I 
113TH CONGRESS 
1ST SESSION H. R. 1101 
To strengthen America’s financial infrastructure, by requiring pre-funding 
for catastrophe losses using private insurance premium dollars to better 
prepare and protect homeowners from natural catastrophes and to protect 
taxpayers from massive bailouts, and to provide dedicated funding from 
insurance premiums to improve catastrophe preparedness, loss prevention 
and mitigation, and to improve the availability and affordability of private 
market homeowners insurance coverage for catastrophic events, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 12, 2013 
Mr. SIRES introduced the following bill; which was referred to the Committee 
on Financial Services, and in addition to the Committee on Transpor-
tation and Infrastructure, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned 
A BILL 
To strengthen America’s financial infrastructure, by requir-
ing pre-funding for catastrophe losses using private in-
surance premium dollars to better prepare and protect 
homeowners from natural catastrophes and to protect 
taxpayers from massive bailouts, and to provide dedi-
cated funding from insurance premiums to improve ca-
tastrophe preparedness, loss prevention and mitigation, 
and to improve the availability and affordability of pri-
vate market homeowners insurance coverage for cata-
strophic events, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Homeowners and Taxpayers Protection Act of 2013’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Findings and purpose. 
Sec. 3. Definitions. 
TITLE I—TAXPAYER PROTECTION, PRE-FUNDED CATASTROPHE 
RECOVERY, AND MARKET STABILIZATION 
Sec. 101. National Commission on Natural Catastrophe Preparation and Pro-
tection. 
Sec. 102. Pre-funded and privately financed catastrophe recovery program. 
Sec. 103. Post-catastrophe market stabilization program for liquidity loans. 
Sec. 104. Termination. 
TITLE II—CATASTROPHE READINESS, CITIZEN AND COMMUNITY 
PREPAREDNESS, AND MITIGATION 
Sec. 201. National Readiness, Preparedness, and Mitigation Committee. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—The Congress finds the following: 
(1) The economy of the United States, the 
American taxpayers, and all homeowners need to be 
better prepared for, and more protected from, major 
natural catastrophes. 
(2) Taking into consideration the current eco-
nomic and fiscal challenges facing the United States, 
it is more important than ever to fortify our Na-
tion’s financial infrastructure to be fully prepared 
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for major natural catastrophes and to mitigate the 
risk of catastrophe as much as possible. 
(3) When major catastrophes hit, the Federal 
Government is called upon to provide significant 
funding and services to support recovery. 
(4) The costs of post-catastrophe Federal ‘‘bail-
outs’’ are borne by all taxpayers and can create a 
disincentive to fully prepare for catastrophes. 
(5) Historically, the budget for Federal Govern-
ment has assumed there will be no natural catas-
trophes, and this lack of pre-funding for catas-
trophes contributed substantially to annual budget 
deficits and growing national debt. 
(6) The Budget Control Act of 2011 ends an 
era of unbudgeted recovery assistance and author-
izes a fixed level of annual funding for catastrophes 
relief. 
(7) The amount of future catastrophe relief 
funding is capped at the average amount spent on 
natural catastrophes during the previous 10 years 
with the high and low years removed. 
(8) By removing the high and low years, the 
law now caps catastrophes spending at a level that 
is less than 60 percent of the amount spent on ca-
tastrophe relief during the previous 10 years. 
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(9) Responsibly managing Government spend-
ing is a top congressional priority, especially in light 
of the unprecedented fiscal challenges facing the Na-
tion. 
(10) Natural catastrophes will continue to 
occur, and the exposure to catastrophe risk is grow-
ing. Scientists warn that future catastrophes will in-
evitably cause losses far in excess of prior events, 
and these losses could exceed the limited capacity in 
the private market to cover claims and remain viable 
to insure properties after massive catastrophic 
events. 
(11) In 2011, the earthquake centered in Vir-
ginia that shook the East Coast and the extreme 
weather and deadly super tornadoes that ripped 
across the country provided powerful reminders that 
natural catastrophes can strike unexpectedly, se-
verely damaging areas not thought to be at high 
risk, and no region is immune from the threat of 
natural catastrophe. 
(12) In 2012, the devastation caused by 
Superstorm Sandy demonstrated yet again the need 
for a mechanism to ensure that privately funded 
monies will be available if needed following mega-ca-
tastrophes. 
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(13) To successfully transition to a more lim-
ited and targeted Federal role in post-event catas-
trophe funding, communities must be better pre-
pared for future catastrophes, the risk of damage 
must be mitigated, and individuals must have great-
er access to private market protection against catas-
trophe risk. 
(14) The private insurance market alone does 
not have sufficient capacity to efficiently address the 
timing risk presented by major natural catastrophes, 
and there is no guarantee that the level of capacity 
that does exist will continue to be available from one 
year to the next or that consumers have the re-
sources to adjust to significant price swings in the 
cost of the capital for available capacity. 
(15) Disruptions in insurance availability and 
affordability will continue to harm economic activity 
in States exposed to major catastrophes and place 
significant burdens on residents of these States. 
(16) Consumers in many areas around the 
country cannot find homeowners insurance in the 
private market, and affordability and availability 
challenges will grow dramatically when future major 
catastrophes strike. 
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(17) Hurricane Katrina, Superstorm Sandy, 
and other recent catastrophes confirm that the eco-
nomic harm from natural catastrophes has a dis-
proportionate impact upon the poor and middle class 
because areas most frequently and adversely im-
pacted by catastrophic hurricanes have dispropor-
tionately high rates of poverty and housing stock 
valued well below State averages. 
(18) A new public-private partnership approach 
to deal more effectively with major natural catas-
trophes would more efficiently leverage the public 
sector and establish a limited, less expensive, more 
focused role for government while also maximizing 
the capabilities of the private sector. 
(19) A privately funded backstop can provide 
more protection at lower cost for consumers while 
also strengthening America’s financial infrastructure 
to deal with natural catastrophes by increasing ca-
pacity and providing more market stability after a 
catastrophe. 
(20) Cost savings can lower premiums for con-
sumers and be used to encourage better prevention 
and mitigation in lieu of post-event bailouts. 
(21) A financial backstop can be structured to 
be fully funded to protect taxpayers from bailouts 
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and insurance policyholders from subsidies upon 
which the current system relies. 
(22) A public-private partnership model, with 
an appropriately structured backstop, can protect 
against the timing risk presented by major natural 
catastrophes, spread risk more broadly, and enable 
private direct insurers to underwrite and price insur-
ance for large-scale catastrophes more efficiently and 
with less risk of insolvency or financial distress while 
making insurance more available and affordable for 
consumers. 
(23) A public-private partnership model can be 
structured to include and encourage participation by 
private market reinsurers. 
(24) Incentives and requirements can be cre-
ated to improve prevention and mitigation measures 
at the State and local levels, including strong build-
ing codes, effective retrofits for existing homes, and 
sensible land use policies to prohibit further develop-
ment in environmentally sensitive areas that are 
highly exposed to catastrophe. 
(25) For the majority of Americans, their home 
is their single biggest asset and protecting that in-
vestment is important to the economic health of mil-
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lions of Americans, to social stability; and to the 
health of the banking system and broader economy. 
(26) The financial crisis of 2008 and recent fis-
cal challenges confirm the value of taking action in 
advance to strengthen America’s financial infra-
structure through a privately funded backstop rather 
than waiting for a future crisis or collapse to take 
emergency action in the form of bailouts. 
(27) It is in the best interests of the Nation to 
take responsible action now to begin to build a fi-
nancial backstop that will help protect a recovering 
American economy and mitigate the economic or fi-
nancial shock that could result from a major cata-
strophic event. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to better prepare and protect homeowners 
and taxpayers from major natural catastrophe; 
(2) to establish a fully funded program for ca-
tastrophe losses to strengthen the financial infra-
structure of the United States; 
(3) to protect taxpayers from bailouts and sub-
sidies related to the financing of post-catastrophe ca-
tastrophe relief; 
(4) to develop a public-private partnership that 
maximizes and supplements private market capacity, 
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increases the spread of risk, and increases market 
stability; 
(5) to reduce the size of State government in-
surance exposure; 
(6) to make private market homeowners insur-
ance more available and affordable; 
(7) to improve emergency preparedness; 
(8) to encourage individuals and communities to 
adopt mitigation and prevention measures that re-
duce losses from such catastrophes; and 
(9) to fortify the Nation’s capacity to assist in 
the financial recovery from major catastrophes. 
SEC. 3. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) ACTUARIALLY SOUND.—The term ‘‘actuari-
ally sound’’ means, with respect to premiums, that 
premiums are determined according to principles of 
actuarial science to be adequate, but not excessive, 
in the aggregate to pay current and future obliga-
tions, including the expected annualized cost of all 
claims, loss adjustment expenses, and all administra-
tive costs. 
(2) COVERED
EVENT.—The term ‘‘covered 
event’’ means the occurrence of one or more of the 
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events specified in section 102(c) that causes a loss 
or series of losses. 
(3) COVERED
STATE.—The term ‘‘covered 
States’’ means, with respect to a State plan, a State 
covered by the plan. 
(4) ELIGIBLE STATE PLAN.—The term ‘‘eligible 
State plan’’ means a State plan or multi-State plan 
that meets the requirements of section 102(d). 
(5) EMERGENCY RESPONSE PROVIDERS.—The 
term ‘‘emergency response providers’’ has the mean-
ing given such term in section 2 of the Homeland 
Security Act of 2002 (6 U.S.C. 101). 
(6) FUND.—The term ‘‘Fund’’ means the Ca-
tastrophe Preparedness Fund established under sec-
tion 102(g). 
(7) INSURED LOSS.—The term ‘‘insured loss’’ 
means any loss and associated loss adjustment ex-
pense insured or reinsured by an eligible State plan. 
(8) LIQUIDITY
LOAN.—The term ‘‘liquidity 
loan’’ means a loan to an eligible State plan made 
under section 103. 
(9) MULTI-STATE
PLAN.—The term ‘‘multi- 
State plan’’ means a State plan described in para-
graph (13)(A)(ii) of this section. 
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(10) QUALIFIED ENTITY.—The term ‘‘qualified 
entity’’ means a private market reinsurer or other 
private sector entity that has satisfied the criteria 
established by the Secretary to be treated as a quali-
fied entity for the purposes of section 102(e). 
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of the Treasury except as spe-
cifically provided otherwise. 
(12) STATE.—The term ‘‘State’’ includes the 
several States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, 
Guam, the Commonwealth of the Northern Mariana 
Islands, the United States Virgin Islands, and Amer-
ican Samoa, and any other territory or possession of 
the United States. 
(13) STATE
PLAN.—The term ‘‘State plan’’ 
means a plan that— 
(A) is created or administered by— 
(i) a single State; or 
(ii) two or more States; and 
(B) provides insurance or reinsurance pro-
tection to address natural catastrophe prepared-
ness and protection, and in the case of a plan 
described in subparagraph (A)(ii), provides such 
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protection as part of a program covering mul-
tiple States. 
TITLE 
I—TAXPAYER 
PROTEC-
TION, 
PRE-FUNDED 
CATAS-
TROPHE 
RECOVERY, 
AND 
MARKET STABILIZATION 
SEC. 101. NATIONAL COMMISSION ON NATURAL CATAS-
TROPHE PREPARATION AND PROTECTION. 
(a) ESTABLISHMENT.—To effectuate a stronger pub-
lic-private partnership at the local, State, and national lev-
els regarding natural catastrophe preparation and protec-
tion, the Secretary of the Treasury, in consultation with 
the Secretary of Homeland Security, shall establish a com-
mission to be known as the National Commission on Nat-
ural Catastrophe Preparation and Protection (in this title 
referred to as the ‘‘Commission’’). 
(b) DUTIES.—The Commission shall meet for the 
purpose of advising the Secretary regarding the estimated 
loss costs associated with the contracts for reinsurance 
protection made available under this title and carrying out 
the functions specified in this Act, including— 
(1) the development and implementation of 
public education concerning the risks posed by nat-
ural catastrophes; 
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(2) the establishment of a research priority for 
the development and implementation of prevention, 
mitigation, recovery, and rebuilding strategies, that 
better prepare and protect the United States from 
natural catastrophes; 
(3) the establishment of a process for members 
of the Commission to deploy following every major 
catastrophe to inspect and evaluate the handling of 
such catastrophes; 
(4) conducting continuous analysis of the effec-
tiveness of this Act and recommending improve-
ments to the Congress so that the costs of providing 
natural catastrophe protection are decreased and so 
that the United States is better prepared; and 
(5) ensuring that the programs under this title 
are operated in a financially prudent manner and on 
an actuarially sound basis consistent with the provi-
sions of this title and is not dependent on subsidy 
from taxpayers or consumers in areas that do not 
reside in areas that have a high-risk to natural ca-
tastrophe loss, including by monitoring the expendi-
ture of funds for administrative purposes to promote 
efficiency and economy in the operation and admin-
istration of the program and to minimize the cost 
for participating States. 
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(c) MEMBERS.—The Commission shall consist of 14 
members, as follows: 
(1) HOMELAND SECURITY MEMBER.—The Sec-
retary of Homeland Security or the Secretary’s des-
ignee. 
(2) APPOINTED
MEMBERS.—13 members ap-
pointed by the Secretary of the Treasury, who shall 
consist of— 
(A) the Director of the Federal Insurance 
Office of the Department of the Treasury, or 
the Director’s designee; 
(B) a member of a State legislature who 
can provide the perspective of State govern-
ment; 
(C) one individual who is an actuary; 
(D) one individual who is employed in en-
gineering; 
(E) one individual representing the sci-
entific community; 
(F) one individual representing property 
and casualty insurers; 
(G) one individual representing reinsurers; 
(H) one individual who is a member or 
former member of the National Association of 
Insurance Commissioners; 
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(I) two individuals who are consumers, in-
cluding one consumer who is a homeowner who 
resides in an area with relatively high exposure 
to natural catastrophe risk and one consumer 
who resides in an area with relatively low expo-
sure to natural catastrophe risk; 
(J) one individual who is an emergency re-
sponse expert; 
(K) one individual with expertise regarding 
capital markets; and 
(L) one individual representing the resi-
dential construction community. 
(d) TREATMENT
OF NON-FEDERAL MEMBERS.— 
Each member of the Commission who is not otherwise em-
ployed by the Federal Government shall be considered a 
special Government employee for purposes of sections 202 
and 208 of title 18, United States Code. 
(e) EXPERTS AND CONSULTANTS.—The Commission 
may procure temporary and intermittent services from in-
dividuals or groups recognized as experts in the fields of 
actuarial science, meteorology, seismology, vulcanology, 
geology, structural engineering, wind engineering, seismic 
engineering and hydrology, emergency response, and other 
fields, under section 3109(b) of title 5, United States 
Code, but at rates not in excess of the daily equivalent 
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of the annual rate of basic pay payable for level V of the 
Executive Schedule, for each day during which the indi-
vidual procured is performing such services for the Com-
mission. The Commission may also procure, and the Con-
gress encourages the Commission to procure, experts from 
universities, research centers, foundations, and other ap-
propriate organizations that could study, research, and de-
velop methods and mechanisms that could be utilized to 
strengthen structures to better withstand the events cov-
ered by this Act. 
(f) COMPENSATION.—Each member of the Commis-
sion who is not an officer or employee of the Federal Gov-
ernment shall be compensated at a rate of basic pay pay-
able for level V of the Executive Schedule, for each day 
(including travel time) during which such member is en-
gaged in the performance of the duties of the Commission. 
All members of the Commission who are officers or em-
ployees of the United States shall serve without compensa-
tion in addition to that received for their services as offi-
cers or employees of the United States. 
(g) OBTAINING DATA.— 
(1) AUTHORITY.—The Commission and the 
Secretary may solicit loss and exposure data and 
such other information that they deem necessary to 
carry out their responsibilities under this Act from 
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eligible State plans, other governmental agencies, 
and bodies and organizations that act as statistical 
agents for the insurance industry. The Commission 
and the Secretary shall take such actions as are nec-
essary to ensure that confidential or proprietary in-
formation is disclosed only to authorized individuals 
working for the Commission or the Secretary. 
(2) CONFIDENTIALITY.— 
(A) IN
GENERAL.—Information obtained 
by the Commission and the Secretary pursuant 
to this Act with reference to which a request for 
confidential treatment is made by the person 
furnishing such information— 
(i) shall be exempt from disclosure 
under section 552 of title 5, United States 
Code; and 
(ii) shall not be published or disclosed. 
(B) EXCEPTION.—Subparagraph (A) shall 
not apply with respect to the publication or dis-
closure of any data aggregated in a manner 
that ensures protection of the identity of the 
person furnishing such data. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated— 
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(1) $10,000,000 for fiscal year 2013 for the ini-
tial expenses in establishing the Commission and the 
initial activities of the Commission during such fiscal 
year that cannot timely be covered by amounts that 
are deposited in the Fund pursuant to section 
102(e)(5)(D); and 
(2) for fiscal year 2014 and each fiscal year 
thereafter, such sums as may be necessary to carry 
out the activities of the Commission during each 
such fiscal year that cannot timely be covered by 
amounts that are deposited in the Fund pursuant to 
section 102(e)(5)(D). 
(i) TERMINATION.—The Commission shall terminate 
upon the date specified in section 104(c). 
SEC. 102. PRE-FUNDED AND PRIVATELY FINANCED CATAS-
TROPHE RECOVERY PROGRAM. 
(a) PROGRAM AUTHORITY.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury, in consultation with the Secretary of Homeland 
Security, shall carry out a program under this sec-
tion that utilizes premiums from eligible State plans 
to provide additional capacity and stability in the 
homeowners insurance market and improve the 
availability and affordability of homeowners protec-
tion coverage to pre-fund future natural catastrophe 
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recovery by making available for purchase, only by 
eligible State plans, contracts for reinsurance cov-
erage under this section. 
(2) PURPOSE.—The program shall make avail-
able privately funded reinsurance coverage under 
this section— 
(A) to diversify and spread risk more effi-
ciently and leverage the economies of pooling 
reinsurance arrangements from different geo-
graphical areas of the country covering the 
events specified in subsection (c); 
(B) to generate additional capacity and 
provide stability to the homeowners insurance 
market by encouraging States to develop or ex-
pand plans that address current market chal-
lenges and assist homeowners in securing need-
ed protection; 
(C) to improve the availability and afford-
ability of homeowners insurance for the purpose 
of privately financing post-catastrophe recovery 
by facilitating the pooling and spreading the 
risk of catastrophic financial losses from nat-
ural catastrophes; 
(D) to improve the solvency, capacity, and 
stability of homeowners insurance markets, sup-
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plement private market reinsurance, and in-
crease the spread of risk; 
(E) to encourage the development and im-
plementation of mitigation, prevention, recov-
ery, and rebuilding strategies to reduce future 
catastrophe losses; and 
(F) to recommend methods to continuously 
improve the way the United States prepares 
for, reacts to, and responds to catastrophes, in-
cluding improvements to the Catastrophe Pre-
paredness Fund established under section 
102(g). 
(3) CONTRACT
PRINCIPLES.—Under the pro-
gram under this section, the Secretary shall offer re-
insurance coverage through contracts with eligible 
State plans, which contracts shall— 
(A) be priced on an actuarially sound basis 
as specified in this section; and 
(B) provide coverage based solely on in-
sured losses within the State or States partici-
pating in the eligible State plan purchasing the 
contract. 
(b) QUALIFIED LINES OF COVERAGE.—Each con-
tract for reinsurance coverage made available under this 
section shall provide coverage for insured property losses 
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