House Financial Services Committee advances NFIP reauthorization and flood mitigation bill
On June 12, the House Financial Services Committee unanimously approved a bill that would reauthorize the National Flood Insurance Program (NFIP) for five years. After an agreement was reached between House Financial Services Committee Chair Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC), final amendments were proposed for the legislation before the committee voted to advance the bill. The bill, H.R. 3167, the National Flood Insurance Program Reauthorization Act of 2019, includes a number of reforms to increase affordability, improve mapping, enhance mitigation, and modernize the NFIP.
What is the National Flood Insurance Program?
The National Flood Insurance Program (NFIP) is a federal program established by the National Flood Insurance Act of 1968 that aims to make flood insurance more affordable and accessible, improve floodplain management, and develop flood risk maps. The NFIP provides insurance to property owners, renters, and businesses, and is run by the Federal Emergency Management Agency (FEMA).
What would this bill do to the NFIP?
1. Provide a long term extension for the NFIP
Since 2017, the NFIP has experienced twelve short-term extensions resulting in two brief lapses of program funding. Currently, the NFIP is set to expire on September 30, 2019. H.R. 3167 would provide long term reauthorization for the program through Sept. 30, 2024.
This bill also would provide financial assistance to low-income NFIP policyholders by creating a five-year program for those earning less than 80% of the median income in their area and would repeal surcharges on policyholders mandated by the Homeowner Flood Insurance Affordability Act of 2014. Under H.R. 3167, policyholders would be able to pay their flood insurance premiums monthly, rather than annually, and FEMA would have the flexibility to offer umbrella policies for commercial properties, including multifamily and agricultural properties. Further, policyholders who left the NFIP would be allowed to return to the program without a penalty, under H.R. 3167.
One area that H.R. 3167 does not address is the NFIP’s $20.5 billion debt. Tackling the program’s debt has been a divisive issue in Congress. Some members, including Chair Waters, have called on Congress to forgive the program’s debt.
2. Establish a flood mitigation revolving loan fund
H.R. 3167 would increase funding for mitigation assistance to communities and NFIP policyholders. In addition, it would establish a flood mitigation assistance revolving loan fund to help homeowners, businesses, nonprofit organizations, and communities reduce their flood risk. FEMA would be authorized to enter into agreements with states to establish the funds. We are excited about this addition, as a flood mitigation revolving loan fund is a positive, proactive step to invest in communities — before disasters strike — and protect taxpayers and homeowners from costly damages and recovery efforts.
The legislation would authorize $200 million/year over a five year period for the pre-disaster hazard mitigation program, establish a new community assistance program for floodplain management, and require that states that receive grant funding through the program develop technical and financial assistance for communities.
3. Update Flood mapping technology and methodology
Under H.R. 3167, the National Flood Mapping Program would be reauthorized at a level of $500 million/year, over the course of five years. In addition, the program would expand flood mapping to all areas of the United States, and direct FEMA to use updated mapping technology. One particular effort of note, would be a new requirement for FEMA to provide communities with financial and technical assistance to incorporate future flood hazard conditions as an informational layer on their Flood Insurance Rate Maps.
In addition, H.R. 3167 would create a pilot program for communities to enhance urban flood mapping and better assess urban flood risk. An amendment added during the Committee’s review would give homeowners and home buyers the ability to know a property’s flood risk, even if they are not an NFIP policyholder.
What happens next?
After passage by the House Financial Services Committee, H.R. 3167 was referred to the House Committee on Transportation and Infrastructure for additional consideration.
As the bill advances in the House, a bipartisan group of Senators has been working on its own framework for comprehensive reforms to the NFIP program. In May, Sens. Robert Menendez (D-NJ), Bill Cassidy (R-La.), John Kennedy (R-La.), Kirsten Gillibrand (D-N.Y.), Marco Rubio (R-Fla.), Sheldon Whitehouse (D-R.I.), Cindy Hyde-Smith (R-Miss.), and Shelley Moore Capito (R-W.Va.) signed a letter supporting structural reforms to the program to address “the affordability of flood insurance premiums for low and middle-income policyholders, fund mitigation, improve flood risk assessment, reform the claims process and bolster NFIP solvency by addressing its unsustainable debt burden.”
While this bill’s passage in the House Financial Services Committee is only one step in the NFIP reauthorization process, it may put us closer to concrete legislation and an end to the uncertainty facing homeowners and countless industries.
As legislative efforts to reauthorize and reform the NFIP advance through Congress, the American Flood Coalition will monitor legislative progress and provide informational updates for our members.
As always, if you have any questions or concerns please do not hesitate to contact us via social media or at info@floodcoalition.org
This post was authored by Victoria Sclafani, Policy Associate.
