GovTrack’s Bill Summary
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This bill was introduced in a previous session of Congress and was passed by the House on July 15, 2010 but was never passed by the Senate.
Last updated Jul 19, 2010.
|Referred to Committee|
|Reported by Committee|
To extend the authorization for the national flood insurance program, to identify priorities essential to reform and ongoing stable functioning of the program, and for other purposes.
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H.R. 5114--111th Congress: Flood Insurance Reform Priorities Act of 2010. (2010). In www.GovTrack.us. Retrieved March 13, 2014, from http://www.govtrack.us/congress/bills/111/hr5114
“H.R. 5114--111th Congress: Flood Insurance Reform Priorities Act of 2010.” www.GovTrack.us. 2010. March 13, 2014 <http://www.govtrack.us/congress/bills/111/hr5114>
|title=H.R. 5114 (111th)
|accessdate=March 13, 2014
|author=111th Congress (2010)
|date=April 22, 2010
|quote=Flood Insurance Reform Priorities Act of 2010
We don’t have a summary available yet.
The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.
The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.
This summary can be found at http://www.gop.gov/bill/111/2/hr5114.
The NFIP, the largest single-line property insurer in the nation, provides coverage for more than five million properties. Homeowners, renters and other businesses across the country are required to purchase flood insurance coverage through participating insurance agents and companies. The companies receive an expense allowance for policies written and claims processed. The agents earn a commission for policies sold and serviced, and the federal government retains responsibility for underwriting losses and paying claims. The NFIP is currently operating on a shot-term extension through September 30, 2010.
When the NFIP’s losses exceed premiums, FEMA is authorized to borrow for the U.S. Treasury. The NFIP is currently facing financial challenges. The GAO has included the NFIP on its annual list of high-risk government programs since 2006 because of its ongoing potential to incur billions of dollars in losses. With an $18.75 billion debt to the Treasury and the persistence of subsidized premium rates for properties in high-risk areas, the NFIP continues to be underfunded and federal taxpayers remain at risk. Some Members may be concerned that the bill does not address or protect the taxpayers from the NFIP’s current $18.75 billion deficit. According to the CBO, it is unlikely that the NFIP will pay this debt and will exhaust its remaining borrowing authority. The NFIP is currently authorized to borrow up to $20.775 billion.
Lastly, FEMA is currently working on a multi-year flood map modernization program to update and revise more than 20,000 flood maps. Some Members may be concerned that FEMA’s modernization plans may designate properties that historically have not been in flood zones to be included in such, if FEMA deems it appropriate. Such a designation would require property owners to purchase flood insurance and comply with FEMA regulations.
Extension of the National Flood Insurance Program, Phase-In of Actuarial Rates and Mandatory Purchase Requirement for New Flood Hazard Areas
H.R. 5114 would reauthorize the National Flood Insurance Program (NFIP) for five years through 2015. The bill would also extend the Severe Repetitive Loss Pilot program through September 30, 2015. Some Members may be concerned that CBO estimates that extending the pilot program would cost $132 million.
The bill would increase the maximum coverage limits for flood insurance policies. The new coverage limits would be $335,000 (up from $250,000) for residences; $135,000 (up from $100,000) for residential contents; and $670,000 (up from $500,000) for nonresidential properties.
The bill would require the phase-in of actuarial rates (or the phase-out of subsidized rates), for commercial and non-primary residential pre-FIRM properties (e.g., vacation homes). The phase-in would also apply to pre-FIRM single principal residences sold after enactment of this bill. The phase-in would not apply to multifamily rental properties or rentals that are the primary residence of a tenant. This provision would take effect three years after enactment of the bill. Some Members may be concerned the delay in the phase out of subsidized rates would further expose the taxpayers to the risk of loss.
The bill would delay for five years the mandatory flood insurance purchase requirement for areas newly designated as Special Flood Hazard Areas after September 1, 2008. This provision would not delay the implementation of updated flood maps, notification of flood hazards, availability of flood insurance coverage, or the eligibility for mitigation assistance.
The legislation would phase in full-risk rates for areas newly designated as Special Flood Hazard Areas. The rate phase in would be 20 percent per year for five years and begin after the end of the mandatory flood insurance purchase requirement delay (5 years). The legislation would also increase the annual limitation on premium increases from 10 percent to 20 percent. Some Members may be concerned the delay in the phase in of risk-based rates would further expose the taxpayers to the risk of loss.
The bill would require FEMA to treat state or locally funded flood control projects equally with federally funded projects in NFIP regulations regarding flood insurance mapping and rating. The bill would also direct FEMA not to impose the mandatory flood insurance purchase requirement and apply premium rates that would apply had the system met the standards for accreditation when communities relied on data and designs provided by a federal agency to build a flood protection system and through no design default and no other fault of the community's FEMA subsequently determined that the system would not meet 100-year risk protection standards for accreditation.
Premium Increases, Coverage for Additional Living Expenses, Minimum Deductibles for Claims, Enforcement, and Installments for Low-Income Policyholders
The bill would provide coverage for additional living expenses and business interruption. Coverage for additional living expenses would not be less than $1,000. Business interruption coverage provided would be required to be structured by the FEMA Administrator in a manner consistent with the NFIP's existing underwriting capacity.
The legislation would increase the minimum annual deductibles for both pre-FIRM and post-FIRM properties. The deductible for pre-FIRM properties would be increased to $1,500 for claims less than $100,000 and increased to $2,000 for claims greater than $100,000. The deductible for post-FIRM properties would be increased to $750 for claims less than $100,000 and increased to $1,000 for claims greater than $100,000.
The bill would create a flood insurance premium payment installment plan for low-income families. Low-income families are defined as any family with an income level at or below 200 percent of the poverty level or that has no employed adult member.
The bill would increase to $2,000 the fine levied against federally-regulated lending institutions for each failure to enforce mandatory flood insurance purchase requirements and increasing the annual cap on fines for institutions to $1 million. The cap would not apply to institutions that were assessed penalties of $1 million in any 3 of the last 5 years. The bill also contains a “safe harbor” for lending institutions that make a good faith effort to comply with mandatory flood insurance purchase requirements, or if such a violation is not material in nature.
The legislation would direct FEMA to require landlords to inform tenants about their property's location in a flood zone, the availability of flood insurance coverage, and how to purchase the coverage
Flood Insurance Outreach, Flood Insurance Advocate, and Required Studies
The bill would create a competitive grant program for communities that encourage homeowners to purchase flood insurance, where those homeowners are not legally required to do so, and to educate all residents about the benefits of flood insurance. Additionally, the bill would require FEMA to report to Congress a description of its marketing and outreach efforts to educate consumers on obtaining flood insurance. Additionally, the bill would require disclosure in the Real Estate Settlement Procedures Act (RESPA) good faith estimate regarding the availability of flood insurance and state that flood insurance would be available even if the home is not in a flood zone. Some Members may be concerned that the establishment of a new outreach grant program, according to the CBO, represents approximately $222 million in new government spending over the next five years. Also, while the bill would eliminate some subsidies, increase the limits on premiums and impose minimum deductibles, some Members may be concerned that rather than transferring underwriting to the private sector, outreach would ultimately expand a taxpayer backed government program that currently has an $18.75 billion deficit.
The bill would direct FEMA and HUD to develop a plan to verify that the recipients of Homeowner Assistance Grants in Mississippi and Road Home Grants in Louisiana, funded by HUD Community Development Block Grants, maintain flood insurance on their properties as required as a condition of the grants.
The legislation would create the position of National Flood Insurance Advocate in FEMA. The Advocate would do the following: (1) assist NFIP's insureds with FEMA-related problems, (2) identify areas of contention between NFIP insureds and FEMA, (3) identify measures to mitigate such problems, and (4) help communities and homeowners interpret, implement and appeal floodplain maps. Some Members may be concerned that CBO estimated the cost of the new office would be $23 million in new government spending over five years.
The bill would require several studies including a study, by GAO, designed to increase participation of low-income families in the flood insurance program. CBO estimates the cost of the bills’ studies to be $1 million.
The legislation would authorize the appropriation of $476 million over the 2011-2015 period, and $5 million in 2016. CBO estimates that implementing those provisions would increase spending by about $378 million over the next five years, assuming appropriation of the necessary funds.
The House Democratic Caucus does not provide summaries of bills.
So, yes, we display the House Republican Conference’s summaries when available even if we do not have a Democratic summary available. That’s because we feel it is better to give you as much information as possible, even if we cannot provide every viewpoint.
We’ll be looking for a source of summaries from the other side in the meanwhile.
The bill contains the following citations to other parts of U.S. law:
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