HR 1682 - Flood Insurance Reform and Modernization Act of 2007

110th CONGRESS
1st Session

H. R. 1682

To restore the financial solvency of the national flood insurance program, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

March 26, 2007

Mr. FRANK of Massachusetts (for himself, Mrs. BIGGERT, Mr. BLUMENAUER, Ms. WATERS, Mr. TAYLOR, Ms. MATSUI, Mr. MAHONEY of Florida, Ms. WASSERMAN SCHULTZ, Mr. BAKER, Mr. GARY G. MILLER of California, Mrs. JO ANN DAVIS of Virginia, and Ms. GINNY BROWN-WAITE of Florida) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

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 2007'.

(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. Exception to waiting period for effective date of policies.

Sec. 6. Enforcement.

Sec. 7. Maximum coverage limits.

Sec. 8. Coverage for additional living expenses, basement improvements, business interruption, and replacement cost of contents.

Sec. 9. Notification to tenants of availability of contents insurance.

Sec. 10. Increase in annual limitation on premium increases.

Sec. 11. Increase in borrowing authority.

Sec. 12. FEMA participation in State disaster claims mediation programs.

Sec. 13. FEMA annual report on insurance program.

Sec. 14. Flood insurance outreach grants.

Sec. 15. Grants for direct funding of mitigation activities for individual repetitive claims properties.

Sec. 16. Extension of pilot program for mitigation of severe repetitive loss properties.

Sec. 17. Flood mitigation assistance program.

Sec. 18. GAO study of methods to increase flood insurance program participation by low-income families.

Sec. 19. Notice of availability of flood insurance and escrow in RESPA good faith estimate.

Sec. 20. Reiteration of FEMA responsibilities under 2004 Reform Act.

Sec. 21. Ongoing modernization of flood maps and elevation standards.

Sec. 22. Notification and appeal of map changes; notification of establishment of flood elevations.

Sec. 23. Clarification of replacement cost provisions, forms, and policy language.

Sec. 24. Authorization of additional FEMA staff.

Sec. 25. 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, the District of Columbia, and in all territories and possessions of the United States;

(2) the national flood insurance program (NFIP) is the only affordable and reliable source of insurance to protect against flood losses;

(3) the aggregate amount of the flood insurance claims resulting from Hurricane Katrina, Hurricane Rita, and other 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;

(4) flood insurance policyholders have a legitimate expectation that they will receive fair and timely compensation for losses covered under their policies;

(5) substantial flooding has occurred, and will likely occur again, outside the areas designated by the Federal Emergency Management Agency (FEMA) as high-risk flood hazard areas;

(6) properties located in low- to moderate-risk areas are eligible to purchase flood insurance policies with premiums as low as $112 a year;

(7) about 450,000 vacation homes, second homes, and commercial properties are subsidized and are not paying actuarially sound rates for flood insurance;

(8) phasing out subsidies currently extended to vacation homes, second homes, and commercial properties would result in estimated average annual savings to the taxpayers of the United States and the national flood insurance program of $335,000,000;

(9) the maximum coverage limits for flood insurance policies should be increased to reflect inflation and the increased cost of housing;

(10) 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

(11) 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 and to pay debt service on funds borrowed by the NFIP;

(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 NFIP and FEMA; 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;

(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.

(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

(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 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.'.

(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 (4)'.

(1) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall apply beginning on January 1, 2011, 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) or (3) 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 the following amount (or such lesser amount as may be necessary so that the chargeable rate does not exceed such applicable estimated risk premium rate):

(i) NONRESIDENTIAL PROPERTIES- In the case of any property described in such section 1308(c)(2), 20 percent.

(ii) NON-PRIMARY RESIDENCES- In the case of any property described in such section 1308(c)(3), 25 percent.

(C) FULL ACTUARIAL RATES- The provisions of paragraphs (2) and (3) of such section 1308(c) shall apply to such a property upon the accomplishment of the increase under this paragraph and thereafter.

SEC. 5. 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. 6. ENFORCEMENT.

Section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)) is amended--

(1) 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

(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;

(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);

`(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. 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 located in an area having special flood hazards--

`(1) provide to the insured sufficient copies of the notice developed pursuant to subsection (b) to provide for distribution of a copy of such notice to each tenant of the property; and

`(2) strongly encourage the insured to provide a copy 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) that 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 location on the World Wide Web of the Director where such information is available.'.

SEC. 10. 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. 11. 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 `$21,500,000,000'.

(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. 12. 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. 13. FEMA ANNUAL REPORT ON INSURANCE PROGRAM.

Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 4027) is amended--

(1) in the section heading, by striking `REPORT TO THE PRESIDENT' and inserting `ANNUAL REPORT TO CONGRESS' ;

(2) in subsection (a)--

(A) by striking `biennially';

(B) by striking `the President for submission to'; and

(3) in subsection (b), by striking `biennial' and inserting `annual'; and

(4) by adding at the end the following new subsection:

`(c) Financial Status of Program- The report under this section for each year shall include information regarding the financial status of the national flood insurance program under this title, including a description of the financial status of the National Flood Insurance Fund and current and projected levels of claims, premium receipts, expenses, and borrowing under the program.'.

SEC. 14. FLOOD INSURANCE OUTREACH GRANTS.

Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amended by adding at the end the following new section:

`SEC. 1325. 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 2008 through 2012.'.

SEC. 15. GRANTS FOR DIRECT FUNDING OF MITIGATION ACTIVITIES FOR INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.

(a) Direct Grants to Owners- Section 1323 of the National Flood Insurance Act of 1968 (42 U.S.C. 4030) is amended--

(1) in the section heading, by inserting `direct' before `grants'; and

(2) in the matter in subsection (a) that precedes paragraph (1)--

(A) by inserting `, to owners of such properties,' before `for mitigation actions'; and

(B) by striking `1' and inserting `two'.

(b) Availability of Funds- Paragraph (9) of section 1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended by inserting `which shall remain available until expended,' after `and fiscal year,'.

SEC. 16. 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 `2008, 2009, 2010, 2011, and 2012'; and

(2) by striking subsection (l).

SEC. 17. FLOOD MITIGATION ASSISTANCE PROGRAM.

(a) Eligibility of Property Demolition and Rebuilding- 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'.

(b) Elimination of Limitations on Aggregate Amount of Assistance- Section 1366 of the National Flood Insurance Act of 1968 is amended by striking subsection (f).

(c) Source of Funds- Subsection (a) of section 1367 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104d(a)) is amended by adding at the end the following new sentence: `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.'.

(d) Technical Amendments- Section 1366 of the National Flood Insurance Act of 1968 is amended--

(1) by striking `subsection (g)' each place such term appears in subsections (h) and (i)(2) and inserting `subsection (f)'; and

(2) by redesignating subsections (g) through (k) as subsections (f) through (j), respectively.

SEC. 18. GAO 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. 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 World Wide Web 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. 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. 21. ONGOING MODERNIZATION OF FLOOD MAPS AND ELEVATION STANDARDS.

(a) Ongoing 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) Ongoing 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 21(b) of the Flood Insurance Reform and Modernization Act of 2007, shall establish an ongoing program under which the Director shall review, update, and maintain national flood insurance program rate maps in accordance with this subsection.

`(2) INCLUSIONS-

`(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;

`(III) mud flow areas;

`(IV) ice jam areas; and

`(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 $400,000,000 for each of fiscal years 2008 through 2013.'.

(b) Reestablishment of Technical Mapping Advisory Council for Ongoing Mapping Program-

(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) in the matter preceding subparagraph (A), by striking `10' and inserting `14';

(B) by redesignating subparagraphs (E), (F), (G), (H), (I), and (J) as subparagraphs (F), (G), (H), (K), (M), and (N), respectively;

`(E) a representative of the Corps of Engineers of the United States Army;';

(D) by inserting after subparagraph (H) (as so redesignated by subparagraph (B) 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

(E) 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) TERMS OF MEMBERS AND APPOINTMENT- Section 576(b) of the National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is amended by adding at the end the following new paragraph:

`(3) TERMS OF MEMBERS-

`(A) IN GENERAL- Each member of the Council pursuant to any of subparagraphs (B) through (N) of paragraph (1) shall be appointed for a term of 5 years, except as provided in subparagraphs (B) and (C).

`(B) TERMS OF INITIAL APPOINTEES- As designated by the Director (or the designee of the Director) at the time of appointment, of the members of the Council first appointed pursuant to subparagraph (D)--

`(i) 4 shall be appointed for a term of 1 year;

`(ii) 4 shall be appointed for a term of 3 years; and

`(iii) 5 shall be appointed for a term of 5 years.

`(C) VACANCIES- Any member of the Council appointed to fill a vacancy occurring before the expiration of the term for which the member's predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member's term until a successor has taken office. A vacancy in the Council shall be filled in the manner in which the original appointment was made.

`(D) INITIAL APPOINTMENT- The Director, or the Director's designee, shall take action as soon as possible after the date of the enactment of the Flood Insurance Reform and Modernization Act of 2007 to appoint the members of the Council pursuant to 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) ELIMINATION OF TERMINATION- Section 576 of the National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is amended by striking subsection (k) and inserting the following new subsection:

`(k) Continued Existence- Section 14(a)(2)(B) of the Federal Advisory Committee Act (5 U.S.C. App.; relating to termination of advisory committees) shall not apply to the Council.'.

(c) 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.'.

SEC. 22. 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; and

`(3) by publishing in a prominent local newspaper the elevations, a description of the appeals process for flood determinations, and the mailing address and telephone number of a person the owner may contact for more information or to initiate an appeal.'.

SEC. 23. 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. 24. 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. 25. 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 the date of the enactment of this Act.

END