amount may be increased by not to exceed $1,000,000,000. Within the limitations herein prescribed, the Administrator shall from time to time determine the aggregate amount of such obligations which may be outstanding and in force under this title, at any one time, in particular geographical areas of the United States, taking into account the needs of persons in such areas for such indemnity protection.

TITLE II-REINSURANCE

SEC. 201. The Administrator is authorized to provide reinsurance of insurance companies, under any plan or plans of reinsurance, as he determines will best effectuate the purpose of this Act, against loss on account of insurance issued by such companies against damage to or loss of real or personal property, due to floods occurring within the United States, as may be necessary to enable such companies to provide such insurance where it would otherwise be unavailable.

SEC. 202. The Administrator shall prescribe premium rates for the reinsurance he makes available under authority of this Act and the terms and conditions under which, and the areas and subdivisions thereof within which, each rate shall be applicable. All such rates shall be based upon consideration of the risks involved and shall be adequate, in the judgment of the Administrator, to cover all claims for losses under reinsurance agreements over a reasonable period of years. All such rates shall be uniform throughout the United States

for similar risks.

SEC. 203. The Administrator may by regulation provide for the determination of (1) the types of property with respect to which reinsurance will be granted, (2) the maximum premium rate permissible to be charged for any policy of insurance reinsured under the provisions of this Act, (3) the nature and limits of losses or damage which may be covered by such policies; (4) provisions which must be contained in such policies, and (5) such other matters as may be necessary to carry out the purposes of this title.

SEC. 204. Reinsurance shall be provided by the Administrator under this Act only to the extent that it is not otherwise available at reasonable rates and upon reasonable conditions from private sources.

SEC. 205. The aggregate amount of reinsurance outstanding and in force at any one time under this title shall not exceed $100,000,000.

TITLE III-ADMINISTRATION AND FINANCING

FEDERAL FLOOD INDEMNITY ADMINISTRATION

SEC. 301. (a) There is hereby established a Federal Flood Indemnity Administration as a constituent unit in the Housing and Home Finance Agency at the head of which shall be a Commissioner, appointed by the Administrator, who shall be paid at the same basic rate of compensation established for the Commissioners of the other constituents of the Housing and Home Finance Agency. (b) Section 101 of the Government Corporation Control Act, as amended, is I hereby amended by inserting the words "Federal Flood Indemnity Administration," after the words "Federal Housing Administration".

(c) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act, the Administrator, notwithstanding the provisions of any other law, shall maintain an integral set of accounts which shall be audited annually by the General Accounting Office in accordance with the principles and procedures applicable to commercial transactions as provided by the Government Corporation Control Act, as amended, and no other audit shall be required: Provided, That such financial transactions of the Administrator as the issuing of indemnity contracts and the making of reinsurance agreements, and vouchers approved by the Administrator in connection with such financial transactions, shall be final and conclusive upon all officers of the Government.

FINANCING

SEC. 302. (a) To carry out the functions authorized by this Act, the Administrator shall establish a Federal Flood Indemnity Fund and a Federal Flood Reinsurance Fund. All indemnity fees and all payments by the Federal Government and by States pursuant to section 102 of this Act shall be deposited in the Federal Flood Indemnity Fund. All reinsurance premiums collected under section 202 of this Act shall be deposited in the Federal Flood Reinsurance Fund. Moneys in

both such funds may be invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United States. Such obligations may be sold and the proceeds reinvested as provided herein if deemed advisable by the Administrator. Income from such investment and proceeds. from properties acquired under this Act shall be deposited in the respective funds.. SEC. 303. In order to finance activities under this Act, the Administrator is authorized to issue to the Secretary of the Treasury, from time to time, notes and other obligations in an amount not exceeding $500,000,000 outstanding at any one time. Such obligations shall be in such forms and denomiations, have such maturities, and be subject to such terms and conditions, as may be prescribed by. the Administrator with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States of comparable maturities as of the last day of the month preceding the issuance of such notes or obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Administrator to be issued hereunder and for such purpose the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act as amended, are extended to include any purchase of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States. Funds borrowed under this section shall be deposited in such proportions as the Administrator deems advisable in the Federal Flood Indemnity Fund and the Federal Flood Reinsurance Fund.

SEC. 304. Moneys in the Federal Flood Indemnity Fund and in the Federal Flood Reinsurance Fund may be used for the following purposes as deemed necessary by the Administrator: (1) to pay from the Federal Flood Indemnity Fund approved claims for losses under indemnity contracts and other expenses incurred under title I of this Act, and (2) to pay from the Federal Flood Reinsurance Fund approved claims under reinsurance agreements and other expenses incurred under title II of this Act, and (3) to pay to the Secretary of the Treasury sums borrowed from him, with interest, in accordance with the provisions of section 303 of this title: Provided, That no administrative expenses of the Federal Government shall be paid from either of such funds. There is hereby authorized to be appropriated such sums as may be necessary for administrative expenses of the Federal Government under this Act.

SEC. 305. In the event that the Administrator in unable to pay any valid claim under any indemnity contract or any reinsurance agreement, the Secretary of the Treasury shall pay the amount thereof which is hereby authorized to be appropriated out of any money in the Treasury not otherwise appropriated.

TITLE IV-GENERAL PROVISIONS

PARTICIPATION BY PRIVATE COMPANIES AND PUBLIC AGENCIES

SEC. 401. The Administrator shall encourage the maximum participation of private companies in providing indemnities and reinsurance under this Act. Notwithstanding the provisions of any other law, the Administrator is authorized and directed to utilize the facilities and services of other public agencies or private insurance companies and of established insurance agents and brokers and established insurance adjustment organizations to the maximum extent which he shall deem practicable and consistent with providing such protection at minimum cost and he may arrange and contract for payment of reasonable compensation for such services. The Administrator is hereby authorized to enter into agreements with private companies prescribing their respective rights and obligations and providing for any such company to act as underwriting agent or claim agent or both on behalf of the Administrator.

SEC. 402. The Administrator shall from time to time consult with representatives of the insurance industry and shall make continuing studies and investigations for the purpose of developing methods for expanding the reinsurance program and for facilitating the ultimate assumption of all flood risks by private insurance carriers.

SEC. 403. On or before January 3, 1961, the Administrator shall transmit a report to the President, for submission to the Congress, on the functions, organization, and accomplishments under this Act, including information on the extent to which private insurance companies have participated in the indemnity and reinsurance programs established under the Act. This report shall contain such recommendations as the Administrator deems appropriate including, however, either (1) a recommendation for such legislation as may be necessary for the termination of the Government programs under this Act and an assumption of flood risks by private insurance companies or (2) an explanation as to why such legislation at that time would not be feasible or desirable.

PAYMENT OF CLAIMS

SEC. 404. (a) Under such regulations as the Administrator may prescribe he shall adjust, compromise, and pay claims, either directly or through agents, for losses covered by indemnity contracts and reinsurance agreements under this Act. No claim shall be approved in an aggregate amount which exceeds the actual cash value of the damaged or lost property or the cost of replacing, repairing, or rebuilding the said property with material of like kind and quality (less depreciation at the time of damage or loss), whichever is lower.

(b) Upon disallowance of any claim or upon refusal of a claimant to accept the amount allowed by the Administrator, the claimant, withon one year after the date of mailing notice of disallowance or partial disallowance by the Administrator, may institute an action against him on such claim in the United States District Court for any district in which the property covered or a part thereof is situated. The Administrator shall appoint one or more agents within the jurisdiction of each United States District Court upon whom service of process can be made in any action instituted under this section. Exclusive jurisdiction is hereby conferred upon such courts, sitting without juries, to hear and determine such actions without regard to the amount in controversy.

COORDINATION WITH OTHER PROGRAMS

SEC. 405. (a) In carrying out the functions authorized in this Act, the Administrator may consult with other agencies of the Federal Government and interstate, State, and local public agencies having responsibilities for land-use and flood control and for flood-zoning and flood-damage prevention in order to assure that the indemnity and reinsurance facilities offered are consistent with the programs of such agencies. Where the program of the Administrator may affect existing or proposed flood control works under the jurisdiction of agencies of the Federal Government these agencies shall cooperate with the Administrator in coordinating their respective programs. The Secretary of Agriculture and the Administrator shall coordinate the administration of their respective programs relating to flood indemnities, insurance, and reinsurance for agricultural commodities.

(b) The Administrator may receive from, or exchange with, any State insurance commission or agency or any private corporation or association experienced in the problems of indemnities, insurance, or reinsurance, such information as may be helpful in the establishment of indemnity fees and reinsurance premiums and the administration of the programs authorized under the provisions of this

ADDITIONAL POWERS

SEC. 406. For the purpose of carrying out functions under this Act the Administrator may

(a) sue or be sued ;

(b) notwithstanding the provisions of any other law and without regard to sections 3648 and 3709 of the Revised Statutes, as amended (31 U. S. C. 529 and 41 U. S. C. 5), and section 322 of the Act of June 30, 1932 (47 Stat. 412, as amended (40 U. S. C. 278a)), enter into and perform contracts, leases, cooperative agreements, or other transactions, on such terms as he may deem appropriate, with any agency or instrumentality of the United States, or with any State or agency or political subdivision thereof, or with any person, firm, association, or corporation and consent to modification thereof, and make advance or progress payments in connection therewith;

(c) notwithstanding the provisions of any other law and without regard to sections 3648 and 3709 of the Revised Statutes, as amended (31 U. S. C. 529 and 41 U. S. C. 5), and section 322 of the Act of June 30, 1932 (47 Stat. 412, as amended (40 U. S. C. 278a)), by purchase, lease, or donation

acquire such real and personal property and any interest therein, make advance or progress payments in connection therewith, and hold, use, maintain, insure against loss, sell, lease, or otherwise dispose of such real and personal property as the Administrator deems necessary to carry out the purposes of the Act;

(d) appoint, pursuant to civil service laws and regulations, such officers, attorneys, and employees as may be necessary to carry out the purposes of this Act; fix their compensation in accordance with the provisions of the Classification Act of 1949, as amended; define their authority and duties; require bonds from such of them as may be necessary; and delegate to them and authorize successive redelegations by them of such of the powers vested in him by this Act as he may determine;

(e) notwithstanding the numerical limitation in section 505 of the Classification Act of 1949, as amended, the Administrator may establish and place one position in grade GS-17 and two positions in grade GS-16 in carrying out the functions vested in him by this Act, which positions shall be in addition to any positions presently allocated to the Housing and Home Finance Agency under said section 505;

(f) conduct researches, surveys, and investigations relatings to flood indemnities and reinsurance and assemble data for the purpose of establishing fees and premiums for flood indemnities and reinsurance under this Act;

(g) issue such rules and regulations as he deems necessary to carry out the purposes of this Act; and

(h) exercise all powers specifically granted by the provisions of this Act and such incidental powers as are necessary to carry out the purposes of this Act.

EXEMPTIONS OF CLAIMS FROM LEVY

SEC. 407. Claims under any indemnity contract or reinsurance agreement under this Act shall not be liable to attachment, levy, garnishment, or any other legal process before payment to the insured, or to deduction on account of the indebtedness of the insured or his estate to the United States except claims of the United States arising under this Act.

RESERVATION OF RIGHTS IN REAL ESTATE ACQUIRED

SEC. 408. The acquisition by the Administrator of any real property pursuant to this Act shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local law of the inhabitants on such property.

TAXATION

SEC. 409. Nothing in this Act shall be construed to exempt any real property, acquired and held by the Administrator in connection with the payment of any claim under this Act, from taxation by any State or political subdivision thereof, to the same extent, according to its value, as other real property is taxed.

SEPARABILITY OF PROVISIONS

SEC. 410. If any provision of this Act or the application of such provision to any person or circumstances, shall be held invalid, the remainder of the Act and the application of such provision to any person or circumstance other than those to which it is held invalid shall not be affected thereby.

[S. 2862, 84th Cong., 2d sess.]

AMENDMENT (in the nature of a substitute) intended to be proposed by Mr. Bush to the bill (S. 2862) to provide for an experimental national flood indemnity and reinsurance program, and for other purposes, viz: Strike out all after the enacting clause and insert in lieu thereof the following:

That this Act may be cited as the "National Flood Indemnity Act of 1956".

CONGRESSIONAL FINDINGS AND DECLARATION OF PURPOSE

SEC. 2. The Congress hereby finds and declares that the recurrence of floods in the United States impairs the free flow of interstate and foreign trade and commerce, causes widespread hardship and economic distress, and has a gen

eral adverse effect on the Nation's welfare. The Congress hereby further finds and declares that at present there is not generally availabie to the people of the United States any program through private enterprise which is adequate to provide reimbursement for damage to and loss of property as a result of such floods. It is therefore the purpose of this Act to promote the national welfare by (1) making available, in cooperation with the various States, a program of indemnities with respect to certain types of property damaged or lost as a result of floods and (2) making available a program of reinsurance by the Federal Government of private insurers who underwrite certain flood risks.

DEFINITIONS

SEC. 3. As used in this Act the term

(a) "Administrator" means the Housing and Home Finance Administrator; (b) "Person" means an individual or group of individuals, corporation, partnership, association, or any other organized group of persons, including State and local governments and agencies thereof;

(c) "Real property" means land, interests in land, and improvements on land which are permanently affixed to the land;

(d) "Insurable interest" means any right, title, interest or other property right, legal or equitable, in and to property and any other interest, benefit, or advantage with respect to property which, in the determination of the Administrator, is an insurable interest for the purpose of this Act by reason of being of such nature that any loss or destruction of or damage to such property would result in an immediate and direct pecuniary loss to the person having such other interest, benefit or advantage;

(e) "United States", when used in a geographical sense, means the several States, the District of Columbia, the Territories of Alaska and Hawaii, the Commonwealth of Puerto Rico and other Territories and possessions of the United States; and

(f) "State" includes the several States, the District of Columbia, the Territories of Alaska and Hawaii, the Commonwealth of Puerto Rico and other Territories and possessions of the United States.

TITLE I-INDEMNITIES

SEC. 101. (a) Subject to the provisions of this Act and such terms and conditions as he may prescribe, the Administrator is hereby authorized to issue indemnity contracts obligating the United States to indemnify persons for damage to or loss of real property, business inventories, stored agricultural commodities, household effects and such other personal property as he may determine, as a result of floods occurring within the limits of the United States. For purposes of this Act, the term "flood" shall include rising water caused by tide, wind, or rain and shall have such further meaning as prescribed by regulation of the Administrator.

(b) Indemnity contracts shall be issued only with respect to property in those States which participate in the program as hereinafter provided.

SEC. 102. An indemnity contract shall be issued under this Act only upon the payment of a fee by the person indemnified and the payment of a contribution, to the extent hereinafter required, by the State in which the property is located. Such fees shall be established by the Administrator and shall be based on consideration of the risks involved and the desirability in the public interest of providing indemnity protection at reasonable cost, and shall be uniform throughout the United States for similar risks. In establishing such fees the Administrator shall set up "estimated rates" which would be necessary in his judgment to pay all claims for probable losses over a reasonable period of years: Provided, That no indemnity contract shall be issued for a fee less than 60 per centum of such "estimated rate", nor unless the State, in which the property covered by the indemnity contract is located, has paid into the Federal Flood Indemnity Fund (hereinafter created) an amount equal to 50 per centum of the difference between the fee so charged and the "estimated rate". The Administrator shall pay into such fund an amount equal to the State's contribution, for each indemnity contract issued. All administrative expenses of the Federal Government under this Act shall be paid from funds appropriated by the Federal Government.

SEC. 103. The Administrator shall, by regulation, determine (1) the types and location of property with respect to which indemnities shall be provided; (2) the nature and limits of losses or damage which may be covered by such indem