109TH CONGRESS 

2D SESSION H. R. 4973

AN ACT

To restore the financial solvency of the national flood 

insurance program, and for other purposes.

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

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

3 ‘‘Flood Insurance Reform and Modernization Act of 

4 2006’’. 

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

6 this Act is as follows:

Sec. 1. Short title and table of contents. 

Sec. 2. Findings and purposes. 

Sec. 3. Study regarding status of pre-FIRM properties and mandatory purchase requirement for natural 100-year floodplain and nonFederally related loans. 

Sec. 4. Phase-in of actuarial rates for nonresidential properties and non-primary residences. 

Sec. 5. Waiting period for effective date of policies. 

Sec. 6. Enforcement. 

Sec. 7. Maximum coverage limits. 

Sec. 8. Coverage for additional living expenses, basement improvements, business interruption, and replacement cost of contents. 

Sec. 9. Increase in annual limitation on premium increases. 

Sec. 10. Increase in borrowing authority. 

Sec. 11. FEMA participation in State disaster claims mediation programs. 

Sec. 12. FEMA reports on financial status of insurance program. 

Sec. 13. Extension of pilot program for mitigation of severe repetitive loss properties. 

Sec. 14. Notice of availability of flood insurance and escrow in RESPA good 

faith estimate. 

Sec. 15. Reiteration of FEMA responsibilities under 2004 Reform Act. 

Sec. 16. Updating of flood maps and elevation standards. 

Sec. 17. Notification and appeal of map changes; notification of establishment 

of flood elevations. 

Sec. 18. National levee inventory. 

Sec. 19. Clarification of replacement cost provisions, forms, and policy language. 

Sec. 20. Authorization of additional FEMA staff. 

Sec. 21. Investigation of write-your-own insurers’ adjustment of claims relating 

to Hurricane Katrina. 

Sec. 22. Eligibility of property demolition and rebuilding for mitigation assistance program. 

Sec. 23. Sampling methods for quality assurance. 

Sec. 24. Extension of deadline for filing proof of loss.

7 SEC. 2. FINDINGS AND PURPOSES. 

8 (a) FINDINGS.—The Congress finds that—

9 (1) flooding has been shown to occur in all 50 

10 States; 
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1 (2) the aggregate amount of the flood insurance 

2 claims resulting from Hurricane Katrina, Hurricane 

3 Rita, and other recent events has exceeded the ag4 gregate amount of all claims previously paid in the 

5 history of the national flood insurance program, re6 quiring a significant increase in the program’s bor7 rowing authority; 

8 (3) flood insurance policyholders have a legiti9 mate expectation that they will receive fair and time10 ly compensation for losses covered under their poli11 cies; 

12 (4) substantial flooding has occurred, and will 

13 likely occur again, outside the areas designated by 

14 the Federal Emergency Management Agency as 

15 flood hazard areas; 

16 (5) properties located in low- to moderate-risk 

17 areas are eligible to purchase flood insurance policies 

18 with premiums as low as $112 a year; 

19 (6) about 450,000 vacation homes, second 

20 homes, and commercial properties are subsidized 

21 and are not paying actuarially sound rates for flood 

22 insurance; 

23 (7) phasing out subsidies currently extended to 

24 vacation homes, second homes, and commercial 

25 properties would result in estimated average savings 
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1 to the taxpayers of the United States and the na2 tional flood insurance program of $335,000,000 

3 each year; 

4 (8) the maximum coverage limits for flood in5 surance policies should be increased to reflect infla6 tion and the increased cost of housing; 

7 (9) significant reforms to the national flood in8 surance program required in the Bunning-Bereuter9 Blumenauer Flood Insurance Reform Act of 2004 

10 have yet to be implemented; and 

11 (10) in addition to reforms required in the 

12 Bunning-Bereuter-Blumenauer Flood Insurance Re13 form Act of 2004, the national flood insurance pro14 gram requires a modernized and updated adminis15 trative model to ensure that the program is solvent 

16 and the people of the United States have continued 

17 access to flood insurance. 

18 (b) PURPOSES.—The purposes of this Act are—

19 (1) to protect the integrity of the national flood 

20 insurance program by fully funding existing legal ob21 ligations expected by existing policyholders who have 

22 paid policy premiums in return for flood insurance 

23 coverage; 

24 (2) to increase incentives for homeowners and 

25 communities to participate in the national flood in-
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1 surance program and to improve oversight to ensure 

2 full participation in the program for owners of prop3 erties for which such participation is mandatory; and 

4 (3) to increase awareness of homeowners of 

5 flood risks and improve the quality of information 

6 regarding such risks provided to homeowners. 

7 SEC. 3. STUDY REGARDING STATUS OF PRE-FIRM PROP8 ERTIES AND MANDATORY PURCHASE RE9 QUIREMENT FOR NATURAL 100-YEAR FLOOD10 PLAIN AND NON-FEDERALLY RELATED 

11 LOANS. 

12 (a) IN GENERAL.—The Comptroller General shall 

13 conduct a study as follows: 

14 (1) PRE-FIRM PROPERTIES.—The study shall 

15 determine the status of the national flood insurance 

16 program, as of the date of the enactment of this Act, 

17 with respect to the provision of flood insurance cov18 erage for pre-FIRM properties (as such term is de19 fined in section 578(b) of the National Flood Insur20 ance Reform Act of 1994 (42 U.S.C. 4014 note)), 

21 which shall include determinations of—

22 (A) the number of pre-FIRM properties 

23 for which coverage is provided and the extent of 

24 such coverage; 
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1 (B) the cost of providing coverage for such 

2 pre-FIRM properties to the national flood in3 surance program; 

4 (C) the anticipated rate at which such pre5 FIRM properties will cease to be covered under 

6 the program; 

7 (D) the effects that implementation of the 

8 Bunning-Bereuter-Blumenauer Flood Insurance 

9 Reform Act of 2004 will have on the national 

10 flood insurance program generally and on cov11 erage of pre-FIRM properties under the pro12 gram; and 

13 (E) the extent to which eligibility stand14 ards for pre-FIRM properties were inconsistent 

15 and resulted in disparities in coverage among 

16 such properties. 

17 (2) MANDATORY PURCHASE REQUIREMENT FOR

18 NATURAL 100-YEAR FLOODPLAIN.—The study shall 

19 assess the impact, effectiveness, and feasibility of 

20 amending the provisions of the Flood Disaster Pro21 tection Act of 1973 regarding the properties that are 

22 subject to the mandatory flood insurance coverage 

23 purchase requirements under such Act to extend 

24 such requirements to properties located in any area 

25 that would be designated as an area having special 
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1 flood hazards but for the existence of a structural 

2 flood protection system, and shall determine—

3 (A) the regulatory, financial and economic 

4 impacts of extending such mandatory purchase 

5 requirements on the costs of homeownership, 

6 the actuarial soundness of the national flood in7 surance program, the Federal Emergency Man8 agement Agency, local communities, insurance 

9 companies, and local land use; 

10 (B) the effectiveness of extending such 

11 mandatory purchase requirements in protecting 

12 homeowners from financial loss and in pro13 tecting the financial soundness of the national 

14 flood insurance program; and 

15 (C) any impact on lenders of complying 

16 with or enforcing such extended mandatory re17 quirements. 

18 (3) MANDATORY PURCHASE REQUIREMENT FOR

19 NON-FEDERALLY RELATED LOANS.—The study shall 

20 assess the impact, effectiveness, and feasibility of, 

21 and basis under the Constitution of the United 

22 States for, amending the provisions of the Flood 

23 Disaster Protection Act of 1973 regarding the prop24 erties that are subject to the mandatory flood insur25 ance coverage purchase requirements under such Act 
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1 to extend such requirements to any property that is 

2 located in any area having special flood hazards and 

3 which secures the repayment of a loan that is not 

4 described in paragraph (1), (2), or (3) of section 

5 102(b) of such Act, and shall determine how best to 

6 administer and enforce such a requirement, taking 

7 into consideration other insurance purchase require8 ments under Federal and State law. 

9 (b) REPORT.—The Comptroller General shall submit 

10 a report to the Congress regarding the results and conclu11 sions of the study under this subsection not later than the 

12 expiration of the 6-month period beginning on the date 

13 of the enactment of this Act. 

14 SEC. 4. PHASE-IN OF ACTUARIAL RATES FOR NONRESIDEN15 TIAL PROPERTIES, CERTAIN PRE-FIRM PROP16 ERTIES, AND NON-PRIMARY RESIDENCES. 

17 (a) IN GENERAL.—Section 1308(c) of the National 

18 Flood Insurance Act of 1968 (42 U.S.C. 4015(c)) is 

19 amended—

20 (1) by redesignating paragraph (2) as para21 graph (4); and 

22 (2) by inserting after paragraph (1) the fol23 lowing new paragraphs: 

24 ‘‘(2) NONRESIDENTIAL PROPERTIES.—Any non25 residential property. 
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1 ‘‘(3) NON-PRIMARY RESIDENCES.—Any residen2 tial property that is not the primary residence of an 

3 individual. 

4 ‘‘(4) RECENTLY PURCHASED PRE-FIRM PROP5 ERTIES.—Any property that—

6 ‘‘(A) has been constructed or substantially 

7 improved and for which such construction or 

8 improvement was started, as determined by the 

9 Director, before December 31, 1974, or before 

10 the effective date of the initial rate map pub11 lished by the Director under paragraph (2) of 

12 section 1360 for the area in which such prop13 erty is located, whichever is later; and 

14 ‘‘(B) is purchased after the date of the en15 actment of the Flood Insurance Reform and 

16 Modernization Act of 2006.’’. 

17 (b) TECHNICAL AMENDMENTS.—Section 1308 of the 

18 National Flood Insurance Act of 1968 (42 U.S.C. 4015) 

19 is amended—

20 (1) in subsection (c)—

21 (A) in the matter preceding paragraph (1), 

22 by striking ‘‘Subject only to the limitations pro23 vided under paragraphs (1) and (2), the’’ and 

24 inserting ‘‘The’’; and 
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1 (B) in paragraph (1), by striking ‘‘, ex2 cept’’ and all that follows through ‘‘subsection 

3 (e)’’; and 

4 (2) in subsection (e), by striking ‘‘paragraph 

5 (2) or (3)’’ and inserting ‘‘paragraph (4)’’. 

6 (c) EFFECTIVE DATE AND TRANSITION.—

7 (1) EFFECTIVE DATE.—The amendments made 

8 by subsections (a) and (b) shall apply beginning on 

9 the submission to the Congress, by the Director of 

10 the Federal Emergency Management Agency, of the 

11 report required under section 16(b)(2), except as 

12 provided in paragraph (2) of this subsection. 

13 (2) TRANSITION.—In the case of any property 

14 described in paragraph (2), (3), or (4) of section 

15 1308(c) of the National Flood Insurance Act of 

16 1968, as amended by subsection (a) of this section, 

17 that, on the effective date under paragraph (1) of 

18 this subsection, is covered under a policy for flood 

19 insurance made available under the national flood 

20 insurance program for which the chargeable pre21 mium rates are less than the applicable estimated 

22 risk premium rate under section 1307(a)(1) for the 

23 area in which the property is located, the Director 

24 of the Federal Emergency Management Agency shall 

25 increase the chargeable premium rates for such 
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1 property over time to such applicable estimated risk 

2 premium rate under section 1307(a)(1). Such in3 crease shall be made by increasing the chargeable 

4 premium rates for the property (after application of 

5 any increase in the premium rates otherwise applica6 ble to such property) by 15 percent (or such lesser 

7 amount as may be necessary so that the chargeable 

8 rate does not exceed such applicable estimated risk 

9 premium rate) once during the 12-month period that 

10 begins upon the effective date under paragraph (1) 

11 of this subsection and once every 12 months there12 after until such increase is accomplished. The provi13 sions of paragraphs (2), (3), and (4) of such section 

14 1308(c) shall apply to such a property upon the ac15 complishment of such increase and thereafter. 

16 SEC. 5. WAITING PERIOD FOR EFFECTIVE DATE OF POLI17 CIES. 

18 (a) REDUCTION.—Section 1306(c)(1) of the National 

19 Flood Insurance Act of 1968 (42 U.S.C. 4013(c)(1)) is 

20 amended by striking ‘‘30-day’’ and inserting ‘‘15-day’’. 

21 (b) EXCEPTION.—Section 1306(c)(2)(A) of the Na22 tional Flood Insurance Act of 1968 (42 U.S.C. 

23 4013(c)(2)(A)) is amended by inserting before the semi24 colon the following: ‘‘or is in connection with the purchase 

25 or other transfer of the property for which the coverage 
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1 is provided (regardless of whether a loan is involved in 

2 the purchase or transfer transaction). 

3 SEC. 6. ENFORCEMENT. 

4 Section 102(f) of the Flood Disaster Protection Act 

5 of 1973 (42 U.S.C. 4012a(f)) is amended—

6 (1) in paragraph (5)—

7 (A) in the first sentence, by striking 

8 ‘‘$350’’ and inserting ‘‘$2,000’’; and 

9 (B) in the last sentence, by striking 

10 ‘‘$100,000’’ and inserting ‘‘$1,000,000; except 

11 that such limitation shall not apply to a regu12 lated lending institution or enterprise for a cal13 endar year if, in any three (or more) of the five 

14 calendar years immediately preceding such cal15 endar year, the total amount of penalties as16 sessed under this subsection against such lend17 ing institution or enterprise was $1,000,000’’; 

18 and 

19 (2) in paragraph (6), by adding after the period 

20 at the end the following: ‘‘No penalty may be im21 posed under this subsection on a regulated lending 

22 institution or enterprise that has made a good faith 

23 effort to comply with the requirements of the provi24 sions referred to in paragraph (2) or for any non25 material violation of such requirements.’’. 
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1 SEC. 7. MAXIMUM COVERAGE LIMITS. 

2 Subsection (b) of section 1306 of the National Flood 

3 Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended—

4 (1) in paragraph (2), by striking ‘‘$250,000’’ 

5 and inserting ‘‘$335,000’’; 

6 (2) in paragraph (3), by striking ‘‘$100,000’’ 

7 and inserting ‘‘$135,000’’; and 

8 (3) in paragraph (4), by striking ‘‘$500,000’’ 

9 each place such term appears and inserting 

10 ‘‘$670,000’’. 

11 SEC. 8. COVERAGE FOR ADDITIONAL LIVING EXPENSES, 

12 BASEMENT IMPROVEMENTS, BUSINESS 

13 INTERRUPTION, AND REPLACEMENT COST 

14 OF CONTENTS. 

15 Subsection (b) of section 1306 of the National Flood 

16 Insurance Act of 1968 (42 U.S.C. 4013) is amended—

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

18 end; 

19 (2) in paragraph (5)—

20 (A) by inserting ‘‘pursuant to paragraph 

21 (2), (3), or (4)’’ after ‘‘any flood insurance cov22 erage’’; and 

23 (B) by striking the period at the end and 

24 inserting a semicolon; and 

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

26 paragraphs: 
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1 ‘‘(6) in the case of any residential property, 

2 each renewal or new contract for flood insurance 

3 coverage shall provide not less than $1,000 aggre4 gate liability per dwelling unit for any necessary in5 creases in living expenses incurred by the insured 

6 when losses from a flood make the residence unfit to 

7 live in, which coverage shall be available only at 

8 chargeable rates that are not less than the estimated 

9 premium rates for such coverage determined in ac10 cordance with section 1307(a)(1); 

11 ‘‘(7) in the case of any residential property, op12 tional coverage for additional living expenses de13 scribed in paragraph (6) shall be made available to 

14 every insured upon renewal and every applicant in 

15 excess of the limits provided in paragraph (6) in 

16 such amounts and at such rates as the Director 

17 shall establish, except that such chargeable rates 

18 shall not be less than the estimated premium rates 

19 for such coverage determined in accordance with sec20 tion 1307(a)(1); 

21 ‘‘(8) in the case of any residential property, op22 tional coverage for losses, resulting from floods, to 

23 improvements and personal property located in base24 ments, crawl spaces, and other enclosed areas under 

25 buildings that are not covered by primary flood in-
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1 surance coverage under this title, shall be made 

2 available to every insured upon renewal and every 

3 applicant, except that such coverage shall be made 

4 available only at chargeable rates that are not less 

5 than the estimated premium rates for such coverage 

6 determined in accordance with section 1307(a)(1); 

7 ‘‘(9) in the case of any commercial property, 

8 optional coverage for losses resulting from any par9 tial or total interruption of the insured’s business 

10 caused by damage to, or loss of, such property from 

11 a flood shall be made available to every insured upon 

12 renewal and every applicant, except that—

13 ‘‘(A) for purposes of such coverage, losses 

14 shall be determined based on the profits the 

15 covered business would have earned, based on 

16 previous financial records, had the flood not oc17 curred; and 

18 ‘‘(B) such coverage shall be made available 

19 only at chargeable rates that are not less than 

20 the estimated premium rates for such coverage 

21 determined in accordance with section 

22 1307(a)(1); and 

23 ‘‘(10) in the case of any residential property 

24 and any commercial property, optional coverage for 

25 the full replacement costs of any contents related to 
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1 the structure that exceed the limits of coverage oth2 erwise provided in this subsection shall be made 

3 available to every insured upon renewal and every 

4 applicant, except that such coverage shall be made 

5 available only at chargeable rates that are not less 

6 than the estimated premium rates for such coverage 

7 determined in accordance with section 1307(a)(1).’’. 

8 SEC. 9. INCREASE IN ANNUAL LIMITATION ON PREMIUM IN9 CREASES. 

10 Section 1308(e) of the National Flood Insurance Act 

11 of 1968 (42 U.S.C. 4015(e)) is amended by striking ‘‘10 

12 percent’’ and inserting ‘‘15 percent’’. 

13 SEC. 10. INCREASE IN BORROWING AUTHORITY. 

14 (a) BORROWING AUTHORITY.—The first sentence of 

15 subsection (a) of section 1309 of the National Flood In16 surance Act of 1968 (42 U.S.C. 4016(a)), as amended by 

17 the National Flood Insurance Program Further Enhanced 

18 Borrowing Authority Act of 2005 (Public Law 109–106; 

19 119 Stat. 2288), is amended by striking 

20 ‘‘$20,775,000,000’’ and inserting ‘‘$25,000,000,000’’. 

21 (b) FEMA REPORT.—Not later than the expiration 

22 of the 6-month period beginning on the date of the enact23 ment of this Act, the Director of the Federal Emergency 

24 Management Agency shall submit a report to the Congress 

25 setting forth a plan for repaying any amounts borrowed 
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1 pursuant to increase in borrowing authority authorized 

2 under the amendments made by subsection (a). 

3 SEC. 11. FEMA PARTICIPATION IN STATE DISASTER CLAIMS 

4 MEDIATION PROGRAMS. 

5 The National Flood Insurance Act of 1968 is amend6 ed by inserting after section 1313 (42 U.S.C. 4020) the 

7 following new section: 

8 ‘‘SEC. 1314. FEMA PARTICIPATION IN STATE DISASTER 

9 CLAIMS MEDIATION PROGRAMS. 

10 ‘‘(a) REQUIREMENT TO PARTICIPATE.—In the case 

11 of the occurrence of a natural catastrophe that may have 

12 resulted in flood damage covered by insurance made avail13 able under the National Flood Insurance Program and a 

14 loss covered by personal lines residential property insur15 ance policy, upon request made by the insurance commis16 sioner of a State (or such other official responsible for reg17 ulating the business of insurance in the State) for the par18 ticipation of representatives of the Director in a program 

19 sponsored by such State for nonbinding mediation of in20 surance claims resulting from a natural catastrophe, the 

21 Director shall cause such representatives to participate in 

22 such State program, when claims under the national flood 

23 insurance program are involved, to expedite settlement of 

24 flood damage claims resulting from such catastrophe.’’. 
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1 ‘‘(b) EXTENT OF PARTICIPATION.—Participation by 

2 representatives of the Director required under subsection 

3 (a) with respect to flood damage claims resulting from a 

4 natural catastrophe shall include—

5 ‘‘(1) providing adjusters certified for purposes 

6 of the national flood insurance program who are au7 thorized to settle claims against such program re8 sulting from such catastrophe in amounts up to the 

9 limits of policies under such program; 

10 ‘‘(2) requiring such adjusters to attend State11 sponsored mediation meetings regarding flood insur12 ance claims resulting from such catastrophe at times 

13 and places as may be arranged by the State; 

14 ‘‘(3) participating in good-faith negotiations to15 ward the settlement of such claims with policy16 holders of coverage made available under the na17 tional flood insurance program; and 

18 ‘‘(4) finalizing the settlement of such claims on 

19 behalf of the national flood insurance program with 

20 such policyholders. 

21 ‘‘(c) COORDINATION.—Representatives of the Direc22 tor who participate pursuant to this section in a State23 sponsored mediation program with respect to a natural ca24 tastrophe shall at all times coordinate their activities with 

25 insurance officials of the State and representatives of in-
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1 surers for the purpose of consolidating and expediting the 

2 settlement of claims under the national flood insurance 

3 program resulting from such catastrophe at the earliest 

4 possible time. 

5 ‘‘(d) MEDIATION PROCEEDINGS AND PRIVILEGED

6 DOCUMENTS.—As a condition of the participation of Rep7 resentatives of the Director pursuant to this section in 

8 State-sponsored mediation, all statements made and docu9 ments produced pursuant to such mediation involving rep10 resentatives of the Director shall be deemed privileged and 

11 confidential settlement negotiations made in anticipation 

12 of litigation. 

13 ‘‘(e) EFFECT OF PARTICIPATION ON LIABILITY, 

14 RIGHT, AND OBLIGATIONS.—Participation of Representa15 tives of the Director pursuant to this section in State16 sponsored mediation shall not affect or expand the liability 

17 of any party in contract or in tort, nor shall it affect the 

18 rights or obligations of the parties as provided in the 

19 Standard Flood Insurance Policy under the national flood 

20 insurance program, regulations of the Federal Emergency 

21 Management Agency, this Act, or Federal common law. 

22 ‘‘(f) EXCLUSIVE FEDERAL JURISDICTION.—Partici23 pation of Representatives of the Director pursuant to this 

24 section in State-sponsored mediation shall not alter, 
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1 change or modify the original exclusive jurisdiction of 

2 United States courts as provided in this Act. 

3 ‘‘(g) COST LIMITATION.—Nothing in this section 

4 shall be construed to require the Director or representa5 tives of the Director to pay additional mediation fees relat6 ing to flood claims associated with a State-sponsored me7 diation program in which representatives of the Director 

8 participate. 

9 ‘‘(h) EXCEPTION.—In the case of the occurrence of 

10 a natural catastrophe that results in flood damage claims 

11 under the national flood insurance program and does not 

12 result in any loss covered by a personal lines residential 

13 property insurance policy—

14 ‘‘(1) this section shall not apply; and 

15 ‘‘(2) the provisions of the Standard Flood In16 surance Policy under the national flood insurance 

17 program and the appeals process established pursu18 ant to section 205 of the Bunning-Bereueter19 Blumenauer Flood Insurance Reform Act of 2004 

20 (Public Law 108–264; 118 Stat. 726) and regula21 tions issued pursuant to such section shall apply ex22 clusively. 

23 ‘‘(i) REPRESENTATIVES OF DIRECTOR.—For pur24 poses of this section, the term ‘representatives of the Di25 rector’ means representatives of the national flood insur-
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1 ance program who participate in the appeals process es2 tablished pursuant to section 205 of the Bunning3 Bereueter-Blumenauer Flood Insurance Reform Act of 

4 2004 (Public Law 108–264; 118 Stat. 726) and regula5 tions issued pursuant to such section.’’. 

6 SEC. 12. FEMA REPORTS ON FINANCIAL STATUS OF INSUR7 ANCE PROGRAM. 

8 Section 1320 of the National Flood Insurance Act of 

9 1968 (42 U.S.C. 4027) is amended—

10 (1) in the section heading, by striking ‘‘RE11 PORT TO THE PRESIDENT’’ and inserting ‘‘RE12 PORTS’’; 

13 (2) in subsection (a), by striking ‘‘IN GEN14 ERAL’’ and inserting ‘‘BIENNIAL REPORT TO PRESI15 DENT’’; and 

16 (3) by adding at the end the following new sub17 section: 

18 ‘‘(c) SEMIANNUAL REPORTS TO CONGRESS ON FI19 NANCIAL STATUS.—Not later than June 30 and December 

20 31 of each year, the Director shall submit a report to the 

21 Congress regarding the financial status of the national 

22 flood insurance program under this title. Each such report 

23 shall describe the financial status of the National Flood 

24 Insurance Fund and current and projected levels of 
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1 claims, premium receipts, expenses, and borrowing under 

2 the program.’’. 

3 SEC. 13. EXTENSION OF PILOT PROGRAM FOR MITIGATION 

4 OF SEVERE REPETITIVE LOSS PROPERTIES. 

5 Section 1361A of the National Flood Insurance Act 

6 of 1968 (42 U.S.C. 4102a) is amended as follows: 

7 (1) FUNDING.—In subsection (k)(1), by strik8 ing ‘‘and 2009’’ and inserting ‘‘2009, 2010, and 

9 2011’’. 

10 (2) TERMINATION.—In subsection (l), by strik11 ing ‘‘September 30, 2009’’ and inserting ‘‘September 

12 30, 2011’’. 

13 SEC. 14. NOTICE OF AVAILABILITY OF FLOOD INSURANCE 

14 AND ESCROW IN RESPA GOOD FAITH ESTI15 MATE. 

16 Subsection (c) of section 5 of the Real Estate Settle17 ment Procedures Act of 1974 (12 U.S.C. 2604(c)) is 

18 amended by adding at the end the following new sentence: 

19 ‘‘Each such good faith estimate shall include the following 

20 conspicuous statements: (1) that flood insurance coverage 

21 for residential real estate is generally available under the 

22 National Flood Insurance Program whether or not the 

23 real estate is located in an area having special flood haz24 ards and that, to obtain such coverage, a home owner or 

25 purchaser should contact a property insurance agent, 
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1 broker, or company; and (2) that the escrowing of flood 

2 insurance payments is required for many loans under sec3 tion 102(d) of the Flood Disaster Protection Act of 1973, 

4 and may be a convenient and available option with respect 

5 to other loans.’’. 

6 SEC. 15. REITERATION OF FEMA RESPONSIBILITIES UNDER 

7 2004 REFORM ACT. 

8 (a) APPEALS PROCESS.—As directed in section 205 

9 of the Bunning-Bereuter-Blumenauer Flood Insurance 

10 Reform Act of 2004 (42 U.S.C. 4011 note), the Director 

11 of the Federal Emergency Management Agency is again 

12 directed to, not later than 90 days after the date of the 

13 enactment of this Act, establish an appeals process 

14 through which holders of a flood insurance policy may ap15 peal the decisions, with respect to claims, proofs of loss, 

16 and loss estimates relating to such flood insurance policy 

17 as required by such section. 

18 (b) MINIMUM TRAINING AND EDUCATION REQUIRE19 MENTS.—The Director of the Federal Emergency Man20 agement Agency is directed to continue to work with the 

21 insurance industry, State insurance regulators, and other 

22 interested parties to implement the minimum training and 

23 education standards for all insurance agents who sell flood 

24 insurance policies that were established by the Director 

25 under the notice published September 1, 2005 (70 Fed. 
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1 Reg. 52117) pursuant to section 207 of the Bunning-Be2 reuter-Blumenauer Flood Insurance Reform Act of 2004 

3 (42 U.S.C. 4011 note). 

4 (c) REPORT.—Not later than the expiration of the 6-

5 month period beginning on the date of the enactment of 

6 this Act, the Director of the Federal Emergency Manage7 ment Agency shall submit a report to the Congress de8 scribing the implementation of each provision of the 

9 Bunning-Bereuter-Blumenauer Flood Insurance Reform 

10 Act of 2004 (Public Law 108–264) and identifying each 

11 regulation, order, notice, and other material issued by the 

12 Director in implementing each such provision. 

13 SEC. 16. UPDATING OF FLOOD MAPS AND ELEVATION 

14 STANDARDS. 

15 (a) FLOOD MAPPING PROGRAM.—Section 1360 of 

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

17 4101) is amended by adding at the end the following new 

18 subsection: 

19 ‘‘(k) PROGRAM TO REVIEW, UPDATE, AND MAINTAIN

20 FLOOD INSURANCE PROGRAM MAPS.—

21 ‘‘(1) IN GENERAL.—The Director, in coordina22 tion with the Technical Mapping Advisory Council 

23 established pursuant to section 576 of the National 

24 Flood Insurance Reform Act of 1994 (42 U.S.C. 

25 4101 note) and section 16(c) of the Flood Insurance 
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1 Reform and Modernization Act of 2006, shall estab2 lish a program under which the Director shall re3 view, update, and maintain national flood insurance 

4 program rate maps in accordance with this sub5 section. 

6 ‘‘(2) INCLUSIONS.—

7 ‘‘(A) COVERED AREAS.—Each map up8 dated under this subsection shall include a de9 piction of—

10 ‘‘(i) the 500-year floodplain; 

11 ‘‘(ii) areas that could be inundated as 

12 a result of the failure of a levee, as deter13 mined by the Director; and 

14 ‘‘(iii) areas that could be inundated as 

15 a result of the failure of a dam, as identi16 fied under the National Dam Safety Pro17 gram Act (33 U.S.C. 467 et seq.). 

18 ‘‘(B) OTHER INCLUSIONS.—In updating 

19 maps under this subsection, the Director may 

20 include—

21 ‘‘(i) any relevant information on 

22 coastal inundation from—

23 ‘‘(I) an applicable inundation 

24 map of the Corps of Engineers; and 
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1 ‘‘(II) data of the National Oce2 anic and Atmospheric Administration 

3 relating to storm surge modeling; 

4 ‘‘(ii) any relevant information of the 

5 Geographical Service on stream flows, wa6 tershed characteristics, and topography 

7 that is useful in the identification of flood 

8 hazard areas, as determined by the Direc9 tor; and 

10 ‘‘(iii) a description of any hazard that 

11 might impact flooding, including, as deter12 mined by the Director—

13 ‘‘(I) land subsidence and coastal 

14 erosion areas; 

15 ‘‘(II) sediment flow areas; 

16 ‘‘(III) mud flow areas; 

17 ‘‘(IV) ice jam areas; and 

18 ‘‘(V) areas on coasts and inland 

19 that are subject to the failure of 

20 structural protective works, such as 

21 levees, dams, and floodwalls. 

22 ‘‘(3) STANDARDS.—In updating and maintain23 ing maps under this subsection, the Director shall 

24 establish standards to—

25 ‘‘(A) ensure that maps are adequate for—
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•HR 4973 EH 

1 ‘‘(i) flood risk determinations; and 

2 ‘‘(ii) use by State and local govern3 ments in managing development to reduce 

4 the risk of flooding; 

5 ‘‘(B) facilitate the Director, in conjunction 

6 with State and local governments, to identify 

7 and use consistent methods of data collection 

8 and analysis in developing maps for commu9 nities with similar flood risks, as determined by 

10 the Director; and 

11 ‘‘(C) ensure that emerging weather fore12 casting technology is used, where practicable, in 

13 flood map evaluations and the identification of 

14 potential risk areas. 

15 ‘‘(4) HURRICANES KATRINA AND RITA MAPPING

16 PRIORITY.—In updating and maintaining maps 

17 under this subsection, the Director shall—

18 ‘‘(A) give priority to the updating and 

19 maintenance of maps of coastal areas affected 

20 by Hurricane Katrina or Hurricane Rita to pro21 vide guidance with respect to hurricane recovery 

22 efforts; and 

23 ‘‘(B) use the process of updating and 

24 maintaining maps under subparagraph (A) as a 
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•HR 4973 EH 

1 model for updating and maintaining other 

2 maps. 

3 ‘‘(5) EDUCATION PROGRAM.—The Director 

4 shall, after each update to a flood insurance pro5 gram rate map, in consultation with the chief execu6 tive officer of each community affected by the up7 date, conduct a program to educate each such com8 munity about the update to the flood insurance pro9 gram rate map and the effects of the update. 

10 ‘‘(6) ANNUAL REPORT.—Not later than June 

11 30 of each year, the Director shall submit a report 

12 to the Congress describing, for the preceding 12-

13 month period, the activities of the Director under 

14 the program under this section and the reviews and 

15 updates of flood insurance program rate maps con16 ducted under the program. Each such annual report 

17 shall contain the most recent report of the Technical 

18 Mapping Advisory Council pursuant to section 

19 576(c)(3) of the National Flood Insurance Reform 

20 Act of 1994 (42 U.S.C. 4101 note). 

21 ‘‘(7) AUTHORIZATION OF APPROPRIATIONS.—

22 There is authorized to be appropriated to the Direc23 tor to carry out this subsection $300,000,000 for 

24 each of fiscal years 2007 through 2012.’’. 
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1 (b) ONE-TIME REVIEW AND UPDATING OF ALL

2 FLOOD ZONES AND ANNUAL MAP MODERNIZATION RE3 PORTS.—

4 (1) REQUIRED REVISION.—The Director of the 

5 Federal Emergency Management Agency shall, as 

6 soon as possible after the date of the enactment of 

7 this Act, conduct a review of all floodplain areas and 

8 flood-risk zones identified, delineated, or established 

9 pursuant to such section 1360 and shall revise and 

10 update all such areas and zones. The revisions and 

11 updating under this paragraph shall not be subject 

12 to the requirements of section 1360(k) of the Na13 tional Flood Insurance Act of 1968 (as added by 

14 subsection (a) of this section). 

15 (2) CERTIFICATION OF COMPLETION.—Upon 

16 completing the review, revision, and updating re17 quired under paragraph (1), the Director shall sub18 mit to the Congress a report certifying such comple19 tion. 

20 (3) ANNUAL REPORTS.—During the period that 

21 ends upon certification under paragraph (2) of this 

22 subsection by the Director, the Director shall include 

23 in the annual report required under section 

24 1360(k)(5) of the National Flood Insurance Act of 

25 1968 (as added by subsection (a) of this section) a 
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1 description of the extent to which the review and up2 dating required under paragraph (1) of this sub3 section has been completed. 

4 (c) REESTABLISHMENT OF TECHNICAL MAPPING

5 ADVISORY COUNCIL.—

6 (1) REESTABLISHMENT.—There is reestab7 lished the Technical Mapping Advisory Council, in 

8 accordance with this subsection and section 576 of 

9 the National Flood Insurance Reform Act of 1994 

10 (42 U.S.C. 4101 note). 

11 (2) MEMBERSHIP.—Paragraph (1) of section 

12 576(b) of the National Flood Insurance Reform Act 

13 of 1994 (42 U.S.C. 4101 note) is amended—

14 (A) by redesignating subparagraphs (E), 

15 (F), (G), (H), (I), and (J) as subparagraphs 

16 (F), (G), (H), (K), (M), and (N), respectively; 

17 (B) by inserting after subparagraph (D) 

18 the following new subparagraph: 

19 ‘‘(E) a representative of the Corps of Engi20 neers of the United States Army;’’; 

21 (C) by inserting after subparagraph (H) 

22 (as so redesignated by subparagraph (A) of this 

23 paragraph) the following new subparagraphs: 

24 ‘‘(I) a representative of local or regional 

25 flood and stormwater agencies; 
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•HR 4973 EH 

1 ‘‘(J) a representative of State geographic 

2 information coordinators;’’; and 

3 (D) by inserting after subparagraph (K) 

4 (as so redesignated by subparagraph (A) of this 

5 paragraph) the following new subparagraph: 

6 ‘‘(L) a representative of flood insurance 

7 servicing companies;’’. 

8 (3) APPOINTMENT.—The Director of the Fed9 eral Emergency Management Agency, or the Direc10 tor’s designee, shall take action as soon as possible 

11 after the date of the enactment of this Act to ap12 point the members of the Technical Mapping Advi13 sory Council pursuant to section 576(b)(1) of the 

14 National Flood Insurance Reform Act of 1994, as 

15 amended by paragraph (2) of this subsection. 

16 (4) DUTIES.—Subsection (c) of section 576 of 

17 the National Flood Insurance Reform Act of 1994 

18 (42 U.S.C. 4101 note) is amended to read as fol19 lows: 

20 ‘‘(c) DUTIES.—The Council shall—

21 ‘‘(1) make recommendations to the Director for 

22 improvements to the flood map modernization pro23 gram under section 1360(k) of the National Flood 

24 Insurance Act of 1968 (42 U.S.C. 41010(k)); 
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1 ‘‘(2) make recommendations to the Director for 

2 maintaining a modernized inventory of flood hazard 

3 maps and information; and 

4 ‘‘(3) submit an annual report to the Director 

5 that contains a description of the activities and rec6 ommendations of the Council.’’. 

7 (5) TERMINATION.—Subsection (k) of section 

8 576 of the National Flood Insurance Reform Act of 

9 1994 (42 U.S.C. 4101 note) is amended by striking 

10 ‘‘under subsection (b)(1)’’ and inserting ‘‘pursuant 

11 to subsection (b)(1) of this section and section 

12 16(c)(3) of the Flood Insurance Reform and Mod13 ernization Act of 2006’’. 

14 (d) POST-DISASTER FLOOD ELEVATION DETER15 MINATIONS.—Section 1361 of the National Flood Insur16 ance Act of 1968 (42 U.S.C. 4101), as amended by the 

17 preceding provisions of this Act, is further amended by 

18 adding at the end the following new subsection: 

19 ‘‘(l) INTERIM POST-DISASTER FLOOD ELE20 VATIONS.—

21 ‘‘(1) AUTHORITY.—Notwithstanding any other 

22 provision of this section or section 1363, the Direc23 tor may, after any flood-related disaster, establish by 

24 order interim flood elevation requirements for pur-
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•HR 4973 EH 

1 poses of the national flood insurance program for 

2 any areas affected by such flood-related disaster. 

3 ‘‘(2) EFFECTIVENESS.—Such interim elevation 

4 requirements for such an area shall take effect im5 mediately upon issuance and may remain in effect 

6 until the Director establishes new flood elevations 

7 for such area in accordance with section 1363 or the 

8 Director provides otherwise.’’. 

9 (e) GAO STUDY OF LOW-INCOME DISCOUNT.—

10 (1) IN GENERAL.—The Comptroller General of 

11 the United States shall conduct a study of potential 

12 methods, practices, and incentives that would in13 crease the extent to which low-income families (as 

14 such term is defined in section 3(b) of the United 

15 States Housing Act of 1937 (42 U.S.C. 1437a(b))) 

16 that own residential properties located within areas 

17 having special flood hazards purchase flood insur18 ance coverage under the national flood insurance 

19 program. In conducting the study the Comptroller 

20 General shall analyze—

21 (A) the feasibility and effectiveness of pro22 viding such coverage to low-income families at 

23 rates that are discounted from the rates at 

24 which such coverage is otherwise provided, the 

25 amounts by which such rates should be dis-
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•HR 4973 EH 

1 counted to ensure that coverage is affordable to 

2 such families and to encourage purchase of cov3 erage by such families, and the effects of such 

4 discounts on the national flood insurance pro5 gram; and 

6 (B) the extent to which residential prop7 erties occupied by low-income families would be 

8 affected by expanding the mandatory purchase 

9 requirements of the national flood insurance 

10 program to the areas included in the national 

11 flood insurance program rate maps pursuant to 

12 section 1360(k) of the National Flood Insur13 ance Act of 1968 (42 U.S.C. 4101(k)), as 

14 amended by subsection (a) of this section. 

15 (2) REPORT.—The Comptroller General shall 

16 submit to the Congress a report setting forth the 

17 conclusions of the study under this subsection not 

18 later than 12 months after the date of the enact19 ment of this Act. 

20 SEC. 17. NOTIFICATION AND APPEAL OF MAP CHANGES; 

21 NOTIFICATION OF ESTABLISHMENT OF 

22 FLOOD ELEVATIONS. 

23 Section 1363 of the National Flood Insurance Act of 

24 1968 (42 U.S.C. 4104) is amended by striking the section 
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1 designation and all that follows through the end of sub2 section (a) and inserting the following: 

3 ‘‘SEC. 1363. (a) In establishing projected flood ele4 vations for land use purposes with respect to any commu5 nity pursuant to section 1361, the Director shall first pro6 pose such determinations—

7 ‘‘(1) by providing the chief executive officer of 

8 each community affected by the proposed elevations, 

9 by certified mail, with a return receipt requested, 

10 notice of the elevations, including a copy of the maps 

11 for the elevations for such community and a state12 ment explaining the process under this section to ap13 peal for changes in such elevations; 

14 ‘‘(2) by causing notice of such elevations to be 

15 published in the Federal Register, which notice shall 

16 include information sufficient to identify the ele17 vation determinations and the communities affected, 

18 information explaining how to obtain copies of the 

19 elevations, and a statement explaining the process 

20 under this section to appeal for changes in the ele21 vations; 

22 ‘‘(3) by publishing the elevations in a prominent 

23 local newspaper; and 
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•HR 4973 EH 

1 ‘‘(4) by providing written notification, by first 

2 class mail, to each owner of real property affected by 

3 the proposed elevations of—

4 ‘‘(A) the status of such property, both 

5 prior to and after the effective date of the pro6 posed determination, with respect to flood zone 

7 and flood insurance requirements under this 

8 Act and the Flood Disaster Protection Act of 

9 1973; 

10 ‘‘(B) the process under this section to ap11 peal a flood elevation determination; and 

12 ‘‘(C) the mailing address and phone num13 ber of a person the owner may contact for more 

14 information or to initiate an appeal.’’. 

15 SEC. 18. NATIONAL LEVEE INVENTORY. 

16 To identify levees for the national flood insurance 

17 program, the Director of the Federal Emergency Manage18 ment Agency shall maintain and periodically publish an 

19 inventory of levees in the United States, and shall consult 

20 with the Secretary of the Army as necessary to maintain 

21 such inventory. 

22 SEC. 19. CLARIFICATION OF REPLACEMENT COST PROVI23 SIONS, FORMS, AND POLICY LANGUAGE. 

24 Not later than the expiration of the 3-month period 

25 beginning on the date of the enactment of this Act, the 
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•HR 4973 EH 

1 Director of the Federal Emergency Management Agency 

2 shall—

3 (1) in plain language using easy to understand 

4 terms and concepts, issue regulations, and revise any 

5 materials made available by such Agency, to clarify 

6 the applicability of replacement cost coverage under 

7 the national flood insurance program; 

8 (2) in plain language using easy to understand 

9 terms and concepts, revise any regulations, forms, 

10 notices, guidance, and publications relating to the 

11 full cost of repair or replacement under the replace12 ment cost coverage to more clearly describe such 

13 coverage to flood insurance policyholders and infor14 mation to be provided by such policyholders relating 

15 to such coverage, and to avoid providing misleading 

16 information to such policyholders; 

17 (3) revise the language in standard flood insur18 ance policies under such program regarding rating 

19 and coverage descriptions in a manner that is con20 sistent with language used widely in other home21 owners and property and casualty insurance policies, 

22 including such language regarding classification of 

23 buildings, basements, crawl spaces, detached ga24 rages, enclosures below elevated buildings, and re25 placement costs; and 
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•HR 4973 EH 

1 (4) include in each standard flood insurance 

2 policy a one-page description of the policy using 

3 plain language and easy to understand terms and 

4 concepts. 

5 SEC. 20. AUTHORIZATION OF ADDITIONAL FEMA STAFF. 

6 Notwithstanding any other provision of law, the Di7 rector of the Federal Emergency Management Agency 

8 may employ such additional staff of such Agency as may 

9 be necessary to carry out all of the responsibilities of the 

10 Director pursuant to this Act and the amendments made 

11 by this Act. There are authorized to be appropriated to 

12 Director such sums as may be necessary for costs of em13 ploying such additional staff. 

14 SEC. 21. INVESTIGATION OF WRITE-YOUR-OWN INSURERS’ 

15 ADJUSTMENT OF CLAIMS RELATING TO HUR16 RICANE KATRINA. 

17 (a) INVESTIGATION.—The Inspector General of the 

18 Department of Homeland Security shall carry out an in19 vestigation of insurers making flood insurance coverage 

20 available under the Write-Your-Own program pursuant to 

21 section 1345 of the National Flood Insurance Act of 1968 

22 (42 U.S.C. 4081) and subpart C of part 62 of title 44, 

23 Code of Federal Regulations to determine—

24 (1) whether any such insurers, in adjusting and 

25 settling claims resulting from Hurricane Katrina, 
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1 improperly attributed damages from such hurricane 

2 to flooding covered under coverage provided under 

3 the national flood insurance program rather than to 

4 windstorms covered by other coverage provided by 

5 such insurers or by windstorm insurance pools in 

6 which such insurers participated; and 

7 (2) the extent to which such improper attribu8 tion of damages occurred. 

9 (b) REPORT.—Not later than the expiration of the 

10 6-month period that begins upon the date of the enact11 ment of this Act, the Inspector General of the Department 

12 of Homeland Security shall submit to the Congress a re13 port setting forth the conclusions of the investigation pur14 suant to subsection (a). 

15 SEC. 22. ELIGIBILITY OF PROPERTY DEMOLITION AND RE16 BUILDING FOR MITIGATION ASSISTANCE 

17 PROGRAM. 

18 Section 1366(e)(5)(B) of the National Flood Insur19 ance Act of 1968 (42 U.S.C. 4104c(e)(5)(B)) is amended 

20 by inserting after ‘‘flood risk’’ the following: ‘‘, or the dem21 olition and rebuilding of structures located in such areas 

22 to at least Base Flood Elevation or any greater elevation 

23 required by any local ordinance’’. 
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1 SEC. 23. SAMPLING METHODS FOR QUALITY ASSURANCE. 

2 Section 1345 of the National Flood Insurance Act of 

3 1968 (42 U.S.C. 4081) is amended by adding at the end 

4 the following new subsection: 

5 ‘‘(d) SAMPLING METHODS FOR QUALITY ASSUR6 ANCE.—In selecting the cases and claims for operational 

7 reviews and claims re-inspections regarding the national 

8 flood insurance program under this title, the Director shall 

9 use a statistically valid probability sample whose results 

10 can be generalized to the entire population of reviews and 

11 claims from which the sample is drawn and whose sam12 pling error can be quantified.’’. 

13 SEC. 24. EXTENSION OF DEADLINE FOR FILING PROOF OF 

14 LOSS. 

15 (a) IN GENERAL.—Section 1312 of the National 

16 Flood Insurance Act of 1968 (42 U.S.C. 4019) is amend17 ed—

18 (1) by inserting ‘‘(a) PAYMENT.—’’ before ‘‘The 

19 Director’’; and 

20 (2) by adding at the end the following new sub21 section: 

22 ‘‘(b) FILING DEADLINE FOR PROOF OF LOSS.—

23 ‘‘(1) IN GENERAL.—In establishing any require24 ments regarding notification, proof, or approval of 

25 claims for damage to or loss of property which is 

26 covered by flood insurance made available under this 
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1 title, the Director may not require an insured to no2 tify the Director of such damage or loss, submit a 

3 claim for such damage or loss, or certify to or sub4 mit proof of such damage or loss, before the expira5 tion of the 180-day period that begins on the date 

6 that such damage or loss occurred. 

7 ‘‘(2) EXCEPTIONS.— Notwithstanding any 

8 deadline established in accordance with paragraph 

9 (1), the Director may not deny a claim for damage 

10 or loss described in such paragraph solely for failure 

11 to meet such deadline if the insured demonstrates 

12 any good cause for such failure.’’. 

13 (b) APPLICABILITY.—Subsection (b) of section 1312 

14 of the National Flood Insurance Act of 1968, as added 

15 by subsection (a)(2) of this section, shall apply with re16 spect to any claim under which the damage to or loss of 

17 property occurred on or after September 18, 2003.

Passed the House of Representatives June 27, 2006. 

Attest:

Clerk. 

109TH CONGRESS 

2D SESSION H. R. 4973

AN ACT

To restore the financial solvency of the national 

flood insurance program, and for other purposes.