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February 26, 2014

Re:       Flood Insurance Affordability Bill Readied for House Action

Dear Mayor:

House Majority Leader Cantor has introduced a modified version of H.R. 3370, “The Homeowner Flood Insurance Affordability Act”.  The legislation is expected to be considered by the full House next week.  The House leadership has informed the National League of Cities (NLC) this morning that they are making some technical changes to the bill, to ready it for a floor vote. NLC will monitor those changes closely and let us know if there are any concerns.  We, in turn, will keep you posted.

The legislation is needed to help ensure that flood insurance rate increases do not adversely impact local communities, while promoting the solvency of the National Flood Insurance Program (NFIP).

Please contact your Congressman and urge them to vote yes. 

Assuming the House bill does pass, it will need to be reconciled through a conference committee with S. 1926, a different version of the bill by the same name that the Senate passed earlier this year.  (See January 31 Dear Mayor letter)  The Senate measure calls for a four year delay in the rate increases pending the completion of the affordability study

A summary of the House bill follows. 

Summary of H.R. 3370, The Homeowner Flood Insurance Affordability Act

The legislation does the following:

  • Reinstates the grandfathering of properties by repealing Section 207 of the Biggert-Waters Act.  This means that all post Flood Insurance Rate Map (post-FIRM) properties built to code at the time of construction will have protection from rate spikes due to new mapping.  By reinstating the grandfathering of properties, there is no longer a need to delay the rate increases.   
  • Prevents FEMA from increasing premiums within a single property class beyond 15% per year. 
  • Requires a 5 percent minimum annual increase on pre-FIRM primary residence policies that are not at full risk. 
  • Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates.
  • Removes the rate increase trigger for properties sold after 7/6/2012 and treats the new property owner as the same as the previous property owner.
  • Applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses to all policies. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP.
  • Funds the affordability study required by Biggert-Waters Act and mandates its completion in two years.
  • Requires FEMA to reimburse policy holders and communities for successful map appeals.

Again, please contact your Congressman and urge him to vote yes next week on H.R. 3370.

Very truly yours,

William G. Dressel, Jr.
Executive Director


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