Summary: H.R.1856 — 104th Congress (1995-1996)All Information (Except Text)

There is one summary for H.R.1856. Bill summaries are authored by CRS.

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Introduced in House (06/15/1995)

Natural Disaster Protection Partnership Act of 1995 - Amends the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Act) to: (1) require a State to pay or agree to pay at least five dollars per resident, as determined by the latest official census, before such State or local government receives Federal assistance for the repair, restoration, reconstruction, or replacement of public facilities damaged or destroyed by a major disaster in the State; and (2) revise the formula used to determine the Federal share of such assistance as well as the Federal share for debris and wreckage removal from publicly and privately owned lands resulting from such disaster. Allows an increase of such assistance only upon the enactment of a joint resolution not designated as an emergency under provisions of the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act).

(Sec. 5) Adds provisions concerning disaster mitigation. Requires the Director of the Federal Emergency Management Agency to establish and carry out natural disaster hazard mitigation (mitigation) programs that support natural disaster research, technology, and education.

Gives the effect of law to a specified executive order relating to earthquake design and construction standards for federally leased, assisted, or regulated buildings.

Requires the Director to enter into an arrangement with the National Academy of Sciences to study and report to the Congress on the feasibility of establishing: (1) national minimum building construction standards for residential and commercial building construction; and (2) standards for the training and licensing of home inspectors and for using such inspections as a means of promoting mitigation for residential property.

Requires the Director to define which States should be classified as natural disaster-prone for purposes of the Act.

Requires each natural disaster-prone State to either: (1) adopt multihazard building and safety codes for all new and substantially modified building construction in that State; or (2) certify that the State's local communities have adopted and are enforcing building codes which meet the appropriate minimum mitigation requirements of that State. Requires each State designated as flood-prone to either adopt relevant flood protection standards or certify that its flood-prone local communities are in compliance with appropriate State flood protection standards. Requires each natural disaster-prone State to either develop a multihazard mitigation plan or designate an existing plan which includes specified compliance and response requirements. Outlines provisions concerning State compliance with the establishment, adoption, and implementation of appropriate mitigation plans. Provides penalties for noncompliance.

Requires the Director, after crediting premiums from the Natural Disaster Insurance Corporation (established under this Act), to allocate funds from a Mitigation Account (established under this Act) to States which comply with all mitigation requirements under this Act. Provides an allocation formula. Requires such funds to be used to support mitigation activities, especially those necessary to bring a State into compliance with building and safety code requirements enumerated under this Act.

Requires audits of fund uses. Exempts a State, under specified conditions, from a particular mitigation requirement if it receives inadequate funds from the Account to cover the costs of complying with such requirement.

Encourages each private insurer that participates in the Natural Disaster Insurance Corporation to take mitigation measures into account in setting rates and deductibles for its property insurance.

Establishes the Natural Disaster Insurance Corporation as a not-for-profit membership corporation to provide primary insurance coverages and reinsurance coverage for hurricanes, earthquakes, volcanic eruptions, and tsunamis. Requires the Corporation's Board of Directors (Board) to: (1) develop a plan of operation describing the Corporation's administration and the provision of the insurance coverages it provides; and (2) develop and adjust, when necessary, actuarially sound rates for such coverages.

Establishes an independent Natural Disaster Insurance Board of Actuaries (Independent Board) to review and approve such plan and rates. Requires the Board to file with each State insurance regulator information copies of the initial material and future revisions to its insurance rates, terms, or conditions. Requires the Corporation to establish and maintain a: (1) primary insurance coverage trust account to pay qualifying claims and loss adjustments expenses to private insurers acting as service providers of the primary insurance coverages; and (2) reinsurance coverage trust account to pay qualifying claims to private insurers which purchased such coverage. Outlines provisions concerning the Corporation's use of funds from other accounts and funds to pay for losses in excess of trust account funds or funds raised by issuing obligations in the private market (requiring repayment of funds borrowed from such accounts or funds). Requires the trust accounts to be kept separate. Prohibits: (1) the borrowing of monies between such accounts; and (2) the authorization or appropriation of Federal funds for Corporation activities.

Requires the Comptroller General to audit and report to the Congress on Corporation and Independent Board activities.

Requires the Corporation to: (1) issue primary insurance coverages that insure against physical damages and losses to residential property, including debris removal, additional living expenses incurred as a result of direct damage to such property, and ordinance and law coverages, resulting from the natural disasters enumerated in this Act that meet specified terms and conditions; and (2) make, under certain conditions, excess reinsurance coverage available to private insurers and State insurance pools for residential losses (including quota-share amounts retained by the private insurers under this Act not already insured by the Corporation under the primary insurance coverage policies) and commercial losses that are proximately caused by specified natural disaster perils.

Prohibits making or renewing any federally-related mortgage loan secured by residential property located in an earthquake, volcanic eruption, tsunami, or hurricane-prone State unless the property is covered by: (1) primary insurance coverages; or (2) coverage issued by a private insurer which has equivalent terms, conditions, and rates as such coverages for seismic perils and that meets such terms and conditions as those required for the hurricane peril. Provides an escrow requirement with respect to insurance premiums for such coverage. Outlines requirements that must be met by residential property owners in natural disaster-prone States before the owners can receive any financial assistance under the Act or any similar Federal disaster assistance.

Requires the Director and the Corporation to jointly report to the Congress on any additional sanctions or other measures deemed necessary to assure that policyholders purchase Federal flood insurance pursuant to the National Flood Insurance Act of 1968.

Requires private insurers which exclude coverage for physical damage caused by flooding to include in the contract a specified warning statement to that effect (or an appropriate alternative warning statement).

Establishes in the Treasury the Natural Disaster Protection Fund. Establishes within the Fund a separate Private Loss Account, Public Loss Account, and Mitigation Account. Requires the three accounts to be kept separate and prohibits the borrowing of monies between them.

Requires the Private Loss Account to provide direct Federal loans to cover shortfalls in the Corporation's primary insurance and reinsurance accounts.

Requires the Public Loss Account to: (1) retain reserve funds sufficient to cover the anticipated costs resulting from natural disasters up to the annual ten-year historical average of disaster relief provided by the Director; and (2) provide grants to States for the repair or restoration of critical facilities and lifelines, public facilities, and infrastructure damaged or destroyed by natural disasters and for pre-natural disaster mitigation. Allows the Federal share of such grants to be increased only upon the enactment of a joint resolution not designated as an emergency under provisions of the Balanced Budget and Emergency Deficit Control Act of 1985.

Requires: (1) the Mitigation Account to provide funds to States for appropriate mitigation efforts described in this Act; and (2) the Corporation to pay a specified percentage of the annual net premiums collected for the primary insurance coverages and the reinsurance coverages for mitigation purposes.

Provides for appropriate transfers and credits to the Public Loss Account and the Mitigation Account. Authorizes appropriations to such Accounts.