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[House Report 112-102]
[From the U.S. Government Publishing Office]

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 phase-ins.
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.
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 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.''.
          (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 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.''.
  (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 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 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'';
                  (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)--
                          (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 effective date.--
                          (i) Increase of rates over time.--In the case 
                        of any property described 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
                          (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.
          (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.
  (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 conducts 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
                  (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 semicolon 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 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''; 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.''.

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.''.

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, 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 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 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 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 
        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 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 community-based 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;
          (3) the effectiveness of such a building code requirement in 
        reducing flood-related 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 materials and systems for flood-resistant 
        construction;
          (6) the feasibility and effectiveness of providing an 
        incentive in lower premium 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 direct annualized flood losses behind levees for 
        residential and commercial structures;
          (2) rank such practices based on their best value, balancing 
        cost, scientific integrity, 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 recommend 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 creative 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 
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 
coverage 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 
Management 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 
reform 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 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 
pre-FIRM 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. Pre-FIRM 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 percent 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 encourage 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 
Opportunity 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
           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. Velazquez......       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           X   ........  ........
                                                                 (GA).
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   ........  ........
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. Velazquez........  ......       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).

                                              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. Velazquez........  ......       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 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 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 
one-time 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 program, 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 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.

   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 
prepared 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 
Insurance 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 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 
budgetary 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
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 
legislation 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 pre-FIRM 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.
---------------------------------------------------------------------------
    \1\See Congressional Budget Office, The National Flood Insurance 
Program: Factors Affecting Actuarial Soundness (November 2009).
---------------------------------------------------------------------------
    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 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-than-average-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.
---------------------------------------------------------------------------
    \2\Actuarial-level losses take into account the full range of 
possible losses, including rare catastrophic events like Hurricane 
Katrina.
---------------------------------------------------------------------------

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.
    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 located 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 contents policies; and
           Introducing new lines of insurance for 
        additional living expense 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             222          936        5,364
     Pre-FIRMs...................
    Temporary Discounted Premiums          -38          -84         -180
                                  --------------------------------------
        Total Changes to Revenues          184          852        5,184
Expenses:
    Increased Payments to WYO               56          259        1,584
     Companies...................
    Reduced Claims Due to Dropped          -37         -125         -564
     Policies....................
                                  --------------------------------------
        Total Changes to Expenses           19          134        1,020
Change in Net Income\a\..........          165          718        4,164
Cumulative Net Effect on Direct           -165            0           0
 Spending........................
------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 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 pre-
FIRM 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 
full-risk premium.
---------------------------------------------------------------------------
    \4\The 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.
---------------------------------------------------------------------------
    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 2\1/4\ 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 following 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.
---------------------------------------------------------------------------
    \5\For 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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \6\Section 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.
---------------------------------------------------------------------------
    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 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 projected 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.

          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
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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 
good-faith 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.

                       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 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 ``force-placed'' 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 limited 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 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 flood-damaged 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.

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.

Section 22. Technical corrections

    This section contains a technical correction to the 
underlying National 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 flood-
resistant 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 residential 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''.

           *       *       *       *       *       *       *

            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) * * *

           *       *       *       *       *       *       *

  (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 
subsection (a), such regulations shall provide that--
          (1) any flood insurance coverage based on chargeable 
        premium 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 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 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.

                       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 [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 Federal 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) * * *

           *       *       *       *       *       *       *

  (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 applicable 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 river-facing 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.
  (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).
          (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 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.

                               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 [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 
authorized 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 actions 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.

           *       *       *       *       *       *       *

                     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) * * *

           *       *       *       *       *       *       *

                   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 flood-proofed 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.
          (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 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 established 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--
          (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.

                  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.

          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 
Management 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 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 appropriate 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 responsibilities 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 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 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.

   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 Interior, 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 
Engineers), 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 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 
Register (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 
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.
  (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.

                  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) * * *
          (2) Multifamily properties.--In the case of a 
        property consisting 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 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 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 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 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 
                estimated 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 
        damage.--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 exceeding 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. Within 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 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.
          (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 thereof 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 account 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 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.

           *       *       *       *       *       *       *

  (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 transaction 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 
        National 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 section 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.--
          (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;

           *       *       *       *       *       *       *

                  (G) other activities that the [Director] 
                Administrator considers appropriate and 
                specifies in regulation; and

           *       *       *       *       *       *       *

          (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.
  (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 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.
  (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 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) * * *

           *       *       *       *       *       *       *

          (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
                  (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 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.
          (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 Riegle 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 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.

               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 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 
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 assistance (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 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, 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 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 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 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 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 
                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 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.
                                ------                                

                          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 House-Senate 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.
                                ------                                

                          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.

                                  
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