Build for Future Disasters Act of 2021

I 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 construc- tion, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Build for Future Dis- 4 asters Act of 2021’’. 5 SEC. 2. CONGRESSIONAL FINDINGS. 6 The Congress makes the following findings: 7 (1) According to the National Oceanic and At- 8 mospheric Administration, since 2000, flooding has 9 become the most common and costly natural disaster 10 VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2632 IH in the United States, impacting all 50 States and 1 causing more than $845 billion in damage. 2 (2) A 2019 report from the California-based 3 analytics company CoreLogic found that 7.3 million 4 homes along the Atlantic and Gulf Coasts alone are 5 at risk from storm surge, with a potential $1.8 tril- 6 lion in reconstruction costs. 7 (3) Research from New York University’s 8 Furman Center for Real Estate and Urban Policy 9 estimated that, in 2015, 15 million people nation- 10 wide lived in the 100-year floodplain spread across 11 coastal and inland States. 12 (4) The National Flood Insurance Program 13 (NFIP), administered by the Federal Emergency 14 Management Agency (FEMA), provides federally 15 backed flood insurance in over 22,000 communities 16 in 56 States and jurisdictions in the United States 17 with more than 5 million policies providing over $1.3 18 trillion in coverage. 19 (5) In 1966, while calling for the creation of 20 the NFIP, the Task Force on Federal Flood Control 21 Policy provided ‘‘a caution on flood insurance’’ that 22 if ‘‘incorrectly applied, it could exacerbate the whole 23 problem of flood losses.’’. The report warned that in- 24 surance coverage not proportionate to risk would 25 VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2632 IH ‘‘invite economic waste of great magnitude . . . ag- 1 gravate flood damages and constitute gross public ir- 2 responsibility’’. 3 (6) According to the Government Accountability 4 Office (GAO), the NFIP offers 20 percent of policy- 5 holders heavily subsidized rates that FEMA esti- 6 mates may be 45 to 50 percent below a full-risk 7 rate. 8 (7) Since 2005, the NFIP has borrowed nearly 9 $40 billion from taxpayers to meet policyholder in- 10 surance claims. 11 (8) In 2017, the Congressional Budget Office 12 estimated that under its current model the NFIP is 13 expected to lose $1.3 billion a year. 14 (9) Historically, repeatedly flooded properties 15 have accounted for just 1 percent of properties with 16 National Flood Insurance Program policies but 17 about 25 to 30 percent of flood claims. Nationwide 18 more than 150,000 properties have repeatedly flood- 19 ed at a cost to the NFIP of more than $12.5 billion. 20 (10) On May 26, 2019, four former FEMA Ad- 21 ministrators wrote a letter to Congressional leaders 22 stating: ‘‘Change is needed to allow the NFIP to pay 23 off its debt and serve its purposes of reducing Fed- 24 eral disaster spending following flood events, mini- 25 VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2632 IH mizing flood losses, and discouraging unwise build- 1 ing in flood-prone areas.’’. 2 SEC. 3. SENSE OF CONGRESS. 3 It is the sense of the Congress that the Federal Gov- 4 ernment should— 5 (1) discourage regulation and policies that re- 6 sult in building and rebuilding homes located in high 7 flood-risk areas; 8 (2) limit the availability of federally subsidized 9 flood insurance for construction of new homes, busi- 10 ness, and infrastructure; 11 (3) coordinate with floodplain managers, city 12 planners, administrators, and local elected officials 13 to ensure that structures built in flood-prone areas 14 comply with building and elevation codes and regula- 15 tions that are designed to reduce their risk of dam- 16 age from flooding; and 17 (4) prioritize increased mitigation funding 18 through new and existing programs to help commu- 19 nities better prepare for future flood disasters before 20 they happen. 21 VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2632 IH SEC. 4. ELIMINATION OF SUBSIDIES FOR NEW CONSTRUC- 1 TION. 2 Subsection (c) of section 1308 of the National Flood 3 Insurance Act of 1968 (42 U.S.C. 4015(c)) is amended 4 by adding at the end the following new paragraph: 5 ‘‘(3) NEW CONSTRUCTION.—Any property the 6 construction or substantial improvement of which 7 the Administrator determines has been started on or 8 after January 1, 2025, and the appropriate actuarial 9 rate shall be adjusted with any changes to the flood 10 zone or base flood elevation reflected in relevant 11 flood insurance rate map, regardless of the previous 12 rating; in determining whether a property is subject 13 to this paragraph, the Administrator shall consider 14 the issue date for any relevant building permit or oc- 15 cupancy certificate issued by the community in 16 which such property is located; for purposes of this 17 paragraph only, a determination regarding substan- 18 tial improvement may exclude the costs of any im- 19 provement to a structure or the structure’s associ- 20 ated land area for which the primary purpose is 21 flood mitigation or floodproofing; such improvements 22 may include elevation of the building or utilities, 23 floodproofing, or other site-specific mitigation activi- 24 ties that would otherwise meet the eligibility require- 25 ments established by the Administrator under au- 26 VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2632 IH thority of section 1366(c) (42 U.S.C. 4104c(c)); 1 nothing in this paragraph may be construed to pro- 2 hibit application of any future means-tested assist- 3 ance for insurance affordability to construction or 4 substantial improvement covered by this para- 5 graph.’’. 6 SEC. 5. GAO STUDY AND REPORT. 7 The Comptroller General of the United States shall 8 conduct a study to determine the feasibility and effects 9 of— 10 (1) eliminating, by January 1, 2027, all sub- 11 sidies that reduce premiums for coverage under the 12 National Flood Insurance Program of the Federal 13 Emergency Management Agency to amounts that 14 are less than the amount that is actuarially nec- 15 essary for such Program to operate without a deficit; 16 and 17 (2) prohibiting any subsidy described in para- 18 graph (1) for any property unless mitigation activi- 19 ties to decrease the risk of flood damage to such 20 property have been completed. 21 Not later than the expiration of the 12-month period be- 22 ginning on the date of the enactment of this Act, the 23 Comptroller General shall submit a report to the Congress 24 VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2632 IH that describes the findings of the study pursuant to this 1 section. 2 Æ VerDate Sep 11 2014 03:49 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2632.IH H2632 kjohnson on DSK79L0C42PROD with BILLS