Congress begins work to reauthorize National Flood Insurance Program

Flood insurance draft legislation would provide greater investment in flood mitigation and resiliency 

As the National Flood Insurance Program’s (NFIP) current authorization will expire on Sept. 30, 2017, both the House and Senate have begun to circulate draft legislation that would reauthorize the program beyond September.

The NFIP which is managed by the U.S. Department of Homeland Security’s (DHS) Federal Emergency Management Agency (FEMA) is designed to reduce the impact of flooding on private and public structures by providing affordable insurance to property owners, and by encouraging communities to adopt and enforce floodplain management regulations.

In the Senate, Sens. Bill Cassidy (R-La.) and Kirsten Gillibrand (D-N.Y.) have released draft bipartisan legislation that would extend the program’s authorization.  The new legislation titled the Flood Insurance Affordability and Sustainability Act of 2017 would reauthorize the NFIP for a 10-year term from 2017-2027.  The current draft would also promote overall financial solvency of the program by giving FEMA the authority to cede a portion of the flood insurance program’s risk to private insurance markets at rates and on terms that would be determined by FEMA to be reasonable and appropriate.  Ensuring long-term financial solvency has been a key priority in talks to reauthorize the NFIP which is currently over $24 billion in debt.

Important to note for counties, the draft legislation would provide greater investment in flood mitigation and resiliency as the legislation stipulates that FEMA will be required to reallocate funds to better finance pre-disaster mitigation and flood mitigation assistance programs which could yield an approximate $400 million annually for flood mitigation activities.  Also, the draft legislation would reauthorize the National Flood Mapping Program which is the official public source for flood hazard information produced in support of the NFIP.

Important for home owners and county residents, the draft legislation would provide certain low-income residents with vouchers to offset the cost of flood insurance if their premiums and fees result in their housing costs exceeding 40 percent of their household income.  Additionally, the draft legislation would modernize coverage limits to align with actual replacement costs of residential and non-residential structures damaged by floods by increasing coverage limits from $250,000 to $500,000 for residential structures and $500,00 to $1,000,000 for multifamily and businesses structures.

In the House, the Financial Services Committee’s released draft text for six pieces of legislation to reauthorize the NFIP that may be combined into one piece of legislation down the road.

• The first bill would address affordability and consumer costs
• The second bill would address private market development and consumer choice
• The third bill would address reforming the flood mapping process
• The fourth bill would address enhancing the NFIP’s mitigation process
• The fifth bill would address strengthening taxpaying protections
• The sixth and final bill would address NFIP claims processing reforms

In the coming weeks NACo will take a deep dive and do an analysis of each of the bills to help provide insight on the potential impact to counties, and potential changes local governments would like to see prior to the legislation being formally introduced.

As Congress continues to work on legislation to reauthorize the NFIP, NACo will reach out to lawmakers to ensure that the needs of counties and their residents are taken into consideration.