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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3191 Reported in House (RH)]

                                                 Union Calendar No. 232

103d CONGRESS

  2d Session

                               H. R. 3191

                          [Report No. 103-414]

_______________________________________________________________________

                                 A BILL

 To revise the national flood insurance program to promote compliance 
with requirements for mandatory purchase of flood insurance, to provide 
  assistance for mitigation activities designed to reduce damages to 
 structures subject to flooding and shoreline erosion, and to increase 
the maximum coverage amounts under the program, and for other purposes.

_______________________________________________________________________

                            January 26, 1994

  Reported with an amendment, committed to the Committee of the Whole 
      House on the State of the Union, and ordered to be printed.

                                                 Union Calendar No. 232
103d CONGRESS
  2d Session
                                H. R. 3191

                          [Report No. 103-414]

 To revise the national flood insurance program to promote compliance 
with requirements for mandatory purchase of flood insurance, to provide 
  assistance for mitigation activities designed to reduce damages to 
 structures subject to flooding and shoreline erosion, and to increase 
the maximum coverage amounts under the program, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 30, 1993

  Mr. Kennedy (for himself and Mr. Deutsch) introduced the following 
bill; which was referred to the Committee on Banking, Finance and Urban 
                                Affairs

                            January 26, 1994

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
    [For text of introduced bill, see copy of bill as introduced on 
                          September 30, 1993]

_______________________________________________________________________

                                 A BILL

 
 To revise the national flood insurance program to promote compliance 
with requirements for mandatory purchase of flood insurance, to provide 
  assistance for mitigation activities designed to reduce damages to 
 structures subject to flooding and shoreline erosion, and to increase 
the maximum coverage amounts under the program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``National Flood 
Insurance Reform Act of 1994''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Declaration of purpose under the National Flood Insurance Act 
                            of 1968.

                          TITLE I--DEFINITIONS

Sec. 101. Flood Disaster Protection Act of 1973.
Sec. 102. National Flood Insurance Act of 1968.

            TITLE II--COMPLIANCE AND INCREASED PARTICIPATION

Sec. 201. Existing flood insurance purchase requirements.
Sec. 202. Expanded flood insurance purchase requirements.
Sec. 203. Escrow of flood insurance payments.
Sec. 204. Placement of flood insurance by lenders.
Sec. 205. Penalties for failure to require flood insurance or notify.
Sec. 206. Ongoing compliance with flood insurance purchase 
                            requirements.
Sec. 207. Fees for determining applicability of flood insurance 
                            purchase requirements.
Sec. 208. Notice requirements.
Sec. 209. Standard hazard determination forms.
Sec. 210. Examinations regarding compliance.
Sec. 211. Financial Institutions Examination Council.
Sec. 212. Clerical amendments.

 TITLE III--RATINGS AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT 
                                PROGRAMS

Sec. 301. Community rating system and incentives for community 
                            floodplain management.
Sec. 302. Funding.

            TITLE IV--MITIGATION OF FLOOD AND EROSION RISKS

Sec. 401. Repeal of flooded property purchase and loan program.
Sec. 402. Termination of erosion-threatened structures program.
Sec. 403. Mitigation assistance responsibilities in Federal Insurance 
                            Administration.
Sec. 404. State and community mitigation assistance program.
Sec. 405. Establishment of National Flood and Erosion Mitigation Fund.
Sec. 406. Insurance premium mitigation surcharge and erosion hazard 
                            zone surcharge.
Sec. 407. Limitations on new flood insurance coverage in erosion hazard 
                            areas.
Sec. 408. Study of mitigation insurance.
Sec. 409. Riverine erosion study.
Sec. 410. Coordination with coastal zone management programs.

                  TITLE V--FLOOD INSURANCE TASK FORCE

Sec. 501. Flood Insurance Interagency Task Force.

                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Limitation on premium and surcharge increases.
Sec. 602. Maximum flood insurance coverage amounts.
Sec. 603. Flood insurance program arrangements with private insurance 
                            entities.
Sec. 604. Updating of flood maps and assessment and mapping of erosion 
                            hazard zones.
Sec. 605. Study of economic effects of charging actuarially-based 
                            premium rates for pre-FIRM structures.
Sec. 606. National Flood Insurance Fund.
Sec. 607. Effective dates of policies.
Sec. 608. Regulations.
Sec. 609. Relation to State and local laws.

SEC. 2. DECLARATION OF PURPOSE UNDER THE NATIONAL FLOOD INSURANCE ACT 
              OF 1968.

    Section 1302(e) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4001(e)) is amended--
            (1) by redesignating clauses (3), (4), and (5), as clauses 
        (4), (5), and (6), respectively; and
            (2) by inserting after the comma at the end of clause (2) 
        the following: ``(3) encourage State and local governments to 
        protect natural and beneficial floodplain functions that reduce 
        flood-related losses,''.

                          TITLE I--DEFINITIONS

SEC. 101. FLOOD DISASTER PROTECTION ACT OF 1973.

    (a) In General.--Section 3(a) of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4003(a)) is amended--
            (1) by striking paragraph (5) and inserting the following 
        new paragraph:
            ``(5) `Federal entity for lending regulation' means the 
        Board of Governors of the Federal Reserve System, the Federal 
        Deposit Insurance Corporation, the Comptroller of the Currency, 
        the Office of Thrift Supervision, and the National Credit Union 
        Administration, and with respect to a particular regulated 
        lending institution means the entity primarily responsible for 
        the supervision, approval, or regulation of the institution;'';
            (2) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (3) by inserting after paragraph (6) the following new 
        paragraphs:
            ``(7) `Federal agency lender' means a Federal agency that 
        makes direct loans secured by improved real estate or a mobile 
        home, to the extent such agency acts in such capacity;
            ``(8) `lender' includes any regulated lending institution, 
        other lending institution, and Federal agency lender, but does 
        not include any agency engaged primarily in the purchase of 
        mortgage loans;
            ``(9) `other lending institution' means any lending 
        institution that is not subject to the supervision, approval, 
        regulation, or insuring of any Federal entity for lending 
        regulation and that is not a Federal agency lender, but does 
        not include institutions engaged primarily in the purchase of 
        mortgage loans;
            ``(10) `regulated lending institution' means any bank, 
        savings and loan association, credit union, or similar 
        institution subject to the supervision, approval, regulation, 
        or insuring of a Federal entity for lending regulation; and
            ``(11) `servicer' means the person responsible for 
        receiving any scheduled periodic payments from a borrower 
        pursuant to the terms of a loan, including amounts for taxes, 
        insurance premiums, and other charges with respect to the 
        property, and making the payments of principal and interest and 
        such other payments with respect to the amounts received from 
        the borrower as may be required pursuant to the terms of the 
        loan.''.
    (b) Conforming Amendment.--Section 202(b) of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4106(b)) is amended by striking 
``Federal instrumentality described in such section shall by regulation 
require the institutions'' and inserting ``Federal entity for lending 
regulation (with respect to regulated lending institutions), the 
Secretary of Housing and Urban Development (with respect to other 
lending institutions), and the appropriate head of each Federal agency 
lender, shall by regulation require the lenders''.

SEC. 102. NATIONAL FLOOD INSURANCE ACT OF 1968.

    (a) In General.--Section 1370(a) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4121(a)) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (3) by inserting after paragraph (6) the following new 
        paragraphs:
            ``(7) the term `erosion hazard area' means, based on 
        erosion rate information and other historical data available, 
        an area where erosion or avulsion is likely to result in damage 
        to or loss of buildings and infrastructure within a 60-year 
        period;
            ``(8) the term `readily movable structure' means a small 
        permanent structure of less than 5,000 square feet that is 
        designed, sited, and built to accomplish relocation at a 
        reasonable cost relative to other structures of the same size 
        and construction and that has access of sufficient width and 
        acceptable grade to permit such relocation;
            ``(9) the term `coastal' means relating to the coastlines 
        and bays of the tidal waters of the United States or the 
        shorelines of the Great Lakes, but does not refer to bayous, 
        riverine areas, and riverine portions of estuaries;
            ``(10) the term `Federal agency lender' means a Federal 
        agency that makes direct loans secured by improved real estate 
        or a mobile home, to the extent such agency acts in such 
        capacity;
            ``(11) the term `Federal entity for lending regulation' 
        means the Board of Governors of the Federal Reserve System, the 
        Federal Deposit Insurance Corporation, the Comptroller of the 
        Currency, the Office of Thrift Supervision, and the National 
        Credit Union Administration, and with respect to a particular 
        regulated lending institution means the entity primarily 
        responsible for the supervision, approval, or regulation of the 
        institution;
            ``(12) the term `lender' includes any regulated lending 
        institution, other lending institution, and Federal agency 
        lender, but does not include any agency engaged primarily in 
        the purchase of mortgage loans;
            ``(13) the term `natural and beneficial floodplain 
        functions' means (A) the functions associated with the natural 
        or relatively undisturbed floodplain that moderate flooding, 
        retain flood waters, reduce erosion and sedimentation, and 
        mitigate the effect of waves and storm surge from storms, and 
        (B) ancillary beneficial functions, including maintenance of 
        water quality, recharge of ground water, and provision of 
        fisheries and wildlife habitat;
            ``(14) the term `regulated lending institution' means a 
        bank, savings and loan association, credit union, or similar 
        institution subject to the supervision, approval, regulation, 
        or insuring of a Federal entity for lending regulation;
            ``(15) the term `other lending institution' means any 
        lending institution that is not subject to the supervision, 
        approval, regulation, or insuring of any Federal entity for 
        lending regulation and that is not a Federal agency lender, but 
        does not include institutions engaged primarily in the purchase 
        of mortgage loans; and
            ``(16) the term `servicer' means the person responsible for 
        receiving any scheduled periodic payments from a borrower 
        pursuant to the terms of a loan, including amounts for taxes, 
        insurance premiums, and other charges with respect to the 
        property, and making the payments of principal and interest and 
        such other payments with respect to the amounts received from 
        the borrower as may be required pursuant to the terms of the 
        loan.''.
    (b) Conforming Amendment.--Section 1322(d) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by striking 
``federally supervised, approved, regulated or insured financial 
institution'' and inserting ``regulated lending institution, other 
lending institution, or Federal agency lender''.

            TITLE II--COMPLIANCE AND INCREASED PARTICIPATION

SEC. 201. EXISTING FLOOD INSURANCE PURCHASE REQUIREMENTS.

    Section 102(a) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a(a)) is amended--
            (1) by inserting after ``(a)'' the following: ``Requirement 
        for Federal Assistance for Acquisition or Construction.--''; 
        and
            (2) by adding at the end the following new sentence: ``This 
        subsection may not be construed to permit the provision of any 
        amount of financial assistance with respect to any building or 
        mobile home and related personal property for which flood 
        insurance is required under this subsection, unless the 
        requirements under this subsection are complied with in full. 
        The prohibitions and requirements of this subsection relating 
        to financial assistance may not be waived for any purpose.''.

SEC. 202. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.

    Section 102(b) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a(b)) is amended to read as follows:
    ``(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, increase, extend, or renew, after the 
        expiration of 60 days following the date of the enactment of 
        this Act, 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 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.
            ``(2) Other lending institutions.--The Secretary of Housing 
        and Urban Development (after consultation and coordination with 
        the Financial Institutions Examination Council) shall by 
        regulation direct that--
                    ``(A) any other lending institution may not make, 
                increase, extend, or renew any loan secured by improved 
                real estate consisting of a 1- to 4-family residence or 
                a mobile home located or to be located in an area that 
                has been identified by the Director of the Federal 
                Emergency Management Agency 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); and
                    ``(B) any loan that is--
                            ``(i) 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 by the Director of the Federal 
                        Emergency Management Agency, as an area of 
                        special flood hazards and in which flood 
                        insurance is available under the National Flood 
                        Insurance Act of 1968, and
                            ``(ii) purchased by the Government National 
                        Mortgage Association,
                is covered for the term of the loan by flood insurance 
                in the amount provided in paragraph (1).
            ``(3) 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 of the 
        Federal Emergency Management Agency 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). The relevant 
        head of 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 paragraphs (1) and (2).
            ``(4) 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 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 by the Director as 
                an area of special flood hazards and in which flood 
                insurance is available under the National Flood 
                Insurance Act of 1968, and
                    ``(B) purchased by either such entity,
        is covered for the term of the loan by flood insurance in the 
        amount provided in paragraph (1).
            ``(5) Contested determinations.--If a borrower under a loan 
        disputes or challenges the determination of the lender that the 
        improved real estate or mobile home securing the loan is 
        located in an area of special flood hazards, the lender shall 
        review and consider any relevant information, as determined by 
        the Director, submitted to the lender by the borrower.
            ``(6) Applicability.--Paragraphs (2) through (4) shall 
        apply only with respect to any loan made, increased, extended, 
        or renewed after the expiration of the 1-year period beginning 
        on the date of the enactment of the National Flood Insurance 
        Reform Act of 1994.''.

SEC. 203. ESCROW OF FLOOD INSURANCE PAYMENTS.

    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:
    ``(d) Escrow of Flood Insurance Payments.--
            ``(1) Private lenders.--For loans secured by residential 
        real estate, each Federal entity for lending regulation (with 
        respect to any loans of regulated lending institutions) and the 
        Secretary of Housing and Urban Development (with respect to any 
        loans of other lending institutions), after consultation and 
        coordination with the Financial Institutions Examination 
        Council, shall by regulation require that, if a lender or other 
        servicer of the loan requires the escrowing of taxes, insurance 
        premiums, fees, or any other charges for a loan secured by 
        residential real estate or a mobile home, then all premiums and 
        fees for flood insurance under the National Flood Insurance Act 
        of 1968 for the residential real estate or mobile home shall be 
        paid to the lender or servicer of the loan. Premiums and fees 
        paid to the lender or servicer shall be paid in a manner 
        sufficient to make payments as due for the duration of the 
        loan. Upon receipt of the premiums, the lender 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 or the provider of the insurance that insurance 
        premiums are due, the lender or servicer shall pay from the 
        escrow account to the provider of the insurance the amount of 
        insurance premiums owed.
            ``(2) Federal agency lenders.--The appropriate head of each 
        Federal agency lender shall by regulation require and provide 
        for escrow and payment of any flood insurance premiums and fees 
        relating to residential property securing loans made by the 
        Federal agency lender under the circumstances and in the manner 
        provided under paragraph (1). Any regulations issued under this 
        paragraph shall be consistent with and substantially identical 
        to the regulations issued under paragraph (1).
            ``(3) Applicability of respa.--Escrow accounts established 
        pursuant to this subsection shall be subject to the provisions 
        of section 10 of the Real Estate Settlement Procedures Act of 
        1974.
            ``(4) Applicability.--This subsection shall apply only with 
        respect to any loan made, increased, extended, or renewed after 
        the expiration of the 1-year period beginning on the date of 
        the enactment of the National Flood Insurance Reform Act of 
        1994.''.

SEC. 204. PLACEMENT OF FLOOD INSURANCE BY LENDERS.

    (a) Actions Required by Lender.--Section 102 of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a), as amended by the preceding 
provisions of this Act, is further amended by adding at the end the 
following new subsection:
    ``(e) Placement of Flood Insurance by Lender.--
            ``(1) Notification to borrower of lack of coverage.--If, 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 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 covered by flood 
        insurance in an amount less than the amount required for the 
        property pursuant to 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 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 60 days 
        after such notification, 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.
            ``(3) Review of determination regarding required 
        purchase.--
                    ``(A) In general.--A borrower may request that the 
                Director review a determination that the improved real 
                estate or mobile home securing the loan is located in 
                an area of special flood hazards. Not later than 45 
                days after the Director receives the request, the 
                Director shall review the determination and provide the 
                borrower with a letter stating whether or not the 
                property is in a special flood hazards area. The 
                determination of the Director shall be final.
                    ``(B) Effect of determination.--Any person to whom 
                a borrower provides a letter issued by the Director 
                pursuant to subparagraph (A), stating that the property 
                of the borrower is not in an area of special flood 
                hazards, shall have no obligation under this title to 
                require the purchase of flood insurance on the property 
                during the 1-year period beginning upon the date that 
                such letter is provided.
            ``(4) Applicability.--This subsection shall apply to all 
        loans outstanding on or after the date of enactment of the 
        National Flood Insurance Reform Act of 1994.''.

SEC. 205. PENALTIES FOR FAILURE TO REQUIRE FLOOD INSURANCE OR NOTIFY.

    Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a), as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new subsections:
    ``(f) Civil Monetary Penalties for Failure to Require Flood 
Insurance or Notify.--
            ``(1) Civil monetary penalties against lenders.--Any 
        regulated or other lending institution that is found to have a 
        pattern or practice of committing violations under paragraph 
        (2) shall be assessed a civil penalty by the appropriate 
        Federal entity for lending regulation (with respect to 
        regulated lending institutions) or the Secretary of Housing and 
        Urban Development (with respect to other lending institutions) 
        in the amount provided under paragraph (5).
            ``(2) Lender violations.--The violations referred to in 
        paragraph (1) shall be--
                    ``(A) making, increasing, extending, or renewing 
                loans in violation of--
                            ``(i) the regulations issued pursuant to 
                        subsection (b) of this section;
                            ``(ii) the escrow requirements under 
                        subsection (d) of this section; or
                            ``(iii) the notice requirements under 
                        section 1364 of the National Flood Insurance 
                        Act of 1968; or
                    ``(B) failure to provide notice or purchase flood 
                insurance coverage in violation of subsection (e) of 
                this section.
            ``(3) Civil monetary penalties against gse's.--If the 
        Federal National Mortgage Association or the Federal Home Loan 
        Mortgage Corporation is found by the Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development to have a pattern or practice of 
        purchasing loans in violation of the procedures established 
        pursuant to subsection (b)(4) of this section, the Director of 
        such Office shall assess a civil penalty against such 
        enterprise in the amount provided under paragraph (5) of this 
        subsection. For purposes of this subsection, the term 
        `enterprise' means the Federal National Mortgage Association or 
        the Federal Home Loan Mortgage Corporation.
            ``(4) Notice and hearing.--A penalty under this subsection 
        may be issued only after notice and an opportunity for a 
        hearing on the record.
            ``(5) Amount.--A civil monetary penalty under this 
        subsection may not exceed $350 for each violation under 
        paragraph (2) or paragraph (3). The total amount of penalties 
        assessed under this subsection against any single regulated 
        lending institution, other lending institution, or enterprise 
        for any calendar year may not exceed $100,000.
            ``(6) Lender compliance.--Notwithstanding any State or 
        local law, for purposes of this subsection, any lender that 
        purchases flood insurance or renews a contract for flood 
        insurance on behalf of or as an agent of a borrower of a loan 
        for which flood insurance is required shall be considered to 
        have complied with the regulations issued under subsection (b).
            ``(7) Effect of transfer on liability.--Any sale or other 
        transfer of a loan by a lender who has committed a violation 
        under paragraph (1), that occurs subsequent to the violation, 
        shall not affect the liability of the transferring lender with 
        respect to any penalty under this subsection. A lender shall 
        not be liable for any violations relating to a loan committed 
        by another lender who previously held the loan.
            ``(8) Deposit of penalties.--Any penalties collected under 
        this subsection shall be paid into the National Flood and 
        Erosion Mitigation Fund under section 1367 of the National 
        Flood Insurance Act of 1968.
            ``(9) Additional penalties.--Any penalty under this 
        subsection shall be in addition to any civil remedy or criminal 
        penalty otherwise available.
            ``(10) Statute of limitations.--No penalty may be imposed 
        under this subsection after the expiration of the 5-year period 
        beginning on the date of the occurrence of the violation for 
        which the penalty is authorized under this subsection.
    ``(g) Other Actions to Remedy Pattern of Noncompliance.--
            ``(1) Authority of federal entities for lending 
        regulation.--The head of the applicable Federal entity for 
        lending regulation may require a regulated lending institution 
        to take such remedial actions as are necessary to ensure that 
        the regulated lending institution complies with the 
        requirements of the national flood insurance program if the 
        Federal agency for lending regulation makes a determination 
        under paragraph (3) regarding the regulated lending 
        institution.
            ``(2) Authority of secretary of hud.--The Secretary of 
        Housing and Urban Development may require another lending 
        institution to take such remedial actions as are necessary to 
        ensure that the other lending institution complies with the 
        requirements of the national flood insurance program if such 
        Secretary makes a determination under paragraph (3) regarding 
        the other lending institution.
            ``(3) Determination of violations.--A determination under 
        this paragraph shall be a finding that--
                    ``(A) the regulated lending institution or other 
                lending institution, as the case may be, has engaged in 
                a pattern and practice of noncompliance in violation of 
                the regulations issued pursuant to subsection (b), (d), 
                or (e) of this section or the notice requirements under 
                section 1364 of the National Flood Insurance Act of 
                1968; and
                    ``(B) the regulated lending institution or other 
                lending institution, as the case may be, has not 
                demonstrated measurable improvement in compliance 
                despite the assessment of civil monetary penalties 
                under subsection (f).''.

SEC. 206. ONGOING COMPLIANCE WITH FLOOD INSURANCE PURCHASE 
              REQUIREMENTS.

    Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a), as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new subsection:
    ``(h) Notification of Flood Hazards to Loan Transferee.--
            ``(1) In general.--Except as provided in paragraphs (2) 
        through (5), before the sale or transfer of any loan secured by 
        improved real estate or a mobile home, the seller or transferor 
        of the loan shall determine whether the property is in an area 
        that has been designated by the Director as an area having 
        special flood hazards. The seller or transferor shall, before 
        sale or transfer, notify the purchaser or transferee and any 
        servicer of the loan in writing regarding the results of the 
        determination. A determination under this paragraph shall be 
        evidenced using the standard hazard determination form under 
        section 1365 of the National Flood Insurance Act of 1968.
            ``(2) Exceptions.--For any loan secured by improved real 
        estate or a mobile home, a determination and notice under 
        paragraph (1) shall not be required if, during the 5-year 
        period ending on the date of the sale or transfer of the loan--
                    ``(A) a determination and notice under paragraph 
                (1) has been made for the property secured by the loan; 
                or
                    ``(B)(i) the loan has been made, increased, 
                extended, or renewed; and
                    ``(ii) the lender making, increasing, extending, or 
                renewing the loan was subject, at the time of such 
                transaction, to regulations issued pursuant to 
                paragraph (1), (2), or (3) of subsection (b).
            ``(3) Loans transferred by fdic.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for any loan secured by improved real 
                estate or a mobile home that is sold or transferred by 
                the Federal Deposit Insurance Corporation acting in its 
                corporate capacity or in its capacity as conservator or 
                receiver, the purchaser or transferee of the loan shall 
                determine whether the property is in an area that has 
                been designated by the Director as an area having 
                special flood hazards.
                    ``(B) Exceptions.--Such determination and notice 
                shall not be required for any loan--
                            ``(i) sold or transferred to an entity 
                        under the control of the Federal Deposit 
                        Insurance Corporation; or
                            ``(ii) for which the purchaser or 
                        transferee exercises any available option to 
                        transfer or put the loan back to the Federal 
                        Deposit Insurance Corporation.
                    ``(C) Notice to director.--A purchaser or 
                transferee of a loan required to make a determination 
                and notification under subparagraph (A) shall notify 
                the Director and any servicer of the loan of the 
                results of the determination (using the standard hazard 
                determination form under section 1365 of the National 
                Flood Insurance Act of 1968) before the expiration of 
                the 90-day period beginning on the later of (i) the 
                purchase or transfer of the loan, or (ii) the 
                expiration of any option that the purchaser or 
                transferee may have to transfer or put the loan back to 
                the Federal Deposit Insurance Corporation.
            ``(4) Loans transferred by rtc.--
                    ``(A) In general.--For any loan secured by improved 
                real estate or a mobile home that is sold or 
                transferred by the Resolution Trust Corporation acting 
                in its corporate capacity or in its capacity as a 
                conservator or receiver, the purchaser or transferee of 
                the loan shall determine whether the property is in an 
                area that has been designated by the Director as an 
                area having special flood hazards if--
                            ``(i) the Resolution Trust Corporation 
                        acquires the loan after the date of the 
                        effectiveness of this subsection and sells or 
                        transfers the loan before the expiration of the 
                        12-month period beginning on such effective 
                        date; or
                            ``(ii) the Corporation holds the loan on 
                        the date of the effectiveness of this 
                        subsection and sells or transfers the loan 
                        before the expiration of the 6-month period 
                        beginning on such effective date.
                    ``(B) Notice to director.--A purchaser or 
                transferee of a loan required to make a determination 
                and notification under subparagraph (A) shall notify 
                the Director and any servicer of the loan of the 
                results of the determination (using the standard hazard 
                determination form under section 1365 of the National 
                Flood Insurance Act of 1968) before the expiration of 
                the 90-day period beginning upon the purchase or 
                transfer of the loan.
            ``(5) Loans transferred by ncua.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), for any loan secured by improved real 
                estate or a mobile home that is sold or transferred by 
                the National Credit Union Administration acting in its 
                corporate capacity or in its capacity as a conservator 
                or liquidating agent, the purchaser or transferee of 
                the loan shall determine whether the property is in an 
                area that has been designated by the Director as an 
                area having special flood hazards.
                    ``(B) Notice to director.--A purchaser or 
                transferee of a loan required to make a determination 
                and notification under subparagraph (A) shall notify 
                the Director and any servicer of the loan of the 
                results of the determination (using the standard hazard 
                determination form under section 1365 of the National 
                Flood Insurance Act of 1968) before the expiration of 
                the 90-day period beginning upon the purchase or 
                transfer of the loan.
                    ``(C) Exception.--Such determination and notice 
                shall not be required for any loan sold or transferred 
                to an entity under the control of the National Credit 
                Union Administration.
            ``(6) Applicability.--This subsection shall apply only with 
        respect to any loan outstanding or entered into after the 
        expiration of the 1-year period beginning on the date of the 
        enactment of the National Flood Insurance Reform Act of 
        1994.''.

SEC. 207. FEES FOR DETERMINING APPLICABILITY OF FLOOD INSURANCE 
              PURCHASE REQUIREMENTS.

    Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a) as amended by the preceding provisions of this Act, is further 
amended by adding at the end the following new subsection:
    ``(i) Fee for Determining Location.--Notwithstanding any other 
Federal or State law, any lender for a loan described in paragraph (1), 
(2), or (3) of subsection (b) may charge a reasonable fee (as 
determined by the Director) for the costs of determining whether the 
property securing the loan is located in an area of 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 is made pursuant 
        to--
                    ``(A) the making, increasing, extending, or 
                renewing of the loan that is initiated by the borrower; 
                or
                    ``(B) 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 property securing the loan is located or 
                that, in the determination of the Director, may 
                reasonably be considered to require a determination 
                under this subsection.
            ``(2) Purchaser or transferee fee.--The purchaser or 
        transferee of such a loan may be charged the fee in the case of 
        sale or transfer of the loan.''.

SEC. 208. NOTICE REQUIREMENTS.

    Section 1364 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104a) is amended to read as follows:

                         ``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 located 
        or to be located in an area that has been identified by the 
        Director 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 
        lenders retain a record of the receipt of the notices by the 
        purchaser or lessee and the servicer.
            ``(2) Other lending institutions.--The Secretary of Housing 
        and Urban Development shall by regulation require notification 
        in the manner provided under paragraph (1) with respect to any 
        loan made by another lending institution and secured by 
        improved real estate consisting of a 1- to 4-family residence 
        or a mobile home located or to be located in an area that has 
        been identified by the Director 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) (except to the extent necessary to 
        provide for differences between the types of loans for which 
        notice is required under this paragraph and the types for which 
        notice is required under paragraph (1)).
            ``(3) Federal agency lenders.--The appropriate head of 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 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).
            ``(4) Contents of notice.--Written notification required 
        under this subsection shall include--
                    ``(A) a warning, in a form to be established in 
                consultation with and subject to the approval of the 
                Director, stating that the real estate or mobile home 
                securing the loan is located or is to be located in an 
                area having special flood hazards;
                    ``(B) a description of the flood insurance purchase 
                requirements under section 102(b) of the Flood Disaster 
                Protection Act of 1973;
                    ``(C) a statement that flood insurance coverage may 
                be purchased under the national flood insurance program 
                and is also available from private insurers; and
                    ``(D) any other information that the Director 
                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 (with respect to regulated lending 
        institutions) and the Secretary of Housing and Urban 
        Development (with respect to other lending institutions), after 
        consultation and coordination with the Financial Institutions 
        Examination Council, shall by regulation require such 
        institutions, as a condition of making, increasing, extending, 
        renewing, selling, or transferring any loan described in 
        subsection (a)(1), to notify the Director (or the designee of 
        the Director) in writing during the term of the loan of the 
        servicer of the loan. Such institutions shall also notify the 
        Director (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.
            ``(2) Federal agency lenders.--The appropriate head of each 
        Federal agency lender shall by regulation provide for 
        notification in the manner provided under paragraph (1) with 
        respect to any loan described in subsection (a)(1) that is made 
        by the Federal agency lender. Any regulations issued under this 
        paragraph shall be consistent with and substantially identical 
        to the regulations issued under paragraph (1) of this 
        subsection.
    ``(c) Notification of Expiration of Insurance.--The Director (or 
the designee of the Director) 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, the servicer of any loan secured by the property covered by 
the contract, and the owner of the loan.''.

SEC. 209. STANDARD HAZARD DETERMINATION FORMS.

    Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101 et seq.) is amended by adding at the end the following new 
section:

                 ``standard hazard determination forms

    ``Sec. 1365. (a) Development.--The Director, 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 standard written and 
electronic forms for determining the flood hazard exposure of a 
property for use in connection with loans secured by improved real 
estate or a mobile home. The written and electronic forms shall be 
established by regulations issued not later than 270 days after the 
date of the enactment of the National Flood Insurance Reform Act of 
1994.
    ``(b) Design and Contents.--
            ``(1) Purpose.--The form under subsection (a) shall be 
        designed to facilitate a determination of the exposure to flood 
        hazards of structures located on the property to which the loan 
        application relates. The form shall be designed to facilitate 
        compliance with the provisions of this title.
            ``(2) Contents.--The form shall require identification of 
        the type of flood-risk zone in which the property is located, 
        the complete map and panel numbers for the property, and the 
        date of the map used for the determination, with respect to 
        flood hazard information on file with the Director. If the 
        property is not located in an area of special flood hazards the 
        form shall require a statement to such effect and shall 
        indicate the complete map and panel numbers of the property. If 
        the complete map and panel numbers for the property are not 
        available because the property 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.
    ``(c) Required Use.--The Federal entities for lending regulation 
shall by regulation require the use of the form under this section by 
regulated lending institutions. The appropriate head of each Federal 
agency lender shall by regulation provide for the use of the form with 
respect to any loan made by such Federal agency lender. The Secretary 
of Housing and Urban Development shall by regulation require use of the 
form in connection with loans purchased by Federal National Mortgage 
Association and the Federal Home Loan Mortgage Corporation and the 
Government National Mortgage Association. The Secretary of Housing and 
Urban Development shall encourage the use of the form by other lending 
institutions.
    ``(d) Guarantees Regarding Information.--In providing information 
regarding special flood hazards on the form developed under this 
section (or otherwise required of a lender not required to use the form 
under this section) any lender making, increasing, extending, or 
renewing a loan secured by improved real estate or a mobile home may 
provide for the acquisition or determination of such information to be 
made by a person other than such institution, only to the extent such 
person guarantees the accuracy of the information. The Director shall 
by regulations establish requirements relating to the nature and manner 
of such guarantees.
    ``(e) Electronic Form.--The Federal entities for lending 
regulation, the Secretary of Housing and Urban Development, and the 
appropriate head of each Federal agency lender shall by regulation 
require any lender using the electronic form developed under this 
section with respect to any loan to make available upon the request of 
such Federal entity, Secretary, or agency head, a written form under 
this section for such loan within 48 hours after such request.
    ``(f) Effective Date.--The regulations under this section requiring 
use of the written and electronic forms established pursuant to this 
section shall be issued together with the regulations required under 
subsection (a) and shall take effect upon the expiration of the 90-day 
period beginning on such issuance.''.

SEC. 210. EXAMINATIONS REGARDING COMPLIANCE.

    (a) Amendment to Federal Deposit Insurance Act.--Section 10 of the 
Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by adding at 
the end the following new subsection:
    ``(h) Flood Insurance Compliance by Insured Depository 
Institutions.--
            ``(1) Examinations.--The appropriate Federal banking agency 
        shall, during each scheduled on-site examination required by 
        this section, determine whether the insured depository 
        institution is complying with the requirements of the national 
        flood insurance program.
            ``(2) Report.--
                    ``(A) Requirement.--Not later than 1 year after the 
                date of enactment of the National Flood Insurance 
                Reform Act of 1994 and biennially thereafter for the 
                next 4 years, each appropriate Federal banking agency 
                shall submit a report to the Congress on compliance by 
                insured depository institutions with the requirements 
                of the national flood insurance program.
                    ``(B) Contents.--The report shall include a 
                description of the methods used to determine 
                compliance, the number of institutions examined during 
                the reporting year, a listing and total number of 
                institutions found not to be in compliance, actions 
                taken to correct incidents of noncompliance, and an 
                analysis of compliance, including a discussion of any 
                trends, patterns, and problems, and recommendations 
                regarding reasonable actions to improve the efficiency 
                of the examinations processes.''.
    (b) Amendment to Federal Credit Union Act.--Section 204 of the 
Federal Credit Union Act (12 U.S.C. 1784) is amended by adding at the 
end the following new subsection:
    ``(e) Flood Insurance Compliance by Insured Credit Unions.--
            ``(1) Examination.--The Board shall, during each 
        examination conducted under this section, determine whether the 
        insured credit union is complying with the requirements of the 
        national flood insurance program.
            ``(2) Report.--
                    ``(A) Requirement.--Not later than 1 year after the 
                date of enactment of the National Flood Insurance 
                Reform Act of 1994 and biennially thereafter for the 
                next 4 years, the Board shall submit a report to 
                Congress on compliance by insured credit unions with 
                the requirements of the national flood insurance 
                program.
                    ``(B) Contents.--The report shall include a 
                description of the methods used to determine 
                compliance, the number of insured credit unions 
                examined during the reporting year, a listing and total 
                number of insured credit unions found not to be in 
                compliance, actions taken to correct incidents of 
                noncompliance, and an analysis of compliance, including 
                a discussion of any trends, patterns, and problems, and 
                recommendations regarding reasonable actions to improve 
                the efficiency of the examinations processes.''.
    (c) Amendment to Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992.--Section 1317 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended 
by adding at the end the following new subsection:
    ``(g) Flood Insurance Compliance by Enterprises.--
            ``(1) Examination.--After the submission of the report 
        under section 210(d) of the National Flood Insurance Reform Act 
        of 1994, the Director shall, during each annual examination of 
        an enterprise conducted under this section, determine whether 
        the enterprise has established adequate procedures required 
        under section 102(b)(4) of the Flood Disaster Protection Act of 
        1973 and is complying with such procedures.
            ``(2) Exception.--The provisions of paragraph (1) shall not 
        apply with respect to an enterprise if the Director--
                    ``(A) determines, pursuant to the report under 
                section 210(d) of the National Flood Insurance Reform 
                Act of 1994, that the enterprise has established 
                adequate procedures pursuant to section 102(b)(4) of 
                the Flood Disaster Protection Act of 1973 and has a 
                pattern of compliance with such procedures; and
                    ``(B) certifies such finding in writing to the 
                Congress.
            ``(3) Report.--
                    ``(A) Requirement.--Not later than 1 year after the 
                date of enactment of the National Flood Insurance 
                Reform Act of 1994 and biennially thereafter for the 
                next 4 years, the Director shall submit a report to 
                Congress on compliance by the enterprises with the 
                procedures established pursuant to section 102(b)(4) of 
                the Flood Disaster Protection Act of 1973.
                    ``(B) Contents.--The report shall include a 
                description of the methods used to determine 
                compliance, identification of any enterprise found not 
                to be in compliance, actions taken to correct incidents 
                of noncompliance, and an analysis of compliance, 
                including a discussion of any trends, patterns, and 
                problems, and recommendations regarding reasonable 
                actions to improve the efficiency of the examinations 
                processes.''.
    (d) GAO Report on GSE Compliance.--Not later than 18 months after 
the date of enactment of this Act, the Comptroller General of the 
United States shall submit a report to the Congress and the Director of 
the Office of Federal Housing Enterprise Oversight of the Department of 
Housing and Urban Development regarding the procedures established by 
the Federal National Mortgage Association and the Federal Home Loan 
Mortgage Corporation pursuant to section 102(b)(4) of the Flood 
Disaster Protection Act of 1973. The report shall include a description 
of such procedures, an analysis of whether such procedures are 
sufficient to comply with the requirements of such section, a 
determination of whether each enterprise has complied with such 
procedures, a description of any actions taken by each enterprise to 
correct any incidents of noncompliance, and any recommendations 
regarding reasonable actions to improve the procedures established by 
the enterprises and compliance with such procedures.

SEC. 211. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

    Section 1006 of the Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3305) is amended by adding at the end 
the following new subsection:
    ``(g) The council shall consult and assist the Federal entities for 
lending regulation and the Secretary of Housing and Urban Development 
in developing and coordinating uniform standards and requirements for 
use by lenders as provided under the National Flood Insurance Act of 
1968 and the Flood Disaster Protection Act of 1973.''.

SEC. 212. CLERICAL AMENDMENTS.

    Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a) is amended--
            (1) by striking the section heading and inserting the 
        following new section heading:

   ``flood insurance purchase and compliance requirements and escrow 
                            accounts''; and

            (2) in subsection (c), by inserting ``Exception to Purchase 
        Requirements for State-Owned Property.--'' before 
        ``Notwithstanding''.

 TITLE III--RATINGS AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT 
                                PROGRAMS

SEC. 301. COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY 
              FLOODPLAIN MANAGEMENT.

    Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4022) is amended--
            (1) by inserting after ``Sec. 1315.'' the following: ``(a) 
        Requirement for Participation in Flood Insurance Program.--''; 
        and
            (2) by adding at the end the following new subsection:
    ``(b) Community Rating System and Incentives for Community 
Floodplain Management.--
            ``(1) Authority and goals.--The Director shall carry out a 
        community rating system program to evaluate the measures 
        adopted by areas (and subdivisions thereof) in which the 
        Director has made flood insurance coverage available to provide 
        for adequate land use and control provisions consistent with 
        the comprehensive criteria for such land management and use 
        under section 1361, to facilitate accurate risk-rating, to 
        promote flood insurance awareness, and to complement adoption 
        of more effective measures for floodplain and coastal erosion 
        management.
            ``(2) Incentives.--The program under this subsection shall 
        provide incentives in the form of adjustments in the premium 
        rates for flood insurance coverage in areas that the Director 
        determines have adopted and enforced the goals of the community 
        rating system under this subsection. In providing incentives 
        under this paragraph, the Director may provide for additional 
        adjustments in premium rates for flood insurance coverage in 
        areas that the Director determines have implemented measures 
        relating to the protection of natural and beneficial floodplain 
        functions. The Director may also provide for additional 
        adjustments in premium rates for flood insurance coverage in 
        areas within which such rates have increased as a result of 
        induced flooding risk from flood control or mitigation 
        projects, as determined by the Director, except that the 
        adjustment shall not reduce premium rates below the rate which 
        would have been charged absent the risk of induced flooding 
        from the flood control or mitigation projects.
            ``(3) Funds.--The Director shall carry out the program 
        under this subsection with amounts, as the Director determines 
        necessary, from the National Flood Insurance Fund under section 
        1310 and any other amounts that may be appropriated for such 
        purpose.
            ``(4) Reports.--The Director shall submit a report to the 
        Congress regarding the program under this subsection not later 
        than the expiration of the 2-year period beginning on the date 
        of the enactment of the National Flood Insurance Reform Act of 
        1994. The Director shall submit a report under this paragraph 
        not less than every 2 years thereafter. Each report under this 
        paragraph shall include an analysis of the cost-effectiveness 
        and other accomplishments and shortcomings of the program and 
        any recommendations of the Director for legislation regarding 
        the program.''.

SEC. 302. FUNDING.

    Section 1310(a) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4017(a)) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) by redesignating paragraph (5) as paragraph (8); and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) for carrying out the program under section 
        1315(b);''.

            TITLE IV--MITIGATION OF FLOOD AND EROSION RISKS

SEC. 401. REPEAL OF FLOODED PROPERTY PURCHASE AND LOAN PROGRAM.

    (a) Repeal.--Section 1362 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4103) is hereby repealed.
    (b) Transition Phase.--Notwithstanding subsection (a), during the 
1-year period beginning on the date of the enactment of this Act, the 
Director of the Federal Emergency Management Agency may enter into loan 
and purchase commitments as provided under section 1362 of such Act (as 
in effect immediately before the enactment of this Act).
    (c) Savings Provision.--Notwithstanding subsection (a), the 
Director shall take any action necessary to comply with any purchase or 
loan commitment entered into before the expiration of the period 
referred to in subsection (b) pursuant to authority under section 1362 
of the National Flood Insurance Act of 1968 or subsection (b).

SEC. 402. TERMINATION OF EROSION-THREATENED STRUCTURES PROGRAM.

    (a) In General.--Section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013) is amended by striking subsection (c).
    (b) Transition Phase.--Notwithstanding subsection (a), during the 
1-year period beginning on the date of the enactment of this Act, the 
Director of the Federal Emergency Management Agency may pay amounts 
under flood insurance contracts for demolition or relocation of 
structures as provided in section 1306(c) of the National Flood 
Insurance Act of 1968 (as in effect immediately before the enactment of 
this Act).
    (c) Savings Provision.--Notwithstanding subsection (a), the 
Director shall take any action necessary to make payments under flood 
insurance contracts pursuant to any commitments made before the 
expiration of the period referred to in subsection (b) pursuant to the 
authority under section 1306(c) of the National Flood Insurance Act of 
1968 or subsection (b).

SEC. 403. MITIGATION ASSISTANCE RESPONSIBILITIES IN FEDERAL INSURANCE 
              ADMINISTRATION.

    Section 1105(a) of the Housing and Urban Development Act of 1968 
(42 U.S.C. 4129(a)) is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Director of the Federal Emergency Management Agency shall 
coordinate all mitigation activities, including the administration of 
the program for mitigation assistance under section 1366, under the 
Federal Insurance Administrator. Such activities shall include the 
development and implementation of various mitigation activities and 
techniques, the provision of advice and assistance regarding mitigation 
to States, communities, and individuals, including planning assistance 
under section 1366(b), coordination with other Federal flood and 
erosion mitigation efforts, and coordination with State and local 
governments and public and private agencies and organizations for 
collection and dissemination of information regarding erosion.''.

SEC. 404. STATE AND COMMUNITY MITIGATION ASSISTANCE PROGRAM.

    (a) In General.--Chapter III of the National Flood Insurance Act of 
1968 (42 U.S.C. 4101 et seq.), as amended by the preceding provisions 
of this Act, is further amended by adding at the end the following new 
section:

              ``state and community mitigation assistance

    ``Sec. 1366. (a) Authority.--The Director shall carry out a program 
to provide financial assistance to States and communities, using 
amounts made available from the National Flood and Erosion Mitigation 
Fund under section 1367, for planning and carrying out activities 
designed to reduce the risk of flood and erosion damage to structures 
covered under contracts for flood insurance under this title. Such 
financial assistance shall be made available in the form of grants 
under subsection (b) for planning assistance and grants under this 
section for carrying out mitigation activities.
    ``(b) Planning Assistance Grants.--
            ``(1) In general.--The Director 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 and Erosion Mitigation Fund for use under this 
        section in any fiscal year, the Director may use not more than 
        $1,500,000 to provide planning assistance grants under this 
        subsection.
            ``(3) Limitations.--
                    ``(A) Timing.--A grant under this subsection may be 
                awarded to a State or community not more than once 
                every 5 years and each grant may cover a period of 1 to 
                3 years.
                    ``(B) Single grantee amount.--A grant for planning 
                assistance may not exceed--
                            ``(i) $150,000, to any State; or
                            ``(ii) $50,000, to any community.
                    ``(C) Cumulative state grant amount.--The sum of 
                the amounts of grants under this subsection in any 
                fiscal year to any one State and all communities 
                located in such State may not exceed $300,000.
    ``(c) Mitigation Plan Requirement.--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, a 
flood and erosion risk mitigation plan (hereafter in this section 
referred to as a `mitigation plan'), that is more protective against 
flood losses and, if applicable, erosion losses, than the criteria 
established by the Director under section 1361 and provides such 
protection with respect to structures covered by contracts for flood 
insurance under this title. The mitigation plan shall include a 
comprehensive strategy for mitigation activities adopted by the State 
or community following a public hearing.
    ``(d) Notification of Approval.--The Director 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. If the Director does not approve a plan, the Director shall 
notify the State or community in writing of the reasons for such 
disapproval.
    ``(e) Eligible Mitigation Activities.--
            ``(1) Determination.--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 under subsection (d). The Director may approve 
        only mitigation plans that specify mitigation activities that 
        the Director determines are technically feasible and cost-
        effective. The Director shall provide assistance under this 
        section to the extent amounts are available in the National 
        Flood and Erosion Mitigation Fund pursuant to appropriation 
        Acts, subject only to the absence of approvable mitigation 
        plans.
            ``(2) Eligible activities.--The Director shall determine 
        whether mitigation activities described in a mitigation plan 
        submitted under subsection (d) by a State or community comply 
        with the requirements under paragraph (1). Such activities may 
        include--
                    ``(A) demolition or relocation of any structure 
                located on land that is along the shore of a lake or 
                other body of water and is certified by an appropriate 
                State or local land use authority to be subject to 
                imminent collapse or subsidence as a result of erosion 
                or flooding;
                    ``(B) elevation, relocation, demolition, or 
                floodproofing of structures, particularly structures 
                incurring repetitive flood-related damage, structures 
                (including public structures) located in special flood 
                hazard areas or other areas of flood risk, and 
                structures (including public structures) located in 
                erosion hazard areas or other areas of erosion risk;
                    ``(C) acquisition by States and communities of 
                properties (including public properties) located in 
                special flood hazard areas or other areas of flood 
                risk, properties (including public properties) located 
                in erosion hazard areas or other areas of erosion risk, 
                and properties substantially damaged by flood, for 
                public use, as the Director 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;
                    ``(E) the provision of technical assistance by 
                States to communities and individuals to conduct 
                eligible mitigation activities;
                    ``(F) other activities that the Director considers 
                appropriate and specifies in regulation; and
                    ``(G) other mitigation activities not described in 
                subparagraphs (A) through (E) or the regulations issued 
                under subparagraph (F), that are described in the 
                mitigation plan of a State or community.
    ``(f) Matching Requirement.--
            ``(1) In general.--The Director 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 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 of the 
        State or community. In no case shall any State or community in-
        kind contribution exceed one-half of the amount of non-Federal 
        funds contributed by the State or community.
            ``(2) 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), and the 
        value of any donated material or building and the value of any 
        lease on a building.
    ``(g) Oversight of Mitigation Plans.--The Director 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 (f) are used in accordance with such certification.
    ``(h) Recapture.--
            ``(1) Noncompliance with plan.--If the Director 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 shall recapture any unexpended amounts and deposit the 
        amounts in the National Flood and Erosion Mitigation Fund under 
        section 1367.
            ``(2) Failure to provide matching funds.--If the Director 
        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 (f), 
        the Director 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 and Erosion Mitigation Fund under section 1367.
    ``(i) Reports.--Not later than 1 year after the date of enactment 
of the National Flood Insurance Reform Act of 1994 and biannually 
thereafter, the Director shall submit a report to the Congress 
describing the status of flood and erosion mitigation activities 
carried out with assistance provided under this section.
    ``(j) Definition of Community.--For purposes of this section, the 
term `community' means--
            ``(1) a political subdivision that (A) has zoning and 
        building code jurisdiction over a particular area of special 
        flood hazards, and (B) is participating in the national flood 
        insurance program; or
            ``(2) a political subdivision of a State, or other 
        authority, that is designated to develop and administer a 
        mitigation plan by political subdivisions, all of which meet 
        the requirements of paragraph (1).''.
    (b) Regulations.--Not later than 6 months after date of enactment 
of this Act, the Director of the Federal Emergency Management Agency 
shall issue regulations to carry out section 1366 of the National Flood 
Insurance Act of 1968, as added by subsection (a).

SEC. 405. ESTABLISHMENT OF NATIONAL FLOOD AND EROSION MITIGATION FUND.

    Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101 et seq.), as amended by the preceding provisions of this Act, is 
further amended by adding at the end the following new section:

              ``national flood and erosion mitigation fund

    ``Sec. 1367. (a) Establishment and Availability.--The Director 
shall establish in the Treasury of the United States a fund to be known 
as the National Flood and Erosion 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.
    ``(b) Credits.--The National Flood and Erosion Mitigation Fund 
shall be credited with--
            ``(1) any premium surcharges assessed under section 
        1308(f);
            ``(2) any penalties collected under section 102(f) of the 
        Flood Disaster Protection Act of 1973; and
            ``(3) any amounts recaptured under section 1366(i).
    ``(c) Investment.--If the Director determines that the amounts in 
the National Flood and Erosion Mitigation Fund are in excess of amounts 
needed under subsection (a), the Director may invest any excess amounts 
the Director determines advisable in interest-bearing obligations 
issued or guaranteed by the United States.
    ``(d) Report.--The Director shall submit a report to the Congress 
not later than the expiration of the 1-year period beginning on the 
date of the 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.''.

SEC. 406. INSURANCE PREMIUM MITIGATION SURCHARGE AND EROSION HAZARD 
              ZONE SURCHARGE.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4015) is amended by adding at the end the following new subsections:
    ``(f) Insurance Premium Mitigation Surcharge.--
            ``(1) Assessment.--Notwithstanding any other provision of 
        this title, the Director shall assess, with respect to each 
        contract for flood insurance coverage under this title issued 
        or renewed after the date of the enactment of the National 
        Flood Insurance Reform Act of 1994, a mitigation surcharge of--
                    ``(A) $10 per policy term, for policies having a 
                total coverage amount of $150,000 or less that cover 
                structures that are principal residences;
                    ``(B) $20 per policy term, for policies having a 
                total coverage amount of more than $150,000 that cover 
                structures that are principal residences; and
                    ``(C) the amount established by the Director not to 
                exceed $40 per policy term, for policies covering other 
                structures.
            ``(2) Deposit in mitigation fund.--Any mitigation 
        surcharges collected shall be paid into the National Flood and 
        Erosion Mitigation Fund under section 1367.
            ``(3) Exemption.--The mitigation surcharges shall not be 
        subject to any agents' commissions, company expenses 
        allowances, or State or local premium taxes.
    ``(g) Erosion Hazard Zone Surcharges.--The Director shall assess a 
surcharge for each contract for flood insurance coverage under this 
title covering an existing structure that is located within the 30-year 
or 60-year erosion hazard zone established under section 1360(j). 
Subject only to the limitation under subsection (e), the surcharge 
shall be in the amount necessary so that, based on the risk involved 
and sound actuarial principles, the sum of the amounts charged for a 
property for flood insurance premiums and the surcharge under this 
subsection is equal to the full actuarial risk premium rate determined 
under section 1307(a)(1) for the area in which the property is 
located.''.

SEC. 407. LIMITATIONS ON NEW FLOOD INSURANCE COVERAGE IN EROSION HAZARD 
              AREAS.

    The National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.) 
is amended by inserting after section 1313 the following new section:

``SEC. 1314. PROPERTIES LOCATED WITHIN 30-YEAR AND 60-YEAR EROSION 
              HAZARD ZONES.

    ``(a) Properties Located Within 30-Year Erosion Hazard Zone.--After 
the establishment of erosion hazard zones under section 1360(j), the 
Director may not make flood insurance available within a 30-year 
erosion hazard zone with respect to any new--
            ``(1) construction; or
            ``(2) addition to an existing structure, if the addition 
        makes the structure not a readily movable structure.
    ``(b) Properties Located Within 60-Year Erosion Hazard Area and 
Outside 30-Year Erosion Hazard Zone.--After the establishment of 
erosion hazard zones under section 1360(j), the Director may not make 
flood insurance available with respect to any new--
            ``(1) nonresidential structure;
            ``(2) residential structure that is not a readily movable 
        structure; or
            ``(3) addition to an existing structure, if the addition 
        makes the structure not a readily movable structure;
that is constructed or relocated landward of the 30-year erosion hazard 
zone and within the 60-year erosion hazard zone established by the 
Director under such section.
    ``(c) Treatment of Existing Structures.--This section may not be 
construed to prohibit the renewal or continuation of coverage for any 
flood insurance policy under this title covering a structure that 
suffers substantial damage, regardless of whether the structure is 
relocated or reconstructed. For purposes of this subsection, the term 
`substantial damage' means damage of any origin sustained by a 
structure that is of such an extent that the cost of restoring the 
structure to its condition before such damage would equal or exceed 50 
percent of the market value of the structure immediately before the 
damage occurred.
    ``(d) State Erosion Hazard Management Program.--Notwithstanding 
subsections (a) and (b), if upon the date of the enactment of the 
National Flood Insurance Reform Act of 1994 a State has adopted and has 
in effect an erosion management program that, in the determination of 
the Director, has enforceable provisions prohibiting or restricting new 
construction or additions to existing structures within the 30-year 
erosion hazard zone, the Director shall continue to make flood 
insurance under this title available for new construction and additions 
to existing structures landward of the 30-year erosion zone that are 
otherwise in conformance with all applicable State and local laws, 
regulations, and ordinances relating to building design, development, 
and erosion.''.

SEC. 408. STUDY OF MITIGATION INSURANCE.

    (a) Study.--The Director of the Federal Emergency Management Agency 
shall conduct a study to determine the feasibility of providing, as 
part of the flood insurance policy, insurance coverage to provide for 
increases in the costs of repair and reconstruction of repetitively and 
severely flood-damaged insured buildings, in order to repair, 
reconstruct, or otherwise mitigate future hazards to those buildings to 
comply with local building codes and floodplain management ordinances 
to the greatest extent possible. In conducting the study, the Director 
shall seek involvement from other Federal, State, and local agencies, 
and representation from the insurance, construction, and floodplain 
management interests. Under the study the Director shall--
            (1) identify potential activities related to repair, 
        reconstruction, or otherwise achieving mitigation required to 
        comply with standards under the national flood insurance 
        program and local building codes, and evaluate the costs of 
        such activities;
            (2) evaluate how such insurance coverage could be utilized 
        to achieve economically justified acquisition or relocation of 
        certain structures under certain circumstances;
            (3) evaluate the cost of providing the additional coverage 
        and investigate a full range of measures for funding such 
        costs, including changes in coverage, rates, and deductibles;
            (4) evaluate the effect changes identified in paragraph (3) 
        would have on the entire policy base, the cost of flood 
        insurance, retention of policies, marketing of policies, the 
        number and magnitude of claims paid, and the economic soundness 
        and value of flood-prone property, and provide detail on such 
        effects by State and flood hazard zone; and
            (5) identify mechanisms required to identify qualifying 
        structures, determine appropriate mitigation measures, 
        coordinate with State and local officials, provide consistency 
        with State and local plans and programs, deliver the increased 
        insurance payments, and verify appropriate actions by 
        policyholders.
    (b) Report.--The Director shall submit to the Congress a report 
describing the study not later than the expiration of the 18-month 
period beginning on the date of the enactment of this Act. The report 
shall include conclusions and recommendations of the Director in 
conducting the study.

SEC. 409. RIVERINE EROSION STUDY.

    (a) Study.--The Director of the Federal Emergency Management Agency 
shall conduct a study to determine the feasibility of identifying and 
establishing erosion rates for communities subject to riverine erosion 
hazards and the best manner of identifying and establishing such rates. 
Under the study the Director shall--
            (1) investigate and assess existing and state-of-the-art 
        technical methodologies for assessing riverine erosion;
            (2) examine natural riverine processes, environmental 
        conditions, and human-induced changes to the banks of rivers 
        and streams, examples of erosion and likely causes, and 
        examples of erosion control and reasons for their performance; 
        and
            (3) analyze riverine erosion management strategies, the 
        technical standards, methods, and data necessary to support 
        such strategies, and methods of administering such strategies 
        through the national flood insurance program.
    (b) Report.--The Director shall submit a report to the Congress 
regarding the findings and conclusions of the study under this section 
not later than the expiration of the 2-year period beginning on the 
date of the enactment of this Act. The report shall include any 
recommendations of the Director regarding appropriate methods and 
approaches for identifying and determining riverine erosion rates and 
management strategies relating to riverine erosion.

SEC. 410. COORDINATION WITH COASTAL ZONE MANAGEMENT PROGRAMS.

    (a) In General.--In implementing this title and the amendments made 
by this title, the Director of the Federal Emergency Management Agency 
shall consult with the Under Secretary of Commerce for Oceans and 
Atmosphere and representatives from State coastal zone management 
programs to promote full coordination of the erosion management 
provisions of the National Flood Insurance Act of 1968 as amended by 
this Act, and the provisions of the Coastal Zone Management Act of 
1972. The Director shall, to the greatest extent possible, utilize 
State management programs approved under section 306 of the Coastal 
Zone Management Act of 1972 to facilitate development and 
implementation of regulations and guidelines for this title.
    (b) Coordination Report.--The Director shall prepare a report that 
details the proposed mechanisms for achieving the coordination required 
in subsection (a). In preparing the report, the Director shall consult 
with the Under Secretary of Commerce for Oceans and Atmosphere. This 
report shall be submitted to the Congress not later than 2 years after 
the date of enactment of this Act.

                  TITLE V--FLOOD INSURANCE TASK FORCE

SEC. 501. FLOOD INSURANCE INTERAGENCY TASK FORCE.

    (a) Establishment.--There is hereby established an interagency task 
force to be known as the Flood Insurance Task Force (in this section 
referred to as the ``Task Force'').
    (b) Membership.--
            (1) In general.--The Task Force shall be composed of 11 
        members, who shall be the designees of--
                    (A) the Federal Insurance Administrator;
                    (B) the Federal Housing Commissioner;
                    (C) the Secretary of Veterans Affairs;
                    (D) the Administrator of the Farmers Home 
                Administration;
                    (E) the Administrator of the Small Business 
                Administration;
                    (F) a designee of the Financial Institutions 
                Examination Council;
                    (G) the chairman of the Board of Directors of the 
                Federal Home Loan Mortgage Corporation;
                    (H) the chairman of the Board of Directors of the 
                Federal National Mortgage Association;
                    (I) the Under Secretary of Commerce for Oceans and 
                Atmosphere;
                    (J) the Director of the United States Fish and 
                Wildlife Service; and
                    (K) the Administrator of the Environmental 
                Protection Agency.
            (2) Qualifications.--Members of the Task Force shall be 
        designated for membership on the Task Force by reason of 
        demonstrated knowledge and competence regarding the national 
        flood insurance program.
    (c) Duties.--The Task Force shall carry out the following duties:
            (1) Make recommendations to the head of each Federal agency 
        and enterprise referred to under subsection (b)(1) regarding 
        establishment or adoption of standardized enforcement 
        procedures among such agencies and corporations responsible for 
        enforcing compliance with the requirements under the national 
        flood insurance program to ensure fullest possible compliance 
        with such requirements.
            (2) Conduct a study of the extent to which Federal agencies 
        and the secondary mortgage market can provide assistance in 
        ensuring compliance with the requirements under the national 
        flood insurance program and submit to the Congress a report 
        describing the study and any conclusions.
            (3) Conduct a study of the extent to which existing 
        programs of Federal agencies and corporations for compliance 
        with the requirements under the national flood insurance 
        program can serve as a model for other Federal agencies 
        responsible for enforcing compliance, and submit to the 
        Congress a report describing the study and any conclusions.
            (4) Develop guidelines regarding enforcement and compliance 
        procedures, based on the studies and findings of the Task 
        Force, and publish the guidelines in a usable format.
    (d) Noncompensation.--Members of the Task Force shall receive no 
additional pay by reason of their service on the Task Force.
    (e) Chairperson.--The members of the Task Force shall elect one 
member as chairperson of the Task Force.
    (f) Meetings and Action.--The Task Force shall meet at the call of 
the chairman or a majority of the members of the Task Force and may 
take action by a vote of the majority of the members. The Federal 
Insurance Administrator shall coordinate and call the initial meeting 
of the Task Force.
    (g) Officers.--The chairperson of the Task Force may appoint any 
officers to carry out the duties of the Task Force under subsection 
(c).
    (h) Staff of Federal Agencies.--Upon request of the chairperson of 
the Task Force, the head of any of the Federal agencies and 
corporations referred to under subsection (b)(1) may detail, on a 
nonreimbursable basis, any of the personnel of such agency to the Task 
Force to assist the Task Force in carrying out its duties under this 
Act.
    (i) Powers.--In carrying out this section, the Task Force may hold 
hearings, sit and act at times and places, take testimony, receive 
evidence and assistance, provide information, and conduct research as 
the Task Force considers appropriate.
    (j) Subcommittee on Natural and Beneficial Functions of the 
Floodplain.--The members of the Task Force appointed under 
subparagraphs (I), (J), and (K) of subsection (b)(1) shall constitute a 
select subcommittee which, in addition to their duties under subsection 
(c), shall make recommendations regarding the implementation of the 
provisions of the National Flood Insurance Act of 1968 that deal with 
protection of the natural and beneficial functions of the floodplain.
    (k) Termination.--The Task Force shall terminate upon the 
expiration of the 24-month period beginning upon the designation of the 
last member to be designated under subsection (b)(1).

                   TITLE VI--MISCELLANEOUS PROVISIONS

SEC. 601. LIMITATION ON PREMIUM AND SURCHARGE INCREASES.

    (a) Property-Specific Limitation.--Section 1308 of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended--
            (1) in subsection (c), by striking ``Notwithstanding any 
        other provision of this title'' and inserting ``Subject only to 
        the limitation under subsection (e)''; and
            (2) by inserting after subsection (d) the following new 
        subsection:
    ``(e) Annual Limitation on Premium and Surcharge Increases.--
Notwithstanding any other provision of this title, the sum of the risk 
premium rate for flood insurance and the erosion hazard zone surcharge 
that are charged under this title for any property may not be increased 
in an amount that would result in the sum of such rate and surcharge 
increases for the property during any 12-month period exceeding 10 
percent of the sum of the amounts of the risk premium rate and erosion 
hazard zone surcharge applicable to the property upon the commencement 
of such 12-month period.''.
    (b) Repeal of Program-Wide Limitation.--Subsection (d) of section 
541 of the Housing and Community Development Act of 1987 (42 U.S.C. 
4015 note) is hereby repealed.

SEC. 602. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.

    (a) In General.--Section 1306(b) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4013(b)) is amended as follows:
            (1) Residential property.--In paragraph (2), by striking 
        ``an amount of $150,000 under the provisions of this clause'' 
        and inserting the following: ``a total amount (including such 
        limits specified in paragraph (1)(A)(i)) equal to the dollar 
        amount limitation pursuant to section 305(a)(2) of the Federal 
        Home Loan Mortgage Corporation Act in effect for a single-
        family residence''.
            (2) Residential property contents.--In paragraph (3), by 
        striking ``an amount of $50,000 under the provisions of this 
        clause'' and inserting the following: ``a total amount 
        (including such limits specified in paragraph (1)(A)(ii)) of 
        $100,000''.
            (3) Nonresidential property and contents.--By striking 
        paragraph (4) and inserting the following new paragraph:
            ``(4) in the case of any nonresidential property, including 
        churches, 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 limits specified in subparagraph (B) or 
        (C) or paragraph (1), as applicable) of $500,000 for each 
        structure and $500,000 for any contents related to each 
        structure; and''.
    (b) Removal of Ceiling on Coverage Required.--Section 1306(b) of 
the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is 
amended--
            (1) in paragraph (5), by striking ``; and'' at the end and 
        inserting a period; and
            (2) by striking paragraph (6).

SEC. 603. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH PRIVATE INSURANCE 
              ENTITIES.

    Section 1345(b) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4081(b)) is amended by striking the period at the end and 
inserting the following: ``and without regard to the provisions of the 
Federal Advisory Committee Act (5 U.S.C. App.).''.

SEC. 604. UPDATING OF FLOOD MAPS AND ASSESSMENT AND MAPPING OF EROSION 
              HAZARD ZONES.

    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 subsections:
    ``(e) Review of Flood Maps.--Once during each 5-year period (the 
1st such period beginning on the date of the enactment of the National 
Flood Insurance Reform Act of 1994) or more often as the Director 
determines necessary because of storm-induced erosion, increased 
watershed development, or other extraordinary situations, the Director 
shall assess the need to revise and update all floodplain areas and 
flood risk zones identified, delineated, or established under this 
section.
    ``(f) Updating Flood Maps.--The Director shall revise and update 
any floodplain areas and flood-risk zones--
            ``(1) upon the determination of the Director, 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 equal to the amount of funds provided by the Director 
        (or the equivalent value of data, technical analysis, or other 
        in-kind services) for the requested revision or update.
    ``(g) Availability of Flood Maps.--To promote compliance with the 
requirements of this title, the Director shall make flood insurance 
rate maps and related information available free of charge to State 
agencies directly responsible for coordinating the national flood 
insurance program and to 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 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 
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 shall make such compendia available, 
free of charge, to 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) Establishment of Erosion Hazard Zones.--
            ``(1) In general.--Not later than the expiration of the 6-
        year period beginning on the date of the enactment of the 
        National Flood Insurance Reform Act of 1994, the Director shall 
        assess, identify, and map all coastal areas that have special 
        erosion hazards (in this section referred to as `erosion hazard 
        zones'), as provided in this subsection.
            ``(2) Mapping priorities.--Not later than 2 years after the 
        date of enactment of the National Flood Insurance Reform Act of 
        1994, the Director shall determine the coastal areas that are 
        at greatest risk from erosion and assess, identify, and map the 
        erosion hazard zones in such areas.
            ``(3) 60-year erosion zones.--On each flood insurance rate 
        map established under this section, the Director shall identify 
        and provide legible demarcation for areas that are subject to 
        special erosion hazards within a 60-year period based on past 
        annual average rates of shoreline retreat in such areas (in 
        this section referred to as `60-year erosion zones').
            ``(4) 30-year erosion zones.--On each flood insurance rate 
        map established under this section, the Director shall provide 
        information by area regarding the existing annual average rate 
        of erosion for each area, so that users of the maps can 
        delineate boundaries for areas subject to erosion within 30 
        years (in this section referred to as `30-year erosion zones').
            ``(5) Consideration of mitigation activities.--In 
        identifying and mapping erosion hazard zones, the Director 
        shall determine erosion rates based on (A) the presence of any 
        community erosion control measures, and (B) erosion of the area 
        in the absence of such measures. The Director shall use the 
        lower of the estimated erosion rates in the determination of 
        the erosion hazard zones.
            ``(6) Use of state and community information.--In 
        designating erosion hazard zones under this title, the Director 
        shall, to the maximum extent practicable, use State or 
        community erosion rate data and baseline reference features.
            ``(7) Review.--The Director shall consult with State and 
        community governments in the determination of erosion hazard 
        zones, and shall provide for a public review and appeals 
        process comparable to the established review and appeals 
        process for flood elevation determinations required under this 
        title.
            ``(8) Updating.--The Director shall provide for revising 
        and updating erosion hazard zones as frequently as the Director 
        determines to be necessary for purposes of this title. In 
        revising the geographical boundaries of erosion hazard zones, 
        the Director shall place special emphasis on considering--
                    ``(A) areas (or subdivisions thereof) that are 
                experiencing or have recently experienced erosion rates 
                in excess of the annual average erosion rate, due to 
                storms, high lake levels, or other factors; and
                    ``(B) areas where nonstructural and structural 
                measures have been implemented by a community to 
                control erosion or erosion rates have been otherwise 
                significantly altered by manmade or induced activity.
            ``(9) Transition.--Until the Director has assessed, 
        identified, and mapped erosion rate data for a community, the 
        community may obtain, review, and reasonably use erosion rate 
        information or other historical data available from other 
        Federal, State, or other sources in order to develop a 
        mitigation plan required for assistance under section 1366.''.

SEC. 605. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY-BASED 
              PREMIUM RATES FOR PRE-FIRM STRUCTURES.

    (a) Study.--The Director of the Federal Emergency Management Agency 
(in this section referred to as the ``Director'') shall conduct a study 
of the economic effects that would result from increasing premium rates 
for flood insurance coverage made available under the national flood 
insurance program for pre-FIRM structures to the full actuarial risk 
based premium rate determined under section 1307(a)(1) of the National 
Flood Insurance Act of 1968 for the area in which the property is 
located. In conducting the study, the Director shall--
            (1) determine each area that would be subject to such 
        increased premium rates; and
            (2) for each such area, determine--
                    (A) the amount by which premium rates would be 
                increased;
                    (B) the number and types of properties affected and 
                the number and types of properties covered by flood 
                insurance under this title likely to cancel such 
                insurance if the rate increases were made;
                    (C) the effects that the increased premium rates 
                would have on land values and property taxes; and
                    (D) any other effects that the increased premium 
                rates would have on the economy and homeowners.
    (b) Definition of ``Pre-FIRM Structure''.--For purposes of 
subsection (a), the term ``pre-FIRM structure'' means a structure that 
was not constructed or substantially improved after the later of--
            (1) December 31, 1974; or
            (2) the effective date of the initial rate map published by 
        the Director under section 1360(a)(2) of the National Flood 
        Insurance Act of 1968 for the area in which such structure is 
        located.
    (c) Report.--The Director shall submit a report to the Congress 
describing and explaining the findings of the study conducted under 
this section. The report shall be submitted not later than 12 months 
after the date of the enactment of this Act.

SEC. 606. NATIONAL FLOOD INSURANCE FUND.

    (a) Availability of Fund for Increased Administrative and 
Operational Responsibilities.--Section 1310(a) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended--
            (1) in the matter preceding paragraph (1), by inserting 
        ``(except as otherwise provided in this section)'' after 
        ``without fiscal year limitation''; and
            (2) by inserting after paragraph (5) (as added by the 
        preceding provisions of this Act) the following new paragraphs:
            ``(6) for assessment and mapping of erosion hazard zones 
        under section 1360(j), except that the fund shall be available 
        for the purpose under this paragraph in an amount not to exceed 
        an aggregate of $25,000,000 over the 6-year period beginning on 
        the date of the enactment of the National Flood Insurance 
        Reform Act of 1994;
            ``(7) for the revision and updating of erosion hazard zones 
        under section 1360(j)(8), except that the fund shall be 
        available for the purpose under this paragraph in an amount not 
        to exceed $2,000,000 in each fiscal year beginning after the 
        expiration of the 6-year period beginning on the date of the 
        enactment of the National Flood Insurance Reform Act of 1994; 
        and''.
    (b) Separate Account.--Section 1310(a) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended--
            (1) by striking ``is authorized to'' and inserting 
        ``shall''; and
            (2) by inserting after ``which shall be'' the following: 
        ``an account separate from any other accounts or funds 
        available to the Director and shall be''.

SEC. 607. EFFECTIVE DATES OF POLICIES.

    (a) 30-Day Delay.--Section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013), as amended by the preceding provisions of 
this Act, is further amended by adding at the end the following new 
subsection:
    ``(c)(1) Except as provided in paragraph (2), coverage under a new 
contract for flood insurance coverage under this title entered into 
after the date of the enactment of the National Flood Insurance Reform 
Act of 1994, and any modification to coverage under an existing flood 
insurance contract made after such date, shall become effective upon 
the expiration of the 30-day period beginning on the date that all 
obligations for such coverage (including completion of the application 
and payment of any initial premiums owed) are satisfactorily completed.
    ``(2) Coverage under a flood insurance contract for newly 
constructed property and coverage for newly acquired property, that is 
obtained before or upon the completion of the construction or transfer 
of title to the property, as applicable, shall become effective at such 
time as the Director shall by regulation provide.''.
    (b) Study.--The Director of the Federal Emergency Management Agency 
shall conduct a study to determine the appropriateness of existing 
requirements regarding the effective date and time of coverage under 
flood insurance contracts obtained through the national flood insurance 
program. In conducting the study, the Director shall determine whether 
any delay between the time of purchase of flood insurance coverage and 
the time of initial effectiveness of the coverage should differ for 
various classes of properties (based upon the type of property, 
location of the property, or any other factors related to the property) 
or for various circumstances under which such insurance was purchased. 
Not later than the expiration of the 6-month period beginning on the 
date of the enactment of this Act, the Director shall submit to the 
Congress a report on the results of the study.

SEC. 608. REGULATIONS.

    The Director of the Federal Emergency Management Agency, the 
Secretary of Housing and Urban Development, and any appropriate head of 
any Federal agency may each issue any regulations necessary to carry 
out the applicable provisions of this Act and the applicable amendments 
made by this Act.

SEC. 609. RELATION TO STATE AND LOCAL LAWS.

    This Act and the amendments made by this Act may not be construed 
to preempt, annul, alter, amend, or exempt any person from compliance 
with any law, ordinance, or regulation of any State or local government 
with respect to land use, management, or control.
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