House Report 112-102 - FLOOD INSURANCE REFORM ACT OF 2011

[House Report 112-102]
[From the U.S. Government Publishing Office]

112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-102

======================================================================

FLOOD INSURANCE REFORM ACT OF 2011

_______

June 9, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Bachus, from the Committee on Financial Services,
submitted the following

R E P O R T

[To accompany H.R. 1309]

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred
the bill (H.R. 1309) to extend the authorization of the
national flood insurance program, to achieve reforms to improve
the financial integrity and stability of the program, and to
increase the role of private markets in the management of flood
insurance risk, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Flood Insurance
Reform Act of 2011''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Extensions.
Sec. 3. Mandatory purchase.
Sec. 4. Reforms of coverage terms.
Sec. 5. Reforms of premium rates.
Sec. 6. Technical Mapping Advisory Council.
Sec. 7. FEMA incorporation of new mapping protocols.
Sec. 8. Treatment of levees.
Sec. 9. Privatization initiatives.
Sec. 10. FEMA annual report on insurance program.
Sec. 11. Actuarial rates for severe repetitive loss properties refusing
mitigation or purchase offers.
Sec. 12. Mitigation assistance.
Sec. 13. Grants for direct funding of mitigation activities for
individual repetitive claims properties.
Sec. 14. Notification to homeowners regarding mandatory purchase
requirement applicability and rate phase-ins.
Sec. 15. Notification of establishment of flood elevations.
Sec. 16. Notification to tenants of availability of contents insurance.
Sec. 17. Notification to policy holders regarding direct management of
policy by FEMA.
Sec. 18. Notice of availability of flood insurance and escrow in RESPA
good faith estimate.
Sec. 19. Reimbursement for costs incurred by homeowners obtaining
letters of map amendment.
Sec. 20. Treatment of swimming pool enclosures outside of hurricane
season.
Sec. 21. CDBG eligibility for flood insurance outreach activities and
community building code administration grants.
Sec. 22. Technical corrections.
Sec. 23. Report on Write-Your-Own Program.
Sec. 24. Studies of voluntary community-based flood insurance options.
Sec. 25. Report on inclusion of building codes in floodplain management
criteria.
Sec. 26. Study on graduated risk.
Sec. 27. No cause of action.

SEC. 2. EXTENSIONS.

(a) Extension of Program.--Section 1319 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking
``September 30, 2011'' and inserting ``September 30, 2016''.
(b) Extension of Financing.--Section 1309(a) of such Act (42 U.S.C.
4016(a)) is amended by striking ``September 30, 2011'' and inserting
``September 30, 2016''.

SEC. 3. MANDATORY PURCHASE.

(a) Authority To Temporarily Suspend Mandatory Purchase
Requirement.--
(1) In general.--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:
``(i) Authority To Temporarily Suspend Mandatory Purchase
Requirement.--
``(1) Finding by administrator that area is an eligible
area.--For any area, upon a request submitted to the
Administrator by a local government authority having
jurisdiction over any portion of the area, the Administrator
shall make a finding of whether the area is an eligible area
under paragraph (3). If the Administrator finds that such area
is an eligible area, the Administrator shall, in the discretion
of the Administrator, designate a period during which such
finding shall be effective, which shall not be longer in
duration than 12 months.
``(2) Suspension of mandatory purchase requirement.--If the
Administrator makes a finding under paragraph (1) that an area
is an eligible area under paragraph (3), during the period
specified in the finding, the designation of such eligible area
as an area having special flood hazards shall not be effective
for purposes of subsection (a), (b), and (e) of this section,
and section 202(a) of this Act. Nothing in this paragraph may
be construed to prevent any lender, servicer, regulated lending
institution, Federal agency lender, the Federal National
Mortgage Association, or the Federal Home Loan Mortgage
Corporation, at the discretion of such entity, from requiring
the purchase of flood insurance coverage in connection with the
making, increasing, extending, or renewing of a loan secured by
improved real estate or a mobile home located or to be located
in such eligible area during such period or a lender or
servicer from purchasing coverage on behalf of a borrower
pursuant to subsection (e).
``(3) Eligible areas.--An eligible area under this paragraph
is an area that is designated or will, pursuant to any
issuance, revision, updating, or other change in flood
insurance maps that takes effect on or after the date of the
enactment of the Flood Insurance Reform Act of 2011, become
designated as an area having special flood hazards and that
meets any one of the following 3 requirements:
``(A) Areas with no history of special flood
hazards.--The area does not include any area that has
ever previously been designated as an area having
special flood hazards.
``(B) Areas with flood protection systems under
improvements.--The area was intended to be protected by
a flood protection system--
``(i) that has been decertified, or is
required to be certified, as providing
protection for the 100-year frequency flood
standard;
``(ii) that is being improved, constructed,
or reconstructed; and
``(iii) for which the Administrator has
determined measurable progress toward
completion of such improvement, construction,
reconstruction is being made and toward
securing financial commitments sufficient to
fund such completion.
``(C) Areas for which appeal has been filed.--An area
for which a community has appealed--
``(i) designation of the area as having
special flood hazards in a timely manner under
section 1363; or
``(ii) any decertification or deaccreditation
of a dam, levee, or other flood protection
system or the level of protection afforded by a
dam, levee, or system.
``(4) Extension of delay.--Upon a request submitted by a
local government authority having jurisdiction over any portion
of the eligible area, the Administrator may extend the period
during which a finding under paragraph (1) shall be effective,
except that--
``(A) each such extension under this paragraph shall
not be for a period exceeding 12 months; and
``(B) for any area, the cumulative number of such
extensions may not exceed 2.
``(5) Rule of construction.--Nothing in this subsection may
be construed to affect the applicability of a designation of
any area as an area having special flood hazards for purposes
of the availability of flood insurance coverage, criteria for
land management and use, notification of flood hazards,
eligibility for mitigation assistance, or any other purpose or
provision not specifically referred to in paragraph (2).
``(6) Reports.--The Administrator shall, in each annual
report submitted pursuant to section 1320, include information
identifying each finding under paragraph (1) by the
Administrator during the preceding year that an area is an area
having special flood hazards, the basis for each such finding,
any extensions pursuant to paragraph (4) of the periods of
effectiveness of such findings, and the reasons for such
extensions.''.
(2) No refunds.--Nothing in this subsection or the amendments
made by this subsection may be construed to authorize or
require any payment or refund for flood insurance coverage
purchased for any property that covered any period during which
such coverage is not required for the property pursuant to the
applicability of the amendment made by paragraph (1).
(b) Termination of Force-Placed Insurance.--Section 102(e) of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(e)) is amended--
(1) in paragraph (2), by striking ``insurance.'' and
inserting ``insurance, including premiums or fees incurred for
coverage beginning on the date on which flood insurance
coverage lapsed or did not provide a sufficient coverage
amount.'';
(2) by redesignating paragraphs (3) and (4) as paragraphs (5)
and 6), respectively; and
(3) by inserting after paragraph (2) the following new
paragraphs:
``(3) Termination of force-placed insurance.--Within 30 days
of receipt by the lender or servicer of a confirmation of a
borrower's existing flood insurance coverage, the lender or
servicer shall--
``(A) terminate the force-placed insurance; and
``(B) refund to the borrower all force-placed
insurance premiums paid by the borrower during any
period during which the borrower's flood insurance
coverage and the force-placed flood insurance coverage
were each in effect, and any related fees charged to
the borrower with respect to the force-placed insurance
during such period.
``(4) Sufficiency of demonstration.--For purposes of
confirming a borrower's existing flood insurance coverage, a
lender or servicer for a loan shall accept from the borrower an
insurance policy declarations page that includes the existing
flood insurance policy number and the identity of, and contact
information for, the insurance company or agent.''.
(c) Use of Private Insurance to Satisfy Mandatory Purchase
Requirement.--Section 102(b) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``lending institutions not to make''
and inserting ``lending institutions--
``(A) not to make'';
(B) in subparagraph (A), as designated by
subparagraph (A) of this paragraph, by striking
``less.'' and inserting ``less; and''; and
(C) by adding at the end the following new
subparagraph:
``(B) to accept private flood insurance as
satisfaction of the flood insurance coverage
requirement under subparagraph (A) if the coverage
provided by such private flood insurance meets the
requirements for coverage under such subparagraph.'';
(2) in paragraph (2), by inserting after ``provided in
paragraph (1).'' the following new sentence: ``Each Federal
agency lender shall accept private flood insurance as
satisfaction of the flood insurance coverage requirement under
the preceding sentence if the flood insurance coverage provided
by such private flood insurance meets the requirements for
coverage under such sentence.'';
(3) in paragraph (3), in the matter following subparagraph
(B), by adding at the end the following new sentence: ``The
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation shall accept private flood insurance as
satisfaction of the flood insurance coverage requirement under
the preceding sentence if the flood insurance coverage provided
by such private flood insurance meets the requirements for
coverage under such sentence.''; and
(4) by adding at the end the following new paragraph:
``(5) Private flood insurance defined.--In this subsection,
the term `private flood insurance' means a contract for flood
insurance coverage allowed for sale under the laws of any
State.''.

SEC. 4. REFORMS OF COVERAGE TERMS.

(a) Minimum Deductibles for Claims.--Section 1312 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4019) is amended--
(1) by striking ``The Director is'' and inserting the
following: ``(a) In General.--The Administrator is''; and
(2) by adding at the end the following:
``(b) Minimum Annual Deductibles.--
``(1) Subsidized rate properties.--For any structure that is
covered by flood insurance under this title, and for which the
chargeable rate for such coverage is less than the applicable
estimated risk premium rate under section 1307(a)(1) for the
area (or subdivision thereof) in which such structure is
located, the minimum annual deductible for damage to or loss of
such structure shall be $2,000.
``(2) Actuarial rate properties.--For any structure that is
covered by flood insurance under this title, for which the
chargeable rate for such coverage is not less than the
applicable estimated risk premium rate under section 1307(a)(1)
for the area (or subdivision thereof) in which such structure
is located, the minimum annual deductible for damage to or loss
of such structure shall be $1,000.''.
(b) Clarification of Residential and Commercial Coverage Limits.--
Section 1306(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4013(b)) is amended--
(1) in paragraph (2)--
(A) by striking ``in the case of any residential
property'' and inserting ``in the case of any
residential building designed for the occupancy of from
one to four families''; and
(B) by striking ``shall be made available to every
insured upon renewal and every applicant for insurance
so as to enable such insured or applicant to receive
coverage up to a total amount (including such limits
specified in paragraph (1)(A)(i)) of $250,000'' and
inserting ``shall be made available, with respect to
any single such building, up to an aggregate liability
(including such limits specified in paragraph
(1)(A)(i)) of $250,000''; and
(2) in paragraph (4)--
(A) by striking ``in the case of any nonresidential
property, including churches,'' and inserting ``in the
case of any nonresidential building, including a
church,''; and
(B) by striking ``shall be made available to every
insured upon renewal and every applicant for insurance,
in respect to any single structure, up to a total
amount (including such limit specified in subparagraph
(B) or (C) of paragraph (1), as applicable) of $500,000
for each structure and $500,000 for any contents
related to each structure'' and inserting ``shall be
made available with respect to any single such
building, up to an aggregate liability (including such
limits specified in subparagraph (B) or (C) of
paragraph (1), as applicable) of $500,000, and coverage
shall be made available up to a total of $500,000
aggregate liability for contents owned by the building
owner and $500,000 aggregate liability for each unit
within the building for contents owned by the tenant''.
(c) Indexing of Maximum Coverage Limits.--Subsection (b) of section
1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is
amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting ``; and'';
(3) by redesignating paragraph (5) as paragraph (7); and
(4) by adding at the end the following new paragraph:
``(8) each of the dollar amount limitations under paragraphs
(2), (3), (4), (5), and (6) shall be adjusted effective on the
date of the enactment of the Flood Insurance Reform Act of
2011, such adjustments shall be calculated using the percentage
change, over the period beginning on September 30, 1994, and
ending on such date of enactment, in such inflationary index as
the Administrator shall, by regulation, specify, and the dollar
amount of such adjustment shall be rounded to the next lower
dollar; and the Administrator shall cause to be published in
the Federal Register the adjustments under this paragraph to
such dollar amount limitations; except that in the case of
coverage for a property that is made available, pursuant to
this paragraph, in an amount that exceeds the limitation
otherwise applicable to such coverage as specified in paragraph
(2), (3), (4), (5), or (6), the total of such coverage shall be
made available only at chargeable rates that are not less than
the estimated premium rates for such coverage determined in
accordance with section 1307(a)(1).''.
(d) Optional Coverage for Loss of Use of Personal Residence and
Business Interruption.--Subsection (b) of section 1306 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4013(b)), as amended by the
preceding provisions of this section, is further amended by inserting
after paragraph (4) the following new paragraphs:
``(5) the Administrator may provide that, in the case of any
residential property, each renewal or new contract for flood
insurance coverage may provide not more than $5,000 aggregate
liability per dwelling unit for any necessary increases in
living expenses incurred by the insured when losses from a
flood make the residence unfit to live in, except that--
``(A) purchase of such coverage shall be at the
option of the insured;
``(B) any such coverage shall be made available only
at chargeable rates that are not less than the
estimated premium rates for such coverage determined in
accordance with section 1307(a)(1); and
``(C) the Administrator may make such coverage
available only if the Administrator makes a
determination and causes notice of such determination
to be published in the Federal Register that--
``(i) a competitive private insurance market
for such coverage does not exist; and
``(ii) the national flood insurance program
has the capacity to make such coverage
available without borrowing funds from the
Secretary of the Treasury under section 1309 or
otherwise;
``(6) the Administrator may provide that, in the case of any
commercial property or other residential property, including
multifamily rental property, coverage for losses resulting from
any partial or total interruption of the insured's business
caused by damage to, or loss of, such property from a flood may
be made available to every insured upon renewal and every
applicant, up to a total amount of $20,000 per property, except
that--
``(A) purchase of such coverage shall be at the
option of the insured;
``(B) any such coverage shall be made available only
at chargeable rates that are not less than the
estimated premium rates for such coverage determined in
accordance with section 1307(a)(1); and
``(C) the Administrator may make such coverage
available only if the Administrator makes a
determination and causes notice of such determination
to be published in the Federal Register that--
``(i) a competitive private insurance market
for such coverage does not exist; and
``(ii) the national flood insurance program
has the capacity to make such coverage
available without borrowing funds from the
Secretary of the Treasury under section 1309 or
otherwise;''.
(e) Payment of Premiums in Installments for Residential Properties.--
Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C.
4013) is amended by adding at the end the following new subsection:
``(d) Payment of Premiums in Installments for Residential
Properties.--
``(1) Authority.--In addition to any other terms and
conditions under subsection (a), such regulations shall provide
that, in the case of any residential property, premiums for
flood insurance coverage made available under this title for
such property may be paid in installments.
``(2) Limitations.--In implementing the authority under
paragraph (1), the Administrator may establish increased
chargeable premium rates and surcharges, and deny coverage and
establish such other sanctions, as the Administrator considers
necessary to ensure that insureds purchase, pay for, and
maintain coverage for the full term of a contract for flood
insurance coverage or to prevent insureds from purchasing
coverage only for periods during a year when risk of flooding
is comparatively higher or canceling coverage for periods when
such risk is comparatively lower.''.

SEC. 5. REFORMS OF PREMIUM RATES.

(a) Increase in Annual Limitation on Premium Increases.--Section
1308(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e))
is amended by striking ``10 percent'' and inserting ``20 percent''.
(b) Phase-In of Rates for Certain Properties in Newly Mapped Areas.--
(1) In general.--Section 1308 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4015) is amended--
(A) in subsection (a), in the matter preceding
paragraph (1), by inserting ``or notice'' after
``prescribe by regulation'';
(B) in subsection (c), by inserting ``and subsection
(g)'' before the first comma; and
(C) by adding at the end the following new
subsection:
``(g) 5-Year Phase-In of Flood Insurance Rates for Certain Properties
in Newly Mapped Areas.--
``(1) 50 percent rate for initial year.--Notwithstanding
subsection (c) or any other provision of law relating to
chargeable risk premium rates for flood insurance coverage
under this title, in the case of any area that was not
previously designated as an area having special flood hazards
and that, pursuant to any issuance, revision, updating, or
other change in flood insurance maps, becomes designated as
such an area, during the 12-month period that begins, except as
provided in paragraph (2), upon the date that such maps, as
issued, revised, updated, or otherwise changed, become
effective, the chargeable premium rate for flood insurance
under this title with respect to any covered property that is
located within such area shall be 50 percent of the chargeable
risk premium rate otherwise applicable under this title to the
property.
``(2) Applicability to preferred risk rate areas.--In the
case of any area described in paragraph (1) that consists of or
includes an area that, as of date of the effectiveness of the
flood insurance maps for such area referred to in paragraph (1)
as so issued, revised, updated, or changed, is eligible for any
reason for preferred risk rate method premiums for flood
insurance coverage and was eligible for such premiums as of the
enactment of the Flood Insurance Reform Act of 2011, the 12-
month period referred to in paragraph (1) for such area
eligible for preferred risk rate method premiums shall begin
upon the expiration of the period during which such area is
eligible for such preferred risk rate method premiums.
``(3) Phase-in of full actuarial rates.--With respect to any
area described in paragraph (1), upon the expiration of the 12-
month period under paragraph (1) or (2), as applicable, for
such area, the Administrator shall increase the chargeable risk
premium rates for flood insurance under this title for covered
properties in such area by 20 percent, and by 20 percent upon
the expiration of each successive 12-month period thereafter
until the chargeable risk premium rates comply with subsection
(c).
``(4) Covered properties.--For purposes of the subsection,
the term `covered property' means any residential property
occupied by its owner or a bona fide tenant as a primary
residence.''.
(2) Regulation or notice.--The Administrator of the Federal
Emergency Management Agency shall issue an interim final rule
or notice to implement this subsection and the amendments made
by this subsection as soon as practicable after the date of the
enactment of this Act.
(c) Phase-In of Actuarial Rates for Certain Properties.--
(1) In general.--Section 1308(c) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015(c)) is amended--
(A) by redesignating paragraph (2) as paragraph (7);
and
(B) by inserting after paragraph (1) the following
new paragraphs:
``(2) Commercial properties.--Any nonresidential property.
``(3) Second homes and vacation homes.--Any residential
property that is not the primary residence of any individual.
``(4) Homes sold to new owners.--Any single family property
that--
``(A) has been constructed or substantially improved
and for which such construction or improvement was
started, as determined by the Administrator, before
December 31, 1974, or before the effective date of the
initial rate map published by the Administrator under
paragraph (2) of section 1360(a) for the area in which
such property is located, whichever is later; and
``(B) is purchased after the effective date of this
paragraph, pursuant to section 5(c)(3)(A) of the Flood
Insurance Reform Act of 2011.
``(5) Homes damaged or improved.--Any property that, on or
after the date of the enactment of the Flood Insurance Reform
Act of 2011, has experienced or sustained--
``(A) substantial flood damage exceeding 50 percent
of the fair market value of such property; or
``(B) substantial improvement exceeding 30 percent of
the fair market value of such property.
``(6) Homes with multiple claims.--Any severe repetitive loss
property (as such term is defined in section 1361A(b)).''.
(2) Technical amendments.--Section 1308 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015) is amended--
(A) in subsection (c)--
(i) in the matter preceding paragraph (1), by
striking ``the limitations provided under
paragraphs (1) and (2)'' and inserting
``subsection (e)''; and
(ii) in paragraph (1), by striking ``,
except'' and all that follows through
``subsection (e)''; and
(B) in subsection (e), by striking ``paragraph (2) or
(3)'' and inserting ``paragraph (7)''.
(3) Effective date and transition.--
(A) Effective date.--The amendments made by
paragraphs (1) and (2) shall apply beginning upon the
expiration of the 12-month period that begins on the
date of the enactment of this Act, except as provided
in subparagraph (B) of this paragraph.
(B) Transition for properties covered by flood
insurance upon effective date.--
(i) Increase of rates over time.--In the case
of any property described in paragraph (2),
(3), (4), (5), or (6) of section 1308(c) of the
National Flood Insurance Act of 1968, as
amended by paragraph (1) of this subsection,
that, as of the effective date under
subparagraph (A) of this paragraph, is covered
under a policy for flood insurance made
available under the national flood insurance
program for which the chargeable premium rates
are less than the applicable estimated risk
premium rate under section 1307(a)(1) of such
Act for the area in which the property is
located, the Administrator of the Federal
Emergency Management Agency shall increase the
chargeable premium rates for such property over
time to such applicable estimated risk premium
rate under section 1307(a)(1).
(ii) Amount of annual increase.--Such
increase shall be made by increasing the
chargeable premium rates for the property
(after application of any increase in the
premium rates otherwise applicable to such
property), once during the 12-month period that
begins upon the effective date under
subparagraph (A) of this paragraph and once
every 12 months thereafter until such increase
is accomplished, by 20 percent (or such lesser
amount as may be necessary so that the
chargeable rate does not exceed such applicable
estimated risk premium rate or to comply with
clause (iii)).
(iii) Properties subject to phase-in and
annual increases.--In the case of any pre-FIRM
property (as such term is defined in section
578(b) of the National Flood Insurance Reform
Act of 1974), the aggregate increase, during
any 12-month period, in the chargeable premium
rate for the property that is attributable to
this subparagraph or to an increase described
in section 1308(e) of the National Flood
Insurance Act of 1968 may not exceed 20
percent.
(iv) Full actuarial rates.--The provisions of
paragraphs (2), (3), (4), (5), and (6) of such
section 1308(c) shall apply to such a property
upon the accomplishment of the increase under
this subparagraph and thereafter.
(d) Prohibition of Extension of Subsidized Rates to Lapsed
Policies.--Section 1308 of the National Flood Insurance Act of 1968 (42
U.S.C. 4015), as amended by the preceding provisions of this Act, is
further amended--
(1) in subsection (e), by inserting ``or subsection (h)''
after ``subsection (c)'';
(2) by adding at the end the following new subsection:
``(h) Prohibition of Extension of Subsidized Rates to Lapsed
Policies.--Notwithstanding any other provision of law relating to
chargeable risk premium rates for flood insurance coverage under this
title, the Administrator shall not provide flood insurance coverage
under this title for any property for which a policy for such coverage
for the property has previously lapsed in coverage as a result of the
deliberate choice of the holder of such policy, at a rate less than the
applicable estimated risk premium rates for the area (or subdivision
thereof) in which such property is located.''.
(e) Recognition of State and Local Funding for Construction,
Reconstruction, and Improvement of Flood Protection Systems in
Determination of Rates.--
(1) In general.--Section 1307 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4014) is amended--
(A) in subsection (e)--
(i) in the first sentence, by striking
``construction of a flood protection system''
and inserting ``construction, reconstruction,
or improvement of a flood protection system
(without respect to the level of Federal
investment or participation)''; and
(ii) in the second sentence--
(I) by striking ``construction of a
flood protection system'' and inserting
``construction, reconstruction, or
improvement of a flood protection
system''; and
(II) by inserting ``based on the
present value of the completed system''
after ``has been expended''; and
(B) in subsection (f)--
(i) in the first sentence in the matter
preceding paragraph (1), by inserting
``(without respect to the level of Federal
investment or participation)'' before the
period at the end;
(ii) in the third sentence in the matter
preceding paragraph (1), by inserting ``,
whether coastal or riverine,'' after ``special
flood hazard''; and
(iii) in paragraph (1), by striking ``a
Federal agency in consultation with the local
project sponsor'' and inserting ``the entity or
entities that own, operate, maintain, or repair
such system''.
(2) Regulations.--The Administrator of the Federal Emergency
Management Agency shall promulgate regulations to implement
this subsection and the amendments made by this subsection as
soon as practicable, but not more than 18 months after the date
of the enactment of this Act. Paragraph (3) may not be
construed to annul, alter, affect, authorize any waiver of, or
establish any exception to, the requirement under the preceding
sentence.

SEC. 6. TECHNICAL MAPPING ADVISORY COUNCIL.

(a) Establishment.--There is established a council to be known as the
Technical Mapping Advisory Council (in this section referred to as the
``Council'').
(b) Membership.--
(1) In general.--The Council shall consist of--
(A) the Administrator of the Federal Emergency
Management Agency (in this section referred to as the
``Administrator''), or the designee thereof;
(B) the Director of the United States Geological
Survey of the Department of the Interior, or the
designee thereof;
(C) the Under Secretary of Commerce for Oceans and
Atmosphere, or the designee thereof;
(D) the commanding officer of the United States Army
Corps of Engineers, or the designee thereof;
(E) the chief of the Natural Resources Conservation
Service of the Department of Agriculture, or the
designee thereof;
(F) the Director of the United States Fish and
Wildlife Service of the Department of the Interior, or
the designee thereof;
(G) the Assistant Administrator for Fisheries of the
National Oceanic and Atmospheric Administration of the
Department of Commerce, or the designee thereof; and
(H) 14 additional members to be appointed by the
Administrator of the Federal Emergency Management
Agency, who shall be--
(i) an expert in data management;
(ii) an expert in real estate;
(iii) an expert in insurance;
(iv) a member of a recognized regional flood
and storm water management organization;
(v) a representative of a State emergency
management agency or association or
organization for such agencies;
(vi) a member of a recognized professional
surveying association or organization;
(vii) a member of a recognized professional
mapping association or organization;
(viii) a member of a recognized professional
engineering association or organization;
(ix) a member of a recognized professional
association or organization representing flood
hazard determination firms;
(x) a representative of State national flood
insurance coordination offices;
(xi) representatives of two local
governments, at least one of whom is a local
levee flood manager or executive, designated by
the Federal Emergency Management Agency as
Cooperating Technical Partners; and
(xii) representatives of two State
governments designated by the Federal Emergency
Management Agency as Cooperating Technical
States.
(2) Qualifications.--Members of the Council shall be
appointed based on their demonstrated knowledge and competence
regarding surveying, cartography, remote sensing, geographic
information systems, or the technical aspects of preparing and
using flood insurance rate maps. In appointing members under
paragraph (1)(I), the Administrator shall ensure that the
membership of the Council has a balance of Federal, State,
local, and private members.
(c) Duties.--
(1) New mapping standards.--Not later than the expiration of
the 12-month period beginning upon the date of the enactment of
this Act, the Council shall develop and submit to the
Administrator and the Congress proposed new mapping standards
for 100-year flood insurance rate maps used under the national
flood insurance program under the National Flood Insurance Act
of 1968. In developing such proposed standards the Council
shall--
(A) ensure that the flood insurance rate maps reflect
true risk, including graduated risk that better
reflects the financial risk to each property; such
reflection of risk should be at the smallest geographic
level possible (but not necessarily property-by-
property) to ensure that communities are mapped in a
manner that takes into consideration different risk
levels within the community;
(B) ensure the most efficient generation, display,
and distribution of flood risk data, models, and maps
where practicable through dynamic digital environments
using spatial database technology and the Internet;
(C) ensure that flood insurance rate maps reflect
current hydrologic and hydraulic data, current land
use, and topography, incorporating the most current and
accurate ground and bathymetric elevation data;
(D) determine the best ways to include in such flood
insurance rate maps levees, decertified levees, and
areas located below dams, including determining a
methodology for ensuring that decertified levees and
other protections are included in flood insurance rate
maps and their corresponding flood zones reflect the
level of protection conferred;
(E) consider how to incorporate restored wetlands and
other natural buffers into flood insurance rate maps,
which may include wetlands, groundwater recharge areas,
erosion zones, meander belts, endangered species
habitat, barrier islands and shoreline buffer features,
riparian forests, and other features;
(F) consider whether to use vertical positioning (as
defined by the Administrator) for flood insurance rate
maps;
(G) ensure that flood insurance rate maps
differentiate between a property that is located in a
flood zone and a structure located on such property
that is not at the same risk level for flooding as such
property due to the elevation of the structure;
(H) ensure that flood insurance rate maps take into
consideration the best scientific data and potential
future conditions (including projections for sea level
rise); and
(I) consider how to incorporate the new standards
proposed pursuant to this paragraph in existing mapping
efforts.
(2) Ongoing duties.--The Council shall, on an ongoing basis,
review the mapping protocols developed pursuant to paragraph
(1), and make recommendations to the Administrator when the
Council determines that mapping protocols should be altered.
(3) Meetings.--In carrying out its duties under this section,
the Council shall consult with stakeholders through at least 4
public meetings annually, and shall seek input of all
stakeholder interests including State and local
representatives, environmental and conservation organizations,
insurance industry representatives, advocacy groups, planning
organizations, and mapping organizations.
(d) Prohibition on Compensation.--Members of the Council shall
receive no additional compensation by reason of their service on the
Council.
(e) Chairperson.--The Administrator shall serve as the Chairperson of
the Council.
(f) Staff.--
(1) FEMA.--Upon the request of the Council, the Administrator
may detail, on a nonreimbursable basis, personnel of the
Federal Emergency Management Agency to assist the Council in
carrying out its duties.
(2) Other federal agencies.--Upon request of the Council, any
other Federal agency that is a member of the Council may
detail, on a non-reimbursable basis, personnel to assist the
Council in carrying out its duties.
(g) Powers.--In carrying out this section, the Council may hold
hearings, receive evidence and assistance, provide information, and
conduct research, as the Council considers appropriate.
(h) Termination.--The Council shall terminate upon the expiration of
the 5-year period beginning on the date of the enactment of this Act.

SEC. 7. FEMA INCORPORATION OF NEW MAPPING PROTOCOLS.

(a) New Rate Mapping Standards.--Not later than the expiration of the
6-month period beginning upon submission by the Technical Mapping
Advisory Council under section 6 of the proposed new mapping standards
for flood insurance rate maps used under the national flood insurance
program developed by the Council pursuant to section 6(c), the
Administrator of the Federal Emergency Management Agency (in this
section referred to as the ``Administrator'') shall establish new
standards for such rate maps based on such proposed new standards and
the recommendations of the Council.
(b) Requirements.--The new standards for flood insurance rate maps
established by the Administrator pursuant to subsection (a) shall--
(1) delineate and include in any such rate maps--
(A) all areas located within the 100-year flood
plain;
(B) areas of residual risk, including areas behind
levees, dams, and other man-made structures; and
(C) areas subject to graduated and other risk levels,
to the maximum extent possible;
(2) ensure that any such rate maps--
(A) include levees, including decertified levees, and
the level of protection they confer;
(B) reflect current land use and topography and
incorporate the most current and accurate ground level
data;
(C) take into consideration the impacts and use of
fill and the flood risks associated with altered
hydrology;
(D) differentiate between a property that is located
in a flood zone and a structure located on such
property that is not at the same risk level for
flooding as such property due to the elevation of the
structure;
(E) identify and incorporate natural features and
their associated flood protection benefits into mapping
and rates; and
(F) identify, analyze, and incorporate the impact of
significant changes to building and development
throughout any river or costal water system, including
all tributaries, which may impact flooding in areas
downstream; and
(3) provide that such rate maps are developed on a watershed
basis.
(c) Report.--If, in establishing new standards for flood insurance
rate maps pursuant to subsection (a) of this section, the Administrator
does not implement all of the recommendations of the Council made under
the proposed new mapping standards developed by the Council pursuant to
section 6(c), upon establishment of the new standards the Administrator
shall submit a report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate specifying which such recommendations were
not adopted and explaining the reasons such recommendations were not
adopted.
(d) Implementation.--The Administrator shall, not later than the
expiration of the 6-month period beginning upon establishment of the
new standards for flood insurance rate maps pursuant to subsection (a)
of this section, commence use of the new standards and updating of
flood insurance rate maps in accordance with the new standards. Not
later than the expiration of the 5-year period beginning upon the
establishment of such new standards, the Administrator shall complete
updating of all flood insurance rate maps in accordance with the new
standards, subject to the availability of sufficient amounts for such
activities provided in appropriation Acts.
(e) Temporary Suspension of Mandatory Purchase Requirement for
Certain Properties.--
(1) Submission of elevation certificate.--Subject to
paragraphs (2) and (3) of this subsection, subsections (a),
(b), and (e) of section 102 of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4012a), and section 202(a) of such Act,
shall not apply to a property located in an area designated as
having a special flood hazard if the owner of such property
submits to the Administrator an elevation certificate for such
property showing that the lowest level of the primary residence
on such property is at an elevation that is at least three feet
higher than the elevation of the 100-year flood plain.
(2) Review of survey.--The Administrator shall accept as
conclusive each elevation survey submitted under paragraph (1)
unless the Administrator conducts a subsequent elevation survey
and determines that the lowest level of the primary residence
on the property in question is not at an elevation that is at
least three feet higher than the elevation of the 100-year
flood plain. The Administrator shall provide any such
subsequent elevation survey to the owner of such property.
(3) Determinations for properties on borders of special flood
hazard areas.--
(A) Expedited determination.--In the case of any
survey for a property submitted to the Administrator
pursuant to paragraph (1) showing that a portion of the
property is located within an area having special flood
hazards and that a structure located on the property is
not located within such area having special flood
hazards, the Administrator shall expeditiously process
any request made by an owner of the property for a
determination pursuant to paragraph (2) or a
determination of whether the structure is located
within the area having special flood hazards.
(B) Prohibition of fee.--If the Administrator
determines pursuant to subparagraph (A) that the
structure on the property is not located within the
area having special flood hazards, the Administrator
shall not charge a fee for reviewing the flood hazard
data and shall not require the owner to provide any
additional elevation data.
(C) Simplification of review process.--The
Administrator shall collaborate with private sector
flood insurers to simplify the review process for
properties described in subparagraph (A) and to ensure
that the review process provides for accurate
determinations.
(4) Termination of authority.--This subsection shall cease to
apply to a property on the date on which the Administrator
updates the flood insurance rate map that applies to such
property in accordance with the requirements of subsection (d).

SEC. 8. TREATMENT OF LEVEES.

Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C.
4101) is amended by adding at the end the following new subsection:
``(k) Treatment of Levees.--The Administrator may not issue flood
insurance maps, or make effective updated flood insurance maps, that
omit or disregard the actual protection afforded by an existing levee,
floodwall, pump or other flood protection feature, regardless of the
accreditation status of such feature.''.

SEC. 9. PRIVATIZATION INITIATIVES.

(a) FEMA and GAO Reports.--Not later than the expiration of the 18-
month period beginning on the date of the enactment of this Act, the
Administrator of the Federal Emergency Management Agency and the
Comptroller General of the United States shall each conduct a separate
study to assess a broad range of options, methods, and strategies for
privatizing the national flood insurance program and shall each submit
a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate with recommendations for the best manner to
accomplish such privatization.
(b) Private Risk-Management Initiatives.--
(1) Authority.--The Administrator of the Federal Emergency
Management Agency may carry out such private risk-management
initiatives under the national flood insurance program as the
Administrator considers appropriate to determine the capacity
of private insurers, reinsurers, and financial markets to
assist communities, on a voluntary basis only, in managing the
full range of financial risks associated with flooding.
(2) Assessment.--Not later than the expiration of the 12-
month period beginning on the date of the enactment of this
Act, the Administrator shall assess the capacity of the private
reinsurance, capital, and financial markets by seeking
proposals to assume a portion of the program's insurance risk
and submit to the Congress a report describing the response to
such request for proposals and the results of such assessment.
(3) Protocol for release of data.--The Administrator shall
develop a protocol to provide for the release of data
sufficient to conduct the assessment required under paragraph
(2).
(c) Reinsurance.--The National Flood Insurance Act of 1968 is
amended--
(1) in section 1331(a)(2) (42 U.S.C. 4051(a)(2)), by
inserting ``, including as reinsurance of insurance coverage
provided by the flood insurance program'' before ``, on such
terms'';
(2) in section 1332(c)(2) (42 U.S.C. 4052(c)(2)), by
inserting ``or reinsurance'' after ``flood insurance
coverage'';
(3) in section 1335(a) (42 U.S.C. 4055(a))--
(A) by inserting ``(1)'' after ``(a)''; and
(B) by adding at the end the following new paragraph:
``(2) The Administrator is authorized to secure reinsurance coverage
of coverage provided by the flood insurance program from private market
insurance, reinsurance, and capital market sources at rates and on
terms determined by the Administrator to be reasonable and appropriate
in an amount sufficient to maintain the ability of the program to pay
claims and that minimizes the likelihood that the program will utilize
the borrowing authority provided under section 1309.'';
(4) in section 1346(a) (12 U.S.C. 4082(a))--
(A) in the matter preceding paragraph (1), by
inserting ``, or for purposes of securing reinsurance
of insurance coverage provided by the program,'' before
``of any or all of'';
(B) in paragraph (1)--
(i) by striking ``estimating'' and inserting
``Estimating''; and
(ii) by striking the semicolon at the end and
inserting a period;
(C) in paragraph (2)--
(i) by striking ``receiving'' and inserting
``Receiving''; and
(ii) by striking the semicolon at the end and
inserting a period;
(D) in paragraph (3)--
(i) by striking ``making'' and inserting
``Making''; and
(ii) by striking ``; and'' and inserting a
period;
(E) in paragraph (4)--
(i) by striking ``otherwise'' and inserting
``Otherwise''; and
(ii) by redesignating such paragraph as
paragraph (5); and
(F) by inserting after paragraph (3) the following
new paragraph:
``(4) Placing reinsurance coverage on insurance provided by
such program.''; and
(5) in section 1370(a)(3) (42 U.S.C. 4121(a)(3)), by
inserting before the semicolon at the end the following: ``, is
subject to the reporting requirements of the Securities
Exchange Act of 1934, pursuant to section 13(a) or 15(d) of
such Act (15 U.S.C. 78m(a), 78o(d)), or is authorized by the
Administrator to assume reinsurance on risks insured by the
flood insurance program''.
(d) Assessment of Claims-Paying Ability.--
(1) Assessment.--Not later than September 30 of each year,
the Administrator of the Federal Emergency Management Agency
shall conduct an assessment of the claims-paying ability of the
national flood insurance program, including the program's
utilization of private sector reinsurance and reinsurance
equivalents, with and without reliance on borrowing authority
under section 1309 of the National Flood Insurance Act of 1968
(42 U.S.C. 4016). In conducting the assessment, the
Administrator shall take into consideration regional
concentrations of coverage written by the program, peak flood
zones, and relevant mitigation measures.
(2) Report.--The Administrator shall submit a report to the
Congress of the results of each such assessment, and make such
report available to the public, not later than 30 days after
completion of the assessment.

SEC. 10. FEMA ANNUAL REPORT ON INSURANCE PROGRAM.

Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C.
4027) is amended--
(1) in the section heading, by striking ``report to the
president'' and inserting ``annual report to congress'';
(2) in subsection (a)--
(A) by striking ``biennially'';
(B) by striking ``the President for submission to'';
and
(C) by inserting ``not later than June 30 of each
year'' before the period at the end;
(3) in subsection (b), by striking ``biennial'' and inserting
``annual''; and
(4) by adding at the end the following new subsection:
``(c) Financial Status of Program.--The report under this section for
each year shall include information regarding the financial status of
the national flood insurance program under this title, including a
description of the financial status of the National Flood Insurance
Fund and current and projected levels of claims, premium receipts,
expenses, and borrowing under the program.''.

SEC. 11. ACTUARIAL RATES FOR SEVERE REPETITIVE LOSS PROPERTIES REFUSING
MITIGATION OR PURCHASE OFFERS.

Subsection (h) of section 1361A of the National Flood Insurance Act
of 1968 (42 U.S.C. 4102a(h)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``150 percent''
and all that follows through ``paragraph (3)'' and
inserting ``the applicable estimated risk premium rate
for such coverage for the area (or subdivision thereof)
determined in accordance with section 1307(a), subject
to phase-in of such rates in the same manner provided
under paragraph (2) of section 1308(g) for properties
described in paragraph (1) of such section''; and
(B) by inserting after and below subparagraph (B) the
following:
``An offer to take action under paragraph (1) or (2) of
subsection (c) shall be considered to be made for purposes of
this paragraph with respect to a severe repetitive loss
property regardless of the time that the offer was made and
regardless of whether the Administrator has transferred
financial assistance under this section to the State or
community making the offer for funding such action, but only if
the owner of the property is provided a reasonable period of
time, not to exceed 15 days, to respond to the offer.'';
(2) by striking paragraphs (2) and (3); and
(3) by redesignating paragraphs (4) through (6) as paragraphs
(2) through (4), respectively.

SEC. 12. MITIGATION ASSISTANCE.

Subsection (e) of section 1366 of the National Flood Insurance Act of
1968 (42 U.S.C. 4104c(e)) is amended by adding at the end the following
new paragraph:
``(6) Eligibility of demolition and rebuilding of
properties.--The Administrator shall consider as an eligible
activity the demolition and rebuilding of properties to at
least base flood levels or higher, if required by the
Administrator or if required by any State or local ordinance,
and in accordance with project implementation criteria
established by the Administrator.''.

SEC. 13. GRANTS FOR DIRECT FUNDING OF MITIGATION ACTIVITIES FOR
INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.

(a) Direct Grants to Owners.--Section 1323 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4030) is amended--
(1) in the section heading, by inserting
``^direct'' before ``^grants''; and
(2) in subsection (a), in the the matter preceding paragraph
(1)--
(A) by inserting ``, to owners of such properties,''
before ``for mitigation actions''; and
(B) by striking ``1'' and inserting ``two''.
(b) Availability of Funds.--Paragraph (9) of section 1310(a) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended by
inserting ``which shall remain available until expended,'' after ``any
fiscal year,''.

SEC. 14. NOTIFICATION TO HOMEOWNERS REGARDING MANDATORY PURCHASE
REQUIREMENT APPLICABILITY AND RATE PHASE-INS.

Section 201 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4105) is amended by adding at the end the following new subsection:
``(f) Annual Notification.--The Administrator, in consultation with
affected communities, shall establish and carry out a plan to notify
residents of areas having special flood hazards, on an annual basis--
``(1) that they reside in such an area;
``(2) of the geographical boundaries of such area;
``(3) of whether section 1308(h) of the National Flood
Insurance Act of 1968 applies to properties within such area;
``(4) of the provisions of section 102 requiring purchase of
flood insurance coverage for properties located in such an
area, including the date on which such provisions apply with
respect to such area, taking into consideration section 102(i);
and
``(5) of a general estimate of what similar homeowners in
similar areas typically pay for flood insurance coverage,
taking into consideration section 1308(g) of the National Flood
Insurance Act of 1968.''.

SEC. 15. NOTIFICATION OF ESTABLISHMENT OF FLOOD ELEVATIONS.

Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C.
4101), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new subsection:
``(l) Notification to Members of Congress of Map Modernization.--Upon
any revision or update of any floodplain area or flood-risk zone
pursuant to subsection (f), any decision pursuant to subsection (f)(1)
that such revision or update is necessary, any issuance of preliminary
maps for such revision or updating, or any other significant action
relating to any such revision or update, the Administrator shall notify
the Senators for each State affected, and each Member of the House of
Representatives for each congressional district affected, by such
revision or update in writing of the action taken.''.

SEC. 16. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS INSURANCE.

The National Flood Insurance Act of 1968 is amended by inserting
after section 1308 (42 U.S.C. 4015) the following new section:

``SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS
INSURANCE.

``(a) In General.--The Administrator shall, upon entering into a
contract for flood insurance coverage under this title for any
property--
``(1) provide to the insured sufficient copies of the notice
developed pursuant to subsection (b); and
``(2) require the insured to provide a copy of the notice, or
otherwise provide notification of the information under
subsection (b) in the manner that the manager or landlord deems
most appropriate, to each such tenant and to each new tenant
upon commencement of such a tenancy.
``(b) Notice.--Notice to a tenant of a property in accordance with
this subsection is written notice that clearly informs a tenant--
``(1) whether the property is located in an area having
special flood hazards;
``(2) that flood insurance coverage is available under the
national flood insurance program under this title for contents
of the unit or structure leased by the tenant;
``(3) of the maximum amount of such coverage for contents
available under this title at that time; and
``(4) of where to obtain information regarding how to obtain
such coverage, including a telephone number, mailing address,
and Internet site of the Administrator where such information
is available.''.

SEC. 17. NOTIFICATION TO POLICY HOLDERS REGARDING DIRECT MANAGEMENT OF
POLICY BY FEMA.

Part C of chapter II of the National Flood Insurance Act of 1968 (42
U.S.C. 4081 et seq.) is amended by adding at the end the following new
section:

``SEC. 1349. NOTIFICATION TO POLICY HOLDERS REGARDING DIRECT MANAGEMENT
OF POLICY BY FEMA.

``(a) Notification.--Not later than 60 days before the date on which
a transferred flood insurance policy expires, and annually thereafter
until such time as the Federal Emergency Management Agency is no longer
directly administering such policy, the Administrator shall notify the
holder of such policy that--
``(1) the Federal Emergency Management Agency is directly
administering the policy;
``(2) such holder may purchase flood insurance that is
directly administered by an insurance company; and
``(3) purchasing flood insurance offered under the National
Flood Insurance Program that is directly administered by an
insurance company will not alter the coverage provided or the
premiums charged to such holder that otherwise would be
provided or charged if the policy was directly administered by
the Federal Emergency Management Agency.
``(b) Definition.--In this section, the term `transferred flood
insurance policy' means a flood insurance policy that--
``(1) was directly administered by an insurance company at
the time the policy was originally purchased by the policy
holder; and
``(2) at the time of renewal of the policy, direct
administration of the policy was or will be transferred to the
Federal Emergency Management Agency.''.

SEC. 18. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW IN RESPA
GOOD FAITH ESTIMATE.

Subsection (c) of section 5 of the Real Estate Settlement Procedures
Act of 1974 (12 U.S.C. 2604(c)) is amended by adding at the end the
following new sentence: ``Each such good faith estimate shall include
the following conspicuous statements and information: (1) that flood
insurance coverage for residential real estate is generally available
under the national flood insurance program whether or not the real
estate is located in an area having special flood hazards and that, to
obtain such coverage, a home owner or purchaser should contact the
national flood insurance program; (2) a telephone number and a location
on the Internet by which a home owner or purchaser can contact the
national flood insurance program; and (3) that the escrowing of flood
insurance payments is required for many loans under section 102(d) of
the Flood Disaster Protection Act of 1973, and may be a convenient and
available option with respect to other loans.''.

SEC. 19. REIMBURSEMENT FOR COSTS INCURRED BY HOMEOWNERS OBTAINING
LETTERS OF MAP AMENDMENT.

(a) In General.--Section 1360 of the National Flood Insurance Act of
1968 (42 U.S.C. 4101), as amended by the preceding provisions of this
Act, is further amended by adding at the end the following new
subsection:
``(m) Reimbursement.--
``(1) Requirement upon bona fide offer.--If an owner of any
property located in an area described in section 102(i)(3) of
the Flood Disaster Protection Act of 1973 obtains a letter of
map amendment due to a bona fide error on the part of the
Administrator of the Federal Emergency Management Agency, the
Administrator shall reimburse such owner, or such entity or
jurisdiction acting on such owner's behalf, for any reasonable
costs incurred in obtaining such letter.
``(2) Reasonable costs.--The Administrator shall, by
regulation or notice, determine a reasonable amount of costs to
be reimbursed under paragraph (1), except that such costs shall
not include legal or attorneys fees. In determining the
reasonableness of costs, the Administrator shall only consider
the actual costs to the owner of utilizing the services of an
engineer, surveyor, or similar services.''.
(b) Regulations.--Not later than 90 days after the date of the
enactment of this Act, the Administrator of the Federal Emergency
Management Agency shall issue the regulations or notice required under
section 1360(m)(2) of the National Flood Insurance Act of 1968, as
added by the amendment made by subsection (a) of this section.

SEC. 20. TREATMENT OF SWIMMING POOL ENCLOSURES OUTSIDE OF HURRICANE
SEASON.

Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4001
et seq.) is amended by adding at the end the following new section:

``SEC. 1325. TREATMENT OF SWIMMING POOL ENCLOSURES OUTSIDE OF HURRICANE
SEASON.

``In the case of any property that is otherwise in compliance with
the coverage and building requirements of the national flood insurance
program, the presence of an enclosed swimming pool located at ground
level or in the space below the lowest floor of a building after
November 30 and before June 1 of any year shall have no effect on the
terms of coverage or the ability to receive coverage for such building
under the national flood insurance program established pursuant to this
title, if the pool is enclosed with non-supporting breakaway walls.''.

SEC. 21. CDBG ELIGIBILITY FOR FLOOD INSURANCE OUTREACH ACTIVITIES AND
COMMUNITY BUILDING CODE ADMINISTRATION GRANTS.

Section 105(a) of the Housing and Community Development Act of 1974
(42 U.S.C. 5305(a)) is amended--
(1) in paragraph (24), by striking ``and'' at the end;
(2) in paragraph (25), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following new paragraphs:
``(26) supplementing existing State or local funding for
administration of building code enforcement by local building
code enforcement departments, including for increasing
staffing, providing staff training, increasing staff competence
and professional qualifications, and supporting individual
certification or departmental accreditation, and for capital
expenditures specifically dedicated to the administration of
the building code enforcement department, except that, to be
eligible to use amounts as provided in this paragraph--
``(A) a building code enforcement department shall
provide matching, non-Federal funds to be used in
conjunction with amounts used under this paragraph in
an amount--
``(i) in the case of a building code
enforcement department serving an area with a
population of more than 50,000, equal to not
less than 50 percent of the total amount of any
funds made available under this title that are
used under this paragraph;
``(ii) in the case of a building code
enforcement department serving an area with a
population of between 20,001 and 50,000, equal
to not less than 25 percent of the total amount
of any funds made available under this title
that are used under this paragraph; and
``(iii) in the case of a building code
enforcement department serving an area with a
population of less than 20,000, equal to not
less than 12.5 percent of the total amount of
any funds made available under this title that
are used under this paragraph;
except that the Secretary may waive the matching fund
requirements under this subparagraph, in whole or in
part, based upon the level of economic distress of the
jurisdiction in which is located the local building
code enforcement department that is using amounts for
purposes under this paragraph, and shall waive such
matching fund requirements in whole for any recipient
jurisdiction that has dedicated all building code
permitting fees to the conduct of local building code
enforcement; and
``(B) any building code enforcement department using
funds made available under this title for purposes
under this paragraph shall empanel a code
administration and enforcement team consisting of at
least 1 full-time building code enforcement officer, a
city planner, and a health planner or similar officer;
and
``(27) provision of assistance to local governmental agencies
responsible for floodplain management activities (including
such agencies of Indians tribes, as such term is defined in
section 4 of the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4103)) in communities that
participate in the national flood insurance program under the
National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.),
only for carrying out outreach activities to encourage and
facilitate the purchase of flood insurance protection under
such Act by owners and renters of properties in such
communities and to promote educational activities that increase
awareness of flood risk reduction; except that--
``(A) amounts used as provided under this paragraph
shall be used only for activities designed to--
``(i) identify owners and renters of
properties in communities that participate in
the national flood insurance program, including
owners of residential and commercial
properties;
``(ii) notify such owners and renters when
their properties become included in, or when
they are excluded from, an area having special
flood hazards and the effect of such inclusion
or exclusion on the applicability of the
mandatory flood insurance purchase requirement
under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a) to
such properties;
``(iii) educate such owners and renters
regarding the flood risk and reduction of this
risk in their community, including the
continued flood risks to areas that are no
longer subject to the flood insurance mandatory
purchase requirement;
``(iv) educate such owners and renters
regarding the benefits and costs of maintaining
or acquiring flood insurance, including, where
applicable, lower-cost preferred risk policies
under this title for such properties and the
contents of such properties;
``(v) encourage such owners and renters to
maintain or acquire such coverage;
``(vi) notify such owners of where to obtain
information regarding how to obtain such
coverage, including a telephone number, mailing
address, and Internet site of the Administrator
of the Federal Emergency Management Agency (in
this paragraph referred to as the
`Administrator') where such information is
available; and
``(vii) educate local real estate agents in
communities participating in the national flood
insurance program regarding the program and the
availability of coverage under the program for
owners and renters of properties in such
communities, and establish coordination and
liaisons with such real estate agents to
facilitate purchase of coverage under the
National Flood Insurance Act of 1968 and
increase awareness of flood risk reduction;
``(B) in any fiscal year, a local governmental agency
may not use an amount under this paragraph that exceeds
3 times the amount that the agency certifies, as the
Secretary, in consultation with the Administrator,
shall require, that the agency will contribute from
non-Federal funds to be used with such amounts used
under this paragraph only for carrying out activities
described in subparagraph (A); and for purposes of this
subparagraph, the term `non-Federal funds' includes
State or local government agency amounts, in-kind
contributions, any salary paid to staff to carry out
the eligible activities of the local governmental
agency involved, the value of the time and services
contributed by volunteers to carry out such services
(at a rate determined by the Secretary), and the value
of any donated material or building and the value of
any lease on a building;
``(C) a local governmental agency that uses amounts
as provided under this paragraph may coordinate or
contract with other agencies and entities having
particular capacities, specialties, or experience with
respect to certain populations or constituencies,
including elderly or disabled families or persons, to
carry out activities described in subparagraph (A) with
respect to such populations or constituencies; and
``(D) each local government agency that uses amounts
as provided under this paragraph shall submit a report
to the Secretary and the Administrator, not later than
12 months after such amounts are first received, which
shall include such information as the Secretary and the
Administrator jointly consider appropriate to describe
the activities conducted using such amounts and the
effect of such activities on the retention or
acquisition of flood insurance coverage.''.

SEC. 22. TECHNICAL CORRECTIONS.

(a) Flood Disaster Protection Act of 1973.--The Flood Disaster
Protection Act of 1973 (42 U.S.C. 4002 et seq.) is amended--
(1) by striking ``Director'' each place such term appears,
except in section 102(f)(3) (42 U.S.C. 4012a(f)(3)), and
inserting ``Administrator''; and
(2) in section 201(b) (42 U.S.C. 4105(b)), by striking
``Director's'' and inserting ``Administrator's''.
(b) National Flood Insurance Act of 1968.--The National Flood
Insurance Act of 1968 (42 U.S.C. 4001 et seq.) is amended--
(1) by striking ``Director'' each place such term appears and
inserting ``Administrator''; and
(2) in sections 1363 (42 U.S.C. 4104), by striking
``Director's'' each place such term appears and inserting
``Administrator's''.
(c) Federal Flood Insurance Act of 1956.--Section 15(e) of the
Federal Flood Insurance Act of 1956 (42 U.S.C. 2414(e)) is amended by
striking ``Director'' each place such term appears and inserting
``Administrator''.

SEC. 23. REPORT ON WRITE-YOUR-OWN PROGRAM.

Not later than one year after the date of the enactment of this Act,
the Administrator of the Federal Emergency Management Agency shall
submit to Congress a report describing procedures and policies that the
Administrator can implement to limit the percentage of flood insurance
polices directly managed by the Agency to not more than 10 percent, if
possible, of all flood insurance policies issued in accordance with the
National Flood Insurance Program.

SEC. 24. STUDIES OF VOLUNTARY COMMUNITY-BASED FLOOD INSURANCE OPTIONS.

(a) Studies.--The Administrator of the Federal Emergency Management
Agency and the Comptroller General of the United States shall each
conduct a separate study to assess options, methods, and strategies for
offering voluntary community-based flood insurance policy options and
incorporating such options into the national flood insurance program.
Such studies shall take into consideration and analyze how the policy
options would affect communities having varying economic bases,
geographic locations, flood hazard characteristics or classifications,
and flood management approaches.
(b) Reports.--Not later than the expiration of the 18-month period
beginning on the date of the enactment of this Act, the Administrator
of the Federal Emergency Management Agency and the Comptroller General
of the United States shall each submit a report to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate on the results and
conclusions of the study such agency conducted under subsection (a),
and each such report shall include recommendations for the best manner
to incorporate voluntary community-based flood insurance options into
the national flood insurance program and for a strategy to implement
such options that would encourage communities to undertake flood
mitigation activities.

SEC. 25. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN MANAGEMENT
CRITERIA.

Not later than the expiration of the 6-month period beginning on the
date of the enactment of this Act, the Administrator of the Federal
Emergency Management Agency shall conduct a study and submit a report
to the Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the Senate
regarding the impact, effectiveness, and feasibility of amending
section 1361 of the National Flood Insurance Act of 1968 (42 U.S.C.
4102) to include widely used and nationally recognized building codes
as part of the floodplain management criteria developed under such
section, and shall determine--
(1) the regulatory, financial, and economic impacts of such a
building code requirement on homeowners, States and local
communities, local land use policies, and the Federal Emergency
Management Agency;
(2) the resources required of State and local communities to
administer and enforce such a building code requirement;
(3) the effectiveness of such a building code requirement in
reducing flood-related damage to buildings and contents;
(4) the impact of such a building code requirement on the
actuarial soundness of the National Flood Insurance Program;
(5) the effectiveness of nationally recognized codes in
allowing innovative materials and systems for flood-resistant
construction;
(6) the feasibility and effectiveness of providing an
incentive in lower premium rates for flood insurance coverage
under such Act for structures meeting whichever of such widely
used and nationally recognized building code or any applicable
local building code provides greater protection from flood
damage;
(7) the impact of such a building code requirement on rural
communities with different building code challenges than more
urban environments; and
(8) the impact of such a building code requirement on Indian
reservations.

SEC. 26. STUDY ON GRADUATED RISK.

(a) Study.-- The National Academy of Sciences shall conduct a study
exploring methods for understanding graduated risk behind levees and
the associated land development, insurance, and risk communication
dimensions, which shall--
(1) research, review, and recommend current best practices
for estimating direct annualized flood losses behind levees for
residential and commercial structures;
(2) rank such practices based on their best value, balancing
cost, scientific integrity, and the inherent uncertainties
associated with all aspects of the loss estimate, including
geotechnical engineering, flood frequency estimates, economic
value, and direct damages;
(3) research, review, and identify current best floodplain
management and land use practices behind levees that
effectively balance social, economic, and environmental
considerations as part of an overall flood risk management
strategy;
(4) identify examples where such practices have proven
effective and recommend methods and processes by which they
could be applied more broadly across the United States, given
the variety of different flood risks, State and local legal
frameworks, and evolving judicial opinions;
(5) research, review, and identify a variety of flood
insurance pricing options for flood hazards behind levees which
are actuarially sound and based on the flood risk data
developed using the top three best value approaches identified
pursuant to paragraph (1);
(6) evaluate and recommend methods to reduce insurance costs
through creative arrangements between insureds and insurers
while keeping a clear accounting of how much financial risk is
being borne by various parties such that the entire risk is
accounted for, including establishment of explicit limits on
disaster aid or other assistance in the event of a flood; and
(7) taking into consideration the recommendations pursuant to
paragraphs (1) through (3), recommend approaches to
communicating the associated risks to community officials,
homeowners, and other residents.
(b) Report.--Not later than the expiration of the 12-month period
beginning on the date of the enactment of this Act, the National
Academy of Sciences shall submit a report to the Committees on
Financial Services and Science, Space, and Technology of the House of
Representatives and the Committees on Banking, Housing, and Urban
Affairs and Commerce, Science and Transportation of the Senate on the
study under subsection (a) including the information and
recommendations required under such subsection.

SEC. 27. NO CAUSE OF ACTION.

No cause of action shall exist and no claim may be brought against
the United States for violation of any notification requirement imposed
upon the United States by this Act or any amendment made by this Act.

Purpose and Summary

H.R. 1309, the Flood Insurance Reform Act of 2011,
reauthorizes the National Flood Insurance Program (NFIP)
through September 30, 2016, and amends the National Flood
Insurance Act to ensure the immediate and near-term fiscal and
administrative health of the NFIP. The bill also ensures the
NFIP's continued viability by encouraging broader participation
in the program, increasing financial accountability,
eliminating unnecessary rate subsidies, and updating the
program to meet the needs of the 21st century. The key
provisions of H.R. 1309 include: (1) a five-year
reauthorization of the NFIP; (2) a three-year delay in the
mandatory purchase requirement for certain properties in newly
designated Special Flood Hazard Areas (SFHAs); (3) a phase-in
of full-risk, actuarial rates for areas newly designated as
Special Flood Hazard; (4) a reinstatement of the Technical
Mapping Advisory Council; and (5) an emphasis on greater
private sector participation in providing flood insurance
coverage.

Background and Need for Legislation

In 1968, Congress created the National Flood Insurance
Program (NFIP) to address the nation's flood exposure and the
need to alleviate taxpayers' responsibility for flood losses
paid out in the form of post-disaster relief following annual
flooding and severe flooding following hurricanes. At the time,
Congress recognized that the inherent challenges of managing
flood risk were too great for the private sector and that no
viable private sector insurance alternative existed. The Flood
Disaster Protection Act of 1973 established a mandatory flood
insurance purchase requirement for structures located in
identified Special Flood Hazard Areas.
Under the 1973 Act, Federally regulated lenders were
obligated to require flood insurance on any mortgage issued or
guaranteed by the Federal government in a designated SFHA in a
participating community. By 1994, lax enforcement of the
mandatory purchase requirements led Congress to require lenders
to purchase coverage on behalf of--and bill premiums to--
mortgagees who failed to purchase coverage on their own (called
``forced placed insurance''). Since 1994, lenders who fail to
enforce the mandatory purchase requirement have been subject to
civil penalties.
Eligible homeowners, renters, and business owners purchase
coverage under the program either directly from the NFIP or,
more often, from private insurers that voluntarily participate
in the Write Your Own (WYO) program. WYO insurers take
responsibility for policy administration and claims processing
but assume no financial risk in settling claims. As of 2010,
there are approximately 5.6 million residential and commercial
policyholders under the NFIP.
The NFIP is administered by the Federal Emergency
Management Agency (FEMA), which is housed in the Department of
Homeland Security. The NFIP reduces future flood losses
through: (i) flood hazard identification; (ii) floodplain
management (e.g., land use controls and building codes); and
(iii) insurance protection. The NFIP generated premium income
of approximately $3.3 billion in 2010. The 2005 hurricane
season resulted in significant claims which the program's
annual premium income could not cover. To pay the claims, the
NFIP borrowed from the U.S. Treasury. Prior to 2005, the NFIP's
borrowing authority had been limited by statute to $1.5
billion. Congress made up for the shortfall by increasing the
program's borrowing authority three times between September
2005 and January 2007 (from $1.5 billion to $20.8 billion). The
NFIP currently owes $17.775 billion to the U.S. Treasury.
Congress last passed a long-term NFIP reauthorization and
reform bill in 2004 (P.L. 108-264). The House and Senate each
passed significant reform measures during the 110th Congress
but could not agree on final legislation. Since September 2008,
the NFIP has been extended eleven times; the program
authorization has lapsed three times during that same time
period. Last year, after several short-term extensions and
three temporary lapses in the program, Congress extended the
current program through September 30, 2011. These short-term
extensions and lapses in the program have created needless
uncertainty in the residential and commercial real estate
sectors in communities across the country.
Without flood insurance from the NFIP, homebuyers or
businesses are unable to complete real estate closings on
properties located in SFHAs. From an insurance business
perspective, WYO companies that voluntarily participate in the
NFIP find it difficult to continue participating, given the
uncertainty of the NFIP authorization.
In administering the NFIP, FEMA: (i) identifies and maps
flood-prone areas eligible to participate in the program; and
(ii) sets land use controls and building codes that flood-prone
communities are required to adopt and enforce in order to
participate in the program. FEMA issues Flood Insurance Rate
Maps (FIRMs) that delineate SFHAs, determined to have a ``one
chance in 100'' of flooding in any given year (the ``100-year
floodplain''). Because FIRMs determine where and at what rate
insurance under the program is required, outdated or inaccurate
FIRMs result in flood-prone properties either being left out of
the program or being charged insufficient rates. FEMA currently
is engaged in a multi-year flood map modernization program to
update, revise, and digitize more than 20,000 flood maps, some
of which date back to the 1970s. The revising, updating and
promulgation of these new flood maps has drawn considerable
attention around the country as revised SFHAs include
properties not previously required to purchase flood insurance.
Under the NFIP, FEMA has established minimum flood plain
management regulations that communities must adopt and enforce
in order to be eligible for insurance under the program.
Related to this land-use function, the NFIP includes mitigation
programs, under which the Federal government purchases
properties subject to repeated flood losses and relocates
property owners to lower risk areas.
The NFIP has a two-tiered rate structure: (i) a subsidized
pre-FIRM rate for structures built before the 1974 mandatory
purchase requirement went into effect for all FIRM properties;
and (ii) an ``actuarial'' rate for structures built or
substantially improved after 1974. Actuarial rates for the NFIP
are not the same as actuarial rates for private market-based
insurance, however. Under the NFIP, the actuarial rate has been
less than the rate that would be charged for private, market-
based flood insurance coverage. Pre-FIRM rates are determined
through a Federal rule-making process with criteria designed to
encourage participation in the program and not, by definition,
to generate premium income sufficient to pay anticipated claims
on pre-FIRM properties.
Congress initially appropriated funds to subsidize the
difference between pre-FIRM and ``actuarial'' rates, expecting
that, over time, the percentage of pre-FIRM structures would
decline and that most or all of the structures insured under
the program would be subject to ``actuarial'' rates. These
appropriations ended in 1985; however, pre-FIRM structures
continue to represent approximately 24 percent of structures
insured under the NFIP (there are currently more than a million
pre-FIRM properties). Between 1985 and 2005, the NFIP used its
``actuarial'' rate premiums, interest earned on those premiums,
and borrowing authority to cover any shortfalls that resulted
from the program's two-tier rate structure.
The program's ``actuarial'' rates also are designed, in
part, to encourage participation in the program. As a result,
these ``actuarial'' rates do not follow traditional
underwriting methods designed to generate premium income
sufficient to pay all reasonably anticipated claims and
expenses. Instead, rates under the program are designed only to
generate annual premium income sufficient to cover expenses and
the average annual claims paid under the program since 1978. In
``bad'' years, when actual annual claims have exceeded the
program's average annual claims, the NFIP has used its
borrowing authority to make up the shortfall. In ``good''
years, when average annual claims have exceeded actual annual
claims, the NFIP has either used surplus premiums to repay
funds borrowed in ``bad'' years or has saved surplus premiums
to cover above average claims in future ``bad'' years.
Since 2006, the Government Accountability Office (GAO) has
identified the NFIP as ``high-risk'' because of inadequate
management and insufficient funds. H.R. 1309 institutes reforms
that will improve NFIP's financial stability, reduce the burden
on taxpayers, and facilitate the creation of a private market
that eliminates taxpayer risk over the long-term.

Hearings

The Subcommittee on Insurance, Housing and Community
Opportunity held a hearing on March 11, 2011 entitled
``Legislative Proposals to Reform the National Flood Insurance
Program.'' The following witnesses testified:

Panel One

Orice Williams Brown, Managing Director,
Government Accountability Office
Sally McConkey, Vice Chair, Association of
State Flood Plain Managers and Manager, Coordinated
Hazard Assessment and Mapping Program, Illinois State
Water Survey

Panel Two

Stephen Ellis, on behalf of the SmarterSafer
Coalition, and Vice President, Taxpayers for Common
Sense, Washington, D.C.
Terry Sullivan, Chair, Committee on Flood
Insurance, National Association of REALTORS and Owner,
Sullivan Realty, Spokane, Washington
Spencer Houldin, Chair, Government Affairs
Committee, Independent Insurance Agents and Brokers of
America and President, Ericson Insurance Services,
Washington Depot, Connecticut
Franklin Nutter, President, Reinsurance
Association of America, Washington, D.C.
Sandra G. Parrillo, Chair, National
Association of Mutual Insurance Companies and President
and CEO of Providence Mutual Fire Insurance Company,
Warwick, Rhode Island
Donna Jallick, on behalf of the Property
Casualty Insurers Association of America, and Vice
President, Flood Operations, Harleysville Insurance,
Harleysville, Pennsylvania
Barry Rutenberg, First Vice Chairman,
National Association of Home Builders, Washington, D.C.
The Subcommittee on Insurance, Housing and Community
Opportunity held a hearing on April 1, 2011 entitled
``Legislative Proposals to Reform the National Flood Insurance
Program, Part II.'' There was one witness: The Honorable W.
Craig Fugate, Administrator, Federal Emergency Management
Agency.

Committee Consideration

The Subcommittee on Insurance, Housing and Community
Opportunity met in open session on April 8, 2011 and ordered
H.R. 1309, Flood Insurance Reform Act of 2011, as amended,
favorably reported to the Full Committee by a voice vote.
The Committee on Financial Services met in open session on
May 12, 2011 and ordered H.R. 1309, Flood Insurance Reform Act
of 2011, as amended, favorably reported to the House by a
record vote of 54 yeas and 0 nays (Record vote no. FC-28).

Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Chairman Bachus to report the bill, as amended, to
the House with a favorable recommendation was agreed to by a
record vote of 54 yeas and 0 nays (Record vote no. FC-28). The
names of Members voting for and against follow:

RECORD VOTE NO. FC-28
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus....................... X ........ ........ Mr. Frank (MA)..... X ........ ........
Mr. Hensarling................... X ........ ........ Ms. Waters......... X ........ ........
Mr. King (NY).................... X ........ ........ Ms. Maloney........ X ........ ........
Mr. Royce........................ X ........ ........ Mr. Gutierrez...... ....... ........ ........
Mr. Lucas........................ X ........ ........ Ms. Velazquez...... X ........ ........
Mr. Paul......................... ....... ........ ........ Mr. Watt........... X ........ ........
Mr. Manzullo..................... X ........ ........ Mr. Ackerman....... ....... ........ ........
Mr. Jones........................ X ........ ........ Mr. Sherman........ X ........ ........
Mrs. Biggert..................... X ........ ........ Mr. Meeks.......... ....... ........ ........
Mr. Gary G. Miller (CA).......... X ........ ........ Mr. Capuano........ X ........ ........
Ms. Capito....................... X ........ ........ Mr. Hinojosa....... X ........ ........
Mr. Garrett...................... X ........ ........ Mr. Clay........... X ........ ........
Mr. Neugebauer................... X ........ ........ Mrs. McCarthy (NY). ....... ........ ........
Mr. McHenry...................... X ........ ........ Mr. Baca........... ....... ........ ........
Mr. Campbell..................... X ........ ........ Mr. Lynch.......... X ........ ........
Ms. Bachmann..................... X ........ ........ Mr. Miller (NC).... X ........ ........
Mr. McCotter..................... X ........ ........ Mr. David Scott X ........ ........
(GA).
Mr. McCarthy (CA)................ X ........ ........ Mr. Al Green (TX).. X ........ ........
Mr. Pearce....................... X ........ ........ Mr. Cleaver........ X ........ ........
Mr. Posey........................ X ........ ........ Ms. Moore.......... X ........ ........
Mr. Fitzpatrick.................. X ........ ........ Mr. Ellison........ ....... ........ ........
Mr. Westmoreland................. X ........ ........ Mr. Perlmutter..... X ........ ........
Mr. Luetkemeyer.................. X ........ ........ Mr. Donnelly....... X ........ ........
Mr. Huizenga..................... X ........ ........ Mr. Carson......... X ........ ........
Mr. Duffy........................ X ........ ........ Mr. Himes.......... X ........ ........
Ms. Hayworth..................... X ........ ........ Mr. Peters......... X ........ ........
Mr. Renacci...................... X ........ ........ Mr. Carney......... X ........ ........
Mr. Hurt......................... X
Mr. Dold......................... X
Mr. Schweikert................... X
Mr. Grimm........................ X
Mr. Canseco...................... X
Mr. Stivers...................... X
Mr. Fincher...................... X
----------------------------------------------------------------------------------------------------------------

During consideration of H.R. 1309, the following amendments
were considered:
1. An amendment offered by Mr. Hensarling, no. 11, to
strike the provision allowing FEMA to provide, under certain
circumstances, additional coverage for business interruption
and cost of living expenses, was not agreed to by a record vote
of 9 yeas, 38 nays and 1 present (Record vote no. FC-26).

RECORD VOTE NO. FC-26
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus........................ ....... X ........ Mr. Frank (MA)....... ...... X ........
Mr. Hensarling.................... X ....... ........ Ms. Waters........... ...... X ........
Mr. King (NY)..................... ....... X ........ Mrs. Maloney......... ...... X ........
Mr. Royce......................... X ....... ........ Mr. Gutierrez........ ...... ....... ........
Mr. Lucas......................... ....... X ........ Ms. Velazquez........ ...... X ........
Mr. Paul.......................... ....... ....... ........ Mr. Watt............. ...... X ........
Mr. Manzullo...................... ....... X ........ Mr. Ackerman......... ...... ....... ........
Mr. Jones......................... ....... X ........ Mr. Sherman.......... ...... X ........
Mrs. Biggert...................... ....... X ........ Mr. Meeks............ ...... ....... ........
Mr. Gary G. Miller (CA)........... ....... X ........ Mr. Capuano.......... ...... X ........
Mrs. Capito....................... ....... X ........ Mr. Hinojosa......... ...... X ........
Mr. Garrett....................... X ....... ........ Mr. Clay............. ...... X ........
Mr. Neugebauer.................... X ....... ........ Mrs. McCarthy (NY)... ...... ....... ........
Mr. McHenry....................... X ....... ........ Mr. Baca............. ...... ....... ........
Mr. Campbell...................... X ....... ........ Mr. Lynch............ ...... X ........
Mrs. Bachmann..................... X ....... ........ Mr. Miller (NC)...... ...... X ........
Mr. McCotter...................... ....... X ........ Mr. David Scott (GA). ...... X ........
Mr. McCarthy (CA)................. ....... ....... ........ Mr. Al Green (TX).... ...... X ........
Mr. Pearce........................ ....... X ........ Mr. Cleaver.......... ...... X ........
Mr. Posey......................... ....... ....... ........ Ms. Moore............ ...... X ........
Mr. Fitzpatrick................... ....... ....... X Mr. Ellison.......... ...... ....... ........
Mr. Westmoreland.................. ....... ....... ........ Mr. Perlmutter....... ...... X ........
Mr. Luetkemeyer................... ....... X ........ Mr. Donnelly......... ...... X ........
Mr. Huizenga...................... ....... X ........ Mr. Carson........... ...... ....... ........
Mr. Duffy......................... ....... X ........ Mr. Himes............ ...... X ........
Ms. Hayworth...................... X ....... ........ Mr. Peters........... ...... X ........
Mr. Renacci....................... ....... X ........ Mr. Carney........... ...... ....... ........
Mr. Hurt.......................... X ....... ........
Mr. Dold.......................... ....... X ........
Mr. Schweikert.................... ....... ....... ........
Mr. Grimm......................... ....... X ........
Mr. Canseco....................... ....... X ........
Mr. Stivers....................... ....... X ........
Mr. Fincher....................... ....... X ........
----------------------------------------------------------------------------------------------------------------

2. An amendment offered by Mr. Hensarling, no. 21, to
eliminate all existing pre-FIRM subsidized rate discounts for
properties in the NFIP and phase-in full actuarial rates for
those properties, was not agreed to by a record vote of 14 yeas
and 38 nays (Record vote no. FC-27).

RECORD VOTE NO. FC-27
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus........................ ....... X ........ Mr. Frank (MA)....... ...... X ........
Mr. Hensarling.................... X ....... ........ Ms. Waters........... ...... X ........
Mr. King (NY)..................... ....... X ........ Mrs. Maloney......... ...... X ........
Mr. Royce......................... X ....... ........ Mr. Gutierrez........ ...... ....... ........
Mr. Lucas......................... ....... X ........ Ms. Velazquez........ ...... X ........
Mr. Paul.......................... ....... ....... ........ Mr. Watt............. ...... X ........
Mr. Manzullo...................... ....... X ........ Mr. Ackerman......... ...... ....... ........
Mr. Jones......................... ....... X ........ Mr. Sherman.......... ...... X ........
Mrs. Biggert...................... ....... X ........ Mr. Meeks............ ...... ....... ........
Mr. Gary G. Miller (CA)........... ....... X ........ Mr. Capuano.......... ...... X ........
Mrs. Capito....................... ....... X ........ Mr. Hinojosa......... ...... X ........
Mr. Garrett....................... X ....... ........ Mr. Clay............. ...... X ........
Mr. Neugebauer.................... X ....... ........ Mrs. McCarthy (NY)... ...... ....... ........
Mr. McHenry....................... X ....... ........ Mr. Baca............. ...... ....... ........
Mr. Campbell...................... ....... X ........ Mr. Lynch............ ...... X ........
Mrs. Bachmann..................... X ....... ........ Mr. Miller (NC)...... ...... X ........
Mr. McCotter...................... X ....... ........ Mr. David Scott (GA). ...... X ........
Mr. McCarthy (CA)................. X ....... ........ Mr. Al Green (TX).... ...... X ........
Mr. Pearce........................ X ....... ........ Mr. Cleaver.......... ...... X ........
Mr. Posey......................... ....... ....... ........ Ms. Moore............ ...... X ........
Mr. Fitzpatrick................... ....... X ........ Mr. Ellison.......... ...... ....... ........
Mr. Westmoreland.................. X ....... ........ Mr. Perlmutter....... ...... X ........
Mr. Luetkemeyer................... ....... X ........ Mr. Donnelly......... ...... X ........
Mr. Huizenga...................... ....... X ........ Mr. Carson........... ...... ....... ........
Mr. Duffy......................... ....... X ........ Mr. Himes............ ...... X ........
Ms. Hayworth...................... X ....... ........ Mr. Peters........... ...... X ........
Mr. Renacci....................... X ....... ........ Mr. Carney........... ...... X ........
Mr. Hurt.......................... X ....... ........
Mr. Dold.......................... ....... X ........
Mr. Schweikert.................... X ....... ........
Mr. Grimm......................... ....... X ........
Mr. Canseco....................... ....... X ........
Mr. Stivers....................... ....... X ........
Mr. Fincher....................... ....... X ........
----------------------------------------------------------------------------------------------------------------

The following amendments and motion were also considered by
the Committee:
1. An amendment offered by Mrs. Biggert, no. 1, to make
technical changes, was agreed to by voice vote.
2. An amendment offered by Ms. Waters, no. 2, to allow for
mitigation grants for repetitive flood loss properties to be
provided directly to homeowners, was agreed to by voice vote.
3. An amendment offered by Mr. Green, no. 3a, to an
amendment offered by Mr. Schweikert, no. 3, to add ``if
possible'' after ``percent'' on page 1 line 8, was agreed to by
Unanimous Consent.
4. An amendment offered by Mr. Schweikert, no. 3, as
amended by an amendment offered by Mr. Green, no. 3a, to
require FEMA to report on the policies and procedures that it
can implement, to limit the number of policies in its NFIP
Direct program to less than 10 percent, and to require FEMA to
notify all holders of policies transferred to the NFIP Direct
program of their options to purchase flood insurance directly
from another insurance company, was agreed to by voice vote.
5. An amendment offered by Mrs. McCarthy of NY, no. 4, to
make homeowners in newly mapped areas subject to the 5-year
phase-in of rates eligible for FEMA's discounted Preferred Risk
Premium (PRP) rate, was agreed to by voice vote.
6. An amendment offered by Mr. Lucas, no. 5, to allow
lenders purchasing forced place insurance for homeowners to
charge for such insurance starting on the date on which the
previous flood insurance policy had lapsed, was agreed to by
voice vote.
7. An amendment offered by Mrs. McCarthy of NY, no. 6, to
direct FEMA to notify elected officials when there are changes
or updates to a floodplain area or flood risk zones, was agreed
to by voice vote.
8. An amendment offered by Mr. Luetkemeyer and Mr. Renacci,
no. 7, to clarify Congressional intent regarding residential
and commercial coverage limits, was agreed to by voice vote.
9. An amendment offered by Mr. Frank, no. 8, to allow
certain properties with swimming pools enclosed with non-
supporting breakaway walls to be eligible for participation in
the NFIP, was agreed to by voice vote.
10. An amendment offered by Mr. Westmoreland, no. 9, to
make technical and clarifying changes to language exempting
elevated structures from the mandatory purchase requirement,
was agreed to by voice vote.
11. An amendment offered by Mr. Watt, no. 10a, to an
amendment offered by Mr. Watt, no. 10, to add representation
for state and local government officials on the Technical
Mapping Advisory Committee including at least one local levee
flood manager or executive, was agreed to by Unanimous Consent.
12. An amendment offered by Mrs. Biggert, no. 10b, to an
amendment offered by Mr. Watt, no. 10, to have the Council
``consider,'' not ``ensure,'' the most efficient technology and
data for flood risk data, models and maps, was offered and
withdrawn.
13. An amendment offered by Mr. Watt, no. 10, as amended by
an amendment offered by Mr. Watt, no. 10a, to add
representation for state and local government officials on the
Technical Mapping Advisory Committee and ensure new maps
incorporate spatial database technology and accurate ground and
bathymetric elevation data, was agreed to by voice vote.
14. An amendment offered by Ms. Moore, no. 12, to require
FEMA and GAO to conduct a study to assess options, methods, and
strategies for offering voluntary community-based flood
insurance policy options, was agreed to by voice vote.
15. An amendment offered by Mr. Neugebauer and Mr. Dold,
no. 13, to direct FEMA to study and report to Congress on the
impact, effectiveness, and feasibility of including widely used
and nationally recognized building codes as part of its
floodplain management criteria, was agreed to by voice vote.
16. An amendment offered by Ms. Waters, no. 14, to allow
flood insurance outreach activities to be an eligible use of
CDBG funds, was agreed to by voice vote.
17. An amendment offered by Ms. Waters, no. 15, to allow
homeowners to be reimbursed for certain costs associated with a
successful challenge to bona fide mapping error made by FEMA
resulting in a Letter of Map Amendment (LOMA), was agreed to by
voice vote.
18. An amendment offered by Mr. Fitzpatrick, no. 16, to
require FEMA to assess and issue a report on the capacity of
the private reinsurance market for flood insurance risk, was
agreed to by voice vote.
19. An amendment offered by Ms. Waters, no. 17, to allow
for two additional one-year extensions of mandatory purchase
delay for communities that demonstrate, to the satisfaction of
FEMA, their need for additional time to complete flood control
projects, appeals, or for other extenuating circumstances, was
offered and withdrawn.
20. An amendment offered by Mr. Canseco, no. 18, to exclude
second homes and vacation homes from receiving ``phase-in''
subsidy rates in newly mapped areas, was offered and withdrawn.
21. An amendment offered by Ms. Waters, no. 19, to
reauthorize the severe repetitive loss pilot program, was not
agreed to by voice vote.
22. An amendment offered by Mr. Westmoreland, no. 20, to
strike the annual inflation adjustment and replace it with a
one-time adjustment to 2011, and to require any policyholder
that opts for higher coverage due to the adjusted coverage
limits to pay the full actuarial rate, was agreed to by voice
vote.
23. An amendment offered by Mr. Canseco, no. 22, to exclude
second homes and vacation homes from receiving ``phase-in''
subsidy rates in newly mapped areas, except in cases of a
residential property occupied by its owner or a bona fide
tenant as a primary residence, was agreed to by voice vote.
24. An amendment offered by Mrs. Biggert, no. 23, to
require the National Academy of Sciences to conduct a study on
graduated risk and report back to Congress, was agreed to by
voice vote.
25. An amendment offered by Mr. Luetkemeyer, Mr. Pearce and
Mr. Paul, no. 24, to prohibit the FEMA Administrator from
issuing or updating flood insurance maps that do not factor in
the actual protection afforded by existing levees regardless of
their accreditation status, was agreed to by voice vote.
26. An amendment offered by Mr. Westmoreland, no. 25, to
provide for actuarial rates for the owners of severe repetitive
loss properties who refuse offers of mitigation or purchase
assistance, was agreed to by voice vote.
27. An amendment offered by Mr. Bachus, Mrs. Capito, and
Mr. Schweikert, no. 26, to require lenders to accept
substantially similar private flood insurance coverage as a
satisfaction of a mandatory flood insurance purchase
requirement, was agreed to by voice vote.
28. A motion offered by Mr. Bachus, to move the previous
question on H.R. 1309, was agreed to by voice vote.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held a hearing and
made findings that are reflected in this report.

Performance Goals and Objectives

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H.R. 1309, the Flood Insurance Reform Act of 2011,
reauthorizes the National Flood Insurance Program (NFIP)
through September 30, 2016, and amends the National Flood
Insurance Act with reforms needed to ensure the immediate and
near-term fiscal and administrative health of the NFIP. The
bill also ensures the NFIP's continued viability by encouraging
broader participation in the program, increasing financial
accountability, eliminating unnecessary rate subsidies, and
updating the program to meet the needs of the 21st century. The
key provisions of H.R. 1309 include: (1) a five-year
reauthorization of the NFIP; (2) a three-year delay in the
mandatory purchase requirement for certain properties in newly
designated Special Flood Hazard Areas (SFHAs); (3) a phase-in
of full-risk, actuarial rates for areas newly designated as
Special Flood Hazard; (4) a reinstatement of the Technical
Mapping Advisory Council; and (5) an emphasis on greater
private sector participation in providing flood insurance
coverage.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.

Committee Cost Estimate

The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.

Congressional Budget Office Estimates

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:

June 8, 2011.
Hon. Spencer Bachus,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1309, the Flood
Insurance Reform Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Daniel
Hoople.
Sincerely,
Douglas W. Elmendorf.
Enclosure.

H.R. 1309--Flood Insurance Act of 2011

Summary: H.R. 1309 would authorize the National Flood
Insurance Program (NFIP) of the Federal Emergency Management
Agency (FEMA) to enter into and renew flood insurance policies
through fiscal year 2016. Under current law, that authority
will expire at the end of fiscal year 2011.
The legislation also would make a number of changes to the
NFIP aimed at improving the financial status of the program.
Under both current law and this legislation, the NFIP may
borrow an additional $3 billion from the Treasury (the
program's current debt stands at $17.8 billion). Assuming a
small probability of a rare catastrophic event, CBO expects
that this additional borrowing authority will be exhausted in
2014. The changes made by this legislation would reduce the
need to borrow from the Treasury--a source of direct spending--
by a total of $165 million in 2013 and 2014, CBO estimates.
However, because the program would continue to operate with an
annual net deficit, reduced borrowing in those years would be
offset by increased borrowing in 2015, resulting in no net
effect on direct spending over the next 10 years.
CBO also estimates that the changes made by H.R. 1309 would
increase net income to the NFIP by $4.2 billion over the 2012-
2021 period, improving the financial status of the program by
that amount. However, we expect that additional income earned
by the program would be used to fulfill existing obligations
that would otherwise be delayed under current law, resulting in
no net effect on direct spending.
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending. Enacting this
legislation would not affect revenues.
H.R. 1309 would authorize a number of other activities,
including establishing a Technical Mapping Advisory Council,
updating flood maps to incorporate new standards within five
years, and issuing several reports on the NFIP. The cost of
some of those activities would be offset by fee collections
paid by policyholders; however, CBO estimates that other
provisions would cost $317 million over the 2012-2016 period,
subject to appropriation of the necessary amounts.
H.R. 1309 would impose intergovernmental and private-sector
mandates, as defined in the Unfunded Mandates Reform Act
(UMRA), on public and private mortgage lenders. Because the
mandates would require only small changes in existing industry
practice, CBO expects that the cost to comply with the mandates
would be small relative to the annual thresholds established in
UMRA for intergovernmental and private-sector mandates ($71
million and $142 million in 2011, respectively, adjusted
annually for inflation).
Estimated cost to the federal government: The estimated
budgetary impact of H.R. 1309 is shown in Table 1. The costs of
this legislation fall within budget function 450 (community and
regional development).

TABLE 1.--CHANGES IN DIRECT SPENDING AND SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 1309
----------------------------------------------------------------------------------------------------------------
By fiscal year in millions of dollars--
-----------------------------------------------------------------------
2012 2013 2014 2015 2016 2012-2016 2012-2021
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Estimated Budget Authority.............. 0 0 0 0 0 0 0
Estimated Outlays....................... 0 -45 -120 165 0 0 0

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

New Mapping Standards:
Estimated Authorization Level......... 0 100 130 135 140 505 750
Estimated Outlays..................... 0 20 66 100 128 314 745
Studies and Reports:
Estimated Authorization Level....... 1 1 * * * 3 4
Estimated Outlays................... 1 1 * * * 3 4
Total Changes:
Estimated Authorization Level....... 1 101 130 135 140 508 754
Estimated Outlays................... 1 21 66 100 128 317 749
----------------------------------------------------------------------------------------------------------------
Note: * = between $0 and $500,000.

Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted by the end of fiscal year 2011 and
that amounts estimated to be necessary will be appropriated for
each year.

Background

Authority to Underwrite Coverage. The NFIP was established
to encourage the purchase of flood insurance by property owners
located in communities that adopt minimum guidelines for
floodplain management and to enforce building codes designed to
mitigate flood damages. Flood insurance coverage is mandatory
for properties located within an area designated as having at
least a 1 percent chance of being flooded in any year (such an
area is known as a Special Flood Hazard Area, or SFHA) and is
financed by a federally regulated lending institution, a
government-sponsored enterprise for housing, or a federal
lender. Property owners not receiving financing or coverage
from those entities or located outside a SFHA may purchase
flood insurance coverage from a private carrier or the NFIP at
their discretion. Under current law, FEMA is authorized to
underwrite the sale and renewal of flood insurance policies
through September 30, 2011.
Subsidized Premiums. Throughout the program's history, FEMA
has charged premiums well below the amount necessary to offset
the expected cost (also known as the full-risk or actuarial
cost) for properties built before a community's Flood Insurance
Rate Map (FIRM) was completed, or before 1975, whichever is
later. Those properties, known as pre-FIRM properties, make up
over 20 percent of all NFIP policies. FEMA estimates that pre-
FIRM policyholders pay average premiums that are about 40
percent to 45 percent of the full-risk cost. Some post-FIRM
properties also receive discounted premiums under current law;
however, they are few in number (less than 1 percent of all
NFIP policies) relative to pre-FIRM properties. It is unclear
whether other property owners receive premium subsidies not
directly specified in law.\1\ For this estimate, CBO assumes
that all policies not directly receiving subsidies will
generate a sufficient amount of income to cover expected claims
and related expenses over time.
---------------------------------------------------------------------------
\1\See Congressional Budget Office, The National Flood Insurance
Program: Factors Affecting Actuarial Soundness (November 2009).
---------------------------------------------------------------------------
Ability to Pay Claims and Other Expenses. The National
Flood Insurance Fund (NFIF) is the sole source of claims
payments and other expenses associated with the NFIP. Under
current law, the fund is credited with premium and fee receipts
from policyholders, annual appropriations, interest earned on
fund balances, and amounts borrowed from the Treasury. As of
February 2011, the NFIP insured approximately 5.6 million
policies with written annual premiums in force of $3.4 billion.
For fiscal year 2011, the Congress provided the fund with $169
million in appropriations, offset by an equivalent amount of
fee collections from policyholders (see Public Law 112-10). No
interest income or borrowing is expected to occur this year,
CBO estimates.
The majority of the NFIP's expenses consist of payments for
insured claims resulting from outstanding coverage in force,
which currently stands at about $1.2 trillion. FEMA estimates
that claims payments in 2011 will total about 43.5 percent of
premium income, based on the historical experience of policies
and coverage amounts currently insured by the program. Actual
expenses for insured claims, however, have varied widely by
year, ranging from less than 10 percent of premium to almost
800 percent of premium (based on calendar-year totals).
In most years, annual appropriations along with premium and
fee income have been sufficient to cover the annual expenses of
the NFIP. Prior to 2005, it was occasionally necessary for the
program to borrow from the Treasury to meet expenses during
greater-than-average-loss years; however, that borrowing was
relatively small (less than $1 billion) and was repaid with
interest. Nonetheless, because of the large subsidy that exists
for many policies, CBO estimates that the program will--on
average--have greater annual expenses than revenue. This
differential became apparent in the aftermath of Hurricanes
Katrina, Rita, and Wilma in 2005. Because of the severe and
widespread damages experienced during those storms, the program
borrowed an unprecedented $16.7 billion in fiscal year 2006 to
cover claims and interest expenses. NFIP's current debt to the
Treasury stands at $17.8 billion. It is highly unlikely that
the program will have sufficient income to repay those borrowed
funds within the next 10 years.
Assuming actuarial-level losses\2\ in 2012 and beyond, the
NFIP will need to continue borrowing from the Treasury until
its line of credit (currently set at $20.7 billion) is
exhausted, which CBO estimates will occur in 2014 under current
law. At that point, because expenses of the program may only be
paid to the extent that resources in the NFIF are available,
net spending would be zero. Payments for claims and other
expenses would be delayed until sufficient resources became
available to the NFIF from premium and fee income.
---------------------------------------------------------------------------
\2\Actuarial-level losses take into account the full range of
possible losses, including rare catastrophic events like Hurricane
Katrina.
---------------------------------------------------------------------------

Direct Spending

CBO estimates that enacting H.R. 1309 would have no net
impact on direct spending over the 2012-2016 or 2012-2021
periods.
Section 2 would provide FEMA with the authority to continue
selling and renewing policies through fiscal year 2016. While
this authority would otherwise expire at the end of the current
fiscal year, the program is assumed to continue in the CBO
baseline, consistent with the rules governing baseline
projections for mandatory programs. Thus, extending the NFIP
under this legislation would have no effect on direct spending
relative to the baseline.
In addition to extending the NFIP, H.R. 1309 would make a
number of changes to the program. The two changes that would
affect direct spending are:
Premium increases for some pre-FIRM
policyholders; and
Temporary discounted premiums for certain
properties located in such areas.
Other changes that CBO estimates would affect the amount of
flood insurance coverage and the amount of premiums collected
but would not affect net direct spending include:
Increasing the minimum-policy deductible;
Increasing the average annual limit on
premium growth;
Increasing the maximum coverage for
structure and contents policies; and
Introducing new lines of insurance for
additional living expense and business interruption.
The estimated aggregate effects of those changes are listed
in Table 2.

TABLE 2.--CHANGE IN NET INCOME TO THE NFIP UNDER H.R. 1309 OVER SELECTED
TIME PERIODS
------------------------------------------------------------------------
By fiscal year in millions of
dollars--
--------------------------------------
2012-2014 2012-2016 2012-2021
------------------------------------------------------------------------
Income:
Premium Increases for Some 222 936 5,364
Pre-FIRMs...................
Temporary Discounted Premiums -38 -84 -180
--------------------------------------
Total Changes to Revenues 184 852 5,184
Expenses:
Increased Payments to WYO 56 259 1,584
Companies...................
Reduced Claims Due to Dropped -37 -125 -564
Policies....................
--------------------------------------
Total Changes to Expenses 19 134 1,020
Change in Net Income\a\.......... 165 718 4,164
Cumulative Net Effect on Direct -165 0 0
Spending........................
------------------------------------------------------------------------
\a\After the NFIP's borrowing authority has been exhausted, changes in
net income are reflected as a corresponding increase or decrease in
the delay in claims payments expected to be experienced by NFIP
policyholders and thus do not affect direct spending.
Note: FIRM = Flood Insurance Rate Map; WYO = Write-Your-Own.

Overall, CBO estimates that changes made by H.R. 1309 would
increase net income to the NFIP by $165 million through 2014.
CBO expects that the flood insurance program will not have
exhausted its remaining borrowing authority during this period.
Therefore, additional net income earned by the NFIP over that
period would reduce expected borrowing from the Treasury--a
source of direct spending. However, assuming annual program
deficits,\3\ CBO estimates that any reduction in direct
spending generated by lower borrowing in those years will be
offset by increased direct spending from additional borrowing
in 2015, resulting in no net effect on the federal budget over
the next 10 years.
---------------------------------------------------------------------------
\3\CBO estimates that changes made by H.R. 1309 would reduce the
aggregate subsidy built into premiums under current law by over 50
percent by 2021; however, because the legislation would not completely
eliminate subsidies for all policies, we estimate that the program
would continue to operate under an annual deficit.
---------------------------------------------------------------------------
After 2014, the changes made by H.R. 1309 would not affect
net direct spending because CBO expects that any additional
income earned by the program would be used to fulfill
obligations (mostly claims payments) that would otherwise be
delayed. However, enactment of the legislation would improve
the financial status of the program by reducing this expected
``backlog'' of unfulfilled payments. Under current law, CBO
estimates that delayed payments would total $3.6 billion by
2016 and $12.6 billion by 2021. Under H.R. 1309, we estimate
that the ``backlog'' would total $2.9 billion in 2016 and $8.4
billion in 2021, a reduction of about $700 million and $4.2
billion, respectively.
Premium Increases for Some Pre-FIRM Properties. Section 5
would direct FEMA to increase flood insurance premiums for pre-
FIRM properties that are: nonresidential or nonprimary
residences; residences sold to new owners; or severe repetitive
loss properties (defined as residences with at least four paid
claims greater than $5,000 or with two paid claims that
cumulatively exceed the market value of the house). One year
after enactment, all policyholders of properties fitting such
categories would begin receiving premium increases of 20
percent per year\4\ until the amount collected each year covers
the full cost of the insurance. New policies that fit such
criteria one year after enactment would immediately pay the
full-risk premium.
---------------------------------------------------------------------------
\4\The 20 percent would include some increase that FEMA would have
applied to the policy under current law; thus the actual increase in
per policy premium attributable to this legislation would be less than
20 percent.
---------------------------------------------------------------------------
Based on housing data and current policy information
obtained from FEMA, about 355,000 policies would initially be
subject to such premium increases under the bill, CBO
estimates. Those policyholders currently pay an average premium
of about $1,174 per year. Once subsidies are completely phased
out, we expect that annual premiums for those policies would
be, on average, about 2\1/4\ times greater than premium that
would otherwise be charged under current law. While some
policyholders would reduce or eliminate coverage as a result of
those increases, CBO estimates that any resulting decrease in
premium receipts would be more than offset by increases from
properties that remain in the program.
Additional premium receipts from pre-FIRM policyholders
would total $936 million over the 2012-2016 period and about
$5.4 billion over the next 10 years, CBO estimates. Under
current agreements, Write-Your-Own (WYO) companies would
receive a portion of this additional premium (about 30
percent), reflected in Table 2 as an increase in expenses.
Subsidized policyholders that drop out of the NFIP would save
the cost of paying claims on those policies, resulting in a
decrease in expenses. Altogether, CBO estimates that
implementing the premium increases outlined in the legislation
would increase net income to the NFIP by $775 million over the
next five years and by about $4.3 billion over the 2012-2021
period.
Temporary Discounted Premiums. Section 5 would direct FEMA
to charge subsidized premiums for certain properties newly
mapped into a SFHA after October 1, 2008. Under the bill,
owners of primary residences in new SFHAs would be charged 50
percent of the premium that applies under current law during
the first year following the map's effective date (or, in the
case of properties eligible for a Preferred Risk Policy
Extension,\5\ during the first year following the expiration of
that extension). The legislation requires FEMA, in each
successive year, to increase rates by 20 percent until the
premium is equal to the amount that otherwise would be charged
in the absence of this section.
---------------------------------------------------------------------------
\5\For properties newly mapped into a SFHA after October 1, 2008,
that previously qualified for a Preferred Risk Policy (PRP) premium
(i.e., could not have two or more claims or disaster relief payments of
$1,000 or more, or three losses or payments of any kind), FEMA
currently offers a discount equal to the premium the policyholder would
have paid and the PRP premium. That discount is available for two
years. For properties mapped into a SFHA after October 1, 2008, and
before January 1, 2011, the discounted premium is available for the two
renewals between January 1, 2011, and December 31, 2012.
---------------------------------------------------------------------------
That provision would create a new class of subsidized
policies within the NFIP. The cost of the subsidy would be
somewhat mitigated by the delay in the mandatory purchase
requirement under section 3 of the bill.\6\ According to the
American Institutes for Research, voluntary take-up of flood
insurance within an SFHA is about 20 percent, compared to 75
percent to 80 percent if such coverage were mandatory. Because
fewer property owners would purchase subsidized flood insurance
if coverage is voluntary, the overall cost of the new subsidy
would be lower than if coverage were mandatory.
---------------------------------------------------------------------------
\6\Section 3 would delay the requirement to purchase flood
insurance for some property owners. Upon receiving a request from a
local government, property owners placed into a SFHA because of changes
to a FIRM would not immediately be required to purchase flood
insurance. This delay in the mandatory purchase requirement would last
for a period of time to be determined by FEMA, but no longer than three
years.
---------------------------------------------------------------------------
Based on the estimated number of properties that have been
or would be placed into a SFHA, CBO estimates that implementing
this new subsidy would reduce premium income to the NFIP by
about $180 million over the next 10 years. The overall effect
of this provision on net income would be somewhat less (about
$125 million) because it also would result in reduced payments
to WYO companies.
Increase in the Minimum Policy Deductible. Section 4 would
set the minimum deductible for structural coverage at $2,000
for subsidized properties and $1,000 for nonsubsidized
properties. Under current law, FEMA has the discretion to set a
minimum deductible. For the current policy year (which began
October 2010), the standard deductible is $2,000 for most
subsidized properties and $1,000 for nonsubsidized properties;
however, pre-FIRM policyholders may reduce that deductible by
$1,000 in exchange for a higher premium. Under the bill, CBO
expects that the standard deductible would remain unchanged but
that subsidized policyholders would no longer be able to reduce
their deductible. Based on information from FEMA, CBO estimates
that about 250,000 policies (mostly for pre-FIRM properties)
would carry a higher deductible as a result of this provision,
which would reduce average insured claims for those properties
by between 5 percent and 10 percent. However, increasing the
deductible also would lower premium receipts by an equivalent
amount. As such, CBO estimates that implementing this provision
would not affect net income to the NFIP and would have no
effect on the federal budget.
Increase in Average Annual Limit on Premium Growth. Section
5 would authorize the NFIP to increase premiums within a
specific risk category by an average of up to 20 percent per
year. Under current law, the limit is 10 percent. Based on
historical experience, CBO assumes that raising this limit
would not result in consistent premium increases of more than
10 percent for most subsidized policies. (Under both current
law and H.R. 1309, actuarially rated policies are assumed to
receive premium increases necessary to cover the full cost of
the coverage.) Therefore, implementing this provision would
have no net effect on the NFIP or the federal budget.
Increase in Maximum Coverage and New Lines of Insurance.
Section 4 would adjust the total amount of flood insurance
coverage available by increasing the current limit by the level
of inflation from the end of fiscal year 1994 to enactment of
the legislation. The current limit is $350,000 ($250,000 for
structures and $100,000 for contents) for a residential policy
and $1 million ($500,000 for structures and $500,000 for
contents) for a non-residential policy. CBO estimates that the
new coverage limits would be about $520,000 and $1.5 million,
respectively. In addition, the legislation would direct FEMA to
offer optional coverage of up to $5,000 for living expenses
incurred during the loss of use of a personal residence and up
to $20,000 for partial or total business interruption.
Under the bill, the increased coverage limits and new lines
of insurance would be offered to policyholders at the full-risk
premium. For this estimate, CBO did not estimate the total
amount of new coverage that would be purchased as a result of
those provisions. We expect that any additional coverage would
increase premium receipts to the federal government as well as
claims payments and other expenses, resulting in no net effect
on the federal budget.

Spending Subject to Appropriation

CBO estimates that implementing H.R. 1309 would cost $317
million over the 2012-2016 period and $749 million over the
2012-2021 period, subject to appropriation of the necessary
amounts.
Technical Mapping Advisory Council. Section 6 would
establish a Technical Mapping Advisory Council (TMAC) to
develop and recommend new mapping standards for FIRMs. The
council would include representatives from FEMA, the U.S.
Geological Survey, the Army Corps of Engineers, other federal
agencies, state and local governments, as well as experts from
private stakeholder groups. The council would submit the new
standards to FEMA and the Congress within 12 months of
enactment and would continue to review those standards for four
additional years, at which time the council would be
terminated.
Under current law, spending for floodplain management
activities (which CBO assumes would include operations of the
new council) are subject to future appropriation acts. FEMA is
authorized to offset those costs by collecting a fee (known as
the Federal Policy Fee) from policyholders. As such, CBO
estimates that implementing this section would have no net
effect on discretionary spending over the next five years.
New Mapping Standards. Section 7 would direct FEMA to
implement new standards for FIRMs. Beginning six months after
the TMAC issues its initial set of recommendations, FEMA would
have five years to update all FIRMs to incorporate the new
standards, subject to the availability of appropriated funds.
The greatest costs likely would arise from determining the
level of protection afforded by decertified levees; however,
because the new standards would be based on recommendations
made by the TMAC and on findings from studies required in the
bill (for example, graduated risk), it is unclear how the new
standards and the cost to implement them would differ from
those currently in use. Based in part on the projected costs of
implementing FEMA's Risk Mapping, Assessment, and Planning
program (which would incorporate some of the new standards in
this section), CBO estimates implementing this section would
cost $314 million over the 2012-2016 period. Because CBO
expects the required map updating would continue through 2018
under the bill, we estimate that implementing this section
would cost an additional $431 million after 2016. All
expenditures would be subject to appropriation of the necessary
amounts.
Studies and Reports. H.R. 1309 would direct FEMA and the
Government Accountability Office (GAO) to conduct studies and
issue reports on a number of topics, including limiting the
percentage of policies directly managed by FEMA, community-
based flood insurance, building codes, varying risk behind
levees, privatization of the NFIP, and the financial status and
claims-paying ability of the program. Based on the cost of
similar studies, CBO estimates that producing the reports
required under the legislation would cost about $3 million over
the next five years, subject to appropriation of the necessary
funds.
Other Discretionary Changes. H.R. 1309 would make a number
of other changes to current law, including authorizing FEMA to
make flood mitigation grants directly to property owners (under
current law, funding is provided through communities),
authorizing the use of Community Development Block Grant funds
for building code enforcement and flood program outreach, and
authorizing the reimbursement of costs incurred by homeowners
that obtain a Letter of Map Amendment (LOMA). CBO does not
expect that changes made to mitigation or community development
grants under the bill would significantly alter the pace of
expenditures under either program. Based on information from
FEMA, reimbursements of expenses related to LOMAs could total
as much as $15 million annually; however, those costs would
likely be recouped through increases in premiums or fees paid
by policyholders, resulting in no net effect on the federal
budget.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1309 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON MAY 17, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars 2011--
-----------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact.. 0 0 -45 -120 165 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------

Intergovernmental and private-sector impact: H.R. 1309
would impose intergovernmental and private-sector mandates, as
defined in UMRA, on public and private mortgage lenders.
Because the mandates would require only small changes in
existing industry practice, CBO expects that the cost to comply
with the mandates would be small relative to the annual
thresholds established in UMRA for intergovernmental and
private-sector mandates ($71 million and $142 million in 2011,
respectively, adjusted annually for inflation).

Flood Insurance

Current law prohibits lenders from making loans for real
estate in areas at high risk for flood damage unless the
property is covered by flood insurance. This bill would require
lenders to accept flood insurance from a private company if the
policy fulfills all federal requirements for flood insurance.
Under current law, lenders also are required to purchase flood
insurance on behalf of the homeowner if, at any time during the
life of a loan, they determine that a homeowner does not have a
current policy in place. The bill would require lenders to
terminate those policies within 30 days of being notified that
the homeowner has purchased another policy. Lenders also would
have to refund any premium payments and fees made by the
homeowner for the time when both policies were in effect. Based
on information from industry sources on current practice, CBO
estimates that the cost of complying with those mandates would
be small.

Disclosure Requirements

Current law requires mortgage lenders that make federally
related mortgages (as defined in title 12, U.S.C. 2602) to
provide a good-faith estimate of the amount or range of charges
the borrower is likely to incur for specific settlement
services. (To the extent that state agencies issue loans or
other credit instruments that would be subject to the
requirements of the Real Estate Settlement Procedures Act, the
bill also would impose intergovernmental mandates.) The bill
would require such mortgage lenders to include specific
information about the availability of flood insurance in each
good-faith estimate. The mandate would require small changes in
existing disclosure requirements. Consequently, CBO estimates
that the cost of the mandate to public and private mortgage
lenders would be small.

Other Impacts

State, local, and tribal governments would benefit if funds
authorized to be appropriated for mitigation and outreach
activities related to flood hazards were made available in the
future. Any costs to those governments, including matching
funds, would be incurred voluntarily.
Estimate prepared by: Federal Costs: Daniel Hoople; Impact
on State, Local, and Tribal Governments: Melissa Merrell;
Impact on the Private Sector: Sam Wice.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.

Earmark Identification

H.R. 1309 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.

Section-by-Section Analysis of the Legislation

Section 1. Short title and table of contents

This section establishes the short title of the bill, the
Flood Insurance Reform Act of 2011.

Section 2. Extensions

This section reauthorizes the NFIP and its financing for
five years from October 1, 2011, through September 30, 2016.

Section 3. Mandatory purchase

To ease the burden on newly mapped communities, this
section establishes criteria for the temporary suspension of
the mandatory purchase requirement for one year (with the
possibility of two additional one-year suspensions) that the
requirement may be suspended if the Federal Emergency
Management Agency (FEMA) makes a finding, with respect to flood
risk mapping on a community-by-community basis and pursuant to
a formal request submitted by a local governing authority, that
one or more of the following conditions are met: (1) the
community has never been mapped as a high-risk area; (2) the
community is taking specific steps to rebuild or repair a dam
or a levee that has not been certified, or is required to be
certified, as providing adequate protection from a 100-year
flood, and the community is making adequate progress in
completing the construction work and securing the financial
commitments needed to complete the flood control project; or
(3) the community has challenged the accuracy of a dam or levee
decertification or disaccreditation, or a new or revised flood
risk map, and has filed a formal appeal.
This section also establishes that a mortgage lender or
servicer must terminate the ``force-placed'' insurance and
refund any premiums or fees paid for the period of coverage
overlap within 30 days of receiving confirmation in writing
(e.g., an insurance policy declarations page) that a property
owner has obtained flood insurance coverage.
Additionally, this section clarifies and codifies
longstanding practices that allow lenders and servicers to
collect premiums and fees incurred for coverage beginning on
the date an existing flood insurance policy lapsed or did not
provide sufficient coverage. In this circumstance, the lender
can collect fees and premiums for ``force-placed'' insurance
during the 45-day notification period.
To encourage greater private sector participation, this
section further requires lenders to accept non-NFIP backed
flood insurance coverage provided by a private entity if that
coverage meets all the same requirements as NFIP-backed flood
insurance.
This section also clarifies that private sector flood
insurance products are acceptable where they meet the
requirements of the NFIP. Like other property-casualty
insurance products, private-sector flood products and the
companies that offer them would be subject to state regulation.
This section does not create preferences either for government
or private-sector flood products; it does confirm, however,
that private sector flood insurance products could replace
Federal government products.

Section 4. Reforms of coverage terms

This section sets the minimum deductible levels at $1,000
for properties with full-risk rates and $2,000 for properties
with discounted rates. It also establishes that the maximum
coverage limits will be indexed for inflation, starting in
2012.
This section also authorizes FEMA to offer optional
coverage for additional living expenses, up to a maximum of
$5,000, as well as to offer optional coverage for the
interruption of business operations up to a maximum of $20,000,
provided that FEMA: (1) charges full-risk rates for such
coverage; (2) makes a finding that a competitive private market
for such coverage does not exist; and (3) certifies that the
NFIP has the capacity to offer such coverage without the need
to borrow additional funds from Treasury.
Additionally, this section directs FEMA to offer
policyholders the option of paying their premiums for one-year
policies in installments, and authorizes FEMA to impose higher
rates or surcharges, or to deny future access to NFIP coverage,
if property owners attempt to limit their coverage to coincide
only with the annual storm season by neglecting to pay their
premiums on schedule.

Section 5. Reforms of premium rates

This section increases the annual cap on premium rate
increases from 10 percent to 20 percent. It also provides for a
phase-in of full-risk rates for newly-mapped areas. For
properties mapped into a high-risk area, initial rates are set
at a 50 percent discount from full-risk rates, with annual rate
increases thereafter limited by the aforementioned 20 percent
annual cap. For areas eligible for the lower-cost Preferred
Risk Policy (PRP) rates, the phase-in begins after the
expiration of their PRP rates. For all properties, the phase-in
of rates only applies to residential properties occupied by
their owner or a bona fide tenant as a primary residence.
Additionally, beginning one year after enactment, the
premium rate subsidies (pre-FIRM discounts) for certain
properties in the following categories are phased-out, with
annual rate increases limited by a 20 percent annual cap:
commercial properties, second and vacation homes (i.e.,
residential properties not occupied by any individual as a
primary residence), homes sold to new owners, homes damaged or
improved (substantial flood damage exceeding 50 percent or
substantial improvement exceeding 30 percent of the fair market
value of the property), and properties with multiple flood
claims (i.e., statutorily defined severe repetitive loss
properties).
This section removes the eligibility of property owners who
allow their policies to lapse by choice to receive discounted
rates on those properties. Furthermore, the section updates the
standards by which FEMA evaluates a community's eligibility for
special flood insurance rates by considering: (1) state and
local funding, in addition to federal funding, of flood control
projects; (2) reconstruction and improvements, in addition to
construction, of flood control projects; (3) the standard of
``present value'' in evaluating the progress of work completed
on a flood control system; (4) riverine, in addition to
coastal, flood hazard areas; and (5) the assessment of
qualified private entities, instead of a federal agency, to
determine if a flood protection system is restorable.

Section 6. Technical Mapping Advisory Council

This section re-establishes the Technical Mapping Advisory
Council (Council), which operated from 1995 to 2000. The
Council would bring together the FEMA Administrator as well as
representatives of Federal agencies with mapping
responsibilities, representatives of state governments,
representatives of local governments, and private sector
experts to review and propose new mapping standards within one
year. FEMA then would be required, within six months, to revise
its criteria for updating flood hazard maps based on the
Council's recommendations. The Council also would assist FEMA
in addressing mapping issues as they arise.

Section 7. FEMA incorporation of new mapping protocols

This section requires FEMA to update flood insurance rate
maps according to revised standards recommended by the
Technical Mapping Advisory Council within six months, or to
submit a report to Congress with an explanation for any
recommendations it did not implement. This section also
provides for a temporary suspension of the existing flood
insurance mandatory purchase requirement until the new mapping
protocols are implemented for any property the owner of which
submits an elevation study documenting that the lowest level of
the property is at least 3 feet higher than the elevation of
the 100-year flood plain.

Section 8. Treatment of levees

This section prohibits FEMA from issuing or updating flood
insurance maps that do not factor in the actual protection
afforded by existing levees regardless of their accreditation
status. FEMA's former ``without levees'' policy assumed that an
existing levee or other flood control structure that does not
meet FEMA certification levels does not exist for the purposes
of mapping flood hazard areas. This section codifies FEMA's new
policy, which takes into consideration the existence of levees
and flood control structures for maps and flood insurance
rates. Therefore, FEMA's previous ``all or nothing'' approach
for mapping flood hazard areas is eliminated and allows for
``partial credit.''

Section 9. Privatization initiatives

This section directs FEMA and GAO each to assess a broad
range of options to begin privatizing the NFIP over time and to
report to Congress with recommendations in 18 months. Also, in
reviewing the full range of risks associated with flooding, the
FEMA Administrator is authorized to carry out initiatives to
determine the capacity of private insurers, reinsurers, and
financial markets to assume a portion the flood risk exposure
in the United States. These provisions also clarify the FEMA
Administrator's authority to use private market reinsurance
capacity to minimize the likelihood that the program would need
to borrow additional Treasury funds. In addition, FEMA is
directed to assess the capacity of the private reinsurance
market by seeking proposals to assume a portion of the
program's risk, and to submit a report on such assessment
within six months of enactment. Finally, this section requires
FEMA each year to assess the capacity of the NFIP to pay claims
without having to borrow from the Treasury, including its use
of private sector reinsurance, and report that assessment to
Congress.

Section 10. FEMA annual report on insurance program

This section replaces the required biennial report of FEMA
to the President with an annual report to Congress including
detailed information about the financial status of the program.

Section 11. Actuarial rates for severe repetitive loss properties
refusing mitigation or purchase offers

This section requires owners of severe repetitive loss
properties who refuse government offers of mitigation or
purchase assistance for their properties to forfeit their
subsidized rates and pay full actuarial rates.

Section 12. Mitigation assistance

This section clarifies that the demolition and rebuilding
of flood-damaged properties should be considered by FEMA as an
eligible activity for the purpose of mitigation assistance,
which must be cost-effective.

Section 13. Grants for direct funding of mitigation activities for
individual repetitive claims properties

This section allows for mitigation grants for repetitive
flood loss properties to be provided directly to homeowners.

Section 14. Notification to homeowners regarding mandatory purchase
requirement applicability and rate phase-ins

This section directs FEMA to establish an annual
notification process to inform individuals who reside in an
area having special flood hazards: (1) that they live in a such
an area; (2) what the geographical boundaries of that area are;
(3) if they are subject to the prohibition on the extension of
subsidized rates for lapsed policies; (4) that they are subject
to the existing flood insurance mandatory purchase requirement;
and (5) what other homeowners in similar areas pay (on an
estimated basis) for flood insurance.

Section 15. Notification of establishment of flood elevations

This section requires that FEMA notify Members of the House
and Senate whose districts or states would be affected when
there are changes or updates to a floodplain area or flood risk
zones.

Section 16. Notification to tenants of the availability of contents
insurance

This section requires FEMA to develop and distribute a
notice to landlords and building managers that informs tenants:
(1) if they live in an area having special flood hazards; (2)
that NFIP offers insurance for the contents of the apartment;
(3) the maximum level of that coverage; and (4) where to find
information about obtaining such coverage.

Section 17. Notification to policy holders regarding direct management
of policy by FEMA

This section requires FEMA to annually notify all holders
of policies transferred to FEMA's NFIP Direct policy servicing
program of their options to purchase flood insurance directly
from another Write-Your-Own (WYO) insurance company.

Section 18. Notice of the availability of flood insurance and escrow in
RESPA good faith estimate

This section amends the Real Estate Settlement Procedures
Act (RESPA) to disclose as part of RESPA's good faith estimate:
(1) that flood insurance is generally available from the NFIP
for homes located both in and out of a special flood hazard
area; (2) the contact information for the NFIP; and (3) that
the escrowing of flood insurance payments is required for many
loans and may be an option available under other loans.

Section 19. Reimbursement for costs incurred by homeowners obtaining
Letters of Map Amendment

This section allows homeowners to be reimbursed for certain
costs associated with a successful challenge to a bona fide
mapping error made by FEMA resulting in a Letter of Map
Amendment (LOMA), not including legal fees.

Section 20. Treatment of swimming pool enclosures outside of hurricane
season

This section allows certain properties with swimming pools
that are enclosed with non-supporting breakaway walls outside
of hurricane season (November 20 through June 1) to be eligible
for participation in the NFIP.

Section 21. CDBG eligibility for flood insurance outreach activities
and community building code administration grants

To give local communities more flexibility to reduce the
potential for property losses caused by flooding events, this
section permits funds awarded under the Community Development
Block Grant (CDBG) program to be used for local building code
enforcement, as long as local matching funds are provided. It
also allows CDBG funds to be used by local governments for
flood risk outreach and education activities.

Section 22. Technical corrections

This section contains a technical correction to the
underlying National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973 to update references in those
statutes to the head of FEMA as its ``Administrator'' rather
than its ``Director.''

Section 23. Report on write-your-own program

To address the rapid increase in the number of policies
administered under the FEMA's NFIP Direct policy servicing
program, this section requires FEMA to report on the policies
and procedures that it can implement to limit the size of the
NFIP Direct to less than 10 percent of all flood insurance
policies. Last year, a WYO carrier decided to no longer
participate in NFIP and placed the administration and servicing
rights of all 800,000 of its policies with FEMA's NFIP Direct
program. Prior to this, only about 250,000 policies were
administered by NFIP Direct; now, FEMA is responsible for
administering approximately 1,000,000 NFIP Direct policies.
Having a large number of WYO carriers (there are currently 88)
ensures that the ability to effectively administer the program
is spread among many firms and is not overly concentrated in
the Federal government.

Section 24. Studies of voluntary community-based flood insurance
options

This section requires FEMA and GAO each to conduct a study
to assess options, methods, and strategies for offering
voluntary community-based flood insurance policy options, and
report their findings to Congress within 18 months.

Section 25. Report on inclusion of building codes in floodplain
management criteria

This section directs FEMA to study the impact,
effectiveness, and feasibility of including widely used and
nationally recognized building codes as part of its floodplain
management criteria and report its findings to Congress within
18 months. It is the intent of this provision that FEMA would
examine only the use of the International Building
Code and/or International Residential
Code, which contain relevant provisions
covering flood plain management and are consistent with the
current NFIP. Such ``impact'' studies, including those designed
to examine building code requirements in rural communities and
on Indian reservations, must address cost impacts, including
upfront costs to consumers for buildings covered by such codes,
and include in the ``feasibility and effectiveness'' assessment
of the use of ``innovative materials and systems for flood-
resistant construction.''
The report must include language specifying that FEMA is
required to abide by the standard regulatory process in
considering the inclusion and application of building codes in
these criteria. This section does not authorize FEMA to
establish regulatory guidance that may be used in any
enforcement action brought by the agency.

Section 26. Study on graduated risk

This section requires the National Academy of Sciences to
study methods for understanding graduated risk for properties
and residential and commercial structures behind levees and
report its findings to Congress within one year.

Section 27. No cause of action

In an effort to ensure that individuals living in areas
subject to flooding are aware of the potential risks that they
face and insurance options available to them, various
provisions of H.R. 1309 place certain notification requirements
on FEMA. These requirements--particularly those in Section 14
regarding ``Notification to Homeowners Regarding Mandatory
Purchase Requirement Applicability and Rate Phase-Ins,''
Section 15 regarding ``Notification of Establishment of Flood
Elevations,'' Section 16 regarding ``Notification to Tenants of
the Availability of Contents Insurance,'' Section 17 regarding
``Notification to Policy Holders Regarding Direct Management of
Policy by FEMA,'' and Section 18 regarding ``Notice of the
Availability of Flood Insurance and Escrow in RESPA Good Faith
Estimate''--were designed to serve a strictly informational
purpose for various stakeholders.
The Committee intended for these notification requirements
to educate individuals living in flood zones about flood risks,
explain options to existing NFIP policyholders, and inform
policymakers about pertinent mapping changes. Because the
Committee did not intend for these requirements to give rise to
private rights of action against the NFIP, FEMA, or any other
agency of the United States for failure to meet the obligations
imposed by the bill or the underlying statute, this section
specifies that no cause of action against the federal
government exists for violations of any notification
requirement under this Act. Furthermore, this language was
designed to codify existing judicial interpretations regarding
similar notice requirements. See, e.g., Paul v. Landsafe Flood
Determination, Inc., 550 F.3d 511 (5th Cir. 2008); Wentwood
Woodside I, LP v. GMAC Commercial Mortgage Corp., 419 F.3d 310
(5th Cir. 2005); Till v. Unifirst Fed. Sav. ` Loan Ass'n., 653
F.2d 152 (5th Cir. 1981); Barras v. Cmty. Home Loan, LLC, No.
06-2000, 2007 WL 2156558, 2007 U.S. Dist. LEXIS 53534 (W.D.La.
July 24, 2007); Clade v. Stone Ins., Inc., No. CIV.A.06-2304-F,
2006 WL 2366373, 2006 U.S. Dist. LEXIS 57152 (E.D.La. Aug. 14,
2006).

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

NATIONAL FLOOD INSURANCE ACT OF 1968

TITLE XIII--NATIONAL FLOOD INSURANCE

SHORT TITLE

Sec. 1301. This title may be cited as the ``National Flood
Insurance Act of 1968''.

* * * * * * *

CHAPTER I--THE NATIONAL FLOOD INSURANCE PROGRAM

BASIC AUTHORITY

Sec. 1304. (a) To carry out the purposes of this title, the
[Director] Administrator of the Federal Emergency Management
Agency is authorized to establish and carry out a national
flood insurance program which will enable interested persons to
purchase insurance against loss resulting from physical damage
to or loss of real property or personal property related
thereto arising from any flood occurring in the United States.
(b) Additional Coverage for Compliance With Land Use and
Control Measures.--The national flood insurance program
established pursuant to subsection (a) shall enable the
purchase of insurance to cover the cost of implementing
measures that are consistent with land use and control measures
established by the community under section 1361 for--
(1) * * *

* * * * * * *

(3) properties that have sustained flood damage on
multiple occasions, if the [Director] Administrator
determines that it is cost-effective and in the best
interests of the National Flood Insurance Fund to
require compliance with the land use and control
measures.

* * * * * * *

The [Director] Administrator shall impose a surcharge on each
insured of not more than $75 per policy to provide cost of
compliance coverage in accordance with the provisions of this
subsection.
(c) In carrying out the flood insurance program the
[Director] Administrator shall, to the maxmium extent
practicable, encourage and arrange for--
(1) * * *

* * * * * * *

SCOPE OF PROGRAM AND PRIORITIES

Sec. 1305. (a) In carrying out the flood insurance program
the [Director] Administrator shall afford a priority to making
flood insurance available to cover residential properties which
are designed for the occupancy of from one to four families,
church properties, and business properties which are owned or
leased and operated by small business concerns.
(b) If on the basis of--
(1) * * *

* * * * * * *

the [Director] Administrator determines that it would be
feasible to extend the flood insurance program to cover other
properties, he may take such action under this title as from
time to time may be necessary in order to make flood insurance
available to cover, on such basis as may be feasible, any types
and classes of--
(A) * * *

* * * * * * *

(c) The [Director] Administrator shall make flood insurance
available in only those States or areas (or subdivisions
thereof) which he has determined have--
(1) * * *

* * * * * * *

NATURE AND LIMITATION OF INSURANCE COVERAGE

Sec. 1306. (a) The [Director] Administrator shall from time
to time, after consultation with the advisory committee
authorized under section 1318, appropriate representatives of
the pool formed or otherwise created under section 1331, and
appropriate representatives of the insurance authorities of the
respective States, provide by regulation for general terms and
conditions of insurability which shall be applicable to
properties eligible for flood insurance coverage under section
1305, including--
(1) * * *

* * * * * * *

(b) In addition to any other terms and conditions under
subsection (a), such regulations shall provide that--
(1) any flood insurance coverage based on chargeable
premium rates under section 1308 which are less than
the estimated premium rates under section 1307(a)(1)
shall not exceed--
(A) * * *
(B) in the case of business properties which
are owned or leased and operated by small
business concerns, an aggregate liability with
respect to any single structure, including any
contents thereof related to premises of small
business occupants (as term is defined by the
[Director] Administrator), which shall be equal
to (i) $100,000 plus (ii) $100,000 multiplied
by the number of such occupants and shall be
allocated among such occupants (or among the
occupant or occupants and the owner) under
regulations prescribed by the [Director]
Administrator; except that the aggregate
liability for the structure itself may in no
case exceed $100,000; and

* * * * * * *

(2) [in the case of any residential property] in the
case of any residential building designed for the
occupancy of from one to four families for which the
risk premium rate is determined in accordance with the
provisions of section 1307(a)(1), additional flood
insurance in excess of the limits specified in clause
(i) of subparagraph (A) of paragraph (1) [shall be made
available to every insured upon renewal and every
applicant for insurance so as to enable such insured or
applicant to receive coverage up to a total amount
(including such limits specified in paragraph
(1)(A)(i)) of $250,000] shall be made available, with
respect to any single such building, up to an aggregate
liability (including such limits specified in paragraph
(1)(A)(i)) of $250,000;

* * * * * * *

(4) [in the case of any nonresidential property,
including churches,] in the case of any nonresidential
building, including a church, for which the risk
premium rate is determined in accordance with the
provisions of section 1307(a)(1), additional flood
insurance in excess of the limits specified in
subparagraphs (B) and (C) of paragraph (1) [shall be
made available to every insured upon renewal and every
applicant for insurance, in respect to any single
structure, up to a total amount (including such limit
specified in subparagraph (B) or (C) of paragraph (1),
as applicable) of $500,000 for each structure and
$500,000 for any contents related to each structure]
shall be made available with respect to any single such
building, up to an aggregate liability (including such
limits specified in subparagraph (B) or (C) of
paragraph (1), as applicable) of $500,000, and coverage
shall be made available up to a total of $500,000
aggregate liability for contents owned by the building
owner and $500,000 aggregate liability for each unit
within the building for contents owned by the tenant;
[and]
(5) the Administrator may provide that, in the case
of any residential property, each renewal or new
contract for flood insurance coverage may provide not
more than $5,000 aggregate liability per dwelling unit
for any necessary increases in living expenses incurred
by the insured when losses from a flood make the
residence unfit to live in, except that--
(A) purchase of such coverage shall be at the
option of the insured;
(B) any such coverage shall be made available
only at chargeable rates that are not less than
the estimated premium rates for such coverage
determined in accordance with section
1307(a)(1); and
(C) the Administrator may make such coverage
available only if the Administrator makes a
determination and causes notice of such
determination to be published in the Federal
Register that--
(i) a competitive private insurance
market for such coverage does not
exist; and
(ii) the national flood insurance
program has the capacity to make such
coverage available without borrowing
funds from the Secretary of the
Treasury under section 1309 or
otherwise;
(6) the Administrator may provide that, in the case
of any commercial property or other residential
property, including multifamily rental property,
coverage for losses resulting from any partial or total
interruption of the insured's business caused by damage
to, or loss of, such property from a flood may be made
available to every insured upon renewal and every
applicant, up to a total amount of $20,000 per
property, except that--
(A) purchase of such coverage shall be at the
option of the insured;
(B) any such coverage shall be made available
only at chargeable rates that are not less than
the estimated premium rates for such coverage
determined in accordance with section
1307(a)(1); and
(C) the Administrator may make such coverage
available only if the Administrator makes a
determination and causes notice of such
determination to be published in the Federal
Register that--
(i) a competitive private insurance
market for such coverage does not
exist; and
(ii) the national flood insurance
program has the capacity to make such
coverage available without borrowing
funds from the Secretary of the
Treasury under section 1309 or
otherwise;
[(5)] (7) any flood insurance coverage which may be
made available in excess of the limits specified in
subparagraph (A), (B), or (C) of paragraph (1), shall
be based only on chargeable premium rates under section
1308 which are not less than the estimated premium
rates under section 1307(a)(1), and the amount of such
excess coverage shall not in any case exceed an amount
equal to the applicable limit so specified (or
allocated) under paragraph (1)(C), (2), (3), or (4), as
applicable[.]; and
(8) each of the dollar amount limitations under
paragraphs (2), (3), (4), (5), and (6) shall be
adjusted effective on the date of the enactment of the
Flood Insurance Reform Act of 2011, such adjustments
shall be calculated using the percentage change, over
the period beginning on September 30, 1994, and ending
on such date of enactment, in such inflationary index
as the Administrator shall, by regulation, specify, and
the dollar amount of such adjustment shall be rounded
to the next lower dollar; and the Administrator shall
cause to be published in the Federal Register the
adjustments under this paragraph to such dollar amount
limitations; except that in the case of coverage for a
property that is made available, pursuant to this
paragraph, in an amount that exceeds the limitation
otherwise applicable to such coverage as specified in
paragraph (2), (3), (4), (5), or (6), the total of such
coverage shall be made available only at chargeable
rates that are not less than the estimated premium
rates for such coverage determined in accordance with
section 1307(a)(1).

* * * * * * *

(d) Payment of Premiums in Installments for Residential
Properties.--
(1) Authority.--In addition to any other terms and
conditions under subsection (a), such regulations shall
provide that, in the case of any residential property,
premiums for flood insurance coverage made available
under this title for such property may be paid in
installments.
(2) Limitations.--In implementing the authority under
paragraph (1), the Administrator may establish
increased chargeable premium rates and surcharges, and
deny coverage and establish such other sanctions, as
the Administrator considers necessary to ensure that
insureds purchase, pay for, and maintain coverage for
the full term of a contract for flood insurance
coverage or to prevent insureds from purchasing
coverage only for periods during a year when risk of
flooding is comparatively higher or canceling coverage
for periods when such risk is comparatively lower.

ESTIMATES OF PREMIUM RATES

Sec. 1307. (a) The [Director] Administrator is authorized to
undertake and carry out such studies and investigations and
receive or exchange such information as may be necessary to
estimate, and shall from time to time estimate, on an area,
subdivision, or other appropriate basis--
(1) * * *

* * * * * * *

(b) In carrying out subsection (a), the [Director]
Administrator shall, to the maximum extent feasible and on a
reimbursable basis, utilize the services of the Department of
the Army, the Department of the Interior, The Department of
Agriculture, the Department of Commerce, and the Tennessee
Valley Authority, and, as appropriate, other Federal
departments or agencies, and for such purposes may enter into
agreements or other appropriate arrangements with any persons.
(c) The [Director] Administrator shall give priority to
conducting studies and investigations and making estimates
under this section in those States or areas (or subdivisions
thereof) which he has determined have evidenced a positive
interest in securing flood insurance coverage under the flood
insurance program.
(d) Notwithstanding any other provision of law, any structure
existing on the date of enactment of the Flood Disaster
Protection Act of 1973 and located within Avoyelles,
Evangeline, Rapides, or Saint Landry Parish in the State of
Louisiana, which the [Director] Administrator determines is
subject to additional flood hazards as a result of the
construction or operation of the Atchafalaya Basin Levee
System, shall be eligible for flood insurance under this title
(if and to the extent it is eligible for such insurance under
the other provisions of this title) at premium rates that shall
not exceed those which would be applicable if such additional
hazards did not exist.
(e) Notwithstanding any other provision of law, any community
that has made adequate progress, acceptable to the [Director]
Administrator, on the [construction of a flood protection
system] construction, reconstruction, or improvement of a flood
protection system (without respect to the level of Federal
investment or participation) which will afford flood protection
for the one-hundred-year frequency flood as determined by the
[Director] Administrator, shall be eligible for flood insurance
under this title (if and to the extent it is eligible for such
insurance under the other provisions of this title) at premium
rates not exceeding those which would be applicable under this
section if such flood protection system had been completed. The
[Director] Administrator shall find that adequate progress on
the [construction of a flood protection system] construction,
reconstruction, or improvement of a flood protection system as
required herein has been only if (1) 100 percent of the project
cost of the system has been authorized, (2) at least 60 percent
of the project cost of the system has been appropriated, (3) at
least 50 percent of the project cost of the system has been
expended based on the present value of the completed system,
and (4) the system is at least 50 percent completed.
(f) Notwithstanding any other provision of law, this
subsection shall only apply in a community which has been
determined by the [Director] Administrator of the Federal
Emergency Management Agency to be in the process of restoring
flood protection afforded by a flood protection system that had
been previously accredited on a Flood Insurance Rate Map as
providing 100-year frequency flood protection but no longer
does so (without respect to the level of Federal investment or
participation). Except as provided in this subsection, in such
a community, flood insurance shall be made available to those
properties impacted by the disaccreditation of the flood
protection system at premium rates that do not exceed those
which would be applicable to any property located in an area of
special flood hazard, the construction of which was started
prior to the effective date of the initial Flood Insurance Rate
Map published by the [Director] Administrator for the community
in which such property is located. A revised Flood Insurance
Rate Map shall be prepared for the community to delineate as
Zone AR the areas of special flood hazard, whether coastal or
riverine, that result from the disaccreditation of the flood
protection system. A community will be considered to be in the
process of restoration if--
(1) the flood protection system has been deemed
restorable by [a Federal agency in consultation with
the local project sponsor] the entity or entities that
own, operate, maintain, or repair such system;

* * * * * * *

Communities that the [Director] Administrator of the Federal
Emergency Management Agency determines to meet the criteria set
forth in paragraphs (1) and (2) as of January 1, 1992, shall
not be subject to revised Flood Insurance Rate Maps that
contravene the intent of this subsection. Such communities
shall remain eligible for C zone rates for properties located
in zone AR for any policy written prior to promulgation of
final regulations for this section. Floodplain management
criteria for such communities shall not require the elevation
of improvements to existing structures and shall not exceed 3
feet above existing grade for new construction, provided the
base flood elevation based on the disaccredited flood control
system does not exceed five feet above existing grade, or the
remaining new construction in such communities is limited to
infill sites, rehabilitation of existing structures, or
redevelopment of previously developed areas.
The [Director] Administrator of the Federal Emergency
Management Agency shall develop and promulgate regulations to
implement this subsection, including minimum floodplain
management criteria, within 24 months after the date of
enactment of this subsection.

ESTABLISHMENT OF CHARGEABLE PREMIUM RATES

Sec. 1308. (a) On the basis of estimates made under section
1307 and such other information as may be necessary, the
[Director] Administrator shall from time to time, after
consultation with the advisory committee authorized under
section 1318, appropriate representatives of the pool formed or
otherwise created under section 1331, and appropriate
representatives of the insurance authorities of the respective
States, prescribe by regulation or notice--
(1) * * *

* * * * * * *

(c) Actuarial Rate Properties.--Subject only to [the
limitations provided under paragraphs (1) and (2)] subsection
(e) and subsection (g), the chargeable rate shall not be less
than the applicable estimated risk premium rate for such area
(or subdivision thereof) under section 1307(a)(1) with respect
to the following properties:
(1) Post-firm properties.--Any property the
construction or substantial improvement of which the
[Director] Administrator determines has been started
after December 31, 1974, or started after the effective
date of the initial rate map published by the
[Director] Administrator under paragraph (2) of section
1360 for the area in which such property is located,
whichever is later[, except that the chargeable rate
for properties under this paragraph shall be subject to
the limitation under subsection (e)].
(2) Commercial properties.--Any nonresidential
property.
(3) Second homes and vacation homes.--Any residential
property that is not the primary residence of any
individual.
(4) Homes sold to new owners.--Any single family
property that--
(A) has been constructed or substantially
improved and for which such construction or
improvement was started, as determined by the
Administrator, before December 31, 1974, or
before the effective date of the initial rate
map published by the Administrator under
paragraph (2) of section 1360(a) for the area
in which such property is located, whichever is
later; and
(B) is purchased after the effective date of
this paragraph, pursuant to section 5(c)(3)(A)
of the Flood Insurance Reform Act of 2011.
(5) Homes damaged or improved.--Any property that, on
or after the date of the enactment of the Flood
Insurance Reform Act of 2011, has experienced or
sustained--
(A) substantial flood damage exceeding 50
percent of the fair market value of such
property; or
(B) substantial improvement exceeding 30
percent of the fair market value of such
property.
(6) Homes with multiple claims.--Any severe
repetitive loss property (as such term is defined in
section 1361A(b)).
[(2)] (7) Certain leased coastal and river
properties.--Any property leased from the Federal
Government (including residential and nonresidential
properties) that the [Director] Administrator
determines is located on the river-facing side of any
dike, levee, or other riverine flood control structure,
or seaward of any seawall or other coastal flood
control structure.
(d) With respect to any chargeable premium rate prescribed
under this section, a sum equal to the portion of the rate that
covers any administrative expenses of carrying out the flood
insurance and floodplain management programs which have been
estimated under paragraphs (1)(B)(ii) and (1)(B)(iii) of
section 1307(a) or paragraph (2) of such section (including the
fees under such paragraphs), shall be paid to the [Director]
Administrator. The [Director] Administrator shall deposit the
sum in the National Flood Insurance Fund established under
section 1310.
(e) Annual Limitation on Premium Increases.--Except with
respect to properties described under [paragraph (2) or (3)]
paragraph (7) of subsection (c) or subsection (h), and
notwithstanding any other provision of this title, the
chargeable risk premium rates for flood insurance under this
title for any properties within any single risk classification
may not be increased by an amount that would result in the
average of such rate increases for properties within the risk
classification during any 12-month period exceeding [10
percent] 20 percent of the average of the risk premium rates
for properties within the risk classification upon the
commencement of such 12-month period.
(f) Adjustment of Premium.--Notwithstanding any other
provision of law, if the [Director] Administrator determines
that the holder of a flood insurance policy issued under this
Act is paying a lower premium than is required under this
section due to an error in the flood plain determination, the
[Director] Administrator may only prospectively charge the
higher premium rate.
(g) 5-Year Phase-In of Flood Insurance Rates for Certain
Properties in Newly Mapped Areas.--
(1) 50 percent rate for initial year.--
Notwithstanding subsection (c) or any other provision
of law relating to chargeable risk premium rates for
flood insurance coverage under this title, in the case
of any area that was not previously designated as an
area having special flood hazards and that, pursuant to
any issuance, revision, updating, or other change in
flood insurance maps, becomes designated as such an
area, during the 12-month period that begins, except as
provided in paragraph (2), upon the date that such
maps, as issued, revised, updated, or otherwise
changed, become effective, the chargeable premium rate
for flood insurance under this title with respect to
any covered property that is located within such area
shall be 50 percent of the chargeable risk premium rate
otherwise applicable under this title to the property.
(2) Applicability to preferred risk rate areas.--In
the case of any area described in paragraph (1) that
consists of or includes an area that, as of date of the
effectiveness of the flood insurance maps for such area
referred to in paragraph (1) as so issued, revised,
updated, or changed, is eligible for any reason for
preferred risk rate method premiums for flood insurance
coverage and was eligible for such premiums as of the
enactment of the Flood Insurance Reform Act of 2011,
the 12-month period referred to in paragraph (1) for
such area eligible for preferred risk rate method
premiums shall begin upon the expiration of the period
during which such area is eligible for such preferred
risk rate method premiums.
(3) Phase-in of full actuarial rates.--With respect
to any area described in paragraph (1), upon the
expiration of the 12-month period under paragraph (1)
or (2), as applicable, for such area, the Administrator
shall increase the chargeable risk premium rates for
flood insurance under this title for covered properties
in such area by 20 percent, and by 20 percent upon the
expiration of each successive 12-month period
thereafter until the chargeable risk premium rates
comply with subsection (c).
(4) Covered properties.--For purposes of the
subsection, the term ``covered property'' means any
residential property occupied by its owner or a bona
fide tenant as a primary residence.
(h) Prohibition of Extension of Subsidized Rates to Lapsed
Policies.--Notwithstanding any other provision of law relating
to chargeable risk premium rates for flood insurance coverage
under this title, the Administrator shall not provide flood
insurance coverage under this title for any property for which
a policy for such coverage for the property has previously
lapsed in coverage as a result of the deliberate choice of the
holder of such policy, at a rate less than the applicable
estimated risk premium rates for the area (or subdivision
thereof) in which such property is located.

SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS
INSURANCE.

(a) In General.--The Administrator shall, upon entering into
a contract for flood insurance coverage under this title for
any property--
(1) provide to the insured sufficient copies of the
notice developed pursuant to subsection (b); and
(2) require the insured to provide a copy of the
notice, or otherwise provide notification of the
information under subsection (b) in the manner that the
manager or landlord deems most appropriate, to each
such tenant and to each new tenant upon commencement of
such a tenancy.
(b) Notice.--Notice to a tenant of a property in accordance
with this subsection is written notice that clearly informs a
tenant--
(1) whether the property is located in an area having
special flood hazards;
(2) that flood insurance coverage is available under
the national flood insurance program under this title
for contents of the unit or structure leased by the
tenant;
(3) of the maximum amount of such coverage for
contents available under this title at that time; and
(4) of where to obtain information regarding how to
obtain such coverage, including a telephone number,
mailing address, and Internet site of the Administrator
where such information is available.

FINANCING

Sec. 1309. (a) All authority which was vested in the Housing
and Home Finance Administrator by virtue of section 15(e) of
the Federal Flood Insurance Act of 1956 (70 Stat. 1084)
(pertaining to the issue of notes or other obligations or the
Secretary of the Treasury), as amended by subsections (a) and
(b) of section 1303 of this Act, shall be available to the
[Director] Administrator for the purpose of carrying out the
flood insurance program under this title; except that the total
amount of notes and obligations which may be issued by the
[Director] Administrator pursuant to such authority (1) without
the approval of the President, may not exceed $500,000,000, and
(2) with the approval of the President, may not exceed
$1,500,000,000 through the date specified in section 1319, and
$1,000,000,000 thereafter; except that, through [September 30,
2011] September 30, 2016, clause (2) of this sentence shall be
applied by substituting ``$20,725,000,000'' for
``$1,500,000,000''. The [Director] Administrator shall report
to the Committee on Banking, Finance and Urban Affairs of the
House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate at any time when he requests
the approval of the President in accordance with the preceding
sentence.
(b) Any funds borrowed by the [Director] Administrator under
this authority shall, from time to time, be deposited in the
National Flood Insurance Fund established under section 1310.

NATIONAL FLOOD INSURANCE FUND

Sec. 1310. (a) To carry out the flood insurance program
authorized by this title, the [Director] Administrator shall
establish in the Treasury of the United States a National Flood
Insurance Fund (hereinafter referred to as the ``fund'') which
shall be an account separate from any other accounts or funds
available to the [Director] Administrator and shall be
available as described in subsection (f), without fiscal year
limitation (except as otherwise provided in this section)--
(1) * * *

* * * * * * *

(9) for funding, not to exceed $10,000,000 in any
fiscal year, which shall remain available until
expended, for mitigation actions under section 1323,
except that, notwithstanding any other provision of
this title, amounts made available pursuant to this
paragraph shall not be subject to offsetting
collections through premium rates for flood insurance
coverage under this title.
(b) The fund shall be credited with--
(1) * * *

* * * * * * *

(5) such sums as are required to be paid to the
[Director] Administrator under section 1308(d); and

* * * * * * *

the [Director] Administrator determines that the moneys of the
fund are in excess of current needs, he may request the
investment of such amounts as he deems advisable by the
Secretary of the Treasury in obligations issued or guaranteed
by the United States.
(d) In the event the [Director] Administrator makes a
determination in accordance with the provisions of section 1340
that operation of the flood insurance program, in whole or in
part, should be carried out through the facilities of the
Federal Government, the fund shall be available for all
purposes incident thereto, including--
(1) * * *

* * * * * * *

for so long as the program is so carried out, and in such event
any premiums paid shall be deposited by the [Director]
Administrator to the credit of the fund.

* * * * * * *

OPERATING COSTS AND ALLOWANCES

Sec. 1311. (a) The [Director] Administrator shall from time
to time negotiate with appropriate representatives of the
insurance industry for the purpose of establishing--
(1) * * *

* * * * * * *

(b) For purposes of subsection (a)--
(1) the term ``operating costs'' shall (without
limiting such term) include--
(A) * * *

* * * * * * *

(D) other direct, actual, and necessary
expenses which the [Director] Administrator
finds are incurred in connection with selling
or servicing flood insurance coverage; and
(2) the term ``operating allowances'' shall (without
limiting such term) include amounts for profit and
contingencies which the [Director] Administrator
finds reasonable and necessary to carry out the
purposes of this title.

PAYMENT OF CLAIMS

Sec. 1312. [The Director is] (a) In General.--The
Administrator is authorized to prescribe regulations
establishing the general method or methods by which proved and
approved claims for losses may be adjusted and paid for any
damage to or loss of property which is covered by flood
insurance made available under the provisions of this title.
(b) Minimum Annual Deductibles.--
(1) Subsidized rate properties.--For any structure
that is covered by flood insurance under this title,
and for which the chargeable rate for such coverage is
less than the applicable estimated risk premium rate
under section 1307(a)(1) for the area (or subdivision
thereof) in which such structure is located, the
minimum annual deductible for damage to or loss of such
structure shall be $2,000.
(2) Actuarial rate properties.--For any structure
that is covered by flood insurance under this title,
for which the chargeable rate for such coverage is not
less than the applicable estimated risk premium rate
under section 1307(a)(1) for the area (or subdivision
thereof) in which such structure is located, the
minimum annual deductible for damage to or loss of such
structure shall be $1,000.

DISSEMINATION OF FLOOD INSURANCE INFORMATION

Sec. 1313. The [Director] Administrator shall from time to
time take such action as may be necessary in order to make
information and data available to the public, and to any State
or local agency or official, with regard to--
(1) * * *

* * * * * * *

STATE AND LOCAL LAND USE CONTROLS

Sec. 1315. (a) Requirement for Participation in Flood
Insurance Program.--
(1) In general.--After December 31, 1971, no new
flood insurance coverage shall be provided under this
title in any area (or subdivision thereof) unless an
appropriate public body shall have adopted adequate
land use and control measures (with effective
enforcement provisions) which the [Director]
Administrator finds are consistent with the
comprehensive criteria for land management and use
under section 1361.
(2) Agricultural structures.--
(A) * * *
(B) Premium rates and coverage.--To the
extent applicable, an agricultural structure
repaired or restored pursuant to subparagraph
(A) shall pay chargeable premium rates
established under section 1308 at the estimated
risk premium rates under section 1307(a)(1). If
resources are available, the [Director]
Administrator shall provide technical
assistance and counseling, upon request of the
owner of the structure, regarding wet flood-
proofing and other flood damage reduction
measures for agricultural structures. The
[Director] Administrator shall not be required
to make flood insurance coverage available for
such an agricultural structure unless the
structure is wet flood-proofed through
permanent or contingent measures applied to the
structure or its contents that prevent or
provide resistance to damage from flooding by
allowing flood waters to pass through the
structure, as determined by the [Director]
Administrator.
(C) Prohibition on disaster relief.--
Notwithstanding any other provision of law, any
agricultural structure repaired or restored
pursuant to subparagraph (A) shall not be
eligible for disaster relief assistance under
any program administered by the [Director]
Administrator or any other Federal agency.

* * * * * * *

(b) Community Rating System and Incentives for Community
Floodplain Management.--
(1) Authority and goals.--The [Director]
Administrator shall carry out a community rating system
program, under which communities participate
voluntarily--
(A) * * *

* * * * * * *

(2) Incentives.--The program shall provide incentives
in the form of credits on premium rates for flood
insurance coverage in communities that the [Director]
Administrator determines have adopted and enforced
measures that reduce the risk of flood and erosion
damage that exceed the criteria set forth in section
1361. In providing incentives under this paragraph, the
[Director] Administrator may provide for credits to
flood insurance premium rates in communities that the
[Director] Administrator determines have implemented
measures that protect natural and beneficial floodplain
functions.
(3) Credits.--The credits on premium rates for flood
insurance coverage shall be based on the estimated
reduction in flood and erosion damage risks resulting
from the measures adopted by the community under this
program. If a community has received mitigation
assistance under section 1366, the credits shall be
phased in a manner, determined by the [Director]
Administrator, to recover the amount of such assistance
provided for the community.
(4) Reports.--Not later than 2 years after the date
of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994 and not less than
every 2 years thereafter, the [Director] Administrator
shall submit a report to the Congress regarding the
program under this subsection. Each report shall
include an analysis of the cost-effectiveness of the
program, any other accomplishments or shortcomings of
the program, and any recommendations of the [Director]
Administrator for legislation regarding the program.

PROPERTIES IN VIOLATION OF STATE AND LOCAL LAW

Sec. 1316. No new flood insurance coverage shall be provided
under this title for any property which the [Director]
Administrator finds has been declared by a duly constituted
State or local zoning authority, or other authorized public
body, to be in violation of State or local laws, regulations or
ordinances which are intended to discourage or otherwise
restrict land development or occupancy in flood-prone areas.

COORDINATION WITH OTHER PROGRAMS

Sec. 1317. In carrying out this title, the [Director]
Administrator shall consult with other departments and agencies
of the Federal Government, and with interstate, State, and
local agencies having responsibilities for flood control, flood
forecasting, or flood damage prevention, in order to assure
that the programs of such agencies and the flood insurance
program authorized under this title are mutually consistent.

ADVISORY COMMITTEE

Sec. 1318. (a) The [Director] Administrator shall appoint a
flood insurance advisory committee without regard to the
provisions of title 5, United States Code, governing
appointments in the competitive service, and such committee
shall advise the [Director] Administrator in the preparation of
any regulations prescribed in accordance with this title and
with respect to policy matters arising in the administration of
this title, and shall perform such other responsibilities as
the [Director] Administrator may, from time to time, assign to
such committee.

* * * * * * *

(c) Members of the committee shall, while attending
conferences or meetings thereof, be entitled to receive
compensation at a rate fixed by the [Director] Administrator
but not exceeding $100 per day, including traveltime, and while
so serving away from their homes or regular places of business
they may be allowed travel expenses, including per diem in lieu
of subsistence, as is authorized under section 5703 of title 5,
United States Code, for persons in the Government service
employed intermittently.

PROGRAM EXPIRATION

Sec. 1319. No new contract for flood insurance under this
title shall be entered into after [September 30, 2011]
September 30, 2016.

[REPORT TO THE PRESIDENT] ANNUAL REPORT TO CONGRESS

Sec. 1320. (a) In General.--The [Director] Administrator
shall [biennially] submit a report of operations under this
title to [the President for submission to] the Congress not
later than June 30 of each year.
(b) Effects of Flood Insurance Program.--The [Director]
Administrator shall include, as part of the [biennial] annual
report submitted under subsection (a), a chapter reporting on
the effects on the flood insurance program observed through
implementation of requirements under the Riegle Community
Development and Regulatory Improvement Act of 1994.
(c) Financial Status of Program.--The report under this
section for each year shall include information regarding the
financial status of the national flood insurance program under
this title, including a description of the financial status of
the National Flood Insurance Fund and current and projected
levels of claims, premium receipts, expenses, and borrowing
under the program.

* * * * * * *

SEC. 1323. DIRECT GRANTS FOR REPETITIVE INSURANCE CLAIMS PROPERTIES.

(a) In General.--The [Director] Administrator may provide
funding, to owners of such properties, for mitigation actions
that reduce flood damages to individual properties for which
[1] two or more claim payments for losses have been made under
flood insurance coverage under this title, but only if the
[Director] Administrator determines that--
(1) * * *

* * * * * * *

(b) Priority for Worst-Case Properties.--In determining the
properties for which funding is to be provided under this
section, the [Director] Administrator shall consult with the
States in which such properties are located and provide
assistance for properties in the order that will result in the
greatest amount of savings to the National Flood Insurance Fund
in the shortest period of time.

* * * * * * *

SEC. 1325. TREATMENT OF SWIMMING POOL ENCLOSURES OUTSIDE OF HURRICANE
SEASON.

In the case of any property that is otherwise in compliance
with the coverage and building requirements of the national
flood insurance program, the presence of an enclosed swimming
pool located at ground level or in the space below the lowest
floor of a building after November 30 and before June 1 of any
year shall have no effect on the terms of coverage or the
ability to receive coverage for such building under the
national flood insurance program established pursuant to this
title, if the pool is enclosed with non-supporting breakaway
walls.

CHAPTER II--ORGANIZATION AND ADMINISTRATION OF THE FLOOD INSURANCE
PROGRAM

ORGANIZATION AND ADMINISTRATION

Sec. 1330. Following such consultation with representatives
of the insurance industry as may be necessary, the [Director]
Administrator shall implement the flood insurance program
authorized under chapter I in accordance with the provision of
part A of this chapter and, if a determination is made by him
under section 1340, under part B of this chapter.

Part A--Industry Program With Federal Financial Assistance

INDUSTRY FLOOD INSURANCE POOL

Sec. 1331. (a) The [Director] Administrator is authorized to
encourage and otherwise assist any insurance companies and
other insurers which meet the requirements prescribed under
subsection (b) to form, as associate, or otherwise join
together in a pool--
(1) * * *
(2) for the purpose of assuming, including as
reinsurance of insurance coverage provided by the flood
insurance program, on such terms and conditions as may
be agreed upon, such financial responsibility as will
enable such companies and other insurers, with the
Federal financial and other assistance available under
this title, to assure a reasonable proportion of
responsibility for the adjustment and payment of claims
for losses under the flood insurance program.
(b) In order to promote the effective administration of the
flood insurance program under this part, and to assure that the
objectives of this title are furthered, the [Director]
Administrator is authorized to prescribe appropriate
requirements for insurance companies and other insurers
participating in such pool including, but not limited to,
minimum requirements for capital or surplus or assets.

AGREEMENTS WITH FLOOD INSURANCE POOL

Sec. 1332. (a) The [Director] Administrator is authorized to
enter into such agreements with the pool formed or otherwise
created under this part as he deems necessary to carry out the
purposes of this title.
(b) Such agreements shall specify--
(1) * * *

* * * * * * *

(3) the maximum amount of profit, established by the
[Director] Administrator and set forth in the schedules
prescribed under section 1311, which may be realized by
such pool (and the companies and other insurers
participating therein),

* * * * * * *

(c) In addition, such agreements shall contain such
provisions as the [Director] Administrator finds necessary to
assure that--
(1) * * *
(2) the insurance companies and other insurers
participating in the pool will take whatever action may
be necessary to provide continuity of flood insurance
coverage or reinsurance by the pool, and

* * * * * * *

PREMIUM EQUALIZATION PAYMENTS

Sec. 1334. (a) The [Director] Administrator, on such terms
and conditions as he may from time to time prescribe, shall
make periodic payments to the pool formed or otherwise created
under section 1331, in recognition of such reductions in
chargeable premium rates under section 1308 below estimated
premium rates under section 1307(a)(1) as are required in order
to make flood insurance available on reasonable terms and
conditions.
(b) Designated periods under this section and the methods for
determining the sum of premiums paid or payable during such
periods shall be established by the [Director] Administrator.

REINSURANCE COVERAGE

Sec. 1335. (a)(1) The [Director] Administrator is authorized
to take such action as may be necessary in order to make
available, to the pool formed or otherwise created under
section 1331, reinsurance for losses (due to claims for proved
and approved losses covered by flood insurance) which are in
excess of losses assumed by such pool in accordance with the
excess loss agreement entered into under subsection (c).
(2) The Administrator is authorized to secure reinsurance
coverage of coverage provided by the flood insurance program
from private market insurance, reinsurance, and capital market
sources at rates and on terms determined by the Administrator
to be reasonable and appropriate in an amount sufficient to
maintain the ability of the program to pay claims and that
minimizes the likelihood that the program will utilize the
borrowing authority provided under section 1309.
(b) Such reinsurance shall be made available pursuant to
contract, agreement, or any other arrangement, in consideration
of such payment of a premium, fee, or other charge as the
[Director] Administrator finds necessary to cover anticipated
losses and other costs of providing such reinsurance.
(c) The [Director] Administrator is authoried to negotiate an
excess loss agreement, from time to time, under which the
amount of flood insurance retained by the pool, after ceding
reinsurance, shall be adequate to further the purposes of this
title, consistent with the objective of maintaining appropriate
financial participation and risk sharing to the maximum extent
practicable on the part of participating insurance companies
and other insurers.
(d) All reinsurance claims for losses in excess of losses
assumed by the pool shall be submitted on a portfolio basis by
such pool in accordance with terms and conditions established
by the [Director] Administrator.

EMERGENCY IMPLEMENTATION OF PROGRAM

Sec. 1336. (a) Notwithstanding any other provisions of this
title, for the purpose of providing flood insurance coverage at
the earliest possible time, the [Director] Administrator shall
carry out the flood insurance program authorized under chapter
I during the period ending on the date specified in section
1319, in accordance with the provisions of this part and the
other provision of this title insofar as they relate to this
part but subject to the modifications made by or under
subsection (b).
(b) In carrying out the flood insurance program pursuant to
subsection (a), the [Director] Administrator--
(1) * * *

* * * * * * *

Part B--Government Program With Industry Assistance

FEDERAL OPERATION OF THE PROGRAM

Sec. 1340. (a) If at any time, after consultation with
representatives of the insurance industry, the [Director]
Administrator determines that operation of the flood insurance
program as provided under part A cannot be carried out, or that
such operation, in itself, would be assisted materially by the
Federal Government's assumption, in whole or in part, of the
operational responsibility for flood insurance under this title
(on a temporary or other basis) he shall promptly undertake any
necessary arrangements to carry out the program of flood
insurance authorized under chapter I through the facilities of
the Federal Government, utilizing, for purposes of providing
flood insurance coverage, either--
(1) * * *
(2) such other officers and employees of any
executive agency (as defined in section 105 of title 5
of the United States Code) as the [Director]
Administrator and the head of any such agency may from
time to time, agree upon, on a reimbursement or other
basis, or

* * * * * * *

(b) Upon making the determination referred to in subsection
(a), the [Director] Administrator shall make a report to the
Congress and, at the same time, to the private insurance
companies participating in the National Flood Insurance Program
pursuant to section 1310 of this Act. Such report shall--
(1) * * *

* * * * * * *

(4) contain such recommendations as the [Director]
Administrator deems advisable.
The [Director] Administrator shall not implement the program of
flood insurance authorized under chapter I through the
facilities of the Federal Government until 9 months after the
date of submission of the report under this subsection unless
it would be impossible to continue to effectively carry out the
National Flood Insurance Program operations during this time.

ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW

Sec. 1341. In the event the program is carried out as
provided in section 1340, the [Director] Administrator shall be
authorized to adjust and make payment of any claims for proved
and approved losses covered by flood insurance, and upon the
disallowance by the [Director] Administrator of any such
claims, or upon the refusal of the claimant to accept the
amount allowed upon any such claim, the claimant, within one
year after the date of mailing of notice of disallowance or
partial disallowance by the [Director] Administrator, may
institute an action against the [Director] Administrator on
such claim in the United States district court for the district
in which the insured property or the major part thereof shall
have been situated, and original exclusive jurisdiction is
hereby conferred upon such court to hear and determine such
action without regard to the amount in controversy.

Part C--Provisions of General Applicability

SERVICES BY INSURANCE INDUSTRY

Sec. 1345. (a) In administering the flood insurance program
under this chapter, the [Director] Administrator is authorized
to enter into any contracts, agreements, or other appropriate
arrangements which may, from time to time, be necessary for the
purpose of utilizing, on such terms and conditions as may be
agreed upon, the facilities and services of any insurance
companies or other insurers, insurance agents and brokers, or
insurance adjustment organizations; and such contracts,
agreements, or arrangements may include provision for payment
of applicable operating costs and allowances for such
facilities and services as set forth in the schedules
prescribed under section 1311.

* * * * * * *

(c) The [Director] Administrator of the Federal Emergency
Management Agency shall hold any agent or broker selling or
undertaking to sell flood insurance under this title harmless
from any judgment for damages against such agent or broker as a
result of any court action by a policyholder or applicant
arising out of an error or omission on the part of the Federal
Emergency Management Agency, and shall provide any such agent
or broker with indemnification, including court costs and
reasonable attorney fees, arising out of and caused by an error
or omission on the part of the Federal Emergency Management
Agency and its contractors. The [Director] Administrator of the
Federal Emergency Management Agency may not hold harmless or
indemnify an agent or broker for his or her error or omission.

USE OF INSURANCE POOL, COMPANIES, OR OTHER PRIVATE ORGANIZATIONS FOR
CERTAIN PAYMENTS

Sec. 1346. (a) In order to provide for maximum efficency in
the administration of the flood insurance program and in order
to facilitate the expeditious payment of any Federal funds
under such program, the [Director] Administrator may enter into
contracts with a pool formed or otherwise created under section
1331, or any insurance company or other private organization,
for the purpose of securing performance by such pool, company,
or organization, or for purposes of securing reinsurance of
insurance coverage provided by the program, of any or all of
the following responsibilities:
(1) [estimating] Estimating and later
determining any amounts of payments to be
made[;].
(2) [receiving] Receiving from the [Director]
Administrator, disbursing, and accounting for
funds in making such payments[;].
(3) [making] Making such audits of the
records of any insurance company or other
insurer, insurance agent or broker, or
insurance adjustment organization as may be
necessary to assure that proper payments are
made[; and].
(4) Placing reinsurance coverage on insurance
provided by such program.
[(4) otherwise] (5) Otherwise assisting in
such manner as the contract may provide to
further the purposes of this title.
(b) Any contract with the pool or an insurance company or
other private organization under this section may contain such
terms and conditions at the [Director] Administrator finds
necessary or appropriate for carrying out responsibilities
under subsection (a), and may provide for payment of any costs
which the [Director] Administrator determines are incidental to
carrying out such responsibilities which are covered by the
contract.

* * * * * * *

(d) No contract may be entered into under this section unless
the [Director] Administrator finds that the pool, company, or
organization will perform its obligations under the contract
efficiently and effectively, and will meet such requirements as
to financial responsibility, legal authority, and other matters
as he finds pertinent.
(e)(1) Any such contract may require the pool, company, or
organization or any of its officers or employees certifying
payments or disbursing funds pursuant to the contract, or
otherwise participating in carrying out the contract, to give
surety bond to the United States in such amount as the
[Director] Administrator may deem appropriate.

* * * * * * *

(f) Any contract entered into under this section shall be for
a term of one year, and may be made automatically renewable
from term to term in the absence of notice by either party of
an intention to terminate at the end of the current term;
except that the [Director] Administrator may terminate any such
contract at any time (after reasonable notice to the pool,
company, or organization involved) if he finds that the pool,
company, or organization has failed substantially to carry out
the contract, or is carrying out the contract in a manner
inconsistent with the efficient and effective administration of
the flood insurance program authorized under this title.

SETTLEMENT AND ARBITRATION

Sec. 1347. (a) The [Director] Administrator is authorized to
make final settlement of any claims or demands which may arise
as a result of any financial transactions which he is
authorized to carry out under this chapter, and may, to assist
him in making any such settlement, refer any disputes relating
to such claims or demands to arbitration, with the consent of
the parties concerned.
(b) Such arbitration shall be advisory in nature, and any
award, decision, or recommendation which may be made shall
become final only upon the approval of the [Director]
Administrator.

RECORDS AND AUDITS

Sec. 1348. (a) The flood insurance pool formed or otherwise
created under part A of this chapter, and any insurance company
or other private organization executing any contract,
agreement, or other appropriate arrangement with the [Director]
Administrator under part B of this chapter or this part, shall
keep such records as the [Director] Administrator shall
prescribe, including records which fully disclose the total
costs of the program undertaken or the services being rendered,
and such other records as will facilitate an effective audit.
(b) The [Director] Administrator and the Comptroller General
of the United States, or any of their duly authorized
representatives, shall have access for the purpose of audit and
examination to any books, documents, papers and any such
insurance company or other private organization that are
pertinent to the costs of the program undertaken or the
services being rendered.

SEC. 1349. NOTIFICATION TO POLICY HOLDERS REGARDING DIRECT MANAGEMENT
OF POLICY BY FEMA.

(a) Notification.--Not later than 60 days before the date on
which a transferred flood insurance policy expires, and
annually thereafter until such time as the Federal Emergency
Management Agency is no longer directly administering such
policy, the Administrator shall notify the holder of such
policy that--
(1) the Federal Emergency Management Agency is
directly administering the policy;
(2) such holder may purchase flood insurance that is
directly administered by an insurance company; and
(3) purchasing flood insurance offered under the
National Flood Insurance Program that is directly
administered by an insurance company will not alter the
coverage provided or the premiums charged to such
holder that otherwise would be provided or charged if
the policy was directly administered by the Federal
Emergency Management Agency.
(b) Definition.--In this section, the term ``transferred
flood insurance policy'' means a flood insurance policy that--
(1) was directly administered by an insurance company
at the time the policy was originally purchased by the
policy holder; and
(2) at the time of renewal of the policy, direct
administration of the policy was or will be transferred
to the Federal Emergency Management Agency.

CHAPTER III--COORDINATION OF FLOOD INSURANCE WITH LAND-MANAGEMENT
PROGRAMS IN FLOOD-PRONE AREAS

IDENTIFICATION OF FLOOD-PRONE AREAS

Sec. 1360. (a) The [Director] Administrator is authorized to
consult with, receive information from, and enter into any
agreements or other arrangements with the Secretaries of the
Army, the Interior, Agriculture, and Commerce, the Tennessee
Valley Authority, and the heads of other Federal departments or
agencies, on a reimbursement basis, or with the head of any
State or local agency, or enter into contracts with any persons
or private firms, in order that he may--
(1) * * *

* * * * * * *

(b) The [Director] Administrator is directed to accelerate
the identification of risk zones within flood-prone and
mudslide-prone areas, as provided by subsection (a)(2) of this
section, in order to make known the degree of hazard within
each such zone at the earliest possible date. To accomplish
this objective, the [Director] Administrator is authorized,
without regard to subsections (a) and (b) of section 3324 of
title 31, United States Code, and section 3709 of the Revised
Statutes (41 U.S.C. 5), to make grants, provide technical
assistance, and enter into contracts, cooperative agreements,
or other transactions, on such terms as he may deem
appropriate, or consent to modifications thereof, and to make
advance or progress payments in connection therewith.
(c) The Secretary of Defense (through the Army Corps of
Engineers), the Secretary of the Interior (through the United
States Geological Survey), the Secretary of Agriculture
(through the Soil Conservation Service), the Secretary of
Commerce (through the National Oceanic and Atmospheric
Administration), the head of the Tennessee Valley Authority,
and the heads of all other Federal agencies engaged in the
identification or delineation of flood-risk zones within the
several States shall, in consultation with the [Director]
Administrator, give the highest practicable priority in the
allocation of available manpower and other available resources
to the identification and mapping of flood hazard areas and
flood-risk zones, in order to assist the [Director]
Administrator to meet the deadline established by this section.
(d) The [Director] Administrator shall, not later than
September 30, 1984, submit to the Congress a plan for bringing
all communities containing flood-risk zones into full program
status by September 30, 1987.
(e) Review of Flood Maps.--Once during each 5-year period
(the 1st such period beginning on the date of enactment of the
Riegle Community Development and Regulatory Improvement Act of
1994) or more often as the [Director] Administrator determines
necessary, the [Director] Administrator shall assess the need
to revise and update all floodplain areas and flood risk zones
identified, delineated, or established under this section,
based on an analysis of all natural hazards affecting flood
risks.
(f) Updating Flood Maps.--The [Director] Administrator shall
revise and update any floodplain areas and flood-risk zones--
(1) upon the determination of the [Director]
Administrator, according to the assessment under
subsection (e), that revision and updating are
necessary for the areas and zones; or
(2) upon the request from any State or local
government stating that specific floodplain areas or
flood-risk zones in the State or locality need revision
or updating, if sufficient technical data justifying
the request is submitted and the unit of government
making the request agrees to provide funds in an amount
determined by the [Director] Administrator, but which
may not exceed 50 percent of the cost of carrying out
the requested revision or update.
(g) Availability of Flood Maps.--To promote compliance with
the requirements of this title, the [Director] Administrator
shall make flood insurance rate maps and related information
available free of charge to the Federal entities for lending
regulation, Federal agency lenders, State agencies directly
responsible for coordinating the national flood insurance
program, and appropriate representatives of communities
participating in the national flood insurance program, and at a
reasonable cost to all other persons. Any receipts resulting
from this subsection shall be deposited in the National Flood
Insurance Fund, pursuant to section 1310(b)(6).
(h) Notification of Flood Map Changes.--The [Director]
Administrator shall cause notice to be published in the Federal
Register (or shall provide notice by another comparable method)
of any change to flood insurance map panels and any change to
flood insurance map panels issued in the form of a letter of
map amendment or a letter of map revision. Such notice shall be
published or otherwise provided not later than 30 days after
the map change or revision becomes effective. Notice by any
method other than publication in the Federal Register shall
include all pertinent information, provide for regular and
frequent distribution, and be at least as accessible to map
users as notice in the Federal Register. All notices under this
subsection shall include information on how to obtain copies of
the changes or revisions.
(i) Compendia of Flood Map Changes.--Every 6 months, the
[Director] Administrator shall publish separately in their
entirety within a compendium, all changes and revisions to
flood insurance map panels and all letters of map amendment and
letters of map revision for which notice was published in the
Federal Register or otherwise provided during the preceding 6
months. The [Director] Administrator shall make such compendia
available, free of charge, to Federal entities for lending
regulation, Federal agency lenders, and States and communities
participating in the national flood insurance program pursuant
to section 1310 and at cost to all other parties. Any receipts
resulting from this subsection shall be deposited in the
National Flood Insurance Fund, pursuant to section 1310(b)(6).
(j) Provision of Information.--In the implementation of
revisions to and updates of flood insurance rate maps, the
[Director] Administrator shall share information, to the extent
appropriate, with the Under Secretary of Commerce for Oceans
and Atmosphere and representatives from State coastal zone
management programs.
(k) Treatment of Levees.--The Administrator may not issue
flood insurance maps, or make effective updated flood insurance
maps, that omit or disregard the actual protection afforded by
an existing levee, floodwall, pump or other flood protection
feature, regardless of the accreditation status of such
feature.
(l) Notification to Members of Congress of Map
Modernization.--Upon any revision or update of any floodplain
area or flood-risk zone pursuant to subsection (f), any
decision pursuant to subsection (f)(1) that such revision or
update is necessary, any issuance of preliminary maps for such
revision or updating, or any other significant action relating
to any such revision or update, the Administrator shall notify
the Senators for each State affected, and each Member of the
House of Representatives for each congressional district
affected, by such revision or update in writing of the action
taken.
(m) Reimbursement.--
(1) Requirement upon bona fide offer.--If an owner of
any property located in an area described in section
102(i)(3) of the Flood Disaster Protection Act of 1973
obtains a letter of map amendment due to a bona fide
error on the part of the Administrator of the Federal
Emergency Management Agency, the Administrator shall
reimburse such owner, or such entity or jurisdiction
acting on such owner's behalf, for any reasonable costs
incurred in obtaining such letter.
(2) Reasonable costs.--The Administrator shall, by
regulation or notice, determine a reasonable amount of
costs to be reimbursed under paragraph (1), except that
such costs shall not include legal or attorneys fees.
In determining the reasonableness of costs, the
Administrator shall only consider the actual costs to
the owner of utilizing the services of an engineer,
surveyor, or similar services.

CRITERIA FOR LAND MANAGEMENT AND USE

Sec. 1361. (a) The [Director] Administrator is authorized to
carry out studies and investigations, utilizing to the maximum
extent practicable the existing facilities and services of
other Federal departments or agencies, and State and local
governmental agencies, and any other organizations, with
respect to the adequacy of State and local measures in flood-
prone areas as to land management and use, flood control, flood
zoning, and flood damage prevention, and may enter into any
contracts, agreements or other appropriate arrangements to
carry out such authority.

* * * * * * *

(c) On the basis of such studies and investigations, and such
other information as he deems necessary, the [Director]
Administrator shall from time to time develop comprehensive
critera designed to encourage, where necessary, the adoption of
adequate State and local measures which, to the maximum extent
feasible, will--
(1) * * *

* * * * * * *

SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE LOSS
PROPERTIES.

(a) Authority.--To the extent amounts are made available for
use under this section, the [Director] Administrator may,
subject to the limitations of this section, provide financial
assistance to States and communities that decide to participate
in the pilot program established under this section for taking
actions with respect to severe repetitive loss properties (as
such term is defined in subsection (b)) to mitigate flood
damage to such properties and losses to the National Flood
Insurance Fund from such properties.
(b) Severe Repetitive Loss Property.--For purposes of this
section, the term ``severe repetitive loss property'' has the
following meaning:
(1) * * *
(2) Multifamily properties.--In the case of a
property consisting of 5 or more residences, such term
shall have such meaning as the [Director] Administrator
shall by regulation provide.

* * * * * * *

(d) Matching Requirement.--
(1) In general.--Except as provided in paragraph (2),
in any fiscal year the [Director] Administrator may not
provide 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
[Director] Administrator shall require, that the State
or community will contribute from non-Federal funds for
carrying out the eligible activities to be funded with
such assistance amounts.
(2) Reduced community match.--With respect to any 1-
year period in which assistance is made available under
this section, the [Director] Administrator may adjust
the contribution required under paragraph (1) by any
State, and for the communities located in that State,
to not less than 10 percent of the cost of the
activities for each severe repetitive loss property for
which grant amounts are provided if, for such year--
(A) * * *
(B) the [Director] Administrator determines,
after consultation with the State, that the
State has taken actions to reduce the number of
such properties.
(3) Non-federal funds.--For purposes of this
subsection, the term ``non-Federal funds'' includes
State or local agency funds, in-kind contributions, any
salary paid to staff to carry out the eligible
activities of the recipient, the value of the time and
services contributed by volunteers to carry out such
activities (at a rate determined by the [Director]
Administrator), and the value of any donated material
or building and the value of any lease on a building.
(e) Notice of Mitigation Program.--
(1) In general.--Upon selecting a State or community
to receive assistance under subsection (a) to carry out
eligible activities, the [Director] Administrator shall
notify the owners of a severe repetitive loss property,
in plain language, within that State or community--
(A) * * *

* * * * * * *

(2) Identification of severe repetitive loss
properties.--The [Director] Administrator shall take
such steps as are necessary to identify severe
repetitive loss properties, and submit that information
to the relevant States and communities.
(f) Standards for Mitigation Offers.--The program under this
section for providing assistance for eligible activities for
severe repetitive loss properties shall be subject to the
following limitations:
(1) Priority.--In determining the properties for
which to provide assistance for eligible activities
under subsection (c), the [Director] Administrator
shall provide assistance for properties in the order
that will result in the greatest amount of savings to
the National Flood Insurance Fund in the shortest
period of time, in a manner consistent with the
allocation formula under paragraph (5).
(2) Offers.--The [Director] Administrator shall
provide assistance in a manner that permits States and
communities to make offers to owners of severe
repetitive loss properties to take eligible activities
under subsection (c) as soon as practicable.

* * * * * * *

(4) Deference to local mitigation decisions.--The
[Director] Administrator shall not, by rule,
regulation, or order, establish a priority for funding
eligible activities under this section that gives
preference to one type or category of eligible activity
over any other type or category of eligible activity.
(5) Allocation.--
(A) In general.--Subject to subparagraphs (B)
and (C), of the total amount made available for
assistance under this section in any fiscal
year, the [Director] Administrator shall
allocate assistance to a State, and the
communities located within that State, based
upon the percentage of the total number of
severe repetitive loss properties located
within that State.
(B) Redistribution.--Any funds allocated to a
State, and the communities within the State,
under subparagraph (A) that have not been
obligated by the end of each fiscal year shall
be redistributed by the [Director]
Administrator to other States and communities
to carry out eligible activities in accordance
with this section.
(C) Exception.--Of the total amount made
available for assistance under this section in
any fiscal year, 10 percent shall be made
available to communities that--
(i) * * *
(ii) are located in States that
receive little or no assistance, as
determined by the [Director]
Administrator, under the allocation
formula under subparagraph (A).

* * * * * * *

(g) Purchase Offers.--A State or community may take action
under subsection (c)(2) to purchase a severe repetitive loss
property only if the following requirements are met:
(1) Use of property.--The State or community enters
into an agreement with the [Director] Administrator
that provides assurances that the property purchased
will be used in a manner that is consistent with the
requirements of section 404(b)(2)(B) of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170c(b)(2)(B)) for properties acquired,
accepted, or from which a structure will be removed
pursuant to a project provided property acquisition and
relocation assistance under such section 404(b).
(2) Offers.--The [Director] Administrator shall
provide assistance in a manner that permits States and
communities to make offers to owners of severe
repetitive loss properties and of associated land to
engage in eligible activities as soon as possible.

* * * * * * *

(4) Comparable housing payment.--If a purchase offer
made under paragraph (2) is less than the cost of the
homeowner-occupant to purchase a comparable replacement
dwelling outside the flood hazard area in the same
community, the [Director] Administrator shall make
available an additional relocation payment to the
homeowner-occupant to apply to the difference.
(h) Increased Premiums in Cases of Refusal To Mitigate.--
(1) In general.--In any case in which the owner of a
severe repetitive loss property refuses an offer to
take action under paragraph (1) or (2) of subsection
(c) with respect to such property, the [Director]
Administrator shall--
(A) * * *
(B) notwithstanding subsections (a) through
(c) of section 1308, thereafter the chargeable
premium rate with respect to the property shall
be the amount equal to [150 percent of the
chargeable rate for the property at the time
that the offer was made, as adjusted by any
other premium adjustments otherwise applicable
to the property and any subsequent increases
pursuant to paragraph (2) and subject to the
limitation under paragraph (3)] the applicable
estimated risk premium rate for such coverage
for the area (or subdivision thereof)
determined in accordance with section 1307(a),
subject to phase-in of such rates in the same
manner provided under paragraph (2) of section
1308(g) for properties described in paragraph
(1) of such section.
An offer to take action under paragraph (1) or (2) of
subsection (c) shall be considered to be made for
purposes of this paragraph with respect to a severe
repetitive loss property regardless of the time that
the offer was made and regardless of whether the
Administrator has transferred financial assistance
under this section to the State or community making the
offer for funding such action, but only if the owner of
the property is provided a reasonable period of time,
not to exceed 15 days, to respond to the offer.
[(2) Increased premiums upon subsequent flood
damage.--Notwithstanding subsections (a) through (c) of
section 1308, if the owner of a severe repetitive loss
property does not accept an offer to take action under
paragraph (1) or (2) of subsection (c) with respect to
such property and a claim payment exceeding $1,500 is
made under flood insurance coverage under this title
for damage to the property caused by a flood event
occurring after such offer is made, thereafter the
chargeable premium rate with respect to the property
shall be the amount equal to 150 percent of the
chargeable rate for the property at the time of such
flood event, as adjusted by any other premium
adjustments otherwise applicable to the property and
any subsequent increases pursuant to this paragraph and
subject to the limitation under paragraph (3).
[(3) Limitation on increased premiums.--In no case
may the chargeable premium rate for a severe repetitive
loss property be increased pursuant to this subsection
to an amount exceeding the applicable estimated risk
premium rate for the area (or subdivision thereof)
under section 1307(a)(1).]
[(4)] (2) Treatment of deductibles.--Any increase
in chargeable premium rates required under this
subsection for a severe repetitive loss property may be
carried out, to the extent appropriate, as determined
by the [Director] Administrator, by adjusting any
deductible charged in connection with flood insurance
coverage under this title for the property.
[(5)] (3) Notice of continued offer.--Upon each
renewal or modification of any flood insurance coverage
under this title for a severe repetitive loss property,
the [Director] Administrator shall notify the owner
that the offer made pursuant to subsection (c) is still
open.
[(6)] (4) Appeals.--
(A) In general.--Any owner of a severe
repetitive loss property may appeal a
determination of the [Director] Administrator
to take action under paragraph (1)(B) or (2)
with respect to such property, based only upon
the following grounds:
(i) * * *

* * * * * * *

(B) Procedure.--An appeal under this
paragraph of a determination of the [Director]
Administrator shall be made by filing, with the
[Director] Administrator, a request for an
appeal within 90 days after receiving notice of
such determination. Upon receiving the request,
the [Director] Administrator shall select, from
a list of independent third parties compiled by
the [Director] Administrator for such purpose,
a party to hear such appeal. Within 90 days
after filing of the request for the appeal,
such third party shall review the determination
of the [Director] Administrator and shall set
aside such determination if the third party
determines that the grounds under subparagraph
(A) exist. During the pendency of an appeal
under this paragraph, the [Director]
Administrator shall stay the applicability of
the rates established pursuant to paragraph
(1)(B) or (2), as applicable.
(C) Effect of final determination.--In an
appeal under this paragraph--
(i) if a final determination is made
in favor of the property owner under
subparagraph (A) exist, the third party
hearing such appeal shall require the
[Director] Administrator to reduce the
chargeable risk premium rate for flood
insurance coverage for the property
involved in the appeal from the amount
required under paragraph (1)(B) or (2)
to the amount paid prior to the offer
to take action under paragraph (1) or
(2) of subsection (c); and
(ii) if a final determination is made
that the grounds under subparagraph (A)
do not exist, the [Director]
Administrator shall promptly increase
the chargeable risk premium rate for
such property to the amount established
pursuant to paragraph (1)(B) or (2), as
applicable, and shall collect from the
property owner the amount necessary to
cover the stay of the applicability of
such increased rates during the
pendency of the appeal.

* * * * * * *

(E) Report.--Not later than 6 months after
the date of the enactment of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act
of 2004, the [Director] Administrator shall
submit a report describing the rules,
procedures, and administration for appeals
under this paragraph to--
(i) * * *

* * * * * * *

(i) Discretionary Actions in Cases of Fraudulent Claims.--If
the [Director] Administrator determines that a fraudulent claim
was made under flood insurance coverage under this title for a
severe repetitive loss property, the [Director] Administrator
may--
(1) * * *

* * * * * * *

(j) Rules.--
(1) In general.--The [Director] Administrator shall,
by rule--
(A) * * *
(B) ensure that the procedures developed
under paragraph (1)--
(i) require the [Director]
Administrator to notify States and
communities of the availability of
funding under this section, and that
participation in the pilot program
under this section is optional;
(ii) provide that the [Director]
Administrator may assist States and
communities in identifying severe
repetitive loss properties within
States or communities;

* * * * * * *

(iv) require each State or community
to submit a list of severe repetitive
loss properties to the [Director]
Administrator that the State or
community would like to be the subject
of eligible activities under this
section.
(2) Consultation.--Not later than 90 days after the
date of enactment of this Act, the [Director]
Administrator shall consult with State and local
officials in carrying out paragraph (1)(A), and provide
an opportunity for an oral presentation, on the record,
of data and arguments from such officials.
(k) Funding.--
(1) In general.--Pursuant to section 1310(a)(8), the
[Director] Administrator may use amounts from the
National Flood Insurance Fund to provide assistance
under this section in each of fiscal years 2005, 2006,
2007, 2008, and 2009, except that the amount so used in
each such fiscal year may not exceed $40,000,000 and
shall remain available until expended. Notwithstanding
any other provision of this title, amounts made
available pursuant to this subsection shall not be
subject to offsetting collections through premium rates
for flood insurance coverage under this title.
(2) Administrative expenses.--Of the amounts made
available under this subsection, the [Director]
Administrator may use up to 5 percent for expenses
associated with the administration of this section.
(l) Termination.--The [Director] Administrator may not
provide assistance under this section to any State or community
after September 30, 2009.

APPEALS

Sec. 1363. (a) In establishing projected flood elevations for
land use purposes with respect to any community pursuant to
section 1361, the [Director] Administrator shall first propose
such determinations by publication for comment in the Federal
Register, by direct notification to the chief executive officer
of the community, and by publication in a prominent local
newspaper.
(b) The [Director] Administrator shall publish notification
of flood elevation determinations in a prominent local
newspaper at least twice during the ten-day period following
notification to the local government. During the ninety-day
period following the second publication, any owner or lessee of
real property within the community who believes his property
rights to be adversely affected by the [Director's]
Administrator's proposed determination may appeal such
determination to the local government. The sole basis for such
appeal shall be the possession of knowledge or information
indicating that elevations being proposed by the [Director]
Administrator with respect to an identified area having special
flood hazards are scientifically or technically incorrect, and
the sole relief which shall be granted under the authority of
this section in the event that such appeal is sustained in
accordance with subsection (e) or (f) is a modification of the
[Director's] Administrator's proposed determination
accordingly.
(c) Appeals by private persons shall be made to the chief
executive officer of the community, or to such agency as he
shall publicly designate, and shall set forth the data that
tend to negate or contradict the [Director's] Administrator's
finding in such form as the chief executive officer may
specify. The community shall review and consolidate all such
appeals and issue a written opinion stating whether the
evidence presented is sufficient to justify an appeal on behalf
of such persions by the community in its own name. Whether or
not the community decides to appeal the [Director's]
Administrator's determination, copies of individual appeals
shall be sent to the [Director] Administrator as they are
received by the community, and the community's appeal or a copy
of its decision not to appeal shall be filed with the
[Director] Administrator not later than ninety days after the
date of the second newspaper publication of the [Director's]
Administrator's notification.
(d) In the event the [Director] Administrator does not
receive an appeal from the community within the ninety days
provided he shall consolidate and review on their own merits,
in accordance with the procedures set forth in subsection (e),
the appeals filed within the community by private persons and
shall make such modifications of his proposed determinations as
may be appropriate, taking into account the written opinion, if
any, issued by the community in not supporting such appeals.
The [Director's] Administrator's decision shall be in written
form, and copies thereof shall be sent both to the chief
executive officer of the community and to each individual
appellant.
(e) Upon appeal by any community, as provided by this
section, the [Director] Administrator shall review and take
fully into account any technical or scientific data submitted
by the community that tend to negate or contradict the
information upon which his proposed determination is based. The
[Director] Administrator shall resolve such appeal by
consultation with officials of the local government involved,
by administrative hearing, or by submission of the conflicting
data to an independent scientific body or appropriate Federal
agency for advice. Until the conflict in data is resolved, and
the [Director] Administrator makes a final determination on the
basis of his findings in the Federal Register, and so notifies
the governing body of the community, flood insurance previously
available within the community shall continue to be available,
and no person shall be denied the right to purchase such
insurance at chargeable rates. The [Director] Administrator
shall make his determination within a reasonable time. The
community shall be given a reasonable time after the
[Director's] Administrator's final determination in which to
adopt local land use and control measures consistent with the
[Director's] Administrator's determination. The reports and
other information used by the [Director] Administrator in
making his final determination shall be made available for
public inspection and shall be admissible in a court of law in
the event the community seeks judicial review as provided by
this section.
(f) When, incident to any appeal under subsection (b) or (c),
the owner or lessee of real property or the community, as the
case may be, incurs expense in connection with the services of
surveyors, engineers, or similar services, but not including
legal services, in the effecting of an appeal which is
successful in whole or in part, the [Director] Administrator
shall reimburse such individual or community to an extent
measured by the ratio of the successful portion of the appeal
as compared to the entire appeal and applying such ratio to the
reasonable value of all such services, but no reimbursement
shall be made by the [Director] Administrator in respect to any
fee or expense payment, the payment of which was agreed to be
contingent upon the result of the appeal. There is authorized
to be appropriated for purposes of implementing this
subsection, not to exceed $250,000.
(g) Any appellant aggrieved by any final determination of the
[Director] Administrator upon administrative appeal, as
provided by this section, may appeal such determination to the
United States district court for the district within which the
community is located not more than sixty days after receipt of
notice of such determination. The scope of review by the court
shall be as provided by chapter 7 of title 5, United States
Code. During the pendency of any such litigation, all final
determinations of the [Director] Administrator shall be
effective for the purposes of this title unless stayed by the
court for good cause shown.

NOTICE REQUIREMENTS

Sec. 1364. (a) Notification of Special Flood Hazards.--
(1) Regulated lending institutions.--Each Federal
entity for lending regulation (after consultation and
coordination with the Financial Institutions
Examination Council) shall by regulation require
regulated lending institutions, as a condition of
making, increasing, extending, or renewing any loan
secured by improved real estate or a mobile home that
the regulated lending institution determines is located
or is to be located in an area that has been identified
by the [Director] Administrator 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 regulated lending
institution retain a record of the receipt of the
notices by the purchaser or lessee and the servicer.
(2) Federal agency lenders.--Each Federal agency
lender shall by regulation require notification in the
manner provided under paragraph (1) with respect to any
loan that is made by the Federal agency lender and
secured by improved real estate or a mobile home
located or to be located in an area that has been
identified by the [Director] Administrator 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 substantially identical to the regulations issued
under paragraph (1).
(3) Contents of notice.--Written notification
required under this subsection shall include--
(A) a warning, in a form to be established by
the [Director] Administrator, stating that the
building on the improved real estate securing
the loan is located, or the mobile home
securing the loan is or is to be located, in an
area having special flood hazards;

* * * * * * *

(D) any other information that the [Director]
Administrator considers necessary to carry out
the purposes of the national flood insurance
program.
(b) Notification of Change of Servicer.--
(1) Lending institutions.--Each Federal entity for
lending regulation (after consultation and coordination
with the Financial Institutions Examination Council)
shall by regulation require regulated lending
institutions, in connection with the making,
increasing, extending, renewing, selling, or
transferring any loan described in subsection (a)(1),
to notify the [Director] Administrator (or the designee
of the [Director] Administrator) in writing during the
term of the loan of the servicer of the loan. Such
institutions shall also notify the [Director]
Administrator (or such designee) of any change in the
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 change in
the servicing of a loan, the duty to provide
notification under this subsection shall transfer to
the transferee servicer of the loan.

* * * * * * *

(c) Notification of Expiration of Insurance.--The [Director]
Administrator (or the designee of the [Director] Administrator)
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 covered by the contract, the servicer of any loan
secured by the property covered by the contract, and (if known
to the [Director] Administrator) the owner of the loan.

STANDARD HAZARD DETERMINATION FORMS

Sec. 1365. (a) Development.--The [Director] Administrator, in
consultation with representatives of the mortgage and lending
industry, the Federal entities for lending regulation, the
Federal agency lenders, and any other appropriate individuals,
shall develop a standard form for determining, in the case of a
loan secured by improved real estate or a mobile home, whether
the building or mobile home is located in an area identified by
the [Director] Administrator as an area having special flood
hazards and in which flood insurance under this title is
available. The form shall be established by regulations issued
not later than 270 days after the date of enactment of the
Riegle Community Development and Regulatory Improvement Act of
1994.
(b) Design and Contents.--
(1) * * *
(2) Contents.--The form shall require identification
of the type of flood-risk zone in which the building or
mobile home is located, the complete map and panel
numbers for the improved real estate or property on
which the mobile home is located, the community
identification number and community participation
status (for purposes of the national flood insurance
program) of the community in which the improved real
estate or such property is located, and the date of the
map used for the determination, with respect to flood
hazard information on file with the [Director]
Administrator. If the building or mobile home is not
located in an area having special flood hazards the
form shall require a statement to such effect and shall
indicate the complete map and panel numbers of the
improved real estate or property on which the mobile
home is located. If the complete map and panel numbers
are not available because the building or mobile home
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 effect. The form shall provide for
inclusion or attachment of any relevant documents
indicating revisions or amendments to maps.

* * * * * * *

(e) Reliance on Previous Determination.--Any person
increasing, extending, renewing, or purchasing a loan secured
by improved real estate or a mobile home may rely on a previous
determination of whether the building or mobile home is located
in an area having special flood hazards (and shall not be
liable for any error in such previous determination), if the
previous determination was made not more than 7 years before
the date of the transaction and the basis for the previous
determination has been set forth on a form under this section,
unless--
(1) * * *
(2) the person contacts the [Director] Administrator
to determine when the most recent map revisions or
updates affecting such property occurred and such
revisions and updates have occurred after such previous
determination.

* * * * * * *

MITIGATION ASSISTANCE

Sec. 1366. (a) Authority.--The [Director] Administrator 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
damage to structures covered under contracts for flood
insurance under this title. Such financial assistance shall be
made available to States and communities in the form of grants
under subsection (b) for planning assistance and in the form of
grants under this section for carrying out mitigation
activities.
(b) Planning Assistance Grants.--
(1) In general.--The [Director] Administrator may
make grants under this subsection to States and
communities to assist in developing mitigation plans
under subsection (c).
(2) Funding.--Of any amounts made available from the
National Flood Mitigation Fund for use under this
section in any fiscal year, the [Director]
Administrator may use not more than 7.5 percent of the
available funds under this section to provide planning
assistance grants under this subsection.

* * * * * * *

(c) Eligibility for Mitigation Assistance.--To be eligible to
receive financial assistance under this section for mitigation
activities, a State or community shall develop, and have
approved by the [Director] Administrator, a flood risk
mitigation plan (in this section referred to as a ``mitigation
plan''), that describes the mitigation activities to be carried
out with assistance provided under this section, is consistent
with the criteria established by the [Director] Administrator
under section 1361, and provides protection against flood
losses to structures for which contracts for flood insurance
are available under this title. The mitigation plan shall be
consistent with a comprehensive strategy for mitigation
activities for the area affected by the mitigation plan, that
has been adopted by the State or community following a public
hearing.
(d) Notification of Approval and Grant Award.--
(1) In general.--The [Director] Administrator 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.
(2) Notification of disapproval.--If the [Director]
Administrator does not approve a mitigation plan
submitted under this subsection, the [Director]
Administrator shall notify, in writing, the State or
community submitting the plan of the reasons for such
disapproval.
(e) Eligible Mitigation Activities.--
(1) Use of amounts.--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]
Administrator under subsection (d). The [Director]
Administrator shall provide assistance under this
section to the extent amounts are available in the
National Flood Mitigation Fund pursuant to
appropriation Acts, subject only to the absence of
approvable mitigation plans.
(2) Determination of eligible plans.--The [Director]
Administrator may approve only mitigation plans that
specify mitigation activities that the [Director]
Administrator determines are technically feasible and
cost-effective and only such plans that propose
activities that are cost-beneficial to the National
Flood Mitigation Fund.
(3) Standard for approval.--The [Director]
Administrator shall approve mitigation plans meeting
the requirements for approval under paragraph (1) that
will be most cost-beneficial to the National Flood
Mitigation Fund. The [Director] Administrator may
approve only mitigation plans that give priority for
funding to such properties, or to such subsets of
properties, as are in the best interest of the National
Flood Insurance Fund.
(4) Priority for mitigation assistance.--In providing
grants under this subsection for mitigation activities,
the [Director] Administrator shall give first priority
for funding to such properties, or to such subsets of
such properties as the [Director] Administrator may
establish, that the [Director] Administrator determines
are in the best interests of the National Flood
Insurance Fund and for which matching amounts under
subsection (f) are available.
(5) Eligible activities.--The [Director]
Administrator shall determine whether mitigation
activities described in a mitigation plan submitted
under subsection (d) comply with the requirements under
paragraph (1). Such activities may include--
(A) * * *

* * * * * * *

(C) acquisition by States and communities of
properties (including public properties)
located in areas having special flood hazards
or other areas of flood risk and properties
substantially damaged by flood, for public use,
as the [Director] Administrator determines is
consistent with sound land management and use
in such area;
(D) minor physical mitigation efforts that do
not duplicate the flood prevention activities
of other Federal agencies and that lessen the
frequency or severity of flooding and decrease
predicted flood damages, which shall not
include major flood control projects such as
dikes, levees, seawalls, groins, and jetties
unless the [Director] Administrator
specifically determines in approving a
mitigation plan that such activities are the
most cost-effective mitigation activities for
the National Flood Mitigation Fund;

* * * * * * *

(G) other activities that the [Director]
Administrator considers appropriate and
specifies in regulation; and

* * * * * * *

(6) Eligibility of demolition and rebuilding of
properties.--The Administrator shall consider as an
eligible activity the demolition and rebuilding of
properties to at least base flood levels or higher, if
required by the Administrator or if required by any
State or local ordinance, and in accordance with
project implementation criteria established by the
Administrator.
(f) Limitations on Amount of Assistance.--
(1) * * *

* * * * * * *

(3) Waiver.--The [Director] Administrator may waive
the dollar amount limitations under paragraphs (1) and
(2) for any State or community for any 5-year period
during which a major disaster or emergency declared by
the President (pursuant to the Robert T. Stafford
Disaster Relief and Emergency Assistance Act) as a
result of flood conditions is in effect with respect to
areas in the State or community.
(g) Matching Requirement.--
(1) In general.--The [Director] Administrator 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
[Director] Administrator shall require, that the State
or community will contribute from non-Federal funds to
develop a mitigation plan under subsection (c) and to
carry out mitigation activities under the approved
mitigation plan. In no case shall any in-kind
contribution by any State or community exceed one-half
of the amount of non-Federal funds contributed by the
State or community.
(2) Reduced community match.--With respect to any 1-
year period in which assistance is made available under
this section, the [Director] Administrator may adjust
the contribution required under paragraph (1) by any
State, and for the communities located in that State,
to not less than 10 percent of the cost of the
activities for each severe repetitive loss property for
which grant amounts are provided if, for such year--
(A) * * *
(B) the [Director] Administrator determines,
after consultation with the State, that the
State has taken actions to reduce the number of
such properties.
(3) Non-federal funds.--For purposes of this
subsection, the term ``non-Federal funds'' includes
State or local agency funds, in-kind contributions, any
salary paid to staff to carry out the mitigation
activities of the recipient, the value of the time and
services contributed by volunteers to carry out such
activities (at a rate determined by the [Director]
Administrator), and the value of any donated material
or building and the value of any lease on a building.
(h) Oversight of Mitigation Plans.--The [Director]
Administrator 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 (g) are used in accordance with such certification.
(i) Recapture.--
(1) Noncompliance with plan.--If the [Director]
Administrator 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]
Administrator shall recapture 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] Administrator 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 (g), the [Director]
Administrator shall recapture any unexpended amounts of
mitigation assistance exceeding 3 times the amount of
such matching funds actually provided and deposit the
amounts in the National Flood Mitigation Fund under
section 1367.
(j) Reports.--Not later than 1 year after the date of
enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994 and biennially thereafter, the
[Director] Administrator shall submit a report to the Congress
describing the status of mitigation activities carried out with
assistance provided under this section.

* * * * * * *

(m) Coordination With States and Communities.--The [Director]
Administrator shall, in consultation and coordination with
States and communities take such actions as are appropriate to
encourage and improve participation in the national flood
insurance program of owners of properties, including owners of
properties that are not located in areas having special flood
hazards (the 100-year floodplain), but are located within flood
prone areas.

NATIONAL FLOOD MITIGATION FUND

Sec. 1367. (a) Establishment and Availability.--The
[Director] Administrator 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 described
in subsection (b) and shall be available, to the extent
provided in appropriation Acts, for providing assistance under
section 1366.

* * * * * * *

(c) Administrative Expenses.--The [Director] Administrator
may use not more than 5 percent of amounts made available under
subsection (b) to cover salaries, expenses, and other
administrative costs incurred by the [Director] Administrator
to make grants and provide assistance under sections 1366 and
1323.
(d) Investment.--If the [Director] Administrator determines
that the amounts in the National Flood Mitigation Fund are in
excess of amounts needed under subsection (a), the [Director]
Administrator may invest any excess amounts the [Director]
Administrator determines advisable in interest-bearing
obligations issued or guaranteed by the United States.
(e) Report.--The [Director] Administrator shall submit a
report to the Congress not later than the expiration of the 1-
year period beginning on the date of 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.

CHAPTER IV--APPROPRIATIONS AND MISCELLANEOUS PROVISIONS

DEFINITIONS

Sec. 1370. (a) As used in this title--
(1) the term ``flood'' shall have such meaning as may
be prescribed in regulations of the [Director]
Administrator, and may include inundation from rising
waters or from the overflow of streams, rivers, or
other bodies of water, or from tidal surges, abnormally
high tidal water, tidal waves, tsunamis, hurricanes, or
other severe storms or deluge;

* * * * * * *

(3) the terms ``insurance company'', ``other
insurer'' and ``insurance agent or broker'' include any
organizations and persons authorized to engage in the
insurance business under the laws of any State, is
subject to the reporting requirements of the Securities
Exchange Act of 1934, pursuant to section 13(a) or
15(d) of such Act (15 U.S.C. 78m(a), 78o(d)), or is
authorized by the Administrator to assume reinsurance
on risks insured by the flood insurance program;

* * * * * * *

(6) the term ``[Director] Administrator'' means the
[Director] Administrator of the Federal Emergency
Management Agency;

* * * * * * *

(15) the term ``substantially damaged structure''
means a structure covered by a contract for flood
insurance that has incurred damage for which the cost
of repair exceeds an amount specified in any regulation
promulgated by the [Director] Administrator, or by a
community ordinance, whichever is lower.
(b) The term ``flood'' shall also include inundation from
mudslides which are proximately caused by accumulations of
water on or under the ground; and all of the provisions of this
title shall apply with respect to such mudslides in the same
manner and to the same extent as with respect to floods
described in subsection (a)(1), subject to and in accordance
with such regulations, modifying the provisions of this title
(including the provisions relating to land management and use)
to the extent necessary to insure that they can be effectively
so applied, as the [Director] Administrator may prescribe to
achieve (with respect to such mudslides) the purposes of this
title and the objectives of the program.
(c) The term ``flood'' shall also include the collapse or
subsidence of land along the shore of a lake or other body of
water as a result of erosion or undermining caused by waves or
currents of water exceeding anticipated cyclical levels, and
all of the provisions of this title shall apply with respect to
such collapse or subsidence in the same manner and to the same
extent as with respect to floods described in subsection
(a)(1), subject to and in accordance with such regulations,
modifying the provisions of this title (including the
provisions relating to land management and use) to the extent
necessary to insure that they can be effectively so applied, as
the [Director] Administrator may prescribe to achieve (with
respect to such collapse or subsidence) the purposes of this
title and the objectives of the program.

STUDIES OF OTHER NATURAL DISASTERS

Sec. 1371. (a) The [Director] Administrator is authorized to
undertake such studies as may be necessary for the purpose of
determining the extent to which insurance protection against
earthquakes or any other natural disaster perils, other than
flood, is not available from public or private sources, and the
feasibility of such insurance protection being made available.
(b) Studies under this section shall be carried out, to the
maximum extent practicable, with the cooperation of other
Federal departments and agencies and State and local agencies,
and the [Director] Administrator is authorized to consult with,
receive information from, and enter into any necessary
agreements or other arrangements with such other Federal
departments and agencies (on a reimbursement basis) and such
State and local agencies.

PAYMENTS

Sec. 1372. Any payments under this title may be made (after
necessary adjustment on account of previously made
underpayments or overpayments) in advance or by way of
reimbursement, and in such installments and on such conditions,
as the [Director] Administrator may determine.

* * * * * * *

EFFECTIVE DATE

Sec. 1377. This title shall take effect one hundred and
twenty days following the date of its enactment, except that
the [Director] Administrator on the basis of a finding that
conditions exist necessitating the prescribing of an additional
period, may prescribe a later effective date which in no event
shall be more than one hundred and eighty days following such
date of enactment.
----------

FLOOD DISASTER PROTECTION ACT OF 1973

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Flood Disaster Protection Act of
1973''.

DEFINITIONS

Sec. 3. (a) As used in this Act, unless the context otherwise
requires, the term--
(1) * * *

* * * * * * *

(6) ``[Director] Administrator'' means the
[Director] Administrator of the Federal Emergency
Management Agency;

* * * * * * *

(b) The [Director] Administrator is authorized to define or
redefine, by rules and regulations, any scientific or technical
term used in this Act, insofar as such definition is not
inconsistent with the purposes of this Act.

TITLE I--EXPANSION OF NATIONAL FLOOD INSURANCE PROGRAM

* * * * * * *

FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS AND ESCROW
ACCOUNTS

Sec. 102. (a) After the expiration of sixty days following
the date of enactment of this Act, no Federal officer or agency
shall approve any financial assistance for acquisition or
construction purposes for use in any area that has been
identified by the [Director] Administrator as an area having
special flood hazards and in which the sale of flood insurance
has been made available under the National Flood Insurance Act
of 1968, unless the building or mobile home and any personal
property to which such financial assistance relates is covered
by flood insurance in an amount at least equal to its
development or project cost (less estimated land cost) or to
the maximum limit of coverage made available with respect to
the particular type of property under the National Flood
Insurance Act of 1968, whichever is less: Provided, That if the
financial assistance provided is in the form of a loan or an
insurance or guaranty of a loan, the amount of flood insurance
required need not exceed the outstanding principal balance of
the loan and need not be required beyond the term of the loan.
The requirement of maintaining flood insurance shall apply
during the life of the property, regardless of transfer of
ownership of such property.
(b) Requirement for Mortgage Loans.--
(1) Regulated lending institutions.--Each Federal
entity for lending regulation (after consultation and
coordination with the Financial Institutions
Examination Council established under the Federal
Financial Institutions Examination Council Act of 1974)
shall by regulation direct regulated [lending
institutions not to make] lending institutions--
(A) not to 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]
Administrator 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 an amount at least equal
to the outstanding principal balance of the
loan or the maximum limit of coverage made
available under the Act with respect to the
particular type of property, whichever is
less[.]; and
(B) to accept private flood insurance as
satisfaction of the flood insurance coverage
requirement under subparagraph (A) if the
coverage provided by such private flood
insurance meets the requirements for coverage
under such subparagraph.
(2) 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] Administrator 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). Each
Federal agency lender shall accept private flood
insurance as satisfaction of the flood insurance
coverage requirement under the preceding sentence if
the flood insurance coverage provided by such private
flood insurance meets the requirements for coverage
under such sentence. 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 issued
under paragraph (1).
(3) Government-sponsored enterprises for housing.--
The Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation shall implement
procedures reasonably designed to ensure that, for any
loan that is--
(A) secured by improved real estate or a
mobile home located in an area that has been
identified, at the time of the origination of
the loan or at any time during the term of the
loan, by the [Director] Administrator as an
area having special flood hazards and in which
flood insurance is available under the National
Flood Insurance Act of 1968, and

* * * * * * *

the building or mobile home and any personal property
securing the loan is covered for the term of the loan
by flood insurance in the amount provided in paragraph
(1). The Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation shall accept
private flood insurance as satisfaction of the flood
insurance coverage requirement under the preceding
sentence if the flood insurance coverage provided by
such private flood insurance meets the requirements for
coverage under such sentence.

* * * * * * *

(5) Private flood insurance defined.--In this
subsection, the term ``private flood insurance'' means
a contract for flood insurance coverage allowed for
sale under the laws of any State.
(c) Exceptions to Purchase Requirements.--
(1) State-owned property.--Notwithstanding the other
provisions of this section, flood insurance shall not
be required on any State-owned property that is covered
under an adequate State policy of self-insurance
satisfactory to the [Director] Administrator. The
[Director] Administrator shall publish and periodically
revise the list of States to which this subsection
applies.

* * * * * * *

(d) Escrow of Flood Insurance Payments.--
(1) Regulated lending institutions.--Each Federal
entity for lending regulation (after consultation and
coordination with the Financial Institutions
Examination Council) shall by regulation require that,
if a regulated lending institution requires the
escrowing of taxes, insurance premiums, fees, or any
other charges for a loan secured by residential
improved real estate or a mobile home, then all
premiums and fees for flood insurance under the
National Flood Insurance Act of 1968 for the real
estate or mobile home shall be paid to the regulated
lending institution or other servicer for the loan in a
manner sufficient to make payments as due for the
duration of the loan. Upon receipt of the premiums, the
regulated lending institution 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] Administrator or the provider of the
insurance that insurance premiums are due, the
regulated lending institution or servicer shall pay
from the escrow account to the provider of the
insurance the amount of insurance premiums owed.

* * * * * * *

(e) Placement of Flood Insurance by Lender.--
(1) Notification to borrower of lack of coverage.--
If, at the time of origination or 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] Administrator (at the time
of the origination of the loan or at any time during
the term of the loan) as an area having special flood
hazards and in which flood insurance is available under
the National Flood Insurance Act of 1968, the lender or
servicer for the loan determines that the building or
mobile home and any personal property securing the loan
is not covered by flood insurance or is covered by such
insurance in an amount less than the amount required
for the property pursuant to paragraph (1), (2), or (3)
of subsection (b), the lender or servicer shall notify
the borrower under the loan that the borrower should
obtain, at the borrower's expense, an amount of flood
insurance for the building or mobile home and such
personal property that is not less than the amount
under 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 45 days after notification under paragraph (1),
the lender or servicer for the loan shall purchase the
insurance on behalf of the borrower and may charge the
borrower for the cost of premiums and fees incurred by
the lender or servicer for the loan in purchasing the
[insurance.] insurance, including premiums or fees
incurred for coverage beginning on the date on which
flood insurance coverage lapsed or did not provide a
sufficient coverage amount.
(3) Termination of force-placed insurance.--Within 30
days of receipt by the lender or servicer of a
confirmation of a borrower's existing flood insurance
coverage, the lender or servicer shall--
(A) terminate the force-placed insurance; and
(B) refund to the borrower all force-placed
insurance premiums paid by the borrower during
any period during which the borrower's flood
insurance coverage and the force-placed flood
insurance coverage were each in effect, and any
related fees charged to the borrower with
respect to the force-placed insurance during
such period.
(4) Sufficiency of demonstration.--For purposes of
confirming a borrower's existing flood insurance
coverage, a lender or servicer for a loan shall accept
from the borrower an insurance policy declarations page
that includes the existing flood insurance policy
number and the identity of, and contact information
for, the insurance company or agent.
[(3)] (5) Review of determination regarding
required purchase.--
(A) In general.--The borrower and lender for
a loan secured by improved real estate or a
mobile home may jointly request the [Director]
Administrator to review a determination of
whether the building or mobile home is located
in an area having special flood hazards. Such
request shall be supported by technical
information relating to the improved real
estate or mobile home. Not later than 45 days
after the [Director] Administrator receives the
request, the [Director] Administrator shall
review the determination and provide to the
borrower and the lender with a letter stating
whether or not the building or mobile home is
in an area having special flood hazards. The
determination of the [Director] Administrator
shall be final.
(B) Effect of determination.--Any person to
whom a borrower provides a letter issued by the
[Director] Administrator pursuant to
subparagraph (A), stating that the building or
mobile home securing the loan of the borrower
is not in an area having special flood hazards,
shall have no obligation under this title to
require the purchase of flood insurance for
such building or mobile home during the period
determined by the [Director] Administrator,
which shall be specified in the letter and
shall begin on the date on which such letter is
provided.
(C) Effect of failure to respond.--If a
request under subparagraph (A) is made in
connection with the origination of a loan and
the [Director] Administrator fails to provide a
letter under subparagraph (A) before the later
of (i) the expiration of the 45-day period
under such subparagraph, or (ii) the closing of
the loan, no person shall have an obligation
under this title to require the purchase of
flood insurance for the building or mobile home
securing the loan until such letter is
provided.
[(4)] (6) Applicability.--This subsection shall
apply to all loans outstanding on or after the date of
enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994.

* * * * * * *

(h) Fee for Determining Location.--Notwithstanding any other
Federal or State law, any person who makes a loan secured by
improved real estate or a mobile home or any servicer for such
a loan may charge a reasonable fee for the costs of determining
whether the building or mobile home securing the loan is
located in an area having special flood hazards, but only in
accordance with the following requirements:
(1) Borrower fee.--The borrower under such a loan may
be charged the fee, but only if the determination--
(A) * * *
(B) is made pursuant to a revision or
updating under section 1360(f) of the
floodplain areas and flood-risk zones or
publication of a notice or compendia under
subsection (h) or (i) of section 1360 that
affects the area in which the improved real
estate or mobile home securing the loan is
located or that, in the determination of the
[Director] Administrator, may reasonably be
considered to require a determination under
this subsection; or

* * * * * * *

(i) Authority To Temporarily Suspend Mandatory Purchase
Requirement.--
(1) Finding by administrator that area is an eligible
area.--For any area, upon a request submitted to the
Administrator by a local government authority having
jurisdiction over any portion of the area, the
Administrator shall make a finding of whether the area
is an eligible area under paragraph (3). If the
Administrator finds that such area is an eligible area,
the Administrator shall, in the discretion of the
Administrator, designate a period during which such
finding shall be effective, which shall not be longer
in duration than 12 months.
(2) Suspension of mandatory purchase requirement.--If
the Administrator makes a finding under paragraph (1)
that an area is an eligible area under paragraph (3),
during the period specified in the finding, the
designation of such eligible area as an area having
special flood hazards shall not be effective for
purposes of subsection (a), (b), and (e) of this
section, and section 202(a) of this Act. Nothing in
this paragraph may be construed to prevent any lender,
servicer, regulated lending institution, Federal agency
lender, the Federal National Mortgage Association, or
the Federal Home Loan Mortgage Corporation, at the
discretion of such entity, from requiring the purchase
of flood insurance coverage in connection with the
making, increasing, extending, or renewing of a loan
secured by improved real estate or a mobile home
located or to be located in such eligible area during
such period or a lender or servicer from purchasing
coverage on behalf of a borrower pursuant to subsection
(e).
(3) Eligible areas.--An eligible area under this
paragraph is an area that is designated or will,
pursuant to any issuance, revision, updating, or other
change in flood insurance maps that takes effect on or
after the date of the enactment of the Flood Insurance
Reform Act of 2011, become designated as an area having
special flood hazards and that meets any one of the
following 3 requirements:
(A) Areas with no history of special flood
hazards.--The area does not include any area
that has ever previously been designated as an
area having special flood hazards.
(B) Areas with flood protection systems under
improvements.--The area was intended to be
protected by a flood protection system--
(i) that has been decertified, or is
required to be certified, as providing
protection for the 100-year frequency
flood standard;
(ii) that is being improved,
constructed, or reconstructed; and
(iii) for which the Administrator has
determined measurable progress toward
completion of such improvement,
construction, reconstruction is being
made and toward securing financial
commitments sufficient to fund such
completion.
(C) Areas for which appeal has been filed.--
An area for which a community has appealed--
(i) designation of the area as having
special flood hazards in a timely
manner under section 1363; or
(ii) any decertification or
deaccreditation of a dam, levee, or
other flood protection system or the
level of protection afforded by a dam,
levee, or system.
(4) Extension of delay.--Upon a request submitted by
a local government authority having jurisdiction over
any portion of the eligible area, the Administrator may
extend the period during which a finding under
paragraph (1) shall be effective, except that--
(A) each such extension under this paragraph
shall not be for a period exceeding 12 months;
and
(B) for any area, the cumulative number of
such extensions may not exceed 2.
(5) Rule of construction.--Nothing in this subsection
may be construed to affect the applicability of a
designation of any area as an area having special flood
hazards for purposes of the availability of flood
insurance coverage, criteria for land management and
use, notification of flood hazards, eligibility for
mitigation assistance, or any other purpose or
provision not specifically referred to in paragraph
(2).
(6) Reports.--The Administrator shall, in each annual
report submitted pursuant to section 1320, include
information identifying each finding under paragraph
(1) by the Administrator during the preceding year that
an area is an area having special flood hazards, the
basis for each such finding, any extensions pursuant to
paragraph (4) of the periods of effectiveness of such
findings, and the reasons for such extensions.

TITLE II--DISASTER MITIGATION REQUIREMENTS

NOTIFICATION TO FLOOD-PRONE AREAS

Sec. 201. (a) Not later than six months following the
enactment of this title, the [Director] Administrator shall
publish information in accordance with subsection 1360(1) of
the National Flood Insurance Act of 1968, and shall notify the
chief executive officer of each known flood-prone community not
already participating in the national flood insurance program
of its tentative identification as a community containing one
or more areas having special flood hazards.
(b) After such notification, each tentatively identified
community shall either (1) promptly make proper application to
participate in the national flood insurance program or (2)
within six months submit technical data sufficient to establish
to the satisfaction of the [Director] Administrator that the
community either is not seriously flood prone or that such
flood hazards as may have existed have been corrected by
floodworks or other flood control methods. The [Director]
Administrator may, in his discretion, grant a public hearing to
any community with respect to which conflicting data exist as
to the nature and extent of a flood hazard. If the [Director]
Administrator decides not to hold a hearing, the community
shall be given an opportunity to submit written and documentary
evidence. Whether or not such hearing is granted, the
[Director's] Administrator's final determination as to the
existence or extent of a flood hazard area in a particular
community shall be deemed conclusive for the purposes of this
Act if supported by substantial evidence in the record
considered as a whole.
(c) As information becomes available to the [Director]
Administrator, concerning the existence of flood hazards in
communities not known to be flood prone at the time of the
initial notification provided for by subsection (a) of this
section he shall provide similar notifications to the chief
executive officers of such additional communities, which shall
then be subject to the requirements of subsection (b) of this
section.

* * * * * * *

(e) The [Director] Administrator is authorized to establish
administrative procedures whereby the identification under this
section of one or more areas in the community as having special
flood hazards may be appealed to the [Director] Administrator
by the community or any owner or lessee of real property within
the community who believes his property has been inadvertently
included in a special flood hazard area by the identification.
When, incident to any appeal under this subsection, the owner
or lessee of real property or the community, as the case may
be, incurs expense in connection with the services of
surveyors, engineers, or similar services, but not including
legal services, in the effecting of an appeal which is
successful in whole or part, the [Director] Administrator shall
reimburse such individual or community to an extent measured by
the ratio of the successful portion of the appeal as compared
to the entire appeal and applying such ratio to the reasonable
value of all such services, but no reimbursement shall be made
by the [Director] Administrator in respect to any fee or
expense payment, the payment of which was agreed to be
contingent upon the result of the appeal. There is authorized
to be appropriated for purposes of implementing this subsection
not to exceed $250,000.
(f) Annual Notification.--The Administrator, in consultation
with affected communities, shall establish and carry out a plan
to notify residents of areas having special flood hazards, on
an annual basis--
(1) that they reside in such an area;
(2) of the geographical boundaries of such area;
(3) of whether section 1308(h) of the National Flood
Insurance Act of 1968 applies to properties within such
area;
(4) of the provisions of section 102 requiring
purchase of flood insurance coverage for properties
located in such an area, including the date on which
such provisions apply with respect to such area, taking
into consideration section 102(i); and
(5) of a general estimate of what similar homeowners
in similar areas typically pay for flood insurance
coverage, taking into consideration section 1308(g) of
the National Flood Insurance Act of 1968.

EFFECT OF NONPARTICIPATION IN FLOOD INSURANCE PROGRAM

Sec. 202. (a) No Federal officer or agency shall approve any
financial assistance for acquisition or construction purposes
on and after July 1, 1975, for use in any area that has been
identified by the [Director] Administrator as an area having
special flood hazards unless the community in which such area
is situated is then participating in the national flood
insurance program.

* * * * * * *

AUTHORITY TO ISSUE REGULATIONS

Sec. 205. (a) The [Director] Administrator is authorized to
issue such regulations as may be necessary to carry out the
purpose of this Act.
(b) The head of each Federal agency that administers a
program of financial assistance relating to the acquisition,
construction, reconstruction, repair, or improvement of
publicly or privately owned land or facilities, and each
Federal instrumentality responsible for the supervision,
approval, regulation, or insuring of banks, savings and loan
associations, or similar institutions, shall, in cooperation
with the [Director] Administrator, issue appropriate rules and
regulations to govern the carrying out of the agency's
responsibilities under this Act.

CONSULTATION WITH LOCAL OFFICIALS

Sec. 206. In carrying out his responsibilities under the
provisions of this title and the National Flood Insurance Act
of 1968 which relate to notification to and identification of
flood-prone areas and the application of criteria for land
management and use, including criteria derived from data
reflecting new developments that may indicate the desirability
of modifying elevations based on previous flood studies, the
[Director] Administrator shall establish procedures assuring
adequate consultation with the appropriate elected officials of
general purpose local governments, including but not limited to
those local governments whose prior eligibility under the
program has been suspended. Such consultations shall include,
but not be limited to, fully informing local officials at the
commencement of any flood elevation study or investigation
undertaken by any agency on behalf of the [Director]
Administrator concerning the nature and purpose of the study,
the areas involved, the manner in which the study is to be
undertaken, the general principles to be applied, and the use
to be made of the data obtained. The [Director] Administrator
shall encourage local officials to disseminate information
concerning such study widely within the community, so that
interested persons will have an opportunity to bring all
relevant facts and technical data concerning the local flood
hazard to the attention of the agency during the course of the
study.

* * * * * * *

----------

REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974

* * * * * * *

SPECIAL INFORMATION BOOKLETS

Sec. 5. (a) * * *

* * * * * * *

(c) Each lender shall include with the booklet a good faith
estimate of the amount or range of charges for specific
settlement services the borrower is likely to incur in
connection with the settlement as prescribed by the Secretary.
Each such good faith estimate shall include the following
conspicuous statements and information: (1) that flood
insurance coverage for residential real estate is generally
available under the national flood insurance program whether or
not the real estate is located in an area having special flood
hazards and that, to obtain such coverage, a home owner or
purchaser should contact the national flood insurance program;
(2) a telephone number and a location on the Internet by which
a home owner or purchaser can contact the national flood
insurance program; and (3) that the escrowing of flood
insurance payments is required for many loans under section
102(d) of the Flood Disaster Protection Act of 1973, and may be
a convenient and available option with respect to other loans.

* * * * * * *

----------

HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974

TITLE I--COMMUNITY DEVELOPMENT

* * * * * * *

ELIGIBLE ACTIVITIES

Sec. 105. (a) Activities assisted under this title may
include only--
(1) * * *

* * * * * * *

(24) the construction or improvement of tornado-safe
shelters for residents of manufactured housing, and the
provision of assistance (including loans and grants) to
nonprofit and for-profit entities (including owners of
manufactured housing parks) for such construction or
improvement, except that--
(A) * * *

* * * * * * *

(D) amounts may not be used for a shelter as
provided under this paragraph unless there is
located, within the neighborhood in which the
shelter is located (or, in the case of a
shelter located in a manufactured housing park,
within 1,500 feet of such park), a warning
siren that is operated in accordance with such
local, regional, or national disaster warning
programs or systems as the Secretary, after
consultation with the Director of the Federal
Emergency Management Agency, considers
appropriate to ensure adequate notice of
occupants of manufactured housing located in
such neighborhood or park of a tornado; [and]
(25) lead-based paint hazard evaluation and
reduction, as defined in section 1004 of the
Residential Lead-Based Paint Hazard Reduction Act of
1992[.];
(26) supplementing existing State or local funding
for administration of building code enforcement by
local building code enforcement departments, including
for increasing staffing, providing staff training,
increasing staff competence and professional
qualifications, and supporting individual certification
or departmental accreditation, and for capital
expenditures specifically dedicated to the
administration of the building code enforcement
department, except that, to be eligible to use amounts
as provided in this paragraph--
(A) a building code enforcement department
shall provide matching, non-Federal funds to be
used in conjunction with amounts used under
this paragraph in an amount--
(i) in the case of a building code
enforcement department serving an area
with a population of more than 50,000,
equal to not less than 50 percent of
the total amount of any funds made
available under this title that are
used under this paragraph;
(ii) in the case of a building code
enforcement department serving an area
with a population of between 20,001 and
50,000, equal to not less than 25
percent of the total amount of any
funds made available under this title
that are used under this paragraph; and
(iii) in the case of a building code
enforcement department serving an area
with a population of less than 20,000,
equal to not less than 12.5 percent of
the total amount of any funds made
available under this title that are
used under this paragraph;
except that the Secretary may waive the
matching fund requirements under this
subparagraph, in whole or in part, based upon
the level of economic distress of the
jurisdiction in which is located the local
building code enforcement department that is
using amounts for purposes under this
paragraph, and shall waive such matching fund
requirements in whole for any recipient
jurisdiction that has dedicated all building
code permitting fees to the conduct of local
building code enforcement; and
(B) any building code enforcement department
using funds made available under this title for
purposes under this paragraph shall empanel a
code administration and enforcement team
consisting of at least 1 full-time building
code enforcement officer, a city planner, and a
health planner or similar officer; and
(27) provision of assistance to local governmental
agencies responsible for floodplain management
activities (including such agencies of Indians tribes,
as such term is defined in section 4 of the Native
American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4103)) in communities that
participate in the national flood insurance program
under the National Flood Insurance Act of 1968 (42
U.S.C. 4001 et seq.), only for carrying out outreach
activities to encourage and facilitate the purchase of
flood insurance protection under such Act by owners and
renters of properties in such communities and to
promote educational activities that increase awareness
of flood risk reduction; except that--
(A) amounts used as provided under this
paragraph shall be used only for activities
designed to--
(i) identify owners and renters of
properties in communities that
participate in the national flood
insurance program, including owners of
residential and commercial properties;
(ii) notify such owners and renters
when their properties become included
in, or when they are excluded from, an
area having special flood hazards and
the effect of such inclusion or
exclusion on the applicability of the
mandatory flood insurance purchase
requirement under section 102 of the
Flood Disaster Protection Act of 1973
(42 U.S.C. 4012a) to such properties;
(iii) educate such owners and renters
regarding the flood risk and reduction
of this risk in their community,
including the continued flood risks to
areas that are no longer subject to the
flood insurance mandatory purchase
requirement;
(iv) educate such owners and renters
regarding the benefits and costs of
maintaining or acquiring flood
insurance, including, where applicable,
lower-cost preferred risk policies
under this title for such properties
and the contents of such properties;
(v) encourage such owners and renters
to maintain or acquire such coverage;
(vi) notify such owners of where to
obtain information regarding how to
obtain such coverage, including a
telephone number, mailing address, and
Internet site of the Administrator of
the Federal Emergency Management Agency
(in this paragraph referred to as the
``Administrator'') where such
information is available; and
(vii) educate local real estate
agents in communities participating in
the national flood insurance program
regarding the program and the
availability of coverage under the
program for owners and renters of
properties in such communities, and
establish coordination and liaisons
with such real estate agents to
facilitate purchase of coverage under
the National Flood Insurance Act of
1968 and increase awareness of flood
risk reduction;
(B) in any fiscal year, a local governmental
agency may not use an amount under this
paragraph that exceeds 3 times the amount that
the agency certifies, as the Secretary, in
consultation with the Administrator, shall
require, that the agency will contribute from
non-Federal funds to be used with such amounts
used under this paragraph only for carrying out
activities described in subparagraph (A); and
for purposes of this subparagraph, the term
``non-Federal funds'' includes State or local
government agency amounts, in-kind
contributions, any salary paid to staff to
carry out the eligible activities of the local
governmental agency involved, the value of the
time and services contributed by volunteers to
carry out such services (at a rate determined
by the Secretary), and the value of any donated
material or building and the value of any lease
on a building;
(C) a local governmental agency that uses
amounts as provided under this paragraph may
coordinate or contract with other agencies and
entities having particular capacities,
specialties, or experience with respect to
certain populations or constituencies,
including elderly or disabled families or
persons, to carry out activities described in
subparagraph (A) with respect to such
populations or constituencies; and
(D) each local government agency that uses
amounts as provided under this paragraph shall
submit a report to the Secretary and the
Administrator, not later than 12 months after
such amounts are first received, which shall
include such information as the Secretary and
the Administrator jointly consider appropriate
to describe the activities conducted using such
amounts and the effect of such activities on
the retention or acquisition of flood insurance
coverage.

* * * * * * *

----------

FEDERAL FLOOD INSURANCE ACT OF 1956

* * * * * * *

FUNDS AND TREASURY BORROWING

Sec. 15. * * *
(e) The [Director] Administrator of the Federal Emergency
Management Agency 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 [Director] Administrator of the Federal
Emergency Management Agency, with the approval of the Secretary
of the Treasury. Such notes or other obligations shall bear
interest at a rate determined by the Secretary of the Treasury,
taking into consideration the current average market yield on
outstanding marketable obligations of the United States of
comparable maturities during 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 chapter
31 of title 31, United States Code, and the purposes for which
securities may be issued under such chapter 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 redemptions, 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.

House of Representatives,
Committee on Science, Space, and Technology,
Washington, DC, June 2, 2011.
The Hon. Spencer Bachus,
Chairman, Committee on Financial Services,
Rayburn House Office Building, Washington, DC.
Dear Chairman Bachus: I am writing to you concerning the
jurisdictional interest of the Committee on Science, Space, and
Technology in H.R. 1309, the Flood Insurance Reform Act of
2011. H.R. 1309 has been marked up by the Committee on
Financial Services. The amended version of the bill contains
provisions that fall within the jurisdiction of the Committee
on Science, Space, and Technology.
Based on discussions that the staff of our two committees
have had regarding this legislation and in the interest of
permitting your Committee to proceed expeditiously to floor
consideration of this important legislation, I am willing to
waive consideration of this bill. However, agreeing to waive
consideration of this bill should not be construed as waiving,
reducing, or affecting the jurisdiction of the Committee on
Science, Space, and Technology.
Additionally, the Committee on Science, Space, and
Technology expressly reserves its authority to seek conferees
on any provision within its jurisdiction during any House-
Senate conference that may be convened on this, or any similar
legislation. I ask for your commitment to support any request
by the Committee for conferees on H.R. 1309, as well as any
similar or related legislation.
I ask that a copy of this letter and your response be
included in the report on H.R. 1309 and in the Congressional
Record during consideration of this bill.
I look forward to working with you as this important
measure moves through the legislative process.
Sincerely,
Ralph M. Hall,
Chairman, Committee on Science, Space, and Technology.
------

House of Representatives,
Committee on Financial Services,
Washington, DC, June 2, 2011.
The Hon. Ralph M. Hall,
Chairman, Committee on Science, Space, and Technology,
Rayburn House Office Building, Washington, DC.
Dear Chairman Hall: Thank you for your letter regarding
H.R. 1309, the Flood Insurance Reform Act of 2011. I agree that
the section requiring a study on graduated risk in this
important legislation falls under the jurisdiction of both the
Committee on Financial Services and the Committee on Science,
Space, and Technology. I am most appreciative of your decision
not to request a referral in the interest of expediting
consideration of H.R. 1309.
Further, I agree that by foregoing a sequential referral,
the Committee on Science, Space, and Technology is not waiving
its jurisdiction. I will include this exchange of letters in
our Committee Report on H.R. 1309 and in the Congressional
Record during consideration of this bill.
Thank you for your attention to these matters.
Sincerely,
Spencer Bachus,
Chairman.
------

House of Representatives,
Committee on the Judiciary,
Washington, DC, June 2, 2011.
Hon. Spencer Bachus:
Chairman, Committee on Financial Services
Rayburn House Office Building, Washington, DC.
Dear Chairman Bachus: I am writing concerning H.R. 1309,
the ``Flood Insurance Reform Act of 2011,'' which is scheduled
for floor consideration soon. As a result of your having
consulted with us on provisions in H.R. 1309 that fall within
the Rule X jurisdiction of the Committee on the Judiciary, we
are able to agree to forego action on this bill in order that
it may proceed expeditiously to the House floor for
consideration.
The Judiciary Committee takes this action with our mutual
understanding that by foregoing consideration of H.R. 1309 at
this time, we do not waive any jurisdiction over subject matter
contained in this or similar legislation, and that our
Committee will be appropriately consulted and involved as the
bill or similar legislation moves forward so that we may
address any remaining issues in our jurisdiction. Our Committee
also reserves the right to seek appointment of an appropriate
number of conferees to any House-Senate conference involving
this or similar legislation, and requests your support for any
such request.
I would appreciate your response to this letter confirming
this understanding with respect to H.R. 1309, and would ask
that a copy of our exchange of letters on this matter be
included in the Congressional Record during floor
consideration.
Sincerely,
Lamar Smith,
Chairman.
------

House of Representatives,
Committee on Financial Services,
Washington, DC, June 2, 2011.
Hon. Lamar Smith,
Chairman, Committee on the Judiciary,
Rayburn House Office Building, Washington, DC.
Dear Chairman Smith: Thank you for your letter regarding
H.R. 1309, the Flood Insurance Reform Act of 2011. I agree that
there are provisions in the legislation that fall under the
jurisdiction of the Committee on the Judiciary. I am most
appreciative of your decision not to request a referral in the
interest of expediting Floor consideration of H.R. 1309.
Further, I agree that by foregoing a sequential referral,
the Committee on Judiciary is not waiving its jurisdiction. I
will include this exchange of letters in our Committee Report
on H.R. 1309 and the Congressional Record during Floor
consideration.
Thank you for your attention to these matters.
Sincerely,
Spencer Bachus,
Chairman.