I

107TH CONGRESS

1ST SESSION H. R. 1551

To amend the National Flood Insurance Act of 1968 to reduce losses caused

by repetitive flooding, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 24, 2001

Mr. BENTSEN introduced the following bill; which was referred to the

Committee on Financial Services

A BILL

To amend the National Flood Insurance Act of 1968 to

reduce losses caused by repetitive flooding, 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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Repetitive Flood Loss

5 Reduction Act of 2001’’.

6 SEC. 2. REPETITIVE FLOOD LOSS REDUCTION.

7 Chapter III of the National Flood Insurance Act of

8 1968 is amended—

9 (1) by amending section 1370(a)(2) (42 U.S.C.

10 4121(a)(2)) to read as follows:
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1 ‘‘(2) the terms ‘United States’ (when used in a

2 geographic sense) and ‘State’ mean the several

3 States and the District of Columbia;’’; and

4 (2) by adding after section 1367 (42 U.S.C.

5 4104d) the following new section:

6 ‘‘SEC. 1368. REPETITIVE FLOOD LOSS REDUCTION.

7 ‘‘(a) PROGRAM.—The Director shall carry out a pro8 gram to mitigate repetitive flood losses to structures—

9 ‘‘(1) by purchasing structures in accordance

10 with subsection (f); and

11 ‘‘(2) by making grants to States, communities,

12 and local flood management agencies for eligible

13 mitigation activities described in subsection (c) that

14 the Director determines—

15 ‘‘(A) have been proposed by the State,

16 community, or local flood management agency

17 applying for the grant to reduce repetitive flood

18 losses pursuant to an evaluation and analysis

19 (by the State, community, or local flood man20 agement agency) of flood risk and multiple

21 flood claim structures;

22 ‘‘(B) are likely to provide protection

23 against flood losses or substantially reduce

24 damage to structures covered by contracts for

25 flood insurance available under this title;
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1 ‘‘(C) are cost-effective to the National

2 Flood Insurance Fund;

3 ‘‘(D) are technically feasible and cost-effec4 tive; and

5 ‘‘(E) are consistent with other criteria that

6 are established by the Director to carry out the

7 purposes of this section.

8 ‘‘(b) LIMITATION ON GRANT AMOUNTS.—The Direc9 tor shall purchase structures and make grants under this

10 section to the extent amounts are available pursuant to

11 appropriation Acts, subject only to the absence of approv12 able applications for such grants or of willing sellers of

13 appropriate structures.

14 ‘‘(c) ELIGIBLE MITIGATION ACTIVITIES.—A grant

15 made under this section may be used only for eligible miti16 gation activities that are proposed in the application for

17 the grant and that are described as follows:

18 ‘‘(1) Elevation, relocation, demolition, or

19 floodproofing of structures (including public struc20 tures) located in areas having special flood hazards

21 or other areas of flood risk.

22 ‘‘(2) Minor physical mitigation efforts that do

23 not duplicate the flood prevention activities of other

24 Federal agencies, States, communities, or local flood

25 management agencies and that lessen the frequency
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1 or severity of flooding and decrease predicted flood

2 damages, which shall not include major flood control

3 projects such as dikes, levees, seawalls, groins, and

4 jetties unless the Director specifically determines in

5 approving a mitigation project that such projects are

6 the most cost-effective mitigation activities for pro7 tecting the National Flood Insurance Fund.

8 ‘‘(3) Other mitigation activities that the Direc9 tor considers appropriate and specifies in regula10 tions.

11 ‘‘(d) APPLICATION FOR GRANT.—

12 ‘‘(1) IN GENERAL.—To be eligible for a grant

13 under this section, a State, community, or local flood

14 management agency shall submit an application for

15 such grant which contains—

16 ‘‘(A) a description of the mitigation activi17 ties for which the grant is requested;

18 ‘‘(B) a description of the structures that

19 the mitigation activities will protect;

20 ‘‘(C) a statement of the aggregate amount

21 of payments made under the flood insurance

22 program under this title pursuant to insurance

23 claims for structures described pursuant to sub24 paragraph (C);
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1 ‘‘(D) information sufficient to demonstrate

2 that the mitigation activities are eligible under

3 subsection (c); and

4 ‘‘(E) any other information the Director

5 may reasonably require.

6 ‘‘(2) TIME FOR APPROVAL OR REJECTION.—

7 The Director shall approve or reject an application

8 for a grant under this subsection not later than 30

9 days after receiving such application.

10 ‘‘(e) MATCHING REQUIREMENT.—The Director shall

11 not provide a grant under this section in an amount ex12 ceeding 75 percent of the total cost of the mitigation ac13 tivities to be financed using such grant. The Director shall

14 not provide grants under this section for any mitigation

15 activities unless the State, community, or local flood man16 agement agency that receives the grant certifies, as the

17 Director shall require, that at least 25 percent of the total

18 cost of such mitigation activities will be provided from

19 non-Federal sources.

20 ‘‘(f) PURCHASE OF REPETITIVE SUBSTANTIAL

21 FLOOD LOSS STRUCTURES.—

22 ‘‘(1) OFFER TO PURCHASE.—Upon determining

23 that an insured structure is a repetitive substantial

24 flood loss structure, the Director shall offer to pur25 chase the structure at a price not greater than 125
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1 percent of the fair market value of the structure at

2 the time of the offer. Any such offer shall explicitly

3 state that the offer is contingent upon the avail4 ability of amounts under subsections (j) and (k) for

5 such purchase. Any such offer shall be held open,

6 and shall not be revocable, during the period that

7 the structure is covered by flood insurance under

8 this title.

9 ‘‘(2) ACCEPTANCE OF OFFER.—If an owner of

10 a repetitive substantial flood loss structure accepts

11 an offer to purchase the structure made under para12 graph (1), the Director shall purchase the structure,

13 if amounts are available pursuant to subsections (j)

14 and (k). The Director may request that the State or

15 the a local flood management agency that has juris16 diction with respect to the area in which the struc17 ture is located coordinate and carry out the purchase

18 for the Director under the terms of the offer.

19 ‘‘(3) INCREASED PREMIUMS FOR REFUSAL OF

20 OFFER.—Notwithstanding section 1308, if the owner

21 of a repetitive substantial flood loss structure does

22 not accept an offer made by the Director pursuant

23 to paragraph (1) during the period after the offer is

24 made having such duration as the Director shall es25 tablish, thereafter the chargeable premium rate with
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1 respect to the structure shall be an amount equal to

2 150 percent of the chargeable rate for the structure

3 at the time that the offer was made (as adjusted by

4 any other premium adjustments otherwise applicable

5 to the structure), except as provided in paragraph

6 (5), and the deductible in connection with insurance

7 provided under this title shall increase by $5,000

8 more than the deductible on such insurance at the

9 time that such offer was made.

10 ‘‘(4) NOTICE OF CONTINUED OFFER.—Upon

11 each renewal or modification of any flood insurance

12 coverage under this title for a repetitive substantial

13 flood loss structure, the Director shall notify the

14 owner that the offer made pursuant to paragraph

15 (1) is still open.

16 ‘‘(5) INCREASED PREMIUMS UPON SUBSEQUENT

17 FLOOD DAMAGE.—Notwithstanding section 1308, if

18 the owner of a repetitive substantial flood loss struc19 ture does not accept an offer made by the Director

20 pursuant to paragraph (1) and subsequently a flood

21 event causes substantial damage to the structure

22 after such event, the chargeable premium rate with

23 respect to the structure shall be an amount equal to

24 150 percent of the chargeable rate for the structure

25 at the time of the event, as adjusted by any other
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1 premium adjustments otherwise applicable to the

2 structure and any subsequent increases pursuant to

3 this paragraph, and the deductible in connection

4 with insurance provided under this title shall in5 crease by $5,000 more than the deductible on such

6 insurance at the time of the event.

7 ‘‘(6) LIST OF STRUCTURES.—The Director, in

8 consultation with regional flood plain administrators,

9 shall develop and periodically update a list of repet10 itive substantial flood loss structures.

11 ‘‘(7) DEPOSIT OF REVENUES.—All amounts col12 lected from payment of deductible and premium in13 creases pursuant to this subsection shall be depos14 ited into the Repetitive Flood Loss Reduction Fund

15 created by subsection (j).

16 ‘‘(g) DISPOSITION OF ACQUIRED STRUCTURES.—

17 ‘‘(1) IN GENERAL.—As soon as practicable

18 after acquisition of a structure under this section,

19 the Director shall offer to transfer the structure to

20 the local flood management agency that has jurisdic21 tion with respect to the area in which the structure

22 is located. If such a local flood management agency

23 does not exists or refuses such offer, the Director

24 shall offer to transfer the structure to the State

25 within whose boundaries such structure is located.
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1 ‘‘(2) TERMS AND CONDITIONS.—If an offer to

2 transfer a structure made pursuant to paragraph (1)

3 is accepted, the Director shall make such transfer

4 without compensation and upon such other terms

5 and conditions as the Director considers necessary

6 to protect the interests of the United States.

7 ‘‘(h) OVERSIGHT OF MITIGATION ACTIVITIES.—The

8 Director shall conduct oversight of recipients of grants

9 under this section to ensure that the grant is used in com10 pliance with approved mitigation activities and that

11 matching funds certified under subsection (e) are used in

12 accordance with such certification.

13 ‘‘(i) RECAPTURE.—If the Director determines that a

14 State, community, or local flood management agency that

15 has received a grant under this section has not carried

16 out the mitigation activities as set forth in the mitigation

17 activity, the Director shall recapture such amounts and

18 deposit the amounts in the Repetitive Flood Loss Reduc19 tion Fund created by subsection (j).

20 ‘‘(j) REPETITIVE FLOOD LOSS REDUCTION FUND.—

21 There is hereby created within the Treasury a fund which

22 shall be known as the ‘Repetitive Flood Loss Reduction

23 Fund’. Amounts deposited into the Repetitive Flood Loss

24 Reduction Fund shall be available to the Director to carry
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1 out this section to the extent provided by appropriation

2 Acts.

3 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—

4 ‘‘(1) IN GENERAL.—There is authorized to be

5 appropriated to the Director $100,000,000 for fiscal

6 year 2002 to carry out this section, and such

7 amounts shall remain available until expended.

8 ‘‘(2) DIVISION OF FUNDS.—Of the amounts ap9 propriated to carry out this section, 90 percent shall

10 be used for acquisitions under subsection (a)(1) and

11 10 percent shall be used for grants under subsection

12 (a)(2).

13 ‘‘(l) DEFINITIONS.—For the purposes of this section,

14 the following definitions apply:

15 ‘‘(1) COMMUNITY.—The term ‘community’ has

16 the meaning given that term in section 1366(k).

17 ‘‘(2) REPETITIVE SUBSTANTIAL FLOOD LOSS

18 STRUCTURE.—The term ‘repetitive substantial flood

19 loss structure’ means a structure covered by a con20 tract for flood insurance under this title that has in21 curred flood-related damage on 3 or more occasions

22 in which the cumulative cost of repairs is equal to

23 or greater than 125 percent of the fair market value

24 of the structure.’’.

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