S. 2238

One Hundred Eighth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twentieth day of January, two thousand and four

An Act

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

for which repetitive flood insurance claim payments have been made.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘BunningBereuter-Blumenauer Flood Insurance Reform Act of 2004’’.

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

is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Congressional findings.

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.

SEC. 2. CONGRESSIONAL FINDINGS.

The Congress finds that—

(1) the national flood insurance program—

(A) identifies the flood risk;

(B) provides flood risk information to the public;

(C) encourages State and local governments to make

appropriate land use adjustments to constrict the development of land which is exposed to flood damage and minimize damage caused by flood losses; and

(D) makes flood insurance available on a nationwide

basis that would otherwise not be available, to accelerate
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recovery from floods, mitigate future losses, save lives,

and reduce the personal and national costs of flood disasters;

(2) the national flood insurance program insures approximately 4,400,000 policyholders;

(3) approximately 48,000 properties currently insured

under the program have experienced, within a 10-year period,

2 or more flood losses where each such loss exceeds the amount

$1,000;

(4) approximately 10,000 of these repetitive-loss properties

have experienced either 2 or 3 losses that cumulatively exceed

building value or 4 or more losses, each exceeding $1,000;

(5) repetitive-loss properties constitute a significant drain

on the resources of the national flood insurance program,

costing about $200,000,000 annually;

(6) repetitive-loss properties comprise approximately 1 percent of currently insured properties but are expected to account

for 25 to 30 percent of claims losses;

(7) the vast majority of repetitive-loss properties were built

before local community implementation of floodplain management standards under the program and thus are eligible for

subsidized flood insurance;

(8) while some property owners take advantage of the

program allowing subsidized flood insurance without requiring

mitigation action, others are trapped in a vicious cycle of suffering flooding, then repairing flood damage, then suffering

flooding, without the means to mitigate losses or move out

of harm’s way;

(9) mitigation of repetitive-loss properties through buyouts,

elevations, relocations, or flood-proofing will produce savings

for policyholders under the program and for Federal taxpayers

through reduced flood insurance losses and reduced Federal

disaster assistance;

(10) a strategy of making mitigation offers aimed at highpriority repetitive-loss properties and shifting more of the burden of recovery costs to property owners who choose to remain

vulnerable to repetitive flood damage can encourage property

owners to take appropriate actions that reduce loss of life

and property damage and benefit the financial soundness of

the program;

(11) the method for addressing repetitive-loss properties

should be flexible enough to take into consideration legitimate

circumstances that may prevent an owner from taking a mitigation action; and

(12) focusing the mitigation and buy-out of repetitive loss

properties upon communities and property owners that choose

to voluntarily participate in a mitigation and buy-out program

will maximize the benefits of such a program, while minimizing

any adverse impact on communities and property owners.
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TITLE I—AMENDMENTS TO FLOOD

INSURANCE ACT OF 1968

SEC. 101. EXTENSION OF PROGRAM AND CONSOLIDATION OF

AUTHORIZATIONS.

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

1309(a) of the National Flood Insurance Act of 1968 (42 U.S.C.

4016(a)), is amended by striking ‘‘through December’’ and all that

follows through ‘‘, and’’ and inserting ‘‘through the date specified

in section 1319, and’’.

(b) AUTHORITY FOR CONTRACTS.—Section 1319 of the National

Flood Insurance Act of 1968 (42 U.S.C. 4026), is amended by

striking ‘‘after’’ and all that follows and inserting ‘‘after September

30, 2008.’’.

(c) EMERGENCY IMPLEMENTATION.—Section 1336(a) of the

National Flood Insurance Act of 1968 (42 U.S.C. 4056(a)), is

amended by striking ‘‘during the period’’ and all that follows through

‘‘in accordance’’ and inserting ‘‘during the period ending on the

date specified in section 1319, in accordance’’.

(d) AUTHORIZATION OF APPROPRIATIONS FOR STUDIES.—Section

1376(c) of the National Flood Insurance Act of 1968 (42 U.S.C.

4127(c)), is amended by striking ‘‘through’’ and all that follows

and inserting ‘‘through the date specified in section 1319, for studies

under this title.’’.

SEC. 102. ESTABLISHMENT OF PILOT PROGRAM FOR MITIGATION OF

SEVERE REPETITIVE LOSS PROPERTIES.

(a) IN GENERAL.—The National Flood Insurance Act of 1968

is amended by inserting after section 1361 (42 U.S.C. 4102) the

following:

‘‘SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE LOSS PROPERTIES.

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

for use under this section, the Director may, subject to the limitations of this section, provide financial assistance to States and

communities that decide to participate in the pilot program established under this section for taking actions with respect to severe

repetitive loss properties (as such term is defined in subsection

(b)) to mitigate flood damage to such properties and losses to

the National Flood Insurance Fund from such properties.

‘‘(b) SEVERE REPETITIVE LOSS PROPERTY.—For purposes of this

section, the term ‘severe repetitive loss property’ has the following

meaning:‘‘(1) SINGLE-FAMILY PROPERTIES.—In the case of a property

consisting of 1 to 4 residences, such term means a property

that— ‘‘(A) is covered under a contract for flood insurance

made available under this title; and ‘‘(B) has incurred flood-related damage— ‘‘(i) for which 4 or more separate claims payments

have been made under flood insurance coverage under

this title, with the amount of each such claim exceeding

$5,000, and with the cumulative amount of such claims

payments exceeding $20,000; or
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‘‘(ii) for which at least 2 separate claims payments

have been made under such coverage, with the cumulative amount of such claims exceeding the value of

the property.

‘‘(2) MULTIFAMILY PROPERTIES.—In the case of a property

consisting of 5 or more residences, such term shall have such

meaning as the Director shall by regulation provide.

‘‘(c) ELIGIBLE ACTIVITIES.—Amounts provided under this section

to a State or community may be used only for the following activities:

‘‘(1) MITIGATION ACTIVITIES.—To carry out mitigation activities that reduce flood damages to severe repetitive loss properties, including elevation, relocation, demolition, and

floodproofing of structures, and minor physical localized flood

control projects, and the demolition and rebuilding of properties

to at least Base Flood Elevation or greater, if required by

any local ordinance.

‘‘(2) PURCHASE.—To purchase severe repetitive loss properties, subject to subsection (g).

‘‘(d) MATCHING REQUIREMENT.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

in any fiscal year the Director may not provide assistance

under this section to a State or community in an amount

exceeding 3 times the amount that the State or community

certifies, as the Director shall require, that the State or community will contribute from non-Federal funds for carrying out

the eligible activities to be funded with such assistance

amounts.

‘‘(2) REDUCED COMMUNITY MATCH.—With respect to any

1-year period in which assistance is made available under this

section, the Director may adjust the contribution required under

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

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

activities for each severe repetitive loss property for which

grant amounts are provided if, for such year—

‘‘(A) the State has an approved State mitigation plan

meeting the requirements for hazard mitigation planning

under section 322 of the Robert T. Stafford Disaster Relief

and Emergency Assistance Act (42 U.S.C. 5165) that specifies how the State intends to reduce the number of severe

repetitive loss properties; and

‘‘(B) the Director determines, after consultation with

the State, that the State has taken actions to reduce the

number of such properties.

‘‘(3) NON-FEDERAL FUNDS.—For purposes of this subsection,

the term ‘non-Federal funds’ includes State or local agency

funds, in-kind contributions, any salary paid to staff to carry

out the eligible activities of the recipient, the value of the

time and services contributed by volunteers to carry out such

activities (at a rate determined by the Director), and the value

of any donated material or building and the value of any

lease on a building.

‘‘(e) NOTICE OF MITIGATION PROGRAM.—

‘‘(1) IN GENERAL.—Upon selecting a State or community

to receive assistance under subsection (a) to carry out eligible

activities, the Director shall notify the owners of a severe
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repetitive loss property, in plain language, within that State

or community—

‘‘(A) that their property meets the definition of a severe

repetitive loss property under this section;

‘‘(B) that they may receive an offer of assistance under

this section;

‘‘(C) of the types of assistance potentially available

under this section;

‘‘(D) of the implications of declining such offer of assistance under this section; and

‘‘(E) that there is a right to appeal under this section.

‘‘(2) IDENTIFICATION OF SEVERE REPETITIVE LOSS PROPERTIES.—The Director shall take such steps as are necessary

to identify severe repetitive loss properties, and submit that

information to the relevant States and communities.

‘‘(f) STANDARDS FOR MITIGATION OFFERS.—The program under

this section for providing assistance for eligible activities for severe

repetitive loss properties shall be subject to the following limitations:

‘‘(1) PRIORITY.—In determining the properties for which

to provide assistance for eligible activities under subsection

(c), the Director shall provide assistance for properties in the

order that will result in the greatest amount of savings to

the National Flood Insurance Fund in the shortest period of

time, in a manner consistent with the allocation formula under

paragraph (5).

‘‘(2) OFFERS.—The Director shall provide assistance in a

manner that permits States and communities to make offers

to owners of severe repetitive loss properties to take eligible

activities under subsection (c) as soon as practicable.

‘‘(3) CONSULTATION.—In determining for which eligible

activities under subsection (c) to provide assistance with respect

to a severe repetitive loss property, the relevant States and

communities shall consult, to the extent practicable, with the

owner of the property.

‘‘(4) DEFERENCE TO LOCAL MITIGATION DECISIONS.—The

Director shall not, by rule, regulation, or order, establish a

priority for funding eligible activities under this section that

gives preference to one type or category of eligible activity

over any other type or category of eligible activity.

‘‘(5) ALLOCATION.—

‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and

(C), of the total amount made available for assistance under

this section in any fiscal year, the Director shall allocate

assistance to a State, and the communities located within

that State, based upon the percentage of the total number

of severe repetitive loss properties located within that

State.

‘‘(B) REDISTRIBUTION.—Any funds allocated to a State,

and the communities within the State, under subparagraph

(A) that have not been obligated by the end of each fiscal

year shall be redistributed by the Director to other States

and communities to carry out eligible activities in accordance with this section. ‘‘(C) EXCEPTION.—Of the total amount made available

for assistance under this section in any fiscal year, 10

percent shall be made available to communities that—
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‘‘(i) contain one or more severe repetitive loss properties; and

‘‘(ii) are located in States that receive little or

no assistance, as determined by the Director, under

the allocation formula under subparagraph (A).

‘‘(6) NOTICE.—Upon making an offer to provide assistance

with respect to a property for any eligible activity under subsection (c), the State or community shall notify each holder

of a recorded interest on the property of such offer and activity.

‘‘(g) PURCHASE OFFERS.—A State or community may take action

under subsection (c)(2) to purchase a severe repetitive loss property

only if the following requirements are met:

‘‘(1) USE OF PROPERTY.—The State or community enters

into an agreement with the Director that provides assurances

that the property purchased will be used in a manner that

is consistent with the requirements of section 404(b)(2)(B) of

the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170c(b)(2)(B)) for properties acquired,

accepted, or from which a structure will be removed pursuant

to a project provided property acquisition and relocation assistance under such section 404(b).

‘‘(2) OFFERS.—The Director shall provide assistance in a

manner that permits States and communities to make offers

to owners of severe repetitive loss properties and of associated

land to engage in eligible activities as soon as possible.

‘‘(3) PURCHASE PRICE.—The amount of purchase offer is

not less than the greatest of—

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

property, when purchased by the holder of the current

policy of flood insurance under this title;

‘‘(B) the total amount owed, at the time the offer to

purchase is made, under any loan secured by a recorded

interest on the property; and

‘‘(C) an amount equal to the fair market value of the

property immediately before the most recent flood event

affecting the property, or an amount equal to the current

fair market value of the property.

‘‘(4) COMPARABLE HOUSING PAYMENT.—If a purchase offer

made under paragraph (2) is less than the cost of the homeowner-occupant to purchase a comparable replacement dwelling

outside the flood hazard area in the same community, the

Director shall make available an additional relocation payment

to the homeowner-occupant to apply to the difference.

‘‘(h) INCREASED PREMIUMS IN CASES OF REFUSAL TO MITIGATE.— ‘‘(1) IN GENERAL.—In any case in which the owner of a

severe repetitive loss property refuses an offer to take action

under paragraph (1) or (2) of subsection (c) with respect to

such property, the Director shall— ‘‘(A) notify each holder of a recorded interest on the

property of such refusal; and ‘‘(B) notwithstanding subsections (a) through (c) of section 1308, thereafter the chargeable premium rate with

respect to the property shall be the amount equal to 150

percent of the chargeable rate for the property at the

time that the offer was made, as adjusted by any other

premium adjustments otherwise applicable to the property
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and any subsequent increases pursuant to paragraph (2)

and subject to the limitation under paragraph (3).

‘‘(2) INCREASED PREMIUMS UPON SUBSEQUENT FLOOD DAMAGE.—Notwithstanding subsections (a) through (c) of section

1308, if the owner of a severe repetitive loss property does

not accept an offer to take action under paragraph (1) or (2)

of subsection (c) with respect to such property and a claim

payment exceeding $1,500 is made under flood insurance coverage under this title for damage to the property caused by

a flood event occurring after such offer is made, thereafter

the chargeable premium rate with respect to the property shall

be the amount equal to 150 percent of the chargeable rate

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

by any other premium adjustments otherwise applicable to

the property and any subsequent increases pursuant to this

paragraph and subject to the limitation under paragraph (3).

‘‘(3) LIMITATION ON INCREASED PREMIUMS.—In no case may

the chargeable premium rate for a severe repetitive loss property be increased pursuant to this subsection to an amount

exceeding the applicable estimated risk premium rate for the

area (or subdivision thereof) under section 1307(a)(1).

‘‘(4) TREATMENT OF DEDUCTIBLES.—Any increase in chargeable premium rates required under this subsection for a severe

repetitive loss property may be carried out, to the extent appropriate, as determined by the Director, by adjusting any deductible charged in connection with flood insurance coverage under

this title for the property.

‘‘(5) NOTICE OF CONTINUED OFFER.—Upon each renewal

or modification of any flood insurance coverage under this

title for a severe repetitive loss property, the Director shall

notify the owner that the offer made pursuant to subsection

(c) is still open.

‘‘(6) APPEALS.—

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

loss property may appeal a determination of the Director

to take action under paragraph (1)(B) or (2) with respect

to such property, based only upon the following grounds:

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

property will not be able to purchase a replacement

primary residence of comparable value and that is

functionally equivalent.

‘‘(ii) Based on independent information, such as

contractor estimates or appraisals, the property owner

believes that the price offered for purchasing the property is not an accurate estimation of the value of

the property, or the amount of Federal funds offered

for mitigation activities, when combined with funds

from non-Federal sources, will not cover the actual

cost of mitigation.

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

or maintenance of any prehistoric or historic district,

site, building, structure, or object included in, or

eligible for inclusion in, the National Register of Historic Places will be interfered with, impaired, or disrupted.
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‘‘(iv) The flooding that resulted in the flood insurance claims described in subsection (b)(2) for the property resulted from significant actions by a third party

in violation of Federal, State, or local law, ordinance,

or regulation.

‘‘(v) In purchasing the property, the owner relied

upon flood insurance rate maps of the Federal Emergency Management Agency that were current at the

time and did not indicate that the property was located

in an area having special flood hazards.

‘‘(vi) The owner of the property, based on independent information, such as contractor estimates or

other appraisals, demonstrates that an alternative

eligible activity under subsection (c) is at least as cost

effective as the initial offer of assistance.

‘‘(B) PROCEDURE.—An appeal under this paragraph of

a determination of the Director shall be made by filing,

with the Director, a request for an appeal within 90 days

after receiving notice of such determination. Upon receiving

the request, the Director shall select, from a list of independent third parties compiled by the Director for such

purpose, a party to hear such appeal. Within 90 days

after filing of the request for the appeal, such third party

shall review the determination of the Director and shall

set aside such determination if the third party determines

that the grounds under subparagraph (A) exist. During

the pendency of an appeal under this paragraph, the

Director shall stay the applicability of the rates established

pursuant to paragraph (1)(B) or (2), as applicable.

‘‘(C) EFFECT OF FINAL DETERMINATION.—In an appeal

under this paragraph—

‘‘(i) if a final determination is made in favor of

the property owner under subparagraph (A) exist, the

third party hearing such appeal shall require the

Director to reduce the chargeable risk premium rate

for flood insurance coverage for the property involved

in the appeal from the amount required under paragraph (1)(B) or (2) to the amount paid prior to the

offer to take action under paragraph (1) or (2) of subsection (c); and

‘‘(ii) if a final determination is made that the

grounds under subparagraph (A) do not exist, the

Director shall promptly increase the chargeable risk

premium rate for such property to the amount established pursuant to paragraph (1)(B) or (2), as

applicable, and shall collect from the property owner

the amount necessary to cover the stay of the applicability of such increased rates during the pendency of

the appeal.

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

under this paragraph is compensated for such service, the

costs of such compensation shall be borne—

‘‘(i) by the owner of the property requesting the

appeal, if the final determination in the appeal is that

the grounds under subparagraph (A) do not exist; and
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‘‘(ii) by the National Flood Insurance Fund, if such

final determination is that the grounds under subparagraph (A) do exist.

‘‘(E) REPORT.—Not later than 6 months after the date

of the enactment of the Bunning-Bereuter-Blumenauer

Flood Insurance Reform Act of 2004, the Director shall

submit a report describing the rules, procedures, and

administration for appeals under this paragraph to—

‘‘(i) the Committee on Banking, Housing, and

Urban Affairs of the Senate; and

‘‘(ii) the Committee on Financial Services of the

House of Representatives.

‘‘(i) DISCRETIONARY ACTIONS IN CASES OF FRAUDULENT

CLAIMS.—If the Director determines that a fraudulent claim was

made under flood insurance coverage under this title for a severe

repetitive loss property, the Director may—

‘‘(1) cancel the policy and deny the provision to such policyholder of any new flood insurance coverage under this title

for the property; or

‘‘(2) refuse to renew the policy with such policyholder upon

expiration and deny the provision of any new flood insurance

coverage under this title to such policyholder for the property.

‘‘(j) RULES.—

‘‘(1) IN GENERAL.—The Director shall, by rule—

‘‘(A) subject to subsection (f)(4), develop procedures

for the distribution of funds to States and communities

to carry out eligible activities under this section; and

‘‘(B) ensure that the procedures developed under paragraph (1)—

‘‘(i) require the Director to notify States and

communities of the availability of funding under this

section, and that participation in the pilot program

under this section is optional;

‘‘(ii) provide that the Director may assist States

and communities in identifying severe repetitive loss

properties within States or communities;

‘‘(iii) allow each State and community to select

properties to be the subject of eligible activities, and

the appropriate eligible activity to be performed with

respect to each severe repetitive loss property; and

‘‘(iv) require each State or community to submit

a list of severe repetitive loss properties to the Director

that the State or community would like to be the

subject of eligible activities under this section.

‘‘(2) CONSULTATION.—Not later than 90 days after the date

of enactment of this Act, the Director shall consult with State

and local officials in carrying out paragraph (1)(A), and provide

an opportunity for an oral presentation, on the record, of data

and arguments from such officials.

‘‘(k) FUNDING.—

‘‘(1) IN GENERAL.—Pursuant to section 1310(a)(8), the

Director may use amounts from the National Flood Insurance

Fund to provide assistance under this section in each of fiscal

years 2005, 2006, 2007, 2008, and 2009, except that the amount

so used in each such fiscal year may not exceed $40,000,000

and shall remain available until expended. Notwithstanding
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any other provision of this title, amounts made available pursuant to this subsection shall not be subject to offsetting collections through premium rates for flood insurance coverage under

this title.

‘‘(2) ADMINISTRATIVE EXPENSES.—Of the amounts made

available under this subsection, the Director may use up to

5 percent for expenses associated with the administration of

this section.

‘‘(l) TERMINATION.—The Director may not provide assistance

under this section to any State or community after September

30, 2009.’’.

(b) AVAILABILITY OF NATIONAL FLOOD INSURANCE FUND

AMOUNTS.—Section 1310(a) of the National Flood Insurance Act

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

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

(2) by striking paragraph (8) and inserting the following:

‘‘(8) for financial assistance under section 1361A to States

and communities for taking actions under such section with

respect to severe repetitive loss properties, but only to the

extent provided in section 1361A(i); and’’.

SEC. 103. AMENDMENTS TO EXISTING FLOOD MITIGATION ASSISTANCE PROGRAM.

(a) STANDARD FOR APPROVAL OF MITIGATION PLANS.—Section

1366(e)(3) of the National Flood Insurance Act of 1968 (42 U.S.C.

4104c) is amended by adding at the end the following new sentence:

‘‘The Director may approve only mitigation plans that give priority

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

as are in the best interest of the National Flood Insurance Fund.’’.

(b) PRIORITY FOR MITIGATION ASSISTANCE.—Section 1366(e) of

the National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is

amended by striking paragraph (4) and inserting the following:

‘‘(4) PRIORITY FOR MITIGATION ASSISTANCE.—In providing

grants under this subsection for mitigation activities, the

Director shall give first priority for funding to such properties,

or to such subsets of such properties as the Director may

establish, that the Director determines are in the best interests

of the National Flood Insurance Fund and for which matching

amounts under subsection (f) are available.’’.

(c) COORDINATION WITH STATES AND COMMUNITIES.—Section

1366 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c)

is amended by adding at the end the following:

‘‘(m) COORDINATION WITH STATES AND COMMUNITIES.—The

Director shall, in consultation and coordination with States and

communities take such actions as are appropriate to encourage

and improve participation in the national flood insurance program

of owners of properties, including owners of properties that are

not located in areas having special flood hazards (the 100-year

floodplain), but are located within flood prone areas.’’.

(d) FUNDING.—Section 1367 of the National Flood Insurance

Act of 1968 (42 U.S.C. 4104d) is amended—

(1) in subsection (b), by striking paragraph (1) and inserting

the following:

‘‘(1) in each fiscal year, amounts from the National Flood

Insurance Fund not exceeding $40,000,000, to remain available

until expended;’’;
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(2) by redesignating subsections (c) and (d) as subsections

(d) and (e), respectively; and

(3) by inserting after subsection (b) the following: ‘‘(c) ADMINISTRATIVE EXPENSES.—The Director may use not

more than 5 percent of amounts made available under subsection

(b) to cover salaries, expenses, and other administrative costs

incurred by the Director to make grants and provide assistance

under sections 1366 and 1323.’’. (e) REDUCED COMMUNITY MATCH.—Section 1366(g) of the

National Flood Insurance Act of 1968 (42 U.S.C. 4104c(g)), is

amended—

(2) by redesignating paragraph (2) as paragraph (3); and

(3) by inserting after paragraph (1) the following:

‘‘(2) REDUCED COMMUNITY MATCH.—With respect to any

1-year period in which assistance is made available under this

section, the Director may adjust the contribution required under

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

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

activities for each severe repetitive loss property for which

grant amounts are provided if, for such year— ‘‘(A) the State has an approved State mitigation plan

meeting the requirements for hazard mitigation planning

under section 322 of the Robert T. Stafford Disaster Relief

and Emergency Assistance Act (42 U.S.C. 5165) that specifies how the State intends to reduce the number of severe

repetitive loss properties; and ‘‘(B) the Director determines, after consultation with

the State, that the State has taken actions to reduce the

number of such properties.’’. (f) NATIONAL FLOOD MITIGATION FUND.—Section 1366(b)(2) of

the National Flood Insurance Act of 1968 (42 U.S.C. 4104c(b)(2)),

is amended by striking ‘‘$1,500,000’’ and inserting ‘‘7.5 percent

of the available funds under this section’’.

SEC. 104. FEMA AUTHORITY TO FUND MITIGATION ACTIVITIES FOR

INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.

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

Act of 1968 (42 U.S.C. 4011 et seq.) is amended by adding at

the end the following:

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

‘‘(a) IN GENERAL.—The Director may provide funding for mitigation actions that reduce flood damages to individual properties

for which 1 or more claim payments for losses have been made

under flood insurance coverage under this title, but only if the

Director determines that— ‘‘(1) such activities are in the best interest of the National

Flood Insurance Fund; and

‘‘(2) such activities cannot be funded under the program

under section 1366 because—

‘‘(A) the requirements of section 1366(g) are not being

met by the State or community in which the property

is located; or

‘‘(B) the State or community does not have the capacity

to manage such activities.

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

the properties for which funding is to be provided under this section,
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the Director shall consult with the States in which such properties

are located and provide assistance for properties in the order that

will result in the greatest amount of savings to the National Flood

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

(b) AVAILABILITY OF NATIONAL FLOOD INSURANCE FUND

AMOUNTS.—Section 1310(a) of the National Flood Insurance Act

of 1968 (42 U.S.C. 4017(a)) is amended by adding at the end

the following:

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

year, for mitigation actions under section 1323, except that,

notwithstanding any other provision of this title, amounts made

available pursuant to this paragraph shall not be subject to

offsetting collections through premium rates for flood insurance

coverage under this title.’’.

SEC. 105. AMENDMENTS TO ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE AND CONTROL MEASURES.

(a) COMPLIANCE WITH LAND USE AND CONTROL MEASURES.—

Section 1304(b) of the National Flood Insurance Act of 1968 (42

U.S.C. 4011(b)) is amended—

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

(A) by striking ‘‘compliance’’ and inserting ‘‘implementing measures that are consistent’’; and

(B) by inserting ‘‘by the community’’ after ‘‘established’’;

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

which the cost of repairs equals or exceeds 50 percent of the

value of the structure at the time of the flood event; and’’

and inserting ‘‘are substantially damaged structures;’’

(3) in paragraph (3), by striking ‘‘compliance with land

use and control measures.’’ and inserting ‘‘the implementation

of such measures; and’’; and

(4) by inserting after paragraph (3) and before the last

undesignated paragraph the following:

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

is made under—

‘‘(A) section 1366 (Flood Mitigation Assistance Program);

‘‘(B) section 1368 (Repetitive Loss Priority Program

and Individual Priority Property Program);

‘‘(C) the Hazard Mitigation Grant Program authorized

under section 404 of the Robert T. Stafford Disaster Assistance and Emergency Relief Act (42 U.S.C. 5170c);

‘‘(D) the Predisaster Hazard Mitigation Program under

section 203 of the Robert T. Stafford Disaster Assistance

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

‘‘(E) any programs authorized or for which funds are

appropriated to address any unmet needs or for which

supplemental funds are made available.’’.

(b) DEFINITIONS.—Section 1370(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is amended—

(1) by striking paragraph (7) and inserting the following:

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

covered by a contract for flood insurance that— ‘‘(A) has incurred flood-related damage on 2 occasions,

in which the cost of repair, on the average, equaled or

exceeded 25 percent of the value of the structure at the

time of each such flood event; and
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‘‘(B) at the time of the second incidence of flood-related

damage, the contract for flood insurance contains increased

cost of compliance coverage.’’;

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

(3) in paragraph (14), by striking the period and inserting ‘‘; and’’; and

(4) by adding at the end the following:

‘‘(15) the term ‘substantially damaged structure’ means

a structure covered by a contract for flood insurance that has

incurred damage for which the cost of repair exceeds an amount

specified in any regulation promulgated by the Director, or

by a community ordinance, whichever is lower.’’.

SEC. 106. ACTUARIAL RATE PROPERTIES.

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

Act of 1968 (42 U.S.C. 4015) is amended by striking subsection

(c) and inserting the following: ‘‘(c) ACTUARIAL RATE PROPERTIES.—Subject only to the limitations provided under paragraphs (1) and (2), the chargeable rate

shall not be less than the applicable estimated risk premium rate

for such area (or subdivision thereof) under section 1307(a)(1) with

respect to the following properties:

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

or substantial improvement of which the Director determines

has been started after December 31, 1974, or started after

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, except that

the chargeable rate for properties under this paragraph shall

be subject to the limitation under subsection (e).

‘‘(2) CERTAIN LEASED COASTAL AND RIVER PROPERTIES.—

Any property leased from the Federal Government (including

residential and nonresidential properties) that the Director

determines is located on the river-facing side of any dike,

levee, or other riverine flood control structure, or seaward of

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

(b) INAPPLICABILITY OF ANNUAL LIMITATIONS ON PREMIUM

INCREASES.—Section 1308(e) of the National Flood Insurance Act

of 1968 (42 U.S.C. 4015(e)) is amended by striking ‘‘Notwithstanding’’ and inserting ‘‘Except with respect to properties described

under paragraph (2) or (3) of subsection (c), and notwithstanding’’.

SEC. 107. GEOSPATIAL DIGITAL FLOOD HAZARD DATA.

For the purposes of flood insurance and floodplain management

activities conducted pursuant to the National Flood Insurance Program under the National Flood Insurance Act of 1968 (42 U.S.C.

4001 et seq.), geospatial digital flood hazard data distributed by

the Federal Emergency Management Agency, or its designee, or

the printed products derived from that data, are interchangeable

and legally equivalent for the determination of the location of

1 in 100 year and 1 in 500 year flood planes, provided that all

other geospatial data shown on the printed product meets or exceeds

any accuracy standard promulgated by the Federal Emergency

Management Agency.

SEC. 108. REPLACEMENT OF MOBILE HOMES ON ORIGINAL SITES.

Section 1315 of the National Flood Insurance Act of 1968 (42

U.S.C. 4022) is amended by adding at the end the following:
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‘‘(c) REPLACEMENT OF MOBILE HOMES ON ORIGINAL SITES.—

‘‘(1) COMMUNITY PARTICIPATION.—The placement of any

mobile home on any site shall not affect the eligibility of any

community to participate in the flood insurance program under

this title and the Flood Disaster Protection Act of 1973 (notwithstanding that such placement may fail to comply with any

elevation or flood damage mitigation requirements), if—

‘‘(A) such mobile home was previously located on such

site;

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

because of flooding that threatened or affected such site;

and

‘‘(C) such replacement is conducted not later than the

expiration of the 180-day period that begins upon the

subsidence (in the area of such site) of the body of water

that flooded to a level considered lower than flood levels.

‘‘(2) DEFINITION.—For purposes of this subsection, the term

‘mobile home’ has the meaning given such term in the law

of the State in which the mobile home is located.’’.

SEC. 109. REITERATION OF FEMA RESPONSIBILITY TO MAP

MUDSLIDES.

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

Act of 1968 (42 U.S.C. 4101(b)), the Director of the Federal Emergency Management Agency is again directed to accelerate the identification of risk zones within flood-prone and mudslide-prone areas,

as provided by subsection (a)(2) of such section 1360, in order

to make known the degree of hazard within each such zone at

the earliest possible date.

TITLE II—MISCELLANEOUS

PROVISIONS

SEC. 201. DEFINITIONS.

In this title, the following definitions shall apply:

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

of the Federal Emergency Management Agency.

(2) FLOOD INSURANCE POLICY.—The term ‘‘flood insurance

policy’’ means a flood insurance policy issued under the

National Flood Insurance Act of 1968 (42 U.S.C. et seq.).

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

Flood Insurance Program established under the National Flood

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

SEC. 202. SUPPLEMENTAL FORMS.

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

enactment of this Act, the Director shall develop supplemental

forms to be issued in conjunction with the issuance of a flood

insurance policy that set forth, in simple terms—

(1) the exact coverages being purchased by a policyholder;

(2) any exclusions from coverage that apply to the coverages

purchased;

(3) an explanation, including illustrations, of how lost items

and damages will be valued under the policy at the time of

loss;
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(4) the number and dollar value of claims filed under

a flood insurance policy over the life of the property, and

the effect, under the National Flood Insurance Act of 1968

(42 U.S.C. 4001 et seq.), of the filing of any further claims

under a flood insurance policy with respect to that property;

and

(5) any other information that the Director determines

will be helpful to policyholders in understanding flood insurance

coverage.

(b) DISTRIBUTION.—The forms developed under subsection (a)

shall be given to— (1) all holders of a flood insurance policy at the time of

purchase and renewal; and

(2) insurance companies and agents that are authorized

to sell flood insurance policies.

SEC. 203. ACKNOWLEDGEMENT FORM.

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

enactment of this Act, the Director shall develop an acknowledgement form to be signed by the purchaser of a flood insurance

policy that contains—

(1) an acknowledgement that the purchaser has received

a copy of the standard flood insurance policy, and any forms

developed under section 202; and

(2) an acknowledgement that the purchaser has been told

that the contents of a property or dwelling are not covered

under the terms of the standard flood insurance policy, and

that the policyholder has the option to purchase additional

coverage for such contents.

(b) DISTRIBUTION.—Copies of an acknowledgement form

executed under subsection (a) shall be made available to the purchaser and the Director.

SEC. 204. FLOOD INSURANCE CLAIMS HANDBOOK.

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

enactment of this Act, the Director shall develop a flood insurance

claims handbook that contains—

(1) a description of the procedures to be followed to file

a claim under the Program, including how to pursue a claim

to completion;

(2) how to file supplementary claims, proof of loss, and

any other information relating to the filing of claims under

the Program; and

(3) detailed information regarding the appeals process

established under section 205.

(b) DISTRIBUTION.—The handbook developed under subsection

(a) shall be made available to—

(1) each insurance company and agent authorized to sell

flood insurance policies; and

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

of a flood insurance policy, and at the time of any flood loss

sustained by such purchaser.

SEC. 205. APPEAL OF DECISIONS RELATING TO FLOOD INSURANCE

COVERAGE.

Not later than 6 months after the date of enactment of this

Act, the Director shall, by regulation, establish an appeals process

through which holders of a flood insurance policy may appeal the
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decisions, with respect to claims, proofs of loss, and loss estimates

relating to such flood insurance policy, of—

(1) any insurance agent or adjuster, or insurance company;

or

(2) any employee or contractor of the Federal Emergency

Management Agency.

SEC. 206. STUDY AND REPORT ON USE OF COST COMPLIANCE COVERAGE.

Not later than 1 year after the date of enactment of this

Act, the Director of the Federal Emergency Management Agency

shall submit to Congress a report that sets forth—

(1) the use of cost of compliance coverage under section

1304(b) of the National Flood Insurance Act of 1968 (42 U.S.C.

4011(b)) in connection with flood insurance policies;

(2) any barriers to policyholders using the funds provided

by cost of compliance coverage under that section 1304(b) under

a flood insurance policy, and recommendations to address those

barriers; and

(3) the steps that the Federal Emergency Management

Agency has taken to ensure that funds paid for cost of compliance coverage under that section 1304(b) are being used to

lessen the burdens on all homeowners and the Program.

SEC. 207. MINIMUM TRAINING AND EDUCATION REQUIREMENTS.

The Director of the Federal Emergency Management Agency

shall, in cooperation with the insurance industry, State insurance

regulators, and other interested parties—

(1) establish minimum training and education requirements

for all insurance agents who sell flood insurance policies; and

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

of this Act, publish these requirements in the Federal Register,

and inform insurance companies and agents of the requirements.

SEC. 208. GAO STUDY AND REPORT.

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

conduct a study of—

(1) the adequacy of the scope of coverage provided under

flood insurance policies in meeting the intended goal of Congress that flood victims be restored to their pre-flood conditions,

and any recommendations to ensure that goal is being met;

(2) the adequacy of payments to flood victims under flood

insurance policies; and

(3) the practices of the Federal Emergency Management

Agency and insurance adjusters in estimating losses incurred

during a flood, and how such practices affect the adequacy

of payments to flood victims.

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

of this Act, the Comptroller General shall submit to Congress a

report regarding the results of the study under subsection (a).

SEC. 209. PROSPECTIVE PAYMENT OF FLOOD INSURANCE PREMIUMS.

Section 1308 of the National Flood Insurance Act of 1968 (42

U.S.C. 4015) is amended by adding at the end the following: ‘‘(f) ADJUSTMENT OF PREMIUM.—Notwithstanding any other

provision of law, if the Director determines that the holder of

a flood insurance policy issued under this Act is paying a lower
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premium than is required under this section due to an error in

the flood plain determination, the Director may only prospectively

charge the higher premium rate.’’.

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

ARRANGEMENTS.

Not later than 3 months after the date of enactment of this

Act, the Director shall submit a report on any changes or modifications made to the fee schedule or fee payment arrangements

between the Federal Emergency Management Agency and insurance

adjusters who provide services with respect to flood insurance policies to—

(1) the Committee on Banking, Housing, and Urban Affairs

of the Senate; and

(2) the Committee on Financial Services of the House of

Representatives.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.