A panel of the Senate Appropriations Committee has voted toeffectively stop the Federal Emergency Management Agency fromimplementing a provision of the 2012 law reauthorizing the NationalFlood Insurance Program that mandates phased-in rate increases forgrandfathered properties.

The provision barring FEMA from implementing Sec. 207 of the2012 Biggert-Waters Act was passed by the Senate AppropriationsSubcommittee on Tuesday and will be considered by the fullcommittee on Thursday.

The subcommittee is chaired by Sen. Mary Landrieu, D-Louisiana,who had pushed a stronger three-year delay. But shesaid she did not want to “risk losing an opportunity for aone-year” delay. She said a lot of senators from non-coastal statesstill support the legislation passed last year to make the floodinsurance program more financially self-sustainable.

The legislation passed out of the subcommittee Tuesday alsoincludes about $10 million more than the president's proposedbudget for modernizing flood maps to help ensure they fully reflectlocal investments in flood protection infrastructure.

Landrieu said she will still push for enactment of her“Strengthen, Modernize and Reform the National Flood InsuranceProgram” (SMART NFIP) Act, which industry officials oppose, andwhich would substantially weaken the reforms imposed by the 2012bill.

SMART NFIP, which would at a minimum delay all rate increasesimposed by the 2012 law, and would impose a high standard on FEMAfor implementing the rate increases at all.

Landrieu's amendment passed Tuesday would bar the rate increasesby preventing FEMA from using federal funds to implement Sec.207.

But a FEMA official, who declined to be identified by name,said Congress has appropriated taxpayer funds for NFIPpurposes only once: $1 billion appropriated in the 2003 legislationextending the program for five years. The funds were used tofinance remapping for areas feared to be at greater risk forflooding.

However, Matthew Lehner, a spokesman for Landrieu, said FEMAofficials have the office the amendment would barimplementation of the rate increases, if enacted.

FEMA officials declined to comment.

Landrieu said her amendment would affect those “homes andbusinesses that were built to code and were subsequently placedinto higher risk areas on a flood map,” in announcing that thesubcommittee she chairs had passed the provision.

A similar provision was added to the House version of theHomeland Security appropriations legislation through an amendmentby Rep. Bill Cassidy, R-La., who is running against Landrieu forher seat in 2014.

Some of the rates date back to before 1969, when Congress firstauthorized that NFIP rates be based on updated maps that reflectedthe chances that a property was in a primary flood zone.

But the provision in the appropriations bill would only be atemporary fix.

Her “SMART NFIP Act” would be even more sweeping in rolling backthe provisions of the 2012 law.

Jimi Grande, senior vice president of federal and politicalaffairs for the National Association of Mutual Insurance Companies,cautioned that “any effort to delay the reforms enacted last yearcould ultimately weaken the NFIP.”

Grande said the reforms were designed to move the NFIP towardsfiscal stability and at the same time to show policyholders thetrue risk they face from flooding.

But, the “SMART NFIP Act” would delay all flood insurancepremium increases authorized in 2012 legislation.

This would include the requirement that flood insurance premiumson second homes and businesses be phased out over four years.

It would also block a mandate to start phasing out subsidies onproperties whose rates were grandfathered when the FederalEmergency Management Agency, which runs the program, was orderedstarting in 1974 to develop maps showing the risks of flooding in aparticular area, and to base rates on those maps.

Under B-W, there is no time limit for phasing in the rateincrease for subsidized properties.

Under the 2012 legislation, rates can now go up 20 percent ayear, from 10 percent under the old program. Therefore, theLandrieu bill would bar allowing the rates to go up indefinitelyuntil they are actuarially-based.

It would also bar the NFIP from raising rates up to 20 percent ayear, effective in 2014, from the current maximum of 10 percent ayear.

Those increases would be blocked until six months after FEMAconducts an affordability study on the higher premiums.

The Landrieu bill would also repeal provisions in the 2012federal flood insurance bill that ended subsidized flood insurancerates when a parcel in a high risk area is sold.

That would make many Louisiana homes unsellable, she said.

Her bill would also strike a provision blocking the rebuildingof community facilities destroyed in a disaster when the locationis in a high-risk area.

Landrieu aides said the delay, along with the completed study,would provide Congress with the information it needs to develop alaw that helps make the flood insurance program more sustainablewithout putting insurance out of the price range of homeowners andbusinesses.

This article was originally posted at PropertyCasualty360.com,a sister site of Credit Union Times.