(e) FUNDING.—There are authorized to be appro-
priated such sums as may be necessary to carry out this 
section. 
SEC. 203. EFFECT OF GUARANTEE. 
The issuance of any guarantee by the Secretary 
under this title shall be conclusive evidence that— 
(1) the guarantee has been properly obtained; 
(2) the underlying debt qualified for such guar-
antee; and 
(3) the guarantee is valid, legal, and enforce-
able. 
SEC. 204. FULL FAITH AND CREDIT. 
The full faith and credit of the United States is 
pledged to the payment of all guarantees issued under this 
title with respect to principal and interest. 
SEC. 205. FEES FOR GUARANTEES; AMOUNT; COLLECTION. 
The Secretary shall charge and collect fees for each 
guarantee in amounts specified in the commitment to 
guarantee, which shall be in amounts sufficient in the 
judgment of the Secretary at the time of issuance of the 
commitment to guarantee to cover applicable administra-
tive costs and probable losses on the guaranteed obliga-
tions covered by the commitment to guarantee, but in any 
event not to exceed one-half of 1 percent per annum of 
the outstanding indebtedness covered by each guarantee. 
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SEC. 206. PAYMENT OF LOSSES. 
(a) IN GENERAL.—The Secretary agrees to pay to 
the duly appointed paying agent or trustee (in this section 
referred to as the ‘‘Fiscal Agent’’) for the eligible State 
program that portion of the principal and interest on any 
debt guaranteed under this title that shall become due for 
payment but shall be unpaid by the eligible State program 
as a result of such program having provided insufficient 
funds to the Fiscal Agent to make such payments. The 
Secretary shall make such payments on the date such 
principal or interest becomes due for payment or on the 
business day next following the day on which the Secretary 
shall receive notice of failure on the part of the eligible 
State program to provide sufficient funds to the Fiscal 
Agent to make such payments, whichever is later. Upon 
making such payment, the Secretary shall be subrogated 
to all the rights of the ultimate recipient of the payment. 
The Secretary shall be entitled to recover from the eligible 
State program the amount of any payments made pursu-
ant to any guarantee entered into under this title. 
(b) ROLE OF THE ATTORNEY GENERAL.—The Attor-
ney General shall take such action as may be appropriate 
to enforce any right accruing to the United States as a 
result of the issuance of any guarantee under this title. 
(c) RIGHT OF THE SECRETARY.—Notwithstanding 
any other provision of law relating to the acquisition, han-
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dling, or disposal of property by the United States, the 
Secretary shall have the right in the discretion of the Sec-
retary to complete, recondition, reconstruct, renovate, re-
pair, maintain, operate, or sell any property acquired by 
the Secretary pursuant to the provisions of this title. 
SEC. 207. REGULATIONS. 
The Secretary shall issue any regulations necessary 
to carry out the debt-guarantee program established under 
this title. 
TITLE III—REINSURANCE COV-
ERAGE FOR ELIGIBLE STATE 
PROGRAMS 
SEC. 301. PROGRAM AUTHORITY. 
The Secretary of the Treasury, shall make available 
for purchase, only by eligible State programs, contracts 
for reinsurance coverage under this title. 
SEC. 302. CONTRACT PRINCIPLES. 
Contracts for reinsurance coverage made available 
under this title— 
(1) shall be priced on an actuarially sound 
basis; 
(2) shall minimize the administrative costs of 
the Federal Government; and 
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(3) shall provide coverage based solely on in-
sured losses covered by the eligible State program 
purchasing the contract. 
SEC. 303. TERMS OF REINSURANCE CONTRACTS. 
(a) MINIMUM ATTACHMENT POINT AND LEVELS OF 
COVERAGE.—The Secretary shall establish attachment 
points at which reinsurance coverage under this title is 
provided to eligible State programs. In setting attachment 
points and in determining the levels of reinsurance cov-
erage provided, the Secretary shall take into consider-
ation— 
(1) the coverage available through eligible State 
programs; 
(2) the availability and accessibility of reinsur-
ance in the private market; and 
(3) other factors as deemed appropriate by the 
Secretary. 
(b) EIGHTY TO NINETY PERCENT COVERAGE OF IN-
SURED LOSSES IN EXCESS OF RETAINED LOSSES.—Each 
contract for reinsurance coverage under this title shall 
provide that the amount paid out under the contract shall 
be equal to at least 80 percent, but not more than 90 per-
cent, of the amount of insured losses of the eligible State 
program in excess of the amount of retained losses that 
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the contract requires, pursuant to subsection (a), to be 
incurred by such program. 
(c) MATURITY.—The term of each contract for rein-
surance coverage under this title shall not exceed 1 year 
or such other term as the Secretary may determine. 
(d) PAYMENT CONDITION.—Each contract for rein-
surance coverage under this title shall authorize claims 
payments to the eligible State program purchasing the 
coverage only for insured losses provided under the con-
tract. 
(e) MULTIPLE EVENTS.—The contract shall cover 
any insured losses from one or more events that may occur 
during the term of the contract and shall provide that if 
multiple events occur, the retained losses requirement 
under subsection (a) shall apply on a calendar year basis, 
in the aggregate and not separately to each individual 
event. 
(f) TIMING OF CLAIMS.—Claims under a contract for 
reinsurance coverage under this title shall include only in-
surance claims that are reported to the eligible State pro-
gram within the 3-year period beginning upon the event 
or events for which payment under the contract is pro-
vided. 
(g) ACTUARIAL PRICING.—The price of coverage 
under a reinsurance contract under this title shall be an 
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amount, established by the Secretary at a level that annu-
ally produces expected premiums that shall be sufficient 
to pay the reasonably anticipated cost of all claims (which 
may not be equal only to average annual costs), loss ad-
justment expenses, all administrative costs of reinsurance 
coverage offered under this title, and any such outwards 
reinsurance, as described in section 305(c)(3), as the Sec-
retary considers prudent taking into consideration the de-
mand for reinsurance coverage under this title. The antici-
pated cost of all claims shall be comparable to amounts 
being included in the price for similar layers of coverage 
in the private sector, taking into account the savings asso-
ciated with non-profit and tax-exempt status of the Fund 
established under section 305. 
(h) INFORMATION.—Each contract for reinsurance 
coverage under this title shall contain a condition pro-
viding that the Secretary may require the eligible State 
program that is covered under the contract to submit to 
the Secretary all information on the eligible State program 
relevant to the duties of the Secretary under this title. 
(i) OTHERS.—Contracts for reinsurance coverage 
under this title shall contain such other terms as the Sec-
retary considers necessary to carry out this title and to 
ensure the long-term financial integrity of the program 
under this title. 
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contracts for reinsurance coverage under this title; 
and 
(3) any amounts earned on investments of the 
Fund pursuant to subsection (d). 
(c) USES.—Amounts in the Fund shall be available 
to the Secretary only for the following purposes: 
(1) CONTRACT PAYMENTS.—For payments to 
purchasers covered under contracts for reinsurance 
coverage for eligible losses under such contracts. 
(2) ADMINISTRATIVE EXPENSES.—To pay for 
the administrative expenses incurred by the Sec-
retary in carrying out the reinsurance program 
under this title. 
(3) 
OUTWARDS
REINSURANCE.—To 
obtain 
retrocessional or other reinsurance coverage of any 
kind to cover risk reinsured under contracts for rein-
surance coverage made available under this title. 
(d) INVESTMENT.—The Secretary shall invest such 
amounts in the Fund as the Secretary considers advisable 
in obligations issued or guaranteed by the United States. 
For purposes of the grant mandate in section 401(f) for 
a fiscal year, the Secretary shall disclose the annual net 
investment income available not later than 60 days after 
the conclusion of such fiscal year and disperse appropriate 
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funds not later than 90 days after the conclusion of such 
fiscal year. 
SEC. 306. CONSIDERATION OF REBUILDING. 
Nothing in this title may be construed to prevent 
counties, municipalities, and other localities from under-
taking land and environmental assessments to determine 
the efficacy of rebuilding. 
SEC. 307. REGULATIONS. 
The Secretary shall issue any regulations necessary 
to carry out the program for reinsurance coverage under 
this title. 
TITLE IV—MITIGATION GRANT 
PROGRAM 
SEC. 401. MITIGATION GRANT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary of Housing 
and Urban Development shall establish and carry out a 
program to provide grants to eligible entities to develop, 
enhance, or maintain programs to prevent and mitigate 
losses from natural catastrophes. 
(b) GRANTS.—A grant provided under subsection (a) 
shall be used to reduce loss of life and property by— 
(1) encouraging awareness of risk factors and 
what steps can be taken to eliminate or reduce them, 
including public education campaigns to promote cit-
izen and community preparedness; 
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(2) assisting in the determination of the loca-
tion of risk by giving careful consideration to the 
natural risks for the location of a property; 
(3) providing inspections of homes to identify 
areas to strengthen such homes and reduce exposure 
to natural catastrophes; 
(4) providing financial assistance to home-
owners to retrofit homes to reduce exposure to nat-
ural catastrophes; or 
(5) supporting disaster response readiness pro-
grams, including initiatives that develop, enhance ,or 
maintain the capacity of a public safety organization 
to be better prepared, equipped, and trained to re-
spond to natural catastrophes. 
(c) PRIORITY.—In making grants under the program 
under subsection (a), the Secretary shall give priority to 
applicants demonstrating greater financial need, including 
applicants serving lower income individuals and areas. 
(d) CONSULTATION WITH EXPERTS.—In carrying 
out the program established under subsection (a), the Sec-
retary of Housing and Urban Development shall consult 
with— 
(1) disaster preparedness and response organi-
zations; 
(2) homebuilders; 
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(3) real estate professionals; 
(4) building code enforcement agencies; and 
(5) any other person that the Secretary con-
siders appropriate. 
(e) ELIGIBLE ENTITY DEFINED.—In this section, the 
term ‘‘eligible entity’’ means a State or local government, 
a part or program of a State or local government, or a 
nationally recognized, congressionally chartered disaster 
response non-profit organization. 
(f) GRANT MANDATE.—The Secretary shall, to the 
extent provided in advance in appropriation Acts, use not 
less than 35 percent of the net investment income from 
the Federal Natural Catastrophe Reinsurance Fund 
earned in each fiscal year pursuant to section 305(d) for 
grants under this section. 
TITLE V—GENERAL PROVISIONS 
SEC. 501. ELIGIBLE STATE PROGRAMS. 
(a) ELIGIBLE STATE PROGRAMS.—A State program 
shall be considered an ‘‘eligible State program’’ for pur-
poses of this Act if the Secretary certifies, in accordance 
with the procedures established under subsection (c), that 
the State program complies with the following require-
ments: 
(1) STATE PROGRAM DESIGN.—The State pro-
gram is established and authorized by State law as 
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an insurance program or a reinsurance program that 
is designed to improve private insurance markets 
and that offers residential property insurance cov-
erage for losses arising from any personal residential 
line of insurance, as defined in the Uniform Prop-
erty and Casualty Product Coding Matrix of the Na-
tional Association of Insurance Commissioners. 
(2) OPERATION.—The State program shall 
meet the following requirements: 
(A) A majority of the members of the gov-
erning body of the State program shall be pub-
lic officials or appointed by public officials. 
(B) The State shall have a financial inter-
est in the State program. 
(C) If the State has at any time appro-
priated amounts from the State program’s 
funds for any purpose other than payments for 
losses insured under the State program, or pay-
ments made in connection with any of the State 
program’s authorized activities, the State shall 
have returned such amounts to the State fund, 
together with interest as determined by the in-
dividual State on such amounts. 
(3) TAX
STATUS.—The State program shall 
have received from the Secretary (or the Secretary’s 
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