I
103D CONGRESS
1ST SESSION
H. R. 3191
To revise the national flood insurance program to promote compliance with
requirements for mandatory purchase of flood insurance, to provide as-
sistance for mitigation activities designed to reduce damages to structures
subject to flooding and shoreline erosion, and to increase the maximum
coverage amounts under the program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 30, 1993
Mr. KENNEDY (for himself and Mr. DEUTSCH) introduced the following bill;
which was referred to the Committee on Banking, Finance and Urban Affairs
A BILL
To revise the national flood insurance program to promote
compliance with requirements for mandatory purchase
of flood insurance, to provide assistance for mitigation
activities designed to reduce damages to structures sub-
ject to flooding and shoreline erosion, and to increase
the maximum coverage amounts under the program, 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 Reform Act of 1993’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. 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. Placement of flood insurance by regulated lending institution or Fed-
eral agency lender.
Sec. 205. Fine for failure to require flood insurance or notify.
Sec. 206. Ongoing compliance with flood insurance purchase requirements.
Sec. 207. Notice requirements.
Sec. 208. Standard hazard determination forms.
Sec. 209. Examinations regarding compliance.
Sec. 210. Financial Institutions Examination Council.
Sec. 211. Clerical amendments.
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. Mitigation assistance responsibilities in Federal insurance administra-
tion.
Sec. 404. State and community mitigation assistance program.
Sec. 405. Establishment of National Flood Mitigation Fund.
Sec. 406. Insurance premium mitigation surcharge.
Sec. 407. Limitations on new flood insurance coverage in erosion hazard areas.
Sec. 408. Study of mitigation insurance.
Sec. 409. Riverine erosion study.
Sec. 410. Coordination with coastal zone management programs.
TITLE V—FLOOD INSURANCE TASK FORCE
Sec. 501. Flood Insurance Interagency Task Force.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 601. Extension of flood insurance program.
Sec. 602. Maximum flood insurance coverage amounts.
Sec. 603. Flood insurance program arrangements with private insurance enti-
ties.
Sec. 604. Updating of flood maps and assessment and mapping of erosion haz-
ard zones.
Sec. 605. Funding for increased administrative and operational responsibilities.
Sec. 606. Regulations.
SEC. 2. DECLARATION OF PURPOSE UNDER THE NATIONAL
FLOOD INSURANCE ACT OF 1968.
Section 1302(e) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4001(e)) is amended—
(1) by redesignating clauses (3), (4), and (5),
as clauses (4), (5), and (6), respectively; and
(2) by inserting after the comma at the end of
clause (2) the following: ‘‘(3) encourage State and
local governments to protect natural and beneficial
floodplain 
functions 
that 
reduce 
flood-related
losses,’’.
TITLE I—DEFINITIONS
SEC. 101. FLOOD DISASTER PROTECTION ACT OF 1973.
(a) IN GENERAL.—Section 3(a) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4003(a)) is amended—
(1) by striking paragraph (5) and inserting the
following new paragraph:
‘‘(5) ‘Federal entity for lending regulation’
means the Board of Governors of the Federal Re-
serve 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;’’;
(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) ‘Federal agency lender’ means a Federal
agency that makes direct loans secured by improved
real estate or a mobile home, to the extent such
agency acts in such capacity;
‘‘(8) ‘lender’ includes any regulated lending in-
stitution, other lending institution, and Federal
agency lender, but does not include any agency en-
gaged primarily in the purchase of mortgage loans;
‘‘(9) ‘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 lender, but does not include institutions en-
gaged primarily in the purchase of mortgage loans;
and
‘‘(10) ‘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 AMENDMENT.—Section 202(b) of
the Flood Disaster Protection Act of 1973 (42 U.S.C.
4106(b)) is amended by striking ‘‘Federal instrumentality
described in such section shall by regulation require the
institutions’’ and inserting ‘‘Federal entity for lending reg-
ulation (with respect to regulated lending institutions), the
Secretary of Housing and Urban Development (with re-
spect to other lending institutions), and the appropriate
head of each Federal agency lender, shall by regulation
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 ‘erosion hazard area’ means,
based on erosion rate information and other histori-
cal data available, an area where erosion or avulsion
is likely to result in damage to or loss of buildings
and infrastructure within a 60-year period;
‘‘(8) the term ‘readily movable structure’ means
a small permanent structure of less than 5,000
square feet that is designed, sited, and built to ac-
complish relocation at a reasonable cost relative to
other structures of the same size and construction
and that has access of sufficient width and accept-
able grade to permit such relocation;
‘‘(9) 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;
‘‘(10) the term ‘Federal agency lender’ means a
Federal agency that makes direct loans secured by
improved real estate or a mobile home, to the extent
such agency acts in such capacity;
‘‘(11) 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;
‘‘(12) the term ‘lender’ includes any regulated
lending institution, other lending institution, and
Federal agency lender, but does not include any
agency engaged primarily in the purchase of mort-
gage loans;
‘‘(13) 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, reduce
erosion and sedimentation, and mitigate the effect of
waves and storm surge from storms, and (B) ancil-
lary beneficial functions, including maintenance of
water quality, recharge of ground water, and provi-
sion of fisheries and wildlife habitat;
‘‘(14) 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; and
‘‘(15) 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 lender, but does not include insti-
tutions engaged primarily in the purchase of mort-
gage loans.’’.
(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, other lender, or
Federal agency lender’’.
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 after ‘‘(a)’’ the following: ‘‘(a)
REQUIREMENT FOR FEDERAL ASSISTANCE FOR AC-
QUISITION OR CONSTRUCTION.—’’; and
(2) by adding at the end the following new sen-
tence: ‘‘This subsection may not be construed to per-
mit the provision of any amount of financial assist-
ance with respect to any building or mobile home
and related personal property for which flood insur-
ance is required under such paragraph, unless the
requirements under such paragraph are complied
with in full. The prohibitions and requirements in
this paragraph relating to financial assistance may
not be waived for any purpose.’’.
SEC. 202. EXPANDED FLOOD INSURANCE PURCHASE RE-
QUIREMENTS.
Section 102(b) of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4012a(b)) is amended to read as fol-
lows:
‘‘(b) REQUIREMENT FOR MORTGAGE LOANS.—
‘‘(1) REGULATED
LENDING
INSTITUTIONS.—
Each Federal entity for lending regulation (after
consultation and coordination with the Financial In-
stitutions Examination Council established under the
Federal Financial Institutions Examination Council
Act of 1974) shall by regulation direct regulated
lending institutions not to make, increase, extend, or
renew, after the expiration of 60 days following the
date of the enactment of this Act, 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 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, 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 an
amount at least equal to the outstanding principal
balance of the loan or the maximum limit of cov-
erage made available under the Act with respect to
the particular type of property, whichever is less.
‘‘(2) OTHER
LENDING
INSTITUTIONS
AND
GSE’S.—The Secretary of Housing and Urban Devel-
opment (after consultation and coordination with the
Financial Institutions Examination Council) shall by
regulation direct that—
‘‘(A) any other lending institution may not
make, increase, extend, or renew any loan se-
cured 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
having 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);
‘‘(B) the Federal National Mortgage Asso-
ciation and the Federal Home Loan Mortgage
Corporation implement procedures reasonably
designed to ensure that all loans that are—
‘‘(i) secured by improved real estate
or a mobile home located in an area that
has been identified at the time of the origi-
nation of the loan by the Director of the
Federal Emergency Management Agency,
as an area of special flood hazards and in
which flood insurance is available under
the National Flood Insurance Act of 1968,
and
‘‘(ii) purchased by either such entity,
are covered for the term of the loan by flood in-
surance in the amount provided in paragraph
(1); and
‘‘(C) all loans that are—
‘‘(i) secured by improved real estate
or a mobile home located in an area that
has been identified at the time of the origi-
nation of the loan by the Director of the
Federal Emergency Management Agency,
as an area of special flood hazards and in
which flood insurance is available under
the National Flood Insurance Act of 1968,
and
‘‘(ii) purchased by the Government
National Mortgage Association,
are covered for the term of the loan by flood in-
surance in the amount provided in paragraph
(1).
‘‘(3) FEDERAL AGENCY LENDERS.—A Federal
agency lender 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 Fed-
eral Emergency Management Agency as an area
having special flood hazards and in which flood in-
surance 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).
The relevant head of each Federal agency lender
shall issue any regulations necessary to carry out
this paragraph. Such regulations shall be consistent
with and substantially identical to the regulations is-
sued under paragraphs (1) and (2).
‘‘(4) FEE FOR DETERMINING LOCATION.—Not-
withstanding any other Federal or State law, any
lender may charge the borrower a reasonable fee (as
determined by the Director) for the costs of deter-
mining whether the improved real estate or mobile
home securing the loan is located in an area of spe-
cial flood hazards, but only if such determination is
made pursuant to the making, increasing, extending,
or renewing of a loan described under paragraph
(1), (2), or (3) that is initiated by the borrower.
‘‘(5) CONTESTED DETERMINATIONS.—If a bor-
rower under a loan disputes or challenges the deter-
mination of the lender that the improved real estate
or mobile home securing the loan is located in an
area of special flood hazards, the lender shall review
and consider any relevant information submitted to
the lender by the borrower.
‘‘(6) APPLICABILITY.—Paragraphs (2) through
(5) shall apply only with respect to—
‘‘(A) any loan made, increased, extended,
or renewed after the expiration of the 1-year
period beginning on the date of the enactment
of the National Flood Insurance Reform Act of
1993; and
‘‘(B) any loan outstanding after the expi-
ration of the 5-year period beginning on the
date of the enactment of such Act.’’.
SEC. 203. ESCROW OF FLOOD INSURANCE PAYMENTS.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a) is amended by adding at the end
the following new subsection:
‘‘(d) ESCROW OF FLOOD INSURANCE PAYMENTS.—
‘‘(1) PRIVATE LENDERS.—For loans secured by
residential real estate, each Federal entity for lend-
ing regulation (with respect to any loans of regu-
lated lending institutions) and the Secretary of
Housing and Urban Development (with respect to
any loans of other lending institutions), after con-
sultation and coordination with the Financial Insti-
tutions Examination Council, shall by regulation di-
rect that any premiums and fees for flood insurance
under the National Flood Insurance Act of 1968 for
the residential real estate shall be paid to the lender
or servicer of the loan. Premiums and fees paid to
the lender or servicer shall be paid in a manner suf-
ficient to make payments as due for the duration of
the loan. Upon receipt of the premiums, the lender
or servicer of the loan shall deposit the premiums in
an escrow account on behalf of the borrower. Upon
receipt of a notice from the Director or the provider
of the insurance that insurance premiums are due,
the lender or servicer shall pay from the escrow ac-
count to the provider of the insurance the amount
of insurance premiums owed.
‘‘(2) FEDERAL AGENCY LENDERS.—The appro-
priate head of each Federal agency lender shall by
regulation require and provide for escrow and pay-
ment of any flood insurance premiums and fees re-
lating to residential property securing loans made by
the Federal agency lender under the circumstances
and in the manner provided under paragraph (1).
Any regulations issued under this paragraph shall be
consistent with and substantially identical to the
regulations issued under paragraph (1).
‘‘(3) APPLICABILITY
OF
RESPA.—Escrow ac-
counts established pursuant to this subsection shall
be subject to the provisions of section 10 of the Real
Estate Settlement Procedures Act of 1974.
‘‘(4) APPLICABILITY.—This subsection shall
apply only with respect to—
‘‘(A) any loan made, increased, extended,
or renewed after the expiration of the 1-year
period beginning on the date of the enactment
of the National Flood Insurance Reform Act of
1993; and
‘‘(B) any loan outstanding after the expi-
ration of the 5-year period beginning on the
date of the enactment of such Act.’’.
SEC. 204. PLACEMENT OF FLOOD INSURANCE BY REGU-
LATED LENDING INSTITUTION OR FEDERAL
AGENCY LENDER.
(a) ACTIONS REQUIRED BY LENDER.—Section 102
of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a), as amended by the preceding provisions of this
Act, is further amended by adding at the end the following
new subsection:
‘‘(e) PLACEMENT OF FLOOD INSURANCE BY LEND-
ER.—
‘‘(1) NOTIFICATION TO BORROWER OF LACK OF
COVERAGE.—If, at any time during the term of a
loan secured by improved real estate or by a mobile
home located in an area that has been identified by
the Director as an area having special flood hazards
and in which flood insurance is available under the
National Flood Insurance Act of 1968, a regulated
lending institution, Federal agency lender, or other
lender determines that the building or mobile home
and any personal property securing the loan held or
serviced by the regulated lending institution or Fed-
eral agency lender is not covered by flood insurance,
in an amount not less than the amount required by
subsection (b)(1), the regulated lending institution,
Federal agency lender, or other lender shall notify
the borrower under the loan that the borrower
should obtain, at the borrower’s expense, an amount
of flood insurance that is not less than the amount
required by subsection (b)(1), for the term of the
loan.
‘‘(2) PURCHASE OF COVERAGE ON BEHALF OF
BORROWER.—If the borrower fails to purchase such
flood insurance within 60 days after such notifica-
tion, the regulated lending institution, Federal agen-
cy lender, or other lender shall purchase the insur-
ance on behalf of the borrower and may charge the
borrower for the cost of premiums and fees incurred
by the regulated lending institution, Federal agency
lender, or other lender in purchasing the insurance.
‘‘(3) REVIEW OF DETERMINATION REGARDING
REQUIRED PURCHASE.—
‘‘(A) IN GENERAL.—A borrower may re-
quest that the Director review a determination
that the improved real estate or mobile home
securing the loan is located in an area of special
flood hazards. Not later than 45 days after the
Director receives the request, the Director shall
review the determination and provide the bor-
rower with a letter stating whether or not the
property is in a special flood hazards area. The
determination of the Director shall be final.
‘‘(B) EFFECT OF DETERMINATION.—Any
person to whom a borrower provides a letter is-
sued by the Director pursuant to subparagraph
(A), stating that the property of the borrower
is not in an area of special flood hazards, shall
have no obligation under this title to require the
purchase of flood insurance on the property
during the 1-year period beginning upon the
date that such letter is provided.
‘‘(4) APPLICABILITY.—This subsection shall
apply to all loans outstanding on or after the date
of enactment of the National Flood Insurance Re-
form Act of 1993.’’.
SEC. 205. FINE FOR FAILURE TO REQUIRE FLOOD INSUR-
ANCE OR NOTIFY.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a), as amended by the preceding
provisions of this Act, is further amended by adding at
the end the following new subsection:
‘‘(f) PENALTIES FOR FAILURE TO REQUIRE FLOOD
INSURANCE OR NOTIFY.—
‘‘(1) CIVIL
MONETARY
PENALTIES
AGAINST
LENDERS.—Any regulated or other lending institu-
tion that is found to have a pattern or practice of
committing violations under paragraph (2) shall be
assessed a civil penalty by the appropriate Federal
entity for lending regulation (with respect to regu-
lated lending institutions) or the Secretary of Hous-
ing and Urban Development (with respect to any
other lending institutions) in the amount provided
under paragraph (5).
‘‘(2) LENDER VIOLATIONS.—The violations re-
ferred to in paragraph (2) shall be—
‘‘(A) making, increasing, extending, or re-
newing loans in violation of—
‘‘(i) the regulations issued pursuant to
subsection (b) of this section;
‘‘(ii) the escrow requirements under
subsection (d) of this section; or
‘‘(iii) the notice requirements under
section 1364 of the National Flood Insur-
ance Act of 1968; or
‘‘(B) failure to provide notice or purchase
flood insurance coverage in violation of sub-
section (e) of this section.
‘‘(3) CIVIL
MONETARY
PENALTIES
AGAINST
GSE’S.—If the Federal National Mortgage Associa-
tion or the Federal Home Loan Mortgage Corpora-
tion is found by the Secretary of Housing and
Urban Development to have a pattern or practice of
purchasing loans in violation of the procedures es-
tablished pursuant to subsection (b)(2)(B) of this
section or the regulations issued by the Secretary
pursuant to such subsection, the Secretary shall as-
sess a civil penalty against such enterprise in the
amount provided under paragraph (5). For purposes
of this subsection, the term ‘enterprise’ means the
Federal National Mortgage Association and the Fed-
eral Home Loan Mortgage Corporation.
‘‘(4) NOTICE AND HEARING.—A penalty under
this subsection may be issued only after notice and
an opportunity for a hearing on the record.
‘‘(5) AMOUNT.—A civil monetary penalty under
this subsection may not exceed $350 for each viola-
tion under paragraph (2) or paragraph (3). The
total amount of penalties assessed under this sub-
section against any single lender or enterprise for
any calendar year may not exceed $100,000.
‘‘(6) LENDER
COMPLIANCE.—Notwithstanding
any State or local law, for purposes of this sub-
section, any lender that purchases flood insurance or
renews a contract for flood insurance on behalf of or
as an agent of a borrower of a loan for which flood
insurance is required shall be considered to have
complied with the regulations issued under sub-
section (b).
‘‘(7) EFFECT OF TRANSFER ON LIABILITY.—
Any sale or other transfer of a loan by a lender who
has committed a violation under paragraph (1), that
occurs subsequent to the violation, shall not affect
the liability of the transferring lender with respect to
any penalty under this subsection. A lender shall not
be liable for any violations relating to a loan com-
mitted by another lender who previously held the
loan.
‘‘(8) DEPOSIT OF PENALTIES.—Any penalties
collected under this subsection shall be paid into the
National Flood Mitigation Fund under section 1367
of the National Flood Insurance Act of 1968.
‘‘(9) ADDITIONAL
PENALTIES.—Any penalty
under this subsection shall be in addition to any civil
remedy or criminal penalty otherwise available.
‘‘(10) STATUTE OF LIMITATIONS.—No penalty
may be imposed under this subsection after the expi-
ration of the 5-year period beginning on the date of
the occurrence of the violation for which the penalty
is authorized under this subsection.’’.
SEC. 206. ONGOING COMPLIANCE WITH FLOOD INSURANCE
PURCHASE REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a), as amended by the preceding
provisions of this Act, is further amended by adding at
the end the following new subsection:
‘‘(g) NOTIFICATION OF FLOOD HAZARDS TO LOAN
TRANSFEREE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2), (3), and (4), before the sale or transfer
of any loan secured by improved real estate or a mo-
bile home, the seller or transferor of the loan shall
determine whether the property is in an area that
has been designated by the Director as an area hav-
ing special flood hazards. The seller or transferor
shall, before sale or transfer, notify the purchaser or
transferee and any servicer of the loan in writing re-
garding the results of the determination. A deter-
mination under this paragraph shall be evidenced
using the standard hazard determination form under
section 1365 of the National Flood Insurance Act of
1968.
has been designated by the Director as an area
having special flood hazards.
‘‘(B) EXCEPTIONS.—Such determination
and notice shall not be required for any loan—
‘‘(i) sold or transferred to an entity
under the control of the Federal Deposit
Insurance Corporation; or
‘‘(ii) for which the purchaser or trans-
feree exercises any available option to
transfer or put the loan back to the Fed-
eral Deposit Insurance Corporation.
‘‘(C) NOTICE TO DIRECTOR.—A purchaser
or transferee of a loan required to make a de-
termination and notification under subpara-
graph (A) shall notify the Director and any
servicer of the loan of the results of the deter-
mination (using the standard hazard determina-
tion form under section 1365 of the National
Flood Insurance Act of 1968) before the expira-
tion of the 90-day period beginning on the later
of (i) the purchase or transfer of the loan, or
(ii) the expiration of any option that the pur-
chaser or transferee may have to transfer or
put the loan back to the Federal Deposit Insur-
ance Corporation.
‘‘(4) LOANS TRANSFERRED BY RTC.—
‘‘(A) IN GENERAL.—For any loan secured
by improved real estate or a mobile home that
is sold or transferred by the Resolution Trust
Corporation acting in its corporate capacity or
in its capacity as a conservator or receiver, the
purchaser or transferee of the loan shall deter-
mine whether the property is in an area that
has been designated by the Director as an area
having special flood hazards if—
‘‘(i) the Resolution Trust Corporation
acquires the loan after the date of the ef-
fectiveness of this subsection and sells or
transfers the loan before the expiration of
the 12-month period beginning on such ef-
fective date; or
‘‘(ii) the Corporation holds the loan
on the date of the effectiveness of this sub-
section and sells or transfers the loan be-
fore the expiration of the 6-month period
beginning on such effective date.
‘‘(B) NOTICE TO DIRECTOR.—A purchaser
or transferee of a loan required to make a de-
termination and notification under subpara-
graph (A) shall notify the Director and any
servicer of the loan of the results of the deter-
mination (using the standard hazard determina-
tion form under section 1365 of the National
Flood Insurance Act of 1968) before the expira-
tion of the 90-day period beginning upon the
purchase or transfer of the loan.’’.
‘‘(5) APPLICABILITY.—This subsection shall
apply only with respect to any loan outstanding or
entered into after the expiration of the 1-year period
beginning on the date of the enactment of the Na-
tional Flood Insurance Reform Act of 1993.’’.
SEC. 207. NOTICE REQUIREMENTS.
Section 1364 of the National Flood Insurance Act of
1968 (42 U.S.C. 4104a) is amended to read as follows:
‘‘NOTICE REQUIREMENTS
‘‘SEC. 1364. (a) NOTIFICATION OF SPECIAL FLOOD
HAZARDS.—
‘‘(1) LENDING
INSTITUTIONS.—Each Federal
entity for lending regulation (with respect to regu-
lated lending institutions) and the Secretary of
Housing and Urban Development (with respect to
other lending institutions), after consultation and co-
ordination with the Financial Institutions Examina-
tion Council, shall by regulation require such institu-
tions, as a condition of making, increasing, extend-
ing, or renewing 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
under this title or the Flood Disaster Protection Act
of 1973 as an area having special flood hazards, to
notify the purchaser or lessee (or obtain satisfactory
assurances that the seller or lessor has notified the
purchaser or lessee) and the servicer of the loan of
such special flood hazards, in writing, a reasonable
period in advance of the signing of the purchase
agreement, lease, or other documents involved in the
transaction. The regulations shall also require that
the lenders retain a record of the receipt of the no-
tices by the purchaser or lessee and the servicer.
‘‘(2) FEDERAL AGENCY LENDERS.—The appro-
priate head of each Federal agency lender shall by
regulation require notification in the manner pro-
vided under paragraph (1) with respect to any loan
that is made by the Federal agency lender and se-
cured by improved real estate or a mobile home lo-
cated or to be located in an area that has been iden-
tified by the Director under this title or the Flood
Disaster Protection Act of 1973 as an area having
special flood hazards. Any regulations issued under
this paragraph shall be consistent with and substan-
tially identical to the regulations issued under para-
graph (1).
‘‘(3) CONTENTS OF NOTICE.—Written notifica-
tion required under this subsection shall include—
‘‘(A) a warning, in a form to be established
in consultation with and subject to the approval
of the Director, stating that the real estate or
mobile home securing the loan is located or is
to be located in an area having special flood
hazards;
‘‘(B) a description of the flood insurance
purchase requirements under section 102(b) of
the Flood Disaster Protection Act of 1973;
‘‘(C) a statement that flood insurance cov-
erage may be purchased under the national
flood insurance program and is also available
from private insurers; and
‘‘(D) any other information that the Direc-
tor considers necessary to carry out the pur-
poses of the national flood insurance program.
‘‘(b) NOTIFICATION OF CHANGE OF LOAN HOLDER
AND SERVICER.—
‘‘(1) LENDING
INSTITUTIONS.—Each Federal
entity for lending regulation (with respect to regu-
lated lending institutions) and the Secretary of
Housing and Urban Development (with respect to
other lending institutions), after consultation and co-
ordination with the Financial Institutions Examina-
tion Council, shall by regulation require such institu-
tions, as a condition of making, increasing, extend-
ing, renewing, selling, or transferring any loan de-
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 AGENCY LENDERS.—The appro-
priate head of each Federal agency 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 Federal agency lender. 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. 208. 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 agency lenders, and any other appro-
priate individuals, shall develop standard written and elec-
tronic forms for determining flood hazard exposure of a
property for use in connection with loans secured by im-
proved real estate or a mobile home.
‘‘(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 lender shall
by regulation provide for the use of the form with respect
to any loan made by such Federal agency lender. The Sec-
retary of Housing and Urban Development shall by regu-
lation require use of the form in connection with loans
purchased by Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation and the
Government National Mortgage Association. The Sec-
retary of Housing and Urban Development shall encour-
age 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 lender shall by regulation require any lender using
the electronic form developed under this section with re-
spect 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. 209. EXAMINATIONS REGARDING COMPLIANCE.
(a) AMENDMENT TO FEDERAL DEPOSIT INSURANCE
ACT.—
(1) IN GENERAL.—Section 10 of the Federal
Deposit Insurance Act (12 U.S.C. 1820) is amended
by adding at the end the following new subsection:
‘‘(h) FLOOD INSURANCE COMPLIANCE BY INSURED
DEPOSITORY INSTITUTIONS.—
‘‘(1) EXAMINATIONS.—The appropriate Federal
banking agency shall, during each scheduled on-site
examination required by this section, determine
whether the insured depository institution is comply-
ing with the requirements of the national flood in-
surance program.
‘‘(2) REPORT.—Not later than 1 year after the
date of enactment of the National Flood Insurance
Reform Act of 1993 and biannually thereafter for
the next 4 years, each appropriate Federal banking
agency shall submit a report to the Congress on
compliance by insured depository institutions with
the requirements of the national flood insurance pro-
gram. The report shall include a description of the
methods used to determine compliance, the number
of institutions examined during the reporting year,
a listing and total number of institutions found not
to be in compliance, actions taken to correct inci-
dents of noncompliance, and an analysis of compli-
ance, including a discussion of any trends, patterns,
and problems, and recommendations regarding rea-
sonable actions to improve the efficiency of the ex-
aminations processes.’’.
(2) CLERICAL AMENDMENT.—Notwithstanding
section 302(d) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (Public Law
102–242; 105 Stat. 2349), the material to be added
to section 10 of the Federal Deposit Insurance Act
by the amendment to be made by such section
302(d) shall be inserted after subsection (f) of such
section 10 rather than at the end of section 10.
(b) AMENDMENT
TO
FEDERAL
CREDIT
UNION
ACT.—Section 204 of the Federal Credit Union Act (12
U.S.C. 1784) is amended by adding at the end the follow-
ing new subsection:
‘‘(e) FLOOD INSURANCE COMPLIANCE BY INSURED
CREDIT UNIONS.—
‘‘(1) EXAMINATION.—The Board shall, during
each examination conducted under this section, de-
termine whether the insured credit union is comply-
ing with the requirements of the national flood in-
surance program.
‘‘(2) REPORT.—Not later than 1 year after the
date of enactment of the National Flood Insurance
Reform Act of 1993 and biannually thereafter for
the next 4 years, the Board shall submit a report to
Congress on compliance by insured credit unions
with the requirements of the national flood insur-
ance program. The report shall include a description
of the methods used to determine compliance, the
number of insured credit unions examined during
the reporting year, a listing and total number of in-
sured credit unions found not to be in compliance,
actions taken to correct incidents of noncompliance,
and an analysis of compliance, including a discussion
of any trends, patterns, and problems, and rec-
ommendations regarding reasonable actions to im-
prove the efficiency of the examinations processes.’’.
(c) AMENDMENT
TO FEDERAL HOUSING ENTER-
PRISES FINANCIAL SAFETY
AND SOUNDNESS ACT
OF
1992.—Section 1317 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4517) is amended by adding at the end the following new
subsection:
‘‘(g) FLOOD INSURANCE COMPLIANCE BY ENTER-
PRISES.—
‘‘(1) EXAMINATION.—The Director shall, dur-
ing each annual examination of an enterprise con-
ducted under this section, determine whether the en-
terprise is complying with the requirements of sec-
tion 102(b)(2)(B) of the Flood Disaster Protection
Act of 1973.
‘‘(2) REPORT.—Not later than 1 year after the
date of enactment of the National Flood Insurance
Reform Act of 1993 and biannually thereafter for
the next 4 years, the Director shall submit a report
to Congress on compliance by the enterprises with
the requirements of section 102(b)(2)(B) of the
Flood Disaster Protection Act of 1973. The report
shall include a description of the methods used to
determine compliance, identification of any enter-
prise found not to be in compliance, actions taken to
correct incidents of noncompliance, and an analysis
of compliance, including a discussion of any trends,
patterns, and problems, and recommendations re-
garding reasonable actions to improve the efficiency
of the examinations processes.’’.
SEC. 210. 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. 211. CLERICAL AMENDMENTS.
Section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a) is amended—
(1) by striking the section heading and insert-
ing the following new section heading:
‘‘FLOOD INSURANCE PURCHASE AND COMPLIANCE
REQUIREMENTS AND ESCROW ACCOUNTS’’; and
(2) in subsection (c), by inserting ‘‘EXCEPTION
TO PURCHASE REQUIREMENTS FOR STATE-OWNED
PROPERTY.—’’ before ‘‘Notwithstanding’’.
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
this subsection not later than the expiration of the
2-year period beginning on the date of the enact-
ment of the National Flood Insurance Reform Act of
1993. The Director shall submit a report under this
paragraph not less than every 2 years thereafter.
Each report under this paragraph shall include an
analysis of the cost-effectiveness and other accom-
plishments and shortcomings of the program and
any recommendations of the Director for legislation
regarding the program.’’.
SEC. 302. FUNDING.
Section 1310(a) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4017(a)) is amended—
(1) in paragraph (4), by striking ‘‘and’’ at the
end;
(2) by redesignating paragraph (5) as para-
graph (9); and
(3) by inserting after paragraph (4) the follow-
ing new paragraph:
‘‘(5) for carrying out the program under section
1315(b);’’.
TITLE IV—MITIGATION OF
FLOOD AND EROSION RISKS
SEC. 401. REPEAL OF FLOODED PROPERTY PURCHASE AND
LOAN PROGRAM.
(a) REPEAL.—Section 1362 of the National Flood In-
surance Act of 1968 (42 U.S.C. 4103) is hereby repealed.
(b) TRANSITION
PHASE.—Notwithstanding sub-
section (a), during the 1-year period beginning on the date
of the enactment of this Act, the Director of the Federal
Emergency Management Agency may enter into loan and
purchase commitments as provided under section 1362 of
such Act (as in effect immediately before the enactment
of this Act).
(c) SAVINGS
PROVISION.—Notwithstanding sub-
section (a), the Director shall take any action necessary
to comply with any purchase or loan commitment entered
into before the expiration of the period referred to in sub-
section (b) pursuant to authority under section 1362 of
the National Flood Insurance Act of 1968 or subsection
(b).
SEC. 402. TERMINATION OF EROSION-THREATENED STRUC-
TURES PROGRAM.
(a) IN GENERAL.—Section 1306 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4013) is amended
by striking subsection (c).
(b) TRANSITION
PHASE.—Notwithstanding sub-
section (a), during the 1-year period beginning on the date
of the enactment of this Act, the Director of the Federal
Emergency Management Agency may pay amounts under
flood insurance contracts for demolition or relocation of
structures as provided in section 1306(c) of the National
Flood Insurance Act of 1968 (as in effect immediately be-
fore the enactment of this Act).
(c) SAVINGS
PROVISION.—Notwithstanding sub-
section (a), the Director shall take any action necessary
to make payments under flood insurance contracts pursu-
ant to any commitments made before the expiration of the
period referred to in subsection (b) pursuant to the au-
thority under section 1306(c) of the National Flood Insur-
ance Act of 1968 or subsection (b).
SEC. 403. MITIGATION ASSISTANCE RESPONSIBILITIES IN
FEDERAL INSURANCE ADMINISTRATION.
Section 1105(a) of the Housing and Urban Develop-
ment Act of 1968 (42 U.S.C. 4129(a)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) The Director of the Federal Emergency Man-
agement Agency shall coordinate all mitigation activities,
including the administration of the program for mitigation
assistance under section 1366, under the Federal Insur-
ance Administrator. Such activities shall include the devel-
opment and implementation of various mitigation activi-
ties and techniques, the provision of advice and assistance
regarding mitigation to States, communities, and individ-
uals, including planning assistance under section 1366(b),
coordination with other Federal flood and erosion mitiga-
tion efforts, and coordination with State and local govern-
ments and public and private agencies and organizations
for collection and dissemination of information regarding
erosion.’’.
SEC. 404. STATE AND COMMUNITY MITIGATION ASSIST-
ANCE PROGRAM.
(a) IN GENERAL.—Chapter III of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101 et seq.), as
amended by the preceding provisions of this Act, is further
amended by adding at the end the following new section:
‘‘STATE AND COMMUNITY MITIGATION ASSISTANCE
‘‘SEC. 1366. (a) AUTHORITY.—The Director shall
carry out a program to provide financial assistance to
States and communities, using amounts made available
from the National Flood Mitigation Fund under section
1367, for planning and carrying out activities designed to
reduce the risk of flood and erosion damage to structures
covered under contracts for flood insurance under this
title. Such financial assistance shall be made available in
the form of grants under subsection (b) for planning as-
sistance and grants under this section for carrying out
mitigation activities.
‘‘(b) PLANNING ASSISTANCE GRANTS.—
‘‘(1) IN
GENERAL.—The Director may make
grants under this subsection to States and commu-
nities to assist in developing mitigation plans under
subsection (c).
‘‘(2) FUNDING.—Of any amounts made avail-
able from the National Flood Mitigation Fund for
use under this section in any fiscal year, the Direc-
tor may use not more than $1,500,000 to provide
planning assistance grants under this subsection.
‘‘(3) LIMITATIONS.—
‘‘(A) TIMING.—A grant under this sub-
section may be awarded to a State or commu-
nity not more than once every 5 years and each
grant may cover a period of 1 to 3 years.
‘‘(B) SINGLE GRANTEE AMOUNT.—A grant
for planning assistance may not exceed—
‘‘(i) $150,000, to any State; or
‘‘(ii) $50,000, to any community.
‘‘(C) 
CUMULATIVE
STATE
GRANT
AMOUNT.—The sum of the amounts of grants
under this subsection in any fiscal year to any
one State and all communities located in such
State may not exceed $300,000.
‘‘(c) MITIGATION PLAN REQUIREMENT.—To be eligi-
ble to receive financial assistance under this section for
mitigation activities, a State or community shall develop,
and have approved by the Director, a flood and erosion
risk mitigation plan (hereafter in this section referred to
as a ‘mitigation plan’), that is more protective against
flood losses and, if applicable, erosion losses, than the cri-
teria established by the Director under section 1361 and
provides such protection with respect to structures covered
by contracts for flood insurance under this title. The miti-
gation plan shall include a comprehensive strategy for
mitigation activities adopted by the State or community
following a public hearing.
‘‘(d) NOTIFICATION
OF APPROVAL.—The Director
shall notify a State or community submitting a mitigation
plan of the approval or disapproval of the plan not later
than 120 days after submission of the plan. If the Director
does not approve a plan, the Director shall notify the State
or community in writing of the reasons for such dis-
approval.
‘‘(e) ELIGIBLE MITIGATION ACTIVITIES.—
‘‘(1) 
DETERMINATION.—Amounts 
provided
under this section (other than under subsection (b))
may be used only for mitigation activities specified
in a mitigation plan approved by the Director under
subsection (d). The Director may approve only miti-
gation plans that specify mitigation activities that
the Director determines are technically feasible and
cost-effective.
‘‘(2) ELIGIBLE ACTIVITIES.—The Director shall
determine whether mitigation activities described in
a mitigation plan submitted under subsection (d) by
a State or community comply with the requirements
under paragraph (1). Such activities may include—
‘‘(A) elevation, relocation, demolition, or
floodproofing of structures, particularly struc-
tures incurring repetitive flood-related damage;
‘‘(B) acquisition by States and commu-
nities of property substantially damaged by
flood for public use as the Director determines
is consistent with sound land management and
use in such area;
‘‘(C) the provision of technical assistance
by States to communities and individuals to
conduct eligible mitigation activities;
‘‘(D) other activities that the Director con-
siders appropriate and specifies in regulation;
and
‘‘(E) other mitigation activities not de-
scribed in subparagraphs (A) through (C) or
the regulations issued under subparagraph (D),
that are described in the mitigation plan of a
State or community.
‘‘(f) MATCHING REQUIREMENT.—The Director may
not provide mitigation assistance under this section to a
State or community in an amount exceeding 3 times the
amount that the State or community certifies, as the Di-
rector shall require, that the State or community will con-
tribute from other funds to develop a mitigation plan
under subsection (c) and to carry out mitigation activities
under the approved mitigation plan of the State or com-
munity.
‘‘(g) OVERSIGHT OF MITIGATION PLANS.—The Di-
rector shall conduct oversight of recipients of mitigation
assistance under this section to ensure that the assistance
is used in compliance with the approved mitigation plans
of the recipients and that matching funds certified under
subsection (f) are used in accordance with such certifi-
cation.
‘‘(h) RECAPTURE.—
‘‘(1) NONCOMPLIANCE WITH PLAN.—If the Di-
rector determines that a State or community that
has received mitigation assistance under this section
has not carried out the mitigation activities as set
forth in the mitigation plan, the Director shall re-
capture any unexpended amounts and deposit the
amounts in the National Flood Mitigation Fund
under section 1367.
‘‘(2) 
FAILURE
TO
PROVIDE
MATCHING
FUNDS.—If the Director determines that a State or
community that has received mitigation assistance
under this section has not provided matching funds
in the amount certified under subsection (f), the Di-
rector shall recapture any unexpended amounts of
mitigation assistance exceeding 3 times the amount
of such matching funds actually provided and de-
posit the amounts in the National Flood Mitigation
Fund under section 1367.
‘‘(i) REPORTS.—Not later than 1 year after the date
of enactment of the National Flood Insurance Reform Act
of 1993 and biannually thereafter, the Director shall sub-
mit a report to the Congress describing the status of flood
and erosion mitigation activities carried out with assist-
ance provided under this section.
‘‘(j) DEFINITION OF COMMUNITY.—For purposes of
this section, the term ‘community’ means a political sub-
division that (1) has zoning and building code jurisdiction
over a particular area of special flood hazards, and (2)
is participating in the national flood insurance program.’’.
(b) REGULATIONS.—Not later than 6 months after
date of enactment of this Act, the Director of the Federal
Emergency Management Agency shall issue regulations to
carry out section 1366 of the National Flood Insurance
Act of 1968, as added by subsection (a).
SEC. 405. ESTABLISHMENT OF NATIONAL FLOOD MITIGA-
TION FUND.
(a) IN GENERAL.—Chapter III of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101 et seq.), as
amended by the preceding provisions of this Act, is further
amended by adding at the end the following new section:
‘‘NATIONAL FLOOD MITIGATION FUND
‘‘SEC. 1367. (a) ESTABLISHMENT AND AVAILABIL-
ITY.—The Director shall establish in the Treasury of the
United States a fund to be known as the National Flood
Mitigation Fund, which shall be credited with amounts de-
scribed in subsection (b) and shall be available, to the ex-
tent provided in appropriation Acts, for providing assist-
ance under section 1366.
‘‘(b) CREDITS.—The National Flood Mitigation Fund
shall be credited with—
‘‘(1) any premium surcharges assessed under
section 1308(e);
‘‘(2) any penalties collected under section
102(f) of the Flood Disaster Protection Act of 1973;
‘‘(3) any amounts recaptured under section
1366(h); and
‘‘(4) any amounts advanced from the National
Flood Insurance Fund under section 1310(a)(6).
‘‘(c) INVESTMENT.—If the Director determines that
the amounts in the National Flood Mitigation Fund are
in excess of amounts needed under subsection (a), the Di-
rector may invest any excess amounts the Director deter-
mines advisable in interest-bearing obligations issued or
guaranteed by the United States.
‘‘(d) REPORT.—The Director shall submit a report
to the Congress not later than the expiration of the 1-
year period beginning on the date of the enactment of this
Act and not less than once during each successive 2-year
period thereafter. The report shall describe the status of
the Fund and any activities carried out with amounts from
the Fund.’’.
(b) ADVANCES FROM NATIONAL FLOOD INSURANCE
FUND.—Section 1310(a) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4017) is amended by inserting
after paragraph (5) (as added by the preceding provisions
of this Act) the following new paragraph:
‘‘(6) for advances to the National Mitigation In-
surance Fund under section 1367, which shall be
nonrepayable and shall not exceed $10,000,000 in
any fiscal year;’’.
SEC. 406. INSURANCE PREMIUM MITIGATION SURCHARGE.
(a) IN GENERAL.—Section 1308 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended
by adding at the end the following new subsection:
‘‘(e) 
INSURANCE
PREMIUM
MITIGATION
SUR-
CHARGE.—
‘‘(1) ASSESSMENT.—Notwithstanding any other
provision of this title, the Director shall assess, with
respect to each contract for flood insurance coverage
under this title, a mitigation surcharge of—
‘‘(A) $10 per policy term, for policies cov-
ering structures that are principal residences;
and
‘‘(B) the amount established by the Direc-
tor, not to exceed $25 per policy term, for poli-
cies covering other structures.
‘‘(2) DEPOSIT
IN
MITIGATION
FUND.—Any
mitigation surcharges collected shall be paid into the
National Flood Mitigation Fund under section 1367.
‘‘(3) EXEMPTION.—The mitigation surcharges
shall not be subject to any agents’ commissions,
company expenses allowances, or State or local pre-
mium taxes.’’.
(b) APPLICABILITY.—The amendment made by sub-
section (a) shall apply only to any contract for flood insur-
ance under the National Flood Insurance Act of 1968 is-
sued or renewed after the expiration of the 24-month pe-
riod beginning on the date of the enactment of this Act.
SEC. 407. LIMITATIONS ON NEW FLOOD INSURANCE COV-
ERAGE IN EROSION HAZARD AREAS.
The National Flood Insurance Act of 1968 (42
U.S.C. 4001 et seq.) is amended by inserting after section
1313 the following new section:
‘‘SEC. 1314. PROPERTIES LOCATED WITHIN 30-YEAR AND 60-
YEAR EROSION HAZARD AREAS.
‘‘(a) PROPERTIES LOCATED WITHIN 30-YEAR ERO-
SION HAZARD ZONE.—After the establishment of erosion
hazard areas under section 1360(g), the Director may not
make flood insurance available within a 30-year erosion
hazard zone with respect to any new—
‘‘(1) construction; or
‘‘(2) addition to an existing structure, if the ad-
dition makes the structure not a readily movable
structure.
‘‘(b) PROPERTIES LOCATED WITHIN 60-YEAR ERO-
SION HAZARD AREA AND OUTSIDE 30-YEAR EROSION
HAZARD ZONE.—After the establishment of erosion haz-
ard zones under section 1360(g), the Director may not
make flood insurance available with respect to any new—
‘‘(1) nonresidential structure;
‘‘(2) residential structure that is not a readily
movable structure; or
‘‘(3) addition to an existing structure, if the ad-
dition makes the structure not a readily movable
structure;
that is constructed or relocated landward of the 30-year
erosion hazard zone and within the 60-year erosion hazard
zone established by the Director under such section.’’.
SEC. 408. STUDY OF MITIGATION INSURANCE.
(a) STUDY.—The Director of the Federal Emergency
Management Agency shall conduct a study to determine
the feasibility of providing, as part of the flood insurance
policy, insurance coverage to provide for increases in the
costs of repair and reconstruction of repetitively and se-
verely flood-damaged insured buildings, in order to repair,
reconstruct, or otherwise mitigate future hazards to those
buildings to comply with local building codes and flood-
plain management ordinances to the greatest extent pos-
sible. In conducting the study, the Director shall seek in-
volvement from other Federal, State, and local agencies,
and representation from the insurance, construction, and
floodplain management interests. Under the study the Di-
rector shall—
(1) identify potential activities related to repair,
reconstruction, or otherwise achieving mitigation re-
quired to comply with standards under the national
flood insurance program and local building codes,
and evaluate the costs of such activities;
(2) evaluate how such insurance coverage could
be utilized to achieve economically justified acquisi-
tion or relocation of certain structures under certain
circumstances;
(3) evaluate the cost of providing the additional
coverage and investigate a full range of measures for
funding such costs, including changes in coverage,
rates, and deductibles;
(4) evaluate the effect changes identified in
paragraph (3) would have on the entire policy base,
the cost of flood insurance, retention of policies,
marketing of policies, the number and magnitude of
claims paid, and the economic soundness and value
of flood-prone property, and provide detail on such
effects by State and flood hazard zone; and
(5) identify mechanisms required to identify
qualifying structures, determine appropriate mitiga-
tion measures, coordinate with State and local offi-
cials, provide consistency with State and local plans
and programs, deliver the increased insurance pay-
ments, and verify appropriate actions by policy-
holders.
(b) REPORT.—The Director shall submit to the Con-
gress a report describing the study not later than the expi-
ration of the 18-month period beginning on the date of
the enactment of this Act. The report shall include conclu-
sions and recommendations of the Director in conducting
the study.
SEC. 409. RIVERINE EROSION STUDY.
(a) STUDY.—The Director of the Federal Emergency
Management Agency shall conduct a study to determine
the feasibility of identifying and establishing erosion rates
for communities subject to riverine erosion hazards and
the best manner of identifying and establishing such rates.
Under the study the Director shall—
(1) investigate and assess existing and state-of-
the-art technical methodologies for assessing riverine
erosion;
(2) examine natural riverine processes, environ-
mental conditions, and human-induced changes to
the banks of rivers and streams, examples of erosion
and likely causes, and examples of erosion control
and reasons for their performance; and
(3) analyze riverine erosion management strate-
gies, the technical standards, methods, and data nec-
essary to support such strategies, and methods of
administering such strategies through the national
flood insurance program.
(b) REPORT.—The Director shall submit a report to
the Congress regarding the findings and conclusions of the
study under this section not later than the expiration of
the 2-year period beginning on the date of the enactment
of this Act. The report shall include any recommendations
of the Director regarding appropriate methods and ap-
proaches for identifying and determining riverine erosion
rates and management strategies relating to riverine ero-
sion.
SEC. 410. COORDINATION WITH COASTAL ZONE MANAGE-
MENT PROGRAMS.
(a) IN GENERAL.—In implementing this title and the
amendments made by this title, the Director of the Fed-
eral Emergency Management Agency shall consult with
the Under Secretary of Commerce for Oceans and Atmos-
phere and representatives from State coastal zone man-
agement programs to promote full coordination of the ero-
sion management provisions of the National Flood Insur-
ance Act of 1968 as amended by this Act, and the provi-
sions of the Coastal Zone Management Act of 1972. The
Director shall, to the greatest extent possible, utilize State
management programs approved under section 306 of the
Coastal Zone Management Act of 1972 to facilitate devel-
opment and implementation of regulations and guidelines
for this title.
(b) COORDINATION REPORT.—The Director shall
prepare a report that details the proposed mechanisms for
achieving the coordination required in subsection (a). In
preparing the report, the Director shall consult with the
Under Secretary of Commerce for Oceans and Atmosphere
This report shall be transmitted to the Congress not later
than 2 years after the date of enactment of this Act.
TITLE V—FLOOD INSURANCE
TASK FORCE
SEC. 501. FLOOD INSURANCE INTERAGENCY TASK FORCE.
(a) ESTABLISHMENT.—There is hereby established
an interagency task force to be known as the Flood Insur-
ance Task Force (in this section referred to as the ‘‘Task
Force’’).
(b) MEMBERSHIP.—
(1) IN
GENERAL.—The Task Force shall be
composed of 7 members, who shall be the designees
of—
(A) the Federal Insurance Administrator;
(B) the Federal Housing Commissioner;
(C) the Secretary of Veterans Affairs;
(D) the Administrator of the Farmers
Home Administration;