What This Bill Does
This bill creates a new assistance program for people who buy flood insurance through the National Flood Insurance Program. The bill requires the Federal Emergency Management Agency (a government agency that handles disasters) to give graduated discounts (step-by-step price reductions) to eligible people so their insurance costs do not exceed 1 percent of the area median income (the middle income level for their region). The bill also sets aside $250,000,000 annually to pay for these discounts.
Who It Affects
- Individuals with household incomes not exceeding 120 percent of area median income who own primary residential dwellings (main homes where people live)
- Businesses with 100 or fewer employees that meet a hardship metric (measurement of financial difficulty) created by the agency
- Not-for-profit organizations that meet the hardship metric
- The Federal Emergency Management Agency Administrator (the head of the agency that will run the program)
- Congress (which receives reports about the program)
Key Provisions
- The Federal Emergency Management Agency Administrator must establish a means-tested assistance program providing graduated discounts for insurance costs within 1 year of the bill becoming law (Sec. 2(a))
- Eligible policyholders who apply for assistance cannot be charged an insurance premium rate exceeding 1 percent of the area median income for their property's location (Sec. 2(b))
- The Administrator must issue regulations and guidance within 1 year, including a hardship metric for small businesses and not-for-profit entities (Sec. 2(d))
- The Administrator must require monthly installment payments for flood insurance premiums within 180 days of the bill becoming law, or explain to Congress why this cannot be done (Sec. 3)
- $250,000,000 is appropriated annually, and the Administrator must spend at least 95 percent of this amount each fiscal year (Sec. 2(f))
What Changes
If this bill becomes law, eligible lower-income homeowners, qualifying small businesses, and eligible not-for-profit organizations will receive discounts on their flood insurance premiums. People will also gain the option to pay their flood insurance premiums monthly instead of in lump sums. The Federal Emergency Management Agency will create new rules and an application process for this assistance program.
Important Definitions
- **Area median income**: the middle income level for a specific geographic area where a property is located
- **Means-tested program**: assistance based on a person's or business's income or financial need
- **Covered property**: a primary residential dwelling or personal property (belongings) relating to that home
- **Eligible policyholder**: an individual, small business with 100 or fewer employees, or not-for-profit organization that holds a flood insurance policy and meets income or hardship requirements
- **Insurance costs**: risk premiums, fees, surcharges, and other amounts charged for flood insurance
Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION H. R. 1540
To establish a means-tested assistance program for national flood insurance
program policyholders, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 10, 2023
Mr. CARTWRIGHT introduced the following bill; which was referred to the
Committee on Financial Services
A BILL
To establish a means-tested assistance program for national
flood insurance program policyholders, and for other pur-
poses.
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 ‘‘National Flood Insur-
4
ance Program Affordability Act’’.
5
SEC. 2. MEANS-TESTED ASSISTANCE FOR NATIONAL FLOOD
6
INSURANCE PROGRAM POLICYHOLDERS.
7
(a) IN GENERAL.—The Administrator of the Federal
8
Emergency Management Agency shall, not later than 1
9
year after the date of the enactment of this Act, establish
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•HR 1540 IH
a means-tested program under which the Administrator
1
provides assistance to eligible policyholders in the form of
2
graduated discounts for insurance costs with respect to
3
covered properties.
4
(b) DISCOUNTS.—The Administrator shall use
5
amounts provided under this section to establish grad-
6
uated discounts available to eligible policyholders under
7
this section, with respect to covered properties, such that
8
the chargeable premium rate for an eligible policyholder
9
that applies for assistance under this section may not ex-
10
ceed 1 percent of the area median income for the area
11
in which the property to which the policy applies is lo-
12
cated.
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(c) APPLICATION.—To receive assistance under this
14
Act, an eligible policyholder shall submit an application
15
to the Administrator at such time, in such manner, and
16
containing such information as the Administrator may
17
reasonably require and assistance will no longer be avail-
18
able when the amounts appropriated pursuant to sub-
19
section (f) have been expended for a fiscal year.
20
(d) RULEMAKING AND GUIDANCE.—Not later than 1
21
year after the date of the enactment of this Act, the Ad-
22
ministrator shall issue such regulations and guidance as
23
the Administrator determines necessary to carry out this
24
Act, including a hardship metric for small businesses and
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not-for-profit entities to qualify for assistance under this
1
Act.
2
(e) REPORT.—Not later than 1 year after the date
3
of the enactment of this section, the Administrator shall
4
submit to the Congress, a report that—
5
(1) addresses the feasibility of making eligibility
6
for assistance under the program established under
7
this Act based on a consideration of an eligible pol-
8
icyholder’s principal, interest, taxes, and insurance
9
instead of household income as a percent of area
10
medium income; and
11
(2) outlines how the Administrator could use in-
12
come eligibility for other Federal programs to deter-
13
mine eligibility for participation in the program es-
14
tablished under this Act.
15
(f) APPROPRIATION.—
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(1) IN GENERAL.—There is appropriated, annu-
17
ally, to the Administrator, out of any money in the
18
Treasury not otherwise appropriated, $250,000,000,
19
to carry out the program established by the Admin-
20
istrator under subsection (a).
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(2) EXPENDITURE
REQUIREMENT.—The Ad-
22
ministrator shall, each fiscal year, expend not less
23
than 95 percent of the amount appropriated for such
24
fiscal year under paragraph (1).
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SEC. 3. MONTHLY INSTALLMENT PAYMENT FOR PREMIUMS.
1
Not later than 180 days after the date of enactment
2
of this Act, the Administrator shall—
3
(1) implement the requirement for monthly in-
4
stallment payments of premiums provided under sec-
5
tion 1308(g) of the National Flood Insurance Act of
6
1968 (42 U.S.C. 4015(g)); or
7
(2) submit to Congress an explanation of the
8
reasons why the Administrator cannot implement
9
the requirement described in paragraph (1) during
10
that 180-day period.
11
SEC. 4. DEFINITIONS.
12
In this Act:
13
(1) ADMINISTRATOR.—The term ‘‘Adminis-
14
trator’’ means the Administrator of the Federal
15
Emergency Management Agency.
16
(2) COVERED PROPERTY.—The term ‘‘covered
17
property’’ means—
18
(A) a primary residential dwelling; or
19
(B) personal property relating to a dwell-
20
ing described in subparagraph (A).
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(3) ELIGIBLE POLICYHOLDER.—The term ‘‘eli-
22
gible policyholder’’ means—
23
(A) a person who—
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(i) is a national flood insurance pro-
1
gram policyholder on or after the date of
2
the enactment of this Act; and
3
(ii) has a household income that is not
4
more than 120 percent of the area median
5
income for the area in which the property
6
to which the policy applies is located;
7
(B) a business with not more than 100
8
employees that—
9
(i) is a national flood insurance pro-
10
gram policyholder on or after the date of
11
the enactment of this Act; and
12
(ii) satisfies the hardship metric pub-
13
lished by the Administrator under section
14
2; or
15
(C) a not-for-profit organization that—
16
(i) is a national flood insurance pro-
17
gram policyholder on or after the date of
18
the enactment of this Act; and
19
(ii) satisfies the hardship metric pub-
20
lished by the Administrator under section
21
2.
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(4) INSURANCE COSTS.—The term ‘‘insurance
23
costs’’ means, with respect to a covered property for
24
a year—
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(A) risk premiums and fees estimated
1
under section 1307 of the National Flood In-
2
surance Act of 1968 (42 U.S.C. 4014) and
3
charged under section 1308 of such Act (42
4
U.S.C. 4015);
5
(B) surcharges assessed under sections
6
1304 and 1308A of such Act (42 U.S.C. 4011,
7
4015a); and
8
(C) any amount established under section
9
1310A(c) of such Act (42 U.S.C. 4017a).
10
Æ
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