Sec. 102. Demonstration program for policy affordability
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The Administrator of the Federal Emergency Management Agency shall establish and carry out a demonstration program under this section to demonstrate the effectiveness of providing means-tested discounted rates for flood insurance coverage made available under the National Flood Insurance Act of 1968 for eligible households. The Administrator may consult with the Secretary of the Treasury and the Secretary of Housing and Urban Development about the implementation of the program established pursuant to paragraph (1).
The Administrator may provide discounted premium rates pursuant to this section only for properties that are— 1- to 4-family residential properties; and the primary residence of a household whose income does not exceed 80 percent of the area median income, as determined by the Administrator in consultation with the Secretary of Housing and Urban Development. For purposes of the program under this section, the Administrator shall make determinations of household income on an annual basis.
Notwithstanding any provision of the National Flood Insurance Act of 1968, the chargeable premium rate for flood insurance coverage made available under the program under this section shall be an amount that does not exceed 2 percent of annual area median income for the area within which is located the property for which the coverage is provided. The Administrator shall provide to each policyholder purchasing flood insurance coverage under the program under this section for a property, not later than the commencement of the period of such coverage, a written statement setting forth the full actuarial premium rate for coverage for such property determined in accordance with section 1307(a)(1) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4014(a)(1) ), the amount of the premium discount for such coverage, and any other information the Administrator considers helpful to policyholders in understanding flood insurance coverage and costs.
Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Administrator shall issue guidance providing for the establishment of the demonstration program under this section, which shall include— an estimation of the cost of the program stated in terms of the aggregate of premium discounts to be made available under the program; a description of how the Administrator will determine eligibility for households to participate in the program in accordance with the requirements for eligibility in subsection (b); and any new requirements to which policyholders participating in the program will be subject; and the results of any consultation with the Secretary of the Treasury or the Secretary of Housing and Urban Development.
The Administrator shall collect by survey or other means, for each participating community in the national flood insurance program and regarding each year during the period beginning 5 years before implementation of the demonstration program under this section and ending upon the termination date under subsection (j), the following information: The demographic characteristics of households purchasing flood insurance coverage under such program. The average median income of such households.
The number of properties located in areas for which a major disaster related to flooding was declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The number of policies made available under the national flood insurance program and the number and aggregate amount of claims submitted under such program. For all properties in such community receiving discounted coverage under the demonstration program under this section, the aggregate amount of the full actuarial premium rate for coverage that is determined in accordance with section 1307(a)(1) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4014(a)(1) ) and the aggregate amount of premium discounts provided under the demonstration program.
For all properties in such community, any changes to such full actuarial premium rates due to mapping changes or other factors. Not later than the expiration of the 5-year period beginning upon the implementation of the demonstration program under this section, the Administrator shall submit to the Congress a report evaluating the effectiveness of the assistance provided under the program, which shall include— a statement of the number of households participating in the program and the rates of participation by communities participating in the national flood insurance program, including whether such rates of participation have changed by year; and an estimate of the cost of the program to the National Flood Insurance Fund under section 1310 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4017 ).
For purposes of this section, the following definitions shall apply: The term Administrator means the Administrator of the Federal Emergency Management Agency. The term premium discount means, with respect to a policy for flood insurance coverage under the national flood insurance program made available under the program under this section, the amount by which the full actuarial premium rate for coverage for such property that is determined in accordance with section 1307(a)(1) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4014(a)(1) ) exceeds the chargeable premium rate for the coverage made available under the program under this section.
The authority under this section to provide discounted premium rates for flood insurance coverage shall terminate on May 31, 2024.
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