Build for Future Disasters Act of 2021
This bill eliminates certain National Flood Insurance Program (NFIP) rate subsidies for newly constructed property. Specifically, the chargeable rate for NFIP coverage of newly constructed property and any substantial improvements of property started on or after January 1, 2025, must not be not less than the estimated risk premium rate.
The Government Accountability Office must report on the feasibility and effects of (1) eliminating by January 1, 2027, all subsidies that reduce premiums for NFIP coverage to amounts below those necessary to operate to program without a deficit, and (2) prohibiting these subsidies unless flood mitigation activities have been completed on a property.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2632 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 2632
To eliminate any subsidies for flood insurance coverage under the
National Flood Insurance Program for new construction, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 16, 2021
Mr. Peters (for himself and Mr. Barr) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To eliminate any subsidies for flood insurance coverage under the
National Flood Insurance Program for new construction, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Build for Future Disasters Act of
2021''.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress makes the following findings:
(1) According to the National Oceanic and Atmospheric
Administration, since 2000, flooding has become the most common
and costly natural disaster in the United States, impacting all
50 States and causing more than $845 billion in damage.
(2) A 2019 report from the California-based analytics
company CoreLogic found that 7.3 million homes along the
Atlantic and Gulf Coasts alone are at risk from storm surge,
with a potential $1.8 trillion in reconstruction costs.
(3) Research from New York University's Furman Center for
Real Estate and Urban Policy estimated that, in 2015, 15
million people nationwide lived in the 100-year floodplain
spread across coastal and inland States.
(4) The National Flood Insurance Program (NFIP),
administered by the Federal Emergency Management Agency (FEMA),
provides federally backed flood insurance in over 22,000
communities in 56 States and jurisdictions in the United States
with more than 5 million policies providing over $1.3 trillion
in coverage.
(5) In 1966, while calling for the creation of the NFIP,
the Task Force on Federal Flood Control Policy provided ``a
caution on flood insurance'' that if ``incorrectly applied, it
could exacerbate the whole problem of flood losses.''. The
report warned that insurance coverage not proportionate to risk
would ``invite economic waste of great magnitude . . .
aggravate flood damages and constitute gross public
irresponsibility''.
(6) According to the Government Accountability Office
(GAO), the NFIP offers 20 percent of policyholders heavily
subsidized rates that FEMA estimates may be 45 to 50 percent
below a full-risk rate.
(7) Since 2005, the NFIP has borrowed nearly $40 billion
from taxpayers to meet policyholder insurance claims.
(8) In 2017, the Congressional Budget Office estimated that
under its current model the NFIP is expected to lose $1.3
billion a year.
(9) Historically, repeatedly flooded properties have
accounted for just 1 percent of properties with National Flood
Insurance Program policies but about 25 to 30 percent of flood
claims. Nationwide more than 150,000 properties have repeatedly
flooded at a cost to the NFIP of more than $12.5 billion.
(10) On May 26, 2019, four former FEMA Administrators wrote
a letter to Congressional leaders stating: ``Change is needed
to allow the NFIP to pay off its debt and serve its purposes of
reducing Federal disaster spending following flood events,
minimizing flood losses, and discouraging unwise building in
flood-prone areas.''.
SEC. 3. SENSE OF CONGRESS.
It is the sense of the Congress that the Federal Government
should--
(1) discourage regulation and policies that result in
building and rebuilding homes located in high flood-risk areas;
(2) limit the availability of federally subsidized flood
insurance for construction of new homes, business, and
infrastructure;
(3) coordinate with floodplain managers, city planners,
administrators, and local elected officials to ensure that
structures built in flood-prone areas comply with building and
elevation codes and regulations that are designed to reduce
their risk of damage from flooding; and
(4) prioritize increased mitigation funding through new and
existing programs to help communities better prepare for future
flood disasters before they happen.
SEC. 4. ELIMINATION OF SUBSIDIES FOR NEW CONSTRUCTION.
Subsection (c) of section 1308 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4015(c)) is amended by adding at the end the
following new paragraph:
``(3) New construction.--Any property the construction or
substantial improvement of which the Administrator determines
has been started on or after January 1, 2025, and the
appropriate actuarial rate shall be adjusted with any changes
to the flood zone or base flood elevation reflected in relevant
flood insurance rate map, regardless of the previous rating; in
determining whether a property is subject to this paragraph,
the Administrator shall consider the issue date for any
relevant building permit or occupancy certificate issued by the
community in which such property is located; for purposes of
this paragraph only, a determination regarding substantial
improvement may exclude the costs of any improvement to a
structure or the structure's associated land area for which the
primary purpose is flood mitigation or floodproofing; such
improvements may include elevation of the building or
utilities, floodproofing, or other site-specific mitigation
activities that would otherwise meet the eligibility
requirements established by the Administrator under authority
of section 1366(c) (42 U.S.C. 4104c(c)); nothing in this
paragraph may be construed to prohibit application of any
future means-tested assistance for insurance affordability to
construction or substantial improvement covered by this
paragraph.''.
SEC. 5. GAO STUDY AND REPORT.
The Comptroller General of the United States shall conduct a study
to determine the feasibility and effects of--
(1) eliminating, by January 1, 2027, all subsidies that
reduce premiums for coverage under the National Flood Insurance
Program of the Federal Emergency Management Agency to amounts
that are less than the amount that is actuarially necessary for
such Program to operate without a deficit; and
(2) prohibiting any subsidy described in paragraph (1) for
any property unless mitigation activities to decrease the risk
of flood damage to such property have been completed.
Not later than the expiration of the 12-month period beginning on the
date of the enactment of this Act, the Comptroller General shall submit
a report to the Congress that describes the findings of the study
pursuant to this section.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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