Calendar No. 501
109th CONGRESS
2d Session
H. R. 4973
IN THE SENATE OF THE UNITED STATES
June 28, 2006
Received; read twice and placed on the calendar
AN ACT
To restore the financial solvency of the national flood insurance
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 and
Modernization Act of 2006'.
(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. Study regarding status of pre-FIRM properties and mandatory purchase
requirement for natural 100-year floodplain and non-Federally related
loans.
Sec. 4. Phase-in of actuarial rates for nonresidential properties and
non-primary residences.
Sec. 5. Waiting period for effective date of policies.
Sec. 7. Maximum coverage limits.
Sec. 8. Coverage for additional living expenses, basement improvements,
business interruption, and replacement cost of contents.
Sec. 9. Increase in annual limitation on premium increases.
Sec. 10. Increase in borrowing authority.
Sec. 11. FEMA participation in State disaster claims mediation programs.
Sec. 12. FEMA reports on financial status of insurance program.
Sec. 13. Extension of pilot program for mitigation of severe repetitive
loss properties.
Sec. 14. Notice of availability of flood insurance and escrow in RESPA
good faith estimate.
Sec. 15. Reiteration of FEMA responsibilities under 2004 Reform Act.
Sec. 16. Updating of flood maps and elevation standards.
Sec. 17. Notification and appeal of map changes; notification of establishment
of flood elevations.
Sec. 18. National levee inventory.
Sec. 19. Clarification of replacement cost provisions, forms, and policy
language.
Sec. 20. Authorization of additional FEMA staff.
Sec. 21. Investigation of write-your-own insurers' adjustment of claims
relating to Hurricane Katrina.
Sec. 22. Eligibility of property demolition and rebuilding for mitigation
assistance program.
Sec. 23. Sampling methods for quality assurance.
Sec. 24. Extension of deadline for filing proof of loss.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings- The Congress finds that--
(1) flooding has been shown to occur in all 50 States;
(2) the aggregate amount of the flood insurance claims resulting from
Hurricane Katrina, Hurricane Rita, and other recent events has exceeded
the aggregate amount of all claims previously paid in the history of the
national flood insurance program, requiring a significant increase in
the program's borrowing authority;
(3) flood insurance policyholders have a legitimate expectation that they
will receive fair and timely compensation for losses covered under their
policies;
(4) substantial flooding has occurred, and will likely occur again, outside
the areas designated by the Federal Emergency Management Agency as flood
hazard areas;
(5) properties located in low- to moderate-risk areas are eligible to
purchase flood insurance policies with premiums as low as $112 a year;
(6) about 450,000 vacation homes, second homes, and commercial properties
are subsidized and are not paying actuarially sound rates for flood insurance;
(7) phasing out subsidies currently extended to vacation homes, second
homes, and commercial properties would result in estimated average savings
to the taxpayers of the United States and the national flood insurance
program of $335,000,000 each year;
(8) the maximum coverage limits for flood insurance policies should be
increased to reflect inflation and the increased cost of housing;
(9) significant reforms to the national flood insurance program required
in the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004
have yet to be implemented; and
(10) in addition to reforms required in the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004, the national flood insurance program
requires a modernized and updated administrative model to ensure that
the program is solvent and the people of the United States have continued
access to flood insurance.
(b) Purposes- The purposes of this Act are--
(1) to protect the integrity of the national flood insurance program by
fully funding existing legal obligations expected by existing policyholders
who have paid policy premiums in return for flood insurance coverage;
(2) to increase incentives for homeowners and communities to participate
in the national flood insurance program and to improve oversight to ensure
full participation in the program for owners of properties for which such
participation is mandatory; and
(3) to increase awareness of homeowners of flood risks and improve the
quality of information regarding such risks provided to homeowners.
SEC. 3. STUDY REGARDING STATUS OF PRE-FIRM PROPERTIES AND MANDATORY PURCHASE
REQUIREMENT FOR NATURAL 100-YEAR FLOODPLAIN AND NON-FEDERALLY RELATED LOANS.
(a) In General- The Comptroller General shall conduct a study as follows:
(1) PRE-FIRM PROPERTIES- The study shall determine the status of the national
flood insurance program, as of the date of the enactment of this Act,
with respect to the provision of flood insurance coverage for 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 note)), which shall
include determinations of--
(A) the number of pre-FIRM properties for which coverage is provided
and the extent of such coverage;
(B) the cost of providing coverage for such pre-FIRM properties to the
national flood insurance program;
(C) the anticipated rate at which such pre-FIRM properties will cease
to be covered under the program;
(D) the effects that implementation of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004 will have on the national flood insurance
program generally and on coverage of pre-FIRM properties under the program;
and
(E) the extent to which eligibility standards for pre-FIRM properties
were inconsistent and resulted in disparities in coverage among such
properties.
(2) MANDATORY PURCHASE REQUIREMENT FOR NATURAL 100-YEAR FLOODPLAIN- The
study shall assess the impact, effectiveness, and feasibility of 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 properties
located in any area that would be designated as an area having special
flood hazards but for the existence of a structural flood protection system,
and shall determine--
(A) the regulatory, financial and economic impacts of extending such
mandatory purchase requirements on the costs of homeownership, the actuarial
soundness of the national flood insurance program, the Federal Emergency
Management Agency, local communities, insurance companies, and local
land use;
(B) the effectiveness of extending such mandatory purchase requirements
in protecting homeowners from financial loss and in protecting the financial
soundness of the national flood insurance program; and
(C) any impact on lenders of complying with or enforcing such extended
mandatory requirements.
(3) MANDATORY PURCHASE REQUIREMENT FOR NON-FEDERALLY RELATED LOANS- The
study shall 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 this subsection
not later than the expiration of the 6-month period beginning on the date
of the enactment of this Act.
SEC. 4. 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 (4); and
(2) by inserting after paragraph (1) the following new paragraphs:
`(2) NONRESIDENTIAL PROPERTIES- Any nonresidential property.
`(3) NON-PRIMARY RESIDENCES- Any residential property that is not the
primary residence of an individual.
`(4) RECENTLY PURCHASED PRE-FIRM PROPERTIES- Any 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 the enactment of the Flood Insurance
Reform and Modernization Act of 2006.'.
(b) Technical Amendments- Section 1308 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4015) is amended--
(A) in the matter preceding paragraph (1), by striking `Subject only
to the limitations provided under paragraphs (1) and (2), the' and inserting
`The'; 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 (4)'.
(c) Effective Date and Transition-
(1) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall
apply beginning on the submission to the Congress, by the Director of
the Federal Emergency Management Agency, of the report required under
section 16(b)(2), except as provided in paragraph (2) of this subsection.
(2) TRANSITION- 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, on 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).
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) by 15 percent (or such lesser amount
as may be necessary so that the chargeable rate does not exceed such applicable
estimated risk premium rate) 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. The provisions
of paragraphs (2), (3), and (4) of such section 1308(c) shall apply to
such a property upon the accomplishment of such increase and thereafter.
SEC. 5. WAITING PERIOD FOR EFFECTIVE DATE OF POLICIES.
(a) Reduction- Section 1306(c)(1) of the National Flood Insurance Act of
1968 (42 U.S.C. 4013(c)(1)) is amended by striking `30-day' and inserting
`15-day'.
(b) Exception- 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).
SEC. 6. ENFORCEMENT.
Section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f))
is amended--
(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
(2) 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. 7. 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), by striking `$500,000' each place such term appears
and inserting `$670,000'.
SEC. 8. COVERAGE FOR ADDITIONAL LIVING EXPENSES, BASEMENT IMPROVEMENTS,
BUSINESS INTERRUPTION, AND REPLACEMENT COST OF CONTENTS.
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;
(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);
`(8) in the case of any residential property, optional coverage for losses,
resulting from floods, to improvements and personal property located in
basements, crawl spaces, and other enclosed areas under buildings that
are not covered by primary flood insurance coverage under this title,
shall be made available to every insured upon renewal and every applicant,
except that 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);
`(9) in the case of any commercial 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) for purposes of such coverage, losses shall be determined based
on the profits the covered business would have earned, based on previous
financial records, had the flood not occurred; and
`(B) such coverage shall be made available only at chargeable rates
that are not less than the estimated premium rates for such coverage
determined in accordance with section 1307(a)(1); and
`(10) in the case of any residential property and any commercial property,
optional coverage for the full replacement costs of any contents related
to the structure that exceed the limits of coverage otherwise provided
in this subsection shall be made available to every insured upon renewal
and every applicant, except that 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. 9. 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 `15 percent'.
SEC. 10. INCREASE IN BORROWING AUTHORITY.
(a) Borrowing Authority- The first sentence of subsection (a) of section
1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)), as
amended by the National Flood Insurance Program Further Enhanced Borrowing
Authority Act of 2005 (Public Law 109-106; 119 Stat. 2288), is amended by
striking `$20,775,000,000' and inserting `$25,000,000,000'.
(b) FEMA Report- Not later than the expiration of the 6-month period beginning
on the date of the enactment of this Act, the Director of the Federal Emergency
Management Agency shall submit a report to the Congress setting forth a
plan for repaying any amounts borrowed pursuant to increase in borrowing
authority authorized under the amendments made by subsection (a).
SEC. 11. FEMA PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION PROGRAMS.
The National Flood Insurance Act of 1968 is amended by inserting after section
1313 (42 U.S.C. 4020) the following new section:
`SEC. 1314. FEMA PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION PROGRAMS.
`(a) Requirement to Participate- In the case of the occurrence of a natural
catastrophe that may have resulted in flood damage covered by insurance
made available under the National Flood Insurance Program and a loss covered
by personal lines residential property insurance policy, upon request made
by the insurance commissioner of a State (or such other official responsible
for regulating the business of insurance in the State) for the participation
of representatives of the Director in a program sponsored by such State
for nonbinding mediation of insurance claims resulting from a natural catastrophe,
the Director shall cause such representatives to participate in such State
program, when claims under the national flood insurance program are involved,
to expedite settlement of flood damage claims resulting from such catastrophe.'.
`(b) Extent of Participation- Participation by representatives of the Director
required under subsection (a) with respect to flood damage claims resulting
from a natural catastrophe shall include--
`(1) providing adjusters certified for purposes of the national flood
insurance program who are authorized to settle claims against such program
resulting from such catastrophe in amounts up to the limits of policies
under such program;
`(2) requiring such adjusters to attend State-sponsored mediation meetings
regarding flood insurance claims resulting from such catastrophe at times
and places as may be arranged by the State;
`(3) participating in good-faith negotiations toward the settlement of
such claims with policyholders of coverage made available under the national
flood insurance program; and
`(4) finalizing the settlement of such claims on behalf of the national
flood insurance program with such policyholders.
`(c) Coordination- Representatives of the Director who participate pursuant
to this section in a State-sponsored mediation program with respect to a
natural catastrophe shall at all times coordinate their activities with
insurance officials of the State and representatives of insurers for the
purpose of consolidating and expediting the settlement of claims under the
national flood insurance program resulting from such catastrophe at the
earliest possible time.
`(d) Mediation Proceedings and Privileged Documents- As a condition of the
participation of Representatives of the Director pursuant to this section
in State-sponsored mediation, all statements made and documents produced
pursuant to such mediation involving representatives of the Director shall
be deemed privileged and confidential settlement negotiations made in anticipation
of litigation.
`(e) Effect of Participation on Liability, Right, and Obligations- Participation
of Representatives of the Director pursuant to this section in State-sponsored
mediation shall not affect or expand the liability of any party in contract
or in tort, nor shall it affect the rights or obligations of the parties
as provided in the Standard Flood Insurance Policy under the national flood
insurance program, regulations of the Federal Emergency Management Agency,
this Act, or Federal common law.
`(f) Exclusive Federal Jurisdiction- Participation of Representatives of
the Director pursuant to this section in State-sponsored mediation shall
not alter, change or modify the original exclusive jurisdiction of United
States courts as provided in this Act.
`(g) Cost Limitation- Nothing in this section shall be construed to require
the Director or representatives of the Director to pay additional mediation
fees relating to flood claims associated with a State-sponsored mediation
program in which representatives of the Director participate.
`(h) Exception- In the case of the occurrence of a natural catastrophe that
results in flood damage claims under the national flood insurance program
and does not result in any loss covered by a personal lines residential
property insurance policy--
`(1) this section shall not apply; and
`(2) the provisions of the Standard Flood Insurance Policy under the national
flood insurance program and the appeals process established pursuant to
section 205 of the Bunning-Bereueter-Blumenauer Flood Insurance Reform
Act of 2004 (Public Law 108-264; 118 Stat. 726) and regulations issued
pursuant to such section shall apply exclusively.
`(i) Representatives of Director- For purposes of this section, the term
`representatives of the Director' means representatives of the national
flood insurance program who participate in the appeals process established
pursuant to section 205 of the Bunning-Bereueter-Blumenauer Flood Insurance
Reform Act of 2004 (Public Law 108-264; 118 Stat. 726) and regulations issued
pursuant to such section.'.
SEC. 12. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE PROGRAM.
Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 4027)
is amended--
(1) in the section heading, by striking `REPORT TO THE PRESIDENT' and
inserting `REPORTS';
(2) in subsection (a), by striking `In General' and inserting `Biennial
Report to President'; and
(3) by adding at the end the following new subsection:
`(c) Semiannual Reports to Congress on Financial Status- Not later than
June 30 and December 31 of each year, the Director shall submit a report
to the Congress regarding the financial status of the national flood insurance
program under this title. Each such report shall describe the financial
status of the National Flood Insurance Fund and current and projected levels
of claims, premium receipts, expenses, and borrowing under the program.'.
SEC. 13. 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 as follows:
(1) FUNDING- In subsection (k)(1), by striking `and 2009' and inserting
`2009, 2010, and 2011'.
(2) TERMINATION- In subsection (l), by striking `September 30, 2009' and
inserting `September 30, 2011'.
SEC. 14. 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: (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 a property insurance agent, broker, or company; and (2) 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. 15. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 REFORM ACT.
(a) Appeals Process- As directed in section 205 of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note), the Director of
the Federal Emergency Management Agency is again directed to, not later
than 90 days after the date of the enactment of this Act, establish an appeals
process through which holders of a flood insurance policy may appeal the
decisions, with respect to claims, proofs of loss, and loss estimates relating
to such flood insurance policy as required by such section.
(b) Minimum Training and Education Requirements- The Director of the Federal
Emergency Management Agency is directed to continue to work with the insurance
industry, State insurance regulators, and other interested parties to implement
the minimum training and education standards for all insurance agents who
sell flood insurance policies that were established by the Director under
the notice published September 1, 2005 (70 Fed. Reg. 52117) pursuant to
section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act
of 2004 (42 U.S.C. 4011 note).
(c) Report- Not later than the expiration of the 6-month period beginning
on the date of the enactment of this Act, the Director of the Federal Emergency
Management Agency shall submit a report to the Congress describing the implementation
of each provision of the Bunning-Bereuter-Blumenauer Flood Insurance Reform
Act of 2004 (Public Law 108-264) and identifying each regulation, order,
notice, and other material issued by the Director in implementing each such
provision.
SEC. 16. UPDATING OF FLOOD MAPS AND ELEVATION STANDARDS.
(a) Flood Mapping Program- Section 1360 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4101) is amended by adding at the end the following
new subsection:
`(k) Program to Review, Update, and Maintain Flood Insurance Program Maps-
`(1) IN GENERAL- The Director, in coordination with the Technical Mapping
Advisory Council established pursuant to section 576 of the National Flood
Insurance Reform Act of 1994 (42 U.S.C. 4101 note) and section 16(c) of
the Flood Insurance Reform and Modernization Act of 2006, shall establish
a program under which the Director shall review, update, and maintain
national flood insurance program rate maps in accordance with this subsection.
`(A) COVERED AREAS- Each map updated under this subsection shall include
a depiction of--
`(i) the 500-year floodplain;
`(ii) areas that could be inundated as a result of the failure of
a levee, as determined by the Director; and
`(iii) areas that could be inundated as a result of the failure of
a dam, as identified under the National Dam Safety Program Act (33
U.S.C. 467 et seq.).
`(B) OTHER INCLUSIONS- In updating maps under this subsection, the Director
may include--
`(i) any relevant information on coastal inundation from--
`(I) an applicable inundation map of the Corps of Engineers; and
`(II) data of the National Oceanic and Atmospheric Administration
relating to storm surge modeling;
`(ii) any relevant information of the Geographical Service on stream
flows, watershed characteristics, and topography that is useful in
the identification of flood hazard areas, as determined by the Director;
and
`(iii) a description of any hazard that might impact flooding, including,
as determined by the Director--
`(I) land subsidence and coastal erosion areas;
`(II) sediment flow areas;
`(V) areas on coasts and inland that are subject to the failure
of structural protective works, such as levees, dams, and floodwalls.
`(3) STANDARDS- In updating and maintaining maps under this subsection,
the Director shall establish standards to--
`(A) ensure that maps are adequate for--
`(i) flood risk determinations; and
`(ii) use by State and local governments in managing development to
reduce the risk of flooding;
`(B) facilitate the Director, in conjunction with State and local governments,
to identify and use consistent methods of data collection and analysis
in developing maps for communities with similar flood risks, as determined
by the Director; and
`(C) ensure that emerging weather forecasting technology is used, where
practicable, in flood map evaluations and the identification of potential
risk areas.
`(4) HURRICANES KATRINA AND RITA MAPPING PRIORITY- In updating and maintaining
maps under this subsection, the Director shall--
`(A) give priority to the updating and maintenance of maps of coastal
areas affected by Hurricane Katrina or Hurricane Rita to provide guidance
with respect to hurricane recovery efforts; and
`(B) use the process of updating and maintaining maps under subparagraph
(A) as a model for updating and maintaining other maps.
`(5) EDUCATION PROGRAM- The Director shall, after each update to a flood
insurance program rate map, in consultation with the chief executive officer
of each community affected by the update, conduct a program to educate
each such community about the update to the flood insurance program rate
map and the effects of the update.
`(6) ANNUAL REPORT- Not later than June 30 of each year, the Director
shall submit a report to the Congress describing, for the preceding 12-month
period, the activities of the Director under the program under this section
and the reviews and updates of flood insurance program rate maps conducted
under the program. Each such annual report shall contain the most recent
report of the Technical Mapping Advisory Council pursuant to section 576(c)(3)
of the National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note).
`(7) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated
to the Director to carry out this subsection $300,000,000 for each of
fiscal years 2007 through 2012.'.
(b) One-Time Review and Updating of All Flood Zones and Annual Map Modernization
Reports-
(1) REQUIRED REVISION- The Director of the Federal Emergency Management
Agency shall, as soon as possible after the date of the enactment of this
Act, conduct a review of all floodplain areas and flood-risk zones identified,
delineated, or established pursuant to such section 1360 and shall revise
and update all such areas and zones. The revisions and updating under
this paragraph shall not be subject to the requirements of section 1360(k)
of the National Flood Insurance Act of 1968 (as added by subsection (a)
of this section).
(2) CERTIFICATION OF COMPLETION- Upon completing the review, revision,
and updating required under paragraph (1), the Director shall submit to
the Congress a report certifying such completion.
(3) ANNUAL REPORTS- During the period that ends upon certification under
paragraph (2) of this subsection by the Director, the Director shall include
in the annual report required under section 1360(k)(5) of the National
Flood Insurance Act of 1968 (as added by subsection (a) of this section)
a description of the extent to which the review and updating required
under paragraph (1) of this subsection has been completed.
(c) Reestablishment of Technical Mapping Advisory Council-
(1) REESTABLISHMENT- There is reestablished the Technical Mapping Advisory
Council, in accordance with this subsection and section 576 of the National
Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note).
(2) MEMBERSHIP- Paragraph (1) of section 576(b) of the National Flood
Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is amended--
(A) by redesignating subparagraphs (E), (F), (G), (H), (I), and (J)
as subparagraphs (F), (G), (H), (K), (M), and (N), respectively;
(B) by inserting after subparagraph (D) the following new subparagraph:
`(E) a representative of the Corps of Engineers of the United States
Army;';
(C) by inserting after subparagraph (H) (as so redesignated by subparagraph
(A) of this paragraph) the following new subparagraphs:
`(I) a representative of local or regional flood and stormwater agencies;
`(J) a representative of State geographic information coordinators;';
and
(D) by inserting after subparagraph (K) (as so redesignated by subparagraph
(A) of this paragraph) the following new subparagraph:
`(L) a representative of flood insurance servicing companies;'.
(3) APPOINTMENT- The Director of the Federal Emergency Management Agency,
or the Director's designee, shall take action as soon as possible after
the date of the enactment of this Act to appoint the members of the Technical
Mapping Advisory Council pursuant to section 576(b)(1) of the National
Flood Insurance Reform Act of 1994, as amended by paragraph (2) of this
subsection.
(4) DUTIES- Subsection (c) of section 576 of the National Flood Insurance
Reform Act of 1994 (42 U.S.C. 4101 note) is amended to read as follows:
`(c) Duties- The Council shall--
`(1) make recommendations to the Director for improvements to the flood
map modernization program under section 1360(k) of the National Flood
Insurance Act of 1968 (42 U.S.C. 41010(k));
`(2) make recommendations to the Director for maintaining a modernized
inventory of flood hazard maps and information; and
`(3) submit an annual report to the Director that contains a description
of the activities and recommendations of the Council.'.
(5) TERMINATION- Subsection (k) of section 576 of the National Flood Insurance
Reform Act of 1994 (42 U.S.C. 4101 note) is amended by striking `under
subsection (b)(1)' and inserting `pursuant to subsection (b)(1) of this
section and section 16(c)(3) of the Flood Insurance Reform and Modernization
Act of 2006'.
(d) Post-Disaster Flood Elevation Determinations- Section 1361 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4101), as amended by the preceding
provisions of this Act, is further amended by adding at the end the following
new subsection:
`(l) Interim Post-Disaster Flood Elevations-
`(1) AUTHORITY- Notwithstanding any other provision of this section or
section 1363, the Director may, after any flood-related disaster, establish
by order interim flood elevation requirements for purposes of the national
flood insurance program for any areas affected by such flood-related disaster.
`(2) EFFECTIVENESS- Such interim elevation requirements for such an area
shall take effect immediately upon issuance and may remain in effect until
the Director establishes new flood elevations for such area in accordance
with section 1363 or the Director provides otherwise.'.
(e) GAO Study of Low-Income Discount-
(1) IN GENERAL- The Comptroller General of the United States shall conduct
a study of 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 under the national flood insurance program.
In conducting the study the Comptroller General shall analyze--
(A) the feasibility and effectiveness of providing such coverage to
low-income families at rates that are discounted from the rates at which
such coverage is otherwise provided, the amounts by which such rates
should be discounted to ensure that coverage is affordable to such families
and to encourage purchase of coverage by such families, and the effects
of such discounts on the national flood insurance program; and
(B) the extent to which residential properties occupied by low-income
families would be affected by expanding the mandatory purchase requirements
of the national flood insurance program to the areas included in the
national flood insurance program rate maps pursuant to section 1360(k)
of the National Flood Insurance Act of 1968 (42 U.S.C. 4101(k)), as
amended by subsection (a) of this section.
(2) REPORT- The Comptroller General shall submit to the Congress a report
setting forth the conclusions of the study under this subsection not later
than 12 months after the date of the enactment of this Act.
SEC. 17. NOTIFICATION AND APPEAL OF MAP CHANGES; NOTIFICATION OF ESTABLISHMENT
OF FLOOD ELEVATIONS.
Section 1363 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104)
is amended by striking the section designation and all that follows through
the end of subsection (a) and inserting the following:
`SEC. 1363. (a) In establishing projected flood elevations for land use
purposes with respect to any community pursuant to section 1361, the Director
shall first propose such determinations--
`(1) by providing the chief executive officer of each community affected
by the proposed elevations, by certified mail, with a return receipt requested,
notice of the elevations, including a copy of the maps for the elevations
for such community and a statement explaining the process under this section
to appeal for changes in such elevations;
`(2) by causing notice of such elevations to be published in the Federal
Register, which notice shall include information sufficient to identify
the elevation determinations and the communities affected, information
explaining how to obtain copies of the elevations, and a statement explaining
the process under this section to appeal for changes in the elevations;
`(3) by publishing the elevations in a prominent local newspaper; and
`(4) by providing written notification, by first class mail, to each owner
of real property affected by the proposed elevations of--
`(A) the status of such property, both prior to and after the effective
date of the proposed determination, with respect to flood zone and flood
insurance requirements under this Act and the Flood Disaster Protection
Act of 1973;
`(B) the process under this section to appeal a flood elevation determination;
and
`(C) the mailing address and phone number of a person the owner may
contact for more information or to initiate an appeal.'.
SEC. 18. NATIONAL LEVEE INVENTORY.
To identify levees for the national flood insurance program, the Director
of the Federal Emergency Management Agency shall maintain and periodically
publish an inventory of levees in the United States, and shall consult with
the Secretary of the Army as necessary to maintain such inventory.
SEC. 19. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, AND POLICY
LANGUAGE.
Not later than the expiration of the 3-month period beginning on the date
of the enactment of this Act, the Director of the Federal Emergency Management
Agency shall--
(1) in plain language using easy to understand terms and concepts, issue
regulations, and revise any materials made available by such Agency, to
clarify the applicability of replacement cost coverage under the national
flood insurance program;
(2) in plain language using easy to understand terms and concepts, revise
any regulations, forms, notices, guidance, and publications relating to
the full cost of repair or replacement under the replacement cost coverage
to more clearly describe such coverage to flood insurance policyholders
and information to be provided by such policyholders relating to such
coverage, and to avoid providing misleading information to such policyholders;
(3) revise the language in standard flood insurance policies under such
program regarding rating and coverage descriptions in a manner that is
consistent with language used widely in other homeowners and property
and casualty insurance policies, including such language regarding classification
of buildings, basements, crawl spaces, detached garages, enclosures below
elevated buildings, and replacement costs; and
(4) include in each standard flood insurance policy a one-page description
of the policy using plain language and easy to understand terms and concepts.
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 of such Agency
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. INVESTIGATION OF WRITE-YOUR-OWN INSURERS' ADJUSTMENT OF CLAIMS
RELATING TO HURRICANE KATRINA.
(a) Investigation- The Inspector General of the Department of Homeland Security
shall carry out an investigation of insurers making flood insurance coverage
available under the Write-Your-Own program pursuant to section 1345 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4081) and subpart C of part
62 of title 44, Code of Federal Regulations to determine--
(1) whether any such insurers, in adjusting and settling claims resulting
from Hurricane Katrina, improperly attributed damages from such hurricane
to flooding covered under coverage provided under the national flood insurance
program rather than to windstorms covered by other coverage provided by
such insurers or by windstorm insurance pools in which such insurers participated;
and
(2) the extent to which such improper attribution of damages occurred.
(b) Report- Not later than the expiration of the 6-month period that begins
upon the date of the enactment of this Act, the Inspector General of the
Department of Homeland Security shall submit to the Congress a report setting
forth the conclusions of the investigation pursuant to subsection (a).
SEC. 22. ELIGIBILITY OF PROPERTY DEMOLITION AND REBUILDING FOR 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 inserting after `flood risk' the following:
`, or the demolition and rebuilding of structures located in such areas
to at least Base Flood Elevation or any greater elevation required by any
local ordinance'.
SEC. 23. SAMPLING METHODS FOR QUALITY ASSURANCE.
Section 1345 of the National Flood Insurance Act of 1968 (42 U.S.C. 4081)
is amended by adding at the end the following new subsection:
`(d) Sampling Methods for Quality Assurance- In selecting the cases and
claims for operational reviews and claims re-inspections regarding the national
flood insurance program under this title, the Director shall use a statistically
valid probability sample whose results can be generalized to the entire
population of reviews and claims from which the sample is drawn and whose
sampling error can be quantified.'.
SEC. 24. EXTENSION OF DEADLINE FOR FILING PROOF OF LOSS.
(a) In General- Section 1312 of the National Flood Insurance Act of 1968
(42 U.S.C. 4019) is amended--
(1) by inserting `(a) Payment- ' before `The Director'; and
(2) by adding at the end the following new subsection:
`(b) Filing Deadline for Proof of Loss-
`(1) IN GENERAL- In establishing any requirements regarding notification,
proof, or approval of claims for damage to or loss of property which is
covered by flood insurance made available under this title, the Director
may not require an insured to notify the Director of such damage or loss,
submit a claim for such damage or loss, or certify to or submit proof
of such damage or loss, before the expiration of the 180-day period that
begins on the date that such damage or loss occurred.
`(2) EXCEPTIONS- Notwithstanding any deadline established in accordance
with paragraph (1), the Director may not deny a claim for damage or loss
described in such paragraph solely for failure to meet such deadline if
the insured demonstrates any good cause for such failure.'.
(b) Applicability- Subsection (b) of section 1312 of the National Flood
Insurance Act of 1968, as added by subsection (a)(2) of this section, shall
apply with respect to any claim under which the damage to or loss of property
occurred on or after September 18, 2003.
Passed the House of Representatives June 27, 2006.
Attest:
KAREN L. HAAS,
Clerk.
Calendar No. 501
109th CONGRESS
2d Session
H. R. 4973
AN ACT
To restore the financial solvency of the national flood insurance program,
and for other purposes.
June 28, 2006
Received; read twice and placed on the calendar
END
