I 
109TH CONGRESS 
2D SESSION 
H. R. 4973 
To restore the financial solvency of the national flood insurance program, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 16, 2006 
Mr. BAKER (for himself and Mr. FRANK of Massachusetts) introduced the 
following bill; which was referred to the Committee on Financial Services 
A BILL 
To restore the financial solvency of the national flood 
insurance program, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND 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 and table of contents 
Sec. 2. Findings and purposes 
Sec. 3. Study regarding status of pre-FIRM properties and mandatory pur-
chase requirement for natural 100-year floodplain and non- 
Federally related loans 
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Sec. 4. Phase-in of actuarial rates for nonresidential properties and non-pri-
mary residences 
Sec. 5. Reduction of waiting period for effective date of policies 
Sec. 6. Enforcement 
Sec. 7. Maximum coverage limits 
Sec. 8. Coverage for additional living expenses, basement improvements, busi-
ness interruption, and replacement cost of contents 
Sec. 9. Increase in annual limitation on premium increases 
Sec. 10. Increase in borrowing authority 
Sec. 11. FEMA participation in State disaster claims mediation programs 
Sec. 12. FEMA reports on financial status of insurance program 
Sec. 13. Extension of pilot program for mitigation of severe repetitive loss prop-
erties 
Sec. 14. Notice of availability of flood insurance and escrow in RESPA good 
faith estimate 
Sec. 15. Reiteration of FEMA responsibilities under 2004 Reform Act 
Sec. 16. Updating of flood maps and elevation standards 
Sec. 17. National levee inventory 
Sec. 18. Clarification of replacement cost provisions, forms, and policy language 
Sec. 19. Authorization of additional FEMA staff 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
(1) flooding has been shown to occur in all 50 
States; 
(2) the aggregate amount of the flood insurance 
claims resulting from Hurricane Katrina, Hurricane 
Rita, and other recent events has exceeded the ag-
gregate amount of all claims previously paid in the 
history of the national flood insurance program, re-
quiring a significant increase in the program’s bor-
rowing authority; 
(3) flood insurance policyholders have a legiti-
mate expectation that they will receive fair and time-
ly compensation for losses covered under their poli-
cies; 
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(4) substantial flooding has occurred, and will 
likely occur again, outside the areas designated by 
the Federal Emergency Management Agency as 
flood hazard areas; 
(5) properties located in low- to moderate-risk 
areas are eligible to purchase flood insurance policies 
with premiums as low as $112 a year; 
(6) about 450,000 vacation homes, second 
homes, and commercial properties are subsidized 
and are not paying actuarially sound rates for flood 
insurance; 
(7) phasing out subsidies currently extended to 
vacation homes, second homes, and commercial 
properties would result in estimated average savings 
to the taxpayers of the United States and the na-
tional flood insurance program of $335,000,000 
each year; 
(8) the maximum coverage limits for flood in-
surance policies should be increased to reflect infla-
tion and the increased cost of housing; 
(9) significant reforms to the national flood in-
surance program required in the Bunning-Bereuter- 
Blumenauer Flood Insurance Reform Act of 2004 
have yet to be implemented; and 
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(10) in addition to reforms required in the 
Bunning-Bereuter-Blumenauer Flood Insurance Re-
form Act of 2004, the national flood insurance pro-
gram requires a modernized and updated adminis-
trative model to ensure that the program is solvent 
and the people of the United States have continued 
access to flood insurance. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to protect the integrity of the national flood 
insurance program by fully funding existing legal ob-
ligations expected by existing policyholders who have 
paid policy premiums in return for flood insurance 
coverage; 
(2) to increase incentives for homeowners and 
communities to participate in the national flood in-
surance program and to improve oversight to ensure 
full participation in the program for owners of prop-
erties for which such participation is mandatory; and 
(3) to increase awareness of homeowners of 
flood risks and improve the quality of information 
regarding such risks provided to homeowners. 
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SEC. 3. STUDY REGARDING STATUS OF PRE-FIRM PROP-
ERTIES AND MANDATORY PURCHASE RE-
QUIREMENT FOR NATURAL 100-YEAR FLOOD-
PLAIN 
AND 
NON-FEDERALLY 
RELATED 
LOANS. 
(a) IN GENERAL.—The Comptroller General shall 
conduct a study as follows: 
(1) PRE-FIRM
PROPERTIES.—The study shall 
determine the status of the the national flood insur-
ance program, as of the date of the enactment of 
this Act, with respect to the provision of flood insur-
ance coverage for pre-FIRM properties (as such 
term is defined in section 578(b) of the National 
Flood Insurance Reform Act of 1994 (42 U.S.C. 
4014 note)), which shall include determinations of— 
(A) the number of pre-FIRM properties 
for which coverage is provided and the extent of 
such coverage; 
(B) the cost of providing coverage for such 
pre-FIRM properties to the national flood in-
surance program; 
(C) the anticipated rate at which such pre- 
FIRM properties will cease to be covered under 
the program; and 
(D) the effects that implementation of the 
Bunning-Bereuter-Blumenauer Flood Insurance 
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