I
107TH CONGRESS
1ST SESSION
H. R. 2545
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
JULY 18, 2001
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 2001’’.
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.
‘‘(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 2002,
$75,000,000 for fiscal year 2003, $50,000,000 for fiscal
year 2004, and $25,000,000 for fiscal year 2005.’’.
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 2001 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 considered