I 

108TH CONGRESS 

1ST SESSION H. R. 670

To amend the National Flood Insurance Act of 1968 to provide for identification, mitigation, and purchase of properties insured under the national 

flood insurance program that suffer repetitive losses. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 11, 2003

Mr. BAKER introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL

To amend the National Flood Insurance Act of 1968 to 

provide for identification, mitigation, and purchase of 

properties insured under the national flood insurance 

program that suffer repetitive losses.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

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

5 Act of 2003’’. 
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1 SEC. 2. MITIGATION FOR AND PURCHASE OF CERTAIN RE2 PETITIVE LOSS STRUCTURES. 

3 The National Flood Insurance Act of 1968 is amend4 ed by inserting after section 1361 (42 U.S.C. 4102) the 

5 following new section: 

6 ‘‘MITIGATION FOR AND PURCHASE OF CERTAIN

7 REPETITIVE LOSS STRUCTURES

8 ‘‘SEC. 1362. (a) AUTHORITY.—To the extent 

9 amounts are made available for use under this section, the 

10 Director may, subject to the limitations of this section—

11 ‘‘(1) carry out mitigation activities that reduce 

12 flood damages to qualified repetitive loss structures 

13 (as such term is defined in subsection (e)); and 

14 ‘‘(2) purchase qualified repetitive loss struc15 tures, but only for public or open space use that is 

16 consistent with sound land management and use 

17 policies. 

18 ‘‘(b) LIMITATIONS.—The Director shall establish lim19 itations on the use of amounts made available under this 

20 section for mitigation and purchase of structures, which 

21 shall—

22 ‘‘(1) be designed to encourage owners of struc23 tures to maintain participation in the national flood 

24 insurance program; and 
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1 ‘‘(2) include limitations that prohibit use of 

2 such amounts for mitigation or purchase of any 

3 qualified repetitive loss structure if—

4 ‘‘(A) as a result of such action, the owner 

5 of the structure will not be able to purchase a 

6 replacement residence; 

7 ‘‘(B) any of the flooding that resulted in 

8 designation of the structure as a qualified re9 petitive loss structure was a result (in whole or 

10 in part) of third party development; 

11 ‘‘(C) such action will interfere with, im12 pair, or disrupt the preservation or maintenance 

13 of historically or architecturally significant 

14 properties or areas or identifiable neighbor15 hoods or areas of cultural cohesiveness; 

16 ‘‘(D) in purchasing the structure, the 

17 owner relied upon flood insurance rate maps of 

18 the Federal Emergency Management Agency 

19 that were current at the time and did not indi20 cate that the property was located in an area 

21 having special flood hazards; or 

22 ‘‘(E) the Director otherwise determines, in 

23 the discretion of the Director, that amounts 

24 under this section should not be used for miti25 gation or purchase of such structure. 
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1 ‘‘(c) PRIORITY FOR WORST-CASE PROPERTIES.—In 

2 determining the properties for which to take action under 

3 this section, the Director shall give priority to qualified 

4 repetitive loss structures on the basis of the amount of 

5 losses to the National Flood Insurance Fund that such 

6 structures have caused or will cause. 

7 ‘‘(d) BORROWING.—

8 ‘‘(1) ISSUANCE OF OBLIGATIONS.—Subject to 

9 the provisions of this subsection, the Director may 

10 issue and sell such notes or other obligations to the 

11 Secretary of the Treasury as the Director deter12 mines are necessary to provide funds to carry out 

13 this section. 

14 ‘‘(2) TERMS AND CONDITIONS.—Obligations 

15 under this subsection shall be issued in the forms 

16 and denominations, bearing the maturities, and sub17 ject to the terms and conditions that the Secretary 

18 of the Treasury may prescribe. 

19 ‘‘(3) NOTIFICATION TO CONGRESS.—At least 25 

20 days before the issuance or sale of a note or other 

21 obligation under paragraph (1), the Director shall 

22 notify, in writing, the Senate and the House of Rep23 resentatives of the intention of such issuance or sale 

24 and the dollar amount of such notes or obligations. 
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1 ‘‘(4) PURCHASE OF OBLIGATIONS.—The Sec2 retary of the Treasury shall purchase any obligations 

3 issued under this subsection. For such purpose, the 

4 Secretary of the Treasury may use as a public debt 

5 transaction the proceeds from the sale of any securi6 ties issued under chapter 31 of title 31. The pur7 poses for which securities may be issued under such 

8 chapter are extended to include any purchase of obli9 gations issued under this subsection. 

10 ‘‘(5) LIMITATION ON AMOUNT.—The Secretary 

11 of the Treasury may not at any time purchase any 

12 obligations under this subsection if the purchase 

13 would increase the aggregate principal amount of 

14 the outstanding holdings of obligations under this 

15 subsection by the Secretary to an amount greater 

16 than $300,000,000. 

17 ‘‘(6) RESALE AUTHORITY.—The Secretary of 

18 the Treasury may sell any obligations issued under 

19 this subsection at the times and prices and upon the 

20 terms and conditions that the Secretary of the 

21 Treasury shall determine. 

22 ‘‘(7) TREATMENT.—All purchases, redemptions, 

23 and sales of obligations under this subsection by the 

24 Secretary of the Treasury shall be treated as public 

25 debt transactions of the United States.
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1 ‘‘(e) QUALIFIED REPETITIVE LOSS STRUCTURE.—

2 For purposes of this section (and sections 1310(g) and 

3 1316(b)), the term ‘qualified repetitive loss structure’ 

4 means a structure that has incurred such flood-related 

5 damage as the Director shall, by regulation, provide in ac6 cordance with the purposes of such sections. 

7 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

8 is authorized to be appropriated for costs of activities 

9 under this section $100,000,000 for fiscal year 2004, 

10 $75,000,000 for fiscal year 2005, $50,000,000 for fiscal 

11 year 2006, and $25,000,000 for fiscal year 2007.’’. 

12 SEC. 3. TREATMENT OF SAVINGS. 

13 Section 1310 of the National Flood Insurance Act of 

14 1968 (42 U.S.C. 4017) is amended—

15 (1) in subsection (a)—

16 (A) in paragraph (7), by striking ‘‘and’’ at 

17 the end; 

18 (B) in paragraph (8), by striking the pe19 riod at the end and inserting ‘‘; and’’; and 

20 (C) by adding at the end the following new 

21 paragraph: 

22 ‘‘(9) for use under subsection (g) of this sec23 tion.’’; and 

24 (2) by adding at the end the following new sub25 section: 
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1 ‘‘(g) USE OF MITIGATION SAVINGS.—

2 ‘‘(1) DETERMINATION.—For each fiscal year, 

3 the Director shall make a determination of the por4 tion of the amounts in the fund that are attributable 

5 to savings from mitigation activities and purchases 

6 under section 1362 of qualified repetitive loss struc7 tures (as such term is defined in subsection (e) of 

8 such section). 

9 ‘‘(2) USE FOR MITIGATION.—In each fiscal 

10 year, an amount in the fund equal to the amount de11 termined under paragraph (1) of this subsection 

12 shall be available (in accordance with subsection (f)) 

13 only for mitigation activities for, and purchase of, 

14 qualified repetitive loss structures under section 

15 1362, except as provided in paragraph (3). 

16 ‘‘(3) USE FOR MAPPING.—After a determina17 tion by the Director that 75 percent of the number 

18 of qualified repetitive loss structures that existed 

19 upon the enactment of the Flood Loss Mitigation 

20 Act of 2003 have been provided mitigation that suf21 ficiently reduces the risk of losses from flooding, or 

22 have been purchased for public or open space use 

23 that is consistent with sound land management and 

24 use policies, the Director may use up to 75 percent 

25 of the amount reserved in each fiscal year under 
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1 paragraph (2) of this subsection for costs of map2 ping activities under section 1360.’’. 

3 SEC. 4. INELIGIBILITY FOR NATIONAL FLOOD INSURANCE 

4 PROGRAM. 

5 Section 1316 of the National Flood Insurance Act of 

6 1968 (42 U.S.C. 4023) is amended—

7 (1) by striking the section heading and insert8 ing the following: 

9 ‘‘PROHIBITION OF COVERAGE FOR CERTAIN

10 PROPERTIES’’; 

11 (2) by inserting ‘‘(a) PROPERTIES IN VIOLA12 TION OF STATE OR LOCAL LAW.—’’ after ‘‘1316.’’; 

13 and 

14 (3) by adding at the end the following new sub15 sections: 

16 ‘‘(b) QUALIFIED REPETITIVE LOSS STRUCTURES.—

17 In the case of a qualified repetitive loss structure (as such 

18 term is defined in section 1362(e)) that was the subject 

19 of an offer to purchase or to provide mitigation activities 

20 funded under section 1362 that was refused by the owner 

21 of the property, the Director may—

22 ‘‘(1) deny the provision of any new flood insur23 ance coverage under this title for such property and 

24 may cancel any existing coverage for such property; 

25 or 
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1 ‘‘(2) notwithstanding section 1308(e) or any 

2 other provision of this title, increase the chargeable 

3 risk premium rate for any new flood insurance cov4 erage under this title for such property to an 

5 amount that is not more than the applicable esti6 mated risk premium rate for the property under sec7 tion 1307(a)(1). 

8 ‘‘(c) PROPERTIES FOR WHICH FRAUDULENT CLAIMS

9 HAVE BEEN MADE.—The Director may deny the provi10 sion of any new flood insurance coverage under this title, 

11 and may cancel any existing coverage, for a property if 

12 the Director determines that the owner of the property 

13 has made fraudulent claims for losses to the property 

14 under coverage provided under this title. 

15 ‘‘(d) APPEALS.—Any owner of a property who is ag16 grieved by a determination of the Director under sub17 section (b) or (c) may appeal such determination by filing, 

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

19 after receiving notice of such determination. Upon receiv20 ing the request, the Director shall select, from a list of 

21 independent third parties compiled by the Director for 

22 such purpose, a party to hear such appeal. The determina23 tion made on appeal by such third party shall be consid-
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1 ered a final determination of the Director for purposes of 

2 review under chapter 7 of title 5, United States Code.’’.

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