U.S. Representative Maxine Waters Announces Deal to Repair National Flood Insurance Program

Oct 27, 2013

Congresswoman Maxine Waters, Ranking Member of the U.S. House Financial Services Committee, has announced a bipartisan legislative solution to fix the National Flood Insurance Program (“NFIP”) and ensure changes are implemented affordably.  In essence, the legislation calls for a four-year delay to the program and requires the Federal Emergency Management Agency (“FEMA”) to complete an affordability study and propose regulations that address affordability issues.

The bipartisan deal comes after several weeks of negotiations with both Democrats and Republicans in the House and Senate.  On October 9, in the midst of the government shutdown, Representative Waters convened a bipartisan meeting of nearly 20 House Members, as well as Senate staff, to build consensus around an agreement to delay and fix the program. Today, October 26, 2013, Representative Waters convened a conference call to finalize the legislation.

“Over the past several months, I have felt the harm and heartache that many Americans have already experienced as a result of changes to the National Flood Insurance Program.  From the start, I have made clear that I would lead the effort to fix the unintended consequences of the Biggert-Waters Flood Insurance Reform Act,” she said, adding, “Today’s bipartisan agreement is an excellent start.  This legislation would ensure FEMA undertakes the implementation of changes to the National Flood Insurance Program in an appropriate way that will not cause harm to homeowners.  The centerpiece of this legislation is a four-year delay in most rate increases.  This delay would allow FEMA to get their act together by mapping in a manner that is actually accurate, and reimbursing those who can prove that FEMA’s maps were incorrect.  In addition, the legislation requires that FEMA complete an affordability study that would report to Congress on how rate increases will affect homeowners, so lawmakers can make an appropriate determination about the implementation of changes in the future.  This bill is critical and much needed. I urge House and Senate leaders to take up this measure without delay.”

The legislation will be released early next week in the House and Senate.  It will impose a delay likely to total four years for the most vulnerable properties, by delaying implementation of rate increases until two years after FEMA completes an affordability study, which was mandated in Biggert-Waters, but not undertaken.

In addition, the legislation requires FEMA to propose regulations that address the identified affordability issues within 18 months after the completion of the study and establishes a six-month moratorium thereafter to provide for Congressional review.

The delay applies to: primary, non-repetitive loss residences that are currently grandfathered; all properties sold after July 6, 2012; and all properties that purchased a new policy after July 6, 2012. 

FEMA has estimated it will take two years to complete the affordability study before regulations can be issued and reviewed by Congress, meaning rate increases would be delayed for approximately four years in total.

In addition, the legislation:

  • Allows FEMA to utilize NFIP Funds to reimburse policyholders who successfully appeal a map determination.
  • Eliminates the 50 percent cap on state and local contributions to levee construction and reconstruction
  • Protects the so-called “basement exception,” which allows the lowest proofed opening in a home to be used for determining flood insurance rates.
  • Establishes a Flood Insurance Rate Map Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process.
  • Requires FEMA to certify that the agency has fully adopted a modernized risk-based approach to analyzing flood risk.



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