42 U.S.C. § 4102a : US Code - Section 4102A: Pilot program for mitigation of severe repetitive loss properties

Search 42 U.S.C. § 4102a : US Code - Section 4102A: 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) of this
section) 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 chapter; 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 chapter, with
the amount of each such claim exceeding $5,000, and with the
cumulative amount of such claims payments exceeding $20,000;
or
(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) of this section.
(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
5165 of this title 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) of this section to carry out eligible activities,
the Director shall notify the owners of a severe 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) of this section, 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) of this section as soon as practicable.
(3) Consultation
In determining for which eligible activities under subsection
(c) of this section 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 -
(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) of this
section, 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) of
this section 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 5170c(b)(2)(B) of this title 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 5170c(b) of this title.
(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 chapter;
(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) of this section 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
4015 of this title, 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 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 4015 of
this title, 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) of this section with respect to such
property and a claim payment exceeding $1,500 is made under flood
insurance coverage under this chapter 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 4014(a)(1) of
this title.
(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 chapter for the property.
(5) Notice of continued offer
Upon each renewal or modification of any flood insurance
coverage under this chapter for a severe repetitive loss
property, the Director shall notify the owner that the offer made
pursuant to subsection (c) of this section 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.
(iv) The flooding that resulted in the flood insurance
claims described in subsection (b)(2) of this section 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) of this section 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,(!1) 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) of this section; 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
(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 June 30, 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 chapter 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
chapter 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 chapter to such policyholder for the
property.
(j) Rules
(1) In general
The Director shall, by rule -
(A) subject to subsection (f)(4) of this section, 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 June 30, 2004, 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 4017(a)(8) of this title, 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 any other provision of this
chapter, amounts made available pursuant to this subsection shall
not be subject to offsetting collections through premium rates
for flood insurance coverage under this chapter.
(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.