[House Report 115-304]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-304
======================================================================
21ST CENTURY FLOOD REFORM ACT
_______
September 11, 2017.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2874]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2874) to achieve reforms to improve the
financial stability of the National Flood Insurance Program, to
enhance the development of more accurate estimates of flood
risk through new technology and better maps, to increase the
role of private markets in the management of flood insurance
risks, and to provide for alternative methods to insure against
flood peril, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``21st Century Flood
Reform Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
TITLE I--POLICYHOLDER PROTECTIONS AND INFORMATION
Sec. 101. Annual limitation on premium increases.
Sec. 102. Flood insurance affordability program.
Sec. 103. Disclosure of premium methodology.
Sec. 104. Consideration of coastal and inland locations in premium
rates.
Sec. 105. Monthly installment payment of premiums.
Sec. 106. Enhanced clear communication of flood risks.
Sec. 107. Availability of flood insurance information upon request.
Sec. 108. Disclosure of flood risk information upon transfer of
property.
Sec. 109. Voluntary community-based flood insurance pilot program.
Sec. 110. Extension of National Flood Insurance Program.
TITLE II--INCREASING CONSUMER CHOICE THROUGH PRIVATE MARKET DEVELOPMENT
Sec. 201. Elimination of non-compete requirement.
Sec. 202. Public availability of program information.
Sec. 203. Refund of premiums upon cancellation of policy because of
replacement with private flood insurance.
Sec. 204. Provision of private flood insurance by mutual aid societies.
Sec. 205. GAO study of flood damage savings accounts.
Sec. 206. Demonstration program for flood damage savings accounts.
TITLE III--MAPPING FAIRNESS
Sec. 301. Use of other risk assessment tools in determining premium
rates.
Sec. 302. Appeals regarding existing flood maps.
Sec. 303. Appeals and publication of projected special flood hazard
areas.
Sec. 304. Communication and outreach regarding map changes.
Sec. 305. Sharing and use of maps and data.
TITLE IV--PROTECTING CONSUMERS AND INDIVIDUALS THROUGH IMPROVED
MITIGATION
Sec. 401. Provision of Community Rating System premium credits to
maximum number of communities practicable.
TITLE V--PROGRAM INTEGRITY
Sec. 501. Independent actuarial review.
Sec. 502. Adjustments to homeowner flood insurance affordability
surcharge.
Sec. 503. National Flood Insurance Reserve Fund compliance.
Sec. 504. Designation and treatment of multiple-loss properties.
Sec. 505. Elimination of coverage for properties with excessive
lifetime claims.
Sec. 506. Addressing tomorrow's high-risk structures today.
Sec. 507. Pay for performance and streamlining costs and reimbursement.
Sec. 508. Enforcement of mandatory purchase requirements.
Sec. 509. Satisfaction of mandatory purchase requirement in States
allowing all-perils policies.
Sec. 510. Flood insurance purchase requirements.
Sec. 511. Clarifications; deadline for approval of claims.
Sec. 511. GAO study of simplification of National Flood Insurance
Program.
TITLE I--POLICYHOLDER PROTECTIONS AND INFORMATION
SEC. 101. ANNUAL LIMITATION ON PREMIUM INCREASES.
Section 1308(e) of the National Flood Insurance Act of 1968 (42
U.S.C. 4015(e)) is amended--
(1) in paragraph (1), by striking ``18 percent'' and
inserting ``15 percent''; and
(2) in paragraph (2), by striking ``5 percent'' and inserting
``8 percent''.
SEC. 102. FLOOD INSURANCE AFFORDABILITY PROGRAM.
Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011
et seq.) is amended by adding at the end the following new section:
``SEC. 1326. FLOOD INSURANCE AFFORDABILITY PROGRAM.
``(a) Authority.--The Administrator shall carry out a program under
this section to provide financial assistance, through State programs
carried out by participating States, for eligible low-income households
residing in eligible properties to purchase policies for flood
insurance coverage made available under this title.
``(b) Participation.--Participation in the program under this section
shall be voluntary on the part of a State or consortium of States.
``(c) State Administration.--Each participating State shall delegate
to a State agency or nonprofit organization the responsibilities for
administrating the State's program under this section.
``(d) Eligible Households.--
``(1) In general.--During any fiscal year, assistance under
the program under this section may be provided only for a
household that has an income, as determined for such fiscal
year by the participating State in which such household
resides, that is less than the income limitation established
for such fiscal year for purposes of the State program by the
participating State, except that--
``(A) assistance under the program under this section
may not be provided for a household having a income
that exceeds the greater of--
``(i) the amount equal to 150 percent of the
poverty level for such State; or
``(ii) the amount equal to 60 percent of the
median income of households residing in such
State; and
``(B) a State may not exclude a household from
eligibility in a fiscal year solely on the basis of
household income if such income is less than 110
percent of the poverty level for the State in which
such household resides.
``(2) State verification of income eligibility.--In verifying
income eligibility for purposes of paragraph (1), the
participating State may apply procedures and policies
consistent with procedures and policies used by the State
agency administering programs under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), under title XX of
the Social Security Act (42 U.S.C. 1397 et seq.), under
subtitle B of title VI of the Omnibus Budget Reconciliation Act
of 1981 (42 U.S.C. 9901 et seq.; relating to community services
block grant program), under any other provision of law that
carries out programs which were administered under the Economic
Opportunity Act of 1964 (42 U.S.C. 2701 et seq.) before August
13, 1981, or under other income assistance or service programs
(as determined by the State).
``(3) Certification by state of eligibility households.--For
each fiscal year, each participating State shall certify to the
Administrator compliance of households who are to be provided
assistance under the State program during such fiscal year with
the income requirements under paragraph (1).
``(e) Eligible Properties.--Assistance under the program under this
section may be provided only for a residential property--
``(1) that has 4 or fewer residences;
``(2) that is owned and occupied by an eligible household;
``(3) for which a base flood elevation is identified on a
flood insurance rate map of the Administrator that is in
effect;
``(4) for which such other information is available as the
Administrator considers necessary to determine the flood risk
associated with such property; and
``(5) that is located in a community that is participating in
the national flood insurance program.
``(f) Types of Assistance.--Under the program under this section, a
participating State shall elect to provide financial assistance for
eligible households in one of the following forms:
``(1) Limitation on rate increases.--By establishing a
limitation on the rate of increases in the amount of chargeable
premiums paid by eligible households for flood insurance
coverage made available under this title.
``(2) Limitation on rates.--By establishing a limitation on
the amount of chargeable premiums paid by eligible households
for flood insurance coverage made available under this title.
``(g) Notification to FEMA.--Under the program under this section, a
participating State shall, on a fiscal year basis and at the time and
in the manner provided by the Administrator--
``(1) identify for the Administrator the eligible households
residing in the State who are to be provided assistance under
the State program during such fiscal year; and
``(2) notify the Administrator of the type and levels of
assistance elected under subsection (f) to be provided under
the State program with respect to such eligible households
residing in the State.
``(h) Amount of Assistance.--Under the program under this section, in
each fiscal year the Administrator shall, notwithstanding section 1308,
make flood insurance coverage available for purchase by households
identified as eligible households for such fiscal year by a
participating State pursuant to subsection (e) at chargeable premium
rates that are discounted by an amount that is based on the type and
levels of assistance elected pursuant to subsection (f) by the
participating State for such fiscal year.
``(i) Billing Statement.--In the case of an eligible household for
which assistance under the program under this section is provided with
respect to a policy for flood insurance coverage, the annual billing
statement for such policy shall include statements of the following
amounts:
``(1) The estimated risk premium rate for the property under
section 1307(a)(1).
``(2) If applicable, the estimated risk premium rate for the
property under section 1307(a)(2).
``(3) The chargeable risk premium rate for the property
taking into consideration the discount pursuant to subsection
(h).
``(4) The amount of the discount pursuant to subsection (h)
for the property.
``(5) The number and dollar value of claims filed for the
property, over the life of the property, under a flood
insurance policy made available under the Program and the
effect, under this Act, of filing any further claims under a
flood insurance policy with respect to that property.
``(j) Funding Through State Affordability Surcharges.--
``(1) Imposition and collection.--Notwithstanding section
1308, for each fiscal year in which flood insurance coverage
under this title is made available for properties in a
participating State at chargeable premium rates that are
discounted pursuant to subsection (f), the Administrator shall
impose and collect a State affordability surcharge on each
policy for flood insurance coverage for a property located in
such participating State that is (A) not a residential property
having 4 or fewer residences, or (B) is such a residential
property but is owned by a household that is not an eligible
household for purposes of such fiscal year.
``(2) Amount.--The amount of the State affordability
surcharge imposed during a fiscal year on each such policy for
a property in a participating State shall be--
``(A) sufficient such that the aggregate amount of
all such State affordability surcharges imposed on
properties in such participating State during such
fiscal year is equal to the aggregate amount by which
all policies for flood insurance coverage under this
title sold during such fiscal year for properties owned
by eligible households in the participating State are
discounted pursuant to subsection (f); and
``(B) the same amount for each property in the
participating State being charged such a surplus.
``(k) Treatment of Other Surcharges.--The provision of assistance
under the program under this section with respect to any property and
any limitation on premiums or premium increases pursuant to subsection
(f) for the property shall not affect the applicability or amount of
any surcharge under section 1308A for the property, of any increase in
premiums charged for the property pursuant to section 1310A(c), or of
any equivalency fee under section 1308B for the property.
``(l) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Participating state.--The term `participating State'
means, with respect to a fiscal year, a State that is
participating in the program under this section for such fiscal
year.
``(2) Eligible household.--The term `eligible household'
means, with respect to a fiscal year and a participating State,
a household that has an income that is less than the amount of
the income limitation for the fiscal year established for
purposes of the State program of such participating State
pursuant to subsection (g)(1).
``(3) Poverty level.--The term `poverty level'' means, with
respect to a household in any State, the income poverty line as
prescribed and revised at least annually pursuant to section
673(2) of the Community Services Block Grant Act (42 U.S.C.
9902(2)), as applicable to such State.
``(4) State.--The term `State' shall include a consortium of
States established for purposes of administrating the program
under this section with respect to the member States of the
consortium.
``(5) State program.--The term `State program' means a
program carried out in compliance with this section by a
participating State in conjunction with the program under this
section of the Administrator.
``(m) Regulations.--The Administrator shall issue such regulations as
may be necessary to carry out the program under this section.''.
SEC. 103. DISCLOSURE OF PREMIUM METHODOLOGY.
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 subsection:
``(n) Disclosure of Premium Methodology.--
``(1) Disclosure.--Six months prior to the effective date of
risk premium rates, the Administrator shall cause to be
published in the Federal Register an explanation of the bases
for, and methodology used to determine, the chargeable premium
rates to be effective for flood insurance coverage under this
title.
``(2) Alignment with industry practices.--The disclosure
required under paragraph (1) shall, to the extent practicable,
be aligned with industry patterns and practices and shall
include information and data recommended by the State insurance
commissioners guidelines on rate filings.
``(3) Public meetings.--The Administrator shall, on an annual
basis, hold at least one public meeting in each of the
geographical regions of the United States, as defined by the
Administrator for purposes of the National Flood Insurance
Program, for the purpose of explaining the methodology
described in paragraph (1) and answering questions and
receiving comments regarding such methodology. The
Administrator shall provide notice of each such public meeting
in advance, in such manner, and in using such means as are
reasonably designed to notify interested parties and members of
the public of the date and time, location, and purpose of such
meeting, and of how to submit questions or comments.''.
SEC. 104. CONSIDERATION OF COASTAL AND INLAND LOCATIONS IN PREMIUM
RATES.
(a) Estimates of Premium Rates.--Subparagraph (A) of section
1307(a)(1) of the National Flood Insurance Act of 1968 (42 U.S.C.
4014(a)(1)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end; and
(2) by adding at the end the following new clause:
``(iii) the differences in flood risk for
properties impacted by coastal flood risk and
properties impacted by riverine, or inland
flood risk; and''.
(b) Establishment of Chargeable Premium Rates.--Paragraph (1) of
section 1308(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4015(b)(1)) is amended by inserting ``due to differences in flood risk
resulting from coastal flood hazards and riverine, or inland flood
hazards and'' after ``including differences in risks''.
(c) Revised Rates.--Not later than the expiration of the two-year
period beginning on the date of the enactment of this Act, the
Administrator of the Federal Emergency Management Agency shall revise
risk premium rates under the National Flood Insurance Program to
implement the amendments made by this section.
SEC. 105. MONTHLY INSTALLMENT PAYMENT OF PREMIUMS.
Subsection (g) of section 1308 of the National Flood Insurance Act of
1968 (42 U.S.C. 4015(g)) is amended--
(1) by striking the subsection designation and all that
follows through ``With respect'' and inserting the following:
``(g) Frequency of Premium Collection.--
``(1) Options.--With respect''; and
(2) by adding at the end the following new paragraph:
``(2) Monthly installment payment of premiums.--
``(A) Exemption from rulemaking.--Until such time as
the Administrator promulgates regulations implementing
paragraph (1) of this subsection, the Administrator may
adopt policies and procedures, notwithstanding any
other provisions of law and in alignment and consistent
with existing industry escrow and servicing standards,
necessary to implement such paragraph without
undergoing notice and comment rulemaking and without
conducting regulatory analyses otherwise required by
statute, regulation, or Executive order.
``(B) Installment plan fee.--The Administrator may
charge policyholders choosing to pay premiums in
monthly installments a fee not to exceed $50 annually.
``(C) Pilot program.--The Administrator may initially
implement paragraph (1) of this subsection as a pilot
program that provides for a gradual phase-in of
implementation.''.
SEC. 106. ENHANCED CLEAR COMMUNICATION OF FLOOD RISKS.
(a) In General.--Subsection (l) of section 1308 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015(l)) is amended to read as
follows:
``(l) Clear Communications.--
``(1) Newly issued and renewed policies.--For all policies
for flood insurance coverage under the National Flood Insurance
Program that are newly issued or renewed, the Administrator
shall clearly communicate to policyholders--
``(A) their full flood risk determinations,
regardless of whether their premium rates are full
actuarial rates; and
``(B) the number and dollar value of claims filed for
the property, over the life of the property, under a
flood insurance policy made available under the Program
and the effect, under this Act, of filing any further
claims under a flood insurance policy with respect to
that property.''.
(b) Effective Date.--Subsection (l) of section 1308 of the National
Flood Insurance Act of 1968, as added by subsection (a) of this
section, shall take effect beginning upon the expiration of the 12-
month period that begins on the date of the enactment of this Act. Such
subsection (l), as in effect immediately before the amendment made by
paragraph (1), shall apply during such 12-month period.
SEC. 107. AVAILABILITY OF FLOOD INSURANCE INFORMATION UPON REQUEST.
Section 1313 of the National Flood Insurance Act of 1968 (42 U.S.C.
4020) is amended--
(1) by inserting ``(a) Public Information and Data.--'' after
``Sec. 1313.''; and
(2) by adding at the end the following new subsection:
``(b) Availability of Flood Insurance Information Upon Request.--Not
later than 30 days after a request for such information by the current
owner of a property, the Administrator shall provide to the owner any
information, including historical information, available to the
Administrator on flood insurance program coverage, payment of claims,
and flood damages for the property at issue, and any information the
Administrator has on whether the property owner may be required to
purchase coverage under the National Flood Insurance Program due to
previous receipt of Federal disaster assistance, including assistance
provided by the Small Business Administration, the Department of
Housing and Urban Development, or the Federal Emergency Management
Agency, or any other type of assistance that subjects the property to
the mandatory purchase requirement under section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a).''.
SEC. 108. DISCLOSURE OF FLOOD RISK INFORMATION UPON TRANSFER OF
PROPERTY.
(a) In General.--Chapter 1 of the National Flood Insurance Act of
1968 (42 U.S.C. 4011 et seq.), as amended by the preceding provisions
of this Act, is further amended by adding at the end the following new
section:
``SEC. 1327. DISCLOSURE OF FLOOD RISK INFORMATION UPON TRANSFER OF
PROPERTY.
``(a) Requirement for Participation in Program.--After September 30,
2022, no new flood insurance coverage may be provided under this title
for any real property located in any area (or subdivision thereof)
unless an appropriate body has imposed, by statute or regulation, a
duty on any seller or lessor of improved real estate located in such
area to provide to any purchaser or lessee of such property a property
flood hazard disclosure which the Administrator has determined meets
the requirements of subsection (b).
``(b) Disclosure Requirements.--A property flood hazard disclosure
for a property shall meet the requirements of this subsection only if
the disclosure--
``(1) is made in writing;
``(2) discloses any actual knowledge of the seller or lessor
of--
``(A) prior physical damage caused by flood to any
building located on the property;
``(B) prior insurance claims for losses covered under
the National Flood Insurance Program or private flood
insurance with respect to such property;
``(C) any previous notification regarding the
designation of the property as a repetitive loss or
severe repetitive loss property; and
``(D) any Federal legal obligation to obtain and
maintain flood insurance running with the property,
such as any obligation due to a previous form of
disaster assistance under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act received
by any owner of the property; and
``(3) is delivered by or on behalf of the seller or lessor to
the purchaser or lessee before such purchaser or lessee becomes
obligated under any contract for purchase or lease of the
property.''.
(b) Availability of Flood Insurance Coverage.--Subsection (c) of
section 1305 of the National Flood Insurance Act of 1968 (42 U.S.C.
4012(c)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(3) given satisfactory assurance that by September 31,
2022, property flood hazard disclosure requirements will have
been adopted for the area that meet the requirements of section
1326.''.
SEC. 109. VOLUNTARY COMMUNITY-BASED FLOOD INSURANCE PILOT PROGRAM.
(a) Establishment.--The Administrator of the Federal Emergency
Management Agency (in this section referred to as the
``Administrator'') may carry out a community-based flood insurance
pilot program to make available, for purchase by participating
communities, a single, community-wide flood insurance policy under the
National Flood Insurance Program that--
(1) covers all residential and non-residential properties
within the community; and
(2) satisfies, for all such properties within the community,
the mandatory purchase requirements under section 102 of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a).
(b) Participation.--Participation by a community in the pilot program
under this section shall be entirely voluntary on the part of the
community.
(c) Requirements for Community-wide Policies.--The Administrator
shall ensure that a community-wide flood insurance policy made
available under the pilot program under this section incorporates the
following requirements:
(1) A mapping requirement for properties covered by the
policy.
(2) A cap on premiums.
(3) A deductible.
(4) Certification or accreditation of mitigation
infrastructure when available and appropriate.
(5) A community audit.
(6) The Community Rating System under section 1315(b) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4022(b)).
(7) A method of preventing redundant claims payments by the
National Flood Insurance Program in the case of a claim by an
individual property owner who is covered by a community-wide
flood insurance policy and an individual policy obtained
through the Program.
(8) Coverage for damage arising from flooding that complies
with the standards under the National Flood Insurance Program
appropriate to the nature and type of property covered.
(d) Timing.--The Administrator may establish the demonstration
program under this section not later than the expiration of the 180-day
period beginning on the date of the enactment of this Act and the
program shall terminate on September 30, 2022.
(e) Definition of Community.--For purposes of this section, the term
``community'' means any unit of local government, within the meaning
given such term under the laws of the applicable State.
SEC. 110. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
(a) Financing.--Section 1309(a) of the National Flood Insurance Act
of 1968 (42 U.S.C. 4016(a)) is amended by striking ``September 30,
2017'' and inserting ``September 30, 2022''.
(b) Program Expiration.--Section 1319 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4026) is amended by striking ``September 30,
2017'' and inserting ``September 30, 2022''.
TITLE II--INCREASING CONSUMER CHOICE THROUGH PRIVATE MARKET DEVELOPMENT
SEC. 201. ELIMINATION OF NON-COMPETE REQUIREMENT.
Section 1345 of the National Flood Insurance Act of 1968 (42 U.S.C.
4081) is amended by adding at the end the following new subsection:
``(f) Authority To Provide Other Flood Coverage.--
``(1) In general.--The Administrator may not, as a condition
of participating in the Write Your Own Program (as such term is
defined in section 1370(a)) or in otherwise participating in
the utilization by the Administrator of the facilities and
services of insurance companies, insurers, insurance agents and
brokers, and insurance adjustment organizations pursuant to the
authority in this section, nor as a condition of eligibility to
engage in any other activities under the National Flood
Insurance Program under this title, restrict any such company,
insurer, agent, broker, or organization from offering and
selling private flood insurance (as such term is defined in
section 102(b)(9) of the Flood Disaster Protection Act of 1973
(42 U.S.C. 4012a(b)(9))).
``(2) Financial assistance/subsidy arrangement.--After the
date of the enactment of this subsection--
``(A) the Administrator may not include in any
agreement entered into with any insurer for
participation in the Write Your Own Program any
provision establishing a condition prohibited by
paragraph (1), including the provisions of Article XIII
of the Federal Emergency Management Agency, Federal
Insurance Administration, Financial Assistance/Subsidy
Arrangement, as adopted pursuant to section 62.23(a) of
title 44 of the Code of Federal Regulations; and
``(B) any such provision in any such agreement
entered into before such date of enactment shall not
have any force or effect, and the Administrator may not
take any action to enforce such provision.''.
SEC. 202. PUBLIC AVAILABILITY OF PROGRAM INFORMATION.
Part C of chapter II of the National Flood Insurance Act of 1968 (42
U.S.C. 4081 et seq.) is amended by adding at the end the following new
section:
``SEC. 1349. PUBLIC AVAILABILITY OF PROGRAM INFORMATION.
``(a) Flood Risk Information.--
``(1) In general.--Except as provided in paragraph (2), to
facilitate the National Flood Insurance Program becoming a
source of information and data for research and development of
technology that better understands flooding, the risk of
flooding, and the predictability of perils of flooding, the
Administrator shall make publicly available all data, models,
assessments, analytical tools, and other information in the
possession of the Administrator relating to the National Flood
Insurance Program under this title that is used in assessing
flood risk or identifying and establishing flood elevations and
premiums, including--
``(A) data relating to risk on individual properties
and loss ratio information and other information
identifying losses under the program;
``(B) current and historical policy information,
limited to the amount and term only, for properties
currently covered by flood insurance and for properties
that are no longer covered by flood insurance;
``(C) current and historical claims information,
limited to the date and amount paid only, for
properties currently covered by flood insurance and for
properties that are no longer covered by flood
insurance;
``(D) identification of whether a property was
constructed before or after the effective date of the
first flood insurance rate map for a community;
``(E) identification of properties that have been
mitigated through elevation, a buyout, or any other
mitigation action; and
``(F) identification of unmitigated multiple-loss
properties.
``(2) Open source data system.--In carrying out paragraph
(1), the Administrator shall establish an open source data
system by which all information required to be made publicly
available by such subsection may be accessed by the public on
an immediate basis by electronic means.
``(b) Community Information.--Not later than the expiration of the
12-month period beginning upon the date of the enactment of this
section, the Administrator shall establish and maintain a publicly
searchable database that provides information about each community
participating in the National Flood Insurance Program, which shall
include the following information:
``(1) The status of the community's compliance with the
National Flood Insurance Program, including any findings of
noncompliance, the status of any enforcement actions initiated
by a State or by the Administrator, and the number of days of
any such continuing noncompliance.
``(2) The number of properties located in the community's
special flood hazard areas that were built before the effective
date of the first flood insurance rate map for the community.
``(3) The number of properties located in the community's
special flood hazard areas that were built after the effective
date of the first flood insurance rate map for the community.
``(4) The total number of current and historical claims
located outside the community's special flood hazard areas.
``(5) The total number of multiple-loss properties in the
community.
``(6) The portion of the community, stated as a percentage
and in terms of square miles, that is located within special
flood hazard areas.
``(c) Identification of Properties.--The information provided
pursuant to subsections (a) and (b) shall be based on data that
identifies properties at the zip code or census block level, and shall
include the name of the community and State in which a property is
located.
``(d) Protection of Personally Identifiable Information.--The
information provided pursuant to subsections (a) and (b) shall be
disclosed in a format that does not reveal individually identifiable
information about property owners in accordance with the section 552a
of title 5, United States Code.
``(e) Definition of Loss Ratio.--For purposes of this section, the
term `loss ratio' means, with respect to the National Flood Insurance
Program, the ratio of the amount of claims paid under the Program to
the amount of premiums paid under the Program.''.
SEC. 203. REFUND OF PREMIUMS UPON CANCELLATION OF POLICY BECAUSE OF
REPLACEMENT WITH PRIVATE FLOOD INSURANCE.
Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C.
4013) is amended by adding at the end the following new subsection:
``(e) Refund of Unearned Premiums for Policies Canceled Because of
Replacement With Private Flood Insurance.--
``(1) Required refund.--Subject to subsection (c), if at any
time an insured under a policy for flood insurance coverage for
a property that is made available under this title cancels such
policy because other duplicate flood insurance coverage for the
same property has been obtained from a source other than the
National Flood Insurance Program under this title, the
Administrator shall refund to the former insured a portion of
the premiums paid for the coverage made available under this
title, as determined consistent with industry practice
according to the portion of the term of the policy that such
coverage was in effect, but only if a copy of declarations page
of the new policy obtained from a source other than the program
under this title is provided to the Administrator.
``(2) Effective date of cancellation.--For purposes of this
subsection, a cancellation of a policy for coverage made
available under the national flood insurance program under this
title, for the reason specified in paragraph (1), shall be
effective--
``(A) on the effective date of the new policy
obtained from a source other than the program under
this title, if the request for such cancellation was
received by the Administrator before the expiration of
the 6-month period beginning on the effective date of
the new policy; or
``(B) on the date of the receipt by the Administrator
of the request for cancellation, if the request for
such cancellation was received by the Administrator
after the expiration of the 6-month period beginning on
the effective date of the new policy.
``(3) Prohibition of refunds for properties receiving
increased cost of compliance claims.--No premium amounts paid
for coverage made available under this title may be refunded
pursuant to this subsection--
``(A) with respect to coverage for any property for
which measures have been implemented using amounts
received pursuant to a claim under increased cost of
compliance coverage made available pursuant to section
1304(b); or
``(B) if a claim has been paid or is pending under
the policy term for which the refund is sought.''.
SEC. 204. PROVISION OF PRIVATE FLOOD INSURANCE BY MUTUAL AID SOCIETIES.
Paragraph (7) of section 102(b) of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4012a(c)) is amended to read as follows:
``(7) Definitions.--In this section:
``(A) Federal flood insurance.--The term `Federal
flood insurance' means an insurance policy made
available under the National Flood Insurance Act of
1968 (42 U.S.C. 4001 et seq.).
``(B) Flood insurance.--The term `flood insurance'
means--
``(i) Federal flood insurance; and
``(ii) private flood insurance.
``(C) Mutual aid society.--The term `mutual aid
society' means an organization--
``(i) the members of which--
``(I) share a common set of ethical
or religious beliefs; and
``(II) in accordance with the beliefs
described in subclause (I), agree to
cover expenses arising from damage to
property of the members of the
organization, including damage caused
by flooding; and
``(ii) that has a demonstrated history of
fulfilling the terms of agreements to cover
expenses arising from damage to property of the
members of the organization caused by flooding.
``(D) Private flood insurance.--The term `private
flood insurance' means--
``(i) an insurance policy that--
``(I) is issued by an insurance
company that is--
``(aa) licensed, admitted, or
otherwise approved to engage in
the business of insurance in
the State in which the insured
building is located, by the
insurance regulator of that
State; or
``(bb) eligible as a
nonadmitted insurer to provide
insurance in the home State of
the insured, in accordance with
sections 521 through 527 of the
Nonadmitted and Reinsurance
Reform Act of 2010 (15 U.S.C.
8201 through 8206);
``(II) is issued by an insurance
company that is not otherwise
disapproved as a surplus lines insurer
by the insurance regulator of the State
in which the property to be insured is
located; and
``(III) provides flood insurance
coverage that complies with the laws
and regulations of that State; or
``(ii) an agreement with a mutual aid society
for such society to cover expenses arising from
damage to property of the members of such
society caused by flooding, unless the State in
which the property to be insured is located
has--
``(I) determined that the specific
mutual aid society may not provide such
coverage or provide such coverage in
such manner; or
``(II) specifically provided through
law or regulation that mutual aid
societies may not provide such coverage
or provide such coverage in such
manner.
``(E) State.--The term `State' means any State of the
United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.''.
SEC. 205. GAO STUDY OF FLOOD DAMAGE SAVINGS ACCOUNTS.
(a) In General.--The Comptroller General of the United States shall
conduct a study to analyze the feasibility and effectiveness, and
problems involved, in reducing flood insurance premiums and eliminating
the need for purchase of flood insurance coverage by authorizing owners
of residential properties to establish flood damage savings accounts
described in subsection (b) in lieu of complying with the mandatory
requirements under section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a) to purchase flood insurance for such properties.
(b) Flood Damage Savings Account.--A flood damage savings account
described in this subsection is a savings account--
(1) that would be established by an owner of residential
property with respect to such property in accordance with
requirements established by the Administrator of the Federal
Emergency Management Agency; and
(2) the proceeds of which would be available for use only to
cover losses to such properties resulting from flooding,
pursuant to adjustment of a claim for such losses in the same
manner and according to the same procedures as apply to claims
for losses under flood insurance coverage made available under
the National Flood Insurance Act of 1968.
(c) Issues.--Such study shall include an analysis of, and
recommendation regarding, each of the following issues:
(1) Whether authorizing the establishment of such flood
damage savings accounts would be effective and efficient in
reducing flood insurance premiums, eliminating the need for
purchase of flood insurance coverage made available under the
National Flood Insurance Program, and reducing risks to the
financial safety and soundness of the National Flood Insurance
Fund.
(2) Possible options for structuring such flood damage
savings accounts, including--
(A) what types of institutions could hold such
accounts and the benefits and problems with each such
type of institution;
(B) considerations affecting the amounts required to
be held in such accounts; and
(C) options regarding considerations the conditions
under which such an account may be terminated.
(3) The feasibility and effectiveness, and problems involved
in, authorizing the Administrator of the Federal Emergency
Management Agency to make secondary flood insurance coverage
available under the National Flood Insurance Program to cover
the portion of flood losses or damages to properties for which
such flood damage savings accounts have been established that
exceed the amounts held in such accounts.
(4) The benefits and problems involved in authorizing the
establishment of such accounts for non-residential properties.
(d) Report.--Not later than the expiration of the 12-month period
beginning on the date of the enactment of this Act, the Comptroller
General shall submit a report to the Committee on Financial Services of
the House of Representatives, the Committee on Banking, Housing, and
Urban Affairs of the Senate, and the Administrator that sets forth the
analysis, conclusions, and recommendations resulting from the study
under this section. Such report shall identify elements that should be
taken into consideration by the Administrator in designing and carrying
out the demonstration program under section 205.
SEC. 206. DEMONSTRATION PROGRAM FOR FLOOD DAMAGE SAVINGS ACCOUNTS.
(a) Plan.--If the Comptroller General of the United States concludes
in the report required under section 205 that a demonstration program
under this section is feasible and should be considered, then the
Administrator of the Federal Emergency Management Agency shall, not
later than the expiration of the 12-month period beginning upon the
submission of the report under section 205(d), submit to the Committee
on Financial Services of the House of Representatives and the Committee
on Banking, Housing, and Urban Affairs of the Senate a plan and
guidelines for a demonstration program, to be carried out by the
Administrator, to demonstrate the feasibility and effectiveness of
authorizing the establishment of flood damage savings accounts, taking
into consideration the analysis, conclusions, and recommendations
included in such report.
(b) Authority.--The Administrator of the Federal Emergency Management
Agency shall carry out a program to demonstrate the feasibility and
effectiveness of authorizing the establishment of flood damage savings
accounts in the manner provided in plan and guidelines for the
demonstration program submitted pursuant to subsection (a).
(c) Scope.--The demonstration program under this section shall
provide for the establishment of flood damage savings accounts with
respect to not more than 5 percent of the residential properties that
have 4 or fewer residences and that are covered by flood insurance
coverage made available under the National Flood Insurance Program.
(d) Timing.--The Administrator shall commence the demonstration
program under this section not later than the expiration of the 12-
month period beginning upon the submission of the plan and guidelines
for the demonstration pursuant to subsection (a).
(e) Geographical Diversity.--The Administrator shall ensure that
properties for which flood damage savings accounts are established
under the demonstration are located in diverse geographical areas
throughout the United States.
(f) Report.--Upon the expiration of the 2-year period beginning upon
the date of the commencement of the demonstration program under this
section, the Administrator shall submit a report to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate describing and
assessing the demonstration, and setting forth conclusions and
recommendations regarding continuing and expanding the demonstration.
(g) Feasibility.--The Administrator shall implement this section only
after determining that implementation is supported by the Comptroller's
conclusions and recommendations contained in the report required under
section 205.
TITLE III--MAPPING FAIRNESS
SEC. 301. USE OF OTHER RISK ASSESSMENT TOOLS IN DETERMINING PREMIUM
RATES.
(a) Estimates of Premium Rates.--Subparagraph (A) of section
1307(a)(1) of the National Flood Insurance Act of 1968 (42 U.S.C.
4014(a)(1)(A)) is amended--
(1) in clause (ii), by striking ``and'' at the end; and
(2) by adding at the end the following new clause:
``(iv) both the risk identified by the
applicable flood insurance rate maps and by
other risk assessment data and tools, including
risk assessment models and scores from
appropriate sources; and''.
(b) Establishment of Chargeable Premium Rates.--Paragraph (1) of
section 1308(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4015(b)(1)) is amended by inserting before the semicolon at the end the
following: ``, taking into account both the risk identified by the
applicable flood insurance rate maps and by other risk assessment data
and tools, including risk assessment models and scores from appropriate
sources''.
(c) Effective Date and Regulations.--
(1) Effective date.--The amendments made by subsections (a)
and (b) shall be made, and shall take effect, upon the
expiration of the 36-month period beginning on the date of the
enactment of this Act.
(2) Regulations.--The Administrator of the Federal Emergency
Management Agency shall issue regulations necessary to
implement the amendments made by subsections (a) and (b), which
shall identify risk assessment data and tools to be used in
identifying flood risk and appropriate sources for risk
assessment models and scores to be so used. Such regulations
shall be issued not later than the expiration of the 36-month
period beginning on the date of the enactment of this Act and
shall take effect upon the expiration of such period.
SEC. 302. APPEALS REGARDING EXISTING FLOOD MAPS.
(a) In General.--Section 1360 of the National Flood Insurance Act of
1968 (42 U.S.C. 4101) is amended by adding at the end the following new
subsection:
``(k) Appeals of Existing Maps.--
``(1) Right to appeal.--Subject to paragraph (6), a State or
local government, or the owner or lessee of real property, who
has made a formal request to the Administrator to update a
flood map that the Administrator has denied may at any time
appeal such a denial as provided in this subsection.
``(2) Basis for appeal.--The basis for appeal under this
subsection shall be the possession of knowledge or information
that--
``(A) the base flood elevation level or designation
of any aspect of a flood map is scientifically or
technically inaccurate; or
``(B) factors exist that mitigate the risk of
flooding, including ditches, banks, walls, vegetation,
levees, lakes, dams, reservoirs, basin, retention
ponds, and other natural or manmade topographical
features.
``(3) Appeals process.--
``(A) Administrative adjudication.--An appeal under
this subsection shall be determined by a final
adjudication on the record, and after opportunity for
an administrative hearing.
``(B) Rights upon adverse decision.--If an appeal
pursuant to subparagraph (A) does not result in a
decision in favor of the State, local government,
owner, or lessee, such party may appeal the adverse
decision to the Scientific Resolution Panel provided
for in section 1363A, which shall recommend a non-
binding decision to the Administrator.
``(4) Relief.--
``(A) Wholly successful appeals.--In the case of a
successful appeal resulting in a policyholder's
property being removed from a special flood hazard
area, such policyholder may cancel the policy at any
time within the current policy year, and the
Administrator shall provide such policyholder a refund
in the amount of any premiums paid for such policy
year, plus any premiums paid for flood insurance
coverage that the policyholder was required to purchase
or maintain during the 2-year period preceding such
policy year.
``(B) Partially successful appeals.--In the case of
any appeal in which mitigating factors were determined
to have reduced, but not eliminated, the risk of
flooding, the Administrator shall reduce the amount of
flood insurance coverage required to be maintained for
the property concerned by the ratio of the successful
portion of the appeal as compared to the entire appeal.
The Administrator shall refund to the policyholder any
payments made in excess of the amount necessary for
such new coverage amount, effective from the time when
the mitigating factor was created or the beginning of
the second policy year preceding the determination of
the appeal, whichever occurred later.
``(C) Additional relief.--The Administrator may
provide additional refunds in excess of the amounts
specified in subparagraphs (A) and (B) if the
Administrator determines that such additional amounts
are warranted.
``(5) Recovery of costs.--When, incident to any appeal which
is successful in whole or part regarding the designation of the
base flood elevation or any aspect of the flood map, including
elevation or designation of a special flood hazard area, the
community, or the owner or lessee of real property, as the case
may be, incurs expense in connection with the appeal, including
services provided by surveyors, engineers, and scientific
experts, the Administrator shall reimburse such individual or
community for reasonable expenses to an extent measured by the
ratio of the successful portion of the appeal as compared to
the entire appeal, but not including legal services, in the
effecting of an appeal based on a scientific or technical error
on the part of the Federal Emergency Management Agency. No
reimbursement shall be made by the Administrator in respect to
any fee or expense payment, the payment of which was agreed to
be contingent upon the result of the appeal. The Administrator
may use such amounts from the National Flood Insurance Fund
established under section 1310 as may be necessary to carry out
this paragraph.
``(6) Inapplicability to community flood maps.--This
subsection shall not apply with respect to any flood map that
is in effect pursuant to certification under the standards,
guidelines, and procedures established pursuant to section
100215(m)(1)(B) of the Biggert-Waters Flood Insurance Reform
Act of 2012 (42 U.S.C. 4101a(m)(1)(B)).
``(7) Guidance.--The Administrator shall issue guidance to
implement this subsection, which shall not be subject to the
notice and comment requirements under section 553 of title 5,
United States Code.''.
(b) Deadline.--The Administrator of the Federal Emergency Management
Agency shall issue the guidance referred to section 1360(k)(7) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4101(k)(7)), as added
by the amendment made by subsection (a) of this section, not later than
the expiration of the 6-month period beginning on the date of the
enactment of this Act.
SEC. 303. APPEALS AND PUBLICATION OF PROJECTED SPECIAL FLOOD HAZARD
AREAS.
(a) Appeals.--Section 1363 of the National Flood Insurance Act of
1968 (42 U.S.C. 4104) is amended--
(1) in subsection (b), by striking the second sentence and
inserting the following: ``Any owner or lessee of real property
within the community who believes the owner's or lessee's
rights to be adversely affected by the Administrator's proposed
determination may appeal such determination to the local
government no later than 90 days after the date of the second
publication.'';
(2) in subsection (d), by striking ``subsection (e)'' and
inserting ``subsection (f)'';
(3) by redesignating subsections (e), (f), and (g) as
subsections (f), (g), and (h), respectively; and
(4) by inserting after subsection (d) the following new
subsection:
``(e) Determination by Administrator in the Absence of Appeals.--If
the Administrator has not received any appeals, upon expiration of the
90-day appeal period established under subsection (b) of this section
the Administrator's proposed determination shall become final. The
community shall be given a reasonable time after the Administrator's
final determination in which to adopt local land use and control
measures consistent with the Administrator's determination.''.
(b) Publication.--Subsection (a) of section 1363 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4104(a)) is amended by striking
``in the Federal Register''.
(c) Inapplicability to Private and Community Flood Maps.--Section
1363 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104), as
amended by the preceding provisions of this section, is further amended
by adding at the end the following new subsection:
``(i) Inapplicability to Community Flood Maps.--This section shall
not apply with respect to any flood map that is in effect pursuant to
certification under the standards, guidelines, and procedures
established pursuant to section 100215(m)(1) of the Biggert-Waters
Flood Insurance Reform Act of 2012 (42 U.S.C. 4101a(m)(1)), which shall
include procedures for providing notification and appeal rights to
individuals within the communities of the proposed flood elevation
determinations.''.
SEC. 304. COMMUNICATION AND OUTREACH REGARDING MAP CHANGES.
Paragraph (1) of section 100216(d) of the Biggert-Waters Flood
Insurance Reform Act of 2012 (42 U.S.C. 4101b(d)(1)) is amended--
(1) in subparagraph (B), by inserting ``maximum'' before
``30-day period''; and
(2) in subparagraph (C), by inserting ``maximum'' before
``30-day period''.
SEC. 305. SHARING AND USE OF MAPS AND DATA.
Subsection (b) of section 100216 of the Biggert-Waters Flood
Insurance Reform Act of 2012 (42 U.S.C. 4101b(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``and'' at the
end;
(B) in subparagraph (C), by striking the period at
the end and inserting ``; and'' ; and
(C) by adding at the end the following new
subparagraph:
``(D) consult and coordinate with the Department of
Defense, the United States Geological Survey, and the
National Oceanic and Atmospheric Administration for the
purpose of obtaining the most-up-to-date maps and other
information of such agencies, including information on
topography, water flow, and any other issues, relevant
to mapping for flood insurance purposes.''; and
(2) in paragraph (3)--
(A) in subparagraph (D), by striking ``and'' at the
end;
(B) by redesignating subparagraph (E) as subparagraph
(F); and
(C) by inserting after subparagraph (D) the following
new subparagraph:
``(E) any other information relevant to mapping for
flood insurance purposes obtained pursuant to paragraph
(1)(D); and''.
TITLE IV--PROTECTING CONSUMERS AND INDIVIDUALS THROUGH IMPROVED
MITIGATION
SEC. 401. PROVISION OF COMMUNITY RATING SYSTEM PREMIUM CREDITS TO
MAXIMUM NUMBER OF COMMUNITIES PRACTICABLE.
Subsection (b) of section 1315 of the National Flood Insurance Act of
1968 (42 U.S.C. 4022(b)) is amended--
(1) in paragraph (2), by striking ``may'' and inserting
``shall''; and
(2) in paragraph (3), by inserting ``, and the Administrator
shall provide credits to the maximum number of communities
practicable'' after ``under this program''.
TITLE V--PROGRAM INTEGRITY
SEC. 501. INDEPENDENT ACTUARIAL REVIEW.
Section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C.
4016) is amended by adding at the end the following new subsection:
``(e) Independent Actuarial Review.--
``(1) Fiduciary responsibility.--The Administrator has a
responsibility to ensure that the National Flood Insurance
Program remains financially sound. Pursuant to this
responsibility, the Administrator shall from time to time
review and eliminate nonessential costs and positions within
the Program, unless otherwise authorized or required by law, as
the Administrator determines to be necessary.
``(2) Annual independent actuarial study.--The Administrator
shall provide for an independent actuarial study of the
National Flood Insurance Program to be conducted annually,
which shall analyze the financial position of the program based
on the long-term estimated losses of the program. The
Administrator shall submit a report (together with the
independent actuarial study) annually to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate
describing the results of such study, including a determination
of whether the Program has collected revenue sufficient to
cover the administrative expenses of carrying out the flood
insurance program, which are reflected in the risk premium
rates, cost of capital, all other costs associated with the
transfer of risks, and expected claims payments during the
reporting period, and an overall assessment of the financial
status of the Program.
``(3) Determination of actuarial budget deficit.--
``(A) Requirement.--Within the report submitted under
paragraph (2), the Administrator shall issue a
determination of whether there exists an actuarial
budget deficit for the Program for the year covered in
the report. The report shall recommend any changes to
the Program, if necessary, to ensure that the program
remains financially sound.
``(B) Basis of determination.--The determination
required by subparagraph (A) shall be based solely upon
whether the portion of premiums estimated and collected
by the Program during the reporting period is
sufficient to cover the administrative expenses of
carrying out the flood insurance program, which are
reflected in the risk premium rates, cost of capital,
all other costs associated with the transfer of risk,
and expected claims payments for the reporting period.
``(4) Quarterly reports.--During each fiscal year, on a
calendar quarterly basis, the Secretary shall cause to be
published in the Federal Register or comparable method, with
notice to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate, information which shall specify--
``(A) the cumulative volume of policies that have
been underwritten under the National Flood Insurance
Program during such fiscal year through the end of the
quarter for which the report is submitted;
``(B) the types of policies insured, categorized by
risk;
``(C) any significant changes between actual and
projected claim activity;
``(D) projected versus actual loss rates;
``(E) the cumulative number of currently insured
repetitive-loss properties, severe repetitive-loss
properties, and extreme repetitive-loss properties that
have been identified during such fiscal year through
the end of the quarter for which the report is
submitted;
``(F) the cumulative number of properties that have
undergone mitigation assistance, through the National
Flood Insurance Program, during such fiscal year
through the end of the quarter for which the report is
submitted; and
``(G) the number and location, by State or territory,
of each policyholder that has been identified for such
fiscal year as an eligible household for purposes of
the flood insurance affordability program under section
1326.
The first quarterly report under this paragraph shall be
submitted on the last day of the first quarter of fiscal year
2018, or on the last day of the first full calendar quarter
following the enactment of the 21st Century Flood Reform Act,
whichever occurs later.''.
SEC. 502. ADJUSTMENTS TO HOMEOWNER FLOOD INSURANCE AFFORDABILITY
SURCHARGE.
(a) In General.--Section 1308A of the National Flood Insurance Act of
1968 (42 U.S.C. 4015a) is amended--
(1) in subsection (a), by striking the first sentence and
inserting the following: ``The Administrator shall impose and
collect a non-refundable annual surcharge, in the amount
provided in subsection (b), on all policies for flood insurance
coverage under the National Flood Insurance Program that are
newly issued or renewed after the date of the enactment of this
section.''; and
(2) by striking subsection (b) and inserting the following
new subsection:
``(b) Amount.--The amount of the surcharge under subsection (a) shall
be $40, except as follows:
``(1) Non-primary residences eligible for prp.--The amount of
the surcharge under subsection (a) shall be $125 in the case of
in the case of a policy for any property that is--
``(A) a residential property that is not the primary
residence of an individual, and
``(B) eligible for preferred risk rate method
premiums.
``(2) Non-residential properties and non-primary residences
not eligible for prp.--The amount of the surcharge under
subsection (a) shall be $275 in case of in the case of a policy
for any property that is--
``(A) a non-residential property; or
``(B) a residential property that is--
``(i) not the primary residence of an
individual; and
``(ii) not eligible for preferred risk rate
method premiums.''.
(b) Applicability.--The amendment made by subsection (a) shall apply
with respect to policies for flood insurance coverage under the
National Flood Insurance Act of 1968 that are newly issued or renewed
after the expiration of the 12-month period beginning on the date of
the enactment of this Act.
SEC. 503. NATIONAL FLOOD INSURANCE RESERVE FUND COMPLIANCE.
Section 1310A of the National Flood Insurance Act of 1968 (42 U.S.C.
4017A) is amended--
(1) in subsection (c)(2)(D), by inserting before the period
at the end the following: ``, including any provisions relating
to chargeable premium rates or annual increases of such
rates'';
(2) in subsection (c)(3), by striking subparagraph (A) and
inserting the following new subparagraph:
``(A) Parity.--In exercising the authority granted
under paragraph (1) to increase premiums, the
Administrator shall institute a single annual, uniform
rate of assessment for all individual policyholders.'';
and
(3) in subsection (d)--
(A) by striking paragraph (1) and inserting the
following new paragraph:
``(1) In general.--Beginning in fiscal year 2018 and not
ending until the fiscal year in which the ratio required under
subsection (b) is achieved--
``(A) in each fiscal year the Administrator shall
place in the Reserve Fund an amount equal to not less
than 7.5 percent of the reserve ratio required under
subsection (b); and
``(B) if in any given fiscal year the Administrator
fails to comply with subparagraph (A), for the
following fiscal year the Administrator shall increase
the rate of the annual assessment pursuant to
subsection (c)(3)(A) by at least one percentage point
over the rate of the annual assessment pursuant to
subsection (c)(3)(A) in effect on the first day of such
given fiscal year.'';
(B) in paragraph (2), by inserting before the period
at the end the following: ``nor to increase assessments
pursuant to paragraph (1)(B)''; and
(C) in paragraph (3), by inserting before the period
at the end the following: ``and paragraph (1)(B) shall
apply until the fiscal year in which the ratio required
under subsection (b) is achieved''.
SEC. 504. DESIGNATION AND TREATMENT OF MULTIPLE-LOSS PROPERTIES.
(a) Definition.--Section 1370 of the National Flood Insurance Act of
1968 (42 U.S.C. 4121) is amended--
(1) in subsection (a)--
(A) by striking paragraph (7); and
(B) by redesignating paragraphs (8) through (15) as
paragraphs (7) through (14), respectively; and
(2) by adding at the end the following new subsection:
``(d) Multiple-Loss Properties.--
``(1) Definitions.--As used in this title:
``(A) Multiple-loss property.--The term `multiple-
loss property' means any property that is a repetitive-
loss property, a severe repetitive-loss property, or an
extreme repetitive-loss property.
``(B) Repetitive-loss property.--The term
`repetitive-loss property' means a structure that has
incurred flood damage for which two or more separate
claims payments of any amount have been made under
flood insurance coverage under this title.
``(C) Severe repetitive-loss property.--The term
`severe repetitive-loss property' means a structure
that has incurred flood damage for which--
``(i) 4 or more separate claims payments have
been made under flood insurance coverage under
this title, with the amount of each such claim
exceeding $5,000, and with the cumulative
amount of such claims payments exceeding
$20,000; or
``(ii) at least 2 separate claims payments
have been made under flood insurance coverage
under this title, with the cumulative amount of
such claims payments exceeding the value of the
structure.
``(D) Extreme repetitive-loss property.--The term
`extreme repetitive-loss property' means a structure
that has incurred flood damage for which at least 2
separate claims have been made under flood insurance
coverage under this title, with the cumulative amount
of such claims payments exceeding 150 percent of the
maximum coverage amount available for the structure.
``(2) Treatment of claims before compliance with state and
local requirements.--The Administrator shall not consider
claims that occurred before a structure was made compliant with
State and local floodplain management requirements for purposes
of determining a structure's status as a multiple-loss
property.''.
(b) Premium Adjustment To Reflect Current Flood Risk.--
(1) In general.--Section 1308 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4015), as amended by the preceding
provisions of this Act, is further amended by adding at the end
the following new subsection:
``(o) Premium Adjustment To Reflect Current Flood Risk.--
``(1) In general.--Except as provided in paragraph (2), the
Administrator shall rate a multiple-loss property that is
charged a risk premium rate estimated under section 1307(a)(1)
(42 U.S.C. 4014(a)(1)) based on the current risk of flood
reflected in the flood insurance rate map in effect at the time
of rating.
``(2) Adjustment for existing policies.--For policies for
flood insurance under this title in force on the date of the
enactment of this Act for properties described in paragraph
(1)--
``(A) notwithstanding subsection (e) of this section,
the Administrator shall increase risk premium rates by
not less than 15 percent each year until such rates
comply with paragraph (1) of this subsection; and
``(B) any rate increases required by paragraph (1)
shall commence following a claim payment for flood loss
under coverage made available this title that occurred
after the date of enactment of this Act.''.
(2) Conforming amendment.--Section 1307(g)(2) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4014(g)(2)) is amended
by striking subparagraph (B) and inserting the following new
subparagraph:
``(B) in connection with a multiple-loss property.''.
(c) Pre-FIRM Multiple-Loss Property.--
(1) Termination of subsidy.--Section 1307 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4014) is amended--
(A) in subsection (a)(2)--
(i) by striking subparagraph (C) and
inserting the following new subparagraph:
``(C) any extreme repetitive-loss property;'';
(ii) in subparagraph (D), by striking ``or'';
(iii) in subparagraph (E)--
(I) in clause (i), by striking
``fair''; and
(II) in clause (ii)--
(aa) by striking ``fair'';
and
(bb) by striking ``and'' and
inserting ``or''; and
(iv) by adding at the end the following new
subparagraph:
``(F) any repetitive-loss property that has received
a claim payment for flood loss under coverage made
available under this title that occurred after the date
of enactment of this Act; and''; and
(B) by striking subsection (h).
(2) Annual limitation on premium increases.--Subsection (e)
of section 1308 of the National Flood Insurance Act of 1968 (42
U.S.C. 4015(e)) is amended--
(A) in paragraph (3), by striking ``and'' at the end;
(B) in paragraph (4), by striking ``described under
paragraph (3).'' and inserting ``estimated under
section 1307(a)(1); and''; and
(C) by adding at the end the following new paragraph:
``(5) the chargeable risk premium rates for flood insurance
under this title for any properties described in subparagraph
(F) of section 1307(a)(2) shall be increased by not less than
15 percent each year, until the average risk premium rate for
such properties is equal to the average of the risk premium
rates for properties estimated under section 1307(a)(1).''.
(d) Minimum Deductibles for Certain Multiple-Loss Properties.--
(1) Clerical amendment.--The National Flood Insurance Act of
1968, as amended by the preceding provisions of this Act, is
further amended--
(A) by transferring subsection (b) of section 1312
(42 U.S.C. 4019(b)) to section 1306 (42 U.S.C. 4013),
inserting such subsection at the end of such section,
and redesignating such subsection as subsection (f);
and
(B) in section 1312 (42 U.S.C. 4019), by
redesignating subsection (c) as subsection (b).
(2) Certain multiple-loss properties.--Subsection (f) of
section 1306 of the National Flood Insurance Act of 1968 (42
U.S.C. 4013(e)), as so transferred and redesignated by
paragraph (1) of this subsection, is amended adding at the end
the following new paragraph:
``(3) Certain multiple-loss properties.--Notwithstanding
paragraph (1) or (2), the minimum annual deductible for damage
to any severe repetitive-loss property or extreme repetitive-
loss property shall be not less than $5,000.''.
(e) Claim History Validation.--Beginning not later than the
expiration of the 180-day period beginning on the date of the enactment
of this Act, the Administrator of the Federal Emergency Management
Agency shall undertake efforts to validate the reasonable accuracy of
claim history data maintained pursuant to the National Flood Insurance
Act of 1968 (42 U.S.C. 4001 et seq.).
(f) Increased Cost of Compliance Coverage.--Paragraph (1) of section
1304(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4011(b)(1)) is amended by striking ``repetitive loss structures'' and
inserting ``multiple-loss properties''.
(g) Availability of Insurance for Multiple-Loss Properties.--
(1) In general.--The National Flood Insurance Act of 1968 is
amended by inserting after section 1304 (42 U.S.C. 4011) the
following new section:
``SEC. 1304A. AVAILABILITY OF INSURANCE FOR MULTIPLE-LOSS PROPERTIES.
``(a) Date and Information Identifying Current Flood Risk.--The
Administrator may provide flood insurance coverage under this title for
a multiple-loss property only if the owner of the property submits to
the Administrator such data and information necessary to determine such
property's current risk of flood, as determined by the Administrator,
at the time of application for or renewal of such coverage.
``(b) Refusal To Mitigate.--
``(1) In general.--Except as provided pursuant to paragraph
(2), the Administrator may not make flood insurance coverage
available under this title for any extreme repetitive-loss
property for which a claim payment for flood loss was made
under coverage made available under this title that occurred
after the date of enactment of the 21st Century Flood Reform
Act if the property owner refuses an offer of mitigation for
the property under section 1366(a)(2) (42 U.S.C. 4104c(a)(2)).
``(2) Exceptions; appeals.--The Director shall develop
guidance to provide appropriate exceptions to the prohibition
under paragraph (1) and to allow for appeals to such
prohibition.''.
(2) Effective date.--Section 1304A of the National Flood
Insurance Act of 1968, as added by paragraph (1) of this
subsection, shall apply beginning upon the expiration of the
12-month period beginning on the date of the enactment of this
Act.
(h) Rates for Properties Newly Mapped Into Areas With Special Flood
Hazards.--Subsection (i) of section 1308 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015(i)) is amended--
(1) by striking the subsection designation and all that
follows through ``Notwithstanding'' and inserting the
following:
``(i) Rates for Properties Newly Mapped Into Areas With Special Flood
Hazards.--
``(1) In general.--Except as provided in paragraph (2) and
notwithstanding'';
(2) by redesignating paragraphs (1) and (2) as subparagraphs
(A) and (B), respectively, and moving the left margins of such
subparagraphs, as so redesignated, and the matter following
subparagraph (B), 2 ems to the right; and
(3) by adding at the end the following new paragraph:
``(2) Inapplicability to multiple-loss properties.--Paragraph
(1) shall not apply to multiple-loss properties.''.
(i) Clear Communication of Multiple-Loss Property Status.--
(1) In general.--Subsection (l) of section 1308 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4015(l)), as
amended by the preceding provisions of this Act, is further
amended by adding at the end the following new paragraph:
``(2) Multiple-loss properties.--Pursuant to paragraph (1),
the Administrator shall clearly communicate to all
policyholders for multiple-loss properties the effect on the
premium rates charged for such a property of filing any further
claims under a flood insurance policy with respect to that
property.''.
(j) Mitigation Assistance Program.--Section 1366 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4104c) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by
inserting after the period at the end of the first
sentence the following: ``Priority under the program
shall be given to providing assistance with respect to
multiple-loss properties.'';
(B) in paragraph (1), by inserting ``and'' after the
semicolon at the end; and
(C) by striking paragraphs (2) and (3) and inserting
the following:
``(2) to property owners, in coordination with the State and
community, in the form of direct grants under this section for
carrying out mitigation activities that reduce flood damage to
extreme repetitive-loss properties.
The Administrator shall take such actions as may be necessary to ensure
that grants under this subsection are provided in a manner that is
consistent with the delivery of coverage for increased cost of
compliance provided under section 1304(b).'';
(2) in subsection (c)(2)(A)(ii), by striking ``severe
repetitive loss structures'' and inserting ``multiple-loss
properties'';
(3) in subsection (d)--
(A) in paragraph (1)--
(i) by striking ``Severe repetitive loss
structures'' and inserting ``Extreme
repetitive-loss properties''; and
(ii) by striking ``severe repetitive loss
structures'' and inserting ``extreme
repetitive-loss properties'';
(B) in paragraph (2)--
(i) by striking ``Repetitive loss
structures'' and inserting ``Severe repetitive-
loss properties'';
(ii) by striking ``repetitive loss
structures'' and inserting ``severe repetitive-
loss properties''; and
(iii) by striking ``90 percent'' and
inserting ``100 percent'';
(C) by redesignating paragraph (3) as paragraph (4);
and
(D) by inserting after paragraph (2) the following
new paragraph:
``(3) Repetitive-loss property.--In the case of mitigation
activities to repetitive-loss properties, in an amount up to
100 percent of all eligible costs.'';
(4) in subsection (h)--
(A) by striking paragraphs (2) and (3);
(B) by striking the subsection designation and all
that follows through ``shall apply:''; and
(C) in paragraph (1)--
(i) by striking ``Community'' and inserting
``Definition of Community'';
(ii) by striking ``The'' and inserting ``For
purposes of this section, the'';
(iii) by redesignating such paragraph as
subsection (j);
(iv) in subparagraph (B), by striking
``subparagraph (A)'' and inserting ``paragraph
(1)'';
(v) by redesignating subparagraphs (A) and
(B) as paragraphs (1) and (2), respectively;
(vi) in paragraph (1), as so redesignated by
clause (v) of this subparagraph, by
redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively (and
moving the margins two ems to the left); and
(vii) by moving the left margins of
subsection (j) (as so redesignated) and
paragraphs (1) and (2), all as so redesignated,
two ems to the left; and
(5) by inserting after subsection (g) the following new
subsections:
``(h) Alignment With Increased Cost of Compliance.--Notwithstanding
any provision of law, any funds appropriated for assistance under this
title may be transferred to the National Flood Insurance Fund
established under section 1310 (42 U.S.C. 4017) for the payment of
claims to enable the Administrator to deliver grants under subsection
(a)(2) of this section to align with the delivery of coverage for
increased cost of compliance for extreme repetitive-loss properties.
``(i) Funding.--
``(1) Authorization of appropriations.--Notwithstanding any
other provision of law, assistance provided under this section
shall be funded by--
``(A) $225,000,000 in each fiscal year, subject to
offsetting collections, through risk premium rates for
flood insurance coverage under this title, and shall be
available subject to section 1310(f);
``(B) any penalties collected under section 102(f)
the Flood Disaster Protect Act of 1973 (42 U.S.C.
4012a(f); and
``(C) any amounts recaptured under subsection (e) of
this section.
The Administrator may not use more than 5 percent of amounts
made available under this subsection to cover salaries,
expenses, and other administrative costs incurred by the
Administrator to make grants and provide assistance under this
section.
``(2) Availability.--Amounts appropriated pursuant to this
subsection for any fiscal year may remain available for
obligation until expended.''.
(k) Repeal.--Section 1367 of the National Flood Insurance Act of 1968
(42 U.S.C. 4104d) is repealed.
SEC. 505. ELIMINATION OF COVERAGE FOR PROPERTIES WITH EXCESSIVE
LIFETIME CLAIMS.
Section 1305 of the National Flood Insurance Act of 1968 (42 U.S.C.
4012) is amended by adding at the end the following new subsection:
``(e) Prohibition of Coverage for Properties With Excessive Lifetime
Claims.--After the expiration of the 18-month period beginning on the
date of the enactment of this subsection, the Administrator may not
make available any new or renewed coverage for flood insurance under
this title for any multiple-loss property for which the aggregate
amount in claims payments that have been made after the expiration of
such period under flood insurance coverage under this title exceeds
twice the amount of the replacement value of the structure.''.
SEC. 506. ADDRESSING TOMORROW'S HIGH-RISK STRUCTURES TODAY.
(a) In General.--The National Flood Insurance Act of 1968 is
amended--
(1) in section 1305 (42 U.S.C. 4012), as amended by the
preceding provisions of this Act, by adding at the end the
following new subsections:
``(f) Reducing Future Risks of the National Flood Insurance Fund.--
``(1) Prohibition of new coverage for high-risk properties.--
Except as provided in subsection (g) and notwithstanding any
other provision of this title, in carrying out the fiduciary
responsibility to the National Flood Insurance Program under
section 1309(e) (42 U.S.C. 4016(e)) and to reduce future risks
to the National Flood Insurance Fund, on or after January 1,
2021, the Administrator may not make available flood insurance
coverage under this title as follows:
``(A) New structures added to flood hazard zones.--
Any new coverage for any property for which new
construction is commenced on or after such date and
that, upon completion of such construction, is located
in an area having special flood hazards.
``(B) Structures with high-value replacement costs.--
Any new or renewed coverage for any residential
property having 4 or fewer residences and a replacement
value of the structure, at the time, exclusive of the
value of the real estate on which the structure is
located, that is equal to or exceeds the amount that is
equal to $1,000,000 multiplied by the number of
dwelling units in the structure (as such amount is
adjusted pursuant to clause (i)), subject to the
following provisions:
``(i) Adjustment of amounts.--The dollar
amount in the matter of this subparagraph that
precedes this clause (as it may have been
previously adjusted) shall be adjusted for
inflation by the Administrator upon the
expiration of the 5-year period beginning upon
the enactment of this subsection and upon the
expiration of each successive 5-year period
thereafter, in accordance with an inflationary
index selected by the Administrator.
``(ii) Valuation.--The Administrator shall
determine the replacement value of a property
for purposes of this subparagraph using such
valuation methods or indicia as the
Administrator determines are reasonably
accurate, consistent, reliable, and available
for such purposes.
``(2) Actuarial structures with hidden risks.--For any
property with risk premium rates estimated under section
1307(a)(1), on or after January 1, 2021, the Administrator
shall charge risk premium rates based on the current risk of
flood reflected in the flood insurance rate map or comparable
risk rating metric in effect at the time a policy is newly
issued, unless the newly issued policy covers a property with
continuous flood insurance coverage under this title, or upon
the renewal of a policy. For all such policy renewals, the
Administrator shall increase the risk premium rate in
accordance with section 1308(e)(2) until the risk premium rate
is equal to the risk of flood reflected in the flood insurance
rate map or comparable risk rating metric in effect at the time
of renewal.
``(3) Implementation.--The Administrator may implement this
subsection without rulemaking, except that any such
implementation shall include advance publication of notice in
the Federal Register or advance notice by another comparable
method, such as posting on an official website of the
Administrator.
``(g) Availability of Otherwise Prohibited Flood Insurance Coverage
Where Private Market Coverage Is Unavailable.--
``(1) In general.--The Administrator may make available flood
insurance coverage under this Act for a property described in
subparagraph (A) or (B) of subsection (f)(1), notwithstanding
subsection (f) of this section, if, within the 30-day period
beginning upon submission to the Clearinghouse established
pursuant to section 1350 of an application for flood insurance
coverage for such property, the Clearinghouse does not provide
the applicant with one or more bona fide offers for private
flood insurance coverage for such property.
``(2) Surcharge.--Any flood insurance coverage made available
for a property pursuant to this subsection shall be made
available at chargeable premium rates otherwise determined
under this title for such property, except that the
Administrator shall impose and collect a surcharge for such
coverage in an amount equal to 10 percent of such chargeable
premium rate, which shall be deposited into the National Flood
Insurance Fund established under section 1310.''; and
(2) in section 1306(a)(1) (42 U.S.C. 4013(a)(1)), by
inserting ``, subject to subsections (f) and (g) of section
1305'' before the semicolon at the end.
(b) Study of Flood Insurance Clearinghouse.--
(1) In general.--The Administrator of the Federal Emergency
Management Agency (in this subsection referred to as the
``Administrator'') shall conduct a study--
(A) to analyze the feasibility and effectiveness, and
problems involved, in establishing, maintaining, and
operating a Flood Insurance Clearinghouse in accordance
with section 1350 of the National Flood Insurance Act
of 1968 (as added by the amendment made by subsection
(c) of this section); and
(B) to develop a plan and guidelines for
establishment, design, and operation of such a
Clearinghouse
(2) Report.--Not later than the expiration of the two-year
period beginning on the date of the enactment of this Act, the
Administrator shall submit a report to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate
that sets forth the analysis, conclusions, and recommendations
resulting from the study under this section. Such report shall
include a plan for establishment, design, and operation of the
Flood Insurance Clearinghouse, and guidelines for such
Clearinghouse, sufficient to provide for commencement of
operations of the Clearinghouse under section 1350 of the
National Flood Insurance Act of 1968.
(c) Establishment of Clearinghouse.--Part C of chapter II of the
National Flood Insurance Act of 1968 (42 U.S.C. 4081 et seq.), as
amended by the preceding provisions of this Act, is further amended by
adding at the end the following new section:
``SEC. 1350. FLOOD INSURANCE CLEARINGHOUSE.
``(a) Establishment and Operations.--Not later than January 1, 2021,
the Administrator shall establish and commence operations of a Flood
Insurance Clearinghouse (in this section referred to as the
`Clearinghouse)' in accordance with the report, plan, and guidelines
required under section 506(b)(2) of the 21st Century Flood Reform Act.
``(b) Purpose.--The Clearinghouse shall be established for the
purpose of receiving applications from prospective insureds for flood
insurance coverage for properties for which such coverage is prohibited
under section 1305(f) of the National Flood Insurance Act of 1968 (42
U.S.C. 4012(f)) and for providing to such applicants offers for such
coverage from insurers providing private flood insurance (as such term
is defined for purposes of section 102(c) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(c)) and, subject to the
limitations in this section, for coverage made available under the
National Flood Insurance Program.
``(c) Functions.--The Clearinghouse shall have as its functions--
``(1) to provide for prospective insureds to submit to the
Clearinghouse applications for flood insurance coverage for
properties described in subsection (b);
``(2) to determine, with respect to a property identified in
an application, the chargeable premium rate for coverage made
available under this title;
``(3) with respect to a property identified in an
application, to solicit offers of coverage under private flood
insurance from providers of such insurance during a reasonable
period of time after such application, which offers shall
provide terms and conditions of insurance, including
deductibles and exclusions, that are sufficient to meet the
requirements of section 102 of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4012a); and
``(4) to provide to the applicant for insurance--
``(A) any bona fide offers for private insurance
coverage made pursuant to paragraph (3) for the
property identified in the application;
``(B) in the case only of a property for which such
coverage is authorized pursuant to subsection (g) of
section 1305, a bona fide offer for flood insurance
coverage made available under this title for the
property; and
``(C) information to help the applicant for insurance
understand such offers and the limitation under section
1305(g);
``(d) Management and Operation.--The Clearinghouse shall be managed
and operated by a third party pursuant to a contract with the
Administrator.
``(e) Agreements.--The Administrator may enter into such agreements
with insurers providing private flood insurance coverage as may be
necessary for the Clearinghouse to carry out its functions.
``(f) Fees.--The Clearinghouse may charge a fee to applicants to
cover administrative costs of the Clearinghouse.
``(g) Reports.--The Clearinghouse shall report periodically, as
determined by the Administrator, to the Administrator regarding the
operations and activities of the Clearinghouse.''.
SEC. 507. PAY FOR PERFORMANCE AND STREAMLINING COSTS AND REIMBURSEMENT.
Section 1345 of the National Flood Insurance Act of 1968 (42 U.S.C.
4081), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following subsection:
``(g) Write Your Own Allowance and Program Savings.--
``(1) Allowance rate.--
``(A) Limitation.--The allowance paid to companies
participating in the Write Your Own Program (as such
term is defined in section 1370 (42 U.S.C. 4004)) with
respect to a policy for flood insurance coverage made
available under this title shall not be greater than
27.9 percent of the chargeable premium for such
coverage.
``(B) Inapplicability.--Subparagraph (A) shall not
apply to actual and necessary costs related to section
1312(a) (42 U.S.C, 4019(a)), or to payments deemed
necessary by the Administrator.
``(C) Implementation.--The limitation in subparagraph
(A) shall be imposed by equal reductions over the 3-
year period beginning on the date of the enactment of
this subsection.
``(2) Program savings.--
``(A) Implementation.--The Administrator, within
three years of the date of the enactment of this Act,
shall reduce the costs and unnecessary burdens for the
companies participating in the Write Your Own program
by at least half of the amount by which the limitation
under paragraph (1)(A) reduced costs compared to the
costs as of the date of the enactment of this
subsection.
``(B) Consideration of savings.--In meeting the
requirement of subparagraph (A), the Administrator
shall consider savings including--
``(i) indirect payments by the Administrator
of premium;
``(ii) eliminating unnecessary communications
requirements;
``(iii) reducing the frequency of National
Flood Insurance Program changes;
``(iv) simplifying the flood rating system;
and
``(v) other ways of streamlining the Program
to reduce costs while maintaining customer
service and distribution.''.
SEC. 508. ENFORCEMENT OF MANDATORY PURCHASE REQUIREMENTS.
(a) Penalties.--Paragraph (5) of section 102(f) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(f)(5)) is amended by striking
``$2,000'' and inserting ``$5,000''.
(b) Insured Depository Institutions.--Subparagraph (A) of section
10(i)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1820(i)(2)(A))
is amended by striking ``date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994 and biennially
thereafter for the next 4 years'' and inserting ``date of enactment of
the 21st Century Flood Reform Act and biennially thereafter''.
(c) Credit Unions.--Subparagraph (A) of section 204(e)(2) of the
Federal Credit Union Act (12 U.S.C. 1784(e)(2)(A)) is amended by
striking ``date of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994 and biennially thereafter for the
next 4 years'' and inserting ``date of enactment of the 21st Century
Flood Reform Act and annually thereafter''.
(d) Government-Sponsored Enterprises.--Paragraph (4) of section
1319B(a) of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4521(a)(4)) is amended, in the matter
after and below subparagraph (B), by striking ``first, third, and fifth
annual reports under this subsection required to be submitted after the
expiration of the 1-year period beginning on the date of enactment of
the Riegle Community Development and Regulatory Improvement Act of
1994'' and inserting ``first annual report under this subsection
required to be submitted after the expiration of the 1-year period
beginning on the date of enactment of the 21st Century Flood Reform Act
and every such second annual report thereafter''.
(e) Mandatory Purchase Study; Guidelines.--
(1) Study.--
(A) In general.--The Comptroller General of the
United States shall conduct a study of the
implementation and efficacy of the requirements of
section 102 of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a). Such study shall at minimum
consider the following questions:
(i) How effectively do Federal agencies,
regulated lending institutions, and Federal
entities for lending regulation implement the
requirements of section 102 of the Flood
Disaster Protection Act of 1973?
(ii) Does the current implementation of Flood
Disaster Protection Act of 1973 align with the
congressional findings and purposes described
in section 2(b) of such Act (42 U.S.C. 4002)?
(iii) What, if any, unintended consequences
have resulted from the requirements and
implementation of section 102 of such Act?
(B) Report.--Not later than the expiration of the 18-
month period beginning on the date of the enactment of
this Act, the Comptroller General shall submit a report
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate regarding the findings
and conclusions of the study conducted pursuant to this
paragraph.
(2) Guidelines.--The Federal entities for lending regulation
(as such term is defined in section 3(a) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4003(a))), in consultation
with the Administrator of the Federal Emergency Management
Agency, shall jointly update and reissue the rescinded document
of the Administrator entitled ``Mandatory Purchase of Flood
Insurance Guidelines'' (lasted updated on October 29, 2014).
The updated document shall incorporate recommendations made by
the Comptroller General pursuant to paragraph (1) of this
subsection.
SEC. 509. SATISFACTION OF MANDATORY PURCHASE REQUIREMENT IN STATES
ALLOWING ALL-PERILS POLICIES.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a) is amended--
(1) in subsection (a), by striking ``After'' and inserting
``Subject to subsection (i) of this section, after'';
(2) in subsection (b)--
(A) in paragraph (1), by striking ``Each'' and
inserting ``Subject to subsection (i) of this section,
each'';
(B) in paragraph (2), by striking ``Each'' the first
place such term appears and inserting ``Subject to
subsection (i) of this section, A''; and
(C) in paragraph (3), by striking ``The'' the first
place such term appears and inserting ``Subject to
subsection (i) of this section, the'';
(3) in subsection (e)(1), by striking ``If'' and inserting
``Subject to subsection (i) of this section, if''; and
(4) by adding at the end the following new subsection:
``(i) Satisfaction of Mandatory Purchase Requirement in States
Allowing All-perils Policies.--
``(1) Waivers.--Section 102 shall not apply with respect to
residential properties in any State that allows any property
insurance coverage that covers `all-perils' except specifically
excluded perils that includes coverage for flood perils in an
amount at least equal to the outstanding principal balance of
the loan or the maximum limit of flood insurance coverage made
available under this title with respect to such type of
residential property, whichever is less.
``(2) Definitions, procedures, standards.--The Administrator
may establish such definitions, procedures, and standards as
the Administrator considers necessary for making determinations
under paragraph (1).''.
SEC. 510. FLOOD INSURANCE PURCHASE REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a), as amended by the preceding provisions of this Act, is further
amended--
(1) in subsection (c)(2)(A), by striking ``$5,000 or less''
and inserting the following: ``$25,000 or less, except that
such amount (as it may have been previously adjusted) shall be
adjusted for inflation by the Administrator upon the expiration
of the 5-year period beginning upon the enactment of the 21st
Century Flood Reform Act and upon the expiration of each
successive 5-year period thereafter, in accordance with an
inflationary index selected by the Administrator''; and
(2) by adding at the end the following new subsection:
``(j) Flood Insurance Purchase Requirements.--Notwithstanding any
other provision of law, a State or local government or private lender
may require the purchase of flood insurance coverage for a structure
that is located outside of an area having special flood hazards.''.
SEC. 511. CLARIFICATIONS; DEADLINE FOR APPROVAL OF CLAIMS.
(a) Rules of Construction.--Part C of chapter II of the National
Flood Insurance Act of 1968 (42 U.S.C. 4081 et seq.), as amended by the
preceding provisions of this Act, is further amended by adding at the
end the following new section:
``SEC. 1351. RULES OF CONSTRUCTION.
``(a) Definition.--For purposes of this part, the term `knowingly'
means having actual knowledge of or acting with deliberate ignorance of
or reckless disregard for the prohibitions under this part.
``(b) Administrative Remedy.--A policyholder of a policy for flood
insurance coverage made available under this title must exhaust all
administrative remedies, including submission of disputed claims to
appeal under any appeal process made available by the Administrator,
prior to commencing legal action on any disputed claim under such a
policy.''.
(b) Deadline for Approval of Claims.--
(1) In general.--Section 1312 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4019), as amended by the preceding
provisions of this Act, is further amended--
(A) in subsection (a), by striking ``The
Administrator'' and inserting ``Subject to other
provisions of this section, the Administrator''; and
(B) by adding at the end the following new
subsection:
``(c) Deadline for Approval of Claims.--
``(1) In general.--The Administrator shall provide that, in
the case of any claim for damage to or loss of property under
flood insurance coverage made available under this title, an
initial determination regarding approval of a claim for payment
or disapproval of the claim be made, and notification of such
determination be provided to the insured making such claim, not
later than the expiration of the 120-day period (as such period
may be extended pursuant to paragraph (2)) beginning upon the
day on which the policyholder submits a signed proof of loss
detailing the damage and amount of the loss. Payment of
approved claims shall be made as soon as possible after such
approval.
``(2) Extension of deadline.--The Administrator shall provide
that the period referred to in paragraph (1) may be extended by
a single additional period of 15 days in cases where
extraordinary circumstances are demonstrated. The Administrator
shall, by regulation, establish criteria for demonstrating such
extraordinary circumstances and for determining to which claims
such extraordinary circumstances apply.''.
(2) Applicability.--The amendments made by paragraph (1)
shall apply to any claim under flood insurance coverage made
available under the National Flood Insurance Act of 1968 (42
U.S.C. 4001 et seq.) pending on the date of the enactment of
this Act and any claims made after such date of enactment.
SEC. 511. GAO STUDY OF SIMPLIFICATION OF NATIONAL FLOOD INSURANCE
PROGRAM.
(a) Study.--The Comptroller General of the United States shall
conduct a study of options for simplifying flood insurance coverage
made available under the National Flood Insurance Act, which shall
include the following:
(1) An analysis of how the administration of the National
Flood Insurance Program can be simplified--statutorily,
regulatorily, and administratively--for private flood insurance
policyholders, companies, agents, mortgage lenders, and flood
insurance vendors.
(2) An assessment of ways in which flood insurance coverage
made available under the National Flood Insurance Act and the
program for providing and administrating such coverage may be
harmonized with private insurance industry standards.
(3) Identification and analysis of ways in which the
structure of the National Flood Insurance Program may be
simplified, including analysis of the efficacy and effects each
of the following actions:
(A) Eliminating the use of two deductibles under the
Program.
(B) Including in claims for flood-damages full
replacement cost for property not damaged, but rendered
unusable, by the flooding.
(C) Using umbrella policies that allow multiple
structures on a property to be insured under the same
policy.
(b) Report.--Not later than the expiration of the 18-month period
beginning on the date of the enactment of this Act, the Comptroller
General shall submit a report to the Committee on Financial Services of
the House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate regarding the findings and conclusions of
the study conducted pursuant to this section.
Purpose and Summary
Introduced by Representative Sean Duffy on June 12, 2017,
H.R. 2874, the ``21st Century Flood Reform Act,'' would achieve
reforms to improve the financial stability of the National
Flood Insurance Program, to enhance the development of more
accurate estimates of flood risk through new technology and
better maps, to increase the role of private markets in the
management of flood insurance risks, and to provide for
alternative methods to insure against flood peril.
Background and Need for Legislation
Floods are among the most frequently occurring and costly
natural disasters. Most declarations of federal disasters by
the Federal Emergency Management Agency (FEMA) are related to
flooding. Yet despite the frequency and severity of losses that
result from flooding, the private insurance market generally
did not provide insurance for flooding; when it did, insurance
for flood-related damage can be expensive because the
properties most at-risk tend to be highly concentrated
geographically and the potential risk of economic losses is
extremely high.
To supplement the availability of flood insurance in the
private market, Congress, in 1968, created the National Flood
Insurance Program (NFIP), which is administered by FEMA and
provides flood insurance to approximately 5 million
policyholders across the country. In exchange for premiums paid
by policyholders, NFIP makes federally backed flood insurance
available to homeowners and other property owners (for example,
businesses, churches, and farmers) in these communities.
Homeowners with mortgages held by federally regulated
lenders on property in participating communities identified by
FEMA to be in Special Flood Hazard Areas are required to
purchase flood insurance (mandatory purchase requirement). NFIP
coverage limits vary by program (regular or emergency) and
property type (for example, residential or nonresidential). In
NFIP's regular program, the maximum coverage limits for
residential policyholders are $250,000 for buildings and
$100,000 for contents. For commercial policyholders (that is,
those with policies for nonresidential properties), the maximum
coverage limit is $500,000 per building and $500,000 for
contents owned by the building owner. There is additional
coverage for contents owned by the tenants.
Residents and business owners in over 22,000 participating
communities across the United States and its territories are
able to buy NFIP flood insurance policies through insurance
agents and companies that participate as third-party
administrators in the ``Write Your Own'' (WYO) program. The WYO
program allows private insurance carriers to issue and service
government underwritten and taxpayer backed NFIP policies with
no private financial liability from the insurer. Insurance
companies that participate in the WYO program receive an
expense allowance for policies they write and the claims they
process. In addition, their agents earn a commission for the
policies they sell. The federal government, however, retains
responsibility for managing the risk and paying claims, as well
as covering any litigation costs should a WYO insurer be sued
in court.
Property owners can purchase flood insurance through the
NFIP only if their communities participate in the NFIP. To
participate in the NFIP, a community must agree to abide by
certain statutory provisions intended to mitigate the risk of
flooding, such as building codes that require new structures
built in floodplains (high-risk areas) to be protected against
flooding or to be elevated above the 100-year floodplain.
As of June 5, 2017, the NFIP has an outstanding debt of
$24.6 billion borrowed from taxpayers, with roughly $1.1
billion available cash-on-hand and $5.825 billion remaining of
its total temporary $30.425 billion Treasury borrowing
authority. The NFIP's debt results primarily from its borrowing
to pay claims as a result of the Gulf Coast hurricanes in 2005
and Superstorm Sandy in October 2012. This borrowing stems from
a structural imbalance in how the NFIP measures and prices for
risk, resulting in only 46 percent of premium dollars collected
in 2016 being available for the payments of claims. With such a
low portion of premiums available to pay claims, the pressure
on the NFIP to borrow from taxpayers increases. The NFIP's
structural budget crisis has required periodic legislation to
increase its borrowing authority, the most recent example of
which occurred in January 2013 when Congress increased the
NFIP's borrowing authority by $9.7 billion from $20.725 billion
to its current $30.425 billion level.
H.R. 2874 reauthorizes the NFIP for five years; provides
much needed reforms to ensure it is financially sustainable;
enhances incentives and approaches to reduce future flood
damages and vulnerabilities; and, ensures that a greater
portion of premiums collected are available to pay claims that
ultimately result in better protection for taxpayers who have
repeatedly backstopped the program.
Instead of operating on an actuarial basis, the NFIP
operates on a series of explicit and implicit subsidies,
allowing some to pay less while many pay more than their actual
flood risk would require. Meanwhile, there is high customer
dissatisfaction with the NFIP's operations and flood map
approval. Claims payments have remained high; and, over time
there has been a disproportionate growth in the amount and
number of claims with each new storm and the flood damage that
follows.
Through a series of incremental reforms, such as moving the
program towards risk based rates, ensuring the proper
maintenance of the program's reserve fund, addressing
properties that perpetually flood, and providing more
transparency to the mapping process, H.R. 2874 will help
protect taxpayers and restore the NFIP's financial ledger and
provide certainty to the flood insurance marketplace over the
next five years.
Hearings
The Committee on Financial Services' Subcommittee on
Housing & Insurance held two hearings examining matters
relating to H.R. 2874 on March 9, 2017 and March 16, 2017. The
Committee on Financial Services held a hearing examining
matters relating to H.R. 2874 on June 7, 2017.
Committee Consideration
The Committee on Financial Services met in open session on
June 15, 2017 to consider H.R. 2874. Sundry amendments were
considered and adopted as described below. The Committee
ordered H.R. 2874 to be reported favorably to the House, as
amended, by a recorded vote of 30 ayes and 26 nays (recorded
vote no. FC-63), a quorum being present.
Before the motion to report was offered, the Committee
adopted by voice vote an amendment offered by Mr. Duffy (no. 1)
and an amendment offered by Ms. Moore (no. 8). As described
below, the Committee also adopted an amendment by Ms. Tenney
(no. 7) by recorded vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
Amendments were disposed of as follows:
Heck Amendment (no. 2) was not agreed to by a vote of 26
yeas and 29 nays (Recorded vote no. FC-59)
Crist Amendment (no. 6) was not agreed to by a vote of 26
yeas and 30 nays (Recorded vote no. FC-60)
Tenney Amendment (no. 7) was agreed to by a recorded vote
of 31 yeas and 25 nays (Recorded vote no. FC-61)
Waters Amendment in the Nature of a Substitute (no. 9) was
not agreed to by a recorded vote of 25 yeas and 31 nays
(Recorded vote no. FC-62)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 2874
will achieve reforms to improve the financial stability of the
National Flood Insurance Program, to enhance the development of
more accurate estimates of flood risk through new technology
and better maps, to increase the role of private markets in the
management of flood insurance risks, and to provide for
alternative methods to insure against flood peril.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 8, 2017.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2874, the 21st
Century Flood Reform Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Robert Reese.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 2874--21st Century Flood Reform Act
Summary: H.R. 2874 would authorize the National Flood
Insurance Program (NFIP), which is administered by the Federal
Emergency Management Agency (FEMA), to enter into and renew
flood insurance policies through fiscal year 2022. Under
current law, that authority will expire after December 8, 2017.
The legislation also would make a number of changes to the
NFIP aimed at improving the financial status of the program and
encouraging the growth of a private market for flood insurance.
CBO estimates that the changes made by this legislation would
increase collections from NFIP policyholders but would reduce
the number of property owners who purchase insurance through
the NFIP. On net, CBO estimates that the changes made by H.R.
2874 would reduce direct spending by $187 million over the
2018-2027 period. CBO also estimates that enacting H.R. 2874
would increase revenues by about $4 million over the 2018-2027
period.
H.R. 2874 also would authorize FEMA to perform activities
related to the flood insurance program, such as making grants
for flood mitigation, administering a state affordability
program, updating the process for appealing flood map
information, implementing an independent actuarial review of
the program, operating a flood insurance clearinghouse, and
starting a pilot program for offering community-based flood
insurance. The cost of some of those activities would be offset
by fees paid by policyholders; however, CBO estimates that
implementing other provisions would cost $75 million over the
2018-2022 period, subject to the appropriation of the
authorized and necessary amounts.
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending and revenues.
CBO estimates that enacting H.R. 2874 would not increase
net direct spending or on-budget deficits by more than $5
billion in any of the four consecutive 10-year periods
beginning in 2028.
H.R. 2874 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated Cost to the Federal Government: The budgetary
impact of H.R. 2874 would fall within budget function 450,
community and regional development (see Table 1).
TABLE 1.--SUMMARY OF ESTIMATED BUDGETARY EFFECTS OF H.R. 2874
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-2022 2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING a
Estimated Budget Authority..... 0 * -37 -74 -64 -46 -26 -8 10 23 36 -221 -187
Estimated Outlays.............. 0 * -37 -74 -64 -46 -26 -8 10 23 36 -221 -187
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level.. 0 21 14 14 13 13 13 13 13 13 13 75 140
Estimated Outlays.............. 0 21 14 14 13 13 13 13 13 13 13 75 140
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: * = between -$500,000 and zero; components may not sum to totals because of rounding.
aCBO estimates that enacting H.R. 2874 also would increase revenues by $4 million over the 2018-2027 period.
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted by the end of fiscal year 2017,
that changes in NFIP premiums will begin to go into effect for
new and renewed policies in the spring of 2018, and that the
authorized and necessary amounts will be appropriated for each
fiscal year.
Background
The NFIP was established to encourage property owners to
purchase flood insurance if they are located in communities
that adopt minimum guidelines for floodplain management and
that enforce building codes designed to mitigate damage from
floods.
Terms for Coverage. Owners of properties that are located
within an area designated as having at least a 1 percent chance
of being flooded in any year (known as a Special Flood Hazard
Area, or SFHA) and that are financed by a federally regulated
lending institution, a government-sponsored enterprise for
housing, or a federal lender are required to carry flood
insurance. Property owners not receiving financing from those
entities or located outside an SFHA may purchase flood
insurance at their discretion. Under current law, FEMA is
authorized to underwrite the sale and renewal of flood
insurance policies through December 8, 2017.
Premiums. Property owners who buy coverage through the NFIP
pay annual premiums, which are deposited into the National
Flood Insurance Fund (NFIF) and are used to pay flood damage
claims submitted by policyholders. Most properties, about 80
percent, are charged a premium based on FEMA's estimate of the
expected cost to insure those properties against damage that
the property will incur from flooding in an average year (known
as actuarial premiums).
The remaining 20 percent of properties insured by the
program are charged premiums that are lower than the expected
cost of flood damage (known as subsidized premiums). Throughout
the program's history, FEMA has charged premiums that are well
below actuarial premiums for properties that were built before
a community's Flood Insurance Rate Map (FIRM) was completed, or
before 1975, whichever was later. FEMA estimates that the
owners of those properties, known as pre-FIRM properties, pay
average premiums that are about 60 percent to 65 percent of
what the actuarial premiums would be. Pre-FIRM properties make
up the majority of subsidized properties. A few post-FIRM
properties also receive discounted premiums under current law.
Certain properties that have been newly mapped into SFHAs are
charged lower rates for one year and some other properties
located near structures designed to mitigate flooding (such as
levees) that are not functional are charged rates as if the
structure is fully effective.
Other property owners receive cross-subsidies from other
policyholders who are charged premiums above their expected
cost.\1\ If cross-subsidies completely balance out, they do not
create financial risk for taxpayers. CBO estimates that only
those policies that are explicitly subsidized will generate
insufficient receipts to cover the cost of expected claims and
related expenses.
---------------------------------------------------------------------------
\1\For details about premiums, see Congressional Budget Office, The
National Flood Insurance Program: Factors Affecting Actuarial Soundness
(November 2009), www.cbo.gov/publication/41313 and The National Flood
Insurance Program: Financial Soundness and Affordability (September
2017), www.cbo.gov/publication/53028.
---------------------------------------------------------------------------
In 2016, premium collections from roughly 5 million
policyholders totaled about $3.5 billion.
Additional Collections From Policyholders. All
policyholders also pay two additional fees: a reserve fund
assessment equal to 15 percent of their premiums and a
surcharge equal to $25 for policies on primary residences and
$250 for policies on nonprimary residences or commercial
properties. Collections from both the assessment and the
surcharge are deposited into the NFIP Reserve Fund and are
available to pay policyholders' claims.
In 2016, a total of $919 million from those fees was
deposited into the NFIP Reserve Fund.
The NFIP's Ability to Pay Claims and Other Expenses. In
addition to policyholders' payments of premiums and fees, the
NFIF and the NFIP Reserve Fund are credited with annual
appropriations from the Treasury, interest earned on fund
balances, and amounts borrowed from the Treasury. For fiscal
year 2017, the Congress appropriated $182 million to the NFIF.
In addition the NFIP borrowed and spent $1.6 billion from the
U.S. Treasury in 2017.
The majority of the NFIP's expenses consist of payments for
claims resulting from coverage in force. On the basis of the
number of subsidized policies, historical experience, and the
current level of coverage in force (about $1.2 trillion), CBO
estimates that payments for claims in 2017 will total about 122
percent of the program's receipts (or about $5.8 billion).\2\
Historically, actual expenses for claims, however, have varied
widely by year, ranging from less than 10 percent to almost 800
percent of the premiums collected in a calendar year.
---------------------------------------------------------------------------
\2\CBO's baseline estimates for the NFIP were prepared in the
spring of 2017. CBO has not yet updated those baseline estimates to
account for the hurricanes that made landfall in August and September
of 2017.
---------------------------------------------------------------------------
Because of the large subsidy that exists for many policies,
CBO estimates that annual expenses will--on average--exceed
annual income. In most years since the program began
operations, annual appropriations along with premiums and fees
have been sufficient to cover the NFIP's annual expenses.
Before 2005, the program occasionally had to borrow from the
Treasury to meet expenses in years when losses were greater
than average; the amounts borrowed were relatively small (less
than $1 billion) and were repaid with interest. The
differential grew in the aftermath of Hurricanes Katrina, Rita,
and Wilma in 2005 and Superstorm Sandy in 2012. Largely because
of borrowing to pay for losses in those storms, the NFIP's
current debt to the Treasury stands at $24.6 billion.
Direct spending
Section 109 would provide FEMA with the authority to
continue selling and renewing policies through fiscal year
2022. Although that authority would otherwise expire at the end
of fiscal year 2017, CBO's baseline projections of spending
(consistent with the rules governing baseline projections
specified in the Balanced Budget and Emergency Deficit Control
Act of 1985) assumes that the program continues. Thus,
extending the NFIP's authority to continue its operations under
current law would have no effect on direct spending relative to
CBO's baseline estimates. Relative to that baseline, CBO
estimates that enacting the other changes in H.R. 2874 would
reduce net direct spending by the NFIP by $187 million over the
2018-2027 period.
In addition to extending the NFIP's authority to continue
to provide insurance, H.R. 2874 would make several changes to
the program. Six of those changes would affect direct spending
by either adjusting the premiums paid by policyholders or
reducing the number of NFIP policies purchased (see Table 2).
TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING UNDER H.R. 2874
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Premium Increases for Pre-FIRM
Properties:
Estimated Budget Authority.......... 0 -11 -25 -43 -61 -84 -111 -142 -179 -221 -140 -877
Estimated Outlays................... 0 -11 -25 -43 -61 -84 -111 -142 -179 -221 -140 -877
Surcharge Adjustments:
Estimated Budget Authority.......... * -21 -43 -43 -42 -41 -41 -40 -40 -40 -148 -350
Estimated Outlays................... * -21 -43 -43 -42 -41 -41 -40 -40 -40 -148 -350
Premiums for Subsidized Properties with
Multiple Losses:
Estimated Budget Authority.......... 0 * * * -1 -1 -1 -2 -2 -2 -2 -10
Estimated Outlays................... 0 * * * -1 -1 -1 -2 -2 -2 -2 -10
Reducing Payments to WYO Companies:
Estimated Budget Authority.......... 0 -5 -11 -15 -14 -13 -12 -11 -10 -8 -43 -97
Estimated Outlays................... 0 -5 -11 -15 -14 -13 -12 -11 -10 -8 -43 -97
Eliminating WYO Companies' Noncompete
Agreement and Making NFIP Data
Available to the Public:
Estimated Budget Authority.......... 0 1 5 12 21 35 50 69 88 112 39 393
Estimated Outlays................... 0 1 5 12 21 35 50 69 88 112 39 393
Barring Owners of Certain Properties
From Buying NFIP Coverage:
Estimated Budget Authority.......... 0 0 0 24 50 78 107 136 165 195 74 754
Estimated Outlays................... 0 0 0 24 50 78 107 136 165 195 74 754
Total Changes:
Estimated Budget Authority...... 0 -37 -74 -64 -46 -26 -8 10 23 36 -221 -187
Estimated Outlays............... 0 -37 -74 -64 -46 -26 -8 10 23 36 -221 -187
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: FIRM = Flood Insurance Rate Map; WYO = Write Your Own; NFIP = National Flood Insurance Program.
* = between -$500,000 and zero; components may not sum to totals because of rounding.
Some changes would effectively increase the premiums that
policyholders pay and thus reduce direct spending.
Specifically, those changes would:
Increase premiums for some pre-FIRM
policyholders;
Adjust the NFIP's surcharge;
Adjust premiums for subsidized properties
that suffer multiple flood losses; and
Reduce the maximum amount paid to insurers
in FEMA's Write Your Own (WYO) program. (Under the
program, private insurance companies sell and service
NFIP policies.)
Other changes would reduce the number of NFIP policies
purchased by property owners and would increase direct
spending. Specifically, those changes would:
Bar owners of certain properties from buying
insurance through the NFIP;
Require FEMA to make certain NFIP data
publicly available; and
Eliminate the noncompete requirement for
private insurers currently participating in the NFIP's
WYO program.
The remaining changes in the bill would affect the amount
of premiums collected and the amount of flood insurance
coverage purchased, but would have no net effect on direct
spending. Specifically, those changes would:
Create a flood insurance affordability
program;
Create an option for certain policyholders
to pay annual premiums in monthly installments; and
Eliminate certain cross-subsidies among
policyholders in the program.
Changes Affecting NFIP Premiums. CBO estimates that the
four provisions that would affect the premiums charged to NFIP
policyholders would reduce net direct spending by about $1.3
billion over the 2018-2027 period. The estimate for each of
those policies is based on enacting all of the policies
proposed in H.R. 2874 as a comprehensive package.
Premium Increases for Pre-FIRM Properties. Section 101
would require FEMA to increase NFIP premiums for pre-FIRM
properties that are primary residences by at least 8 percent
each year until the rates are equal to what an actuarial
premium would be. Under current law, those premiums are
required to increase by at least 5 percent a year until they
reach that level. In 2017, policyholders with single-family
homes as their primary residence saw premium increases of about
5 percent, and policyholders with multifamily structures as
their primary residence saw increases of about 8 percent.
Therefore, CBO anticipates that under the bill, single-family
primary residences would have higher annual premium increases
than under current law.
Based on housing data and current policy information
obtained from FEMA, CBO estimates that under the bill, about
330,000 policies would initially be subject to those premium
increases. Those policyholders currently pay an average premium
of about $1,800 per year. Under the bill, once subsidies are
completely phased out, annual premiums for those policies would
be, on average, about 1.5 times greater than those under
current law, CBO estimates. Although some policyholders
probably would reduce or eliminate coverage because of the
increases, any resulting decrease in premium receipts would, in
CBO's estimation, be more than offset by the increased premiums
from properties that remained in the program. Therefore, CBO
estimates that this provision would, on net, increase NFIP
collections (premiums and fees) by $877 million over the 2018-
2027 period.
Surcharge Adjustments. Under H.R. 2874, surcharges for NFIP
policies would increase from $25 to $40 for primary residences;
for commercial properties the surcharge could increase or
decrease depending on whether the property is eligible for what
FEMA terms a preferred risk policy. Eligible properties would
be those that are not in an SFHA and that have had fewer than
three NFIP claims in the preceding 10-year period. Under the
bill, nonprimary residences that are eligible for a preferred
risk policy would have surcharges lowered to $125, and such
residences that are not eligible would have surcharges raised
to $275.
Those changes would affect all NFIP policies, which CBO
estimates will total about 5.1 million in 2018. On the basis of
the types and numbers of residences in each category, CBO
estimates that about 93 percent of policies would face
increased surcharges and that those increases would lead to
additional net collections of $350 million over the 2018-2027
period.
Premiums for Subsidized Properties with Multiple Losses.
Section 504 would create a new category for NFIP-insured
properties that have received claims payments for losses from
two or more flood events, termed multiple-loss properties.
The bill would require that premiums for any multiple-loss
property that is also a pre-FIRM property be increased by at
least 15 percent each year until the premiums equal the
actuarial premium or until a flood loss generates a claim
payment, at which point the property owner would be charged the
actuarial premium. Considering the schedule for phasing out
subsidies under current law, CBO estimates that increasing
premiums for subsidized properties with multiple losses would,
on net, increase NFIP collections by $10 million over the 2018-
2027 period.
Reducing Payments to WYO Companies. Under current law,
private insurance companies partner with FEMA through the
NFIP's WYO program to sell and service policies in return for a
per-policy commission that is used to pay the companies'
insurance agents and cover administrative costs. In 2017, the
base amount paid to WYO companies was 30.9 percent of the
premiums charged to NFIP policyholders. That amount is built
into the premiums charged to NFIP policyholders, such that
property owners with actuarial policies are charged premiums
sufficient to cover the expected cost of any claims plus the
amount needed to pay the WYO companies for writing and
servicing policies. CBO estimates that, under current law,
total payments to WYO companies in 2017 will be about $1.2
billion.
H.R. 2874 would reduce payments to WYO companies from 30.9
percent to 27.9 percent of the premiums charged to NFIP
policyholders. CBO expects that policyholders currently paying
actuarial rates would see their premiums slightly reduced. That
reduction in the cost of insurance would lead to a small
increase in purchases of flood insurance and to existing
policyholders retaining their policies longer. That boost in
the number of actuarial policies would increase collections
from reserve fund assessments and surcharges, which would
generate income above the amount expected to be required for
the NFIP to pay claims for the policies.
Furthermore, under the bill, pre-FIRM policyholders being
charged subsidized rates would not see a change in their
premiums because of this policy. For those policyholders, the
decrease in payments to WYO companies would be retained by the
NFIF and effectively reduce the government's costs for the
policies.
On the basis of information from FEMA and some WYO
companies, CBO expects that, under H.R. 2874, some of the
smaller WYO companies would choose to leave the program because
of the reduction in payments but that most would remain.
Policies written and serviced by companies that left the
program would be transferred to either other WYO companies or
to the NFIP's direct program, which FEMA operates through
contractors that write and service policies. According to FEMA,
a secondary effect of companies' departure from the WYO program
would be the lost marketing opportunities they provide, which
could slow purchases of NFIP policies.
Accounting for those varying effects--the reduction in
payments to WYO companies, and the corresponding slight
increase in purchases and retention of actuarial policies; the
lower subsidy for pre-FIRM policies; and slowed purchases of
policies--CBO estimates that this provision would reduce
spending by $97 million over the 2018-2027.
Changes That Would Reduce the Number of NFIP Policies
Purchased. According to CBO's estimates, provisions of H.R.
2874 that would affect the number of policies purchased through
the NFIP would reduce the number in force by about 5.2 million
over the 2018-2027 period.\3\ Fewer than 1 percent (or about
40,000) of those policies would be subsidized. The decline in
subsidized policies would contribute to the actuarial soundness
of the fund because those policies have expected costs that are
greater than the premiums paid. However, the decline in all
policies also would eliminate the associated reserve fund
assessments and surcharges. Under current law, the average
reserve fund assessment is about $140 per policy, and
surcharges are $25 for primary residence policies and $250 for
commercial or nonprimary residence policies. On balance, CBO
estimates, the provisions that would reduce the number of NFIP
policies purchased, by reducing the amount of funds collected
in reserve fund assessments and surcharges, would increase the
program's borrowing to pay claims, a form of direct spending,
by about $1.2 billion over the 2018-2027 period.
---------------------------------------------------------------------------
\3\Polices are purchased through the NFIP on an annual basis. In
this estimate, CBO refers to the number of policies purchased as one
policy for each year of coverage. Thus, the number of policies
purchased over a 10 year span is a different measure from the number of
properties covered by the NFIP in any particular year.
---------------------------------------------------------------------------
Eliminating WYO Companies' Noncompete Agreement and Making
NFIP Data Available to the Public. Sections 201 and 202 would
eliminate the ``noncompete agreement'' that WYO companies must
adhere to and would require FEMA to make available to the
public the information it uses to assess the flood risk to
properties. Under current law, insurance companies
participating in the WYO program cannot simultaneously sell
private flood insurance. Eliminating that restriction would
allow WYO companies to use their access to the NFIP's data on
premiums for policies on particular properties to set their own
rates for those properties and compete with the NFIP. In
addition, allowing public access to the NFIP's data would allow
other private insurance companies to make use of the
information to develop their rates and perhaps offer more
competitive plans.
On the basis of information from private insurance
providers that have expressed interest in entering the flood
insurance market, CBO expects that those provisions would
increase the growth of the private flood insurance market. In
the agency's estimation, private insurers would compete with
the NFIP for properties eligible for preferred risk policies
and other properties located outside of SFHAs, and they would
probably show interest in some properties located in SFHAs as
well. Under the bill, CBO estimates that holders of about
690,000 policies that would have been purchased through the
NFIP under current law over the 2018-2027 period would instead
choose to buy private flood insurance. No property owners who
are subsidized by the NFIP would be expected to be among those
leaving the program.
Barring Owners of Certain Properties From Buying NFIP
Coverage. Sections 505 and 506 would bar certain property
owners from purchasing NFIP insurance. Section 505 would deny
coverage for any structure for which lifetime losses (beginning
after the law's enactment) are more than two times its
replacement value. On the basis of an analysis of information
from FEMA about the likelihood of such losses, CBO estimates
that this provision would not significantly reduce the number
of NFIP policies over the 2018-2027 period.
Section 506 would bar owners of certain newly constructed
properties from the NFIP if FEMA can certify that private flood
insurance is available to them. Beginning in 2021, that
restriction would apply to properties located in an SFHA as
well as single-family and multifamily properties with a
replacement value of greater than $1 million per dwelling
within the structure, adjusted for inflation every five years.
If private insurance options could not be verified, property
owners could purchase insurance through the NFIP, but premiums
would be subject to a 10 percent surcharge. On average, that
surcharge would be about $60 in 2021, CBO estimates. Using a
database of current NFIP policies and housing information from
Fannie Mae and Freddie Mac and adjusting for anticipated
inflation, CBO estimates that section 506 could affect about
240,000 properties in 2021 that otherwise would have NFIP
coverage under current law. The majority (or about 65 percent)
of those properties would be newly constructed buildings in
SFHAs.
According to multiple insurance companies that have
expressed interest in entering the private flood insurance
market, companies are most interested in selling flood
insurance policies to owners of properties that are outside of
SFHAs. Although the companies indicate that they may be
interested in providing flood insurance for newly constructed
properties in SFHAs, CBO expects that the risk of damage from
flooding for many locations is too great for such companies to
offer such private insurance over the 2021-2027 period. On
balance, CBO estimates that approximately 60,000 (or 25
percent) of all the properties that would be affected by this
provision would lack a private flood insurance provider and the
owners would continue to purchase their insurance through the
NFIP.
CBO estimates that the remaining 180,000 properties that
would be affected by section 506 and barred from the NFIP
starting in 2021 would either purchase flood insurance through
a private provider or would forgo coverage. Over the 2021-2027
period, this provision would eliminate about 4.5 million NFIP
polices that would otherwise exist under current law.
Other Provisions. CBO expects that three other provisions
of H.R. 2874 would affect the amount of NFIP coverage purchased
and the amount of premiums collected but would not affect net
direct spending.
Flood Insurance Affordability Program. Section 102 would
direct FEMA to implement a state-run affordability program. The
program would allow a state to identify households
participating in the NFIP that are below certain income
thresholds and submit a list of those households to FEMA. The
agency would then either cap the premiums charged to those
households or limit their annual premium increases. FEMA would
then place a surcharge on all other NFIP policies in the state
to recoup the funding lost through any subsidies. Because FEMA
would have the authority to set the surcharge at any amount,
which CBO expects would be relatively small, CBO estimates that
enacting this section would have no significant effect on the
total NFIP collections from each state.
Monthly Installment of Premiums. Under current law, FEMA
must provide certain NFIP policyholders (those who are not
required to pay their premiums and fees for flood insurance
through an escrow account) the option to pay premiums on either
an annual or monthly basis. Because regulations implementing
this requirement have not been issued, all such NFIP
policyholders currently pay premiums annually.
Section 105 would direct FEMA to allow the policyholders
eligible to pay premiums in monthly installments to do so
before implementing regulations exist. Under current law, the
possibility of paying monthly payments exists for only a small
number of policies because most properties are subject to
mortgages with a lending institution that requires insurance
payments to be paid through escrow accounts. Enacting H.R. 2874
would not change that situation.
The bill would allow FEMA to charge a fee of up to $50 for
each policy each year for policyholders who opt to pay their
premiums on a monthly basis. The fee would be used to offset
any administrative costs associated with collecting, storing,
and processing payments at that interval. Because few
policyholders are eligible to pay premiums in monthly
installments, CBO estimates this provision would have no
significant effect on net direct spending.
Certain Cross-Subsidies. Section 506 would require that
certain NFIP cross-subsidies be phased out. Those cross-
subsidies allow some properties to be charged premiums that are
treated as if they were actuarial but are actually lower than
actuarial rates. Because eliminating those cross-subsidies
would simultaneously lower premiums for policies that are
currently charged higher than actuarial rates and raise
premiums for policies that are currently charged lower than
actuarial rates, CBO estimates that phasing out those subsidies
would have no significant effect on net direct spending.
Revenues
Section 508 would increase, from $2,000 to $5,000 per
violation, the civil penalty charged to lending institutions
for not enforcing the NFIP's mandatory purchase requirement.
Based on an analysis of information provided by FEMA about the
number of penalties imposed, CBO estimates that enacting H.R.
2874 would increase those penalties by $4 million over the
2018-2027 period. Those penalties would be recorded in the
budget as revenues and would be available to be spent by the
NFIP without further appropriation.
Spending subject to appropriation
CBO estimates that, over the 2018-2022 period, implementing
H.R. 2874 would cost $75 million for administrative costs to
operate the NFIP, assuming appropriation of the necessary
amounts.
Flood Mitigation Assistance. The bill would authorize the
appropriation of $225 million for each fiscal year for FEMA to
provide flood mitigation grants to NFIP policyholders. Under
the bill, all such spending would be subject to additional fees
charged to NFIP policyholders. Consequently, CBO estimates
that, subject to appropriation of the authorized amounts, all
spending from this provision would be offset by collections
from NFIP policyholders.
Other Changes in Discretionary Spending. H.R. 2874 would
make a number of other changes that would affect discretionary
spending, including updating the flood map appeals process,
implementing an independent actuarial review process, having
FEMA establish and run a flood insurance clearinghouse, and
implementing a pilot program for community-based flood
insurance. In addition, administrative costs for the NFIP
affordability program would be paid with annual appropriations.
Based on an analysis of information provided by FEMA, CBO
estimates implementing those provisions would cost $75 million
over the 2018-2022 period.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that would be
subject to those procedures under H.R. 2874 are shown in Table
3.
TABLE 3.--CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2874 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON MAY 17, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017-2022 2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact. 0 0 -37 -74 -64 -46 -26 -8 10 23 36 -223 -191
Memorandum:
Changes in Outlays......... 0 0 -37 -74 -64 -46 -26 -8 10 23 36 -221 -187
Changes in Revenues........ 0 0 0 0 0 0 0 0 0 0 0 2 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term direct spending and deficits: CBO
estimates that enacting H.R. 2874 would not increase net direct
spending or on-budget deficits by more than $5 billion in any
of the four consecutive 10-year periods beginning in 2028.
Intergovernmental and private-sector impact: H.R. 2874
contains no intergovernmental or private-sector mandates as
defined in UMRA.
Estimate prepared by: Federal costs: Robert Reese; Impact
on state, local, and tribal governments: Rachel Austin; Impact
on the private sector: Logan Smith.
Estimate approved by: H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 2874 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Duplication of Federal Programs
Pursuant to section 3(c)(5) of rule XIII, the Committee
states that no provision of H.R. 2874 establishes or
reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, 115th Cong. (2017),
the Committee states that H.R. 2874 contains no directed
rulemaking.
Section-by-Section Analysis of the Legislation
TITLE I--POLICYHOLDER PROTECTION AND INFORMATION
Sec. 101. Annual limitation on premium increase
Decreases the cap on annual rate increases from 18 to 15
percent; and increases the minimum average chargeable risk
premium, within a single risk classification, from 5 percent to
8 percent.
Sec. 102. Flood insurance affordability program
Authorizes states to voluntarily create state flood
insurance affordability programs that identify and validate
eligible owner-occupants of single family 1-4 unit residences
who are unable to pay their chargeable risk premium due to
family income. Eligibility, validated using existing Federal
income eligibility programs as a guideline, is limited to
policyholders with incomes below the threshold of the greater
of 150 percent of the state poverty level or 60 percent of the
state area median income. At a date certain, as defined by
FEMA, the state would forward its validated list to FEMA
consisting of all eligible policyholders for whom the state is
seeking assistance, along with the recommended type of
assistance for each policy. Assistance can be in the form of
either (1) capping the amount of chargeable risk premium paid,
or (2) limiting the amount of premium increase on an annualized
basis. FEMA would calculate the value of the aggregate subsidy
cost for eligible policyholders within the state, the cost of
which would be recouped through an equally distributed
surcharge on all other policyholders within that state.
Sec. 103. Disclosure of premium methodology
Requires the FEMA Administrator to develop a transparent
public process to explain and engage with the public on its
methodology to determine annual risk premium rates for NFIP
coverage, six months prior to the effective date of risk
premium rates. Annual public forums in each of FEMA's Federal
regions are required.
Sec. 104. Consideration of coastal and inland locations in premium
rates
Requires the FEMA Administrator, when calculating annual
chargeable premium rates, to consider the differences in
properties located in local coastal and inland areas.
Sec. 105. Monthly installment payment of premiums
Authorizes the FEMA Administrator to adopt policies and
procedures to finalize implementation of the monthly
installment payment of premiums provision, initially required
by the Homeowner Flood Insurance Affordability Act of 2014.
Sec. 106. Enhanced clear communication of flood risks
Requires the FEMA Administrator to clearly communicate to
all policyholders their full flood risks of their property, the
number and dollar value of claims that have been filed over the
life of a property, and the effect that filing any future
claims would have on the cost of insurance for that property.
Sec. 107. Availability of flood insurance information upon request
Requires the FEMA Administrator to make available, upon
request of a policyholder, specific data and information
related to the policyholder's property or structure, which
includes any historical information, claims payments, flood
damages, and whether the property may be required to purchase
flood insurance due to previous receipt of federal disaster
assistance.
Sec. 108. Disclosure of flood risk information upon transfer of
property
No new NFIP coverage may be provided for any property
unless the appropriate government unit requires, by September
30, 2022, either through statutory action or regulation, that
the seller or lessor of such property discloses in writing any
actual knowledge to a buyer or lessee of (1) prior flood damage
to any building located on the property; (2) prior insurance
claims for losses covered under the NFIP or private flood
insurance; (3) any previous notification regarding the
designation of the property as a repetitive loss or severe
repetitive loss property and (4) any Federal legal obligation
to obtain and maintain flood insurance.
Sec. 109. Voluntary community-based flood insurance program
The Administrator may carry out a community-based flood
insurance pilot program to make available, for purchase by
participating communities, a single, community-wide flood
insurance policy under the NFIP that (1) covers all residential
and non-residential properties within the community and (2)
satisfies, for all properties within the community, the NFIP
mandatory purchase requirement. Participation by a community in
the pilot program shall be entirely voluntary on the part of
the community. The Administrator shall ensure that a community-
wide flood insurance policy under the pilot program
incorporates: (1) a mapping requirement for properties covered
by the policy; (2) a cap on premiums; (3) a deductible; (4)
certification or accreditation of mitigation infrastructure
when available and appropriate, (5) a community audit; (6) the
Community Rating System; (7) a method of preventing redundant
claims payments by the NFIP in the case of a policyholder who
is covered by a community-wide policy and an individual policy
obtained through the NFIP; (8) coverage for damage arising from
flooding that complies with NFIP standards. The Administrator
may establish the demonstration program under this section not
later than 180 days after bill enactment and the demonstration
program shall terminate on September 30, 2022.
Sec. 110. Extension of the national flood insurance program
Extends the National Flood Insurance Program through
September 30, 2022.
TITLE II--INCREASING CONSUMER CHOICE THROUGH PRIVATE MARKET DEVELOPMENT
Sec. 201. Elimination of non-compete requirement
Eliminates the regulatory restriction that currently
prevents insurers participating in the NFIP's Write Your Own
(WYO) Program from selling both NFIP and private flood
insurance policies.
Sec. 202. Public availability of program information
Requires FEMA to develop an open-source data system to
allow public access of all information related to assessing
flood risk or identifying and establishing flood elevations and
premiums, including, where available, data relating to risk on
individual properties and loss ratio information and other
information identifying losses under the program. Personally
identifiable information shall not be made available; the
information provided shall be based on data that identifies
properties at the zip code or census block level, and shall
include the name of the community and state in which the
property is located.
Sec. 203. Refund of premiums upon cancellation of policy because of
replacement with private flood insurance
Requires FEMA to allow policyholders who cancel their NFIP
policies during the middle of the policy term to receive a pro-
rata refund on their premiums if the policy is replaced with
private flood insurance. Excludes properties that have received
any taxpayer-funded mitigation assistance through the NFIP's
Increased Cost of Compliance program or if a claim has been
paid or is pending under the policy term for which the refund
is sought.
Sec. 204. Provision of private flood insurance by mutual aid societies
Amends the National Flood Insurance Act of 1968 to allow
the coverage of flood peril provided by mutual aid societies, a
group created by common ethical or religious beliefs, to
satisfy the flood insurance mandatory purchase requirement.
Sec. 205. GAO study of flood damage savings accounts
Requires the Comptroller General of the United States to
conduct a study assessing the feasibility and effectiveness of
establishing voluntary flood damage savings accounts to reduce
flood insurance premiums and eliminate the need for purchase of
flood insurance coverage.
Sec. 206. Demonstration program for flood damage savings account
Requires the FEMA Administrator to submit to Congress a
plan for the implantation of a demonstration program to
establish voluntary flood damage savings accounts that takes
into consideration the analysis, conclusions, and
recommendations developed by the Comptroller General of the
United States.
TITLE III--MAPPING FAIRNESS
Sec. 301. Use of other risk assessment tools in determining premium
rates
Requires the FEMA Administrator to use other risk
assessment data and tools, including risk assessment models and
scores from appropriate sources, in addition to applicable
flood rate maps when determining annual chargeable premium
rates.
Sec. 302. Appeals regarding existing flood maps
Creates a new appeals process for States, local
governments, or the owners or lessees of real property for whom
FEMA has denied a request to update their FEMA-created map to
appeal that decision based on new information regarding base
flood elevation levels or other flood mitigating factors. The
initial appeals process would be through an agency
administrative process, with the possibility of a further
appeal to the Scientific Resolution Panel. In cases where the
appeal is wholly or partially successful, affected
policyholders can cancel an impacted policy and are entitled to
a refund on their premiums. Moreover, the appellant is entitled
to recover reasonable costs for the successful appeal, not to
include legal or contingency fees.
Sec. 303. Appeals and publication of projected special flood hazard
areas
Clarifies that the owner or lessee of real estate adversely
affected by the FEMA Administrator's determination of flood
elevations and special hazard areas may appeal such
determination no later than 90 days after the date of the
second publication of a flood insurance rate map. Moreover,
this provision clarifies that the FEMA Administrator's
determination will become final if there are no appeals during
the 90 day period following that second publication.
Sec. 304. Communication and outreach regarding map changes
Gives FEMA the ability to expedite the required community
notification layover period for communities that wish to
accelerate their mapping approval process.
Sec. 305. Sharing and use of maps and data
Requires the FEMA Administrator to consult and coordinate
with the Department of Defense, the United States Geological
Survey, and the National Oceanic and Atmospheric Administration
to obtain the most recent maps and other data relevant to flood
maps.
TITLE IV--PROTECTING CONSUMERS AND INDIVIDUALS THROUGH IMPROVED
MITIGATION
Sec. 401. Provision of Community Rating System premium credits to
maximum number of communities practicable
Requires FEMA to provide communities that have joined its
Community Rating System program with appropriate credits in
calculating their annual chargeable premium rates when those
communities implement or benefit from measures that protect
natural and beneficial floodplain functions.
TITLE V--PROGRAM INTEGRITY
Sec. 501. Independent actuarial review
Assigns the FEMA Administrator the statutory responsibility
to ensure that the NFIP remains financially sound. Requires the
FEMA Administrator to provide for an annual independent
actuarial study of the NFIP to analyze the financial position
of the program based on its long-term estimated losses.
Requires the FEMA Administrator to transmit the results of that
report to Congress, along with the FEMA Administrator's
determination of whether there exists an actuarial budget
deficit for the NFIP for the year covered in the report and any
recommended changes to the program to ensure that the program
remains financially sound. Additionally, require the FEMA
Administrator to submit quarterly reports to Congress on the
changing policyholder composition and risk profile of the NFIP.
Sec. 502. Adjustments to homeowners flood insurance affordability
surcharge
Restructures the surcharge originally created by the
Homeowner Flood Insurance Affordability Act of 2014 to: (1)
increase annual surcharges from $25 to $40 for all primary
residences; (2) reduce annual surcharge from $250 to $125 for
non-owner occupied residential properties that are currently
subject to Preferred Risk Policy premium rates; and, (3)
increase the annual surcharge from $250 to $275 for all other
non-primary residences.
Sec. 503. National Flood Insurance Reserve Fund compliance
Requires the FEMA Administrator to increase the current
National Flood Insurance Reserve Fund assessment rate by 1
percent each year until the NFIP achieves its statutorily
mandated reserve ratio phase-in requirement of not less than
7.5 percent.
Sec. 504. Designation and treatment of multiple-loss properties
Enhances and consolidates the NFIP's ability to manage and
track properties with a history of multiple claims by defining
a new ``multiple-loss property'' term to cover all at-risk
properties. Multiple-loss property would encompass three types
of properties: (1) a revised definition of repetitive-loss
property, meaning a property with two more claims of any
amount; (2) a revised definition of severe repetitive loss
property, meaning a property with 4 or more separate claims
payments at $5,000 each and the cumulative amount of such
claims payments exceeding $20,000, or at least 2 separate
claims payments with the cumulative amount of such claims
payments exceeding the value of the structure; and, (3) a new
definition of ``extreme repetitive-loss property,'' meaning a
property that has incurred flood damage for which at least 2
separate claims have been made with the cumulative amount of
such claims payments exceeding 150 percent of the maximum
coverage amount available for the structure. Any multiple-loss
property not currently paying full risk rates shall be subject
to a subsidy phase-out at an annual rate of 15 percent per
year. Severe repetitive-loss and extreme repetitive loss
properties would be subject to a minimum deductible of $5,000.
The Administrator may provide flood insurance coverage for
multiple-loss properties only if the owner of the property
submits to the Administrator the data and information necessary
to determine the property's current risk of flood. The
Administrator may deny NFIP coverage if the owner of any
extreme repetitive-loss property for which a claim payment for
flood was made refuses an offer of mitigation for the property.
The Administrator shall clearly communicate to all
policyholders for multiple-loss properties the effect on the
premium rates charged for the property of filing any further
claims with respect to that property. Multiple-loss properties
would be eligible for prioritized mitigation assistance through
the Flood Mitigation Assistance program, with up to a 100
percent cost share subject to the availability of funds.
Authorizes $225 billion annually for Flood Mitigation
Assistance grants.
Sec. 505. Elimination of coverage for properties with excessive
lifetime claims
Prospectively prohibits the availability of NFIP coverage
of any multiple-loss property with lifetime losses so excessive
that the aggregate amount in claims payments, made after
enactment of this Act, exceeds twice the amount of the
replacement value of the structure.
Sec. 506. Addressing tomorrow's high-risk structures today
Pursuant to his fiduciary duty and responsibility to ensure
that the NFIP remain financially sound, requires the FEMA
Administrator to no longer make available NFIP coverage for
certain high-risk properties after January 1, 2021, that have
other available private flood insurance options. The high-risk
properties covered by this prohibition include any new
structures added to today's high-risk special flood hazard
areas, as well 1-4 unit residential structures where the
replacement cost of the building (exclusive of the real estate
upon which the structure is located) exceeds $1 million.
Creates a private marketplace clearinghouse for flood insurance
by directing the FEMA Administrator to study how the agency
could create a clearinghouse, report to Congress on its
findings, and then implement the development of the
clearinghouse. The clearinghouse would allow private flood
insurers to offer flood insurance to (1) high-valued
structures, and (2) newly built structures that the bill makes
ineligible for NFIP. If such properties are unable to find
private flood coverage that is sufficient to satisfy the
mandatory purchase requirement under the law, then NFIP
insurance would be made available for that property, subject to
a 10% surcharge. The Administrator must use third-party
management to operate the clearing house as well as charge
appropriate fees to cover the administrative costs.
Sec. 507. Pay for performance and streamlining costs and reimbursement
The allowance paid to companies participating in the Write
Your Own Program shall not be greater than 27.9 percent of the
chargeable premium for such coverage. The reduction shall be
imposed by equal reductions over the 3-year period beginning on
the date of the bill's enactment. Within three years of the
bill's enactment, the Administrator shall reduce the costs and
unnecessary burdens for the companies participating in the WYO
program by at least 1.5%. To meet the reduction, FEMA shall
consider savings including (1) indirect payments by the
Administrator of premium; (2) eliminating unnecessary
communications requirements; (3) reducing the frequency of NFIP
changes; (4) simplifying the flood rating system; and (5) other
ways of streamlining the NFIP to reduce costs while maintaining
customer service and distribution.
Sec. 508. Enforcement of mandatory purchase requirements
Increases the civil money penalties on federally regulated
lenders for failure to comply with the NFIP's mandatory
purchase requirements from $2,000 to $5,000, and require an
annual report from federal banking regulators and the GSEs on
the compliance of covered lenders with existing mandatory
purchase requirements.
Sec. 509. Satisfaction of mandatory purchase requirement in states
allowing all-perils policies
Provides for the satisfaction of the NFIP's mandatory
purchase requirement for those properties located in a state
that adopts a state-based requirement for mandatory ``all
perils'' coverage that includes flood insurance.
Sec. 510. Flood insurance purchase requirements
Updates the existing exception from the NFIP's mandatory
purchase requirement under the Flood Disaster Protection Act of
1973 for small dollar loans with a repayment term of 1 year or
less from an original outstanding principal balance of $5,000
or less to an inflation adjusted $25,000 or less. Additionally,
reiterate that nothing in the law prohibits states, localities,
and private lenders from requiring the purchase of flood
insurance coverage for a structure that is located outside of
an area designated by FEMA as a special flood hazard area.
Sec. 511. Clarifications; Deadline for approval of claims
Clarifies the definition of `knowingly' as having actual
knowledge of or acting with deliberate ignorance of or reckless
disregard for the prohibitions under this section. Prior to
commencing legal action on any dispute claimed under the NFIP,
a policyholder must exhaust all administrative remedies,
including submission of disputed claims to appeal. In the case
of any claim for damage to or loss of property under the NFIP,
the Administrator shall provide that an initial determination
regarding approval of a claim for payment or disapproval of the
claim be made and notification of the determination be provided
to the insured making the claim not later than 120 days
beginning upon the day of a signed proof of loss. The 120-day
deadline may be extended by a single additional period of 15
days in extraordinary circumstance, as determined by the
Administrator.
Sec. 512. GAO study of simplification of National Flood Insurance
Program
The Comptroller General shall conduct a study of the
options for simplifying flood insurance coverage under the
NFIP. The study shall include (1) an analysis of how the
administration of the NFIP can be simplified for private flood
insurance policyholders, companies, agents, mortgage lenders,
and flood insurance vendors; (2) an assessment of ways in which
NFIP coverage may be harmonized with private insurance industry
standards; (3) identification and analysis of ways in the which
the structure of the NFIP may be simplified, including analysis
of the effect of eliminating the use of two deductibles under
the NFIP, including in claims for flood-damages full
replacement cost for property not damaged but rendered unusable
by the flooding, and using umbrella policies that allow
multiple structures on a property to be insured under the same
policy. The GAO shall submit the report to Congress not later
than 18 months after the date of enactment.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
NATIONAL FLOOD INSURANCE ACT OF 1968
* * * * * * *
TITLE XIII--NATIONAL FLOOD INSURANCE
* * * * * * *
CHAPTER I--THE NATIONAL FLOOD INSURANCE PROGRAM
basic authority
Sec. 1304. (a) To carry out the purposes of this title, the
Administrator of the Federal Emergency Management Agency 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) Additional Coverage for Compliance With Land Use and
Control Measures.--The national flood insurance program
established pursuant to subsection (a) shall enable the
purchase of insurance to cover the cost of implementing
measures that are consistent with land use and control measures
established by the community under section 1361 for--
(1) properties that are [repetitive loss structures]
multiple-loss properties ;
(2) properties that are substantially damaged
structures;
(3) properties that have sustained flood damage on
multiple occasions, if the Administrator determines
that it is cost-effective and in the best interests of
the National Flood Insurance Fund to require compliance
with the land use and control measures.
(4) properties for which an offer of mitigation
assistance is made under--
(A) section 1366 (Flood Mitigation Assistance
Program);
(B) the Hazard Mitigation Grant Program
authorized under section 404 of the Robert T.
Stafford Disaster Assistance and Emergency
Relief Act (42 U.S.C. 5170c);
(C) the Predisaster Hazard Mitigation Program
under section 203 of the Robert T. Stafford
Disaster Assistance and Emergency Relief Act
(42 U.S.C. 5133); and
(D) any programs authorized or for which
funds are appropriated to address any unmet
needs or for which supplemental funds are made
available.
The Administrator shall impose a surcharge on each insured of
not more than $75 per policy to provide cost of compliance
coverage in accordance with the provisions of this subsection.
(c) In carrying out the flood insurance program the
Administrator shall, to the maxmium extent practicable,
encourage and arrange for--
(1) appropriate financial 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 II.
SEC. 1304A. AVAILABILITY OF INSURANCE FOR MULTIPLE-LOSS PROPERTIES.
(a) Date and Information Identifying Current Flood Risk.--The
Administrator may provide flood insurance coverage under this
title for a multiple-loss property only if the owner of the
property submits to the Administrator such data and information
necessary to determine such property's current risk of flood,
as determined by the Administrator, at the time of application
for or renewal of such coverage.
(b) Refusal to Mitigate.--
(1) In general.--Except as provided pursuant to
paragraph (2), the Administrator may not make flood
insurance coverage available under this title for any
extreme repetitive-loss property for which a claim
payment for flood loss was made under coverage made
available under this title that occurred after the date
of enactment of the 21st Century Flood Reform Act if
the property owner refuses an offer of mitigation for
the property under section 1366(a)(2) (42 U.S.C.
4104c(a)(2)).
(2) Exceptions; appeals.--The Director shall develop
guidance to provide appropriate exceptions to the
prohibition under paragraph (1) and to allow for
appeals to such prohibition.
scope of program and priorities
Sec. 1305. (a) In carrying out the flood insurance program
the Administrator 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, church
properties, 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 Administrator 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 not described in
subsection (a) or (d),
(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 Administrator 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 December 31,
1971, adequate land use and control measures will have
been adopted for the State or area (or subdivision)
which are consistent with the comprehensive critiera
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[.]; and
(3) given satisfactory assurance that by September
31, 2022, property flood hazard disclosure requirements
will have been adopted for the area that meet the
requirements of section 1326.
(d) Availability of Insurance for Multifamily Properties.--
(1) In general.--The Administrator shall make flood
insurance available to cover residential properties of
5 or more residences. Notwithstanding any other
provision of law, the maximum coverage amount that the
Administrator may make available under this subsection
to such residential properties shall be equal to the
coverage amount made available to commercial
properties.
(2) Rule of construction.--Nothing in this subsection
shall be construed to limit the ability of individuals
residing in residential properties of 5 or more
residences to obtain insurance for the contents and
personal articles located in such residences.
(e) Prohibition of Coverage for Properties With Excessive
Lifetime Claims.--After the expiration of the 18-month period
beginning on the date of the enactment of this subsection, the
Administrator may not make available any new or renewed
coverage for flood insurance under this title for any multiple-
loss property for which the aggregate amount in claims payments
that have been made after the expiration of such period under
flood insurance coverage under this title exceeds twice the
amount of the replacement value of the structure.
(f) Reducing Future Risks of the National Flood Insurance
Fund.--
(1) Prohibition of new coverage for high-risk
properties.--Except as provided in subsection (g) and
notwithstanding any other provision of this title, in
carrying out the fiduciary responsibility to the
National Flood Insurance Program under section 1309(e)
(42 U.S.C. 4016(e)) and to reduce future risks to the
National Flood Insurance Fund, on or after January 1,
2021, the Administrator may not make available flood
insurance coverage under this title as follows:
(A) New structures added to flood hazard
zones.--Any new coverage for any property for
which new construction is commenced on or after
such date and that, upon completion of such
construction, is located in an area having
special flood hazards.
(B) Structures with high-value replacement
costs.--Any new or renewed coverage for any
residential property having 4 or fewer
residences and a replacement value of the
structure, at the time, exclusive of the value
of the real estate on which the structure is
located, that is equal to or exceeds the amount
that is equal to $1,000,000 multiplied by the
number of dwelling units in the structure (as
such amount is adjusted pursuant to clause
(i)), subject to the following provisions:
(i) Adjustment of amounts.--The
dollar amount in the matter of this
subparagraph that precedes this clause
(as it may have been previously
adjusted) shall be adjusted for
inflation by the Administrator upon the
expiration of the 5-year period
beginning upon the enactment of this
subsection and upon the expiration of
each successive 5-year period
thereafter, in accordance with an
inflationary index selected by the
Administrator.
(ii) Valuation.--The Administrator
shall determine the replacement value
of a property for purposes of this
subparagraph using such valuation
methods or indicia as the Administrator
determines are reasonably accurate,
consistent, reliable, and available for
such purposes.
(2) Actuarial structures with hidden risks.--For any
property with risk premium rates estimated under
section 1307(a)(1), on or after January 1, 2021, the
Administrator shall charge risk premium rates based on
the current risk of flood reflected in the flood
insurance rate map or comparable risk rating metric in
effect at the time a policy is newly issued, unless the
newly issued policy covers a property with continuous
flood insurance coverage under this title, or upon the
renewal of a policy. For all such policy renewals, the
Administrator shall increase the risk premium rate in
accordance with section 1308(e)(2) until the risk
premium rate is equal to the risk of flood reflected in
the flood insurance rate map or comparable risk rating
metric in effect at the time of renewal.
(3) Implementation.--The Administrator may implement
this subsection without rulemaking, except that any
such implementation shall include advance publication
of notice in the Federal Register or advance notice by
another comparable method, such as posting on an
official website of the Administrator.
(g) Availability of Otherwise Prohibited Flood Insurance
Coverage Where Private Market Coverage Is Unavailable.--
(1) In general.--The Administrator may make available
flood insurance coverage under this Act for a property
described in subparagraph (A) or (B) of subsection
(f)(1), notwithstanding subsection (f) of this section,
if, within the 30-day period beginning upon submission
to the Clearinghouse established pursuant to section
1350 of an application for flood insurance coverage for
such property, the Clearinghouse does not provide the
applicant with one or more bona fide offers for private
flood insurance coverage for such property.
(2) Surcharge.--Any flood insurance coverage made
available for a property pursuant to this subsection
shall be made available at chargeable premium rates
otherwise determined under this title for such
property, except that the Administrator shall impose
and collect a surcharge for such coverage in an amount
equal to 10 percent of such chargeable premium rate,
which shall be deposited into the National Flood
Insurance Fund established under section 1310.
nature and limitation of insurance coverage
Sec. 1306. (a) The Administrator 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, provide by regulation for general 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,
subject to subsections (f) and (g) of section 1305 ;
(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 terms 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--
(i) $35,000 aggregate liability for
any single-family dwelling, and
$100,000 for any residential structure
containing more than one dwelling unit,
(ii) $10,000 aggregate liability per
dwelling unit for any contents related
to such unit, and
(iii) in the States of Alaska and
Hawaii, and in the Virgin Islands and
Guam, the limits provided in clause (i)
of this sentence shall be: $50,000
aggregate liability for any single-
family dwelling, and $150,000 for any
residential structure containing more
than one dwelling 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 term is defined by the
Administrator), which shall be equal to (i)
$100,000 plus (ii) $100,000 multiplied by the
number of such occupants and shall be allocated
among such occupants (or among the occupant or
occupants and the owner) under regulations
prescribed by the Administrator; except that
the aggregate liability for the structure
itself may in no case exceed $100,000; and
(C) in the case of church properties which
may become eligible for flood insurance under
section 1305--
(i) $100,000 aggregate liability for
any single structure, and
(ii) $100,000 aggregate liability per
unit for any contents related to such
unit; and
(2) in the case of any residential building designed
for the occupancy of from 1 to 4 families for which the
risk premium rate is determined in accordance with the
provisions of section 1307(a)(1), additional flood
insurance in excess of the limits specified in clause
(i) of subparagraph (A) of paragraph (1) shall be made
available, with respect to any single such building, up
to an aggregate liability (including such limits
specified in paragraph (1)(A)(i)) of $250,000;
(3) in the case of any residential property for which
the risk premium rate is determined in accordance with
the provisions of section 1307(a)(1), additional flood
insurance in excess of the limits specified in clause
(ii) of subparagraph (A) of paragraph (1) shall be made
available to every insured upon renewal and every
applicant for insurance so as to enable any such
insured or applicant to receive coverage up to a total
amount (including such limits specified in paragraph
(1)(A)(ii)) of $100,000;
(4) in the case of any nonresidential building,
including a church, for which the risk premium rate is
determined in accordance with the provisions of section
1307(a)(1), additional flood insurance in excess of the
limits specified in subparagraphs (B) and (C) of
paragraph (1) shall be made available with respect to
any single such building, up to an aggregate liability
(including such limits specified in subparagraph (B) or
(C) of paragraph (1), as applicable) of $500,000, and
coverage shall be made available up to a total of
$500,000 aggregate liability for contents owned by the
building owner and $500,000 aggregate liability for
each unit within the building for contents owned by the
tenant; and
(5) any flood insurance coverage which may be made
available in excess of the limits specified in
subparagraph (A), (B), or (C) of paragraph (1), 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 amount of such
excess coverage shall not in any case exceed an amount
equal to the applicable limit so specified (or
allocated) under paragraph (1)(C), (2), (3), or (4), as
applicable.
(c) Effective Date of Policies.--
(1) Waiting period.--Except as provided in paragraph
(2), coverage under a new contract for flood insurance
coverage under this title entered into after the date
of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994, and any
modification to coverage under an existing flood
insurance contract made after such date, shall become
effective upon the expiration of the 30-day period
beginning on the date that all obligations for such
coverage (including completion of the application and
payment of any initial premiums owed) are
satisfactorily completed.
(2) Exception.--The provisions of paragraph (1) shall
not apply to--
(A) the initial purchase of flood insurance
coverage under this title when the purchase of
insurance is in connection with the making,
increasing, extension, or renewal of a loan;
(B) the initial purchase of flood insurance
coverage pursuant to a revision or updating of
floodplain areas or flood-risk zones under
section 1360(f), if such purchase occurs during
the 1-year period beginning upon publication of
notice of the revision or updating under
section 1360(h); or
(C) the initial purchase of flood insurance
coverage for private property if--
(i) the Administrator determines that
the property is affected by flooding on
Federal land that is a result of, or is
exacerbated by, post-wildfire
conditions, after consultation with an
authorized employee of the Federal
agency that has jurisdiction of the
land on which the wildfire that caused
the post-wildfire conditions occurred;
and
(ii) the flood insurance coverage was
purchased not later than 60 days after
the fire containment date, as
determined by the appropriate Federal
employee, relating to the wildfire that
caused the post-wildfire conditions
described in clause (i).
(d) Optional High-Deductible Policies for Residential
Properties.--
(1) Availability.--In the case of residential
properties, the Administrator shall make flood
insurance coverage available, at the option of the
insured, that provides for a loss-deductible for damage
to the covered property in various amounts, up to and
including $10,000.
(2) Disclosure.--
(A) Form.--The Administrator shall provide
the information described in subparagraph (B)
clearly and conspicuously on the application
form for flood insurance coverage or on a
separate form, segregated from all unrelated
information and other required disclosures.
(B) Information.--The information described
in this subparagraph is--
(i) information sufficient to inform
the applicant of the availability of
the coverage option required by
paragraph (1) to applicants for flood
insurance coverage; and
(ii) a statement explaining the
effect of a loss-deductible and that,
in the event of an insured loss, the
insured is responsible out-of-pocket
for losses to the extent of the
deductible selected.
(e) Refund of Unearned Premiums for Policies Canceled Because
of Replacement With Private Flood Insurance.--
(1) Required refund.--Subject to subsection (c), if
at any time an insured under a policy for flood
insurance coverage for a property that is made
available under this title cancels such policy because
other duplicate flood insurance coverage for the same
property has been obtained from a source other than the
National Flood Insurance Program under this title, the
Administrator shall refund to the former insured a
portion of the premiums paid for the coverage made
available under this title, as determined consistent
with industry practice according to the portion of the
term of the policy that such coverage was in effect,
but only if a copy of declarations page of the new
policy obtained from a source other than the program
under this title is provided to the Administrator.
(2) Effective date of cancellation.--For purposes of
this subsection, a cancellation of a policy for
coverage made available under the national flood
insurance program under this title, for the reason
specified in paragraph (1), shall be effective--
(A) on the effective date of the new policy
obtained from a source other than the program
under this title, if the request for such
cancellation was received by the Administrator
before the expiration of the 6-month period
beginning on the effective date of the new
policy; or
(B) on the date of the receipt by the
Administrator of the request for cancellation,
if the request for such cancellation was
received by the Administrator after the
expiration of the 6-month period beginning on
the effective date of the new policy.
(3) Prohibition of refunds for properties receiving
increased cost of compliance claims.--No premium
amounts paid for coverage made available under this
title may be refunded pursuant to this subsection--
(A) with respect to coverage for any property
for which measures have been implemented using
amounts received pursuant to a claim under
increased cost of compliance coverage made
available pursuant to section 1304(b); or
(B) if a claim has been paid or is pending
under the policy term for which the refund is
sought.
[(b)] (f) Minimum Annual Deductible.--
(1) Pre-firm properties.--For any structure which is
covered by flood insurance under this title, and on
which construction or substantial improvement occurred
on or before December 31, 1974, or before the effective
date of an initial flood insurance rate map published
by the Administrator under section 1360 for the area in
which such structure is located, the minimum annual
deductible for damage to such structure shall be--
(A) $1,500, if the flood insurance coverage
for such structure covers loss of, or physical
damage to, such structure in an amount equal to
or less than $100,000; and
(B) $2,000, if the flood insurance coverage
for such structure covers loss of, or physical
damage to, such structure in an amount greater
than $100,000.
(2) Post-firm properties.--For any structure which is
covered by flood insurance under this title, and on
which construction or substantial improvement occurred
after December 31, 1974, or after the effective date of
an initial flood insurance rate map published by the
Administrator under section 1360 for the area in which
such structure is located, the minimum annual
deductible for damage to such structure shall be--
(A) $1,000, if the flood insurance coverage
for such structure covers loss of, or physical
damage to, such structure in an amount equal to
or less than $100,000; and
(B) $1,250, if the flood insurance coverage
for such structure covers loss of, or physical
damage to, such structure in an amount greater
than $100,000.
(3) Certain multiple-loss properties.--
Notwithstanding paragraph (1) or (2), the minimum
annual deductible for damage to any severe repetitive-
loss property or extreme repetitive-loss property shall
be not less than $5,000.
estimates of premium rates
Sec. 1307. (a) The Administrator is authorized to undertake
and carry out such studies and investigations and receive 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--
(i) the risk involved and accepted
actuarial principles; [and]
(ii) the flood mitigation activities
that an owner or lessee has undertaken
on a property, including differences in
the risk involved due to land use
measures, floodproofing, flood
forecasting, and similar measures,
[and]
(iii) the differences in flood risk
for properties impacted by coastal
flood risk and properties impacted by
riverine, or inland flood risk; and
(iv) both the risk identified by the
applicable flood insurance rate maps
and by other risk assessment data and
tools, including risk assessment models
and scores from appropriate sources;
and
(B) including--
(i) the applicable operating costs
and allowances set forth in the
schedules prescribed under section 1311
and reflected in such rates,
(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,
(iii) any remaining administrative
expenses incurred in carrying out the
flood insurance and floodplain
management programs (including the
costs of mapping activities under
section 1360) not included under clause
(ii), which shall be recovered by a fee
charged to policyholders and such fee
shall not be subject to any agents'
commissions, company expense
allowances, or State or local premium
taxes, and
(iv) all costs, as prescribed by
principles and standards of practice in
ratemaking adopted by the American
Academy of Actuaries and the Casualty
Actuarial Society, including--
(I) an estimate of the
expected value of future costs,
(II) all costs associated
with the transfer of risk, and
(III) the costs associated
with an individual risk
transfer with respect to risk
classes, as defined by the
Administrator,
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 which, together with a fee charged to
policyholders that shall not be not subject to any
agents' commission, company expenses allowances, or
State or local premium taxes, shall include any
administrative expenses incurred in carrying out the
flood insurance and floodplain management programs
(including the costs of mapping activities under
section 1360), except that the Administrator shall not
estimate rates under this paragraph for--
(A) any residential property which is not the
primary residence of an individual;
(B) any severe repetitive loss property;
[(C) any property that has incurred flood-
related damage in which the cumulative amounts
of payments under this title equaled or
exceeded the fair market value of such
property;]
(C) any extreme repetitive-loss property;
(D) any business property; [or]
(E) any property which on or after the date
of enactment of the Biggert-Waters Flood
Insurance Reform Act of 2012 has experienced or
sustained--
(i) substantial damage exceeding 50
percent of the [fair] market value of
such property; or
(ii) substantial improvement
exceeding 50 percent of the [fair]
market value of such property; [and] or
(F) any repetitive-loss property that has
received a claim payment for flood loss under
coverage made available under this title that
occurred after the date of enactment of this
Act; 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) In carrying out subsection (a), the Administrator shall,
to the maximum extent feasible and on a reimbursable 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 Administrator 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.
(d) Notwithstanding any other provision of law, any structure
existing on the date of enactment of the Flood Disaster
Protection Act of 1973 and located within Avoyelles,
Evangeline, Rapides, or Saint Landry Parish in the State of
Louisiana, which the Administrator determines is subject to
additional flood hazards as a result of the construction or
operation of the Atchafalaya Basin Levee System, shall be
eligible for flood insurance under this title (if and to the
extent it is eligible for such insurance under the other
provisions of this title) at premium rates that shall not
exceed those which would be applicable if such additional
hazards did not exist.
(e) Notwithstanding any other provision of law, any community
that has made adequate progress, acceptable to the
Administrator, on the construction or reconstruction of a flood
protection system which will afford flood protection for the
one-hundred-year frequency flood as determined by the
Administrator, shall be eligible for flood insurance under this
title (if and to the extent it is eligible for such insurance
under the other provisions of this title) at premium rates not
exceeding those which would be applicable under this section if
such flood protection system had been completed. The
Administrator shall find that adequate progress on the
construction or reconstruction of a flood protection system,
based on the present value of the completed flood protection
system, has been made only if: (1) 100 percent of the cost of
the system has been authorized; (2) at least 60 percent of the
cost of the system has been appropriated; (3) at least 50
percent of the cost of the system has been expended; and (4)
the system is at least 50 percent completed.Notwithstanding any
other provision of law, in determining whether a community has
made adequate progress on the construction, reconstruction, or
improvement of a flood protection system, the Administrator
shall consider all sources of funding, including Federal,
State, and local funds.
(f) Notwithstanding any other provision of law, this
subsection shall apply to riverine and coastal levees that are
located in a community which has been determined by the
Administrator of the Federal Emergency Management Agency to be
in the process of restoring flood protection afforded by a
flood protection system that had been previously accredited on
a Flood Insurance Rate Map as providing 100-year frequency
flood protection but no longer does so, and shall apply without
regard to the level of Federal funding of or participation in
the construction, reconstruction, or improvement of the flood
protection system. Except as provided in this subsection, in
such a community, flood insurance shall be made available to
those properties impacted by the disaccreditation of the flood
protection system at premium rates that do not exceed those
which would be applicable to any property located in an area of
special flood hazard, the construction of which was started
prior to the effective date of the initial Flood Insurance Rate
Map published by the Administrator for the community in which
such property is located. A revised Flood Insurance Rate Map
shall be prepared for the community to delineate as Zone AR the
areas of special flood hazard that result from the
disaccreditation of the flood protection system. A community
will be considered to be in the process of restoration if--
(1) the flood protection system has been deemed
restorable by a Federal agency in consultation with the
local project sponsor;
(2) a minimum level of flood protection is still
provided to the community by the disaccredited system;
and
(3) restoration of the flood protection system is
scheduled to occur within a designated time period and
in accordance with a progress plan negotiated between
the community and the Federal Emergency Management
Agency.
Communities that the Administrator of the Federal Emergency
Management Agency determines to meet the criteria set forth in
paragraphs (1) and (2) as of January 1, 1992, shall not be
subject to revised Flood Insurance Rate Maps that contravene
the intent of this subsection. Such communities shall remain
eligible for C zone rates for properties located in zone AR for
any policy written prior to promulgation of final regulations
for this section. Floodplain management criteria for such
communities shall not require the elevation of improvements to
existing structures and shall not exceed 3 feet above existing
grade for new construction, provided the base flood elevation
based on the disaccredited flood control system does not exceed
five feet above existing grade, or the remaining new
construction in such communities is limited to infill sites,
rehabilitation of existing structures, or redevelopment of
previously developed areas.
The Administrator of the Federal Emergency Management Agency
shall develop and promulgate regulations to implement this
subsection, including minimum floodplain management criteria,
within 24 months after the date of enactment of this
subsection.
(g) No Extension of Subsidy to New Policies or Lapsed
Policies.--The Administrator shall not provide flood insurance
to prospective insureds at rates less than those estimated
under subsection (a)(1), as required by paragraph (2) of that
subsection, for--
(1) any policy under the flood insurance program that
has lapsed in coverage,, unless the decision of the
policy holder to permit a lapse in flood insurance
coverage was as a result of the property covered by the
policy no longer being required to retain such
coverage; or
(2) any prospective insured who refuses to accept any
offer for mitigation assistance by the Administrator
(including an offer to relocate), including an offer of
mitigation assistance--
(A) following a major disaster, as defined in
section 102 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C.
5122); or
[(B) in connection with--
[(i) a repetitive loss property; or
[(ii) a severe repetitive loss
property.]
(B) in connection with a multiple-loss
property.
[(h) Definition.--In this section, the term ``severe
repetitive loss property'' has the following meaning:
[(1) Single-family properties.--In the case of a
property consisting of 1 to 4 residences, such term
means a property that--
[(A) is covered under a contract for flood
insurance made available under this title; and
[(B) has incurred flood-related damage--
[(i) for which 4 or more separate
claims payments have been made under
flood insurance coverage under this
chapter, with the amount of each such
claim exceeding $5,000, and with the
cumulative amount of such claims
payments exceeding $20,000; or
[(ii) for which at least 2 separate
claims payments have been made under
such coverage, with the cumulative
amount of such claims exceeding the
value of the property.
[(2) Multifamily properties.--In the case of a
property consisting of 5 or more residences, such term
shall have such meaning as the Director shall by
regulation provide.]
establishment of chargeable premium rates
Sec. 1308. (a) On the basis of estimates made under section
1307 and such other information as may be necessary, the
Administrator shall from time to time prescribe, after
providing notice--
(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.
(b) Such rates shall, insofar as practicable, be--
(1) based on a consideration of the respective risks
involved, including differences in risks due to
differences in flood risk resulting from coastal flood
hazards and riverine, or inland flood hazards and due
to land use measures, flood-proofing, flood
forecasting, and similar measures, taking into account
both the risk identified by the applicable flood
insurance rate maps and by other risk assessment data
and tools, including risk assessment models and scores
from appropriate sources ;
(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;
(3) adequate, together with the fee under paragraph
(1)(B)(iii) or (2) of section 1307(a), to provide for
any administrative expenses of the flood insurance and
floodplain management programs (including the costs of
mapping activities under section 1360);
(4) 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); and
(5) adequate, on the basis of accepted actuarial
principles, to cover the average historical loss year
obligations incurred by the National Flood Insurance
Fund.
(c) Actuarial Rate Properties.--Subject only to the
limitations provided under paragraphs (1) and (2), the
chargeable rate shall not be less than the applicable estimated
risk premium rate for such area (or subdivision thereof) under
section 1307(a)(1) with respect to the following properties:
(1) Post-firm properties.--Any property the
construction or substantial improvement of which the
Administrator determines has been started after
December 31, 1974, or started after the effective date
of the initial rate map published by the Administrator
under paragraph (2) of section 1360 for the area in
which such property is located, whichever is later,
except that the chargeable rate for properties under
this paragraph shall be subject to the limitation under
subsection (e).
(2) Certain leased coastal and river properties.--Any
property leased from the Federal Government (including
residential and nonresidential properties) that the
Administrator determines is located on the river-facing
side of any dike, levee, or other riverine flood
control structure, or seaward of any seawall or other
coastal flood control structure.
(d) With respect to any chargeable premium rate prescribed
under this section, a sum equal to the portion of the rate that
covers any administrative expenses of carrying out the flood
insurance and floodplain management programs which have been
estimated under paragraphs (1)(B)(ii) and (1)(B)(iii) of
section 1307(a) or paragraph (2) of such section (including the
fees under such paragraphs), shall be paid to the
Administrator. The Administrator shall deposit the sum in the
National Flood Insurance Fund established under section 1310.
(e) Annual Limitation on Premium Increases.--Except with
respect to properties described under paragraph (2) of
subsection (c), and notwithstanding any other provision of this
title--
(1) the chargeable risk premium rate for flood
insurance under this title for any property may not be
increased by more than [18 percent] 15 percent each
year, except--
(A) as provided in paragraph (4);
(B) in the case of property identified under
section 1307(g); or
(C) in the case of a property that--
(i) is located in a community that
has experienced a rating downgrade
under the community rating system
program carried out under section
1315(b);
(ii) is covered by a policy with
respect to which the policyholder has--
(I) decreased the amount of
the deductible; or
(II) increased the amount of
coverage; or
(iii) was misrated;
(2) the chargeable risk premium rates for flood
insurance under this title for any properties initially
rated under section 1307(a)(2) within any single risk
classification, excluding properties for which the
chargeable risk premium rate is not less than the
applicable estimated risk premium rate under section
1307(a)(1), shall be increased by an amount that
results in an average of such rate increases for
properties within the risk classification during any
12-month period of not less than [5 percent] 8 percent
of the average of the risk premium rates for such
properties within the risk classification upon the
commencement of such 12-month period;
(3) the chargeable risk premium rates for flood
insurance under this title for any properties within
any single risk classification may not be increased by
an amount that would result in the average of such rate
increases for properties within the risk classification
during any 12-month period exceeding 15 percent of the
average of the risk premium rates for properties within
the risk classification upon the commencement of such
12-month period; [and]
(4) the chargeable risk premium rates for flood
insurance under this title for any properties described
in subparagraphs (A) through (E) of section 1307(a)(2)
shall be increased by 25 percent each year, until the
average risk premium rate for such properties is equal
to the average of the risk premium rates for properties
[described under paragraph (3).] estimated under
section 1307(a)(1); and
(5) the chargeable risk premium rates for flood
insurance under this title for any properties described
in subparagraph (F) of section 1307(a)(2) shall be
increased by not less than 15 percent each year, until
the average risk premium rate for such properties is
equal to the average of the risk premium rates for
properties estimated under section 1307(a)(1).
(f) Adjustment of Premium.--Notwithstanding any other
provision of law, if the Administrator determines that the
holder of a flood insurance policy issued under this Act is
paying a lower premium than is required under this section due
to an error in the flood plain determination, the Administrator
may only prospectively charge the higher premium rate.
(g) Frequency of Premium Collection.--
(1) Options.--With respect to any chargeable premium
rate prescribed under this section, the Administrator
shall provide policyholders that are not required to
escrow their premiums and fees for flood insurance as
set forth under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a) with the
option of paying their premiums annually or monthly.
(2) Monthly installment payment of premiums.--
(A) Exemption from rulemaking.--Until such
time as the Administrator promulgates
regulations implementing paragraph (1) of this
subsection, the Administrator may adopt
policies and procedures, notwithstanding any
other provisions of law and in alignment and
consistent with existing industry escrow and
servicing standards, necessary to implement
such paragraph without undergoing notice and
comment rulemaking and without conducting
regulatory analyses otherwise required by
statute, regulation, or Executive order.
(B) Installment plan fee.--The Administrator
may charge policyholders choosing to pay
premiums in monthly installments a fee not to
exceed $50 annually.
(C) Pilot program.--The Administrator may
initially implement paragraph (1) of this
subsection as a pilot program that provides for
a gradual phase-in of implementation.
(h) Rule of Construction.--For purposes of this section, the
calculation of an ``average historical loss year''--
(1) includes catastrophic loss years; and
(2) shall be computed in accordance with generally
accepted actuarial principles.
(i) [Rates for Properties Newly Mapped into Areas with
Special Flood Hazards.--] Rates for Properties Newly Mapped
Into Areas With Special Flood Hazards._
[(1)] [Notwithstanding] (1) In general.--Except as
provided in paragraph (2) and notwithstanding
subsection (f), the premium rate for flood insurance
under this title that is purchased on or after the date
of the enactment of this subsection--
[(1)] (A) on a property located in an area
not previously designated as having special
flood hazards and that, pursuant to any
issuance, revision, updating, or other change
in a flood insurance map, becomes designated as
such an area; and--
[(2)] (B) where such flood insurance premium
rate is calculated under subsection (a)(1) of
section 1307 (42 U.S.C. 4014(a)(1)),
shall for the first policy year be the preferred risk
premium for the property and upon renewal shall be
calculated in accordance with subsection (e) of this
section until the rate reaches the rate calculated
under subsection (a)(1) of section 1307.
(2) Inapplicability to multiple-loss properties.--
Paragraph (1) shall not apply to multiple-loss
properties.
(j) Premiums and Reports.--In setting premium risk rates, in
addition to striving to achieve the objectives of this title
the Administrator shall also strive to minimize the number of
policies with annual premiums that exceed one percent of the
total coverage provided by the policy. For any policies
premiums that exceed this one percent threshold, the
Administrator shall report such exceptions to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate.
(k) Consideration of Mitigation Methods.--In calculating the
risk premium rate charged for flood insurance for a property
under this section, the Administrator shall take into account
the implementation of any mitigation method identified by the
Administrator in the guidance issued under section 1361(d) (42
U.S.C. 4102(d)).
[(l) Clear Communications.--The Administrator shall clearly
communicate full flood risk determinations to individual
property owners regardless of whether their premium rates are
full actuarial rates.]
(l) Clear Communications.--
(1) Newly issued and renewed policies.--For all
policies for flood insurance coverage under the
National Flood Insurance Program that are newly issued
or renewed, the Administrator shall clearly communicate
to policyholders--
(A) their full flood risk determinations,
regardless of whether their premium rates are
full actuarial rates; and
(B) the number and dollar value of claims
filed for the property, over the life of the
property, under a flood insurance policy made
available under the Program and the effect,
under this Act, of filing any further claims
under a flood insurance policy with respect to
that property.
(2) Multiple-loss properties.--Pursuant to paragraph
(1), the Administrator shall clearly communicate to all
policyholders for multiple-loss properties the effect
on the premium rates charged for such a property of
filing any further claims under a flood insurance
policy with respect to that property.
(m) Protection of Small Businesses, Non-Profits, Houses of
Worship, and Residences.--
(1) Report.--Not later than 18 months after the date
of the enactment of this section and semiannually
thereafter, the Administrator shall monitor and report
to Committee on Financial Services of the House
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate, the Administrator's
assessment of the impact, if any, of the rate increases
required under subparagraphs (A) and (D) of section
1307(a)(2) and the surcharges required under section
1308A on the affordability of flood insurance for--
(A) small businesses with less than 100
employees;
(B) non-profit entities;
(C) houses of worship; and
(D) residences with a value equal to or less
than 25 percent of the median home value of
properties in the State in which the property
is located.
(2) Recommendations.--If the Administrator determines
that the rate increases or surcharges described in
paragraph (1) are having a detrimental effect on
affordability, including resulting in lapsed policies,
late payments, or other criteria related to
affordability as identified by the Administrator, for
any of the properties identified in subparagraphs (A)
through (D) of such paragraph, the Administrator shall,
not later than 3 months after making such a
determination, make such recommendations as the
Administrator considers appropriate to improve
affordability to the Committee on Financial Services of
the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate.
(n) Disclosure of Premium Methodology.--
(1) Disclosure.--Six months prior to the effective
date of risk premium rates, the Administrator shall
cause to be published in the Federal Register an
explanation of the bases for, and methodology used to
determine, the chargeable premium rates to be effective
for flood insurance coverage under this title.
(2) Alignment with industry practices.--The
disclosure required under paragraph (1) shall, to the
extent practicable, be aligned with industry patterns
and practices and shall include information and data
recommended by the State insurance commissioners
guidelines on rate filings.
(3) Public meetings.--The Administrator shall, on an
annual basis, hold at least one public meeting in each
of the geographical regions of the United States, as
defined by the Administrator for purposes of the
National Flood Insurance Program, for the purpose of
explaining the methodology described in paragraph (1)
and answering questions and receiving comments
regarding such methodology. The Administrator shall
provide notice of each such public meeting in advance,
in such manner, and in using such means as are
reasonably designed to notify interested parties and
members of the public of the date and time, location,
and purpose of such meeting, and of how to submit
questions or comments.
(o) Premium Adjustment To Reflect Current Flood Risk.--
(1) In general.--Except as provided in paragraph (2),
the Administrator shall rate a multiple-loss property
that is charged a risk premium rate estimated under
section 1307(a)(1) (42 U.S.C. 4014(a)(1)) based on the
current risk of flood reflected in the flood insurance
rate map in effect at the time of rating.
(2) Adjustment for existing policies.--For policies
for flood insurance under this title in force on the
date of the enactment of this Act for properties
described in paragraph (1)--
(A) notwithstanding subsection (e) of this
section, the Administrator shall increase risk
premium rates by not less than 15 percent each
year until such rates comply with paragraph (1)
of this subsection; and
(B) any rate increases required by paragraph
(1) shall commence following a claim payment
for flood loss under coverage made available
this title that occurred after the date of
enactment of this Act.
SEC. 1308A. PREMIUM SURCHARGE.
(a) Imposition and Collection.--[The Administrator shall
impose and collect an annual surcharge, in the amount provided
in subsection (b), on all policies for flood insurance coverage
under the National Flood Insurance Program that are newly
issued or renewed after the date of the enactment of this
section.] The Administrator shall impose and collect a non-
refundable annual surcharge, in the amount provided in
subsection (b), on all policies for flood insurance coverage
under the National Flood Insurance Program that are newly
issued or renewed after the date of the enactment of this
section. Such surcharge shall be in addition to the surcharge
under section 1304(b) and any other assessments and surcharges
applied to such coverage.
[(b) Amount.--The amount of the surcharge under subsection
(a) shall be--
[(1) $25, except as provided in paragraph (2); and
[(2) $250, in the case of a policy for any property
that is--
[(A) a non-residential property; or
[(B) a residential property that is not the
primary residence of an individual.]
(b) Amount.--The amount of the surcharge under subsection (a)
shall be $40, except as follows:
(1) Non-primary residences eligible for prp.--The
amount of the surcharge under subsection (a) shall be
$125 in the case of in the case of a policy for any
property that is--
(A) a residential property that is not the
primary residence of an individual, and
(B) eligible for preferred risk rate method
premiums.
(2) Non-residential properties and non-primary
residences not eligible for prp.--The amount of the
surcharge under subsection (a) shall be $275 in case of
in the case of a policy for any property that is--
(A) a non-residential property; or
(B) a residential property that is--
(i) not the primary residence of an
individual; and
(ii) not eligible for preferred risk
rate method premiums.
(c) Termination.--Subsections (a) and (b) shall cease to
apply on the date on which the chargeable risk premium rate for
flood insurance under this title for each property covered by
flood insurance under this title, other than properties for
which premiums are calculated under subsection (e) or (f) of
section 1307 or section 1336 of this Act (42 U.S.C. 4014, 4056)
or under section 100230 of the Biggert-Waters Flood Insurance
Reform Act of 2012 (42 U.S.C. 4014 note), is not less than the
applicable estimated risk premium rate under section 1307(a)(1)
for such property.
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 issue of notes or other obligations or the
Secretary of the Treasury), as amended by subsections (a) and
(b) of section 1303 of this Act, shall be available to the
Administrator 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
Administrator pursuant to such authority (1) without the
approval of the President, may not exceed $500,000,000, and (2)
with the approval of the President, may not exceed
$1,500,000,000 through the date specified in section 1319, and
$1,000,000,000 thereafter; except that, through [September 30,
2017] September 30, 2022 , clause (2) of this sentence shall be
applied by substituting ``$30,425,000,000'' for
``$1,500,000,000''. The Administrator shall report to the
Committee on Banking, Finance and Urban Affairs of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate at any time when he requests the
approval of the President in accordance with the preceding
sentence.
(b) Any funds borrowed by the Administrator under this
authority shall, from time to time, be deposited in the
National Flood Insurance Fund established under section 1310.
(c) Upon the exercise of the authority established under
subsection (a), the Administrator shall transmit a schedule for
repayment of such amounts to--
(1) the Secretary of the Treasury;
(2) the Committee on Banking, Housing, and Urban
Affairs of the Senate; and
(3) the Committee on Financial Services of the House
of Representatives.
(d) In connection with any funds borrowed by the
Administrator under the authority established in subsection
(a), the Administrator, beginning 6 months after the date on
which such funds are borrowed, and continuing every 6 months
thereafter until such borrowed funds are fully repaid, shall
submit a report on the progress of such repayment to--
(1) the Secretary of the Treasury;
(2) the Committee on Banking, Housing, and Urban
Affairs of the Senate; and
(3) the Committee on Financial Services of the House
of Representatives.
(e) Independent Actuarial Review.--
(1) Fiduciary responsibility.--The Administrator has
a responsibility to ensure that the National Flood
Insurance Program remains financially sound. Pursuant
to this responsibility, the Administrator shall from
time to time review and eliminate nonessential costs
and positions within the Program, unless otherwise
authorized or required by law, as the Administrator
determines to be necessary.
(2) Annual independent actuarial study.--The
Administrator shall provide for an independent
actuarial study of the National Flood Insurance Program
to be conducted annually, which shall analyze the
financial position of the program based on the long-
term estimated losses of the program. The Administrator
shall submit a report (together with the independent
actuarial study) annually to the Committee on Financial
Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate describing the results of such study, including
a determination of whether the Program has collected
revenue sufficient to cover the administrative expenses
of carrying out the flood insurance program, which are
reflected in the risk premium rates, cost of capital,
all other costs associated with the transfer of risks,
and expected claims payments during the reporting
period, and an overall assessment of the financial
status of the Program.
(3) Determination of actuarial budget deficit.--
(A) Requirement.--Within the report submitted
under paragraph (2), the Administrator shall
issue a determination of whether there exists
an actuarial budget deficit for the Program for
the year covered in the report. The report
shall recommend any changes to the Program, if
necessary, to ensure that the program remains
financially sound.
(B) Basis of determination.--The
determination required by subparagraph (A)
shall be based solely upon whether the portion
of premiums estimated and collected by the
Program during the reporting period is
sufficient to cover the administrative expenses
of carrying out the flood insurance program,
which are reflected in the risk premium rates,
cost of capital, all other costs associated
with the transfer of risk, and expected claims
payments for the reporting period.
(4) Quarterly reports.--During each fiscal year, on a
calendar quarterly basis, the Secretary shall cause to
be published in the Federal Register or comparable
method, with notice to the Committee on Financial
Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate, information which shall specify--
(A) the cumulative volume of policies that
have been underwritten under the National Flood
Insurance Program during such fiscal year
through the end of the quarter for which the
report is submitted;
(B) the types of policies insured,
categorized by risk;
(C) any significant changes between actual
and projected claim activity;
(D) projected versus actual loss rates;
(E) the cumulative number of currently
insured repetitive-loss properties, severe
repetitive-loss properties, and extreme
repetitive-loss properties that have been
identified during such fiscal year through the
end of the quarter for which the report is
submitted;
(F) the cumulative number of properties that
have undergone mitigation assistance, through
the National Flood Insurance Program, during
such fiscal year through the end of the quarter
for which the report is submitted; and
(G) the number and location, by State or
territory, of each policyholder that has been
identified for such fiscal year as an eligible
household for purposes of the flood insurance
affordability program under section 1326.
The first quarterly report under this paragraph shall
be submitted on the last day of the first quarter of
fiscal year 2018, or on the last day of the first full
calendar quarter following the enactment of the 21st
Century Flood Reform Act, whichever occurs later.
* * * * * * *
SEC. 1310A. RESERVE FUND.
(a) Establishment of Reserve Fund.--In carrying out the flood
insurance program authorized by this chapter, the Administrator
shall establish in the Treasury of the United States a National
Flood Insurance Reserve Fund (in this section referred to as
the ``Reserve Fund'') which shall--
(1) be an account separate from any other accounts or
funds available to the Administrator; and
(2) be available for meeting the expected future
obligations of the flood insurance program, including--
(A) the payment of claims;
(B) claims adjustment expenses; and
(C) the repayment of amounts outstanding
under any note or other obligation issued by
the Administrator under section 1309(a).
(b) Reserve Ratio.--Subject to the phase-in requirements
under subsection (d), the Reserve Fund shall maintain a balance
equal to--
(1) 1 percent of the sum of the total potential loss
exposure of all outstanding flood insurance policies in
force in the prior fiscal year; or
(2) such higher percentage as the Administrator
determines to be appropriate, taking into consideration
any circumstance that may raise a significant risk of
substantial future losses to the Reserve Fund.
(c) Maintenance of Reserve Ratio.--
(1) In general.--The Administrator shall have the
authority to establish, increase, or decrease the
amount of aggregate annual insurance premiums to be
collected for any fiscal year necessary--
(A) to maintain the reserve ratio required
under subsection (b); and
(B) to achieve such reserve ratio, if the
actual balance of such reserve is below the
amount required under subsection (b).
(2) Considerations.--In exercising the authority
granted under paragraph (1), the Administrator shall
consider--
(A) the expected operating expenses of the
Reserve Fund;
(B) the insurance loss expenditures under the
flood insurance program;
(C) any investment income generated under the
flood insurance program; and
(D) any other factor that the Administrator
determines appropriate, including any
provisions relating to chargeable premium rates
or annual increases of such rates .
(3) Limitations.--
[(A) Rates.--In exercising the authority
granted under paragraph (1), the Administrator
shall be subject to all other provisions of
this Act, including any provisions relating to
chargeable premium rates or annual increases of
such rates.]
(A) Parity.--In exercising the authority
granted under paragraph (1) to increase
premiums, the Administrator shall institute a
single annual, uniform rate of assessment for
all individual policyholders.
(B) Use of additional annual insurance
premiums.--Notwithstanding any other provision
of law or any agreement entered into by the
Administrator, the Administrator shall ensure
that all amounts attributable to the
establishment or increase of annual insurance
premiums under paragraph (1) are transferred to
the Administrator for deposit into the Reserve
Fund, to be available for meeting the expected
future obligations of the flood insurance
program as described in subsection (a)(2).
(4) Deposit of premium surcharges.--The Administrator
shall deposit in the Reserve Fund any surcharges
collected pursuant to section 1308A.
(d) Phase-in Requirements.--The phase-in requirements under
this subsection are as follows:
[(1) In general.--Beginning in fiscal year 2013 and
not ending until the fiscal year in which the ratio
required under subsection (b) is achieved, in each such
fiscal year the Administrator shall place in the
Reserve Fund an amount equal to not less than 7.5
percent of the reserve ratio required under subsection
(b).]
(1) In general.--Beginning in fiscal year 2018 and
not ending until the fiscal year in which the ratio
required under subsection (b) is achieved--
(A) in each fiscal year the Administrator
shall place in the Reserve Fund an amount equal
to not less than 7.5 percent of the reserve
ratio required under subsection (b); and
(B) if in any given fiscal year the
Administrator fails to comply with subparagraph
(A), for the following fiscal year the
Administrator shall increase the rate of the
annual assessment pursuant to subsection
(c)(3)(A) by at least one percentage point over
the rate of the annual assessment pursuant to
subsection (c)(3)(A) in effect on the first day
of such given fiscal year.
(2) Amount satisfied.--As soon as the ratio required
under subsection (b) is achieved, and except as
provided in paragraph (3), the Administrator shall not
be required to set aside any amounts for the Reserve
Fund nor to increase assessments pursuant to paragraph
(1)(B) .
(3) Exception.--If at any time after the ratio
required under subsection (b) is achieved, the Reserve
Fund falls below the required ratio under subsection
(b), the Administrator shall place in the Reserve Fund
for that fiscal year an amount equal to not less than
7.5 percent of the reserve ratio required under
subsection (b) and paragraph (1)(B) shall apply until
the fiscal year in which the ratio required under
subsection (b) is achieved .
(e) Limitation on Reserve Ratio.--In any given fiscal year,
if the Administrator determines that the reserve ratio required
under subsection (b) cannot be achieved, the Administrator
shall submit, on a calendar quarterly basis, a report to
Congress that--
(1) describes and details the specific concerns of
the Administrator regarding the consequences of the
reserve ratio not being achieved;
(2) demonstrates how such consequences would harm the
long-term financial soundness of the flood insurance
program; and
(3) indicates the maximum attainable reserve ratio
for that particular fiscal year.
(f) Investment.--The Secretary of the Treasury shall invest
such amounts of the Reserve Fund as the Secretary determines
advisable in obligations issued or guaranteed by the United
States.
* * * * * * *
payment of claims
Sec. 1312. (a) In General.--[The Administrator] Subject to
other provisions of this section, the Administrator 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.
[(c)] (b) Payment of Claims to Condominium Owners.--The
Administrator may not deny payment for any damage to or loss of
property which is covered by flood insurance to condominium
owners who purchased such flood insurance separate and apart
from the flood insurance purchased by the condominium
association in which such owner is a member, based solely, or
in any part, on the flood insurance coverage of the condominium
association or others on the overall property owned by the
condominium association.
(c) Deadline for Approval of Claims.--
(1) In general.--The Administrator shall provide
that, in the case of any claim for damage to or loss of
property under flood insurance coverage made available
under this title, an initial determination regarding
approval of a claim for payment or disapproval of the
claim be made, and notification of such determination
be provided to the insured making such claim, not later
than the expiration of the 120-day period (as such
period may be extended pursuant to paragraph (2))
beginning upon the day on which the policyholder
submits a signed proof of loss detailing the damage and
amount of the loss. Payment of approved claims shall be
made as soon as possible after such approval.
(2) Extension of deadline.--The Administrator shall
provide that the period referred to in paragraph (1)
may be extended by a single additional period of 15
days in cases where extraordinary circumstances are
demonstrated. The Administrator shall, by regulation,
establish criteria for demonstrating such extraordinary
circumstances and for determining to which claims such
extraordinary circumstances apply.
dissemination of flood insurance information
Sec. 1313. (a) Public Information and Data.--The
Administrator 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.
(b) Availability of Flood Insurance Information Upon
Request.--Not later than 30 days after a request for such
information by the current owner of a property, the
Administrator shall provide to the owner any information,
including historical information, available to the
Administrator on flood insurance program coverage, payment of
claims, and flood damages for the property at issue, and any
information the Administrator has on whether the property owner
may be required to purchase coverage under the National Flood
Insurance Program due to previous receipt of Federal disaster
assistance, including assistance provided by the Small Business
Administration, the Department of Housing and Urban
Development, or the Federal Emergency Management Agency, or any
other type of assistance that subjects the property to the
mandatory purchase requirement under section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a).
* * * * * * *
state and local land use controls
Sec. 1315. (a) Requirement for Participation in Flood
Insurance Program.--
(1) In general.--After December 31, 1971, no new
flood insurance coverage shall be provided under this
title in any area (or subdivision thereof) unless an
appropriate public body shall have adopted adequate
land use and control measures (with effective
enforcement provisions) which the Administrator finds
are consistent with the comprehensive criteria for land
management and use under section 1361.
(2) Agricultural structures.--
(A) Activity restrictions.--Notwithstanding
any other provision of law, the adequate land
use and control measures required to be adopted
in an area (or subdivision thereof) pursuant to
paragraph (1) may provide, at the discretion of
the appropriate State or local authority, for
the repair and restoration to predamaged
conditions of an agricultural structure that--
(i) is a repetitive loss structure;
or
(ii) has incurred flood-related
damage to the extent that the cost of
restoring the structure to its
predamaged condition would equal or
exceed 50 percent of the market value
of the structure before the damage
occurred.
(B) Premium rates and coverage.--To the
extent applicable, an agricultural structure
repaired or restored pursuant to subparagraph
(A) shall pay chargeable premium rates
established under section 1308 at the estimated
risk premium rates under section 1307(a)(1). If
resources are available, the Administrator
shall provide technical assistance and
counseling, upon request of the owner of the
structure, regarding wet flood-proofing and
other flood damage reduction measures for
agricultural structures. The Administrator
shall not be required to make flood insurance
coverage available for such an agricultural
structure unless the structure is wet flood-
proofed through permanent or contingent
measures applied to the structure or its
contents that prevent or provide resistance to
damage from flooding by allowing flood waters
to pass through the structure, as determined by
the Administrator.
(C) Prohibition on disaster relief.--
Notwithstanding any other provision of law, any
agricultural structure repaired or restored
pursuant to subparagraph (A) shall not be
eligible for disaster relief assistance under
any program administered by the Administrator
or any other Federal agency.
(D) Definitions.--For purposes of this
paragraph--
(i) the term ``agricultural
structure'' means any structure used
exclusively in connection with the
production, harvesting, storage,
raising, or drying of agricultural
commodities; and
(ii) the term ``agricultural
commodities'' means agricultural
commodities and livestock.
(b) Community Rating System and Incentives for Community
Floodplain Management.--
(1) Authority and goals.--The Administrator shall
carry out a community rating system program, under
which communities participate voluntarily--
(A) to provide incentives for measures that
reduce the risk of flood or erosion damage that
exceed the criteria set forth in section 1361
and evaluate such measures;
(B) to encourage adoption of more effective
measures that protect natural and beneficial
floodplain functions;
(C) to encourage floodplain and erosion
management; and
(D) to promote the reduction of Federal flood
insurance losses.
(2) Incentives.--The program shall provide incentives
in the form of credits on premium rates for flood
insurance coverage in communities that the
Administrator determines have adopted and enforced
measures that reduce the risk of flood and erosion
damage that exceed the criteria set forth in section
1361. In providing incentives under this paragraph, the
Administrator [may] shall provide for credits to flood
insurance premium rates in communities that the
Administrator determines have implemented measures that
protect natural and beneficial floodplain functions.
(3) Credits.--The credits on premium rates for flood
insurance coverage shall be based on the estimated
reduction in flood and erosion damage risks resulting
from the measures adopted by the community under this
program, and the Administrator shall provide credits to
the maximum number of communities practicable . If a
community has received mitigation assistance under
section 1366, the credits shall be phased in a manner,
determined by the Administrator, to recover the amount
of such assistance provided for the community.
(4) Reports.--Not later than 2 years after the date
of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994 and not less than
every 2 years thereafter, the Administrator shall
submit a report to the Congress regarding the program
under this subsection. Each report shall include an
analysis of the cost-effectiveness of the program, any
other accomplishments or shortcomings of the program,
and any recommendations of the Administrator for
legislation regarding the program.
* * * * * * *
program expiration
Sec. 1319. No new contract for flood insurance under this
title shall be entered into after [September 30, 2017]
September 30, 2022 .
* * * * * * *
SEC. 1326. FLOOD INSURANCE AFFORDABILITY PROGRAM.
(a) Authority.--The Administrator shall carry out a program
under this section to provide financial assistance, through
State programs carried out by participating States, for
eligible low-income households residing in eligible properties
to purchase policies for flood insurance coverage made
available under this title.
(b) Participation.--Participation in the program under this
section shall be voluntary on the part of a State or consortium
of States.
(c) State Administration.--Each participating State shall
delegate to a State agency or nonprofit organization the
responsibilities for administrating the State's program under
this section.
(d) Eligible Households.--
(1) In general.--During any fiscal year, assistance
under the program under this section may be provided
only for a household that has an income, as determined
for such fiscal year by the participating State in
which such household resides, that is less than the
income limitation established for such fiscal year for
purposes of the State program by the participating
State, except that--
(A) assistance under the program under this
section may not be provided for a household
having a income that exceeds the greater of--
(i) the amount equal to 150 percent
of the poverty level for such State; or
(ii) the amount equal to 60 percent
of the median income of households
residing in such State; and
(B) a State may not exclude a household from
eligibility in a fiscal year solely on the
basis of household income if such income is
less than 110 percent of the poverty level for
the State in which such household resides.
(2) State verification of income eligibility.--In
verifying income eligibility for purposes of paragraph
(1), the participating State may apply procedures and
policies consistent with procedures and policies used
by the State agency administering programs under part A
of title IV of the Social Security Act (42 U.S.C. 601
et seq.), under title XX of the Social Security Act (42
U.S.C. 1397 et seq.), under subtitle B of title VI of
the Omnibus Budget Reconciliation Act of 1981 (42
U.S.C. 9901 et seq.; relating to community services
block grant program), under any other provision of law
that carries out programs which were administered under
the Economic Opportunity Act of 1964 (42 U.S.C. 2701 et
seq.) before August 13, 1981, or under other income
assistance or service programs (as determined by the
State).
(3) Certification by state of eligibility
households.--For each fiscal year, each participating
State shall certify to the Administrator compliance of
households who are to be provided assistance under the
State program during such fiscal year with the income
requirements under paragraph (1).
(e) Eligible Properties.--Assistance under the program under
this section may be provided only for a residential property--
(1) that has 4 or fewer residences;
(2) that is owned and occupied by an eligible
household;
(3) for which a base flood elevation is identified on
a flood insurance rate map of the Administrator that is
in effect;
(4) for which such other information is available as
the Administrator considers necessary to determine the
flood risk associated with such property; and
(5) that is located in a community that is
participating in the national flood insurance program.
(f) Types of Assistance.--Under the program under this
section, a participating State shall elect to provide financial
assistance for eligible households in one of the following
forms:
(1) Limitation on rate increases.--By establishing a
limitation on the rate of increases in the amount of
chargeable premiums paid by eligible households for
flood insurance coverage made available under this
title.
(2) Limitation on rates.--By establishing a
limitation on the amount of chargeable premiums paid by
eligible households for flood insurance coverage made
available under this title.
(g) Notification to FEMA.--Under the program under this
section, a participating State shall, on a fiscal year basis
and at the time and in the manner provided by the
Administrator--
(1) identify for the Administrator the eligible
households residing in the State who are to be provided
assistance under the State program during such fiscal
year; and
(2) notify the Administrator of the type and levels
of assistance elected under subsection (f) to be
provided under the State program with respect to such
eligible households residing in the State.
(h) Amount of Assistance.--Under the program under this
section, in each fiscal year the Administrator shall,
notwithstanding section 1308, make flood insurance coverage
available for purchase by households identified as eligible
households for such fiscal year by a participating State
pursuant to subsection (e) at chargeable premium rates that are
discounted by an amount that is based on the type and levels of
assistance elected pursuant to subsection (f) by the
participating State for such fiscal year.
(i) Billing Statement.--In the case of an eligible household
for which assistance under the program under this section is
provided with respect to a policy for flood insurance coverage,
the annual billing statement for such policy shall include
statements of the following amounts:
(1) The estimated risk premium rate for the property
under section 1307(a)(1).
(2) If applicable, the estimated risk premium rate
for the property under section 1307(a)(2).
(3) The chargeable risk premium rate for the property
taking into consideration the discount pursuant to
subsection (h).
(4) The amount of the discount pursuant to subsection
(h) for the property.
(5) The number and dollar value of claims filed for
the property, over the life of the property, under a
flood insurance policy made available under the Program
and the effect, under this Act, of filing any further
claims under a flood insurance policy with respect to
that property.
(j) Funding Through State Affordability Surcharges.--
(1) Imposition and collection.--Notwithstanding
section 1308, for each fiscal year in which flood
insurance coverage under this title is made available
for properties in a participating State at chargeable
premium rates that are discounted pursuant to
subsection (f), the Administrator shall impose and
collect a State affordability surcharge on each policy
for flood insurance coverage for a property located in
such participating State that is (A) not a residential
property having 4 or fewer residences, or (B) is such a
residential property but is owned by a household that
is not an eligible household for purposes of such
fiscal year.
(2) Amount.--The amount of the State affordability
surcharge imposed during a fiscal year on each such
policy for a property in a participating State shall
be--
(A) sufficient such that the aggregate amount
of all such State affordability surcharges
imposed on properties in such participating
State during such fiscal year is equal to the
aggregate amount by which all policies for
flood insurance coverage under this title sold
during such fiscal year for properties owned by
eligible households in the participating State
are discounted pursuant to subsection (f); and
(B) the same amount for each property in the
participating State being charged such a
surplus.
(k) Treatment of Other Surcharges.--The provision of
assistance under the program under this section with respect to
any property and any limitation on premiums or premium
increases pursuant to subsection (f) for the property shall not
affect the applicability or amount of any surcharge under
section 1308A for the property, of any increase in premiums
charged for the property pursuant to section 1310A(c), or of
any equivalency fee under section 1308B for the property.
(l) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Participating state.--The term ``participating
State'' means, with respect to a fiscal year, a State
that is participating in the program under this section
for such fiscal year.
(2) Eligible household.--The term ``eligible
household'' means, with respect to a fiscal year and a
participating State, a household that has an income
that is less than the amount of the income limitation
for the fiscal year established for purposes of the
State program of such participating State pursuant to
subsection (g)(1).
(3) Poverty level.--The term ``poverty level'''
means, with respect to a household in any State, the
income poverty line as prescribed and revised at least
annually pursuant to section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)), as
applicable to such State.
(4) State.--The term ``State'' shall include a
consortium of States established for purposes of
administrating the program under this section with
respect to the member States of the consortium.
(5) State program.--The term ``State program'' means
a program carried out in compliance with this section
by a participating State in conjunction with the
program under this section of the Administrator.
(m) Regulations.--The Administrator shall issue such
regulations as may be necessary to carry out the program under
this section.
SEC. 1327. DISCLOSURE OF FLOOD RISK INFORMATION UPON TRANSFER OF
PROPERTY.
(a) Requirement for Participation in Program.--After
September 30, 2022, no new flood insurance coverage may be
provided under this title for any real property located in any
area (or subdivision thereof) unless an appropriate body has
imposed, by statute or regulation, a duty on any seller or
lessor of improved real estate located in such area to provide
to any purchaser or lessee of such property a property flood
hazard disclosure which the Administrator has determined meets
the requirements of subsection (b).
(b) Disclosure Requirements.--A property flood hazard
disclosure for a property shall meet the requirements of this
subsection only if the disclosure--
(1) is made in writing;
(2) discloses any actual knowledge of the seller or
lessor of--
(A) prior physical damage caused by flood to
any building located on the property;
(B) prior insurance claims for losses covered
under the National Flood Insurance Program or
private flood insurance with respect to such
property;
(C) any previous notification regarding the
designation of the property as a repetitive
loss or severe repetitive loss property; and
(D) any Federal legal obligation to obtain
and maintain flood insurance running with the
property, such as any obligation due to a
previous form of disaster assistance under the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act received by any owner
of the property; and
(3) is delivered by or on behalf of the seller or
lessor to the purchaser or lessee before such purchaser
or lessee becomes obligated under any contract for
purchase or lease of the property.
CHAPTER II--ORGANIZATION AND ADMINISTRATION OF THE FLOOD INSURANCE
PROGRAM
* * * * * * *
Part C--Provisions of General Applicability
services by insurance industry
Sec. 1345. (a) In administering the flood insurance program
under this chapter, the Administrator is authorized to enter
into any contracts, 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 1311.
(b) Any such contracts, agreements, or other arrangements may
be entered into without regard to the provisions of section
3709 of the Revised Statutes (41 U.S.C. 5) or any other
provisions of law requiring competitive bidding and without
regard to the provisions of the Federal Advisory Committee Act
(5 U.S.C. App.).
(c) The Administrator of the Federal Emergency Management
Agency shall hold any agent or broker selling or undertaking to
sell flood insurance under this title harmless from any
judgment for damages against such agent or broker as a result
of any court action by a policyholder or applicant arising out
of an error or omission on the part of the Federal Emergency
Management Agency, and shall provide any such agent or broker
with indemnification, including court costs and reasonable
attorney fees, arising out of and caused by an error or
omission on the part of the Federal Emergency Management Agency
and its contractors. The Administrator of the Federal Emergency
Management Agency may not hold harmless or indemnify an agent
or broker for his or her error or omission.
(d) FEMA Authority on Transfer of Policies.--Notwithstanding
any other provision of this title, the Administrator may, at
the discretion of the Administrator, refuse to accept the
transfer of the administration of policies for coverage under
the flood insurance program under this title that are written
and administered by any insurance company or other insurer, or
any insurance agent or broker.
(e) Risk Transfer.--The Administrator may secure reinsurance
of coverage provided by the flood insurance program from the
private reinsurance and capital markets at rates and on terms
determined by the Administrator to be reasonable and
appropriate, in an amount sufficient to maintain the ability of
the program to pay claims.
(f) Authority To Provide Other Flood Coverage.--
(1) In general.--The Administrator may not, as a
condition of participating in the Write Your Own
Program (as such term is defined in section 1370(a)) or
in otherwise participating in the utilization by the
Administrator of the facilities and services of
insurance companies, insurers, insurance agents and
brokers, and insurance adjustment organizations
pursuant to the authority in this section, nor as a
condition of eligibility to engage in any other
activities under the National Flood Insurance Program
under this title, restrict any such company, insurer,
agent, broker, or organization from offering and
selling private flood insurance (as such term is
defined in section 102(b)(9) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(b)(9))).
(2) Financial assistance/subsidy arrangement.--After
the date of the enactment of this subsection--
(A) the Administrator may not include in any
agreement entered into with any insurer for
participation in the Write Your Own Program any
provision establishing a condition prohibited
by paragraph (1), including the provisions of
Article XIII of the Federal Emergency
Management Agency, Federal Insurance
Administration, Financial Assistance/Subsidy
Arrangement, as adopted pursuant to section
62.23(a) of title 44 of the Code of Federal
Regulations; and
(B) any such provision in any such agreement
entered into before such date of enactment
shall not have any force or effect, and the
Administrator may not take any action to
enforce such provision.
(g) Write Your Own Allowance and Program Savings.--
(1) Allowance rate.--
(A) Limitation.--The allowance paid to
companies participating in the Write Your Own
Program (as such term is defined in section
1370 (42 U.S.C. 4004)) with respect to a policy
for flood insurance coverage made available
under this title shall not be greater than 27.9
percent of the chargeable premium for such
coverage.
(B) Inapplicability.--Subparagraph (A) shall
not apply to actual and necessary costs related
to section 1312(a) (42 U.S.C, 4019(a)), or to
payments deemed necessary by the Administrator.
(C) Implementation.--The limitation in
subparagraph (A) shall be imposed by equal
reductions over the 3-year period beginning on
the date of the enactment of this subsection.
(2) Program savings.--
(A) Implementation.--The Administrator,
within three years of the date of the enactment
of this Act, shall reduce the costs and
unnecessary burdens for the companies
participating in the Write Your Own program by
at least half of the amount by which the
limitation under paragraph (1)(A) reduced costs
compared to the costs as of the date of the
enactment of this subsection.
(B) Consideration of savings.--In meeting the
requirement of subparagraph (A), the
Administrator shall consider savings
including--
(i) indirect payments by the
Administrator of premium;
(ii) eliminating unnecessary
communications requirements;
(iii) reducing the frequency of
National Flood Insurance Program
changes;
(iv) simplifying the flood rating
system; and
(v) other ways of streamlining the
Program to reduce costs while
maintaining customer service and
distribution.
* * * * * * *
SEC. 1349. PUBLIC AVAILABILITY OF PROGRAM INFORMATION.
(a) Flood Risk Information.--
(1) In general.--Except as provided in paragraph (2),
to facilitate the National Flood Insurance Program
becoming a source of information and data for research
and development of technology that better understands
flooding, the risk of flooding, and the predictability
of perils of flooding, the Administrator shall make
publicly available all data, models, assessments,
analytical tools, and other information in the
possession of the Administrator relating to the
National Flood Insurance Program under this title that
is used in assessing flood risk or identifying and
establishing flood elevations and premiums, including--
(A) data relating to risk on individual
properties and loss ratio information and other
information identifying losses under the
program;
(B) current and historical policy
information, limited to the amount and term
only, for properties currently covered by flood
insurance and for properties that are no longer
covered by flood insurance;
(C) current and historical claims
information, limited to the date and amount
paid only, for properties currently covered by
flood insurance and for properties that are no
longer covered by flood insurance;
(D) identification of whether a property was
constructed before or after the effective date
of the first flood insurance rate map for a
community;
(E) identification of properties that have
been mitigated through elevation, a buyout, or
any other mitigation action; and
(F) identification of unmitigated multiple-
loss properties.
(2) Open source data system.--In carrying out
paragraph (1), the Administrator shall establish an
open source data system by which all information
required to be made publicly available by such
subsection may be accessed by the public on an
immediate basis by electronic means.
(b) Community Information.--Not later than the expiration of
the 12-month period beginning upon the date of the enactment of
this section, the Administrator shall establish and maintain a
publicly searchable database that provides information about
each community participating in the National Flood Insurance
Program, which shall include the following information:
(1) The status of the community's compliance with the
National Flood Insurance Program, including any
findings of noncompliance, the status of any
enforcement actions initiated by a State or by the
Administrator, and the number of days of any such
continuing noncompliance.
(2) The number of properties located in the
community's special flood hazard areas that were built
before the effective date of the first flood insurance
rate map for the community.
(3) The number of properties located in the
community's special flood hazard areas that were built
after the effective date of the first flood insurance
rate map for the community.
(4) The total number of current and historical claims
located outside the community's special flood hazard
areas.
(5) The total number of multiple-loss properties in
the community.
(6) The portion of the community, stated as a
percentage and in terms of square miles, that is
located within special flood hazard areas.
(c) Identification of Properties.--The information provided
pursuant to subsections (a) and (b) shall be based on data that
identifies properties at the zip code or census block level,
and shall include the name of the community and State in which
a property is located.
(d) Protection of Personally Identifiable Information.--The
information provided pursuant to subsections (a) and (b) shall
be disclosed in a format that does not reveal individually
identifiable information about property owners in accordance
with the section 552a of title 5, United States Code.
(e) Definition of Loss Ratio.--For purposes of this section,
the term ``loss ratio'' means, with respect to the National
Flood Insurance Program, the ratio of the amount of claims paid
under the Program to the amount of premiums paid under the
Program.
SEC. 1350. FLOOD INSURANCE CLEARINGHOUSE.
(a) Establishment and Operations.--Not later than January 1,
2021, the Administrator shall establish and commence operations
of a Flood Insurance Clearinghouse (in this section referred to
as the ``Clearinghouse)'' in accordance with the report, plan,
and guidelines required under section 506(b)(2) of the 21st
Century Flood Reform Act.
(b) Purpose.--The Clearinghouse shall be established for the
purpose of receiving applications from prospective insureds for
flood insurance coverage for properties for which such coverage
is prohibited under section 1305(f) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4012(f)) and for providing to
such applicants offers for such coverage from insurers
providing private flood insurance (as such term is defined for
purposes of section 102(c) of the Flood Disaster Protection Act
of 1973 (42 U.S.C. 4012a(c)) and, subject to the limitations in
this section, for coverage made available under the National
Flood Insurance Program.
(c) Functions.--The Clearinghouse shall have as its
functions--
(1) to provide for prospective insureds to submit to
the Clearinghouse applications for flood insurance
coverage for properties described in subsection (b);
(2) to determine, with respect to a property
identified in an application, the chargeable premium
rate for coverage made available under this title;
(3) with respect to a property identified in an
application, to solicit offers of coverage under
private flood insurance from providers of such
insurance during a reasonable period of time after such
application, which offers shall provide terms and
conditions of insurance, including deductibles and
exclusions, that are sufficient to meet the
requirements of section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a); and
(4) to provide to the applicant for insurance--
(A) any bona fide offers for private
insurance coverage made pursuant to paragraph
(3) for the property identified in the
application;
(B) in the case only of a property for which
such coverage is authorized pursuant to
subsection (g) of section 1305, a bona fide
offer for flood insurance coverage made
available under this title for the property;
and
(C) information to help the applicant for
insurance understand such offers and the
limitation under section 1305(g);
(d) Management and Operation.--The Clearinghouse shall be
managed and operated by a third party pursuant to a contract
with the Administrator.
(e) Agreements.--The Administrator may enter into such
agreements with insurers providing private flood insurance
coverage as may be necessary for the Clearinghouse to carry out
its functions.
(f) Fees.--The Clearinghouse may charge a fee to applicants
to cover administrative costs of the Clearinghouse.
(g) Reports.--The Clearinghouse shall report periodically, as
determined by the Administrator, to the Administrator regarding
the operations and activities of the Clearinghouse.
SEC. 1351. RULES OF CONSTRUCTION.
(a) Definition.--For purposes of this part, the term
``knowingly'' means having actual knowledge of or acting with
deliberate ignorance of or reckless disregard for the
prohibitions under this part.
(b) Administrative Remedy.--A policyholder of a policy for
flood insurance coverage made available under this title must
exhaust all administrative remedies, including submission of
disputed claims to appeal under any appeal process made
available by the Administrator, prior to commencing legal
action on any disputed claim under such a policy.
CHAPTER III--COORDINATION OF FLOOD INSURANCE WITH LAND-MANAGEMENT
PROGRAMS IN FLOOD-PRONE AREAS
identification of flood-prone areas
Sec. 1360. (a) The Administrator is authorized to consult
with, receive information 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 he may--
(1) identify and publish information with respect to
all flood 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 or update flood-risk zone data in all
such areas, and make estimates with respect to the
rates of probable flood caused loss for the various
flood risk zones for each of these areas until the date
specified in section 1319.
(b) The Administrator is directed to accelerate the
identification of risk zones within flood-prone and mudslide-
prone areas, as provided by subsection (a)(2) of this section,
in order to make known the degree of hazard within each such
zone at the earliest possible date. To accomplish this
objective, the Administrator is authorized, without regard to
subsections (a) and (b) of section 3324 of title 31, United
States Code, and section 3709 of the Revised Statutes (41
U.S.C. 5), to make grants, provide technical assistance, and
enter into contracts, cooperative agreements, or other
transactions, on such terms as he may deem appropriate, or
consent to modifications thereof, and to make advance or
progress payments in connection therewith.
(c) The Secretary of Defense (through the Army Corps of
Engineers), the Secretary of the Interior (through the United
States Geological Survey), the Secretary of Agriculture
(through the Soil Conservation Service), the Secretary of
Commerce (through the National Oceanic and Atmospheric
Administration), the head of the Tennessee Valley Authority,
and the heads of all other Federal agencies engaged in the
identification or delineation of flood-risk zones within the
several States shall, in consultation with the Administrator,
give the highest practicable priority in the allocation of
available manpower and other available resources to the
identification and mapping of flood hazard areas and flood-risk
zones, in order to assist the Administrator to meet the
deadline established by this section.
(d) The Administrator shall, not later than September 30,
1984, submit to the Congress a plan for bringing all
communities containing flood-risk zones into full program
status by September 30, 1987.
(e) Review of Flood Maps.--Once during each 5-year period
(the 1st such period beginning on the date of enactment of the
Riegle Community Development and Regulatory Improvement Act of
1994) or more often as the Administrator determines necessary,
the Administrator shall assess the need to revise and update
all floodplain areas and flood risk zones identified,
delineated, or established under this section, based on an
analysis of all natural hazards affecting flood risks.
(f) Updating Flood Maps.--The Administrator shall revise and
update any floodplain areas and flood-risk zones--
(1) upon the determination of the Administrator,
according to the assessment under subsection (e), that
revision and updating are necessary for the areas and
zones; or
(2) upon the request from any State or local
government stating that specific floodplain areas or
flood-risk zones in the State or locality need revision
or updating, if sufficient technical data justifying
the request is submitted and the unit of government
making the request agrees to provide funds in an amount
determined by the Administrator.
(g) Availability of Flood Maps.--To promote compliance with
the requirements of this title, the Administrator shall make
flood insurance rate maps and related information available
free of charge to the Federal entities for lending regulation,
Federal agency lenders, State agencies directly responsible for
coordinating the national flood insurance program, and
appropriate representatives of communities participating in the
national flood insurance program, and at a reasonable cost to
all other persons. Any receipts resulting from this subsection
shall be deposited in the National Flood Insurance Fund,
pursuant to section 1310(b)(6).
(h) Notification of Flood Map Changes.--The Administrator
shall cause notice to be published in the Federal Register (or
shall provide notice by another comparable method) of any
change to flood insurance map panels and any change to flood
insurance map panels issued in the form of a letter of map
amendment or a letter of map revision. Such notice shall be
published or otherwise provided not later than 30 days after
the map change or revision becomes effective. Notice by any
method other than publication in the Federal Register shall
include all pertinent information, provide for regular and
frequent distribution, and be at least as accessible to map
users as notice in the Federal Register. All notices under this
subsection shall include information on how to obtain copies of
the changes or revisions.
(i) Compendia of Flood Map Changes.--Every 6 months, the
Administrator shall publish separately in their entirety within
a compendium, all changes and revisions to flood insurance map
panels and all letters of map amendment and letters of map
revision for which notice was published in the Federal Register
or otherwise provided during the preceding 6 months. The
Administrator shall make such compendia available, free of
charge, to Federal entities for lending regulation, Federal
agency lenders, and States and communities participating in the
national flood insurance program pursuant to section 1310 and
at cost to all other parties. Any receipts resulting from this
subsection shall be deposited in the National Flood Insurance
Fund, pursuant to section 1310(b)(6).
(j) Provision of Information.--In the implementation of
revisions to and updates of flood insurance rate maps, the
Administrator shall share information, to the extent
appropriate, with the Under Secretary of Commerce for Oceans
and Atmosphere and representatives from State coastal zone
management programs.
(k) Appeals of Existing Maps.--
(1) Right to appeal.--Subject to paragraph (6), a
State or local government, or the owner or lessee of
real property, who has made a formal request to the
Administrator to update a flood map that the
Administrator has denied may at any time appeal such a
denial as provided in this subsection.
(2) Basis for appeal.--The basis for appeal under
this subsection shall be the possession of knowledge or
information that--
(A) the base flood elevation level or
designation of any aspect of a flood map is
scientifically or technically inaccurate; or
(B) factors exist that mitigate the risk of
flooding, including ditches, banks, walls,
vegetation, levees, lakes, dams, reservoirs,
basin, retention ponds, and other natural or
manmade topographical features.
(3) Appeals process.--
(A) Administrative adjudication.--An appeal
under this subsection shall be determined by a
final adjudication on the record, and after
opportunity for an administrative hearing.
(B) Rights upon adverse decision.--If an
appeal pursuant to subparagraph (A) does not
result in a decision in favor of the State,
local government, owner, or lessee, such party
may appeal the adverse decision to the
Scientific Resolution Panel provided for in
section 1363A, which shall recommend a non-
binding decision to the Administrator.
(4) Relief.--
(A) Wholly successful appeals.--In the case
of a successful appeal resulting in a
policyholder's property being removed from a
special flood hazard area, such policyholder
may cancel the policy at any time within the
current policy year, and the Administrator
shall provide such policyholder a refund in the
amount of any premiums paid for such policy
year, plus any premiums paid for flood
insurance coverage that the policyholder was
required to purchase or maintain during the 2-
year period preceding such policy year.
(B) Partially successful appeals.--In the
case of any appeal in which mitigating factors
were determined to have reduced, but not
eliminated, the risk of flooding, the
Administrator shall reduce the amount of flood
insurance coverage required to be maintained
for the property concerned by the ratio of the
successful portion of the appeal as compared to
the entire appeal. The Administrator shall
refund to the policyholder any payments made in
excess of the amount necessary for such new
coverage amount, effective from the time when
the mitigating factor was created or the
beginning of the second policy year preceding
the determination of the appeal, whichever
occurred later.
(C) Additional relief.--The Administrator may
provide additional refunds in excess of the
amounts specified in subparagraphs (A) and (B)
if the Administrator determines that such
additional amounts are warranted.
(5) Recovery of costs.--When, incident to any appeal
which is successful in whole or part regarding the
designation of the base flood elevation or any aspect
of the flood map, including elevation or designation of
a special flood hazard area, the community, or the
owner or lessee of real property, as the case may be,
incurs expense in connection with the appeal, including
services provided by surveyors, engineers, and
scientific experts, the Administrator shall reimburse
such individual or community for reasonable expenses to
an extent measured by the ratio of the successful
portion of the appeal as compared to the entire appeal,
but not including legal services, in the effecting of
an appeal based on a scientific or technical error on
the part of the Federal Emergency Management Agency. No
reimbursement shall be made by the Administrator in
respect to any fee or expense payment, the payment of
which was agreed to be contingent upon the result of
the appeal. The Administrator may use such amounts from
the National Flood Insurance Fund established under
section 1310 as may be necessary to carry out this
paragraph.
(6) Inapplicability to community flood maps.--This
subsection shall not apply with respect to any flood
map that is in effect pursuant to certification under
the standards, guidelines, and procedures established
pursuant to section 100215(m)(1)(B) of the Biggert-
Waters Flood Insurance Reform Act of 2012 (42 U.S.C.
4101a(m)(1)(B)).
(7) Guidance.--The Administrator shall issue guidance
to implement this subsection, which shall not be
subject to the notice and comment requirements under
section 553 of title 5, United States Code.
* * * * * * *
appeals
Sec. 1363. (a) In establishing projected flood elevations and
designating areas having special flood hazards for land use
purposes with respect to any community pursuant to section
1361, the Administrator shall first propose such determinations
and designations by publication for comment [in the Federal
Register], by direct notification to the chief executive
officer of the community, and by publication in a prominent
local newspaper.
(b) The Administrator shall publish notification of flood
elevation determinations and designations of areas having
special flood hazards in a prominent local newspaper at least
twice during the ten-day period following notification to the
local government. [During the ninety-day period following the
second publication, any owner or lessee of real property within
the community who believes his property rights to be adversely
affected by the Administrator's proposed determination may
appeal such determination to the local government.] Any owner
or lessee of real property within the community who believes
the owner's or lessee's rights to be adversely affected by the
Administrator's proposed determination may appeal such
determination to the local government no later than 90 days
after the date of the second publication. The sole grounds for
appeal shall be the possession of knowledge or information
indicating that (1) the elevations being proposed by the
Administrator with respect to an identified area having special
flood hazards are scientifically or technically incorrect, or
(2) the designation of an identified special flood hazard area
is scientifically or technically incorrect.
(c) Appeals by private persons shall be made to the chief
executive officer of the community, or to such agency as he
shall publicly designate, and shall set forth the data that
tend to negate or contradict the Administrator's finding in
such form as the chief executive officer may specify. The
community shall review and consolidate all such appeals and
issue a written opinion stating whether the evidence presented
is sufficient to justify an appeal on behalf of such persions
by the community in its own name. Whether or not the community
decides to appeal the Administrator's determination, copies of
individual appeals shall be sent to the Administrator as they
are received by the community, and the community's appeal or a
copy of its decision not to appeal shall be filed with the
Administrator not later than ninety days after the date of the
second newspaper publication of the Administrator's
notification.
(d) In the event the Administrator does not receive an appeal
from the community within the ninety days provided he shall
consolidate and review on their own merits, in accordance with
the procedures set forth in [subsection (e)] subsection (f) ,
the appeals filed within the community by private persons and
shall make such modifications of his proposed determinations as
may be appropriate, taking into account the written opinion, if
any, issued by the community in not supporting such appeals.
The Administrator's decision shall be in written form, and
copies thereof shall be sent both to the chief executive
officer of the community and to each individual appellant.
(e) Determination by Administrator in the Absence of
Appeals.--If the Administrator has not received any appeals,
upon expiration of the 90-day appeal period established under
subsection (b) of this section the Administrator's proposed
determination shall become final. The community shall be given
a reasonable time after the Administrator's final determination
in which to adopt local land use and control measures
consistent with the Administrator's determination.
[(e)] (f) Upon appeal by any community, as provided by this
section, the Administrator shall review and take fully into
account any technical or scientific data submitted by the
community that tend to negate or contradict the information
upon which his proposed determination is based. The
Administrator shall resolve such appeal by consultation with
officials of the local government involved, by administrative
hearing, or by submission of the conflicting data to the
Scientific Resolution Panel provided for in section 1363A.
Until the conflict in data is resolved, and the Administrator
makes a final determination on the basis of his findings in the
Federal Register, and so notifies the governing body of the
community, flood insurance previously available within the
community shall continue to be available, and no person shall
be denied the right to purchase such insurance at chargeable
rates. The Administrator shall make his determination within a
reasonable time. The community shall be given a reasonable time
after the Administrator's final determination in which to adopt
local land use and control measures consistent with the
Administrator's determination. The reports and other
information used by the Administrator in making his final
determination shall be made available for public inspection and
shall be admissible in a court of law in the event the
community seeks judicial review as provided by this section.
[(f)] (g) Reimbursement of Certain Expenses.--When, incident
to any appeal under subsection (b) or (c) of this section, the
owner or lessee of real property or the community, as the case
may be, or, in the case of an appeal that is resolved by
submission of conflicting data to the Scientific Resolution
Panel provided for in section 1363A, the community, incurs
expense in connection with the services of surveyors,
engineers, or similar services, but not including legal
services, in the effecting of an appeal based on a scientific
or technical error on the part of the Federal Emergency
Management Agency, which is successful in whole or part, the
Administrator shall reimburse such individual or community to
an extent measured by the ratio of the successful portion of
the appeal as compared to the entire appeal and applying such
ratio to the reasonable value of all such services, but no
reimbursement shall be made by the Administrator in respect to
any fee or expense payment, the payment of which was agreed to
be contingent upon the result of the appeal. The Administrator
may use such amounts from the National Flood Insurance Fund
established under section 1310 as may be necessary to carry out
this subsection. The Administrator shall promulgate regulations
to carry out this subsection.
[(g)] (h) Except as provided in section 1363A, any appellant
aggrieved by any final determination of the Administrator upon
administrative appeal, as provided by this section, may appeal
such determination to the United States district court for the
district within which the community is located not more than
sixty days after receipt of notice of such determination. The
scope of review by the court shall be as provided by chapter 7
of title 5, United States Code. During the pendency of any such
litigation, all final determinations of the Administrator shall
be effective for the purposes of this title unless stayed by
the court for good cause shown.
(i) Inapplicability to Community Flood Maps.--This section
shall not apply with respect to any flood map that is in effect
pursuant to certification under the standards, guidelines, and
procedures established pursuant to section 100215(m)(1) of the
Biggert-Waters Flood Insurance Reform Act of 2012 (42 U.S.C.
4101a(m)(1)), which shall include procedures for providing
notification and appeal rights to individuals within the
communities of the proposed flood elevation determinations.
* * * * * * *
mitigation assistance
Sec. 1366. (a) Authority.--The Administrator shall carry out
a program to provide financial assistance to States and
communities, using amounts made available from the National
Flood Mitigation Fund under section 1367, for planning and
carrying out activities designed to reduce the risk of flood
damage to structures covered under contracts for flood
insurance under this title. Priority under the program shall be
given to providing assistance with respect to multiple-loss
properties. Such financial assistance shall be made available--
(1) to States and communities in the form of grants
under this section for carrying out mitigation
activities; and
[(2) to States and communities in the form of grants
under this section for carrying out mitigation
activities that reduce flood damage to severe
repetitive loss structures; and
[(3) to property owners in the form of direct grants
under this section for carrying out mitigation
activities that reduce flood damage to individual
structures for which 2 or more claim payments for
losses have been made under flood insurance coverage
under this title if the Administrator, after
consultation with the State and community, determines
that neither the State nor community in which such a
structure is located has the capacity to manage such
grants.]
(2) to property owners, in coordination with the
State and community, in the form of direct grants under
this section for carrying out mitigation activities
that reduce flood damage to extreme repetitive-loss
properties.
The Administrator shall take such actions as may be necessary
to ensure that grants under this subsection are provided in a
manner that is consistent with the delivery of coverage for
increased cost of compliance provided under section 1304(b).
(b) Eligibility for Mitigation Assistance.--To be eligible to
receive financial assistance under this section for mitigation
activities, a State or community shall develop, and have
approved by the Administrator, a flood risk mitigation plan (in
this section referred to as a ``mitigation plan''), that
describes the mitigation activities to be carried out with
assistance provided under this section, is consistent with the
criteria established by the Administrator under section 1361,
provides for reduction of flood losses to structures for which
contracts for flood insurance are available under this title,
and may be included in a multihazard mitigation plan. The
mitigation plan shall be consistent with a comprehensive
strategy for mitigation activities for the area affected by the
mitigation plan, that has been adopted by the State or
community following a public hearing.
(c) Eligible Mitigation Activities.--
(1) Requirement of Consistency With Approved
Mitigation Plan.--Amounts provided under this section
may be used only for mitigation activities that are
consistent with mitigation plans that are approved by
the Administrator and identified under paragraph (4).
The Administrator shall provide assistance under this
section to the extent amounts are available in the
National Flood Mitigation Fund pursuant to
appropriation Acts, subject only to the absence of
approvable mitigation plans.
(2) Requirements of technical feasibility, cost
effectiveness, and interest of national flood insurance
fund.--
(A) In general.--The Administrator may
approve only mitigation activities that the
Administrator determines--
(i) are technically feasible and
cost-effective; or
(ii) will eliminate future payments
from the National Flood Insurance Fund
for [severe repetitive loss structures]
multiple-loss properties through an
acquisition or relocation activity.
(B) Considerations.--In making a
determination under subparagraph (A), the
Administrator shall take into consideration
recognized ancillary benefits.
(3) Eligible activities.--Eligible activities under a
mitigation plan may include--
(A) demolition or relocation of any structure
located on land that is along the shore of a
lake or other body of water and is certified by
an appropriate State or local land use
authority to be subject to imminent collapse or
subsidence as a result of erosion or flooding;
(B) elevation, relocation, demolition, or
floodproofing of structures (including public
structures) located in areas having special
flood hazards or other areas of flood risk;
(C) acquisition by States and communities of
properties (including public properties)
located in areas having special flood hazards
or other areas of flood risk and properties
substantially damaged by flood, for public use,
as the Administrator determines is consistent
with sound land management and use in such
area;
(D) elevation, relocation, or floodproofing
of utilities (including equipment that serves
structures);
(E) minor physical mitigation efforts that do
not duplicate the flood prevention activities
of other Federal agencies and that lessen the
frequency or severity of flooding and decrease
predicted flood damages, which shall not
include major flood control projects such as
dikes, levees, seawalls, groins, and jetties
unless the Administrator specifically
determines in approving a mitigation plan that
such activities are the most cost-effective
mitigation activities for the National Flood
Mitigation Fund;
(F) the development or update of mitigation
plans by a State or community which meet the
planning criteria established by the
Administrator, except that the amount from
grants under this section that may be used
under this subparagraph may not exceed $50,000
for any mitigation plan of a State or $25,000
for any mitigation plan of a community;
(G) the provision of technical assistance by
States to communities and individuals to
conduct eligible mitigation activities;
(H) other activities that the Administrator
considers appropriate and specifies in
regulation;
(I) other mitigation activities not described
in subparagraphs (A) through (G) or the
regulations issued under subparagraph (H), that
are described in the mitigation plan of a State
or community; and
(J) without regard to the requirements under
paragraphs (1) and (2) of subsection (d), and
if the State applied for and was awarded at
least $1,000,000 in grants available under this
section in the prior fiscal year, technical
assistance to communities to identify eligible
activities, to develop grant applications, and
to implement grants awarded under this section,
not to exceed $50,000 to any 1 State in any
fiscal year.
(4) Eligibility of demolition and rebuilding of
properties.--The Administrator shall consider as an
eligible activity the demolition and rebuilding of
properties to at least base flood elevation or greater,
if required by the Administrator or if required by any
State regulation or local ordinance, and in accordance
with criteria established by the Administrator.
(d) Matching Requirement.--The Administrator may provide
grants for eligible mitigation activities as follows:
(1) [Severe repetitive loss structures] Extreme
repetitive-loss properties.--In the case of mitigation
activities to [severe repetitive loss structures]
extreme repetitive-loss properties , in an amount up
to--
(A) 100 percent of all eligible costs, if the
activities are approved under subsection
(c)(2)(A)(i); or
(A) the expected savings to the National
Flood Insurance Fund from expected avoided
damages through acquisition or relocation
activities, if the activities are approved
under subsection (c)(2)(A)(ii).
(2) [Repetitive loss structures] Severe repetitive-
loss properties.--In the case of mitigation activities
to [repetitive loss structures] severe repetitive-loss
properties , in an amount up to [90 percent] 100
percent of all eligible costs.
(3) Repetitive-loss property.--In the case of
mitigation activities to repetitive-loss properties, in
an amount up to 100 percent of all eligible costs.
[(3)] (4) Other mitigation activities.--In the case
of all other mitigation activities, in an amount up to
75 percent of all eligible costs
(e) Recapture.--
(1) Noncompliance With Plan.--If the Administrator determines
that a State or community that has received mitigation
assistance under this section has not carried out the
mitigation activities as set forth in the mitigation plan, the
Administrator shall recapture any unexpended amounts and
deposit the amounts in the National Flood Mitigation Fund under
section 1367.
(2) Failure to provide matching funds.--If the
Administrator determines that a State or community that
has received mitigation assistance under this section
has not provided matching funds in the amount required
under subsection (d), the Administrator shall recapture
any unexpended amounts of mitigation assistance
exceeding the amount of such matching funds actually
provided and deposit the amounts in the National Flood
Mitigation Fund under section 1367.
(f) Reports.--Not later than 1 year after the date of
enactment of the Biggert-Waters Flood Insurance Reform Act of
2012 and biennially thereafter, the Administrator shall submit
a report to the Congress describing the status of mitigation
activities carried out with assistance provided under this
section.
(g) Failure To Make Grant Award Within 5 Years.--For any
application for a grant under this section for which the
Administrator fails to make a grant award within 5 years of the
date of the application, the grant application shall be
considered to be denied and any funding amounts allocated for
such grant applications shall remain in the National Flood
Mitigation Fund under section 1367 of this title and shall be
made available for grants under this section.
(h) Alignment With Increased Cost of Compliance.--
Notwithstanding any provision of law, any funds appropriated
for assistance under this title may be transferred to the
National Flood Insurance Fund established under section 1310
(42 U.S.C. 4017) for the payment of claims to enable the
Administrator to deliver grants under subsection (a)(2) of this
section to align with the delivery of coverage for increased
cost of compliance for extreme repetitive-loss properties.
(i) Funding.--
(1) Authorization of appropriations.--Notwithstanding
any other provision of law, assistance provided under
this section shall be funded by--
(A) $225,000,000 in each fiscal year, subject
to offsetting collections, through risk premium
rates for flood insurance coverage under this
title, and shall be available subject to
section 1310(f);
(B) any penalties collected under section
102(f) the Flood Disaster Protect Act of 1973
(42 U.S.C. 4012a(f); and
(C) any amounts recaptured under subsection
(e) of this section.
The Administrator may not use more than 5 percent of
amounts made available under this subsection to cover
salaries, expenses, and other administrative costs
incurred by the Administrator to make grants and
provide assistance under this section.
(2) Availability.--Amounts appropriated pursuant to
this subsection for any fiscal year may remain
available for obligation until expended.
[(h) Definitions.--For purposes of this section, the
following definitions shall apply:]
[(1) Community.--The] (j) Definition of Community._For
purposes of this section, the term ``community'' means--
[(A)] (1) a political subdivision that--
[(i)] (A) has zoning and building code
jurisdiction over a particular area having
special flood hazards; and
[(ii)] (B) is participating in the national
flood insurance program; or
[(B)] (2) a political subdivision of a State, or
other authority, that is designated by political
subdivisions, all of which meet the requirements of
[subparagraph (A)] paragraph (1) , to administer grants
for mitigation activities for such political
subdivisions.
[(2) Repetitive loss structure.--The term
``repetitive loss structure'' has the meaning given
such term in section 1370.
[(3) Severe repetitive loss structure.--The term
``severe repetitive loss structure'' means a structure
that--
[(A) is covered under a contract for flood
insurance made available under this title; and
[(B) has incurred flood-related damage--
[(i) for which 4 or more separate
claims payments have been made under
flood insurance coverage under this
title, with the amount of each such
claim exceeding $5,000, and with the
cumulative amount of such claims
payments exceeding $20,000; or
[(ii) for which at least 2 separate
claims payments have been made under
such coverage, with the cumulative
amount of such claims exceeding the
value of the insured structure.]
[national flood mitigation fund
[Sec. 1367. (a) Establishment and Availability.--The
Administrator shall establish in the Treasury of the United
States a fund to be known as the National Flood Mitigation
Fund, which shall be credited with amounts described in
subsection (b) and shall be available, to the extent provided
in appropriation Acts, for providing assistance under section
1366.
[(b) Credits.--The National Flood Mitigation Fund shall be
credited with--
[(1) in each fiscal year, amounts from the National
Flood Insurance Fund not to exceed $90,000,000 and to
remain available until expended, of which--
[(A) not more than $40,000,000 shall be
available pursuant to subsection (a) of this
section for assistance described in section
1366(a)(1);
[(B) not more than $40,000,000 shall be
available pursuant to subsection (a) of this
section for assistance described in section
1366(a)(2); and
[(C) not more than $10,000,000 shall be
available pursuant to subsection (a) of this
section for assistance described in section
1366(a)(3);
[(2) any penalties collected under section 102(f) of
the Flood Disaster Protection Act of 1973; and
[(3) any amounts recaptured under section 1366(e).
[(c) Administrative Expenses.--The Administrator may use not
more than 5 percent of amounts made available under subsection
(b) to cover salaries, expenses, and other administrative costs
incurred by the Administrator to make grants and provide
assistance under section 1366.
[(d) Prohibition on Offsetting Collections.--Notwithstanding
any other provision of this title, amounts made available
pursuant to this section shall not be subject to offsetting
collections through premium rates for flood insurance coverage
under this title.
[(e) Continued Availability and Reallocation.--Any amounts
made available pursuant to subparagraph (A), (B), or (C) of
subsection (b)(1) that are not used in any fiscal year shall
continue to be available for the purposes specified in the
subparagraph of subsection (b)(1) pursuant to which such
amounts were made available, unless the Administrator
determines that reallocation of such unused amounts to meet
demonstrated need for other mitigation activities under section
1366 is in the best interest of the National Flood Insurance
Fund.
[(f) Investment.--If the Administrator determines that the
amounts in the National Flood Mitigation Fund are in excess of
amounts needed under subsection (a), the Administrator may
invest any excess amounts the Administrator determines
advisable in interest-bearing obligations issued or guaranteed
by the United States.
[(g) Report.--The Administrator shall submit a report to the
Congress not later than the expiration of the 1-year period
beginning on the date of enactment of this Act and not less
than once during each successive 2-year period thereafter. The
report shall describe the status of the Fund and any activities
carried out with amounts from the Fund.]
CHAPTER IV--APPROPRIATIONS AND MISCELLANEOUS PROVISIONS
definitions
Sec. 1370. (a) As used in this title--
(1) the term ``flood'' shall have such meaning as may
be prescribed in regulations of the Administrator, 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
organization or person that is authorized to engage in
the business of insurance under the laws of any State,
subject to the reporting requirements of the Securities
Exchange Act of 1934 pursuant to section 13(a) or 15(d)
of such Act (15 U.S.C. 78m(a) and 78o(d)), or
authorized by the Administrator to assume reinsurance
on risks insured by the flood insurance program;
(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;
(6) the term ``Administrator'' means the
Administrator of the Federal Emergency Management
Agency;
[(7) the term ``repetitive loss structure'' means a
structure covered by a contract for flood insurance
that--
[(A) has incurred flood-related damage on 2
occasions, in which the cost of repair, on the
average, equaled or exceeded 25 percent of the
value of the structure at the time of each such
flood event; and
[(B) at the time of the second incidence of
flood-related damage, the contract for flood
insurance contains increased cost of compliance
coverage.]
[(8)] (7) the term ``Federal agency lender'' means a
Federal agency that makes direct loans secured by
improved real estate or a mobile home, to the extent
such agency acts in such capacity;
[(9)] (8) the term ``Federal entity for lending
regulation'' means the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the
National Credit Union Administration, and the Farm
Credit Administration, and with respect to a particular
regulated lending institution means the entity
primarily responsible for the supervision of the
institution;
[(10)] (9) the term ``improved real estate'' means
real estate upon which a building is located;
[(11)] (10) the term ``lender'' means a regulated
lending institution or Federal agency lender;
[(12)] (11) the term ``natural and beneficial
floodplain functions'' means--
(A) the functions associated with the natural
or relatively undisturbed floodplain that (i)
moderate flooding, retain flood waters, reduce
erosion and sedimentation, and mitigate the
effect of waves and storm surge from storms,
and (ii) reduce flood related damage; and
(B) ancillary beneficial functions, including
maintenance of water quality and recharge of
ground water, that reduce flood related damage;
[(13)] (12) the term ``regulated lending
institution'' means any bank, savings and loan
association, credit union, farm credit bank, Federal
land bank association, production credit association,
or similar institution subject to the supervision of a
Federal entity for lending regulation;
[(14)] (13) the term ``servicer'' means the person
responsible for receiving any scheduled periodic
payments from a borrower pursuant to the terms of a
loan, including amounts for taxes, insurance premiums,
and other charges with respect to the property securing
the loan, and making the payments of principal and
interest and such other payments with respect to the
amounts received from the borrower as may be required
pursuant to the terms of the loan; and
[(15)] (14) the term ``substantially damaged
structure'' means a structure covered by a contract for
flood insurance that has incurred damage for which the
cost of repair exceeds an amount specified in any
regulation promulgated by the Administrator, or by a
community ordinance, whichever is lower.
(b) The term ``flood'' shall also include inundation from
mudslides which are proximately caused by accumulations of
water on or under the ground; and all of the provisions of this
title shall apply with respect to such mudslides in the same
manner and to the same extent as with respect to floods
described in subsection (a)(1), subject to and in accordance
with such regulations, modifying the provisions of this title
(including the provisions relating to land management and use)
to the extent necessary to insure that they can be effectively
so applied, as the Administrator may prescribe to achieve (with
respect to such mudslides) the purposes of this title and the
objectives of the program.
(c) The term ``flood'' shall also include the collapse or
subsidence of land along the shore of a lake or other body of
water as a result of erosion or undermining caused by waves or
currents of water exceeding anticipated cyclical levels, and
all of the provisions of this title shall apply with respect to
such collapse or subsidence in the same manner and to the same
extent as with respect to floods described in subsection
(a)(1), subject to and in accordance with such regulations,
modifying the provisions of this title (including the
provisions relating to land management and use) to the extent
necessary to insure that they can be effectively so applied, as
the Administrator may prescribe to achieve (with respect to
such collapse or subsidence) the purposes of this title and the
objectives of the program.
(d) Multiple-Loss Properties.--
(1) Definitions.--As used in this title:
(A) Multiple-loss property.--The term
``multiple-loss property'' means any property
that is a repetitive-loss property, a severe
repetitive-loss property, or an extreme
repetitive-loss property.
(B) Repetitive-loss property.--The term
``repetitive-loss property'' means a structure
that has incurred flood damage for which two or
more separate claims payments of any amount
have been made under flood insurance coverage
under this title.
(C) Severe repetitive-loss property.--The
term ``severe repetitive-loss property'' means
a structure that has incurred flood damage for
which--
(i) 4 or more separate claims
payments have been made under flood
insurance coverage under this title,
with the amount of each such claim
exceeding $5,000, and with the
cumulative amount of such claims
payments exceeding $20,000; or
(ii) at least 2 separate claims
payments have been made under flood
insurance coverage under this title,
with the cumulative amount of such
claims payments exceeding the value of
the structure.
(D) Extreme repetitive-loss property.--The
term ``extreme repetitive-loss property'' means
a structure that has incurred flood damage for
which at least 2 separate claims have been made
under flood insurance coverage under this
title, with the cumulative amount of such
claims payments exceeding 150 percent of the
maximum coverage amount available for the
structure.
(2) Treatment of claims before compliance with state
and local requirements.--The Administrator shall not
consider claims that occurred before a structure was
made compliant with State and local floodplain
management requirements for purposes of determining a
structure's status as a multiple-loss property.
* * * * * * *
----------
FLOOD DISASTER PROTECTION ACT OF 1973
* * * * * * *
TITLE I--EXPANSION OF NATIONAL FLOOD INSURANCE PROGRAM
* * * * * * *
flood insurance purchase and compliance requirements and escrow
accounts
Sec. 102. (a) [After] Subject to subsection (i) of this
section, after the expiration of sixty days following the date
of enactment of this Act, no Federal officer or agency shall
approve any financial assistance for acquisition or
construction purposes for use in any area that has been
identified by the Administrator as an area having special flood
hazards and in which the sale of flood insurance has been made
available under the National Flood Insurance Act of 1968,
unless the building or mobile home and any personal property to
which such financial assistance relates is covered by flood
insurance in an amount at least equal to its development or
project cost (less estimated land cost) or to the maximum limit
of coverage made available with respect to the particular type
of property under the National Flood Insurance Act of 1968,
whichever is less: Provided, That if the financial assistance
provided is in the form of a loan or an insurance or guaranty
of a loan, the amount of flood insurance required need not
exceed the outstanding principal balance of the loan and need
not be required beyond the term of the loan. The requirement of
maintaining flood insurance shall apply during the life of the
property, regardless of transfer of ownership of such property.
(b) Requirement for Mortgage Loans.--
(1) Regulated lending institutions.-- [Each] Subject
to subsection (i) of this section, each Federal entity
for lending regulation (after consultation and
coordination with the Financial Institutions
Examination Council established under the Federal
Financial Institutions Examination Council Act of 1974)
shall by regulation direct regulated lending
institutions--
(A) not to make, increase, extend, or renew
any loan secured by improved real estate or a
mobile home located or to be located in an area
that has been identified by the Administrator
as an area having special flood hazards and in
which flood insurance has been made available
under the National Flood Insurance Act of 1968,
unless the building or mobile home and any
personal property securing such loan is covered
for the term of the loan by flood insurance in
an amount at least equal to the outstanding
principal balance of the loan or the maximum
limit of coverage made available under the Act
with respect to the particular type of
property, whichever is less; and
(B) to accept private flood insurance as
satisfaction of the flood insurance coverage
requirement under subparagraph (A) if the
coverage provided by such private flood
insurance meets the requirements for coverage
under such subparagraph.
(2) Federal agency lenders.--A Federal agency lender
may not make, increase, extend, or renew any loan
secured by improved real estate or a mobile home
located or to be located in an area that has been
identified by the Administrator as an area having
special flood hazards and in which flood insurance has
been made available under the National Flood Insurance
Act of 1968, unless the building or mobile home and any
personal property securing such loan is covered for the
term of the loan by flood insurance in the amount
provided in paragraph (1)(A). [Each] Subject to
subsection (i) of this section, A Federal agency lender
shall accept private flood insurance as satisfaction of
the flood insurance coverage requirement under the
preceding sentence if the flood insurance coverage
provided by such private flood insurance meets the
requirements for coverage under such sentence. Each
Federal agency lender shall issue any regulations
necessary to carry out this paragraph. Such regulations
shall be consistent with and substantially identical to
the regulations issued under paragraph (1)(A).
(3) Government-sponsored enterprises for housing.--
[The] Subject to subsection (i) of this section, the
Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation shall implement
procedures reasonably designed to ensure that, for any
loan that is--
(A) secured by improved real estate or a
mobile home located in an area that has been
identified, at the time of the origination of
the loan or at any time during the term of the
loan, by the Administrator as an area having
special flood hazards and in which flood
insurance is available under the National Flood
Insurance Act of 1968, and
(B) purchased by such entity,
the building or mobile home and any personal property
securing the loan is covered for the term of the loan
by flood insurance in the amount provided in paragraph
(1)(A). The Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation shall accept
private flood insurance as satisfaction of the flood
insurance coverage requirement under paragraph (1)(A)
if the flood insurance coverage provided by such
private flood insurance meets the requirements for
coverage under such paragraph and any requirements
established by the Federal National Mortgage
Association or the Federal Home Loan Mortgage
Corporation, respectively, relating to the financial
solvency, strength, or claims-paying ability of private
insurance companies from which the Federal National
Mortgage Association or the Federal Home Loan Mortgage
Corporation will accept private flood insurance.
(4) Applicability.--
(A) Existing coverage.--Except as provided in
subparagraph (B), paragraph (1) shall apply on
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994.
(B) New coverage.--Paragraphs (2) and (3)
shall apply only with respect to any loan made,
increased, extended, or renewed after the
expiration of the 1-year period beginning on
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994. Paragraph (1) shall apply with respect to
any loan made, increased, extended, or renewed
by any lender supervised by the Farm Credit
Administration only after the expiration of the
period under this subparagraph.
(C) Continued effect of regulations.--
Notwithstanding any other provision of this
subsection, the regulations to carry out
paragraph (1), as in effect immediately before
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994, shall continue to apply until the
regulations issued to carry out paragraph (1)
as amended by section 522(a) of such Act take
effect.
(5) Rule of construction.--Nothing in this subsection
shall be construed to supersede or limit the authority
of a Federal entity for lending regulation, the Federal
Housing Finance Agency, a Federal agency lender, the
Federal National Mortgage Association, or the Federal
Home Loan Mortgage Corporation to establish
requirements relating to the financial solvency,
strength, or claims-paying ability of private insurance
companies from which the entity or agency will accept
private flood insurance.
(6) Notice.--
(A) In general.--Each lender shall disclose
to a borrower that is subject to this
subsection that--
(i) flood insurance is available from
private insurance companies that issue
standard flood insurance policies on
behalf of the national flood insurance
program or directly from the national
flood insurance program;
(ii) flood insurance that provides
the same level of coverage as a
standard flood insurance policy under
the national flood insurance program
may be available from a private
insurance company that issues policies
on behalf of the company; and
(iii) the borrower is encouraged to
compare the flood insurance coverage,
deductibles, exclusions, conditions and
premiums associated with flood
insurance policies issued on behalf of
the national flood insurance program
and policies issued on behalf of
private insurance companies and to
direct inquiries regarding the
availability, cost, and comparisons of
flood insurance coverage to an
insurance agent.
(B) Rule of construction.--Nothing in this
paragraph shall be construed as affecting or
otherwise limiting the authority of a Federal
entity for lending regulation to approve any
disclosure made by a regulated lending
institution for purposes of complying with
subparagraph (A).
[(7) Private flood insurance defined.--In this
subsection, the term ``private flood insurance'' means
an insurance policy that--
[(A) is issued by an insurance company that
is--
[(i) licensed, admitted, or otherwise
approved to engage in the business of
insurance in the State or jurisdiction
in which the insured building is
located, by the insurance regulator of
that State or jurisdiction; or
[(ii) in the case of a policy of
difference in conditions, multiple
peril, all risk, or other blanket
coverage insuring nonresidential
commercial property, is recognized, or
not disapproved, as a surplus lines
insurer by the insurance regulator of
the State or jurisdiction where the
property to be insured is located;
[(B) provides flood insurance coverage which
is at least as broad as the coverage provided
under a standard flood insurance policy under
the national flood insurance program, including
when considering deductibles, exclusions, and
conditions offered by the insurer;
[(C) includes--
[(i) a requirement for the insurer to
give 45 days' written notice of
cancellation or non-renewal of flood
insurance coverage to--
[(I) the insured; and
[(II) the regulated lending
institution or Federal agency
lender;
[(ii) information about the
availability of flood insurance
coverage under the national flood
insurance program;
[(iii) a mortgage interest clause
similar to the clause contained in a
standard flood insurance policy under
the national flood insurance program;
and
[(iv) a provision requiring an
insured to file suit not later than 1
year after date of a written denial of
all or part of a claim under the
policy; and
[(D) contains cancellation provisions that
are as restrictive as the provisions contained
in a standard flood insurance policy under the
national flood insurance program.]
(7) Definitions.--In this section:
(A) Federal flood insurance.--The term
``Federal flood insurance'' means an insurance
policy made available under the National Flood
Insurance Act of 1968 (42 U.S.C. 4001 et seq.).
(B) Flood insurance.--The term ``flood
insurance'' means--
(i) Federal flood insurance; and
(ii) private flood insurance.
(C) Mutual aid society.--The term ``mutual
aid society'' means an organization--
(i) the members of which--
(I) share a common set of
ethical or religious beliefs;
and
(II) in accordance with the
beliefs described in subclause
(I), agree to cover expenses
arising from damage to property
of the members of the
organization, including damage
caused by flooding; and
(ii) that has a demonstrated history
of fulfilling the terms of agreements
to cover expenses arising from damage
to property of the members of the
organization caused by flooding.
(D) Private flood insurance.--The term
``private flood insurance'' means--
(i) an insurance policy that--
(I) is issued by an insurance
company that is--
(aa) licensed,
admitted, or otherwise
approved to engage in
the business of
insurance in the State
in which the insured
building is located, by
the insurance regulator
of that State; or
(bb) eligible as a
nonadmitted insurer to
provide insurance in
the home State of the
insured, in accordance
with sections 521
through 527 of the
Nonadmitted and
Reinsurance Reform Act
of 2010 (15 U.S.C. 8201
through 8206);
(II) is issued by an
insurance company that is not
otherwise disapproved as a
surplus lines insurer by the
insurance regulator of the
State in which the property to
be insured is located; and
(III) provides flood
insurance coverage that
complies with the laws and
regulations of that State; or
(ii) an agreement with a mutual aid
society for such society to cover
expenses arising from damage to
property of the members of such society
caused by flooding, unless the State in
which the property to be insured is
located has--
(I) determined that the
specific mutual aid society may
not provide such coverage or
provide such coverage in such
manner; or
(II) specifically provided
through law or regulation that
mutual aid societies may not
provide such coverage or
provide such coverage in such
manner.
(E) State.--The term ``State'' means any
State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico,
Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa.
(c) Exceptions to Purchase Requirements.--
(1) State-owned property.--Notwithstanding the other
provisions of this section, flood insurance shall not
be required on any State-owned property that is covered
under an adequate State policy of self-insurance
satisfactory to the Administrator. The Administrator
shall publish and periodically revise the list of
States to which this subsection applies.
(2) Small loans.--Notwithstanding any other provision
of this section, subsections (a) and (b) shall not
apply to any loan having--
(A) an original outstanding principal balance
of [$5,000 or less] $25,000 or less, except
that such amount (as it may have been
previously adjusted) shall be adjusted for
inflation by the Administrator upon the
expiration of the 5-year period beginning upon
the enactment of the 21st Century Flood Reform
Act and upon the expiration of each successive
5-year period thereafter, in accordance with an
inflationary index selected by the
Administrator ; and
(B) a repayment term of 1 year or less.
(3) Detached structures.--Notwithstanding any other
provision of this section, flood insurance shall not be
required, in the case of any residential property, for
any structure that is a part of such property but is
detached from the primary residential structure of such
property and does not serve as a residence.
(d) Escrow of Flood Insurance Payments.--
(1) Regulated lending institutions.--
(A) Federal entities responsible for lending
regulations.--Each Federal entity for lending
regulation (after consultation and coordination
with the Federal Financial Institutions
Examination Council) shall, by regulation,
direct that all premiums and fees for flood
insurance under the National Flood Insurance
Act of 1968, for residential improved real
estate or a mobile home, shall be paid to the
regulated lending institution or servicer for
any loan secured by the residential improved
real estate or mobile home, with the same
frequency as payments on the loan are made, for
the duration of the loan. Except as provided in
subparagraph (B), upon receipt of any premiums
or fees, the regulated lending institution or
servicer shall deposit such premiums and fees
in an escrow account on behalf of the borrower.
Upon receipt of a notice from the Administrator
or the provider of the flood insurance that
insurance premiums are due, the premiums
deposited in the escrow account shall be paid
to the provider of the flood insurance.
(B) Limitation.--Except as may be required
under applicable State law, a Federal entity
for lending regulation may not direct or
require a regulated lending institution to
deposit premiums or fees for flood insurance
under the National Flood Insurance Act of 1968
in an escrow account on behalf of a borrower
under subparagraph (A)--
(i) if--
(I) the regulated lending
institution has total assets of
less than $1,000,000,000; and
(II) on or before the date of
enactment of the Biggert-Waters
Flood Insurance Reform Act of
2012, the regulated lending
institution--
(aa) in the case of a
loan secured by
residential improved
real estate or a mobile
home, was not required
under Federal or State
law to deposit taxes,
insurance premiums,
fees, or any other
charges in an escrow
account for the entire
term of the loan; and
(bb) did not have a
policy of consistently
and uniformly requiring
the deposit of taxes,
insurance premiums,
fees, or any other
charges in an escrow
account for loans
secured by residential
improved real estate or
a mobile home; or
(ii) in the case of a loan that--
(I) is in a junior or
subordinate position to a
senior lien secured by the same
residential improved real
estate or mobile home for which
flood insurance is being
provided at the time of the
origination of the loan;
(II) is secured by
residential improved real
estate or a mobile home that is
part of a condominium,
cooperative, or other project
development, if the residential
improved real estate or mobile
home is covered by a flood
insurance policy that--
(aa) meets the
requirements that the
regulated lending
institution is required
to enforce under
subsection (b)(1);
(bb) is provided by
the condominium
association,
cooperative, homeowners
association, or other
applicable group; and
(cc) the premium for
which is paid by the
condominium
association,
cooperative, homeowners
association, or other
applicable group as a
common expense;
(III) is secured by
residential improved real
estate or a mobile home that is
used as collateral for a
business purpose;
(IV) is a home equity line of
credit;
(V) is a nonperforming loan;
or
(VI) has a term of not longer
than 12 months.
(2) Federal agency lenders.--Each Federal agency
lender shall by regulation require and provide for
escrow and payment of any flood insurance premiums and
fees relating to residential improved real estate and
mobile homes securing loans made by the Federal agency
lender under the circumstances and in the manner
provided under paragraph (1). Any regulations issued
under this paragraph shall be consistent with and
substantially identical to the regulations issued under
paragraph (1).
(3) Applicability of respa.--Escrow accounts
established pursuant to this subsection shall be
subject to the provisions of section 10 of the Real
Estate Settlement Procedures Act of 1974.
(4) Definition.--For purposes of this subsection, the
term ``residential improved real estate'' means
improved real estate for which the improvement is a
residential building.
(5) Applicability.--This subsection shall apply only
with respect to any loan made, increased, extended, or
renewed after the expiration of the 1-year period
beginning on the date of enactment of the Riegle
Community Development and Regulatory Improvement Act of
1994.
(e) Placement of Flood Insurance by Lender.--
(1) Notification to borrower of lack of coverage.--
[If] Subject to subsection (i) of this section, if , at
the time of origination or at any time during the term
of a loan secured by improved real estate or by a
mobile home located in an area that has been identified
by the Administrator (at the time of the origination of
the loan or at any time during the term of the loan) as
an area having special flood hazards and in which flood
insurance is available under the National Flood
Insurance Act of 1968, the lender or servicer for the
loan determines that the building or mobile home and
any personal property securing the loan is not covered
by flood insurance or is covered by such insurance in
an amount less than the amount required for the
property pursuant to paragraph (1), (2), or (3) of
subsection (b), the lender or servicer shall notify the
borrower under the loan that the borrower should
obtain, at the borrower's expense, an amount of flood
insurance for the building or mobile home and such
personal property that is not less than the amount
under subsection (b)(1), for the term of the loan.
(2) Purchase of coverage on behalf of borrower.--If
the borrower fails to purchase such flood insurance
within 45 days after notification under paragraph (1),
the lender or servicer for the loan shall purchase the
insurance on behalf of the borrower and may charge the
borrower for the cost of premiums and fees incurred by
the lender or servicer for the loan in purchasing the
insurance, including premiums or fees incurred for
coverage beginning on the date on which flood insurance
coverage lapsed or did not provide a sufficient
coverage amount.
(3) Termination of force-placed insurance.--Within 30
days of receipt by the lender or servicer of a
confirmation of a borrower's existing flood insurance
coverage, the lender or servicer shall--
(A) terminate any insurance purchased by the
lender or servicer under paragraph (2); and
(B) refund to the borrower all premiums paid
by the borrower for any insurance purchased by
the lender or servicer under paragraph (2)
during any period during which the borrower's
flood insurance coverage and the insurance
coverage purchased by the lender or servicer
were each in effect, and any related fees
charged to the borrower with respect to the
insurance purchased by the lender or servicer
during such period.
(4) Sufficiency of demonstration.--For purposes of
confirming a borrower's existing flood insurance
coverage, a lender or servicer for a loan shall accept
from the borrower an insurance policy declarations page
that includes the existing flood insurance policy
number and the identity of, and contact information
for, the insurance company or agent.
(5) Review of determination regarding required
purchase.--
(A) In general.--The borrower and lender for
a loan secured by improved real estate or a
mobile home may jointly request the
Administrator to review a determination of
whether the building or mobile home is located
in an area having special flood hazards. Such
request shall be supported by technical
information relating to the improved real
estate or mobile home. Not later than 45 days
after the Administrator receives the request,
the Administrator shall review the
determination and provide to the borrower and
the lender with a letter stating whether or not
the building or mobile home is in an area
having special flood hazards. The determination
of the Administrator shall be final.
(B) Effect of determination.--Any person to
whom a borrower provides a letter issued by the
Administrator pursuant to subparagraph (A),
stating that the building or mobile home
securing the loan of the borrower is not in an
area having special flood hazards, shall have
no obligation under this title to require the
purchase of flood insurance for such building
or mobile home during the period determined by
the Administratorwhich shall be specified in
the letter and shall begin on the date on which
such letter is provided.
(C) Effect of failure to respond.--If a
request under subparagraph (A) is made in
connection with the origination of a loan and
the Administrator fails to provide a letter
under subparagraph (A) before the later of (i)
the expiration of the 45-day period under such
subparagraph, or (ii) the closing of the loan,
no person shall have an obligation under this
title to require the purchase of flood
insurance for the building or mobile home
securing the loan until such letter is
provided.
(6) Applicability.--This subsection shall apply to
all loans outstanding on or after the date of enactment
of the Riegle Community Development and Regulatory
Improvement Act of 1994.
(f) Civil Monetary Penalties for Failure To Require Flood
Insurance or Notify.--
(1) Civil monetary penalties against regulated
lenders.--Any regulated lending institution that is
found to have a pattern or practice of committing
violations under paragraph (2) shall be assessed a
civil penalty by the appropriate Federal entity for
lending regulation in the amount provided under
paragraph (5).
(2) Lender violations.--The violations referred to in
paragraph (1) shall include--
(A) making, increasing, extending, or
renewing loans in violation of--
(i) the regulations issued pursuant
to subsection (b) of this section;
(ii) the escrow requirements under
subsection (d) of this section; or
(iii) the notice requirements under
section 1364 of the National Flood
Insurance Act of 1968; or
(B) failure to provide notice or purchase
flood insurance coverage in violation of
subsection (e) of this section.
(3) Civil monetary penalties against gse's.--
(A) In general.--If the Federal National
Mortgage Association or the Federal Home Loan
Mortgage Corporation is found by the Director
of the Federal Housing Finance Agency to have a
pattern or practice of purchasing loans in
violation of the procedures established
pursuant to subsection (b)(3), the Director of
such Office shall assess a civil penalty
against such enterprise in the amount provided
under paragraph (5) of this subsection.
(B) Definition.--For purposes of this
subsection, the term ``enterprise'' means the
Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation.
(4) Notice and hearing.--A penalty under this
subsection may be issued only after notice and an
opportunity for a hearing on the record.
(5) Amount.--A civil monetary penalty under this
subsection may not exceed [$2,000] $5,000 for each
violation under paragraph (2) or paragraph (3).
(6) Lender compliance.--Notwithstanding any State or
local law, for purposes of this subsection, any
regulated lending institution that purchases flood
insurance or renews a contract for flood insurance on
behalf of or as an agent of a borrower of a loan for
which flood insurance is required shall be considered
to have complied with the regulations issued under
subsection (b).
(7) Effect of transfer on liability.--Any sale or
other transfer of a loan by a regulated lending
institution that has committed a violation under
paragraph (1), that occurs subsequent to the violation,
shall not affect the liability of the transferring
lender with respect to any penalty under this
subsection. A lender shall not be liable for any
violations relating to a loan committed by another
regulated lending institution that previously held the
loan.
(8) Deposit of penalties.--Any penalties collected
under this subsection shall be paid into the National
Flood Mitigation Fund under section 1367 of the
National Flood Insurance Act of 1968.
(9) Additional penalties.--Any penalty under this
subsection shall be in addition to any civil remedy or
criminal penalty otherwise available.
(10) Statute of limitations.--No penalty may be
imposed under this subsection after the expiration of
the 4-year period beginning on the date of the
occurrence of the violation for which the penalty is
authorized under this subsection.
(g) Other Actions To Remedy Pattern of Noncompliance.--
(1) Authority of federal entities for lending
regulation.--A Federal entity for lending regulation
may require a regulated lending institution to take
such remedial actions as are necessary to ensure that
the regulated lending institution complies with the
requirements of the national flood insurance program if
the Federal agency for lending regulation makes a
determination under paragraph (2) regarding the
regulated lending institution.
(2) Determination of violations.--A determination
under this paragraph shall be a finding that--
(A) the regulated lending institution has
engaged in a pattern and practice of
noncompliance in violation of the regulations
issued pursuant to subsection (b), (d), or (e)
or the notice requirements under section 1364
of the National Flood Insurance Act of 1968;
and
(B) the regulated lending institution has not
demonstrated measurable improvement in
compliance despite the assessment of civil
monetary penalties under subsection (f).
(h) Fee for Determining Location.--Notwithstanding any other
Federal or State law, any person who makes a loan secured by
improved real estate or a mobile home or any servicer for such
a loan may charge a reasonable fee for the costs of determining
whether the building or mobile home securing the loan is
located in an area having special flood hazards, but only in
accordance with the following requirements:
(1) Borrower fee.--The borrower under such a loan may
be charged the fee, but only if the determination--
(A) is made pursuant to the making,
increasing, extending, or renewing of the loan
that is initiated by the borrower;
(B) is made pursuant to a revision or
updating under section 1360(f) of the
floodplain areas and flood-risk zones or
publication of a notice or compendia under
subsection (h) or (i) of section 1360 that
affects the area in which the improved real
estate or mobile home securing the loan is
located or that, in the determination of the
Administrator, may reasonably be considered to
require a determination under this subsection;
or
(C) results in the purchase of flood
insurance coverage pursuant to the requirement
under subsection (e)(2).
(2) Purchaser or transferee fee.--The purchaser or
transferee of such a loan may be charged the fee in the
case of sale or transfer of the loan.
(i) Satisfaction of Mandatory Purchase Requirement in States
Allowing All-perils Policies.--
(1) Waivers.--Section 102 shall not apply with
respect to residential properties in any State that
allows any property insurance coverage that covers
``all-perils'' except specifically excluded perils that
includes coverage for flood perils in an amount at
least equal to the outstanding principal balance of the
loan or the maximum limit of flood insurance coverage
made available under this title with respect to such
type of residential property, whichever is less.
(2) Definitions, procedures, standards.--The
Administrator may establish such definitions,
procedures, and standards as the Administrator
considers necessary for making determinations under
paragraph (1).
(j) Flood Insurance Purchase Requirements.--Notwithstanding
any other provision of law, a State or local government or
private lender may require the purchase of flood insurance
coverage for a structure that is located outside of an area
having special flood hazards.
* * * * * * *
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BIGGERT-WATERS FLOOD INSURANCE REFORM ACT OF 2012
* * * * * * *
DIVISION F--MISCELLANEOUS
* * * * * * *
TITLE II--FLOOD INSURANCE
Subtitle A--Flood Insurance Reform and Modernization
* * * * * * *
SEC. 100216. NATIONAL FLOOD MAPPING PROGRAM.
(a) Reviewing, Updating, and Maintaining Maps.--The
Administrator, in coordination with the Technical Mapping
Advisory Council established under section 100215, shall
establish an ongoing program under which the Administrator
shall review, update, and maintain National Flood Insurance
Program rate maps in accordance with this section.
(b) Mapping.--
(1) In general.--In carrying out the program
established under subsection (a), the Administrator
shall--
(A) identify, review, update, maintain, and
publish National Flood Insurance Program rate
maps with respect to--
(i) all populated areas and areas of
possible population growth located
within the 100-year floodplain;
(ii) all populated areas and areas of
possible population growth located
within the 500-year floodplain;
(iii) areas of residual risk,
including areas that are protected by
levees, dams, and other flood control
structures;
(iv) areas that could be inundated as
a result of the failure of a levee,
dam, or other flood control structure;
(v) areas that are protected by non-
structural flood mitigation features;
and
(vi) the level of protection provided
by flood control structures and by non-
structural flood mitigation features;
(B) establish or update flood-risk zone data
in all such areas, and make estimates with
respect to the rates of probable flood caused
loss for the various flood risk zones for each
such area; [and]
(C) use, in identifying, reviewing, updating,
maintaining, or publishing any National Flood
Insurance Program rate map required under this
section or under the National Flood Insurance
Act of 1968 (42 U.S.C. 4011 et seq.), the most
accurate topography and elevation data
available[.]; and
(D) consult and coordinate with the
Department of Defense, the United States
Geological Survey, and the National Oceanic and
Atmospheric Administration for the purpose of
obtaining the most-up-to-date maps and other
information of such agencies, including
information on topography, water flow, and any
other issues, relevant to mapping for flood
insurance purposes.
(2) Mapping elements.--Each map updated under this
section shall--
(A) assess the accuracy of current ground
elevation data used for hydrologic and
hydraulic modeling of flooding sources and
mapping of the flood hazard and wherever
necessary acquire new ground elevation data
utilizing the most up-to-date geospatial
technologies in accordance with guidelines and
specifications of the Federal Emergency
Management Agency; and
(B) develop National Flood Insurance Program
flood data on a watershed basis--
(i) to provide the most technically
effective and efficient studies and
hydrologic and hydraulic modeling; and
(ii) to eliminate, to the maximum
extent possible, discrepancies in base
flood elevations between adjacent
political subdivisions.
(3) Other inclusions.--In updating maps
under this section, the Administrator shall
include--
(A) any relevant information on coastal
inundation from--
(i) an applicable inundation map of
the Corps of Engineers; and
(ii) data of the National Oceanic and
Atmospheric Administration relating to
storm surge modeling;
(B) any relevant information of the United
States Geological Survey on stream flows,
watershed characteristics, and topography that
is useful in the identification of flood hazard
areas, as determined by the Administrator;
(C) any relevant information on land
subsidence, coastal erosion areas, changing
lake levels, and other flood-related hazards;
(D) any relevant information or data of the
National Oceanic and Atmospheric Administration
and the United States Geological Survey
relating to the best available science
regarding future changes in sea levels,
precipitation, and intensity of hurricanes;
[and]
(E) any other information relevant to mapping
for flood insurance purposes obtained pursuant
to paragraph (1)(D); and
[(E)] (F) any other relevant information as
may be recommended by the Technical Mapping
Advisory Committee.
(c) Standards.--In updating and maintaining maps under this
section, the Administrator shall--
(1) establish standards to--
(A) ensure that maps are adequate for--
(i) flood risk determinations; and
(ii) use by State and local
governments in managing development to
reduce the risk of flooding; and
(B) facilitate identification and use of
consistent methods of data collection and
analysis by the Administrator, in conjunction
with State and local governments, in developing
maps for communities with similar flood risks,
as determined by the Administrator; and
(2) publish maps in a format that is--
(A) digital geospatial data compliant;
(B) compliant with the open publishing and
data exchange standards established by the Open
Geospatial Consortium; and
(C) aligned with official data defined by the
National Geodetic Survey.
(d) Communication and Outreach.--
(1) In general.--The Administrator shall--
(A) before commencement of any mapping or map
updating process, notify each community
affected of the model or models that the
Administrator plans to use in such process and
provide an explanation of why such model or
models are appropriate;
(B) provide each community affected a maximum
30-day period beginning upon notification under
subparagraph (A) to consult with the
Administrator regarding the appropriateness,
with respect to such community, of the mapping
model or models to be used; provided that
consultation by a community pursuant to this
subparagraph shall not waive or otherwise
affect any right of the community to appeal any
flood hazard determinations;
(C) upon completion of the first Independent
Data Submission, transmit a copy of such
Submission to the affected community, provide
the affected community a maximum 30-day period
during which the community may provide data to
Administrator that can be used to supplement or
modify the existing data, and incorporate any
data that is consistent with prevailing
engineering principles;
(D) work with States, local communities, and
property owners to identify areas and features
described in subsection (b)(1)(A)(v);
(E) work to enhance communication and
outreach to States, local communities, and
property owners about the effects--
(i) of any potential changes to
National Flood Insurance Program rate
maps that may result from the mapping
program required under this section;
and
(ii) that any such changes may have
on flood insurance purchase
requirements;
(F) engage with local communities to enhance
communication and outreach to the residents of
such communities, including tenants (with
regard to contents insurance), on the matters
described under subparagraph (E); and
(G) not less than 30 days before issuance of
any preliminary map, notify the Senators for
each State affected and each Member of the
House of Representatives for each congressional
district affected by the preliminary map in
writing of--
(i) the estimated schedule for--
(I) community meetings
regarding the preliminary map;
(II) publication of notices
regarding the preliminary map
in local newspapers; and
(III) the commencement of the
appeals process regarding the
map; and
(ii) the estimated number of homes
and businesses that will be affected by
changes contained in the preliminary
map, including how many structures will
be that were not previously located in
an area having special flood hazards
will be located within such an area
under the preliminary map; and
(H) upon the issuance of any proposed map and
any notice of an opportunity to make an appeal
relating to the proposed map, notify the
Senators for each State affected each Member of
the House of Representatives for each
congressional district affected by the proposed
map of any action taken by the Administrator
with respect to the proposed map or an appeal
relating to the proposed map.
(2) Required activities.--The communication and
outreach activities required under paragraph (1) shall
include--
(A) notifying property owners when their
properties become included in, or when they are
excluded from, an area covered by the mandatory
flood insurance purchase requirement under
section 102 of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4012a);
(B) educating property owners regarding the
flood risk and reduction of this risk in their
community, including the continued flood risks
to areas that are no longer subject to the
flood insurance mandatory purchase requirement;
(C) educating property owners regarding the
benefits and costs of maintaining or acquiring
flood insurance, including, where applicable,
lower-cost preferred risk policies under the
National Flood Insurance Act of 1968 (42 U.S.C.
4011 et seq.) for such properties and the
contents of such properties;
(D) educating property owners about flood map
revisions and the process available to such
owners to appeal proposed changes in flood
elevations through their community, including
by notifying local radio and television
stations; and
(E) encouraging property owners to maintain
or acquire flood insurance coverage.
(e) Community Remapping Request.--Upon the adoption by the
Administrator of any recommendation by the Technical Mapping
Advisory Council for reviewing, updating, or maintaining
National Flood Insurance Program rate maps in accordance with
this section, a community that believes that its flood
insurance rates in effect prior to adoption would be affected
by the adoption of such recommendation may submit a request for
an update of its rate maps, which may be considered at the
Administrator's sole discretion. The Administrator shall
establish a protocol for the evaluation of such community map
update requests.
(f) Authorization of Appropriations.--There is authorized to
be appropriated to the Administrator to carry out this section
$400,000,000 for each of fiscal years 2013 through 2017.
* * * * * * *
----------
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
Sec. 10. (a) The Board of Directors shall administer the
affairs of the Corporation fairly and impartially and without
discrimination. The Board of Directors of the Corporation shall
determine and prescribe the manner in which its obligations
shall be incurred and its expenses allowed and paid. The
Corporation shall be entitled to the free use of the United
States mails in the same manner as the executive departments of
the Government. The Corporation with the consent of any Federal
Reserve bank or of any board, commission, independent
establishment, or executive department of the Government,
including any field service thereof, may avail itself of the
use of information, services, and facilities thereof in
carrying out the provisions of this Act.
(b) Examinations.--
(1) Appointment of examiners and claims agents.--The
Board of Directors shall appoint examiners and claims
agents.
(2) Regular examinations.--Any examiner appointed
under paragraph (1) shall have power, on behalf of the
Corporation, to examine--
(A) any insured State nonmember bank or
insured State branch of any foreign bank;
(B) any depository institution which files an
application with the Corporation to become an
insured depository institution; and
(C) any insured depository institution in
default,
whenever the Board of Directors determines an
examination of any such depository institution is
necessary.
(3) Special examination of any insured depository
institution.--
(A) In general.--In addition to the
examinations authorized under paragraph (2),
any examiner appointed under paragraph (1)
shall have power, on behalf of the Corporation,
to make any special examination of any insured
depository institution or nonbank financial
company supervised by the Board of Governors or
a bank holding company described in section
165(a) of the Financial Stability Act of 2010,
whenever the Board of Directors determines that
a special examination of any such depository
institution is necessary to determine the
condition of such depository institution for
insurance purposes, or of such nonbank
financial company supervised by the Board of
Governors or bank holding company described in
section 165(a) of the Financial Stability Act
of 2010, for the purpose of implementing its
authority to provide for orderly liquidation of
any such company under title II of that Act,
provided that such authority may not be used
with respect to any such company that is in a
generally sound condition.
(B) Limitation.--Before conducting a special
examination of a nonbank financial company
supervised by the Board of Governors or a bank
holding company described in section 165(a) of
the Financial Stability Act of 2010, the
Corporation shall review any available and
acceptable resolution plan that the company has
submitted in accordance with section 165(d) of
that Act, consistent with the nonbinding effect
of such plan, and available reports of
examination, and shall coordinate to the
maximum extent practicable with the Board of
Governors, in order to minimize duplicative or
conflicting examinations.
(4) Examination of affiliates.--
(A) In general.--In making any examination
under paragraph (2) or (3), any examiner
appointed under paragraph (1) shall have power,
on behalf of the Corporation, to make such
examinations of the affairs of any affiliate of
any depository institution as may be necessary
to disclose fully--
(i) the relationship between such
depository institution and any such
affiliate; and
(ii) the effect of such relationship
on the depository institution.
(B) Commitment by foreign banks to allow
examinations of affiliates.--No branch or
depository institution subsidiary of a foreign
bank may become an insured depository
institution unless such foreign bank submits a
written binding commitment to the Board of
Directors to permit any examination of any
affiliate of such branch or depository
institution subsidiary pursuant to subparagraph
(A) to the extent determined by the Board of
Directors to be necessary to carry out the
purposes of this Act.
(5) Examination of insured state branches.--The Board
of Directors shall--
(A) coordinate examinations of insured State
branches of foreign banks with examinations
conducted by the Board of Governors of the
Federal Reserve System under section 7(c)(1) of
the International Banking Act of 1978; and
(B) to the extent possible, participate in
any simultaneous examination of the United
States operations of a foreign bank requested
by the Board under such section.
(6) Power and duty of examiners.--Each examiner
appointed under paragraph (1) shall--
(A) have power to make a thorough examination
of any insured depository institution or
affiliate under paragraph (2), (3), (4), or
(5); and
(B) shall make a full and detailed report of
condition of any insured depository institution
or affiliate examined to the Corporation.
(7) Power of claim agents.--Each claim agent
appointed under paragraph (1) shall have power to
investigate and examine all claims for insured
deposits.
(c) In connection with examinations of insured depository
institutions and any State nonmember bank, savings association,
or other institution making application to become insured
depository institutions, and affiliates thereof, or with other
types of investigations to determine compliance with applicable
law and regulations, the appropriate Federal banking agency, or
its designated representatives, are authorized to administer
oaths and affirmations, and to examine and and to take and
preserve testimony under oath as to any matter in respect to
the affairs or ownership of any such bank or institution or
affiliate thereof, and to exercise such other powers as are set
forth in section 8(n) of this Act.
(d) Annual On-Site Examinations of All Insured Depository
Institutions Required.--
(1) In general.--The appropriate Federal banking
agency shall, not less than once during each 12-month
period, conduct a full-scope, on-site examination of
each insured depository institution.
(2) Examinations by corporation.--Paragraph (1) shall
not apply during any 12-month period in which the
Corporation has conducted a full-scope, on-site
examination of the insured depository institution.
(3) State examinations acceptable.--The examinations
required by paragraph (1) may be conducted in alternate
12-month periods, as appropriate, if the appropriate
Federal banking agency determines that an examination
of the insured depository institution conducted by the
State during the intervening 12-month period carries
out the purpose of this subsection.
(4) 18-month rule for certain small institutions.--
Paragraphs (1), (2), and (3) shall apply with ``18-
month'' substituted for ``12-month'' if--
(A) the insured depository institution has
total assets of less than $1,000,000,000;
(B) the institution is well capitalized, as
defined in section 38;
(C) when the institution was most recently
examined, it was found to be well managed, and
its composite condition--
(i) was found to be outstanding; or
(ii) was found to be outstanding or
good, in the case of an insured
depository institution that has total
assets of not more than $200,000,000;
(D) the insured institution is not currently
subject to a formal enforcement proceeding or
order by the Corporation or the appropriate
Federal banking agency; and
(E) no person acquired control of the
institution during the 12-month period in which
a full-scope, on-site examination would be
required but for this paragraph.
(5) Certain government-controlled institutions
exempted.--Paragraph (1) does not apply to--
(A) any institution for which the Corporation
is conservator; or
(B) any bridge depository institution, none
of the voting securities of which are owned by
a person or agency other than the Corporation.
(6) Coordinated examinations.--To minimize the
disruptive effects of examinations on the operations of
insured depository institutions--
(A) each appropriate Federal banking agency
shall, to the extent practicable and consistent
with principles of safety and soundness and the
public interest--
(i) coordinate examinations to be
conducted by that agency at an insured
depository institution and its
affiliates;
(ii) coordinate with the other
appropriate Federal banking agencies in
the conduct of such examinations;
(iii) work to coordinate with the
appropriate State bank supervisor--
(I) the conduct of all
examinations made pursuant to
this subsection; and
(II) the number, types, and
frequency of reports required
to be submitted to such
agencies and supervisors by
insured depository
institutions, and the type and
amount of information required
to be included in such reports;
and
(iv) use copies of reports of
examinations of insured depository
institutions made by any other Federal
banking agency or appropriate State
bank supervisor to eliminate
duplicative requests for information;
and
(B) not later than 2 years after the date of
enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994, the
Federal banking agencies shall jointly
establish and implement a system for
determining which one of the Federal banking
agencies or State bank supervisors shall be the
lead agency responsible for managing a unified
examination of each insured depository
institution and its affiliates, as required by
this subsection.
(7) Separate examinations permitted.--Notwithstanding
paragraph (6), each appropriate Federal banking agency
may conduct a separate examination in an emergency or
under other exigent circumstances, or when the agency
believes that a violation of law may have occurred.
(8) Report.--At the time the system provided for in
paragraph (6) is established, the Federal banking
agencies shall submit a joint report describing the
system to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Banking,
Finance and Urban Affairs of the House of
Representatives. Thereafter, the Federal banking
agencies shall annually submit a joint report to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Banking, Finance and Urban
Affairs of the House of Representatives regarding the
progress of the agencies in implementing the system and
indicating areas in which enhancements to the system,
including legislature improvements, would be
appropriate.
(9) Standards for determining adequacy of state
examinations.--The Federal Financial Institutions
Examination Council shall issue guidelines establishing
standards to be used at the discretion of the
appropriate Federal banking agency for purposes of
making a determination under paragraph (3).
(10) Agencies authorized to increase maximum asset
amount of institutions for certain purposes.--At any
time after the end of the 2-year period beginning on
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994, the
appropriate Federal banking agency, in the agency's
discretion, may increase the maximum amount limitation
contained in paragraph (4)(C)(ii), by regulation, from
$200,000,000 to an amount not to exceed $1,000,000,000
for purposes of such paragraph, if the agency
determines that the greater amount would be consistent
with the principles of safety and soundness for insured
depository institutions.
(e) Examination Fees.--
(1) Regular and special examinations of depository
institutions.--The cost of conducting any regular
examination or special examination of any depository
institution under subsection (b)(2), (b)(3), or (d) or
of any entity described in section 3(q)(2) may be
assessed by the Corporation against the institution or
entity to meet the expenses of the Corporation in
carrying out such examinations.
(2) Examination of affiliates.--The cost of
conducting any examination of any affiliate of any
insured depository institution under subsection (b)(4)
may be assessed by the Corporation against each
affiliate which is examined to meet the Corporation's
expenses in carrying out such examination.
(3) Assessment against depository institution in case
of affiliate's refusal to pay.--
(A) In general.--Subject to subparagraph (B),
if any affiliate of any insured depository
institution--
(i) refuses to pay any assessment
under paragraph (2); or
(ii) fails to pay any such assessment
before the end of the 60-day period
beginning on the date the affiliate
receives notice of the assessment,
the Corporation may assess such cost against,
and collect such cost from, the depository
institution.
(B) Affiliate of more than 1 depository
institution.--If any affiliate referred to in
subparagraph (A) is an affiliate of more than 1
insured depository institution, the assessment
under subparagraph (A) may be assessed against
the depository institutions in such proportions
as the Corporation determines to be
appropriate.
(4) Civil money penalty for affiliate's refusal to
cooperate.--
(A) Penalty imposed.--If any affiliate of any
insured depository institution--
(i) refuses to permit an examiner
appointed by the Board of Directors
under subsection (b)(1) to conduct an
examination; or
(ii) refuses to provide any
information required to be disclosed in
the course of any examination,
the depository institution shall forfeit and
pay a penalty of not more than $5,000 for each
day that any such refusal continues.
(B) Assessment and collection.--Any penalty
imposed under subparagraph (A) shall be
assessed and collected by the Corporation in
the manner provided in section 8(i)(2).
(5) Deposits of examination assessment.--Amounts
received by the Corporation under this subsection
(other than paragraph (4)) may be deposited in the
manner provided in section 13.
(f) Preservation of Agency Records.--
(1) In general.--A Federal banking agency may cause
any and all records, papers, or documents kept by the
agency or in the possession or custody of the agency to
be--
(A) photographed or microphotographed or
otherwise reproduced upon film; or
(B) preserved in any electronic medium or
format which is capable of--
(i) being read or scanned by
computer; and
(ii) being reproduced from such
electronic medium or format by printing
any other form of reproduction of
electronically stored data.
(2) Treatment as original records.--Any photographs,
microphotographs, or photographic film or copies
thereof described in paragraph (1)(A) or reproduction
of electronically stored data described in paragraph
(1)(B) shall be deemed to be an original record for all
purposes, including introduction in evidence in all
State and Federal courts or administrative agencies,
and shall be admissible to prove any act, transaction,
occurrence, or event therein recorded.
(3) Authority of the federal banking agencies.--Any
photographs, microphotographs, or photographic film or
copies thereof described in paragraph (1)(A) or
reproduction of electronically stored data described in
paragraph (1)(B) shall be preserved in such manner as
the Federal banking agency shall prescribe, and the
original records, papers, or documents may be destroyed
or otherwise disposed of as the Federal banking agency
may direct.
(g) Authority To Prescribe Regulations and Definitions.--
Except to the extent that authority under this Act is conferred
on any of the Federal banking agencies other than the
Corporation, the Corporation may--
(1) prescribe regulations to carry out this Act; and
(2) by regulation define terms as necessary to carry
out this Act.
(h) Coordination of Examination Authority.--
(1) State bank supervisors of home and host states.--
(A) Home state of bank.--The appropriate
State bank supervisor of the home State of an
insured State bank has authority to examine and
supervise the bank.
(B) Host state branches.--The State bank
supervisor of the home State of an insured
State bank and any State bank supervisor of an
appropriate host State shall exercise its
respective authority to supervise and examine
the branches of the bank in a host State in
accordance with the terms of any applicable
cooperative agreement between the home State
bank supervisor and the State bank supervisor
of the relevant host State.
(C) Supervisory fees.--Except as expressly
provided in a cooperative agreement between the
State bank supervisors of the home State and
any host State of an insured State bank, only
the State bank supervisor of the home State of
an insured State bank may levy or charge State
supervisory fees on the bank.
(2) Host state examination.--
(A) In general.--With respect to a branch
operated in a host State by an out-of-State
insured State bank that resulted from an
interstate merger transaction approved under
section 44, or that was established in such
State pursuant to section 5155(g) of the
Revised Statutes of the United States, the
third undesignated paragraph of section 9 of
the Federal Reserve Act or section 18(d)(4) of
this Act, the appropriate State bank supervisor
of such host State may--
(i) with written notice to the State
bank supervisor of the bank's home
State and subject to the terms of any
applicable cooperative agreement with
the State bank supervisor of such home
State, examine such branch for the
purpose of determining compliance with
host State laws that are applicable
pursuant to section 24(j), including
those that govern community
reinvestment, fair lending, and
consumer protection; and
(ii) if expressly permitted under and
subject to the terms of a cooperative
agreement with the State bank
supervisor of the bank's home State or
if such out-of-State insured State bank
has been determined to be in a troubled
condition by either the State bank
supervisor of the bank's home State or
the bank's appropriate Federal banking
agency, participate in the examination
of the bank by the State bank
supervisor of the bank's home State to
ascertain that the activities of the
branch in such host State are not
conducted in an unsafe or unsound
manner.
(B) Notice of determination.--
(i) In general.--The State bank
supervisor of the home State of an
insured State bank shall notify the
State bank supervisor of each host
State of the bank if there has been a
final determination that the bank is in
a troubled condition.
(ii) Timing of notice.--The State
bank supervisor of the home State of an
insured State bank shall provide notice
under clause (i) as soon as is
reasonably possible, but in all cases
not later than 15 business days after
the date on which the State bank
supervisor has made such final
determination or has received written
notification of such final
determination.
(3) Host state enforcement.--If the State bank
supervisor of a host State determines that a branch of
an out-of-State insured State bank is violating any law
of the host State that is applicable to such branch
pursuant to section 24(j), including a law that governs
community reinvestment, fair lending, or consumer
protection, the State bank supervisor of the host State
or, to the extent authorized by the law of the host
State, a host State law enforcement officer may, with
written notice to the State bank supervisor of the
bank's home State and subject to the terms of any
applicable cooperative agreement with the State bank
supervisor of the bank's home State, undertake such
enforcement actions and proceedings as would be
permitted under the law of the host State as if the
branch were a bank chartered by that host State.
(4) Cooperative agreement.--
(A) In general.--The State bank supervisors
from 2 or more States may enter into
cooperative agreements to facilitate State
regulatory supervision of State banks,
including cooperative agreements relating to
the coordination of examinations and joint
participation in examinations.
(B) Definition.--For purposes of this
subsection, the term ``cooperative agreement''
means a written agreement that is signed by the
home State bank supervisor and the host State
bank supervisor to facilitate State regulatory
supervision of State banks, and includes
nationwide or multi-State cooperative
agreements and cooperative agreements solely
between the home State and host State.
(C) Rule of construction.--Except for State
bank supervisors, no provision of this
subsection relating to such cooperative
agreements shall be construed as limiting in
any way the authority of home State and host
State law enforcement officers, regulatory
supervisors, or other officials that have not
signed such cooperative agreements to enforce
host State laws that are applicable to a branch
of an out-of-State insured State bank located
in the host State pursuant to section 24(j).
(5) Federal regulatory authority.--No provision of
this subsection shall be construed as limiting in any
way the authority of any Federal banking agency.
(6) State taxation authority not affected.--No
provision of this subsection shall be construed as
affecting the authority of any State or political
subdivision of any State to adopt, apply, or administer
any tax or method of taxation to any bank, bank holding
company, or foreign bank, or any affiliate of any bank,
bank holding company, or foreign bank, to the extent
that such tax or tax method is otherwise permissible by
or under the Constitution of the United States or other
Federal law.
(7) Definitions.--For purpose of this section, the
following definitions shall apply:
(A) Host state, home state, out-of-State
bank.--The terms ``host State'', ``home
State'', and ``out-of-State bank'' have the
same meanings as in section 44(g).
(B) State supervisory fees.--The term ``State
supervisory fees'' means assessments,
examination fees, branch fees, license fees,
and all other fees that are levied or charged
by a State bank supervisor directly upon an
insured State bank or upon branches of an
insured State bank.
(C) Troubled condition.--Solely for purposes
of paragraph (2)(B), an insured State bank has
been determined to be in ``troubled condition''
if the bank--
(i) has a composite rating, as
determined in its most recent report of
examination, of 4 or 5 under the
Uniform Financial Institutions Ratings
System;
(ii) is subject to a proceeding
initiated by the Corporation for
termination or suspension of deposit
insurance; or
(iii) is subject to a proceeding
initiated by the State bank supervisor
of the bank's home State to vacate,
revoke, or terminate the charter of the
bank, or to liquidate the bank, or to
appoint a receiver for the bank.
(D) Final determination.--For purposes of
paragraph (2)(B), the term ``final
determination'' means the transmittal of a
report of examination to the bank or
transmittal of official notice of proceedings
to the bank.
(i) Flood Insurance Compliance by Insured Depository
Institutions.--
(1) Examinations.--The appropriate Federal banking
agency shall, during each scheduled on-site examination
required by this section, determine whether the insured
depository institution is complying with the
requirements of the national flood insurance program.
(2) Report.--
(A) Requirement.--Not later than 1 year after
the [date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994 and biennially thereafter for the next 4
years] date of enactment of the 21st Century
Flood Reform Act and biennially thereafter ,
each appropriate Federal banking agency shall
submit a report to the Congress on compliance
by insured depository institutions with the
requirements of the national flood insurance
program.
(B) Contents.--Each report submitted under
this paragraph shall include a description of
the methods used to determine compliance, the
number of institutions examined during the
reporting year, a listing and total number of
institutions found not to be in compliance,
actions taken to correct incidents of
noncompliance, and an analysis of compliance,
including a discussion of any trends, patterns,
and problems, and recommendations regarding
reasonable actions to improve the efficiency of
the examinations processes.
(j) Consultation Among Examiners.--
(1) In general.--Each appropriate Federal banking
agency shall take such action as may be necessary to
ensure that examiners employed by the agency--
(A) consult on examination activities with
respect to any depository institution; and
(B) achieve an agreement and resolve any
inconsistencies in the recommendations to be
given to such institution as a consequence of
any examinations.
(2) Examiner-in-charge.--Each appropriate Federal
banking agency shall consider appointing an examiner-
in-charge with respect to a depository institution to
ensure consultation on examination activities among all
of the examiners of that agency involved in
examinations of the institution.
(k) One-Year Restrictions on Federal Examiners of Financial
Institutions.--
(1) In general.--In addition to other applicable
restrictions set forth in title 18, United States Code,
the penalties set forth in paragraph (6) of this
subsection shall apply to any person who--
(A) was an officer or employee (including any
special Government employee) of a Federal
banking agency or a Federal reserve bank;
(B) served 2 or more months during the final
12 months of his or her employment with such
agency or entity as the senior examiner (or a
functionally equivalent position) of a
depository institution or depository
institution holding company with continuing,
broad responsibility for the examination (or
inspection) of that depository institution or
depository institution holding company on
behalf of the relevant agency or Federal
reserve bank; and
(C) within 1 year after the termination date
of his or her service or employment with such
agency or entity, knowingly accepts
compensation as an employee, officer, director,
or consultant from--
(i) such depository institution, any
depository institution holding company
that controls such depository
institution, or any other company that
controls such depository institution;
or
(ii) such depository institution
holding company or any depository
institution that is controlled by such
depository institution holding company.
(2) Definitions.--For purposes of this subsection--
(A) the term ``depository institution''
includes an uninsured branch or agency of a
foreign bank, if such branch or agency is
located in any State; and
(B) the term ``depository institution holding
company'' includes any foreign bank or company
described in section 8(a) of the International
Banking Act of 1978.
(3) Rules of construction.--For purposes of this
subsection, a foreign bank shall be deemed to control
any branch or agency of the foreign bank, and a person
shall be deemed to act as a consultant for a depository
institution, depository institution holding company, or
other company, only if such person directly works on
matters for, or on behalf of, such depository
institution, depository institution holding company, or
other company.
(4) Regulations.--
(A) In general.--Each Federal banking agency
shall prescribe rules or regulations to
administer and carry out this subsection,
including rules, regulations, or guidelines to
define the scope of persons referred to in
paragraph (1)(B).
(B) Consultation required.--The Federal
banking agencies shall consult with each other
for the purpose of assuring that the rules and
regulations issued by the agencies under
subparagraph (A) are, to the extent possible,
consistent, comparable, and practicable, taking
into account any differences in the supervisory
programs utilized by the agencies for the
supervision of depository institutions and
depository institution holding companies.
(5) Waiver.--
(A) Agency authority.--A Federal banking
agency may grant a waiver, on a case by case
basis, of the restriction imposed by this
subsection to any officer or employee
(including any special Government employee) of
that agency, and the Board of Governors of the
Federal Reserve System may grant a waiver of
the restriction imposed by this subsection to
any officer or employee of a Federal reserve
bank, if the head of such agency certifies in
writing that granting the waiver would not
affect the integrity of the supervisory program
of the relevant Federal banking agency.
(B) Definition.--For purposes of this
paragraph, the head of an agency is--
(i) the Comptroller of the Currency,
in the case of the Office of the
Comptroller of the Currency;
(ii) the Chairman of the Board of
Governors of the Federal Reserve
System, in the case of the Board of
Governors of the Federal Reserve
System; and
(iii) the Chairperson of the Board of
Directors, in the case of the
Corporation.
(6) Penalties.--
(A) In general.--In addition to any other
administrative, civil, or criminal remedy or
penalty that may otherwise apply, whenever a
Federal banking agency determines that a person
subject to paragraph (1) has become associated,
in the manner described in paragraph (1)(C),
with a depository institution, depository
institution holding company, or other company
for which such agency serves as the appropriate
Federal banking agency, the agency shall impose
upon such person one or more of the following
penalties:
(i) Industry-wide prohibition
order.--The Federal banking agency
shall serve a written notice or order
in accordance with and subject to the
provisions of section 8(e)(4) for
written notices or orders under
paragraph (1) or (2) of section 8(e),
upon such person of the intention of
the agency--
(I) to remove such person
from office or to prohibit such
person from further
participation in the conduct of
the affairs of the depository
institution, depository
institution holding company, or
other company for a period of
up to 5 years; and
(II) to prohibit any further
participation by such person,
in any manner, in the conduct
of the affairs of any insured
depository institution for a
period of up to 5 years.
(ii) Civil monetary penalty.--The
Federal banking agency may, in an
administrative proceeding or civil
action in an appropriate United States
district court, impose on such person a
civil monetary penalty of not more than
$250,000. Any administrative proceeding
under this clause shall be conducted in
accordance with section 8(i). In lieu
of an action by the Federal banking
agency under this clause, the Attorney
General of the United States may bring
a civil action under this clause in the
appropriate United States district
court.
(B) Scope of prohibition order.--Any person
subject to an order issued under subparagraph
(A)(i) shall be subject to paragraphs (6) and
(7) of section 8(e) in the same manner and to
the same extent as a person subject to an order
issued under such section.
(C) Definitions.--Solely for purposes of this
paragraph, the ``appropriate Federal banking
agency'' for a company that is not a depository
institution or depository institution holding
company shall be the Federal banking agency on
whose behalf the person described in paragraph
(1) performed the functions described in
paragraph (1)(B).
* * * * * * *
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FEDERAL CREDIT UNION ACT
* * * * * * *
TITLE II--SHARE INSURANCE
* * * * * * *
examination of insured credit unions
Sec. 204. (a) The Board shall appoint examiners who shall
have power, on its behalf, to examine any insured credit union,
any credit union making application for insurance of its member
accounts, or any closed insured credit union whenever in the
judgment of the Board an examination is necessary to determine
the condition of any such credit union for insurance purposes.
Each examiner shall have power to make a thorough examination
of all of the affairs of the credit union and shall make a full
and detailed report of the condition of the credit union to the
Board. The Board in like manner shall appoint claim agents who
shall have power to investigate and examine all claims for
insured member accounts. Each claim agent shall have power to
administer oaths and affirmations, to examine and to take and
preserve testimony under oath as to any matter in respect to
claims for insured accounts, and to issue subpenas and subpenas
duces tecum and, for the enforcement thereof, to apply to the
United States district court for the judicial district or the
United States court in any territory in which the principal
office of the credit union is located or in which the witness
resides or carries on business. Such courts shall have
jurisdiction and power to order and require compliance with any
such subpena.
(b) In connection with examinations of insured credit unions,
or with other types of investigations to determine compliance
with applicable law and regulations, the Board, or its
designated representatives, shall have power to administer
oaths and affirmations, to examine and to take and preserve
testimony under oath as to any matter in respect of the affairs
of any such credit union, and to issue subpenas and subpenas
duces tecum and to exercise such other powers as are set forth
in section 206(p) and, for the enforcement thereof, to apply to
the United States district court for the judicial district or
the United States court in any territory in which the principal
office of the credit union is located or in which the witness
resides or carries on business. Such courts shall have
jurisdiction and power to order and require compliance with any
such subpena.
(c) In cases of refusal to obey a subpena issued to, or
contumacy by, any person, the Board may invoke the aid of any
court of the United States within the jurisdiction of which
such hearing, examination, or investigation is carried on, or
where such person resides or carries on business, in requiring
the attendance and testimony of witnesses and the production of
books, records, or other papers. Such court may issue an order
requiring such person to appear before the Board, or before a
person designated by them, there to produce records, if so
ordered, or to give testimony touching the matter in question.
Any failure to obey such order of the court may be punished by
such court as a contempt thereof. All process in any such case
may be served in the judicial district whereof such person is
an inhabitant or carries on business or wherever he may be
found. No person shall be excused from attending and testifying
or from producing books, records, or other papers in obedience
to a subpena issued under the authority of this title on the
ground that the testimony or evidence, documentary or
otherwise, required of him may tend to incriminate him or
subject him to penalty or forfeiture, but no individual shall
be prosecuted or subject to any penalty or forfeiture for or on
account of any transaction, matter, or thing concerning which
he is compelled to testify or produce evidence, documentary or
otherwise, after having claimed his privilege against self-
incrimination, except that such individual so testifying shall
not be exempt from prosecution and punishment for perjury
committed in so testifying.
(d) The Administration may accept any report of examination
made by or to any commission, board, or authority having
supervision of a State-chartered credit union and may furnish
to any such commission, board, or authority reports of
examination made on behalf of the Board.
(e) Flood Insurance Compliance by Insured Credit Unions.--
(1) Examination.--The Board shall, during each
examination conducted under this section, determine
whether the insured credit union is complying with the
requirements of the national flood insurance program.
(2) Report.--
(A) Requirement.--Not later than 1 year after
the [date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994 and biennially thereafter for the next 4
years] date of enactment of the 21st Century
Flood Reform Act and annually thereafter , the
Board shall submit a report to the Congress on
compliance by insured credit unions with the
requirements of the national flood insurance
program.
(B) Contents.--The report shall include a
description of the methods used to determine
compliance, the number of insured credit unions
examined during the reporting year, a listing
and total number of insured credit unions found
not to be in compliance, actions taken to
correct incidents of noncompliance, and an
analysis of compliance, including a discussion
of any trends, patterns, and problems, and
recommendations regarding reasonable actions to
improve the efficiency of the examinations
processes.
(f) Access to Liquidity.--The Board shall--
(1) periodically assess the potential liquidity needs
of each insured credit union, and the options that the
credit union has available for meeting those needs; and
(2) periodically assess the potential liquidity needs
of insured credit unions as a group, and the options
that insured credit unions have available for meeting
those needs.
(g) Sharing Information With Federal Reserve Banks.--The
Board shall, for the purpose of facilitating insured credit
unions' access to liquidity, make available to the Federal
reserve banks (subject to appropriate assurances of
confidentiality) information relevant to making advances to
such credit unions, including the Board's reports of
examination.
* * * * * * *
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FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND SOUNDNESS ACT OF 1992
* * * * * * *
TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES
* * * * * * *
Subtitle A--Supervision and Regulation of Enterprises
PART 1--FINANCIAL SAFETY AND SOUNDNESS REGULATOR
* * * * * * *
SEC. 1319B. ANNUAL REPORTS BY DIRECTOR.
(a) General Report.--The Director shall submit to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate, not later than June 15 of each year, a written report,
which shall include--
(1) a description of the actions taken, and being
undertaken, by the Director to carry out this title;
(2) a description of the financial safety and
soundness of each regulated entity, including the
results and conclusions of the annual examinations of
the regulated entities conducted under section 1317(a);
(3) any recommendations for legislation to enhance
the financial safety and soundness of the regulated
entities;
(4) a description of--
(A) whether the procedures established by
each regulated entity pursuant to section
102(b)(3) of the Flood Disaster Protection Act
of 1973 are adequate and being complied with,
and
(B) the results and conclusions of any
examination, as determined necessary by the
Director, to determine the compliance of the
regulated entities with the requirements of
section 102(b)(3) of such Act, which shall
include a description of the methods used to
determine compliance and the types and sources
of deficiencies (if any), and identify any
corrective measures that have been taken to
remedy any such deficiencies,
except that the information described in this paragraph
shall be included only in each of the [first, third,
and fifth annual reports under this subsection required
to be submitted after the expiration of the 1-year
period beginning on the date of enactment of the Riegle
Community Development and Regulatory Improvement Act of
1994] first annual report under this subsection
required to be submitted after the expiration of the 1-
year period beginning on the date of enactment of the
21st Century Flood Reform Act and every such second
annual report thereafter ; and
(5) the assessment of the Board or any of its members
with respect to--
(A) the safety and soundness of the regulated
entities;
(B) any material deficiencies in the conduct
of the operations of the regulated entities;
(C) the overall operational status of the
regulated entities; and
(D) an evaluation of the performance of the
regulated entities in carrying out their
respective missions;
(6) operations, resources, and performance of the
Agency; and
(7) such other matters relating to the Agency and the
fulfillment of its mission.
(b) Report on Enforcement Actions.--Not later than March 15
of each year, the Director shall submit to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate
a written report describing, for the preceding calendar year,
the requests by the Director to the Attorney General for
enforcement actions under subtitle C and describing the
disposition of each request, which shall include statements
of--
(1) the total number of requests made by the
Director;
(2) the number of requests that resulted in the
commencement of litigation by the Department of
Justice;
(3) the number of requests that did not result in the
commencement of litigation by the Department of
Justice;
(4) with respect to requests that resulted in the
commence-ment of litigation--
(A) the number of days between the date of
the request and the commencement of the
litigation; and
(B) the number of days between the date of
the commencement and termination of the
litigation; and
(5) the number of litigation requests pending at the
beginning of the calendar year, the number of requests
made during the calendar year, the number of requests
for which action was completed during the calendar
year, and the number of requests pending at the end of
the calendar year.
* * * * * * *
MINORITY VIEWS
H.R. 2874 makes a number of changes to the National Flood
Insurance Program (NFIP) that make flood insurance less
affordable, less available, and less fair for consumers.
H.R. 2874 would make flood insurance less affordable by
raising premiums, fees, and surcharges on policyholders, while
doing nothing to address the NFIP's debt or the billions of
dollars being spent on interest to service that debt.
Specifically, H.R. 2874 would require the Federal Emergency
Management Agency (FEMA) to raise premiums for pre-FIRM
policyholders by a minimum of 8 percent a year. The bill would
require FEMA to increase annual surcharges on all primary
residences by 60 percent and increase annual surcharges for
second homes that are not in preferred risk areas by 10
percent. The bill would also require FEMA to increase the
Reserve Fund fee, which is already 15% of premiums, by one
percent each year until the NFIP achieves a reserve ratio of
7.5 percent, which may take several years to reach. That is yet
another cost added on to policyholders' already expensive
premiums. Additionally, the bill would make flood insurance
less affordable by eliminating grandfathering. This would cause
homeowners who built to code and did everything right, to pay
higher premiums associated with new flood maps that did not
exist at the time the property was built. Further, the bill's
attempt to address longterm affordability challenges makes
matters worse. Although H.R. 2874 allows states to voluntarily
set up an affordability program, the bill does not provide any
funding for them to do so. States would bear the administrative
costs of setting up the programs, while the costs of any
discounts to eligible policyholders would be paid for by
premium and fee increases on other policyholders within the
state, increasing the affordability challenges for middle
income policyholders.
H.R. 2874 would make flood insurance less available by
prohibiting NFIP coverage for several classes of properties,
subject to certain market conditions. Specifically, all newly
constructed properties in a special flood hazard area (SFHA),
any residential property with a replacement value higher than
$1 million, and multiple loss properties for which the
aggregate amount in claims payments exceed twice the amount of
the replacement value of the structure, would be barred from
accessing federal flood insurance. Instead, these policyholders
would be forced to purchase flood insurance in the private
market, which remains undeveloped. Due to the market's current
limitations, the bill attempts to provide a safety valve to
allow consumers who cannot find or afford insurance in the
private market the opportunity to return to the NFIP. However,
policyholders would be charged an additional ten percent
surcharge for failing to find coverage in the private market
through no fault of their own. Further, this ill-conceived
safety valve is not available to properties with lifetime
claims exceeding twice the amount of the structure's
replacement value. Because the metric for excessive claims is
based on the replacement value of the home, lower value homes
will be disproportionately impacted, leaving these households
at risk of displacement or overwhelming cost burdens. As
borrowers lose NFIP coverage, and especially if alternative
private coverage is not available or affordable, these
properties will lose value and the risk of abandonment and/or
foreclosure increases dramatically. The American Bankers
Association (ABA) has warned that this provision could cause a
decrease in property values because of the lack of available
coverage and ``DI some flood prone communities, this could lead
to a local or regional foreclosure crisis.''
H.R. 2874 would make flood insurance less fair for
consumers by opening the door to the potential for cherry-
picking of the lowest-risk properties by the private sector.
Democrats support the responsible development of the private
flood insurance market. However, H.R. 2874 would call for
wholesale changes that undermine the NFIP and leave
policyholders vulnerable in an untested private market.
Specifically, H.R 2874 would eliminate the non-compete clause
that prevents Write-Your-Own (WYO) companies from offering
their own competing private flood insurance policies. The non-
compete clause is a long-standing condition of participation in
the WYO Program and, according to FEMA, ensures that WYOs--who
administer the NFIP while taking on none of the risk--do not
inappropriately take advantage of their access to FEMA's data
on policyholders to cherry pick or steer consumers towards a
competing product. Eliminating the non-compete clause would
also give WYOs an unfair competitive advantage compared to
other private insurance companies, many of which have been able
to successfully build a flood insurance portfolio without
access to this data. Additionally, this bill would require FEMA
to publicly disclose virtually all of its proprietary
information related to claims, underwriting, and risks. While
the bill stipulates that personally identifiable information is
to be excluded, it is unclear how FEMA can comply with this
requirement without violating the Privacy Act of 1974.
Moreover, the sharing of proprietary information such as claims
data is uncommon in the insurance industry. In fact, claims
data and modeling information are the keys to competition
amongst insurance companies and raises serious concerns about
the potential for cherry-picking.
While an amendment to this bill added language to
reauthorize the NFIP for five years, the refocus outlined above
are too harmful to enact for five years. For these reasons, we
oppose H.R. 2874.
Maxine Waters.
Keith Ellison.
Michael E. Capuano.
Stephen F. Lynch.
Carolyn B. Maloney.
Joyce Beatty.
Vicente Gonzalez.
Daniel T. Kildee.
Gwen Moore.
Charlie Crist.
Brad Sherman.
Nydia M. Velaquez.
Al Green.
Gregory W. Meeks.
Emanuel Cleaver.