Tag: National Flood Insurance Program (NFIP)

Tax Measures and TRIA Among Year-End Policy Rush

Posted on by Trey Jackson

Capitol Hill
Congress faces a Dec. 20 deadline to fund the government or risk a shutdown as the impeachment process continues in the House, with a likely trial in the Senate beginning in January.

  • Funding for the National Flood Insurance and EB-5 investor programs are currently operating under a four-week spending bill signed by President Trump on Nov. 21.  Without a spending bill or a “Continuing Resolution” (CR) extending current funding, the programs will shutdown on Dec. 21 until Congress reaches a resolution. (Roundtable Weekly, Nov. 22)
  • Several legislative measures – including an end-of-year tax policy bill and reauthorization of the Terrorism Risk Insurance Act (TRIA) – may compete for inclusion in a must-pass “omnibus” spending package. Yet lawmakers may not have enough time to complete fiscal 2020 appropriations before current funding runs out in two weeks.  Another CR is a possibility before Congress breaks for the holiday.
  • The contentious issue of appropriating Department of Homeland Security (DHS) funds for a wall on the border with Mexico remains a sticking point in negotiations. This same issue led to a historic, 35-day government shutdown from Dec. 22, 2018 to Jan. 25, 2019.
  • This year, the Trump Administration has requested $8.6 billion for Fiscal Year 2020 to build the wall – and an additional $3.6 billion to restore military base funding that was previously transferred toward partial wall construction.  An administration official said President Trump will not sign any nondefense bill until funding for DHS and a border wall are resolved.  (CQ, Dec. 4)
  • Among the legislative measures of importance to commercial real estate that may be included in a year-end omnibus are tax extenders and technical corrections.
  • Negotiations on a tax package and extenders have been difficult, according to Senate Finance Chairman Chuck Grassley (R-IA). “It’s different this year from other years,” he said. (Politico, Dec. 5)
  • House Ways and Means Committee Chairman Richie Neal (D-MA) said yesterday that some technical corrections to the 2017 tax overhaul law could become part of a year-end tax bill.  “I’m interested in some technical corrections,” Neal said, adding that they could include a fix to an error that prevents restaurants and retailers from immediately expensing the cost of interior renovations.  (BGov Tax, Dec. 5)
  • A top legislative priority for CRE that is also outstanding is a seven-year TRIA reauthorization, which passed the House on Nov. 18 (H.R. 4634) as the Senate Banking Committee advanced a similar bill (S. 2877) on Nov. 20.  (Roundtable Weekly, Nov. 22)
  • The Real Estate Roundtable is working with its partners in the Coalition to Insure Against Terrorism (CIAT) to urge Senators to include the TRIA reauthorization in a possible year-end spending package.  CIAT sent a letter this week to all Senators urging them to co-sponsor S. 2877 and secure its passage before the end of 2019. (CIAT Letter, Dec. 2)
  • The Roundtable and its CIAT partners continue to meet with Senate offices to encourage increased support for S. 2877. Sen. Thom Tillis (R-NC) is the lead sponsor, with 17 bipartisan cosponsors.
  • As Congress attempts to juggle many legislative priorities – including an updated version of a trade agreement with Mexico and Canada (USMCA) and a bill on prescription drug costs – the pressure to pass multiple appropriations bills funding government agencies may lead to a Continuing Resolution extending current funding.

House Majority Leader Steny Hoyer (D-MD) told reporters this week, “I don’t want to contemplate having bills pushed over [into 2020] because we can’t get agreement.”  (CQ, Dec. 4)

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House Committee Passes Bill Extending National Flood Insurance Program for Five Years

Posted on by Trey Jackson

The House Financial Services Committee on June 12 unanimously approved legislation that would reauthorize the National Flood Insurance Program (NFIP) for five years; spur the availability of private flood insurance; reduce costs for lower-income policyholders; and require updated flood zone maps for coverage.  (Wall Street Journal, June 12).  Next, the House of Representatives will consider the measure although the timing of a possible vote is not clear. ( Section-by-Section Committee Bill Summary )    

The NFIP would be reformed and reauthorized for five years under H.R. 3167.

  • The NFIP has operated under a series of temporary extensions since 2017.  On June 6, President Trump signed a disaster relief bill that extended the program until Sept. 30, the end of the fiscal year.  
  • Following negotiations between Committee Chairwoman  Maxine Waters  (D-CA) and Ranking Member Patrick McHenry (R-NC), the House panel approved the flood insurance reauthorization bill ( H.R. 3167 ). (House Financial Services Committee News Releases,  June 5   and  June 10 ) 
  • “The ranking member and I are convinced we can do a lot better than short-term extensions,” Waters said. “So, we are very pleased we put forth a bill today that is supported by both sides.” (CQ, June 12) 
  • The Real Estate Roundtable and 14 other industry groups urged Congress in a  June 12, 2017 comment letter  to reauthorize and reform the NFIP to help protect the nation’s commercial and multifamily business-owners, their properties, residents and the jobs they create from the financial perils of flooding. 
  • Under the current NFIP, commercial property flood insurance limits are very low – $500,000 per building and $500,000 for its contents.  Lenders typically require this base NFIP coverage, and commercial owners must purchase Supplemental Excess Flood Insurance for coverage above the NFIP limits. A niche market of carriers typically provides this type of excess coverage. The Roundtable and its coalition partners support NFIP reauthorization with the inclusion of provisions that permit the “commercial exemption.” 
  • The Roundtable has long advocated for a voluntary exemption for mandatory NFIP coverage if commercial property owners have adequate flood coverage.
  • Sec. 402 of H.R. 3167 – Optional Coverage for Umbrella Policies – addresses commercial properties. 
  • John Smaby, President of the National Association of Realtors, commented on the importance of the legislation: “… including policies that address mapping, mitigation and private flood insurance, and we look forward to move responsible NFIP reforms through the House and Senate in the coming weeks” (NAR, June 13)

    The Roundtable will continue to work with lawmakers and our coalition partners to assist with NFIP reforms and a long-term reauthorization that help protect the nation’s commercial and multifamily business-owners, their properties and residents.