Floods can result in the loss of lives, extensive damage to property and agriculture, and large-scale disruptions to business and infrastructure, such as transportation and water and sewer services. The National Oceanic and Atmospheric Administration estimates that floods cause about 140 deaths in the United States each year, and the Army Corps of Engineers estimates that floods cause $6 billion in average annual losses. Congress established NFIP in the National Flood Insurance Act of 1968 to provide policyholders with some insurance coverage for flood damage as an alternative to disaster assistance, and to try to reduce the escalating costs of repairing flood damage.subsequently modified by various amendments, including the Flood Disaster Protection Act of 1973 (1973 Act) and the National Flood The program was Insurance Reform Act of 1994. And most recently, NFIP was amended by the Biggert-Waters Flood Insurance Reform Act of 2012. The 1973 Act added certain requirements that, according to FEMA officials, were intended to encourage community participation in NFIP. Specifically, as a condition of future federal financial assistance, communities are required to participate in NFIP and to adopt adequate floodplain ordinances with effective enforcement provisions consistent with federal standards in order to reduce or avoid future flood losses. Figure 1, which shows the location of U.S. Indian reservations and major flood disaster declarations over a 25-year period, indicates that many Indian tribes reside in areas that have experienced multiple floods. The 1973 Act denied direct federal financial assistance and financing by private lending institutions regulated by federal regulators for acquisition or construction purposes in participating communities where flood insurance was available unless the property was covered by flood insurance. Prior to the 1973 Act, the purchase of flood insurance had been voluntary. However, this mandatory purchase requirement, further amended by the National Flood Insurance Reform Act of 1994, effectively requires owners of property to obtain flood insurance if they are located in a Special Flood Hazard Area (SFHA) within a community participating in NFIP and obtain a mortgage from a federally regulated lending institution or a federal agency lender or receive direct federal financial assistance for acquisition or construction purposes. The mandatory purchase requirement applies to secured mortgage loans from financial institutions such as banks, savings and loan associations, savings banks, and credit unions that are supervised by federal agencies, including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. It also applies to all mortgage loans secured by real estate on which a building is constructed in an SFHA for which flood insurance is available if purchased by Fannie Mae and Freddie Mac in the secondary mortgage market. Loans and grants through financial assistance programs from agencies such as the Federal Housing Administration and the Department of Veterans Affairs are also affected. The requirement also extends to several federal programs that assist Indian tribes. For example, recipients of funds from BIA’s Housing Improvement Program, HUD’s Indian Housing Block Grant (IHBG) and Indian Community Development Block Grant (ICDBG), and several USDA Rural Development loan programs are required to purchase flood insurance if an assisted structure is in an SFHA. Finally, individuals in SFHAs who receive federal disaster assistance after September 23, 1994, for flood disaster losses to real or personal property are required, as a condition for receiving future disaster assistance, to purchase and maintain flood insurance coverage on the property. According to FEMA, in December 2012 the average NFIP policy cost about $600 per year, with policies in SFHAs typically costing more and some policies outside SFHAs costing less. FEMA identifies and maps flood-prone areas throughout the United States and its territories that are eligible to participate in NFIP. According to a Congressional Research Service (CRS) report on NFIP, FEMA also makes flood hazard information available on its website for viewing or purchasing. The report notes that FEMA works with communities to develop new flood hazard data as part of a flood insurance study, issues public notification about maps, and engages in education and outreach to help ensure that community leaders and residents understand the mapping process and the appropriate use of flood maps. The CRS report further notes that reliable flood risk data, including updated flood maps, and educating residents about flood risk, contribute to mitigating future flood losses. Most areas of flood hazard are commonly identified on Flood Insurance Rate Maps (FIRM), and areas not yet identified by a FIRM may be mapped on Flood Hazard Boundary Maps. Several areas of flood hazard are identified on these maps, one of which is the SFHA. The SFHA is a high-risk area defined as any land that would be inundated by a flood having a 1 percent chance of occurring in a given year (base flood); this is the equivalent of a 26 percent chance of flooding over a 30- year mortgage. According to FEMA, the SFHA constitutes a reasonable compromise between the need for building restrictions to minimize potential loss of life and property and the economic benefits to be derived from floodplain development. Development may take place within an SFHA as long as it complies with local floodplain management ordinances, which must meet minimum federal requirements. Flood insurance is required for insurable structures within high-risk areas to protect federal financial investments and assistance used for acquisition or construction purposes within communities participating in NFIP. In July 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012. The act extends NFIP for 5 years and makes reforms to the program that include (1) phasing out subsidies for many properties, (2) raising the cap on annual premium increases for other policies from 10 to 20 percent, (3) clarifying that certain multifamily properties are eligible for NFIP policies, (4) imposing minimum deductibles for flood claims, (5) requiring NFIP to establish a reserve fund, and (6) establishing a technical mapping advisory council to deal with map modernization issues. The act also calls for an assessment by FEMA and GAO, separately, of options and strategies for privatizing NFIP in the future and authorizes FEMA to pursue private risk-management initiatives to determine the capacity of private insurers and markets to assist communities in managing the full range of financial risks associated with flooding. Because of its subsidized premium rates and catastrophic hurricane- related floods in recent years, NFIP has accrued a substantial debt that stood at nearly $18 billion as of October 2012. We previously reported that NFIP was designed to pay operating expenses and flood insurance claims with premiums collected on flood insurance policies rather than with tax dollars, and that FEMA had statutory authority to borrow funds from Treasury to keep NFIP solvent in years when losses were high. We noted that by design NFIP was not actuarially sound, because Congress authorized subsidized insurance rates for policies covering certain structures to encourage communities to join the program. Since 2000, NFIP has experienced several catastrophic loss years (years with $1 billion or more in losses). These years include 2001, 2004, 2005, and 2008. By the end of 2012, NFIP is expected to have experienced another catastrophic loss year because of the enormous damage from the October storm known as Superstorm Sandy. Under FEMA’s NFIP regulations, a community is defined as any state or area or political subdivision thereof or any Indian tribe or authorized tribal organization, or Alaska Native Village or authorized native organization, that has the authority to adopt and enforce floodplain management ordinances for the area under its jurisdiction. Indian tribes, authorized tribal organizations, Alaska Native villages, and authorized native organizations that have land use authority are considered communities by NFIP and can join the program even if no flood hazard map exists that covers all tribal lands. See 44 C.F.R. § 206.110(k). where the community is participating in NFIP, unless the property is covered by flood insurance. Participating communities can receive discounts on flood insurance if they establish floodplain management programs that go beyond the minimum requirements of NFIP. FEMA can suspend communities that do not comply with the program and communities can withdraw from the program (both with sanctions). Currently, more than 21,000 communities participate in NFIP. Communities participating in NFIP do so as part of either the regular or emergency program. A community participating in the regular NFIP program is usually provided with a FIRM and a flood insurance study. As part of their agreement to participate in NFIP, communities adopt and enforce floodplain management ordinances and FIRMs. If communities do not adopt and enforce these ordinances, they can be placed on probation or suspended from the program. However, such actions take place only after FEMA has taken steps to help the community become compliant. The NFIP emergency program is the initial phase of a community’s participation in NFIP and was designed to provide a limited amount of flood insurance. A community participating in the emergency program either does not have an identified and mapped flood hazard or has been provided with a Flood Hazard Boundary Map, and the community is required to adopt limited floodplain management standards to control future use of its floodplain. According to FEMA, fewer than 3 percent of the more than 21,000 communities participating in NFIP are in the emergency program. The federal government has consistently recognized Indian tribes as distinct, independent political communities with the inherent powers of a limited sovereignty that has never been extinguished. As of August 2012, there were 566 federally recognized tribes—341 in the contiguous 48 To help manage tribal affairs, tribes have states and 225 in Alaska.formed governments and subsidiaries of tribal governments, including schools, housing, health, and other types of corporations. The United States has a trust responsibility to recognized Indian tribes and maintains a government-to-government relationship with them. Tribal lands vary dramatically in size, demographics, and location. They range from the Navajo Nation, which consists of about 27,000 square miles across portions of Arizona, New Mexico, and Utah, to some tribal land areas in California of less than 1 square mile.