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 trans-
fer 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 require-
ment 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Taxpayer Exposure 
Mitigation Act of 2017’’. 
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SEC. 2. OPT-OUT OF MANDATORY COVERAGE REQUIRE-
MENT FOR COMMERCIAL PROPERTIES. 
(a) AMENDMENTS TO FLOOD DISASTER PROTECTION 
ACT OF 1973.—The Flood Disaster Protection Act of 
1973 is amended— 
(1) in section 3(a) (42 U.S.C. 4003(a))— 
(A) in paragraph (7), by inserting ‘‘resi-
dential’’ before ‘‘improved real estate’’; and 
(B) in paragraph (8), by inserting ‘‘resi-
dential’’ before ‘‘building’’; and 
(2) in section 102 (42 U.S.C. 4012a)— 
(A) in subsection (b)— 
(i) in paragraph (1)(A)— 
(I) by inserting ‘‘residential’’ be-
fore ‘‘improved real estate’’; and 
(II) by inserting ‘‘residential’’ be-
fore ‘‘building or mobile home’’; 
(ii) in paragraph (2)— 
(I) by inserting ‘‘residential’’ be-
fore ‘‘improved real estate’’; and 
(II) by inserting ‘‘residential’’ be-
fore ‘‘building or mobile home’’; and 
(iii) in paragraph (3)— 
(I) in subparagraph (A), by in-
serting ‘‘residential’’ before ‘‘improved 
real estate’’; and 
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(II) in the matter after and 
below subparagraph (B), by inserting 
‘‘residential’’ before ‘‘building or mo-
bile home’’; 
(B) in subsection (c)(3), by striking ‘‘, in 
the case of any residential property, for any 
structure that is part of such property’’ and in-
serting ‘‘for any structure that is part of a resi-
dential property’’; 
(C) in subsection (e)— 
(i) in paragraph (1)— 
(I) by inserting ‘‘residential’’ be-
fore ‘‘improved real estate’’; and 
(II) by inserting ‘‘residential’’ be-
fore ‘‘building or mobile home’’ each 
place such term appears; and 
(ii) in paragraph (5)— 
(I) in subparagraph (A)— 
(aa) by inserting ‘‘residen-
tial’’ before ‘‘improved real es-
tate’’ each place such term ap-
pears; and 
(bb) by inserting ‘‘residen-
tial’’ before ‘‘building or mobile 
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home’’ each place such term ap-
pears; 
(II) in subparagraph (B), by in-
serting ‘‘residential’’ before ‘‘building 
or mobile home’’ each place such term 
appears; and 
(III) in subparagraph (C), by in-
serting ‘‘residential’’ before ‘‘building 
or mobile home’’; and 
(D) in subsection (h)— 
(i) by inserting ‘‘residential’’ before 
‘‘improved real estate’’ each place such 
term appears; and 
(ii) in the matter preceding paragraph 
(1), by inserting ‘‘residential’’ before 
‘‘building or mobile home’’. 
(b) AMENDMENTS TO NATIONAL FLOOD INSURANCE 
ACT OF 1968.—The National Flood Insurance Act of 
1968 is amended— 
(1) in section 1364(a) (42 U.S.C. 4104a(a))— 
(A) in paragraph (1), by inserting ‘‘resi-
dential’’ before ‘‘improved real estate’’; 
(B) in paragraph (2), by inserting ‘‘resi-
dential’’ before ‘‘improved real estate’’; and 
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(C) in paragraph (3)(A), by inserting ‘‘res-
idential’’ before ‘‘building’’; 
(2) in section 1365 (42 U.S.C. 4104b)— 
(A) in subsection (a)— 
(i) by inserting ‘‘residential’’ before 
‘‘improved real estate’’; and 
(ii) by inserting ‘‘residential’’ before 
‘‘building’’; 
(B) in subsection (b)(2)— 
(i) by inserting ‘‘residential’’ before 
‘‘building’’ each place such term appears; 
and 
(ii) by inserting ‘‘residential’’ before 
‘‘improved real estate’’ each place such 
term appears; 
(C) in subsection (d), by inserting ‘‘resi-
dential’’ before ‘‘improved real estate’’ each 
place such term appears; and 
(D) in subsection (e)— 
(i) by inserting ‘‘residential’’ before 
‘‘improved real estate’’; and 
(ii) by inserting ‘‘residential’’ before 
‘‘building’’ each place such term appears; 
and 
(3) in section 1370 (42 U.S.C. 4121)— 
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(A) in paragraph (8), by inserting ‘‘resi-
dential’’ before ‘‘improved real estate’’; and 
(B) in paragraph (10)— 
(i) by inserting ‘‘residential’’ after the 
opening quotation marks; and 
(ii) by inserting ‘‘residential’’ before 
‘‘building’’. 
(c) RULE OF CONSTRUCTION.—This section and the 
amendments made by this section may not be construed 
to prohibit the Administrator of the Federal Emergency 
Management Agency from offering flood insurance cov-
erage under the National Flood Insurance Program for 
eligible non-residential properties or to prohibit the pur-
chase of such coverage for such eligible properties. 
SEC. 3. RISK TRANSFER REQUIREMENT. 
Subsection (e) of section 1345 of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4081(e)) is amended— 
(1) by striking ‘‘(e) RISK TRANSFER,—The Ad-
ministrator’’ and inserting the following: 
‘‘(e) RISK TRANSFER.— 
‘‘(1) AUTHORITY.—The Administrator’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) REQUIRED RISK TRANSFER COVERAGE.— 
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‘‘(A) REQUIREMENT.—Not later than the 
expiration of the 18-month period beginning 
upon the date of the enactment of this para-
graph and at all times thereafter, the Adminis-
trator shall annually cede a portion of the risk 
of the flood insurance program under this title 
to the private reinsurance or capital markets, or 
any combination thereof, and at rates and 
terms that the Administrator determines to be 
reasonable and appropriate, in an amount 
that— 
‘‘(i) is sufficient to maintain the abil-
ity of the program to pay claims; and 
‘‘(ii) manages and limits the annual 
exposure of the flood insurance program to 
flood losses in accordance with the prob-
able maximum loss target established for 
such year under subparagraph (B). 
‘‘(B) PROBABLE
MAXIMUM
LOSS
TAR-
GET.—The Administrator shall for each fiscal 
year, establish a probable maximum loss target 
for the national flood insurance program that 
shall be the maximum probable loss under the 
national flood insurance program that is ex-
pected to occur in such fiscal year. 
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‘‘(C) CONSIDERATIONS.—In establishing 
the probable maximum loss target under sub-
paragraph (B) for each fiscal year and carrying 
out subparagraph (A), the Administrator shall 
consider— 
‘‘(i) the probable maximum loss tar-
gets for other United States public natural 
catastrophe insurance programs, including 
as State wind pools and earthquake pro-
grams; 
‘‘(ii) the probable maximum loss tar-
gets of other risk management organiza-
tions, including the Federal National Mort-
gage Association and the Federal Home 
Loan Mortgage Corporation; 
‘‘(iii) 
catastrophic, 
actuarial, 
and 
other appropriate data modeling results of 
the national flood insurance program port-
folio; 
‘‘(iv) the availability of funds in the 
National Flood Insurance Fund established 
under section 1310 (42 U.S.C. 4017); 
‘‘(v) the availability of funds in the 
National Flood Insurance Reserve Fund 
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established under section 1310A (42 
U.S.C. 4017a); 
‘‘(vi) the availability of borrowing au-
thority under section 1309 (42 U.S.C. 
4016); 
‘‘(vii) the ability of the Administrator 
to repay outstanding debt; 
‘‘(viii) amounts appropriated to the 
Administrator to carry out the national 
flood insurance program; 
‘‘(ix) reinsurance, capital markets, ca-
tastrophe bonds, collateralized reinsurance, 
resilience bonds, and other insurance- 
linked securities, and other risk transfer 
opportunities; and 
‘‘(x) any other factor the Adminis-
trator determines appropriate. 
‘‘(D) MULTI-YEAR
CONTRACTS.—Nothing 
in this paragraph may be construed to prevent 
or prohibit the Administrator from complying 
with the requirement under subparagraph (A) 
regarding ceding risk through contracts having 
a duration longer than one year.’’. 
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SEC. 4. PRIVATE OR COMMUNITY FLOOD MAPS. 
Section 100215 of the Biggert-Waters Flood Insur-
ance Reform Act of 2012 (42 U.S.C. 4101a) is amended 
by adding at the end the following new subsection: 
‘‘(m) PRIVATE OR COMMUNITY FLOOD MAPS.— 
‘‘(1) STANDARDS AND PROCEDURES.—In addi-
tion to the other duties of the Council under this 
section, not later than the expiration of the 12- 
month period beginning on the date of the enact-
ment of this subsection, the Council shall develop 
and establish a set of standards, guidelines, and pro-
cedures for— 
‘‘(A) State and local governments, feder-
ally or State recognized Metropolitan Planning 
Organizations (MPOs), federally or State recog-
nized Councils of Local Governments, and fed-
erally or State recognized Rural Transportation 
Planning Organizations to use in mapping flood 
risks and developing alternative maps to the 
flood insurance rate maps developed by the 
Agency; and 
‘‘(B) certification, by the Administrator 
and within 90 days of submission, of such maps 
for use under the National Flood Insurance 
Program in the case of any area covered by a 
flood insurance rate map developed or approved 
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by the Administrator which has not been up-
dated or reissued for 36 months or longer. 
‘‘(2) TREATMENT.—Upon certification of a map 
pursuant to paragraph (1)(B), such map— 
‘‘(A) shall be considered the flood insur-
ance rate map in effect for all purposes of the 
National Flood Insurance Program, with re-
spect to the area covered by the map; and 
‘‘(B) may not be revised, updated, or re-
placed pursuant to the standards, guidelines, 
and procedures established pursuant to para-
graph (1) before the expiration of the 36-month 
period beginning upon such certification. 
‘‘(3) EXEMPTION
FROM
RULEMAKING.—Until 
such time as the Administrator promulgates regula-
tions implementing paragraphs (1) and (2) of this 
subsection, the Administrator may adopt policies 
and procedures, notwithstanding any other provi-
sions of law, necessary to implement such para-
graphs without undergoing notice and comment rule-
making and without conducting regulatory analyses 
otherwise required by statute, regulation, or execu-
tive order.’’. 
Æ 
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