WASHINGTON — The U.S. Senate on Thursday easily passed legislation to delay massive increases in flood insurance premiums and sent the bill to the House of Representatives, where a much less certain fate awaits the bill.
Senate Bill 1926, known as the Homeowners Flood Insurance Affordabilty Act, passed 62-37, largely on partisan lines. Fifty-five Democrats and 12 Republicans voted for the bill, with one Democrat and 31 Republicans opposed.
Among lawmakers in coastal states, only Texas Sens. John Cornyn and Ted Cruz, Alabama Sens. Jeff Sessions and Richard Shelby and Delaware Sen. Thomas Carper voted against the bill. All but Carper are Republicans.
The bill delays premium increases for primary residences for four years while the Federal Emergency Management Agency conducts a affordability study to assess the impact of higher rates on homeowners.
The delays do not affect rate increases for second homes or properties that have seen repeated losses due to flooding.
“I am delighted that the Senate came together in a bipartisan manner to protect millions of Americans from the steep increases in their annual flood insurance premiums,” said Sen. Johnny Isakson, a Georgia Republican and one of the bill’s co-sponsors. “Without action, many Americans and Georgians could lose their homes or see their home values plummet. I look forward to working with my friends in the House to ensure that flood insurance is both affordable and sustainable for the American people.”
The bill aims to soften the blow of the Biggert-Waters Flood Insurance Reform Act of 2012. The act was intended to shore up the finances of the National Flood Insurance Program, which owed the federal government billions after paying out claims for hurricanes Katrina and Sandy.
Biggert-Waters phased out subsidies for properties built before the adoption of flood maps over four to five years.
The first round of increases hit policyholders in 2013 and caused sticker shock. The act also eliminated subsidies when a property was sold. Real estate professionals in Galveston County saw some potential sales scuttled after prospective buyers saw premium quotes in the thousands.
In the Senate, S1926’s co-sponsors had to fight off an amendment from Pennsylvania Republican Pat Toomey.
The senator’s amendment would have spiked the four-year delay, while increasing the number of years for phasing out the subsidies. His amendment would cap increases at 25 percent of the current premium per year.
Biggert-Waters capped increases at 20 percent to 25 percent of the total increase. Toomey’s amendment would also add a $40 surcharge to make up for revenue lost by stretching out the increases.
Toomey said S1926, which was sponsored by Sen. Robert Menendez, seeks to undo the Biggert-Waters reforms, not just delay them.
“The Menendez approach — the underlying bill we are debating today — deals with this, but it deals with this in the wrong way,” Toomey said on Wednesday during debate on his amendment.
“It deals with this by completely suspending all the reforms. It completely dispenses with the idea that we should move toward an actuarially sound program.”
The amendment failed 34-65.
Now the bill goes on the House, where leadership already has expressed it opposition. House Speaker John Boehner earlier this month told The Associated Press the House wouldn’t consider a delay of Biggert-Waters, but was open to “alternatives” to ease the burden.
Texas Republican Jeb Hensarling, chair of the House Financial Services Committee, also had come out against a delay. Further opposition may lay at the White House, where the Office of Management and Budget earlier this week came out opposing a delay in the Bigger-Waters reforms.
Senators supporting the bill wasted no time in pressuring House members to support the bill. Louisiana Democratic Sen. Mary Landrieu, one of the bill’s most vocal supporters, called for her constituents to call House members to voice their support. Other senators did the same.
“The problem is going to be down on the other end of that hall,” said Sen. Bill Nelson, D-Fla., referring to the House.
“The Speaker of the House has already said that he doesn’t like (the bill).”
“Our fight is not over,” Menendez said after the vote in a statement.
“Now we must call on Speaker Boehner and the House to pass this legislation so we can send it to the President to sign it into law.”
How they voted
WHAT: S 1926, the Homeowners Flood Insurance Affordability Act
VOTE: Passed 67-32, with one member not voting
NAY-5 (Cornyn, Cruz, Session, R-Ala., Shelby, R-Ala., Carper, D-Del.)
YEA-Democrats 55, Republicans 12
NAY-Democrats 1, Republicans 31