II 

108TH CONGRESS 

2D SESSION S. 2238

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

properties for which repetitive flood insurance claim payments have been 

made. 

IN THE SENATE OF THE UNITED STATES 

MARCH 25, 2004

Mr. BUNNING (for himself, Mr. SHELBY, Mr. SARBANES, Mr. SCHUMER, Mrs. 

DOLE, and Mr. HAGEL) introduced the following bill; which was read 

twice and referred to the Committee on Banking, Housing, and Urban 

Affairs 

A BILL

To amend the National Flood Insurance Act of 1968 to 

reduce losses to properties for which repetitive flood insurance claim payments have been made.

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; TABLE OF CONTENTS. 

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

5 ‘‘Flood Insurance Reform Act of 2004’’. 

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

7 this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Congressional findings. 
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TITLE I—AMENDMENTS TO FLOOD INSURANCE ACT OF 1968

Sec. 101. Extension of program and consolidation of authorizations. 

Sec. 102. Establishment of pilot program for mitigation of severe repetitive loss 

properties. 

Sec. 103. Amendments to existing flood mitigation assistance program. 

Sec. 104. FEMA authority to fund mitigation activities for individual repetitive 

claims properties. 

Sec. 105. Amendments to additional coverage for compliance with land use and 

control measures. 

Sec. 106. Actuarial rate properties. 

Sec. 107. Geospatial digital flood hazard data. 

Sec. 108. Replacement of mobile homes on original sites. 

Sec. 109. Reiteration of FEMA responsibility to map mudslides. 

TITLE II—MISCELLANEOUS PROVISIONS 

Sec. 201. Definitions. 

Sec. 202. Supplemental forms. 

Sec. 203. Acknowledgement form. 

Sec. 204. Flood insurance claims handbook. 

Sec. 205. Appeal of decisions relating to flood insurance coverage. 

Sec. 206. Study and report on use of cost compliance coverage. 

Sec. 207. Minimum training and education requirements. 

Sec. 208. GAO study and report. 

Sec. 209. Prospective payment of flood insurance premiums. 

Sec. 210. Report on changes to fee schedule or fee payment arrangements.

1 SEC. 2. CONGRESSIONAL FINDINGS. 

2 The Congress finds that—

3 (1) the national flood insurance program—

4 (A) identifies the flood risk; 

5 (B) provides flood risk information to the 

6 public; 

7 (C) encourages State and local govern8 ments to make appropriate land use adjust9 ments to constrict the development of land 

10 which is exposed to flood damage and minimize 

11 damage caused by flood losses; and 

12 (D) makes flood insurance available on a 

13 nationwide basis that would otherwise not be 
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1 available, to accelerate recovery from floods, 

2 mitigate future losses, save lives, and reduce 

3 the personal and national costs of flood disas4 ters; 

5 (2) the national flood insurance program in6 sures approximately 4,400,000 policyholders; 

7 (3) approximately 48,000 properties currently 

8 insured under the program have experienced, within 

9 a 10-year period, 2 or more flood losses where each 

10 such loss exceeds the amount $1,000; 

11 (4) approximately 10,000 of these repetitive12 loss properties have experienced either 2 or 3 losses 

13 that cumulatively exceed building value or 4 or more 

14 losses, each exceeding $1,000; 

15 (5) repetitive-loss properties constitute a signifi16 cant drain on the resources of the national flood in17 surance program, costing about $200,000,000 annu18 ally; 

19 (6) repetitive-loss properties comprise approxi20 mately 1 percent of currently insured properties but 

21 are expected to account for 25 to 30 percent of 

22 claims losses; 

23 (7) the vast majority of repetitive-loss prop24 erties were built before local community implementa25 tion of floodplain management standards under the 
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1 program and thus are eligible for subsidized flood in2 surance; 

3 (8) while some property owners take advantage 

4 of the program allowing subsidized flood insurance 

5 without requiring mitigation action, others are 

6 trapped in a vicious cycle of suffering flooding, then 

7 repairing flood damage, then suffering flooding, 

8 without the means to mitigate losses or move out of 

9 harm’s way; 

10 (9) mitigation of repetitive-loss properties 

11 through buyouts, elevations, relocations, or flood12 proofing will produce savings for policyholders under 

13 the program and for Federal taxpayers through re14 duced flood insurance losses and reduced Federal 

15 disaster assistance; 

16 (10) a strategy of making mitigation offers 

17 aimed at high-priority repetitive-loss properties and 

18 shifting more of the burden of recovery costs to 

19 property owners who choose to remain vulnerable to 

20 repetitive flood damage can encourage property own21 ers to take appropriate actions that reduce loss of 

22 life and property damage and benefit the financial 

23 soundness of the program; 

24 (11) the method for addressing repetitive-loss 

25 properties should be flexible enough to take into con-
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1 sideration legitimate circumstances that may prevent 

2 an owner from taking a mitigation action; and 

3 (12) focusing the mitigation and buy-out of re4 petitive loss properties upon communities and prop5 erty owners that choose to voluntarily participate in 

6 a mitigation and buy-out program will maximize the 

7 benefits of such a program, while minimizing any 

8 adverse impact on communities and property owners.

9 TITLE I—AMENDMENTS TO 

10 FLOOD INSURANCE ACT OF 1968

11 SEC. 101. EXTENSION OF PROGRAM AND CONSOLIDATION 

12 OF AUTHORIZATIONS. 

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

14 section 1309(a) of the National Flood Insurance Act of 

15 1968 (42 U.S.C. 4016(a)), is amended by striking 

16 ‘‘through December’’ and all that follows through ‘‘, and’’ 

17 and inserting ‘‘through the date specified in section 1319, 

18 and’’. 

19 (b) AUTHORITY FOR CONTRACTS.—Section 1319 of 

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

21 4026), is amended by striking ‘‘after’’ and all that follows 

22 and inserting ‘‘after September 30, 2008.’’.

23 (c) EMERGENCY IMPLEMENTATION.—Section 

24 1336(a) of the National Flood Insurance Act of 1968 (42 

25 U.S.C. 4056(a)), is amended by striking ‘‘during the pe-
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1 riod’’ and all that follows through ‘‘in accordance’’ and 

2 inserting ‘‘during the period ending on the date specified 

3 in section 1319, in accordance’’. 

4 (d) AUTHORIZATION OF APPROPRIATIONS FOR STUD5 IES.—Section 1376(c) of the National Flood Insurance 

6 Act of 1968 (42 U.S.C. 4127(c)), is amended by striking 

7 ‘‘through’’ and all that follows and inserting ‘‘through the 

8 date specified in section 1319, for studies under this 

9 title.’’. 

10 SEC. 102. ESTABLISHMENT OF PILOT PROGRAM FOR MITI11 GATION OF SEVERE REPETITIVE LOSS PROP12 ERTIES. 

13 (a) IN GENERAL.—The National Flood Insurance 

14 Act of 1968 is amended by inserting after section 1361 

15 (42 U.S.C. 4102) the following: 

16 ‘‘SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE 

17 REPETITIVE LOSS PROPERTIES. 

18 (a) AUTHORITY.—To the extent amounts are made 

19 available for use under this section, the Director may, sub20 ject to the limitations of this section, provide financial as21 sistance to States and communities for taking actions with 

22 respect to severe repetitive loss properties (as such term 

23 is defined in subsection (b)) to mitigate flood damage to 

24 such properties and losses to the National Flood Insur25 ance Fund from such properties. 
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1 ‘‘(b) SEVERE REPETITIVE LOSS PROPERTY.—For 

2 purposes of this section, the term ‘severe repetitive loss 

3 property’ has the following meaning: 

4 ‘‘(1) SINGLE-FAMILY PROPERTIES.—In the case 

5 of a property consisting of 1 to 4 residences, such 

6 term means a property that—

7 ‘‘(A) is covered under a contract for flood 

8 insurance made available under this title; and 

9 ‘‘(B) has incurred flood-related damage—

10 ‘‘(i) for which 3 or more separate 

11 claims payments have been made under 

12 flood insurance coverage under this title, 

13 with the amount of each such claim ex14 ceeding $3,000, and with the cumulative 

15 amount of such claims payments exceeding 

16 $15,000; 

17 ‘‘(ii) for which at least 2 separate 

18 claims payments have been made under 

19 such coverage, with the cumulative amount 

20 of such claims exceeding the value of the 

21 property. 

22 ‘‘(2) MULTIFAMILY PROPERTIES.—In the case 

23 of a property consisting of 5 or more residences, 

24 such term shall have such meaning as the Director 

25 shall by regulation provide. 
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1 ‘‘(c) ELIGIBLE ACTIVITIES.—Amounts provided 

2 under this section to a State or community may be used 

3 only for the following activities: 

4 ‘‘(1) MITIGATION ACTIVITIES.—To carry out 

5 mitigation activities that reduce flood damages to se6 vere repetitive loss properties, including elevation, 

7 relocation, demolition, and floodproofing of struc8 tures, and minor physical localized flood control 

9 projects, and the demolition and rebuilding of prop10 erties to at least 1 foot above Base Flood Elevation 

11 or greater, if required by any local ordinance. 

12 ‘‘(2) PURCHASE.—To purchase severe repetitive 

13 loss properties, subject to subsection (f). 

14 ‘‘(d) MATCHING REQUIREMENT.—

15 ‘‘(1) IN GENERAL.—Except as provided in para16 graph (2), in any 1-year period the Director may not 

17 provide assistance under this section to a State or 

18 community in an amount exceeding 3 times the 

19 amount that the State or community certifies, as the 

20 Director shall require, that the State or community 

21 will contribute from non-Federal funds for carrying 

22 out the eligible activities to be funded with such as23 sistance amounts. 

24 ‘‘(2) REDUCED COMMUNITY MATCH.—With re25 spect to any 1-year period in which assistance is 
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1 made available under this section, the Director may 

2 adjust the contribution required under paragraph 

3 (1) by any State, and for the communities located 

4 in that State, to not less than 10 percent of the cost 

5 of the activities for each severe repetitive loss prop6 erty for which grant amounts are provided if, for 

7 such year—

8 ‘‘(A) the State has an approved State miti9 gation plan meeting the requirements for haz10 ard mitigation planning under section 322 of 

11 the Robert T. Stafford Disaster Relief and 

12 Emergency Assistance Act (42 U.S.C. 5165) 

13 that specifies how the State intends to reduce 

14 the number of severe repetitive loss properties; 

15 and 

16 ‘‘(B) the Director determines, after con17 sultation with the State, that the State has 

18 taken actions to reduce the number of such 

19 properties. 

20 ‘‘(3) NON-FEDERAL FUNDS.—For purposes of 

21 this subsection, the term ‘non-Federal funds’ in22 cludes State or local agency funds, in-kind contribu23 tions, any salary paid to staff to carry out the eligi24 ble activities of the recipient, the value of the time 

25 and services contributed by volunteers to carry out
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1 such activities (at a rate determined by the Direc2 tor), and the value of any donated material or build3 ing and the value of any lease on a building. 

4 ‘‘(e) STANDARDS FOR MITIGATION OFFERS.—The 

5 program under this section for providing assistance for eli6 gible activities for severe repetitive loss properties shall be 

7 subject to the following limitations: 

8 ‘‘(1) PRIORITY.—In determining the properties 

9 for which to provide assistance for eligible activities 

10 under subsection (c), the Director shall provide as11 sistance for properties in the order that will result 

12 in the greatest amount of savings to the National 

13 Flood Insurance Fund in the shortest period of time. 

14 ‘‘(2) OFFERS.—The Director shall provide as15 sistance in a manner that permits States and com16 munities to make offers to owners of severe repet17 itive loss properties to take eligible activities under 

18 subsection (c) as soon as practicable. 

19 ‘‘(3) NOTICE.—Upon making an offer to pro20 vide assistance with respect to a property for any eli21 gible activity under subsection (c), the State or com22 munity shall notify each holder of a recorded inter23 est on the property of such offer and activity. 

24 ‘‘(f) PURCHASE OFFERS.—A State or community 

25 may take action under subsection (c)(2) to purchase a se-
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1 vere repetitive loss property only if the following require2 ments are met: 

3 ‘‘(1) USE OF PROPERTY.—The State or com4 munity enters into an agreement with the Director 

5 that provides assurances that the property pur6 chased will be used in a manner that is consistent 

7 with the requirements of section 404(b)(2)(B) of the 

8 Robert T. Stafford Disaster Relief and Emergency 

9 Assistance Act (42 U.S.C. 5170c(b)(2)(B)) for prop10 erties acquired, accepted, or from which a structure 

11 will be removed pursuant to a project provided prop12 erty acquisition and relocation assistance under such 

13 section 404(b).

14 ‘‘(2) OFFERS.—The Director shall provide as15 sistance in a manner that permits States and com16 munities to makes offers to owners of severe repet17 itive loss properties and of associated land to engage 

18 in eligible activities as soon as possible. 

19 ‘‘(3) PURCHASE PRICE.—The amount of pur20 chase offer is not less than the greatest of—

21 ‘‘(A) the amount of the original purchase 

22 price of the property, when purchased by the 

23 holder of the current policy of flood insurance 

24 under this title;
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1 ‘‘(B) the total amount owed, at the time 

2 the offer to purchase is made, under any loan 

3 secured by a recorded interest on the property; 

4 and 

5 ‘‘(C) an amount equal to the fair market 

6 value of the property immediately before the 

7 most recent flood event affecting the property. 

8 ‘‘(g) INCREASED PREMIUMS IN CASES OF REFUSAL

9 TO MITIGATE.—

10 ‘‘(1) IN GENERAL.—In any case in which the 

11 owner of a severe repetitive loss property refuses an 

12 offer to take action under paragraph (1) or (2) of 

13 subsection (c) with respect to such property, the Di14 rector shall—

15 ‘‘(A) notify each holder of a recorded inter16 est on the property of such refusal; and 

17 ‘‘(B) notwithstanding subsections (a) 

18 through (c) of section 1308, thereafter the 

19 chargeable premium rate with respect to the 

20 property shall be the amount equal to 150 per21 cent of the chargeable rate for the property at 

22 the time that the offer was made, as adjusted 

23 by any other premium adjustments otherwise 

24 applicable to the property and any subsequent 
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1 increases pursuant to paragraph (2) and sub2 ject to the limitation under paragraph (3). 

3 ‘‘(2) INCREASED PREMIUMS UPON SUBSEQUENT

4 FLOOD DAMAGE.—Notwithstanding subsections (a) 

5 through (c) of section 1308, if the owner of a severe 

6 repetitive loss property does not accept an offer to 

7 take action under paragraph (1) or (2) of subsection 

8 (c) with respect to such property and a claim pay9 ment exceeding $1,500 is made under flood insur10 ance coverage under this title for damage to the 

11 property caused by a flood event occurring after 

12 such offer is made, thereafter the chargeable pre13 mium rate with respect to the property shall be the 

14 amount equal to 150 percent of the chargeable rate 

15 for the property at the time of such flood event, as 

16 adjusted by any other premium adjustments other17 wise applicable to the property and any subsequent 

18 increases pursuant to this paragraph and subject to 

19 the limitation under paragraph (3). 

20 ‘‘(3) LIMITATION ON INCREASED PREMIUMS.—

21 In no case may the chargeable premium rate for a 

22 severe repetitive loss property be increased pursuant 

23 to this subsection to an amount exceeding the appli24 cable estimated risk premium rate for the area (or 

25 subdivision thereof) under section 1307(a)(1). 
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1 ‘‘(4) TREATMENT OF DEDUCTIBLES.—Any in2 crease in chargeable premium rates required under 

3 this subsection for a severe repetitive loss property 

4 may be carried out, to the extent appropriate, as de5 termined by the Director, by adjusting any deduct6 ible charged in connection with flood insurance cov7 erage under this title for the property. 

8 ‘‘(5) NOTICE OF CONTINUED OFFER.—Upon 

9 each renewal or modification of any flood insurance 

10 coverage under this title for a severe repetitive loss 

11 property, the Director shall notify the owner that 

12 the offer made pursuant to subsection (c) is still 

13 open. 

14 ‘‘(6) APPEALS.—

15 ‘‘(A) IN GENERAL.—Any owner of a severe 

16 repetitive loss property may appeal a deter17 mination of the Director to take action under 

18 paragraph (1)(B) or (2) with respect to such 

19 property, based only upon the following 

20 grounds: 

21 ‘‘(i) As a result of such action, the 

22 owner of the property will not be able to 

23 purchase a replacement primary residence 

24 of comparable value and that is function25 ally equivalent.
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1 ‘‘(ii) Based on independent informa2 tion, such as contractor estimates or ap3 praisals, the property owner believes that 

4 the price offered for purchasing the prop5 erty is not an accurate estimation of the 

6 value of the property, or the amount of7 fered for mitigation activities will not cover 

8 the actual cost of mitigation. 

9 ‘‘(iii) As a result of such action, the 

10 preservation or maintenance of any pre11 historic or historic district, site, building, 

12 structure, or object included in, or eligible 

13 for inclusion in, the National Register of 

14 historic places will be interfered with, im15 paired, or disrupted. 

16 ‘‘(iv) The flooding that resulted in the 

17 flood insurance claims described in sub18 section (b)(2) for the property resulted 

19 from significant actions by a third party in 

20 violation of Federal, State, or local law, or21 dinance, or regulation. 

22 ‘‘(v) In purchasing the property, the 

23 owner relied upon flood insurance rate 

24 maps of the Federal Emergency Manage25 ment Agency that were current at the time 
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1 and did not indicate that the property was 

2 located in an area having special flood haz3 ards. 

4 ‘‘(B) PROCEDURE.—An appeal under this 

5 paragraph of a determination of the Director 

6 shall be made by filing, with the Director, a re7 quest for an appeal within 90 days after receiv8 ing notice of such determination. Upon receiv9 ing the request, the Director shall select, from 

10 a list of independent third parties compiled by 

11 the Director for such purpose, a party to hear 

12 such appeal. Within 90 days after filing of the 

13 request for the appeal, such third party shall 

14 review the determination of the Director and 

15 shall set aside such determination if the third 

16 party determines that the grounds under sub17 paragraph (A) exist. During the pendency of an 

18 appeal under this paragraph, the Director shall 

19 stay the applicability of the rates established 

20 pursuant to paragraph (1)(B) or (2), as appli21 cable. 

22 ‘‘(C) EFFECT OF FINAL DETERMINA23 TION.—In an appeal under this paragraph—

24 ‘‘(i) if a final determination is made 

25 that the grounds under subparagraph (A) 
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1 exist, the third party hearing such appeal 

2 shall make a determination of how much to 

3 reduce the chargeable risk premium rate 

4 for flood insurance coverage for the prop5 erty involved in the appeal from the 

6 amount required under paragraph (1)(B) 

7 or (2) and the Director shall promptly re8 duce the chargeable risk premium rate for 

9 such property by such amount; and 

10 ‘‘(ii) if a final determination is made 

11 that the grounds under subparagraph (A) 

12 do not exist, the Director shall promptly 

13 increase the chargeable risk premium rate 

14 for such property to the amount estab15 lished pursuant to paragraph (1)(B) or 

16 (2), as applicable, and shall collect from 

17 the property owner the amount necessary 

18 to cover the stay of the applicability of 

19 such increased rates during the pendency 

20 of the appeal.

21 ‘‘(D) COSTS.—If the third party hearing 

22 an appeal under this paragraph is compensated 

23 for such service, the costs of such compensation 

24 shall be borne—
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1 ‘‘(i) by the owner of the property re2 questing the appeal, if the final determina3 tion in the appeal is that the grounds 

4 under subparagraph (A) do not exist; and 

5 ‘‘(ii) by the National Flood Insurance 

6 Fund, if such final determination is that 

7 the grounds under subparagraph (A) do 

8 exist. 

9 ‘‘(E) REPORT.—Not later than 6 months 

10 after the date of the enactment of the Flood In11 surance Reform Act of 2004, the Director shall 

12 submit a report describing the rules, proce13 dures, and administration for appeals under 

14 this paragraph to—

15 ‘‘(i) the Committee on Banking, 

16 Housing, and Urban Affairs of the Senate; 

17 and 

18 ‘‘(ii) the Committee on Financial 

19 Services of the House of Representatives. 

20 ‘‘(h) DISCRETIONARY ACTIONS IN CASES OF FRAUD21 ULENT CLAIMS.—If the Director determines that a fraud22 ulent claim was made under flood insurance coverage 

23 under this title for a severe repetitive loss property, the 

24 Director may—
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1 ‘‘(1) cancel the policy and deny the provision to 

2 such policyholder of any new flood insurance cov3 erage under this title for the property; or 

4 ‘‘(2) refuse to renew the policy with such policy5 holder upon expiration and deny the provision of any 

6 new flood insurance coverage under this title to such 

7 policyholder for the property. 

8 ‘‘(i) FUNDING.—

9 ‘‘(1) IN GENERAL.—Pursuant to section 

10 1310(a)(8), the Director may use amounts from the 

11 National Flood Insurance Fund to provide assist12 ance under this section in each of fiscal years 2004, 

13 2005, 2006, 2007, and 2008, except that the 

14 amount so used in each such fiscal year may not ex15 ceed $40,000,000 and shall remain available until 

16 expended. Notwithstanding any other provision of 

17 this title, amounts made available pursuant to this 

18 subsection shall not be subject to offsetting collec19 tions through premium rates for flood insurance cov20 erage under this title. 

21 ‘‘(2) ADMINISTRATIVE EXPENSES.—Of the 

22 amounts made available under this subsection, the 

23 Director may use up to 5 percent for expenses asso24 ciated with the administration of section 1361A.
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1 ‘‘(j) TERMINATION.—The Director may not provide 

2 assistance under this section to any State or community 

3 after September 30, 2008.’’. 

4 (b) AVAILABILITY OF NATIONAL FLOOD INSURANCE

5 FUND AMOUNTS.—Section 1310(a) of the National Flood 

6 Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended—

7 (1) in paragraph (7), by striking ‘‘and’’ at the 

8 end; and 

9 (2) by striking paragraph (8) and inserting the 

10 following: 

11 ‘‘(8) for financial assistance under section 

12 1361A to States and communities for taking actions 

13 under such section with respect to severe repetitive 

14 loss properties, but only to the extent provided in 

15 section 1361A(i); and’’. 

16 SEC. 103. AMENDMENTS TO EXISTING FLOOD MITIGATION 

17 ASSISTANCE PROGRAM. 

18 (a) STANDARD FOR APPROVAL OF MITIGATION

19 PLANS.—Section 1366(e)(3) of the National Flood Insur20 ance Act of 1968 (42 U.S.C. 4104c) is amended by adding 

21 at the end the following new sentence: ‘‘The Director may 

22 approve only mitigation plans that give priority for fund23 ing to such properties, or to such subsets of properties, 

24 as are in the best interest of the National Flood Insurance 

25 Fund.’’. 
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1 (b) PRIORITY FOR MITIGATION ASSISTANCE.—Sec2 tion 1366(e) of the National Flood Insurance Act of 1968 

3 (42 U.S.C. 4104c) is amended by striking paragraph (4) 

4 and inserting the following: 

5 ‘‘(4) PRIORITY FOR MITIGATION ASSISTANCE.—

6 In providing grants under this subsection for mitiga7 tion activities, the Director shall give first priority 

8 for funding to such properties, or to such subsets of 

9 such properties as the Director may establish, that 

10 the Director determines are in the best interests of 

11 the National Flood Insurance Fund and for which 

12 matching amounts under subsection (f) are avail13 able.’’. 

14 (c) COORDINATION WITH STATES AND COMMU15 NITIES.—Section 1366 of the National Flood Insurance 

16 Act of 1968 (42 U.S.C. 4104c) is amended by adding at 

17 the end the following: 

18 ‘‘(m) COORDINATION WITH STATES AND COMMU19 NITIES.—The Director shall, in consultation and coordina20 tion with States and communities take such actions as are 

21 appropriate to encourage and improve participation in the 

22 national flood insurance program of owners of properties, 

23 including owners of properties that are not located in 

24 areas having special flood hazards but are located within 

25 the 100-year floodplain.’’. 
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1 (d) FUNDING.—Section 1367(b) of the National 

2 Flood Insurance Act of 1968 (42 U.S.C. 4104d(b)) is 

3 amended by striking paragraph (1) and inserting the fol4 lowing: 

5 ‘‘(1) in each fiscal year, amounts from the Na6 tional Flood Insurance Fund not exceeding 

7 $40,000,000, to remain available until expended;’’. 

8 (e) REDUCED COMMUNITY MATCH.—Section 1366(g) 

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

10 4104c(g)), is amended—

11 (2) by redesignating paragraph (2) as para12 graph (3); and 

13 (3) by inserting after paragraph (1) the fol14 lowing: 

15 ‘‘(2) REDUCED COMMUNITY MATCH.—With re16 spect to any 1-year period in which assistance is 

17 made available under this section, the Director may 

18 adjust the contribution required under paragraph 

19 (1) by any State, and for the communities located 

20 in that State, to not less than 10 percent of the cost 

21 of the activities for each severe repetitive loss prop22 erty for which grant amounts are provided if, for 

23 such year—

24 ‘‘(A) the State has an approved State miti25 gation plan meeting the requirements for haz-
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1 ard mitigation planning under section 322 of 

2 the Robert T. Stafford Disaster Relief and 

3 Emergency Assistance Act (42 U.S.C. 5165) 

4 that specifies how the State intends to reduce 

5 the number of severe repetitive loss properties; 

6 and 

7 ‘‘(B) the Director determines, after con8 sultation with the State, that the State has 

9 taken actions to reduce the number of such 

10 properties.’’. 

11 (f) NATIONAL FLOOD MITIGATION FUND.—Section 

12 1366(b)(2) of the National Flood Insurance Act of 1968 

13 (42 U.S.C. 4104c(b)(2)), is amended by striking 

14 ‘‘$1,500,000’’ and inserting ‘‘7.5 percent of the available 

15 funds under this section’’. 

16 SEC. 104. FEMA AUTHORITY TO FUND MITIGATION ACTIVI17 TIES FOR INDIVIDUAL REPETITIVE CLAIMS 

18 PROPERTIES. 

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

20 Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amend21 ed by adding at the end the following:

22 ‘‘SEC. 1323. GRANTS FOR REPETITIVE INSURANCE CLAIMS 

23 PROPERTIES. 

24 ‘‘(a) IN GENERAL.—The Director may provide fund25 ing for mitigation actions that reduce flood damages to 
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1 individual properties for which 1 or more claim payments 

2 for losses have been made under flood insurance coverage 

3 under this title, but only if the Director determines that—

4 ‘‘(1) such activities are in the best interest of 

5 the National Flood Insurance Fund; and 

6 ‘‘(2) such activities can not be funded under the 

7 program under section 1366 because—

8 ‘‘(A) the requirements of section 1366(g) 

9 are not being met by the State or community 

10 in which the property is located; or 

11 ‘‘(B) the State or community does not 

12 have the capacity to manage such activities. 

13 ‘‘(b) PRIORITY FOR WORST-CASE PROPERTIES.—In 

14 determining the properties for which funding is to be pro15 vided under this section, the Director shall consult with 

16 the States in which such properties are located and pro17 vide assistance for properties in the order that will result 

18 in the greatest amount of savings to the National Flood 

19 Insurance Fund in the shortest period of time.’’. 

20 (b) AVAILABILITY OF NATIONAL FLOOD INSURANCE

21 FUND AMOUNTS.—Section 1310(a) of the National Flood 

22 Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended 

23 by adding at the end the following: 

24 ‘‘(9) for funding, not to exceed $10,000,000 in 

25 any fiscal year, for mitigation actions under section
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1 1323, except that, notwithstanding any other provi2 sion of this title, amounts made available pursuant 

3 to this paragraph shall not be subject to offsetting 

4 collections through premium rates for flood insur5 ance coverage under this title.’’. 

6 SEC. 105. AMENDMENTS TO ADDITIONAL COVERAGE FOR 

7 COMPLIANCE WITH LAND USE AND CONTROL 

8 MEASURES. 

9 (a) COMPLIANCE WITH LAND USE AND CONTROL

10 MEASURES.—Section 1304(b) of the National Flood In11 surance Act of 1968 (42 U.S.C. 4011(b)) is amended—

12 (1) in the matter preceding paragraph (1)—

13 (A) by striking ‘‘compliance’’ and inserting 

14 ‘‘implementing measures that are consistent’’; 

15 and 

16 (B) by inserting ‘‘by the community’’ after 

17 ‘‘established’’; 

18 (2) in paragraph (2), by striking ‘‘have flood 

19 damage in which the cost of repairs equals or ex20 ceeds 50 percent of the value of the structure at the 

21 time of the flood event; and’’ and inserting ‘‘are sub22 stantially damaged structures;’’

23 (3) in paragraph (3), by striking ‘‘compliance 

24 with land use and control measures.’’ and inserting 

25 ‘‘the implementation of such measures; and’’; and 
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•S 2238 IS 

1 (4) by inserting after paragraph (3) and before 

2 the last undesignated paragraph the following: 

3 ‘‘(4) properties for which an offer of mitigation 

4 assistance is made under—

5 ‘‘(A) section 1366 (Flood Mitigation As6 sistance Program); 

7 ‘‘(B) section 1368 (Repetitive Loss Pri8 ority Program and Individual Priority Property 

9 Program); 

10 ‘‘(C) the Hazard Mitigation Grant Pro11 gram authorized under section 404 of the Rob12 ert T. Stafford Disaster Assistance and Emer13 gency Relief Act (42 U.S.C. 5170c); 

14 ‘‘(D) the Predisaster Hazard Mitigation 

15 Program under section 203 of the Robert T. 

16 Stafford Disaster Assistance and Emergency 

17 Relief Act (42 U.S.C. 5133); and 

18 ‘‘(E) any programs authorized or for which 

19 funds are appropriated to address any unmet 

20 needs or for which supplemental funds are 

21 made available.’’. 

22 (b) DEFINITIONS.—Section 1370(a) of the National 

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

24 amended—
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1 (1) by striking paragraph (7) and inserting the 

2 following: 

3 ‘‘(7) the term ‘repetitive loss structure’ means 

4 a structure covered by a contract for flood insurance 

5 that—

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

7 2 occasions, in which the cost of repair, on the 

8 average, equaled or exceeded 25 percent of the 

9 value of the structure at the time of each such 

10 flood event; and 

11 ‘‘(B) at the time of the second incidence of 

12 flood-related damage, the contract for flood in13 surance contains increased cost of compliance 

14 coverage.’’; 

15 (2) in paragraph (13), by striking ‘‘and’’ at the 

16 end; 

17 (3) in paragraph (14), by striking the period 

18 and inserting ‘‘; and’’; and 

19 (4) by adding at the end the following: 

20 ‘‘(15) the term ‘substantially damaged struc21 ture’ means a structure covered by a contract for 

22 flood insurance that has incurred damage for which 

23 the cost of repair exceeds an amount specified in any 

24 regulation promulgated by the Director, or by a 

25 community ordinance, whichever is lower.’’. 
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•S 2238 IS 

1 SEC. 106. ACTUARIAL RATE PROPERTIES. 

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

3 Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended 

4 by striking subsection (c) and inserting the following: 

5 ‘‘(c) ACTUARIAL RATE PROPERTIES.—Subject only 

6 to the limitations provided under paragraphs (1) and (2), 

7 the chargeable rate shall not be less than the applicable 

8 estimated risk premium rate for such area (or subdivision 

9 thereof) under section 1307(a)(1) with respect to the fol10 lowing properties: 

11 ‘‘(1) POST-FIRM PROPERTIES.—Any property 

12 the construction or substantial improvement of 

13 which the Director determines has been started after 

14 December 31, 1974, or started after the effective 

15 date of the initial rate map published by the Direc16 tor under paragraph (2) of section 1360 for the area 

17 in which such property is located, whichever is later, 

18 except that the chargeable rate for properties under 

19 this paragraph shall be subject to the limitation 

20 under subsection (e). 

21 ‘‘(2) CERTAIN LEASED COASTAL AND RIVER

22 PROPERTIES.—Any property leased from the Federal 

23 Government (including residential and nonresidential 

24 properties) that the Director determines is located 

25 on the river-facing side of any dike, levee, or other 
29

•S 2238 IS 

1 riverine flood control structure, or seaward of any 

2 seawall or other coastal flood control structure.’’. 

3 (b) INAPPLICABILITY OF ANNUAL LIMITATIONS ON

4 PREMIUM INCREASES.—Section 1308(e) of the National 

5 Flood Insurance Act of 1968 (42 U.S.C. 4015(e)) is 

6 amended by striking ‘‘Notwithstanding’’ and inserting 

7 ‘‘Except with respect to properties described under para8 graph (2) or (3) of subsection (c), and notwithstanding’’. 

9 SEC. 107. GEOSPATIAL DIGITAL FLOOD HAZARD DATA. 

10 For the purposes of flood insurance and floodplain 

11 management activities conducted pursuant to the National 

12 Flood Insurance Program under the National Flood In13 surance Act of 1968 (42 U.S.C. 4001 et seq.), geospatial 

14 digital flood hazard data distributed by the Federal Emer15 gency Management Agency, or its designee, or the printed 

16 products derived from that data, are interchangeable and 

17 legally equivalent for the determination of the location of 

18 1 in 100 year and 1 in 500 year flood planes, provided 

19 that all other geospatial data shown on the printed prod20 uct meets or exceeds any accuracy standard promulgated 

21 by the Federal Emergency Management Agency.
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•S 2238 IS 

1 SEC. 108. REPLACEMENT OF MOBILE HOMES ON ORIGINAL 

2 SITES. 

3 Section 1315 of the National Flood Insurance Act of 

4 1968 (42 U.S.C. 4022) is amended by adding at the end 

5 the following: 

6 ‘‘(c) REPLACEMENT OF MOBILE HOMES ON ORIGI7 NAL SITES.—

8 ‘‘(1) COMMUNITY PARTICIPATION.—The place9 ment of any mobile home on any site shall not affect 

10 the eligibility of any community to participate in the 

11 flood insurance program under this title and the 

12 Flood Disaster Protection Act of 1973 (notwith13 standing that such placement may fail to comply 

14 with any elevation or flood damage mitigation re15 quirements), if—

16 ‘‘(A) such mobile home was previously lo17 cated on such site; 

18 ‘‘(B) such mobile home was relocated from 

19 such site because of flooding that threatened or 

20 affected such site; and 

21 ‘‘(C) such replacement is conducted not 

22 later than the expiration of the 180-day period 

23 that begins upon the subsidence (in the area of 

24 such site) of the body of water that flooded to 

25 a level considered lower than flood levels. 
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•S 2238 IS 

1 ‘‘(2) DEFINITION.—For purposes of this sub2 section, the term ‘mobile home’ has the meaning 

3 given such term in the law of the State in which the 

4 mobile home is located.’’.

5 SEC. 109. REITERATION OF FEMA RESPONSIBILITY TO MAP 

6 MUDSLIDES. 

7 As directed in section 1360(b) of the National Flood 

8 Insurance Act of 1968 (42 U.S.C. 4101(b)), the Director 

9 of the Federal Emergency Management Agency is again 

10 directed to accelerate the identification of risk zones with11 in flood-prone and mudslide-prone areas, as provided by 

12 subsection (a)(2) of such section 1360, in order to make 

13 known the degree of hazard within each such zone at the 

14 earliest possible date.

15 TITLE II—MISCELLANEOUS 

16 PROVISIONS 

17 SEC. 201. DEFINITIONS. 

18 In this title, the following definitions shall apply: 

19 (1) DIRECTOR.—The term ‘‘Director’’ means 

20 the Director of the Federal Emergency Management 

21 Agency. 

22 (2) FLOOD INSURANCE POLICY.—The term 

23 ‘‘flood insurance policy’’ means a flood insurance 

24 policy issued under the National Flood Insurance 

25 Act of 1968 (42 U.S.C. et seq.). 
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•S 2238 IS 

1 (3) PROGRAM.—The term ‘‘Program’’ means 

2 the National Flood Insurance Program established 

3 under the National Flood Insurance Act of 1968 (42 

4 U.S.C. 4001 et seq.). 

5 SEC. 202. SUPPLEMENTAL FORMS. 

6 (a) IN GENERAL.—Not later than 6 months after the 

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

8 supplemental forms to be issued in conjunction with the 

9 issuance of a flood insurance policy that set forth, in sim10 ple terms—

11 (1) the exact coverages being purchased by a 

12 policyholder; 

13 (2) any exclusions from coverage that apply to 

14 the coverages purchased; 

15 (3) an explanation, including illustrations, of 

16 how lost items and damages will be valued under the 

17 policy at the time of loss; 

18 (4) the number and dollar value of claims filed 

19 under a flood insurance policy over the life of the 

20 property, and the effect, under the National Flood 

21 Insurance Act of 1968 (42 U.S.C. 4001 et seq.), of 

22 the filing of any further claims under a flood insur23 ance policy with respect to that property; and 
33

•S 2238 IS 

1 (5) any other information that the Director de2 termines will be helpful to policyholders in under3 standing flood insurance coverage. 

4 (b) DISTRIBUTION.—The forms developed under sub5 section (a) shall be given to—

6 (1) all holders of a flood insurance policy at the 

7 time of purchase and renewal; and 

8 (2) insurance companies and agents that are 

9 authorized to sell flood insurance policies. 

10 SEC. 203. ACKNOWLEDGEMENT FORM. 

11 (a) IN GENERAL.—Not later than 6 months after the 

12 date of enactment of this Act, the Director shall develop 

13 an acknowledgement form to be signed by the purchaser 

14 of a flood insurance policy that contains—

15 (1) an acknowledgement that the purchaser has 

16 received a copy of the standard flood insurance pol17 icy, and any forms developed under section 202; and 

18 (2) an acknowledgement that the purchaser has 

19 been told that the contents of a property or dwelling 

20 are not covered under the terms of the standard 

21 flood insurance policy, and that the policyholder has 

22 the option to purchase additional coverage for such 

23 contents. 
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•S 2238 IS 

1 (b) DISTRIBUTION.—Copies of an acknowledgement 

2 form executed under subsection (a) shall be made available 

3 to the purchaser and the Director. 

4 SEC. 204. FLOOD INSURANCE CLAIMS HANDBOOK. 

5 (a) IN GENERAL.—Not later than 6 months after the 

6 date of enactment of this Act, the Director shall develop 

7 a flood insurance claims handbook that contains—

8 (1) a description of the procedures to be fol9 lowed to file a claim under the Program, including 

10 how to pursue a claim to completion; 

11 (2) how to file supplementary claims, proof of 

12 loss, and any other information relating to the filing 

13 of claims under the Program; and 

14 (3) detailed information regarding the appeals 

15 process established under section 205. 

16 (b) DISTRIBUTION.—The handbook developed under 

17 subsection (a) shall be made available to—

18 (1) each insurance company and agent author19 ized to sell flood insurance policies; and 

20 (2) each purchaser, at the time of purchase and 

21 renewal, of a flood insurance policy, and at the time 

22 of any flood loss sustained by such purchaser.
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•S 2238 IS 

1 SEC. 205. APPEAL OF DECISIONS RELATING TO FLOOD IN2 SURANCE COVERAGE. 

3 Not later than 6 months after the date of enactment 

4 of this Act, the Director shall, by regulation, establish an 

5 appeals process through which holders of a flood insurance 

6 policy may appeal the decisions, with respect to claims, 

7 proofs of loss, and loss estimates relating to such flood 

8 insurance policy, of—

9 (1) any insurance agent or adjuster, or insur10 ance company; or 

11 (2) any employee or contractor of the Federal 

12 Emergency Management Agency. 

13 SEC. 206. STUDY AND REPORT ON USE OF COST COMPLI14 ANCE COVERAGE. 

15 Not later than 1 year after the date of enactment 

16 of this Act, the Director of the Federal Emergency Man17 agement Agency shall submit to Congress a report that 

18 sets forth—

19 (1) the use of cost of compliance coverage 

20 under section 1304(b) of the National Flood Insur21 ance Act of 1968 (42 U.S.C. 4011(b)) in connection 

22 with flood insurance policies; 

23 (2) any barriers to policyholders using the 

24 funds provided by cost of compliance coverage under 

25 that section 1304(b) under a flood insurance policy, 

26 and recommendations to address those barriers; and 
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•S 2238 IS 

1 (3) the steps that the Federal Emergency Man2 agement Agency has taken to ensure that funds paid 

3 for cost of compliance coverage under that section 

4 1304(b) are being used to lessen the burdens on all 

5 homeowners and the Program. 

6 SEC. 207. MINIMUM TRAINING AND EDUCATION REQUIRE7 MENTS. 

8 The Director of the Federal Emergency Management 

9 Agency shall, in cooperation with the insurance industry 

10 and other interested parties— 

11 (1) establish minimum training and education 

12 requirements for all insurance agents who sell flood 

13 insurance policies; and 

14 (2) not later than 6 months after the date of 

15 enactment of this Act, publish these requirements in 

16 the Federal Register, and inform insurance compa17 nies and agents of the requirements. 

18 SEC. 208. GAO STUDY AND REPORT. 

19 (a) STUDY.—The Comptroller General of the United 

20 States shall conduct a study of—

21 (1) the adequacy of the scope of coverage pro22 vided under flood insurance policies in meeting the 

23 intended goal of Congress that flood victims be re24 stored to their pre-flood conditions, and any rec25 ommendations to ensure that goal is being met; 
37

•S 2238 IS 

1 (2) the adequacy of payments to flood victims 

2 under flood insurance policies; and 

3 (3) the practices of the Federal Emergency 

4 Management Agency and insurance adjusters in esti5 mating losses incurred during a flood, and how such 

6 practices affect the adequacy of payments to flood 

7 victims. 

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

9 of enactment of this Act, the Comptroller General shall 

10 submit to Congress a report regarding the results of the 

11 study under subsection (a). 

12 SEC. 209. PROSPECTIVE PAYMENT OF FLOOD INSURANCE 

13 PREMIUMS. 

14 Section 1308 of the National Flood Insurance Act of 

15 1968 (42 U.S.C. 4015) is amended by adding at the end 

16 the following: 

17 ‘‘(f) ADJUSTMENT OF PREMIUM.—Notwithstanding 

18 any other provision of law, if the Director determines that 

19 the holder of a flood insurance policy issued under this 

20 Act is paying a lower premium than is required under this 

21 section due to an error in the flood plain determination, 

22 the Director may only prospectively charge the higher pre23 mium rate.’’. 
38

•S 2238 IS 

1 SEC. 210. REPORT ON CHANGES TO FEE SCHEDULE OR FEE 

2 PAYMENT ARRANGEMENTS. 

3 Not later than 3 months after the date of enactment 

4 of this Act, the Director shall submit a report on any 

5 changes or modifications made to the fee schedule or fee 

6 payment arrangements between the Federal Emergency 

7 Management Agency and insurance adjusters who provide 

8 services with respect to flood insurance policies to—

9 (1) the Committee on Banking, Housing, and 

10 Urban Affairs of the Senate; and 

11 (2) the Committee on Financial Services of the 

12 House of Representatives.

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