[Congressional Record (Bound Edition), Volume 162 (2016), Part 4]
[House]
[Pages 5079-5081]
[From the U.S. Government Publishing Office, www.gpo.gov]




          FLOOD INSURANCE MARKET PARITY AND MODERNIZATION ACT

  Mr. ROSS. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 2901) to amend the Flood Disaster Protection Act of 1973 to 
require that certain buildings and personal property be covered by 
flood insurance, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2901

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Flood Insurance Market 
     Parity and Modernization Act''.

     SEC. 2. PRIVATE FLOOD INSURANCE.

       (a) Mandatory Purchase Requirement.--
       (1) Amount and term of coverage.--Section 102 of the Flood 
     Disaster Protection Act of 1973 (42 U.S.C. 4012a) is amended 
     by striking ``Sec. 102. (a)'' and all that follows through 
     the end of subsection (a) and inserting the following:
       ``Sec. 102. (a) Amount and Term of Coverage.--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: Provided, That the amount of flood insurance (1) 
     in the case of Federal flood insurance, is at least equal to 
     the development or project cost of the building, mobile home, 
     or personal property (less estimated land cost), the 
     outstanding principal balance of the loan, or the maximum 
     limit of Federal flood insurance coverage made available with 
     respect to the particular type of property, whichever is 
     less; or (2) in the case of private flood insurance, is at 
     least equal to the development or project cost of the 
     building, mobile home, or personal property (less estimated 
     land cost), the outstanding principal balance of the loan, or 
     the maximum limit of Federal flood insurance coverage made 
     available with respect to the particular type of property, 
     whichever is less: Provided further, 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.''.
       (2) Requirement for mortgage loans.--Subsection (b) of 
     section 102 of the Flood Disaster Protection Act of 1973 (42 
     U.S.C. 4012a(b)) is amended--
       (A) by striking the subsection designation and all that 
     follows through the end of paragraph (5) and inserting the 
     following:
       ``(b) Requirement for Mortgage Loans.--
       ``(1) Regulated lending institutions.--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 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: Provided, That the amount of flood insurance 
     (A) in the case of Federal flood insurance, is at least equal 
     to the outstanding principal balance of the loan or the 
     maximum limit of Federal flood insurance coverage made 
     available with respect to the particular type of property, 
     whichever is less; or (B) in the case of private flood 
     insurance, is at least equal to the outstanding principal 
     balance of the loan or the maximum limit of Federal flood 
     insurance coverage made available with respect to the 
     particular type of property, whichever is less.
       ``(2) Federal agency lenders.--
       ``(A) In general.--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 accordance with paragraph (1). 
     Each Federal agency lender may 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).
       ``(B) Requirement to accept flood insurance.--Each Federal 
     agency lender shall accept flood insurance as satisfaction of 
     the flood insurance coverage requirement under subparagraph 
     (A) if the flood insurance coverage meets the requirements 
     for coverage under that subparagraph.
       ``(3) Government-sponsored enterprises for housing.--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 or guaranteed 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). The 
     Federal National Mortgage Association and the Federal Home 
     Loan Mortgage Corporation shall accept flood insurance as 
     satisfaction of the flood insurance coverage requirement 
     under paragraph (1) if the flood insurance coverage provided 
     meets the requirements for coverage under that paragraph and 
     any requirements established by the Federal National Mortgage 
     Association or the Federal Home Loan Corporation, 
     respectively, relating to the financial strength of private 
     insurance companies from which the Federal National Mortgage 
     Association or the Federal Home Loan Mortgage Corporation 
     will accept private flood insurance, provided that such 
     requirements shall not affect or conflict with any State law, 
     regulation, or procedure concerning the regulation of the 
     business of 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.--Except as otherwise specified, 
     any reference to flood insurance in this section shall be 
     considered to include Federal flood insurance and private 
     flood insurance. 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 strength of private insurance companies from which 
     the entity or agency will accept private flood insurance, 
     provided that such requirements shall not affect or conflict 
     with any State law, regulation, or procedure concerning the 
     regulation of the business of insurance.''; and
       (B) by striking paragraph (7) and inserting the following 
     new paragraph:
       ``(7) Definitions.--In this section:
       ``(A) Flood insurance.--The term `flood insurance' means--
       ``(i) Federal flood insurance; and
       ``(ii) private flood insurance.
       ``(B) 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.).

[[Page 5080]]

       ``(C) Private flood insurance.--The term `private flood 
     insurance' means an insurance policy that--
       ``(i) is issued by an insurance company that is--

       ``(I) 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
       ``(II) eligible as a nonadmitted insurer to provide 
     insurance in the home State of the insured, in accordance 
     with sections 521 through 527 of the Dodd-Frank Wall Street 
     Reform and Consumer Protection Act (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.
       ``(D) 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.''.
       (b) Effect of Private Flood Insurance Coverage on 
     Continuous Coverage Requirements.--Section 1308 of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4015) is 
     amended by adding at the end the following:
       ``(n) Effect of Private Flood Insurance Coverage on 
     Continuous Coverage Requirements.--For purposes of applying 
     any statutory, regulatory, or administrative continuous 
     coverage requirement, including under section 1307(g)(1), the 
     Administrator shall consider any period during which a 
     property was continuously covered by private flood insurance 
     (as defined in section 102(b)(7) of the Flood Disaster 
     Protection Act of 1973 (42 U.S.C. 4012a(b)(7))) to be a 
     period of continuous coverage.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida (Mr. Ross) and the gentleman from Massachusetts (Mr. Capuano) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Florida.


                             General Leave

  Mr. ROSS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. ROSS. Mr. Speaker, I yield myself such time as I may consume.
  Providing American homeowners and businessowners more affordable 
consumer options in the flood insurance marketplace has been one of my 
top priorities since I was elected to Congress to represent central 
Florida and the Tampa Bay region in our Nation's Capital. Private 
competition in this market will lead to greater innovation and more 
affordable and comprehensive policies for consumers.
  We have seen numerous floods devastating communities across the 
country in recent years, most recently in Houston, and last August in 
my very own congressional district. Every State and every congressional 
district is at risk for flooding. With hurricane season just a few 
weeks away from beginning, it is time for Congress to take action to 
benefit and better protect consumers.
  Unfortunately, regulatory barriers and the bias of regulators 
favoring National Flood Insurance Program policies have prevented the 
development of a private flood insurance marketplace. This was not the 
intention of the Biggert-Waters Act. Rather, it was an unintended 
consequence.
  With that in mind, I worked with my colleague from across the aisle, 
Representative Patrick Murphy, to introduce H.R. 2901, the Flood 
Insurance Market Parity and Modernization Act. This bipartisan 
legislation will remove the unnecessary regulatory barriers and require 
Federal agencies to accept private flood insurance that complies with 
the laws and regulations of the State of an insured property.
  Under current law, consumers are limited to the coverage options 
provided by the NFIP. For example, an NFIP policy only covers up to 
$250,000 of damages related to a residential home. In addition, an NFIP 
policy does not cover a homeowner's living expenses, such as temporary 
housing, if they are displaced as a result of a flood. In the case of a 
business, an NFIP policy does not provide coverage for the financial 
losses suffered by businesses as a result of a flood.
  While the NFIP is limited in what their policies can cover, the 
private sector is not. The private sector will provide more incentives 
for property owners to invest in mitigation and resiliency. Ultimately, 
this increased emphasis on mitigation will benefit homeowners and 
taxpayers alike. Studies have shown that, for every $1 of investment in 
mitigation, communities see a savings of up to $4 in government-funded 
disaster relief.
  I want to take a moment and thank Chairman Hensarling and my 
subcommittee chair, Blaine Luetkemeyer, for their support of this 
legislation and their leadership on this important issue. I also want 
to thank the ranking member, Maxine Waters, for working with my staff 
and me through this entire process.
  This legislation is supported by a number of stakeholders, from the 
Realtors, the National Association of Insurance Commissioners, to a 
broad coalition of taxpayer advocates, environmental groups, housing 
organizations, and mitigation advocates.
  On March 2, 2016, the legislation passed out of the House Financial 
Services Committee by a vote of 53-0. With such strong bipartisan 
support, I am encouraged Congress is taking such an important step on 
behalf of consumers not only in Florida, but across the country.
  I urge my colleagues on both sides of the aisle to join me in passing 
this commonsense, bipartisan legislation that will encourage the 
expansion of a well-regulated, more affordable private flood insurance 
option for homeowners.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CAPUANO. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of this bill, H.R. 2901, and I want to 
congratulate Mr. Ross and Mr. Murphy for coming up with a piece of 
bipartisan legislation.
  I want to be clear that the issues surrounding flood insurance are 
difficult and complicated, and there are differences of opinion as to 
how much of a role private insurance can play. This bill threads that 
needle.
  This bill says we all agree that there is more role for private 
insurance and we should remove any barriers that might be there so that 
people can be better served and have better competition. I think this 
bill does a pretty good job doing that.
  I don't think private insurance is ever going to--I am not sure that 
is possible, but it is a different debate--take the place of national 
flood insurance. And we are working on that. Mr. Ross has been a great 
leader on that, as has Mr. Murphy. I want to thank them and 
congratulate them, and I look forward to working with them further to 
do more as we move forward.
  This particular bill is one good step in the right direction, and I 
want to congratulate the two authors and thank them for their 
leadership. I look forward to supporting this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ROSS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Royce).
  Mr. ROYCE. Mr. Speaker, I rise today in support of this legislation, 
the Flood Insurance Market Parity and Modernization Act.
  Since its inception back in 1968, the National Flood Insurance 
Program was never intended to cover policies that the private sector 
was able and willing to underwrite. In fact, one stated goal for the 
program was ``the Federal Government would create an opportunity for 
private industry to obtain . . . experience in operating a flood 
insurance program . . . and that sometime in the future, the program 
could become an all-private program.''
  Nearly 50 years have passed and, to no one's surprise, private sector 
flood insurance risk modeling and analytics have dramatically improved.
  While this House may not be ready to take up complete privatization, 
it is time to provide a role for the private market to underwrite 
primary flood insurance policies. Passage of this bipartisan bill means 
more consumer choice, more market competition, and more product 
information. Consumers, for the first time, will be able to shop for

[[Page 5081]]

a flood policy that fits their particular needs.
  This bill also has the added benefit of decreasing the aggregate 
flood insurance exposure to the Federal Government and decreasing the 
potential for a future taxpayer-backed bailout, which is very, very 
important.
  So I commend both gentlemen for their work on this important issue, 
and I urge my colleagues to support this legislation.
  Mr. ROSS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from New Mexico (Mr. Pearce), my good friend.
  Mr. PEARCE. Mr. Speaker, I thank the gentleman from Florida for 
yielding time to me.
  You might wonder: Why is someone from New Mexico even speaking about 
flood insurance problems? We get about 9 inches of rain a year in my 
district. Also, it is the high desert. They call it that because we 
begin at around 3,500 feet of elevation and work up from there.
  The way the National Flood Insurance Program has worked out in the 
past is that people are required, because they happen to be in a flood 
plain--and we are not dealing with whether or not they should be in a 
flood plain; we are dealing with the fact that they get no competitive 
bids--to only get the one government-size bid. And that is never very 
functional.
  So the most egregious circumstance that exists is one that one of my 
constituents mentioned. He said: I live at the top of a 7,000-foot 
mountain. The water is down here at about 4,000 feet, 3,000 feet below 
me, and I have to buy flood insurance.
  Well, the fact that he has to buy flood insurance is egregious 
enough, but the fact that he has to live and pay premiums based on the 
actuary standards that might exist in Florida is the egregious part. 
What it does is keeps houses from selling and people from being able to 
buy houses in New Mexico because they have been defined as being in a 
flood plain.

                              {time}  1530

  If the market were out there, there would be companies that say: 
Wait. That guy is never going to flood. I can charge him a minute 
amount and still make money on his policy.
  Yet, nothing like that exists. So we find ourselves paying to the 
same standards as the people in Florida pay when we get 9 inches of 
rain a year.
  So I really appreciate the gentleman's attempt to bring some 
competition into the workplace. I appreciate Mr. Capuano's support of 
the bill, Mr. Murphy's underlying co-sponsorship.
  I am here to support heartily H.R. 2901, the Flood Insurance Market 
Parity and Modernization Act.
  Mr. CAPUANO. Mr. Speaker, you learn something new every day. I am one 
of those people. I never expected a guy from New Mexico to be speaking 
on the flood insurance bill.
  I thank Mr. Pearce for educating me even further.
  Mr. Speaker, I yield back the balance of my time.
  Mr. ROSS. Mr. Speaker, I want to thank my colleague from 
Massachusetts (Mr. Capuano) for his efforts and leadership in this 
regard.
  Look, this isn't the be-all-to-end-all, but it is the best first step 
that we can have as a Congress to make sure that we give our consumers 
affordable options in flood insurance.
  As we address the reauthorization of the Biggert-Waters Act next 
year, this will provide a bridge for bringing the private sector back 
into the market to show that they are willing to assume some of this 
risk to the benefit of the consumers.
  There are quite a few groups out there that support this particular 
legislation. To name a few, that includes the Reinsurance Association 
of America, National Multifamily Housing Council, National Apartment 
Association, National Taxpayers Union, American Insurance Association, 
National Association of Realtors, Mortgage Bankers Association, and R 
Street.
  Mr. Speaker, I urge my colleagues on both sides of the aisle to join 
us and overwhelmingly pass this bill.
  I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Hill). The question is on the motion 
offered by the gentleman from Florida (Mr. Ross) that the House suspend 
the rules and pass the bill, H.R. 2901, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. ROSS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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