Senate begins considering delays to flood insurance reform

The Senate voted 86-13 Monday to procedurally advance a bill that would delay provisions of flood insurance reform.

By voting to end debate on a motion to proceed to S. 1926, the Senate will likely spend the rest of the week debating the bill from Sen. Bob Menendez (D-N.J.).

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The latest version of the Homeowner Flood Insurance Affordability Act amends parts of a 2012 flood insurance reform law — known as the Biggert-Waters Flood Insurance Reform Act — that aimed to make the National Flood Insurance Program (NFIP) financially viable after Hurricane Katrina bankrupted the program. 

Ahead of the vote, Menendez said Biggert-Waters forced “changes that are far too large and far too fast.”

When filing the cloture motion before last week’s recess, Senate Majority Leader Harry Reid (D-Nev.) said both parties had agreed to allow the consideration of up to 10 amendments.

“I hope the Senate can wrap up work on this measure quickly,” Reid said on the Senate floor Monday. “Homeowners deserve certainty, and the Senate faces a substantial workload over the next three weeks.”

With nine Republican cosponsors, the legislation is expected to pass in the Senate, but it’s unclear if Speaker John Boehner (R-Ohio) will allow a vote in the House.

“This is an important debate not only for coastal states but for all states,” Sen. Johnny Isakson (R-Ga.) said. He is a lead cosponsor of the bipartisan legislation.

In order to make up an $18 billion loss in the NFIP, Biggert-Waters required the government to stop providing insurance discounts to homeowners and businesses. It phases out subsidies given to homes built before 1975, before federal flood maps were developed to assign flood risks, and to homes built to code that have fallen out of compliance due to updated flood mapping.

But those supporting Menendez’s bill have argued that the flood insurance rate increases have created unintended consequences. Sen. Mary Landrieu (D-La.) said despite the “good intentions” of Biggert-Waters, that law was “built backwards and upside-down.”

S. 1926 would delay language that would immediately eliminate flood insurance subsidies for homes built before 1975 upon the sale of those homes. Some have argued that Biggert-Waters has made it more difficult to sell homes, because prospective buyers know they will not get the same flood insurance subsidy.

The bill would delay this trigger until the Federal Emergency Management Agency (FEMA) does an affordability study. FEMA would also have to certify that its flood maps are accurate — a process that FEMA has said could take three years.

Menendez’s bill would also grandfather low rates for people who are put into a flood zone for the first time, or are put into a higher-risk flood zone. The 2012 law required these people to pay the higher rate, which would be phased in over five years.

Earlier this month, President Obama signed into law an omnibus spending bill that delayed the phase-out of the grandfathered rates until October. But that change was seen as minimal, as FEMA was not expected to implement that change until October at the earliest.