Opponents of flood insurance increase delays like tax-preferred disaster savings accounts

By Bruce Alpert, NOLA.com | Times-Picayune 

February 4, 2014

WASHINGTON - A group opposing legislation to delay flood insurance premium increase for four years Tuesday endorsed legislation that would create tax-preferred savings accounts that homeowners could use for disaster mitigation -- such as raising homes - and recovery efforts.

The legislation was introduced Tuesday by Sen.Jim Inhofe, R-Ok., one of the 32 senators who voted no last week when the Senate approved 67-32 a bill to delay flood insurance increases resulting from 2012 the Biggert-Waters law. Supporters said the delay would allow Congress and FEMA to develop a system to help solidify the finances of the National Flood Insurance Program without making rates unaffordable for some constituents.

SmarterSafer.org, a coalition of insurance companies, mitigation firms, environmental groups and groups urging reduced government spending, oppose the delaying legislation as putting off badly news reforms. It quickly embraced the Inhofe proposal.

"By empowering individuals to find cost-effective ways to plan for natural disasters, Sen. Inhofe's bill, along with Rep. Dennis Ross's bill in the House, will ease the burden on federal disaster aid and save taxpayers money," the group said in a statement. "Disaster mitigation protects lives and property, and significantly lowers the cost of disasters. This bill is a strong step in the right direction and we applaud Sen. Inhofe for his novel approach."

Backers of legislation to delay the premium increases resulting from Biggert-Waters argue that no establishment of tax breaks will be sufficient to help homeowners who face huge increases in flood insurance premiums. 

But Inhofe said his bill could provide major help to homeowners. His bill is called the Disaster Savings Account Act (DSA).

"Whether it's a retirement or health savings account, Americans understand the importance of preparing and setting aside funds for the future and these accounts have long been incentivized with federal tax relief," Inhofe said. "The DSA Act is a common-sense solution to help mitigate the costly impacts of natural disasters by affording homeowners the opportunity to set aside $5,000 a year in a tax-preferred account for disaster prevention or revitalization. It empowers Americans to take their security into their own hands..."