[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3191 Reported in House (RH)]
Union Calendar No. 232
103d CONGRESS
2d Session
H. R. 3191
[Report No. 103-414]
_______________________________________________________________________
A BILL
To revise the national flood insurance program to promote compliance
with requirements for mandatory purchase of flood insurance, to provide
assistance for mitigation activities designed to reduce damages to
structures subject to flooding and shoreline erosion, and to increase
the maximum coverage amounts under the program, and for other purposes.
_______________________________________________________________________
January 26, 1994
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed.
Union Calendar No. 232
103d CONGRESS
2d Session
H. R. 3191
[Report No. 103-414]
To revise the national flood insurance program to promote compliance
with requirements for mandatory purchase of flood insurance, to provide
assistance for mitigation activities designed to reduce damages to
structures subject to flooding and shoreline erosion, and to increase
the maximum coverage amounts under the program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 30, 1993
Mr. Kennedy (for himself and Mr. Deutsch) introduced the following
bill; which was referred to the Committee on Banking, Finance and Urban
Affairs
January 26, 1994
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on
September 30, 1993]
_______________________________________________________________________
A BILL
To revise the national flood insurance program to promote compliance
with requirements for mandatory purchase of flood insurance, to provide
assistance for mitigation activities designed to reduce damages to
structures subject to flooding and shoreline erosion, and to increase
the maximum coverage amounts under the program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``National Flood
Insurance Reform Act of 1994''.
(b) Table of Contents.--
Sec. 1. Short title and table of contents.
Sec. 2. Declaration of purpose under the National Flood Insurance Act
of 1968.
TITLE I--DEFINITIONS
Sec. 101. Flood Disaster Protection Act of 1973.
Sec. 102. National Flood Insurance Act of 1968.
TITLE II--COMPLIANCE AND INCREASED PARTICIPATION
Sec. 201. Existing flood insurance purchase requirements.
Sec. 202. Expanded flood insurance purchase requirements.
Sec. 203. Escrow of flood insurance payments.
Sec. 204. Placement of flood insurance by lenders.
Sec. 205. Penalties for failure to require flood insurance or notify.
Sec. 206. Ongoing compliance with flood insurance purchase
requirements.
Sec. 207. Fees for determining applicability of flood insurance
purchase requirements.
Sec. 208. Notice requirements.
Sec. 209. Standard hazard determination forms.
Sec. 210. Examinations regarding compliance.
Sec. 211. Financial Institutions Examination Council.
Sec. 212. Clerical amendments.
TITLE III--RATINGS AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT
PROGRAMS
Sec. 301. Community rating system and incentives for community
floodplain management.
Sec. 302. Funding.
TITLE IV--MITIGATION OF FLOOD AND EROSION RISKS
Sec. 401. Repeal of flooded property purchase and loan program.
Sec. 402. Termination of erosion-threatened structures program.
Sec. 403. Mitigation assistance responsibilities in Federal Insurance
Administration.
Sec. 404. State and community mitigation assistance program.
Sec. 405. Establishment of National Flood and Erosion Mitigation Fund.
Sec. 406. Insurance premium mitigation surcharge and erosion hazard
zone surcharge.
Sec. 407. Limitations on new flood insurance coverage in erosion hazard
areas.
Sec. 408. Study of mitigation insurance.
Sec. 409. Riverine erosion study.
Sec. 410. Coordination with coastal zone management programs.
TITLE V--FLOOD INSURANCE TASK FORCE
Sec. 501. Flood Insurance Interagency Task Force.
TITLE VI--MISCELLANEOUS PROVISIONS
Sec. 601. Limitation on premium and surcharge increases.
Sec. 602. Maximum flood insurance coverage amounts.
Sec. 603. Flood insurance program arrangements with private insurance
entities.
Sec. 604. Updating of flood maps and assessment and mapping of erosion
hazard zones.
Sec. 605. Study of economic effects of charging actuarially-based
premium rates for pre-FIRM structures.
Sec. 606. National Flood Insurance Fund.
Sec. 607. Effective dates of policies.
Sec. 608. Regulations.
Sec. 609. Relation to State and local laws.
SEC. 2. DECLARATION OF PURPOSE UNDER THE NATIONAL FLOOD INSURANCE ACT
OF 1968.
Section 1302(e) of the National Flood Insurance Act of 1968 (42
U.S.C. 4001(e)) is amended--
(1) by redesignating clauses (3), (4), and (5), as clauses
(4), (5), and (6), respectively; and
(2) by inserting after the comma at the end of clause (2)
the following: ``(3) encourage State and local governments to
protect natural and beneficial floodplain functions that reduce
flood-related losses,''.
TITLE I--DEFINITIONS
SEC. 101. FLOOD DISASTER PROTECTION ACT OF 1973.
(a) In General.--Section 3(a) of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4003(a)) is amended--
(1) by striking paragraph (5) and inserting the following
new paragraph:
``(5) `Federal entity for lending regulation' means the
Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Comptroller of the Currency,
the Office of Thrift Supervision, and the National Credit Union
Administration, and with respect to a particular regulated
lending institution means the entity primarily responsible for
the supervision, approval, or regulation of the institution;'';
(2) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(3) by inserting after paragraph (6) the following new
paragraphs:
``(7) `Federal agency lender' means a Federal agency that
makes direct loans secured by improved real estate or a mobile
home, to the extent such agency acts in such capacity;
``(8) `lender' includes any regulated lending institution,
other lending institution, and Federal agency lender, but does
not include any agency engaged primarily in the purchase of
mortgage loans;
``(9) `other lending institution' means any lending
institution that is not subject to the supervision, approval,
regulation, or insuring of any Federal entity for lending
regulation and that is not a Federal agency lender, but does
not include institutions engaged primarily in the purchase of
mortgage loans;
``(10) `regulated lending institution' means any bank,
savings and loan association, credit union, or similar
institution subject to the supervision, approval, regulation,
or insuring of a Federal entity for lending regulation; and
``(11) `servicer' means the person responsible for
receiving any scheduled periodic payments from a borrower
pursuant to the terms of a loan, including amounts for taxes,
insurance premiums, and other charges with respect to the
property, and making the payments of principal and interest and
such other payments with respect to the amounts received from
the borrower as may be required pursuant to the terms of the
loan.''.
(b) Conforming Amendment.--Section 202(b) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4106(b)) is amended by striking
``Federal instrumentality described in such section shall by regulation
require the institutions'' and inserting ``Federal entity for lending
regulation (with respect to regulated lending institutions), the
Secretary of Housing and Urban Development (with respect to other
lending institutions), and the appropriate head of each Federal agency
lender, shall by regulation require the lenders''.
SEC. 102. NATIONAL FLOOD INSURANCE ACT OF 1968.
(a) In General.--Section 1370(a) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4121(a)) is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(3) by inserting after paragraph (6) the following new
paragraphs:
``(7) the term `erosion hazard area' means, based on
erosion rate information and other historical data available,
an area where erosion or avulsion is likely to result in damage
to or loss of buildings and infrastructure within a 60-year
period;
``(8) the term `readily movable structure' means a small
permanent structure of less than 5,000 square feet that is
designed, sited, and built to accomplish relocation at a
reasonable cost relative to other structures of the same size
and construction and that has access of sufficient width and
acceptable grade to permit such relocation;
``(9) the term `coastal' means relating to the coastlines
and bays of the tidal waters of the United States or the
shorelines of the Great Lakes, but does not refer to bayous,
riverine areas, and riverine portions of estuaries;
``(10) the term `Federal agency lender' means a Federal
agency that makes direct loans secured by improved real estate
or a mobile home, to the extent such agency acts in such
capacity;
``(11) the term `Federal entity for lending regulation'
means the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the Comptroller of the
Currency, the Office of Thrift Supervision, and the National
Credit Union Administration, and with respect to a particular
regulated lending institution means the entity primarily
responsible for the supervision, approval, or regulation of the
institution;
``(12) the term `lender' includes any regulated lending
institution, other lending institution, and Federal agency
lender, but does not include any agency engaged primarily in
the purchase of mortgage loans;
``(13) the term `natural and beneficial floodplain
functions' means (A) the functions associated with the natural
or relatively undisturbed floodplain that moderate flooding,
retain flood waters, reduce erosion and sedimentation, and
mitigate the effect of waves and storm surge from storms, and
(B) ancillary beneficial functions, including maintenance of
water quality, recharge of ground water, and provision of
fisheries and wildlife habitat;
``(14) the term `regulated lending institution' means a
bank, savings and loan association, credit union, or similar
institution subject to the supervision, approval, regulation,
or insuring of a Federal entity for lending regulation;
``(15) the term `other lending institution' means any
lending institution that is not subject to the supervision,
approval, regulation, or insuring of any Federal entity for
lending regulation and that is not a Federal agency lender, but
does not include institutions engaged primarily in the purchase
of mortgage loans; and
``(16) the term `servicer' means the person responsible for
receiving any scheduled periodic payments from a borrower
pursuant to the terms of a loan, including amounts for taxes,
insurance premiums, and other charges with respect to the
property, and making the payments of principal and interest and
such other payments with respect to the amounts received from
the borrower as may be required pursuant to the terms of the
loan.''.
(b) Conforming Amendment.--Section 1322(d) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by striking
``federally supervised, approved, regulated or insured financial
institution'' and inserting ``regulated lending institution, other
lending institution, or Federal agency lender''.
TITLE II--COMPLIANCE AND INCREASED PARTICIPATION
SEC. 201. EXISTING FLOOD INSURANCE PURCHASE REQUIREMENTS.
Section 102(a) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(a)) is amended--
(1) by inserting after ``(a)'' the following: ``Requirement
for Federal Assistance for Acquisition or Construction.--'';
and
(2) by adding at the end the following new sentence: ``This
subsection may not be construed to permit the provision of any
amount of financial assistance with respect to any building or
mobile home and related personal property for which flood
insurance is required under this subsection, unless the
requirements under this subsection are complied with in full.
The prohibitions and requirements of this subsection relating
to financial assistance may not be waived for any purpose.''.
SEC. 202. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.
Section 102(b) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(b)) is amended to read as follows:
``(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, increase, extend, or renew, after the
expiration of 60 days following the date of the enactment of
this Act, any loan secured by improved real estate or a mobile
home located or to be located in an area that has been
identified by the Director as an area having special flood
hazards and in which flood insurance has been made 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.
``(2) Other lending institutions.--The Secretary of Housing
and Urban Development (after consultation and coordination with
the Financial Institutions Examination Council) shall by
regulation direct that--
``(A) any other lending institution may not make,
increase, extend, or renew any loan secured by improved
real estate consisting of a 1- to 4-family residence or
a mobile home located or to be located in an area that
has been identified by the Director of the Federal
Emergency Management Agency as an area having special
flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act
of 1968, unless the building or mobile home and any
personal property securing such loan is covered for the
term of the loan by flood insurance in the amount
provided in paragraph (1); and
``(B) any loan that is--
``(i) 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 by the Director of the Federal
Emergency Management Agency, as an area of
special flood hazards and in which flood
insurance is available under the National Flood
Insurance Act of 1968, and
``(ii) purchased by the Government National
Mortgage Association,
is covered for the term of the loan by flood insurance
in the amount provided in paragraph (1).
``(3) Federal agency lenders.--A Federal agency lender may
not make, increase, extend, or renew any loan secured by
improved real estate or a mobile home located or to be located
in an area that has been identified by the Director of the
Federal Emergency Management Agency as an area having special
flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968,
unless the building or mobile home and any personal property
securing such loan is covered for the term of the loan by flood
insurance in the amount provided in paragraph (1). The relevant
head of each Federal agency lender shall issue any regulations
necessary to carry out this paragraph. Such regulations shall
be consistent with and substantially identical to the
regulations issued under paragraphs (1) and (2).
``(4) 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 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 by the Director as
an area of special flood hazards and in which flood
insurance is available under the National Flood
Insurance Act of 1968, and
``(B) purchased by either such entity,
is covered for the term of the loan by flood insurance in the
amount provided in paragraph (1).
``(5) Contested determinations.--If a borrower under a loan
disputes or challenges the determination of the lender that the
improved real estate or mobile home securing the loan is
located in an area of special flood hazards, the lender shall
review and consider any relevant information, as determined by
the Director, submitted to the lender by the borrower.
``(6) Applicability.--Paragraphs (2) through (4) shall
apply only with respect to any loan made, increased, extended,
or renewed after the expiration of the 1-year period beginning
on the date of the enactment of the National Flood Insurance
Reform Act of 1994.''.
SEC. 203. ESCROW OF FLOOD INSURANCE PAYMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) is amended by adding at the end the following new subsection:
``(d) Escrow of Flood Insurance Payments.--
``(1) Private lenders.--For loans secured by residential
real estate, each Federal entity for lending regulation (with
respect to any loans of regulated lending institutions) and the
Secretary of Housing and Urban Development (with respect to any
loans of other lending institutions), after consultation and
coordination with the Financial Institutions Examination
Council, shall by regulation require that, if a lender or other
servicer of the loan requires the escrowing of taxes, insurance
premiums, fees, or any other charges for a loan secured by
residential real estate or a mobile home, then all premiums and
fees for flood insurance under the National Flood Insurance Act
of 1968 for the residential real estate or mobile home shall be
paid to the lender or servicer of the loan. Premiums and fees
paid to the lender or servicer shall be paid in a manner
sufficient to make payments as due for the duration of the
loan. Upon receipt of the premiums, the lender or servicer of
the loan shall deposit the premiums in an escrow account on
behalf of the borrower. Upon receipt of a notice from the
Director or the provider of the insurance that insurance
premiums are due, the lender or servicer shall pay from the
escrow account to the provider of the insurance the amount of
insurance premiums owed.
``(2) Federal agency lenders.--The appropriate head of each
Federal agency lender shall by regulation require and provide
for escrow and payment of any flood insurance premiums and fees
relating to residential property securing loans made by the
Federal agency lender under the circumstances and in the manner
provided under paragraph (1). Any regulations issued under this
paragraph shall be consistent with and substantially identical
to the regulations issued under paragraph (1).
``(3) Applicability of respa.--Escrow accounts established
pursuant to this subsection shall be subject to the provisions
of section 10 of the Real Estate Settlement Procedures Act of
1974.
``(4) Applicability.--This subsection shall apply only with
respect to any loan made, increased, extended, or renewed after
the expiration of the 1-year period beginning on the date of
the enactment of the National Flood Insurance Reform Act of
1994.''.
SEC. 204. PLACEMENT OF FLOOD INSURANCE BY LENDERS.
(a) Actions Required by Lender.--Section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a), as amended by the preceding
provisions of this Act, is further amended by adding at the end the
following new subsection:
``(e) Placement of Flood Insurance by Lender.--
``(1) Notification to borrower of lack of coverage.--If, at
any time during the term of a loan secured by improved real
estate or by a mobile home located in an area that has been
identified by the Director as an area having special flood
hazards and in which flood insurance is available under the
National Flood Insurance Act of 1968, the lender or servicer
for the loan determines that the building or mobile home and
any personal property securing the loan is covered by flood
insurance in an amount less than the amount required for the
property pursuant to 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 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 60 days
after such notification, 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.
``(3) Review of determination regarding required
purchase.--
``(A) In general.--A borrower may request that the
Director review a determination that the improved real
estate or mobile home securing the loan is located in
an area of special flood hazards. Not later than 45
days after the Director receives the request, the
Director shall review the determination and provide the
borrower with a letter stating whether or not the
property is in a special flood hazards area. The
determination of the Director shall be final.
``(B) Effect of determination.--Any person to whom
a borrower provides a letter issued by the Director
pursuant to subparagraph (A), stating that the property
of the borrower is not in an area of special flood
hazards, shall have no obligation under this title to
require the purchase of flood insurance on the property
during the 1-year period beginning upon the date that
such letter is provided.
``(4) Applicability.--This subsection shall apply to all
loans outstanding on or after the date of enactment of the
National Flood Insurance Reform Act of 1994.''.
SEC. 205. PENALTIES FOR FAILURE TO REQUIRE FLOOD INSURANCE OR NOTIFY.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new subsections:
``(f) Civil Monetary Penalties for Failure to Require Flood
Insurance or Notify.--
``(1) Civil monetary penalties against lenders.--Any
regulated or other lending institution that is found to have a
pattern or practice of committing violations under paragraph
(2) shall be assessed a civil penalty by the appropriate
Federal entity for lending regulation (with respect to
regulated lending institutions) or the Secretary of Housing and
Urban Development (with respect to other lending institutions)
in the amount provided under paragraph (5).
``(2) Lender violations.--The violations referred to in
paragraph (1) shall be--
``(A) making, increasing, extending, or renewing
loans in violation of--
``(i) the regulations issued pursuant to
subsection (b) of this section;
``(ii) the escrow requirements under
subsection (d) of this section; or
``(iii) the notice requirements under
section 1364 of the National Flood Insurance
Act of 1968; or
``(B) failure to provide notice or purchase flood
insurance coverage in violation of subsection (e) of
this section.
``(3) Civil monetary penalties against gse's.--If the
Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation is found by the Director of the Office of
Federal Housing Enterprise Oversight of the Department of
Housing and Urban Development to have a pattern or practice of
purchasing loans in violation of the procedures established
pursuant to subsection (b)(4) of this section, the Director of
such Office shall assess a civil penalty against such
enterprise in the amount provided under paragraph (5) of this
subsection. For purposes of this subsection, the term
`enterprise' means the Federal National Mortgage Association or
the Federal Home Loan Mortgage Corporation.
``(4) Notice and hearing.--A penalty under this subsection
may be issued only after notice and an opportunity for a
hearing on the record.
``(5) Amount.--A civil monetary penalty under this
subsection may not exceed $350 for each violation under
paragraph (2) or paragraph (3). The total amount of penalties
assessed under this subsection against any single regulated
lending institution, other lending institution, or enterprise
for any calendar year may not exceed $100,000.
``(6) Lender compliance.--Notwithstanding any State or
local law, for purposes of this subsection, any lender that
purchases flood insurance or renews a contract for flood
insurance on behalf of or as an agent of a borrower of a loan
for which flood insurance is required shall be considered to
have complied with the regulations issued under subsection (b).
``(7) Effect of transfer on liability.--Any sale or other
transfer of a loan by a lender who has committed a violation
under paragraph (1), that occurs subsequent to the violation,
shall not affect the liability of the transferring lender with
respect to any penalty under this subsection. A lender shall
not be liable for any violations relating to a loan committed
by another lender who previously held the loan.
``(8) Deposit of penalties.--Any penalties collected under
this subsection shall be paid into the National Flood and
Erosion Mitigation Fund under section 1367 of the National
Flood Insurance Act of 1968.
``(9) Additional penalties.--Any penalty under this
subsection shall be in addition to any civil remedy or criminal
penalty otherwise available.
``(10) Statute of limitations.--No penalty may be imposed
under this subsection after the expiration of the 5-year period
beginning on the date of the occurrence of the violation for
which the penalty is authorized under this subsection.
``(g) Other Actions to Remedy Pattern of Noncompliance.--
``(1) Authority of federal entities for lending
regulation.--The head of the applicable Federal entity for
lending regulation may require a regulated lending institution
to take such remedial actions as are necessary to ensure that
the regulated lending institution complies with the
requirements of the national flood insurance program if the
Federal agency for lending regulation makes a determination
under paragraph (3) regarding the regulated lending
institution.
``(2) Authority of secretary of hud.--The Secretary of
Housing and Urban Development may require another lending
institution to take such remedial actions as are necessary to
ensure that the other lending institution complies with the
requirements of the national flood insurance program if such
Secretary makes a determination under paragraph (3) regarding
the other lending institution.
``(3) Determination of violations.--A determination under
this paragraph shall be a finding that--
``(A) the regulated lending institution or other
lending institution, as the case may be, has engaged in
a pattern and practice of noncompliance in violation of
the regulations issued pursuant to subsection (b), (d),
or (e) of this section or the notice requirements under
section 1364 of the National Flood Insurance Act of
1968; and
``(B) the regulated lending institution or other
lending institution, as the case may be, has not
demonstrated measurable improvement in compliance
despite the assessment of civil monetary penalties
under subsection (f).''.
SEC. 206. ONGOING COMPLIANCE WITH FLOOD INSURANCE PURCHASE
REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new subsection:
``(h) Notification of Flood Hazards to Loan Transferee.--
``(1) In general.--Except as provided in paragraphs (2)
through (5), before the sale or transfer of any loan secured by
improved real estate or a mobile home, the seller or transferor
of the loan shall determine whether the property is in an area
that has been designated by the Director as an area having
special flood hazards. The seller or transferor shall, before
sale or transfer, notify the purchaser or transferee and any
servicer of the loan in writing regarding the results of the
determination. A determination under this paragraph shall be
evidenced using the standard hazard determination form under
section 1365 of the National Flood Insurance Act of 1968.
``(2) Exceptions.--For any loan secured by improved real
estate or a mobile home, a determination and notice under
paragraph (1) shall not be required if, during the 5-year
period ending on the date of the sale or transfer of the loan--
``(A) a determination and notice under paragraph
(1) has been made for the property secured by the loan;
or
``(B)(i) the loan has been made, increased,
extended, or renewed; and
``(ii) the lender making, increasing, extending, or
renewing the loan was subject, at the time of such
transaction, to regulations issued pursuant to
paragraph (1), (2), or (3) of subsection (b).
``(3) Loans transferred by fdic.--
``(A) In general.--Except as provided in
subparagraph (B), for any loan secured by improved real
estate or a mobile home that is sold or transferred by
the Federal Deposit Insurance Corporation acting in its
corporate capacity or in its capacity as conservator or
receiver, the purchaser or transferee of the loan shall
determine whether the property is in an area that has
been designated by the Director as an area having
special flood hazards.
``(B) Exceptions.--Such determination and notice
shall not be required for any loan--
``(i) sold or transferred to an entity
under the control of the Federal Deposit
Insurance Corporation; or
``(ii) for which the purchaser or
transferee exercises any available option to
transfer or put the loan back to the Federal
Deposit Insurance Corporation.
``(C) Notice to director.--A purchaser or
transferee of a loan required to make a determination
and notification under subparagraph (A) shall notify
the Director and any servicer of the loan of the
results of the determination (using the standard hazard
determination form under section 1365 of the National
Flood Insurance Act of 1968) before the expiration of
the 90-day period beginning on the later of (i) the
purchase or transfer of the loan, or (ii) the
expiration of any option that the purchaser or
transferee may have to transfer or put the loan back to
the Federal Deposit Insurance Corporation.
``(4) Loans transferred by rtc.--
``(A) In general.--For any loan secured by improved
real estate or a mobile home that is sold or
transferred by the Resolution Trust Corporation acting
in its corporate capacity or in its capacity as a
conservator or receiver, the purchaser or transferee of
the loan shall determine whether the property is in an
area that has been designated by the Director as an
area having special flood hazards if--
``(i) the Resolution Trust Corporation
acquires the loan after the date of the
effectiveness of this subsection and sells or
transfers the loan before the expiration of the
12-month period beginning on such effective
date; or
``(ii) the Corporation holds the loan on
the date of the effectiveness of this
subsection and sells or transfers the loan
before the expiration of the 6-month period
beginning on such effective date.
``(B) Notice to director.--A purchaser or
transferee of a loan required to make a determination
and notification under subparagraph (A) shall notify
the Director and any servicer of the loan of the
results of the determination (using the standard hazard
determination form under section 1365 of the National
Flood Insurance Act of 1968) before the expiration of
the 90-day period beginning upon the purchase or
transfer of the loan.
``(5) Loans transferred by ncua.--
``(A) In general.--Except as provided in
subparagraph (C), for any loan secured by improved real
estate or a mobile home that is sold or transferred by
the National Credit Union Administration acting in its
corporate capacity or in its capacity as a conservator
or liquidating agent, the purchaser or transferee of
the loan shall determine whether the property is in an
area that has been designated by the Director as an
area having special flood hazards.
``(B) Notice to director.--A purchaser or
transferee of a loan required to make a determination
and notification under subparagraph (A) shall notify
the Director and any servicer of the loan of the
results of the determination (using the standard hazard
determination form under section 1365 of the National
Flood Insurance Act of 1968) before the expiration of
the 90-day period beginning upon the purchase or
transfer of the loan.
``(C) Exception.--Such determination and notice
shall not be required for any loan sold or transferred
to an entity under the control of the National Credit
Union Administration.
``(6) Applicability.--This subsection shall apply only with
respect to any loan outstanding or entered into after the
expiration of the 1-year period beginning on the date of the
enactment of the National Flood Insurance Reform Act of
1994.''.
SEC. 207. FEES FOR DETERMINING APPLICABILITY OF FLOOD INSURANCE
PURCHASE REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new subsection:
``(i) Fee for Determining Location.--Notwithstanding any other
Federal or State law, any lender for a loan described in paragraph (1),
(2), or (3) of subsection (b) may charge a reasonable fee (as
determined by the Director) for the costs of determining whether the
property securing the loan is located in an area of 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 is made pursuant
to--
``(A) the making, increasing, extending, or
renewing of the loan that is initiated by the borrower;
or
``(B) 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 property securing the loan is located or
that, in the determination of the Director, may
reasonably be considered to require a determination
under this subsection.
``(2) Purchaser or transferee fee.--The purchaser or
transferee of such a loan may be charged the fee in the case of
sale or transfer of the loan.''.
SEC. 208. NOTICE REQUIREMENTS.
Section 1364 of the National Flood Insurance Act of 1968 (42 U.S.C.
4104a) is amended to read as follows:
``notice requirements
``Sec. 1364. (a) Notification of Special Flood Hazards.--
``(1) 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 located
or to be located in an area that has been identified by the
Director under this title or the Flood Disaster Protection Act
of 1973 as an area having special flood hazards, to notify the
purchaser or lessee (or obtain satisfactory assurances that the
seller or lessor has notified the purchaser or lessee) and the
servicer of the loan of such special flood hazards, in writing,
a reasonable period in advance of the signing of the purchase
agreement, lease, or other documents involved in the
transaction. The regulations shall also require that the
lenders retain a record of the receipt of the notices by the
purchaser or lessee and the servicer.
``(2) Other lending institutions.--The Secretary of Housing
and Urban Development shall by regulation require notification
in the manner provided under paragraph (1) with respect to any
loan made by another lending institution and secured by
improved real estate consisting of a 1- to 4-family residence
or a mobile home located or to be located in an area that has
been identified by the Director under this title or the Flood
Disaster Protection Act of 1973 as an area having special flood
hazards. Any regulations issued under this paragraph shall be
consistent with and substantially identical to the regulations
issued under paragraph (1) (except to the extent necessary to
provide for differences between the types of loans for which
notice is required under this paragraph and the types for which
notice is required under paragraph (1)).
``(3) Federal agency lenders.--The appropriate head of 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 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).
``(4) Contents of notice.--Written notification required
under this subsection shall include--
``(A) a warning, in a form to be established in
consultation with and subject to the approval of the
Director, stating that the real estate or mobile home
securing the loan is located or is to be located in an
area having special flood hazards;
``(B) a description of the flood insurance purchase
requirements under section 102(b) of the Flood Disaster
Protection Act of 1973;
``(C) a statement that flood insurance coverage may
be purchased under the national flood insurance program
and is also available from private insurers; and
``(D) any other information that the Director
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 (with respect to regulated lending
institutions) and the Secretary of Housing and Urban
Development (with respect to other lending institutions), after
consultation and coordination with the Financial Institutions
Examination Council, shall by regulation require such
institutions, as a condition of making, increasing, extending,
renewing, selling, or transferring any loan described in
subsection (a)(1), to notify the Director (or the designee of
the Director) in writing during the term of the loan of the
servicer of the loan. Such institutions shall also notify the
Director (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.
``(2) Federal agency lenders.--The appropriate head of each
Federal agency lender shall by regulation provide for
notification in the manner provided under paragraph (1) with
respect to any loan described in subsection (a)(1) that is made
by the Federal agency lender. Any regulations issued under this
paragraph shall be consistent with and substantially identical
to the regulations issued under paragraph (1) of this
subsection.
``(c) Notification of Expiration of Insurance.--The Director (or
the designee of the Director) shall, not less than 45 days before the
expiration of any contract for flood insurance under this title, issue
notice of such expiration by first class mail to the owner of the
property, the servicer of any loan secured by the property covered by
the contract, and the owner of the loan.''.
SEC. 209. STANDARD HAZARD DETERMINATION FORMS.
Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C.
4101 et seq.) is amended by adding at the end the following new
section:
``standard hazard determination forms
``Sec. 1365. (a) Development.--The Director, in consultation with
representatives of the mortgage and lending industry, the Federal
entities for lending regulation, the Federal agency lenders, and any
other appropriate individuals, shall develop standard written and
electronic forms for determining the flood hazard exposure of a
property for use in connection with loans secured by improved real
estate or a mobile home. The written and electronic forms shall be
established by regulations issued not later than 270 days after the
date of the enactment of the National Flood Insurance Reform Act of
1994.
``(b) Design and Contents.--
``(1) Purpose.--The form under subsection (a) shall be
designed to facilitate a determination of the exposure to flood
hazards of structures located on the property to which the loan
application relates. The form shall be designed to facilitate
compliance with the provisions of this title.
``(2) Contents.--The form shall require identification of
the type of flood-risk zone in which the property is located,
the complete map and panel numbers for the property, and the
date of the map used for the determination, with respect to
flood hazard information on file with the Director. If the
property is not located in an area of special flood hazards the
form shall require a statement to such effect and shall
indicate the complete map and panel numbers of the property. If
the complete map and panel numbers for the property are not
available because the property is not located in a community
that is participating in the national flood insurance program
or because no map exists for the relevant area, the form shall
require a statement to such effect. The form shall provide for
inclusion or attachment of any relevant documents indicating
revisions or amendments to maps.
``(c) Required Use.--The Federal entities for lending regulation
shall by regulation require the use of the form under this section by
regulated lending institutions. The appropriate head of each Federal
agency lender shall by regulation provide for the use of the form with
respect to any loan made by such Federal agency lender. The Secretary
of Housing and Urban Development shall by regulation require use of the
form in connection with loans purchased by Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation and the
Government National Mortgage Association. The Secretary of Housing and
Urban Development shall encourage the use of the form by other lending
institutions.
``(d) Guarantees Regarding Information.--In providing information
regarding special flood hazards on the form developed under this
section (or otherwise required of a lender not required to use the form
under this section) any lender making, increasing, extending, or
renewing a loan secured by improved real estate or a mobile home may
provide for the acquisition or determination of such information to be
made by a person other than such institution, only to the extent such
person guarantees the accuracy of the information. The Director shall
by regulations establish requirements relating to the nature and manner
of such guarantees.
``(e) Electronic Form.--The Federal entities for lending
regulation, the Secretary of Housing and Urban Development, and the
appropriate head of each Federal agency lender shall by regulation
require any lender using the electronic form developed under this
section with respect to any loan to make available upon the request of
such Federal entity, Secretary, or agency head, a written form under
this section for such loan within 48 hours after such request.
``(f) Effective Date.--The regulations under this section requiring
use of the written and electronic forms established pursuant to this
section shall be issued together with the regulations required under
subsection (a) and shall take effect upon the expiration of the 90-day
period beginning on such issuance.''.
SEC. 210. EXAMINATIONS REGARDING COMPLIANCE.
(a) Amendment to Federal Deposit Insurance Act.--Section 10 of the
Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by adding at
the end the following new subsection:
``(h) Flood Insurance Compliance by Insured Depository
Institutions.--
``(1) Examinations.--The appropriate Federal banking agency
shall, during each scheduled on-site examination required by
this section, determine whether the insured depository
institution is complying with the requirements of the national
flood insurance program.
``(2) Report.--
``(A) Requirement.--Not later than 1 year after the
date of enactment of the National Flood Insurance
Reform Act of 1994 and biennially thereafter for the
next 4 years, each appropriate Federal banking agency
shall submit a report to the Congress on compliance by
insured depository institutions with the requirements
of the national flood insurance program.
``(B) Contents.--The report shall include a
description of the methods used to determine
compliance, the number of institutions examined during
the reporting year, a listing and total number of
institutions found not to be in compliance, actions
taken to correct incidents of noncompliance, and an
analysis of compliance, including a discussion of any
trends, patterns, and problems, and recommendations
regarding reasonable actions to improve the efficiency
of the examinations processes.''.
(b) Amendment to Federal Credit Union Act.--Section 204 of the
Federal Credit Union Act (12 U.S.C. 1784) is amended by adding at the
end the following new subsection:
``(e) Flood Insurance Compliance by Insured Credit Unions.--
``(1) Examination.--The Board shall, during each
examination conducted under this section, determine whether the
insured credit union is complying with the requirements of the
national flood insurance program.
``(2) Report.--
``(A) Requirement.--Not later than 1 year after the
date of enactment of the National Flood Insurance
Reform Act of 1994 and biennially thereafter for the
next 4 years, the Board shall submit a report to
Congress on compliance by insured credit unions with
the requirements of the national flood insurance
program.
``(B) Contents.--The report shall include a
description of the methods used to determine
compliance, the number of insured credit unions
examined during the reporting year, a listing and total
number of insured credit unions found not to be in
compliance, actions taken to correct incidents of
noncompliance, and an analysis of compliance, including
a discussion of any trends, patterns, and problems, and
recommendations regarding reasonable actions to improve
the efficiency of the examinations processes.''.
(c) Amendment to Federal Housing Enterprises Financial Safety and
Soundness Act of 1992.--Section 1317 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended
by adding at the end the following new subsection:
``(g) Flood Insurance Compliance by Enterprises.--
``(1) Examination.--After the submission of the report
under section 210(d) of the National Flood Insurance Reform Act
of 1994, the Director shall, during each annual examination of
an enterprise conducted under this section, determine whether
the enterprise has established adequate procedures required
under section 102(b)(4) of the Flood Disaster Protection Act of
1973 and is complying with such procedures.
``(2) Exception.--The provisions of paragraph (1) shall not
apply with respect to an enterprise if the Director--
``(A) determines, pursuant to the report under
section 210(d) of the National Flood Insurance Reform
Act of 1994, that the enterprise has established
adequate procedures pursuant to section 102(b)(4) of
the Flood Disaster Protection Act of 1973 and has a
pattern of compliance with such procedures; and
``(B) certifies such finding in writing to the
Congress.
``(3) Report.--
``(A) Requirement.--Not later than 1 year after the
date of enactment of the National Flood Insurance
Reform Act of 1994 and biennially thereafter for the
next 4 years, the Director shall submit a report to
Congress on compliance by the enterprises with the
procedures established pursuant to section 102(b)(4) of
the Flood Disaster Protection Act of 1973.
``(B) Contents.--The report shall include a
description of the methods used to determine
compliance, identification of any enterprise found not
to be in compliance, actions taken to correct incidents
of noncompliance, and an analysis of compliance,
including a discussion of any trends, patterns, and
problems, and recommendations regarding reasonable
actions to improve the efficiency of the examinations
processes.''.
(d) GAO Report on GSE Compliance.--Not later than 18 months after
the date of enactment of this Act, the Comptroller General of the
United States shall submit a report to the Congress and the Director of
the Office of Federal Housing Enterprise Oversight of the Department of
Housing and Urban Development regarding the procedures established by
the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation pursuant to section 102(b)(4) of the Flood
Disaster Protection Act of 1973. The report shall include a description
of such procedures, an analysis of whether such procedures are
sufficient to comply with the requirements of such section, a
determination of whether each enterprise has complied with such
procedures, a description of any actions taken by each enterprise to
correct any incidents of noncompliance, and any recommendations
regarding reasonable actions to improve the procedures established by
the enterprises and compliance with such procedures.
SEC. 211. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
Section 1006 of the Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3305) is amended by adding at the end
the following new subsection:
``(g) The council shall consult and assist the Federal entities for
lending regulation and the Secretary of Housing and Urban Development
in developing and coordinating uniform standards and requirements for
use by lenders as provided under the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973.''.
SEC. 212. CLERICAL AMENDMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) is amended--
(1) by striking the section heading and inserting the
following new section heading:
``flood insurance purchase and compliance requirements and escrow
accounts''; and
(2) in subsection (c), by inserting ``Exception to Purchase
Requirements for State-Owned Property.--'' before
``Notwithstanding''.
TITLE III--RATINGS AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT
PROGRAMS
SEC. 301. COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY
FLOODPLAIN MANAGEMENT.
Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C.
4022) is amended--
(1) by inserting after ``Sec. 1315.'' the following: ``(a)
Requirement for Participation in Flood Insurance Program.--'';
and
(2) by adding at the end the following new subsection:
``(b) Community Rating System and Incentives for Community
Floodplain Management.--
``(1) Authority and goals.--The Director shall carry out a
community rating system program to evaluate the measures
adopted by areas (and subdivisions thereof) in which the
Director has made flood insurance coverage available to provide
for adequate land use and control provisions consistent with
the comprehensive criteria for such land management and use
under section 1361, to facilitate accurate risk-rating, to
promote flood insurance awareness, and to complement adoption
of more effective measures for floodplain and coastal erosion
management.
``(2) Incentives.--The program under this subsection shall
provide incentives in the form of adjustments in the premium
rates for flood insurance coverage in areas that the Director
determines have adopted and enforced the goals of the community
rating system under this subsection. In providing incentives
under this paragraph, the Director may provide for additional
adjustments in premium rates for flood insurance coverage in
areas that the Director determines have implemented measures
relating to the protection of natural and beneficial floodplain
functions. The Director may also provide for additional
adjustments in premium rates for flood insurance coverage in
areas within which such rates have increased as a result of
induced flooding risk from flood control or mitigation
projects, as determined by the Director, except that the
adjustment shall not reduce premium rates below the rate which
would have been charged absent the risk of induced flooding
from the flood control or mitigation projects.
``(3) Funds.--The Director shall carry out the program
under this subsection with amounts, as the Director determines
necessary, from the National Flood Insurance Fund under section
1310 and any other amounts that may be appropriated for such
purpose.
``(4) Reports.--The Director shall submit a report to the
Congress regarding the program under this subsection not later
than the expiration of the 2-year period beginning on the date
of the enactment of the National Flood Insurance Reform Act of
1994. The Director shall submit a report under this paragraph
not less than every 2 years thereafter. Each report under this
paragraph shall include an analysis of the cost-effectiveness
and other accomplishments and shortcomings of the program and
any recommendations of the Director for legislation regarding
the program.''.
SEC. 302. FUNDING.
Section 1310(a) of the National Flood Insurance Act of 1968 (42
U.S.C. 4017(a)) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) by redesignating paragraph (5) as paragraph (8); and
(3) by inserting after paragraph (4) the following new
paragraph:
``(5) for carrying out the program under section
1315(b);''.
TITLE IV--MITIGATION OF FLOOD AND EROSION RISKS
SEC. 401. REPEAL OF FLOODED PROPERTY PURCHASE AND LOAN PROGRAM.
(a) Repeal.--Section 1362 of the National Flood Insurance Act of
1968 (42 U.S.C. 4103) is hereby repealed.
(b) Transition Phase.--Notwithstanding subsection (a), during the
1-year period beginning on the date of the enactment of this Act, the
Director of the Federal Emergency Management Agency may enter into loan
and purchase commitments as provided under section 1362 of such Act (as
in effect immediately before the enactment of this Act).
(c) Savings Provision.--Notwithstanding subsection (a), the
Director shall take any action necessary to comply with any purchase or
loan commitment entered into before the expiration of the period
referred to in subsection (b) pursuant to authority under section 1362
of the National Flood Insurance Act of 1968 or subsection (b).
SEC. 402. TERMINATION OF EROSION-THREATENED STRUCTURES PROGRAM.
(a) In General.--Section 1306 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4013) is amended by striking subsection (c).
(b) Transition Phase.--Notwithstanding subsection (a), during the
1-year period beginning on the date of the enactment of this Act, the
Director of the Federal Emergency Management Agency may pay amounts
under flood insurance contracts for demolition or relocation of
structures as provided in section 1306(c) of the National Flood
Insurance Act of 1968 (as in effect immediately before the enactment of
this Act).
(c) Savings Provision.--Notwithstanding subsection (a), the
Director shall take any action necessary to make payments under flood
insurance contracts pursuant to any commitments made before the
expiration of the period referred to in subsection (b) pursuant to the
authority under section 1306(c) of the National Flood Insurance Act of
1968 or subsection (b).
SEC. 403. MITIGATION ASSISTANCE RESPONSIBILITIES IN FEDERAL INSURANCE
ADMINISTRATION.
Section 1105(a) of the Housing and Urban Development Act of 1968
(42 U.S.C. 4129(a)) is amended--
(1) by inserting ``(1)'' after ``(a)''; and
(2) by adding at the end the following new paragraph:
``(2) The Director of the Federal Emergency Management Agency shall
coordinate all mitigation activities, including the administration of
the program for mitigation assistance under section 1366, under the
Federal Insurance Administrator. Such activities shall include the
development and implementation of various mitigation activities and
techniques, the provision of advice and assistance regarding mitigation
to States, communities, and individuals, including planning assistance
under section 1366(b), coordination with other Federal flood and
erosion mitigation efforts, and coordination with State and local
governments and public and private agencies and organizations for
collection and dissemination of information regarding erosion.''.
SEC. 404. STATE AND COMMUNITY MITIGATION ASSISTANCE PROGRAM.
(a) In General.--Chapter III of the National Flood Insurance Act of
1968 (42 U.S.C. 4101 et seq.), as amended by the preceding provisions
of this Act, is further amended by adding at the end the following new
section:
``state and community mitigation assistance
``Sec. 1366. (a) Authority.--The Director shall carry out a program
to provide financial assistance to States and communities, using
amounts made available from the National Flood and Erosion Mitigation
Fund under section 1367, for planning and carrying out activities
designed to reduce the risk of flood and erosion damage to structures
covered under contracts for flood insurance under this title. Such
financial assistance shall be made available in the form of grants
under subsection (b) for planning assistance and grants under this
section for carrying out mitigation activities.
``(b) Planning Assistance Grants.--
``(1) In general.--The Director may make grants under this
subsection to States and communities to assist in developing
mitigation plans under subsection (c).
``(2) Funding.--Of any amounts made available from the
National Flood and Erosion Mitigation Fund for use under this
section in any fiscal year, the Director may use not more than
$1,500,000 to provide planning assistance grants under this
subsection.
``(3) Limitations.--
``(A) Timing.--A grant under this subsection may be
awarded to a State or community not more than once
every 5 years and each grant may cover a period of 1 to
3 years.
``(B) Single grantee amount.--A grant for planning
assistance may not exceed--
``(i) $150,000, to any State; or
``(ii) $50,000, to any community.
``(C) Cumulative state grant amount.--The sum of
the amounts of grants under this subsection in any
fiscal year to any one State and all communities
located in such State may not exceed $300,000.
``(c) Mitigation Plan Requirement.--To be eligible to receive
financial assistance under this section for mitigation activities, a
State or community shall develop, and have approved by the Director, a
flood and erosion risk mitigation plan (hereafter in this section
referred to as a `mitigation plan'), that is more protective against
flood losses and, if applicable, erosion losses, than the criteria
established by the Director under section 1361 and provides such
protection with respect to structures covered by contracts for flood
insurance under this title. The mitigation plan shall include a
comprehensive strategy for mitigation activities adopted by the State
or community following a public hearing.
``(d) Notification of Approval.--The Director shall notify a State
or community submitting a mitigation plan of the approval or
disapproval of the plan not later than 120 days after submission of the
plan. If the Director does not approve a plan, the Director shall
notify the State or community in writing of the reasons for such
disapproval.
``(e) Eligible Mitigation Activities.--
``(1) Determination.--Amounts provided under this section
(other than under subsection (b)) may be used only for
mitigation activities specified in a mitigation plan approved
by the Director under subsection (d). The Director may approve
only mitigation plans that specify mitigation activities that
the Director determines are technically feasible and cost-
effective. The Director shall provide assistance under this
section to the extent amounts are available in the National
Flood and Erosion Mitigation Fund pursuant to appropriation
Acts, subject only to the absence of approvable mitigation
plans.
``(2) Eligible activities.--The Director shall determine
whether mitigation activities described in a mitigation plan
submitted under subsection (d) by a State or community comply
with the requirements under paragraph (1). Such activities may
include--
``(A) demolition or relocation of any structure
located on land that is along the shore of a lake or
other body of water and is certified by an appropriate
State or local land use authority to be subject to
imminent collapse or subsidence as a result of erosion
or flooding;
``(B) elevation, relocation, demolition, or
floodproofing of structures, particularly structures
incurring repetitive flood-related damage, structures
(including public structures) located in special flood
hazard areas or other areas of flood risk, and
structures (including public structures) located in
erosion hazard areas or other areas of erosion risk;
``(C) acquisition by States and communities of
properties (including public properties) located in
special flood hazard areas or other areas of flood
risk, properties (including public properties) located
in erosion hazard areas or other areas of erosion risk,
and properties substantially damaged by flood, for
public use, as the Director 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;
``(E) the provision of technical assistance by
States to communities and individuals to conduct
eligible mitigation activities;
``(F) other activities that the Director considers
appropriate and specifies in regulation; and
``(G) other mitigation activities not described in
subparagraphs (A) through (E) or the regulations issued
under subparagraph (F), that are described in the
mitigation plan of a State or community.
``(f) Matching Requirement.--
``(1) In general.--The Director may not provide mitigation
assistance under this section to a State or community in an
amount exceeding 3 times the amount that the State or community
certifies, as the Director 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 of the
State or community. In no case shall any State or community in-
kind contribution exceed one-half of the amount of non-Federal
funds contributed by the State or community.
``(2) 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), and the
value of any donated material or building and the value of any
lease on a building.
``(g) Oversight of Mitigation Plans.--The Director shall conduct
oversight of recipients of mitigation assistance under this section to
ensure that the assistance is used in compliance with the approved
mitigation plans of the recipients and that matching funds certified
under subsection (f) are used in accordance with such certification.
``(h) Recapture.--
``(1) Noncompliance with plan.--If the Director determines
that a State or community that has received mitigation
assistance under this section has not carried out the
mitigation activities as set forth in the mitigation plan, the
Director shall recapture any unexpended amounts and deposit the
amounts in the National Flood and Erosion Mitigation Fund under
section 1367.
``(2) Failure to provide matching funds.--If the Director
determines that a State or community that has received
mitigation assistance under this section has not provided
matching funds in the amount certified under subsection (f),
the Director 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 and Erosion Mitigation Fund under section 1367.
``(i) Reports.--Not later than 1 year after the date of enactment
of the National Flood Insurance Reform Act of 1994 and biannually
thereafter, the Director shall submit a report to the Congress
describing the status of flood and erosion mitigation activities
carried out with assistance provided under this section.
``(j) Definition of Community.--For purposes of this section, the
term `community' means--
``(1) a political subdivision that (A) has zoning and
building code jurisdiction over a particular area of special
flood hazards, and (B) is participating in the national flood
insurance program; or
``(2) a political subdivision of a State, or other
authority, that is designated to develop and administer a
mitigation plan by political subdivisions, all of which meet
the requirements of paragraph (1).''.
(b) Regulations.--Not later than 6 months after date of enactment
of this Act, the Director of the Federal Emergency Management Agency
shall issue regulations to carry out section 1366 of the National Flood
Insurance Act of 1968, as added by subsection (a).
SEC. 405. ESTABLISHMENT OF NATIONAL FLOOD AND EROSION MITIGATION FUND.
Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C.
4101 et seq.), as amended by the preceding provisions of this Act, is
further amended by adding at the end the following new section:
``national flood and erosion mitigation fund
``Sec. 1367. (a) Establishment and Availability.--The Director
shall establish in the Treasury of the United States a fund to be known
as the National Flood and Erosion 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.
``(b) Credits.--The National Flood and Erosion Mitigation Fund
shall be credited with--
``(1) any premium surcharges assessed under section
1308(f);
``(2) any penalties collected under section 102(f) of the
Flood Disaster Protection Act of 1973; and
``(3) any amounts recaptured under section 1366(i).
``(c) Investment.--If the Director determines that the amounts in
the National Flood and Erosion Mitigation Fund are in excess of amounts
needed under subsection (a), the Director may invest any excess amounts
the Director determines advisable in interest-bearing obligations
issued or guaranteed by the United States.
``(d) Report.--The Director shall submit a report to the Congress
not later than the expiration of the 1-year period beginning on the
date of the enactment of this Act and not less than once during each
successive 2-year period thereafter. The report shall describe the
status of the Fund and any activities carried out with amounts from the
Fund.''.
SEC. 406. INSURANCE PREMIUM MITIGATION SURCHARGE AND EROSION HAZARD
ZONE SURCHARGE.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C.
4015) is amended by adding at the end the following new subsections:
``(f) Insurance Premium Mitigation Surcharge.--
``(1) Assessment.--Notwithstanding any other provision of
this title, the Director shall assess, with respect to each
contract for flood insurance coverage under this title issued
or renewed after the date of the enactment of the National
Flood Insurance Reform Act of 1994, a mitigation surcharge of--
``(A) $10 per policy term, for policies having a
total coverage amount of $150,000 or less that cover
structures that are principal residences;
``(B) $20 per policy term, for policies having a
total coverage amount of more than $150,000 that cover
structures that are principal residences; and
``(C) the amount established by the Director not to
exceed $40 per policy term, for policies covering other
structures.
``(2) Deposit in mitigation fund.--Any mitigation
surcharges collected shall be paid into the National Flood and
Erosion Mitigation Fund under section 1367.
``(3) Exemption.--The mitigation surcharges shall not be
subject to any agents' commissions, company expenses
allowances, or State or local premium taxes.
``(g) Erosion Hazard Zone Surcharges.--The Director shall assess a
surcharge for each contract for flood insurance coverage under this
title covering an existing structure that is located within the 30-year
or 60-year erosion hazard zone established under section 1360(j).
Subject only to the limitation under subsection (e), the surcharge
shall be in the amount necessary so that, based on the risk involved
and sound actuarial principles, the sum of the amounts charged for a
property for flood insurance premiums and the surcharge under this
subsection is equal to the full actuarial risk premium rate determined
under section 1307(a)(1) for the area in which the property is
located.''.
SEC. 407. LIMITATIONS ON NEW FLOOD INSURANCE COVERAGE IN EROSION HAZARD
AREAS.
The National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.)
is amended by inserting after section 1313 the following new section:
``SEC. 1314. PROPERTIES LOCATED WITHIN 30-YEAR AND 60-YEAR EROSION
HAZARD ZONES.
``(a) Properties Located Within 30-Year Erosion Hazard Zone.--After
the establishment of erosion hazard zones under section 1360(j), the
Director may not make flood insurance available within a 30-year
erosion hazard zone with respect to any new--
``(1) construction; or
``(2) addition to an existing structure, if the addition
makes the structure not a readily movable structure.
``(b) Properties Located Within 60-Year Erosion Hazard Area and
Outside 30-Year Erosion Hazard Zone.--After the establishment of
erosion hazard zones under section 1360(j), the Director may not make
flood insurance available with respect to any new--
``(1) nonresidential structure;
``(2) residential structure that is not a readily movable
structure; or
``(3) addition to an existing structure, if the addition
makes the structure not a readily movable structure;
that is constructed or relocated landward of the 30-year erosion hazard
zone and within the 60-year erosion hazard zone established by the
Director under such section.
``(c) Treatment of Existing Structures.--This section may not be
construed to prohibit the renewal or continuation of coverage for any
flood insurance policy under this title covering a structure that
suffers substantial damage, regardless of whether the structure is
relocated or reconstructed. For purposes of this subsection, the term
`substantial damage' means damage of any origin sustained by a
structure that is of such an extent that the cost of restoring the
structure to its condition before such damage would equal or exceed 50
percent of the market value of the structure immediately before the
damage occurred.
``(d) State Erosion Hazard Management Program.--Notwithstanding
subsections (a) and (b), if upon the date of the enactment of the
National Flood Insurance Reform Act of 1994 a State has adopted and has
in effect an erosion management program that, in the determination of
the Director, has enforceable provisions prohibiting or restricting new
construction or additions to existing structures within the 30-year
erosion hazard zone, the Director shall continue to make flood
insurance under this title available for new construction and additions
to existing structures landward of the 30-year erosion zone that are
otherwise in conformance with all applicable State and local laws,
regulations, and ordinances relating to building design, development,
and erosion.''.
SEC. 408. STUDY OF MITIGATION INSURANCE.
(a) Study.--The Director of the Federal Emergency Management Agency
shall conduct a study to determine the feasibility of providing, as
part of the flood insurance policy, insurance coverage to provide for
increases in the costs of repair and reconstruction of repetitively and
severely flood-damaged insured buildings, in order to repair,
reconstruct, or otherwise mitigate future hazards to those buildings to
comply with local building codes and floodplain management ordinances
to the greatest extent possible. In conducting the study, the Director
shall seek involvement from other Federal, State, and local agencies,
and representation from the insurance, construction, and floodplain
management interests. Under the study the Director shall--
(1) identify potential activities related to repair,
reconstruction, or otherwise achieving mitigation required to
comply with standards under the national flood insurance
program and local building codes, and evaluate the costs of
such activities;
(2) evaluate how such insurance coverage could be utilized
to achieve economically justified acquisition or relocation of
certain structures under certain circumstances;
(3) evaluate the cost of providing the additional coverage
and investigate a full range of measures for funding such
costs, including changes in coverage, rates, and deductibles;
(4) evaluate the effect changes identified in paragraph (3)
would have on the entire policy base, the cost of flood
insurance, retention of policies, marketing of policies, the
number and magnitude of claims paid, and the economic soundness
and value of flood-prone property, and provide detail on such
effects by State and flood hazard zone; and
(5) identify mechanisms required to identify qualifying
structures, determine appropriate mitigation measures,
coordinate with State and local officials, provide consistency
with State and local plans and programs, deliver the increased
insurance payments, and verify appropriate actions by
policyholders.
(b) Report.--The Director shall submit to the Congress a report
describing the study not later than the expiration of the 18-month
period beginning on the date of the enactment of this Act. The report
shall include conclusions and recommendations of the Director in
conducting the study.
SEC. 409. RIVERINE EROSION STUDY.
(a) Study.--The Director of the Federal Emergency Management Agency
shall conduct a study to determine the feasibility of identifying and
establishing erosion rates for communities subject to riverine erosion
hazards and the best manner of identifying and establishing such rates.
Under the study the Director shall--
(1) investigate and assess existing and state-of-the-art
technical methodologies for assessing riverine erosion;
(2) examine natural riverine processes, environmental
conditions, and human-induced changes to the banks of rivers
and streams, examples of erosion and likely causes, and
examples of erosion control and reasons for their performance;
and
(3) analyze riverine erosion management strategies, the
technical standards, methods, and data necessary to support
such strategies, and methods of administering such strategies
through the national flood insurance program.
(b) Report.--The Director shall submit a report to the Congress
regarding the findings and conclusions of the study under this section
not later than the expiration of the 2-year period beginning on the
date of the enactment of this Act. The report shall include any
recommendations of the Director regarding appropriate methods and
approaches for identifying and determining riverine erosion rates and
management strategies relating to riverine erosion.
SEC. 410. COORDINATION WITH COASTAL ZONE MANAGEMENT PROGRAMS.
(a) In General.--In implementing this title and the amendments made
by this title, the Director of the Federal Emergency Management Agency
shall consult with the Under Secretary of Commerce for Oceans and
Atmosphere and representatives from State coastal zone management
programs to promote full coordination of the erosion management
provisions of the National Flood Insurance Act of 1968 as amended by
this Act, and the provisions of the Coastal Zone Management Act of
1972. The Director shall, to the greatest extent possible, utilize
State management programs approved under section 306 of the Coastal
Zone Management Act of 1972 to facilitate development and
implementation of regulations and guidelines for this title.
(b) Coordination Report.--The Director shall prepare a report that
details the proposed mechanisms for achieving the coordination required
in subsection (a). In preparing the report, the Director shall consult
with the Under Secretary of Commerce for Oceans and Atmosphere. This
report shall be submitted to the Congress not later than 2 years after
the date of enactment of this Act.
TITLE V--FLOOD INSURANCE TASK FORCE
SEC. 501. FLOOD INSURANCE INTERAGENCY TASK FORCE.
(a) Establishment.--There is hereby established an interagency task
force to be known as the Flood Insurance Task Force (in this section
referred to as the ``Task Force'').
(b) Membership.--
(1) In general.--The Task Force shall be composed of 11
members, who shall be the designees of--
(A) the Federal Insurance Administrator;
(B) the Federal Housing Commissioner;
(C) the Secretary of Veterans Affairs;
(D) the Administrator of the Farmers Home
Administration;
(E) the Administrator of the Small Business
Administration;
(F) a designee of the Financial Institutions
Examination Council;
(G) the chairman of the Board of Directors of the
Federal Home Loan Mortgage Corporation;
(H) the chairman of the Board of Directors of the
Federal National Mortgage Association;
(I) the Under Secretary of Commerce for Oceans and
Atmosphere;
(J) the Director of the United States Fish and
Wildlife Service; and
(K) the Administrator of the Environmental
Protection Agency.
(2) Qualifications.--Members of the Task Force shall be
designated for membership on the Task Force by reason of
demonstrated knowledge and competence regarding the national
flood insurance program.
(c) Duties.--The Task Force shall carry out the following duties:
(1) Make recommendations to the head of each Federal agency
and enterprise referred to under subsection (b)(1) regarding
establishment or adoption of standardized enforcement
procedures among such agencies and corporations responsible for
enforcing compliance with the requirements under the national
flood insurance program to ensure fullest possible compliance
with such requirements.
(2) Conduct a study of the extent to which Federal agencies
and the secondary mortgage market can provide assistance in
ensuring compliance with the requirements under the national
flood insurance program and submit to the Congress a report
describing the study and any conclusions.
(3) Conduct a study of the extent to which existing
programs of Federal agencies and corporations for compliance
with the requirements under the national flood insurance
program can serve as a model for other Federal agencies
responsible for enforcing compliance, and submit to the
Congress a report describing the study and any conclusions.
(4) Develop guidelines regarding enforcement and compliance
procedures, based on the studies and findings of the Task
Force, and publish the guidelines in a usable format.
(d) Noncompensation.--Members of the Task Force shall receive no
additional pay by reason of their service on the Task Force.
(e) Chairperson.--The members of the Task Force shall elect one
member as chairperson of the Task Force.
(f) Meetings and Action.--The Task Force shall meet at the call of
the chairman or a majority of the members of the Task Force and may
take action by a vote of the majority of the members. The Federal
Insurance Administrator shall coordinate and call the initial meeting
of the Task Force.
(g) Officers.--The chairperson of the Task Force may appoint any
officers to carry out the duties of the Task Force under subsection
(c).
(h) Staff of Federal Agencies.--Upon request of the chairperson of
the Task Force, the head of any of the Federal agencies and
corporations referred to under subsection (b)(1) may detail, on a
nonreimbursable basis, any of the personnel of such agency to the Task
Force to assist the Task Force in carrying out its duties under this
Act.
(i) Powers.--In carrying out this section, the Task Force may hold
hearings, sit and act at times and places, take testimony, receive
evidence and assistance, provide information, and conduct research as
the Task Force considers appropriate.
(j) Subcommittee on Natural and Beneficial Functions of the
Floodplain.--The members of the Task Force appointed under
subparagraphs (I), (J), and (K) of subsection (b)(1) shall constitute a
select subcommittee which, in addition to their duties under subsection
(c), shall make recommendations regarding the implementation of the
provisions of the National Flood Insurance Act of 1968 that deal with
protection of the natural and beneficial functions of the floodplain.
(k) Termination.--The Task Force shall terminate upon the
expiration of the 24-month period beginning upon the designation of the
last member to be designated under subsection (b)(1).
TITLE VI--MISCELLANEOUS PROVISIONS
SEC. 601. LIMITATION ON PREMIUM AND SURCHARGE INCREASES.
(a) Property-Specific Limitation.--Section 1308 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended--
(1) in subsection (c), by striking ``Notwithstanding any
other provision of this title'' and inserting ``Subject only to
the limitation under subsection (e)''; and
(2) by inserting after subsection (d) the following new
subsection:
``(e) Annual Limitation on Premium and Surcharge Increases.--
Notwithstanding any other provision of this title, the sum of the risk
premium rate for flood insurance and the erosion hazard zone surcharge
that are charged under this title for any property may not be increased
in an amount that would result in the sum of such rate and surcharge
increases for the property during any 12-month period exceeding 10
percent of the sum of the amounts of the risk premium rate and erosion
hazard zone surcharge applicable to the property upon the commencement
of such 12-month period.''.
(b) Repeal of Program-Wide Limitation.--Subsection (d) of section
541 of the Housing and Community Development Act of 1987 (42 U.S.C.
4015 note) is hereby repealed.
SEC. 602. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.
(a) In General.--Section 1306(b) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4013(b)) is amended as follows:
(1) Residential property.--In paragraph (2), by striking
``an amount of $150,000 under the provisions of this clause''
and inserting the following: ``a total amount (including such
limits specified in paragraph (1)(A)(i)) equal to the dollar
amount limitation pursuant to section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act in effect for a single-
family residence''.
(2) Residential property contents.--In paragraph (3), by
striking ``an amount of $50,000 under the provisions of this
clause'' and inserting the following: ``a total amount
(including such limits specified in paragraph (1)(A)(ii)) of
$100,000''.
(3) Nonresidential property and contents.--By striking
paragraph (4) and inserting the following new paragraph:
``(4) in the case of any nonresidential property, including
churches, 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 limits specified in subparagraph (B) or
(C) or paragraph (1), as applicable) of $500,000 for each
structure and $500,000 for any contents related to each
structure; and''.
(b) Removal of Ceiling on Coverage Required.--Section 1306(b) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is
amended--
(1) in paragraph (5), by striking ``; and'' at the end and
inserting a period; and
(2) by striking paragraph (6).
SEC. 603. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH PRIVATE INSURANCE
ENTITIES.
Section 1345(b) of the National Flood Insurance Act of 1968 (42
U.S.C. 4081(b)) is amended by striking the period at the end and
inserting the following: ``and without regard to the provisions of the
Federal Advisory Committee Act (5 U.S.C. App.).''.
SEC. 604. UPDATING OF FLOOD MAPS AND ASSESSMENT AND MAPPING OF EROSION
HAZARD ZONES.
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 subsections:
``(e) Review of Flood Maps.--Once during each 5-year period (the
1st such period beginning on the date of the enactment of the National
Flood Insurance Reform Act of 1994) or more often as the Director
determines necessary because of storm-induced erosion, increased
watershed development, or other extraordinary situations, the Director
shall assess the need to revise and update all floodplain areas and
flood risk zones identified, delineated, or established under this
section.
``(f) Updating Flood Maps.--The Director shall revise and update
any floodplain areas and flood-risk zones--
``(1) upon the determination of the Director, 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 equal to the amount of funds provided by the Director
(or the equivalent value of data, technical analysis, or other
in-kind services) for the requested revision or update.
``(g) Availability of Flood Maps.--To promote compliance with the
requirements of this title, the Director shall make flood insurance
rate maps and related information available free of charge to State
agencies directly responsible for coordinating the national flood
insurance program and to 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 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
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 shall make such compendia available,
free of charge, to 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) Establishment of Erosion Hazard Zones.--
``(1) In general.--Not later than the expiration of the 6-
year period beginning on the date of the enactment of the
National Flood Insurance Reform Act of 1994, the Director shall
assess, identify, and map all coastal areas that have special
erosion hazards (in this section referred to as `erosion hazard
zones'), as provided in this subsection.
``(2) Mapping priorities.--Not later than 2 years after the
date of enactment of the National Flood Insurance Reform Act of
1994, the Director shall determine the coastal areas that are
at greatest risk from erosion and assess, identify, and map the
erosion hazard zones in such areas.
``(3) 60-year erosion zones.--On each flood insurance rate
map established under this section, the Director shall identify
and provide legible demarcation for areas that are subject to
special erosion hazards within a 60-year period based on past
annual average rates of shoreline retreat in such areas (in
this section referred to as `60-year erosion zones').
``(4) 30-year erosion zones.--On each flood insurance rate
map established under this section, the Director shall provide
information by area regarding the existing annual average rate
of erosion for each area, so that users of the maps can
delineate boundaries for areas subject to erosion within 30
years (in this section referred to as `30-year erosion zones').
``(5) Consideration of mitigation activities.--In
identifying and mapping erosion hazard zones, the Director
shall determine erosion rates based on (A) the presence of any
community erosion control measures, and (B) erosion of the area
in the absence of such measures. The Director shall use the
lower of the estimated erosion rates in the determination of
the erosion hazard zones.
``(6) Use of state and community information.--In
designating erosion hazard zones under this title, the Director
shall, to the maximum extent practicable, use State or
community erosion rate data and baseline reference features.
``(7) Review.--The Director shall consult with State and
community governments in the determination of erosion hazard
zones, and shall provide for a public review and appeals
process comparable to the established review and appeals
process for flood elevation determinations required under this
title.
``(8) Updating.--The Director shall provide for revising
and updating erosion hazard zones as frequently as the Director
determines to be necessary for purposes of this title. In
revising the geographical boundaries of erosion hazard zones,
the Director shall place special emphasis on considering--
``(A) areas (or subdivisions thereof) that are
experiencing or have recently experienced erosion rates
in excess of the annual average erosion rate, due to
storms, high lake levels, or other factors; and
``(B) areas where nonstructural and structural
measures have been implemented by a community to
control erosion or erosion rates have been otherwise
significantly altered by manmade or induced activity.
``(9) Transition.--Until the Director has assessed,
identified, and mapped erosion rate data for a community, the
community may obtain, review, and reasonably use erosion rate
information or other historical data available from other
Federal, State, or other sources in order to develop a
mitigation plan required for assistance under section 1366.''.
SEC. 605. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY-BASED
PREMIUM RATES FOR PRE-FIRM STRUCTURES.
(a) Study.--The Director of the Federal Emergency Management Agency
(in this section referred to as the ``Director'') shall conduct a study
of the economic effects that would result from increasing premium rates
for flood insurance coverage made available under the national flood
insurance program for pre-FIRM structures to the full actuarial risk
based premium rate determined under section 1307(a)(1) of the National
Flood Insurance Act of 1968 for the area in which the property is
located. In conducting the study, the Director shall--
(1) determine each area that would be subject to such
increased premium rates; and
(2) for each such area, determine--
(A) the amount by which premium rates would be
increased;
(B) the number and types of properties affected and
the number and types of properties covered by flood
insurance under this title likely to cancel such
insurance if the rate increases were made;
(C) the effects that the increased premium rates
would have on land values and property taxes; and
(D) any other effects that the increased premium
rates would have on the economy and homeowners.
(b) Definition of ``Pre-FIRM Structure''.--For purposes of
subsection (a), the term ``pre-FIRM structure'' means a structure that
was not constructed or substantially improved after the later of--
(1) December 31, 1974; or
(2) the effective date of the initial rate map published by
the Director under section 1360(a)(2) of the National Flood
Insurance Act of 1968 for the area in which such structure is
located.
(c) Report.--The Director shall submit a report to the Congress
describing and explaining the findings of the study conducted under
this section. The report shall be submitted not later than 12 months
after the date of the enactment of this Act.
SEC. 606. NATIONAL FLOOD INSURANCE FUND.
(a) Availability of Fund for Increased Administrative and
Operational Responsibilities.--Section 1310(a) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended--
(1) in the matter preceding paragraph (1), by inserting
``(except as otherwise provided in this section)'' after
``without fiscal year limitation''; and
(2) by inserting after paragraph (5) (as added by the
preceding provisions of this Act) the following new paragraphs:
``(6) for assessment and mapping of erosion hazard zones
under section 1360(j), except that the fund shall be available
for the purpose under this paragraph in an amount not to exceed
an aggregate of $25,000,000 over the 6-year period beginning on
the date of the enactment of the National Flood Insurance
Reform Act of 1994;
``(7) for the revision and updating of erosion hazard zones
under section 1360(j)(8), except that the fund shall be
available for the purpose under this paragraph in an amount not
to exceed $2,000,000 in each fiscal year beginning after the
expiration of the 6-year period beginning on the date of the
enactment of the National Flood Insurance Reform Act of 1994;
and''.
(b) Separate Account.--Section 1310(a) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended--
(1) by striking ``is authorized to'' and inserting
``shall''; and
(2) by inserting after ``which shall be'' the following:
``an account separate from any other accounts or funds
available to the Director and shall be''.
SEC. 607. EFFECTIVE DATES OF POLICIES.
(a) 30-Day Delay.--Section 1306 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4013), as amended by the preceding provisions of
this Act, is further amended by adding at the end the following new
subsection:
``(c)(1) Except as provided in paragraph (2), coverage under a new
contract for flood insurance coverage under this title entered into
after the date of the enactment of the National Flood Insurance Reform
Act of 1994, and any modification to coverage under an existing flood
insurance contract made after such date, shall become effective upon
the expiration of the 30-day period beginning on the date that all
obligations for such coverage (including completion of the application
and payment of any initial premiums owed) are satisfactorily completed.
``(2) Coverage under a flood insurance contract for newly
constructed property and coverage for newly acquired property, that is
obtained before or upon the completion of the construction or transfer
of title to the property, as applicable, shall become effective at such
time as the Director shall by regulation provide.''.
(b) Study.--The Director of the Federal Emergency Management Agency
shall conduct a study to determine the appropriateness of existing
requirements regarding the effective date and time of coverage under
flood insurance contracts obtained through the national flood insurance
program. In conducting the study, the Director shall determine whether
any delay between the time of purchase of flood insurance coverage and
the time of initial effectiveness of the coverage should differ for
various classes of properties (based upon the type of property,
location of the property, or any other factors related to the property)
or for various circumstances under which such insurance was purchased.
Not later than the expiration of the 6-month period beginning on the
date of the enactment of this Act, the Director shall submit to the
Congress a report on the results of the study.
SEC. 608. REGULATIONS.
The Director of the Federal Emergency Management Agency, the
Secretary of Housing and Urban Development, and any appropriate head of
any Federal agency may each issue any regulations necessary to carry
out the applicable provisions of this Act and the applicable amendments
made by this Act.
SEC. 609. RELATION TO STATE AND LOCAL LAWS.
This Act and the amendments made by this Act may not be construed
to preempt, annul, alter, amend, or exempt any person from compliance
with any law, ordinance, or regulation of any State or local government
with respect to land use, management, or control.
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