Senate votes to delay flood insurance reforms

The Senate voted 67-32 Thursday to pass a bill that delays flood insurance rate increases.

Passage was expected because several Republicans co-sponsored the bill introduced by Sen. Robert Menendez (D-N.J.). But it’s unclear whether Speaker John Boehner (R-Ohio) will bring the legislation to the floor.

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“In a Congress where it’s hard to come to a consensus on singing 'Happy Birthday' to one of our members, this is a real accomplishment,” Sen. Mary Landrieu (D-La.) said. “But we have work to do. This bill has to go to the House.”

The Homeowner Flood Insurance Affordability Act, S. 1926, delays a required increase in flood insurance premiums for some homes and would allow homeowners to maintain existing flood insurance subsidies even after they are sold. Supporters of the bill say these changes are needed while the government studies whether homeowners can afford these higher costs.

In 2012, Congress passed flood insurance reform, the Biggert-Waters Act, to ensure the bankrupt program regained stability, but some lawmakers have complained that the law was ill-conceived because the new rates are too high for some people to stay in their homes.

S. 1926 would delay language that would immediately eliminate flood insurance subsidies for homes built before 1975 upon the sale of those homes. 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 the agency has said could take three years.

“It makes no sense when we required a study before imposing devastating rates ... to put the rates into effect,” Sen. Charles Schumer (D-N.Y.) said ahead of the vote. “It’s putting the cart before the horse.”

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

Some Republicans complained that the bill wasn’t paid for and said the point of flood insurance reform was to ensure the program regained solvency. After Hurricane Katrina, the National Flood Insurance Program (NFIP) began operating at a $18 billion loss. 

Sen. Richard Shelby (R-Ala.) said Menendez’s bill would “decimate” the flood insurance program by not addressing the lack of funding.

“The program is basically bankrupt and is only operating based on the grace of the American taxpayer,” Shelby said. “The program was not designed to be actuarially sound.”

The conservative Club for Growth urged senators to vote against the bill, saying it would put taxpayers on the hook because the NFIP is bankrupt.

But proponents of the bill argued that now lawmakers have more time to come up with a better way to get the NFIP back in the black.

Seven amendments were added to the bill making minor changes such as exempting natural resource agencies from fees for requesting flood insurance rate changes, and increasing the subsidy trigger for properties that make substantial home improvements.

Schumer said the bipartisan vote and amendment process illustrate the success of a new, more accommodating leadership approach meant to break the Senate's legislative logjam. 

"This is the new trend," Schumer said. "We get on a bill, we allow a reasonable number of amendments. The bills that work best are bills where there is Democratic and Republican support."

Erik Wasson contributed.