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1 1 (January 14, 2019)

handle is hein.crs/govygb0001 and id is 1 raw text is: Congressional Research Service National Flood Insurance Program Borrowing Authority Updated January 14, 2019 This Insight evaluates the National Flood Insurance Program (NFIP) borrowing authority to receive loans from the U.S. Department of the Treasury and discusses the current financial situation of the NFIP. NFIP Funding Funding for the NFIP is primarily maintained in an authorized account called the National Flood Insurance Fund (NFIF). Generally, the NFIP has been funded from receipts from the premiums of flood insurance policies, including fees and surcharges; direct annual appropriations for specific costs of the NFIP (currently only flood mapping); and borrowing from the Treasury when the balance of the NFIF has been insufficient to pay the NFIP's obligations (e.g., insurance claims). Key provisions of the NFIP were extended from September 30 until December 8, 2017 (Section 130 of P.L. 115-56), extended again until December 22, 2017 (P.L. 115-90), and again until January 19, 2018 (P.L. 115-96). The NFIP lapsed between January 20 and January 22, 2018, and received a fourth short-term reauthorization until February 8, 2018 (P.L. 115-120). The NFIP lapsed again for approximately eight hours during a brief government shutdown in the early morning of February 9, 2018, and was then reauthorized until March 23, 2018 (P.L. 115-123). The NFIP received a sixth reauthorization until July 31, 2018 (P.L. 115-141), a seventh until November 30, 2018 (P.L. 115-225), an eighth until December 7, 2018 (P.L. 115-281), a ninth until December 21, 2018 (P.L. 115-298), and a tenth reauthorization until May 31, 2019 (P.L. 115-396). However, these extensions did not increase the NFIP's borrowing limit or provide additional funds to the NFIP NFIP Borrowing Authority The NFIP was not designed to retain funding to cover claims for truly extreme events; instead, the National Flood Insurance Act of 1968 allows the program to borrow money from the Treasury for such events. For most of the NFIP's history, the program has generally been able to cover its costs, borrowing relatively small amounts from the Treasury to pay claims, and then repaying the loans with interest. Table 1 and Table 2 show NFIP borrowing, repayments, and debt from 1981 to 2018. Comparable figures are not available before 1980. When the NFIP was first established, the borrowing limit was $250 million. In 1973, the borrowing limit was increased to $500 million, or $1 billion with the approval of the President. The borrowing limit was increased to $1.5 billion in 1996; however, borrowing at that level was not required prior to 2005. The largest debt was $917 million in 1997, which was reduced to zero by the end of FY2003. However, Congress increased the level of borrowing to pay claims in the aftermath of the 2005 hurricane season (particularly Hurricanes Katrina, Rita, and Wilma). Congress increased the borrowing limit to $18.5 billion in November 2005, and further increased the borrowing limit to $20.775 billion in March 2006. In July 2010, the borrowing limit was decreased to $20.725 billion. In 2013, following Hurricane Sandy, Congress increased the borrowing limit to the current $30.425 billion. The Congressional Research Service https://crsreports.congress.gov IN10784 1

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