`[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3589 Reported in Senate (RS)]







                                                       Calendar No. 498
109th CONGRESS
  2d Session
                                S. 3589

                          [Report No. 109-271]

   To amend the National Flood Insurance Act of 1968, to restore the 
financial solvency of the flood insurance fund, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 28, 2006

 Mr. Shelby, from the Committee on Banking, Housing, and Urban Affairs 
 reported the following original bill; which was read twice and placed 
                            on the calendar

_______________________________________________________________________

                                 A BILL


 
   To amend the National Flood Insurance Act of 1968, to restore the 
financial solvency of the flood insurance fund, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; Table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Reform of premium rate structure.
Sec. 5. Mandatory coverage areas.
Sec. 6. Premium adjustment.
Sec. 7. State chartered financial institutions.
Sec. 8. Enforcement.
Sec. 9. Escrow of flood insurance payments.
Sec. 10. Financing of funds from the Treasury.
Sec. 11. Borrowing authority debt forgiveness.
Sec. 12. Minimum deductibles for claims under the National Flood 
                            Insurance Program.
Sec. 13. Considerations in determining chargeable premium rates.
Sec. 14. Reserve fund.
Sec. 15. Repayment plan for borrowing authority.
Sec. 16. Technical Mapping Advisory Council.
Sec. 17. National Flood Mapping Program.
Sec. 18. Removal of limitation on State contributions for updating 
                            flood maps.
Sec. 19. Nonmandatory participation.
Sec. 20. Notice of flood insurance availability under RESPA.
Sec. 21. Testing of new floodproofing technologies.
Sec. 22. Participation in State disaster claims mediation programs.
Sec. 23. Reiteration of FEMA responsibilities under the 2004 Reform 
                            Act.
Sec. 24. Studies, Audits, and Reports.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the flood insurance claims resulting from the hurricane 
        season of 2005 will likely exceed all previous claims paid by 
        the National Flood Insurance Program;
            (2) the continuation of subsidized premium rates undermines 
        the financial solvency of the National Flood Insurance Fund;
            (3) the presence of subsidized premium rates encourages 
        families to continue residing in high risk areas, often without 
        appropriate mitigation activities;
            (4) substantial flooding occurs outside of existing special 
        flood hazard areas;
            (5) recent events throughout the country involving areas 
        behind man-made structures, known as ``residual risk'' areas, 
        have produced catastrophic losses;
            (6) although such man-made structures produce an added 
        element of safety and therefore lessen the probability that a 
        disaster will occur, they are nevertheless susceptible to 
        catastrophic loss, even though such areas at one time were not 
        included within the 100-year floodplain; and
            (7) voluntary participation in the National Flood Insurance 
        Program has been minimal and many families residing outside the 
        100-year floodplain remain unaware of the potential risk to 
        their lives and property.

SEC. 3. DEFINITIONS.

    (a) In General.--In this Act, the following definitions shall 
apply:
            (1) National flood insurance program.--The term ``National 
        Flood Insurance Program'' means the program established under 
        the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et 
        seq.).
            (2) 100-year floodplain.--The term ``100-year floodplain'' 
        means that area which is subject to inundation from a flood 
        having a 1 percent chance of being equaled or exceeded in any 
        given year.
            (3) 500-year floodplain.--The term ``500-year floodplain'' 
        means that area which is subject to inundation from a flood 
        having a 0.2 percent chance of being equaled or exceeded in any 
        given year.
            (4) Write your own.--The term ``Write Your Own'' means the 
        cooperative undertaking between the insurance industry and the 
        Flood Insurance Administration which allows participating 
        property and casualty insurance companies to write and service 
        standard flood insurance policies.
    (b) Common Terminology.--Except as otherwise provided in this Act, 
any terms used in this Act shall have the meaning given to such terms 
under section 1370 of the National Flood Insurance Act of 1968 (42 
U.S.C. 4121).

SEC. 4. REFORM OF PREMIUM RATE STRUCTURE.

    (a) To Exclude Certain Properties From Receiving Subsidized Premium 
Rates.--
            (1) In general.--Section 1307 of the National Flood 
        Insurance Act of 1968 (42 U.S.C. 4014) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (2), by striking ``; and'' 
                        and inserting a semicolon;
                            (ii) in paragraph (3), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
            ``(4) the exclusion of prospective insureds from purchasing 
        flood insurance at rates less than those estimated under 
        paragraph (1), as required by paragraph (2), for certain 
        properties, including for--
                    ``(A) any property which is not the primary 
                residence of an individual;
                    ``(B) any severe repetitive loss property, as 
                defined in section 1361A(b);
                    ``(C) any property that has incurred flood-related 
                damage in which the cumulative amounts of payments 
                under this title equaled or exceeded the fair market 
                value of such property;
                    ``(D) any business property; and
                    ``(E) any property which on or after the date of 
                enactment of the Flood Insurance Reform and 
                Modernization Act of 2006 has experienced or 
                sustained--
                            ``(i) substantial damage exceeding 50 
                        percent of the fair market value of such 
                        property; or
                            ``(ii) substantial improvement exceeding 30 
                        percent of the fair market value of such 
                        property.''; and
                    (B) by adding at the end the following:
    ``(g) No Extension of Subsidy to New Policies or Lapsed Policies.--
The Director shall not provide flood insurance to prospective insureds 
at rates less than those estimated under subsection (a)(1), as required 
by paragraph (2) of that subsection, for--
            ``(1) any property not insured by the flood insurance 
        program as of the date of enactment of the Flood Insurance 
        Reform and Modernization Act of 2006; and
            ``(2) any policy under the flood insurance program that has 
        lapsed in coverage, as a result of the deliberate choice of the 
        holder of such policy.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall become effective 90 days after the date of the enactment 
        of this Act.
    (b) Increase in Annual Limitation on Premium Increases.--Section 
1308(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)) 
is amended--
            (1) by striking ``under this title for any properties 
        within any single'' and inserting the following: ``under this 
        title for any properties--
            ``(1) within any single'';
            (2) by striking ``10 percent'' and inserting ``15 
        percent''; and
            (3) by striking the period at the end and inserting the 
        following: ``; and
            ``(2) described in section 1307(a)(4) shall be increased by 
        25 percent each year, until the average risk premium rate for 
        such properties is equal to the average of the risk premium 
        rates for properties described under paragraph (1).''.

SEC. 5. MANDATORY COVERAGE AREAS.

    (a) Special Flood Hazard Areas.--Not later than 90 days after the 
date of enactment of this Act, the Director shall issue final 
regulations establishing a revised definition of areas of special flood 
hazards for purposes of the National Flood Insurance Program.
    (b) Residual Risk Areas.--The regulations required by subsection 
(a) shall--
            (1) include any area previously identified by the Director 
        as an area having special flood hazards under section 102 of 
        the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a)); 
        and
            (2) require the expansion of areas of special flood hazards 
        to include areas of residual risk, including areas that are 
        located behind levees, dams, and other man-made structures.
    (c) Mandatory Participation in National Flood Insurance Program.--
            (1) In general.--Any area described in subsection (b) shall 
        be subject to the mandatory purchase requirements of sections 
        102 and 202 of the Flood Disaster Protection Act of 1973 (42 
        U.S.C. 4012a, 4106).
            (2) Limitation.--The mandatory purchase requirement under 
        paragraph (1) shall have no force or effect until the Director 
        completes the mapping of all residual risk areas in the United 
        States that the Director determines essential in order to 
        administer the National Flood Insurance Program, as required 
        under section 17.

SEC. 6. PREMIUM ADJUSTMENT.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4015) is amended by adding at the end the following:
    ``(g) Premium Adjustment to Reflect Current Risk of Flood.--
Notwithstanding subsection (f), and upon completion of the updating of 
any flood insurance rate map under this Act, the Flood Disaster 
Protection Act of 1973, or the Flood Insurance Reform and Modernization 
Act of 2006, any property located in an area that is participating in 
the national flood insurance program may have the risk premium rate 
charged for flood insurance on such property adjusted to accurately 
reflect the current risk of flood to such property, subject to any 
other provision of this Act.''.

SEC. 7. STATE CHARTERED FINANCIAL INSTITUTIONS.

    Section 1305(c) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4012(c)) is amended--
            (1) in paragraph (1), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) given satisfactory assurance that by December 31, 
        2008, lending institutions chartered by a State, and not 
        insured by the Federal Deposit Insurance Corporation, shall be 
        subject to regulations by that State that are consistent with 
        the requirements of section 102 of the Flood Disaster 
        Protection Act of 1973 (42 U.S.C. 4012a).''.

SEC. 8. ENFORCEMENT.

    Section 102(f)(5) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a(f)(5)) is amended--
            (1) in the first sentence, by striking ``$350'' and 
        inserting ``$2,000''; and
            (2) by striking the second sentence.

SEC. 9. ESCROW OF FLOOD INSURANCE PAYMENTS.

    (a) In General.--Section 102(d) of the Flood Disaster Protection 
Act of 1973 (42 U.S.C. 4012a(d)) is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) Regulated lending institutions.--Each Federal entity 
        for lending regulation (after consultation and coordination 
        with the Federal Financial Institutions Examination Council) 
        shall, by regulation, direct that any premiums and fees for 
        flood insurance under the National Flood Insurance Act of 1968, 
        on any property for which a loan has been made for acquisition 
        or construction purposes shall be paid to the mortgage lender, 
        with the same frequency as payments on the loan are made, for 
        the duration of the loan. Upon receipt of any premiums or fees, 
        the lender shall deposit such premiums and fees in an escrow 
        account on behalf of the borrower. Upon receipt of a notice 
        from the Director or the provider of the flood insurance that 
        insurance premiums are due, the remaining balance of an escrow 
        account shall be paid to the provider of the flood 
        insurance.''; and
            (2) by adding at the end the following:
            ``(6) Notice upon loan termination.--Upon final payment of 
        the mortgage, a regulated lending institution shall provide 
        notice to the policyholder that insurance coverage may cease 
        with such final payment. The regulated lending institution 
        shall also provide direction as to how the homeowner may 
        continue flood insurance coverage after the life of the 
        loan.''.
    (b) Applicability.--The amendment made by subsection (a)(1) shall 
apply to any mortgage outstanding or entered into on or after the 
expiration of the 2-year period beginning on the date of enactment of 
this Act.

SEC. 10. FINANCING OF FUNDS FROM THE TREASURY.

    (a) In General.--Notwithstanding the requirements of section 15(e) 
of the Federal Flood Insurance Act of 1956 (42 U.S.C. 2414(e)), the 
Secretary of the Treasury is authorized and directed to transfer, 
without securing any notes or other obligations from the Director, such 
sums as may be necessary for the payment of claims for any damage to or 
loss of property which is covered by flood insurance made available 
under the National Flood Insurance Program, including any sums which 
are in excess of amounts borrowed by the Director from the Secretary, 
as of the date of enactment of this Act, under the authority vested to 
the Director under section 1309 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4016), to pay claims resulting from the hurricane 
season of 2005.
    (b) Public Debt Transactions.--In meeting the obligations 
established under subsection (a), the Secretary of the Treasury is 
authorized to use as a public debt transaction the proceeds of the sale 
of any securities issued after the date of enactment of this Act under 
chapter 31 of title 31, United States Code.

SEC. 11. BORROWING AUTHORITY DEBT FORGIVENESS.

    (a) In General.--The Secretary of the Treasury relinquishes the 
right to any repayment of amounts due from the Director in connection 
with the exercise of the authority vested to the Director to borrow 
such sums under section 1309 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4016), to the extent such borrowed sums were used to 
fund the payment of flood insurance claims under the National Flood 
Insurance Program for any damage to or loss of property resulting from 
the hurricanes of 2005.
    (b) Certification.--The debt forgiveness described under subsection 
(a) shall only take effect if the Director certifies to the Secretary 
of Treasury that all authorized resources or funds available to the 
Director to operate the National Flood Insurance Program--
            (1) have been otherwise obligated to pay claims under the 
        National Flood Insurance Program; and
            (2) are not otherwise available to make payments to the 
        Secretary on any outstanding notes or obligations issued by the 
        Director and held by the Secretary.
    (c) Decrease in Borrowing Authority.--The first sentence of 
subsection (a) of section 1309 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4016(a)), as amended by the National Flood Insurance 
Program Enhanced Borrowing Authority Act of 2006 (Public Law 109-208; 
120 Stat. 317), is amended by striking ``$20,775,000,000'' and 
inserting ``$1,500,000,000''.

SEC. 12. MINIMUM DEDUCTIBLES FOR CLAIMS UNDER THE NATIONAL FLOOD 
              INSURANCE PROGRAM.

    Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4019) is amended--
            (1) by striking ``The Director is'' and inserting the 
        following:
    ``(a) In General.--The Director is''; and
            (2) by adding at the end the following:
    ``(b) Minimum Annual Deductible.--For any property or structure 
which is covered by flood insurance under this title, the minimum 
annual deductible shall be--
            ``(1) $2,000, if construction or substantial improvement 
        occurred on such property or structure on or before December 
        31, 1974, or before the effective date of an initial flood 
        insurance rate map published by the Director under section 1360 
        for the area in which such property or structure is located; 
        and
            ``(2) $1,000, if construction or substantial improvement 
        occurred on such property or structure after December 31, 1974, 
        or after the effective date of an initial flood insurance rate 
        map published by the Director under section 1360 for the area 
        in which such property or structure is located.''.

SEC. 13. CONSIDERATIONS IN DETERMINING CHARGEABLE PREMIUM RATES.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4015(b)) is amended--
            (1) in subsection (a), by striking ``, after consultation 
        with'' and all that follows through ``by regulation'' and 
        inserting ``prescribe, after providing notice'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking the period at the 
                end and inserting a semicolon;
                    (B) in paragraph (2), by striking the comma at the 
                end and inserting a semicolon;
                    (C) in paragraph (3), by striking ``, and'' and 
                inserting a semicolon;
                    (D) in paragraph (4), by striking the period and 
                inserting ``; and''; and
                    (E) by adding at the end the following:
            ``(5) adequate, on the basis of accepted actuarial 
        principles, to cover the average historical loss year 
        obligations incurred by the National Flood Insurance Fund.''; 
        and
            (3) by adding at the end the following:
    ``(h) Rule of Construction.--For purposes of this section, the 
calculation of an `average historical loss year' includes catastrophic 
loss years.''.

SEC. 14. RESERVE FUND.

    Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 
4011 et seq.) is amended by inserting after section 1310 the following:

``SEC. 1310A. RESERVE FUND.

    ``(a) In General.--In carrying out the flood insurance program 
authorized by this chapter, the Director shall establish in the 
Treasury of the United States a National Flood Insurance Reserve Fund 
(in this section referred to as the `Reserve Fund') which shall--
            ``(1) be an account separate from any other accounts or 
        funds available to the Director; and
            ``(2) be available for meeting the expected future 
        obligations of the flood insurance program.
    ``(b) Reserve Ratio.--Subject to the phase-in requirements under 
subsection (d), the Reserve Fund shall maintain a balance equal to--
            ``(1) 1 percent of the sum of the total potential loss 
        exposure of all outstanding flood insurance policies in force 
        in the prior fiscal year; or
            ``(2) such higher percentage as the Director determines to 
        be appropriate, taking into consideration any circumstance that 
        may raise a significant risk of substantial future losses to 
        the Reserve Fund.
    ``(c) Maintenance of Reserve Ratio.--
            ``(1) In general.--The Director shall have the authority to 
        establish, increase, or decrease the amount of aggregate annual 
        insurance premiums to be collected for any fiscal year 
        necessary--
                    ``(A) to maintain the reserve ratio required under 
                subsection (b); and
                    ``(B) to achieve such reserve ratio, if the actual 
                balance of such reserve is below the amount required 
                under subsection (b).
            ``(2) Considerations.--In exercising the authority granted 
        under paragraph (1), the Director shall consider--
                    ``(A) the expected operating expenses of the 
                Reserve Fund;
                    ``(B) the insurance loss expenditures under the 
                flood insurance program;
                    ``(C) any investment income generated under the 
                flood insurance program; and
                    ``(D) any other factor that the Director determines 
                appropriate.
            ``(3) Limitation.--In exercising the authority granted 
        under paragraph (1), the Director may not establish, increase, 
        or decrease the amount of aggregate annual insurance premiums 
        to be collected for any fiscal year in excess of any amount 
        necessary--
                    ``(A) to maintain the reserve ratio required under 
                subsection (b); and
                    ``(B) to achieve such reserve ratio, if the actual 
                balance of such reserve is below the amount required 
                under subsection (b).
    ``(d) Phase-In Requirements.--The phase-in requirements under this 
subsection are as follows:
            ``(1) For fiscal year 2007, the reserve ratio shall be 
        equal to not less than 10 percent of the reserve ratio required 
        under subsection (b).
            ``(2) For fiscal year 2008, the reserve ratio shall be 
        equal to not less than 20 percent of the reserve ratio required 
        under subsection (b).
            ``(3) For fiscal year 2009, the reserve ratio shall be 
        equal to not less than 30 percent of the reserve ratio required 
        under subsection (b).
            ``(4) For fiscal year 2010, the reserve ratio shall be 
        equal to not less than 40 percent of the reserve ratio required 
        under subsection (b).
            ``(5) For fiscal year 2011, the reserve ratio shall be 
        equal to not less than 50 percent of the reserve ratio required 
        under subsection (b).
            ``(6) For fiscal year 2012, the reserve ratio shall be 
        equal to not less than 60 percent of the reserve ratio required 
        under subsection (b).
            ``(7) For fiscal year 2013, the reserve ratio shall be 
        equal to not less than 70 percent of the reserve ratio required 
        under subsection (b).
            ``(8) For fiscal year 2014, the reserve ratio shall be 
        equal to not less than 80 percent of the reserve ratio required 
        under subsection (b).
            ``(9) For fiscal year 2015, the reserve ratio shall be 
        equal to not less than 90 percent of the reserve ratio required 
        under subsection (b).
    ``(e) Limitation on Reserve Ratio.--In any given fiscal year, if 
the Director determines that attaining the reserve ratio required under 
subsection (b) would have serious negative consequences to the flood 
insurance program, the Director shall submit a report to Congress 
that--
            ``(1) describes and details the specific concerns of the 
        Director regarding such consequences;
            ``(2) demonstrates how such consequences would harm the 
        long-term financial soundness of the flood insurance program; 
        and
            ``(3) indicates the maximum attainable reserve ratio for 
        that particular fiscal year.''.

SEC. 15. REPAYMENT PLAN FOR BORROWING AUTHORITY.

    Section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4016) is amended by adding at the end the following:
    ``(c) Any funds borrowed by the Director under the authority 
established in subsection (a) shall include a schedule for repayment of 
such amounts which shall be transmitted to the--
            ``(1) Secretary of the Treasury;
            ``(2) Committee on Banking, Housing, and Urban Affairs of 
        the Senate; and
            ``(3) Committee on Financial Services of the House of 
        Representatives.
    ``(d) In addition to the requirement under subsection (c), in 
connection with any funds borrowed by the Director under the authority 
established in subsection (a), the Director, beginning 6 months after 
the date on which such borrowed funds are issued, and continuing every 
6 months thereafter until such borrowed funds are fully repaid, shall 
submit a report on the progress of such repayment to the--
            ``(1) Secretary of the Treasury;
            ``(2) Committee on Banking, Housing, and Urban Affairs of 
        the Senate; and
            ``(3) Committee on Financial Services of the House of 
        Representatives.''.

SEC. 16. TECHNICAL MAPPING ADVISORY COUNCIL.

    (a) Establishment.--There is established a council to be known as 
the Technical Mapping Advisory Council (in this section referred to as 
the ``Council'').
    (b) Membership.--
            (1) In general.--The Council shall consist of the Director, 
        or the designee thereof, and 11 additional members to be 
        appointed by the Director or the designee of the Director, who 
        shall be--
                    (A) the Under Secretary of Commerce for Oceans and 
                Atmosphere (or the designee thereof);
                    (B) a member of recognized surveying and mapping 
                professional associations and organizations;
                    (C) a member of recognized professional engineering 
                associations and organizations;
                    (D) a member of recognized professional 
                associations or organizations representing flood hazard 
                determination firms;
                    (E) a representative of the United States 
                Geological Survey;
                    (F) a representative of the Office of Management 
                and Budget;
                    (G) a representative of recognized professional 
                associations or organizations representing State 
                geographic information;
                    (H) a representative of State national flood 
                insurance coordination offices;
                    (I) a representative of the Corps of Engineers;
                    (J) the Secretary of the Interior (or the designee 
                thereof); and
                    (K) the Secretary of Agriculture (or the designee 
                thereof).
            (2) Qualifications.--Members of the Council shall be 
        appointed based on their demonstrated knowledge and competence 
        regarding surveying, cartography, remote sensing, geographic 
        information systems, or the technical aspects of preparing and 
        using flood insurance rate maps.
    (c) Duties.--The Council shall--
            (1) make recommendations to the Director on how to improve 
        in a cost-effective manner the accuracy, general quality, ease 
        of use, and distribution and dissemination of flood insurance 
        rate maps;
            (2) recommend to the Director mapping standards and 
        guidelines for flood insurance rate maps; and
            (3) submit an annual report to the Director that contains--
                    (A) a description of the activities of the Council;
                    (B) an evaluation of the status and performance of 
                flood insurance rate maps and mapping activities to 
                revise and update flood insurance rate maps, as 
                required under section 17;
                    (C) a summary of recommendations made by the 
                Council to the Director, including--
                            (i) performance metrics and milestones to 
                        effectively and efficiently map flood risk 
                        areas in the United States;
                            (ii) procedures for delegating mapping 
                        activities to State and local government 
                        mapping partners; and
                            (iii) establishing standards for data 
                        quality, data currency, and data eligibility; 
                        and
                    (D) recommendations for private contractors to 
                carry out the recommendations of the Council.
    (d) Chairperson.--The members of the Council shall elect 1 member 
to serve as the chairperson of the Council (in this section referred to 
as the ``Chairperson'').
    (e) Coordination.--To ensure that the Council's recommendations are 
consistent, to the maximum extent practicable, with national digital 
spatial data collection and management standards, the Chairperson shall 
consult with the Chairperson of the Federal Geographic Data Committee 
(established pursuant to OMB Circular A-16).
    (f) Compensation.--Members of the Council shall receive no 
additional compensation by reason of their service on the Council.
    (g) Meetings and Actions.--
            (1) In general.--The Council shall meet not less frequently 
        than twice each year at the request of the Chairperson or a 
        majority of its members, and may take action by a vote of the 
        majority of the members.
            (2) Initial meeting.--The Director, or a person designated 
        by the Director, shall request and coordinate the initial 
        meeting of the Council.
    (h) Officers.--The Chairperson may appoint officers to assist in 
carrying out the duties of the Council under subsection (c).
    (i) Staff of FEMA.--Upon the request of the Chairperson, the 
Director may detail, on a nonreimbursable basis, personnel of the 
Federal Emergency Management Agency to assist the Council in carrying 
out its duties.
    (j) Powers.--In carrying out this section, the Council may hold 
hearings, receive evidence and assistance, provide information, and 
conduct research, as it considers appropriate.
    (k) Termination.--The Council shall terminate 5 years after the 
date of enactment of this Act.

SEC. 17. NATIONAL FLOOD MAPPING PROGRAM.

    (a) Reviewing, Updating, and Maintaining Maps.--The Director, in 
coordination with the Technical Mapping Advisory Council established 
under section 16, shall establish a program under which the Director 
shall review, update, and maintain National Flood Insurance Program 
rate maps in accordance with this section.
    (b) Mapping.--
            (1) In general.--In carrying out the program established 
        under subsection (a), the Director shall--
                    (A) identify, review, update, maintain, and publish 
                National Flood Insurance Program rate maps with respect 
                to--
                            (i) all areas located within the 500-year 
                        floodplain that have not previously been 
                        identified, including coastal areas located in 
                        the United States;
                            (ii) areas of residual risk that have not 
                        previously been identified, including areas 
                        that are located behind levees, dams, and other 
                        man-made structures; and
                            (iii) areas that could be inundated as a 
                        result of the failure of a dam, as identified 
                        under the National Dam Safety Program Act (33 
                        U.S.C. 467 et seq.);
                    (B) establish or update flood-risk zone data in all 
                such areas, and make estimates with respect to the 
                rates of probable flood caused loss for the various 
                flood risk zones for each such area; and
                    (C) use, in identifying, reviewing, updating, 
                maintaining, or publishing any National Flood Insurance 
                Program rate map required under this section or under 
                the National Flood Insurance Act of 1968, the most 
                accurate topography and elevation data available.
            (2) Mapping elements.--Each map updated under this section 
        shall include the following:
                    (A) New ground elevation data.--
                            (i) In general.--New ground elevation data 
                        utilizing the newest technologies for the 
                        development of hydrologic and hydraulic 
                        modeling to support all flooding sources.
                            (ii) Definition.--As used in clause (i), 
                        the term ``new ground elevation data'' means 
                        data that meets the requirements of Appendix A, 
                        Guidance for Aerial Mapping and Surveying, of 
                        the Federal Emergency Management Agency's 
                        ``Guidelines and Specifications for Flood 
                        Hazard Mapping Partners'' as in effect on the 
                        date of enactment of this Act.
                    (B) Data on a watershed basis.--Delineation of 
                National Flood Insurance Program flood data on a 
                watershed basis--
                            (i) to provide the most technically 
                        effective and efficient studies and hydrologic 
                        and hydraulic modeling; and
                            (ii) to eliminate, to the maximum extent 
                        possible, discrepancies in base flood 
                        elevations between adjacent political 
                        subdivisions.
                    (C) Vertical positioning.--Vertical positioning of 
                the lowest floor and lowest adjacent grade coordinate 
                elevation data in the national inventory of structures.
            (3) Other inclusions.--In updating maps under this section, 
        the Director shall include--
                    (A) any relevant information on coastal inundation 
                from--
                            (i) an applicable inundation map of the 
                        Corps of Engineers; and
                            (ii) data of the National Oceanic and 
                        Atmospheric Administration relating to storm 
                        surge modeling;
                    (B) any relevant information of the United States 
                Geological Survey on stream flows, watershed 
                characteristics, and topography that is useful in the 
                identification of flood hazard areas, as determined by 
                the Director; and
                    (C) a description of any hazard that might impact 
                flooding, including, as determined by the Director--
                            (i) land subsidence and coastal erosion 
                        areas;
                            (ii) sediment flow areas;
                            (iii) mud flow areas;
                            (iv) ice jam areas; and
                            (v) areas on coasts and inland that are 
                        subject to the failure of structural protective 
                        works, such as levees, dams, and floodwalls.
    (c) Standards.--In updating and maintaining maps under this 
section, the Director shall--
            (1) establish standards to--
                    (A) ensure that maps are adequate for--
                            (i) flood risk determinations; and
                            (ii) use by State and local governments in 
                        managing development to reduce the risk of 
                        flooding; and
                    (B) facilitate identification and use of consistent 
                methods of data collection and analysis by the 
                Director, in conjunction with State and local 
                governments, in developing maps for communities with 
                similar flood risks, as determined by the Director; and
            (2) publish maps in a format that is--
                    (A) digital;
                    (B) geospatial data-compliant, as determined in 
                accordance with the standards for such compliance 
                established by the Open Geospatial Consortium; and
                    (C) compliant with the North American Vertical 
                Datum of 1988.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Director to carry out this section $400,000,000 for 
each of fiscal years 2007 through 2012.

SEC. 18. REMOVAL OF LIMITATION ON STATE CONTRIBUTIONS FOR UPDATING 
              FLOOD MAPS.

    Section 1360(f)(2) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4101(f)(2)) is amended by striking ``, but which may not exceed 
50 percent of the cost of carrying out the requested revision or 
update''.

SEC. 19. NONMANDATORY PARTICIPATION.

    (a) Nonmandatory Participation in National Flood Insurance Program 
for 500-Year Floodplain.--Any area located within the 500-year 
floodplain shall not be subject to the mandatory purchase requirements 
of sections 102 or 202 of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4012a, 4106).
    (b) Notice.--
            (1) By director.--In carrying out the National Flood 
        Insurance Program, the Director shall provide notice to any 
        community located in an area within the 500-year floodplain.
            (2) Timing of notice.--The notice required under paragraph 
        (1) shall be made not later than 6 months after the date of 
        completion of the initial mapping of the 500-year floodplain, 
        as required under section 17.
            (3) Lender required notice.--
                    (A) Regulated lending institutions.--Each Federal 
                or State entity for lending regulation (after 
                consultation and coordination with the Federal 
                Financial Institutions Examination Council) shall, by 
                regulation, require regulated lending institutions, as 
                a condition of making, increasing, extending, or 
                renewing any loan secured by property located in an 
                area within the 500-year floodplain, to notify the 
                purchaser or lessee (or obtain satisfactory assurances 
                that the seller or lessor has notified the purchaser or 
                lessee) and the servicer of the loan that such property 
                is located in an area within the 500-year floodplain, 
                in a manner that is consistent with and substantially 
                identical to the notice required under section 
                1364(a)(1) of the National Flood Insurance Act of 1968 
                (42 U.S.C. 4104a(a)(1)).
                    (B) Federal or state agency lenders.--Each Federal 
                or State agency lender shall, by regulation, require 
                notification in the same manner as provided under 
                subparagraph (A) with respect to any loan that is made 
                by a Federal or State agency lender and secured by 
                property located in an area within the 500-year 
                floodplain.
                    (C) Penalty for noncompliance.--Any regulated 
                lending institution or Federal or State agency lender 
                that fails to comply with the notice requirements 
                established by this paragraph shall be subject to the 
                penalties prescribed under section 102(f)(5) of the 
                Flood Disaster Protection Act of 1973 (42 U.S.C. 
                4012a(f)(5)).

SEC. 20. NOTICE OF FLOOD INSURANCE AVAILABILITY UNDER RESPA.

    Section 5(b) of the Real Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2604(b)) is amended--
            (1) in paragraph (4), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (5), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(6) an explanation of flood insurance and the 
        availability of flood insurance under the National Flood 
        Insurance Program, whether or not the real estate is located in 
        an area having special flood hazards.''.

SEC. 21. TESTING OF NEW FLOODPROOFING TECHNOLOGIES.

    (a) Permissible Testing.--A residential structure built for the 
purpose of testing a new flood proofing technology, as described in 
subsection (b), in any State or community that receives mitigation 
assistance under section 1366 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4104c) may not be construed to be in violation of any 
flood risk mitigation plan developed by that State or community and 
approved by the Director of the Federal Emergency Management Agency.
    (b) Conditions on Testing.--Testing permitted under subsection (a) 
shall--
            (1) be performed on an uninhabited residential structure;
            (2) require dismantling of the structure at the conclusion 
        of such testing; and
            (3) require that all costs associated with such testing and 
        dismantling be covered by the individual or entity conducting 
        the testing, or on whose behalf the testing is conducted.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to alter, limit, or extend the availability of flood 
insurance to any structure that may employ, utilize, or apply any 
technology tested under subsection (b).

SEC. 22. PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION PROGRAMS.

    Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 
4011 et seq.) is amended by inserting after section 1313 the following:

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

    ``(a) Requirement to Participate.--In the case of the occurrence of 
a major disaster, as defined in section 102 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122) that may 
have resulted in flood damage under the flood insurance program 
established under this chapter and other personal lines residential 
property insurance coverage offered by a State regulated insurer, upon 
request made by the insurance commissioner of a State (or such other 
official responsible for regulating the business of insurance in the 
State) for the participation of representatives of the Director in a 
program sponsored by such State for nonbinding mediation of insurance 
claims resulting from a major disaster, the Director shall cause 
representatives of the flood insurance program to participate in such a 
State program where claims under the flood insurance program are 
involved to expedite settlement of flood damage claims resulting from 
such disaster.
    ``(b) Extent of Participation.--In satisfying the requirements of 
subsection (a), the Director shall require that each representative of 
the Director--
            ``(1) be certified for purposes of the flood insurance 
        program to settle claims against such program resulting from 
        such disaster in amounts up to the limits of policies under 
        such program;
            ``(2) attend State-sponsored mediation meetings regarding 
        flood insurance claims resulting from such disaster at such 
        times and places as may be arranged by the State;
            ``(3) participate in good faith negotiations toward the 
        settlement of such claims with policyholders of coverage made 
        available under the flood insurance program; and
            ``(4) finalize the settlement of such claims on behalf of 
        the flood insurance program with such policyholders.
    ``(c) Coordination.--Representatives of the Director shall at all 
times coordinate their activities with insurance officials of the State 
and representatives of insurers for the purposes of consolidating and 
expediting settlement of claims under the national flood insurance 
program resulting from such disaster.
    ``(d) Qualifications of Mediators.--Each State mediator 
participating in State-sponsored mediation under this section shall 
be--
            ``(1)(A) a member in good standing of the State bar in the 
        State in which the mediation is to occur with at least 2 years 
        of practical experience; and
            ``(B) an active member of such bar for at least 1 year 
        prior to the year in which such mediator's participation is 
        sought; or
            ``(2) a retired trial judge from any United States 
        jurisdiction who was a member in good standing of the bar in 
        the State in which the judge presided for at least 5 years 
        prior to the year in which such mediator's participation is 
        sought.
    ``(e) Mediation Proceedings and Documents Privileged.--As a 
condition of participation, all statements made and documents produced 
pursuant to State-sponsored mediation involving representatives of the 
Director shall be deemed privileged and confidential settlement 
negotiations made in anticipation of litigation.
    ``(f) Liability, Rights, or Obligations Not Affected.--
Participation in State-sponsored mediation, as described in this 
section does not--
            ``(1) affect or expand the liability of any party in 
        contract or in tort; or
            ``(2) affect the rights or obligations of the parties, as 
        established--
                    ``(A) in any regulation issued by the Director, 
                including any regulation relating to a Standard Flood 
                Insurance Policy;
                    ``(B) under this Act; and
                    ``(C) under any other provision of Federal law.
    ``(g) Exclusive Federal Jurisdiction.--Participation in State-
sponsored mediation shall not alter, change, or modify the original 
exclusive jurisdiction of United States courts, as set forth in this 
Act.
    ``(h) Cost Limitation.--Nothing in this section shall be construed 
to require the Director or a representative of the Director to pay 
additional mediation fees relating to flood insurance claims associated 
with a State-sponsored mediation program in which such representative 
of the Director participates.
    ``(i) Exception.--In the case of the occurrence of a major disaster 
that results in flood damage claims under the national flood insurance 
program and that does not result in any loss covered by a personal 
lines residential property insurance policy--
            ``(1) this section shall not apply; and
            ``(2) the provisions of the Standard Flood Insurance Policy 
        under the national flood insurance program and the appeals 
        process established under section 205 of the Bunning-Bereuter-
        Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
        note) and the regulations issued pursuant to such section shall 
        apply exclusively.
    ``(j) Representatives of the Director.--For purposes of this 
section, the term `representatives of the Director' means 
representatives of the national flood insurance program who participate 
in the appeals process established under section 205 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
note).''.

SEC. 23. REITERATION OF FEMA RESPONSIBILITIES UNDER THE 2004 REFORM 
              ACT.

    (a) Appeals Process.--As required in section 205 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
note), the Director shall 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.
    (b) Minimum Training and Education Requirements.--The Director 
shall continue to work with the insurance industry, State insurance 
regulators, and other interested parties to implement the minimum 
training and education standards for all insurance agents who sell 
flood insurance policies, as such standards were determined by the 
Director in the notice published in the Federal Register on September 
1, 2005 (70 Fed. Reg. 52117) pursuant to section 207 of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 
note).
    (c) Implementation Reports.--
            (1) Overall implementation of reform act of 2004.--Not 
        later than 3 months after the date of the enactment of this 
        Act, the Director shall submit a report to the Congress--
                    (A) describing the implementation of each provision 
                of the Bunning-Bereuter-Blumenauer Flood Insurance 
                Reform Act of 2004 (Public Law 108-264; 118 Stat. 712); 
                and
                    (B) identifying each regulation, order, notice, and 
                other material issued by the Director in implementing 
                each provision of that Act.
            (2) Implementation of appeals process.--
                    (A) In general.--Not later than 30 days after the 
                date of enactment of this Act, and every 30 days 
                thereafter until final establishment of the appeals 
                process required under section 205 of the Bunning-
                Bereuter-Blumenauer Flood Insurance Reform Act of 2004 
                (42 U.S.C. 4011 note), the Director shall submit a 
                report to the Congress describing the implementation of 
                such appeals process.
                    (B) Content of report.--Each report required under 
                subparagraph (A) shall include--
                            (i) dates and descriptions of actions taken 
                        by the Director to establish the appeals 
                        process;
                            (ii) dates and descriptions of all 
                        communications to the Congress by the Director 
                        concerning the establishment of such process;
                            (iii) explanations of any statutory or 
                        implied deadlines that have not been met; and
                            (iv) an estimate of when any regulation, 
                        order, notice, or other material will be issued 
                        by the Director in establishing such process.

SEC. 24. STUDIES, AUDITS, AND REPORTS.

    (a) GAO Study on Write Your Own Policies.--Not later than 1 year 
after the date of enactment of this Act, the Comptroller General of the 
United States shall conduct a study and submit a report to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives that 
examines--
            (1) the current fees and expenses paid from premium income 
        earned under the National Flood Insurance Program to cover the 
        cost of selling, servicing, and processing of claims in 
        connection with National Flood Insurance Program policies, as 
        well as floodplain management and mitigation activities, by--
                    (A) companies that are authorized by the Director 
                to provide Write Your Own policies;
                    (B) National Flood Insurance Program contractors; 
                and
                    (C) the Federal Emergency Management Agency;
            (2) in detail--
                    (A) each of the 5 other lines of insurance the 
                National Flood Insurance Program currently uses to 
                evaluate the amount of reimbursement paid to authorized 
                providers of Write Your Own policies; and
                    (B) the expenses incurred by such providers in 
                administering the National Flood Insurance Program on 
                behalf of the Federal Government;
            (3) the cost difference for authorized providers of Write 
        Your Own policies between--
                    (A) flood insurance policies at origination and 
                flood insurance policies up for renewal; and
                    (B) flood insurance policies written for 
                policyholders who are required to purchase flood 
                insurance and flood insurance policies written for 
                those policyholders who are not required to purchase 
                flood insurance;
            (4) the similarities and differences in the expenses 
        incurred in administering the National Flood Insurance Program 
        and those incurred in administering other lines of Federal, 
        State, and private company insurance;
            (5) in detail what actions the Director is taking to ensure 
        that authorized providers of Write Your Own policies are only 
        being reimbursed for their expenses in providing such policies;
            (6) in detail the additional benefits authorized providers 
        of Write Your Own policies receive by not underwriting flood 
        risk, including the ability to market and sell other lines of 
        insurance; and
            (7) the feasibility of using a competitive bidding process, 
        or other alternative, to select 1 or more private insurance 
        companies to sell and service National Flood Insurance Program 
        policies and process claims for fees agreed upon by contract 
        with the Director.
    (b) GAO Audit.--Not later than 1 year after the date of enactment 
of this Act, the Comptroller General of the United States shall audit 
the financial transactions of the National Flood Insurance Program 
relating to the consequences of Hurricane Katrina and other hurricanes 
of the 2005 season, including any transactions--
            (1) for making any payments required under section 1334 of 
        the National Flood Insurance Act of 1968 (42 U.S.C. 4054);
            (2) to pay reinsurance claims under the excess loss 
        reinsurance coverage provided under section 1335 of that Act 
        (42 U.S.C. 4055);
            (3) to repay to the Secretary of the Treasury such sums as 
        may have been borrowed from the Secretary in accordance with 
        the authority provided in section 1309 of that Act (42 U.S.C. 
        4016);
            (4) to the extent approved in appropriations Acts, to pay 
        any administrative expenses of the National Flood Insurance 
        Program;
            (5) for the purposes specified in section 1310(d) of that 
        Act (42 U.S.C. 4017(d)) under the conditions provided in such 
        section;
            (6) for carrying out the program under section 1315(b) of 
        that Act (42 U.S.C. 4022(b));
            (7) for transfers to the National Flood Mitigation Fund, 
        but only to the extent provided in section 1367(b)(1) of that 
        Act (42 U.S.C. 4104d(b)(1));
            (8) for financial assistance under section 1361A of that 
        Act (42 U.S.C. 4102a) to a State or community for taking 
        actions under such section with respect to severe repetitive 
        loss properties, but only to the extent provided in section 
        1361A(i) of that Act; and
            (9) that resulted in amounts being credited to the National 
        Flood Insurance Program, including amounts--
                    (A) borrowed in accordance with the authority 
                provided in section 1309 of that Act (42 U.S.C. 4016);
                    (B) collected in connection with the excess loss 
                reinsurance coverage provided under section 1335 of 
                that Act (42 U.S.C. 4055);
                    (C) advanced to the National Flood Insurance 
                Program from appropriations in order to maintain the 
                National Flood Insurance Fund established in section 
                1310 of that Act (42 U.S.C. 4017) in an operative 
                condition adequate to meet the liabilities of the 
                Program;
                    (D) earned on investments;
                    (E) required to be paid to the Director under 
                section 1308(d) of that Act (42 U.S.C. 4015(d)); and
                    (F) received from any other operation or activity 
                performed under that Act.
    (c) Report on Expanding the National Flood Insurance Program.--Not 
later than 1 year after the date of the enactment of this Act, the 
Comptroller General of the United States shall conduct a study and 
submit a report to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of 
Representatives, on--
            (1) the number of flood insurance policy holders currently 
        insuring--
                    (A) a residential structure up to the maximum 
                available coverage amount, as established in section 
                61.6 of title 44, Code of Federal Regulations, of--
                            (i) $250,000 for the structure; and
                            (ii) $100,000 for the contents of such 
                        structure; or
                    (B) a commercial structure up to the maximum 
                available coverage amount, as established in section 
                61.6 of title 44, Code of Federal Regulations, of 
                $500,000;
            (2) the increased losses the National Flood Insurance 
        Program would have sustained during the 2004 and 2005 hurricane 
        season if the National Flood Insurance Program had insured all 
        policyholders up to the maximum conforming loan limit for 
        fiscal year 2006 of $417,000, as established under section 
        302(b)(2) of the Federal National Mortgage Association Charter 
        Act (12 U.S.C. 1717(b)(2));
            (3) the availability in the private marketplace of flood 
        insurance coverage in amounts that exceed the current limits of 
        coverage amounts established in section 61.6 of title 44, Code 
        of Federal Regulations; and
            (4) what effect, if any--
                    (A) raising the current limits of coverage amounts 
                established in section 61.6 of title 44, Code of 
                Federal Regulations, would have on the ability of 
                private insurers to continue providing flood insurance 
                coverage; and
                    (B) reducing the current limits of coverage amounts 
                established in section 61.6 of title 44, Code of 
                Federal Regulations, would have on the ability of 
                private insurers to provide sufficient flood insurance 
                coverage to effectively replace the current level of 
                flood insurance coverage being provided under the 
                National Flood Insurance Program.
    (d) Report of the Director on Activities Under the National Flood 
Insurance Program.--
            (1) In general.--The Director shall, on an annual basis, 
        submit a full report on the operations, activities, budget, 
        receipts, and expenditures of the National Flood Insurance 
        Program for the preceding 12-month period to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of 
        Representatives.
            (2) Timing.--Each report required under paragraph (1) shall 
        be submitted to the committees described in paragraph (1) not 
        later than 3 months following the end of each fiscal year.
            (3) Contents.--Each report required under paragraph (1) 
        shall include--
                    (A) the current financial condition and income 
                statement of the National Flood Insurance Fund 
                established under section 1310 of the National Flood 
                Insurance Act of 1968 (42 U.S.C. 4017), including--
                            (i) premiums paid into such Fund;
                            (ii) policy claims against such Fund; and
                            (iii) expenses in administering such Fund;
                    (B) the number and face value of all policies 
                issued under the National Flood Insurance Program that 
                are in force;
                    (C) a description and summary of the losses 
                attributable to repetitive loss structures;
                    (D) a description and summary of all losses 
                incurred by the National Flood Insurance Program due 
                to--
                            (i) hurricane related damage; and
                            (ii) nonhurricane related damage;
                    (E) the amounts made available by the Director for 
                mitigation assistance under section 1366(e)(5) of the 
                National Flood Insurance Act of 1968 (42 U.S.C. 
                4104c(e)(5)) for the purchase of properties 
                substantially damaged by flood for that fiscal year, 
                and the actual number of flood damaged properties 
                purchased and the total cost expended to purchase such 
                properties;
                    (F) the estimate of the Director as to the average 
                historical loss year, and the basis for that estimate;
                    (G) the estimate of the Director as to the maximum 
                amount of claims that the National Flood Insurance 
                Program would have to expend in the event of a 
                catastrophic year;
                    (H) the average--
                            (i) amount of insurance carried per flood 
                        insurance policy;
                            (ii) premium per flood insurance policy; 
                        and
                            (iii) loss per flood insurance policy; and
                    (I) the number of claims involving damages in 
                excess of the maximum amount of flood insurance 
                available under the National Flood Insurance Program 
                and the sum of the amount of all damages in excess of 
                such amount.
    (e) GAO Analysis and Evaluation of the National Flood Insurance 
Program.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall submit a report evaluating the purposes of the 
        National Flood Insurance Program to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives.
            (2) Contents.--The report required under paragraph (1) 
        shall include--
                    (A) an analysis of whether the National Flood 
                Insurance Program has fulfilled its purpose, as set 
                forth in section 1302 of the National Flood Insurance 
                Act of 1968 (42 U.S.C. 4001);
                    (B) an examination of whether the National Flood 
                Insurance Program has unduly burdened or benefitted 
                taxpayers; and
                    (C) any recommendations for legislative or 
                administrative action that the Comptroller General 
                determines are necessary to ensure that the National 
                Flood Insurance Program operates in a more effective 
                and efficient manner, including whether the National 
                Flood Insurance Program should be reorganized into 
                another Federal agency.
    (f) GAO Study.--Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall conduct a study and submit a report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives, on the--
            (1) composition of the remaining pre-FIRM structures that 
        are explicitly receiving discounted premium rates under section 
        1307 of the National Flood Insurance Act of 1968 (42 U.S.C. 
        4104), including the historical basis for the receipt of such 
        subsidy and whether such subsidy has outlasted its purpose;
            (2) number and fair market value of such structures;
            (3) respective income level of each owner of such 
        structure;
            (4) number of times each such structure has been sold since 
        1968, including specific dates, sales price, and any other 
        information the Secretary determines appropriate;
            (5) total losses incurred by such structures since the 
        establishment of the National Flood Insurance Program compared 
        to the total losses incurred by all structures that are charged 
        a nondiscounted premium rate;
            (6) total cost of foregone premiums since the establishment 
        of the National Flood Insurance Program, as a result of the 
        subsidies provided to such structures;
            (7) annual cost to the taxpayer, as a result of the 
        subsidies provided to such structures;
            (8) the premium income collected and the losses incurred by 
        the National Flood Insurance Program as a result of such 
        explicitly subsidized structures compared to the premium income 
        collected and the losses incurred by such Program as result of 
        structures that are charged a nondiscounted premium rate, on a 
        State-by-State basis; and
            (9) the most efficient way to eliminate the subsidy to such 
        structures.
    (g) GAO Study on Direct Purchase in Nonparticipating Communities.--
Not later than 1 year after the date of enactment of this Act, the 
Comptroller General of the United States shall conduct a study and 
submit a report to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of 
Representatives, on the feasibility of allowing individuals, residing 
in communities not currently participating in the National Flood 
Insurance Program, to purchase flood insurance from the National Flood 
Insurance Program on an actuarially sound basis.
                                                       Calendar No. 498

109th CONGRESS

  2d Session

                                S. 3589

                          [Report No. 109-271]

_______________________________________________________________________

                                 A BILL

   To amend the National Flood Insurance Act of 1968, to restore the 
financial solvency of the flood insurance fund, and for other purposes.

_______________________________________________________________________

                             June 28, 2006

                 Read twice and placed on the calendar`