House advances legislation to reauthorize Flood Insurance Program

House Financial Services Committee considered seven bills regarding flood insurance that could be rolled into one 

The House Financial Services Committee completed a markup of legislation June 21 that would reauthorize the National Flood Insurance Program (NFIP), currently set to expire at the end of September.

The committee considered seven bills that may be combined into one legislative package down the road.  The bills considered during the markup included:

• The National Flood Insurance Program Administrative Reform Act of 2017 (H.R. 2875)
• The Repeatedly Flooded Communities Preparation Act (H.R. 1558)
• The Flood Insurance Market Parity and Modernization Act (H.R. 1442)
• A bill to require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act (H.R. 2565)
• The Taxpayer Exposure Mitigation Act of 2017 (H.R. 2246)
• The National Flood Insurance Program Policyholder Protection Act of 2017 (H.R.2868), and
• The 21st Century Flood Reform Act (H.R. 2874)

While some of the proposals considered by the committee were non-controversial, the 21st Century Flood Reform Act (H.R. 2874) includes provisions that would allow the annual limitation on premium increases to bump up from 5 percent to 8 percent for NFIP policy holders.  The additional 3 percent would add a greater burden to low-income policy holders who are struggling to stay in the program, and  could result in some policy holders abandoning the program and decreasing the risk pool.

The bill  would also create a new state affordability surcharge on each policy that is not residential, opening the door for policy surcharges to publicly owned properties including county facilities and businesses that operate within a flood zone.

Currently, House leadership has not set a time for when the full House will vote on the Financial Services Committee package.

In the Senate, there are currently two major proposals that would reauthorize the NFIP: the Sustainable, Affordable, Fair, and Efficient National Flood Insurance Program Reauthorization Act of 2017 (S. 1386) also known as the SAFE NFIP Reauthorization Act, and the Flood Insurance Affordability and Sustainability Act of 2017 (S. 1313).

The Flood Insurance Affordability and Sustainability Act was introduced by Sens. Kirsten Gillibrand (D-N.Y.) and Bill Cassidy (R-La.).  This bill would reauthorize the NFIP over a 10-year term from 2017–2027, helping to limit uncertainty in both the insurance and housing markets.

This bill would also reallocate existing surcharges under the NFIP to better finance pre-disaster mitigation and FEMA’s flood mitigation assistance programs.  Additionally, this bill would provide affordability vouchers to offset the cost of flood insurance premiums and fees that would result in housing costs exceeding 40 percent of an individual’s household income.

The other Senate bill, the SAFE NFIP Act, would reauthorize the NFIP for six years and help the program, which is currently over $24 billion in debt, by freezing interest payments on the debt that the NFIP is accruing, and provide low-interest loans for homeowner mitigation projects.

This bill would also provide additional funding to current mitigation assistance grant programs, which are estimated to have a 4:1 ratio of return on investment.

Finally, the SAFE NFIP Act would authorize funding for LIDAR mapping technology which is one of the most accurate ways to map flood risk.