What This Bill Does
This bill changes federal flood insurance laws to remove mandatory flood insurance requirements for commercial properties in flood hazard areas. The bill adds new definitions to clarify that mandatory flood insurance now applies only to residential properties, while allowing the government to still offer flood insurance to commercial properties if they choose to buy it.
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Who It Affects
- Property owners of commercial buildings in flood hazard areas
- Property owners of residential multi-family buildings
- Property owners of single-family homes in flood hazard areas
- Banks and lenders that finance residential properties
- Federal Emergency Management Agency (the federal agency that runs the National Flood Insurance Program)
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Key Provisions
- The bill adds a new definition of "residential improved real estate" to mean property primarily used for residential purposes that is financed through a federally related single family loan program. (Sec. 1(a)(1)(C))
- The bill changes all references in flood insurance laws from "improved real estate" and "building or mobile home" to "residential improved real estate" and "residential building or mobile home" throughout sections dealing with mandatory insurance requirements. (Sec. 1(a)(2), Sec. 1(b))
- The bill allows the Federal Emergency Management Agency to continue offering flood insurance to commercial properties, multi-family residential properties, and properties financed with commercial loans, even though these are no longer subject to mandatory requirements. (Sec. 1(c))
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What Changes
If this becomes law, commercial property owners in flood hazard areas will no longer be required to carry flood insurance. Residential single-family property owners will continue to face mandatory flood insurance requirements when they obtain federally-backed mortgages. The government agency running the flood insurance program may still offer coverage to any property type, but no one will be forced to buy it except for residential single-family homes with federal loans.
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Important Definitions
- "Residential improved real estate": Property primarily used for residential purposes that is financed through a federally related single family loan program
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Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION H. R. 1307
To repeal the mandatory flood insurance coverage requirement for commercial
properties located in flood hazard areas, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 1, 2023
Mr. LUETKEMEYER introduced the following bill; which was referred to the
Committee on Financial Services
A BILL
To repeal the mandatory flood insurance coverage require-
ment for commercial properties located in flood hazard
areas, 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. OPT-OUT OF MANDATORY COVERAGE REQUIRE-
3
MENT FOR COMMERCIAL PROPERTIES.
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(a) AMENDMENTS TO FLOOD DISASTER PROTECTION
5
ACT OF 1973.—The Flood Disaster Protection Act of
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1973 is amended—
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(1) in section 3(a) (42 U.S.C. 4003(a))—
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(A) in paragraph (10), by striking ‘‘and’’
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at the end;
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•HR 1307 IH
(B) in paragraph (11), by striking the pe-
1
riod at the end and inserting ‘‘; and’’; and
2
(C) by adding at the end the following new
3
paragraph:
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‘‘(12) ‘residential improved real estate’ means
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improved real estate that—
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‘‘(A) is primarily used for residential pur-
7
poses, as defined by the Federal entities for
8
lending regulation; and
9
‘‘(B) secures financing or financial assist-
10
ance provided through a federally related single
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family loan program, as defined by the Federal
12
entities for lending regulation.’’; and
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(2) in section 102 (42 U.S.C. 4012a)—
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(A) in subsection (b)—
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(i) in paragraph (1)(A)—
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(I) by inserting ‘‘residential’’ be-
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fore ‘‘improved real estate’’; and
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(II) by inserting ‘‘residential’’ be-
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fore ‘‘building or mobile home’’;
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(ii) in paragraph (2)—
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(I) by inserting ‘‘residential’’ be-
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fore ‘‘improved real estate’’; and
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(II) by inserting ‘‘residential’’ be-
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fore ‘‘building or mobile home’’; and
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•HR 1307 IH
(iii) in paragraph (3)—
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(I) in subparagraph (A), by in-
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serting ‘‘residential’’ before ‘‘improved
3
real estate’’; and
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(II) in the matter after and
5
below subparagraph (B), by inserting
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‘‘residential’’ before ‘‘building or mo-
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bile home’’;
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(B) in subsection (c)(3), by striking ‘‘, in
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the case of any residential property, for any
10
structure that is a part of such property’’ and
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inserting ‘‘for any structure that is part of a
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residential property’’;
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(C) in subsection (e)—
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(i) in paragraph (1)—
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(I) by inserting ‘‘residential’’ be-
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fore ‘‘improved real estate’’; and
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(II) by inserting ‘‘residential’’ be-
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fore ‘‘building or mobile home’’ each
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place such term appears; and
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(ii) in paragraph (5)—
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(I) in subparagraph (A)—
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(aa) by inserting ‘‘residen-
23
tial’’ before ‘‘improved real es-
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•HR 1307 IH
tate’’ each place such term ap-
1
pears; and
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(bb) by inserting ‘‘residen-
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tial’’ before ‘‘building or mobile
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home’’ each place such term ap-
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pears;
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(II) in subparagraph (B), by in-
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serting ‘‘residential’’ before ‘‘building
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or mobile home’’ each place such term
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appears; and
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(III) in subparagraph (C), by in-
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serting ‘‘residential’’ before ‘‘building
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or mobile home’’; and
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(D) in subsection (h)—
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(i) by inserting ‘‘residential’’ before
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‘‘improved real estate’’ each place such
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term appears; and
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(ii) in the matter preceding paragraph
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(1), by inserting ‘‘residential’’ before
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‘‘building or mobile home’’.
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(b) AMENDMENTS TO NATIONAL FLOOD INSURANCE
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ACT OF 1968.—The National Flood Insurance Act of
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1968 is amended—
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(1) in section 1364(a) (42 U.S.C. 4104a(a))—
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•HR 1307 IH
(A) in paragraph (1), by inserting ‘‘resi-
1
dential’’ before ‘‘improved real estate’’;
2
(B) in paragraph (2), by inserting ‘‘resi-
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dential’’ before ‘‘improved real estate’’; and
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(C) in paragraph (3)(A), by inserting ‘‘res-
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idential’’ before ‘‘building’’;
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(2) in section 1365 (42 U.S.C. 4104b)—
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(A) in subsection (a)—
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(i) by inserting ‘‘residential’’ before
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‘‘improved real estate’’; and
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(ii) by inserting ‘‘residential’’ before
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‘‘building’’;
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(B) in subsection (b)(2)—
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(i) by inserting ‘‘residential’’ before
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‘‘building’’ each place such term appears;
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and
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(ii) by inserting ‘‘residential’’ before
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‘‘improved real estate’’ each place such
18
term appears;
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(C) in subsection (d), by inserting ‘‘resi-
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dential’’ before ‘‘improved real estate’’ each
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place such term appears; and
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(D) in subsection (e)—
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(i) by inserting ‘‘residential’’ before
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‘‘improved real estate’’; and
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•HR 1307 IH
(ii) by inserting ‘‘residential’’ before
1
‘‘building’’ each place such term appears;
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and
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(3) in section 1370 (42 U.S.C. 4121)—
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(A) in paragraph (8), by inserting ‘‘resi-
5
dential’’ before ‘‘improved real estate’’;
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(B) by redesignating paragraphs (14) and
7
(15) as paragraphs (15) and (16), respectively;
8
and
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(C) by inserting after paragraph (13) the
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following new paragraph:
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‘‘(14) the term ‘residential improved real estate’
12
means improved real estate that—
13
‘‘(A) is primarily used for residential pur-
14
poses, as defined by the Federal entities for
15
lending regulation; and
16
‘‘(B) secures financing or financial assist-
17
ance provided through a federally related single
18
family loan program, as defined by the Federal
19
entities for lending regulation;’’.
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(c) RULE OF CONSTRUCTION.—This section and the
21
amendments made by this section may not be construed
22
to prohibit the Administrator of the Federal Emergency
23
Management Agency from offering flood insurance cov-
24
erage under the National Flood Insurance Program for
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•HR 1307 IH
eligible non-residential properties, other residential multi-
1
family properties, or structures financed with commercial
2
loans, or to prohibit the purchase of such coverage for
3
such eligible properties.
4
Æ
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