Sec. 407. Exclusion of service providers from participation in the National Flood Insurance Program
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Part C of chapter II of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4081 et seq. ), as amended by section 404, is amended by adding at the end the following: In this section: The term excluded service provider means a service provider that is excluded by the Administrator under this section from participation in the National Flood Insurance Program. The term service provider means any attorney, accountant, appraiser, adjuster, engineer, or other individual or entity that directly or indirectly provides, has provided, or is likely to provide services to the National Flood Insurance Program.
The term should know — means that a person, with respect to information, acts in deliberate ignorance of, or in reckless disregard of, the truth or falsity of the information; and does not require specific intent to defraud. The Administrator may not make any payment or reimbursement for any service furnished under this title by a service provider excluded under this section during the period of exclusion. The Administrator may not enter into or extend any contract or agreement under this title with a service provider excluded under this section during the period of exclusion.
The Administrator may waive the applicability of paragraph
(1)or
(2)to a particular transaction upon making a written determination that the waiver is essential for the operation of the National Flood Insurance Program. The Administrator may exclude from participation in the National Flood Insurance Program a service provider— that is criminally convicted or found civilly liable (as applicable) for— any act in connection with obtaining, attempting to obtain, or performing a contract or subcontract for the National Flood Insurance Program; fraud, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating Federal tax laws, or receiving stolen property; an act relating to fraud, corruption, breach of fiduciary responsibility, or other financial misconduct in connection with the business of insurance; any other act indicating a lack of business integrity or business honesty that seriously and directly affects the responsibility of a service provider to provide services to the National Flood Insurance Program; or attempting, soliciting, or conspiring to commit an act described in subparagraphs
(A)through (D); that is, at the time of the exclusion under this subsection, debarred, suspended, or otherwise excluded from any procurement or nonprocurement activity (within the meaning of section 2455 of the Federal Acquisition Streamlining Act of 1994 ( 31 U.S.C. 6101 note; Public Law 103–355 )); whose license to provide professional services has been revoked, suspended, restricted, or not renewed, by a State licensing authority for reasons relating to the provider's professional competence, professional performance, or financial integrity; that surrendered a license described in paragraph
(3)while a formal disciplinary proceeding was pending before a State licensing authority, if the proceeding concerned the provider's professional competence, professional performance, or financial integrity; that has provided professional services to the National Flood Insurance Program— at a price or rate substantially higher than the provider's customary charge for such services; in a manner that substantially exceeds the needs of the National Flood Insurance Program; or that are of a quality that fails to meet professionally recognized standards for those services; that has violated the terms of a contract or agreement related to the National Flood Insurance Program to an extent so serious as to justify exclusion under this subsection, such as— willful failure to perform in accordance with the terms of a contract or agreement related to the National Flood Insurance Program; or a history of failure to perform, or of unsatisfactory performance of, a contract or agreement related to the National Flood Insurance Program; that has engaged in conduct detrimental to the National Flood Insurance Program so serious or compelling in nature that it affects the responsibility of the service provider to provide services to the National Flood Insurance Program; or that, in the case of an attorney, has committed an act subject to disbarment under paragraph (1), regardless of criminal or civil findings of liability. The Administrator may exclude from participation in the National Flood Insurance Program a service provider that— is an entity directly or indirectly owned, or with a control interest of 5 percent or more held, by an individual or entity excluded from participation under this section; or directly or indirectly owns, has a control interest in, or is an officer or managing employee of an entity excluded under this section; and knows or should know of the action constituting the basis for the entity's exclusion. Before excluding a service provider under this section, the Administrator shall issue a notice of proposed exclusion to the service provider, by certified mail, return receipt requested, that states— that the exclusion is being considered; the reasons for the proposed exclusion in terms sufficient to put the service provider on notice of the conduct or transaction upon which it is based; the cause relied upon under subsection
(c)for proposing exclusion; that, not later than 30 days after receipt of the notice, the service provider may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed exclusion, including any additional specific information that raises a genuine dispute over the material facts; the Administrator’s procedures governing exclusion decision-making; the effect of the issuance of the notice of proposed exclusion; and the potential effect of an actual exclusion. In the case of a proposed exclusion under this section based on a criminal conviction or civil judgment, or in which there is no genuine dispute over material facts, the Administrator shall make an exclusion decision on the basis of all the information in the administrative record, including any submission made by the service provider. The Administrator shall make a decision under clause
(i)not later than— 30 days after receipt of any information and argument submitted by the service provider in opposition to the proposed exclusion, unless the Administrator extends that period for good cause; or if the service provider does not submit any information or argument in opposition to the proposed exclusion, 60 days after the date on which the Administrator issues the notice of proposed exclusion under paragraph (1), unless the Administrator extends that period for good cause. In the case of a proposed exclusion under this section in which additional proceedings are necessary to resolve disputed material facts, the Administrator shall prepare written findings of fact. The Administrator shall base a determination under clause
(i)on the facts as found, together with any information and argument submitted by the service provider and any other information in the administrative record. The Administrator— may refer a matter involving disputed material facts to an administrative law judge for findings of fact; and may reject any findings of fact made under subclause (I), in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous. The Administrator shall make a decision regarding a proposed exclusion under this subparagraph after the conclusion of the proceedings with respect to disputed facts. In the case of any proposed exclusion under this section that is not based on a criminal conviction or civil judgment, the cause for exclusion shall be established by a preponderance of the evidence. If the Administrator decides to exclude a service provider from participation in the National Flood Insurance Program under this section, the Administrator shall provide the service provider prompt notice by certified mail, return receipt requested— referring to the notice of proposed exclusion; specifying the reasons for exclusion; and stating the period of exclusion, including effective dates. If the Administrator decides not to exclude a service provider from participation in the National Flood Insurance Program under this section, the Administrator shall promptly notify the service provider, by certified mail, return receipt requested. A determination relating to the appropriateness of excluding a service provider under this section or the length of such an exclusion is committed to the Administrator’s sole discretion, but in making such a determination, the Administrator shall consider— the nature of any services involved and the circumstances under which they were provided; the degree of culpability and history of prior offenses or improper conduct of the service provider involved; and such other matters as justice may require. The Administrator shall— promptly notify the appropriate agency or authority having responsibility for the licensing or certification of a service provider excluded under this section of the fact of the exclusion, as well as the reasons for the exclusion; request that appropriate investigations be made and sanctions invoked in accordance with applicable law and policy; and request that the agency or authority keep the Administrator fully and currently informed with respect to any actions taken in response to the request. For the purposes of this section, an individual or entity shall be considered to have been convicted of a criminal offense if— a judgment of conviction for the offense has been entered against the individual or entity by a Federal, State, or local court; there has been a finding of guilt against the individual or entity by a Federal, State, or local court with respect to the offense; a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court with respect to the offense; or the case of an individual, the individual has entered a first offender or other program pursuant to which a judgment of conviction for the offense has been withheld. A determination of conviction under subparagraph
(A)shall be made without regard to the pendency or outcome of any appeal (other than a judgment of acquittal based on innocence) or request for relief on behalf of the individual or entity. This section shall not be construed to limit or supersede any other Federal or State criminal or civil action or Federal suspension or debarment proceeding. .
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- Pub. L. 103-355
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Sec. 407
Exclusion of service providers from participation in the National Flood Insurance Program
Pub. L.Pub. L. 103-355
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