(a) Study of risk rating redesign flood insurance premium rating options.—

(1) STUDY.—The Administrator of the Federal Emergency Management Agency shall conduct a study to—

(A) evaluate insurance industry best practices for risk rating and classification, including practices related to replacement cost value in premium rate estimations;

(B) assess options, methods, and strategies for including replacement cost value in the Administrator’s estimates under section 1307(a)(1) of the National Flood Insurance Act of 1968 (42 U.S.C. 4014(a)(1));

(C) provide recommendations for including replacement cost value in the estimate of the risk premium rates for flood insurance under such section 1307(a)(1);

(D) identify an appropriate methodology to incorporate replacement cost value into the Administrator’s estimates under such section 1307(a)(1);

(E) develop a feasible implementation plan and projected timeline for including replacement cost value in the estimates of risk premium rates for flood insurance made available under the National Flood Insurance Program.

(2) REPORT.—

(A) REQUIREMENT.—Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Administrator shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report that contains the results and conclusions of the study required under paragraph (1).

(B) CONTENTS.—The report submitted under subparagraph (A) shall include—

(i) an analysis of the recommendations resulting from the study under paragraph (1) and any potential impacts on the National Flood Insurance Program, including cost considerations;

(ii) a description of any actions taken by the Administrator to implement the study recommendations; and

(iii) a description of any study recommendations that have been deferred or not acted upon, together with a statement explaining the reasons for such deferral or inaction.

(b) Use of replacement cost value in premium rates; implementation.—

(1) ESTIMATED RATES.—Paragraph (1) of section 1307(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4014(a)(1)) is amended, in the matter preceding subparagraph (A), by inserting after “flood insurance” the following: “, which shall incorporate replacement cost value, and”.

(2) CHARGEABLE RATES.—Subsection (b) of section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(b)) is amended, in the matter preceding paragraph (1), by inserting after “Such rates” the following: “shall incorporate replacement cost value and”.

(3) EFFECTIVE DATE.—The amendments under paragraphs (1) and (2) of this subsection shall be made upon the expiration of the 12-month period beginning on the date of the enactment of this Act.

(4) APPLICABILITY AND PHASE-IN.—The Administrator of the Federal Emergency Management Agency shall apply the amendments under paragraphs (1) and (2) to flood insurance coverage made available under the National Flood Insurance Act of 1968 for properties located in various geographic regions in the United States such that—

(A) over the 3-year period beginning upon the expiration of the period referred to in paragraph (3) of this subsection, the requirement under such amendments shall be gradually phased in geographically throughout the United States as sufficient information for such implementation becomes available; and

(B) after the expiration of such 3-year period such amendments shall apply to all flood insurance coverage made available under the National Flood Insurance Act of 1968.