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 elected Governor of North Carolina, in the formation of the constitution of which state he had a considerable share. He was taken prisoner by the Royalists in September of that year. After a detention of four months, he broke his parole, reached home, and resumed his office. He died at Hillsborough, North Carolina, 2nd December 1783, aged about 36.

Burnyeat, John, was born in Cumberland in 1631. He was one of George Fox's earliest converts and coadjutors, suffered severe imprisonments, and travelled as a preacher in America and elsewhere. He settled in Dublin in 1682. Some time afterwards he would have left the country, but that he thought it his duty to remain and bear his share in the troublous times he foresaw were at hand. He was one of those mainly instrumental in introducing the doctrines of the Society of Friends into Ireland. He died at Kilconner, in the County of Carlow, 11th July 1690, aged about 59.

Burrowes, Peter, an eminent lawyer, was born at Portarlington in 1753. He entered Trinity College in 1774, and distinguished himself not only in his studies, but by his fire and eloquence in the debates of the Historical Society. In 1784 we find him a student of the Middle Temple, writing a pamphlet asserting the right of the Catholics of Ireland to parliamentary suffrage. This gained him the friendship of Flood and others of the great men of the day. Next year he was called to the Bar, where he soon took a prominent place. Among the early events of his professional career, was a duel at Kilkenny in 1794 with the Hon. Somerset Butler. His life was saved by the bullet of his antagonist flattening on some coppers in his waistcoat pocket. He ever afterwards regretted his cowardice in not refusing to fight. The antagonists became firm friends in after life. In 1790 he formed a political club, with Tone and others; and letters occasionally passed between him and Tone, who refers to Burrowes in his Memoirs as "The Czar." Although he did not share the more advanced views of the United Irishmen, such friendships impeded his promotion in life. His brother, a clergyman, residing in the County of Wexford, was murdered in the Insurrection of 1798; this, however, in no degree lessened Burrowes' detestation of the proposed measure of Union, and he was one of the fourteen King's Counsel who attended the Bar meeting in Dublin to protest against it, on 9th December 1798. In 1799 he was elected Member for Enniscorthy; and during the few remaining months of the Irish Parliament, was one of the most unwearied opponents of the Union; his speeches on the subject are models of clear and forcible reasoning. He joined in subscribing to the £100,000 fund raised for the counter-bribing of Members. An intimate friend of the Emmet family, he was Robert's counsel in 1803. Although receiving but little government patronage, his further progress at the Bar was rapid. At times his earnings reached £7,000 a year. He was trusted by all parties. He was a consistent supporter of measures for Catholic relief. In 1811 he successfully defended the Catholic Delegates against the Government of the day. Ten years afterwards Mr. Borrowes retired to the comparative repose of a judgeship in the Insolvent Debtors Court. In 1841 he went to London to consult an oculist regarding his sight. He died there in the same year, aged 88; his remains were interred in Kensal-green Cemetery. Many anecdotes are told of his activity and endurance in early life, such as his walking from Dublin to Portarlington, forty miles, in one day, and dancing all next night at a ball.

Bushe, Charles Kendal, Chief-Justice of the King's Bench, son of Rev. Thomas Bushe, was born at Kilmurry, County of Tipperary, in 1767. In 1782 he entered Trinity College, where he was noted for classical scholarship, and for his eloquence at the Historical Society. "He spoke with the lips of an angel," according to Grattan. On coming of age he secured the payment of his father's heavy debts. His success at the Bar was not rapid. Entering Parliament he opposed the Union. He is said to have expressed to his dying day a continuance of his convictions against that measure. In 1805 he was appointed Solicitor-General, and in 1822 Chief-Justice of the King's Bench. "In retiring from the Bench, which he did 'while his eye was not dim, nor his natural force abated,' though at the age of seventy-four or seventy-five, he probably contemplated passing a long sabbath of comparative rest;" but his health began to fail from some excitement consequent on the circumstances of his retirement, and a slight surgical operation being followed by erysipelas, he died, 10th July 1843, aged about 76. His remains were interred at Mount Jerome. "To law students we know of no books of the same value as the series of reports of judgments of the Court of King's Bench in Ireland during the period in which Bushe presided." He is described by Barrington as "Incorruptible; as nearly devoid of private or public enemies as any man; endowed with superior talents; his eloquence was of the purest kind." His 51


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[82 STAT.

DEFINITIONS

Ante. p. 560.

SEC. 1203. As used in this title, unless the context otherwise requires— (1) The term "Commissioner" means the Commissioner of the District of Columbia or his designated agent. (2) The term "basic property insurance" means (1) insurance against direct loss to property caused by perils as defined and limited in the standard fire policy and extended coverage endorsement thereon, as approved by the Commissioner, and (2) such other insurance (including insurance against the perils of vandalism, malicious mischief, burglary, theft, and robbery) as the Commissioner may designate (under regulations adopted or made under section 1205 of this title) from those lines of property insurance for which reinsurance is available for losses from riots or civil disorders under part B of title X II of the National Housing Act. (3) The term "environmental hazard" means any hazardous condition that might give rise to loss under an insurance contract, but which is beyond the control of the property owner. (4) The term "inspection bureau" means any rating bureau or other organization designated by the Commissioner to perform inspections to determine the condition of the properties for which basic property insurance is sought. (5) The terms "Industry Placement Facility" and "Facility" mean the facility consisting of all insurers licensed to write and engaged in writing basic property insurance (including homeowners and commercial multiperil policies) within the District of Columbia to assist agents, brokers, and applicants in securing basic property insurance. (6) The term "premiums written" means ^ross direct premiums (harged with respect to property in the District of Columljia on all policies of basic property insurance and the basic property insurance premium components of all multiperil policies, less all premiums and dividends returned, paid, or credited to policyholders or the unused or unabsorbed portions of premiums deposits. (7) The term "property owner" means any person having an insurable interest in real, personal, or mixed real and personal property. INDUSTRY PLACEMENT FACILITY

SEC. 1204. (a) Within thirty days after the date of the enactment of this title all insurers licensed to write and engaged in writing in the District of Columbia, on a direct basis, basic property insurance or any component thereof in multiperil policies, shall establish an Industry Placement Facility. The Facility shall formulate and administer a program, subject to disapproval by the Commissioner in whole or in part, to seek the equitable apportionment amount such insurers of basic property insurance which may be afforded applicants in the District of Columbia whose property is insurable in accordance with reasonable underwriting standards and who individually or through their insurance agent or broker request the aid of the Facility to procure such insurance. The Facility shall seek to place insurance wnth one or more participating companies up to the full insurable value of the risk, if requested, except to the extent that deductibles, percentage participation clauses, and other underwriting devices are employed to meet special problems of insurability. (b) The Facility may, subject to the approval of the Commissioner, provide as part of its program for the equitable distribution of commercial risks and dwelling risks among insurers. (c) Each insurer licensed to write and engaged in writing in the District of Columbia, on a direct basis, basic property insurance or

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any component thereof in multiperil policies shall participate in the Industry Placement Facility program in accordance with the established rules of the program as a condition of its authority to transact such kinds of insurance in the District of Columbia, except that, in lieu of revoking or suspending the certificate of authority of any company for any failure to comijly with any of the established rules of the pro- Penalty for gram, the Commissioner may subject such company to a penalty ot not "°ncompiiance. more than $200 for ejich such failure to so comply Avhen in his judgment he finds that the public interest would be best served by the continued operation of the company in the District of Columbia. F A I R ACCESS TO INSURANCE

REQUIREMENTS

SEC. 1205. (a) The Industry Placement Facility shall on its own motion, or within thirty days after a request by the Commissioner, submit to the Commissioner such proposed rules and regulations applicable to insurers, agents, and brokers deemed necessary to assure all property owners fair access to basic proi:)erty insurance through the normal insurance markets, including rules and regulations concerning— (1) the manner and scope of inspections of risk by an inspection bureau; (2) the preparation and filing of inspection reports and reports on actions taken in connection with inspected risks, and summaries thereof; (8) the operation of the F'acility, including rules and regulations concerning— (A) the basic property insurance coverages to be provided through the Facility; (B) the reasonable effort to obtain insurance in the normal commercial market required of an applicant before recourse to the Facility; and (C) the appeals procedure witliin the Facility for any applicant for insurance regarding any ruling, action, or decision by or on behalf of the Facility. (b) The Commissioner may adopt such of the rules and regulations submitted pursuant to subsection (a) of this section as he approves. If the Commissioner disapproves any proposed rule or regulation submitted, he shall state the reasons for so doing, and he shall require the Facility to submit a revision therof within such time as he may designate, but no less than ten days. During such designated time, the Commissioner and the Facility shall consult regarding any such disapproved rule or regulation. If the Facility fails to submit a proposed rule or regulation, or revision thereof, within the designated time, or if a revised rule or regulation is unacceptable to the Commissioner, the Commissioner may make such rules and regulations covering the proposed general subject matter as he shall deem necessary to carry out the purposes of this title. Any rule or regulation adopted or made under this section shall be consistent with the requirements of part A of title X II of the National Housing Act. JOINT UNDERWRITING

ASSOCIATION

SEC. 1206. (a) The Commissioner i.s authorized to establish by order a joint underwriting association if he finds, after notice and hearing, that such association is necessary to carry out the purposes of this title. Such joint underwriting association.shall consist of all insurers licensed to write and engaged in writing in the District of Columbia, on a direct basis, such basic property insurance as may be designated by the Commissioner or any component thereof in multiperil policies.

^"'e- P. sss.

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Penalty for

noncompliance <

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(b) Every such insurer shall be and remain a member of the association and shall comply with all requirements of membership as a (condition of its authority to transact such kinds of insurance in the District of Columbia, except that in lieu of revoking or suspending the certificate of authority of any company for any failure to comply ^vith any of the requirements of membership, the Commissioner may subject such company to a penalty oi not more than $200 for each such failure to so comply when in his judgment he finds that the public interest would be best served by the continued operation of the company in the District of Columbia. (c) (l} Within sixty days following the effective date of the order of the Commissioner under this section the association shall submit to him a proposed plan of operation, consistent with the provisions of this title, which shall provide for economical, fair, and nondiscriminatory administration oi the association and for the prompt and efficient provision of reinsurance, without regard to environmental hazards, for such basic property insurance as may be designated by the Commissioner. The plan of operation shall include provisions for— (A) preliminary assessment of all members for initial expenses necessary to commence operations; (B) establishment of necessary facilities; (C) management and operation of the association; (D) assessment of members to defray losses and expenses; (E) commission arrangements; (F) reasonable underwriting standards; ((T) assumption and cession of reinsurance; and (H) such other matters as the Commissioner may designate. (2) The plan of operation shall not take effect until approved by the Commissioner. If the Commissioner disapproves the proposed plan of operation (or any part thereof), he shall state the reasons for so doing, and the association shall within thirty days thereafter submit for his review an appropriately revised plan of operation. During such time, the Commissioner and the association shall consult regarding the disapproved plan or part thereof. If the association fails to submit a revised plan of operation, or if the revised plan so submitted is unacceptable to the Commissioner, the Commissioner shall ]>romulgate a plan of operation. (3) The association may, on its own initiative, amend such plan, subject to approval by the Commissioner, and shall amend such plan at the direction of the Commissioner if he finds such action is necessary to carry out the purposes of this title. (d) All members of the association shall participate in its writings, expenses, profits, and losses, or in such categories thereof as may be separately established by the association, subject to approval by the Commissioner, in the proportion that the premiums written by each such member during the preceding calendar year bear to the aggregate premiums written in the District of Columbia by all members of the association, or in accordance with such other formula as the association may devise with the approval of the Commissioner. Such participation by each insurer in the association shall be determined annually on the basis of such premiums written during the preceding calendar year as disclosed in the annual statements and other reports filed by the insurer with the Commissioner. (e) The association shall be governed by a board of eleven directors, elected annually by cumulative voting by the members of the association, whose votes in such election shall be weighted in accordance with the proportionate amount of each member's net direct premiums written in the District of Columbia during the preceding calendar year.

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The first board shall be elected at a meeting of the members or their authorized representatives, which shall be held within thirty days after the effective date of the order under this section establishing the association, at a time and place designated by the Commissioner. EXAMINATION BY

COMMISSIONER

SEC. 1207. The operation of any inspection bureau, the Industry Placement Facility, and the joint underwriting association shall at all times be subject to the supervision and regulation of the Commissioner. The Commissioner shall have the power of visitation of and examination into such operations and free access to all the books, records, files, papers, and documents that relate to such operations, may summon and qualify witnesses under oath, and may examine directors, officers, agents, employees or, any other person having knowledge of such operations.

A c c e s s to records.

WAIVER o r L I A B I L I T Y

SEC. 1208. There shall be no liability on the part of, and no cause of action of any nature shall arise against, insurers, any inspection bureau, the Industry Placement Facility, the joint underwriting association, the agents or employees of such bureau, I'acility, or association, or any officer or employee of the District of Columbia, for any statements made in good faith by them concerning the insurability of property (A) in any reports or other communications, (B) at the time of the hearings conducted in connection therewith, or (C) in the findings with respect thereto required by the provisions of this title. The reports and communications of any inspection bureau, the Industry Placement Facility, and the joint underwriting association with respect to individual properties shall not be open to inspection by, or otherwise available to, the public. A N N U A L REPORTS BY JOINT U N D E R W R I T I N G ASSOCIATION

SEC. 1209. The joint underwriting association shall file with the Commissioner, annually on or before the 1st day of March, a statement which shall contain information with respect to its transactions, condition, operations, and affairs during the preceding year. Such statement shall contain such matters and information as are prescribed by the Commissioner and shall be in such form as is approved by him. The Commissioner may at any time require the association to furnish him with additional information with respect to its transactions, condition, or any matter connected therewith which he considers to be material and which will assist him in evaluating the scope, operation, and experience of the association. APPEALS

SEC. 1210. (a) Any applicant for insurance and any affected insurer may appeal to the Commissioner within ninety days after any final ruling, action, or decision by or on behalf of any inspection bureau, the Industry Placement Facility, or the joint underwriting association, following exhaustion of remedies available within such bureau. Facility, or association. (b) All final orders or decisions of the Commissioner made under this title shall be subject to review by the District of Columbia Court of Appeals under section 11-742 of the District of Columbia Code.

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PUBLIC LAW 90-448-AUG. 1, 1968 REIMBURSEMENT FOR REINSURANCE PROVIDED UNDER INSURANCE DEVELOPMENT PROGRAM

Ante, P. 560.

[82 STAT. NATIONAL

SEC. 1211. (a) In order to carry out the purposes of this title and to make available to insurers who particii^ate hereunder the reinsurance afforded under part B of title X II of the National Housing Act against losses to property resulting from riots or civil disorders, the Commissioner is authorized to assess each insurance company authorized to do business in the District of Columbia an amount, in the proportion that the premiums earned by each such company in the District of Columbia, on lines reinsured in the District of Columbia by the Secretary of Housing and Urban Development, during the preceding calendar year bear to the aggregate premiums earned on those lines iri the District of Columbia by all insurance companies, sufficient to l^rovide a fund to reimburse the Secretary of Housing and ITrban Development in the manner set forth in section 1223(a)(1) of such part B. Such fund may be added to or such fund may be created by moneys appropriated therefor by the Congress. (b) Insurers shall add to the premium rate an amount, to be approved by the Commissioner, sufficient to recover, within not more than three years, any amounts assessed under subsection (a) of this section durnig the preceding calendar year. Such amount shall be a separate charge to the insured in addition to the premium to be paid and shall be reflected as such in the policy of insurance. No commission shall be paid thereon to any agent or broker producing or selling the policy of insurance Avherein such amount is added. DELEGATION

SEC. 1212. The Commissioner is authorized to delegate any of the functions vested in him by this title. JUDICIAL REVIEW

77 Stat. 485; 78 Stat. 633.

SEC. 1213. Section 11-742(a) of the District of Columbia Code is amended (1) by striking out "and" immediately following paragraph (10); (2) by striking out the period following paragraph (11) and inserting in lieu thereof "; and"; and (3) by adding at the end thereof the following new paragraph: " (12) final orders and decisions of the Commissioner of the District of Columbia under the provisions of the District of Columbia Insurance Placement Act." TITLE X III — N A T I O N A L FIX)OD INSURANCE SHORT TITI.E

SEC. 1301. This title may be cited as the "National Flood Insurance Act of 1968". FINDINGS A N D DECLARATION OF PURPOSE

SEC. 1302. (a) The Congress finds that (1) from time to time flood disasters have created personal hardships and economic distress which have required unforeseen disaster relief measures and have placed ah increasing burden on the Nation's resources; (2) despite the installation of preventive and protective works and the adoption of other public programs designed to reduce losses caused by flood damage, these methods have not been sufficient to protect adequately against growing exposure to future flood losses; (3) as a matter of national policy, a reasonable method of sharing the risk of flood losses is

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through a program of flood insurance which can complement and encourage preventive and protective measures; and (4) if such a program is initiated and carried out <>Taduall|^, it can be expanded as knowledge is gained and experience is appraised, thus eventually making flood insurance coverage available on reasonable terms and conditions to persons who have need for such protection. (b) The Congress also finds that (1) many factors have made it uneconomic for the private insurance industry alone to make flood insurance available to those in need of such protection on reasonable terms and conditions; but (2) a program of flood insurance with largescale participation of the Federal (xovernment and carried out to the maximum extent practicable by the private insurance industry is feasible and can be initiated. (c) The Congress further finds that (1) a program of flood insurance can promote the public interest by providing appropriate protection against the perils of flood losses and encouraging sound land use by minimizing exposure of property to flood losses; and (2) the objectives of a flood insurance program should be integrally related to a unified national program for flood plain management and, to this end, it is the sense of Congress that within two years following the effective date of this title the President should transmit to the Congress for its Proposals consideration any further proposals necessary for such a unified cong|^'"s^'^ *° program, including proposals for the allocation of costs among beneficiaries of flood protection. (d) I t is therefore the purpose of this title to (1) authorize a flood insurance program by means of which flood insurance, over a period of time, can be made available on a nationwide basis through the cooperative efforts of the Federal Government and the private insurance industry, and (2) provide flexibility in the program so that such flood insurance may be based on workable methods of pooling risks, minimizing costs, and distributing burdens equitably among those who will be protected by flood insurance and the general public. (e) It is the further purpose of this title to (1) encourage State and local governments to make appropriate land UFB adjustments to constrict the development of land which is exposed to flood damage and minimize damage caused by flood losses, (2) guide the development of proposed future construction, where practicable, away from locations which are threatened by flood hazards, (3) encourage lending and credit institutions, as a matter of national policy, to assist in furthering the' objectives of the flood insurance program, (4) assure that any Federal assistance provided under the program will be related closely to all flood-related programs and activities of the Federal Government, and (5) authorize continuing studies of flood hazards in order to provide for a constant reappraisal of the flood insurance program and its eflFect on land use requirements. AMENDMENTS TO THE

FEDERAL FLOOD INSURANCE ACT OF 1956

SEC. 1303. (a) The second sentence of section 15(e) of the Federal Flood Insurance Act of 1956 (79 Stat. 1078) is amended— 7o Stat. io84. (1) by striking out "rate" the second time it appears in such " ^ ^^^ ^'*^'^' sentence, and inserting in lieu thereof "market yield", and (2) by striking out "as of the last day of", and inserting in lieu thereof "during". (b) Section 15(e) of such Act is further amended by striking out the last sentence thereof. (c) Sections 2 through 14, subsections (a) through (d), and (f) Repeal. and (g) of section 15, and sections 16 through 23 of such Act are et seq. hereby repealed.

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CHAPTER I—THE NATIONAL FLOOD INSURANCE PROGRAM BASIC AUTHORITY

Post,

p. 5 8 1.

SEC. 1304. (a) To carry out the purposes of this title, the Secretary of Housing and Urban Development is authorized to establish and carry out a national flood insurance program which will enable interested persons to purchase insurance against loss resulting from physical damage to or loss of real property or personal property related thereto arising from any flood occurring in the United States. (b) I n carrying out the flood insurance program the Secretary shall, to the maximum extent practicable, encourage and arrange for— (1) appropriate flnancial participation and risk sharing in the program by insurance companies and other insurers, and (2) other appropriate participation, on other than a risk-sharing basis, by insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations, in accordance with the provisions of chapter XL SCOPE OF PROGRAM A N D PRIORITIES

SEC. 1305. (a) In carrying out the flood insurance program the Secretary shall afford a priority to making flood insurance available to cover residential properties which are designed for the occupancy of from one to four families and business properties which are owned or leased and operated by small business concerns. (b) If on the basis of— (1) studies and investigations undertaken and carried out and information received or exchanged under section 1307, and (2) such other information as may be necessary, the Secretary determines that it would be feasible to extend the flood insurance program to cover other properties, he may take such action under this title as from time to time may be necessary in order to make flood insurance available to cover, on such basis as may be feasible, any types and classes of— (A) other residential properties, (B) other business properties, (C) agricultural properties, (D) properties occupied by private nonprofit organizations, and (E) properties owned by State and local governments and agencies thereof, and any such extensions of the program to any types and classes of these properties shall from time to time be prescribed in regulations. (c) The Secretary shall make flood insurance available in only those States or areas (or subdivisions thereof) which he has determined have— (1) evidenced a positive interest in securing flood insurance coverage under the flood insurance program, and (2) given satisfactory assurance that by June 30, 1970, permanent land use and control measures wdll have been adopted for the State or area (or subdivision) which are consistent with the comprehensive criteria for land management and use developed under section 1361, and that the application and enforcement of such measures will commence as soon as technical information on floodways and on controlling flood elevations is available.

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PUBLIC LAW 90-448-AUG. 1, 1968 N A T U K E A N D L I M I T A T I O N O F INSURANCE COVERAOE

SEC. 1306. (a) The Secretary shall from time to time, after consultation M'ith the advisory committee authorized under section 1818, appropriate representatives of the pool formed or otherwise created under section 1331, and appropriate representatives of the insurance authorities of the respective States, provide by regulation for gfeneral terms and conditions of insurability which shall be applicable to properties eligible for flood insurance coverage under section 1305, including— (1) the types, classes, and locations of any such properties which shall be eligible for flood insurance; (2) the nature and limits of loss or damage in any areas (or subdivisions thereof) which may be covered by such insurance; (3) the classification, limitation, and rejection of any risks which may be advisable; (4) appropriate minimum premiums; (5) appropriate loss-deductibles; and (6) any other terms and conditions relating to insurance coverage or exclusion which may be necessary to carry out the purposes of this title. (b) In addition to any other tenns and conditions under subsection (a), such regulations shall provide that— (1) any flood insurance coverage based on chargeable premium rates under section 1308 which are less than the estimated premium rates under section 1307(a)(1) shall not exceed— (A) in the case of residential properties which are designed for the occupancy of from cne to four families— (i) $17,500 aggregate liability for any dwelling unit, and $30,000 for any single dwelling structure containing more than one dwelling unit, and (ii) $5,000 aggregate liability per dwelling unit for any contents related to such unit; (B) in the case of business properties which are owned or leased and operated by small business concerns, an aggregate liability with respect to any single structure, including any contents thereof related to premises of small business occupants (as that term is defined by the Secretary), which shall be equal to (i) $30,000 plus (li) $5,000 multiplied by the number of such occupants and shall be allocated among such occupants (or amon^ the occupant or occupants and the owner) under regulatjons prescribed by the Secretary; except that the aggregate liability for the structure itself may in no case exceed $30,000; and (C) in the case of any other properties which may become eligible for flood insurance coverage under section 1305— (i) $30,000 aggregate liability for any single structuie, and (ii) $5,000 aggregate liability per dwelling unit for any contents related to such unit in the case of residential properties, or per occupant (as that term is defined by the Secretary) for any contents related to the premises occupied in the case of any other properties; and (2) any flood insurance coA^erage which may be made available in excess of any of the limits specified in subparagraph (A), (B), or (C) of paragraph (1) (or allocated to any person under subparagraph (B) of such paragraph) shall be based only on chargeable premium rates under section 1308 which are not less than the estimated premium rates under section 1307(a)(1), and the

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amount of such excess coverage shall not in any case exceed an amount which is equal to the applicable limit so specified (or allocated). E S T I M A T E S OF P R E M I U M

RATES

SEC. 1307. (a) The Secretary is authorized to undertake and carry out such studies and investigations and recepe or exchange such information as may be necessary to estimate, and shall from time to time estimate, on an area, subdivision, or other appropriate basis— (1) the risk premium rates for flood insurance which— (A) based on consideration of the risk involved and accepted actuarial principles, and (B) including— (i) the applicable operating costs and allowances set forth in the schedules prescribed under section 1311 and reflected in such rates, and (ii) any administrative expenses (or portion of such expenses) of carrying out the flood insurance program which, in his discretion, should properly be reflected in such rates, would be required in order to make such insurance available on an actuarial basis for any types and classes of properties for which insurance coverage is available under section 1305(a) (or is recommended to the Congress under section 1305(b)); (2) the rates, if less than the rates estimated under paragraph (1), which would be reasonable, would encourage prospective insureds to purchase flood insurance, and would be consistent with the purposes of this title; and (3) the extent, if any, to which federally assisted or other flood protection measures initiated after the date of the enactment of this title affect such rates. (b) I n carrying out subsection (a), the Secretary shall, to the maximum extent feasible and on a reimbursement basis, utilize the services of the Department of the Army, the Department of the Interior, the Department of Agriculture, the Department of Commerce, and the Tennessee Valley Authority, and, as appropriate, other Federal departments or agencies, and for such purposes may enter into agreements or other appropriate arrangements with any persons. (c) The Secretary shall give priority to conducting studies and investigations and making estimates under this section in those States or areas (or subdivisions thereof) which he has determined have evidenced a positive interest in securing flood insurance coverage under the flood insurance program. ESTABLISHMENT OF CHARGEABLE P R E M I U M

RATES

SEC. 1308. (a) On the basis of estimates made under section 1307 and such other information as may be necessary, the Secretary shall from time to time, after consultation with the advisory committee authorized under section 1318, appropriate representatives of the pool formed or otherwise created under section 1331, and appropriate representatives of the insurance authorities of the respective States, prescribe by regulation— (1) chargeable premium rates for any types and classes of properties for which insurance coverage shall be available under section 1305 (at less than the estimated risk premium rates under section 1307(a)(1), where necessary), and (2) the terms and conditions under which, and the areas (including subdivisions thereof) within which, such rates shall apply.

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577

(b) Such rates shall, insofar as practicable, be— (1) based on a consideration of the respective risks involved, including differences in risks due to land use measures, floodproofing, flood forecasting, and similar measures. (2) adequate, on the basis of accepted actuarial principles, to provide reserves for anticipated losses, or, if less than such amount, consistent with the objective of making flood insurance available where necessary at reasonable rates so as to encourage prospective insureds to purchase such insurance and with the purposes of this title, and (3) stated so as to reflect the basis for such rates, including the differences (if any) between the estimated risk premium rates under section 1307(a)(1) and the estimated rates under section 1307(a)(2). (c) Notwithstanding any other provision of this title, the chargeable rate with respect to any property, the construction or substantial improvement of which the Secretary determines has been started after the identification of the area in which such property is located has been published under paragraph (1) of section 1360, shall not be less than the applicable estimated risk premium rate for such area (or subdivision thereof) under section 1307(a)(1). (d) In the event any chargeable premium rate prescribed under this section— (1) is a rate which is not less than the applicable estimated risk premium rate under section 1307(a)(1), and (2) includes any amount for administrative expenses of carrying out the flood insurance program which have been estimated under clause (ii) of section 1307(a)(1)(B), a sum equal to such amount shall be paid to the Secretary, and he shall deposit such sum in the National Flood Insurance Fund established under section 1310. FINANCING

SEC. 1309. (a) All authority which was vested in the Housing and Home Finance Administrator by virtue of section 15(e) of the Federal Flood Insurance Act of 1956 (70 Stat. 1084) (pertaining to the ^^ use 24u. issue of notes or other obligations to the Secretary of the Treasury), as amended by subsections (a) and (b) of section 1303 of this x\ct, shall be available to the Secretary for the purpose of carrying out the flood insurance program under this title; except that the total amount of notes and obligations which may be issued by the Secretary pursuant to such authority shall not exceed $250,000,000, and all authority of the Secretary to issue notes and obligations under said section 15 (e) beyond such sum is hereby rescinded. (b) Any funds borrowed by the Secretary under this authority shall, from time to time, be deposited in the National Flood Insurance Fund established under section 1310. N A T I O N A L FLOOD INSURANCE

FUND

SEC. 1310. (a) To carry out the flood insurance program authorized by this title, the Secretary is authorized to establish m the Treasury of the United States a National Flood Insurance Fund (hereinafter referred to as the "fund") which shall be available, without fiscal year limitation— (1) for making such payments as may, from time to time, be required under section 1334; (2) to pay reinsurance claims under the excess loss reinsurance coverage provided under section 1335;

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la use 2 ^4 • " Investment of

59 Stat. 597; 61 Stat. 584.

PUBLIC LAW 90-448-AUG. 1, 1968

[82 STAT.

(3) to repay to the Secretary of the Treasury such sums as may be borrowed from him (together with interest) in accordance with the authority provided in section 1309; and (4) to pay such administrative expenses (or portion of such expenses) of ca.rrying out the flood insurance program as he may deem necessary; and (5) for the purposes specified in subsection (d) under the conditions provided therein. (b) The fund shall be credited with— (1) such funds borrowed in accordance with the authority provided in section 1309 as may from time to time be deposited in the fund; (2) premiums, fees, or other charges which may be paid or collected in connection with the excess loss reinsurance coverage provided under section 1335; (3) such amounts as may be advanced to the fund from appropriations in order to maintain the fund in an operative condition adequate to meet its liabilities; (4) interest which may be earned on investments of the fund pursuant to subsection (c); (5) such sums as are required to be paid to the Secretary under section 1308(d); and (6) receipts from any other operations under this title (including premiums under the conditions specified in subsection (d), and salvage proceeds, if any, resulting from reinsurance coverage). (c) If, after— (1) all outstanding obligations of the fund have been liquidated, and (2) any outstanding amounts which may have been advanced to the fund from appropriations authorized under section 1376 (a)(2)(B) have been credited to the appropriation from which advanced, with interest accrued at the rate prescribed under sec^'^^^^ ^^ ^^^ ^* ^^^^ Federal Flood Insurance Act of 1956, as in effect immediately prior to the enactment of this title. the Secretary determines that the moneys of the fund are in excess of current needs, he may request the investment of such amounts as he deems advisable by the Secretary of the Treasury in obligations issued or guaranteed by the United States. (d) In the event the Secretary makes a determination in accordance with the provisions of section 1340 that operation of the flood insurance program, in whole or in part, should be carried out through the facilities of the Federal Government, the fund shall be available for all purposes incident thereto, including— (1) cost incurred in the adjustment and payment of any claims for losses, and (2) f)ayment of applicable operating costs set forth in the schedules prescribed under section 1311, for so long as the program is so carried out, and in such event any premiums paid shall be deposited by the Secretary to the credit of the fund. (e) An annual business-type budget for the fund shall be prepared, transmitted to the Congress, considered, and enacted in the manner prescribed by law (sections 102, 103, and 104 of the Government Corporation Control Act (31 U.S.C. 847-849)) for wholly-owned Governmftut corporations.

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579

OPERATING COSTS AND ALLOWANCES

SEC. 1311. (a) The Secretary shall from time to time negotiate with appropriate representatives of the insurance industry for the purpose of establishing— (1) a current schedule of operating costs applicable both to risk-sharing insurance companies and other insurers and to insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations participating on other than a risk-sharing basis, and (2) a current schedule of operating allowances applicable to risk-sharing insurance companies and other insurers, which may be payable in accordance with the provisions of chapter II, and such schedules shall from time to time be prescribed in regulations. (b) For purposes of subsection (a)—• (1) the term "operating costs" shall (without limiting such j_

\ "

1

1

^°s'' P- ssi. "Operating costs,

term) include— (A) expense reimbursements covering the direct, actual, and necessary expenses incurred in connection with selling and servicing flood insurance coverage; (B) reasonable compensation jDayable for selling and servicing flood insurance coverage, or commissions or service fees paid to producers; (C) loss adjustment expenses; and (D) other direct, actual, and necessary expenses which the Secretary finds are incurred in connection with selling or servicing flood insurance coverage; and (2) the term "operating allowances" shall (without limiting i^'^^^^lfl?^ ^^' such term) include amounts for profit and contingencies which the Secretary finds reasonable and necessary to carry out the purposes of this title. PAYMENT OF CLAIMS

SEC. 1312. The Secretary is authorized to prescribe regulations establishing the general method or methods by which proved and approved claims for losses may be adjusted and paid for any damage to or loss of property which is covered by flood insurance made available under the provisions of this title. DISSEMINATION OF FLOOD INSURANCE INFORMATION

SEC. 1313. The Secretary shall from time to time take such action as may be necessary in order to make information and data available to the public, and to any State or local agency or official, with regard to— (1) the flood insurance program, its coverage and objectives, and (2) estimated and chargeable flood insurance premium rates, including the basis for and differences between such rates in accordance with the provisions of section 1308. PROHIBITION AGAINST CERTAIN DUPLICATIONS OF BENEFITS

SEC. 1314. (a) Notwithstanding the provisions of any other law, no Federal disaster assistance shall be made available to any person— (1) for the physical loss, destruction, or damage of real or personal property, to the extent that such loss, destruction, or damage is covered by a valid claim which may be adjusted and paid

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under flood insurance made available under the authority of this title, or (2) except in the situation provided for under subsection (b), for the physical loss, destruction, or damage of real or personal property, to the extent that such loss, destruction, or damage could have been covered by a valid claim under flood insurance which had been made available under the authority of this title,

"Federal disaster assistance."

64 Stat. 1109.

75 Stat. 311. 72 Stat. 389; 79 Stat. 206. "Financial assistance." 42 USC 1855ff.

(A) such loss, destruction, or damage occurred subsequent to one year following the date flood insurance was made available in the area (or subdivision thereof) in which such property or the major part thereof was located, and (B) such property was eligible for flood insurance under this title at that date; and in such circumstances the extent that.such loss, destruction, or damage could have been covered shall be presumed (for purposes of this subsection) to be an amount not less than the maximum limit of insurable loss or damage applicable to.such property in such area (or subdivision thereof), pursuant to regulations under section 1306, at the time insurance was made available in such area (or subdivision thereof). (b) I n order to assure that the provisions of subsection (a)(2) will not create undue hardship for low-income persons who might otherwise benefit from the provision of Federal disaster assistance, the Secretary shall provide by regulation for the circumstances in which the provisions of subsection (a)(2) shall not be applicable to any such persons. (c) For purposes of this section, "Federal disaster assistance" shall include any Federal financial assistance which may be made available to any person as a result of— (1) a major disaster (within the meaning of that term as determined by the President pursuant to the Act entitled "An Act to authorize Federal assistance to State and local governments in major disasters, and for other purposes"', as amended (42 U.S.C. 1855-1855g)), (2) a natural disaster, as determined by the Secretary of Agriculture pursuant to section 321 of the Consolidated Farmers Home Administration Act of 1961 (7 U.S.C. 1961), or (3) a disaster with respect to which loans may be made under section 7(b) of the Small Business Act (15 U.S.C. 636(b)). (d) For purposes of section 10 of the Disaster Relief Act of 1966 (80 Stat. 1320), the term "financial assistance'' shall be deemed to include any flood insurance which is made available under this title. STATE AND LOCAL LAND USE CONTROLS

SEC. 1315. After June 30, 1970, no new flood insurance coverage shall be provided under this title in any a,rea (or subdivision thereof) unless an appropriate public body shall have adopted permanent land use and control measures (with effective enforcement provisions) which the Secretary finds are consistent with the comprehensive criteria for land management and use under section 1361. PROPERTIES I N VIOLATION OF STATE AND LOCAL LAW

SEC. 1316. No new flood insurance coverage shall be provided under this title for any property which the Secretary finds has been declared by a duly constituted State or local zoning authority, or other authorized public body, to be in violation of State or local laws, regulations, or ordinances which are intended to discourage or otherwise restrict land development or occupancy in flood-prone areas.

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581

COORDINATION W I T H OTHER PROGRAMS

SEC. 1317. In carrying out this title, the Secretary shall consult with other departments and agencies of the Federal Government, and with interstate. State, and local agencies having responsibilities for flood control, flood forecasting, or flood damage prevention, in order to assure that the programs of such agencies and the flood insurance program authorized under this title are mutually consistent. ADVISORY COMMITTEE

SEC, 1318. (a) The Secretary shall appoint a flood insurance advisory committee without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and such c^us'^* io°f committee shall advise the secretary in the preparation of any regula- et seq. tions prescribed in accordance with this title and with respect to policy matters arising in the administration of this title, and shall perform such other responsibilities as the Secretary may, from time to time, assign to such committee. (b) Such committee shall consist of not more than fifteen persons and such persons shall be selected from among representatives of— (1) the insurance industry, (2) State and local governments, (3) lending institutions, (4) the homebuilding industry, and (5) the general public. (c) Members of the committee shall, while attending conferences or compensation, meetings thereof, be entitled to receive compensation at a rate fixed by travel ——•"-- . "°""'' e x p e n s e s the Secretary but not exceeding $100 per day, including traveltime, and while so serving away from their homes or regular places of business they may be allowed travel expenses, including per diem in lieu of subsistence, as is authorized under section 5703 of title 5, United States (/ode, for persons in the Government service employed intermittently. 80 Stat. 499. I N I T I A L PROGRAM L I M I T A T I O N

SEC. 1319. The face amount of flood insurance coverage outstanding and in force at any one time under this title shall not exceed the sum of $2,500,000,000. REPORT TO THE P R E S I D E N T

SEC. 1320. The Secretary shall include a report of operations mider this title in the annual report to the President for sulbmission to the Congress required by section 8 of the Department of Housing and Urban Development Act.

79 Stat. 67o. 42 USC 3536.

C H A P T E R II — ORGANIZATION AND ADMINISTRATION OF THE FLOOD INSURANCE PROGRAM ORGANIZATION A N D ADMINISTRATION

SEC. 1330. Following such consultation with representatives of the insurance industry as may be necessary, the Secretary shall implement the flood insurance program authorized under chapter I in accordance ^n'e» P 574; with the provisions of part A of this chapter and, if a determination 53°//' ^^ ^*^' is made by him under section 1340, under part B of this chapter.

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[82 STAT.

PART A—INDUSTRY PROGRAM W I T H FEDERAL FINANCIAL ASSISTANCE I N D U S T R Y FLOOD INSURANCE

Ante, p. 574.

POOL

SEC. 1331. (a) The Secretary is authorized to encourage and otherwise assist any insurance companies and other insurers which meet the requirements prescribed under subsection (b) to form, associate, or otherwise join together in a pool— (1) in order to pix)vide the flood insurance coverage authorized Under chapter I; and (2) for the purpose of assuming, on such terms and conditions as may be agreed upon, such financial responsibility as will enable such companies and other insurers, with the Federal financial and other assistance available under this title, to assume a reasonable proportion of responsibility for the adjustment and payment of claims for losses under the flood insurance program. (b) In order to promote the effective administration of the flood insurance program under this part, and to assure that the objectives of this title are furthered, the Secretary is authorized to prescribe appropriate requirements for insurance companies and other insurers participating in such pool including, but not limited to, minimum requirements for capital or surplus or assets. AGREEMENTS W I T H

FLOOD INSURANCE

POOL

Srx!. 1332. (a) The Secretary is authorized to enter into such agreements with the pool formed or otherwise created under this part as he deems necessary to carry out the purposes of this title. (b) Such agreements shall specify— (1) the terms and conditions under which risk capital will be available for the adjustment and payment of claims, (2) the terms and conditions under which the pool (and the companies and other insurers participating therein) shall participate in premiums received and profits or losses realized or sustained, (3) the maximum amount of profit, established by the Secretary and set forth in the schedules prescribed under section 1311, which may be realized by such pool (and the companies and other insurers participating therein), (4) the terms and conditions under which operating costs and allowances set forth in the schedules prescribed under section 1311 may be paid, and (5) the terms and conditions under which premium equalization payments under section 1334 wall be made and reinsurance claims under section 1335 will be paid. (c) In addition, such agreements shall contain such provisions as the Secretary finds necessary to assure that— (1) no insurance company or other insurer which meets the requirements prescribed under section 1331(b), and which has indicated an intention to participate in the flood insurance program on a risk-sharing basis, will be excluded from participating in the pool, (2) the insurance companies and other insurers participating in the pool will take whatever action may be necessary to provide continuity of flood insurance coverage by the pool, and (3) any insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations will be permitted to cooperate with the pool as fiscal agents or otherwise, on other than a risk-sharing basis, to the maximum extent practicable.

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PUBLIC LAW 90-448-AUG. 1, 1968

ADJUSTMENT AND P A Y M E N T OF CLAIMS AND J U D I C I A L

583 REVIEW

SEC. 18H3. The insurance companies and other insurers which form, associate, or otherwise join together in the pool under this part may adjust and pay all claims for proved and approved losses covered by flood insurance in accordance with the provisions of this title and, upon the disallowance by any such company or other insurer of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance of the claim, may institute an action on such claim against such company or other insurer in the United States district court for the district in which the insured property or the major part thereof shall have been situated, and jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy. P R E M I U M EQUALIZATION P A Y M E N T S

SEC. 1334. (a) The Secretary, on such terms and conditions as he may from time to time prescribe, shall make periodic payments to the pool formed or otherwise created under section 1331, in recognition of such reductions in chargeable premium rates under section 1308 below estimated premium rates under section 1307(a)(1) as are required in order to make flood insurance available on reasonable termsi and conditions. (b) Such payments shall be based only on the aggregate amount of flood insurance retained by the pool after ceding reinsurance in accordance with the provisions of section 1335, and shall not exceed an aggregate amount in any payment period equal to the sum of the following: (1) an amount for los.ses which bears the same ratio to the amount of all proved and approved claims for losses under this title during any designated j^eriod as the amount equal to the difference between— (A) the sum of all premium payments for flood insurance coverage in force under this title during such designated period which would have been payable during such period if all.such coverage were based on estimated risk premium rates under section 1307(a)(1) (excluding any administrative exj^enses which may be reflected in such rates, as specified in clause (ii) of section 1307(a) (^1)(B)), and (B) the sum of the premium payments actually paid or payable for such insurance under this title during.such period, bears to the amount specified in clause (A); and (2) subject to the terms and conditions specified in the agreements entered into with the pool under section 1332, a proportionate amount for appropriate operating costs and allowances (a.s set forth in the schedules prescribed under section 1311) during any designated period which bears the same ratio to the total amount of such operating costs and allowances during.such period as the ratio specified in paragraph (1). (c) Designated periods under this section and the methods for determining the sum of premiums paid or payable during such periods .shall be established by the Secretary. REINSURANCE

COVERAGE

SEC. 1335. (a) The Secretary is authorized to take such action as may be necessary in order to make available, to the pool formed or otherwise created under section 1331, reinsurance for losses (due to claims for proved and approved losses covered by flood insurance)

96-600 O - 69 - 40

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which are in excess of losses assumed by such pool in accordance with the excess loss agreement entered into under subsection (c). (b) Such reinsurance shall be made available pursuant to contract, agreement, or any other arrangement, in consideration of such payment of a premium, fee, or other charge as the Secretary finds necessary to cover anticipated losses and other costs of providing such reinsurance. (c) The Secretary is authorized to negotiate an excess loss agreement, from time to time, under which the amount of flood insurance retained by the pool, after ceding reinsurance, shall be adequate to further the purposes of this title, consistent with the objective of maintaining appropriate financial participation and risk sharing to the maximum extent practicable on the part of participating insurance companies and other insurers. (d) All reinsurance claims for losses in excess of losses assumed by the pool shall be submitted on a portfolio basis by such pool in accordance with terms and conditions established by the Secretary. PART B—GOVERNMENT PROGRAM W I T H INDUSTRY ASSISTANCE FEDERAL, OPERATION OF THE PROGRAM

Ante, p. 574.

80 Stat. 379.

^^^°^ '° *^''"'

gress

SEC. 1840. (a) If at any time, after consultation with representatives of the insurance industry, the Secretary determines that operation of the flood insurance program as provided under part A cannot be carried out, or that such operation, in itself, would be assisted materially by the Federal Government's assumption, in whole or in part, of the operational responsibility for flood insurance under this title (on a temporary or other basis) he shall promptly undertake any necessary arrangements to carry out the program of flood insurance authorized under chapter I through the facilities of the Federal Government, utilizing, for purposes of providing flood insurance coverage, either— (1) insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations, as fiscal agents of the United States, (2) officers and employees of the Department of Housing and Urban Development, and such other officers and employees of any executive agency (as defined in section 105 of title 5 of the United States Codc) as the Secretary and the head of any such agency may from time to time, agree upon, on a reimbursement or other basis, or (3) both the alternatives specified in paragraphs (1) and (2). (b) Upon making the determination referred to in subsection (a), and at least thirty days prior to implementing the program of flood insurance authorized under chapter I through the facilities of the Federal Government, the Secretary shall make a report to the Congress and such report shall— (1) state the reasons for such determination, (2) be supported by pertinent findings, (3) indicate the extent to which it is anticipated that the insurance industry will be utilized in providing flood insurance coverage under the program, and (4) contain such recommendations as the Secretary deems advisable. ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW

SEC. 1341. I n the event the program is carried out as provided in section 1340, the Secretary shall be authorized to adjust and make payment of any claims for proved and approved losses covered by

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PUBLIC LAW 90-448-AUG. 1, 1968

flood insurance, and upon the disallowance by the Secretary of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing; of notice of disallowance or partial disallowance by the Secretary, may institute an action against the Secretary on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated, ^^^^ ttisdic' and jurisdiction is hereby conferred upon such court to hear and deter- uon.' '"" mine such action without regard to the amount in controversy. PART C—PROVISIONS OF GENERATE APPLICABILITY SERVICES BY INSUILINCE INDTJSTRY

SEC. 1345. (a) I n administering the flood insurance program under,t,^,°f^'"^'^* ^" this chapter, the Secretary is authorized to enter into any contracts, thority. agreements, or other appropriate arrangements which may, from time to time, be necessary for the purpose of utilizing, on such terms and conditions as may be agreed upon, the facilities and services of any insurance companies or other insurers, insurance agents and brokers, or insurance adjustment organizations; and such contracts, agreements, or arrangements may include provision for payment of applicable operating costs and allowances for such facilities and services as set forth in the schedules prescribed under section 1811. (b) Any such contracts, agreements, or other arrangements may be entered into without regard to the provisions of sectjon 8709 of the Revised Statutes (41 ILS.C. 5) or any other provision of law requiring competitive bidding. C S E O F INSURANCE POOL, C O M P A N I E S, OR OTHER PRIVATE ORGANIZATIONS FOR CERTAIN P A Y M E N T S

SEC. 1346. (a) I n order to provide for maximum efficiency in the administration of the flood insurance program and in order to facilitate the expeditious payment of any Federal funds under such program, the Secretary may enter into contracts with pool formed or otherwise created under section 1831, or any insurance company or other private organization, for the purpose of securing performance by such pool, company, or organization of any or all of the following responsibilities: (1) estimating and later determining any amounts of payments to be made; (2) receiving from the Secretary, disbursing, and accounting for funds in making such payments; (3) making such audits of the records of any insurance company or other insurer, insurance agent or broker, or insurance adjustment organization as may be necessary to assure that proper payments are made; and (4) otherwise assisting in such manner as the contract may provide to further the purposes of this title. (b) Any contract with the pool or an insurance company or other private organization under this section may contain such terms and conditions as the Secretary finds necessary or appropriate for carrying out responsibilities under subsection (a), and may provide for payment of any costs which the Secretary determines are incidental to carrying out such responsibilities which are covered by the contract. (c) Any contract entered into under subsection (a) may be entered into without regard to section 8709 of the Revised Statute (41 U.S.C. 5) or any other provision of law requiring competitive bidding.

585

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(d) No contract may be entered into under this section unless the Secretary finds that the pool, company, or organization will perform its obligations under the contract efficiently and effectively, and will meet such requirements as to financial responsibility, legal authority, and other matters as he finds pertinent. (e)(1) Any.such contract may require the pool, company, or organization or any of its officers or employees certifying payments or disbursing funds pursuant to the contract, or otherwise participating in carrying out the contact, to give surety bond to the United States in such amount as the Secretary may deem appropriate. (2) No individual designated pursuant to a contract under this section to certify payments shall, m the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment certified by him under this section. (3) No officer disbursing funds shall in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by an individual designated to certify payments as provided in paragraph (2) of this subsection. (f) Any contract entered into under this section shall be for a term of one year, and may be made automatically renewable from term to term in the absence of notice by either party of an intention to terminate at the end of the current term; except that the Secretary may terminate any such contract at any time (after reasonable notice to the pool, company, or organization involved) if he finds that the pool, coml)any, or organization has failed substantially to carry out the contract, or is carrying out the contract in a manner inconsistent with the efficient and effective administration of the flood insurance program authorized under this title. SETTLEMENT AND AKBITRATION

SEC. 1347. (a) The Secretary is authorized to make final settlement of any claims or demands which may arise as a result of any financial transactions which he is authorized to carry out under this chapter, and may, to assist him in making any such settlement, refer any disputes relating to such claims or demands to arbitration, with the consent of the parties concerned. (b) Such arbitration shall be advisory in nature, and any award, decision, or reconmiendation which may be made shall become final only upon the approval of the Secretary. RECORDS A N D AUDITS

Ante, p. 582. Ante,

p. 584.

A c c e s s to rec ords for audit.

SEC. 1348. (a) The flood insurance pool formed or otherwise created vuidcr pait A of this chapter, and any insurance company or other private organization executing any contract, agreement, or other appropriate arrangement with the Secretary under part B of this chapter or this part, shall keep such records as the Secretary shall prescribe, including records which fully disclose the total costs of the program undertaken or the services being rendered, and such other records as will facilitate an effective audit. (b) The Secretary and the Comptroller General of the United Slates, or any of their duly authorized representatives, shall have access for the purpose of audit and examination to any books, documents, papers, and records of the pool and any such insurance company or other private organization that are pertinent to the costs of the program undertaken or the services being rendered.

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587

(CHAPTER III — C O O R D I N A T I O N OF F L O O D INSURANCE W I T H LAND-MANAGEMENT PROGRAMS IN FLOODPRONE AREAS IDENTIFICATION OF FLOOD-PRONE AREAS

SEC. 1360. The Secretary is authorized to consult with, receive iiifor- j,^^^°"''"^'" ^"" Illation from, and enter into any agreements or other arrangements with the Secretaries of the Army, the Interior, Agriculture, and Commerce, the Tennessee Valley Authority, and the heads of other Federal departments or agencies, on a reimbursement basis, or with the head of any State or local agency, or enter into contracts with any persons or private firms, in order that lie may— (1) identify and publish information with respect to all flood. Publication of plain areas, including coastal areas located in the United States, which have special flood hazards, within five years following the date of the enactment of this Act, and (2) establish flood-risk zones in all such areas, and make esti- Fiood-risk mates with respect to the rates of probable flood-caused loss for the various flood-risk zones for each of these areas, within fifteen years following such date. C R I T E R I A FOR LAND MANAGEMENT AND USE

SEC. 1861. (a) The Secretary is authorized to carry out studies and investigations, utilizing to the maximum extent practicable the existing facilities and services of other Federal departments or agencies, and State and local governmental agencies, and any other organizations, with respect to the adequacy of State and local measures in floodprone areas as to land management and use, flood control, flood zoning, and flood damage prevention, and may enter into any contracts, agreements, or other appropriate arrangements to carry out such authority. (b) Such studies and investigations shall include, but not be limited to, laws, regulations, or ordinances relating to encroachments and obstructions on stream channels and floodways, the orderly development and use of flood plains of rivers or streams, floodway encroachment lines, and flood plain zoning, building codes, building permits, and subdivision or other building restrictions. (c) On the basis of such studies and investigations, and such other information as he deems necessary, the Secretary shall from time to time develop comprehensive criteria designed to encourage, where necessary, the adoption of jKirmanent State and local measures which, to the maximum extent feasible, will— (1) constrict the development of land which is exposed to flood damage where appropriate, (2) guide the development of proposed construction away from locations which are threatened by flood hazards, (3) assist in reducing damage caused by floods, and (4) otherwise improve the long-range land management and use of flood-prone areas, and he shall work closely wath and provide any necessary technical assistance to State, interstate, and local governmental agencies, to encourage the application of such criteria and the adoption and enforcement of such measures.

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PUBLIC LAW 90-448-AUG. 1, 1968 PURCHASE

OF CERTAIN

INSURED

fe2

STAT.

PROPERTIES

SEC. 1362. The Secretary may, when he determines that the public interest would be served thereby, enter into negotiations with any owner of real property or interest therein which— (1) was located in any flood-risk area, as determined by the Secretary, (2) was covered by flood insurance under the flood insurance program authorized under this title, and (3) was damaged substantially beyond repair by flood while so covered, and may purchase such property or interests therein, for subsequent transfer, by sale, lease, donation, or otherwise, to any State or local agency which enters into an agreement with the Secretary that such property shall, for a period not less than forty years following transfer, be used for only such purposes as the Secretary may, by regulation, determine to be consistent with sound land management and use in such area. CHAPTER IV—APPROPRIATIONS AND MISCELLANEOUS PROVISIONS DEEINITIONS

SEC. 1370. As used in this title— (1) the term "flood" shall have such moaning as may be prescribed in regulations of the Secretary, and may include inundation from rising waters or from the overflow of streams, rivers, or other bodies of water, or from tidal surges, abnormally high tidal water, tidal waves, tsunamis, hurricanes, or other severe storms or deluge; (2) the terms "United States" (when used in a geographic sense) and "State" includes the several States, the District of Columbia, the territories and possessions, the Commonwealth of Puerto Rico, and the Trust Territory of the Pacific Islands; (3) the terms "insurance company", "other insurer" and "insurance agent or broker" include any organizations and persons authorized to engage in the insurance business under the laws of any State; (4) the term "insurance adjustment organization" includes any organizations and persons engaged in the business of adjusting loss claims arising under insurance policies issued by any insurance company or other insurer; (5) the term "person" includes any individual or group of individuals, corporation, partnership, association, or any other organized group of persons, including State and local governments and agencies thereof; and (6) the term "Secretary" means the Secretary of Housing and Urban Development. STUDIES OF OTHER NATURAL DISASTERS

SEC. 1371. (a) The Secretary is authorized to undertake such studies as may be necessary for the purpose of determining the extent to which insurance protection against earthquakes or any other natural disaster perils, other than flood, is not available from public or private sources, and the feasibility of such insurance protection being made available. (b) Studies under this section shall be carried out, to the maximum extent practicable, with the cooperation of other Federal departments and agencies and State and local agencies, and the Secretary is

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authorized to consult with, receive information from, and enter into any necessary agreements or other arrangements with such other Federal departments and agencies (on a reimbursement basis) and such State and local agencies. PAYMENTS

SEC. 1372. Any payments under this title may be made (after necessary adjustment on account of previously made underpayments or overpayments) in advance or by way of reimbursement, and in such installments and on such conditions, as the Secretary may determine. G O V E R N M E N T CORI'ORATION CONTROL ACT

SEC. 1373. The provisions of the Government (Corporation Control S9 Stat. 597. .Vet shall apply to the program authorized under this title to the no^tl.^^^ ^^^ same extent as they apply to wholly owned Government corporations. F I N A L I T Y OF CERTAIN F I N A N C I A L TRANSACTIONS

SEC. 1374. Notwithstanding the provisions of any other law— (1) any financial transaction authorized to be carried out under this title, and (2) any payment authorized to be made or to be received in connection with any such financial transaction, shall be final and conclusive upon all officers of the Government. ADMINISTRATIVE EXPENSES

SEC. 1375. Any administrative expenses which may be sustained by the Federal Government in carrying out the flood insurance program authorized under this title may be paid out of appropriated funds. APPROPRIATIONS

SEC. 1376. (a) There are hereby authorized to be appropriated such sums as may from time to time be necessary to carry out this title, including sums— (1) to cover administrative expenses authorized under section 1375; (2) to reimburse the National Flood Insurance Fund established under section 1310 for— (A) premium equalization payments under section 1334 which have been made from such fund; and (B) reinsurance claims paid under the excess loss reinsurance coverage provided under section 1335; and (3) to make such other payments as may be necessary to carry out the purposes of this title. (b) All such funds shall be available without fiscal year limitation. EFFECTIVE DATE

SEC. 1377. This title shall take effect one hundred and twenty days following the date of its enactment, except that the Secretary, on the basis of a finding that conditions exist necessitating the prescribing of an additional period, may prescribe a later effective date which in no event shall be more than one hundred and eighty days following such date of enactment.

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TITLE XIV—INTERSTATE LAND SALES SHORT TITLE

SEC. 1401. This title may be cited as the ''Interstate Land Sales Full Disclosure Act". DEFINITIONS

SEC. 1402. For the purposes of this title, the term— (1) "Secretary" means the Secretary of Housing and Urban Development; (2) "person"' means an individual, or an unincorporated organization, partnership, association, corporation, trust, or estate; (3) "subdivision'" means any land which i.s divided or proposed to be divided into fifty or more lots, whether contiguous or not, for the purpose of sale or lease as part of a common promotional plan and where subdivided land is offered for sale or lease by a single developer, or a group of developers acting in concert, and such land is contiguous or is known, designated, or advertised as a common unit or by a common name such land shall be presumed, without regard to the number of lots covered by each individual offering, as being offered for sale or lease as part of a common promotional plan; (4) "developer" means any person who, directly or indirectly, sells or leases, or offers to.sell or lease, or advertises for sale or lease any lots in a subdivision; (5) "agent"' means any person who represents, or acts for or on behalf of, a developer in selling or leasing, or offering to.sell or lease, any lot or lots in a subdivision; but shall not include an attorney at law whose representation of another person consists solely of rendering legal.services; (6) "blanket encumbrance" means a trust deed, mortgage, judgment, or any other lien or encumbrance, including an option or contract to sell or a trust agreement, affecting a subdivision or affecting more than one lot offered within a subdivision, except that such term shall not include any lien or other encumbrance arising as the result of the imposition of any tax assessment by any public authority; (7) "interstate commerce"' means trade or commerce among the several States; (8) "State"' includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States; (9) "purchaser" means an actual or prospective purchaser or lessee of any lot in a subdivision; (10) "offer" includes any inducement, solicitation, or attempt to encourage a person to acquire a lot in a subdivision. EXEMPTIONS

SEC. 1403. (a) Unless the method of disposition is adopted for the purpose of evasion of this title, the provisions of this title shall not apply to— (1) the sale or lease of real estate not pursuant to a common promotional plan to offer or sell fifty or more lots in a subdivision; (2) the sale or lease of lots in a subdivision, all of which are five acre^ or more in size; (3) the sale or lease of any improved land on which there is a residential, commercial, or industrial building, or to the sale or

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lease of land under a contract obligating the seller to erect such a building thereon within a period oi two years; (4) the sale or lease of real estate under or pursuant to court order; (5) the sale of evidences of indebtedness secured by a mortgage or deed of trust on real estate; (6) the sale of securities issued by a real estate investment trust; (7) the sale or lease of real estate by any government or government agency; (8) the sale or lease of cemetery lots; (9) the sale or lease of lots to any person who acquires such lots for the purpose of engaging in the business of constructing residential, commercial, or industrial buildings or for the purpose of resale or lease of such lots to persons engaged m such business; or (10) the sale or lease of real estate which is free and clear of all liens, encumbrances, and adverse claims if each and every purchaser or his or her spouse has personally inspected the lot which he purchased and if the developer executes a written affirmation to that effect to be made a matter of record in accordance with rules and regulations of the Secretary. As used in this subparagraph, the terms "liens," "encumbrances," and "adverse claims'' are not intended to refer to property reservations which land developers commonly convey or dedicate to local bodies or public utilities for the purpose of bringing public services to the land being developed nor to taxes and assessments which, under applicable State or local law, constitute liens on the property before they are due and payable. (b) The Secretary may from time to time, pursuant to rules and regulations issued by him, exempt from any of the provisions of this title any subdivision or any lots in a subdivision, if he finds that the enforcement of this title with respect to such subdivision or lots is not necessary in the public interest and for the protection of purchasers by reason of the small amount involved or the limited character of the public offering. PKOH TUITIONS R E L A T I N G TO THE SALE OR LEASE OF LOTS I N SUBDIVISIONS

SEC. 1404. (a) It shall be unlawful for any developer or agent, directly or indirectly, to make use of any means or instruments of transportation or communication in interstate commerce, or of the mails— (1) to sell or lease any lot in any subdivision unless a statement of record with respect to such lot is in effect in accordance with section 1407 and a printed property report, meeting the requirements of section 1408, is furnished to the purchaser in advance of the signing of any contract or agreement for sale or lease by the purchaser; and (2) in selling or leasing, or offering to sell or lease, any lot in a subdivision— (A) to employ any device, scheme, or artifice to defraud, or (B) to obtain money or property by means of a material misrepresentation with respect to any information included in the statement of record or the property report or with respect to any other information pertinent to the lot or the subdivision and upon which the purchaser relies, or

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(C) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon a purchaser, (b) Any contract or agreement for the purchase or leasing of a lot in a subdivision covered by this title, where the property report has not been given to the purchaser in advance or at the time of his signing, shall be voidable at the option of the purchaser. A purchaser may revoke such contract or agreement within forty-eight hours, where he has received the property report less than forty-eight hours before he signed the contract or agreement, and the contract or agreement shall so provide, except that the contract or agreement may stipvilate that the foregoing revocation authority shall not apply in the case of a purchaser who (1) has received the property report and inspected the lot to be purchased or leased in advance of signing the contract or agreement, and (2) acknowledges by his signature that he has made such inspection and has read and understood such report. REGISTRATION OF SUBDIVISIONS Statement of record.

Fees.

Information, availability to public.

SEC. 1405. (a) A subdivision may be registered by filing with the Secretary a statement of record, meeting the requirements of this title and such rules and regulations as may be prescribed by the Secretary in furtherance of the provisions of this title. A.statement of record shall be deemed effective only as to the lots specified therein. (b) At the time of filing a statement of record, or any amendment thereto, the developer shall pay to the Secretary a fee, not in excess of $1,000, in accordance with a schedule to be fixed by the regulations of the Secretary, which fees may be used by the Secretary to cover all or part of the cost of rendering services under this title, and such expenses as are paid from such fees shall be considered non-administrative. (c) The filing with the Secretary of a statement of record, or of an amendment thereto, shall be deemed to have taken place upon the receipt thereof, accompanied by payment of the fee required by subsection (b). (d) The information contained in or filed with any statement of record shall be made available to the public under.such regulations as the Secretary may prescribe and copies thereof shall be furnished to every applicant at such reasonable charge as the Secretary may prescribe. INFORMATION REQUIRED I N STATEMENT OF RECORD

SEC. 1406. The statement of record shall contain the information and be accompanied by the documents specified hereinafter in this section— (1) the name and address of each person having an interest in the lots in the subdivision to be covered by the statement of record find the extent of such interest; (2) a legal description of, and a statement of the total area included in, the subdivision and a statement of the topography thereof, together with a map showing the division proposed and the dimensions of the lots to be covered by the statement of record and their relation to existing streets and roads; (3) a statement of the condition of the title to the land comprising the subdivision, including all encumbrances and deed restrictions and covenants applicable thereto; (4) a statement of the general terms and conditions, including the range of selling prices or rents at which it is proposed to dispose of the lots in the subdivision;

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(5) a statement of the present condition of access to the subdivision, the availability of sewage disposal facilities and other public utilities (including water, electricity, gas, and telephone facilities) in the subdivision, the proximity in miles of the subdivision to nearby municipalities, and the nature of any improvements to be installed by the developer and his estimated schedule for completion; (6) in the case of any subdivision or portion thereof against which there exists a blanket encumbrance, a statement of the consequences for an individual purchaser of a failure, by the person or persons bound, to fulfill obligations under the instrument or instruments creating such encumbrance and the steps, if any, taken to protect the purchaser in such eventuality; (7)(A) copy of its articles of incorporation, with all amendments thereto, if the developer is a corporation; (B) copies of all instruments by which the trust is created or declared, if the developer is a trust; (C) copies of its articles of partnership or association and all other papers pertaining to its organization, if the developer is a partnership, unincorporated association, joint stock company, or any other form of organization; and (D) if the purported holder of legal title is a person other than developer, copies of the above documents for such person; (8) copies of the deed or other instrument establishing title to the subdivision in the developer or other person and copies of any instrument creating a lien or encumbrance upon the title of developer or other person or copies of the opinion or opinions of counsel in respect to the title to the subdivision in the developer or other person or copies of the title insurance policy guaranteeing such title; (9) copies of all forms of conveyance to be used in selling or leasing lots to purchasers; (10) copies of instruments creating easements or other restrictions; (11) such certified and uncertified financial statements of the developer as the Secretary may require; and (12) such other information and such other documents and certifications as the Secretary may require as being reasonably necessary or appropriate for the protection of purchasers. TAKING EFFECT OF STATEMENTS OF RECORD AND AMENDMENTS THERETO

SEC. 1407. (a) Except as hereinafter provided, the effective date of a statement of record, or any amendment thereto, shall be the thirtieth day after the filing thereof or such earlier date as the Secretary may determine, having due regard to the public interest and the protection of purchasers. If any amendment to any such statement is filed prior to the effective date of the statement, the statement shall be deemed to have been filed when such amendment was filed; except that such an amendment filed with the consent of the Secretary, or filed pursuant to an order of the Secretary, shall be treated as being filed as of the date of the filing of the statement of record. When a developer records additional lands to be offered for disposition, he may consolidate the subsequent statement of record with any earlier recording offering subdivided land for disposition under the same promotional plan. At the time of consolidation the developer shall include in the consolidated statement of record any material changes in the information contained in the earlier statement. (b) I f it appears to the Secretary that a statement of record, or any amendment thereto, is on its face incomplete or inaccurate in any material respect, the Secretary shall so advise the developer within a

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reasonable time after the filing of the statement or the amendment, but prior to the date the statement or amendment would otherwise be effective. Such notification shall serve to suspend the effective date of the statement or the amendment until thirty days after the developer files such additional information as the Secretary shall require. Any developer, upon receipt of such notice, may request a hearing, and such hearing shall be held within twenty days of receipt of such request by the Secretary. (c) If, at any time subsequent to the effective date of a statement of record, a change shall occur affecting any material fact required to be contained in the statement, the developer shall promptly file an amendment thereto. Upon receipt of any.such amendment, the Secretary may, if he determines such action to be necessary or appropriate in the public interest or for the protection of purchasers, suspend the statement of record until the amendment becomes effective. (d) If it appears to the Secretary at any time that a statement of record, which is in effect, includes any untrue.statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, the Secretary may, after notice, and after opportunity for hearing; (at a time fixed by the Secretary) within fifteen days after such notice, issue an order su.spending the statement of record. When such statement has been amended in accordance with such order, the Secretary shall so declare and thereupon the order shall cease to be effective. (e) The Secretary is hereby empowered to make an examination in any case to determine whether an order should issue under subsection (d). I n making such examination, the Secretary or anyone designated by him.shall have access to and may demand the production of any books and papers of, and may administer oaths and affirmations to and examine, the developer, any agents, or any other person, in respect of any matter relevant to the examination. If the developer or any agents shall fail to cooperate, or shall obstruct or refuse to permit the making of an examination, such conduct shall be proper ground for the issuance of an order suspending the statement of record. (f) Any notice required under this section shall be sent to or served on the developer or his authorized agent. INFORMATION REQUIRED IN rROPERTY REPORT

SEC. 1408. (a) A property report relating to the lots in a subdivision shall contain such of the information contained in the statement of record, and any amendments thereto, as the Secretary may deem necessary, but need not include the documents referred to in paragraphs (7) to (11), inclusive, of section 1406. A property report shall also contain such other information as the Secretary may by rules or regulations require as being necessary or appropriate in the public interest or for the protection of purchasers. (b) The property report shall not be used for any promotional purposes before the statement of record becomes effective and then only if it is used in its entirety. No person may advertise or represent that the Secretary approves or recommends the subdivision or the sale or lease of lots therein. No portion of the property report shall be underscored, italicized, or printed in larger or bolder type than the balance of the statement unless the Secretary requires or permits it. COOPERATION WITH STATE AUTHORITIES

SEC. 1409. (a) In administering this title, the Secretary shall cooperate with State authorities charged with the responsibility of regulating the sale of lots in subdivisions which are also subject to this title and may accept for filing under section 1405 and declare effective

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as a statement of record, if he finds such action to be appropriate in the public interest or for the protection of purchasers, material filed with and found acceptable by such authorities. (b) Nothinjif in this title shall affect the jurisdiction of the real estate commission (or any agency or office performing like functions) of any State over any subdivision or any person. CIVIL LIABILITIES

SEC. 1410. (a) Where any part of the statement of record, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be.stated therein, any person acquiring a lot in the subdivision covered by such statement of record from the developer or his agent during such period the statement remained uncorrected (unless it is proved that at the time of such acquisition he knew of such untruth or omission) may, either at law or in equity, in any court of competent jurisdiction, sue the developer. (b) Any developer or agent, who sells or leases a lot in a subdivision— (1) in violation of section 1404, or (2) by means of a property report which contained an untrue statement of a material fact or omitted to state a material fact required to be.stated therein, may be sued by the purchaser of such lot. (c) The suit authorized under subsection (a) or (b) may be to recover such damages as shall represent the difference between the amount paid for the lot and the reasonable cost of any improvements thereto, and the lesser of (1) the value thereof as of the time.such suit was brought, or (2) the price at which such lot shall have been disposed of in a bona fide market transaction before suit, or (3) the price at which such lot shall have been disposed of after suit in a bona fide market transaction but before judgment. (d) Every person who becomes liable to make any payment under this section may recover contribution as in cases of contract from any person who, if sued separately, would have been liable to make the same payment. (e) I n no case shall the amount recoverable under this section exceed the sum of the purchase price of the lot, the reasonable cost of improvements, and reasonable court costs. COURT REVIEW OF ORDERS

SEC. 1411. (a) Any person, aggrieved by an order or determination of the Secretary issued after a hearing, may obtain a review of such order or determination in the court of appeals of the United States, within any circuit wherein such person resides or has his principal jilace of business, or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the entry of such order or determination, a written petition praying that the order or determination of the Secretary be modified or be set aside in whole or in part. A copy of such petition shall be forthwith transmitted by the clerk of the court to the Secretary, and thereupon the Secretary shall file in the court the record upon which the order or determination complained of was entered, as provided in section 2112 of title 28, United States Code. No objection to an order or determination of the Secretary shall be considered by the court unless such objection shall have been ur^ed before the Secretary. The finding of the Secretary as to the facts, if supported by substantial evidence, shall be conclusive. I f either party shall apply to the court for leave

72 Stat. 941.

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