Tucked away on the west side of the small town of Broad Channel in the middle of Jamiaca Bay is a narrow, dead end, street that goes by the name of West 12th Road. Those of us who live there know that the nice part about living in a small town is that when you are not quite sure what is going on, someone else always does!
[Peter J. Mahon West 12th Road, Broad Channel]
The U.S. Senate is expected to take a key vote Wednesday on a bill that would delay some of the flood insurance rate hikes triggered by the Biggert-Waters Flood Insurance Reform Act of 2012.
The procedural vote will determine whether the Senate will proceed with debate on the Homeowner Flood Insurance Affordability Act (S.1846). Sixty votes are required to move the measure to the floor for a “yes-no” vote.
The Senate bill would postpone for four years some of the rate hikes that are beginning to hit primary residences. It would also delay increases for properties sold after July 6, 2012, the start date of the Biggert-Waters act.
The Biggert-Waters act is an attempt to make flood insurance pricing more cost-based by eliminating premium subsidies that some property owners have enjoyed for decades.
The Senate bill would delay premium increases for four years, or six months after the Federal Emergency Management Agency (FEMA) proposes policy changes and regulations to address affordability issues, which the Congressional Budget Office (CBO) estimates would occur during calendar year 2018.
The Senate bill would not block rate increases for most business properties, secondary homes or repeat flood properties. Rates on those properties are scheduled to increase by 25 percent per year until they reach full cost.
The CBO estimates that the change in premium rates proposed by S. 1846 would reduce net income to the National Flood Insurance Program (NFIP) by about $2.1 billion over the 2014-2024 period. The NFIP is already $24 billion in debt, which FEMA Director Craig Fugate reminded Congress when urging members of the House Financial Services Committee not to delay the increases.
CBO estimates that the NFIP would borrow and spend an additional $900 million over the 2014-2018 period because of this legislation. However, because total borrowing is limited under current law, additional amounts borrowed over the next five years would be offset by less borrowing in later years, resulting in no net effect through 2024, according to CBO.
The Senate bill is sponsored by Sen. Robert Menendez, D-N.J., and has 19 Democratic and 8 Republican co-sponsors.
A group of senators, many from from coastal states, held a press conference yesterday to rally support for the bill.
The House has a similar but limited proposal that would delay rate increases for only six months. Sponsored by Rep. Michael Grimm, R-N.Y, this bill (HR 3370) has 117 Democratic and 51 Republican co-sponsors but faces opposition from key Republicans including Rep. Jeb Hensarling (R-Texas), who chairs the House Financial Services Committee that has jurisdiction over flood insurance.
Among those now calling for a delay is an original sponsor of the reform law, Rep. Maxine Waters, D-Calif.
In addition to Sen. Menendez, the senators co-sponsoring the Senate bill are: