Public Law 103-325

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

P.L. 103-325
Sec. 511

[Riegle Community Development and Regulatory Improvement Act of 1994]

TITLE V--NATIONAL FLOOD INSURANCE

REFORM

SEC. 501. SHORT TITLE.
This title may be cited as the “National Flood Insurance Reform Act of 1994”.

Subtitle A--Definitions
SEC. 511. FLOOD DISASTER PROTECTION ACT OF 1973.
(a) IN GENERAL.-- Section 3(a) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4003(a)) is amended-­
(1) by striking paragraph (5) and inserting the following new
paragraph:
“(5) ‘Federal entity for lending regulation’ means the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the Office of Thrift
Supervision, the National Credit Union Administration, and the Farm Credit
Administration, and with respect to a particular regulated lending institution
means the entity primarily responsible for the supervision of the institution;”;
(2) in paragraph (6), by striking the period at the end and inserting a
semicolon; and
(3) by inserting after paragraph (6) the following new paragraphs:
“(7) ‘Federal agency lender’ means a Federal agency that makes direct
loans secured by improved real estate or a mobile home, to the extent such
agency acts in such capacity;
“(8) the term ‘improved real estate’ means real estate upon which a
building is located;
“(9) ‘lender’ means a regulated lending institution or Federal agency
lender;
“(10) ‘regulated lending institution’ means any bank, savings and loan
association, credit union, farm credit bank, Federal land bank association,
production credit association, or similar institution subject to the supervision
of a Federal entity for lending regulation; and
“(11) ‘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.”.

108 STAT. 2255

National Flood
Insurance
Reform Act of
1994.
42 U.S.C.
4001 note.

P.L. 103-325
Sec. 511
Regulations.

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

(b) CONFORMING AMENDMENT.-- Section 202(b) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4106(b)) is amended by striking “Federal
instrumentality described in such section shall by regulation require the
institutions” and inserting “Federal entity for lending regulation shall by
regulation require the regulated lending institutions described in such section,
and each Federal agency lender shall issue regulations requiring the Federal
agency lender,”.
SEC. 512. NATIONAL FLOOD INSURANCE ACT OF 1968.
(a) IN GENERAL.-- Section 1370(a) of the National Flood Insurance Act of
1968 (42 U.S.C. 4121(a)) is amended-­
(1) in paragraph (5), by striking “and” at the end;
(2) in paragraph (6), by striking the period at the end and inserting a
semicolon; and
(3) by inserting after paragraph (6) the following new paragraphs:
“(7) the term ‘repetitive loss structure’ means a structure covered by
a contract for flood insurance under this title that has incurred floodrelated damage on 2 occasions during a 10-year period ending on the date
of the event for which a second claim is made, in which the cost of repair,
on the average, equaled or exceeded 25 percent of the value of the
structure at the time of each such flood event;
“(8) the term ‘Federal agency lender’ means a Federal agency that
makes direct loans secured by improved real estate or a mobile home, to
the extent such agency acts in such capacity;
“(9) the term ‘Federal entity for lending regulation’ means the Board
of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Comptroller of the Currency, the Office of
Thrift Supervision, the National Credit Union Administration, and the
Farm Credit Administration, and with respect to a particular regulated
lending institution means the entity primarily responsible for the
supervision of the institution;
“(10) the term ‘improved real estate’ means real estate upon which a
building is located;
“(11) the term ‘lender’ means a regulated lending institution or
Federal agency lender;
“(12) the term ‘natural and beneficial floodplain functions’ means-­
“(A) the functions associated with the natural or relatively
undisturbed floodplain that (i) moderate flooding, retain flood waters,
reduce erosion and sedimentation, and mitigate the effect of waves
and storm surge from storms, and (ii) reduce flood related damage;
and
“(B) ancillary beneficial functions, including maintenance of
water quality and recharge of ground water, that reduce flood related
damage;
“(13) the term ‘regulated lending institution’ means any bank, savings
and loan association, credit union, farm credit bank, Federal land bank
association, production credit association, or similar institution subject to
the supervision of a Federal entity for lending regulation; and
“(14) the term ‘servicer’ means the person responsible for receiving
any scheduled periodic payments from a borrower pursuant to the [2257]

108 STAT. 2256

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

P.L. 103-325
Sec. 522
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.”.

(b) CONFORMING AMENDMENT.-- Section 1322(d) of the National Flood

Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by striking “federally
supervised, approved, regulated or insured financial institution” and inserting
“regulated lending institution or Federal agency lender”.

Subtitle B--Compliance and Increased Participation

Loans.
Real
Property.

SEC. 521. NONWAIVER OF FLOOD PURCHASE REQUIREMENT FOR
RECIPIENTS OF FEDERAL DISASTER ASSISTANCE.
Section 311(b) of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5154(b)) is amended by adding at the end the following
new sentence: “The requirements of this subsection may not be waived under section
301.”.
SEC. 522. EXPANDED FLOOD INSURANCE PURCHASE REQUIRE­
MENTS.
(a) IN GENERAL.-- Section 102(b) of the Flood Disaster Protection Act of 1973
(42 U.S.C. 4012a(b)) is amended to read as follows:
“(b) REQUIREMENT FOR MORTGAGE LOANS.-­
“(1) REGULATED LENDING INSTITUTIONS.-- Each Federal entity for
lending regulation (after consultation and coordination with the Financial
Institutions Examination Council established under the Federal Financial
Institutions Examination Council Act of 1974) shall by regulation direct
regulated lending institutions not to make, increase, extend, or renew any loan
secured by improved real estate or a mobile home located or to be located in an
area that has been identified by the Director as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968, unless the building or mobile home and
any personal property securing such loan is covered for the term of the loan by
flood insurance in an amount at least equal to the outstanding principal balance
of the loan or the maximum limit of coverage made available under the Act with
respect to the particular type of property, whichever is less.
“(2) FEDERAL AGENCY LENDERS.-- A Federal agency lender may not
make, increase, extend, or renew any loan secured by improved real estate or a
mobile home located or to be located in an area that has been identified by the
Director as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968,
unless the building or mobile home and any personal property securing such
loan is covered for the term of the loan by flood insurance in the amount pro­
vided in paragraph (1). Each Federal agency lender shall issue any regula-tions
necessary to carry out this paragraph. Such regulations shall be consistent with
and substantially identical to the regulations issued under paragraph (1).

108 STAT. 2257

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Sec. 522

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Sept. 23

“(3) GOVERNMENT-SPONSORED ENTERPRISES FOR HOUSING.-- The
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation shall implement procedures reasonably designed to
ensure that, for any loan that is-­
“(A) secured by improved real estate or a mobile home located
in an area that has been identified, at the time of the origination of the
loan or at any time during the term of the loan, by the Director as an
area having special flood hazards and in which flood insurance is
available under the National Flood Insurance Act of 1968, and
“(B) purchased by such entity,
the building or mobile home and any personal property securing
the loan is covered for the term of the loan by flood insurance in the
amount provided in paragraph (1).
“(4) APPLICABILITY.-­
“(A) EXISTING COVERAGE.-- Except as provided in
subparagraph (B), paragraph (1) shall apply on the date of enactment
of the Riegle Community Development and Regulatory Improvement
Act of 1994.
“(B) NEW COVERAGE.-- Paragraphs (2) and (3) shall apply only
with respect to any loan made, increased, extended, or renewed after
the expiration of the 1-year period beginning on the date of
enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994. Paragraph (1) shall apply with respect to
any loan made, increased, extended, or renewed by any lender
supervised by the Farm Credit Administration only after the
expiration of the period under this subparagraph.
“(C) CONTINUED EFFECT OF REGULATIONS.-- Notwithstanding
any other provision of this subsection, the regulations to carry out
paragraph (1), as in effect immediately before the date of enactment
of the Riegle Community Development and Regulatory Improvement
Act of 1994, shall continue to apply until the regulations issued to
carry out paragraph (1) as amended by section 522(a) of such Act
take effect.”.
(b) EXEMPTION FOR SMALL LOANS.-- Section 102(c) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(c)) is amended-­
(1) by striking “(c) Notwithstanding” and inserting the following:
“(c) EXCEPTIONS TO PURCHASE REQUIREMENTS.-­
“(1) STATE-OWNED PROPERTY.-- Notwithstanding”; and
(2) by adding at the end the following new paragraph:
“(2) SMALL LOANS.-- Notwithstanding any other provision of this
section, subsections (a) and (b) shall not apply to any loan having-­
“(A) an original outstanding principal balance of $5,000 or
less; and
“(B) a repayment term of 1 year or less.”.
SEC. 523. ESCROW OF FLOOD INSURANCE PAYMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) is amended by adding at the end the following new subsection:
“(d) ESCROW OF FLOOD INSURANCE PAYMENTS.-­
“(1) REGULATED LENDING INSTITUTIONS.-- Each Federal entity for
lending regulation (after consultation and coordination [2259] with the

108 STAT. 2258

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

P.L. 103-325
Sec. 524

Financial Institutions Examination Council) shall by regulation require that, if
a regulated lending institution requires the escrowin8g of taxes, insurance
premiums, fees, or any other charges for a loan secured by residential
improved real estate or a mobile home, then all premiums and fees for flood
insurance under the National Flood Insurance Act of 1968 for the real estate
or mobile home shall be paid to the regulated lending institution or other
servicer for the loan in a manner sufficient to make payments as due for the
duration of the loan. Upon receipt of the premiums, the regulated lending
institution or servicer of the loan shall deposit the premiums in an escrow
account on behalf of the borrower. Upon receipt of a notice from the Director
or the provider of the insurance that insurance premiums are due, the
regulated lending institution or servicer shall pay from the escrow account to
the provider of the insurance the amount of insurance premiums owed.
“(2) FEDERAL AGENCY LENDERS.-- Each Federal agency lender shall by Regulations.
regulation require and provide for escrow and payment of any flood insurance
premiums and fees relating to residential improved real estate and mobile
homes securing loans made by the Federal agency lender under the
circumstances and in the manner provided under paragraph (1). Any regula­
tions issued under this paragraph shall be consistent with and substantially
identical to the regulations issued under paragraph (1).
“(3) APPLICABILITY OF RESPA.-- Escrow accounts established pursuant
to this subsection shall be subject to the provisions of section 10 of the Real
Estate Settlement Procedures Act of 1974.
“(4) DEFINITION.-- For purposes of this subsection, the term ‘residential
improved real estate’ means improved real estate for which the improvement
is a residential building.
“(5) APPLICABILITY.-- This subsection shall apply only with respect to
any loan made, increased, extended, or renewed after the expiration of the 1year period beginning on the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994.”.
SEC. 524. PLACEMENT OF FLOOD INSURANCE BY LENDERS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a),
as amended by the preceding provisions of this title, is further amended by adding
at the end the following new subsection:
“(e) PLACEMENT OF FLOOD INSURANCE BY LENDER.-­
“(1) NOTIFICATION TO BORROWER OF LACK OF COVERAGE.-- If, at the
time of origination or at any time during the term of a loan secured by
improved real estate or by a mobile home located in an area that has been
identified by the Director (at the time of the origination of the loan or at any
time during the term of the loan) as an area having special flood hazards and
in which flood insurance is available under the National Flood Insurance Act
of 1968, the lender or servicer for the loan determines that the building or
mobile home and any personal property securing the loan is not covered by
flood insurance or is covered by such insurance in an amount less than the
amount required for the property pursuant to [2260] paragraph (1), (2), or (3)

108 STAT. 2259

P.L. 103-325
Sec. 524

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

of subsection (b), the lender or servicer shall notify the borrower under the
loan that the borrower should obtain, at the borrower’s expense, an
amount of flood insurance for the building or mobile home and such
personal property that is not less than the amount under subsection (b)(1),
for the term of the loan.
“(2) PURCHASE OF COVERAGE ON BEHALF OF BORROWER.-- If the
borrower fails to purchase such flood insurance within 45 days after
notification under paragraph (1), the lender or servicer for the loan shall
purchase the insurance on behalf of the borrower and may charge the
borrower for the cost of premiums and fees incurred by the lender or
servicer for the loan in purchasing the insurance.
“(3) REVIEW OF DETERMINATION REGARDING REQUIRED PURCHASE.-­
“(A) IN GENERAL.-- The borrower and lender for a loan secured
by improved real estate or a mobile home may jointly request the
Director to review a determination of whether the building or mobile
home is located in an area having special flood hazards. Such request
shall be supported by technical information relating to the improved
real estate or mobile home. Not later than 45 days after the Director
receives the request, the Director shall review the determination and
provide to the borrower and the lender with a letter stating whether
or not the building or mobile home is in an area having special flood
hazards. The determination of the Director shall be final.
“(B) EFFECT OF DETERMINATION.-- Any person to whom a
borrower provides a letter issued by the Director pursuant to
subparagraph (A), stating that the building or mobile home securing
the loan of the borrower is not in an area having special flood
hazards, shall have no obligation under this title to require the
purchase of flood insurance for such building or mobile home during
the period determined by the Director, which shall be specified in the
letter and shall begin on the date on which such letter is provided.
“(C) EFFECT OF FAILURE TO RESPOND.-- If a request under
subparagraph (A) is made in connection with the origination of a loan
and the Director fails to provide a letter under subparagraph (A)
before the later of (i) the expiration of the 45-day period under such
subparagraph, or (ii) the closing of the loan, no person shall have an
obligation under this title to require the purchase of flood insurance
for the building or mobile home securing the loan until such letter is
provided.
“(4) APPLICABILITY.-- This subsection shall apply to all loans
outstanding on or after the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994.”.
SEC. 525. PENALTIES FOR FAILURE TO REQUIRE FLOOD
INSURANCE OR NOTIFY.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a), as amended by the preceding provisions of this title, is further amended
by adding at the end the following new subsections:

108 STAT. 2260

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

“(f) CIVIL MONETARY PENALTIES FOR FAILURE TO REQUIRE FLOOD
INSURANCE OR NOTIFY.-­
“(1) CIVIL MONETARY PENALTIES AGAINST REGULATED LENDERS.-­
Any regulated lending institution that is found to have a pattern or practice of
committing violations under paragraph (2) shall be assessed a civil penalty by
the appropriate Federal entity for lending regulation in the amount provided
under paragraph (5).
“(2) LENDER VIOLATIONS.-- The violations referred to in paragraph (1)
shall include-­
“(A) making, increasing, extending, or renewing loans in
violation of-­
“(i) the regulations issued pursuant to subsection (b) of
this section;
“(ii) the escrow requirements under subsection (d) of this
section; or
“(iii) the notice requirements under section 1364 of the
National Flood Insurance Act of 1968; or
“(B) failure to provide notice or purchase flood insurance
coverage in violation of subsection (e) of this section.
“(3) CIVIL MONETARY PENALTIES AGAINST GSE’S.-­
“(A) IN GENERAL.-- If the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation is found
by the Director of the Office of Federal Housing Enterprise Oversight of
the Department of Housing and Urban Development to have a pattern or
practice of purchasing loans in violation of the procedures established
pursuant to subsection (b)(3), the Director of such Office shall assess a
civil penalty against such enterprise in the amount provided under
paragraph (5) of this subsection.
“(B) DEFINITION.-- For purposes of this subsection, the term
‘enterprise’ means the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation.
“(4) NOTICE AND HEARING.-- A penalty under this subsection may be
issued only after notice and an opportunity for a hearing on the record.
“(5) AMOUNT.-- A civil monetary penalty under this subsection may not
exceed $350 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.
“(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).
“(7) EFFECT OF TRANSFER ON LIABILITY.-- Any sale or other transfer of
a loan by a regulated lending institution that has committed a violation under
paragraph (1), that occurs subsequent to the violation, shall not affect the
liability of the transferring lender with respect to any penalty under this
subsection. A lender shall not be liable for any violations relating [2262] to a

108 STAT. 2261

P.L. 103-325
Sec. 525

P.L. 103-325
Sec. 525

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

loan committed by another regulated lending institution that previously
held the loan
“(8) DEPOSIT OF PENALTIES.-- Any penalties collected under this
subsection shall be paid into the National Flood Mitigation Fund under
section 1367 of the National Flood Insurance Act of 1968.
“(9) ADDITIONAL PENALTIES.-- Any penalty under this subsection
shall be in addition to any civil remedy or criminal penalty otherwise
available.
“(10) STATUTE OF LIMITATIONS.-- No penalty may be imposed under
this subsection after the expiration of the 4-year period beginning on the
date of the occurrence of the violation for which the penalty is authorized
under this subsection.
“(g) OTHER ACTIONS TO REMEDY PATTERN OF NONCOMPLIANCE.-­
“(1) AUTHORITY OF FEDERAL ENTITIES FOR LENDING REGULATION.-­
A Federal entity for lending regulation may require a regulated lending
institution to take such remedial actions as are necessary to ensure that the
regulated lending institution complies with the requirements of the national
flood insurance program if the Federal agency for lending regulation makes
a determination under paragraph (2) regarding the regulated lending
institution.
“(2) DETERMINATION OF VIOLATIONS.-- A determination under this
paragraph shall be a finding that-­
“(A) the regulated lending institution has engaged in a pattern
and practice of noncompliance in violation of the regulations issued
pursuant to subsection (b), (d), or (e) or the notice requirements
under section 1364 of the National Flood Insurance Act of 1968; and
“(B) the regulated lending institution has not demonstrated
measurable improvement in compliance despite the assessment of
civil monetary penalties under subsection (f).”.
SEC. 526. FEES FOR DETERMINING APPLICABILITY OF FLOOD
INSURANCE PURCHASE REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) as amended by the preceding provisions of this title, is further amended
by adding at the end the following new subsection:
“(h) FEE FOR DETERMINING LOCATION.-- Notwithstanding any other
Federal or State law, any person who makes a loan secured by improved
real estate or a mobile home or any servicer for such a loan may charge a
reasonable fee for the costs of determining whether the building or mobile
home securing the loan is located in an area having special flood hazards,
but only in accordance with the following requirements:
“(1) BORROWER FEE.-- The borrower under such a loan may
be charged the fee, but only if the determination-­
“(A) is made pursuant to the making, increasing,
extending, or renewing of the loan that is initiated by the
borrower;
“(B) is made pursuant to a revision or updating under
section 1360(f) of the floodplain areas and flood-risk zones or

108 STAT. 2262

Sept.23

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P.L. 103-325
Sec. 527

publication of a notice or compendia under subsection [2263]
(h) or (i) of section 1360 that affects the area in which the
improved real estate or mobile home securing the loan is
located or that, in the determination of the Director, may
reasonably be considered to require a determination under this
subsection; or
“(C) results in the purchase of flood insurance
coverage pursuant to the requirement under subsection (e)(2).
“(2) PURCHASER OR TRANSFEREE FEE.-- The purchaser or
transferee of such a loan may be charged the fee in the case of sale or
transfer of the loan.”.
SEC. 527. NOTICE REQUIREMENTS.
Section 1364 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104a)
is amended to read as follows:
“NOTICE REQUIREMENTS
“SEC. 1364. (a) NOTIFICATION OF SPECIAL FLOOD HAZARDS.-­
“(1) REGULATED LENDING INSTITUTIONS.-- Each Federal entity for
lending regulation (after consultation and coordination with the Financial
Institutions Examination Council) shall by regulation require regulated lending
institutions, as a condition of making, increasing, extending, or renewing any
loan secured by improved real estate or a mobile home that the regulated
lending institution determines is located or is to be located in an area that has
been identified by the Director under this title or the Flood Disaster
Protection Act of 1973 as an area having special flood hazards, to notify the
purchaser or lessee (or obtain satisfactory assurances that the seller or lessor
has notified the purchaser or lessee) and the servicer of the loan of such
special flood hazards, in writing, a reasonable period in advance of the signing
of the purchase agreement, lease, or other documents involved in the
transaction. The regulations shall also require that the regulated lending Records.
institution retain a record of the receipt of the notices by the purchaser or
lessee and the servicer.
“(2) FEDERAL AGENCY LENDERS.-- Each Federal agency lender shall Regulations.
by regulation require notification in the manner provided under paragraph (1)
with respect to any loan that is made by the Federal agency lender and
secured by improved real estate or a mobile home located or to be located in
an area that has been identified by the Director under this title or the Flood
Disaster Protection Act of 1973 as an area having special flood hazards. Any
regulations issued under this paragraph shall be consistent with and
substantially identical to the regulations issued under paragraph (1).
“(3) CONTENTS OF NOTICE.-- Written notification required under this
subsection shall include-­
“(A) a warning, in a form to be established by the Director,
stating that the building on the improved real estate securing the loan
is located, or the mobile home securing the loan is or is to be located,
in an area having special flood hazards;
“(B) a description of the flood insurance purchase
requirements under section 102(b) of the Flood Disaster Protection
Act of 1973;

108 STAT. 2263

P.L. 103-325
Sec. 527

Regulations.

Regulations.

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“(C) a statement that flood insurance coverage may be
purchased under the national flood insurance program and is also
available from private insurers; and
“(D) any other information that the Director considers
necessary to carry out the purposes of the national flood insurance
program.
“(b) NOTIFICATION OF CHANGE OF SERVICER.-“(1) LENDING INSTITUTIONS.-- Each Federal entity for lending
regulation (after consultation and coordination with the Financial
Institutions Examination Council) shall by regulation require regulated
lending institutions, in connection with the making, increasing, extending,
renewing, selling, or transferring any loan described in subsection (a)(1), to
notify the Director (or the designee of the Director) in writing during the
term of the loan of the servicer of the loan. Such institutions shall also
notify the Director (or such designee) of any change in the servicer of the
loan, not later than 60 days after the effective date of such change. The
regulations under this subsection shall provide that upon any change in the
servicing of a loan, the duty to provide notification under this subsection
shall transfer to the transferee servicer of the loan.
“(2) FEDERAL AGENCY LENDERS.-- Each Federal agency lender shall
by regulation provide for notification in the manner provided under
paragraph (1) with respect to any loan described in subsection (a)(1) that is
made by the Federal agency lender. Any regulations issued under this
paragraph shall be consistent with and substantially identical to the
regulations issued under paragraph (1) of this subsection.
“(c) NOTIFICATION OF EXPIRATION OF INSURANCE.-- The Director (or the
designee of the Director) shall, not less than 45 days before the expiration of any
contract for flood insurance under this title, issue notice of such expiration by
first class mail to the owner of the property covered by the contract, the servicer
of any loan secured by the property covered by the contract, and (if known to the
Director) the owner of the loan.”.
SEC. 528. STANDARD HAZARD DETERMINATION FORMS.
Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 4101
et seq.) is amended by adding at the end the following new section:
“STANDARD HAZARD DETERMINATION FORMS

42 USC 4104b.

Regulations.

“SEC. 1365. (a) DEVELOPMENT.-- The Director, in consultation with
representatives of the mortgage and lending industry, the Federal entities for
lending regulation, the Federal agency lenders, and any other appropriate
individuals, shall develop a standard form for determining, in the case of a loan
secured by improved real estate or a mobile home, whether the building or
mobile home is located in an area identified by the Director as an area having
special flood hazards and in which flood insurance under this title is available.
The form shall be established by regulations issued not later than 270 days after
the date of enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994.
“(b) DESIGN AND CONTENTS.-­
“(1) PURPOSE.-- The form under subsection (a) shall be designed to
facilitate compliance with the flood insurance purchase requirements of this
title.
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Sec. 528

“(2) CONTENTS.-- The form shall require identification of the type of
flood-risk zone in which the building or mobile home is located, the
complete map and panel numbers for the improved real estate or property
on which the mobile home is located, the community identification number
and community participation status (for purposes of the national flood
insurance program) of the community in which the improved real estate or
such property is located, and the date of the map used for the determination,
with respect to flood hazard information on file with the Director. If the
building or mobile home is not located in an area having special flood
hazards the form shall require a statement to such effect and shall indicate
the complete map and panel numbers of the improved real estate or
property on which the mobile home is located. If the complete map and
panel numbers are not available because the building or mobile home is not
located in a community that is participating in the national flood insurance
program or because no map exists for the relevant area, the form shall
require a statement to such effect. The form shall provide for inclusion or
attachment of any relevant documents indicating revisions or amendments
to maps.
“(c) REQUIRED USE.-- The Federal entities for lending regulation shall by Regulations.
regulation require the use of the form under this section by regulated lending
institutions. Each Federal agency lender shall by regulation provide for the use of
the form with respect to any loan made by such Federal agency lender. The Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation
and the Government National Mortgage Association shall require the use of the
form with respect to any loan purchased by such entities. A lender or other person
may comply with the requirement under this subsection by using the form in a
printed, computerized, or electronic manner.
“(d) GUARANTEES REGARDING INFORMATION.-- In providing information
regarding special flood hazards on the form developed under this section, any
lender (or other person required to use the form) who makes, increases, extends, or
renews a loan secured by improved real estate or a mobile home may provide for
the acquisition or determination of such information to be made by a person other
than such lender (or other person), only to the extent such person guarantees the
accuracy of the information.
“(e) RELIANCE ON PREVIOUS DETERMINATION.-- Any person increasing,
extending, renewing, or purchasing a loan secured by improved real estate or a
mobile home may rely on a previous determination of whether the building or
mobile home is located in an area having special flood hazards (and shall not be
liable for any error in such previous determination), if the previous determination
was made not more than 7 years before the date of the transaction and the basis for
the previous determination has been set forth on a form under this section, unless-­
“(1) map revisions or updates pursuant to section 1360(f) after such
previous determination have resulted in the building or mobile home being
located in an area having special flood hazards; or
“(2) the person contacts the Director to determine when the most
recent map revisions or updates affecting such property occurred and such
revisions and updates have occurred after such previous determination.

108 STAT. 2265

P.L. 103-325
Sec. 528
Regulations.

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“(f) EFFECTIVE DATE.-- The regulations under this section requiring use of
the form established pursuant to this section shall be issued together with the
regulations required under subsection (a) and shall take effect upon the
expiration of the 180-day period beginning on such issuance.”.
SEC. 529. EXAMINATIONS REGARDING COMPLIANCE.
(a) AMENDMENT TO FEDERAL DEPOSIT INSURANCE ACT.-- Section 10 of
the Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by adding at
the end the following new subsection:
“(i) FLOOD INSURANCE COMPLIANCE BY INSURED DEPOSITORY
INSTITUTIONS-­
“(1) EXAMINATIONS.-- The appropriate Federal banking agency shall,
during each scheduled on-site examination required by this section,
determine whether the insured depository institution is complying with the
requirements of the national flood insurance program.
“(2) REPORT.-­
“(A) REQUIREMENT.-- Not later than 1 year after the date of
enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994 and biennially thereafter for the next 4
years, each appropriate Federal banking agency shall submit a report
to the Congress on compliance by insured depository institutions with
the requirements of the national flood insurance program.
“(B) CONTENTS.-- Each report submitted under this paragraph
shall include a description of the methods used to determine
compliance, the number of institutions examined during the reporting
year, a listing and total number of institutions found not to be in
compliance, actions taken to correct incidents of noncompliance, and
an analysis of compliance, including a discussion of any trends,
patterns, and problems, and recommendations regarding reasonable
actions to improve the efficiency of the examinations processes.”.
(b) AMENDMENT TO FEDERAL CREDIT UNION ACT.-- Section 204 of the
Federal Credit Union Act (12 U.S.C. 1784) is amended by adding at the end the
following new subsection:
“(e) FLOOD INSURANCE COMPLIANCE BY INSURED CREDIT UNIONS.-­
“(1) EXAMINATION.-- The Board shall, during each examination
conducted under this section, determine whether the insured credit union is
complying with the requirements of the national flood insurance program.
“(2) REPORT.-­
“(A) REQUIREMENT.-- Not later than 1 year after the date of
enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994 and biennially thereafter for the next 4
years, the Board shall submit a report to the Congress on compliance
by insured credit unions with the requirements of the national flood
insurance program.
“(B) CONTENTS.-- The report shall include a description of the
methods used to determine compliance, the number of insured credit
unions examined during the reporting year, a listing and total number
of insured credit unions found not to be in compliance,

108 STAT. 2266

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RIEGLE COMMUNITY DEVELOPMENT ACT

actions taken to correct [2267] incidents of noncompliance, and an
analysis of compliance, including a discussion of any trends, patterns,
and problems, and recommendations regarding reasonable actions to
improve the efficiency of the examinations processes.”.
(c) AMENDMENT TO FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY
AND SOUNDNESS ACT OF 1992.-- Section 1319B(a) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4521(a)) is
amended-­
(1) in paragraph (2), by striking “and” at the end;
(2) in paragraph (3), by striking the period at the end and inserting “;
and”; and
(3) by adding at the end the following new paragraph:
“(4) a description of-­
“(A) whether the procedures established by each enterprise
pursuant to section 102(b)(3) of the Flood Disaster Protection Act of
1973 are adequate and being complied with, and
“(B) the results and conclusions of any examination, as
determined necessary by the Director, to determine the compliance of
the enterprises with the requirements of section 102(b)(3) of such Act,
which shall include a description of the methods used to determine
compliance and the types and sources of deficiencies (if any), and
identify any corrective measures that have been taken to remedy any
such deficiencies,
except that the information described in this paragraph shall be included
only in each of the first, third, and fifth annual reports under this subsection
required to be submitted after the expiration of the 1-year period beginning
on the date of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994.”.
SEC. 530. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
Section 1006 of the Federal Financial Institutions Examination Council Act
of 1978 (12 U.S.C. 3305) is amended by adding at the end the following new
subsection:
“(g) FLOOD INSURANCE.-- The Council shall consult with and assist the
Federal entities for lending regulation, as such term is defined in section 1370(a) of
the National Flood Insurance Act of 1968, in developing and coordinating uniform
standards and requirements for use by regulated lending institutions under the
national flood insurance program.”.
SEC. 531. CLERICAL AMENDMENT.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) is amended by striking the section heading and inserting the following new
section heading:

108 STAT. 2267

P.L. 103-325
Sec. 531

P.L. 103-325
Sec. 531

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS
AND ESCROW ACCOUNTS”.

Subtitle C--Ratings and Incentives for Community
Floodplain Management Programs
SEC. 541. COMMUNITY RATING SYSTEM AND INCENTIVES FOR
COMMUNITY FLOODPLAIN MANAGEMENT.
Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C.
4022) is amended-­
(1) by striking “After December” and inserting the following:
“(a) REQUIREMENT FOR PARTICIPATION IN FLOOD INSURANCE PROGRAM.-­
“(1) IN GENERAL.-- After December”; and
(2) by adding at the end the following new subsection:
“(b) COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY
FLOODPLAIN MANAGEMENT.-­
“(1) AUTHORITY AND GOALS.-- The Director shall carry out a
community rating system program, under which communities participate
voluntarily-­
“(A) to provide incentives for measures that reduce the risk of
flood or erosion damage that exceed the criteria set forth in section
1361 and evaluate such measures;
“(B) to encourage adoption of more effective measures that
protect natural and beneficial floodplain functions;
“(C) to encourage floodplain and erosion management; and
“(D) to promote the reduction of Federal flood insurance losses.
“(2) INCENTIVES.-- The program shall provide incentives in the form
of credits on premium rates for flood insurance coverage in communities
that the Director determines have adopted and enforced measures that
reduce the risk of flood and erosion damage that exceed the criteria set
forth in section 1361. In providing incentives under this paragraph, the
Director may provide for credits to flood insurance premium rates in
communities that the Director determines have implemented measures that
protect natural and beneficial floodplain functions.
“(3) CREDITS.-- The credits on premium rates for flood insurance
coverage shall be based on the estimated reduction in flood and erosion
damage risks resulting from the measures adopted by the community under
this program. If a community has received mitigation assistance under
section 1366, the credits shall be phased in a manner, determined by the
Director, to recover the amount of such assistance provided for the
community.
“(4) REPORTS.-- Not later than 2 years after the date of enactment of
the Riegle Community Development and Regulatory Improvement Act of
1994 and not less than every 2 years thereafter, the Director shall submit a
report to the Congress regarding the program under this subsection. Each
report shall include an analysis of the cost-effectiveness of the [2269] pro-

108 STAT. 2268

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

P.L. 103-325
Sec. 552

gram, any other accomplishments or shortcomings of the program, and any
recommendations of the Director for legislation regarding the program.”.
SEC. 542. FUNDING.
Section 1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C.
4017(a)) is amended-­
(1) in paragraph (4), by striking “and” at the end;
(2) in paragraph (5), by striking the period at the end and inserting a
semicolon; and
(3) by adding after paragraph (5) the following new paragraph:
“(6) for carrying out the program under section 1315(b);”.

Subtitle D--Mitigation of Flood Risks
SEC. 551. REPEAL OF FLOODED PROPERTY PURCHASE AND LOAN
PROGRAM.
(a) REPEAL.-- Section 1362 of the National Flood Insurance Act of 1968 (42
U.S.C. 4103) is hereby repealed.
(b) TRANSITION PHASE.-- Notwithstanding subsection (a), during the 1-year
period beginning on the date of enactment of this Act, the Director of the Federal
Emergency Management Agency may enter into loan and purchase commitments as
provided under section 1362 of the National Flood Insurance Act of 1968 (as in
effect immediately before the enactment of this Act).
(c) SAVINGS PROVISION.-- Notwithstanding subsection (a), the Director shall 42 USC 4103
take any action necessary to comply with any purchase or loan commitment entered note.
into before the expiration of the period referred to in subsection (b) pursuant to
authority under section 1362 of the National Flood Insurance Act of 1968 or
subsection (b).
SEC. 552. TERMINATION OF EROSION-THREATENED STRUCTURES
PROGRAM.
(a) IN GENERAL.-- Section 1306 of the National Flood Insurance Act of 1968
(42 U.S.C. 4013) is amended by striking subsection (c).
(b) TRANSITION PHASE.-- Notwithstanding subsection (a), during the 1-year
period beginning on the date of enactment of this Act, the Director of the Federal
Emergency Management Agency may pay amounts under flood insurance contracts
for demolition or relocation of structures as provided in section 1306(c) of the
National Flood Insurance Act of 1968 (as in effect immediately before the
enactment of this Act).
(c) SAVINGS PROVISION.-- Notwithstanding subsection (a), the Director shall
take any action necessary to make payments under flood insurance contracts
pursuant to any commitments made before the expiration of the period referred to
in subsection (b) pursuant to the authority under section 1306(c) of the National
Flood Insurance Act of 1968 or subsection (b).
(d) REPEAL OF FINDINGS PROVISION.-- Section 1302 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4001) is amended by striking subsection (g).

108 STAT. 2269

42 USC 4103
note.

42 USC 4103
note.

P.L. 103-325
Sec. 553

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

SEC. 553. MITIGATION ASSISTANCE PROGRAM.
(a) IN GENERAL.-- Chapter III of the National Flood Insurance Act of 1968
(42 U.S.C. 4101 et seq.), as amended by the preceding provisions of this title, is
further amended by adding at the end the following new section:
“MITIGATION ASSISTANCE
42 USC 4104c.

“SEC. 1366. (a) AUTHORITY.-- The Director shall carry out a program to
provide financial assistance to States and communities, using amounts made
available from the National Flood Mitigation Fund under section 1367, for
planning and carrying out activities designed to reduce the risk of flood damage
to structures covered under contracts for flood insurance under this title. Such
financial assistance shall be made available to States and communities in the form
of grants under subsection (b) for planning assistance and in the form of grants
under this section for carrying out mitigation activities.
“(b) PLANNING ASSISTANCE GRANTS.-­
“(1) IN GENERAL.-- The Director may make grants under this
subsection to States and communities to assist in developing mitigation
plans under subsection (c).
“(2) FUNDING.-- Of any amounts made available from the National
Flood Mitigation Fund for use under this section in any fiscal year, the
Director may use not more than $1,500,000 to provide planning assistance
grants under this subsection.
“(3) LIMITATIONS.-­
“(A) TIMING.-- A grant under this subsection may be
awarded to a State or community not more than once every 5
years and each grant may cover a period of 1 to 3 years.
“(B) SINGLE GRANTEE AMOUNT.-- A grant for planning
assistance may not exceed-­
“(i) $150,000, to any State; or
“(ii) $50,000, to any community.
“(C) CUMULATIVE STATE GRANT AMOUNT.-- The sum of
the amounts of grants made under this subsection in any fiscal
year to any one State and all communities located in such State
may not exceed $300,000.
“(c) ELIGIBILITY FOR MITIGATION ASSISTANCE.-- To be eligible to receive
financial assistance under this section for mitigation activities, a State or
community shall develop, and have approved by the Director, a flood risk
mitigation plan (in this section referred to as a ‘mitigation plan’), that describes
the mitigation activities to be carried out with assistance provided under this
section, is consistent with the criteria established by the Director under section
1361, and provides protection against flood losses to structures for which
contracts for flood insurance are available under this title. The mitigation plan
shall be consistent with a comprehensive strategy for mitigation activities for the
area affected by the mitigation plan, that has been adopted by the State or
community following a public hearing.
“(d) NOTIFICATION OF APPROVAL AND GRANT AWARD.-­
“(1) IN GENERAL.-- The Director shall notify a State or community
submitting a mitigation plan of the approval or [2271] disapproval of the

108 STAT. 2270

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RIEGLE COMMUNITY DEVELOPMENT ACT

plan not later than 120 days after submission of the plan.
“(2) NOTIFICATION OF DISAPPROVAL.-- If the Director does not approve a
mitigation plan submitted under this subsection, the Director shall notify, in writing,
the State or community submitting the plan of the reasons for such disapproval.
“(e) ELIGIBLE MITIGATION ACTIVITIES.-­
“(1) USE OF AMOUNTS.-- Amounts provided under this section (other than
under subsection (b)) may be used only for mitigation activities specified in a
mitigation plan approved by the Director under subsection (d). The Director shall
provide assistance under this section to the extent amounts are available in the
National Flood Mitigation Fund pursuant to appropriation Acts, subject only to the
absence of approvable mitigation plans.
“(2) DETERMINATION OF ELIGIBLE PLANS.-- The Director may approve only
mitigation plans that specify mitigation activities that the Director determines are
technically feasible and cost-effective and only such plans that propose activities
that are cost-beneficial to the National Flood Mitigation Fund.
“(3) STANDARD FOR APPROVAL.-- The Director shall approve mitigation
plans meeting the requirements for approval under paragraph (1) that will be most
cost-beneficial to the National Flood Mitigation Fund.
“(4) PRIORITY.-- The Director shall make every effort to provide mitigation
assistance under this section for mitigation plans proposing activities for repetitive
loss structures and structures that have incurred substantial damage.
“(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) demolition or relocation of any structure located on land that is
along the shore of a lake or other body of water and is certified by an
appropriate State or local land use authority to be subject to imminent
collapse or subsidence as a result of erosion or flooding;
“(B) elevation, relocation, demolition, or floodproofing of structures
(including public structures) located in areas having special flood hazards or
other areas of flood risk;
“(C) acquisition by States and communities of properties (including
public properties) located in areas having special flood hazards or other areas
of flood risk and properties substantially damaged by flood, for public use, as
the Director determines is consistent with sound land management and use in
such area;
“(D) minor physical mitigation efforts that do not duplicate the flood
prevention activities of other Federal agencies and that lessen the frequency
or severity of flooding and decrease predicted flood damages, which shall not
include major flood control projects such as dikes, levees, seawalls, groins,
and jetties unless the Director specifically determines in approving a
mitigation plan that such activities are the most cost-effective mitigation
activities for the National Flood Mitigation Fund;
“(E) beach nourishment activities;

108 STAT. 2271

P.L. 103-325
Sec. 553

P.L. 103-325
Sec. 553

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“(F) the provision of technical assistance by States to
communities and individuals to conduct eligible mitigation activities;
“(G) other activities that the Director considers appropriate and
specifies in regulation; and
“(H) other mitigation activities not described in subparagraphs
(A) through (F) or the regulations issued under subparagraph (G),
that are described in the mitigation plan of a State or community.
“(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) MATCHING REQUIREMENT.-­
“(1) IN GENERAL.-- The Director may not provide mitigation
assistance under this section to a State or community in an amount
exceeding 3 times the amount that the State or community certifies, as the
Director shall require, that the State or community will contribute from
non-Federal funds to develop a mitigation plan under subsection (c) and to
carry out mitigation activities under the approved mitigation plan. In no
case shall any in-kind contribution by any State or community exceed onehalf of the amount of non-Federal funds contributed by the State or
community.
“(2) NON-FEDERAL FUNDS.-- For purposes of this subsection, the
term ‘non-Federal funds’ includes State or local agency funds, in-kind
contributions, any salary paid to staff to carry out the mitigation activities
of the recipient, the value of the time and services contributed by
volunteers to carry out such activities (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.
“(h) 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) are used in accordance with such certification.
“(i) RECAPTURE.-­
“(1) NONCOMPLIANCE WITH PLAN.-- If the Director determines that a
State or community that has received mitigation assistance under this
section has not carried out the mitigation activities as set forth in the
mitigation plan, the Director shall recapture [2273] any unexpended

108 STAT. 2272

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

P.L. 103-325
Sec. 554

amounts and deposit the amounts in the National Flood Mitigation Fund
under section 1367
“(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), 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) 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) DEFINITION OF COMMUNITY.-- For purposes of this section, the term
‘community’ means-­
“(1) a political subdivision that (A) has zoning and building code
jurisdiction over a particular area having special flood hazards, and (B) is
participating in the national flood insurance program; or
“(2) a political subdivision of a State, or other authority, that is
designated to develop and administer a mitigation plan by political
subdivisions, all of which meet the requirements of paragraph (1).”.
(b) REGULATIONS.-- Not later than 6 months after the date of enactment of 42 USC 4104c
this Act, the Director of the Federal Emergency Management Agency shall issue note.
regulations to carry out section 1366 of the National Flood Insurance Act of 1968,
as added by subsection (a).
SEC. 554. ESTABLISHMENT OF NATIONAL FLOOD MITIGATION
FUND.
(a) IN GENERAL.-- Chapter III of the National Flood Insurance Act of 1968
(42 U.S.C. 4101 et seq.), as amended by the preceding provisions of this title, is
further amended by adding at the end the following new section:
“NATIONAL FLOOD MITIGATION FUND
42 USC 4104d

“SEC. 1367. (a) ESTABLISHMENT AND AVAILABILITY.-- The Director shall note.
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.
“(b) CREDITS.-- The National Flood Mitigation Fund shall be credited with­
“(1) amounts from the National Flood Insurance Fund, in amounts not
exceeding-­
“(A) $10,000,000 in the fiscal year ending September 30, 1994;
“(B) $15,000,000 in the fiscal year ending September 30, 1995;
“(C) $20,000,000 in the fiscal year ending September 30, 1996;
and
“(D) $20,000,000 in each fiscal year thereafter;
“(2) any penalties collected under section 102(f) of the Flood Disaster
Protection Act of 1973; and

108 STAT. 2273

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Sec. 554

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“(3) any amounts recaptured under section 1366(i).
“(c) INVESTMENT.-- If the Director determines that the amounts in the
National Flood Mitigation Fund are in excess of amounts needed under subsection
(a), the Director may invest any excess amounts the Director determines advisable
in interest-bearing obligations issued or guaranteed by the United States.
“(d) REPORT.-- The Director shall submit a report to the Congress not later
than the expiration of the 1-year period beginning on the date of enactment of this
Act and not less than once during each successive 2-year period thereafter. The
report shall describe the status of the Fund and any activities carried out with
amounts from the Fund.”.
(b) NATIONAL FLOOD INSURANCE FUND AS SEPARATE ACCOUNT.-- Section
1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is
amended-­
(1) in the matter preceding paragraph (1)-(A) by striking “is authorized to” and inserting “shall”; and
(B) by inserting after “which shall be” the following: “an account
separate from any other accounts or funds available to the Director and
shall be”; and
(2) by adding after paragraph (6) (as added by the preceding provisions
of this title) the following new paragraph:
“(7) for transfers to the National Flood Mitigation Fund, but only to the
extent provided in section 1367(b)(1); and”.

42 USC 4011
note.

SEC. 555. ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND
USE AND CONTROL MEASURES.
(a) IN GENERAL.-- Section 1304 of the National Flood Insurance Act of 1968
(42 U.S.C. 4011) is amended-­
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new subsection:
“(b) ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE AND
CONTROL MEASURES.-- The national flood insurance program established pursuant
to subsection (a) shall enable the purchase of insurance to cover the cost of
compliance with land use and control measures established under section 1361 for­
“(1) properties that are repetitive loss structures;
“(2) properties that have flood damage in which the cost of repairs
equals or exceeds 50 percent of the value of the structure at the time of the
flood event; and
“(3) properties that have sustained flood damage on multiple occasions,
if the Director determines that it is cost-effective and in the best interests of
the National Flood Insurance Fund to require compliance with the land use
and control measures.
The Director shall impose a surcharge on each insured of not more than $75 per
policy to provide cost of compliance coverage in accordance with the provisions
of this subsection.”.
(b) APPLICABILITY.-- The provisions of subsection (a) shall apply only to
properties that sustain flood-related damage after the date of enactment of this
Act.

108 STAT. 2274

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P.L. 103-325
Sec. 561

Subtitle E--Task Forces
42 USC 4011
SEC. 561. FLOOD INSURANCE INTERAGENCY TASK FORCE.
(a) ESTABLISHMENT.-- There is hereby established an interagency task force note.
to be known as the Flood Insurance Task Force (in this section referred to as the
“Task Force”).
(b) MEMBERSHIP.-­
(1) IN GENERAL.-- The Task Force shall be composed of 10 members,
who shall be the designees of-­
(A) the Federal Insurance Administrator;
(B) the Federal Housing Commissioner;
(C) the Secretary of Veterans Affairs;
(D) the Administrator of the Farmers Home Administration;
(E) the Administrator of the Small Business Administration;
(F) the Chairman of the Board of Directors of the Farm Credit
Administration;
(G) a designee of the Financial Institutions Examination Council;
(H) the Director of the Office of Federal Housing Enterprise
Oversight;
(I) the chairman of the Board of Directors of the Federal Home
Loan Mortgage Corporation; and
(J) the chairman of the Board of Directors of the Federal National
Mortgage Association.
(2) QUALIFICATIONS.-- Members of the Task Force shall be designated
for membership on the Task Force by reason of demonstrated knowledge and
competence regarding the national flood insurance program.
(c) DUTIES.-- The Task Force shall carry out the following duties:
(1) RECOMMENDATIONS OF STANDARDIZED ENFORCEMENT PRO­
CEDURES.-- Make recommendations to the head of each Federal agency and
enterprise referred to under subsection (b)(1) regarding establishment or
adoption of standardized enforcement procedures among such agencies and
corporations responsible for enforcing compliance with the requirements
under the national flood insurance program to ensure fullest possible
compliance with such requirements.
(2) STUDY OF COMPLIANCE ASSISTANCE.-- Conduct a study of the
extent to which Federal agencies and the secondary mortgage market can
provide assistance in ensuring compliance with the requirements under the
national flood insurance program and submit to the Congress a report
describing the study and any conclusions.
(3) STUDY OF COMPLIANCE MODEL.-- Conduct a study of the extent to
which existing programs of Federal agencies and corporations for compliance
with the requirements under the national flood insurance program can serve as
a model for other Federal agencies responsible for enforcing compliance, and
submit to the Congress a report describing the study and any conclusions.
(4) RECOMMENDATIONS FOR ENFORCEMENT AND COMPLIANCE
PROCEDURES.-- Develop recommendations regarding enforcement [2276] and

108 STAT. 2275

P.L. 103-325
Sec. 561

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

compliance procedures, based on the studies and findings of the Task
Force, and publish such recommendations
(5) STUDY OF DETERMINATION FEES.-- Conduct a study of-­
(A) the reasonableness of fees charged pursuant to 102(h) of
the Flood Disaster Protection Act of 1973 for costs of determining
whether the property securing a loan is located in an area having
special flood hazards; and
(B) whether the fees charged pursuant to such section by
lenders and servicers are greater than the amounts paid by such
lenders and servicers to persons actually conducting such
determinations and the extent to which the fees exceed such amounts.
(d) NONCOMPENSATION.-- Members of the Task Force shall receive no
additional pay by reason of their service on the Task Force.
(e) CHAIRPERSON.-- The members of the Task Force shall elect one
member as chairperson of the Task Force.
(f) MEETINGS AND ACTION.-- The Task Force shall meet at the call of the
chairman or a majority of the members of the Task Force and may take action by
a vote of the majority of the members. The Federal Insurance Administrator shall
coordinate and call the initial meeting of the Task Force.
(g) OFFICERS.-- The chairperson of the Task Force may appoint any
officers to carry out the duties of the Task Force under subsection (c).
(h) STAFF OF FEDERAL AGENCIES.-- Upon request of the chairperson of the
Task Force, the head of any of the Federal agencies and entities referred to
under subsection (b)(1) may detail, on a nonreimbursable basis, any of the
personnel of such agency to the Task Force to assist the Task Force in carrying
out its duties under this section.
(i) POWERS.-- In carrying out this section, the Task Force may hold
hearings, sit and act at times and places, take testimony, receive evidence and
assistance, provide information, and conduct research as the Task Force
considers appropriate.
(j) TERMINATION.-- The Task Force shall terminate upon the expiration of
the 24-month period beginning upon the designation of the last member to be
designated under subsection (b)(1).
42 USC 4102
note.

SEC. 562. TASK FORCE ON NATURAL AND BENEFICIAL
FUNCTIONS OF THE FLOODPLAIN.
(a) ESTABLISHMENT.-- There is hereby established an interagency task
force to be known as the Task Force on Natural and Beneficial Functions of the
Floodplain (in this section referred to as the “Task Force”).
(b) MEMBERSHIP.-- The Task Force shall be composed of 5 members, who
shall be the designees of-­
(1) the Under Secretary of Commerce for Oceans and Atmosphere;
(2) the Director of the United States Fish and Wildlife Service;
(3) the Administrator of the Environmental Protection Agency;
(4) the Secretary of the Army, acting through the Chief of Engineers;
and
(5) the Director of the Federal Emergency Management Agency.

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Sec. 572

(c) DUTIES.-- The Task Force shall-­
(1) conduct a study to-­
(A) identify the natural and beneficial functions of the floodplain
that reduce flood-related losses; and
(B) develop recommendations on how to reduce flood losses by
protecting the natural and beneficial functions of the floodplain; and
(2) make the information and recommendations under subparagraphs
(A) and (B) publicly available.
(d) NONCOMPENSATION.-- Members of the Task Force shall receive no
additional pay by reason of their service on the Task Force.
(e) CHAIRPERSON.-- The members of the Task Force shall elect one member
as chairperson of the Task Force.
(f) MEETINGS AND ACTION.-- The Task Force shall meet at the call of the
chairperson or a majority of the members of the Task Force and may take action by
a vote of the majority of the members. The Federal Insurance Administrator shall
coordinate and call the initial meeting of the Task Force.
(g) OFFICERS.-- The chairperson of the Task Force may appoint any officers
to carry out the duties of the Task Force under subsection (c).
(h) STAFF OF FEDERAL AGENCIES.-- Upon request of the chairperson of the
Task Force, the head of any of the Federal agencies and entities referred to under
subsection (b) may detail, on a nonreimbursable basis, any of the personnel of such
agency to the Task Force to assist the Task Force in carrying out its duties under
this section.
(i) POWERS.-- In carrying out this section, the Task Force may hold hearings,
sit and act at times and places, take testimony, receive evidence and assistance,
provide information, and conduct research as the Task Force considers appropriate.
(j) TERMINATION.-- The Task Force shall terminate upon the expiration of the
24-month period beginning upon the designation of the last member to be
designated under subsection (b).

Subtitle F--Miscellaneous Provisions
SEC. 571. EXTENSION OF FLOOD INSURANCE PROGRAM.
(a) IN GENERAL.-- Section 1319 of the National Flood Insurance Act of 1968
(42 U.S.C. 4026) is amended by striking “September 30, 1995” and inserting
“September 30, 1996”.
(b) EMERGENCY IMPLEMENTATION.-- Section 1336(a) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4056(a)) is amended by striking “September 30,
1995” and inserting “September 30, 1996”.
SEC. 572. LIMITATION ON PREMIUM INCREASES.
(a) PROPERTY-SPECIFIC LIMITATION.-- Section 1308 of the National Flood 42 USC 4015.

Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended-­
(1) in subsection (c), by striking “Notwithstanding any other provision
of this title” and inserting “Subject only to the limitation under subsection
(e)”; and
(2) by inserting after subsection (d) the following new subsection:

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Sec. 572

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“(e) ANNUAL LIMITATION ON PREMIUM INCREASES.-- 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 of the average of the risk premium rates for properties within the risk
classification upon the commencement of such 12-month period.”.
(b) REPEAL OF PROGRAM-WIDE LIMITATION.-- Subsection (d) of section 541
of the Housing and Community Development Act of 1987 (42 U.S.C. 4015 note)
is hereby repealed.
SEC. 573. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.
(a) IN GENERAL.-- Section 1306(b) of the National Flood Insurance Act of
1968 (42 U.S.C. 4013(b)) is amended as follows:
(1) RESIDENTIAL PROPERTY.-- In paragraph (2), by striking “an amount
of $150,000 under the provisions of this clause” and inserting the following:
“a total amount (including such limits specified in paragraph (1)(A)(i)) of
$250,000”.
(2) RESIDENTIAL PROPERTY CONTENTS.-- In paragraph (3), by striking
“an amount of $50,000 under the provisions of this clause” and inserting the
following: “a total amount (including such limits specified in paragraph
(1)(A)(ii)) of $100,000”.
(3) NONRESIDENTIAL PROPERTY AND CONTENTS.-- By striking
paragraph (4) and inserting the following new paragraph:
“(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 for each structure and $500,000 for any contents related to each
structure; and”.
(b) REMOVAL OF CEILING ON COVERAGE REQUIRED.-- Section 1306(b) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended-­
(1) in paragraph (5), by striking “; and” at the end and inserting a
period; and
(2) by striking paragraph (6).
SEC. 574. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH
PRIVATE INSURANCE ENTITIES.
Section 1345(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4081(b)) is amended by striking the period at the end and inserting the following:
“and without regard to the provisions of the Federal Advisory Committee Act (5
U.S.C. App.).”.
SEC. 575. UPDATING OF FLOOD MAPS.
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 subsections:
“(e) REVIEW OF FLOOD MAPS.-- Once during each 5-year period (the1st such

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RIEGLE COMMUNITY DEVELOPMENT ACT

period beginning on the date of enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994) or more often as the Director
determines necessary, the Director [2279] shall assess the need to revise and update
all floodplain areas and flood risk zones identified, delineated, or established under
this section, based on an analysis of all natural hazards affecting flood risks.
“(F) UPDATING FLOOD MAPS.-- The Director shall revise and update any
floodplain areas and flood-risk zones-­
“(1) upon the determination of the Director, according to the
assessment under subsection (e), that revision and updating are necessary for
the areas and zones; or
“(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.
“(g) AVAILABILITY OF FLOOD MAPS.-- To promote compliance with the
requirements of this title, the Director shall make flood insurance rate maps and
related information available free of charge to the Federal entities for lending
regulation, Federal agency lenders, State agencies directly responsible for
coordinating the national flood insurance program, and appropriate representatives
of communities participating in the national flood insurance program, and at a
reasonable cost to all other persons. Any receipts resulting from this subsection
shall be deposited in the National Flood Insurance Fund, pursuant to section
1310(b)(6).
“(h) NOTIFICATION OF FLOOD MAP CHANGES.-- The Director shall cause
notice to be published in the Federal Register (or shall provide notice by another
comparable method) of any change to flood insurance map panels and any change
to flood insurance map panels issued in the form of a letter of map amendment or a
letter of map revision. Such notice shall be published or otherwise provided not
later than 30 days after the map change or revision becomes effective. Notice by
any method other than publication in the Federal Register shall include all pertinent
information, provide for regular and frequent distribution, and be at least as
accessible to map users as notice in the Federal Register. All notices under this
subsection shall include information on how to obtain copies of the changes or
revisions.
“(i) COMPENDIA OF FLOOD MAP CHANGES.-- Every 6 months, the Director
shall publish separately in their entirety within a compendium, all changes and
revisions to flood insurance map panels and all letters of map amendment and
letters of map revision for which notice was published in the Federal Register or
otherwise provided during the preceding 6 months. The Director shall make such
compendia available, free of charge, to Federal entities for lending regulation,
Federal agency lenders, and States and communities participating in the national
flood insurance program pursuant to section 1310 and at cost to all other parties.
Any receipts resulting from this subsection shall be deposited in the National Flood
Insurance Fund, pursuant to section 1310(b)(6).
“(j) PROVISION OF INFORMATION.-- In the implementation of revisions to and
updates of flood insurance rate maps, the Director shall share information, to the
extent appropriate, with the Under Secretary of Commerce for Oceans and
Atmosphere and representatives from State coastal zone management programs.”.

108 STAT. 2279

P.L. 103-325
Sec. 575

Federal
Register,
publication.

Public
information.

P.L. 103-325
Sec. 576
42 USC 4101
note.

Reports.

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

SEC. 576. TECHNICAL MAPPING ADVISORY COUNCIL.
(a) ESTABLISHMENT.-- There is established a council to be known as the
Technical Mapping Advisory Council (in this section referred to as the
“Council”).
(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 additional members to be
appointed by the Director or the designee of the Director, who shall be-­
(A) the Under Secretary of Commerce for Oceans and
Atmosphere (or his or her designee);
(B) a member of recognized surveying and mapping
professional associations and organizations;
(C) a member of recognized professional engineering
associations and organizations;
(D) a member of recognized professional associations or
organizations representing flood hazard determination firms;
(E) a representative of the United States Geologic Survey;
(F) a representative of State geologic survey programs;
(G) a representative of State national flood insurance
coordination offices;
(H) a representative of a regulated lending institution;
(I) a representative of the Federal Home Loan Mortgage
Corporation; and
(J) a representative of the Federal National Mortgage
Association.
(2) QUALIFICATIONS.-- Members of the Council shall be appointed
based on their demonstrated knowledge and competence regarding
surveying, cartography, remote sensing, geographic information systems,
or the technical aspects of preparing and using flood insurance rate maps.
(c) DUTIES.-- The Council shall-­
(1) 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.
(d) CHAIRPERSON.-- The members of the Council shall elect 1 member to
serve as the chairperson of the Council (in this section referred to as the
“Chairperson”).
(e) COORDINATION.-- To ensure that the Council’s recommendations are
consistent to the maximum extent practicable with national digital spatial data
collection and management standards, the Chairperson shall consult with the

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P.L. 103-325
Sec. 577

Chairperson of the Federal [2281] Geographic Data Committee (established
pursuant to OMB Circular A-16).
(f) COMPENSATION.-- Members of the Council shall receive no additional
compensation by reason of their service on the Council.
(g) MEETINGS AND ACTIONS.-­
(1) IN GENERAL.-- The Council shall meet not less than twice each year
at the request of the Chairperson or a majority of its members and may take
action by a vote of the majority of the members.
(2) INITIAL MEETING.-- The Director, or a person designated by the
Director, shall request and coordinate the initial meeting of the Council.
(h) OFFICERS.-- The Chairperson may appoint officers to assist in carrying
out the duties of the Council under subsection (c).
(i) STAFF OF FEMA.-- Upon the request of the Chairperson, the Director may
detail, on a nonreimbursable basis, personnel of the Federal Emergency
Management Agency to assist the Council in carrying out its duties.
(j) POWERS.-- In carrying out this section, the Council may hold hearings,
receive evidence and assistance, provide information, and conduct research as it
considers appropriate.
(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).
42 USC 4001
SEC. 577. EVALUATION OF EROSION HAZARDS.
(a) REPORT REQUIREMENT.-- The Director of the Federal Emergency note.
Management Agency (in this section referred to as the “Director”) shall submit a
report under this section to the Congress that-­
(1) lists all communities that are likely to be identified as having erosion
hazard areas;
(2) estimates the amount of flood insurance claims under the national
flood insurance program that are attributable to erosion;
(3) states the amount of flood insurance claims under such program that
are attributable to claims under section 1306(c) of the National Flood
Insurance Act of 1968;
(4) assesses the full economic impact of erosion on the National Flood
Insurance Fund; and
(5) determines the costs and benefits of expenditures necessary from the
National Flood Insurance Fund to complete mapping of erosion hazard areas.
(b) ESTIMATE OF FLOOD CLAIMS.-- In developing the estimate under
subsection (a)(2)-(1) the Director may map a statistically valid and representative number
of communities with erosion hazard areas throughout the United States,
including coastal, Great Lakes, and, if technologically feasible, riverine areas;
and
(2) the Director shall take into consideration the efforts of State and
local governments to assess, measure, and reduce erosion hazards.
(c) ECONOMIC IMPACT.-­
(1) IN GENERAL.-- The assessment under subsection (a)(4) shall assess
the economic impact of-­
(A) erosion on communities listed pursuant to subsection (a)(1);

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Sec. 577

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

(B) the denial of flood insurance for all structures in
communities listed pursuant to subsection (a)(1);
(C) the denial of flood insurance for structures that are newly
constructed in whole in communities listed pursuant to subsection
(a)(1);
(D) the establishment of (i) actuarial rates for existing structures
in communities listed pursuant to subsection (a)(1), and (ii) actuarial
rates for such structures in connection with the denial of flood
insurance as described in subparagraph (C);
(E) the establishment of actuarial rates for structures newly
constructed in whole in erosion hazard areas in communities listed
pursuant to subsection (a)(1);
(F) the denial of flood insurance pursuant to existing
requirements for coverage under the national flood insurance
program;
(G) erosion hazard assessment, measurement, and management
activities undertaken by State and local governments, including
building restrictions, beach nourishment, construction of sea walls
and levees, and other activities that reduce the risk of damage due to
erosion; and
(H) the mapping and identifying of communities (or
subdivisions thereof) having erosion hazard areas.
(2) SCOPE.-- In assessing the economic impact of the activities under
subparagraphs (A) through (H) of paragraph (1), the assessment under
subsection (a)(4) shall address such impact on all significant economic
factors, including the impact on-­
(A) the value of residential and commercial properties in
communities with erosion hazards;
(B) community tax revenues due to potential changes in
property values or commercial activity;
(C) employment, including the potential loss or gain of existing
and new jobs in the community;
(D) existing businesses and future economic development;
(E) the estimated cost of Federal and State disaster assistance
to flood victims; and
(F) the mapping and identifying of communities (or subdivisions
thereof) having erosion hazard areas.
(3) PREPARATION.-- The assessment required under subsection (a)(4)
shall be conducted by a private independent entity selected by the Director.
The private entity shall consult with a statistically valid and representative
number of communities listed pursuant to subsection (a)(1) in conducting
the assessment.
(d) COSTS AND BENEFITS OF MAPPING.-- The determination under
subsection (a)(5) shall-­
(1) determine the costs and benefits of mapping erosion hazard areas,
based upon the Director’s estimate of the actual and prospective amount of
flood insurance claims attributable to erosion;
(2) if the Director determines that the savings to the National Flood
Insurance Fund will exceed the cost of mapping erosion hazard areas,
further assess whether using flood insurance premiums for costs of

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P.L. 103-325
Sec. 577

mapping erosion hazard areas is [2283] cost-beneficial compared to altern­
ative uses of such amounts, including-­
(A) funding the mitigation assistance program under section 1366
of the National Flood Insurance Act of 1968 (as added by section 553
of this Act);
(B) funding the program under section 1304(b) of the National
Flood Insurance Act of 1968 (as added by section 555(a) of this Act)
that provides additional coverage under the national flood insurance
program for compliance with land use and control measures; and
(C) reviewing, revising, and updating flood insurance rate maps
under subsections (e) and (f) of section 1360 of the National Flood
Insurance Act of 1968 (as added by the amendment made by section
575 of this Act);
(3) if the Director determines under subsection (b)(1) that mapping of
riverine areas for erosion hazard areas is technologically feasible, determine
the costs and benefits of conducting the mapping of erosion hazards in
riverine areas (A) separately from the mapping of other erosion hazard areas,
and (B) together with the mapping of other such areas;
(4) if the Director determines that the savings to the National Flood
Insurance Fund will exceed the cost of mapping erosion hazard areas in
riverine areas, assess whether using flood insurance premiums for costs of
mapping erosion hazard areas in riverine areas is cost-beneficial compared to
alternative uses of such amounts, including the uses under subparagraphs (A)
through (C) of paragraph (2); and
(5) determine the costs and benefits of mapping erosion, other than
those directly related to the financial condition of the National Flood
Insurance Program, and the costs of not mapping erosion.
(e) DEFINITION.-- For purposes of this section, the term “erosion hazard area”
means, based on erosion rate information and other historical data available, an area
where erosion or avulsion is likely to result in damage to or loss of buildings and
infrastructure within a 60-year period.
(f) CONSULTATION.-- In preparing the report under this section, the Director
shall consult with-­
(1) representatives from State coastal zone management programs
approved under section 306 of the Coastal Zone Management Act of 1972;
(2) the Administrator of the National Oceanic and Atmospheric
Administration; and
(3) any other persons, officials, or entities that the Director considers
appropriate.
(g) SUBMISSION.-- The Director shall submit the report to the Congress as Reports.
soon as practicable, but not later than 2 years after the date of enactment of this
Act.
(h) AVAILABILITY OF NATIONAL FLOOD INSURANCE FUND.-- Section 1310(a)
of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended-­
(1) in the matter preceding paragraph (1), by inserting “(except as
otherwise provided in this section)” after “without fiscal year limitation”;
and
(2) by inserting after paragraph (7) (as added by the preceding
provisions of this title) the following new paragraph:

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Sec. 577

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

“(8) for costs of preparing the report under section 577 of the Riegle
Community Development and Regulatory Improvement Act of 1994, except that
the fund shall be available for the purpose under this paragraph in an amount not
to exceed an aggregate of $5,000,000 over the 2-year period beginning on the date
of enactment of the Riegle Community Development and Regulatory Improvement
Act of 1994.”.
42 USC 4014
note.

SEC.

578. 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 pre-FIRM
structures 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 and homeowners.
(b) DEFINITION OF PRE-FIRM STRUCTURE.-- For purposes of subsection (a),
the term “pre-FIRM structure” means a structure that was not constructed or
substantially improved after the later of-­
(1) December 31, 1974; or
(2) the effective date of the initial rate map published by the Director
under section 1360(a)(2) of the National Flood Insurance Act of 1968 for the
area in which such structure is located.
(c) 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 enactment of this Act.
SEC. 579. EFFECTIVE DATES OF POLICIES.
(a) 30-DAY DELAY.-- Section 1306 of the National Flood Insurance Act of
1968 (42 U.S.C. 4013), as amended by the preceding provisions of this title, is
further amended by adding at the end the following new subsection:
“(c) EFFECTIVE DATE OF POLICIES­
“(1) WAITING PERIOD.-- Except as provided in paragraph (2), coverage
under a new contract for flood insurance coverage under this title entered
into after the date of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994, and any modification to coverage
under an existing flood insurance contract made after such date, shall become
effective upon the expiration of the 30-day period [2285] beginning

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P.L. 103-325
Sec. 580

on the date that all obligations for such coverage (including completion of
the application and payment of any initial premiums owed) are satisfactorily
completed.
“(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
“(B) the initial purchase of flood insurance coverage pursuant to a
revision or updating of floodplain areas or flood-risk zones under
section 1360(f), if such purchase occurs during the 1-year period
beginning upon publication of notice of the revision or updating under
section 1360(h).”. .
(b) STUDY.-- The Director of the Federal Emergency Management Agency
shall conduct a study to determine the appropriateness of existing requirements
regarding the effective date and time of coverage under flood insurance contracts
obtained through the national flood insurance program. In conducting the study, Reports.
the Director shall determine whether any delay between the time of purchase of
flood insurance coverage and the time of initial effectiveness of the coverage
should differ for various classes of properties (based upon the type of property,
location of the property, or any other factors related to the property) or for
various circumstances under which such insurance was purchased. Not later than
the expiration of the 6-month period beginning on the date of enactment of this
Act, the Director shall submit to the Congress a report on the results of the study.
SEC. 580. AGRICULTURAL STRUCTURES.
Section 1315(a) of the National Flood Insurance Act of 1968 (42 U.S.C.
4022(a)), as amended by the preceding provisions of this title, is further amended
by adding at the end the following new paragraph:
“(2) AGRICULTURAL STRUCTURES.-­
“(A) ACTIVITY RESTRICTIONS.-- Notwithstanding any other
provision of law, the adequate land use and control measures required
to be adopted in an area (or subdivision thereof) pursuant to paragraph
(1) may provide, at the discretion of the appropriate State or local
authority, for the repair and restoration to predamaged conditions of an
agricultural structure that-­
“(i) is a repetitive loss structure; or
“(ii) has incurred flood-related damage to the extent that the
cost of restoring the structure to its predamaged condition would
equal or exceed 50 percent of the market value of the structure
before the damage occurred.
“(B) PREMIUM RATES AND COVERAGE.-- To the extent
applicable, an agricultural structure repaired or restored pursuant to
subparagraph (A) shall pay chargeable premium rates established under
section 1308 at the estimated risk premium rates under section
1307(a)(1). If resources are available, the Director shall provide
technical assistance and counseling, upon request of the owner of the
structure, regarding wet flood-proofing and other flood damage
reduction measures for agricultural structures. The [2286] Director

108 STAT. 2285

P.L. 103-325
Sec. 580

Reports.

42 USC 5154a.

LAWS OF 103rd CONG - 2nd SESS.

Sept. 23

shall not be required to make flood insurance coverage available for such
an agricultural structure unless the structure is wet flood-proofed through
permanent or contingent measures applied to the structure or itscontents
that prevent or provide resistance to damage from flooding by allowing
flood waters to pass through the structure, as determined by the Director.
“(C) PROHIBITION ON DISASTER RELIEF.-- Notwithstanding any other
provision of law, any agricultural structure repaired or restored pursuant to
subparagraph (A) shall not be eligible for disaster relief assistance under
any program administered by the Director or any other Federal agency.
“(D) DEFINITIONS.-- For purposes of this paragraph-­
“(i) the term ‘agricultural structure’ means any structure used
exclusively in connection with the production, harvesting, storage,
raising, or drying of agricultural commodities; and
“(ii) the term ‘agricultural commodities’ means agricultural
commodities and livestock.”.
SEC. 581. IMPLEMENTATION REVIEW BY DIRECTOR.
Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C.
4027) is amended-­
(1) by striking “The Director” and inserting “(a) IN GENERAL.-- The
Director”; and
(2) by adding at the end the following new subsection:
“(b) EFFECTS OF FLOOD INSURANCE PROGRAM.-- The Director shall
include, as part of the biennial 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.”.
SEC. 582. PROHIBITED FLOOD DISASTER ASSISTANCE.
(a) GENERAL PROHIBITION.-- Notwithstanding any other provision of law,
no Federal disaster relief assistance made available in a flood disaster area may
be used to make a payment (including any loan assistance payment) to a person
for repair, replacement, or restoration for damage to any personal, residential, or
commercial property if that person at any time has received flood disaster
assistance that was conditional on the person first having obtained flood
insurance under applicable Federal law and subsequently having failed to obtain
and maintain flood insurance as required under applicable Federal law on such
property.
(b) TRANSFER OF PROPERTY.-­
(1) DUTY TO NOTIFY.-- In the event of the transfer of any property
described in paragraph (3), the transferor shall, not later than the date on
which such transfer occurs, notify the transferee in writing of the
requirements to-­
(A) obtain flood insurance in accordance with applicable Federal
law with respect to such property, if the property is not so insured as
of the date on which the property is transferred; and
(B) maintain flood insurance in accordance with applicable
Federal law with respect to such property.
Such written notification shall be contained in documents evidencing the
transfer of ownership of the property.

108 STAT. 2286

Sept.23

RIEGLE COMMUNITY DEVELOPMENT ACT

P.L. 103-325
Sec. 584

(2) FAILURE TO NOTIFY.-- If a transferor described in paragraph (1) fails
to make a notification in accordance with such paragraph and, subsequent to
the transfer of the property-­
(A) the transferee fails to obtain or maintain flood insurance in
accordance with applicable Federal law with respect to the property,
(B) the property is damaged by a flood disaster, and
(C) Federal disaster relief assistance is provided for the repair,
replacement, or restoration of the property as a result of such damage,
the transferor shall be required to reimburse the Federal
Government in an amount equal to the amount of the Federal disaster
relief assistance provided with respect to the property.
(3) PROPERTY DESCRIBED.-- For purposes of paragraph (1), a property
is described in this paragraph if it is personal, commercial, or residential

property for which Federal disaster relief assistance made available in a flood

disaster area has been provided, prior to the date on which the property is

transferred, for repair, replacement, or restoration of the property, if such

assistance was conditioned upon obtaining flood insurance in accordance with

applicable Federal law with respect to such property.

(c) AMENDMENT TO THE FLOOD DISASTER PROTECTION ACT OF 1973.--

Section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(a))
is amended-­
(1) by striking “, during the anticipated economic or useful life of the
project,”; and
(2) by adding at the end the following: “The requirement of maintaining
flood insurance shall apply during the life of the property, regardless of
transfer of ownership of such property.”.
(d) DEFINITION.-- For purposes of this section, the term “flood disaster area”
means an area with respect to which-­
(1) the Secretary of Agriculture finds, or has found, to have been
substantially affected by a natural disaster in the United States pursuant to
section 321(a) of the Consolidated Farm and Rural Development Act (7
U.S.C. 1961(a)); or
(2) the President declares, or has declared, the existence of a major
disaster or emergency pursuant to the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121 et seq.), as a result of flood
conditions existing in or affecting that area.
(e) EFFECTIVE DATE.-- This section and the amendments made by this section
shall apply to disasters declared after the date of enactment of this Act.
42 USC 4001
SEC. 583. REGULATIONS.
The Director of the Federal Emergency Management Agency and any note.
appropriate Federal agency may each issue any regulations necessary to carry out
the applicable provisions of this title and the applicable amendments made by this
title.
42 USC 4001
SEC. 584. RELATION TO STATE AND LOCAL LAWS.
This title and the amendments made by this title may not be construed to note.
preempt, annul, alter, amend, or exempt any person from compliance with any law,
ordinance, or regulation of any State or local government with respect to land use,
management, or control.

108 STAT. 2287