State Flood Mitigation Revolving Fund Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2192 To amend the National Flood Insurance Act of 1968 to allow the Adminis- trator of the Federal Emergency Management Agency to provide capital- ization grants to States to establish revolving funds to provide funding assistance to reduce flood risks, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 18, 2019 Mr. REED (for himself, Mr. KENNEDY, and Mr. MENENDEZ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the National Flood Insurance Act of 1968 to allow the Administrator of the Federal Emergency Man- agement Agency to provide capitalization grants to States to establish revolving funds to provide funding assistance to reduce flood risks, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘State Flood Mitigation 4 Revolving Fund Act of 2019’’. 5 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 2192 IS SEC. 2. STATE REVOLVING LOAN FUNDS FOR FLOOD MITI- 1 GATION. 2 (a) IN GENERAL.—Chapter I of the National Flood 3 Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amend- 4 ed by adding at the end the following: 5 ‘‘SEC. 1326. STATE REVOLVING LOAN FUNDS FOR FLOOD 6 MITIGATION. 7 ‘‘(a) DEFINITIONS.—In this section: 8 ‘‘(1) COMMUNITY RATING SYSTEM.—The term 9 ‘Community Rating System’ means the community 10 rating system program carried out under section 11 1315(b). 12 ‘‘(2) ELIGIBLE STATE.—The term ‘eligible 13 State’ means a State, the District of Columbia, and 14 the Commonwealth of Puerto Rico. 15 ‘‘(3) INSULAR AREA.—The term ‘insular area’ 16 means— 17 ‘‘(A) Guam; 18 ‘‘(B) American Samoa; 19 ‘‘(C) the Commonwealth of the Northern 20 Mariana Islands; 21 ‘‘(D) the Federated States of Micronesia; 22 ‘‘(E) the Republic of the Marshall Islands; 23 ‘‘(F) the Republic of Palau; and 24 ‘‘(G) the United States Virgin Islands. 25 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 2192 IS ‘‘(4) INTENDED USE PLAN.—The term ‘in- 1 tended use plan’ means a plan prepared under sub- 2 section (d)(1). 3 ‘‘(5) LOW-INCOME GEOGRAPHIC AREA.—The 4 term ‘low-income geographic area’ means an area 5 described in paragraph (1) or (2) of section 301(a) 6 of the Public Works and Economic Development Act 7 of 1965 (42 U.S.C. 3161(a)). 8 ‘‘(6) LOW-INCOME HOMEOWNER.—The term 9 ‘low-income homeowner’ means the owner of a pri- 10 mary residence, the household income of which in a 11 taxable year is not more than 80 percent of the me- 12 dian income for the area in which the residence is 13 located. 14 ‘‘(7) PARTICIPATING STATE.—The term ‘par- 15 ticipating State’ means an eligible State that— 16 ‘‘(A) has entered into an agreement under 17 subsection (b)(1); and 18 ‘‘(B) agrees to comply with the require- 19 ments of this section. 20 ‘‘(8) PRE-FIRM BUILDING.—The term ‘pre- 21 FIRM building’ means a building for which con- 22 struction or substantial improvement occurred before 23 the effective date of the initial Flood Insurance Rate 24 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 2192 IS Map published by the Administrator under section 1 1360 for the area in which the building is located. 2 ‘‘(9) REPETITIVE LOSS STRUCTURE.—The term 3 ‘repetitive loss structure’ has the meaning given the 4 term in section 1370(a). 5 ‘‘(10) SEVERE REPETITIVE LOSS PROPERTY.— 6 The term ‘severe repetitive loss property’ has the 7 meaning given the term in section 1307(h). 8 ‘‘(11) STATE LOAN FUND.—The term ‘State 9 loan fund’ means a flood mitigation assistance re- 10 volving loan fund established by an eligible State 11 under this section. 12 ‘‘(12) TRIBAL GOVERNMENT.—The term ‘tribal 13 government’ means the recognized government of an 14 Indian tribe, or the governing body of an Alaska Na- 15 tive regional or village corporation, that has been de- 16 termined eligible to receive services from the Bureau 17 of Indian Affairs. 18 ‘‘(b) GENERAL AUTHORITY.— 19 ‘‘(1) IN GENERAL.—The Administrator may 20 enter into an agreement with an eligible State to 21 provide a capitalization grant for the eligible State 22 to establish a revolving fund that will provide fund- 23 ing assistance to help homeowners, businesses, non- 24 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 2192 IS profit organizations, and communities reduce flood 1 risk in order to decrease— 2 ‘‘(A) the loss of life and property; 3 ‘‘(B) the cost of flood insurance; and 4 ‘‘(C) Federal disaster payments. 5 ‘‘(2) TIMING OF DEPOSIT AND AGREEMENTS 6 FOR DISTRIBUTION OF FUNDS.— 7 ‘‘(A) IN GENERAL.—Not later than the 8 last day of the fiscal year following the fiscal 9 year in which a capitalization grant is made to 10 a participating State under paragraph (1), the 11 participating State shall— 12 ‘‘(i) deposit the grant in the State 13 loan fund of the State; and 14 ‘‘(ii) enter into 1 or more binding 15 agreements that provide for the State to 16 distribute the grant funds for purposes au- 17 thorized under subsection (c) such that— 18 ‘‘(I) in the case of the initial 19 grant made to a State under this sec- 20 tion, not less than 75 percent of the 21 amount of the grant shall be distrib- 22 uted before the end of the 2-year pe- 23 riod beginning on the date on which 24 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 2192 IS the funds are deposited in the State 1 loan fund of the State; and 2 ‘‘(II) in the case of any subse- 3 quent grant made to a State under 4 this section, not less than 90 percent 5 of the amount of the grant shall be 6 distributed before the end of the 1- 7 year period beginning on the date on 8 which the funds are deposited in the 9 State loan fund of the State. 10 ‘‘(B) NONCOMPLIANCE.—Except as pro- 11 vided in subparagraph (C), if a participating 12 State does not comply with subparagraph (A) 13 with respect to a grant, the Administrator shall 14 reallocate the grant in accordance with para- 15 graph (3)(B). 16 ‘‘(C) EXCEPTION.—The Administrator 17 may not reallocate any funds under subpara- 18 graph (B) to a participating State that violated 19 subparagraph (A) with respect to a grant made 20 during the same fiscal year in which the funds 21 to be reallocated were originally made available. 22 ‘‘(3) ALLOCATION.— 23 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 2192 IS ‘‘(A) IN GENERAL.—The Administrator 1 shall allocate amounts made available to carry 2 out this section to participating States— 3 ‘‘(i) for the participating States to de- 4 posit in the State loan funds established by 5 the participating States; and 6 ‘‘(ii) except as provided in paragraph 7 (6), in accordance with the requirements 8 described in subparagraph (B). 9 ‘‘(B) REQUIREMENTS.—The requirements 10 described in this subparagraph are as follows: 11 ‘‘(i) Fifty percent of the total amount 12 made available under subparagraph (A) 13 shall be allocated so that each partici- 14 pating State receives the percentage 15 amount that is obtained by dividing the 16 number of properties that were insured 17 under the national flood insurance pro- 18 gram in that State in the fiscal year pre- 19 ceding the fiscal year in which the amount 20 is allocated by the total number of prop- 21 erties that were insured under the national 22 flood insurance program in the fiscal year 23 preceding the fiscal year in which the 24 amount is allocated. 25 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 2192 IS ‘‘(ii) Fifty percent of the total amount 1 made available under subparagraph (A) 2 shall be allocated so that each partici- 3 pating State receives a percentage of funds 4 that is equal to the product obtained under 5 clause (iii)(IV) with respect to that partici- 6 pating State after following the procedures 7 described in clause (iii). 8 ‘‘(iii) The procedures described in this 9 clause are as follows: 10 ‘‘(I) Divide the total amount col- 11 lected in premiums for properties in- 12 sured under the national flood insur- 13 ance program in each participating 14 State during the previous fiscal year 15 by the number of properties insured 16 under the national flood insurance 17 program in that State for that fiscal 18 year. 19 ‘‘(II) Add together each quotient 20 obtained under subclause (I). 21 ‘‘(III) For each participating 22 State, divide the quotient obtained 23 under subclause (I) with respect to 24 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 2192 IS that State by the sum obtained under 1 subclause (II). 2 ‘‘(IV) For each participating 3 State, multiply the amount that is 50 4 percent of the total amount made 5 available under subparagraph (A) by 6 the quotient obtained under subclause 7 (III). 8 ‘‘(iv) Except as provided in paragraph 9 (5), in a fiscal year— 10 ‘‘(I) a participating State may 11 not receive more than 15 percent of 12 the total amount that is made avail- 13 able under subparagraph (A) in that 14 fiscal year; and 15 ‘‘(II) if a participating State, 16 based on the requirements under 17 clauses (i) through (iii), would, but 18 for the limitation under subclause (I) 19 of this clause, receive an amount that 20 is greater than the amount that the 21 State is authorized to receive under 22 that subclause, the difference between 23 the authorized amount and the 24 amount otherwise due to the State 25 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 2192 IS under clauses (i) through (iii) shall be 1 allocated to other participating 2 States— 3 ‘‘(aa) that, in that fiscal 4 year, have not received an 5 amount under subparagraph (A) 6 that is more than the authorized 7 amount under subclause (I) of 8 this clause; and 9 ‘‘(bb) by using the require- 10 ments under clauses (i) through 11 (iii), except that a participating 12 State may receive an allocation 13 under this subclause only if the 14 allocation does not result in the 15 State receiving a total amount 16 for the fiscal year under subpara- 17 graph (A) that is greater than 18 the authorized amount under 19 subclause (I). 20 ‘‘(4) NO REVOLVING FUND REQUIRED.— 21 ‘‘(A) IN GENERAL.—Notwithstanding any 22 other provision of this section, and subject to 23 subparagraph (B), a participating State that 24 receives less than $4,000,000 under paragraph 25 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 2192 IS (3)(B) in a fiscal year may distribute the funds 1 directly in the form of grants or technical as- 2 sistance for a purpose described in subsection 3 (c)(2), without regard to whether the State has 4 established a State loan fund. 5 ‘‘(B) STATE MATCHING.—A participating 6 State that exercises the authority under sub- 7 paragraph (A) in a fiscal year shall provide 8 matching funds from non-Federal sources in an 9 amount that is equal to 25 percent of the 10 amount that the State receives under paragraph 11 (3)(B) in that fiscal year for purposes described 12 in subparagraph (A). 13 ‘‘(5) ALLOCATION OF REMAINING FUNDS.— 14 After allocating amounts made available to carry out 15 this section for a fiscal year in accordance with 16 paragraph (3), the Administrator shall allocate any 17 remaining amounts made available for that fiscal 18 year to participating States, using the procedures 19 described in clauses (i) through (iii) of paragraph 20 (3)(B). 21 ‘‘(6) RESERVATION OF FUNDS.—The Adminis- 22 trator shall reserve not more than 1.5 percent of the 23 amount made available to carry out this section in 24 a fiscal year— 25 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 2192 IS ‘‘(A) for administrative costs incurred in 1 carrying out this section; 2 ‘‘(B) to provide technical assistance to re- 3 cipients of grants under this section; and 4 ‘‘(C) to enter into grant agreements with 5 tribal governments and insular areas, with the 6 grant funds to be distributed— 7 ‘‘(i) according to criteria established 8 by the Administrator; and 9 ‘‘(ii) for a purpose described in sub- 10 section (c)(2). 11 ‘‘(c) USE OF FUNDS.— 12 ‘‘(1) IN GENERAL.—Amounts deposited in a 13 State loan fund, including repayments of loans made 14 from the fund and interest earned on the amounts 15 in the fund, shall be used— 16 ‘‘(A) consistent with paragraph (2) and 17 subsection (g), to provide financial assistance 18 for— 19 ‘‘(i) homeowners, businesses, and non- 20 profit organizations that are eligible to 21 participate in the national flood insurance 22 program; and 23 VerDate Sep 11 2014 03:07 Jul 26, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2192.IS S2192 pamtmann on DSKBFK8HB2PROD with BILLS 13 •S 2192 IS ‘‘(ii) any local government that par- 1 ticipates in the national flood insurance 2 program; 3 ‘‘(B) as a source of revenue and security 4 for leveraged loans, the proceeds of which shall 5 be deposited in the State loan fund; or 6 ‘‘(C) for the sale of bonds as security for 7 payment of the principal and interest on rev- 8 enue or general obligation bonds issued by the 9 participating State to provide matching funds 10 under subsection (f), if the proceeds from the 11 sale of the bonds are deposited in the State 12 loan fund. 13 ‘‘(2) PURPOSES.—A recipient of financial as- 14 sistance provided through amounts from a State 15 loan fund— 16 ‘‘(A) shall use the amounts to reduce— 17 ‘‘(i) flood risk; or 18 ‘‘(ii) potential claims for losses cov- 19 ered under the national flood insurance 20 program; 21 ‘‘(B) shall use the amounts in a cost-effec- 22 tive manner under requirements established by 23 the State, which may require a [Text truncated for display. 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