IB 

Union Calendar No. 185 

115TH CONGRESS 

1ST SESSION H. R. 2246 

[Report No. 115–255] 

To repeal the mandatory flood insurance coverage requirement for commercial 

properties located in flood hazard areas and to provide for greater transfer of risk under the National Flood Insurance Program to private 

capital and reinsurance markets, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 28, 2017 

Mr. LUETKEMEYER introduced the following bill; which was referred to the 

Committee on Financial Services 

JULY 25, 2017 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on April 28, 2017] 

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A BILL 

To repeal the mandatory flood insurance coverage requirement for commercial properties located in flood hazard 

areas and to provide for greater transfer of risk under 

the National Flood Insurance Program to private capital 

and reinsurance markets, and for other purposes. 

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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 ‘‘Taxpayer Exposure 

5 Mitigation Act of 2017’’. 

6 SEC. 2. OPT-OUT OF MANDATORY COVERAGE REQUIRE7 MENT FOR COMMERCIAL PROPERTIES. 

8 (a) AMENDMENTS TO FLOOD DISASTER PROTECTION

9 ACT OF 1973.—The Flood Disaster Protection Act of 1973 

10 is amended— 

11 (1) in section 3(a) (42 U.S.C. 4003(a))— 

12 (A) in paragraph (10), by striking ‘‘and’’ 

13 at the end; 

14 (B) in paragraph (11), by striking the pe15 riod at the end and inserting ‘‘; and’’; and 

16 (C) by adding at the end the following new 

17 paragraph: 

18 ‘‘(12) ‘residential improved real estate’ means 

19 improved real estate that— 

20 ‘‘(A) is primarily used for residential pur21 poses, as defined by the Federal entities for lend22 ing regulation; and 

23 ‘‘(B) secures financing or financial assist24 ance provided through a federally related single 

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1 family loan progam, as defined by the Federal 

2 entities for lending regulation.’’; and 

3 (2) in section 102 (42 U.S.C. 4012a)— 

4 (A) in subsection (b)— 

5 (i) in paragraph (1)(A)— 

6 (I) by inserting ‘‘residential’’ be7 fore ‘‘improved real estate’’; and 

8 (II) by inserting ‘‘residential’’ be9 fore ‘‘building or mobile home’’; 

10 (ii) in paragraph (2)— 

11 (I) by inserting ‘‘residential’’ be12 fore ‘‘improved real estate’’; and 

13 (II) by inserting ‘‘residential’’ be14 fore ‘‘building or mobile home’’; and 

15 (iii) in paragraph (3)— 

16 (I) in subparagraph (A), by in17 serting ‘‘residential’’ before ‘‘improved 

18 real estate’’; and 

19 (II) in the matter after and below 

20 subparagraph (B), by inserting ‘‘resi21 dential’’ before ‘‘building or mobile 

22 home’’; 

23 (B) in subsection (c)(3), by striking ‘‘, in 

24 the case of any residential property, for any 

25 structure that is a part of such property’’ and 

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1 inserting ‘‘for any structure that is part of a res2 idential property’’; 

3 (C) in subsection (e)— 

4 (i) in paragraph (1)— 

5 (I) by inserting ‘‘residential’’ be6 fore ‘‘improved real estate’’; and 

7 (II) by inserting ‘‘residential’’ be8 fore ‘‘building or mobile home’’ each 

9 place such term appears; and 

10 (ii) in paragraph (5)— 

11 (I) in subparagraph (A)— 

12 (aa) by inserting ‘‘residen13 tial’’ before ‘‘improved real estate’’ 

14 each place such term appears; and 

15 (bb) by inserting ‘‘residen16 tial’’ before ‘‘building or mobile 

17 home’’ each place such term ap18 pears; 

19 (II) in subparagraph (B), by in20 serting ‘‘residential’’ before ‘‘building 

21 or mobile home’’ each place such term 

22 appears; and 

23 (III) in subparagraph (C), by in24 serting ‘‘residential’’ before ‘‘building 

25 or mobile home’’; and 

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1 (D) in subsection (h)— 

2 (i) by inserting ‘‘residential’’ before 

3 ‘‘improved real estate’’ each place such term 

4 appears; and 

5 (ii) in the matter preceding paragraph 

6 (1), by inserting ‘‘residential’’ before ‘‘build7 ing or mobile home’’. 

8 (b) AMENDMENTS TO NATIONAL FLOOD INSURANCE

9 ACT OF 1968.—The National Flood Insurance Act of 1968 

10 is amended— 

11 (1) in section 1364(a) (42 U.S.C. 4104a(a))— 

12 (A) in paragraph (1), by inserting ‘‘residen13 tial’’ before ‘‘improved real estate’’; 

14 (B) in paragraph (2), by inserting ‘‘resi15 dential’’ before ‘‘improved real estate’’; and 

16 (C) in paragraph (3)(A), by inserting ‘‘resi17 dential’’ before ‘‘building’’; 

18 (2) in section 1365 (42 U.S.C. 4104b)— 

19 (A) in subsection (a)— 

20 (i) by inserting ‘‘residential’’ before 

21 ‘‘improved real estate’’; and 

22 (ii) by inserting ‘‘residential’’ before 

23 ‘‘building’’; 

24 (B) in subsection (b)(2)— 

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1 (i) by inserting ‘‘residential’’ before 

2 ‘‘building’’ each place such term appears; 

3 and 

4 (ii) by inserting ‘‘residential’’ before 

5 ‘‘improved real estate’’ each place such term 

6 appears; 

7 (C) in subsection (d), by inserting ‘‘residen8 tial’’ before ‘‘improved real estate’’ each place 

9 such term appears; and 

10 (D) in subsection (e)— 

11 (i) by inserting ‘‘residential’’ before 

12 ‘‘improved real estate’’; and 

13 (ii) by inserting ‘‘residential’’ before 

14 ‘‘building’’ each place such term appears; 

15 and 

16 (3) in section 1370 (42 U.S.C. 4121)— 

17 (A) in paragraph (8), by inserting ‘‘residen18 tial’’ before ‘‘improved real estate’’; 

19 (B) by redesignating paragraphs (14) and 

20 (15) as paragraphs (15) and (16), respectively; 

21 and 

22 (C) by inserting after paragraph (13) the 

23 following new paragraph: 

24 ‘‘(14) the term ‘residential improved real estate’ 

25 means improved real estate that— 

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1 ‘‘(A) is primarily used for residential pur2 poses, as defined by the Federal entities for lend3 ing regulation; and 

4 ‘‘(B) secures financing or financial assist5 ance provided through a federally related single 

6 family loan progam, as defined by the Federal 

7 entities for lending regulation;’’. 

8 (c) RULE OF CONSTRUCTION.—This section and the 

9 amendments made by this section may not be construed to 

10 prohibit the Administrator of the Federal Emergency Man11 agement Agency from offering flood insurance coverage 

12 under the National Flood Insurance Program for eligible 

13 non-residential properties, other residential multifamily 

14 properties, or structures financed with commercial loans, 

15 or to prohibit the purchase of such coverage for such eligible 

16 properties. 

17 SEC. 3. RISK TRANSFER REQUIREMENT. 

18 Subsection (e) of section 1345 of the National Flood 

19 Insurance Act of 1968 (42 U.S.C. 4081(e)) is amended— 

20 (1) by striking ‘‘(e) RISK TRANSFER.—The Ad21 ministrator’’ and inserting the following: 

22 ‘‘(e) RISK TRANSFER.— 

23 ‘‘(1) AUTHORITY.—The Administrator’’; and 

24 (2) by adding at the end the following new para25 graph: 

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1 ‘‘(2) REQUIRED RISK TRANSFER COVERAGE.— 

2 ‘‘(A) REQUIREMENT.—Not later than the 

3 expiration of the 18-month period beginning 

4 upon the date of the enactment of this paragraph 

5 and at all times thereafter, the Administrator 

6 shall annually cede a portion of the risk of the 

7 flood insurance program under this title to the 

8 private reinsurance or capital markets, or any 

9 combination thereof, and at rates and terms that 

10 the Administrator determines to be reasonable 

11 and appropriate, in an amount that— 

12 ‘‘(i) is sufficient to maintain the abil13 ity of the program to pay claims; and 

14 ‘‘(ii) manages and limits the annual 

15 exposure of the flood insurance program to 

16 flood losses in accordance with the probable 

17 maximum loss target established for such 

18 year under subparagraph (B). 

19 ‘‘(B) PROBABLE MAXIMUM LOSS TARGET.— 

20 The Administrator shall for each fiscal year, es21 tablish a probable maximum loss target for the 

22 national flood insurance program that shall be 

23 the maximum probable loss under the national 

24 flood insurance program that is expected to occur 

25 in such fiscal year. 

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1 ‘‘(C) CONSIDERATIONS.—In establishing the 

2 probable maximum loss target under subpara3 graph (B) for each fiscal year and carrying out 

4 subparagraph (A), the Administrator shall con5 sider— 

6 ‘‘(i) the probable maximum loss targets 

7 for other United States public natural ca8 tastrophe insurance programs, including as 

9 State wind pools and earthquake programs; 

10 ‘‘(ii) the probable maximum loss tar11 gets of other risk management organiza12 tions, including the Federal National Mort13 gage Association and the Federal Home 

14 Loan Mortgage Corporation; 

15 ‘‘(iii) catastrophic, actuarial, and 

16 other appropriate data modeling results of 

17 the national flood insurance program port18 folio; 

19 ‘‘(iv) the availability of funds in the 

20 National Flood Insurance Fund established 

21 under section 1310 (42 U.S.C. 4017); 

22 ‘‘(v) the availability of funds in the 

23 National Flood Insurance Reserve Fund es24 tablished under section 1310A (42 U.S.C. 

25 4017a); 

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1 ‘‘(vi) the availability of borrowing au2 thority under section 1309 (42 U.S.C. 

3 4016); 

4 ‘‘(vii) the ability of the Administrator 

5 to repay outstanding debt; 

6 ‘‘(viii) amounts appropriated to the 

7 Administrator to carry out the national 

8 flood insurance program; 

9 ‘‘(ix) reinsurance, capital markets, ca10 tastrophe bonds, collateralized reinsurance, 

11 resilience bonds, and other insurance-linked 

12 securities, and other risk transfer opportu13 nities; and 

14 ‘‘(x) any other factor the Adminis15 trator determines appropriate. 

16 ‘‘(D) MULTI-YEAR CONTRACTS.—Nothing in 

17 this paragraph may be construed to prevent or 

18 prohibit the Administrator from complying with 

19 the requirement under subparagraph (A) regard20 ing ceding risk through contracts having a dura21 tion longer than one year.’’. 

22 SEC. 4. COMMUNITY FLOOD MAPS. 

23 (a) TECHNICAL MAPPING ADVISORY COUNCIL.—Sec24 tion 100215 of the Biggert-Waters Flood Insurance Reform 

25 Act of 2012 (42 U.S.C. 4101a) is amended— 

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1 (1) in subsection (c)— 

2 (A) in paragraph (5)(B), by striking ‘‘and’’ 

3 at the end; 

4 (B) by redesignating paragraph (6) as 

5 paragraph (9); and 

6 (C) by inserting after paragraph (5) the fol7 lowing new paragraphs: 

8 ‘‘(6) recommend to the Administrator methods or 

9 actions to make the flood mapping processes more effi10 cient; 

11 ‘‘(7) recommend to the Administrator methods or 

12 actions to minimize any cost, data, and paperwork 

13 requirements of the flood mapping processes; 

14 ‘‘(8) assist communities, and in particular 

15 smaller communities, in locating the resources re16 quired to participate in the development of flood ele17 vations and flood hazard area designations; and’’; 

18 and 

19 (2) by adding at the end the following new sub20 section: 

21 ‘‘(m) COMMUNITY FLOOD MAPS.— 

22 ‘‘(1) STANDARDS AND PROCEDURES.—In addi23 tion to the other duties of the Council under this sec24 tion, not later than the expiration of the 12-month pe25 riod beginning on the date of the enactment of this 

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1 subsection, the Council shall recommend to the Ad2 ministrator standards and requirements for chief ex3 ecutive officers, or entities designated by chief execu4 tive officers, of States and communities participating 

5 in the National Flood Insurance Program to use in 

6 mapping flood hazards located in States and commu7 nities that choose to develop alternative maps to the 

8 flood insurance rate maps developed by the Agency. 

9 The recommended standards and requirements shall 

10 include procedures for providing notification and ap11 peal rights to individuals within the communities of 

12 the proposed flood elevation determinations. 

13 ‘‘(2) EXEMPTION FROM RULEMAKING.—Until 

14 such time as the Administrator promulgates regula15 tions implementing paragraph (1) of this subsection, 

16 the Administrator may, notwithstanding any other 

17 provision of law, adopt policies and procedures nec18 essary to implement such paragraphs without under19 going notice and comment rulemaking and without 

20 conducting regulatory analyses otherwise required by 

21 statute, regulation, or executive order.’’. 

22 (b) FEMA IDENTIFICATION OF FLOOD-PRONE

23 AREAS.—Subsection (a) of section 1360 of the National 

24 Flood Insurance Act of 1968 (42 U.S.C. 4101(a)) is amend25 ed— 

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1 (1) in paragraph (2), by striking the period at 

2 the end and inserting ‘‘; and’’; 

3 (2) by redesignating paragraphs (1) and (2) as 

4 subparagraphs (A), and (B), respectively, and re5 aligning such subparagraphs so as to be indented 4 

6 ems from the left margin; 

7 (3) by striking ‘‘is authorized to consult’’ and in8 serting the following: ‘‘is authorized— 

9 ‘‘(1) to consult’’; 

10 (4) by adding at the end the following new para11 graph: 

12 ‘‘(2) to receive proposed alternative maps from 

13 communities developed pursuant to standards and re14 quirements recommended by the Technical Mapping 

15 Advisory Council, as required by section 100215(m) 

16 of the Biggert-Waters Flood Insurance Reform Act of 

17 2012 (42 U.S.C. 4101a(m)) and adopted by the Ad18 ministrator as required by section 100216(c)(3) of 

19 such Act (42 U.S.C. 4101b(c)(3)), so that the Admin20 istrator may— 

21 ‘‘(A) publish information with respect to all 

22 flood plain areas, including coastal areas located 

23 in the United States, which have special flood 

24 hazards, and 

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1 ‘‘(B) establish or update flood-risk zone data 

2 in all such areas, and make estimates with re3 spect to the rates of probable flood caused loss for 

4 the various flood risk zones for each of these 

5 areas until the date specified in section 1319.’’. 

6 (c) NATIONAL FLOOD MAPPING PROGRAM.—Section 

7 100216 of the Biggert-Waters Flood Insurance Reform Act 

8 of 2012 (42 U.S.C. 4101b) is amended— 

9 (1) in subsection (a), by inserting ‘‘prepared by 

10 the Administrator, or by a community pursuant to 

11 section 1360(a)(2) of the National Flood Insurance 

12 Act of 1968,’’ after ‘‘Program rate maps’’; 

13 (2) in subsection (c)— 

14 (A) in paragraph (1)(B), by striking ‘‘and’’ 

15 at the end; 

16 (B) in paragraph (2)(C), by striking the pe17 riod at the end and inserting a semicolon; and 

18 (C) by adding at the end the following new 

19 paragraphs: 

20 ‘‘(3) establish and adopt standards and require21 ments for development by States and communities of 

22 alternative flood insurance rate maps to be submitted 

23 to the Administrator pursuant to section 1360(a)(2) 

24 of the National Flood Insurance Act of 1968, taking 

25 into consideration the recommendations of the TechVerDate Sep 11 2014 21:40 Jul 25, 2017 Jkt 069200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6203 E:\BILLS\H2246.RH H2246
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1 nical Mapping Advisory Council made pursuant to 

2 section 100215(m) of this Act (42 U.S.C. 4101a(m)); 

3 and 

4 ‘‘(4) in the case of proposed alternative maps re5 ceived by the Administrator pursuant to such section 

6 1360(a)(2), not later than the expiration of the 6- 

7 month period beginning upon receipt of such proposed 

8 alternative maps— 

9 ‘‘(A) determine whether such maps were de10 veloped in accordance with the standards and re11 quirements adopted pursuant to paragraph (3) 

12 of this subsection; and 

13 ‘‘(B) approve or disapprove such proposed 

14 maps for use under National Flood Insurance 

15 Program.’’; and 

16 (3) in subsection (d)(1), by inserting ‘‘max17 imum’’ before ‘‘30-day period’’ each place such term 

18 appears in subparagraphs (B) and (C). 

Union Calendar No. 185 

115TH CONGRESS 

1ST SESSION H. R. 2246 

[Report No. 115–255] 

A BILL 

To repeal the mandatory flood insurance coverage 

markets, and for other purposes. ance Program to private capital and reinsurance transfer of risk under the National Flood Insurflood hazard areas and to provide for greater requirement for commercial properties located in 

JULY 25, 2017 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,