[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5114 Reported in House (RH)]
Union Calendar No. 282
111th CONGRESS
2d Session
H. R. 5114
[Report No. 111-495]
To extend the authorization for the national flood insurance program,
to identify priorities essential to reform and ongoing stable
functioning of the program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 22, 2010
Ms. Waters (for herself, Mr. Frank of Massachusetts, Mr. Kanjorski, Mr.
Costello, Ms. Matsui, Mr. Thompson of Mississippi, Mr. Patrick J.
Murphy of Pennsylvania, Mrs. Capps, Mr. Cardoza, Mr. Hare, Mr. Al Green
of Texas, and Ms. Linda T. Sanchez of California) introduced the
following bill; which was referred to the Committee on Financial
Services
May 26, 2010
Additional sponsors: Mr. Stark and Mr. Sires
May 26, 2010
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 April
22, 2010]
_______________________________________________________________________
A BILL
To extend the authorization for the national flood insurance program,
to identify priorities essential to reform and ongoing stable
functioning of 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 ``Flood Insurance
Reform Priorities Act of 2010''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Extension of national flood insurance program.
Sec. 4. Maximum coverage limits.
Sec. 5. Phase-in of actuarial rates for nonresidential properties,
certain pre-FIRM properties, and non-
primary residences.
Sec. 6. 5-year delay in effective date of mandatory purchase
requirement for new flood hazard areas.
Sec. 7. 5-year phase-in of flood insurance rates for newly mapped
areas.
Sec. 8. Increase in annual limitation on premium increases.
Sec. 9. Consideration of construction, reconstruction, and improvement
of flood protection systems in
determination of flood insurance rates.
Sec. 10. Treatment of certain flood protection projects.
Sec. 11. Notification to homeowners regarding mandatory purchase
requirement applicability and rate phase-
ins.
Sec. 12. Coverage for additional living expenses and business
interruption.
Sec. 13. Exception to waiting period for effective date of policies.
Sec. 14. Minimum deductibles for claims.
Sec. 15. Payment of premiums in installments for low-income
policyholders.
Sec. 16. Enforcement.
Sec. 17. Notification to tenants of availability of contents insurance.
Sec. 18. Flood insurance outreach.
Sec. 19. Notice of availability of flood insurance and escrow in RESPA
good faith estimate.
Sec. 20. Authorization of additional FEMA staff.
Sec. 21. Plan to verify maintenance of flood insurance on Mississippi
and Louisiana properties receiving
emergency supplemental funds.
Sec. 22. Flood insurance advocate.
Sec. 23. Eligibility of property demolition and rebuilding under flood
mitigation assistance program.
Sec. 24. Study regarding mandatory purchase requirement for non-
federally related loans.
Sec. 25. Study of methods to increase flood insurance program
participation by low-income families.
Sec. 26. Report on inclusion of building codes in floodplain management
criteria.
Sec. 27. Study on repaying flood insurance debt.
Sec. 28. Study regarding impact of rate increases on pre-FIRM
properties.
Sec. 29. Study of effects of Act.
Sec. 30. Rulemaking.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) since the enactment of National Flood Insurance Act of
1968, the national flood insurance program has been the primary
source of reliable, reasonably priced, flood insurance coverage
for millions of American homes and businesses;
(2) today over 5,500,000 homes and businesses in the United
States rely on the national flood insurance program to provide
a degree of financial security;
(3) although participation in the national flood insurance
program has, in the past, largely been limited to properties
required to participate in the program because of the program's
mandatory purchase requirement for properties in special flood
hazard areas with loans from federally regulated lenders,
recent annual and extraordinary flooding has resulted in the
program enjoying its highest voluntary participation since the
establishment of the mandatory flood insurance purchase
requirement;
(4) several years of below-average flood claims losses and
increased voluntary participation in the national flood
insurance program have allowed the program to fully service the
debt incurred following Hurricanes Katrina and Rita and allowed
the program to pay $598,000,000 of the principal of that
outstanding debt;
(5) though significant reforms are needed to further
improve the financial outlook of the national flood insurance
program, long-term and reliable authorization of the program is
an essential element to stabilizing the already fragile United
States housing market;
(6) increased flooding in areas outside designated special
flood hazard areas prompted the Executive and the Congress in
2002 to begin calling for the national flood insurance program
to develop and disseminate revised, updated flood insurance
rate maps that reflect the real risk of flooding for properties
not previously identified as being located within a special
flood hazard area;
(7) dissemination of accurate, up-to-date, flood-risk
information remains a primary goal of the national flood
insurance program and such information should be disseminated
as soon as such information is collected and available;
(8) communities should be encouraged to make their
residents aware of updated flood-risk data while communities
are assessing and incorporating updated flood-risk data into
long-term community planning;
(9) the maximum coverage limits for flood insurance
policies should be increased to reflect inflation and the
increased cost of housing; and
(10) phasing out flood insurance premium subsidies
currently extended to vacation homes, second homes, and
commercial properties would result in significant average
annual savings to the national flood insurance program.
(b) Purposes.--The purposes of this Act are--
(1) to identify priorities essential to the reform and
ongoing stable functioning of the national flood insurance
program;
(2) to increase incentives for homeowners and communities
to participate in the national flood insurance program and to
improve oversight to ensure better accountability of the
national flood insurance program and the Federal Emergency
Management Agency; and
(3) to increase awareness of homeowners of flood risks and
improve the information regarding such risks provided to
homeowners.
SEC. 3. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
(a) Program Extension.--Section 1319 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking
``September 30, 2008'' and inserting ``September 30, 2015''.
(b) Financing.--Section 1309(a) of such Act (42 U.S.C. 4016(a)) is
amended by striking ``September 30, 2008'' and inserting ``September
30, 2015''.
(c) Extension of Pilot Program for Mitigation of Severe Repetitive
Loss Properties.--Section 1361A of the National Flood Insurance Act of
1968 (42 U.S.C. 4102a) is amended--
(1) in subsection (k)(1), by striking ``2005, 2006, 2007,
2008, and 2009'' and inserting ``2011, 2012, 2013, 2014, and
2015''; and
(2) by striking subsection (l).
SEC. 4. MAXIMUM COVERAGE LIMITS.
Subsection (b) of section 1306 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4013(b)) is amended--
(1) in paragraph (2), by striking ``$250,000'' and
inserting ``$335,000'';
(2) in paragraph (3), by striking ``$100,000'' and
inserting ``$135,000''; and
(3) in paragraph (4)--
(A) by striking ``$500,000'' each place such term
appears and inserting ``$670,000''; and
(B) by inserting before ``; and'' the following:
``; except that, in the case of any nonresidential
property that is a structure containing more than one
dwelling unit that is made available for occupancy by
rental (notwithstanding the provisions applicable to
the determination of the risk premium rate for such
property), additional flood insurance in excess of such
limits shall be made available to every insured upon
renewal and every applicant for insurance so as to
enable any such insured or applicant to receive
coverage up to a total amount that is equal to the
product of the total number of such rental dwelling
units in such property and the maximum coverage limit
per dwelling unit specified in paragraph (2); except
that in the case of any such multi-unit, nonresidential
rental property that is a pre-FIRM structure (as such
term is defined in section 578(b) of the National Flood
Insurance Reform Act of 1994 (42 U.S.C. 4014 note)),
the risk premium rate for the first $500,000 of
coverage shall be determined in accordance with section
1307(a)(2) and the risk premium rate for any coverage
in excess of such amount shall be determined in
accordance with section 1307(a)(1)''.
SEC. 5. PHASE-IN OF ACTUARIAL RATES FOR NONRESIDENTIAL PROPERTIES,
CERTAIN PRE-FIRM PROPERTIES, AND NON-PRIMARY RESIDENCES.
(a) In General.--Section 1308(c) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4015(c)) is amended--
(1) by redesignating paragraph (2) as paragraph (5); and
(2) by inserting after paragraph (1) the following new
paragraphs:
``(2) Nonresidential properties.--Any nonresidential
property, which term shall not include any multifamily rental
property that consists of four or more dwelling units.
``(3) Non-primary residences.--Any residential property
that is not the primary residence of any individual, including
the owner of the property or any other individual who resides
in the property as a tenant.
``(4) Recently purchased pre-firm single-family properties
used as principal residencies.--Any single family property
that--
``(A) has been constructed or substantially
improved and for which such construction or improvement
was started, as determined by the Director, before
December 31, 1974, or before the effective date of the
initial rate map published by the Director under
paragraph (2) of section 1360 for the area in which
such property is located, whichever is later; and
``(B) is purchased after the date of enactment of
the Flood Insurance Reform Priorities Act of 2010.''.
(b) Technical Amendments.--Section 1308 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015) is amended--
(1) in subsection (c)--
(A) in the matter preceding paragraph (1), by
striking ``the limitations provided under paragraphs
(1) and (2)'' and inserting ``subsection (e)''; and
(B) in paragraph (1), by striking ``, except'' and
all that follows through ``subsection (e)''; and
(2) in subsection (e), by striking ``paragraph (2) or (3)''
and inserting ``paragraph (5)''.
(c) Effective Date and Transition.--
(1) Effective date.--The amendments made by subsections (a)
and (b) shall apply beginning upon the expiration of the 3-year
period that begins on the date of the enactment of this Act,
except as provided in paragraph (2) of this subsection.
(2) Transition for properties covered by flood insurance
upon effective date.--
(A) Increase of rates over time.--In the case of
any property described in paragraph (2), (3), or (4) of
section 1308(c) of the National Flood Insurance Act of
1968, as amended by subsection (a) of this section,
that, as of the effective date under paragraph (1) of
this subsection, is covered under a policy for flood
insurance made available under the national flood
insurance program for which the chargeable premium
rates are less than the applicable estimated risk
premium rate under section 1307(a)(1) for the area in
which the property is located, the Director of the
Federal Emergency Management Agency shall increase the
chargeable premium rates for such property over time to
such applicable estimated risk premium rate under
section 1307(a)(1).
(B) Annual increase.--Such increase shall be made
by increasing the chargeable premium rates for the
property (after application of any increase in the
premium rates otherwise applicable to such property),
once during the 12-month period that begins upon the
effective date under paragraph (1) of this subsection
and once every 12 months thereafter until such increase
is accomplished, by 20 percent (or such lesser amount
as may be necessary so that the chargeable rate does
not exceed such applicable estimated risk premium rate
or to comply with subparagraph (C)).
(C) Properties subject to phase-in and annual
increases.--In the case of any pre-FIRM property (as
such term is defined in section 578(b) of the National
Flood Insurance Reform Act of 1974), the aggregate
increase, during any 12-month period, in the chargeable
premium rate for the property that is attributable to
this paragraph or to an increase described in section
1308(e) of the National Flood Insurance Act of 1968 may
not exceed 20 percent.
(D) Full actuarial rates.--The provisions of
paragraphs (2), (3), and (4) of such section 1308(c)
shall apply to such a property upon the accomplishment
of the increase under this paragraph and thereafter.
SEC. 6. 5-YEAR DELAY IN EFFECTIVE DATE OF MANDATORY PURCHASE
REQUIREMENT FOR NEW FLOOD HAZARD AREAS.
(a) In General.--Section 102 of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4012a) is amended by adding at the end the following
new subsection:
``(i) Delayed Effective Date of Mandatory Purchase Requirement for
New Flood Hazard Areas.--
``(1) In general.--In the case of any area that was not
previously designated as an area having special flood hazards
and that, pursuant to any issuance, revision, updating, or
other change in flood insurance maps that takes effect on or
after September 1, 2008, becomes designated as an area having
special flood hazards, if each State and local government
having jurisdiction over any portion of the geographic area has
complied with paragraph (2), such designation shall not take
effect for purposes of subsection (a), (b), or (e) of this
section, or section 202(a) of this Act, until the expiration of
the 5-year period beginning upon the date that such maps, as
issued, revised, update, or otherwise changed, become
effective.
``(2) Notice requirements.--A State or local government
shall be considered to have complied with this paragraph with
respect to any geographic area described in paragraph (1) only
if the State or local government has, before the effective date
of the issued, revised, updated, or changed maps, and in
accordance with such standards as shall be established by the
Director--
``(A) developed an evacuation plan to be
implemented in the event of flooding in such portion of
the geographic area; and
``(B) developed and implemented an outreach and
communication plan to advise occupants in such portion
of the geographic area of potential flood risks, the
opportunity to purchase flood insurance, and the
consequences of failure to purchase flood insurance.
``(3) Rule of construction.--Nothing in paragraph (1) may
be construed to affect the applicability of a designation of
any area as an area having special flood hazards for purposes
of the availability of flood insurance coverage, criteria for
land management and use, notification of flood hazards,
eligibility for mitigation assistance, or any other purpose or
provision not specifically referred to in paragraph (1).''.
(b) Conforming Amendment.--The second sentence of subsection (h) of
section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C.
4101(h)) is amended by striking ``Such'' and inserting ``Except for
notice regarding a change described in section 102(i)(1) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(i)(1)), such''.
(c) No Refunds.--Nothing in this section or the amendments made by
this section may be construed to authorize or require any payment or
refund for flood insurance coverage purchased for any property that
covered any period during which such coverage is not required for the
property pursuant to the applicability of the amendment made by
subsection (a).
SEC. 7. 5-YEAR PHASE-IN OF FLOOD INSURANCE RATES FOR NEWLY MAPPED
AREAS.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C.
4015), as amended by the preceding provisions of this Act, is further
amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by inserting ``or notice'' after ``prescribe by
regulation'';
(2) in subsection (c), by inserting ``and subsection (g)''
before the first comma; and
(3) by adding at the end the following new subsection:
``(g) 5-Year Phase-In of Flood Insurance Rates for Newly Mapped
Areas.--Notwithstanding any other provision of law relating to
chargeable risk premium rates for flood insurance coverage under this
title, in the case of any area that was not previously designated as an
area having special flood hazards and that, pursuant to any issuance,
revision, updating, or other change in flood insurance maps, becomes
designated as such an area, during the 5-year period that begins upon
the expiration of the period referred to in section 102(i)(1) of the
Flood Disaster Protection Act of 1973 with respect to such area, the
chargeable premium rate for flood insurance under this title with
respect to any property that is located within such area shall be--
``(1) for the first year of such 5-year period, 20 percent
of the chargeable risk premium rate otherwise applicable under
this title to the property;
``(2) for the second year of such 5-year period, 40 percent
of the chargeable risk premium rate otherwise applicable under
this title to the property;
``(3) for the third year of such 5-year period, 60 percent
of the chargeable risk premium rate otherwise applicable under
this title to the property;
``(4) for the fourth year of such 5-year period, 80 percent
of the chargeable risk premium rate otherwise applicable under
this title to the property; and
``(5) for the fifth year of such 5-year period, 100 percent
of the chargeable risk premium rate otherwise applicable under
this title to the property.''.
SEC. 8. INCREASE IN ANNUAL LIMITATION ON PREMIUM INCREASES.
Section 1308(e) of the National Flood Insurance Act of 1968 (42
U.S.C. 4015(e)) is amended by striking ``10 percent'' and inserting
``20 percent''.
SEC. 9. CONSIDERATION OF CONSTRUCTION, RECONSTRUCTION, AND IMPROVEMENT
OF FLOOD PROTECTION SYSTEMS IN DETERMINATION OF FLOOD
INSURANCE RATES.
(a) In General.--Section 1307 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4014) is amended--
(1) in subsection (e)--
(A) in the first sentence, by striking
``construction of a flood protection system'' and
inserting ``construction, reconstruction, or
improvement of a flood protection system (without
respect to the level of Federal investment or
participation)''; and
(B) in the second sentence--
(i) by striking ``construction of a flood
protection system'' and inserting
``construction, reconstruction, or improvement
of a flood protection system''; and
(ii) by inserting ``based on the present
value of the completed system'' after ``has
been expended''; and
(2) in subsection (f)--
(A) in the first sentence in the matter preceding
paragraph (1), by inserting ``(without respect to the
level of Federal investment or participation)'' before
the period at the end;
(B) in the third sentence in the matter preceding
paragraph (1), by inserting ``, whether coastal or
riverine,'' after ``special flood hazard''; and
(C) in paragraph (1), by striking ``a Federal
agency in consultation with the local project sponsor''
and inserting ``the entity or entities that own,
operate, maintain, or repair such system''.
(b) Regulations.--Not later than 90 days after the date of the
enactment of this Act, the Administrator of the Federal Emergency
Management Agency shall promulgate regulations to carry out the
amendments made by subsection (a). Section 5 may not be construed to
annul, alter, affect, authorize any waiver of, or establish any
exception to, the requirement under the preceding sentence.
(c) Implementation.--The Administrator of the Federal Emergency
Management Agency shall implement this section and the amendments made
by this section in a manner that will not materially weaken the
financial position of the national flood insurance program or increase
the risk of financial liability to Federal taxpayers.
SEC. 10. TREATMENT OF CERTAIN FLOOD PROTECTION PROJECTS.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C.
4015), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new subsection:
``(h) Treatment of Certain Flood Protection Projects.--
``(1) Inapplicability of mandatory purchase requirement;
premium rates.--Notwithstanding any other provision of law,
upon full completion, as designed, of a flood protection system
that was intended to provide flood protection with respect to a
covered area, such covered area--
``(A) shall not be considered to be an area having
special flood hazards for purposes of this Act or
subsections (a), (b), or (e) of section 102, or section
202(a) of the Flood Disaster Protection Act of 1973;
and
``(B) shall be eligible for flood insurance under
this Act, if and to the extent that such area is
eligible for such insurance under the other provisions
of this Act, at premium rates not exceeding those that
would be applicable under this section if the flood
protection system referred to in paragraph (2) for such
area had been completed and accredited as providing
protection from floods at the level that the system was
designed to provide (before construction,
reconstruction, or improvement of the system, as
applicable, began).
The flood insurance rate maps shall indicate, for each covered
area, the status of the area under subparagraphs (A) and (B).
``(2) Covered area.--For purposes of this subsection, a
covered area is an area that was intended to be protected by a
flood protection system--
``(A)(i) for which, as of April 15, 2010--
``(I) construction, reconstruction, or
improvement has not been completed;
``(II) adequate progress, within the
meaning of section 1307(e), has been made on
such construction, reconstruction, or
improvement; and
``(III) is in an area having special flood
hazards; or
``(ii) for which, as of such date--
``(I) construction, reconstruction, or
improvement has been completed;
``(II) a determination regarding
accreditation has not been made; and
``(III) is in an area having special flood
hazards;
``(B) that was designed to provide protection for
at least the 100-year frequency flood; and
``(C) that has been determined, pursuant to
waterflow data or other scientific information of a
Federal agency obtained after, or that has changed
since, commencement of construction, reconstruction, or
improvement, will not provide protection from floods at
the level referred to in subparagraph (B).''.
SEC. 11. NOTIFICATION TO HOMEOWNERS REGARDING MANDATORY PURCHASE
REQUIREMENT APPLICABILITY AND RATE PHASE-INS.
Section 201 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4105) is amended by adding at the end the following new subsection:
``(f) Annual Notification.--The Director, in consultation with
affected communities, shall establish and carry out a plan to notify
residents of areas having special flood hazards, on an annual basis--
``(1) that they reside in such an area;
``(2) of the geographical boundaries of such area;
``(3) of whether section 1308(h) of the National Flood
Insurance Act of 1968 applies to properties within such area;
and
``(4) of the provisions of section 102 requiring purchase
of flood insurance coverage for properties located in such an
area, including the date on which such provisions apply with
respect to such area, taking into consideration section 102(i);
and
``(5) of a general estimate of what similar homeowners in
similar areas typically pay for flood insurance coverage,
taking into consideration section 1308(g) of the National Flood
Insurance Act of 1968;''.
SEC. 12. COVERAGE FOR ADDITIONAL LIVING EXPENSES AND BUSINESS
INTERRUPTION.
Subsection (b) of section 1306 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4013) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5)--
(A) by inserting ``pursuant to paragraph (2), (3),
or (4)'' after ``any flood insurance coverage''; and
(B) by striking the period at the end and inserting
a semicolon; and
(3) by adding at the end the following new paragraphs:
``(6) in the case of any residential property, each renewal
or new contract for flood insurance coverage shall provide not
less than $1,000 aggregate liability per dwelling unit for any
necessary increases in living expenses incurred by the insured
when losses from a flood make the residence unfit to live in,
which coverage shall be available only at chargeable rates that
are not less than the estimated premium rates for such coverage
determined in accordance with section 1307(a)(1);
``(7) in the case of any residential property, optional
coverage for additional living expenses described in paragraph
(6) shall be made available to every insured upon renewal and
every applicant in excess of the limits provided in paragraph
(6) in such amounts and at such rates as the Director shall
establish, except that such chargeable rates shall not be less
than the estimated premium rates for such coverage determined
in accordance with section 1307(a)(1); and
``(8) in the case of any commercial property or other
residential property, including multifamily rental property,
optional coverage for losses resulting from any partial or
total interruption of the insured's business caused by damage
to, or loss of, such property from a flood shall be made
available to every insured upon renewal and every applicant,
except that--
``(A) the Director may provide such coverage under
such terms, conditions, and requirements as the
Director considers appropriate to meet the needs of
small businesses while complying with the requirement
under subparagraph (C); and
``(B) any such coverage shall be made available
only at chargeable rates that are not less than the
estimated premium rates for such coverage determined in
accordance with section 1307(a)(1).''.
SEC. 13. EXCEPTION TO WAITING PERIOD FOR EFFECTIVE DATE OF POLICIES.
Section 1306(c)(2)(A) of the National Flood Insurance Act of 1968
(42 U.S.C. 4013(c)(2)(A)) is amended by inserting before the semicolon
the following: ``or is in connection with the purchase or other
transfer of the property for which the coverage is provided (regardless
of whether a loan is involved in the purchase or transfer transaction),
but only when such initial purchase of coverage is made not later 30
days after such making, increasing, extension, or renewal of the loan
or not later than 30 days after such purchase or other transfer of the
property, as applicable''.
SEC. 14. MINIMUM DEDUCTIBLES FOR CLAIMS.
Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C.
4019) is amended--
(1) by striking ``The Director is'' and inserting the
following: ``(a) In General.--The Director is''; and
(2) by adding at the end the following:
``(b) Minimum Annual Deductibles.--
``(1) Pre-FIRM properties.--For any structure that is
covered by flood insurance under this title, and on which
construction or substantial improvement occurred on or before
December 31, 1974, or before the effective date of an initial
flood insurance rate map published by the Director under
section 1360 for the area in which such structure is located,
the minimum annual deductible for damage to or loss of such
structure shall be--
``(A) $1,500, if the flood insurance coverage for
such structure covers loss of, or physical damage to,
such structure in an amount equal to or less than
$100,000; and
``(B) $2,000, if the flood insurance coverage for
such structure covers loss of, or physical damage to,
such structure in an amount greater than $100,000.
``(2) Post-FIRM properties.--For any structure that is
covered by flood insurance under this title, and on which
construction or substantial improvement occurred after December
31, 1974, or after the effective date of an initial flood
insurance rate map published by the Director under section 1360
for the area in which such structure is located, the minimum
annual deductible for damage to or loss of such structure shall
be--
``(A) $750, if the flood insurance coverage for
such structure covers loss of, or physical damage to,
such structure in an amount equal to or less than
$100,000; and
``(B) $1,000, if the flood insurance coverage for
such structure covers loss of, or physical damage to,
such structure in an amount greater than $100,000.''.
SEC. 15. PAYMENT OF PREMIUMS IN INSTALLMENTS FOR LOW-INCOME
POLICYHOLDERS.
Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C.
4013) is amended by adding at the end the following new subsection:
``(d) Payment of Premiums in Installments for Low-income
Policyholders.--In addition to any other terms and conditions under
subsection (a), such regulations shall provide that, in the case of any
residential property that is owned by a family whose income level is at
or below 200 percent of the poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance with section
673 of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902))
applicable to the size of such family, or a family that has no adult
member who is employed, premiums for flood insurance coverage for such
property may be paid in monthly installments.''.
SEC. 16. ENFORCEMENT.
Section 102(f) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(f)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)(iii), by striking ``or'' at
the end;
(B) in subparagraph (B), by striking the period at
the end and inserting ``; or''; and
(C) by adding at the end the following new
subparagraph:
``(C) in connection with the making, increasing,
extending, servicing, or renewing of any loan,
requiring the purchase of flood insurance coverage
under the National Flood Insurance Act of 1968, or
purchasing such coverage pursuant to subsection (e)(2),
in an amount in excess of the minimum amount required
under subsections (a) and (b) of this section.'';
(2) in paragraph (5)--
(A) in the first sentence, by striking ``$350'' and
inserting ``$2,000''; and
(B) in the last sentence, by striking ``$100,000''
and inserting ``$1,000,000; except that such limitation
shall not apply to a regulated lending institution or
enterprise for a calendar year if, in any three (or
more) of the five calendar years immediately preceding
such calendar year, the total amount of penalties
assessed under this subsection against such lending
institution or enterprise was $1,000,000''; and
(3) in paragraph (6), by adding after the period at the end
the following: ``No penalty may be imposed under this
subsection on a regulated lending institution or enterprise
that has made a good faith effort to comply with the
requirements of the provisions referred to in paragraph (2) or
for any non-material violation of such requirements.''.
SEC. 17. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS INSURANCE.
The National Flood Insurance Act of 1968 is amended by inserting
after section 1308 (42 U.S.C. 4015) the following new section:
``SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS
INSURANCE.
``(a) In General.--The Director shall, upon entering into a
contract for flood insurance coverage under this title for any
property--
``(1) provide to the insured sufficient copies of the
notice developed pursuant to subsection (b); and
``(2) require the insured to provide a copy of the notice,
or otherwise provide notification of the information under
subsection (b) in the manner that the manager or landlord deems
most appropriate, to each such tenant and to each new tenant
upon commencement of such a tenancy.
``(b) Notice.--Notice to a tenant of a property in accordance with
this subsection is written notice that clearly informs a tenant--
``(1) whether the property is located in an area having
special flood hazards;
``(2) that flood insurance coverage is available under the
national flood insurance program under this title for contents
of the unit or structure leased by the tenant;
``(3) of the maximum amount of such coverage for contents
available under this title at that time; and
``(4) of where to obtain information regarding how to
obtain such coverage, including a telephone number, mailing
address, and Internet site of the Director where such
information is available.''.
SEC. 18. FLOOD INSURANCE OUTREACH.
Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C.
4011 et seq.), as amended by the preceding provisions of this Act, is
further amended by adding at the end the following new section:
``SEC. 1326. GRANTS FOR OUTREACH TO PROPERTY OWNERS AND RENTERS.
``(a) In General.--The Director may, to the extent amounts are made
available pursuant to subsection (h), make grants to local governmental
agencies responsible for floodplain management activities (including
such agencies of Indians tribes, as such term is defined in section 4
of the Native American Housing Assistance and Self-Determination Act of
1996 (25 U.S.C. 4103)) in communities that participate in the national
flood insurance program under this title, for use by such agencies to
carry out outreach activities to encourage and facilitate the purchase
of flood insurance protection under this Act by owners and renters of
properties in such communities and to promote educational activities
that increase awareness of flood risk reduction.
``(b) Outreach Activities.--Amounts from a grant under this section
shall be used only for activities designed to--
``(1) identify owners and renters of properties in
communities that participate in the national flood insurance
program, including owners of residential and commercial
properties;
``(2) notify such owners and renters when their properties
become included in, or when they are excluded from, an area
having special flood hazards and the effect of such inclusion
or exclusion on the applicability of the mandatory flood
insurance purchase requirement under section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a) to such
properties;
``(3) educate such owners and renters regarding the flood
risk and reduction of this risk in their community, including
the continued flood risks to areas that are no longer subject
to the flood insurance mandatory purchase requirement;
``(4) educate such owners and renters regarding the
benefits and costs of maintaining or acquiring flood insurance,
including, where applicable, lower-cost preferred risk policies
under this title for such properties and the contents of such
properties; and
``(5) encouraging such owners and renters to maintain or
acquire such coverage.
``(c) Cost Sharing Requirement.--
``(1) In general.--In any fiscal year, the Director may not
provide a grant under this section to a local governmental
agency in an amount exceeding 3 times the amount that the
agency certifies, as the Director shall require, that the
agency will contribute from non-Federal funds to be used with
grant amounts only for carrying out activities described in
subsection (b).
``(2) Non-federal funds.--For purposes of this subsection,
the term `non-Federal funds' includes State or local government
agency amounts, in-kind contributions, any salary paid to staff
to carry out the eligible activities of the grant recipient,
the value of the time and services contributed by volunteers to
carry out such services (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.
``(d) Administrative Cost Limitation.--Notwithstanding subsection
(b), the Director may use not more than 5 percent of amounts made
available under subsection (g) to cover salaries, expenses, and other
administrative costs incurred by the Director in making grants and
provide assistance under this section.
``(e) Application and Selection.--
``(1) In general.--The Director shall provide for local
governmental agencies described in subsection (a) to submit
applications for grants under this section and for competitive
selection, based on criteria established by the Director, of
agencies submitting such applications to receive such grants.
``(2) Selection considerations.--In selecting applications
of local government agencies to receive grants under paragraph
(1), the Director shall consider--
``(A) the existence of a cooperative technical
partner agreement between the local governmental agency
and the Federal Emergency Management Agency;
``(B) the history of flood losses in the relevant
area that have occurred to properties, both inside and
outside the special flood hazards zones, which are not
covered by flood insurance coverage;
``(C) the estimated percentage of high-risk
properties located in the relevant area that are not
covered by flood insurance;
``(D) demonstrated success of the local
governmental agency in generating voluntary purchase of
flood insurance; and
``(E) demonstrated technical capacity of the local
governmental agency for outreach to individual property
owners.
``(f) Direct Outreach by FEMA.--In each fiscal year that amounts
for grants are made available pursuant to subsection (h), the Director
may use not more than 50 percent of such amounts to carry out, and to
enter into contracts with other entities to carry out, activities
described in subsection (b) in areas that the Director determines have
the most immediate need for such activities.
``(g) Reporting.--Each local government agency that receives a
grant under this section, and each entity that receives amounts
pursuant to subsection (f), shall submit a report to the Director, not
later than 12 months after such amounts are first received, which shall
include such information as the Director considers appropriate to
describe the activities conducted using such amounts and the effect of
such activities on the retention or acquisition of flood insurance
coverage.
``(h) Authorization of Appropriations.--There is authorized to be
appropriated for grants under this section $50,000,000 for each of
fiscal years 2011 through 2015.''.
SEC. 19. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW IN RESPA
GOOD FAITH ESTIMATE.
Subsection (c) of section 5 of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by adding at the
end the following new sentence: ``Each such good faith estimate shall
include the following conspicuous statements and information: (1) that
flood insurance coverage for residential real estate is generally
available under the national flood insurance program whether or not the
real estate is located in an area having special flood hazards and
that, to obtain such coverage, a home owner or purchaser should contact
the national flood insurance program; (2) a telephone number and a
location on the Internet by which a home owner or purchaser can contact
the national flood insurance program; and (3) that the escrowing of
flood insurance payments is required for many loans under section
102(d) of the Flood Disaster Protection Act of 1973, and may be a
convenient and available option with respect to other loans.''.
SEC. 20. AUTHORIZATION OF ADDITIONAL FEMA STAFF.
Notwithstanding any other provision of law, the Director of the
Federal Emergency Management Agency may employ such additional staff as
may be necessary to carry out all of the responsibilities of the
Director pursuant to this Act and the amendments made by this Act.
There are authorized to be appropriated to Director such sums as may be
necessary for costs of employing such additional staff.
SEC. 21. PLAN TO VERIFY MAINTENANCE OF FLOOD INSURANCE ON MISSISSIPPI
AND LOUISIANA PROPERTIES RECEIVING EMERGENCY SUPPLEMENTAL
FUNDS.
The Secretary of Housing and Urban Development and the Director of
the Federal Emergency Management Agency shall jointly develop and
implement a plan to verify that persons receiving funds under the
Homeowner Grant Assistance Program of the State of Mississippi or the
Road Home Program of the State of Louisiana from amounts allocated to
the State of Mississippi or the State of Louisiana, respectively, from
the Community development fund under the Emergency Supplemental
Appropriations Act to Address Hurricanes in the Gulf of Mexico and
Pandemic Influenza, 2006 (Public Law 109-148) are maintaining flood
insurance on the property for which such persons receive such funds as
required by each such Program.
SEC. 22. FLOOD INSURANCE ADVOCATE.
Chapter II of the National Flood Insurance Act of 1968 is amended
by inserting after section 1330 (42 U.S.C. 4041) the following new
section:
``SEC. 1330A. OFFICE OF THE FLOOD INSURANCE ADVOCATE.
``(a) Establishment of Position.--
``(1) In general.--There shall be in the Federal Emergency
Management Agency an Office of the Flood Insurance Advocate
which shall be headed by the National Flood Insurance Advocate.
The National Flood Insurance Advocate shall report directly to
the Director and shall, to the extent amounts are provided
pursuant to subsection (f), be compensated at the same rate as
the highest rate of basic pay established for the Senior
Executive Service under section 5382 of title 5, United States
Code, or, if the Director so determines, at a rate fixed under
section 9503 of such title.
``(2) Appointment.--The National Flood Insurance Advocate
shall be appointed by the Director, and without regard to the
provisions of title 5, United States Code, relating to
appointments in the competitive service or the Senior Executive
Service.
``(3) Qualifications.--An individual appointed under
paragraph (2) shall have a background in customer service as
well as insurance.
``(4) Staff.--To the extent amounts are provided pursuant
to subsection (f), the National Flood Insurance Advocate may
employ such personnel as may be necessary to carry out the
duties of the Office.
``(b) Functions of Office.--
``(1) In general.--It shall be the function of the Office
of the Flood Insurance Advocate to--
``(A) assist insureds under the national flood
insurance program in resolving problems with the
Federal Emergency Management Agency relating to such
program;
``(B) identify areas in which such insureds have
problems in dealings with the Agency relating to such
program;
``(C) identify potential legislative,
administrative, or regulatory changes which may be
appropriate to mitigate such problems; and
``(D) assist communities and homeowners with
interpreting, implementing, and appealing floodplain
maps and floodplain map determinations.
``(2) Annual reports.--
``(A) Activities.--Not later than December 31 of
each calendar year, the National Flood Insurance
Advocate shall report to the Committee on Financial
Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate on the activities of the Office of the Flood
Insurance Advocate during the fiscal year ending during
such calendar year. Any such report shall contain full
and substantive analysis, in addition to statistical
information, and shall--
``(i) identify the initiatives the Office
of the Flood Insurance Advocate has taken on
improving services for insureds under the
national flood insurance program and
responsiveness of the Federal Emergency
Management Agency with respect to such program;
``(ii) identify areas of the law or
regulations relating to the national flood
insurance program that impose significant
compliance burdens on such insureds or the
Federal Emergency Management Agency, including
specific recommendations for remedying these
problems; and
``(iii) include such other information as
the National Flood Insurance Advocate may deem
advisable.
``(B) Direct submission of report.--Each report
required under this paragraph shall be provided
directly to the committees identified in subparagraph
(A) without any prior review or comment from the
Director, the Secretary of Homeland Security, or any
other officer or employee of the Federal Emergency
Management Agency or the Department of Homeland
Security, or the Office of Management and Budget.
``(c) Funding.--Pursuant to section 1310(a)(4), the Director may
use amounts from the National Flood Insurance Fund to fund the
activities of the Office of the Flood Advocate in each of fiscal years
2011 through 2016, except that the amount so used in each such fiscal
year may not exceed $5,000,000 and shall remain available until
expended. Notwithstanding any other provision of this title, amounts
made available pursuant to this subsection shall not be subject to
offsetting collections through premium rates for flood insurance
coverage under this title.''.
SEC. 23. ELIGIBILITY OF PROPERTY DEMOLITION AND REBUILDING UNDER FLOOD
MITIGATION ASSISTANCE PROGRAM.
Section 1366(e)(5)(B) of the National Flood Insurance Act of 1968
(42 U.S.C. 4104c(e)(5)(B)) is amended by striking ``or floodproofing''
and inserting ``floodproofing, or demolition and rebuilding''.
SEC. 24. STUDY REGARDING MANDATORY PURCHASE REQUIREMENT FOR NON-
FEDERALLY RELATED LOANS.
(a) In General.--The Comptroller General shall conduct a study to
assess the impact, effectiveness, and feasibility of, and basis under
the Constitution of the United States for, amending the provisions of
the Flood Disaster Protection Act of 1973 regarding the properties that
are subject to the mandatory flood insurance coverage purchase
requirements under such Act to extend such requirements to any property
that is located in any area having special flood hazards and which
secures the repayment of a loan that is not described in paragraph (1),
(2), or (3) of section 102(b) of such Act, and shall determine how best
to administer and enforce such a requirement, taking into consideration
other insurance purchase requirements under Federal and State law.
(b) Report.--The Comptroller General shall submit a report to the
Congress regarding the results and conclusions of the study under
subsection (a) not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act.
SEC. 25. STUDY OF METHODS TO INCREASE FLOOD INSURANCE PROGRAM
PARTICIPATION BY LOW-INCOME FAMILIES.
(a) In General.--The Comptroller General of the United States shall
conduct a study to identify and analyze potential methods, practices,
and incentives that would increase the extent to which low-income
families (as such term is defined in section 3(b) of the United States
Housing Act of 1937 (42 U.S.C. 1437a(b))) that own residential
properties located within areas having special flood hazards purchase
flood insurance coverage for such properties under the national flood
insurance program. In conducting the study, the Comptroller General
shall analyze the effectiveness and costs of the various methods,
practices, and incentives identified, including their effects on the
national flood insurance program.
(b) Report.--The Comptroller General shall submit to the Congress a
report setting forth the conclusions of the study under this section
not later than 12 months after the date of the enactment of this Act.
SEC. 26. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN MANAGEMENT
CRITERIA.
Not later than the expiration of the 6-month period beginning on
the date of the enactment of this Act, the Administrator of the Federal
Emergency Management Agency shall conduct a study and submit a report
to the Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the Senate
regarding the impact, effectiveness, and feasibility of amending
section 1361 of the National Flood Insurance Act of 1968 (42 U.S.C.
4102) to include widely used and nationally recognized building codes
as part of the floodplain management criteria developed under such
section, and shall determine--
(1) the regulatory, financial, and economic impacts of such
a building code requirement on homeowners, States and local
communities, local land use policies, and the Federal Emergency
Management Agency;
(2) the resources required of State and local communities
to administer and enforce such a building code requirement;
(3) the effectiveness of such a building code requirement
in reducing flood-related damage to buildings and contents;
(4) the impact of such a building code requirement on the
actuarial soundness of the National Flood Insurance Program;
(5) the effectiveness of nationally recognized codes in
allowing innovative materials and systems for flood-resistant
construction; and
(6) the feasibility and effectiveness of providing an
incentive in lower premium rates for flood insurance coverage
under such Act for structures meeting whichever of such widely
used and nationally recognized building code or any applicable
local building code provides greater protection from flood
damage.
SEC. 27. STUDY ON REPAYING FLOOD INSURANCE DEBT.
Not later than the expiration of the 6-month period beginning on
the date of the enactment of this Act, the Administrator of the Federal
Emergency Management Agency shall submit a report to the Congress
setting forth a plan for repaying within 10 years all amounts,
including any amounts previously borrowed but not yet repaid, owed
pursuant to clause (2) of subsection (a) of section 1309 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)(2)).
SEC. 28. STUDY REGARDING IMPACT OF RATE INCREASES ON PRE-FIRM
PROPERTIES.
(a) In General.--The Comptroller General of the United States shall
conduct a study to assess the impacts of implementing provisions
regarding pre-FIRM properties (as such term is defined in section
578(b) of the National Flood Insurance Reform Act of 1994 (42 U.S.C.
4014)), including the impact on the program participation rate among
owners, renters, and tenants of non-primary residences or commercial
nonresidential properties. In conducting the study, the Comptroller
General shall analyze the cost effectiveness and effect on local
government tax base of various options, including an option of
implementing such provisions on the severe repetitive loss properties
only.
(b) Report.--The Comptroller General shall submit a report to
Congress regarding the results and conclusions of the study under
subsection (a) not later than the expiration of the 9-month period
beginning on the date of enactment of this Act.
SEC. 29. STUDY OF EFFECTS OF ACT.
(a) Study.--The Administrator of the Federal Emergency Management
Agency shall conduct a study to identify and assess the impacts,
including short-term and long-term impacts, of this Act and the
amendments made by this Act on the financial soundness of the national
flood insurance program.
(b) Report.--Not later than 12 months after the date of the
enactment of this Act, the Administrator shall submit a report to the
Congress setting forth the results and conclusions of study under
subsection (a), which shall include specific recommendations for
actions to mitigate against any negative financial impacts resulting
from this Act and the amendments made by this Act that could increase
the debt of the national flood insurance program.
SEC. 30. RULEMAKING.
(a) Interim Final Rule.--The Administrator of the Federal Emergency
Management Agency shall issue an interim final rule as a temporary
regulation implementing this Act and the amendments made by this Act as
soon as practicable after the date of the enactment of this Act,
without regard to the provisions of chapter 5 of title 5, United States
Code. All regulations prescribed under the authority of this subsection
that are not earlier superseded by final regulations shall expire not
later than one year after the date of the enactment of this Act.
(b) Initiation of Rulemaking.--The Administrator of the Federal
Emergency Management Agency may initiate a rulemaking to implement this
Act and the amendments made by this Act as soon as practicable after
the date of the enactment of this Act. The final rule issued pursuant
to such rulemaking may supersede the interim final rule promulgated
under subsection (a).
Union Calendar No. 282
111th CONGRESS
2d Session
H. R. 5114
[Report No. 111-495]
_______________________________________________________________________
A BILL
To extend the authorization for the national flood insurance program,
to identify priorities essential to reform and ongoing stable
functioning of the program, and for other purposes.
_______________________________________________________________________
May 26, 2010
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed