Congressman Steven Palazzo, (MS-4), Thursday praised Senate approval of H.R. 3370, The Homeowner Flood Insurance Affordability Act, by a vote of 72-22. Thursday’s bill was a clean extension of the measure which Palazzo helped craft with House leaders, and which passed in the House a little over a week ago by a vote of 306-91. The bill passed by such strong margins in both legislative bodies that it heads to the president as a veto-proof measure.
“This bill is what everyday, middle-class Americans - in Mississippi and across the country – have been waiting for,” Palazzo stated. “I applaud the Senate’s strong support of our bill; this is truly a testament to people overcoming politics. I am encouraged by the extensive bipartisan, bicameral results, but real credit belongs to the communities all across the nation who worked with us to make this happen. I am pleased to report this bill truly reflects South Mississippi views and voices. I am proud to have played a part in these compassionate and fiscally responsible reforms that will ensure flood insurance remains affordable and available for those who need it. That has been my goal from day one.”
Palazzo was one of the first legislators to bring attention to unintended rate hikes and flawed F.E.M.A. procedures just a year ago, with the introduction of legislation containing several similar provisions to H.R. 3370, including slower phase-in rates for premiums and more compassionate flood insurance rates for grandfathered and subsidized properties as well as home sales. The bill also contains measures to hold F.E.M.A. accountable for faulty mapping practices, fast-track F.E.M.A. affordability studies, and protect homeowners who appeal faulty F.E.M.A. maps; all of which Palazzo has supported. Despite several key changes to the existing Biggert-Waters Act of 2012, H.R. 3370 is budget-neutral and adds nothing to the deficit.
The bill repeals Section 207 of the law and restores grandfathered rates, making permanent Palazzo’s delay that was recently signed into law as part of the omnibus budget bill. Under Biggert-Waters, homes lost grandfathered rates once a property was sold or maps were changed, resulting in drastic, overnight rate increases in some cases. The new legislation does away with home sale triggers, retroactively refunds home sale increases on pre-FIRM properties, and ties premiums to properties, not people. The House plan would also ensure that F.E.M.A. does not move the goal posts on those who built back to code after storms like Hurricane Katrina.
Palazzo pushed for inclusion of several other measures to hold F.E.M.A. accountable. Those measures include requirements that the agency certify its mapping methodology, expedite an affordability study, reimburse policyholders who successfully appeal F.E.M.A. maps, and establish a flood insurance advocate. Under Palazzo language submitted in 2011, the Technical Mapping Advisory Council, which would certify F.E.M.A. maps, must include adequate representation from the Gulf Coast. F.E.M.A. would also be required to notify communities of remapping as well as which models are being used in the mapping process. Further, F.E.M.A. will also be required to provide an affordability framework within 18 months after the affordability study is completed.
The House-drafted bill would also push F.E.M.A. to restrict rates to equal no more than one percent of home values, with yearly increases for individuals capped at eighteen percent of the previous year's policy. The difference in rate calculations could mean thousands of dollars in annual relief for South Mississippi homeowners.
Below is a list of local entities, industry experts, and national stakeholders that have endorsed the House bill:
Jack Norris, President, Gulf Coast Business Council (excerpted): “H.R. 3370 provides long-term sustainability to the National Flood Insurance Program while balancing the need to provide certainty in the market place to continue to attract and grow businesses along the Mississippi Gulf Coast. ... We appreciate your focused efforts on this issue, and we look forward to the passage of H.R. 3370.”
Mayor Billy Hewes, City of Gulfport (excerpted): “Passage of H.R. 3370 is critical to the City of Gulfport and other shoreline communities across the country. Coastal communities are the economic engines of the country, and certainly in the State of Mississippi, contributing an estimated $6.6 trillion to the nation’s gross domestic product. I applaud your exhaustive efforts and leadership in the U.S. House of Representatives as well as the work of Senator Cochran and Senator Wicker in the U.S. Senate to pass relief measures.”
Mayor A.J. Holloway, City of Biloxi (excerpted): “Passage of H.R. 3370 is critical for the continued viability of our coastal communities and any area that is prone to flooding. We must have long-term affordable flood insurance to sustain our local economies.”
Marty Milstead, Executive Vice President, Home Builders Association of Mississippi (excerpted): “You are to be commended on your efforts to get this critical legislation to the House floor for a vote. H.R. 3370 will provide much needed relief to homeowners, real estate professionals, and our communities, and we appreciate your role in ensuring Mississippi priorities were included in the final version of the bill.”
Janice Shows, President, Mississippi Association of REALTORS (excerpted): “In just the short time since its enactment, the Biggert-Waters Act has led to numerous failed real estate closings and threatened to freeze the real estate markets across Mississippi and the rest of the nation. H.R. 3370 reverses these devastating effects and serves as a lifeline to homeowners…Again, we offer our gratitude for your tireless work toward flood insurance reform over the last year.”
James Ballentine, Executive Vice President for Congressional Relations and Political Affairs, and J. Kevin A. McKechnie, Senior Vice President and Director, Office of Insurance Advocacy, American Bankers Association (excerpted): “The American Bankers Association and the American Bankers Insurance Association strongly supports H.R. 3370, the Homeowner Flood Insurance Affordability Act being taken up by the House of Representatives this week. This important bill addresses National Flood Insurance Program (N.F.I.P.) affordability issues and corrects other unintended consequences resulting from earlier reform efforts.”
National Association of Federal Credit Unions “Thank you for scheduling a vote on the Homeowner Flood Insurance Affordability Act of 2014 (H.R. 3370). We are already hearing reports from our member credit unions that sharp rises in premium increases are materializing and time is of the essence in addressing this issue.”
Mr. James Tobin, III, Senior Vice President and Chief Lobbyist, National Association of Home Builders (excerpted): “We are especially concerned about unaffordable premiums and inaccuracies in F.E.M.A.’s new flood maps. These issues are seriously impacting the construction, remodeling and sale of homes throughout the country at a time when the housing industry is beginning to recover. The Homeowner Flood Insurance Affordability Act as amended, resolves these issues by providing a more affordable rate structure for policyholders, and repeals point-of-sale rate increases… These provisions will help prevent undue hardship on the recovering housing market, protect home values and increase the viability of the N.F.I.P.”
Mr. Steve Brown, 2014 President, National Association of REALTORS® (excerpted): “On behalf of over 1 million members, the National Association of REALTORS® strongly urges you to vote for H.R. 3370, the Homeowner Flood Insurance Affordability Act with an amendment. The bill as amended would resolve most of the unintended consequences and uncertainties created by implementation of the Biggert- Waters law and still raise revenue. It would correct the unintended consequences by repealing key provisions that are driving the most excessive and inaccurate rate increases imposed on recent home purchases. It would also require that the Federal Emergency Management Agency (F.E.M.A.) refund excessive premiums to those who already bought a home but were not warned by F.E.M.A. of the increase before purchasing the property.”
Mr. Michael Hecht, President and CEO of Greater New Orleans, Inc., on behalf of the Coalition for Sustainable Flood Insurance: “The legislation proposed by the House of Representatives achieves many of our most important goals. The bill should both protect property owners who have played by the rules and settle real estate markets, while preserving the intent to offer flood insurance at true risk rates. Our coalition will work towards bi-partisan passage of this legislation: ensuring flood insurance remains affordable, while protecting the solvency of the N.F.I.P.”
Mr. Camden Fine, President and CEO, Independent Community Bankers of America (excerpted): “On behalf of the 7,000 community banks represented by I.C.B.A., I write to express our support for the Homeowner Flood Insurance Affordability Act of 2014 (H.R. 3370), introduced by Rep. Michael Grimm, which would provide relief from flood insurance premium ‘shock’ that is depressing home values and freezing the market in certain communities. Importantly, H.R. 3370 will provide this relief while ensuring the actuarial soundness of the National Flood Insurance Program (N.F.I.P.).”