The House of Representatives late Tuesday passed a five-year extension of the National Flood Insurance Program by a 406-22 vote that attempts to make the NFIP more actuarially sound.
Supporters of the bill (H.R. 1309) hope the Senate will act quickly on a NFIP extension to provide certainty to the housing market, parts of which have been impacted by flooding by the Mississippi River this year.
Last year, a congressional fight over budget bills resulted in multiple short-term extensions and several lapses in the issuance of new flood insurance policies.
“This reform bill protects taxpayers by eliminating Federal subsidies and reducing the program’s need to borrow additional funds from the Treasury," according to Financial Services Committee chairman Spencer Bachus, R-Ala. "It also helps bring certainty to the housing market by ensuring potential home buyers can obtain flood insurance they need to get financing to purchase their home.”
Under the House bill, flood insurance premiums could be hiked by 10% to 20% a year until they reach actuarially sound levels.
The bill also provides for a phase-in of premiums for homeowners in communities that are in newly designated flood areas.
Meanwhile, Senate Banking Committee chairman Tim Johnson, D-S.D., is working with Rep. Richard Shelby, R-Ala., and other committee members on a NFIP reauthorization bill. “The Chairman's goal is to hold a markup before the August district work period," a committee spokesman said.
