Title: Taxpayer Exposure Mitigation Act of 2017
Policy area: Finance and Financial Sector

Summary:
Taxpayer Exposure Mitigation Act of 2017
This bill amends the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 to limit the required purchase of flood insurance in certain circumstances to only residential properties (currently, the requirement applies to all types of property). It also requires the Federal Emergency Management Agency (FEMA) to annually transfer a portion of the risk from the National Flood Insurance Program (NFIP) to private reinsurance or capital markets. The amount of transferred risk must be based on a probable maximum loss target for NFIP established by FEMA each fiscal year.
The Biggert-Waters Flood Insurance Reform Act of 2012 is amended to require the Technical Mapping Advisory Council to develop: (1) standards for local and state governments to use for mapping flood risks and developing alternative flood insurance rate maps, and (2) certification procedures to use such alternative maps under the NFIP to replace FEMA maps that have not been updated or reissued in 36 months.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2246 Introduced in House (IH)]

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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.

    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 ``Taxpayer Exposure Mitigation Act of 
2017''.

SEC. 2. OPT-OUT OF MANDATORY COVERAGE REQUIREMENT 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 ``residential'' 
                before ``improved real estate''; and
                    (B) in paragraph (8), by inserting ``residential'' 
                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'' 
                                before ``improved real estate''; and
                                    (II) by inserting ``residential'' 
                                before ``building or mobile home'';
                            (ii) in paragraph (2)--
                                    (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                    (II) by inserting ``residential'' 
                                before ``building or mobile home''; and
                            (iii) in paragraph (3)--
                                    (I) in subparagraph (A), by 
                                inserting ``residential'' before 
                                ``improved real estate''; and
                                    (II) in the matter after and below 
                                subparagraph (B), by inserting 
                                ``residential'' before ``building or 
                                mobile 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 inserting ``for any 
                structure that is part of a residential property'';
                    (C) in subsection (e)--
                            (i) in paragraph (1)--
                                    (I) by inserting ``residential'' 
                                before ``improved real estate''; and
                                    (II) by inserting ``residential'' 
                                before ``building or mobile home'' each 
                                place such term appears; and
                            (ii) in paragraph (5)--
                                    (I) in subparagraph (A)--
                                            (aa) by inserting 
                                        ``residential'' before 
                                        ``improved real estate'' each 
                                        place such term appears; and
                                            (bb) by inserting 
                                        ``residential'' before 
                                        ``building or mobile home'' 
                                        each place such term appears;
                                    (II) in subparagraph (B), by 
                                inserting ``residential'' before 
                                ``building or mobile home'' each place 
                                such term appears; and
                                    (III) in subparagraph (C), by 
                                inserting ``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 ``residential'' 
                before ``improved real estate'';
                    (B) in paragraph (2), by inserting ``residential'' 
                before ``improved real estate''; and
                    (C) in paragraph (3)(A), by inserting 
                ``residential'' 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 ``residential'' 
                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)--
                    (A) in paragraph (8), by inserting ``residential'' 
                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 
coverage under the National Flood Insurance Program for eligible non-
residential properties or to prohibit the purchase 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 Administrator'' 
        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.--
                    ``(A) Requirement.--Not later than the expiration 
                of the 18-month period beginning upon the date of the 
                enactment of this paragraph and at all times 
                thereafter, the Administrator 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 ability 
                        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 probable 
                        maximum loss target established for such year 
                        under subparagraph (B).
                    ``(B) Probable maximum loss target.--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 
                expected to occur in such fiscal year.
                    ``(C) Considerations.--In establishing the probable 
                maximum loss target under subparagraph (B) for each 
                fiscal year and carrying out subparagraph (A), the 
                Administrator shall consider--
                            ``(i) the probable maximum loss targets for 
                        other United States public natural catastrophe 
                        insurance programs, including as State wind 
                        pools and earthquake programs;
                            ``(ii) the probable maximum loss targets of 
                        other risk management organizations, including 
                        the Federal National Mortgage Association and 
                        the Federal Home Loan Mortgage Corporation;
                            ``(iii) catastrophic, actuarial, and other 
                        appropriate data modeling results of the 
                        national flood insurance program portfolio;
                            ``(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 
                        established under section 1310A (42 U.S.C. 
                        4017a);
                            ``(vi) the availability of borrowing 
                        authority 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, 
                        catastrophe bonds, collateralized reinsurance, 
                        resilience bonds, and other insurance-linked 
                        securities, and other risk transfer 
                        opportunities; and
                            ``(x) any other factor the Administrator 
                        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.''.

SEC. 4. PRIVATE OR COMMUNITY FLOOD MAPS.

    Section 100215 of the Biggert-Waters Flood Insurance 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 addition 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 
        enactment of this subsection, the Council shall develop and 
        establish a set of standards, guidelines, and procedures for--
                    ``(A) State and local governments, federally or 
                State recognized Metropolitan Planning Organizations 
                (MPOs), federally or State recognized Councils of Local 
                Governments, and federally 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 by the Administrator which has 
                not been updated 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 insurance rate 
                map in effect for all purposes of the National Flood 
                Insurance Program, with respect to the area covered by 
                the map; and
                    ``(B) may not be revised, updated, or replaced 
                pursuant to the standards, guidelines, and procedures 
                established pursuant to paragraph (1) before the 
                expiration of the 36-month period beginning upon such 
                certification.
            ``(3) Exemption from rulemaking.--Until such time as the 
        Administrator promulgates regulations implementing paragraphs 
        (1) and (2) of this subsection, the Administrator may adopt 
        policies and procedures, notwithstanding any other provisions 
        of law, necessary to implement such paragraphs without 
        undergoing notice and comment rulemaking and without conducting 
        regulatory analyses otherwise required by statute, regulation, 
        or executive order.''.
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