[House Report 115-255]
[From the U.S. Government Publishing Office]


115th Congress   }                                    {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                    {       115-255

======================================================================



 
                TAXPAYER EXPOSURE MITIGATION ACT OF 2017

                                _______
                                

 July 25, 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. 2246]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 2246) to repeal the mandatory flood insurance 
coverage requirement for commercial properties located in flood 
hazard areas and to provide for greater transfer of risk under 
the National Flood Insurance Program to private capital and 
reinsurance markets, 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.

  This Act may be cited as the ``Taxpayer Exposure Mitigation Act of 
2017''.

SEC. 2. OPT-OUT OF MANDATORY COVERAGE REQUIREMENT FOR COMMERCIAL 
                    PROPERTIES.

  (a) Amendments to Flood Disaster Protection Act of 1973.--The Flood 
Disaster Protection Act of 1973 is amended--
          (1) in section 3(a) (42 U.S.C. 4003(a))--
                  (A) in paragraph (10), by striking ``and'' at the 
                end;
                  (B) in paragraph (11), by striking the period at the 
                end and inserting ``; and''; and
                  (C) by adding at the end the following new paragraph:
          ``(12) `residential improved real estate' means improved real 
        estate that--
                  ``(A) is primarily used for residential purposes, as 
                defined by the Federal entities for lending regulation; 
                and
                  ``(B) secures financing or financial assistance 
                provided through a federally related single family loan 
                progam, as defined by the Federal entities for lending 
                regulation.''; and
          (2) in section 102 (42 U.S.C. 4012a)--
                  (A) in subsection (b)--
                          (i) in paragraph (1)(A)--
                                  (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                  (II) by inserting ``residential'' 
                                before ``building or mobile home'';
                          (ii) in paragraph (2)--
                                  (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                  (II) by inserting ``residential'' 
                                before ``building or mobile home''; and
                          (iii) in paragraph (3)--
                                  (I) in subparagraph (A), by inserting 
                                ``residential'' before ``improved real 
                                estate''; and
                                  (II) in the matter after and below 
                                subparagraph (B), by inserting 
                                ``residential'' before ``building or 
                                mobile home'';
                  (B) in subsection (c)(3), by striking ``, in the case 
                of any residential property, for any structure that is 
                a part of such property'' and inserting ``for any 
                structure that is part of a residential property'';
                  (C) in subsection (e)--
                          (i) in paragraph (1)--
                                  (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                  (II) by inserting ``residential'' 
                                before ``building or mobile home'' each 
                                place such term appears; and
                          (ii) in paragraph (5)--
                                  (I) in subparagraph (A)--
                                          (aa) by inserting 
                                        ``residential'' before 
                                        ``improved real estate'' each 
                                        place such term appears; and
                                          (bb) by inserting 
                                        ``residential'' before 
                                        ``building or mobile home'' 
                                        each place such term appears;
                                  (II) in subparagraph (B), by 
                                inserting ``residential'' before 
                                ``building or mobile home'' each place 
                                such term appears; and
                                  (III) in subparagraph (C), by 
                                inserting ``residential'' before 
                                ``building or mobile home''; and
                  (D) in subsection (h)--
                          (i) by inserting ``residential'' before 
                        ``improved real estate'' each place such term 
                        appears; and
                          (ii) in the matter preceding paragraph (1), 
                        by inserting ``residential'' before ``building 
                        or mobile home''.
  (b) Amendments to National Flood Insurance Act of 1968.--The National 
Flood Insurance Act of 1968 is amended--
          (1) in section 1364(a) (42 U.S.C. 4104a(a))--
                  (A) in paragraph (1), by inserting ``residential'' 
                before ``improved real estate'';
                  (B) in paragraph (2), by inserting ``residential'' 
                before ``improved real estate''; and
                  (C) in paragraph (3)(A), by inserting ``residential'' 
                before ``building'';
          (2) in section 1365 (42 U.S.C. 4104b)--
                  (A) in subsection (a)--
                          (i) by inserting ``residential'' before 
                        ``improved real estate''; and
                          (ii) by inserting ``residential'' before 
                        ``building'';
                  (B) in subsection (b)(2)--
                          (i) by inserting ``residential'' before 
                        ``building'' each place such term appears; and
                          (ii) by inserting ``residential'' before 
                        ``improved real estate'' each place such term 
                        appears;
                  (C) in subsection (d), by inserting ``residential'' 
                before ``improved real estate'' each place such term 
                appears; and
                  (D) in subsection (e)--
                          (i) by inserting ``residential'' before 
                        ``improved real estate''; and
                          (ii) by inserting ``residential'' before 
                        ``building'' each place such term appears; and
          (3) in section 1370 (42 U.S.C. 4121)--
                  (A) in paragraph (8), by inserting ``residential'' 
                before ``improved real estate'';
                  (B) by redesignating paragraphs (14) and (15) as 
                paragraphs (15) and (16), respectively; and
                  (C) by inserting after paragraph (13) the following 
                new paragraph:
          ``(14) the term `residential improved real estate' means 
        improved real estate that--
                  ``(A) is primarily used for residential purposes, as 
                defined by the Federal entities for lending regulation; 
                and
                  ``(B) secures financing or financial assistance 
                provided through a federally related single family loan 
                progam, as defined by the Federal entities for lending 
                regulation;''.
  (c) Rule of Construction.--This section and the amendments made by 
this section may not be construed to prohibit the Administrator of the 
Federal Emergency Management Agency from offering flood insurance 
coverage under the National Flood Insurance Program for eligible non-
residential properties, other residential multifamily properties, or 
structures financed with commercial loans, or to prohibit the purchase 
of such coverage for such eligible properties.

SEC. 3. RISK TRANSFER REQUIREMENT.

  Subsection (e) of section 1345 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4081(e)) is amended--
          (1) by striking ``(e) Risk Transfer.--The Administrator'' and 
        inserting the following:
  ``(e) Risk Transfer.--
          ``(1) Authority.--The Administrator''; and
          (2) by adding at the end the following new paragraph:
          ``(2) Required risk transfer coverage.--
                  ``(A) Requirement.--Not later than the expiration of 
                the 18-month period beginning upon the date of the 
                enactment of this paragraph and at all times 
                thereafter, the Administrator shall annually cede a 
                portion of the risk of the flood insurance program 
                under this title to the private reinsurance or capital 
                markets, or any combination thereof, and at rates and 
                terms that the Administrator determines to be 
                reasonable and appropriate, in an amount that--
                          ``(i) is sufficient to maintain the ability 
                        of the program to pay claims; and
                          ``(ii) manages and limits the annual exposure 
                        of the flood insurance program to flood losses 
                        in accordance with the probable maximum loss 
                        target established for such year under 
                        subparagraph (B).
                  ``(B) Probable maximum loss target.--The 
                Administrator shall for each fiscal year, establish a 
                probable maximum loss target for the national flood 
                insurance program that shall be the maximum probable 
                loss under the national flood insurance program that is 
                expected to occur in such fiscal year.
                  ``(C) Considerations.--In establishing the probable 
                maximum loss target under subparagraph (B) for each 
                fiscal year and carrying out subparagraph (A), the 
                Administrator shall consider--
                          ``(i) the probable maximum loss targets for 
                        other United States public natural catastrophe 
                        insurance programs, including as State wind 
                        pools and earthquake programs;
                          ``(ii) the probable maximum loss targets of 
                        other risk management organizations, including 
                        the Federal National Mortgage Association and 
                        the Federal Home Loan Mortgage Corporation;
                          ``(iii) catastrophic, actuarial, and other 
                        appropriate data modeling results of the 
                        national flood insurance program portfolio;
                          ``(iv) the availability of funds in the 
                        National Flood Insurance Fund established under 
                        section 1310 (42 U.S.C. 4017);
                          ``(v) the availability of funds in the 
                        National Flood Insurance Reserve Fund 
                        established under section 1310A (42 U.S.C. 
                        4017a);
                          ``(vi) the availability of borrowing 
                        authority under section 1309 (42 U.S.C. 4016);
                          ``(vii) the ability of the Administrator to 
                        repay outstanding debt;
                          ``(viii) amounts appropriated to the 
                        Administrator to carry out the national flood 
                        insurance program;
                          ``(ix) reinsurance, capital markets, 
                        catastrophe bonds, collateralized reinsurance, 
                        resilience bonds, and other insurance-linked 
                        securities, and other risk transfer 
                        opportunities; and
                          ``(x) any other factor the Administrator 
                        determines appropriate.
                  ``(D) Multi-year contracts.--Nothing in this 
                paragraph may be construed to prevent or prohibit the 
                Administrator from complying with the requirement under 
                subparagraph (A) regarding ceding risk through 
                contracts having a duration longer than one year.''.

SEC. 4. COMMUNITY FLOOD MAPS.

  (a) Technical Mapping Advisory Council.--Section 100215 of the 
Biggert-Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 4101a) is 
amended--
          (1) in subsection (c)--
                  (A) in paragraph (5)(B), by striking ``and'' at the 
                end;
                  (B) by redesignating paragraph (6) as paragraph (9); 
                and
                  (C) by inserting after paragraph (5) the following 
                new paragraphs:
          ``(6) recommend to the Administrator methods or actions to 
        make the flood mapping processes more efficient;
          ``(7) recommend to the Administrator methods or actions to 
        minimize any cost, data, and paperwork requirements of the 
        flood mapping processes;
          ``(8) assist communities, and in particular smaller 
        communities, in locating the resources required to participate 
        in the development of flood elevations and flood hazard area 
        designations; and''; and
          (2) by adding at the end the following new subsection:
  ``(m) Community Flood Maps.--
          ``(1) Standards and procedures.--In addition to the other 
        duties of the Council under this section, not later than the 
        expiration of the 12-month period beginning on the date of the 
        enactment of this subsection, the Council shall recommend to 
        the Administrator standards and requirements for chief 
        executive officers, or entities designated by chief executive 
        officers, of States and communities participating in the 
        National Flood Insurance Program to use in mapping flood 
        hazards located in States and communities that choose to 
        develop alternative maps to the flood insurance rate maps 
        developed by the Agency. The recommended standards and 
        requirements shall include procedures for providing 
        notification and appeal rights to individuals within the 
        communities of the proposed flood elevation determinations.
          ``(2) Exemption from rulemaking.--Until such time as the 
        Administrator promulgates regulations implementing paragraph 
        (1) of this subsection, the Administrator may, notwithstanding 
        any other provision of law, adopt policies and procedures 
        necessary to implement such paragraphs without undergoing 
        notice and comment rulemaking and without conducting regulatory 
        analyses otherwise required by statute, regulation, or 
        executive order.''.
  (b) FEMA Identification of Flood-prone Areas.--Subsection (a) of 
section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101(a)) is amended--
          (1) in paragraph (2), by striking the period at the end and 
        inserting ``; and'';
          (2) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A), and (B), respectively, and realigning such subparagraphs 
        so as to be indented 4 ems from the left margin;
          (3) by striking ``is authorized to consult'' and inserting 
        the following: ``is authorized--
          ``(1) to consult'';
          (4) by adding at the end the following new paragraph:
          ``(2) to receive proposed alternative maps from communities 
        developed pursuant to standards and requirements recommended by 
        the Technical Mapping Advisory Council, as required by section 
        100215(m) of the Biggert-Waters Flood Insurance Reform Act of 
        2012 (42 U.S.C. 4101a(m)) and adopted by the Administrator as 
        required by section 100216(c)(3) of such Act (42 U.S.C. 
        4101b(c)(3)), so that the Administrator may--
                  ``(A) publish information with respect to all flood 
                plain areas, including coastal areas located in the 
                United States, which have special flood hazards, and
                  ``(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 of these areas until the date 
                specified in section 1319.''.
  (c) National Flood Mapping Program.--Section 100216 of the Biggert-
Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 4101b) is 
amended--
          (1) in subsection (a), by inserting ``prepared by the 
        Administrator, or by a community pursuant to section 1360(a)(2) 
        of the National Flood Insurance Act of 1968,'' after ``Program 
        rate maps'';
          (2) in subsection (c)--
                  (A) in paragraph (1)(B), by striking ``and'' at the 
                end;
                  (B) in paragraph (2)(C), by striking the period at 
                the end and inserting a semicolon; and
                  (C) by adding at the end the following new 
                paragraphs:
          ``(3) establish and adopt standards and requirements for 
        development by States and communities of alternative flood 
        insurance rate maps to be submitted to the Administrator 
        pursuant to section 1360(a)(2) of the National Flood Insurance 
        Act of 1968, taking into consideration the recommendations of 
        the Technical Mapping Advisory Council made pursuant to section 
        100215(m) of this Act (42 U.S.C. 4101a(m)); and
          ``(4) in the case of proposed alternative maps received by 
        the Administrator pursuant to such section 1360(a)(2), not 
        later than the expiration of the 6-month period beginning upon 
        receipt of such proposed alternative maps--
                  ``(A) determine whether such maps were developed in 
                accordance with the standards and requirements adopted 
                pursuant to paragraph (3) of this subsection; and
                  ``(B) approve or disapprove such proposed maps for 
                use under National Flood Insurance Program.''; and
          (3) in subsection (d)(1), by inserting ``maximum'' before 
        ``30-day period'' each place such term appears in subparagraphs 
        (B) and (C).

                          Purpose and Summary

    Introduced on April 28, 2017, by Representative Blaine 
Luetkemeyer, H.R. 2246, the ``Taxpayer Exposure Mitigation Act 
of 2017'', amends the Flood Disaster Protection Act of 1973 to 
repeal the mandatory flood insurance coverage requirement for 
commercial properties located in flood hazard areas and to 
provide for greater transfer of risk under the National Flood 
Insurance Program to private capital and reinsurance markets, 
and for other purposes.

                  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 5.1 million 
policyholders across the country. In exchange for premiums paid 
by policholders, 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 relating to 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. 2246 addresses concerns that the NFIP's fiscal 
condition is unsustainable and recognizes that further reforms 
are needed to optimize efficiency and instill market 
discipline. H.R. 2246 would require the FEMA Administrator to 
annually cede a portion of the NFIP's risk to the private 
reinsurance or capital markets in an amount determined by the 
Administrator that is sufficient to maintain the program's 
ability to pay claims, and limit exposure to flood loss. H.R. 
2246 would also provide the FEMA Administrator the ability to 
enter into multi-year contracts for risk transfers.
    Historically, the NFIP had been limited to using flood 
insurance premiums, available surplus, borrowing capacity from 
the U.S. Treasury, and direct appropriations from Congress to 
pay claims. In 2012, the Biggert-Waters Flood Insurance Reform 
Act clarified FEMA's authority to secure reinsurance from the 
private reinsurance and capital markets. In fact, in January 
2017, FEMA, in an attempt to understand the reinsurance market, 
acquired approximately $1 billion in reinsurance coverage to 
insure against 26 percent of losses between $4 billion and $8 
billion. H.R. 2246 provides more clarity and guidance on how 
and when FEMA would provide for risk transfers that maximize 
FEMA's resources and protect taxpayers from catastrophic 
losses. H.R. 2246 would permit several types of risk transfers, 
including traditional reinsurance, catastrophe bonds, 
collateralized reinsurance, resilience bonds, insurance-linked 
securities and other types of risk transfers that may be 
created in the future.
    In recognition of the inefficiencies of the NFIP in the 
commercial and multifamily properties, H.R. 2246 would 
eliminate the mandatory purchase requirement for commercial and 
multifamily properties, while preserving the eligibility of 
such properties to voluntarily purchase NFIP coverage if they 
so choose. Today, commercial and multifamily properties, 
oftentimes valued many times over the maximum $500,000 NFIP 
coverage amount, are forced to purchase both NFIP and excess 
coverage. H.R. 2246 would rationalize the flood insurance 
market for commercial and multifamily properties by deferring 
to the lender to determine whether the loan's collateral will 
be required to be covered by flood insurance. This 
rationalization would save costs for commercial and multifamily 
properties by shedding NFIP regulatory requirements that are 
inconsistent with insurance market practices.
    H.R. 2246, however, would ensure that commercial and 
multifamily properties have access to flood insurance by making 
it permissive for these properties to purchase NFIP policies. 
As a result, commercial and multifamily properties can opt for 
policies that better fit their coverage requirements such as 
purchasing umbrella policies for a group of properties.
    In recognition of the challenges that plagued the 
development of timely flood rate risk maps, H.R. 2246 
authorizes alternative community flood maps, developed and 
financed by local governments. Today, FEMA is required to 
review each community, once every five years, to determine 
whether re-mapping is necessary. In some cases, however, 
remapping does not occur for over 10 years, thereby leaving the 
community subjected to outdated maps. H.R. 2246 would require 
the Technical Mapping Advisory Council (TMAC) to develop and 
make recommendations to the FEMA Administrator to establish a 
set of standards, guidelines, and procedures for State and 
local governments to develop alternatives maps to the NFIP's 
rate maps.
    Subject to certification and approval by the FEMA 
Administrator, these community maps would be the flood 
insurance rate map for the purposes of the NFIP, with respect 
to the area covered on the map. Community maps would be an 
avenue for those communities, who desire re-mapping of their 
areas on a more frequent basis or elect to use their local 
resources to use updated technology, often not available to 
FEMA, to produce community maps that provide more detailed data 
than provided by the agency.

                                Hearings

    The Committee on Financial Services' Subcommittee on 
Housing & Insurance held two hearings examining matters 
relating to H.R. 2246 on March 9, 2017 and March 16, 2017. The 
Committee on Financial Services held a hearing examining 
matters relating to H.R. 2246 on June 7, 2017.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
June 21, 2017 to consider H.R. 2246. The Committee ordered H.R. 
2246 to be reported favorably to the House, as amended, by a 
recorded vote of 36 ayes to 24 nays (Recorded vote no. FC-67), 
a quorum being present.

                            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. An 
amendment offered by Mr. Luetkemeyer was agreed to by voice 
vote. The sole recorded vote was on a motion by Chairman 
Hensarling to report the bill favorably to the House, as 
amended. The motion was agreed to by a recorded vote of 36 ayes 
to 24 nays (Recorded vote no. FC-67), a quorum being present.


                      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. 2246 
will benefit taxpayers and policyholders by repealing the 
mandatory flood insurance coverage requirement for commercial 
properties located in flood hazard areas and providing for 
greater transfer of risk under the National Flood Insurance 
Program to private capital and reinsurance markets.

   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, July 24, 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. 2246, the Taxpayer 
Exposure Mitigation Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese.
            Sincerely,
                                            Mark P. Hadley,
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 2246--Taxpayer Exposure Mitigation Act of 2017

    Summary: H.R. 2246 would eliminate the requirement for 
commercial properties in flood zones to have flood insurance if 
the properties are financed by a federally regulated lending 
institution, or a federal lender. The bill also would require 
the Federal Emergency Management Agency (FEMA) to acquire 
coverage for a portion of the National Flood Insurance 
Program's (NFIP) potential cost from the private reinsurance or 
capital markets annually. Finally, H.R. 2246 would require FEMA 
to permit localities to develop and submit their own maps of 
local flood risks for FEMA's review and approval for use in 
determining NFIP insurance rates.
    The cost to enact H.R. 2246 is uncertain and would depend 
on the number of commercial properties that drop NFIP coverage. 
CBO estimates that enacting H.R. 2246 would increase direct 
spending by $325 million over the 2018-2027 period, although 
costs could be significantly higher or lower. CBO also 
estimates that implementing the bill would cost $40 million 
over the 2018-2022 period, assuming appropriation of the 
necessary amounts.
    Because enacting H.R. 2246 would affect direct spending, 
pay-as-you-go procedures apply. Enacting the legislation would 
not affect revenues.
    CBO estimates that enacting H.R. 2246 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. 2246 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 2246 is shown in the following table. 
The costs of this legislation fall within budget function 450 
(community and regional development).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2017    2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2017-2022  2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              INCREASES IN DIRECT SPENDING
 
Estimated Budget Authority................       0       5       5      15      30      40      40      45      45      50      50        95        325
Estimated Outlays.........................       0       5       5      15      30      40      40      45      45      50      50        95        325
 
                                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level.............       0       1      10      10      10      10      10      10      10      10      10        41         91
Estimated Outlays.........................       0       1       9      10      10      10      10      10      10      10      10        40         90
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
2246 will be enacted near the end of fiscal year 2017 and that 
the necessary amounts will be appropriated for each fiscal 
year.

Background

    Under current law, residential and commercial property 
owners can choose to buy flood insurance through the NFIP. 
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.
    Mandatory Purchase Requirement. 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, government sponsored 
enterprise for housing, or 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 coverage from a private carrier or the NFIP at their 
discretion. The level of compliance with this requirement is 
unknown.
    Currently, there are about 5 million properties insured by 
the NFIP. Of those properties, about 340,000 (or 6.7 percent) 
are commercial properties, CBO estimates. How many of those 
properties are subject to the mandatory purchase requirement is 
unknown because the properties' lending institutions are 
required to enforce the requirement and aggregate data on 
properties subject to that requirement do not exist.
    Premiums. Most properties, about 80 percent, are charged a 
premium based on FEMA's estimate of the expected cost to insure 
those properties against damages caused by flooding, what CBO 
calls actuarial premiums. The remaining 20 percent of NFIP 
insured properties are charged premiums that are lower than the 
expected cost of flood damage, what CBO calls subsidized 
premiums. In 2016, collections from actuarial and subsidized 
premiums totaled about $3.5 billion. In 2017, the average NFIP 
premium for commercial properties is about $2,400.
    Additional Collections. All NFIP policyholders also pay a 
Reserve Fund Assessment (RFA) equal to 15 percent of their 
premium and a surcharge equal to $25 for policies that cover 
primary residences and $250 for policies that cover nonprimary 
residences or commercial properties. Both the RFA and surcharge 
are deposited into the NFIP Reserve Fund and are available to 
pay policyholder claims if amounts in the NFIP are 
insufficient. In 2016, a total of $919 million was deposited 
into the Reserve Fund. In 2017, the average RFA and surcharge 
was about $600 for commercial properties.
    Reinsurance. The NFIP is also authorized to purchase 
reinsurance from private reinsurance or capital markets. 
Reinsurance is a mechanism by which a primary insurer, like the 
NFIP, can guard against catastrophic losses by paying a premium 
to one or multiple private entities that then assume the 
liability to pay certain claims at an agreed upon level of 
losses. In 2017, the NFIP purchased about $1 billion of 
reinsurance for a single flood with insurable claims between $4 
billion and $8 billion. The NFIP paid a premium of $150 million 
for that reinsurance and the coverage will last through January 
1, 2018.

Direct spending

    The bill would eliminate the requirement to buy flood 
insurance for commercial properties located in an SFHA and 
would require FEMA to purchase reinsurance in the private 
market.
    Commercial Property. Using a database of NFIP policy 
information, CBO estimates that in 2017 there are approximately 
230,000 commercial structures in SFHAs with NFIP policies, of 
which 40 percent pay subsidized premiums. FEMA does not track 
which NFIP insured properties are subject to that mandatory 
purchase requirement, but CBO expects the majority (about 75 
percent) of those properties have a loan from a federally 
regulated lending institution. Thus, CBO estimates that in 2017 
approximately 170,000 commercial properties are subject to the 
requirement to purchase flood insurance.
    In 2014, the Government Accountability Office (GAO) 
reported that many property owners do not recognize the 
potential damage that may be caused to their property by a 
flood and underestimate the risk of a flood to their 
property.\1\ While CBO cannot determine how many commercial 
properties subject to the mandatory purchase requirement have 
NFIP coverage solely because they are required to, we expect 
that many such property owners underestimate their flood risk. 
Owners of commercial property face NFIP premiums and fees that 
average about $3,000 per year. CBO expects that within a few 
years about half of the owners of commercial properties 
currently subject to the mandatory purchase requirement would 
discontinue buying flood insurance under H.R. 2246. CBO is 
unaware of any empirical information about the propensity of 
individuals to drop mandated insurance requirements when given 
the opportunity. However, because many property owners 
underestimate the risks they face from flooding, CBO expects 
that a significant number of commercial policyholders would 
gradually drop coverage if they were not required to have it.
---------------------------------------------------------------------------
    \1\See Government Accountability Office, Overview of GAO's Past 
Work on the National Flood Insurance Programs (May 2014).
---------------------------------------------------------------------------
    Based on an analysis of information provided by FEMA on the 
premiums, surcharges, other assessments paid by commercial 
property owners, and the expected cost to insure them, CBO 
estimates that enacting this provision would increase net 
direct spending by $325 million over the 2018-2027 period from 
the loss of RFA and surcharge collections from commercial 
properties that would have been paying actuarial premiums. That 
decrease in collections would be partially offset by fewer 
claims resulting from fewer policyholders. Subsidized policy 
holders that elected to drop NFIP coverage would reduce net 
spending because the expected cost of those policies is greater 
than the premiums paid for the coverage.
    CBO's estimated costs are uncertain and costs could be 
significantly greater or smaller than we have estimated. CBO is 
confident that some commercial property policyholders would 
drop NFIP coverage under H.R. 2246 at a net cost to the 
program. However, without basic information about which 
policyholders are required to maintain coverage, this estimate 
has a wide range of uncertainty.
    Reinsurance. Section 3 of H.R. 2246 would require the NFIP 
to transfer a portion of the program's risk to private 
reinsurance or capital markets at least once per year in a 
manner that would ensure that enough funds are in the NFIP to 
cover claims in a typical year. Under current law, FEMA plans 
to purchase additional reinsurance for the NFIP after the 
expiration of the current coverage in 2018. Because FEMA 
intends to continue purchasing reinsurance in future years, CBO 
estimates that enacting this provision would have no 
significant effect the amount of reinsurance coverage the 
agency buys or on NFIP spending.

Spending subject to appropriation

    Section 4 of H.R. 2246 would direct FEMA to create 
standards and requirements for states and localities that 
choose to develop alternative maps to the Flood Insurance Rate 
Maps created by FEMA. The section also would require FEMA to 
determine within six months of receiving any proposed 
alternative maps from states or localities whether to approve 
such maps for NFIP rate setting purposes.
    Based on an analysis of information provided by FEMA, CBO 
estimates that implementing this section would cost $1 million 
in 2018 to establish administrative procedures to review and 
approve community flood maps and $10 million each year 
thereafter to review, analyze, and make a determination on 
community flood maps that would be submitted by local 
jurisdictions around the country. Such spending would be 
subject to appropriation. In 2017, $178 million was 
appropriated for FEMA's flood mapping and related activities.
    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 that are subject to those 
pay-as-you-go procedures are shown in the following table.

         CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2246, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON JUNE 21, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2017    2018    2019    2020    2021    2022    2023    2024    2025    2026    2027   2017-2022  2017-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact............       0       5       5      15      30      40      40      45      45      50      50        95        325
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 2246 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. 2246 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    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. 2246 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. 2246 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. 2246 contains no directed 
rulemaking.

             Section-by-Section Analysis of the Legislation


Sec. 1. Short title

    This Act may be cited as the ``Taxpayer Exposure Mitigation 
Act of 2017''.

Sec. 2. Opt-out of mandatory coverage requirement for commercial 
        properties

    Amends the Flood Disaster Protection Act of 1973 and the 
National Flood Insurance Act of 1968 to eliminate the NFIP's 
mandatory purchase requirement for all commercial and 
multifamily properties, while preserving the eligibility of 
commercial and multifamily properties to voluntarily purchase 
NFIP coverage if they so choose. Residential properties 
financed by commercial loans would be treated similar to other 
commercial and multifamily properties.

Sec. 3. Risk transfer requirement

    No later than 18 months after bill enactment, the FEMA 
Administrator shall annually cede a portion of the risk of the 
NFIP to the private reinsurance or capital markets, as 
determined by the Administrator, in an amount that (i) is 
sufficient to maintain the ability of the program to pay 
claims; and (ii) manages and limits the annual exposure of the 
NFIP to flood losses in accordance with the probably maximum 
loss target established each such year. The Administrator shall 
establish the probable maximum loss target for the NFIP that is 
expected to occur such fiscal year. In establishing the 
probably maximum loss target, the Administrator shall 
consider--(i) the probable maximum loss targets for other U.S. 
public natural catastrophe insurance program, including State 
wind pools and earthquake programs; (ii) the probably maximum 
loss targets of other risk management organization, including 
the Federal National Mortgage Association and the Federal Home 
Loan Mortgage Corporation; (iii) catastrophic, actuarial, and 
other appropriate data modeling results of the NFIP portfolio; 
(iv) the availability of funds in the National Flood Insurance 
Fund; (v) the availability of funds in the National Flood 
Insurance Reserve Fund; (vi) the availability of NFIP borrowing 
authority; (vii) the ability of the Administrator to repay 
outstanding debt; (viii) amounts appropriated to the 
Administrator to carry out the NFIP; (ix) reinsurance, capital 
markets, catastrophe bonds, collateralized reinsurance, 
resilience bonds, and other insurance-linked securities, and 
other risk transfer opportunities; and (x) any other factor the 
Administrator determines appropriate.
    Gives the Administrator the ability to enter into multi-
year contracts for reinsurance.

Sec. 4. Private or community flood maps

    Twelve months after bill enactment, the Technical Mapping 
Advisory Council (TMAC) shall develop and make recommendations 
to the FEMA Administrator to establish a set of standards, 
guidelines, and procedures for state and local governments to 
develop alternative maps. Subject to certification and approval 
by the Administrator, the map shall be considered the flood 
insurance rate map in effect for all purposes of the NFIP, with 
respect to the area covered by the map.
    Until the Administrator promulgates regulations 
implementing this section, the Administrator may adopt policies 
and procedures necessary to implement this section without 
undergoing notice and comment rulemaking.

         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):

FLOOD DISASTER PROTECTION ACT OF 1973

           *       *       *       *       *       *       *


                              definitions

  Sec. 3. (a) As used in this Act, unless the context otherwise 
requires, the term--
          (1) ``community'' means a State or a political 
        subdivision thereof which has zoning and building code 
        jurisdiction over a particular area having special 
        flood hazards;
          (2) ``Federal agency'' means any department, agency, 
        corporation, or other entity or instrumentality of the 
        executive branch of the Federal Government, and 
        includes the Federal National Mortgage Association and 
        the Federal Home Loan Mortgage Corporation;
          (3) ``financial assistance'' means any form of loan, 
        grant, guaranty, insurance, payment, rebate, subsidy, 
        disaster assistance loan or grant, or any other form of 
        direct or indirect Federal assistance, other than 
        general or special revenue sharing or formula grants 
        made to States;
          (4) ``financial assistance for acquisition or 
        construction purposes'' means any form of financial 
        assistance which is intended in whole or in part for 
        the acquisition, construction, reconstruction, repair, 
        or improvement of any publicly or privately owned 
        building or mobile home, and for any machinery, 
        equipment fixtures, and furnishings contained or to be 
        contained therein, and shall include the purchase or 
        subsidization of mortgages or mortgage loans but shall 
        exclude assistance pursuant to the Disaster Relief and 
        Emergency Assistance Act (other than assistance under 
        such Act in connection with a flood);
          (5) ``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;
          (6) ``Administrator'' means the Administrator of the 
        Federal Emergency Management Agency;
          (7) ``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;
          (8) the term ``improved real estate'' means real 
        estate upon which a building is located;
          (9) ``lender'' means a regulated lending institution 
        or Federal agency lender;
          (10) ``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; [and]
          (11) ``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
          (12) ``residential improved real estate'' means 
        improved real estate that--
                  (A) is primarily used for residential 
                purposes, as defined by the Federal entities 
                for lending regulation; and
                  (B) secures financing or financial assistance 
                provided through a federally related single 
                family loan progam, as defined by the Federal 
                entities for lending regulation.
  (b) The Administrator is authorized to define or redefine, by 
rules and regulations, any scientific or technical term used in 
this Act, insofar as such definition is not inconsistent with 
the purposes of this Act.

TITLE I--EXPANSION OF NATIONAL FLOOD INSURANCE PROGRAM

           *       *       *       *       *       *       *


    flood insurance purchase and compliance requirements and escrow 
                                accounts

  Sec. 102. (a) 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 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 residential 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 residential 
                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 residential 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 residential 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 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 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 residential 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 residential 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.
  (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; 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] for any 
        structure that is part of a residential 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, at the time of origination or at any time during 
        the term of a loan secured by residential 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 residential 
        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 residential 
        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 residential improved real 
                estate or a mobile home may jointly request the 
                Administrator to review a determination of 
                whether the residential building or mobile home 
                is located in an area having special flood 
                hazards. Such request shall be supported by 
                technical information relating to the 
                residential 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 residential 
                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 residential 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 
                residential building or mobile home during the 
                period determined by the Administrator which 
                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 residential 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 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 
residential 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 residential 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 residential 
                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.

           *       *       *       *       *       *       *

                              ----------                              


NATIONAL FLOOD INSURANCE ACT OF 1968

           *       *       *       *       *       *       *


TITLE XIII--NATIONAL FLOOD INSURANCE

           *       *       *       *       *       *       *


  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.--
          (1) Authority.--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.
          (2) Required risk transfer coverage.--
                  (A) Requirement.--Not later than the 
                expiration of the 18-month period beginning 
                upon the date of the enactment of this 
                paragraph and at all times thereafter, the 
                Administrator shall annually cede a portion of 
                the risk of the flood insurance program under 
                this title to the private reinsurance or 
                capital markets, or any combination thereof, 
                and at rates and terms that the Administrator 
                determines to be reasonable and appropriate, in 
                an amount that--
                          (i) is sufficient to maintain the 
                        ability of the program to pay claims; 
                        and
                          (ii) manages and limits the annual 
                        exposure of the flood insurance program 
                        to flood losses in accordance with the 
                        probable maximum loss target 
                        established for such year under 
                        subparagraph (B).
                  (B) Probable maximum loss target.--The 
                Administrator shall for each fiscal year, 
                establish a probable maximum loss target for 
                the national flood insurance program that shall 
                be the maximum probable loss under the national 
                flood insurance program that is expected to 
                occur in such fiscal year.
                  (C) Considerations.--In establishing the 
                probable maximum loss target under subparagraph 
                (B) for each fiscal year and carrying out 
                subparagraph (A), the Administrator shall 
                consider--
                          (i) the probable maximum loss targets 
                        for other United States public natural 
                        catastrophe insurance programs, 
                        including as State wind pools and 
                        earthquake programs;
                          (ii) the probable maximum loss 
                        targets of other risk management 
                        organizations, including the Federal 
                        National Mortgage Association and the 
                        Federal Home Loan Mortgage Corporation;
                          (iii) catastrophic, actuarial, and 
                        other appropriate data modeling results 
                        of the national flood insurance program 
                        portfolio;
                          (iv) the availability of funds in the 
                        National Flood Insurance Fund 
                        established under section 1310 (42 
                        U.S.C. 4017);
                          (v) the availability of funds in the 
                        National Flood Insurance Reserve Fund 
                        established under section 1310A (42 
                        U.S.C. 4017a);
                          (vi) the availability of borrowing 
                        authority under section 1309 (42 U.S.C. 
                        4016);
                          (vii) the ability of the 
                        Administrator to repay outstanding 
                        debt;
                          (viii) amounts appropriated to the 
                        Administrator to carry out the national 
                        flood insurance program;
                          (ix) reinsurance, capital markets, 
                        catastrophe bonds, collateralized 
                        reinsurance, resilience bonds, and 
                        other insurance-linked securities, and 
                        other risk transfer opportunities; and
                          (x) any other factor the 
                        Administrator determines appropriate.
                  (D) Multi-year contracts.--Nothing in this 
                paragraph may be construed to prevent or 
                prohibit the Administrator from complying with 
                the requirement under subparagraph (A) 
                regarding ceding risk through contracts having 
                a duration longer than one year.

           *       *       *       *       *       *       *


   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] 
is authorized--
          (1) 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)]  (A) 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)] (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 
                of these areas until the date specified in 
                section 1319[.]; and
          (2) to receive proposed alternative maps from 
        communities developed pursuant to standards and 
        requirements recommended by the Technical Mapping 
        Advisory Council, as required by section 100215(m) of 
        the Biggert-Waters Flood Insurance Reform Act of 2012 
        (42 U.S.C. 4101a(m)) and adopted by the Administrator 
        as required by section 100216(c)(3) of such Act (42 
        U.S.C. 4101b(c)(3)), so that the Administrator may--
                  (A) publish information with respect to all 
                flood plain areas, including coastal areas 
                located in the United States, which have 
                special flood hazards, and
                  (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 
                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.

           *       *       *       *       *       *       *


                          notice requirements

  Sec. 1364. (a) Notification of Special Flood Hazards.--
          (1) Regulated lending institutions.--Each Federal 
        entity for lending regulation (after consultation and 
        coordination with the Financial Institutions 
        Examination Council) shall by regulation require 
        regulated lending institutions, as a condition of 
        making, increasing, extending, or renewing any loan 
        secured by residential improved real estate or a mobile 
        home that the regulated lending institution determines 
        is located or is to be located in an area that has been 
        identified by the Administrator under this title or the 
        Flood Disaster Protection Act of 1973 as an area having 
        special flood hazards, to notify the purchaser or 
        lessee (or obtain satisfactory assurances that the 
        seller or lessor has notified the purchaser or lessee) 
        and the servicer of the loan of such special flood 
        hazards, in writing, a reasonable period in advance of 
        the signing of the purchase agreement, lease, or other 
        documents involved in the transaction. The regulations 
        shall also require that the regulated lending 
        institution retain a record of the receipt of the 
        notices by the purchaser or lessee and the servicer.
          (2) Federal agency lenders.--Each Federal agency 
        lender shall by regulation require notification in the 
        manner provided under paragraph (1) with respect to any 
        loan that is made by the Federal agency lender and 
        secured by residential improved real estate or a mobile 
        home located or to be located in an area that has been 
        identified by the Administrator under this title or the 
        Flood Disaster Protection Act of 1973 as an area having 
        special flood hazards. Any regulations issued under 
        this paragraph shall be consistent with and 
        substantially identical to the regulations issued under 
        paragraph (1).
          (3) Contents of notice.--Written notification 
        required under this subsection shall include--
                  (A) a warning, in a form to be established by 
                the Administrator, stating that the residential 
                building on the improved real estate securing 
                the loan is located, or the mobile home 
                securing the loan is or is to be located, in an 
                area having special flood hazards;
                  (B) a description of the flood insurance 
                purchase requirements under section 102(b) of 
                the Flood Disaster Protection Act of 1973;
                  (C) a statement that flood insurance coverage 
                may be purchased under the national flood 
                insurance program and is also available from 
                private insurers, as required under section 
                102(b)(6) of the Flood Disaster Protection Act 
                of 1973 (42 U.S.C. 4012a(b)(6)); and
                  (D) any other information that the 
                Administrator considers necessary to carry out 
                the purposes of the national flood insurance 
                program.
  (b) Notification of Change of Servicer.--
          (1) Lending institutions.--Each Federal entity for 
        lending regulation (after consultation and coordination 
        with the Financial Institutions Examination Council) 
        shall by regulation require regulated lending 
        institutions, in connection with the making, 
        increasing, extending, renewing, selling, or 
        transferring any loan described in subsection (a)(1), 
        to notify the Administrator (or the designee of the 
        Administrator) in writing during the term of the loan 
        of the servicer of the loan. Such institutions shall 
        also notify the Administrator (or such designee) of any 
        change in the servicer of the loan, not later than 60 
        days after the effective date of such change. The 
        regulations under this subsection shall provide that 
        upon any change in the servicing of a loan, the duty to 
        provide notification under this subsection shall 
        transfer to the transferee servicer of the loan.
          (2) Federal agency lenders.--Each Federal agency 
        lender shall by regulation provide for notification in 
        the manner provided under paragraph (1) with respect to 
        any loan described in subsection (a)(1) that is made by 
        the Federal agency lender. Any regulations issued under 
        this paragraph shall be consistent with and 
        substantially identical to the regulations issued under 
        paragraph (1) of this subsection.
  (c) Notification of Expiration of Insurance.--The 
Administrator (or the designee of the Administrator) shall, not 
less than 45 days before the expiration of any contract for 
flood insurance under this title, issue notice of such 
expiration by first class mail to the owner of the property 
covered by the contract, the servicer of any loan secured by 
the property covered by the contract, and (if known to the 
Administrator) the owner of the loan.

                  standard hazard determination forms

  Sec. 1365. (a) Development.--The Administrator, in 
consultation with representatives of the mortgage and lending 
industry, the Federal entities for lending regulation, the 
Federal agency lenders, and any other appropriate individuals, 
shall develop a standard form for determining, in the case of a 
loan secured by residential improved real estate or a mobile 
home, whether the residential building or mobile home is 
located in an area identified by the Administrator as an area 
having special flood hazards and in which flood insurance under 
this title is available. The form shall be established by 
regulations issued not later than 270 days after the date of 
enactment of the Riegle Community Development and Regulatory 
Improvement Act of 1994.
  (b) Design and Contents.--
          (1) Purpose.--The form under subsection (a) shall be 
        designed to facilitate compliance with the flood 
        insurance purchase requirements of this title.
          (2) Contents.--The form shall require identification 
        of the type of flood-risk zone in which the residential 
        building or mobile home is located, the complete map 
        and panel numbers for the residential improved real 
        estate or property on which the mobile home is located, 
        the community identification number and community 
        participation status (for purposes of the national 
        flood insurance program) of the community in which the 
        residential improved real estate or such property is 
        located, and the date of the map used for the 
        determination, with respect to flood hazard information 
        on file with the Administrator. If the residential 
        building or mobile home is not located in an area 
        having special flood hazards the form shall require a 
        statement to such effect and shall indicate the 
        complete map and panel numbers of the residential 
        improved real estate or property on which the mobile 
        home is located. If the complete map and panel numbers 
        are not available because the residential building or 
        mobile home is not located in a community that is 
        participating in the national flood insurance program 
        or because no map exists for the relevant area, the 
        form shall require a statement to such effect. The form 
        shall provide for inclusion or attachment of any 
        relevant documents indicating revisions or amendments 
        to maps.
  (c) Required Use.--The Federal entities for lending 
regulation shall by regulation require the use of the form 
under this section by regulated lending institutions. Each 
Federal agency lender shall by regulation provide for the use 
of the form with respect to any loan made by such Federal 
agency lender. The Federal National Mortgage Association and 
the Federal Home Loan Mortgage Corporation and the Government 
National Mortgage Association shall require the use of the form 
with respect to any loan purchased by such entities. A lender 
or other person may comply with the requirement under this 
subsection by using the form in a printed, computerized, or 
electronic manner.
  (d) Guarantees Regarding Information.--In providing 
information regarding special flood hazards on the form 
developed under this section, any lender (or other person 
required to use the form) who makes, increases, extends, or 
renews a loan secured by residential improved real estate or a 
mobile home may provide for the acquisition or determination of 
such information to be made by a person other than such lender 
(or other person), only to the extent such person guarantees 
the accuracy of the information.
  (e) Reliance on Previous Determination.--Any person 
increasing, extending, renewing, or purchasing a loan secured 
by residential improved real estate or a mobile home may rely 
on a previous determination of whether the residential building 
or mobile home is located in an area having special flood 
hazards (and shall not be liable for any error in such previous 
determination), if the previous determination was made not more 
than 7 years before the date of the transaction and the basis 
for the previous determination has been set forth on a form 
under this section, unless--
          (1) map revisions or updates pursuant to section 
        1360(f) after such previous determination have resulted 
        in the residential building or mobile home being 
        located in an area having special flood hazards; or
          (2) the person contacts the Administrator to 
        determine when the most recent map revisions or updates 
        affecting such property occurred and such revisions and 
        updates have occurred after such previous 
        determination.
  (f) Effective Date.--The regulations under this section 
requiring use of the form established pursuant to this section 
shall be issued together with the regulations required under 
subsection (a) and shall take effect upon the expiration of the 
180-day period beginning on such issuance.

           *       *       *       *       *       *       *


        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) the term ``Federal agency lender'' means a 
        Federal agency that makes direct loans secured by 
        residential improved real estate or a mobile home, to 
        the extent such agency acts in such capacity;
          (9) 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) the term ``improved real estate'' means real 
        estate upon which a building is located;
          (11) the term ``lender'' means a regulated lending 
        institution or Federal agency lender;
          (12) 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) 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) the term ``residential improved real estate'' 
        means improved real estate that--
                  (A) is primarily used for residential 
                purposes, as defined by the Federal entities 
                for lending regulation; and
                  (B) secures financing or financial assistance 
                provided through a federally related single 
                family loan progam, as defined by the Federal 
                entities for lending regulation;
          [(14)] (15) 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)] (16) 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.

           *       *       *       *       *       *       *

                              ----------                              


BIGGERT-WATERS FLOOD INSURANCE REFORM ACT OF 2012

           *       *       *       *       *       *       *


DIVISION F--MISCELLANEOUS

           *       *       *       *       *       *       *


                       TITLE II--FLOOD INSURANCE

Subtitle A--Flood Insurance Reform and Modernization

           *       *       *       *       *       *       *


SEC. 100215. TECHNICAL MAPPING ADVISORY COUNCIL.

  (a) Establishment.--There is established a council to be 
known as the Technical Mapping Advisory Council (in this 
section referred to as the ``Council'').
  (b) Membership.--
          (1) In general.--The Council shall consist of--
                  (A) the Administrator (or the designee 
                thereof);
                  (B) the Secretary of the Interior (or the 
                designee thereof);
                  (C) the Secretary of Agriculture (or the 
                designee thereof);
                  (D) the Under Secretary of Commerce for 
                Oceans and Atmosphere (or the designee 
                thereof); and
                  (E) 16 additional members appointed by the 
                Administrator or the designee of the 
                Administrator, who shall be--
                          (i) a member of a recognized 
                        professional surveying association or 
                        organization;
                          (ii) a member of a recognized 
                        professional mapping association or 
                        organization;
                          (iii) a member of a recognized 
                        professional engineering association or 
                        organization;
                          (iv) a member of a recognized 
                        professional association or 
                        organization representing flood hazard 
                        determination firms;
                          (v) a representative of the United 
                        States Geological Survey;
                          (vi) a representative of a recognized 
                        professional association or 
                        organization representing State 
                        geographic information;
                          (vii) a representative of State 
                        national flood insurance coordination 
                        offices;
                          (viii) a representative of the Corps 
                        of Engineers;
                          (ix) a member of a recognized 
                        regional flood and storm water 
                        management organization;
                          (x) 2 representatives of different 
                        State government agencies that have 
                        entered into cooperating technical 
                        partnerships with the Administrator and 
                        have demonstrated the capability to 
                        produce flood insurance rate maps;
                          (xi) 2 representatives of different 
                        local government agencies that have 
                        entered into cooperating technical 
                        partnerships with the Administrator and 
                        have demonstrated the capability to 
                        produce flood insurance maps;
                          (xii) a member of a recognized 
                        floodplain management association or 
                        organization;
                          (xiii) a member of a recognized risk 
                        management association or organization; 
                        and
                          (xiv) a State mitigation officer.
          (2) Qualifications.--Members of the Council shall be 
        appointed based on their demonstrated knowledge and 
        competence regarding surveying, cartography, remote 
        sensing, geographic information systems, or the 
        technical aspects of preparing and using flood 
        insurance rate maps. In appointing members under 
        paragraph (1)(E), the Administrator shall, to the 
        maximum extent practicable, ensure that the membership 
        of the Council has a balance of Federal, State, local, 
        tribal, and private members, and includes geographic 
        diversity, including representation from areas with 
        coastline on the Gulf of Mexico and other States 
        containing areas identified by the Administrator as at 
        high risk for flooding or as areas having special flood 
        hazards.
  (c) Duties.--The Council shall--
          (1) recommend to the Administrator how to improve in 
        a cost-effective manner the--
                  (A) accuracy, general quality, ease of use, 
                and distribution and dissemination of flood 
                insurance rate maps and risk data; and
                  (B) performance metrics and milestones 
                required to effectively and efficiently map 
                flood risk areas in the United States;
          (2) recommend to the Administrator mapping standards 
        and guidelines for--
                  (A) flood insurance rate maps; and
                  (B) data accuracy, data quality, data 
                currency, and data eligibility;
          (3) recommend to the Administrator how to maintain, 
        on an ongoing basis, flood insurance rate maps and 
        flood risk identification;
          (4) recommend procedures for delegating mapping 
        activities to State and local mapping partners;
          (5) recommend to the Administrator and other Federal 
        agencies participating in the Council--
                  (A) methods for improving interagency and 
                intergovernmental coordination on flood mapping 
                and flood risk determination; and
                  (B) a funding strategy to leverage and 
                coordinate budgets and expenditures across 
                Federal agencies; [and]
          (6) recommend to the Administrator methods or actions 
        to make the flood mapping processes more efficient;
          (7) recommend to the Administrator methods or actions 
        to minimize any cost, data, and paperwork requirements 
        of the flood mapping processes;
          (8) assist communities, and in particular smaller 
        communities, in locating the resources required to 
        participate in the development of flood elevations and 
        flood hazard area designations; and
          [(6)] (9) submit an annual report to the 
        Administrator that contains--
                  (A) a description of the activities of the 
                Council;
                  (B) an evaluation of the status and 
                performance of flood insurance rate maps and 
                mapping activities to revise and update flood 
                insurance rate maps, as required under section 
                100216; and
                  (C) a summary of recommendations made by the 
                Council to the Administrator.
  (d) Future Conditions Risk Assessment and Modeling Report.--
          (1) In general.--The Council shall consult with 
        scientists and technical experts, other Federal 
        agencies, States, and local communities to--
                  (A) develop recommendations on how to--
                          (i) ensure that flood insurance rate 
                        maps incorporate the best available 
                        climate science to assess flood risks; 
                        and
                          (ii) ensure that the Federal 
                        Emergency Management Agency uses the 
                        best available methodology to consider 
                        the impact of--
                                  (I) the rise in the sea 
                                level; and
                                  (II) future development on 
                                flood risk; and
                  (B) not later than 1 year after the date of 
                enactment of this Act, prepare written 
                recommendations in a future conditions risk 
                assessment and modeling report and to submit 
                such recommendations to the Administrator.
          (2) Responsibility of the administrator.--The 
        Administrator, as part of the ongoing program to review 
        and update National Flood Insurance Program rate maps 
        under section 100216, shall incorporate any future risk 
        assessment submitted under paragraph (1)(B) in any such 
        revision or update.
  (e) Chairperson.--The members of the Council shall elect 1 
member to serve as the chairperson of the Council (in this 
section referred to as the ``Chairperson'').
  (f) Coordination.--To ensure that the Council's 
recommendations are consistent, to the maximum extent 
practicable, with national digital spatial data collection and 
management standards, the Chairperson shall consult with the 
Chairperson of the Federal Geographic Data Committee 
(established pursuant to Office of Management and Budget 
Circular A-16).
  (g) Compensation.--Members of the Council shall receive no 
additional compensation by reason of their service on the 
Council.
  (h) Meetings and Actions.--
          (1) In general.--The Council shall meet not less 
        frequently than twice each year at the request of the 
        Chairperson or a majority of its members, and may take 
        action by a vote of the majority of the members.
          (2) Initial meeting.--The Administrator, or a person 
        designated by the Administrator, shall request and 
        coordinate the initial meeting of the Council.
  (i) Officers.--The Chairperson may appoint officers to assist 
in carrying out the duties of the Council under subsection (c).
  (j) Staff.--
          (1) Staff of fema.--Upon the request of the 
        Chairperson, the Administrator may detail, on a 
        nonreimbursable basis, personnel of the Federal 
        Emergency Management Agency to assist the Council in 
        carrying out its duties.
          (2) Staff of other federal agencies.--Upon request of 
        the Chairperson, any other Federal agency that is a 
        member of the Council may detail, on a nonreimbursable 
        basis, personnel to assist the Council in carrying out 
        its duties.
  (k) Powers.--In carrying out this section, the Council may 
hold hearings, receive evidence and assistance, provide 
information, and conduct research, as it considers appropriate.
  (l) Report to Congress.--The Administrator, on an annual 
basis, shall report to the Committee on Banking, Housing, and 
Urban Affairs of the Senate, the Committee on Financial 
Services of the House of Representatives, and the Office of 
Management and Budget on the--
          (1) recommendations made by the Council;
          (2) actions taken by the Federal Emergency Management 
        Agency to address such recommendations to improve flood 
        insurance rate maps and flood risk data; and
          (3) any recommendations made by the Council that have 
        been deferred or not acted upon, together with an 
        explanatory statement.
  (m) Community Flood Maps.--
          (1) Standards and procedures.--In addition to the 
        other duties of the Council under this section, not 
        later than the expiration of the 12-month period 
        beginning on the date of the enactment of this 
        subsection, the Council shall recommend to the 
        Administrator standards and requirements for chief 
        executive officers, or entities designated by chief 
        executive officers, of States and communities 
        participating in the National Flood Insurance Program 
        to use in mapping flood hazards located in States and 
        communities that choose to develop alternative maps to 
        the flood insurance rate maps developed by the Agency. 
        The recommended standards and requirements shall 
        include procedures for providing notification and 
        appeal rights to individuals within the communities of 
        the proposed flood elevation determinations.
          (2) Exemption from rulemaking.--Until such time as 
        the Administrator promulgates regulations implementing 
        paragraph (1) of this subsection, the Administrator 
        may, notwithstanding any other provision of law, adopt 
        policies and procedures necessary to implement such 
        paragraphs without undergoing notice and comment 
        rulemaking and without conducting regulatory analyses 
        otherwise required by statute, regulation, or executive 
        order.

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 prepared by the Administrator, or by a 
community pursuant to section 1360(a)(2) of the National Flood 
Insurance Act of 1968, 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.
          (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 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[.];
          (3) establish and adopt standards and requirements 
        for development by States and communities of 
        alternative flood insurance rate maps to be submitted 
        to the Administrator pursuant to section 1360(a)(2) of 
        the National Flood Insurance Act of 1968, taking into 
        consideration the recommendations of the Technical 
        Mapping Advisory Council made pursuant to section 
        100215(m) of this Act (42 U.S.C. 4101a(m)); and
          (4) in the case of proposed alternative maps received 
        by the Administrator pursuant to such section 
        1360(a)(2), not later than the expiration of the 6-
        month period beginning upon receipt of such proposed 
        alternative maps--
                  (A) determine whether such maps were 
                developed in accordance with the standards and 
                requirements adopted pursuant to paragraph (3) 
                of this subsection; and
                  (B) approve or disapprove such proposed maps 
                for use under National Flood Insurance Program.
  (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.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    H.R. 2246 would repeal the federal requirement to purchase 
flood insurance for commercial properties and multifamily 
properties with commercial financing. The Federal Disaster 
Protection Act requires properties located in a special flood 
hazard area with a federally-backed mortgage to be covered with 
flood insurance. Under the law, commercial properties must 
obtain a maximum of $500,000 of coverage per structure. H.R. 
2246 creates a wholesale exemption from this requirement for 
all commercial properties regardless of size, sophistication, 
or loan amount.
    Some stakeholders have argued that the mandatory purchase 
requirement is superfluous and cumbersome for large and 
sophisticated commercial entities who need coverage well above 
the current maximum coverage of $500,000 available from the 
National Flood Insurance Program (NFIP). These entities often 
purchase flood insurance in the private market because the NFIP 
does not provide enough coverage for their needs. But due to 
perceived ambiguity as to whether that private policy counts as 
compliance with the mandatory purchase requirement, some 
entities resort to buying a first-dollar NFIP policy in 
addition to an excess private policy rather than simply 
purchasing one private policy to cover all of their needs. Some 
stakeholders have also expressed concern with the mandatory 
purchase requirement as it relates to the purchase of blanket 
insurance policies. The NFIP currently does not provide blanket 
policies, and instead requires separate policies for each 
individual structure. This can be administratively inefficient 
and cumbersome for commercial entities with multiple 
structures.
    H.R. 2246 presents an overly broad solution for issues that 
are specific to large commercial entities, and a number of 
groups have expressed their opposition to this wholesale 
exemption. The Independent Community Bankers, for example, 
oppose this provision because it would harm community banks and 
small businesses because it increases the likelihood that the 
collateral they are securing would be unprotected and likely 
suffer a loss in the event of a flood. The flood insurance 
take-up rate for properties outside of this mandatory purchase 
requirement is extremely low, meaning that most people who 
aren't required to buy flood insurance do not purchase it. That 
is why a coalition of stakeholders representing the commercial 
and multifamily real estate industry have expressed concerns 
about affordability challenges for low- and mid-value 
properties that will likely opt to forgo flood insurance if 
given the choice. This creates a ripple effect in the case of a 
flood where the road to recovery is longer and more difficult 
for businesses in flood zones.
    H.R. 2246 also requires the Federal Emergency Management 
Agency (FEMA) to annually cede a portion of its risk to the 
private reinsurance or capital markets, which could lead 
unnecessarily to higher costs on the NFIP and subsequently 
higher premiums on policyholders. The Biggert-Waters Act of 
2012, clarified that FEMA has the authority to purchase 
reinsurance from the private reinsurance and capital markets 
and in the past two years, FEMA has exercised this authority as 
appropriate. In January of this year, FEMA agreed to a transfer 
of $1.042 billion of the NFIP's financial risk to 25 reinsurers 
through January 1, 2018. The reinsurance contract, which cost 
FEMA $150 million in premium, requires the reinsurers to cover 
26 percent of losses in a single flooding event between $4 
billion and $8 billion. According to FEMA, there is a 17.2 
percent chance of triggering this clause in 2017. Further, FEMA 
intends to use its current authority to make future reinsurance 
purchases.\1\
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    \1\See https://www.fema.gov/nfip-reinsurance-program.
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    Notwithstanding FEMA's actions and multi-year plan to 
further engage the reinsurance markets, H.R. 2246 would place 
cumbersome requirements on FEMA with regard to how much risk it 
must cede to the private sector. Specifically, the bill would 
require FEMA to make this determination in accordance with a 
probable maximum' loss (PML) target, which departs from 
traditional PML metrics would hamstring FEMA's ability to 
negotiate the best deal possible for the National Flood 
Insurance Program and policyholders and appears to be confusing 
at best and unworkable at worst.
    Lastly, H.R. 2246 would set up a process to supplant FEMA's 
Flood Insurance Rate Maps (FIRMs) with private or community 
flood maps. The bill would require the Technical Mapping 
Advisory Council (TMAC) to develop a set of standards, 
guidelines, and procedures that communities would use to 
develop alternative flood maps. It is unclear how this would 
improve on current law as FEMA already conducts extensive 
communication and outreach efforts with the community during 
the mapping process, including various minimum waiting periods, 
and consideration of any additional data that the community 
provides to improve the map. Moreover, today FIRMs cannot go 
into effect until a community adopts the map. H.R. 2246 would 
flip this process on its head, by requiring FEMA make the final 
certification. While this new process may advantage wealthier 
communities with the means to take on this-complicated and 
technical process, the bill does not provide any finding or 
technical assistance for lower-income communities that lack the 
resources to do so.
    For these reasons, we oppose H.R. 2246.

                                   Maxine Waters.
                                   Keith Ellison.
                                   Michael E. Capuano.
                                   Stephen F. Lynch.
                                   Carolyn B. Maloney.
                                   Joyce Beatty.
                                   Daniel Kildee.
                                   Gwen Moore.
                                   Charlie Crist.
                                   Brad Sherman.
                                   Nydia M. Velaquez.
                                   Al Green.
                                   Gregory W. Meeks.
                                   Vicente Gonzalez.

                                  [all]