42 U.S.C. § 4017 — National Flood Insurance Fund

Page 6032 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 4017 and (b) [amending this section and section 4026 of this title] shall be considered to have taken effect on May 31, 2010.’’ EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–199, div. H, § 136(b), Jan. 23, 2004, 118 Stat. 442, provided that: ‘‘The amendments made by this sec- tion [amending this section and sections 4026, 4056, and 4127 of this title] shall be considered to have taken ef- fect on December 31, 2003.’’ EFFECTIVE DATE OF 2003 AMENDMENTS Pub. L. 108–171, § 2(b), Dec. 6, 2003, 117 Stat. 2064, pro- vided that: ‘‘The amendments made by this section [amending this section and sections 4026, 4056, and 4127 of this title] shall be considered to have taken effect on December 31, 2003.’’ Pub. L. 108–3, § 2(b), Jan. 13, 2003, 117 Stat. 7, provided that: ‘‘The amendments made by this section [amend- ing this section and sections 4026, 4056, and 4127 of this title] shall be considered to have taken effect on De- cember 31, 2002.’’ EFFECTIVE DATE Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see sec- tion 1377 of Pub. L. 90–448, set out as a note under sec- tion 4001 of this title. TRANSFER OF FUNCTIONS For transfer of all functions, personnel, assets, com- ponents, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emer- gency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security. For transfer of functions, personnel, assets, and li- abilities of the Federal Emergency Management Agen- cy, including the functions of the Director of the Fed- eral Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treat- ment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Secu- rity, and the Department of Homeland Security Reor- ganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6. Functions of Housing and Home Finance Agency and head thereof transferred to Secretary of Housing and Urban Development by Pub. L. 89–174, § 5(a), Sept. 9, 1965, 79 Stat. 669, which is classified to section 3534(a) of this title. Section 9(c) of such act, set out as a note under section 3531 of this title, provides that references to Housing and Home Finance Agency or to any agency or officer therein are to be deemed to mean Secretary of Housing and Urban Development and that Housing and Home Finance Agency has lapsed. EXTENSION OF LIMITATION ON FINANCING PROVISIONS Pub. L. 118–47, div. G, title I, § 101(a), Mar. 23, 2024, 138 Stat. 856, provided that: ‘‘Section 1309(a) of the Na- tional Flood Insurance Act of 1968 (42 U.S.C. 4016(a)) shall be applied by substituting ‘September 30, 2024’ for ‘September 30, 2023’.’’ [Pub. L. 118–47, div. G, title I, § 101(c), Mar. 23, 2024, 138 Stat. 856, provided that: ‘‘This section [enacting section 101(a) of div. G of Pub. L. 118–47, set out above, and sec- tion 101(b) of div. G of Pub. L. 118–47, set out as a note under section 4026 of this title] shall take effect as if enacted on September 30, 2023.’’] For nonamendatory provisions extending both the limitation on financing provisions in subsec. (a) of this section and the National Flood Insurance Program gen- erally, see Extension of Program notes under section 4026 of this title. Executive Documents TRANSFER OF FUNCTIONS Functions vested in Secretary of Housing and Urban Development pursuant to this chapter transferred to Director of Federal Emergency Management Agency pursuant to Reorg. Plan No. 3 of 1978, § 202, June 19, 1978, 43 F.R. 41944, 92 Stat. 3788, set out as a note under section 2201 of Title 15, Commerce and Trade, effective Apr. 1, 1979, as provided by Ex. Ord. No. 12127, Mar. 31, 1979, 44 F.R. 19367, set out as a note under section 2201 of Title 15. § 4017. National Flood Insurance Fund (a) Establishment; availability To carry out the flood insurance program au- thorized by this chapter, the Administrator shall establish in the Treasury of the United States a National Flood Insurance Fund (herein- after referred to as the ‘‘fund’’) which shall be an account separate from any other accounts or funds available to the Administrator and shall be available as described in subsection (f), with- out fiscal year limitation (except as otherwise provided in this section)— (1) for making such payments as may, from time to time, be required under section 4054 of this title; (2) to pay reinsurance claims under the ex- cess loss reinsurance coverage provided under section 4055 of this title; (3) to repay to the Secretary of the Treasury such sums as may be borrowed from him (to- gether with interest) in accordance with the authority provided in section 4016 of this title; and (4) to the extent approved in appropriations Acts, to pay any administrative expenses of the flood insurance and floodplain manage- ment programs (including the costs of map- ping activities under section 4101 of this title); (5) for the purposes specified in subsection (d) under the conditions provided therein; (6) for carrying out the program under sec- tion 4022(b) of this title; (7) for transfers to the National Flood Miti- gation Fund, but only to the extent provided in section 4104d(b)(1) of this title; and (8) for carrying out section 4104(f) of this title. (b) Credits to Fund The fund shall be credited with— (1) such funds borrowed in accordance with the authority provided in section 4016 of this title as may from time to time be deposited in the fund; (2) premiums, fees, or other charges which may be paid or collected in connection with the excess loss reinsurance coverage provided under section 4055 of this title; (3) such amounts as may be advanced to the fund from appropriations in order to maintain the fund in an operative condition adequate to meet its liabilities; (4) interest which may be earned on invest- ments of the fund pursuant to subsection (c); (5) such sums as are required to be paid to the Administrator under section 4015(d) of this title; and (6) receipts from any other operations under this chapter (including premiums under the Page 6033 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 4017 conditions specified in subsection (d), and sal- vage proceeds, if any, resulting from reinsur- ance coverage). (c) Investment of moneys in obligations issued or guaranteed by United States If, after— (1) all outstanding obligations of the fund have been liquidated, and (2) any outstanding amounts which may have been advanced to the fund from appro- priations authorized under section 4127(a)(2)(B) of this title have been credited to the appro- priation from which advanced, with interest accrued at the rate prescribed under section 2414(e) of this title, as in effect immediately prior to August 1, 1968, the Administrator determines that the moneys of the fund are in excess of current needs, he may request the investment of such amounts as he deems advisable by the Secretary of the Treasury in obligations issued or guaranteed by the United States. (d) Availability of Fund if operation of program is carried out through facilities of Federal Government In the event the Administrator makes a deter- mination in accordance with the provisions of section 4071 of this title that operation of the flood insurance program, in whole or in part, should be carried out through the facilities of the Federal Government, the fund shall be avail- able for all purposes incident thereto, includ- ing— (1) cost incurred in the adjustment and pay- ment of any claims for losses, and (2) payment of applicable operating costs set forth in the schedules prescribed under section 4018 of this title, for so long as the program is so carried out, and in such event any premiums paid shall be depos- ited by the Administrator to the credit of the fund. (e) Annual budget An annual business-type budget for the fund shall be prepared, transmitted to the Congress, considered, and enacted in the manner pre- scribed by sections 9103 and 9104 of title 31 for wholly-owned Government corporations. (f) Availability of funds dependent on future ap- propriations acts The fund shall be available, with respect to any fiscal year beginning on or after October 1, 1981, only to the extent approved in appropria- tion Acts; except that the fund shall be avail- able for the purpose described in subsection (d)(1) without such approval. (Pub. L. 90–448, title XIII, § 1310, Aug. 1, 1968, 82 Stat. 577; Pub. L. 97–35, title III, § 341(c), Aug. 13, 1981, 95 Stat. 419; Pub. L. 98–181, title I [title IV, § 451(d)(1)], Nov. 30, 1983, 97 Stat. 1229; Pub. L. 98–479, title II, § 203(j)(1), Oct. 17, 1984, 98 Stat. 2231; Pub. L. 100–242, title V, § 545(d), Feb. 5, 1988, 101 Stat. 1942; Pub. L. 101–508, title II, § 2302(e)(3), Nov. 5, 1990, 104 Stat. 1388–24; Pub. L. 103–325, title V, §§ 542, 554(b), 577(h), Sept. 23, 1994, 108 Stat. 2269, 2274, 2283; Pub. L. 108–264, title I, §§ 102(b), 104(b), June 30, 2004, 118 Stat. 721, 723; Pub. L. 112–141, div. F, title II, §§ 100225(d), 100238(b)(1), July 6, 2012, 126 Stat. 941, 958; Pub. L. 113–89, § 18(b), Mar. 21, 2014, 128 Stat. 1027.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a) and (b)(6), was in the original a reference to ‘‘this title’’ meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 4001 of this title and Tables. AMENDMENTS 2014—Subsec. (a)(8). Pub. L. 113–89 added par. (8). 2012—Subsec. (a). Pub. L. 112–141, § 100238(b)(1), sub- stituted ‘‘Administrator’’ for ‘‘Director’’ in two places. Subsec. (a)(6) to (9). Pub. L. 112–141, § 100225(d), in- serted ‘‘and’’ at end of par. (6), substituted period for semicolon at end of par. (7), and struck out pars. (8) and (9) which read as follows: ‘‘(8) for financial assistance under section 4102a of this title to States and communities for taking actions under such section with respect to severe repetitive loss properties, but only to the extent provided in sec- tion 4102a(i) of this title; and ‘‘(9) for funding, not to exceed $10,000,000 in any fiscal year, for mitigation actions under section 4030 of this title, except that, notwithstanding any other provision of this chapter, amounts made available pursuant to this paragraph shall not be subject to offsetting collec- tions through premium rates for flood insurance cov- erage under this chapter.’’ Subsecs. (b)(5), (c), (d). Pub. L. 112–141, § 100238(b)(1), substituted ‘‘Administrator’’ for ‘‘Director’’ wherever appearing. 2004—Subsec. (a)(7), (8). Pub. L. 108–264, § 102(b), struck out ‘‘and’’ at end of par. (7), added par. (8), and struck out former par. (8) which read as follows: ‘‘for costs of preparing the report under section 577 of the Riegle Community Development and Regulatory Improvement Act of 1994, except that the fund shall be available for the purpose under this paragraph in an amount not to exceed an aggregate of $5,000,000 over the 2-year period beginning on September 23, 1994.’’ Subsec. (a)(9). Pub. L. 108–264, § 104(b), added par. (9). 1994—Subsec. (a). Pub. L. 103–325, §§ 554(b)(1), 577(h)(1), in introductory provisions, substituted ‘‘shall’’ for ‘‘is authorized to’’ after ‘‘Director’’, inserted ‘‘an account separate from any other accounts or funds available to the Director and shall be’’ after ‘‘which shall be’’, and inserted ‘‘(except as otherwise provided in this sec- tion)’’ after ‘‘without fiscal year limitation’’. Subsec. (a)(6) to (8). Pub. L. 103–325, §§ 542, 554(b)(2), 577(h)(2), added pars. (6) to (8), respectively. 1990—Subsec. (a)(4). Pub. L. 101–508 amended par. (4) generally. Prior to amendment, par. (4) read as follows: ‘‘to pay such administrative expenses (or portion of such expenses) of carrying out the flood insurance pro- gram as he may deem necessary; and’’. 1988—Subsec. (e). Pub. L. 100–242 substituted ‘‘title 31, United States Code,’’ for ‘‘title 31, United States Code’’, which for purposes of codification was translated as ‘‘title 31’’, requiring no change in text. 1984—Subsec. (e). Pub. L. 98–479 substituted ‘‘sections 9103 and 9104 of title 31’’ for ‘‘law (sections 102, 103, and 104 of the Government Corporations Control Act (31 U.S.C. 847–849))’’. 1983—Subsecs. (a), (b)(5), (c), (d). Pub. L. 98–181 sub- stituted ‘‘Director’’ for ‘‘Secretary’’ wherever appear- ing. 1981—Subsec. (a). Pub. L. 97–35, § 341(c)(1), inserted reference to subsec. (f) of this section. Subsec. (f). Pub. L. 97–35, § 341(c)(2), added subsec. (f). Page 6034 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 4017a Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective Oct. 1, 1981, see section 371 of Pub. L. 97–35, set out as an Effective Date note under section 3701 of Title 12, Banks and Banking. EFFECTIVE DATE Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see sec- tion 1377 of Pub. L. 90–448, set out as a note under sec- tion 4001 of this title. TRANSFER OF FUNCTIONS For transfer of all functions, personnel, assets, com- ponents, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emer- gency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security. For transfer of functions, personnel, assets, and li- abilities of the Federal Emergency Management Agen- cy, including the functions of the Director of the Fed- eral Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treat- ment of related references, see former section 313(1) and sections 551(d), 552(d), and 557 of Title 6, Domestic Secu- rity, and the Department of Homeland Security Reor- ganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6. § 4017a. Reserve Fund (a) Establishment of Reserve Fund In carrying out the flood insurance program authorized by this subchapter, the Adminis- trator shall establish in the Treasury of the United States a National Flood Insurance Re- serve Fund (in this section referred to as the ‘‘Reserve Fund’’) which shall— (1) be an account separate from any other accounts or funds available to the Adminis- trator; and (2) be available for meeting the expected fu- ture obligations of the flood insurance pro- gram, including— (A) the payment of claims; (B) claims adjustment expenses; and (C) the repayment of amounts outstanding under any note or other obligation issued by the Administrator under section 4016(a) of this title. (b) Reserve ratio Subject to the phase-in requirements under subsection (d), the Reserve Fund shall maintain a balance equal to— (1) 1 percent of the sum of the total potential loss exposure of all outstanding flood insur- ance policies in force in the prior fiscal year; or (2) such higher percentage as the Adminis- trator determines to be appropriate, taking into consideration any circumstance that may raise a significant risk of substantial future losses to the Reserve Fund. (c) Maintenance of reserve ratio (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— (A) to maintain the reserve ratio required under subsection (b); and (B) to achieve such reserve ratio, if the ac- tual balance of such reserve is below the amount required under subsection (b). (2) Considerations In exercising the authority granted under paragraph (1), the Administrator shall con- sider— (A) the expected operating expenses of the Reserve Fund; (B) the insurance loss expenditures under the flood insurance program; (C) any investment income generated under the flood insurance program; and (D) any other factor that the Adminis- trator determines appropriate. (3) Limitations (A) Rates In exercising the authority granted under paragraph (1), the Administrator shall be subject to all other provisions of this chap- ter, including any provisions relating to chargeable premium rates or annual in- creases of such rates. (B) Use of additional annual insurance pre- miums Notwithstanding any other provision of law or any agreement entered into by the Administrator, the Administrator shall en- sure that all amounts attributable to the es- tablishment or increase of annual insurance premiums under paragraph (1) are trans- ferred to the Administrator for deposit into the Reserve Fund, to be available for meet- ing the expected future obligations of the flood insurance program as described in sub- section (a)(2). (4) Deposit of premium surcharges The Administrator shall deposit in the Re- serve Fund any surcharges collected pursuant to section 4015a of this title. (d) Phase-in requirements The phase-in requirements under this sub- section are as follows: (1) In general Beginning in fiscal year 2013 and not ending until the fiscal year in which the ratio re- quired 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). (2) Amount satisfied As soon as the ratio required under sub- section (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. (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 Re- serve Fund for that fiscal year an amount