S 2284
Calendar No. 460
110th CONGRESS
1st Session
S. 2284
[Report No. 110-214]
To amend the National Flood Insurance Act of 1968, to restore
the financial solvency of the flood insurance fund, and for other purposes.
IN THE SENATE OF THE UNITED STATES
November 1, 2007
Mr. DODD, from the Committee on Banking, Housing, and Urban Affairs,
reported the following original bill; which was read twice and placed
on the calendar
A BILL
To amend the National Flood Insurance Act of 1968, to restore
the financial solvency of the flood insurance fund, 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; 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; Table of contents.
Sec. 4. Extension of National Flood Insurance Program.
Sec. 5. Availability of insurance for multifamily properties.
Sec. 6. Reform of premium rate structure.
Sec. 7. Mandatory coverage areas.
Sec. 8. Premium adjustment.
Sec. 9. State chartered financial institutions.
Sec. 11. Escrow of flood insurance payments.
Sec. 12. Borrowing authority debt forgiveness.
Sec. 13. Minimum deductibles for claims under the National Flood Insurance
Program.
Sec. 14. Considerations in determining chargeable premium rates.
Sec. 16. Repayment plan for borrowing authority.
Sec. 17. Payment of condominium claims.
Sec. 18. Technical Mapping Advisory Council.
Sec. 19. National Flood Mapping Program.
Sec. 20. Removal of limitation on State contributions for updating
flood maps.
Sec. 22. Interagency coordination study.
Sec. 23. Nonmandatory participation.
Sec. 24. Notice of flood insurance availability under RESPA.
Sec. 25. Testing of new floodproofing technologies.
Sec. 26. Participation in State disaster claims mediation programs.
Sec. 27. Reiteration of FEMA responsibilities under the 2004 Reform
Act.
Sec. 28. Additional authority of FEMA to collect information on claims
payments.
Sec. 29. Expense reimbursements of insurance companies.
Sec. 30. Extension of pilot program for mitigation of severe repetitive
loss properties.
Sec. 31. Flood insurance advocate.
Sec. 32. Studies and Reports.
SEC. 2. FINDINGS.
(1) the flood insurance claims resulting from the hurricane season
of 2005 will likely exceed all previous claims paid by the National
Flood Insurance Program;
(2) in order to pay the legitimate claims of policyholders from the
hurricane season of 2005, the Federal Emergency Management Agency
has borrowed over $20,000,000,000 from the Treasury;
(3) the interest alone on this debt, is almost $1,000,000,000 annually,
and that the Federal Emergency Management Agency has indicated that
it will be unable to pay back this debt;
(4) the flood insurance program must be strengthened to ensure it
can pay future claims;
(5) while flood insurance is mandatory in the 100-year floodplain,
substantial flooding occurs outside of existing special flood hazard
areas;
(6) recent events throughout the country involving areas behind man-made
structures, known as `residual risk' areas, have produced catastrophic
losses;
(7) although such man-made structures produce an added element of
safety and therefore lessen the probability that a disaster will occur,
they are nevertheless susceptible to catastrophic loss, even though
such areas at one time were not included within the 100-year floodplain;
and
(8) voluntary participation in the National Flood Insurance Program
has been minimal and many families residing outside the 100-year floodplain
remain unaware of the potential risk to their lives and property.
SEC. 3. DEFINITIONS.
(a) In General- In this Act, the following definitions shall apply:
(1) DIRECTOR- The term `Director' means the Administrator of the Federal
Emergency Management Agency.
(2) NATIONAL FLOOD INSURANCE PROGRAM- The term `National Flood Insurance
Program' means the program established under the National Flood Insurance
Act of 1968 (42 U.S.C. 4011 et seq.).
(3) 100-year FLOODPLAIN- The term `100-year floodplain' means that
area which is subject to inundation from a flood having a 1 percent
chance of being equaled or exceeded in any given year.
(4) 500-year FLOODPLAIN- The term `500-year floodplain' means that
area which is subject to inundation from a flood having a 0.2 percent
chance of being equaled or exceeded in any given year.
(5) WRITE YOUR OWN- The term `Write Your Own' means the cooperative
undertaking between the insurance industry and the Flood Insurance
Administration which allows participating property and casualty insurance
companies to write and service standard flood insurance policies.
(b) Common Terminology- Except as otherwise provided in this Act, any
terms used in this Act shall have the meaning given to such terms under
section 1370 of the National Flood Insurance Act of 1968 (42 U.S.C.
4121).
SEC. 4. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
Section 1319 of the National Flood Insurance Act of 1968 (42 U.S.C.
4026), is amended by striking `2008' and inserting `2013.'.
SEC. 5. AVAILABILITY OF INSURANCE FOR MULTIFAMILY PROPERTIES.
Section 1305 of the National Flood Insurance Act of 1968 (42 U.S.C.
4012) is amended by adding at the end the following:
`(d) Availability of Insurance for Multifamily Properties-
`(1) IN GENERAL- The Director shall make flood insurance available
to cover residential properties of more than 4 units. Notwithstanding
any other provision of law, the maximum coverage amount that the Director
may make available under this subsection to such residential properties
shall be equal to the coverage amount made available to commercial
properties.
`(2) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed
to limit the ability of individuals residing in residential properties
of more than 4 units to obtain insurance for the contents and personal
articles located in such residences.'.
SEC. 6. REFORM OF PREMIUM RATE STRUCTURE.
(a) To Exclude Certain Properties From Receiving Subsidized Premium
Rates-
(1) IN GENERAL- Section 1307 of the National Flood Insurance Act of
1968 (42 U.S.C. 4014) is amended--
(i) in paragraph (2), by striking `; and' and inserting a semicolon;
(ii) in paragraph (3), by striking the period at the end and inserting
`; and'; and
(iii) by adding at the end the following:
`(4) the exclusion of prospective insureds from purchasing flood insurance
at rates less than those estimated under paragraph (1), as required
by paragraph (2), for certain properties, including for--
`(A) any property which is not the primary residence of an individual;
`(B) any severe repetitive loss property, as defined in section
1361A(b);
`(C) any property that has incurred flood-related damage in which
the cumulative amounts of payments under this title equaled or exceeded
the fair market value of such property;
`(D) any business property; and
`(E) any property which on or after the date of enactment of the
Flood Insurance Reform and Modernization Act of 2007 has experienced
or sustained--
`(i) substantial damage exceeding 50 percent of the fair market
value of such property; or
`(ii) substantial improvement exceeding 30 percent of the fair
market value of such property.'; and
(B) by adding at the end the following:
`(g) No Extension of Subsidy to New Policies or Lapsed Policies- The
Director shall not provide flood insurance to prospective insureds at
rates less than those estimated under subsection (a)(1), as required
by paragraph (2) of that subsection, for--
`(1) any property not insured by the flood insurance program as of
the date of enactment of the Flood Insurance Reform and Modernization
Act of 2007; and
`(2) any policy under the flood insurance program that has lapsed
in coverage, as a result of the deliberate choice of the holder of
such policy.'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall become
effective 90 days after the date of the enactment of this Act.
(b) 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--
(1) by striking `under this title for any properties within any single'
and inserting the following: `under this title for any properties--
`(1) within any single'; and
(2) by striking `10 percent' and inserting `15 percent'; and
(3) by striking the period at the end and inserting the following:
`; and
`(2) described in section 1307(a)(4) shall be increased by 25 percent
each year, until the average risk premium rate for such properties
is equal to the average of the risk premium rates for properties described
under paragraph (1).'.
SEC. 7. MANDATORY COVERAGE AREAS.
(a) Special Flood Hazard Areas- Not later than 90 days after the date
of enactment of this Act, the Director shall issue final regulations
establishing a revised definition of areas of special flood hazards
for purposes of the National Flood Insurance Program.
(b) Residual Risk Areas- The regulations required by subsection (a)
shall--
(1) include any area previously identified by the Director as an area
having special flood hazards under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a); and
(2) require the expansion of areas of special flood hazards to include
areas of residual risk, including areas that are located behind levees,
dams, and other man-made structures.
(c) Mandatory Participation in National Flood Insurance Program-
(1) IN GENERAL- Any area described in subsection (b) shall be subject
to the mandatory purchase requirements of sections 102 and 202 of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a, 4106).
(2) LIMITATION- The mandatory purchase requirement under paragraph
(1) shall have no force or effect until the mapping of all residual
risk areas in the United States that the Director determines essential
in order to administer the National Flood Insurance Program, as required
under section 19, are in the maintenance phase.
SEC. 8. PREMIUM ADJUSTMENT.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C.
4015) is amended by adding at the end the following:
`(g) Premium Adjustment To Reflect Current Risk of Flood- Notwithstanding
subsection (f), and upon completion of the updating of any flood insurance
rate map under this Act, the Flood Disaster Protection Act of 1973,
or the Flood Insurance Reform and Modernization Act of 2007, any property
located in an area that is participating in the national flood insurance
program shall have the risk premium rate charged for flood insurance
on such property adjusted to accurately reflect the current risk of
flood to such property, subject to any other provision of this Act.
Any increase in the risk premium rate charged for flood insurance on
any property that is covered by a flood insurance policy on the date
of completion of such updating or remapping that is a result of such
updating or remapping shall be phased in over a 2-year period at the
rate of 50 percent per year.'.
SEC. 9. STATE CHARTERED FINANCIAL INSTITUTIONS.
Section 1305(c) of the National Flood Insurance Act of 1968 (42 U.S.C.
4012(c)) is amended--
(1) in paragraph (1), by striking `; and' and inserting a semicolon;
(2) in paragraph (2), by striking the period at the end and inserting
`; and'; and
(3) by adding at the end the following:
`(3) given satisfactory assurance that by December 31, 2008, lending
institutions chartered by a State, and not insured by the Federal
Deposit Insurance Corporation, shall be subject to regulations by
that State that are consistent with the requirements of section 102
of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a).'.
SEC. 10. ENFORCEMENT.
Section 102(f)(5) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a(f)(5)) is amended--
(1) in the first sentence, by striking `$350' and inserting `$2,000';
and
(2) by striking the second sentence.
SEC. 11. ESCROW OF FLOOD INSURANCE PAYMENTS.
(a) In General- Section 102(d) of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4012a(d)) is amended--
(1) by amending paragraph (1) to read as follows:
`(1) REGULATED LENDING INSTITUTIONS-
`(A) FEDERAL ENTITIES RESPONSIBLE FOR LENDING REGULATIONS- Each
Federal entity for lending regulation (after consultation and coordination
with the Federal Financial Institutions Examination Council) shall,
by regulation, direct that any premiums and fees for flood insurance
under the National Flood Insurance Act of 1968, on any property
for which a loan has been made for acquisition or construction purposes,
shall be paid to the mortgage lender, with the same frequency as
payments on the loan are made, for the duration of the loan. Upon
receipt of any premiums or fees, the lender shall deposit such premiums
and fees in an escrow account on behalf of the borrower. Upon receipt
of a notice from the Director or the provider of the flood insurance
that insurance premiums are due, the remaining balance of an escrow
account shall be paid to the provider of the flood insurance.
`(B) STATE ENTITIES RESPONSIBLE FOR LENDING REGULATIONS- In order
to continue to participate in the flood insurance program, each
State shall direct that its entity or agency with primary responsibility
for the supervision of lending institutions in that State require
that premiums and fees for flood insurance under the National Flood
Insurance Act of 1968, on any property for which a loan has been
made for acquisition or construction purposes shall be paid to the
mortgage lender, with the same frequency as payments on the loan
are made, for the duration of the loan. Upon receipt of any premiums
or fees, the lender shall deposit such premiums and fees in an escrow
account on behalf of the borrower. Upon receipt of a notice from
such State entity or agency, the Director, or the provider of the
flood insurance that insurance premiums are due, the remaining balance
of an escrow account shall be paid to the provider of the flood
insurance.'; and
(2) by adding at the end the following:
`(6) NOTICE UPON LOAN TERMINATION- Upon final payment of the mortgage,
a regulated lending institution shall provide notice to the policyholder
that insurance coverage may cease with such final payment. The regulated
lending institution shall also provide direction as to how the homeowner
may continue flood insurance coverage after the life of the loan.'.
(b) Applicability- The amendment made by subsection (a)(1) shall apply
to any mortgage outstanding or entered into on or after the expiration
of the 2-year period beginning on the date of enactment of this Act.
SEC. 12. BORROWING AUTHORITY DEBT FORGIVENESS.
(a) In General- The Secretary of the Treasury relinquishes the right
to any repayment of amounts due from the Director in connection with
the exercise of the authority vested to the Director to borrow such
sums under section 1309 of the National Flood Insurance Act of 1968
(42 U.S.C. 4016), to the extent such borrowed sums were used to fund
the payment of flood insurance claims under the National Flood Insurance
Program for any damage to or loss of property resulting from the hurricanes
of 2005.
(b) Certification- The debt forgiveness described under subsection (a)
shall only take effect if the Director certifies to the Secretary of
Treasury that all authorized resources or funds available to the Director
to operate the National Flood Insurance Program--
(1) have been otherwise obligated to pay claims under the National
Flood Insurance Program; and
(2) are not otherwise available to make payments to the Secretary
on any outstanding notes or obligations issued by the Director and
held by the Secretary.
(c) Decrease in 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)) is amended by striking `; except that, through September
30, 2008, clause (2) of this sentence shall be applied by substituting
`$20,775,000,000' for `$ 1,500,000,000'.
SEC. 13. MINIMUM DEDUCTIBLES FOR CLAIMS UNDER THE NATIONAL FLOOD INSURANCE
PROGRAM.
Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C.
4019) is amended--
(1) by striking `The Director is' and inserting the following:
`(a) In General- The Director is'; and
(2) by adding at the end the following:
`(b) Minimum Annual Deductible-
`(1) PRE-FIRM PROPERTIES- For any structure which is covered by flood
insurance under this title, and on which construction or substantial
improvement occurred on or before December 31, 1974, or before the
effective date of an initial flood insurance rate map published by
the Director under section 1360 for the area in which such structure
is located, the minimum annual deductible for damage to such structure
shall be--
`(A) $1,500, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an amount
equal to or less than $100,000; and
`(B) $2,000, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an amount
greater than $100,000.
`(2) POST-FIRM PROPERTIES- For any structure which is covered by flood
insurance under this title, and on which construction or substantial
improvement occurred after December 31, 1974, or after the effective
date of an initial flood insurance rate map published by the Director
under section 1360 for the area in which such structure is located,
the minimum annual deductible for damage to such structure shall be--
`(A) $750, if the flood insurance coverage for such structure covers
loss of, or physical damage to, such structure in an amount equal
to or less than $100,000; and
`(B) $1,000, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an amount
greater than $100,000.'.
SEC. 14. CONSIDERATIONS IN DETERMINING CHARGEABLE PREMIUM RATES.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C.
4015(b)) is amended--
(1) in subsection (a), by striking `, after consultation with' and
all that follows through `by regulation' and inserting `prescribe,
after providing notice';
(A) in paragraph (1), by striking the period at the end and inserting
a semicolon;
(B) in paragraph (2), by striking the comma at the end and inserting
a semicolon;
(C) in paragraph (3), by striking `, and' and inserting a semicolon;
(D) in paragraph (4), by striking the period and inserting `; and';
and
(E) by adding at the end the following:
`(5) adequate, on the basis of accepted actuarial principles, to cover
the average historical loss year obligations incurred by the National
Flood Insurance Fund.'; and
(3) by adding at the end the following:
`(h) Rule of Construction- For purposes of this section, the calculation
of an `average historical loss year'--
`(1) includes catastrophic loss years; and
`(2) shall be computed in accordance with generally accepted actuarial
principles.'.
SEC. 15. RESERVE FUND.
Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011
et seq.) is amended by inserting after section 1310 the following:
`SEC. 1310A. RESERVE FUND.
`(a) Establishment of Reserve Fund- In carrying out the flood insurance
program authorized by this chapter, the Director shall establish in
the Treasury of the United States a National Flood Insurance Reserve
Fund (in this section referred to as the `Reserve Fund') which shall--
`(1) be an account separate from any other accounts or funds available
to the Director; and
`(2) be available for meeting the expected future obligations of the
flood insurance program.
`(b) Reserve Ratio- Subject to the phase-in requirements under subsection
(d), the Reserve Fund shall maintain a balance equal to--
`(1) 1 percent of the sum of the total potential loss exposure of
all outstanding flood insurance policies in force in the prior fiscal
year; or
`(2) such higher percentage as the Director determines to be appropriate,
taking into consideration any circumstance that may raise a significant
risk of substantial future losses to the Reserve Fund.
`(c) Maintenance of Reserve Ratio-
`(1) IN GENERAL- The Director shall have the authority to establish,
increase, or decrease the amount of aggregate annual insurance premiums
to be collected for any fiscal year necessary--
`(A) to maintain the reserve ratio required under subsection (b);
and
`(B) to achieve such reserve ratio, if the actual balance of such
reserve is below the amount required under subsection (b).
`(2) CONSIDERATIONS- In exercising the authority granted under paragraph
(1), the Director shall consider--
`(A) the expected operating expenses of the Reserve Fund;
`(B) the insurance loss expenditures under the flood insurance program;
`(C) any investment income generated under the flood insurance program;
and
`(D) any other factor that the Director determines appropriate.
`(3) LIMITATIONS- In exercising the authority granted under paragraph
(1), the Director shall be subject to all other provisions of this
Act, including any provisions relating to chargeable premium rates
or annual increases of such rates.
`(d) Phase-In Requirements- The phase-in requirements under this subsection
are as follows:
`(1) IN GENERAL- Beginning in fiscal year 2008 and not ending until
the fiscal year in which the ratio required under subsection (b) is
achieved, in each such fiscal year the Director shall place in the
Reserve Fund an amount equal to not less than 7.5 percent of the reserve
ratio required under subsection (b).
`(2) AMOUNT SATISFIED- As soon as the ratio required under subsection
(b) is achieved, and except as provided in paragraph (3), the Director
shall not be required to set aside any amounts for the Reserve Fund.
`(3) EXCEPTION- If at any time after the ratio required under subsection
(b) is achieved, the Reserve Fund falls below the required ratio under
subsection (b), the Director shall place in the Reserve Fund for that
fiscal year an amount equal to not less than 7.5 percent of the reserve
ratio required under subsection (b).
`(e) Limitation on Reserve Ratio- In any given fiscal year, if the Director
determines that the reserve ratio required under subsection (b) cannot
be achieved, the Director shall submit a report to Congress that--
`(1) describes and details the specific concerns of the Director regarding
such consequences;
`(2) demonstrates how such consequences would harm the long-term financial
soundness of the flood insurance program; and
`(3) indicates the maximum attainable reserve ratio for that particular
fiscal year.'.
SEC. 16. REPAYMENT PLAN FOR BORROWING AUTHORITY.
Section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C.
4016) is amended by adding at the end the following:
`(c) Any funds borrowed by the Director under the authority established
in subsection (a) shall include a schedule for repayment of such amounts
which shall be transmitted to the--
`(1) Secretary of the Treasury;
`(2) Committee on Banking, Housing, and Urban Affairs of the Senate;
and
`(3) Committee on Financial Services of the House of Representatives.
`(d) In addition to the requirement under subsection (c), in connection
with any funds borrowed by the Director under the authority established
in subsection (a), the Director, beginning 6 months after the date on
which such borrowed funds are issued, and continuing every 6 months
thereafter until such borrowed funds are fully repaid, shall submit
a report on the progress of such repayment to the--
`(1) Secretary of the Treasury;
`(2) Committee on Banking, Housing, and Urban Affairs of the Senate;
and
`(3) Committee on Financial Services of the House of Representatives.'.
SEC. 17. PAYMENT OF CONDOMINIUM CLAIMS.
Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C.
4019), as amended by section 13, is further amended by adding at the
end the following:
`(c) Payment of Claims to Condominium Owners- The Director may not deny
payment for any damage to or loss of property which is covered by flood
insurance to condominium owners who purchased such flood insurance separate
and apart from the flood insurance purchased by the condominium association
in which such owner is a member, based, solely or in any part, on the
flood insurance coverage of the condominium association or others on
the overall property owned by the condominium association. Notwithstanding
any regulations, rules, or restrictions established by the Director
relating to appeals and filing deadlines, the Director shall ensure
that the requirements of this subsection are met with respect to any
claims for damages resulting from flooding in 2005 and 2006.'.
SEC. 18. TECHNICAL MAPPING ADVISORY COUNCIL.
(a) Establishment- There is established a council to be known as the
Technical Mapping Advisory Council (in this section referred to as the
`Council').
(1) IN GENERAL- The Council shall consist of the Director, or the
designee thereof, and 12 additional members to be appointed by the
Director or the designee of the Director, who shall be--
(A) the Under Secretary of Commerce for Oceans and Atmosphere (or
the designee thereof);
(B) a member of a recognized professional surveying association
or organization
(C) a member of a recognized professional mapping association or
organization;
(D) a member of a recognized professional engineering association
or organization;
(E) a member of a recognized professional association or organization
representing flood hazard determination firms;
(F) a representative of the United States Geological Survey;
(G) a representative of a recognized professional association or
organization representing State geographic information;
(H) a representative of State national flood insurance coordination
offices;
(I) a representative of the Corps of Engineers;
(J) the Secretary of the Interior (or the designee thereof);
(K) the Secretary of Agriculture (or the designee thereof); and
(L) a member of a recognized regional flood and storm water management
organization.
(2) QUALIFICATIONS- Members of the Council shall be appointed based
on their demonstrated knowledge and competence regarding surveying,
cartography, remote sensing, geographic information systems, or the
technical aspects of preparing and using flood insurance rate maps.
(c) Duties- The Council shall--
(1) recommend to the Director how to improve in a cost-effective manner
the--
(A) accuracy, general quality, ease of use, and distribution and
dissemination of flood insurance rate maps and risk data; and
(B) performance metrics and milestones required to effectively and
efficiently map flood risk areas in the United States;
(2) recommend to the Director mapping standards and guidelines for--
(A) flood insurance rate maps; and
(B) data accuracy, data quality, data currency, and data
eligibility;
(3) recommend to the Director how to maintain on an ongoing basis
flood insurance rate maps and flood risk identification;
(4) recommend procedures for delegating mapping activities to State
and local mapping partners;
(5) recommend to the Director and other Federal agencies participating
in the Council--
(A) methods for improving interagency and intergovernmental coordination
on flood mapping and flood risk determination; and
(B) a funding strategy to leverage and coordinate budgets and expenditures
across Federal agencies; and
(6) submit an annual report to the Director that contains--
(A) a description of the activities of the Council;
(B) an evaluation of the status and performance of flood insurance
rate maps and mapping activities to revise and update flood insurance
rate maps, as required under section 19; and
(C) a summary of recommendations made by the Council to the Director.
(d) Future Conditions Risk Assessment and Modeling Report-
(1) IN GENERAL- The Council shall consult with scientists and technical
experts, other Federal agencies, States, and local communities to--
(A) develop recommendations on how to--
(i) ensure that flood insurance rate maps incorporate the best
available climate science to assess flood risks; and
(ii) ensure that the Federal Emergency Management Agency uses
the best available methodology to consider the impact of--
(I) the rise in the sea level; and
(II) future development on flood risk; and
(B) not later than 1 year after the date of enactment of this Act,
prepare written recommendations in a future conditions risk assessment
and modeling report and to submit such recommendations to the Director.
(2) RESPONSIBILITY OF THE DIRECTOR- The Director, as part of the ongoing
program to review and update National Flood Insurance Program rate
maps under section 19, shall incorporate any future risk assessment
submitted under paragraph (1)(B) in any such revision or update.
(e) Chairperson- The members of the Council shall elect 1 member to
serve as the chairperson of the Council (in this section referred to
as the `Chairperson').
(f) Coordination- To ensure that the Council's recommendations are consistent,
to the maximum extent practicable, with national digital spatial data
collection and management standards, the Chairperson shall consult with
the Chairperson of the Federal Geographic Data Committee (established
pursuant to OMB Circular A-16).
(g) Compensation- Members of the Council shall receive no additional
compensation by reason of their service on the Council.
(h) Meetings and Actions-
(1) IN GENERAL- The Council shall meet not less frequently than twice
each year at the request of the Chairperson or a majority of its members,
and may take action by a vote of the majority of the members.
(2) INITIAL MEETING- The Director, or a person designated by the Director,
shall request and coordinate the initial meeting of the Council.
(i) Officers- The Chairperson may appoint officers to assist in carrying
out the duties of the Council under subsection (c).
(1) STAFF OF FEMA- Upon the request of the Chairperson, the Director
may detail, on a nonreimbursable basis, personnel of the Federal Emergency
Management Agency to assist the Council in carrying out its duties.
(2) STAFF OF OTHER FEDERAL AGENCIES- Upon request of the Chairperson,
any other Federal agency that is a member of the Council may detail,
on a non-reimbursable basis, personnel to assist the Council in carrying
out its duties.
(k) Powers- In carrying out this section, the Council may hold hearings,
receive evidence and assistance, provide information, and conduct research,
as it considers appropriate.
(l) Report to Congress- The Director, on an annual basis, shall report
to the Committee on Banking, Housing, and Urban Affairs of the Senate,
the Committee on Financial Services of the House of Representatives,
and the Office of Management and Budget on the--
(1) recommendations made by the Council; and
(2) actions taken by the Federal Emergency Management Agency to address
such recommendations to improve flood insurance rate maps and flood
risk data.
SEC. 19. NATIONAL FLOOD MAPPING PROGRAM.
(a) Reviewing, Updating, and Maintaining Maps- The Director, in coordination
with the Technical Mapping Advisory Council established under section
18, shall establish an ongoing program under which the Director shall
review, update, and maintain National Flood Insurance Program rate maps
in accordance with this section.
(1) IN GENERAL- In carrying out the program established under subsection
(a), the Director shall--
(A) identify, review, update, maintain, and publish National Flood
Insurance Program rate maps with respect to--
(i) all areas located within the 100-year floodplain;
(ii) all areas located within the 500-year floodplain;
(iii) areas of residual risk that have not previously been identified,
including areas that are protected levees, dams, and other man-made
structures; and
(iv) areas that could be inundated as a result of the failure
of a levee, dam, or other man-made structure;
(B) establish or update flood-risk zone data in all such areas,
and make estimates with respect to the rates of probable flood caused
loss for the various flood risk zones for each such area; and
(C) use, in identifying, reviewing, updating, maintaining, or publishing
any National Flood Insurance Program rate map required under this
section or under the National Flood Insurance Act of 1968, the most
accurate topography and elevation data available.
(2) MAPPING ELEMENTS- Each map updated under this section shall:
(A) GROUND ELEVATION DATA- 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- 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.
(3) OTHER INCLUSIONS- In updating maps under this section, the Director
shall include--
(A) 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;
(B) any relevant information of the United States Geological Survey
on stream flows, watershed characteristics, and topography that
is useful in the identification of flood hazard areas, as determined
by the Director;
(C) any relevant information on land subsidence, coastal erosion
areas, and other floor-related hazards;
(D) any relevant information or data of the National Oceanic and
Atmospheric Administration and the United States Geological Survey
relating to the best available climate science and the potential
for future inundation from sea level rise, increased precipitation,
and increased intensity of hurricanes due to global warming; and
(E) any other relevant information as may be recommended by the
Technical Mapping Advisory Committee.
(c) Standards- In updating and maintaining maps under this section,
the Director shall--
(1) 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; and
(B) facilitate identification and use of consistent methods of data
collection and analysis by the Director, in conjunction with State
and local governments, in developing maps for communities with similar
flood risks, as determined by the Director; and
(2) publish maps in a format that is--
(A) digital geospatial data compliant;
(B) compliant with the open publishing and data exchange standards
established by the Open Geospatial Consortium; and
(C) compliant with the North American Vertical Datum of 1998 for
New Hydrologic and Hydraulic Engineering.
(d) Authorization of Appropriations- There is authorized to be appropriated
to the Director to carry out this section $400,000,000 for each of fiscal
years 2008 through 2013.
SEC. 20. REMOVAL OF LIMITATION ON STATE CONTRIBUTIONS FOR UPDATING
FLOOD MAPS.
Section 1360(f)(2) of the National Flood Insurance Act of 1968 (42 U.S.C.
4101(f)(2)) is amended by striking `, but which may not exceed 50 percent
of the cost of carrying out the requested revision or update'.
SEC. 21. COORDINATION.
(a) Interagency Budget Crosscut Report-
(1) IN GENERAL- The Secretary of Homeland Security, the Director,
the Director of the Office of Management and Budget, and the heads
of each Federal department or agency carrying out activities under
sections 18 and 19 shall work together to ensure that flood risk determination
data and geospatial data are shared among Federal agencies in order
to coordinate the efforts of the Nation to reduce its vulnerability
to flooding hazards.
(2) REPORT- Not later than 30 days after the submission of the budget
of the United States Government by the President to Congress, the
Director of the Office of Management and Budget, in coordination with
the Federal Emergency Management Agency, the United States Geological
Survey, the National Oceanic and Atmospheric Administration, the Corps
of Engineers, and other Federal agencies, as appropriate, shall submit
to the appropriate authorizing and appropriating committees of the
Senate and the House of Representatives a financial report, certified
by the Secretary or head of each such agency, an interagency budget
crosscut report that displays the budget proposed for each of the
Federal agencies working on flood risk determination data and digital
elevation models, including any planned interagency or intraagency
transfers.
(b) Duties of the Director- In carrying out sections 18 and 19, the
Director shall--
(1) participate, pursuant to section 216 of Public Law 107-347 (116
Stat. 2945), in the establishment of such standards and common protocols
as are necessary to assure the interoperability of geospatial data
for all users of such information;
(2) coordinate with, seek assistance and cooperation of, and provide
liaison to the Federal Geographic Data Committee pursuant to Office
of Management and Budget Circular A-16 and Executive Order 12906 for
the implementation of and compliance with such standards;
(3) integrate with, leverage, and coordinate funding of, to the maximum
extent practicable, the current flood mapping activities of each unit
of State and local government;
(4) integrate with, leverage, and coordinate, to the maximum extent
practicable, the current geospatial activities of other Federal agencies
and units of State and local government; and
(5) develop a funding strategy to leverage and coordinate budgets
and expenditures, and to establish joint funding mechanisms with other
Federal agencies and units of State and local government to share
the collection and utilization of geospatial data among all governmental
users.
SEC. 22. INTERAGENCY COORDINATION STUDY.
(a) In General- The Director shall enter into a contract with the National
Academy of Public Administration to conduct a study on how the Federal
Emergency Management Agency--
(1) should improve interagency and intergovernmental coordination
on flood mapping, including a funding strategy to leverage and coordinate
budgets and expenditures; and
(2) can establish joint funding mechanisms with other Federal agencies
and units of State and local government to share the collection and
utilization of data among all governmental users.
(b) Timing- Not later than 180 days after the date of enactment of this
Act, the National Academy of Public Administration shall report the
findings of the study required under subsection (a) to the--
(1) Committee on Banking, Housing, and Urban Affairs of the Senate;
(2) Committee on Financial Services of the House of Representatives;
(3) Committee on Appropriations of the Senate; and
(4) Committee on Appropriations of the House of Representatives.
SEC. 23. NONMANDATORY PARTICIPATION.
(a) Nonmandatory Participation in National Flood Insurance Program for
500-Year Floodplain- Any area located within the 500-year floodplain
shall not be subject to the mandatory purchase requirements of sections
102 or 202 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a,
4106).
(1) BY DIRECTOR- In carrying out the National Flood Insurance Program,
the Director shall provide notice to any community located in an area
within the 500-year floodplain.
(2) TIMING OF NOTICE- The notice required under paragraph (1) shall
be made not later than 6 months after the date of completion of the
initial mapping of the 500-year floodplain, as required under section
18.
(3) LENDER REQUIRED NOTICE-
(A) REGULATED LENDING INSTITUTIONS- Each Federal or State entity
for lending regulation (after consultation and coordination with
the Federal Financial Institutions Examination Council) shall, by
regulation, require regulated lending institutions, as a condition
of making, increasing, extending, or renewing any loan secured by
property located in an area within the 500-year floodplain, to notify
the purchaser or lessee (or obtain satisfactory assurances that
the seller or lessor has notified the purchaser or lessee) and the
servicer of the loan that such property is located in an area within
the 500-year floodplain, in a manner that is consistent with and
substantially identical to the notice required under section 1364(a)(1)
of the National Flood Insurance Act of 1968 (42 U.S.C. 4104a(a)(1)).
(B) FEDERAL OR STATE AGENCY LENDERS- Each Federal or State agency
lender shall, by regulation, require notification in the same manner
as provided under subparagraph (A) with respect to any loan that
is made by a Federal or State agency lender and secured by property
located in an area within the 500-year floodplain.
(C) PENALTY FOR NONCOMPLIANCE- Any regulated lending institution
or Federal or State agency lender that fails to comply with the
notice requirements established by this paragraph shall be subject
to the penalties prescribed under section 102(f)(5) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(5)).
SEC. 24. NOTICE OF FLOOD INSURANCE AVAILABILITY UNDER RESPA.
Section 5(b) of the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2604(b)) is amended--
(1) in paragraph (4), by striking `; and' and inserting a semicolon;
(2) in paragraph (5), by striking the period and inserting `; and';
and
(3) by adding at the end the following:
`(6) an explanation of flood insurance and the availability of flood
insurance under the National Flood Insurance Program, whether or not
the real estate is located in an area having special flood hazards.'.
SEC. 25. TESTING OF NEW FLOODPROOFING TECHNOLOGIES.
(a) Permissible Testing- A temporary residential structure built for
the purpose of testing a new flood proofing technology, as described
in subsection (b), in any State or community that receives mitigation
assistance under section 1366 of the National Flood Insurance Act of
1968 (42 U.S.C. 4104c) may not be construed to be in violation of any
flood risk mitigation plan developed by that State or community and
approved by the Director of the Federal Emergency Management Agency.
(b) Conditions on Testing- Testing permitted under subsection (a) shall--
(1) be performed on an uninhabited residential structure;
(2) require dismantling of the structure at the conclusion of such
testing; and
(3) require that all costs associated with such testing and dismantling
be covered by the individual or entity conducting the testing, or
on whose behalf the testing is conducted.
(c) Rule of Construction- Nothing in this section shall be construed
to alter, limit, or extend the availability of flood insurance to any
structure that may employ, utilize, or apply any technology tested under
subsection (b).
SEC. 26. 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 inserting after section 1313 the following:
`SEC. 1314. PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION PROGRAMS.
`(a) Requirement to Participate- In the case of the occurrence of a
major disaster, as defined in section 102 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122) that may
have resulted in flood damage under the flood insurance program established
under this chapter and other personal lines residential property insurance
coverage offered by a State regulated insurer, 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 major
disaster, the Director shall cause representatives of the flood insurance
program to participate in such a State program where claims under the
flood insurance program are involved to expedite settlement of flood
damage claims resulting from such disaster.
`(b) Extent of Participation- In satisfying the requirements of subsection
(a), the Director shall require that each representative of the Director--
`(1) be certified for purposes of the flood insurance program to settle
claims against such program resulting from such disaster in amounts
up to the limits of policies under such program;
`(2) attend State-sponsored mediation meetings regarding flood insurance
claims resulting from such disaster at such times and places as may
be arranged by the State;
`(3) participate in good faith negotiations toward the settlement
of such claims with policyholders of coverage made available under
the flood insurance program; and
`(4) finalize the settlement of such claims on behalf of the flood
insurance program with such policyholders.
`(c) Coordination- Representatives of the Director shall at all times
coordinate their activities with insurance officials of the State and
representatives of insurers for the purposes of consolidating and expediting
settlement of claims under the national flood insurance program resulting
from such disaster.
`(d) Qualifications of Mediators- Each State mediator participating
in State-sponsored mediation under this section shall be--
`(1)(A) a member in good standing of the State bar in the State in
which the mediation is to occur with at least 2 years of practical
experience; and
`(B) an active member of such bar for at least 1 year prior to the
year in which such mediator's participation is sought; or
`(2) a retired trial judge from any United States jurisdiction who
was a member in good standing of the bar in the State in which the
judge presided for at least 5 years prior to the year in which such
mediator's participation is sought.
`(e) Mediation Proceedings and Documents Privileged- As a condition
of participation, all statements made and documents produced pursuant
to State-sponsored mediation involving representatives of the Director
shall be deemed privileged and confidential settlement negotiations
made in anticipation of litigation.
`(f) Liability, Rights, or Obligations Not Affected- Participation in
State-sponsored mediation, as described in this section does not--
`(1) affect or expand the liability of any party in contract or in
tort; or
`(2) affect the rights or obligations of the parties, as established--
`(A) in any regulation issued by the Director, including any regulation
relating to a standard flood insurance policy;
`(C) under any other provision of Federal law.
`(g) Exclusive Federal Jurisdiction- Participation in State-sponsored
mediation shall not alter, change, or modify the original exclusive
jurisdiction of United States courts, as set forth in this Act.
`(h) Cost Limitation- Nothing in this section shall be construed to
require the Director or a representative of the Director to pay additional
mediation fees relating to flood insurance claims associated with a
State-sponsored mediation program in which such representative of the
Director participates.
`(i) Exception- In the case of the occurrence of a major disaster that
results in flood damage claims under the national flood insurance program
and that 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
under section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance
Reform Act of 2004 (42 U.S.C. 4011 note) and the regulations issued
pursuant to such section shall apply exclusively.
`(j) Representatives of the 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 under section 205 of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note).'.
SEC. 27. REITERATION OF FEMA RESPONSIBILITIES UNDER THE 2004 REFORM
ACT.
(a) Minimum Training and Education Requirements- The Director shall
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,
as such standards were determined by the Director in the notice published
in the Federal Register on 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).
(b) Report on the Overall Implementation of the Reform Act of 2004-
Not later than 3 months after the date of the enactment of this Act,
the Director shall submit a report to Congress--
(1) describing the implementation of each provision of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat.
712);
(2) identifying each regulation, order, notice, and other material
issued by the Director in implementing each provision of that Act;
(3) explaining any statutory or implied deadlines that have not been
met; and
(4) providing an estimate of when the requirements of such missed
deadlines will be fulfilled.
SEC. 28. ADDITIONAL AUTHORITY OF FEMA TO COLLECT INFORMATION ON CLAIMS
PAYMENTS.
(a) In General- The Director shall collect, from property and casualty
insurance companies that are authorized by the Director to participate
in the Write Your Own program any information and data needed to determine
the accuracy of the resolution of flood claims filed on any property
insured with a standard flood insurance policy obtained under the program
that was subject to a flood.
(b) Type of Information To Be Collected- The information and data to
be collected under subsection (a) may include--
(1) any adjuster estimates made as a result of flood damage, and if
the insurance company also insures the property for wind damage--
(A) any adjuster estimates for both wind and flood damage;
(B) the amount paid to the property owner for wind and flood claims;
(C) the total amount paid to the policyholder for damages as a result
of the event that caused the flooding and other losses;
(2) any amounts paid to the policyholder by the insurance company
for damages to the insured property other than flood damages; and
(3) the total amount paid to the policyholder by the insurance company
for all damages incurred to the insured property as a result of the
flood.
SEC. 29. EXPENSE REIMBURSEMENTS OF INSURANCE COMPANIES.
(a) Submission of Biennial Reports-
(1) TO THE DIRECTOR- Not later than 20 days after the date of enactment
of this Act, each property and casualty insurance company that is
authorized by the Director to participate in the Write Your Own program
shall submit to the Director any biennial report prepared in the prior
5 years by such company.
(2) TO GAO- Not later than 10 days after the submission of the biennial
reports under paragraph (1), the Director shall submit all such reports
to the Comptroller General of the United States.
(3) NOTICE TO CONGRESS OF FAILURE TO COMPLY- The Director shall notify
and report to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the House
of Representatives on any property and casualty insurance company
participating in the Write Your Own program that failed to submit
its biennial reports as required under paragraph (1).
(b) FEMA Rulemaking on Expenses of WYO Program- Not later than 180 days
after the date of enactment of this Act, the Director shall conduct
a rulemaking proceeding to devise a data collection methodology to allow
the Federal Emergency Management Agency to collect consistent information
on the expenses (including the operating and administrative expenses
for adjustment of claims) of property and casualty insurance companies
participating in the Write Your Own program for selling, writing, and
servicing, standard flood insurance policies.
(c) Submission of Expense Reports- Not later than 60 days after the
effective date of the final rule established pursuant to subsection
(b), each property and casualty insurance company participating in the
Write Your Own program shall submit a report to the Director that details
for the prior 5 years the expense levels of each such company for selling,
writing, and servicing standard flood insurance policies based on the
methodologies established under subsection (b).
(d) FEMA Rulemaking on Reimbursement of Expenses Under the WYO Program-
Not later than 15 months after the date of enactment of this Act, the
Director shall conduct a rulemaking proceeding to formulate revised
expense reimbursements to property and casualty insurance companies
participating in the Write Your Own program for their expenses (including
their operating and administrative expenses for adjustment of claims)
in selling, writing, and servicing standard flood insurance policies,
including how such companies shall be reimbursed in both catastrophic
and non-catastrophic years. Such reimbursements shall be structured
to ensure reimbursements track the actual expenses, including standard
business costs and operating expenses, of such companies as close as
practicably possible.
(e) Report of the Director- Not later than 60 days after the effective
date of any final rule established pursuant to subsection (b) or subsection
(d), the Director shall submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services
of the House of Representatives a report containing--
(1) the specific rationale and purposes of such rule;
(2) the reasons for the adoption of the policies contained in such
rule; and
(3) the degree to which such rule accurately represents the true operating
costs and expenses of property and casualty insurance companies participating
in the Write Your Own program.
(f) GAO Study and Report on Expenses of WYO Program-
(1) STUDY- Not later than 180 days after the effective date of the
final rule established pursuant to subsection (d), the Comptroller
General of the United States shall--
(A) conduct a study on the efficacy, adequacy, and sufficiency of
the final rules established pursuant to subsections (b) and (d);
and
(B) report to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the House
of Representatives on the findings of the study conducted under
subparagraph (A).
(2) GAO AUTHORITY- In conducting the study and report required under
paragraph (1), the Comptroller General--
(A) may use any previous findings, studies, or reports that the
Comptroller General previously completed on the Write Your Own program;
(i) the final rules established pursuant to subsections (b) and
(d) allow the Federal Emergency Management Agency to access adequate
information regarding the actual expenses of property and casualty
insurance companies participating in the Write Your Own program;
and
(ii) the actual reimbursements paid out under the final rule established
in subsection (d) accurately reflect the expenses reported by
property and casualty insurance companies participating in the
Write Your Own program, including the standard business costs
and operating expenses of such companies; and
(C) shall analyze the effect of such rules on the level of participation
of property and casualty insurers in the Write Your Own program.
SEC. 30. EXTENSION OF PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE
LOSS PROPERTIES.
(a) In General- Section 1361A of the National Flood Insurance Act of
1968 (42 U.S.C. 4102a) is amended--
(1) in subsection (k)(1)--
(A) in the first sentence, by striking `in each of fiscal years
2005, 2006, 2007, 2008, and 2009' and inserting `in each fiscal
year through fiscal year 2013'; and
(B) by adding at the end the following new sentence: `For fiscal
years 2008 through the 2013, the total amount that the Director
may use to provide assistance under this section shall not exceed
$240,000,000.'; and
(2) by striking subsection (l).
(b) Report to Congress on Implementation Status- Not later than 6 months
after the date of enactment of this Act, the Director shall report to
the Committee on Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of Representatives
on the status of the implementation of the pilot program for severe
repetitive loss properties authorized under section 1361A of the National
Flood Insurance Act of 1968 (42 U.S.C. 4102a).
(c) Rulemaking- No later than 90 days after the date of enactment of
this Act, the Director shall issue final rules to carry out the severe
repetitive loss pilot program authorized under section 1361A of the
National Flood Insurance Act of 1968 (42 U.S.C. 4102a).
SEC. 31. FLOOD INSURANCE ADVOCATE.
Chapter II of the National Flood Insurance Act of 1968 is amended by
inserting after section 1330 (42 U.S.C. 4041) the following new section:
`SEC. 1330A. OFFICE OF THE FLOOD INSURANCE ADVOCATE.
`(a) Establishment of Position-
`(1) IN GENERAL- There shall be in the Federal Emergency Management
Agency an Office of the Flood Insurance Advocate which shall be headed
by the National Flood Insurance Advocate. The National Flood Insurance
Advocate shall report directly to the Director and shall, to the extent
amounts are provided pursuant to subsection (f), be compensated at
the same rate as the highest rate of basic pay established for the
Senior Executive Service under section 5382 of title 5, United States
Code, or, if the Director so determines, at a rate fixed under section
9503 of such title.
`(2) APPOINTMENT- The National Flood Insurance Advocate shall be appointed
by the Director and the flood insurance advisory committee established
pursuant to section 1318 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 2 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
(f), the National Flood Insurance Advocate may employ such personnel
as may be necessary to carry out the duties of the Office.
`(b) Functions of Office-
`(1) IN GENERAL- It shall be the function of the Office of the Flood
Insurance Advocate to--
`(A) assist insureds under the national flood insurance program
in resolving problems with the Federal Emergency Management Agency
relating to such program;
`(B) identify areas in which such insureds have problems in dealings
with the Federal Emergency Management Agency relating to such program;
`(C) propose changes in the administrative practices of the Federal
Emergency Management Agency to mitigate problems identified under
subparagraph (B); and
`(D) identify potential legislative, administrative, or regulatory
changes which may be appropriate to mitigate such problems.
`(A) ACTIVITIES- Not later than December 31 of each calendar year,
the National Flood Insurance Advocate shall report to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives on the activities
of the Office of the Flood Insurance Advocate during the fiscal
year ending during such calendar year. Any such report shall contain
a full and substantive analysis of such activities, in addition
to statistical information, and shall--
`(i) identify the initiatives the Office of the Flood Insurance
Advocate has taken on improving services for insureds under the
national flood insurance program and responsiveness of the Federal
Emergency Management Agency with respect to such initiatives;
`(ii) describe the nature of recommendations made to the Director
under subsection (e);
`(iii) contain a summary of the most serious problems encountered
by such insureds, including a description of the nature of such
problems;
`(iv) contain an inventory of any items described in clauses (i),
(ii), and (iii) for which action has been taken and the result
of such action;
`(v) contain an inventory of any items described in clauses (i),
(ii), and (iii) for which action remains to be completed and the
period during which each item has remained on such inventory;
`(vi) contain an inventory of any items described in clauses (i),
(ii), and (iii) for which no action has been taken, the period
during which each item has remained on such inventory and the
reasons for the inaction;
`(vii) identify any Flood Insurance Assistance Recommendation
which was not responded to by the Director in a timely manner
or was not followed, as specified under subsection (e);
`(viii) contain recommendations for such administrative and legislative
action as may be appropriate to resolve problems encountered by
such insureds;
`(ix) identify areas of the law or regulations relating to the
national flood insurance program that impose significant compliance
burdens on such insureds or the Federal Emergency Management Agency,
including specific recommendations for remedying these problems;
`(x) identify the most litigated issues for each category of such
insureds, including recommendations for mitigating such disputes;
and
`(xi) include such other information as the National Flood Insurance
Advocate may deem advisable.
`(B) DIRECT SUBMISSION OF REPORT- Each report required under this
paragraph shall be provided directly to the committees identified
in subparagraph (A) without any prior review or comment from the
Director, the Secretary of Homeland Security, or any other officer
or employee of the Federal Emergency Management Agency or the Department
of Homeland Security, or the Office of Management and Budget.
`(3) OTHER RESPONSIBILITIES- The National Flood Insurance Advocate
shall--
`(A) monitor the coverage and geographic allocation of regional
offices of flood insurance advocates;
`(B) develop guidance to be distributed to all Federal Emergency
Management Agency officers and employees having duties with respect
to the national flood insurance program, outlining the criteria
for referral of inquiries by insureds under such program to regional
offices of flood insurance advocates;
`(C) ensure that the local telephone number for each regional office
of the flood insurance advocate is published and available to such
insureds served by the office; and
`(D) establish temporary State or local offices where necessary
to meet the needs of qualified insureds following a flood event.
`(A) IN GENERAL- The National Flood Insurance Advocate shall have
the responsibility and authority to--
`(i) appoint regional flood insurance advocates in a manner that
will provide appropriate coverage based upon regional flood insurance
program participation; and
`(ii) hire, evaluate, and take personnel actions (including dismissal)
with respect to any employee of any regional office of a flood
insurance advocate described in clause (i).
`(B) CONSULTATION- The National Flood Insurance Advocate may consult
with the appropriate supervisory personnel of the Federal Emergency
Management Agency in carrying out the National Flood Insurance Advocate's
responsibilities under this paragraph.
`(c) Responsibilities of Director- The Director shall establish procedures
requiring a formal response consistent with the requirements of subsection
(e)(3) to all recommendations submitted to the Director by the National
Flood Insurance Advocate.
`(d) Operation of Regional Offices-
`(1) IN GENERAL- Each regional flood insurance advocate appointed
pursuant to subsection (b)--
`(A) shall report to the National Flood Insurance Advocate or delegate
thereof;
`(B) may consult with the appropriate supervisory personnel of the
Federal Emergency Management Agency regarding the daily operation
of the regional office of the flood insurance advocate;
`(C) shall, at the initial meeting with any insured under the national
flood insurance program seeking the assistance of a regional office
of the flood insurance advocate, notify such insured that the flood
insurance advocate offices operate independently of any other Federal
Emergency Management Agency office and report directly to Congress
through the National Flood Insurance Advocate; and
`(D) may, at the flood insurance advocate's discretion, not disclose
to the Director contact with, or information provided by, such insured.
`(2) MAINTENANCE OF INDEPENDENT COMMUNICATIONS- Each regional office
of the flood insurance advocate shall maintain a separate phone, facsimile,
and other electronic communication access.
`(e) Flood Insurance Assistance Recommendations-
`(1) AUTHORITY TO ISSUE- Upon application filed by a qualified insured
with the Office of the Flood Insurance Advocate (in such form, manner,
and at such time as the Director shall by regulation prescribe), the
National Flood Insurance Advocate may issue a Flood Insurance Assistance
Recommendation, if the Advocate finds that the qualified insured is
suffering a significant hardship, such as a significant delay in resolving
claims where the insured is incurring significant costs as a result
of such delay, or where the insured is at risk of adverse action,
including the loss of property, as a result of the manner in which
the flood insurance laws are being administered by the Director.
`(2) TERMS OF A FLOOD INSURANCE ASSISTANCE RECOMMENDATION- The terms
of a Flood Insurance Assistance Recommendation may recommend to the
Director that the Director, within a specified time period, cease
any action, take any action as permitted by law, or refrain from taking
any action, including the payment of claims, with respect to the qualified
insured under any other provision of law which is specifically described
by the National Flood Insurance Advocate in such recommendation.
`(3) DIRECTOR RESPONSE- Not later than 15 days after the receipt of
any Flood Insurance Assistance Recommendation under this subsection,
the Director shall respond in writing as to--
`(A) whether such recommendation was followed;
`(B) why such recommendation was or was not followed; and
`(C) what, if any, additional actions were taken by the Director
to prevent the hardship indicated in such recommendation.
`(4) DEFINITIONS- For purposes of this subsection:
`(A) NATIONAL FLOOD INSURANCE ADVOCATE- The term `National Flood
Insurance Advocate' includes any designee of the National Flood
Insurance Advocate.
`(B) QUALIFIED INSURED- The term `qualified insured' means an insured
under coverage provided under the national flood insurance program
under this title.
`(f) Funding- Pursuant to section 1310(a)(8), the Director may use amounts
from the National Flood Insurance Fund to fund the activities of the
Office of the Flood Advocate in each of fiscal years 2008 through 2013,
except that the amount so used in each such fiscal year may not exceed
$5,000,000 and shall remain available until expended. Notwithstanding
any other provision of this title, amounts made available pursuant to
this subsection shall not be subject to offsetting collections through
premium rates for flood insurance coverage under this title.'.
SEC. 32. STUDIES AND REPORTS.
(a) Report on Expanding the National Flood Insurance Program- Not l
