Flood Insurance Reform: Side-By-Side Comparison of H.R. 4973 and Senate Committee Bill

Flood Insurance Reform: Side-By-Side Comparison of H.R. 4973 and Senate Committee Bill

Order Code RL33450
CRS Report for Congress
Received through the CRS Web
Flood Insurance Reform:
Side-By-Side Comparison of
H.R. 4973 and Senate Committee Bill
June 6, 2006
Rawle O. King
Analyst in Industry Economics
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

Flood Insurance Reform: Side-By-Side Comparison of
H.R. 4973 and Senate Committee Bill
Summary
In 1968, Congress established the National Flood Insurance Program (NFIP) as
a response to mounting flood losses, escalating costs of disaster relief to the general
taxpayers, and as an alternative to federal disaster assistance provided on an ad hoc
basis. In the wake of Hurricanes Katrina, Rita, and Wilma in 2005, the NFIP faces
unprecedented financial and regulatory strains. With another severe storm season
predicted in 2006, the nation’s attention has now focused on disaster impacts and
costs, as well as both the strengths of the NFIP in managing and financing the
nation’s flood risk, and its weaknesses. Those concerned about program weaknesses
cite the program’s increasing need to borrow from the U.S. Treasury, premium rate
cross-subsidies, outdated flood insurance rate maps, allegations of uneven
compliance with mandatory purchase requirements, and the need to put the program
on sounder financial footing.
Members of the 109th Congress are considering legislation — H.R. 4973, the
Flood Insurance Reform and Modernization Act of 2006, and a comparable Senate
bill that does not yet have a number — intended to enhance NFIP effectiveness of
and limit taxpayer liability for claims.
This report provides a brief overview of the flood insurance reform issue and
summarizes and provides a side-by-side comparison of H.R. 4973 and the
comparable Senate Committee bill. This report will be updated as events warrant.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of H.R. 4973 and Senate Committee Bill . . . . . . . . . . . . . . . . . . . . . . . 2
List of Tables
Table 1. Side-by-Side Comparison of Flood Insurance Reform Legislation
H.R. 4973 and Senator Committee Bill
. . . . . . . . . . . . . . . . . . . . 5

Flood Insurance Reform: Side-By-Side
Comparison of H.R. 4973 and Senate
Committee Bill
Introduction
In 1968, after several decades of pursuing structural approaches, such as dams,
levees, and channels to modify nature’s flood hazard areas, Congress established a
flood risk financing and land management strategy — the National Flood Insurance
Program (NFIP) — with the passage of the National Flood Insurance Act.1 The
federal flood insurance program was established in response to mounting flood
losses, escalating cost of disaster relief to the general taxpayers, and as an alternative
to federal disaster assistance provided on an ad hoc basis.
Federal flood insurance is currently available to homeowners, renters, and
businesses in 20,118 communities that participate in the NFIP to meet the cost of
repairing damage to buildings and their contents caused by floods. Since 1978, the
NFIP has grown from 1.4 million policyholders and $50 billion in risk exposure to
almost 5 million policyholders and $900 billion in risk exposure.2 Most disaster
experts would agree that demands on the NFIP are not likely to decline, as weather-
related disasters, particularly hurricanes, are said to be worsening in frequency and
severity, population continues to grow in flood-prone areas, and property values
continue to rise.
In the wake of Hurricanes Katrina, Rita, and Wilma in 2005, the NFIP faces
unprecedented financial and regulatory strains. With another severe storm season
predicted in 2006, the nation’s attention has now focused on disaster impacts and
costs, as well as both the strengths of the NFIP in managing and financing the
nation’s flood risk and its weaknesses. Those concerned about program weaknesses
cite the increasing need to borrow from the U.S. Treasury, premium rate cross-
subsidies, outdated flood insurance rate maps, allegations of uneven compliance with
mandatory purchase requirements, and a need to put the program on sounder
financial footing.
1 P.L. 90-448; 82 Stat. 573.
2 FEMA uses 1978 as the starting date for collecting NFIP data. This was the year the
program was transferred from the Department of Housing and Urban Affairs.

CRS-2
On March 23, 2006, the President signed into law S. 2275, the National Flood
Insurance Program Enhanced Borrowing Authority Act of 2006,3 to increase from
$18.5 billion to $20.8 billion the amount that the Federal Emergency Management
Agency (FEMA) can borrow from the U.S. Treasury to satisfy contractual obligations
under the NFIP. Under current law, FEMA must repay any borrowed funds (with
interest) as it collects premiums. Some insurance market experts believe FEMA is
unlikely to repay the $23 billion borrowed from the Treasury within the next 10 years
because they think premium collections over that period will probably be used to pay
claims resulting from Hurricane Katrina and future flood insurance claims and
expenses.4
The 109th Congress is considering additional legislation — H.R. 4973 and a
comparable Senate bill that does not yet have a number — to modify the NFIP to
make changes intended to enhance the effectiveness of the program while limiting
taxpayer liability for claims.
Overview of H.R. 4973 and Senate Committee Bill
On April 6, 2006, the House Financial Services Committee reported H.R. 4973,
the Flood Insurance Reform and Modernization Act, that would modify the NFIP by
implementing changes to bring more consumers into the system and gradually
reducing subsidies for properties built before flood Insurance Rate Maps (FIRMs)
were developed. H.R. 4973 would increase the NFIP’s borrowing authority from the
U.S. Treasury from $18.5 billion to $25 billion, and increase the maximum flood
insurance coverage for residential property, from $250,000 to $335,000 for any
single-family dwelling; from $100,000 to $135,000 for contents per dwelling unit;
and from $500,000 to $670,000 for structures and related contents of a nonresidential
property. The proposed legislation includes provisions aimed at moving the program
to actuarial rates for certain properties and modernizing the nation’s flood maps.
Under H.R. 4973, FEMA would be required to review the nation’s flood maps, and
for the first time, map the nation’s 500-year flooplains. The bill would authorize
$300 million to be appropriated for map modernization effort through fiscal years
2007 to 2012, and require FEMA to maintain and publish an inventory of U.S.
levees.
H.R. 4973 would increase enforcement tools to be made available to bank
regulators at both the federal and state levels. Lenders would face higher penalties
for failing to enforce the NFIP’s mandatory flood insurance purchase requirement.
In addition, lenders would be required to notify borrowers as part of the Real Estate
3 P.L. 109-208.
4 For more information on NFIP’s Treasury borrowing, see CRS Report RS22394, National
Flood Insurance Program: Treasury Borrowing in the Aftermath of Hurricane Katrina, by
Rawle O. King.

CRS-3
Settlement Procedures Act requirements that flood insurance is available to all
homeowners, and not just those in 100-year floodplains.5
H.R. 4973 would phase out premium subsidies, and create new categories of
optional coverage, such as business interruption and additional living expenses. The
bill would instruct FEMA to establish a decisions appeal process, implement
specified minimum training and education standards for insurance agents selling
flood insurance, and report to Congress regarding implementation of each provision
of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004,6 and
identify each regulation, order, notice, and other material issued by FEMA in
implementing the act.
H.R. 4973 also would require the Government Accountability Office (GAO) to
study coverage for so-called “pre-FIRM” structures built or substantially improved
on or before December 31, 1974, or before the effective date of an initial flood
insurance rate map (FIRM) for the area. GAO also would be required to study
extending the mandatory purchase requirement to properties located in areas behind
structural flood protection systems like dams or levees.
On May 25, 2006, the Senate Committee on Banking, Housing, and Urban
Affairs approved in Executive Session the Flood Insurance Reform and
Modernization Act of 2006. The legislation, which does not yet have a number,
would:
! make the NFIP more actuarially sound by phasing out premium
subsidies on vacation homes, businesses, and severe repetitive loss
properties built before the introduction of flood insurance rate maps
(FIRM) on or before December 31, 1974, or before the effective date
of an initial FIRM for the area;
! address often outdated and inaccurate flood maps that are used to
price insurance by requiring that FIRMs be updated to allow the
program to transition to more accurate pricing of the insurance;
! establish a mandatory reserve fund to provide additional funding to
pay claims during catastrophic loss years without further need to
seek assistance from federal taxpayers;
! increase enforcement tools available to bank regulators at both the
federal and state levels by requiring escrow of flood insurance
premiums and increasing the civil monetary penalties regulators may
levy against lenders who fail to comply with the program’s
mandatory purchase requirements, and, for the first time, require
5 A growing number of Americans are exposed to flood risk due to unprecedented rains that
threaten levees and dams. The areas behind structural flood control measures heretofore
were not considered in the 100-year floodplain, so residents did not have to comply with the
mandatory purchase requirement under the NFIP.
6 PL 108-264; 118 Stat. 712.

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state-regulated financial institutions (lenders) to maintain flood
insurance coverage on all mortgages located within the 100-year
floodplain;
! provide for a state-sponsored program of mediation of catastrophe-
related insurance claims that may result in flood damage claims
under the NFIP; and
! require GAO to conduct several studies (reports and audits) designed
to give Members the information they will need to develop options
for future changes to the program. (The 2004 authorization of the
NFIP expires in 2007.)

CRS-5
Table 1. Side-by-Side Comparison of Flood Insurance Reform Legislation
H.R. 4973 and Senator Committee Bill
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Title
Flood Insurance Reform and Modernization Act of 2006
Same.
Purpose
Protects the integrity of the NFIP by fully funding existing
No comparable provision.
legal obligations, increases incentives for program
participation, and promotes property owner awareness of both
flood risks and the quality of information regarding such risks.
Premium Rate Structure
Requires phase-in of actuarial premium rates for non-
Gradually phases out the current premium rate subsidies on
Reform
residential properties and non-primary residences by increasing
several pre-Flood Insurance Rate map (pre-FIRM) properties as
the chargeable premium rates 15% during the 12-month period
follows: (1) non-primary residences; (2) any severe repetitive
after the Federal Emergency Management Agency (FEMA)
loss property; (3) any property that has incurred flood-related
certifies that it has completed its review of the nation’s flood
damage in amounts exceeding the fair market value (FMV) of
maps, and once every 12 months thereafter until such increase
such property; (4) any business property; and (5) any property
is accomplished.
that has sustained substantial damage exceeding 50% of the
FMV or substantial improvement exceeding 30% of its FMV.
Provides for a 25% increase in premium rates per year during
the phase-out period until the property is no longer subsidized
under the program. Requires actuarial rates for newly issued
policies or lapsed policies.
Limitations on Annual
Increases from 10% to 15% the overall maximum annual
Same.
Premium Increases
chargeable premium rate for flood insurance during any 12-
month period .
Waiting Period for
Waiting period for effective date of policies reduced from 30 to
No comparable provision.
Effective Date of Policies
15 days.
Maximum Coverage
Increased coverage limits from $250,000 to $335,000 and
No comparable provision.
Limits
$500,000 to $670,000 for residential and non-residential
properties, respectively.

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H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Coverage for Additional
Provides for payment of $1,000 per dwelling in additional
No comparable provision.
Living Expenses, Business
living expenses following a flood loss when the residence is
Interruption, and
unfit to live in. Allows homeowners to purchase optional
Replacement Cost of
coverage for flood losses in basements, crawl spaces and other
Contents
enclosed areas under buildings that are not covered by primary
flood insurance. Provides optional business interruption
coverage for commercial property. Losses are to be determined
by the profits the covered business would have earned, and on
previous financial records, had the flood not occurred.
Provides optional coverage for the full replacement cost of any
contents in the residential and commercial property. New
benefits are made available only at time of renewal or issuance
of a new contract, and only at actuarial rates.
Increase in Borrowing
Increases the National Flood Insurance Program (NFIP)
No comparable provision.
Authority Limits
Treasury borrowing authority from $18.5 billion to $25 billion.
Financing of Funds From
No comparable provision.
Authorizes the Secretary of the Treasury to provide funds to
Treasury
cover existing obligations of the NFIP for the 2005 hurricane
season.
Borrowing Authority Debt
No comparable provision.
Requires the Secretary of the Treasury to completely eliminate
Forgiveness
any obligations owed to the Treasury by the NFIP for the 2005
hurricane season. Debt forgiveness takes effect only after the
Director of FEMA certifies to the Treasury that all financial
resources have been obligated to pay claims.
Repayment Plan for
Requires the Director of Federal Emergency Management
Requires that anytime the NFIP uses its borrowing authority, it
Borrowing Authority
Agency (FEMA) to submit a study to Congress within six
must submit a repayment plan to both the Secretary of the
months of enactment of the act, setting forth a plan for repaying
Treasury and to Congress.
borrowed funds.
Decrease in Borrowing
No comparable provision.
Reduces the NFIP’s borrowing authority from $18.5 billion to
Authority
$1.5 billion.

CRS-7
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Minimum Deductibles
No comparable provision.
Sets minimum deductible level for claims at $2,000 for
Levels for Claims
properties constructed before December 31, 1974 (pre-FIRM)
and $1,000 for post-FIRM properties. All deductibles are at an
annual basis, and once the deductible is met, no further
deductible is required.
Civil Penalties for
Civil penalties on lending institutions for violating the
Civil penalties on lending institutions for violating the
Lending Institutions
mandatory flood insurance purchase requirement increased
mandatory flood insurance purchase requirement increase from
from $350 to $2,000 per occurrence and the annual cap from
$350 to $2,000. Eliminates the annual cap.
$100,000 to $1,000,000. Adds that no penalties may be
imposed on lenders who make good faith effort to comply with
the requirements.
State Disaster Claims
Permits the insurance commissioner of a state to submit a
Does not explicitly use the term “adjusters”; instead, uses the
Mediation Programs
request to the Director of FEMA to have agency participate
term “Representatives of the Director” and specifies the
(e.g., provide certified adjusters) in non-binding mediation of
qualifications of mediators as being members in good standing
catastrophe-related insurance claims that may result in flood
in the state which the mediation is to occur and the mediator
damage claims under the NFIP. Adjusters representing the
has at least two years of practical experience. All statements
NFIP shall coordinate their activities with state insurance
made and documents produced in the mediation process shall
regulators and representatives.
be deemed privileged and confidential settlement negotiations
made in anticipation of litigation.
Considerations in
No comparable provision.
Requires an examination of all years within the program
Determining Chargeable
including catastrophic loss years to determine the appropriate
Premium Rates
“average historical loss year.”

CRS-8
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Reserve Funds
No comparable provision.
Creates a National Flood Insurance Reserve Fund (“Reserve
Fund”) in the Treasury that maintains 1% of the total potential
loss exposure of all outstanding flood insurance policies in
force within the program, or a higher percentage, as the
Director determines to be appropriate. Establishes a
mechanism in order to obtain the target 1% ratio within 10
years. In FY2007 the reserve ratio is 10%; in 2008 it is 20%,
increasing 10% each year through 2015 when the reserve ratio
is to be 90% . Director has discretion to both suspend the
attainment of the required reserve ratio in any fiscal year or
request additional appropriations from Congress if he/she
determines an increase in the amount of aggregate annual
insurance premiums to be collected for any fiscal year would
adversely affect the financial condition of the Reserve Fund.
Extension of Pilot
Extends the pilot program for mitigation of severe repetitive
No comparable provision.
Program for Mitigation of
loss properties through September 30, 2011.
Severe Repetitive Loss
Properties
Notice of Flood Insurance
Amends Section 5(b) of the Real Estate Settlement Procedures
Same.
Availability Under
Act of 1974 (RESPA) to create a new notice provision to
RESPA
ensure that individuals who purchase land in areas of elevated
flood risk (whether or not the property is located in a special
flood hazard area) are made aware of the risk and given an
opportunity to purchase flood insurance.
Escrow of Flood
Amends Section 5(b) of the RESPA to add new statement in
Requires that each federal entity for lending regulation, in
Insurance Payments
RESPA good faith estimate that the escrow of flood insurance
consultation with the Federal Financial Institutions
payments is required for many loans under the 1973 act, and
Examination Council, promulgate regulations to direct
may be a convenient and available option with respect to other
policyholders to pay flood insurance premiums directly to the
loans.
mortgage lender for the duration of the loan when they make
their monthly mortgage payments. The lender must place flood
insurance payments into an escrow account on behalf of the
borrower. After the mortgage loan has been paid, the lender
must provide notice to the mortgagee that insurance coverage
may cease with the final mortgage payment.

CRS-9
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Technical Mapping
Reestablishes the Technical Mapping Advisory Council which
Establishes an 11-member Technical Mapping Advisory
Advisory Council
will now include representatives from the Army Corps of
Council. Members are appointed by the director and they will
Engineers, local and regional flood and stormwater agencies,
represent the following agencies or organizations: Under
state geographic information coordinators, and flood insurance
Secretary of Commerce for Oceans and Atmosphere, surveying
servicing companies. Members of the Council, appointed by
and mapping professional association; professional engineering
the Director of FEMA, will make recommendations to the
associations; flood hazard determination firms; United States
director for improvements to the flood map modernization
Geologic Survey; Office of Management and Budget; state
program, maintain an inventory of updated flood hazard maps
geologic survey programs; state national flood insurance
and information, and submit an annual report to the director
coordination offices; Army Corps of Engineers; Secretary of
outlining their activities and recommendations.
the Interior; and, the Secretary of Agriculture. Duties of the
council include making recommendations to the director on
cost-effective way to improve the quality, ease of use, and
distribution of flood insurance rate maps (FIRMs), developing
mapping standards and guidelines for FIRMs, and submitting
an annual report on the council’s activities and
recommendations to the director.
Updating Flood-Risk
Requires the director to conduct, and certify after its
Requires the director to issue final regulations establishing a
Zones
completion, a review of all floodplain areas and flood-risk
revised definition of special flood hazards areas that now
zones currently being used in the NFIP. A description of the
includes both areas previously identified as having special
review and updating process shall be included in the director’s
flood hazards, and areas of residual risk behind levees, dams,
annual report to Congress.
and other man-made structures.
Post-Disaster Advisory
Allows the director to expedite the notification and publication
No comparable provision.
Flood Elevations
procedures for a community to adopt post-disaster advisory
flood elevations for local land use and control measures. All
rights to submit information and to appeal the director’s
findings are preserved.

CRS-10
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
National Flood Mapping
Requires the director to establish a program under which he/she
Requires the director, in coordination with the Technical
Program
shall review, update, and maintain flood insurance rate maps.
Mapping Advisory Council, to establish a program to identify,
Each map shall include a depiction of the 500-year floodplain,
review, update, maintain, and publish FIRMs in areas located
as well as residual risk areas behind levees, dams, and
within the 500-year floodplain and areas of residual risk behind
floodwalls. Updated maps may also include relevant
levees, dams, and other man-made structures, as well as
information on coastal inundation, stream flows, watershed
updating the existing flood-risk zones in the 100-year flooplain.
characteristics, and topography provided by the Army Corps of
Directs the NFIP to use the newest technology on hydrologic
Engineers and the National Oceanic and Atmospheric
and hydraulic modeling, and the most accurate flood elevation
Administration (NOAA).
data in creating and updating the flood maps. In updating and
Director shall: (1) establish standards to ensure the adequacy
maintaining maps, the director shall establish standards to
and consistency of maps and methods of data collection and
ensure that maps are adequate for flood risk determinations and
analysis; (2) give priority to updating maps of coastal areas
used by state and local governments. Authorizes the
affected by Hurricanes Katrina and Rita in order to provide
appropriation of $400 million for each fiscal years 2007
guidance with respect to hurricane recovery efforts; and (3) in
through 2012.
consultation with the Technical Mapping Advisory Council,
submit a report to Congress that describes the flood map
modernization activities by June 30 of each year. Authorizes
the appropriation of $300 million for fiscal years 2007 through
2012.
Non-Mandatory
No comparable provision.
It is not mandatory for individuals who reside in the 500-year
Participation in 500-Year
floodplain to obtain flood insurance. Both the director and
Floodplain
federal/state entities for lending regulation, after consultation
with the Federal Financial Institutions Examination Council,
shall, by regulation, require regulated lending institutions to
notify the purchaser and the servicer of the mortgage loan that
such property is located in a 500-year flooplain. Mortgage
lenders must also give notice to mortgagees that they reside
within a 500-year floodplain. Civil penalties are provided for
failure to comply with the notice requirements.

CRS-11
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Reiteration of FEMA
Directs FEMA under the Bunning-Bereuter-Blumenauer Flood
Directs FEMA to: (1) establish an appeals process through
Responsibility Under
Insurance Reform Act of 2004 (“Reform Act of 2004”) to: (1)
which policyholder may appeal the claims, proofs of loss, and
2004 Reform Act
establish an appeals process that policyholders can use to
loss estimates relating to NFIP claims decisions; (2) continue to
resolve decisions of the director relating to claims, proofs of
work with the insurance industry, state insurance regulators,
loss, and loss estimates; and (2) continue to work with the
and other interested parties to implement previously developed
insurance industry, state insurance regulators, and other
minimum training and education standards for insurance agents
interested parties to implement previously developed minimum
who sell flood insurance policies. Requires the director to
training and education standards for insurance agents who sell
submit a report to Congress not later than three months after
flood insurance policies. Requires a report to Congress within
enactment of the act detailing the progress made towards
six months describing FEMA’s implementation of provisions in
implementing each provision of the Reform Act of 2004.
the Reform Act of 2004.
Requires the director to submit a report to Congress every 30
days detailing the progress made on implementing the appeals
process.
Removal of Limitations on
No comparable provision.
States are no longer prohibited from contributing more than
State Contributions for
50% of their own funds to ensure that their maps are undated.
updating flood maps
Testing New Flood-
No comparable provision.
Requires the NFIP to allow testing of any new type of flood
Proofing Technologies
proofing technology to determine if the new advancement
complies with NFIP standards.
National Levee Inventory
Requires the Director, in consultation with the Secretary of the
No comparable provision.
Army, to maintain and publish an inventory of levees in the
United States.
Report on Financial
Requires FEMA to submit semiannual reports to Congress on
Requires the director to submit annual reports to Congress on
Status of the Program
the financial status of the program, including financial status of
the operations, activities, budgets, receipts, and expenditures of
the National Flood Insurance Fund (NFIF) and current and
the NFIP. Each report shall be submitted not later than three
projected levels of claims, premium receipts, expenses, and
months following the end of each fiscal year.
borrowing under the program.
Study of Pre-FIRM
Requires the Government Accountability Office (GAO) to
Requires the Secretary of the Treasury to conduct a study and
Properties
conduct study of the number and cost of pre-FIRM properties,
submit a report to Congress on the remaining pre-FIRM
the anticipated rate at which such properties will cease to be
structures that are explicitly receiving discounted premium
covered, and the effects of implementing the Bunning-
rates. The study must include the historical basis for the
Bereuter-Blumenauer Flood Insurance Reform Act of 2004
receipts of such subsidy and whether such subsidy has outlasted
(“Reform Act of 2004”) on coverage of pre-FIRM properties
its purpose.
under the program.

CRS-12
H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
GAO Study on Write Your
No comparable provision.
Requires GAO to conduct a study and submit report to
Own (WYO) Policies
Congress on the fees and expenses paid to WYO insurers, NFIP
contractors, and FEMA.
GAO Audit of NFIP
No comparable provision.
Requires GAO to audit the financial transactions of the NFIP
Relating to Hurricane
relating to Hurricane Katrina and other hurricanes of the 2005
Katrina
season.
GAO Report on
No comparable provision.
Requires GAO to conduct a study and submit a report to
Expanding NFIP
Congress on the effects that expanding flood insurance beyond
the current caps (coverage limits) might have on the private
insurance market.
GAO Evaluation of the
No comparable provision.
Requires GAO to submit a report to Congress that analyzes
NFIP
whether the NFIP has fulfilled its purpose, unduly burdened or
benefitted taxpayers, and makes recommendations for
legislative or administrative action as may be necessary to
ensure it operates in a more effective and efficient manner.
GAO Study on Direct
No comparable provision.
Requires GAO to study the effects of allowing individuals from
Purchase in Non-
non-participating communities to purchase flood insurance
Participating
through the NFIP’s direct program.
Communities
Extending Mandatory
Requires GAO to study the regulatory, financial and economic
Requires the Director of FEMA to issue final regulations
Purchase Requirement to
impacts (i.e., costs of home-ownership, actuarial soundness of
establishing a revised definition of special flood hazards areas
Properties Located
program, lender compliance), effectiveness and feasibility of
that includes both areas previously identified as having special
Behind Structural Flood
amending the Flood Disaster Protection Act of 1973 to extend
flood hazards and areas of residual risk behind levees, dams,
Protection Systems
mandatory flood insurance coverage purchase requirements to
and other man-made structures. Residual risk areas could be
properties located in areas that would have special flood
subject to the mandatory purchase requirements but only after
hazards but for the existence of a structural protection system.
the Director completes the mapping of all residual risk areas in
the United States.
Extending Mandatory
Requires a study of the impact, effectiveness, and basis under
Requires that state-chartered lending institutions shall be
Purchase Requirement to
the Constitution of the United States for amending the Flood
subject to NFIP’s mandatory flood insurance purchase
Properties With
Disaster Protection Act of 1973 to extend NFIP’s mandatory
requirement no later than December 31, 2008.
Mortgages Issued By
purchase requirements to properties in special flood hazard
State-Chartered Lending
areas (SFHA) with mortgages issued by state-chartered lending
Institutions
institutions.

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H.R. 4973
Senate Committee Bill
Provision
[as placed on Union Calender, 4/6/06]
[Approved on 5/25/06]
Sponsor
Representative Baker
Senator Shelby
Premium Adjustment
No comparable provision.
Requires that after updating any flood insurance map the
homeowner located on that map could request a premium rate
adjustment to accurately reflect the current risk of flood to such
property.
Replacement Cost
Requires the Director to: (1) issue regulations to clarify the
No comparable provision.
Provision, Forms, and
applicability of replacement cost coverage under the NFIP; (2)
Policy Language
revise any regulations, forms, notices, guidance, and
publications to more clearly describe the meaning of full cost
of repair or replacement under the replacement cost coverage;
and (3) revise the language in flood insurance policies
regarding rating and coverage, such as classification of
buildings, basements, crawl spaces, detached garages,
enclosures below elevated buildings, and replacement cost, to
make it consistent with language used widely in homeowners
policies.
Authorization for Staff
Authorizes to be appropriated such sums as may be necessary
No comparable provision.
Funding
to hire additional staff to carry out the responsibilities of the
director pursuant to this act.
Source: The Congressional Research Service.