In the nature of a substitute.

1. Replaces the bill's text with a full substitute

   Replaces the full textEverything after the enacting clause

   In H.R. 5740 · Placed on Calendar Senate

   Struck: SECTION 1. SHORT TITLE.

   [struck: This Act may be cited as the "National Flood Insurance Program Extension Act"][inserted: SECTION 1. EXTENSION OF THE NATIONAL FLOOD INSURANCE PROGRAM].

   Struck: SEC. 2. EXTENSION OF PROGRAM.

   (a) [struck: In General][inserted: Program Extension].--Section 1319 of the National Flood Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking "the earlier of the date of the enactment into law of an Act that specifically amends the date specified in this section or May 31, 2012" and inserting "[struck: June 30][inserted: July 31], 2012".

   (b) Financing.--Section 1309(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)) is amended by striking "the earlier of the date of the enactment into law of an Act that specifically amends the date specified in this section or May 31, 2012" and inserting "[struck: June 30][inserted: July 31], 2012".

   Struck: SEC. 3. USE OF PRIVATE INSURANCE TO SATISFY MANDATORY PURCHASE REQUIREMENT.

   Struck: Section 102(b) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(b)) is amended--

   Struck: (1) in paragraph (1)--

   Struck: (A) by striking "lending institutions not to make" and inserting "lending institutions--

   Show 45 more struck paragraphsShow less

   Struck: "(A) not to make";

   Struck: (B) in subparagraph (A), as designated by subparagraph (A) of this paragraph, by striking "less." and inserting "less; and"; and

   Struck: (C) by adding at the end the following new subparagraph:

   Struck: "(B) to accept private flood insurance as satisfaction of the flood insurance coverage requirement under subparagraph (A) if the coverage provided by such private flood insurance meets the requirements for coverage under such subparagraph.";

   Struck: (2) in paragraph (2), by inserting after "provided in paragraph (1)." the following new sentence: "Each Federal agency lender shall accept private flood insurance as satisfaction of the flood insurance coverage requirement under the preceding sentence if the flood insurance coverage provided by such private flood insurance meets the requirements for coverage under such sentence.";

   Struck: (3) in paragraph (3), in the matter following subparagraph (B), by adding at the end the following new sentence: "The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall accept private flood insurance as satisfaction of the flood insurance coverage requirement under the preceding sentence if the flood insurance coverage provided by such private flood insurance meets the requirements for coverage under such sentence."; and

   Struck: (4) by adding at the end the following new paragraph:

   Struck: "(5) Private flood insurance defined.--In this subsection, the term 'private flood insurance' means a contract for flood insurance coverage allowed for sale under the laws of any State.".

   Struck: SEC. 4. PRIVATIZATION INITIATIVES.

   Struck: (a) FEMA and GAO Reports.--Not later than the expiration of the 18- month period beginning on the date of the enactment of this Act, the Administrator of the Federal Emergency Management Agency and the Comptroller General of the United States shall each conduct a separate study to assess a broad range of options, methods, and strategies for privatizing the national flood insurance program and shall each submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with recommendations for the best manner to accomplish such privatization.

   Struck: (b) Private Risk-Management Initiatives.--

   Struck: (1) Authority.--The Administrator of the Federal Emergency Management Agency may carry out such private risk-management initiatives under the national flood insurance program as the Administrator considers appropriate to determine the capacity of private insurers, reinsurers, and financial markets to assist communities, on a voluntary basis only, in managing the full range of financial risks associated with flooding.

   Struck: (2) Assessment.--Not later than the expiration of the 12- month period beginning on the date of the enactment of this Act, the Administrator shall assess the capacity of the private reinsurance, capital, and financial markets by seeking proposals to assume a portion of the program's insurance risk and submit to the Congress a report describing the response to such request for proposals and the results of such assessment.

   Struck: (3) Protocol for release of data.--The Administrator shall develop a protocol to provide for the release of data sufficient to conduct the assessment required under paragraph (2).

   Struck: (c) Reinsurance.--The National Flood Insurance Act of 1968 is amended--

   Struck: (1) in section 1331(a)(2) (42 U.S.C. 4051(a)(2)), by inserting ", including as reinsurance of insurance coverage provided by the flood insurance program" before ", on such terms";

   Struck: (2) in section 1332(c)(2) (42 U.S.C. 4052(c)(2)), by inserting "or reinsurance" after "flood insurance coverage";

   Struck: (3) in section 1335(a) (42 U.S.C. 4055(a))--

   Struck: (A) by inserting "(1)" after "(a)"; and

   Struck: (B) by adding at the end the following new paragraph:

   Struck: "(2) The Director is authorized to secure reinsurance coverage of coverage provided by the flood insurance program from private market insurance, reinsurance, and capital market sources at rates and on terms determined by the Director to be reasonable and appropriate in an amount sufficient to maintain the ability of the program to pay claims and that minimizes the likelihood that the program will utilize the borrowing authority provided under section 1309.";

   Struck: (4) in section 1346(a) (12 U.S.C. 4082(a))--

   Struck: (A) in the matter preceding paragraph (1), by inserting ", or for purposes of securing reinsurance of insurance coverage provided by the program," before "of any or all of";

   Struck: (B) in paragraph (1)--

   Struck: (i) by striking "estimating" and inserting "Estimating"; and

   Struck: (ii) by striking the semicolon at the end and inserting a period;

   Struck: (C) in paragraph (2)--

   Struck: (i) by striking "receiving" and inserting "Receiving"; and

   Struck: (ii) by striking the semicolon at the end and inserting a period;

   Struck: (D) in paragraph (3)--

   Struck: (i) by striking "making" and inserting "Making"; and

   Struck: (ii) by striking "; and" and inserting a period;

   Struck: (E) in paragraph (4)--

   Struck: (i) by striking "otherwise" and inserting "Otherwise"; and

   Struck: (ii) by redesignating such paragraph as paragraph (5); and

   Struck: (F) by inserting after paragraph (3) the following new paragraph:

   Struck: "(4) Placing reinsurance coverage on insurance provided by such program."; and

   Struck: (5) in section 1370(a)(3) (42 U.S.C. 4121(a)(3)), by inserting before the semicolon at the end the following: ", is subject to the reporting requirements of the Securities Exchange Act of 1934, pursuant to section 13(a) or 15(d) of such Act (15 U.S.C. 78m(a), 78o(d)), or is authorized by the Director to assume reinsurance on risks insured by the flood insurance program".

   Struck: (d) Assessment of Claims-Paying Ability.--

   Struck: (1) Assessment.--Not later than September 30 of each year, the Administrator of the Federal Emergency Management Agency shall conduct an assessment of the claims-paying ability of the national flood insurance program, including the program's utilization of private sector reinsurance and reinsurance equivalents, with and without reliance on borrowing authority under section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016). In conducting the assessment, the Administrator shall take into consideration regional concentrations of coverage written by the program, peak flood zones, and relevant mitigation measures.

   Struck: (2) Report.--The Administrator shall submit a report to the Congress of the results of each such assessment, and make such report available to the public, not later than 30 days after completion of the assessment.

   Struck: SEC. 5. STUDIES OF VOLUNTARY COMMUNITY-BASED FLOOD INSURANCE OPTIONS.

   Struck: (a) Studies.--The Administrator of the Federal Emergency Management Agency and the Comptroller General of the United States shall each conduct a separate study to assess options, methods, and strategies for offering voluntary community-based flood insurance policy options and incorporating such options into the national flood insurance program. Such studies shall take into consideration and analyze how the policy options would affect communities having varying economic bases, geographic locations, flood hazard characteristics or classifications, and flood management approaches.

   Struck: (b) Reports.--Not later than the expiration of the 18-month period beginning on the date of the enactment of this Act, the Administrator of the Federal Emergency Management Agency and the Comptroller General of the United States shall each submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the results and conclusions of the study such agency conducted under subsection (a), and each such report shall include recommendations for the best manner to incorporate voluntary community-based flood insurance options into the national flood insurance program and for a strategy to implement such options that would encourage communities to undertake flood mitigation activities.

   Struck: Passed the House of Representatives May 17, 2012.

   Inserted: SEC. 2. EXCLUSION OF VACATION HOMES AND SECOND HOMES FROM RECEIVING SUBSIDIZED PREMIUM RATES.

   Inserted: (a) In General.--Section 1307(a)(2) of the National Flood Insurance Act of 1968 (42 U.S.C. 4014(a)(2)) is amended by inserting before "; and" the following: ", except that the Administrator shall not estimate rates under this paragraph for any residential property which is not the primary residence of an individual".

   Inserted: (b) Phase-out of Subsidized Premium Rates.--Section 1308(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)) is amended--

   Inserted: (1) by striking "under this title for any properties within any single" and inserting the following: "under this title for--

   Inserted: "(1) any properties within any single"; and

   Inserted: (2) by striking the period at the end and inserting the following: "; and

   Inserted: "(2) any residential properties which are not the primary residence of an individual, as described in section 1307(a)(2), shall be increased by 25 percent each year, until the average risk premium rate for such properties is equal to the average of the risk premium rates for properties described under paragraph (1).".

   Inserted: (c) Effective Date.--The first increase in chargeable risk premium rates for residential properties which are not the primary residence of an individual under section 1308(e)(2) of the National Flood Insurance Act of 1968, as added by this Act, shall take effect on July 1, 2012, and the chargeable risk premium rates for such properties shall be increased by 25 percent each year thereafter, as provided in such section 1308(e)(2).

   Inserted: SEC. 3. COMPLIANCE WITH PAYGO.

   Inserted: The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled "Budgetary Effects of PAYGO Legislation" for this Act, submitted for printing in the Congressional Record by the Chairman of the Senate Budget Committee, provided that such statement has been submitted prior to the vote on passage.

   Original wording

   Strike all after the enacting clause and insert the following:

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As printed