Public Law 108-264

PUBLIC LAW 108–264—JUNE 30, 2004

BUNNING-BEREUTER-BLUMENAUER FLOOD
INSURANCE REFORM ACT OF 2004

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118 STAT. 712

PUBLIC LAW 108–264—JUNE 30, 2004

Public Law 108–264
108th Congress
An Act
June 30, 2004
[S. 2238]
BunningBereuterBlumenauer
Flood Insurance
Reform Act of
2004.
42 USC 4001
note.

To amend the National Flood Insurance Act of 1968 to reduce losses to properties
for which repetitive flood insurance claim payments have been made.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘BunningBereuter-Blumenauer Flood Insurance Reform Act of 2004’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings.
TITLE I—AMENDMENTS TO FLOOD INSURANCE ACT OF 1968
Sec. 101. Extension of program and consolidation of authorizations.
Sec. 102. Establishment of pilot program for mitigation of severe repetitive loss
properties.
Sec. 103. Amendments to existing flood mitigation assistance program.
Sec. 104. FEMA authority to fund mitigation activities for individual repetitive
claims properties.
Sec. 105. Amendments to additional coverage for compliance with land use and control measures.
Sec. 106. Actuarial rate properties.
Sec. 107. Geospatial digital flood hazard data.
Sec. 108. Replacement of mobile homes on original sites.
Sec. 109. Reiteration of FEMA responsibility to map mudslides.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

42 USC 4011
note.

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201.
202.
203.
204.
205.
206.
207.
208.
209.
210.

TITLE II—MISCELLANEOUS PROVISIONS
Definitions.
Supplemental forms.
Acknowledgement form.
Flood insurance claims handbook.
Appeal of decisions relating to flood insurance coverage.
Study and report on use of cost compliance coverage.
Minimum training and education requirements.
GAO study and report.
Prospective payment of flood insurance premiums.
Report on changes to fee schedule or fee payment arrangements.

SEC. 2. CONGRESSIONAL FINDINGS.

The Congress finds that—
(1) the national flood insurance program—
(A) identifies the flood risk;
(B) provides flood risk information to the public;
(C) encourages State and local governments to make
appropriate land use adjustments to constrict the development of land which is exposed to flood damage and minimize damage caused by flood losses; and
(D) makes flood insurance available on a nationwide
basis that would otherwise not be available, to accelerate

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PUBLIC LAW 108–264—JUNE 30, 2004

118 STAT. 713

recovery from floods, mitigate future losses, save lives,
and reduce the personal and national costs of flood disasters;
(2) the national flood insurance program insures approximately 4,400,000 policyholders;
(3) approximately 48,000 properties currently insured
under the program have experienced, within a 10-year period,
2 or more flood losses where each such loss exceeds the amount
$1,000;
(4) approximately 10,000 of these repetitive-loss properties
have experienced either 2 or 3 losses that cumulatively exceed
building value or 4 or more losses, each exceeding $1,000;
(5) repetitive-loss properties constitute a significant drain
on the resources of the national flood insurance program,
costing about $200,000,000 annually;
(6) repetitive-loss properties comprise approximately 1 percent of currently insured properties but are expected to account
for 25 to 30 percent of claims losses;
(7) the vast majority of repetitive-loss properties were built
before local community implementation of floodplain management standards under the program and thus are eligible for
subsidized flood insurance;
(8) while some property owners take advantage of the
program allowing subsidized flood insurance without requiring
mitigation action, others are trapped in a vicious cycle of suffering flooding, then repairing flood damage, then suffering
flooding, without the means to mitigate losses or move out
of harm’s way;
(9) mitigation of repetitive-loss properties through buyouts,
elevations, relocations, or flood-proofing will produce savings
for policyholders under the program and for Federal taxpayers
through reduced flood insurance losses and reduced Federal
disaster assistance;
(10) a strategy of making mitigation offers aimed at highpriority repetitive-loss properties and shifting more of the burden of recovery costs to property owners who choose to remain
vulnerable to repetitive flood damage can encourage property
owners to take appropriate actions that reduce loss of life
and property damage and benefit the financial soundness of
the program;
(11) the method for addressing repetitive-loss properties
should be flexible enough to take into consideration legitimate
circumstances that may prevent an owner from taking a mitigation action; and
(12) focusing the mitigation and buy-out of repetitive loss
properties upon communities and property owners that choose
to voluntarily participate in a mitigation and buy-out program
will maximize the benefits of such a program, while minimizing
any adverse impact on communities and property owners.

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118 STAT. 714

PUBLIC LAW 108–264—JUNE 30, 2004

TITLE I—AMENDMENTS TO FLOOD
INSURANCE ACT OF 1968
SEC. 101. EXTENSION OF PROGRAM
AUTHORIZATIONS.

AND

CONSOLIDATION

OF

(a) BORROWING AUTHORITY.—The first sentence of section
1309(a) of the National Flood Insurance Act of 1968 (42 U.S.C.
4016(a)), is amended by striking ‘‘through December’’ and all that
follows through ‘‘, and’’ and inserting ‘‘through the date specified
in section 1319, and’’.
(b) AUTHORITY FOR CONTRACTS.—Section 1319 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4026), is amended by
striking ‘‘after’’ and all that follows and inserting ‘‘after September
30, 2008.’’.
(c) EMERGENCY IMPLEMENTATION.—Section 1336(a) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4056(a)), is
amended by striking ‘‘during the period’’ and all that follows through
‘‘in accordance’’ and inserting ‘‘during the period ending on the
date specified in section 1319, in accordance’’.
(d) AUTHORIZATION OF APPROPRIATIONS FOR STUDIES.—Section
1376(c) of the National Flood Insurance Act of 1968 (42 U.S.C.
4127(c)), is amended by striking ‘‘through’’ and all that follows
and inserting ‘‘through the date specified in section 1319, for studies
under this title.’’.
SEC. 102. ESTABLISHMENT OF PILOT PROGRAM FOR MITIGATION OF
SEVERE REPETITIVE LOSS PROPERTIES.

(a) IN GENERAL.—The National Flood Insurance Act of 1968
is amended by inserting after section 1361 (42 U.S.C. 4102) the
following:
42 USC 4102a.

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

‘‘(a) AUTHORITY.—To the extent amounts are made available
for use under this section, the Director may, subject to the limitations of this section, provide financial assistance to States and
communities that decide to participate in the pilot program established under this section for taking actions with respect to severe
repetitive loss properties (as such term is defined in subsection
(b)) to mitigate flood damage to such properties and losses to
the National Flood Insurance Fund from such properties.
‘‘(b) SEVERE REPETITIVE LOSS PROPERTY.—For purposes of this
section, the term ‘severe repetitive loss property’ has the following
meaning:
‘‘(1) SINGLE-FAMILY PROPERTIES.—In the case of a property
consisting of 1 to 4 residences, such term means a property
that—
‘‘(A) is covered under a contract for flood insurance
made available under this title; and
‘‘(B) has incurred flood-related damage—
‘‘(i) for which 4 or more separate claims payments
have been made under flood insurance coverage under
this title, with the amount of each such claim exceeding
$5,000, and with the cumulative amount of such claims
payments exceeding $20,000; or

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‘‘(ii) for which at least 2 separate claims payments
have been made under such coverage, with the cumulative amount of such claims exceeding the value of
the property.
‘‘(2) MULTIFAMILY PROPERTIES.—In the case of a property
consisting of 5 or more residences, such term shall have such
meaning as the Director shall by regulation provide.
‘‘(c) ELIGIBLE ACTIVITIES.—Amounts provided under this section
to a State or community may be used only for the following activities:
‘‘(1) MITIGATION ACTIVITIES.—To carry out mitigation activities that reduce flood damages to severe repetitive loss properties, including elevation, relocation, demolition, and
floodproofing of structures, and minor physical localized flood
control projects, and the demolition and rebuilding of properties
to at least Base Flood Elevation or greater, if required by
any local ordinance.
‘‘(2) PURCHASE.—To purchase severe repetitive loss properties, subject to subsection (g).
‘‘(d) MATCHING REQUIREMENT.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
in any fiscal year the Director may not provide 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 for carrying out
the eligible activities to be funded with such assistance
amounts.
‘‘(2) REDUCED COMMUNITY MATCH.—With respect to any
1-year period in which assistance is made available under this
section, the Director may adjust the contribution required under
paragraph (1) by any State, and for the communities located
in that State, to not less than 10 percent of the cost of the
activities for each severe repetitive loss property for which
grant amounts are provided if, for such year—
‘‘(A) the State has an approved State mitigation plan
meeting the requirements for hazard mitigation planning
under section 322 of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5165) that specifies how the State intends to reduce the number of severe
repetitive loss properties; and
‘‘(B) the Director determines, after consultation with
the State, that the State has taken actions to reduce the
number of such properties.
‘‘(3) 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 eligible 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.
‘‘(e) NOTICE OF MITIGATION PROGRAM.—
‘‘(1) IN GENERAL.—Upon selecting a State or community
to receive assistance under subsection (a) to carry out eligible
activities, the Director shall notify the owners of a severe

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Regulations.

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repetitive loss property, in plain language, within that State
or community—
‘‘(A) that their property meets the definition of a severe
repetitive loss property under this section;
‘‘(B) that they may receive an offer of assistance under
this section;
‘‘(C) of the types of assistance potentially available
under this section;
‘‘(D) of the implications of declining such offer of assistance under this section; and
‘‘(E) that there is a right to appeal under this section.
‘‘(2) IDENTIFICATION OF SEVERE REPETITIVE LOSS PROPERTIES.—The Director shall take such steps as are necessary
to identify severe repetitive loss properties, and submit that
information to the relevant States and communities.
‘‘(f) STANDARDS FOR MITIGATION OFFERS.—The program under
this section for providing assistance for eligible activities for severe
repetitive loss properties shall be subject to the following limitations:
‘‘(1) PRIORITY.—In determining the properties for which
to provide assistance for eligible activities under subsection
(c), the Director shall provide assistance for properties in the
order that will result in the greatest amount of savings to
the National Flood Insurance Fund in the shortest period of
time, in a manner consistent with the allocation formula under
paragraph (5).
‘‘(2) OFFERS.—The Director shall provide assistance in a
manner that permits States and communities to make offers
to owners of severe repetitive loss properties to take eligible
activities under subsection (c) as soon as practicable.
‘‘(3) CONSULTATION.—In determining for which eligible
activities under subsection (c) to provide assistance with respect
to a severe repetitive loss property, the relevant States and
communities shall consult, to the extent practicable, with the
owner of the property.
‘‘(4) DEFERENCE TO LOCAL MITIGATION DECISIONS.—The
Director shall not, by rule, regulation, or order, establish a
priority for funding eligible activities under this section that
gives preference to one type or category of eligible activity
over any other type or category of eligible activity.
‘‘(5) ALLOCATION.—
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and
(C), of the total amount made available for assistance under
this section in any fiscal year, the Director shall allocate
assistance to a State, and the communities located within
that State, based upon the percentage of the total number
of severe repetitive loss properties located within that
State.
‘‘(B) REDISTRIBUTION.—Any funds allocated to a State,
and the communities within the State, under subparagraph
(A) that have not been obligated by the end of each fiscal
year shall be redistributed by the Director to other States
and communities to carry out eligible activities in accordance with this section.
‘‘(C) EXCEPTION.—Of the total amount made available
for assistance under this section in any fiscal year, 10
percent shall be made available to communities that—

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‘‘(i) contain one or more severe repetitive loss properties; and
‘‘(ii) are located in States that receive little or
no assistance, as determined by the Director, under
the allocation formula under subparagraph (A).
‘‘(6) NOTICE.—Upon making an offer to provide assistance
with respect to a property for any eligible activity under subsection (c), the State or community shall notify each holder
of a recorded interest on the property of such offer and activity.
‘‘(g) PURCHASE OFFERS.—A State or community may take action
under subsection (c)(2) to purchase a severe repetitive loss property
only if the following requirements are met:
‘‘(1) USE OF PROPERTY.—The State or community enters
into an agreement with the Director that provides assurances
that the property purchased will be used in a manner that
is consistent with the requirements of section 404(b)(2)(B) of
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170c(b)(2)(B)) for properties acquired,
accepted, or from which a structure will be removed pursuant
to a project provided property acquisition and relocation assistance under such section 404(b).
‘‘(2) OFFERS.—The Director shall provide assistance in a
manner that permits States and communities to make offers
to owners of severe repetitive loss properties and of associated
land to engage in eligible activities as soon as possible.
‘‘(3) PURCHASE PRICE.—The amount of purchase offer is
not less than the greatest of—
‘‘(A) the amount of the original purchase price of the
property, when purchased by the holder of the current
policy of flood insurance under this title;
‘‘(B) the total amount owed, at the time the offer to
purchase is made, under any loan secured by a recorded
interest on the property; and
‘‘(C) an amount equal to the fair market value of the
property immediately before the most recent flood event
affecting the property, or an amount equal to the current
fair market value of the property.
‘‘(4) COMPARABLE HOUSING PAYMENT.—If a purchase offer
made under paragraph (2) is less than the cost of the homeowner-occupant to purchase a comparable replacement dwelling
outside the flood hazard area in the same community, the
Director shall make available an additional relocation payment
to the homeowner-occupant to apply to the difference.
‘‘(h) INCREASED PREMIUMS IN CASES OF REFUSAL TO MITIGATE.—
‘‘(1) IN GENERAL.—In any case in which the owner of a
severe repetitive loss property refuses an offer to take action
under paragraph (1) or (2) of subsection (c) with respect to
such property, the Director shall—
‘‘(A) notify each holder of a recorded interest on the
property of such refusal; and
‘‘(B) notwithstanding subsections (a) through (c) of section 1308, thereafter the chargeable premium rate with
respect to the property shall be the amount equal to 150
percent of the chargeable rate for the property at the
time that the offer was made, as adjusted by any other
premium adjustments otherwise applicable to the property

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PUBLIC LAW 108–264—JUNE 30, 2004
and any subsequent increases pursuant to paragraph (2)
and subject to the limitation under paragraph (3).
‘‘(2) INCREASED PREMIUMS UPON SUBSEQUENT FLOOD DAMAGE.—Notwithstanding subsections (a) through (c) of section
1308, if the owner of a severe repetitive loss property does
not accept an offer to take action under paragraph (1) or (2)
of subsection (c) with respect to such property and a claim
payment exceeding $1,500 is made under flood insurance coverage under this title for damage to the property caused by
a flood event occurring after such offer is made, thereafter
the chargeable premium rate with respect to the property shall
be the amount equal to 150 percent of the chargeable rate
for the property at the time of such flood event, as adjusted
by any other premium adjustments otherwise applicable to
the property and any subsequent increases pursuant to this
paragraph and subject to the limitation under paragraph (3).
‘‘(3) LIMITATION ON INCREASED PREMIUMS.—In no case may
the chargeable premium rate for a severe repetitive loss property be increased pursuant to this subsection to an amount
exceeding the applicable estimated risk premium rate for the
area (or subdivision thereof) under section 1307(a)(1).
‘‘(4) TREATMENT OF DEDUCTIBLES.—Any increase in chargeable premium rates required under this subsection for a severe
repetitive loss property may be carried out, to the extent appropriate, as determined by the Director, by adjusting any deductible charged in connection with flood insurance coverage under
this title for the property.
‘‘(5) NOTICE OF CONTINUED OFFER.—Upon each renewal
or modification of any flood insurance coverage under this
title for a severe repetitive loss property, the Director shall
notify the owner that the offer made pursuant to subsection
(c) is still open.
‘‘(6) APPEALS.—
‘‘(A) IN GENERAL.—Any owner of a severe repetitive
loss property may appeal a determination of the Director
to take action under paragraph (1)(B) or (2) with respect
to such property, based only upon the following grounds:
‘‘(i) As a result of such action, the owner of the
property will not be able to purchase a replacement
primary residence of comparable value and that is
functionally equivalent.
‘‘(ii) Based on independent information, such as
contractor estimates or appraisals, the property owner
believes that the price offered for purchasing the property is not an accurate estimation of the value of
the property, or the amount of Federal funds offered
for mitigation activities, when combined with funds
from non-Federal sources, will not cover the actual
cost of mitigation.
‘‘(iii) As a result of such action, the preservation
or maintenance of any prehistoric or historic district,
site, building, structure, or object included in, or
eligible for inclusion in, the National Register of Historic Places will be interfered with, impaired, or disrupted.

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‘‘(iv) The flooding that resulted in the flood insurance claims described in subsection (b)(2) for the property resulted from significant actions by a third party
in violation of Federal, State, or local law, ordinance,
or regulation.
‘‘(v) In purchasing the property, the owner relied
upon flood insurance rate maps of the Federal Emergency Management Agency that were current at the
time and did not indicate that the property was located
in an area having special flood hazards.
‘‘(vi) The owner of the property, based on independent information, such as contractor estimates or
other appraisals, demonstrates that an alternative
eligible activity under subsection (c) is at least as cost
effective as the initial offer of assistance.
‘‘(B) PROCEDURE.—An appeal under this paragraph of
a determination of the Director shall be made by filing,
with the Director, a request for an appeal within 90 days
after receiving notice of such determination. Upon receiving
the request, the Director shall select, from a list of independent third parties compiled by the Director for such
purpose, a party to hear such appeal. Within 90 days
after filing of the request for the appeal, such third party
shall review the determination of the Director and shall
set aside such determination if the third party determines
that the grounds under subparagraph (A) exist. During
the pendency of an appeal under this paragraph, the
Director shall stay the applicability of the rates established
pursuant to paragraph (1)(B) or (2), as applicable.
‘‘(C) EFFECT OF FINAL DETERMINATION.—In an appeal
under this paragraph—
‘‘(i) if a final determination is made in favor of
the property owner under subparagraph (A) exist, the
third party hearing such appeal shall require the
Director to reduce the chargeable risk premium rate
for flood insurance coverage for the property involved
in the appeal from the amount required under paragraph (1)(B) or (2) to the amount paid prior to the
offer to take action under paragraph (1) or (2) of subsection (c); and
‘‘(ii) if a final determination is made that the
grounds under subparagraph (A) do not exist, the
Director shall promptly increase the chargeable risk
premium rate for such property to the amount established pursuant to paragraph (1)(B) or (2), as
applicable, and shall collect from the property owner
the amount necessary to cover the stay of the applicability of such increased rates during the pendency of
the appeal.
‘‘(D) COSTS.—If the third party hearing an appeal
under this paragraph is compensated for such service, the
costs of such compensation shall be borne—
‘‘(i) by the owner of the property requesting the
appeal, if the final determination in the appeal is that
the grounds under subparagraph (A) do not exist; and

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Deadline.

Deadline.

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‘‘(ii) by the National Flood Insurance Fund, if such
final determination is that the grounds under subparagraph (A) do exist.
‘‘(E) REPORT.—Not later than 6 months after the date
of the enactment of the Bunning-Bereuter-Blumenauer
Flood Insurance Reform Act of 2004, the Director shall
submit a report describing the rules, procedures, and
administration for appeals under this paragraph to—
‘‘(i) the Committee on Banking, Housing, and
Urban Affairs of the Senate; and
‘‘(ii) the Committee on Financial Services of the
House of Representatives.
‘‘(i) DISCRETIONARY ACTIONS IN CASES OF FRAUDULENT
CLAIMS.—If the Director determines that a fraudulent claim was
made under flood insurance coverage under this title for a severe
repetitive loss property, the Director may—
‘‘(1) cancel the policy and deny the provision to such policyholder of any new flood insurance coverage under this title
for the property; or
‘‘(2) refuse to renew the policy with such policyholder upon
expiration and deny the provision of any new flood insurance
coverage under this title to such policyholder for the property.
‘‘(j) RULES.—
‘‘(1) IN GENERAL.—The Director shall, by rule—
‘‘(A) subject to subsection (f)(4), develop procedures
for the distribution of funds to States and communities
to carry out eligible activities under this section; and
‘‘(B) ensure that the procedures developed under paragraph (1)—
‘‘(i) require the Director to notify States and
communities of the availability of funding under this
section, and that participation in the pilot program
under this section is optional;
‘‘(ii) provide that the Director may assist States
and communities in identifying severe repetitive loss
properties within States or communities;
‘‘(iii) allow each State and community to select
properties to be the subject of eligible activities, and
the appropriate eligible activity to be performed with
respect to each severe repetitive loss property; and
‘‘(iv) require each State or community to submit
a list of severe repetitive loss properties to the Director
that the State or community would like to be the
subject of eligible activities under this section.
‘‘(2) CONSULTATION.—Not later than 90 days after the date
of enactment of this Act, the Director shall consult with State
and local officials in carrying out paragraph (1)(A), and provide
an opportunity for an oral presentation, on the record, of data
and arguments from such officials.
‘‘(k) FUNDING.—
‘‘(1) IN GENERAL.—Pursuant to section 1310(a)(8), the
Director may use amounts from the National Flood Insurance
Fund to provide assistance under this section in each of fiscal
years 2005, 2006, 2007, 2008, and 2009, except that the amount
so used in each such fiscal year may not exceed $40,000,000
and shall remain available until expended. Notwithstanding

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any other provision of this title, amounts made available pursuant to this subsection shall not be subject to offsetting collections through premium rates for flood insurance coverage under
this title.
‘‘(2) ADMINISTRATIVE EXPENSES.—Of the amounts made
available under this subsection, the Director may use up to
5 percent for expenses associated with the administration of
this section.
‘‘(l) TERMINATION.—The Director may not provide assistance
under this section to any State or community after September
30, 2009.’’.
(b) AVAILABILITY OF NATIONAL FLOOD INSURANCE FUND
AMOUNTS.—Section 1310(a) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4017(a)) is amended—
(1) in paragraph (7), by striking ‘‘and’’ at the end; and
(2) by striking paragraph (8) and inserting the following:
‘‘(8) for financial assistance under section 1361A to States
and communities for taking actions under such section with
respect to severe repetitive loss properties, but only to the
extent provided in section 1361A(i); and’’.
SEC. 103. AMENDMENTS TO EXISTING FLOOD MITIGATION ASSISTANCE PROGRAM.

(a) STANDARD FOR APPROVAL OF MITIGATION PLANS.—Section
1366(e)(3) of the National Flood Insurance Act of 1968 (42 U.S.C.
4104c) is amended by adding at the end the following new sentence:
‘‘The Director may approve only mitigation plans that give priority
for funding to such properties, or to such subsets of properties,
as are in the best interest of the National Flood Insurance Fund.’’.
(b) PRIORITY FOR MITIGATION ASSISTANCE.—Section 1366(e) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4104c) is
amended by striking paragraph (4) and inserting the following:
‘‘(4) PRIORITY FOR MITIGATION ASSISTANCE.—In providing
grants under this subsection for mitigation activities, the
Director shall give first priority for funding to such properties,
or to such subsets of such properties as the Director may
establish, that the Director determines are in the best interests
of the National Flood Insurance Fund and for which matching
amounts under subsection (f) are available.’’.
(c) COORDINATION WITH STATES AND COMMUNITIES.—Section
1366 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c)
is amended by adding at the end the following:
‘‘(m) COORDINATION WITH STATES AND COMMUNITIES.—The
Director shall, in consultation and coordination with States and
communities take such actions as are appropriate to encourage
and improve participation in the national flood insurance program
of owners of properties, including owners of properties that are
not located in areas having special flood hazards (the 100-year
floodplain), but are located within flood prone areas.’’.
(d) FUNDING.—Section 1367 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4104d) is amended—
(1) in subsection (b), by striking paragraph (1) and inserting
the following:
‘‘(1) in each fiscal year, amounts from the National Flood
Insurance Fund not exceeding $40,000,000, to remain available
until expended;’’;

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(2) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(3) by inserting after subsection (b) the following:
‘‘(c) ADMINISTRATIVE EXPENSES.—The Director may use not
more than 5 percent of amounts made available under subsection
(b) to cover salaries, expenses, and other administrative costs
incurred by the Director to make grants and provide assistance
under sections 1366 and 1323.’’.
(e) REDUCED COMMUNITY MATCH.—Section 1366(g) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4104c(g)), is
amended—
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
‘‘(2) REDUCED COMMUNITY MATCH.—With respect to any
1-year period in which assistance is made available under this
section, the Director may adjust the contribution required under
paragraph (1) by any State, and for the communities located
in that State, to not less than 10 percent of the cost of the
activities for each severe repetitive loss property for which
grant amounts are provided if, for such year—
‘‘(A) the State has an approved State mitigation plan
meeting the requirements for hazard mitigation planning
under section 322 of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5165) that specifies how the State intends to reduce the number of severe
repetitive loss properties; and
‘‘(B) the Director determines, after consultation with
the State, that the State has taken actions to reduce the
number of such properties.’’.
(f) NATIONAL FLOOD MITIGATION FUND.—Section 1366(b)(2) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4104c(b)(2)),
is amended by striking ‘‘$1,500,000’’ and inserting ‘‘7.5 percent
of the available funds under this section’’.
SEC. 104. FEMA AUTHORITY TO FUND MITIGATION ACTIVITIES FOR
INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.

(a) IN GENERAL.—Chapter I of the National Flood Insurance
Act of 1968 (42 U.S.C. 4011 et seq.) is amended by adding at
the end the following:
42 USC 4030.

‘‘SEC. 1323. GRANTS FOR REPETITIVE INSURANCE CLAIMS PROPERTIES.

‘‘(a) IN GENERAL.—The Director may provide funding for mitigation actions that reduce flood damages to individual properties
for which 1 or more claim payments for losses have been made
under flood insurance coverage under this title, but only if the
Director determines that—
‘‘(1) such activities are in the best interest of the National
Flood Insurance Fund; and
‘‘(2) such activities cannot be funded under the program
under section 1366 because—
‘‘(A) the requirements of section 1366(g) are not being
met by the State or community in which the property
is located; or
‘‘(B) the State or community does not have the capacity
to manage such activities.
‘‘(b) PRIORITY FOR WORST-CASE PROPERTIES.—In determining
the properties for which funding is to be provided under this section,

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the Director shall consult with the States in which such properties
are located and provide assistance for properties in the order that
will result in the greatest amount of savings to the National Flood
Insurance Fund in the shortest period of time.’’.
(b) AVAILABILITY OF NATIONAL FLOOD INSURANCE FUND
AMOUNTS.—Section 1310(a) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4017(a)) is amended by adding at the end
the following:
‘‘(9) for funding, not to exceed $10,000,000 in any fiscal
year, for mitigation actions under section 1323, except that,
notwithstanding any other provision of this title, amounts made
available pursuant to this paragraph shall not be subject to
offsetting collections through premium rates for flood insurance
coverage under this title.’’.
SEC. 105. AMENDMENTS TO ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE AND CONTROL MEASURES.

(a) COMPLIANCE WITH LAND USE AND CONTROL MEASURES.—
Section 1304(b) of the National Flood Insurance Act of 1968 (42
U.S.C. 4011(b)) is amended—
(1) in the matter preceding paragraph (1)—
(A) by striking ‘‘compliance’’ and inserting ‘‘implementing measures that are consistent’’; and
(B) by inserting ‘‘by the community’’ after ‘‘established’’;
(2) in paragraph (2), by striking ‘‘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’’
and inserting ‘‘are substantially damaged structures;’’
(3) in paragraph (3), by striking ‘‘compliance with land
use and control measures.’’ and inserting ‘‘the implementation
of such measures; and’’; and
(4) by inserting after paragraph (3) and before the last
undesignated paragraph the following:
‘‘(4) properties for which an offer of mitigation assistance
is made under—
‘‘(A) section 1366 (Flood Mitigation Assistance Program);
‘‘(B) section 1368 (Repetitive Loss Priority Program
and Individual Priority Property Program);
‘‘(C) the Hazard Mitigation Grant Program authorized
under section 404 of the Robert T. Stafford Disaster Assistance and Emergency Relief Act (42 U.S.C. 5170c);
‘‘(D) the Predisaster Hazard Mitigation Program under
section 203 of the Robert T. Stafford Disaster Assistance
and Emergency Relief Act (42 U.S.C. 5133); and
‘‘(E) any programs authorized or for which funds are
appropriated to address any unmet needs or for which
supplemental funds are made available.’’.
(b) DEFINITIONS.—Section 1370(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is amended—
(1) by striking paragraph (7) and inserting the following:
‘‘(7) the term ‘repetitive loss structure’ means a structure
covered by a contract for flood insurance that—
‘‘(A) has incurred flood-related damage on 2 occasions,
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; and

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PUBLIC LAW 108–264—JUNE 30, 2004
‘‘(B) at the time of the second incidence of flood-related
damage, the contract for flood insurance contains increased
cost of compliance coverage.’’;
(2) in paragraph (13), by striking ‘‘and’’ at the end;
(3) in paragraph (14), by striking the period and inserting
‘‘; and’’; and
(4) by adding at the end the following:
‘‘(15) the term ‘substantially damaged structure’ means
a structure covered by a contract for flood insurance that has
incurred damage for which the cost of repair exceeds an amount
specified in any regulation promulgated by the Director, or
by a community ordinance, whichever is lower.’’.

SEC. 106. ACTUARIAL RATE PROPERTIES.

(a) IN GENERAL.—Section 1308 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4015) is amended by striking subsection
(c) and inserting the following:
‘‘(c) ACTUARIAL RATE PROPERTIES.—Subject only to the limitations provided under paragraphs (1) and (2), the chargeable rate
shall not be less than the applicable estimated risk premium rate
for such area (or subdivision thereof) under section 1307(a)(1) with
respect to the following properties:
‘‘(1) POST-FIRM PROPERTIES.—Any property the construction
or substantial improvement of which the Director determines
has been started after December 31, 1974, or started after
the effective date of the initial rate map published by the
Director under paragraph (2) of section 1360 for the area in
which such property is located, whichever is later, except that
the chargeable rate for properties under this paragraph shall
be subject to the limitation under subsection (e).
‘‘(2) CERTAIN LEASED COASTAL AND RIVER PROPERTIES.—
Any property leased from the Federal Government (including
residential and nonresidential properties) that the Director
determines is located on the river-facing side of any dike,
levee, or other riverine flood control structure, or seaward of
any seawall or other coastal flood control structure.’’.
(b) INAPPLICABILITY OF ANNUAL LIMITATIONS ON PREMIUM
INCREASES.—Section 1308(e) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4015(e)) is amended by striking ‘‘Notwithstanding’’ and inserting ‘‘Except with respect to properties described
under paragraph (2) or (3) of subsection (c), and notwithstanding’’.
42 USC 4101
note.

SEC. 107. GEOSPATIAL DIGITAL FLOOD HAZARD DATA.

For the purposes of flood insurance and floodplain management
activities conducted pursuant to the National Flood Insurance Program under the National Flood Insurance Act of 1968 (42 U.S.C.
4001 et seq.), geospatial digital flood hazard data distributed by
the Federal Emergency Management Agency, or its designee, or
the printed products derived from that data, are interchangeable
and legally equivalent for the determination of the location of
1 in 100 year and 1 in 500 year flood planes, provided that all
other geospatial data shown on the printed product meets or exceeds
any accuracy standard promulgated by the Federal Emergency
Management Agency.
SEC. 108. REPLACEMENT OF MOBILE HOMES ON ORIGINAL SITES.

Section 1315 of the National Flood Insurance Act of 1968 (42
U.S.C. 4022) is amended by adding at the end the following:

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‘‘(c) REPLACEMENT OF MOBILE HOMES ON ORIGINAL SITES.—
‘‘(1) COMMUNITY PARTICIPATION.—The placement of any
mobile home on any site shall not affect the eligibility of any
community to participate in the flood insurance program under
this title and the Flood Disaster Protection Act of 1973 (notwithstanding that such placement may fail to comply with any
elevation or flood damage mitigation requirements), if—
‘‘(A) such mobile home was previously located on such
site;
‘‘(B) such mobile home was relocated from such site
because of flooding that threatened or affected such site;
and
‘‘(C) such replacement is conducted not later than the
expiration of the 180-day period that begins upon the
subsidence (in the area of such site) of the body of water
that flooded to a level considered lower than flood levels.
‘‘(2) DEFINITION.—For purposes of this subsection, the term
‘mobile home’ has the meaning given such term in the law
of the State in which the mobile home is located.’’.
SEC. 109. REITERATION
MUDSLIDES.

OF

FEMA

RESPONSIBILITY

TO

MAP

Deadline.

42 USC 4101
note.

As directed in section 1360(b) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4101(b)), the Director of the Federal Emergency Management Agency is again directed to accelerate the identification of risk zones within flood-prone and mudslide-prone areas,
as provided by subsection (a)(2) of such section 1360, in order
to make known the degree of hazard within each such zone at
the earliest possible date.

TITLE II—MISCELLANEOUS
PROVISIONS

42 USC 4011
note.

SEC. 201. DEFINITIONS.

In this title, the following definitions shall apply:
(1) DIRECTOR.—The term ‘‘Director’’ means the Director
of the Federal Emergency Management Agency.
(2) FLOOD INSURANCE POLICY.—The term ‘‘flood insurance
policy’’ means a flood insurance policy issued under the
National Flood Insurance Act of 1968 (42 U.S.C. et seq.).
(3) PROGRAM.—The term ‘‘Program’’ means the National
Flood Insurance Program established under the National Flood
Insurance Act of 1968 (42 U.S.C. 4001 et seq.).
SEC. 202. SUPPLEMENTAL FORMS.

(a) IN GENERAL.—Not later than 6 months after the date of
enactment of this Act, the Director shall develop supplemental
forms to be issued in conjunction with the issuance of a flood
insurance policy that set forth, in simple terms—
(1) the exact coverages being purchased by a policyholder;
(2) any exclusions from coverage that apply to the coverages
purchased;
(3) an explanation, including illustrations, of how lost items
and damages will be valued under the policy at the time of
loss;

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(4) the number and dollar value of claims filed under
a flood insurance policy over the life of the property, and
the effect, under the National Flood Insurance Act of 1968
(42 U.S.C. 4001 et seq.), of the filing of any further claims
under a flood insurance policy with respect to that property;
and
(5) any other information that the Director determines
will be helpful to policyholders in understanding flood insurance
coverage.
(b) DISTRIBUTION.—The forms developed under subsection (a)
shall be given to—
(1) all holders of a flood insurance policy at the time of
purchase and renewal; and
(2) insurance companies and agents that are authorized
to sell flood insurance policies.
SEC. 203. ACKNOWLEDGEMENT FORM.
Deadline.

(a) IN GENERAL.—Not later than 6 months after the date of
enactment of this Act, the Director shall develop an acknowledgement form to be signed by the purchaser of a flood insurance
policy that contains—
(1) an acknowledgement that the purchaser has received
a copy of the standard flood insurance policy, and any forms
developed under section 202; and
(2) an acknowledgement that the purchaser has been told
that the contents of a property or dwelling are not covered
under the terms of the standard flood insurance policy, and
that the policyholder has the option to purchase additional
coverage for such contents.
(b) DISTRIBUTION.—Copies of an acknowledgement form
executed under subsection (a) shall be made available to the purchaser and the Director.
SEC. 204. FLOOD INSURANCE CLAIMS HANDBOOK.

Deadline.

(a) IN GENERAL.—Not later than 6 months after the date of
enactment of this Act, the Director shall develop a flood insurance
claims handbook that contains—
(1) a description of the procedures to be followed to file
a claim under the Program, including how to pursue a claim
to completion;
(2) how to file supplementary claims, proof of loss, and
any other information relating to the filing of claims under
the Program; and
(3) detailed information regarding the appeals process
established under section 205.
(b) DISTRIBUTION.—The handbook developed under subsection
(a) shall be made available to—
(1) each insurance company and agent authorized to sell
flood insurance policies; and
(2) each purchaser, at the time of purchase and renewal,
of a flood insurance policy, and at the time of any flood loss
sustained by such purchaser.

Deadline.
Regulations.

SEC. 205. APPEAL OF DECISIONS RELATING TO FLOOD INSURANCE
COVERAGE.

Not later than 6 months after the date of enactment of this
Act, the Director shall, by regulation, establish an appeals process
through which holders of a flood insurance policy may appeal the

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decisions, with respect to claims, proofs of loss, and loss estimates
relating to such flood insurance policy, of—
(1) any insurance agent or adjuster, or insurance company;
or
(2) any employee or contractor of the Federal Emergency
Management Agency.
SEC. 206. STUDY AND REPORT ON USE OF COST COMPLIANCE COVERAGE.

Deadline.

Not later than 1 year after the date of enactment of this
Act, the Director of the Federal Emergency Management Agency
shall submit to Congress a report that sets forth—
(1) the use of cost of compliance coverage under section
1304(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4011(b)) in connection with flood insurance policies;
(2) any barriers to policyholders using the funds provided
by cost of compliance coverage under that section 1304(b) under
a flood insurance policy, and recommendations to address those
barriers; and
(3) the steps that the Federal Emergency Management
Agency has taken to ensure that funds paid for cost of compliance coverage under that section 1304(b) are being used to
lessen the burdens on all homeowners and the Program.
SEC. 207. MINIMUM TRAINING AND EDUCATION REQUIREMENTS.

The Director of the Federal Emergency Management Agency
shall, in cooperation with the insurance industry, State insurance
regulators, and other interested parties—
(1) establish minimum training and education requirements
for all insurance agents who sell flood insurance policies; and
(2) not later than 6 months after the date of enactment
of this Act, publish these requirements in the Federal Register,
and inform insurance companies and agents of the requirements.

Deadline.
Federal Register,
publication.

SEC. 208. GAO STUDY AND REPORT.

(a) STUDY.—The Comptroller General of the United States shall
conduct a study of—
(1) the adequacy of the scope of coverage provided under
flood insurance policies in meeting the intended goal of Congress that flood victims be restored to their pre-flood conditions,
and any recommendations to ensure that goal is being met;
(2) the adequacy of payments to flood victims under flood
insurance policies; and
(3) the practices of the Federal Emergency Management
Agency and insurance adjusters in estimating losses incurred
during a flood, and how such practices affect the adequacy
of payments to flood victims.
(b) REPORT.—Not later than 1 year after the date of enactment
of this Act, the Comptroller General shall submit to Congress a
report regarding the results of the study under subsection (a).

Deadline.

SEC. 209. PROSPECTIVE PAYMENT OF FLOOD INSURANCE PREMIUMS.

Section 1308 of the National Flood Insurance Act of 1968 (42
U.S.C. 4015) is amended by adding at the end the following:
‘‘(f) ADJUSTMENT OF PREMIUM.—Notwithstanding any other
provision of law, if the Director determines that the holder of
a flood insurance policy issued under this Act is paying a lower

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premium than is required under this section due to an error in
the flood plain determination, the Director may only prospectively
charge the higher premium rate.’’.
Deadline.

SEC. 210. REPORT ON CHANGES TO FEE SCHEDULE OR FEE PAYMENT
ARRANGEMENTS.

Not later than 3 months after the date of enactment of this
Act, the Director shall submit a report on any changes or modifications made to the fee schedule or fee payment arrangements
between the Federal Emergency Management Agency and insurance
adjusters who provide services with respect to flood insurance policies to—
(1) the Committee on Banking, Housing, and Urban Affairs
of the Senate; and
(2) the Committee on Financial Services of the House of
Representatives.
Approved June 30, 2004.

LEGISLATIVE HISTORY—S. 2238 (H.R. 253):
HOUSE REPORTS: No. 108–266 accompanying H.R. 253 (Comm. on Financial Services).
SENATE REPORTS: No. 108–262 (Comm. on Banking, Housing, and Urban Affairs).
CONGRESSIONAL RECORD, Vol. 150 (2004):
June 15, considered and passed Senate.
June 21, considered and passed House.

Æ

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