National Flood Insurance Program Reauthorization and Reform Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3872 To reauthorize the National Flood Insurance Program, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 22, 2019 Mr. PALLONE (for himself, Mr. HIGGINS of Louisiana, Mr. PASCRELL, Ms. SHERRILL, Mr. VAN DREW, Mr. SIRES, Mr. NORCROSS, Mr. MALINOWSKI, Mrs. WATSON COLEMAN, Ms. MUCARSEL-POWELL, Mr. CRIST, Mr. PAYNE, Mr. KIM, Mr. SMITH of New Jersey, Mrs. MURPHY, and Mr. GOTTHEIMER) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Transportation and Infrastructure, for a period to be subsequently de- termined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To reauthorize the National Flood Insurance Program, 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 ‘‘National Flood Insur- 4 ance Program Reauthorization and Reform Act of 2019’’. 5 SEC. 2. TABLE OF CONTENTS. 6 The table of contents for this Act is as follows: 7 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 3872 IH Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Definitions. TITLE I—REAUTHORIZATION AND AFFORDABILITY Sec. 101. Reauthorization. Sec. 102. Cap on annual premium increases. Sec. 103. Means tested affordability voucher. Sec. 104. Optional monthly installment premium payment plans. Sec. 105. Study on business interruption coverage. Sec. 106. Cooperative coverage fairness. Sec. 107. Coverage limits. Sec. 108. Study on participation rates. TITLE II—MITIGATION AND MAPPING Sec. 201. Mitigation for high-risk properties. Sec. 202. Increased cost of compliance coverage. Sec. 203. Flood mitigation assistance grants. Sec. 204. Urban mitigation opportunities. Sec. 205. Community Rating System Regional Coordinator. Sec. 206. Mitigation loan program. Sec. 207. Revolving loan funds. Sec. 208. Mapping modernization. Sec. 209. Protected areas. Sec. 210. Community-wide flood mitigation activities. TITLE III—SOLVENCY Sec. 301. Forbearance on NFIP interest payments. Sec. 302. Cap on Write Your Own company compensation. Sec. 303. Taxpayer protection. Sec. 304. Vendor costs; transparency. Sec. 305. Availability of NFIP claims data. Sec. 306. Refusal of mitigation assistance. TITLE IV—POLICYHOLDER PROTECTION AND FAIRNESS Sec. 401. Earth movement fix and engineer standards. Sec. 402. Coverage of pre-FIRM condominium basements and study on street raising. Sec. 403. Guidance on remediation and policyholder duties. Sec. 404. Appeal of decisions relating to flood insurance coverage. Sec. 405. Accountability for underpayments and overpayments by Write Your Own companies. Sec. 406. Policyholders’ right to know. Sec. 407. Increasing statute of limitations for lawsuits. Sec. 408. Authority to terminate contractors and vendors. Sec. 409. Easing proof of loss requirements. Sec. 410. Deadline for claim processing. Sec. 411. No manipulation of engineer reports. Sec. 412. Improved training of floodplain managers, agents, and adjusters. Sec. 413. Attorney fee shifting. Sec. 414. DOJ defense against policyholder lawsuits. Sec. 415. Pilot program for pre-existing structural conditions. VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 3872 IH Sec. 416. Agent Advisory Council. Sec. 417. Disclosure of flood risk information upon transfer of property. SEC. 3. DEFINITIONS. 1 In this Act: 2 (1) ADMINISTRATOR.—The term ‘‘Adminis- 3 trator’’ means the Administrator of the Federal 4 Emergency Management Agency. 5 (2) FEDERAL FLOOD INSURANCE.—The term 6 ‘‘Federal flood insurance’’ means an insurance policy 7 made available under the National Flood Insurance 8 Act of 1968 (42 U.S.C. 4001 et seq.). 9 (3) NATIONAL FLOOD INSURANCE PROGRAM.— 10 The term ‘‘National Flood Insurance Program’’ 11 means the program established under the National 12 Flood Insurance Act of 1968 (42 U.S.C. 4001 et 13 seq.). 14 (4) NATIONAL FLOOD MITIGATION FUND.—The 15 term ‘‘National Flood Mitigation Fund’’ means the 16 fund established under section 1367 of the National 17 Flood Insurance Act of 1968 (42 U.S.C. 4104d). 18 (5) WRITE YOUR OWN COMPANY.—The term 19 ‘‘Write Your Own Company’’ means a private prop- 20 erty insurance company that participates in the 21 Write Your Own Program. 22 (6) WRITE YOUR OWN PROGRAM.—The term 23 ‘‘Write Your Own Program’’ means the program 24 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 3872 IH under which the Federal Emergency Management 1 Agency enters into a standard arrangement with pri- 2 vate property insurance companies to— 3 (A) sell contracts for Federal flood insur- 4 ance under their own business lines of insur- 5 ance; and 6 (B) adjust and pay claims arising under 7 the contracts described in subparagraph (A). 8 TITLE I—REAUTHORIZATION 9 AND AFFORDABILITY 10 SEC. 101. REAUTHORIZATION. 11 (a) FINANCING.—Section 1309(a) of the National 12 Flood Insurance Act of 1968 (42 U.S.C. 4016(a)) is 13 amended by striking ‘‘September 30, 2019’’ and inserting 14 ‘‘September 30, 2024’’. 15 (b) PROGRAM EXPIRATION.—Section 1319 of the Na- 16 tional Flood Insurance Act of 1968 (42 U.S.C. 4026) is 17 amended by striking ‘‘September 30, 2019’’ and inserting 18 ‘‘September 30, 2024’’. 19 (c) PROGRAM CONTINUATION.— 20 (1) IN GENERAL.—Section 1310 of the Na- 21 tional Flood Insurance Act of 1968 (42 U.S.C. 22 4017) is amended by adding at the end the fol- 23 lowing: 24 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 3872 IH ‘‘(g) Amounts in the National Flood Insurance Re- 1 serve Fund established under section 1310A may be cred- 2 ited to the National Flood Insurance Fund to enter into, 3 and renew, contracts for flood insurance under this title 4 during any lapse in appropriations.’’. 5 (2) TECHNICAL AND CONFORMING AMEND- 6 MENTS.—Section 1310A(a)(2) of the National Flood 7 Insurance Act of 1968 (42 U.S.C. 4017A(a)(2)) is 8 amended— 9 (A) in subparagraph (B), by striking 10 ‘‘and’’ at the end; 11 (B) in subparagraph (C), by striking the 12 period at the end and inserting ‘‘; and’’; and 13 (C) by adding at the end the following: 14 ‘‘(D) for the purpose described in section 15 1310(g).’’. 16 SEC. 102. CAP ON ANNUAL PREMIUM INCREASES. 17 (a) DEFINITION.—In this section, the term ‘‘covered 18 cost’’ means— 19 (1) the amount of an annual premium with re- 20 spect to any policy for flood insurance under the Na- 21 tional Flood Insurance Program; 22 (2) any surcharge imposed with respect to a 23 policy described in paragraph (1), including a sur- 24 charge imposed under— 25 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 3872 IH (A) section 1304(b) of the National Flood 1 Insurance Act of 1968 (42 U.S.C. 4011(b)); or 2 (B) section 1308A(a) of the National 3 Flood Insurance Act of 1968 (42 U.S.C. 4 4015a(a)); and 5 (3) a fee described in paragraph (1)(B)(iii) or 6 (2) of section 1307(a) of the National Flood Insur- 7 ance Act of 1968 (42 U.S.C. 4014(a)). 8 (b) LIMITATION ON INCREASES.—During the 5-year 9 period beginning on the date of enactment of this Act, and 10 notwithstanding section 1308(e) of the National Flood In- 11 surance Act of 1968 (42 U.S.C. 4015(e)), the Adminis- 12 trator may not, in any year, increase the amount of any 13 covered cost by an amount that is more than 9 percent, 14 as compared with the amount of the covered cost during 15 the previous year. 16 (c) RULE OF CONSTRUCTION.—Nothing in sub- 17 section (b) may be construed as prohibiting the Adminis- 18 trator from reducing, in any year, the amount of any cov- 19 ered cost, as compared with the amount of the covered 20 cost during the previous year. 21 (d) AVERAGE HISTORICAL LOSS YEAR.—Section 22 1308 of the National Flood Insurance Act of 1968 (42 23 U.S.C. 4015) is amended by striking subsection (h) and 24 inserting the following: 25 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 3872 IH ‘‘(h) RULE OF CONSTRUCTION.—For purposes of this 1 section, the calculation of an ‘average historical loss year’ 2 shall be computed in accordance with generally accepted 3 actuarial principles.’’. 4 (e) DISCLOSURE WITH RESPECT TO THE AFFORD- 5 ABILITY STANDARD.—Section 1308(j) of the National 6 Flood Insurance Act of 1968 (42 U.S.C. 4015(j)) is 7 amended, in the second sentence, by inserting ‘‘and shall 8 include in the report the number of those exceptions as 9 of the date on which the Administrator submits the report 10 and the location of each policyholder insured under those 11 exceptions, organized by county and State’’ after ‘‘of the 12 Senate’’. 13 SEC. 103. MEANS TESTED AFFORDABILITY VOUCHER. 14 Chapter I of the National Flood Insurance Act of 15 1968 (42 U.S.C. 4011 et seq.) is amended by adding at 16 the end the following: 17 ‘‘SEC. 1326. AFFORDABILITY ASSISTANCE. 18 ‘‘(a) AFFORDABILITY ASSISTANCE FUND.— 19 ‘‘(1) ESTABLISHMENT.—The Administrator 20 shall establish in the Treasury of the United States 21 an Affordability Assistance Fund (referred to in this 22 section as the ‘Fund’), which shall be— 23 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 3872 IH ‘‘(A) an account separate from any other 1 accounts or funds available to the Adminis- 2 trator; and 3 ‘‘(B) available without fiscal year limita- 4 tion. 5 ‘‘(2) USE OF FUNDS.—Amounts from the Fund 6 shall be available to provide financial assistance 7 under subsection (b). 8 ‘‘(3) SOURCE OF FUNDS.—The Fund shall be 9 credited with the amounts saved as a direct result 10 of the limitation imposed under section 1311(b). 11 ‘‘(b) FINANCIAL ASSISTANCE.— 12 ‘‘(1) DEFINITIONS.—In this subsection— 13 ‘‘(A) the term ‘adjusted gross income’ has 14 the meaning given the term in section 62 of the 15 Internal Revenue Code of 1986; 16 ‘‘(B) the term ‘eligible household’ means a 17 household for which— 18 ‘‘(i) housing expenses exceed 30 per- 19 cent of the adjusted gross income of the 20 household in a year; and 21 ‘‘(ii)(I) the total assets owned by the 22 household are in an amount that is not 23 greater than 220 percent of the median 24 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 3872 IH household income for the State in which 1 the household is located; or 2 ‘‘(II) with respect to a household that 3 has a total household income that is not 4 greater than 120 percent of the area me- 5 dian income for the area in which the 6 household is located, the amount of pre- 7 miums, surcharges, and fees for a flood in- 8 surance policy provided under this title in 9 a year for the household exceeds 1 percent 10 of the coverage limit of that policy under 11 section 1306(b); and 12 ‘‘(C) the term ‘housing expenses’ means, 13 with respect to a household, the total amount 14 that the household spends in a year on— 15 ‘‘(i) mortgage payments; 16 ‘‘(ii) property taxes; 17 ‘‘(iii) homeowners insurance; and 18 ‘‘(iv) premiums for flood insurance 19 under the national flood insurance pro- 20 gram. 21 ‘‘(2) AUTHORITY.— 22 ‘‘(A) OTHER FINANCIAL ASSISTANCE.— 23 The Administrator shall provide a voucher, 24 grant, or premium credit to an eligible house- 25 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 3872 IH hold for a year in an amount that, subject to 1 subparagraph (B), is equal to the lesser of— 2 ‘‘(i) the difference between— 3 ‘‘(I) the housing expenses of the 4 household for the year; and 5 ‘‘(II) 30 percent of the adjusted 6 gross income of the household for the 7 year; and 8 ‘‘(ii) the cost of premiums for the 9 household for flood insurance under the 10 national flood insurance program for the 11 year. 12 ‘‘(B) REDUCTION.—The amount of the as- 13 sistance provided under subparagraph (A) to an 14 eligible household shall be reduced by 1 percent 15 for each percent that the income of the eligible 16 household exceeds 120 percent of the median 17 household income for the State in which the 18 property that is the subject of the assistance is 19 located. 20 ‘‘(3) RELATIONSHIPS WITH OTHER AGEN- 21 CIES.—The Administrator may enter into a memo- 22 randum of understanding with the head of any other 23 Federal agency to administer the paragraph 24 (2)(A).’’. 25 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 3872 IH SEC. 104. OPTIONAL MONTHLY INSTALLMENT PREMIUM 1 PAYMENT PLANS. 2 Section 1308(g) of the National Flood Insurance Act 3 of 1968 (42 U.S.C. 4015(g)) is amended— 4 (1) by striking ‘‘With respect to’’ and inserting 5 the following: 6 ‘‘(1) ANNUAL OR MONTHLY OPTION.—Subject 7 to paragraph (2), with respect to’’; and 8 (2) by adding at the end the following: 9 ‘‘(2) MONTHLY INSTALLMENT.—With respect 10 to a policyholder that opts under paragraph (1) to 11 pay premiums on a monthly basis, the Administrator 12 may charge the policyholder an annual fee of not 13 more than $15. 14 ‘‘(3) EXEMPTION FROM RULE MAKING; PILOT 15 PROGRAM.—During the period beginning on the date 16 of enactment of this paragraph and ending on the 17 date on which the Administrator promulgates regu- 18 lations carrying out paragraph (1), the Adminis- 19 trator may, notwithstanding any other provision of 20 law— 21 ‘‘(A) adopt policies and procedures to carry 22 out that paragraph without— 23 ‘‘(i) undergoing notice and comment 24 rule making under section 553 of title 5, 25 United States Code; or 26 VerDate Sep 11 2014 19:54 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3872.IH H3872 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 3872 IH ‘‘(ii) conducting regulatory analyses 1 otherwise required by statute, regulation, 2 or Executive order; or 3 ‘‘(B) carry out that paragraph by estab- 4 lishing a p [Text truncated for display. 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