HR 3121
9-27-07, Bill Passed House 263-146
Referred to Senate
Committee on Banking, Housing & Urban Affairs
110th CONGRESS
1st Session
H. R. 3121
IN THE SENATE OF THE UNITED STATES
September 28, 2007
Received; read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
AN ACT
To restore the financial solvency of the national flood insurance
program and to provide for such program to make available multiperil coverage
for damage resulting from windstorms and floods, 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. 7. Multiperil coverage for flood and windstorm.
Sec. 8. Maximum coverage limits.
Sec. 9. Coverage for additional living expenses, basement improvements,
business interruption, and replacement cost of contents.
Sec. 10. Notification to tenants of availability of contents insurance.
Sec. 11. Increase in annual limitation on premium increases.
Sec. 12. Report regarding borrowing authority.
Sec. 13. FEMA participation in State disaster claims mediation programs.
Sec. 14. FEMA annual report on insurance program.
Sec. 15. Flood insurance outreach.
Sec. 16. Grants for direct funding of mitigation activities for individual
repetitive claims properties.
Sec. 17. Extension of pilot program for mitigation of severe repetitive
loss properties.
Sec. 18. Flood mitigation assistance program.
Sec. 19. GAO study of methods to increase flood insurance program participation
by low-income families.
Sec. 20. Notice of availability of flood insurance and escrow in RESPA good
faith estimate.
Sec. 21. Reiteration of FEMA responsibilities under 2004 Reform Act.
Sec. 22. Ongoing modernization of flood maps and elevation standards.
Sec. 23. Notification and appeal of map changes; notification of establishment
of flood elevations.
Sec. 24. Clarification of replacement cost provisions, forms, and policy
language.
Sec. 25. Authorization of additional FEMA staff.
Sec. 26. Extension of deadline for filing proof of loss.
Sec. 27. 5-year extension of program.
Sec. 28. Report on inclusion of building codes in floodplain management
criteria.
Sec. 29. Study of economic effects of charging actuarially-based premium
rates for pre-firm structures.
Sec. 30. Prohibition on enforcement of penalty assessed on condominium associations.
Sec. 31. Report of administrative expenses of write-your-own insurers; independent
audits.
Sec. 32. Plan to verify maintenance of flood insurance on Mississippi and
Louisiana properties receiving emergency supplemental funds.
Sec. 33. GAO study of factors affecting enrollment in multiperil insurance
program.
Sec. 34. National flood insurance advocate; reports.
Sec. 35. Requirements relating to windstorm and flood.
Sec. 36. Notations on flood insurance rate maps for areas protected against
100-year and 500-year floods by certified flood control structure.
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;
(3) to increase awareness of homeowners of flood risks and improve the quality
of information regarding such risks provided to homeowners; and
(4) to provide for the national flood insurance program to make available
optional multiperil insurance coverage against loss resulting from physical
damage to or loss of real or personal property arising from any flood or
windstorm.
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; and
(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
(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 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, which term
shall not include any multifamily rental property that consists of four
or more dwelling units.
`(3) NON-PRIMARY RESIDENCES- Any residential property that is not the primary
residence of any individual, including the owner of the property or any
other individual who resides in the property as a tenant.'.
(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 `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)'.
(c) Effective Date and Transition-
(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 15 percent (or such lesser amount as may be necessary
so that the chargeable rate does not exceed such applicable estimated
risk premium rate or to comply with subparagraph (C)). Any increase in
chargeable premium rates for a property pursuant to this paragraph shall
not be considered for purposes of the limitation under section 1308(e)
of such Act.
(C) PROPERTIES SUBJECT TO PHASE-IN AND ANNUAL INCREASES- In the case of
any pre-FIRM property (as such term is defined in section 578(b) of the
National Flood Insurance Reform Act of 1974), the aggregate increase,
during any 12-month period, in the chargeable premium rate for the property
that is attributable to this paragraph or to an increase described in
section 1308(e) of the National Flood Insurance Act of 1968 may not exceed
the following percentage:
(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.
(D) 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--
(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. MULTIPERIL COVERAGE FOR FLOOD AND WINDSTORM.
(a) In General- Section 1304 of the National Flood Insurance Act of 1968 (42
U.S.C. 4011) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new subsection:
`(c) Multiperil Coverage for Damage From Flood or Windstorm-
`(1) IN GENERAL- Subject to paragraph (8), the national flood insurance
program established pursuant to subsection (a) shall enable the purchase
of optional insurance against loss resulting from physical damage to or
loss of real property or personal property related thereto located in the
United States arising from any flood or windstorm, subject to the limitations
in this subsection and section 1306(b).
`(2) COMMUNITY PARTICIPATION REQUIREMENT- Multiperil coverage pursuant to
this subsection may not be provided in any area (or subdivision thereof)
unless an appropriate public body shall have adopted adequate mitigation
measures (with effective enforcement provisions) which the Director finds
are consistent with the criteria for construction described in the International
Code Council building codes relating to wind mitigation.
`(3) PROHIBITION AGAINST DUPLICATIVE COVERAGE- Multiperil coverage pursuant
to this subsection may not be provided with respect to any structure (or
the personal property related thereto) for any period during which such
structure is covered, at any time, by flood insurance coverage made available
under this title.
`(4) NATURE OF COVERAGE- Multiperil coverage pursuant to this subsection
shall--
`(A) cover losses only from physical damage resulting from flooding or
windstorm; and
`(B) provide for approval and payment of claims under such coverage upon
proof that such loss must have resulted from either windstorm or flooding,
but shall not require for approval and payment of a claim that the specific
cause of the loss, whether windstorm or flooding, be distinguished or
identified.
`(5) ACTUARIAL RATES- Multiperil coverage pursuant to this subsection shall
be made available for purchase for a property only at chargeable risk premium
rates that, based on consideration of the risks involved and accepted actuarial
principles, and including operating costs and allowance and administrative
expenses, are required in order to make such coverage available on an actuarial
basis for the type and class of properties covered.
`(6) TERMS OF COVERAGE- The Director shall, after consultation with persons
and entities referred to in section 1306(a), provide by regulation for the
general terms and conditions of insurability which shall be applicable to
properties eligible for multiperil coverage under this subsection, subject
to the provisions of this subsection, including--
`(A) the types, classes, and locations of any such properties which shall
be eligible for such coverage, which shall include residential and nonresidential
properties;
`(B) subject to paragraph (7), the nature and limits of loss or damage
in any areas (or subdivisions thereof) which may be covered by such coverage;
`(C) the classification, limitation, and rejection of any risks which
may be advisable;
`(D) appropriate minimum premiums;
`(E) appropriate loss deductibles; and
`(F) any other terms and conditions relating to insurance coverage or
exclusion that may be necessary to carry out this subsection.
`(7) LIMITATIONS ON AMOUNT OF COVERAGE- The regulations issued pursuant
to paragraph (6) shall provide that the aggregate liability under multiperil
coverage made available under this subsection shall not exceed the lesser
of the replacement cost for covered losses or the following amounts, as
applicable:
`(A) RESIDENTIAL STRUCTURES- In the case of residential properties, which
shall include structures containing multiple dwelling units that are made
available for occupancy by rental (notwithstanding any treatment or classification
of such properties for purposes of section 1306(b))--
`(i) for any single-family dwelling, $500,000;
`(ii) for any structure containing more than one dwelling unit, $500,000
for each separate dwelling unit in the structure, which limit, in the
case of such a structure containing multiple dwelling units that are
made available for occupancy by rental, shall be applied so as to enable
any insured or applicant for insurance to receive coverage for the structure
up to a total amount that is equal to the product of the total number
of such rental dwelling units in such property and the maximum coverage
limit per dwelling unit specified in this clause; and
`(iii) $150,000 per dwelling unit for--
`(I) any contents related to such unit; and
`(II) any necessary increases in living expenses incurred by the insured
when losses from flooding or windstorm make the residence unfit to
live in.
`(B) NONRESIDENTIAL PROPERTIES- In the case of nonresidential properties
(including church properties)--
`(i) $1,000,000 for any single structure; and
`(I) any contents related to such structure; and
`(II) in the case of any nonresidential property that is a business
property, any losses resulting from any partial or total interruption
of the insured's business caused by damage to, or loss of, such property
from flooding or windstorm, except that 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
or windstorm not occurred.
`(8) REQUIREMENT TO CEASE OFFERING COVERAGE IF BORROWING TO PAY CLAIMS-
If at any time the Director utilizes the borrowing authority under section
1309(a) for the purpose of obtaining amounts to pay claims under multiperil
coverage made available under this subsection, the Director may not, during
the period beginning upon the initial such use of such borrowing authority
and ending upon repayment to the Secretary of the Treasury of the full amount
of all outstanding notes and obligations issued by the Director for such
purpose, together with all interest owed on such notes and obligations,
enter into any new policy, or renew any existing policy, for coverage made
available under this subsection.
`(9) EFFECTIVE DATE- This subsection shall take effect on, and shall apply
beginning on, June 30, 2008.'.
(b) Prohibition Against Duplicative Coverage- The National Flood Insurance
Act of 1968 is amended by inserting after section 1313 (42 U.S.C. 4020) the
following new section:
`PROHIBITION AGAINST DUPLICATIVE COVERAGE
`Sec. 1314. Flood insurance under this title may not be provided with respect
to any structure (or the personal property related thereto) for any period
during which such structure is covered, at any time, by multiperil insurance
coverage made available pursuant to section 1304(c).'.
(c) Compliance With State and Local Law- Section 1316 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4023) is amended--
(1) by inserting `(a) Flood Protection Measures- ' before `No new'; and
(2) by adding at the end the following new subsection:
`(b) Windstorm Protection Measures- No new multiperil coverage shall be provided
under section 1304(c) for any property that the Director finds has been declared
by a duly constituted State or local zoning authority, or other authorized
public body to be in violation of State or local laws, regulations, or ordinances,
which are intended to reduce damage caused by windstorms.'.
(d) Criteria for Land Management and Use- Section 1361 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4102) is amended by adding at the end the
following new subsection:
`(1) STUDIES AND INVESTIGATIONS- The Director shall carry out studies and
investigations under this section to determine appropriate measures in wind
events as to wind hazard prevention, and may enter into contracts, agreements,
and other appropriate arrangements to carry out such activities. Such studies
and investigations shall include laws, regulations, and ordinance relating
to the orderly development and use of areas subject to damage from windstorm
risks, and zoning building codes, building permits, and subdivision and
other building restrictions for such areas.
`(2) CRITERIA- On the basis of the studies and investigations pursuant to
paragraph (1) and such other information as may be appropriate, the Direct
shall establish comprehensive criteria designed to encourage, where necessary,
the adoption of adequate State and local measures which, to the maximum
extent feasible, will assist in reducing damage caused by windstorms, discourage
density and intensity or range of use increases in locations subject to
windstorm damage, and enforce restrictions on the alteration of wetlands
coastal dunes and vegetation and other natural features that are known to
prevent or reduce such damage.
`(3) COORDINATION WITH STATE AND LOCAL GOVERNMENTS- The Director shall work
closely with and provide any necessary technical assistance to State, interstate,
and local governmental agencies, to encourage the application of criteria
established under paragraph (2) and the adoption and enforcement of measures
referred to in such paragraph.'.
(e) Definitions- Section 1370 of the National Flood Insurance Act of 1968
(42 U.S.C. 4121) is amended--
(1) in paragraph (14), by striking `and' at the end;
(2) in paragraph (15) by striking the period at the end and inserting `;
and'; and
(3) by adding at the end the following new paragraph:
`(16) the term `windstorm' means any hurricane, tornado, cyclone, typhoon,
or other wind event.'.
SEC. 8. 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
(A) by striking `$500,000' each place such term appears and inserting
`$670,000'; and
(B) by inserting before `; and' the following: `; except that, in the
case of any nonresidential property that is a structure containing more
than one dwelling unit that is made available for occupancy by rental
(notwithstanding the provisions applicable to the determination of the
risk premium rate for such property), additional flood insurance in excess
of such limits shall be made available to every insured upon renewal and
every applicant for insurance so as to enable any such insured or applicant
to receive coverage up to a total amount that is equal to the product
of the total number of such rental dwelling units in such property and
the maximum coverage limit per dwelling unit specified in paragraph (2);
except that in the case of any such multi-unit, nonresidential rental
property that is a pre-FIRM structure (as such term is defined in section
578(b) of the National Flood Insurance Reform Act of 1994 (42 U.S.C. 4014
note)), the risk premium rate for the first $500,000 of coverage shall
be determined in accordance with section 1307(a)(2) and the risk premium
rate for any coverage in excess of such amount shall be determined in
accordance with section 1307(a)(1)'.
SEC. 9. 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 or other residential property,
including multifamily rental property, optional coverage for losses resulting
from any partial or total interruption of the insured's business caused
by damage to, or loss of, such property from a flood shall be made available
to every insured upon renewal and every applicant, except that--
`(A) 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. 10. 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); and
`(2) strongly encourage the insured to provide a copy of the notice, or
otherwise provide notification of the information under subsection (b) in
the manner that the manager or landlord deems most appropriate, to each
such tenant and to each new tenant upon commencement of such a tenancy.
`(b) Notice- Notice to a tenant of a property in accordance with this subsection
is written notice that clearly informs a tenant--
`(1) 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. 11. 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. 12. REPORT REGARDING BORROWING AUTHORITY.
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
within 10 years all amounts that, as of the expiration of such period, have
been borrowed under the authority of section 1309(a) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4016(a)) and not yet repaid as of such date.
SEC. 13. FEMA PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION PROGRAMS.
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. 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-Bereuter-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-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public
Law 108-264; 118 Stat. 726) and regulations issued pursuant to such section.'.
SEC. 14. FEMA ANNUAL REPORT ON INSURANCE PROGRAM.
Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 4027)
is amended--
(1) and inserting in the section heading, by striking `ANNUAL REPORT TO
CONGRESS';
(A) by striking `biennially';
(B) by striking `the President for submission to'; and
(C) by inserting `not later than June 30 of each year' before the period
at the end;
(3) in subsection (b), by striking `biennial' and inserting `annual'; and
(4) by adding at the end the following new subsection:
`(c) Financial Status of Program- The report under this section for each year
shall include information regarding the financial status of the national flood
insurance program under this title, including a description of the financial
status of the National Flood Insurance Fund and current and projected levels
of claims, premium receipts, expenses, and borrowing under the program.'.
SEC. 15. FLOOD INSURANCE OUTREACH.
(a) Grants- Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C.
4011 et seq.), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new section:
`SEC. 1326. GRANTS FOR OUTREACH TO PROPERTY OWNERS AND RENTERS.
`(a) In General- The Director may, to the extent amounts are made available
pursuant to subsection (h), make grants to local governmental agencies responsible
for floodplain management activities (including such agencies of Indians tribes,
as such term is defined in section 4 of the Native American Housing Assistance
and Self-Determination Act of 1996 (25 U.S.C. 4103)) in communities that participate
in the national flood insurance program under this title, for use by such
agencies to carry out outreach activities to encourage and facilitate the
purchase of flood insurance protection under this Act by owners and renters
of properties in such communities and to promote educational activities that
increase awareness of flood risk reduction.
`(b) Outreach Activities- Amounts from a grant under this section shall be
used only for activities designed to--
`(1) identify owners and renters of properties in communities that participate
in the national flood insurance program, including owners of residential
and commercial properties;
`(2) notify such owners and renters when their properties become included
in, or when they are excluded from, an area having special flood hazards
and the effect of such inclusion or exclusion on the applicability of the
mandatory flood insurance purchase requirement under section 102 of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a) to such properties;
`(3) educate such owners and renters regarding the flood risk and reduction
of this risk in their community, including the continued flood risks to
areas that are no longer subject to the flood insurance mandatory purchase
requirement;
`(4) educate such owners and renters regarding the benefits and costs of
maintaining or acquiring flood insurance, including, where applicable, lower-cost
preferred risk policies under this title for such properties and the contents
of such properties; and
`(5) encouraging such owners and renters to maintain or acquire such coverage.
`(c) Cost Sharing Requirement-
`(1) IN GENERAL- In any fiscal year, the Director may not provide a grant
under this section to a local governmental agency in an amount exceeding
3 times the amount that the agency certifies, as the Director shall require,
that the agency will contribute from non-Federal funds to be used with grant
amounts only for carrying out activities described in subsection (b).
`(2) NON-FEDERAL FUNDS- For purposes of this subsection, the term `non-Federal
funds' includes State or local government agency amounts, in-kind contributions,
any salary paid to staff to carry out the eligible activities of the grant
recipient, the value of the time and services contributed by volunteers
to carry out such services (at a rate determined by the Director), and the
value of any donated material or building and the value of any lease on
a building.
`(d) Administrative Cost Limitation- Notwithstanding subsection (b), the Director
may use not more than 5 percent of amounts made available under subsection
(g) to cover salaries, expenses, and other administrative costs incurred by
the Director in making grants and provide assistance under this section.
`(e) Application and Selection-
`(1) IN GENERAL- The Director shall provide for local governmental agencies
described in subsection (a) to submit applications for grants under this
section and for competitive selection, based on criteria established by
the Director, of agencies submitting such applications to receive such grants.
`(2) SELECTION CONSIDERATIONS- In selecting applications of local government
agencies to receive grants under paragraph (1), the Director shall consider--
`(A) the existence of a cooperative technical partner agreement between
the local governmental agency and the Federal Emergency Management Agency;
`(B) the history of flood losses in the relevant area that have occurred
to properties, both inside and outside the special flood hazards zones,
which are not covered by flood insurance coverage;
`(C) the estimated percentage of high-risk properties located in the relevant
area that are not covered by flood insurance;
`(D) demonstrated success of the local governmental agency in generating
voluntary purchase of flood insurance; and
`(E) demonstrated technical capacity of the local governmental agency
for outreach to individual property owners.
`(f) Direct Outreach by FEMA- In each fiscal year that amounts for grants
are made available pursuant to subsection (h), the Director may use not more
than 50 percent of such amounts to carry out, and to enter into contracts
with other entities to carry out, activities described in subsection (b) in
areas that the Director determines have the most immediate need for such activities.
`(g) Reporting- Each local government agency that receives a grant under this
section, and each entity that receives amounts pursuant to subsection (f),
shall submit a report to the Director, not later than 12 months after such
amounts are first received, which shall include such information as the Director
considers appropriate to describe the activities conducted using such amounts
and the effect of such activities on the retention or acquisition of flood
insurance coverage.
`(h) Authorization of Appropriations- There is authorized to be appropriated
for grants under this section $50,000,000 for each of fiscal years 2008 through
2012.'.
(b) Report on Current Efforts- Not later than the expiration of the 60-day
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
identifying and describing the marketing and outreach efforts then currently
being undertaken to educate consumers regarding the benefits of obtaining
coverage under the national flood insurance program.
SEC. 16. 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 `any fiscal year,'.
SEC. 17. 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. 18. 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)';
(2) by redesignating subsections (g) through (k) as subsections (f) through
(j), respectively; and
(3) by redesignating subsection (m) as subsection (k).
SEC. 19. 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. 20. 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. 21. 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. 22. 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 22(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.
`(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;
`(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.); and
`(iv) the 100-year floodplain, including any area that would be in the
100-year floodplain if not protected by a levee, dam, or other man-made
structure.
`(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.
`(C) EFFECTS OF GLOBAL WARMING- In updating and maintaining maps under
this section, the Director shall--
`(i) take into consideration and account for the impacts of global climate
change on flood, storm, and drought risks in the United States;
`(ii) take into consideration and account for the potential future impact
of global climate change-related weather events, such as increased hurricane
activity, intensity, storm surge, sea level rise, and associated flooding;
and
`(iii) use the best available climate science in assessing flood and
storm risks to determine flood risks and develop such maps.
`(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) MAPPING ELEMENTS- Each map updated under this section shall meet the
following requirements:
`(A) GROUND ELEVATION DATA- The maps shall assess the accuracy of current
ground elevation data used for hydrologic and hydraulic modeling of flooding
sources and mapping of the flood hazard and wherever necessary acquire
new ground elevation data utilizing the most up-to-date geospatial technologies
in accordance with the existing guidelines and specifications of the Federal
Emergency Management Agency.
`(B) DATA ON A WATERSHED BASIS- The maps shall develop national flood
insurance program flood data on a watershed basis--
`(i) to provide the most technically effective and efficient studies
and hydrologic and hydraulic modeling; and
`(ii) to eliminate, to the maximum extent possible, discrepancies in
base flood elevations between adjacent political subdivisions.
`(C) OTHER DATA- The maps shall include any other relevant information
as may be recommended by the Technical Mapping Advisory Council reestablished
by section 22(b) of the Flood Insurance Reform and Modernization Act of
2007.
`(5) 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.
`(6) PREVENTING DELAY OF 100-YEAR MAPS- In carrying out this section and
this subsection, the Director shall take such actions as may be necessary
to ensure that updating and publication of national flood insurance program
rate maps to include a depiction of the 500-year floodplain does not in
any manner delay the completion or publication of the program rate maps
for the 100-year floodplain.
`(7) 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.
`(8) 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).
`(9) USE OF MAPS FOR RATES- The Director shall not adjust the chargeable
premium rate for flood insurance under this title based on an updated national
flood insurance program rate map or require the purchase of flood insurance
for a property not subject to such a requirement of purchase prior to the
updating of such national flood insurance program rate map until an updated
national flood insurance program rate map is completed for the entire district
of the Corps of Engineers affected by the map, as determined by the district
engineer for such district.
`(10) 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
`15';
(B) by redesignating subparagraphs (E), (F), (G), (H), (I), and (J) as
subparagraphs (F), (G), (H), (K), (O), and (P), respectively;
(C) by inserting after subparagraph (D) the following new subparagraph:
`(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
(B) of this paragraph) the following new subparagraphs:
`(L) a representative of flood insurance servicing companies;
`(M) a real estate professional;
`(N) a member of a professional mapping association or organization;'.
(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:
`(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 1360 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4101), as amended by the preceding
provisions of this Act, is further amended by adding at the end the following
new subsection:
`(l) 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.'.
(d) Updating Upon Request of Community- Paragraph (2) of section 1360(f) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4101(f)(2)) is amended
by inserting before the period at the end the following: `, except that such
a revision or update shall be made at no cost to the unit of government making
the request if the request is being made to reflect repairs and upgrades to
dams, levees, or other flood control projects under the jurisdiction and responsibility
of the Federal Government'.
(e) 5-Year Discount of Flood Insurance Rates for Formerly Protected Areas-
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015),
as amended by the preceding provisions of this Act, is further amended--
(1) in subsection (c), by inserting `and subsection (g)' before the first
comma; and
(2) by adding at the end the following new subsection:
`(g) 5-Year Discount of Flood Insurance Rates for Formerly Protected Areas-
Notwithstanding any other provision of law relating to chargeable risk premium
rates for flood insurance coverage under this title, in the case of any area
that previously was not designated as an area having special flood hazards
because the area was protected by a flood protection system and that, pursuant
to remapping under section 1360(k), becomes designated as such an area as
a result of the decertification of such flood protection system, during the
5-year period that begins upon the initial such designation of the area, the
chargeable premium rate for flood insurance under this title with respect
to any property that is located within such area shall be equal to 50 percent
of the chargeable risk premium rate otherwise applicable under this title
to the property.'.
(f) Phase-in of Flood Insurance Premiums for Low-Cost Properties- Section
1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015), as amended
by the preceding provisions of this Act, is further amended--
(1) in subsection (c), by inserting `and subsection (h)' before the first
comma; and
(2) by adding at the end the following new subsection:
`(h) 5-Year Phase-in of Premiums for Newly Covered Low-Cost Properties-
`(1) IN GENERAL- In the case of any area not previously designated as an
area having special flood hazards that becomes designated as such an area
as a result of remapping pursuant to section 1360(k), during the 5-year
period that begins upon the initial such designation of the area, the chargeable
premium rate for flood insurance under this title with respect to any low-cost
property that is located within such area shall be--
`(A) for the first year of such 5-year period, 20 percent of the chargeable
risk premium rate otherwise applicable under this title to the property;
`(B) for the second year of such 5-year period, 40 percent of the chargeable
risk premium rate otherwise applicable under this title to the property;
`(C) for the third year of such 5-year period, 60 percent of the chargeable
risk premium rate otherwise applicable under this title to the property;
`(D) for the fourth year of such 5-year period, 80 percent of the chargeable
risk premium rate otherwise applicable under this title to the property;
and
`(E) for the fifth year of such 5-year period, 100 percent of the chargeable
risk premium rate otherwise applicable under this title to the property.
`(2) LOW-COST PROPERTY- For purposes of this subsection, the term
131`low-cost property' means a single-family dwelling, or a dwelling unit
in a residential structure containing more than one dwelling unit, that--
`(A) is the principal residence of the owner or renter occupying the dwelling
or unit; and
`(B) has a value, at the time of the initial designation of the area having
special flood hazards, that does not exceed 75 percent of median home
value for the State in which the property is located.'.
SEC. 23. 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 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; 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. 24. 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) require the use, in connection with flood insurance policies, of the
supplemental forms developed pursuant to section 202 of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat. 725).
SEC. 25. 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. 26. 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.
SEC. 27. 5-YEAR EXTENSION OF PROGRAM.
Section 1319 of the National Flood Insurance Act of 1968 (42 U.S.C. 4026)
is amended by striking `September 30, 2008' and inserting `September 30, 2013'.
SEC. 28. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN MANAGEMENT
CRITERIA.
Not later than the expiration of the 6-month period beginning on the date
of the enactment of this Act, the Director of the Federal Emergency Management
Agency shall conduct a study and submit a report to the Committee on Financial
Services of the House of Representatives and the Committee on Banking, Housing
and Urban Affairs of the Senate regarding the impact, effectiveness, and feasibility
of amending section 1361 of the National Flood Insurance Act of 1968 (42 U.S.C.
4102) to include widely used and nationally recognized building codes as part
of the floodplain management criteria developed under such section, and shall
determine--
(1) the regulatory, financial, and economic impacts of such a building code
requirement on homeowners, States and local communities, local land use
policies, and the Federal Emergency Management Agency;
(2) the resources required of State and local communities to administer
and enforce such a building code requirement;
(3) the effectiveness of such a building code requirement in reducing flood-related
damage to buildings and contents;
(4) the impact of such a building code requirement on the actuarial soundness
of the National Flood Insurance Program;
(5) the effectiveness of nationally recognized codes in allowing innovative
materials and systems for flood-resistant construction; and
(6) the feasibility and effectiveness of providing an incentive in lower
premium rates for flood insurance coverage under such Act for structures
meeting whichever of such widely used and nationally recognized building
code or any applicable local building code provides greater protection from
flood damage.
SEC. 29. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY-BASED PREMIUM
RATES FOR PRE-FIRM STRUCTURES.
(a) Study- The Director of the Federal Emergency Management Agency (in this
section referred to as the `Director') shall conduct a study of the economic
effects that would result from increasing premium rates for flood insurance
coverage made available under the national flood insurance program for non-primary
residences and non-residential pre-FIRM structures (as such term is defined
in section 578(b) of the National Flood Insurance Reform Act of 1994 (42 U.S.C.
4014 note) to the full actuarial risk based premium rate determined under
section 1307(a)(1) of the National Flood Insurance Act of 1968 for the area
in which the property is located. In conducting the study, the Director shall--
(1) determine each area that would be subject to such increased premium
rates; and
(2) for each such area, determine--
(A) the amount by which premium rates would be increased;
(B) the number and types of properties affected and the number and types
of properties covered by flood insurance under this title likely to cancel
such insurance if the rate increases were made;
(C) the effects that the increased premium rates would have on land values
and property taxes; and
(D) any other effects that the increased premium rates would have on the
economy, homeowners, and renters of non-primary residences.
(b) Report- The Director shall submit a report to the Congress describing
and explaining the findings of the study conducted under this section. The
report shall be submitted not later than 12 months after the date of the enactment
of this Act.
SEC. 30. PROHIBITION ON ENFORCEMENT OF PENALTY ASSESSED ON CONDOMINIUM ASSOCIATIONS.
Notwithstanding any other provision of law, the Director of the Federal Emergency
Management Agency shall not apply or enforce any penalty relating to the national
flood insurance program assessed, during 2005 or thereafter, on condominium
associations that are underinsured under such program.
SEC. 31. REPORT OF ADMINISTRATIVE EXPENSES OF WRITE-YOUR-OWN INSURERS; INDEPENDENT
AUDITS.
Section 1348 of the National Flood Insurance Act of 1968 (42 U.S.C. 4084)
is amended by adding at the end the following new subsections:
`(c) Any insurance company or other private organization executing any contract,
agreement, or other appropriate arrangement with the Director under this part
shall--
`(1) annually submit to the Director a record of all administrative and
operating costs of the program undertaken; and
`(2) biennially submit to the Director an independent audit of the program
undertaken that is conducted by a certified public accountant to ensure
that payments made are proper and in accordance with this Act.
`(d) The Director shall review the records and audits submitted under paragraphs
(1) and (2) of subsection (c) to determine if such payments are reasonable
and if the system by which the Director makes payments to an insurance company
or other private organization under this part should be revised.'.
SEC. 32. PLAN TO VERIFY MAINTENANCE OF FLOOD INSURANCE ON MISSISSIPPI AND
LOUISIANA PROPERTIES RECEIVING EMERGENCY SUPPLEMENTAL FUNDS.
The Director of the Federal Emergency Management Agency shall develop and
implement a plan to verify that persons receiving funds under the Homeowner
Grant Assistance Program of the State of Mississippi or the Road Home Program
of the State of Louisiana from amounts allocated to the State of Mississippi
or the State of Louisiana, respectively, from the Community development fund
under the Emergency Supplemental Appropriations Act to Address Hurricanes
in the Gulf of Mexico and Pandemic Influenza, 2006 (Public Law 109-148) are
maintaining flood insurance on the property for which such persons receive
such funds as required by each such Program.
SEC. 33. GAO STUDY OF FACTORS AFFECTING ENROLLMENT IN MULTIPERIL INSURANCE
PROGRAM.
(a) In General- The Comptroller General of the United States shall conduct
a study to identify and analyze factors affecting enrollment in the multiperil
insurance program. Such study shall include a study of the effects of the
multiperil insurance program on enrollment and pricing of State residual property
and casualty markets or plans and State catastrophe plans.
(b) Report- Not later than 270 days after the date of the enactment of this
Act, the Comptroller General shall submit to Congress a report containing
the conclusions of the study conducted under subsection (a).
SEC. 34. NATIONAL FLOOD INSURANCE ADVOCATE; REPORTS.
Chapter II of the National Flood Insurance Act of 1968 is amended by inserting
after section 1330 (42 U.S.C. 4041) the following new section:
`SEC. 1330A. NATIONAL FLOOD INSURANCE ADVOCATE.
`(a) Establishment of Position-
`(1) IN GENERAL- There shall be in the Federal Emergency Management Agency
a National Flood Insurance Advocate. The National Flood Insurance Advocate
shall report directly to the Director and shall, to the extent amounts are
provided pursuant to subsection (c), be compensated at the same rate as
the highest rate of basic pay established for the Senior Executive Service
under section 5382 of title 5, United States Code, or, if the Director so
determines, at a rate fixed under section 9503 of such title.
`(2) APPOINTMENT- The National Flood Insurance Advocate shall be appointed
by the Director and the flood insurance advisory committee established pursuant
to section 1318 (42 U.S.C. 4025) and without regard to the provisions of
title 5, United States Code, relating to appointments in the competitive
service or the Senior Executive Service.
`(3) QUALIFICATIONS- An individual appointed under paragraph (2) shall have--
`(A) a background in customer service as well as insurance; and
`(B) experience in representing individual insureds.
`(4) RESTRICTION ON EMPLOYMENT- An individual may be appointed as the National
Flood Insurance Advocate only if such individual was not an officer or employee
of the Federal Emergency Management Agency with duties relating to the national
flood insurance program during the 2-year period ending with such appointment
and such individual agrees not to accept any employment with the Federal
Emergency Management Agency for at least 5 years after ceasing to be the
National Flood Insurance Advocate. Service as an employee of the National
Flood Insurance Advocate shall not be taken into account in applying this
paragraph.
`(5) STAFF- To the extent amounts are provided pursuant to subsection (c),
the National Flood Insurance Advocate may employ such personnel as may be
necessary to carry out the duties of the Advocate.
`(b) Duties- The duties of the National Flood Insurance Advocate shall be
to conduct studies with respect to, and submit, the following reports:
`(1) REPORT ON PROBLEMS OF INSUREDS UNDER NATIONAL FLOOD INSURANCE PROGRAM-
Not later than the expiration of the 12-month period beginning on the date
of the enactment of the Flood Insurance Reform and Modernization Act of
2007, the National Flood Insurance Advocate shall submit a report to the
Congress regarding the national flood insurance program, which shall--
`(A) identify areas in which insureds under such program have problems
in dealings with the Federal Emergency Management Agency relating to such
program, and shall contain a summary of at least 20 of the most serious
problems encountered by such insureds, including a description of the
nature of such problems;
`(B) identify areas of the law relating to the flood insurance that impose
significant compliance burdens on such insureds or the Federal Emergency
Management Agency, including specific recommendations for remedying such
problems;
`(C) identify the 10 most litigated issues for each category of such insureds,
including recommendations for mitigating such disputes;
`(D) identify the initiatives of the Agency to improve services for insureds
under the national flood insurance program and actions taken by the Agency
with respect to such program;
`(E) contain recommendations for such administrative and legislative action
as may be appropriate to mitigate or resolve problems encountered by such
insureds; and
`(F) include such other information as the National Flood Insurance Advocate
considers appropriate.
`(2) REPORT ON ESTABLISHMENT OF AN OFFICE OF THE FLOOD INSURANCE ADVOCATE-
Not later than the expiration of the 6-month period beginning on the date
of the initial appointment of a National Flood Insurance Advocate under
this section, the Advocate shall submit a report to the Congress regarding
the feasibility and effectiveness of establishing an Office of the Flood
Insurance Advocate, headed by the National Flood Insurance Advocate, to
assist insureds under the national flood insurance program in resolving
problems with the Federal Emergency Management Agency relating to such program.
Such report shall examine and analyze, and include recommendations regarding--
`(A) an appropriate structure in which to establish such an Office, and
appropriate levels of personnel for such Office;
`(B) other appropriate functions for such an Office, which may include--
`(i) identifying areas in which such insureds have problems in dealing
with the Agency relating to such program;
`(ii) proposing changes in the administrative practices of the Agency
to resolve or mitigate problems encountered by such insureds; and
`(iii) identifying potential legislative changes which may be appropriate
to resolve or mitigate such problems;
`(C) appropriate procedures for formal response by the Director to recommendations
submitted to the Director by the National Flood Insurance Advocate;
`(D) the feasibility and effectiveness of authorizing the National Flood
Insurance Advocate to issue flood insurance assistance orders in cases
in which the Advocate determines that a qualified insured is suffering
or about to suffer a significant hardship as a result of the manner in
which the flood insurance laws are being administered or meets such other
requirements may be appropriate, including examining and analyzing--
`(i) appropriate limitations on the scope and effect of such orders;
`(ii) an appropriate standard for determining such a significant hardship;
`(iii) appropriate terms of flood insurance assistance orders; and
`(iv) appropriate procedures for modifying or rescinding such orders;
`(E) the feasibility and effectiveness of establishing offices of flood
insurance advocates who report to the National Flood Insurance Advocate,
including examining and analyzing--
`(i) the appropriate coverage and geographic allocation of such offices;
`(ii) appropriate procedures and criteria for referral of inquiries
by insureds under such program to such offices;
`(iii) allowing such advocates to consult with appropriate supervisory
personnel of the Agency regarding the daily operation of the offices;
and
`(iv) providing authority for such advocates not disclose to the Director
contact with, or information provided by, such an insured;
`(F) appropriate methods for developing career paths for flood insurance
advocates referred to in subparagraph (E) who may choose to make a career
in the Office of the Flood Insurance Advocate; and
`(G) such other issues regarding the establishment of an Office of the
Flood Insurance Advocate as the National Flood Insurance Advocate considers
appropriate.
`(3) DIRECT SUBMISSION OF REPORTS- Each report required under paragraph
(2) shall be provided directly to the Congress by the National Flood Insurance
Advocate without any prior review or comment from the Director, the Secretary
of Homeland Security, or any other officer or employee of the Federal Emergency
Management Agency or the Department of Homeland Security, or the Office
of Management and Budget.
`(c) Authorization of Appropriations- There are authorized to be appropriated
for fiscal year 2008 and each fiscal year thereafter such sums as may be necessary
to carry out this section.'.
SEC. 35. REQUIREMENTS RELATING TO WINDSTORM AND FLOOD.
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) Requirements for Write-Your-Own Insurers Relating to Windstorm and Flood-
The Director may not utilize the facilities or services of any insurance company
or other insurer to offer flood insurance coverage under this title unless
such company or insurer enters into a written agreement with the Director
that provides as follows:
`(1) PROHIBITION ON EXCLUSION OF WIND DAMAGE COVERAGE- The agreement shall
prohibit the company or insurer from including, in any policy provided by
the company or insurer for homeowners' insurance coverage or coverage for
damage from windstorms, any provision that excludes coverage for wind or
other damage solely because flooding also contributed to damage to the insured
property.
`(2) FIDUCIARY RESPONSIBILITY- The agreement shall provide that the company
or insurer--
`(A) has a fiduciary duty with respect to the Federal taxpayers;
`(B) in selling and servicing policies for flood insurance coverage under
this title and adjusting claims under such coverage, will act in the best
interests the national flood insurance program rather than in the interests
of the company or insurer; and
`(C) will provide written guidance to each insurance agent and claims
adjuster for the company or insurer setting forth the terms of the agreement
pursuant to subparagraphs (A) and (B).'.
SEC. 36. NOTATIONS ON FLOOD INSURANCE RATE MAPS FOR AREAS PROTECTED AGAINST
100-YEAR AND 500-YEAR FLOODS BY CERTIFIED FLOOD CONTROL STRUCTURE.
The National Flood Insurance Act of 1968 is amended by inserting after section
1361A (42 U.S
