‘‘(2) TOTAL
AMOUNT.—The total amount of
penalties assessed under this subsection against a
single regulated lending institution for any calendar
year may not exceed $100,000.
‘‘(3) SALES OR TRANSFERS.—The subsequent
sale or other transfer of a loan by a regulated lend-
ing institution that has committed a violation of this
section shall not affect the liability of the transfer-
ring institution with respect to any penalty under
this subsection. An institution shall not be liable for
a violation relating to a loan committed by another
institution that previously held the loan.
‘‘(4) 3-YEAR LIMIT.—No penalty may be im-
posed under this subsection after the expiration of
the 3-year period beginning on the date of the occur-
rence of the violation.
‘‘(g) ADDITIONAL ACTIONS.—If a Federal entity for
lending regulation determines—
‘‘(1) that a regulated lending institution has
demonstrated a pattern and practice of noncompli-
ance in violation of the regulations issued pursuant
to subsection (b) or subsection (d) or the notice re-
quirements under section 1364 of the National
Flood Insurance Act of 1968, and
‘‘(2) that the regulated lending institution has
not demonstrated measurable improvement in com-
pliance despite the issuance of penalties under sub-
section (f),
the agency may require the regulated lending institution
to take such remedial actions as are necessary to ensure
that the regulated lending institution is in satisfactory
compliance with the requirements of the National Flood
Insurance Program.’’.
SEC. 208. FEDERAL FINANCIAL INSTITUTIONS EXAMINA-
TION COUNCIL.
Section 1006 of the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3305) is
amended by adding at the end the following new sub-
section:
‘‘(g) FLOOD INSURANCE.—The Council shall consult
with and assist the Federal entities for lending regulation,
as such term is defined in section 1370(a)(7) of the Na-
tional Flood Insurance Act of 1968, in developing and co-
ordinating uniform standards and requirements for use by
regulated lending institutions under the National Flood
Insurance Program.’’.
SEC. 209. CONFORMING AMENDMENT.
The section heading for section 102 of the Flood Dis-
aster Protection Act of 1973 (42 U.S.C. 4012a) is amend-
ed to read as follows:
‘‘SEC. 102. FLOOD INSURANCE PURCHASE AND COMPLI-
ANCE 
REQUIREMENTS 
AND 
ESCROW 
AC-
COUNTS.’’.
TITLE III—RATINGS AND INCEN-
TIVES 
FOR 
COMMUNITY
FLOODPLAIN 
MANAGEMENT
PROGRAMS
SEC. 301. COMMUNITY RATING SYSTEM AND INCENTIVES
FOR 
COMMUNITY 
FLOODPLAIN 
MANAGE-
MENT.
(a) REQUIREMENT FOR PARTICIPATION IN FLOOD
INSURANCE PROGRAM.—Section 1315 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4022) is amend-
ed—
(1) by striking ‘‘after December 31, 1971’’ and
inserting the following:
‘‘(a) REQUIREMENT FOR PARTICIPATION IN FLOOD
INSURANCE PROGRAM.—After December 31, 1971’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) COMMUNITY RATING SYSTEM AND INCENTIVES
FOR COMMUNITY FLOODPLAIN MANAGEMENT.—
‘‘(1) AUTHORITY
AND
GOALS.—The Director
shall carry out a community rating system program
(hereafter in this subsection referred to as the ‘pro-
gram’) which shall—
‘‘(A) evaluate the measures adopted by
communities voluntarily participating in the
community rating system;
‘‘(B) provide incentives for measures to re-
duce the risk of flood damage that exceed the
criteria set forth in section 1361;
‘‘(C) encourage adoption of more effective
measures for floodplain and erosion manage-
ment; and
‘‘(D) to promote the reduction of Federal
flood insurance losses.
‘‘(2) INCENTIVES.—The program shall provide
incentives in the form of credits on premium rates
for flood insurance coverage in communities that the
Director determines have adopted and enforced
measures to reduce the risk of flood damage that ex-
ceed the criteria set forth in section 1361. In provid-
ing incentives under this paragraph, the Director
may provide for credits to flood insurance premium
rates in communities that the Director determines
have—
‘‘(A) implemented measures to enhance
floodplain management; and
‘‘(B) adopted erosion control measures.
‘‘(3) CREDITS.—The credits on premium rates
for flood insurance coverage shall be based on the
estimated reduction in flood damage risks resulting
from the measures adopted by the community under
this program, minus any funds received for mitiga-
tion assistance under section 1366. The Director
may also reduce such credits to recover the cost to
the Federal Government of expenditures for flood or
disaster relief to property owners who did not main-
tain flood insurance on structures in areas having
special flood hazards.’’.
(b) REPORTS.—Two years after the date of enact-
ment of this Act and biannually thereafter, the Director
shall submit a report to the Congress regarding the pro-
gram under section 1315(a) of the National Flood Insur-
ance Act of 1968. Each report shall include an analysis
of the cost-effectiveness and other accomplishments and
shortcomings of the program and any recommendations
of the Director for legislation regarding the program.
SEC. 302. COMMUNITY EROSION HAZARD MANAGEMENT
PROGRAM.
Section 1315 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4022), as amended by section 301,
is amended by adding at the end the following new sub-
section:
‘‘(c) COMMUNITY EROSION HAZARD MANAGEMENT
PROGRAM.—
‘‘(1) AUTHORITY
AND
GOALS.—The Director
shall carry out a community erosion hazard manage-
ment program (hereafter in this subsection referred
to as the ‘‘program’’) which shall—
‘‘(A) assist communities having erosion
hazards to understand the nature and extent of
the erosion hazards and to develop a program
to manage erosion hazards;
‘‘(B) provide incentives for communities to
voluntarily undertake measures to reduce the
risk of erosion-related flood damage; and
‘‘(C) promote the reduction of Federal
flood insurance losses related to erosion haz-
ards.
‘‘(2) DEVELOPMENT OF COMMUNITY EROSION
HAZARD
MANAGEMENT
PLAN.—In developing the
program, the Director shall meet with appropriate
representatives of communities with erosion hazards
‘‘(iv) the relocation of structures at
risk of erosion-related flood damage; and
‘‘(v) the elimination of any cross-sub-
sidy among flood insurance policyholders in
the community resulting in the assessment
of actuarial premium rates for new con-
struction in erosion hazard areas.
‘‘(3) ELIGIBILITY FOR ASSISTANCE UNDER THE
STATE
AND
COMMUNITY
MITIGATION
ASSISTANCE
PROGRAM.—Communities voluntarily participating in
the program shall be eligible for technical and finan-
cial assistance under section 1367 for the develop-
ment and implementation of a community erosion
hazard management plan approved by the Director
that reduces the risk of erosion-related flood dam-
age.
‘‘(4) INCENTIVES.—The program shall provide
incentives in the form of credits on premium rates
for insurance coverage in communities that the Di-
rector determines have adopted and enforced meas-
ures to reduce the risk of erosion-related flood dam-
age.
‘‘(5) CREDITS.—The credits on premium rates
for flood insurance coverage under the program shall
be based on the estimated reduction in erosion-relat-
ed flood damage risks resulting from the measures
adopted by the community under this program
minus any funds received for assistance under sec-
tion 1367.’’.
SEC. 303. FUNDING.
Section 1310(a) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4017(a)) is amended—
(1) in paragraph (4), by striking ‘‘and’’ at the
end;
(2) in paragraph (5), by striking the period at
the end and inserting a semicolon; and
(3) by adding after paragraph (5) the following
new paragraph:
‘‘(6) for carrying out the programs established
under subsections (b) and (c) of section 1315.’’.
TITLE IV—MITIGATION OF
FLOOD AND EROSION RISKS
SEC. 401. MITIGATION ASSISTANCE IN FEDERAL INSUR-
ANCE ADMINISTRATION.
Section 1105(a) of the Housing and Urban Develop-
ment Act of 1968 (42 U.S.C. 4129) is amended—
(1) by striking ‘‘(a) There is hereby’’ and in-
serting the following:
‘‘(a) ESTABLISHMENT.—There is hereby’’; and
(2) by striking subsection (b) and inserting the
following:
‘‘(b) COORDINATION OF MITIGATION ACTIVITIES.—
The Director shall coordinate all mitigation activities, in-
cluding the administration of the program for mitigation
assistance under section 1367, under the Federal Insur-
ance Administrator. These activities shall include the de-
velopment and implementation of various mitigation ac-
tivities and techniques, the provision of advice and assist-
ance regarding mitigation to States, communities, and in-
dividuals, including planning assistance under section
1367(d), coordination with other Federal flood and erosion
mitigation efforts, and coordination with State and local
governments and public and private agencies and organi-
zations for collection and dissemination of information re-
garding erosion.’’.
SEC. 402. AUTHORIZATION OF NATIONAL FLOOD AND ERO-
SION MITIGATION FUNDS UNDER SECTION
1367.
(a) EXPENDITURES.—Chapter III of the National
Flood Insurance Act of 1968 (42 U.S.C. 4101 et seq.),
as amended by section 205, is amended by adding at the
end the following new section:
‘‘SEC. 1366. NATIONAL FLOOD AND EROSION MITIGATION
PROGRAM.
‘‘For flood and erosion mitigation activities author-
ized under section 1367, the Director may expend from
the National Flood Insurance Fund—
‘‘(1) up to $10,000,000 in the fiscal year end-
ing September 30, 1994;
‘‘(2) up to $15,000,000 in the fiscal year end-
ing September 30, 1995;
‘‘(3) up to $20,000,000 in the fiscal year end-
ing September 30, 1996;
‘‘(4) up to $20,000,000 in each fiscal year
thereafter; and
‘‘(5) any amounts recaptured under section
1367(i).’’.
(b) REPORT.—Not later than 1 year after the date
of enactment of this Act and biannually thereafter, the
Director shall submit a report to the Congress describing
the status of flood and erosion mitigation activities carried
out with funds authorized under section 1366 of the Na-
tional Flood Insurance Act of 1968, as added by sub-
section (a).
SEC. 403. STATE AND COMMUNITY MITIGATION ASSIST-
ANCE PROGRAM.
(a) IN GENERAL.—Chapter III of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101 et seq.), as
amended by sections 205 and 402, is amended by adding
at the end the following new section:
‘‘SEC. 1367. MITIGATION ASSISTANCE FOR STATES, COMMU-
NITIES, AND INDIVIDUALS.
‘‘(a) AUTHORITY.—The Director shall develop and
implement a financial assistance program with amounts
made available under section 1366 to States, communities,
and individuals for planning and activities designed to re-
duce the risk of flood and erosion damage to insured struc-
tures.
‘‘(b) REQUIREMENT FOR MITIGATION PLAN OR AP-
PLICATION.—
‘‘(1) STATES AND COMMUNITIES.—To be eligi-
ble to receive financial mitigation assistance, a State
or community shall develop, and have approved by
the Director, a flood and erosion risk mitigation
plan (hereafter in this section referred to as a ‘miti-
gation plan’), that is more protective against flood
losses than the criteria established by the Director
under section 1361. The mitigation plan shall in-
clude a comprehensive strategy for mitigation activi-
ties adopted by the State or community following a
public hearing.
‘‘(2) INDIVIDUALS.—For an individual to be eli-
gible to receive financial mitigation assistance for a
property—
‘‘(A) the property shall have been continu-
ously covered by a contract for flood insurance
under this title for the preceding 24 months;
and
‘‘(B) the individual shall submit, and have
approved by the Director, an application for
such assistance, as the Director shall require.
‘‘(c) NOTIFICATION OF APPROVAL.—Not later than
120 days after the submission of a mitigation plan or ap-
plication, the Director shall notify the State, community,
or individual submitting the plan or application of the Di-
rector’s approval or disapproval of the plan or application.
If the Director does not approve a plan or application, the
Director shall notify the State, community, or individual
in writing of the reasons for such disapproval.
‘‘(d) PLANNING ASSISTANCE.—
‘‘(1) IN GENERAL.—The Director shall make
planning assistance available to States and commu-
nities for developing mitigation plans.
‘‘(2) FUNDING.—From any amounts made
available for use under section 1366 of the National
Flood Insurance Act of 1968 in any fiscal year, the
‘‘(2) 
GEOGRAPHIC.—Not 
more 
than
$20,000,000 may be awarded to any 1 State and all
communities located in that State for mitigation as-
sistance in any 5-year period.
‘‘(3) TREATMENT OF ASSISTANCE FOR INDIVID-
UALS.—The amount of mitigation assistance pro-
vided under subsection (e) to any individual shall be
included, for purposes of the dollar amount limita-
tions under paragraphs (1) and (2) of this sub-
section, in the amount of assistance provided to the
State and community within which is located the
property for which the grant is made.
‘‘(g) MATCHING REQUIREMENT.—The Director may
provide mitigation assistance to a State or community in
an amount not to exceed 3 times the amount that the
State or community certifies, as the Director shall require,
that the State or community will contribute from other
funds to carry out mitigation planning under subsection
(d) and eligible activities under subsection (e).
‘‘(h) OVERSIGHT OF MITIGATION PLANS AND APPLI-
CATIONS.—The Director shall conduct oversight of recipi-
ents of mitigation assistance to ensure that the mitigation
assistance is used in compliance with approved plans and
applications.