Flood insurance bill clears House

The U.S. House of Representatives passed a bill Tuesday evening that would save property owners in southern Louisiana and across the nation thousands of dollars in flood insurance premiums, preventing what some call a looming disaster for many homeowners and businesses.

The bill has enjoyed rare bipartisan support in Louisiana and in Congress. It now heads to the Senate for a vote amid optimism from some Louisiana lawmakers that senators will pass the House version of the bill and send it President Barack Obama’s desk to be signed into law.

Rep. Bill Cassidy, R-Baton Rouge, said passage of the bill will avert a potential economic disaster where people start walking away from their homes, “all because of unaffordable flood insurance premiums.”

“This is a good policy,” Cassidy said. “This is a victory for almost 500,000 Louisiana families.”

It’s the same view shared by his political rival Mary Landrieu, D-La., who has been touting the bill this week for making affordability a cornerstone of the debate. Cassidy is running to unseat Landrieu in the Nov. 4 election.

Sen. David Vitter, R-La., also weighed in on the House vote Tuesday evening, releasing a statement urging the Senate to quickly take a vote on the bill.

The House voted 306-91 for the Homeowner Flood Insurance Affordability Act, which essentially rolls back flood insurance rate hikes that Congress started phasing in two years ago.

The thinking back then was that Congress should eliminate insurance subsidies for people who own property in flood-prone areas. It was something Congress has been providing certain property owners dating back to the 1960s through the National Flood Insurance Program.

The federal assistance made it affordable for people to move into coastal areas and develop waterfront properties without having to pay the full, and often prohibitive cost, of flood insurance premiums.

The NFIP benefits nearly 500,000 policyholders in Louisiana and more than 5.5 million nationwide. The problem is the program is running an estimated deficit of over $25 billion, some of which is due to payments made after hurricanes Katrina and Rita in 2005.

Members of Congress sought to get the program back on firm financial footing two years ago when they passed the Flood Insurance Reform Act of 2012, better known as the Biggert-Waters Act. Supporters said the federal government needed to end an unsustainable perk given to owners of flood-prone properties.

Opponents made the case that the law was too broad, causing insurance premiums to skyrocket by thousands of dollars overnight.

The rate hikes even affected modest homes built miles away from the water.

Critics also argued that it wreaked havoc on the real estate market, making certain properties virtually unsellable.

Tuesday’s vote is considered a win for opponents of the 2012 law and thousands of coastal residents nationwide.

Rep. Steve Scalise, R-Jefferson, called the vote an “overwhelming victory” that was two years in the making.

“We had to build a coalition and we had to overcome a lot of obstacles,” he said.

Scalise also pushed back against critics who have called the bill anti-conservative.

“It’s not conservative reform to force millions of people who played by the rules to lose their homes,” Scalise said. The previous law “wasn’t workable,” he said.

Late Tuesday, members of Congress began circulating a report from the Congressional Budget Office the federal government’s nonpartisan scorekeeper — showing that the bill would pay for itself over time.

Congress can begin paying down the NFIP debt by charging property owners a $25 fee for primary residents and a $250 fee on businesses and second homes.

One of the most popular provisions in the bill restores the so-called “grandfathered rates.” It means that properties built to a certain standard are protected against future rate increases should the Federal Emergency Management Agency change its flood maps.

The bill would also put an end to steep, year-after-year rate increases by including a rule that says individual policies cannot increase by more than 18 percent a year.

It further states that FEMA, which oversees the federal flood insurance program, “must strive to keep flood insurance policies under one percent of a property’s total coverage,” meaning the federal government shouldn’t charge more than $1,000 a year for a $100,000 flood insurance policy.

The bill goes on to include language requiring that FEMA flood maps are accurate, along with a mechanism that would provide funding to communities that successfully appeal their FEMA flood maps.