II 

115TH CONGRESS 

1ST SESSION S. 563 

To amend the Flood Disaster Protection Act of 1973 to require that certain 

buildings and personal property be covered by flood insurance, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 8, 2017 

Mr. HELLER (for himself and Mr. TESTER) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Flood Disaster Protection Act of 1973 to 

require that certain buildings and personal property be 

covered by flood insurance, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Flood Insurance Mar5 ket Parity and Modernization Act’’. 

6 SEC. 2. PRIVATE FLOOD INSURANCE. 

7 (a) MANDATORY PURCHASE REQUIREMENT.— 

8 (1) AMOUNT AND TERM OF COVERAGE.—Sec9 tion 102 of the Flood Disaster Protection Act of 


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1 1973 (42 U.S.C. 4012a) is amended by striking 

2 ‘‘Sec. 102. (a)’’ and all that follows through the end 

3 of subsection (a) and inserting the following: 

4 ‘‘SEC. 102. (a) AMOUNT AND TERM OF COVERAGE.— 

5 After the expiration of sixty days following the date of en6 actment of this Act, no Federal officer or agency shall ap7 prove any financial assistance for acquisition or construc8 tion purposes for use in any area that has been identified 

9 by the Administrator as an area having special flood haz10 ards and in which the sale of flood insurance has been 

11 made available under the National Flood Insurance Act 

12 of 1968 (42 U.S.C. 4001 et seq.), unless the building or 

13 mobile home and any personal property to which such fi14 nancial assistance relates is covered by flood insurance: 

15 Provided, That the amount of flood insurance (1) in the 

16 case of Federal flood insurance, is at least equal to the 

17 development or project cost of the building, mobile home, 

18 or personal property (less estimated land cost), the out19 standing principal balance of the loan, or the maximum 

20 limit of Federal flood insurance coverage made available 

21 with respect to the particular type of property, whichever 

22 is less; or (2) in the case of private flood insurance, is 

23 at least equal to the development or project cost of the 

24 building, mobile home, or personal property (less esti25 mated land cost), the outstanding principal balance of the 


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1 loan, or the maximum limit of Federal flood insurance cov2 erage made available with respect to the particular type 

3 of property, whichever is less: Provided further, That if 

4 the financial assistance provided is in the form of a loan 

5 or an insurance or guaranty of a loan, the amount of flood 

6 insurance required need not exceed the outstanding prin7 cipal balance of the loan and need not be required beyond 

8 the term of the loan. The requirement of maintaining flood 

9 insurance shall apply during the life of the property, re10 gardless of transfer of ownership of such property.’’. 

11 (2) REQUIREMENT FOR MORTGAGE LOANS.— 

12 Subsection (b) of section 102 of the Flood Disaster 

13 Protection Act of 1973 (42 U.S.C. 4012a(b)) is 

14 amended— 

15 (A) by striking the subsection designation 

16 and all that follows through the end of para17 graph (5) and inserting the following: 

18 ‘‘(b) REQUIREMENT FOR MORTGAGE LOANS.— 

19 ‘‘(1) REGULATED LENDING INSTITUTIONS.— 

20 Each Federal entity for lending regulation (after 

21 consultation and coordination with the Financial In22 stitutions Examination Council established under the 

23 Federal Financial Institutions Examination Council 

24 Act of 1974 (12 U.S.C. 3301 et seq.)) shall by regu25 lation direct regulated lending institutions not to 


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1 make, increase, extend, or renew any loan secured 

2 by improved real estate or a mobile home located or 

3 to be located in an area that has been identified by 

4 the Administrator as an area having special flood 

5 hazards and in which flood insurance has been made 

6 available under the National Flood Insurance Act of 

7 1968 (42 U.S.C. 4001 et seq.), unless the building 

8 or mobile home and any personal property securing 

9 such loan is covered for the term of the loan by flood 

10 insurance: Provided, That the amount of flood insur11 ance (A) in the case of Federal flood insurance, is 

12 at least equal to the outstanding principal balance of 

13 the loan or the maximum limit of Federal flood in14 surance coverage made available with respect to the 

15 particular type of property, whichever is less; or (B) 

16 in the case of private flood insurance, is at least 

17 equal to the outstanding principal balance of the 

18 loan or the maximum limit of Federal flood insur19 ance coverage made available with respect to the 

20 particular type of property, whichever is less. 

21 ‘‘(2) FEDERAL AGENCY LENDERS.— 

22 ‘‘(A) IN GENERAL.—A Federal agency 

23 lender may not make, increase, extend, or 

24 renew any loan secured by improved real estate 

25 or a mobile home located or to be located in an 


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1 area that has been identified by the Adminis2 trator as an area having special flood hazards 

3 and in which flood insurance has been made 

4 available under the National Flood Insurance 

5 Act of 1968 (42 U.S.C. 4001 et seq.), unless 

6 the building or mobile home and any personal 

7 property securing such loan is covered for the 

8 term of the loan by flood insurance in accord9 ance with paragraph (1). Each Federal agency 

10 lender may issue any regulations necessary to 

11 carry out this paragraph. Such regulations shall 

12 be consistent with and substantially identical to 

13 the regulations issued under paragraph (1). 

14 ‘‘(B) REQUIREMENT TO ACCEPT FLOOD IN15 SURANCE.—Each Federal agency lender shall 

16 accept flood insurance as satisfaction of the 

17 flood insurance coverage requirement under 

18 subparagraph (A) if the flood insurance cov19 erage meets the requirements for coverage 

20 under that subparagraph. 

21 ‘‘(3) GOVERNMENT-SPONSORED ENTERPRISES

22 FOR HOUSING.—The Federal National Mortgage As23 sociation and the Federal Home Loan Mortgage 

24 Corporation shall implement procedures reasonably 

25 designed to ensure that, for any loan that is— 


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1 ‘‘(A) secured by improved real estate or a 

2 mobile home located in an area that has been 

3 identified, at the time of the origination of the 

4 loan or at any time during the term of the loan, 

5 by the Administrator as an area having special 

6 flood hazards and in which flood insurance is 

7 available under the National Flood Insurance 

8 Act of 1968 (42 U.S.C. 4001 et seq.), and 

9 ‘‘(B) purchased or guaranteed by such en10 tity, 

11 the building or mobile home and any personal prop12 erty securing the loan is covered for the term of the 

13 loan by flood insurance in the amount provided in 

14 paragraph (1). The Federal National Mortgage As15 sociation and the Federal Home Loan Mortgage 

16 Corporation shall accept flood insurance as satisfac17 tion of the flood insurance coverage requirement 

18 under paragraph (1) if the flood insurance coverage 

19 provided meets the requirements for coverage under 

20 that paragraph and any requirements established by 

21 the Federal National Mortgage Association or the 

22 Federal Home Loan Corporation, respectively, relat23 ing to the financial strength of private insurance 

24 companies from which the Federal National Mort25 gage Association or the Federal Home Loan MortVerDate Sep 11 2014 04:30 Mar 11, 2017 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563

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1 gage Corporation will accept private flood insurance, 

2 provided that such requirements shall not affect or 

3 conflict with any State law, regulation, or procedure 

4 concerning the regulation of the business of insur5 ance. 

6 ‘‘(4) APPLICABILITY.— 

7 ‘‘(A) EXISTING COVERAGE.—Except as 

8 provided in subparagraph (B), paragraph (1) 

9 shall apply on the date of enactment of the Rie10 gle Community Development and Regulatory 

11 Improvement Act of 1994 (12 U.S.C. 4701 et 

12 seq.). 

13 ‘‘(B) NEW COVERAGE.—Paragraphs (2) 

14 and (3) shall apply only with respect to any 

15 loan made, increased, extended, or renewed 

16 after the expiration of the 1-year period begin17 ning on the date of enactment of the Riegle 

18 Community Development and Regulatory Im19 provement Act of 1994 (12 U.S.C. 4701 et 

20 seq.). Paragraph (1) shall apply with respect to 

21 any loan made, increased, extended, or renewed 

22 by any lender supervised by the Farm Credit 

23 Administration only after the expiration of the 

24 period under this subparagraph. 


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1 ‘‘(C) CONTINUED EFFECT OF REGULA2 TIONS.—Notwithstanding any other provision of 

3 this subsection, the regulations to carry out 

4 paragraph (1), as in effect immediately before 

5 the date of enactment of the Riegle Community 

6 Development and Regulatory Improvement Act 

7 of 1994 (12 U.S.C. 4701 et seq.), shall con8 tinue to apply until the regulations issued to 

9 carry out paragraph (1) as amended by section 

10 522(a) of such Act take effect. 

11 ‘‘(5) RULE OF CONSTRUCTION.—Except as oth12 erwise specified, any reference to flood insurance in 

13 this section shall be considered to include Federal 

14 flood insurance and private flood insurance. Nothing 

15 in this subsection shall be construed to supersede or 

16 limit the authority of a Federal entity for lending 

17 regulation, the Federal Housing Finance Agency, a 

18 Federal agency lender, the Federal National Mort19 gage Association, or the Federal Home Loan Mort20 gage Corporation to establish requirements relating 

21 to the financial strength of private insurance compa22 nies from which the entity or agency will accept pri23 vate flood insurance, provided that such require24 ments shall not affect or conflict with any State law, 


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1 regulation, or procedure concerning the regulation of 

2 the business of insurance.’’; and 

3 (B) by striking paragraph (7) and insert4 ing the following new paragraph: 

5 ‘‘(7) DEFINITIONS.—In this section: 

6 ‘‘(A) FLOOD INSURANCE.—The term ‘flood 

7 insurance’ means— 

8 ‘‘(i) Federal flood insurance; and 

9 ‘‘(ii) private flood insurance. 

10 ‘‘(B) FEDERAL FLOOD INSURANCE.—the 

11 term ‘Federal flood insurance’ means an insur12 ance policy made available under the National 

13 Flood Insurance Act of 1968 (42 U.S.C. 4001 

14 et seq.). 

15 ‘‘(C) PRIVATE FLOOD INSURANCE.—The 

16 term ‘private flood insurance’ means an insur17 ance policy that— 

18 ‘‘(i) is issued by an insurance com19 pany that is— 

20 ‘‘(I) licensed, admitted, or other21 wise approved to engage in the busi22 ness of insurance in the State in 

23 which the insured building is located, 

24 by the insurance regulator of that 

25 State; or 


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1 ‘‘(II) eligible as a nonadmitted 

2 insurer to provide insurance in the 

3 home State of the insured, in accord4 ance with sections 521 through 527 of 

5 the Dodd-Frank Wall Street Reform 

6 and Consumer Protection Act (15 

7 U.S.C. 8201 through 8206); 

8 ‘‘(ii) is issued by an insurance com9 pany that is not otherwise disapproved as 

10 a surplus lines insurer by the insurance 

11 regulator of the State in which the prop12 erty to be insured is located; and 

13 ‘‘(iii) provides flood insurance cov14 erage that complies with the laws and reg15 ulations of that State. 

16 ‘‘(D) STATE.—The term ‘State’ means any 

17 State of the United States, the District of Co18 lumbia, the Commonwealth of Puerto Rico, 

19 Guam, the Northern Mariana Islands, the Vir20 gin Islands, and American Samoa.’’. 

21 (b) EFFECT OF PRIVATE FLOOD INSURANCE COV22 ERAGE ON CONTINUOUS COVERAGE REQUIREMENTS.— 

23 Section 1308 of the National Flood Insurance Act of 1968 

24 (42 U.S.C. 4015) is amended by adding at the end the 

25 following: 


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1 ‘‘(n) EFFECT OF PRIVATE FLOOD INSURANCE COV2 ERAGE ON CONTINUOUS COVERAGE REQUIREMENTS.— 

3 For purposes of applying any statutory, regulatory, or ad4 ministrative continuous coverage requirement, including 

5 under section 1307(g)(1), the Administrator shall consider 

6 any period during which a property was continuously cov7 ered by private flood insurance (as defined in section 

8 102(b)(7) of the Flood Disaster Protection Act of 1973 

9 (42 U.S.C. 4012a(b)(7))) to be a period of continuous cov10 erage.’’. 

Æ 


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