H.R. 2874 would authorize the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA), to enter into and renew flood insurance policies through fiscal year 2022. Under current law, that authority will expire after December 8, 2017.
The legislation also would make a number of changes to the NFIP aimed at improving the financial status of the program and encouraging the growth of a private market for flood insurance. CBO estimates that the changes made by this legislation would increase collections from NFIP policyholders but would reduce the number of property owners who purchase insurance through the NFIP. On net, CBO estimates that the changes made by H.R. 2874 would reduce direct spending by $187 million over the 2018-2027 period. CBO also estimates that enacting H.R. 2874 would increase revenues by about $4 million over the 2018-2027 period.
H.R. 2874 also would authorize FEMA to perform activities related to the flood insurance program, such as making grants for flood mitigation, administering a state affordability program, updating the process for appealing flood map information, implementing an independent actuarial review of the program, operating a flood insurance clearinghouse, and starting a pilot program for offering community-based flood insurance. The cost of some of those activities would be offset by fees paid by policyholders; however, CBO estimates that implementing other provisions would cost $75 million over the 2018-2022 period, subject to the appropriation of the authorized and necessary amounts.
Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
CBO estimates that enacting H.R. 2874 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. 2874 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.