Title: State Flood Mitigation Revolving Fund Act of 2019
Policy area: Finance and Financial Sector

Summary:
State Flood Mitigation Revolving Fund Act of 2019
This bill permits the Federal Emergency Management Agency (FEMA) to provide capitalization grants to states. These grants must establish revolving funds to address flood risks. Revolving funds may be used to provide (1) financial assistance to participants in the National Flood Insurance Program, including homeowners, businesses, nonprofit organizations, and local governments; or (2) support for leveraged loans or state bonds. Financial assistance may be used for elevation projects, flood-proofing activities, relocation or removal of buildings, environmental restoration, acquiring property, obtaining protective easements, and other activities identified by FEMA.
States must annually submit to FEMA a plan that identifies the intended uses of the state loan fund.
States may provide additional subsidies to low-income homeowners and recipients of financial assistance in low-income areas.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2192 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2192

    To amend the National Flood Insurance Act of 1968 to allow the 
  Administrator of the Federal Emergency Management Agency to provide 
capitalization grants to States to establish revolving funds to provide 
   funding assistance to reduce flood risks, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 18, 2019

 Mr. Reed (for himself, Mr. Kennedy, and Mr. Menendez) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
    To amend the National Flood Insurance Act of 1968 to allow the 
  Administrator of the Federal Emergency Management Agency to provide 
capitalization grants to States to establish revolving funds to provide 
   funding assistance to reduce flood risks, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Flood Mitigation Revolving 
Fund Act of 2019''.

SEC. 2. STATE REVOLVING LOAN FUNDS FOR FLOOD MITIGATION.

    (a) In General.--Chapter I of the National Flood Insurance Act of 
1968 (42 U.S.C. 4011 et seq.) is amended by adding at the end the 
following:

``SEC. 1326. STATE REVOLVING LOAN FUNDS FOR FLOOD MITIGATION.

    ``(a) Definitions.--In this section:
            ``(1) Community rating system.--The term `Community Rating 
        System' means the community rating system program carried out 
        under section 1315(b).
            ``(2) Eligible state.--The term `eligible State' means a 
        State, the District of Columbia, and the Commonwealth of Puerto 
        Rico.
            ``(3) Insular area.--The term `insular area' means--
                    ``(A) Guam;
                    ``(B) American Samoa;
                    ``(C) the Commonwealth of the Northern Mariana 
                Islands;
                    ``(D) the Federated States of Micronesia;
                    ``(E) the Republic of the Marshall Islands;
                    ``(F) the Republic of Palau; and
                    ``(G) the United States Virgin Islands.
            ``(4) Intended use plan.--The term `intended use plan' 
        means a plan prepared under subsection (d)(1).
            ``(5) Low-income geographic area.--The term `low-income 
        geographic area' means an area described in paragraph (1) or 
        (2) of section 301(a) of the Public Works and Economic 
        Development Act of 1965 (42 U.S.C. 3161(a)).
            ``(6) Low-income homeowner.--The term `low-income 
        homeowner' means the owner of a primary residence, the 
        household income of which in a taxable year is not more than 80 
        percent of the median income for the area in which the 
        residence is located.
            ``(7) Participating state.--The term `participating State' 
        means an eligible State that--
                    ``(A) has entered into an agreement under 
                subsection (b)(1); and
                    ``(B) agrees to comply with the requirements of 
                this section.
            ``(8) Pre-FIRM building.--The term `pre-FIRM building' 
        means a building for which construction or substantial 
        improvement occurred before the effective date of the initial 
        Flood Insurance Rate Map published by the Administrator under 
        section 1360 for the area in which the building is located.
            ``(9) Repetitive loss structure.--The term `repetitive loss 
        structure' has the meaning given the term in section 1370(a).
            ``(10) Severe repetitive loss property.--The term `severe 
        repetitive loss property' has the meaning given the term in 
        section 1307(h).
            ``(11) State loan fund.--The term `State loan fund' means a 
        flood mitigation assistance revolving loan fund established by 
        an eligible State under this section.
            ``(12) Tribal government.--The term `tribal government' 
        means the recognized government of an Indian tribe, or the 
        governing body of an Alaska Native regional or village 
        corporation, that has been determined eligible to receive 
        services from the Bureau of Indian Affairs.
    ``(b) General Authority.--
            ``(1) In general.--The Administrator may enter into an 
        agreement with an eligible State to provide a capitalization 
        grant for the eligible State to establish a revolving fund that 
        will provide funding assistance to help homeowners, businesses, 
        nonprofit organizations, and communities reduce flood risk in 
        order to decrease--
                    ``(A) the loss of life and property;
                    ``(B) the cost of flood insurance; and
                    ``(C) Federal disaster payments.
            ``(2) Timing of deposit and agreements for distribution of 
        funds.--
                    ``(A) In general.--Not later than the last day of 
                the fiscal year following the fiscal year in which a 
                capitalization grant is made to a participating State 
                under paragraph (1), the participating State shall--
                            ``(i) deposit the grant in the State loan 
                        fund of the State; and
                            ``(ii) enter into 1 or more binding 
                        agreements that provide for the State to 
                        distribute the grant funds for purposes 
                        authorized under subsection (c) such that--
                                    ``(I) in the case of the initial 
                                grant made to a State under this 
                                section, not less than 75 percent of 
                                the amount of the grant shall be 
                                distributed before the end of the 2-
                                year period beginning on the date on 
                                which the funds are deposited in the 
                                State loan fund of the State; and
                                    ``(II) in the case of any 
                                subsequent grant made to a State under 
                                this section, not less than 90 percent 
                                of the amount of the grant shall be 
                                distributed before the end of the 1-
                                year period beginning on the date on 
                                which the funds are deposited in the 
                                State loan fund of the State.
                    ``(B) Noncompliance.--Except as provided in 
                subparagraph (C), if a participating State does not 
                comply with subparagraph (A) with respect to a grant, 
                the Administrator shall reallocate the grant in 
                accordance with paragraph (3)(B).
                    ``(C) Exception.--The Administrator may not 
                reallocate any funds under subparagraph (B) to a 
                participating State that violated subparagraph (A) with 
                respect to a grant made during the same fiscal year in 
                which the funds to be reallocated were originally made 
                available.
            ``(3) Allocation.--
                    ``(A) In general.--The Administrator shall allocate 
                amounts made available to carry out this section to 
                participating States--
                            ``(i) for the participating States to 
                        deposit in the State loan funds established by 
                        the participating States; and
                            ``(ii) except as provided in paragraph (6), 
                        in accordance with the requirements described 
                        in subparagraph (B).
                    ``(B) Requirements.--The requirements described in 
                this subparagraph are as follows:
                            ``(i) Fifty percent of the total amount 
                        made available under subparagraph (A) shall be 
                        allocated so that each participating State 
                        receives the percentage amount that is obtained 
                        by dividing the number of properties that were 
                        insured under the national flood insurance 
                        program in that State in the fiscal year 
                        preceding the fiscal year in which the amount 
                        is allocated by the total number of properties 
                        that were insured under the national flood 
                        insurance program in the fiscal year preceding 
                        the fiscal year in which the amount is 
                        allocated.
                            ``(ii) Fifty percent of the total amount 
                        made available under subparagraph (A) shall be 
                        allocated so that each participating State 
                        receives a percentage of funds that is equal to 
                        the product obtained under clause (iii)(IV) 
                        with respect to that participating State after 
                        following the procedures described in clause 
                        (iii).
                            ``(iii) The procedures described in this 
                        clause are as follows:
                                    ``(I) Divide the total amount 
                                collected in premiums for properties 
                                insured under the national flood 
                                insurance program in each participating 
                                State during the previous fiscal year 
                                by the number of properties insured 
                                under the national flood insurance 
                                program in that State for that fiscal 
                                year.
                                    ``(II) Add together each quotient 
                                obtained under subclause (I).
                                    ``(III) For each participating 
                                State, divide the quotient obtained 
                                under subclause (I) with respect to 
                                that State by the sum obtained under 
                                subclause (II).
                                    ``(IV) For each participating 
                                State, multiply the amount that is 50 
                                percent of the total amount made 
                                available under subparagraph (A) by the 
                                quotient obtained under subclause 
                                (III).
                            ``(iv) Except as provided in paragraph (5), 
                        in a fiscal year--
                                    ``(I) a participating State may not 
                                receive more than 15 percent of the 
                                total amount that is made available 
                                under subparagraph (A) in that fiscal 
                                year; and
                                    ``(II) if a participating State, 
                                based on the requirements under clauses 
                                (i) through (iii), would, but for the 
                                limitation under subclause (I) of this 
                                clause, receive an amount that is 
                                greater than the amount that the State 
                                is authorized to receive under that 
                                subclause, the difference between the 
                                authorized amount and the amount 
                                otherwise due to the State under 
                                clauses (i) through (iii) shall be 
                                allocated to other participating 
                                States--
                                            ``(aa) that, in that fiscal 
                                        year, have not received an 
                                        amount under subparagraph (A) 
                                        that is more than the 
                                        authorized amount under 
                                        subclause (I) of this clause; 
                                        and
                                            ``(bb) by using the 
                                        requirements under clauses (i) 
                                        through (iii), except that a 
                                        participating State may receive 
                                        an allocation under this 
                                        subclause only if the 
                                        allocation does not result in 
                                        the State receiving a total 
                                        amount for the fiscal year 
                                        under subparagraph (A) that is 
                                        greater than the authorized 
                                        amount under subclause (I).
            ``(4) No revolving fund required.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, and subject to subparagraph 
                (B), a participating State that receives less than 
                $4,000,000 under paragraph (3)(B) in a fiscal year may 
                distribute the funds directly in the form of grants or 
                technical assistance for a purpose described in 
                subsection (c)(2), without regard to whether the State 
                has established a State loan fund.
                    ``(B) State matching.--A participating State that 
                exercises the authority under subparagraph (A) in a 
                fiscal year shall provide matching funds from non-
                Federal sources in an amount that is equal to 25 
                percent of the amount that the State receives under 
                paragraph (3)(B) in that fiscal year for purposes 
                described in subparagraph (A).
            ``(5) Allocation of remaining funds.--After allocating 
        amounts made available to carry out this section for a fiscal 
        year in accordance with paragraph (3), the Administrator shall 
        allocate any remaining amounts made available for that fiscal 
        year to participating States, using the procedures described in 
        clauses (i) through (iii) of paragraph (3)(B).
            ``(6) Reservation of funds.--The Administrator shall 
        reserve not more than 1.5 percent of the amount made available 
        to carry out this section in a fiscal year--
                    ``(A) for administrative costs incurred in carrying 
                out this section;
                    ``(B) to provide technical assistance to recipients 
                of grants under this section; and
                    ``(C) to enter into grant agreements with tribal 
                governments and insular areas, with the grant funds to 
                be distributed--
                            ``(i) according to criteria established by 
                        the Administrator; and
                            ``(ii) for a purpose described in 
                        subsection (c)(2).
    ``(c) Use of Funds.--
            ``(1) In general.--Amounts deposited in a State loan fund, 
        including repayments of loans made from the fund and interest 
        earned on the amounts in the fund, shall be used--
                    ``(A) consistent with paragraph (2) and subsection 
                (g), to provide financial assistance for--
                            ``(i) homeowners, businesses, and nonprofit 
                        organizations that are eligible to participate 
                        in the national flood insurance program; and
                            ``(ii) any local government that 
                        participates in the national flood insurance 
                        program;
                    ``(B) as a source of revenue and security for 
                leveraged loans, the proceeds of which shall be 
                deposited in the State loan fund; or
                    ``(C) for the sale of bonds as security for payment 
                of the principal and interest on revenue or general 
                obligation bonds issued by the participating State to 
                provide matching funds under subsection (f), if the 
                proceeds from the sale of the bonds are deposited in 
                the State loan fund.
            ``(2) Purposes.--A recipient of financial assistance 
        provided through amounts from a State loan fund--
                    ``(A) shall use the amounts to reduce--
                            ``(i) flood risk; or
                            ``(ii) potential claims for losses covered 
                        under the national flood insurance program;
                    ``(B) shall use the amounts in a cost-effective 
                manner under requirements established by the State, 
                which may require an applicant for financial assistance 
                to submit any information that the State considers 
                relevant or necessary before the date on which the 
                applicant receives the assistance;
                    ``(C) shall use the amounts for projects that--
                            ``(i) meet design and construction 
                        standards established by the Administrator;
                            ``(ii) are located in communities that--
                                    ``(I) participate in the national 
                                flood insurance program; and
                                    ``(II) have developed a State or 
                                community hazard mitigation plan that 
                                has been approved by the Administrator 
                                under section 1366;
                            ``(iii) address--
                                    ``(I) a repetitive loss structure 
                                or a severe repetitive loss property; 
                                or
                                    ``(II) flood risk in the 500-year 
                                floodplain, areas of residual flood 
                                risk, or other areas of potential flood 
                                risk, as identified by the 
                                Administrator; and
                            ``(iv) address current risk and anticipate 
                        future risk, such as sea-level rise;
                    ``(D) may use the amounts--
                            ``(i) for projects relating to--
                                    ``(I) structural elevation;
                                    ``(II) floodproofing;
                                    ``(III) the relocation or removal 
                                of buildings from the 100-year 
                                floodplain or other areas of flood 
                                risk, including the acquisition of 
                                properties for such a purpose;
                                    ``(IV) environmental restoration 
                                activities that directly reduce flood 
                                risk;
                                    ``(V) any eligible activity 
                                described in subparagraphs (A) through 
                                (G) of section 1366(c)(3); or
                                    ``(VI) other activities determined 
                                appropriate by the Administrator;
                            ``(ii) with respect to a project described 
                        in clause (i), only for expenditures directly 
                        related to a project described in that clause, 
                        including expenditures for planning, design, 
                        and associated pre-construction activities; and
                            ``(iii) to acquire, for the purposes of 
                        permanent protection, land, buildings, or a 
                        conservation easement from a willing seller or 
                        grantor;
                    ``(E) may not use the amounts--
                            ``(i) to construct buildings or expand 
                        existing buildings, unless the activity is for 
                        the purpose of flood mitigation;
                            ``(ii) to improve any structure, unless the 
                        recipient has obtained flood insurance 
                        coverage, which shall be maintained for the 
                        useful life of the structure, in an amount that 
                        is not less than the lesser of--
                                    ``(I) the eligible project costs 
                                with respect to the structure; and
                                    ``(II) the maximum insurable limit 
                                for the structure under the national 
                                flood insurance program coverage for 
                                the structure;
                            ``(iii) to improve a residential property 
                        with an appraised value that is not less than 
                        125 percent of the limitation on the maximum 
                        original principal obligation of a conventional 
                        mortgage that may be purchased by the Federal 
                        National Mortgage Association or the Federal 
                        Home Loan Mortgage Corporation in the area in 
                        which the property is located, as established 
                        under section 302(b)(2) of the Federal National 
                        Mortgage Association Charter Act (12 U.S.C. 
                        1717(b)(2)) and section 305(a)(2) of the 
                        Federal Home Loan Mortgage Corporation Act (12 
                        U.S.C. 1454(a)(2));
                            ``(iv) for the direct benefit of a 
                        homeowner if the annual household adjusted 
                        gross income of the homeowner during the 
                        previous fiscal year was not less than 
                        $200,000, as annually adjusted by the 
                        Administrator to reflect changes in the 
                        Consumer Price Index for All Urban Consumers, 
                        as published by the Bureau of Labor Statistics 
                        of the Department of Labor and rounded to the 
                        nearest $25; or
                            ``(v) to acquire real property or an 
                        interest in real property unless the property 
                        is purchased from a willing seller; and
                    ``(F) to the maximum extent practicable, shall, in 
                using those amounts, give priority to projects that 
                assist low-income homeowners and low-income 
                geographical areas.
    ``(d) Intended Use Plans.--
            ``(1) In general.--After providing the opportunity for 
        public review and comment, each participating State shall 
        annually prepare a plan that identifies, for the year following 
        the date of issuance of the intended use plan, the intended 
        uses of the amounts available in the State loan fund of the 
        participating State.
            ``(2) Consultation during preparation.--Each participating 
        State, in preparing an intended use plan, shall ensure that the 
        State agency with primary responsibility for floodplain 
        management--
                    ``(A) provides oversight with respect to the 
                preparation of the intended use plan; and
                    ``(B) consults with any other appropriate State 
                agency, including agencies responsible for coastal and 
                environmental management.
            ``(3) Contents.--A participating State shall, in each 
        intended use plan--
                    ``(A) include--
                            ``(i) an explanation of the mitigation and 
                        resiliency benefits the State intends to 
                        achieve, including by--
                                    ``(I) reducing future damage and 
                                loss associated with flooding;
                                    ``(II) reducing the number of 
                                severe repetitive loss properties and 
                                repetitive loss structures in the 
                                State;
                                    ``(III) decreasing the number of 
                                flood insurance claims in the State; 
                                and
                                    ``(IV) increasing the rating under 
                                the Community Rating System for 
                                communities in the State;
                            ``(ii) information with respect to the 
                        availability of, and the application process 
                        for receiving, financial assistance from the 
                        State loan fund of the State;
                            ``(iii) the criteria and methods 
                        established for the distribution of amounts 
                        from the State loan fund of the State;
                            ``(iv) the amount of financial assistance 
                        that the State anticipates providing to--
                                    ``(I) local government projects; 
                                and
                                    ``(II) projects for homeowners, 
                                business, or nonprofit organizations;
                            ``(v) the expected terms of the assistance 
                        provided under clause (iv); and
                            ``(vi) a description of the financial 
                        status of the State loan fund and the short-
                        term and long-term goals of the State loan 
                        fund; and
                    ``(B) provide, to the maximum extent practicable, 
                that priority for the use of amounts from the State 
                loan fund shall be given to projects that--
                            ``(i) address severe repetitive loss 
                        properties and repetitive loss structures;
                            ``(ii) assist low-income homeowners and 
                        low-income geographic areas; and
                            ``(iii) address flood risk for pre-FIRM 
                        buildings.
            ``(4) Publication.--Each participating State shall publish 
        and periodically update a list of all projects receiving 
        funding from the State loan fund of the State, which shall 
        include identification of--
                    ``(A) the community in which the project is 
                located;
                    ``(B) the type and amount of assistance provided 
                for each project; and
                    ``(C) the expected funding schedule and date of 
                completion of each project.
    ``(e) Fund Management.--Amounts in a State loan fund shall--
            ``(1) remain available for providing financial assistance 
        under this section until distributed;
            ``(2) if the amounts are not required for immediate 
        distribution or expenditure, be invested in interest-bearing 
        obligations; and
            ``(3) except as provided in subsection (i), include only--
                    ``(A) amounts received from capitalization grants 
                made under this section;
                    ``(B) repayments of loans made from the fund; and
                    ``(C) interest earned on amounts in the fund.
    ``(f) Matching Funds.--
            ``(1) Full grant.--On or before the date on which a 
        participating State receives a capitalization grant, the State 
        shall deposit into the State loan fund of the State, in 
        addition to the amount of the capitalization grant, an amount 
        from non-Federal sources that is not less than 20 percent of 
        the total amount of the capitalization grant.
            ``(2) Reduced grant.--If, with respect to a capitalization 
        grant, a participating State deposits in the State loan fund of 
        the State an amount from non-Federal sources that is less than 
        20 percent of the total amount of the capitalization grant that 
        the participating State would otherwise receive, the 
        Administrator shall--
                    ``(A) reduce the amount of the capitalization grant 
                received by the State to the amount that is 5 times the 
                amount so deposited; and
                    ``(B) in accordance with subsection (b)(5), 
                allocate the difference between the amount that the 
                participating State would have received if the State 
                had complied with paragraph (1) and the amount of the 
                reduced grant that the participating State receives 
                under subparagraph (A).
    ``(g) Types of Assistance.--Unless otherwise prohibited by State 
law, a participating State may use the amounts deposited into a State 
loan fund under this section only--
            ``(1) to make a loan, on the condition that--
                    ``(A) the interest rate for the loan is not more 
                than the market interest rate;
                    ``(B) the recipient of the loan will begin making 
                principal and interest payments on the loan not later 
                than 1 year after the date on which the project for 
                which the loan was made is completed;
                    ``(C) the loan will be fully amortized not later 
                than 20 years after the date on which the project for 
                which the loan was made is completed, except that, in 
                the case of a loan made for a project in a low-income 
                geographic area or to a low-income homeowner, the State 
                may provide a longer amortization period for the loan 
                if that longer period--
                            ``(i) ends on a date that is not later than 
                        30 years after the date on which the project is 
                        completed; and
                            ``(ii) is not longer than the expected 
                        design life of the project;
                    ``(D) the recipient of the loan demonstrates, based 
                on verified and documented information that, as of the 
                date on which the loan is made, the recipient has a 
                reasonable ability to repay the loan, according to the 
                terms of the loan, except that this subparagraph may 
                not be construed to authorize any reduction or 
                limitation in efforts to comply with the requirements 
                of subsection (c)(2)(F); and
                    ``(E) payments of principal and interest with 
                respect to the loan will be deposited into the State 
                loan fund;
            ``(2) to buy or refinance the debt obligation of a local 
        government at an interest rate that is not more than the market 
        interest rate;
            ``(3) to guarantee, or purchase insurance for, a local 
        obligation, the proceeds of which finance a project eligible 
        for assistance under this section, if the guarantee or 
        purchase, as applicable, would--
                    ``(A) improve credit market access; or
                    ``(B) reduce the interest rate with respect to the 
                obligation;
            ``(4) as a source of revenue or as security for the payment 
        of principal and interest on revenue or general obligation 
        bonds issued by the State if the proceeds of the sale of the 
        bonds will be deposited into the State loan fund; or
            ``(5) to earn interest on those amounts.
    ``(h) Assistance for Low-Income Homeowners and Low-Income 
Geographic Areas.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, if a participating State uses amounts from a 
        State loan fund to provide financial assistance under 
        subsection (c) in a low-income geographic area or to a low-
        income homeowner, the State may provide additional 
        subsidization to the recipient of the assistance, including 
        forgiveness of the principal of a loan.
            ``(2) Limitation.--For each fiscal year, the total amount 
        of additional subsidization provided by a participating State 
        under paragraph (1) may not exceed 30 percent of the amount of 
        the capitalization grant allocated to the State for that fiscal 
        year.
    ``(i) Administration of Fund.--
            ``(1) In general.--A participating State may combine the 
        financial administration of a State loan fund with the 
        financial administration of any other revolving fund 
        established by the State if--
                    ``(A) combining the administration of the funds 
                would--
                            ``(i) be convenient and avoid 
                        administrative costs; and
                            ``(ii) not violate the law of the State; 
                        and
                    ``(B) the Administrator determines that--
                            ``(i) amounts obtained from a grant made 
                        under this section, amounts obtained from the 
                        repayment of a loan made from a State loan 
                        fund, and interest earned on amounts in a State 
                        loan fund will be--
                                    ``(I) accounted for separately from 
                                amounts from other revolving funds; and
                                    ``(II) used only for purposes 
                                authorized under this section; and
                            ``(ii) after consulting with the 
                        appropriate State agencies, the authority to 
                        establish assistance priorities and carry out 
                        oversight and related activities, other than 
                        financial administration, with respect to flood 
                        assistance remains with the State agency with 
                        primary responsibility for floodplain 
                        management.
            ``(2) Administrative and technical costs.--
                    ``(A) In general.--For each fiscal year, a 
                participating State may use the amount described in 
                subparagraph (B) to--
                            ``(i) pay the reasonable costs of 
                        administration of the programs under this 
                        section, including the recovery of reasonable 
                        costs incurred in establishing a State loan 
                        fund;
                            ``(ii) provide appropriate oversight of 
                        projects authorized under this section; and
                            ``(iii) provide technical assistance and 
                        outreach to recipients in the State of amounts 
                        under this section, including with respect to 
                        updating hazard mitigation plans and 
                        participating in the Community Rating System, 
                        in an amount that is not more than 4 percent of 
                        the funds made available to the State under 
                        this section.
                    ``(B) Description.--The amount described in this 
                subparagraph is an amount equal to the sum of--
                            ``(i) any fees collected by a participating 
                        State to recover the costs described in 
                        subparagraph (A)(i), regardless of the source; 
                        and
                            ``(ii) the greatest of--
                                    ``(I) $400,000;
                                    ``(II) 0.2 percent of the value of 
                                the State loan fund of a State, as of 
                                the date on which the valuation is 
                                made; and
                                    ``(III) an amount equal to 7 
                                percent of all grant awards made to a 
                                participating State for the State loan 
                                fund of the State under this section 
                                for the fiscal year.
            ``(3) Audit and report.--
                    ``(A) Audit requirement.--Not less frequently than 
                biennially, each participating State shall conduct an 
                audit of the State loan fund of the State.
                    ``(B) Report.--Each participating State shall 
                submit to the Administrator a biennial report regarding 
                the activities of the State under this section during 
                the period covered by the report, including--
                            ``(i) the result of any audit conducted by 
                        the State under subparagraph (A); and
                            ``(ii) a review of the effectiveness of the 
                        State loan fund of the State with respect to--
                                    ``(I) the intended use plans of the 
                                State; and
                                    ``(II) meeting the objectives 
                                described in subsection (b)(1).
            ``(4) Oversight.--In conducting oversight with respect to 
        State loan funds established under this section, the 
        Administrator--
                    ``(A) shall--
                            ``(i) periodically audit the funds in 
                        accordance with procedures established by the 
                        Comptroller General of the United States; and
                            ``(ii) not less frequently than once every 
                        4 years, review each State loan fund to 
                        determine the effectiveness of the fund in 
                        reducing flood risk; and
                    ``(B) may, at any time--
                            ``(i) make recommendations to a 
                        participating State with respect to the 
                        administration of the State loan fund of the 
                        State; or
                            ``(ii) require specific changes with 
                        respect to a State loan fund in order to 
                        improve the effectiveness of the fund.
    ``(j) Liability Protections.--The Federal Emergency Management 
Agency shall not be liable for any claim based on the exercise or 
performance of, or the failure to exercise or perform, a discretionary 
function or duty by the Agency, or an employee of the Agency, in 
carrying out this section.
    ``(k) Regulations.--The Administrator shall promulgate such 
guidance or regulations as may be necessary to carry out this section, 
including guidance or regulations that--
            ``(1) ensure that each participating State to which funds 
        are allocated under this section uses the funds as efficiently 
        as possible;
            ``(2) reduce, to the maximum extent practicable, waste, 
        fraud, and abuse with respect to the implementation of this 
        section; and
            ``(3) require any party that receives funds directly or 
        indirectly under this section, including a participating State 
        and a recipient of amounts from a State loan fund, to use 
        procedures with respect to the management of the funds that 
        conform to generally accepted accounting standards.
    ``(l) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section 
for fiscal years 2020 through 2029.''.
    (b) Consideration of Mitigation Measures Funded by State Loan Funds 
in Flood Insurance Premium Rates.--
            (1) Estimated rates.--Section 1307(a)(1)(A)(ii) of the 
        National Flood Insurance Act of 1968 (42 U.S.C. 
        4014(a)(1)(A)(ii)) is amended by striking ``and similar 
        measures'' and inserting ``similar measures, and any activities 
        funded through amounts from a State loan fund established under 
        section 1326,''.
            (2) Chargeable rates.--Section 1308(b)(1) of the National 
        Flood Insurance Act of 1968 (42 U.S.C. 4015(b)(1)) is amended 
        by striking ``and similar measures'' and inserting ``similar 
        measures, and any activities funded through amounts from a 
        State loan fund established under section 1326''.
                                 <all>