House Report 110-340 - FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007

[House Report 110-340]
[From the U.S. Government Publishing Office]

110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-340

======================================================================

FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007

_______

September 24, 2007.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed

_______

Mr. Frank of Massachusetts, from the Committee on Financial Services,
submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 3121]

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred the
bill (H.R. 3121) 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,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.

CONTENTS

Page
Amendment........................................................ 2
Purpose and Summary.............................................. 17
Background and Need for Legislation.............................. 17
Hearings......................................................... 19
Committee Consideration.......................................... 21
Committee Votes.................................................. 21
Committee Oversight Findings..................................... 25
Performance Goals and Objectives................................. 25
New Budget Authority, Entitlement Authority, and Tax Expenditures 26
Committee Cost Estimate.......................................... 26
Congressional Budget Office Estimate............................. 26
Federal Mandates Statement....................................... 32
Advisory Committee Statement..................................... 32
Constitutional Authority Statement............................... 32
Applicability to Legislative Branch.............................. 32
Earmark Identification........................................... 33
Exchange of Committee Correspondence............................. 33
Section-by-Section Analysis of the Legislation................... 34
Changes in Existing Law Made by the Bill, as Reported............ 38
Additional Views................................................. 60

Amendment

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Flood Insurance
Reform and Modernization Act of 2007''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Study regarding status of pre-firm properties and mandatory
purchase requirement for natural 100-year floodplain and non-federally
related loans.
Sec. 4. Phase-in of actuarial rates for nonresidential properties and
non-primary residences.
Sec. 5. Exception to waiting period for effective date of policies.
Sec. 6. Enforcement.
Sec. 7. 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. Increase in 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. 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--
(1) in subsection (c)--
(A) in the matter preceding paragraph (1), by
striking ``the limitations provided under paragraphs
(1) and (2)'' and inserting ``subsection (e)''; and
(B) in paragraph (1), by striking ``, except'' and
all that follows through ``subsection (e)''; and
(2) in subsection (e), by striking ``paragraph (2) or (3)''
and inserting ``paragraph (4)''.
(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--
(1) in paragraph (5)--
(A) in the first sentence, by striking ``$350'' and
inserting ``$2,000''; and
(B) in the last sentence, by striking ``$100,000''
and inserting ``$1,000,000; except that such limitation
shall not apply to a regulated lending institution or
enterprise for a calendar year if, in any three (or
more) of the five calendar years immediately preceding
such calendar year, the total amount of penalties
assessed under this subsection against such lending
institution or enterprise was $1,000,000''; and
(2) in paragraph (6), by adding after the period at the end
the following: ``No penalty may be imposed under this
subsection on a regulated lending institution or enterprise
that has made a good faith effort to comply with the
requirements of the provisions referred to in paragraph (2) or
for any non-material violation of such requirements.''.

SEC. 7. 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 land use and control measures (with
effective enforcement provisions) which the Director finds are
consistent with the comprehensive criteria for land management
and use relating to windstorms establish pursuant to section
1361(d)(2).
``(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--
``(i) for any single-family dwelling,
$500,000; and
``(ii) for any structure containing more than
one dwelling unit, $500,000 for each separate
dwelling unit in the structure; 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
``(ii) $750,000 for--
``(I) any contents related to such
structure;
``(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:
``(d) Windstorms.--
``(1) Studies and investigations.--The Director shall carry
out studies and investigations under this section to determine
appropriate measures in windstorm-prone areas as to land
management and use, windstorm zoning, and windstorm damage
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.
``(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
(3) in paragraph (4), by striking ``$500,000'' each place
such term appears and inserting ``$670,000''.

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;
(2) in paragraph (5)--
(A) by inserting ``pursuant to paragraph (2), (3), or
(4)'' after ``any flood insurance coverage''; and
(B) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following new paragraphs:
``(6) in the case of any residential property, each renewal
or new contract for flood insurance coverage shall provide not
less than $1,000 aggregate liability per dwelling unit for any
necessary increases in living expenses incurred by the insured
when losses from a flood make the residence unfit to live in,
which coverage shall be available only at chargeable rates that
are not less than the estimated premium rates for such coverage
determined in accordance with section 1307(a)(1);
``(7) in the case of any residential property, optional
coverage for additional living expenses described in paragraph
(6) shall be made available to every insured upon renewal and
every applicant in excess of the limits provided in paragraph
(6) in such amounts and at such rates as the Director shall
establish, except that such chargeable rates shall not be less
than the estimated premium rates for such coverage determined
in accordance with section 1307(a)(1);
``(8) in the case of any residential property, optional
coverage for losses, resulting from floods, to improvements and
personal property located in basements, crawl spaces, and other
enclosed areas under buildings that are not covered by primary
flood insurance coverage under this title, shall be made
available to every insured upon renewal and every applicant,
except that such coverage shall be made available only at
chargeable rates that are not less than the estimated premium
rates for such coverage determined in accordance with section
1307(a)(1);
``(9) in the case of any commercial property 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. INCREASE IN BORROWING AUTHORITY.

(a) Borrowing Authority.--The first sentence of subsection (a) of
section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C.
4016(a)), as amended by the National Flood Insurance Program Further
Enhanced Borrowing Authority Act of 2005 (Public Law 109-106; 119 Stat.
2288), is amended by striking ``$20,775,000,000'' and inserting
``$21,500,000,000''.
(b) FEMA Report.--Not later than the expiration of the 6-month period
beginning on the date of the enactment of this Act, the Director of the
Federal Emergency Management Agency shall submit a report to the
Congress setting forth a plan for repaying within 10 years all amounts,
including any amounts previously borrowed but not yet repaid, pursuant
to increase in borrowing authority authorized under the amendments made
by subsection (a).

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-
Bereueter-Blumenauer Flood Insurance Reform Act of 2004 (Public
Law 108-264; 118 Stat. 726) and regulations issued pursuant to
such section shall apply exclusively.
``(i) Representatives of Director.--For purposes of this section, the
term `representatives of the Director' means representatives of the
national flood insurance program who participate in the appeals process
established pursuant to section 205 of the Bunning-Bereueter-Blumenauer
Flood Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat. 726)
and regulations issued pursuant to such section.''.

SEC. 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) in the section heading, by striking ``report to the
president'' and inserting ``annual report to congress'';
(2) in subsection (a)--
(A) by striking ``biennially'';
(B) by striking ``the President for submission to'';
and
(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.
``(2) Inclusions.--
``(A) Covered areas.--Each map updated under this
subsection shall include a depiction of--
``(i) the 500-year floodplain;
``(ii) areas that could be inundated as a
result of the failure of a levee, as determined
by the Director; and
``(iii) areas that could be inundated as a
result of the failure of a dam, as identified
under the National Dam Safety Program Act (33
U.S.C. 467 et seq.).
``(B) Other inclusions.--In updating maps under this
subsection, the Director may include--
``(i) any relevant information on coastal
inundation from--
``(I) an applicable inundation map of
the Corps of Engineers; and
``(II) data of the National Oceanic
and Atmospheric Administration relating
to storm surge modeling;
``(ii) any relevant information of the
Geographical Service on stream flows, watershed
characteristics, and topography that is useful
in the identification of flood hazard areas, as
determined by the Director; and
``(iii) a description of any hazard that
might impact flooding, including, as determined
by the Director--
``(I) land subsidence and coastal
erosion areas;
``(II) sediment flow areas;
``(III) mud flow areas;
``(IV) ice jam areas; and
``(V) areas on coasts and inland that
are subject to the failure of
structural protective works, such as
levees, dams, and floodwalls.
``(3) Standards.--In updating and maintaining maps under this
subsection, the Director shall establish standards to--
``(A) ensure that maps are adequate for--
``(i) flood risk determinations; and
``(ii) use by State and local governments in
managing development to reduce the risk of
flooding;
``(B) facilitate the Director, in conjunction with
State and local governments, to identify and use
consistent methods of data collection and analysis in
developing maps for communities with similar flood
risks, as determined by the Director; and
``(C) ensure that emerging weather forecasting
technology is used, where practicable, in flood map
evaluations and the identification of potential risk
areas.
``(4) Hurricanes katrina and rita mapping priority.--In
updating and maintaining maps under this subsection, the
Director shall--
``(A) give priority to the updating and maintenance
of maps of coastal areas affected by Hurricane Katrina
or Hurricane Rita to provide guidance with respect to
hurricane recovery efforts; and
``(B) use the process of updating and maintaining
maps under subparagraph (A) as a model for updating and
maintaining other maps.
``(5) 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.
``(6) 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.
``(7) 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).
``(8) Authorization of appropriations.--There is authorized
to be appropriated to the Director to carry out this subsection
$400,000,000 for each of fiscal years 2008 through 2013.''.
(b) Reestablishment of Technical Mapping Advisory Council for Ongoing
Mapping Program.--
(1) Reestablishment.--There is reestablished the Technical
Mapping Advisory Council, in accordance with this subsection
and section 576 of the National Flood Insurance Reform Act of
1994 (42 U.S.C. 4101 note).
(2) Membership.--Paragraph (1) of section 576(b) of the
National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101
note) is amended--
(A) in the matter preceding subparagraph (A), by
striking ``10'' and inserting ``14'';
(B) by redesignating subparagraphs (E), (F), (G),
(H), (I), and (J) as subparagraphs (F), (G), (H), (K),
(N), and (O), 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;''.
(3) Terms of members and appointment.--Section 576(b) of the
National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101
note) is amended by adding at the end the following new
paragraph:
``(3) Terms of members.--
``(A) In general.--Each member of the Council
pursuant to any of subparagraphs (B) through (N) of
paragraph (1) shall be appointed for a term of 5 years,
except as provided in subparagraphs (B) and (C).
``(B) Terms of initial appointees.--As designated by
the Director (or the designee of the Director) at the
time of appointment, of the members of the Council
first appointed pursuant to subparagraph (D)--
``(i) 4 shall be appointed for a term of 1
year;
``(ii) 4 shall be appointed for a term of 3
years; and
``(iii) 5 shall be appointed for a term of 5
years.
``(C) Vacancies.--Any member of the Council appointed
to fill a vacancy occurring before the expiration of
the term for which the member's predecessor was
appointed shall be appointed only for the remainder of
that term. A member may serve after the expiration of
that member's term until a successor has taken office.
A vacancy in the Council shall be filled in the manner
in which the original appointment was made.
``(D) Initial appointment.--The Director, or the
Director's designee, shall take action as soon as
possible after the date of the enactment of the Flood
Insurance Reform and Modernization Act of 2007 to
appoint the members of the Council pursuant to this
subsection.''.
(4) Duties.--Subsection (c) of section 576 of the National
Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is
amended to read as follows:
``(c) Duties.--The Council shall--
``(1) make recommendations to the Director for improvements
to the flood map modernization program under section 1360(k) of
the National Flood Insurance Act of 1968 (42 U.S.C. 41010(k));
``(2) make recommendations to the Director for maintaining a
modernized inventory of flood hazard maps and information; and
``(3) submit an annual report to the Director that contains a
description of the activities and recommendations of the
Council.''.
(5) Elimination of termination.--Section 576 of the National
Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is
amended by striking subsection (k) and inserting the following
new subsection:
``(k) Continued Existence.--Section 14(a)(2)(B) of the Federal
Advisory Committee Act (5 U.S.C. App.; relating to termination of
advisory committees) shall not apply to the Council.''.
(c) Post-Disaster Flood Elevation Determinations.--Section 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''.

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

SEC. 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.

Purpose and Summary

H.R. 3121, the Flood Insurance Reform and Modernization Act
of 2007, reauthorizes the National Flood Insurance Program
(``NFIP''), provides for reforms to the NFIP, improves flood
mapping, and expands the NFIP to provide for multiple peril
coverage. The bill reauthorizes the NFIP for five years through
2013 (the current authorization for the NFIP expires September
30, 2008) and ensures its continued viability by encouraging
broader participation, increasing financial accountability,
eliminating unnecessary rate subsidies, and updating the flood
insurance program to meet the needs of the 21st century.
In an effort to make the NFIP more actuarially sound, the
bill phases out subsidized rates on commercial properties,
vacation homes, and second homes built before 1974. Multifamily
rental properties are excluded from the phase-out of the
subsidy.
Additional optional policy coverage is added, allowing
business owners to purchase business interruption coverage at
actuarial rates to better prepare them to meet payroll and
other obligations during the next big storm. Additionally,
optional coverage at actuarial rates for basement improvements
and replacement cost of contents is added. For the first time
since 1994, the bill updates maximum insurance coverage limits
for residential and nonresidential properties.
The bill requires FEMA to conduct a thorough review of the
nation's flood maps. The bill makes the updating and
modernization of flood maps an ongoing process, and increases
funding for mapping.
Provisions protecting policy holders include clarification
of disclosures about flood insurance availability and plain
language information on flood insurance policies. Landlords
must notify tenants of contents coverage availability. Further,
the bill makes flood insurance effective immediately upon
purchase of a home.
To encourage participation in the NFIP, the bill provides
for a new community outreach program, and provides for a study
of how to increase participation by low-income families. In
order to help ensure that those homeowners who should have
flood insurance do have flood insurance, the bill increases the
fines on lenders who do not enforce the mandatory flood
insurance policy purchase requirement for those who live in a
floodplain and hold a Federally-backed mortgage.
Additionally, the bill requires FEMA to report to Congress
annually on the financial status of the NFIP, increases the
amount FEMA can raise policy rates in any given year from 10
percent to 15 percent, and authorizes funding for additional
staff at FEMA to carry out the requirements of this bill.

Background and Need for Legislation

Congress created the NFIP in 1968, because flood insurance
was generally not available to most homeowners through the
private market. The NFIP is periodically reauthorized and was
significantly revised in 1973, 1977, 1994, and 2004. The NFIP
is administered through FEMA's Mitigation Directorate and is
currently authorized through September 30, 2008.
The NFIP generates premium revenue of approximately $2.4
billion annually, which in an average flood event year covers
all policy holder claims and operating expenses. The 2005
hurricane seasonresulted in significant claims, which premium
income could not cover. To cover the claims, the NFIP borrowed from the
U.S. Treasury. Before 2005 the NFIP's borrowing authority was limited
by statue to $1.5 billion. Congress amended the statutory limitation
three times since September 2005, increasing the NFIP's borrowing
authority from $1.5 billion to its current limit of $20.775 billion.
The NFIP was designed to provide homeowners with affordable
insurance protection against floods while alleviating
taxpayers' responsibility for flood losses paid out in the form
of post-disaster relief. The NFIP reduces future flood losses
through: (i) flood hazard identification; (ii) floodplain
management (i.e., land use controls and building requirements);
and, (iii) insurance protection. The NFIP is estimated to
reduce flood loss expenses to the Federal government by over $1
billion annually.
Ancillary to providing flood insurance under the NFIP, FEMA
also: (i) identifies and maps flood prone areas eligible to
participate in the program; and (ii) sets land use controls and
building requirements that flood-prone communities are required
to adopt and enforce in order to participate in the program and
make flood insurance available to their residents.
FEMA issues Flood Insurance Rate Maps (``FIRMs'') that
delineate areas, called Special Flood Hazard Areas (``SFHAs''),
determined to have a 1 percent chance of flooding in any given
year (the ``100-year floodplain''). Because FIRMs determine
where and at what rate insurance under the program is available
or required, outdated or inaccurate FIRMs result in flood prone
properties either being left out of the SFHAs, incorrectly
being included in the SFHAs, or being charged incorrect rates.
According to a June 2007 report issued by the Congressional
Budget Office (CBO), the actuarial soundness of the NFIP
depends on the accuracy of the flood maps. FEMA is currently
engaged in a multi-year flood map modernization program to
update, revise, and digitize over 100,000 paper maps.
Under the NFIP, FEMA also sets land use controls and
building requirements that communities located in SFHAs must
adopt and enforce within SFHAs in order for property owners to
be eligible for insurance under the program. Related to this
land use control function, the NFIP includes a mitigation
program through which grants are made to eligible entities to
implement planning and projects that reduce future flood
damage. Mitigation projects include such activities as
purchasing flood-prone homes and returning the land to natural
floodplain function, raising homes above the 100-year flood
level, relocating homes out of SFHAs, demolishing and
rebuilding compliant buildings, flood proofing nonresidential
buildings and other activities that reduce flood damage.
Insurance under the NFIP was initially optional and
available for all properties located in SFHAs. Homeowners,
renters, and business owners in participating communities
purchase coverage under the program either directly from the
NFIP or, most often, from private insurers that participate in
the Write Your Own (``WYO'') program. WYO insurers take
responsibility for policy administration and claims processing,
but assume no financial risk in settling claims.
In response to initially low participation in the NFIP, in
1973 Congress made the purchase of flood insurance mandatory
for all properties located in SFHAs with mortgages issued or
guaranteed by the federal government. By 1994, lax enforcement
of the mandatory purchase requirements led Congress to require
lenders to purchase coverage on behalf of and bill premiums to
mortgagees who failed to purchase coverage on their own (called
``forced placed insurance''). Since 1994, lenders who fail to
enforce the mandatory purchase requirement are subject to civil
penalties.
The NFIP has a two-tiered rate structure: (1) a subsidized
pre-FIRM rate for structures built before the 1974 mandatory
purchase requirement went into effect for all FIRM properties;
and, (2) an ``actuarial'' rate for structures built or
substantially improved after 1974. Pre-FIRM rates are
determined through a federal rule-making process with criteria
designed to encourage participation in the program and not, by
definition, to generate premium income sufficient to pay
anticipated claims on pre-FIRM properties.
Congress expected that, over time, the percentage of pre-
FIRM structures would decline and that most or all of the
structures insured under the program would be subject to
``actuarial'' rates. However, pre-FIRM structures continue to
represent approximately 24 percent of structures insured under
the NFIP. The NFIP uses its borrowing authority and its
``actuarial'' rate premiums to cover any shortfalls that result
from the program's two tier rate structure.
The program's ``actuarial'' rates are also designed, in
part, to encourage participation in the program. As a result,
these ``actuarial'' rates do not follow traditional rate-making
methods designed to generate premium income sufficient to pay
reasonably anticipated claims. Instead, rates under the program
are only designed to generate annual premium income equal to
the average annual claims paid by under the program since 1978.
In ``bad'' years, when actual annual claims exceed the
program's average annual claims, the NFIP has used its
borrowing authority to make-up the shortfall. In ``good''
years, when average annual claims exceeded actual annual
claims, the NFIP has either used surplus premiums to repay
(with interest) funds borrowed in ``bad'' years or has saved
surplus premiums to cover claims in future ``bad'' years.
With its borrowing authority capped at $1.5 billion, the
program had enough surplus premium income from ``good'' years
to repay the Treasury within a reasonable period of time and
avoiding significant interest expenses. The massive borrowing
necessary to pay claims from the 2005 hurricane season upset
the program's balance leaving the program with a current debt
of approximately $17.5 billion. The NFIP pays interest on the
outstanding debt of between $600 million to $800 million
annually.

Hearings

The Subcommittee on Housing and Community Opportunity held
a hearing entitled ``The Flood Insurance Reform and
Modernization Act of 2007, H.R. 1682'' on June 12, 2007. The
following witnesses testified:

PANEL ONE

Mr. Edward L. Connor, Deputy Assistant
Administrator for Insurance, Federal Emergency
Management Agency

PANEL TWO

Mr. Paul A. Osman, CFM, Illinois Department
of Natural Resources, on behalf of Association of State
Floodplains Managers, Inc.
Mr. David Maune, Ph.D., CP, CFM, on behalf
of Management Association for Private Photogrammetric
Surveyors
Mr. Curt Sumner, Executive Director,
American Congress on Surveying and Mapping
Mr. Mark Davey, President & CEO, Fidelity
National Insurance Company, on behalf of Property
Casualty Insurers Association of America
Mr. Thomas Minkler, President of the Clark-
Mortenson Agency, Inc., on behalf of Independent
Insurance Agents & Brokers of America, Inc.
Mr. Vince Malta, President, Malta & Co.,
Inc., on behalf of the National Association of Realtors
The Subcommittee on Housing and Community Opportunity held
a hearing entitled ``H.R. 920, the Multiple Peril Insurance Act
of 2007'' on July 17, 2007. The following witnesses testified:

PANEL ONE

The Honorable Richard H. Baker
The Honorable Gene Taylor
The Honorable Charlie Melancon
The Honorable Bobby Jindal

PANEL TWO

Mr. David I. Maurstad, Assistant
Administrator for Mitigation, Federal Emergency
Management Agency
The Honorable Phillip Swagel, Assistant
Secretary for Economic Policy, U.S. Department of the
Treasury

PANEL THREE

Ms. Pam Pogue, Vice Chair, Association of
State Floodplain Managers
Ms. Sandy Praeger, Commissioner, Kansas
Insurance Department, on behalf of the National
Association of Insurance Commissioners
Mr. Ted A. Majewski, Senior Vice President,
Harleysville Insurance, on behalf of the Property
Casualty Insurers, American Insurance Association, and
National Association of Mutual Insurance Companies
Ms. Cheryl Small, Policy Advisor, National
Flood Determination Association
Mr. W. Anderson Baker, III, CPCU, ARM,
Gillis, Ellis & Baker Inc.
Dr. Robert P. Hartwig, Ph.D., CPCU,
President and Chief Economist, Insurance Information
Institute
Mr. David Conrad, Senior Water Resources
Specialist, National Wildlife Federation

Committee Consideration

The Committee on Financial Services met in open session on
July 26, 2007, and ordered reported H.R. 3121, the Flood
Insurance Reform and Modernization Act of 2007, as amended, to
the House with a favorable recommendation by a record vote of
38 yeas and 29 nays.

Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Frank to report the bill, as amended, to the
House with a favorable recommendation was agreed to by a record
vote of 38 yeas and 29 nays (Record vote no. FC-56). The names
of Members voting for and against follow:

RECORD VOTE NO. FC-56
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank...................... X ........ ......... Mr. Bachus....... ........ X .........
Mr. Kanjorski.................. X ........ ......... Mr. Baker........ ........ ........ .........
Ms. Waters..................... X ........ ......... Ms. Pryce (OH)... ........ X .........
Mrs. Maloney................... X ........ ......... Mr. Castle....... ........ X .........
Mr. Gutierrez.................. X ........ ......... Mr. King (NY).... ........ X .........
Ms. Velazquez.................. X ........ ......... Mr. Royce........ ........ X .........
Mr. Watt....................... X ........ ......... Mr. Lucas........ ........ X .........
Mr. Ackerman................... X ........ ......... Mr. Paul......... ........ X .........
Ms. Carson..................... X ........ ......... Mr. Gillmor...... ........ X .........
Mr. Sherman.................... X ........ ......... Mr. LaTourette... X ........ .........
Mr. Meeks...................... X ........ ......... Mr. Manzullo..... ........ ........ .........
Mr. Moore (KS)................. X ........ ......... Mr. Jones........ X ........ .........
Mr. Capuano.................... X ........ ......... Mrs. Biggert..... ........ X .........
Mr. Hinojosa................... ........ ........ ......... Mr. Shays........ ........ X .........
Mr. Clay....................... X ........ ......... Mr. Miller (CA).. ........ X .........
Mrs. McCarthy.................. X ........ ......... Mrs. Capito...... ........ X .........
Mr. Baca....................... X ........ ......... Mr. Feeney....... ........ X .........
Mr. Lynch...................... X ........ ......... Mr. Hensarling... ........ X .........
Mr. Miller (NC)................ X ........ ......... Mr. Garrett (NJ). ........ X .........
Mr. Scott...................... X ........ ......... Ms. Brown-Waite.. ........ X .........
Mr. Green...................... X ........ ......... Mr. Barrett (SC). ........ X .........
Mr. Cleaver.................... X ........ ......... Mr. Gerlach...... ........ X .........
Ms. Bean....................... X ........ ......... Mr. Pearce....... ........ X .........
Ms. Moore (WI)................. X ........ ......... Mr. Neugebauer... ........ X .........
Mr. Davis (TN)................. X ........ ......... Mr. Price (GA)... ........ X .........
Mr. Sires...................... X ........ ......... Mr. Davis (KY)... ........ X .........
Mr. Hodes...................... X ........ ......... Mr. McHenry...... ........ X .........
Mr. Ellison.................... X ........ ......... Mr. Campbell..... ........ X .........
Mr. Klein...................... X ........ ......... Mr. Putnam....... ........ X .........
Mr. Mahoney (FL)............... X ........ ......... Mrs. Bachmann.... ........ X .........
Mr. Wilson..................... X ........ ......... Mr. Roskam....... ........ X .........
Mr. Perlmutter................. X ........ ......... Mr. Marchant..... ........ X .........
Mr. Murphy..................... X ........ ......... Mr. McCotter..... ........ X .........
Mr. Donnelly................... X ........ .........
Mr. Wexler..................... X ........ .........
Mr. Marshall................... X ........ .........
Mr. Boren...................... X ........ .........
----------------------------------------------------------------------------------------------------------------

The following amendments were disposed of by record votes.
The names of Members voting for and against follow:
An amendment by Mrs. Biggert, No. 1, an amendment in the
nature of a substitute striking all after the enacting clause
and inserting H.R. 1682, was not agreed to by a record vote of
30 yeas and 37 nays (Record vote no. FC-52):

RECORD VOTE NO. FC-52
--------------------------------------------------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mr. Frank....................................... ........ X ............... Mr. Bachus........................ X ........ .........
Mr. Kanjorski................................... ........ X ............... Mr. Baker......................... X ........ .........
Ms. Waters...................................... ........ X ............... Ms. Pryce (OH).................... X ........ .........
Mrs. Maloney.................................... ........ X ............... Mr. Castle........................ X ........ .........
Mr. Gutierrez................................... ........ X ............... Mr. King (NY)..................... X ........ .........
Ms. Velazquez................................... ........ X ............... Mr. Royce......................... X ........ .........
Mr. Watt........................................ ........ X ............... Mr. Lucas......................... X ........ .........
Mr. Ackerman.................................... ........ X ............... Mr. Paul.......................... X ........ .........
Ms. Carson...................................... ........ X ............... Mr. Gillmor....................... X ........ .........
Mr. Sherman..................................... ........ X ............... Mr. LaTourette.................... X ........ .........
Mr. Meeks....................................... ........ X ............... Mr. Manzullo...................... ........ ........ .........
Mr. Moore (KS).................................. ........ X ............... Mr. Jones......................... ........ X .........
Mr. Capuano..................................... ........ X ............... Mrs. Biggert...................... X ........ .........
Mr. Hinojosa.................................... ........ ........ ............... Mr. Shays......................... X ........ .........
Mr. Clay........................................ ........ X ............... Mr. Miller (CA)................... X ........ .........
Mrs. McCarthy................................... ........ X ............... Mrs. Capito....................... X ........ .........
Mr. Baca........................................ ........ X ............... Mr. Feeney........................ X ........ .........
Mr. Lynch....................................... ........ X ............... Mr. Hensarling.................... X ........ .........
Mr. Miller (NC)................................. ........ X ............... Mr. Garrett (NJ).................. X ........ .........
Mr. Scott....................................... ........ X ............... Ms. Brown-Waite................... X ........ .........
Mr. Green....................................... ........ X ............... Mr. Barrett (SC).................. X ........ .........
Mr. Cleaver..................................... ........ X ............... Mr. Gerlach....................... X ........ .........
Ms. Bean........................................ ........ X ............... Mr. Pearce........................ X ........ .........
Ms. Moore (WI).................................. ........ X ............... Mr. Neugebauer.................... X ........ .........
Mr. Davis (TN).................................. ........ X ............... Mr. Price (GA).................... X ........ .........
Mr. Sires....................................... ........ X ............... Mr. Davis (KY).................... X ........ .........
Mr. Hodes....................................... ........ X ............... Mr. McHenry....................... X ........ .........
Mr. Ellison..................................... ........ X ............... Mr. Campbell...................... X ........ .........
Mr. Klein....................................... ........ X ............... Mr. Putnam........................ X ........ .........
Mr. Mahoney (FL)................................ ........ X ............... Mrs. Bachmann..................... X ........ .........
Mr. Wilson...................................... ........ X ............... Mr. Roskam........................ X ........ .........
Mr. Perlmutter.................................. ........ X ............... Mr. Marchant...................... ........ ........ .........
Mr. Murphy...................................... ........ X ............... Mr. McCotter...................... X ........ .........
Mr. Donnelly.................................... ........ X ...............
Mr. Wexler...................................... ........ X ...............
Mr. Marshall.................................... ........ X ...............
Mr. Boren....................................... ........ X ...............
--------------------------------------------------------------------------------------------------------------------------------------------------------

An amendment by Ms. Brown-Waite, No. 12, striking Section 7
(multi-peril coverage) and inserting a study regarding
expansion of the national flood insurance program, was not
agreed to by a record vote of 31 yeas and 37 nays (Record vote
no. FC-53):

RECORD VOTE NO. FC-53
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank...................... ........ X ......... Mr. Bachus....... X ........ .........
Mr. Kanjorski.................. ........ X ......... Mr. Baker........ X ........ .........
Ms. Waters..................... ........ X ......... Ms. Pryce (OH)... X ........ .........
Mrs. Maloney................... ........ X ......... Mr. Castle....... X ........ .........
Mr. Gutierrez.................. ........ X ......... Mr. King (NY).... X ........ .........
Ms. Velazquez.................. ........ X ......... Mr. Royce........ X ........ .........
Mr. Watt....................... ........ X ......... Mr. Lucas........ X ........ .........
Mr. Ackerman................... ........ X ......... Mr. Paul......... X ........ .........
Ms. Carson..................... ........ X ......... Mr. Gillmor...... X ........ .........
Mr. Sherman.................... ........ X ......... Mr. LaTourette... X ........ .........
Mr. Meeks...................... ........ X ......... Mr. Manzullo..... ........ ........ .........
Mr. Moore (KS)................. ........ X ......... Mr. Jones........ ........ X .........
Mr. Capuano.................... ........ X ......... Mrs. Biggert..... X ........ .........
Mr. Hinojosa................... ........ ........ ......... Mr. Shays........ X ........ .........
Mr. Clay....................... ........ X ......... Mr. Miller (CA).. X ........ .........
Mrs. McCarthy.................. ........ X ......... Mrs. Capito...... X ........ .........
Mr. Baca....................... ........ X ......... Mr. Feeney....... X ........ .........
Mr. Lynch...................... ........ X ......... Mr. Hensarling... X ........ .........
Mr. Miller (NC)................ ........ X ......... Mr. Garrett (NJ). X ........ .........
Mr. Scott...................... ........ X ......... Ms. Brown-Waite.. X ........ .........
Mr. Green...................... ........ X ......... Mr. Barrett (SC). X ........ .........
Mr. Cleaver.................... ........ X ......... Mr. Gerlach...... X ........ .........
Ms. Bean....................... ........ X ......... Mr. Pearce....... X ........ .........
Ms. Moore (WI)................. ........ X ......... Mr. Neugebauer... X ........ .........
Mr. Davis (TN)................. ........ X ......... Mr. Price (GA)... X ........ .........
Mr. Sires...................... ........ X ......... Mr. Davis (KY)... X ........ .........
Mr. Hodes...................... ........ X ......... Mr. McHenry...... X ........ .........
Mr. Ellison.................... ........ X ......... Mr. Campbell..... X ........ .........
Mr. Klein...................... ........ X ......... Mr. Putnam....... X ........ .........
Mr. Mahoney (FL)............... ........ X ......... Mrs. Bachmann.... X ........ .........
Mr. Wilson..................... ........ X ......... Mr. Roskam....... X ........ .........
Mr. Perlmutter................. ........ X ......... Mr. Marchant..... X ........ .........
Mr. Murphy..................... ........ X ......... Mr. McCotter..... X ........ .........
Mr. Donnelly................... ........ X .........
Mr. Wexler..................... ........ X .........
Mr. Marshall................... ........ X .........
Mr. Boren...................... ........ X .........
----------------------------------------------------------------------------------------------------------------

An amendment by Mr. Davis of Kentucky, No. 14, regarding
conditions for making coverage available, was not agreed to by
a record vote of 30 yeas and 37 nays (Record vote no. FC-54):

RECORD VOTE NO. FC-54
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank...................... ........ X ......... Mr. Bachus....... X ........ .........
Mr. Kanjorski.................. ........ X ......... Mr. Baker........ ........ ........ .........
Ms. Waters..................... ........ X ......... Ms. Pryce (OH)... X ........ .........
Mrs. Maloney................... ........ X ......... Mr. Castle....... X ........ .........
Mr. Gutierrez.................. ........ X ......... Mr. King (NY).... X ........ .........
Ms. Velazquez.................. ........ X ......... Mr. Royce........ X ........ .........
Mr. Watt....................... ........ X ......... Mr. Lucas........ X ........ .........
Mr. Ackerman................... ........ X ......... Mr. Paul......... X ........ .........
Ms. Carson..................... ........ X ......... Mr. Gillmor...... X ........ .........
Mr. Sherman.................... ........ X ......... Mr. LaTourette... X ........ .........
Mr. Meeks...................... ........ X ......... Mr. Manzullo..... ........ ........ .........
Mr. Moore (KS)................. ........ X ......... Mr. Jones........ ........ X .........
Mr. Capuano.................... ........ X ......... Mrs. Biggert..... X ........ .........
Mr. Hinojosa................... ........ ........ ......... Mr. Shays........ X ........ .........
Mr. Clay....................... ........ X ......... Mr. Miller (CA).. X ........ .........
Mrs. McCarthy.................. ........ X ......... Mrs. Capito...... X ........ .........
Mr. Baca....................... ........ X ......... Mr. Feeney....... X ........ .........
Mr. Lynch...................... ........ X ......... Mr. Hensarling... X ........ .........
Mr. Miller (NC)................ ........ X ......... Mr. Garrett (NJ). X ........ .........
Mr. Scott...................... ........ X ......... Ms. Brown-Waite.. X ........ .........
Mr. Green...................... ........ X ......... Mr. Barrett (SC). X ........ .........
Mr. Cleaver.................... ........ X ......... Mr. Gerlach...... X ........ .........
Ms. Bean....................... ........ X ......... Mr. Pearce....... X ........ .........
Ms. Moore (WI)................. ........ X ......... Mr. Neugebauer... X ........ .........
Mr. Davis (TN)................. ........ X ......... Mr. Price (GA)... X ........ .........
Mr. Sires...................... ........ X ......... Mr. Davis (KY)... X ........ .........
Mr. Hodes...................... ........ X ......... Mr. McHenry...... X ........ .........
Mr. Ellison.................... ........ X ......... Mr. Campbell..... X ........ .........
Mr. Klein...................... ........ X ......... Mr. Putnam....... X ........ .........
Mr. Mahoney (FL)............... ........ X ......... Mrs. Bachmann.... X ........ .........
Mr. Wilson..................... ........ X ......... Mr. Roskam....... X ........ .........
Mr. Perlmutter................. ........ X ......... Mr. Marchant..... X ........ .........
Mr. Murphy..................... ........ X ......... Mr. McCotter..... X
Mr. Donnelly................... ........ X .........
Mr. Wexler..................... ........ X .........
Mr. Marshall................... ........ X .........
Mr. Boren...................... ........ X .........
----------------------------------------------------------------------------------------------------------------

An amendment by Mr. Price of Georgia, No. 17, striking
Section 26 (extension of deadline for filing proof of loss),
was not agreed to by a record vote of 24 yeas and 43 nays
(Record vote no. FC-55):

RECORD VOTE NO. FC-55
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank...................... ........ X ......... Mr. Bachus....... X ........ .........
Mr. Kanjorski.................. ........ X ......... Mr. Baker........ ........ ........ .........
Ms. Waters..................... ........ X ......... Ms. Pryce (OH)... ........ X .........
Mrs. Maloney................... ........ X ......... Mr. Castle....... ........ X .........
Mr. Gutierrez.................. ........ X ......... Mr. King (NY).... ........ X .........
Ms. Velazquez.................. ........ X ......... Mr. Royce........ X ........ .........
Mr. Watt....................... ........ X ......... Mr. Lucas........ X ........ .........
Mr. Ackerman................... ........ X ......... Mr. Paul......... X ........ .........
Ms. Carson..................... ........ X ......... Mr. Gillmor...... X ........ .........
Mr. Sherman.................... ........ X ......... Mr. LaTourette... ........ X .........
Mr. Meeks...................... ........ X ......... Mr. Manzullo..... ........ ........ .........
Mr. Moore (KS)................. ........ X ......... Mr. Jones........ ........ X .........
Mr. Capuano.................... ........ X ......... Mrs. Biggert..... X ........ .........
Mr. Hinojosa................... ........ ........ ......... Mr. Shays........ X ........ .........
Mr. Clay....................... ........ X ......... Mr. Miller (CA).. X ........ .........
Mrs. McCarthy.................. ........ X ......... Mrs. Capito...... X ........ .........
Mr. Baca....................... ........ X ......... Mr. Feeney....... X ........ .........
Mr. Lynch...................... ........ X ......... Mr. Hensarling... X ........ .........
Mr. Miller (NC)................ ........ X ......... Mr. Garrett (NJ). X ........ .........
Mr. Scott...................... ........ X ......... Ms. Brown-Waite). X ........ .........
Mr. Green...................... ........ X ......... Mr. Barrett (SC). X ........ .........
Mr. Cleaver.................... ........ X ......... Mr. Gerlach...... ........ X .........
Ms. Bean....................... ........ X ......... Mr. Pearce....... X ........ .........
Ms. Moore (WI)................. ........ X ......... Mr. Neugebauer... X ........ .........
Mr. Davis (TN)................. ........ X ......... Mr. Price (GA)... X ........ .........
Mr. Sires...................... ........ X ......... Mr. Davis (KY)... X ........ .........
Mr. Hodes...................... ........ X ......... Mr. McHenry...... X ........ .........
Mr. Ellison.................... ........ X ......... Mr. Campbell..... X ........ .........
Mr. Klein...................... ........ X ......... Mr. Putnam....... X ........ .........
Mr. Mahoney (FL)............... ........ X ......... Mrs. Bachmann.... X ........ .........
Mr. Wilson..................... ........ X ......... Mr. Roskam....... X ........ .........
Mr. Perlmutter................. ........ X ......... Mr. Marchant..... ........ X .........
Mr. Murphy..................... ........ X ......... Mr. McCotter..... X ........ .........
Mr. Donnelly................... ........ X .........
Mr. Wexler..................... ........ X .........
Mr. Marshall................... ........ X .........
Mr. Boren...................... ........ X .........
----------------------------------------------------------------------------------------------------------------

The following other amendments were also considered by the
Committee:
An amendment by Mr. Neugebauer, No. 2, directing FEMA to
conduct a study and report to Congress on inclusion of building
codes in floodplain management criteria, was agreed to by a
voice vote.
An amendment by Mr. Hinojosa, No. 3, regarding effective
date of ongoing flood mapping program, was agreed to by a voice
vote.
An amendment by Mr. Klein, No. 4, striking Section 4
(phase-in of actuarial rates for nonresidential properties and
non-primary residences) and inserting study on increasing
premiums for nonresidential properties and non-primary
residences, was withdrawn.
An en bloc amendment by Mr. Hinojosa, No. 5, requiring a
study of economic effects of charging actuarially-based premium
rates for pre-firm structures; effecting a change in membership
of technical mapping advisory council for ongoing mapping
program; and include residential property, including
multifamily rental property, for losses, was agreed to by a
voice vote.
An amendment by Mr. Hinojosa (and Mr. Green), No. 6,
ensuring that rental property used as primary residence is
covered, was agreed to by a voice vote.
An amendment by Mr. Hinojosa, No. 7, updating information
of mapping upon request of community, was agreed to by a voice
vote.
An amendment by Mr. Green (and Mr. Cleaver), No. 8,
providing for tenant notice of availability of contest
insurance, was agreed to by a voice vote.
An amendment by Mr. Cleaver, No. 9, preventing delay of
100-year maps, was agreed to by a voice vote.
An amendment by Mr. Garrett, No. 10, on pre-firm phase-in
properties, was agreed to by a voice vote.
An amendment by Mr. Boren, No. 11, regarding a report on
current efforts by FEMA to market and educate consumers
regarding benefits of obtaining coverage under the national
flood insurance program, was agreed to by a voice vote.
An amendment by Mr. Baker, No. 13, establishing an
effective date for Section 7 (multi-peril coverage), was agreed
to by a voice vote.
An amendment by Mr. Hensarling, No. 15, modifying the FEMA
report on borrowing authority, was agreed to by a voice vote.
An amendment by Mr. Price of Georgia, No. 16, requiring use
of supplemental forms in connection with flood insurance
policies, was agreed to by a voice vote.
An amendment by Mr. McHenry, No. 18, concerning a
requirement to cease offering coverage if borrowing to pay
claims, was agreed to by a voice vote.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held hearings and
made findings that are reflected in this report.

Performance Goals and Objectives

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H.R. 3121, the Flood Insurance Reform and Modernization Act
of 2007, reauthorizes the National Flood Insurance Program and
provides for reforms and changes to the program with the goal
of strengthening the program and ensuring its long-term
viability.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act.

Committee Cost Estimate

The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.

Congressional Budget Office Estimate

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:

September 20, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3121, the Flood
Insurance Reform and Modernization Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Daniel
Hoople.
Sincerely,
Peter R. Orszag.
Enclosure.

H.R. 3121--Flood Insurance Reform and Modernization Act of 2007

Summary: H.R. 3121 would authorize the National Flood
Insurance Program (NFIP) of the Federal Emergency Management
Agency (FEMA) to enter into and renew flood insurance policies
through 2013. Under current law, that authority would expire at
the end of 2008. The legislation also would increase the amount
that FEMA can borrow from the U.S. Treasury to cover expenses
of the NFIP from $20.8 billion to $21.5 billion. As a result,
CBO estimates that enacting H.R. 3121 would increase direct
spending by $725 million in 2009.
By raising certain civil penalties on lending institutions,
CBO estimates that the bill would increase revenues by $1
million per year. Finally, H.R. 3121 would authorize the
appropriation of nearly $2.8 billion over the 2008-2012 period
for mapping regions of the country at risk of flooding and for
other activities. CBO estimates that implementing those
provisions would increase discretionary spending by about $1.8
billion over the 2008-2012 period, assuming the appropriation
of the specified amounts.
H.R. 3121 would require FEMA to phase in actuarially sound
flood insurance premiums for owners of certain commercial
properties and some residential properties that are not the
owners' primary residences--if they do not currently pay
actuarial rates for flood insurance. The legislation also would
authorize FEMA to offer new types of insurance coverage
(including multiperil insurance for floods and windstorms) as
well as increase the maximum insurance coverage available for
structures and their contents. Moreover, H.R. 3121 would raise
the cap on the average annual premium increase allowed under
current law from 10 percent to 15 percent. CBO estimates that
enacting those provisions would have no significant net effect
on direct spending over the 2008-2017 period. (The increases in
premiums would yield an additional $3.1 billion in receipts
over that period, but they would have to be spent to cover the
NFIP's ongoing costs.)
H.R. 3121 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would impose no
costs on state, local, or tribal governments. H.R. 3121 would
impose a private-sector mandate, as defined in UMRA, on certain
mortgagelenders. Based on information from FEMA and industry
sources, CBO expects the direct costs to comply with the mandate would
be small and fall below the annual threshold for private-sector
mandates established in UMRA ($131 million in 2007, adjusted annually
for inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3121 is shown in the following table.
The costs of this legislation fall within budget function 450
(community and regional development).

------------------------------------------------------------------------
By fiscal year, in millions of
dollars--
---------------------------------------
2008 2009 2010 2011 2012
------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING AND REVENUES\1\

Additional Borrowing for Flood
Insurance:
Estimated Budget Authority.. 0 725 0 0 0
Estimated Outlays........... 0 725 0 0 0
Estimated Revenues.............. 1 1 1 1 1

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Flood Mapping Program:
Authorization Level......... 400 400 400 400 400
Estimated Outlays........... 100 260 340 400 400
Outreach Grants:
Authorization Level......... 50 50 50 50 50
Estimated Outlays........... 28 40 50 50 50
Mitigation of Severe Repetitive
Loss Properties:
Authorization Level......... 0 0 40 40 40
Estimated Outlays........... 0 0 12 36 40
Additional Studies:
Authorization Level......... 1 0 0 0 0
Estimated Outlays........... 1 0 0 0 0
Total Changes:
Authorization Level......... 451 450 490 490 490
Estimated Outlays........... 129 300 402 486 490
------------------------------------------------------------------------
\1\CBO estimates that there would be no changes in direct spending after
2012 under H.R. 3121, and that revenue collections of $1 million a
year would continue after 2012.

Basis of estimate: For this estimate, CBO assumes that H.R.
3121 will be enacted near the start of fiscal year 2008 and
that amounts specified by the bill will be appropriated for
each year. We estimate that enacting H.R. 3121 would increase
direct spending by $725 million in 2009. In addition, CBO
estimates that implementing the bill would increase
discretionary spending by about $1.8 billion over the 2008-2012
period.

Direct spending and revenues

CBO estimates that the bill's increase in FEMA's borrowing
authority would result in new direct spending. Other changes to
the flood insurance program would affect operations of the
program, but we estimate that those changes would not result in
any significant net impact on direct spending over the next 10
years.
Increase in borrowing authority. Through the NFIP, FEMA
offers flood insurance in communities that conform to the
program's standards for flood plain management. Under current
law, if premiums from policy sales and interest income are
insufficient to cover the program's costs, FEMA can borrow up
to $20.8 billion from the U.S. Treasury. As of August 2007, the
NFIP had borrowed a total of $17.5 billion (the bulk of which
has been used to settle claims related to Hurricanes Katrina
and Rita). Based on information from FEMA about outstanding
claims and continuing interest payments on its past borrowing,
CBO expects that the agency will exhaust its remaining
borrowing authority within the next few years. Section 12 would
increase FEMA's borrowing authority for the flood insurance
program by $725 million. CBO estimates that the agency would
exercise this authority in 2009, resulting in an increase in
direct spending of $725 million in that year, relative to
current baseline projections.
Current law requires FEMA to repay any borrowed funds (with
interest) as it collects premiums, provided that the program's
other costs are fully covered. However, CBO expects that the
agency would be unlikely to repay funds borrowed under H.R.
3121 within the next 10 years. Based on historical data, the
agency is likely to face claims of between $1 billion and $2
billion per year for flooding events around the country (this
does not include additional claims that would be filed if
another catastrophic event were to occur). Based on the amount
of current and projected borrowing by the flood insurance
program, CBO estimates that FEMA also will be required to make
annual debt-service payments to the Treasury of between $800
million and $900 million. CBO expects that the program will
collect insufficient premiums to cover claims expenses and
debt-service costs over the next 10 years. In other words, CBO
expects that the NFIP will probably not have sufficient funds
to make timely payments for all valid claims submitted to it.
By increasing the program's borrowing authority, H.R. 3121
would provide resources--$725 million--to liquidate such claims
that otherwise could not be promptly paid under current law.
Civil penalties. Section 6 would increase the civil penalty
from $350 to $2,000 for lenders that do not enforce the
purchase and notification requirements for certain mortgagors.
Penalty collections are recorded in the budget as revenues. CBO
estimates that the increased collections of civil penalties
under this bill would total about $1 million a year. The
amounts collected would be credited to the National Flood
Mitigation Fund and could be spent, subject to future
appropriation actions.
Rate increases for certain properties. Section 4 would
direct FEMA to increase flood insurance premiums for certain
policyholders who currently receive discounted or subsidized
rates. Under current law, some property owners are charged a
premium that is less than the full actuarial cost of the
insurance because they were built before the community's flood
insurance rate map (FIRM) was completed (or before 1975,
whichever is later). Those properties are collectively known as
pre-FIRM properties. (Some post-FIRM policies also receive a
discounted premium, but they are few in number relative to pre-
FIRM properties.) FEMA estimates the average discount for pre-
FIRM properties is about 60 percent.
H.R. 3121 would increase premiums for nonresidential pre-
FIRM properties and pre-FIRM properties that are not the
primary residence of either the owner or a tenant (for example,
vacation homes) to actuarial levels by 2011. The bill would
direct the NFIP to assess an additional 15 percent on top of
routine annual rate increases for those properties until the
actuarial rate is achieved (or until 2011, when such policies
would be charged an actuarial rate). Based on information from
FEMA, CBO estimates that approximately 375,000 properties would
be subject to such rate increases under the bill. CBO expects
that owners of some of those properties would either drop flood
insurance or reduce their level of coverage in response to an
increase in premium charges. However, we expect that any
decrease in premium income resulting from a reduction in
coverage would be more than offset by increased collections
from properties that remain in the program. Additionally, by
reducing the number of pre-FIRM properties in the program, the
NFIP would save the cost of paying claims on those subsidized
policies in the future.
CBO estimates that implementing this provision would
increase receipts from flood insurance premiums by about $900
million over the 2008-2012 period and by about$3.1 billion over
the next 10 years. Subsidized policyholders that drop flood insurance
coverage in response to the rate increases would reduce program costs
by an average of $45 million a year over the next 10 years, CBO
estimates.
CBO anticipates that any additional receipts generated by
increasing premiums on those properties would be spent on
future flood insurance claims that the program would otherwise
not have the resources to pay--resulting in no significant net
budgetary impact. That is, the program changes required under
section 4 would improve the long-term actuarial position of the
NFIP; but the program's large debt and the requirement to pay
interest costs on that debt means that savings from the
reduction in subsidized policies would have to be used to cover
ongoing costs of the NFIP and would not lead to net budgetary
savings over the 2008-2017 period.
Multiperil insurance. Section 7 would authorize FEMA to
offer insurance coverage for flood and wind damage to property
owners in communities that conform to the program's standards
for wind damage and flood plain management. (Additional
standards related to windstorms would be established under the
bill based on studies undertaken by FEMA.) Under H.R. 3121,
FEMA would be authorized to insure damages attributable to
floods or windstorms up to a maximum of $650,000 per residence
for structure, contents, and additional living expenses and a
total of $1,750,000 for structure, contents, and business
interruption losses for commercial properties.
H.R. 3121 would direct FEMA to offer such multiperil
coverage at actuarial (i.e., unsubsidized) rates. Because of
the uncertain nature of actuarial pricing, FEMA might collect
more receipts than necessary to pay future claims (resulting in
a net reduction in direct spending). It is also possible that
FEMA might collect less premium income than would be necessary
to cover future liabilities from multiperil policies, which
would likely result in the need for additional borrowing
authority from the Treasury. In the latter case, the
legislation would prohibit FEMA from entering into or renewing
any multiperil policy until such borrowing is repaid. CBO
expects that the new coverage offered under H.R. 3121 would
increase premium receipts and additional claims payments by
about the same amount--resulting in no significant net
budgetary impact.
Increased coverage limits and new lines of coverage.
Sections 8 and 9 would increase the total amount of flood
insurance coverage available to a residential customer from
$350,000 to $470,000, and to a commercial business from $1.0
million to $1.3 million. The legislation would direct FEMA to
include coverage of up to $1,000 for living expenses in all
future polices. Additional optional coverage also would be
available for living expenses, repairs to residential basements
and crawl spaces, business interruption, and the full
replacement of contents.
As of June 2007, the NFIP had approximately 5.5 million
policies in force, with a total exposure of over $1 trillion.
Those policyholders pay about $2.7 billion in premiums to the
federal government annually. Under the bill, the increased
coverage limits and new lines of insurance would be offered to
policyholders when they initiate or renew their policies and
that coverage would be offered at actuarial rates. Thus, CBO
expects that any additional insurance coverage obtained under
this provision would increase premium receipts to the federal
government, which would--on average--be roughly offset by
additional claims payments.
Increase in annual limit on rate increases. Section 11
would authorize the NFIP to increase rates on policies within a
specified risk category by an average of up to 15 percent per
year. Under current law, the limit is 10 percent. CBO estimates
that raising this limit would have no significant impact on the
federal budget because to date FEMA has not been constrained in
its rate-setting process by the current cap on premiums for
actuarially priced policies. (Rate increases for subsidized
policies would be affected by other provisions of the bill.)

Spending subject to appropriation

Implementing H.R. 3121 would increase discretionary
spending by $1.8 billion over the 2008-2012 period, assuming
appropriation of the authorized amounts.
Flood Mapping Program. Section 22 would authorize the
appropriation of $400 million per year over the 2008-2013
period for updating flood maps to include the 500-year flood
plain, as well as areas that would be flooded if a dam or levee
failed. In addition, the bill would reestablish a 14-member
Technical Mapping Advisory Council to assist with managing
flood mapping activities. Based on historical spending patterns
for this program, CBO estimates that implementing this section
would cost $1.5 billion over the 2008-2012 period and an
additional $900 million after 2012.
Grants for outreach to property owners and renters. Section
15 would authorize the appropriation of $250 million over the
2008-2012 period for grants to communities participating in the
NFIP to conduct educational and outreach activities to
encourage the purchase of flood insurance and raise the
awareness of flood risk and measures that can be taken to
mitigate flood damages. Based on the historical spending
patterns of similar programs, CBO estimates that implementing
this provision would cost $218 million over the 2008-2012
period, assuming appropriation of the specified amounts.
Mitigation of severe repetitive loss properties. Section 17
would extend for three years the authorization of
appropriations for the mitigation pilot program that funds
preventive measures for certain properties that have been
frequently flooded (known as severe repetitive loss
properties). Severe repetitive loss properties are those that
have sustained four or more losses totaling more than $20,000,
or two or more losses that cumulatively exceed the value of the
property. Under current law, up to $40 million a year from the
National Flood Insurance Fund can be used for this program
through 2009. Based on historical spending rates for mitigation
projects, CBO estimates that implementing this section would
cost $88 million over the 2008-2012 period.
Additional studies. H.R. 3121 would authorize the
Government Accountability Office to conduct studies of pre-FIRM
properties, the feasibility of expanding the requirement to
purchase flood insurance, and potential methods for increasing
the participation of low-income families in the NFIP. The bill
also would direct FEMA to conduct studies on the impact of
using nationally recognized building codes as a part of flood-
plain management and the economic effects of eliminating the
discounted premiums paid by owners of certain pre-FIRM
properties. CBO estimates that preparing those studies would
cost $1 million in fiscal year 2008.
Staff increases. Section 25 would authorize FEMA to hire
additional staff to implement the provisions of this bill. The
amount of increased administrative costs that would result from
the bill is uncertain because FEMA does not yet know how it
would implement various provisions. Subject to appropriation of
administrative expenses, FEMA is authorized to set an
administrative cost recovery fee on flood insurance policies to
offset spending on salaries and expenses. Thus, CBO expects
additional administrative costs under the bill would not have a
significant net cost.
Estimated impact on state, local, and tribal governments:
H.R. 3121 contains no intergovernmental mandates as defined in
UMRA. Assuming appropriation of authorized amounts, CBO
estimates state, local, and tribal governments would receive up
to $300 million over the 2008-2012 period for outreach and
flood mitigation activities. Any costs to those governments
would be incurred voluntarily as a condition of receiving
federal assistance.
Estimated impact on the private sector: H.R. 3121 would
impose a private-sector mandate, as defined in UMRA, on certain
mortgage lenders. Based on information from FEMA and industry
sources, CBO expects that the direct costs to comply with the
mandate would be small and fall below the annual threshold for
private-sector mandates established in UMRA ($131 million in
2007, adjusted annually for inflation).
Under current law, mortgage lenders who make federally
related mortgages, as defined in title 12 U.S.C. 2602, are
required to provide a good-faith estimate of the amount or
range of charges the borrower is likely to incur for specific
settlement services. The bill would require such mortgage
lenders to include in each good-faith estimate a conspicuous
statement 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 NFIP.
The good-faith estimate also would be required to contain a
telephone number and Web site address by which a home owner or
purchaser can contact the NFIP. Finally, the estimate would be
required to contain the statement that the escrowing of flood
insurance premiums 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.
According to industry representatives, the cost for mortgage
lenders to include the required additional statements in such
an estimate would be minimal.
Estimate prepared by: Federal Costs: Daniel Hoople; Impact
on State, Local, and Tribal Governments: Melissa Merrell;
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Constitutional Authority Statement

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States) and clause 3 (relating to
the power to regulate interstate commerce).

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.

Earmark Identification

H.R. 3121 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.

Exchange of Committee Correspondence

House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC, September 21, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Chairman Frank: I write to you regarding H.R. 3121,
the ``Flood Insurance Reform and Modernization Act of 2007''.
H.R. 3121 contains provisions that fall within the
jurisdiction of the Committee on Transportation and
Infrastructure. I recognize and appreciate your desire to bring
this legislation before the House in an expeditious manner and,
accordingly, I will not seek a sequential referral of the bill.
However, I agree to waive consideration of this bill with the
mutual understanding that my decision to forego a sequential
referral of the bill does not waive, reduce, or otherwise
affect the jurisdiction of the Committee on Transportation and
Infrastructure over H.R. 3121.
Further, the Committee on Transportation and Infrastructure
reserves the right to seek the appointment of conferees during
any House-Senate conference convened on this legislation on
provisions of the bill that are within the Committee's
jurisdiction. I ask for your commitment to support any request
by the Committee on Transportation and Infrastructure for the
appointment of conferees on H.R. 3121 or similar legislation.
Please place a copy of this letter and your response
acknowledging the Committee on Transportation and
Infrastructure's jurisdictional interest in the Committee
Report on H.R. 3121 and in the Congressional Record during
consideration of the measure on the House Floor.
I look forward to working with you as we prepare to pass
this important legislation.
Sincerely,
James L. Oberstar, M.C.,
Chairman.
------

House of Representatives,
Committee on Financial Services,
Washington, DC, September 20, 2007.
Hon. James L. Oberstar,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter concerning
H.R. 3121, the ``Flood Insurance Reform and Modernization Act
of 2007''. This bill was introduced on July 19, 2007, and has
been ordered reported by the Committee on Financial Services.
It is my expectation that this legislation will be scheduled
for floor consideration shortly.
I recognize that certain provisions in the bill fall within
the jurisdiction of the Committee on Transportation and
Infrastructure under Rule X of the Rules of the House of
Representatives. However, I appreciate your willingness to
forego action on this legislation in order to allow the bill to
come to the floor expeditiously. I agree that your decision
will not prejudice the Committee on Transportation and
Infrastructure with respect to its jurisdictional prerogatives
on this or similar legislation. I will support appropriate
representation from the Transportation Committee in the event
of a House-Senate conference on this bill or similar
legislation.
I will include this exchange of correspondence in the
Committee report and in the Congressional Record during
consideration of this measure on the floor. Thank you again for
your cooperation in this important matter.
Barney Frank,
Chairman.

Section-by-Section Analysis of the Legislation

Section 1--Short title and table of contents

This Act may be cited as the ``Flood Insurance Reform and
Modernization Act of 2007.''

Section 2--Findings and Purposes

This section sets forth findings regarding the need for
reform of the NFIP and establishes the purposes of the Act.

Section 3--Study regarding status of pre-FIRM properties and mandatory
purchase requirement for natural 100-year floodplain and non-
federally related loans

This section requires the Government Accountability Office
(``GAO'') to conduct a study on the effects of extending the
mandatory flood insurance purchase requirement to all
properties located in a flood hazard area, whether or not the
mortgage on the property is federally-backed. This section also
requires the GAO to study coverage for pre-FIRM properties, as
well as the effects of extending the mandatory purchase
requirement to properties protected by dams and levees. This
report is to be submitted to the Congress no later than 6
months from enactment.

Section 4--Phase-in of actuarial rates for non-residential properties
and non-primary residences

This section requires the phase-in of actuarial rates (or
the phase-out of subsidized rates), for pre-FIRM nonresidential
properties and non-primary residences beginning on January 1,
2011. The phase-in does not apply to multifamily rental
properties or rentals that are the primary residence of a
tenant.

Section 5--Exception to waiting period for effective date of policies

This section makes flood insurance coverage effective
immediately when a policy is purchased within 30 days of
purchase or transfer of the property.

Section 6--Enforcement (increasing penalties for lender non-compliance)

This section increases to $2,000 the fine levied against
federally-regulated lending institutions for each failure to
enforce mandatory flood insurance purchase requirements and
increases the annual cap on fines for institutions to $1
million. This cap will not apply to institutions that were
assessed a penalty of $1 million in any three of the last five
years. This section also contains a ``safe harbor'' provision
for lending institutions that make a good faith effort to
comply with mandatory flood insurance purchase requirements, or
if such a violation is not material in nature.

Section 7--Multiperil coverage for flood and windstorm

This section expands the NFIP to make optional wind
coverage available to NFIP participants. This section requires
premiums for the new, optional coverage to be charged at
actuarial rates and be based on risk, so that the program would
be required to collect enough premiums to pay reasonably
anticipated claims.
Under this section, optional wind coverage would be
available where local governments agree to adopt land use and
control measures designed to minimize wind damage, in addition
to the existing flood program requirements for flood plain
management. The multiple peril residential policy limits are
$500,000 for the structures and $150,000 for contents and loss
of use. Limits for nonresidential properties are up to
$1,000,000 for structure and $750,000 for contents and business
interruption.
The NFIP may not offer new multiple-peril policies or renew
existing multiple-peril policies during any time the NFIP
borrows money to pay multiple-peril policy claims.
The effective date for coverage under this section is June
30, 2008.

Section 8--Maximum coverage limits

This section increases the maximum coverage limits for
flood insurance policies. New coverage limits are $335,000 for
residences; $135,000 for residential contents; and $670,000 for
nonresidential properties.

Section 9--Coverage for additional living expenses, basement
improvements, business interruption, and replacement cost of
contents

This section requires FEMA to include in each renewal or
new contract for flood insurance at least $1,000 for living
expenses following a flood event. This section also requires
FEMA to provide actuarially-priced, optional residential
basement coverage for flood losses. Optional, actuarially-
priced business interruption coverage for flood losses is also
to be provided by FEMA for commercial properties (including
multifamily rental properties). This section also requires FEMA
to provide optional, full replacement cost contents coverage
for both residential and commercial properties.

Section 10--Notification to tenants of availability of contents
coverage

This section requires FEMA to provide copies of the notice
document to insured landlords, in order to strongly encourage
landlords to provide tenants with this notice, so that tenants
may be informed about the property's location in a flood zone,
the availability of flood insurance coverage, and how to
purchase the coverage. This provision does not include
penalties in the event that FEMA does not comply with this
section or a landlord fails to distribute the notice.

Section 11--Increase in annual limitation on premium increases

This section increases the annual limitation on premium
increases from 10 percent to 15 percent.

Section 12--Increase in borrowing authority

This section increases the NFIP's borrowing authority to
$21.5 billion from the current $20.775 billion. This section
also requires that FEMA submit a report to Congress, not later
than 6 months after enactment of this legislation, on how it
intends to repay, within 10 years, all funds borrowed,
including amounts previously borrowed but not repaid.

Section 13--FEMA participation in State disaster claims mediation
programs

This section requires FEMA, upon request of a state
insurance commissioner, to participate in a state disaster
claims mediation program for the non-binding mediation of flood
insurance claims. However, this section stipulates that
participation in the mediation program will not affect contract
or tort liability, or the exclusive jurisdiction of the Federal
courts to hear disputes involving the NFIP. Further, this
section does not require the NFIP to pay additional mediation
fees upon participation.

Section 14--FEMA annual report on insurance program

This section requires FEMA to report annually to Congress
on the financial status of the NFIP.

Section 15--Flood insurance outreach

This section creates a competitive grant program for
communities that encourage homeowners to purchase flood
insurance, where those homeowners are not legally required to
do so, and in general, educate all residents about the benefits
of flood insurance. This section also requires FEMA to report
to Congress within 60 days of enactment a description of its
marketing and outreach efforts to educate consumers on the
benefits of obtaining flood insurance.

Section 16--Grants for direct funding of mitigation activities for
individual repetitive claims properties

This section provides a technical fix from 2004 flood
insurance legislation to clarify that the FEMA Director may
work directly with property owners to make mitigation grants
for certain repetitive loss properties where States or
communities are either unable or unwilling to address
repetitive loss issues with a property owner.

Section 17--Extension of pilot program for mitigation of severe
repetitive loss properties

This section extends the pilot program, which was created
in the 2004 flood insurance legislation, through September 30,
2012.

Section 18--Flood Mitigation Assistance Program

This section provides for technical fixes to the 2004 flood
insurance legislation by: (1) adding demolition and rebuilding
as an allowable mitigation activity under the Flood Mitigation
Assistance (``FMA'') program (in some cases, demolition and
rebuilding is a more feasible and cost effective mitigation
option); (2) removing the per state and per community caps on
FMA to allow FEMA to better use FMA funds where needed; and (3)
prevents FEMA from increasing policy premiums to cover FMA.

Section 19--GAO study of methods to increase flood insurance program
participation by low-income families

This section requires the GAO to study and report on
methods to increase participation of low-income families in the
flood insurance program. This report is to be submitted to
Congress no later than 12 months from enactment.

Section 20--Notice of availability of flood insurance and escrow in
RESPA Good Faith Estimate

This section requires disclosure in the Real Estate
Settlement Procedures Act Good Faith Estimate about the
availability of flood insurance and clarifies that the
disclosure state that flood insurance is available whether or
not a property is in a flood zone.

Section 21--Reiteration of FEMA responsibilities under 2004 reform act

This section requires FEMA, within 90 days of enactment, to
establish an appeals process for claims. FEMA must continue to
work with state regulators and the industry to implement
minimum agent training requirements. FEMA must report to
Congress after six months on the status of implementing all
2004 reforms.

Section 22--Ongoing modernization of flood maps and elevation standards

This section makes the map modernization program ongoing;
requires the mapping of the 500-year floodplain (but such 500-
year mapping may not delay the mapping of a community's 100-
year floodplain map); gives priority in updating maps to areas
affected by hurricanes Katrina and Rita; creates a
responsibility for FEMA to educate communities about map
updates; and establishes the trigger for pre-FIRM subsidy phase
out of second and vacation homes as of January 1, 2011. This
provision also authorizes appropriations for mapping of $400
million annually, an increase from the current appropriated
level of $200 million. This section also makes the Technical
Mapping Advisory Council ongoing (and adds a real estate
professional to the Council). The section also provides that if
a map must be updated to reflect changes to protective
structures under the jurisdiction of the Federal Government,
the cost of such update will not be at the expense of the
community. Also, this section provides that FEMA may issue
interim flood elevations after a flood-related disaster.

Section 23--Notification and appeal of map changes; notification of
establishment of flood elevations

This section requires FEMA to provide map change
information to affected communities, and requires a notice in
local newspapers of map changes, a description of the appeals
process, and contact information for an appeal.

Section 24--Clarification of replacement cost provisions, forms, and
policy language

This section requires FEMA, within 3 months of enactment,
to issue regulations and revise materials to provide a plain
language clarification of replacement cost coverage; revise
flood insurance policies to be consistent with language in
homeowners policies; and require the use of plain language
forms developed pursuant to the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004.

Section 25--Authorization of additional FEMA staff

This section authorizes necessary funds be appropriated for
the Director of FEMA to employ additional staff necessary to
carry out all of the responsibilities required by this bill.

Section 26--Extension of deadline for filing proof of loss

This section extends the deadline for filing the proof of
loss associated with a flood insurance claim from 60 days to
180 days.

Section 27--5-year extension of program

This section reauthorizes the NFIP for five years through
2013. The current authorization of the NFIP expires in 2008.

Section 28--Report on inclusion of building codes in floodplain
management criteria

This section requires FEMA to conduct a study and report to
Congress not later than six months after enactment regarding
the use of nationally recognized building codes as part of
floodplain management.

Section 29--Study of economic effects of charging actuarially-based
premium rates for pre-FIRM structures

This section requires FEMA to conduct a study and report to
Congress within 12 months of enactment regarding the economic
effects of removing the subsidy for pre-FIRM properties.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

NATIONAL FLOOD INSURANCE ACT OF 1968

* * * * * * *
TITLE XIII--NATIONAL FLOOD INSURANCE

* * * * * * *

CHAPTER I--THE NATIONAL FLOOD INSURANCE PROGRAM

BASIC AUTHORITY

Sec. 1304. (a) * * *

* * * * * * *

(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
land use and control measures (with effective
enforcement provisions) which the Director finds are
consistent with the comprehensive criteria for land
management and use relating to windstorms establish
pursuant to section 1361(d)(2).
(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--
(i) for any single-family dwelling,
$500,000; and
(ii) for any structure containing
more than one dwelling unit, $500,000
for each separate dwelling unit in the
structure; 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
(ii) $750,000 for--
(I) any contents related to
such structure;
(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.
[(c)] (d) In carrying out the flood insurance program the
Director shall, to the maxmium extent practicable, encourage
and arrange for--
(1) * * *

* * * * * * *

NATURE AND LIMITATION OF INSURANCE COVERAGE

Sec. 1306. (a) * * *
(b) In addition to any other terms and conditions under
subsection (a), such regulations shall provide that--
(1) * * *
(2) in the case of any residential property for which
the risk premium rate is determined in accordance with
the provisions of section 1307(a)(1), additional flood
insurance in excess of the limits specified in clause
(i) of subparagraph (A) of paragraph (1) shall be made
available to every insured upon renewal and every
applicant of insurance so as to enable such insured or
applicant to receive coverage up to a total amount
(including such limits specified in paragraph
(1)(A)(i)) of [$250,000] $335,000;
(3) in the case of any residential property for which
the risk premium rate is determined in accordance with
the provisions of section 1307(a)(1), additional flood
insurance in excess of the limits specified in clause
(ii) of subparagraph (A) of paragraph (1) 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 (including such limits specified in paragraph
(1)(A)(ii)) of [$100,000] $135,000;
(4) in the case of any nonresidential property,
including churches, for which the risk premium rate is
determined in accordance with the provisions of section
1307(a)(1), additional flood insurance in excess of the
limits specified in subparagraphs (B) and (C) of
paragraph (1) shall be made available to every insured
upon renewal and every applicant for insurance, in
respect to any single structure, up to a total amount
(including such limit specified in subparagraph (B) or
(C) of paragraph (1), as applicable) of [$500,000]
$670,000 for each structure and [$500,000] $670,000 for
any contents related to each structure; [and]
(5) any flood insurance coverage pursuant to
paragraph (2), (3), or (4) which may be made available
in excess of the limits specified in subparagraph (A),
(B), or (C) of paragraph (1), shall be based only on
chargeable premium rates under section 1308 which are
not less than the estimated premium rates under section
1307(a)(1), and the amount of such excess coverage
shall not in any case exceed an amount equal to the
applicable limit so specified (or allocated) under
paragraph (1)(C), (2), (3), or (4), as applicable[.];
(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).
(c) Effective Date of Policies.--
(1) * * *
(2) Exception.--The provisions of paragraph (1) shall
not apply to--
(A) the initial purchase of flood insurance
coverage under this title when the purchase of
insurance is in connection with the making,
increasing, extension, or renewal of a loan 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; or

* * * * * * *

ESTABLISHMENT OF CHARGEABLE PREMIUM RATES

Sec. 1308. (a) * * *

* * * * * * *

(c) Actuarial Rate Properties.--Subject only to [the
limitations provided under paragraphs (1) and (2)] subsection
(e), the chargeable rate shall not be less than the applicable
estimated risk premium rate for such area (or subdivision
thereof) under section 1307(a)(1) with respect to the following
properties:
(1) Post-firm properties.--Any property the
construction or substantial improvement of which the
Director determines has been started after December 31,
1974, or started after the effective date of the
initial rate map published by the Director under
paragraph (2) of section 1360 for the area in which
such property is located, whichever is later[, except
that the chargeable rate for properties under this
paragraph shall be subject to the limitation under
subsection (e)].
(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.
[(2)] (4) Certain leased coastal and river
properties.--Any property leased from the Federal
Government (including residential and nonresidential
properties) that the Director determines is located on
the river-facing side of any dike, levee, or other
riverine flood control structure, or seaward of any
seawall or other coastal flood control structure.

* * * * * * *

(e) Annual Limitation on Premium Increases.--Except with
respect to properties described under [paragraph (2) or (3)]
paragraph (4) of subsection (c), and notwithstanding any other
provision of this title, the chargeable risk premium rates for
flood insurance under this title for any properties within any
single risk classification may not be increased by an amount
that would result in the average of such rate increases for
properties within the risk classification during any 12-month
period exceeding [10 percent] 15 percent of the average of the
risk premium rates for properties within the risk
classification upon the commencement of such 12-month period.

* * * * * * *

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.

FINANCING

Sec. 1309. (a) All authority which was vested in the Housing
and Home Finance Administrator by virtue of section 15(e) of
the Federal Flood Insurance Act of 1956 (70 Stat. 1084)
(pertaining to the issue of notes or other obligations or the
Secretary of the Treasury), as amended by subsections (a) and
(b) of section 1303 of this Act, shall be available to the
Director for the purpose of carrying out the flood insurance
program under this title; except that the total amount of notes
and obligations which may be issued by the Director pursuant to
such authority (1) without the approval of the President, may
not exceed $500,000,000, and (2) with the approval of the
President, may not exceed $1,500,000,000 through the date
specified in section 1319, and $1,000,000,000 thereafter;
except that, through September 30, 2008, clause (2) of this
sentence shall be applied by substituting ``[$20,775,000,000]
$21,500,000,000'' for ``$1,500,000,000''. The Director shall
report to the Committee on Banking, Finance and Urban Affairs
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate at any time when he
requests the approval of the President in accordance with the
preceding sentence.

* * * * * * *

NATIONAL FLOOD INSURANCE FUND

Sec. 1310. (a) To carry out the flood insurance program
authorized by this title, the Director shall establish in the
Treasury of the United States a National Flood Insurance Fund
(hereinafter referred to as the ``fund'') which shall be an
account separate from any other accounts or funds available to
the Director and shall be available as described in subsection
(f), without fiscal year limitation (except as otherwise
provided in this section)--
(1) * * *

* * * * * * *

(9) for funding, not to exceed $10,000,000 in any fiscal
year, which shall remain available until expended, for
mitigation actions under section 1323, except that,
notwithstanding any other provision of this title, amounts made
available pursuant to this paragraph shall not be subject to
offsetting collections through premium rates for flood
insurance coverage under this title.

* * * * * * *

PAYMENT OF CLAIMS

Sec. 1312. (a) Payment.--The Director is authorized to
prescribe regulations establishing the general method or
methods by which proved and approved claims for losses may be
adjusted and paid for any damage to or loss of property which
is covered by flood insurance made available under the
provisions of this title.
(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.

* * * * * * *

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).

* * * * * * *

PROPERTIES IN VIOLATION OF STATE AND LOCAL LAW

Sec. 1316. (a) Flood Protection Measures.--No new flood
insurance coverage shall be provided under this title for any
property which 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
discourage or otherwise restrict land development or occupancy
in flood-prone areas.
(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.

* * * * * * *

PROGRAM EXPIRATION

Sec. 1319. No new contract for flood insurance under this
title shall be entered into after [September 30, 2008]
September 30, 2013.

[REPORT TO THE PRESIDENT] ANNUAL REPORT TO CONGRESS

Sec. 1320. (a) In General.--The Director shall [biennially]
submit a report of operations under this title to [the
President for submission to] the Congress not later than June
30 of each year.
(b) Effects of Flood Insurance Program.--The Director shall
include, as part of the [biennial] annual report submitted
under subsection (a), a chapter reporting on the effects on the
flood insurance program observed through implementation of
requirements under the Riegle Community Development and
Regulatory Improvement Act of 1994.
(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. 1323. DIRECT GRANTS FOR REPETITIVE INSURANCE CLAIMS PROPERTIES.

(a) In General.--The Director may provide funding, to owners
of such properties, for mitigation actions that reduce flood
damages to individual properties for which [1] two or more
claim payments for losses have been made under flood insurance
coverage under this title, but only if the Director determines
that--
(1) * * *

* * * * * * *

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-Bereueter-Blumenauer Flood Insurance
Reform Act of 2004 (Public Law 108-264; 118 Stat. 726)
and regulations issued pursuant to such section shall
apply exclusively.
(i) Representatives of Director.--For purposes of this
section, the term ``representatives of the Director'' means
representatives of the national flood insurance program who
participate in the appeals process established pursuant to
section 205 of the Bunning-Bereueter-Blumenauer Flood Insurance
Reform Act of 2004 (Public Law 108-264; 118 Stat. 726) and
regulations issued pursuant to such section.

SEC. 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) encourage 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.

* * * * * * *

CHAPTER III--COORDINATION OF FLOOD INSURANCE WITH LAND-MANAGEMENT
PROGRAMS IN FLOOD-PRONE AREAS

IDENTIFICATION OF FLOOD-PRONE AREAS

Sec. 1360. (a) * * *

* * * * * * *

(f) Updating Flood Maps.--The Director shall revise and
update any floodplain areas and flood-risk zones--
(1) * * *
(2) upon the request from any State or local
government stating that specific floodplain areas or
flood-risk zones in the State or locality need revision
or updating, if sufficient technical data justifying
the request is submitted and the unit of government
making the request agrees to provide funds in an amount
determined by the Director, but which may not exceed 50
percent of the cost of carrying out the requested
revision or update, 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.

* * * * * * *

(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.
(2) Inclusions.--
(A) Covered areas.--Each map updated under
this subsection shall include a depiction of--
(i) the 500-year floodplain;
(ii) areas that could be inundated as
a result of the failure of a levee, as
determined by the Director; and
(iii) areas that could be inundated
as a result of the failure of a dam, as
identified under the National Dam
Safety Program Act (33 U.S.C. 467 et
seq.).
(B) Other inclusions.--In updating maps under
this subsection, the Director may include--
(i) any relevant information on
coastal inundation from--
(I) an applicable inundation
map of the Corps of Engineers;
and
(II) data of the National
Oceanic and Atmospheric
Administration relating to
storm surge modeling;
(ii) any relevant information of the
Geographical Service on stream flows,
watershed characteristics, and
topography that is useful in the
identification of flood hazard areas,
as determined by the Director; and
(iii) a description of any hazard
that might impact flooding, including,
as determined by the Director--
(I) land subsidence and
coastal erosion areas;
(II) sediment flow areas;
(III) mud flow areas;
(IV) ice jam areas; and
(V) areas on coasts and
inland that are subject to the
failure of structural
protective works, such as
levees, dams, and floodwalls.
(3) Standards.--In updating and maintaining maps
under this subsection, the Director shall establish
standards to--
(A) ensure that maps are adequate for--
(i) flood risk determinations; and
(ii) use by State and local
governments in managing development to
reduce the risk of flooding;
(B) facilitate the Director, in conjunction
with State and local governments, to identify
and use consistent methods of data collection
and analysis in developing maps for communities
with similar flood risks, as determined by the
Director; and
(C) ensure that emerging weather forecasting
technology is used, where practicable, in flood
map evaluations and the identification of
potential risk areas.
(4) Hurricanes katrina and rita mapping priority.--In
updating and maintaining maps under this subsection,
the Director shall--
(A) give priority to the updating and
maintenance of maps of coastal areas affected
by Hurricane Katrina or Hurricane Rita to
provide guidance with respect to hurricane
recovery efforts; and
(B) use the process of updating and
maintaining maps under subparagraph (A) as a
model for updating and maintaining other maps.
(5) 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.
(6) 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.
(7) 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).
(8) 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.
(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.

CRITERIA FOR LAND MANAGEMENT AND USE

Sec. 1361. (a) * * *

* * * * * * *

(d) Windstorms.--
(1) Studies and investigations.--The Director shall
carry out studies and investigations under this section
to determine appropriate measures in windstorm-prone
areas as to land management and use, windstorm zoning,
and windstorm damage 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.
(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.

SEC. 1361A. PILOT PROGRAM FOR MITIGATION OF SEVERE REPETITIVE LOSS
PROPERTIES.

(a) * * *

* * * * * * *

(k) Funding.--
(1) In general.--Pursuant to section 1310(a)(8), the
Director may use amounts from the National Flood
Insurance Fund to provide assistance under this section
in each of fiscal years [2005, 2006, 2007, 2008, and
2009] 2008, 2009, 2010, 2011, and 2012, except that the
amount so used in each such fiscal year may not exceed
$40,000,000 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.

* * * * * * *

[(l) Termination.--The Director may not provide assistance
under this section to any State or community after September
30, 2009.]

* * * * * * *

APPEALS

[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 by publication for comment in the Federal
Register, by direct notification to the chief executive officer
of the community, and by publication in a prominent local
newspaper.]
Sec. 1363. (a) In establishing projected flood elevations for
land use purposes with respect to any community pursuant to
section 1361, the Director shall first propose such
determinations--
(1) by providing the chief executive officer of each
community affected by the proposed elevations, by
certified mail, with a return receipt requested, notice
of the elevations, including a copy of the maps for the
elevations for such community and a statement
explaining the process under this section to appeal for
changes in such elevations;
(2) by causing notice of such elevations to be
published in the Federal Register, which notice shall
include information sufficient to identify the
elevation determinations and the communities affected,
information explaining how to obtain copies of the
elevations, and a statement explaining the process
under this section to appeal for changes in the
elevations; and
(3) by publishing in a prominent local newspaper the
elevations, a description of the appeals process for
flood determinations, and the mailing address and
telephone number of a person the owner may contact for
more information or to initiate an appeal.

* * * * * * *

MITIGATION ASSISTANCE

Sec. 1366. (a) * * *

* * * * * * *

(e) Eligible Mitigation Activities.--
(1) * * *

* * * * * * *

(5) Eligible activities.--The Director shall
determine whether mitigation activities described in a
mitigation plan submitted under subsection (d) comply
with the requirements under paragraph (1). Such
activities may include--
(A) * * *
(B) elevation, relocation, demolition, [or
floodproofing] floodproofing, or demolition and
rebuilding of structures (including public
structures) located in areas having special
flood hazards or other areas of flood risk;

* * * * * * *

[(f) Limitations on Amount of Assistance.--
[(1) Amount.--The sum of the amounts of mitigation
assistance provided under this section during any 5-
year period may not exceed--
[(A) $10,000,000, to any State; or
[(B) $3,300,000, to any community.
[(2) Geographic.--The sum of the amounts of
mitigation assistance provided under this section
during any 5-year period to any one State and all
communities located in such State may not exceed
$20,000,000.
[(3) Waiver.--The Director may waive the dollar
amount limitations under paragraphs (1) and (2) for any
State or community for any 5-year period during which a
major disaster or emergency declared by the President
(pursuant to the Robert T. Stafford Disaster Relief and
Emergency Assistance Act) as a result of flood
conditions is in effect with respect to areas in the
State or community.]
[(g)] (f) Matching Requirement.--
(1) * * *

* * * * * * *

[(h)] (g) Oversight of Mitigation Plans.--The Director shall
conduct oversight of recipients of mitigation assistance under
this section to ensure that the assistance is used in
compliance with the approved mitigation plans of the recipients
and that matching funds certified under [subsection (g)]
subsection (f) are used in accordance with such certification.
[(i)] (h) Recapture.--
(1) * * *
(2) Failure to provide matching funds.--If the
Director determines that a State or community that has
received mitigation assistance under this section has
not provided matching funds in the amount certified
under [subsection (g)] subsection (f), the Director
shall recapture any unexpended amounts of mitigation
assistance exceeding 3 times the amount of such
matching funds actually provided and deposit the
amounts in the National Flood Mitigation Fund under
section 1367.
[(j)] (i) Reports.--Not later than 1 year after the date of
enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994 and biennially thereafter, the Director
shall submit a report to the Congress describing the status of
mitigation activities carried out with assistance provided
under this section.
[(k)] (j) Definition of Community.--For purposes of this
section, the term ``community'' means--
(1) * * *

* * * * * * *

[(m)] (k) Coordination With States and Communities.--The
Director shall, in consultation and coordination with States
and communities take such actions as are appropriate to
encourage and improve participation in the national flood
insurance program of owners of properties, including owners of
properties that are not located in areas having special flood
hazards (the 100-year floodplain), but are located within flood
prone areas.

NATIONAL FLOOD MITIGATION FUND

Sec. 1367. (a) Establishment and Availability.--The Director
shall establish in the Treasury of the United States a fund to
be known as the National Flood Mitigation Fund, which shall be
credited with amounts described in subsection (b) and shall be
available, to the extent provided in appropriation Acts, for
providing assistance under section 1366. 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.

* * * * * * *

CHAPTER IV--APPROPRIATIONS AND MISCELLANEOUS PROVISIONS

DEFINITIONS

Sec. 1370. (a) As used in this title--
(1) * * *

* * * * * * *

(14) the term ``servicer'' means the person responsible for
receiving any scheduled periodic payments from a borrower
pursuant to the terms of a loan, including amounts for taxes,
insurance premiums, and other charges with respect to the
property securing the loan, and making the payments of
principal and interest and such other payments with respect to
the amounts received from the borrower as may be required
pursuant to the terms of the loan; [and]
(15) the term ``substantially damaged structure'' means a
structure covered by a contract for flood insurance that has
incurred damage for which the cost of repair exceeds an amount
specified in any regulation promulgated by the Director, or by
a community ordinance, whichever is lower[.]; and
(16) the term ``windstorm'' means any hurricane, tornado,
cyclone, typhoon, or other wind event.

* * * * * * *

----------

FLOOD DISASTER PROTECTION ACT OF 1973

* * * * * * *
TITLE I--EXPANSION OF NATIONAL FLOOD INSURANCE PROGRAM

* * * * * * *

FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS AND ESCROW
ACCOUNTS

Sec. 102. (a) * * *

* * * * * * *

(f) Civil Monetary Penalties for Failure To Require Flood
Insurance or Notify.--
(1) * * *

* * * * * * *

(5) Amount.--A civil monetary penalty under this
subsection may not exceed [$350] $2,000 for each
violation under paragraph (2) or paragraph (3). The
total amount of penalties assessed under this
subsection against any single regulated lending
institution or enterprise during any calendar year may
not exceed [$100,000] $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.
(6) Lender compliance.--Notwithstanding any State or
local law, for purposes of this subsection, any
regulated lending institution that purchases flood
insurance or renews a contract for flood insurance on
behalf of or as an agent of a borrower of a loan for
which flood insurance is required shall be considered
to have complied with the regulations issued under
subsection (b). 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.

* * * * * * *

----------

REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974

* * * * * * *
SPECIAL INFORMATION BOOKLETS

Sec. 5. (a) * * *

* * * * * * *

(c) Each lender shall include with the booklet a good faith
estimate of the amount or range of charges for specific
settlement services the borrower is likely to incur in
connection with the settlement as prescribed by the Secretary.
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.

* * * * * * *

----------

NATIONAL FLOOD INSURANCE REFORM ACT OF 1994

* * * * * * *
TITLE V--NATIONAL FLOOD INSURANCE REFORM

* * * * * * *

Subtitle F--Miscellaneous Provisions

* * * * * * *

SEC. 576. TECHNICAL MAPPING ADVISORY COUNCIL.

(a) * * *
(b) Membership.--
(1) In general.--The Council shall consist of the
Director of the Federal Emergency Management Agency (in
this section referred to as the ``Director''), or the
Director's designee, and [10] 14 additional members to
be appointed by the Director or the designee of the
Director, who shall be--
(A) * * *

* * * * * * *

(E) a representative of the Corps of
Engineers of the United States Army;
[(E)] (F) a representative of the United
States Geologic Survey;
[(F)] (G) a representative of State geologic
survey programs;
[(G)] (H) a representative of State national
flood insurance coordination offices;
(I) a representative of local or regional
flood and stormwater agencies;
(J) a representative of State geographic
information coordinators;
[(H)] (K) a representative of a regulated
lending institution;
(L) a representative of flood insurance
servicing companies;
(M) a real estate professional;
[(I)] (N) a representative of the Federal
Home Loan Mortgage Corporation; and
[(J)] (O) a representative of the Federal
National Mortgage Association.

* * * * * * *

(3) Terms of members.--
(A) In general.--Each member of the Council
pursuant to any of subparagraphs (B) through
(N) of paragraph (1) shall be appointed for a
term of 5 years, except as provided in
subparagraphs (B) and (C).
(B) Terms of initial appointees.--As
designated by the Director (or the designee of
the Director) at the time of appointment, of
the members of the Council first appointed
pursuant to subparagraph (D)--
(i) 4 shall be appointed for a term
of 1 year;
(ii) 4 shall be appointed for a term
of 3 years; and
(iii) 5 shall be appointed for a term
of 5 years.
(C) Vacancies.--Any member of the Council
appointed to fill a vacancy occurring before
the expiration of the term for which the
member's predecessor was appointed shall be
appointed only for the remainder of that term.
A member may serve after the expiration of that
member's term until a successor has taken
office. A vacancy in the Council shall be
filled in the manner in which the original
appointment was made.
(D) Initial appointment.--The Director, or
the Director's designee, shall take action as
soon as possible after the date of the
enactment of the Flood Insurance Reform and
Modernization Act of 2007 to appoint the
members of the Council pursuant to this
subsection.
[(c) Duties.--The Council shall--
[(1) make recommendations to the Director on how to
improve in a cost-effective manner the accuracy,
general quality, ease of use, and distribution and
dissemination of flood insurance rate maps;
[(2) recommend to the Director mapping standards and
guidelines for flood insurance rate maps; and
[(3) 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 established pursuant to
the amendment made by section 675 ; and
[(C) a summary of recommendations made by the
Council to the Director.]
(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.

* * * * * * *

[(k) Termination.--The Council shall terminate 5 years after
the date on which all members of the Council have been
appointed under subsection (b)(1).]
(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.

* * * * * * *

ADDITIONAL VIEWS OF REPRESENTATIVE BARNEY FRANK

As noted earlier in this report, this bill does not contain
any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in House rules. However, there are
many other items that this bill does not contain as well. I am
submitting a partial list for the edification of my colleagues:
This bill does not ratify any treaties.
This bill does not confirm any Supreme Court justices.
This bill does not amend the Constitution.
Barney Frank.

ADDITIONAL REPUBLICAN VIEWS

It is the view of the Republican Minority that the National
Flood Insurance Program (NFIP) should be reformed and be made
more actuarially sound before embarking on a massive expansion
into the wind insurance business. While H.R. 3121, the ``Flood
Insurance Reform and Modernization Act of 2007'' calls for
several crucial reforms-including a phase-in of actuarially
determined rates for some subsidized property owners-it also
requires the NFIP to make wind coverage available to anyone
purchasing flood insurance from the Federal government, in the
form of a ``multiple-peril'' policy. The NFIP currently owes
the Department of the Treasury around $18 billion, an amount it
was forced to borrow to pay claims from the 2005 hurricane
season. By its own account, it will likely never be able to
repay this sum. The Minority believes that although Congress
should continue to examine ways to encourage better access to
homeowners' wind insurance, it would be ill-advised to force
the NFIP to take on this new risk, as it could expose taxpayers
to further loss and could unnecessarily interfere with the
functioning of the private wind insurance market.
H.R. 3121 and other catastrophe insurance proposals before
the Committee seek to address, through Federal participation, a
phenomenon of rising insurance costs in coastal areas at high
risk of suffering hurricanes and other storms. Higher insurance
prices can often be traced to a few causes, including increased
risk (based on more frequent hurricanes, higher home values,
and increased construction in coastal areas), hostile
regulatory and legal climates, and temporary rate spikes
following major catastrophes, when insurers remodel risk,
rebuild surplus, and diversify exposure. H.R. 3121 would likely
not address any of these factors, and while it may provide
slightly more availability in the short-term, it could
ultimately displace the private market in some regions, leading
to fewer choices for consumers. Although it is questionable
whether FEMA would be able to carry out this mandate, the NFIP
multiple-peril product would be offered at ``actuarial'' rates,
placing the coverage out of reach for the very constituents
this bill is designed to help.
At the July 17, 2007 legislative hearing on H.R. 3121,
flood management groups, industry experts, the NAIC,
environmental organizations, Treasury, and FEMA expressed
concern over expanding the NFIP to include wind risks. These
witnesses raised several questions about how the multiple-peril
program would be implemented and administered, including how
the new NFIP multiple-peril coverage would be priced, and how
the NFIP would maintain actuarial soundness. The panel also
expressed concern over the possibility that this bill could
displace the private market, which generally offers wind
coverage in most homeowners' insurance policies. Instead, the
panel called for a comprehensive study addressing several
issues, including determining what effects this massive
expansion could have on the current program, how it would
impact the availability and affordability of wind insurance,
and how the NFIP would implement this mandate.
In a June 2007 report, the Congressional Budget Office
(CBO) reported that 47 percent of subsidized non-primary
coastal homes and 37 percent of subsidized primary residences
are worth at least $500,000. Further, close to 90 percent of
the NFIP's Severe Repetitive Loss Properties (SRLPs) currently
enjoy subsidized rates.The Republican Minority believes that
the chief objective of the Committee and the Congress should be reform
of the existing NFIP, including the removal of subsidies over time to
improve the long-term solvency of the program. In contrast, H.R. 3121
would dramatically increase the scope of the NFIP, at a time when the
Government Accountability Office (GAO) includes the program on its
``High Risk'' Series list, recommending increased oversight by
Congress. While the Minority supports the vast majority of the
provisions in H.R. 3121--which are similar to the bipartisan flood
insurance reform bill introduced earlier this year (H.R. 1682), and the
bipartisan bill that overwhelmingly passed the House last Congress
(H.R. 4973)--the inclusion of wind coverage would likely exacerbate the
NFIP's administrative problems.
At the Committee's markup of H.R. 3121 Rep. Ginny Brown-
Waite (FL), along with Reps. Adam Putnam (FL) and Tom Feeney
(FL), offered an amendment that would strike the mandate in
H.R. 3121 requiring the NFIP to offer wind insurance and would
replace it with a comprehensive GAO study. Unfortunately, the
Majority rejected this common-sense amendment, which would
require the GAO to examine a number of factors relating to the
multiple-peril program proposed in H.R. 3121, including, among
other things:
The ability of the NFIP to timely implement
an actuarially-sound wind insurance program;
The effects the expansion into wind
insurance could have on flood insurance reform,
including map modernization, and the phase-in of
actuarial rates;
Whether an expansion of the NFIP to include
wind coverage could affect the availability and
affordability of such coverage, influence the private-
sector development of multiple-peril products, or
result in adverse selection;
Any potential taxpayer exposure the new
program could pose, similar to the deficit resulting
from the 2005 hurricane season;
Available alternative methods that could
offer policyholders more options for wind coverage; and
Coverage gaps that would remain under most
homeowners policies.
Although this amendment was not accepted, a bipartisan
study request letter has been transmitted to the GAO, requiring
it to conduct a study on the issues outlined above. The
Minority strongly urges the Committee to closely examine any
GAO findings and recommendations resulting from this study and
to seriously consider implementing them.
Several other Republican amendments were adopted at
Committee markup. Rep. Randy Neugebauer (TX) offered an
amendment to require FEMA to study and report on the impact,
effectiveness, and feasibility of including widely used
building codes as part of the NFIP's floodplain management
criteria. The Committee also accepted an amendment by Rep.
Richard Baker (LA) that would delay the implementation of
Section 7, which creates the NFIP multiple-peril product, until
June 30, 2008, so that the GAO can study the impact of this
provision, in accordance with the bipartisan request. An
amendment by Rep. Jeb Hensarling (TX) was approved that would
require FEMA to report to Congress regarding how it plans to
repay, within 10 years, its debt to Treasury. Rep. Tom Price
(GA) offered an amendment to eliminate the requirement that an
additional, one-page description of the NFIP coverage be
distributed to policyholders, instead requiring the more
comprehensive supplemental forms already mandated by the
Bunning-Bereuter Blumenauer Flood Insurance Reform Act of 2004.
Finally, Rep. Patrick McHenry (NC) offered an amendment that
would suspend FEMA's ability to offer new multiple-peril
policies if the NFIP is forced to borrow from the Treasury to
pay multiple-peril claims.
Despite these improvements and the continuing need for
flood insurance reform, nearly all Committee Republicans were
unable to support this legislation, because of the significant
new taxpayer liabilities it creates. The Eastern Seaboard and
Gulf Coast contain more than $19 trillion of insured value.
Shifting even a portion of this risk to the troubled NFIP could
expose taxpayers to massive losses. H.R. 3121 could also result
in significant adverse selection for the multiple-peril
program. Because wind is a standard component of homeowners
insurance, the risk from a government-backed wind product would
likely be concentrated in regions where wind coverage is the
most difficult to obtain in the private market. Another large
hurricane or storm in the Gulf region that causes both flood
and wind losses could bankrupt the NFIP by several times its
current insolvency. The Minority believes that, at the very
least, this proposal, as well as others, should be thoroughly
studied before being authorized by Congress. In addition to a
GAO study, Committee Republicans support efforts by the Senate
Banking Committee to create an independent natural catastrophe
insurance commission to study and report on legislative and
regulatory changes to improve the availability and
competitiveness of disaster insurance.

Spencer Bachus.
Frank D. Lucas.
Donald A. Manzullo.
Geoff Davis.
Scott Garrett.
Adam H. Putnam.
Kenny Marchant.
Jeb Hensarling.
Tom Feeney.
Randy Neugebauer.
Peter J. Roskam.
Tom Price.
Gary G. Miller.
Ed Royce.
Ron Paul.
Christopher Shays.
Judy Biggert.