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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4973 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
109th CONGRESS
  2d Session
                                H. R. 4973

_______________________________________________________________________

                                 AN ACT

 
   To restore the financial solvency of the national flood insurance 
                    program, and for other purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Flood Insurance 
Reform and Modernization Act of 2006''.
    (b) Table of Contents.--The table of contents for 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 non-Federally 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.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) flooding has been shown to occur in all 50 States;
            (2) the aggregate amount of the flood insurance claims 
        resulting from Hurricane Katrina, Hurricane Rita, and other 
        recent events has exceeded the aggregate amount of all claims 
        previously paid in the history of the national flood insurance 
        program, requiring a significant increase in the program's 
        borrowing authority;
            (3) flood insurance policyholders have a legitimate 
        expectation that they will receive fair and timely compensation 
        for losses covered under their policies;
            (4) substantial flooding has occurred, and will likely 
        occur again, outside the areas designated by the Federal 
        Emergency Management Agency as flood hazard areas;
            (5) properties located in low- to moderate-risk areas are 
        eligible to purchase flood insurance policies with premiums as 
        low as $112 a year;
            (6) about 450,000 vacation homes, second homes, and 
        commercial properties are subsidized and are not paying 
        actuarially sound rates for flood insurance;
            (7) phasing out subsidies currently extended to vacation 
        homes, second homes, and commercial properties would result in 
        estimated average savings to the taxpayers of the United States 
        and the national flood insurance program of $335,000,000 each 
        year;
            (8) the maximum coverage limits for flood insurance 
        policies should be increased to reflect inflation and the 
        increased cost of housing;
            (9) significant reforms to the national flood insurance 
        program required in the Bunning-Bereuter-Blumenauer Flood 
        Insurance Reform Act of 2004 have yet to be implemented; and
            (10) in addition to reforms required in the Bunning-
        Bereuter-Blumenauer Flood Insurance Reform Act of 2004, the 
        national flood insurance program requires a modernized and 
        updated administrative model to ensure that the program is 
        solvent and the people of the United States have continued 
        access to flood insurance.
    (b) Purposes.--The purposes of this Act are--
            (1) to protect the integrity of the national flood 
        insurance program by fully funding existing legal obligations 
        expected by existing policyholders who have paid policy 
        premiums in return for flood insurance coverage;
            (2) to increase incentives for homeowners and communities 
        to participate in the national flood insurance program and to 
        improve oversight to ensure full participation in the program 
        for owners of properties for which such participation is 
        mandatory; and
            (3) to increase awareness of homeowners of flood risks and 
        improve the quality of information regarding such risks 
        provided to homeowners.

SEC. 3. STUDY REGARDING STATUS OF PRE-FIRM PROPERTIES AND MANDATORY 
              PURCHASE REQUIREMENT FOR NATURAL 100-YEAR FLOODPLAIN AND 
              NON-FEDERALLY RELATED LOANS.

    (a) In General.--The Comptroller General shall conduct a study as 
follows:
            (1) Pre-firm properties.--The study shall determine the 
        status of the national flood insurance program, as of the date 
        of the enactment of this Act, with respect to the provision of 
        flood insurance coverage for pre-FIRM properties (as such term 
        is defined in section 578(b) of the National Flood Insurance 
        Reform Act of 1994 (42 U.S.C. 4014 note)), which shall include 
        determinations of--
                    (A) the number of pre-FIRM properties for which 
                coverage is provided and the extent of such coverage;
                    (B) the cost of providing coverage for such pre-
                FIRM properties to the national flood insurance 
                program;
                    (C) the anticipated rate at which such pre-FIRM 
                properties will cease to be covered under the program;
                    (D) the effects that implementation of the Bunning-
                Bereuter-Blumenauer Flood Insurance Reform Act of 2004 
                will have on the national flood insurance program 
                generally and on coverage of pre-FIRM properties under 
                the program; and
                    (E) the extent to which eligibility standards for 
                pre-FIRM properties were inconsistent and resulted in 
                disparities in coverage among such properties.
            (2) Mandatory purchase requirement for natural 100-year 
        floodplain.--The study shall assess the impact, effectiveness, 
        and feasibility of amending the provisions of the Flood 
        Disaster Protection Act of 1973 regarding the properties that 
        are subject to the mandatory flood insurance coverage purchase 
        requirements under such Act to extend such requirements to 
        properties located in any area that would be designated as an 
        area having special flood hazards but for the existence of a 
        structural flood protection system, and shall determine--
                    (A) the regulatory, financial and economic impacts 
                of extending such mandatory purchase requirements on 
                the costs of homeownership, the actuarial soundness of 
                the national flood insurance program, the Federal 
                Emergency Management Agency, local communities, 
                insurance companies, and local land use;
                    (B) the effectiveness of extending such mandatory 
                purchase requirements in protecting homeowners from 
                financial loss and in protecting the financial 
                soundness of the national flood insurance program; and
                    (C) any impact on lenders of complying with or 
                enforcing such extended mandatory requirements.
            (3) Mandatory purchase requirement for non-federally 
        related loans.--The study shall assess the impact, 
        effectiveness, and feasibility of, and basis under the 
        Constitution of the United States for, amending the provisions 
        of the Flood Disaster Protection Act of 1973 regarding the 
        properties that are subject to the mandatory flood insurance 
        coverage purchase requirements under such Act to extend such 
        requirements to any property that is located in any area having 
        special flood hazards and which secures the repayment of a loan 
        that is not described in paragraph (1), (2), or (3) of section 
        102(b) of such Act, and shall determine how best to administer 
        and enforce such a requirement, taking into consideration other 
        insurance purchase requirements under Federal and State law.
    (b) Report.--The Comptroller General shall submit a report to the 
Congress regarding the results and conclusions of the study under this 
subsection not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act.

SEC. 4. PHASE-IN OF ACTUARIAL RATES FOR NONRESIDENTIAL PROPERTIES, 
              CERTAIN PRE-FIRM PROPERTIES, AND NON-PRIMARY RESIDENCES.

    (a) In General.--Section 1308(c) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4015(c)) is amended--
            (1) by redesignating paragraph (2) as paragraph (4); and
            (2) by inserting after paragraph (1) the following new 
        paragraphs:
            ``(2) Nonresidential properties.--Any nonresidential 
        property.
            ``(3) Non-primary residences.--Any residential property 
        that is not the primary residence of an individual.
            ``(4) Recently purchased pre-firm properties.--Any property 
        that--
                    ``(A) has been constructed or substantially 
                improved and for which such construction or improvement 
                was started, as determined by the Director, before 
                December 31, 1974, or before the effective date of the 
                initial rate map published by the Director under 
                paragraph (2) of section 1360 for the area in which 
                such property is located, whichever is later; and
                    ``(B) is purchased after the date of the enactment 
                of the Flood Insurance Reform and Modernization Act of 
                2006.''.
    (b) Technical Amendments.--Section 1308 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4015) is amended--
            (1) in subsection (c)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``Subject only to the limitations provided 
                under paragraphs (1) and (2), the'' and inserting 
                ``The''; and
                    (B) in paragraph (1), by striking ``, except'' and 
                all that follows through ``subsection (e)''; and
            (2) in subsection (e), by striking ``paragraph (2) or (3)'' 
        and inserting ``paragraph (4)''.
    (c) Effective Date and Transition.--
            (1) Effective date.--The amendments made by subsections (a) 
        and (b) shall apply beginning on the submission to the 
        Congress, by the Director of the Federal Emergency Management 
        Agency, of the report required under section 16(b)(2), except 
        as provided in paragraph (2) of this subsection.
            (2) Transition.--In the case of any property described in 
        paragraph (2), (3), or (4) of section 1308(c) of the National 
        Flood Insurance Act of 1968, as amended by subsection (a) of 
        this section, that, on the effective date under paragraph (1) 
        of this subsection, is covered under a policy for flood 
        insurance made available under the national flood insurance 
        program for which the chargeable premium rates are less than 
        the applicable estimated risk premium rate under section 
        1307(a)(1) for the area in which the property is located, the 
        Director of the Federal Emergency Management Agency shall 
        increase the chargeable premium rates for such property over 
        time to such applicable estimated risk premium rate under 
        section 1307(a)(1). Such increase shall be made by increasing 
        the chargeable premium rates for the property (after 
        application of any increase in the premium rates otherwise 
        applicable to such property) by 15 percent (or such lesser 
        amount as may be necessary so that the chargeable rate does not 
        exceed such applicable estimated risk premium rate) once during 
        the 12-month period that begins upon the effective date under 
        paragraph (1) of this subsection and once every 12 months 
        thereafter until such increase is accomplished. The provisions 
        of paragraphs (2), (3), and (4) of such section 1308(c) shall 
        apply to such a property upon the accomplishment of such 
        increase and thereafter.

SEC. 5. WAITING PERIOD FOR EFFECTIVE DATE OF POLICIES.

    (a) Reduction.--Section 1306(c)(1) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4013(c)(1)) is amended by striking ``30-day'' 
and inserting ``15-day''.
    (b) Exception.--Section 1306(c)(2)(A) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4013(c)(2)(A)) is amended by inserting 
before the semicolon the following: ``or is in connection with the 
purchase or other transfer of the property for which the coverage is 
provided (regardless of whether a loan is involved in the purchase or 
transfer transaction).

SEC. 6. ENFORCEMENT.

     Section 102(f) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a(f)) is amended--
            (1) in paragraph (5)--
                    (A) in the first sentence, by striking ``$350'' and 
                inserting ``$2,000''; and
                    (B) in the last sentence, by striking ``$100,000'' 
                and inserting ``$1,000,000; except that such limitation 
                shall not apply to a regulated lending institution or 
                enterprise for a calendar year if, in any three (or 
                more) of the five calendar years immediately preceding 
                such calendar year, the total amount of penalties 
                assessed under this subsection against such lending 
                institution or enterprise was $1,000,000''; and
            (2) in paragraph (6), by adding after the period at the end 
        the following: ``No penalty may be imposed under this 
        subsection on a regulated lending institution or enterprise 
        that has made a good faith effort to comply with the 
        requirements of the provisions referred to in paragraph (2) or 
        for any non-material violation of such requirements.''.

SEC. 7. MAXIMUM COVERAGE LIMITS.

    Subsection (b) of section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013(b)) is amended--
            (1) in paragraph (2), by striking ``$250,000'' and 
        inserting ``$335,000'';
            (2) in paragraph (3), by striking ``$100,000'' and 
        inserting ``$135,000''; and
            (3) in paragraph (4), by striking ``$500,000'' each place 
        such term appears and inserting ``$670,000''.

SEC. 8. COVERAGE FOR ADDITIONAL LIVING EXPENSES, BASEMENT IMPROVEMENTS, 
              BUSINESS INTERRUPTION, AND REPLACEMENT COST OF CONTENTS.

    Subsection (b) of section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5)--
                    (A) by inserting ``pursuant to paragraph (2), (3), 
                or (4)'' after ``any flood insurance coverage''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(6) in the case of any residential property, each renewal 
        or new contract for flood insurance coverage shall provide not 
        less than $1,000 aggregate liability per dwelling unit for any 
        necessary increases in living expenses incurred by the insured 
        when losses from a flood make the residence unfit to live in, 
        which coverage shall be available only at chargeable rates that 
        are not less than the estimated premium rates for such coverage 
        determined in accordance with section 1307(a)(1);
            ``(7) in the case of any residential property, optional 
        coverage for additional living expenses described in paragraph 
        (6) shall be made available to every insured upon renewal and 
        every applicant in excess of the limits provided in paragraph 
        (6) in such amounts and at such rates as the Director shall 
        establish, except that such chargeable rates shall not be less 
        than the estimated premium rates for such coverage determined 
        in accordance with section 1307(a)(1);
            ``(8) in the case of any residential property, optional 
        coverage for losses, resulting from floods, to improvements and 
        personal property located in basements, crawl spaces, and other 
        enclosed areas under buildings that are not covered by primary 
        flood insurance coverage under this title, shall be made 
        available to every insured upon renewal and every applicant, 
        except that such coverage shall be made available only at 
        chargeable rates that are not less than the estimated premium 
        rates for such coverage determined in accordance with section 
        1307(a)(1);
            ``(9) in the case of any commercial property, optional 
        coverage for losses resulting from any partial or total 
        interruption of the insured's business caused by damage to, or 
        loss of, such property from a flood shall be made available to 
        every insured upon renewal and every applicant, except that--
                    ``(A) for purposes of such coverage, losses shall 
                be determined based on the profits the covered business 
                would have earned, based on previous financial records, 
                had the flood not occurred; and
                    ``(B) such coverage shall be made available only at 
                chargeable rates that are not less than the estimated 
                premium rates for such coverage determined in 
                accordance with section 1307(a)(1); and
            ``(10) in the case of any residential property and any 
        commercial property, optional coverage for the full replacement 
        costs of any contents related to the structure that exceed the 
        limits of coverage otherwise provided in this subsection shall 
        be made available to every insured upon renewal and every 
        applicant, except that such coverage shall be made available 
        only at chargeable rates that are not less than the estimated 
        premium rates for such coverage determined in accordance with 
        section 1307(a)(1).''.

SEC. 9. INCREASE IN ANNUAL LIMITATION ON PREMIUM INCREASES.

    Section 1308(e) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4015(e)) is amended by striking ``10 percent'' and inserting 
``15 percent''.

SEC. 10. INCREASE IN BORROWING AUTHORITY.

    (a) Borrowing Authority.--The first sentence of subsection (a) of 
section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4016(a)), as amended by the National Flood Insurance Program Further 
Enhanced Borrowing Authority Act of 2005 (Public Law 109-106; 119 Stat. 
2288), is amended by striking ``$20,775,000,000'' and inserting 
``$25,000,000,000''.
    (b) FEMA Report.--Not later than the expiration of the 6-month 
period beginning on the date of the enactment of this Act, the Director 
of the Federal Emergency Management Agency shall submit a report to the 
Congress setting forth a plan for repaying any amounts borrowed 
pursuant to increase in borrowing authority authorized under the 
amendments made by subsection (a).

SEC. 11. FEMA PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION 
              PROGRAMS.

    The National Flood Insurance Act of 1968 is amended by inserting 
after section 1313 (42 U.S.C. 4020) the following new section:

``SEC. 1314. FEMA PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION 
              PROGRAMS.

    ``(a) Requirement to Participate.--In the case of the occurrence of 
a natural catastrophe that may have resulted in flood damage covered by 
insurance made available under the National Flood Insurance Program and 
a loss covered by personal lines residential property insurance policy, 
upon request made by the insurance commissioner of a State (or such 
other official responsible for regulating the business of insurance in 
the State) for the participation of representatives of the Director in 
a program sponsored by such State for nonbinding mediation of insurance 
claims resulting from a natural catastrophe, the Director shall cause 
such representatives to participate in such State program, when claims 
under the national flood insurance program are involved, to expedite 
settlement of flood damage claims resulting from such catastrophe.''.
    ``(b) Extent of Participation.--Participation by representatives of 
the Director required under subsection (a) with respect to flood damage 
claims resulting from a natural catastrophe shall include--
            ``(1) providing adjusters certified for purposes of the 
        national flood insurance program who are authorized to settle 
        claims against such program resulting from such catastrophe in 
        amounts up to the limits of policies under such program;
            ``(2) requiring such adjusters to attend State-sponsored 
        mediation meetings regarding flood insurance claims resulting 
        from such catastrophe at times and places as may be arranged by 
        the State;
            ``(3) participating in good-faith negotiations toward the 
        settlement of such claims with policyholders of coverage made 
        available under the national flood insurance program; and
            ``(4) finalizing the settlement of such claims on behalf of 
        the national flood insurance program with such policyholders.
    ``(c) Coordination.--Representatives of the Director who 
participate pursuant to this section in a State-sponsored mediation 
program with respect to a natural catastrophe shall at all times 
coordinate their activities with insurance officials of the State and 
representatives of insurers for the purpose of consolidating and 
expediting the settlement of claims under the national flood insurance 
program resulting from such catastrophe at the earliest possible time.
    ``(d) Mediation Proceedings and Privileged Documents.--As a 
condition of the participation of Representatives of the Director 
pursuant to this section in State-sponsored mediation, all statements 
made and documents produced pursuant to such mediation involving 
representatives of the Director shall be deemed privileged and 
confidential settlement negotiations made in anticipation of 
litigation.
    ``(e) Effect of Participation on Liability, Right, and 
Obligations.--Participation of Representatives of the Director pursuant 
to this section in State-sponsored mediation shall not affect or expand 
the liability of any party in contract or in tort, nor shall it affect 
the rights or obligations of the parties as provided in the Standard 
Flood Insurance Policy under the national flood insurance program, 
regulations of the Federal Emergency Management Agency, this Act, or 
Federal common law.
    ``(f) Exclusive Federal Jurisdiction.--Participation of 
Representatives of the Director pursuant to this section in State-
sponsored mediation shall not alter, change or modify the original 
exclusive jurisdiction of United States courts as provided in this Act.
    ``(g) Cost Limitation.--Nothing in this section shall be construed 
to require the Director or representatives of the Director to pay 
additional mediation fees relating to flood claims associated with a 
State-sponsored mediation program in which representatives of the 
Director participate.
    ``(h) Exception.--In the case of the occurrence of a natural 
catastrophe that results in flood damage claims under the national 
flood insurance program and does not result in any loss covered by a 
personal lines residential property insurance policy--
            ``(1) this section shall not apply; and
            ``(2) the provisions of the Standard Flood Insurance Policy 
        under the national flood insurance program and the appeals 
        process established pursuant to section 205 of the Bunning-
        Bereueter-Blumenauer Flood Insurance Reform Act of 2004 (Public 
        Law 108-264; 118 Stat. 726) and regulations issued pursuant to 
        such section shall apply exclusively.
    ``(i) Representatives of Director.--For purposes of this section, 
the term `representatives of the Director' means representatives of the 
national flood insurance program who participate in the appeals process 
established pursuant to section 205 of the Bunning-Bereueter-Blumenauer 
Flood Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat. 726) 
and regulations issued pursuant to such section.''.

SEC. 12. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE PROGRAM.

    Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4027) is amended--
            (1) in the section heading, by striking ``REPORT TO THE 
        PRESIDENT'' and inserting ``REPORTS'';
            (2) in subsection (a), by striking ``In General'' and 
        inserting ``Biennial Report to President''; and
            (3) by adding at the end the following new subsection:
    ``(c) Semiannual Reports to Congress on Financial Status.--Not 
later than June 30 and December 31 of each year, the Director shall 
submit a report to the Congress regarding the financial status of the 
national flood insurance program under this title. Each such report 
shall describe the financial status of the National Flood Insurance 
Fund and current and projected levels of claims, premium receipts, 
expenses, and borrowing under the program.''.

SEC. 13. EXTENSION OF PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE 
              LOSS PROPERTIES.

    Section 1361A of the National Flood Insurance Act of 1968 (42 
U.S.C. 4102a) is amended as follows:
            (1) Funding.--In subsection (k)(1), by striking ``and 
        2009'' and inserting ``2009, 2010, and 2011''.
            (2) Termination.--In subsection (l), by striking 
        ``September 30, 2009'' and inserting ``September 30, 2011''.

SEC. 14. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW IN RESPA 
              GOOD FAITH ESTIMATE.

    Subsection (c) of section 5 of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by adding at the 
end the following new sentence: ``Each such good faith estimate shall 
include the following conspicuous statements: (1) that flood insurance 
coverage for residential real estate is generally available under the 
National Flood Insurance Program whether or not the real estate is 
located in an area having special flood hazards and that, to obtain 
such coverage, a home owner or purchaser should contact a property 
insurance agent, broker, or company; and (2) that the escrowing of 
flood insurance payments is required for many loans under section 
102(d) of the Flood Disaster Protection Act of 1973, and may be a 
convenient and available option with respect to other loans.''.

SEC. 15. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 REFORM ACT.

    (a) Appeals Process.--As directed in section 205 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
note), the Director of the Federal Emergency Management Agency is again 
directed to, not later than 90 days after the date of the enactment of 
this Act, establish an appeals process through which holders of a flood 
insurance policy may appeal the decisions, with respect to claims, 
proofs of loss, and loss estimates relating to such flood insurance 
policy as required by such section.
    (b) Minimum Training and Education Requirements.--The Director of 
the Federal Emergency Management Agency is directed to continue to work 
with the insurance industry, State insurance regulators, and other 
interested parties to implement the minimum training and education 
standards for all insurance agents who sell flood insurance policies 
that were established by the Director under the notice published 
September 1, 2005 (70 Fed. Reg. 52117) pursuant to section 207 of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 
U.S.C. 4011 note).
    (c) Report.--Not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act, the Director of the 
Federal Emergency Management Agency shall submit a report to the 
Congress describing the implementation of each provision of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public 
Law 108-264) and identifying each regulation, order, notice, and other 
material issued by the Director in implementing each such provision.

SEC. 16. UPDATING OF FLOOD MAPS AND ELEVATION STANDARDS.

    (a) Flood Mapping Program.--Section 1360 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4101) is amended by adding at the end 
the following new subsection:
    ``(k) Program to Review, Update, and Maintain Flood Insurance 
Program Maps.--
            ``(1) In general.--The Director, in coordination with the 
        Technical Mapping Advisory Council established pursuant to 
        section 576 of the National Flood Insurance Reform Act of 1994 
        (42 U.S.C. 4101 note) and section 16(c) of the Flood Insurance 
        Reform and Modernization Act of 2006, shall establish a program 
        under which the Director shall review, update, and maintain 
        national flood insurance program rate maps in accordance with 
        this subsection.
            ``(2) Inclusions.--
                    ``(A) Covered areas.--Each map updated under this 
                subsection shall include a depiction of--
                            ``(i) the 500-year floodplain;
                            ``(ii) areas that could be inundated as a 
                        result of the failure of a levee, as determined 
                        by the Director; and
                            ``(iii) areas that could be inundated as a 
                        result of the failure of a dam, as identified 
                        under the National Dam Safety Program Act (33 
                        U.S.C. 467 et seq.).
                    ``(B) Other inclusions.--In updating maps under 
                this subsection, the Director may include--
                            ``(i) any relevant information on coastal 
                        inundation from--
                                    ``(I) an applicable inundation map 
                                of the Corps of Engineers; and
                                    ``(II) data of the National Oceanic 
                                and Atmospheric Administration relating 
                                to storm surge modeling;
                            ``(ii) any relevant information of the 
                        Geographical Service on stream flows, watershed 
                        characteristics, and topography that is useful 
                        in the identification of flood hazard areas, as 
                        determined by the Director; and
                            ``(iii) a description of any hazard that 
                        might impact flooding, including, as determined 
                        by the Director--
                                    ``(I) land subsidence and coastal 
                                erosion areas;
                                    ``(II) sediment flow areas;
                                    ``(III) mud flow areas;
                                    ``(IV) ice jam areas; and
                                    ``(V) areas on coasts and inland 
                                that are subject to the failure of 
                                structural protective works, such as 
                                levees, dams, and floodwalls.
            ``(3) Standards.--In updating and maintaining maps under 
        this subsection, the Director shall establish standards to--
                    ``(A) ensure that maps are adequate for--
                            ``(i) flood risk determinations; and
                            ``(ii) use by State and local governments 
                        in managing development to reduce the risk of 
                        flooding;
                    ``(B) facilitate the Director, in conjunction with 
                State and local governments, to identify and use 
                consistent methods of data collection and analysis in 
                developing maps for communities with similar flood 
                risks, as determined by the Director; and
                    ``(C) ensure that emerging weather forecasting 
                technology is used, where practicable, in flood map 
                evaluations and the identification of potential risk 
                areas.
            ``(4) Hurricanes katrina and rita mapping priority.--In 
        updating and maintaining maps under this subsection, the 
        Director shall--
                    ``(A) give priority to the updating and maintenance 
                of maps of coastal areas affected by Hurricane Katrina 
                or Hurricane Rita to provide guidance with respect to 
                hurricane recovery efforts; and
                    ``(B) use the process of updating and maintaining 
                maps under subparagraph (A) as a model for updating and 
                maintaining other maps.
            ``(5) Education program.--The Director shall, after each 
        update to a flood insurance program rate map, in consultation 
        with the chief executive officer of each community affected by 
        the update, conduct a program to educate each such community 
        about the update to the flood insurance program rate map and 
        the effects of the update.
            ``(6) Annual report.--Not later than June 30 of each year, 
        the Director shall submit a report to the Congress describing, 
        for the preceding 12-month period, the activities of the 
        Director under the program under this section and the reviews 
        and updates of flood insurance program rate maps conducted 
        under the program. Each such annual report shall contain the 
        most recent report of the Technical Mapping Advisory Council 
        pursuant to section 576(c)(3) of the National Flood Insurance 
        Reform Act of 1994 (42 U.S.C. 4101 note).
            ``(7) Authorization of appropriations.--There is authorized 
        to be appropriated to the Director to carry out this subsection 
        $300,000,000 for each of fiscal years 2007 through 2012.''.
    (b) One-Time Review and Updating of All Flood Zones and Annual Map 
Modernization Reports.--
            (1) Required revision.--The Director of the Federal 
        Emergency Management Agency shall, as soon as possible after 
        the date of the enactment of this Act, conduct a review of all 
        floodplain areas and flood-risk zones identified, delineated, 
        or established pursuant to such section 1360 and shall revise 
        and update all such areas and zones. The revisions and updating 
        under this paragraph shall not be subject to the requirements 
        of section 1360(k) of the National Flood Insurance Act of 1968 
        (as added by subsection (a) of this section).
            (2) Certification of completion.--Upon completing the 
        review, revision, and updating required under paragraph (1), 
        the Director shall submit to the Congress a report certifying 
        such completion.
            (3) Annual reports.--During the period that ends upon 
        certification under paragraph (2) of this subsection by the 
        Director, the Director shall include in the annual report 
        required under section 1360(k)(5) of the National Flood 
        Insurance Act of 1968 (as added by subsection (a) of this 
        section) a description of the extent to which the review and 
        updating required under paragraph (1) of this subsection has 
        been completed.
    (c) Reestablishment of Technical Mapping Advisory Council.--
            (1) Reestablishment.--There is reestablished the Technical 
        Mapping Advisory Council, in accordance with this subsection 
        and section 576 of the National Flood Insurance Reform Act of 
        1994 (42 U.S.C. 4101 note).
            (2) Membership.--Paragraph (1) of section 576(b) of the 
        National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
        note) is amended--
                    (A) by redesignating subparagraphs (E), (F), (G), 
                (H), (I), and (J) as subparagraphs (F), (G), (H), (K), 
                (M), and (N), respectively;
                    (B) by inserting after subparagraph (D) the 
                following new subparagraph:
                    ``(E) a representative of the Corps of Engineers of 
                the United States Army;'';
                    (C) by inserting after subparagraph (H) (as so 
                redesignated by subparagraph (A) of this paragraph) the 
                following new subparagraphs:
                    ``(I) a representative of local or regional flood 
                and stormwater agencies;
                    ``(J) a representative of State geographic 
                information coordinators;''; and
                    (D) by inserting after subparagraph (K) (as so 
                redesignated by subparagraph (A) of this paragraph) the 
                following new subparagraph:
                    ``(L) a representative of flood insurance servicing 
                companies;''.
            (3) Appointment.--The Director of the Federal Emergency 
        Management Agency, or the Director's designee, shall take 
        action as soon as possible after the date of the enactment of 
        this Act to appoint the members of the Technical Mapping 
        Advisory Council pursuant to section 576(b)(1) of the National 
        Flood Insurance Reform Act of 1994, as amended by paragraph (2) 
        of this subsection.
            (4) Duties.--Subsection (c) of section 576 of the National 
        Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is 
        amended to read as follows:
    ``(c) Duties.--The Council shall--
            ``(1) make recommendations to the Director for improvements 
        to the flood map modernization program under section 1360(k) of 
        the National Flood Insurance Act of 1968 (42 U.S.C. 41010(k));
            ``(2) make recommendations to the Director for maintaining 
        a modernized inventory of flood hazard maps and information; 
        and
            ``(3) submit an annual report to the Director that contains 
        a description of the activities and recommendations of the 
        Council.''.
            (5) Termination.--Subsection (k) of section 576 of the 
        National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
        note) is amended by striking ``under subsection (b)(1)'' and 
        inserting ``pursuant to subsection (b)(1) of this section and 
        section 16(c)(3) of the Flood Insurance Reform and 
        Modernization Act of 2006''.
    (d) Post-Disaster Flood Elevation Determinations.--Section 1361 of 
the National Flood Insurance Act of 1968 (42 U.S.C. 4101), as amended 
by the preceding provisions of this Act, is further amended by adding 
at the end the following new subsection:
    ``(l) Interim Post-Disaster Flood Elevations.--
            ``(1) Authority.--Notwithstanding any other provision of 
        this section or section 1363, the Director may, after any 
        flood-related disaster, establish by order interim flood 
        elevation requirements for purposes of the national flood 
        insurance program for any areas affected by such flood-related 
        disaster.
            ``(2) Effectiveness.--Such interim elevation requirements 
        for such an area shall take effect immediately upon issuance 
        and may remain in effect until the Director establishes new 
        flood elevations for such area in accordance with section 1363 
        or the Director provides otherwise.''.
    (e) GAO Study of Low-Income Discount.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of potential methods, practices, 
        and incentives that would increase the extent to which low-
        income families (as such term is defined in section 3(b) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437a(b))) that 
        own residential properties located within areas having special 
        flood hazards purchase flood insurance coverage under the 
        national flood insurance program. In conducting the study the 
        Comptroller General shall analyze--
                    (A) the feasibility and effectiveness of providing 
                such coverage to low-income families at rates that are 
                discounted from the rates at which such coverage is 
                otherwise provided, the amounts by which such rates 
                should be discounted to ensure that coverage is 
                affordable to such families and to encourage purchase 
                of coverage by such families, and the effects of such 
                discounts on the national flood insurance program; and
                    (B) the extent to which residential properties 
                occupied by low-income families would be affected by 
                expanding the mandatory purchase requirements of the 
                national flood insurance program to the areas included 
                in the national flood insurance program rate maps 
                pursuant to section 1360(k) of the National Flood 
                Insurance Act of 1968 (42 U.S.C. 4101(k)), as amended 
                by subsection (a) of this section.
            (2) Report.--The Comptroller General shall submit to the 
        Congress a report setting forth the conclusions of the study 
        under this subsection not later than 12 months after the date 
        of the enactment of this Act.

SEC. 17. NOTIFICATION AND APPEAL OF MAP CHANGES; NOTIFICATION OF 
              ESTABLISHMENT OF FLOOD ELEVATIONS.

    Section 1363 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104) is amended by striking the section designation and all that 
follows through the end of subsection (a) and inserting the following:
    ``Sec. 1363. (a) In establishing projected flood elevations for 
land use purposes with respect to any community pursuant to section 
1361, the Director shall first propose such determinations--
            ``(1) by providing the chief executive officer of each 
        community affected by the proposed elevations, by certified 
        mail, with a return receipt requested, notice of the 
        elevations, including a copy of the maps for the elevations for 
        such community and a statement explaining the process under 
        this section to appeal for changes in such elevations;
            ``(2) by causing notice of such elevations to be published 
        in the Federal Register, which notice shall include information 
        sufficient to identify the elevation determinations and the 
        communities affected, information explaining how to obtain 
        copies of the elevations, and a statement explaining the 
        process under this section to appeal for changes in the 
        elevations;
            ``(3) by publishing the elevations in a prominent local 
        newspaper; and
            ``(4) by providing written notification, by first class 
        mail, to each owner of real property affected by the proposed 
        elevations of--
                    ``(A) the status of such property, both prior to 
                and after the effective date of the proposed 
                determination, with respect to flood zone and flood 
                insurance requirements under this Act and the Flood 
                Disaster Protection Act of 1973;
                    ``(B) the process under this section to appeal a 
                flood elevation determination; and
                    ``(C) the mailing address and phone number of a 
                person the owner may contact for more information or to 
                initiate an appeal.''.

SEC. 18. NATIONAL LEVEE INVENTORY.

    To identify levees for the national flood insurance program, the 
Director of the Federal Emergency Management Agency shall maintain and 
periodically publish an inventory of levees in the United States, and 
shall consult with the Secretary of the Army as necessary to maintain 
such inventory.

SEC. 19. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, AND 
              POLICY LANGUAGE.

    Not later than the expiration of the 3-month period beginning on 
the date of the enactment of this Act, the Director of the Federal 
Emergency Management Agency shall--
            (1) in plain language using easy to understand terms and 
        concepts, issue regulations, and revise any materials made 
        available by such Agency, to clarify the applicability of 
        replacement cost coverage under the national flood insurance 
        program;
            (2) in plain language using easy to understand terms and 
        concepts, revise any regulations, forms, notices, guidance, and 
        publications relating to the full cost of repair or replacement 
        under the replacement cost coverage to more clearly describe 
        such coverage to flood insurance policyholders and information 
        to be provided by such policyholders relating to such coverage, 
        and to avoid providing misleading information to such 
        policyholders;
            (3) revise the language in standard flood insurance 
        policies under such program regarding rating and coverage 
        descriptions in a manner that is consistent with language used 
        widely in other homeowners and property and casualty insurance 
        policies, including such language regarding classification of 
        buildings, basements, crawl spaces, detached garages, 
        enclosures below elevated buildings, and replacement costs; and
            (4) include in each standard flood insurance policy a one-
        page description of the policy using plain language and easy to 
        understand terms and concepts.

SEC. 20. AUTHORIZATION OF ADDITIONAL FEMA STAFF.

    Notwithstanding any other provision of law, the Director of the 
Federal Emergency Management Agency may employ such additional staff of 
such Agency as may be necessary to carry out all of the 
responsibilities of the Director pursuant to this Act and the 
amendments made by this Act. There are authorized to be appropriated to 
Director such sums as may be necessary for costs of employing such 
additional staff.

SEC. 21. INVESTIGATION OF WRITE-YOUR-OWN INSURERS' ADJUSTMENT OF CLAIMS 
              RELATING TO HURRICANE KATRINA.

    (a) Investigation.--The Inspector General of the Department of 
Homeland Security shall carry out an investigation of insurers making 
flood insurance coverage available under the Write-Your-Own program 
pursuant to section 1345 of the National Flood Insurance Act of 1968 
(42 U.S.C. 4081) and subpart C of part 62 of title 44, Code of Federal 
Regulations to determine--
            (1) whether any such insurers, in adjusting and settling 
        claims resulting from Hurricane Katrina, improperly attributed 
        damages from such hurricane to flooding covered under coverage 
        provided under the national flood insurance program rather than 
        to windstorms covered by other coverage provided by such 
        insurers or by windstorm insurance pools in which such insurers 
        participated; and
            (2) the extent to which such improper attribution of 
        damages occurred.
    (b) Report.--Not later than the expiration of the 6-month period 
that begins upon the date of the enactment of this Act, the Inspector 
General of the Department of Homeland Security shall submit to the 
Congress a report setting forth the conclusions of the investigation 
pursuant to subsection (a).

SEC. 22. ELIGIBILITY OF PROPERTY DEMOLITION AND REBUILDING FOR 
              MITIGATION ASSISTANCE PROGRAM.

    Section 1366(e)(5)(B) of the National Flood Insurance Act of 1968 
(42 U.S.C. 4104c(e)(5)(B)) is amended by inserting after ``flood risk'' 
the following: ``, or the demolition and rebuilding of structures 
located in such areas to at least Base Flood Elevation or any greater 
elevation required by any local ordinance''.

SEC. 23. SAMPLING METHODS FOR QUALITY ASSURANCE.

    Section 1345 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4081) is amended by adding at the end the following new subsection:
    ``(d) Sampling Methods for Quality Assurance.--In selecting the 
cases and claims for operational reviews and claims re-inspections 
regarding the national flood insurance program under this title, the 
Director shall use a statistically valid probability sample whose 
results can be generalized to the entire population of reviews and 
claims from which the sample is drawn and whose sampling error can be 
quantified.''.

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

    (a) In General.--Section 1312 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4019) is amended--
            (1) by inserting ``(a) Payment.--'' before ``The 
        Director''; and
            (2) by adding at the end the following new subsection:
    ``(b) Filing Deadline for Proof of Loss.--
            ``(1) In general.--In establishing any requirements 
        regarding notification, proof, or approval of claims for damage 
        to or loss of property which is covered by flood insurance made 
        available under this title, the Director may not require an 
        insured to notify the Director of such damage or loss, submit a 
        claim for such damage or loss, or certify to or submit proof of 
        such damage or loss, before the expiration of the 180-day 
        period that begins on the date that such damage or loss 
        occurred.
            ``(2) Exceptions.-- Notwithstanding any deadline 
        established in accordance with paragraph (1), the Director may 
        not deny a claim for damage or loss described in such paragraph 
        solely for failure to meet such deadline if the insured 
        demonstrates any good cause for such failure.''.
    (b) Applicability.--Subsection (b) of section 1312 of the National 
Flood Insurance Act of 1968, as added by subsection (a)(2) of this 
section, shall apply with respect to any claim under which the damage 
to or loss of 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.
```