H.R. 3161 — Preventing Environmental Hazards Act of 2025

This section establishes flood insurance coverage under the National Flood Insurance Program (NFIP) for proper demolition or relocation of structures along shores of lakes or other bodies of water that are condemned or deemed unsafe for habitation by a state or local authority due to imminent collapse or subsidence from shoreline erosion (including chronic erosion or exceeding cyclical water levels), or determined to be partially or wholly over water, a bluff, escarpment, or below Mean Higher High Water on tidal waterbodies. (1) For demolition, the Federal Emergency Management Agency (FEMA) Administrator pays 40% of the structure's value upon final determination, plus the remaining 60% of the value or actual demolition cost (whichever is less) if completed within six months prior to collapse (including any septic system); for relocation (owner's choice), up to 40% of the value prior to collapse, not exceeding actual cost (including septic system removal). (2) If the structure collapses/subsides or six months elapse without action despite reasonable opportunity, payment is limited to the initial 40%. (3) Structure value is the lowest of (A) fair market value of a comparable non-threatened structure, (B) purchase price plus improvements (inflation-adjusted), or (C) insured value; maximum claim is the lesser of the policy coverage or $250,000, excluding contents. (4) Applies to NFIP policies in effect on or after enactment if the structure was insured for 12 months prior to enactment or continuously for four years prior to certification (but not if uninsured on certification date); terminates future NFIP coverage or non-emergency disaster assistance for the structure or any replacement on the remaining land parcel. (5) Requires FEMA regulations; applies immediately to certified imminently threatened structures pending regulations. (Thus, incentivizes prompt demolition/relocation to access full payments while limiting moral hazard and future federal exposure for high-risk properties.)