FIRM Act

TABLE OF CONTENTS:

Title I: Compliance and Increased Participation

Title II: Flood Insurance Premium Rates and Coverage Amounts

Title III: Revolving Loan Fund for Flood and Erosion Damage

Mitigation Activities and Additional Mitigation Coverage

Title IV: Miscellaneous Provisions

Flood Insurance Risk Management Act of 1994 - Title I: Compliance and Increased Participation - Amends the Flood Disaster Protection Act of 1973 to require the Secretary of Housing and Urban Development (HUD Secretary) to: (1) prohibit any lending institution from making, increasing, extending, or renewing any loan for residential real estate or a mobile home located in a special flood hazards area unless such real estate is covered by flood insurance under the National Flood Insurance Act of 1976 (Flood Insurance Act); and (2) require that any real estate in such an area which is acquired by the Government National Mortgage Association be covered by such flood insurance. Prohibits any other Federal agency lender from making such a loan for appropriate real estate not covered by such flood insurance.

(Sec. 103) Requires residential real estate lenders who normally utilize escrow tax and insurance accounts to establish flood insurance premium escrow accounts for appropriate real estate. Requires Federal lenders, regulated lending institutions (banks, savings and loans, credit unions), and loan servicers to notify borrowers of special flood hazards and of the need to purchase and maintain flood insurance. Requires such entities, after 60 days' notice, to purchase such insurance on behalf of the borrower and charge the borrower for premium costs. Provides for the review of special hazards determinations by the Director of the Federal Emergency Management Agency (FEMA Director). Imposes civil penalties upon lenders who fail to require flood insurance or to provide appropriate borrower notification of the need for such insurance. Allows for other actions against regulated lending institutions in order to remedy a pattern of noncompliance with such requirements.

(Sec. 106) Requires the transferor of a loan to notify the transferee of a special flood hazards area determination with respect to the real estate that is the basis of such loan. Provides exceptions. Requires similar notification on loans transferred by the Federal Deposit Insurance Corporation and the Resolution Trust Corporation.

(Sec. 107) Allows the charging of fees for determining the applicability of flood insurance purchase requirements.

(Sec. 109) Requires the FEMA Director to develop a standard flood hazard determination form for use in connection with loans for residential properties located in special flood hazards areas and in which flood insurance is available.

(Sec. 110) Amends the Federal Deposit Insurance Act and the Federal Credit Union Act to require regulated lending institutions to conduct examinations and report to the Congress with respect to compliance with the national flood insurance program (program). Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to require the FEMA Director to annually determine whether enterprises under such Act are in compliance with requirements of the program.

(Sec. 111) Amends the Federal Financial Institutions Examination Council Act of 1978 to direct the Financial Examinations Council to coordinate with Federal entities for lending regulation and the HUD Secretary to develop uniform lender standards.

Title II: Flood Insurance Premium Rates and Coverage Amounts - Amends the Flood Insurance Act to establish a preference for charging actuarial rates, with exceptions, in the determination of flood insurance premiums.

(Sec. 202) Provides for a community rating system and premium rate incentives for community floodplain management, allowing area-wide premium adjustments for adoption of rating system goals or participation in flood or erosion control projects and activities. Provides funding. Requires biennial reports from the FEMA Director to the Congress concerning such program.

(Sec. 203) Requires the FEMA Director to carry out a community flood insurance premium-pooling program in which premiums in an area are collected by an appropriate public body or agency and paid through such body or agency directly to the FEMA Director.

(Sec. 204) Increases flood insurance coverage amounts for nonresidential, single family, and multifamily structures.

(Sec. 205) Requires the FEMA Director to conduct and report to the Congress on a study of the economic effects that would result from increasing to actuarially-based rates the national flood insurance premium rates for pre-FIRM structures (structures not constructed or substantially improved after the later of December 31, 1974, or the effective date of the initial rate map published by the Director under the Flood Insurance Act).

(Sec. 206) Directs the Comptroller General to submit to the Congress a report assessing the economic impact of the denial of flood insurance and the establisment of actuarial rates on communities likely to be identified as having erosion hazard areas.

Title III: Revolving Loan Fund for Flood and Erosion Damage Mitigation Activities and Additional Mitigation Coverage - Amends the Flood Insurance Act to establish in the Treasury the Flood and Erosion Risk Management Fund to be used for making loans for flood damage and erosion mitigation activities. Provides terms and conditions, including an initial $20 million payment into the Fund from the National Flood Insurance Fund. Authorizes the FEMA Director to assess one-time premium surcharges with respect to properties covered by national flood insurance, such amounts to be deposited into the Fund and used for flood risk management purposes.

(Sec. 303) Requires insurance made available under the Flood Insurance Act to include coverage for land use and control measures (mitigation activities). Requires the FEMA Director to assess appropriate surcharges for such coverage and deposit amounts received into the National Flood Insurance Fund.

Title IV: Miscellaneous Provisions - Amends the Housing and Community Development Act of 1987 to extend through FY 1999 an annual ten percent increase limit on the rates charged for flood insurance premiums under the Flood Insurance Act. Amends the Flood Insurance Act to: (1) extend through FY 1999 the national flood insurance program and provisions concerning the emergency implementation of the program; (2) terminate (with transition and savings provisions) the erosion-threatened structures program; (3) define the chargeable rate and limit the premium increases with respect to any repetitively damaged structure; (4) require the FEMA Director to establish a schedule of and charge penalties for repetitive claims for losses covered by flood insurance; and (5) permit flood insurance private sector participation without regard to provisions of the Federal Advisory Committee Act.

(Sec. 406) Authorizes appropriations.