Taxpayer Exposure Mitigation Act of 2017

Summary: Taxpayer Exposure Mitigation Act of 2017 This bill amends the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 to limit the required purchase of flood insurance in certain circumstances to only residential properties (currently, the requirement applies to all types of property). It also requires the Federal Emergency Management Agency (FEMA) to annually transfer a portion of the risk from the National Flood Insurance Program (NFIP) to private reinsurance or capital markets. The amount of transferred risk must be based on a probable maximum loss target for NFIP established by FEMA each fiscal year. The bill amends the Biggert-Waters Flood Insurance Reform Act of 2012 to require FEMA to establish standards for the development of alternative flood insurance rate maps by local and state governments. FEMA must consider recommendations made by the Technical Mapping Advisory Council when establishing these standards. FEMA must approve the use of these alternative maps under NFIP.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Taxpayer Exposure Mitigation Act of 
2017''.

SEC. 2. OPT-OUT OF MANDATORY COVERAGE REQUIREMENT FOR COMMERCIAL 
              PROPERTIES.

    (a) Amendments to Flood Disaster Protection Act of 1973.--The Flood 
Disaster Protection Act of 1973 is amended--
            (1) in section 3(a) (42 U.S.C. 4003(a))--
                    (A) in paragraph (10), by striking ``and'' at the 
                end;
                    (B) in paragraph (11), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(12) `residential improved real estate' means improved 
        real estate that--
                    ``(A) is primarily used for residential purposes, 
                as defined by the Federal entities for lending 
                regulation; and
                    ``(B) secures financing or financial assistance 
                provided through a federally related single family loan 
                progam, as defined by the Federal entities for lending 
                regulation.''; and
            (2) in section 102 (42 U.S.C. 4012a)--
                    (A) in subsection (b)--
                            (i) in paragraph (1)(A)--
                                    (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                    (II) by inserting ``residential'' 
                                before ``building or mobile home'';
                            (ii) in paragraph (2)--
                                    (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                    (II) by inserting ``residential'' 
                                before ``building or mobile home''; and
                            (iii) in paragraph (3)--
                                    (I) in subparagraph (A), by 
                                inserting ``residential'' before 
                                ``improved real estate''; and
                                    (II) in the matter after and below 
                                subparagraph (B), by inserting 
                                ``residential'' before ``building or 
                                mobile home'';
                    (B) in subsection (c)(3), by striking ``, in the 
                case of any residential property, for any structure 
                that is a part of such property'' and inserting ``for 
                any structure that is part of a residential property'';
                    (C) in subsection (e)--
                            (i) in paragraph (1)--
                                    (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                    (II) by inserting ``residential'' 
                                before ``building or mobile home'' each 
                                place such term appears; and
                            (ii) in paragraph (5)--
                                    (I) in subparagraph (A)--
                                            (aa) by inserting 
                                        ``residential'' before 
                                        ``improved real estate'' each 
                                        place such term appears; and
                                            (bb) by inserting 
                                        ``residential'' before 
                                        ``building or mobile home'' 
                                        each place such term appears;
                                    (II) in subparagraph (B), by 
                                inserting ``residential'' before 
                                ``building or mobile home'' each place 
                                such term appears; and
                                    (III) in subparagraph (C), by 
                                inserting ``residential'' before 
                                ``building or mobile home''; and
                    (D) in subsection (h)--
                            (i) by inserting ``residential'' before 
                        ``improved real estate'' each place such term 
                        appears; and
                            (ii) in the matter preceding paragraph (1), 
                        by inserting ``residential'' before ``building 
                        or mobile home''.
    (b) Amendments to National Flood Insurance Act of 1968.--The 
National Flood Insurance Act of 1968 is amended--
            (1) in section 1364(a) (42 U.S.C. 4104a(a))--
                    (A) in paragraph (1), by inserting ``residential'' 
                before ``improved real estate'';
                    (B) in paragraph (2), by inserting ``residential'' 
                before ``improved real estate''; and
                    (C) in paragraph (3)(A), by inserting 
                ``residential'' before ``building'';
            (2) in section 1365 (42 U.S.C. 4104b)--
                    (A) in subsection (a)--
                            (i) by inserting ``residential'' before 
                        ``improved real estate''; and
                            (ii) by inserting ``residential'' before 
                        ``building'';
                    (B) in subsection (b)(2)--
                            (i) by inserting ``residential'' before 
                        ``building'' each place such term appears; and
                            (ii) by inserting ``residential'' before 
                        ``improved real estate'' each place such term 
                        appears;
                    (C) in subsection (d), by inserting ``residential'' 
                before ``improved real estate'' each place such term 
                appears; and
                    (D) in subsection (e)--
                            (i) by inserting ``residential'' before 
                        ``improved real estate''; and
                            (ii) by inserting ``residential'' before 
                        ``building'' each place such term appears; and
            (3) in section 1370 (42 U.S.C. 4121)--
                    (A) in paragraph (8), by inserting ``residential'' 
                before ``improved real estate'';
                    (B) by redesignating paragraphs (14) and (15) as 
                paragraphs (15) and (16), respectively; and
                    (C) by inserting after paragraph (13) the following 
                new paragraph:
            ``(14) the term `residential improved real estate' means 
        improved real estate that--
                    ``(A) is primarily used for residential purposes, 
                as defined by the Federal entities for lending 
                regulation; and
                    ``(B) secures financing or financial assistance 
                provided through a federally related single family loan 
                progam, as defined by the Federal entities for lending 
                regulation;''.
    (c) Rule of Construction.--This section and the amendments made by 
this section may not be construed to prohibit the Administrator of the 
Federal Emergency Management Agency from offering flood insurance 
coverage under the National Flood Insurance Program for eligible non-
residential properties, other residential multifamily properties, or 
structures financed with commercial loans, or to prohibit the purchase 
of such coverage for such eligible properties.

SEC. 3. RISK TRANSFER REQUIREMENT.

    Subsection (e) of section 1345 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4081(e)) is amended--
            (1) by striking ``(e) Risk Transfer.--The Administrator'' 
        and inserting the following:
    ``(e) Risk Transfer.--
            ``(1) Authority.--The Administrator''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Required risk transfer coverage.--
                    ``(A) Requirement.--Not later than the expiration 
                of the 18-month period beginning upon the date of the 
                enactment of this paragraph and at all times 
                thereafter, the Administrator shall annually cede a 
                portion of the risk of the flood insurance program 
                under this title to the private reinsurance or capital 
                markets, or any combination thereof, and at rates and 
                terms that the Administrator determines to be 
                reasonable and appropriate, in an amount that--
                            ``(i) is sufficient to maintain the ability 
                        of the program to pay claims; and
                            ``(ii) manages and limits the annual 
                        exposure of the flood insurance program to 
                        flood losses in accordance with the probable 
                        maximum loss target established for such year 
                        under subparagraph (B).
                    ``(B) Probable maximum loss target.--The 
                Administrator shall for each fiscal year, establish a 
                probable maximum loss target for the national flood 
                insurance program that shall be the maximum probable 
                loss under the national flood insurance program that is 
                expected to occur in such fiscal year.
                    ``(C) Considerations.--In establishing the probable 
                maximum loss target under subparagraph (B) for each 
                fiscal year and carrying out subparagraph (A), the 
                Administrator shall consider--
                            ``(i) the probable maximum loss targets for 
                        other United States public natural catastrophe 
                        insurance programs, including as State wind 
                        pools and earthquake programs;
                            ``(ii) the probable maximum loss targets of 
                        other risk management organizations, including 
                        the Federal National Mortgage Association and 
                        the Federal Home Loan Mortgage Corporation;
                            ``(iii) catastrophic, actuarial, and other 
                        appropriate data modeling results of the 
                        national flood insurance program portfolio;
                            ``(iv) the availability of funds in the 
                        National Flood Insurance Fund established under 
                        section 1310 (42 U.S.C. 4017);
                            ``(v) the availability of funds in the 
                        National Flood Insurance Reserve Fund 
                        established under section 1310A (42 U.S.C. 
                        4017a);
                            ``(vi) the availability of borrowing 
                        authority under section 1309 (42 U.S.C. 4016);
                            ``(vii) the ability of the Administrator to 
                        repay outstanding debt;
                            ``(viii) amounts appropriated to the 
                        Administrator to carry out the national flood 
                        insurance program;
                            ``(ix) reinsurance, capital markets, 
                        catastrophe bonds, collateralized reinsurance, 
                        resilience bonds, and other insurance-linked 
                        securities, and other risk transfer 
                        opportunities; and
                            ``(x) any other factor the Administrator 
                        determines appropriate.
                    ``(D) Multi-year contracts.--Nothing in this 
                paragraph may be construed to prevent or prohibit the 
                Administrator from complying with the requirement under 
                subparagraph (A) regarding ceding risk through 
                contracts having a duration longer than one year.''.

SEC. 4. COMMUNITY FLOOD MAPS.

    (a) Technical Mapping Advisory Council.--Section 100215 of the 
Biggert-Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 4101a) is 
amended--
            (1) in subsection (c)--
                    (A) in paragraph (5)(B), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (6) as paragraph 
                (9); and
                    (C) by inserting after paragraph (5) the following 
                new paragraphs:
            ``(6) recommend to the Administrator methods or actions to 
        make the flood mapping processes more efficient;
            ``(7) recommend to the Administrator methods or actions to 
        minimize any cost, data, and paperwork requirements of the 
        flood mapping processes;
            ``(8) assist communities, and in particular smaller 
        communities, in locating the resources required to participate 
        in the development of flood elevations and flood hazard area 
        designations; and''; and
            (2) by adding at the end the following new subsection:
    ``(m) Community Flood Maps.--
            ``(1) Standards and procedures.--In addition to the other 
        duties of the Council under this section, not later than the 
        expiration of the 12-month period beginning on the date of the 
        enactment of this subsection, the Council shall recommend to 
        the Administrator standards and requirements for chief 
        executive officers, or entities designated by chief executive 
        officers, of States and communities participating in the 
        National Flood Insurance Program to use in mapping flood 
        hazards located in States and communities that choose to 
        develop alternative maps to the flood insurance rate maps 
        developed by the Agency. The recommended standards and 
        requirements shall include procedures for providing 
        notification and appeal rights to individuals within the 
        communities of the proposed flood elevation determinations.
            ``(2) Exemption from rulemaking.--Until such time as the 
        Administrator promulgates regulations implementing paragraph 
        (1) of this subsection, the Administrator may, notwithstanding 
        any other provision of law, adopt policies and procedures 
        necessary to implement such paragraphs without undergoing 
        notice and comment rulemaking and without conducting regulatory 
        analyses otherwise required by statute, regulation, or 
        executive order.''.
    (b) FEMA Identification of Flood-prone Areas.--Subsection (a) of 
section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101(a)) is amended--
            (1) in paragraph (2), by striking the period at the end and 
        inserting ``; and'';
            (2) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A), and (B), respectively, and realigning such 
        subparagraphs so as to be indented 4 ems from the left margin;
            (3) by striking ``is authorized to consult'' and inserting 
        the following: ``is authorized--
            ``(1) to consult'';
            (4) by adding at the end the following new paragraph:
            ``(2) to receive proposed alternative maps from communities 
        developed pursuant to standards and requirements recommended by 
        the Technical Mapping Advisory Council, as required by section 
        100215(m) of the Biggert-Waters Flood Insurance Reform Act of 
        2012 (42 U.S.C. 4101a(m)) and adopted by the Administrator as 
        required by section 100216(c)(3) of such Act (42 U.S.C. 
        4101b(c)(3)), so that the Administrator may--
                    ``(A) publish information with respect to all flood 
                plain areas, including coastal areas located in the 
                United States, which have special flood hazards, and
                    ``(B) establish or update flood-risk zone data in 
                all such areas, and make estimates with respect to the 
                rates of probable flood caused loss for the various 
                flood risk zones for each of these areas until the date 
                specified in section 1319.''.
    (c) National Flood Mapping Program.--Section 100216 of the Biggert-
Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 4101b) is 
amended--
            (1) in subsection (a), by inserting ``prepared by the 
        Administrator, or by a community pursuant to section 1360(a)(2) 
        of the National Flood Insurance Act of 1968,'' after ``Program 
        rate maps'';
            (2) in subsection (c)--
                    (A) in paragraph (1)(B), by striking ``and'' at the 
                end;
                    (B) in paragraph (2)(C), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(3) establish and adopt standards and requirements for 
        development by States and communities of alternative flood 
        insurance rate maps to be submitted to the Administrator 
        pursuant to section 1360(a)(2) of the National Flood Insurance 
        Act of 1968, taking into consideration the recommendations of 
        the Technical Mapping Advisory Council made pursuant to section 
        100215(m) of this Act (42 U.S.C. 4101a(m)); and
            ``(4) in the case of proposed alternative maps received by 
        the Administrator pursuant to such section 1360(a)(2), not 
        later than the expiration of the 6-month period beginning upon 
        receipt of such proposed alternative maps--
                    ``(A) determine whether such maps were developed in 
                accordance with the standards and requirements adopted 
                pursuant to paragraph (3) of this subsection; and
                    ``(B) approve or disapprove such proposed maps for 
                use under National Flood Insurance Program.''; and
            (3) in subsection (d)(1), by inserting ``maximum'' before 
        ``30-day period'' each place such term appears in subparagraphs 
        (B) and (C).