article: SECTION 1. SHORT TITLE. This Act may be cited as the ``National Flood Insurance Program Commitment to Policyholders and Reform Act of 2005''. SEC. 2. FINDINGS AND PURPOSES. (a) Findings.--The Congress finds that-- (1) the amount of the flood insurance claims resulting from Hurricane Katrina and Hurricane Rita will likely exceed the aggregate amount of all claims previously paid in the history of the national flood insurance program, and will require an increase in the program's borrowing authority; (2) flood insurance policyholders have a legitimate expectation that they will receive fair and timely compensation for losses covered under their policies; (3) substantial flooding has occurred, and will likely occur again, outside of the areas designated as the 100-year floodplain; (4) to adequately and correctly assess potential flood damage and losses in all areas on the United States, the national flood insurance program will need to update its flood maps with the latest technology; (5) the maximum coverage limits for flood insurance policies should be increased to reflect inflation and the increased cost of housing; (6) significant reforms to the national flood insurance program required in the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 have yet to be implemented; and (7) despite reforms required in the Bunning-Bereuter- Blumenauer Flood Insurance Reform Act of 2004, the national flood insurance program requires a modernized and updated administrative model to ensure that the people of the United States have continued access to flood insurance. (b) Purposes.--The purposes of this Act are-- (1) to protect the integrity of the national flood insurance program by fully funding existing legal obligations expected by existing policyholders who have paid policy premiums in return for flood insurance coverage; (2) to increase incentives for homeowners and communities to participate in the national flood insurance program and to improve oversight to ensure full participation in the program for owners of properties for which such participation is mandatory; (3) to increase awareness of homeowners of flood risks and improve the quality of information regarding such risks provided to homeowners; and (4) to better mitigate future flood damage risks through a combination of enhanced protective measures, property elevation, and buyouts of flood-prone properties. SEC. 3. STUDY REGARDING MANDATORY PURCHASE REQUIREMENT FOR 500-YEAR FLOODPLAIN AND REPORTS REGARDING FLOOD MAP MODERNIZATION. (a) Study Regarding Mandatory Purchase Requirement for 500-Year Floodplain.-- (1) In general.--The Comptroller General of the United States shall conduct a study regarding the impact, effectiveness, and feasibility of amending the provisions of the Flood Disaster Protection Act of 1973 regarding the properties that are subject to the mandatory flood insurance coverage purchase requirements under such Act to extend such requirements to all properties located in the 500-year floodplain. (2) Issues.--The study under this subsection shall assess-- (A) the regulatory, financial and economic impacts of extending such requirements on the costs of homeownership, the actuarial soundness of the national flood insurance program, the Federal Emergency Management Agency, local communities, insurance companies, and local land use; (B) the effectiveness of extending such requirements in protecting homeowners from financial loss and in protecting the financial soundness of the national flood insurance program, and the effectiveness of extending such requirements in comparison with providing for more effective enforcement of existing mandatory flood insurance purchase requirements; (C) the feasibility of extending such requirements taking into consideration the need for identifying and mapping the 500-year floodplain; (D) any liability on the part of lenders to comply with or enforce such extended requirements; (E) any burdens on building officials and flood plain managers to implement such requirements in the expanded area; (F) any increased burden on the Federal Emergency Management Agency to make determinations on exemptions to the floodplain and approval of local decisions; (G) the effects of extending such requirements on existing policy holders of flood insurance coverage for properties located in the 100-year floodplain, including the effects on continued compliance and premium rates; and (H) the effects of extending such requirements on the ability of homeowners to make renovations to their homes. (3) Report.--The Comptroller General shall submit a report to the Congress regarding the results and conclusions of the study under this subsection not later than the expiration of the 6-month period beginning on the date of the enactment of this Act. (b) Annual Flood Map Modernization Reports and Certification of Completion.-- (1) In general.--During the period that ends upon the completion by the Director of the Federal Emergency Management Agency of the updating and modernization of all floodplain areas and flood-risk zones, the Director shall submit a report annually to the Congress describing the extent to which such updating and modernization has been completed. Upon the completion of such updating, the Director shall submit to the Congress, and cause to be published in the Federal Register, a report certifying such completion. (2) Timing.--The first report under this subsection shall be submitted not later than June 30, 2006, and successive reports required under this subsection during the period referred to in paragraph (1) shall be submitted not later than June 30 of each year during such period. SEC. 4. ENFORCEMENT. Paragraph (5) of section 102(f) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a) is amended-- (1) by striking ``$350'' and inserting ``$2,000''; and (2) by striking the last sentence. SEC. 5. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 REFORM ACT. (a) Appeals Process.--As directed in section 205 of the Bunning- Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note), the Director of the Federal Emergency Management Agency is again directed to, not later than 90 days after the date of the enactment of this Act, establish an appeals process through which holders of a flood insurance policy may appeal the decisions, with respect to claims, proofs of loss, and loss estimates relating to such flood insurance policy as required by such section. (b) Minimum Training and Education Requirements.--The Director of the Federal Emergency Management Agency is directed to enforce the minimum training and education requirements for all insurance agents who sell flood insurance policies that have been established under the notice published September 1, 2005 (70 Fed. Reg. 52117) pursuant to section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note). (c) Mitigation Programs.--Not later than the expiration of the 30- day period beginning on the date of the enactment of this Act, the Director of the Federal Emergency Management Agency shall issue regulations necessary to implement the amendments made by sections 102, 103, 104, and 105 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (118 Stat. 714 et seq.). (d) Report.--Not later than the expiration of the 6-month period beginning on the date of the enactment of this Act, the Director of the Federal Emergency Management Agency shall submit a report to the Congress describing the implementation of each provision of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public Law 108-264) and identifying each regulation, order, notice, and other material issued by the Director in implementing each such provision. SEC. 6. MAXIMUM COVERAGE LIMITS. Subsection (b) of section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended-- (1) in paragraph (2), by striking ``$250,000'' and inserting ``$335,500''; (2) in paragraph (3), by striking ``$100,000'' and inserting ``$135,000''; and (3) in paragraph (4), by striking ``$500,000'' each place such term appears and inserting ``$670,700''. SEC. 7. COVERAGE FOR ADDITIONAL LIVING EXPENSES AND BUSINESS INTERRUPTION. Subsection (b) of section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 4013) is amended-- (1) in paragraph (4), by striking ``and'' at the end; (2) in paragraph (5), by striking the period at the end and inserting a semicolon; and (3) by adding at the end the following new paragraphs: ``(6) in the case of any residential property, each renewal or new contract for flood insurance coverage shall provide not less than $1,000 aggregate liability per dwelling unit for any necessary increases in living expenses incurred by the insured when losses from a flood make the residence unfit to live in, which coverage shall be available only at chargeable rates that are not less than the estimated premium rates for such coverage determined in accordance with section 1307(a)(1); ``(7) in the case of any residential property, coverage for additional living expenses described in paragraph (6) shall be made available to every insured upon renewal and every applicant in excess of the limits provided in paragraph (6) in such amounts and at such rates as the Director shall establish, except that such chargeable rates shall not be less than the estimated premium rates for such coverage determined in accordance with section 1307(a)(1); and ``(8) in the case of any commercial property, optional coverage for losses resulting from any partial or total interruption of the insured's business caused by damage to, or loss of, such property from a flood shall be made available to every insured upon renewal and every applicant, except that-- ``(A) for purposes of such coverage, losses shall be determined based on the profits the covered business would have earned, based on previous financial records, had the flood not occurred; and ``(B) such coverage shall be made available only at chargeable rates that are not less than the estimated premium rates for such coverage determined in accordance with section 1307(a)(1).''. SEC. 8. INCREASE IN BORROWING AUTHORITY. (a) Borrowing Authority.--The first sentence of subsection (a) of section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)), as amended by the National Flood Insurance Program Enhanced Borrowing Authority Act of 2005 (Public Law 109-65; 119 Stat. 1998), is amended by striking ``$3,500,000,000'' and inserting ``$22,000,000,000''. (b) FEMA Report.--Not later than the expiration of the 6-month period beginning on the date of the enactment of this Act, the Director of the Federal Emergency Management Agency shall submit a report to the Congress setting forth a plan for repaying any amounts borrowed pursuant to increase in borrowing authority authorized under the amendments made by subsection (a). SEC. 9. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, AND POLICY LANGUAGE. Not later than the expiration of the 3-month period beginning on the date of the enactment of this Act, the Director of the Federal Emergency Management Agency shall-- (1) issue regulations, and revise any materials made available by such Agency, to clarify the applicability of replacement cost coverage under the national flood insurance program; (2) revise any regulations, forms, notices, guidance, and publications relating to the full cost of repair or replacement under the replacement cost coverage to more clearly describe such coverage to flood insurance policyholders and information to be provided by such policyholders relating to such coverage, and to avoid providing misleading information to such policyholders; and (3) revise the language in standard flood insurance policies under such program regarding rating and coverage descriptions in a manner that is consistent with language used widely in other homeowners and property and casualty insurance policies, including such language regarding classification of buildings, basements, crawl spaces, detached garages, enclosures below elevated buildings, and replacement costs. SEC. 10. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE PROGRAM. Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 4027) is amended-- (1) in the section heading, by striking ``REPORT TO THE PRESIDENT'' and inserting ``REPORTS''; (2) in subsection (a), by striking ``In General'' and inserting ``Biennial Report to President'' ; and (3) by adding at the end the following new subsection: ``(c) Semiannual Reports to Congress on Financial Status.--Not later than June 30 and December 31 of each year, the Director shall submit a report to the Congress regarding the financial status of the national flood insurance program under this title. Each such report shall describe the financial status of the National Flood Insurance Fund and current and projected levels of claims, premium receipts, expenses, and borrowing under the program.''. SEC. 11. NOTICE OF AVAILABILITY OF FLOOD INSURANCE IN RESPA GOOD FAITH ESTIMATE. Subsection (c) of section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by adding at the end the following new sentence: ``Each such good faith estimate shall include a conspicuous statement that flood insurance coverage for residential real estate is generally available under the National Flood Insurance Program whether or not the real estate is located in an area having special flood hazards and that, to obtain such coverage, a home owner or purchaser should contact a hazard insurance provider.''. SEC. 12. ELIGIBILITY OF PROPERTY DEMOLITION AND REBUILDING FOR MITIGATION ASSISTANCE PROGRAM. Subparagraph (B) of section 1366(e)(5) of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c(e)(5)(B)) is amended by inserting before the semicolon at the end the following: ``, or the demolition and rebuilding of structures located in such areas to at least Base Flood Elevation or any higher elevation required by any local ordinance''. SEC. 13. AUTHORIZATION OF ADDITIONAL FEMA STAFF. Notwithstanding any other provision of law, the Director of the Federal Emergency Management Agency may employ such additional staff of such Agency as may be necessary to carry out all of the responsibilities of the Director pursuant to this Act and the amendments made by this Act. There are authorized to be appropriated to Director such sums as may be necessary for costs of employing such additional staff.
summary: National Flood Insurance Program Commitment to Policyholders and Reform Act of 2005 - (Sec. 3) Directs the Comptroller General to study and report to Congress on whether the mandatory flood insurance coverage purchase requirements of the Flood Disaster Protection Act of 1973 should extend to properties located in the 500-year floodplain. Requires the Director of the Federal Emergency Management Agency (FEMA) to report annually to Congress on the extent to which updating and modernization of all floodplain areas and flood-risk zones has been completed. (Sec. 4) Amends the Flood Disaster Protection Act of 1973 to: (1) increase from $350 to $2,000 the civil monetary penalty for mortgage lender failures to require flood insurance; and (2) eliminate the $100,000 cap on the total amount of such penalties assessed against any single regulated lending institution or enterprise during any calendar year. (Sec. 5) Requires the FEMA Director to: (1) establish an appeals process through which holders of a flood insurance policy may appeal decisions on claims, proofs of loss, and loss estimates relating to such flood insurance policy; (2) enforce the minimum training and education requirements for insurance agents who sell certain flood insurance policies; (3) issue regulations to implement specified requirements of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004; and (4) identify for Congress each regulation, order, notice, and other material issued by the Director to implement each provision of such Act. (Sec. 6) Amends the National Flood Insurance Act of 1968 to increase the maximum flood insurance coverage limits for residential property. (Sec. 7) Prescribes coverage of additional living expenses and business interruption. (Sec. 8) Increases from $3.5 billion to $22 billion the borrowing authority vested in the Director. Requires the Director to report to Congress a plan for repaying any amounts borrowed pursuant to such increase. (Sec. 9) Instructs the Director to: (1) issue regulations and revise materials to clarify replacement cost coverage under the national flood insurance program; and (2) revise regulations, forms, notices, guidance, and publications regarding the full cost of repair or replacement under the replacement cost coverage to more clearly describe such coverage and to avoid providing misleading information to policyholders. (Sec. 10) Requires the Director to report semi-annually to Congress on the financial status of the national flood insurance program. (Sec. 11) Amends the Real Estate Settlement Procedures Act of 1974 to require a good faith estimate to include a conspicuous statement that flood insurance coverage for residential real estate is generally available under the National Flood Insurance Program whether or not the real estate is located in an area having special flood hazards and that, to obtain such coverage, a home owner or purchaser should contact a hazard insurance provider. (Sec. 12) Amends the National Flood Insurance Act of 1968 to include among eligible mitigation plan activities the demolition and rebuilding of structures located in areas having special flood hazards to at least Base Flood Elevation or any higher elevation required by any local ordinance. (Sec. 13) Authorizes the Director to employ additional FEMA staff.