Fair Flood Protection Act of 2024

The term Administrator means the Administrator of the Agency.

The term Agency means the Federal Emergency Management Agency.

The term Community Rating System means the community rating system program carried out under section 1315(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4022(b)).

The term National Flood Insurance Program means the program established under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.).

The term small business concern has the meaning given the term in section 3 of the Small Business Act (15 U.S.C. 632).

The term Write Your Own Company means a private property insurance company that participates in the Write Your Own Program.

The term Write Your Own Program means the program under which the Federal Emergency Management Agency enters into a standard arrangement with private property insurance companies to—

(A) sell contracts for Federal flood insurance under their own business lines of insurance; and

(B) adjust and pay claims arising under the contracts described in subparagraph (A).

Section 1309(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)) is amended by striking September 30, 2023 and inserting September 30, 2034.

Section 1319 of the National Flood Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking September 30, 2023 and inserting September 30, 2034.

If this Act is enacted after September 30, 2024, the amendments made by subsections (a) and (b) shall take effect as if enacted on September 30, 2024.

During the 20-year period beginning on the date of enactment of this Act, the Secretary of the Treasury may not charge the Administrator interest on amounts borrowed by the Administrator under section 1309(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)) that were outstanding as of the date of enactment of this Act, including amounts borrowed after the date of enactment of this Act that refinance debts that existed before the date of enactment of this Act.

There shall be deposited into the National Flood Mitigation Fund established under section 1367 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104d) an amount equal to the interest that would have accrued on the borrowed amounts during the 20-year period described in subsection (a) at the time at which those interest payments would have otherwise been paid, which, notwithstanding any provision of such section 1367, the Administrator shall use to carry out the program established under section 1366 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c).

After the 20-year period described in subsection (a), the Secretary of the Treasury shall not require the Administrator to repay any interest that, but for that subsection, would have accrued on the borrowed amounts described in that subsection during that 20-year period.

Congress finds the following:

(1) The Community Rating System, while well-intentioned, has provided discounts to policyholders that are not actuarially justified.

(2) The discounts described in paragraph (1) have furthered the financial insolvency of the National Flood Insurance Program.

(3) With the transition by the Agency towards individualized premiums rather than community-based premiums, the Community Rating System should be phased out.

Section 1315(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4022(b)) is amended by adding at the end the following:

Not earlier than 2 years and not later than 4 years after the date of enactment of this paragraph, the Administrator shall—

(A) terminate the community rating system program established under paragraph (1); and

(B) remove credits from the premium rates for policyholders within participating communities.

Not later than 1 year after the date of enactment of this Act, the Administrator shall—

(1) issue a proposed rule that caps the reimbursement that the Agency pays to Write Your Own Companies—

(A) at not more than 25 percent of the aggregate premiums charged by the Write Your Own Company; and

(B) taking into account—

(i) the impact of the reimbursement rate on the overall solvency of the National Flood Insurance Program; and

(ii) reimbursement rates offered by other Federal agencies for similar insurance programs, including programs offered by the Department of Health and Human Services and the Department of Agriculture; and

(2) issue a proposed rule that caps the amount that Write Your Own Company pays to an agent of the company as a commission for flood insurance premiums sold by the agent.

Not later than 18 months after the date on which the Administrator issues a proposed rule under subsection (a), the Administrator shall issue a final rule for the proposed rule, which shall apply to all flood insurance policies that are written or renewed on or after the date that is 6 months after the date of publication of the final rule.

The Administrator may reassess and modify the caps provided in the final rules issued under subsection (b) through notice and comment rulemaking procedures under section 553 of title 5, United States Code.

It is the sense of Congress that—

(1) it is important to maximize participation in the National Flood Insurance Program;

(2) in order to do so, Congress must ensure that flood insurance is affordable for low-income homeowners, older homeowners on fixed incomes, and working families; and

(3) it is also important that the National Flood Insurance Program continues to align its premiums with actuarially sound rates to provide transparency, increase public understanding of the true costs of flood insurance and flood damage, and promote the long-term financial solvency of the National Flood Insurance Program.

The Administrator shall issue to each policyholder under the National Flood Insurance Program, in writing, an annual premium pricing report with respect to the property of the policyholder, which shall include—

(1) the full, risk-based premium for the property, as identified under the Risk Rating 2.0 model or any subsequent pricing model of the Agency;

(2) the applicable premium for the property, inclusive of subsidies and caps as determined by section 1310A of the National Flood Insurance Act of 1968, as added by section 203 of this Act; and

(3) the anticipated premium for subsequent years following the report, based on the applicable pricing model of the Agency and annual limitations on premium increases established under section 1308(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)).

If a policyholder rents out a property for which coverage is provided through the National Flood Insurance Program to tenants, the policyholder shall provide a copy of the annual premium pricing report for the property to the tenants with the lease for the property.

Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.), as amended by section 301 of this Act, is amended by inserting after section 1310 (42 U.S.C. 4017) the following:

Not later than 1 year after the date of enactment of this section, the Administrator shall establish a program to ensure that policies under the national flood insurance program are affordable by offering subsidized premiums using the formula described in subsection (b).

The program established under subsection (a) shall ensure that policyholders under the national flood insurance program shall not pay a premium that is, as a percentage of their household income, higher than the percentage created by dividing their annual household income by 41,000.

If the premium for flood insurance coverage under the national flood insurance program for a property owned by a policyholder eligible for assistance under subsection (b) is greater than the limit set by subsection (b), the Administrator shall subsidize the premium using funds from the Flood Insurance Affordability Trust Fund established under subsection (d) in the amount equal to the difference between the stated premium and the maximum amount chargeable under subsection (b).

There is established within the Department of the Treasury a fund, which shall be—

(A) known as the Flood Insurance Affordability Trust Fund (in this section referred to as the Fund); and

(B) administered by the Administrator.

If amounts in the Fund are insufficient to cover subsidies required under subsection (b), the Administrator is authorized to draw such sums as may be necessary from the general fund of the Treasury to provide those subsidies.

The Administrator shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Appropriations of the Senate, the Committee on Financial Services of the House of Representatives, and the Committee on Appropriations of the House of Representatives an annual report detailing—

(A) the amount paid out of the Fund during the year preceding the date on which the report is submitted;

(B) the amount in the Fund as of the date of the report;

(C) the amount the Fund drew from the general fund of the Treasury during the year preceding the date on which the report is submitted;

(D) the amount of appropriations that the Administrator estimates the Fund will need for the forthcoming year; and

(E) other information as determined important by the Administrator.

There is authorized to be appropriated into the Fund such sums as are necessary for each fiscal year to provide the subsidies described in subsection (c), as informed by the relevant report submitted under paragraph (3).

Nothing in this section shall be construed to affect the applicability of the cap on the annual premium increase under section 1308(e).

Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amended—

(1) in section 1304(b) (42 U.S.C. 4011(b)), by striking the flush matter following paragraph (4)(D);

(2) in section 1307(a)(1)(B)(iii) (42 U.S.C. 4014(a)(1)(B)(iii)), by striking which shall be recovered by a fee charged to policyholders and such fee shall not be subject to any agents’ commissions, company expense allowances, or State or local premium taxes;

(3) in section 1308(m)(1) (42 U.S.C. 4015(m)(1)), in the matter preceding subparagraph (A), by striking and the surcharges required under section 1308A;

(4) by striking section 1308A (42 U.S.C. 4015a); and

(5) by striking section 1310A (42 U.S.C. 4017A).

The Administrator shall impose and collect a singular annual surcharge, which shall be referred to as the Flood Insurance Program Stability Fee, in the amount provided in subsection (b), on all policies for flood insurance coverage under the National Flood Insurance Program that are newly issued or renewed after May 1, 2025.

The amount of the surcharge under subsection (a) shall be—

(1) except as provided in paragraph (2), 20 percent of the annual premium inclusive of any subsidy provided under section 1310A of the National Flood Insurance Act of 1968, as added by section 203 of this Act; and

(2) 30 percent of the annual post-subsidy premium, in the case of a policy for any property that is—

(A) a non-residential property other than a small business concern; and

(B) a residential property that is not the primary residence of an individual.

Of amounts collected by the Administrator under this section in a given fiscal year—

(1) not less than 50 percent shall be deposited in the National Flood Insurance Fund established under section 1310 of the National Flood Insurance Act of 1968 (42 U.S.C. 4017); and

(2) not less than 30 percent shall be deposited in the Flood Insurance Affordability Trust Fund established under section 1310A of the National Flood Insurance Act of 1968, as added by section 203 of this Act.

Not later than 1 year after the date of enactment of this Act, the Administrator shall establish a program to identify and develop new levees and levee systems.

To carry out the program established under subsection (a), the Administrator shall solicit applications from—

(1) States or political subdivisions of States;

(2) flood protection authorities;

(3) federally recognized Indian Tribes; and

(4) other public entities as determined by the Administrator.

The Administrator shall consider applications for assistance under the program established under subsection (a) using the following criteria:

(1) An estimate of the valuation of property located behind the proposed levee or system of levees.

(2) The history of severe weather and flooding events in the community and any projected changes due to climate change.

(3) The number of people and percentage of the overall population in the community that is participating in the National Flood Insurance Program.

(4) The anticipated cost to construct and operate the levee or system of levees.

(5) Other considerations, as determined by the Administrator.

The Administrator shall provide technical assistance upon request to applicants for the program established under subsection (a), including by helping applicants to access data regarding National Flood Insurance Program coverage in the relevant area.

Upon the selection of applicants for participation in the program established under subsection (a), the Administrator shall—

(1) provide technical assistance for applications submitted to the Agency for funding, including assistance with determining project scope, timeline, cost, and other considerations as determined by the Administrator;

(2) prioritize for funding through the hazard mitigation grant program under section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170c), the Building Resilient Infrastructure and Communities program authorized under section 203 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5133), and the Flood Mitigation Assistance program authorized under section 1366 of the National Flood Insurance Act of 1968 (42 U.S.C. 4104c), applications from selected applicants for planning, engineering, design, or construction work for the levee or system of levees described in the application; and

(3) direct States and political subdivisions of States to prioritize allocating funds from revolving loan funds capitalized by the Safeguarding Tomorrow Revolving Loan Fund, as established to carry out section 205 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5135), for projects for planning, engineering, design, or construction work for levees or systems of levees selected under this section.

In administering the Program, the Administrator shall consult with—

(1) the U.S. Army Corps of Engineers;

(2) emergency management agencies from States with a selected project; and

(3) other stakeholders, as determined by the Administrator.

Section 205(n) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5135) is amended to read as follows:

There are authorized to be appropriated $200,000,000 for each of fiscal years 2025 through 2034 to carry out this section.