An amendment numbered 19 printed in House Report 112-138 to add a reserve fund requirement to the National Flood Insurance Program.

1. Adds SEC. 21. RESERVE FUND on page 57, line 2

   Adds a sectionPrinted page

   Inserted: SEC. 21. RESERVE FUND.

   Inserted: (a) Establishment.--Chapter I of the National Flood Insurance Act of 1968 is amended by inserting after section 1310 (42 U.S.C. 4017) the following new section:

   Inserted: "SEC. 1310A. RESERVE FUND.

   Inserted: "(a) Establishment of Reserve Fund.--In carrying out the flood insurance program authorized by this title, the Administrator shall establish in the Treasury of the United States a National Flood Insurance Reserve Fund (in this section referred to as the 'Reserve Fund') which shall--

   Inserted: "(1) be an account separate from any other accounts or funds available to the Administrator; and

   Inserted: "(2) be available for meeting the expected future obligations of the flood insurance program.

   Inserted: "(b) Reserve Ratio.--Subject to the phase-in requirements under subsection (d), the Reserve Fund shall maintain a balance equal to--

   Inserted: "(1) 1 percent of the sum of the total potential loss exposure of all outstanding flood insurance policies in force in the prior fiscal year; or

   Inserted: "(2) such higher percentage as the Administrator determines to be appropriate, taking into consideration any circumstance that may raise a significant risk of substantial future losses to the Reserve Fund.

   Inserted: "(c) Maintenance of Reserve Ratio.--

   Inserted: "(1) In general.--The Administrator shall have the authority to establish, increase, or decrease the amount of aggregate annual insurance premiums to be collected for any fiscal year necessary--

   Inserted: "(A) to maintain the reserve ratio required under subsection (b); and

   Show 21 more inserted paragraphsShow less

   Inserted: "(B) to achieve such reserve ratio, if the actual balance of such reserve is below the amount required under subsection (b).

   Inserted: "(2) Considerations.--In exercising the authority under paragraph (1), the Administrator shall consider--

   Inserted: "(A) the expected operating expenses of the Reserve Fund;

   Inserted: "(B) the insurance loss expenditures under the flood insurance program;

   Inserted: "(C) any investment income generated under the flood insurance program; and

   Inserted: "(D) any other factor that the Administrator determines appropriate.

   Inserted: "(3) Limitations.--In exercising the authority under paragraph (1), the Administrator shall be subject to all other provisions of this Act, including any provisions relating to chargeable premium rates and annual increases of such rates.

   Inserted: "(d) Phase-in Requirements.--The phase-in requirements under this subsection are as follows:

   Inserted: "(1) In general.--Beginning in fiscal year 2012 and not ending until the fiscal year in which the ratio required under subsection (b) is achieved, in each such fiscal year the Administrator shall place in the Reserve Fund an amount equal to not less than 7.5 percent of the reserve ratio required under subsection (b).

   Inserted: "(2) Amount satisfied.--As soon as the ratio required under subsection (b) is achieved, and except as provided in paragraph (3), the Administrator shall not be required to set aside any amounts for the Reserve Fund.

   Inserted: "(3) Exception.--If at any time after the ratio required under subsection (b) is achieved, the Reserve Fund falls below the required ratio under subsection (b), the Administrator shall place in the Reserve Fund for that fiscal year an amount equal to not less than 7.5 percent of the reserve ratio required under subsection (b).

   Inserted: "(e) Limitation on Reserve Ratio.--In any given fiscal year, if the Administrator determines that the reserve ratio required under subsection (b) cannot be achieved, the Administrator shall submit a report to the Congress that--

   Inserted: "(1) describes and details the specific concerns of the Administrator regarding such consequences;

   Inserted: "(2) demonstrates how such consequences would harm the long-term financial soundness of the flood insurance program; and

   Inserted: "(3) indicates the maximum attainable reserve ratio for that particular fiscal year.

   Inserted: "(f) Availability of Amounts.--The reserve ratio requirements under subsection (b) and the phase-in requirements under subsection (d) shall be subject to the availability of amounts in the National Flood Insurance Fund for transfer under section 1310(a)(10), as provided in section 1310(f).".

   Inserted: (b) Funding.--Subsection (a) of section 1310 of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended--

   Inserted: (1) in paragraph (8), by striking "and" at the end;

   Inserted: (2) in paragraph (9), by striking the period at the end and inserting "; and"; and

   Inserted: (3) by adding at the end the following new paragraph:

   Inserted: "(10) for transfers to the National Flood Insurance Reserve Fund under section 1310A, in accordance with such section.".

   Original wording

   Page 57, after line 2, insert the following new section:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed