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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4125 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4125

    To improve the national flood insurance program to increase the 
 stability of the National Flood Insurance Fund through improved risk 
management, enhanced compliance, and incentives for mitigation, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 24, 1994

Mr. Hughes (for himself and Mr. Saxton) 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 to increase the 
 stability of the National Flood Insurance Fund through improved risk 
management, enhanced compliance, and incentives for mitigation, 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 ``Flood Insurance 
Risk Management Act of 1994''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Definitions.
            TITLE I--COMPLIANCE AND INCREASED PARTICIPATION

Sec. 101. Existing flood insurance purchase requirements.
Sec. 102. Expanded flood insurance purchase requirements.
Sec. 103. Escrow of flood insurance payments.
Sec. 104. Placement of flood insurance by lenders.
Sec. 105. Penalties for failure to require flood insurance or notify.
Sec. 106. Ongoing compliance with flood insurance purchase 
                            requirements.
Sec. 107. Fees for determining applicability of flood insurance 
                            purchase requirements.
Sec. 108. Notice requirements.
Sec. 109. Standard hazard determination forms.
Sec. 110. Examinations regarding compliance.
Sec. 111. Financial Institutions Examination Council.
Sec. 112. Clerical amendments.
      TITLE II--FLOOD INSURANCE PREMIUM RATES AND COVERAGE AMOUNTS

Sec. 201. Preference for charging actuarial rates.
Sec. 202. Community rating system and incentives for flood damage 
                            mitigation measures.
Sec. 203. Community premium-pooling program.
Sec. 204. Maximum flood insurance coverage amounts.
Sec. 205. Study of economic effects of charging actuarially-based 
                            premium rates for pre-firm structures.
Sec. 206. GAO study of economic impact of erosion hazard areas.
TITLE III--REVOLVING LOAN FUND FOR FLOOD AND EROSION DAMAGE MITIGATION 
             ACTIVITIES AND ADDITIONAL MITIGATION COVERAGE

Sec. 301. Flood and Erosion Risk Management Fund.
Sec. 302. Flood insurance premium surcharges.
Sec. 303. Additional coverage for mitigation activities.
                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Extension of flood insurance program.
Sec. 402. Termination of erosion-threatened structures program.
Sec. 403. Limitations on claims for repetitively damaged structures.
Sec. 404. Penalties for repetitive claims.
Sec. 405. Flood insurance program arrangements with private insurance 
                            entities.
Sec. 406. Authorization of appropriations.

SEC. 2. DEFINITIONS.

    (a) Flood Disaster Protection Act of 1973.--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) National Flood Insurance Act of 1968.--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 `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;
            ``(8) 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;
            ``(9) 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;
            ``(10) 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;
            ``(11) 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;
            ``(12) 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;
            ``(13) 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
            ``(14) 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.''.
    (c) Conforming Amendments.--
            (1) Flood disaster protection act of 1973.--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''.
            (2) National flood insurance act of 1968.--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 I--COMPLIANCE AND INCREASED PARTICIPATION

SEC. 101. 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. 102. 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 Flood Insurance Risk 
        Management Act of 1994.''.

SEC. 103. 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 Flood Insurance Risk Management Act of 
        1994.''.

SEC. 104. 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 
        Flood Insurance Risk Management Act of 1994.''.

SEC. 105. PENALTIES FOR FAILURE TO REQUIRE FLOOD INSURANCE OR NOTIFY.

    (a) Authority.--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 Insurance 
        Fund established under section 1310 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 an other 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).''.
    (b) Deposit of Penalties.--Section 1310(b) of the National Flood 
Insurance Act of 1968 is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) by redesignating paragraph (6) as paragraph (9); and
            (3) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) any penalties collected under section 102(f) of the 
        Flood Disaster Protection Act of 1973;''.

SEC. 106. 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 (C), 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) 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.
                    ``(C) 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.
            ``(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 Flood Insurance Risk Management Act of 
        1994.''.

SEC. 107. 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 of the floodplain 
                areas and flood-risk zones established under 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. 108. 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.--
                    ``(A) Requirement.--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 provide notice under 
                this subsection of such special flood hazards a 
                reasonable period in advance of the signing of the 
                purchase agreement, lease, or other documents involved 
                in the transaction.
                    ``(B) Manner.--The regulations under this 
                subsection shall require the lenders to provide the 
                notice of such special flood hazards in writing and 
                orally to the purchaser or lessee of the real estate or 
                mobile home and in writing to the servicer of the loan 
                (or to obtain satisfactory assurances that the seller 
                or lessor has provided such notice).
                    ``(C) Record of receipt.--The regulations under 
                this subsection shall require the lenders--
                            ``(i) to obtain signed statements by the 
                        purchaser or lessee and the servicer that the 
                        purchaser or lessee and servicer, as 
                        applicable, have received the notices required 
                        under this subsection; and
                            ``(ii) to retain such signed statements and 
                        written records of the provision and receipt of 
                        the notices required under this subsection.
            ``(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 an other 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) (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)).
            ``(4) Contents of notice.--Written and oral 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. 109. 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 Flood Insurance Risk Management 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. 110. 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 Flood Insurance Risk 
                Management 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 Flood Insurance Risk 
                Management 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 110(d) of the Flood Insurance Risk Management 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 110(d) of the Flood Insurance Risk Management 
                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 Flood Insurance Risk 
                Management 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. 111. 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. 112. 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 II--FLOOD INSURANCE PREMIUM RATES AND COVERAGE AMOUNTS

SEC. 201. PREFERENCE FOR CHARGING ACTUARIAL RATES.

    Section 1308(b) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4015(b)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``shall, insofar as practicable, be'';
            (2) in each of paragraphs (1), (3), and (4), by inserting 
        ``shall, insofar as practicable, be'' after the paragraph 
        designation; and
            (3) by striking paragraph (2) and inserting the following 
        new paragraph:
            ``(2) shall be adequate, on the basis of accepted actuarial 
        principles, to provide reserves for anticipated losses, except 
        that such rates may be less than such amount only if--
                    ``(A) the rates are necessary to carry out--
                            ``(i) the objective of making flood 
                        insurance available where necessary at 
                        reasonable rates to encourage prospective 
                        insureds to purchase such insurance, and
                            ``(ii) the purposes of this title, and
                    ``(B) with respect to rates in effect at any time 
                after the expiration of the 1-year period beginning on 
                the date of the enactment of the Flood Insurance Risk 
                Management Act of 1994.
                            ``(i) the Director has certified to the 
                        President and the Congress that, during a 
                        specified period that does not exceed 2 years 
                        and begins on or after the date of such 
                        certification, such rates are necessary to 
                        carry out the objective referred to in 
                        subparagraph (A)(i), and
                            ``(ii) the period referred to in the 
                        certification has not expired,''.

SEC. 202. COMMUNITY RATING SYSTEM AND INCENTIVES FOR FLOOD DAMAGE 
              MITIGATION MEASURES.

    (a) In General.--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 Flood Damage 
Mitigation Measures.--
            ``(1) Authority and goals.--The Director shall carry out a 
        program under this subsection establishing a community rating 
        system and providing incentives for community floodplain 
        management and flood damage mitigation measures. The program 
        shall evaluate--
                    ``(A) measures adopted by areas (and subdivisions 
                thereof) in which the Director has made flood insurance 
                coverage available--
                            ``(i) to provide for adequate land use and 
                        control provisions consistent with the 
                        comprehensive criteria for such land management 
                        and use under section 1361;
                            ``(ii) to facilitate accurate risk-rating;
                            ``(iii) to promote flood insurance 
                        awareness;
                            ``(iv) to complement adoption of more 
                        effective measures for floodplain and coastal 
                        erosion management; and
                            ``(v) to reduce the risk of flood damage to 
                        properties within such area; and
                    ``(B) flood damage mitigation measures taken by 
                owners of properties for which such coverage is 
                provided.
            ``(2) Incentives.--The program under this subsection shall 
        provide incentives in the form of adjustments in the premium 
        rates for flood insurance coverage as follows:
                    ``(A) Area-wide adjustment for adoption of goals or 
                mitigation measures.--For any area that the Director 
                determines has adopted and enforced the goals of the 
                community rating system under this subsection on an 
                area-wide basis or completed flood damage mitigation or 
                erosion control measures that reduce the risk of flood 
                damage to properties within such area to the extent 
                established by the Director, the Director shall adjust 
                such premium rates for flood insurance coverage for 
                properties located in such area.
                    ``(B) Area-wide adjustment for protection of 
                floodplain functions.--For any area that the Director 
                determines has implemented measures relating to the 
                protection of natural and beneficial floodplain 
                functions, the Director may provide for additional 
                adjustments in such premium rates for properties 
                located in such area.
                    ``(C) Area-wide adjustment to compensate for flood 
                control projects.--For any area within which such flood 
                insurance premium rates have increased as a result of 
                induced flooding risk from flood control or mitigation 
                projects, as determined by the Director, the Director 
                may provide for additional adjustments in such premium 
                rates for properties located in such area, except that 
                the adjustment shall not reduce premium rates below the 
                rate that would have been charged absent the risk of 
                induced flooding from the flood control or mitigation 
                projects.
                    ``(D) Property-specific adjustment for mitigation 
                measures.--For any property for which any flood damage 
                mitigation measure has been completed that reduces the 
                risk of flood damage to the property to the extent 
                established by the Director, the Director shall adjust 
                the premium rate for flood insurance coverage for such 
                property.
            ``(3) Flood damage mitigation measures.--For purposes of 
        this subsection, flood damage mitigation measures shall include 
        the establishment of buffer zones, flood proofing, dune 
        construction and maintenance, beach nourishment, construction 
        and maintenance of sea walls and levees, and any other measures 
        and activities that the Director considers appropriate to 
        reduce the risk of flood damage to a property or an area.
            ``(4) Erosion control measures.--For purposes of this 
        subsection, the term `erosion control measures' means any 
        activities by an area to control erosion through structural and 
        nonstructural projects.
            ``(5) 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.
            ``(6) 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 Flood Insurance Risk Management 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.''.
    (b) 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 (7); and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) for carrying out the program under section 
        1315(b);''.

SEC. 203. COMMUNITY PREMIUM-POOLING PROGRAM.

    Part C of chapter II of the National Flood Insurance Act of 1968 
(42 U.S.C. 4081 et seq.) is amended by adding at the end the following 
new section:

                  ``community premium-pooling program

    ``Sec. 1349. (a) In General.--The Director shall carry out a 
program under which the premiums for flood insurance coverage under 
this title for all properties in an area (or subdivision thereof) may 
be paid to the Director by a single appropriate public body or agency.
    ``(b) Pooling Agreement.--Under the program, the Director shall 
allow such payment to be made only if the Director and such body or 
agency enter into a written agreement under which--
            ``(1) the area to which such agreement applies is clearly 
        defined;
            ``(2) the public body or agency entering into the agreement 
        has jurisdiction over the entire area for which such premium 
        payments will be made;
            ``(3) the term of the agreement is clearly stated;
            ``(4) the Director authorizes the public body or agency to 
        collect premiums charged for flood insurance coverage under 
        this title, on behalf of the Director during the term of the 
        agreement, for each property located in the area that is 
        covered during the term of the agreement (including structures 
        newly constructed during the term of the agreement), or such 
        lesser amount as may be agreed to by the Director and the 
        public body or agency; and
            ``(5) the amount to be paid to the Director by the public 
        agency or body is equal to the sum of all premiums charged for 
        flood insurance coverage under this title during the term of 
        the agreement for all properties located in the area that are 
        covered during the term of the agreement.
    ``(c) Exemption from Escrow Requirements.--During the term of an 
agreement under subsection (b), section 102(d) of the Flood Disaster 
Protection Act of 1973 shall not apply to any loan secured by a 
property located in the area to which the agreement applies.''.

SEC. 204. 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. 205. 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 actuarially 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. 206. GAO STUDY OF ECONOMIC IMPACT OF EROSION HAZARD AREAS.

    (a) Report to Congress.--Not later than 3 years after the date of 
enactment of this Act, the Comptroller General of the United States 
shall submit to the Congress a report assessing the economic impact of 
the denial of flood insurance and the establishment of actuarial rates 
on communities that are likely to be identified as having erosion 
hazard areas. The report shall include--
            (1) a listing of all communities that are likely to be 
        identified having an erosion hazard area;
            (2) an independent assessment, after consultation with such 
        communities, of the economic impact of the denial of flood 
        insurance for new construction and the assessment of actuarial 
        rates in the erosion hazard areas, including the impact on--
                    (A) the value of residential and commercial 
                properties in the erosion hazard area;
                    (B) community tax revenues due to changes in 
                property values or commercial activity;
                    (C) employment, including the potential loss of 
                existing and new jobs in the community;
                    (D) existing businesses and future economic 
                development; and
                    (E) the estimated cost of Federal and State 
                disaster assistance to flood victims that would have 
                otherwise been insured by available and affordable 
                flood insurance;
            (3) an estimate of the cross-subsidy of insurance premiums 
        in such communities, and the impact of eliminating the cross-
        subsidy on those communities and the financial condition of the 
        National Flood Insurance Fund;
            (4) the estimated savings to the National Flood Insurance 
        Program likely to result from expending $25,000,000 from the 
        National Flood Insurance Fund to map erosion hazard areas; and
            (5) an assessment of the need for the development of a 
        Community Erosion Hazard Management Program and, if needed, 
        recommendations consistent with the goal of providing 
        affordable flood insurance protection under the National Flood 
        Insurance Program, which would minimize the economic impact on 
        communities assessed under paragraph (2).
    (b) Definition of Erosion Hazard Area.--For the purposes of this 
section, 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 during a 60-year period.

TITLE III--REVOLVING LOAN FUND FOR FLOOD AND EROSION DAMAGE MITIGATION 
             ACTIVITIES AND ADDITIONAL MITIGATION COVERAGE

SEC. 301. FLOOD AND EROSION RISK MANAGEMENT FUND.

    (a) In General.--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:

             ``loans for flood and erosion risk management

    ``Sec. 1365. (a) Establishment of Fund and Use.--There is 
established in the Treasury of the United States a revolving fund to be 
known as the Flood and Erosion Risk Management Fund (in this section 
referred to as the `Fund'). To the extent provided in appropriation 
Acts, amounts in the Fund may be used only by the Director for making 
loans under subsection (d) and investments under subsection (c), and to 
repay any amounts borrowed pursuant to subsection (b)(2) with interest 
on such amounts.
    ``(b) Credits.--The Fund shall be credited with--
            ``(1) any surcharges collected under section 1308(e);
            ``(2) any amounts borrowed pursuant to subsection (e);
            ``(3) any loan repayments under subsection (d)(3);
            ``(4) any interest earned on investments of the Fund 
        pursuant to subsection (c);
            ``(5) any amounts repaid or recovered under subsection 
        (d)(4); and
            ``(6) any other receipts or proceeds derived from any claim 
        or other assets acquired by the Director pursuant to this 
        section.
    ``(c) Investments.--If the Director determines that the amounts in 
the Fund are in excess of amounts needed for loans under subsection 
(d), the Director may invest any excess amounts the Director determines 
advisable in interest-bearing obligations issued or guaranteed by the 
United States.
    ``(d) Loans.--
            ``(1) Authority.--Using amounts in the Fund, the Director 
        may make loans--
                    ``(A) to public bodies or agencies of communities 
                participating in the national flood insurance program 
                pursuant to section 1315 for the purpose of carrying 
                out flood damage and erosion mitigation activities for 
                the community; and
                    ``(B) to individuals who own property covered by a 
                contract for flood insurance under this title for the 
                purposes of carrying out flood damage and erosion 
                mitigation activities for the property.
            ``(2) Eligible activities.--Amounts from loans made under 
        this subsection may be used only for carrying out the flood 
        damage and erosion mitigation activities that have been 
        described in the application for the loan and approved by the 
        Director. The Director shall determine activities eligible for 
        loans under this subsection, which shall include flood 
        proofing, dune construction and maintenance, acquisition of 
        property by public entities for public ownership or the 
        establishment of buffer zones, beach nourishment, construction, 
        repair, or maintenance of sea walls and levees, and any other 
        measures and activities that the Director considers appropriate 
        to reduce the risk of flood damage and erosion to a property or 
        an area.
            ``(3) Interest and repayment.--Loans made under this 
        section shall bear interest at a rate determined by the 
        Director, which may not exceed 3 percent per annum, and shall 
        be repayable to the Fund at such time and upon such terms and 
        conditions established and agreed to by the Director and the 
        borrower.
            ``(4) Default.--Each agreement for a loan made under this 
        section shall provide that if the Director determines at any 
        time that the borrower has not used the amounts of the loan in 
        accordance with this subsection or the provisions of the loan 
        agreement, the Director may--
                    ``(A) recover the amount of the loan; or
                    ``(B) require the borrower to repay the amount of 
                the loan within the term of the loan at an annual rate 
                of interest over such term equal to the sum of the 
                existing annual rate for comparable commercial loans, 
                as determined by the Director, plus 1 percent.
    ``(e) Borrowing Authority.--
            ``(1) Initial.--Pursuant to section 1310(a)(6), upon the 
        establishment of the Fund under this section and with the 
        approval of the Secretary of the Treasury, the Director may 
        borrow an amount from the National Flood Insurance Fund not 
        exceeding $20,000,000 for deposit in the Fund under this 
        section.
            ``(2) Ongoing.--In addition to any amounts borrowed under 
        paragraph (1), before October 1, 1999, the Director may, with 
        the approval of the Secretary of the Treasury, borrow amounts 
        from the National Flood Insurance Act pursuant to section 
        1310(a)(6) for deposit in the Fund under this section. The sum 
        of amounts borrowed under this paragraph may not exceed 
        $30,000,000.
            ``(3) Terms and conditions.--Any amounts borrowed under 
        this subsection shall be repaid to the National Flood Insurance 
        Fund, with interest, and shall be evidenced by notes and other 
        obligations issued by the Director. The notes and obligations 
        shall be in such forms and denominations, bear such maturities, 
        and be subject to such terms and conditions as may be 
        prescribed by the Director, with the approval of the Secretary 
        of the Treasury. Such notes and other obligations shall bear 
        interest at a rate determined by the Secretary of the Treasury, 
        taking into consideration the current average market yield on 
        outstanding marketable obligations of the United States of 
        comparable maturities during the month preceding the issuance 
        of such notes or other obligations.''.
    (b) National Flood Insurance Fund.--Section 1310 of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4017) is amended--
            (1) in subsection (a), by inserting after paragraph (5) (as 
        added by section 202(b)(3) of this Act) the following new 
        paragraph:
            ``(6) for making loans to the Flood and Erosion Risk 
        Management Fund, subject to the provisions of section 1365(e); 
        and''; and
            (2) in subsection (b), by inserting after paragraph (6) (as 
        added by section 105(b)(3) of this Act) the following new 
        paragraph:
            ``(7) repayments of amounts borrowed under section 1365(e) 
        and interest on such amounts;''.

SEC. 302. FLOOD INSURANCE PREMIUM SURCHARGES.

    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 subsection:
    ``(e) Insurance Premium Surcharges for Flood Risk Management.--
            ``(1) Mandatory one-time surcharge.--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 Flood Insurance Risk Management Act of 1994, a surcharge 
        of--
                    ``(A) $15 for each principal residence covered 
                under the policy; and
                    ``(B) $40 for each secondary residence or structure 
                other than a primary residence (including commercial 
                structures) covered under the policy.
        The Director may not assess a surcharge under this paragraph 
        for any residence or other structure for which such a surcharge 
        has previously been assessed and paid.
            ``(2) Authority for policy-term surcharges.--If the 
        Director determines that the amounts in the Flood Risk 
        Management Fund established under section 1365(a) are 
        insufficient to meet the demand for loans under section 
        1365(d), the Director may assess, with respect to each contract 
        for flood insurance coverage under this title issued or renewed 
        after a date established by the Director, a surcharge of--
                    ``(A) $5 per policy term, for each structure that 
                is a principal residence covered under the policy; and
                    ``(B) $15 per policy term, for each structure that 
                is a secondary residence or structure other than a 
                primary residence (including a commercial structure) 
                covered under the policy.
        The Director may terminate the surcharges established under 
        this paragraph at any time, in the discretion of the Director.
            ``(3) Deposit in mitigation fund.--Any surcharges collected 
        under this subsection shall be paid into the Flood Risk 
        Management Fund established under section 1365(a).
            ``(4) Exemption.--The surcharges under this subsection 
        shall not be subject to any agents' commissions, company 
        expenses allowances, or State or local premium taxes.''.

SEC. 303. ADDITIONAL COVERAGE FOR MITIGATION ACTIVITIES.

    (a) Basic Authority.--Section 1304(a) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4011(a)) is amended by adding after 
the period at the end the following new sentence: ``Insurance made 
available under this title shall include coverage for certain costs of 
complying with land use and control measures adopted pursuant to 
section 1315, as provided in section 1306(c)''.
    (b) Terms of Mitigation Coverage.--Section 1306 of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4011(a)) is amended by adding at 
the end the following new subsection:
    ``(d) Terms of Mitigation Coverage.--Coverage under flood insurance 
made available under this title shall provide payment for a portion of 
the costs of activities to bring a property into compliance with land 
use and control measures adopted pursuant to section 1315, pursuant to 
an approved claim for such costs and subject to the following 
limitations:
            ``(1) Repetitive loss requirement.--Such coverage shall 
        only cover such costs incurred for a property that is 
        determined to be repetitive loss structure for purposes of 
        section 1308(g).
            ``(2) Post-flood event claims.--Such coverage shall provide 
        payment for 40 percent of the costs of such compliance 
        activities that are performed after the first flood event 
        resulting in damage to the property that occurs after the 
        property becomes a repetitive loss structure for purposes of 
        section 1308(g).
            ``(3) Pre-flood event claims.--Such coverage shall provide 
        payment for 60 percent of the costs of such compliance 
        activities that are performed before the flood event resulting 
        in damage to the property that occurs after the property 
        becomes a repetitive loss structure for purposes of section 
        1308(g).''.
    (c) Surcharges for Mitigation Coverage.--
            (1) In general.--Section 1308 of the National Flood 
        Insurance Act of 1968 (42 U.S.C. 4015) is amended by adding 
        after subsection (e) (as added by section 302 of this Act) the 
        following new subsection:
    ``(f) Mitigation Coverage Surcharges.--
            ``(1) In general.--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 Flood 
        Insurance Risk Management Act of 1994, a surcharge of--
                    ``(A) $20 per policy term, for each structure that 
                is a principal residence covered under the policy; and
                    ``(B) $30 per policy term, for each structure that 
                is a secondary residence or structure other than a 
                primary residence (including a commercial structure) 
                covered under the policy.
            ``(2) Deposit in flood insurance fund.--Any surcharges 
        collected under this subsection shall be paid into the National 
        Flood Insurance Fund established under section 1310.''.
            (2) National flood insurance fund.--Section 1310(b) of the 
        National Flood Insurance Act of 1968 (42 U.S.C. 4017(b)) is 
        amended by inserting after paragraph (7) (as added by section 
        301(b)(2) of this Act) the following new paragraph:
            ``(8) any surcharges collected under section 1308(f); 
        and''.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. EXTENSION OF FLOOD INSURANCE PROGRAM.

    (a) In General.--Section 1319 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4026) is amended by striking ``September 30, 1995'' 
and inserting ``September 30, 1999''.
    (b) Emergency Implementation.--Section 1336(a) of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4056(a)) is amended by striking 
``September 30, 1995'' and inserting ``September 30, 1999''.
    (c) Limitation on Annual Premium Increases.--Section 541(d) of the 
Housing and Community Development Act of 1987 (42 U.S.C. 4015 note) is 
amended by striking ``September 30, 1995'' and inserting ``September 
30, 1999''.

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--
            (1) by striking subsection (c); and
            (2) by redesignating subsection (d) (as added by section 
        303(b) of this Act) as 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 (as in effect immediately before the enactment of this Act) or 
subsection (b).

SEC. 403. LIMITATIONS ON CLAIMS FOR REPETITIVELY DAMAGED STRUCTURES.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4013) is amended by adding after subsection (f) (as added by section 
303(c) of this Act) the following new subsection:
    ``(g) Rates for Repetitive Loss Structures.--
            ``(1) In general.--Subject only to paragraphs (2) and (3), 
        after the expiration of the 3-year period beginning on the date 
        of the enactment of the Flood Insurance Risk Management Act of 
        1994, the chargeable rate with respect to any repetitive loss 
        structure shall be not less than the applicable estimated risk 
        premium rate under section 1307(a)(1) for the area (or 
        subdivision thereof) in which the structure is located.
            ``(2) Limitation on premium increases.--The Director may 
        not, pursuant to this subsection, increase the risk premium 
        rates charged for flood insurance under this title for any 
        repetitive loss structure by an amount that would result in the 
        sum of such rate increases for the structure during any 12-
        month period exceeding 5 percent of the amount of the risk 
        premium rate applicable to the property upon the commencement 
        of the 12-month period.
            ``(3) Exemption for certain structures.--The Director shall 
        exempt any repetitive loss structure for which construction or 
        substantial improvement was started before January 1, 1975, 
        from the requirements of paragraph (1), if the Director 
        determines that the physical and structural characteristics of 
        the structure prevent taking any flood damage mitigation 
        activities that (A) have a reasonable cost (taking into 
        consideration the value of the structure), and (B) would 
        substantially reduce the risk of flood damage to the structure.
            ``(4) Repetitive loss structure.--For purposes of this 
        subsection, a repetitive loss structure shall be any structure 
        that the Director has determined--
                    ``(A) is covered by a contract for flood insurance 
                under this title under which, immediately before the 
                determination under this paragraph, the chargeable rate 
                was less than the applicable estimated risk premium 
                rate under section 1307(a)(1) for the area (or 
                subdivision thereof) in which the structure is located;
                    ``(B) has incurred significant flood damage on not 
                less than 2 occasions over the 10-year period ending 
                upon the determination under this paragraph and the 
                damage on each such occasion equaled or exceeded 25 
                percent of the value of the structure at the time of 
                the flood event.''.

SEC. 404. PENALTIES FOR REPETITIVE CLAIMS.

    Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4019) is amended--
            (1) by inserting ``(a) In General.--'' before ``The 
        Director''; and
            (2) by adding at the end the following new subsection:
    ``(b) Penalties for Repetitive Claims.--
            ``(1) In general.--In making coverage for flood insurance 
        available under this title, the Director shall establish a 
        schedule of penalties for repetitive claims for losses covered 
        by flood insurance and shall charge such a penalty according to 
        the schedule upon approval of any such claim or deduct the 
        amount of the penalty from the payment of any such approved 
        claim. Such penalties shall apply only to contracts for flood 
        insurance entered into after the expiration of the 1-year 
        period beginning upon the date of the enactment of the Flood 
        Insurance Risk Management Act of 1994.
            ``(2) Terms.--In establishing the amount of any penalty 
        under this subsection for a repetitive claim, the Director 
        shall consider the number of claims made on a property and 
        approved before the repetitive claim for which the penalty is 
        imposed and the amounts of such prior claims.
            ``(3) Repetitive claim.--For purposes of this subsection, a 
        repetitive claim shall be a proved and approved claim for 
        losses to a property under a contract for flood insurance under 
        this title that--
                    ``(A) equals or exceeds $5,000; and
                    ``(B) is made for the same property for which 2 or 
                more previous claims under a contract for flood 
                insurance under this title have been made and approved, 
                each of which equaled or exceeded $5,000.''.

SEC. 405. 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. 406. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to appropriated such sums as may be necessary 
to carry out this Act and the amendments made by this Act.

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