Build for Future Disasters Act of 2021

To eliminate any subsidies for flood insurance coverage under the National Flood Insurance Program for new construction, and for other purposes. 1. Short title This Act may be cited as the Build for Future Disasters Act of 2021 2. Congressional findings The Congress makes the following findings: (1) According to the National Oceanic and Atmospheric Administration, since 2000, flooding has become the most common and costly natural disaster in the United States, impacting all 50 States and causing more than $845 billion in damage. (2) A 2019 report from the California-based analytics company CoreLogic found that 7.3 million homes along the Atlantic and Gulf Coasts alone are at risk from storm surge, with a potential $1.8 trillion in reconstruction costs. (3) Research from New York University’s Furman Center for Real Estate and Urban Policy estimated that, in 2015, 15 million people nationwide lived in the 100-year floodplain spread across coastal and inland States. (4) The National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA), provides federally backed flood insurance in over 22,000 communities in 56 States and jurisdictions in the United States with more than 5 million policies providing over $1.3 trillion in coverage. (5) In 1966, while calling for the creation of the NFIP, the Task Force on Federal Flood Control Policy provided a caution on flood insurance incorrectly applied, it could exacerbate the whole problem of flood losses. invite economic waste of great magnitude … aggravate flood damages and constitute gross public irresponsibility (6) According to the Government Accountability Office (GAO), the NFIP offers 20 percent of policyholders heavily subsidized rates that FEMA estimates may be 45 to 50 percent below a full-risk rate. (7) Since 2005, the NFIP has borrowed nearly $40 billion from taxpayers to meet policyholder insurance claims. (8) In 2017, the Congressional Budget Office estimated that under its current model the NFIP is expected to lose $1.3 billion a year. (9) Historically, repeatedly flooded properties have accounted for just 1 percent of properties with National Flood Insurance Program policies but about 25 to 30 percent of flood claims. Nationwide more than 150,000 properties have repeatedly flooded at a cost to the NFIP of more than $12.5 billion. (10) On May 26, 2019, four former FEMA Administrators wrote a letter to Congressional leaders stating: Change is needed to allow the NFIP to pay off its debt and serve its purposes of reducing Federal disaster spending following flood events, minimizing flood losses, and discouraging unwise building in flood-prone areas. 3. Sense of Congress It is the sense of the Congress that the Federal Government should— (1) discourage regulation and policies that result in building and rebuilding homes located in high flood-risk areas; (2) limit the availability of federally subsidized flood insurance for construction of new homes, business, and infrastructure; (3) coordinate with floodplain managers, city planners, administrators, and local elected officials to ensure that structures built in flood-prone areas comply with building and elevation codes and regulations that are designed to reduce their risk of damage from flooding; and (4) prioritize increased mitigation funding through new and existing programs to help communities better prepare for future flood disasters before they happen. 4. Elimination of subsidies for new construction Subsection (c) of section 1308 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4015(c) (3) New construction Any property the construction or substantial improvement of which the Administrator determines has been started on or after January 1, 2025, and the appropriate actuarial rate shall be adjusted with any changes to the flood zone or base flood elevation reflected in relevant flood insurance rate map, regardless of the previous rating; in determining whether a property is subject to this paragraph, the Administrator shall consider the issue date for any relevant building permit or occupancy certificate issued by the community in which such property is located; for purposes of this paragraph only, a determination regarding substantial improvement may exclude the costs of any improvement to a structure or the structure’s associated land area for which the primary purpose is flood mitigation or floodproofing; such improvements may include elevation of the building or utilities, floodproofing, or other site-specific mitigation activities that would otherwise meet the eligibility requirements established by the Administrator under authority of section 1366(c) ( 42 U.S.C. 4104c(c) . 5. GAO study and report The Comptroller General of the United States shall conduct a study to determine the feasibility and effects of— (1) eliminating, by January 1, 2027, all subsidies that reduce premiums for coverage under the National Flood Insurance Program of the Federal Emergency Management Agency to amounts that are less than the amount that is actuarially necessary for such Program to operate without a deficit; and (2) prohibiting any subsidy described in paragraph (1) for any property unless mitigation activities to decrease the risk of flood damage to such property have been completed. Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Comptroller General shall submit a report to the Congress that describes the findings of the study pursuant to this section.

Summary: Build for Future Disasters Act of 2021 This bill eliminates certain National Flood Insurance Program (NFIP) rate subsidies for newly constructed property. Specifically, the chargeable rate for NFIP coverage of newly constructed property and any substantial improvements of property started on or after January 1, 2025, must not be not less than the estimated risk premium rate. The Government Accountability Office must report on the feasibility and effects of (1) eliminating by January 1, 2027, all subsidies that reduce premiums for NFIP coverage to amounts below those necessary to operate to program without a deficit, and (2) prohibiting these subsidies unless flood mitigation activities have been completed on a property.