House Passes The Flood Modernization and Reform Act (H.R. 4973)

June 29, 2006


Flood Insurance Reform and Modernization Act of 2006 - (Sec. 3) Instructs the Comptroller General to study and report to Congress on the status of the national flood insurance program for certain pre-FIRM properties (properties not constructed or improved after specified dates).

Prescribes study contents, including extension of mandatory flood insurance coverage purchase requirements to: (1) properties located in any area that would be designated as having special flood hazards but for the existence of a structural flood protection system; and (2) property located in any area having special flood hazards which secures the repayment of specified loans.

(Sec. 4) Amends the National Flood Insurance Act of 1968 to include nonresidential properties and non-primary residences within the guidelines for actuarial rate properties. Sets forth a phase-in period for increased actuarial rates for premiums for such properties and residences covered under the national flood insurance program.

(Sec. 5) Reduces from 30 days to 15 days the waiting period before the effective date of flood insurance policies.

(Sec. 6) Amends the Flood Disaster Protection Act of 1973 to increase civil monetary penalties: (1) from $350 to $2,000 for each regulated lender violation; and (2) from $100,000 to $1 million the total amount of penalties that may be assessed against any single regulated lending institution or enterprise during any calendar year.

(Sec. 7) Amends the National Flood Insurance Act of 1968 to increase maximum flood insurance coverage for residential property: (1) from $250,000 to $335,000 for any single-family dwelling; (2) from $100,000 to $135,000 for contents per dwelling unit; and (3) from $500,000 to $670,000 the structure and related contents of a nonresidential property, including churches.

(Sec. 8) Prescribes coverage for necessary increases in living expenses, basement improvements, business interruption, and replacement cost of contents.

(Sec. 9) Increases from 10% to 15% the annual limitation on premium increases.

(Sec. 10) Increases from $18.5 billion to $25 billion the borrowing authority of the Director of the Federal Emergency Management Agency (FEMA) for the flood insurance program.

(Sec. 11) Requires FEMA, upon request, to participate in state flood disaster claims nonbinding mediation programs. Prescribes implementation guidelines.

(Sec. 12) Requires the Director of FEMA to report semiannually to Congress on the financial status of the national flood insurance program.

(Sec. 13) Extends funding through FY2011 for the pilot program for mitigation of severe repetitive loss properties.

(Sec. 14) Amends the Real Estate Settlement Procedures Act of 1974 to require good faith estimates to state that flood insurance coverage for residential real estate is generally available (including mandatory escrowing of flood insurance payments for many loans), whether or not the real estate is located in an area having special flood hazards.

(Sec. 15) Instructs the FEMA Director to: (1) establish a decisions appeals process for flood insurance policyholders; (2) implement specified minimum training and education standards for insurance agents selling flood insurance; and (3) report to Congress regarding implementation of each provision of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004, and identify each regulation, order, notice, and other material issued by the Director in implementing that Act.

(Sec. 16) Requires the FEMA Director to establish and report to Congress on a program to: (1) review, update, and maintain flood insurance program maps; and (2) review and revise floodplain and flood risk zones. Authorizes appropriations for FY2007-FY2012 for flood insurance program maps.

Reestablishes the Technical Mapping Advisory Council.

(Sec. 17) Requires the FEMA Director to: (1) maintain a national levee inventory; and (2) clarify the applicability of replacement cost coverage.

(Sec. 19) Authorizes additional FEMA staff.

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