Homeowners' Defense Act of 2013

Summary:  Homeowners' Defense Act of 2013 - Establishes the National Catastrophe Risk Consortium, as a non-federal, non-profit entity, to ensure the availability and affordability of homeowners' insurance coverage for catastrophic events.  Directs the Consortium to: (1) maintain an inventory of catastrophe risk obligations held by state reinsurance funds, state residual insurance market entities, and state-sponsored providers of natural catastrophe insurance; (2) issue, on a conduit basis, securities and other financial instruments linked to catastrophe risks insured or reinsured through Consortium members; (3) coordinate reinsurance contracts; (4) act as a centralized repository of state risk information accessible by certain private-market participants; and (5) establish a database to perform research and analysis that encourages standardization of the risk-linked securities market.  Shields the federal government and the Consortium from liability for Consortium actions.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Homeowners' 
Defense Act of 2013''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Establishment; status; principal office; membership.
Sec. 4. Functions.
Sec. 5. Powers.
Sec. 6. Nonprofit entity; conflicts of interest; audits.
Sec. 7. Management.
Sec. 8. Staff; experts and consultants.
Sec. 9. Federal liability.
Sec. 10. Authorization of appropriations.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the United States has a history of catastrophic natural 
        disasters, including hurricanes, tornadoes, flood, fire, 
        earthquakes, and volcanic eruptions;
            (2) although catastrophic natural disasters occur 
        infrequently, they will continue to occur and are predictable;
            (3) such disasters generate large economic losses and a 
        major component of those losses comes from damage and 
        destruction to homes;
            (4) for the majority of Americans, their investment in 
        their home represents their single biggest asset and the 
        protection of that investment is paramount to economic and 
        social stability;
            (5) the United States needs to take and support State 
        actions to be better prepared for and better protected from 
        catastrophes;
            (6) as the risk of catastrophic losses grows, so do the 
        risks that any premiums collected by private insurers for 
        extending coverage will be insufficient to cover future 
        catastrophes, and private insurers, in an effort to protect 
        their shareholders and policyholders (in the case of mutually 
        owned companies), have thus significantly raised premiums and 
        curtailed insurance coverage in States exposed to major 
        catastrophes;
            (7) such effects on the insurance industry have been 
        harmful to economic activity in States exposed to major 
        catastrophes and have placed significant burdens on residents 
        of such States;
            (8) Hurricanes Katrina, Rita, and Wilma struck the United 
        States in 2005, causing over $200,000,000,000 in total economic 
        losses, and insured losses to homeowners in excess of 
        $50,000,000,000;
            (9) while the total costs of Hurricane Sandy have not yet 
        been calculated, Fitch Ratings, a global credit ratings agency, 
        has estimated that insured losses will amount to between 
        $20,000,000,000 and $25,000,000,000;
            (10) the Federal Government has provided and will continue 
        to provide resources to pay for losses from future 
        catastrophes; and
            (11) it is the proper role of the Federal Government to 
        prepare for and protect its citizens from catastrophes and to 
        facilitate consumer protection, victim assistance, and 
        recovery, including financial recovery.
    (b) Purposes.--The purpose of this Act is to establish a national 
catastrophic risk consortium to ensure the availability and 
affordability of homeowners' insurance coverage for catastrophic 
events.

SEC. 3. ESTABLISHMENT; STATUS; PRINCIPAL OFFICE; MEMBERSHIP.

    (a) Establishment.--There is established an entity to be known as 
the ``National Catastrophe Risk Consortium'' (in this Act referred to 
as the ``Consortium'').
    (b) Status.--The Consortium is not a department, agency, or 
instrumentality of the United States Government.
    (c) Principal Office.--The principal office and place of business 
of the Consortium shall be such location within the United States 
determined by the Board of Directors to be the most advantageous for 
carrying out the purpose and functions of the Consortium.
    (d) Membership.--Any State that has established a reinsurance fund 
or has authorized the operation of a State residual insurance market 
entity, or State-sponsored provider of natural catastrophe insurance, 
shall be eligible to participate in the Consortium.

SEC. 4. FUNCTIONS.

    The Consortium shall--
            (1) work with all States, particularly those participating 
        in the Consortium, to gather and maintain an inventory of 
        catastrophe risk obligations held by State reinsurance funds, 
        State residual insurance market entities, and State-sponsored 
        providers of natural catastrophe insurance;
            (2) at the discretion of the affected members and on a 
        conduit basis, issue securities and other financial instruments 
        linked to the catastrophe risks insured or reinsured through 
        members of the Consortium in the capital markets;
            (3) coordinate reinsurance contracts between participating, 
        qualified reinsurance funds and private parties;
            (4) act as a centralized repository of State risk 
        information that can be accessed by private-market participants 
        seeking to participate in the transactions described in 
        paragraphs (2) and (3) of this section;
            (5) establish a catastrophe risk database to perform 
        research and analysis that encourages standardization of the 
        risk-linked securities market;
            (6) perform any other functions, other than assuming risk 
        or incurring debt, that are deemed necessary to aid in the 
        transfer of catastrophe risk from participating States to 
        private parties; and
            (7) submit annual reports to Congress describing the 
        activities of the Consortium for the preceding year, and the 
        first such annual report shall include an assessment of the 
        costs to States and regions associated with catastrophe risk 
        and an analysis of the costs and benefits, for States not 
        participating in the Consortium, of such nonparticipation.

SEC. 5. POWERS.

    The Consortium--
            (1) may make and perform such contracts and other 
        agreements with any individual or other private or public 
        entity however designated and wherever situated, as may be 
        necessary for carrying out the functions of the Consortium; and
            (2) shall have such other powers, other than the power to 
        assume risk or incur debt, as may be necessary and incident to 
        carrying out this Act.

SEC. 6. NONPROFIT ENTITY; CONFLICTS OF INTEREST; AUDITS.

    (a) Nonprofit Entity.--The Consortium shall be a nonprofit entity 
and no part of the net earnings of the Consortium shall inure to the 
benefit of any member, founder, contributor, or individual.
    (b) Conflicts of Interest.--No director, officer, or employee of 
the Consortium shall in any manner, directly or indirectly, participate 
in the deliberation upon or the determination of any question affecting 
his or her personal interests or the interests of any Consortium, 
partnership, or organization in which he or she is directly or 
indirectly interested.
    (c) Audits.--
            (1) Annual audit.--The financial statements of the 
        Consortium shall be audited annually in accordance with 
        generally accepted auditing standards by independent certified 
        public accountants.
            (2) Reports.--The report of each annual audit pursuant to 
        paragraph (1) shall be included in the annual report submitted 
        in accordance with section 4(7).
    (d) Prohibition on Election and Lobbying Activities.--
            (1) Federal.--The Consortium may not--
                    (A) make any contribution to a candidate for 
                election for Federal office or to a political 
                committee;
                    (B) employ or retain--
                            (i) a registered lobbyist under the 
                        Lobbying Disclosure Act of 1995 (2 U.S.C. 1601 
                        et seq.); or
                            (ii) an organization that employs one or 
                        more lobbyists and is registered under section 
                        4(a)(2) of such Act (2 U.S.C. 1603(a)(2)); or
                    (C) provide any thing of value, other than 
                educational materials or information, to any elected 
                official of the Federal Government.
        For purposes of this paragraph, the terms ``contribution'', 
        ``candidate'', ``Federal office'', and ``political committee'' 
        have the meanings given such terms in section 301 of the 
        Federal Election Campaign Act of 1971 (2 U.S.C. 431).
            (2) Consortium.--The Consortium may not--
                    (A) make any contribution to a candidate for 
                election for any State or local office or to any 
                committee, club, association, or other group that 
                receives contributions or makes expenditures for the 
                purpose of influencing any such election;
                    (B) employ or retain any person who engages in 
                influencing legislating (as such term is defined in 
                section 4911(d) of the Internal Revenue Code of 1986 
                (26 U.S.C. 4911(d))) of any State or local legislative 
                body; or
                    (C) provide any thing of value, other than 
                educational materials or information, to any elected 
                official of any State or local government.

SEC. 7. MANAGEMENT.

    (a) Board of Directors; Membership; Designation of Chairperson.--
            (1) Board of directors.--The management of the Consortium 
        shall be vested in a board of directors (referred to in this 
        Act as the ``Board'') composed of not less than 3 members.
            (2) Chairperson.--The Secretary of the Treasury, or the 
        designee of the Secretary, shall serve as the chairperson of 
        the Board.
            (3) Membership.--The members of the Board shall include--
                    (A) the Secretary of Homeland Security and the 
                Secretary of Commerce, or the designees of such 
                Secretaries, respectively, but only during such times 
                as there are fewer than two States participating in the 
                Consortium; and
                    (B) a member from each State participating in the 
                Consortium, who shall be appointed by such State.
    (b) Bylaws.--The Board may prescribe, amend, and repeal such bylaws 
as may be necessary for carrying out the functions of the Consortium.
    (c) Compensation, Actual, Necessary, and Transportation Expenses.--
            (1) Non-federal employees.--A member of the Board who is 
        not otherwise employed by the Federal Government shall be 
        entitled to receive the daily equivalent of the annual rate of 
        basic pay payable for level IV of the Executive Schedule under 
        section 5315 of title 5, United States Code, as in effect from 
        time to time, for each day (including travel time) during which 
        such member is engaged in the actual performance of duties of 
        the Consortium.
            (2) Federal employees.--A member of the Board who is an 
        officer or employee of the Federal Government shall serve 
        without additional pay (or benefits in the nature of 
        compensation) for service as a member of the Consortium.
            (3) Travel expenses.--Members of the Consortium shall be 
        entitled to receive travel expenses, including per diem in lieu 
        of subsistence, equivalent to those set forth in subchapter I 
        of chapter 57 of title 5, United States Code.
    (d) Quorum.--A majority of the Board shall constitute a quorum.
    (e) Executive Director.--The Board shall appoint an executive 
director of the Consortium on such terms as the Board may determine.

SEC. 8. STAFF; EXPERTS AND CONSULTANTS.

    (a) Staff.--
            (1) Appointment.--The Board of the Consortium may appoint 
        and terminate such other staff as are necessary to enable the 
        Consortium to perform its duties.
            (2) Compensation.--The Board of the Consortium may fix the 
        compensation of the executive director and other staff.
    (b) Experts and Consultants.--The Board shall procure the services 
of experts and consultants as the Board considers appropriate.

SEC. 9. FEDERAL LIABILITY.

    The Federal Government and the Consortium shall not bear any 
liabilities arising from the actions of the Consortium. Participating 
States shall retain all catastrophe risk until the completion of a 
transaction described in paragraphs (2) and (3) of section 4.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this Act 
$20,000,000 for each of fiscal years 2014 through 2018.