Congress Reauthorizes 5-Year Flood Insurance Bill

By CnAgri2012-07-02 20:35:31 Print

Senator John Hoeven announced that after multiple extensions since 2008, Congress has passed a long-term reauthorization of the National Flood Insurance Reauthorization Program (NFIP), a bipartisan 5-year flood insurance reauthorization measure for the nation that fully pays for itself, increases the financial stability of the program, and provides security for millions of Americans living in special flood hazard areas.

The NFIP bill was included as part of a larger package of legislation that also included the national transportation bill and a measure that will retain low interest rates on student loans. The final bill passed the Senate in a 74 to 19 vote.

Senators Hoeven, Mark Pryor (D-Ark.), Pat Toomey (R-Penn.) and Kent Conrad worked to modify the bill to spare millions of homeowners and businesses across the country from having to purchase flood insurance if they live in so-called "residual risk" areas already protected by sound, federally certified flood protection. Fargo, Williston, Grand Forks, Minot and Mandan -- 17 North Dakota communities in all -- would have been impacted by the new mandate included in the original version of the bill. The flood insurance bill also contains a provision added by Hoeven that will give Fargo and Cass County flexibility to construct flood protection where needed.

In addition, for communities that were damaged in the Missouri River flooding of 2011, the bill provides NFIP coverage for individuals who purchased their flood insurance more than 30 days before experiencing any flood damage, rather than 30 days before FEMA makes a flood in progress designation. Further, the measure requires a report on FEMA's use of Flood in Progress determinations, and requires FEMA to develop new procedures for informing NFIP policyholders when a Flood in Progress has been declared.

The bill also phases in market-based premium rates over five years; requires the Federal Emergency Management Agency and General Accountability Office to study the private sector's capacity to help manage flood risks; and requires a study of viable options to encourage private market involvement.

"The Flood Insurance Reauthorization bill is vitally important for our state and for our nation," Hoeven said. "We worked to ensure that it works well for North Dakota and other states that have already built, or plan to build, extensive flood protection to safeguard their communities, as well as for communities on the Missouri River hard hit by flooding in 2011."

Earlier in the week, Hoeven spoke on the floor of the U.S. Senate to urge removal of the proposed mandate. "In our state we understand flooding," Hoeven said. "We understand the challenge. And we strongly support reauthorizing the national flood insurance legislation, but we need to get it right."

Hoeven said many North Dakota communities have already invested, or plan to invest, hundreds of millions of dollars in flood protection infrastructure and should not have to pay twice for protection. Under the original bill, residents and businesses would have had to pay first through their local taxes for the infrastructure that protects them, and again, virtually every year, through a government-mandated insurance purchase if the requirement were included in the final bill. Hoeven said the mandate would also have adversely affected commerce in the protected areas by adding another expense for businesses.

"A mandate to buy insurance will discourage businesses from building or rebuilding in an area certifiably protected by flood infrastructure," Hoeven said. "That will reduce a community's revenue base and impede new opportunities to create jobs and economic activity, often in a community already struggling to recover its economic base."

Through the Flood Disaster Protection Act of 1973, Congress created the National Flood Insurance Program to make flood insurance available when private insurance is unavailable. Special Flood Hazard Areas are generally areas that FEMA determines to have a 1 in 100 or greater chance of flooding in a given year. More than 5.5 million people in communities across the U.S. currently hold flood insurance policies, including 21,000 North Dakotans.