I
103D CONGRESS
1ST SESSION
H. R. 62
To revise the national flood insurance program to provide for mitigation
insurance coverage and claims payments to reduce damages to structures
suffering severe or repetitive flooding or subject to shoreline erosion,
to promote compliance with requirements for mandatory purchase of
flood insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. BEREUTER introduced the following bill; which was referred to the
Committee on Banking, Finance and Urban Affairs
SEPTEMBER 14, 1993
Additional sponsors: Ms. KAPTUR, Mr. DE LUGO, and Mr. CASTLE
A BILL
To revise the national flood insurance program to provide
for mitigation insurance coverage and claims payments
to reduce damages to structures suffering severe or re-
petitive flooding or subject to shoreline erosion, to pro-
mote compliance with requirements for mandatory pur-
chase of flood insurance, 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
‘‘National Flood Insurance Compliance, Mitigation, and
Erosion Management Act of 1993’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Declaration of purpose under the National Flood Insurance Act of
1968.
TITLE I—DEFINITIONS
Sec. 101. Flood Disaster Protection Act of 1973.
Sec. 102. National flood insurance act of 1968.
TITLE II—COMPLIANCE AND INCREASED PARTICIPATION
Sec. 201. Existing flood insurance purchase requirements.
Sec. 202. Expanded flood insurance purchase requirements.
Sec. 203. Escrow of flood insurance payments.
Sec. 204. Fine for failure to require flood insurance or notify.
Sec. 205. Ongoing compliance with flood insurance purchase requirements.
Sec. 206. Notice requirements.
Sec. 207. Standard hazard determination forms.
Sec. 208. Financial Institutions Examination Council.
Sec. 209. Conforming amendment.
TITLE III—RATINGS AND INCENTIVES FOR COMMUNITY
FLOODPLAIN MANAGEMENT PROGRAMS
Sec. 301. Community rating system and incentives for community floodplain
management.
Sec. 302. Funding.
TITLE IV—MITIGATION OF FLOOD AND EROSION RISKS
Sec. 401. Repeal of flooded property purchase and loan program.
Sec. 402. Termination of erosion-threatened structures program.
Sec. 403. Flood and erosion damage mitigation insurance.
Sec. 404. Limitations on flood insurance coverage in areas of extreme erosion
risk.
Sec. 405. Modification of floodplain management provisions.
Sec. 406. Riverine erosion study.
TITLE V—FLOOD INSURANCE TASK FORCE
Sec. 501. Flood Insurance Interagency Task Force.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 601. Maximum flood insurance coverage amounts.
Sec. 602. Flood insurance program arrangements with private insurance enti-
ties.
Sec. 603. Updating of flood maps and assessment and mapping of erosion haz-
ard zones.
Sec. 604. Funding for increased administrative and operational responsibilities.
Sec. 605. Regulations.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that—
(1) with respect to flood damage, a structured
prefunded insurance program is preferable to a re-
sponse based on post-disaster relief;
(2) the Federal Government and State and local
governments must work together to successfully
carry out the national flood insurance program;
(3) a Federal flood insurance program that
combines predisaster mitigation efforts together with
an insurance and compliance program will reduce
the physical and economic effects of flood damage on
the Federal Government, State, and local govern-
ments, and individuals;
(4) the national flood insurance program and
the citizens of the United States have benefited from
a low incidence of major storms and hurricanes in
recent years;
(5) the present reserve in the national flood in-
surance program of nearly $400,000,000 remains
extremely vulnerable to another major storm causing
billions of dollars in damage claims, which could de-
plete the national flood insurance fund, exacerbate
the Federal budget deficit, and threaten the safety
and soundness of financing institutions holding un-
insured mortgages on properties in flood-prone
areas;
(6) only 1,700,000 of an estimated 11,000,000
households in special flood hazard areas are pro-
tected by flood insurance;
(7) the number of properties insured against
floods remained roughly constant during the 1980’s
despite continuing growth in real estate activity in
coastal, lakeshore, and riverine areas;
(8) requiring flood insurance coverage for struc-
tures subject to private mortgages (in addition to
those subject to federally related mortgages) will re-
sult in a more comprehensive flood-risk insurance
program;
(9) the floodplain management and land use
and control measures adopted by communities par-
ticipating in the national flood insurance program
have resulted in lower claims for structures con-
structed in compliance with such measures;
(10) the national flood insurance program
should require and provide for notification regarding
flood insurance purchase requirements under the
program to homeowners, mortgage lenders, and
mortgage servicers;
(11) lending to aid development of areas within
the Coastal Barrier Resources System is inherently
risky and can affect the financial condition of feder-
ally insured financial institutions;
(12) the Federal regulatory agencies for deposi-
tory and nondepository institutions should, in the
course of examinations of institutions, pay particular
attention to the quality of loans that would aid the
development of coastal barriers within the Coastal
Barrier Resources System;
(13) incentives in the form of reduced premium
rates for flood insurance under the national flood in-
surance program should be provided in communities
that have adopted and enforced exemplary or par-
ticularly effective measures for floodplain manage-
ment;
(14) a community-based approach to mitigation
and erosion management, to reduce losses in
floodplains, is the most comprehensive, effective, and
cost-efficient 
method 
of 
minimizing 
losses 
in
floodplains and reducing disaster assistance expendi-
tures;
include any agency engaged primarily in the pur-
chase of mortgage loans;
‘‘(8) ‘other lending institution’ means any lend-
ing institution that is not subject to the supervision,
approval, regulation, or insuring of any Federal en-
tity for lending regulation and that is not a Federal
agency, but does not include institutions engaged
primarily in the purchase of mortgage loans; and
‘‘(9) ‘regulated lending institution’ means any
bank, savings and loan association, credit union, or
similar institution subject to the supervision, ap-
proval, regulation, or insuring of a Federal entity for
lending regulation.’’.
(b) CONFORMING AMENDMENTS.—
(1) REQUIREMENTS TO PURCHASE FLOOD IN-
SURANCE.—Section 102(b) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(b)) is
amended by striking ‘‘Each Federal instrumentality
responsible for the supervision, approval, regulation,
or insuring of banks, savings and loan associations,
or similar institutions shall by regulation direct such
institutions’’ and inserting ‘‘Each Federal entity for
lending regulation shall by regulation direct regu-
lated lending institutions’’.
(2) EFFECT OF NONPARTICIPATION IN FLOOD
INSURANCE PROGRAM.—Section 202(b) of the Flood
Disaster Protection Act of 1973 (42 U.S.C.
4106(b)) is amended by striking ‘‘Federal instru-
mentality described in such section shall by regula-
tion require the institutions’’ and inserting ‘‘Federal
entity for lending regulation (with respect to regu-
lated lending institutions), the Secretary of Housing
and Urban Development (with respect to other lend-
ing institutions), and the appropriate head of each
Federal agency acting as a lender, shall by regula-
tion require the lenders’’.
SEC. 102. NATIONAL FLOOD INSURANCE ACT OF 1968.
(a) IN GENERAL.—Section 1370(a) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is
amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
(2) in paragraph (6), by striking the period at
the end and inserting a semicolon; and
(3) by inserting after paragraph (6) the follow-
ing new paragraphs:
‘‘(7) the term ‘coastal’ means relating to the
coastlines and bays of the tidal waters of the United
States or the shorelines of the Great Lakes, but does
not refer to bayous, riverine areas, and riverine por-
tions of estuaries;
‘‘(8) the term ‘Federal entity for lending regu-
lation’ means the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Cor-
poration, the Comptroller of the Currency, the Office
of Thrift Supervision, and the National Credit
Union Administration, and with respect to a particu-
lar regulated lending institution means the entity
primarily responsible for the supervision, approval,
or regulation of the institution;
‘‘(9) the term ‘lender’ includes any regulated
lending institution, other lending institution, and
Federal agency (to the extent the agency makes di-
rect loans subject to the provisions of this Act), but
does not include any agency engaged primarily in
the purchase of mortgage loans;
‘‘(10) the term ‘natural and beneficial flood-
plain functions’ means (A) the functions associated
with the natural or relatively undisturbed floodplain
that moderate flooding, retain flood waters, or re-
duce erosion and sedimentation, and (B) ancillary
beneficial functions, including maintenance of water
quality, recharge of ground water, and provision of
fisheries and wildlife habitat;
‘‘(11) the term ‘regulated lending institution’
means a bank, savings and loan association, credit
union, or similar institution subject to the super-
vision, approval, regulation, or insuring of a Federal
entity for lending regulation;
‘‘(12) the term ‘other lending institution’ means
any lending institution that is not subject to the su-
pervision, approval, regulation, or insuring of any
Federal entity for lending regulation and that is not
a Federal agency, but does not include institutions
engaged primarily in the purchase of mortgage
loans; and’’.
(b) CONFORMING AMENDMENT.—Section 1322(d) of
the National Flood Insurance Act of 1968 (42 U.S.C.
4029(d)) is amended by striking ‘‘federally supervised, ap-
proved, regulated, or insured financial institution’’ and in-
serting ‘‘regulated lending institution’’.
TITLE II—COMPLIANCE AND
INCREASED PARTICIPATION
SEC. 201. EXISTING FLOOD INSURANCE PURCHASE RE-
QUIREMENTS.
Section 102(a) of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4012a(a)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) Paragraph (1) may not be construed to permit
the provision of any amount of financial assistance with
respect to any building or mobile home and related per-
sonal property for which flood insurance is required under
such paragraph, unless the requirements under such para-
graph are complied with in full. The prohibitions and re-
quirements under paragraph (1) relating to financial as-
sistance may not be waived for any purpose.’’.
SEC. 202. EXPANDED FLOOD INSURANCE PURCHASE RE-
QUIREMENTS.
(a) IN GENERAL.—Section 102(b) of the Flood Dis-
aster Protection Act of 1973 (42 U.S.C. 4012a(b)), as
amended by the preceding provisions of this Act, is further
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’;
(2) by inserting ‘‘(after consultation and coordi-
nation with the Financial Institutions Examination
Council established under the Federal Financial In-
stitutions Examination Council Act of 1974)’’ before
‘‘shall by regulation’’; and
(3) by adding at the end the following new
paragraphs:
‘‘(2) The Secretary of Housing and Urban Develop-
ment (after consultation and coordination with the Finan-
cial Institutions Examination Council) shall by regulation
direct that any other lending institution may not make,
increase, extend, or renew any loan secured by improved
real estate or a mobile home located or to be located in
an area that has been identified by the Director of the
Federal Emergency Management Agency as an area hav-
ing special flood hazards and in which flood insurance has
been made available under the National Flood Insurance
Act of 1968, unless the building or mobile home and any
personal property securing such loan is covered for the
term of the loan by flood insurance in the amount provided
in paragraph (1).
‘‘(3) A Federal agency may not make, increase, ex-
tend, or renew any loan secured by improved real estate
or a mobile home located or to be located in an area that
has been identified by the Director of the Federal Emer-
gency Management Agency as an area having special flood
hazards and in which flood insurance has been made avail-
able under the National Flood Insurance Act of 1968, un-
less the building or mobile home and any personal prop-
erty securing such loan is covered for the term of the loan
by flood insurance in the amount provided in paragraph
(1). The relevant head of each Federal agency acting as
a lender shall issue any regulations necessary to carry out
this paragraph. Such regulations shall be consistent with
and substantially identical to the regulations issued under
paragraphs (1) and (2).
‘‘(4) Notwithstanding any other Federal or State law,
any lender may charge the borrower a reasonable fee (as
determined by the Director) for the costs of determining
whether the improved real estate or mobile home securing
the loan is located in an area of special flood hazards, but
only if such determination is made pursuant to the mak-
ing, increasing, extending, or renewing of a loan described
under paragraph (1), (2), or (3) that is initiated by the
borrower.
‘‘(5) If a borrower under a loan disputes or challenges
the determination of the lender that the improved real es-
tate or mobile home securing the loan is located in an area
of special flood hazards, the lender shall review and con-
sider any relevant information submitted to the lender by
the borrower.’’.
(b) APPLICABILITY.—The amendment made by sub-
section (a)(3) shall apply only with respect to—
(1) any loan made, increased, extended, or re-
newed after the expiration of the 1-year period be-
ginning on the date of the enactment of this Act;
and
scribed in subsection (a)(1), to notify the Director
(or the designee of the Director) in writing during
the term of the loan of the owner and servicer of the
loan. Such institutions shall also notify the Director
(or such designee) of any change in the owner or
servicer of the loan, not later than 60 days after the
effective date of such change. The regulations under
this subsection shall provide that upon any sale or
transfer of a loan, the duty to provide notification
under this subsection shall transfer to the transferee
of the loan.
‘‘(2) FEDERAL
AGENCIES
AS
LENDERS.—The
appropriate head of each Federal agency acting as
a lender shall by regulation provide for notification
in the manner provided under paragraph (1) with
respect to any loan described in subsection (a)(1)
that is made by the agency. Any regulations issued
under this paragraph shall be consistent with and
substantially identical to the regulations issued
under paragraph (1) of this subsection.
‘‘(c) NOTIFICATION
OF
EXPIRATION
OF
INSUR-
ANCE.—The Director (or the designee of the Director)
shall, not less than 45 days before the expiration of any
contract for flood insurance under this title, issue notice
of such expiration by first class mail to the owner of the
property, the servicer of any loan secured by the property
covered by the contract, and the owner of the loan.’’.
SEC. 207. STANDARD HAZARD DETERMINATION FORMS.
Chapter III of the National Flood Insurance Act of
1968 (42 U.S.C. 4101 et seq.) is amended by adding at
the end the following new section:
‘‘STANDARD HAZARD DETERMINATION FORMS
‘‘SEC. 1365. (a) DEVELOPMENT.—The Director, in
consultation with representatives of the mortgage and
lending industry, the Federal entities for lending regula-
tion, the Federal agencies acting as lenders, and any other
appropriate individuals, shall develop standard written
and electronic forms for applications relating to real estate
loans and mortgages for determining flood hazard expo-
sure of a property.
‘‘(b) DESIGN AND CONTENTS.—
‘‘(1) PURPOSE.—The form under subsection (a)
shall be designed to facilitate a determination of the
exposure to flood hazards of structures located on
the property to which the loan application relates.
The form shall be consistent with and appropriate to
facilitate compliance with the provisions of this title.
‘‘(2) CONTENTS.—The form shall require iden-
tification of the type of flood-risk zone in which the
property is located, the complete map and panel
numbers for the property, and the date of the map
used for the determination, with respect to flood
hazard information on file with the Director. If the
property is not located in an area of special flood
hazard the form shall require a statement to such
effect and shall indicate the complete map and panel
numbers of the property. If the complete map and
panel numbers for the property are not available be-
cause the property is not located in a community
that is participating in the national flood insurance
program or because no map exists for the relevant
area, the form shall require a statement to such ef-
fect. The form shall provide for inclusion or attach-
ment of any relevant documents indicating revisions
or amendments to maps.
‘‘(c) REQUIRED USE.—The Federal entities for lend-
ing regulation shall by regulation require the use of the
form under this section by regulated lending institutions.
The appropriate head of each Federal agency acting as
a lender shall by regulation provide for the use of the form
with respect to any loan made by such agency. The Fed-
eral National Mortgage Association and the Federal Home
Loan Mortgage Corporation shall by regulation require
use of the form in connection with loans purchased by
such corporations. The Secretary of Housing and Urban
Development shall encourage the use of the form by other
lending institutions.
‘‘(d) GUARANTEES REGARDING INFORMATION.—In
providing information regarding special flood hazards on
the form developed under this section (or otherwise re-
quired of a lender not required to use the form under this
section) any lender making, increasing, extending, or re-
newing a loan secured by improved real estate or a mobile
home may provide for the acquisition or determination of
such information to be made by a person other than such
institution, only to the extent such person guarantees the
accuracy of the information. The Director shall by regula-
tions establish requirements relating to the nature and
manner of such guarantees.
‘‘(e) ELECTRONIC FORM.—The Federal entities for
lending regulation, the Secretary of Housing and Urban
Development, and the appropriate head of each Federal
agency acting as a lender shall by regulation require any
lender using the electronic form developed under this sec-
tion with respect to any loan to make available upon the
request of such Federal entity, Secretary, or agency head,
a written form under this section for such loan within 48
hours after such request.’’.
SEC. 208. FINANCIAL INSTITUTIONS EXAMINATION COUN-
CIL.
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) The council shall consult and assist the Federal
entities for lending regulation and the Secretary of Hous-
ing and Urban Development in developing and coordinat-
ing uniform standards and requirements for use by lenders
as provided under the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973.’’.
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:
‘‘FLOOD INSURANCE PURCHASE AND COMPLIANCE
REQUIREMENTS AND ESCROW ACCOUNTS’’.
TITLE III—RATINGS AND INCEN-
TIVES 
FOR 
COMMUNITY
FLOODPLAIN 
MANAGEMENT
PROGRAMS
SEC. 301. COMMUNITY RATING SYSTEM AND INCENTIVES
FOR 
COMMUNITY 
FLOODPLAIN 
MANAGE-
MENT.
Section 1315 of the National Flood Insurance Act of
1968 (42 U.S.C. 4022) is amended—
(1) by inserting after ‘‘SEC. 1315.’’ the follow-
ing: ‘‘(a) REQUIREMENT
FOR PARTICIPATION
IN
FLOOD INSURANCE PROGRAM.—’’; 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
to evaluate the measures adopted by areas (and sub-
divisions thereof) in which the Director has made
flood insurance coverage available to provide for ade-
quate land use and control provisions consistent with
the comprehensive criteria for such land manage-
ment and use under section 1361, to facilitate accu-
rate risk-rating, to promote flood insurance aware-
ness, and to complement adoption of more effective
measures for floodplain and coastal erosion manage-
ment.
‘‘(2) INCENTIVES.—The program under this
subsection shall provide incentives in the form of ad-
justments in the premium rates for flood insurance
coverage in areas that the Director determines have
adopted and enforced the goals of the community
rating system under this subsection. In providing in-
centives under this paragraph, the Director may pro-
vide for additional adjustments in premium rates for
flood insurance coverage in areas that the Director
determines have implemented measures relating to
the protection of natural and beneficial floodplain
functions.
‘‘(3) FUNDS.—The Director shall carry out the
program under this subsection with amounts, as the
Director determines necessary, from the National
Flood Insurance Fund under section 1310 and any
other amounts that may be appropriated for such
purpose.
‘‘(4) REPORTS.—The Director shall submit a
report to the Congress regarding the program under