LoBiondo Details Flood Insurance Reform Effort

OCEAN CITY – Congressman Frank LoBiondo (R-2nd) hosted an informational session at the Music Pier March 10 to discuss the efforts of getting the Homeowner Flood Insurance Affordability Act through the House of Representatives, and what comes next in the process, before the bill becomes law. Local residents, insurers, realtors and elected officials gathered to show support for the bill, which could go to the Senate as soon as this week.
“What a twisted road it took to get here,” LoBiondo quipped as he opened the meeting. He started by thanking Senators Cory Booker (D-NJ) and Robert Menendez (D-NJ) for their support. He said that Menedez “Set the foundation for our bill in the House.”
LoBiondo had nothing but praise for his Congressional colleagues, as he touted the bill’s “wide bipartisan support.” The bill, which passed the House last week, 306-91, repeals large flood insurance rate increases mandated by the Biggert-Waters Act of 2012.
LoBiondo explained the pressing need for the legislation, “The NFIP (National Flood Insurance Program) was $25 to $30 billion in the red, before Katrina. That insolvency was being made up for by incredibly insane increases in premiums.” He added that his office had received many confirmed reports of flood insurance premiums exceeding $30,000 per year. LoBiondo reminded everyone that a key component of this bill is retroactivity. Policyholders who have already begun paying higher premiums may seek a refund from FEMA for the excess charges.
LoBiondo discussed the spending considerations in this type of legislation. He explained the Congressional Budget Office’s (CBO) scoring system. In order to keep a high score, the bill cannot add to the deficit. The CBO reports that the bill will decrease direct spending by $165 million over five years, and have no budgetary affect over 10 years. This is largely due to reserve fund assessments of $25 per year for primary residences and $250 per year for vacation homes and businesses. “Although not a perfect piece of legislation, the bill is nonpartisan, bicameral, common sense, fiscally responsible, and it solves the problem,” LoBiondo said.
Freeholder Director Gerald Thornton, who has actively campaigned for the legislation throughout the state, thanked LoBiondo for his support. “Do you know how hard it is to get legislation passed with this kind of margin?” Thornton asked. He then told the crowd to “Savor this moment.” Joining the discussion was Rep. Chris Smith of the 4th Congressional District, which includes parts of Ocean, Monmouth, and Mercer Counties. He called House passage of the bill “a major win for all homeowners.”
Aside from repealing rate increases, the bill also permanently removes the home sale/new policy rate increase trigger for primary residences, and caps individual policy rate increases. It also includes some general affordability measures, such as high deductible options and monthly payment plans. Cape May Mayor Edward Mahaney focused on the impact the bill has on real estate, small business, tourism and economic growth in Cape May County, saying, “This allows us to be sustainable now.”
Phil Guenther, Mayor of Brigantine, said, “This bill goes along way to restoring hope in our communities.”
LoBiondo expects the bill to pass the Senate when it goes to the floor, which he is hopeful will be late this week. Along with the two Senators from New Jersey, the bill has the support of many in flood-prone states, such as Sen. David Vitter (R-La.), and Sen. Bill Nelson (D-Fla.). The bill also has the support of the National Association of Realtors, the American Banking Association, and the National Association of Home Builders.
To contact Don Tozer, email dtozer@cmcherald.com.