I 

115TH CONGRESS 

1ST SESSION H. R. 2246 

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 

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. 

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’’. 


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1 SEC. 2. OPT-OUT OF MANDATORY COVERAGE REQUIRE2 MENT FOR COMMERCIAL PROPERTIES. 

3 (a) AMENDMENTS TO FLOOD DISASTER PROTECTION

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

5 1973 is amended— 

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

7 (A) in paragraph (7), by inserting ‘‘resi8 dential’’ before ‘‘improved real estate’’; and 

9 (B) in paragraph (8), by inserting ‘‘resi10 dential’’ before ‘‘building’’; and 

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

12 (A) in subsection (b)— 

13 (i) in paragraph (1)(A)— 

14 (I) by inserting ‘‘residential’’ be15 fore ‘‘improved real estate’’; and 

16 (II) by inserting ‘‘residential’’ be17 fore ‘‘building or mobile home’’; 

18 (ii) in paragraph (2)— 

19 (I) by inserting ‘‘residential’’ be20 fore ‘‘improved real estate’’; and 

21 (II) by inserting ‘‘residential’’ be22 fore ‘‘building or mobile home’’; and 

23 (iii) in paragraph (3)— 

24 (I) in subparagraph (A), by in25 serting ‘‘residential’’ before ‘‘improved 

26 real estate’’; and 


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1 (II) in the matter after and 

2 below subparagraph (B), by inserting 

3 ‘‘residential’’ before ‘‘building or mo4 bile home’’; 

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

6 the case of any residential property, for any 

7 structure that is part of such property’’ and in8 serting ‘‘for any structure that is part of a resi9 dential property’’; 

10 (C) in subsection (e)— 

11 (i) in paragraph (1)— 

12 (I) by inserting ‘‘residential’’ be13 fore ‘‘improved real estate’’; and 

14 (II) by inserting ‘‘residential’’ be15 fore ‘‘building or mobile home’’ each 

16 place such term appears; and 

17 (ii) in paragraph (5)— 

18 (I) in subparagraph (A)— 

19 (aa) by inserting ‘‘residen20 tial’’ before ‘‘improved real es21 tate’’ each place such term ap22 pears; and 

23 (bb) by inserting ‘‘residen24 tial’’ before ‘‘building or mobile 


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1 home’’ each place such term ap2 pears; 

3 (II) in subparagraph (B), by in4 serting ‘‘residential’’ before ‘‘building 

5 or mobile home’’ each place such term 

6 appears; and 

7 (III) in subparagraph (C), by in8 serting ‘‘residential’’ before ‘‘building 

9 or mobile home’’; and 

10 (D) in subsection (h)— 

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

12 ‘‘improved real estate’’ each place such 

13 term appears; and 

14 (ii) in the matter preceding paragraph 

15 (1), by inserting ‘‘residential’’ before 

16 ‘‘building or mobile home’’. 

17 (b) AMENDMENTS TO NATIONAL FLOOD INSURANCE

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

19 1968 is amended— 

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

21 (A) in paragraph (1), by inserting ‘‘resi22 dential’’ before ‘‘improved real estate’’; 

23 (B) in paragraph (2), by inserting ‘‘resi24 dential’’ before ‘‘improved real estate’’; and 


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1 (C) in paragraph (3)(A), by inserting ‘‘res2 idential’’ before ‘‘building’’; 

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

4 (A) in subsection (a)— 

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

6 ‘‘improved real estate’’; and 

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

8 ‘‘building’’; 

9 (B) in subsection (b)(2)— 

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

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

12 and 

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

14 ‘‘improved real estate’’ each place such 

15 term appears; 

16 (C) in subsection (d), by inserting ‘‘resi17 dential’’ before ‘‘improved real estate’’ each 

18 place such term appears; and 

19 (D) in subsection (e)— 

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

21 ‘‘improved real estate’’; and 

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

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

24 and 

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


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1 (A) in paragraph (8), by inserting ‘‘resi2 dential’’ before ‘‘improved real estate’’; and 

3 (B) in paragraph (10)— 

4 (i) by inserting ‘‘residential’’ after the 

5 opening quotation marks; and 

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

7 ‘‘building’’. 

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

9 amendments made by this section may not be construed 

10 to prohibit the Administrator of the Federal Emergency 

11 Management Agency from offering flood insurance cov12 erage under the National Flood Insurance Program for 

13 eligible non-residential properties or to prohibit the pur14 chase of such coverage for such eligible properties. 

15 SEC. 3. RISK TRANSFER REQUIREMENT. 

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

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

18 (1) by striking ‘‘(e) RISK TRANSFER,—The Ad19 ministrator’’ and inserting the following: 

20 ‘‘(e) RISK TRANSFER.— 

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

22 (2) by adding at the end the following new 

23 paragraph: 

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


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

2 expiration of the 18-month period beginning 

3 upon the date of the enactment of this para4 graph and at all times thereafter, the Adminis5 trator shall annually cede a portion of the risk 

6 of the flood insurance program under this title 

7 to the private reinsurance or capital markets, or 

8 any combination thereof, and at rates and 

9 terms that the Administrator determines to be 

10 reasonable and appropriate, in an amount 

11 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 prob17 able maximum loss target established for 

18 such year under subparagraph (B). 

19 ‘‘(B) PROBABLE MAXIMUM LOSS TAR20 GET.—The Administrator shall for each fiscal 

21 year, establish a probable maximum loss target 

22 for the national flood insurance program that 

23 shall be the maximum probable loss under the 

24 national flood insurance program that is ex25 pected to occur in such fiscal year. 


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1 ‘‘(C) CONSIDERATIONS.—In establishing 

2 the probable maximum loss target under sub3 paragraph (B) for each fiscal year and carrying 

4 out subparagraph (A), the Administrator shall 

5 consider— 

6 ‘‘(i) the probable maximum loss tar7 gets for other United States public natural 

8 catastrophe insurance programs, including 

9 as State wind pools and earthquake pro10 grams; 

11 ‘‘(ii) the probable maximum loss tar12 gets of other risk management organiza13 tions, including the Federal National Mort14 gage Association and the Federal Home 

15 Loan Mortgage Corporation; 

16 ‘‘(iii) catastrophic, actuarial, and 

17 other appropriate data modeling results of 

18 the national flood insurance program port19 folio; 

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

21 National Flood Insurance Fund established 

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

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

24 National Flood Insurance Reserve Fund 


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1 established under section 1310A (42 

2 U.S.C. 4017a); 

3 ‘‘(vi) the availability of borrowing au4 thority under section 1309 (42 U.S.C. 

5 4016); 

6 ‘‘(vii) the ability of the Administrator 

7 to repay outstanding debt; 

8 ‘‘(viii) amounts appropriated to the 

9 Administrator to carry out the national 

10 flood insurance program; 

11 ‘‘(ix) reinsurance, capital markets, ca12 tastrophe bonds, collateralized reinsurance, 

13 resilience bonds, and other insurance14 linked securities, and other risk transfer 

15 opportunities; and 

16 ‘‘(x) any other factor the Adminis17 trator determines appropriate. 

18 ‘‘(D) MULTI-YEAR CONTRACTS.—Nothing 

19 in this paragraph may be construed to prevent 

20 or prohibit the Administrator from complying 

21 with the requirement under subparagraph (A) 

22 regarding ceding risk through contracts having 

23 a duration longer than one year.’’. 


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1 SEC. 4. PRIVATE OR COMMUNITY FLOOD MAPS. 

2 Section 100215 of the Biggert-Waters Flood Insur3 ance Reform Act of 2012 (42 U.S.C. 4101a) is amended 

4 by adding at the end the following new subsection: 

5 ‘‘(m) PRIVATE OR COMMUNITY FLOOD MAPS.— 

6 ‘‘(1) STANDARDS AND PROCEDURES.—In addi7 tion to the other duties of the Council under this 

8 section, not later than the expiration of the 12- 

9 month period beginning on the date of the enact10 ment of this subsection, the Council shall develop 

11 and establish a set of standards, guidelines, and pro12 cedures for— 

13 ‘‘(A) State and local governments, feder14 ally or State recognized Metropolitan Planning 

15 Organizations (MPOs), federally or State recog16 nized Councils of Local Governments, and fed17 erally or State recognized Rural Transportation 

18 Planning Organizations to use in mapping flood 

19 risks and developing alternative maps to the 

20 flood insurance rate maps developed by the 

21 Agency; and 

22 ‘‘(B) certification, by the Administrator 

23 and within 90 days of submission, of such maps 

24 for use under the National Flood Insurance 

25 Program in the case of any area covered by a 

26 flood insurance rate map developed or approved 


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1 by the Administrator which has not been up2 dated or reissued for 36 months or longer. 

3 ‘‘(2) TREATMENT.—Upon certification of a map 

4 pursuant to paragraph (1)(B), such map— 

5 ‘‘(A) shall be considered the flood insur6 ance rate map in effect for all purposes of the 

7 National Flood Insurance Program, with re8 spect to the area covered by the map; and 

9 ‘‘(B) may not be revised, updated, or re10 placed pursuant to the standards, guidelines, 

11 and procedures established pursuant to para12 graph (1) before the expiration of the 36-month 

13 period beginning upon such certification. 

14 ‘‘(3) EXEMPTION FROM RULEMAKING.—Until 

15 such time as the Administrator promulgates regula16 tions implementing paragraphs (1) and (2) of this 

17 subsection, the Administrator may adopt policies 

18 and procedures, notwithstanding any other provi19 sions of law, necessary to implement such para20 graphs without undergoing notice and comment rule21 making and without conducting regulatory analyses 

22 otherwise required by statute, regulation, or execu23 tive order.’’. 

Æ 


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