I

103D CONGRESS

2D SESSION H. R. 4052

To improve the National Flood Insurance Program.

IN THE HOUSE OF REPRESENTATIVES

MARCH 16, 1994

Mr. BACCHUS of Florida (for himself, Mr. BAKER of Louisiana, Mr. MCCOLLUM, Mr. LAZIO, Mr. FAZIO, Mr. JOHNSTON of Florida, Mr. SHAW, Mrs.

MEEK, Mr. JEFFERSON, Mr. RAVENEL, Mrs. FOWLER, Mr. SCHUMER,

Mr. FLAKE, Mr. JOHNSON of South Dakota, Mr. LEWIS of Florida, Mr.

MILLER of Florida, Mr. KLINK, Ms. BROWN of Florida, Mr. BILIRAKIS,

Mr. MICA, Mr. LIVINGSTON, Mr. KING, Mr. STEARNS, Mr. ACKERMAN,

Mr. CANADY, Mr. PETERSON of Florida, Mr. LEVY, Mr. COLEMAN, Mr.

GALLEGLY, Mr. BOEHNER, Mr. HASTINGS, Mr. HUTTO, Mr. PETERSON

of Minnesota, Mr. MANZULLO, Mr. DEUTSCH, Mrs. THURMAN, Mr. CALVERT, Mr. GOODLING, Mr. MACHTLEY, Mr. FIELDS of Louisiana, Mr.

GOSS, Mr. YOUNG of Alaska, Mr. CRAPO, Mr. DIAZ-BALART, Ms. ROSLEHTINEN, Mr. FRANKS of New Jersey, Mr. DOOLEY, Mr. CRAMER, Mr.

HAYES, Mr. QUINN, Mr. MCCRERY, Mr. SPENCE, Mr. YOUNG of Florida,

Ms. MOLINARI, Mr. TAUZIN, Mr. BATEMAN, Mr. POMBO, and Mr. TALENT) introduced the following bill; which was referred to the Committee

on Banking, Finance and Urban Affairs

A BILL

To improve the National Flood Insurance Program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘National Flood Insurance Program Improvement Act of

4 1994’’.

5 (b) TABLE OF CONTENTS.—The table of contents for

6 this Act is as follows:

Sec. 1. Short title and table of contents.

Sec. 2. Definition.

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. Expanded flood insurance purchase requirements.

Sec. 202. Escrow of flood insurance payments.

Sec. 203. Notice requirements.

Sec. 204. Placement of flood insurance by regulated lending institution, Federal

agency lender, or servicer.

Sec. 205. Standard flood hazard determination forms.

Sec. 206. Examinations regarding compliance by regulated lending institutions.

Sec. 207. Penalties and corrective actions for failure to require flood insurance,

escrow, or notify.

Sec. 208. Federal Financial Institutions Examination Council.

Sec. 209. Conforming amendment.

TITLE III—RATINGS AND INCENTIVES FOR COMMUNITY

FLOODPLAIN MANAGEMENT PROGRAMS

Sec. 301. Community rating system and incentives for community floodplain

management.

Sec. 302. Community erosion hazard management program.

Sec. 303. Funding.

TITLE IV—MITIGATION OF FLOOD AND EROSION RISKS

Sec. 401. Mitigation assistance in Federal insurance administration.

Sec. 402. Authorization of national flood and erosion mitigation funds under

section 1367.

Sec. 403. State and community mitigation assistance program.

Sec. 404. Repeal of program for purchase of certain insured properties.

Sec. 405. Termination of erosion threatened structures program.

TITLE V—TASK FORCE, ADVISORY COUNCIL, AND STUDIES

Sec. 501. Flood Insurance Interagency Task Force.

Sec. 502. Technical Mapping Advisory Council.

Sec. 503. Economic impact study of erosion hazard areas.
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Sec. 504. Justification for Government operation of the National Flood Insurance Program and determination of the feasibility and availability of private sector flood insurance coverage.

TITLE VI—MISCELLANEOUS PROVISIONS

Sec. 601. Maximum flood insurance coverage amounts.

Sec. 602. Additional coverage for compliance with land use and control measures.

Sec. 603. Flood insurance program arrangements with private insurance entities.

Sec. 604. Updating of flood insurance maps and identification of erosion hazard

areas.

Sec. 605. Agricultural structures.

Sec. 606. Funding for increased administrative and operational responsibilities.

Sec. 607. Separate account for flood insurance fund.

Sec. 608. Nonwaiver of flood purchase requirement for recipients of Federal

disaster assistance.

Sec. 609. Insurance waiting period.

Sec. 610. Implementation review by the Director.

Sec. 611. Regulations.

1 SEC. 2. DEFINITION.

2 As used in this Act, the term ‘‘Director’’ means the

3 Director of the Federal Emergency Management Agency.

4 TITLE I—DEFINITIONS

5 SEC. 101. FLOOD DISASTER PROTECTION ACT OF 1973.

6 (a) IN GENERAL.—Section 3(a) of the Flood Disaster

7 Protection Act of 1973 (42 U.S.C. 4003(a)) is amended—

8 (1) by striking paragraph (5) and inserting the

9 following new paragraph:

10 ‘‘(5) ‘Federal entity for lending regulation’

11 means the Board of Governors of the Federal Re12 serve System, the Federal Deposit Insurance Cor13 poration, the Comptroller of the Currency, the Office

14 of Thrift Supervision, the National Credit Union Ad15 ministration Board, and the Farm Credit Adminis16 tration, and with respect to a particular regulated
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1 lending institution means the entity primarily re2 sponsible for the supervision of the institution;’’;

3 (2) in paragraph (6), by striking the period at

4 the end and inserting a semicolon; and

5 (3) by inserting after paragraph (6) the follow6 ing new paragraphs:

7 ‘‘(7) ‘regulated lending institution’ means a

8 bank, savings association, credit union, farm credit

9 bank, Federal land bank association, or production

10 credit association subject to the supervision of a

11 Federal entity for lending regulation;

12 ‘‘(8) ‘Federal agency lender’ means the Federal

13 Housing Administration, the Farmers Home Admin14 istration, the Small Business Administration, and

15 the Veterans’ Administration, when such agency

16 makes loans secured by improved real estate or a

17 manufactured home; and

18 ‘‘(9) ‘servicer’ means a person who receives any

19 scheduled periodic payments from a borrower pursu20 ant to the terms of any loan secured by a lien on

21 real property, and who makes the payments of prin22 cipal and interest and such other payments with re23 spect to the amounts received from the borrower as

24 may be required.’’.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) REQUIREMENTS TO PURCHASE FLOOD IN2 SURANCE.—Section 102(b) of the Flood Disaster

3 Protection Act of 1973 (42 U.S.C. 4012a(b)) is

4 amended by striking ‘‘Each Federal instrumentality

5 responsible for the supervision, approval, regulation,

6 or insuring of banks, savings and loan associations,

7 or similar institutions shall by regulation direct such

8 institutions’’ and inserting ‘‘Each Federal entity for

9 lending regulation shall by regulation direct regu10 lated lending institutions’’.

11 (2) EFFECT OF NONPARTICIPATION IN FLOOD

12 INSURANCE PROGRAM.—Section 202(b) of the Flood

13 Disaster Protection Act of 1973 (42 U.S.C.

14 4106(b)) is amended by striking ‘‘Federal instru15 mentality described in such section shall by regula16 tion require the institutions’’ and inserting ‘‘Federal

17 entity for lending regulation (with respect to regu18 lated lending institutions)’’.

19 SEC. 102. NATIONAL FLOOD INSURANCE ACT OF 1968.

20 (a) IN GENERAL.—Section 1370(a) of the National

21 Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is

22 amended—

23 (1) in paragraph (5), by striking ‘‘and’’ at the

24 end;
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1 (2) in paragraph (6), by striking the period at

2 the end and inserting a semicolon; and

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

4 paragraphs:

5 ‘‘(7) the term ‘Federal entity for lending regu6 lation’ means the Board of Governors of the Federal

7 Reserve System, the Federal Deposit Insurance Cor8 poration, the Comptroller of the Currency, the Office

9 of Thrift Supervision, the National Credit Union Ad10 ministration Board, and the Farm Credit Adminis11 tration, and with respect to a particular regulated

12 lending institution, means the entity primarily re13 sponsible for the supervision of the institution;

14 ‘‘(8) the term ‘regulated lending institution’

15 means a bank, savings association, credit union,

16 farm credit bank, Federal land bank association, or

17 production credit association subject to the super18 vision of a Federal entity for lending regulation;

19 ‘‘(9) the term ‘Federal agency lender’ means

20 the Federal Housing Administration, the Farmers

21 Home Administration, the Small Business Adminis22 tration, and the Veterans’ Administration, when

23 such agency makes loans secured by improved real

24 estate or a manufactured home;
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1 ‘‘(10) the term ‘erosion control measures’

2 means a community’s efforts to control erosion

3 through nonstructural and structural projects;

4 ‘‘(11) the term ‘repetitive loss structure’ means

5 an insured property—

6 ‘‘(A) that incurred flood-related damage on

7 2 occasions during a 10-year period ending on

8 the date of the event for which a second claim

9 is made, in which the cost of repair, on the av10 erage, equaled or exceeded 25 percent of the

11 value of the structure at the time of each flood

12 event;

13 ‘‘(B) that was continuously covered by a

14 contract for flood insurance under this title for

15 not less than the period beginning upon the 1st

16 occasion of flood-related damage referred to in

17 subparagraph (A) and ending upon the 2nd oc18 casion of such damage; and

19 ‘‘(C) that would have a chargeable rate

20 that is less than the applicable estimated risk

21 premium for such area (or subdivision thereof)

22 under section 1307(a)(1);

23 ‘‘(12) the term ‘cost of compliance with land

24 use and control measures’ means—
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1 ‘‘(A) the cost of elevating a structure so

2 that the structure is in compliance with the

3 minimum performance standards adopted by

4 the community pursuant to section 1315 of the

5 National Flood Insurance Act of 1968; or

6 ‘‘(B) the cost of relocation or demolition of

7 the structure, if—

8 ‘‘(i) elevating a structure will not re9 sult in compliance; or

10 ‘‘(ii) the insured consents; and

11 ‘‘(13) the term ‘servicer’ means any person who

12 receives any scheduled periodic payments from a

13 borrower pursuant to the terms of any loan secured

14 by a lien on real property, and who makes the pay15 ments of principal and interest and such other pay16 ments with respect to the amounts received from the

17 borrower as may be required.’’.

18 (b) CONFORMING AMENDMENT.—Section 1322(d) of

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

20 4029(d)) is amended by striking ‘‘federally supervised, ap21 proved, regulated or insured financial institution’’ and in22 serting ‘‘regulated lending institution’’.
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1 TITLE II—COMPLIANCE AND

2 INCREASED PARTICIPATION

3 SEC. 201. EXPANDED FLOOD INSURANCE PURCHASE RE4 QUIREMENTS.

5 (a) FEDERAL AGENCIES.—Section 102(a) of the

6 Flood Disasters Protection Act of 1973 (42 U.S.C.

7 4012a(a)), is amended—

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

9 (2) by adding at the end the following new

10 paragraphs:

11 ‘‘(2) The Federal National Mortgage Association, the

12 Federal Home Loan Mortgage Corporation, and the Fed13 eral Agricultural Mortgage Corporation shall implement

14 procedures reasonably designed to assure that all loans

15 that are—

16 ‘‘(A) secured by improved real estate or a man17 ufactured home located in an area that has been

18 identified at the time of the origination of the loan

19 by the Director as an area having special flood haz20 ards and in which flood insurance is available under

21 the National Flood Insurance Act of 1968; and

22 ‘‘(B) purchased by any such entity;

23 are covered for the term of the loan by flood insurance

24 in the amount provided in subsection (b).
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1 ‘‘(3) Each Federal agency lender shall implement

2 procedures reasonably designed to assure that all prop3 erty—

4 ‘‘(A) that secures loans that the Federal agency

5 lender makes, increases, extends, or renews; and

6 ‘‘(B) that is improved by real estate or a manu7 factured home located in an area that has been iden8 tified at the time of the origination of the loan by

9 the Director as an area having special flood hazards

10 and in which flood insurance is available under the

11 National Flood Insurance Act of 1968;

12 is covered for the term of the loan by flood insurance in

13 the amount provided in subsection (b).’’.

14 (b) REGULATED LENDING INSTITUTIONS.—Section

15 102(b) of the Flood Disaster Protection Act of 1973 (42

16 U.S.C. 4012a(b)), as amended by section 101(b)(1), is

17 amended by inserting before ‘‘shall by regulation’’ the fol18 lowing: ‘‘(after consultation and coordination with the

19 Federal Financial Institutions Examination Council estab20 lished under the Federal Financial Institutions Examina21 tion Council Act of 1974)’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to all transactions occurring after

24 the expiration of the 1-year period beginning on the date

25 of enactment of this Act.
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1 SEC. 202. ESCROW OF FLOOD INSURANCE PAYMENTS.

2 (a) IN GENERAL.—Section 102 of the Flood Disaster

3 Protection Act of 1973 (42 U.S.C. 4012a) is amended by

4 adding at the end the following new subsection:

5 ‘‘(d)(1) Each Federal entity for lending regulation,

6 after consultation and coordination with the Federal Fi7 nancial Institutions Examination Council, shall by regula8 tion require that, if a regulated lending institution re9 quires the escrowing of taxes, insurance premiums, fees,

10 or any other charges for a loan secured by residential real

11 estate or manufactured homes, all charges for flood insur12 ance under this title for the property shall be paid by the

13 borrower to the institution for the duration of the period

14 during which the regulated lending institution maintains

15 an escrow account. Upon receipt of a notice from the Di16 rector or the provider of the insurance that insurance pre17 miums, fees, or other charges are due, the institution shall

18 pay from the escrow account to the provider of the insur19 ance the amount of insurance premiums, fees or other

20 charges owed.

21 ‘‘(2) If a Federal agency lender requires the

22 escrowing of taxes, insurance premiums, fees, or any other

23 charges, then any charges for flood insurance under this

24 title for the residential real estate or the manufactured

25 home shall be paid by the borrower to the Federal agency

26 lender for the duration of the period during which the
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1 Federal agency lender maintains an escrow account. Upon

2 receipt of a notice from the Director or the provider of

3 the insurance that insurance premiums, fees, or other

4 charges are due, the Federal agency lender shall pay from

5 the escrow account to the provider of the insurance the

6 amount of insurance premiums, fees or other charges

7 owed.

8 ‘‘(3) Escrow accounts used to collect flood insurance

9 premiums, fees, or other charges under this subsection

10 shall be subject to the provisions of section 10 of the Real

11 Estate Settlement Procedures Act of 1974.’’.

12 (b) APPLICABILITY.—Section 102(d) of the Flood

13 Disaster Protection Act of 1973, as added by subsection

14 (a), shall apply with respect to any loan made, increased,

15 extended, or renewed after the expiration of the 1-year pe16 riod beginning on the date of enactment of this Act.

17 SEC. 203. NOTICE REQUIREMENTS.

18 Section 1364 of the National Flood Insurance Act of

19 1968 (42 U.S.C. 4104a) is amended to read as follows:

20 ‘‘SEC. 1364. NOTICE REQUIREMENTS.

21 ‘‘(a) LENDING INSTITUTIONS.—Each Federal entity

22 for lending regulation, after consultation and coordination

23 with the Federal Financial Institutions Examination

24 Council, shall by regulation require that before a regulated

25 lending institution makes, increases, extends, or renews a
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1 loan secured by improved real estate or a manufactured

2 home located in an area that has been identified by the

3 Director as an area having special flood hazards, the insti4 tution shall notify the borrower of the special flood

5 hazards and of the need to purchase and maintain flood

6 insurance.

7 ‘‘(b) FEDERAL AGENCY LENDERS.—Before a Fed8 eral agency lender makes, increases, extends, or renews

9 a loan secured by improved real estate or a manufactured

10 home located in an area that has been identified by the

11 Director as an area having special flood hazards, the Fed12 eral agency lender shall notify the borrower of the special

13 flood hazards and of the need to purchase and maintain

14 flood insurance.

15 ‘‘(c) PARTICIPATING COMMUNITIES.—The Director

16 shall by regulation require each participating community,

17 upon receiving the semiannual list prepared by the Direc18 tor of all changes, revisions, and amendments made to the

19 flood insurance rate maps during the preceding 6 months,

20 to determine whether any properties in their community

21 have been affected, and to provide annual notice by mail,

22 notice by publication, notice on tax assessments, or notice

23 by other reasonable method, to regulated lending institu24 tions that are known to lend in the community, and to

25 the owners of all properties newly determined to be, or
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1 no longer to be, in an area having special flood hazards,

2 of the flood insurance purchase requirements under sec3 tion 102(b).

4 ‘‘(d) CONTENTS OF NOTICE.—Notification required

5 by this section shall include a warning, in a form to be

6 established by the Director, stating that the real estate

7 or manufactured home securing the loan is located in an

8 area having special flood hazards, a description of the

9 flood insurance purchase requirements under section

10 102(b), a statement that flood insurance coverage may be

11 purchased under the National Flood Insurance Program

12 and may also be available from private insurers, and any

13 other information that the Director considers necessary to

14 carry out the purposes of the National Flood Insurance

15 Program.’’.

16 SEC. 204. PLACEMENT OF FLOOD INSURANCE BY REGU17 LATED LENDING INSTITUTION, FEDERAL

18 AGENCY LENDER, OR SERVICER.

19 (a) REQUIRED ACTIONS BY LENDER.—Section 102

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

21 4012a), as amended by section 202(a), is amended by add22 ing at the end the following new subsection:

23 ‘‘(e) REQUIRED ACTIONS BY LENDER.—

24 ‘‘(1) NOTIFICATION TO BORROWER OF LACK OF

25 COVERAGE.—If, at the time of origination or at any
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1 other time during the term of a loan secured by im2 proved real estate or by a manufactured home lo3 cated in an area that has been identified by the Di4 rector as an area having special flood hazards and

5 in which flood insurance is available under this title,

6 a regulated lending institution, Federal agency lend7 er, or servicer determines that the building or manu8 factured home and any personal property securing

9 the loan held or serviced by the regulated lending in10 stitution, Federal agency lender, or servicer is not

11 covered by flood insurance, in an amount not less

12 than the amount required by subsection (b), the reg13 ulated lending institution, Federal agency lender, or

14 servicer shall notify the borrower, in a form to be es15 tablished by the Director, that the borrower should

16 obtain, at the borrower’s expense, an amount of

17 flood insurance that is not less than the amount re18 quired by subsection (b), for the term of the loan.

19 If, not later than 45 days after receiving such notifi20 cation, the borrower fails to purchase such flood in21 surance, the regulated lending institution, Federal

22 agency lender, or servicer shall purchase the insur23 ance on behalf of the borrower and may charge the

24 borrower for the cost of premiums and fees incurred
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1 by the regulated lending institution, Federal agency

2 lender, or servicer in purchasing the insurance.

3 ‘‘(2) REVIEW.—

4 ‘‘(A) BY THE DIRECTOR.—A borrower may

5 request, based upon the submission of support6 ing technical data, that the Director review a

7 determination that the improved real estate or

8 manufactured home securing the loan is located

9 in an area having special flood hazards. Not

10 later than 45 days after the Director receives

11 the request, the Director shall review the deter12 mination and provide the borrower with a letter

13 stating whether or not the property is in an

14 area having special flood hazards. The deter15 mination of the Director shall be final. If the

16 Director fails to respond to a request within 45

17 days, the property shall be deemed not to be lo18 cated in an area having special flood hazards.

19 ‘‘(B) INSURANCE NOT REQUIRED.—If a

20 person is provided by the borrower with a letter

21 issued by the Director pursuant to subpara22 graph (A) during the preceding 1-year period,

23 stating that the property is not in an area hav24 ing special flood hazards, such person shall
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1 have no obligation under this title to require the

2 purchase of flood insurance on the property.’’.

3 (b) APPLICABILITY.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), section 102(e) of the Flood Disaster Pro6 tection Act of 1973, as added by subsection (a),

7 shall apply to all loans outstanding on or after the

8 date of enactment of this Act.

9 (2) LOANS REGULATED BY THE FARM CREDIT

10 ADMINISTRATION.—Notwithstanding paragraph (1),

11 with respect to loans held by institutions regulated

12 by the Farm Credit Administration, section 102(e)

13 of the Flood Disaster Protection Act of 1973, as

14 added by subsection (a), shall apply only to loans

15 originating on or after the date of enactment of this

16 Act.

17 SEC. 205. STANDARD FLOOD HAZARD DETERMINATION

18 FORMS.

19 (a) IN GENERAL.—Chapter III of the National Flood

20 Insurance Act of 1968 (42 U.S.C. 4101 et seq.) is amend21 ed by adding at the end the following new section:

22 ‘‘SEC. 1365. STANDARD FLOOD HAZARD DETERMINATION

23 FORMS.

24 ‘‘(a) DEVELOPMENT.—The Director, in consultation

25 with the Federal entities for lending regulation, and after
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1 notice and comment, shall develop a standard flood hazard

2 determination form (hereafter in this section referred to

3 as the ‘determination form’) for use in connection with

4 loans secured by improved real estate or a manufactured

5 home located in an area having special flood hazards and

6 in which flood insurance is available under this title. The

7 determination form may be maintained in a printed, com8 puterized, or electronic manner.

9 ‘‘(b) DESIGN AND CONTENTS.—The determination

10 form shall state whether the property is in an area having

11 special flood hazards, the risk premium rate classification

12 established for the special flood hazard area in which the

13 property is located, the complete map and panel numbers

14 for the property, and the date of the map used for the

15 determination. If the complete map and panel numbers for

16 the property are not available because the property is not

17 located in a community that is participating in the Na18 tional Flood Insurance Program or because no map exists

19 for the relevant area, the determination form shall so

20 state.

21 ‘‘(c) REQUIRED USE.—Each Federal entity for lend22 ing regulation shall by regulation require the use of the

23 determination form by regulated lending institutions.

24 Each Federal agency lender shall by regulation provide for

25 the use of the determination form. The Federal National
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1 Mortgage Association, the Federal Home Loan Mortgage

2 Corporation, and the Federal Agricultural Mortgage Cor3 poration shall require use of the determination form by

4 any person from whom they purchase loans.

5 ‘‘(d) GUARANTEES REGARDING INFORMATION.—In

6 recording information on a determination form, a person

7 may rely on information provided by a third party to the

8 extent that the third party guarantees the accuracy of the

9 information.

10 ‘‘(e) RELIANCE ON PREVIOUS DETERMINATION.—A

11 person or institution increasing, extending, renewing, or

12 purchasing a loan may rely on a previous determination

13 as to whether property is in an area having special flood

14 hazards, if the previous determination was made not more

15 than 5 years before the date of the transaction, and the

16 basis for the previous determination has been set forth on

17 a determination form.’’.

18 (b) APPLICABILITY.—Section 1365 of the National

19 Flood Insurance Act of 1968, as added by subsection (a),

20 shall apply to all loans originated on or after the expira21 tion of the 6-month period beginning on the date the

22 standard flood hazard determination form is finalized by

23 the Director.
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1 SEC. 206. EXAMINATIONS REGARDING COMPLIANCE BY

2 REGULATED LENDING INSTITUTIONS.

3 (a) AMENDMENT TO FEDERAL DEPOSIT INSURANCE

4 ACT.—Section 10 of the Federal Deposit Insurance Act

5 (12 U.S.C. 1820) is amended by adding at the end the

6 following new subsection:

7 ‘‘(h) FLOOD HAZARD INSURANCE COMPLIANCE BY

8 INSURED DEPOSITORY INSTITUTIONS REQUIRED.—

9 ‘‘(1) EXAMINATIONS.—The appropriate Federal

10 banking agency shall, during each scheduled on-site

11 examination required by this section, determine

12 whether the insured depository institution is comply13 ing with the requirements of the National Flood

14 Insurance Program.

15 ‘‘(2) REPORT.—Not later than 1 year after the

16 date of enactment of the National Flood Insurance

17 Program Improvement Act of 1994, and biannually

18 thereafter for the next 4 years, each appropriate

19 Federal banking agency shall submit a report to the

20 Congress on compliance by insured depository insti21 tutions with the requirements of the National Flood

22 Insurance Program. The report shall include a de23 scription of the methods used to determine compli24 ance, the number of institutions examined during

25 the reporting year, a listing and total number of in26 stitutions found to be in noncompliance, actions
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1 taken to correct incidents of noncompliance, and an

2 analysis of compliance, including a discussion of any

3 trends, patterns, and problems, and recommenda4 tions regarding reasonable actions to improve the ef5 ficiency of the examinations processes.’’.

6 (b) AMENDMENT TO THE FEDERAL CREDIT UNION

7 ACT.—Section 204 of the Federal Credit Union Act (12

8 U.S.C. 1784) is amended by adding at the end the follow9 ing new subsection:

10 ‘‘(e) FLOOD HAZARD INSURANCE COMPLIANCE BY

11 INSURED CREDIT UNIONS REQUIRED.—

12 ‘‘(1) EXAMINATION.—The Board shall, during

13 each examination conducted under this section, de14 termine whether the insured credit union is comply15 ing with the requirements of the National Flood

16 Insurance Program.

17 ‘‘(2) REPORT.—Not later than 1 year after the

18 date of enactment of the National Flood Insurance

19 Program Improvement Act of 1994, and biannually

20 thereafter for the next 4 years, the Board shall sub21 mit a report to the Congress on compliance by in22 sured credit unions with the requirements of the Na23 tional Flood Insurance Program. The report shall

24 include a description of the methods used to deter25 mine compliance, the number of insured credit
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1 unions examined during the reporting year, a listing

2 and total number of insured credit unions found to

3 be in noncompliance, actions taken to correct inci4 dents of noncompliance, and an analysis of compli5 ance, including a discussion of any trends, patterns,

6 and problems, and recommendations regarding rea7 sonable actions to improve the efficiency of the

8 examinations processes.’’.

9 SEC. 207. PENALTIES AND CORRECTIVE ACTIONS FOR FAIL10 URE TO REQUIRE FLOOD INSURANCE, ES11 CROW, OR NOTIFY.

12 Section 102 of the Flood Disaster Protection Act of

13 1973 (42 U.S.C. 4012a), as amended by sections 202 and

14 204, is amended by adding at the end the following new

15 subsections:

16 ‘‘(f) CIVIL PENALTIES.—

17 ‘‘(1) IN GENERAL.—A regulated lending institu18 tion that is found to have a pattern or practice of

19 violating this section may be assessed a civil penalty

20 by the appropriate Federal entity for lending regula21 tion of not more than $350 for each such violation.

22 A penalty under this subsection may be issued only

23 after notice and an opportunity for a hearing on the

24 record.
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1 ‘‘(2) TOTAL AMOUNT.—The total amount of

2 penalties assessed under this subsection against a

3 single regulated lending institution for any calendar

4 year may not exceed $100,000.

5 ‘‘(3) SALES OR TRANSFERS.—The subsequent

6 sale or other transfer of a loan by a regulated lend7 ing institution that has committed a violation of this

8 section shall not affect the liability of the transfer9 ring institution with respect to any penalty under

10 this subsection. An institution shall not be liable for

11 a violation relating to a loan committed by another

12 institution that previously held the loan.

13 ‘‘(4) 3-YEAR LIMIT.—No penalty may be im14 posed under this subsection after the expiration of

15 the 3-year period beginning on the date of the occur16 rence of the violation.

17 ‘‘(g) ADDITIONAL ACTIONS.—If a Federal entity for

18 lending regulation determines—

19 ‘‘(1) that a regulated lending institution has

20 demonstrated a pattern and practice of noncompli21 ance in violation of the regulations issued pursuant

22 to subsection (b) or subsection (d) or the notice re23 quirements under section 1364 of the National

24 Flood Insurance Act of 1968, and
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1 ‘‘(2) that the regulated lending institution has

2 not demonstrated measurable improvement in com3 pliance despite the issuance of penalties under sub4 section (f),

5 the agency may require the regulated lending institution

6 to take such remedial actions as are necessary to ensure

7 that the regulated lending institution is in satisfactory

8 compliance with the requirements of the National Flood

9 Insurance Program.’’.

10 SEC. 208. FEDERAL FINANCIAL INSTITUTIONS EXAMINA11 TION COUNCIL.

12 Section 1006 of the Federal Financial Institutions

13 Examination Council Act of 1978 (12 U.S.C. 3305) is

14 amended by adding at the end the following new sub15 section:

16 ‘‘(g) FLOOD INSURANCE.—The Council shall consult

17 with and assist the Federal entities for lending regulation,

18 as such term is defined in section 1370(a)(7) of the Na19 tional Flood Insurance Act of 1968, in developing and co20 ordinating uniform standards and requirements for use by

21 regulated lending institutions under the National Flood

22 Insurance Program.’’.
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1 SEC. 209. CONFORMING AMENDMENT.

2 The section heading for section 102 of the Flood Dis3 aster Protection Act of 1973 (42 U.S.C. 4012a) is amend4 ed to read as follows:

5 ‘‘SEC. 102. FLOOD INSURANCE PURCHASE AND COMPLI6 ANCE REQUIREMENTS AND ESCROW AC7 COUNTS.’’.

8 TITLE III—RATINGS AND INCEN9 TIVES FOR COMMUNITY

10 FLOODPLAIN MANAGEMENT

11 PROGRAMS

12 SEC. 301. COMMUNITY RATING SYSTEM AND INCENTIVES

13 FOR COMMUNITY FLOODPLAIN MANAGE14 MENT.

15 (a) REQUIREMENT FOR PARTICIPATION IN FLOOD

16 INSURANCE PROGRAM.—Section 1315 of the National

17 Flood Insurance Act of 1968 (42 U.S.C. 4022) is amend18 ed—

19 (1) by striking ‘‘after December 31, 1971’’ and

20 inserting the following:

21 ‘‘(a) REQUIREMENT FOR PARTICIPATION IN FLOOD

22 INSURANCE PROGRAM.—After December 31, 1971’’; and

23 (2) by adding at the end the following new sub24 section:

25 ‘‘(b) COMMUNITY RATING SYSTEM AND INCENTIVES

26 FOR COMMUNITY FLOODPLAIN MANAGEMENT.—
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1 ‘‘(1) AUTHORITY AND GOALS.—The Director

2 shall carry out a community rating system program

3 (hereafter in this subsection referred to as the ‘pro4 gram’) which shall—

5 ‘‘(A) evaluate the measures adopted by

6 communities voluntarily participating in the

7 community rating system;

8 ‘‘(B) provide incentives for measures to re9 duce the risk of flood damage that exceed the

10 criteria set forth in section 1361;

11 ‘‘(C) encourage adoption of more effective

12 measures for floodplain and erosion manage13 ment; and

14 ‘‘(D) to promote the reduction of Federal

15 flood insurance losses.

16 ‘‘(2) INCENTIVES.—The program shall provide

17 incentives in the form of credits on premium rates

18 for flood insurance coverage in communities that the

19 Director determines have adopted and enforced

20 measures to reduce the risk of flood damage that ex21 ceed the criteria set forth in section 1361. In provid22 ing incentives under this paragraph, the Director

23 may provide for credits to flood insurance premium

24 rates in communities that the Director determines

25 have—
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1 ‘‘(A) implemented measures to enhance

2 floodplain management; and

3 ‘‘(B) adopted erosion control measures.

4 ‘‘(3) CREDITS.—The credits on premium rates

5 for flood insurance coverage shall be based on the

6 estimated reduction in flood damage risks resulting

7 from the measures adopted by the community under

8 this program, minus any funds received for mitiga9 tion assistance under section 1366. The Director

10 may also reduce such credits to recover the cost to

11 the Federal Government of expenditures for flood or

12 disaster relief to property owners who did not main13 tain flood insurance on structures in areas having

14 special flood hazards.’’.

15 (b) REPORTS.—Two years after the date of enact16 ment of this Act and biannually thereafter, the Director

17 shall submit a report to the Congress regarding the pro18 gram under section 1315(a) of the National Flood Insur19 ance Act of 1968. Each report shall include an analysis

20 of the cost-effectiveness and other accomplishments and

21 shortcomings of the program and any recommendations

22 of the Director for legislation regarding the program.
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1 SEC. 302. COMMUNITY EROSION HAZARD MANAGEMENT

2 PROGRAM.

3 Section 1315 of the National Flood Insurance Act

4 of 1968 (42 U.S.C. 4022), as amended by section 301,

5 is amended by adding at the end the following new sub6 section:

7 ‘‘(c) COMMUNITY EROSION HAZARD MANAGEMENT

8 PROGRAM.—

9 ‘‘(1) AUTHORITY AND GOALS.—The Director

10 shall carry out a community erosion hazard manage11 ment program (hereafter in this subsection referred

12 to as the ‘‘program’’) which shall—

13 ‘‘(A) assist communities having erosion

14 hazards to understand the nature and extent of

15 the erosion hazards and to develop a program

16 to manage erosion hazards;

17 ‘‘(B) provide incentives for communities to

18 voluntarily undertake measures to reduce the

19 risk of erosion-related flood damage; and

20 ‘‘(C) promote the reduction of Federal

21 flood insurance losses related to erosion haz22 ards.

23 ‘‘(2) DEVELOPMENT OF COMMUNITY EROSION

24 HAZARD MANAGEMENT PLAN.—In developing the

25 program, the Director shall meet with appropriate

26 representatives of communities with erosion hazards
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1 to discuss the nature and extent of the erosion haz2 ards in the community and the potential develop3 ment and implementation of an erosion hazard man4 agement plan, including—

5 ‘‘(A) the areas identified as having erosion

6 hazards;

7 ‘‘(B) the impact of the erosion hazards on

8 structures located in the erosion hazard areas

9 in the event of flooding;

10 ‘‘(C) the amount of any cross-subsidy

11 among flood insurance policyholders in the com12 munity as a result of the insured structures lo13 cated in erosion hazard areas; and

14 ‘‘(D) alternative cost-effective measures

15 available to the community to manage the ero16 sion hazards, including—

17 ‘‘(i) erosion control projects to reduce

18 or eliminate the risk of erosion-related

19 flood damage;

20 ‘‘(ii) the establishment of building

21 codes to protect structures from erosion-re22 lated flood damage;

23 ‘‘(iii) appropriate land use measures

24 to guide development away from erosion

25 hazards;
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1 ‘‘(iv) the relocation of structures at

2 risk of erosion-related flood damage; and

3 ‘‘(v) the elimination of any cross-sub4 sidy among flood insurance policyholders in

5 the community resulting in the assessment

6 of actuarial premium rates for new con7 struction in erosion hazard areas.

8 ‘‘(3) ELIGIBILITY FOR ASSISTANCE UNDER THE

9 STATE AND COMMUNITY MITIGATION ASSISTANCE

10 PROGRAM.—Communities voluntarily participating in

11 the program shall be eligible for technical and finan12 cial assistance under section 1367 for the develop13 ment and implementation of a community erosion

14 hazard management plan approved by the Director

15 that reduces the risk of erosion-related flood dam16 age.

17 ‘‘(4) INCENTIVES.—The program shall provide

18 incentives in the form of credits on premium rates

19 for insurance coverage in communities that the Di20 rector determines have adopted and enforced meas21 ures to reduce the risk of erosion-related flood dam22 age.

23 ‘‘(5) CREDITS.—The credits on premium rates

24 for flood insurance coverage under the program shall

25 be based on the estimated reduction in erosion-relat-
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1 ed flood damage risks resulting from the measures

2 adopted by the community under this program

3 minus any funds received for assistance under sec4 tion 1367.’’.

5 SEC. 303. FUNDING.

6 Section 1310(a) of the National Flood Insurance Act

7 of 1968 (42 U.S.C. 4017(a)) is amended—

8 (1) in paragraph (4), by striking ‘‘and’’ at the

9 end;

10 (2) in paragraph (5), by striking the period at

11 the end and inserting a semicolon; and

12 (3) by adding after paragraph (5) the following

13 new paragraph:

14 ‘‘(6) for carrying out the programs established

15 under subsections (b) and (c) of section 1315.’’.

16 TITLE IV—MITIGATION OF

17 FLOOD AND EROSION RISKS

18 SEC. 401. MITIGATION ASSISTANCE IN FEDERAL INSUR19 ANCE ADMINISTRATION.

20 Section 1105(a) of the Housing and Urban Develop21 ment Act of 1968 (42 U.S.C. 4129) is amended—

22 (1) by striking ‘‘(a) There is hereby’’ and in23 serting the following:

24 ‘‘(a) ESTABLISHMENT.—There is hereby’’; and
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1 (2) by striking subsection (b) and inserting the

2 following:

3 ‘‘(b) COORDINATION OF MITIGATION ACTIVITIES.—

4 The Director shall coordinate all mitigation activities, in5 cluding the administration of the program for mitigation

6 assistance under section 1367, under the Federal Insur7 ance Administrator. These activities shall include the de8 velopment and implementation of various mitigation ac9 tivities and techniques, the provision of advice and assist10 ance regarding mitigation to States, communities, and in11 dividuals, including planning assistance under section

12 1367(d), coordination with other Federal flood and erosion

13 mitigation efforts, and coordination with State and local

14 governments and public and private agencies and organi15 zations for collection and dissemination of information re16 garding erosion.’’.

17 SEC. 402. AUTHORIZATION OF NATIONAL FLOOD AND ERO18 SION MITIGATION FUNDS UNDER SECTION

19 1367.

20 (a) EXPENDITURES.—Chapter III of the National

21 Flood Insurance Act of 1968 (42 U.S.C. 4101 et seq.),

22 as amended by section 205, is amended by adding at the

23 end the following new section:
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1 ‘‘SEC. 1366. NATIONAL FLOOD AND EROSION MITIGATION

2 PROGRAM.

3 ‘‘For flood and erosion mitigation activities author4 ized under section 1367, the Director may expend from

5 the National Flood Insurance Fund—

6 ‘‘(1) up to $10,000,000 in the fiscal year end7 ing September 30, 1994;

8 ‘‘(2) up to $15,000,000 in the fiscal year end9 ing September 30, 1995;

10 ‘‘(3) up to $20,000,000 in the fiscal year end11 ing September 30, 1996;

12 ‘‘(4) up to $20,000,000 in each fiscal year

13 thereafter; and

14 ‘‘(5) any amounts recaptured under section

15 1367(i).’’.

16 (b) REPORT.—Not later than 1 year after the date

17 of enactment of this Act and biannually thereafter, the

18 Director shall submit a report to the Congress describing

19 the status of flood and erosion mitigation activities carried

20 out with funds authorized under section 1366 of the Na21 tional Flood Insurance Act of 1968, as added by sub22 section (a).

23 SEC. 403. STATE AND COMMUNITY MITIGATION ASSIST24 ANCE PROGRAM.

25 (a) IN GENERAL.—Chapter III of the National Flood

26 Insurance Act of 1968 (42 U.S.C. 4101 et seq.), as
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1 amended by sections 205 and 402, is amended by adding

2 at the end the following new section:

3 ‘‘SEC. 1367. MITIGATION ASSISTANCE FOR STATES, COMMU4 NITIES, AND INDIVIDUALS.

5 ‘‘(a) AUTHORITY.—The Director shall develop and

6 implement a financial assistance program with amounts

7 made available under section 1366 to States, communities,

8 and individuals for planning and activities designed to re9 duce the risk of flood and erosion damage to insured struc10 tures.

11 ‘‘(b) REQUIREMENT FOR MITIGATION PLAN OR AP12 PLICATION.—

13 ‘‘(1) STATES AND COMMUNITIES.—To be eligi14 ble to receive financial mitigation assistance, a State

15 or community shall develop, and have approved by

16 the Director, a flood and erosion risk mitigation

17 plan (hereafter in this section referred to as a ‘miti18 gation plan’), that is more protective against flood

19 losses than the criteria established by the Director

20 under section 1361. The mitigation plan shall in21 clude a comprehensive strategy for mitigation activi22 ties adopted by the State or community following a

23 public hearing.
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1 ‘‘(2) INDIVIDUALS.—For an individual to be eli2 gible to receive financial mitigation assistance for a

3 property—

4 ‘‘(A) the property shall have been continu5 ously covered by a contract for flood insurance

6 under this title for the preceding 24 months;

7 and

8 ‘‘(B) the individual shall submit, and have

9 approved by the Director, an application for

10 such assistance, as the Director shall require.

11 ‘‘(c) NOTIFICATION OF APPROVAL.—Not later than

12 120 days after the submission of a mitigation plan or ap13 plication, the Director shall notify the State, community,

14 or individual submitting the plan or application of the Di15 rector’s approval or disapproval of the plan or application.

16 If the Director does not approve a plan or application, the

17 Director shall notify the State, community, or individual

18 in writing of the reasons for such disapproval.

19 ‘‘(d) PLANNING ASSISTANCE.—

20 ‘‘(1) IN GENERAL.—The Director shall make

21 planning assistance available to States and commu22 nities for developing mitigation plans.

23 ‘‘(2) FUNDING.—From any amounts made

24 available for use under section 1366 of the National

25 Flood Insurance Act of 1968 in any fiscal year, the
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1 Director may use not more than $1,500,000 to pro2 vide planning assistance grants to States or commu3 nities to develop mitigation plans under this sub4 section.

5 ‘‘(3) LIMITATIONS.—

6 ‘‘(A) TIMING.—A grant for planning as7 sistance may be awarded to a State or commu8 nity once every 5 years and each grant may

9 cover a period of 1 to 3 years.

10 ‘‘(B) AMOUNT.—A grant for planning as11 sistance may not exceed—

12 ‘‘(i) $150,000, to any State; or

13 ‘‘(ii) $50,000, to any community.

14 ‘‘(C) GEOGRAPHIC.—Not more than

15 $300,000 may be awarded to any 1 State and

16 all communities located in that State for plan17 ning assistance in each fiscal year.

18 ‘‘(e) ELIGIBLE MITIGATION ACTIVITIES.—The Direc19 tor shall determine eligibility for assistance under this sec20 tion for mitigation activities that shall be technically fea21 sible and cost-effective. These activities may include—

22 ‘‘(1) elevation, relocation, demolition, or

23 floodproofing of structures;
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1 ‘‘(2) the construction, repair, or restoration of

2 levees, seawalls, and other structures that reduce the

3 risk of flood damage;

4 ‘‘(3) erosion control measures including beach

5 nourishment;

6 ‘‘(4) acquisition by States and communities of

7 property substantially damaged by flood for public

8 use as the Director determines is consistent with

9 sound land management and use in such area; and

10 ‘‘(5) provision of technical assistance by States

11 to communities and individuals to conduct eligible

12 mitigation activities.

13 The Director may provide assistance under this section to

14 an individual for mitigation activities under this sub15 section only if the activities proposed in the application

16 are consistent with any applicable land use and control

17 measures adopted by the appropriate public body under

18 section 1315 and any applicable mitigation plan.

19 ‘‘(f) LIMITATIONS ON MITIGATION ASSISTANCE.—

20 ‘‘(1) AMOUNT.—The amount of mitigation as21 sistance provided under subsection (e) may not ex22 ceed in any 5-year period—

23 ‘‘(A) $10,000,000, to any State; or

24 ‘‘(B) $3,300,000, to any community.
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1 ‘‘(2) GEOGRAPHIC.—Not more than

2 $20,000,000 may be awarded to any 1 State and all

3 communities located in that State for mitigation as4 sistance in any 5-year period.

5 ‘‘(3) TREATMENT OF ASSISTANCE FOR INDIVID6 UALS.—The amount of mitigation assistance pro7 vided under subsection (e) to any individual shall be

8 included, for purposes of the dollar amount limita9 tions under paragraphs (1) and (2) of this sub10 section, in the amount of assistance provided to the

11 State and community within which is located the

12 property for which the grant is made.

13 ‘‘(g) MATCHING REQUIREMENT.—The Director may

14 provide mitigation assistance to a State or community in

15 an amount not to exceed 3 times the amount that the

16 State or community certifies, as the Director shall require,

17 that the State or community will contribute from other

18 funds to carry out mitigation planning under subsection

19 (d) and eligible activities under subsection (e).

20 ‘‘(h) OVERSIGHT OF MITIGATION PLANS AND APPLI21 CATIONS.—The Director shall conduct oversight of recipi22 ents of mitigation assistance to ensure that the mitigation

23 assistance is used in compliance with approved plans and

24 applications.
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1 ‘‘(i) RECAPTURE.—If the Director determines that a

2 State, community, or individual that has received mitiga3 tion assistance has not carried out the mitigation activities

4 as set forth in the mitigation plan or application, the Di5 rector shall recapture any unexpended amounts and de6 posit the amounts in the Fund.

7 ‘‘(j) DEFINITION OF COMMUNITY.—For purposes of

8 this section, the term ‘community’ means a political sub9 division that has zoning and building code jurisdiction over

10 a particular area having special flood hazards, and that

11 is participating in the National Flood Insurance Program.

12 ‘‘(k) PREFERENCES FOR MITIGATION GRANTS TO

13 COMMUNITIES.—

14 ‘‘(1) COST-BENEFICIALNESS.—In providing

15 mitigation grants to communities under this section,

16 the Director shall give preference to communities

17 and individuals with mitigation plans that are the

18 most cost-beneficial to the National Flood Insurance

19 Program.

20 ‘‘(2) ADDITIONAL OPTIONAL CRITERIA.—Sub21 ject to paragraph (1), in providing mitigation grants

22 to communities under this section, the Director may

23 give preference to communities that—
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1 ‘‘(A) have the highest rates of participation

2 by property owners in the National Flood

3 Insurance Program;

4 ‘‘(B) have qualified for credits on premium

5 rates under section 1315(b); and

6 ‘‘(C) have experienced repetitive losses that

7 have been most costly to the Fund.’’.

8 (b) REGULATIONS.—Not later than 6 months after

9 date of enactment of this Act, the Director shall issue reg10 ulations implementing section 1367 of the National Flood

11 Insurance Act of 1968, as added by subsection (a).

12 SEC. 404. REPEAL OF PROGRAM FOR PURCHASE OF CER13 TAIN INSURED PROPERTIES.

14 (a) REPEAL.—Section 1362 of the National Flood In15 surance Act of 1968 (42 U.S.C. 4103) is repealed.

16 (b) TRANSITION.—Notwithstanding the repeal under

17 subsection (a), the Director may continue to purchase

18 property under subsections (a) and (b) of section 1362

19 of the National Flood Insurance Act of 1968, as such sec20 tion existed immediately before the date of enactment of

21 this Act, for a period of 1 year beginning on the date of

22 enactment of this Act.
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1 SEC. 405. TERMINATION OF EROSION THREATENED STRUC2 TURES PROGRAM.

3 (a) IN GENERAL.—Section 1306 of the National

4 Flood Insurance Act of 1968 (42 U.S.C. 4013) is amended

5 by striking subsection (c).

6 (b) TRANSITION.—The Director may pay amounts

7 under flood insurance contracts for demolition or reloca8 tion of structures as provided in section 1306(c) of the

9 National Flood Insurance Act of 1968 (as in effect imme10 diately before the date of enactment of this Act) only dur11 ing the 1-year period beginning on the date of enactment

12 of this Act.

13 TITLE V—TASK FORCE, ADVI14 SORY COUNCIL, AND STUDIES

15 SEC. 501. FLOOD INSURANCE INTERAGENCY TASK FORCE.

16 (a) ESTABLISHMENT.—There is established an inter17 agency task force to be known as the Flood Insurance

18 Task Force (hereafter in this title referred to as the ‘‘Task

19 Force’’).

20 (b) MEMBERSHIP.—

21 (1) IN GENERAL.—The Task Force shall con22 sist of 13 members, who shall be the designees of—

23 (A) the Director;

24 (B) the Federal Housing Commissioner;

25 (C) the Secretary of Veterans Affairs;
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1 (D) the Administrator of the Farmers

2 Home Administration;

3 (E) the Administrator of the Small Busi4 ness Administration;

5 (F) each member of the Federal Financial

6 Institutions Examination Council;

7 (G) the chairman of the Board of Direc8 tors of the Federal Home Loan Mortgage Cor9 poration;

10 (H) the chairman of the Board of Direc11 tors of the Federal National Mortgage Associa12 tion; and

13 (I) the chairman of the Federal Agricul14 tural Mortgage Corporation.

15 (2) QUALIFICATIONS.—Members of the Task

16 Force shall be designated for membership on the

17 Task Force by reason of demonstrated knowledge

18 and competence regarding the National Flood Insur19 ance Program.

20 (c) DUTIES.—The Task Force shall—

21 (1) make recommendations to the head of each

22 Federal agency and corporation referred to under

23 subsection (b)(1) regarding the establishment or

24 adoption of standardized enforcement procedures

25 among such agencies and corporations responsible
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1 for enforcing compliance with the requirements

2 under the National Flood Insurance Program to en3 sure the fullest possible compliance with such re4 quirements;

5 (2) study the extent to which Federal agencies

6 and the secondary mortgage market can provide as7 sistance in ensuring compliance with the require8 ments under the National Flood Insurance Program;

9 (3) study the extent to which existing programs

10 of Federal agencies and corporations for compliance

11 with the requirements under the National Flood In12 surance Program can serve as a model for other

13 Federal agencies responsible for enforcing compli14 ance, and submit to the Congress a report describing

15 the study and any conclusions;

16 (4) study—

17 (A) the extent to which the flood insurance

18 premium rate structure could be revised, con19 sistent with the goal of providing affordable

20 flood insurance, to minimize existing premium

21 rate subsidies, and account for catastrophic loss

22 events; and

23 (B) how changes in the premium rate

24 structure could potentially impact other Federal

25 disaster assistance programs;
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1 (5) propose strategies, consistent with the goal

2 of providing affordable flood insurance, to establish

3 an actuarial-based premium structure to account for

4 all insurable flood-related risks identified under the

5 National Flood Insurance Act of 1968, as amended

6 by this Act; and

7 (6) develop guidelines regarding enforcement

8 and compliance procedures, based on the studies and

9 findings of the Task Force and publishing the guide10 lines in a usable format.

11 (d) REPORTS.—Not later than 2 years after the date

12 of enactment of this Act, the Task Force shall transmit

13 to the Congress a report describing its studies and any

14 conclusions.

15 (e) COMPENSATION.—Members of the Task Force

16 shall receive no additional compensation by reason of their

17 service on the Task Force.

18 (f) CHAIRPERSON.—The members of the Task Force

19 shall elect 1 member to serve as the chairperson of the

20 Task Force (hereafter in this section referred to as the

21 ‘‘Chairperson’’).

22 (g) MEETINGS AND ACTION.—The Task Force shall

23 meet at the call of the Chairperson or a majority of the

24 members of the Task Force and may take action by a vote

25 of the majority of the members. The Federal Insurance
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1 Administrator shall coordinate and call the initial meeting

2 of the Task Force.

3 (h) OFFICERS.—The Chairperson may appoint offi4 cers to carry out the duties of the Task Force under sub5 section (c).

6 (i) STAFF OF FEDERAL AGENCIES.—Upon the re7 quest of the Chairperson, the head of any of the Federal

8 agencies and corporations referred to in subsection (b)(1)

9 may detail, on a nonreimbursable basis, any of the person10 nel of the agency to the Task Force to assist the Task

11 Force in carrying out its duties under this Act.

12 (j) POWERS.—In carrying out this section, the Task

13 Force may hold hearings, sit and act at times and places,

14 take testimony, receive evidence and assistance, provide

15 information, and conduct research as the Task Force con16 siders appropriate.

17 (k) TERMINATION.—The Task Force shall terminate

18 2 years after the date on which all members of the Task

19 Force have been designated under subsection (b)(1).

20 SEC. 502. TECHNICAL MAPPING ADVISORY COUNCIL.

21 (a) ESTABLISHMENT.—There is established a council

22 to be known as the Technical Mapping Advisory Council

23 (hereafter in this section referred to as the ‘‘Council’’).

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

2 the Director, or the Director’s designee, and 12 ad3 ditional members to be appointed by the Director or

4 his designee, and shall include—

5 (A) the Under Secretary of Commerce for

6 Oceans and Atmosphere (or his or her des7 ignee);

8 (B) a member of recognized surveying and

9 mapping professional associations and organiza10 tions;

11 (C) a member of recognized professional

12 engineering associations and organizations;

13 (D) a member of recognized professional

14 associations or organizations representing flood

15 hazard determination firms;

16 (E) a representative of the United States

17 Geologic Survey;

18 (F) a representative of State geologic sur19 vey programs;

20 (G) a representative of State national flood

21 insurance coordination offices;

22 (H) a representative of the Federal Na23 tional Mortgage Association and the Federal

24 Home Loan Mortgage Corporation; and
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1 (I) a representative of a regulated lending

2 institution.

3 (2) QUALIFICATIONS.—Members of the Council

4 shall be appointed based on their demonstrated

5 knowledge and competence regarding surveying, car6 tography, remote sensing, geographic information

7 systems, or the technical aspects of preparing and

8 using flood insurance rate maps.

9 (c) DUTIES.—The Council shall—

10 (1) make recommendations to the Director on

11 how to improve in a cost-effective manner the accu12 racy, general quality, ease of use, and distribution

13 and dissemination of flood insurance rate maps;

14 (2) recommend to the Director mapping stand15 ards and guidelines for flood insurance rate maps;

16 and

17 (3) transmit an annual report to the Director

18 describing—

19 (A) the activities of the Council;

20 (B) an evaluation of the status and per21 formance of flood insurance rate maps and

22 mapping activities to update and revise flood in23 surance rate maps as established by the amend24 ments made under section 604; and
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1 (C) a summary of recommendations made

2 by the Council to the Director.

3 (d) CHAIRPERSON.—The members of the Council

4 shall elect 1 member to serve as the chairperson of the

5 Council (hereafter in this section referred to as the

6 ‘‘Chairperson’’).

7 (e) COORDINATION.—To ensure that the Council’s

8 recommendations are consistent to the maximum extent

9 practicable with national digital spatial data collection and

10 management standards, the Chairperson shall consult with

11 the Chairperson of the Federal Geographic Data Commit12 tee (established pursuant to OMB Circular A–16).

13 (f) COMPENSATION.—Members of the Council shall

14 receive no additional compensation by reason of their serv15 ice on the Council.

16 (g) MEETINGS AND ACTIONS.—

17 (1) IN GENERAL.—The Council shall meet not

18 less than twice each year at the request of the

19 Chairperson or a majority of its members and may

20 take action by a vote of the majority of the mem21 bers.

22 (2) INITIAL MEETING.—The Director, or a per23 son designated by the Director, shall request and co24 ordinate the initial meeting of the Council.
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1 (h) OFFICERS.—The Chairperson may appoint offi2 cers to assist in carrying out the duties of the Council

3 under subsection (c).

4 (i) STAFF OF THE FEDERAL EMERGENCY MANAGE5 MENT AGENCY.—Upon the request of the Chairperson,

6 the Director may detail, on a nonreimbursable basis, per7 sonnel of the Federal Emergency Management Agency to

8 assist the Council in carrying out its duties.

9 (j) POWERS.—In carrying out this section, the Coun10 cil may hold hearings, receive evidence and assistance, pro11 vide information, and conduct research as it considers ap12 propriate.

13 (k) TERMINATION.—The Council shall terminate 5

14 years after the date on which all members of the Council

15 have been appointed under subsection (b)(1).

16 SEC. 503. ECONOMIC IMPACT STUDY OF EROSION HAZARD

17 AREAS.

18 (a) REPORT TO CONGRESS.—Not later than 3 years

19 after the date of enactment of this Act, the Director shall

20 submit to the Congress a report assessing the economic

21 impact of the denial of flood insurance and the establish22 ment of actuarial rates on communities that are likely to

23 be identified as having erosion hazard areas. The report

24 shall include—
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1 (1) a listing of all communities that are likely

2 to be identified having an erosion hazard area;

3 (2) an independent assessment, after consulta4 tion with such communities, of the economic impact

5 of the denial of flood insurance for new construction

6 and the assessment of actuarial rates in the erosion

7 hazard areas, including the impact on—

8 (A) the value of residential and commercial

9 properties in the erosion hazard area;

10 (B) community tax revenues due to

11 changes in property values or commercial activ12 ity;

13 (C) employment, including the potential

14 loss of existing and new jobs in the community;

15 (D) existing businesses and future eco16 nomic development; and

17 (E) the estimated cost of Federal and

18 State disaster assistance to flood victims that

19 would have otherwise been insured by available

20 and affordable flood insurance;

21 (3) an estimate of the cross-subsidy of insur22 ance premiums in such communities, and the impact

23 of eliminating the cross-subsidy on those commu24 nities and the financial condition of the National

25 Flood Insurance Fund;
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1 (4) the estimated savings to the National Flood

2 Insurance Program likely to result from expending

3 $25,000,000 from the National Flood Insurance

4 Fund to map erosion hazard areas; and

5 (5) an assessment of the need for the develop6 ment of a Community Erosion Hazard Management

7 Program and, if needed, recommendations consistent

8 with the goal of providing affordable flood insurance

9 protection under the National Flood Insurance Pro10 gram, which would minimize the economic impact on

11 communities assessed under paragraph (2).

12 (b) DEFINITION OF EROSION HAZARD AREA.—For

13 the purposes of this section, the term ‘‘erosion hazard

14 area’’ means, based on erosion rate information and other

15 historical data available, an area where erosion or avulsion

16 is likely to result in damage to or loss of buildings and

17 infrastructure during a 60-year period.

18 (c) AUTHORIZATION OF APPROPRIATION.—There are

19 authorized to be appropriated to the Director $1,000,000

20 to carry out this section.
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1 SEC. 504. JUSTIFICATION FOR GOVERNMENT OPERATION

2 OF THE NATIONAL FLOOD INSURANCE

3 PROGRAM AND DETERMINATION OF THE

4 FEASIBILITY AND AVAILABILITY OF PRIVATE

5 SECTOR FLOOD INSURANCE COVERAGE.

6 (a) REPORT TO CONGRESS.—Not later than 3 years

7 after the date of enactment of this Act, the Director shall

8 submit to the Congress a report containing—

9 (1) a determination of whether or not it would

10 be feasible for the National Flood Insurance Pro11 gram, as established under the National Flood In12 surance Act of 1968, to be administered by the pri13 vate insurance industry in accordance with part A of

14 chapter II of such Act and recommendations for

15 modifications to the program to facilitate adminis16 tration by the private insurance industry;

17 (2) if applicable, the reasons and justification,

18 in accordance with section 1340 of the National

19 Flood Insurance Act of 1968, for a determination

20 that the operation of the National Flood Insurance

21 Program cannot be carried out without the Federal

22 Government’s assumption of the operational respon23 sibility for flood insurance under the National Flood

24 Insurance Act of 1968;

25 (3) the estimated impact on the availability and

26 affordability of flood insurance if the National Flood
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1 Insurance Program were to be administered by the

2 private insurance industry;

3 (4) the estimated impact on the cost and effi4 ciency of other Federal emergency management pro5 grams, including Federal disaster assistance, if the

6 National Flood Insurance Program were to be ad7 ministered by the private insurance industry;

8 (5) the effect of the Federal Government’s as9 sumption of the operational responsibility for flood

10 insurance on the availability and affordability of pri11 vate flood insurance coverage; and

12 (6) the availability and cost of private flood in13 surance in each of the communities participating in

14 the National Flood Insurance Program, including a

15 directory of private sector insurance providers.

16 TITLE VI—MISCELLANEOUS

17 PROVISIONS

18 SEC. 601. MAXIMUM FLOOD INSURANCE COVERAGE

19 AMOUNTS.

20 (a) IN GENERAL.—Section 1306(b) of the National

21 Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is

22 amended—

23 (1) in paragraph (1)(A)—

24 (A) by inserting ‘‘and’’ at the end of clause

25 (i); and
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1 (B) by striking clause (iii);

2 (2) by striking subparagraph (B) of paragraph

3 (1) and inserting the following new subparagraph:

4 ‘‘(B) in the case of any nonresidential

5 property, including churches—

6 ‘‘(i) $100,000 aggregate liability for

7 each structure; and

8 ‘‘(ii) $100,000 aggregate liability for

9 any contents related to each structure;’’;

10 (3) by striking subparagraph (C) of paragraph

11 (1);

12 (4) in paragraph (2), by striking ‘‘so as to en13 able’’ and all that follows through the end of the

14 paragraph and inserting ‘‘up to an amount, includ15 ing the limits specified in clause (i) of paragraph

16 (1)(A), of $250,000 multiplied by the number of

17 dwelling units in the building;’’;

18 (5) in paragraph (3), by striking ‘‘so as to en19 able’’ and all that follows through the end of the

20 paragraph and inserting ‘‘up to an amount, includ21 ing the limits specified in clause (ii) of paragraph

22 (1)(A), of $100,000 for any single-family dwelling

23 and $250,000 for any residential structure contain24 ing more than one dwelling unit;’’; and
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1 (6) by striking paragraph (4) and inserting the

2 following new paragraph:

3 ‘‘(4) in the case of any nonresidential property,

4 including churches, additional flood insurance in ex5 cess of the limits specified in clauses (i) and (ii) of

6 paragraph (1)(B) shall be made available to every

7 insured upon renewal and every applicant for insur8 ance up to an amount, including the limits specified

9 in paragraph (1)(B), of $2,400,000 for each struc10 ture and $2,400,000 for any contents related to each

11 structure; and’’.

12 (b) ACTUARIAL RISK PREMIUMS ON REPETITIVE

13 LOSS STRUCTURES.—Section 1306(b) of the National

14 Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is

15 amended—

16 (1) in paragraph (5), by striking ‘‘and’’ at the

17 end;

18 (2) in paragraph (6), by striking the period at

19 the end and inserting a semicolon; and

20 (3) by adding at the end the following new

21 paragraph:

22 ‘‘(7) upon determining that a property is a re23 petitive loss structure, and after making a payment

24 to the insured under section 1304(e), the Director

25 shall charge the applicable risk premium rate for
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1 flood insurance based on consideration of the risk in2 volved and accepted actuarial principles under sec3 tion 1307(a)(1), except that the Director may not

4 increase the premium rate above the level authorized

5 in paragraph (7); and’’.

6 (c) ANNUAL 10-PERCENT PREMIUM RATE INCREASE

7 CAP.—Section 1306(b) of the National Flood Insurance

8 Act of 1968 (42 U.S.C. 4013(b)) is amended by adding

9 at the end the following:

10 ‘‘(8) the Director may not increase the pre11 mium rate applied to a structure in any 12-month

12 period by more than 10 percent over the rate pre13 viously applied to that structure during the preced14 ing 12-month period.’’.

15 (d) CONFORMING AMENDMENTS.—Section

16 1306(b)(5) of the National Flood Insurance Act of 1968

17 (42 U.S.C. 4013(b)(5)) is amended—

18 (1) by striking ‘‘(A), (B), or (C)’’ and inserting

19 ‘‘(A) or (B)’’; and

20 (2) by striking ‘‘(1)(C),’’.

21 SEC. 602. ADDITIONAL COVERAGE FOR COMPLIANCE WITH

22 LAND USE AND CONTROL MEASURES.

23 (a) IN GENERAL.—Section 1304(e) of the National

24 Flood Insurance Act of 1968 (42 U.S.C. 4011(a)) is

25 amended by inserting before the period ‘‘, including the
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1 cost of compliance with land use and control measures for

2 properties that are repetitive loss structures or that have

3 flood damage in which the cost of repairs equals or exceeds

4 50 percent of the value of the structure at the time of

5 the flood event. The Director shall impose a uniform sur6 charge on each insured of not more than $30 per policy

7 to provide cost of compliance coverage under this section’’.

8 (b) APPLICABILITY.—The provisions of subsection

9 (a) shall apply only to structures that sustain flood-related

10 damage after the date of enactment of this Act.

11 (c) REPORT.—Not later than 5 years after the date

12 of enactment of this Act, the Director shall submit a re13 port to the Congress describing the activities undertaken

14 to provide insurance coverage for the cost of compliance

15 with land use and control measures under subsection (a).

16 Such report shall evaluate the costs and savings to the

17 National Flood Insurance Program resulting from provid18 ing this additional coverage.

19 SEC. 603. FLOOD INSURANCE PROGRAM ARRANGEMENTS

20 WITH PRIVATE INSURANCE ENTITIES.

21 Section 1345(b) of the National Flood Insurance Act

22 of 1968 (42 U.S.C. 4081(b)) is amended by striking the

23 period at the end and inserting the following: ‘‘and without

24 regard to the provisions of the Federal Advisory Commit25 tee Act.’’.
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1 SEC. 604. UPDATING OF FLOOD INSURANCE MAPS AND

2 IDENTIFICATION OF EROSION HAZARD

3 AREAS.

4 Section 1360 of the National Flood Insurance Act of

5 1968 (42 U.S.C. 4101) is amended by adding at the end

6 the following new subsections:

7 ‘‘(e) ASSESSMENT OF NEED TO UPDATE AREAS.—

8 (1) Once during each 5-year period (the 1st such period

9 beginning on the date of enactment of the National Flood

10 Insurance Program Improvement Act of 1994), or more

11 often as the Director determines necessary, the Director

12 shall assess the need to revise and update the flood insur13 ance rate map.

14 ‘‘(2) Upon the request of a State or community stat15 ing that a flood insurance rate map needs revision or up16 dating, the Director shall review and update the flood in17 surance rate map for the State or community. The Direc18 tor may require the State or community to pay a portion

19 of the cost of updating the map.

20 ‘‘(f) AVAILABILITY.—To promote compliance with the

21 requirements of this title, the Director shall make flood

22 insurance rate maps and related information available free

23 of charge to Federal agencies and to State agencies di24 rectly responsible for coordinating the National Flood In25 surance Program and to appropriate representatives of

26 communities participating in the National Flood Insur-
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1 ance Program, and at a reasonable cost to all other per2 sons pursuant to section 1310.

3 ‘‘(g) NOTIFICATION.—The Director shall publish in

4 the Federal Register or by other comparable method, no5 tices of changes to flood insurance map panels, and

6 changes to flood insurance map panels issued in the form

7 of Letters of Map Amendment and Letters of Map Revi8 sion. The map change or revision shall become effective

9 upon publication. Such comparable methods shall include

10 all pertinent information, provide for regular and frequent

11 distribution, and be at least as accessible to map users

12 as the Federal Register. Notices published in the Federal

13 Register, or otherwise, shall also include information on

14 how to obtain copies of the changes or revisions.

15 ‘‘(h) AVAILABILITY.—On March 1 and October 1 of

16 each year, the Director shall publish separately and make

17 available in their entirety within a compendium, all

18 changes and revisions to flood insurance map panels and

19 all Letters of Map Amendment and Letters of Map Revi20 sion that were published in the Federal Register or distrib21 uted through other comparable methods during the pre22 ceding 6 months, free of charge, to Federal agencies,

23 States, and communities participating in the National

24 Flood Insurance Program pursuant to section 1310 and

25 at cost to all other persons.’’.
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1 SEC. 605. AGRICULTURAL STRUCTURES.

2 Section 1361 of the National Flood Insurance Act of

3 1968 (42 U.S.C. 4102) is amended by adding at the end

4 the following new subsection:

5 ‘‘(d) AGRICULTURAL STRUCTURES.—

6 ‘‘(1) EXEMPTION FROM FLOODWAY ACTIVITY

7 RESTRICTIONS.—Notwithstanding any other provi8 sion of law, the adequate land use and control meas9 ures adopted in an area (or subdivision thereof) pur10 suant to section 1315(a) may provide, at the discre11 tion of the appropriate State or local authority, for

12 the repair and restoration to pre-damaged conditions

13 of an agricultural structure that—

14 ‘‘(A) is a repetitive loss structure; or

15 ‘‘(B) has incurred flood-related damage to

16 the extent that the cost of restoring the struc17 ture to its pre-damaged condition would equal

18 or exceed 50 percent of the market value of the

19 structure before the damage occurred.

20 ‘‘(2) DEFINITIONS.—For purposes of this sub21 section—

22 ‘‘(A) the term ‘agricultural structure’

23 means any structure used exclusively in connec24 tion with the production, harvesting, storage,

25 raising, or drying of agricultural commodities;

26 and
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1 ‘‘(B) the term ‘agricultural commodities’

2 means agricultural commodities and livestock.’’.

3 SEC. 606. FUNDING FOR INCREASED ADMINISTRATIVE AND

4 OPERATIONAL RESPONSIBILITIES.

5 (a) AVAILABILITY OF FUND.—Section 1310(a) of the

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

7 4017(a)), as amended by section 303, is amended—

8 (1) in the matter preceding paragraph (1), by

9 inserting ‘‘(except as otherwise provided)’’ after

10 ‘‘without fiscal year limitation’’;

11 (2) in paragraph (6), as added by section 303

12 of this Act, by striking the period at the end and in13 serting ‘‘; and’’; and

14 (3) by adding at the end the following new

15 paragraph:

16 ‘‘(7) for revising and updating flood insurance

17 rate maps under section 1360(i), except that the

18 fund shall be available for the purpose under this

19 paragraph in an amount not to exceed $2,000,000,

20 in each fiscal year beginning after the expiration of

21 the 2-year period beginning on the date of enact22 ment of the National Flood Insurance Program Im23 provement Act of 1994.’’.
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1 (b) CREDITS OF FUND.—Section 1310(b) of the Na2 tional Flood Insurance Act of 1968 (42 U.S.C. 4017(b))

3 is amended—

4 (1) in paragraph (5), by striking ‘‘and’’ at the

5 end;

6 (2) by redesignating paragraph (6) as para7 graph (7); and

8 (3) by inserting after paragraph (5) the follow9 ing new paragraph:

10 ‘‘(6) any penalties collected under section

11 102(f) of the Flood Disaster Protection Act of 1973;

12 and’’.

13 SEC. 607. SEPARATE ACCOUNT FOR FLOOD INSURANCE

14 FUND.

15 Section 1310(a) of the National Flood Insurance Act

16 (42 U.S.C. 4017(a)) is amended by inserting before

17 ‘‘which shall be available’’ the following: ‘‘which shall be

18 maintained in the Treasury as an account separate from

19 any other funds available to the Director, and’’.

20 SEC. 608. NONWAIVER OF FLOOD PURCHASE REQUIRE21 MENT FOR RECIPIENTS OF FEDERAL DISAS22 TER ASSISTANCE.

23 Section 311(b) of the Robert T. Stafford Disaster Re24 lief and Emergency Assistance Act (42 U.S.C. 5154(b))

25 is amended by adding at the end the following: ‘‘The re-
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1 quirements of this subsection may not be waived under

2 section 301.’’.

3 SEC. 609. INSURANCE WAITING PERIOD.

4 Section 1308 of the National Flood Insurance Act of

5 1968 (42 U.S.C. 4014) is amended by adding at the end

6 the following new subsection:

7 ‘‘(e)(1) The Director shall establish a waiting period

8 of not less than 10 days from the presentment of payment

9 of a premium for the initial purchase of flood insurance

10 under this title. Flood insurance coverage shall not be

11 available with respect to any claim for damage incurred

12 during such waiting period.

13 ‘‘(2) This subsection shall not apply to the initial pur14 chase of flood insurance under this title when the purchase

15 of insurance is in connection with the making, increasing,

16 extension, or renewal of a loan.’’.

17 SEC. 610. IMPLEMENTATION REVIEW BY THE DIRECTOR.

18 Section 1320 of the National Flood Insurance Act of

19 1968 (42 U.S.C. 4027) is amended—

20 (1) by striking ‘‘The Director’’ and inserting

21 the following:

22 ‘‘(a) IN GENERAL.—The Director’’; and

23 (2) by adding at the end the following new sub24 section:
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1 ‘‘(b) EFFECTS OF FLOOD INSURANCE PROGRAM.—

2 The Director shall include, as part of the biennial report

3 submitted under subsection (a), a chapter reporting on the

4 effects on the flood insurance program observed through

5 implementation of requirements under the National Flood

6 Insurance Program Improvement Act of 1994.’’.

7 SEC. 611. REGULATIONS.

8 The Director and the head of any appropriate Fed9 eral agency may each issue any regulations necessary to

10 carry out the applicable provisions of this Act and the ap11 plicable amendments made by this Act.

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