The U.S. House of Representatives will move to consider a bill this week, as early as tonight, to revise key components of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters). While the Senate chose to simply delay the reforms by four years, the House bill, H.R. 3370, would essentially eliminate most of them. Key aspects of the latest version of House bill:
- Restores the grandfathering of properties, including when they are resold by the current owner. The measure also rolls back full-risk rates increases for properties that have been resold since the law was passed in mid-2012.
- Caps the annual increase at 18% for any individual policy per year, and sets a minimum annual increase to average 5% across a property class.
- Clarifies that rates for properties newly mapped into special flood hazard areas will get the grandfathered rate for one policy year and then see the standard rate increases.
- Mandates that the FEMA administrator must try to minimize the number of insurance policies that annually cost more than one percent of the value of the property being insured.
- To help pay for the changes, the bill calls for charging every flood policy a surcharge; $25 on residential properties, and of $250 on businesses and second homes. Revenue from the assessments would be placed in the NFIP reserve fund.
- Allows for premiums to be paid in monthly installments.
- Eliminates the mandatory requirement that policyholders buy coverage for detached buildings such as sheds and garages.
- Adds requirements to mapping procedures, including that FEMA must notify each affected community of a new model that will impact their rate and provide a 30 day period for such communities to consult with FEMA regarding the appropriateness of the model.
- FEMA will have 18 months rather than two years to complete the long-awaited affordability study.
- The bill does not repeal the Biggert-Waters provision mandating that those with a second home in a flood zone and those with properties that have repeatedly been flooded will continue to have their premiums increase until they reach actuarial rates.
The House bill as released goes even farther than the Senate bill. The House leadership had originally planned to vote on their bill last week but couldn’t because they lacked the votes necessary in the Republican caucus to pass the legislation. Since then leadership has been in negotiation with House Democrats making numerous edits to the legislation in an effort to secure Democratic votes.
Democratic support will be necessary for the bill to pass, since conservative groups, such as the Club for Growth, have come out firmly against it. The job is made more difficult because the leadership is bringing the bill to a vote through an expedited process called suspension of the rules, which means they will need a two-thirds majority to pass it instead of the usual method of a simple majority.
House Republicans are also being mindful of the need for the Democratic-controlled Senate to pass anything they produce out of the House. This reality is another reason why House leadership has tried to gain Democratic support for any bill they bring to the floor. The Senate passed bill from late January was a nonstarter in the House. Key senators have now indicated their willingness to consider the House modification bill being written now—if it passes the House.