‘‘(2) SEISMIC
RETROFITTING
ACTIVITY.—For
purposes of this subsection, the term ‘seismic retro-
fitting activity’ means any activity which involves the
trade or business of seismic retrofit construction (as
defined in section 25B(b)(2)) for residential prop-
erty.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2000.
SEC. 7. MORTGAGE INSURANCE INCENTIVE.
Section 203(b)(2) of the National Housing Act (12
U.S.C. 1709(b)(2)), is amended, in the second undesig-
nated paragraph, by inserting ‘‘or due to seismic retro-
fitting of the residence (within the meaning of the term
‘seismic retrofit construction’ under section 25B(b)(2) of
the Internal Revenue Code of 1986)’’ after ‘‘Act) therein’’.
SEC. 8. EARTHQUAKE DISASTER MITIGATION AND RECOV-
ERY PLANNING GRANT PROGRAM.
(a) DEFINITIONS.—
(1) IN GENERAL.—Section 4 of the Earthquake
Hazards Reduction Act of 1977 (42 U.S.C. 7703) is
amended by adding at the end the following:
‘‘(8) AGENCY.—The term ‘Agency’ means the
Federal Emergency Management Agency.
‘‘(9) CRITICAL
FACILITY.—The term ‘critical
facility’ means—
‘‘(A) a public structure (including a police
station, fire station, city or town hall, school, or
other public building) or a public or nonprofit
private hospital that is—
‘‘(i) owned by an entity; and
‘‘(ii) critical to the continuity of the
entity or to the conduct of the disaster re-
sponse activities of the entity; or
‘‘(B) a facility that—
‘‘(i) provides medical services to a spe-
cific occupational or industry segment of
the general public; and
‘‘(ii) is operated by an organization
described in subsection (c) or (d) of section
501 of the Internal Revenue Code of 1986
and exempt from taxation under subsection
(a) of such section.
‘‘(10) CRITICAL
PUBLIC
INFRASTRUCTURE.—
The term ‘critical public infrastructure’ means a
utility or transportation system (including a bridge,
energy system, water or sewer system, or commu-
nication system) that is—
‘‘(A) owned by an entity; and
‘‘(B) critical to the conduct of the disaster
response activities of the entity.
‘‘(11) EARTHQUAKE DISASTER.—
‘‘(A) IN GENERAL.—The term ‘earthquake
disaster’ means a disaster that results from a
movement of the earth.
‘‘(B) INCLUSIONS.—The term ‘earthquake
disaster’ includes a disaster that results from a
tsunami or an earthquake-caused landslide or
liquefaction (as determined by the Director of
the Agency).
‘‘(12) GRANT PROGRAM.—The term ‘grant pro-
gram’ means the earthquake disaster mitigation and
recovery planning grant program established under
section 6.
‘‘(13) INDIAN TRIBE.—The term ‘Indian tribe’
has the meaning given the term in section 4 of the
Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
‘‘(14) INSTITUTION OF HIGHER EDUCATION.—
The term ‘institution of higher education’ has the
meaning given the term in section 101 of the Higher
Education Act of 1965 (20 U.S.C. 1001).
‘‘(15) LOCAL GOVERNMENT.—The term ‘local
government’ means—
‘‘(A) a city, town, township, county, parish,
village, or other general-purpose political sub-
division of a State;
‘‘(B) an Indian tribe; and
‘‘(C) a geologic hazard abatement or simi-
lar special purpose district formed to carry out
or fund projects to reduce the vulnerability of
infrastructure and buildings to earthquake dis-
asters.
‘‘(16) LOSS
REDUCTION
TRUST
FUND.—The
term ‘Loss Reduction Trust Fund’ means the Loss
Reduction Trust Fund established by section 7.’’.
(2) 
CONFORMING
AMENDMENT.—Section
5(b)(1) of the Earthquake Hazards Reduction Act of
1977 (42 U.S.C. 7704(b)(1)) is amended by striking
‘‘(hereafter in this Act referred to as the ‘Agency’)’’.
(b) GRANT PROGRAM.—The Earthquake Hazards
Reduction Act of 1977 is amended by inserting after sec-
tion 5 (42 U.S.C. 7704) the following:
‘‘SEC. 6. EARTHQUAKE DISASTER MITIGATION AND RECOV-
ERY PLANNING GRANT PROGRAM.
‘‘(a) ESTABLISHMENT.—The Director of the Agency
may establish a grant program to provide financial assist-
ance to eligible recipients described in subsection (b) to
pay the Federal share of the cost of carrying out earth-
quake disaster mitigation and recovery planning measures
with respect to the critical facilities and critical public in-
frastructure under the jurisdiction of the recipients.
‘‘(b) ELIGIBLE RECIPIENTS.—
‘‘(1) IN GENERAL.—To be eligible for a grant
under the grant program, an entity shall be a local
government, public or nonprofit private hospital, or
public institution of higher education that—
‘‘(A) has jurisdiction over, or is located in,
an area that is subject to earthquake disasters;
‘‘(B) submits to the Director of the Agency
for approval an application for the grant in
such form as the Director shall require;
‘‘(C) has completed an earthquake disaster
risk analysis;
‘‘(D) has adopted a long-term strategic
earthquake disaster loss reduction plan that
identifies high priority earthquake disaster loss
reduction projects; and
‘‘(E) meets criteria established by the Di-
rector under paragraph (2).
‘‘(2) CRITERIA.—
‘‘(A) ESTABLISHMENT.—The Director of
the Agency shall establish, by regulation, cri-
teria that local governments, public and non-
profit private hospitals, and public institutions
of higher education shall meet to qualify for
grants under the grant program.
‘‘(B) 
REQUIREMENT
APPLICABLE
TO
LOCAL
GOVERNMENTS.—The criteria under
subparagraph (A) applicable to local govern-
ments shall include the requirement that a local
government adopt and enforce comprehensive
ordinances, building codes, land use measures,
and other measures for earthquake disaster loss
reduction that—
‘‘(i) take into consideration the identi-
fied earthquake hazards applicable to the
area over which the local government has
jurisdiction; and
‘‘(ii) reflect current, cost-effective
techniques designed to reduce losses from
earthquake disasters and ensure the con-
tinued functionality of critical facilities and
critical public infrastructure.
‘‘(C) CONSULTATION.—The criteria under
subparagraph (A) shall be adopted after con-
sultation with—
‘‘(i) Federal, State, and local govern-
ment officials and agencies; and
‘‘(ii) other persons knowledgeable in
the fields of natural disasters and hazard
mitigation.
‘‘(c) COST SHARING.—
‘‘(1) FEDERAL SHARE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Federal share of the cost of
measures carried out using a grant under the
grant program shall be 75 percent.
‘‘(B) 
INSUFFICIENCY
OF
FEDERAL
FUNDS.—In paying the Federal share under
subparagraph (A) in a case in which there are
insufficient funds in the Loss Reduction Trust
Fund to fund all applications that are eligible
for approval, the Director of the Agency may
consider—
‘‘(i) the desirability of geographical
dispersal of available funds;
‘‘(ii) the extent to which any applicant
faces a greater risk of earthquake disas-
ters, in number or severity, than other ap-
plicants;
‘‘(iii) the extent to which each appli-
cant is expending resources on addressing
urgent problems concerning critical facili-
ties or critical public infrastructure; and
‘‘(iv) the extent to which the measures
proposed to be funded using the grant are
expected to result in cost savings to the
Federal Government under the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.).
‘‘(2) NON-FEDERAL SHARE.—
‘‘(A) GRANTS
TO
LOCAL
GOVERNMENTS
(OTHER THAN INDIAN TRIBES).—In the case of
a grant to a local government (other than an
Indian tribe) under the grant program, the non-
Federal share of the cost of measures carried
out using the grant shall be provided as follows:
‘‘(i) 1⁄2 by the State.
‘‘(ii) 1⁄2 by the local government.
‘‘(B) GRANTS TO INDIAN TRIBES.—In the
case of a grant to an Indian tribe under the
grant program, the non-Federal share of the
cost of measures carried out using the grant
shall be provided as follows:
‘‘(i) 1⁄2 by the Bureau of Indian Af-
fairs.
‘‘(ii) 1⁄2 by the Indian tribe.
‘‘(C) GRANTS TO PUBLIC HOSPITALS.—In
the case of a grant to a public hospital under
the grant program, the non-Federal share of
the cost of measures carried out using the
grant shall be provided as follows:
‘‘(i) 1⁄2 by the State, from funds other
than general State appropriations to the
hospital.
‘‘(ii) 1⁄2 by the public hospital, from
general State appropriations to the hos-
pital or from funds donated to the hos-
pital.
‘‘(D) GRANTS
TO
NONPROFIT
PRIVATE
HOSPITALS.—In the case of a grant to a non-
profit private hospital under the grant program,
the non-Federal share of the cost of measures
carried out using the grant shall be provided by
the nonprofit private hospital.
‘‘(E) GRANTS TO PUBLIC INSTITUTIONS OF
HIGHER EDUCATION.—In the case of a grant to
a public institution of higher education under
the grant program, the non-Federal share of
the cost of measures carried out using the
grant shall be provided as follows:
‘‘(i) 1⁄2 by the State, from funds other
than general State appropriations to the
institution of higher education.
‘‘(ii) 1⁄2 by the public institution of
higher education, from general State ap-
propriations to the institution of higher
education or from funds donated to the in-
stitution of higher education.
‘‘(d) USE OF GRANT FUNDS.—
‘‘(1) IN GENERAL.—A grant under the grant
program may be used—
‘‘(A) to retrofit critical facilities and crit-
ical public infrastructure in accordance with
paragraph (2);
‘‘(B) to implement earthquake disaster
mitigation measures in accordance with para-
graph (3); or
‘‘(C) to develop earthquake disaster recov-
ery plans in accordance with paragraph (4).
‘‘(2) RETROFIT OF CRITICAL FACILITIES AND
CRITICAL PUBLIC INFRASTRUCTURE.—
‘‘(A) IN
GENERAL.—A grant under the
grant program may be used to retrofit a critical
facility or critical public infrastructure with
parts or equipment that meets current stand-
ards for withstanding earthquake disasters (as
determined by the Director of the Agency).
‘‘(B) SELECTION OF CRITICAL FACILITIES
AND
CRITICAL
PUBLIC
INFRASTRUCTURE.—A
critical facility or critical public infrastructure
shall be selected for a grant under subpara-
graph (A) if the critical facility or critical public
infrastructure is identified in a long-term stra-
tegic earthquake disaster loss reduction plan
adopted under subsection (b)(1)(D) as having
high priority for retrofit because of the effect
that damage to the critical facility or critical
public infrastructure from an earthquake dis-
aster would have on the quality of human life
in the region and on recovery from the earth-
quake disaster.
‘‘(3) IMPLEMENTATION OF EARTHQUAKE DIS-
ASTER MITIGATION MEASURES.—A grant under the
grant program may be used to implement an earth-
quake disaster mitigation measure designed to en-
sure the continued functionality of a critical facility
or critical public infrastructure.
‘‘(4) DEVELOPMENT
OF
EARTHQUAKE
DIS-
ASTER RECOVERY PLANS.—
‘‘(A) IN
GENERAL.—A grant under the
grant program may be used to develop an
earthquake 
disaster 
recovery 
plan 
that
includes—
‘‘(i) a plan for reestablishing govern-
ment operations and community services
after an earthquake disaster; and
‘‘(ii) a plan for long-term recovery
after an earthquake disaster.
‘‘(B) SCHEDULE FOR PAYMENT OF GRANT
FUNDS.—Of a grant for measures described in
subparagraph (A)—
‘‘(i) 50 percent shall be paid upon ap-
proval by the Director of the Agency of the
application for the grant; and
‘‘(ii) 50 percent shall be paid upon
adoption of the earthquake disaster recov-
ery plan by the local government, public
hospital, or public institution of higher
education.
‘‘SEC. 7. LOSS REDUCTION TRUST FUND.
‘‘(a) ESTABLISHMENT.—There is established in the
Treasury of the United States a fund to be known as the
‘Loss Reduction Trust Fund’, consisting of—
‘‘(1) such amounts as are appropriated to the
Loss Reduction Trust Fund under subsection (b);
‘‘(2) such amounts as are appropriated to the
Loss Reduction Trust Fund under section 12(e);
and
‘‘(3) any interest earned on investment of
amounts in the Loss Reduction Trust Fund under
subsection (d).
‘‘(b) TRANSFERS
TO
LOSS
REDUCTION
TRUST
FUND.—There are appropriated to the Loss Reduction
Trust Fund amounts equivalent to—
‘‘(1) such amounts as the Director of the Agen-
cy determines are remaining after the close-out of
any active disaster declaration account under the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.);
‘‘(2) such amounts as—
‘‘(A) were allocated for hazard mitigation
assistance with respect to a major disaster
under section 404 of that Act (42 U.S.C.
5170c); and
‘‘(B) the Director of the Agency deter-
mines are remaining after expiration of the
time limits established under subsection (c) of
that section; and
‘‘(3) amounts received as gifts under subsection
(f).
‘‘(c) EXPENDITURES FROM LOSS REDUCTION TRUST
FUND.—Upon request by the Director of the Agency, the
Secretary of the Treasury shall transfer from the Loss Re-
duction Trust Fund to the Director of the Agency such
amounts as the Director of the Agency determines are nec-
essary to carry out section 6.
‘‘(d) INVESTMENT OF AMOUNTS.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall invest such portion of the Loss Re-
duction Trust Fund as is not, in the judgment of
the Secretary of the Treasury, required to meet cur-
rent withdrawals. Investments may be made only in
interest-bearing obligations of the United States.
‘‘(2) ACQUISITION OF OBLIGATIONS.—For the
purpose of investments under paragraph (1), obliga-
tions may be acquired—
‘‘(A) on original issue at the issue price; or
‘‘(B) by purchase of outstanding obliga-
tions at the market price.
‘‘(3) SALE
OF
OBLIGATIONS.—Any obligation
acquired by the Loss Reduction Trust Fund may be
sold by the Secretary of the Treasury at the market
price.
‘‘(4) CREDITS TO FUND.—The interest on, and
the proceeds from the sale or redemption of, any ob-
ligations held in the Loss Reduction Trust Fund
shall be credited to and form a part of the Loss Re-
duction Trust Fund.
‘‘(e) TRANSFERS OF AMOUNTS.—
‘‘(1) IN GENERAL.—The amounts required to
be transferred to the Loss Reduction Trust Fund
under this section shall be transferred at least
monthly from the general fund of the Treasury to
the Loss Reduction Trust Fund on the basis of esti-
mates made by the Secretary of the Treasury.
‘‘(2) ADJUSTMENTS.—Proper adjustment shall
be made in amounts subsequently transferred to the
extent prior estimates were in excess of or less than
the amounts required to be transferred.
‘‘(f) GIFTS.—The Secretary of the Treasury may ac-
cept gifts of cash for transfer to the Loss Reduction Trust
Fund.’’.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section
12 of the Earthquake Hazards Reduction Act of 1977 (42
U.S.C. 7706) is amended by inserting after subsection (d)
the following:
‘‘(e) LOSS REDUCTION TRUST FUND.—There is au-
thorized to be appropriated to the Loss Reduction Trust
Fund $1,000,000,000.’’.
Æ