An Act to provide insurance against flood damage, and for other purposes
PL 84-1016 (S.3732), enacted 08/07/1956

1078 
PUBLIC LAW 1016-AUG. 7, 1956 
[70 STAT. 
Public Law 1016 
CHAPTER 1025 
AN ACT 
August 7, 1956 
[S. 3732] 
To provide Insurance against flood damage, and for other purposes. 
Federal 
F l o o d 
Insurance Act of 
Be it enacted hy the Senate and House of Representatives 
of the 
^__^ „^. w. United States of America in Congress assembled^ That this Act may 
r9°s6."*"'° "~' -' i^g pjj-g^ j^g ^jjg "Federal Flood Insurance Act of 1956". 
FINDINGS AND DECLARATION OF PURPOSE 
SEC. 2. (a) The Congress finds that in the case of recurring natural 
disasters, including recurring floods, insurance protection against 
individual and public loss is not always practically available through 
private or public sources. With specific reference to insurance against 
flood loss, the Congress finds that insurance against certain losses 
resulting from this peril is not so available. 
Since preventive and 
protective means and structures against the effects of these disasters 
can never wholly anticipate the geographic incidence and infinite 
variety of the destructive aspects of these forces, the Congress finds 
that the safeguards of insurance are a necessary adjunct of preventive 
and protective means and structures. 
Inasmuch as these disasters impede interstate and foreign com-
merce, hamper national defense, and cause widespread distress and 
hardship adversely affecting the general welfare, without regard to 
State boundary lines, and in the absence of insurance protection from 
private or public sources, the Congress ought to provide for such 
protection in the case of flood, and study the feasibility and need for 
similar programs in the case of other forms of natural disaster 
against which insurance protection is not generally and practically 
available in all geographical areas. 
(b) (1) It is the purpose of this Act to authorize the establish-
ment of a program of Federal insurance and reinsurance against the 
risks of loss resulting from flood as hereinafter defined, and to require 
a study and report on insurance and reinsurance against still other 
natural disaster perils to the extent that such insurance or reinsur-
ance is not available on reasonable terms and conditions from other 
public or private sources; and 
(2) It is the further purpose of this Act to encourage private 
insurance companies to write insurance covering the extent of the 
risks above the limits prescribed in section 10 (a) and to provide 
Federal reinsurance to the extent desirable and necessary to carry out 
this purpose. 
(3) It is the further purpose of this Act to authorize the establish-
ment of a program of loans, and a program combining insurance 
and loans, to assist flood victims who have entered into contracts 
with the Administrator under this Act. 
ADMINISTRATION 
SEC. 3. (a) To assist in carrying out the functions, powers, and 
duties vested in him by this Act, the Administrator may appoint a 
Commissioner, and the basic rate of compensation of such position 
shall be the same as the basic rate of compensation established for the 
Commissioners of the constituents of the Housing and Home Finance 
Agency. 
M usc*84i note. 
C^) ^^^ provisious of the Government Corporation Control Act, 
as amended, shall apply to the functions vested in the Administrator 
by this Act, to the same extent as applicable to wholly owned Govern-
ment corporations. 
70 S T A T . ] 
PUBLIC LAW 1016-AUG. 7, 1956 
1079 
(c) In the performance of, and with respect to, the functions, 
powers, and duties vested in him by this Act, the Administrator, not-
withstanding the provisions of any other law, shall maintain an 
integral set of accounts which shall be audited annually by the General 
Accounting Office in accordance with the principles and procedures 
applicable to commercial transactions as provided by the Govern-
ment Corporation Control Act, as amended, and no other audit shall 
31 use 841 note, 
be required: Provided^ That such financial transactions of the Admin-
istrator as the issuing of insurance policies, the making of reinsurance 
agreements, and the making and guaranteeing of loans, and vouchers 
approved by the Administrator in connection with such financial 
transactions, shall be final and conclusive upon all officers of the 
Government. 
AUTHORITY TO INSURE AND REINSURE 
SEC. 4. To aid in carrying out the purposes of this Act, the Admin-
istrator is authorized to provide, upon such terms and conditions (in-
cluding coinsurance requirements) as he may establish, insurance and 
reinsurance against loss resulting from damage to or destruction of 
real or personal property (including property owned by any State or 
local government) due to flood, as hereinafter defined, occurring 
within the United States: Provided^ That insurance policies issued 
under this Act after June 30,1959, shall be issued only with respect to 
property in those States which participate as provided in section 7 ( a ) 
of this Act. 
LOAN CONTRACTS 
SEC. 5. (a) The Administrator is authorized to enter into contracts 
with any persons (not including State and local governments and 
agencies thereof) to the effect that, in the event of any subsequent loss 
resulting from damage to or destruction of real and personal property 
due to flood, as hereinafter defined, occurring within the United 
States— 
(1) the Administrator will guarantee any public or private 
financing institution against loss of principal and interest with 
respect to any loan in an amount not to exceed such subsequent 
flood loss (as modified by subsection (f) of this section, relating 
to deductibility), which may be made by such institution to any 
such person in connection with such flood loss; and 
(2) to the extent that a loan to finance such flood loss is not 
available from any such institution on reasonable terms, the Ad-
ministrator will make a loan directly to such person in an amount 
covering all or part (as provided for in the loan contract between 
the Administrator and such person) of the difference between the 
amount of such flood loss (as modified by such subsection (f), re-
lating to deductibility) and the amount of the loan available from 
such institution. 
Each such contract shall contain such terms and conditions and require 
from any such person such monetary consideration, as the Adminis-
trator may prescribe by regulation. In issuing such regulations the 
Administrator shall fix such monetary consideration at the lowest 
practicable amount, following generally the same principles as apply 
under section 7 (a) with respect to the establishment of fees for 
insurance. 
(b) Any loan made or guaranteed under this section shall bear 
interest at the rate, as determined by the Administrator, which is pre-
vailing in the area where the money loaned is to be used but such rate 
shall not exceed 4 per centum per annum on the unpaid principal 
balance. 
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PUBLIC LAW 1016-AUG. 7, 1956 
[70 STAT. 
(c) Any Federal Reserve bank, when designated by the Administra-
tor, is hereby authorized to act, on behalf of the Administrator, as 
fiscal agent of the United States in guaranteeing loans under this sec-
tion and in otherwise taking action in connection with such guarantees. 
Such funds as may be necessary to enable such bank to carry out any 
such guarantee shall be supplied and disbursed by or under authority 
of the Administrator from the Disaster Loan Fund. 
Such bank shall 
not have any responsibility or accountability except as agent in taking 
any action in connection with such guarantees. 
Each such bank shall 
be reimbursed by the Administrator, from funds appropriated by the 
Federal Government, for all expenses incurred by the bank in acting 
as agent on behalf of the Administrator, including among such ex-
penses, notwithstanding any other provision of law, attorneys' fees 
and expenses of litigation. 
(d) Actions and operations of such banks under authority of sub-
section (c) of this section shall be subject to the supervision of the 
Administrator and subject to such regulations as he may prescribe. 
The Administrator is authorized to prescribe the term and incidental 
charges for loans guaranteed under subsection (c) of this section. 
The Administrator is further authorized to prescribe regulations with 
respect to the forms and procedures (which shall be uniform to the 
maximum extent practicable) to be utilized in connection with such 
guarantees. 
(e) To the maximum extent practicable, loans under this section 
shall be on a long-term basis in accordance with regulations prescribed 
by the Administrator, if so requested by the person obtaining the loan. 
(f) Loans under this section shall be made only with respect to 
amounts exceeding the first $500 of the amount of the loss. 
(g) The face amount of all loan contracts outstanding under this 
section at any one time shall not exceed $2,000,000,000; but such 
amount may be increased, with the approval of the President, by not 
to exceed $500,000,000 in any one fiscal year. 
(h) The provisions of sections 8, 9, 10 (a), 10 (b), 12 (b), 12 (c), 
13, 14, 15 (e), 15 (g), 17 (a), 18, 19, 20, 22, and 23 of this Act shall 
be applicable with respect to the loan contract program under this 
section. 
COMBINATION OF INSURANCE AND LOANS 
.ii 
SEC. 6. The Administrator is authorized to establish, under such 
regulations as he may prescribe, a program combining insurance and 
loans in order to provide the greatest variety and amount of protec-
tion against loss to the greatest number of alfected parties in accord-
ance with individual needs. 
ESTIMATED RATES AND FEES 
SEC. 7. (a) The Administrator shall from time to time establish a 
schedule of "estimated rates" for insurance offered under the pro-
visions of this Act, which would be adequate, in his judgment, to 
produce sufficient proceeds to pay all claims for prcb.ible losses over 
a reasonable period of years. 
Such "estimated rates" shall be used 
as a basis for determining the fees to be paid by the persons insured. 
They shall be based on consideration of the risks involved and shall 
be uniform for similar risks within a given classification of property. 
They shall not include any loading for administrative expenses of 
the Federal Government under this Act. 
The iVdministrator shall 
establish a schedule of fees to provide insurance protection at reason-
able costs designed to achieve marketability: Provided^ That no in-
surance policy shall be issued for a fee less than C
O per centum of 
such "estimated rate". The Administrator is authorized to establish 
70 S T A T . ] 
PUBLIC LAW 1016-AUG. 7, 1956 
1081 
such classifications of fees as he deems necessary to carry out the 
purposes of this Act based on the use of the property to be insured, 
the availability of insurance from private sources covering such prop-
erty, and the ability of the insured to self-insure or reinsure and may 
establish differentials in levels of fees for such classifications: Pro-
vided^ That all such fees shall be uniform for similar risks within a 
given classification of property. 
Prior to July 1, 1959, the Admin-
istrator shall pay into the Disaster Insurance Fund, hereinafter 
created, from time to time, an amount equal to the dilference between 
the fees charged for insurance policies issued and the amount which 
would have been charged if the "estimated rates" were applied: Pro-
vided^ That after June 30, 1959, each State shall pay from time to 
time into the Disaster Insurance Fund, an amount equal to one-half 
the difference between the fees charged for insurance policies issued 
after such date on property in such State, and the amount Avhich would 
have been charged if the "estimated rates" were applied, and the 
Administrator shall pay into such Fund, from time to time, an amount 
equal to the State's contribution for each policy issued, 
(b) The Administrator from time to time shall also negotiate v,'ith 
insurance companies seeking reinsurance for the purpose of establish-
ing fees for reinsurance offered under the provisions of this Act. Such 
fees shall be based on consideration of the risks involved and shall be 
adequate, in the judgment of the Administrator, to produce sufficient 
proceeds over a reasonable period of years to pay all claims for losses. 
The fees shall not include any loading for administrative expenses of 
the Federal Government under this Act. 
PROPERTY AND LOSS LIMITS 
SEC. 8. The Administrator is authorized to provide for the deter-
mination of types and location of property with respect to which in-
surance or reinsurance shall be made available under this Act, the 
nature and limits of loss or damage in any area (including sub-
divisions thereof) which may be covered by such insurance or rein-
surance, and such other matters as may be necessary to carry out the 
purposes of this Act. 
RISK CLASSIFICATION 
SEC. 9. The Administrator may from time to time issue appropriate 
regulations regarding the classification, limitation, and rejection of 
risks assumed by him under authority of this Act. 
POLICY AND PROGRAM LIMITS 
SEC. 10. (a) The outstanding face amount of insurance issued by 
the Administrator under this Act shall not exceed $250,000 per per-
son : Provided^ That the face amount of such insurance on any dwell-
ing unit (including any structures and personal property connected 
therewith) shall not exceed $10,000. 
(b) The Administrator may from time to time issue appropriate 
regulations regarding insurance coverage available to joint owners 
and subsidiary and affiliated corporations as he shall deem advisable 
to effectuate the purposes of this Act. 
(c) Each insurance policy issued by the Administrator shall con-
tain a loss-deductible clause relieving him from any liability for pay-
ing the first $100 of a proved and approved claim for loss, plus 5 per 
centum of the remainder, or such larger amount or percentage as may 
be specified by the Administrator upon issuance of the insurance 
policy, taking into consideration the class of risk involved. 
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PUBLIC LAW 1016-AUG. 7, 1956 
[70 STAT. 
(d) The face amount of insurance policies and reinsurance agree-
ments outstanding at any one time under this Act shall not exceed 
$3,000,000,000 (which limit may be increased with the approval of the 
President by further amounts not to exceed $2,000,000,000 in the 
aggregate if such increase is deemed advisable to effectuate the pur-
poses of this Act) minus the aggregate amount of claims proved and 
approved under insurance policies and reinsurance agreements issued 
under this Act, but plus fees collected hereunder. For the purpose of 
applying this limitation, the face amount of any policy or agreement 
shall be deemed to be the original amount minus claims proved and 
approved thereunder. 
REINSURANCE REGULATORY 
AUTHORITY 
SEC. 11. (a) The Administrator is authorized to issue such regula-
tions regarding reinsurance under this Act as he deems advisable in 
order to carry out the purposes of this Act. 
(b) The premium rate and terms and conditions of any policy 
reinsured under the provisions of this Act shall be subject to approval 
by the Administrator. 
(c) The Administrator shall use his best efforts to encourage private 
insurance companies to undertake the issuance of insurance policies 
covering that portion of the loss in excess of the limits specified in 
section 10 (a) of this Act resulting from damage to or destruction of 
real or personal property due to flood as defined in this Act. 
The 
Administrator may seek to achieve this end by offering a program of 
appropriate reinsurance within the authority granted him by this 
Act. 
(d) Wherever practicable, the Administrator may encourage, by 
offering suitable reinsurance subject to the provisions of this Act, 
the issuance by private insurance companies of policies insuring 
against loss resulting from damage to or destruction of real or per-
sonal property due to flood. 
NONDUPLICATION OF AVAILABLE 
INSURANCE 
SEC. 12. (a) No insurance or reinsurance, or loan contract, shall be 
issued under the provisions of this Act covering risks against w^hich 
insurance is available on reasonable terms from other public or private 
sources. 
(b) No insurance or reinsurance shall be issued under the provisions 
of this Act on any property declared by a duly constituted State or 
local zoning authority, or other authorized public body, to be in vio-
lation of State or local flood zoning laws. 
(c) After June 30, 1958, no insurance or reinsurance shall be issued 
under the provisions of this Act in any geographical location unless 
an appropriate public body shall have adopted and shall keep in 
effect such flood zoning restrictions, if any, as may be deemed neces-
sary by the Administrator to reduce, within practicable limits, dam-
ages from flood in such location. 
USE OF O T H E R P U B L I C AND PRIVATE FACILITIES 
SEC. 13. (a) In providing insurance or reinsurance under this Act, 
the Administrator shall use to the maximum practicable extent the 
facilities and services of private organizations and persons authorized 
to engage in the insurance business under the laws of any State 
(including insurance companies, agents, brokers, and adjustment 
organizations) ; and the Administrator may arrange for payment of 
reasonable compensation therefor. 
70 S T A T . ] 
PUBLIC LAW 1016-AUG. 7, 1956 
1083 
(b) In providing insurance or reinsurance under this Act, the 
Administrator may use the services of other public agencies, and pay 
reasonable compensation therefor. 
(c) The Administrator may supply, receive from and exchange 
with other agencies of the Federal Government, State, local, and 
interstate commissions or agencies, and private organizations experi-
enced in the fields of insurance or reinsurance, such information as 
may be useful in the administration of the programs authorized by 
this Act. 
(d) In carrying out the functions authorized in this Act, the Admin-
istrator may consult with other agencies of the Federal Government 
and interstate, State, and local public agencies having responsibilities 
for land use and flood control and for flood zoning and flood-damage 
prevention in order to assure that the insurance and reinsurance pro-
grams are consistent with the programs of such agencies. 
Where 
the program of the Administrator may affect existmg or proposed 
flood-control works under the jurisdiction of agencies of the Federal 
Government these agencies shall cooperate with the Administrator 
in coordinating their respective programs. 
The Secretary of Agri-
culture and the Administrator shall coordinate the administration of 
their respective programs relating to flood insurance and reinsurance 
for agricultural commodities. 
(e) The Administrator may from time to time consult with repre-
sentatives of the various States to the extent deemed necessary by him 
to effectuate the purposes of this Act. 
CLAIMS PAYMENT AND JUDICIAL REVIEW 
SEC. 14. (a) Under such regulations as the Administrator may pre-
scribe, he shall arrange for prompt adjustment and payment of valid 
claims for losses covered by insurance or reinsurance under this Act. 
(b) Upon disallowance of any claim against the Administrator 
under color of any insurance or reinsurance made available under this 
Act, or upon refusal of the claimant to accept the amount allowed 
upon any such claim, the claimant may institute an action against the 
Administrator on such claim in the United States district court in 
which a major portion (in terms of value) of the insured property is 
located. 
Any such action must be begun within one year after the date 
upon which the claimant receives from the Administrator written 
notice of disallowance or partial disallowance of the claim. 
For the 
purposes of this section, the Administrator may be sued and he shall 
appoint one or more agents within the jurisdiction of each United 
States district court upon whom service of process can be made in any 
action instituted under this section. Exclusive jurisdiction is hereby 
conferred upon all United States district courts to hear and determine 
such actions without regard to the amount in controversy. 
FUNDS AND TREASURY BORROWINGS 
SEC. 15. (a) To carry out the purposes of this Act, the Administrator 
is authorized to establish three funds to be known as the (1) Disaster 
Insurance Fund, (2) Disaster Reinsurance Fund, and (3) Disaster 
Loan Fund. 
(b) Into the Disaster Insurance Fund shall be deposited all insur-
ance fees collected by the Administrator for insurance policies issued 
by him under this Act, and the contributions made by the Administra-
tor and the respective States in accordance with section 7 (a) of this 
Act. 
Into the Disaster Reinsurance Fund shall be deposited all fees 
collected by the Administrator in connection with reinsurance made 
available by him under this Act. 
Into the Disaster I»an Fund shall 
Disaster Funds. 
Deposits. 
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PUBLIC LAW 1016-AUG. 7, 1956 
[70 ST A T . 
Investments. 
S a l v a g e 
ceeds. 
p r o -
I s s u a n c e 
notes. 
of 
40 Stat. 288. 
31 u s e 774. 
Use of money s i n 
Funds. 
be deposited amounts accruing t.o the United States in connection with 
loan contract transactions. 
(c) Moneys in each of the funds may be invested in obligations of 
the United States or in obligations guaranteed as to principal and 
interest by the United States. 
Such obligations may be sold and the 
proceeds derived therefrom may be reinvested as above provided if 
deemed advisable by the Administrator. 
Income from such invest-
ment or reinvestment shall be deposited in the respective fund from 
which the investment was made. 
(d) All salvage proceeds realized by the Administrator in connec-
tion with insurance made available under this Act shall be deposited 
in the Disaster Insurance Fund; and all salvage proceeds realized by 
the Administrator in connection with reinsurance made available 
under this Act shall be deposited in the Disaster Reinsurance Fund. 
(e) The Administrator is authorized to issue to the Secretary of the 
Treasury from time to time and have outstanding at any one time, in 
an amount not exceeding $500,000,000 (or such greater amount as may 
be approved by the President) notes or other obligations in such forms 
and denominations, bearing such maturities, and subject to such terms 
and conditions as may be prescribed by the Administrator, with the 
approval of the Secretary of the Treasury. 
Such notes or other obli-
gations shall bear interest at a rate determined by the Secretary of the 
Treasury, taking into consideration the current average rate on out-
standing marketable obligations of the United States of comparable 
maturities as of the last day of the month preceding the issuance of 
such notes or other obligations. 
The Secretary of the Treasury is 
authorized and directed to purchase any notes and other obligations to 
be issued hereunder and for such purpose he is authorized to use as a 
public debt transaction the proceeds from the sale of any securities 
issued under the Second Liberty Bond Act, as amended, and the pur-
poses for which securities may be issued under such Act, as amended, 
are extended to include any purchases of such notes and obligations. 
The Secretary of the Treasury may at any time sell any of the notes 
or other obligations acquired by him under this section. 
All redemp-
tions, purchases, and sales by the Secretary of the Treasury of such 
notes or other obligations shall be treated as public debt transactions 
of the United States. 
Funds borrowed under this section shall be 
deposited, in such proportions as the Administrator deems advisable, 
in the Disaster Insurance Fund, the Disaster Reinsurance Fund, and 
the Disaster Loan Fund. 
(f) Moneys in the Disaster Insurance Fund, the Disaster Reinsur-
ance Fund, and the Disaster Loan Fund may be used for the following 
purposes as deemed necessary by the Administrator: 
(1) To pay from the Disaster Insurance Fund proved and ap-
proved claims for loss under, and other nonadministrative expenses 
arising in connection with, insurance policies issued by the Admin-
istrator under this Act; 
(2) To pay from the Disaster Reinsurance Fund proved and ap-
proved claims under, and other nonadministrative expenses arising 
in connection with, reinsurance agreements entered into by the Admin-
istrator under this Act; 
(3) To pay from the Disaster Loan Fund the amounts of loans 
made by the Administrator, amounts in payment of guarantees, and 
other nonadministrative expenses in connection with direct and 
guaranteed loans under this Act; and 
(4) To repay to the Secretary of the Treasury sums borrowed from 
him in accordance with the provisions of subsection (e) of this section. 
(g) All administrative expenses of the Federal Government under 
this Act shall be paid from funds appropriated by the Federal 
Government. 
70 S T A T . ] 
PUBLIC LAW 1 0 1 6 - A U G . 7, 1956 
1085 
ADVISORY COMMITTEE 
SEC. 16. In carrying out his functions under this Act, the Admin-
istrator shall appoint an advisory committee as authorized by section 
601 of the Housing Act of 1949, as amended (68 Stat. 590, 645). 
12 use ivoih. 
Such committee shall consist of not less than three nor more than 
fifteen persons familiar with the problems of insurance or reinsurance, 
to advise the Administrator with respect to the formulation of policies 
and the execution of functions under this Act. 
STUDIES 
SEC. 17. (a) The Administrator shall undertake a continuing study 
of the practicability of extending the coverage of insurance programs 
similar to those authorized under this Act to any one or more natural 
disaster perils, other than flood, against which, and for the period 
during wiiich, insurance protection is not generally and practically 
available in all geographical locations from other public or private 
sources. 
(b) The Administrator shall also undertake a continuing study of 
participation by private insurance companies in the programs author-
ized by this Act, in order that the protection it authorizes can be pro-
vided, whenever practicable, through insurance policies issued by 
private insurance companies and reinsured with the Administrator, 
in lieu of providing such protection through insurance policies issued 
in the name of the Administrator. 
(c) The Administrator shall undertake a continuing study of the 
feasibility of having private insurance companies take over, with or 
without some form of Federal financial support, the insurance pro-
grams authorized by this Act. 
ADDITIONAL FUNCTIONS 
SEC. 18. For the purpose of carrying out functions under this Act 
the Administrator may— 
(a) sue or be sued; 
(b) without regard to sections 3648 and 3709 of the Revised 
Statutes, as amended (31 U. S. C. 529 and 41 U. S. C. 5), and 
section 322 of the Act of June 30, 1932 (47 Stat. 412, as amended 
(40 U. S. C. 278a)), enter into and perform contracts, leases, 
cooperative agreements, or other transactions, on such terms as 
he may deem appropriate, with any agency or instrumentality of 
the United States, or with any State or agency or political sub-
division thereof, or with any person, firm, association, or corpora-
tion and consent to modification thereof, and make advance or 
progress payments in connection therewith; 
(c) without regard to sections 3648 and 3709 of the Revised 
Statutes, as amended (31U. S. C. 529 and 41U. S. C. 5), and section 
322 of the Act of June 30, 1932 (47 Stat. 412, as amended (40 
U. S. C. 278a)), by purchase, lease, or donation acquire such real 
and personal property and any interest therein, make advance or 
progress payments in connection therewith, and hold, use, main-
tain, insure against loss, sell, lease, or otherwise dispose of such 
real and personal property as the Administrator deems necessary 
to carry out the purposes of this Act; 
(d) appoint, pursuant to civil-service laws and regulations, 
such officers, attorneys, and employees as may be necessary to carry 
out the purposes of this Act; fix their compensation in accordance 
with the provisions of the Classification Act of 1949, as amended; 
f uicfVoyi note 
define their authority and duties; provide bonds for such of them 
as he may deem necessary; and delegate to them, and authorize 
successive redelegations by them, of such of the powers vested in 
him by this Act as he may determine; 
1086 
PUBLIC LAW 1016-AUG. 7, 1956 
[70 STAT. 
(e) conduct researches, surveys, and investigations relating to 
flood insurance and reinsurance and assemble data for the purpose 
of establishing estimated rates, fees, and premiums for flood insur-
ance and reinsurance under this Act; 
(f) issue such rules and regulations as he deems necessary to 
carry out the purposes of this Act; and 
(g) exercise all powers specifically granted by the provisions 
of this Act and such incidental powers as are necessary to carry 
out the purposes of this Act. 
RESERVATION OF RIGHTS I N REAL ESTATE ACQUIRED 
SEC. 19. The acquisition by the Administrator of any real property 
pursuant to this Act shall not deprive any State or political sub-
division thereof of its civil or criminal jurisdiction in and over such 
property or impair the civil rights under the State or local law of the 
inhabitants on such property. 
TAXATION 
SEC. 20. Nothing in this Act shall be construed to exempt any real 
property, acquired and held by the Administrator in connection with 
the payment of any claim under this Act, from taxation by any State 
or political subdivision thereof, to the same extent, according to its 
value, as other real property is taxed. 
ANNUAL REPORT 
SEC. 21. The annual report made by the Administrator to the Presi-
dent for submission to the Congress under existing law on all programs 
provided for under this Act shall contain a comprehensive report con-
cerning (1) the operation of insurance, reinsurance, and loan programs 
authorized under this Act, and (2) the status and result of studies 
authorized under section 17 of this Act, together with such recom-
mendations, if any, for legislative changes deemed by the xldministra-
tor desirable to improve the operation of programs authorized under 
this Act. 
The annual report for the calendar year ending December 
31, 1958, shall contain a list of the States which can be expected to 
participate in the insurance program authorized by this Act after June 
30, 1959. The annual report for the calendar year ending Decembsr 
31, 1961, shall contain an express opinion of the Administrator, sup-
ported by pertinent findings, concerning the advisability of withdraw-
ing in whole or in part Federal financial support for insurance policies 
to be issued at any time after June 30, 1962, offering protection as 
authorized in this Act, taking into consideration the desirability of 
offering such protection. 
Such opinion shall be accompanied by 
recommendations for legislative changes deemed desirable by the 
Administrator in the event the opinion is to the effect that any such 
withdrawal of financial support is advisable. 
DEFINITIONS 
SEC. 22. As used in this Act the term— 
(a) "Flood" includes any flood, tidal wave, w^ave wash, or other 
abnormally high tidal water, deluge, or the water component of any 
hurricane or other severe storm, surface landslide due to excess mois-
ture, and shall have such other meaning as may be prescribed by regu-
lation of the Administrator. 
(b) "Person" means an individual or group of individuals, corpora-
tion, partnership, association, or any other organized group of per-
sons, including State and local governments and agencies thereof; 
70 
S T A T . ] 
PUBUC LAW 1017-AUG. 7, 1956 
1087 
(c) "United States", when used in a geographic sense, means tlie 
several States, the District of Columbia, the Territories, the posses-
sions, and the Commonwealth of Puerto Rico; 
(d) "State" includes the several States, the District of Columbia, the 
Territories, the possessions, and the Commonwealth of Puerto Rico; 
and 
(e) "Administrator" means the Housing and Home Finance Ad-
ministrator. 
SEPARABILITY PROVISION 
SEC. 23. If any provision of this Act or the application of such pro-
vision to any person or circumstances shall be held invalid, the re-
mainder of the Act and the application of such provision to any person 
or circumstance other than those as to which it is held invalid shall 
not be affected thereby. 
Approved August 7, 1956. 
Public Law 1017 
CHAPTER 1026 
AN ACT 
To amend certain provisions of title XI of the Merchant Marine Act, 1936, as 
amended, to facilitate private financing of merchant vessels in the interest of 
national defense, and for other purposes. 
August 7, 1956 
[H. R. 11554] 
Be it enacted iy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That title X I of 
the Merchant Marine Act, 1936, as amended (46 U. S. C. 1271-1279), 
is amended as follows: 
(a) Sections 1101 (f) andll03 (a),and (b), are amended by striking 
out the words "90 per centum of" wherever those words appear in such 
sections. 
(b) Section 1101 (f) is amended by striking out of the proviso the 
words "except for certain special-purpose vessels as provided for in 
subsections (a) and (b) of section 1103 (46 U. S. C. 1273)" and the 
commas which immediately precede and follow those words. 
(c) Section 1103 (a) and (b) are amended by striking out the 
provisos. 
(d) Section 1103 (d) is amended to read as follows: "(d) The faith 
of the United States is solemnly pledged to the payment of interest on 
and the unpaid balance of the principal amount of each mortgage and 
loan insured under this title." 
(e) Section 1105 (a) (1) and (a) (2) are amended by striking out 
the words "the insured portion of" wherever such words appear in 
those sections. 
(f) The last sentence of section 1105 (c) (1) is amended to read as 
follows: "In the event the Secretary of Commerce shall receive through 
the sale of the vessel an amount of cash in excess of any payment made 
to the mortgagee under subsection (a) (1) of this section, and the 
expenses of collection of such amount, he shall pay such excess to 
the borrower." 
(g) The last sentence of section 1105 (c) (2) is amended to read as 
follows: "In the event the Secretary of Commerce shall receive 
through the sale of the property an amount of cash in excess of any 
payment made to the lender under subsection (a) (2) of this section 
and the expenses of collection of such amount, he shall pay such excess 
to the borrower." 
Approved August 7, 1956. 
M e r c h a nt ve s-
sels. 
P r i v a t e financ-
ing. 
68 Stat. 1267.