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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2238 Enrolled Bill (ENR)]

        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 ``Bunning-Bereuter-
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 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 high-
    priority 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.

           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
                ``(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 
    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--
                ``(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 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.
                ``(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
                ``(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 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;'';
        (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, 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
            ``(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:
    ``(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;
        (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 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 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.
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