Preventing Environmental Hazards Act of 2025
- Sponsor
- Rep. Murphy, Gregory F. [R-NC-3]
- Committees
- Financial Services Committee (primary)
- Last action
- May 1, 2025
Bottom line
The bill expands federal flood insurance to cover properties at risk of imminent collapse due to shoreline erosion, offering financial aid for demolition or relocation to mitigate losses proactively.
What it actually does
This bill amends the National Flood Insurance Act of 1968 to expand the National Flood Insurance Program (NFIP) to cover structures threatened by shoreline erosion. It provides payments for the proper demolition or relocation of structures deemed unsafe due to imminent collapse or subsidence from erosion, specifying payment percentages, maximum claim limits, and conditions for eligibility, including continuous coverage requirements.
Proponents argue
Supporters argue this bill provides crucial financial relief and a proactive solution for homeowners in coastal and lakeside areas facing increasing threats from erosion, preventing catastrophic losses and promoting responsible land management. They contend it addresses a critical gap in current flood insurance coverage, which often only covers damage after an event, not the imminent threat of collapse.
Opponents contend
Opponents might argue that expanding NFIP coverage to include erosion-threatened properties could significantly increase the program's financial liabilities, potentially exacerbating its existing debt. They may also contend that it could incentivize development in high-risk areas or create moral hazard by socializing the costs of private property risks.
The bill is short and relatively straightforward, allowing for a quick and comprehensive understanding of its provisions.
Section 2(a), amending Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 4013) by adding subsection (e)(1).
Eligibility for Erosion Coverage
This provision makes structures eligible for flood insurance payments if they are located along a shoreline, covered by NFIP, and are condemned or deemed unsafe due to imminent collapse or subsidence from shoreline erosion. It also covers structures determined to be partially or wholly over water, a bluff, escarpment, or below Mean Higher High Water on tidal waterbodies, regardless of whether the erosion is long-term or due to cyclical water levels.
Supporters argue
Supporters argue this is a vital expansion of NFIP, offering a safety net for homeowners whose properties are threatened by erosion, a growing problem exacerbated by climate change. It allows for proactive measures rather than waiting for disaster.
Critics contend
Critics might argue this expands the scope of NFIP beyond traditional flood damage, potentially increasing the program's financial strain and moral hazard by covering risks that could be mitigated by land-use planning or private insurance.
Tradeoffs
Balances the need to protect homeowners from erosion-related losses against concerns about NFIP's financial solvency and the potential for encouraging development in vulnerable areas.
Section 2(a), amending Section 1306(e)(1)(A) and (B).
Payment Structure for Demolition or Relocation
For demolition, 40% of the structure's value is paid upfront, with the remaining 60% (or actual demolition cost, whichever is less) paid after demolition within 6 months and prior to collapse. For relocation, up to 40% of the structure's value is paid prior to collapse, not exceeding the actual relocation cost.
Section 2(a), amending Section 1306(e)(2) and (3).
Consequences of Inaction and Valuation Method
If an owner fails to take reasonable action to demolish or relocate a structure within six months of a final determination, or if the structure collapses or subsides before action, the Administrator will not pay more than the initial 40% demolition payment. The value of the structure for payment purposes is the lowest of the fair market value of a comparable structure, the inflation-adjusted price paid for the structure and improvements, or the value under the flood insurance contract.
Section 2(a), amending Section 1306(e)(4).
Maximum Claim and Exclusion of Contents
The maximum payment under this subsection cannot exceed the lesser of the contract coverage amount or $250,000. This coverage specifically excludes any loss of or damage to the contents of a structure.
Section 2(a), amending Section 1306(e)(5).
Eligibility Based on Existing Coverage
This coverage applies to existing and future flood insurance contracts. However, it does not apply to structures without NFIP coverage on the date of certification under paragraph (1). Furthermore, a structure must have been covered by NFIP for a continuous period of 12 months on or before the enactment date, or for a continuous period of 4 years prior to certification under paragraph (1).
Section 2(a), amending Section 1306(e)(6).
No Subsequent Coverage After Claim
For any structure that receives a final determination for erosion coverage, no subsequent flood insurance coverage under NFIP or assistance under the Disaster Relief Act of 1974 (except emergency life-saving aid) will be available for that same structure or any different structure on the remaining portions of the original parcel of land.
Section 2(a), amending Section 1306(e)(7).
Regulatory Authority and Interim Rules
The Administrator is directed to promulgate regulations and guidelines to implement this subsection. Importantly, prior to the issuance of these regulations regarding State and local certifications, all provisions of this subsection will apply to any structure that otherwise meets the requirements and is imminently threatened by shoreline erosion, regardless of the erosion's cause.
This provision establishes continuous coverage requirements for eligibility, mandating that a structure must have been covered by NFIP for 12 months on or before the enactment date, or for 4 continuous years prior to certification for erosion coverage.
Section 2(a), amending Section 1306(e)(5)(C)
Why it matters:This is standard legislative practice to prevent adverse selection, ensuring that individuals do not purchase insurance only when a loss is imminent. It's a critical programmatic safeguard.
Case for: Proponents argue this prevents opportunistic claims and protects the financial integrity of the NFIP by ensuring that only long-term policyholders, who have contributed to the program, are eligible for this expanded coverage.
Case against: Critics might contend that these requirements could exclude homeowners who recently purchased property in an erosion-prone area or who were unaware of the imminent threat, even if they are now facing catastrophic loss.
Estimated impact: Significantly limits the pool of eligible properties, potentially reducing the overall financial exposure of the NFIP compared to universal eligibility.
This provision states that for any structure receiving erosion coverage, no subsequent flood insurance coverage under NFIP or assistance under the Disaster Relief Act of 1974 (except emergency life-saving aid) shall be available for the same structure, or a different structure on any remaining portions of the original parcel of land.
Section 2(a), amending Section 1306(e)(6)
Why it matters:This is a deliberate policy choice to prevent repetitive losses and encourage permanent retreat from highly vulnerable areas, rather than a tactic to obscure the provision.
Case for: Supporters argue this is essential for the long-term sustainability of the NFIP and for promoting responsible land use by preventing federal funds from being repeatedly spent on properties in persistently hazardous locations.
Case against: Opponents might argue that this provision could effectively render the remaining land parcel undevelopable and unsellable, imposing a significant financial burden on property owners beyond the initial claim and potentially creating 'stranded assets'.
Estimated impact: Has a profound long-term impact on land use planning and property values in areas prone to severe erosion, potentially leading to a gradual retreat from the most vulnerable shorelines.
This clause specifies that prior to the issuance of formal regulations regarding State and local certifications, all provisions of this subsection shall apply to any structure that otherwise meets the requirements and is imminently threatened by shoreline erosion, regardless of whether the erosion is long-term, chronic, or due to cyclical water levels.
Section 2(a), amending Section 1306(e)(7)(B)
Why it matters:This is a standard legislative mechanism to ensure that critical provisions can take effect immediately upon enactment, providing urgent relief, while allowing the administering agency time to develop comprehensive regulations.
Case for: Proponents argue this ensures immediate relief for homeowners facing imminent threats, preventing delays that could lead to catastrophic losses while FEMA develops the necessary administrative framework.
Case against: Some might argue that implementing the provisions without clear, established regulations could lead to inconsistencies, administrative challenges, or confusion for both claimants and local authorities in the initial period.
Estimated impact: Enables immediate implementation of the new erosion coverage, potentially accelerating relief for some homeowners in the short term, but may introduce initial administrative complexities.