FLOOD INSURANCE - November 17, 2017 - Roundtable Weekly

House Passes Bill to Renew and Revamp National Flood Insurance Program; Senate Prospects Uncertain  

The U.S. House of Representatives on Tuesday voted to pass the 21st Century Flood Reform Act (H.R. 2874), which would reform and reauthorize the National Flood Insurance Program (NFIP) for five years. (House Financial Services Committee, summary of the 21st Century Flood Reform Act and the Manager's Amendment)

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The House flood insurance bill,would authorize funding for flood mitigation assistance; lower flood insurance rates, boost the private flood insurance market, modernize flood zone mapping; and encourage flood mitigation practices for homebuilders and land developers.

The House bill, passed largely along party lines (237-189), would authorize funding for flood mitigation assistance; lower flood insurance rates, boost the private flood insurance market, modernize flood zone mapping; and encourage flood mitigation practices for homebuilders and land developers.  (Wall Street Journal, Nov. 14)  

The Roundtable signed on to a 16-member real estate industry coalition letter on Nov. 8 to all members of the House in support of the bill.  Previously, The Roundtable and 14 other industry groups urged Congress in a June 12 comment letter  to reauthorize and reform the NFIP to help protect the nation's commercial and multifamily business-owners, their properties, residents, and the jobs they create from the financial perils of flooding. (Roundtable Weekly, June 23) 

The Trump administration signaled its support for H.R. 2874, yet emphasized further reforms affecting CRE, in a Nov. 13 statement issued by the Office of Management and Budget (OMB): "This legislation ensures timely reauthorization of the National Flood Insurance Program and takes important steps towards common-sense reform.  The Administration continues to support more immediate accounting for past repeated flood claims as well as additional measures to expand the private flood insurance market, such as by phasing out the availability of Federal flood insurance for newly constructed buildings and commercial buildings, and by encouraging private risk pooling through reforms to existing law." 

Although the NFIP was funded last month with an additional 16 billion dollars in the wake of hurricanes Harvey, Irma and Maria, the program will sunset on Dec. 8 when current funding for the government will expire. Additional NFIP funds are needed as states and Puerto Rico continue to recover from extensive storm damage. 

Senate Banking Committee Chairman Mike Crapo (R-ID), whose committee has jurisdiction over insurance, said last month that if a bipartisan consensus is not reached before Dec. 8, the program could face a second short-term extension in the next disaster aid supplemental appropriations package. (Bloomberg Law, Nov. 14) 

Crapo added that some private-sector provisions in the House bill present challenges for moving an NFIP reform bill forward in the Senate. "We continue to try to find a balance where we can get the votes necessary to move a bill. And I hope the House bill will be helpful because it'll show some progress. But we have a different set of dynamics over here, so we're still working on it," said Crapo. (CQ, Nov. 14) 

Prospects for the legislative and regulatory efforts aimed at renewing and reforming the National Flood Insurance Program will be discussed when The Roundtable's Real Estate Capital Policy Advisory Committee (RECPAC) meets on November 30 in New York City.

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