Increased Cost of Compliance Modernization Act of 2022
Bill: H.R.7221 | Sponsor: Rep. Rice, Tom (R-SC)
Policy area: Finance and Financial Sector

Summary:
Increased Cost of Compliance Modernization Act of 2022
This bill increases insurance coverage available to structures in high-risk flood areas under the National Flood Insurance Program (NFIP), commonly known as Increased Cost of Compliance (ICC) coverage. ICC coverage applies to costs related to flood mitigation requirements for repairs to, or the rebuilding of, flood-damaged structures with existing NFIP coverage.
Currently, ICC coverage is capped at $30,000. The bill increases this amount to 20% of the maximum amount of flood insurance coverage (currently $50,000) with additional coverage available of up to 40% of the maximum amount of coverage (currently $100,000).
The bill removes the cap on ICC premiums and requires the premium amount to be calculated pursuant to other NFIP rates. Additionally, ICC coverage does not count towards the cap on overall NFIP coverage.
Finally, ICC policyholders are allowed to assign the rights or benefits of this coverage to a governmental agency to satisfy certain cost-sharing requirements applicable to mitigation assistance programs.

To increase coverage under the National Flood Insurance Program for 
              costs of compliance, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Increased Cost of Compliance 
Modernization Act of 2022''.

SEC. 2. INCREASED COST OF COMPLIANCE COVERAGE.

    Section 1304(b) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4011(b)) is amended--
            (1) in paragraph (4), by redesignating subparagraphs (A) 
        through (D) as clauses (i) through (iv), respectively, and 
        adjusting the margins accordingly;
            (2) by redesignating paragraphs (1) through (4) as 
        subparagraphs (A) through (D), respectively, and adjusting the 
        margins accordingly;
            (3) by striking ``(b) Additional Coverage for Compliance 
        With Land Use and Control Measures.--The national'' and 
        inserting the following:
    ``(b) Additional Coverage for Compliance With Land Use and Control 
Measures.--
            ``(1) In general.--The national'';
            (4) by striking the last sentence (relating to surcharge); 
        and
            (5) by adding at the end the following:
    ``(2) Coverage Amounts.--
            ``(A) Basic coverage.--Unless a policyholder chooses 
        additional coverage pursuant to subparagraph (B), the 
        Administrator shall make available coverage provided under 
        paragraph (1) in an amount equal to 20 percent of the maximum 
        amount of flood insurance coverage allowable under section 
        1306(b)(2) (42 U.S.C. 4013(b)(2)) with respect to a residential 
        building described in such section.
            ``(B) Additional coverage.--The Administrator may offer, 
        and a policyholder may choose to purchase for an additional 
        premium, coverage provided under paragraph (1) in an amount 
        greater than that offered pursuant to subparagraph (A), but not 
        exceeding an amount equal to 40 percent of the maximum amount 
        of flood insurance coverage allowable under section 1306(b)(2) 
        (42 U.S.C. 4013(b)(2)) with respect to a residential building 
        described in such section.
            ``(C) Treatment of coverage limits.--Any amount of coverage 
        for a property provided pursuant to this subsection shall not 
        be considered or counted for purposes of any limitation on 
        coverage applicable to such property under section 1306(b) and 
        any claim on such coverage shall not be considered a claim for 
        purposes of identifying properties with multiple losses.
    ``(3) Premiums.--The Administrator shall charge risk premium rates 
for coverage made available pursuant to this subsection in accordance 
with section 1307(a)(1).
    ``(4) Assignment of Coverage for Mitigation Grant Cost Share 
Requirement.--
            ``(A) In general.--A policyholder may assign the rights or 
        benefits of the coverage made available under this subsection 
        to a governmental entity for the purposes of using payments 
        made for a claim against coverage made available under this 
        subsection to satisfy a required non-Federal contribution for a 
        flood-related mitigation project funded by a mitigation 
        assistance program described in clause (i), (ii), or (iii) of 
        paragraph (1)(D).
            ``(B) Eligible expenses.--If a policyholder assigns rights 
        or benefits of coverage pursuant to subparagraph (A), a 
        required non-Federal contribution for a flood-related 
        mitigation project funded by a mitigation assistance program 
        described in clause (i), (ii) or (iii) of paragraph (1)(D) 
        shall be an eligible expense for coverage made available under 
        this subsection.
            ``(C) Terms and conditions.--The Administrator may adopt 
        procedures for assigning rights or benefits of coverage 
        pursuant to subparagraph (A).
    ``(5) Implementation.--Notwithstanding any other provision of law, 
the Administrator may implement this subsection by adopting one or more 
standard endorsements to the Standard Flood Insurance Policy by 
publication of such standards endorsement in the Federal Register or by 
comparable means.''.
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