Policy

Lawmakers Scramble to Extend Flood Insurance Before Hurricane Season Peaks

Unless they act by July 31, parts of the program will lapse

Rep. Ed Royce, shown here in May, introduced a bill Tuesday with Earl Blumenauer that would extend flood insurance coverage for four additional months. (Bill Clark/CQ Roll Call file photo)

The House, facing a July 31 deadline to reauthorize the National Flood Insurance Program, is considering legislation to extend it through Nov. 30 as the House and Senate try to resolve big differences in their proposals for the program.

Reps. Ed Royce, a California Republican, and Earl Blumenauer, an Oregon Democrat, introduced a bill Tuesday that would extend flood insurance coverage for the program’s 5 million policyholders for four additional months.

The House passed a five-year reauthorization bill in November that members of both chambers say has no chance of passage in the Senate. The Senate Banking, Housing and Urban Affairs Committee hasn’t considered stand-alone flood insurance program bills this Congress.

Complicating the debate over a long-term reauthorization are disagreements over premium increases, means-tested premium subsidies, debt forgiveness and the role of private insurers in the program.

Lawmakers are now discussing short-term extensions that would prevent the program from lapsing only weeks before the peak of the Atlantic hurricane season. Without reauthorization before July 31, the program would be unable to issue new flood insurance policies and would operate reduced borrowing authority. It would still be able to pay claims to current policyholders.

Congress has extended the program six times in the last 10 months.

What Summit? A Muted GOP Response, Then Back to Business on the Hill

Royce and Blumenauer’s bill text contains policy provisions, including new rules for community floodplain management programs, flood risk disclosure requirements for home sellers, and modified premium requirements for policyholders who take steps to mitigate their flood risk.

The bill also contains the text of a Blumenauer measure that would require the Government Accountability Office, the government’s watchdog agency, to study the effectiveness of home buyout programs that are used to purchase flood damaged properties. These programs help homeowners who are unable to sell their home because of high flood risk while reducing the NFIP’s risk by removing them from the program.

The Pew Charitable Trusts, a nonprofit public policy group, said it supported Royce and Blumenauer’s bill.

“It is a step in the right direction to improving the financial solvency of the program while also aiming to reduce the impact of flooding on policyholders,” said Laura Lightbody, the director of Pew’s Flood-Prepared Communities initiative.

In the Senate, lawmakers are exploring a stand-alone extension of the NFIP.

The Senate voted in June to include a six-month extension of the flood insurance program in its version of the farm bill, and it voted this month to support the inclusion of the same extension in a three-bill appropriations package that is about to go to conference committee, but neither measure is expected to clear both chambers of Congress in the next two weeks.

GOP Sen. Bill Cassidy of Louisiana said Senate leadership is considering passing a stand-alone NFIP extension bill by unanimous consent, an expedited voting process. “There’s been a hotline to find out who has objections [to an extension], and we’re working on those folks who have objections,” he said.

Cassidy said the stand-alone bill would be similar to the provision attached to the appropriations bill, extending the program for six months. And unlike Royce and Blumenauer’s bill, the proposed Senate extension does not contain any policy provisions.

Louisiana Republican Rep. Garret Graves said he would prefer the Senate’s six-month extension to Royce and Blumenauer’s four-month extension because it would give Congress more time to work on a longer-term reauthorization and create more certainty for homeowners, community planners, construction companies and insurers.

“But certainly I would choose a shorter-term extension over letting the program expire,” he said.

Graves said members should be cautious about including policy provisions in an extension instead of addressing the program in a comprehensive fashion. “I think that would be a mistake to move certain reforms without doing a larger reform package,” he said.

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