Sec. 506. Addressing tomorrow’s high-risk structures today
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/bill/115/hr/2874/ih/section-506A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The National Flood Insurance Act of 1968 is amended— in section 1305 ( 42 U.S.C. 4012 ), as amended by the preceding provisions of this Act, by adding at the end the following new subsections: Except as provided in subsection
(g)and notwithstanding any other provision of this title, in carrying out the fiduciary responsibility to the National Flood Insurance Program under section 1309(e) ( 42 U.S.C. 4016(e) ) and to reduce future risks to the National Flood Insurance Fund, on or after January 1, 2021, the Administrator may not make available flood insurance coverage under this title as follows: Any new coverage for any property for which new construction is commenced on or after such date and that, upon completion of such construction, is located in an area having special flood hazards. Any new or renewed coverage for any residential property having 4 or fewer residences and a replacement value of the structure, at the time, exclusive of the value of the real estate on which the structure is located, of $1,000,000 or more (as such amount is adjusted pursuant to clause (i)), subject to the following provisions: The dollar amount in the matter of this subparagraph that precedes this clause (as it may have been previously adjusted) shall be adjusted for inflation by the Administrator upon the expiration of the 5-year period beginning upon the enactment of this subsection and upon the expiration of each successive 5-year period thereafter, in accordance with an inflationary index selected by the Administrator. The Administrator shall determine the replacement value of a property for purposes of this subparagraph using such valuation methods or indicia as the Administrator determines are reasonably accurate, consistent, reliable, and available for such purposes. For any property with risk premium rates estimated under section 1307(a)(1), on or after January 1, 2021, the Administrator shall charge risk premium rates based on the current risk of flood reflected in the flood insurance rate map or comparable risk rating metric in effect at the time a policy is newly issued, unless the newly issued policy covers a property with continuous flood insurance coverage under this title, or upon the renewal of a policy. For all such policy renewals, the Administrator shall increase the risk premium rate in accordance with section 1308(e)(2) until the risk premium rate is equal to the risk of flood reflected in the flood insurance rate map or comparable risk rating metric in effect at the time of renewal. The Administrator may implement this subsection without rulemaking, except that any such implementation shall include advance publication of notice in the Federal Register or advance notice by another comparable method, such as posting on an official website of the Administrator. Upon the effectiveness of a determination under paragraph
(2)with respect to a geographical area, the Administrator may temporarily make available, for properties that are described in subparagraph
(A)or (B), or both, of subsection (f)(1), and are located in such area, coverage for flood insurance under such Act, notwithstanding subsection (f), during the period that begins upon such determination and ends upon the termination date with respect to such period determined under paragraph
(7)of this subsection. A determination under this paragraph for a geographical area is a determination, made by the State insurance regulator for the affected geographical area, that the availability or affordability of private flood insurance coverage in the United States for properties that are described in subparagraph
(A)or (B), or both, of subsection (f)(1) and are located in such area has contracted significantly, made in accordance with the following requirements: The State insurance coordinator has determined that there is no evidence that the State regulatory or legislative structure has unduly hindered the ability of private insurance carriers to compete in the State. The State insurance coordinator has determined that there is evidence of a low market penetration of private flood insurance in the State, or a geographic area of the State, where private insurance carriers have been allowed to participate in the market in a fair process. The State insurance coordinator has determined that private insurers have been given an opportunity to offer flood insurance but have failed to penetrate the markets by more than 10 percent of the market share for flood insurance. The determination under this paragraph was made after the State insurance commissioner provided private insurance carriers and consumers an opportunity to provide information regarding the determination under this paragraph, which included holding a public hearing regarding such determination at which to provide such information that was held not less than 45 days after public notice of the time and place of such hearing was first made available. The Secretary of the Treasury has confirmed the determination under this paragraph based on the conditions of the insurance market for such determination, including the geographic area subject to the determination. A determination under paragraph
(2)shall take effect for purposes of paragraph
(1)upon receipt by the Administrator of written notice of such determination, in accordance with such requirements as the Administrator shall establish. Any flood insurance coverage made available for a property pursuant to this subsection shall be made available at chargeable premium rates otherwise determined under this title for such property, notwithstanding subsection (f), except that the Administrator shall impose and collect a surcharge for such coverage in an amount equal to 10 percent of such chargeable premium rate, which shall be deposited into the National Flood Insurance Fund established under section 1310. Upon making a determination under paragraph (2), the Administrator shall also identify measurable criteria for determining when the conditions determined under paragraph
(2)have ceased to exist for the affected geographical area. Upon making a determination under paragraph (2), the Administrator shall provide, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, written notice of such determination, the geographical area to which such determination applies, and the specific measurable criteria identified pursuant to paragraph (5). The authority to make direct flood insurance coverage available pursuant to this subsection shall terminate upon the earlier of— the expiration of the 12-month period beginning upon the date that notice under paragraph
(6)is provided to the specified Committees; or the occurrence of the conditions identified pursuant to paragraph (5). Nothing in this subsection may be construed to prevent multiple or consecutive periods during which direct flood insurance coverage may be made available pursuant to this subsection for properties referred to in subsection (f)(1). The termination pursuant to paragraph
(7)of authority to make direct flood insurance coverage available pursuant to this subsection may not be construed to affect the effectiveness or term of coverage of any policy for such coverage purchased pursuant to such authority. ; and in section 1306(a)(1) ( 42 U.S.C. 4013(a)(1) ), by inserting , subject to subsections
(f)and
(g)of section 1305 before the semicolon at the end.
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