On the one year anniversary of Superstorm Sandy, U.S. Senators Robert Menendez (D-NJ) and Johnny Isakson (R-GA) today led a bipartisan coalition of members to introduce the Homeowner Flood Insurance Affordability Act which will protect millions of homeowners from facing huge flood insurance premium rate hikes and require FEMA to complete an affordability study and propose real solutions to address affordability issues before any flood insurance premiums can be raised in the future.  

The bill is co-sponsored by Senators Mary Landrieu (D-AR), David Vitter (R-LA), Chuck Schumer (D-NY), Jeff Merkley (D-OR), John Hoeven (R-ND), Al Franken (D-MN), Heidi Heitkamp (D-ND) and Ed Markey (D-MA).  Congresswoman Maxine Waters, along with Congressmen Michael Grimm, Cedric Richmond and 34 others are introducing a companion bill in the House of Representatives.

The Menendez-Isakson “Homeowner Flood Insurance Affordability Act” will:

SECTION 1. DELAYED IMPLEMENTATION OF FLOOD
INSURANCE RATE INCREASES

Delays the implementation of rate increases on the following three types of properties
until FEMA meets two requirements: 1) completes the affordability study mandated by Biggert-Waters Flood Insurance Reform Act of 2012, proposes a draft affordability framework for Congressional review, and Congress has a chance to give FEMA affordability authority; and 2) the FEMA Administrator certifies that the agency has implemented a flood mapping approach that utilizes sound scientific and engineering methodologies to determine varying levels of flood risk in all areas participating in the National Flood Insurance Program:

1. All homes and businesses that are currently “grandfathered.” These are properties that were built to code and later remapped into a higher risk area.  Prior to Biggert-Waters, these policyholders were not penalized for relying on inaccurate FEMA flood maps.
2. All properties that purchased a new policy after July 6, 2012, before they were
   legally required to purchase insurance.
3. All properties sold after July 6, 2012. New homeowners and business owners
   will continue to receive the same treatment as the previous owner unless they
   trigger another provision in Biggert-Waters such as Severe Repetitive Loss,   non-primary residence, substantial damage, etc.

The measure requires FEMA to propose a draft regulatory framework to address any
affordability issues identified by the study within 18 months after the completion of the study and establishes a six month period thereafter to provide for Congressional review. The House and Senate would then hold up or down votes through a privileged motion on giving FEMA the authority to promulgate affordability regulations. If Congress approves this authority, the targeted freeze set forth by this bill would continue until regulations are finalized. If not, the freezes would be lifted absent other Congressional action.

SECTION 2. AFFORDABILITY STUDY FUNDING

Section 100236 of Biggert-Waters required FEMA to produce a study that considered the effects the Bill will have on affordability. Strikes the arbitrary dollar amount on the affordability study to ensure FEMA has the funding required to complete it within two years of the date of enactment.

SECTION 3. FUNDS TO REIMBURSE HOMEOWNERS FOR
SUCCESSFUL MAP APPEALS

Allows FEMA to utilize the National Flood Insurance Fund (NFIF) to reimburse
policyholders who successfully appeal a map determination. FEMA currently has the authority to reimburse homeowners for successful appeals of map findings, but Congress has never appropriated funding for this purpose. Making appeal reimbursement an eligible expense of the NFIF would give FEMA the incentive to “get it right the first time” and repay homeowners for contributing to the flood risk body of knowledge. Unsuccessful appeals would not be reimbursed in any way.

SECTION 4. ELIMINATE PENALTY ON COMMUNITIES
SELF-FINANCING FLOOD PROTECTION

FEMA’s AR and A99 flood zone categories provide more affordable flood insurance to
qualifying communities that are in the process of levee construction, reconstruction, and improvements. Current regulations require a certain level of federal participation to qualify for either an A99 or an AR designation, and therefore prevent FEMA from giving communities fair credit for improvements made to existing flood control systems. Proactive communities that invest in mitigation should not be penalized for
self-financing flood protection projects. 

SECTION 5. TREATMENT OF BASEMENT AREAS WHEN
CALCULATING BASE FLOOD ELEVATIONS

Preserves the pre-Biggert-Waters basement exception allowing the lowest flood-proofed
opening in a home to be used for determining flood insurance rates. This affects 54 communities nation-wide where basements are necessary to protect homeowners and businesses from extreme weather. Basements that have not been flood-proofed would remain subject to the effects of Biggert-Waters.

SECTION 6. DESIGNATION OF FLOOD INSURANCE RATE MAP ADVOCATE

Establishes a Flood Insurance Rate Map Advocate within FEMA to answer current and
prospective policyholder questions about the flood mapping process. The Rate Map Advocate will be responsible for educating policyholders about their individual flood risks, their options in choosing a policy, assisting property owners through the map appeals process, and improve outreach and coordination with local officials, community leaders, and Congress.

Homeowners with mortgages living in flood zones are required to have flood insurance,
which for about 20 percent of properties has traditionally been subsidized or grandfathered at a lower rate by the National Flood Insurance Program (NFIP).
Before Superstorm Sandy struck, a federal flood insurance reform bill, the Biggert-Waters Act, was passed as part of a larger legislative package. The Biggert-Waters Act was aimed at reducing, or phasing out, the federal NFIP subsidy at up to 25 percent a year, which would dramatically increase premiums for homeowners and businesses.

What Members are saying:  

Sen. Robert Menendez (D-NJ) said:

“As we continue to recover from the worst natural disaster in our state’s history, a
manmade disaster is looming, jeopardizing that recovery. The combination of new flood maps and phase out of premium subsidies for the National Flood Insurance Program threatens to force victims out of their homes and to destroy entire communities. Many homeowners will have to pay premiums they simply cannot afford, forcing them to either sell or abandon their homes. These are hardworking middle class families, who played by the rules, purchased flood insurance responsibly, and are now being priced out of their own home. We must stop this manmade disaster from doing more damage, take a time-out and assess the impact these premium hikes will have on homeowners and the communities they live in.” 

Sen.Johnny Isakson (R-GA) said:

“I’m proud to join my colleagues in a bipartisan effort today to protect Americans
from sudden, steep increases in their annual flood insurance premiums as a result of the Biggert-Waters law. Without action, many homeowners in costal and flood plain areas in Georgia and elsewhere will experience unaffordable premiums that will cause some owners to lose their homes. Also, this law has the unintended consequence of causing the value of homes for sale in these areas to drop. I’m pleased that our bill also requires the Federal Emergency Management Agency to complete an affordability study using the latest technology to ensure that flood insurance is affordable for homeowners and the program is self-sustainable going forward.”