H.R. 2246 would eliminate the requirement for commercial properties in flood zones to have flood insurance if the properties are financed by a federally regulated lending institution, or a federal lender. The bill also would require the Federal Emergency Management Agency (FEMA) to acquire coverage for a portion of the National Flood Insurance Program’s (NFIP) potential cost from the private reinsurance or capital markets annually. Finally, H.R. 2246 would require FEMA to permit localities to develop and submit their own maps of local flood risks for FEMA’s review and approval for use in determining NFIP insurance rates.
The cost to enact H.R. 2246 is uncertain and would depend on the number of commercial properties that drop NFIP coverage. CBO estimates that enacting H.R. 2246 would increase direct spending by $325 million over the 2018-2027 period, although costs could be significantly higher or lower. CBO also estimates that implementing the bill would cost $40 million over the 2018-2022 period, assuming appropriation of the necessary amounts.
Because enacting H.R. 2246 would affect direct spending, pay-as-you-go procedures apply. Enacting the legislation would not affect revenues.
CBO estimates that enacting H.R. 2246 would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.
H.R. 2246 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.