The U.S. Senate is expected to take a key vote soon on a bill that would delay some of the flood insurance rate hikes triggered by the Biggert-Waters Flood Insurance Reform Act of 2012.
The procedural vote will determine whether the Senate will proceed with debate on the Homeowner Flood Insurance Affordability Act (S.1846). Sixty votes are required to move the measure to the floor for a “yes-no” vote.
The procedural vote on S.1846 was originally planned for Wednesday, but the Senate is still dealing with an extension of federal unemployment benefits, delaying consideration of the flood bill. U.S. Sen. Mary Landrieu (D-La.), a major advocate for the bill, told USA Today that “next week is more realistic” for any vote on the flood bill. She Senate Majority Leader Harry Reid has vowed to get the bill to the floor for a vote.
The office of Sen. Bill Nelson, D-Fla., another supporter of the legislation, told Insurance Journal that he expects flood insurance to be next on the Senate calendar, “hopefully” next week after the unemployment insurance benefits issue is finished.
The Senate bill would postpone for four years some of the rate hikes that are beginning to hit primary residences. It would also delay increases for properties sold after July 6, 2012, the start date of the Biggert-Waters act.
The Biggert-Waters act is an attempt to make flood insurance pricing more cost-based by eliminating premium subsidies that some property owners have enjoyed for decades.
The Senate bill would delay premium increases for four years, or six months after the Federal Emergency Management Agency (FEMA) proposes policy changes and regulations to address affordability issues, which the Congressional Budget Office (CBO) estimates would occur during calendar year 2018.
The Senate bill would not block rate increases for most business properties, secondary homes or repeat flood properties. Rates on those properties are scheduled to increase by 25 percent per year until they reach full cost.
The CBO estimates that the change in premium rates proposed by S. 1846 would reduce net income to the National Flood Insurance Program (NFIP) by about $2.1 billion over the 2014-2024 period. The NFIP is already $24 billion in debt, which FEMA Director Craig Fugate reminded Congress when urging members of the House Financial Services Committee not to delay the increases.
CBO estimates that the NFIP would borrow and spend an additional $900 million over the 2014-2018 period because of this legislation. However, because total borrowing is limited under current law to $34 billion, additional amounts borrowed over the next five years would be offset by less borrowing in later years, resulting in no net effect through 2024, according to CBO.
The Senate bill is sponsored by Sen. Robert Menendez, D-N.J., has 20 Democratic and 8 Republican co-sponsors.
A group of senators, many from from coastal states, held a press conference yesterday to rally support for the bill.
Members of SmarterSafer.org – a coalition of tax, business and environmental organizations opposed to delaying Biggert-Waters – is hosting a conference call today to urge Congress to vote no on S. 1846. The National Association of Mutual Insurance Companies and the R Street Institute are participating.
The House has a similar but limited proposal that would delay rate increases for only six months. Sponsored by Rep. Michael Grimm, R-N.Y, this bill (HR 3370) has 117 Democratic and 51 Republican co-sponsors but faces opposition from key Republicans including Rep. Jeb Hensarling (R-Texas), who chairs the House Financial Services Committee that has jurisdiction over flood insurance.
Among those now calling for a delay is an original sponsor of the reform law, Rep. Maxine Waters, D-Calif.
In addition to Sen. Menendez, the senators co-sponsoring the Senate bill are:
- Begich, Mark [D-AK]
- Blumenthal, Richard [D-CT]
- Booker, Cory [D-NJ]
- Casey, Robert [D-PA]
- Cochran, Thad [R-MS]
- Franken, Alan [D-MN]
- Gillibrand, Kirsten [D-NY]
- Graham, Lindsey [R-SC]
- Hagan, Kay [D-NC]
- Heitkamp, Heidi [D-ND]
- Hoeven, John [R-ND]
- Isakson, John [R-GA]
- Klobuchar, Amy [D-MN]
- Landrieu, Mary [D-LA]
- Manchin, Joe [D-WV]
- Markey, Edward [D-MA]
- Merkley, Jeff [D-OR]
- Murkowski, Lisa [R-AK]
- Nelson, Bill [D-FL]
- Reed, John [D-RI]
- Schatz, Brian [D-HI]
- Schumer, Charles [D-NY]
- Scott, Tim [R-SC]
- Vitter, David [R-LA]
- Warren, Elizabeth [D-MA]
- Whitehouse, Sheldon [D-RI]
- Wicker, Roger [R-MS]
- Wyden, Ron [D-OR]