is or is to be located, in an 

area having special flood hazards; 

* * * * * * * 

(D) any other information that the ¿Director Administrator considers necessary to carry out the purposes of the 

national flood insurance program. (b) NOTIFICATION OF CHANGE OF SERVICER.— 

(1) LENDING INSTITUTIONS.—Each Federal entity for lending 

regulation (after consultation and coordination with the Financial Institutions Examination Council) shall by regulation require regulated lending institutions, in connection with the 

making, increasing, extending, renewing, selling, or transferring any loan described in subsection (a)(1), to notify the ¿Director Administrator (or the designee of the ¿Director Administrator) in writing during the term of the loan of the 

servicer of the loan. Such institutions shall also notify the ¿Director Administrator (or such designee) of any change in the 

servicer of the loan, not later than 60 days after the effective 

date of such change. The regulations under this subsection 

shall provide that upon any change in the servicing of a loan, 

the duty to provide notification under this subsection shall 

transfer to the transferee servicer of the loan. 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
76 

(c) NOTIFICATION OF EXPIRATION OF INSURANCE.—The ¿Director

Administrator (or the designee of the ¿Director Administrator) 

shall, not less than 45 days before the expiration of any contract 

for flood insurance under this title, issue notice of such expiration 

by first class mail to the owner of the property covered by the contract, the servicer of any loan secured by the property covered by 

the contract, and (if known to the ¿Director Administrator) the 

owner of the loan. 

STANDARD HAZARD DETERMINATION FORMS

SEC. 1365. (a) DEVELOPMENT.—The ¿Director Administrator, in 

consultation with representatives of the mortgage and lending industry, the Federal entities for lending regulation, the Federal 

agency lenders, and any other appropriate individuals, shall develop a standard form for determining, in the case of a loan secured by improved real estate or a mobile home, whether the building or mobile home is located in an area identified by the ¿Director Administrator as an area having special flood hazards and in 

which flood insurance under this title is available. The form shall 

be established by regulations issued not later than 270 days after 

the date of enactment of the Riegle Community Development and 

Regulatory Improvement Act of 1994. 

(b) DESIGN AND CONTENTS.— 

(1) * * * 

(2) CONTENTS.—The form shall require identification of the 

type of flood-risk zone in which the building or mobile home is 

located, the complete map and panel numbers for the improved 

real estate or property on which the mobile home is located, 

the community identification number and community participation status (for purposes of the national flood insurance program) of the community in which the improved real estate or 

such property is located, and the date of the map used for the 

determination, with respect to flood hazard information on file 

with the ¿Director Administrator. If the building or mobile 

home is not located in an area having special flood hazards the 

form shall require a statement to such effect and shall indicate 

the complete map and panel numbers of the improved real estate or property on which the mobile home is located. If the 

complete map and panel numbers are not available because 

the building or mobile home is not located in a community that 

is participating in the national flood insurance program or because no map exists for the relevant area, the form shall require a statement to such effect. The form shall provide for inclusion or attachment of any relevant documents indicating revisions or amendments to maps. 

* * * * * * * 

(e) RELIANCE ON PREVIOUS DETERMINATION.—Any person increasing, extending, renewing, or purchasing a loan secured by improved real estate or a mobile home may rely on a previous determination of whether the building or mobile home is located in an 

area having special flood hazards (and shall not be liable for any 

error in such previous determination), if the previous determination was made not more than 7 years before the date of the transVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00076 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
77 

action and the basis for the previous determination has been set 

forth on a form under this section, unless— 

(1) * * * 

(2) the person contacts the ¿Director Administrator to determine when the most recent map revisions or updates affecting such property occurred and such revisions and updates 

have occurred after such previous determination. 

* * * * * * * 

MITIGATION ASSISTANCE

SEC. 1366. (a) AUTHORITY.—The ¿Director Administrator shall 

carry out a program to provide financial assistance to States and 

communities, using amounts made available from the National 

Flood Mitigation Fund under section 1367, for planning and carrying out activities designed to reduce the risk of flood damage to 

structures covered under contracts for flood insurance under this 

title. Such financial assistance shall be made available to States 

and communities in the form of grants under subsection (b) for 

planning assistance and in the form of grants under this section for 

carrying out mitigation activities. (b) PLANNING ASSISTANCE GRANTS.— (1) IN GENERAL.—The ¿Director Administrator may make grants under this subsection to States and communities to assist in developing mitigation plans under subsection (c). (2) FUNDING.—Of any amounts made available from the Na- tional Flood Mitigation Fund for use under this section in any 

fiscal year, the ¿Director Administrator may use not more 

than 7.5 percent of the available funds under this section to 

provide planning assistance grants under this subsection. 

* * * * * * * 

(c) ELIGIBILITY FOR MITIGATION ASSISTANCE.—To be eligible to 

receive financial assistance under this section for mitigation activities, a State or community shall develop, and have approved by the 

¿Director Administrator, a flood risk mitigation plan (in this sec- tion referred to as a ‘‘mitigation plan’’), that describes the mitigation activities to be carried out with assistance provided under this 

section, is consistent with the criteria established by the ¿Director

Administrator under section 1361, and provides protection against 

flood losses to structures for which contracts for flood insurance are 

available under this title. The mitigation plan shall be consistent 

with a comprehensive strategy for mitigation activities for the area 

affected by the mitigation plan, that has been adopted by the State 

or community following a public hearing. (d) NOTIFICATION OF APPROVAL AND GRANT AWARD.— 

(1) IN GENERAL.—The ¿Director Administrator shall notify 

a State or community submitting a mitigation plan of the approval or disapproval of the plan not later than 120 days after 

submission of the plan. 

(2) NOTIFICATION OF DISAPPROVAL.—If the ¿Director Administrator does not approve a mitigation plan submitted under 

this subsection, the ¿Director Administrator shall notify, in 

writing, the State or community submitting the plan of the 

reasons for such disapproval. 

(e) ELIGIBLE MITIGATION ACTIVITIES.— 


rfrederick on DSKD9S0YB1PROD with HEARING
78 

(1) USE OF AMOUNTS.—Amounts provided under this section 

(other than under subsection (b)) may be used only for mitigation activities specified in a mitigation plan approved by the 

¿Director Administrator under subsection (d). The ¿Director

Administrator shall provide assistance under this section to 

the extent amounts are available in the National Flood Mitigation Fund pursuant to appropriation Acts, subject only to the 

absence of approvable mitigation plans. 

(2) DETERMINATION OF ELIGIBLE PLANS.—The ¿Director Administrator may approve only mitigation plans that specify 

mitigation activities that the ¿Director Administrator determines are technically feasible and cost-effective and only such 

plans that propose activities that are cost-beneficial to the National Flood Mitigation Fund. 

(3) STANDARD FOR APPROVAL.—The ¿Director Administrator 

shall approve mitigation plans meeting the requirements for 

approval under paragraph (1) that will be most cost-beneficial 

to the National Flood Mitigation Fund. The ¿Director Administrator may approve only mitigation plans that give priority 

for funding to such properties, or to such subsets of properties, 

as are in the best interest of the National Flood Insurance 

Fund. 

(4) PRIORITY FOR MITIGATION ASSISTANCE.—In providing 

grants under this subsection for mitigation activities, the ¿Director Administrator shall give first priority for funding to 

such properties, or to such subsets of such properties as the 

¿Director Administrator may establish, that the ¿Director

Administrator determines are in the best interests of the National Flood Insurance Fund and for which matching amounts 

under subsection (f) are available. 

(5) ELIGIBLE ACTIVITIES.—The ¿Director Administrator shall 

determine whether mitigation activities described in a mitigation plan submitted under subsection (d) comply with the requirements under paragraph (1). Such activities may include— 

(A) * * * 

* * * * * * * 

(C) acquisition by States and communities of properties 

(including public properties) located in areas having special flood hazards or other areas of flood risk and properties substantially damaged by flood, for public use, as 

the ¿Director Administrator determines is consistent with 

sound land management and use in such area; 

(D) minor physical mitigation efforts that do not duplicate the flood prevention activities of other Federal agencies and that lessen the frequency or severity of flooding 

and decrease predicted flood damages, which shall not include major flood control projects such as dikes, levees, 

seawalls, groins, and jetties unless the ¿Director Administrator specifically determines in approving a mitigation 

plan that such activities are the most cost-effective mitigation activities for the National Flood Mitigation Fund; 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
79 

(G) other activities that the ¿Director Administrator 

considers appropriate and specifies in regulation; and 

* * * * * * * 

(6) ELIGIBILITY OF DEMOLITION AND REBUILDING OF PROP- ERTIES.—The Administrator shall consider as an eligible activ- ity the demolition and rebuilding of properties to at least base 

flood levels or higher, if required by the Administrator or if required by any State or local ordinance, and in accordance with 

project implementation criteria established by the Administrator. 

(f) LIMITATIONS ON AMOUNT OF ASSISTANCE.— (1) * * * 

* * * * * * * 

(3) WAIVER.—The ¿Director Administrator may waive the dollar amount limitations under paragraphs (1) and (2) for any 

State or community for any 5-year period during which a major 

disaster or emergency declared by the President (pursuant to 

the Robert T. Stafford Disaster Relief and Emergency Assistance Act) as a result of flood conditions is in effect with respect 

to areas in the State or community. (g) MATCHING REQUIREMENT.— (1) IN GENERAL.—The ¿Director Administrator may not provide mitigation assistance under this section to a State or community in an amount exceeding 3 times the amount that the 

State or community certifies, as the ¿Director Administrator 

shall require, that the State or community will contribute from 

non-Federal funds to develop a mitigation plan under subsection (c) and to carry out mitigation activities under the approved mitigation plan. In no case shall any in-kind contribution by any State or community exceed one-half of the amount 

of non-Federal funds contributed by the State or community. (2) REDUCED COMMUNITY MATCH.—With respect to any 1- 

year period in which assistance is made available under this 

section, the ¿Director Administrator may adjust the contribution required under paragraph (1) by any State, and for the 

communities located in that State, to not less than 10 percent 

of the cost of the activities for each severe repetitive loss property for which grant amounts are provided if, for such year— 

(A) * * * 

(B) the ¿Director Administrator determines, after consultation with the State, that the State has taken actions 

to reduce the number of such properties. 

(3) NON-FEDERAL FUNDS.—For purposes of this subsection, 

the term ‘‘non-Federal funds’’ includes State or local agency 

funds, in-kind contributions, any salary paid to staff to carry 

out the mitigation activities of the recipient, the value of the 

time and services contributed by volunteers to carry out such 

activities (at a rate determined by the ¿Director Administrator), and the value of any donated material or building and 

the value of any lease on a building. 

(h) OVERSIGHT OF MITIGATION PLANS.—The ¿Director Administrator shall conduct oversight of recipients of mitigation assistance 

under this section to ensure that the assistance is used in compliance with the approved mitigation plans of the recipients and that 


rfrederick on DSKD9S0YB1PROD with HEARING
80 

matching funds certified under subsection (g) are used in accordance with such certification. 

(i) RECAPTURE.— (1) NONCOMPLIANCE WITH PLAN.—If the ¿Director Administrator determines that a State or community that has received 

mitigation assistance under this section has not carried out the 

mitigation activities as set forth in the mitigation plan, the 

¿Director Administrator shall recapture any unexpended 

amounts and deposit the amounts in the National Flood Mitigation Fund under section 1367. (2) FAILURE TO PROVIDE MATCHING FUNDS.—If the ¿Director

Administrator determines that a State or community that has 

received mitigation assistance under this section has not provided matching funds in the amount certified under subsection 

(g), the ¿Director Administrator shall recapture any unexpended amounts of mitigation assistance exceeding 3 times the 

amount of such matching funds actually provided and deposit 

the amounts in the National Flood Mitigation Fund under section 1367. 

(j) REPORTS.—Not later than 1 year after the date of enactment 

of the Riegle Community Development and Regulatory Improvement Act of 1994 and biennially thereafter, the ¿Director Administrator shall submit a report to the Congress describing the status 

of mitigation activities carried out with assistance provided under 

this section. 

* * * * * * * 

(m) COORDINATION WITH STATES AND COMMUNITIES.—The ¿Director Administrator shall, in consultation and coordination with 

States and communities take such actions as are appropriate to encourage and improve participation in the national flood insurance 

program of owners of properties, including owners of properties 

that are not located in areas having special flood hazards (the 100- 

year floodplain), but are located within flood prone areas. 

NATIONAL FLOOD MITIGATION FUND

SEC. 1367. (a) ESTABLISHMENT AND AVAILABILITY.—The ¿Director Administrator shall establish in the Treasury of the United 

States a fund to be known as the National Flood Mitigation Fund, 

which shall be credited with amounts described in subsection (b) 

and shall be available, to the extent provided in appropriation Acts, 

for providing assistance under section 1366. 

* * * * * * * 

(c) ADMINISTRATIVE EXPENSES.—The ¿Director Administrator 

may use not more than 5 percent of amounts made available under 

subsection (b) to cover salaries, expenses, and other administrative 

costs incurred by the ¿Director Administrator to make grants and 

provide assistance under sections 1366 and 1323. 

(d) INVESTMENT.—If the ¿Director Administrator determines 

that the amounts in the National Flood Mitigation Fund are in excess of amounts needed under subsection (a), the ¿Director Administrator may invest any excess amounts the ¿Director Administrator determines advisable in interest-bearing obligations issued 

or guaranteed by the United States. 


rfrederick on DSKD9S0YB1PROD with HEARING
81 

(e) REPORT.—The ¿Director Administrator shall submit a report 

to the Congress not later than the expiration of the 1-year period 

beginning on the date of enactment of this Act and not less than 

once during each successive 2-year period thereafter. The report 

shall describe the status of the Fund and any activities carried out 

with amounts from the Fund. 

CHAPTER IV—APPROPRIATIONS AND MISCELLANEOUS 

PROVISIONS 

DEFINITIONS

SEC. 1370. (a) As used in this title— 

(1) the term ‘‘flood’’ shall have such meaning as may be prescribed in regulations of the ¿Director Administrator, and 

may include inundation from rising waters or from the overflow of streams, rivers, or other bodies of water, or from tidal 

surges, abnormally high tidal water, tidal waves, tsunamis, 

hurricanes, or other severe storms or deluge; 

* * * * * * * 

(3) the terms ‘‘insurance company’’, ‘‘other insurer’’ and ‘‘insurance agent or broker’’ include any organizations and persons authorized to engage in the insurance business under the 

laws of any State, is subject to the reporting requirements of the 

Securities Exchange Act of 1934, pursuant to section 13(a) or 

15(d) of such Act (15 U.S.C. 78m(a), 78o(d)), or is authorized 

by the Administrator to assume reinsurance on risks insured by 

the flood insurance program; 

* * * * * * * 

(6) the term ‘‘¿Director Administrator’’ means the ¿Director Administrator of the Federal Emergency Management 

Agency; 

* * * * * * * 

(15) the term ‘‘substantially damaged structure’’ means a 

structure covered by a contract for flood insurance that has incurred damage for which the cost of repair exceeds an amount 

specified in any regulation promulgated by the ¿Director Administrator, or by a community ordinance, whichever is lower. 

(b) The term ‘‘flood’’ shall also include inundation from mudslides 

which are proximately caused by accumulations of water on or 

under the ground; and all of the provisions of this title shall apply 

with respect to such mudslides in the same manner and to the 

same extent as with respect to floods described in subsection (a)(1), 

subject to and in accordance with such regulations, modifying the 

provisions of this title (including the provisions relating to land 

management and use) to the extent necessary to insure that they 

can be effectively so applied, as the ¿Director Administrator may 

prescribe to achieve (with respect to such mudslides) the purposes 

of this title and the objectives of the program. 

(c) The term ‘‘flood’’ shall also include the collapse or subsidence 

of land along the shore of a lake or other body of water as a result 

of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels, and all of the provisions of this 

title shall apply with respect to such collapse or subsidence in the 


rfrederick on DSKD9S0YB1PROD with HEARING
82 

same manner and to the same extent as with respect to floods described in subsection (a)(1), subject to and in accordance with such 

regulations, modifying the provisions of this title (including the 

provisions relating to land management and use) to the extent necessary to insure that they can be effectively so applied, as the

¿Director Administrator may prescribe to achieve (with respect to 

such collapse or subsidence) the purposes of this title and the objectives of the program. 

STUDIES OF OTHER NATURAL DISASTERS

SEC. 1371. (a) The ¿Director Administrator is authorized to undertake such studies as may be necessary for the purpose of determining the extent to which insurance protection against earthquakes or any other natural disaster perils, other than flood, is not 

available from public or private sources, and the feasibility of such 

insurance protection being made available. 

(b) Studies under this section shall be carried out, to the maximum extent practicable, with the cooperation of other Federal departments and agencies and State and local agencies, and the ¿Director Administrator is authorized to consult with, receive information from, and enter into any necessary agreements or other arrangements with such other Federal departments and agencies (on 

a reimbursement basis) and such State and local agencies. 

PAYMENTS

SEC. 1372. Any payments under this title may be made (after 

necessary adjustment on account of previously made underpayments or overpayments) in advance or by way of reimbursement, 

and in such installments and on such conditions, as the ¿Director

Administrator may determine. 

* * * * * * * 

EFFECTIVE DATE

SEC. 1377. This title shall take effect one hundred and twenty 

days following the date of its enactment, except that the ¿Director

Administrator on the basis of a finding that conditions exist necessitating the prescribing of an additional period, may prescribe a 

later effective date which in no event shall be more than one hundred and eighty days following such date of enactment. 

FLOOD DISASTER PROTECTION ACT OF 1973 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That this Act may 

be cited as the ‘‘Flood Disaster Protection Act of 1973’’. 

DEFINITIONS

SEC. 3. (a) As used in this Act, unless the context otherwise requires, the term— 

(1) * * * 

* * * * * * * 


rfrederick on DSKD9S0YB1PROD with HEARING
83 

(6) ‘‘¿Director Administrator’’ means the ¿Director Administrator of the Federal Emergency Management Agency; 

* * * * * * * 

(b) The ¿Director Administrator is authorized to define or redefine, by rules and regulations, any scientific or technical term used 

in this Act, insofar as such definition is not inconsistent with the 

purposes of this Act. 

TITLE I—EXPANSION OF NATIONAL FLOOD INSURANCE 

PROGRAM 

* * * * * * * 

FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS AND

ESCROW ACCOUNTS

SEC. 102. (a) After the expiration of sixty days following the date 

of enactment of this Act, no Federal officer or agency shall approve 

any financial assistance for acquisition or construction purposes for 

use in any area that has been identified by the ¿Director Administrator as an area having special flood hazards and in which the 

sale of flood insurance has been made available under the National 

Flood Insurance Act of 1968, unless the building or mobile home 

and any personal property to which such financial assistance relates is covered by flood insurance in an amount at least equal to 

its development or project cost (less estimated land cost) or to the 

maximum limit of coverage made available with respect to the particular type of property under the National Flood Insurance Act of 

1968, whichever is less: Provided, That if the financial assistance 

provided is in the form of a loan or an insurance or guaranty of 

a loan, the amount of flood insurance required need not exceed the 

outstanding principal balance of the loan and need not be required 

beyond the term of the loan. The requirement of maintaining flood 

insurance shall apply during the life of the property, regardless of 

transfer of ownership of such property. 

(b) REQUIREMENT FOR MORTGAGE LOANS.— 

(1) REGULATED LENDING INSTITUTIONS.—Each Federal entity 

for lending regulation (after consultation and coordination with 

the Financial Institutions Examination Council established 

under the Federal Financial Institutions Examination Council 

Act of 1974) shall by regulation direct regulated ¿lending institutions not to make lending institutions— 

(A) not to make , increase, extend, or renew any loan secured by improved real estate or a mobile home located or 

to be located in an area that has been identified by the 

¿Director Administrator as an area having special flood 

hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968, unless the building or mobile home and any personal property securing such loan is covered for the term of the loan 

by flood insurance in an amount at least equal to the outstanding principal balance of the loan or the maximum 

limit of coverage made available under the Act with respect to the particular type of property, whichever is 

less¿. ; and 


rfrederick on DSKD9S0YB1PROD with HEARING
84 

(B) to accept private flood insurance as satisfaction of the 

flood insurance coverage requirement under subparagraph 

(A) if the coverage provided by such private flood insurance 

meets the requirements for coverage under such subparagraph. (2) FEDERAL AGENCY LENDERS.—A Federal agency lender 

may not make, increase, extend, or renew any loan secured by 

improved real estate or a mobile home located or to be located 

in an area that has been identified by the ¿Director Administrator as an area having special flood hazards and in which 

flood insurance has been made available under the National 

Flood Insurance Act of 1968, unless the building or mobile 

home and any personal property securing such loan is covered 

for the term of the loan by flood insurance in the amount provided in paragraph (1). Each Federal agency lender shall accept 

private flood insurance as satisfaction of the flood insurance 

coverage requirement under the preceding sentence if the flood 

insurance coverage provided by such private flood insurance 

meets the requirements for coverage under such sentence. Each 

Federal agency lender shall issue any regulations necessary to 

carry out this paragraph. Such regulations shall be consistent 

with and substantially identical to the regulations issued 

under paragraph (1). (3) GOVERNMENT-SPONSORED ENTERPRISES FOR HOUSING.— 

The Federal National Mortgage Association and the Federal 

Home Loan Mortgage Corporation shall implement procedures 

reasonably designed to ensure that, for any loan that is— 

(A) secured by improved real estate or a mobile home located in an area that has been identified, at the time of 

the origination of the loan or at any time during the term 

of the loan, by the ¿Director Administrator as an area 

having special flood hazards and in which flood insurance 

is available under the National Flood Insurance Act of 

1968, and 

* * * * * * * 

the building or mobile home and any personal property securing the loan is covered for the term of the loan by flood insurance in the amount provided in paragraph (1). The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall accept private flood insurance as satisfaction of the flood insurance coverage requirement under the 

preceding sentence if the flood insurance coverage provided by 

such private flood insurance meets the requirements for coverage under such sentence. 

* * * * * * * 

(5) PRIVATE FLOOD INSURANCE DEFINED.—In this subsection, 

the term ‘‘private flood insurance’’ means a contract for flood insurance coverage allowed for sale under the laws of any State. 

(c) EXCEPTIONS TO PURCHASE REQUIREMENTS.— 

(1) STATE-OWNED PROPERTY.—Notwithstanding the other provisions of this section, flood insurance shall not be required on 

any State-owned property that is covered under an adequate 

State policy of self-insurance satisfactory to the ¿Director Administrator. The ¿Director Administrator shall publish and 


rfrederick on DSKD9S0YB1PROD with HEARING
85 

periodically revise the list of States to which this subsection 

applies. 

* * * * * * * 

(d) ESCROW OF FLOOD INSURANCE PAYMENTS.— 

(1) REGULATED LENDING INSTITUTIONS.—Each Federal entity 

for lending regulation (after consultation and coordination with 

the Financial Institutions Examination Council) shall by regulation require that, if a regulated lending institution requires 

the escrowing of taxes, insurance premiums, fees, or any other 

charges for a loan secured by residential improved real estate 

or a mobile home, then all premiums and fees for flood insurance under the National Flood Insurance Act of 1968 for the 

real estate or mobile home shall be paid to the regulated lending institution or other servicer for the loan in a manner sufficient to make payments as due for the duration of the loan. 

Upon receipt of the premiums, the regulated lending institution or servicer of the loan shall deposit the premiums in an 

escrow account on behalf of the borrower. Upon receipt of a notice from the ¿Director Administrator or the provider of the 

insurance that insurance premiums are due, the regulated 

lending institution or servicer shall pay from the escrow account to the provider of the insurance the amount of insurance 

premiums owed. 

* * * * * * * 

(e) PLACEMENT OF FLOOD INSURANCE BY LENDER.— 

(1) NOTIFICATION TO BORROWER OF LACK OF COVERAGE.—If, 

at the time of origination or at any time during the term of a 

loan secured by improved real estate or by a mobile home located in an area that has been identified by the ¿Director Administrator (at the time of the origination of the loan or at any 

time during the term of the loan) as an area having special 

flood hazards and in which flood insurance is available under 

the National Flood Insurance Act of 1968, the lender or 

servicer for the loan determines that the building or mobile 

home and any personal property securing the loan is not covered by flood insurance or is covered by such insurance in an 

amount less than the amount required for the property pursuant to paragraph (1), (2), or (3) of subsection (b), the lender or 

servicer shall notify the borrower under the loan that the borrower should obtain, at the borrower’s expense, an amount of 

flood insurance for the building or mobile home and such personal property that is not less than the amount under subsection (b)(1), for the term of the loan. 

(2) PURCHASE OF COVERAGE ON BEHALF OF BORROWER.—If 

the borrower fails to purchase such flood insurance within 45 

days after notification under paragraph (1), the lender or 

servicer for the loan shall purchase the insurance on behalf of 

the borrower and may charge the borrower for the cost of premiums and fees incurred by the lender or servicer for the loan 

in purchasing the ¿insurance. insurance, including premiums 

or fees incurred for coverage beginning on the date on which 

flood insurance coverage lapsed or did not provide a sufficient 

coverage amount. 


rfrederick on DSKD9S0YB1PROD with HEARING
86 

(3) TERMINATION OF FORCE-PLACED INSURANCE.—Within 30 

days of receipt by the lender or servicer of a confirmation of a 

borrower’s existing flood insurance coverage, the lender or 

servicer shall— 

(A) terminate the force-placed insurance; and 

(B) refund to the borrower all force-placed insurance premiums paid by the borrower during any period during 

which the borrower’s flood insurance coverage and the 

force-placed flood insurance coverage were each in effect, 

and any related fees charged to the borrower with respect 

to the force-placed insurance during such period. 

(4) SUFFICIENCY OF DEMONSTRATION.—For purposes of confirming a borrower’s existing flood insurance coverage, a lender 

or servicer for a loan shall accept from the borrower an insurance policy declarations page that includes the existing flood insurance policy number and the identity of, and contact information for, the insurance company or agent. 

¿(3) (5) REVIEW OF DETERMINATION REGARDING REQUIRED

PURCHASE.— 

(A) IN GENERAL.—The borrower and lender for a loan secured by improved real estate or a mobile home may jointly request the ¿Director Administrator to review a determination of whether the building or mobile home is located 

in an area having special flood hazards. Such request shall 

be supported by technical information relating to the improved real estate or mobile home. Not later than 45 days 

after the ¿Director Administrator receives the request, 

the ¿Director Administrator shall review the determination and provide to the borrower and the lender with a letter stating whether or not the building or mobile home is 

in an area having special flood hazards. The determination 

of the ¿Director Administrator shall be final. 

(B) EFFECT OF DETERMINATION.—Any person to whom a 

borrower provides a letter issued by the ¿Director Administrator pursuant to subparagraph (A), stating that the 

building or mobile home securing the loan of the borrower 

is not in an area having special flood hazards, shall have 

no obligation under this title to require the purchase of 

flood insurance for such building or mobile home during 

the period determined by the ¿Director Administrator, 

which shall be specified in the letter and shall begin on 

the date on which such letter is provided. 

(C) EFFECT OF FAILURE TO RESPOND.—If a request under 

subparagraph (A) is made in connection with the origination of a loan and the ¿Director Administrator fails to 

provide a letter under subparagraph (A) before the later of 

(i) the expiration of the 45-day period under such subparagraph, or (ii) the closing of the loan, no person shall have 

an obligation under this title to require the purchase of 

flood insurance for the building or mobile home securing 

the loan until such letter is provided. 

¿(4) (6) APPLICABILITY.—This subsection shall apply to all 

loans outstanding on or after the date of enactment of the RieVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00086 Fmt 6659 Sfmt 6601 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
87 

gle Community Development and Regulatory Improvement Act 

of 1994. 

* * * * * * * 

(h) FEE FOR DETERMINING LOCATION.—Notwithstanding any other Federal or State law, any person who makes a loan secured 

by improved real estate or a mobile home or any servicer for such 

a loan may charge a reasonable fee for the costs of determining 

whether the building or mobile home securing the loan is located 

in an area having special flood hazards, but only in accordance 

with the following requirements: (1) BORROWER FEE.—The borrower under such a loan may be 

charged the fee, but only if the determination— (A) * * * 

(B) is made pursuant to a revision or updating under section 1360(f) of the floodplain areas and flood-risk zones 

or publication of a notice or compendia under subsection 

(h) or (i) of section 1360 that affects the area in which the 

improved real estate or mobile home securing the loan is 

located or that, in the determination of the ¿Director Administrator, may reasonably be considered to require a determination under this subsection; or 

* * * * * * * 

(i) AUTHORITY TO TEMPORARILY SUSPEND MANDATORY PURCHASE

REQUIREMENT.— (1) FINDING BY ADMINISTRATOR THAT AREA IS AN ELIGIBLE

AREA.—For any area, upon a request submitted to the Administrator by a local government authority having jurisdiction over 

any portion of the area, the Administrator shall make a finding 

of whether the area is an eligible area under paragraph (3). If 

the Administrator finds that such area is an eligible area, the 

Administrator shall, in the discretion of the Administrator, designate a period during which such finding shall be effective, 

which shall not be longer in duration than 12 months. 

(2) SUSPENSION OF MANDATORY PURCHASE REQUIREMENT.—If 

the Administrator makes a finding under paragraph (1) that an 

area is an eligible area under paragraph (3), during the period 

specified in the finding, the designation of such eligible area as 

an area having special flood hazards shall not be effective for 

purposes of subsection (a), (b), and (e) of this section, and section 202(a) of this Act. Nothing in this paragraph may be construed to prevent any lender, servicer, regulated lending institution, Federal agency lender, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, at 

the discretion of such entity, from requiring the purchase of 

flood insurance coverage in connection with the making, increasing, extending, or renewing of a loan secured by improved 

real estate or a mobile home located or to be located in such eligible area during such period or a lender or servicer from purchasing coverage on behalf of a borrower pursuant to subsection 

(e). 

(3) ELIGIBLE AREAS.—An eligible area under this paragraph 

is an area that is designated or will, pursuant to any issuance, 

revision, updating, or other change in flood insurance maps 

that takes effect on or after the date of the enactment of the 


rfrederick on DSKD9S0YB1PROD with HEARING
88 

Flood Insurance Reform Act of 2011, become designated as an 

area having special flood hazards and that meets any one of the 

following 3 requirements: 

(A) AREAS WITH NO HISTORY OF SPECIAL FLOOD HAZARDS.—The area does not include any area that has ever 

previously been designated as an area having special flood 

hazards. 

(B) AREAS WITH FLOOD PROTECTION SYSTEMS UNDER IMPROVEMENTS.—The area was intended to be protected by a 

flood protection system— 

(i) that has been decertified, or is required to be certified, as providing protection for the 100-year frequency flood standard; 

(ii) that is being improved, constructed, or reconstructed; and 

(iii) for which the Administrator has determined 

measurable progress toward completion of such improvement, construction, reconstruction is being made 

and toward securing financial commitments sufficient 

to fund such completion. 

(C) AREAS FOR WHICH APPEAL HAS BEEN FILED.—An area 

for which a community has appealed— 

(i) designation of the area as having special flood 

hazards in a timely manner under section 1363; or 

(ii) any decertification or deaccreditation of a dam, 

levee, or other flood protection system or the level of 

protection afforded by a dam, levee, or system. 

(4) EXTENSION OF DELAY.—Upon a request submitted by a 

local government authority having jurisdiction over any portion 

of the eligible area, the Administrator may extend the period 

during which a finding under paragraph (1) shall be effective, 

except that— 

(A) each such extension under this paragraph shall not 

be for a period exceeding 12 months; and 

(B) for any area, the cumulative number of such extensions may not exceed 2. 

(5) RULE OF CONSTRUCTION.—Nothing in this subsection may 

be construed to affect the applicability of a designation of any 

area as an area having special flood hazards for purposes of the 

availability of flood insurance coverage, criteria for land management and use, notification of flood hazards, eligibility for 

mitigation assistance, or any other purpose or provision not specifically referred to in paragraph (2). 

(6) REPORTS.—The Administrator shall, in each annual report submitted pursuant to section 1320, include information 

identifying each finding under paragraph (1) by the Administrator during the preceding year that an area is an area having 

special flood hazards, the basis for each such finding, any extensions pursuant to paragraph (4) of the periods of effectiveness of such findings, and the reasons for such extensions. 


rfrederick on DSKD9S0YB1PROD with HEARING
89 

TITLE II—DISASTER MITIGATION REQUIREMENTS 

NOTIFICATION TO FLOOD-PRONE AREAS

SEC. 201. (a) Not later than six months following the enactment 

of this title, the ¿Director Administrator shall publish information 

in accordance with subsection 1360(1) of the National Flood Insurance Act of 1968, and shall notify the chief executive officer of each 

known flood-prone community not already participating in the national flood insurance program of its tentative identification as a 

community containing one or more areas having special flood hazards. 

(b) After such notification, each tentatively identified community 

shall either (1) promptly make proper application to participate in 

the national flood insurance program or (2) within six months submit technical data sufficient to establish to the satisfaction of the 

¿Director Administrator that the community either is not seriously flood prone or that such flood hazards as may have existed 

have been corrected by floodworks or other flood control methods. 

The ¿Director Administrator may, in his discretion, grant a public 

hearing to any community with respect to which conflicting data 

exist as to the nature and extent of a flood hazard. If the ¿Director Administrator decides not to hold a hearing, the community 

shall be given an opportunity to submit written and documentary 

evidence. Whether or not such hearing is granted, the ¿Director’s

Administrator’s final determination as to the existence or extent of 

a flood hazard area in a particular community shall be deemed conclusive for the purposes of this Act if supported by substantial evidence in the record considered as a whole. 

(c) As information becomes available to the ¿Director Administrator, concerning the existence of flood hazards in communities not 

known to be flood prone at the time of the initial notification provided for by subsection (a) of this section he shall provide similar 

notifications to the chief executive officers of such additional communities, which shall then be subject to the requirements of subsection (b) of this section. 

* * * * * * * 

(e) The ¿Director Administrator is authorized to establish administrative procedures whereby the identification under this section of one or more areas in the community as having special flood 

hazards may be appealed to the ¿Director Administrator by the 

community or any owner or lessee of real property within the community who believes his property has been inadvertently included 

in a special flood hazard area by the identification. When, incident 

to any appeal under this subsection, the owner or lessee of real 

property or the community, as the case may be, incurs expense in 

connection with the services of surveyors, engineers, or similar 

services, but not including legal services, in the effecting of an appeal which is successful in whole or part, the ¿Director Administrator shall reimburse such individual or community to an extent 

measured by the ratio of the successful portion of the appeal as 

compared to the entire appeal and applying such ratio to the reasonable value of all such services, but no reimbursement shall be 

made by the ¿Director Administrator in respect to any fee or expense payment, the payment of which was agreed to be contingent 


rfrederick on DSKD9S0YB1PROD with HEARING
90 

upon the result of the appeal. There is authorized to be appropriated for purposes of implementing this subsection not to exceed 

$250,000. 

(f) ANNUAL NOTIFICATION.—The Administrator, in consultation 

with affected communities, shall establish and carry out a plan to 

notify residents of areas having special flood hazards, on an annual 

basis— 

(1) that they reside in such an area; 

(2) of the geographical boundaries of such area; 

(3) of whether section 1308(h) of the National Flood Insurance Act of 1968 applies to properties within such area; (4) of the provisions of section 102 requiring purchase of flood insurance coverage for properties located in such an area, including the date on which such provisions apply with respect to 

such area, taking into consideration section 102(i); and 

(5) of a general estimate of what similar homeowners in similar areas typically pay for flood insurance coverage, taking into 

consideration section 1308(g) of the National Flood Insurance 

Act of 1968. 

EFFECT OF NONPARTICIPATION IN FLOOD INSURANCE PROGRAM

SEC. 202. (a) No Federal officer or agency shall approve any financial assistance for acquisition or construction purposes on and 

after July 1, 1975, for use in any area that has been identified by 

the ¿Director Administrator as an area having special flood hazards unless the community in which such area is situated is then 

participating in the national flood insurance program. 

* * * * * * * 

AUTHORITY TO ISSUE REGULATIONS

SEC. 205. (a) The ¿Director Administrator is authorized to issue 

such regulations as may be necessary to carry out the purpose of 

this Act. 

(b) The head of each Federal agency that administers a program 

of financial assistance relating to the acquisition, construction, reconstruction, repair, or improvement of publicly or privately owned 

land or facilities, and each Federal instrumentality responsible for 

the supervision, approval, regulation, or insuring of banks, savings 

and loan associations, or similar institutions, shall, in cooperation 

with the ¿Director Administrator, issue appropriate rules and regulations to govern the carrying out of the agency’s responsibilities 

under this Act. 

CONSULTATION WITH LOCAL OFFICIALS

SEC. 206. In carrying out his responsibilities under the provisions 

of this title and the National Flood Insurance Act of 1968 which 

relate to notification to and identification of flood-prone areas and 

the application of criteria for land management and use, including 

criteria derived from data reflecting new developments that may 

indicate the desirability of modifying elevations based on previous 

flood studies, the ¿Director Administrator shall establish procedures assuring adequate consultation with the appropriate elected 

officials of general purpose local governments, including but not 

limited to those local governments whose prior eligibility under the 


rfrederick on DSKD9S0YB1PROD with HEARING
91 

program has been suspended. Such consultations shall include, but 

not be limited to, fully informing local officials at the commencement of any flood elevation study or investigation undertaken by 

any agency on behalf of the ¿Director Administrator concerning 

the nature and purpose of the study, the areas involved, the manner in which the study is to be undertaken, the general principles 

to be applied, and the use to be made of the data obtained. The 

¿Director Administrator shall encourage local officials to disseminate information concerning such study widely within the community, so that interested persons will have an opportunity to bring 

all relevant facts and technical data concerning the local flood hazard to the attention of the agency during the course of the study. 

* * * * * * * 

REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 

* * * * * * * 

SPECIAL INFORMATION BOOKLETS

SEC. 5. (a) * * * 

* * * * * * * 

(c) Each lender shall include with the booklet a good faith estimate of the amount or range of charges for specific settlement services the borrower is likely to incur in connection with the settlement as prescribed by the Secretary. Each such good faith estimate 

shall include the following conspicuous statements and information: 

(1) 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 the national flood insurance program; (2) a 

telephone number and a location on the Internet by which a home 

owner or purchaser can contact the national flood insurance program; and (3) that the escrowing of flood insurance payments is required for many loans under section 102(d) of the Flood Disaster 

Protection Act of 1973, and may be a convenient and available option with respect to other loans. 

* * * * * * * 

HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974 

TITLE I—COMMUNITY DEVELOPMENT 

* * * * * * * 

ELIGIBLE ACTIVITIES

SEC. 105. (a) Activities assisted under this title may include 

only— 

(1) * * * 

* * * * * * * 

(24) the construction or improvement of tornado-safe shelters 

for residents of manufactured housing, and the provision of asVerDate Mar 15 2010 01:42 Jun 11, 2011 Jkt 099006 PO 00000 Frm 00091 Fmt 6659 Sfmt 6602 E:\HR\OC\HR102.XXX HR102

rfrederick on DSKD9S0YB1PROD with HEARING
92 

sistance (including loans and grants) to nonprofit and for-profit 

entities (including owners of manufactured housing parks) for 

such construction or improvement, except that— (A) * * * 

* * * * * * * 

(D) amounts may not be used for a shelter as provided under this paragraph unless there is located, within the 

neighborhood in which the shelter is located (or, in the 

case of a shelter located in a manufactured housing park, 

within 1,500 feet of such park), a warning siren that is operated in accordance with such local, regional, or national 

disaster warning programs or systems as the Secretary, 

after consultation with the Director of the Federal Emergency Management Agency, considers appropriate to ensure adequate notice of occupants of manufactured housing 

located in such neighborhood or park of a tornado; ¿and

(25) lead-based paint hazard evaluation and reduction, as defined in section 1004 of the Residential Lead-Based Paint Hazard Reduction Act of 1992¿. ; 

(26) supplementing existing State or local funding for admin- istration of building code enforcement by local building code enforcement departments, including for increasing staffing, providing staff training, increasing staff competence and professional qualifications, and supporting individual certification or 

departmental accreditation, and for capital expenditures specifically dedicated to the administration of the building code enforcement department, except that, to be eligible to use amounts 

as provided in this paragraph— (A) a building code enforcement department shall provide matching, non-Federal funds to be used in conjunction with 

amounts used under this paragraph in an amount— (i) in the case of a building code enforcement depart- ment serving an area with a population of more than 

50,000, equal to not less than 50 percent of the total 

amount of any funds made available under this title 

that are used under this paragraph; (ii) in the case of a building code enforcement depart- ment serving an area with a population of between 

20,001 and 50,000, equal to not less than 25 percent of 

the total amount of any funds made available under 

this title that are used under this paragraph; and (iii) in the case of a building code enforcement de- partment serving an area with a population of less 

than 20,000, equal to not less than 12.5 percent of the 

total amount of any funds made available under this 

title that are used under this paragraph; except that the Secretary may waive the matching fund requirements under this subparagraph, in whole or in part, 

based upon the level of economic distress of the jurisdiction 

in which is located the local building code enforcement department that is using amounts for purposes under this 

paragraph, and shall waive such matching fund requirements in whole for any recipient jurisdiction that has dedicated all building code permitting fees to the conduct of 

local building code enforcement; and 


rfrederick on DSKD9S0YB1PROD with HEARING
93 

(B) any building code enforcement department using 

funds made available under this title for purposes under 

this paragraph shall empanel a code administration and 

enforcement team consisting of at least 1 full-time building 

code enforcement officer, a city planner, and a health planner or similar officer; and 

(27) provision of assistance to local governmental agencies re- sponsible for floodplain management activities (including such 

agencies of Indians tribes, as such term is defined in section 4 

of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103)) in communities that participate in the national flood insurance program under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.), 

only for carrying out outreach activities to encourage and facilitate the purchase of flood insurance protection under such Act 

by owners and renters of properties in such communities and to 

promote educational activities that increase awareness of flood 

risk reduction; except that— 

(A) amounts used as provided under this paragraph 

shall be used only for activities designed to— (i) identify owners and renters of properties in communities that participate in the national flood insurance program, including owners of residential and 

commercial properties; 

(ii) notify such owners and renters when their properties become included in, or when they are excluded 

from, an area having special flood hazards and the effect of such inclusion or exclusion on the applicability 

of the mandatory flood insurance purchase requirement 

under section 102 of the Flood Disaster Protection Act 

of 1973 (42 U.S.C. 4012a) to such properties; 

(iii) educate such owners and renters regarding the 

flood risk and reduction of this risk in their community, including the continued flood risks to areas that 

are no longer subject to the flood insurance mandatory 

purchase requirement; 

(iv) educate such owners and renters regarding the 

benefits and costs of maintaining or acquiring flood insurance, including, where applicable, lower-cost preferred risk policies under this title for such properties 

and the contents of such properties; 

(v) encourage such owners and renters to maintain 

or acquire such coverage; 

(vi) notify such owners of where to obtain information regarding how to obtain such coverage, including 

a telephone number, mailing address, and Internet site 

of the Administrator of the Federal Emergency Management Agency (in this paragraph referred to as the 

‘‘Administrator’’) where such information is available; 

and 

(vii) educate local real estate agents in communities 

participating in the national flood insurance program 

regarding the program and the availability of coverage 

under the program for owners and renters of properties 

in such communities, and establish coordination and 


rfrederick on DSKD9S0YB1PROD with HEARING
94 

liaisons with such real estate agents to facilitate purchase of coverage under the National Flood Insurance 

Act of 1968 and increase awareness of flood risk reduction; 

(B) in any fiscal year, a local governmental agency may 

not use an amount under this paragraph that exceeds 3 

times the amount that the agency certifies, as the Secretary, 

in consultation with the Administrator, shall require, that 

the agency will contribute from non-Federal funds to be 

used with such amounts used under this paragraph only 

for carrying out activities described in subparagraph (A); 

and for purposes of this subparagraph, the term ‘‘non-Federal funds’’ includes State or local government agency 

amounts, in-kind contributions, any salary paid to staff to 

carry out the eligible activities of the local governmental 

agency involved, the value of the time and services contributed by volunteers to carry out such services (at a rate determined by the Secretary), and the value of any donated 

material or building and the value of any lease on a building; (C) a local governmental agency that uses amounts as 

provided under this paragraph may coordinate or contract 

with other agencies and entities having particular capacities, specialties, or experience with respect to certain populations or constituencies, including elderly or disabled families or persons, to carry out activities described in subparagraph (A) with respect to such populations or constituencies; and 

(D) each local government agency that uses amounts as 

provided under this paragraph shall submit a report to the 

Secretary and the Administrator, not later than 12 months 

after such amounts are first received, which shall include 

such information as the Secretary and the Administrator 

jointly consider appropriate to describe the activities conducted using such amounts and the effect of such activities 

on the retention or acquisition of flood insurance coverage. 

* * * * * * * 

FEDERAL FLOOD INSURANCE ACT OF 1956 

* * * * * * * 

FUNDS AND TREASURY BORROWING

SEC. 15. * * * 

(e) The ¿Director Administrator of the Federal Emergency Management Agency is authorized to issue to the Secretary of the 

Treasury from time to time and have outstanding at any one time, 

in an amount not exceeding $500,000,000 (or such greater amount 

as may be approved by the President) notes or other obligations in 

such forms and denominations bearing such maturities, and subject 

to such terms and conditions as may be prescribed by the ¿Director Administrator of the Federal Emergency Management Agency, 

with the approval of the Secretary of the Treasury. Such notes or 

other obligations shall bear interest at a rate determined by the 


rfrederick on DSKD9S0YB1PROD with HEARING
95 

Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the 

United States of comparable maturities during the month preceding the issuance of such notes or other obligations. The Secretary of the Treasury is authorized and directed to purchase any 

notes and other obligations to be issued hereunder and for such 

purpose he is authorized to use as a public debt transaction the 

proceeds from the sale of any securities issued under chapter 31 of 

title 31, United States Code, and the purposes for which securities 

may be issued under such chapter are extended to include any purchases of such notes and obligations. 

The Secretary of the Treasury may at any time sell any of the 

notes or other obligations acquired by him under this section. All 

redemptions, purchases, and sales by the Secretary of the Treasury 

of such notes or other obligations shall be treated as public debt 

transactions of the United States. 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, DC, June 2, 2011. 

The Hon. SPENCER BACHUS, 

Chairman, Committee on Financial Services, 

Rayburn House Office Building, Washington, DC. 

DEAR CHAIRMAN BACHUS: I am writing to you concerning the jurisdictional interest of the Committee on Science, Space, and Technology in H.R. 1309, the Flood Insurance Reform Act of 2011. H.R. 

1309 has been marked up by the Committee on Financial Services. 

The amended version of the bill contains provisions that fall within 

the jurisdiction of the Committee on Science, Space, and Technology. 

Based on discussions that the staff of our two committees have 

had regarding this legislation and in the interest of permitting 

your Committee to proceed expeditiously to floor consideration of 

this important legislation, I am willing to waive consideration of 

this bill. However, agreeing to waive consideration of this bill 

should not be construed as waiving, reducing, or affecting the jurisdiction of the Committee on Science, Space, and Technology. 

Additionally, the Committee on Science, Space, and Technology 

expressly reserves its authority to seek conferees on any provision 

within its jurisdiction during any House-Senate conference that 

may be convened on this, or any similar legislation. I ask for your 

commitment to support any request by the Committee for conferees 

on H.R. 1309, as well as any similar or related legislation. 

I ask that a copy of this letter and your response be included in 

the report on H.R. 1309 and in the Congressional Record during 

consideration of this bill. 

I look forward to working with you as this important measure 

moves through the legislative process. 

Sincerely, 

RALPH M. HALL, 

Chairman, Committee on Science, Space, and Technology. 


rfrederick on DSKD9S0YB1PROD with HEARING
96 

HOUSE OF REPRESENTATIVES, COMMITTEE ON FINANCIAL SERVICES, Washington, DC, June 2, 2011. 

The Hon. RALPH M. HALL, 

Chairman, Committee on Science, Space, and Technology, 

Rayburn House Office Building, Washington, DC. 

DEAR CHAIRMAN HALL: Thank you for your letter regarding H.R. 

1309, the Flood Insurance Reform Act of 2011. I agree that the section requiring a study on graduated risk in this important legislation falls under the jurisdiction of both the Committee on Financial 

Services and the Committee on Science, Space, and Technology. I 

am most appreciative of your decision not to request a referral in 

the interest of expediting consideration of H.R. 1309. 

Further, I agree that by foregoing a sequential referral, the Committee on Science, Space, and Technology is not waiving its jurisdiction. I will include this exchange of letters in our Committee Report on H.R. 1309 and in the Congressional Record during consideration of this bill. 

Thank you for your attention to these matters. 

Sincerely, 

SPENCER BACHUS, 

Chairman. 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC, June 2, 2011. 

Hon. SPENCER BACHUS: 

Chairman, Committee on Financial Services 

Rayburn House Office Building, Washington, DC. 

DEAR CHAIRMAN BACHUS: I am writing concerning H.R. 1309, the 

‘‘Flood Insurance Reform Act of 2011,’’ which is scheduled for floor 

consideration soon. As a result of your having consulted with us on 

provisions in H.R. 1309 that fall within the Rule X jurisdiction of 

the Committee on the Judiciary, we are able to agree to forego action on this bill in order that it may proceed expeditiously to the 

House floor for consideration. 

The Judiciary Committee takes this action with our mutual understanding that by foregoing consideration of H.R. 1309 at this 

time, we do not waive any jurisdiction over subject matter contained in this or similar legislation, and that our Committee will 

be appropriately consulted and involved as the bill or similar legislation moves forward so that we may address any remaining issues 

in our jurisdiction. Our Committee also reserves the right to seek 

appointment of an appropriate number of conferees to any HouseSenate conference involving this or similar legislation, and requests 

your support for any such request. 

I would appreciate your response to this letter confirming this 

understanding with respect to H.R. 1309, and would ask that a 

copy of our exchange of letters on this matter be included in the 

Congressional Record during floor consideration. 

Sincerely, 

LAMAR SMITH, 

Chairman. 


rfrederick on DSKD9S0YB1PROD with HEARING
97 

HOUSE OF REPRESENTATIVES, COMMITTEE ON FINANCIAL SERVICES, Washington, DC, June 2, 2011. 

Hon. LAMAR SMITH, 

Chairman, Committee on the Judiciary, 

Rayburn House Office Building, Washington, DC. 

DEAR CHAIRMAN SMITH: Thank you for your letter regarding H.R. 

1309, the Flood Insurance Reform Act of 2011. I agree that there 

are provisions in the legislation that fall under the jurisdiction of 

the Committee on the Judiciary. I am most appreciative of your decision not to request a referral in the interest of expediting Floor 

consideration of H.R. 1309. 

Further, I agree that by foregoing a sequential referral, the Committee on Judiciary is not waiving its jurisdiction. I will include 

this exchange of letters in our Committee Report on H.R. 1309 and 

the Congressional Record during Floor consideration. 

Thank you for your attention to these matters. 

Sincerely, 

SPENCER BACHUS, 

Chairman. 

fi 


rfrederick on DSKD9S0YB1PROD with HEARING