committee, club, association, or other group that 
receives contributions or makes expenditures for 
the purpose of influencing any such election; 
(B) employ or retain any person who en-
gages in influencing legislating (as such term is 
defined in section 4911(d) of the Internal Rev-
enue Code of 1986 (26 U.S.C. 4911(d))) of any 
State or local legislative body; or 
(C) provide any thing of value, other than 
educational materials or information, to any 
elected official of any State or local government. 
SEC. 105. MANAGEMENT. 
(a) BOARD OF DIRECTORS; MEMBERSHIP; DESIGNA-
TION OF CHAIRPERSON.— 
(1) BOARD OF DIRECTORS.—The management of 
the Consortium shall be vested in a board of directors 
(referred to in this title as the ‘‘Board’’) composed of 
not less than 3 members. 
(2) CHAIRPERSON.—The Secretary of the Treas-
ury, or the designee of the Secretary, shall serve as the 
chairperson of the Board. 
(3) MEMBERSHIP.—The members of the Board 
shall include— 
(A) the Secretary of Homeland Security 
and the Secretary of Commerce, or the designees 
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of such Secretaries, respectively, but only during 
such times as there are fewer than two States 
participating in the Consortium; and 
(B) a member from each State partici-
pating in the Consortium, who shall be ap-
pointed by such State. 
(b) BYLAWS.—The Board may prescribe, amend, and 
repeal such bylaws as may be necessary for carrying out 
the functions of the Consortium. 
(c) COMPENSATION, ACTUAL, NECESSARY, AND TRANS-
PORTATION EXPENSES.— 
(1) NON-FEDERAL
EMPLOYEES.—A member of 
the Board who is not otherwise employed by the Fed-
eral Government shall be entitled to receive the daily 
equivalent of the annual rate of basic pay payable for 
level IV of the Executive Schedule under section 5315 
of title 5, United States Code, as in effect from time 
to time, for each day (including travel time) during 
which such member is engaged in the actual perform-
ance of duties of the Consortium. 
(2) FEDERAL
EMPLOYEES.—A member of the 
Board who is an officer or employee of the Federal 
Government shall serve without additional pay (or 
benefits in the nature of compensation) for service as 
a member of the Consortium. 
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(3) TRAVEL EXPENSES.—Members of the Consor-
tium shall be entitled to receive travel expenses, in-
cluding per diem in lieu of subsistence, equivalent to 
those set forth in subchapter I of chapter 57 of title 
5, United States Code. 
(d) QUORUM.—A majority of the Board shall con-
stitute a quorum. 
(e) EXECUTIVE DIRECTOR.—The Board shall appoint 
an executive director of the Consortium on such terms as 
the Board may determine. 
SEC. 106. STAFF; EXPERTS AND CONSULTANTS. 
(a) STAFF.— 
(1) APPOINTMENT.—The Board of the Consor-
tium may appoint and terminate such other staff as 
are necessary to enable the Consortium to perform its 
duties. 
(2) COMPENSATION.—The Board of the Consor-
tium may fix the compensation of the executive direc-
tor and other staff. 
(b) EXPERTS AND CONSULTANTS.—The Board shall 
procure the services of experts and consultants as the Board 
considers appropriate. 
SEC. 107. FEDERAL LIABILITY. 
The Federal Government and the Consortium shall not 
bear any liabilities arising from the actions of the Consor-
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tium. Participating States shall retain all catastrophe risk 
until the completion of a transaction described in para-
graphs (2) and (3) of section 102. 
SEC. 108. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to carry out 
this title $20,000,000 for each of fiscal years 2010 through 
2014. 
TITLE II—CATASTROPHE 
OBLIGATION GUARANTEES 
SEC. 201. PURPOSES. 
The purposes of this title are to establish a program— 
(1) to promote the availability of private capital 
to provide liquidity and capacity to State catastrophe 
insurance programs; and 
(2) to expedite the payment of claims under 
State catastrophe insurance programs and better as-
sist the financial recovery from significant natural 
catastrophes by authorizing the Secretary of the 
Treasury to guarantee debt for such purposes. 
SEC. 202. ESTABLISHMENT OF DEBT GUARANTEE PROGRAM. 
(a) AUTHORITY OF SECRETARY.—The Secretary of the 
Treasury is authorized and shall have the powers and au-
thorities necessary to guarantee, and to enter into commit-
ments to guarantee, holders of debt against loss of principal 
or interest, or both, on any such debt issued by eligible State 
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programs for purposes of this title, provided that the total 
principal amount of debt obligations guaranteed by the Sec-
retary— 
(1) for eligible State programs that cover earth-
quake peril shall not exceed $3,500,000,000; and 
(2) for eligible State programs that cover all 
other perils shall not exceed $17,000,000,000. 
(b) CONDITIONS
FOR GUARANTEE ELIGIBILITY.—A 
debt guarantee under this section may be made only if the 
Secretary has issued a commitment to guarantee to an eligi-
ble State program. The commitment to guarantee shall be 
for a period of 3 years and may be extended by the Sec-
retary for a period of 1 year on each annual anniversary 
of the issuance of the commitment to guarantee. The com-
mitment to guarantee and each extension of such commit-
ment may be issued by the Secretary only if the following 
requirements are satisfied: 
(1) The eligible State program submits to the 
Secretary a report setting forth, in such form and in-
cluding such information as the Secretary shall re-
quire, how the eligible State program plans to repay 
the debt. 
(2) Based upon the eligible State program’s re-
port submitted pursuant to paragraph (1), the Sec-
retary determines there is reasonable assurance that 
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the eligible State program can meet its repayment ob-
ligation under the debt. 
(3) The eligible State program enters into an 
agreement with the Secretary, as the Secretary shall 
require, that the eligible State program will not use 
Federal funds of any kind or from any Federal source 
(including any disaster or other financial assistance, 
loan proceeds, and any other assistance or subsidy) to 
repay the debt. 
(4) The commitment to guarantee shall specify 
the fees for debt guarantee coverage. 
(5) The maximum term of the debt that shall be 
specified in a commitment issued under this section 
may not exceed 30 years. 
(6) The Secretary determines that the eligible 
State program does not cover losses arising from 
floods to properties located in areas having special 
flood hazards (as such term is defined for purposes of 
the National Flood Insurance Act of 1968 and the 
Flood Disaster Protection Act of 1973). 
(c) MANDATORY ASSISTANCE FOR ELIGIBLE STATE 
PROGRAMS.—The Secretary shall upon the request of an eli-
gible State program and pursuant to a commitment to 
guarantee issued under subsection (b), provide a guarantee 
under subsection (d) for such eligible State program in the 
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sured losses sustained by the State program as a re-
sult of such event or events exceed 80 percent of the 
unrestricted net assets as stated in the annual finan-
cial statement for the program’s fiscal year ending 
immediately prior to the event or events. 
(3) USE OF FUNDS.—Amounts of debt guaran-
teed under this section shall be used only to pay the 
costs of issuing debt and to pay the insured losses and 
loss adjustment expenses incurred by an eligible State 
program. Such amounts shall not be used for any 
other purpose. 
(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 enforceable. 
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. 
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SEC. 205. FEES FOR GUARANTEES; AMOUNT; COLLECTION. 
The Secretary shall charge and collect fees for each 
guarantee in amounts specified in the commitment to guar-
antee, 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 administrative costs and 
probable losses on the guaranteed obligations covered by the 
commitment to guarantee, but in any event not to exceed 
one-half of 1 per centum per annum of the outstanding in-
debtedness covered by each guarantee. 
SEC. 206. PAYMENT OF LOSSES. 
(a) IN GENERAL.—The Secretary agrees to pay to the 
duly appointed paying agent or trustee (in this section re-
ferred to as the ‘‘Fiscal Agent’’) for the eligible State pro-
gram that portion of the principal and interest on any debt 
guaranteed under this title that shall become due for pay-
ment 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 ulti-
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mate recipient of the payment. The Secretary shall be enti-
tled to recover from the eligible State program the amount 
of any payments made pursuant 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 re-
sult 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-
dling, or disposal of property by the United States, the Sec-
retary shall have the right in the discretion of the Secretary 
to complete, recondition, reconstruct, renovate, repair, 
maintain, operate, or sell any property acquired by the Sec-
retary 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. 
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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 
(3) shall provide coverage based solely on insured 
losses covered by the eligible State program pur-
chasing 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 pro-
vided to eligible State programs. In setting attachment 
points and in determining the levels of reinsurance coverage 
provided, the Secretary shall take into consideration— 
(1) the coverage available through eligible State 
programs; 
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(2) the availability and accessibility of reinsur-
ance in the private market; and 
(3) other factors as deemed appropriate by the 
Secretary. 
(b) NINETY PERCENT COVERAGE OF INSURED LOSSES 
IN EXCESS OF RETAINED LOSSES.—Each contract for rein-
surance coverage under this title shall provide that the 
amount paid out under the contract shall be equal to 90 
percent of the amount of insured losses of the eligible State 
program in excess of the amount of retained losses that the 
contract requires, pursuant to subsection (a), to be incurred 
by such program. 
(c) MATURITY.—The term of each contract for reinsur-
ance coverage under this title shall not exceed 1 year or 
such other term as the Secretary may determine. 
(d) PAYMENT CONDITION.—Each contract for reinsur-
ance coverage under this title shall authorize claims pay-
ments to the eligible State program purchasing the coverage 
only for insured losses provided under the contract. 
(e) MULTIPLE EVENTS.—The contract shall cover any 
insured losses from one or more events that may occur dur-
ing the term of the contract and shall provide that if mul-
tiple 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. 
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(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 provided. 
(g) ACTUARIAL PRICING.—The price of coverage under 
a reinsurance contract under this title shall be an amount, 
established by the Secretary at a level that annually pro-
duces 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 adjustment ex-
penses, all administrative costs of reinsurance coverage of-
fered under this title, and any such outwards reinsurance, 
as described in section 305(c)(3), as the Secretary considers 
prudent taking into consideration the demand for reinsur-
ance coverage under this title. The anticipated 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 associated with non-profit 
and tax-exempt status of the Fund established under section 
305. 
(h) INFORMATION.—Each contract for reinsurance cov-
erage under this title shall contain a condition providing 
that the Secretary may require the eligible State program 
that is covered under the contract to submit to the Secretary 
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in obligations issued or guaranteed by the United States. 
For purposes of the grant mandate in section 401(e) 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 
funds not later than 90 days after the conclusion of such 
fiscal year. 
SEC. 306. 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 pro-
gram to provide grants to eligible entities to develop, en-
hance, 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 location 
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 homeowners 
to retrofit homes to reduce exposure to natural catas-
trophes; 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) CONSULTATION WITH EXPERTS.—In carrying out 
the program established under subsection (a), the Secretary 
of Housing and Urban Development shall consult with— 
(1) disaster preparedness and response organiza-
tions; 
(2) homebuilders; 
(3) real estate professionals; 
(4) building code enforcement agencies; and 
(5) any other person that the Secretary considers 
appropriate. 
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(d) 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 re-
sponse non-profit organization. 
(e) GRANT MANDATE.—The Secretary shall, to the ex-
tent 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 purposes 
of this Act if the Secretary certifies, in accordance with the 
procedures established under subsection (c), that the State 
program complies with the following requirements: 
(1) STATE PROGRAM DESIGN.—The State pro-
gram is established and authorized by State law as 
an insurance program or a reinsurance program that 
is designed to improve private insurance markets and 
that offers residential property insurance coverage for 
losses arising from any personal residential line of in-
surance, as defined in the Uniform Property and Cas-
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ualty Product Coding Matrix of the National Associa-
tion 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 public 
officials or appointed by public officials. 
(B) The State shall have a financial interest 
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 payments 
made in connection with any of the State pro-
gram’s authorized activities, the State shall have 
returned such amounts to the State fund, to-
gether with interest on such amounts. 
(3) TAX STATUS.—The State program shall have 
received from the Secretary (or the Secretary’s des-
ignee) a written determination, within the meaning 
of section 6110(b) of the Internal Revenue Code of 
1986, that the program either— 
(A) constitutes an ‘‘integral part’’ of the 
State that has created it; or 
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(B) is otherwise exempt from Federal in-
come taxation. 
(4) EARNINGS.—The State program may not 
provide for any distribution of any part of any net 
profits of the State program to any insurer that par-
ticipates in the State program. 
(5) PREVENTION AND MITIGATION.— 
(A) MITIGATION
OF
LOSSES.—The State 
program shall include provisions designed to en-
courage and support programs to mitigate losses 
from natural catastrophes for which the State in-
surance or reinsurance program was established 
to provide insurance coverage. 
(B) OPERATIONAL
REQUIREMENTS.—The 
State program shall operate in a State that— 
(i) requires that an appropriate public 
body within the State shall have adopted 
adequate mitigation measures with effective 
enforcement provisions which the Secretary 
finds are consistent with the criteria for 
construction described in the International 
Code Council building codes; 
(ii) has taken actions to establish an 
insurance rate structure that takes into ac-
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