I 
108TH CONGRESS 
1ST SESSION 
H. R. 670
To amend the National Flood Insurance Act of 1968 to provide for identifica-
tion, mitigation, and purchase of properties insured under the national 
flood insurance program that suffer repetitive losses. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 11, 2003
Mr. BAKER introduced the following bill; which was referred to the Committee 
on Financial Services 
A BILL 
To amend the National Flood Insurance Act of 1968 to 
provide for identification, mitigation, and purchase of 
properties insured under the national flood insurance 
program that suffer repetitive losses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Flood Loss Mitigation 
Act of 2003’’.
SEC. 2. MITIGATION FOR AND PURCHASE OF CERTAIN RE-
PETITIVE LOSS STRUCTURES. 
The National Flood Insurance Act of 1968 is amend-
ed by inserting after section 1361 (42 U.S.C. 4102) the 
following new section: 
‘‘MITIGATION FOR AND PURCHASE OF CERTAIN 
REPETITIVE LOSS STRUCTURES 
‘‘SEC. 1362. (a) AUTHORITY.—To the extent 
amounts are made available for use under this section, the 
Director may, subject to the limitations of this section—
‘‘(1) carry out mitigation activities that reduce 
flood damages to qualified repetitive loss structures 
(as such term is defined in subsection (e)); and 
‘‘(2) purchase qualified repetitive loss struc-
tures, but only for public or open space use that is 
consistent with sound land management and use 
policies. 
‘‘(b) LIMITATIONS.—The Director shall establish lim-
itations on the use of amounts made available under this 
section for mitigation and purchase of structures, which 
shall—
‘‘(1) be designed to encourage owners of struc-
tures to maintain participation in the national flood 
insurance program; and
‘‘(2) include limitations that prohibit use of 
such amounts for mitigation or purchase of any 
qualified repetitive loss structure if—
‘‘(A) as a result of such action, the owner 
of the structure will not be able to purchase a 
replacement residence; 
‘‘(B) any of the flooding that resulted in 
designation of the structure as a qualified re-
petitive loss structure was a result (in whole or 
in part) of third party development; 
‘‘(C) such action will interfere with, im-
pair, or disrupt the preservation or maintenance 
of historically or architecturally significant 
properties or areas or identifiable neighbor-
hoods or areas of cultural cohesiveness; 
‘‘(D) in purchasing the structure, the 
owner relied upon flood insurance rate maps of 
the Federal Emergency Management Agency 
that were current at the time and did not indi-
cate that the property was located in an area 
having special flood hazards; or 
‘‘(E) the Director otherwise determines, in 
the discretion of the Director, that amounts 
under this section should not be used for miti-
gation or purchase of such structure.
‘‘(c) PRIORITY FOR WORST-CASE PROPERTIES.—In 
determining the properties for which to take action under 
this section, the Director shall give priority to qualified 
repetitive loss structures on the basis of the amount of 
losses to the National Flood Insurance Fund that such 
structures have caused or will cause. 
‘‘(d) BORROWING.—
‘‘(1) ISSUANCE OF OBLIGATIONS.—Subject to 
the provisions of this subsection, the Director may 
issue and sell such notes or other obligations to the 
Secretary of the Treasury as the Director deter-
mines are necessary to provide funds to carry out 
this section. 
‘‘(2) TERMS
AND
CONDITIONS.—Obligations 
under this subsection shall be issued in the forms 
and denominations, bearing the maturities, and sub-
ject to the terms and conditions that the Secretary 
of the Treasury may prescribe. 
‘‘(3) NOTIFICATION TO CONGRESS.—At least 25 
days before the issuance or sale of a note or other 
obligation under paragraph (1), the Director shall 
notify, in writing, the Senate and the House of Rep-
resentatives of the intention of such issuance or sale 
and the dollar amount of such notes or obligations.
‘‘(4) PURCHASE
OF
OBLIGATIONS.—The Sec-
retary of the Treasury shall purchase any obligations 
issued under this subsection. For such purpose, the 
Secretary of the Treasury may use as a public debt 
transaction the proceeds from the sale of any securi-
ties issued under chapter 31 of title 31. The pur-
poses for which securities may be issued under such 
chapter are extended to include any purchase of obli-
gations issued under this subsection. 
‘‘(5) LIMITATION ON AMOUNT.—The Secretary 
of the Treasury may not at any time purchase any 
obligations under this subsection if the purchase 
would increase the aggregate principal amount of 
the outstanding holdings of obligations under this 
subsection by the Secretary to an amount greater 
than $300,000,000. 
‘‘(6) RESALE
AUTHORITY.—The Secretary of 
the Treasury may sell any obligations issued under 
this subsection at the times and prices and upon the 
terms and conditions that the Secretary of the 
Treasury shall determine. 
‘‘(7) TREATMENT.—All purchases, redemptions, 
and sales of obligations under this subsection by the 
Secretary of the Treasury shall be treated as public 
debt transactions of the United States.
‘‘(e) QUALIFIED REPETITIVE LOSS STRUCTURE.—
For purposes of this section (and sections 1310(g) and 
1316(b)), the term ‘qualified repetitive loss structure’ 
means a structure that has incurred such flood-related 
damage as the Director shall, by regulation, provide in ac-
cordance with the purposes of such sections. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated for costs of activities 
under this section $100,000,000 for fiscal year 2004, 
$75,000,000 for fiscal year 2005, $50,000,000 for fiscal 
year 2006, and $25,000,000 for fiscal year 2007.’’. 
SEC. 3. TREATMENT OF SAVINGS. 
Section 1310 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4017) is amended—
(1) in subsection (a)—
(A) in paragraph (7), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (8), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(9) for use under subsection (g) of this sec-
tion.’’; and 
(2) by adding at the end the following new sub-
section:
‘‘(g) USE OF MITIGATION SAVINGS.—
‘‘(1) DETERMINATION.—For each fiscal year, 
the Director shall make a determination of the por-
tion of the amounts in the fund that are attributable 
to savings from mitigation activities and purchases 
under section 1362 of qualified repetitive loss struc-
tures (as such term is defined in subsection (e) of 
such section). 
‘‘(2) USE
FOR
MITIGATION.—In each fiscal 
year, an amount in the fund equal to the amount de-
termined under paragraph (1) of this subsection 
shall be available (in accordance with subsection (f)) 
only for mitigation activities for, and purchase of, 
qualified repetitive loss structures under section 
1362, except as provided in paragraph (3). 
‘‘(3) USE FOR MAPPING.—After a determina-
tion by the Director that 75 percent of the number 
of qualified repetitive loss structures that existed 
upon the enactment of the Flood Loss Mitigation 
Act of 2003 have been provided mitigation that suf-
ficiently reduces the risk of losses from flooding, or 
have been purchased for public or open space use 
that is consistent with sound land management and 
use policies, the Director may use up to 75 percent 
of the amount reserved in each fiscal year under
paragraph (2) of this subsection for costs of map-
ping activities under section 1360.’’. 
SEC. 4. INELIGIBILITY FOR NATIONAL FLOOD INSURANCE 
PROGRAM. 
Section 1316 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4023) is amended—
(1) by striking the section heading and insert-
ing the following: 
‘‘PROHIBITION OF COVERAGE FOR CERTAIN 
PROPERTIES’’; 
(2) by inserting ‘‘(a) PROPERTIES IN VIOLA-
TION OF STATE OR LOCAL LAW.—’’ after ‘‘1316.’’; 
and 
(3) by adding at the end the following new sub-
sections: 
‘‘(b) QUALIFIED REPETITIVE LOSS STRUCTURES.—
In the case of a qualified repetitive loss structure (as such 
term is defined in section 1362(e)) that was the subject 
of an offer to purchase or to provide mitigation activities 
funded under section 1362 that was refused by the owner 
of the property, the Director may—
‘‘(1) deny the provision of any new flood insur-
ance coverage under this title for such property and 
may cancel any existing coverage for such property; 
or
‘‘(2) notwithstanding section 1308(e) or any 
other provision of this title, increase the chargeable 
risk premium rate for any new flood insurance cov-
erage under this title for such property to an 
amount that is not more than the applicable esti-
mated risk premium rate for the property under sec-
tion 1307(a)(1). 
‘‘(c) PROPERTIES FOR WHICH FRAUDULENT CLAIMS 
HAVE BEEN MADE.—The Director may deny the provi-
sion of any new flood insurance coverage under this title, 
and may cancel any existing coverage, for a property if 
the Director determines that the owner of the property 
has made fraudulent claims for losses to the property 
under coverage provided under this title. 
‘‘(d) APPEALS.—Any owner of a property who is ag-
grieved by a determination of the Director under sub-
section (b) or (c) may appeal such determination by filing, 
with the Director, a request for an appeal within 90 days 
after receiving notice of such determination. Upon receiv-
ing the request, the Director shall select, from a list of 
independent third parties compiled by the Director for 
such purpose, a party to hear such appeal. The determina-
tion made on appeal by such third party shall be consid-
ered a final determination of the Director for purposes of 
review under chapter 7 of title 5, United States Code.’’.
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