SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Local Innovation and Coastal 
Protection Act of 1993''.

SEC. 2. PROGRAM AUTHORITY.

    (a) In General.--Chapter III of the National Flood Insurance Act of 
1968 (42 U.S.C. 4101 et seq.) is amended by adding at the end the 
following new section:

``SEC. 1366. EROSION MITIGATION DEMONSTRATION PROGRAM.

    ``(a) In General.--The Director shall make grants, with amounts 
made available from the Coastal Erosion Control Fund established under 
section 1367, to demonstrate the feasibility of innovative mitigation 
activities designed to minimize coastal erosion, preserve shorelines, 
and avoid environmental degradation.
    ``(b) Eligible Recipients.--The Director may make grants under this 
section to--
            ``(1) any State; and
            ``(2) any community participating in the national flood 
        insurance program under this title that--
                    ``(A) has suffered recurring flood damages and 
                claims, as determined by the Director; and
                    ``(B) is in full compliance with the requirements 
                under the national flood insurance program.
    ``(c) Eligible Activities.--
            ``(1) In general.--A grant under this section may be used 
        to develop and test innovative techniques to minimize coastal 
        erosion and preserve shorelines.
            ``(2) Priority.--In making grants under this section, the 
        Director shall give a priority to eligible recipients that 
        conduct projects to demonstrate the feasibility of techniques 
        that--
                    ``(A) have application to more than 1 location;
                    ``(B) substantially broaden the applicability of 
                proven erosion control techniques; or
                    ``(C) avoid permanent structural alterations and 
                rely instead on natural designs, including the use of 
                vegetation, or temporary structures, to accomplish 
                their goal.
    ``(d) Applications.--The Director shall make grants under this 
section on the basis of a nationwide competition, in accordance with 
such application forms and procedures as the Director may establish.
    ``(e) Maximum Amount.--The total amount of any grant under this 
section may not exceed $500,000 for any project assisted under this 
section.
    ``(f) Program Requirements.--
            ``(1) Matching requirements.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), a grant under this section may not 
                exceed 3 times the amount that the recipient certifies, 
                as the Director shall require, that the recipient will 
                contribute from non-Federal funds to carry out 
                activities assisted with amounts provided under this 
                section.
                    ``(B) Non-federal funds.--For purposes of this 
                subsection, the term `non-Federal funds' includes--
                            ``(i) State or local agency funds,
                            ``(ii) any salary paid to staff to carry 
                        out the activities of the recipient,
                            ``(iii) the value of the time and services 
                        contributed by volunteers to carry out such 
                        activities (at a rate determined by the 
                        Director), and
                            ``(iv) the value of any donated material or 
                        building and the value of any lease on a 
                        building.
                    ``(C) No match required for evaluation.--No non-
                Federal contribution is required for the conduct of 
                evaluations under paragraph (2).
            ``(2) Report.--Not later than 5 years after the receipt of 
        a grant under this section, the recipient of the grant shall 
        transmit to the Director a report that--
                    ``(A) evaluates the long-term effectiveness of the 
                techniques that were developed under this section; and
                    ``(B) assesses any impact that such techniques have 
                had on adjacent coastal areas.
    ``(g) Report to Congress.--The Director shall transmit to the 
Congress an annual report that--
            ``(1) summarizes the erosion mitigation techniques 
        developed pursuant to this section;
            ``(2) describes the status of the Coastal Erosion Control 
        Fund established under section 1367; and
            ``(3) recommends any legislative or administrative action 
        necessary to further the purpose of this section.
    ``(h) Authorization.--There are authorized to be appropriated to 
carry out this section, from the Coastal Erosion Control Fund under 
section 1367, $12,500,000 for each of the fiscal years 1994 through 
1997.''.

SEC. 3. ESTABLISHMENT OF COASTAL EROSION CONTROL FUND.

    Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101 et seq.), as amended by section 2, is further amended by adding at 
the end the following new section:

``SEC. 1367. ESTABLISHMENT OF COASTAL EROSION CONTROL FUND.

    ``(a) In General.--The Director shall establish in the Treasury of 
the United States a fund to be known as the Coastal Erosion Control 
Fund (hereafter in this section referred to as the `Fund'), which shall 
be available, to the extent provided in appropriation Acts, for grants 
under section 1366.
    ``(b) Credits.--The Fund shall be credited with any premium 
surcharges assessed under section 1308(e).''.

SEC. 4. INSURANCE PREMIUM MITIGATION SURCHARGE.

    (a) In General.--Section 1308 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4015) is amended by adding at the end the following 
new subsections:
    ``(e) Notwithstanding any other provision of this title, the 
Director shall assess, with respect to each contract for flood 
insurance coverage under this title, an annual mitigation surcharge of 
$5. The surcharges shall be paid into the Coastal Erosion Control Fund 
under section 1367, and shall not be subject to any agents' 
commissions, company expenses allowances, or State or local premium 
taxes.
    ``(f) The Director shall not assess any surcharge under subsection 
(e) if the balance of the Fund exceeds $15,000,000.
    ``(g) The Director shall transmit to those who paid a surcharge 
under subsection (e)--
            ``(1) an annual report describing the expenditures of the 
        Fund during the preceding fiscal year; and
            ``(2) any unobligated funds that remain in the Fund at the 
        end of fiscal year 1997.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to any contract for flood insurance under the National Flood 
Insurance Act of 1968 issued or renewed after the date of enactment of 
this Act.

SEC. 5. INSURANCE RATE INCENTIVES FOR EROSION MITIGATION EFFORTS.

    Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101 et seq.), as amended by sections 2 and 3, is further amended by 
adding at the end the following new section:

``SEC. 1368. INSURANCE RATE INCENTIVES FOR EROSION MITIGATION EFFORTS.

    ``(a) Preferred Erosion Mitigation Measures.--The Director shall 
evaluate the effectiveness of the erosion mitigation measures funded 
under section 1366 and shall publish a list of the most effective of 
such measures in the Federal Register.
    ``(b) Rate Incentives for Communities.--The Director shall provide 
incentives in the form of adjustments in the premium rates for flood 
insurance coverage in areas that the Director determines have 
implemented erosion mitigation measures contained in the list published 
pursuant to subsection (a).''.
Local Innovation and Coastal Protection Act of 1993 - Amends the National Flood Insurance Act of 1968 to require the Director of the Federal Emergency Management Agency to make grants ($500,000 maximum with matching fund requirements) from the Coastal Erosion Control Fund (established by this Act) to States and qualifying communities for an erosion mitigation demonstration program. 
Gives grant priority to projects that:  (1) have multiple location applicability; (2) broaden existing erosion control techniques; or (3) rely on natural designs rather than structural alterations. 
Authorizes appropriations. 
Establishes in the Treasury the Coastal Erosion Control Fund. Requires the Director to:  (1) assess an annual five-dollar flood insurance premium mitigation surcharge to be paid into such Fund, unless the Fund's balance exceeds $15 million; (2) evaluate and publish a list of the most effective erosion mitigation measures; and (3) provide flood insurance rate incentives for erosion mitigation efforts.
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